Campbell v Thomson
[2015] NZHC 3026
•2 December 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2015-485-000377 [2015] NZHC 3026
BETWEEN FIONA CAMPBELL
Plaintiff
AND
NICHOLAS THOMSON Defendant
Hearing: 19 November 2015 Appearances:
A C Beck for Plaintiff
A R Armstrong for DefendantJudgment:
2 December 2015
JUDGMENT OF ASSOCIATE JUDGE MATTHEWS
Introduction
[1] Mr Thomson applies for summary judgment on this claim against him by his neighbour, Ms Campbell. The claim arises from an unfortunate event in August
2011. He says it cannot succeed.
[2] Ms Campbell owns Apartment 3 in Anscombe House, Oriental Parade, Wellington. Mr Thomson owns Apartment 4, which is directly above Apartment 3. The building is owned by Anscombe Limited (Anscombe) in which both Ms Campbell and Mr Thomson are shareholders. They hold occupation licences from Anscombe for their respective apartments which entitle them to occupy, use and enjoy them as though they were the owners.
[3] Shortly after moving into his apartment in 1998, Mr Thomson had a cold water fish tank installed by a Wellington pet-shop proprietor who specialised in fish. It was installed in the laundry, but could be viewed from the adjacent living area through a framed opening in the wall. In 2007 Mr Thomson decided to replace this
tank with a heated saltwater fish tank which would allow him to keep tropical fish.
Campbell v Thomson [2015] NZHC 3026 [2 December 2015]
He engaged a firm called Back Reef Systems Limited (Back Reef) to install the tank, selecting this firm as its principal, Mr Atkins, evidently held himself out as having considerable experience in designing, installing and maintaining tropical fish tanks.
[4] As part of the installation, a supply tank was placed in a cupboard near the main tank. Its purpose was to act as a reservoir, partly to enable the water in the main tank to be properly filtered and partly so the water in that tank could be topped up as the level lowered from evaporation. A pump and an overflow pipe were installed in the main tank to ensure that the supply tank topped up the main tank to the level required. Initially it was intended that the supply tank would be topped up manually.
[5] It soon became apparent that due to the temperature of the water in the tropical fish tank being higher than in the previous cold water tank, evaporation was taking place at a greater rate. This meant that the supply tank had to be topped up frequently. To avoid this task Mr Atkins installed a hose from the tap over the laundry tub to the supply tank, which would supply mains pressure water to that tank, as required. Control of this water source necessitated the installation of a float switch in the supply tank which opened and closed a valve on the inlet pipe. This had the effect of admitting water from the high pressure hose to the supply tank when the water level in the supply tank dropped, and then closing off the supply when the water in the supply tank reached the required level.
[6] The hose from the laundry tap to the supply tank fed into a smaller tube within the supply tank which was connected to the control mechanisms I have described. That tube was fixed to a PVC pipe in the supply tank, by means of a plastic tie, to keep it in place.
[7] Sometime during the night of 10 August, or early in the morning of the following day, the inlet tube became unattached from the PVC pipe to which it had been tied, and thus from the valve which cut off flow within it, and moved to a position outside the supply tank. How this came about is a matter of conjecture. The result, however, is not. Mains pressure water flowed from the main pressure pipe
onto the floor of Mr Thomson’s apartment, and thence into Ms Campbell’s
apartment, other apartments and common areas beneath.
[8] At the time Mr Thomson was away, but his son was at the apartment. At about 5.00 am, another resident of the building found water in the common areas on levels 1, 2 and 3 of the building and alerted Mr Thomson’s son, who then turned off the tap.
[9] The water which spread from Mr Thomson’s apartment caused extensive damage to the apartments and the common areas below. Anscombe had an insurance policy which responded to much of the damage which had occurred, though this took a considerable time to bring about.
Preliminary point – affidavits
[10] At the commencement of argument Mr Armstrong tendered a further affidavit from Mr Thomson, and an affidavit from Mr S J Atkins who is the sole director of Back Reef. He informed me that Mr Thomson’s affidavit was proffered in order to correct an error on Mr Thomson’s part on the mechanics of the hydraulic system between the two tanks. Mr Atkins’ affidavit was proffered to explain the system by which the tanks operated, and his part in their maintenance. Mr Beck opposed this application.
[11] After hearing counsel I accepted the affidavits into evidence. It is most unorthodox to proffer additional evidence by way of affidavit at a summary judgment hearing. However, Mr Beck had received the evidence in draft a month earlier, and in final form over three weeks before the fixture. He did not point to any prejudice, for example by way of needing to call additional evidence himself in response. Given the lack of any identified prejudice, and the fact that the evidence had been in Mr Beck’s hands for some weeks, I ruled that it should be admitted.
Ms Campbell’s case
[12] In this proceeding Ms Campbell claims from Mr Thomson losses she says she has incurred which are outside the cover provided by the Anscombe policy. She
claims losses for alternative accommodation and storage costs for her personal effects while her apartment was not able to be occupied, for airfares to and from Wellington, for body corporate and professional fees, for an excess on her own insurance policy, interest, expenses yet to be incurred, and for general damages. In all, she claims the sum of $315,476.32.
[13] Ms Campbell pleads two causes of action. First, she claims under the principle in Rylands v Fletcher, that Mr Thomson is responsible without fault for the damage caused by the escape of water from his apartment to Apartment 3.1
Secondly, Ms Campbell says Mr Thomson owed her a duty of care to ensure his apartment was not used in such a way as to cause her damage, and to ensure that his fish tank was plumbed in such a way that water could not escape into Apartment 3 and to install appropriate safety mechanisms to ensure that was the case. She says that Mr Thomson was in breach of these duties, and thus caused her loss.
Mr Thomson’s case
[14] Mr Thomson applies for summary judgment on Ms Campbell’s claim under r 12.2(2) of the High Court Rules. This provides that the Court may give judgment against a plaintiff if the defendant satisfies the Court that none of the causes of action in the plaintiff’s statement of claim can succeed.
[15] The approach the Court is to take to an application for summary judgment by a defendant is described in Westpac Banking Corp v M M Kembla New Zealand Ltd:2
[64] The defendant bears the onus of satisfying the Court that none of the claims can succeed. It is not necessary for the plaintiff to put up evidence at all although, if the defendant supplies evidence which would satisfy the Court that the claim cannot succeed, a plaintiff will usually have to respond with credible evidence of its own. Even then it is perhaps unhelpful to describe the effect as one where an onus is transferred. At the end of the day, the Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment made by the Court on interlocutory application is not one to be arrived at on a fine balance of the available evidence, such as is appropriate at trial.
1 Rylands v Fletcher 159 ER 737 (Exch).
2 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA).
[16] A further point relevant to the present case was canvassed in Westpac Banking Corp. Two issues traversed in argument by counsel concerned the extent of a beneficial interest in collection of funds which is required before a collecting bank can be held to have received funds and be liable for knowing receipt, and, secondly, the degree of knowledge to be imputed to a collecting bank. After traversing cases and academic opinions on these issues, which fell far short of establishing a cohesive set of legal principles, the Court observed, “This area of law is marked by present confusion. Clarification is not responsibly undertaken on facts put forward in
abbreviated form and without discovery”3. The Court went on to set out a number of
points on which evidence would be required before the Court could determine liability for knowing receipt by a bank. A conclusion could not be reached without formal discovery and more analysis than had been provided on the summary judgment application before the Court.4
[17] Thus, whilst the Court may decide complex issues of law on a summary judgment application in appropriate cases,5 the limitations imposed by a lack of discovery of documents, evidence presented summarily without cross-examination, and a consequent limit on the degree of analysis which can realistically be undertaken, will impose constraints on the ability of courts deciding summary judgment applications to reach conclusions on complex legal points, particularly in areas of law which are not settled.
[18] Mr Thomson relies on three grounds for this application. First, he says that Ms Campbell has executed an agreement in which she has undertaken not to make a claim against him. Although Mr Thomson is not a party to that agreement, he says that he is entitled to the benefit of it under s 4 of the Contracts (Privity) Act 1982.
[19] Secondly, he says that the escape of the water from his apartment was not within the terms of the principle in Rylands v Fletcher. The water collected by him in the main tank and the supply tank remained in those tanks, and did not escape. Connection of the mains water supply in the laundry to the supply tank was a natural
use of his property, akin to a connection to a washing machine or dishwasher.
3 At [76].
4 At [75] – [78].
5 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 4.
[20] Thirdly, although Mr Thomson admits that he owed Ms Campbell a duty to exercise reasonable care in the use of his apartment to avoid causing harm to her apartment, he says that he was not negligent in relation to the installation of the tanks, and if there was any negligence it was that of Back Reef Systems Limited which installed them. He says he is not liable for any negligence established on the part of that contractor.
The issues for determination
[21] The issues in this case are whether the Court can be satisfied:
(a) that Ms Campbell has released Mr Thomson from liability in respect of the escape of water;
(b) if she has not, that her claim under the principle in Rylands v Fletcher
cannot succeed; and in addition
(c) that her claim in negligence cannot succeed.
First issue: release from liability
[22] Anscombe held an insurance policy over the building with NZI. On
4 December 2014 it settled its claim for damages in a total sum of $659,930.60 plus GST for damage to Apartments 2 and 3, and the common stairway and hallway areas of levels 2 and 3.
[23] On 9 December 2014 an agreement was entered by Anscombe and the owners and licensees of Apartments 2 and 3. The latter are Ms Campbell, together with Mr Scott Campbell and WHK Trustees (Wellington) FC Limited. They are described as the “First Interested Parties”. The recitals to the agreement record the essential terms of the insurance settlement and the fact that the parties wish to record other arrangements they have made in relation to the flooding event.
[24] The arrangements of present relevance relate to possible claims against Mr Thomson. The first interested parties, and the licensees of Apartment 2, agree not to make any claim against the directors of Anscombe, in their capacity as
directors, of whom Mr Thomson is one, and each of the directors of Anscombe agrees not to claim against any of the other directors, in that capacity.
[25] The agreement then records:
3.2The First Interested Parties and the Second Interested Parties agree and undertake not in any way to claim against any of the other registered proprietors of a licence to occupy a flat at 212 Oriental Parade, Wellington for any loss connected in any way with the Event except as provided in clause 3.4 below and the other registered proprietors of a licence to occupy a flat at 212 Oriental Parade, Wellington agree and undertake not in any way to claim against each and any other for any loss connected in any way with the Event.
[26] Mr Thomson interprets this clause as preventing Ms Campbell from bringing the present claim against him, as he is one of the other registered proprietors of a licence to occupy a flat at the address. Although Mr Thomson is not personally a party to the deed, he relies on clause 3.3:
3.3 The parties all agree that any benefit or right which any of clauses
1.2, 2.3, 3.1 and 3.2 of this agreement confers or purports to confer on a person who is not a party to this agreement is intended to be and is
fully enforceable by that person whether against the applicable party or parties to this agreement or against another person who is not a
party to this agreement, as if the person were a party to this agreement.
[27] It will have been noted that clause 3.2 contains the phrase “except as provided in clause 3.4 below”. Problematically, the agreement does not contain a clause 3.4. However, an earlier draft of the agreement did. The solicitor who acted for the parties, except Mr Thomson, in settling and arranging execution of the agreement, has produced a draft which contains the following clause, reproduced exactly:
3.43.3 For the avoidance of doubt, by executing this agreement the First Interested Parties do not waive their right to seek recovery from the occupant of Flat 4 at the time of the Event, Nicholas Thomson, in respect of any loss caused by the Event in excess of the amount the First Interested Parties receive under this agreement, or in respect of loss not indemnified under the policy.
[28] In this draft of the agreement, there is also a clause which has been entirely deleted. This initially bore the number 3.3 (hence the corrected numbering of the
clause quoted above) and recorded that Anscombe did not waive its right to seek recovery from Mr Thomson in respect of payments made by AIG.
[29] In this draft, too, there is a clause originally numbered 3.5, and then renumbered 3.4 as this and the preceding clause sequentially moved forward on the deletion of the original clause 3.3. This clause, now clearly marked 3.4, is the privacy clause which is in the signed agreement as clause 3.3.
[30] The argument presented for Mr Thomson is that the phrase “except as provided in clause 3.4 below” contained in clause 3.2 of the signed agreement, is a reference to the original clause 3.4 in the draft, which was corrected to become clause 3.3 in the draft presented to the Court. In essence, clause 3.4 recorded that the first interested parties do not waive their right to seek recovery from Mr Thomson in respect of any loss they incurred, exceeding the amount received under the insurance settlement. In his affidavit Mr Thomson says that this clause, and the further clause reserving the right of Anscombe to seek recovery from him, were removed and do not appear in the signed agreement.
[31] In contrast, Ms Campbell notes that the agreement went through many drafts between Mr Perry, acting for Ms Campbell, and Mr Withnall, acting for Mr Thomson, and that Mr Perry has advised her that the omission of clause 3.4 was unintentional and the clause was always intended to be part of the agreement. Mr Perry effectively confirms this. He says there was no instruction given to remove the initial clause 3.4 from the final version and it occurred as a result of an administrative error. It was not deliberately removed. Ms Campbell, too, says it was never her intention to release Mr Thomson from liability. As she puts it, “the whole lengthy process of reaching agreement with the insurer had been designed to ensure that the possibility of a claim against the defendant remained”.
[32] Plainly, there is a conflict on the evidence before the Court between Mr Thomson, Ms Campbell and Mr Perry. The view of Ms Campbell and Mr Perry is supported to an extent by an email from Mr Withnall dated 4 November 2014 which includes a sentence which refers to “the intention of all the parties in the
instructions from the outset to effect finality as between all of them with the only
exception as between Mr Thomson and Fiona Campbell”.
[33] On the evidence before the Court there is sufficient to raise a real doubt that the signed agreement accurately reflects the intention of the parties at the time they signed it. Mr Beck argued that this was an issue of interpretation, because the only meaning that could be given to the exception within the ancillary clause is that it was not intended to exclude a claim by Ms Campbell against Mr Thomson. I am not attracted to that argument. The plain fact is that in the signed agreement there is no clause 3.4 and I do not think that interpretation of clause 3.2 will result in an entire additional clause being inserted in the agreement. There is more force in Mr Beck’s submissions that reliance may be placed on the Contractual Mistakes Act, and on the equitable doctrine of rectification.
[34] Mr Armstrong says that any issue about the application of the Contractual Mistakes Act, or rectification, is between the parties to the agreement, and Mr Thomson is not one of them. He says that if the agreement is to be challenged as not correctly recording the intention of the parties, that is for the parties to the agreement to resolve and, as no steps have been taken to that end, Mr Thomson is entitled now to rely on the document as it stands.
[35] Whilst there might be some force in that argument if presented at trial, on an interlocutory application for summary judgment, entry of which would finally determine the claims brought by Ms Campbell against Mr Thomson, I am not satisfied that the signed agreement can be relied on as determinative of Ms Campbell’s right to sue. It is arguable that relief may be available to Ms Campbell on the bases I have identified. The prospect of rectification is pleaded in her reply to the statement of defence filed by Mr Thomson. I accept Mr Armstrong’s argument that challenge to the agreement is a matter for the parties to that agreement, and unless the issue raised by Ms Campbell is accepted by the other parties to the agreement she and the other First Interested Parties defined in the agreement may need to file a separate proceeding squarely raising this issue. However, I do not accept that on an application for summary judgment the Court should proceed on the document as it stands when there is sufficient evidence before
the Court to show that the document may not accurately record the agreement that was reached.
[36] For these reasons I reject the submission that the ancillary agreement is a defence to the present claim.
[37] Before turning to the second issue, I make one further observation. The present claim is brought by Ms Campbell in her personal capacity for losses which she, personally, says she has suffered as a result of the escape of water into her apartment. The ancillary agreement relates to the rights of the licensee of Apartment
3, three named parties who appear to be trustees. Whilst Ms Campbell is named as one of the trustees, she is not a party to the agreement in her personal capacity. Even if the agreement stands without modification, it appears at least arguable that it does not affect a claim by Ms Campbell in her personal capacity. This point was not argued before me, and I make no further reference to it.
Second issue: Rylands v Fletcher
[38] Rylands v Fletcher was decided in 1866.6 In Easton Agriculture Ltd & Eveleigh Farming Company Limited (In Receivership) v Manawatu-Wanganui Regional Council, Kós J set out the context of the decision in this case in the following terms:7
[108] It is worth reminding ourselves that the rule in Rylands v Fletcher represented not so much an advance in the law in 1866, as a reversion to a more medieval approach to tort liability. One in which liability was absolute, regardless of negligence. By 1866 negligence had become the effective organising principle of actions on the case. Neglect – negligence – characterised actions on the case, in contrast to trespass which tended to focus upon intentional wrongdoings. Rylands v Fletcher, as the late Professor A W B Simpson points out, was an action brought squarely on the basis that Mr John Rylands’ reservoir, built above old coal workings, was “carelessly and negligently constructed”. At first instance an arbitrator had found Mr Rylands’ contractors negligent. But not Mr Rylands personally. The former were not worth pursuing. The latter was not vicariously liable for their actions. Mr Fletcher therefore pursued Mr Rylands in his personal capacity to the Court of Exchequer in banc (where he lost) and thence (but
6 Rylands v Fletcher, above n 1.
7 Easton Agriculture Ltd v Manawatu-Wanganui Regional Council [2012] 1 NZLR 120 (HC) (footnotes omitted).
now on the basis that liability should be strict) to the Court of Exchequer
Chamber (where he won). There, Blackburn J said, famously:
We think that the true rule of law is, that the person, who for his own purposes brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and that if he does not do so, he is prima facie answerable for all damage which is the natural consequence of its escape.
[39] On appeal the dictum of Blackburn J was expressly approved by the House of Lords, but subject to a further qualification, added by Lord Cairns, that for liability to be established the defendant’s use of the land must be “non-natural”8.
[40] In the present case the claim by Ms Campbell is based on the straightforward proposition that Mr Thomson’s fish tanks and the related high pressure water supply from the laundry tap were a non-natural use of his property which resulted in escape of water to her apartment, and he is liable for her losses as a consequence, without it being necessary for her to prove that he was negligent.
[41] Mr Armstrong says this case cannot succeed. He says that Mr Thomson’s installation was as much a natural use of his apartment as is a washing machine or a dishwasher, and what has occurred is simply the failure of a connection of a pipe within the apartment supplying water to what is effectively an appliance, and this is no different from the failure of any other connection within the apartment involving pipe work carrying water at mains pressure.
[42] Mr Beck says that it was not the water piping in the apartment which failed; rather, it was a particular device which had a faulty mechanism which failed, and that allowed water to escape. He says the use of the apartment was non-natural, and it was exceptionally dangerous. The test, he says, is whether the inherent danger of Mr Thomson’s activities is such that other members of the community could not be expected to accept it. Mr Beck also cites Autex Industries Ltd v Auckland City
Council,9 and Owens Transport Ltd v Watercare Services Ltd,10 in which summary
judgment on claims based on Rylands v Fletcher were refused, in the latter case
8 Rylands v Fletcher (1868) L.R. 3 H.L. 330 (HL).
9 Autex Industries Ltd v Auckland City Council [2000] NZAR 324 (CA).
10 Owens Transport Ltd v Watercare Services Ltd [2010] NZAR 568 (HC).
because the law was in a state of development, and because resolution of disputes based on this cause of action is heavily fact dependent.
[43] In Easton Agriculture, Kós J reviewed recent developments in application of the principle of Rylands v Fletcher. He noted that the High Court of Australia had abandoned application of the rule in Burnie Port Authority v General Jones Pty Ltd, finding that the principle had been absorbed into the general principles of negligence, public nuisance and trespass.11 This course was not followed in England, the House of Lords declining to do so in Transco plc v Stockport Metropolitan Borough Council.12 Lord Bingham said:13
Bearing in mind the historical origin of the rule, and also that its effect is to impose liability in the absence of negligence for an isolated occurrence, I do not think the mischief or danger test should be at all easily satisfied. It must be shown that the defendant has done something which he recognised, or judged by the standards appropriate at the relevant place in time, he ought reasonably to have recognised, as giving rise to an exceptionally high risk of danger or mischief if there should be an escape, however unlikely an escape may have been thought to be.
[44] In Autex Industries Ltd v Auckland City Council, the majority of the Court of Appeal left open the question of whether the principle of Rylands v Fletcher continued to apply in New Zealand.14 The application for summary judgment before the Court had been moved to that Court by the High Court. The majority concluded that the discretion in the Court to refuse summary judgment, even though the material before the Court did not itself raise an arguable defence, should be exercised in that case. The majority said:15
Clearly both parties and Master Kennedy-Grant in removing the summary judgment application into this Court considered that there was sufficient material before the Court to allow reconsideration of Irvine having regard to common law developments in other jurisdictions. In that regard the notice of opposition asserted that Rylands v Fletcher was no longer good law in New Zealand, expressly relying on Burnie, and also that the council’s use of the land under the street to carry water in a water main was a natural use of the land. The council having mistakenly assumed it was unnecessary to adduce any affidavit evidence, now seeks to do so.
11 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 (HCA).
12 Transco plc v Stockport Metropolitan Borough Council [2003] UKHL 61, [2004] 2 AC 1.
13 At 11.
14 Autex Industries Ltd v Auckland City Council, above n 9.
15 At 329.
Against that background we are persuaded that the case is not appropriate for entry of summary judgment and the proper course is to dismiss the application and remit the case to the High Court for trial in the ordinary way of the causes of action. In doing so we are not to be taken as expressing any view as to the evidence which might be adduced or as to the need for any extensive curial review of the law in this area.
[45] The minority of the Court found there was no tenable argument that in New Zealand the principle in Rylands v Fletcher has been absorbed by the law of negligence.
[46] In the passage just quoted from the majority, the Court referred to Irvine & Company Ltd v Dunedin City Corporation, a case with similar facts to those in Autex.16 In that case the Court of Appeal noted that water is not always dangerous, and is sometimes regarded as falling within the rule in Rylands v Fletcher, and sometimes outside it. The Court found that the carrying of bulk quantities of water in water mains did render the use of water dangerous, and on that basis found that the use of streets for the purpose of water mains was not a natural or ordinary use of land. In Autex the minority of the Court appeared to consider that Irvine was still
good law, and were critical of the approach taken in Burnie. They cited with approval an observation by Professor John Fleming:17
Negligence deals with the wrong way of carrying out an activity, the residuary risk of which it is not unfair for victims to shoulder themselves. Strict liability deals with activities which even when carried out with due care, retain an abnormal risk and could be deemed negligent as such but for their countervailing utility.
[47] After citing this observation, Kós J in Easton Agriculture Ltd said:18
[115] Certainly, as the House of Lords held in Transco, there will be a residue of cases where strict liability properly applies. As noted earlier, such cases involve the imposition of exceptional hazard and (from the adjacent owner’s perspective) unexpected outcome. Take, for instance, the lawful manufacture or storage of explosives. If through no fault of anyone at all they explode, and devastate the neighbourhood, are the neighbours to be denied compensation for want of proof of fault?
[116] It may well be time, however, to reconsider whether the rule should apply to commonplace utilities, such as water and sewerage. Particularly where their presence is obvious to adjacent landowners. It may be that
16 Irvine & Company Ltd v Dunedin City Corporation [1939] NZLR 741 (CA).
17 (1995) Tort Law Review 56 at 60.
18 Easton Agriculture Ltd, above n 7.
Courts will eventually conclude that liability for the failure of such systems is dependent in all cases on proof of negligence.
[48] It will be apparent from this brief summary that widely differing views are held on the application of the principle in Rylands v Fletcher in this country. An entire passage is devoted to the status of the rule in the Law of Torts in New Zealand.19
[49] The facts of the case presently before the Court are very different from cases where substantial bodies of water in public places have escaped from their confines, such as Irvine, Autex, and Transco plc. The present situation is more akin to that in Rickards v Lothian, where water overflowed from a lavatory basin on the top of a building causing damage on the second floor.20 It was found that the waste pipe had been plugged and the supply tap fully turned on, malicious actions by an unknown person. The Court found that having on the property a proper and reasonable supply of water was an ordinary and proper use of the house, and although the occupier was
bound to exercise all reasonable care, he was not responsible for damage which was not due to his own default, whether caused by inevitable accident or the wrongful acts of third persons.
[50] I accept that there are similarities between the installation in this case, and a washing machine or dishwasher, neither of which could reasonably be described as a non-natural user of use of land. Or, to adopt the phraseology of Kós J, these activities do not involve the imposition of exceptional hazard and, from the adjacent owner’s perspective, unexpected outcome. I also accept that after hearing appropriate evidence, it may be open to a court to reach a conclusion similar to Rickards v Lothian.
[51] I am not prepared, however, to draw this conclusion with the degree of certainty which is required in order to enter summary judgment for the defendant. The evidence before the Court describes the mechanism of water supply from the tap, and some of the intricacies of the pipe work from the point of entry of water into
the supply tank, but I have no evidence by way of technical or even practical
19 Bill Atkin “The Rule in Rylands v Fletcher” in Stephen Todd (ed) The Law of Torts in New
Zealand (6th ed, Brookers, Wellington, 2013) at [11.3].
20 Rickards v Lothian [1913] AC 263.
comparison of this installation with acceptable domestic appliances such as washing machines and dishwashers, nor of how robust the installation was relative to the pressure of the water it was intended to convey.
[52] The pipe which came loose from its fixing and left the tank, thereby spreading water onto the floor, appears to be a small diameter pipe which received water from a larger diameter pipe which carried water at mains pressure. According to Mr Atkins he installed a float switch in the supply tank which operated to open a valve, which in turn allowed the mains pressure water to flow into the supply tank to keep it topped up. He says there was a flow restriction on the downstream end of that valve “to reduce flow to a similar level as you would get out of a bench top water filler”. He also installed a second float switch above the first float switch as a safety measure, in case the first one failed for any reason.
[53] Failure of both float switches would leave water flowing from the laundry tap, into the supply tank resulting in it overflowing. That, however, is not what occurred. Rather, the smaller diameter pipe came free. It is not clear on the evidence whether this pipe was carrying mains pressure water or not. It appears, however, that the flow restrictor was, going by the description of it, “on the downstream end of the valve”. This appears to me to mean that when the water left the pipe and passed into the tank, it did so through a flow restrictor, but it does not appear that there was any flow restrictor at any earlier point in the pipe system, for example where the hose met the smaller diameter pipe as I have described. There is no evidence on whether the pipe and/or its mounting were sufficiently robust for mains pressure water, or whether they were similar to the piping and retaining mounts that might be found in a washing machine or dishwasher.
[54] This description of the pipes in the tank is not in any way a conclusion on my part. I have set it out in order to illustrate that it is not clear on the evidence whether the installation in question in this case can properly be classified as imposing no greater danger or risk to other property owners nearby than a washing machine or dishwasher. On the evidence before me I am unable to make a finding as suggested by Mr Armstrong. To phrase my conclusion in terms of the applicable principle, the evidence is insufficient for me to assess the degree of risk inherent in Mr Thomson’s
installation. I have not overlooked the fact that it functioned for some years without failing but that is only one factor which at trial a Court might take into account. I am not satisfied the cause of action cannot succeed on the facts.
[55] This conclusion, combined with the differing views of the law in this area which I have discussed, lead me to the conclusion that it has not been shown that this cause of action cannot succeed.
Third issue: negligence
[56] An application for summary judgment by a defendant can only succeed if it can be shown that none of the causes of action against that defendant can succeed. As I have found against the defendant in relation to the first cause of action, it is not strictly necessary to consider the second and, indeed, as the application before me must fail, resulting in the case proceeding to trial, it is undesirable that I do so at any length. My conclusions are confined accordingly.
[57] Mr Thomson accepts that he owed a duty of care to the plaintiff to take reasonable care in relation to the installation of his tanks. He says, however, he was not negligent, and if there was any negligence it was on the part of Back Reef, an independent contractor engaged by him on whom he was entitled to rely. In this respect Mr Thomson relies on Cashfield House Ltd v David & Heather Sinclair
Ltd.21
[58] To succeed in a claim in negligence it is necessary for Ms Campbell to first establish that Mr Thomson owed to her the duty of care that she pleads. It contains three separate and distinct elements, and should more appropriately be seen as three separate alleged duties of care. The first alleged duty was to ensure that his apartment was not used in such a way as to cause damage to the defendant. This is an exceptionally broad allegation. The second more refined alleged duty was to ensure that Mr Thomson’s fish tank was plumbed in such a way that water would not escape into Apartment 3. The third alleged duty was to ensure that appropriate
safety mechanisms were installed to prevent the flow of water into Apartment 3.
21 Cashfield House Ltd v David & Heather Sinclair Ltd [1995] 1 NZLR 452 (HC).
This allegation is also in extremely broad terms and on the material presently before the Court it is difficult to see how it relates to events which occurred. For example, what mechanisms should have been installed to prevent the flow of water into Apartment 3 from a pipe which had become dislodged and was disgorging water onto the floor? If the case proceeds it will be necessary for the duties to be specified more distinctly, but for present purposes the Court must work with the pleading as it stands.
[59] Turning to the breaches, again there are three distinct allegations. I refer to the second, first – failing to install appropriate safety mechanisms to prevent the overflow of water from the fish tank. Given that water did not in fact overflow from the fish tank, it is not clear why this breach is alleged. A similar criticism can be made of the third alleged breach – failing to install appropriate drainage systems to cater for the possible overflow of water from the fish tank. Given that this did not occur, this allegation also appears to be wide of the mark Ms Campbell is endeavouring to hit. The first alleged breach is installing a fish tank that was plumbed directly into the water supply. On its face, this alleged breach appears to be beating against the wind. To recite just a few examples, washing machines, dish washers, some refrigerators, hot water systems and all kitchen and bathroom washing facilities are also plumbed directly into the water supply.
[60] Mr Armstrong did not level criticism directly at these pleadings, but I have little doubt the point remains in reserve, should his application fail. It is not therefore directly in issue, but it has a bearing on the arguments presented on the application for summary judgment. This is because Mr Thomson says that he engaged an expert to install a tropical fish tank and he relied on his appointed contractor. Given that two of the three failings alleged are irrelevant to the events which occurred, the conduct of the installer can only be assessed in any meaningful way in relation to the allegation that Mr Thomson installed a fish tank that was plumbed directly into the water supply. Leaving aside the fact that alleging this action as a breach of the duty of care faces obvious difficulties, it is clear enough on the evidence that this was the action of an appointed contractor with supposed expertise in his field, and not the action of Mr Thomson.
[61] The liability of a person in Mr Thomson’s position was summarised by
Tipping J in Cashfield House in the following terms:22
1. A principal has no vicarious, i.e. secondary, liability for the negligence of an independent contractor on the basis that the activity involved is a particularly hazardous one or on any other basis.
2. The principal may nevertheless in some circumstances owe a primary non-delegable duty of care and thus be liable to those to whom the independent contractor is liable if the independent contractor is negligent.
3. The principal may well also owe a primary duty of care to those who could foreseeably be damaged by the acts or omissions of the independent contractor. That duty may include a duty to select, instruct and sometimes to supervise the independent contractor with reasonable care. The greater the expertise of the independent contractor and the more specialised the task the less call there may well be for the involvement of the principal beyond selection and instruction. If the principal has selected and instructed the independent contractor with the skill and care appropriate to the occasion, the principal should generally be entitled to leave the task to the independent contractor without further supervision. If the principal does so there will be no liability unless, of course, the principal owes a non-delegable primary duty to those damaged by the independent contractor’s negligence.
[62] One needs only state those principles to demonstrate how manifestly unsuitable an application for summary judgment is as a means of disposing of a claim involving the consequences of actions, or inactions, of a principal and a contractor. This is particularly so, given the pleadings in this case, which I have discussed. The evidence before the Court falls well short of placing the Court in a position where it can establish with any degree of certainty where this case fits into the principles enunciated in Cashfield House. At the very least the Court would need to make a decision on the skill and care of Mr Atkins, for which purpose it would need to hear independent evidence on his workmanship.
Outcome
[63] The application for summary judgment by the defendant is dismissed.
[64] Unless there are circumstances of which I am unaware costs should follow the event. Should that be the case my provisional view is that these would be on a
22 Cashfield House Ltd v David & Heather Sinclair Ltd, above n 21, at 465-466.
2B basis, plus disbursements. Counsel are invited to agree costs. If they are unable to do so, memoranda may be filed within 10 working days, of no more than three
pages in length. Costs will then be decided on the papers.
J G Matthews
Associate Judge
Solicitors:
Alan Heward, Nelson.
Young Hunter, Christchurch.
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