This looks like a small part of a bigger garden, so is it pretty much expendable? The fence is a bit rough - you should look at your deeds to see if it belongs to you before you decide exactly what to do. As it appears to be only 5 or 6 metres long it wouldn't be a big job to take it down and replace it with a 6-ft fence of feather-edged boards. Once that looks nice and neat you might feel as though that bit of the garden properly belongs to you instead of being haunted by your neighbour and be more inspired about planting plans. Good suggestions above for shrubs and ground cover to just fill up that corner and forget it.