Fuge v Wimax New Zealand Limited
[2022] NZHC 1121
•20 May 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-000202
[2022] NZHC 1121
BETWEEN MICHAEL and JULIA FUGE, BRYCE MARLOW TOWN, CHLOE ANNE FUGE
and JULIA ELIZABETH FUGE as trustees of the Aberdeen Four TrustAppellants
AND
WIMAX NEW ZEALAND LIMITED
Respondent
Hearing: 24 March 2022 Appearances:
Adam Ross QC, Phil Ahern and Rayhan Langdana for the Appellants
Kelly Quinn and Carter Pearce for the Respondent
Judgment:
20 May 2022
JUDGMENT OF MOORE J
This judgment was delivered by me on 20 May 2022 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar / Deputy Registrar Date:
FUGE & ORS v WIMAX NEW ZEALAND LIMITED [2022] NZHC 1121 [20 May 2022]
Contents
Paragraph Number
Background.............................................................................................................. [1]
Facts
The parties............................................................................................................. [7]
The easement......................................................................................................... [9]
The arbitration....................................................................................................... [17]
Approach to appeal............................................................................................... [23]
Issues on appeal..................................................................................................... [25]
Did the arbitrator err by misinterpreting the rights set out in the
2017 Easement and implied by the 2002 Regulations and the PLA?.................. [27]
(a) The 2017 Easement and the statutory provisions.................................. [28]
(b) Legal principles on right of way easements.......................................... [32]
(c) Wimax’s interpretation of the rights conferred by
the 2017 Easement................................................................................ [33]
(d) The appellants’ interpretation of the rights conferred by
the 2017 Easement................................................................................ [35]
(e)Did the arbitrator err in his interpretation of the 2017 Easement? [36]
(i)Meaning of the clauses conferring a right of way [37]
(ii)Consistency with case law............................................................. [49]
(ii) Consistency with the express terms of the easement [61]
(iv) Consistency with the 2018 Regulations [64]
(f)Conclusion on Question 1............................................... [68]
Did the arbitrator misapply the “substantial interference with the
easement” test?................................................................................................... [70]
(a) The “substantial inference with the easement” test.............................. [71]
(b) Wimax’s submissions............................................................................ [73]
(c) Appellants’ submissions........................................................................ [74]
(d) Did the arbitrator misapply the “substantial interference with the
easement” test?..................................................................................... [75]
Should the matter be remitted to the arbitrator to consider the question
of remedy?........................................................................................................... [79]
Result...................................................................................................................... [90]
Background
[1] This case is about a neighbours’ dispute. They share a driveway which connects various properties in Glendowie, Auckland. The driveway is about 143 metres long. It provides numerous properties (which would otherwise be landlocked) access to Riddell Road. The residents of these properties share access through a right of way easement (“the ROW Easement”). The ROW Easement is 6.2 metres wide. However, the driveway occupies only part of the ROW Easement. In some places it is less than 3 metres wide.
[2] From 2014 onwards, the respondent, Wimax New Zealand Ltd (“Wimax”), undertook renovations and constructed driveways and retaining walls which protrude into the ROW Easement. It built retaining walls, gates, entrance pillars, drains and a concrete parking area. There is no dispute that these structures encroach into the area of the ROW Easement. They do not, however, obstruct the driveway or impede movement up or down it.
[3] The appellants, who occupy a property at the end of the driveway and are trustees of a trust connected to the Fuge family, asked Wimax to remove the encroaching structures. Wimax refused on the basis that the works did not impede movement and to remove them would cost Wimax approximately $1.28 million.1
[4] The parties took the dispute to arbitration.2 On 11 November 2020, the Hon Paul Heath QC found that structures which encroach within the full width of the right of way would only give rise to an actionable infringement if they were to obstruct a grantee’s ability to use and enjoy the formed driveway. As they did not substantially interfere with the driveway, he found that they did not unlawfully infringe the upon the ROW Easement.
1 My understanding is that Mr Ross QC, for the appellants, advised that this figure represented the estimated cost of removing the structures and subsequently reconstructing others to maintain the current level of amenity. He says that simply removing the structures would cost in the order of
$200,000.
2 Land Transfer Regulations 2002, sch 4 cl 14 implies into every easement a dispute resolution procedure, ending with arbitration.
[5] The appellants sought leave to appeal. On 20 September 2021, Katz J granted leave on the following two questions of law:3
(a)Question 1: Did the arbitrator err by interpreting the rights set out in the easement instrument, and implied by the Land Transfer Regulations 2002 (“the 2002 Regulations”) and the Property Law Act 2007 (“the PLA”) to mean that, in circumstances where there is an existing formed driveway, structures that otherwise encroach within the full width of a right of way will only give rise to an actionable infringement if they were to obstruct a grantee’s ability to use and enjoy that existing formed driveway?
(b)Question 2: Did the arbitrator err by failing to apply the relevant legal test, which is whether the obstructions or impediments Wimax placed or allowed to be placed on the ROW Easement were substantial, and therefore actionable?
[6]The substantive appeal now falls to be determined.
Facts
The parties
[7] The appellants are the trustees of a family trust called the Aberdeen Four Trust (“the Trust”). In 2013, the Trust acquired the property at 515 Riddell Road. Michael and Julia Fuge lived in the property until July 2014. Mr Fuge then obtained employment overseas. The Fuges left New Zealand for a number of years before returning to live at 515 Riddell Road in late 2018.
[8] Wimax owns a property on the same driveway at 519 Riddell Road. For many years it was rented out to tenants. In around September 2016, the shareholders and directors of Wimax, Brett and Averley Dennerly, moved into the property. Since then, they have occupied it as their family home.
3 Fuge v Wimax New Zealand Ltd [2021] NZHC 2470.
The easement
[9] The easement facility has existed for well over five decades. The original easement certificate was issued on 27 May 1964 (“the 1964 Easement”). In 2008, the utility of the 1964 Easement was called into question. The residents of the properties at that time met to discuss resolving the problems with the 1964 Easement. These discussions continued for several years.
[10] During this period, the owner of 515 Riddell Road was the Hon Robert Fisher QC, formerly a Judge of this Court. On 28 September 2011, he circulated a memorandum among affected owners in which he highlighted three issues of concern with the 1964 Easement. In his view, the 1964 Easement omitted:
(a)to express rights to use the accessway for services;
(b)to clearly define mutually acceptable arrangements for the apportionment of maintenance costs; and
(c)to provide for reinstatement in the case of damage caused by an owner undertaking work on their property.
[11] The residents successfully negotiated terms for a new easement, which was registered in 2017 (“the 2017 Easement”). It includes three separate easement facilities, each prescribing different rights.4 The particular easement facility in issue in this case concerns vehicular access. The 2017 Easement provides for a vehicular right of way with a consistent width of 6.2 metres. However, the reality is that at no point does the driveway itself extend across the entire width of the ROW Easement.
[12] The appellants complain about numerous structures along the ROW Easement. As noted, some of these were erected by Wimax. While the Fuges were overseas, Wimax renovated their driveway and adjacent surrounding areas. Other structures were constructed by the owners of 517 Riddell Road, Tony and Lynda Rae. While the latter works were for the benefit of the Raes, construction actually occurred on
4 The easement facilities deal with vehicular access, pedestrian access, and the provision of services (such as optic fibre and telecommunications).
Wimax’s land. In summary, the encroaching structures placed on Wimax’s land include several retaining walls; entrance pillars and gates; retaining wall planters; stone walls; drains; and a driveway connecting to a concrete parking area outside the Dennerlys’ downstairs flat.
[13] At the arbitration, Mr Fuge gave evidence that while he and his wife were living overseas, they made occasional visits home. It was during these visits that they became aware of Wimax’s works. Mr Fuge’s evidence was that it never occurred to him that Wimax (or any of the neighbouring residents) would carry out works which would encroach into the easement. For that reason, the Trust took no steps to check whether the structures were within the ROW Easement area.
[14] The Raes began their works in late 2018 or early 2019. By this time the Fuges had returned to New Zealand and were permanently living at 515 Riddell Road. The Fuges noticed that the Raes’ works involved raising existing parts of the accessway. This concerned them.
[15] They instructed surveyors to identify the boundaries of the ROW Easement. The surveyors produced a report which revealed the extent the structures protruded into the ROW Easement area. Mr Fuge said it was at this point that he first learned that the driveway was considerably narrower than the width of the ROW easement.
[16] The Fuges raised their concerns with Wimax and the Raes. They asked them to remove the structures. They refused. This was followed by exchanges of correspondence and meetings involving the residents and their solicitors. Wimax steadfastly refused to remove the structures. No settlement was reached.
The arbitration
[17] Under the provisions of the 2002 Regulations the dispute was referred to arbitration. The Hon Paul Heath QC was appointed arbitrator.
[18] The Trust sought an order under s 313 of the PLA requiring Wimax to remove the encroaching structures, so as to ensure that the entire easement facility, over which
it had granted rights pursuant to the 2017 Easement, is free from any interference, impediment or restriction to the use of the area as a right of way.
[19] The arbitrator noted that the 2017 Easement was subject to the implied terms in sch 4 to the 2002 Regulations and sch 5 to the PLA. None of the relevant clauses of those schedules had been excluded or varied by the express terms of the 2017 Easement. The arbitrator interpreted the relevant provisions in the following way:
“[37] Clause 6(3)(a) is one of the provisions that refer to a “driveway” rather than a “right of way”. Clause 6(3)(a) confers a right to establish a driveway, repair and maintain an existing driveway and, where necessary for any of those purposes, to alter the state of the land over which the right of way is established. I interpret the chapeau to clause 6(3) to mean that a “driveway” may be created over the whole of the stipulated area, or part of it. By contrast, clause 6(3)(b) requires that the “easement facility” be “kept clear at all times of obstructions … to the use and enjoyment of the driveway”.
[38] Clause 6(3)(a) and (b) must be read together. In my view, the reference to “easement facility” in clause 6(3)(b) is intended to equate to the stipulated area in an easement facility, thereby capturing the whole width of the right of way created by (in this case) the 2017 Easement: namely, the width of 6.2 metres. It follows that the term “driveway” is used to denote an actual (and usually formed) area over which vehicles pass and re-pass, whether that is the same as or less than that comprised in an easement instrument. For present purposes, the “right of way” comprises 6.2 metres but the “driveway” is the smaller area that is actually available for vehicles to use.
[39] Applying the relevant implied terms [in the 2002 Regulations and the PLA], the 2017 Easement affirms:
(a)The existence of a right of way of 6.2 metres;
(b)The right to repair and maintain the existing driveway;
(c)The ability to alter the existing driveway, if necessary for its repair or maintenance;
(d)That the whole width of the right of way is to be kept clear, to ensure that there are no “obstructions… to the use and enjoyment of the driveway” …
[40] Put another way, any structures that encroach within the full width of the right of way will only give rise to an actionable infringement if they were to obstruct a grantee’s ability to use and enjoy the formed driveway. To prove an actionable infringement, a nexus must be established between an obstruction to the right of way and an inability to use the driveway.
…
[43] Read in the context of the clause 6(3) definition of “right of way” in Schedule 4 to the Regulations, clause 1(1) of Schedule 5 to the Act provides
the general right to pass and re-pass over the land on which the right of way has been granted, while clause 2(a) and (c) of Schedule 5 to the Act maintains the need for a nexus between the need to keep the right of way clear of obstructions and an unreasonable impediment to the use and enjoyment of the driveway itself.”
(emphasis original and footnotes omitted)
[20] In light of that interpretation, the arbitrator considered that the structures were not a substantial interference with the ROW Easement because they did not affect the functionality of the driveway. There was no evidence that the width of the driveway had been materially narrowed by the structures, nor that any other form of unreasonable impediment to the use and enjoyment of the driveway existed. The arbitrator distinguished Harvey v Hurley on the basis that that case concerned a structure that had been built on the part of the right of way which was used to pass and re-pass,5 in contrast to the present case.
[21] He then dismissed the Trust’s claims that the structures created a safety risk to users of the driveway. The arbitrator considered that Mr Fuge’s evidence alleging that the driveway was unsafe was unfounded. Instead, he accepted the contrary evidence of Mrs Rae and Stuart Macky (an owner of 509 Riddell Road).
[22] Nor did the arbitrator see any merit in the Trust’s claim that the encroaching structures hindered the development potential and reduced the value of the 515 Riddell Road. He noted that the purpose of the ROW Easement was to provide a right of way. He considered that the possibility an owner might be denied the opportunity to economically benefit from developing their property did not undermine that purpose. In any event, he noted that such a development would require a discretionary consent, in which case the capacity of the driveway would be scrutinised. The arbitrator therefore considered that, without further information on the development potential of the property, it would be premature to grant relief even if the infringements were actionable.
5 Harvey v Hurley (2000) 9 NZCPR 427 (CA).
Approach to appeal
[23] This is an appeal against an arbitral award on two questions of law. The role of the Court is to determine whether it has been established that the arbitrator erred in law within the terms of the questions of law formulated for the appeal.6
[24] On appeal, the parties are bound by the arbitrator’s findings of fact, however flawed they may be.7 The appellate Court’s jurisdiction does not extend to any question of whether the award was supported by evidence, or whether the arbitrator drew the correct inferences from the primary facts.8 Nor is there scope for the Court to supplement the factual findings of the arbitrator with new facts.9
Issues on appeal
[25]The issues on appeal are:
(a)whether the arbitrator erred by misinterpreting the rights set out in the 2017 Easement and implied by the 2002 Regulations and the PLA;
(b)whether the arbitrator misapplied the “substantial interference with the easement” test; and
(c)if the arbitrator misapplied the legal test, whether the question of relief should be remitted back to the arbitrator.
[26]I shall deal with each of these questions in turn.
Did the arbitrator err by misinterpreting the rights set out in the 2017 Easement and implied by the 2002 Regulations and the PLA?
[27] This is the first question of law posed by the appellants. It asks whether the arbitrator erred by interpreting the rights set out in the easement instrument and
6 David Williams and Amokura Kawharu Williams & Kawharu on Arbitration (2nd ed, LexisNexis, Wellington, 2017) at [18.7.6].
7 Pupuke Service Station Ltd v Caltex Oil NZ Ltd, reported as an appendix to Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318 (CA).
8 Arbitration Act 1996, sch 2 cl 5(10).
9 Shell (Petroleum Mining) Company Ltd v Vector Gas Contracts Ltd [2014] NZHC 31 at [40].
implied by the 2002 Regulations and the PLA to mean that, in circumstances where there is an existing formed driveway, structures that otherwise encroach within the full width of a right of way will only give rise to an actionable infringement if they were to obstruct a grantee’s ability to use and enjoy that existing formed driveway.
(a)The 2017 Easement and the statutory provisions
[28] The 2017 Easement is subject to the implied terms in sch 4 to the 2002 Regulations and sch 5 to the LTA. As noted by the arbitrator, none of the relevant clauses of those schedules had been excluded or varied by the express terms of the 2017 Easement.
[29] Clause 6 of sch 4 to the 2002 Regulations provides for the right of way implied in an easement:
“6 Rights of way
(1)A right of way includes the right for the grantee in common with the grantor and other persons to whom the grantor may grant similar rights, at all times, to go over and along the easement facility.
(2)The right to go over and along the easement facility includes the right to go over and along the easement facility with or without any kind of—
(a)vehicle, machinery, or implement; or
(b) domestic animal or (if the servient land is rural land) farm animal.
(3)A right of way includes—
(a)the right to establish a driveway, to repair and maintain an existing driveway, and (if necessary for any of those purposes) to alter the state of the land over which the easement is granted; and
(b)the right to have the easement facility kept clear at all times of obstructions (whether caused by parked vehicles, deposit of materials, or unreasonable impediment) to the use and enjoyment of the driveway.”
[30] The “easement facility”, in relation to a right of way, is defined as the part of the surface of the land that is shown on a plan prepared for the purpose of specifying
the easement and is referred to in a transfer instrument, easement instrument, or deposit document.10
[31] Clauses 1 and 2 of sch 5 to the PLA further provide for covenants implied in easements relating to the general rights to pass and re-pass, and to establish and maintain a driveway:
“1 Right to pass and re-pass
(1)The grantee and the grantor have (in common with one another) the right to go, pass, and re-pass over and along the land over which the right of way is granted.
(2)That right to go, pass, and re-pass is exercisable at all times, by day and by night, and is exercisable with or without vehicles, machinery, and equipment of any kind.
(3)In this clause, the grantee and the grantor include agents, contractors, employees, invitees, licensees, and tenants of the grantee or the grantor.
2 Right to establish and maintain driveway
The owners and occupiers of the land for the benefit of which, and the land over which, the right of way is granted have the following rights against one another:
(a) the right to establish a driveway on the land over which the right of way is granted, and to make necessary repairs to any existing driveway on it, and to carry out any necessary maintenance or upkeep, altering if necessary the state of that land; and
(b) any necessary rights of entry onto that land, with or without machinery, plant, and equipment; and
(c) the right to have that land at all times kept clear of obstructions, whether caused by parked vehicles, deposit of materials, or unreasonable impediment to the use and enjoyment of the driveway; and
(d) the right to a reasonable contribution towards the cost of establishment, maintenance, upkeep, and repair of the driveway to an appropriate standard; and
(e) the right to recover the cost of repairing any damage to the driveway made necessary by any deliberate or negligent act of a person bound by these covenants or that person’s agents, contractors, employees, invitees, licensees, or tenants.”
10 Land Transfer Regulations 2002, sch 4 cl 1 definitions of “easement facility” and “stipulated area”.
(b)Legal principles on right of way easements
[32] The relevant legal principles relating to right of way easements were largely undisputed:
(a)a right of way easement is not a right of ownership.11 The grantee acquires the right to travel over the burdened land to access their own property.12 The grantor retains the right to use the land in a manner not inconsistent with the grantee’s right to pass and re-pass;13
(b)the grantee’s right to pass and re-pass is not unfettered – it is limited to such use and enjoyment as is reasonable.14 There is accordingly no right to go over every square inch of the burdened land,15 nor to pave every inch,16 only so much as is reasonable for the purpose of accessing their own land; and
(c)where a structure pre-dates the grant of an easement, it is a question of interpretation of the instrument of the grant whether the right of way was granted subject to, or free from, the obstruction.17
(c)Wimax’s interpretation of the rights conferred by the 2017 Easement
[33] Mr Quinn, for Wimax, submits that the arbitrator cannot be criticised for his interpretation of the rights conferred by the 2017 Easement. He submits that cl 6(3)(b) is clearly worded. It prohibits only obstructions to the use of the driveway. Similarly, cl (2)(c) refers to “unreasonable impediment to the use and enjoyment of the driveway”. This, he submits, is consistent with the common law position that it is not
11 Clifford v Hoare (1874) LR 9 CP 362 at 371.
12 McKellar v Guthrie [1920] NZLR 729 (SC) at 731.
13 Pettey v Parsons [1914] 2 Ch 653 (CA) at 667.
14 Breslin v Lyons [2013] NZCA 161 at [29].
15 F C Strick and Co Ltd v City Offices Co Ltd (1906) 22 TLR 667 (Ch) at 669; Pettey v Parsons [1914] 2 Ch 653 (CA) at 663 and 665; Emmons Developments (NZ) Ltd v RFD Investments Ltd HC Christchurch, CP42/01, 4 July 2001 at [43]; and Keam v Theilman-Le Cornec Trust (2005) 7 NZCPR 26 (HC) at [102].
16 Butler v Muddle (1995) 6 BPR 13,984, (1996) ANZ ConvR 147 (NSWSC) at 13,986.
17 Spear v Rowlett [1924] NZLR 801 (SC) at 804.
any structure or object on a right of way that will be actionable, but only those that substantially interfere with the use and enjoyment of the right of way.
[34] Mr Quinn further submits that while other clauses refer to the “the land over which the right of way is granted” more generally, that is not a right to go over every square inch of the land. He submits that the prohibition is against obstructions “to the use and enjoyment” of the easement facility, not merely any structures placed on the easement area.
(d)The appellants’ interpretation of the rights conferred by the 2017 Easement
[35] Mr Ross QC, for the appellants, submits that the arbitrator’s interpretation was in error. He submits that such an interpretation was unduly narrow. He seeks to emphasise the references in cl 1(1) to “the land over which the right of way is granted”, and in cl 6(1) and (2) to the “right to go over and along the easement facility”. Mr Ross submits that the cl 6(3) rights relating to the driveway are included in the more general rights conferred by the preceding subclauses. He submits that this interpretation is consistent with cl 10, the express terms of the 2017 Easement and the Land Transfer Regulations 2018 (“the 2018 Regulations”).
(e)Did the arbitrator err in his interpretation of the 2017 Easement?
[36] In my view the arbitrator erred in his interpretation of the rights conferred by 2017 Easement. Specifically, through the proposition that “any structures that encroach within the full width of the right of way will only give rise to an actionable infringement if they were to obstruct a grantee’s ability to use and enjoy the formed driveway”. My reasons follow.
(i)Meaning of the clauses conferring a right of way
[37] First, the arbitrator’s interpretation rests on an unduly narrow construction of the clauses of sch 4 to the 2002 Regulations and sch 5 to the PLA.
[38] Clause 6(1) of sch 4 provides that a “right of way includes the right for the grantee … at all times, to go over and along the easement facility”. Clause 6(2) clarifies that the right may be exercised “with or without any kind of … vehicle”.
Clause 6(3) then provides that the right includes the “right to establish a driveway” and to have “the easement facility kept clear at all times of obstructions (whether caused by parked vehicles, deposit of materials, or unreasonable impediment) to the use and enjoyment of the driveway.”
[39] In my view, the broadest right conferred by cl 6 is the sub-cl (1) right to go over and along the easement facility. The easement facility is, in general terms, the entire area of the right of way as described in the easement instrument. While the common law has clarified that there is no right to go over “every square inch” of the land, the purpose of that rule is to prevent the grantee insisting upon unreasonable use of that land. The grantor and grantee agree to the easement facility covering a particular area. They together can set the boundaries of the easement as widely or narrowly as they please. The grant then necessarily confers the right to pass and re- pass over that agreed area. While sub-cl (1) does not expressly say so, that area must be kept clear of obstructions which substantially interfere with the use of the easement. It is not possible to exercise the right to go over and along the easement facility, in its entirety, if the easement facility is materially obstructed.
[40] Sub-clause (2) clarifies how the right of way might be exercised. It lists particular examples of things that the grantee might wish to bring across the easement facility. One of those examples is “any kind of … vehicle”.
[41] Sub-clause (3)(a) expands the right of way to include the rights to establish, repair and maintain a driveway. In doing so the grantee may alter the state of the land over which the easement is granted. Sub-clause (3)(b) then confers the right to have the easement facility kept clear of obstructions to the driveway. The error in the arbitrator’s approach was construing sub-clause (3)(b) as if it prescribed the only prohibition against impediments to the use of the easement facility. In my view the “driveway” and the “easement facility” are separate concepts which should not be conflated. Sub-clause (3)(b) clarifies that the driveway is a particular element of the easement facility with which the grantee might wish to avoid interference. The grantor is nevertheless required to keep the remainder of the easement facility free from substantial interference. A failure to do so would be at odds with both:
(a)the broader right conferred by sub-cl (1) to go over and along the entire easement facility; and
(b)the right to alter the land within the easement facility for the purpose of establishing, repairing or maintaining the driveway.
[42] A grantee can hardly exercise these rights when the right of way is obstructed. Sub-clause (3)(b) therefore does not narrow the application of sub-cl (1) in the way suggested by the arbitrator – it is a specific example of the general right.
[43] Clauses 1 and 2 of sch 5 are similarly drafted. Clause 1(1) sets out the general right to “go, pass and re-pass over and along the land over which the right of way is granted”. That right is expressed in sufficiently wide terms to encapsulate the entirety of the land over which the right of way is granted.
[44] Clause 2 then sets out the specific rights relating to the driveway. Sub-cl (a) provides for similar rights to establish, repair or maintain a driveway. Sub-cl (c) provides for the right to have the land clear of obstructions, whether caused by parked vehicles, deposit of materials or unreasonable impediment to the use and enjoyment of the driveway.
[45] Similarly to cl 6(3), the rights conferred by cl 2 are a subset of the general right of way conferred by the preceding clauses. Clause 2(c) cannot be read as confining the right of way in cl 1(1), particularly because it would only do so if the grantee actually decided to construct the driveway. If the grantee did not do so, the specific rights relating to the driveway would not apply and the grantee would enjoy a right of way over the entire easement area. Nor can cl 2(c) affect the right to alter the state of the land for the purpose of establishing, repairing or maintaining the driveway in cl 2(a). Placing structures on the easement facility, but not on the driveway, would impede the grantee’s ability to expand the driveway within the area of the easement.
[46]This approach is consistent with cl 10 of sch 4, which provides:
(a)for the right to use any easement facility already situated on the stipulated area or course for the purpose of the easement granted;18
(b)for the right to lay, install, and construct an easement facility reasonably required by the grantee if no suitable easement facility exists;19 and
(c)that the grantor must not do and must not allow to be done on the servient land anything that may interfere with or restrict the rights of any other party or interfere with the efficient operation of the easement facility.20
[47] A significant encroachment on the ROW Easement restricts the right to widen or develop the driveway in the event that it is required. This is inconsistent with the general rights in cl 10.
[48] It thus follows that I am satisfied the arbitrator’s interpretation of these clauses was unduly restrictive.
(ii)Consistency with case law
[49]The broader interpretation is consistent with case law.
[50] In interpreting the rights conferred by the easement, the arbitrator distinguished Harvey.21 Mr Ross submits that this was an error. He relies on the general principle stated in that case by Cartwright J, and endorsed by the Court of Appeal, that:22
“The right is “uninterrupted and unrestricted … to go pass and repass … through over and along [the right of way].” The right is not restricted to a narrow passage of access and egress. It is conferred over all of the land and would therefore include a right to walk over any portion of the land and to turn a vehicle on it.”
18 Clause 10(1)(a).
19 Clause 10(1)(b).
20 Clause 10(2).
21 Harvey v Hurley, above n 5.
22 At [19].
[51] The arbitrator distinguished Harvey on the basis that the case “did not deal with a situation in which a structure had been built on that part of the right of way that was used to pass and re-pass”, in contrast to the present case.
[52] I agree with Mr Ross that this interpretation was in error. The grantee in Harvey was concerned with the development potential of their land and wished to protect a portion of the right of way which was not yet being used as a driveway and remained unsealed.23 The Court of Appeal rejected the appellants’ submission that the grant did not include this area and nor was it required for a reasonable user.24 The Court concluded that:25
“… the respondents are entitled to exercise the rights conferred by the grant. This means they are not only able to move to and from their property but also that, subject to any topographical or physical limitations, they may turn a vehicle on the land subject to the right of way.”
[53] Harvey is analogous to the present case. In both, the grantee does not specifically require the particular area of the ROW Easement to access its property. But the area could be used for that purpose and that increases the development potential of the land. The principle, as stated by the Court of Appeal, that the grantee is “entitled to exercise the rights conferred by the grant” which are “not restricted to a narrow passage of access and egress”, is applicable to the present case.
[54] Mr Ross then relies on Guo v Bourke.26 There, Mrs Guo was the grantor of an easement in favour of the Bourkes.27 There was a shared driveway within the area of the easement, but the total easement area was larger than that occupied by the driveway.28 The parties agreed that about 50 per cent of the width of the easement area was obstructed by planting and other impediments.29 Those impediments did not, however, obstruct the driveway.30
23 At [10] the Court of Appeal reproduced Cartwright J’s summary of the facts, which included that a “portion of the right-of-way, however, has not been used in that manner and remains unsealed. But the [respondents], although having no present intention to do so, may wish to redevelop their property in the future to a higher density level and would then wish to use the right-of-way fully.”
24 At [14]–[21].
25 At [20].
26 Guo v Bourke [2017] NZCA 609.27 At [1] and [5].
28 At [6].
29 At [21].
30 At [21].
[55] The Court of Appeal recognised that the impediments did not “cause [the Bourkes] any difficulty”.31 Given the extent to which they encroached into the easement area, however, the Court of Appeal upheld Duffy J’s order that Mrs Guo was required to remove the obstructions.32
[56] Guo thus supports the proposition that structures which substantially encroach onto the area of an easement, but do not interfere with a formed driveway, are notwithstanding contrary to the grant. To that end, the case is consistent with both Harvey and my interpretation of the clauses conferring the right of way.
[57] Mr Quinn submits that Breslin v Lyons is on point and supports the proposition that structures (or objects) will only be actionable if they inhibit passage.33 In that case Mr Breslin applied for a declaration that he and his visitors were entitled to park vehicles permanently on his strip of the shared rights of way provided that such parking did not substantially obstruct the Lyons’ right of access over that land.34 On appeal, the Court of Appeal commented that:
[24] … Mr Breslin can only use his servient land in a way that does not derogate from the Lyons’ right to pass and repass over his property. Parking a vehicle permanently there will create an obstruction to that right if, as a matter of fact, it will hinder the Lyons’ use of the area for access to their property. That would constitute a substantial and thus unlawful interference with the rights of freedom and ease of passage conferred by the grant, amounting in law to a derogation from it.
[58] The Court considered that if a car was to be commodiously wide, or to have its wing mirrors extended, or not be parked hard up against the fence, there would undoubtedly be an obstruction.35
[59] Breslin is an example of a case where the particular obstruction could be so substantial as to render the right of way completely unusable. That is quite different to the factual scenarios in Harvey and Guo. A lesser infringement on the right of way may still be contrary to the grant and therefore actionable.
31 At [62].
32 At [62].
33 Breslin v Lyons [2013] NZCA 161.
34 At [10].
35 At [31].
[60] It follows that the case law supports the conclusion that the arbitrator erred in interpreting the rights set out by the ROW Easement. That body of law is clear that a structure which is within the area of a ROW Easement, but does not interfere with a formed driveway, can constitute an actionable infringement.
(ii) Consistency with the express terms of the easement
[61] The broader interpretation of the rights conferred by the ROW Easement is consistent with the express terms of the 2017 Easement. Clause 3 of the 2017 Easement provides that:
“3.In addition to the obligations implied by Schedule 4 and Schedule 5, the Residents shall keep and maintain the Right of Way in good order and shall prevent it from becoming a danger or nuisance and at all times shall keep it in a reasonable condition. The Residents shall promptly repair any potholes or large cracks in the Driveway. Where part of the Driveway is being resealed for any reason, the resealing must extend at least 3 metres either side of the affected area of the Driveway.”
[62] Clause 3 again distinguishes between the “Right of Way” and the “Driveway”. The “Driveway” is defined by cl 2(k)(vii) as “the formed driveway over the Easement Areas A to C”. Easement Areas A through C are defined by reference to areas on the plan. The Driveway is clearly a part, but not necessarily the whole of the Easement Areas. If the Driveway always constituted the whole of the Easement Areas there would be no need for separate definitions. Specific obligations attach to the Driveway. Of particular significance is if the Driveway requires resealing. Notably, the resealing must extend at least three metres either side of the affected area of the Driveway. This could well require the Driveway to extend beyond its existing width further into the area of the ROW Easement.
[63] The express terms of the 2017 Easement therefore support the broader interpretation that structures placed within the area of the ROW Easement, but not interfering with the driveway, may nonetheless give rise to an actionable infringement.
(iv) Consistency with the 2018 Regulations
[64] Next, I turn to consider the 2018 Regulations, which succeeded the 2002 Regulations. The 2018 Regulations obviously do not dictate the proper interpretation
of the 2002 Regulations. But the background context to, and content of, the 2018 Regulations may assist in interpreting the 2002 Regulations.
[65] Clause 6 of the 2018 Regulations does not distinguish between the driveway and the easement facility. Instead, cl 6(3) provides that:
“(3) A right of way includes the right to have the easement facility kept clear at all times of obstructions (whether caused by parked vehicles, deposit of materials, or unreasonable impediment) to the use and enjoyment of the easement facility.”
[66] The “easement facility” is defined as “the surface of the land described as the easement area, including any driveway”.36
[67] Neither counsel nor I have found an explanation for this change in wording. It is possible that this iteration of cl 6(3) refers to the “easement facility”, with that term “including any driveway”, because the 2002 iteration of cl 6(3) provided for rights only over the driveway. A more likely explanation is that the use of “easement facility” in the 2018 iteration of cl 6(3) is an attempt to clarify the uncertainty in the predecessor provision. The drafting of the 2018 Regulations more clearly expresses what in my view was always the position – that the driveway is an aspect of the easement facility, and that rights attach to the entirety of that easement facility.
(f)Conclusion on Question 1
[68] For these reasons, it is my view that the arbitrator incorrectly limited the right conferred by the 2017 Easement to a right to pass and re-pass over the formed driveway only. The correct interpretation is that the right conferred by the 2017 Easement is to pass and re-pass over the entirety of the easement facility, including the driveway.
[69]Question 1 is thus answered in the affirmative.
36 Clause 1 definition of “easement facility”.
Did the arbitrator misapply the “substantial interference with the easement” test?
[70] I turn to the consider the second question. This is whether the arbitrator erred by failing to apply the relevant legal test, which is whether the obstructions or impediments Wimax placed or allowed to be placed on the ROW Easement were substantial, and therefore actionable.
(a)The “substantial inference with the easement” test
[71] In McKeller v Guthrie, Sim J set out the “substantial interference with the easement” test:37
Any wrongful interference with a right of way constitutes a nuisance … but it is not every obstruction of the way which amounts to an unlawful interference. There must be a substantial interference with the easement … and before the grantee can complain of an obstruction it must be clear that the obstruction is operating to the injury of the grantee …
[72] Whether an obstruction constitutes a “substantial interference” is a question of degree that turns upon the facts of the particular case.38
(b)Wimax’s submissions
[73] Mr Quinn submits that the arbitrator correctly stated and applied the legal test. He submits that the structures do not substantially interfere with the reasonable use of the right of way. He submits that the use of the right of way is facilitated by the use of the driveway. The test, he submits, is not whether the thing itself is substantial, but whether the interference with the use of the right of way (in these circumstances via the driveway) can properly be characterised as substantial.
(c)Appellants’ submissions
[74] Mr Ross submits that the arbitrator erroneously approached this issue from the perspective of whether a structure on an easement breaches the rights of a grantee to use an existing driveway. He submits that the proper approach is to consider whether there are obstructions on the easement, and then to consider whether those obstructions
37 McKellar v Guthrie [1920] NZLR 729 (SC) at 731. See also Emmons Developments (NZ) Ltd v RFD Investments Ltd HC Christchurch, CP42/01, 4 July 2001 at [43].
38 Spear v Rowlett [1924] NZLR 801 (SC) at 802.
or impediments are substantial. Taking that approach, he submits that the conclusion was inevitable that Wimax’s structures were placed on the easement area and constituted a substantial interference with that easement.
(d) Did the arbitrator misapply the “substantial interference with the easement” test?
[75] The arbitrator found that to prove an actionable infringement “a nexus must be established between an obstruction to the right of way and an inability to use the driveway”.
[76] With respect, this was in error. There is no requirement to establish a nexus between the obstruction and the formed driveway. The rights conferred by the 2017 Easement relate to the entirety of the easement facility. The driveway is a particular aspect of the right of way to which further, more specific, rights attach. It is not the only element of the right of way. That conclusion is consistent with the express terms of the 2017 Easement and those implied by the 2002 Regulations and the PLA, the case law, and the 2018 Regulations.
[77] The “substantial interference with the easement test” must therefore be assessed by reference to the entire area of the ROW Easement. It is undisputed that there are several permanent structures which encroach into the area of the ROW Easement. When viewed from this perspective, the conclusion that those structures substantially interfere with the easement is inescapable.
[78]Question 2 is answered in the affirmative.
Should the matter be remitted to the arbitrator to consider the question of remedy?
[79] Answering both questions in the affirmative leads to the conclusion that the arbitrator erred in law. The finding that the structures are a substantial interference with the easement necessarily leads to the question of remedy.
[80] On the determination of an appeal against an arbitral award on a question of law, the High Court may, by order:39
(a)confirm, vary, or set aside the award; or
(b)remit the award, together with the High Court’s opinion on the question of law which was the subject of the appeal to the arbitrator for reconsideration.
[81] The Trust seeks an order that Wimax remove the infringing structures. Wimax, on the other hand, submits that the appropriate course is to remit the matter back to the arbitrator to determine remedy.
[82] Mr Ross’ principal submission in support of remedy being dealt with by this Court was to avoid the costs associated with remitting the matter. He submits that the nature of the dispute is neighbourly and that it is unsatisfactory for the costs associated with the matter to escalate by remitting the matter back to the arbitrator to decide. He further submits that the remedy is obvious to the extent that the wrongfully placed structures must be removed.
[83] I am acutely aware of the fact that this is a dispute between neighbours and that contributing to the escalating costs by remitting the matter back operates in favour of this Court determining remedy. I also accept that finality is a relevant consideration in play here. However, I cannot accept Mr Ross’ submission that the remedy is obvious in the present case. Put bluntly it is not, for the reasons which follow.
[84] Where there is a substantial interference with an easement, remedies lie at the discretion of the authority determining the dispute.40 That discretion is broad. The
39 Arbitration Act 1996, sch 2 cl 5(4).
40 Property Law Act 2007, s 313.
authority may make an order, on any conditions that it thinks fit, relating to (among other things):41
(a)the question whether any work is work required to be done under the terms of an easement and, if so, the nature and extent of any required work at the time in question;
(b)the reasonable and proper cost of any required work, including interest on outlay, expenses of survey, and reasonable remuneration for the superintendence or work of a person entitled or person bound who is or has been personally engaged on that work;
(c)the person or persons by whom the cost of any required work is to be borne and, if the cost is to be shared among two or more persons, the shares to be borne by each of them; and
(d)the time at or before which, and the manner in which, any required work is to be undertaken.
[85] The ROW Easement has existed since 1964. For almost 60 years the neighbours living along the easement have harmoniously and co-operatively shared the driveway. Over that entire period, the area of the property where the structures were built does not seem to have ever been used for the purpose of passing and re- passing. Certainly, they do not appear to have caused any material obstruction to those passing up and down the driveway. The portion of the area which is now a concrete parking area was historically covered in vegetation. The area includes the private driveway connecting 519 Riddell Road to the shared accessway. It is inclined at a reasonably steep gradient that would, on the face of it, be unsuitable for vehicles passing and re-passing. To excavate and level that portion of the land to avoid encroachment into the easement would be no simple or inexpensive task. Taking into account these circumstances and the broad discretion of the arbitrator as to remedy, it is by no means plain that the appropriate remedy is simply to order that the structures be removed.
41 Section 313(1)(c)–(f).
[86] Having found that the appellants’ claim failed, the arbitrator did not consider the question of remedy. He has not yet had the opportunity to exercise his discretion. In my view the arbitrator is in a uniquely advantageous position to do so. Over the four-day hearing he received a substantial volume of material. He undertook a site visit. He heard and saw witnesses who were tested in cross-examination. I do not have the advantages he has in this regard.
[87] Additionally, further evidence relevant to remedy is likely to be necessary. The ambit of any additional evidence is potentially wide, including enquiries such as what future development plans might any of the parties have? How realistic are these? What are the likely physical, compliance and resourcing impediments to any such development? What are the indicative costs? How and to what extent do the present intrusions into the easement affect any such proposals? These and other issues go directly to the question of remedy.
[88] Furthermore, I am not inclined to accept Mr Ross’ submission that the infringing structures can simply be removed, with responsibility then being put on the parties to agree upon an appropriate course of action to deal with the site. Given the regrettable history of animosity between neighbours I have no confidence that any form of agreement is capable of being reached. The parties have evidently attempted and failed to settle the dispute. The arbitrator may need to impose further conditions to ensure that any process required to implement remedial orders operates effectively. It may be that the removal of the structures is not the appropriate approach at all. Assessing that issue and the complexities which surround it is much more appropriately determined by a highly experienced and able arbitrator who is well familiar with the site, the parties, the evidence and the core issues engaged.
[89] For those reasons, I am easily satisfied that the proper course is to remit the question of remedy to the arbitrator and I so order.
Result
[90]The appeal is allowed.
[91]Questions 1 and 2 are answered in the affirmative.
[92] The matter is remitted to the arbitrator to consider and determine the question of remedy.
Moore J
Solicitors:
Mr Ross QC, Auckland Mr Ahern, Auckland Mr Langdana, Auckland Mr Quinn, Auckland Mr Pearce, Auckland
2
5
0