BEMA Property Investments Ltd v Body Corporate 366611
[2017] NZCA 281
•3 July 2017 at 12.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA350/2016 [2017] NZCA 281 |
| BETWEEN | BEMA PROPERTY INVESTMENTS LIMITED |
| AND | BODY CORPORATE 366611 |
| AND | THETA MANAGEMENT LIMITED |
| Hearing: | 1 May 2017 |
Court: | Miller, Gilbert and Katz JJ |
Counsel: | B P Rooney for Appellant |
Judgment: | 3 July 2017 at 12.30 pm |
JUDGMENT OF THE COURT
AThe appeal is allowed. Judgment is entered for the appellant at the agreed monthly rate of $1,309.22 from 11 May 2009 to 15 December 2014.
BThe respondents must pay the appellant costs for a standard appeal on a band B basis and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
Introduction
BEMA Property Investments Ltd owns a unit in a large student hostel known as the Empire Apartment complex. Theta Management Ltd is the building manager appointed by the Body Corporate.
When BEMA’s tenant, Auckland Residential Tenancies Ltd (ART), stopped paying rent and went into liquidation, BEMA sought an access card needed to allow it to access common areas and its unit. Relying on amended rules of the Body Corporate, Theta insisted by letter of 11 May 2009 that BEMA execute a security and access protocol agreement and pay a security deposit of $5,000, a utility deposit of $500 and a key deposit of $150. BEMA did not accept these conditions.
It has since been established in litigation by other unit owners, whom we will call the Wu owners, that the Body Corporate and Theta had no lawful right to impose these conditions and that the owners were justified in refusing to accede to them.[1] BEMA sues for rent that it says it would have earned had the unit not stood empty from May 2009 to December 2014, when it finally gained access and re-let the unit.
[1]Wu v Body Corporate 366611 [2014] NZSC 137, [2015] 1 NZLR 215 at [113], [138] and [141] [Wu (SC)].
The central question on this appeal is whether causes of action are available to BEMA in trespass or private nuisance. In the High Court BEMA failed in trespass, the Court finding that it was not in possession of its unit on 11 May 2009.[2] It also failed in nuisance, the Court finding that nothing ‘emanated’ from property of the Body Corporate and Theta.[3]
[2]BEMA Property Investments Limited v Body Coporate 366611 [2016] NZHC 1434 at [72] [HC Decision].
[3]At [74]–[75].
Assuming BEMA can establish liability, causation is also in issue. Wylie J doubted, without deciding, that causation could be established and added that any interference with BEMA’s rights was brought to an end within six months of its 11 May 2009 letter.[4]
The narrative
[4]At [79].
The facts on which liability turns are few and largely uncontroversial, but we must recount a complex narrative to make sense of them and explain how the case came to be pleaded and decided.
BEMA’s unit, No 1313, is one of 119 purchased as part of a Blue Chip scheme, sold to investors such as BEMA, and leased to a Blue Chip Group company, ART, which paid a base rent and licensed students to occupy the units. BEMA is owned by Berkie Kapa and Aneta Heke.
From late 2007 ART ceased making payments under the leases and in early 2008 it went into liquidation. Its liquidator evidently did not disclaim the leases.
Theta evidently identified a business opportunity in ART’s collapse. It advised unit owners to terminate their leases and invited them to lease their units to Theta under a lease which required each owner to irrevocably appoint Theta as its proxy for body corporate purposes. Theta explained that this would mean it need not pay rent to the liquidator and owners would avoid liability for GST on rent. Many owners followed Theta’s advice.
BEMA did not respond to Theta’s proposal initially. It did not terminate its ART lease either. When pursued by Theta, Mr Kapa queried the terms of the proposed lease, noting for example that there was no “get out” clause allowing the owner to terminate. After an exchange of correspondence about this in March and April 2008, BEMA sought access to the unit by an email dated 29 October 2008. Theta did not respond.
In April 2009 BEMA appointed an agent to let its unit and again asked Theta for access. This led to Theta’s letter of 11 May 2009. The letter stated that:
Dear Berkle [sic] & Aneta,
Since you are considering appointing independent-manager to manage Empire unit 1313 – the Body Corporate requires you to abide by the Body Corporate 366611 Rule 3.10(a) (attached).
For you to obtain the access card you and your authorized representative must both sign (attached)
1. Security & Access Protocol agreement, owners undertaking,
2. The Representative’s undertaking and warranty) and
3.Pay the refundable security, utility and key deposits:
($5,000 security deposit + $500 utility deposit + $150 key deposit)4.make payment to clear your Body Corporate levy arrear (attached levy arrear statement)
(emphasis in original)
It will be seen that these requirements were imposed because BEMA wanted to manage its own unit rather than engage Theta. The letter plainly made access conditional upon meeting the four specified requirements. For justification it invoked Body Corporate rule 3.10(a).
BEMA was not prepared to accept these requirements, but it did not respond to the letter. It did not engage with Theta or the Body Corporate at all until October 2011, some two and a half years later.
In the meantime, the Wu owners, who had refused to sign the security and access protocol or pay the deposit, took legal action to get access to their units. The Wu owners had leased their units not to ART but to a company, Academic,[5] associated with the building’s developer. It is said to matter that Academic’s liquidator had disclaimed the leases, while ART’s had not.
[5]Academic Accommodation Management (3) Ltd.
The Body Corporate and Theta defended themselves by invoking r 3.10. The rule had been amended in 8 February 2008 and again on 17 April 2009. It had originally provided simply that if “for security purposes” the building manager restricted an owner’s “access … to common property” it may make a “Security Key” available to that person. This language appeared to presume that owners would have keys to their units. The amendments stated that an owner or occupier could be required to enter a security and access protocol and pay a refundable access deposit. The Wu owners contended that the amendments were ultra vires as it had not been passed unanimously.
We interpolate that the rules defined a security key as a key, magnetic and or other device used to open and close doors, gates or locks, or to operate security systems. The building used magnetic access cards which were centrally programmed.[6] In 2007 Theta had acquired from the original building manager the equipment needed to process them.[7] The record includes a letter from Theta to investors stating that “Electronic security access cards control the entrances, lifts and apartment entrance”. It appears that physical keys may have been used to access rooms within units, and perhaps stairwells.
[6]Wu v Body Corporate 366611 [2011] 2 NZLR 837 (HC) at [11] [Wu (HC Asher J)]; and Wu (SC), above n 1, at [24].
[7]The judgment below proceeded on the basis that access cards operated both unit doors and common areas: see for example HC Decision, above n 2, at [9]. See also Wu (HC Asher J), above n 6, at [11], [12] and [23]; and Wu (SC), above n 1, at [24].
In Wu someone had electronically cancelled existing cards so the owners could not use them to access common areas or units. BEMA did not have an access card cancelled, and this too is said to matter. It seems that because the unit was managed and tenanted, BEMA had never held a card.
The Wu owners succeeded in the District Court, but the Body Corporate and Theta did not give them access.[8] A new proceeding was commenced in the High Court. In a judgment issued on 30 November 2009 Lang J answered a preliminary question, holding held that the amendments were ultra vires because they had not been passed by unanimous resolution.[9]
[8]Mai v Body Corporate 366611 DC Auckland CIV-2008-004-14, 16 January 2008.
[9]Wu v Body Corporate 366611 (2009) 10 NZCPR 917 (HC) at [45] [Wu (HC Lang J)].
BEMA knew nothing of the Wu litigation until Lang J’s judgment caused the body corporate to hold an EGM on 10 December 2009. BEMA was given notice of the meeting and the agenda. Wylie J found that from the date notice of meeting was despatched, 2 December 2009, BEMA was or ought to have been aware of Lang J’s decision. (It is for this reason that he held that any interference with BEMA’s rights ended after six months.)[10] Mr Kapa and Ms Heke did not attend the EGM but they received the minutes, which summarised the judgment. They seem not to have made the effort to understand what was going on.
[10]HC Decision, above n 2, at [33] and [79].
Lang J’s decision did not end the Wu proceeding, which went to trial in 2011 before Asher J, whose judgment was delivered on 30 May 2011.[11] Indeed, Lang J’s decision did not immediately result in the owners getting access to their units. In December 2009 they were granted access to common areas, but not to their units. They had to engage locksmiths to access the units, finally allowing entry and re‑letting.
[11]Wu (HC Asher J), above n 6.
The Wu claim was brought, relevantly, in trespass and in nuisance, seeking damages, and it challenged certain rules of the Body Corporate. Lang J held the amendments to r 3.10 ultra vires and Asher J dealt with certain other rules that do not concern us.[12] The plaintiffs won damages in nuisance at trial.[13] Asher J did not dismiss trespass. He recorded rather that if necessary he would have called for further submissions on whether trespass might extend to an unreasonable electronic intrusion into an owner’s property that altered an electronic device (the card reader) on the land.[14]
[12]Wu (HC Lang J), above n 9, at [45]; and Wu (HC Asher J), above n 6, at [92], [94] and [105].
[13]Wu (HC Asher J), above n 6, at [54] and [69]–[72].
[14]At [75].
The Body Corporate and Theta appealed the decision of Asher J. This Court agreed, in a judgment delivered on 20 December 2012, that they were liable in private nuisance, but on a narrower basis than Asher J had done.[15] The judgment was met with an appeal and cross-appeal.
[15]Body Corporate 366611 v Wu [2012] NZCA 614, [2013] 3 NZLR 522 at [116].
In October 2011 BEMA wrote to Theta seeking a meeting and acknowledging delays on BEMA’s part. In November 2011 BEMA asked for and was given Theta’s standard lease. Nothing happened until September 2013, when Mr Kapa met with Theta’s director, Mr Chen, in the unit. Theta had arranged to have a locksmith open the unit.[16] It was the first time Mr Kapa had seen it. It appears that Mr Chen may have expected to have Theta’s lease signed on the spot. Instead Mr Kapa said that he wanted to get his own tenants into the unit. Nothing was agreed, and Mr Kapa left, still without a card.
[16]The judgment below simply refers to Mr Chen having an assistant who opened the door: HC Decision, above n 2, at [43]. The evidence does not explain why Theta did not centrally programme an access card, eliminating the need for assistance at the unit door. The Supreme Court judgment in Wu records that the cards eventually given to owners did not open unit doors, allegedly because batteries in the electronic locks had failed, and owners engaged locksmiths who were able to gain entry and “provide working cards and locks”: Wu (SC), above n 1, at [57].
BEMA did not respond to an offer, made on 27 May 2014, from the Body Corporate to have Theta rent out its unit. Not until the Body Corporate took steps to wind BEMA up for non-payment of levies did BEMA take action. It paid the outstanding levies late in 2014. It obtained access cards and managed to rent its unit from 12 January 2015.
On 9 October 2014 the Supreme Court delivered judgment on the appeal from this Court’s decision in Wu.[17] By this time no one disputed that the amended r 3.10 was ultra vires. Instead the Body Corporate and Theta argued that the original rule authorised the security and access protocol and security deposit. The Court held that a rule impeding access would be invalidated under s 37(6) of the Unit Titles Act 1972 and there could be no right to impede access outside the rules.[18] The Body Corporate had no power to require owners to enter the security and access protocol, or pay the security deposit, as a condition of being provided with electronic access to their units.
[17]Wu (SC), above n 1.
[18]At [99]. Note that the Unit Titles Act 2010 came into force on 20 June 2011, so it did not apply to the proceeding: Unit Titles Act 2010, s 2.
The Supreme Court judgment established conclusively that Theta acted unlawfully by insisting that BEMA sign the protocol and pay the deposit to get an access card giving it access to its unit and the common areas.
The Supreme Court sustained the Wu owners’ claim in trespass, reasoning that Mr Wu had been excluded unlawfully from the common property.[19] The Court found it unnecessary to come to a definitive conclusion on the availability in law of the tort of private nuisance, but doubted (without deciding) that anything had “emanated” from property of the Body Corporate or Theta to property of Mr Wu.[20] The Court indicated that if available the cause of action would have succeeded.[21] We must return to exactly what the Court decided, and why, when dealing with the respondents’ attempts to distinguish Wu.
[19]Wu (SC), above n 1, at [117].
[20]At [124]–[125].
[21]At [131].
On 5 December 2014 the Supreme Court delivered a second judgment, on a recall application.[22] The recall dealt with the date from which damages should run. It corrected an error in the principal judgment, holding that Mr Wu had at no time surrendered possession of common property because the Academic lease did not extend to it. Liability in trespass by ouster accordingly ensued when the access cards were reprogrammed to deny access.[23]
[22]Wu v Body Corporate 366611 [2014] NZSC 178, [2015] 1 NZLR 215.
[23]At [13].
In its principal judgment the Supreme Court observed that there is “an implied (and fundamental) right to access one’s unit under the Unit Titles Act”, sourcing this in an implied right of access incapable of being abrogated under the Unit Titles Act 1972 (1972 Act).[24]
[24]Wu (SC), above n 1, at [99] and [130].
It may be thought curious that the Wu plaintiffs did not invoke this right directly by suing to enforce the rules. As owners, they enjoyed access rights directly enforceable under the rules and the legislation. These rights might be enforced through an action for breach of statutory duty,[25] and if so they need not have waited for the Body Corporate or Theta to do something actionable in nuisance or trespass.[26] Counsel appearing before us could not explain this apparent oversight. The judgment of Asher J, which discusses all the causes of action, invites the inference that the plaintiffs focused rather on clearing away the amended r 3.10, understandably enough.[27] Be that as it may, the ‘fundamental right to access’ was seemingly relied upon in the Supreme Court only to dismiss the defendants’ claim that the legislation allowed them to impede access.[28]
[25]There can be no doubt that by conferring rights upon owners and the body corporate the legislation contemplates private law causes of action: see the test in Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15, [2004] 1 WLR 1057 at [3] per Lord Steyn. We need not inquire into whether these rights are enforceable in contract.
[26]Presumably it would be immaterial that the units were leased, if only because one would not expect the Body Corporate to police tenants’ rights to quiet enjoyment against owners.
[27]See Wu (HC Asher J), above n 6, at [52]–[54].
[28]Wu (SC), above n 1, at [98] and [130].
BEMA commenced this proceeding in March 2015, seeking to ‘piggyback’ on Wu and claiming lost rent of $89,026.96.[29] By that time the Unit Titles Act 2010 had replaced the 1972 Act. BEMA pleaded three causes of action: interference with a natural right of access, trespass and nuisance. It failed in all of them.
The High Court’s reasoning on liability
[29]The proceeding was commenced in the District Court and transferred to the High Court.
We turn to the High Court judgment, focusing on Wylie J’s factual findings and reasons for distinguishing Wu. We address other findings later, when dealing with causation.
The Judge found, and it is not in dispute on appeal, that by the letter of 11 May 2009 the Body Corporate and Theta unlawfully refused BEMA access unless their demands were met.[30] But BEMA’s case was distinguishable from Wu for three significant reasons: the Wu owners were not part of the Blue Chip scheme and their claims pre-dated, at least in part, Theta’s involvement; the Wu leases had been disclaimed by Academic’s liquidator while ART’s had not, nor had BEMA terminated its lease; and the Wu owners had had their access cards cancelled while it seemed BEMA never had one.[31]
[30]HC Decision, above n 2, at [27] and [62].
[31]At [60].
Turning to the causes of action, the Judge held that the Supreme Court did not, by referring to a fundamental right of access, mean to create a new cause of action, otherwise not known at law; rather, it held that trespass was the most appropriate cause of action. There being no independent cause of action for breach of a natural right of access, he did not consider that claim further.[32]
[32]At [65].
The cause of action in trespass also failed, the Judge reasoning that BEMA had failed to discharge the onus of showing it had possession of its unit at the relevant time, May 2009.[33] The evidence was unsatisfactory. BEMA’s lease to ART was not in evidence (it could not be found). A lawyer’s letter of 11 May 2007 advised BEMA that the lease had a four-year term, but not when it commenced. The Judge appears to have accepted, based on the correspondence, that the lease would have ended in 2010.[34] There was no evidence that ART’s insolvency automatically terminated the lease, or that BEMA ever took any steps to terminate it.
[33]At [72].
[34]At [68].
The Judge noted what the Supreme Court had said in Wu about nuisance. He held that nothing had emanated from property of the Body Corporate and Theta to cause a nuisance.[35] The claim also faced other difficulties:[36]
(a)A plaintiff in nuisance must have a sufficient interest in the land. BEMA did not, because it was not in possession at the relevant time.
(b)On the evidence, BEMA’s access rights were not affected, for it never had access cards. Its right of access to common areas was not abrogated.
(c)A nuisance must interfere with rights in a manner both substantial and unreasonable. The unlawful refusal to issue an access card was certainly unreasonable, but it did not substantially interfere with BEMA’s right of access. That was so because BEMA did not challenge or query the 11 May 2009 letter or do anything when told, in the notice of EGM that brought any interference to an end, that the rule the defendants relied upon was invalid.
[35]At [74]–[75].
[36]At [77].
Finally, the Judge made some observations about causation. He noted that, because there was no evidence BEMA had access to its unit from late 2007 (when it ceased receiving rent) to the 11 May 2009 letter, it did not appear to have access to its units when the letter was sent and the letter accordingly could not have caused it to be locked out of its unit. He also noted that, as soon as Mr Kapa received notice of the EGM on 2 December 2009, any interference with its rights was then at an end. This meant the maximum period for which it could have claimed lost rent was from 9 May 2009 to 2 December 2009.[37]
The appeal
[37]At [79].
The issues presented in the notice of appeal, and a notice of intention to support the judgment on other grounds, may be framed in this way:
(a)whether BEMA enjoyed possession on 11 May 2009, so as to confer standing to sue in trespass or nuisance;
(b)whether exclusion might amount to an intrusion, in trespass or nuisance, in the circumstances; and
(c)whether loss ensued, and for how long.
Did BEMA enjoy possession on 11 May 2009?
The letter denied BEMA an access card,[38] so precluding it from entering the building, accessing the lifts and common areas, and entering the unit.[39]
[38]Because the conditions attached to delivery of a card were unlawful: Wu (SC), above n 1, at [113] and [131].
[39]The evidence does not say what floor the unit is on, but nothing turns in this since it is clear that a card was needed to access the common areas, which include corridors, and enter the unit.
We begin by noting that the evidence sustains the inference that by 11 May 2009 the unit was empty and may have been so for some time. The evidence is that from 29 October 2008, when BEMA emailed the Body Corporate, BEMA wanted a card so it could re-let the unit. There is no evidence then (or subsequently) that anything — other than Theta, which cannot invoke its own wrongdoing as a defence — stood in the way of re-letting. We infer that had BEMA been given an access card it would have been able to enter and re-let the unit without interference.
Wylie J found that in the absence of evidence of termination by BEMA or disclaimer by the liquidator, ART must have retained possession under the lease, so that BEMA could not sue in trespass.[40] We have come to a different view. The unit being empty, the natural inference is that the liquidator had abandoned the property. Some support for that is found in the absence of any evidence that the liquidator made any effort to rent the unit before the lease expired in 2010. The property having been abandoned, we consider possession vests in the owner. The law presumes that possession vests in the owner of the “paper title”, and there is no one with a better claim to the unit that its owner, BEMA.[41] Possession does not depend on physical re-entry. We observe that in Wu the Supreme Court held that possession of units reverted to the owners when the leases were disclaimed.[42]
[40]HC Decision, above n 2, at [71]–[72].
[41]Bocardo (SA) v Star Energy UK Onshore Ltd [2010] UKSC 35, [2011] 1 AC 380 at [30] per Lord Hope of Craighead. We note that, in the letter to investors dated 23 February 2008, Theta stated that the lease with ART had been “terminated” and that “you don’t have a Deed of Lease in place”.
[42] Wu (SC), above n 1, at [115].
We add that BEMA had sought a card in October 2008 and April 2009. Had those requests been granted, as they ought to have been, BEMA would have exercised possession before 11 May 2009.
Further, the lessee’s rights of exclusive possession cannot have extended to the common areas; and that being so, there is no reason to assume that BEMA surrendered to ART possessory rights BEMA shared with other owners. If so, it enjoyed a sufficient possessory interest in the common areas to sustain a claim in trespass by ouster. Mr Price, who appeared for the respondent, was not prepared to concede this, but he cannot have it both ways. His case depends on common areas having been leased and ART having been given access to them, and that too must be inferred. As Wylie J observed, the evidence is unsatisfactory, but we must do the best we can with it.
Finally, the evidence shows that had BEMA been given access only to the common areas it could have had a locksmith gain entry to its unit and issue working cards and locks, so securing possession as happened in Wu.[43] The evidence is that entry was effected using what Mr Kapa described as a technician when Mr Kapa and Mr Chen met at the unit in September 2013, and when BEMA finally got access cards late in 2015 it had to engage a locksmith to open the unit.
[43]See above at [19] and [22] n 16.
Accordingly, we find that the 11 May letter excluded BEMA, both from exercising possession of the unit and common areas and from using the unit as rental accommodation.
Trespass or nuisance?
Trespass and nuisance distinguished
Trespass is an unjustified direct interference with land in the possession of another.[44] The cause of action protects the possessory interest, and it does so in a simple and powerful way; trespass is actionable without proof of actual damage and although the act of trespass must be intentional, honest mistake affords no defence.[45] Injunction is a usual remedy. Justifications are few — essentially, consent, statutory authority, and necessity — and no question ordinarily arises of balancing harms and benefits of the plaintiff’s use, on the one hand, and the purpose for which the defendant asserted control, on the other.[46]
[44]Bill Atkin “Trespassing on Land” in Stephen Todd and Others The Law of Torts in New Zealand (7th ed, ThomsonReuters, Wellington, 2016) 481 at 482.
[45]Alan Beever A Theory of Tort Liability (Hart, Oxford, 2016) at 42–43.
[46]Atkin, above n 44, at 497.
Nuisance is an interference with the use and enjoyment of land, differing from trespass in that it rests not on interference with the plaintiff’s exclusive possession, but rather on disturbance of the plaintiff’s use. Like trespass, nuisance supports property rights. A given wrong may be actionable in both trespass and nuisance.[47] However, nuisance may require that competing uses be balanced; on the one hand, the plaintiff’s right to undisturbed enjoyment of its land, and on the other, the defendant’s right to use its land for its lawful purposes.[48] Considerations such as unreasonableness of the respective uses and location, intensity and timing, frequency, and duration of the interference may be taken into account. A good example is supplied by the celebrated case of Bamford v Turnley, in which the defendant erected a kiln on his property to burn bricks and the plaintiff complained of “corrupted air” entering his home.[49]
Trespass
[47]Michael Jones (ed) Clerk and Lindsell on Torts (21st ed, Sweet & Maxwell, London, 2014) at [20–02]. For an example that evidences this, see Southport Corp v Esso Petroleum Co Ltd [1954] 2 QB 182 (CA) at 195–197 per Denning LJ and 204 per Morris LJ; and Southport Corp v Esso Petroleum Co Ltd [1956] AC 218 (HL) at 242 per Lord Radcliffe and 244 per Lord Tucker.
[48]Alan Beever The Law of Private Nuisance (Hart Publishing, Oxford, 2013) at 15.
[49]Bamford v Turnley (1860) 122 ER 25 (CA) at 29.
This summary suggests that trespass is the natural fit in this case. That is so for two reasons. First, it was only by denying the possessory interest protected by trespass that Theta interfered with BEMA’s intended residential use. Second, no question arises of balancing uses; the respondents do not seek to justify themselves by pointing to uses of their own, and in any event BEMA’s residential use could never be considered unreasonable, for it is both a fundamental use of property and the usual use in the unit’s immediate locality.[50]
[50]See Sedleigh-Denfield v O’Callaghan [1940] AC 880 (HL) at 903 per Lord Wright.
Difficulty arises only because the law limits access to trespass; it controls standing to claim the remedy, limiting it to the person with possession at the time,[51] and insists that the interference be direct.[52] The paradigm case of trespass is one in which the defendant enters the plaintiff’s land by crossing the boundary. A direct intrusion is ordinarily considered essential because it keeps the tort within proper bounds, protecting not only the plaintiff’s rights of control over its land but also the corresponding rights of its neighbours. For example, it has been suggested that a direct intrusion is necessary to justify the rule that trespass is actionable without proof of loss.[53]
[51]Atkin, above n 44, at 488.
[52]Beever, above n 45, at 61–62.
[53]Adams v Cleveland-Cliffs Iron Co 602 NW 2d 215 (MI Ct App 1999) at 220–221.
With respect to standing, we have held that possession of the unit lay with BEMA as at 11 May 2009, giving it standing to sue for trespass by exclusion from the unit; and further that there is no reason to infer that BEMA ever surrendered possessory rights to the common areas, allowing it (following Wu) to sue a joint owner for trespass by ouster.[54] On the facts we have found regarding possession, we need not invoke the doctrine of trespass by relation.[55]
[54]Wu (SC), above n 1, at [116]–[117].
[55]Jones, above n 47, at [19–27].
With respect to directness, in New Zealand law it may be trespass to exclude a person entitled to possession even where, as in Wu, the defendant did not itself physically enter the land. As Professor Atkin remarks, speaking of Wu, it is hard to see an electronic change in the locks as a form of direct entry, but “it has direct consequences for the affected co-owner, and can be seen as a direct interference totally preventing the use and enjoyment of the land”.[56] We agree. We recognise that at first instance in Wu Asher J did not find trespass proved because he doubted, without deciding, that remotely changing the electronic configuration of locks was a sufficiently direct intrusion.[57] But the Supreme Court plainly found this a sufficient act of exclusion. Its conclusion was simply that Mr Wu had a cause of action in trespass because he was unlawfully excluded from the common property.[58] We observe that while the act did not occur on the property, it had immediate physical consequences there: the owner could not open the door.
[56]Atkin, above n 44, at 497.
[57]Wu (HC Asher J), above n 6, at [75].
[58]Wu (SC), above n 1, at [117].
We do not find the Supreme Court judgment in Wu relevantly distinguishable. It is true that the Court focused on trespass by ouster from common property, but it did not preclude trespass by exclusion from the units.[59] We see no material difference between remotely changing a lock so that an existing card no longer works and refusing to give the owner a card in the first place; the owner is unlawfully locked out in both cases and its loss of possession is immediate and complete.[60]
[59]At [115]–[117].
[60]As noted at [15] above, Theta controlled the issue and programming of cards.
We conclude, following Wu and differing with respect from the Judge in this case, that BEMA had a cause of action in trespass and the elements of the cause of action were made out as at 11 May 2009.
Nuisance
The conclusion just reached makes it strictly unnecessary to consider nuisance, but we record our conclusions. As indicated above, by excluding BEMA the Body Corporate and Theta interfered in BEMA’s use, and there can be no suggestion that the interference was justified. The question is whether the manner of exclusion amounted to nuisance.
The paradigm private nuisance involves some form of entry onto the plaintiff’s land, though not so as to interfere with possession. The nuisance is often tangible — smoke, fumes, dust and vibration, for example — but it extends to less tangible intrusions that disturb peace of mind and enjoyment of the land.[61]
[61]Bisso v Southworth 10 SW 523 (SC TX 1888); Blackburn v Bishop 299 SW 264 (Ct Civ App TX 1927); Cherry v Williams 61 SE 267 (SC NC 1908); and Outrim and Li [2010] NZAR 282 (HC). See also William L Prosser “Nuisance Without Fault” (1942) 20 Texas L Rev 399 at 414–415.
At first instance in Wu, Asher J held that nuisance must evolve to changing circumstances of property ownership, and that it was one act of nuisance to reprogram locks to deny access to units, and another to maintain electronic locks on common areas so the plaintiffs could not access those either.[62] We agree that these unmistakeably exhibited the essential quality of acts directed against the plaintiff’s enjoyment of land.[63] Although done remotely by reprogramming electronic locks or by refusing an owner a card, they had physical consequences on the property, locking the owner’s door against their entry.
[62]Wu (HC Asher J), above n 6, at [30]–[31].
[63]See Jones, above n 47, at [20–01]; and Todd, above n 44, at 526.
This Court generally endorsed Asher J’s reasoning. As noted, the Supreme Court decided the case in trespass and doubted the availability of nuisance. However, it did not remark upon Asher J’s findings about intrusion. The Court’s doubts related to the issue of emanation from land of the defendant.[64]
[64]Wu (SC), above n 1, at [125].
As the Supreme Court recognised, a private nuisance “usually” emanates from the defendant’s land.[65] To say that emanation is usual is to recognise that it may not always be necessary. It is undoubtedly a feature of the paradigm case of competing uses of neighbouring land, in which the plaintiff must prove that the defendant’s use interfered with its own. As Lord Goff put it Hunter v Canary Wharf Ltd, a relatively recent case which appears to be the source of the term ‘emanation’:[66]
… for an action in private nuisance to arise in respect of interference with the plaintiff’s land, it will generally arise from something emanating from the defendant’s land.
This use of the term is plainly descriptive, not prescriptive. Lord Goff instanced “noise, dirt, fumes, a noxious smell, vibrations, and such like”.[67]
[65]At [122]; and Barratt Homes Ltd v Dŵr Cymru Cyfngedig (No 2) [2013] EWCA Civ 233, [2013] 1 WLR 3486 at [60] per Lloyd Jones LJ, [81] per Arden LJ and [96] per Pill LJ.
[66]Hunter v Canary Wharf Ltd [1997] AC 655 (HL) at 685 per Lord Goff of Chieveley; see also at 700 per Lord Lloyd of Berwick. Clerk and Lindsell attribute the term to this quote: see Jones, above n 47, at [20–09].
[67]Hunter v Canary Wharf Ltd, above n 66, at 685 per Lord Goff of Chieveley.
It will be recalled that public nuisance is an interference with a right belonging to the plaintiff as a member of the public, while private nuisance is an interference with (relevantly) the plaintiff’s use of land that it occupies.[68] To similar effect, it has been said that historically “to trouble a man in the exercise of his rights over land without going so far as to dispossess him was a trespass or a nuisance according to whether the act was done on or off the plaintiff’s land”.[69] These definitions address the act and its effect on the plaintiff, so it is unsurprising to find in the authorities instances of private nuisances committed on land not occupied by the defendant.[70] The frontager cases are an example, as the Supreme Court recognised in Wu.[71] We find those cases directly analogous to this one, because the respondents denied access from common areas to private land (the unit). Were emanation from the defendant’s land essential the plaintiff would want for a remedy in any case in which an act on public land interfered substantially with its use of its own land.[72]
[68]Jones, above n 47, at [20–01].
[69]F H Newark “The Boundaries of Nuisance” (1949) 65 LQR 480 at 481. Lord Goff approved of this statement: Hunter v Canary Wharf Ltd, above n 66, at 687–688.
[70]See for example Antrim v Ontario Truck Centre Ltd [2013] SCC 13, [2013] 1 SCR 594 at [2] (public works on highway); Gautam v Canada Line Rapid Transit Inc [2015] BCSC 2038 at [11]–[12] (public works on street); Thomas v National Union of Mineworkers (South Wales Area) [1985] 2 WLR 1081 (HC) at 1109 (picketing of homes); and The Church of Jesus Christ of the Latter Day Saints v Price [2004] EWHC 3245 at [153]–[154] and [164] (shouting on public street).
[71]The term “frontager cases” is sometimes used to include public nuisance, where the right injured is shared in common with the public, as where movement along a road is obstructed; see for example Amalgamated Theatres Limited v Charles S Luney Ltd [1962] NZLR 226 (SC) at 228. We use it to define a narrower class, those private nuisance cases in which the plaintiff’s access from private land to a public thoroughfare is blocked. We respectfully note that the Supreme Court judgment in Wu transposes public and private nuisance, though the quote from Winfield and Jolowicz is correct: Wu (SC), above n 1, at [129]; and WVH Rogers Winfield and Jolowicz on Tort (18th ed, Thomson Reuters, London, 2010) at [14–39]. See also Murray v Wellington City Council [2013] NZCA 533, [2014] NZAR 123 at [32].
[72]Clerk and Lindsell doubt the need for emanation and describe it as a “mechanistic” concept that “would be unlikely to contribute to the principled resolution of disputes in so diverse an area of law”: Jones, above n 47, at [20–09]. See also Bill Atkin “Nuisance” in Stephen Todd and Others The Law of Torts in New Zealand (7th ed, ThomsonReuters, Wellington, 2016) 525 at 534.
For these reasons, we hold that the cause of action in private nuisance was available to BEMA and its elements were made out.[73] If it were necessary to do so, we would find the respondents liable in private nuisance, but for the reasons given at [47] above we prefer to locate liability in trespass.
Breach of natural right of access
[73]There could be no suggestion that the interference with use was less than substantial: see the discussion in Atkin above n 72, at 538–540. See also the different approach taken by the Canadian Supreme Court in Antrim v Ontario Truck Centre Ltd, above n 70, at [48].
We have come to this last because we need not base our decision upon it and elect not to. As is apparent from Wylie J’s reasons, the claim was pleaded as breach of a freestanding “natural right of access”. The pleading does not invoke the legislation or rules. The notice of appeal did not squarely put the Judge’s conclusion on this cause of action in issue, merely recounting relevantly that BEMA was refused access for a period. In his written arguments Mr Rooney did not address this cause of action at all.
When we inquired why a claim was not brought to enforce the rules,[74] counsel contended that the pleading sufficed. This point is arguable, but it is plain that not until now has the case been examined as a claim under the rules. In the circumstances, natural justice would require that we allow Mr Price to file further submissions explaining why BEMA should not now be permitted to invoke the legislation and rules and addressing the merits. As we have allowed the appeal on other grounds, it is not necessary to take that course.
Causation and quantum
[74]There can be no doubt that the Unit Titles Act 2010 contemplates private enforcement; see for example ss 79–84. This must extend to the owner’s fundamental right of access.
As noted, Wylie J considered that BEMA was not locked out of its unit by the letter of 11 May 2009, because it was not in possession of the unit at that time. We have come to a different view, holding that BEMA was in possession and the letter was an act of trespass. We are satisfied that if given access BEMA would have re-let the unit. It follows that the letter caused loss.
There is no dispute about the rate at which loss was suffered; $1,309.22 per month, representing net rent. Trespass is actionable per se, but damages can only be awarded for the period of interference.[75] The Body Corporate and Theta contend, however, that Wylie J correctly found the interference ended when Mr Kapa received notice of the EGM held on 10 December 2009.
[75]Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 (PC) at 717–718.
We have come to a different view. It seems to us that the salient point is that at no relevant time did the Body Corporate and Theta withdraw their demands in the letter of 11 May 2009. On the contrary, they retained control of the unit and continued to pressure BEMA to agree to the Theta lease which, it will be recalled, did not require that BEMA sign the protocol and pay the security deposit. It is telling that BEMA’s October 2011 request for a meeting to discuss access was ignored and as late as September 2013 Theta was still linking access to execution of its lease. Not until the Supreme Court delivered its judgment in October 2014 did the respondents finally accept that they could not insist on the protocol and deposit. They certainly did not accept that at the EGM of 10 December 2009. We accept that BEMA could have forced the issue after December 2009, by issuing proceedings if need be, and its inattentiveness to its own interests is remarkable. But the fact remains that the respondents did not withdraw the letter of 11 May 2009.[76] For these reasons we respectfully disagree with Wylie J that notice of the EGM brought to an end the respondents’ interference with BEMA’s possession and use.
[76]We observe that in Wu a cross-appeal was brought alleging failure to mitigate, but it failed on the facts, the majority reasoning that the owner was not obliged to put a counter-offer to the Body Corporate, upon which the onus lay to find a way of complying with the order made by Lang J on 30 November 2009: Wu (SC), above n 1, at [140] and [143].
In our opinion the interference did not end until BEMA was given access cards on 15 December 2014. Counsel gave us to understand that if we reached this conclusion there is no dispute about quantum. BEMA will have judgment accordingly.
Decision
The appeal is allowed. We set aside the judgment below and enter judgment for BEMA at the agreed monthly rate from 11 May 2009 to 15 December 2014.
The respondents must pay costs in this Court for a standard appeal on a band B basis and usual disbursements.[77] Costs in the High Court should be fixed there.
[77]Mr Price sought to be heard on costs, but only in the event that BEMA was not fully successful.
Solicitors:
James Keat, Auckland for Appellant
Minter Ellison Rudd Watts, Auckland for Respondents
4
5
0