Harbourcity Developments Limited v Owen HC Auckland CIV-2006-404-1400

[2007] NZHC 1708

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2006-404-1400

BETWEEN  HARBOURCITY DEVELOPMENTS LIMITED

First Appellant

AND  VIPOND PROPERTIES LIMITED Second Appellant

AND  ELIZABETH JOYCE OWEN Respondent

Hearing:         22 June 2006

Appearances: S O McAnally for the Appellants

J Cox for the Respondent

Judgment:      30 March 2007 at 4.30 pm

JUDGMENT OF FRATER J

This judgment was delivered by Justice Frater on 30 March 2007 at 4.30 pm, pursuant to

r 540(4) of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:   Keegan Alexander P O Box 999 Auckland for the Appellants

Rennie Cox P O Box 6647 Auckland for the Respondent

HARBOURCITY DEVELOPMENTS LTD AND ANOR V OWEN HC AK CIV-2006-404-1400  30 March

2007

[1]      This is an appeal against  the judgment  delivered in the District  Court at North Shore by His Honour Judge Hole on 17 February 2006 in which he declined to strike out claims against the appellants in negligence and nuisance.

Background

[2]      The respondent, Ms Owen, is, and at all material times was, the registered proprietor of a property at 139 Vipond Road, Stanmore Bay, Whangaparoa.   The appellants, Harbourcity Developments Ltd (“Harbourcity”) and Vipond Properties Ltd (“Vipond”) are each property developers.

[3]      On or about 21 October 1996 the Rodney District Council (“the Council”) granted Vipond consent, on an un-notified basis, to subdivide a 2.26 ha block of land, part of which adjoined the respondent’s property, into 32 lots.   Terms and conditions of the consent included the requirement that Lot 29, which gave access to the subdivision from Vipond Road, should vest in the Council as a public road and that a new residential lot (Lot 8), be situated between the respondent’s property and Lot  29.    Other  conditions  were  that  all  engineering  plans  be  submitted  to  the engineer for approval before works commenced, that as built engineering plans be submitted   before   a   compliance   certificate   under   s   224(c)   of  the   Resource Management Act 1991 (the “RMA”) was issued, and that the new road be formed and constructed to the Council’s standards.

[4]      A survey plan to enable the first 11 titles in the subdivision to issue was deposited on 10 September 1998.  This was followed, on 8 October, by a further plan comprising Lot 1, made up of the balance of the lots in the original subdivision and a new Lot 19, which gave access to Vipond Road.  Neither was sought or consented to in the original subdivision consent.

[5]      In April 2001 Vipond and the Council agreed, in the course of an exchange of letters, to the relocation of the road to a position to the south of Lot 29, immediately abutting the respondent’s property.  No formal application was made under s 127 of the RMA to amend the conditions with regard to the position of the access road or to delete Lot 8.  The respondent was unaware of the change and did not consent to it.

[6]      Between May and August  2001  various applications were  made  to  build motels on part of the subdivided land.  The second application, which the respondent was notified about  but did not  object  to, showed the proposed motel straddling Lot 29.

[7]      On 16 December 2001 Vipond transferred possession of the subdivision site, including its interest in the subdivision consent, to Harbourcity.   Four days later amended resource consent  for the motel was granted,  without  objection,  after  a hearing.   It was a condition of that consent that the new road be constructed in accordance with the revised roading plan which the Council had earlier (informally) agreed to.

[8]      Construction of the new road, in the revised position, took place between late

February and April 2002.

[9]      Engineering plans, showing the road “in location”, were approved by the

Council on 19 April 2002.

[10]     On 23 October 2002, in reliance upon the resource consents, Harbourcity applied for permission to subdivide the balance of the land into 33 lots.  Consent was granted on 27 February 2003 subject to the condition, inter alia, that “the proposed new road” meet engineering standards.   In fact, by this stage, it had already been built.

[11]     Thereafter the Council certified pursuant to s 224(c) of the RMA that the conditions of the subdivision had been complied with, and the road vested in it some time in 2004.

[12]     The  current  proceedings,   naming  the  Council  as   first   defendant   and Harbourcity and Vipond as second and third defendants respectively, were issued in the North Shore District Court in late 2003.

[13]     Three causes of action are pleaded:

i)         The first, against the Council, is based in negligence;

ii)        The second, also in negligence, is against the appellants;  and

iii)       The third, in nuisance, is pleaded against all three defendants:

the Council and the appellants.

[14]     The Council is not a party to the strike out application or this appeal.

The first amended statement of claim

[15]     The operative pleading at the time of the District Court hearing was the first amended statement of claim dated 11 May 2005.   The relevant claims, for present purposes, are:

[16]     First, in negligence that:

27.At all material times Vipond and Harbourcity owed a duty of care to the Plaintiff:

27.1     To implement the subdivision consent in accordance with the RMA and the subdivision consent, and

27.2     To consult with and seek the consent of the plaintiff to the change of the position of the road, since the plaintiff was an adjacent  owner  to  the  development,   and  an  adversely affected party.

28.      Vipond and Harbourcity breached their duty to the plaintiff in that they carelessly, unlawfully and negligently:

28.1     Failed to implement the subdivision consent in accordance with the RMA and in accordance with the conditions of the subdivision consent, and

Failed to consult with and seek the consent of the plaintiff to the change in the position of the road.

...

29.As  a result  of  the careless  and  unlawful  actions  of  Vipond  and Harbourcity, and the resulting breach of their duty of care to the Plaintiff, the Plaintiff suffered loss ...

30.The loss suffered by the Plaintiff was reasonably foreseeable and was a direct result of Vipond and Harbourcity’s failure to act in accordance with their duties to her.

[17]     Secondly, in nuisance, that:

33.As  owners  and  occupiers  of  the  subdivision  site,  Vipond  and Harbourcity owed duties to neighbouring property owners including the plaintiff not to carry out activities on the subdivision land which were, or may have been damaging or detrimental to or interfere with the proper  enjoyment  of the land  of their  neighbours’  properties including the plaintiff’s property.

34.      The Defendants have acted in breach of their duties to the Plaintiff.

Particulars:

...

34.2     Without  consent,  with  the  unlawful  permission  of  the Council,   Vipond   or   Harbourcity   constructed   the   road contrary  to  the terms  of  the subdivision  consent  directly adjacent to the Plaintiff’s property and vested it in the Council.

35.The road, and usage of it, constitutes a nuisance to the Plaintiff’s property.

Particulars:

35.1     The  road  exposes  the  Plaintiff’s  property  to  significant adverse  effects,   including  but   not   limited  to;      noise, vibration, visual effects, loss of privacy (including “living court” privacy), fumes, lighting, pedestrian traffic.

35.2     Adverse affects  [sic] resulting from the steep  road batter leading down to the fence on the boundary of the plaintiff’s property including the collection of rubbish against the plaintiff’s  property  and  damage  caused  to  the  plaintiff’s fence boundary  resulting  from  soil  and  metal  which  has piled up at the bottom of the road batter.

35.3     The loss of development potential of the plaintiff’s property.

35.4     The building up of the road and the resulting road batter which is too steep and at variance with Council’s standards and approved drawings has created a drainage problem.

[18]     As  a  result  the  plaintiff  claimed  to  have  suffered  loss  of  not  less  than

$143,018.25 made up as follows:

24.1     Diminution  in  value of  the  property  in terms of the proposed redevelopment on the basis  that  the plaintiff  is  unable  to obtain consent  to  re-develop  as  a  front site so that the building platform is only 8 metres wide

24.2     Alternatively, diminution in value of the property in terms of the proposed redevelopment   on   the   basis   that   the

$120,000.00

plaintiff  is  able  to  obtain  consent  to develop the property as a front site

24.3    The  cost  of   new  plans  for   the  new dwelling proposed for the plaintiff’s site

24.4    Council fees relating to resource consent application

24.5    Surveying     and     engineering     costs associated with new plans for dwelling

Landscaping costs to ameliorate affects of road and attempt to provide some privacy

$  70,000.00

$   7,706.25

$     500.00

$   5,000.00

$   9,812.00

$143,018.25

[19]     In  addition,  the  plaintiffs  claimed  a  further  $35,000  general  damages  in respect of each cause of action.

[20]     The appellants say they are not liable to the respondent in either negligence or nuisance.  In the event however that they are, Vipond seek to be indemnified by Harbourcity.  Harbourcity, in turn, have applied to strike out Vipond’s cross-claim.

Judgment under appeal

[21]      While he seemed to accept that the action in negligence, as pleaded in the first amended statement of claim, could not succeed, Judge Hole was not prepared to strike it out.  He said:

[16]      When the statement of claim is looked at in its totality, it seems clear that  the  main  complaint  of  the  plaintiff  is  that  the  second  and  third defendants (or one of them) constructed a road adjacent  to her  property which has caused her various losses. The main losses claimed related to diminution  in  the  value  of  the  property.   Thus,   whether   or   not  the subdivisional consent conditions were adhered to, the real complaint against the second and third defendants has little to do with them. Rather, it is the construction  of  the  road  which  creates  the  problem.  It  is  a  reasonable inference that the road has been constructed on a piece of land where the zoning does not permit such construction. Significantly, cl 28.6 of the statement of claim states that one of the allegations of negligence is that the road was constructed in an unauthorised location. The provisions of s 23(2) have nothing to do with this allegation. However, the judgment in Chisholm may be pertinent.

[17]      Counsel for the plaintiff suggested that the statement of claim could be amended by including an allegation of a duty upon the second and/or third  defendants  to  construct  the  roading  to  access  the  subdivision  in

accordance with the laws of New Zealand. Whilst this proposal is somewhat bald in its terms, nevertheless it seems to me that it may be possible to draft a tortious allegation pertaining to the construction of the road which in the circumstances of this case relies in part on evidence of a breach of statutory duty.

[18]      It  is  not  for  the Court  to  propose suggested  amendments  to  the statement of claim. This is an obligation imposed on the plaintiff. However, the plaintiff, to a relatively limited extent, has included in the statement of claim an allegation of negligence against the second and/or third defendants which seems to be capable of being converted into a pleading giving rise to a cause of action in favour of the plaintiff against the second and/or third defendants. In these circumstances, the application to strike out the statement of  claim becomes  inappropriate and  the problems  posed  in  the  existing statement of claim should be remedied by amended pleadings.

[22]     And while he also expressed some reservations with regard to the cause of action in nuisance, due to his findings in respect of the negligence claim, the Judge held that:

[21]      It is not necessary for  me to determine these matters now.   The authorities cited in the first part of this judgment establish quite clearly that this is not a case where the statement of claim, or any part of it, should be struck out;  rather, the defects as identified can be cured by fresh pleadings.

Strike out principles

[23]     The strike out application was made under r 209 of the District Court Rules

1992, the relevant part of which provides:

Where a pleading –

(a)       Discloses no reasonable cause of action …

the Court may at any stage of the proceeding, on such terms as it thinks fit, order that the whole or any part of the pleading be struck out.

…

[24]     The principles pertaining to such applications are well settled.  In van Soest v Residual Health Management Unit [2000] 1 NZLR 179 (CA) at [7], Blanchard J, delivering the majority judgment of the Court of Appeal, said:

It is common ground that a claim is not to be struck out unless it [is] so clearly untenable that it could not possibly succeed even after amendment in a manner proposed by the plaintiff, and on the assumption that all facts alleged in the statement of claim can be proved to be true (R Lucas & Son (Nelson Mail) Ltd v O’Brien [1978] 2 NZLR 289 at pp 294 – 295; Takaro

Properties Ltd (in receivership) v Rowling [1978] 2 NZLR 314 at pp 316 –

317; Attorney-General v Prince and Gardner [1998] 1 NZLR 262 at p 267).

The statement of claim must be beyond repair. It must be plain that even if it is reformulated the claim cannot succeed.

[25]     To similar effect see Attorney-General v Prince and Gardner [1998] 1 NZLR

262 (CA) at 267 where the Court of Appeal accepted counsel’s submission that Courts should be very slow to rule on novel categories of duty of care at the strike out stage.

[26]     While generally the Courts will not strike out parts of a pleading where to do so will not dispose of the entire case, this is by no means a hard and fast rule:  see, for example, Auag Resources Ltd v Waihi Mines Ltd [1994] 3 NZLR 571.

The Resource Management Act 1991

[27]     At issue in this appeal are ss 9, 11, 23 and 127 of the RMA, the material parts of which provided, at the relevant time, that:

PART 3 – DUTIES AND RESTRICTIONS UNDER THIS ACT LAND

9        Restrictions on use of land

(1)      No person may use any land in a manner that contravenes a rule in a district plan or proposed district plan unless the activity is—

(a)      Expressly allowed by a resource consent granted by the territorial authority responsible for the plan; ...

...

(4)      In this section, the word “use” in relation to any land means—

(a)      Any use, erection, reconstruction, placement, alteration, extension, removal, or demolition of any structure or part of any structure in, on, under, or over the land; or

...

(c)       Any  destruction  of,  damage  to,  or  disturbance  of,  the habitats of plants or animals in, on, or under the land; or

(d)       Any deposit of any substance in, on, or under the land; or

...

(e)      Any other use of land—

and “may use” has a corresponding meaning.

...

11       Restrictions on subdivision of land

(1)       No person may subdivide land, within the meaning of section 218, unless the subdivision is—

(a)       Expressly allowed by a rule in a district plan and in any relevant proposed district plan or a resource consent, and a survey plan relating to the subdivision has in accordance with Part X—

(i)        Been  deposited by a  District  Land Registrar  or a

Registrar of Deeds; ...

23       Other legal requirements not affected

(1)       Compliance with this Act does not remove the need to comply with all other applicable Acts, regulations, bylaws, and rules of law.

(2)      The duties and restrictions described in this Part shall only be enforceable against any person through the provisions of this Act; and no person shall be liable to any other person for a breach of any such duty or restriction except in accordance with the provisions of this Act.

(3)       Nothing in subsection (2) limits or affects any right of action which any person may have independently of the provisions of this Act.

127      Change or cancellation of consent condition on application by consent holder

(1)       The holder of a resource consent may apply to the consent authority for the change or cancellation of any condition of that consent (other than any condition as to the duration of the consent)—

(a)       At any time specified for that purpose in the consent; or

(b)       Whether or not the consent allows the holder to do so, at any time on the grounds that a change in circumstances has caused the condition to become inappropriate or unnecessary.

...

(3)       Sections 88 to 121 shall apply, with all necessary modifications, to any application under subsection (1) as if the application were for a resource consent, except that section 93 (notification of applications) shall not apply if the consent authority is satisfied—

(a)       That either—

(i)        The adverse effect  (other  than  any  effect  on  any person whose written approval has been obtained in accordance  with  paragraph  (b))  of  the  activity  after  any

change or cancellation of the condition will continue to be minor; or

(ii)       The degree of adverse effect (other than any effect on any person whose written approval has been obtained in accordance with paragraph (b)) of the activity is likely to be unchanged or decreased relationship of any such change or cancellation; and

(b)       That written approval has been obtained from every person (including any person who made a submission on the original application who may be affected by the change or cancellation) who, in the opinion of the authority, may be adversely affected by the granting of the change or cancellation, unless in the authority’s opinion it is unreasonable in all the circumstances to obtain every such approval.

The negligence claim

Submissions

[28]     The appellants gave three reasons why the cause of action against them in negligence is untenable and cannot possibly succeed:

•    The common law does not recognise any duties of the kind alleged.

•   If either appellant constructed the road otherwise than in accordance with the terms of the subdivision consent  they would  be  in  breach of the restriction created by s 11(1) of the RMA.  Pursuant to s 23(2) of the Act those duties and restrictions are only enforceable through the provisions of the RMA.

•   The only obligation to consult  imposed by the RMA is in Part 6 and relates to consent authorities.   The common law does not otherwise acknowledge such a duty.

[29]     They say that the other cause of action alluded to by the judge – that the construction of the road was not permitted by the zoning – is tantamount to arguing that the road was not constructed in accordance with the relevant District Plan – in which case ss 11(1) and 23(2) still apply.

[30]     In response, the respondent:

•   Pointed to ss 23(1) and 23(3) which expressly retain a plaintiff’s right to pursue remedies independently of the RMA, including causes of action based in negligence.

•   Conceded that s 23(2) precludes her from claiming in respect of alleged breaches of duties or restrictions under Part 3 of the RMA.

•   Acknowledged the appellants’ point in relation to the limitation on the obligation to consult, and in her proposed second amended statement of claim properly abandoned the previously claimed duties in that regard.

•   Reformulated her negligence claim against the appellants in a way which, she says, is not based upon a breach of s 11(1).

[31]     In her proposed second amended statement  of claim the respondent  now claims that the appellants owed her a duty of care to construct the road:

27.1     ... in a location authorised by the relevant authority and in accordance with the relevant legislation in force at the time; and

27.2     ... the engineering plans approved by the [Council] ...

[32]     She alleges that, in breach of these duties, the appellants:

28.      ... carelessly, unlawfully and negligently:

28.1     Failed to construct the public road ... in a location authorised by the relevant local authority, or in accordance with the relevant legislation in force at the time.

28.2     Constructed the road in an unauthorised location next to the

Plaintiff’s property ...

28.3     ... applied for certificates under section 223 RMA in breach of that section.

...

28.3.2  Knowing the actual terms on which the subdivision consent had been granted ... nevertheless authorised the preparation of plans showing configurations different  from  those  specified  in  the  subdivision

consent to be prepared, and submitted these non complying plans to the Council for approval ...

28.4     ...  were issued  certificates  under  section  224(c)  RMA  in breach of that section and the express conditions of the subdivision consent.

28.4.1  ... made arrangements to seek approval under section

224(c) knowing that the requirements of that section and the requirements of the subdivision consent had not been met because no formal approval had been given for the position of the road to be moved.

...

28.5     Implemented the subdivision consent in stages.   The RMA requires a consent  holder to develop and use its  land in accordance with the terms of the consent.   The subdivision consent made no provision for the subdivision to be carried out in stages, or for the balance lot to be created.

28.6     Failed  to  properly  apply  under  the  RMA  for  consent  to change the road’s location under section 127 RMA.

28.7     Implemented the subdivision consent in breach of its express terms and conditions.

28.8     Commenced  construction  of  the  road  before  a  written building consent was issued.

28.9     Failed to construct the public road in accordance with the engineering plans approved by the first defendant, ...

Discussion

[33]     Although the  primary  focus  of counsels’  submissions  with  regard  to  the negligence claim was on the application of s 23 of the RMA, it is appropriate to start by looking at the position at common law.

[34]     It is well settled in the line of cases culminating in Rolls Royce New Zealand Ltd  v  Carter  Holt  Harvey  Ltd  [2005] 1 NZLR 324 and Attorney-General  v Body Corporate  200200  [2007] 1 NZLR 95 (“Sacramento”)  that  the  test  to  be applied in this country for determining whether a duty of care exists is whether, in all the circumstances, it is just and reasonable to impose it.  That in turn, involves two broad fields of enquiry:  first the proximity or relationship between the parties and secondly, any wider policy considerations bearing on the issue.

[35]   The inquiry into proximity involves more than a simple question of foreseeability;   it is concerned more generally with the nature of the relationship between the parties and necessarily involves consideration of the following factors: see Rolls Royce [59]-[65] and Sacramento [37]:

i)        Whether  duties  of  care  have  been  imposed  in  analogous situations;

ii)       The vulnerability of the plaintiff and the potential burden on the defendant – Relevant to this is whether other remedies are available to the plaintiff;

iii)      The nature of the loss – The Courts are more likely to find proximity where there is a risk of property damage than where the loss is purely economic;

iv)      The   statutory   or   contractual   background   defining   the relationship between the parties.

[36]     In my view all these factors weigh against the existence of a common law duty of care owed by the appellants to the respondent in this case.

[37]     The claimed duties, if they exist at all, arise in the context of the RMA.

[38]     There is ample authority addressing the nature and extent of duties owed by local or territorial authorities under the RMA, or its predecessor, the Town and Country Planning Act 1953, to people applying for consents or permission:  see Port Underwood Forests Limited v Marlborough County Council [1982] 1 NZLR 343 (HC), Morrison v Upper Hutt City Council [1998] 2 NZLR 331 and, very recently, Bella Vista Resort Limited and Anor v Western Bay of Plenty District Council [2007] NZCA.  There is also authority concerning the duties which local authorities owe to neighbours whose amenities should reasonably be foreseen to be closely and directly affected by the grant of consent:   Craig v East Coast Bays City Council [1986] 1

NZLR 99 (CA).

[39]     But Mr Cox did not  point to  any analogous case where an applicant  for resource consent, or any other consents or approvals, as distinct from the authority tasked with statutory responsibility for making the decision, has been held to owe a duty to a neighbour who is adversely affected by it.   Nor did he explain how the appellants’  alleged  negligence  caused  the  respondent  loss.     Although  he  has attempted to re-formulate the duty, essentially it remains a duty to implement the subdivision in accordance with the resource consent and requirements of the RMA. However, responsibility for compliance with the statutory provisions lies not with the applicant for or holder of the consent but with the local authority.

[40]     In his judgment in Bella Vista at [25] Robertson J had this to say about the

RMA, and the function and responsibilities of the consent authority within it:

I am satisfied that the proper conceptualisation of the statutory duty in the present case is that a consent authority must act within its power to issue consents in conformity with the purposes of the Act, namely the promotion of the sustainable management of natural and physical resources:  s 5(1).  In assessing  sustainable  management,  a  consent  authority  is  directed  to consider the need of communities to provide for their social, economic and cultural  wellbeing  as  well  as  environmental  protection:    s  5(2).    This direction does not mean that consent authorities are necessarily to be liable for an individual’s economic loss.  The Privy Council in McGuire v Hastings District Council [2002] 1 NZLR 477 at [21] held that the true interpretation of s 5 does not allow the definition of sustainable management to be broken up into its component parts. The underlying purpose of the consent process is to provide a system whereby proposed activities can be assessed in terms of their impact on the environment and their sustainability. It does not require an assessment of the economic wellbeing of individual applicants, or subsequent purchasers.

[41]     If the consent authority which makes critical decisions under the RMA is not necessarily under a duty to either an applicant or subsequent purchaser, it is fanciful to suggest that an applicant, acting on those decisions, if unlawful, should thereby be held liable for the economic loss suffered by a landowner affected by them.

[42]     The only relevant obligation imposed on the appellant under the RMA was to undertake the subdivision in accordance with the District Plan and resource consent, as  required  by  s  11.    The  other  duties  proposed  by the  respondent  are  simply situational duties owing from the original central one:  see Sacramento [43]-[46].

[43]     The  placement  of  the  road  was  governed  by  the  terms  of  the  resource consent.  The basic reason it is said to be built in an unauthorised location is because the  subdivision  consent  did  not  permit  it  and  the  zoning  disallowed  it.    If  a subdivision consent had given the go ahead to the construction of the road adjacent to the respondent’s property, it would not have been contrary to s 11(1).  Similarly, the new allegations that the subdivision was carried out in stages, that the appellant did not apply for consent to vary the terms of the original consent and that the road was  constructed  contrary  to  the  approved  engineering  plans  and  before  written consent was issued, are all part and parcel of the general complaint, and therefore caught by the operation of s 23(2).

[44]     The  respondent  could  have  followed  the  course  taken  by  the  adversely affected neighbours in Troughton & Ors v Western Bay of Plenty District Council HC TAU CIV-2003-470-238 18 February 2004 and applied for judicial review of the Council’s decisions before the road was built – but did not.  However, she does still have and intends to pursue her claim against the Council.

[45]     The respondent has failed to establish that the appellants owed her a common law duty of care.   It follows that her claims against them in negligence cannot be sustained.

Nuisance

Submissions

[46]     The appellants submit that the cause of action in nuisance, as pleaded, is untenable because:

•    The common law does not impose the duties alleged by the respondent;

•   The only duty or restriction when subdividing is a statutory one created by s 11(1) of the RMA.    Breaches are only  enforceable  through the provisions of the Act by virtue of s 23(2);

•   The construction of the road upon the land is a reasonable user of that land;

•   Construction of the road, in itself, has not created any nuisance;   Any nuisance suffered is a result of the effect of the use of the road, and neither appellant has occupation or control of it because upon completion the road vested in the Council;

•   Furthermore, there is no allegation of recoverable physical damage.  The claim is for diminution in the value of the property on the basis that the respondent now lives on a corner section rather than a front one.

[47]     In response, the respondent says:

•   The cause of action in nuisance is a common law claim;  it does not rely upon the RMA;

•   She does not claim that the construction of the road simpliciter  is an unreasonable use of the adjoining land.   Rather the nuisance claim is based upon the physical damage caused to her property and her inability to develop it as a result of the construction of the road.  To emphasise the point she proposes that the particulars of the nuisance in para 35.1 of the first amended statement of claim be amended and expanded to say:

35.1     The road due to its excessively steep batter and height above the Plaintiff’s property, which is a result of the road’s construction contrary to the approved engineering drawings   ...   exposes    the   Plaintiff’s    property   to significant adverse effects, including but not limited to; noise, vibration, visual effects, loss of privacy (including “living   court”   privacy),   fumes,   lighting,   pedestrian traffic.

35.2     Adverse affects [sic] resulting from the unauthorised and excessively steep road batter leading down to the fence on the boundary of the Plaintiff’s property, which has caused soil metal and rubbish to damage the Plaintiff'’s boundary fence so severely that it requires total reinstatement.

35.3     The building  platform on  the Plaintiff’s  property  has been reduced from a width of 15 metres to 8 metres as a

result of the construction of the road which makes the Plaintiff’s property a corner site. The Plaintiff can no longer construct the new dwelling on the property which was planned due to the significant reduction in the available building platform.

35.4     The Plaintiff’s property is prone to flooding caused by water being directed onto the Plaintiff’s property due to the construction of the road contrary to the approved engineering drawings and specifically as a result of the excessive road  batter  and  the failure to  construct  the drainage on the northern side of the road in accordance with the approved drawings ...

•   The fact that her property is worth less as a result of the nuisance is a consequence of it, not the basis for the claim;

•   Vipond created the nuisance by seeking Council approval to change the original location of the road without following the statutory procedures or requirements;

•   Although Harbourcity took possession of the land on 16 December 2001, ownership  did  not  change  until  the  registration  of  the  transfer  from Vipond to  Harbourcity on 9 July 2002.   The road was built  between February and  April  2002,  when  Vipond  retained  control as  the  legal owner;

•   Harbourcity  is  liable  because  it  adopted the  nuisance  commenced  by Vipond by adopting an erroneous consent or failing to remedy the discrepancies surrounding the consent after it became aware that such discrepancies existed.    Alternatively, as it constructed the road, Harbourcity commenced the nuisance and is therefore strictly liable.

Legal principles

[48]     The relevant general principles of the law of private nuisance can be stated, for present purposes, as follows:  see Todd (ed) The Law of Torts in New Zealand (4ed) 10.2.01:

•   a private nuisance is an unreasonable interference with a person’s right to the use or enjoyment of an interest in land;

•   the  tort  provides  a  remedy  in  respect  of  indirect  or  consequential interference with land;

•   to be actionable the interference must cause either “injury to the property” (i.e.  physical damage)  or  “sensible  personal  discomfort”:    St  Helen’s Smelting Co v Tipping [1865] 11 HLC 642 at 650;

•    in either case the damage caused must be “material or substantial” and not

“merely trivial”:  Hancock v Williams HC NWP AP 18/97 26 November

1997 Robertson J;

•    it must also be ongoing;

•   generally  legal  liability  for  the  nuisance  rests  with  the  person  in “possession and control of the land from which the nuisance proceeds”: Sedleigh-Denfield v O’Callaghan [1940] AC 880 at 903 (HL).

Discussion

[49]     The focus of the Court’s enquiry in this case is threefold:

i)         the nature and effect of the activity complained about;

ii)        whether that constituted an actionable nuisance, and, if it does iii)     whether either appellant can be held liable for it.

[50]     The respondent’s claims can be divided into two distinct categories:

i)        those alleging physical damage to her land or structures on it: paras 35.2 and 35.4 of the proposed second amended statement of claim;  and

ii)        those bearing on use and enjoyment:  paras 35.1 and 35.3.

[51]     The claims in respect of physical damage can be dealt with readily.  There is no dispute that, if as a result of the way the road was constructed, floodwaters and/or unwanted  materials have flowed on to the respondent’s land causing  it  physical damage, that could constitute a nuisance.  Whether or not the road was authorised by a resource consent  is irrelevant:   Hawkes Bay Protein Ltd v Davidson [2003] 1

NZLR 536 [19]. A resource consent does not necessarily extinguish private rights created by the use of the consent: Todd 10.2.08 (3) at 425, footnote 253.

[52]     The  remaining  claims  of  intangible  interference  with  the  respondent’s

“comfort and convenience” are more problematic.

[53]     The test in this regard is:

simply whether a reasonable person, living or working in the particular area, would regard the interference as unacceptable:

Bank of New Zealand v Greenwood [1984] 1 NZLR 525 at 531.

[54]     On this test, it is doubtful whether “noises, smells, fumes, vibration” and the like coming from vehicles on the road would constitute interference which a reasonable person,  living  in  the  area  (which  is  or  was  in  the  process  of being developed) would find unreasonable.  Indeed, one would expect traffic to be heavier on Vipond Road than on the cul-de-sac which is the subject of the present dispute. All people living in residential or semi-residential areas have to learn to live with and accommodate the noise,  fumes and vibrations and loss of privacy which are an inevitable consequence of vehicular traffic.

[55]     Furthermore, there is nothing to indicate how this claim can arise as a result of the way in which the road was constructed.  The complaint can only be about the use of the land as a road.   But as Chambers J remarked in Chisholm v Auckland City Council [2002] NZRMA 362 at 395, albeit in the context of negligence:

... Landowners frequently use their land in ways which can cause financial detriment to their neighbours.   They might build a house which blocks a neighbour’s view.  They might build a shop in direct competition with their

neighbour’s shop.   The law of negligence provides no protection in those circumstances.

[56]     Neither does the law of nuisance.

[57]     For both these reasons this claim cannot stand.

[58]     The last, and most significant of the respondent’s nuisance claims concerns the alleged diminution in the value of her property as a result of the reduction and the size of the allowable building platform because the section is now a corner, rather than a front, site.

[59]     That the respondent’s ability to use and enjoy her land has been affected by the construction of the road is evident;  whether it is properly covered by the tort of nuisance is not.

[60]     Again, essentially the claim is that a road has been constructed on the land.

[61]     To be actionable in nuisance the interference with a plaintiff’s enjoyment of land must generally arise from something offensive emanating from the defendant’s land to the plaintiff’s land:  Hunter v Canary Wharf Ltd at 685 per Lord Goff.   In Bank of New Zealand v Greenwood the glass roof of a veranda was held to create a nuisance by reflecting sunlight  into the windows of neighbouring  buildings.    In Varnier v Vector Energy Ltd [2004] NZRMA 193 the alleged nuisance concerned the emission from an overhead electricity transmission line of electromagnetic fields said to adversely affect the health of occupiers of neighbouring land.  In the absence of the necessary link between an activity on the adjoining  land  and that  of the plaintiff, the claim particularised in para 35.3 must also fail.

[62]     The final issue then is whether either appellant can be liable for the physical damage to the respondent’s property brought about by the way in which the road has been constructed.

[63]     On   the   Sedleigh-Denfield   v   O’Callaghan   test noted at [48] above, responsibility for any ongoing nuisance, if established, must rest with the Council, as

the current owner of the road, i.e. the body in possession and control of the land from which the alleged nuisance proceeds.

[64]     But that is not necessarily the end of the matter.  There is authority for also holding  the  creators of the  nuisance  liable.    The  learned  authors  of  Clerk  and Lindsell on Torts (19ed) 2006 20-51 state the position boldly:

The person liable for a nuisance is the actual wrongdoer, whether or not he is in occupation of the land ... the person who originally created the nuisance remains liable for all the damage flowing from its continuance, even though by reason of his not being in possession of the premises he is unable to prevent  their  continuance.    “If  a  wrongdoer  conveys  his  wrong  over  to another whereby he puts it out of his power to redress it, he ought to answer for it”.   Accordingly, he remains liable even if he has sold or leased the building.

[65]     On this authority it is possible that Harbourcity, which built the road, could be held liable.  I therefore decline to strike out the remaining claims against it.

[66]     Vipond’s  position  is  different.    Mr  Cox  submitted  that  they  created  the nuisance by seeking Council’s approval to change the original position of the road to its current position without following statutory procedures or requirements.  But that is not the nuisance.  The actionable nuisance can only relate to the way in which the road was constructed.  As already noted, any complaint about the process by which consent  was  obtained  to  construct  it  in  the  position  that  it  was,  can  only  be addressed, if at all, in the context of the RMA legislation.

[67]     The  claims  under  para  35.2  and  35.4  against  Vipond  are  struck  out accordingly.

Result

[68]     The appeal is allowed to the extent that the claims against both appellants in negligence are struck out, as are all claims against Vipond in nuisance and those particularised in paras 35.1 and 35.3 of the proposed second amended statement of claim against Harbourcity.

[69]     This matter is remitted to the District Court for the settlement conference which,  I  understand,  has  been  deferred  pending  resolution  of the  appeal,  to  be convened.

Costs

[70]     The appellants, having been largely successful on appeal, are entitled to an order for costs in their favour. These were agreed to be on scale 2B.

[71]     If counsel are unable to  agree upon quantum,  memoranda addressing the issue are to be filed by 16 April 2007.

M A Frater J