Doing what ought to be done

By Legal Eagle

One of the questions in the law of private law remedies is: how do we repair the wrong that has been done? What is the best way of doing this which nevertheless respects the autonomy of the parties and balances their rights?

One way in which courts can remedy some wrongs is by ordering the person to do what they ought to have done in the first place. For this purpose, we have the remedies of specific performance (which generally applies to contract) and injunctions (which apply more broadly). The court tells the defendant that they should do what they said they’d do, or restrains the defendant from acting in a way which is wronging the plaintiff. Usually, in common law at least, damages are the default remedy and plaintiffs are only entitled to specific relief if damages are inadequate.

A topic which interests me greatly is the idea of rectification damages and rectification orders. Say you have a house which you contracted to have painted Sunshine Yellow. The painter has painted the house in the subtly different colour known as Custard Yellow, and to you it looks far less attractive. However the diminution in value to the house is minimal. Should the painter be required to merely pay the for the reduction in value to the house, or should the painter be required to pay for the house to be repainted? Or should the painter perhaps be forced to repaint the house?

Fancy my excitement when I saw a case which raised rectification issues! In The Age on Thursday, the following story appeared:

The exterior wall of the Newry Street factory in Richmond before it was torn down.

The exterior wall of the Newry Street factory in Richmond before it was torn down.

A DEVELOPER who knocked down a 90-year-old Richmond factory in contravention of a planning permit has been ordered to rebuild the original walls brick by brick.

Soon after the planning permit for a small four-storey block of flats in 7 Newry Street was issued in March last year, developers razed the original brick building.

On the site now, tucked away in the heart of the once-working-class suburb, there is no trace of the historic red-brick factory that was supposed to be incorporated in the new 24-unit development.

The aftermath of the demolition.

The aftermath of the demolition.

Five weeks ago Victoria’s planning tribunal made an unusual order forcing both the developer, a company owned by the directors of the Crema Group, and builder Kubic Pty Ltd to reconstruct three of the factory’s original walls.

The developers claimed they demolished the factory walls because of structural cracks and insufficient footings. But Yarra Council took them to the tribunal seeking their restoration.

Tribunal member Russell Byard ordered the walls be reinstated ”as near as practicable to the condition prior to such demolition [excluding the reinstatement of any structural defects] … using the same bricks that formed part of the original walls.”

The builders are required to have their work finished before August.

The council also sought in the Melbourne Magistrates Court a fine and conviction for breaching the planning permit.

How fascinating is that? The Tribunal is requiring the builder to rebuild the entire historic factory wall before they can continue to build the flats. In this case, it seems actual rectification is the way to go.

27 Comments

  1. TerjeP
    Posted May 5, 2012 at 12:59 pm | Permalink

    How fascinating is that? The Tribunal is requiring the builder to rebuild the entire historic factory wall before they can continue to build the flats. In this case, it seems actual rectification is the way to go.

    I have a different reaction. It goes something like this: “How bloody stupid is that”. If you own a building and you want to knock it down it is a travesty that petty bureaucrats should have any real say in the matter. I wish we had some smart lawyers trying to defend the essence of property rights. Like in that movie “The Castle”.

  2. Moz
    Posted May 5, 2012 at 1:49 pm | Permalink

    I saw this and forwarded it to my partner (an architect). It’s good to see this action because it does send a message to developers that they can’t just crash through and get away with it. Too often it’s cheaper to pay the fine than work around features like that wall. Like the tree-poisoners, paying money doesn’t work.

    Is there any way in law to capture the benefit rather than the cost? Some wrongs benefit the actor greatly, but the financial cost to those wronged is small or difficult to capture. Poisoning trees is a simple example – remove a $10,000 tree, increase the value of three houses that overlook it by a couple of $100,000 each.

    With the wall the best part will be when the council is not satisfied with the rebuild and hires a bunch of archeologists to deconstruct and rebuild the wall again. At the developer’s expense.

    On that subject, is there any prospect of this private prison construction that’s asking for more money being declared bankrupt and the state purchasing the partly-built prison at a huge discount? I can’t imagine there’s much buyer competition for prisons in rural areas.

  3. Posted May 5, 2012 at 3:55 pm | Permalink

    [email protected] I am a strong opponent of land-rationing and of permit raj’s. But it is more complicated than that.

    I entirely agree in opposing discretionary control over property by officials (aka a permit raj). But that does not mean a rule-based system constraining action cannot be appropriate.

    The ambiance/amenity of an area is part of what people are purchasing. Constraining property rights can, in fact, increase their value. This is why, for example, covenants are such a strong feature of developments in Texas.

    So, zoning and related controls can be a defence of property rights.

  4. Posted May 5, 2012 at 4:16 pm | Permalink

    Obviously the details of this case are not present here (and they would be interesting), but this sort of thing isn’t usually some silly planning rule, but a genuine property interest (an easement or restrictive covenant), which binds the land and was often put there a long time ago to operate for the better use of the land qua land (servitude or real burden for civilians, remembering that a real burden can be positive or negative, while the Romans will let you have a servitude for a view, not just of light).

    There is another complexity to add: people in the past tended to make better building and construction decisions than we do know. Their cities looked nicer. And it is Edinburgh’s tight as can be system of servitudes and real burdens that preserved its beautiful medieval Old Town, its Georgian New Town and its Geddes Gardens. And the government had nothing to do with any of that: it was all the work of private property holders using Roman law to ‘bind the future’ as it were.

    In England, the govenment and developers did more damage than the Luftwaffe.

  5. kvd
    Posted May 5, 2012 at 5:22 pm | Permalink

    This is very much a layman’s view as to property (read land) rights but one of the first questions asked of multiple owners is do they wish to be noted as joint tenants or tenants in common. Explanation always ensues re the difference between ‘joint’ and ‘in common’ – with never much regard to that other word ‘tenant’.

    It is a conceit to assume your ‘ownership’ is anything more than a temporary tenancy. Your ‘right’ to do as you will is not absolute; it exists only in terms of your temporary control of title, and is always subject to whatever terms or conditions are imposed upon your title. Even in the old days it was always ‘a title grant’ or ‘a grant of title’ – implying a right given rather than something taken or assumed.

    [email protected] I assume those “smart lawyers trying to defend the essence of property rights” know all this far better than me. And anyway, Moz’s question regarding benefit is way more interesting – but I see LE has picked up on it.

  6. Posted May 5, 2012 at 5:43 pm | Permalink

    Yes, the Romans have a unitary conception of title: there are what is known as ‘subordinate real rights’ (like leases or servitudes, for example), but they are never ownership, of which there is only one sort (dominium). The equivalent of tenancy in common, with its ascertainable unequal shares, has to be managed by contract, for example. There is also no possibility of equitable or beneficial ownership, for example. [Watch a civilian’s head asplode when you try to explain floating charges to him; he wants to use a non-possessory security instead].

    Because the civilian power over property is much more absolute than it is at common law, the Romans evolved methods to make it much easier to bind the land as to the future via things like real burdens (Roman law has positive as well as negative covenants) and servitudes (which cover many more possibilities).

  7. Posted May 5, 2012 at 8:08 pm | Permalink

    [email protected] Loved the Klingon bird of prey analogy. Brought to mind this amusing discussion on whether the Death Star was a good investment for the Emperor.

  8. Moz
    Posted May 5, 2012 at 8:52 pm | Permalink

    LE, glad to be of service with the question 🙂 I’m struggling a little with the jargon in the discussion but fortunately this interweb thing has a dictionary. No, I didn’t know you have a book coming out, and I hadn’t considered the Nauru phosphate mine as a similar example. But it makes sense, and it’s good to know that the legal beagles are on top of this stuff.

    There’s a PPP prison in Vic that’s run short of cash and the owners seem to be claiming that they’ll have to declare bankruptcy if the government doesn’t pay extra: http://m.theage.com.au/victoria/new-jail-hits-cash-hurdle-20120504-1y4jq.html It seems that the government took the Bunnings approach when choosing who to award the tender to – a lot cheaper and nearly as good – but it has bitten them. The generous interpretation seems to be that the builders are claiming their own incompetence as a reason why they should be paid extra.

    I can see that saying “we didn’t know what we were doing so we quoted too low” can be a plausible explanation. It definitely happens at the smaller end of the building market way too often (watch “Holmes on Homes” and you’ll see quite a few “handyman out of their depth” stories). But I don’t see a problem with the legal remedy being bankruptcy. That’s what bankruptcy is all about, surely? And insert boilerplate about due diligence by both sides and liability by the various people and companies that set up the shell company that submitted the tender since surely someone in that setup should have known that they didn’t know what they were doing? Ditto the govt side, I suspect, and that might be the hinge for the rescue argument – “you should have known that we didn’t know what we were doing”.

  9. Moz
    Posted May 5, 2012 at 9:02 pm | Permalink

    As far as land ownership granting complete rights to do whatever you want unencumbered by consideration for others, I’m firmly on the side of more state control. Otherwise you get people refining uranium in the suburbs then walking away. Which demonstrates both the main problem with “my land to do what I wish” and the gaping flaw in limited liability companies in one easy example. Well, it’s easy to outline the example, but good luck to all those living in Hunter’s Hill or trying to resolve the issue now.

    I can’t imagine how a libertarian conception of land rights would actually work. Is the assumption that if your neighbour does something rude that you launch an armed invasion? Or just use your infinite wealth to buy out anyone causing a problem? For example, TerjeP buys some land just south and downhill of me. Builds a house. Moves in. I erect a 10 storey building that totally shades his house and the runoff from my carpark creates a deep gully where his driveway used to be. But in libertarian terms, my property to do with as I wish so caveat emptor and he’s got nothing to complain about. (I’m giving you both a positive that gets removed and a negative that gets added, just for clarity).

  10. TerjeP
    Posted May 5, 2012 at 9:09 pm | Permalink

    The land I own is bound by covenants written long ago. They prevent me from raising pigs or producing bricks on the property. With age they have become all but irrelevant as basically nobody in Sydney suburbia wants to raise pigs or make bricks. Far more onerous are the restrictions imposed by government in the last decade that dictate design features on any new dwelling that are more historical than the buildings in the street that are actually historical. Heritage rules have become a menace and preserving not just old buildings but old styles for new buildings a pain in the proverbial.

    http://blog.libertarian.org.au/2011/05/13/our-heritage/

  11. Posted May 5, 2012 at 9:10 pm | Permalink

    It seems that the government took the Bunnings approach when choosing who to award the tender to – a lot cheaper and nearly as good – but it has bitten them.

    This made me laugh a great deal.

  12. Moz
    Posted May 5, 2012 at 9:44 pm | Permalink

    TerjeP, someone in Melbun just spent $150k on legal fees because the cryptofascist lackeys of the imperialist capitalist overlords did not like his pet sheep. He just lost but has vowed not to give up the fight. And before you say anything rude, he is neither Tasmanian nor kiwi.

  13. TerjeP
    Posted May 5, 2012 at 9:54 pm | Permalink

    Damn those imperialist capitalist overlords. Baa.

  14. kvd
    Posted May 6, 2012 at 2:59 am | Permalink

    But I do agree with Terje that there is way too much silly government regulation. People should be free to build what they want and live how they wish.

    (btw For some reason this reminds me of Blade Runner)

  15. Posted May 6, 2012 at 6:28 am | Permalink

    [email protected]

    I’m firmly on the side of more state control

    Depends what you mean by that. Discretionary control by officials is a bad idea. Rules can be a good idea.

  16. Poppapete
    Posted May 6, 2012 at 6:41 am | Permalink

    I was driving along the beachfront on the Sunshine Coast with a friend and asked what was the huge hording with 3 newly planted small trees doing on the foreshore. Someone had poisoned 3 large pines probably to afford a clear view of the Ocean. The Council’s remedy was to replant the trees and erect the hording such that the house opposite had no view. When the trees had grown above the hording, it was removed. Don’t know if house owners have fought the council on this or if the Council had any proof that the house owners did in fact poison the trees on the foreshore in front of their house.

  17. Posted May 6, 2012 at 9:55 am | Permalink

    kvd @19, LE @22 or Dharavi

  18. Posted May 6, 2012 at 10:51 am | Permalink

    The reflex absolute statements of “it’s my property and I should be able to do what I want” really annoy me, because apart from obvious amenities (for example, building a high-rise which blocks the sun over the washing line, and requires use of electricity in the house for lighting, running a clothesdrier, the sun reasonably expected at the time of purchase because all the houses were low rise), consider if I buy a house next to your family of small kids, and decide to run a brothel there, from home, with a whole lot of co-workers, and seedy characters wandering around at all hours (not noisy, decreasing amenity that way, but certainly worrying), and YOU had bought your house a couple of years beforehand, the price of your place reflecting the desirability of a quiet little-kid-friendly neighborhood.

    So, the value of the property, and indeed the suitability for your kids, will have been negatively affected by the ambience, no reconstruction, no noise, no loss of amenity other than something that depends on the type of people living in the entire street.

    If running the brothel gave much more financial reward than zoning fines, (supposedly between the council and the offender), but there was no concrete impact on your property through construction or disturbing noise – the impact mainly when you or your kids actually went out on the street among seedy characters (and this ambience affecting property prices, but try and PROVE the figures!), then it would be a case of the brothel owner saying “show me the title to the ambience, given that anyone, property owner or not, from this suburb or not, has a right to the footpath and the roads …. or just close your eyes, put your fingers in your ears, and suck it up”

  19. Posted May 6, 2012 at 2:04 pm | Permalink

    [email protected] Glad you liked it. While we are having a Stars Wars kick, those crazy Iranians are at it again.

  20. Tonk v Kitty
    Posted May 6, 2012 at 4:43 pm | Permalink

    The easiest way for developers and owners to avoid restitution in Planning Enforcement Order matters is to hide behind a two-dollar company, suddenly going insolvent or bankrupt. Perhaps changes to relevant legislation to allow for Enforcement orders to run with the land instead of the “person” will actually see restitution. A company search reveals that Wulguru HeightsP/L is in administration; Councils must weigh up the financial impost on its ratepayers by taking further legal action, so victories in planning and development offences are often short-lived.

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