Erratt v Grills

These proceedings represent the latest round in a long-running contest about management of the boundary between two rural properties, marked by a creek the mid-point of which defines the common boundary of the freehold title to each property, traversed by a “give and take fence” of a type which, at a high level of generality, may be taken as sufficiently described by the plurality (of Griffith CJ, Barton and O’Connor JJ) in Landale v Menzies (1909) 9 CLR 89.

By analogy with Landale v Menzies, the plaintiff claims an entitlement to exclusive occupation and use (in the nature of a lease or, alternatively, a licence) of all land owned by the defendants in freehold title on her side of their dividing fence. On the basis of that claimed entitlement, she asserts that, by venturing on her side of the fence, albeit on land held by them in freehold title, the defendants have committed, and threaten to continue committing, the tort of trespass against her. She claims injunctive relief (to keep them on their side of the fence) and damages, including aggravated and exemplary damages.

The defendants accept that the dividing fence is a “give and take fence” and that, whilst ever the arrangement underlying its existence remains operative, the plaintiff is entitled to possession of their freehold land on her side of the fence. However, they say, Landale v Menzies is but an imperfect analogy. On the facts of this case, they say, the plaintiff’s entitlement to “exclusive” possession of their land is qualified by particular (promissory) reservations, in their favour, entitling them to enter upon their land, on the plaintiff’s side of the fence, to make reasonable use of water located in the creek, at a particular point, for specific purposes defined by the arrangement (based upon an adjudication by a statutory authority, subsequently confirmed by an agreement made in compromise of proceedings) between the parties.

The whole proceedings turn upon characterisation, and exposition, of the arrangement governing the parties’ dividing fence, bearing in mind that each case ultimately depends on its own facts, analysed within an established conceptual framework addressed by Landale v Menzies as the seminal case.

Landale v Menzies is a case in which the High Court of Australia, on the facts of the particular case, accepted that:

In that context, Griffith CJ described a “give and take fence” in the following terms (at 9 CLR 99-100) with emphasis added:

At 9 CLR 105, Barton J described a “give-and-take fence” in the following terms, with emphasis added:

O’Connor J acted upon a similar understanding of the meaning of the expression “give-and-take fence”, which he described as “common knowledge” in Australia: 9 CLR 115 and 117-118.

He also made the following observation at 9 CLR 119:

Although the High Court, in Landale v Menzies, described a particular give and take fence as if a necessary component of the concept is the existence of a boundary divided by water, there is no logical reason for confining it so.

Conceptually, its essential feature is not a need to access water, but convenience to neighbouring parties in location of a dividing fence otherwise than on their boundary line. Geography may drive convenience, but convenience is the touchstone of the concept.

A purpose of sharing available water was an integral part of the object of the give and take fence agreement under consideration in Landale v Menzies, and it may enjoy a similar importance in most cases (including the present one), but it is not, conceptually, an essential feature of a give and take fence.

The current proceedings might be thought to be distinguishable from Landale v Menzies on several bases. First, the current proceedings involve a give and take fence erected, not simply by agreement between the parties, but (albeit with an element of consent from time to time) pursuant to a contested determination under section 14 of the Dividing Fences Act 1991 NSW. Secondly, the fence under consideration in these proceedings includes a gate near a pond on the plaintiff’s side of the fence to which the parties on the other side (the defendants) make a disputed claim to access via, and by virtue of, the gate. Thirdly, the properties the subject of what is essentially a neighbourhood dispute are of a much smaller dimension than those considered by the High Court, and are located in a different region of New South Wales (Armidale). Fourthly, although both properties under consideration in these proceedings comprise rural land, their respective owners use them for different purposes: the plaintiff runs mainly cattle; the defendants breed and keep (polo) horses.

[At a risk of oversimplification, but perhaps edging towards an understanding of social conflict, I note that the plaintiff (a widow) apparently runs and lives on a working farm, aided by a manager; the first defendant manages a commercial, retail business in town. The property of the defendants (a husband and wife) appears not to be their principal source of income, but their home and a base for largely recreational pursuits. Until such time as the defendants forced the issue via an application to the Local Land Board for a dividing fence, the plaintiff appears to have enjoyed, in fact, greater control of the creek than the defendants insisted was her right. Whether there has been a clash of cultural perspectives, informing different expectations about the use of land and water, was not explored on either side of the record at the hearing of the proceedings.]

Counsel have not suggested that anything of significance turns on the last two of the four points mentioned, but significance may attach to the first two.

A cautionary reminder of the necessity to review each case on its own facts is found in the judgment of Barton J in Landale v Menzies at 9 CLR 106. There his Honour wrote of the facts of that case:

It is not necessary to explore at length differences between the legislative context in which Landale v Menzies was decided and the current legislative context. It is enough to notice that under the Dividing Fences Act 1991 NSW as in force in 2007:

In these respects, the Dividing Fences Act 1991 has a broader, and more flexible, operation than had the Dividing Fences Act 1902 NSW or its predecessors.

The judgment of the High Court in Landale v Menzies may have been, to a commensurate extent, driven by a greater need for reliance upon the common law of contract than a contemporary analysis might need to be.

In Landale v Menzies the Court made findings of fact about what adjoining landowners had agreed, and characterised the fence the subject of their agreement as a “give and take fence”. In the current proceedings, a statutory authority, exercising a statutory power, made an order that a “give and take fence” be erected, and determined the line upon which it was to be erected pursuant to that order, leaving this Court to determine ongoing disputes about the legal incidents of the fence.

Debate about those legal incidents focuses, in large measure, on the existence of a gate in, and forming part of, the fence erected pursuant to the statutory determination. By virtue of paragraph (a) of the definition of “fence” in section 3 of the Dividing Fences Act 1991 (as in force in 2007, and as still in force), the determination that there be a dividing fence can include provision for “any gate… necessary for the operation of the fence”.

The primary determination under section 14 of the Dividing Fences Act 1991, consequent upon which the fence presently under consideration was erected, was made on 13 February 2007.

At that time, so far as is material, section 14 was in the following terms (with emphasis added):

So far as material, section 3 of the Dividing Fences Act, at that time, contained the following, amongst other, definitions (with emphasis added):

Section 19(2) of the Dividing Fences Act, in 2007, provided for an appeal, on a point of law, from orders of the Land Board to the Supreme Court. Subject to that right of appeal, section 19(1) provided that “[any] order made by a … Local Land Board under [the] Act is final.”

Determinations affecting the parties to these proceedings were made by the Local Land Board for the Land District of Armidale.

No party appealed from the Land Board’s determinations.

Since the Board’s determinations, the text of both section 3 and section 14 of the Dividing Fences Act has been amended, although not significantly. The principal change is that jurisdiction under section 14 is now exercised by the Local Court or NCAT, the NSW Civil and Administrative Tribunal.

The Local Land Board determination of 13 February 2007 was made on the application of the present defendants. The respondent to their application (the “adjoining owner”) was the present plaintiff.

The plaintiff is the registered proprietor, and occupier, of a property known as “Araluen East” (Lot 6 in Deposited Plan 717734), comprising 132.4 ha.

The defendants are the registered proprietors, and occupiers, of the property known as “Richetta” (Lots 3 and 4 in Deposited Plan 565793), comprising in total 6.719 ha.

The parties’ respective properties are divided by a creek known as “Tilbuster Ponds”, which runs in a north-south direction. The plaintiff’s land lies to the east of the creek, the defendants’ to the west.

On 29 June 2007 the parties settled an earlier round of proceedings in this Court (the first Supreme Court proceedings, numbered 3192 of 2006) on terms that included (in paragraphs 1 and 2) an agreement that the common boundary between their two properties is “the middle line of the creek”.

The current proceedings (the parties’ third excursion to the Supreme Court) were conducted on the basis that the parties continue to be bound by that agreement. That was confirmed, during the hearing of the proceedings, by a formal notation by the Court in the following terms:

The creek does not run continuously or in an even flow. Along the parties’ common boundary, it more often than not comprises three ponds divided by dry patches. For convenience, in the current proceedings, those ponds have been described respectively as the northern pond, the middle pond and the southern pond.

The give and take fence erected in consequence of the Land Board’s determination crosses the creek in two places, with the result that (as depicted in Exhibit D2):

A photographic equivalent of Exhibit D2 is reproduced in the judgment of Harrison AsJ in Erratt v Local Land Board Armidale [2008] NSWSC 959 at [15]. Her Honour determined the parties’ second set of Supreme Court proceedings, numbered 2008/30019. The portion of the creek described by her, at [16], as having “a flat bottomed ‘U’ shape (also known as the middle portion)” has been described in the current proceedings as “the Middle Pond”. The northpoint lies at the top of the photograph. The creek is shown on the right hand side of the photo. The straight zig-zag line crossing the creek in two places is the line of the “give and take fence”, now constructed.

The central point of aggravation between the parties in the current proceedings is that the defendants (over the plaintiff’s objection) claim, and purport to exercise, an entitlement to access the southern pond: (a) as a source of water pumped, for domestic purposes, to their homestead; and (b) to exercise horses in water, for veterinary purposes. They access the southern pond via the gate in the fence.

The defendants contend that they need access to the southern pond because, they say, only it contains water fit for drinking, and only it has a depth that allows horses to be exercised in water.

Their contention that they are constrained by environmental laws from cleaning out, and deepening, the middle pond was not explored during the hearing. If there are, as well there might be, regulatory constraints on maintenance or development of the creek, those constraints were not identified with precision in evidence or submissions.

The defendants are not without dams on their property – they have two – but, they say, they are dependent upon the southern pond for drinking water and exercise of their horses.

The plaintiff contends that, conformably with Landale v Menzies, she is entitled to exclusive occupation of the land (including land held by the defendants in freehold title), and water, on her side of the fence, as they are entitled, she accepts, to exclusive occupation of the land (including that held by her in freehold title), and water, on their side of the fence.

In a nutshell:

An illustration of the defendants’ perspective of the content, and limits, of the entitlements they claim can be found in evidence of the first defendant that, when he takes horses down to the southern pond for exercise in water, he routinely tethers them to the western bank of the pond so as to ensure that they cannot cross the notional middle line of the pond onto land held by the plaintiff in freehold title.

Neither side of the record descends to such precision in debates about “entitlements” to the use of water. They go no further than to claim an unexplored statutory right, under the Water Management Act 2000 NSW, to take water from the creek for domestic consumption and stock: cf, M. McKenzie, “Water Rights in NSW : Properly Property?” (2009) 31 Sydney Law Review 443; K. Stoeckel, R Webb, L Woodward and A Hankinson, Australian Water Law (Law Book Co., Sydney, 2012).

The parties’ chosen battleground is the law of property, not the law of water.

As earlier noted, in my view an element of “water” is not essential, in the abstract, to definition of the concept of a give and take fence, critical ‘ though it may be to an understanding of the concept’s practical operation.

During the hearing of the current proceedings, at a time when the outcome hung in the balance so that each side was compelled to plan for the worst as well as hoping for the best, I invited the parties to reach, and to record formally, an agreement about the duration of the life of their give and take fence.

The result was a formal notation made by the Court in the following terms:

This agreement is consistent with that found, on the facts, in Landale v Menzies: 9 CLR 99-100, 112-113 and 117-119. Although grounded in the facts of the case, the guiding principle (applied by substantially the same Court in Cribb v Korn (1911) 12 CLR 205 at 210 and 215) is that where a right of occupancy (a tenancy or licence at will) is of indefinite duration it may, generally, be determined on reasonable notice.

The word “arrangement” was deliberately used in that notation in deference to the parties’ recognition (and, in particular, to the defendants’ insistence) that, unlike the factual setting in Landale v Menzies, the give and take fence presently under consideration has its ultimate foundation, not in an agreement made between the parties, but in a statutory determination.

The parties agreed that their “arrangement” is determinable, and that it is determinable on reasonable notice, but they differed in their prescription of a minimum period of notice. The plaintiff maintained that 12 months is necessary. The defendants insisted that no more than six months is necessary. Their formal agreement is thus expressed in terms of “reasonable notice… not less than six months…”.

In articulating submissions about whether the Court should refer to “six months” or “12 months”, the parties appeared to be on common ground in considering that a major factor in assessing “reasonable notice”, would be perceived, practical delays in the parties securing a fresh determination under the Dividing Fences Act 1991, section 14, as presently in force.

Subject to the parties’ agreement on a minimum period of six months’ notice, the question of what is “reasonable” in a particular setting must be assessed at the time notice is given: Landale v Menzies (1909) 9 CLR 89 at 102-103, 111, 112-113 and 118-120.

As Landale v Menzies demonstrates: (a) if less than reasonable notice of an intention to terminate the parties’ arrangement were to be given, it would be ineffective; (b) if an effective notice were to be given, the arrangement would continue in operation until expiration of that notice; and (c) upon expiration of notice effectively given, the parties’ respective entitlements to occupy land in the vicinity of their common boundary will revert to rights determined by reference to their legal boundary, the notional line running along the middle of the course of the creek “Tilbuster Ponds”.

Whether (as the plaintiff contends) or not (as the defendants contend) the defendants commit the tort of trespass against the plaintiff: (a) when they enter upon the plaintiff’s side of the give and take dividing fence to exercise horses in the southern pond; or (b) in location of their pump and associated piping on the western side of the southern pond, depends upon the content (ie, the terms and character) of the “arrangement” that governs the fence.

Leaving aside controversy that attends the effect of an order made by Harrison AsJ in the judgment, published on 18 September 2008 and reported as Erratt v Local Land Board Armidale [2008] NSWSC 959 at [41]-[43], the parties are agreed that the terms of the arrangement are to be found in, or inferred from, the following instruments:

Although the parties are at odds as to whether the judgment of Harrison AsJ has any (and, if so, what) operative effect on the outcome of the present proceedings, it is, for several reasons, of central significance to the cases presented on either side of the proceedings.

First, her Honour’s judgment was predicated upon: (a) the parties’ express agreement that their common boundary runs along the middle line of the creek, Tilbuster Ponds; (b) the parties’ acceptance that the determination of the Land Board dated 13 February 2007 was valid and binding on them; and (c) with the benefit of full adversarial debate, her Honour’s active consideration of the legal effect of the Board’s determination dated 13 February 2007 (including Order 10), the Court’s interlocutory orders of 7 December 2006, and the Terms of Settlement made the subject of orders by the Court on 29 June 2007, and the determination made by the Chairman of the Board on-site in April 2008.

Secondly, upon consideration of those matters in that setting: (a) her Honour noted, in [13], that, by paragraph 3 of the Terms of Settlement, the parties had agreed to comply with the Board’s Order 10; (b) her Honour expressly found, also at [13], that order 10 (a) contemplated that a gate would be provided in the fence to be erected pursuant to the Board’s Order; (c) her Honour, at [14], expressly characterised the fence to be erected pursuant to the Board’s Order as a “ give and take fence” as described by Barton J in Landale v Menzies (1909) 9 CLR 89 at 105.

Thirdly, having heard evidence adduced on both sides of the record about what was said and done at the on-site meeting of April 2008, her Honour, at [31]-[34], expressly found that the Chairman of the Land Board had specifically pegged out the location of the gate sought by the defendants, and allowed by the Board, in the fence that the Board had determined was to be constructed.

Fifthly, by reference to section 7 of the Dividing Fences Act, her Honour expressly found, at [40], that the plaintiff, on the one hand, and the defendants, on the other, were each obliged to pay one half of the cost of construction of the fence to be erected.

Sixthly, her Honour, at [41]-[43], expressly declined the plaintiff’s application for declaratory relief (and, incidentally, consequential injunctive relief) to the effect that the plaintiff has an entitlement to exclusive occupation and use of all land, and parts of the creek Tilbuster Ponds, which lie on the eastern side of the dividing fence line.

Seventhly, her Honour grounded her refusal of the plaintiff’s application for such relief on express findings, at [43], that the defendants are entitled: (a) to pump water from the southern pond, to the homestead on their property, for their family to use for domestic purposes; and (b) to exercise horses, under the first defendant’s care and supervision, in the southern pond for veterinary purposes.

Eighthly, in determining, at [45]-[46], that the parties should pay their own costs of the proceedings before her, her Honour specifically recognised as fundamental to her decision to dismiss the plaintiff’s summons: (a) her finding that a gate was to be inserted in the dividing fence; and (b) her rejection of the plaintiff’s claimed entitlement to all the water in the southern pond.

Ninthly, a consideration of her Honour’s reasons for judgment as a whole, and in the procedural context in which they were published, demonstrates that the issues she determined about the parties’ competing entitlements with respect to the dividing fence, then to be constructed, were, in substance, the same as the core issues presented for determination in the current proceedings.

Finally, for completeness, it should be noted that, during the course of the proceedings that culminated in the judgment of Harrison AsJ, the parties agreed (in short minutes dated 2 September 2008) to obtain quotations for the erection of a fence on the line identified by the Chairman of the Land Board, thereby evidencing their acquiescence in his determination.

As is manifest on the face of Harrison AsJ’s judgment, the fence was not constructed until after the proceedings before her Honour were concluded.

As it happened, shortly after completion of the fence the defendants paid the contractor selected by the Chairman of the Land Board to erect the fence and demanded of the plaintiff that she pay her half share of the cost of the fence (namely, $3,540.50).

Not until the hearing of the current proceedings, some six years later, did she agree to pay that sum.

Her agreement came, during the course of the hearing, when I enquired of counsel whether it would be open to the Court to decline to grant her equitable relief enforcing the fence line if she had not met her obligation to pay her share of the cost of the fence.

At that point, the plaintiff put aside earlier quibbles about workmanship attending the fence’s construction, and provided a formal undertaking to the Court that she would, within a specified time, pay to the defendants the sum of $3,540.50 together with interest calculated at the rate ordinarily allowed under section 100 of the Civil Procedure Act 2005 NSW (by way of an award of pre-judgment interest) from 14 May 2009 up to the date of payment of the principal sum.

Interpretation of the instruments that mark parameters of the parties’ arrangement requires familiarity with the proceedings that have engaged the parties’ intention.

The First Supreme Court Proceedings. The proceedings numbered 3192 of 2006 in the Equity Division of this Court were first in time. Those proceedings were commenced, by the present plaintiff against the present defendants, by a summons filed on 9 June 2006.

The final relief sought in the summons included, principally, a claim for a declaration that the common boundary between the parties’ properties was located on the western side of the creek “Tilbuster Ponds” . Interlocutory relief was sought regarding fences, but the core relief sought in the proceedings focused on identification of the boundary. Confirmation of that may be found in the defendants’ cross summons filed on 7 December 2006. It sought a declaration that the common boundary between the parties’ properties was the eastern boundary of the creek.

By the time the proceedings were settled on 29 June 2007 (on terms that included an agreement that the common boundary line was a middle of the creek): (a) the central focus of the parties’ attention had shifted towards the practicalities of establishment of a settled dividing fence; and (b) proceedings before the Land Board had culminated in the Board’s determination dated 13th February 2007.

Along the way to settlement of the proceedings, on 23 June 2006, the Court (constituted by Campbell J) made interlocutory orders, without publication of formal reasons, to the following effect:

Those interlocutory orders were supplemented by a further interlocutory regime the subject of “consent orders” made by a Registrar on 7 December 2006, the terms of which were subsequently paraphrased in paragraph 3 of the Land Board’s determination dated 13 February 2007.

The “orders” signed by the respective solicitors of the parties on 7 December 2006 set out the following regime “by consent” (with emphasis added):

It is important to appreciate that neither “the existing fence” nor “the new fence to be erected” referred to in these “orders” corresponds to the “give and take fence” subsequently erected in 2009 pursuant to determinations of the Land Board. That said, the Board appears to have embraced essential features of the parties’ interlocutory regime in its determination of 13 February 2007.

The Supreme Court proceedings were settled on 29 June 2007 by a formal notation and order made by Hamilton J giving effect to Terms of Settlement signed by the parties in the following terms (with emphasis added):

The Land Board Proceedings. The Local Land Board’s reasons for decision dated 13 February 2007 recite that, although some informality attended commencement of proceedings before the Board, both sides invited the Board to determine a request made by the applicants before the Board (the present defendants) of the respondent before the Board (the present plaintiff) that she “fence her side of Tilbuster Ponds Creek” .

In its reasons the Board noted that the parties had not reached agreement about the proposed fencing work, but were currently engaged in the Supreme Court proceedings (numbered 2006/03192) in which interlocutory orders had been made on 23 June 2006 and 7 December 2006.

The context in which the Board proceeded to make “Order 10” on 13 February 2007 appears (with emphasis added) in the following paragraphs of its reasons for decision:

Paragraph 10 of the Board’s reasons for decision is in the following terms (under the heading “Order”), with emphasis added:

Problems experienced in implementation of this determination of the Board were not explored in the current proceedings, beyond noting institution of the fresh Supreme Court proceedings (numbered 30019 of 2008) that culminated in the judgment of Harrison AsJ of 18 September 2008.

The Second Supreme Court Proceedings. Those proceedings were commenced by a summons, filed on 29 January 2008, in which the present plaintiff sought administrative law relief against the Land Board (as the first defendant named in the summons), ultimately not pursued, and relief, more generally, against the current defendants (named as the second and third defendants in the summons).

For present purposes, it is sufficient to note that the relief claimed in the summons included, in addition to claims for injunctive relief about fences, claims for the following relief (with emphasis added):

Harrison AsJ dealt with the plaintiff’s application for this relief in paragraphs [41]-[43] of her reasons for judgment published at [2008] NSWSC 959. With editorial adjustments, it is convenient to set out those paragraphs here, together with the substance of paragraphs [45] and [46], with emphasis added:

The plaintiff’s case relies heavily on characterisation of the parties’ current dividing fence (prospectively, by the Land Board; and by Harrison AsJ) as a “give and take fence”, and attribution to that fence of precisely the same character attributed to the agreement underlying Landale v Menzies.

The plaintiff subordinates to that character: (a) the gate in the fence; and (b) Harrison AsJ’s dismissal of her application for a declaration of an entitlement to exclusive occupation of all land and the whole of the creek on her side of the fence.

She discounts the possibility (noticed by the High Court in Landale v Menzies at 9 CLR 100 and 110) that a give and take fence might involve common, as distinct from exclusive, access to water.

The defendants contend that: (a) Landale v Menzies is distinguishable, factually, because that case speaks only to a fence governed by a contract at common law, not a fence erected pursuant to a statutory determination; (b) in making provision for a gate to be constructed in the fence both the Land Board and, ultimately, the parties contemplated that the defendants would have access to the southern pond, on their own side of the legal boundary line, for drinking water and exercise of the first defendant’s horses; (c) Harrison AsJ’s dismissal of the plaintiff’s application for a declaration of an entitlement to exclusive occupation carries the consequence that the plaintiff is estopped from asserting the same entitlement in these proceedings; and (d) if the plaintiff’s claim is not barred by estoppel, her attempt to re-litigate a question earlier decided against her constitutes an abuse of the processes of the Court.

The plaintiff responds to the defendants’ reliance on estoppel and abuse of process principles by contending that: (a) no res judicata or issue estoppel can arise from Harrison AsJ judgment because her Honour’s decision to dismiss the claim for a declaration was interlocutory, rather than final, and based upon an exercise of discretion rather than a determination of legal rights; (b) her Honour’s dismissal of the application for declaratory relief cannot be taken as overriding her characterisation of the fence as a “give and take fence”, the character of which must be determined by reference to Landale v Menzies; and (c) the fact that the fence was erected only after her Honour’s orders were made is a change in circumstances which denies any operative effect to such, if any, form of res judicata, issue estoppel or abuse of process that might otherwise impede her claims for relief in the current proceedings.

There is no need to delve deeply into the law relating to res judicata or issue estoppel (classically discussed in Blair v Curran (1939) 62 CLR 464 at 531-533) or that governing abuses of process of the type associated with Reichel v Magrath (1889) 14 App Cas 665 (conveniently explained in Haines v Australian Broadcasting Commission (1995) 43 NSWLR 404 at 414), one or both of which (in my opinion) stand in the plaintiff’s way.

Nor is it necessary to enter upon detailed debate about whether dismissal of a summons seeking declaratory relief is capable of that degree of finality to ground a finding of res judicata or issue estoppel. For the record, I note that, contending for an answer to that question in the negative, the plaintiff relies upon Coles v Wood [1981] 1 NSWLR 723 at 724 and 725, recently followed in Insurance Australia Limited t/as NRMA Insurance v Iuli [2014] ACTCA 50 [10]-[12] and [16]. However, where, as here, dismissal of an application for a declaration is grounded upon a considered determination of competing claims of right rather than merely an exercise of discretion, the order for dismissal may constitute a “final” judgment rather than merely an “interlocutory” one: Hudson Pty Ltd v Legal & General Life of Australia Ltd (1985) 1 NSWLR 701.

Contrary to the plaintiff’s submissions, nothing of substance turns upon the fact that the parties’ give and take fence was only constructed after Harrison AsJ dismissed the plaintiff’s summons. Her Honour determined the case before her based upon competing claims of right. She did not dismiss the plaintiff’s claim for declaratory and injunctive relief merely on discretionary grounds. The fact that, after publication of her judgment, the fence earlier in contemplation was in fact constructed provides no occasion to reopen controversy about settled entitlements.

The principles governing finality of judgments, to which the defendants appeal, all point in the same direction as my independent assessment of the material. To my mind, the defendants are correct in their invocation of those principles but, agreeing as I do with Harrison AsJ, I do not refrain from saying so.

Based on the evidence adduced in the present proceedings, and the parties’ submissions, I am satisfied, independently, of the essential correctness of Harrison AsJ’s interpretation of the Land Board’s determination of 13 February 2007 and consequential developments, including an agreement made by the parties on 29 June 2007 in order to settle the first Supreme Court proceedings and to give effect to the Board’s primary determination.

When the Chairman of the Land Board attended the properties on-site in April 2008, and then and there pegged out the site of the fence and the gate incorporated in the fence, he acted consistently with, and gave practical expression to, the first and last sentences of Order 10(a) made by the Board in its determination of 13 February 2007.

The last sentence of Order 10(a), in particular, embraced essential features of the parties’ interlocutory regime (agreed in orders 1 and 7-9) of the “consent orders” made on 7 December 2006 in the first Supreme Court proceedings, but Order 10(a) was not dependent upon the continued operation of that regime for its own effective operation. In any event, the parties agreed, by paragraph 3 of the Terms of Settlement given effect (in the same Supreme Court proceedings) on 29 June 2007, to comply with the Board’s Order 10.

If and to the extent that the efficacy of the parties’ “give and take fence” may (contrary to my opinion) depend upon the existence of an agreement between adjoining landowners, such an agreement exists in this case by reason of the parties’ deliberate, consensual submission to the determinations of the Land Board: first of all, in order 10(a) made on 13 February 2007; and, ultimately, in the Chairman’s consequential determination of April 2008, without any appeal under section 19 of the Dividing Fences Act or any administrative law challenge on an application for judicial review. Even in the current proceedings, the plaintiff accepted the validity, and binding effect, of the Board’s determinations, confining her case to submissions about the proper construction, and legal effect, of Order 10(a).

The claims for relief made by the plaintiff in the current proceedings (in character, not unlike the claims for relief made in paragraphs 10-11 of the summons she filed in the second Supreme Court proceedings) must fail, on the merits.

The plaintiff is not entitled to an injunction restraining the defendants, generally, from entering upon that area, to which they retain freehold title, on the eastern side of the give and take fence in the vicinity of the southern pond. Nor is she entitled to an injunction requiring them to remove their pump from the vicinity of the southern pond, or to cease pumping water from that pond.

Neither is she entitled to damages for trespass arising from the defendants’ entry upon that part of their freehold title on the eastern side of the fence for the purpose of pumping water from the pond or exercising horses. There is no evidence of excessive (unreasonable) user of the rights implicitly reserved (and promised) to the defendants: (a) to pump water from the second pond to their homestead for domestic purposes; and (b) to exercise horses, under the personal supervision and care of the first defendant, for veterinary purposes, in the southern pond.

A Summary of the Parties’ Rights and Obligations. Although the plaintiff must fail in her application for injunctive relief and damages in these proceedings, her pursuit of such remedies has not been unproductive in working out the respective rights and obligations of the parties. The disputation into which the parties early fell, and from which they have yet to extract themselves, is a product, in part, of the absence of a convenient summary of those rights and obligations.

During the course of the proceedings:

Lease or Licence? Upon consideration of a “give and take fence” arrangement, a question naturally arises as to the nature of the limited right each property owner has in that part of his or her neighbour’s land which is on his or her side of the fence. In Landale v Menzies the High Court, having found reciprocal rights to exclusive use and occupation of the neighbour’s land, favoured characterisation of those rights as a tenancy rather than as a licence: 9 CLR 100-101, 111 and 117-118. That characterisation carried with it an entitlement in “the lessee” to sue in trespass: Georgeski v Owners Corporation SP49833 (2004) 62 NSWLR 534 at [91]-[109], citing, inter-alia, Radaich v Smith (1959) 101 CLR 209 at 222 and Western Australia v Ward (2002) 213 CLR 1 at [504].

Although each case must be decided on its own facts, and in light of facts about the parties’ intention or particular law governing their relationship, general acceptance attends the proposition that, prima facie, a give and take fence carries with it rights of tenancy rather than a mere licence: e.g., Peter Butt, Land Law (Law Book Co, Sydney, 6th ed, 2010), paragraphs [2.57] and [15.10]; Peter Young, “Some Thoughts on Fences” (1994) 2 Australian Property Law Journal 78 at 79; HK Insall (ed), Collins’ Law of Fences and Pastures Protection (NSW) (Law Book Co, Sydney, 2nd ed, 1984), pages 6-7.

There is no evidence of a contrary agreement between the parties. Accordingly, I find that the reciprocal rights which each party to these proceedings has in relation to his or her neighbour’s land by virtue of its location on his or her side of the give and take fence are rights of tenancy, not those of a licensee: cf, AJ Bradbrook, CE Croft and RS Hay, Commercial Tenancy Law (LexisNexis Butterworths, Sydney, 3rd ed, 2009), paragraphs [1.3]-[1.4] and [3.1]-[3.3].

This finding is not inconsistent with reservation to the defendants (or a contractual promise made to them by the plaintiff) of limited rights, as “lessors”, to enter upon their land (on the plaintiff’s side of the fence) for defined purposes referable to the southern pond: Western Australia v Ward (2002) 213 CLR 1 at [507]-[512] and cases there cited. The fact that the defendants’ rights of access to the southern pond are limited provides confirmation that, subject to those rights, the plaintiff’s entitlement to the land on her side of the fence is an entitlement to exclusive possession, even against the defendants as holders of freehold title to land.

Incidents (Implied Terms) of the Parties’ Give and Take Fence Arrangement. The parties’ give and take fence arrangement has its legal foundations in three distinct, but complementary jurisprudential concepts:

The ultimate legal foundation of the parties’ fence (the Board’s Order) was subsumed in the parties’ contract to comply with the Order. Accordingly, it is unnecessary to consider all the incidents of such an order unattended by an inter partes agreement. There is no reason on the facts of this case, however, to expect that those incidents would have a character or operation different from those attending the parties’ contract, incorporating a tenancy.

The relationship between the parties is such that, in both contract and property law, subject to any agreement to the contrary, the law implies terms designed to regulate the parties’ dealings.

In contract, those implied terms have historically included (as discussed in Service Station Association v Berg Bennett (1993) 45 FCR 84 at 92-94):

Traditionally, in the realm of landlord and tenant much the same territory has been covered by implied terms to the same effect as a landlord’s covenants (a) for quiet enjoyment; and (b) not to derogate from the grant of a lease to the tenant, subject to rights reserved (and promises made by the lessee) in favour of the lessor: Butt, Land Law (6th ed, 2010), para [15:59].

These terms implied in a lease are, essentially, manifestations of a broader principle encapsulated in the terms implied in a contract: O’Keefe v Williams (1910) 11 CLR 171 at 191, 197-198, 200 and 210-211. As between themselves, the positive and negative formulations of the terms are, in substance, reflections of the same principle.

That principle is that, in all contracts (including leases), the law presumes that it is the intention of the parties to give efficacy to their agreement, not to frustrate it: O’Keefe v Williams (1910) 11 CLR 171 at 197 and 199.

In Australian law as it has developed since Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 268F (without a definitive statement by the High Court of Australia, as Commonwealth Bank of Australia v Barter [2014] HCA 32; 88 ALJR 814; 312 ALR 356 at [42] and [107 and Paciocco v ANZ Banking Group Ltd [2015] FCAFC 50 at [287], confirm) an additional term implied by law in a commercial contract, including a lease or licence, may be (and, in my opinion, in the current context is) a term that each party will exercise powers conferred on him or her by their contract in good faith, reasonably and not capriciously or for some extraneous purpose: Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 at 369B; Burger King Corporation v Hungry Jack’s Pty Ltd [2001] 69 NSWLR 558 at [144]-[189]; Paciocco v ANZ Banking Group Ltd at [288]-[292].

Whether such a term is implied in all, or only some, contracts (whether characterised as “commercial” contracts or otherwise) matters not in the current proceedings: cf, Tote Tasmania Pty Ltd v Garrett (2008) 17 TasR 320 at [16]; Specialist Diagnostic Services Pty Ltd v Healthscope Ltd (2012) 305 ALR 569; [2012] VSCA 175 at [86]-[93]. Each contract must be considered, literally, on its own terms. Where (unlike the current case) parties have engaged in a detailed exposition of their respective rights and obligations in a formal document, there may be less call, or scope, for a generic implied term of any description.

In any event, the objective theory of contract, which holds sway in Australian law, requires, inter alia, that the intention of contracting parties be determined by reference to “the purpose and object” of their transaction: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]. The purposive character of the law comes into play here in a way that requires close attention to both the substance and form of each agreement and, a contractual purpose having been identified, a robust but fair approach to enforcement of the contract.

An illustration of implied terms of the character presently under consideration, in operation, in the context of a dividing fence, is Vickery v Jenner (1896) 17 NSWR (Law) 438 at 441-442. There a majority of the Full Court of this Court implied a term in a fencing agreement to the effect that a party would not wilfully, or by any wanton or malicious act, destroy or impair the fence as a boundary fence, having regard to the circumstances existing at the time repairs were effected to the fence. That term was justified on the basis that the parties must be assumed to have promised to do that which was part of their bargain, or which could be fairly implied as part of the good faith which was necessary to make the bargain effectual.

A key ingredient in the law’s justification of terms implied, by law, in contract and tenancy law is an appreciation that an implied term is necessary to ensure that a party secures the benefit of his, her or its contract or, as the case may be, lease. Increasingly (as illustrated by Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237) leases, historically perched between the law of contract and the law of property, have been assimilated within contract law.

Accordingly, the law invites inquiry as to the purpose of the parties’ arrangement the subject of the current proceedings.

In the context of the current proceedings, that purpose can be taken from Landale v Menzies at 9 CLR 99-100 and 105 in the observations of Griffith CJ and Barton J respectively. The object of the parties’ arrangement is and at all material times has been: (a) to obtain a more convenient location for a dividing fence than can be had along the middle line of the creek which defines the boundaries between the parties’ properties; and (b) to divide the permanent water in the creek between the parties by an arrangement that amounts to a fair deal.

It is not necessary, in this judgment, to consider a full range of circumstances that could be described as a breach of one or more of the implied terms governing the parties’ performance, or enforcement, of their arrangement. For completeness, however, it must be recorded that such terms are grounded in the common law. They are not grounded in an exercise of equitable jurisdiction or upon a characterisation of the parties as standing in a fiduciary relationship. The parties are not fiduciaries. They are entitled to consult, and prefer their own interests, unhindered by a duty to subjugate their own interests to those of their neighbour.

The parties are, however, obliged not only to respect the integrity of their dividing fence but also to respect their neighbour’s entitlement to access to the southern pond, in the case of the defendants for the limited purposes of: (a) pumping a reasonable amount of water to their homestead for domestic purposes; and (b) for exercising horses, under the personal supervision and care of the first defendant, for veterinary purposes.

Upon consideration of what orders should be made in disposition of the proceedings, I am mindful of: first, an imperative (grounded in section 63 of the Supreme Court Act 1970 NSW) to endeavour, so far as possible, to determine all matters in controversy between the parties so as to effect a complete and final determination of those matters and to avoid all multiplicity of legal proceedings; and, secondly, a duty (grounded in section 90(1) of the Civil Procedure Act 2005 NSW and rule 36.1 of the Uniform Civil Procedure Rules 2005 NSW) to give such judgment, or to make such orders, as the nature of the case requires, whether or not a claim for relief extending to that judgment or those orders is made in originating process.

Subject to allowing the parties an opportunity to be heard as to the form of any, and all, orders to be made, I propose to dispose of the proceedings by making orders (and a reservation of liberty to apply) to the following effect:

I am not presently minded to grant any injunctive or other relief consequential upon these declarations. As presently advised, I do not regard such relief as necessary to determine all questions in controversy between the parties. Having regard to the parties’ ongoing relationship as neighbours, I am disinclined to burden their personal dealings with a risk of contempt proceedings unless a necessity for injunctive relief becomes patent.

A declaration of right implicitly carries with it a reservation of liberty to apply for consequential relief, if necessary: Royal Insurance Company Ltd v Mylius (1926) 38 CLR 477 at 497. I propose to make that entitlement to apply express. It will enable ancillary orders to be made, if necessary, to implement and give effect to (ie, “to work out”) the principal relief granted: Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201 at [50]-[51], [56], [58], [64] and [69]-[70]. It is not an invitation to fresh litigation.

One topic which the Land Board appears not to have expressly determined, and upon which the parties appear as yet to have made no express agreement, is apportionment of the burden of the ongoing cost of maintenance of their fence. If there is no agreement about this, it is a topic to which a return can be made in working out the Court’s orders.

During the course of the hearing there was a feint suggestion on the part of the plaintiff that her claim in trespass extended to a claim against the first defendant for damages for trespass to her person. That claim, if made, was not pressed in submissions. In any event, I am satisfied that it lacks the requisite foundation in fact.

I will allow the parties an opportunity to be heard on the question of costs. For their assistance, I record that my preliminary view is that the appropriate order is an order that the plaintiff pay one half of the defendants’ costs of the proceedings.

Costs are within the discretion of the Court: Civil Procedure Act 2005 NSW, section 98. The general rule, subject to orders of the Court in the particular case, is that costs follow the event: Uniform Civil Procedure Rules 2005 NSW, rule 42.1.

The defendants have been substantially successful in opposing the relief claimed by the plaintiff, in the terms claimed. However, they cannot be said to have been wholly successful in the proceedings because, in conduct of the proceedings, each side of the record has been obliged to confront points of uncertainty about the nature of their “give and take fence”, and to have those points settled by agreement or judicial determination.

Whether the current judgment will allow, encourage or compel the parties to establish a working relationship remains to be seen. Standing apart from the fray, a cause for concern is that, in debating whether a fixed time could be agreed for the length of notice to determine the arrangement for their give and take fence, each party had a primary focus on how long it would take them, upon receipt of notice, to obtain a fresh determination (from the Local Court or NCAT) about the location of a dividing fence. Both sides have become trapped by a culture of litigation, each thinking the worst of the other and, one fears, failing to consult enlightened self-interest.

With any luck, they might find (counter intuitively) that public recognition of a defined mechanism, of their own making, for determination of their give and take fence arrangement might serve as a constant reminder to everybody of a need for reasonable accommodation (live and let live, not merely give and take) in management of their boundary, lest they all be consumed by the risks and attendant costs of ongoing litigation.

As it is, the costs of the litigation to date could long ago have dwarfed the costs of alternative, practical solutions to each side’s perceived problems. There is no guarantee that another dividing fence application would produce a radically different outcome. The present regime is not patently unfair.

The status quo, known but irritating, may exert on freedom of choice a gravitational pull not shared by an alternative world, unknown in all but risk and ruinous expense. The devil you know may be better than the one you don’t.

Final orders were made, to give effect to these reasons for judgment, on 29 May 2015.

Those orders were in substantially the same terms as contemplated in paragraphs [129] and [134], together with a declaration in the following terms:

DECLARE that, whilstever the arrangement for a give and take fence along the fence line subsists, the plaintiff (of the one part) and the defendants (of the other part) are obliged to bear, equally, the reasonable costs of any ongoing maintenance of the give and take fence.