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Where is the fence? On the property line? Inset (by how much) from the property line? Does it follow the previous fenceline? If so, who owned that fence?
$700 is far less than a third of $3200; closer to a fifth (actually 22%). A third would be $1067. The sharing the cost of a fence between properties is common. The biggest issue you have is lack of communication. Did you ever say, "Neighbor, I am strapped for $$ trying to get the house finished, and right now I simply cannot spare more than $700 to contribute to financing the fence." That could have led to a fuller discussion on timing & style & while you might not have spent anymore, would have prevented ill will. You would have been able to say that his big plans are great for him, but not so much for you.
If the fence is on the property line, paying for half the cost of a regular (not furniture grade) fence as was suggested seems like a reasonable compromise. If offset into his property, then I don't think you should pay at all. In either case, it is awise idea to check your state and local laws, just so you know the legalities of what is required.