NSW Undercutting Retaining Wall by Previous Owner - Who Pays?

[Tasker2015]

We are the higher propery, with the property below that are new owners (1 year). We had built a retaining wall of 1.5m above the natural slope of the land in the 1970s when we built the house (have photos). This year, we've notice subsidence in back yard near retaining wall.
I cut a path through the tree covering the area and vines that my previous neighbour planted at the back with owners permission to investigate.

It is apparent that the wall has been undercut by an average of approx a whopping 3 metres to achieve a flat ground level for their shed that occupies the space.

So now the earth to retain at boundary is 4.5 m.

The waterboard pipe is just inside our existing retaining wall. With an inspection pit that is suspended in space just outside the retaining wall by a rock outcrop. All this used to sit on the natural slope of the land.

The cost of building a new retaining wall to this new height has been quoted as around $250,000 (including waterboard requirements).

Apart from the fact that you need waterboard approval to excavate near a pipe (i.e. illegal actions). This negligent unsupported undercutting has undermined the foundation of our existing retaining wall and caused subsidence, and increased the wall replacement height from 1.5 to 4.5m.

How do I proceed?

Any help would be much appreciated.

 

[Sophea]

Hi Tasker2015,

In NSW s177 of the Conveyancing Act, creates a duty of care for landholders to refrain from doing anything on or in relation to land that removes the support to another piece of land. That would include changing the soil surface, subgrade or even the water beneath. When this duty of care is breached by someone, the affected landholder has grounds to bring an action in negligence, claiming damages caused by the interference with the natural land or a structure supporting the natural land.

If your neighbour has breached their duty of care under this section by altering the subgrade of his land such that it removes the support to your land, you may have an action in negligence. However it will require you to institute civil proceedings to sue your neighbour and will probably be quite a costly exercise as you will need to get numerous expert reports from geologists / engineers to verify that the alterations your neighbour has made to his property have affected your property in the manner you allege and have or will cause your property significant damage.

I would speak to a lawyer about this.

 

[Tasker2015]

Hi Sophea,

Thank you Sophea for the information. The new neighbour(of 1 year) is currently cooperative.

Is there a convention that would allow us to divide costs fairly in replacing the boundary retaining wall to support fence, our retained land and the neighbours undercut height.
As our original retained land is about a third of the height of a complete retaining solution.

If not, what type of solicitor would I engage? Is there a specific discipline?

 

[Sophea]

Yes s3 of the Dividing Fences Act, enables you to seek a contribution from your adjoining neighbour for work on a retaining wall where the retaining wall is necessary for the support and maintenance of a dividing fence. If you are able to sort things out directly with your neighbour that's great, but if things get ugly, you could always use the "threat" of your neighbour being held responsible for costly damage to your property as a bargaining tool to get your neighbour to agree to paying half. If all else fails retain a litigation lawyer, but unfortunately it will be costly.

 

[Tasker2015]

Oh thanks Sophea, that's great news.

Is there a statue of limitations does this apply? We built our retaining wall in 1970. We don't know when the excavation/undercutting happened. Although we have only noticed subsidence in the last 6 months.

Is the 'contribution' of the boundary retaining works whatever we can negotiate as they have undercut double the height of our existing retaining wall? Or is there a convention of half the cost?

 

[Sophea]

I assume this would fall under the Limitations of Actions Act s14(1)(b) as a tortious action, as the duty of care created by s177 of the Conveyancing Act is a common law duty of care - the breach of which would give rise to an action in common law negligence. So the limitation would be 6 years from the date that the cause of action accrues. Generally in the case actions in negligence regarding building defects, a cause of action accrues upon the first occurrence of damage or loss. However it can get tricky when latent defects appear months or years before the full extent the issues become obvious. Caselaw has construed the accrual in building defect cases in a variety of ways. For example it has been held to be the time when defects are discovered, or the time when more than negligible damage is sustained, or when the link between the damage and the negligence becomes apparent or when the latent defect is known.

Therefore if you were going to bring a cause of action you would likely have to do it within 6 years of when you discovered that subsidence was occurring (this year) or any other damage relating to the subsidence.

With regard to the contribution, I will explain how the Act sets this out. You can view the provisions of the act yourself here: NSW Legislation

So in s3, fence is defined to include any "foundation or support necessary for the support and maintenance of the fence" and only includes a retaining wall where it serves the purpose of supporting or maintaining a dividing fence. With respect to contributions, s6 states that adjoining landowners are jointly liable to contribute to building a fence (including any necessary wall) where there is "no sufficient dividing fence". This applies whether or not there is an existing dividing fence, because it still may not be considered a "sufficient dividing fence" is considered in s4.

s7 of the act states that adjoining landowners must contribute in equal proportions to construct a sufficient dividing fence. If one of the landowners wants a fence built to a standard greater than what is "sufficient" then they will bear the additional costs of building to that additional standard.

Hope that helps.