First Gas Ltd v Gibbs - [2021] NZHC 1722

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2021-443-16

[2021] NZHC 1722

BETWEEN
FIRST GAS LIMITED

Plaintiff

AND

RUSSELL VICTOR GIBBS, PARANI JOSEPHINE GIBBS AND LEIGH JOSEPH HORTON

Defendants

Hearing: 2 July 2021 (via AVL)

Appearances:

L P Wallace for Plaintiff M Gibbs and R Gibbs

Judgment:

9 July 2021

JUDGMENT OF ISAC J

[On application for interim injunction]

The issue

[1] First Gas owns and operates the Maui pipeline, which carries pressurised natural gas from Taranaki to users throughout the North Island. It has statutory easements under the Petroleum Act 1937 over the defendants’ land, through which the pipeline passes.

[2] First Gas says it requires urgent access to the pipeline to undertake a repair. It says the defendants have denied it access and have sought to impose conditions on access which are inconsistent with First Gas’ easement rights.

[3] First Gas has brought proceedings against the defendants in nuisance. A trial date has not been set. Given further delay might create a risk to gas supply in the North

FIRST GAS LIMITED v GIBBS, GIBBS AND HORTON [2021] NZHC 1722 [9 July 2021]

Island, First Gas has applied for an interim injunction prohibiting the defendants from obstructing or otherwise interfering with First Gas’ easement interests.

[4] Underlying the dispute is a disagreement about the extent of, and legal basis for, the defendants’ involvement in the planning and execution of works on their land concerning the Maui pipeline.

[5] Following the hearing on 2 July 2021, I received unsolicited supplementary submissions and additional materials from the defendants on 5 July 2021. Much of what they contain are an amplification of points made in written and oral submissions at the hearing of 2 July.1 As those additional materials do not alter the outcome, I record that I did not call on First Gas to respond to them.

[6]I have concluded an interim injunction should issue. My reasons follow.

Background

[7] The Maui pipeline was completed in 1979 and supplies over 90 per cent of the natural gas used in the upper North Island. In 2015, the pipeline carried 143 petajoules of gas from seven production stations connected to it. More than half of that gas goes to large industrial users, including the Huntly Power Station and two methanol plants operated by Methanex.

[8] The pipeline is operated pursuant to an authorisation issued on 31 July 1975 under the Petroleum Act 1937. First Gas is the current holder of the pipeline authorisation, and the current owner and operator of the pipeline.

[9] There is a stringent regulatory framework governing maintenance and operation of the Maui pipeline. Certification under an applicable industry standard is required, a process which involves inspection by an independent certifier and the issue of a pipeline certificate of fitness.

1 In an appendix to this judgment I have set out a procedural history of the matter in response to suggestions by the defendants that they have been prejudiced…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading First Gas Ltd v Gibbs

Details

AGLC: First Gas Ltd v Gibbs [2021] NZHC 1722
Case: [2021] NZHC 1722
Decision Date: 9 July 2021

CaseChat Overview and Summary

First Gas Limited applied for an interim injunction to prevent the defendants from interfering with its access to their land to enable it to repair a buckled section of the Maui pipeline, which carries pressurised natural gas from Taranaki to users throughout the North Island. The application was heard by Isac J. The defendants argued that First Gas’ access to their land to carry out repairs on the pipeline was conditional on its engagement in a collaborative process which they said was established as a legal requirement by the Court’s decision in Vector Gas. They also argued that the pipeline authorisation and easement certificates do not permit preliminary geotechnical investigations. Isac J held that there was a serious question to be tried on the matters raised by the defendants and that the balance of convenience clearly favoured the grant of an interim injunction. In particular, the Court found that the potential impact of a failure to repair or replace the buckled section of pipe clearly outweighed the risk, if any, of harm to the defendants and their property pending trial. The Court also found that the Gibbs Family Trust might not consider the undertaking as to damages was adequate to address its concerns, but the Court considered it provided significant comfort and protection in relation to the defendants’ position, should First Gas’ claims not succeed at trial. The Court granted an interim injunction, prohibiting the defendants from restricting, obstructing or otherwise interfering with First Gas’ rights under the pipeline authorisation or easement certificates, including rights to enter the defendants’ land for the purpose of performing any action or operation necessary for the purpose of inspecting, maintaining or operating the Maui pipeline. All such activities were to be carried out in accordance with the authorisation and easement certificates, and the applicable provisions of the Petroleum Act 1937. Physical works were to be confined to the easement corridor, including the temporary deposition of spoil and storage of equipment and machinery, until further order.

Final orders were:
(1) An interim injunction, until further order of the Court, prohibiting the defendants or any other party from restricting, obstructing or otherwise interfering with First Gas’ rights under the pipeline authorisation or easement certificates, including rights to enter the defendants’ land for the purpose of performing any action or operation necessary for the purpose of inspecting, maintaining or operating the Maui pipeline.
(2) All such activities are to be carried out in accordance with the authorisation and easement certificates, and the applicable provisions of the Petroleum Act 1937. And physical works are to be confined to the easement corridor, including the temporary deposition of spoil and storage of equipment and machinery, until further order.
(3) The draft conditions attached to the plaintiff’s submissions dated 1 July should apply.
(4) Leave is reserved to the parties to apply for further directions if required.
(5) Costs would normally follow the event. Should First Gas seek costs I direct a memorandum, no longer than three pages in length, to be filed within fifteen working days. Any memorandum from the defendants in reply shall also be limited to three pages and is to be filed fifteen working days thereafter.

Orders