Brown v Etna Developments Pty Ltd

1. [1]

   HER HONOUR: This case is a homeowner’s worst nightmare. Edmund Brown bought a house in Gosford where he lived with his partner, Irena Saric. Next door was a development site, owned by Etna Developments Pty Ltd. Initial site investigations undertaken by a geotechnical engineer revealed that excavation of the development site posed a high risk of landslide to the boundary between the two properties. The developer engaged a builder, Nutek Constructions Pty Ltd. The developer and builder did nothing to ensure the stability of the boundary, either by following the geotechnical engineer’s advice, complying with the council’s conditions of development approval or at all. Nor did the builder respect the boundary between the properties, erecting the site fence on the plaintiffs’ land and excavating beyond the boundary.

2. [2]

   Gradually, the effects of the excavation were felt by the plaintiffs, as their driveway began to tip and their power pole to tilt. The couple complained. The council applied pressure. A small landslip occurred. Little was done. Eventually, the plaintiffs’ land collapsed, trapping the plaintiffs’ motor vehicles, preventing them from accessing their home by vehicle and rendering their property virtually worthless. The plaintiffs’ property remains subject to a high risk of further instability and is expected to further deteriorate due to ground movements, which will also cause further damage to their house.

3. [3]

   The plaintiffs commenced proceedings, seeking damages for trespass and negligence to make good their land, driveway, house and carport. By the trial, the developer was in external administration and the builder had gone into liquidation. The development site had been abandoned. The remaining defendants are members of the Kalantzis family, who ran or worked for Nutek, being:

4. [4]

   In an effort to avoid confusion, I will refer to these defendants by their first names. Of these defendants, only Nick was legally represented at trial; Frank, Kon and Alex appeared in person.

Witnesses and documents

1. [5]

   The plaintiffs gave evidence and relied on the evidence of structural engineer Geoffrey Ball, geotechnical engineer David Mehan, surveyor David Armstrong, quantity surveyor Michelle Chan and valuer Angelo Konidaris. All but Mr Armstrong were cross-examined. No issues of credit arose. Mr Brown and Ms Saric were both perfectly straightforward and fair, each making reasonable concessions. Mr Ball was an impressive and fair witness, who was clearly most concerned about the dangerous state of the building site which he had monitored on behalf of the couple for some time before the collapse. Ms Chan and Mr Konidaris were knowledgeable and precise.

2. [6]

   Each of Frank, Nick, Kon and Alex gave evidence. They also relied on the evidence of structural engineer Daniel Phillips, in respect of whom no issues of credit arose.

3. [7]

   Although Frank was the sole director and shareholder of Nutek, it became readily apparent that he was a ‘puppet’ director. He had no knowledge of the affairs of the company. In the course of his evidence, Frank also said, “I’m just a bit illiterate with writing, and my signature”. He agreed, “I have a disability of a few things, yes, … not comprehending what I read.” He had difficulty comprehending particular words, “Just thinking other than talking and not acknowledging, yeah, stuff like that, yeah.” Frank did strongly present consistently with this evidence. Otherwise, Frank seemed straightforward, although he may have said on occasion what he thought he needed to say to help his family.

4. [8]

   Nick was cross-examined at length. He was an intelligent man with a keen eye to where his interests lay. Nick offered self-serving statements when the opportunity presented itself. He made snide remarks about the plaintiffs, which was hard to fathom in the circumstances. Nick accepted no wrongdoing or fault on the builder’s part. He knew plenty when it suited him and nothing when it did not. Nick was argumentative and evasive. He denied having said, “Lawyers and courts don’t worry me, they’re like cockroaches to me, and I can walk away from all of this without paying a cent”, even though the plaintiffs had videoed him in plain sight saying just that. He expressed pride when the video was shown, even though it was damning. Nick was unable to back down when caught out in a lie: see [104]. I have not accepted Nick’s evidence unless it was against his own interest or corroborated by another reliable witness or contemporaneous document.

5. [9]

   Kon was belligerent, argumentative and evasive. Kon said whatever he thought would advance his case. I have placed no weight on what Kon said, unless it was against his own interest or corroborated by another reliable witness or contemporaneous document. Having now examined all of the evidence, I accept that some of what Kon said was true.

6. [10]

   Alex was an intelligent young man who was, on occasion, evasive. Some of his evidence was unlikely, for example, that he would not have used an excavator even if requested to do so by his father. The plaintiffs accepted that Alex’s evidence was not troubled with the same difficulties as to credit or reliability as that of Frank, Nick or Kon. I agree insofar as the comparison is drawn with Nick and Kon. Nonetheless, I have approached Alex’s evidence with caution.

The developer, Kon and Nick

1. [11]

   In 2014, Etna Developments was incorporated and bought a development site in Etna Street, Gosford. Joseph (Joe) Lagan was a director of Etna Developments. Kon had known Mr Lagan for a long time, having already built three projects for him. Kon also knew the previous owner of the site. Kon introduced Mr Lagan to the development site; they met on site. As to obtaining development approval, Kon said “My brother took care of all … that side …”.

2. [12]

   Nick was a consultant for developers. He was told of the development site when the developer first purchased it. Nick appears to have had a close working relationship with Mr Lagan, “Well Joe was an elderly gentleman and he asked me to do a lot of things for him. So, and I obliged, obviously, in the position that I was in that I could help him”. As for this development, Nick said “Joe didn’t have much knowledge in regards to – a sort of project of that size was beyond his scope so … I was advising him in certain areas.”

3. [13]

   Surveyors prepared a contour and detail plan of the development site for Mr Lagan. By December 2014, architectural drawings had been prepared for a proposed development, comprising three 6-level buildings with 53 apartments, 57 undercover car spaces and 14 external car spaces. The depth of excavation was expected to be between 6 metres and 8 metres.

4. [14]

   Once the architectural drawings were to hand, geotechnical engineers were retained to undertake investigations on site. On 8 December 2014, Network Geotechnics undertook geotechnical fieldwork, drilling four boreholes and obtaining laboratory tests.

The builder

1. [15]

   In January 2015, Nutek was incorporated. Nick’s email signature described Nutek as “Builders/Project Managers” and himself as “Project Manager”. It is convenient at this juncture to consider who ran the company, specifically, whether Nick and Kon were de facto directors. This is relevant where the plaintiffs contended that Frank, Nick and Kon were personally liable as directors, either actual or de facto directors, for directing or procuring the tortious conduct of Nutek.

2. [16]

   Nick was a director and shareholder (through his company, Brokers Property Holdings Pty Ltd) of Nutek from time to time. In October 2017, Frank was appointed as a director as well. Nick said that Kon could not be a director of Nutek, as Kon was the licenced supervisor for the company. As such, there was an arrangement that Frank would be the director. As described at the outset, Frank was “a bit illiterate” and said “I have a disability of a few things”. Given Frank’s disabilities, the fact that Nick appointed Frank as a director of Nutek is troubling.

3. [17]

   In February 2018, Nick ceased to be a director of Nutek, leaving Frank as the sole director. In September 2020, Frank became the sole shareholder of Nutek but held the shares non-beneficially. In February 2021, Frank became the beneficial owner of Nutek’s issued shares. Frank did not know how many shares he owned in Nutek, nor whether he was the sole shareholder or held shares with others. He did not know whether he held his shares in the company beneficially, and did not know what that meant. Frank did not know that his shareholding in the company changed from non-beneficial to beneficially held.

4. [18]

   Whilst Frank was the sole director of Nutek, he agreed that Nick and Kon were running the show; Nick and Kon were really in charge. He agreed that Kon and Nick organised matters and let him know what was happening. Frank was not sure what the registered office of a company was, “I didn’t handle the office as much. My uncle did, Nick Kalantzis.” Nor did he have any dealings with the company at the registered office, Success Tax Professionals, “I don’t know, I didn’t handle all that”; Nick dealt with that. Frank did not know what happened to place Nutek in liquidation, nor who the liquidator was. He found out that the company was in liquidation when Nick gave him a letter. Frank had no idea what the assets of the company were, or its debts. He knew nothing about its financial affairs.

5. [19]

   Nick described himself as an employee of Nutek, where the contract of employment was verbal. (In fact, his service company rendered an invoice to Nutek for his services.) Nick said he answered to the company director, Frank, in the first instance and then to the on-site supervisor, Kon. However, as Nick was familiar with his job, “I didn’t have to be told what to do, you know, I knew.” Nick saw his primary role as contract administrator for Nutek. This involved entering into agreements, paying invoices and ensuring compliance with planning instruments. Nick liaised with SafeWork, the council and consultants engaged by the company. Nick was also on-site two to three days a week, for two to three hours in the mornings, to meet with consultants and hold site meetings.

6. [20]

   Kon said that he was a contractor, being a site supervisor working under a contract for services in the employ of Nutek. For completeness, in cross-examination Kon added, “I'm also not just a … site supervisor. I also contracted the company as well. Things that I can do that I know, I contract as well.” There were no documents which shed light on the arrangements between Kon (or Nick) and Nutek. There was no contract for services, no invoices or payslips and no banking records. I infer that Kon was working for the family company under an informal arrangement from which he expected to receive a financial benefit. Kon agreed that he controlled the structural building side of things, while Nick handled the administrative side of things.

7. [21]

   Ms Saric watched Nick and Kon over the years on the development site, “pretty much commanding works around the site.” Ms Saric said, “I’ve seen Nick and Kon, and I’ve seen [the] kids doing the job[s] as Nick and Kon would say. That is what I have seen. How they called each other, how they named each other on the paper, I did not ask for paperwork.” Ms Saric agreed that Nick never said that he was a director of Nutek, “he was acting as one, so I did not ask him to provide me any paperwork … He spoke on behalf of [the] business. He was … managing it all.”

8. [22]

   A person not formally appointed as a director of a company may still be considered a director if they act in the position of a director, or the directors of the company are accustomed to act in accordance with their instructions or wishes: s 9AC(1), Corporations Act 2001 (Cth). Whether a person fulfils the role of de facto director is a question of fact: Morley v Australian Securities and Investments Commission (2010) 274 ALR 205; [2010] NSWCA 331 at [893]. In considering this question, Ward CJ in Eq (as the President then was) summarised relevant factors to consider in In the matters of Earth Civil Australia Pty Ltd [2021] NSWSC 966 at [955]:

9. [23]

   The “vital factor” is that the de facto director “has the potentiality to control”: Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd [2010] NSWSC 233 at [230] (Young JA). See more recently Alora Davies Developments 104 Pty Ltd (In Liq) v Raphael [2024] NSWSC 547 at [84]-[91] (Black J).

10. [24]

    I am satisfied that both Nick and Kon were de facto directors of Nutek. Whilst Frank was a director, he did not run the company at all. Nick acknowledged that Frank was appointed as Kon could not be a director, given his role as a supervisor. Nick and Kon ran the company together. They did have clearly delineated areas of responsibility. Kon ran the building site. Nick ran the office and dealt with developers, consultants and regulatory authorities. Having viewed a video of a meeting between Nick and the plaintiffs on 18 September 2021, I agree that Nick clearly portrayed himself to the plaintiffs as the builder. Consistently with this, Ms Saric emailed the council after the meeting, reporting that “Nick the builder” had come to speak to them.

11. [25]

    Performing their respective roles necessarily required Nick and Kon to work together. Obviously enough, Kon could not construct a development in accordance with the developer’s specifications or the council’s conditions of approval without knowing what those requirements and conditions were, this being information largely in Nick’s domain. Likewise, Nick could not liaise with developers and council in respect of construction works without being informed by Kon as to how those works were progressing. The brothers clearly did work together, including at regular site meetings. Between them, Nick and Kon ran the company, and both acted as directors.

Geotechnical report

1. [26]

   As earlier mentioned, in December 2014, geotechnical testing was undertaken on the development site. In July 2015, the geotechnical report was completed. The geotechnical report was addressed to the developer, albeit described as “Etna St Pty Ltd”. Whether this was an error, or an earlier name used by Etna Developments, is not known. The postal address for the developer – being a PO Box in Ettalong Beach – was the same as Nutek’s address later recorded on its construction contract with the developer: see [68]. Nick had an office at Ettalong Beach. Whilst Nutek had yet to be formally engaged by the developer, the geotechnical report likely came to Nick’s attention, where he appears to have been providing consultancy services to the developer and the report was sent to his office. I so find.

2. [27]

   The proposed development then included basement construction requiring a depth of cut from 6 m to 11 m. So far as the western side of the development site was concerned – this being the boundary with the plaintiffs’ land – the geotechnical engineer observed that the site had been previously disturbed (cut). Access to the plaintiffs’ home was “via a long driveway adjoining the existing cut on the western boundary of the site”. The geotechnical engineer noted the following site features relating to slope instability:

3. [28]

   The fill was assessed to be uncontrolled, in the absence of records to the contrary. The geotechnical engineer identified possible landslide hazards to the existing slopes, including “Failure of the 25° to 45° slope along the western boundary (supporting the adjacent lands driveway).” The risk associated with this hazard was “assessed to be possible and consequence major indicating high risk.” To address this risk during construction, the geotechnical engineer advised:

4. [29]

   As Mr Phillips explained, CFA shoring is a widely used method for supporting deep excavations, offering a reliable and efficient solution for retaining soil and preventing ground collapse during construction. In CFA shoring, a continuous auger is drilled into the ground to create a vertical shaft, simultaneously removing soil and injecting concrete. This process creates a continuous wall of overlapping concrete columns, forming a sturdy shoring system that supports the surrounding soil.

5. [30]

   The geotechnical engineer recommended that design and construction be carried out in accordance with their advice, to reduce the risk of instability. In summary, the geotechnical engineer advised: (emphasis added)

6. [31]

   In August 2015, town planner Matthew Wales lodged a development application on behalf of Etna Developments. The geotechnical investigation report formed part of the documents submitted to the council.

Buying the house next door

1. [32]

   Also in August 2015, Mr Brown bought the house next door. His property is a ‘battle-axe’ block. The driveway runs uphill from Etna Street along the rear of a number of other properties, before reaching the plaintiffs’ house and carport. The boundary between the plaintiffs’ land and the development site is some 100 m long. This may be seen in the below plan and aerial photograph, where north is at the top, Mr Brown’s property is outlined in red on the left and the development site is indicated with the blue arrow on the right. (The aerial photograph was taken in November 2016, before work began on the development site.)

2. [33]

   To the south of both blocks, and uphill, is Rumbalara Reserve. As the geotechnical engineer noted in their report, “Along … parts of the southern boundary, exists a concrete drain which collects surface water runoff from the … bushlands to the south.” A development report and statement of environmental effects prepared by Mr Wales also noted:

3. [34]

   As Mr Brown described it, in heavy rain, water ran down from Rumbalara Reserve onto his property, where “a channel at the back of our property … diverts water to the side, away from the house.” This becomes relevant where the defendants contended that the landslip was caused by rainwater coming from Rumbalara Reserve, and the plaintiffs contended in response that one of the first things that the builder did was to break up the existing drainage channel.

Development approval

1. [35]

   In May 2016, Etna Developments obtained development consent to construct 55 apartments. The development was to be implemented substantially in accordance with the plans and supporting documents, including the geotechnical report. All building works were to be carried out in accordance with the Building Code of Australia. No activity was to be carried out on-site until a Construction Certificate was issued, other than site investigation for the preparation of the construction and/or implementation of environmental protection measures that were required by the consent, such as erosion control.

2. [36]

   Before a construction certificate would be issued, the developer was required to:

3. [37]

   Site works were not to commence until sediment control measures were installed in accordance with approved plans. Erosion and siltation control measures were required to be maintained during the works in respect of any part of the land where the natural surface was disturbed or earthworks were carried out.

4. [38]

   Further, the certifier was to be provided with “certification … that the structural engineer’s details have been prepared in accordance with the recommendations of the geotechnical report(s) listed as supporting documentation in this development consent”. In addition:

5. [39]

   In September 2016, an engineer prepared a dilapidation report to check on the structural conditions of the public domain prior to commencing construction. Photos were taken of the plaintiffs’ driveway, which had a “few cracks”. In January 2017, further engineering drawings were prepared. In February 2017, the geotechnical engineers attended a project meeting at the developer’s offices in Rockdale and then undertook supplementary fieldwork on site, drilling four more boreholes. Two of these boreholes were on the western boundary, being BH 7 and BH 8.

6. [40]

   In March 2017, the geotechnical engineers provided a supplementary report to the developer (still referred to as Etna St Pty Ltd) at the same Ettalong Beach PO Box as Nutek. Again, whilst Nutek had yet to be formally engaged by the developer, the supplementary report likely came to Nick’s attention where he appears to have been providing consultancy services to the developer and the report was sent to his office. I so find.

7. [41]

   The supplementary report set out the results of the further fieldwork, “in order to better assess the ground support requirements for the basement excavation”. The geotechnical engineers then understood that the depth of excavation could be up to 9 metres. Temporary excavation batter slopes were recommended, including near BH 7 and BH 8, where fill was present. The recommended temporary batter was 1.5:1.0 “if less than 2m in overburden. Contiguous piles for > 2m depth in overburden.” Further, “Any excavation deeper than 3m, and not supported with piles should be constructed with 1.5m wide benches at 3m depth intervals.”

8. [42]

   Mr Phillips explained that benching and battering is a simple and effective method for controlling the risk of ground movement and collapse. Battering a slope involves creating a step or inclined gradient, instead of a vertical cut. This method allows for better drainage, as water can flow down the stepped or inclined surfaces, preventing the buildup of hydrostatic pressure that often triggers slope failures. Overall, battering a slope provides a more stable and secure excavation environment, minimising the risk of landslips and ensuring the safety and longevity of the construction project.

9. [43]

   In addition, the geotechnical engineer advised in their supplementary report:

10. [44]

    Having reviewed the engineer’s drawings, the geotechnical engineers also noted that, for the area along the western boundary, excavation “would expose fill … This area may need contiguous piles if the recommended batters cannot be accommodated within the boundary.” The geotechnical engineers also recommended “ground movement monitoring at Etna Street and adjacent land be carried out prior to and during excavation.”

11. [45]

    The status of the supplementary geotechnical report is unclear. There is no evidence that the council modified the conditions of consent to permit construction in accordance with this report. I note that, in September 2017, a construction certificate was issued for Stage 1 for “Piling, Shoring, Excavation and Retaining Walls”. (The construction certificate was not in evidence.) I infer that the supplementary geotechnical report was commissioned in the course of obtaining a construction certificate. I also infer that the developer was permitted to construct the works in accordance with the recommendations in the supplementary report.

12. [46]

    As I read it, the supplementary geotechnical report modified the original recommendation to install CFA piles along the western boundary for any excavation. Instead, temporary excavation batter slopes could be used at specified angles, depending on the depth of overburden. Otherwise, CFA piles or benches were required. Which method to adopt was to be the subject of assessment by a geotechnical engineer.

13. [47]

    As to the geotechnical engineer’s recommendation that excavation faces be assessed during bulk excavation, Mr Phillips said it would be up to the discretion of the project engineer to liaise with the geotechnical consultant as to when these inspections would be necessary. As a precaution, the project engineer should engage the appointed geotechnical engineer before excavating fill batters on the western boundary exceeding 2 m in depth and (as happened) once stormwater discharge lines from neighbouring properties were discovered.

A rough start

1. [48]

   In August 2017, work commenced on the development site. Bushes and trees on the boundary with the plaintiffs’ land were removed. The existing drainage sump at the rear of the development site was filled in. Ms Saric saw Kon on the bulldozer, who reassured her, “Don’t you worry we are going to clean all this nicely …”. As the plaintiffs later described events in an email to their mayor, “There was a lot of excavating along the boundary of our properties and the removal of some large trees”.

2. [49]

   Mr Brown said that soon after this, a site fence was erected but entirely on his property by some 3 to 4 m. As mentioned, in September 2017, the certifier approved a construction certificate for Stage 1 for “Piling, Shoring, Excavation and Retaining Walls”. These works were undertaken on-site for several months before work ceased. It is likely that the contractor which undertook the Stage 1 works had a copy of the development approval and the construction certificate, setting out the conditions and restrictions which governed how that work could be done.

3. [50]

   Three features of these early works should be noted. First, the canal that collected water from Rumbalara Reserve was broken. Ms Saric saw Kon break up this drain, “I was standing on the corner watching him breaking those concrete things [that] were meant to scoop … up the water from the hill [and] send it towards [and] under … Etna Street … that was all crushed … and I watched Kon doing it with an excavator. I was actually standing on my side of the property chatting to him when he said he’s going to make it all nice and pretty.”

4. [51]

   Nick submitted that the plaintiffs could not rely on Ms Saric’s evidence that she saw Kon removing the drain, as it was not put to Kon: Browne v Dunn (1893) 6 R 67. Ms Saric gave this evidence in answer to cross-examination by Nick’s counsel. Kon then cross-examined Ms Saric on this evidence, putting an alternative proposition that the defendants removed the stormwater drains but installed an alternative system of drainage. (Ms Saric rejected the latter proposition.) Kon volunteered the same evidence in cross-examination. In these circumstances, it is not unfair for the plaintiffs to rely on this evidence, where Kon had an opportunity to challenge it, and put forward his alternate version of events. In the result, there was no dispute that Kon removed the existing stormwater drains.

5. [52]

   Second, Mr Brown observed that during these early works, no retaining was built, nor site drainage constructed.

6. [53]

   Third, problems were encountered with the site fill. On 6 October 2017, Nick took photographs of a great number of tyres that had been exposed on-site, after Kon had undertaken a scraping exercise to prepare for building the retaining wall on the boundary. Nick’s photograph also records the cut along the western boundary, seen behind the stockpile of tyres (where the plaintiffs’ house is in the top left corner of the photo):

7. [54]

   Mr Brown observed the discovery of tyres from his house, “They’d found tyres at various locations around the site and they’d piled them all up, they put them all in a big pile. … There was digging all over the site and they appeared to be finding tyres in different places and putting them together.” Ms Saric agreed that there was a big hill of tyres in the centre of the excavation site “before they abandoned the site in 2017, before they left.”

8. [55]

   Kon said that he only discovered the tyres four years later, on 19 September 2021. I do not accept his evidence, including because he tendered photos of tyres taken four months earlier, on 12 June 2021, in support of that fact, and where photos taken by him in March 2021 also included tyres: see [97]. What I do accept is that, on discovering a large quantity of tyres buried underground, Kon stopped work and referred the matter to Nick, who said they needed to inform the developer. Kon said he was directed by the developer to suspend work.

9. [56]

   Geotechnical engineer David Mehan said that the presence of tyres in fill suggested dumping rather than a controlled fill, and this could weaken the stability of the soil. Mr Phillips agreed that the appropriate procedure, on the discovery of tyres during excavation, would be to stop work and for the project engineer to appoint a geotechnical engineer to review and assess site conditions and provide instructions to ensure the continued stability and safety of the excavation until an appropriate alternative design solution was prepared and implemented. The geotechnical engineer should undertake further testing to determine the extent of tyres and update geotechnical reports to reflect the impact of tyres. The geotechnical engineer, structural engineer, civil engineer, architect and other stakeholders, including the council, developers and impacted neighbours, should collaborate to arrive at an alternative design solution.

10. [57]

    There is no evidence that the steps described by Mr Philips were taken. Rather, Mr Brown said that, after several months of works being performed, the site was effectively abandoned. As the plaintiffs later described events in an email to their mayor, “a building site was started next door but this ground to a halt fairly quickly.” An aerial photograph of the development site in December 2017 indicates that the site had been stripped of vegetation; tyres had been stockpiled.

11. [58]

    Kon initially agreed that he had done this work with his son Frank. He later strongly denied it, “We only did work there after the signing of the contract. Why would we go there before and do any work? … Why would we go and do work without payment before that? … I did not do work.”

12. [59]

    Nick agreed that Kon undertook the work described by the plaintiffs, “we were asked by the developer to do some preliminary works in regards to site establishment, i.e. site fencing, site sheds, temporary power, temporary water, temporary facilities, and that's what we were undertaking after the site had been cleared by a previous contractor.” Nick also acknowledged to the plaintiffs, in the video recorded on 18 September 2021, that he was working on the site “as a sub-contractor” before the construction contract was signed with Etna Developments: see [117].

13. [60]

    Given Kon’s initial acceptance that he undertook this work, Nick’s agreement that Kon did so, and the fact that Ms Saric saw Kon doing the work means that I am comfortably satisfied that he did it. The initial clearing and excavation of the development site was undertaken by Kon, with the assistance of his son Frank, and with the knowledge and involvement of Nick.

14. [61]

    There are no invoices which shed light on whether the developer was charged for this initial work by Nutek or by Kon, Frank or Nick. Both Kon and Nick said “we” undertook the preliminary works, that is, it was done collectively rather than individually. Nick then understood that Nutek might be engaged in the future to undertake building work on the site. Where Nick was presumably hoping that Nutek would be so engaged, it is likely that the early works were provided via Nutek.

15. [62]

    It is convenient to deal with the defendants’ suggestion that the development site was excavated by another contractor before they came onto the site, either in 2017 or before the building contract was signed in May 2020. Kon said that the site was excavated by another contractor, who he said was “Kings Construction.” When asked why Kon did not mention this in his affidavit, “I didn’t think it was relevant to be mentioned. Why would I mention that?” Nick said the preliminary works in 2017 were undertaken after the site had been cleared by a “previous contractor”, but did not identify the previous contractor.

16. [63]

    Four matters support a conclusion that there was no other contractor who cleared or excavated the development site after it was acquired by Etna Developments, other than Nutek. First, the plaintiffs had lived next door since October 2015 and first noticed the commencement of work on the development site in August 2017. Second, consistently with the plaintiffs’ observations, the aerial photograph of the development site taken in November 2016 indicates that clearing and excavation work had not then begun; a site shed appears to have been erected in the northeast corner of the development site: see [32]. Third, whilst the plaintiffs accepted that they were not at home every hour or day on which work was undertaken on-site, nor did they see anyone other than the defendants working on-site. Of the works done in August 2017, Ms Saric said “I have seen the whole family around the site. I was not paying attention to which one was at the excavator at the time. The trees were all gone down. It was only them.” Fourth, where Nick appears to have been providing some kind of consultancy for the developer, he was likely in a position to proffer evidence as to the identity of the “previous contractor”, but did not. Kon identified a previous contractor, but not until the witness box.

17. [64]

    I find that the early works were done by Nutek. It is likely that the builder had the development approval and construction certificate at the time, setting out the conditions and restrictions which governed how those works could be done and I so find.

18. [65]

    Every so often after the early works were abandoned, Mr Brown saw builders on-site but no work was done to progress the development. From 2017 until March 2021, Mr Brown saw Kon on the site two or three times, looking at the site, coming in and dropping things off and moving things about. Occasionally, Mr Brown approached the builders (including Frank) about the fact that the site fence was still in place on his land. He was told that the project had been delayed but they were about to start again and everything would be made right. On 28 September 2019, the plaintiffs took a video of an excavator being operated on the development site. Ms Saric said the operator was Frank. As a shrub obscures view of the operator, I cannot say from the video footage alone. The operator appears to be moving building material which was in the shape of a pallet, rather than excavating per se.

Driveway tilts

1. [66]

   In December 2019, the plaintiffs observed that the concrete slab, which formed their driveway, had moved. The slab was tipping towards the excavation. The plaintiffs called the council, and were advised to contact the certifier. On 3 December 2019, Mr Brown sent an email and photographs to the certifier:

2. [67]

   It is likely that the certifier passed on the plaintiffs’ concerns to the developer and Nutek at the time. By May 2020, Mr Brown said he started to see cracks in the walls at the eastern end of his house.

Building contract

1. [68]

   In May 2020, Etna Developments and Nutek signed a building contract. Nick undertook the negotiations with the developer. Nick said it took years to get to the stage of this contract, as the developer had issues with finance. This was the first time that Frank had signed such a contract, “That’s why I left that up to Nick Kalantzis to do.” In short, the builder agreed to construct the development for $18 million.

2. [69]

   Many of the ‘blanks’ in the building contract were left blank, in particular, the contract did not specify the building works. Nick said that the development consent and the geotechnical report referred to in that approval formed part of the contract, “They were annexures to the contract”. Nick said that Nutek was provided with the contract drawings and engineering details by the developer when they signed the building contract. (I have already found that Nick received the geotechnical reports some years earlier, and Nutek had the development consent by 2017.)

3. [70]

   Initially, Nick accepted that the builder was obliged to construct the development in accordance with the approved plans and specifications and to comply with the conditions of development approval. Nick accepted that Nutek was bound to comply with the building code, “Yes, all builders are”. While Nick acknowledged the development condition, where excavation undertaken by the builder extended below the adjoining land, he then said that, although Nutek excavated the site, “These conditions are for the developer, not us.”

4. [71]

   Nick then strongly distanced himself from the geotechnical reports that accompanied the contract, “It’s not something that I would have looked at too … much, yeah.” In the delineation of roles within the company, Nick said that Kon “would more so have looked at the reports in consultation with the structural engineer.” Although Nick had a copy of the geotechnical reports, “This document is not for Nutek. This document forms part of the structural design that’s given to the structural engineer to design the building structurally.” Nick then said of these reports, “There’s certain documents that … don’t apply to us in … the mix … just part of the developer’s paperwork that was given to us as reference. …” Nick denied that he understood that he was expected to have regard to these documents, “No, because the document is for reference to the engineer, not to me.” Nor did Nick accept that anybody reviewing the geotechnical report was on notice that there was a high risk that the driveway would collapse.

5. [72]

   Kon said that instructions were primarily relayed to him through the plans given to him by Nutek, including the survey and geotechnical reports. Kon said he was aware that the developer had obtained a geotechnical report to assess the site conditions and relied on that report and contract specifications in carrying out his duties as a labourer and excavator operator. However, Kon does not appear to have gone so far as to read the geotechnical report, “I don’t get to go as far as geotech reports. … I’m only aware of what I get handed by my engineer and my architect. … I assume they were clear … by the engineering drawings that I had, it was pretty straightforward.”

6. [73]

   Nor did Kon think it necessary to familiarise himself with the conditions of approval for the construction of the development. Kon accepted that, as the person with the building licence, he was best placed in the Kalantzis family to ensure compliance with Nutek’s obligations in respect of development applications. However, when asked whether he read the development approval attached to the building contract, Kon said “No, not really.” Whilst he accepted that it was a matter of some significance for the site supervisor to acquaint himself with the terms of the development approval, he said he was given a set of drawings, which he followed while “all that other is … in the office, all the other paperwork and DAs and all that. Nick takes care of all that”. The only thing he looked for in the conditions of consent was the permitted hours of operation of the site, “I don’t need to look at the other things.” For a builder of 40-years’ experience, Kon’s evidence was unbelievable and I do not accept it.

7. [74]

   The engineering experts agreed that the builder was obliged to follow the recommendations of the geotechnical engineer, as they had expertise in relation to the stability of the ground, whilst the builder and the structural engineer did not. Mr Phillips himself deferred to the expertise of the geotechnical engineer.

8. [75]

   Mr Phillips said that a builder would be expected to know the geotechnical report, before commencing building works, and to have regard to it in conducting those works. As Mr Phillips noted, “a geotechnical report is indispensable for site excavation, serving as a foundational document that informs critical decisions and mitigates risks throughout the construction process. By assessing the geological and soil conditions of the site, the report provides essential insights into factors such as soil stability, composition and potential hazards”. Mr Phillips considered that a competent builder would have serious regard to the risk assessment in the geotechnical report as “high risk”. Mr Phillips said that, if the builder was unable to interpret the geotechnical report, they needed to employ someone else who could make it clear.

9. [76]

   Mr Ball said that, once the builder took possession of the site, the responsibility to achieve the design outcomes lay with the contractors and individuals who carried out the works. Whilst Mr Ball accepted that, for a simple project, the structural drawings may be the only documents that the builder needs to refer to, “if it's a development of this nature, that involves 8, 9 metre deep excavation, well then the geotechnical engineer would be the man, the engineer, that the builder would be conferring with, before he hands over to the structural engineer. Such that the structural drawings would not normally contain the requirements of the geotechnical engineer.”

10. [77]

    I comfortably prefer the evidence of the experts to that of Nick or Kon. I have already found that Nick had the geotechnical reports for some time before the building contract was signed. The geotechnical reports were sent to Nutek’s office when they were available in July 2015 and March 2017. I have also found that Nutek had the conditions of development approval and the construction certificate when Nutek undertook the initial site clearing and excavation in 2017. The defendants accepted that these materials came into their possession in any event when the building contract was signed in May 2020.

11. [78]

    Where Nick liaised with consultants as part of his role, and appears to have been involved in commissioning the geotechnical reports, I do not accept that he did not look at the reports or thought they were irrelevant to Nutek. Where Nick’s area of responsibility was ensuring compliance with planning instruments and liaising with council, nor did I accept that he considered that the conditions of development consent did not apply to the builder undertaking the construction on behalf of a developer. Nor do I accept Kon’s evidence that he did not think it necessary to familiarise himself with the geotechnical reports or the conditions of development approval.

12. [79]

    By these documents, Nick and Kon (and Nutek) were on notice that the risk of a landslide along the western boundary was “assessed to be possible and consequence major indicating high risk”. To address this risk, either CFA piles had to be installed prior to excavation or, failing that, temporary batters and benches had to be constructed under the supervision of a geotechnical engineer. Further, the work was to be undertaken in conformity with the conditions of development approval, which were directed to minimising erosion and sedimentation and addressing the natural watercourse and stormwater flows along the western boundary.

Complaints to council

1. [80]

   In August 2020, it rained heavily. As the drain running from Rumbalara Reserve had been removed, run-off from the reserve gushed past the boundary of the plaintiffs’ property, generally following where the drain used to be. As Ms Saric put it, “the rain just literally freefalls now.” The plaintiffs contacted NSW Fair Trading, who advised them to contact the council again. On 8 September 2020, the plaintiffs emailed their local mayor, describing the buildings works which had been undertaken and their efforts to raise the problems being experienced on their property with those responsible for the development:

2. [81]

   On 22 September 2020, the plaintiffs followed up the mayor, “We understand you are very busy, but unfortunately this is very urgent. We are expecting spring rains to start any day now and our property is in a serious danger from damaging even more than it is”. The council sent a Development Control Officer to inspect. On 10 November 2020, Mr Brown followed up the Mayor’s office again and was contacted by a development control officer, Mark Jennett, who advised that he was investigating their concerns. Where an administrator had then been appointed to the council, the couple also followed up the administrator, “the building site is abandoned for over 4 years and we had a poor response wherever we enquired”.

Another start

1. [82]

   On 14 October 2020, an engineer inspected the site and prepared another dilapidation report. Cracks in the plaintiffs’ driveway were again noted. The engineer was Hossein Rahimi of Structural Holdings Pty Ltd, being a structural engineer.

2. [83]

   In January 2021, work recommenced at the development site, with more excavation, rock breaking and soil removal, including along the western boundary. Frank said he went to the site in January 2021, when excavation work was going on at the boundary between the development site and the plaintiffs’ land. Soil was being dug out using a digger in order to construct a retaining wall. On 16 January 2021, Alex said his company entered into an oral contract with Nutek to remove material from the development site to off-site locations. His job involved hammering the rock in the middle of the site and then loading trucks to take the material off-site.

3. [84]

   On 18 January 2021, Ms Saric emailed the council, “There’s a bit of activity on the building site next door, but they seem to be just working at the front of the site and not addressing the drainage or driveway issues. I was wondering if an inspector has been out yet to look at the damage to our driveway?”. The Development Control Officer replied, “I did attend the site last week … Unfortunately the owners are not very forthcoming with council and things are taking longer than they should”.

4. [85]

   On 28 January 2021, Nutek obtained insurance in respect of the project, albeit the policy did not cover public liability or “Vibration, Weakening or the Removal of Support”.

‘Structural Statement’

1. [86]

   On 11 February 2021, Mr Rahimi issued a “Structural Statement” in respect of the development as follows:

2. [87]

   Whilst Nick said that Mr Rahimi was the developer’s original engineer, I can find no mention of Mr Rahimi in the documents before the dilapidation report of October 2020. The precise status of the Structural Statement is unclear. The statement is addressed to no one. The instructions given to Mr Rahimi, which elicited the Structural Statement, are not known. Nor is the information on which Mr Rahimi relied.

3. [88]

   On one view of it, it may be inferred that both the insurance and Structural Statement were obtained in response to council’s recent attendance on site in respect of the plaintiffs’ complaints. Having regard to the timing of the issue of the statement, Mr Ball said, “I can see that that could be a stopgap measure just to fulfill a query or a complaint of a neighbour”. Mr Phillips agreed, “I can see it’s almost like someone’s flagged, someone’s gone down and inspected it, you can continue work and kind of move past that.”

4. [89]

   On another view of it, the Structural Statement may be seen as an attempt to fulfill the requirements of the supplementary geotechnical report. Two problems emerge in this regard. First, Mr Rahimi was not a geotechnical engineer, although Mr Phillips said “I can’t speak to the engineer that signed this off, but if he’s signing it off he obviously feels like he’s confident enough to take on a role almost like a geotech”. Second, the Structural Statement does not refer to the supplementary geotechnical report or squarely address its requirements. Mr Ball said, “it’s certainly not a document that would support the requirements of the geotechnical report, which is … ongoing monitoring … of temporary bulk works.”

5. [90]

   But Nick and Kon relied on the Structural Statement as effectively complying with, or absolving them from compliance with, the geotechnical report or supplementary geotechnical report. Nick said he understood from the Structural Statement that the driveway and the land beneath it was stable without a retaining wall, “That’s why we undertook the works.” Nick said that the effect of the Structural Statement was “that there was no risk … How was I supposed to know that it was a serious risk when I had a report from an engineer saying that there wasn’t?”.

6. [91]

   That was not what the Structural Statement said. The Structural Statement simply confirmed that the “current” state of the excavation was stable for “temporary construction stage”. The experts were unclear on what “temporary construction stage” meant. On its face, the Structural Statement contained no ongoing assurance as to the stability of the site if further excavation work was undertaken such that the “current state” changed. As Mr Ball put it, “It’d be out of date virtually the next day.”

7. [92]

   By this time, Mr Brown had noticed an increase to the damage to his property. The window in the living room now rattled when the front door was closed. He noticed cracks in the internal gyprock sheets at the eastern end of his home. There were also slight gaps appearing in the panels of the roof eaves at that end of the house. The slabs in the driveway were noticeably tipping further towards the development site.

8. [93]

   In March 2021, Kon thought it would be a good idea to purchase the plaintiffs’ house. On 1 March 2021, Kon approached the plaintiffs, who were open to this idea. On 3 March 2021, the plaintiffs discussed the matter further with Kon and Nick at their home. Mr Brown offered to sell the house for $670,000. Kon agreed with the price, but said he left it for Nick and the developer to finalise any sale.

Power pole slumps

1. [94]

   As Mr Ball described it, about 30 metres along the driveway from Etna Street towards the plaintiffs’ home, “the slope of the ground increased significantly … that’s about the steepest part of the site. That’s where the deepest excavations have taken place.” A power pole was on the plaintiffs’ land at this point, near the boundary with the development site.

2. [95]

   On 19 March 2021, Mr Brown saw the power pole looking precarious. Some of the soil around the base of the pole had been washed away. The concrete foundation was visible. There was a slight tilt towards the excavation. Mr Brown sent Kon a text message and photos, “There’s been a bit of a collapse overnight, could you send someone to shore it up? The concrete base for the supply pole is exposed”.

3. [96]

   Although Kon initially said “I never got the text”, he did reply to it, advising that he would be there shortly. He attended at site and took a photograph from the development site looking up towards the plaintiffs’ house. The earth underneath their driveway and surrounding the power pole has slid down the embankment, taking the site fence with it. (A stormwater pipe from the neighbouring properties can also be seen on the right hand side of the photograph.)

4. [97]

   Kon arranged for fill from the development site to be moved into the void. The site fencing was put back together. He took a photograph after this had been done. Evident in both the ‘before’ and ‘after’ photograph are old tyres. The landslip revealed that the tyres already encountered on the development site in 2017 continued in the fill underneath the plaintiffs’ driveway.

5. [98]

   Ausgrid disconnected the electricity supply, leaving the plaintiffs without power. Although Ausgrid provided a portable generator to the couple, this broke down the next day. The plaintiffs bought a small camping stove to heat their meals. After a week without power, a new pole was erected on the other side of the plaintiffs’ driveway. Nick told Mr Brown that Ausgrid had requested that the builder remove the old power pole, which it did. However, Ms Saric was later advised by Ausgrid that no order has been placed for the pole to be removed. Rather, it appears that the builder took the opportunity to re-install the power pole further away from the boundary.

6. [99]

   Nick became aware that the power pole had moved, but denied that this caused him any concern as to whether the Structural Statement might not be adequate, “Well you get minor movements on a building site all the time, I mean it’s not something that doesn’t occur you know. … it was a leaning power pole that had to be replaced.” Nick was reluctant to accept that the power pole moved as a result of the excavation. Rather, the power pole was “already on the lean, and I believe it moved a bit further … this was a fairly old pole and it was rotten, so I believe over a period of time it does move.”

7. [100]

   Kon did not accept that the power pole was leaning as a result of the excavation work either, “that post was on a lean … long before we even did anything on that site there, and I told them … all the pressure was on the wire, and if the wire snaps, somebody could get electrocuted.” Kon said he considered that the landslide was caused by a storm, “if it had substantial rain and that, well it could have moved, the grass could have moved. … the rain caused this problem here. Not our excavation.” Kon also said that this happened because of pipes coming from the adjoining houses, that drained where the power pole was.

8. [101]

   Mr Ball did not agree that the stormwater pipe caused the power pole to move as the stormwater pipe was north of the pole and the ground sloped downhill. “It would be most unlikely that the discharge from that stormwater pipe will erode the pole.” I agree. As can be seen in the previous photograph, the stormwater pipe is downhill from the power pole. It is difficult to see how water discharged through that pipe could be responsible for the movement of ground uphill from the power pole. Nor do I accept that the power pole was already “on a lean” or rotten, where the only source of this information was Nick and Kon, who were unreliable witnesses. Mr Brown was prompted to text Kon about the power pole as he noticed a change, being a slight tilt towards the excavation. I prefer Mr Brown’s evidence in this regard.

9. [102]

   What this event must have indicated to Nick and Kon was that, whatever the Structural Statement said, the stability of the “current state” of the excavation around the boundary may well have changed since 11 February 2021. Further advice was needed from a geotechnical engineer as to what measures, if any, should now be taken to preserve the integrity of the plaintiffs’ land.

10. [103]

    On 25 March 2021, Kon said he told the plaintiffs that the developer was looking into remediation measures to restore their driveway. The plaintiffs told him that they did not want to talk to him and he should go away. Mr Brown and Ms Saric denied this conversation. I prefer the plaintiffs’ evidence on this subject, particularly where they were then clearly speaking to Kon and Nick, including about buying their house.

11. [104]

    On 12 April 2021, the plaintiffs’ solicitor sent an email to Nick at Nutek, attaching a draft contract for sale of the plaintiffs’ property for $670,000. Nick said that it was he who instructed the solicitor to prepare the contract for sale on behalf of the developer. He did not depart from this evidence, even when it was pointed out that the contract had been prepared by the plaintiffs’ solicitor “obviously … that’s a mistake. … Unless they use the same solicitor”. Nick maintained that he instructed the solicitor to produce the contract for the developer and then ‘doubled down’ on the lie, suggesting that the developer instructed the solicitor to issue the contract, but as the developer was not “computer savvy”, the contract was sent to Nick to forward to the plaintiffs, “Well Joe was an elderly gentleman and he asked me to do a lot of things for him. So, and I obliged, obviously, in the position that I was in that I could help him, and so yes.” Nick said that he was often asked by Mr Lagan to speak with his solicitor, “Yes, did it on plenty of occasions.” Nick’s evidence was at odds with the contemporaneous records and he was quite unable to back down when caught out in an (immaterial) lie.

12. [105]

    On 13 April 2021, Nick forwarded the contract to “PCL Money”. On 16 April 2021, Nick forwarded his email to “PCL Money” onto the plaintiffs, presumably to confirm that he was making efforts to obtain finance. On 21 and 22 April 2021, Ms Saric followed up Nick as to “when we’ll be signing these papers please?” Nick apologised for the delay, “tomorrow I should have the paperwork for loan. We can sign next week!” On 23 April 2021, Ms Saric replied, “As per conversation with Kon this morning, Wednesday next week is plenty of time to deposit 5% of your personal money to show us you are serious …”. On 27 April 2021, Ms Saric followed up Nick again. There is no evidence of a reply.

13. [106]

    On 16 April 2021, the plaintiffs took a photograph which they described as “First collapse around excavation.” By this time, Mr Brown said the cracks in the internal gyprock of the house were quite noticeable. A gap of about 1.5 cm had opened up between the cornice and the eastern wall of the house.

14. [107]

    On 28 April 2021, the plaintiffs obtained a report from a building inspector on the state of their house. The building inspector considered that the excavation works in the adjoining development site had contributed to the damage observed, together with the removal of mature trees. The building inspector identified a number of safety issues, which required immediate rectification. In short, “there does seem to a considerable amount of movement” to the driveway and house, with resulting cracks, gaps, misalignments, leaning and subsidence. In addition, the site posed major safety concerns for the public:

15. [108]

    Later that day, Ms Saric emailed Nick, “we need to engage a lawyer to advise us what to do. He should be in touch with you.” On 5 May 2021, Ms Saric emailed Nick again, asking him to come to the couple’s home, “We should talk before any lawyers and home insurance gets involved.” Nick replied that he would do so, but does not appear to have done so.

16. [109]

    On 17 May 2021, the plaintiffs’ solicitor wrote to Nick at Nutek, providing a copy of the builder inspector’s report. The solicitor complained, “Despite multiple attempts by our client to engage in meaningful discussions with you regarding the excavation, damage to our client’s house and sale of the Premises, we are instructed that you have continually evaded our client”. The plaintiffs demanded that Nutek rectify the damage to their home as set out the report of the building inspector, move the power pole back to its original location and move the construction fence onto their property. The plaintiffs remained willing to sell the property for the earlier agreed price of $670,000. Otherwise, the plaintiffs could commence legal proceedings. There was no reply.

17. [110]

    On 2 June 2021, Ms Saric contacted engineer, Geoff Ball, as she was concerned about the safety of her home. On 6 June 2021, Mr Ball attended the plaintiffs’ property to advise on the stability of the land, home and driveway. Mr Ball was on the road taking photographs of the site, when Nick approached to prevent him from doing so. Mr Ball observed that “it is clearly evident that the land dividing [the lots] is unstable and displays areas of localised landslip.” No temporary shoring was evident. Mr Ball also observed that there were “tyres everywhere”, which appeared to have been “just pulled out of the fill”, that is, different tyres from the neat stockpile photographed in 2017. As Mr Ball later informed the NSW Building Commissioner, he then formed the view that the building works were unsafe and posed a very significant risk to the stability of the plaintiffs’ property.

18. [111]

    On 24 June 2021, the plaintiffs obtained a boundary survey from David Armstrong, who observed encroachments by the excavation works had gone beyond the boundary by some 2 metres in places.

19. [112]

    Mr Ball instructed geotechnical engineer David Mehan to carry out stability assessments of the land near the boundary, to record ground movements over a period of time. Mr Mehan undertook a ‘desk top’ study based on the publicly available reports submitted by the developer to the council. On 27 July 2021, Mr Mehan attended the site and noted that the reinforced concrete pipe which collected stormwater runoff (noted in Mr Wales’ statement of environmental effects) had been broken up and partly removed. The drainage pit and stormwater detention area was filled with mud and spoil. Mr Mehan observed that the natural ground had subsided along the boundary and moved towards the excavation, leaving a slip scarp. He observed no temporary excavation support in use as part of the excavation earthworks. Some excavated spoil had been placed against the cut on the boundary, apparently to support the excavation. Mr Mehan concluded: (emphasis in original)

20. [113]

    Mr Mehan said that if he had known that there were tyres in the soil on the plaintiffs’ land, he may have deleted “high” in paragraph 7 and just put “very high”. The presence of buried tyres would have made the risk worse. The risk classification used in reports such as this ranged from very low through five gradings up to very high, “There’s no higher grading than very high.” It is not suggested that Mr Mehan’s report was provided to the defendants at the time. His report does, however, document the state of the site.

21. [114]

    On 25 August 2021, Mr Ball wrote to the plaintiffs’ solicitor, explaining the import of Mr Mehan’s report: “a risk classification of “high to very high” is prescriptive to being subject to unpredictable and imminent collapse”. In light of Mr Mehan's report, Mr Ball was of the view that the house was not in imminent danger of collapse but did display evidence of movement. The ground forming the boundary with the excavation was “unstable, has already collapsed in part, and is in imminent danger of further collapse”. In light of this, “remedial works in the form of a piled retaining wall MUST BE undertaken immediately”.

22. [115]

    On 2 September 2021, Nick was on site wearing hi-visibility workwear. On 3 September 2021, Ms Saric emailed the council, noting that she had seen a lot of council cars coming to the site in the last few days, “I wonder if they are finally starting to listen and build a retaining wall between our properties?”. Ms Saric asked for an update, “as they simply won’t communicate with us. … We are also worried as the rain season will start in a few months so it would be wonderful to know our property will get secured from being washed off”.

23. [116]

    On 13 September 2021, the plaintiffs’ solicitor sent a letter by registered post to Frank and Nick at Nutek, and to Etna Developments, setting out the cracking being experienced at the plaintiffs’ home and driveway, and the fact that the security fencing had been placed on their driveway. Further:

24. [117]

    The plaintiffs demanded that the builder undertake remedial works in the form of a pile retaining wall within 7 days, failing which legal proceedings would ensue. Nick denied receiving this letter and also denied that the letter gave him pause as to whether the Structural Statement was wholly adequate, “It wasn’t my job to be concerned. My job was to follow instructions of my consultants and that’s what we did.” More likely the letter was received and did prompt concern, as action followed.

25. [118]

    On 14 September 2021, Nick and geotechnical engineer Richard King were on site. The appearance of Mr King is noteworthy, as it indicates that the developer and the builder realised that they needed advice from a geotechnical engineer. On 16 September 2021, Nick and Frank were on the plaintiffs’ driveway. On 18 September 2021, Nick came to the couple’s home. The plaintiffs recorded the meeting and the video was admitted over Nick’s objection: Brown v Etna Developments Pty Ltd (surveillance devices) [2025] NSWSC 218. In the meeting, the parties referred to their discussions to buy the plaintiffs’ property; Ms Saric was told by Nick, “don’t take any notice of Kon. He shot his mouth off before he engaged his brain …”. Nick offered to talk to them, “As soon as I get this bloody wall up, and they leave me alone”.

26. [119]

    Ms Saric expressed concern, “you excavated, you damaged it, and now you have to fix it”. Nick said not to worry about it, “We gotta get the wall up before we can fix anything.” Further:

27. [120]

    As already noted, Nick’s comments acknowledged that he had worked on the development site before the contract with Etna Developments was signed. The video continued. Nick acknowledged receiving the letter from the plaintiffs’ solicitors (unlike in cross examination). He advised, “As soon as we get the wall we’re going to fix it, of course, we can’t leave it like this.” Ms Saric said Nick needed to fix it now and he replied, “We can’t fix it now Irena. You can’t – how you going to fix it? Where are we going to shore it to? Where’s it going to sit? Where’s the footing gonna sit?” As Nick gestured on the video, he acknowledged that land on the boundary between the two properties was no longer there.

28. [121]

    The video continued. Nick said he would do the retaining wall then renew the driveway. The couple asked why the area had not been supported before excavation began. Nick proffered various explanations as to why that had not been done including “It’s all rock. You can’t drive piles into rock.” He acknowledged their complaint: “If I was the owner here, I’d be pissed too. Believe me …”. Mr Brown complained that the builder was damaging their property and Nick replied, “Mate, this was already damaged before. … We didn’t cause this damage. It hasn’t moved.” Mr Brown asked whether Nick had had a survey done “like a Geotech survey” and Nick replied “Nah, no, no … It might have been a little bit of movement, but it’s not going anywhere else.” Nick suggested that the builder would erect the wall and then he would come and “see youse about doing something.” As I understood it, he was referring to the negotiations to buy their property. In cross examination, Nick begrudgingly acknowledged that the plaintiffs then had concerns, “As I said, we provided the adequate documentation to prove them wrong … that was their concern, not mine.”

29. [122]

    On 19 September 2021, Ms Saric reported to the council that “Nick the builder” had come to speak to them and said they would start the retaining wall the next day. Otherwise, Ms Saric reported that the builder continued to work on the eastern side of the site, excavating and hammering. On 20 September 2021, the council replied, having spoken to Nick and the engineer, presumably Mr King. The council officer advised:

30. [123]

    It would appear that, by this point in time, the developer and builder knew that work needed to be undertaken to stabilise the western boundary, and had obtained an engineering design from Mr King to do so. This was, of course, four years after the early works in 2017 and nine months after resumption of work in January 2021. On 21 September 2021, Ms Saric updated the council that the builder had yet to start on the retaining wall but was continuing to work elsewhere on the site, “I’m really sorry, they will not do what they are told.”

Retaining wall

1. [124]

   On 23 September 2021, work began on a retaining wall. However, work began at the Etna Street end of the block rather than near the plaintiffs’ home. It should not be thought that the builder was constructing the retaining wall intended to secure the stability of the boundary. Rather, Kon said the retaining wall that he was working on was two metres away from the boundary and formed part of the basement carpark wall. There was another retaining wall that was to be built later on the boundary, but Kon said that could not be built until later. It was the second retaining wall that was intended to prevent the plaintiffs’ land from collapsing into the development site, but Kon said that it was not necessary to build that wall yet “because it was on solid ground there. … Because you have to do the first one first, before you do that one. … It was never built, but it gets built in the end.” Kon said he thought the boundary “was never unstable.”

2. [125]

   Mr Ball agreed that it was stable where Kon was working on the retaining wall at the Etna Street end, but came unstable near the plaintiffs’ home, at the power pole. Further, Mr Ball said, “but if you are stating that there is to be another retaining wall constructed actually on the boundary, well, then that one should have been constructed first. … When you try and excavate … then you don’t support the ground, the ground falls in … which is exactly what happened.”

3. [126]

   On 25 September 2021, the plaintiffs videoed “Alex excavating below us”.

4. [127]

   Mr Brown said that Alex was digging up rocks and depositing them in a truck. This was not the only occasion on which he saw Alex doing digging work at or near the boundary with the plaintiffs’ property. On 13 October 2021, Alex was again photographed on site.

Driveway collapse

1. [128]

   The rainfall in November 2021 was 190 mm, which was the highest recorded monthly average. Mr Phillips agreed, however, that this was not the highest recorded rainfall in any given month with, for example, 467 mm of rain in March 2021.

2. [129]

   On 23 November 2021, Ms Saric reported to the council that, despite the various orders issued by the council, “Nutek builders … continued excavation as soon as you or their safe work Geotech inspector would leave the site”. Further:

3. [130]

   At 2.55 pm on Friday, 26 November 2021, Ms Saric called Mr Ball and told him that a further significant ground movement had occurred and asked that he attend the site. Mr Ball came directly and confirmed that significant landslip had occurred, and that further landslip was likely in view of forecasted rain. As Mr Ball recalled it, “the concrete driveway components had not collapsed down the embankment but … they had moved to an extent that he couldn’t walk on them, and they looked and were dangerous … pitched at angles of 30 degrees or more and disjointed.” SafeWork NSW and council officers soon visited.

4. [131]

   On Sunday afternoon, 28 November 2021, Mr Ball attended the site again and confirmed that very significant further landslip and occurred over the weekend. Mr Ball took the following photograph, where the plaintiffs’ home and carport is at the top left:

5. [132]

   Mr Ball said the driveway fell some seven metres onto the development site, “the concrete sections of the driveway had actually slipped down the embankment, some 6 or 8 metres down”. Mr Brown could not drive his work car or two motorbikes off the property; the vehicles remained trapped:

6. [133]

   Someone moved the site fence to isolate the plaintiffs’ driveway from the house. At its closest point, the site fence was now 1.5 m from the house, where it remained. There was also a noticeable depression in the grass in front of the plaintiffs’ home.

7. [134]

   Nick was reluctant to accept that there was a partial collapse of the driveway, preferring to describe it as a “movement” in the driveway. Nor did he accept that this was a serious matter, “We’re talking about an area that’s five metres wide, so I don’t believe that to be serious.” Nick said this collapse had nothing to do with the builder but was caused by “a one-in-100-year storm event, the worst on record. That had a huge factor in it. The wall was constructed. The work stopped because of the rain. And unfortunately part of that section which was full of tyres, that section collapsed. There's - it's not no - it's no one's fault.” Nor did he accept that the driveway became impassable: although Mr Brown could not get his vehicle out, there was “plenty of room” on the side of the driveway to drive around it.

8. [135]

   Kon said that “In my eyes there was no collapse there. Whatever we have dug didn’t collapse. It come from the top. It got washed down. The tyres and all the sludge come from underneath their driveway. … My material did not collapse.” Kon said “this slip happened because of the tyres that were buried underneath the driveway on their property … and with a 100-year storm that we had, which caused all this.” Kon said there were car parts and car chassis with gearboxes that came from underneath the plaintiffs’ property.

What caused the collapse?

1. [136]

   Mr Ball considered that the excavation work as carried out by Nutek directly caused damage to the plaintiffs’ land, including instability and partial collapse of the land, damage to and partial collapse of the driveway, and damage to the house and carport. The natural slope of the land, prior to excavation, was approximately 7° and included a natural watercourse entering the property from Rumbalara Reserve. It was clearly evident from the approved plans that the construction would involve very extensive earthworks, including excavation around the boundaries to depths of up to and exceeding 8 m. The development consent foreshadowed the need for safety, requiring the erection of a 2 m high security fence prior to commencement of construction. The conditions also required erosion and sedimentation control measures to be implemented prior to the commencement of any works. To his observation, none of these measures had been implemented, prior to the commencement of construction and excavation or since.

2. [137]

   Mr Ball considered that it was incumbent on the parties involved in the construction of the Class 2 Building on the development site to ensure compliance with the conditions of development approval and National Construction Code - Volume One. Nutek did not carry out excavation work in accordance with either. No precautionary measures to protect the integrity and stability of the boundary were in place at any time when he visited the site. In Mr Ball’s view, the correct and only procedure to be adopted when undertaking the construction of this development was to construct appropriate siltation and erosion control measures to control stormwater and prevent sediment from washing into the council drainage system and natural waterways and to construct an appropriate retaining system along the boundaries, suitable to fully support the adjoining land and prevent ground movement when excavation was undertaken. Failure to implement these measures led to the siltation of the waterways and the instability and partial collapse of the plaintiffs’ land.

3. [138]

   Mr Phillips was tellingly silent as to the extent to which the excavation of the development site contributed to the landslip. Rather, he focused on other factors which may have contributed to what happened, being heavy rain, uncontrolled stormwater and the presence of tyres in the subsoil. Much of Mr Phillips’ opinions on these factors fell away when one considers what the experts did agree on.

4. [139]

   First, Mr Ball agreed that it was likely that there were more tyres under the plaintiffs’ land, but probably not under their house. The likely location of tyres could be seen in a depression which has formed in the plaintiffs’ front lawn. The experts agreed, however, that while ever the tyres were confined or contained in position on the plaintiffs’ land, they would not have any great effect on the stability of the ground, other than minor long-term settlement or compression as the surrounding soils migrated and filled up the void of the tyres. This would not create any lateral instability of the ground. The problem arose when the support was removed at the western boundary, which then allowed the tyres and the ground to move.

5. [140]

   Second, the experts agreed that, if the builder has followed proper procedure, then the tyres under the plaintiffs’ land would have been identified and addressed much earlier, preventing what happened. As Mr Ball put it, if the builder had followed the proper procedures when tyres were first discovered on the development site in 2017, then tyres would not have been “discovered” beneath the plaintiffs’ driveway in March 2021, when the power pole slumped. Rather, the tyres would have been known to exist and appropriate works would have been carried out to prevent the plaintiffs’ land moving at all.

6. [141]

   Third, the experts agreed that, if the CFA piles had been in place, then the collapse probably would not have occurred. Mr Phillips initially considered that CFA piling may not have prevented the landslide as CFA piling would inhibit neighbouring stormwater from being discharged freely, causing excessive moisture to accumulate beneath and around the driveway, saturating the inadequate sub-base and ultimately resulting in driveway subsidence. However, he ultimately agreed with Mr Ball that any problems with a continuous CFA wall would be dealt with by establishing drainage for the wall, called a ‘tanking wall’. A structural engineer would incorporate this into the design of the CFA piles. Further, the experts agreed that, if the builder had begun to install CFA piles, then they would likely have encountered tyres in the fill along the western boundary. More geotechnical investigation would then have needed to be undertaken. Additional or different steps would then have needed to be taken to prevent slippage.

7. [142]

   Turning to the points on which the experts did not agree, Mr Ball noted that the house was some 45 years old and of lightweight construction. Given the extent of the excavation works carried out, the proximity and depth contiguous with the common boundary and the resulting vibration of rock hammer use over more than four years, it could not be credibly argued that the excavation works had not further exacerbated the movement of the house, beyond the magnitude expected for long-term settlement of shallow strip footings under usual circumstances.

8. [143]

   Mr Phillips accepted that the driveway and carport were affected by landslip but did not accept that the same could be said for the plaintiffs’ home. Mr Phillips considered that the damage to the house could not be solely due to the excavation works but inadequate stormwater management controls. He considered that the house fell outside the Zone of Influence (ZOI) of the excavation works. In determining the ZOI, he drew a 45 degree line from the base of the cut up to the surface; the house fell outside that line. This rule of thumb was used where it was stable ground. Mr Phillips agreed, however, that the soil was in fill material, then the line would decrease and turn into a 60 degree line. Mr Phillips did not say whether, in applying that line, the ZOI included the plaintiffs’ home.

9. [144]

   Mr Ball said the corner of the house was within 9 m of the boundary, which would be just within the ZOI, on the understanding that there were no tyres or fill or loose material within that zone. Otherwise the ZOI could extend and not commence until such time as one struck stable ground. If there was unstable ground with buried tyres and the like, then the ZOI would get even flatter and extending to 2:1 or even 3:1, depending on what was there. A 1.5:1 ZOI would extend under the eastern end of the house, while a 2:1 ZOI would extend halfway under the house.

10. [145]

    Where the material near the plaintiffs’ home does appear to have included uncontrolled fill, including tyres, I consider that a 60 degree line is more appropriate. Mr Phillips agreed that his views on the ZOI would be affected if, on occasion, the house vibrated as if there was an earthquake. The plaintiffs described such an event, which I accept occurred: see [185]. I am satisfied that the house was within the ZOI of the excavations, and affected by the excavations and landslips in the manner documented in the plaintiffs’ expert reports.

11. [146]

    The next point of disagreement between the experts was the extent to which the landslip was caused by water flows onto the site. Mr Phillips considered that, given the high rainfalls experienced in November 2021, rainwater from Rumbalara Reserve was “uncontrolled” and infiltrated the soil profile under the house, following subterranean watercourses and a ‘weaker’ soil profile that contained tyres. This ‘weaker’ soil layer under the driveway failed, causing a localised landslip event. Mr Ball considered that the existence of water under the plaintiffs’ house was caused by a roof gutter, which overflowed in moderate to severe storms, overflowing onto the pavement and running directly into the ventilation openings in the brickwork. Water from the Rumbalara Reserve was collected in a council drainage pipe of significant diameter and piped to Etna Street stormwater system.

12. [147]

    Where the builder broke up the existing drainage from Rumbalara Reserve on the commencement of works in 2017, I do not think it can be said that any resulting flooding of the plaintiffs’ property was other than caused by the builder. While Mr Ball identified a problem with the plaintiffs’ roof gutter, which overflowed in severe storms, it is difficult to see how this would have made any material contribution to what happened or, more importantly, that an overflowing roof gutter caused the landslide. Neither expert suggested that it did.

13. [148]

    I am comfortably satisfied that the collapse of the land on the western boundary was caused by excavation on the development site. Mr Phillips did not suggest otherwise. The risk of such a landslide was clearly identified in the geotechnical report and reflected in the conditions of development approval.

14. [149]

    Whilst Nick accepted that the geotechnical engineer had suggested a course of action that needed to be undertaken prior to excavation, and he knew what CFA piles were, he agreed that the course of action was not followed on the site “because it wasn’t designed for that to happen”. When asked what was actually done to protect and support the driveway, in accordance with this condition of consent, Nick said “Well, there was nothing done, because there was a structural engineer certificate to say that we didn’t have to do anything, it was stable.”

15. [150]

    I take this to be a reference to the Structural Statement. Whatever assurance the builder took from that statement must surely have been overtaken by the landslip at the power pole, the report of the building inspector supplied on 17 May 2021, the views of Mr Ball conveyed on 13 September 2021 and council’s sustained efforts to persuade the builder to construct the retaining wall on the western boundary rather than focus on development activities on other parts of the site.

16. [151]

    The works were not conducted substantially in accordance with the geotechnical report of July 2015 or the supplementary geotechnical report. CFA piles were not installed along the western boundary, either prior to excavation or at all. No temporary batters and benches were installed under the guidance of a geotechnical engineer. Nor were the works carried out in accordance with the Building Code of Australia. Sediment control measures do not appear to have been installed or maintained. Where the excavation on the development site was to a level below the base of the footings of the plaintiffs’ home and driveway, no steps were taken to support the home or driveway from possible damage from the excavation or to underpin the house, driveway or works where necessary, to prevent any such damage. The conditions of development approval were observed in the breach.

17. [152]

    In short, the collapse of the plaintiffs’ land and the related damage to their house, carport and driveway were caused by the excavation on the development site and the lack of any measures taken to protect the plaintiffs’ land, notwithstanding clear indications to the developer and builder that such measures were needed.

Who did the excavation?

1. [153]

   It is necessary to determine the extent of each defendant’s involvement in the excavation. Kon accepted that he did the excavation work. Frank, Nick and Alex variously said they could not, or did not, operate the excavator at all. The defendants also suggested that there were other persons excavating on the site.

2. [154]

   I have already found that there was no other contractor who cleared or excavated the development site after it was acquired by Etna Developments, other than Nutek. As to whether there were other contractors excavating the site when work resumed in 2021, Nick denied that the only people who understood excavation work were members of the Kalantzis family, albeit he had not identified anybody else in his evidence, “I didn’t think it was appropriate … if you want me to name them now, I can.”

3. [155]

   Mr Brown did not observe anyone other than the defendants operating excavators on-site. Mr Brown agreed that he was generally at work during site hours, but was at home when he had a workday off each fortnight. Mr Brown said the builders were often working when he got home and worked Saturdays and sometimes Sundays as well. Whilst Mr Brown agreed that he could not be sure that there were other people on the site whilst he was at work, “I could say that over … longer than a year, that I only observed those four”. Mr Brown said it was not uncommon for there to be more than one digging machine on-site being used at any one time by one or more of Frank, Nick, Kon and Alex.

4. [156]

   Ms Saric was home more often, as she changed her working hours so that she did not leave home until 9.30 am on workdays “In order to be there for them every morning”. She also reduced the days she travelled to Sydney for work to two to three days a week, “to be at home as much as possible”. Ms Saric said “I was there every single day in the morning for them to start.” Ms Saric said that although other people visited the site, including the council, police and SafeWork NSW, “all I would see is them working … it was only ever four of them”. Ms Saric said “I have watched the same family since 2017 knocking trees down with the bulldozers, it’s the same people.” Ms Saric said, “I have watched Alex and Nick on excavator [in] parallel, sometimes with Kon joining, two to three excavators working at the same time”.

5. [157]

   After Mr Ball’s first attendance on-site in June 2021, and before the first collapse on 26 November 2021, Mr Ball said he saw Kon working on the excavation site, operating an excavator all over the site. He made the same observations of Nick, Alex and Frank. Mr Ball was not aware of any other workers on the site, “No, I only ever saw four.” During this period of time, he visited the site at least 20 times at the request of the plaintiffs but also drove by “probably double that amount … just to continue to monitor the conditions on the site”, when he was doing other work in the area. Mr Ball was clear that he had observed all four of the defendants operating excavating machines, “in and out of the machines as well” and, when he met all four in person on 7 December 2021, when “Frank and Alex were actually working the machines”.

6. [158]

   On 7 December 2021, Mr Ball first met Frank, Nick, Kon and Alex face to face. Mr Ball was having a site meeting with Mr King in the construction shed, “When I arrived the two younger guys were operating excavators and the two older guys met me and we went into the site shed and had some discussion. … Within minutes, I think it was Kon … went out and got the other two guys, Frank and Alex, and asked them to come into the shed while we had a meeting.” Mr Ball saw Alex and Frank moving soil, presumably to try and stabilise the slip zone, “And so you were moving material from other parts of the site … putting it in the slip zone to try and prevent further movement.”

7. [159]

   It is possible that the builder used other contractors to undertake excavation work on-site, and that those contractors escaped the notice of Ms Saric, Mr Brown and Mr Ball. Where there is no dispute that Kon ran the building site, any such contractors would likely have worked under his supervision. Further, Kon did not suggest that any such contractor undertook excavation at or near the boundary. Rather, he said that all the digging along the boundary was done by him; no other operators dug along that boundary. As such, these “other contractors” can be put to one side, as there is no reliable evidence that such contractors (if any) undertook the excavation work at or near the western boundary.

8. [160]

   Returning to which of the remaining defendants did the excavation, it is not in dispute that Kon undertook excavation work, including near the western boundary. Kon accepted this. Frank saw his father using an excavator to dig out soil near the western boundary in order to do the retaining wall. Alex agreed that he saw Kon using an excavator to dig the footings for the retaining wall in the vicinity of the boundary.

9. [161]

   As to whether Nick undertook excavation work, he denied this as he did not have a ticket to operate an excavator. Whilst Nick accepted that not everybody that operated a machine necessarily had a ticket to do so, “Well, I abide by the law, so I’m different.” Nick said “I had … some labouring work that I did, as far as securing the site, helping out where I could, if I was there. That was about it.” Alex said he saw Nick doing a bit of truck driving on-site.

10. [162]

    Against this, Mr Brown saw Nick digging all over the site and driving trucks, maybe 10 or 20 times. Mr Brown saw Nick digging along the boundary and on the plaintiffs’ side of the boundary. Ms Saric also saw Nick operating the excavator between January and November 2021. Mr Brown and Ms Saric both agreed that they did not take any photos of Nick engaged in excavation work and were relying on their memory. But Ms Saric denied that she had confused Nick with Kon, “When I see your client, I know your client, because there has been years I have just staring at them hoping they can do their jobs.”

11. [163]

    When Mr Ball looked at the excavation site from the street, he could not positively say whether it was Nick or Kon operating a machine, “I could tell that there was an elder gentleman operating this machine [or] a younger guy operating the other one.” On other occasions, Mr Ball would walk up the driveway, “I could see the guys operating the machines from there … sometimes I could identify them individually.” He saw Nick operating the excavator “maybe four or five” times, including around the landslip area, “I think I saw them all doing work up in that area … I definitely saw them, yeah.” Mr Ball agreed that it was possible that, when he thought he saw Nick, he may have been looking at Kon, as he “wasn’t making any effort to identify the operator. I was looking at the work that was being done and looking at the risk of further movement and collapse that might jeopardise the safety of my client.”

12. [164]

    Certainly, in the videos and photographs taken by the plaintiffs, Nick was wearing hi-visibility workwear and steel-capped boots. Nick looked like he had been undertaking construction work, as his garments and boots were dirty. I attach no weight to Nick’s protestation that he would not have operated an excavator as he was a law-abiding person. Where Nick was seen doing just that, by Mr Ball, Mr Brown and Ms Saric, I prefer their evidence and I am satisfied that he did undertake this work from time to time.

13. [165]

    As to whether Frank undertook excavation work, he denied ever working near the boundary. He denied operating an excavator, “I was around the machines. I was greasing … and servicing and filling up machines, yes. But I wasn’t driving, I wasn’t using them.” Frank said, “I’m only on the site just to look after fencing and safety and stuff like that.” His role was “doing traffic control and that. … Being out on the street, stop, go signs. … I did put fences up and make sure the site’s safe. … Just general builder’s labour work like I … do every day.”

14. [166]

    Against this, Mr Brown said he saw Frank many times on-site doing all sorts of work including digging with an excavator across the boundary onto the plaintiffs’ property. He saw Frank digging about 10 or 20 times. Mr Brown said that he saw Frank performing earthmoving works at or near the boundary.

15. [167]

    So far as Frank is concerned, it is clear from Mr Ball’s observations that Frank was able to operate an excavator and was doing so when Mr Ball arrived on-site on 7 December 2021. In light of this, I cannot accept Frank’s denial that he operated the excavator at all. This makes me less inclined to accept Frank’s evidence that he had nothing to do with the excavation work either. Frank was also seen by Mr Brown and Ms Saric to operate the excavator, including at the western boundary. Where both the plaintiffs were credible witnesses, I am satisfied on the balance of probabilities that Frank did operate the excavator, including on the western boundary.

16. [168]

    As to whether Alex undertook excavation work, he denied being involved in excavation on the boundary with the plaintiffs’ property. Rather, Alex was asked by Kon to run the rock breaker machine and load trucks with soil material on the opposite boundary of the development site. Alex denied that he did any digging himself, as he was there to hammer and load trucks. Alex denied that he would have undertaken excavation work if his father had asked him to, “No, I wouldn’t have done it. … because I don’t dig … I was told to hammer, and then I was told to … load trucks. That was my job.” Alex maintained that he would have refused an instruction from Kon to operate the excavator, “because that was Kon’s job. … I wouldn’t have done it. … I didn’t do any excavation-type work. I didn’t do any digging. All I did was move soil from there to there.”

17. [169]

    Against this, Mr Brown saw Alex digging with an excavator and breaking rocks. He saw Alex working all over the site, including across the boundary into the plaintiffs’ property. He saw Alex doing this 10 or 20 times. Whilst Mr Brown never spoke to Alex, his brother, father and uncle pointed him out, “That’s Alex doing the digging. That’s Alex there”. Mr Brown said he saw Alex on numerous occasions over the course of a year, “When I’ve been on my driveway I’ve seen you working right underneath it.” As to who was doing the excavation work at the time of the main collapse, Ms Saric said, “On that day of the collapse it was Alex. I watched him. I was standing right above him.”

18. [170]

    Alex’s suggestion that he would have refused to operate the excavator, even if asked by his father, was unlikely. Alex was engaged on-site to operate heavy machinery. He did use the excavator after the landslide, and so he was well able to do so. I see no reason why Alex would have refused a request by his father to operate the excavator before the landslide. Ms Saric took a photograph of Alex “excavating before us” on 25 September 2021: see [134]. Mr Brown observed Alex digging up rocks. The machine has an excavation bucket attached to it. A pile of large rocks is seen near a tip truck. Likely, Alex is using the machinery to collect the rocks and put them into the truck for removal off-site. The only thing stopping Alex from using the same machine and bucket to excavate material from the development site is his description of an immutable delineation of roles on-site. Where there is reliable evidence that Alex’s role was not so delineated, I am satisfied that he operated the excavator, including at the western boundary.

Remediation efforts

1. [171]

   What follows is largely relevant to the plaintiffs’ claim for general damages. In short, the developer and builder were unable to agree on what engineering works should be undertaken to fix the landslip, and who should pay for it. The plaintiffs were roundly abused by Kon and other workers engaged by the builder. Ultimately, both the developer and builder went into external administration.

2. [172]

   In the week following the collapse of the driveway, Mr Brown said that both Kon and Nick were on the plaintiffs’ property on several occasions. Nick told the plaintiffs that the developer was responsible but Nutek’s insurance would pay for the repair to the driveway. On 29 November 2021, Mr Ball took the liberty of contacting Mr King, who told Mr Ball that he was not aware that the builder was working anywhere near the boundary. Mr King said he was on his way up to the site that day and would call Mr Ball after he had observed what had happened and given the builder instructions as to how to handle it. Mr King prepared a report on the slip, which Nick sent to Mr Rahimi.

3. [173]

   On 1 December 2021, Mr Rahimi emailed Nick with the following instructions:

4. [174]

   Mr Rahimi said these actions needed to be taken immediately. Otherwise, he agreed with Mr King’s suggestion for permanent remediation of the slip, “We will design piles along the boundary and new suspended driveway to be supported by new piles.” Mr Rahimi advised Nick to liaise with the plaintiffs “to obtain permission for stabilising batter and explain to them the necessity of your stabilising batter as an immediate safety measure.”

5. [175]

   Nick said that on about 1 December 2021, he liaised with the plaintiffs, reassuring them that minor damage to their driveway had been noted over about a 10 m length. He told them not to worry as the developer was responsible for rectifying the damage and he would be factoring it into the work schedule. He asked for permission to access their property to undertake rectification works. The plaintiffs said, “we do not want you to do anything, get off our land you are trespassing.” Mr Brown and Ms Saric denied this conversation. I accept the plaintiffs’ evidence, where they clearly did let the builder on-site to effect remediation works at the time.

6. [176]

   On 1 December 2021, Alex was photographed operating an excavator on the site, just below the landslip area. Alex said he was asked by Kon and a representative of the lender to assist in remediating the slip area in accordance with instructions to be provided by Mr King. Mr King told Alex to dig away any wet soil and tyres in the area of the embankment where the slip had occurred and use hard rock and sandstone material from the other boundary of the site to backfill and stabilise and compact the embankment. Alex did so until Mr King was satisfied and told Alex that the backfill was sufficient, on 3 December 2021.

7. [177]

   By 3 December 2021, excavators had moved spoil from the rest of the development site to shore up the landslip area. Mr Ball inspected the site in the morning and evening and again the following day. Mr Ball also called Mr King; it appears from Mr Ball’s field notes that the engineers agreed on what needed to happen. Mr King also advised that he had not authorised the builder to undertake the filling of the slip area without his supervision.

8. [178]

   On 6 December 2021, Mr Rahimi provided Nick and Mr King with a concept scheme for shoring within the recent landslip zone. However, Kon asked Mr King not to respond to Mr Rahimi’s email. Kon hired a new engineer, Rohan Dutt, instead. Also on 6 December 2021, Mr Brown emailed the council enquiring whether they could help as they were now unable to use the driveway “and my car is trapped at the top with no way for me to get to work.” Further, the builders had said that if they were sued “we will get nothing as they have no assets”. The council arranged an inspection with the builder and geotechnical engineer the next day.

9. [179]

   On 7 December 2021, Mr King prepared a technical memorandum, setting out his site inspections on 3 and 7 December 2021, including his observations on the completed temporary stabilising works and the proposed permanent stabilising works. He recommended that prompt action be taken to expedite remediation, given that the landslip encroached on the adjoining property and had cut off driveway access. Mr Rahimi also prepared details for shoring along the western boundary. On 8 December 2021, a new engineer, Rohan Dutt, attended a meeting with Nick, Kon and Mr King. Kon asked Mr Dutt to prepare an alternate engineering design for the landslip area. Mr King also then met with Nick, Kon and developer’s representatives.

10. [180]

    On 9 December 2021, Mr King emailed Nick and Kon, seeking to clarify the position where the “outcomes from the second meeting are not clear”. Whilst both the builder and the developer wanted to remediate the landslip promptly, “There was no current … agreement on [the] landslip remediation method being designed and by which engineer and funding for the same between the developer and builder; The builder advised me … that no remediation works will commence without funding agreement with the developer or with insurers and that as a result remediation works are unlikely to commence before at least February 2022.” In these circumstances Mr King advised that he would need to visit the site to assess whether any additional temporary remedial works were required to reduce the risk of ongoing or new instability, and to access the site on a weekly basis and after any rain until permanent works could commence. In conclusion, Mr King said that a condition of his ongoing involvement, as requested by SafeWork NSW, was that all outstanding invoices be paid that day.

11. [181]

    By January 2022, revised structural details for the development had been prepared by the engineer, including a shoring plan. On 21 January 2022, Nick emailed structural shoring details prepared by the engineers to Mr Ball, who immediately replied with his comments and a request for further information on the proposed building materials and methods. Mr Ball also wrote to NSW Fair Trading, complaining that no further remedial works had been undertaken by Nutek since temporary works were done on 3 and 4 December 2021. The slip zone remained unstable and posed a very significant risk for further land movement. The builders had abandoned the site, other than for the occasional meeting attended by parties not known to the plaintiffs. Mr Ball had been unsuccessful in contacting the certifier. Where the conditions of approval for the development had required the submission of structural engineering design and a geotechnical report, there were apparently serious deficiencies in the assessment, approval and administration of these building works. Assistance was sought.

12. [182]

    On 25 January 2022, NSW Fair Trading issued a rectification order, to be complied with by 28 February 2022. On 25 January 2022, Kon was photographed operating an excavator at the boundary, with Frank nearby. Ms Saric emailed the council asking whether the builder had approval for the works then being undertaken, “I thought our structural engineer and SafeWork will need to look into a proposal before any works commence? We don’t believe they know what they are doing.” Ms Saric also complained that Kon had been shouting at her husband, telling him to “F*** Off … All the neighbours could hear the screaming.” As Mr Brown described it, Kon became irate when he enquired how long the repairs to the driveway would take and shouted “you’ll see what happens, you’ll see what you get for complaining. … F-k you, I’m f-king done with you!” A neighbour came out from his home at the noise. Kon denied this. I prefer the evidence of Mr Brown and Ms Saric to the evidence of Kon.

13. [183]

    On 10 February 2022, Kon met with a representative of the lender, developer and engineer. Minutes of meeting note that the builder had received the landslip rectification engineering drawings and had sent these to Mr Ball for approval. By 20 February 2022, Mr Dutt had prepared a work pack describing the processes and construction methodology to install shoring at the landslip area. These were provided to Nick and Kon. On 22 February 2022, the financier confirmed that the builder could order the reinforcement to carry out the works for the basement slab only. Emails continued between the financier, engineer seeking to finalise the way forward. Kon appears to have suggested, on the one hand, that the builders would not charge any additional sum for the shoring work, whilst Nick advised the financier to the contrary.

14. [184]

    On 23 February 2022, Mr Dutt sought to clarify the position, noting that he had just been informed by Mr Ball that more subsidence had taken place in the last 24 hours and the meeting was being arranged to address Mr Ball’s concerns before the design could proceed. On 1 March 2022, Mr Dutt sent Nick and Kon revised shoring drawings following a meeting on 25 February 2022. The entire design had been changed and he sought their approval before sending it to Mr Ball. Mr Dutt followed up Nick on 3 March 2022. On 3 March 2022, Mr Ball provided his comments on the structural shoring details.

15. [185]

    On 13 March 2022, the plaintiffs were at home when their house began to shake. The shaking went on for about four seconds. Mr Brown thought it was an earthquake.

16. [186]

    On 24 March 2022, Mr Dutt provided a shoring adequacy certificate, apparently confirming that the shoring plans were suitable for the landslip area. On 30 April 2022, Mr Dutt prepared a site inspection report, recommending measures which needed to be taken in the landslip area, given “the builder’s assertion that due to the unprecedented weather in the past months and the resultant swamp-like nature of the soil on the site … the construction was unable to continue.” Mr Dutt recommended that the landslip area along the western boundary be filled with backfill with batter at a particular angle to ensure stability. A suitably qualified geotechnical engineer should inspect and provide recommendations on the batter and backfill as required. The area should be regularly inspected to ensure there is no movement in the landfill area.

17. [187]

    On 12 May 2022, Mr Ball reported to the plaintiffs’ solicitor on the progress of the works which were the subject of the rectification order. Mr Ball advised that he had inspected the site four times since the order was issued and confirmed that no substantive effort had been made by the builder to commence the remedial works. The final deadline issued by NSW Fair trading for Nutek to repair the driveway was 17 May 2022. Mr Brown observed that the builders had been working on the site for many days but never attempted to repair the driveway.

18. [188]

    On 20 May 2022, Mr Dutt prepared another site inspection report for the developer, noting that backfill measures had been taken on the landfill portion. To further site stabilisation measures, the builder should continue the construction of the existing retaining wall and backfill behind that wall. Further, the excavation had left a concave landslip on the western boundary and, to stabilise the area, the builder should shotcrete the western boundary to stabilise the landslip until the builder decided to proceed with the shoring. These measures should be taken urgently and, until the site was stabilised, the builder was asked to take site pictures every day and record any movement in the excavation. A further report to similar effect was provided by Mr Dutt on 27 May 2022.

19. [189]

    On 3 June 2022, Mr Armstrong prepared a second survey of the boundary between the plaintiffs’ property and the development site, noting the partially constructed retaining wall along the western boundary but at the Etna Street end.

20. [190]

    On 22 June 2022, the builders performed further excavation works on the plaintiffs’ property, placing steel bars on the ground apparently with a view to pouring concrete. This was done without requesting access to the plaintiffs’ property and without the plaintiffs’ geotechnical engineer having seen or approved the work. Ms Saric asked the men what they were doing and who had sent them. They told her that they worked for Nick. Ms Saric said they did not have permission to work on the plaintiffs’ land or to block their driveway. They became abusive and said “I’ve had a gutful of c--ts like you. I hope your house falls into the hole.” The builder refused to leave the property and the police were called.

21. [191]

    Mr Brown said that over the next several days after 22 June 2022, he found that concrete had been poured over the steel mesh on their property when he returned home from work. He did not authorise this work to be done. On 23 June 2022, the plaintiffs’ solicitors sought an undertaking from the builder that no works would be completed on the plaintiffs’ property without their permission, as there was a concern that the builder intended to complete the concrete within the next few days without the plaintiffs’ consent. The builder’s solicitor replied that the works were undertaken in accordance with the rectification order issued by NSW Fair Trading. The plaintiffs’ solicitor replied that the time for complying with that order had long gone and the plaintiffs no longer consented to the builder accessing their property.

22. [192]

    On 24 June 2022, Mr Dutt provided the developer, Kon and Nick with the latest shoring design plans, which would be forwarded to the certifier. On 29 June 2022, Ms Saric noticed that the builder attended the property and further excavated at the end of the driveway. A concrete truck arrived. She saw them pouring concrete on her property. On 3 July 2022, Mr Dutt provided a site inspection report, repeating his earlier recommendations.

23. [193]

    On 8 July 2022, the builder attended site again and began removing the fence along the driveway without the plaintiffs’ consent. On her return from work that day, Ms Saric noticed more concrete had been poured onto the plaintiffs’ property. On 15 July 2022, by consent, Ball J restrained the developer and the builder from entering onto the property and performing work of any description without the plaintiffs’ consent.

24. [194]

    Emails continued between Mr Dutt, the financier, the developer and Nick in respect of changes to drawings for the boundary retaining walls. Dissatisfaction emerged with Mr Dutt’s work. On 29 August 2023, receivers were appointed to Etna Developments Pty Ltd. On 5 September 2023, Nutek went into liquidation. Mr Brown observed that the builder’s site cabin and equipment was removed from the development site. The drainage pump was disconnected but no attempt was made to repair the sections of the fencing along the plaintiffs’ driveway that had collapsed into the development site. Mr Brown said that work on the retaining wall only reached half way along the boundary towards the house but then ceased.

TRESPASS

1. [195]

   The plaintiffs contended that, from about 2017, the developer, either personally or by its servant and agent Nutek, together with Frank, Nick, Kon and Alex, undertook building works on the development site in such a manner as to interfere with the plaintiffs’ use and enjoyment of their land. They removed soil in and about the boundary. They removed subsoil from the plaintiffs’ land. They failed “to take any or sufficient proper steps to secure the stability of the Plaintiffs’ Land.” They trespassed on the plaintiffs’ land.

2. [196]

   The building works were said to have caused damage to the plaintiffs’ land, including cracking, dislodgement and displacement of concrete forming part of the driveway, partial collapse of the driveway rendering it unusable, cracking to the plaintiffs’ home and damage to the carport. Loss and damage was suffered, including the cost of rectifying the driveway, house and carport, and an inability to access their home.

3. [197]

   The plaintiffs submitted that each defendant performed excavation work that interfered with the plaintiffs’ use and enjoyment of their land by removing soil, failing to secure the stability of the plaintiffs’ land, and excavating beyond the boundary. The fact that there was trespass to the plaintiffs’ land was supported by Mr Ball’s unchallenged evidence that it was clear to him on his attendance that there had been excavation work beyond the boundary. To this could be added the surveys. The question was only who might have been responsible for this. Kon accepted that he had undertaken the excavation work and thus judgment should be entered against him. As to whether the other defendants also engaged in this work, the Court would comfortably rely on Mr Brown’s evidence that each of them were seen doing this work across the boundary.

4. [198]

   The defendants denied each aspect of this claim. Kon accepted that he did the excavation work but did not accept that he went over the boundary. Nick submitted that the evidence did not establish that he engaged in any act of trespass. Despite a number of witnesses providing evidence in cross-examination that Nick operated excavators on or around the boundary between January and November 2021, this was some three years after their first affidavits, which did not assert this fact. The plaintiffs had no photographs of Nick operating an excavation machine. Frank submitted that he did not undertake machine work on the site; his role was limited to traffic control maintenance of plant and machinery and general labouring work. Alex submitted that at no time did he work at or near the boundary to cause damage to the plaintiffs’ property; he only undertook remedial works from 1 to 3 December 2021 as instructed by and supervised by Mr King.

Consideration

1. [199]

   As the learned authors of Balkin & Davis Law of Torts (6th ed, 2021, LexisNexis) explain, “Intentionally or negligently entering or remaining on, or directly causing any physical matter to come in contact with, land in the possession of another without permission or otherwise without lawful authority is a trespass”: at [5.1]. The plaintiffs also relied on the summary of principles in Sappideen & Ors, Torts: Commentary and Materials (12th ed, 2016, Thomson Reuters) at [4.05]: (citations omitted)

2. [200]

   For the purposes of the tort of trespass to land, land includes the soil, subsoil and fixtures such as a house: Sappideen at [4.20].

3. [201]

   The first thing to note is that the builder does not appear to have clearly marked the boundary. Alex said “I wouldn’t even know where the boundary was. … No one’s showed me any pegs to show where the boundary was, so I don’t know if [Kon] dug past it.” As recorded in the video of 18 September 2021, Nick said “We had the pegs done the other day. …” Mr Brown replied, “Nick. You had the pegs done 6-weeks ago, and … they’re all gone. You’ve thrown them out.”

4. [202]

   The second thing to note is that there is unchallenged evidence that the excavations on the development site went beyond the boundary onto the plaintiffs’ land. Both surveys undertaken by Mr Armstrong record encroachments onto the plaintiffs’ land. Specifically, on 24 June 2021, that is, before the main landslide, Mr Armstrong observed that encroachments by the excavation works had gone beyond the boundary by some 2 metres in places. Nick denied that the survey indicated an incursion into the plaintiffs’ land but, rather, reflected the results of a land slip at the boundary. I prefer Mr Armstrong’s evidence to that of Nick, where Mr Armstrong was not required for cross-examination. Further, whilst there had been a landslip at the power pole when the first survey was undertaken, the encroachments onto the plaintiffs’ land at the northern end of the block at Etna Street, as recorded on that survey, cannot be so explained.

5. [203]

   Consistently with this, Nick acknowledged on the video on 18 September 2021 that land on the boundary between the two properties was no longer there. He agreed in cross examination that the security fence was indeed erected on the plaintiffs’ land, “Yes, well that was the only place that you would position it, you couldn’t, it wouldn’t stand up in … thin air, no.”

6. [204]

   On 3 June 2022, Mr Armstrong prepared a second survey, recording larger encroachments along the western boundary, including at the Etna Street end.

7. [205]

   I am satisfied that the builder encroached onto the plaintiffs’ land, both on the surface as recorded by Mr Armstrong and in the subsoil as shown in the photos taken along the western boundary from time to time, some of which are reproduced in this judgment.

8. [206]

   The third thing to consider is whether any of the defendants undertook this work across the boundary onto the plaintiffs’ land or subsoil. I have already found that each of Kon, Nick, Alex and Frank participated in excavation works.

9. [207]

   Kon accepted that he did the excavation work on western boundary but said that he was working on a retaining wall that was two metres away from the boundary, and so did not cross the boundary in performing that work. Against this, Mr Brown saw Kon digging around the site many times from March 2021 onwards, including on the boundary. Mr Brown said that Kon did not always remain within the boundary of the development site; he observed excavations across the boundary onto the plaintiffs’ property, including on dozens of occasions by Kon. Mr Brown also saw each of Frank, Nick and Alex on multiple occasions operating an excavator at and over the western boundary.

10. [208]

    There is reliable evidence from Mr Brown that each of the defendants were seen on multiple occasions to operate an excavator at and over the western boundary. Absent a continual video or photographic record, or continuing surveillance by the plaintiffs or Mr Ball, it is not possible to say which of Kon, Nick, Frank or Alex was operating the excavator when any piece of the plaintiffs’ land or subsoil was removed. What can be said is that each of the defendants worked together to advance the excavation of the site. Kon did the bulk of the work, supported by his sons. Kon supervised the excavation work being done by the other defendants. Nick assisted from time to time. The videos taken by the plaintiffs most clearly identify Alex as operating an excavator at the point where the landslide later occurred, and not long before it did, on 25 September 2021: see [126]. In addition, Ms Saric noted in her email to the council on 23 November 2021 that a week earlier the builders had removed the rocks placed by Kon underneath their collapsed driveway. Where it was Alex’s job to collect rocks and place them in a truck for removal off-site, it is most likely that Alex attended to this task in respect of the rocks near and underneath the plaintiff’s driveway.

11. [209]

    On the balance of probabilities, I find that each of the defendants trespassed onto the plaintiffs’ land. The builder did not clearly mark the boundary between the development site and the plaintiffs’ land. The builder passed onto the plaintiffs’ land from time to time, without the plaintiffs’ consent and, further, excavated a portion of their land as marked on the surveys. It is not a defence that they did so by mistake, if that is what happened. Mr Brown and Ms Saric clearly did not consent and, indeed, regularly complained to the council and the builder, including as recorded in the video of 18 September 2021, that the builder was encroaching on their land.

NEGLIGENCE

1. [210]

   In the alternative to the claim in trespass, the plaintiffs contended that each of the developer, Nutek, Frank, Nick, Kon and Alex owed a duty of care to the plaintiffs when undertaking the building works not to damage the plaintiffs’ land or to cause loss to the plaintiffs. In breach of that duty, the defendants were said to have undertaken the works negligently and in such a manner as to damage their land and cause loss, in the same manner as described in respect of the tort of trespass.

2. [211]

   The plaintiffs submitted the defendants were liable in negligence pursuant to s 177(2) of the Conveyancing Act, as the defendants owed a duty of care to the plaintiffs “not to do anything in relation to land that removes the support provided by the supporting land to any other land.” The developer engaged Nutek to complete the development anticipated by the development consent; Nutek was the developer’s agent. As such, the wrongful acts of the builder were the wrongful acts of the developer. The plaintiffs submitted it was incontrovertible that the construction work undertaken by the defendants caused the collapse of the driveway. Mr Ball’s expert evidence observed that the question of the tyres was irrelevant, and the driveway would have collapsed regardless due to the manner in which the works were undertaken.

3. [212]

   The defendants denied each aspect of this claim, including that they owed a duty of care. Further, all building work was said to have been undertaken on the development site in accordance with geotechnical advice. The work was conducted in a proper and workmanlike manner, in accordance with relevant standards.

4. [213]

   Nick submitted that the duty of care was affected by s 177 of the Conveyancing Act 1919 (NSW), as described by Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 at [209]. The plaintiffs must prove that Nick did something on or in relation to the property which removed the support for the land, and in doing so, failed to exercise reasonable care in doing that particular thing. The evidence did not establish that Nick operated an excavator around the landslip area. As to causation, Nick submitted that the plaintiffs must prove that the breach was a necessary condition of the harm suffered, and that it was appropriate that the defendant be held liable for the damage: s 5D, Civil Liability Act; Strong v Woolworths Ltd (2012) 246 CLR 182; [2012] HCA 5 at [20]. Nick conceded that the excavation was a necessary condition, but s 5D(1)(b) was engaged where there were a number of other factors (namely, the presence of tyres and groundwater), the extent of which was not fully known at the time of the landslip: Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19 at [23].

5. [214]

   Kon submitted that he has been a builder for over 40 years and built over 200 apartments and homes. He performed his duties with utmost professionalism at all times. He excavated the area on the western boundary to perform works in accordance with the approved plans and constructed 70% of the retaining wall along the boundary with no issue. The partial collapse of the western boundary was caused by events beyond his control, being undiscovered tyres in the subsoil and an unprecedented weather event. There was nothing he could do to prevent this occurring. Kon denied that he was negligent or liable. He followed the advice of professional consultants, whose plans and specifications he was obliged to follow.

Consideration

1. [215]

   The claim in negligence is addressed briefly in the event that I am wrong about trespass. The Civil Liability Act 2002 (NSW) applies to the plaintiffs’ claims for damages in negligence: section 5A(1). As Leeming JA (with whom Meagher JA agreed at [8]) noted in South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69 at [28]:

2. [216]

   The probability of harm pursuant to s 5B(2)(a) “falls to be assessed at the time at which a personable person in the [defendant’s] position should have taken precautions”: Tapp v Australian Bushmen’s Campdraft & Rodeo Association Limited (2022) 273 CLR 454; [2022] HCA 11 at [128].

3. [217]

   The question of causation is now guided by section 5D of the Civil Liability Act, which provides:

4. [218]

   In substance, factual causation requires the application of the ‘but-for’ test of causation: Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19 at [14]-[16]. Where there is more than one possible cause, the High Court explained in Strong v Woolworths (2012) 246 CLR 182 at [20]: (citations omitted)

5. [219]

   Section 177 of the Conveyancing Act 1919 provides:

6. [220]

   In Lym International Pty Ltd v Marcolongo [2011] NSWCA 303, Campbell JA (with whom Basten JA and Sackar J agreed) noted at [209]:

7. [221]

   Section 177 is directed to acts, and not omissions: Piling v Prynew [2008] NSWSC 118 at [62]-[63] (Macready ASJ); Cohen v Double Bay Bowling Club (No 4) [2021] NSWSC 872 at [67] (Stevenson J).

8. [222]

   The plaintiffs pleaded negligent acts and omissions. The plaintiffs’ pleading does not refer to s 177 of the Conveyancing Act and I did not understand their claim to be limited to the statutory duty of care. The plaintiffs simply pleaded that the defendants, in undertaking the building works, were under a duty of care not to damage the plaintiffs’ land or cause loss to them in respect of their land. The defendants were said to have undertaken the building works negligently, relying on the same particulars as given in respect of the claim in trespass, including that the defendants failed to take any or sufficient proper steps to secure the stability of the plaintiffs’ land.

9. [223]

   So far as the statutory duty of care is concerned, I have found that the defendants did things on the “supporting land”, being the development site. The developer commissioned Nutek to undertake excavation works on the development site. I have found that each of Kon, Nick, Alex and Frank were involved in the excavation work.

10. [224]

    There can be no doubt that the excavation work on the development site had the effect of reducing or removing the support provided by the development site to the plaintiffs’ land. On this, Mr Ball and Mr Phillips agreed. It is thus necessary to consider whether the conduct of the defendants discharged their duty of care to restore the support to Mr Brown’s land or amounted to a breach of that duty.

11. [225]

    I am satisfied that the developer and builder’s conduct in this regard was negligent and in breach of a duty of care owed by each to the plaintiffs. The fact that Nutek was not an employee does not preclude the developer from owing a duty of care to the plaintiffs in the circumstances: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16. I repeat my observations at [149]-[152]. In short, the developer and builder were on notice, through the geotechnical report, that the western boundary posed a high risk of landslide, absent CFA piling. The risk of destabilising Mr Brown’s land by the excavation works was plainly foreseeable. It was a risk that was not insignificant and reasonable persons in the position of the developer and builder would have taken further precautions against that risk: s 5B, Civil Liability Act. The further precautions that these defendants ought reasonably have taken, but failed to take, were detailed in the geotechnical reports and the conditions of development approval.

12. [226]

    When work began in 2017, no CFA piles were installed. Nor was the advice in the supplementary geotechnical report adhered to. In 2017, the developer became aware through Nutek that a substantial amount of tyres had been discovered in the site fill. Whilst work stopped for a protracted period, there is no evidence that the developer did anything with this information by, for example, arranging for the geotechnical engineer to review and assess site conditions and provide instructions to ensure the continued stability and safety of the excavation until an appropriate alternative design solution was prepared and implemented. The effects of the excavation, coupled with the absence of any steps to protect against landslide, began to have an effect on the plaintiffs’ land, driveway and house. The plaintiffs communicated their concerns, including via council officers. The developer, either directly or through its builder, did nothing to address these concerns.

13. [227]

    Little changed after the first landslip at the power pole. After emphatic communication of the plaintiffs’ fears, including Mr Ball’s opinions, the developer and builder finally took advice from a geotechnical engineer but failed to construct a retaining wall along the western boundary at the point at which it was needed.

14. [228]

    These failures amounted to breaches of the duty referred to in s 177 of the Conveyancing Act and under the common law. I have already found that these failures caused the landslide, and associated damage to the plaintiffs’ house, carport and driveway. There may have been other contributing factors, such as the amount of water which was passing over the plaintiffs’ land and the subterranean tyres. The developer’s agent, Nutek, contributed to the former problem. The developer’s lack of investigation after the discovery of tyres in 2017 also had the consequence that the continuation of the subterranean tyres from the development site onto the plaintiffs’ land was not then discovered and appropriate measures taken. I am satisfied that the damage to Mr Brown’s land, and the resulting inconvenience to both Mr Brown and Ms Saric, would not have occurred had the developer and builder not breached their duty of care: s 5D, Civil Liability Act. The developer is liable in negligence. For, essentially the same reasons, Nutek is also liable.

15. [229]

    I will examine the liability of Kon, Nick and Frank in the next section. Turning to Alex, it is not suggested that he was liable for the tortious actions of Nutek but only in his personal capacity. Alex had a statutory duty of care not to do anything that removed the support to the plaintiffs’ land: s 177, Conveyancing Act. I am satisfied on the balance of probabilities that he removed the support for the plaintiffs’ land, including near the driveway where there had been an existing landslip. The question is whether Alex’s conduct discharged his duty of care to restore the support to Mr Brown’s land or amounted to a breach of that duty.

16. [230]

    Alex said that he was not aware of any steps which needed to be taken to preserve the stability of the boundary. I accept that Kon and Nick likely did not share the geotechnical reports or conditions of development approval with Alex.

17. [231]

    Alex had been working in the building industry since he left school. Alex had been working on the development site since January 2021 from Monday to Friday, weather permitting, for a 40-hour week. The power pole slumped in March 2021. Kon arranged for fill from the development site to be moved into the void under the plaintiffs’ driveway. Whether Alex did this work for Kon is not known, but it must surely have come to Alex’s notice.

18. [232]

    On 25 September 2021 and likely on other occasions as well, Alex was operating an excavator below the plaintiffs’ driveway. As I have already noted, Alex was most likely the person who, in November 2021, removed the rocks placed by Kon underneath the collapsed driveway. This was shortly before the main landslip. Where Alex must have known that this material had been placed under the plaintiffs’ driveway in order to address an earlier landslip, it must have been very obvious that removing that material would likely result in a further landslip. It is appropriate for the scope of Alex’s liability to extend to the harm so caused, which was foreseeable at the time of the breach. I consider in these circumstances that Alex is also liable in tort for damages then sustained by Mr Brown to his land.

PERSONAL LIABILITY OF DIRECTORS

1. [233]

   The plaintiffs contended that each of Frank, Nick and Kon, in their role as a director or shadow director of Nutek, was said to have known of, been involved in, directed, procured or assumed responsibility with respect to the building works which interfered with the plaintiffs’ use and enjoyment of their land, and did so deliberately, wilfully and while having knowledge of, or being recklessly indifferent to, the likelihood of damage to the plaintiffs. If only Kon was found to have breached the boundary and committed trespass, then Frank and Nick were said to be liable for having procured him to do so. The plaintiffs likewise contended that Frank, Nick, and Kon were responsible for the negligent actions of Nutek, as either a director or shadow director of the company. (The plaintiffs accepted that Alex was not liable in tort for the actions of the builder.)

2. [234]

   The plaintiffs submitted that Kon, Nick and Frank were personally liable as directors, either actual or shadow directors, for directing or procuring the tortious conduct for which their company was liable: s 9, Corporations Act 2001 (Cth); Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd (2003) 9 VR 171 at 196-197, [85]-[90] Rextraw v Johnson [2003] NSWCA 287 at [80]-[81]; Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Limited [2010] FCA 108 (Bennett J); Microsoft Corporation v Auschina Polaris Pty Limited (1996) 71 FCR 231 at 239. As such, Frank and Nick remained liable for Kon’s actions, despite the lack of evidence proving that either Frank or Nick directed Kon to trespass on the plaintiffs’ land. If persons with authority allow a certain state of affairs to continue uninterrupted, it nevertheless amounts to procuring that state of affairs. At its lowest, the evidence demonstrated that Nick and Frank observed Kon’s conduct, and did not seek to interfere.

3. [235]

   Nick submitted that the evidence did not establish that he authorised or directed any act of trespass. Nick submitted that there was no evidence that he directed, procured or assumed responsibility for acts that removed the support for the land. He was only “the contracts coordinator and administrative consultant for the company. Kon directed, procured or assumed responsibility for the excavation works. Even if Nick was a shadow director of Nutek, this did not make him liable for the company: Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd and Others [2003] VSC 291 at [198]. Where he was an “employee” of Nutek, the employer is liable to indemnify him in respect of liability incurred by the employee for the tort: s 3(1)(b), Employee Liability Act 1991 (NSW). (I note that Nick denied that he was an employee of Nutek in his defence but, in any event, it does not advance matters where Nutek is in liquidation and in no position to indemnify him).

Consideration

1. [236]

   Where a director trespasses on land on behalf of his or her company, the director is personally liable. As Starke J explained in O’Brien v Dawson (1942) 66 CLR 18 at 32:

2. [237]

   As to whether the directors of Nutek are personally liable for torts committed by the company, directors are not personally liable for a company’s torts merely because they have general control of the company’s business: Ian Ramsay, Company Directors: Principles of Law and Corporate Governance (2nd ed, 2023, LexisNexis) at [14.8]. That said, the learned author continued at [14.11]:

3. [238]

   As Jacobson and Gordon JJ explained in Australian Securities and Investments Commission v Narain (2008) 169 FCR 211; [2008] FCAFC 120 at [94]:

4. [239]

   Where a duty of care is an element of the tort, a director will not be personally liable unless she or he can be seen to have assumed that duty: Ramsay at [4.11]. The question in each case is “whether all of the elements of the contravention are made out against the individual or whether he or she merely acted as a corporate organ, binding the company but not the person individually”, this being a question of fact: ASIC v Narain at [96]-[97].

5. [240]

   A director will also be personally liable if they direct the company to commit a tort. Much ink has been split on two divergent tests as to the circumstances in which directorial liability will arise, being the “direct or procure” test and the “making the wrongful act their own” test. In Anchorage Capital Master Offshore Ltd v Sparkes (2023) 111 NSWLR 304; [2023] NSWCA 88, the principles and authorities were extensively reviewed by Ward P, Brereton JA and Griffiths AJA, who concluded that a director’s liability in these circumstances is simply as a joint tortfeasor, where two or more persons take “concerted action to a common end” and in the course of that action any one of them commits a tort: at [275]. At [294]:

6. [241]

   The Court of Appeal in Anchorage approved of the extensive analysis of the case law by the Full Federal Court in JR Consulting & Drafting Pty Ltd v Cummings (2016) 329 ALR 625; [2016] FCAFC 20, before concluding at [295]:

7. [242]

   Similarly, an agent is jointly and severally liable with the principal for a tortious act while acting within the scope of the agent’s actual or ostensible authority. As Gino Dal Pont, Law of Agency (4th ed, 2020, LexisNexis) notes, “A tort committed by an agent constitutes a wrong to the victim, and the injury suffered is the same, whether or not the agent acted for a principal … A plaintiff may elect to sue the agent for the wrongful act, or to sue the principal if the principal is financially better able to shoulder the loss … [and] it is no answer to a claim against an agent, say in tort, that the tort was committed with the principal's authority”: at [24.8].

8. [243]

   I have already found that Nick and Kon were de facto directors of the company and, between them, ran its operations. I have paused to consider whether Frank’s disabilities affect the existence of a duty of care owed by him or the assessment as to whether he exercised reasonable care in what he did. The law of negligence is based on objective, not subjective, assessments of reasonableness and does not make an allowance for a tortfeasor’s subjective difficulties of cognition and decision-making. As the High Court explained in Allen v Chadwick (2015) 256 CLR 148; [2015] HCA 47, “A defendant who inflicts harm on another by unreasonable conduct is not excused from liability in negligence because of a reduced personal capacity for reasonable decision-making”: at [52]-[53] (French CJ, Kiefel, Bell, Keane and Gordon JJ); see likewise Carrier v Bonham [2002] 1 Qd R 174 at [470] (McMurdo P), at [487] (McPherson JA); Town of Port Hedland v Hodder (No 2) (2012) 294 ALR 315; [2012] WASCA 212 at [275] (per McLure P); at [345] (Murphy JA). Accordingly, I have made no allowance on this account.

9. [244]

   A reasonable person in the position of Nick, Kon or Frank could not have failed to be aware that the excavation work being undertaken on the development site posed a serious risk of harm to the plaintiffs’ land. As much was made plain in the geotechnical report. The risk was foreseeable and not insignificant. In the circumstances, a reasonable person in their position would have taken the precautions described in the geotechnical reports. As already canvassed at length, no steps were taken by the directors to adhere to the recommendations of the geotechnical engineer or the conditions of development approval in undertaking the excavation work. The duty of care was breached.

10. [245]

    Rather, the builder appears to have sought to ‘side-step’ the geotechnical advice by obtaining the Structural Statement. Having done so, events at the site unfolded in a manner which made it perfectly plain that the risk of landslide referred to in the geotechnical report was real and unfolding before their eyes. They still did nothing. Rather, they focussed their attention on other parts of the development site, until compelled by the council to focus on constructing the retaining wall along the western boundary. Even then, the retaining wall was constructed at the Etna Street end rather than at the point at which it was sorely needed, and where the landslide later occurred. The directors’ failure to take reasonable steps to avoid harm to the plaintiffs was a necessary condition of the occurrence of the landslide; they are each responsible for what happened.

11. [246]

    Each of the directors were engaged on a day-to-day basis in the excavation works. Nick was aware of the excavation work being undertaken, as he visited the site two to three times a week and also worked on-site from time to time himself. Frank accepted that Nick would have seen Kon undertaking excavation work, “He had to have seen it, I don’t know.” While Nick probably had less ‘hands on’ involvement in the excavation, he was fully aware of what was going on and did nothing to protect the plaintiffs’ right of support for their land. I am satisfied that each of these defendants is also personally liable as a director of the builder.

DAMAGES

1. [247]

   The plaintiffs submitted their loss was determined either by the cost of rectification at approximately $2 million or the diminution in value of the property from an estimated value of $820,000 were the driveway intact to a present value of $75,000. As the property was their residence, they are entitled to the greater of rectification costs or diminution in value, provided that rectification is not disproportionate to the diminution of value: Evans v Balog (1976) 1 NSWLR 36; Sved v Woollahra Municipal Council (1995) 86 LGERA 222 at 237; Bellgrove v Eldridge 90 CLR 613; Tabcorp v Bowen [2009] 236 CLR 272 at 288-289. Whilst the plaintiffs could sell their house and buy another, the usual analysis was that person purchased their home to live in because they wanted it. The plaintiffs accepted Mr Phillips’ cost of rectification of the carport at $5,104. To this should be added the cost of repairing the driveway (as estimated by Ms Chan), the turning bay ($61,000) and the house ($66,000).

2. [248]

   The plaintiffs submitted that general damages would be not less than $50,000 having regard to the abuse meted out by the Kalantzis family to the plaintiffs, the fact that the defendants thought they could get away with their conduct and tried to do so, and the fact that Nick treated the plaintiffs with contempt, as could be seen on the video.

3. [249]

   Nick accepted that the plaintiffs may elect between the costs of rectification and the diminution of property value, but this is subject to the qualification that the cost of rectification is not disproportionate to the diminution in value: Evans & Anor v Balog & Anor (1976) 1 NSWLR 36 at 40. The cost of rectification would be disproportionate to the diminution in value. Nick submitted that the rectification costs estimated by Ms Chan should be given no weight, where the experts agreed that additional investigation was required to determine the extent of the tyres and the extent of subsurface water that may be flowing through that area. Regarding the diminution in value to the property, Mr Konidaris estimated with the proviso that there had not been undertaken investigations into the existence of tyres, and that an adjustment (reduction) in land value of 10% may be appropriate. (This submission did not accurately state the expert’s evidence).

4. [250]

   Kon submitted that the rectification cost was excessive as he could fix the problem with 3 m3 of concrete and a few sheets of mesh, “The cost wouldn’t be more than $4,000.” But when he went back to look at it, he was told to get off the property.

Rectification

1. [251]

   As to the evidence concerning the cost of rectifying the plaintiffs’ land, Mr Ball considered that, in order to reinstate the plaintiffs’ land to the condition prior to the commencement of work on the development site by Nutek, it was necessary to construct a retaining wall along the western boundary sufficient to reinstate the right of support for the plaintiffs’ land, and to construct a new driveway providing access and extending to the carport. Mr Ball considered that until the common boundary right of support was reinstated, the plaintiffs’ property was subject to high risk of further instability, could not be redeveloped, could not be accessed by a vehicle, and would further deteriorate due to ground movements, which would cause further damage to the house.

2. [252]

   Ms Chan is a quantity surveyor. She calculated the cost of installing a piled retaining wall system along the western boundary and rectifying the existing driveway. Ms Chan undertook this task based on Mr Ball’s proposed remediation works and drawings. The estimated costs were calculated on two bases: first, that the excavated platform fill material would be disposed of at a nearby waste facility; second, that this material would be disposed of at sites within 10 km for re-use. The first option would cost $3,421,320 and the second option was estimated to cost $1,990,128. In estimating the costs of works, Ms Chan did not factor in remediation works relating to tyres in the subsoil condition, nor remediating stormwater damage. Ms Chan said that, if she took either matter into account, the estimated costs would increase.

3. [253]

   In addition, Mr Ball estimated that it would cost $66,000 to repair the house, $61,000 to repair the turning circle and $11,000 to replace the carport. Where the carport was poorly constructed, Mr Phillips considered that reinstating the structure was not appropriate. He proposed that only the carport posts and footings be replaced, being $2,320 plus GST. Mr Ball considered that the existing carport was a basic structure which would need to be replaced. The extent of the ground settlement which had impacted on the carport, whether or not caused by the excavation works, was irrelevant. In order to effect the remediation of the land, he considered that the carport would need to be demolished in any event and so he just made an allowance to replace the structure. Mr Phillips agreed that, to remediate and build the land back up, it would be necessary to demolish the carport.

4. [254]

   Mr Phillips made no recommendation for the rectification of the driveway until the impact and extent of tyres was ascertained. The plaintiffs’ driveway was not well constructed. Geotechnical investigations should be undertaken. Bulk excavations may be required and could impede further into the plaintiffs’ land in order to remove tyres and stabilise ground conditions. A civil engineer should also be engaged to provide a stormwater management plan to redivert the stormwater discharge from neighbouring properties into the drainage system on Etna Street.

5. [255]

   As to Mr Phillips comments on the driveway, Mr Ball considered that the extent of the collapse of the ground, both vertical and lateral translation, was such that any driveway, no matter how well constructed, would have been completely destroyed as a result of the excavation works carried out on the development site. Mr Ball agreed that the proper procedure had been described by Mr Phillips but “I adopted the simplest easiest cheapest way to reinstate that boundary, knowing that that would be the lowest common denominator for a cost of damages, and that the correct procedure would be, before you would actually go and do it, would be to do the investigation and, but we needed to quantify an amount, whereas Mr Phillips shied away from quantifying the amount … Whereas I, I said "Okay, I'm going to ignore the obstacles, they'll only make it dearer. I will assume that everything is okay and this is how we construct a wall", and, and then I got Ms Ch[a]n to price it on that basis. I didn't even make her aware that there were tyres or drainage issues involved. I just wanted her to quantify what I designed as a replacement wall as the cheapest lowest common denominator for a rectification cost.”

6. [256]

   The cost of rectification sought by the plaintiffs is conservative for two reasons. First, Ms Chan’s lower estimated cost of rectifying the western boundary and driveway was based on the assumption that the excavated fill could be re-used at nearby building sites. Where the fill material includes tyres, it seems unlikely that this material could be so used. More likely, the fill will need to be disposed of at a waste facility. This would bring Ms Chan’s calculations up to some $3.4 million. In addition, Ms Chan’s calculations did not factor in remediation costs referable to the tyres or stormwater damage. When these matters are taken into account, it is likely that the cost of remediation will be higher. But the plaintiffs have not sought these higher amounts. Allowing for additional repairs to the house, turning circle and carport, and taking into account Mr Phillips’ ‘quibble’ in respect of the carport, the cost of rectification is $2,122,232.

Diminution

1. [257]

   As to the evidence concerning the diminution in value of the plaintiffs’ land, Mr Konidaris valued the plaintiffs’ property in its current state, including the fact that vehicular access from Etna Street was not possible. The current market value was $75,000. If the damaged driveway was restored so that vehicular access was available, then the value would be $245,000. If the structural damage to the property, including the house, was also corrected, then the property was worth $820,000.

2. [258]

   As to whether Mr Konidaris’ figures would be affected by the presence of tyres under the soil on the plaintiffs’ land, the valuer said it would be rare for an interested purchaser to get a geotechnical report when buying a home, unless there was some particular reason to do so, “there’s the whole caveat emptor situation when you’re buying a property.” If the use of the property was unaffected by the presence of tyres under the soil, then there may be no difference in value. If the use of the site was affected, or the presence of tyres under the soil caused movement in the brickwork of the house, then that would probably have some detrimental effect, although he was unable to say how much. In that situation, someone may obtain the cost to rectify the problem and deduct that from the value with some sort of contingency.

3. [259]

   As for the pooled water and eroded water channels seen by Mr Phillips under the house, Mr Konidaris considered that any difference in value would be fairly small on this account. Given the age of the house, a lot of people would be looking to rebuild in any case, and the presence of water under the house may simply affect the timing of those renovations.

4. [260]

   The diminution in the value of Mr Brown’s house and land is $745,000, according to Mr Konidaris. I do not consider that there is any proper basis to reduce this figure further by reason of the presence of tyres under the soil, or any water which may travel under the house from time to time, for the reasons articulated by the valuer.

General damages

1. [261]

   Mr Brown is an electrician, who works as a lift mechanic. He and Ms Saric also own a business, which repairs and alters motorcycle leathers. Their business has a shop in Annandale, where Ms Saric picks up leather items that need repair. She repairs the items at home, before taking them back to Annandale for collection by the customer. The couple’s main reason for buying the Gosford house was for easier access to load and unload Ms Saric’s van than they could when living in an apartment in Sydney. The couple planned to build a garage/shed to the east of their house for Ms Saric’s home workshop. Before any of the events with which this judgment is concerned, they got a quote to construct a 60 m2 shed.

2. [262]

   Mr Brown said that he and his partner had been unable to properly enjoy the use of their property due to the site fence constructed on their land in 2017. Nor have they been able to develop their property on the boundary as they had earlier wished. The couple had been unable to construct a shed near the boundary. Since the driveway collapsed, the plaintiffs have had no vehicular access to their home. Mr Brown’s work car has been trapped in the car port. His employer had to hire a car for Mr Brown, which put some strain on their employment relationship. Nor have they been able to enjoy the use of their motorcycles, which remain trapped at the top of the property. They have to park their cars in the street, which is approximately 100 m away, and carry everything up and down the driveway. Where Ms Saric often has to carry leather materials, which can be heavy, she is now having problems with her back. Nor can visitors or tradespeople access their property by car. Twice, their vehicles have been vandalised while parked on the street.

3. [263]

   Ms Saric said that, when the site fence was erected on the plaintiffs’ land in 2017, they lost three to four metres of land on the eastern side of their home and were obliged to abandon their plans for a home workshop. Since their driveway has been destroyed, they have been unable to move their business from Annandale to Gosford, which means that Ms Saric continues to drive three hours each day and carry work materials from the roadway to the house. These materials are quite heavy, being something in the order of 7 kg per leather racing suit. The couple spend about two hours a week loading and unloading materials from her car and carrying them to and from the house. If Ms Saric was able to have a workshop at home, she could close her shop in the city and instead work with motorcycle shops with a drop off and collection system. This would save their company rent and encourage customers from the Central Coast and Newcastle to use their business for repairs and alterations.

4. [264]

   These events have caused the couple a large amount of stress over five years. They have also spent a significant amount of time consulting with council, various government departments and professional experts. They had also expended money on lawyers. Mr Brown has been unable to sell his home due to the ongoing issues with the property and the continuing damage to the driveway, carport and house.

Conclusion

1. [265]

   Damages for physical loss to the land are assessed in the same manner in trespass as for negligence. Compensatory damages are the sum which, so far as money can do, will put the plaintiff in the same position they would have been if the tort had not been committed: Haines v Bendall (1991) 172 CLR 60 at 63; [1991] HCA 15. In assessing this amount, account must be taken of what is reasonable: Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557; [2023] NSWCA 5 (Kirk JA and Griffiths AJA) at [92].

2. [266]

   Where, as here, the tortfeasor has removed the support provided for the plaintiff’s land, “the plaintiff has an election to claim as compensation the difference between the value of the land before the harm and the value after the harm, or he may claim the cost of restoration which has been or may be reasonably incurred [where] due emphasis has to be given to that word “reasonably””: Minter v Eacott (1952) 69 WN (NSW) 93 at 95 per Street CJ.

3. [267]

   In Evans v Balog [1976] 1 NSWLR 36, Samuels JA (with whom Moffitt P and Huntley JA agreed) adopted the statement of principles in McGregor on Damages (13th ed, 1972, Sweet & Maxwell), at 40:

4. [268]

   The same principle continues to be expressed in the most recent edition of James Edelman, McGregor on Damages, (22nd eds, 2024, Sweet & Maxwell) at [40-012].

5. [269]

   In Evans v Balog, the Court considered that it was reasonable for the plaintiff to elect rectification, at 40:

6. [270]

   More recently in Roberts v Goodwin Street, the Court of Appeal considered the onus which fell on the plaintiff and the tortfeasor respectively, when considering whether rectification or diminution was the appropriate measure of damage, at [119]:

7. [271]

   There is a big difference between the diminution in value of Mr Brown’s house and land, of $745,000, and the cost of rectifying the house and land, being $2,122,232. Obviously enough, Mr Brown bought an affordable and modest property. It is now effectively worthless as a result of the excavations at the development site and the resulting landslips along the western boundary, preventing access to the house other than by foot. As to whether it is reasonable to nonetheless award damages to enable Mr Brown to be put in the same position he would have been in if the tort had not been committed by the defendants, it remains the case that Mr Brown has, in effect, lost his home. Mr Brown and Ms Saric have lived in their Etna Street home since they bought the property in 2015. It was not suggested to the plaintiffs that they had a strong desire to move. They were not asked whether they had been looking around. The fact is that, since all of these events have occurred, they had not moved house.

8. [272]

   In these circumstances, I consider that this is one of those cases “where the measure of the plaintiffs’ loss is such that there is only one mode of fairly repairing it. If that turns out to be more expensive than another, the wrongdoer has no one but himself to blame”: Evans v Balog at 40. I consider that the cost of rectification is prima facie reasonable, including by reason of the fact that the damage has been done to Mr Brown’s home and where the defendants have not discharged their onus of establishing that the costs are unreasonable, either because there is no actual intent to reinstate the land or that there is such a disproportionality to the diminution of capital value that it would be unreasonable to award such costs: Roberts v Goodwin Street at [119].

9. [273]

   In respect of the claim in trespass, once a plaintiff obtains a verdict in an action for trespass, they are entitled to an award of damages, where the purpose of an action for trespass to land is not merely to compensate the plaintiff for damage to the land: Plenty v Dillon (1990) 171 CLR 635 at 654 (Gaudron & McHugh JJ). Whilst only Mr Brown is entitled to compensation to the damage to his property and improvements, both plaintiffs are entitled to general damages for trespass.

10. [274]

    As to general damages, I consider that the plaintiffs are each entitled to general damages of $50,000 to compensate them for the trespass to their land and home over a protracted period of time. The stress and inconvenience suffered by the couple was significant. Their treatment by the defendants, in particular, Nick and Kon, was both dismissive and insulting. The plaintiffs’ efforts to engage the defendants in respect of the ongoing acts of trespass were studiously ignored, until the defendants were imposed upon by the council to engage. After the landslip, the plaintiffs were roundly abused by Kon and the builder’s workers. The defendants’ actions in seeking to remediate the site then exacerbated the problem where, after a period of initial cooperation, the defendants took matters into their own hands and repeatedly came onto the plaintiffs’ land and effected works without the endorsement of Mr Ball or the plaintiffs’ consent, leading to an injunction.

APPORTIONABLE CLAIMS

1. [275]

   A number of concurrent wrongdoers were identified in the defence, of which only Structural Holdings Pty Ltd was pressed (at least, by Nick, with Frank, Kon and Alex not indicating any different position).

2. [276]

   Nick submitted that any liability should be apportioned under the Civil Liability Act: s 35(4); Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211 at [135]–[137]. The Structural Statement was prepared before the landslip and relied upon in conducting excavations. Additionally, the contract between the developer and the builder was a construction contract only. Therefore, the design team must accept a significant degree of responsibility. (This was not pleaded, and I will ignore it).

3. [277]

   Finally, Nick submitted that his fellow defendants, particularly Kon, should bear more of the blame. In doing so, Nick relied on para 12 of the Technology and Construction List Response as articulating such a claim. This was, with respect, a misreading of that paragraph. However, I have since noticed that “Konstadinos Kalantzis Sole Trader” was listed as a concurrent wrongdoer in para 11(c) of the pleading. While Nick did not press this sub-paragraph is closing submissions, in an abundance of caution, I will treat Kon as having been identified as a concurrent wrongdoer by Nick. Whilst Frank and Alex did not make any written or oral submissions on this subject, as they were self represented and had filed a common defence with Kon and Nick, I will treat them as having embraced the same submission.

4. [278]

   The plaintiffs submitted that the claim in trespass was not an apportionable claim under the Civil Liability Act as it was an intentional tort. If there was a finding that any of the defendants were liable in trespass, then they were liable for the entirety of the judgment. The plaintiffs submitted that there was no evidence that implicated any nominated concurrent wrongdoer as a joint tortfeasor. As to the concurrent wrongdoer claim in respect of Structural Holdings, the plaintiffs submitted that the letter was “thin” and, in any event, was provided before the first collapse in March 2021. That should have put the defendants on notice that the excavation work might be a problem. There is no evidence that anyone drew that to the attention of Mr Rahimi. The letter from the plaintiffs’ solicitor of 13 September 2021 set out in stark terms, and predicted with unfortunate accuracy, the very thing that occurred. There was no suggestion that the defendants raised this with anyone who might know what the builders say they did not know. In those circumstances, Mr Rahimi could not be criticised, both given the limited terms of the document and the lack of action taken in light of subsequent events.

Consideration

1. [279]

   The developer did not file a defence or seek to engage the concurrent wrongdoer provisions. Accordingly, judgment should be entered against the developer in the full amount. Proceedings against the builder are stayed by reason of its winding up.

2. [280]

   Section 5A of the Civil Liability Act provides that Part 1A will apply to “any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise”. Section 34(1)(a) of the Civil Liability Act provides that an apportionable claim is a claim for economic loss or damage to property in an action “arising from a failure to take reasonable care”. As Leeming JA explained in Paul v Cooke (2013) 85 NSWLR 167; [2013] NSWCA 311, “the effect of s 5A is that Pt 1A of the Act applies uniformly to a class of claims for damage, irrespective of how the cause of action has been formulated, so long as the damage results from a failure to exercise reasonable care and skill”: at [41].

3. [281]

   In Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187, Barrett J expressed the view that the requirement for an action to be ‘arising from a failure to take reasonable care’ would be made out where if, at the end of the trial, the evidence warrants a finding to that effect and regardless of the absence of any plea of negligence or a failure to take reasonable care: at [30]. In Perpetual Trustee Co Ltd v CTC Group Ltd (No 2) [2013] NSWCA 58, Macfarlan JA disagreed with Barrett J’s reasoning in Reinhold, suggesting that section 34(1)(a) required the failure to exercise reasonable care to be an element of the cause of action brought against the defendant: at [22]-[23]. However, Macfarlan JA’s views did not form the ratio of that case, as Barrett JA disagreed (at [37]-[38]) and Meagher JA chose not to express a view on the matter (at [36]). In Rahme v Benjamin Khoury Pty Ltd [2019] NSWCA 211; (2019) 100 NSWLR 550, however, the Court of Appeal adopted Macfarlan JA’s approach: at [135] (per Macfarlan JA, Bathurst CJ and McCallum JA agreeing).

4. [282]

   That approach was recently questioned obiter in Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232 per Stern JA and Basten AJA. However, as the law presently stands, the Civil Liability Act 2002 (NSW) does not apply to an action in trespass – where trespassory interference will generally be intentional – unless a defendant is sued for a negligent trespass. For example, in Rove Estate Pty Ltd atf Lane Cove Estate Trust v Chomp Excavations & Demolition Pty Ltd (No 3) [2023] NSWSC 274, Williams J held that s 34(1)(a) did not apply in relation to a trespass to land claim at [209]:

5. [283]

   The plaintiffs’ pleading of their claim in trespass is not entirely clear on this subject. As mentioned, the defendants are said to have undertaken building works on the development site in such a manner as to interfere with the plaintiffs’ use and enjoyment of their land. Particulars of the building work which are said to have so interfered include removal of the soil and subsoil in and about the boundary, trespassing on the plaintiffs’ land, together with “failure to take or any sufficient proper steps to secure the stability of the plaintiffs’ land.” In these circumstances, I consider that the claim in trespass is apportionable, where the failure to exercise reasonable care is an element of the cause of action brought against the defendants.

6. [284]

   No particulars were provided of the suggested failure by Structural Holdings to take reasonable care. In the absence of a proper pleading as to what Mr Rahimi or his company, Structural Holdings Pty Ltd, is supposed to have done, and little evidence as to what exactly he did, the concurrent wrongdoer claim has not been established. The Structural Statement is, indeed, a curious document. But there is no evidence as to what the engineer was asked to produce, or why, or what information the engineer was given before producing that document. As the plaintiffs submitted, the Structural Statement was overtaken by events which put the defendants on notice that further investigations needed to be undertaken to ensure that the right of support to the plaintiffs’ land was protected. Nothing was done. If anything, once Mr Rahimi was appraised of the landslide on-site, his advice was ignored and he was fired. The concurrent wrongdoer defence against Structural Holdings fails.

7. [285]

   So far as “Konstadinos Kalantzis Sole Trader” is concerned, Kon described himself as a “Sole Trader” in both of his affidavits. I have earlier concluded that Kon was working for the family company under an informal arrangement from which he expected to receive a financial benefit. However Kon was working at the time he made his affidavits, I am not satisfied that Kon was working for Nutek as an independent contractor or “Sole Trader”. He was working for the company as, effectively, a director or employee.

8. [286]

   Turning to the task of apportionment, the liability of a defendant who is a concurrent wrongdoer in relation to an apportionable claim is limited to an amount reflecting the proportion of the damage or loss that is just, having regard to the extent of their responsibility for the damage: s 35(1), Civil Liability Act. In determining the relative responsibility of concurrent wrongdoers, it is necessary to compare the blameworthiness and causative potency of the conduct of each of them: Reinhold at [50]-[52]. Factors relevant to the assessment of blameworthiness and causative potency include, but are not limited to, which of the wrongdoers was more actively engaged in the activity causing loss and which was more able effectively to prevent the loss: Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 at [93]-[97]. As Palmer J observed in Yates, the policy of Part IV is that a wrongdoer who was “in a real and pragmatic sense, more to blame for the loss than another wrongdoer should bear more of the liability".

9. [287]

   There is no doubt that Kon ran the building site. He undertook the bulk of the excavation work and supervised the excavation work of others. But I do not see him as primarily responsible for what happened. Kon does not appear to have had any particular interest in paperwork. Nick was the person in charge of the paper. Nick was in possession of the relevant reports and information, in particular, the geotechnical reports. Nick was responsible for liaising with the council. Nick was well aware of the risks identified by the geotechnical engineer and the steps which were recommended in order to ameliorate those risks.

10. [288]

    Nick was also well aware of what was happening on-site; he attended the site frequently. Nick did labouring and truck driving on site and, as I have found, excavation work as well. Nick was best placed to stop what Kon was doing, if he perceived that it was contrary to the geotechnical engineer’s advice or the conditions of development approval. Nick was also best placed to ensure that Kon took steps to comply with the geotechnical engineer’s advice or the conditions of development approval if needed.

11. [289]

    Whilst Kon was more actively engaged in the activity causing loss, in the sense that he operated the excavator and supervised excavation work by others, Nick was more effectively able to prevent the loss occurring by communicating the necessary information in the geotechnical report and the conditions of approval to Kon and others, allocating the resources of Nutek to attend to those matters, and ensuring that this happened. In these circumstances, I do not consider that any significant apportionment in favour of Kon would be just in the circumstances. I consider that Kon should be responsible for 30% only.

ORDERS

1. [290]

   For these reasons, I make the following orders:

   1. (1)

      Judgment against the first defendant in favour of the first plaintiff in the sum of $2,172,232.

   2. (2)

      Judgment against the third, fourth and sixth defendants in favour of the first plaintiff in the sum of $1,520,562.40.

   3. (3)

      Judgment against the fifth defendant in favour of the first plaintiff in the sum of $651,669.60.

   4. (4)

      Judgment against the first defendant in favour of the second plaintiff in the sum of $50,000.

   5. (5)

      Judgment against the third, fourth and sixth defendants in favour of the second plaintiff in the sum of $35,000.

   6. (6)

      Judgment against the fifth defendant in favour of the second plaintiff in the sum of $15,000.

   7. (7)

      Order the defendants to pay the plaintiffs’ costs of the proceedings.

   8. (8)

      Liberty to apply in the event that any party seeks to vary Order 7.

   9. (9)

      Direct the Prothonotary to refer this matter to Building Commission NSW and the Australian Securities & Investments Commission.