Wow!
Sounds like a nightmare neighbour
I cant visualise what you are saying about their extension and your wall being linked?!! and the drainpipe issue is also hard to work out from words alone...
Can you please post some pictures showing the possible issue with regards to the wall(s) and drainpipe issue as we will have a much better idea.
You are DEFINATELY doing the right thing but do your best to not get them booked down as a formal 'nightmare neighbour' as this could make selling your house vvverrrry difficult. its bad for any potential buyer, but they 'may' get on with them better?
You are totally entitled to build a new fence if it is your side of the boundary however I think it has to be 1 metre from the border iirc
Im guessing talking to them doesnt work?
if not, (pics needed) if it is an issue you could pursue the wall and drainage issue and use it as leverage if needed.
My current house is one of 3 in a row that were privately built by a private builder in the 1950's..
Luckily my neighbours are ok however if they werent there are several issues that could become a problem...
The builders were obviously flexible with their plans and as such boundary lines are very vague in some places and next door has a brick outbuilding poking about 2 foot over my boundary. In addition to drainpipes running down the same!
Hope you can get some piccies of it