Supreme Court New South Wales

• Medium Neutral Citation: Chaimandos v Sydney Water Corporation [2014] NSWSC 10
• Hearing dates: 20/12/2013; 21/01/2014
• Decision date: 21 January 2014
• Jurisdiction: Equity Division
• Before: McDougall J

Decision

Dismiss application for interlocutory relief; ancillary orders made.

• Catchwords: BUILDING & CONSTRUCTION - application for interlocutory relief - where structural integrity of the building threatened by soil loss - where cause of soil loss unclear - adequacy of damages - balance of convenience
• Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
• Category: Procedural and other rulings
• Parties: Gregory Chaimandos (First Plaintiff); Steven Chaimandos (Second Plaintiff); Helen Chaimandos (Third Plaintiff); Ann Marie Chaimandos (Fourth Plaintiff); Sydney Water Corporation (Defendant)
• Representation: Counsel: R A Jedrzejczyk (Plaintiffs); T W Marskell (Defendant); A Williams (Second Defendant in District Court Proceedings - 2012/155525); Solicitors: Mills Oakley Lawyers (Plaintiffs); Wotton + Kearney (Defendant)
• File Number(s): 2013/379905

Judgment (ex tempore - revised 21 January 2014)

1 HIS HONOUR: The plaintiffs are the proprietors of an apartment block at Balgowlah. A sewer line owned by the defendant runs along the rear boundary of the plaintiffs' property. In the past, the plaintiffs' property has experienced soil loss from the rear into the sewer line, presumably occurring through cracks in the sewer line or in junctions between that line and other services. The defendant's position is that it has rectified the cause of soil loss.

2 The plaintiffs say that there is continuing soil loss, that it is occurring because there are cracks in the defendant's sewer line which permit soil to escape into the sewer, and that as a result their property is at risk of structural damage.

3 The defendant does not agree that it is responsible for whatever structural damage has occurred. Investigations have been carried out by some means which apparently involve the insertion of cameras into the sewer line. The Court has had the doubtful privilege of viewing the resulting video footage. It is not apparent, at least to the inexpert eye, that the position for which the plaintiffs contend is correct. The defendant says in fact that the video footage confirms that there is no significant soil loss into the sewer line.

4 At the Court's request, the experts retained by the parties conferred and produced a joint report. I have indicated already, and I repeat, that the Court is grateful to those experts for giving up their time over what should have been a period relatively free of work, and cooperating to produce the outcome that they did.

5 The experts have identified three possible causal mechanisms for the subsidence of the land at the rear of the plaintiffs' property. One is ground settlement, which may be the result of inadequate impaction of backfill placed when the defendant undertook repairs a few years ago. Another identified possibility is ground loss through surface and near surface flow of moisture. The third possibility is ground loss at depth by the inflow of soil into the sewer line.

6 The experts agree that at present, the contribution of each of the three identified possible mechanisms cannot be quantified. They say it is difficult to assess and would require further investigation.

7 The experts do not agree that the first cause to which I have referred is significant. One expert says that it is unlikely to be significant, and gives reasons. Another says that it is likely to be significant, and that the reasons advanced by the first expert do not, if I may say so, hold water.

8 The experts do agree that if ground loss continues, then serious structural damage to the plaintiffs' property is a real likelihood. That will happen when the ground loss reaches under the building and undermines the concrete raft foundation slab. At present, the extent of soil loss is about 2.7 metres away from the nearest part of the building.

9 The rate of spread of the subsidence is difficult to estimate. The plaintiffs' expert says that it may be as little as a month before the building is threatened. However, the experts agree that there are numerous factors that will bear on this.

10 There are a number of possible solutions. One is prevention of ground (soil) loss and reinstatement of the ground surface. That would involve lining the sewer pipe if soil loss into the sewer pipe is part of the causal mechanism. Another mechanism is to construct a sheet pile wall around the threatened portion of the building. A third method is to underpin the threatened portion of the building.

11 The first solution would prevent further damage to the slab on ground at the rear of the plaintiffs' building, as well as the building itself. The second and third solutions would protect only the building.

12 The experts have given, as best they can, evidence of likely costs. The cost of reconstruction of the surface is given as $50,000 to $100,000. The cost of sheet piling, or underpinning, is given at $100,000 to $250,000. The cost of lining of the sewer is said to be of the order of $210,000.

13 The relief claimed by the plaintiffs is essentially interlocutory in nature, although undoubtedly the effect of the relief claimed would be final, because it requires the defendant to undertake urgent remedial works.

14 The difficulty with the plaintiffs' case seems to me to be that the work that the plaintiff wishes the defendant to carry out, namely lining of the sewer, will only be efficacious if soil loss into the sewer main is the cause of the problems that the plaintiffs have observed. But the joint expert report does not permit a conclusion to be reached on this.

15 On the other hand, on any view of the causal mechanism, the real fear that the plaintiffs have, which is serious structural damage to their building, can be dealt with by sheet piling or underpinning. Regardless of the causal mechanism, a solution such as underpinning, if properly executed, will mean that the risk of cracking and structural damage is averted.

16 On that basis, it seems to me that there is no justification at present for ordering the defendant to carry out works involving the repair of its sewer line. On the contrary, it seems to me, the proper outcome is to leave the plaintiffs to their remedy in damages. They can protect their property by one or other of the mechanisms identified by the experts. It has not been suggested (for example) that they are financially incapable of doing so.

17 If the plaintiffs are right, and if the cause of soil loss is the defective nature of the defendant's sewer line, then the amounts spent by the plaintiffs reasonably to protect their property will form part of their claim for damages. If the plaintiffs are wrong, then by hypothesis, it would not have been appropriate to burden the defendant with the cost of carrying out the works that the plaintiffs seek.

18 In those circumstances, bearing in mind as I have said that the application is pressed as an interlocutory application, the related considerations of balance of convenience and adequacy of damages as a remedy, suggest that interlocutory injunctive relief, or the relief prayed by the plaintiffs in their amended summons, should not be granted.

19 There are related proceedings, for damages, in the District Court of New South Wales. It is common ground that those proceedings should be transferred into this Court. The plaintiffs' claim for damages in those proceedings can be amended in due course so as to pick up whatever is expended by the plaintiffs in protecting their property.

20 For those reasons, I dismiss the application for interlocutory relief. I order that proceedings 2013/155525 in the District Court of New South Wales be transferred to this Court to be heard together with these proceedings. I enter both sets of proceedings into the Technology and Construction List. I will hear the parties on costs, and on directions to be given to ensure that the matters are prepared for hearing. I direct that the exhibits on the application be handed out, save for the expert report which I will retain.

[Counsel addressed.]

21 The defendant seeks its costs of the application. It says that the relevant "event", for the purposes of UCPR r 42.1, is the dismissal of the application for interlocutory relief. It submits that the various steps that have been taken by the plaintiffs could have been taken at an earlier time, and thus that the parties could have got to where they are now without the need to involve two hearings in Court.

22 There is great merit in that submission. However, in a broader sense, it seems to me that the key "event" is the attribution of responsibility for such continuing ground loss has been observed. If the plaintiffs are found to be correct, and it is the defective state of the defendants' sewer line that is the cause, then, retrospectively, the substance of the application has been justified even though the outcome was unsuccessful. On the other hand, if the Court finds that one of the other causal mechanisms is identified as the key to ground loss, then that would fortify the defendant's entitlement to costs.

23 On that basis, and notwithstanding a strong disinclination in the ordinary course of events to do so, I think that the better cause is to reserve the costs of the interlocutory application to the judge hearing the proceedings on a final basis, so that his or her Honour can deal with the issues I have just briefly identified, and such other questions as the parties may submit bear on the question of costs of the present application. I should indicate that I am most reluctant to burden a judge (who may prove to be me) with that task, but have formed the view that it will facilitate the appropriate balancing exercise that the interests of justice require.

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Decision last updated: 24 January 2014