My wife spoke to the planning officer who came out and she said she was very nice. Loved the fence and and said retrospective planning shouldn't be a problem.
STOP thinking the planning lady is nice, there is no such thing. Planners are there to stop development end of story, it's the only way they can justify being there, if they let all development go ahead, why bother having planning?
Yes, strange that isn't it! Height doesn't need to be part of the refusal, you HAD to apply because of height, they have refused on other grounds. If your reduce the height they can do nothing.The strange thing is the same lady emailed me back after the refusal to ask if I wished to now lower the fence! (obviously they don't speak to one another). I wrote back politely last week saying height was not mentioned in the actual refusal at all.
As far as I am aware I have Permitted Development rights and we are not in a conservation or any other special area. One point though my house used to belong to the railway (we bought over two years ago on the open market),
I would guess looking at the house that you do have PD rights and the fact that they have allowed your neighbour to put that fence up seems to confirm it (2m allowed if more than 2m away from the road).
the psycho's house next door used to be council and they bought under 'right to buy' scheme. Our nice neighbour on the other side of the overgrown hedge rents from the council I believe.
The mix of old railway/council is a bit odd if they are terraced but I guess the council could have taken them off or supplied them for the railway.
Who owns the grass strip and how far back is the fence from the highway? I believe you are allowed upto 2m if 2m or more from the "highway".
Options
Talk to the contractor about reducing the height of the fence, they will probably be able to do something.
Hack the fence yourself
Appeal the refusal, say that the fence pays hommage to the railway (lots of stations had that kind of fencing) and doesn't obscure any view etc
I'm sure you can find plenty of cottage/railway properties with similar fences... http://www.rightmove.co.uk/property-for-sale/property-21302409.html
Do nothing, let the council decide whether or not to enforce over a minor breach. The fact that your neighbour has the huge fence (though running in a different direction) right next to your fence I would hope any enforcement you appeal against would take note of.
One more thing though and don't be offended by this, it appears that trouble follows you, that may just be a very unfortunate set of circumstances but sometimes people need to take a step back and think about their actions and what the consequences may be. From what I can make out you objected to your neighbour attaching to your "party wall", could this have stirred up the problems in the first place? Not that I'm saying you weren't within your rights, it's just that sadly some people don't play fairly! It's clear that your family are very important to you and sometimes it's worth sacrificing a battle to win the war
The whole setup of your bigger story sounds very very very strange, I hope it improves! Be careful out there!