I did find this little nugget of info on a WA info sheet
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Fences Constructed Adjacent to a Dividing Fence
Situations may arise where a property owner wishes to construct a
fence on his/her own land adjacent to an existing dividing fence.
The Act does not prevent this second fence from being erected,
however, it is recommended that you contact your local government
to find out whether it has any restrictions on structures of this type.
Note: Your adjoining owner may still claim a half contribution for the
existing dividing fence, even where you erect a second fence on your
property adjacent to it.
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I suppose the risk I run is that the neighbour could go ahead a build a fence on the boundary and ask for half of the cost.
I'm hoping that if I build a fence on my side then firstly my neighbour will not bother about building a fence on the boudary and just make do
or
is unable to build a fence on the boundary because the gap between my fence and his retaining wall will be about 200mm.