The Owners - Strata Plan No. 1954 v Ashdown Home Units Pty Ltd

These proceedings arise out of a dispute between neighbours. The Plaintiff alleges that the Defendant is liable to it because the steep slope which is on the Defendant's land and which runs down to the boundary has caused damage to the Plaintiff’s retaining wall. The cause of action is nuisance. The facts out of which the dispute arises are as follows.

As at about 1913 there was a large parcel of old system land in Elizabeth Bay, Sydney, New South Wales. Some of the documents refer to it as the Elizabeth Bay Estate. The evidence does not reveal the outer limits of the parcel. It is not necessary to know the details beyond the following.

Within the parcel were a number of “lots”. Lot 65 fronted The Esplanade and was the site of a house named “Glenclose”. Lot 57 fronted the western side of Elizabeth Bay Road where today is Number 100. From Elizabeth Bay Road, Lot 57 ran about 70 metres west to eventually adjoin the rear part of the eastern boundary of Lot 65. Lot 57 was the site of a house named “Brambley”.

To the south of Lot 57 was Lot 58. It also fronted Elizabeth Bay Road where today are Numbers 96 and 98. On paper Lot 58 ran neatly as far west as Lot 57. The point representing the north-west corner of Lot 58 was the same as the point representing the south-east corner of Lot 65 but the two lots were not otherwise contiguous. It was not possible to pass from Lot 58 to Lot 65 without passing over some other land, such as Lot 57. Lot 58 was the site of a pair of semi-detached houses fronting Elizabeth Bay Road, the names of which are not apparent from the evidence. At the western most part of Lot 58 was a tennis lawn.

For the purposes of orientation only, a plan which depicts the relevant land is in Annexure A. The land marked with the red “A” is the tennis lawn. The land marked with the red “B” is the back gardens of the semi-detached houses. Further to the east Lot 58 fronts Elizabeth Bay Road. As set out below, the land marked “A” is now the Plaintiff’s land and the land marked “B” is now the Defendant’s land.

As at 1913 the fee simple in some or all of the Elizabeth Bay Estate was held by James Onslow, a Colonel in the Second Australian Light Horse. The full extent of Colonel Onslow’s land holding is not clear but it included at least Lots 65, 57 and 58. By a 99-year lease granted by one of Colonel Onslow’s deceased ancestors, land had been leased to a deceased ancestor of Hilda and Winifred Humphery which included Lot 57. The lease is not in evidence. From references in other documents it appears that the lease also included Lot 58 and possibly part or all of Lot 65. In any event, the Mss Humphrey had also inherited a second long lease over a strip of land along the eastern edge of Lot 65 by which it was possible to pass from Brambley’s back garden to The Esplanade.

The long lease over Lot 57 may have been of limited benefit to the Mss Humphrey because a couple of years after he took it, their deceased ancestor sublet Lot 57 to Joseph Ross for the entirety of the remaining term of 99 years, less the last 14 days. The long lease over the Lot 65 strip was not included in the sublease to Mr Ross. Mr Ross did, however, receive a right of way and a drainage easement of the Lot 65 strip. From the time of the sublease (1878) the Lot 65 strip was in shared use, at least by the Humphreys (as tenants) and Mr Ross (as holder of the right of way and drainage easement).

Mr Ross mortgaged his sublease and in 1910 it was sold by the mortgagee in possession. The purchaser was Fredrick Learoyd.

On 2 July 1913 Colonel Onslow made a handwritten Deed by which he sold the fee simple in Lot 57 to Mr Learoyd for a thousand pounds. As Mr Learoyd already owned the sublease, Colonel Onslow effectively sold the reversion. The Mss Humphreys were also parties to the Deed. They sold to Mr Learoyd the reversion under the sublease for which they received 10 schillings. As described in the Deed, the interests under each of the long leases over Lot 57 and the sublease with the fee simple and were absolutely extinguished, as would be expected when the landlord and the tenant became the same person without a third party holding an intermediate interest: Doe d Rawlings v Walker (1826) 5 B & C 111 at 121. As far as Lot 57 was concerned, all interests were thereafter owned by a single person: Mr Learoyd.

The position with respect to interests in the Lot 65 strip may be more complicated. Colonel Onslow sold the fee simple in the Lot 65 strip to Mr Learoyd as part of the land for which he received the thousand pounds. There may otherwise be a lack of clarity about how the Deed affected the Lot 65 strip. It is not necessary to make any concluded finding about that issue. The issue may affect people who are not party to these proceedings so care must be taken not to make any unnecessary finding. Two things are relevant for current purposes. First, if it survived, the Deed made on 2 July 1913 and the Mss Humphrey’s long lease over the Lot 65 strip expired in accordance with its terms in about 1974.

Secondly, the Deed contained a provision in the following terms (doing the best one can with the handwriting):

A number of observations need to be made about the provision. First, the reservation of the right of way was stated to be in favour of named persons. It was not stated to benefit any particular land. Extraneous material makes clear that in 1913 both Colonel Onslow (as owner) and the Mss Humphry (as tenants) had interests in contiguous land, including Lot 58, which would naturally benefit from a right of way over the Lot 65 strip to the Esplanade. However, those objective facts may not be immediately apparent from the terms of the Deed. Secondly, the right of way did not expressly include a drainage right under the Lot 65 strip. In that respect the right of way was worded differently to another right of way referred to in the Deed, namely a “right of way over and drainage under the strip”.

In any event, in 1917 Colonel Onslow sold to the Mss Humphrey the fee simple of land which included Lots 58 and 65. Other land may have been included in the sale. It seems likely to have included Colonel Onslow’s right of way over the Lot 65 strip (which was described in the 1913 Deed as lasting “forever”) but the handwriting on the indenture which is in evidence is largely illegible.

On 23 June 1921 the Mss Humphrey made an indenture by which they sold Glenclose and the tennis lawn to Lillian McCormack. More precisely, they sold the fee simple in Lot 65 and the rear portion of Lot 58 where the tennis lawn was located. It will be recalled that Lots 58 and 65 meet at a corner but are not otherwise contiguous. Expressly included in the sale was a right of way over the Lot 65 strip which at this time was owned by Mr Learoyd. By that right of way, it was possible to pass between Lot 65 (Glencross) and the rear part of Lot 58 (the tennis lawn). It was also possible to pass directly from Lot 58 to The Esplanade, although the right of way may not have been necessary for that purpose at that time because Lot 65 fronted The Esplanade.

The other relevant provision of the 1921 sale was that the indenture reserved to the Mss Humphrey a five-foot right of way over the northern edge of the tennis lawn. By that way it was then possible to have pedestrian access from the far north-western corner of the residue part of Lot 58 (the back garden of the semi-detached house at Number 98 Elizabeth Bay Road) across the tennis lawn to join the right of way along the Lot 65 strip.

In 1923 Ms McCormack sold Glencross and the tennis lawn to Mark Foy and Ethel Macken, together with the right of way over the Lot 65 strip. In 1937 Mr Foy and Ms Macken separately sold the tennis lawn (described as “formerly used as”) and the right of way to James Mitchell. Apart from the right of way, the land sold to Mr Mitchell had no street frontage.

The semi-detached houses on Numbers 96 and 98 Elizabeth Bay Road seem always to have been treated as a single parcel. The Mss Humphrey sold them to Mr Silver in April 1928.

Each of the various parcels was in due course brought under the provisions of the Real Property Act 1900 (NSW). Today each of Brambley, the semi-detached houses and the tennis lawn have been demolished and replaced by a multi-storey apartment block. Having regard to the development, Brambley is now more conveniently referred to as International Lodge.

As for the part of Lot 58 which was the site for the semi-detached houses, the evidence includes plans for an apartment block which were approved by council on 30 November 1937. The building depicted in the plans closely resembles the apartment block named Ashdown as observed from the street today. By 31 March 1938 the Ashdown apartment block had been constructed. In about 1956, a company was registered with the name Ashdown Home Units Pty Ltd. It soon after became the registered proprietor of Ashdown which thereafter has operated as a company-title apartment block. It is the Defendant in these proceedings.

As for the part of Lot 58 which was the site of the tennis lawn, the evidence includes approved plans for a 17-apartment block named Hedingley which were approved on 17 June 1938. There is no reason to think that Hedingley was not constructed soon after. The front of the apartment block faces north towards the harbour. There is a relatively small concrete apron out the front which includes some rock garden beds. The concrete apron is contiguous with the Lot 65 strip. There is no street frontage with access to The Esplanade only possible along the Lot 65 strip. The current strata plan is Strata Plan 1954 which was registered on 11 March 1966. The Plaintiff in these proceedings is named as the Owners of Strata Plan 1954.

Within the confines of what used to be Lot 58, the land slopes from the east generally down to the west. The Ashdown apartment block is at the top of the slope and the Hedingley apartment block is at the bottom. Without precision, I will refer to the land between the two apartment blocks as the Slope.

There is a wall at the bottom of the Slope which essentially runs the full length of the boundary between the western edge of Defendant’s land and the eastern edge of the Plaintiff’s land. There is a short interruption in the wall for the Hedingley breezeway. For all intents and purposes the breezeway has been built right up to the boundary line.

The wall lies at the heart of the case. The retaining function of the wall is an issue in the case. The Defendant sought to make a distinction between a gravity wall and a facing wall, although the evidence of both geotechnical engineers makes clear that both types of wall perform a degree of retaining function (more localised in the case of a facing wall). In any event, I will simply refer to it as the Wall in order not to prejudice any of the issues.

It is necessary to address the history, composition and location of the Wall in some detail.

The historical narrative above reveals that the Plaintiff’s land was previously a tennis lawn. The indenture of sale dated 23 June 1921 described the parcel of land as “now used as a Tennis Lawn”. On the incorporated plan it was labelled as “Tennis Court”. The relevant part of the land sold to Ms McCormack was a rectangle, not quite regular but measuring about 104 feet by 44 feet, plus or minus some inches. Assuming a standard tennis court (doubles) is 78 feet by 36 feet, the parcel was a suitable size for tennis albeit a bit narrow for those hoping to return a wide shot. Apart from the present tense used in the indenture, the evidence does not reveal the condition of the tennis lawn in 1920. By March 1928 it was described as “vacant”. By 1937 it was “formerly used”. In any event, given its erstwhile use, the land was evidently reasonably flat at all relevant times prior to the construction of the Hedingley apartment block. On the balance of probabilities it was flat right up to the boundary with the Defendant’s land. In that respect it contrasted starkly with the immediately adjacent Slope which the evidence shows has always been steep right up to the boundary with the Plaintiff’s land.

Apart from what may be inferred from a tennis lawn placed at the foot of a steep Slope, the earliest evidence of a wall on or near the boundary between the parties’ respective parcels of land is a survey of the Defendant’s land which was prepared by William Cowdery, licensed surveyor, on 8 June 1928. Using symbols (explained by expert evidence in these proceedings) the survey depicted a “fence” on the boundary. It also depicted a stone wall by a line which was parallel to the boundary line but distinct from it. The parallel line was labelled “top edge of w[est] face of stone wall”. Whilst right next to the boundary, the “top edge” of the wall was located entirely on the Plaintiff’s land, as is apparent from a measure of the distance from the “edge” of the wall to the boundary at each end (ten and a quarter inches at the northern end and one foot and just under five inches at the southern end). The wall appears to have been different to the “fence”. The first Certificate of Title issued for the Defendant’s land on 16 September 1929 included a plan which was consistent with these details.

On 31 March 1938 a surveyor’s certificate for the boundaries of the Defendant’s land was issued by Halcyon Kinninmont, registered surveyor. The certificate stated that “the remains of a fence erected on a stone retaining wall defines the rear boundary”. The certificate included a plan which, at the boundary with the Plaintiff’s land, stated “remains of fence on boundary”. Beyond the boundary, on the Plaintiff’s land, the plan included two parallel lines and the words “stone retaining wall”. The expert title witness said that the stone retaining wall was depicted in Mr Kinninmont’s survey as “external of” the Defendant’s land.

From their review of the above evidence and their inspection of the site, the two geotechnical engineers who gave evidence in these proceedings have concluded that by no later than 1928 there was a retaining wall on the common boundary and that a taller wall was constructed further on the Plaintiff’s land in 1938. They say that the 1938 work on the wall was likely a part of the construction of Hedingley itself, including the breezeway which has thereafter been a constituent part of the wall.

I inspected the site on the first day of the trial in October 2025. I saw that just slightly further up the Slope from the Wall is the remains of another wall which is referred to in some of the evidence as Wall 5. Wall 5 is near to the boundary but, as established by the survey evidence, entirely on the Defendant’s land. The remains of Wall 5 are suggestive of a low wall which might have been the base for a taller fence. Where it remains today, Wall 5 is constructed of regular shaped sandstone blocks neatly mortared in place. This is noticeably different to the construction of the Wall, especially at the southernmost point. As to finish, regularity, size and mortared edges, some of the blocks which are today included in the Wall resemble those still located in the remains of Wall 5. However, the blocks in the Wall are no longer mortared together but rather stack separately as part of the Wall. It is unnecessary to make a finding of fact, but it may be that some of the blocks from Wall 5 were cannibalised for the subsequent construction of the Wall.

The Wall is located at the boundary. With more precision, on 6 September 2023 SurveyPlus prepared a survey of the site to be evidence in these proceedings. The evidence is unchallenged. An extract from that survey is set out in Annexure B.

When the present dispute arose, there appears to have been some uncertainty about whether the Wall is entirely on the Plaintiff’s land or partly on the Plaintiff’s land and partly on the Defendant's land. The Plaintiff initially alleged the former in the Statement of Claim filed on 30 October 2020 but then alleged the latter in the Amended Statement of Claim filed on 17 December 2020. There is no longer any dispute. Apart from a sliver immediately to the south of the breezeway, the Wall is located entirely on the Plaintiff’s land.

As described above, the remains of Wall 5 are a short distance further up the Slope from the top of the Wall and run almost the length of the common boundary. There is a small gap in Wall 5 at the northern end which roughly aligns with the Defendant’s right of way over the (then) tennis lawn. The Plaintiff once contended that the Wall and Wall 5 are two parts of a single “tiered” wall. If that is still contended, it is against the probabilities and I do not make that finding of fact. The Wall and Wall 5 are physically separate. At the extreme southern end of the common boundary there is a short perpendicular wall which almost touches each of the Wall and Wall 5 but it does not make them a single integrated structure. Apart from their physical separation and different compositions as described above, the two walls are legally separate in the sense that the Wall is located entirely on the Plaintiff’s land and Wall 5 is located entirely on the Defendant’s land.

Along its length the Wall has a variable height between 1 metre and 2 metres.

The width of the Wall is not known. It generally has a slight lean into the Slope. The SurveyPlus diagram generally shows the top of the Wall to be about 30mm further to the east than the base but it is dependent on where the measurement is made because the Wall is not uniform.

The Wall has a variable construction along its length. At the northern end there is a part which has a concrete face. The Wall may be entirely concrete in this part or it may be stone blocks rendered with concrete. Immediately to the south is a part comprised of large sandstone blocks which have been mortared together. Next there is the breezeway which is masonry. Taken together, these three parts comprise about a third of the Wall’s total length.

The remaining two thirds are the long part south of the breezeway. Here the Wall is comprised of sandstone blocks which are generally irregular in shape. They are of variable size including some large blocks. To the extent that it is visible today, the mortar in this part is limited and sporadic. It is not known whether the blocks were originally mortared together and the mortar has subsequently deteriorated, or whether it was to a large extent originally constructed as a dry-stone wall. In any event, there are many unmortared gaps between adjoining blocks today.

South of the breezeway, the passage between the Wall and the near side of the Hedingley building is narrow. The evidence has focussed on measuring the distance of the Wall from the boundary and not the closeness of the Wall to the apartment block. There is one reference to a distance of 750mm. The distance is not uniform along the length of the Wall. It is possible to walk down the passage single file, but it is tight. At the narrowest place you have to turn side-on to progress further.

At the narrowest place there is a pronounced bulge out from the boundary and towards the apartment block. The bulge is low down towards the base of the Wall but the very bottom row of blocks appears to be unmoved. So too the blocks towards to the top of the Wall. The face of the Wall is not flat but convex, hence the descriptor “bulge”. There is evidence that the outer face of the bulge is 200mm closer to Hedingley than it would be if the face of the Wall was flat. The bulge is localised to one particular place. It does not extend for the full length of the Wall south of the breezeway. There is no bulge where the Wall touches the breezeway and no bulge at the southernmost point. There is no bulge or any other deformity in the shape of the Wall north of the breezeway.

The evidence includes a number of cross-sections of the Slope and the Wall. Each cross-section depicts the surface of the Slope running down to the top of the Wall, which is consistent with what I saw. Immediately to the west of the Wall the Plaintiff’s land is a level path-like strip of concrete which floors the narrow space between the base of the Wall and the side of the Hedingley apartment block. The cross-sections indicate that the “toe” of the Slope has been removed at some point. The geotechnical engineers agree that this is what probably happened. The most likely candidate for when the toe was removed was when the tennis lawn was built. Had it not been removed, the protrusion of the Slope to the west of its current position would have reduced the width of the land available for the tennis lawn. The early removal of the toe would also explain why the Wall appears on the early survey evidence.

Some of the cross-sections include information about the soil and rock beneath the surface of the Slope, but that information needs to be treated with caution because of the limited testing which has been undertaken and the evident variability of the Slope. The Slope has different attributes at different places, such as the gradient, the presence of rock outcrops and vegetation. The Slope is not completely uniform as to the direction of the slope. Something more is said about the condition of the Slope below.

From the historic narrative set out above and the physical attributes of the Wall today, on the balance of probabilities I find that prior to 1928 a wall was built on the Plaintiff’s land to retain the Slope beyond the boundary with the Defendant’s land. The clear inference that the stone wall marked on Mr Cowdroy’s 1928 survey performed a retaining function from the outset arises from the fact that it was built not on the boundary but entirely on the land which the Plaintiff now owns. Whilst the two parcels of land were originally in common ownership, they appear to have been treated as separate parcels within the Elizabeth Bay Estate. Placed as it was at the bottom of the Slope, the tennis lawn was more naturally connected with Glencross and the Esplanade than with the properties at the top of the steep rocky slope on Elizabeth Bay Road. The inference further arises from the fact that the boundary was separately fenced on the Defendant’s side. If all the Wall did was mark the boundary, the co-existence of the fence would not have been necessary. The inference further arises from the cutting of the toe of the Slope which is described above.

Although not necessary to decide, I accept the conclusion of the geotechnical engineers that further work was done on the Wall when Hedingley was built in about 1938. At the very least it was extended to the north so that it reached the boundary of International Lodge. The northward extension is to be inferred from the fact that in 1921 there was a pedestrian route from the Plaintiff’s land ultimately down to The Esplanade and Sydney Harbour. The pedestrian route existed not only on paper but on the ground as evidenced by the small gap between the northern end of Wall 5, the boundary with International Lodge and two or three steps physically carved into the rock outcrop on the northern side of the Slope, which steps have no apparent purpose other than forming part of the pedestrian route. Prior to 1938 the Wall could not have extended at its current height to the northern boundary because then the pedestrian route would have been physically impassible.

The survey evidence from 1928, 1938 and 2023 further demonstrates that the Wall is located in essentially the same place as it was in 1928. The survey plans depict the Wall as being on the Plaintiff’s land for most of the length of the common boundary, separated from the boundary by variable distances measured in inches or centimetres.

The evidence about the height of the Wall in 1928 is unclear but it may have been three feet at least in some places. If so, the height has since been raised, probably in about 1938.

There is no evidence of work on the Wall after 1938.

At the top of the Slope the hard surfaces which comprise the Ashdown apartment block consumes 76% of the Defendant’s land. There is no dispute that the great bulk of the stormwater from the hard surfaces are directed down the rear 24% of the parcel which constitutes the Slope. To some extent, the water is directed by the Defendant’s stormwater system, which is addressed below.

At some unknown time the Defendant (or its predecessor) constructed a level gravel area at the rear edge of the Ashdown apartment block and the top of the Slope. There are in fact two distinct areas which are depicted in the SurveyPlus diagram as “paved” and “gravel”. Although not regular in shape, they together occupy an area of approximately 23m2. There is a hills hoist clothesline in the middle.

The gravel and paved areas appear to be included in the 76% figure referred to above. There is no dispute that there are no pipes or any other system to drain the gravel area.

Higher up than Wall 5 on the Slope are four other low walls. They run broadly parallel to Wall 5 and are placed irregularly. They are depicted in the SurveyPlus diagram. They are generally constructed of sandstone blocks but in a more informal way than Wall 5 itself. As they precede up the Slope they give the impression of a terraced effect, but the vegetation is dense and the view is limited.

There is no dispute that some fill has been placed on the Slope. It is not known when that occurred although the time when the Ashdown apartment block was constructed seems likely. The amount of fill is unknown. The limited subsurface investigations which have been undertaken provide some information about the depth of the fill in the locations where particular tests have been undertaken. At the test locations there is evidence that the fill is poorly compacted.

Beyond the gravel and paved areas, the Slope appears not to be used by the people who live in Ashdown. The Slope is steep, overgrown and generally uninviting. The terracing may have previously given the Slope a functionality which has subsequently fallen into disuse.

Each of the parties is essentially governed by a committee made up of some residents from the respective apartment blocks.

In September 1997 Ms McCormack was a newly arrived owner of an apartment in the Hedingley. She noticed that stormwater from the Defendant’s land was discharging from a pipe onto a garden bed in the north-east corner of the concrete apron at the front.

On 5 June 1998 the Plaintiff wrote to the Defendant about the stormwater discharge and broken pipes. Reference was made to surface water runoff causing “large quantities of new soil to be washed down the slope”. At the meeting of Ashdown’s committee on 6 August 1998 it was resolved to investigate “soil subsidence” and “drainage in the area generally”.

The Defendant subsequently undertook some works on its stormwater system, including at the rear of its apartment block and down the Slope. There has been a debate about precisely when the work occurred but 1999 is most probable. The extent of the work is unclear. Ms McCormack gave evidence about seeing the introduction of PVC piping which zig-zagged down the Slope. I accept Ms McCormack’s evidence. The clear inference is that there was a pre-existing drainage system which was originally made of earthenware pipes and subsequently replaced with a new system made of PVC pipes. It seems clear that the Defendant undertook the work in response to the concerns communicated by the Plaintiff in 1998.

There is evidence of further work done on the Defendant’s drainage system at a later date or dates. The whole system may have been replaced for a second time or there may have been piecemeal repairs over time. The evidence does not permit a more specific finding than that.

Since the new PVC system was put in, stormwater from the Defendant’s land has discharged from a 100mm pipe into an inlet at the north-east corner of the Plaintiff’s land. From there it is presumed the stormwater is piped under the northern end of the Plaintiff’s land to join other pipes at the north-west corner which run to the Esplanade.

Over the years which followed 1999 the respective committees of the Plaintiff and the Defendant gave consideration to the drainage of the Slope which persisted as an issue between them. The committees communicated with each other. The communications focussed on water and flooding. Solutions were generally considered in the nature of plumbing.

The first time the condition of the Wall arose for consideration was on 8 August 2005, when the Plaintiff’s managing agent wrote to the Defendant and stated that “it would appear that the wall is slowly collapsing under the weight of the soil it contains”. The letter stated (wrongly) that the Wall was located on the Defendant’s land but had encroached onto the Plaintiff’s land. The letter presumed that the Wall was the Defendant’s responsibility and requested that the Defendant obtain advice from a structural engineer.

The Defendant referred the matter to its insurer.

The first expert to consider the Wall was RJ Baxendale, a consulting engineer retained by the Defendant’s insurer. He made a visual inspection of the site. On 19 September 2005 he sent a letter to the Defendant’s insurer in which he stated that the Wall “is bulging severely and in structural terms has in my opinion failed.” RJ Baxendale stated that it was likely that the bulging had occurred over time, possibly 20 to 30 years. RJ Baxendale said there were two areas of “small local collapses” and the dislodgment of a small number of sandstone blocks. Stability could not be ensured. Remedial work was required to restore serviceability.

As at February 2006 the Plaintiff had still not received a substantive response to its communication with the Defendant on 8 August 2005. The Plaintiff engaged its own expert, Rod Broune, who appears also to have been a structural engineer. He carried out a visual inspection of the site. On 28 February 2006 he sent a Report to the Plaintiff’s managing agent in which he said that the Wall was in good condition north of the breezeway but in poor condition to the south. It was bulging by about 200mm. Some of the stone blocks at the top had fallen backwards off the Wall. Mr Broune said some parts of the Wall had “effectively failed” and further movement could initiate collapse. Those parts needed to be rebuilt.

Mr Broune also said that the breezeway appeared also to be performing a retaining function which it was not designed to perform. He recommended that soil be removed to relieve the pressure.

On 4 April 2006 William Dive, a consulting surveyor retained by the Defendant, prepared a sketch which depicted the Wall entirely on the Plaintiff’s land. On 15 August 2006 the Defendant wrote to the Plaintiff’s managing agent, referred to the sketch and said that it appeared that maintenance of the Wall was the Plaintiff’s responsibility.

On 25 May 2007 the Plaintiff’s managing agent wrote to the Defendant and said that legal advice sought by the Plaintiff indicated that it would be reasonable for both parties to share the costs to rectify the Wall. A request for equal contribution was made.

In the middle of 2007 representatives from the respective committees all met to discuss the problem.

The next expert to consider the Wall was Stephen Parks, an engineer from Demlakian Consulting Engineers. Mr Parks undertook a visual inspection of the site. In July 2007 Mr Parks issued a short Report. He said that both the Wall north of the breezeway and the breezeway itself were in reasonable condition “for the age” without evidence of significant stress. The section south of the breezeway was bulging and had “structurally failed…due to excessive movement.” Mr Parks said that the movement did not appear “recent” given the weathered appearance of the face of the Wall. He said that the Wall may have been in an unstable condition for some years. Mr Parks raised the possibility that stormwater from Ashdown may be contributing to blocks falling out of the Wall, specifically by way of flowing out of residual clay pipes which still remained following the installation of the PVC pipes. He recommended expert drainage advice be obtained.

Mr Parks stated:

He recommended that the bulge in the Wall be dismantled and by that means further investigation carried out. He also recommended ongoing monitoring.

A letter from the Defendant to the Plaintiff at this time recorded the observation that the Wall was not in imminent danger of collapse. It may be that the Plaintiff agreed. In any event there is no evidence of further action until 2013.

For apparently unrelated reasons relating to enclosed balconies, in January 2013 another engineer from Demlakian, Amanda Santamaria, went to the Plaintiff’s land and saw the Wall. Ms Santamaria suggested to the Plaintiff’s managing agent that it be investigated. Her advice was accepted. She carried out visual inspections in May and June 2013. On the basis of those inspections she prepared a scope of works to remedy the Wall. She stated that the Wall “is in an unstable condition, significant movement has occurred and partial collapse may be imminent”. She recommended that the Wall be demolished and reconstructed south of the breezeway. Her scope of works assumed that course. The new wall was to be constructed with concrete core-filled blocks. A request for tenders went out and tenders were received which ranged in price from $150,000 to $270,000.

In September 2013 the Plaintiff sought Ms Santamaria’s advice about whether the work could be delayed a year or two. Ms Santamaria sent an email in which she said that it was noticeable that the Wall had “moved significantly” in the last couple of months and that a collapse could occur at any time. She recommended prompt action.

Some work was undertaken to obtain development approval for the demolition and reconstruction of the Wall. In about June 2014 Demlakian prepared a Statement of Environmental Effects which referred to the “instability and imminent failure” of the Wall.

In October 2014 Demlakian sought a report from a geotechnical engineer for the purposes of the remediation work. JK Geotechnics’ geotechnical engineer was the first person to investigate the soil and rock below the surface of the Slope. The JK Geotechnics investigation was only a “limited scope geotechnical investigation”. Due to the confined site, the geotechnical engineer used hand-operated equipment to drill three boreholes on the Slope to depths between 200mm and 600mm. He also carried out four dynamic cone penetration tests at places on the Slope. No laboratory testing was performed. On 28 November 2014 JK Geotechnics issued a Report to the Plaintiff. The testing indicated that the bedrock was likely to be between 1.7m and 2.8m below the surface at the test sites. The bed rock was said to be topped first with medium dense/stiff soil and then with loose/poorly compacted man-made fill. There were no indications of groundwater.

The JK Geotechnics Report further stated that the Wall appeared to be only a facing wall and was reliant on the available soil strength for stability. The bulge indicated that the Wall was of insufficient mass to support the retained fill. Walls of that type often fail through increased groundwater pressure triggered by water ingress during extended rain periods. JK Geotechnics recommended that the Wall be reconstructed to normally-acceptable levels, which would reduce high levels of ongoing maintenance. JK Geotechnics recommended replacement by a contiguous pile wall.

JK Geotechnics said that the Report was preliminary and recommended further investigations including some deeper bore holes.

In late 2014 a development application was evidently submitted to the local council, in the context of which discussions occurred between the parties about the consent of the Defendant. The topics discussed included access to the Defendant’s land for the purposes of building a new wall and the precise location of the new wall, especially the footings. Another topic which was discussed was cost.

In January 2015 the Defendant obtained its own advice from an engineer, Vadim Topolinsky. Mr Topolinsky carried out a visual inspection but did not carry out any structural design analysis or any load testing. He reviewed the Report from JK Geotechnics and spoke to Ms Santamaria who told him that the Wall “has moved laterally in the range of 200mm” in the last twelve months. He appears also to have been told that the Wall “was deemed unsafe and at a risk of imminent structural failure”. Mr Topolinsky issued a Report dated 30 January 2015 which is in the form of a critique of the JK Geotechnics Report. He generally agreed with remediation being achieved by the construction of a contiguous pile wall but raised some practical difficulties which may be read as him simultaneously not agreeing with remediation by the construction of a contiguous pile wall. He also emphasised the impact on the Defendant’s land which he described as damaging and permanent. Mr Topolinsky stated:

Further communications took place between the parties, Demlakian and Mr Topolinsky about remediation options. A site meeting took place and letters were written. On 1 April 2015 Demlakian sent a letter to the Defendant in which it stated that the Wall “has undergone significant rotational and sliding movement over the past few years following our initial inspection of the property.” Demlakian recommended remedial work which included wall footings which would encroach onto the Defendant’s land. There was an alternative method with narrower footings entirely on the Plaintiff’s land, but it would require rock anchors and would be more expensive. The Plaintiff began to strike special levies.

In August 2015 the Defendant raised the option of selling a strip of land near the boundary with the Plaintiff so that the Plaintiff would have sufficient room to construct a new wall within its own land. The proposal was for a sale at an agreed valuation.

On 5 June 2016 the Defendant sent an email to the Plaintiff in which it stated that it would not consent to any encroachment on its land, including the footings, and that it would not contribute to remediation costs. It again raised the suggestion of selling a strip of its land to the Plaintiff (“perhaps one metre or so”). Both parties referred in the abstract to the need for a formal agreement.

The first indication that lawyers had become involved is a reference in an email dated 12 January 2017. On 4 April 2017 solicitors acting for the Plaintiff wrote to the Defendant. The solicitors asserted that the Defendant has an obligation to pay half the cost of remediation. The Defendant then obtained advice from a lawyer. On 21 September 2017 the Defendant replied to the Plaintiff’s solicitors and stated that the Wall is entirely on the Plaintiff’s land and that the Defendant has no obligation to contribute to the cost of remediation. A desire nonetheless to co-operate was expressed, but the Defendant required the Plaintiff to submit a concrete plan for consideration.

The Plaintiff’s solicitors retained a new expert, Shirley Consulting Engineers. On 8 August 2018 Shirley Consulting issued a field Precis. The Defendant objected to the Precis being adduced into evidence. I overruled the objection. My reasons for doing so are set out at the end of this judgment.

The Precis was not an engineering report but a summary of the matters discussed at a site meeting with representatives of the Plaintiff. The Precis made clear that Shirley Consulting had only conducted a preliminary and limited investigation of the site. On that basis the Precis stated that there were many voids in the Wall from which there was significant seepage, apparently from the Slope. Shirley Consulting also stated that several moist and damp areas were noted on the Slope and that the surface drainage arrangements were minimal. Some criticisms of the observed drainage system were also made, including the absence of flexible joints, breakages and evidence of previous repairs.

For the first time, Shirley Consulting addressed the level gravel area at the rear of the Ashdown apartment block which it described as “a form of ‘site absorption area’ that allows water infiltration into the potentially unstable slope during rainfall”. Shirley Consulting observed that there is no stormwater control for the gravel area. Shirley Consulting also stated that there were signs of instability of the Slope itself.

As for the Wall, the Precis includes a photograph of someone measuring the distance from the outer face of the bulge to the wall of the Hedingley apartment block: 400mm. I am not able to see any other evidence of the measurement of that distance being made over the past 25 years. Shirley Consulting stated:

Shirley Consulting stated that factors contributing to the bulging of the Wall include the fill replacement and terracing of the Slope, very poor surface drainage at the rear of the Defendant’s land and the Defendant’s inappropriate stormwater drainage pipework.

Shirley Consulting stated that the Wall needed to be replaced in the next twelve months but also stated that works first needed to be undertaken on the Defendant’s stormwater and surface water drainage systems. Shirley Consulting recommended that discussions with the Defendant be instigated urgently about the drainage works.

Shirley Consulting, however, strongly disagreed with Demlakian’s proposal of remediation by the construction of a new reinforced concrete wall because of the conditions of the Slope, the Defendant’s poor drainage and limited site access. It instead recommended a segmented gabion-style wall. This was the third different method of remediation which had been recommended to the Plaintiff.

Shirley Consulting also raised an issue about whether the discharge of the Defendant’s stormwater into the drainage system at the north-east corner of the Plaintiff’s land was the subject of an easement.

On 21 December 2018 the Plaintiff’s solicitors sent a letter to the Defendant with which they enclosed a copy of the Shirley Consulting Precis. The solicitors stated that the Defendant should remediate its drainage systems before work commenced on the Wall. The Plaintiff’s position was again stated that the Defendant ought to contribute equally to the cost of remediating the Wall. There is no evidence of a response.

On 11 April 2019 the Plaintiff’s solicitors again sent a letter to the Defendant and requested that the Defendant contribute $21,000 to meet half the quoted cost of Shirley Consulting preparing a report. Absent agreement, the Plaintiff’s solicitors threated to commence proceedings, apparently for the appointment of a single expert. There is no evidence of any response.

On 11 December 2019 the Plaintiff’s solicitors again wrote to the Defendant and enclosed a further copy of the Shirley Consulting Precis. After referring to the lack of response from the Defendant, the solicitors said that the Plaintiff wished to avoid the expense of litigation but considered that there could be no further delay in remediating the Wall. A draft statement of claim was enclosed which contemplated a suit based on nuisance. The Plaintiff would seek a mandatory injunction by which the Defendant would be required to prevent the failure of the Wall, including by undertaking drainage and landscaping work on the Slope. The Plaintiff would also seek damages together with orders to give the Plaintiff sufficient proprietary rights over the Defendant’s land to permit work to sustain the Wall, whether by easement or boundary adjustment.

On 14 December 2019 the Defendant received a further Report from Mr Topolinsky. Mr Topolinsky had been provided with a copy of the JK Geotechnics Report, the Demlakian Report dated 4 June 2013 and the Shirley Consultant Precis. He had carried out a visual inspection of the site on 10 December 2019. Mr Topolinsky recorded his understanding, based on what he had been told by Demlakian, that the Wall had moved 200mm in about twelve months.

Mr Topolinsky repeated his advice from January 2015 that the Wall was “deemed unsafe and urgent measures must be taken to ensure its temporary backpropping”. Mr Topolinsky expressed a range of views about whether the stormwater pipework and flat gravel area on the Defendant’s land have contributed to the Wall’s failure. The views are generally negative and argumentative, although he says that some contribution by those factors cannot be fully discounted.

Mr Topolinsky did not agree with the remediation method put forward by Demlakian (a new reinforced concrete retaining wall) because he thought that it is not reasonably buildable. He did not think JK Geotechnics’ solution (contiguous piles) would be successful because of the limited site access for machinery. He appears both to have agreed and not to have agreed with the proposal of Shirley Consulting (gabion wall). He confirmed his view that any remedial work would cause “significant damage” to the Defendant’s land.

On 6 February 2020 the Defendant sent a letter to the Plaintiff’s solicitors and proposed an informal meeting with experts to discuss the issues, including practical solutions. Nonetheless the Defendant stated that it rejected the contention that its drainage infrastructure contributed to the deterioration of the Wall.

The evidence does not reveal how the dispute progressed throughout the rest of 2020. On 18 December 2020 the Plaintiff filed the Statement of Claim.

In late 2021 JK Geotechnics was instructed to carry out a further inspection of the site for the purpose of obtaining further geotechnical information on the conditions of the Slope below the surface. Using hand-operated equipment, JK Geotechnics sunk two more bore holes and completed four more dynamic cone penetration tests. The bore holes reached depths of 8.1m and 6.2m.

On 14 December 2021 a further Report was issued by JK Geotechnics. The subsurface information obtained from the further investigation did not result in material changes to the views expressed in JK Geotechnics’ First Report. The Second Report provided further details about possible remediation options but recommended that further advice be obtained from specialist contractors. JK Geotechnics said that issues may arise during the remediation work which would have to be addressed as they arose. No groundwater seepage was encountered.

Finally, on 1 November 2022 Mr Topolinsky inspected the site again. He produced a further short Report dated 8 November 2022 in which he provided a photograph and a more precise description of the bulge:

When I inspected the site on the first day of the hearing the bulge appeared much as shown in Mr Topinsky’s photograph from November 2022. Two relatively small sandstone blocks were on the concrete path next to the bulge which are not shown in Mr Topinsky’s photograph. I infer that the two blocks came to their present location subsequent to November 2022. There is no evidence about where they came from or how they came to lie next to the bulge. I could not see that they had fallen out of the Wall. They may have fallen from the top.

The Plaintiff’s case is finally pleaded in the Third Further Amended Statement of Claim which was filed on 2 June 2025. Apart from an extraneous allegation about puddles, mud and dampness, the case is directed to damage to the Wall and the risk of it collapsing. The only cause of action is nuisance.

The Plaintiff alleges that in three ways the Defendant’s use of its land has damaged the Wall or threatens to do so. The three complaints may be summarised as follows:

There is overlap between the three complaints. Apart from the increased pressure on the Wall said to have been caused directly by terracing and the introduction of fill, the Plaintiff’s case is based on saturation of the soil on the Slope and, ultimately, drainage.

The consequence of the Wall collapsing is pleaded to be damage to the Plaintiff’s land or to a person. There is no dispute that earth from the Slope would slide onto the Plaintiff’s land if the Wall were to collapse. There is a dispute about the extent of the slide. In any case, the slide would likely be significant given the close proximity of the Slope to the Hedingley apartment block.

A convenient way to determine the Plaintiff’s claim is to resolve the following issues:

The applicable legal principles should first be identified.

The common law of private nuisance addresses the tension between what a landholder may do with his or her land and what a neighbour must put up with. [1]

The principles governing the common law of nuisance are set out in the majority judgments of the High Court in Hunt Leather Pty Ltd v Transport for NSW. They may be summarised as follows: [2]

The Court has previously been called upon to consider cases where uphill land of the defendant has impacted the plaintiff’s use of lower land in one way or another. One such case was Frost v Northern Beaches Council. [3] In that case the parcel of land upon which a cliff-top house was built included the cliff, although it was beyond the back fence and difficult to access. At the top of the cliff was a massive bolder which overhung a house which had come to be built at the bottom of the cliff. Although it had not moved for hundreds, possibly thousands, of years, the bolder was discovered to be completely detached from the cliff and at risk of falling. The risk may or may not have been great but were the bolder to fall the consequences for the house below and anyone in it at the time would be catastrophic. Upon that discovery the house at the bottom of the cliff ceased to be reasonably habitable (which in truth it had been all along). The owners of the house at the top of the cliff were unaware of the bolder and had done nothing to contribute to the risk. Remediation of the risk would be expensive.

Brereton JA found that the presence of the bolder on the defendant’s land interfered with the plaintiff’s use of the house at the bottom of the cliff. The interference was not merely prospective. The bolder posed a clear and present danger so as to make the house uninhabitable, which Brereton JA considered to be immediate damage. [4]

An interference with the defendant's right to use his land having been found, Brereton JA held that there was a nuisance even though the detached bolder was entirely the work of nature. [5]

After surveying the authorities, Brereton JA held that a landowner in occupation when aware of a hazardous condition arising naturally on the land which endangers neighbouring land has a measured duty of care to take such steps as are reasonable in all the circumstances to prevent or minimise the known risk of injury or damage to the neighbour, and no more. The knowledge of the hazardous conditions may be actual or constructive. [6] When considering what steps are reasonable, regard is to be had to all the circumstances of the case, including the individual circumstances of the defendant. Regard is also to be had to the magnitude of the risk to the neighbour and the ease and expense of abatement of the risk. [7]

Brereton JA found that there had been no failure on the part of the owners of the clifftop house to take reasonable steps in circumstances where the owner of the house below had refused to contribute to the cost of remediation work.

The Court has power to grant an injunction to restrain conduct which would infringe the plaintiff’s rights if it is continued. The Court has a discretion whether to grant such an injunction. The more recent cases show a high degree of flexibility in the approach taken by the Court to the exercise of the discretion so as to achieve justice between the parties having regard to all the relevant circumstances. [8] Relevant circumstances include the probability of the infringement occurring and the gravity of the damage it will cause in the particular case. The Court’s discretion is not fettered by the requirement of a universally applicable degree of probability or gravity. [9] Another relevant consideration is the cost of the remedial work which is necessary to address the nuisance. [10]

Whether there has already been an interference with the Plaintiff’s use of the land requires the Plaintiff to prove that the bulge has been caused by the Defendant’s use of its land.

Each of the parties adduced expert evidence from a geotechnical engineer, Mr Chan by the Plaintiff and Mr Mostyn by the Defendant. The two engineers have between them almost a century of experience working with slopes and retaining walls. Mr Chan describes his experience as including all facets of geotechnical engineering with specialisations which include soft soil engineering, retaining walls, ground movement and hydrogeological studies and interpretation. Mr Mostyn’s experience has had a particular emphasis on landslides and retaining structures.

Mr Chan and Mr Mostyn explained some technical terms. The “factor of safety” against “slope instability” is the ratio between driving forces and resisting forces. If the two forces are equal, the factor of safety is 1, which means that the slope is stable, but only just. A long-term factor of safety of 1.5 is typically adopted for the design of slopes and retaining walls. The term “slope failure” describes the loss of stability in the slope due to the imbalance between driving and resisting forces. Where the slope failure is characterised by the movement of debris down the slope it is called a “landslide”. The term “landslide” is typically used when movement is significant enough to pose a hazard to individuals, property or the environment. “Movement” of a slope is closely associated with slope instability and slope failure.

There is no dispute that there has been no landslide. Nor does there appear to be any dispute that the Slope has not moved, although that may depend upon what Mr Chan means by the phrase “minor creep”. Apart from observing a landslide, there are a number of methods of determining whether a slope has moved, such as a laser survey, by which movement of a slope can be detected, measured and monitored. A laser survey requires a comparison between measurements taken at two different dates. There is no such evidence in these proceedings.

Neither party has sought to demonstrate by reference to the various surveys which have been carried out over the past 100 years that the Slope has moved or has not moved.

There is nothing in the ten contemporaneous engineering reports which have been obtained by the parties since 2005 which refers to movement or failure of the Slope. The only statement about the stability of the Slope is in the Shirley Consulting Precis dated 8 August 2018 where it was said that there were “many signs” of instability of the Slope. Three signs were specified: the lean of the eucalyptus tree located on the Slope, the lean of some banana palms and the “significant” bulge in the Wall. I will return to these matters shortly.

There is no dispute that the factor of safety against instability of the Slope is greater than 1. The resisting forces are stronger than the driving forces. By that measure, the Slope is not unstable. The Plaintiff nonetheless contends that the Slope is unstable. Mr Chan and Mr Mostyn address the question of stability in their respective Expert Reports. In Mr Chan’s Report dated 24 November 2023 he explains that the factor of safety for any given slope depends on the subsurface conditions including the degree of saturation of the soil and apparent cohesion of the soil units. Mr Chan was provided with the JK Geotechnics Reports dated 28 November 2014 and 14 December 2021 and the Shirley Consulting Precis dated 8 August 2018. He has proceeded on the basis that the Reports provide a reasonable representation of the subsurface conditions of the Slope. He has not undertaken his own investigations although he has inspected the Slope and the Wall from the Plaintiff’s property.

Drawing on the subsurface information from the JK Geotechnics Reports and the Shirley Consulting Precis, Mr Chan has built a model of the Slope for the purposes of undertaking a slope stability analysis. He has assumed a figure for the degree of saturation for the soil beneath the Slope. He has also adopted a figure for the existing factor of safety. Using those two variables, he has used the model to “back-analyse” the subsurface conditions, including the apparent cohesion of the soil units. He has then used the back-analysis of the apparent cohesion of the soil units to work out the relationship between the degree of saturation and the factor of safety for the Slope.

By that analysis and his visual observations, Mr Chan has answered some specific questions posed by the Plaintiff’s solicitors. The questions focus on the Wall, not the Slope. Mr Chan has nonetheless expressed some opinions about the Slope, namely:

To the extent that Mr Chan’s opinions are based on his slope stability analysis, I am not persuaded by Mr Chan’s evidence. The analysis is infused with unproved assumptions. His analysis has three key variables, namely the degree of saturation of the soil, the apparent cohesion of the soil units and the factor of safety itself. Ordinarily, observed data is available for the first two variables which can then be put into a model to calculate the factor of safety. In this case, Mr Chan has very little data.

For the degree of saturation Mr Chan has assumed that the soil behind the Wall is in a moist condition but has not experienced full saturation. He also describes the assumption as “partially saturated” which presumably means the same thing. To the extent that it is exposed in Mr Chan’s Expert Report, the basis for the “partially saturated” assumption is the fact that no groundwater was encountered by JK Geotechnics when it carried out its investigations in 2014 and 2021. There is no dispute that the dynamic cone penetration tests were incapable of measuring moisture in the soil other than by noticing whether the cone was wet or dry when it was pulled out, about which there is no evidence. Some of the bore tests involved introducing water in the boring process which means they also were incapable of detecting or measuring any moisture which was already in the soil. Against that unilluminating background, Mr Chan has not explained how the absence of detected groundwater in JK Geotechnics’ investigations warrants an assumption that the soil beneath the Slope is partially saturated.

Mr Mostyn considers that the available information does not permit anything more than speculation about the degree of saturation. I agree. Mr Chan’s “partially saturated” assumption is unproved.

Nor is there any data about the apparent cohesion of the soil units. Mr Chan has therefore calculated that variable by the back-analysis. To do so, he has had to adopt a figure for the third variable, the factor of safety. The figure he has adopted is “between 1.15 and 1.2”. As exposed by his Report, the figure is based largely on Mr Chan’s observation of the current condition of the Wall. However, Mr Chan does not know the “details of the design” of the Wall. He is unable to say whether the Wall is a facing wall, which only provides localised retention for the soil behind, or a retaining wall, which provides an equivalent gravity structure at the toe of the Slope. If the Wall is a retaining wall its effectiveness depends on the integrity of the structure, the conditions of the soil behind, the groundwater conditions and the slope batter behind the Wall. It is possible to investigate these matters but that has not been done. Mr Chan has evidently sought to address all uncertainties about the condition of the Wall by making an assumption about its thickness. He has alternatively assumed that the Wall is 0.5m thick (if it is a facing wall) or 1m thick (if it is a retaining wall).

Mr Chan has also assumed that the “properties” of the Wall are the same as those for Hawkesbury sandstone. The assumptions are made uniformly for the full length of the Wall, even though there are parts of the Wall which do not suffer from the bulging or deformation which apparently caused Mr Chan to conclude that a factor of safety between 1.15 and 1.2 ought to be adopted for his back-analysis. No apparent consideration has been given to the possibility that, at the particular place where the bulge is pronounced, the Wall suffers from a defect in design, a defect in the original construction about a century ago or a defect in any reconstruction which occurred when the Plaintiff’s land was changed from a tennis lawn to an apartment block.

Based on his “partially saturated” assumption and the figure which he adopted for the factor of safety, Mr Chan has back-analysed the apparent cohesion of the soil units. Mr Chan has cross-checked his assessment against figures published in academic research about soil types.

Limited by the information available to him, Mr Chan’s modelling does not provide a basis for the Court to make a finding about the past movement (including creep) or present stability of the Slope. A succinct description of the problem with Mr Chan’s approach is stated in Mr Mostyn’s Report as follows:

Mr Mostyn makes another compelling point about Mr Chan’s slope stability analysis. The Slope is what Mr Mostyn calls a “heterogenous slope” which means that it occupies a relatively small area and nowhere has uniform characteristics. The gradient of the Slope varies from place to place, some places are much steeper than others. The direction of Slope is notably different at the south (south-eastward) compared to the rest of the Slope (due eastward). Unlike other parts, the northern part of the Slope has large and prominent rock outcrops. In places there is no soil at all, let alone soil to the depth used by Mr Chan in his analysis.

Further, the resisting forces on the Slope include the Wall. As described above the Wall is not uniform along its length. It may be supposed (and it is not proved otherwise) that the resisting forces applied by the Wall are not uniform. At one place the Wall is made of concrete, at another place of large stone blocks and mortar and elsewhere it resembles a dry-stone wall. At another place the resistance is not applied by the Wall but by the masonry side of the breezeway. The height of the Wall varies. Peering through gaps in the blocks, at some places Mr Mostyn saw earth and at other places another layer of blocks. There is a bulge in one place, but no bulge further south nor to the north of the breezeway.

Mr Chan has in effect addressed the Slope as a homogenous whole. Given the variability within the Slope, Mr Mostyn says that it cannot be modelled. There is too much variation in such a small space. Without having to decide the limit of Mr Mostyn’s proposition about heterogenous slopes, I agree that the conclusions derived from Mr Chan’s slope stability analysis lack reliability for the determination of the issues in the case.

Having said that, Mr Chan’s opinion that the Slope is showing signs of instability is not actually based on his slope stability analysis. Indeed, to some extent the signs of instability are an assumption upon which Mr Chan’s slope stability analysis is based. When asked to identify the signs of instability, Mr Chan specified six observations which he has made at the site.

The first observation is the steepness of the Slope. Mr Chan has calculated 30 degrees for one cross-section of the Slope. There are other places where it is steeper (especially near the rock outcrops, although they may be counteracting stabilising elements) and places where it is less steep. At the southern end the Slope appears to have very little gradient immediately adjacent to the Wall. In any event, there is no suggestion that steepness alone demonstrates slope instability.

Mr Chan’s second observation is large blocks hard up against the trunk of the big eucalyptus tree which is growing on the Slope. Mr Mostyn says that that is more likely evidence that the large blocks have moved not the Slope itself.

The third observation is that there is a significant lean of the eucalyptus tree. Shirley Consulting also refers to this in the Precis. The eucalyptus tree is a large established tree. It looks like it has had a hard life. There is a significant lean. However, its exposed roots are at least partly atop a large rock outcrop. To my observation it looked like it was not leaning up the Slope so much as across the Slope. In any event, the tree is on the northern part of the Slope above the northern part of the Wall. If the Slope has moved at that location, it has done so without any apparent impact on the Wall north of the breezeway. The eucalyptus tree is far removed from the part of the Slope behind the bulge in the Wall.

Mr Chan’s fourth observation was also referred to by Shirley Consulting, namely, a lean on some banana palms on the Slope. There is a clump of three or four banana palms. One palm is leaning but the others are not. The clump is located near the southernmost end of the Slope well away from the bulge. The palm which is leaning is doing so in a direction different to that of the eucalyptus tree at the other end of the Slope.

Mr Chan also points out that there is a large crack and a pronounced tilt on a low retaining wall which lies along the southern boundary of the Defendant’s land near the corner with the Plaintiff’s land. Something needs to be said about this low retaining wall. Some of the documents refer to it as the “return” of the Wall. It may be the return of Wall 5 but it is clearly separate to the Wall, both in location, height and composition. In any event, the return wall is perpendicular to the Wall. It seems likely that it has been significantly affected by movement of the Slope, but that movement appears to be in a southward direction not in an eastward direction towards where the Plaintiff’s Wall is located. The observed tilt of the return wall is not towards the Plaintiff’s apartment block but southwards. The significant and visible tilt and crack in the return wall is in stark contrast to the condition of the Wall even at the place where the bulge is located. The Wall has not experienced damage similar to that experienced by the return wall. The clump of banana palms is down near the corner where Wall 5 meets the return wall.

The final observation made by Mr Chan which has led him to conclude that the Slope is showing signs of instability is the bulge in the Wall. To some extent Mr Chan’s reliance on the bulge for that conclusion begs the question in these proceedings.

There is no dispute that there is a bulge at one place in the Wall. To understand the implications of the bulge it is necessary to identify with more precision the evidence about it.

As stated above, neither party has sought to demonstrate by reference to the survey evidence that the Wall has moved or not moved. The survey evidence from 1928, 1938 and 2023 indicates that the Wall is in essentially the same place as it was in 1928. There is no empirical data which measures the pressure on the Wall, either behind the bulge or at any other place. It is possible to investigate the condition of the Wall and the soil behind the bulge but neither party has done so.

Since 2005 a number of observations have been made about the bulge. In September 2005 RJ Baxendale saw the bulge. He did not measure it. He thought that it was likely to have occurred over an extensive time, “possibl[y] 20 to 30 years”. Mr Broune saw the bulge in February 2006 and said that it was “about 200mm”. It is unclear precisely what that figure referred to but it was most likely the lateral distance of the outer face of the bulge from where the face of the Wall would have been had there been no bulge. In July 2007 Mr Parks from Demlakian saw a significant bulge which he thought did “not appear recent”. Mr Parks gave a rational reason for that observation: the uniform weathered appearance of the face of the Wall. He said that the Wall had failed south of the breezeway due to “excessive movement”. From the context of that statement, Mr Parks was referring to movement of the Wall, not movement of the Slope. In about June 2013 Ms Santamaria from Demlakian said that there had been “significant movement” of the Wall. In September 2013 Ms Santamaria wrote an email in which she said that “it was noticeable that the Wall had moved significantly” in approximately two months. In November 2014 JK Geotechnics said that the relevant part of the Wall “has moved out towards the building and has a bulged appearance indicating the wall is of insufficient mass to support the retained fill and soils”. In January 2015 Mr Topolinsky said that Ms Santamaria had told him that “since the initial Site inspection about 12 months ago the Wall has moved laterally in the range of 200mm”. The Shirley Consulting Precis dated 8 August 2018 contained the statement that the bulge in the Wall was “significant”. Shirley Consulting measured the distance from the bulge to the wall of the Hedingley apartment block to be 400mm. The Report of JK Geotechnics dated 14 December 2021 stated that the apartment block at its closest is about 600mm from the Wall. In his Third Report dated 8 November 2022 Mr Topolinsky made the more detailed observation about the nature of the bulge which is set out above.

From these contemporaneous records it is to be inferred that the bulge existed as at 1999. Given the observations of Mr Baxendale and Mr Parks in particular, it is probable that the bulge had by then already existed for decades. Despite that, the earliest communications in evidence between the Plaintiff and the Defendant were directed only to water coming from the Slope onto the Plaintiff’s land. The bulge in the Wall was not raised until 2005. It is not known whether that was because the bulge was not noticed before 2005 or whether it was noticed but not thought worthy of remark.

The only evidence of movement of the bulge since 2005 is the statements made by or attributed to Ms Santamaria in 2013 and 2014. The fact that she is the only person to report more recent movement may be explained by the fact that she saw the bulge more than once and was thus in a position to make a comparison. On the other hand, JK Geotechnics saw the bulge twice and Mr Topolinsky saw it three times. Neither remarked any recent movement (other than by quoting Ms Santamaria).

There is reason to doubt that Ms Santamaria made any measurements of the bulge. She does not refer to a measurement in her statements nor any of her other written communications. As recorded by Mr Topolinsky, Ms Santamaria said that the recent movement was “in the range of” the round figure of 200mm, which is consistent with an unmeasured estimate. Movement of 200mm appears to be very large having regard to the way the bulge now appears. The distance from the face of the Wall to the side of the Hedingley apartment block is generally narrow, measured to be 750mm at one place. Mr Broune’s 200mm figure for the protrusion of the bulge in 2006 also appears to be an estimate but, if it was an accurate estimate and the bulge subsequently moved a further 200mm, the path between the Wall and Hedingley would now be very narrow. More recently the outer face of the bulge has been measured still to be 400mm (Shirley Consulting) or 600mm (JK Geotechnics) from Hedingley. It may be that Mr Broune’s original estimate was excessive or that Ms Santamaria’s estimate of movement was excessive, or both. In either case, they are only estimates. The evidence of movement in the bulge in 2013 or 2014 is meagre.

Having regard to the fact that Ms Santamaria’s figures appear to be unmeasured estimates, the fact that the collapse which Ms Santamaria said may be imminent in 2013 has not yet happened, the fact that neither JK Geotechnics nor Mr Topolinsky commented on recent movement of the bulge from their own observations, the fact of the apparent size of the bulge today compared to the Mr Broune’s 2006 estimate and the measured distance which more recently has continued to exist between the outer surface of the bulge and the Hedingley apartment block, it is more probable than not that the bulge has remained largely unchanged since 2005. It follows that there has been no significant change in the bulge for many decades.

In any event, the issue is not so much whether there has been recent movement of the bulge as whether the existence of the bulge demonstrates that the Slope is unstable and has caused damage to the Wall. In this regard the fact that the bulge exists does not necessarily mean that there has been movement of the Slope towards the Hedingley apartment block which has increased the lateral pressure behind the Wall. An alternative is simply that the design or construction (or reconstruction) of the Wall was such that the Wall was never capable of resisting the soil which always lay immediately behind. It may also be that the blocks which comprise the lower part of the Wall have never been capable of bearing the weight of the blocks placed on top of them at the particular place where the bulge exists, whether due to shape, size or placement of the blocks. Given that the Wall south of the breezeway is irregular in its composition and construction, those alternatives may explain why bulging has occurred at one place and not others, and at one particular height and not all the way to the top of the Wall. If so, the bulge would have occurred even though there has been no movement of the Slope.

Although Mr Chan accepts that the Wall has not yet failed, he has expressed the opinion that the Wall has suffered bulging and deformation as a result of movement of fill and soil behind it. Mr Chan’s opinion does not follow from his slope stability analysis because he adopted a factor of safety between 1.15 and 1.2. As for his six observations, given Mr Chan’s limited information about the Wall, including its thickness, there is insufficient exposure of Mr Chan’s reasons to demonstrate a rational basis for his opinion that the bulge has resulted from the movement of the Slope behind it.

Mr Mostyn does not agree that the various observations made by Mr Chan are signs that the Slope is unstable. The Plaintiff submits that Mr Mostyn was dogmatic when he gave his evidence but to my observation Mr Mostyn’s evidence is more accurately described as being given in a forthright manner which did not detract from its clarity and simplicity. Mr Mostyn does not agree that the existence of the bulge is a sign that the Slope is unstable. He makes the disarmingly straightforward point that the Wall was built about 90 years ago and is still in pretty good shape. At some point the Slope has been terraced, fill-added, and flat gravel areas have been built. There have been very heavy rain events, including after 1999 when the (allegedly) defective work was undertaken on the Defendant’s stormwater system. Despite that, the only sign of stress exhibited by the Wall is the bulge, and that is limited to one particular place. Mr Mostyn considers that the long-term performance of the Slope is the best evidence of its stability. Given the observed state of the Wall today and the absence of any other real signs of instability, Mr Mostyn has concluded that the strength available to resist failure of the Slope has always been greater than the forces acting to cause failure. The factor of safety has always been greater than 1. The Slope is not unstable.

Mr Mostyn’s opinion applies not just to the Wall as a whole but also to the particular place where the bulge has occurred. The bulge may have resulted from a defect in the design or construction of the Wall which is confined to that place.

Apart from the bulge, the evidence does not establish that the Slope has moved or is unstable.

The Plaintiff must prove that there has been movement or instability of the Slope which has caused damage to the Wall. It must do so on the balance of probabilities. Having regard to the evidence, I do not have an actual persuasion that there has been movement or instability of the Slope which has caused damage to the Wall. [11]

On the balance of probabilities, I find that:

It is important to understand what is meant by the findings in the preceding paragraph. The findings are made for the purposes of determining the liability of the Defendant as alleged by the Plaintiff. To do so, the Court must resolve the disputed facts. The approach taken by the Court was described by the High Court as follows:

Although no physical damage had been caused to the house at the bottom of the cliff in the Frost case, Brereton JA found that there had already been an interference with the plaintiff’s right to use and enjoy his land because the risk from the overhanging bolder meant that the house could not reasonably be inhabited.

No such issue arises in the present case for two reasons. First, the Plaintiff does not plead that it has already suffered such a loss. Secondly, this case is far removed from the circumstances in the Frost case. The 17 apartments in the Hedingley building remained occupied. It may be accepted that the risk that the Wall might fail is a gloomy prospect for the apartment owners but it is not yet such as to constitute an interference with their proprietary rights.

The Plaintiff has not proved that there has already been an interference with its rights to use its land.

The law of nuisance is not limited to a concern about damage which has already been caused to the Plaintiff’s land. Consideration must also be given to the possibility that damage will be caused in the future.

It follows from the analysis of the expert evidence above that the Plaintiff has not proved that there is current instability in the Slope which gives rise to a risk that movement of the Slope will cause damage to the Wall in the future.

Over the years a number of statements have been made in the contemporaneous reports about the need to remediate the Wall, sometimes expressed in terms of urgency. The statements were all directed to the condition of the Wall and not to movement of the Slope which the Wall retains. The statements may have been correct about the Wall (although the subsequent passage of time suggests otherwise for statements made many years ago) but the mere fact that the statements were made, even by experts, does not prove that there is a risk that the Slope will cause damage to the Wall in the future.

In addition to his slope stability analysis, Mr Chan has undertaken a landslide risk assessment. That assessment has only limited relevance to the issues in the proceedings. It is not an analysis of the likelihood that a landslide will occur but an assessment of the qualitative gravity of the risk having regard to likelihood and consequences should it occur. The likelihood of a landslide is an input into the assessment for which Mr Chan has chosen “possible” or “likely”. Little reason is given for those choices other than the current degree of saturation of the soil and Sydney’s historic rainfall records. The current degree of saturation is assumed, not proved. The historic rainfall records do not provide a rational basis for the conclusion that the risk of landslide on the Slope is “possible” or “likely”. If anything they suggest otherwise. There have been occasions of very heavy rainfall since the Wall was most likely built (eg, 1951, 1956, 1990 or 1991) without a landslide occurring. It is not apparent why Mr Chan nonetheless considers the likelihood of a future landslide as “possible” let alone “likely”. The unexposed basis for his opinion is taken no further by his reference to annual probability and the Australian Geomechanics Society’s guideline descriptors for “possible” (“it is difficult to think about any plausible failure scenario, however a single scenario could be identified after considerable effort”) and “likely” (“is not observed, or is observed in one isolated instance in the available database; several potential failure scenarios can be identified”). For his part, Mr Mostyn says the likelihood of landslide is “unlikely” given the Wall’s performance over the last 90 years.

The adverse consequences from a landslide will be a matter of degree.

The landslide risk assessment may have other uses but it does not assist with the determination of the issues in this case.

One matter which Mr Chan’s Expert Report does demonstrate (and there does not appear to be a dispute about this) is that the stability of the Slope and future risk of harm to the Wall depends upon the degree of saturation of the fill and soil on the Slope. The more saturated the fill and soil, the lower the factor of safety will be. Soil which is fully saturated is represented by a pore pressure coefficient ru of 0.5. As a result of his slope stability analysis, Mr Chan has estimated that the Slope will reach the point of failure (factor of safety = 1) when ru rises to 0.4, depending on the thickness of the Wall. Whilst Mr Chan’s slope stability analysis does not prove the current factor of safety of the Slope, it is capable of broadly explaining the relationship between the factor of safety and the degree of saturation of the soil. The efficacy of that broad explanation is reinforced by the fact that Mr Chan has cross-checked the result of his back-analysis of the third variable (apparent cohesion of the soil units) by reference to academic publications. In any event, the precise mathematical relationship is not important. The key point is that the greater the degree of saturation, the lower the factor of safety.

Mr Chan has demonstrated that the impact which the degree of saturation will have on the factor of safety of the Slope will be significant. Mr Chan considers that water ingress into the Slope is the biggest risk to the Slope’s stability. In answer to a question about relative contribution by various factors to the failure of the Wall, Mr Chan says:

Mr Chan has also undertaken a seepage analysis by which he has modelled the stability of the Slope by making different assumptions designed to simulate a drainage system on the Slope with a “fully broken pipe” and one without. Accepting the assumptions upon which the analysis is based, which is reasonable given that the purpose of the analysis is to compare the postulated alternatives, Mr Chan demonstrates that the factor of safety for the Slope is lower during severe rain events if there is a fully broken pipe.

By way of illustration, Mr Chan’s seepage analysis calculates a factor of safety of 1.05 for the Slope with a fully broken pipe during the heaviest rain in Sydney in the last 36 years (1990). On the alternative assumption that there is no broken pipe, the factor of safety was 1.1. For a period of heavy rain in 2015, the factor of safety is calculated to be 1.12 (fully broken pipe) compared to 1.22 (no broken pipe). The seepage analysis does not prove that the Slope had the calculated factor of safety on any particular date, but it does illustrate how the factor of safety is susceptible to the efficacy of the Defendant’s stormwater system.

The importance of saturation to the risk posed by the Slope is further demonstrated by Mr Chan’s evidence about the preferred measure to manage future slope instability. Mr Chan’s preferred method is the installation of soil nails. He has also considered remediation by the installation of an adequate drainage system on the Defendant’s land. Mr Chan’s only apparent objections to a drainage solution are the perceived difficulty of installation and the need to maintain the drains against future clogging. I do not find those objections compelling. The evidence does not suggest that an adequate drainage system will be more difficult to install than Mr Chan’s preferred soil nails. It may be accepted that the future efficacy of a drainage system depends upon reasonable maintenance but in that respect it is no different to many ordinary aspects of land ownership.

Mr Chan’s evidence about the importance of the saturation of the soil is consistent with the other geotechnical engineering evidence. In the 2018 Precis, Shirley Consulting said that a factor which has contributed to the bulge is the surface drainage on the Slope which was described as “minimal” and “very poor”. Shirley Consulting said that failure or movement of the Wall is most likely to occur during periods of prolonged rainfall. It further said that remediation of the Wall should not take place until drainage work has been performed on the Defendant’s land.

Dr Burman was an expert retained by the Defendant in these proceedings. He and Mr Chan prepared a Joint Report dated 14 December 2024. Dr Burman died before the trial but the Joint Report was admitted into evidence to the extent that it records the experts’ agreement as contemplated by Uniform Civil Procedure Rules 2005 (NSW) r 31.26(3). Dr Burman agreed with Mr Chan that “water is almost inevitably involved in slope instability” and that the stormwater drainage system on the Defendant’s land is inadequate “from a geotechnical viewpoint”. I take that to mean that the existing drainage system does not adequately address the risk of future slope instability.

Mr Mostyn, who replaced Dr Burman, is more guarded on this issue although he does not disagree in principle. He agrees that the most critical condition for the Slope’s future instability is the introduction of water. The point he emphasises is that there have been very heavy rain events since 1938 and the Wall has not failed. Given his views about the long-term performance of the Wall Mr Mostyn does not believe any remediation is required other than “usual landscape maintenance” which is directed to the Slope. It is unclear to what extent Mr Mostyn intends to include maintenance of the drainage system in usual landscape maintenance.

The difficulty with Mr Mostyn’s view about the long-term performance of the Wall is that he has implicitly assumed that the efficacy of the Defendant’s stormwater drainage system has remained at a constant level since 1938. The fact that the Defendant’s stormwater did not cause the Wall to fail before 1999 does not inform the risk of future failure unless the Defendant’s stormwater drainage system has always been as inadequate as it is now (see below).

The facts about the Defendant’s stormwater drainage system are set out above. It is not known what system was used before 1999 other than what may be inferred from the fact that PVC pipes were not introduced in Australia until the 1990s. The remnants of earthenware pipes can be seen on the Slope today, but the previous layout, capacity and state of repair of those pipes is not known. Council’s approval for the original construction specified a condition that rainwater “from [the] building” be drained onto Elizabeth Bay Road. The roof of the Ashdown apartment block building covers the lion’s share of the Defendant’s land. It is plausible that council’s conditions required most of the stormwater from the site to be drained to the front. It is also possible that the conditions were originally complied with. It may be that the Defendant did not commence to drain most of its stormwater down the Slope until an unknown subsequent date.

The problem observed by Ms McCormack in about 1997 was directed to the disposal of Ashdown’s stormwater onto Hedingley’s front apron and not the leaking of water en route. On 5 June 1998 Mr Cameron wrote about surface water runoff and soil washdown being “the worst it has ever been” (which suggests more recent deterioration). Mr Cameron refers to downwashed soil building up “again” but that appears to have been caused by the Defendant’s plumber making a hole bigger and not the stormwater system itself. In 1999 the whole system was replaced with PVC pipes. Some repair work may have been undertaken between 1999 and 2018.

The evidence demonstrates that today, the Defendant’s stormwater drainage system is inadequate. There are two stormwater downpipes at the front of the Ashdown apartment block, one of which may drain some water to the Elizabeth Bay Road kerbside and away from the Plaintiff’s land, although to the naked eye the height of that particular downpipe relative to the kerb appears marginal. The other downpipe at the front of the building is obviously well below the level of Elizabeth Bay Road. It drains water back to the Slope like all the other downpipes on the building. The expert evidence from the drainage engineers who gave evidence in these proceedings shows that the construction of the Ashdown apartment block has resulted in approximately 76% of the Defendant’s total land area being drained down the Slope.

Mr Rahman is an experienced civil engineer with particular experience in stormwater drainage. He was retained by the Plaintiff. After inspecting the site and making some measurements, he prepared a Report in which he describes the layout of the Defendant’s system. There are five key pipes, all of 100mm diameter. Three have a very shallow average gradient and do not have adequate flow rates, whether calculated by reference to the relevant standard (AS 3500 Plumbing and Drainage) when they were installed (circa 1999) or today. The flow rates do not exceed 5% average exceeded probability which means they do not meet the 20-year average recurrence interval. The other two pipes flow into one or more of the first three. The result is that the entire network is incapable of serving the stormwater drainage of the Defendant’s land in accordance with the applicable standards both when installed and now.

Contrary to the standards, the network has been installed with changes in directions which occur not at a pit but at a joint. There are more changes in direction than are necessary.

As for the condition of the pipes, some are in-ground (albeit “shallow”), some are on-ground and some are above-ground. At one significant bend, a pipe rests precariously on what the Plaintiff accurately described as a “cairn”. The cairn does not meet the requirements of AS Standard 2032 Installation of PVC Pipe Systems which requires the pipes to be fixed properly and regularly. There are no expansion joints. One pipe has a crack “completely disjointing the pipe”. Another pipe is “completely cracked”. The layout is such that all the stormwater must pass either of the two cracks. The pipes are the wrong colour for ultraviolet light resistance as specified in the standards. Mr Rahman says that there are other departures from the standards.

Mr Rahman’s conclusion is that the Defendant’s stormwater drainage system is not effective, adequate or safe. Mr Rahman considers that the system has already failed as evident from the two cracks and that stormwater is discharging in an uncontrolled manner down the Slope. It is his opinion that the system will continue to fail in the future.

The Defendant adduced evidence from Mr Brown. Mr Brown has qualifications as a plumber together with an Associate Diploma of Engineering (Plumbing Services). He has extensive work experience with hydraulic design and engineering services. It is Mr Brown’s opinion that, as designed, the stormwater system only has capacity for a 1-in-100 year storm event and that excess water flows down the Slope onto the Plaintiff’s land.

In addition to what may be seen from looking at the pipes on the Slope, Mr Brown undertook a CCTV investigation of the inside of the pipes. It shows that there are a number of roots intruding into the pipes, there are cracks, some of the joints are misaligned and there is ponding at some places. Mr Brown further says that the lack of adequate support for some of the pipes means that they now have adverse grades which means they run uphill. Mr Brown says adverse grade is a defect. Mr Brown says that the state of repair of the system is likely the result of ad hoc maintenance since the apartment block was built. Mr Brown says that the capacity of the system is reduced by its state of repair which means it now has capacity for only a 1-in-6 month storm event. In other words, having regard to Sydney’s historic rainfall data it can be expected that at least once a year there will be a storm event for which the Defendant’s stormwater system will be inadequate: the excess water will run down the surface of the Slope.

In his Report Mr Brown says that the state of repair of the Defendant’s stormwater system is “poor to fair” but in cross-examination he readily agreed that it was “reckless”.

Mr Brown points out that the Ashdown apartment block was built in the 1930s when there was unlikely to have been any standards which applied to stormwater runoff. That is not to the point where the system was replaced in about 1999 and the issue in this case is whether saturation of the Slope poses a risk of damage to the Wall in the future.

Mr Brown has used a software product to model the flow of stormwater down the Slope with the current drainage system compared to that which would have naturally flowed down the Slope had the Ashdown apartment block not been built. Mr Brown concludes that there has been an increase of 10-12%. That figure applies to the worse case 1-in-100 year storm event. For 1-in-1 year storm events, the increase is 135% meaning that it may be expected that every year there will be a storm when more than twice the amount of water will flow down the Slope either through the existing pipe network or over the surface.

Mr Brown also points out that the capacity of the pipe on the Plaintiff’s land into which the Defendant’s system is currently discharging is thought to be a pipe of only 100mm diameter. That means that increasing the Defendant’s system to a 150mm diameter pipe will have a knock-on effect downstream. There is no dispute about that, at least for 1-in-2 year storm events. Another expert witness, Mr Kielniacz, has carried out some calculations which show that the receiving pipe on the Plaintiff’s land will have to be upgraded to 150mm in diameter in order to comply with the AS 3500 standard.

The only major area of disagreement between the parties’ respective experts is the quantification of the increase in the flow of stormwater down the Slope with the current drainage system compared to that which would have naturally flowed down the Slope had the Ashdown apartment block not been built. Using a method different to that used by Mr Brown, Mr Kielniacz has calculated significantly higher increases for storm events of varying average exceedance probability levels. The disagreement does not matter. There is no dispute that the increase is significant, especially for more frequent storm events, which is unsurprising when the Ashdown apartment block occupies about 76% of the Defendant’s land and almost all of the building is drained to the Slope.

There is also an apparent disagreement about whether fixing the existing drainage system will bring about a significant reduction in the stormwater that runs down the Slope. On this issue the witnesses are at cross purposes. Mr Brown has compared current flows down the Slope with what would happen if the existing system was in a better state of repair. He has calculated an improvement of only 2-3 litres per second for a 1-in-100 year storm event. On the other hand Mr Kielniacz has compared the present system with that which would be in place if Mr Rahman’s alternative design was installed in accordance with modern standards, in which case the improvement would be about 24 litres per second depending on severity of the storm. The evidence demonstrates that in order to abate the risk of the soil on the Slope becoming saturated, it is important to replace the present system instead of trying to fix it. Mr Brown agreed that that would be best practice.

As stated above, there is no dispute that the gravel area at the back of the Ashdown apartment building has no drainage. Water from that hard area appears simply to flow down the Slope.

For these reasons, I find that the inadequate stormwater drainage system on the Defendant’s land materially contributes to the degree of saturation of the Slope.

The Defendant submits that the evidence does not permit a finding about where in particular water may be concentrated on the Slope and how that location relates the Wall generally and the bulge in particular. The submission may be accepted at an evidentiary level but it is of little relevance when the risk of future damage to the Wall is being considered. Water is being directed to the Slope from 76% of the Defendant’s land in circumstances where the stormwater system is not adequate to drain the water. Given the liquid qualities of water it is artificial to view its impact as being confined to one particular location. The Wall is at the bottom of the Slope.

Given the evidence about the importance of soil saturation to the future instability of the Slope, the undisputed fact that the construction of the Ashdown apartment block has resulted in stormwater from about 76% of the Defendant’s land being directed down the Slope and the inadequacies in the Defendant’s present stormwater system, both as to design and repair, I am satisfied that there is a risk of future damage to the Wall resulting from the Slope becoming saturated and unstable. As all the experts agree, this is most likely to happen at a time of very heavy rain.

There is a risk that the Slope will cause damage to the Wall in the future.

As set out above, the law of nuisance protects the right of the Plaintiff to use its land for purposes which are ordinary. The Plaintiff’s use of its land as the location for an apartment block is consistent with the reasonable expectations of the Elizabeth Bay locality. As the aerial photographs demonstrate, and as the site inspection confirmed, the land in the immediate vicinity of Hedingley is almost entirely consumed by apartment blocks. The Defendant uses its land for the same purpose.

The Defendant emphasises that the Hedingley apartment block is located close to the eastern boundary of the Plaintiff’s land and, in the case of the breezeway, on the boundary. There is no dispute that the Wall has permitted the Plaintiff to maximise the use of its land. That does not detract from the conclusion that the Plaintiff’s use of its land is ordinary. Elizabeth Bay is a congested locality. The Hedingley apartment block was constructed in accordance with plans approved by the council, including as to set-backs. If instability of the Slope causes the Wall to fail, there will be an interference with the Plaintiff’s use of its land for ordinary purposes.

Any such interference will be substantial even if the physical consequences are in the lesser grades of qualitative measures addressed by Mr Chan and Mr Mostyn from the Practice Note Guidelines for Landslide Risk Management 2007. The interference will not be trivial.

Given the importance of soil saturation the Plaintiff has demonstrated that the interference will be caused by the Defendant’s use of its land. That conclusion follows from the fact that the construction of the Ashdown apartment block and the current drainage system results in 76% of the Defendant’s land being drained down the Slope. Although they differ on the numbers, both Mr Brown and Mr Kielniacz agree that the water now drained down the Slope is greater than would be the case if the Ashdown apartment block did not exist.

Another way of looking at this issue is to say that the Defendant’s use of its land means that water does not flow naturally from the Defendant’s land but that the flow is now more concentrated at the boundary with the Plaintiff’s land. In Gales Holdings Pty Ltd v Tweed Shire Council (2013) 85 NSWLR 514; [2013] NSWCA 382, Emmett JA said with the agreement of Leeming JA and Sackville AJA:

Just like the Plaintiff, the Defendant is using its land for an ordinary purpose, but that does not mean that that use is natural. All the circumstances are to be considered including the fact that the Ashdown apartment block is at the top of a slope which Mr Chan describes as steep, 76% of the Defendant’s land is consumed by hard surfaces, the relatively minor drainage of stormwater to Elizabeth Bay Road, the failure of Ashdown’s stormwater drainage system to comply with contemporary standards and the “reckless” state of repair which the Defendant appears content to accept. Having regard to all the circumstances, the natural use of the Defendant’s land would be one where it is properly drained with appropriate consideration for the neighbours.

It follows from this conclusion that the Defendant is using its land for a common and ordinary purpose but not in a way that reasonably minimises the extent of interference with the Plaintiff’s right to use its land. It cannot be said to be conveniently done.

In line with the majority judgments in Hunt Leather Pty Ltd v Transport for NSW, the Defendant will commit a nuisance if the Slope fails and causes damage to the Wall.

If fault be necessary, then the circumstances just referred to demonstrate the necessary element. The state of the Defendant’s stormwater system was raised about 30 years ago. When the system was replaced in 1999 the Defendant was willing to accept a defective design and since then the system has been allowed to fall into the present state of disrepair. The Defendant engaged a plumber to install the new system but there is no evidence of any attempt to ensure that the work was properly done. The present litigation commenced in 2020. Evidence has emerged in the litigation process which has incrementally demonstrated the inadequacies of the system, including Mr Brown’s examination of the inside of the pipes. There is no evidence of the Defendant taking steps to address the inadequacies with its system.

Apart from an immaterial sliver, the Wall is located entirely on the Plaintiff’s land. The Wall benefits the Plaintiff by enabling it to maximise the use of its land. The Plaintiff has not proved that the Defendant’s use of its land has already damaged the Wall. The Plaintiff is not entitled to damages to compensate it for the cost of repairing the Wall. Whether work is required to remedy a defect in the original design or construction, or whether the work is necessary maintenance on a wall which is at least 90 years old, any work on the Wall which the Plaintiff considers necessary is a matter for it.

As for the future, the Plaintiff seeks quia timet relief. The first prayer for relief in the Statement of Claim is as follows:

The prayer contemplates orders by the Court which address two matters, namely drainage and slope stabilisation. It follows from the findings I have made above that there is no basis to order the Defendant to take any steps to stabilise the Slope, whether by Mr Chan’s soil nails or otherwise. The Plaintiff has not proved that the Slope is presently unstable.

As for the risk of future instability, I am not persuaded by Mr Chan’s evidence that anything more is required than a proper stormwater drainage system. As set out above, Mr Chan’s preference for soil nails over a drainage solution has a tenuous foundation. In any event, Mr Chan’s opinion that soil nails are required proceeds from his dim assessment of the present stability of the Slope which suffers from the significant limitations set out above.

The question then is whether the Court ought to exercise its discretion to order the Defendant to install an adequate drainage system. The discretion is to be exercised having regard to all the circumstances of the case, the forefront of which being the probability that the Slope will cause damage to the Wall and the consequences for the Plaintiff were that to happen.

The degree of probability is difficult to assess. I accept the force of Mr Mostyn’s observation that the Wall has stood largely undisturbed for about 90 years during which time there have been a number of heavy rain events. To some extent, the significance of that history for an assessment of future risk is diminished by the limited information about the adequacy of the drainage system since the Ashdown apartment block was first constructed.

Nonetheless there can be no dispute that Mr Mostyn’s observation is applicable to the last 30 years. Ms McCormack observed deficiencies which were consistent with the current position in 1997. A new stormwater system with PVC pipes was installed in 1999. It may be accepted that the new systems had deficiencies from the outset, such as the 100mm outlet pipe. Other deficiencies appear to be the consequence of subsequent poor maintenance, such as the cracked pipes. The poor maintenance suggests that the probability is increasing that the Slope will become saturated and unstable and that it will cause damage to the Wall in the future. It is also to be observed from Mr Chan’s rainfall data that the three most severe rain months occurred before 1997 which means that historically Sydney has been exposed to rainfall which is heavier than that which the Defendant’s current stormwater system has had to deal with.

By reference to the Practice Note Guidelines for Landslide Risk Management 2007, Mr Mostyn has expressed the view that the risk that the Slope will fail is “unlikely”, which means “the event might occur under very adverse conditions over the design life” which he identifies as 60 years for a residential dwelling and 100 years for major civil infrastructure. For the reasons given in the preceding paragraph I think Mr Mostyn is too optimistic. In any event, he accepts that failure of the Slope could occur.

As for the consequences were it to occur, Mr Chan and Mr Mostyn agree that the risk to human life is acceptable. That seems rational. In terms of property damage, Mr Chan has assessed the qualitative measure of the consequences to the Hedingley apartment block as “major” which is more severe than “medium” but less than “catastrophic”. The Practice Note Guidelines for Landslide Risk Management 2007 describes a “major” consequence as:

Mr Mostyn makes a number of criticisms of Mr Chan’s assessment, including the apparent assumption by Mr Chan that the failure of the Slope will be generalised and not confined to a particular location. Mr Mostyn’s own analysis shows that the consequences would be between “minor” and “medium” and result in a cost of remediation between 10% and 40% of the market value of Hedingley. It is not necessary to decide between the competing contentions. Even at 10% of the market value of the Hedingley apartment block, the consequences of the Slope failing and damaging the Wall will be significant.

These two factors are not part of a mathematical exercise. To avoid giving the contrary impression, I will not use the language of the Practice Note Guidelines for Landslide Risk Management 2007 which divides the continuous spectrum of probability into six discrete grades and a continuous spectrum of consequence into five discrete grades. There is a not insignificant risk that in the future, saturation of the soil will cause the Slope to become unstable and damage the Wall. Were that to happen, the consequences for the Hedingley apartment block will be significant.

These two factors relate to each other. I have found that the probability of the Slope causing damage to the Wall is not insignificant. That may seem low for the making of a mandatory injunction but there is no universally applicable degree of probability. In this case, the consequences of the infringement will be significant which means that the Court’s appetite for risk is low.

There are a number of other considerations which are relevant to the exercise of the Court’s discretion. The objective to be achieved by a mandatory injunction would simply be to ensure that the Defendant properly drains its land. The Defendant will not be required to rebuild or replace the Wall let alone install soil nails. The Defendant’s task will be undemanding compared to alternatives to safeguard the Plaintiff’s right to use its land.

The prayer for relief seeks an order for such drainage and plumbing works as the Court may specify, but the question of the work to be ordered is not at large. The Plaintiff is required to identify the work which it contends the Court ought to order. The exercise of the Court’s discretion is to be considered having regard to the identified work. Different discretionary considerations may arise were different work to be sought.

In this case, the Plaintiff contends for the installation of a new stormwater drainage system on the Defendant’s land as depicted in Figure 16 of Mr Rahman’s Report dated 24 November 2023. The design is for a relatively simple network of connected pipes and pits which collects water from the existing downpipes of the Ashdown apartment block. It does not require that the gutters and downpipes on the Ashdown apartment block be rearranged so that the stormwater from the roof and higher parts of the building will be drained to Elizabeth Bay Road and, by that means, divide the runoff from the Defendant’s land between the front and the back. Mr Rahman’s design is for stormwater to be collected and run through the new pipes and pits down the Slope to be discharged onto the Plaintiff’s land at the same place where the current system discharges. Mr Rahman’s design is at a high level. It is marked “not for construction” and contains conditions such as “all works are to be carried out in accordance with relevant Australian standards, council standards, specifications and guidelines”. Further design and engineering work will be required.

The need for further design work is made plain by the expert witnesses. Mr Rahman’s design contemplates that some of the new pipes will be 100mm in diameter and some will be 150mm, including the last pipe which drains onto the Plaintiff’s land. As explained above, Mr Rahman was not able to give evidence at the trial so the Plaintiff served a Report by Mr Kielniacz. After a conclave, Mr Kielniacz and Mr Brown agreed that all the pipes in Mr Rahman’s design will need to be 150mm. They agree that Mr Rahman’s design will require further development and review at the detailed design stage to ensure a practical and workable solution.

In this context, the Court is reluctant to make a mandatory injunction where future supervision will be required. That principle is illustrated by Kalgovas v Iliopoulos [2025] NSWSC 1611 where the defendant was ordered to build a retaining wall on its land for the benefit of the plaintiff’s land. Three years after the original order was made I became the fifth judge to hear submissions about the performance of the defendant’s obligations and to make further orders for their completion. The Plaintiff points to Lord v McMahon [2015] NSWSC 1619 (Slattery J) as an example of the Court being willing to make a mandatory injunction, but the four subsequent judgments in that case demonstrate that a high degree of supervision was required. Rifai v Woods [2024] NSWSC 374 (Peden J) is another pertinent example of the Court exercising its discretion to make a mandatory injunction.

The Defendant submits that the high level of Mr Rahman’s plan and the need for further design and engineering work means that this is not an appropriate case for a mandatory injunction. The Defendant also raises the spectre of consent from local council and the water utility, plus many other matters which may need to be arranged. The submission may have more force in relation to other work which the Plaintiff seeks, such as installation of soil nails or reconstruction of the Wall. However, the work contemplated by Mr Rahman’s design is relatively simple and relies only on gravity to move the water. Mr Rahman’s design has sufficient detail for Mr Brown to describe it as fair and reasonable. Mr Brown agrees with Mr Kielniacz that a practical and workable solution is possible. There is evidence that the work will cost about $30,000. I do not consider that the actual work which will be required is such that the Court would decline to make an order that the Defendant undertake the work.

That is so even though a factor which exacerbates the risk that supervision will be required in this case is the fact that this has been prolonged and hard-fought litigation. The parties have not generally been able to agree about steps to prepare the case for trial and the Court has been called upon to adjudicate issues which more properly would have been resolved between the parties. There have been disputes about compliance with previous procedural rulings. The Court is not in a position to make a finding about why that situation has come about but it undermines confidence that there will be co-operation in the future.

The estimate of $30,000 for the implementation of a stormwater system may be compared with the estimate of approximately $450,000 for the installation of Mr Chan’s soil nails. The requirement that remedial action by the Defendant be limited to the installation of an adequate stormwater system accords with the principle that in a case like this, the Defendant has a measured duty to take such steps as are reasonable in all the circumstances.

Another discretionary consideration is whether a mandatory injunction is necessary. In light of the findings I have made about the risk of a nuisance being committed in the future, it may be that the Defendant will not be willing to run the risk and will undertake the necessary work without further order of the Court. Whilst the work will benefit the Plaintiff, the Defendant may conclude that it is in its own interests to avoid a future risk of a liability for damages. Nonetheless, I consider that an order of the Court may have some utility in this case. As set out above, the Defendant has not already installed an adequate drainage system. It has not done so during the six years of this litigation, including after Mr Brown’s Report became available in 2021. It has already had an opportunity to act in a self-motivated way and has not done so. As the immediate benefit of the adequate stormwater system will be for the Plaintiff, the Defendant may lack motivation in undertaking the work or may be tempted to cut corners absent an order of the Court. It must also be remembered that the Defendant is a corporation which conducts a company title scheme for an apartment block. There are many apartments and, hence, many interested (or disinterested) individuals. Making the Defendant subject to an order of the Court may assist to focus attention.

I have also considered whether an order that the Defendant install an adequate stormwater system will be deprived of utility because, in order to address the risk that the Slope will damage the Wall in the future, the stormwater system will not only have to be installed but it will also have to be maintained by the Defendant. Future maintenance will not be the subject of any order made in these proceedings. Whilst the possibility that the Defendant will not maintain the stormwater system cannot be ruled out, it is to be hoped that the findings made in this judgment will supply sufficient incentive for the Defendant in the future to safeguard against saturation of the Slope in its own interests.

Another important discretionary consideration is that damages will not be an adequate remedy if damage to the Wall is suffered in the future. The physical consequence may be significant. Were the Hedingley apartment block to be damaged by a landslide, in the first instance the burden will fall upon the 17 owners of lots in Strata Plan 1954 at that time. The 17 owners may not be the current owners. In the meantime, apartments will be sold and bought in the usual scheme of things. These considerations mean that, if possible, it is an appropriate case to seek to prevent loss now rather than compensate for it if it occurs in the future.

Relatedly, to leave the Plaintiff to a future claim for damages would most likely require the Plaintiff to run its case a second time, at least in relation to some issues. It is neither in the parties’ private interests nor the public interests for that to happen.

On the whole, and subject to the consideration next addressed, I consider that this is a case where the appropriate exercise of the Court’s discretion is to order the Defendant to install a stormwater drainage system generally in accordance with Mr Rahman’s plan.

As set out above, Mr Rahman’s plan contemplates that the new system will drain the Defendant’s stormwater into a pipe on the Plaintiff’s land. Such a pipe already exists at the north-east corner of the Plaintiff’s land. From there, the Defendant’s stormwater will run through the pipe under the length of the right of way which was created by the indenture dated 23 June 1921 and by which the Mss Humphrey sold Glenclose and the tennis lawn to Ms McCormack. From the end of that right of way, and presumably commingled with the Plaintiff’s own stormwater, the Defendant’s stormwater is further presumed to run into a pipe which passes down the Lot 65 strip to The Esplanade. Whilst the pipe which first receives the Defendant’s stormwater on the Plaintiff’s land is known to be 100 mm, the evidence does not reveal the width of the pipe which runs along the Lot 65 strip.

There may be a doubt as to whether the Defendant currently has a right to drain its stormwater across the northern edge of the Plaintiff’s land. There is also the physical problem arising from the fact that the Plaintiff’s pipe is only 100 mm in diameter (at least where it can be seen to commence). To accommodate Mr Rahman’s plan, a 150 mm pipe will have to be installed on the Plaintiff’s land. Any legal or physical problem with draining the Defendant’s stormwater onto the Plaintiff’s land would not be a barrier to ordering the Defendant to install Mr Rahman’s system. The Plaintiff has made an open offer to accommodate the Defendant’s stormwater across its land. Whether a drainage easement will have to be granted or access given to the Defendant to enter the Plaintiff’s land to install a bigger pipe, the Plaintiff’s consent and cooperation might readily be formalised in a form of orders.

The further passage along the Lot 65 strip is more difficult to accommodate. The facts about the Lot 65 strip and the various transactions which may have affected it are set out above. I have not made any finding about any party’s rights in relation to the Lot 65 strip, either following the Deed made on 2 July 1913 or following 1974 when the original 99-year-lease of the Lot 65 strip to the Mss Humphrey deceased ancestor would have expired in accordance with its terms. There may be persons who are not party to these proceedings who would be affected by any such rights, were they to exist, including the registered proprietor of International Lodge.

The issue of whether the Plaintiff presently has an entitlement to drain stormwater along the Lot 65 strip arose late in the hearing. It raises questions about the wording of a number of transaction documents, the provisions of the Real Property Act 1900 and the Conveyancing Act 1919 (NSW) and factual matters, including historic matters. The Plaintiff has made submissions to the effect that it does have such a right. For the purposes of considering whether it is appropriate in the exercise of the Court’s discretion to order the Defendant to install a stormwater system which may be dependent upon such a right, the Plaintiff has not demonstrated that such a right exists with sufficient certainty for the Court to make that finding. In particular, the Plaintiff’s reliance on the fact that the Deed made on 2 July 1913 is noted on the register of the Plaintiff’s current title only gives it indefeasibility of title of an express easement (if any) in accordance with the terms of the grant, including as to duration: Westfield Management Limited v Perpetual Trustee Company Limited (2007) 233 CLR 528; [2007] HCA 45at [4]-[5] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); Colovic v Davey [2021] SASCA 117 at [57]-[59] (Doyle JA, with whom Lovell and Bleby JJA agreed).

Perhaps more to the point, neither party has sought to demonstrate that the Defendant has a right to drain stormwater along the Lot 65 strip. For its part, the Defendant’s position appears to be that it is unconcerned once it gets its stormwater across the boundary onto the Plaintiff’s land. Whether the Defendant has a right to drain stormwater along the Lot 65 strip may also depend upon the wording of a number of (possibly different) transaction documents, the provisions of the statutes and (possibly different) factual matters, including historic matters.

On the evidence adduced in these proceedings, there remains a real possibility that a drainage easement along the Lot 65 strip will have to be procured for the benefit of either the Plaintiff’s land and/or the Defendant’s land in order for the Defendant lawfully to perform an order that it install a stormwater drainage system in accordance with Mr Rahman’s plan. The evidence does not permit a view to be formed as to what such an obligation would entail, including as to negotiations to be had, proceedings to be commenced and successfully prosecuted and compensation to be paid. The evidence does not shed light on what prospects either the Defendant or the Plaintiff would have of obtaining any necessary easement, with or without the consent of any relevant third party. The process may be difficult and, ultimately, uncertain. The Court will not usually order a party to embark on uncertain litigation: Pegler v White (1864) 55 ER 423.

This matter weighs heavily against the grant of a mandatory injunction. However, as put forward in closing submissions, the terms of the injunction sought by the Plaintiff are limited to the Defendant installing Mr Rahman’s stormwater system on the Defendant’s land. If that order were to be made conditional upon the Plaintiff first obtaining any easement necessary to drain the stormwater from the Defendant’s land to The Esplanade, whether or not in combination with the stormwater from the Plaintiff’s land, the objection that the Defendant will be required by an order of the Court to undertake a difficult and uncertain process would be largely removed. Fulfilment of the condition would be a matter for the Plaintiff which, in accordance with its own interests, it may choose to undertake. There will need to be an initial time limit on the fulfilment of the condition so that the Defendant is not left indefinitely subject to an unperformed court order, such time limit to be subject to extension upon a reasonable basis being shown.

Whilst the Plaintiff is to have responsibility for fulfilment of the condition, it is not to have the entire expense. As the Defendant insists on draining its stormwater almost entirely down the Slope and not to Elizabeth Bay Road, it is appropriate that it contribute to the reasonable expense of any drainage easement which is necessary beyond the boundaries of its own land. That includes the cost of any proceedings and any compensation payable to any third party. As the Plaintiff may not already have an easement for its own drainage purposes, it ought also contribute. A fair and reasonable basis for the contributions by the Defendant is the proportion of the number of apartments in the Ashdown apartment block to the total number of apartments in the Ashdown and Hedingley apartment blocks combined. The Defendant ought also pay all the costs of obtaining any necessary easement over the Plaintiff’s land together with any drainage work which is necessary to receive Mr Rahman’s system from the Defendant’s land, such as the bigger pipes. In view of the Plaintiff’s offer, those costs will not include any compensation for the easement.

It must be accepted that the Court may to some extent be called upon to supervise the performance of the injunction. It must also be accepted that unforeseen circumstances may occur as a result of which consideration may have to be given to whether the injunction ought to be discharged. Whilst undesirable, they are not reasons to decline any relief.

A mandatory injunction given on appropriate terms will provide a practical solution to the difficult circumstances raised by this case so as to provide a measured response to the risk that saturation of the Slope in the future will cause damage to the Wall and the Hedingley apartment block.

In its Defence filed on 20 June 2025 the Defendant has put forward a number of positive defences in response to the claim for damages. They do not arise having regard to the findings made above and are not suitable for determination in the abstract.

In view of my finding that the Defendant has not interfered with the Plaintiff’s use of its land or damaged the Wall, no issue arises as to whether the Plaintiff has consented to, or assumed the risk of, the interference or damage and, if so, whether that is capable of relieving the Defendant of any liability it would otherwise have in this case. Nor does an issue arise as to whether there has been contributory negligence by the Plaintiff so as to reduce the damages which would otherwise be payable by the Defendant. The claim for a reduction of liability for what is said to be an apportionable claim on account of failures by those who designed or constructed the Wall, or who owned the land upon which it is located prior to the Plaintiff, does not need to be addressed. No question arises as to a failure to mitigate.

One of the documents referred to above is Shirley Consulting’s Precis dated 8 August 2018. As set out above the Precis was tendered by the Plaintiff and admitted into evidence over the objection of the Defendant. The basis for the objection was hearsay in circumstances where no witness was called from Shirley Consulting. The Defendant accepted that each of the contemporaneous Reports obtained by either party from expert advisers, including Shirley Consulting’s Precis, is a business record for the purposes of s 69(2) of the Evidence Act 1995 (NSW). The Defendant, however, submitted that the Shirley Consulting Precis was prepared or obtained for the purpose of conducting, in contemplation of or in connection with Australian proceedings for the purposes of s 69(3). The hearsay rule therefore applies.

I overruled the objection. These are my reasons why.

The reference point for the Defendant’s objection was the letter dated 4 April 2017 which the Plaintiff’s solicitors sent to the Defendant containing the following statement:

The Defendant submitted that the Shirley Consulting Precis had a connection with the proceedings contemplated in the letter. To make good that submission the Defendant tendered a draft letter dated 2 July 2018 from the Plaintiff’s solicitors to Simon Fagg of Shirley Consulting. The draft letter was provided to Mr Fagg as an attachment to an email from the solicitor following an earlier telephone call. There is no evidence about what Mr Fagg was told in the telephone call other than that the solicitors acted for the Plaintiff. The email included a request for a fee proposal to be submitted to the Plaintiff for approval. The draft letter itself referred to a “dispute” with the Defendant and stated that the solicitors had been instructed to retain Shirley Consulting “to prepare an expert report setting out your opinions in relation to” a number of geotechnical matters. The draft letter included a statement that Shirley Consulting was being provided with a copy of the Expert Witness Code of Conduct. The draft letter also included a requirement that Shirley Consulting include in its report a statement that the Code of Conduct had been read and that Shirley Consulting agreed to be bound by it.

On 3 August 2018 a representative of Shirley Consulting inspected the site with a number of members of the Plaintiff’s committee (but not, apparently, the solicitors) and on 8 August 2018 produced the Precis.

To complete the sequence, litigation was next referred to on 11 December 2019 when the Plaintiff’s solicitors sent a draft statement of claim to the Defendant.

The contemplation of proceedings to which s 69(3) refers is not satisfied where the proceedings are merely possible. They must be likely or reasonably probable: Di Liristi v Matautia Developments Pty Ltd [2021] NSWCA 328 at [58] (Gleeson JA, with whom Macfarlan and Brereton JJA agreed). The evidence in this case does not establish that proceedings were likely or reasonably probable on 8 August 2018. As at that date, if proceedings were thought about at all, they were no more than a mere possibility. On the issue of admissibility of Shirley Consulting’s Precis, the terms of the Plaintiff’s solicitors’ letter dated 4 April 2017 are less significant than the fact that the letter was sent 16 months prior to Shirley Consulting being retained. There was no mention of litigation in the intervening period. It is also significant that litigation was not mentioned again for another 16 months after Shirley Consulting had prepared the Precis.

The evidence about the solicitors’ communications with Shirley Consulting in the middle of these two 16-month periods does not show that litigation was contemplated. In their email on 2 July 2018 the solicitors did not ask anything of Shirley Consulting other than that they send a fee proposal. The attached letter was only a draft, evidently provided so that Shirley Consulting could see the type of work which would be required if the fee proposal was accepted. There is no evidence that the fee proposal was accepted. There is no evidence that the draft letter was ever finalised and sent. There is no evidence that Shirley Consulting was provided with the Expert Witness Code of Conduct (the email only had one attachment which was most likely the draft letter to which the email referred). Shirley Consulting did not prepare the report contemplated by the draft letter, from which it may be inferred that Shirley Consulting was never retained to do so.

The conclusion that Shirley Consulting was never retained to prepare a report for the purposes of litigation is further supported by the fact that the work actually undertaken by Shirley Consulting bears no resemblance to the preparation of an expert report as contemplated by the solicitors’ letter dated 2 July 2018. The Precis is not the report requested by the solicitors on 2 July 2018. It specifically stated that it was not a report. It was prepared following the inspection on 3 August 2018. The purpose of the inspection was set out in the Precis:

The first purpose resembles the geotechnical matters referred to in the draft letter but the second purpose appears to have been separate work. The Precis listed four action items following the inspection, none of which resemble the preparation of an expert report for the purpose of litigation. The closest was Item A3 which was to discuss the results of the site inspection with the solicitors prior to the preparation a “Preliminary Observations Report”. The Precis did not refer to the Code of Conduct.

The conclusion that the work recorded in the Precis was not undertaken for the purposes of litigation is further supported by the fact that on 14 November 2018 the Plaintiff’s solicitors wrote to the Defendant and said that the Plaintiff “has consulted with an engineer to identify the structural issues with the retaining wall and put forward options for rectification of the existing retaining wall.” On 21 December 2018 the Plaintiff’s solicitors sent a copy of the Shirley Consulting Precis to the Defendant. The Plaintiff evidently did not regard the Precis as confidential let alone privileged. The covering letter made no mention of litigation. On the contrary, the letter proposed the following next steps:

On 11 April 2019 the Plaintiff requested that the Defendant contribute half the cost of the Shirley Consulting Report, a fact which is antithetical to the contention that Shirley Consulting was undertaking work for the purpose of proceedings to be brought by the Plaintiff against the Defendant.

Taking the evidence as a whole, the conclusion to be drawn is that Shirley Consulting’s Precis was not prepared or obtained for the purposes of conducting, or for contemplation of or in connection with, a proceeding. It is an admitted business record to which the hearsay rule does not apply by virtue of s 69(2).

The orders which would give effect to these reasons would take the following form:

The Plaintiff submits that this is an appropriate case for the Court to publish its reasons and for the parties then to put forward a form of orders to give effect to the reasons. That is an appropriate course because there may be some logistical, practical or administrative matters which may usefully inform the final form of the orders. It is also convenient to hear the parties on the question of costs.

In those circumstances, the orders of the Court are: