We were acting for a property developer and the contractor was a household name in the building industry responsible for the construction of some very fine Melbourne tall towers.

The contract negotiations were very straightforward, as was the project. This is not surprising, for when you get two seasoned and sensible contracting parties that have done their due diligence on one another, things tend to bode well.

The dispute resolution clause, however, was very interesting and notwithstanding its inherent “intelligence” in terms of the way it was crafted, I have rarely since then sighted a similar provision. The dispute resolution provision was an expert determination clause.

Expert determination is a contractual provision that dictates that any dispute of any nature to do with the contract or the building works must be referred to expert determination. The contractual provision will provide that the decision once made is binding upon the parties.

The parties have the option of choosing the expert prior to signing the contract, in which case the expert will be someone well regarded by both. The expert is then contacted with the view to gaining his or consent to being appointed as the dispute circuit breaker.

An alternative is for the expert determination clause to provide that an expert can be nominated by a nominating body such as the Institute of Quantity Surveyors or the Bar. This method is fine but can delay things somewhat.

The provision will state that in circumstances where a dispute crystallises, either party can send a notice of the dispute to the expert, along with a copy of the notice to the other party to the contract. The contract will provide that the expert can then advise the parties in writing of a date and time to meet or provide written submissions on point. The expert will also have the power to ask for any other material germane to the dispute.

The contract will be phrased to give the expert more or less carte blanche in terms of the way by which he or she will wish to resolve the dispute, but ordinarily the provision will state that once the expert is provided with sufficient material, he or she will meet with and hear from the parties, deliberate and then hand down a written determination.

The provision will normally provide that the parties remunerate the expert on a 50/50 basis and that monies will be placed into a trust account in advance.

An expert determination clause is designed to fast track dispute resolution so there is an expectation that the expert will deliver a determination promptly. Another virtue of an expert determination clause is that the procedure can be invoked whilst the contract is still on foot, so the contract can progress and contractual relationships can remain intact. The clause can also provide that the determination can be binding, pending conclusion of the project whereupon it can be litigated or retried. Alternatively the clause can stipulate that the determination is binding, period.

By and large, expert determination is enforceable absent any evidence of the untoward. If a party were to try to overturn the determination in a court of law, the Court would be likely to find that the parties had entered into a contract in which they agreed that they would be bound by the expert’s determination, went in with eyes wide open and accordingly are bound to abide by the experts ruling.

The virtues

First and foremost, it’s fast.

It is contained and confidential, the parties can choose the circuit breaker – their own umpire as it were. So dirty linen, for want of better metaphor, is aired internally, dealt with and the parties then move on.

Commercial relationships can remain intact intact, and they may even be enhanced.

In the overall scheme of things, it’s cheap as the parties share the cost of expert deployment.

It comes as little surprise that the big end of town loves it, because the big end of town knows money, knows the value of relationship building and enhancement, knows the downtime that goes with third party judicialised dispute resolution, along with the deleterious effect it can have upon reputation and corporate brand.

The parties can design through their lawyers the expert determination clause. They can even consult with the proposed expert before entering into the contract and discuss the way he or she would like to see the dispute resolution procedure and the logistics of same work. The bespoke procedure can then be captured in the drafting of the provision.

It is also of the no-fault persuasion; even though one party may get a favourable determination and conversely the other an unfavourable ruling, it is not about the winning and the losing. Rather, it’s about the resolution of a misunderstanding in a professional and non-judgemental setting. The characterization of such an outcome in this way is a likely scenario because the parties choose the circuit breaker, so no doubt they trust and have faith in the expert’s capability; as us Kiwis say, they ensured that they choose an expert that had “mana.”

Expert determination for the sophisticated commercial concerns is a bit of a “no-brainer” for reasons that I have hopefully expounded and it is surprising that it hasn’t experienced greater uptake. Or maybe it has, but we haven’t heard about it because it’s been so successful and for the reasons mentioned above, it has stayed under the radar.

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Melbourne, Canberra, Sydney and Queensland. Justin Cotton, Director, is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his recent elevation to Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. Lovegrove & Cotton can help practitioners resolve any type of building dispute and are preeminent in the area of building practitioner advocacy. If you wish to engage the firm, feel free to contact us via our website or by emailing enquiries@lclawyers.com.au.

By Lovegrove & Cotton – Construction and Planning Lawyers

 

The fit and proper person requirement to practice as a building practitioner or to act as a director of a building practitioner company is a concept of significant legal import, as the ramifications for being knocked-back on the basis of this requirement are severe. But what is a fit and proper building practitioner or director? If one is knocked-back on this requirement, can one have a decision overturned or appealed?

 

In recent months, the Victorian building industry has been subject to a new paradigm with regards to practitioner registration, namely Corporate Sole Building Practitioner Registration.

 

This new regime is set out in Schedule 10 of the Building Act 1993, and commenced on 1 July 2018. The process of registering current eligible building companies included an ‘automatic registration process’ and decisions to refuse registration under this regime had to be made prior to 1 July 2018, pursuant to clause 4 of Schedule 10 of the Act.

 

Now that the automatic registration period has passed (post July 1, 2018), building companies must apply via the ‘manual’ registration process, which is largely the same application process, albeit with the requirement that the company commences the registration process, rather than the Authority.

 

Justin Cotton, Director, wrote extensively on point in an article circulated in May 2018 about the changes, highlighting their material effects; most notably the prohibition on building companies being listed as “the builder” in building contracts if they do not possess corporate registration as a building practitioner. To read Mr. Cotton’s article, click here.

 

Fit and Proper & Professional Misconduct – Building Industry ‘Gatekeeper’ Regimes

 

If registration fails because a view is formed that a building company director or building practitioner is not a fit and proper person, the consequences for the applicant are of course profound. It is in fact very much like being ‘defrocked’ or disbarred for professional misconduct. The latter occurs when the conduct has been heinous or of a nature that attracts the disapprobation of peers of good repute. Furthermore such a finding mindful of the fact that it has a profoundly deleterious impact upon a professional’s livelihood and career prospects, is generally only forthcoming after vigorous jurisprudential scrutiny.

 

When one has regard to the criteria applied by tribunals, Courts and other judicial bodies with regards to professional misconduct, it appears very similar to criteria deployed in ascertaining whether an individual is fit and proper. Apart from findings of professional misconduct, there are very few instances where a practitioner loses their right to practice their trade or profession as for fear of laboring the point, the gravitas of such a finding is severe.

 

‘Disciplinary Hearings and Advocacy’ co-authored by Kim Lovegrove RML, FAIB and Criminal Law Barrister Sav Korica, at page 26, highlights some consistent factors considered in determining whether a professional has engaged in professional misconduct:-

 

 

“If one looks at conduct that culminates in serious censure (i.e. professional misconduct) vis-à-vis conduct that culminates in lower end disciplinary censure (i.e. unsatisfactory professional conduct) the sorts of threshold ingredients that the tribunals and Courts and, in some instances, Acts of Parliament seem to have come up with include:

 

• a high degree of objective seriousness conducive to significant harm to the public;
• conduct that is considered to be disgraceful by practitioners of good repute and competency;
• conduct that is heinous or dishonourable;
• conduct that is wilful or reckless;
• conduct that is of a sufficient serious nature to justify suspension;
• grave conduct that poses significant harm to the community.”

 

When one considers the utility of the above criteria and the material effect of a finding of professional misconduct, namely to bar a professional from practising, it parallels greatly with the utility and material effect of the fit and proper test, which serves to bar a prospective professional from practising at first instance. Both regimes are gatekeepers, if you will.

 

The Fit and Proper Test for the Victorian Building Industry

 

The Victorian Building Authority Fact Sheet August 2016 outlines the ‘Fit and Proper Person Requirement’ for building practitioner registration and states that:-

 

“As part of assessing an application for registration, the VBA will have to satisfy itself that an applicant has sufficient moral integrity, honesty and good character to carry out their work and conduct themselves in a professional and honest manner.”

 

The Fact Sheet then refers to relevant criteria, or ‘relevant matters’, the VBA would have regard to in determining the above:-

 

• “any disciplinary or legal action taken against the applicant by the VBA, the Building Practitioners Board, other regulatory body or person”
• “whether the applicant has provided any false and misleading information in support of an application for registration”
• “any requests or information received from the Director of Consumer Affairs Victoria, for example, a request to examine whether building work performed is defective”
• “any notifications received from the applicant’s insurer that the applicant has previously been refused insurance as a building practitioner”
• “any unsatisfactory reference check”
• “any physical or mental infirmity that may affect the applicant’s ability to practise as a building practitioner”
• “any adverse matter disclosed by the applicant, for example, having been convicted or found guilty of an offence involving fraud or dishonesty”
• “a failure to disclose an adverse matter described above that later becomes known to the VBA.”

 

These are largely universal criteria, mirrored across the fit and proper standards applied to a variety of other professions and vocations.

 

On the basis of the aforementioned criteria, any finding where a building practitioner as a director of a building company is considered not fit and proper would have to be accompanied with very definitive and clear supporting evidence.

 

A July 2018 update to the VBA’s Fit and Proper Person fact sheet appears to somewhat extend  the scope of ‘relevant matters’ the regulator can consider in instances of building company practitioner registration. The VBA will have regard to “any licence, approval, certificate or other authorisation as a building practitioner that was suspended or cancelled for any reason other than failure to renew.”

 

This criterion potentially leaves open a wide net of instances where cancellations or suspensions of ‘licences, approvals, certificates or other authorisation[s]’ may be used as justification for scrutiny as to the ‘fitness’ or ‘properness’ of an individual seeking building practitioner registration or a director of a building company wishing for corporate registration.

 

As to the status of a ‘fact sheet’ Lovegrove & Cotton have had carriage of a matter that serves as a Supreme Court authority regarding the likes of aide memoirs or guidance instruments like  fact sheets, more specifically Practice Notes issued by the former Building Commission (the previous incarnation of the VBA). In the Victorian Supreme Court case, Chen & Anor v Kevin McNamara & Son, at [38], Hargrave J described Practice Notes addressing the legislation in question as having “no statutory force or effect. They form part of the information providing function of the Building Commission under s196 of the Building Act. They have formed no part in my decision making process.”

 

The take out in terms of fit and proper is that no related fact sheet, practice note or the like has definitive legal standing, rather they are guidance instruments – useful, but not legally binding.

 

Fit and Proper – Considering the Case Law

 

A definition of fit and proper person is not often found in statute. Most law-abiding and rational individuals would have a pretty good idea of that which is considered to be fit and proper. Such ideas however may not be universally relevant as they may be shaped by the history, the chapter or decade of history, the culture and the rule of law that is germane to the jurisdictional context.

 

The legislature must ensure that a regulated fit and proper criterion is, in itself fit and proper. This point was illustrated in a poignant article, “Time for due diligence on the ‘fit and proper’ test”, by Andrew Hill published in the Financial Times on September 24, 2012. Mr Hill asked the question “is the fit and proper test itself fit for purpose? …the assessment of fitness, propriety and other qualification is a judgemental matter”. Mr Hill added that “US regulators lowered the threshold to disqualify company directors from substantial unfitness to mere unfitness after a rash of corporate scandals over 10 years”. Mr Hill observed that “courts still wrangle over the definition”. Indeed the Courts would, because many definitions of fit and proper have elements of the opaque. Correct, the assessment is based on judgment and judgments are not infallibly correct in every instance, nor are they immune from the shaping of the mores of the time.

Nonetheless, regard to case law is important where a definitional vacuum exists.

 

Honesty, Integrity and Reputation are key Considerations

 

In the matter of Australian Broadcasting Tribunal and Bond (1990) HCA 33, Mason CJ found that one must have regard to all of qualities and characteristics of the subject individual that are relevant to the licence, approval, certificate or other authorisation sought by the individual. Mason CJ made particular mention of an individual’s character and reputation. The high court authority stipulated that decision makers would need to consider ‘whether improper conduct has occurred, whether it is likely to occur, when it can be assumed it will not occur, or whether the community will have confidence it will not occur.’ The extract highlights the importance of public perception and the practitioner’s standing as a respected member of the community.

 

This is largely paralleled in case law governing the legal profession. The importance of a practitioner’s public standing is clearly outlined in the matter of Dixon v. Legal Practice Board of Western Australia [2012] WASC 79 whereby it was stated that “fitness to practice law requires that the practitioner must command the personal confidence of his or her clients, fellow practitioners and judges.”

 

In terms of the matter’s relevance to the building industry, again it comes down to the essence of the fit and proper person judgement – namely, character and reputation. Moreover, the legal profession, like the building profession, with regards licensing and registration comes under the jurisdiction of a statutory scheme. It follows that if a building practitioner is held in high repute by his colleagues, peers, clients and superiors the argument that said practitioner is indeed fit and proper is compelling.

 

Prior Convictions or Proceedings against the Subject

 

In the United Kingdom, the Financial Conduct Authority and Prudential Regulation Authority presides over an “approved persons regime”. The regime serves to regulate individuals that carry out significant management functions within a regulated firm or business, such as directors. Again the assessment of whether an individual may be regarded an ‘approved person’, is contingent upon them meeting the criteria of a fit and proper test.

 

“The FCA or PRA will have regard to all relevant matters including, but not limited to, a specific list set out in the Handbook. To illustrate the breadth of the test, these include, in simplified form, whether:

• The person has been convicted of any criminal offence.
• The person has been the subject of any adverse finding or settlement.
• The person has been the subject of earlier investigations.
• The person is or has been the subject of disciplinary or criminal proceedings.
• The person has contravened the requirements or standards of the UK regulatory system or other UK regulatory authorities.
• The person has been a director, partner, or concerned in the management, of a business that has gone into insolvency, liquidation or administration.
• The person has been dismissed, or asked to resign and resigned, from employment or from a position of trust, fiduciary appointment or similar.
• The person has ever been disqualified from acting as a director or disqualified from acting in any managerial capacity.
• In the past, the person has been candid and truthful in all his dealings with any regulatory body.
• The person demonstrates a readiness and willingness to comply with the requirements and standards of the regulatory system and with other legal, regulatory and professional requirements and standards.”

(Quoted from: Thomson Reuters, article by Giles Peel, Bridget Salaman, and Mathew Rutter, DAC Beachcroft, Directors: are you fit and proper? Trends in fit and proper person requirements and testing, 2015)

 

However, prior convictions are not always regarded as relevant to the position sought in terms of assessing fit and proper. In determining the fitness or properness of an individual a Court, Tribunal or Authority will adhere to notions of natural justice.

 

Another statutory definition of fit and proper decision making is found in the New Zealand Electrical Workers Registration Board fact sheet on fit and proper. Section 3.14 of the fact sheet outlines the decision-making process. It is useful to have regard to this fact sheet as, like the VBA, the registration body regulates a category of building practitioner.

 

“3.14 The Board will apply and adhere to the principles of natural justice in coming to its decision as to whether a person meets the fit and proper person requirements of the Act. The Board may also take any of the following into consideration:

• how serious the matter is or was;
• what health and/or safety concerns it may raise;
• how long ago it occurred;
• any consequences for the applicant or any other person;
• whether it was a one off incident;
• how relevant it is to the applicant carrying out or supervising prescribed electrical work;
• the implications of the matter; i.e. what does it show about the applicant;
• the applicants attitude to the matter;
• how a member of the public who engaged the applicant to carry out prescribed electrical work would view the matter”

(Quoted from: Electrical Workers Registration Board, L-PO-12 Fit and Proper Persons, 2017)

 

Conclusion

 

In conclusion, on the basis of a plethora of different cases and different fact sheets, one can glean the following ‘definition’ of, or ‘criteria’ for, a fit and proper person to practice as a building practitioner.

 

A fit and proper person to practice as a building practitioner or be a director of a building company is an individual:-

• of strong repute that holds the respect of their peers, colleagues, clients and superiors.
• whose peers, colleagues, clients and superiors, along with the public at large, have confidence will not engage improper conduct as a building practitioner.
• that presents with a record devoid of any adverse findings such as:-
  • criminal offences;
  • provision of misleading information;
  • registration disqualification;
  • conditions imposed upon registration;
  • improper professional conduct;
  • professional misconduct;
  • a finding of fraud or dishonesty;

or

• that has a record of adverse findings that:-
  • are not regarded as relevant to exercising duties as a building practitioner;
  • Had occurred some time ago;
  • Were one-off incidents, and not recidivist;
  • Were of low-level severity;
  • Culminated in the individual being honest, regretful and remorseful and making progress towards reform.

 

Should one’s application for building practitioner registration or company registration be rejected on the basis of not being regarded a fit and proper person, despite meeting the above requirements, it is paramount that one considers instructing solicitors to aid in making submissions to review such a decision as, depending on the factual mosaic, there are likely to be sound appeal grounds.

 

Lovegrove & Cotton: Leaders in building practitioner legal representation

Lovegrove & Cotton are experts in construction law and building practitioner legal representation in Melbourne, Sydney, the ACT and Queensland. The firm also has had carriage of a great many administrative decision appeals. Justin Cotton has represented building practitioners and building surveyors successfully for nearly fifteen years and has established leading precedents in a number of Australian Tribunals. If the reader knows of anybody who needs legal representation in this complex and gravity-laden area, feel free to contact us via our website or by emailing enquiries@lclawyers.com.au.

 

 

By Kim Lovegrove RML, FAIB

Mediators prefer to talk in terms of win-win or compromises where both parties leave the mediation positively disposed to one another and happy with a compromised outcome. But in my experience the reality is somewhat different disputants particularly in the construction setting want to win, they want to get an outcome and if they do not get the outcome they want after mediation, they will insist upon their day in court.

What Does Winning Mean?

The conventional definition is victory over one’s opponent and in a commercial or construction disputation setting this tends to mean getting paid, that which is owed or in the case of the property owner more often than not, winning means getting paid monies to fix up defective workmanship or being paid monies that are required to complete a project.

There is also more abstract definition of the word “win”. Under this definition winning may be defined as cutting one’s losses at the earliest possible opportunity because one has a weak case when compared to the superior virtues of the opponent’s case. This is also a win of sorts because one can stem the flow of legal and consultancy expenditure and quickly bandage up the wound so to speak.

Regardless of the semantics or definition of winning in construction disputes the way to win at mediation can be encapsulated in

• Making sure that you have an excellent construction lawyer or construction barrister that has an eye for detail and a willingness to be frank and candid. You need someone who has sufficient strength of character to be able to tell you, not what you want to hear, but rather what you need to hear. What you need to hear is the truth i.e. whether you have a strong or weak case, i.e. a case that is capable of being won or lost. Furthermore if the case is strong one is talking about more than a 50/50 proposition, it is all about a very high chance of winning.
• Honest and frank advice fashioned by the construction advocate is critical because one does not want to embark on a lengthy dispute in circumstances where there are considerable risks. Furthermore the advocate must be prepared to negotiate a compromised outcome at the earliest possible juncture if the case is fraught with downsides.
• One needs a damn good building consultant. Many cases are about building defects and there are those “defects” that are alleged and there are those that are real. Again the litigant needs to know the truth and the truth boils down to two questions. Are there any defects? If the answer is yes, how much does it cost to fix them? The best building consultants can answer these questions honestly and accurately and one needs to avoid a building consultant who is inclined to “gild the lily”. Gilding the lily raises hopes that will inevitably be dashed.
• If one has a very strong case and a robust legal and consultancy team and the other side is financially sound, then be loath to compromise. There is a place for “gunboat diplomacy”, the side that has the biggest guns and the most effective artillery should hammer that advantage home. Mike Tyson, once his opponent was on the ropes did not say “let’s have cup of tea or let’s have a break”, he hammered home his advantage and delivered the finishing blow, that’s winning. If money is owed in a prima facie sense and the opponent has the capacity to pay it, then it has to be paid. A litigant should never bid against itself and compromise purely to resolve a matter in circumstances where there is a significant “financial hair cut”. All of this however is subject to one proviso, the other side must have the capacity to pay, because if it does not, there is no need to throw good money after bad and victory will be pyrrhic and will be associated with significant financial loss.
• Nevertheless be open minded, be prepared to listen, and hear the other party’s point of view, in case there is a development by way of the provision of new information that alters the risk matrix. Absent a preparedness to listen a seminal piece of information may be lost.
• Listen to the mediator and allow the mediator to do their job, which is to assist with the facilitation of the resolution of the dispute. But do not permit a mediator to bully one into settling the matter. Many mediators use a stock standard line and it goes something like this “there are no guarantees in a court of law that anyone will win…the legal spend will be huge…the case may run for weeks and so forth”. I never once heard a mediator say “there are cases that are bullet proof where there is no chance of losing”, yet indeed those cases do exist. A good construction advocate will know if such case presents itself.
• Do not be intimidated, some advocates try to bully and filibuster. In doing so they try to undermine the faith one has in one’s case and the faith that one has in one’s legal team as they try to capitalise upon the seeds of doubt. Stay strong, stay firm if you have chosen your team well stay confident and accept their advice.
• Understand the ringcraft of mediation negotiations, the first offer is rarely the final offer. The winning of mediation requires patience, fortitude and a preparedness to abort the mediation if a suitable offer is not forth coming. On this point the biggest weapon is that preparedness to terminate the mediation and the confidence to say “sorry folks, the mediation is over, we have a great case and I look forward to seeing you in court”. This is powerful because the other side if well advised will know of the fallibility in their position and the last thing they will want to do is run a case that will be lost.
• So one has to stay strong and stay firm in one’s determination to derive victory but before the mediation begins, the question of what does victory look like needs to be answered. The legal team prior to the mediation should have a defined victory in the financial sense so that the client can provide the relevant instructions and knows what the financial outcome will be.
• Be prepared for all types of mediators. You will not necessarily know who the mediator will be. You will not know whether the mediator will be meek and subdued, proactive or reactive. You will not know whether the mediator will engage in histrionics or be apathetic in his or her disposition. A good mediator will be impartial, facilitatory, constructive and non-judgemental but as mediation is an unregulated profession, it can be a bit of a mixed bag unless the parties can nominate and agree upon a mediator who is held in the highest esteem. Just because there is an indifferent mediator does not mean to say that one cannot win as long as the negotiating team keeps its cool and puts its arguments persuasively. Where a mediator is not able to control the dynamic there is a risk that histrionics or ferocious expression will culminate in one of the parties walking out. When this occurs there will be no closure and the negotiation drawbridge will close.

Finally, victory can only be achieved when the deal is done and closure is effected by way of signed up terms of settlement. The devil is in the detail with respect to terms of settlement and they are an art form in their own right. Great care must be taken when it comes around to drafting terms of settlement. A good advocate will be pedantic even if this frustrates the opponent because nothing must be left to chance, there can be no ambiguity. Understand that the drafting of terms of settlement can often take many hours but be patient and persevere and only sign the document when your advocates are satisfied that every base is covered.

About the author

The author of this piece, Kim Lovegrove RML, FAIB, is a mediator whose practice revolves around either the negotiation or mediation of complex and at times sensitive disputes, be they of the geopolitical, civil or high-end commercial derivation. Kim Lovegrove has been retained by governments to facilitate law reform outcomes, micro-economic reforms, economic reforms and the design of best-practice dispute resolution systems. Kim is also a recipient of a humanitarian award courtesy of the Crown Council of Ethiopia and has a diplomatic lineage as both his father and late grandfather held prominent positions in the United Nations (UNESCO). Kim Lovegrove RML, FAIB is also past conjoint professor and has presided over a state practitioner registration regime as a ministerial appointee. Kim can be contacted for deployment courtesy of enquiries@lclawyers.com.au

By Justin Cotton, Director, Lovegrove & Cotton – Construction and Planning Lawyers

In a recent New Zealand case study, a Court decided that a four-metre high fence that blocked an elderly couple’s panoramic views of Wellington harbour would need to be removed or drastically lowered, despite the fence apparently having been designed and built as a “children’s fort” and otherwise being compliant with planning controls.

Upholding the rights to views and privacy of the adjoining owners (Peter and Sylvia Aitchison), the Environment Court held that the design of the four-metre fence to double as a children’s play fort was merely a “contrivance” to allow the landowner (David Walmsley) to circumvent the rules that prevented the building of a fence to that height.

The lesson for architects involved in such creative design may be that, despite the design and build otherwise being compliant with planning controls and regulations, an aggrieved neighbour can still possibly maintain an argument that they have property rights to a view.

As with most neighbourly disputes, there are usually two sides to every argument, and so it proved with this case. In regard to the Aitchisons’ claims of loss of view toward the harbour and the city, Walmsley simply stated that the fence/fort was allowable under the rules (namely the District Plan) and that he was not obliged to consider the drastic effect on the neighbours’ views.

There was also an argument that a fence had been in place at this location previously and the developers of the Aitchison property had removed that fence without authority, promised to replace it later on and had not done so. The property had been in the Walmsley family for generations.

Furthermore, Walmsley argued that he was in fact putting up the new structure to protect his family’s privacy, and to avoid the Aitchisons carrying out landscaping/excavation into his property as they had allegedly done in the past.

In regard to the walkway on the fence/fort leading to a loss of privacy for the Aitchisons (as they claimed), he said his neighbours could simply put up curtains. This argument was derided as “facetious” by Peter Aitchison, who said that every time people stood on the walkway and looked over the fence, he and his wife would need to draw curtains.

The ensuing debate led not to a view to a kill, but a view to a date with the Environment Court. This was because an objection to the Council initially proved fruitless, with the Council advising they were powerless to act if the structure was permitted under the District Plan.

Once at Court, the Judge was critical of the developer and opined that Walmsley was incorrect in assuming that just because planning controls allowed him to build the structure, that he could simply ignore any potential loss of amenity to his neighbours.

While the Council had previously said the four-metre fence was allowed under the District Plan, it later adopted a safer course and by the time of the Court hearing was supporting the Aitchisons’ bid to have the fence removed or lowered.

Meanwhile, the Aitchisons produced the following evidence at the hearing:

1. Property valuation evidence suggesting a loss of $900,000 (NZ) in value due to the lost sweeping views
2. Expert opinion from a former Wellington town planner that he was shocked when he inspected the site, and had never seen such a severe amenity impact from such a design (when viewed from the neighbours’ perspective)
3. Further opinion from an academic psychologist in regard to the ‘social effects’ of such a structure, who opined that the act of erecting the structure was an expression of ‘dominance and control’

The presiding members at the Environment Court were Judge Brian Dwyer and also Environmental Commissioner Ian Buchanan. As part of the ruling, the Dwyer said he agreed with the town planner’s evidence that the fence structure was highly offensive when viewed from the neighbours’ side, and was a clear attempt by the designer to avoid the rules relating to height of boundary fences.

Buchanan, for his part, found that the fence was “dominant and overbearing” and that the walkway atop it would affect the Aitchisons’ privacy. In regard to the main objection about loss of view, he said a key component of the residential amenity for the land was the view of the harbour. As a consequence of the construction, the neighbours had suffered virtually a total loss of their primary view.

Given that the Court had the power to order that the structure could either be removed or lowered, it found in the Aitchisons’ favour. They were given one month to file an enforcement order requiring Walmsley to remove the fence/fort from his property.

Designers may well argue, and this has been upheld in planning disputes previously, that enjoyment of a view should be seen as a temporal and fortuitous benefit that is not a property right enjoyed in perpetuity.

When one considers the draconian loss of view caused by the structure, and the bare wall that the adjoining owners had to endure, it calls into question any interpretation that just because a structure on a property may otherwise be legal and compliant, that the neighbours must endure adverse impacts.

Lovegrove & Cotton Lawyers to the building industry

For thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Melbourne, Canberra, Sydney and Queensland. Doyles Guide ranks Kim Lovegrove as one of the leading construction lawyers in Australia. Justin Cotton, likewise, is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his recent elevation to Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. Lovegrove & Cotton can help practitioners resolve any type of building dispute and are preeminent in the area of building practitioner advocacy. If you wish to engage the firm, feel free to contact us via our website or by emailing enquiries@lclawyers.com.au.

By Kim Lovegrove RML, FAIB, Senior Consultant, Lovegrove & Cotton – Construction and Planning Lawyers

Prior to the 1990s, the concept of mediation as a means to dispute resolution was not well established.

The latter day assumption is that absent mediation everything went to court, but the fact is that 90 per cent of matters were still settled before they went to trial. Little has changed; 90 per cent of matters still settle before matters go to trial.

Prior to the dawn of mediation, lawyers were much better disposed to negotiation and there were de facto mediations of sorts, which were known as preliminary conferences. Yet by and large, as I recall, there were no mediators. Instead, there may have been a case listing master who gave the lawyers a room to “thrash out” a deal and nine times out of ten, we did.

Alas, the love affair with mediation has resulted in a situation where lawyers have tossed negotiation out of the legal tool kit. Most lawyers are loath to negotiate; in fact too many negotiation is an anathema. Lawyers by and large don’t dream of getting on the “blower” and cutting a deal, let alone getting the clients into a room and collectively engineering an accord. Negotiation has become a forgotten art because the mantra of the day is that you settle your disputes at mediation.

For the record, I am a mediator and an advocate of mediation, but this homage is not to be confused with my ruing the demise of lawyer to lawyer negotiation as the most effective front end way of resolving a dispute. It is tragic that lawyers are so ill disposed to getting on the phone and negotiating before more altercationist petrol is poured on the fire.

So clients, once you brief your lawyers, instruct them to herd everybody into a room, thrash out a deal, keep the conflict in house and keep the commercial relationship intact, as they do in many Asian countries. Tell them to put the fire out rather than lubricating it with an accelerant. Don’t be “sucker punched” into thinking that the only way to resolve the dispute is to issue proceedings to mediate. At the very least, tell the lawyer to negotiate and then mediate if all else fails.

We applied this methodology in a multi-million dollar dispute last year, in which senior executives attended a meeting with lawyers in tow. We thrashed out what was close to a deal, but not quite. Both lawyers said “look as you guys are close, resolve to meet with one another without lawyers over a coffee.”

They took our advice, caught up for the coffee and did the deal. The lawyers then “mopped up” and committed the terms of settlement to writing and everyone moved on.

About the author

The author of this piece, Kim Lovegrove RML, FAIB, is a mediator whose practice revolves around either the negotiation or mediation of complex and at times sensitive disputes, be they of the geopolitical, civil or high-end commercial derivation. Kim Lovegrove has been retained by governments to facilitate law reform outcomes, micro-economic reforms, economic reforms and the design of best-practice dispute resolution systems. Kim is also a recipient of a humanitarian award courtesy of the Crown Council of Ethiopia and has a diplomatic lineage as both his father and late grandfather held prominent positions in the United Nations (UNESCO). Kim Lovegrove RML, FAIB is also past conjoint professor and has presided over a state practitioner registration regime as a ministerial appointee. Kim can be contacted for deployment courtesy of enquiries@lclawyers.com.au