Jin v Narayan

[2024] NZHC 1921

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2887

[2024] NZHC 1921

UNDER

Section 124 of the District Court Act 2016

BETWEEN

YUCHEN JIN

Appellant

AND

SHIVENDRA NARAYAN and SAMRATA HEMAANTIKA ANAND

Respondents

Hearing:

27 June 2024

Appearances:

R O Parmenter for Appellant

A L Stuart and A R Hunt for Respondents

Judgment:

12 July 2024

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 12 July 2024 at 3.30 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

Solicitors/Counsel:

R O Parmenter, Auckland Ku & Partners Ltd, Auckland Hesketh Henry, Auckland

JIN v NARAYAN [2024] NZHC 1921 [12 July 2024]

[1]    This is an appeal from the reserved decision of Judge J Forrest about costs payable following the issue of a notice under the Fencing Act 1978 (the Act).1

[2]    The amount at stake is the sum of $10,216.18 (50 per cent of the costs incurred in the construction of a fence), plus legal costs. The key issue in dispute is whether the notice issued by the respondents on 16 May 2023 was valid and superseded an earlier cross-notice issued by them on 23 December 2022, which in turn objected to a notice dated 14 December 2022 issued by the appellant.

[3]    On appeal, the appellant’s position is that the first notice and cross-notice had not lapsed, nor had the proposals set out in those documents been agreed or determined by a court. The appellant says it follows that the respondents were not permitted to issue any new notice, so the second notice was invalid and of no effect.

Factual background

[4]    The appellant and the respondents live on neighbouring properties on Armstrong Farm Drive, East Tāmaki Heights. The respondents purchased their property with the intention of building a family home, hoping to complete construction by January 2023. During the course of construction, the respondents’ architect raised a concern about the potential failure of the retaining wall on the original fence between the two properties. At the respondents’ request, their architect raised this issue with Mr Jin (the appellant).

[5]    On 14 December 2022, Mr Jin responded by serving a notice by email to the respondents’ conveyancing lawyer, claiming that the construction activities had caused damage to the original fence. The notice purported to require the respondents to stop further damage and to repair and make good any damage to a workmanlike standard within 21 days.

[6]    On 23 December 2022, the respondents purported to issue a cross-notice objecting to Mr Jin’s notice and making a counter-proposal. The objection stated, among other things, that the earthworks and construction activities had not directly

1      Narayan v Jin [2023] NZDC 22460.

caused damage to the fence and retaining wall.  Rather, the issues were a result of  Mr Jin’s own actions and failures, as outlined in an attached letter from Network Builders Ltd dated 21 December 2022. In terms of the counter-proposal, it was that Mr Jin should rectify the retaining wall and reinstate it as per the consented drawings. The counter-proposal also addressed other matters, including that he remove or apply for the necessary consent for a pergola on his property.

[7]    During January and February 2023, without prejudice discussions took place between the neighbours seeking to resolve the disputed issues, including site meetings with building experts.

[8]    On 16 May 2023, the respondents issued another fencing notice to Mr Jin, under a cover letter from Hesketh Henry, with quotation documents for the proposed fencing works. The cover letter referred to the fencing notice issued on 5 December 2022 and the cross-notice issued on 23 December 2022. It also referred to easement notices issued to Mr Jin in  respect  of  breaches  of  a  land  covenant.  On  a  without prejudice basis, the respondents proposed (among other things) that Mr Jin agree to pay 50 per cent of the costs to remove and reconstruct the fence between the two properties based on one of two quotes that were attached. Both the letter and the enclosed fencing notice gave Mr Jin the option of which quote to select, with the cost of materials to be supplied by the chosen contractor and shared equally. The fencing notice stated that, within 21 days of the date of receipt of this notice, you may object and make your counter-proposals. It also stated that if no objection was received, then the respondents would proceed with the fencing work in accordance with the notice and Mr Jin would be deemed to have agreed to the proposals set out in the notice and would be liable to share the cost accordingly.

[9]    The notice of 16 May 2023 was served by urgent courier and signed for by Mr Jin at 1.54 pm on 16 May 2023.

[10]   On 16 June 2023, Hesketh Henry sent a letter by email to Mr Jin referring to the 16 May 2023 letter and fencing notice and noting that no response had been received. The letter advised that the respondents had selected ProGroup to complete the fencing works (the cheaper quote). The scope of work had been further reduced

by restricting the works to along the driveway only, so an adjusted quote for

$13,794.62 plus materials was enclosed. The letter made demand for 50 per cent of the ProGroup quote to be paid into a nominated bank account.

[11]   The same day Mr Jin replied to the Hesketh Henry saying that he had responded by email on 24 May 2023 objecting to the Fencing Act notice “and the excessive quotes”. Among other things, Mr Jin objected that if there was any obligation to repair (which he denied), then the obligation was to reinstate it and not upgrade it. Instead, he included his own quotes, including one from his own builder of $4,000 for a new fence. Based on that quote Mr Jin offered to contribute $2,000.

[12]   Hesketh Henry responded with a letter emailed on 19 June 2023 denying that their clients had ever received the 24 May 2023 email. In any event, they noted it had not been served using a method specified under the Fencing Act. They also challenged the credibility of Mr Lin’s quotes, given that one lacked any meaningful scope of work and the other was several months old. The respondents therefore advised that they intended to continue with the work quoted for by ProGroup.

[13]   The disputes continued when the work to replace the fence commenced and police were involved on two occasions. Ultimately, the construction of the fence was completed, and the contractors invoiced a total of $20,432.37.2

District Court decision

[14]   The Judge found the fresh notice issued by the respondents on 16 May 2023 was a valid notice. No valid objection or cross-notice had been issued by Mr Jin. Accordingly, Mr Narayan was entitled to be reimbursed 50 per cent of the costs incurred in the construction of the fence. Mr Jin was ordered to pay $10,216.18.3

[15]   The Judge placed reliance on s 14(4) of the Act. She accepted that the prescribed period had not commenced and therefore the prior notices had not lapsed.4 However, she considered the words in subs (4) “but nothing in this subsection shall

2 At [10].

3      At [27]–[28].

4 At [17].

restrict the giving of further notices and cross-notices” (the qualifier) enabled the giving of further notices and cross-notices at any time. The intention of the Act was to provide machinery for the speedy, inexpensive, and equitable resolution of fencing issues between neighbours. Adopting a broader definition best gave effect to that purpose.5

Legal principles

[16]   The purpose of the Act was to reform the law relating to the erection and repair of dividing fences, and in substitution for the Fencing Act 1908.6 The objective of those reforms has been summarised as follows:7

The Fencing Act 1978 was almost guaranteed to be a vast improvement on the 1908 Act, so confused and obsolete had its provisions become. The draftsmen seem to have succeeded in putting together a coherent piece of legislation that should better serve the needs of all New Zealanders, and of urban dwellers in particular. No legislation can prevent friction rising between neighbours over fencing matters, but the new Act should do the next best thing. It should provide machinery for the speedy and equitable resolution of fencing disputes.

[17]   Section 9 of the Act provides that, subject to the provisions of the Act, and to any order of the court made under the Act, the occupiers of adjoining lands not divided by an adequate fence are liable to contribute in equal proportions to work on a fence.

[18]The concept of an “adequate fence” is defined in s 2 as follows:

adequate fence means a fence that, as to its nature, condition, and state of repair, is reasonably satisfactory for the purpose that it serves or is intended to serve

[19]   The procedure is contained in pts 2 and 3 of the Act. An occupier of land who wishes to compel any other occupier to contribute to the cost of work on a fence8 must

5 At [22].

6      Fencing Act 1978, long title. As noted in Gosney v Ngai Tahu Property Ltd [2015] NZHC 515, (2015) 16 NZCPR 310 at [11], the Fencing Act 1908 had endured for over 60 years before being referred to the Property Law and Equity Reform Committee, by the Minister of Justice, on the recommendation of the Law Revision Committee: see Property Law and Equity Reform Committee, The Fencing Act 1908 (June 1972).

7      J F Corkery “The Fencing Act 1978 and Related Matters” (1978) 4 Otago L.Rev. 269 at 276.

8      Fencing Act, s 10(1).

serve on him or her a notice in the prescribed form or to the like effect (form 1 of sch 1 to the Act). The notice must:9

(a)specify the boundary or line of fence, or the parts of the boundary or the line of fence, along which the work is to be done; and

(b)specify … the work proposed to be carried out with sufficient particularity to enable the occupier on whom the notice is served to—

(i)     comprehend the nature of the work proposed and the materials to be used; and

(ii)   to estimate the cost of the work; and

(c)specify the consequences of failure to comply therewith.

[20]   If it is proposed that the cost of the work shall be borne otherwise than in equal shares, the notice must state the shares that are proposed.10

[21]   If the recipient objects to any of the proposals, he or she may, within 21 days after the date of the service of the notice, serve a cross-notice objecting and making a counter-proposal.11 Any work proposed in a cross-notice must be in the required form or to like effect, and be specified with the same particularity as is required of the original notice.12

[22]   The rules for service of a notice or a cross-notice are set out in s 12 of the Act. If a cross-notice is not served within the 21-day period, the occupier receiving the original notice is deemed to have agreed to the proposals set out in it.13

[23]   If the proposals in the notice and the cross-notice do not correspond and the differences are not resolved by agreement within 21 days after the date of the service of the last notice or cross-notice, the matters in dispute may be determined by the Disputes Tribunal (for amounts up to $30,000) or the District Court.14 If the plaintiff ignores a valid cross-notice served by the defendant, the defendant has no obligation to contribute to the cost of the fencing subsequently carried out by the plaintiff.

9      Section 10(2).

10     Section 10(3).

11     Section 11(1).

12     Section 11(2).

13     Section 11(3).

14     Sections 13, 24A and s 2 definition of “court”.

[24]   The time at which work on a fence may begin is detailed in s 14 of the Act. If either party does any work on a fence in accordance with s 14, then he or she may recover from the other party as a debt the other party’s proportion of the cost of the work done.15

Analysis

[25]The effect of a second statutory notice involves two elements:

(a)as a matter of interpretation,16 whether the statutory provisions permit an earlier notice to be revoked, replaced, amended, or supplemented (e.g. by a backup notice); and

(b)what was intended on the facts.

[26]   The issue more commonly arises in the context of notices issued under the Property Law Act 2007. For example:

(a)In SGAH Investments Ltd v Mei Enterprises Ltd, a second notice issued by the landlord refusing to renew a lease was expressed to be “in addition” to the first one, but implied that the time limit for applying for relief ran from the date it was served. The Court held that the second notice superseded the first (which was “automatically extinguished”) and the proceedings seeking relief had therefore been issued within the time limit.17

(b)In Patel v MacLeod, three Property Law Act notices were issued. The first notice required that the bond be reinstated by 1 August 2017.  The second notice required the bond to be reinstated by 25 August 2017. The Court held that the lessor had thereby extended the time

15     Section 14(6).

16     To be ascertained from its text and in the light of its purpose and its context: Legislation Act 2019, s 10.

17     SGAH Investments Ltd v Mei Enterprises Ltd [2021] NZHC 1588 at [13] and [28]–[30]. Not challenged on appeal: SGAH Investments Ltd v Mei Enterprises Ltd [2022] NZCA 103 at [16].

within which the breach could be rectified.18 The second notice became the operative notice, and they could no longer terminate the lease because of any failure to comply with the first one.19

[27]   As a matter of contract law, it is well-established that an offeror can revoke an offer at any time prior to acceptance. This is because the offeror is not legally bound until the contract is formed. The revocation of an offer is effective upon communication to the offeree. Revocation can also be implied, so long as the intention is unequivocal.20 An offer can be withdrawn before acceptance if the offeree has actual knowledge of an act inconsistent with the offer’s continuance, such as selling the property to a third person.21 Similarly, a subsequent offer that changes the terms of the original offer can impliedly revoke the original offer.22

[28]   The first issue is whether the statutory provisions of the Act permit an earlier notice to be revoked, replaced, or amended. I agree with the analysis of Judge Forrest that this is permitted, because this is consistent with the purpose of the Act, to facilitate the speedy and equitable resolution of fencing disputes.

[29]   Like the District Court, I accept the appellant’s submission that s 14(4) does not apply in a direct way to authorise a replacement notice. Section 14(4) only applies for any period of 90 days after the expiration of the “prescribed period” and before the completion of the work. The “prescribed period” in s 14(2) is 28 days commencing on the day on which the person first became entitled to commence the work. That entitlement only arises if s 14(1) applies, because there is no cross-notice, or because any differences are resolved by agreement or court order.

[30]   However, even if the qualifier does not apply directly, it is consistent with and signals an expressly intended permissive approach — the Act does not seek to restrict what would be an ordinary right at common law to give further notices.23 For example, if one party obtained a quote for building a fence for $10,000 and issued a notice based

18     Patel v MacLeod [2018] NZHC 388 at [36].

19     At [37], referencing Doxcon Pharmaceuticals Ltd v Tasmandairy Ltd [2015] NZHC 350 at [21].

20     Stephen Todd and Matthew Barber Laws of New Zealand Contract at [30] and n 4.

21     R v Homer (1913) 33 NZLR 222 (HC) at 224, referencing Dickinson v Dodds [1876] 2 Ch D 463.

22     Gilkes v Leonino (1858) 140 ER 1180.

23 See [26] and [27] above.

on that quote, the same party should be able to revise the intended works if he or she finds a competing service provider who can do the same job at half the price ($5,000). It is in the interests of both neighbours to allow a replacement notice to be issued, superseding the first one, even if the other neighbour still does not agree. There is no policy reason for forcing the parties to incur the costs of seeking a court order, instead of exercising a self-help solution of replacing the first notice.

[31]   The regime prescribes a process to achieve certainty about the nature of the proposed work and the related payment obligations. It increases the prospect of a self-help solution being reached by deeming acceptance unless a cross-notice is given. The costs of court involvement should be minimised as far as possible.

[32]   The appellant argues that such an interpretation would allow one neighbour to derail the process by adopting a strategy of repeatedly issuing new notices. I do not accept that such a strategy is likely, nor that it would succeed. I agree that it would be necessary to issue a cross-notice each time a new notice is received, to avoid deemed acceptance. However, that party could proceed as of right with seeking a court determination on the impasse, including a court order to enforce the preferred proposal in that person’s own notice (like a claim and counterclaim in court proceedings, I would not regard an amended counterclaim as having any impact on the claim’s existence). In any event, this potential for obstructive behaviour does not justify imposing unnecessary court costs in the ordinary circumstance of needing to replace an earlier notice. I agree with the District Court that it is more important to cater for the latter circumstance, consistent with a purposive approach of facilitating the speedy and equitable resolution of fencing disputes. Accordingly, I reject the appellant’s submission that “there is simply no mechanism for the issue of a new notice while the December notices are extant”.

[33]   The second question is the factual one of whether the notice issued by the respondents on 16 May 2023 was valid and intended to supersede the earlier cross-notice counter-proposal issued on 23 December 2022. Like the circumstances in SGAH Investments Ltd,24 I consider it is unequivocal that the respondents were

24 See [26](a) above.

intending to issue and rely on a new fencing notice (referred to in para 5 of the cover letter) which superseded the earlier counter-proposal that Mr Jin should remove and reconstruct the fence. The respondents’ earlier counter-proposal did not specify the fence work with particularity, the materials to be used, or estimate the cost of the work, and no agreement had been reached. After some months had elapsed without resolution, the 16 May 2023 notice was specific about the respondents’ intended way forward, based on the two quotes they obtained for the work. That new plan for the fence was inconsistent with any continuing reliance on the first cross-notice about the fence — it was referred to as relevant background only.

[34]   It follows that I agree with the District Court’s conclusion that the 16 May 2023 notice was valid and intended to supersede the earlier cross-notice in respect of the proposed fencing works. Given that no cross-notice was validly issued by Mr Jin, the respondents were entitled to be reimbursed 50 per cent of the costs incurred in the construction of the fence.

Result

[35]The appeal is dismissed.

[36]   The respondents are entitled to costs. If the parties cannot agree, the respondents may file a memorandum on costs within 15 working days, and the appellant may file a memorandum within the next 15 working days. I will then determine costs on the papers.

O’Gorman J