Saaticho Pty Ltd v Evr Group Pty Ltd
[2022] VSC 45
•8 February 2022 (delivered ex tempore, revised 11 February 2022)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2022 00282
| SAATICHO PTY LTD (ACN 165 548 336) & ORS (according to the attached Schedule) | Plaintiffs |
| -and- | |
| EVR GROUP PTY LTD (ACN 605 728 701) & ORS (according to the attached Schedule) | Defendants |
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JUDGE: | John Dixon J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4, 8 February 2022 |
DATE OF JUDGMENT: | 8 February 2022 (delivered ex tempore, revised 11 February 2022) |
CASE MAY BE CITED AS: | Saaticho Pty Ltd & Ors v EVR Group Pty Ltd & Ors |
MEDIUM NEUTRAL CITATION: | [2022] VSC 45 |
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INTERLOCUTORY INJUNCTION – Tower crane incursions into plaintiffs’ airspace from adjoining construction site – Trespass – Balance of convenience – Which party to bear risk of uncertain variables precluding the cessation of incursions.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Ms R McCarthy of Counsel | DSA Law |
| For the First and Second Defendants | Ms L Collaris of Counsel | YSL Lawyers |
| For the Third Defendant | Mr D Cain (Solicitor) | KCL Law |
HIS HONOUR:
The first plaintiff, Saaticho Pty Ltd (‘Saaticho’), is the registered proprietor of land in Keilor Road, Essendon. That property is comprised of a shop front (‘retail premises’) and a residential home at the back of the property which is occupied by the second and third plaintiffs and their family (‘residential property’). The second and third plaintiffs are the directors and shareholders of Saaticho.
The first defendant, EVR Group Pty Ltd (‘EVR’), is the owner of the adjoining property in Keilor Road (‘construction site’). Its director is Mr Jose Romero. The second defendant, Lucas Emilio De Matteis Pty Ltd (‘LEDM’), was the builder who contracted with EVR to construct a five storey block of serviced apartments on the adjoining property.
On 17 January 2021, a tower crane was erected on the construction site. This crane can, and does, pass through the air space above the first plaintiff’s property, either when it is being used for the purposes of the construction works or when it is in neutral mode and not immediately in use.
I pause to note that the tower crane is a very substantial piece of equipment. When it is not in use it is designed to swing to accommodate the prevailing weather conditions and avoid damage to its gears. This is described as ‘weathervane mode’.
On 1 February 2021, the plaintiffs entered into an agreement with EVR and LEDM by which the first plaintiff granted a license to EVR and LEDM to use the airspace above the first plaintiff’s property in return for LEDM and EVR, amongst other obligations, finding suitable alternative accommodation for the second and third plaintiffs’ family, and paying a licence fee of $800 per week. The relationship between the parties was not particularly cooperative but it is unnecessary to explore the conflict that arose between them in any detail.
By 21 March 2021, the plaintiffs’ family had moved into accommodation sourced, and apparently paid for, by EVR in Niddrie. However, during the period of residence at Niddrie, the plaintiffs regularly returned to their residential property to care for the family dog and do their laundry. Neither activity was possible at Niddrie.
The relationship began to sour in August 2021. On 11 August 2021, EVR terminated its contract with LEDM. The builder relinquished possession of the site and the tower crane and EVR returned to possession of the site. In late August 2021 it contracted with Foursquare Construction Management Pty Ltd (‘Foursquare’) to complete the construction works. Foursquare then had certain rights pursuant to the contract with EVR, that entitled it to possession of the construction site for the purposes of completing the construction works and, accordingly it had access to, and control over, the crane. There was no evidence that Foursquare was entitled to trespass on the first plaintiffs’ air space. The precise arrangement and the implications of it between EVR and Foursquare ultimately remain a question for trial.
At about the same time, EVR ceased to pay the license fee to the plaintiffs. There was some suggestion that LEDM is now deregistered, but there was no evidence before the court supporting that proposition.
When the license fee ceased to be paid, the second plaintiff, Ms Anna Cho, discovered that there was a new builder and communicated with Neil Medhurst, who she believed was a representative of the new builder, about the license fee arrears. Subsequently, Nik Rakonjac of CoPlan Mgt Pty Ltd, the senior project manager of the development, confirmed to the plaintiffs that the agreement would be honoured until the end of September 2021 (because there was a new builder coming on board the project and because the tower crane was due to come down by mid-September).
Once it entered into its contract with EVR, and recommenced the construction works, Foursquare, which had not been added as a party to the license agreement, nevertheless used the first plaintiff’s airspace for the purposes of completing the construction.
From this time it appears that the plaintiffs knew that there was a new builder who would utilise the licence to enter the first plaintiff’s airspace until the end of September. However, neither the plaintiffs nor EVR and Foursquare, renegotiated the agreement to incorporate Foursquare as a party to it. Further, the photos exhibited show that Foursquare’s possession of the site and operation of the tower crane was advertised on hoarding signs on the construction site. Additional affidavit material filed late today also refers to conversations that occurred between the parties whereby these matters became known to the plaintiffs. There is a further question for trial as to the nature of the complicity of EVR in the trespasses caused by the use of the crane by its contractor Foursquare.
In late September 2021, the tower crane remaining on site, EVR ceased paying for the rent and accommodation costs of the property at Niddrie. Further, the license fee was no longer paid. Mr Romero requested in late September that the plaintiffs vacate the Niddrie property while claiming that he could not remove the tower crane because of the State Government lockdown. The household utilities were disconnected for a week or so around that time until the plaintiff had them reinstated.
During this period, Ms Cho returned to the residential property to prepare food and do the laundry and was, on one occasion, observed by Mr Romero who asserted that the family had returned to and was now living in the residential property, presumably as he intended they would.
Mr Romero also maintained, on the basis of information received from ‘tradesmen’ and his own enquiries, that the plaintiffs’ family has been residing in the residential premises since September 2021, but for present purposes, there is a dispute of fact for trial about when and in what circumstances the plaintiffs’ family returned to living at the residential premises.
Ms Cho deposed that from October 2021 to January 2022 the plaintiffs’ family continued to reside in the rental property and the crane was still being used. However, EVR did not pay the rent and ultimately, on 18 January 2022, the Victorian Civil and Administrative Tribunal ordered that the landlord recover possession of the Niddrie property. The plaintiffs’ family then returned to the residential property notwithstanding that the crane continued to be used.
For the purposes of this application, on the basis of the affidavits, I am satisfied that Mr Romero’s observations correspond broadly with the period when the utilities had been disconnected from the Niddrie property and the plaintiffs were temporarily forced to return to the residential premises. I accept that the plaintiffs have been living in the Niddrie premises until January this year. That said, it is clear that Ms Cho and her husband have regularly attended on the property, particularly for the purposes of conducting their business from the retail premises.
The second plaintiff is fearful for the safety of herself and her family, being of the view that the tower crane, which is very large, poses a real risk of injury and damage to the property when operating in the airspace above the first plaintiff’s property. A number of photos and videos were tendered in evidence. While the true extent of the plaintiffs’ fear and anxiety may be moderated by their willingness to return to the retail premises to run their business, this is of little relevance. The intrusion of the crane into the first plaintiff’s airspace is a significant invasion of Saaticho’s property rights as owner and the rights of the second and third plaintiffs and their family as occupiers.
The plaintiffs contend that the developer and the builders are in breach of the license agreement, are trespassing on the plaintiffs’ property and have refused to provide an undertaking not to use the crane in the airspace above their property. EVR has maintained since September 2021 that the project is shortly due for completion and the crane will be removed, yet it remains.
I pause to note that during the course of the application, certain undertakings were provided about the use of the crane in the airspace above the property, particularly by Foursquare following its joinder to the proceeding, which I will address below.
In an affidavit sworn 4 February 2022, Mr Romero stated that the structural component of the build is now complete and the tower crane is no longer required for the purposes of the works. However, the removal of the crane is a complex operation. It must first be dismantled into seven sections and then loaded onto five trucks. A second, mobile, crane is required. Further, because the mobile crane will intrude into airspace at Essendon Airport, the consent of the Federal Government must be sought. Further, the Moonee Valley City Council has requested that the crane be removed on a Sunday as the site is located in a busy local commercial area. A traffic management plan is required because Keilor Road, Essendon is a busy road with trams and high voltage overhead tram powerlines. Further, dismantling can only occur in appropriate weather conditions. The crane was to be dismantled on 19 December 2021 but the operation had to be postponed because of inclement weather.
EVR contended that the process of obtaining approval to remove the crane is advanced. The local council has already approved the traffic management plan. EVR advises that, on its estimate, the requisite road occupancy permit will be granted within a matter of hours or on the day. Foursquare is proposing to dismantle the crane on the earliest of 13, 20, 27 February 2022, 6, 13, 20, or 27 March 2022, dependent on the weather and subject to receiving Federal Government consent.
The defendants indicated from the Bar table that they believe that consent from the Australian Civil Aviation Safety Authority (CASA) and AirServices is imminent and may well be available to enable the removal of the crane as early as this coming Sunday, 13 February 2022. That will depend, if such consent is obtained, on the weather conditions. It is not clear at this stage whether the forecast will in fact be appropriate to enable the crane to be removed.
Meanwhile, the plaintiffs are subject to the vagaries of a bureaucratic process that is beyond their control and the weather, having their right to deny trespassers access to their airspace taken from them. There is a serious question for trial whether any licence to use the crane in the first plaintiff’s airspace survived the circumstances in September 2021 when the licence agreement appeared to terminate. Both EVR and Foursquare presently appear content to accept the commercial benefit of continuing to trespass on the plaintiffs’ airspace, without advancing any proposal to either minimise that trespass to no more than is absolutely necessary, nor negotiate a further licence.
EVR stated that it was informed by Foursquare that the tower crane is only being used for minor tasks that could be performed in other ways, but such use can involve trespass into the plaintiffs’ airspace. Importantly, during the course of the hearing today, Foursquare did proffer an undertaking that the crane would not be used for any commercial purpose associated with the work, only for the purposes associated with its dismantling and removal, although Foursquare cannot prevent a trespass into the plaintiff’s airspace caused by the crane not being used but being in weathervane mode.
Nevertheless, it is the present position that when the crane is not in use and it is in a neutral position, in weathervane mode, weather conditions are likely to cause the crane to intrude upon the plaintiffs’ airspace from time to time.
However, I infer that the seriousness of that trespass, not in terms of the trespass on property rights but rather in terms of the nature of the risk that arises for the plaintiffs when occupying the property, is lessened when the crane is not being used to transfer a load of materials, equipment or other goods for the purposes of the construction work but is simply in weathervane mode.
During the course of submissions on 4 February 2022, the plaintiffs accepted that as a result of the termination of its contract with EVR, LEDM had not been trespassing in the plaintiffs’ airspace, and that, prior to that time, it had the benefit of the license agreement. The plaintiffs sought a short adjournment of the application in order to join the second builder, Foursquare, to the proceeding. That has now occurred and the submissions in relation to the application were completed today. The construction management contract between EVR and Foursquare was put in evidence and the plaintiffs submitted, by reference to various clauses in the contract and other matters, a principal-agent relationship between EVR and Foursquare can be established. I accept that a serious question for trial arises that EVR is a trespasser in the plaintiffs’ airspace whenever Foursquare has operated the crane and caused an incursion.
The applicable principles on this application are identified by the High Court in Australian Broadcasting Corporation v O’Neill.[1] In summary:
(a)The plaintiff must demonstrate a prima facie case. This requirement is to be understood as whether there is a serious question to be tried as to the plaintiff’s entitlement to relief, not whether it is more probable than not that the plaintiff will succeed at trial. The sense in which the test is understood is that the plaintiff must prove, prima facie, a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending trial. In context, it must show that it has a putative legal or equitable right in respect of which final relief is sought which will justify the restraint sought. The requisite strength of the probability of ultimate success depends on the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.
(b)The injury which the plaintiff is likely to suffer must be one for which damages will not provide an adequate remedy.
(c)The balance of convenience must favour the granting of an injunction. The balance of convenience requires a consideration of the relevant matters favouring or militating against the granting of an injunction and will necessarily involve a consideration of the strength of the plaintiff’s claim assuming that a serious issue has been identified. In Victoria, this consideration is further clarified by the decision of the Court of Appeal in Bradto Pty Ltd v Victoria.[2] The court must, in determining whether to grant an interlocutory injunction, ‘take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial’.
(d)There may be other discretionary considerations which militate against the grant of the injunction.
[1](2006) 227 CLR 57, 68-9 [19], 81-7 [65]–[83]. See also Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 619-23; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 216-18 [8]–[13].
[2](2006) 15 VR 65, 73 [35]. See also Magna Alloys and Research Pty Ltd v Coffey [1981] VR 23, 28.
The plaintiffs’ rights in respect of the airspace being trespassed upon by the tower crane were not in dispute. So much is clear from the willingness of EVR and LEDM to negotiate a license agreement for valuable consideration. Further, on behalf of EVR, counsel indicated that no issue was taken that there were serious questions for trial and that the key consideration for the disposition of this application was to determine where the balance of convenience lies.
Accordingly, I am satisfied that there is a serious question to be tried as to whether Foursquare is a trespasser in the plaintiffs’ airspace or, alternatively, whether it was entitled by reason of any agreement or arrangement with EVR to the benefit of the license agreement. There is also a serious question for trial as to whether, in all the circumstances, EVR, with full knowledge of the circumstance that pertained at the time that Foursquare entered into a contract with it to complete the construction works, is also a trespasser in the plaintiffs’ airspace, and was knowingly complicit for its own commercial advantage in the trespass on the plaintiffs’ rights. There is a serious question for trial whether EVR was entitled to the benefit of the license, in order that it might be utilised by Foursquare, in the circumstances in which the parties contend that the licence agreement was repudiated or terminated in or about September 2021.
Although I am not persuaded that there is serious question for trial in respect of LEDM, I am persuaded that there are serious questions for trial involving EVR and Foursquare. The application against LEDM will be dismissed.
The applicable legal principles touching on the right of a property owner to protect airspace from trespassers were recently reviewed by Riordan J in Janney v Steller Works Pty Ltd.[3] The issue on that application for an interlocutory injunction in respect of the use of a tower crane was whether incursions by the crane, while in weathervane mode, constituted an actionable trespass. While the question of whether a property owner’s rights to airspace extend to the outer limits of the atmosphere awaits a definitive consideration, the position in respect of a crane operating from an adjacent property is well settled.
[3][2017] VSC 363.
A person operating a crane is not entitled to swing the crane over neighbouring land without the consent of the neighbouring owner or occupier. Riordan J cited Graham v K D Morris & Sons Pty Ltd[4] with approval. His Honour also noted the principle stated in Shelfer v City of London Electric Lighting Co[5] (‘Shelfer’) that an encroachment into airspace raises a strong prime facie entitlement to an injunction.[6] It is well established that by committing a wrongful act, a tortfeasor is not thereby entitled to ask the court to sanction his conduct by purchasing his neighbour’s rights through an assessment of damages, leaving his neighbour with the consequences of his tortious conduct. Shelfer stands for the principle that the plaintiff is prima facie entitled to an injunction in those circumstances. Although the court was considering final relief, these principles are relevant to the issue of interlocutory relief in a case such as the present.
[4][1974] Qd R 1. See also Anchor Brewhouse Developments Ltd v Berkley House (Docklands Developments) Ltd [1987] 2 EGLR 173; London & Manchester Assurance Co Ltd v O & H Construction Ltd [1989] 2 EGLR 185; Bendal Pty Ltd v Mirvac Project Pty Ltd (1991) 23 NSWLR 464.
[5][1895] 1 Ch 287, 322 (‘Shelfer’).
[6]PCH Melbourne Pty Ltd v Break Fast Investments Pty Ltd [2007] VSC 87, [62], and on appeal in Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd (2007) 20 VR 311, 316 [25], 319 [36].
That said, in that case the court also identified a ‘good working rule’ where damages in substitution for an injunction might be given. AL Smith LJ stated that damages in substitution for an injunction may be given where the injury to the plaintiff’s legal rights is small, is one which is capable of being estimated in money, is one which can be adequately compensated by a small monetary payment, and the case is one in which it would be oppressive to the defendant to grant the injunction. However, the court also observed that the defendant’s conduct, particularly where it has acted with a reckless disregard to the plaintiff’s rights, may disentitle it from asking for the damages to be assessed in substitution for an injunction.[7]
[7]Shelfer [1895] 1 Ch 287, 322-3.
The question of the balance of convenience is not easy to resolve. The evidence of the defendants about the complex process by which a tower crane is removed must be taken into account. In the best circumstances the crane will be removed in five days’ time, permits and weather permitting. Alternatively, it is likely to be removed on the first suitable Sunday between 20 February and 29 March 2022.
Should the court require a more expeditious dismantling of the crane, the defendants may simply be unable to comply with the court’s order. Just precisely how assiduously the defendants work to dismantle the crane at the earliest opportunity is not amenable to supervision by either the plaintiffs or the court. It is substantially within the control of the defendants. I am not persuaded that it would be oppressive to the defendants to grant the injunction. Rather, the parties in control of the dismantling and removal process will be motivated to ensure that all non-parties with some measure of control of the process are motivated to the fullest extent. The plaintiffs have no say in that context and the greater risk of oppression lies with simply requiring the plaintiffs to suffer the incursions on their legal rights while the defendants remove the crane as and when it suits them.
Pending its actual dismantling and removal, the plaintiffs are entitled to as much protection from the consequences of the trespass as may be afforded. Relevant to the assessment of the balance of convenience is the good working rule from Shelfer. In this case, the injury to plaintiffs’ rights is not small, cannot adequately be compensated by money, and the first defendant’s conduct in continuing to trespass on the property without a licence, all militate against granting damages in substitution for injunction.
The court will require that the defendants use their best endeavours to ensure that the tower crane is removed as soon as possible, without any further delay. That is, on 13 February 2022. Foursquare will be immediately restrained from using the crane, consistently with the undertaking it offered. Consequently, the only circumstance in which the crane will pass through the plaintiffs’ airspace would be when it is in weathervane mode and not in use or carrying any load. In that condition the possibility of any event detrimental to the interests of the plaintiffs is at least minimised.
On that basis, I will order, subject to the plaintiffs providing the usual undertaking as to damages, which they have done by affidavit filed in these proceedings, first, that the first and third defendants, by their employees, agents or contractors, forthwith be restrained from operating the crane, save for keeping it in weathervane mode or dismantling it, unless licenced by the plaintiffs to do so. Secondly, I will order that the first and third defendants, by their employees, agents or contractors, from 12:00am Thursday 24 February 2022, be restrained from trespassing in the first plaintiffs’ airspace, unless licenced by the plaintiffs to do so.
The defendants remain in control of the process and can either remove the crane this Sunday, or the following Sunday, without breaching the second order. Should the process be frustrated by some supervening event outside of their control, the defendants can avoid being in contempt of the order by agreeing a licence for the crane to swing over the property in weathervane mode or when being dismantled. Consistently with the good working rule in Shelfer, transposed into a balance of convenience consideration, the injury to plaintiffs’ rights would be minimised and adequately compensated by a licence for valuable consideration; and if the first defendant’s conduct in continuing to trespass on the property was beyond its control, it might be oppressive to maintain the injunction in its current form. By the option to negotiate a licence, the prospect of the injunction operating oppressively may be avoided. Such licence would, in the light of the first restraint, be limited to permitting incursions when the crane is in weathervane mode or being dismantled, in order to limit the crane’s incursion into the plaintiffs’ airspace both in the circumstances in which it occurs and the time period over which it is to occur.
A licence fee would be modest in all the circumstances, effectively the cost of accommodation in a hotel or serviced apartment with a financial payment to compensate for the inconvenience, for a matter of weeks. This is capable of calculation and negotiation and would relieve the defendants from the difficulty or impossibility of complying with the terms of the injunction through matters outside of their control, such as the weather. The defendants submitted plaintiffs may be unreasonable and refuse to negotiate. In case the plaintiffs are unreasonable in any negotiations, I will grant liberty to apply. This will protect the defendants in the event that the plaintiffs regard this order as an opportunity for opportunistic negotiations. However, the court would need to be satisfied that the defendants had used their best endeavours both to remove the crane and in negotiations with the plaintiffs.
The defendants remain in control of whether they can and will comply with an injunction in these terms. It would be inequitable to completely relieve the defendants from the consequences of their trespassing until the completion of a process which they, rather than the plaintiffs or the court, control. The appropriate license fee is capable of being estimated and would be a modest sum in the circumstances.
Accordingly, subject to the plaintiffs’ undertaking as to damages, I will order:
(a)Foursquare Construction Management Pty Ltd is joined to the proceeding as the third defendant and the title of the writ shall be amended accordingly.
(b)The first and third defendants, by their employees, agents or contractors, be and are restrained:
(i) forthwith, from using the tower crane to lift or transport any goods, materials or equipment of any nature whatsoever, in any manner that causes any incursion or trespass into the airspace of the property of the first plaintiff situated at 263A Keilor Road, Essendon in the State of Victoria, being the land more particularly described in certificate of title volume 10398 folio 596 (‘the property’), by any part of the crane or its load, save and except when the crane is in the neutral position or is in ‘weathervaning’ mode and enters into the first plaintiff’s airspace by force of the prevailing weather conditions, or when the crane is in the process of being dismantled, unless licenced by the first plaintiff to do so; and
(ii) from 12:00am on Thursday 24 February 2022, from trespassing on the property or its airspace in any manner whatsoever, unless licenced by the first plaintiff to do so.
(c)Liberty to apply is reserved for the defendants to apply to vary the preceding order on 24-hours written notice to the plaintiffs, and no later than 5:00pm on Wednesday 23 February 2022.
(d)The plaintiffs’ summons against the second defendant is dismissed.
(e)The plaintiffs and second defendant may file short submissions (not longer than four pages) by 5:00pm Tuesday 15 February 2022 as to the second defendant’s costs of, and incidental to, the summons.
(f)Save as set out in paragraph (e) above, costs of the summons are reserved.
SCHEDULE OF PARTIES
S ECI 2022 00282
BETWEEN
| SAATICHO PTY LTD (ACN 165 548 336) | First Plaintiff |
| ANNA CHO | Second Plaintiff |
| ADAM SAATICHO | Third Plaintiff |
| -and- | |
| EVR GROUP PTY LTD (ACN 605 728 701) | First Defendant |
| LUCAS EMILIO DE MATTEIS PTY LTD (ACN 158 868 369) | Second Defendant |
| FOURSQUARE CONSTRUCTION MANAGEMENT PTY LTD (ACN 146 607 847) | Third Defendant |
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