Paridaen v Mahaside Pty Ltd[2022] QSC 109

SUPREME COURT OF QUEENSLAND

Introduction

1. [1]
   The applicants and the respondent own adjoining land on Somerset Drive in Buderim.  The applicants have owned their land since 1997.  The respondent is a property developer, which purchased the adjoining land in 2019 with the intention of subdividing it.  The applicants’ land is a “battleaxe block”, meaning that it is accessed down a long driveway from the road.  The applicants share that driveway with the owners of the adjoining land on the other side, with their respective use of it governed by easements.  The respondent’s subdivision development is now completed.  The subdivision works included a retaining wall between the respondent’s land and the applicants’ land, along the side of the driveway.  It is not disputed that, as constructed, the retaining wall encroaches onto the applicants’ land.   The extent of the encroachment varies, along the 70 metre length of the driveway, but is as much as 10 or 13 cm over the boundary at some points. 
2. [2]
   The applicants want the encroachment removed.  By their originating application filed 21 January 2022, the applicants seek orders pursuant to s 184 of the Property Law Act 1974 (Qld):

   1. (a)
      that within a specified period of time, and at its own cost, the respondent remove entirely that part of the retaining wall (including footings) which is constructed over the boundary, and on the applicants’ land, and reinstate the retaining wall entirely within the respondent’s land; and
   2. (b)
      upon completion of those works, the respondent obtain a survey to confirm the encroachment has been removed.
3. [3]
   For the following reasons, I am persuaded that it is appropriate to order the removal of the encroachment.

Relevant Principles

4. [4]
   Section 185 of the Property Law Act provides that:

3. “185
   Powers of court on application for relief in respect of encroachment

3. (1)
   On an application under section 184 the court may make such order as it may deem just with respect to —

1. (a)
   the payment of compensation to the adjacent owner; and
2. (b)
   the conveyance, transfer, or lease of the subject land to the encroaching owner, or the grant to the encroaching owner of any estate or interest in the land or of any easement, right, or privilege in relation to the land; and
3. (c)
   the removal of the encroachment.

3. (2)
   The court may grant or refuse the relief or any part of the relief as it deems proper in the circumstances of the case, and in the exercise of this discretion may consider, amongst other matters —

1. (a)
   the fact that the application is made by the adjacent owner or by the encroaching owner, as the case may be; and
2. (b)
   the situation and value of the subject land, and the nature and extent of the encroachment; and
3. (c)
   the character of the encroaching building, and the purposes for which it may be used; and
4. (d)
   the loss and damage which has been or will be incurred by the adjacent owner; and
5. (e)
   the loss and damage which would be incurred by the encroaching owner if the encroaching owner were required to remove the encroachment; and
6. (f)
   the circumstances in which the encroachment was made.”

5. [5]
   It is uncontroversial that to the extent the retaining wall is on the applicants’ land, it is an “encroachment” within the meaning of s 182.  The applicants are the “adjacent owner” and the respondent is the “encroaching owner” within the meaning of those terms in s 182. 
6. [6]
   The discretion conferred by s 185 is a very wide one, with the relevant factors not limited to those set out in s 185(2).^[1]  Other factors which have been identified as relevant include whether the applicants (the adjoining owner) obtained a survey at an early stage;^[2] and the conduct of the parties, particularly conduct giving rise to the encroachment, and whether the encroaching owner was aware of the fact of the encroachment at the time it was constructed.^[3] 

Factual circumstances

7. [7]
   The respondent purchased its land in mid-2019.  Mr Covey is the director of the respondent.  On 30 September 2019, a company called Subdivisions (Qld) Pty Ltd, of which Mr Covey is also the director (and which he described as “the overarching company” that is “ultimately responsible for the consulting practice”^[4]) wrote to the applicants providing “a full set of proposed plans for the works”.  The letter drew the applicants’ attention to the fact that “adjacent to your existing driveway and contained within our property, we propose to construct a face rock wall”.^[5] 
8. [8]
   One of the applicants, Mr Paridaen, gave evidence that before any work started on the respondent’s land, he and his neighbour on the other side, Mr Moore, arranged to have a survey done.   It was clear from Mr Paridaen’s evidence that he did this because he was concerned to ensure the property development next door did not impact on his property boundary and, in particular, on the six metre wide driveway that he shares with Mr Moore and which he regards as an important part of his property.^[6]  A copy of this survey was provided to the respondent.^[7]
9. [9]
   In October 2019, the respondent obtained approval for the development.  The development approval includes a requirement, in condition 18, that:

“The developer must provide certification by a Licensed Surveyor that:

1. (a)
   The constructed access and roadworks is fully contained within a dedicated reserve/registered easement
2. (b)
   All utility services are wholly located within the lot they serve or alternatively included in an easement
3. (c)
   All retaining walls and structures are fully contained within the lot they retain”.^[8] (emphasis added)

10. [10]
    The plans for the subdivision were approved by the Council on 16 January 2020 (exhibit 2).
11. [11]
    On 3 April 2020 the applicants (as Owner) and the respondent (as Developer) entered into a Construction Works Deed.   Clause 2 of the Deed provided as follows:

1. “2
   Agreement for Construction

1. (a)
   In consideration for the Owner granting Proposed Easement A^[9] to the Developer, the Owner agrees to allow the Developer to conduct the Work^[10] on the Owner’s Property generally in accordance with the plans contained in Annexure A, but particularly:

1. (i)
   The rock wall on the common boundary to the Owner’s and Developer’s properties will be constructed nominal 900mm above the ground level at the back of the block reducing to nominal 400mm at the front of the block to the survey peg; and
2. (ii)
   The rock wall will extend to the surveyor’s peg at the front of the properties.

2. (b)
   The Parties, acting reasonably, must agree on the time and days for the Work to be completed, which will generally be Monday to Friday within the hours 7:00am – 6:00pm.
3. (c)
   The Developer agrees to;

1. (i)
   have the Work carried out by suitably qualified tradespersons in a timely manner; and
2. (ii)
   Return the Owner’s Property to the Owner in a clean condition ensuring the removal of any rubbish, debris and building materials following completion of the Work.” (emphasis added)

12. [12]
    The plans which are Annexure A to the Deed are the plans approved by the Council.  Relevantly, the plans show, on sheets 5 and 6 of 12, by way of a notation identifying the proposed retaining wall, the words “NOMINAL 800mm-900mm HIGH FACE ROCK WALL TO PROPERTY BOUNDARY.  EXTEND WALL 150mm – 200mm ABOVE FINISHED GROUND LEVEL OF LOT 2…” (emphasis added).
13. [13]
    Clause 4 of the Deed dealt with risk and indemnity and provided that the respondent (as Developer) agreed to carry out the Work “at the developer’s sole risk”; would ensure all contractors hold appropriate insurance for carrying out the Work; and would be liable for and indemnify the applicants (as Owner) against any liability or loss arising from and costs incurred in connection with, inter alia, any breach of the Deed by the Developer.
14. [14]
    Mr Paridaen’s evidence is that he understood the reference in the Deed to the retaining wall “on” the boundary meant that the retaining wall would not go over the boundary onto his property.
15. [15]
    Mr Covey’s evidence was that, a few days before the Deed was executed, on 27 March 2020, an email was received from the applicants’ solicitors which “very clearly states that the rock wall … was to be constructed on their clients’ property (the Applicants’ property)…”.  Mr Covey says he thought it would be better if the Deed read “on the common boundary of the owners and developer’s property”, rather than “on the owner’s property”, and amended the Deed accordingly.  
16. [16]
    The effect of Mr Covey’s evidence was that he had provided a draft Deed; the applicants’ solicitor had requested an amendment (which, Mr Covey contends, was to provide for the retaining wall to be constructed on the applicants’ property); and he then made a change to the Deed to refer to the common boundary.  The submission for the respondent was that “on the common boundary” effectively meant straddling the common boundary between the two properties.  The original draft Deed that Mr Covey says he provided is not in evidence.
17. [17]
    In so far as Mr Covey gave evidence that he believed the applicants’ solicitor was requesting a change to the Deed to reflect the retaining wall being constructed (partly) on the applicants’ property, or that it was the applicants’ intention to have the rock wall on their property, I reject his evidence. I find that is a disingenuous and self-serving reconstruction, based on the wording of the solicitors’ email of 27 March 2020.
18. [18]
    In the email of 27 March 2020, the applicants’ solicitor said:

“In respect of the Deed of Construction of Works, our client requests the following amendments:

1. 1.The rock wall on our client’s property should be 900mm above the ground level at the back of the block reducing to 400mm at the front of the block to the survey peg.  I am instructed this has been discussed and agreed by the parties.
2. 2.The rock wall extend to the surveyor’s peg at the front of the block.  It is our client’s experience that cars currently use the area of the front of our client’s property as a turning circle and fro [sic] park and are conscious of the impacts on all owners.
3. 3.The Deed impose an obligation on your client to ensure the property is returned to them in a clean condition ensuring the removal of any rubbish, debris, and building materials following completion of the works.”

19. [19]
    It seems clear, to me, that what the solicitor was conveying was their instructions in relation to the height of the rock wall (remembering that the notation on the approved plans referred to a range of heights).  Mr Paridaen’s evidence, which I accept, is that to the extent the solicitor could be taken to be saying something else, that was not in accordance with his instructions.

20. [20]
    As a matter of principle, the Construction Works Deed is to be construed objectively, by reference to what a reasonable person in the position of each of the parties would have understood it to mean, having regard to the language used by the parties, the surrounding circumstances known to the parties and the purpose and object of the transaction.^[11]   The focus is on the words used by the parties in the particular provision concerned, construed in the context of the contract as a whole.^[12]

21. [21]
    The surrounding circumstances known to both parties at the time the Deed was entered into include:

    1. (a)
       that the respondent intended to construct a “face rock wall” adjacent to the applicants’ existing driveway, which would be “contained within our [the respondent’s] property” (letter of 30 September 2019);
    2. (b)
       the applicants, and their adjoining neighbour on the other side, were sufficiently concerned about the boundary of the property to obtain a survey before any work started, and provided that to the respondent;
    3. (c)
       the plans approved by the Council, which were annexed to the Construction Works Deed, contemplated the “face rock wall” being constructed “to” the property boundary; and
    4. (d)
       there was no negotiation or agreement for any compensation, easement or adjustment to the boundary of the applicants’ land (which might be expected if someone was agreeing to an encroachment to their land).
22. [22]
    What was also known to the respondent – although not necessarily to the applicants – was that it was a condition of the development approval that any retaining wall be fully contained within the respondent’s lot.
23. [23]
    I find that a reasonable person in the position of the parties to the Construction Works Deed would understand the words used in clause 2(a) to refer to the rock wall proposed to be constructed on the respondent’s land, up to but not beyond the common boundary.  The words “on the common boundary” are, in the context of the Deed as a whole (including what is not there, namely any provision for compensation, an easement or an adjustment to the applicants’ boundary), and having regard to the known surrounding circumstances, to be understood as meaning “to the common boundary”.
24. [24]
    I accept Mr Paridaen’s evidence that he was at all times concerned about maintaining his property’s boundary, and took steps to protect it, for example, by obtaining a survey when he learned that a subdivision development would be happening next door.  It is completely inconsistent with that, and with his subsequent conduct, that he would have instructed his solicitor to request that the rock wall be constructed on the applicants’ property.
25. [25]
    What is more, having regard to the facts that Mr Covey had written to the applicants in September 2019, referring to a proposed rock wall “contained within our property”; that the respondent was provided with the survey arranged by Mr Moore and Mr Paridaen before any work commenced; that the development approval expressly required that any retaining walls be wholly contained within the respondent’s lot; and that the approved plans contemplate a rock wall “to” the property boundary, it is entirely implausible that the applicants would have agreed to the rock wall being constructed on their property.  I reject Mr Covey’s evidence to that effect; and the respondent’s submissions as to the construction of the Deed to that effect.
26. [26]
    The retaining wall was constructed during 2020.
27. [27]
    Mr Covey, on behalf of the respondent, obtained a survey of the rock wall in November 2020.  That survey, prepared by Murray & Associates, showed that the rock wall had encroached upon the applicants’ property, to varying extents along the length of the driveway, at the widest by 10 cm.^[13]  The surveyor later calculated the area of the encroachment as five square metres.^[14]
28. [28]
    Mr Covey met with the applicants on 12 November 2020 to discuss the fact that the rock wall encroached on the applicants’ property.  There is a dispute about what occurred during this conversation, addressed in the affidavits only.  Neither Mr Covey nor Mr Paridaen were cross-examined about this part of their evidence.   I prefer the evidence of Mr Paridaen where it conflicts with that of Mr Covey, as I took a less than favourable view of the credibility and reliability of Mr Covey.  I reject Mr Covey’s evidence that Mr Paridaen said something which he took to mean Mr Paridaen was aware of the encroachment whilst the wall was being constructed.  I accept Mr Paridaen’s evidence that, once the wall was constructed, he realised it encroached on his land – but that he had not realised during construction and, if he had, he would have said something about it.   Mr Covey says that at the end of this conversation, he told the applicants and Mr Moore that he “would make some further enquiries and take some further advice” and asked them to give the matter further thought as well.^[15]
29. [29]
    However, contrary to that last indication, the next day, on 13 November 2020, Mr Covey sent an email to the surveyor, saying:

“… I have discussed the plan and encroachments with my neighbour.  My neighbour does not have any concerns with the encroachments.  Accordingly, could you please proceed in the usual manner…”^[16]

30. [30]
    In light of the evidence of Mr Paridaen, which I accept, and even in light of Mr Covey’s own evidence at [56] of his first affidavit, that was incorrect. 
31. [31]
    Mr Covey acknowledges that, on 16 November 2020, he met with the applicants and Mr Moore again to discuss the encroachment of the rock wall and that Mr Paridaen expressed the fact that he was not happy about it.  He notes that the applicants said they were having discussions with their solicitors about the encroachment, and that the encroachment had to be removed.^[17]   Yet Mr Covey did not do anything to correct what he had said to the surveyors.
32. [32]
    The surveyors, Murray & Associates, wrote to the applicants on 4 December 2020, to advise that the survey showed that the retaining wall “crosses the common boundary.^[18] 
33. [33]
    In January 2021, Mr Paridaen engaged his own surveyor, Mr Vella of Downs Group, to conduct a survey.  This survey also showed that the retaining wall encroached across the boundary onto the applicants’ property (to varying extents, but at the widest point by 13 cm).^[19]
34. [34]
    On 7 July 2021 Mr Covey lodged the plan of survey for registration, despite knowing that the retaining wall was not contained within the respondent’s lot and that there was still a dispute with the adjoining owner (the applicants) in relation to the encroachment.
35. [35]
    The evidence about what is involved in removing the encroachment, and what that might cost, is unsatisfactory – the evidence comes only from Mr Covey; purports to be opinion evidence, in circumstances where Mr Covey’s qualification to give the evidence was not established and, in any event, he could not be described as an independent or objective witness; and, in so far as it involved cost, the evidence was not particularised in a manner to enable the applicants’ legal representatives to properly test it.  The respondent did not wish to apply for an adjournment of the proceedings to address these shortcomings.^[20]
36. [36]
    An alternative, which it seems was suggested by Mr Paridaen at an earlier stage, was to “shave off” a part of the rock wall.  Mr Covey says that is not feasible – but, again, I was not persuaded he was appropriately qualified to give that evidence.  The question of what would need to be done to remove the encroachment was not satisfactorily addressed on the evidence.
37. [37]
    In his earlier affidavit (February 2022) Mr Covey gave an estimate of somewhere between $32,100 and $61,000 to demolish the existing rock wall encroachment and replace it, with the cost depending on the style of replacement wall.  In his later affidavit (April 2022), Mr Covey says “market volatility and cost increases” mean the range is now from $69,000 to $95,000.  As I have already said, I am not persuaded to act on this evidence – given the issues in relation to Mr Covey’s qualification to express admissible opinion evidence of this kind, the lack of independence and objectivity and the lack of particularisation. 
38. [38]
    Whilst I am not prepared to accept Mr Covey’s evidence in relation to the estimate(s) of the cost of removing the rock wall, nor in relation to the scope of work required, I do proceed on the basis that, if demolition and replacement is what is required, the work is likely to be substantial, and the cost not insignificant.
39. [39]
    Apart from the fact that the applicants do not want the rock wall encroaching on their land, and diminishing the six metre wide driveway that they regard as an important part of their property, as part of a reciprocal arrangement (formalised by easements) with their adjoining owners on the other side, they also point to the potential for future problems if they wish to develop their own property.  This is because of a requirement, under the Sunshine Coast Planning Scheme 2014, for “rear lots” (such as the applicants’) to have a minimum six metre width of combined access strip.  The respondent submits this is not relevant, because the length of the applicants’ driveway exceeds what the Planning Scheme contemplates. For the applicants it is accepted the length of the driveway may be an issue, having regard to the Planning Scheme, but submits the point is that that arises by virtue of the applicants’ land, not because of an encroachment which has been constructed, in breach of an agreement.

Determination

40. [40]
    The respondent submits the Court would exercise the discretion by dismissing the application, having regard to the following:

    1. (a)
       the size of the encroachment (five square metres) is minor in the context of the length of the applicants’ driveway overall (70 metres);
    2. (b)
       the encroachment is trifling and has no serious effect on the use and enjoyment of the applicants’ land – because:

       1. the part of the applicants’ lot that is subject to the encroachment is not “usable land” – it can only be used as a driveway;
       2. there is no evidence to suggest that the small area of land covered by the encroaching wall has any real measurable value; and
       3. there is no evidence to suggest that the encroaching wall actually prevents the applicants from doing anything with their lot;
    3. (c)
       the applicants consented to the wall being constructed partly on their land; and
    4. (d)
       it would involve significant work and cost to remove it.  
41. [41]
    For the reasons already given, I reject the submission that the applicants agreed or consented to the encroachment.
42. [42]
    Mr Paridaen says “it is not about [just] a few square metres”, emphasising that if it was “a few square metres” somewhere else on his property “I would have asked Mr Covey … to give me a sixpack and we would have gone away as friends”.  But he says where the encroachment is, on his driveway, impacts on the access to his property and as it is now on his land, he has concerns about being responsible for the wall.
43. [43]
    Counsel for the applicants emphasised that the respondent is a commercial development company, which was on notice as to the location of the boundary prior to commencing its construction works; that the encroaching land is land developed by the respondent for a profit; that whilst the encroachment may be small, it raises serious concerns for the applicants “who had thought there was agreement that the wall would not encroach on their land”.  Further, counsel for the applicants submits the cost of rectifying the error is a matter for the respondent, given that it is work undertaken in the context of a commercial development and in the face of a written agreement (the Construction Works Deed) that provided for the wall to be constructed to the boundary, and placed the risk of the works on the respondent.  
44. [44]
    The applicants submit the circumstances leading to the encroachment are the “most relevant factor”, including:

    1. (a)
       the encroachment is in breach of the respondent’s development approval;
    2. (b)
       the encroachment is inconsistent with the plans attached to the Construction Works Deed and the respondent’s obligations under the Deed;
    3. (c)
       the encroachment occurred despite the applicants taking care to identify the boundary before construction occurred;
    4. (d)
       the respondent at first ignored the encroachment, and subsequently refused to remove it;
    5. (e)
       the respondent is a sophisticated developer, and its director, Mr Covey, an engineer; whereas the applicants are unsophisticated people who expected the respondent to act properly and not compromise their interests;
    6. (f)
       the respondent wrongly stated, to the surveyor, that the applicants had no concern with the encroachment, and requested the surveyor to prepare compliance plans, knowing that the retaining wall could not be certified as compliant with the development approval;
    7. (g)
       the retaining wall is a potential impediment to further development of the applicants’ land (because it reduces the width of the access below the minimum required for a “rear” block); and
    8. (h)
       the encroachment impedes a right-of-way easement with a third party, namely, the adjoining owner on the other side.
45. [45]
    If the court is not minded to dismiss the application, the respondent submits that the court would make an order that the respondent be granted an easement over the part of the applicants’ land where the encroachment is situated.
46. [46]
    Whilst the applicants acknowledge the relevance of the cost of removal, in relation to the extent of the encroachment, as a factor in the exercise of the discretion, they submit that what is more relevant in the circumstances of this case, is the conduct of the respondent – that the respondent, as encroaching owner, knew there should not be an encroachment, and yet the work was undertaken in such a way that it resulted in an encroachment.  The applicants submit they did all they could to avoid an encroachment (obtaining a survey, entering into the Construction Works Deed) and say they should not be left with the burden of this; that the burden of correcting the problem should lie with the respondent.  I accept that submission.
47. [47]
    It is that conduct on the part of the applicants, prior to the works commencing, and the conduct of the respondent before and after, by its director Mr Covey, that ultimately leads me to the view that this is a case in which the discretion under s 185 ought to be exercised by making an order for the removal of the encroachment.   The applicants could not have done more to try to protect their property interest.  If they had been asked to agree to an easement over a portion of their driveway – the outcome suggested by the respondent (apart from simply dismissing the application) – I find, on the evidence before me, that there is no doubt that the applicants would have refused.   They did not want any part of the respondent’s development to encroach on their boundary.  I can see no reason why the respondent, in the face of its letter of 30 September 2019; the development approval; the approved plans; and the Construction Works Deed – all of which contemplated a rock wall that went up to, but not beyond, the boundary – should be given the “seal of [the court’s] approval”^[21] and permitted to have the benefit of the rock wall encroaching on the applicants’ land (which it seems was the result of being constructed by a contractor without proper regard to the surveyed boundary), whilst the burden of that falls wholly on the applicants.  That would not be just, given all the circumstances of this case.  The encroachment may not be significant to the respondent, but on the evidence of Mr Paridaen, which I accept, it is clearly significant to the applicants. 
48. [48]
    The application for an order for the removal of the encroachment is allowed.  I will hear from the parties as to the appropriate form of the order, including as to the time frame for the works to be carried out, and any other consequential orders that may be required, as well as in relation to the costs of the application.