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I imagine there could be some arguable grey area around whether the wood chip was clearly on your property or the footpath/verge. If you had a front fence or some other visible "barrier" which would imply a fence line, then there could be no excuse or defense. But if not, then there may be a reasonable degree of uncertainty that would allow your thieving neighbor to escape the consequences.
Only you can really say.
If you are clear that there could be no mistake about it, I would not hesitate to call the police. That sort of conduct should not be tolerated. You've already lost any existing or potential good relationship you may have had with this person so really, what possible reason could you have for not proceeding? Make sure you take plenty of photos and measurements though.
Peter
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