The gutter is damaged anyway, I'd also be adding the replacement cost to the bill.

Yes, it would be at your expense and I'd expect if your neighbours builder is proven to be in the wrong that you'd have a good case to get the…

Althom is correct in saying that you need to get that lot boundary surveyed first.
What makes you think that the next door neighbours house was built 50mm over your boundary?…

omg, I can barely build anything for 350K in Canberra. You, guys, are lucky there! Not very practical advice, but just offering perspective

No amount of hot water is ever going to start a fire.

...insulation is also to keep the cold water cold, I think that is in the As3500 now, best wait till a plumber responds!