When a storm causes flooding or a landslide, it is tempting to characterise the damage as an unavoidable natural event. However, a recent, and important, High Court decision confirms that severe weather will not necessarily relieve a landowner of responsibility where a known hazard on their property contributes to damage on neighbouring land.
In Larsen v Runes Investments Pty Ltd, the High Court upheld a finding that a homeowner was liable in ‘private nuisance’ for damage to her neighbour’s property following a landslide during Cyclone Gabrielle. It also upheld orders requiring her to undertake retaining works and pay $350,000 in damages.
What happened?
The dispute concerned two neighbouring hillside properties in Thames. Runes Investments purchased 303A Fenton Street in 2013, while Ms Larsen purchased the adjoining property at 303B in 2014.
Before either party acquired their property, a previous owner of 303B had cut into the slope to construct a concrete driveway.
In 2015, Runes Investments noticed a slip beside Ms Larsen’s driveway. Water flowing across the land had undercut the bank. An engineer identified a risk of further instability and recommended a retaining wall, then estimated to cost less than $4,000.
Runes provided Ms Larsen with the report and quotation. Further expert reports concluded that stormwater from 303B was being concentrated and discharged onto 303A, causing flooding and erosion, and that the slope beside the driveway was unstable.
Although Ms Larsen indicated that she would address the issue, the recommended works were not completed. Runes Investments commenced proceedings in 2019.
In 2022, Ms Larsen and a friend constructed an unengineered stacked timber structure at the foot of the bank. During Cyclone Gabrielle in February 2023, a substantial volume of land slipped from 303B onto 303A.
The District Court found Ms Larsen liable in ‘private nuisance’. Private nuisance protects a landowner’s right to use and enjoy their land without substantial and unreasonable interference originating from another property. She was ordered to carry out retaining works and awarded Runes Investments $350,000 in damages and $192,000 in costs.
The High Court dismissed Ms Larsen’s appeal on all five grounds.
Key lessons and legal principles
The decision provides several important lessons for property owners:
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You can be liable for a hazard before it causes damage
A known hazardous condition, such as an unstable bank or inadequate drainage, may amount to a nuisance for which a landowner is liable before a collapse or other physical damage occurs. The relevant questions include whether the owner knew, or ought to have known, about the hazard and whether it presented a foreseeable risk to neighbouring land.
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Owners can be responsible for problems they did not create
Ms Larsen had not undertaken the original earthworks, but that did not prevent liability. An owner who knows, or ought to know, about a nuisance (hazard) on their property may become liable by failing to take reasonably prompt and effective steps to address it.
Liability is not automatic. An owner has a duty to take reasonable and practicable steps to remove or reduce the nuisance. What is reasonable depends on the nature and likelihood of the risk, the practicality and cost of addressing it, and the owner’s ability to undertake the work.
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Warnings and the response to them matter
Ms Larsen received expert reports over several years identifying the risks and recommending remedial work. A relatively inexpensive solution had been available since 2015. The unengineered timber structure was not a reasonable substitute and, on the expert evidence, may have worsened the problem.
Courts will consider not only whether an owner received warnings, but also whether their response was timely and effective.
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Foreseeability concerns the type of harm
Damages are recoverable only where the relevant harm was reasonably foreseeable. However, it is the general type of harm, rather than the precise sequence of events, that must be foreseeable.
Although expert evidence was needed to explain the landslide’s mechanics, specialist knowledge was not required to appreciate the general risk that wet, unstable and unretained land could slip during bad weather. The fact that the slope had remained in place for several years did not make the eventual damage unforeseeable.
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Extreme weather is not an automatic defence
Cyclone Gabrielle triggered the landslide but did not relieve Ms Larsen of responsibility. The Court indicated that there may be limits to the extent to which an extreme weather event affects liability, particularly where the type of harm was foreseeable.
The damages award allowed for the likelihood that some damage would have occurred in any event. The expert evidence was that appropriate drainage and retaining works would probably have limited the cyclone’s effects to relatively minor landscaping damage.
Why is this decision important for homeowners?
The decision is particularly relevant in the context of climate change and the increasing frequency and severity of extreme weather events. Heavy rainfall can expose or worsen existing drainage and land-stability problems.
Severe weather will not necessarily protect an owner who has failed to address a known hazard. If the general type of harm was foreseeable, a storm may simply trigger an existing risk and crystallise liability.
Property owners should take warnings seriously, obtain advice from suitably qualified professionals and act promptly. Informal or do-it-yourself solutions may be inadequate where geotechnical stability, stormwater or structural retaining work is involved. Prospective purchasers of hillside properties should also consider geotechnical and drainage investigations, as owners may become responsible for hazards created by their predecessors.
Owners whose properties are affected by conditions on neighbouring land should document the problem, retain correspondence, obtain expert advice and formally notify the neighbouring owner.
Larsen v Runes Investments Pty Ltd is a timely reminder that responsibility does not always stop at the property boundary. If you have concerns about stormwater, land stability, retaining works or a neighbouring property dispute, please contact Lane Neave’s Litigation and Dispute Resolution team.
Lane Neave acted for Runes Investments Pty Ltd, the successful plaintiff at trial, and respondent in the High Court appeal.
