Hi Ian,
I sympathize with what your going thru. Few years ago when we moved into our house, not long after this nutter moved into the house next door. This woman and her teenage daughter would have constant arguments over who smoked the last bit of dope and sex when boyfriends. (Constant swearing,, literally every 3rd word f this, you c#$t,yelling all hours of the day and night, so much so we were embarassed to invite friends over. We had 2 small kids aged 4yr and it wasn't right they should be subjected to this foul rubbish.
I remember getting the fence fix and the tradies copped a tirade of abuse
Its funny now looking back, but at that time in our lives it was pretty miserable.
It appeared she came from an abusive relationship and one thing that dumbfounded us the most was one morning in winter at 2am, she was playing with her 3yr old (which appeared she only had visitation rights only) playing in a makeshift swingset outside - just crazy. I kept a dossier of her rants, phone calls to police (they were useless), threats made to us and her strange behaviors etc. Literally took 16 months to get her evicted !!! She was getting rent on the cheap thru the Anglican church so she wasn't going to give that up without a fight.
The scary and sad thing is that she only moved to the next suburb and I truly pity her new neighbours. People like that don't change, destined to be social outcasts.
Keep your chin up mate! Its a downer of a situation to be in, but try not to let it consume you or your wife's energy. Things will eventually improve and get better.
Cheers Norm