IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2019-419-000070
[2021] NZHC 1027
BETWEEN NORMAN CLIVE AUSTIN and MARGARET IRENE AUSTIN
PlaintiffsAND
RENTREZI 2 LIMITED
First Defendant
PRAGMA DESIGNER HOMES LIMITED
Second DefendantAHL RENTALS LIMITED
Third Defendant
Hearing: 19 – 23 April 2021 Appearances:
V A Whitfield for Plaintiffs
T M Braun and U B Keller for First and Second Defendants No appearance by or for the Third Defendant
Judgment:
10 May 2021
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie On 10 May 2021 at 12.00 noon
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
O’Sheas Barristers & Solicitors, Hamilton/V Whitfield, Cambridge Braun Bond & Lomas Ltd, Hamilton
AUSTIN v RENTREZI 2 LIMITED [2021] NZHC 1027 [10 May 2021]
Introduction
[1] The plaintiffs, Norman and Margaret Austin, are the owners of a property located at 21 Hillary Street, Chedworth, Hamilton. Their property is accessed by a right of way.
[2] The right of way is likely to have been created sometime in 1974 or perhaps 1975. Initially it provided access to two other lots as well. In 2006, these two lots were subdivided and two new lots were created. The largest of the new lots was ultimately purchased by the first defendant, Rentrezi 2 Ltd (“Rentrezi”).
[3] Rentrezi has built four residential units on part of the lot it purchased. The construction works were carried out by the second defendant, Pragma Designer Homes Ltd (“Pragma”). The lot has been further subdivided and separate titles have issued for each of the new units and for the balance of the land. Rentrezi transferred the titles with the new units on them to Pragma, which in turn sold them to the third defendant, AHL Rentals Ltd (“AHL”). AHL retains the properties and the units are rented out to tenants. The tenants are using the right of way to access the units.
[4] In broad terms, these proceedings concern the use made of the right of way by Rentrezi and Pragma when the units were being built and the use being made of the right of way by AHL’s tenants now that the units have been completed.
Background
The right of way
[5] Hillary Street was previously a blind street terminating at the boundary of a large block of land. In 1973 this land was subdivided into a number of lots. The plan of the subdivision was deposited on 14 December 1973. It was allocated number DPS 17999. A copy of this plan is annexed – Annexure A.
[6] Hillary Street became a formed cul de sac as a result of the subdivision. The head of the cul-de-sac was shown as lot 21 on DPS 17999. It was to vest in the Hamilton City Council as a street. DPS 17999 also showed a right of way coming off lot 21 to provide access to lots 3, 4 and 5 on the plan. Each of them, lots 3, 4 and 5, is
connected to lot 21 by a narrow strip of land. Each lot was to concede a right of way in favour of the other two lots over its strip of land and each lot received a grant of a right of way from the other two lots over their strips of land. Each lot was a dominant and servient tenement (or to use more modern terminology – benefitted and burdened land).
[7] The terms of the rights of way to be created were set out in Easement Certificate S 649279 dated 14 February 1974. It adopted in full the rights and powers of grantees implied in rights of way by s 90D(1) of the Land Transfer Act 1952 (since repealed). It reads as follows:
1.Right of Way
The full, free, uninterrupted, and unrestricted right, liberty, and privilege for the grantee, his servants, tenants, agents, workmen, licensees and invitees (in common with the grantor, his tenants and any other person lawfully entitled to do so) from time to time and at all times by day and by night to go pass and repass, with or without horses and domestic animals of any kind and with or without carriages, vehicles, motor vehicles, machinery, and implements of any kind, over and along the land over which the right of way is granted or created.
Under the legislation then in force, these rights could have been varied or excluded. However, no varied, additional or substituted provisions were put in place; nor were any other specific terms, conditions, covenants or restrictions imposed.1
[8] The right of way runs off the end of Hillary Street in an east to west direction. The legal width of this section ranges from 4.96 metres to 5.11 metres. The right of way then turns to run in a south to north direction. The bend is relatively sharp, a little but not much less than 90 degrees. The inside of the corner is chamfered. The right of way then runs down the eastern boundary of lots 4 and 5 for a distance of approximately 30 metres before terminating at the boundary of lot 3. The legal width of this section ranges from 3.67 metres to 3.78 metres.
[9] The house owned by Mr and Mrs Austin is situated on lot 3 DPS 17999. It was built in 1975 and Mr and Mrs Austin purchased the property in 1986. The legal title
1 The rights and powers implied by s 90D continue to apply notwithstanding the repeal of the Land Transfer Act 1952; see Land Transfer (Computer Registers and Electronic Lodgment) Amendments Act 2002, s 66(1).
to the Austins’ property is identifier SA 19D/218, South Auckland Registry. Relevantly, the title records that:
(a)“appurtenant hereto are rights of way specified in Easement Certificate S 649279”;
(b)it is subject to “a right of way over part marked A on DPS 17999 specified in Easement Certificate S 649279”;
(c)the easements are subject to s 351E(1)(a) of the Municipal Corporation Act 1954; and
(d)there was a partial surrender of the right of way registered on 23 November 2006.
[10] Lot 4 DPS 17999 should have been known as 23 Hillary Street but this did not happen because lots 4 and 5 were initially in common ownership. A large house was built on lot 5 in 1974. Lot 4 was developed with a swimming pool, a tennis court, extensive open lawns and landscaping. All of these amenities were used by the owners of the house on lot 5 and the whole property was known as 25 Hillary Street.
[11] Lots 4 and 5 DPS 17999 remained in common ownership until 2006. The lots were then subdivided again and two new lots were created – lot 1 DP 373778 comprising 105 square metres and lot 2 DP 373778 comprising 1418 square metres. There was a partial surrender of the easement in respect of lot 1 which was then amalgamated with the title to an adjoining property. The easement however remained in place in respect of lot 2 DP 373778.
[12]Rentrezi ultimately purchased lot 2 DP 373778.
[13] Counsel did not produce copies of the underlying titles for either lot 4 or lot 5 DPS 17999. Rather, they referred me to the underlying title for the land which Rentrezi purchased – lot 2 DP 373778. Relevantly that title, identifier 297889, South Auckland Registry, recorded that:
(a)“appurtenant hereto are rights of way specified in Easement Certificate S 649279”;
(b)it is “subject to a right of way over part marked B on DP 373778 specified in Easement Certificate S 649279”;
(c)the easements are subject to s 351E(1)(a) of the Municipal Corporation Act 1954; and
(d)document H 626700, issued pursuant to s 643(2)(4) of the Local Government Act 1974, was registered on 18 November 1985.
[14] As can be seen, the entries on the titles are, in most respects, identical. I deal with each entry in turn:
(a)As already noted, that section of the right of way which runs off the end of Hillary Street in an east to west direction comprises three strips of land – one strip belonging to each of lot 3 and what were lots 4 and 5 DPS 17999. That section of the right of way which runs down the eastern boundary of what were lots 4 and 5 DPS 17999 comprises two strips of land. Strip A is part of lot 3. It is approximately 3.05 metres wide. Strip B is part of what was lot 4. It is approximately .6 to .7 metres wide. The easement certificate records that each lot has the benefit of a right of way over the strips that are part of the other two lots.
(b)The second entry on the titles records the reverse situation. Lot 3 DPS 17999 is subject to a right of way over that part of the lot as is marked A on DPS 17999. Lot 2 DP 373778 is subject to a right of way over that part of the lot as is marked B on DP 373778.
(c)The entry referring to s 351E(1)(a) of the Municipal Corporations Act 1954 records that the easement was compulsory from the local authority’s perspective. The evidence was that, without the rights of
way set out in the easement certificate, the Hamilton City Council would not have approved the subdivision; the rights of way were necessary to ensure that lots 3, 4 and 5 had road access and were not landlocked.
(d)The partial surrender of the rights of way which is recorded on the title to lot 3 DPS 17999 occurred when lots 4 and 5 were subdivided in 2006
– see above at [11]. The partial surrender is dated 17 November 2006. It was signed by Mr and Mrs Austin as the grantors of the easement over their strip of land and also by the then owners of lot 2 DP 373778 as the grantors of the easement over their strips of land. Lot 1 DP 373778 was then amalgamated with another lot to the north and thereafter it was accessed via a separate right of way coming off another street also to the north.2
(e)The underlying title to lot 2 DP 373778 refers to document H 626700. This is a certificate issued under s 643(2) of the Local Government Act 1974. This section has since been repealed but at the time it dealt with the situation which arose where the owner of land wished to build over two lots. The evidence suggested that the owner of lots 4 and 5 DPS 17999 had applied for a permit to erect a house to be situated on both lots. As a result, the Hamilton City Council required that lots 4 and 5 be held together and not sold separately.3
2 Prior to execution of the partial surrender, a cancellation notice was signed by the Hamilton City Council. It was dated 26 October 2006 and it recorded that, pursuant to s 243(e) of the Resource Management Act 1991, the Council revoked the right of way registered as easement certificate S 649279 as it pertained to lot 4 DPS 17999. The easement certificate having been required by the Council pursuant to s 351E(1)(a) of the Municipal Corporations Act, this cancellation notice was necessary to permit the partial surrender of the easement. The unchallenged expert evidence at trial was that the rights recorded in the easement certificate were affected only by the partial surrender of the easement and not by the cancellation notice signed by the Hamilton City Council. The partial surrender provided only for the surrender of the easement in respect of that part of lot 4 DPS 17999 as became lot 1 DP 373778. The cancellation notice did not extend the ambit of the partial surrender of the easement.
3 Although there was no evidence in this regard, it appears that this document has been overtaken by the deposit of DP 373778 because that deposited plan, creating lots 1 and 2 DP 373778, was approved by the Hamilton City Council. Further, in any event, as part of the building works undertaken by Rentrezi and Pragma, part of the original house was demolished. New titles have been issued for the land on which the new residential units which have been built, as well as for the land on which the remainder of the original house is still situated. Again, the Hamilton City Council consented to this subdivision.
[15] Although there was no evidence in this regard, it would appear that the rights of way specified in the easement certificate were not created when the easement certificate was registered. Rather, they were deemed to be created immediately upon the registration of a transfer of any one of the three lots – lots 3, 4 and 5, DPS 17999.4 There was no evidence as to when the first transfer occurred, although I note that title to the Austins’ property was issued on 15 October 1975.
Use made of the right of way
[16] Over the years, the owners of the house on what was initially lot 5 DPS 17999 did not use that section of the right of way which runs from the near 90 degree corner in a south to north direction to the boundary of the Austins’ property. As a result, the Austins had exclusive use of that section of the right of way with no interference from any other property owners.
[17] In 2013, the Austins and the then owners of what was by then lot 2 DP 373778 replaced the fence between the right of way and the rear (or northern part) of lot 2 DP 373778. A nine metre section of wooden fencing, which was in a state of disrepair, was demolished and replaced with a block wall. The block wall was on lot 2 DP 373778. It was contiguous to the eastern side of the right of way and ran from the corner in the right of way to the entrance to the Austins’ property. The Austins and the owners of lot 2 DP 373778 shared the costs involved. The installation of the block wall effectively sealed off access to the right of way from the rear of lot 2 DP 373778.
Sale of lots
[18] At some stage, the owners of lot 2 DP 373778 sold the lot to a company known as D360 Ltd.
[19] Sanjil Mistry, who is a director of both Rentrezi and Pragma and a shareholder in the parent of both companies, Pragma Property Group Ltd, became aware of lot 2 DP 373778 sometime in early 2016. On 8 June 2016, he signed an agreement to
4 Land Transfer Act 1952, s 90A (now repealed).
purchase the lot from D360 Ltd. It was a condition of the agreement for sale and purchase that D360 Ltd obtain resource consents permitting:
(a)the construction of either four additional freehold three bedroom units on the lot (keeping the original house) or alternatively for six additional three bedroom units (with the removal of the original house); and
(b)subdivision of the lot to create separate titles for each of the proposed new units.
[20] In April 2017, the principal of D360 Ltd, Tristan Jones, visited the Austins with a set of plans showing the proposed development of two duplex units at the northern end of lot 2 DP 373778. Once they became aware of the proposal to develop lot 2 DP 373778, Mr and Mrs Austin engaged in a spirited and long-running campaign with the Hamilton City Council and with a number of others, including Rentrezi, Pragma and AHL, to try and stop the proposed development.
[21] Despite the Austins’ objections, the Hamilton City Council issued a resource consent for the development on 24 July 2017. The consent permitted the construction on lot 2 DP 373778 of two new “duplex dwellings” and the retention of the existing detached dwelling house at 25 Hillary Street. Further, on 27 July 2017, the Council issued a subdivision consent permitting the subdivision of lot 2 DP 373778 into five fee simple allotments – one for each of the new residential units to be built and one for the existing detached dwelling house.
[22] Once D360 Ltd had obtained the resource and subdivision consents, Mr Mistry was comfortable that there were no issues with the proposed development. The agreement for sale and purchase with D360 Ltd was made unconditional on 3 August 2017. Settlement occurred on 1 September 2017 and Rentrezi then became the owner of lot 2 DP373778.
[23] The construction of the new residential units by Pragma commenced in September 2018 and code compliance certificates were issued in late April 2019. Some maintenance works were carried out thereafter.
[24] Rentrezi was approached at any early stage by a group of property investors and the new residential units sold off the plans. Agreements for sale and purchase were entered into in February 2018.
[25] A plan for the subdivision of lot 2 DP 373778 was deposited on 26 February 2019 and titles for each of the four new residential units were issued on the same day. The purchasers lodged caveats to protect their interests. The lots were subsequently transferred by Rentrezi to Pragma on 6 March 2019. The purchasers lifted the caveats for this purpose. Once the transfer had been registered, they placed new caveats over the titles. The purchasers nominated AHL to complete the purchases and it became the registered proprietor of the titles to the new residential units on 7 May 2019. AHL has let the units out to residential tenants since becoming the owner.
[26] On 15 June 2018, Pragma entered into an agreement for sale and purchase with another purchaser in respect of the other new lot which had been subdivided off from lot 2 DP 373778 and on which part of the original detached dwelling house known as 25 Hillary Street remained. The agreement for sale and purchase was settled and the property was transferred to the purchaser on 5 April 2019.
[27] Against this rather convoluted background, I turn to consider the statement of claim.
Statement of claim
[28] The first cause of action is against all three defendants. The Austins seek a declaration that the benefit of the right of way does not pass to the recently subdivided lots on which the new residential units have been erected. They assert that the right of way does not contemplate the subdivision of lot 4 DPS 17999 and that it was limited to “the form of a single lot 4 and 5”.
[29] The second cause of action is against AHL only. The Austins assert that the use being made of the right of way by AHL and its tenants constitutes a trespass. They say that they have the right to use their property, including that part of their property as is marked A on DPS 17999. They assert that the occupants of the new residential units are using the right of way to access the units. The Austins say:
(a)either that this use is unauthorised; or
(b)that the right of way does not authorise “the unlimited use by the subdivided lots so as to interfere unreasonably with the use by other persons authorised to use the right of way”.
They further say that the right of way is not sufficiently wide to accommodate more than one vehicle, that visibility on the corner is obscured and that the entrance to the subdivided lots creates a heightened risk of an accident. They assert that the number of vehicle movements from the subdivided lots cannot be accommodated by the width and configuration of the right of way and that the use being made of the right of way by the occupants of the new residential units unreasonably interferes with their use of the right of way. They allege that the use being made of the right of way is either unauthorised or excessive. They complain that this has caused a diminution in their amenity and in the market value of their property and that it has resulted in stress and anxiety to them. They seek an injunction preventing AHL and/or the occupiers of the recently subdivided lots from using the right of way, or alternatively from using the right of way excessively. They say that any injunction should, amongst other things, define the number of vehicle movements that can be permitted and prevent the right of way being used for any vehicle movements which exceed the defined number. In the alternative, they seek special damages being the loss in value or amenity value of their property, estimated to be $80,000, general damages in the sum of $50,000 and interest on these sums under the Interest on Money Claims Act 2016.
[30] As a third cause of action, the Austins assert nuisance by all defendants. They say that they have the right to use that part of their property as is marked A on DPS 17999 and those parts of lots 4 and 5 DP 17999 marked B and C on the plan as a right of way. They assert that the occupiers’ use or excessive use of the right of way interferes unreasonably with their use of the right of way and that they have suffered harm as a result and will continue to suffer harm. They say that Rentrezi and Pragma created the state of affairs which exists. Again they assert diminution in their residential amenity and in the market value of their property as well as personal stress and anxiety. They say that before construction, they informed Rentrezi and Pragma that their proposals would create a state of affairs that would give rise to a nuisance,
that they repeated this warning during construction, but that Rentrezi and Pragma did not cease to create the state of affairs. They claim additional injury and an increased loss of dignity due to the disregard of their rights they say has occurred. They seek damages as noted above, together with aggravated and/or exemplary damages in the sum of $20,000.
[31] As a fourth cause of action, the Austins assert that Rentrezi and Pragma have trespassed on their property. They say that while the new residential units were being constructed, vehicles constantly parked on the right of way impeding their access to their house, that services to their property were disabled or interrupted, that rubbish, dust and debris were not contained and collected on their property and that noise from construction continued after normal working hours. They assert that the right of way does not authorise the interference which occurred and say that they have suffered loss as a result. Losses are said to include the legal costs they incurred in addressing the problem, as well as the expense of fixing physical damage to their property caused by the trespass. They say that they informed Rentrezi and Pragma that they were causing a trespass but that Rentrezi and Pragma did not cease their activities. They claim damages of $19,500 for the costs and expenses they say they have incurred, together with general damages of $50,000, or in the alternative, general damages, as well as aggravating and exemplary damages in the sum of $20,000.
[32] As a fifth cause of action against Rentrezi and Pragma, the Austins assert nuisance. They say that Rentrezi and Pragma unreasonably interfered with their right to use their property while the new residential units were being constructed. They seek nominal damages on account of the nuisance created as well as specific damages in the sum of $19,500, general damages in the sum of $50,000 and aggravated and/or exemplary damages in the sum of $20,000.
Statement of defence
[33] In large part the statement of claim is admitted by Rentrezi and Pragma. They deny the causes of action raised against them. In regard to the first cause of action, they deny the Austins’ assertion that the benefit of the right of way did not pass to the newly subdivided lots. They do not plead to the second cause of action. In regard to
the third cause of action, they admit that the Austins have the right to use the right of way, but go on to say that the occupants of the new residential units also have the right to use the right of way. They assert that the use of the right of way by the occupiers of the new residential units does not unreasonably interfere with nor create an excessive or unauthorised use so as to interfere with the Austins’ right to enjoy their property, and that neither the number of vehicle movements, nor the construction or configuration of the right of way creates a heightened risk of accident or unreasonable interference with the use of the right of way. They deny any ongoing nuisance and put the Austins to proof of the damages claimed by them. They also deny any trespass during construction as alleged in the fourth cause of action, and say that their construction activities did not cause substantial or unreasonable interference with the Austins’ enjoyment and use of the right of way. They deny disrupting services to the Austins’ property and again put the Austins to proof of the damages claimed. They take the same stance with the fifth cause of action – nuisance during construction.
[34] Rentrezi and Pragma also raise a number of affirmative defences. First, they allege consent. They say that on or about 30 May 2019, the Austins confirmed that the right of way could be used by all parties and that they were satisfied in all respects with the access way, fencing and construction. Secondly, they assert that they had lawful authority to use the right of way. Thirdly, they assert statutory authority arising from the grant of the resource consents. Finally, they assert that the Austins have been guilty of laches (or unreasonable delay).
Overlap
[35] There is considerable overlap between the various causes of action. Causes of action one and two run together. There is also an overlap between the second cause of action and the third cause of action, and between the third cause of action and the fourth and fifth causes of action. I now turn to consider each cause of action and, where relevant, the affirmative defences.
What does the right of way permit/does it benefit the recently subdivided lots?
Submissions
[36] Ms Whitfield, for the Austins, submitted that this cause of action turns on the interpretation of the easement certificate. She noted that the word “grantee” is not defined in the easement certificate and that there is no provision in the certificate that entitles the benefit of the easement to be passed on to subdivided lots. She referred to and sought to distinguish relevant case law. She argued that, as a matter of law, a covenant creating an easement can benefit only the land in its original form. She referred to the wording of the easement certificate and to the factual circumstances which she argued existed when the easement was granted, submitting that the rights created by the easement were not in favour of every part of the benefitted lands and did not expressly contemplate subdivision. She submitted that the size and configuration of the right of way is such that it is reasonable to conclude that the subdivision was not contemplated and that, at the time of its creation, it was not contemplated that the easement would provide access to the two duplex dwellings. It was the Austins’ position that, in the absence of an express grant to any part of the lot, and against the applicable factual background, the easement falls to be construed such that it does not attach to the subdivided lots.
[37] Mr Braun, for Rentrezi and Pragma, agreed that the extent of the easement depends upon the extent of the grant. He referred to the wording of the grant and to relevant case law, and argued that where benefitted land is subdivided, there is a presumption that the easement attaches to the subdivided parts. He argued that, unless an easement expressly provides to the contrary, the rights created by an easement attached to subdivided lots. He noted that there are no restrictions in the easement certificate in issue in this case. He also noted that the easement is recorded on the titles to the recently subdivided lots and that AHL purchased the four lots with the easements registered on the title to each lot. He argued that to make the declarations sought by the Austins would cut across the principle of indefeasibility of title and run contrary to the provisions of s 51(1) of the Land Transfer Act 2017.
Analysis
[38] Traditionally, the scope of an easement fell to be construed according to the natural meaning of the words contained in the document as a whole, read in the light of the surrounding circumstances existing at the date when the instrument was executed. Case law suggested that in construing a grant of right of way, the Court should consider, inter alia:5
(a)the physical circumstances of the burdened land at the date of the grant;
(b)the nature and description of the land or buildings comprising the benefited land; and
(c)the purpose for which the way was intended to be used.
[39] The principles of interpretation of contractual documents generally have been reconsidered and reformulated by the Courts in recent years. Broadly, it is now accepted that the Courts can take into account evidence extrinsic to the wording of the contract itself, including the background knowledge that would reasonably have been available to the parties in the situation they were in at the time the contract was entered into.6
[40] The Courts have considered specifically the construction of easements and other publicly registered documents. It has been held that the public nature of registered instruments such as easements restricts the evidence that is admissible to assist in their interpretation.7 The Supreme Court (per William Young and O’Reagan JJ with whom Glazebrook J concurred) has noted that:8
5 GW Hinde and others Hinde McMorland & Sim Land Law in New Zealand (online ed, LexisNexis) at [16.037].
6 See for example Investors Compensation Scheme Ltd v West Bromich Building Society [1997] UKHL 28; [1998] 1 WLR 896; Boat Park Ltd v Hutchison [1999] 2 NZLR 74 (CA); Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444; and Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432.
7 Westfield Management Ltd v Perpetual Trustee Co Ltd [2007] HCA 45, (2007) 233 CLR 528 and see Opua Ferries Ltd v Fullers Bay of Islands Ltd [2003] UKPC 19, [2003] 3 NZLR 740 at [19]-
[20](concerning the interpretation of a public register of passenger transport services).
8 Green Growth No 2 Ltd v Queen Elizabeth the Second National Trust [2018] NZSC 75, [2019] 1 NZLR 161.
[73] A very flexible approach to the admission of extrinsic evidence as bearing on the construction of registered documents will promote litigation, and … has the potential to undermine the policy or indefeasibility of title. On the other hand, if we were to adopt a rigid rule excluding such evidence, there will still be marginal cases which will have to be addressed and, in some instances, perverse outcomes, despite there being no good reason why, as between the parties of the dispute, the extrinsic evidence should be ignored.
[74]Against that background, we consider that:
(a)Generally, registered documents should be construed without regard to extrinsic evidence which is particular to the original parties and is not apparent on the face of the register.
(b)This does not limit rights to apply for rectification, a topic which we address in the next section of these reasons.
(c)We would not exclude reference to facts which a reasonable future reader of the document could be expected to be aware of and would recognise as relevant and which they have access to, such as the configuration of land, any physical features to which the document relates or refers and any material referred to in the document.
[41] I have applied this approach in interpreting the easement certificate. I have ignored such limited extrinsic evidence as was adduced by the Austins. I note that, in any event, they were not parties to the execution of the easement certificate. They did not acquire an interest in their property until 1986. They can have no direct knowledge of such extrinsic matters as may have existed at the time the right of way was put in place. I have also placed no great weight on Ms Whitfield’s submissions insofar as she sought to derive support for her construction of the easement certificate from the district plan which she asserted was operative at the time the easement was created. A reasonable reader of the easement certificate would not, in my view, go back and look at the fine detail of a now defunct planning document prepared many years ago pursuant to legislation which has long since been repealed. Rather, I have focused principally on the wording used in the easement certificate.
[42]That wording is, in my judgment, clear and unambiguous. The grant is broad
– indeed it is difficult to see that the rights of passage granted could have been much more extensive. The grant permits each of the owners of lot 3 and what were lots 4 and 5 DPS 17999, together with their licensees, invitees, etc, to use the strips of land
owned by the others to access their respective lots.9 There is nothing in the easement certificate to limit this right in any way. Nor are there any facts which a reasonable reader could be expected to be aware of or would recognise as being relevant. The easement certificate does refer to DPS 17999 and that plan in turn depicts the right of way. It is clear from DPS 17999 that the right of way has a corner in it and that the south to north leg is relatively narrow. However, there is no restriction on the use of the right of way in the easement certificate notwithstanding its physical form. The purpose for which the mutual rights of way were granted is also obvious from the plan
– it was to provide access to and from each lot to lot 21 DPS 17999. Lot 21 was to be vested in the Council as a street (as the plan records). In my view, the rights of way were clearly intended to serve whatever use was made of lots 3, 4 and 5 DPS 17999. I visited the properties together with counsel. The properties are set amongst a large number of residential dwellings and the evidence was to the effect that residential land use is permitted in the general area. There is nothing however in the easement certificate or in the deposited plan limiting the use to which the lots could be put. Nor is there anything precluding the subdivision of any one or more of the lots.
[43] That a section of the right of way was used exclusively by the Austins for a number of years does not affect the rights granted. The right of way could have been modified or varied by agreement between the owners of the various lots but the Austins took no steps to try and persuade their neighbours to agree to partially extinguish the right of way.10 The Austins could also have sought a Court order to modify or extinguish the easement.11 They did not do so. Absent such steps, the Austins were always at risk if a subsequent owner wished to avail him or herself of the rights granted.
[44] Accordingly, I find that the grant permits the owners of each of the affected lots to use the right of way to pass and repass in order to access their respective properties. The right extends to, inter alia, the owner’s licensees and invitees. This
9 The owner of lot 5 DPS 17999 could also use the south north section of the right of way, along with his or her invitees, licensees, etc, even though he or she did not require to do so for access to lot 5.
10 This was a possibility at all relevant times: Land Transfer Act 1952, s 90E (now repealed); Land Transfer Act 2017, s 112.
11 This was also a possibility at all relevant times: Property Law Act 1952, s 126G (now repealed); Property Law Act 2007, s 317.
must include tenants. It can be exercised on foot or by any of the means of conveyance mentioned in the grant and with or without animals and the like.
[45] There is next a dispute as to whether these rights survived the subdivision of what became lot 2 DP 343778.
[46] Where benefited land is subdivided there is a presumption that the easement attaches to the subdivided parts. Similarly, on subdivision of the burdened land, the easement continues to bind each part of the land over which the easement exists. The presumption is subject to three provisos:12
(a)on its proper construction, the easement may benefit the benefited land only in its original form;
(b)the easement may not in fact accommodate some of the subdivided lots; and
(c)its attachment to each part of the subdivision must be possible without increasing the burden on the burdened land beyond the terms of the grant and the limits of the right.
[47] The leading authority for these propositions is the decision of the High Court of Australia in Gallagher v Rainbow.13 The majority, Brennan, Dawson and Toohey JJ, noted that the terms of the easements at issue in that case contained no prohibition against the transfer of a subdivided lot or the enjoyment of the easement by the purchaser of a subdivided lot. They held that the enjoyment of the easement by the registered proprietor of a subdivided lot was wholly consistent with the language of the grant. They went on to comment that whether the owners of subdivided lots are entitled to the benefit of an easement is a question of construction of the grant. They observed as follows:14
12 Hinde McMorland & Sim Land Law in New Zealand, above n 5 at [16.041]; Elizabeth Toomey (ed) New Zealand Land Law (3rd ed, Thomson Reuters, 2017) at [10.9].
13 Gallagher v Rainbow [1994] HCA 24, [1994] 179 CLR 624.
14 At 515.
Subject to a qualification relating to excessive user, the general principle is that stated by Jessel MR in Newcomen v Coulson.15
It was said that as this was a grant to the owner and owners for the time being of the lands, if the lands became severed the owners of the severed portions could not exercise the right of way. I am of opinion that the law is quite clear the other way. Where the grant is in respect of the lands and not in respect of the person, it is severed when the lands are severed, that is, it goes with every part of the severed lands. On principle, this is clear.
They also considered Australian authority, as well as authority from the Supreme Court of Rhode Island.16 They referred to academic comment on the latter case to the effect that easements that are appurtenant to land are considered apportionable for two major reasons: first because subdivision is so common that it is assumed that the parties are considering it as part of normal real estate development, and secondly, because the benefits to the benefited land generally outweigh the burden to the burdened land. They recorded as follows:17
This statement tends to explain rather than to offer a principle. The principle is that an easement is no mere personal right; it is attached to the dominant land for the benefit of that land. To the extent that any part of the dominant land may benefit from the easement, the easement will be enforceable for the benefit of that part unless the easement, on its proper construction, benefits the dominant land only in its original form.
[48] Ms Whitfield sought to distinguish Gallagher v Rainbow. She noted that the right of way at issue in that case was recorded as being for the “… domestic use and enjoyment of the dominant tenement or any part thereof …” (italics added). She observed that there is no similar wording in the easement under consideration in this case. I do not consider that this distinction is of any significance. As Jessel MR noted in Newcomen v Coulson,18 where the grant is in respect of land and not in respect of the person, it is severed when the lands are severed and it goes with every part of the severed land. In the present case the grant is for the benefit of the lots affected. As in Gallagher v Rainbow, the terms of the easement certificate contain no prohibition against the transfer of any subdivided lot or against the enjoyment of the rights recorded in the easement certificate by the purchaser of a subdivided lot. Rather, the
15 Newcomen v Coulson (1877) Ch D 133 at 141.
16 Crawford Reality Co v Ostrow [1959] 150 A 2d 5.
17 Gallagher v Rainbow, above n 13 at 516.
18 Newcomen v Coulson, above n 15.
enjoyment of the easement by the registered proprietors of the subdivided lots, and by the registered proprietor’s tenants, is wholly consistent with the language of the grant.
[49] Gallagher v Rainbow has been followed in a number of subsequent Australian decisions.19 It is referred to in the leading English text on real property as being authority for the proposition that, where the benefitted land is severed, the benefits of an easement pass with each and every part of it.20 It has also been cited with approval by the Court of Appeal in this country.21 There is earlier New Zealand authority to the same effect.22
[50] It is also notable that the Property Law Act 2007 provides that where a covenant benefits land of the covenantee, unless a contrary intention appears in the instrument, the covenant is enforceable by inter alia the covenantee’s successors in title, and persons claiming through the covenantee or the covenantee’s successors in title.23 Gallagher v Rainbow is consistent with this provision. It is also consistent with the principles of indefeasibility of title and with s 51 of the Land Transfer Act 2017.
[51] In my view, on its proper construction, the grant set out in the easement certificate benefits the whole of each of the benefitted lands notwithstanding that two of the lots have been severed by subdivision. The only outstanding issue in this regard is whether its attachment to the lots created consequent on the subdivision of lot 2 DP 373778 increases the burden on the Austins’ property as the burdened land beyond the grant and limits of the right. I consider this issue next and then reach a final conclusion in regard to the first cause of action.
19 See for example Butler v Muddle (1995) 6 BPR 13984 (Supreme Court of NSW); The Owners – Strata Plan No 61233 v Arcidianno [2019] NSWSC 1307 (Supreme Court of NSW); Howlin v Resource Management and Planning Appeal Tribunal [2015] TASSC 48 (Supreme Court of Tasmania) and Short v Patrial Holdings Pty Ltd (1994) 6 BPR 13996 (Supreme Court of NSW).
20 S Bridge and others (eds) Megarry & Wade: The Law of Real Property (9th ed, Sweet & Maxwell, 2019) at 26-006, noting Newcomen v Coulson and observing that there has been “a remarkable dearth of English authority” on the point.
21 New Zealand Industrial Park Ltd v Stonehill Trustee Ltd [2019] NZCA 147, (2019) NZCPR 119 at [67], reversed on other grounds on appeal; Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157.
22 Flavell v Lange [1937] NZLR 444 (SC) at 449.
23 Property Law Act 2007, s 301.
Trespass by AHL
[52] The Austins allege trespass by AHL on the basis either that AHL’s ongoing use of the right of way is unauthorised, or alternatively, that AHL’s ongoing use of the right of way is excessive and that it unreasonably interferes with their entitlement to use the right of way.
[53]AHL was served but it has taken no steps.
Submissions
[54] Ms Whitfield accepted that the grant recorded in the easement certificate is broad, but emphasised that it is a right held in common with other users and that it cannot be used so as to interfere with the rights of other permitted users. She argued that the use being made of the right of way by AHL and its tenants is beyond anything which could have been contemplated at the time of the grant. She noted that the right of way was initially granted only in favour of two lots and argued that it cannot have been contemplated that a number of extra users would seek to use it in the future. She again referred to the then operative district plan and also to the partially operative district plan which applied when the resource consents were granted. She also referred to the physical configuration of the right of way and to the fact that the Council, in granting the subdivision consent to Rentrezi, required that a passing bay be provided on the right of way. She submitted these are strong indicators which suggest that it cannot have been contemplated, at the time the right of way was granted, that it would be used by a further four residential units. She also argued that in any event Rentrezi and Pragma have not complied with the resource consent granted and that the number of users and the use being made of the right of way creates an unreasonable safety issue for the Austins and others.
[55] Mr Braun did not deal at any length with the second cause of action. He submitted succinctly that, if the subdivided lots have the benefit of the right of way, there cannot logically be a trespass. He also noted that there is no other practical access to either the Austins’ property or to the new residential units, and that the occupiers of the new residential units would be adversely affected if an injunction were to issue. He submitted that this weighs heavily against the granting of the relief
sought. He also submitted that the alternative relief sought, damages, was not properly quantified by the Austins.
Analysis
[56] I have already dealt with Ms Whitfield’s first argument – namely that the use of the right of way by AHL and its tenants is unauthorised. For the reasons I have set out, I consider that the terms on which the right of way was granted permit each of them the owners of lot 3 and what were lots 4 and 5 DP 17999, together with their licensees, invitees, etc, to use the strips of land owned by the others to access their respective lots.
[57] The right of way is a general right of way. There are no restrictions on its use (other than those which the law requires). It has been noted that:24
It is no objection to the user of a right of way for a new purpose that it involves an increase in the burden on the burdened land, unless the increase is “to an extent which is beyond anything which was contemplated at the time of the grant.” What amounts to an excessive user of a right of way is a matter of fact and degree.
[58] Both counsel referred to Jelbert v Davis.25 In this case, a right of way had been granted over a driveway “at all times and for all purposes … in common with all other persons having the like right”. The benefited land was originally used for agricultural purposes only but the owner obtained planning permission to use the land as a caravan site catering for up to 200 caravans. It was argued that these caravans should be able to use the right of way. The Court of Appeal held that the terms of the grant permitted the use of the easement for vehicular traffic of a different kind than that contemplated at the time of the grant. It held that caravans could use the right of way, but the use proposed – up to 200 caravans – was excessive and would interfere with the rights of other persons entitled to use the right of way or cause a legal nuisance outside the terms of the grant given the circumstances at the time when it was made. Lord Denning MR stated as follows:26
24 Hinde McMorland & Sim Land Law in New Zealand, above n 5 at [16.046].
25 Jelbert v Davis [1968] 1 WLR 589 (CA).
26 At 595.
In my opinion a grant in these terms does not authorise an unlimited use of the way. Although the right is granted “at all times and for all purposes,” nevertheless it is not a sole right. It is a right “in common with all other persons having the like right.” It must not be used so as to interfere unreasonably with the use by those other persons, that is, with their use of it as they do now, or as they may do lawfully in the future. The only way in which the rights of all can be reconciled is by holding that none of them must use the way excessively.
… the true proposition is that no one of those entitled to the right of way must use it to an extent which is beyond anything which was contemplated at the time of the grant.
[59] Jelbert v Davis was followed in New Zealand in Grinskis v La Hood.27 In this case, the use of the benefited land changed from a block of flats to nine motel units providing casual accommodation for travellers. As a result, the right of way which gave access to the building was used more often and in a way which was intrusive to the owners of the burdened land. The owners of the burdened land sought an injunction to restrain the owner of the benefited land from using the right of way for this purpose and a declaration that the right of way could not be used by motel guests and persons visiting the motel on business. Haslam J held that, as the instrument creating the right of way was clearly expressed in general terms, motel guests and visitors on business were permitted to use the right of way. He considered that it was immaterial that there had been a change of user of the benefited land since the right of way was not confined to use only for the purposes of the benefited land in the condition that it was in at the time of the grant.
[60] It is noteworthy that these decisions pre-date the more restrictive approach now taken to the interpretation of easement documents – see above at [40]. It has been noted that this more restrictive approach might potentially affect the extent and purpose of the use allowed by the grant and that it is possible that some of the earlier decisions would now no longer be decided in the same way.28 While I agree with this view, I do not need to consider the issue further for two reasons.
[61] First, there has been no change in the nature of the use being made of the right of way in this case since it was created. When it was created in 1974/1975, the right
27 Grinskis v La Hood [1971] NZLR 502 (SC) and see Handford v Kokomoko Farms Ltd [2010] 11 NZCPR 171 (HC); Bee v Thompson [2009] EWCA Civ 1212 (CA).
28 Hinde McMorland & Sim Land Law in New Zealand, above n 5 at [16.06], note 1.
of way in issue was intended to provide access to lots 3, 4 and 5 DP 17999. It is still being used to provide such access. At all relevant times, the lots either have been or have been able to be used for residential purposes. They are still being used for that purpose.
[62] Secondly and more importantly, on the evidence, the number of vehicles passing and repassing on the right of way is not excessive. I note the following:
(a)Mr Austin and his wife kept a record of vehicle movements using the right of way. They installed a video camera which was triggered by vehicle movements. Vehicle movements were recorded between 15 November 2020 and 20 March 2021. For technical reasons there was sometimes an overlap and total movements were recorded over a period ranging from three to seven days and then averaged. Nevertheless, the average number of movements per day ranged from a low of 12 (over the Christmas period) to a high of 40 in early March 2021. On most days the average number of vehicle movements was between 20 and 31.
(b)Rentrezi and Pragma called a traffic engineer, Judith Makinson. She installed an automatic traffic counter on the right of way over the period 16 February 2021 to 23 February 2021. Traffic movements ranged from 10 on Sunday 21 February 2021 to 16 on Thursday 18 February 2021. The busiest hour recorded was between 8.00 am and 9.00 am on Thursday 18 February 2021 when four vehicle movements were recorded.
(c)Ms Makinson organised for a manual count to be undertaken on 25 February 2021, over the period 7.00 am to 8.00 pm. That count identified seven vehicle movements to and from the Austins’ property and 19 vehicle movements to and from the new residential units.
[63] There is a relatively close correlation between the traffic movements recorded by the Austins and those recorded by Ms Makinson.
[64] Ms Makinson reviewed industry standard data sources for trip generation rates from residential land uses to identify the typical level of traffic that might be expected to use a private right of way serving five dwellings. That data suggested that this number of inner suburban dwellings can be expected to generate between 48 and 55 vehicle movements per day. It was Ms Makinson’s expert opinion that the traffic movements on the south to north section of the right of way do not exceed the level of activity that would normally be expected. Indeed, it was her evidence that the level of vehicle activity observed was more akin to the level of activity that would normally be expected from three houses rather than the five served by the south to north section of the right of way.
[65] In my judgment, this level of use is not excessive and it cannot be said to unreasonably interfere with the use of the right of way by the Austins.
[66] I accept that the configuration of the right of way is not ideal and that this is relevant in considering whether the use being made of the right of way is excessive.
[67] The section of the right of way which runs in a south to north direction is not particularly wide. The Hamilton City Council, in approving the subdivision which created the titles for the new residential units, required that a passing bay be installed on the eastern side of the right of way (on part of what was lot 2 DP 373778). This parking bay has been installed but it is not ideal. It does not have a tapered shoulder at its northern end. Nor do the Austins have any right to use it; the easement has not been varied to permit them to do so. Nevertheless, it was Ms Makinson’s evidence that the provision of the passing bay is an appropriate response to the relevant planning documents and traffic engineering standards. She said that despite its design, it is not “practically unusable”. She noted that the width of the right of way, with the passing bay, is sufficient to allow for the passage of two 99th percentile (or very large) cars, albeit with significant care, and that it is unlikely that this situation will arise in practice. I accept this evidence.
[68] Users of the south to north section of the right of way are also required to negotiate the relatively sharp corner to get access to or from Hillary Street. It was the Austins’ evidence that since the new residential dwellings have been occupied, there
have been many near misses where people have been required to take evasive action to avoid being hit. Their evidence was supported by a neighbour, Mark Oliphant. He said that he has seen some close calls between cars and children.
[69] Ms Makinson’s evidence was that there is “minimum visibility” of some six metres at the corner. It was her initial view that the available visibility is sufficient, so long as vehicle speeds on the right of way do not exceed 13 kilometres per hour. She was cross-examined on this issue by Ms Whitfield and she accepted, by reference to various design guidelines, that the visibility distance required at 13 kilometres per hour is actually 6.51 metres. Ms Makinson also accepted that available evidence suggests that on occasion people are travelling on the right of way at speeds higher than 13 kilometres per hour. Although a variety of scenarios in relation to vehicle speed, reaction times and the like were put to Ms Makinson in cross-examination, it nevertheless remained her view that the minimum visibility available at the corner meets approach sight distance standards for vehicles travelling at 10 kilometre per hour.
[70] It seems to me that the real problem is not the available visibility distance at the corner, but rather the absence of any speed restrictions on those using the right of way. The grant does not control speed. Visibility constraints on the corner have existed from the outset and the physical configuration of the right of way has not changed. The evidence suggested that with increased usage, the existing problem is now more acute. However, the fact that some people are occasionally driving too quickly on the right of way does not mean that there is excessive use being made of the right of way or that the Austins’ right to use the right of way is infringed. A simple solution would be for the Austins and AHL to agree to erect signage posting a speed limit on the right of way and/or to agree on the installation of pin down judder bars with a 75 millimetre vertical deflection. It was Ms Makinson’s evidence that the use of such devices would reduce vehicle speeds to between 5 to 10 kilometres per hour.
[71] Mr and Mrs Austin also gave evidence that on occasion vehicles reverse out of the right of way. Again, this is not ideal. The grant does not preclude vehicles reversing down the right of way. The Council was however concerned that people should not reverse. Before the resource consents were granted, it required D360 Ltd
to satisfy it that vehicles could exit the proposed new lots in a forward direction. What are known as swept path diagrams were provided. They demonstrated how vehicles on the proposed new lots would be able to manoeuvre so as to exit onto the right of way in a forward direction. I have visited the site and I am satisfied that vehicles can relatively easily manoeuvre on the lots so as to exit in a forward direction. That they do not do so on occasion is no doubt inconvenient to other users of the right of way, but again this does not mean that there is excessive usage of the right of way or that the Austins’ rights are being infringed. A simple solution would be for the Austins and AHL to agree on the erection of signage on or adjoining the right of way to remind people that they should not reverse down the right of way to Hillary Street.
[72] Ms Whitfield sought to cross-examine various witnesses, in particular Mr Mistry and Ms Makinson, about whether or not various conditions imposed in the resource consents have been complied with. Broadly, it was her argument that an area, which she asserted was supposed to be concreted to provide a carpark for one of the units, had not been concreted but rather grassed. Further, an area which she asserted was supposed to be common land available for vehicle manoeuvring has not been shown as such on the plans finally deposited. I have not placed any great weight on this line of argument. No expert evidence was called to support it. The Council has issued code compliance certificates. Mr Mistry was firmly of the view that the resource consents have been complied with. Ms Makinson could not comment on this issue but considered that there is sufficient manoeuvring space on the newly subdivided lots to permit vehicles to exit onto the right of way in a forward direction. As noted, having viewed the site, I am satisfied that Ms Makinson’s opinion is correct. Whether or not the fine detail of the resource consents has been complied with is a matter for the Council, and not for this Court in the context of an argument about the use being made of a right of way.
[73] The Austins complain that courier and delivery vehicles on occasion stop in the right of way so that parcels and the like can be delivered to residents in the new residential units. The Austins complain that on occasion this obstructs their access to their property. As I discuss shortly, a right to stop on a right of way is generally considered to be ancillary to the rights to pass and repass. In any event, to constitute an unlawful interference with a right of way, the interference must be substantial and
it must be clear that it is operating to the prejudice of the grantee.29 Here, I do not consider that the occasional brief obstruction of the right of way caused by a courier or delivery vehicle is a substantial interference with the grant.
[74] I am not satisfied that the right of way is being used by AHL and its tenants in a way which unreasonably interferes with the Austins’ use of the right of way. The use by AHL and its tenants is not excessive; it is not beyond the terms of the grant. Accordingly, I find that there is no excessive use of the right of way by AHL and the occupiers of the new residential units. This takes me back to the first cause of action. It must fail; the benefit of the right of way set out in the easement certificate does pass to the recently subdivided lots and the Austins are not entitled to a declaration to the contrary. Further, the second cause of action must fail. The use of the right of way being made by AHL and the tenants of the new residential units is authorised and it is not excessive.
Ongoing use – nuisance
[75] This cause of action can be dealt with relatively briefly. The Austins assert that the ongoing use being made of the right of way by the occupiers of the new residential lots unreasonably interferes with their use of the right of way. They say that they have suffered harm as a result and that Rentrezi and Pragma created the state of affairs from which they now suffer.
[76] A private nuisance is an unreasonable interference with a person’s right to the use or enjoyment of an interest in land. There can be a nuisance where the use by a defendant of his or her land interferes with the use and enjoyment of a plaintiff of his or her land. The Courts however have recognised that everyone must put up with a certain amount of inconvenience from the activities of neighbours. Otherwise modern life, particularly in crowded urban environments, would be impossible. It has been held that the function of the law of private nuisance is to strike a fair and workable balance between the conflicting interest of neighbouring occupiers, reconciling the interest of one occupier in using land as he or she thinks fit with the neighbour’s
29 McKellar v Guthrie [1920] NZLR 729 (SC) at 731.
interest in quiet enjoyment of his or her property.30 The legal standard employed to strike this balance is one of reasonableness; it embodies the principle of “give and take, live and let live”.31
[77] Here, I have found that the use being made of the right of way by AHL and its tenants is permitted by the grant and that it is not excessive. Sadly, after hearing from the Austins, I reached the clear conclusion that they have become unduly sensitive to whatever is occurring on the right of way and more fundamentally to the existence and occupation of the new residential units. They seem to consider that they devalue the area. It became clear that they set their minds against the development from the outset, that they tried vigorously to frustrate the development, and that they became distracted by irrelevancies (for example, that they were asked by Pragma to contribute to the costs of removing a tree which they had asked Pragma to remove but which would ultimately have been removed when the construction was undertaken). They fell out with Rentrezi and Pragma from a very early stage and they disengaged from any discussions with Rentrezi and Pragma from shortly after construction commenced. They chose instead to “bottle up” their grievances and became fixated with any and all issues relating to the construction of the new residential units. Matters got to a point where the Austins staged a protest outside a Home Show that Pragma was participating in. They held up a banner demanding justice and handed out pamphlets to passers-by.
[78] I accept Ms Whitfield’s submission that the fact that Rentrezi and Pragma obtained resource consents to develop the new residential units and to subdivide them onto separate titles does not preclude an action for nuisance. As Gendall J has noted, planning authorities cannot authorise nuisance; even if there is compliance with planning permission, such compliance is not a defence to a nuisance action.32 Rentrezi’s and Pragma’s affirmative defence in this regard fails.
30 BEMA Property Investments Ltd v Body Corporate 366611 [2017] NZCA 281 at [46].
31 Bank of New Zealand v Greenwood [1984] 1 NZLR 525 (HC) at 530-532 and see Stephen Todd (ed) Todd on Torts (8th ed, Thomson Reuters, 2019) at 10.2.01, notes 10, 11 and 12.
32 Hawkes Bay Protein Ltd v Davidson [2003] 1 NZLR 536 (HC) at [19]; Ports of Auckland Ltd v Auckland City Council [1999] 1 NZLR 601 (HC) at 608-611.
[79] Nevertheless, in my judgment, the Austins’ consistent opposition to the use of the right of way and to the existence and occupation of the new residential units has become unreasonable. The Austins’ house is situated well away from the right of way. They cannot see it from within their home. Nor can they see the new residential units. In my judgment, a reasonable person occupying the house at 21 Hillary Street and using the right of way would not regard the ongoing use being made of the right of way by AHL and its tenants as unreasonable.
[80] I find that there is no unreasonable ongoing interference with the Austins’ right to enjoy their property, including that part of their property as is part of the right of way. The third cause of action also fails.
Use of the right of way during construction – trespass/nuisance
[81] I have dealt with the fourth and fifth causes of action together because there is significant factual overlap.
[82] I have already discussed the nature of a private nuisance above at [76]. Trespass is an unjustified direct interference with land in the possession of another. It is actionable without proof of actual damage. Justifications are few – essentially consent, statutory authority and necessity – and no question ordinarily arises of balancing harm and benefit.33
Submissions
[83] Ms Whitfield submitted that trespass and/or nuisance was caused by Rentrezi and Pragma in three respects:
(a)repeated and consistent obstruction of the right of way;
(b)disruption to services; and
(c)failure to control rubbish and dust.
33 BEMA Property Investments Ltd v Body Corporate 36661, above n 30 at [45].
She noted the evidence of Mr and Mrs Austin that their privacy and quiet enjoyment of their property was disturbed and that they suffered stress and anxiety as a result. She also argued that the evidence supports a finding that Rentrezi and Pragma acted in disregard of the Austins’ rights. She argued that the Austins should be entitled to damages for both the trespass and the nuisance of $25,000, as well as an additional
$20,000 as aggravated and/or exemplary damages.
[84] Mr Braun argued first that the Austins have not differentiated between Rentrezi and Pragma, noting that each company owned the property on which the residential units were constructed at various times. He also argued that whether or not there was a nuisance and/or trespass requires an examination of what is reasonable between neighbours on a shared right of way, and that issues such as use, location, intensity, timing, frequency and duration fall to be considered. He argued that where one neighbour is undertaking the construction of a building, the other neighbour should be expected to accept some inconvenience due to the construction and that otherwise no development of residential land would ever occur. He submitted that the Austins made up their mind before the construction started that they did not want it to go ahead and that their complaints have to be seen through this lens. He also argued that the obstructions were not as significant as claimed, and noted that ultimately Mr Austin accepted that generally contractors who parked on the right of way moved when asked to do so. He submitted that there were only relatively few occasions when this did not happen. He argued that the main problem was that the Austins decided to disengage from dealing with Pragma notwithstanding that it was trying to proactively address their concerns from an early stage.
Analysis
[85] I do not consider that there is anything in Mr Braun’s argument that Rentrezi and Pragma at different times owned the property on which the residential units were built. Both Rentrezi and Pragma are associated companies with a common parent and a common director. Rentrezi engaged Pragma to carry out the construction works. Pragma in turn engaged various subcontractors to complete aspects of the work. Mr Braun accepted that Pragma was liable for the actions of its subcontractors.
Strictly it may well be that any trespass/nuisance was committed by Pragma and not Rentrezi, but in practical terms nothing turns on this.
[86] Further, it cannot reasonably be suggested that the right of way was not obstructed from time to time. Indeed, this was accepted by Mr Braun on behalf of Rentrezi and Pragma.
[87] Mr and Mrs Austin kept a diary of events. Both gave evidence that the right of way was often obstructed whilst construction was underway. To support their evidence, they produced numerous photos, many showing vehicles obstructing the right of way. Mr Austin accepted in cross-examination that on many occasions contractors did move their vehicle when either he or his wife asked them to do so. He also accepted that on occasion he gave contractors permission to park on the right of way while building materials were being unloaded. He was also adamant that on occasion contractors did not move their vehicles.
[88] I accept Mr Austin’s evidence and am satisfied that there were a few occasions when the contractors did not co-operate. Further, there were occasions when unfortunately the Austins were verbally abused by drivers employed or engaged by subcontractors. The suggestion was made that the Austins sometimes asked contractors to move so that they could get in or out of their property, but that when the contractors did move their vehicles, the Austins did not make any use of the right of way. Evidence given in this regard was in large part hearsay and the allegation was denied by the Austins. I accept that discussions between the Austins and people working on the site were at times tense and difficult. I suspect that both sides were quick to attribute blame to the other.
[89] The grant entitled Rentrezi/Pragma to use the right of way to access their property, but it did not expressly entitle them or their contractors or subcontractors to park on the right of way. A right to pass and repass conferred by a grant in relation to land used for business purposes includes the right to stop for a reasonable period of time for the purpose of loading and unloading. Such right is considered to be ancillary to the right to pass and repass. It is however restricted to what is reasonably necessary for the effective and reasonable exercise and enjoyment of the rights expressly
granted.34 This ancillary right appears to be equally applicable where the right of way is in relation to residential use.35 If, however, a party entitled to use a right of way parks on the right of way on a regular basis in circumstances which prevent other users from driving along the right of way, such parking will constitute an unreasonable and substantial interference with the right of the owner wishing to use the right of way to pass and repass.36
[90] I am satisfied that this is what occurred in the present case. On a number of occasions during the construction work, vehicles parked on the right of way. Most were moved promptly when requested. However, on occasion the drivers refused to cooperate and vehicles were not moved off the right of way. The section of the right of way on which the vehicles parked is relatively narrow. That vehicles were parked on the right of way obstructed the Austins’ use. They could not get around the vehicles. The right of way was not wide enough to permit that. I am satisfied that there was interference with the Austins’ rights conferred by the grant.
[91] I also accept that services to the Austins’ property were cut off. The easement certificate does not deal with the provision of services and the evidence was that each of the affected properties has its own services within its own strip of land. The evidence established that, as a result of the construction work:
(a)a telephone utility junction box servicing the Austins’ property was knocked out on 24 September 2018. As a result they lost their phone, internet and other telecommunication connections intermittently over a period of some three days;
(b)water was cut off to the Austins’ property on 30 October 2018. This was repaired relatively quickly, but nevertheless the Austins spent an afternoon without water;
34 Bulstrode v Lambert [1953] 1 WLR 1064 at 1071; McIlraith v Grady [1968] 1 QB 468 (CA) at 476 and Handforth v Kokomoko Farm Ltd, above n 27.
35 Cannon v Villars (1878) 8 Ch D 415; Lyons v Breslin (2010) 11 NZCPR at 262 (HC).
36 Lyons v Breslin [2012] 13 NZCPR 181 (HC) at 190-193, upheld on appeal in Breslin v Lyons
[2013] 14 NZCPR 144 (CA) at [31]-[32].
(c)on 5 December 2018, power was cut to the Austins’ property for a period of some five hours;
(d)water was cut off again on 30 January 2019;
(e)in late May 2019, a gas line to the Austins’ property was punctured by a stake being put in the ground by a Pragma worker. Again, the gas was restored relatively quickly;
(f)part of a fence between the Austins’ property and the land on which units were being built was removed for repair and to enable a stump to be ground out. The fence remained open for a period of some two weeks and workers went through the Austins’ property over this period.
[92] Further, building activities on the construction site impacted on the Austins’ property:
(a)there was noise and on occasion vibration when the ground was being broken up for the building works;
(b)debris was left on the right of way on a number of occasions;
(c)concrete trucks were washed down on the right of way and slurry was left on the right of way. It got into the drain. The Austins had to clean this up. They also had to clean their own vehicles to remove cement splashes;
(d)the surface of the right of way was damaged;
(e)there were piles of clay, sand, asphalt and the like on the building site and, on occasion, dirt, dust and other materials such as plastic and empty cement bags blew onto the right of way. On occasion, this type of material blew into the Austins’ garage;
(f)mortar slurry was tipped on the right of way by bricklayers using a concrete mixer;
(g)notwithstanding that the resource consent required that all building work cease by 6.00 pm, on occasion builders worked after that time;
(h)food waste, wrappers, plastic bottles and sharp objects such as nails, screws and bolts were left on the right of way and on some occasions got onto the Austins’ property;
(i)the drain at the end of the right of way became clogged on more than one occasion. Mr Austin had to clean it out.
[93] Rentrezi/Pragma were on notice of the Austins’ concerns from an early stage. The Austins visited their office. They wrote a number of letters, both to Rentrezi/Pragma and to its lawyers. Mr Mistry’s response to Rentrezi/Pragma staff was to make sure that the companies were 100 per cent compliant and that they were legally correct on all matters. He met with the Austins in December 2018. He agreed that the driveway should be kept clear and he sent an email to all subcontractors as well as to Pragma staff saying that any failure to keep the right of way clear would result in a $500 fine that would be passed on to the offending contractor. No fines were ever imposed.
[94] I heard from each of the various project managers who were employed on the site by Pragma.
(a)James Palmer was the project manager from August 2018 until March 2019. He met with Mr Austin at an early stage, and Mr Austin made clear that there should be no parking on the right of way. Mr Palmer told Mr Austin that there would be no parking on the right of way but that on occasion, tools and materials would be offloaded or uploaded from the right of way. Of his own initiative, Mr Palmer contacted the Hamilton City Council to see if he could obtain access to use Hillary Park (which is situated immediately to the east of the building site) for
construction access. Consent was granted and Hillary Park was often used for access to the building site. It was not however always possible to use the Park and Mr Palmer accepted that from time to time contractors used the right of way, particularly to unload materials and tools. He gave evidence that he tried to address other concerns such as sand and dust being blown onto the right of way by erecting “silt” fencing. He said that he took all practical steps to try and manage the site.
(b)Nathan Hancock was the project manager between December 2018 and January 2019. He also met with the Austins. He acknowledged that there were vehicles parked on the right of way for loading purposes on occasion. He said that he and others tried to clean up the site “the best we practically could”.
(c)Simon Wells was project manager until practical completion was achieved. He had minimal involvement with the Austins. He confirmed that all contractors were notified that they were not to park on the right of way. He said that this was monitored but that materials were from time to time unloaded on the right of way. He also confirmed that sometimes access from the park was not practicable and that when this occurred, the right of way was used.
[95] Mr Palmer accepted that he was not on site all of the time. He said that he was on the site on average “maybe once daily”. Mr Hancock was generally on site only once or twice a week. He accepted that the right of way may have been blocked when he was not there. Mr Wells said that he was on the site daily or at least every second day. He said that he was on site half an hour or up to an hour. I suspect that rather more extensive use of the right of way occurred when the project managers were not on site.
[96] Elliott Donaldson was Pragma’s operations manager. He was kept informed of what was going on on the site by his project managers. Many of the Austins’ complaints were referred to him. He also received a number of complaints from
contractors about the Austins’ behaviour. He met with the Austins on a couple of occasions. He also had involvement with a Council officer, Peter Kirk, who was primarily responsible for overseeing the development from the Council’s perspective. He confirmed that if Pragma caused any damage, it fixed it at its expense. He said that Pragma used its best endeavours to accommodate the Austins “within reason”.
[97] Despite the evidence given by Pragma’s employees, I accept that there was a trespass onto the Austins’ property. Further, a nuisance was created, and the nuisance was more than that which a reasonable person should be prepared to put up with. I find that the fourth and fifth causes of action are made out.
[98]The affirmative defences do not assist Rentrezi and Pragma.
(a)I have already dealt with the assertion that Rentrezi/Pragma had statutory authority to construct the new residential units because they held resource consents permitting them to do so. That is not the law and I have rejected that affirmative defence.
(b)I also reject the affirmative defence that the Austins in some way consented to what occurred. The evidence was that in late May 2019, two women from Pragma together with Mr Wells visited Mr and Mrs Austin at their home. Pragma was repairing the entrance to the new residential units and putting pavers, concrete and asphalt around both that entrance and the entrance to the Austins’ property. Mr Austin signed a document recording that he agreed to the removal of the existing cobblestone border and to its replacement with asphalt. The document also recorded:
This will be acceptable as such. You will be satisfied in all respects to the accessway, fencing and construction as agreed by all parties.
Clearly this document was not a consent to all that had occurred. It is a very limited agreement.
(c)Nor have the Austins been guilty of laches or delay. They let Rentrezi/Pragma know of their concerns from the outset. They filed their proceedings in April 2019 while the building works were still underway. There was no delay by them.
[99]I turn to consider the issue of damages.
[100] In their pleadings, Mr and Mrs Austin sought $19,500 for losses which were said to include legal costs and the expenses incurred in fixing physical damage to their property. They also sought general damages of $50,000, or in the alternative, damages and vindication of their rights. They also sought aggravated and/or exemplary damages in the sum of $20,000 together with interest.
[101]There are difficulties with the relief initially sought.
(a)Except in limited circumstances, which do not apply in this case, damages do not normally extend to legal costs incurred.37
(b)There was no evidence of the costs which the Austins say they incurred.
[102] In her closing submissions, Ms Whitfield amended the Austins’ position. She sought damages for the trespass and the nuisance of $25,000. She also sought an additional $20,000 for aggravated and/or exemplary damages. Mr Braun argued that damages for trespass/nuisance are typically nominal and that Rentrezi’s/Pragma’s conduct does not warrant an award of exemplary damages.
[103] I am satisfied that an award of $20,000 is appropriate for both the trespass and the nuisance. The infringement of the Austins’ rights constituting the trespass was relatively substantial. It was ongoing. An award is appropriate to recognise the infraction of the Austins’ rights. The nuisance was also prolonged and it went beyond that which the Austins could reasonably have been expected to tolerate.
37 Simpson v Walker [2012] NZCA 191 at [75]; Peters v Peters [2013] NZHC 1061 at [95] and Chick v Blackwell [2013] NZHC 1525 at [152]-[153].
[104] I am not however persuaded that an award of exemplary damages is appropriate. Exemplary damages are awarded where the conduct of a defendant merits punishment, for example, where a defendant acted in contumelious disregard of the plaintiff’s rights.38 Here, Rentrezi/Pragma did not act in contumelious disregard of the Austins’ rights. They were aware of those rights and they tried to honour them, albeit unsuccessfully. They instructed contractors not to park on the right of way. They endeavoured to address the Austins’ complaints, albeit that their efforts were not always successful. Further, in my view, the Austins have to accept some responsibility. They disengaged at an early stage and thereafter refused to liaise with Pragma’s representatives. As a result, the prospect of avoiding or minimising disruption was frustrated. If the parties had communicated, it is likely that at least some of the heat may have been taken out of the issue. When disruption was caused to the services the Austins’ property, that damage was promptly repaired and at Rentrezi/Pragma’s expense. I accept that Rentrezi and Pragma tried to act in good faith throughout.
[105] Nor do I consider that an award of compensatory damages is appropriate. Such damages are normally awarded where there is humiliation, affront and indignity suffered by a plaintiff. Here, the evidence established that Mrs Austin was on occasion sworn at and abused by subcontractors. Mrs Austin understandably was affronted by the comments made to her. However, the evidence also suggested that she did not always deal with the subcontractors particularly well and that this led to the responses she received. I also take into account the findings I have made above – namely that the Austins became over-sensitive to all issues arising as a result of the construction of the new residential units and from use of the right of way. That they suffered affront and the resulting stress and anxiety is, I suspect, in part a result of their disproportionate sensitivity to the development of the new residential units.
Summary
[106] The first, second and third causes of action are dismissed. I uphold the fourth and fifth causes of action and award $20,000 by way of general damages to the Austins. The award is against Rentrezi and Pragma jointly.
38 Taylor v Beere [1982] 1 NZLR 81 (CA); Shattock v Devlin [1990] 2 NZLR 88 (HC).
Costs
[107] All parties have had a measure of success in these proceedings. It is my preliminary view that costs and disbursements should lie where they fall. If the parties disagree with that view, then I direct as follows:
(a)any memorandum seeking costs and/or disbursements is to be filed and served within 10 working days of the date of this judgment;
(b)any memorandum in response is to be filed and served within a further 10 working days;
(c)memoranda are not to exceed five pages.
I will then deal with the issue of costs and disbursements on the papers unless I require the assistance of counsel.
Wylie J
Annexure A
- AGLC
- Austin v Rentrezi 2 Ltd [2021] NZHC 1027
- Case
- [2021] NZHC 1027
- Decision Date
CaseChat Overview and Summary
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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