Jacobs v Waikato District Council
[2015] NZHC 1372
•17 June 2015
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV 2013-419-887 [2015] NZHC 1372
BETWEEN DONALD CLIFTON JACOBS
Appellant
AND
WAIKATO DISTRICT COUNCIL Respondent
Hearing: 4 and 12 June 2015 Counsel:
C T Gudsell QC and S Lu for Appellant
P Moodley for RespondentJudgment:
17 June 2015
JUDGMENT OF HEATH J
This judgment was delivered by me on 17 June 2015 at 4.00pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Anthony J Nolan, Hamilton Brookfields, Auckland Counsel:
C T Gudsell QC, Hamilton
JACOBS v WAIKATO DISTRICT COUNCIL [2015] NZHC 1372 [17 June 2015]
Introduction
[1] Waikato District Council (the Council) sued Mr Jacobs in the District Court at Hamilton for arrears of rates. While Mr Jacobs agreed that a sum of $18,307.33 was owing, he brought a counterclaim in an endeavour to extinguish or reduce the Council’s claim. Both claim and counterclaim were heard by Judge Glen Marshall, on 13 June 2013. In a judgment delivered on 19 September 2013,1 the claim succeeded but the counterclaim was dismissed.
[2] In the District Court, Mr Jacobs had contended that the Council was wrongfully discharging storm water on to his property. He sued the Council for committing the tort of private nuisance, claiming damages for an alleged loss of rental of $124,800. Mr Jacobs appeals against dismissal of his counterclaim. He does not challenge the correctness of the judgment for arrears of rates.
[3] In determining the claim, the Judge took the view that “the collection by the Council of storm water into a drainage works [had not] caused material or substantial physical damage” to Mr Jacobs’ property.2 It is agreed that proof of material damage (in contrast to something that might be regarded as de minimis) must be established as an element of the tort.3
[4] Initially, the appeal was set down for hearing on 4 June 2015. It was adjourned until 12 June because the Council advanced additional grounds on which it wished to support the judgment. Although they had also been argued in the District Court, I gave time for counsel for Mr Jacobs to respond fully to those points.
The appeal was heard on 12 June 2015.
1 Waikato District Council v Jacobs DC Hamilton CIV-2012-024-126, 19 September 2013 (Judge
Glen Marshall).
2 Ibid, at para [49].
3 See paras [13] and [14] below.
Background4
[5] The dispute concerns a property in Ngaruawahia. In 1988, that (and other contiguous or nearby) property was held by the Crown, for railway purposes. Three easements in gross were granted in favour of the Ngaruawahia Borough Council (one of the Council’s predecessors) to enable water to be conveyed over parts of the property. Although the precise date on which these easements were granted is unclear, it is plain that when Mr Jacobs took title to the property in 1996 he did so subject to the Council’s rights to convey water over those three easements. The easements are marked A, B and C respectively on the title.
[6] In 1991, the Crown sold part of the land to Eagle Exports Ltd (Eagle). The area sold was 6.3504 hectares. At that time, Eagle intended to subdivide the property. On 30 October 1991, Eagle agreed to sell an area comprising 6350 square metres of the property to the Council. The purchase price was to be fixed by reference to a formula set out in cl 14.0 of the agreement for sale and purchase. As part of the contractual arrangements, the Council agreed (among other things) to complete “stop banks to prevent overflow from the property … onto the adjoining properties” of a specified dimension and to “divert all storm water from” a specific
outlet to prevent “any run off of storm water from that outlet” on to another lot.5
Times within which these obligations were to be performed were stipulated in the agreement.
[7] The purpose for which the Council agreed to buy this part of the land was to construct works to enable storm water to be discharged into an area that included (but also went beyond) Easement C. In other words, the parties contemplated that storm water would be discharged over parts of the land that were not included in any of the three easements.
[8] The Council undertook the drainage works in 1993, before its agreement with
Eagle had settled. Among other things, the Council installed a new manhole, new pipe work, and a new chamber to move storm water to the lower land and to prevent
4 I acknowledge the summary contained in the District Court judgment on which I have drawn substantially: Waikato District Council v Jacobs DC Hamilton CIV-2012-024-126, 19 September
2013, at paras [6]–[17].
5 Clauses 15.1 and 15.2 of the Agreement for Sale and Purchase.
bank erosion. As expected, some of those works were undertaken on land that fall outside of the easements. For example, manholes in those other locations are depicted in photographs produced by the Council. The Council did not complete the other works that it had agreed to undertake; for example, construction of the “stop banks”.6
[9] In August 1996, the Council registered a caveat against the property to protect its interest under the agreement for sale and purchase. However, Eagle’s mortgagee, Westpac Banking Corporation, had commenced mortgagee sale proceedings. It sold the property to Mr Jacobs, whose interest as proprietor was registered in November 1996. As a result, the caveat was subsequently removed.
[10] In buying the property at mortgagee sale, Mr Jacobs did not assume any obligations under the agreement between Eagle and the Council. That was at an end. Mr Jacobs gave evidence that he acquired the property without knowledge of the full extent of the drainage works.
[11] The legal position, as at the time Mr Jacobs took title to the property was:
(a) The Council had, with the agreement of Mr Jacobs’ predecessor in title, constructed works on the land for the purpose of drainage and discharge of storm water.
(b)The Council had the right to discharge storm water on the areas comprised in Easements A, B and C.
(c) As against Mr Jacobs, the Council had no contractual right to discharge storm water over any other part of the land.
[12] Since he acquired the property, Mr Jacobs has consistently complained of flooding on his land in the area of the drainage work. That is what prompted him to refuse to pay rates. Mr Jacobs saw that as the only means by which he could seek
redress from the Council.
6 See para [6] above.
Legal principles
[13] At common law, a private nuisance is one which interferes with a person’s use or enjoyment of land, or some right connected with it. It is treated as a violation of that person’s private rights, rather than one against rights held in common with all members of the public. The basis of responsibility is that a defendant has possession and control of land from which a nuisance emanates, typically inflicting physical
damage on land.7
[14] There are essential elements for establishing private nuisance:8
(a) There must be relevant physical damage to the subject property; and
(b) The damage must emanate from another property; and
(c) The damage must be material.
[15] The issue on which Judge Marshall determined the proceeding against Mr
Jacobs was the absence of physical damage that was not “material or substantial”.9
The District Court judgment
[16] The District Court Judge heard evidence from Mr Jacobs, Mr Tizard, a registered valuer, and Mr Larsen, a civil engineer who is employed by the Council as its Operations Manager. Judge Marshall found that:
(a) In the area of Easement C, there was a natural point of discharge of water from higher ground.10
(b)The Council carried out drainage works in about 1993 with the expectation that it would acquire an area of land comprising Easement
C as a drainage reserve.11
7 Generally, see Wu v Body Corporate 366611 [2015] 1 NZLR 215 (SC) at [122]–[131]. See also
Laws NZ, Nuisance at para 5.
8 Laws NZ, Nuisance at para 6.
9 Waikato District Council v Jacobs DC Hamilton CIV-2012-024-126, 19 September 2013, at paras [46] and [47], citing Laws NZ, Nuisance at para 6.
10 Ibid, at para [34].
(c) The drainage works in the area of Easement C mitigated erosion of the embankment.12
(d)There was no evidence of any increase in storm water flow occurring before the works commenced, as compared with after the works were completed in 1993. The only difference is that the storm water is now controlled by drainage works, rather than flowing naturally from higher ground.13
(e) The drainage works carried out in 1993 were (and remain)
substantially outside the defined boundaries of Easement C.14
[17] After addressing the elements of private nuisance, Judge Marshall found that relevant material damage had not been proved. He said:15
[47] … there is no evidence that any damage caused to Mr Jacobs’ land as a result of the drainage works is any greater than it would have been prior to the drainage works being completed in 1993. I have accepted that the depression on Mr Jacobs’ land in the area affected by easement C is a natural collection point for the discharge of storm water which would naturally flow onto his property. I further accepted that pre 1993 erosion as a result of that storm water naturally draining onto his land was occurring.
[48] The drainage works carried out by the Council in 1993 collected the storm water into a series of drains, albeit outside the area delineated in easement C. This had the effect of alleviating erosion issues. There is no evidence that ponding issues that had subsequently been highlighted by Mr Jacobs are any worse than those that existed prior to the drainage works being completed in 1993. There is evidence of ponding by him but that may well have existed prior to 1993, particularly with the effects of erosion.
[49] As a consequence, Mr Jacobs has not satisfied me that the collection by the Council of storm water into a drainage works has caused material or substantial physical damage to his property. It may well be the position that in times of high rainfall there has always been ponding issues on the affected area, both post and pre 1993.
[50] The only evidence that I have and accept is that due to drainage works being carried out in 1993, erosion of the embankment is no longer an issue. This would seem to indicate some slight improvement rather than substantial or material physical damage to that area of Mr Jacobs’ property.
11 Ibid, at para [35].
12 Ibid, at para [36].
13 Ibid, at para [37].
14 Ibid, at para [38].
Analysis
[18] I shall approach the appeal on the basis of the pleaded cause of action in nuisance, even though (like Judge Marshall) I consider it is more likely that any claim would lie in trespass.16
[19] Evidence of material or substantial damage to the property is sparse. It consists of broad allegations made by Mr Jacobs, without the benefit of supporting expert evidence. Often, in a case like this, damages will be assessed by reference to any diminution in value of the land.17 In this case, Mr Jacobs sought damages “for
wrongful use”, in reliance on Roberts v Rodney District Council (No 2).18 The
distinction drawn by Barker J in that case was between cost of reinstatement after suffering actual damage or, where that was not possible, diminution in value of the land (on the one hand) and a claim for an amount that should reasonably be paid for the wrongful use.19
[20] In this case, “wrongful use”, in the form of the discharge of storm water, was said to have “caused [Mr Jacobs’] land [to become] unusable and resulted in [him] losing his tenant”. Loss of rental of $150 per week for 16 years was claimed, making up the amount sought of $124,800.
[21] In giving particulars of the damages sought, counsel for Mr Jacobs referred also to a “substantial advantage” that he submitted the Council had gained “out of its wrongful use” of Mr Jacobs’ land. However, conceptually it is necessary to separate the notions of loss caused to a plaintiff as a result of a defendant’s actions (on the one hand) and the financial gain to a defendant (on the other). In this case, it is only the former that is relevant in determining whether damage has occurred.
[22] In his evidence in chief (in the form of a “will say” statement confirmed on
oath) Mr Jacobs referred to the damage that he asserted had occurred. He said:
16 That is a view that was taken by Judge Marshall in the District Court, in reliance on Nobilo v Waitemata County [1961] NZLR 1064 (SC), at 1067–1068 and Mikitasov v Collins (No 3) HC Whangarei CIV-2008-027-210, 27 November 2009 (Courtney J).
17 Generally, see Maori Trustee v Clark [1984] 1 NZLR 578 (CA) and Maori Trustee v Rogross
Farms Ltd [1994] 3 NZLR 410 (CA), for a discussion of relevant principles.
18 Roberts v Rodney District Council (No. 2) [2001] 2 NZLR 402 (HC).
8.The ponding of stormwater and flooding of my land has caused substantial damages to me:
(a) Substantial volume of various types of street rubbish has been piped onto my land;
(b) Commercially it has rendered my land unusable;
(c) I had a rural lease cancelled on the basis that when it floods it caused damage to the livestock belonging to my tenant;
(d) Each time there is substantial rain there is ponding about 30 to 40 cm deep.
(e) the farmer (tenant) was not prepared to put his pregnant cows on the land because should they calve then the calves could drown. I was also unable to use my land for grazing;
(f) I am sometimes able to use the land for grazing in the summer time but not in the winter or spring which grazing of the land would be most beneficial; and
(g) It has caused me very high level of stress not being able to resolve the flooding issue and unable to resolve this matter satisfactorily with Plaintiff.
[23] Leaving to one side the question whether the approach taken by Mr Jacobs to the assessment of damages was correct, I am not satisfied that the evidence of Mr Jacobs goes far enough to demonstrate that relevant parts of the land had been rendered “unusable”. Mr Jacobs did not provide any expert (or other corroborative) evidence to support that allegation. The proposition is insupportable on the evidence before the District Court.
[24] There was ample evidence on which the Judge could find that collection by the Council of storm water into drainage works had not caused material or substantial physical damage to the property. As Judge Marshall said, while ponding may have occurred “in times of high rainfall there [had] always been ponding issues
on the affected area, both post and pre 1993”.20 Nor was there any evidence to
support a claim that rent of $150 per week for 16 years could have been achieved, even if a claim beyond six years from the date of issuing the proceeding was
permissible, which I doubt.
20 Waikato District Council v Jacobs DC Hamilton CIV-2012-024-126, 19 September 2013, at para
[49], set out at para [17] above.
[25] I agree with Judge Marshall’s finding that an essential element of the tort of
private nuisance had not been proved. For that reason, the appeal must be dismissed.
Additional comments
[26] During the course of the hearing, I raised with counsel concerns about the way in which this dispute had developed. While the judgment of the District Court (and this Court on appeal) determines the cause of action based on nuisance, it would not prevent a separate claim for trespass being made in respect of continuing discharges onto the land which might, on better evidence, be shown to have caused relevant physical damage to the land. In the absence of some other basis on which the Council is able to discharge storm water on parts of the land not comprised in the three easements in gross, a seriously arguable case would exist for an injunction to issue to prevent any illegitimate discharges.
[27] Mr Moodley, for the Council, sought to persuade me that there was a statutory basis on which the Council could act. That stemmed from a series of provisions under the Local Government Act 1974, which were applicable at the time the works were constructed in 1993.21
[28] Mr Moodley submitted, on the basis of Nobilo v Waitemata County22 and Barber v Mayor, etc of Petone23 that no claim could be made against the Council in either trespass or nuisance. Rather, any claim for “injurious affect” must be brought under s 708(1) and (2) of the Local Government Act 1974. But, he also submitted
that the right to seek compensation was spent because the applicable limitation period had expired. While it is unnecessary for me to decide whether the Council is correct, they are not attractive arguments. The Council’s own witness (Mr Larsen) put its position firmly on contractual rights.
[29] I have doubts about whether, in a case in which the Council has sought to obtain the right to erect drainage works and to discharge onto certain parts of a
21 Reliance was placed on ss 445, 509 and 708 of the Local Government Act 1974; Mr Moodley referred to the form in which those provisions stood between 12 December 1979 and
30 June 2003.
22 Nobilo v Waitemata County [1961] NZLR 1064 (SC).
23 Barber v Mayor, etc of Petone (1908) 28 NZLR 609 (SC).
property by contract, rather than statute, it can subsequently call in aid provisions which apply to the injurious affection of land. But, I express no concluded view on that topic.
[30] I urge the parties to consider a means of settling this dispute. A formal mediation process would seem to be the best route to resolution. However, I cannot compel the parties to negotiate; more so to reach an agreement. They must make their own choices, in that regard.
Result
[31] The appeal is dismissed. Costs on a 2B basis, together with reasonable disbursements are awarded in favour of the Council in this Court. Those costs shall be limited to the hearing on 12 June 2015, given the reason for the adjournment.24 In the absence of agreement, costs and disbursements shall be fixed by the Registrar.
[32] I thank counsel for their assistance.
P R Heath J
Delivered at 4.00pm on 17 June 2015
24 See para [4] above.
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