Kalgovas & Anor v Iliopoulos & Anor

This hearing is the latest episode in a dispute between residential neighbours about a retaining wall. In 2022 Darke J handed down Kalgovas v Iliopoulos [2022] NSWSC 70 in which he resolved the substantive dispute. Darke J found that the Defendants had breached the duty of care contemplated by s 177 of the Conveyancing Act 1919 (NSW) by failing to provide support to the Plaintiffs' land. The final orders made by Darke J on 30 May 2022 are as follows:

There was no appeal from the decision of Darke J.

The subsequent performance of the mandatory injunction made by Darke J has not gone smoothly. Many iterations of plans have been prepared. Some have been lodged with (or submitted to) the Council. Others have been returned by (or effected by) the Council. Most recently, on 14 November 2025 the Council returned the latest iteration of the plans in circumstances which the Council described as “an application for development in accordance with those plans being “not lodgement ready”".

The efforts to perform the mandatory injunction have over the intervening years degenerated into a seemingly never-ending cycle of the Defendants preparing a plan, that plan being submitted to the Plaintiffs and then a process of revision which results in a new plan.

These proceedings have returned to the Court frequently since 30 May 2022, first to Darke J and then, after his Honour's retirement, to other judges. I am the fifth judge to have heard submissions in relation to the performance of the mandatory injunction. I will say something further about the history in a moment.

For current purposes I will observe that the Plaintiffs contend that the Defendants have demonstrated a lack of commitment to compliance with the mandatory injunction or at the very least a lack of ability to comply. The Defendants submit that the Plaintiffs have involved themselves in the process more than necessary, have taken some points described by the Plaintiffs as immaterial and have not been as constructive or as prompt as they might.

The current application is brought by the Plaintiffs seeking the appointment of a receiver to the Defendants' property for the limited purpose of ensuring performance of the mandatory injunction. Such an appointment is a topic about which submissions have been made in interlocutory hearings before previous judges, including Darke J himself who in September 2022 referred to the possibility of a receiver being appointed to ensure that the mandatory injunction is performed.

At the hearing of this application yesterday the Defendants brought forward a counter-application by which they sought from the Court more specific orders to progress their own performance of the mandatory injunction. That application was heard at the same time and will also be resolved by the orders I will make today.

It is important to appreciate that the events between Darke J making the mandatory injunction on 30 May 2022 and yesterday’s hearing are relevant. I accept the Plaintiffs' submission that they are matters to take into account in deciding the matters before the Court in this hearing. There is no application in relation to contempt, although noncompliance with the orders of the Court is a grave matter, and ultimately there can be no question that it is the Defendants' responsibility to perform the mandatory injunction.

Without detracting in any way from those matters, there is some context which is relevant. The mandatory injunction requires the Defendants to construct a retaining wall which has certain features at, but not over, the boundary with the Plaintiffs' land. That task involves and is to some extent reliant upon third parties, including expert advisers and the Council.

The task also features a degree of imprecision, even where there exists a high degree of precision as was the case on 30 May 2022. A task like building a retaining wall will inevitably need a degree of flexibility. That is illustrated in this case where, in August 2023, two experts, one identified by each of the parties, expressed an opinion that work specifically contemplated by the mandatory injunction needed to be supplemented by further work for structural reasons. The Defendants correctly point out that, although at one level it is just a retaining wall, there are aspects of this particular retaining wall which involve matters of professional judgment by qualified experts.

The retaining wall performs important structural functions, located as it is on sloped land upon which the Plaintiffs' building, which is at least two stories high, is located very near to the boundary and upon the earth which the wall will have to retain. Additionally, the wall is located at the boundary but ought not cross it, which may not be a simple matter for a retaining wall.

The history over the last three-and-a-half years is relevant but only to the extent that it informs the best way forward to ensure that the Plaintiffs receive the full benefit of the original orders made by Darke J to vindicate their rights at law and as those orders have subsequently been amended from time to time. As would be clear, the Plaintiffs contend the best way forward is the appointment of a receiver. The Defendants disagree and contend that further specific orders ought to be made.

For the limited purpose I have identified, a short procedural history limited to the essential matters is as follows.

Darke J made the final orders on 30 May 2022 which are set out above. In their terms they specified time frames which were not immediately complied with by the Defendants. On 7 September 2022 the matter was relisted by the Plaintiffs. The significance of that listing before Darke J is that, on that occasion, his Honour raised the prospect of a receiver being appointed.

On either 14 September 2022 or 9 January 2023, the precise date of which does not need to be decided other than to observe that it was substantially after the mandatory injunction was ordered, the Defendants lodged a Development Application.

On 16 February 2023 the Plaintiffs served a Report by an expert which expressed a view that the plans the subject of the first Development Application did not comply with the orders.

On 17 February 2023 Peden J ordered the Defendants to respond.

On 17 March 2023 Peden J ordered the parties' respective experts to confer and express an opinion about whether the plans at that stage complied with the orders. This led to a Joint Report on 18 April 2023 which essentially expressed the view that the plans did not comply.

While there may be an argument about whether the failure to comply was material or immaterial, it was certainly sufficiently material to require an amendment. On 21 April 2023 Peden J ordered the Defendants to withdraw the first Development Application and to amend the plans.

By the amendments to Darke J's orders made on that occasion, the concept of consultation with the Plaintiffs was introduced into the orders of the Court. There then followed a lengthy process between the parties featuring consultation, critique, revision and repetition.

On 28 June 2023 the Second Plaintiff, who is an elderly woman, fell on stairs adjacent to the boundary where, in due course, the retaining wall will be built. The Second Plaintiff suffered very severe injuries. Whilst the incident is not directly relevant to the matters to be decided, it does highlight the unsatisfactory position arising from the failure of the Defendants to perform their obligation. Further work in relation to the stairs is necessary, but it makes sense for that work to follow the construction of the retaining wall.

On 30 June 2023 Hammerschlag CJ in Eq granted the Plaintiffs leave to file a Notice of Motion for the appointment of a receiver, which the Plaintiffs did on 10 July 2023. That is the Notice of Motion which is before the Court at this hearing. Events subsequent to its filing meant that, for a period, it looked like it had been overtaken by those events but it has nonetheless now been enlivened.

On 2 August 2023 a further joint Expert Report was produced in relation to plans which existed at that time. The significance of that Report is that the joint experts express the opinion that, "drawings needed to also incorporate features which, whilst deviate from the orders, were structurally necessary". As I have pointed out, that incident demonstrates the need for some flexibility in the performance of the mandatory injunction.

On 4 August 2023 Peden J made some further specific orders and, as agreement between the parties about the plans remained elusive, on 7 December 2023 Peden J made further orders for the experts of the parties to confer.

On 24 April 2024 the Defendants filed an application by which they sought a declaration that the plan which then existed complied with the orders.

On 9 May 2024 Peden J referred out the question of compliance, which resulted in a referee's Report being prepared by a suitably qualified expert on 25 September 2024. There was a lack of consensus about the adoption of that Report. In any event, the Defendants' application for a declaration did not proceed. The parties and their respective experts liaised thereafter.

On 31 March 2025 Pike J made specific orders for the furtherance of the performance of the mandatory injunction, following which there was further liaison between the parties.

On 11 April 2025 it appears that a second application for a development was lodged, although it subsequently turned out that the Defendants had included the wrong plans. There were other incidents of wrong documentation being provided by the Defendants. There were further communications between the parties throughout most of 2025.

An issue arose in September about the apparent requirement that the Plaintiffs give their consent to the Development Application which was not straightforward.

On 24 September 2025 the second Development Application was returned by the Council in circumstances where four matters were identified as being outstanding, namely:

On 26 September 2025 Pike J responded to the re-agitation of the Plaintiffs' application for the appointment of a receiver by setting down a timetable for the preparation of the hearing of the Plaintiffs' Notice of Motion filed 10 July 2023, and listing that application for hearing before me yesterday.

The Defendants submitted a third Development Application on 20 October 2025.

On 14 November 2025 Council returned that Development Application and identified four matters which were missing, namely:

The parties made competing submissions about how to characterise the history of the dispute. On each side the submissions were measured and assisted the Court to focus on the real issues and the solutions to those issues. I do, however, make the following observations.

First, as I have indicated above, the subject matter of the orders made by Darke J is not straightforward. The history shows that although the details are capable of disagreement between expert advisors, they are also capable of agreement.

Secondly, it is also I think correct to say that some aspects of the delay and difficulty would have occurred even if receivers had been appointed early in the process or, as the Plaintiffs would have it, the Defendants had taken the task forward more diligently. For example, I have referred above to the opinion of the joint experts in 2023 that further work was required. Another example relates to the site plan. Whilst the Plaintiffs submit that a site plan of the Defendants' property was always going to be required and the Defendants’ failure to provide one with the Development Application was an elementary failure on the Defendants' part, the Defendants submit that a site plan of the Plaintiffs' property was not to be expected and the requirement by the Council to have such a plan was an unusual and recent development. I do not make any particular findings about those matters, but I accept the Defendants' submission that even the best will in the world would not have prevented there being some delay.

Thirdly, and on the other hand, I observe that problems have occurred which are inexplicable if the process was being run diligently and professionally by the Defendants. For example, the Defendants did not include a site plan for their own property where the work would be carried out when the third Development Application was submitted in September 2025. Indeed, notwithstanding the response from the Council on 14 November 2025, there is no evidence of the Defendants taking any subsequent step to prepare a site plan.

Another example of inexplicable conduct by the Defendants is the lack of a laser-like focus on the importance of the boundary line between the two properties where the retaining wall is to be built. Given the litigious history and Judgment of Darke J in 2022, it is obvious that the precise location of that line in relation to the work is an important matter, but it does not appear to have received any particular attention from the Defendants.

Another example is that, since the return of the second Development Application on 24 September 2025, the immediate next steps in the process have been apparent to the Defendants. However, as at the hearing on 25 November 2025, there was no evidence of any activity on the Defendants' part to progress those matters.

Another example is that the Defendants in an Affidavit sworn on this application have nominated a builder who is not properly licensed to carry out the work required to perform the mandatory injunction. There are also instances where the Defendants have simply lodged the wrong document.

All this conduct by the Defendants has occurred under the shadow of the appointment of a receiver which, as indicated above, was first raised in September 2022 by Darke J. The Defendants have carried out their work on the Development Application with every reason to be motivated to have the mandatory injunction properly performed as soon as possible yet, even with that motivation, there are examples of a lack of diligence or attention to what is required.

The impression which I have formed from the evidence as a whole is that the Defendants have approached the performance of the mandatory injunction as people who have no real interest in the task and probably have better things to do. I find that troubling for a number of reasons. The order is made against the Defendants personally. It is their responsibility to ensure that they comply with the order. I fully accept that they regard the work as unpleasant. It will be an expensive task and have no immediate benefit to them, although it is work on their own land. Their son is acting for them in circumstances where they are both elderly. The son is not personally bound by the orders, and it may be that that he is more begrudging of the time demanded by the task.

These matters are not an excuse although it is noted that, as the application was ultimately argued yesterday, the Defendants did not seek to make any excuse by reference to their son's performance. The overall observation I make is that the Defendants' approach to the performance of the mandatory injunction has to date been ineffectual.

Fourthly, there were previously complaints about the Plaintiffs' involvement in the process being excessive, although those complaints were more muted at the hearing of this application.

Fifthly, it also needs to be recorded that the Defendants instructed their legal advisors to apologise to the Court for their failure to perform the mandatory injunction, which apology is appropriate.

Having said all that, the question is what is the best way forward?

As for the alternative of appointing a receiver, there is no dispute the Court has power to do so. It is not a conventional application of that power, but the appointment of a receiver is a measure which the Court can take to bring about performance of its own orders.

Section 67 of the Supreme Court Act 1970 (NSW) provides:

In a similar context to this case, Emmett AJA considered the scope of s 67 in Caird Seven Pty Limited v Attia (No 3) [2016] NSWSC 1452, where his Honour said:

Whilst Emmett AJA made his orders in the context of an order for specific performance, there is no reason in principle why such orders ought not also be made to enforce a mandatory injunction.

As is apparent from s 67, the Court has a discretion whether or not to appoint a receiver. Highly relevant to the exercise of that discretion is the fact that, in a case such as this, it is difficult to see some other way to enforce the mandatory injunction which has already been ordered. The Defendants cited the case of Bond Brewing Holdings Ltd v National Australia Bank Ltd [1991] VR 38 where it was made clear, if clarity be required, that in some circumstances the appointment of a receiver will be a "drastic measure". It is certainly the case that an appointment should not be made lightly and careful consideration needs to be given to whether it is just or convenient to do so before an appointment is made.

Consideration ought also be given to the overriding purpose pursuant to s 56 of the Civil Procedure Act 2005 (NSW), namely, the just, quick and cheap resolution of the real issues in the case. Although an unusual context for considering the overriding purpose, it certainly has application on the question of delay and cost, which this case illustrates may occur in proceedings where specific relief has been ordered and the Court is concerned to ensure that its orders are complied with.

Ultimately this case requires a practical assessment of the best way forward. The great problem with the appointment of a receiver is that it will be expensive. The evidence before the Court shows that the two people who have been identified to take the appointment will charge at an hourly rate which may be viewed as high. It may be accepted that their work, certainly at the outset, will be time consuming.

It is not possible to give an estimate of exactly how much it will cost, but what can be said is that there is evidence that the cost of constructing the wall will be about $60,000. In that context, I think it is fair to characterise the likely expense of the receivers as very significant.

There is some evidence about the Defendants' financial position. They are both elderly. They do not work and the property is their only real asset. However, there is no evidence about their assets beyond their real property. In circumstances where they have adduced evidence about their real assets but said nothing about their other assets, I will not approach this application on the assumption that they do not have other resources.

If a receiver is appointed, the receiver will be the agent for the Defendants and will owe them fiduciary duties.

If a receiver is appointed, the Plaintiffs may to some extent still be involved in the process of completing compliance with the mandatory injunction. In this respect, there needs immediately to be a survey of the Plaintiffs' land, which will require a degree of co-operation, although there is nothing to suggest that will not be forthcoming. The original orders made by Darke J also contemplate that the Plaintiffs will have a right periodically to inspect the works which in itself will require further involvement by the Plaintiffs.

It should also be noted that there are likely to be some further legal costs and expert fees even if the receiver is not appointed. One would hope that they will be minimised, but in circumstances where the Council is involved it is not possible to say exactly how the process will unfold from here. I do, however, consider that there is every prospect that the fact that the Plaintiffs did not seek the appointment of a receiver earlier in the process may ultimately prove to be a false economy given the obvious expense to which the parties have since been subjected. It is impossible to know, but these matters give some counterbalance to the expense of the appointment of a receiver in this case.

During the hearing attention was paid to a mortgage over the Defendants' land which is in place and which secures a loan agreement between the Defendants and a third-party lender. I consider it important that neither the appointment of the receiver nor any subsequent action by the receiver jeopardise the Defendants' position under that mortgage. It seems possible to mould the orders to ensure that that does not happen.

It should be observed that the Defendants do not consent to the appointment of the receiver and the appointment that will occur by virtue of an order of the court.

To some extent the appointment of the receiver will intrude upon the property of the Defendants, which is their home in which they live together with one of their sons, who suffers from a disability and for whom the Defendants are the carer. While that needs to be taken into account, the essential task of the receiver will be in relation to administering the construction of the retaining wall, and, in those circumstances the intrusion into the residence should be minimal.

The appointment of the receiver is in no way a measure of punishment to the Defendants, but the Defendants ultimately have a responsibility to perform the mandatory injunction and I consider that the appointment of the receiver ought be made to ensure that that occurs.

The current state of the Development Application as set out above is up to the point reached on 14 November 2025, when the Council rejected the third submission. The communication from the Council provides a degree of clarity about the next steps that are required. It is a finely-balanced question but I have come to the conclusion that the receiver ought to be appointed to ensure that the Court orders are complied with. A professional undertaking the task underpinned by whatever expert advice the receiver requires is the best way forward. In the first instance the receiver will require advice from a town planner.

In reaching my conclusion I have had regard to the stage which the process has reached. I have had particular regard to the fact that the plans for the retaining wall are now agreed. It is not a mechanical process going forward, especially as the building works still need to be performed, but it is now a task which is capable of being put into the hands of the third-party agent such as a professional receiver.

Further, the nature of the task is not completely ill-suited to performance by a third party. At the end of the day the Defendants have been ordered to undertake work which, whilst on their land, is not for their immediate benefit and enjoyment of their land, so there exists already a misalignment of interest and responsibility.

I have addressed the question of costs above, which is the main objection to the appointment of the receiver. Whilst that objection had a proper basis, I do not think it outweighs the advantages of the appointment. There are also aspects of this case which temper the prejudice from the receivers' costs. It is to be hoped that the introduction of a receiver will reduce the extent to which the parties and their professional advisers need to be involved in the future, so there may be some offsetting of the new expense. There is evidence that the named appointees consent. There is no dispute about their qualifications or eligibility.

Notwithstanding the appointment, I have also considered whether the Defendants ought be allowed one last chance to avoid the expense of a receiver, including the initial expense which will arise from the very fact of the appointment due to the necessity that the receivers become familiar with the details of the case. I have decided there ought to be one last chance. I will allow this chance by staying the orders for the appointment until 5pm on 23 December 2025.

I will further direct that any application by the Defendants for an order that the stay be extended be notified by the provision of a Notice of Motion to my Associate by 16 December 2025, which Notice of Motion is to be accompanied by an Affidavit which sets out the circumstances upon which the Defendants rely for the contention that an extension of the stay would be reasonable, and the lengths of any such extension which they say would be both reasonable and of utility in the progression of the Defendants' compliance with the mandatory injunction.

If such an application is made, and if it is not agreed by the Plaintiffs, then I will hear and decide it before 23 December, if necessary on 22 or 23 December.

The reasons why I have decided to order the stay are as follows: First, I think it is appropriate to make one final effort to avoid the expense of the receiver.

Secondly, any prejudice to the Plaintiffs from a delay in the receiver’s appointment is likely to be diminished by the time of year. It is the end of November. The receivers' first task will be to liaise with and retain a town planner and other expert advisors and then liaise with the Council. Time lost by the stay will not be as productive as, for example, time in the new year when there is a greater likelihood of the receivers, the town planners, other experts and Council officers being at their respective posts.

Thirdly, and relatedly, it is possible that the best chance to have the Development Application progress before Christmas is to leave the task in the hands of the Defendants in the hope that they will be newly-motivated and more familiar than receivers with the current position.

The reason why the stay is granted only until 23 December is that the intervening period will give the Defendants enough time to make immediate and demonstrable progress with the Development Application in the context of the specific matters itemised by the Council on 14 November 2025.

By their Notice of Motion the Defendants sought until 19 December to undertake specific tasks. No reason was disclosed in the evidence as to why that period of time is necessary or, indeed, why the specific tasks have not already been done. The timeframe contemplated by the stay will require a demonstration of progress by 16 December 2025. I consider that sufficient time in the circumstances.

Even if progress is demonstrated, it is not my intention that the stay will be extended indefinitely. By reference to a clear work plan, the Defendants will have to demonstrate that there is a reason for the stay to be extended for a particular period and the continuation of the progress during that period. It may be that on 23 December the stay will be extended for a short period with a view to a further application for an extension being made if further progress has occurred during the extension.

I should point out that it will be open to the Plaintiffs to consent to an extension of the stay if real progress is demonstrated. Resources, both the private resources of the parties and the public resources of the Court, may thereby be saved. If so, the parties will have liberty to apply by email to my Associate for an extension of the stay by consent.

The stay will be granted for the specific purpose of avoiding the receiver incurring expense to which regard ought to be had in any liaising with the receiver whilst the stay remains in place.

I am going to order that the Defendants pay the Plaintiffs' costs of both the Plaintiffs’ Notice of Motion filed 10 July 2023 and the Defendants' Notice of Motion filed 24 November 2025 on the ordinary basis. This is because, first, the two Notices of Motion ran together and the Plaintiffs succeeded. They constitute a discrete episode in this litigation warranting a discrete costs order and I am concerned that if costs are merely reserved then the discrete aspect of this application might be lost in the final determination of costs questions.

The reason the costs are ordered on the ordinary basis and not on an indemnity basis is that the relevant costs are the costs of the hearing of the application for the appointment of the receiver, not costs of the anterior matters which provoked the application. It is a fundamental principle of ordering costs that any delinquency warranting an order that they be paid on an indemnity basis arise from the way the application is conducted, and not from the anterior circumstances which provoked it. It is not submitted, and properly so, that there was any delinquency on the Defendants’ part in the conduct and hearing of these particular applications before me.

The reason I am not ordering that the costs be paid forthwith is that, even if the order were to be made, and there is probably good reason for it to be made in this case, it could not be complied with until there was either agreement or an assessment and, assuming there was no agreement, there would be a delay before any money was paid. Although it is regrettable from the perspective of the Plaintiffs who have to fund the litigation, there will be that delay in any event. It may be better ultimately for there to be a single assessment rather than a piecemeal assessment now.

On that basis I will pronounce the following orders: