Thanks very much for the advice guys much appreciated.

I think I'll let him keep his shed as its up in the back corner and in an area that I don't particularly need and next to it on MY side of the fence is where the pool equipment is going to go so won't be used a great deal. Hopefully this will get me get him on side a bit and we can discuss pushing the rest of the fence back to its rightful position. I don't really want to make an enemy out of him as I'm planning to move my family into this renovated place in a few years. The fence has to go anyway as its the old asbestos panel style fence and looks disgusting so when we put the new one up hopefully it will be 3m back to his side, 

If this fails I will put a free 2 night stay on the gold coast (we live sunshine coast ) voucher in his letter box for a particular weekend and when he and his wife return from a lovely weekend he will find that his property has shrunk by 3 meters but there will be a beautiful new fence for him to look at.  

Keep u updated!!

Regards,
Chris