Grace v Orion New Zealand Limited
[2021] NZHC 705
•31 March 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2017-409-000454
[2021] NZHC 705
BETWEEN CECILE GRACE
First Plaintiff
(See Schedule A for Complete List of Plaintiffs)
AND
ORION NEW ZEALAND LIMITED
First DefendantLEISURE INVESTMENTS NZ LIMITED PARTNERSHIP
Second Defendant
Hearing:
Hearing Telephone Conferences:
3-7, 10-12, 18-21, 31 August 2020,
1-2, 9-11, 21-24, 28-29 September 2020 and
9, 12-13 October 202014 and 17 August 2020 and 7 and 25 September 2020
Appearances:
C M Stevens, B R D Cuff, S K Battersby and C S M Henley for Plaintiffs
T C Weston QC, M Dennett, R J H Scott and S M Crosbie for First Defendant
G N Gallaway, W J Hamilton and L A Merrick for Second Defendant
Judgment:
31 March 2021
Reissued:
12 April 2021
JUDGMENT OF GENDALL J
GRACE v ORION NEW ZEALAND LIMITED [2021] NZHC 705 [31 March 2021]
This judgment was delivered by me on 31 March 2021 at 3 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
Table of Contents
Para No
Introduction [1] Background [13] Christchurch Adventure Park [13] Summit Road Fire and the Chairlift Fire [19] Timeline [23] Monday 13 February 2017 [24] Tuesday 14 February 2017 [37] Wednesday 15 February 2017 [59] Adventure Park’s Fire Safety Management Plan (FSM Plan) [82] Doppelmayr manual [87] Damage caused by the fires [89] Plaintiff’s pleadings [96] Section 43 of the Forest and Rural Fires Act 1997 (FRF Act) [100] Liability under s 43 [100] Causation under s 43 [115] Was this an extraordinary event? [121] Was this an “outbreak” of fire or simply a “spread” of fire? [131] Conclusion on s 43 FRF Act [147] Negligence [149] Duty of care and the scope of that duty? [154] Breach of the duty of care? [170] - Flammability of Chairs? [171] - Requirements for a competent chairlift operator [175] Causation of loss by the breach and remoteness? [182] Conclusion on negligence [189] Nuisance [190] Adventure Park created or participated in the creation of a nuisance? [198] Adventure Park’s land was used in a way that was unreasonable? [202] Damage suffered was foreseeable? [209]
Conclusion on nuisance [212] Damages [213] Broadly “Non-contested” sums [219] “Contested” sums [221] Legal Framework [223] Reinstatement [234] Process for quantifying loss [245] Flanagans’ quantum claim – 165 Early Valley Road [255] - Insured loss claim [260] - Uninsured loss claim [278] Cecile Grace’s quantum claim – 349 Worsleys Road [280] - Insured loss claim [281] - Uninsured loss claim [292] Kwons’ quantum claim – 339 Worsleys Road [305] - Insured loss claim [309] - Uninsured loss claim [313] Pflaums’ quantum claim – 343 Worsleys Road [332] Repair cost claims [370] Betterment [385] Interest [410] Judgment [419] Costs [421]
Introduction
[1] Two major fires occurred in the Port Hills area of Christchurch in February 2017. The plaintiffs were owners and in most cases residents of property, or business owners, in the area at the time. They and their properties were significantly affected by the fires. In this proceeding, the plaintiffs sue the two defendants for the consequences of the fires.
[2] The first defendant Orion New Zealand Limited (Orion) operates an electricity network infrastructure business and had electricity conductors and equipment in the general area where the first of the fires was said to begin. This was alongside a roadway in the lower Port Hills area known as Early Valley Road. The outbreak of
this first fire (the EVR Fire) is said to have begun around 5:40 p.m. on 13 February 2017. Orion was sued by a number of the plaintiffs for loss resulting from the EVR Fire.
[3] About an hour and a half later, a second fire commenced about 4 km away. This was higher up on the Port Hills in an area known as Marleys Hill off Summit Road (the Summit Road Fire). Over the next day and a half the Summit Road Fire steadily progressed into adjoining properties including one owned and operated by the second defendant, Leisure Investments NZ Limited Partnership (the Adventure Park). The Adventure Park was and remains the operator of a mountain bike, zipline, hiking and sightseeing park situated on this adjoining Port Hills property (which property I will call hereafter the Park). From early afternoon on 15 February 2017 the Summit Road Fire which had advanced into the Park ignited plastic seating on the chairlift chairs which Adventure Park staff were continuing to run. The ignited chairs, it is alleged, dripped molten plastic onto dry pine slash under and around the lift-line causing spot fires which developed immediately into a large fire outbreak (the Chairlift Fire) which outbreak advanced out of the Park causing significant damage to adjacent properties. The Adventure Park has been sued by those other affected plaintiffs for damage and loss said to be caused to their properties by the Chairlift Fire.
[4] In total there are 80 plaintiffs in this proceeding. They are listed in Schedules 1, 2 and 3 to this judgment. They are divided in Schedule 1 into those plaintiffs who were suing Orion with respect to the EVR Fire, in Schedule 2 into those other plaintiffs who were suing the Adventure Park with respect to the Chairlift Fire and, lastly, in Schedule 3 naming the 47th plaintiffs Warren Flanagan and Vilma Flanagan as the only plaintiffs who sue both Orion and the Adventure Park in respect of both the EVR Fire on the one hand, and the Chairlift Fire on the other hand, as a merged fire, (the Merged Fire).
[5] For present purposes this judgment will refer to those plaintiffs in Schedule 1 who made claims with respect to the EVR Fire as the EVR Fire Plaintiffs, it will refer to those plaintiffs in Schedule 2 who made claims with respect to the Chairlift Fire as the Remaining Plaintiffs and Mr and Mrs Flanagan as the sole plaintiffs who made a claim with respect to the Merged Fire as the Flanagans.
[6]Hearing of all the plaintiffs’ claims began in this Court on 3 August 2020.
[7] Midway through that hearing the EVR Fire plaintiffs advised that their claims against Orion had been settled. A Notice of Discontinuance of these claims was filed. All parties consented to this discontinuance.
[8] At that time, related cross-claims between Orion and the Adventure Park were also settled. A similar Notice of Discontinuance of these cross-claims was filed.
[9] The Remaining Plaintiffs’ claims and the Flanagans’ Merged Fire claims all against the Adventure Park (together the remaining claims) continued, however. The hearing of these claims concluded on 13 October 2020.
[10]This judgment, therefore, relates only to the remaining claims.
[11] The Remaining Plaintiffs and the Flanagans claim that the fire which spread from the Adventure Park’s property caused over $11 million of damage to their properties for which the Adventure Park is liable. Those claims are brought, first, under s 43 of the Forest and Rural Fires Act 1977 (the FRF Act), secondly, in negligence and, thirdly, in nuisance.
[12] It is acknowledged by the Remaining Plaintiffs and the Flanagans that the Adventure Park did not cause the Summit Road Fire. This fire started just outside the Park boundary, it seems to be agreed, by an arsonist at just after 7 p.m. on 13 February 2017. But the contention here is the Adventure Park did cause the spread or outbreak of a growing fire from its property by creating the Chairlift Fire which then joined with the EVR to create the additional Merged Fire.
Background
The Christchurch Adventure Park
[13] The Adventure Park effectively owns and operates the Park. It is a 365 ha mountain bike, zipline, hiking, sightseeing and Adventure Park development. It opened only in December 2016, some two months before the fires. The
Adventure Park says at present it is the only development of its kind in New Zealand. It cost in the region of $25 million to develop. The infrastructure at the Park includes a cafe/bar/function centre, several ancillary buildings, a four-seater detachable chairlift with top and bottom chairlift stations, mountain bike and walking trails, and four ziplines.
[14] The chairlift is an important asset at the Park. It is a medium-sized lift by international standards, manufactured by the Austrian lift company, Doppelmayr. The chairlift is just under 1.8 km long. It is used to ferry mountain bikers, zipliners and sightseers from the bottom of the Park to the top. The haul rope of the chairlift is
3.586 km long in total and weighs just under 24 tonnes.
[15] Attached to the haul rope are 84 “carriers”. These represent 42 four-seater chairs and 42 specially designed quad mountain bike carriers.
[16] The average dead weight of each carrier is approximately 280 kg, which means the total weight placed on the haul rope from all carriers is nearly 24 tonnes.
[17] The chairlift is known as a “detachable” lift. This is as opposed to a “fixed grip” one. Despite this terminology, it does seem the carriers generally are not easily or quickly removed. Some lifts do have what is known as a parking rail which means the chairs can be transferred and stored reasonably easily which, I understand, is usually to prevent icing overnight. The Adventure Park’s lift, however, did not have a parking rail. Instead, it simply had what is described as a “maintenance rail” at the bottom chairlift station where approximately five carriers could be diverted at a time for maintenance purposes.
[18] Another point of significance relating to the design of this chairlift is that at each of the chairlift stations there is a conveyor. As the chairs and bike carriers arrive into each station they are automatically transferred from the haul rope by this conveyor mechanism to a much slower separate rail. The purpose of this is to slow down the carriers for easier embarkation and disembarkation of people and bikes. The separate rail is then controlled by an electromagnetic clutch. This releases in a managed and
orderly fashion the chairs and bike carriers, once they have circuited around the rail, back again onto the speedier haul rope.
Summit Road Fire and the Chairlift Fire
[19] The Summit Road Fire, as I have noted, began on 13 February 2017. This fire commenced about 500 m from the top chairlift station at the Park. It was first noticed at around 7:10 p.m. that evening. It seems to be accepted by all parties that the Summit Road Fire was lit by an unidentified arsonist in an area of bush adjacent to the Summit Road and outside the boundary of the Park. By around 9:30 p.m. that night the Summit Road Fire had developed and was at that point only about 300 m away from the top chairlift station.
[20] Over the next 36 hours this fire slowly progressed into the Park, and part of it became the Chairlift Fire. The Chairlift Fire outbreak then spread fire rapidly beyond the Park to the southwest. It is useful here to set out a timeline for both the Summit Road Fire and the Chairlift Fire. In doing so, I will touch on the EVR Fire, although that will only briefly provide some background to the overall fire events. It is the Chairlift Fire and its outbreak and development on the Park which is critical to the events the subject of this judgment.
[21] But, first, it is helpful to note that the Port Hills region in Christchurch has had many fires over the years. Since records began, the evidence before me is that previously there had been nearly 700 fires in total recorded in the Port Hills.
[22] It is also of some importance that, at the time of these fires in February 2017, there was an elevated fire risk in Canterbury generally and in the Port Hills area of Christchurch in particular. February 2017 had been exceptionally dry. On Saturday 11 February 2017 the Christchurch City Council had imposed a total city fire ban as Christchurch had received only half its average February rainfall at that time. The seasonal conditions in the area were otherwise typical for this peak summer month, being hot, dry and windy. Of significant concern too was the fact that under and around the Chairlift at the time were considerable amounts of flammable pine slash and adjacent dry coconut matting, the latter being installed by the Adventure Park, I understand, for erosion-prevention purposes.
Timeline
[23] I now turn to set out the timeline. In doing so I will add more detail for the fires generally, and in particular with respect to the fires that affected the Adventure Park.
Monday, 13 February 2017
[24] As I have noted, around 5:40 p.m. that Monday the EVR Fire began and was noticed about 4 km away from the Park. At the Park the chairlift had been stopped at around 5:40 p.m. due to high winds. The Adventure Park’s operation log recorded the wind at the Park at 5:41 p.m. that day as being 68 km per hour. This same log showed the chairlift was closed at 5:43 p.m.
[25] The EVR Fire developed in the windy conditions and quickly spread up the hill from Early Valley Road to endanger the properties of a number of the EVR plaintiffs.
[26] At 7:45 p.m. on the Monday, Darron Charity, a senior Adventure Park employee, received a call from Anne Newman who was the Adventure Park Public Relations Officer at the time, advising him of some smoke being seen rising from the Summit Road area adjacent to the Park. Mr Charity went to investigate and discovered the Summit Road Fire in its early stages of development.
[27] Following this discovery, Adventure Park employees almost immediately established a fire watch to monitor the threat of the fire. This was arranged by Mike Johnstone who was the General Manager of Park Operations at the time.
[28] By 9:26 p.m. that night, Ms Newman had notified Adventure Park Board Members that, “Darron Charity is onsite and believes [the Summit Road Fire] is currently about 300 m from the top station.”
[29] By 1:30 a.m. that night the Summit Road Fire had breached the boundary of the Park below a car park area on Summit Road towards the general area of the top chairlift station. In places the boundary of the Park is only about 100 m away from
the top station and so, under all the circumstances, the threat from the advancing fire was obviously a matter of concern.
[30] Although it was not normal to keep the chairlift running through the night, a decision was taken that Monday night to restart the chairlift. Mr Johnstone, stated this was just a precaution as there was a need to keep the haul rope of the chairlift running to avoid it being subject to localised fire damage and potentially breaking.
[31] Mr Johnstone at that time also removed emergency lift evacuation equipment from the top chairlift station. He said this was done for two reasons. The first reason was to save it from the possibility of being consumed by fire. The second, and alternative reason was to ensure, in case access was lost to the station, that the equipment, therefore, would be elsewhere and available.
[32] Also, on that Monday night the Police requested Mr Johnstone to visit a neighbour of the Park near the top station to request that he evacuate his property. This was done and Mr Johnstone then returned to the bottom station. He and other emergency Adventure Park staff then remained at the bottom station all night to ensure the chairlift kept running.
[33] During that night, Mr Johnstone said he started to receive error messages on the bottom station computer indicating that there had been power issues at the top station.
[34] After discovery of the Summit Road Fire that evening, it seems Mr Charity set himself up near where the fire originated, inside the cordon, to keep an eye on it.
[35] It appears too that it was sometime after midnight on the Monday evening that Mr Johnstone drove up to the cordon on Summit Road and observed that the fire had backed into the Park boundary. Mr Johnstone gave his opinion on the threat the fire posed to the Park at that stage and said in his brief of evidence at paragraph 67:
The thin line of fire had only made its way a very small distance towards the Park. It was a long way from any infrastructure, and the Park had been evacuated. The fire was small, and from my training and experience, small fires will not spread significantly at night time. The fire was moving downhill,
which I knew meant it would move much more slowly than a fire that would burn uphill.
[36] Mr Johnstone also confirmed that at that stage there was no advice from the Police or rural fire officers to whom he spoke about any risk of the Summit Road Fire moving towards the chairlift and/or towards the bottom station where Adventure Park staff were located. That seemed to be the position around 1 a.m. on the Tuesday morning, 14 February 2017.
Tuesday, 14 February 2017
[37] In evidence before me, it was apparent that several things happened on the Tuesday morning. At 6:46 a.m. that morning Ms Newman notified the Board of the Adventure Park that “The fire has come into our boundary.” The Adventure Park’s insurer was also notified of the fire risk on the Tuesday morning.
[38] John McVicar, a member of the Board of the Adventure Park and owner of the land on which the Park sat and the surrounding forestry, gave evidence that he visited the overall Port Hills Fire Control Centre at Rolleston at around 9 a.m. that Tuesday morning. He said this was specifically to provide information about access points and water supplies within the Park. At 9:37 a.m. Mr McVicar, confirmed in an email to members of the Board that:
As you know, the fire has crept into the top part of the Adventure Park by the Sign of the Kiwi overnight … I have requested some action to further protect the chairlift top station and pylons and forest in general. They have organised some retardant from the airport to put around key assets such as top station if required.
[39] So far as dropping the fire retardant was concerned, in cross-examination, Mr McVicar explained:1
There was retardant going in the area right next to it (the top chairlift) and it’s a … – it’s just a precautionary measure, you’ve got a fire close by. There is fire retardant available. They’re wanting to put it on, you know, high value key bits of property and asset and from the south tower area to the top chairlift, you now, probably less than 50 m so it was just that made sense to ask about it. The fire retardant came up in conversation. I didn’t actually go out to Rolleston and say “I want fire retardant.” … They made it very clear that they
1 Notes of Evidence, page 1217, lines 20-40
were only going to put the retardant on – protect key sort of assets and the top station just appeared to be one, so I suggested that at the time.
… It was just an opportunity and made sense to utilise that retardant because they were wanting to use it and use it sensibly.
[40] That same Tuesday morning, Mr Charity in an email said, “It’s actually a lot worse for us today”. In re-examination, Mr Charity confirmed with respect to that email that, “The feeling for me onsite was about actually, I think it’s amplifying rather than getting under control”.
[41] At 8:56 a.m. that morning the Adventure Park had emailed its insurance broker (Aeon) and, at 9:36 a.m., its Bank (ASB) with messages which respectively stated:
The fires are now significantly into our property on the east side.
And:
We are doing all we can to protect our assets.
[42] At around 9:45 a.m., a fault message was received by the computer at the bottom station. The most likely cause of this message was a power failure at the top station as the power supply had come from above the station and, presumably was fire-affected. At this time, it does seem from the evidence before me, that there was a possible risk of the fire advancing to the chairlift in this top station area particularly.
[43] Also on the Tuesday morning, Mr Johnstone, as General Operations Manager, “put out an order” to Adventure Park staff on site that “There was a strict instruction that nobody should be going to the top of the Park because of the fire danger and the safety of staff was paramount.”2
[44] That morning, however, Mr Johnstone and an electrician for the Adventure Park did drive in a vehicle from the bottom station up to the top station and confirmed that the power had failed there. At that stage the chairlift was running on its limited battery power.
2 Notes of Evidence, Mr Johnstone, p 1114, line 4 and p 1121, line 18.
[45] It seems from the evidence of Mr McVicar and Mr Johnstone that their impressions at this time on the Tuesday morning, following discussions with various Fire Service personnel and other people, were consistent with findings outlined in an AFAC Report which, at page 22, included the comment:3
From the morning of Tuesday, 14 February 2017, the only NZFS (New Zealand Fire Service) resources on the incident ground were water tankers. The IC felt that the fires were contained and although there would be a few more days involved in firefighting and mop-up that the resources available could manage. Therefore, Urban Fire Services were not requested for Tuesday.
[46] Ms Newman, in her evidence, confirmed too that, on the Tuesday morning, she had spoken to representatives of the Fire Service as she wanted to make sure they knew exactly where the ziplines were. She said she informed them that the chairlift was continuing to run at this time and no concerns were expressed to her by the Fire Service as to this. Overall, it seems to be the contention of the Adventure Park that there was little significant cause for concern over the Summit Road Fire advancing into the Park on that Tuesday morning. This, however, is despite other evidence before me including the clear concerns on the ground of Mr Charity noted at [40] above.
[47] After returning from the visit he made to the top station late on the Tuesday morning, Mr Johnstone stopped the chairlift which had still been running at that point. Later, he returned to the top station to observe the Summit Road Fire. At that point he says he saw aerial retardant aircraft around the cell phone towers adjacent to the Park before they began dropping retardant on the top station. Mr Johnstone gave evidence, that the Summit Road Fire then was quite visible. He estimated it was about 200 m away from the top station. No doubt with some concern as to this development, he directed that the chairlift be re-started. This, he said, was a decision made in accordance with the standard operating procedures for the chairlift in the Doppelmayr Manual and after talking to Doppelmayr representatives.
[48] By later in the afternoon on the Tuesday, a number of chairlift chairs and bike carriers, however, were clustering and bunching, particularly at the top station, but also some at the bottom station. At that point, Mr Johnstone says, he asked
3 A post-fire report dated July 2017 of the Australasian Fire and Emergency Services Authorities Council Limited on the Port Hills Fires (The AFAC Report).
Mr Goodwin, from Doppelmayr, “whether there was any way to get the chairs quickly off the lift line to stop them bunching”. His evidence was that Mr Goodwin was unable to assist. Bunching was a potential problem as the extra weight of several carriers jammed together created a load problem for the sagging haul rope.
[49] At that point the Adventure Park staff decided they needed to untangle the bunched chairs at the bottom station area. The decision was taken to remove the wheel rails for the bike carriers rather than removing the carriers generally off the haul rope and then the maintenance rail. Mr Johnstone, Mr Charity, Mr Goodwin and others, helped with the manual task of physically untangling, unbolting and removing some of the bike rails at the bottom station. This occurred from late afternoon on the Tuesday until sometime later that night. Later in the evening this work was undertaken using head torches. During this time Adventure Park staff had been successful in removing between 15 and 18 rails off the bike racks.
[50] At about 8 p.m. on the Tuesday night, it seems at Mr Goodwin’s suggestion, staff of the Adventure Park made the decision to run the chairlift backwards and forwards in equal 20 minute intervals. This, they said, was to avoid the chair clusters from entering the top station and getting jammed while still maintaining movement of the haul rope which Adventure Park witnesses confirmed was the paramount and golden rule in the event of a fire.
[51] The clusters of carriers were the consequences of the failed clutch mechanism in the top station. It seems this failure had been known since the Tuesday morning but, notwithstanding this, carriers were not removed from the haul rope or maintenance rail at that time.
[52] Earlier that day, shortly before 1 p.m., Gareth Hayman, the General Manager of Doppelmayr New Zealand who was overseas at the time, had sent an email message to Adventure Park personnel which read:
You guys may be already, if it’s [the fire] getting close to the chair, it’s best to keep the lift running for long as possible to protect the haul rope and the plastic core. Even if the power is cut to the top station, run the emergency drive for as long as its safe to do so.
[53] There was no mention, however, from Mr Hayman of any instruction to remove chairs or bike carriers from the haul rope.
[54] Also, on that Tuesday afternoon, it seems the view of the Fire Service and other relevant authorities was not one of great concern for the Park at this time. Mr McVicar in his evidence described this as follows:
At no stage was I told that there was any heightened concern about the Summit Road Fire, and the consistent message I received was that it was under control and did not pose a threat to the Park property.
[55] Indeed, in an email Mr McVicar forwarded to his fellow Board members at 3 p.m. on the Tuesday afternoon, he advised:
Update; have just spoken with Tim Shepherd at the Fire Control Centre. Have felt that they had our Marleys Hill fire largely under control at this time. Retardant has been put in certain areas and they are keeping on top of it – will need continual monitoring for some time. The other Early Valley Road fire is still burning on and there was/is fear that it could connect with the Marleys fire. They have heavy gear there now creating a fire break to prevent that happening.
Wind – appears that it will stay WNW for rest of day and drop away this evening. Tomorrow and evening look like nice days with NE winds.
[56] Shortly after this message, at 3:04 p.m., Civil Defence released a statement which, amongst other things, stated:
The Marley Hill fire appears to be largely contained on the city side of the Summit Road. Parts of the Early Valley Road fire have crossed the Summit Road towards Governors Bay. Current activity across both fires is focused on efforts to protect structures and prevent the fire from spreading.
The fires are being fought with two aircraft, 12 helicopters and around 100 – 120 firefighters.
Firefighters are making good progress in bringing the fires under control but expect to be working on the fires for another 48 – 72 hours.
[57] This statement, according to comments from Adventure Park staff, was seen as a “message of comfort”.
[58] Adventure Park staff, including Mr Johnstone, remained in the bottom station of the Park for the remainder of that Tuesday night. This was to ensure the lift was
able to be run forwards and backwards. It required manual instructions from the bottom station for this to occur. It was said, if the haul rope had been left running simply in one direction with no attention given by staff to running and reversing the lift, then the carriers attached to the haul rope would hit the top station and have the potential to jam again and damage the haul rope.
Wednesday, 15 February 2017
[59] The chairlift had been run in this fashion all through Tuesday night until the Wednesday morning. At about 6:30 a.m. on the Wednesday it was clear that the Summit Road Fire had entered further into the Park. Flames were evident around chairlift Tower 10 and in the area of a downhill trail.
[60] Early that morning, Mr Charity walked up the east valley of the Park, looking towards chairlift Towers 8A and 10. At 7:13 a.m. he took a photo showing the fire in the Park near the chairlift.
[61] Mr Charity then arrived at the top station prior to 10 a.m. that morning. The fire at that stage had not reached the top station. It seems from evidence before me that early on the Wednesday morning the fire was tracking around the bottom of the cliff face below Tower 10. Then it climbed the cliff face and emerged in the area of the merged point of ziplines 2 and 3. At that point Adventure Park staff began the process of removing chairs and carriers from the haul rope. This started around 9:30
a.m. on the Wednesday morning.
[62] Mr Hamish Murrell, a contractor who had initially helped with construction of the Park, was contacted. He supplied a truck with a Hiab crane which was then used to remove chairs and bike carriers from the haul rope and maintenance rail at the bottom station. As I have noted, this only began around 9:30 a.m. on the Wednesday morning and continued until about 1:30 p.m. that afternoon. A small group of Adventure Park staff, with Mr Murrell, were able to remove somewhere between 30 and 35 of the 84 carriers from the haul rope over about that four hour period from 9:30 a.m. This occurred using the Hiab on Mr Murrell’s truck. After initially trying to transport removed carriers to the Park car park, because this was taking too long, those carriers were simply placed in the open space alongside the bottom station.
[63] Interestingly, Mr Murrell, in his evidence, explained that the reason the chairs and carriers were removed was because “the fire was coming”.4
[64] By around the middle of the day on the Wednesday, the Summit Road Fire had tracked in a north-westerly direction in the Park to a position between Towers 10 and 12 on the eastern side of the chairlift. The position of the Remaining Plaintiffs is it was in this location that the chairlift chairs, which were in close proximity to the adjacent forest, ignited and melted, dropping molten plastic to the ground, thus starting the Chairlift Fire outbreak. It seems this was the case and that, in about the four or so hours from 10 a.m. on the Wednesday morning to around 2:30 p.m. that day, the Summit Road Fire had spread through the forest to the western side of the chairlift to became a major crowning forest fire and to reach this area.
[65] From around 1:30 p.m. that Wednesday, Adventure Park staff at the bottom chairlift noticed that one of the chairs on the haul rope had caught fire. Mr Johnstone instructed that the lift was to be immediately reversed and the Park evacuated. That happened.
[66] The Remaining Plaintiffs say, and the evidence I refer to shortly seems to support the view that, from that time on the Wednesday, molten plastic dropping from the moving burning chairlift chairs had caused new spot fires down the length of part of the Park’s chairlift line below the escarpment. These chairs had caught alight as they passed the burning forest towards the top of the lift line.
[67] The spot fires which were created ignited significant pine slash under and around the Chairlift and then merged to create what were described as the “gondola line ignitions” of 1 km shown in the Fire and Emergency New Zealand Marley Hill, Port Hills Fire Investigation Report at Maps 4 and 5.5 This outbreak, before me, has been referred to variously as a “new head fire” and the Chairlift Fire. It is said that it created a new fire front outbreak which, with a change in the direction and the rapid strengthening of the wind at the time, meant the fire progressed rapidly from the Park
4 Notes of Evidence, p 1165, line 19.
5 See 320.12556 and 320.125788 and 89.
across the intervening valley and up to the Worsleys Road homes and surrounding properties.
[68] At this point it is useful to refer to a generally uncontested time lapse video taken by Drew Norris which was placed in evidence before me. This time lapse video showed graphically that at this time some of the Park’s chairs had caught alight and with molten material from the chairs dripping onto pine slash on the ground below, this had this caused the outbreak and spread of the Chairlift Fire.
[69] The Drew Norris video depicted clearly that following the first chair being on fire, there was a second chair that caught fire followed by a cluster of chairs together which were on fire, all around Towers 8 and 8A of the lift. The first chair seen emerging on fire occurred, with corrected time, at about 1:30 p.m.
[70] The Drew Norris video then shows spot fires breaking out in the cutover below the escarpment and the bottom forest. Within a few minutes of the first spot fire in the cutover, smoke becomes visible in the forest below the cutover and, at 1:36 p.m., this fire begins to develop rapidly. By 1:37 p.m. the first visible flames are seen in the video within this forestry block and the fire in the cutover continues to develop.
[71] What also appears clear is that initially the burning chairs appear to be travelling downslope, above substantial areas of highly flammable dry pine slash under and around the lift, in the middle reaches of the chairlift. Then it seems, no doubt following Mr Johnstone’s instruction to reverse the lift, the chairs reversed direction and travelled upslope, again across the pine slash before entering the forest at the top of the escarpment. From the video, the chairs then seemed to change direction again and were observed to be travelling downslope. Smoke plumes are seen to develop in the pine slash immediately after chairs passed the area in question and flames then quickly developed as spot fires occurred at each location.
[72] Those spot fires developed rapidly down the slope along the line of the chairlift.
[73] A further time lapse video at this point, the “YouTube fire video”, was provided in evidence. Again, this gave uncontradicted evidence and confirmed observations from the Drew Norris video.
[74] From all this evidence it is plain that by about 1:21 p.m. on the Wednesday afternoon the Summit Road Fire and its flames were visible in the Park. From the evidence of Ms McKinley and others, flames were at that stage well above (being some 30 – 40 metres over) the height of the pine trees being consumed. Clearly this had become what is known as a “crowning fire”.
[75] From a 2:30 p.m. Air Ops helicopter flight video also in evidence, the growing intensity of the chairlift fire was evident from the size of the overall fire plume in the area.
[76] Between 1 p.m. and 2 p.m. on the Wednesday afternoon there had been a significant wind change in the Port Hills area. The wind shifted from a west-north- west direction to an east-south-east direction. This coincided with the burning chairs being transported from the top forestry block to the bottom forestry block along the lift line. Based on these wind directions, in his evidence the fire investigator, Mr Cox, concluded that the relevant Worsleys Road properties owned by the Remaining Plaintiffs impacted by the outbreak of the Chairlift Fire, were consumed by this fire. Mr Cox, in his evidence, provides his opinion that, without the Chairlift Fire, the first and second fire runs from the Summit Road Fire would have passed well south of the Worsleys Road properties, and those properties would not have been affected.
[77] Mr Cox’s evidence too conformed that the YouTube fire video demonstrated the effect of the increasing windspeed in the area on the spread of the spot fires under the chairlift as they combined and accelerated in a westerly direction.
[78] What the presence of the major crowning forest fire in the immediate area meant was this. The chairlift was operating in a 12 metre wide corridor of cleared pine trees. Dry slash from the cleared corridor remained under and around the chairlift line. At the point of the crowning fire the chairlift line was well below, perhaps 30 – 40
metres below, the top of the trees on fire. The flames from the fire were raging many metres above that. The chairlift at this time was being kept running between the trees on either side of the corridor which were burning intensely.
[79] Turning now to the Merged Fire, by approximately 3 p.m. that Wednesday, the Summit Road Fire, which it is said had morphed into the Chairlift Fire as a new “head fire”, had spread through pine slash and forestry on the Park property passing onto the north-western side of the chairlift and merged with the EVR Fire on the eastern side of what is known as Kennedy’s Track. The Merged Fire then advanced in a north- westerly direction on the western side of Worsleys Road, destroying property as it went. The unchallenged evidence of fire investigation experts employed by the Remaining Plaintiffs confirms this.
[80] And, from evidence generally uncontested before me, the Merged Fire entered the Flanagan’s property at 165 Early Valley Road. Mr Joseph, a fire investigator for the Flanagans, gave evidence which I accept on this aspect.
[81] At trial, it was generally agreed too that if there is found to be a liability on the part of the Adventure Park to the Remaining plaintiffs for their loss then, first, it is accepted that a similar liability for the Flanagan’s loss will arise from the Merged Fire, and, secondly, this liability is to be split evenly between the Adventure Park and Orion. As I understand it, this had been agreed as between the Adventure Park and Orion. No formal ruling as to this is required from the Court.
Adventure Park’s Fire Safety Management Plan (FSM Plan)
[82] The Adventure Park was required to have a Fire Safety Management Plan (FSM Plan) prior to beginning its operation. The version of the FSM Plant in place at that point comprised Revision 4 of the Plan. This was dated 13 December 2016, only a few days before the time of the Park’s commencement.
[83] Significant evidence from a range of witnesses before me all agreed that one of the greatest risks to the Park, given its location in the Port Hills within a hillside area of forestry, was the outbreak of fire. Accordingly, the FSM Plan was an important document and addressed aspects of this. As part of its resource consent for operation
of the Park too, the Adventure Park needed the Fire Plan and this had to be approved by the Christchurch City Council before the Park opened.
[84]In the FSM Plan adopted at the time, provisions of some relevance were:
1.INTRODUCTION
… The FSMP will thus be in three parts.
·Village Design and Construction, plus Fire suppression and service response
·Forest and Grass Fire – preventative, and fire fighting response.
Fire Evacuation of CAP and public safety
Preparation for and management of Fire is of significant interest to CCC, NZFS, CCCRFA, DOC and ECAN for ensuring public safety in the Christchurch Adventure Park…
The consequences of fire include the threat to the lives or health or safety of relevant persons (including emergency response personnel), damage to or loss of property and severe interruption to business activities or opportunities.
Managing the risk of fire demands fire safety precautions based on a combination of appropriate prevention and protection measures (reduction and readiness), depending upon building use and occupancy and in the context of CAP, the land use. There are inherent fire risks and legal obligations on Christchurch Adventure Park (CAP) as the employer/occupier/owner and PCBU. On site, the Fire Safety Management Plan (FSMP) applies to all premises and leased area under the control of CAP as the employer, owner or principal occupier.
…
Forest Fire – Prevention and Response
Forest fire presents the biggest risk to human safety in the park, the largest risk to the CAP assets and an Emergency and Evacuation scenario with a high probability, particularly during periods of high fire risk. Canterbury is a dry, east coast province, the CAP is heavily forested and CAP will have an anticipated high public use and access during those periods of increased fire risk. It is also not possible to completely close the site.
…
Chairlift Fire Suppression
Electrical failure/electrical fire is a significant risk to the forest and to operations. There is an additional risk. A Base Station Fire and electrical fire in particular is a greater risk to CAP operations and Forest Fire than a fire in the café.
…
·Potential future sprinkling of the stations, and the lift line (cigarettes).
…
·Continuous running – protocol regarding running the lift during a forest fire to prevent heat concentration on the haul rope.
…
5.2Forest Fire – Reduction
·Fuel reduction – slash removal, removal of dead wood/lower branches.
…
5.4Response
…
·Use of safe zones – refer appendix B. The lift line, forest tracks, MTB trails provide corridors for egress and act as fire breaks. The lift line is a 12 metre – 20 metre strip which will be stabilised/covered with evergreen shrubs, vegetated and clear of pine trees.
…
6.1 Village Fire – Reduction
Removal of fuel sources from the village – branches and cones from the trees, dead or at risk trees, rubbish and recycling – will be removed weekly, and more frequently if required on review of the FWI.
(Emphasis added)
[85] So far as completion of the final FSM Plan generally was concerned, before the Court is an email dated 8 November 2016 (a month or so before the Park opened) to employees of the Adventure Park, the Christchurch City Council and Fire and
Emergency New Zealand, from George Ritchie, the author of the Plan, which in part stated:
John McVicar (the owner of the forest) is keen to integrate the CAP Fire Safety Planning with the Cashmere Forest Fire Safety Planning to have an overall Plan and Fire Response.
The Adventure Park presents additional risk to the Cashmere Forest and vice versa.
We currently don’t have an integrated plan, and in the Adventure Park, fire presents the highest risk to:
- The safety of people in and around the park.
- The protection of the forest/timber asset.
- The protection and business continuity of Christchurch Adventure Park as an asset and as an Operation.
It is a priority for Christchurch Adventure Park that the Fire Safety Management Plan (FSMP) is best practice and highly professional.
To achieve that and add to the overall management of the risk in the Port Hills, we need to work together.
[86] It is interesting to note that a previous revision of the draft for the FSM Plan provided on one aspect for a much greater minimum lift line corridor of 60 metres between cleared pine trees. This was reduced, however, to 12 metres in the final Version 4 Plan noted at [84].6
Doppelmayr manual
[87] The Adventure Park’s position here is that throughout the fires it followed the manual on its chairlift operation issued by the manufacturer, Doppelmayr, in all respects. It says it did so by keeping the haul rope running, which was the golden rule. It is clear the manual does provide for the haul rope to be kept running in the event of a fire. This is to avoid the danger of localised heat on the rope and it fracturing. The Adventure Park contends that otherwise, there was nothing specific in the Doppelmayr
6 Subsequent to the February 2016 fires, the Adventure Park again revised its FSM Plan. A Version 5, dated 1 December 2017, interestingly did again provide for the minimum chairlift corridor between the forest trees to be 60 metres. Of course, this Version 5 was not in place at the time of the fires, the operative FSM Plan then being Version 4, and thus it is of little direct relevance here.
manual addressing the situation which it was facing, being a building forest fire under and around its chairlift and the haul rope.
[88] Whilst that may be the case, and given that more often than not Doppelmayr chairlifts are designed for operation over snow-covered ski fields, the plaintiffs say that the Doppelmayr manual was, of course, not contemplating a chairlift being run through a crowning forest fire, which was the case here.
Damage caused by the fires
[89] In addition to the many hectares of forest and parkland destroyed by the Summit Road Fire, the Chairlift Fire and the Merged Fire, these fires destroyed significant property of both the Remaining Plaintiffs and the Flanagans. The total amount those plaintiffs claim here, against the Adventure Park, is $11,006,138.50 plus interest and costs. These amounts represent losses claimed resulting from the destroyed or damaged properties, contents, vehicles, personal items, fencing, landscaping, forestry and other damaged items and associated losses of these plaintiffs.
[90] Interest on this sum at the rate of 5 per cent per annum is sought, calculated from the time of the loss on 15 February 2017 to 13 October 2020, the final hearing date for this matter. It is said too that interest will continue to accrue thereafter at that rate.
[91] The Remaining Plaintiffs say, therefore, that the total figure they claim, before inclusion of costs, is $13,025,764.91 with interest thereon up to 13 October 2020.
[92] It is true to say part of this claimed loss is insured and a significant part is uninsured. The Remaining Plaintiffs say, however, there is no difference between the two for the purposes of this proceeding and on the basis that I may find those losses to be properly claimed here, I agree.
[93]The total claim, therefore, is made up of:
(a)$9,823,373.94 in respect of the losses caused by the Chairlift Fire alone; and
(b)$1,182,764.56 in respect of the loss suffered by the Flanagans and caused by the Merged Fire.
[94] These amounts are broken down in his evidence by the plaintiffs’ expert loss adjuster, Grant Bird as follows:
(a)Insured losses for the Chairlift Fire of $5,219,112.80;
(b)Uninsured losses for the Chairlift Fire of $4,624,719.20;
(c)Insured losses for the Merged Fire affecting the Flanagan property of
$1,182,264.56; and
(d)Uninsured losses for the Merged Fire to the Flanagan property of $500.
[95] With respect to those losses, they include four properties that were deemed a total loss. These are, first, the property of the first plaintiff Cecile Grace (Mrs Grace), secondly the property of the second plaintiff Alexander Doug Pflaum and the 73rd plaintiff, Vikki Pflaum (the Pflaums), thirdly, the property of the 5th and 18th plaintiffs Bae Keun Kwon and Jung Kwon Jang (the Kwons), and lastly, the property of the Flanagans.
Plaintiffs’ pleadings
[96] In the plaintiffs’ final and sixth amended statement of claim against the Adventure Park, relevantly to the remaining claims, they plead:
80.At approximately 7:09 p.m. on 13 February 2017 a second fire commenced at a location on Marleys Hill near Summit Road (Summit Road fire).
Particulars
80.1The Summit Road Fire originated at GPS co-ordinates … between the Flying Nun track and a pine planation.
81.By approximately 1 p.m. on 15 February 2017, the Summit Road fire had spread into the area of the Port Hills occupied by the Adventure Park and, in particular, into the area in which the Adventure Park operated a chairlift.
Particulars
81.1The Summit Road Fire entered the Adventure Park from the south-east;
81.2The fire entered the Adventure Park on the evening of 13 February 2017 but had not yet reached the top station of the chairlift;
81.3The fire travelled from the McVicars Forestry to the top station of the chairlift;
81.4The fire crossed the area where the chairlift operated and entered the pine plantation at about midday on 15 February 2017.
82.During the course of the afternoon of 15 February 2017, the Summit Road Fire developed significantly in the area of the upper reaches of the chairlift and the top station.
83.On the afternoon of 15 February 2017:
83.1The Summit Road fire had significantly developed in the upper reaches of the chairlift;
83.2The upper reaches of the chairlift and the top station was in an area consumed by fire;
83.3The EVR Fire was burning out of control.
84.Despite the above and requests from fire authorities to cease its use, Leisure Investments continued to operate its chairlift including from 1 p.m. on 15 February 2017:
84.1First, in a direction moving the chairs down the hill towards the bottom station and the café and bar area;
84.2Secondly, reversing the chairlift moving the chairs towards the upper station and crossing the pine slash and the McVicar forest; and
84.3Thirdly, reversing the chairlift to again move chairs towards the bottom station (the chairlift operation).
85.The chairlift operation caused the chairs and bike racks to catch fire and combust.
Particulars
85.1Leisure Investments knew the Summit Road Fire had spread into the upper reaches of the Adventure Park from at least 1:30
a.m. on Tuesday, 14 February;
85.2Despite knowing this and continuing to run the chairlift Leisure Investments failed to detach the chairs and bike racks from the haul rope despite them having the time to do so.
85.3The chairs and bike racks contained flammable components.
85.4Leisure Investments’ continued operation of the chairlift on the afternoon of 15 February 2017 caused chairs and bike racks to travel through an area of fire burning adjacent to the upper reaches of the chairlift and in doing so to catch alight.
86.Immediately after the flaming chairs and bike racks passed over the escarpment and the middle reaches of the chairlift, spot fires commenced along the line of the chairlift in the highly flammable dry pine slash and vegetation below the chairlift.
87.This outbreak of fire was caused by the flaming debris of the burning chairs and bike racks dropping from them as they passed over the escarpment and the middle and lower reaches of the chairlift.
88.This outbreak of fire caused by the chairlift operation by the second defendant (the Adventure Park) took the Summit Road Fire out of the containment area to the east of the chairlift and above the escarpment set up by the Rural Fire Authority undertaking the fire suppression activities.
89.The outbreak of fire caused by Leisure Investments led to the Summit Road Fire forming a new head fire which developed in intensity and destroyed the plaintiff’s property as set out in Schedule 2 and combined with the EVR Fire, Schedule 3.
Particulars
89.1The new head fire emerged in the afternoon of 15 February 2017 from the merger of spot fires created by flaming debris from the chairs and bike racks beneath the middle and lower reaches of the chairlift;
89.2From there the Summit Road Fire gained intensity and spread in a west-south-west direction under a strengthening east- north-east wind towards Worsleys Road. The properties on Worsleys Road and surrounding area were threatened by the new head and northern flank fires.
90.The EVR Fire and the Summit Road Fire and the Merged Fire destroyed and/or damaged the plaintiffs’ property, including buildings, contents and motor vehicles, causing the plaintiffs to suffer loss…
Particulars
…
90.2The Summit Road Fire destroyed and/damaged the relevant plaintiffs’ property, including buildings, contents and motor vehicles, causing those plaintiffs to suffer loss…
90.3The EVR Fire merged with the Summit Road Fire and the Merged Fire destroyed and/damaged the [Flanagan’s]
property, including buildings, contents and motor vehicles, causing the [Flanagans] to suffer loss…
[97] In this statement of claim, essentially three remaining causes of action are pleaded against the Adventure Park:
(a)liability under s 43 of the now repealed Forest and Rural Fires Act 1977 (FRF Act);
(b)negligence; and
(c)nuisance.
[98] Effectively here the Remaining Plaintiffs and the Flanagans claim damages against the Adventure Park under the three heads noted at [97] above as follows:
(a)The Adventure Park is responsible under s 43 of the FRF Act for what they say is the “outbreak” of the Chairlift Fire. This followed the entry of the Summit Road Fire into the Park, the Chairlift Fire then having spread and destroyed the properties on and around Worsleys Spur. Also, it is claimed this fire merged with the EVR Fire to form the Merged Fire that destroyed the Flanagan’s home.
(b)As to the negligence claim, principally, it is claimed that the Adventure Park was negligent in not commencing the removal of the flammable chairs from its chairlift haul rope earlier than 9:30 a.m. on Wednesday 15 February 2017, the plastic seats of which ignited and caused the Chairlift Fire as I have noted above.
(c)As to the nuisance claim, it is said the Adventure Park, by running the chairlift and its chairs through the Summit Road Fire, created a nuisance in the form of what became the Chairlift Fire that broke out of the Park and unreasonably interfered with the use and enjoyment of the properties owned/occupied by the Remaining Plaintiffs and the Flanagans.
[99] At the outset, I repeat that the Remaining Plaintiffs and the Flanagans do acknowledge the Adventure Park did not start the Summit Road Fire and its staff were put in a challenging but manageable position when that fire started on the night of Monday 13 February 2017.
Section 43 of the Forest and Rural Fires Act 1997 (FRF Act)
Liability under s 43
[100] Section 43 of the FRF Act provides a statutory right of recovery from persons responsible for fire in circumstances:
Where any property has wholly or partially been destroyed or damaged by (or safeguarded from) an outbreak or threat of outbreak of fire, and responsibility for the outbreak is acknowledged by or (the outbreak) is established by action or otherwise as caused by any person.
[101] It is interesting to note that Todd on Torts at 11.6.02 addresses liability under s 43 (although it is now repealed) generally and states:7
Section 43(1) of the Forest and Rural Fires Act 1977 held a person responsible for causing a fire in a forest or rural area strictly liable for costs incurred in fighting the fire, as well as for damage done to property. Section 43(3) preserved a claimant’s right to sue at common law for damages. The 1977 Act was repealed by the Fire and Emergency New Zealand Act 2017, which largely came into force on 1 July 2017. It replaced civil liability with a new offence and penalty regime that includes serious criminal offences punishable by up to two years’ imprisonment. One commentator has said:
“It remains to be seen whether this public policy shift away from civil cost recovery and towards criminalising risky fire behaviour will achieve the stated objectives [of improving fire safety]. In the meantime, the liability landscape has changed significantly for those who cause rural fires that get out of control and those who suffer loss as a result of them.”
While statutory liability to pay compensation has been abolished, liability at common law remains, but it is not as easy to establish as under the 1977 Act.
(emphasis added) [citations excluded]
7 Stephen Todd & Others (Eds) Todd on Torts (8th Ed) Thomson Reuters at 11.6.02.
[102] The FRF Act was repealed on 1 July 2017 by the Fire and Emergency New Zealand Act 2017. However, at the time of the fires in this case, s 43 of the FRF Act remained in force.8 Relevantly, it provided in full:
43 Recovery from person responsible for fire
(1)Where any property has wholly or partially been destroyed or damaged by or safeguarded from an outbreak or threat of outbreak of fire, and responsibility for the outbreak is acknowledged by, or is established by action or otherwise as caused by, any person—
(a)the costs of control, restriction, suppression or extinction of the fire may be recovered from that person by the Fire Authority or the New Zealand Fire Service Commission or the eligible landholder or eligible landholders of the forest area affected, as the case may be, incurring those costs pursuant to fire control measures under this Act; and
(b)any loss in, or diminution of, value of that property, and any consequential loss or damage not too remote in law, may be recovered from that person by the owner of the property.
(2)The amount of the costs so recoverable may be wholly or partially established by agreement, or by a Rural Fire Mediator, or by proceedings under section 48(4).
(3)This section shall be deemed to be supplementary to and not in substitution for any other rights of recovery that may exist in law or by enactment or otherwise howsoever.
…
[103] Section 43 is a strict liability provision as the Court of Appeal has twice confirmed.9 In AMI Insurance Ltd v Legg the Court of Appeal restated the legal position that liability under s 43 is strict, citing Tucker v New Zealand Fire Service Commission.10 This had also been found to be the case by that Court earlier in Garnett
8 It appears that the Fire and Emergency New Zealand Act 2017 does not have a counterpart provision to s 43 and instead it utilises an offence-based regime.
9 Under strict liability there are some limited defences which must be contrasted with “absolute liability offences” which impose legal responsibility in every circumstances regardless of whether there is an absence of fault. Section 43 of the FRF Act refers to the concept of responsibility for the outbreak of the fire as being caused by any person. Further discussion on this aspect will follow.
10 AMI Insurance Ltd v Legg [2017] NZCA 321, [2017] 3 NZLR 629 at [13]; and Tucker v New Zealand Fire Service Commission [2003] NZAR 270 (HC) at [42]–[43].
v Tower Insurance Ltd.11 In New Zealand Fire Service v Attfield and in Marlborough Lines Ltd v New Zealand Fire Service Commission the High Court accepted that liability under s 43 is independent of any liability on the basis of negligence, nuisance or any other civil fault.12
[104] The judgment of William Young J in Tucker addressed s 43 in some depth, and it has been cited on a number of occasions in subsequent cases. In his judgment, William Young J noted the enactment of s 43 as part of the 1977 Act came only three years after the decision in New Zealand Forest Products Ltd v O’Sullivan where Mahon J found liability for rural fires under the rule in Rylands v Fletcher13 turned on whether the fire in question that started on the defendant’s land was a natural or non- natural use of that land.14 William Young J found it was:15
…no coincidence that s 43 was enacted only three years after that case was decided. In other words, I think that s 43(1)(a) was primarily intended to cover cases which would otherwise be subject to the rule in Rylands v Fletcher save for the facts that the fire either did not escape or was a natural use of the land on which it was started. I have already referred to the New Zealand Forest Products decision.
and he said:
I have in the end reached the view that s 43 is intended to apply so as to impose liability on a person who causes the outbreak of a fire irrespective of whether that person is otherwise civilly responsible for the fire and its consequences.
His Honour also said of s 43’s element of causation:16
[T]he combination of words still suggests that the legislature was looking at causation in fact rather than responsibility in law. As Mr Scott argued the phrase “responsibility for” can carry the meaning “being the cause of”. I think that is pretty much what the Legislature intended here. One is, after all, not normally legally accountable for an outbreak of fire: legal accountability is usually applicable only to consequences of a fire. Further, there is a real sense in which the section carries the connotation that someone who causes a fire is thereby responsible for it.
11 Garnett v Tower Insurance Ltd [2011] NZCA 576, (2012) 17 ANZ Insurance Cases 61-918 at [38].
12 New Zealand Fire Service v Attfield HC Dunedin CP58/01, 16 June 2003 at [11(ii)]; and
Marlborough Lines Ltd v New Zealand Fire Service Commission [2017] NZHC 2127 at [60].
13 Rylands v Fletcher (1868) 3 LR HL 330.
14 New Zealand Forest Products Ltd v O’Sullivan [1974] 2 NZLR 80 (SC) at 87, citing Hazelwood v Webber (1934) 52 CLR 268 at 277–278 per Gavan Duffy CJ, and Rich, Dixon and McTiernan JJ, and at 281 per Starke J.
15 At [42(4)].
16 At [42(2)] (emphasis original).
[105] In his judgment, William Young J determined liability may be established under s 43 irrespective of whether a defendant is otherwise civilly liable at common law. He upheld the District Court’s decision against Mr Tucker on this point. However, William Young J ultimately found, in the rather unusual facts which prevailed in Tucker,17 that, as to causation, the defendant, Mr Tucker, could not be considered to have “caused” the outbreak of fire.
[106] The Tucker case involved a claim by the New Zealand Fire Service Commission against Mr Tucker, a truck driver. Mr Tucker was driving a fully maintained and compliant 36 wheel truck and trailer unit when two of the tyres burst and two-wheel rims came into contact with the roadway. The sparks that were produced caused a roadside fire and resulted in firefighting costs being incurred. The New Zealand Fire Service succeeded in its claim in the District Court but Mr Tucker successfully appealed this decision to the High Court resulting in William Young J’s decision. His Honour found that Mr Tucker had not “caused” the outbreak of the fire in the circumstances prevailing in that case.
[107] Before explaining in his Tucker decision the proper approach to causation under s 43, his Honour outlined that in his view the section:18
…was aimed at a farmer who deliberately lights a fire (possibly for the purposes of a controlled burn-off). Such a farmer might be thought to be fairly placed under an absolute obligation to ensure that the fire does not get out of control. I believe that the legislation was intended to render unnecessary any need to prove an escape (if the fire fighting expenses were incurred because it went out of control) or that such a fire was a non-natural use of the land involved. The fact that this was the sort of case which the Legislature no doubt had in mind when s 43 was adopted does not mean that its effect is confined to such cases.
[108] In outlining a “principled approach” to causation,19 he endorsed Lord Hoffman’s approach to causation in his Lordship’s speech in Environment Agency v Empress Car Co (Abertillery) Ltd.20 There, Lord Hoffman found causation ought to be assessed by classifying the events leading up to the harmful event as either:21
17 Tucker v New Zealand Fire Service Commission, above n 10.
18 At [57].
19 At [45].
20 At [47], citing Environment Agency (formerly National Rivers Authority) v Empress Car Co (Abertillery) Ltd [1999] 2 AC 22 (HL).
21 At 36.
(a)“a normal fact of life” or “in the general run of things a matter of ordinary occurrence”; or
(b)“extraordinary”.
[109] Only if the event falls into the first category is the defendant said to have “caused” the fire.22 In Empress Car, the appellant maintained a diesel tank in a yard which was drained directly into the River Ebbw Fach in Wales by a person unknown. The appellant was prosecuted, charged with “causing poisonous, noxious or polluting matter or solid waste to enter controlled waters”, and convicted on that basis in the Crown Court. On appeal to the House of Lords, their Lordships found the appellant’s accumulation of a noxious liquid (diesel) and its maintenance of it in a tank on its property caused the pollution, even though a third party had opened the tank’s tap which discharged the diesel into the river.
[110] In his speech, Lord Clyde distinguished the test for negligence with its reasonable foreseeability requirement from causation as a matter of fact:23
In deciding whether some particular factor has played so important a part that any activity by the defendant should be seen as entirely superseded as a causative element it is not a consideration of the foreseeability, or reasonable foreseeability, of the extraneous factor which seems to me to be appropriate, but rather its unnatural, extraordinary or unusual character.
[111] Lord Hoffman elaborated on the ordinary/extraordinary categorisation in this way: “The distinction between ordinary and extraordinary is one of fact and degree to which the [trial court] may apply [its] common sense and knowledge of what happens in the area.”24
[112] To illustrate this approach in practice in New Zealand, in Nelson Forests Ltd v Three Tuis Ltd, Miller J held a couple and their company running a bed and breakfast liable under s 43 when one partner disposed of ashes from a cabin wood-burner over
22 Tucker, above n 10, at [61].
23 Empress Car, above n 20, at 37.
24 At 36.
a bank, having not seen the fire burning for some hours, starting a fire that destroyed a large forest owned by a neighbour.25
[113] Miller J affirmed that s 43 imposed strict liability.26 He said, applying the test laid down by William Young J in Tucker, that the defendant having dumped the hot ashes outside the cabin over a bank in this way, “cannot possibly [say] that the fire was an extraordinary consequence, such that he should not be taken to have caused it at all.”27 His Honour found, unlike in Tucker, that the dumping of hot ashes was an action that had an “immediate” connection to the outbreak of the fire. There was no “succession of events of which only one, an action not in itself intrinsically likely to cause fire, was directly attributable [to the defendant]”.28 This placed the events leading up to the fire firmly in the “normal fact of life” category and not as an “extraordinary consequence”. Thus, causation of the outbreak of the fire and therefore liability under s 43 were established in the Nelson Forests case.
[114] Finally, in New Zealand Fire Service v Attfield Master Christiansen dismissed an application to strike out a proceeding involving a claim under s 43 where a branch from a poplar tree in strong winds fell onto power lines, causing the lines to break which resulted in an outbreak of fire from the point of contact with the ground.29 The Master summarised relevant conditions and circumstances which included: tall trees in close proximity to the lines, in very old and poor condition; the prevalence of strong (prevailing) north-west winds; previous occurrences of wind-blown branches bringing down lines in the area; the well-known propensity of trees to damage power lines giving rise to public safety issues; and finally, the fact the lines company had an explicit written policy and practises in place to try and reduce this risk, but did not take any steps in relation to these particular lines.30 He found these events could be described as “‘ordinary’ in the sense contemplated by Tucker and Empress Car.”.31 The proceeding was not struck out.
25 Nelson Forests Ltd v Three Tuis Ltd [2013] NZHC 856, [2013] NZAR 1151 at [24].
26 At [24], citing Tucker, above n 10; and Empress Car, above n 20.
27 At [25].
28 At [25].
29 New Zealand Fire Service v Attfield, above n 12.
30 At [19].
31 At [20].
Causation under s 43
[115] As the authorities noted above have made clear, responsibility for the outbreak of fire for the purposes of s 43, focuses on causation in fact rather than responsibility in law.32 This focus on causation in fact has the result that a person who causes a fire is thereby responsible for it. Section 43(1) makes this clear.
[116] William Young J in Tucker noted that this analysis of causation, particularly in relation to strict liability offences, has caused “exquisite difficulty for the courts” and “in the end Judges are often driven to take refuge in unarticulated considerations of common sense”.33
[117] In endeavouring to identify this “common sense” approach to causation in the context of liability under s 43, William Young J explained this further in Tucker:34
[54] Where causation is in issue, the question comes down to “common sense”. More than that, it also comes down to what is a question of fact and degree and therefore, inevitably a question upon which different people will have different views. That said, there is much which is of assistance and relevance in the Empress Car case to the issues which arise in the present litigation.
[55] One cannot give a common sense answer to a question of causation for the purpose of attributing responsibility under some rule without knowing the purpose and scope of the rule. Does the rule impose a duty which requires one to guard against, or makes one responsible for, the deliberate acts of third persons? If so, it will be correct to say, when loss is caused by the act of such a third person, that it was caused by the breach of duty.
…Before answering questions about causation, it is therefore first necessary to identify the scope of the relevant rule. This is not a common sense fact; it is a question of law.
…The issue of causation which I must address is not to be assessed on an abstract or philosophical basis.
[118]Also, in relation to this “common sense” approach, the Court of Appeal said in
AMI Insurance v Legg:35
32 Tucker, above n 10 at [42](2).
33 Tucker, above n 10 at [44] – and cited in Marlborough Lines Limited case (see n 10) at [76].
34 Tucker, above n 10 at [54] – [55].
35 AMI Insurance Ltd at [41] and [42], above n 10.
…That causation involves inductive reasoning, in which conclusions are derived as a matter of probability and may rest on common sense. It does not necessitate a “minute” or “microscopic” analysis.
…AMI, the plaintiff, need not prove that the specific embers that reignited on 10 January came from ELL’s [the defendant] business.
…
AMI, therefore, has proved, on the balance of probabilities, that the introduction of the pine stumps or other vegetation from [ELL] caused the reignition of the fire on 10 January 2013 or the Leggs’ liability for which they otherwise had cover under the policy.
[119] In the present case, the uncontested evidence before me of Mr Cox and Mr Joseph that the outbreak of the Chairlift Fire was caused by the Adventure Park running its flammable chairlift chairs through the Summit Road Fire is difficult to escape. Mr Cowan in his evidence also confirmed this, as did the conclusion which is reached in the FENZ Marleys Hill Report. The post-fire “AFAC Independent Operational Review” Report of July 201636 before the Court also commented at [23]:
From the bottom station [Adventure Park staff] were able to remove a number of chairs but the task was too big to be completed in a timely manner. When it was noticed that the chairs on the chairlift were on fire the Operations Manager instructed the chairlift to be put in reverse and sent the chairs back up into the fire area/top station. Chairs that had caught fire appeared to be dropping hot embers off the chairlift and starting spot fires below the main fires. This line ignition brought the fire lower in the valley into the heavier fuels.”
And:
Another issue was that there was a lot of logging slash from tree felling and pruning operations lying on the ground significantly increasing the potential fuel loading.
Without question this was also graphically shown in evidence, first, in the father and son video of the logging slash taken soon after the Park opened, and then in both the Drew Norris fire video and the YouTube fire video.
[120] I am satisfied that it was the inaction of the Adventure Park in leaving the chairs on the chairlift haul rope until it was too late, and at the same time making the decision
36 This report by the Australasian Fire and Emergency Services Authorities Council Limited described itself as “A review of the management of the Port Hills fires in February 2017.
to continue running the chairlift through the major crowning forest fire that had developed, which caused the initial outbreak of the Chairlift Fire. The chairs and the haul rope were run backwards and forwards through the crowning forest fire towards the top of the chairlift. The lift and its chairs and carriers were passing through the narrow 12 metre corridor between trees engulfed in fire, the resulting extreme fire temperatures igniting the flammable plastic components on the chairs. Running the lift both downhill and uphill with plastic chairs on fire, as I have noted, resulted inevitably in high temperature molten plastic through gravity and the motion of the lift dropping to the ground. There, uncleared and highly flammable pine slash left lying under the lift line, in breach of the Adventure Park’s accepted obligations under the FSM Plan, together with adjacent coconut matting resulted in immediate spot fires, which quickly developed through the fuel available into the major Chairlift Fire outbreak. The inevitable starting point here is inescapable, that the Adventure Park caused the resultant outbreak of fire under the terms of the FRF Act. The only basis upon which, in my view, the Adventure Park could be said to not be responsible for the outbreak of the Chairlift Fire would be if that fire resulting from the burning chairs and the events that followed could be seen as an extraordinary event.
Was this an extraordinary event?
[121] Lord Hoffman in the House of Lords decision in Empress,37 in an attempt to apply the concept of “common sense” in a principled way, articulated the distinction between what he described as the “ordinary” and the “extraordinary”.38
[122] It is true that technically the existence of an “extraordinary event” does not, as I see it, present the Adventure Park with a defence under s 43 of the FRF Act. Instead, it simply describes circumstances where the defendant’s actions or inactions did not cause the outbreak of fire here. Essentially this is because the extraordinary event has superseded the relevant actions/inactions of the Adventure Park here which are said to have caused the loss.
37 Empress, above n 20.
38 Empress, above n 20 at [36]B.
[123] This concept was explained by William Young J in Tucker,39 relating to the unusual factual circumstances in that case, in the following terms:
The concatenation of events which flowed from that and produced the fire would appear to me to have been unusual in the sense that a person who drives a properly maintained and inspected truck and trailer unit would not normally expect thereby to start a roadside fire. This concatenation of events must be categorised (given the speech of Lord Hoffman) as being either:
(a)a “normal fact of life” or “in the general run of things a matter of ordinary occurrence” on the one hand; or
(b)“extraordinary” on the other.
On the exiguous evidence before the Court, I place it in the latter category, i.e. as being extraordinary. In that context, I find it difficult to see how Mr Tucker could be regarded fairly as being “responsible for” the outbreak of fire in issue.
[124] In the Empress case in the House of Lords, Lord Clyde used a slightly different formulation of words in addressing the same question at para [36](g):
In deciding whether some particular factor has played so important a part that any activity by the defendant should be seen as entirely superseded as a causative element, it is not a consideration of the foreseeability, or reasonable foreseeability, of the extraneous factor which seems to me to be appropriate, but rather its unnatural, extraordinary or unusual character.
[125] In Lord Clyde’s statement that I have noted above, the use of the word “superseded”, and also the words “flowed from” in the judgment of William Young J in Tucker noted above, in my view, must mean that, when considering the issue of causation, in order for any causative link to the actions of a defendant such as those of the Adventure Park here to be defeated, the alleged extraordinary event must be something that occurred subsequent to the activity of that defendant that caused the fire. It also then needs to be something which is regarded as so unusual as to be able to be properly characterised as extraordinary in character.
[126]As to this, William Young J in Tucker also held effectively that:
Liability for costs from fires should only be escaped in circumstances where it can be shown that the cause was beyond a person’s control. The onus shifts to the person who was involved in causing the fire to show that they were not the immediate cause of that fire. This needs to be proved on the civil balance of probabilities standard, that is that the mischief under s 43 was not in fact
39 Tucker, above n 6 at [61].
caused by the actions leading to the incurring of costs and was ultimately beyond that person’s control.
On this, concepts such as foreseeability, according to William Young J, play no part in deciding whether a person caused some potential effect.
[127] The upshot of all this is the assessment of causation under s 43, therefore, requires a real enquiry into the relationship between the action taken and its effect. If it could be said that the action was proximate and within the control of a defendant as the causer of that action, then that defendant would be liable for the effect. However, if the causer could show that an action was not the immediate cause of the effect, such as the fire, or was beyond their control, then they should escape liability.
$35,000 here.
[382] The major complaint from the Adventure Park relating to these matters seems to be that the remaining plaintiffs, and IAG in particular, should not be entitled to recovery of these insured loss claim costs because IAG cannot substitute what it paid (in some cases it is said voluntarily by way of cash settlement) for an award of damages which needs to be determined on ordinary principles.
[383] Even accepting this proposition, which from a technical point of view I do, I am satisfied here that Mr Bird’s evidence and his substantial plaintiff Claim Summary Reports for the Remaining Plaintiffs can properly be relied upon. I reach this position, notwithstanding what might be seen as attempts to challenge it by Mr Robb.
[384] I conclude that the Remaining Plaintiffs, including the Dorrance Family Trust, have done sufficient to meet the burden on them to establish their individual losses and to verify that the quantum claimed in each individual case is properly due. Judgment to this effect is to follow.
Betterment
[385] Before me, the parties appeared to accept the position that, before any discussion of betterment was to take place here, the Remaining Plaintiffs and the Flanagans must have properly established their right to reinstatement damages. As to this aspect, as I have noted, the Adventure Park’s initial position was that reinstatement was not reasonable and in fact in the case of the Flanagans, for the reasons they outlined, they did not even intend to reinstate.
[386] In addressing these issues earlier, however, I have reached a decision on this reinstatement question in favour of the Remaining Plaintiffs and the Flanagans.
[387]That said, it is appropriate now that I turn to address the issue of betterment.
[388] On this betterment question, Mr Gallaway submitted before me that, in any event here, a discount for betterment in relation to the increased value of a replacement property is relevant even in the present case where plaintiffs have no realistic choice but to reinstate. This was confirmed by the Court of Appeal in Southland Indoor Leisure Centre Charitable Trust where the Court held “betterment is a tool used [where] the defendant’s negligence forces the plaintiff to replace property with something of greater value.”86
[389] In that Southland Indoor Leisure Centre case an allowance for betterment was made and an appropriate reduction imposed.
[390] Here, the Adventure Park must prove the existence of and quantum of any betterment it alleges against the Remaining Plaintiffs and the Flanagans. Once this has occurred, those plaintiffs are then in a position where they can point towards
86 Invercargill City Council v Southland Indoor Leisure Centre Charitable Trust [2017] NZCA 68 at [151].
factors that count against making any significant deduction for betterment. Ultimately, the question, as to what is an appropriate assessment of damages, is a question of fact.
[391] On betterment issues, it is useful to look first to s 43 of the FRF Act. This provision does not appear to contemplate any deduction for betterment. Section 43(1)(b) states:
(b) Any loss in, or diminution of, value of that property, and any consequential loss or damage not too remote in law, may be recovered from that person (the offender) by the owner of the property.
[392] Loss that is recoverable under s 43 is prescribed as “any loss” and “any consequential loss or damage” that is not too remote in law. The loss claimed in the present case is a loss said to have resulted directly from the Chairlift Fire requiring replacement of the homes and items that were destroyed or substantially damaged.
[393] And, so far as the second and third causes of action in negligence and nuisance advanced by the Remaining Plaintiffs and the Flanagans are concerned, as I see it, the authorities generally do not seem to support the allowance of betterment in circumstances such as the present.
[394] A leading case on betterment is J and B Caldwell Ltd v Logan House Retirement Home Ltd87 which was endorsed in the Court of Appeal in the Southland Indoor Leisure case.
[395] It noted the object of damages in tort is to restore plaintiffs to the position they would have occupied but for the defendant’s wrongdoing. Betterment is used as a tool to achieve that objective where a defendant’s negligence forces a plaintiff to replace property with something of greater value. General principles applying to the assessment of betterment are:
(a)each case has to be dealt with on its own facts;
(b)justice has to be done between the plaintiff and the defendant;
87 J & B Caldwell Ltd v Logan House Retirement Home Ltd [1992] 2 NZLR 99
(c)the plaintiff should not over-recover; and
(d)the defendant must pay to compensate the plaintiff for the inconvenience of incurring a cost earlier than the plaintiff would have anticipated.
[396] Deductions for betterment are to be net of any allowance for any disadvantage associated with the untimely and unavoidable nature of a plaintiff’s investment. Betterment, however, can take the form of savings resulting from deferred spending on replacement or maintenance. It has been recognised by the courts that where there is no second-hand equivalent readily available, plaintiffs are forced to substitute what was lost with something new and, therefore, any deduction for betterment may need to be reduced to take account of any economic cost to the plaintiff of investing in a new for old at a point in time when it would not otherwise have done so. Ultimately, and particularly where it is not possible to quantify betterment precisely, the task of the Court is to use its best endeavours to place a monetary value that is fair.
[397] There are other exceptions to the general approach to betterment which include a situation where the plaintiffs have a need to reinstate or replace items that they would otherwise never had had to replace or where there is a need for plaintiffs to carry out reinstatement in a particular way without any choice or options. A further exception is a plaintiff’s unilateral need to comply with the law, including Local Authority requirements.
[398] It is my view that in the current circumstances these exceptions to betterment apply in large measure.
[399] A first exception is where there is a need for the plaintiffs unilaterally to comply with the law. For example, this is to include the situation prevailing when a common clause in property insurance policies is activated. This type of clause provides that the cover is to include the “extra costs necessary for the restoration to meet with the lawful requirements of government or local bodies”.
[400] There is an accepted exception not to account for betterment where a plaintiff, as a matter of necessity, is obliged to reinstate a house or some other asset in a particular manner in order to comply with imposed requirements or in order to obtain restitution in integrum relating to the use and enjoyment of that plaintiff’s property.
[401] In the present case, I am satisfied this exception applies to those Remaining Plaintiffs and the Flanagans who, as a result of what I have found to be the actions of the Adventure Park, have been required when they or others rebuild their homes, outbuildings, fences and other structures to comply with the requirements of the law such as council compliance and building code requirements.
[402] Further, I am satisfied in this case that generally, reinstatement of the parties’ destroyed and damaged house and property assets in particular is the only way to return these plaintiffs to the same position they enjoyed with regard to the use and enjoyment of their particular properties before the fire.
[403] A further betterment exception applies where plaintiffs have a need to reinstate or replace their property or items that they would not otherwise have had to replace, but for a defendant’s default. This is a further exception which, in my view, applies to a number of the situations before me. It applies to some extent, as I see it, with respect to a number of possessions and house contents, held by the Remaining Plaintiffs and the Flanagans prior to the fires, which they would not reasonably be expected to replace but for that event. As I have noted, issues do arise regarding amounts claimed for some items, but I am satisfied overall that with the awards made in this judgment, no plaintiffs will be receiving what could be described as an inappropriate windfall.
[404] Lastly, a betterment exception exists where plaintiffs need to carry out reinstatement in a particular way without any choice or options on their part. This exception, in my view, will apply here with regard to a number of structure rebuilds for which there is really no option or choice existing for that particular plaintiff. For example:
(a)Houses located on a hillside which, prior to the fire, included retaining walls and other major structural elements were required to be reinstated
on the same building platform and in accordance with what are the now current building compliance regulations;
(b)A destroyed or substantially damaged fence needed to be reinstated along a property boundary;
(c)Driveways and pathways needed to be properly resurfaced;
(d)A possible exception example in this case also included the situation of a significantly underinsured plaintiff, such as Mrs Grace, who had no option to even reinstate what she had before the fire, but instead had no choice but to rebuild a significantly smaller home.
[405] As I have noted earlier, it is for the Adventure Park to prove that betterment has occurred in situations like the present. In support of its betterment argument, the Adventure Park called expert evidence from the valuers Mr Dunbar and Mr Beatson of Telfer Young who were instructed to prepare market valuation reports. It seems, therefore, they understandably adopted a market approach for each valuation they undertook based on a sales comparison approach. The valuers confirmed in evidence that their instructions were simply to undertake that market value assessment and hence they did not use a replacement method of valuation in any case. Mr Dunbar, in particular, confirmed that as his instructions were to prepare a market value this meant that an alternative replacement cost valuation, in his assessment, would not be useful. Both valuers and Mr Dunbar in particular did confirm, however, that neither of them were suggesting that the “improvement value” they had listed for the various homes and outbuildings would be sufficient to rebuild those buildings on the respective properties.
[406] Indeed, it seems that Mr Beatson, who was instructed to prepare a market valuation report for the Flanagan property, in his evidence did accept that a valuation to reinstate those buildings would require a replacement cost approach as the appropriate method but he confirmed this was not his instruction from the Adventure Park. Mr Beatson did, however, agree that the Flanagans’ home was
“effectively a rebuild”.88 He agreed too that to put the Flanagans back into the same position would be a costly exercise, with his assessed market valuation not replacing what was there before. Notwithstanding this, Mr Beatson also accepted in his evidence the rebuild rate for the Flanagan property as claimed as a reasonable one.89
[407] Finally, the Adventure Park called evidence from the loss adjuster, Mr Robb, but he said he was unable to give an opinion on whether the Remaining Plaintiffs’ claims and the Flanagans’ claim were reasonable here.
[408]To summarise Mr Robb’s evidence, as I see it, this included the following:
(a)He accepted that Mr Bird, who he considered to be an experienced and competent loss adjuster, was in a better position than himself to analysis the other loss adjuster’s work on the various insured loss claims.
(b)Generally, Mr Robb was of the view that he had some difficulty in determining whether or not the insured and uninsured losses were reasonable because of what he said was a lack of supporting documents provided to him.
(c)As to accommodation costs, he did not suggest that where these were claimed the expense was not incurred. So far as the evidence relating to Mrs Grace’s $40,000 accommodation allowance is concerned, he concluded that this amount was reasonable. He accepted the evidence too that the amount had been completely used up by the Grace family and that they had to front up with more accommodation costs themselves.
(d)He accepted that so far as re-carpeting the destroyed homes were concerned, a claim for 100 per cent cost of the new carpets was acceptable as purchasing and reinstating second-hand carpets was not appropriate.
88 Notes of Evidence, p 1237, line 15.
89 Notes of Evidence, p 1243, lines 11 – 14.
(e)He acknowledged he had in fact been shown photos of the Grace, Kwons’ and Pflaum’ properties and, having viewed these, he had no argument as to the use of the expression “executive” homes for the Kwon and Pflaum properties.
(f)He accepted the evidence of the valuer Mr Dunbar that the Kwons originally had a 343 square metre home, the Pflaums a 600 square metre home and Mrs Grace a 436 square metre home. He confirmed too he was aware that the Kwons are rebuilding their house, the Pflaums intend to rebuild and Mrs Grace has rebuilt a smaller home.
(g)He confirmed he took no issue with the square metreage rates put to him and accepted by Mr Dunbar as reasonable, and even went so far as to comment that the square metreage rate for Mrs Grace’s rebuild of
$3,000 per square metre was “at the lower end”.90
(h)Finally, it seems from his evidence that Mr Robb may have taken no steps himself to undertake an independent check of the building costs claimed here such as using the Cordell Calculator.91
[409] In conclusion on this betterment issue, considering the factual position in this case and the particular exceptions to the betterment principle I have noted above, I accept that in doing justice here between the parties no deduction for betterment should be made. I am satisfied the Adventure Park has been unable to meet the onus upon it to prove betterment against the remaining plaintiffs and the Flanagans. It fails with respect to the betterment argument. No betterment adjustment is to be made here.
Interest
[410] The remaining plaintiffs and the Flanagans seek interest in this proceeding as outlined in their statement of claim. The Interest on Money Claims Act 2016 relates to claims commenced only after 1 January 2018. Here, the initial statement of claim issued by all plaintiffs in this proceeding, including the Remaining Plaintiffs and the
90 Notes of Evidence, page 1264, line 16; page 1265, lines 27 and 28 – 33.
91 Notes of Evidence, page 1269, lines 6 – 9.
Flanagans, it seems was filed on 30 June 2017. The Interest on Money Claims Act 2016, therefore, does not apply to the interest claim here.
[411] Clause 1 of Schedule 1 of the Interest on Money Claims Act 2016, however, provides that the previous regime under s 87 of the Judicature Act 1908 is to apply.
[412]That s 87(1) provided:
In any proceedings…for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate, not exceeding the prescribed rate, as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.
[413]At all relevant times here the “prescribed rate” was five per cent per annum.
[414] I need to note here too that the power to award interest under s 87 is discretionary and is to be exercised as the justice of the case requires. The general purpose of the power to award interest is to enable the Court properly to compensate successful plaintiffs for their loss. This involves issues of principle including factors such as the need for a defendant which has had the use of money which should have been available to the plaintiff to compensate the plaintiff accordingly. Awards of interest generally are not dependent on proof of either the plaintiff’s loss or the defendant’s gain as it is assumed this has occurred.
[415] In the present case and bearing in mind the principles I have noted above, I am satisfied the Remaining Plaintiffs and the Flanagans are entitled to an award of interest against the Adventure Park with respect to their claims from the date when the events in question occurred. That date, as I see it, was 15 February 2017.
[416] At that date, pre-fire, the Remaining Plaintiffs and the Flanagans were generally living in their undamaged homes and having the benefit of occupying and using their properties and all related assets.
[417] As I see the position, it is a matter of fairness and principle here that this Court should exercise the discretion it has under s 87 and otherwise in favour of making
awards of interest here to the Remaining Plaintiffs and the Flanagans. This is to be at the rate of five per cent per annum from 15 February 2017 to the date of payment of each judgment sum, to compensate them for the delayed payment of their loss. It is my view that without such an interest award plaintiffs here are not properly compensated.
[418] For these reasons an order is now made that the Remaining Plaintiffs and the Flanagans are entitled to a payment of interest on the respective judgment sums awarded to them at the prescribed rate of five per cent per annum with respect to those awards here from 15 February 2017 to the date of final payment respectively of each judgment sum. An order requiring the Adventure Park to make this interest payment is now made.
Judgment
[419] The Remaining Plaintiffs and the Flanagans have largely succeeded in their claim here against the Adventure Park.
[420]Accordingly, I enter judgment against the Adventure Park in favour of:
(a)The Flanagans in the sum of $1,182,764.56 plus interest thereon at 5 per cent per annum from 15 February 2017 to the date these amounts are paid.
(b)Mrs Grace, the sum of $1,948,828.21 plus interest thereon at 5 per cent per annum from 15 February 2017 to the date these amounts are paid.
(c)The Kwons in the sum of $2,253,336.24 together with interest thereon at 5 per cent per annum from 15 February 2017 to the date these amounts are paid.
(d)The Pflaums in the sum of $3,384,475.00 together with interest thereon at 5 per cent per annum from 15 February 2017 to the date these amounts are paid.
(e)Each of the repair costs plaintiff claimants respectively as outlined at para [219] herein as “Claimants” for the amounts specified for each of those plaintiffs as outlined under “Claim Amount” in the paragraph, together with interest thereon at 5 per cent per annum from 15 February 2017 to the date respectively each of these amounts is paid.
(For the avoidance of doubt and by way of example a payment under para (e) above is to include the 9th plaintiffs’ the Dorrance Family Trust claim at $926,064.76 plus interest).
Costs
[421] The Remaining Plaintiffs and the Flanagans have largely succeeded in their claim here against the Adventure Park. In terms of r 14.1 of the High Court Rules I see no reason why they should not be entitled to an award of costs against the Adventure Park in the usual way. Notwithstanding that, at trial I received no detailed submissions on this particular issue of costs.
[422]In light of this, therefore, costs here are reserved.
[423] I encourage counsel for the parties to liaise with a view to endeavouring to resolve the issue of costs between themselves. If counsel and the parties are unable to settle the question of costs then counsel are to file memoranda sequentially which are to be referred to me and in the absence of either party indicating they wish to be heard on the matter I will decide the question of costs based upon the memoranda filed and all the other material before the Court.
...................................................
Gendall J
Solicitors:
DLA Piper New Zealand, Auckland Kennedys, Auckland
Chapman Tripp, Christchurch
Copy to
Craig Stevens Barrister, Wellington Thomas Weston QC, Barrister, Tai Tapu
SCHEDULE A
Complete List of Plaintiffs
CECILE GRACE
First Plaintiff
ALEXANDER DOUG PFLAUM
Second Plaintiff
AMRUT GOVIND
Third Plaintiff
BRENT CAMERON AND ANNIE CAMERON
Fourth Plaintiffs
B KWON
Fifth Plaintiff
MARK BALOGH AND HLS TRUSTEES LIMITED AS TRUSTEES OF THE BALOGH FAMILY TRUST
Sixth Plaintiffs
CORY BEYNON
Seventh Plaintiff
DIVINE CAKES & DESSERTS CHRISTCHURCH LIMITED
Eighth Plaintiff
PAUL JOSEPH DORRANCE AND DAVID PAUL AMODEO AS TRUSTEES OF THE DORRANCE FAMILY TRUST
Ninth Plaintiffs
FABEL MUSIC LIMITED
Tenth Plaintiff
GRAEME MCVICAR AND JOY MCVICAR
Eleventh Plaintiffs
GAVIN BRINDLEY
Twelfth Plaintiff
GREGORY GRAHAM
Thirteenth Plaintiff
HELEN WARD
Fourteenth Plaintiff
IAN HOUGHTON
Fifteenth Plaintiff
JAMES FROST
Seventeenth Plaintiff
JUNG KWON JANG
Eighteenth Plaintiff
KATHARINE EVERTON
Nineteenth Plaintiff
KERRY FRANCIS BRIGGS
Twentieth Plaintiff
DARA BIGWOOD
Twenty-Second Plaintiff
DAVID BAILEY AND SHARON BAILEY
Twenty-Fifth Plaintiffs
GRANT SISSON AND STEPHANIE SISSON
Twenty-Sixth Plaintiffs
THE TRUSTEES OF THE SISSON FAMILY TRUST
Twenty-Sixth (a) Plaintiff
KENNETH MCKENZIE AND DENISE MCKENZIE
Twenty-Seventh Plaintiffs
RICHARD WILHELM AND SUSAN WILHELM
Twenty-Eighth Plaintiffs
ROBIN OAKLEY AND SHIRLEEN OAKLEY
Thirtieth Plaintiffs
SIMON JERARD AND SAMANTHA JERARD
Thirty-First Plaintiffs
TERRENCE POWERS AND KAREN POWERS
Thirty-Second Plaintiffs
ALAN BEUZENBERG AND DEBBIE BEUZENBERG
Thirty-Third Plaintiffs
BARRY PREBBLE
Thirty-Fourth Plaintiff
CHRISTOPHER BAYLEY AND JANINE BAYLEY
Thirty-Fifth Plaintiffs
CHRISTOPHER JOHNSTONE AND KAREN JOHNSTONE
Thirty-Sixth Plaintiffs
THE TRUSTEES OF THE TIROHANGA FAMILY TRUST
Thirty-Sixth (a) Plaintiffs
GRANT POULTNEY AND SUSAN POULTNEY
Thirty-Seventh Plaintiffs
GLEN MENZIES AND TRACEY MENZIES
Thirty-Eighth Plaintiffs
JERRY O’NEILL AND JILL O’NEILL
Thirty-Ninth Plaintiffs
JOSHUA SCOTT AND LINDA JONES
Fortieth Plaintiffs
MICHAEL MILNE AND SACHA MILNE
Forty-First Plaintiffs
PHILLIP CLAUDE AND KATHRYN WARD
Forty-Second Plaintiffs
PAUL DORRANCE
Forty-Third Plaintiff
PETER MORGAN AND MARY BRENNAN
Forty-Fourth Plaintiffs
WARREN FLANAGAN AND VILMA FLANAGAN
Forty-Seventh Plaintiffs
LORRAINE ELDER AND DAVID ELDER
Forty-Eighth Plaintiffs
TRACEY COOK AND CLAUDE COOK
Forty-Ninth Plaintiffs
JOANNE KINLEY AND WAYNE GIBBON
Fiftieth Plaintiffs
NICK THURLEY AND CATHERINE BARENDRECHT
Fifty-First Plaintiffs
NORMAN MATTHEWS
Fifty-Second Plaintiff
REBECCA PARISH, GERRARD DOUBLE AND ANDERSON LLOYD TRUSTEE COMPANY 2013 LIMITED AS TRUSTEES OF THE PARISH AND DOUBLE FAMILY TRUST
Fifty-Fourth Plaintiffs
PERCY BULL
Fifty-Fifth Plaintiff
PETER COUGHLAN
Fifty-Sixth Plaintiff
PHILIP JOHNSTON
Fifty-Seventh Plaintiff
PEER PRITCHARD AND
SONYA ANNE BROOKS AS TRUSTEES OF THE PRITCHARD BROOKS FAMILY TRUST
Fifty-Eighth Plaintiffs
ROBIN OAKLEY AND SHIRLEEN OAKLEY
Fifty-Ninth Plaintiffs
REBECCA PARISH
Sixtieth Plaintiff
ROB VAN WEERD CONSTRUCTION LIMITED
Sixty-First Plaintiff
ROSS BONNINGTON
Sixty-Second Plaintiff
SHONA MOORE
Sixty-Third Plaintiff
STEVEN WILLIAMS
Sixty-Fifth Plaintiff
CHRISTOPHER BAYLEY, JANINE BAYLEY AND DAVID
SHACKLETON AS TRUSTEES OF TE WAIHORA TRUST
Sixty-Seventh Plaintiffs
ANNIE CAMERON AND
BRENT CAMERON AS TRUSTEES OF THE ALBAN FAMILY TRUST
Sixty-Eighth Plaintiffs
ALAN BEUZENBERG AND
DEBBIE BEUZENBERG AS TRUSTEES OF THE BEUZENBERG FAMILY TRUST
Sixty-Ninth Plaintiffs
MONIQUE MENTINK AND LANDSBOROUGH TRUSTEE SERVICES NO. 10 LIMITED AS TRUSTEES OF THE MONIQUE MENTINK FAMILY TRUST
Seventieth Plaintiffs
MIRANDA ANGELIQUE AND
CRAIG NEWBURY AS TRUSTEES OF THE NEWBURY FAMILY TRUST
Seventy-First Plaintiffs
MIRANDA ANGELIQUE AND CRAIG NEWBURY
Seventy-First (a) Plaintiffs
TIMOTHY FOURNIER AND KATE BRACEFIELD
Seventy-Second Plaintiffs
TRUDY ANDERSON
Seventy-Third Plaintiff
VIKKI PFLAUM
Seventy-Fourth Plaintiff
KERRY BRIGGS AND LISA BRIGGS
Seventy-Fifth Plaintiffs
SUZANNE MILLAR AND CHRIS MILLAR
Seventy-Sixth Plaintiffs
SAMANTHA JERARD, SIMON JERARD AND MARK ABOTT AS TRUSTEES OF THE FEDERAL TRUST
Seventy-Seventh Plaintiffs
PAUL STANTON AND CATHERINE STANTON
Seventy-Eighth Plaintiffs
RACHEL CULLENS
Seventy-Ninth Plaintiff
MARK AND KAREN SINCLAIR
Eightieth Plaintiffs
SCHEDULE 1
AMRUT GOVIND
Third Plaintiff
BRENT CAMERON AND ANNIE CAMERON
Fourth Plaintiffs
DIVINE CAKES & DESSERTS CHRISTCHURCH LIMITED
Eighth Plaintiff
GAVIN BRINDLEY
Twelfth Plaintiff
HELEN WARD
Fourteenth Plaintiff
KATHARINE EVERTON
Nineteenth Plaintiff
KERRY FRANCIS BRIGGS
Twentieth Plaintiff
GRANT SISSON AND STEPHANIE SISSON
Twenty-Sixth Plaintiffs
THE TRUSTEES OF THE SISSON FAMILY TRUST
Twenty-Sixth (a) Plaintiff
KENNETH MCKENZIE AND DENISE MCKENZIE
Twenty-Seventh Plaintiffs
ROBIN OAKLEY AND SHIRLEEN OAKLEY
Thirtieth Plaintiffs
SIMON JERARD AND SAMANTHA JERARD
Thirty-First Plaintiffs
BARRY PREBBLE
Thirty-Fourth Plaintiff
CHRISTOPHER BAYLEY AND JANINE BAYLEY
Thirty-Fifth Plaintiffs
JOSHUA SCOTT AND LINDA JONES
Fortieth Plaintiffs
MICHAEL MILNE AND SACHA MILNE
Forty-First Plaintiffs
PHILLIP CLAUDE AND KATHRYN WARD
Forty-Second Plaintiffs
LORRAINE ELDER AND DAVID ELDER
Forty-Eighth Plaintiffs
REBECCA PARISH, GERRARD DOUBLE AND ANDERSON LLOYD TRUSTEE COMPANY 2013 LIMITED AS TRUSTEES OF THE PARISH AND DOUBLE FAMILY TRUST
Fifty-Fourth Plaintiffs
PETER COUGHLAN
Fifty-Sixth Plaintiff
ROBIN OAKLEY AND SHIRLEEN OAKLEY
Fifty-Ninth Plaintiffs
REBECCA PARISH
Sixtieth Plaintiff
ROB VAN WEERD CONSTRUCTION LIMITED
Sixty-First Plaintiff
CHRISTOPHER BAYLEY, JANINE BAYLEY AND DAVID SHACKLETON AS TRUSTEES OF TE WAIHORA TRUST
Sixty-Seventh Plaintiffs
ANNIE CAMERON AND BRENT CAMERON AS TRUSTEES OF THE ALBAN FAMILY TRUST
Sixty-Eighth Plaintiffs
TRUDY ANDERSON
Seventy-Third Plaintiff
KERRY BRIGGS AND LISA BRIGGS
Seventy-Fifth Plaintiffs
SAMANTHA JERARD, SIMON JERARD AND MARK ABOTT AS TRUSTEES OF THE FEDERAL TRUST
Seventy-Seventh Plaintiffs
PAUL STANTON AND CATHERINE STANTON
Seventy-Eighth Plaintiffs
SCHEDULE 2
Alexander Doug Pflaum (the 2nd Plaintiff)
Vikki Pflaum (the 74th Plaintiff)
B Kwon (the 5th Plaintiff)
Jung Kwon Jang (the 18th Plaintiff)
Cecile Grace (the 1st Plaintiff)
David Bailey and Sharon Bailey (the 25th plaintiffs)
Alan Beuzenberg and Debbie Beuzenberg (the 33rd plaintiffs)
Dara Bigwood (the 22nd plaintiff)
Percy Bull (the 55th plaintiff)
Tracey Cook and Claude Cook (the 49th plaintiffs)
Cory Beynon (the 7th plaintiff)
Rachel Cullens (the 79th plaintiff)
Dorrance Family Trust (the 9th Plaintiff)
Fabel Music Limited (the 10th plaintiff)
Graeme McVicar and Joy McVicar (the 11th plaintiffs)
Joanne Kinley and Wayne Gibbon (the 50th plaintiffs)
Ian Houghton (the 15th plaintiff)
Christopher Johnstone and Karen Johnstone (the 36th plaintiffs)
The Trustees of the Tirohanga Family Trust (the 36th(a) plaintiffs)
Suzanne Millar and Chris Millar (the 76th plaintiffs)
Grant Poultney and Susan Poultney (the 37th plaintiffs)
Glen Menzies and Tracey Menzies (the 38th plaintiffs)
Jerry O’Neill and Jill O’Neill (the 39th plaintiffs)
Paul Dorrance (the 43rd plaintiff)
Peter Morgan and Mary Brennan (the 44th plaintiffs)
Nick Thurley and Catherine Barendrecht (the 51st plaintiffs)
Miranda Angelique and Craig Newbury as Trustees of the Newbury Family Trust (the 71st plaintiffs)
Miranda Newbury and Craig Newbury (the 71st(a) plaintiffs)
Norman Matthews (the 52nd plaintiff)
Terrence Powers and Karen Powers (the 32nd plaintiffs)
Peer Pritchard and Sonya Anne Brooks as Trustees of the Pritchard Brooks Family Trust (the 58th plaintiffs)
Ross Bonnington (the 62nd plaintiff)
Charles Moore and Shona Moore (the 63rd plaintiffs)
Mark Sinclair and Karen Sinclair (the 80th plaintiffs)
Steven Williams (the 65th plaintiff)
Alan Beuzenberg and Debbie Beuzenberg as Trustees of the Beuzenberg Family Trust (the 69th plaintiffs)
Monique Mentink and Landsborough Trustee Services (No 10 Limited) as Trustees of the Monique Mentink Family Trust (the 70th plaintiffs) and Ian Houghton as occupier (the 70th plaintiff)
Timothy Fournier and Kate Bracefield (the 72nd plaintiffs)
Richard Wilhelm and Susan Wilhelm (the 28th plaintiffs)
Gregory Graham (the 13th plaintiff)
Mark Balogh and HLS Trustees Limited as trustees of The Balogh Family Trust (the 6th plaintiff)
James Frost (the 17th plaintiff)
Philip Johnston (the 57th plaintiff)
SCHEDULE 3
Warren Flanagan and Vilma Flanagan (the 47th Plaintiffs)
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