Shadbolt v Wise[2003] QCA 241

SUPREME COURT OF QUEENSLAND

[1]  McMURDO P:  I agree that the appeal should be dismissed with costs for the reasons given by Davies JA.

DAVIES JA:

1.The appeal

[2] This is an appeal from orders made in the Supreme Court on 31 October 2002 that:

1. the respondents forthwith pay to the appellant compensation of $15,000 for the encroachment of a pool enclosure onto lot 46 on Crown Plan C31729 in the County of Canning and Parish of Mooloolah as shown on an identification survey done by John Reader & Associates Pty Ltd dated 9 December 1998;

2. subject to all necessary consents from Maroochy Shire Council and Greatwood Community Titles Scheme 19855 being obtained within six months of the date of the order, the appellant transfer to the respondents the fee simple interest in the land over which the encroachment extends;

3. the respondents must pay to the appellant all costs and expenses reasonably incurred by the appellant in order to give effect to the preceding order including, without limiting the generality of the foregoing, the costs of the preparation of the survey plan required to subdivide the encroachment land from lot 46, obtaining the consent of the Maroochy Shire Council to the subdivision of the encroaching land from lot 46 and all legal costs incurred by the appellant in respect of the transfer of the encroaching land to the respondents;  and

4. liberty to either party to apply on three days notice in writing to the other.

These orders were made pursuant to s 185 of the Property Law Act 1974 (Qld) ("the Act").

[3] The appeal was on two bases.  First it was submitted that the learned primary judge misdirected herself on the law to be applied to the question whether any relief should be granted to the respondents who were encroaching owners under the Act and consequently should not have made the orders which she did.  And secondly it was submitted that her Honour was not empowered to grant the relief which she did in the absence of proved willingness of the body corporate under the above scheme, to pass the resolution required by s 27, s 50 and s 55 of the Body Corporate and Community Management Act 1997 (Qld).

2.The first basis of the appeal

(a)The facts

[4] The appellants are the executors and trustees of the will of Frank Wise who died on 7 October 2002 after the hearing of this matter in the Supreme Court but before judgment was delivered.  Frank Wise was, at the time of the hearing, the defendant in the action and owner in fee simple of lot 46 described in the above orders, having an area of 32.375 hectares.  It has been in the appellants' family for about 100 years and for some time has been used for cattle grazing.  The appellants were substituted as parties by order of this Court on 8 May 2003.

[5] The respondents are the owners as joint tenants of lot 4 on SP120415 in the County of Canning, Parish of Mooloolah which is part of a community titles scheme under the Body Corporate and Community Management Act 1997, the Greatwood Community Titles Scheme described in the above orders.  Lot 4 on its southern side adjoins lot 46 on its northern side.  These lots were not adjoining when the swimming pool, the subject of the encroachment to which I am about to refer, was constructed.  However subsequent to its construction and before this application was made a resubdivision of the lots and common property in the community titles scheme, registered on 25 July 2000, had the consequence that, amongst other things, lot 4 substantially increased in area to, it seems, 4883 square metres and adjoined lot 46 in the manner I have described.

[6] On 7 August 1998 the respondents obtained development approval, subject to conditions, for the construction of a covered swimming pool on land which was then partly within lot 4 and partly within common property under the community titles scheme, to which property the respondents had exclusive possession under the scheme.  This was the land, to which I have already referred, which adjoined lot 46 and which by the time of this application, was entirely in the ownership of the respondents.

[7] The swimming pool was constructed but, as it turned out, it was constructed partly on what was subsequently lot 4 and partly on lot 46.  The total area of the pool which encroached onto lot 46 was approximately 46 square metres.  During the course of this hearing we were shown plans and photographs which accurately depicted the swimming pool in its completed form and the manner in which and the extent to which it encroached onto lot 46.

[8] Prior to its construction the respondents did not obtain a survey of the boundaries of their land or of the land the subject of the community titles scheme;  in particular they did not obtain a survey of the southern boundary of that land where it adjoined lot 46.  They assumed that the southern boundary of that land was a fence, running approximately east-west, apparently constructed by one of the appellants' predecessors which had on it, facing north, a notice in the following terms:

"NOTICE

KEEP OUT

NO INTARY (sic)

NO TRESSPASSING (sic)

OUTF. WISE"

[9] However this fence was constructed within the appellants' boundary so that, although the pool, as constructed, did not encroach beyond the fence line it did encroach beyond the boundary line to an extent of 4.55 metres at one end and 3.36 metres towards the other end.  The male respondent was aware of the existence of a survey peg on the northern side of that fence but did not investigate its significance.

[10]  It seems to have been common ground that it was a council requirement that the pool had to be at least 1.5 metres inside the southern boundary of the land to which the respondents were entitled to exclusive possession and it is common ground that, in addition to encroaching, it was constructed, in part, less than 1.5 metres from the fence line.  However it does not appear that the respondents were aware of this before construction was complete.  On the contrary Mr Shadbolt gave instructions to the pool contractor that it was to be constructed 1.5 metres from the fence line.  The respondents were absent during construction and construction was complete, it seems, before they would have had an opportunity of seeing that it was closer than 1.5 metres to the fence line.  It also seems that the engineers, whom Mr Shadbolt had engaged, had determined the precise location of the pool.

[11]  The construction was also completed in breach of a condition of a development permit from the Maroochy Shire Council for the construction, which required inspections by the Council to be called for and made when excavations were complete and complete steel was in place and also on completion of the pool.  No inspection was in fact made, or called for, but there is no evidence that Mr Shadbolt was aware of this until after the pool was complete.  He had left the construction of the pool, in compliance with the terms of the development permit, in the hands of the pool contractor.

[12]  The learned primary judge found that the respondents' conduct involved "flagrant disregard" of the rights of the appellants to enjoy their property without interference from the respondents.  She said that, as a matter of prudence and with a view to ensuring that the construction was within the boundaries of their land, the respondents should have satisfied themselves as to what the true boundary of their land with lot 46 was.  This could easily have been done by a check survey.  She said that the lack of prudence on the respondents' part and their disregard for their neighbour's property rights was heightened by the fact that the body corporate had engaged a surveyor in February 1998 when the respondents were in the process of preparing for the construction of the pool and the respondents did not seek to engage his assistance.  As the respondents were aware of the location of the survey peg to which I have referred her Honour thought it a glaring error on their part to proceed with their construction without taking the simple steps to which I have referred to ensure that the pool did not encroach onto lot 46.  Her Honour concluded, however that what she described as the recklessness of the respondents fell short of being full knowledge of the encroachment.  These findings were not contested in this Court.

[13]  However her Honour also found that the reality from the appellants' point of view was that the encroachment would make no significant difference to the use by them of lot 46 whether lot 46 were continued to be used for its existing use or developed for some other permissible use.  This finding also was not contested.

(b)Some relevant principles

[14]  Section 184 of the Act provides that "either an adjacent owner or an encroaching owner may apply to the court for relief … in respect of any encroachment".  In this case it was the encroaching owner, the respondents, who applied.[1]

[15]  Section 185(1) permits the court, on any such application, to make such order as it may deem just with respect to, amongst other things, the payment of compensation to the adjacent owner and the transfer of land to the encroaching owner.  Section 185(2) then provides that in granting or refusing relief, in the exercise of its discretion, the court may consider amongst other matters -

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

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

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

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

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

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

[16]  In Haddens Pty Ltd v Nesbitt,[2] Gibbs J, in considering the Encroachment of Buildings Act 1955 (Qld), which is substantially re-enacted in Part 11 of the Act, said:

"… for it would be a rare and exceptional case in which the court would make an order under this Act in favour of a person who, with full knowledge, encroached on his neighbour's land.  The court would indeed be reluctant to set the seal of its approval on a deliberate trespass."

I refer to this statement because her Honour quoted it in her reasons and because the appellants have submitted that it led to her misdirecting herself on the law.  It is sufficient to note, for the moment, that, even in the case of a deliberate trespass, his Honour did not exclude the possibility that relief might be granted to an encroaching owner.

(c)Her Honour's reasoning

[17]  In my opinion her Honour reached the conclusion that relief should be granted pursuant to s 185 only after taking into account all relevant factors for and against the granting of such relief and balancing them one against the other.  I have already mentioned the important features, against the granting of relief that the respondents' conduct amounted to a reckless trespass, and in favour of such a grant that the encroachment had only a minimal effect on the appellants' existing and possible future use of lot 46 and consequently on its value.  Other relevant factors specifically referred to by her Honour included the historical and family ties of the appellants' family to lot 46 and that the cost of dismantling and demolition of the pool was substantial.

(d)The appellants' principal argument and my conclusion

[18]  However, as already mentioned, the appellants submitted that her Honour misdirected herself in reliance on the above dictum by Gibbs J.  They submitted that her Honour's approach was, in effect, that where conduct by the encroaching owner falls short of a knowingly deliberate act the discretion under s 185 should always be exercised to grant relief to the encroaching owner.  It was submitted that this approach was demonstrated both from her Honour's reasons and from the orders which she made.

[19]  It follows from what I have said that her Honour's approach was not as the appellant submitted.  On the contrary, as I have mentioned, her Honour carefully weighed up the relevant factors on both sides before concluding, on balance, that relief should be granted in the form of the orders which I have set out.  Neither her Honour's reasons nor her conclusion support the appellants' submission which, in my opinion, must be rejected.

3.The second basis of the appeal

[20] This was, principally, that the respondents were not an encroaching owner within the meaning of s 184 and the definition in s 182 and that consequently her Honour was not empowered to make the orders which she did.  It is not clear how s 193 was relevant to that argument but as it was said to be I shall set it out.  It provides:

"In any application under this division the court may require -

(a)that notice of the application shall be given to any person interested;  and

(b)that any person who is or appears to be interested shall be made a party to the application."

[21]  The appellants submitted that the body corporate under the Greatwood Community Titles Scheme was a party interested within the meaning of s 193.  That much may be assumed because, before the encroaching land could be added to land the subject of the community titles scheme, it will be necessary to obtain a resolution without dissent of the body corporate consenting to the recording of a new community management statement.[3]  However her Honour did require that notice of the application be given to the body corporate but, in the exercise of her discretion, did not require that the body corporate be made a party to the application.  I do not think that her Honour erred in that decision.

[22]  An application under s 184 for an order under s 185  includes an application by an encroaching owner.  The term "encroaching owner" is defined in s 182 to mean the owner of land contiguous to the boundary beyond which an encroachment extends and "owner" is defined in that section to mean a person entitled to an estate of freehold in possession.  The respondents were plainly encroaching owners for they were, at the time this application was made, persons entitled to an estate of freehold in fee simple in land contiguous to the boundary beyond which the encroachment extends.  That was sufficient to entitle them to make an application under s 184 upon which orders under s 185 could be made.

[23]  The appellants' submission in this respect was not entirely clear.  As their counsel acknowledged in the course of argument, they were not merely submitting that orders such as were made here were unjust within the meaning of s 185 because consent of the body corporate had not previously been obtained.  They must have been submitting that no order could be made under s 185 before such consent had been obtained because, before then, the respondents were not persons entitled to an estate of freehold in possession.  However in my opinion they plainly were and there is no substance in this submission.

[24]  The appeal was confined to the question whether relief could and should be granted under s 185.  It was not argued by the appellants that, if the encroachment were to be permitted, the amount of compensation ordered was inadequate or that in any other respect the orders made by the learned primary judge were wrong.  It follows that this appeal must be dismissed.

Orders

1. Appeal dismissed.

2. The appellants pay the respondents' costs of the appeal to be assessed.

[25]  JERRARD JA:  I have read and respectfully agree with the reasons for judgment and orders proposed by Davies JA.