Shalhoub v Johnson (NSWSC 2020)

Key Takeaways

The NSWSC recently ruled on a dispute between two neighbours arising from an alleged failure by one neighbour to support the land of the other that resulted in the leaning of a retaining wall.

In considering the evidence of the parties, the Court placed a particular emphasis on historic records including Google Street View images demonstrating gradual changes to the land over time resulting in the leaning of the wall.

The Court held that the plaintiff failed to establish that works on the neighbouring property caused or contributed to movement of the retaining wall and dismissed the plaintiff’s claim with costs.

Brief Facts

The plaintiff bought a house in Randwick in the 1980s. The defendants’ property was separated from the plaintiff’s by a 36m long retaining wall that provided support to the plaintiff’s land.

In 2012, the defendants completed significant renovations. These included the installation of an in-ground swimming pool and the excavation of a 4 metre trench alongside the retaining wall so that a garden bed could be replaced by a concrete footpath.

The plaintiff alleged that the works, and in particular the excavation beside the retaining wall, caused the retaining wall to lean away. The statement of claim alleged negligence on the part of the defendants and relied upon a breach of the duty to support neighbouring land imposed by s177 of the Conveyancing Act 1919 (the Act).

The Court heard lengthy evidence from the parties themselves as well as expert evidence from engineers and quantity surveyors.

The plaintiff and her family gave evidence that they observed the retaining wall begin to lean and crack while the works were taking place in 2012. This evidence formed the basis of assumptions given to the plaintiff’s engineering expert, who gave an opinion that the works in 2012 destabilised the wall and caused it to lean.

The defendants challenged the accuracy of the evidence adduced by the plaintiff with historic records, including Google Street View images, which depicted a lean to the retaining wall before 2012. The defendants also tendered past builders’ notes that described the wall as dilapidated. These facts were not accounted for by the plaintiff’s expert.

The defendants’ engineer relied on an analysis of historic records to provide an opinion that the wall had leaned over the course of many years due to multiple different causes.

Judgment

The Court considered that in order to establish liability under s177 of the Act it is not enough for a plaintiff to simply establish that something done on supporting land in fact removed any support to land; a plaintiff must establish that the person failed to take reasonable care in doing something on the supporting land. The inquiry that s177 calls for is:

(i)   whether the defendant has done anything on or in relation to land;

(ii)   if ’yes‘ to (i), has what the defendant did in fact removed the support; and

(iii)   if ’yes‘ to (ii), did the defendant exercise reasonable care in doing that particular thing?

The Court:

• found the plaintiff’s evidence was contradicted by historic records and photographs;
• held that there was no evidence the defendants or their independent contractors had failed to exercise reasonable care; and
• criticised the plaintiff’s evidence for failing to set out any analysis of standards and practices expected from builders when working with comparable small trenches in residential settings.

As there was no evidence of a failure to take reasonable care, the requirement of an element of negligence under s177 was not satisfied. The Court dismissed the plaintiff’s claim with costs.

Implications

Shared structures such as retaining walls in both residential and commercial properties can create fertile ground for disputes.

S177 of the Act creates a broad duty in NSW in relation to the support of adjoining land and can be a useful foundation for claims against a number of parties, including property owners, contractors and developers where buildings are damaged following works on neighbouring properties.

However this decision is a reminder that the duty under s177 is not one of strict liability. The court will require compelling evidence that the damage was caused by a failure of the neighbour to take reasonable care leading to recent changes in support – as opposed to gradual historic changes – to establish liability for the damage.