This looks more like trolling than anything else. This Demon character knows that you responded to his building so nearby. He also seems to know that by building a wall like the one he did, he would technically 'claim' that area, so that you would trigger grief alerts for removing it. I think his structure definitely ought to be moved, due to the rules, stating to build at least 50 blocks away. However, from what I can see of his character by this little stunt, that's unlikely to happen without him being 'coerced' by people who have the power to do something about it.
I think it may just be easier, assuming he doesn't pack up and leave himself, to just rebuild your home in another area, further away from spawn. And when you stake out that area, surround it with torches, and possibly a fence of some sort, to give yourself a bit more room to work with, in case something like this happens again. Other than that, I think your best bet is to get lucky in terms of mods not being particularly busy the next time you're on.