First Gas Limited v Gibbs

[2022] NZHC 713

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2021-443-016

[2022] NZHC 713

BETWEEN

FIRST GAS LIMITED

Plaintiff

AND

RUSSELL VICTOR GIBBS PARANI JOSEPHINE GIBBS LEIGH JOSEPH HORTON

Defendants

Hearing:	31 March 2022 (teleconference)
Appearances:	L P Wallace and J Atkin for the Plaintiff M Gibbs for the Defendants
Judgment:	8 April 2022

JUDGMENT OF GRICE J

(Without notice (Pickwick) application for stay of enforcement pending appeal)

[1]                 This is an application by the defendant trustees (the Trust) for a stay of execution of the judgment given in this matter on 3 December 2021, including the permanent injunction and declarations made in that judgment, pending an appeal to the Court of Appeal.1

[2]The plaintiff opposes the stay.

[3]                 This matter has been brought on as an urgent application at short notice at the request of the Trust. I have dealt with it as a without notice application, but First Gas Ltd (First Gas) has been served and appeared through counsel. It has filed a notice of

1      First Gas Ltd v Gibbs [2021] NZHC 3309 [the Decision].

FIRST GAS LIMITED v GIBBS [2022] NZHC 713 [8 April 2022]

opposition and submissions but has been unable to file the three affidavits referred to in its notice of opposition. I advised the parties of the result of the without notice application at the teleconference on 31 March 2022. This is the reasons judgment.

Background

[4]                 In my substantive decision of 3 December 2021 (the Decision), I granted a declaration in favour of First Gas concerning its rights to enter the Trust land and carry out repairs on the Maui Pipeline.2 I also issued a permanent injunction prohibiting the Trust from restricting, obstructing or otherwise interfering with the plaintiff’s access rights under the relevant easements and authorisations and prohibiting them from taking any action that restricted or interfered with First Gas’ rights to enter onto the land for the purposes of, among other things, repairing or operating the Maui Pipeline.3

[5]                 The central issue in the case was the interpretation of the statutory provisions allowing entry on land on which the pipeline was laid for the purposes of repair. The focus was on whether First Gas’ repair and maintenance rights were limited so it could not use as of right land beyond the 12 metre-wide easement strip in the course of its repair and maintenance work on the pipeline. I found that when First Gas was repairing the pipeline and carrying out any other authorised works and for entry and egress, storage and depositing of machinery and equipment, as well as depositing spoil incidental to the works, it was entitled to access and to use the land described in the easement certificates beyond and not limited to the 12 metre strip of the pipeline corridor. I also found there was no arrangement or agreement applying to future works on the pipeline, nor were First Gas’ rights and powers conditional on its working in consultation with the landowners apart from various notice requirements and the observation of its statutory responsibilities. The orders issued were subject to conditions relating to notice and not disrupting the farming activities, as well as making good any damage or disruption to the land. The conditions were annexed to my judgment.4

2 At [278].

3 At [278].

4      As Attachment 1 – Draft Conditions.

[6]                 The Gibbs Trust lodged an appeal against that judgment. The grounds of that appeal, Ms Gibbs tells me, will now be amended to include reference to an historic written agreement she has recently located in the course of her research of parliamentary and related records. The agreement is between Maui Development Ltd and Federated Farms Inc,. It predates and Ms Gibbs says informs the interpretation of the legislation which was the subject of the Decision.

[7]                 Ms Gibbs suggested that the court issue a stay requiring that the plaintiff comply with the historic agreement a copy of which is attached to an affidavit of Mr Gibbs (dated 23 March 2022). The date of the agreement is not clear from the copy attached to Mr Gibb’s affidavit. On its face, it is an agreement between Maui Development Ltd and Federated Farmers of New Zealand Inc acting on behalf of all farmers affected by the pipeline easements issued in respect of the Oanui to Auckland gas pipeline and the Oanui to New Plymouth condensate pipeline.

[8]                 Also attached to Mr Gibbs’ affidavit are excerpts from Hansard relating to the passage of the Petroleum Amendment Bill, dated 6 November 1974, and  the  Natural Gas Corporation Bill from 22 September and 4 and 25 October of a year that is not apparent from the documents produced.

[9]                 The agreement is produced for the purposes of establishing that the agreed width of the easements had been the subject of an agreement between an earlier pipeline owner and Federated Farmers. Mr Gibbs says that agreement is contrary to the findings in the Decision and if that document had been before me, I would have interpreted the legislation, insofar as it related to rights of access by First Gas to repair and maintain the pipeline, differently.

[10]               A brief perusal of the agreement indicates that, while parts of the agreement refer to the management and operation of the pipelines, the primary focus of the agreement is on the construction of the pipeline.

[11]              Ms Gibbs took some time to outline the meaning of the documents. However, whether the documents are able to be adduced on appeal, and the effect of them if they

are, will be matters for the Court of Appeal. They may be relevant to an assessment to be made when considering a stay.

[12]              Because of the existence of these documents, Mr Gibbs alleges that First Gas defaulted in discovering them and should be held in contempt of court.

[13]              Before making the present application to the Court, the Trust had applied direct to the Court of Appeal for a stay. The Court of Appeal indicated it was appropriate for this Court to first consider the stay and, if the stay was refused, the matter might proceed on to the Court of Appeal. This is the process contemplated by r 12(3) of the Court of Appeal (Civil) Rules 2005 (the Rules). In a Minute dated 23 March 2002, Cooper J indicated he saw no reason why that procedure should be departed from in this case.5

[14]              In addition, his Honour noted there were orders sought by the Trust which apparently invoked the contempt jurisdiction in relation to alleged failures by First Gas to provide discovery. He indicated that was not a matter which ought to be pursued in that Court as if it were a court of first instance. Any application in that respect should be made to the High Court.6

[15]              In relation to the stay application, insofar as it sought orders to remove structures, his Honour said:7

… I note the advice of counsel for the respondent that the fencing and water monitoring structure will be removed within the next two weeks. There is insufficient information before the Court to justify making an order in respect of those structures and given the timeframe it seems unnecessary to deal with that issue as a matter of urgency.

[16]              His Honour also noted that the application to adduce further evidence in support of the appeal, was not a matter that needed to be dealt with urgently and could be subject to an interlocutory hearing prior to the fixture for the appeal if that was necessary.8

5      Minute of Cooper J, Gibbs v First Gas Ltd CA29/2022, 23 March 2022 at [3].

6 At [6].

7 At [7].

8 At [8].

Legal principles

[17]              Rule 12 of the Rules provides for this Court to stay execution of a decision pending the determination of the appeal, subject to any conditions this Court thinks fit.9

[18]              An application under r 12(3) requires the Court to balance the competing rights of the party who obtained the judgment appealed from (that is, the benefit of that judgment) against the need to preserve the appellant’s position against the event of the appeal succeeding. The object has been described as:10

… to arrange matters that, when the appeal comes to be heard, the appellate court may be able to do justice between the parties, whatever the outcome of the appeal may be …

[19]Factors to be taken into account in the balancing exercise include:11

(a)whether the appeal may be rendered nugatory by the lack of a stay;

(b)the bona fides of the applicant as to the prosecution of the appeal;

(c)whether the successful party will be injuriously affected by the stay;

(d)the effect on third parties;

(e)the novelty and importance of questions involved;

(f)the public interest in the proceeding; and

(g)the overall balance of convenience.

9      Court of Appeal (Civil) Rules 2005, r 12(3) and (4).

10 Minnesota Mining & Manufacturing Co v Johnson & Johnson Ltd [1976] FSR 139, [1976] RPC 671 (CA) at 676 per Buckley LJ, cited by the Court of Appeal in New Zealand Insulators Ltd v ABB Ltd (2006) 18 PRNZ 459 (CA) at [13].

11 Keung v GBR Investments Ltd [2010] NZCA 396, [2012] NZAR 17 at [11]; and Dymocks  Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].

[20]              While not included in this list, the apparent strength of the appeal now appears to be generally recognised as an additional factor.12

Grounds for stay application by the Trust

[21]              The grounds put forward by the Trust for the stay application are that the substantive declarations and injunction enable First Gas to enter and re-enter the Trust land to carry out works within and beyond the easement, to permit and cause unlimited disruption and damage, including permanent damage, to the Trust farm and land, including cultural values, without any discussion, consultation, and negotiation, in breach of “the Maui pipeline agreement”. That is the agreement attached to the affidavit of Mr Gibbs between Maui Development Ltd and Federated Farmers of New Zealand Inc.

[22]              Insofar as evidence of damage occurring due to the First Gas works, Mr Gibbs says that the First Gas works has been causing hazards. He says in his affidavit:

(a)On 27 October 2021, First Gas erected a fence on the Trust land at Pariroa, pursuant to the Court order and interim injunction. The structure was for the purpose of excluding the Trust stock from the project area.

(b)The Court order and injunction did not provide for any discussion, consultation or negotiation with the Gibbs whānau regarding stock exclusion standards and methods.

(c)On 4 January 2022, during the Christmas period, Mr Gibbs went to check the work and the cattle had been walking over the netting and fence. The calves and cows were walking in and out of the worksite and stepping over and through the netting each time. He produced video footage he took on that day.

12     Keung v GBR Investments Ltd, above n 11, at [11].

(d)Mr Gibbs has had to go to Pariroa on a much more frequent basis to check on the cows and calves due to the presence of the unsafe First Gas fence. He said he could not be there all the time. Mr Gibbs’ cattle yards are about 6 kilometres away from Pariroa.

(e)On 18 March 2022, he went to check the First Gas worksite at Pariroa. The calves and cows were walking in and out of the worksite, stepping over and through the netting. He produced further video footage he took of this.

(f)The fence is not fit for purpose and is a continual hazard to the stock. The presence of this hazard is causing damage and has the potential to cause further damage and injury to the stock.

(g)The most likely risk is entanglement and/or wire cuts on the legs and udders of the cattle. The presence of the fence is causing an unnecessary work and time burden as well as the stress of liability to the Gibbs whānau under the Animal Welfare Act 1999.

(h)On 9 December 2021, First Gas installed a structure on the land for water monitoring, pursuant to the Court order and injunction. The order and injunction did not provide for any discussion, consultation or negotiation with the Gibbs whānau regarding the design of the structure.

(i)Once installed, First Gas realised the cattle would likely break the inlet and outlet, so it erected a post rail fence around the structure on 17 December 2021. A picture was produced of a wooden fence. Mr Gibbs says the fence is not fit for purpose as it was not high enough to exclude the cattle. The presence of this hazard had the potential to cause damage and injury to the stock. It was causing unnecessary work and time as well as stress of liability to the Gibbs whānau under the Animal Welfare Act.

[23]              Mr Gibbs also filed a memorandum in support of the application. That traverses the background to this matter and relies on the Maui Pipeline Agreement, which Mr Gibbs says is:13

… the grandfather of the middle-line proclamation procedure and the Petroleum Act itself, the middle-line proclamations and easements themselves issued pursuant to section 70A (now section 71), easement fees, and restoration and compensation agreements. First Gas purchased the Maui pipeline from MDI on this basis.

[24]              The Trust says it is beyond the power of the High Court to extend the width of the easements or to set the provisions and protections the Petroleum Act, the middle-line proclamations, the Public Works Act and the Maui Pipeline Agreement.

[25]              The crux of the submission is that the Maui Pipeline Agreement overrides the legislation and it is evidence that the interpretation of the legislation enabling First Gas to have access was wrong. Therefore the appeal is on strong grounds.

[26]              Mr Gibbs says that if the stay is granted, First Gas could still maintain and operate the pipeline, but it would have to negotiate to carry out works and access that fall outside First Gas’ easement rights under the terms of the historic agreement.

[27]              In her oral submissions, Ms Gibbs summarised matters, saying the stay was urgent because:

(a)First Gas was not giving the notice required under the conditions attached to the Decision. This included to provide at least two weeks’ notice to the landowner of any activities that it or its contractors planned to undertake on the land, except in the case of emergencies,14 and to use its best endeavours to avoid disruption to the landowner’s farming activities on the land, including ensuring all gates remain closed at all times, provided that they may be opened and immediately closed for access purposes.15

13 Memorandum on behalf of RV & PJ Gibbs Family Trust, dated 24 March 2022, at [15].

14     The Decision, above n 1, at Attachment 1(c).

15     At Attachment 1(a).

(b)The fencing and structures which First Gas has put on the land are a danger to livestock, as described above.

The position of First Gas

[28]              Ms Wallace for First Gas has filed a notice of opposition and submissions. She said in her oral submissions:

(a)The pipeline buckle or break has been fixed which was the immediate reason for the proceeding and an earlier interim injunction. The land is now near reinstatement, although the bypass pipeline is yet to be removed.

(b)Her understanding was that all notice requirements under the draft conditions had been met. In view of the fact these matters had only been raised today, she had no specific information on that issue and sought time to make enquiries.

[29]              Ms Wallace indicated because of the timeframe she had not yet filed evidence. She also indicated it was unclear as to what a stay in relation to these proceedings would effectively achieve. This is because the remedies granted were as follows:16

A.  The following declarations:

a.That PEC 269143, PEC 269148, Pipeline Authorisation 4410- 16 and the Petroleum Act 1937 authorise the Plaintiff to:

i.enter onto the Defendants’ land over which PEC 269143 and PEC 269148 are registered for the purpose of gaining access to the Maui Pipeline and to perform any action or operation necessary for the purpose of inspecting, maintaining, repairing or operating the Maui Pipeline;

ii.enter onto the Defendants’ land with or without servants, workmen and agents and with all such equipment, machinery and materials as may be necessary for the carrying out of any inspection, maintenance, repair or operational works;

16     At [278]–[279].

iii.deposit and store from time to time upon any land adjoining any such inspection, maintenance, repair or operational works all such machinery and material of any kind as may be used in carrying out any such works; and

b.The Plaintiffs access rights are not conditional upon First Gas providing all project documentation to the Defendants or holding project team meetings inclusive of the Defendants’ participation.

B.   A permanent injunction prohibiting the Defendants, together with their successors[,] administrators, assigns and agents, from:

a.restricting, obstructing or otherwise interfering with the Plaintiffs access rights under PEC 269143, PEC 269148, Pipeline Authorisation 4410-16 and the Petroleum Act 1937; and/or

b.allowing or taking any action that restricts[,] obstructs or interferes with the Plaintiffs rights to enter onto the Defendants’ Land for the purpose of inspecting, maintaining, repairing or operating the Maui Pipeline.

[279]    The above declarations and orders are subject to the conditions attached.

[30]              Therefore, if there was a stay of execution, all that would occur would be that the parties would be forced back into a deadlock about access and the defendants would obstruct access by First Gas unless their demands were met. This was the position at the time the interim injunction was obtained prior to the substantive hearing.

[31]              An interim injunction was issued allowing First Gas access. By the time of the substantive hearing, the Gibbs had issued trespass notices to relevant staff and contractors, preventing First Gas from entering the land to carry out repairs to the break in the pipeline. There was urgency as the pipeline needed to be repaired prior to Auckland Anniversary Day, 29 January 2022, which was identified as the best time for shutdown to join the repaired pipeline and decommission the bypass line. The shutdown of the pipeline disrupted the North Island gas supply which had significant downstream effects for the customers of the gas, including the Huntly power station. Timing was crucial.

Analysis (without notice application)

[32]              Although the repairs have now been completed, First Gas still requires access to finalise the remediation of the land and to carry out ongoing repairs and monitoring. Ms Wallace has indicated that First Gas is meeting the requirements of the conditions attached to the substantive orders. However new allegations about lack of notice arose at the teleconference and she needed to take further instructions on that issue.

[33]              Ms Gibbs said if the Trust was seeking to impose the terms of the historic agreement on First Gas as terms of the stay that was outside the ambit of a stay of execution.

[34]              I decline to grant a stay of execution on a without notice basis. The repair work has been carried out and ongoing maintenance, repair and remediation must be carried out by First Gas as a matter of priority. A stay would not add anything to the conditions already in place. In fact the stay would likely cause a deadlock over access to the pipeline.

[35]              First Gas, through Ms Wallace, has indicated that it would adhere to the conditions attached to the decision granting of the declaration and injunction. These include using its best endeavours to avoid disruption of the landowner’s farming activities, to keep the landowner informed of work to be carried out, to make good any damage or disruption caused to the land, and a number of other conditions, including the health and safety provisions. Those conditions require First Gas to use its best endeavours not to disrupt farm work which would include ensuring the Trust’s animals are not put in dangerous situations.

Conclusion

[36]              With the indication by counsel that First Gas will meet its obligations under the conditions and the priority need to ensure continuing access to the pipeline, I conclude the application does not warrant granting on an urgent basis.

[37]              In addition, First Gas has not had sufficient time to prepare its evidence and submissions on the application for a stay. The parties have agreed on a timetable to enable the matter to be set down for hearing of the on notice application as follows:

(a)The Trust will file and serve any further evidence on or before 19 April 2022.

(b)First Gas will file and serve any evidence, including in response to the allegations made at the teleconference today, on or before 6 May 2022.

(c)A date for hearing of the interlocutory application for stay is to be set for one day.

(d)Submissions are to be filed as follows:

(i)For the Trust, 10 days before the date of hearing.

(ii)For First Gas, five days before the date of hearing.

(iii)Any reply, strictly in reply, by the Trust, three days before the hearing.

[38]The date for hearing is not to be set before 30 March 2022.

[39]In relation to the other applications:

(a)The application for contempt is to be dealt with to proceed separately and dealt with in the usual course. A date is to be set for a first call.

(b)The application to adduce further evidence and any other matters relating to evidence on appeal are matters for the Court of Appeal in due course.

[40]Costs on this application are reserved.

Grice J

Solicitors:

Plaintiff in Person

Govett Quilliam, New Plymouth