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I think I misread it the same way you did at first. :) I think MTR means that the existing fence is lower in height than 1.8m and therefore is suggesting it's not a "sufficient fence". I believe MTR plans to build a 1.8m fence. i.e. when MTR says "my fence", she's referring to the existing...

Does Council have a local law saying that dividing fences have to be 1.8m? If not, it appears that if the existing fence was agreed upon between the owners at the time it was erected, then it is by definition a sufficient fence...

Which state is the development in? Edit: Duh, WA, got it! I would have thought not, but will reserve judgement until I've seen the legislation. :)