Sztainbok v Cooper
[2008] VSC 577
•18 December 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 9107 of 2005
| OLGA SZTAINBOK | Plaintiff |
| v | |
| GLEN COOPER & OTHERS | Defendants |
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JUDGE: | HANSEN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 18 November 2008 | |
DATE OF JUDGMENT: | 18 December 2008 | |
CASE MAY BE CITED AS: | Sztainbok v Cooper | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 577 | |
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PRACTICE – Settlement of proceeding – Enforcement of terms by application in the proceeding.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M W Morrison | Marshalls & Dent |
| For the First and Second Defendants | Mr M A Black | Hill Legal |
| No appearance for the Third Defendant |
HIS HONOUR:
This is an application by the plaintiff for orders by way of enforcement of written terms dated 26 July 2007 entered into with the first and second defendants in settlement of the proceeding.
The third defendant is the Registrar of Titles who has taken no part in the proceeding and is not a party to the settlement.
The plaintiff and the first and second defendants are the owners of adjoining pieces of land which run between the Nepean Highway and the beach at Carrum. The plaintiff’s land was to the north of the first and second defendants’ land, Nepean Highway being to the east and the beach to the west. The plaintiff claimed to be entitled to a portion of the first and second defendants’ land by reason of adverse possession. In a further amended statement of claim filed in the proceeding on 14 July 2006 the plaintiff pleaded her case as follows:
(a)Since May 2002 she had been the registered proprietor of the land in Certificate of Title Volume 6387 Folio 208 (“the plaintiff’s land”).
(b)Since January 2001 the first and second defendants had been the registered proprietors of the land in Certificate of Title Volume 4397 Folio 326 (“the defendants’ land”).
(c)The plaintiff and her predecessors in title had been in continuous exclusive possession of portions of the defendants’ land marked “B” (comprising 6.4 square metres) and “C” (comprising 11.2 square metres) on a map annexed to the writ adversely to the defendants and their predecessors in title for 15 years prior to November 2004, and was thereby entitled to possession thereof.
(d)Since not later than June 1972 the land marked “B” and “C” had been fenced within the plaintiff’s land by a paling fence.
(e)In or about November 2004 the defendants removed the paling fence and erected a fence dividing the plaintiff’s land from the land marked “B” and “C”.
(f)Despite demand the first and second defendants refused to remove the fence and re-erect it so as to divide the land marked “B” and “C” from the defendants’ land to the south.
(g)In the period of 15 years from June 1972:
(i)the plaintiff and her predecessors in title had not acknowledged the title of the first or second defendants or their predecessors in title to the land marked “B” and “C”.
(ii)the first and second defendants and their predecessors in title had not asserted their right to possession of the land marked “B” and “C” by suing to recover the land or resuming possession thereof.
(h)In these circumstances the plaintiff was entitled to possession of the land marked “B” and “C” and had acquired title thereto by adverse possession. The plaintiff claimed a declaration accordingly, an order for possession, damages for trespass, an order that the “B” and “C” land vest in the plaintiff, orders under s 116A(3)(c) of the Transfer of Land Act 1958 to the effect that the “B” and “C” land be included in the title to the plaintiff’s land, an injunction restraining the first and second defendants from entering upon the “B” and “C” land, and costs.
In their defence filed on 18 September 2006 the first and second defendants denied that the plaintiffs or her predecessors in title had been in adverse possession of the “B” and “C” land and that such land had been fenced within the plaintiff’s land. They admitted removing part of the fencing between the two properties, and alleged they were entitled to do so and to have erected a fence on the title boundary, and denied they were obliged to remove the fence currently erected. They further alleged that the respective predecessors in title had consented to previously existing fencing that divided the two properties intending that it be erected on the title boundary. They further alleged that any prior fencing could only have been erected in or about 1995. They further alleged that in 2002 the plaintiff acknowledged that any fence should be on the proper title boundary (once determined by a survey to be conducted by the plaintiff) and the parties agreed to act on that basis in respect to the fence and legal title boundaries. Relying on this the first defendant, who had shown the plaintiff a survey of the boundary, said he would pull down the fence in the course of constructing a house and put it on the proper title boundary, to which the plaintiff’s husband said words to the effect alleged and that he would check the survey was correct, and otherwise raised no objection to the proposal. In short, the defendants denied the plaintiff’s allegations of adverse possession.
On 1 December 2006 the proceeding was fixed for trial on 8 August 2007 on an estimate of duration of two to three days.
On 26 July 2007 the parties attended a mediation together with their counsel who were present throughout. I accept the evidence of the plaintiff’s solicitor that “considerable negotiations took place” and that “Numerous aspects of the matter were discussed. … During the discussions the parties put their positions and compromises were reached. Both parties were forced to give ground in respect of the positions they favoured and after difficult negotiations agreement was reached and set out in the Heads of Agreement which were signed by the parties in the presence of their legal advisers”.
The Heads of Agreement are partly handwritten and typed. Attached to them are two copies of a Plan of Feature Survey, ref: 01-04-04 Version 02 prepared by Brian Moxham a licensed Land Surveyor who had been engaged for the purpose by the first and second defendants. The survey is of the first and second defendants’ land and depicts the title boundary and the location of paling fencing and of certain features including structures erected thereon. The plan was prepared in 2002 and depicted an “Old Part Two Storey Brick and Timber Residence” and an “Old Open Brick Garage” on the defendants’ land. It is to be noted, however, that these buildings were subsequently demolished and in 2004 the first and second defendants erected a new house on their land and new paling fencing in lieu of the previous fencing which they removed. It was the placement of the new house and new fencing that the plaintiff complained of.
The Heads of Agreement state:
“1The common boundary between the properties of the respective parties where the brick wall exists will be the northern line of the wall (the wall boundary).
2The existing fence which is situated north of the wall boundary will be removed by the Defendants at their expense.
3The wall boundary will be rendered by a contractor selected in accordance with clause 11 at the expense of the Defendants.
4The balance of the common boundary will be on the line of the ‘Palings’ shown on ‘Plan of Feature Survey’ Version 02 of B. Moxham. The existing paling fence will be moved where necessary to the ‘Palings’ line at the expense of the Defendants. Such fencer to be chosen in accordance with clause 11 (the Palings boundary).
5The Plaintiff will bear the cost and expense of having the above agreement/terms surveyed together with the relevant Titles Office costs of rectification of title boundaries.
6The Defendants will pay the Plaintiff’s costs of this proceeding agreed at $25,000 in 60 days.
7Best Endeavours Clause.
8Terms of Settlement and Releases to be drawn up.
Dated 26/7/07
(signed)
_________________________________
Plaintiff
(signed) (signed)
_________________________ _________________________
Defendants
9Rendering and Relocating to be completed in 60 days of acceptance of quote and contractor subject to availability of contractors.
10The paling fence will be relocated and refixed according to the same specifications at present at the road end.
ie1 600 ml concreted in.
2Posts every 1.8 mts.
3Red Gum Posts.
11The rendering and relocating contractors will be Ⓐ chosen by the following system: each of the parties will obtain 2 quotes and then choose the quote closest to the average in the event of not agreeing on the contractor. Ⓑ independent of the Defendants. Ⓒ the plaintiff has the right to choose a more expensive quote on the condition she pays the difference between the ‘average quote’ and the quote she chooses.
12If the Defendants fail to comply with these Terms, the Defendants agree that the Plaintiff will be entitled to have the Proceedings reinstated and obtain judgment against the Defendants and an order for specific performance of these Terms of Settlement together with the Plaintiff’s costs of enforcing these Terms on a solicitor and own client basis.
2For the purposes of obtaining a judgment pursuant to the provisions of the preceding paragraph, the Defendants agree that
(a)The Terms may be produced to the Court as the Defendants’ consent to such a judgment; and
(b)That affidavit/s by the Solicitors acting for the Plaintiffs will be sufficient evidence of any failure on the part of the Defendants to comply with these terms.”
The Heads of Agreement (which I will refer to as “the agreement”) were signed by the parties where indicated. The parties also initialled each page, each alteration and the copies of Mr Moxham’s attached plan. Clauses 1 to 11 were in handwriting. Clause number 12 and the following clause number 2 were typewritten on a separate page, and attached to the preceding three pages of handwritten terms. The second of the plans depicted “The Wall Boundary” and the “Palings Boundary” by two types of texta marking, the former with a solid line and the latter with a series of single strokes. The second plan was also endorsed in handwriting with the words “Texta Markings are for ease of identification of sites of terms used in the agreement”, and the endorsement was initialled by the parties.
The plan depicted two lengths of paling fence, a run commencing at the east or Nepean Highway end of the defendants’ land and the other at the western or beach end of the defendants’ land. Each ran to and terminated at “the Wall Boundary” being constituted (as referred to in cl 1 of the agreement) by the brick wall of buildings on the defendants’ land. As a result of the common boundary having a right angle turn to the south of a little under five metres and then a right angle turn to the west running to the beach, the wall boundary had two right angle turns. Then, after the second turn to the west the wall boundary crossed a gap of 3.5 metres in the brick wall where there was a courtyard in the defendants’ development.
The effect of the agreement was that:
(a)the paling fence erected by the defendants in 2004 as part of their redevelopment works was to be relocated a short distance south; this was south of the title boundary.
(b)the line established by the brick wall of the defendants’ new buildings was to constitute the common boundary in the area covered by the wall boundary. This boundary was on the northern side of the line of the old paling fence removed by the defendants and thus represented a gain to the defendants from that line; it was, however, still south of the title boundary.
Following the mediation the plaintiff’s solicitor requested Mr Moxham to prepare documents necessary to implement the Heads of Agreement. Mr Moxham noted that the agreement provided for most of the common boundary line to be moved a short distance south the effect of which was to align the boundary substantially with an old paling fence. The change to the title boundary required a Plan of Subdivision which thus had to be prepared together with an Application for Certification for the City of Kingston, which Application had to be signed by both parties and, when signed, the Plan and Application submitted to the City of Kingston for certification of the Plan of Subdivision. Following such certification an Application for Approval of the Plan of Subdivision would be required for lodging with Land Victoria together with the Certified Plan of Subdivision, file notes, Surveyor Report, tracings and any other relevant data. Land Victoria would issue new titles the effect of which would be to add to the plaintiff’s land the extra amount gained under the agreement.
On 15 August 2007 the plaintiff’s solicitor wrote to the first and second defendants’ solicitor enclosing typed Terms of Settlement. In her letter the plaintiff’s solicitor pointed out the steps necessary to implement the boundary changes. There was reference to the requirement of a Plan of Subdivision and payment of stamp duty which had not been considered at the mediation. It was noted that the first and second defendants’ surveyor Mr Moxham, who the plaintiff was using, had advised that the way to amend the title boundaries was by way of a Plan of Subdivision. Mr Moxham was attending to that at the plaintiff’s expense. The letter concluded with a request that the Terms be executed and returned.
On 22 August 2007 the first and second defendants’ solicitor wrote in reply noting her understanding of the parties’ responsibilities and proposing certain amendments to the Terms. The plaintiff’s solicitor duly amended the Terms to cater for the matters raised by the first and second defendants’ solicitor, and on 3 October 2007 forwarded the amended Terms to the first and second defendants’ solicitor duly executed by the plaintiff and requested the return of a copy executed by the first and second defendants in exchange.
Mr Moxham duly prepared the Plan of Subdivision and Application for Certification which provided for the boundary changes in the agreement. The Application and the Plan of Subdivision are Exhibits BM3 and BM4 to Mr Moxham’s affidavit sworn on 16 May 2008. The Plan in Exhibit BM4 is referred to as Version 1. He also prepared a plan based on Version 1 which showed existing fencing and marks placed to erect the new fences, the marks being placed on 3 September 2007. This is Version 1A which is Exhibit BM4A.
Mr Moxham deposed that the boundary line in Exhibit BM4 (Version 1) is in three stages:
(a)The west stage – this is drawn on the old paling fence line which was ascertained by the presence of old posts. It is the line marked “palings” in the plans attached to the Heads of Agreement;
(b)The middle stage – this is drawn on the north edge of the brick wall and across the back of 3.5 metres. It is the line marked “the wall”;
(c)The east stage – this is drawn on the old paling fence line which was ascertained by the presence of old posts. It is also the line marked “palings” in the plans attached to the Heads of Agreement.
In summary, the boundary line in Exhibit BM4 (Version 1) was the same as the lines in the plans attached to the Heads of Agreement and described as “palings boundary” and “the wall” and marked in texta[1]. I accept Mr Moxham’s evidence.
[1]Referred to at [9] above as “The Wall Boundary” and the “Palings Boundary” respectively.
In or about mid September 2007 Mr Moxham spoke to the first defendant at the site and gave him the documents advising they were necessary to implement the agreement and that he and his wife needed to sign the Application. The first defendant took the documents saying that they would sign them, he would get the plaintiff to sign, and he would then return them to Mr Moxham.
On 25 September 2007 the first and second defendants paid the agreed sum of $25,000 for costs. It is convenient at this point to also mention that subsequent to the mediation, the first and second defendants removed the paling fence they had installed between the western or beach end and their western most building and replaced it with a paling fence on the line of the original paling fence; the line of the original palings is shown on Exhibit JPK3 to the affidavit of John Peter Kenter as “Palings”. While the first and second defendants did this at their expense they did so without reference to the plaintiff and not in conformity with the procedures in the agreement. The plaintiff accepts that this part of the fence is on the line agreed upon and, thus, that it deals correctly with that part of the boundary.
On 9 October 2007 the plaintiff’s solicitor sent to the first and second defendants’ solicitor a letter from Mr Moxham dated 28 September together with the Plan of Subdivision and Application for Certification for signing. It was requested that the executed document be returned for forwarding to Mr Moxham to complete the matter.
On 21 November 2007 the plaintiff’s solicitor wrote again to the first and second defendants’ solicitor noting that no response had been received. The letter warned that if the executed Terms and executed Application for Certification were not returned within seven days the plaintiff would apply for judgment and an order for specific performance.
On 12 December 2007 the plaintiff’s solicitor received a letter from the second defendant which requested that all future correspondence be sent to the first and second defendants. The letter advised that the first and second defendants would not sign the Terms as they differed substantially from those signed at the mediation. They did however intend to honour the terms agreed at mediation, a copy of which was requested.
On 17 December 2007 the plaintiff’s solicitor wrote to the first and second defendants noting their solicitor was no longer representing them, and advising that the plaintiff was happy to proceed on the basis of the terms signed at the mediation, a typed up copy of which were enclosed for signature. Apart from that, execution and return of the Application for Certification was requested. Failing return the necessary application would be made to the Court.
On 19 December 2007 the first defendant telephoned Mr Moxham and said he wanted some changes to the Plan of Subdivision. At Mr Moxham’s request, on 19 and 20 December the first defendant faxed drawings indicating the changes sought. There were two changes to the boundary line, one to provide for a piece of ducting on the north face of the brick wall at the western end and the other to allow for a brick entry at the east end. The defendants required that the boundary line be changed so as to go around the ducting and the entry. The brick entry housed mail boxes for the defendants’ land; it is referred to as the “mail compound”. Mr Moxham marked up the Plan of Subdivision and made two notes thereon to reflect these changes; the plan so marked is Exhibit BM6.
Also on 19 December the plaintiff’s solicitor received a letter from the second defendant referring to the Application for Certification and advising that the certificate was being amended and the first and second defendants would sign the amended certificate when received. In addition, a letter was received from the first and second defendants’ solicitor confirming that she had ceased to act.
On 20 December Mr Moxham faxed the plaintiff’s solicitor advising that the first and second defendants wanted the plan amended. He enclosed an amended plan and said that he awaited instructions.
On 29 January 2008 the plaintiff’s solicitor wrote to the first and second defendants stating there was no basis for the certificate to be amended, that they could not unilaterally seek an amendment from Mr Moxham, and that the Plan of Subdivision he had drawn was in accordance with what they agreed at the mediation. Unless the matter was resolved orders would be sought pursuant to the agreement. Subject to that, some alternative approaches to resolution were suggested.
During January 2008 Mr Moxham drew an amended Plan of Subdivision (Version 2) to reflect the two changes sought by the first and second defendants, and on 19 February 2008 forwarded it to the plaintiff’s solicitor with a request for advice as to which version to lodge with the Application for Certification (when received). Version 2 is contained in Exhibit BM9; it contains an error in that the duct work is too far to the east.
On 6 February 2008 the first defendant wrote to the plaintiff’s solicitor in response to her letter of 29 January. He advised that independent surveying had shown that Mr Moxham’s survey had left out key features which had been in place for over two years, and not installed after the mediation. He demanded that these features be included in the survey plan. He also requested correct measurements be inserted so that the contractors undertaking works knew exactly where the fence started and stopped. He requested advice when the issues had been addressed or resolved or an alternative solution is sought.
I note that insofar as the first defendant’s letter of 6 February alleged fault in Mr Moxham’s work, in his evidence Mr Moxham rejected the allegation and stated that the Plan of Subdivision – meaning Version 1 – was adequate and acceptable to the City of Kingston and Land Victoria. He further stated that all his versions of the plan were accurate and included all necessary features. I received this evidence as that of a person with long experience in the area and expressing his opinion as to the adequacy and acceptability of his plans. I also note Mr Moxham’s opinion that there is no reason why the boundary change in the agreement could not be implemented if the first and second defendants signed the necessary documents.
On 11 February 2008 the plaintiff’s solicitor wrote to the first and second defendants insisting that the boundary line be as agreed at mediation and requesting return of the Application for Certification failing which application would be made to enforce the written agreement.
On 26 March 2008 the first defendant telephoned Mr Moxham and asked whether he had sent the amended plan (Version 2) to the plaintiff’s solicitor. He advised that he had. The first defendant also asked for another Application for Certification, which Mr Moxham sent.
On 18 April 2008 Mr Moxham prepared Version 3 of the Plan of Subdivision to correct the error in the position of the duct in Version 2, and on 18 April sent it to the plaintiff’s solicitor. Version 3 is Exhibit BM12.
Also on 18 April the first defendant telephoned Mr Moxham and requested a third change, namely a “step” in the middle of the boundary line. Mr Moxham passed the request to the plaintiff’s solicitor. This change required part of the middle of the boundary line be moved north, which favoured the first and second defendants. The first defendant also sent Mr Moxham three diagrams, two relating to the “step” change and one relating to the earlier requested change to accommodate the brick entry (mail compound) at the east end. The latter change required the new paling fence run up to and along the northern face of the brick entry, and thus not cut through it, which favoured the first and second defendants as the brick entry extended north of the agreed paling fence line.
On 21 April Mr Moxham sent the three drawings to the plaintiff’s solicitor advising that no action would be taken to amend the plan unless he was authorised to do so.
Later in April 2008 Mr Moxham was contacted by Hill Legal, as solicitors for the first and second defendants, who requested him to draw Version 4 of the Plan of Subdivision incorporating the three changes requested by the first and second defendants. On 23 April Mr Moxham prepared Version 4 as requested and sent it to Hill Legal; this is Exhibit BM18. To recapitulate, the changes were to provide for the duct on the brick wall at the west/beach end, the brick entry (mail compound) at the east/highway end, and the step in the middle of the boundary. Mr Moxham also sent Hill Legal a Plan View showing where a paling fence should be constructed on a boundary line; he provided this because the first defendant did not understand where the fence should be placed in terms of how to construct a fence on a boundary line.
On 24 April Hill Legal wrote to the plaintiff’s solicitor enclosing a copy of Version 4 for consideration. If that was agreeable to the plaintiff, the first and second defendants would immediately sign the Application for Certification to proceed with the Plan of Subdivision on the basis of Version 4.
The plaintiff did not agree to the changes requested by the first and second defendants, and insisted on Version 1 of the Plan of Subdivision as implementing the agreement.
It was in these circumstances that on 22 May the plaintiff filed the summons to enforce the agreement.
The first and second defendants relied on affidavits sworn by the first defendant on 5 June, 14 October, and 17 and 18 November 2008, and an affidavit by John Peter Kenter, a Licensed Surveyor who was retained by the first defendant in September 2008.
The first defendant deposed that Versions 1, 1A, 2 and 3 did not accurately record what was agreed at the mediation. Versions 1 and 1A omitted an existing brick wall and an air-conditioning duct; fencing contractors could not quote on Version 1. Version 2 was incorrect because the duct was shown on the wrong wall, and omitted the measurement of a gap of approximately 140 mm between the end of the brick wall near the middle of the boundary and the position of the new fence. Version 3 was incorrect because it omitted the latter measurement. The first defendant stated that Version 4 accurately reflected what was agreed at the mediation, and the first and second defendants would sign the Application for Certification on the basis of that plan.
The first defendant further deposed that he and his wife commenced building their new home on the defendants’ land in 2004. As mentioned earlier, Mr Moxham’s plan attached to the agreement was prepared in 2002. The first defendant supervised the construction of their new home as an owner-builder.
The essence of the first and second defendants’ position was stated, although inadmissibly, by the first defendant in his affidavit sworn on 14 October 2008, thus:
“15It was the intention of the Heads of Agreement to reposition the fence sensibly and practically between the parties to a position that followed, where practical, the previous fence line. The proposed fence line in the Heads of Agreement allowed for and did not require the removal of existing features such as brick walls or air-conditioning conduits which existed at the time of the Heads of Agreement and it did not provide for the considerable additional costs that such changes would require.”
In his affidavit Mr Kenter expressed opinions on Mr Moxham’s work and produced two plans he had prepared “in response to” the agreement. The first plan reflected “key features which existed at the date of the Heads of Agreement in proximity to the original title boundary … and which in my opinion need to be considered in order to give the proposed boundary in the Heads of Agreement any practical effect without the need for further clarification and future litigation”. The second plan was that which in his opinion “best reflected the Heads of Agreement and which would assist the Court to give practical effect to the terms of the Heads of Agreement”. The plans are Exhibits JPK2 and JPK3 respectively.
In his affidavit Mr Kenter referred to differences between Mr Moxham’s plans and his own, and stated that he interpreted the agreement differently to Mr Moxham, they differing in the assumptions required to give it effect. He also took a different professional approach with respect to services, rights, easements and disclaimers. I have regard to all that he said but do not set it out. He concluded that his proposal gave “practical effect” to the agreement. It moved the western most paling fence to a line to the north west corner of the first brick wall at the west; it included the duct work within the defendants’ land by extending the boundary on the northern brick wall north of the duct and along that line until it hit the west facing brick wall; it then introduced a step to the north and from there angled the paling fence to the east boundary where it ran along the north side of the brick entry (mail compound); this had the effect of the fence being north of electrical lighting conduits laid in the ground north of the concrete wing wall running from the first and second defendants’ garage and also including all the brick entry (mail compound) within the defendants’ land. This was more favourable to the first and second defendants than Mr Moxham’s Versions 1 or 1A.
Mr Moxham sworn an affidavit in answer to Mr Kenter. He agreed that the plan in Exhibit JPK2 accurately depicted the layout of the buildings and fences at the date of the mediation, but said that the boundaries drawn on the plan did not represent those agreed at the mediation. Further, the plan in Exhibit JPK3 did not reflect the agreement; rather, it reflected Mr Kenter’s views that changes were needed to the agreement. From that point he expressed commentary, argument and conclusions upon Mr Kenter’s evidence. As I indicated in the course of argument I do not determine the case on inadmissible or unsubstantiated material in the evidence of any of the witnesses. That includes unsubstantiated assertions in the correspondence between the solicitors.
As mentioned earlier, the first and second defendants relied on affidavits sworn by the first defendant on 17 and 18 November, the latter affidavit being provided to me on resumption of the hearing after lunch. The late production of this affidavit was unfair to the plaintiff as the matters it raised could not be checked, and counsel objected to its tender. Nevertheless in all of the circumstances, including the nature of the case, I received it and counsel for the plaintiff did not seek an adjournment.
Among other things, in the 17 November affidavit the first defendant referred to evidence of the plaintiff’s solicitor that the first defendant (in his 14 October affidavit) had not attempted to explain why the matters of the mail compound, the ducting and the electrical lighting conduit (referred to by Mr Kenter) were not raised when the Heads of Agreement were negotiated in 2007. As to this, the first defendant stated that “none of the parties turned their attention to [these] issues”. He said that the Heads of Agreement were going to be formalised and the boundary re-surveyed. He asserted that he and his wife “believed that an accurate and complete survey plan would be provided and that this would include key features which existed on the boundary at the date of the mediation”. He said that “other issues were overlooked by both parties and did not form part of the Heads of Agreement”, which issues were vital to the agreement having any practical effect. He said further that it was never put to them that they would have to remove or demolish any brick wall within their title boundary.
The first defendant’s affidavit sworn on 18 November was concerned with the area of the boundary east of the garage on the defendants’ land. From the garage and projecting easterly is a concrete wall (“referred to as the wing wall”) a bit above ground level. About 15 cm behind the wall is a retaining wall made of steel sheeting and which also runs west along the northern side of the garage, then along the west facing wall at the rear of the garage and also for a short distance west towards the beach. The steel sheets have been driven into the ground to support the plaintiff’s land and keep the weight of the soil off the wing wall and garage wall. The sheets sit about 200 mm below ground level. In the gap between the steel sheeting behind the wing wall and the wing wall itself is some electrical conduit at the garage end which supplies electricity to two lights located in the wing wall. All these features were in place at the time of the mediation.
This affidavit was the first reference to the placement of steel sheets. It is to be noted that in his affidavit Mr Kenter had referred to “electrical lighting conduit which lies along the northern face of the concrete wing wall” but he made no reference to the presence of steel sheeting. Hence, as counsel for the plaintiff said, the first reference to steel sheeting came on the afternoon of the hearing, and he was in no position to deal with it.
No witness was cross-examined.
Submissions
Counsel for the plaintiff submitted that the Heads of Agreement constituted a binding and enforceable agreement, being an agreement within the first of the three classes of case described in Masters v Cameron[2] and that the plaintiff was entitled to orders enforcing the agreement against the first and second defendants. He submitted that the first and second defendants had had a change of heart, and were reneging on, or seeking to renegotiate, the agreement. Version 4, upon the basis of which the first and second defendants stated they would proceed, did not reflect the agreement. Even less did Mr Kenter’s plan reflect the agreement. Version 1 reflected the agreement and compliance with it would not occasion hardship to the first and second defendants either at all or such as could warrant refusal of the relief sought. In short, there was no reason for the first and second defendants not to be kept to the agreement:
(a)the ducting could readily be moved, as had been conceded in a letter from Hill Legal dated 12 November 2008 where it was said, as part of a proposal, that the conduit (and duct) “will be altered or moved” providing access is made available;
(b)the brick entry (mail compound) could surely be readily changed, as to which the first and second defendants had not given evidence as to the work involved and the cost thereof to accommodate the agreed boundary;
(c)as to the “step” and the middle section, there was no evidence as to the path of the conduit and the steel sheeting was an unknown quantity being raised so late in the piece and neither should be regarded as constituting an insuperable barrier to performance.
[2](1954) 91 CLR 353 of 360.
Furthermore, the agreement was not entered into under a mistake as to any of the matters raised by the first and second defendants, whether common to the parties or the unilateral mistake of the first and second defendants or their legal advisers. Certainly no mistake was known to the plaintiff or induced by her in the first or second defendants or concealed by her. Nor did the interests of justice require that the agreement not be enforced, as to which counsel referred to Easyfind (NSW) Pty Ltd v Paterson[3], and Lewis v Combell Constructions Pty Ltd[4]. All the points relied on by the first and second defendants existed at the time of the mediation and must be taken as known by them at that time. And the agreement was entered into in the presence of legal advisers and thereafter months passed before points commenced to be raised in objection to performing the agreement in accordance with Version 1. In signing the Heads of Agreement the first and second defendants for whatever reason took a risk, did not mention the matters they subsequently raised and thereby took a risk or they overlooked them. As to that, it is not known what the true position was, the first and second defendants not having condescended to evidence on this issue, the course taken by the first defendant being to assert insufficiency in Mr Moxham’s plans because they omitted reference to, and did not allow for, features which were present at the time of the mediation. If at the mediation the first and second defendants somehow forgot about the matters they now raise, there was no evidence that the plaintiff or the plaintiff’s legal advisers were aware of that, and no basis for finding that the plaintiff or her legal advisers ought have considered that the first and second defendants entered into the agreement under a mistake or misapprehension as to its terms or effect in regard to these matters; see Slee v Warke[5]; certainly there was no evidence of any misleading or inducing conduct by the plaintiff or her legal advisers and none was alleged.
[3](1987) 11 NSWLR 98.
[4](1989) 18 NSWLR 523.
[5](1952) 86 CLR 271.
Counsel for the first and second defendants conceded that the parties had entered into a binding and enforceable agreement. The issue, he submitted, concerned the interpretation of the agreement the correct approach to which was conveniently stated by Hargrave J in Buxton Construction Pty Ltd v Golf Australia Holdings Ltd[6] as follows:
“It is necessary to construe the relevant provisions of the terms of settlement in accordance with general principles of contractual interpretation. This requires the Court to consider what reasonable persons in the position of the parties would have understood the words to mean, by reference to the text of the agreement, the surrounding circumstances known to the parties and the purpose or object of the transaction. Further, in interpreting the words and resolving any ambiguity, the Court should proceed in a common sense and non-technical way and give the agreement a commercially sensible construction.” (Footnotes omitted).
Counsel submitted that the Heads of Agreement “attempted to set out where the boundary between the two properties was to run” and Mr Moxham had prepared plans to put the Heads of Agreement into effect. However his plans did not take into account features “that must be taken into account, and there’s a certain amount of silence in the Heads of Agreement as to some of the issues, and it’s really in relation to the interpretation of the Heads of Agreement as they apply to those issues that we have a disagreement about”. The plaintiff had never provided the first and second defendants with a document for signing that accurately reflected the proper implementation of the Heads of Agreement; when such a document was provided they would sign it. They would proceed on the basis of Version 4, or Mr Kenter’s plan, but the plaintiff would not. In short, counsel said, the question was how should the Heads of Agreement be interpreted? On the interpretation he contended for, and the plaintiff not having presented the correct documentation for signature, the application should be dismissed with costs.
[6][2007] VSC 10 at [19].
In his submissions counsel focussed on the features or physical matters which the new boundary plan should allow for. He did so by reference to photographs and other evidence including the several plans of Mr Moxham and Mr Kenter. Mr Moxham’s Version 4 appropriately allowed for the several features or physical matters. In addition to the features already mentioned, counsel referred to two trees depicted on Mr Moxham’s plan attached to the Heads of Agreement, namely a “Flowering Gum” and “Pyramid Tree” close to but south of the “Palings” line at the eastern end of the defendants’ land. He submitted that the Flowering Gum was in the path of the paling fence depicted by Mr Moxham in Version 1 and would thus have to be removed if the fence was erected on that line. This, he submitted, was another matter not thought of and for which allowance had to be made. Alternatively, as I understood the submission, the Flowering Gum was so close to the boundary line as to indicate that inadequate consideration had been given to it, and the related line of the boundary, by Mr Moxham. As to whether the Flowering Gum is a problem as suggested, it is to be noted that in a letter to the plaintiff’s solicitors, dated 9 September 2008, Hill Legal refer to their instructions that Mr Moxham had advised as to the method of constructing the fence that meant that it would avoid and pass to the north of the tree. Although that evidence is in hearsay form it indicates that the Flowering Gum is not an issue. The Pyramid Tree did not give rise to difficulty.
Counsel also subjected the Heads of Agreement to analysis and criticism from the point of view of omissions or inadequacies of detail and description of such a nature as to leave imprecision in meaning and application, in view, in particular, of the presence at the time of the mediation of the several features or matters which should be allowed for. One aspect of the Heads of Agreement to which he drew attention was the contrast between the reference in cl 2 to removal of the existing fence and the absence of a reference to removal of the ducting, the mail compound and the electric conduit behind the wing wall so that those features or matters were south of the boundary line. He submitted that the consequence of the absence of such provision was that the parties are to be taken to have intended that those items remain as they were at the time. Hence the plan should be drawn so that these items could remain, meaning that the plan should provide for the title boundary to pass to their north. There should not be “potential of them having to be removed at some time in the future”.
Decision
In considering the parties’ submissions it is important to bear in mind the following matters.
First, it is common ground that the Heads of Agreement was a binding and enforceable agreement.
Secondly, and consistently with the first point, the first and second defendants did not submit that their entry into the agreement was affected by a mistake, whether common or unilateral, such that the agreement was not enforceable against them or was liable to be rectified in any respect.
Thirdly, the plaintiff’s case is that Mr Moxham’s Version 1 faithfully implements the agreement and the agreement should be enforced accordingly, whereas the first and second defendants’ case is that the factual context of the several features or matters existing at the time feeds and gives content to the intended meaning of the agreement which is to be interpreted accordingly with the consequence that the boundary line should be moved further north as depicted in Version 4 or even to the much greater extent depicted by Mr Kenter in his plan.
Fourthly, the first and second defendants do not contend that the agreement was subject to an implied term that the new boundary line was to be north of the several features or matters on which they rely for the contextual interpretation. And no measurement was specified of any such extension to the line of the northern boundary.
Fifthly, I have no evidence of the negotiations at the mediation that led to the parties entering into the agreement. It may be assumed that that was because the mediation was conducted on the basis that evidence could not be given of matters discussed in it. But whatever the reason, the fact is that no evidence was given of the negotiations. I am told the unsurprising fact that there were “considerable negotiations” which produced a compromise, but I do not know what was said in the negotiations. Of course, a written agreement is to be construed objectively according to its terms and otherwise on the approach conveniently stated by Hargrave J in Buxton. Of the matters to which permissible regard may be had in construing the agreement I have the factual matrix of the title boundary, the allegations in the pleadings, the Heads of Agreement and evidence of the features that existed at the time of the mediation and which are now relied on by the first and second defendants. I do not, however know the course of the negotiations but which, if known, might aid in assessing the parties’ submissions. But that is the situation and I must consider the submissions in the light of the materials before me. I have no evidence from the plaintiff herself and do not know whether at the mediation she was aware of all or any of the features in question or of their significance as the first and second defendants contend. The fact that so much time passed after the mediation, and that the features were not mentioned in the Heads of Agreement, before the first and second defendants commenced to raise them, tends to suggest they were new points. The plaintiff’s reaction may also be consistent with that being the case. Furthermore, I see no basis on which it could be said that the plaintiff was aware of the placement of steel sheets in the ground (which was disclosed only during the hearing thus depriving the plaintiff of the ability to investigate the matter), the existence and placement of the electrical conduits, and the small “step” requested by the first and second defendants and depicted in Mr Moxham’s Version 4. Otherwise it may be that the plaintiff was aware of the duct and the mail compound being on or north of the agreed boundary line, but the state of any such awareness is speculation.
The question is whether, as the plaintiff contends and the first and second defendants deny, Mr Moxham’s Version 1 accurately implements the agreement. I accept that it does, and that Version 4 and Mr Kenter’s plan do not. Indeed I regard Mr Kenter’s plan as an exercise in poetic licence, seeking to assist the first and second defendants to an implementation of the agreement as they would now like it to be. In my view the intendment of the agreement is clearly enough to be seen, and as seen is reflected in Version 1.
The first and second defendants’ submission on interpretation seems to me to founder at several points. The submission relied on the allegation that the parties were aware of the existence of certain features or matters when they entered into the agreement. That is an allegation of fact as to which I have already made some observations. The next step was to say, as an assertion, that those features must be taken into account with the effect of pushing the first and second defendants’ boundary to the north into the plaintiff’s land. But the extent of that alteration to the agreed boundary line was not specified and somehow was to be determined by a surveyor or further agreement of the parties. Even more basically than that however, the premise of the submission – that existing features “must be taken into account” by adjusting the agreed line – was an assertion without a factual foundation. The acceptance of the assertion would involve the Court acting on a guess or speculation, in my view.
I do not accept that the absence of reference to the removal of the features in question reflected an intention that those items remain as they were at the time. I do not repeat the above discussion concerning the items and the plaintiff’s awareness of them. Further, far from confirming the first and second defendants’ counsel’s submission, the absence of reference to any such removal is equally consistent with an acceptance by the parties of the new agreed boundary line with whatever consequence might follow to each of them. The fact of the new boundary line did not automatically mean that any feature of the first and second defendants’ land found across that line had to be removed, or vice versa for that matter, as the parties could work out how to deal with the situation. What the agreement did was settle on the boundary.
In my view, an agreement was made which with sufficient clarity determined upon a new boundary line and which boundary line is faithfully implemented in Mr Moxham’s Version 1. In truth, in my view, the first and second defendants have sought to renegotiate the agreement. The attempt is rejected and, considering it appropriate to do so, I will make orders for the enforcement of the agreement. I will hear the parties on the terms of the orders and costs.
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