Keil v Thompson HC Napier CIV-2007-441-303
[2007] NZHC 2108
•12 September 2007
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
CIV-2007-441-303
HERBERT WILLIAM KEIL
Appellant
v
MURRAY DAVID GEORGE THOMPSON AND SHONA AVERILL THOMPSON
Respondents
Hearing: 21 June and 1 August 2007
Appearances: Mr M Wenley for Appellant
Ms K McNamara and Ms S Fraser for Respondents
Judgment: 12 September 2007 at 2.30 pm
JUDGMENT OF LANG J
This judgment was delivered by me on 12 September 2007 at 2.30 pm, pursuant to
Rule 540(4) of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors:
Willis Toomey Robinson, NapierLangley Twigg, Napier
KEIL V THOMPSON HC NAP CIV-2007-441-303 12 September 2007
[1] This appeal arises out of a boundary dispute between the current owners of two neighbouring properties situated in Jervois Road, Napier.
[2] The appellant, Mr Keil, has been the registered proprietor of 2 Jervois Road, Napier since he acquired it in 1950. Shortly after Mr Keil purchased his property a Mr Clifford London became the registered proprietor of the neighbouring property situated at 4 Jervois Road, Napier. The respondents, Mr and Mrs Thompson, now own that property.
[3] The present dispute has its origins in the period during the 1950s and early
1960s when Mr Keil and Mr London were the owners of the two properties. At some stage during that period Mr London began using land on the southern side of Mr Keil’s property as a driveway to enable his trucks to gain access to the rear of his own property. Mr London subsequently went so far as to lay a concrete driveway on Mr Keil’s land. To stop any further encroachment upon his property Mr Keil later built a concrete block wall along the side of the driveway closest to his house. That wall has remained in place to the present day.
[4] Mr London subsequently built a carport that encroached over the boundary between the two properties, and later replaced the carport with a garage. That, too, remains in place today.
[5] After Mr London sold the property in 1961, successive owners of 4 Jervois Road have continued to use the driveway on Mr Keil’s land as the principal means of gaining access to their house and garage. They have also continued to use the garage notwithstanding that it encroaches upon Mr Keil’s land.
[6] In January 2006 Mr Keil instituted proceedings in the District Court at Napier seeking an order requiring Mr and Mrs Thompson to cease their encroachment and to deliver up possession of his land. Mr Keil also sought an order requiring Mr and Mrs Thompson to forthwith remove those portions of the driveway and garage that encroached onto his land. In addition, he sought a declaration that he was entitled to erect a boundary fence on the legal boundary between 2 Jervois Road and 4 Jervois Road.
[7] Mr and Mrs Thompson responded to Mr Keil’s claim by lodging a counterclaim in which they sought an order under s 129 of the Property Law Act
1952 (“the Act”) vesting in them the ownership of all of the land to the northern side of the concrete block wall.
[8] After a defended hearing in the Napier District Court, His Honour Judge Rea issued a decision on 10 April 2007 in which he dismissed Mr Keil’s claims and entered judgment for Mr and Mrs Thompson on their counterclaim. He made the order that they sought vesting in them the ownership of the land on their side of the concrete block wall. The Judge declined to make any award of compensation in favour of Mr Keil, and he also directed Mr Keil to pay Mr and Mrs Thompson’s scale costs in the District Court.
[9] Mr Keil now appeals to this Court against the orders that were made in the District Court. He contends that in making the orders the learned Judge in the District Court exercised his discretion according to erroneous principles, and that the orders should be set aside.
[10] Before examining the basis upon which Mr Keil advances the appeal, it is necessary to set out the factual background in a little more detail. For the most part this is not in dispute, and I take it from the Judge’s decision.
The facts
[11] Mr Keil became the registered proprietor of 2 Jervois Road on 5 April 1950. Some three months later, on 10 July 1950, Mr London became the registered proprietor of 4 Jervois Road.
[12] It seems that from an early stage Mr London would drive trucks over Mr Keil’s land in order to gain access to the rear of his section. As a result of this activity the boundary peg between the two properties was destroyed or driven into the earth.
[13] After Mr London erected the carport, Mr Keil asked him to remove it. Mr
London declined to do so, saying only that he would “pull it down later”.
[14] At some stage prior to 1963 Mr London also extended a bedroom of his house virtually to the legal boundary between his property and that owned by Mr Keil. It was at around this time that Mr Keil erected the concrete block wall well within the boundary of his own property. Mr Keil erected the wall in order to provide a clear delineation between the two properties, and also to prevent Mr London from encroaching further onto his land. The wall, which is approximately
30 metres in length and one metre high, has served as the practical physical boundary between the two properties for approximately 44 years. It has effectively provided the owner of 4 Jervois Road with exclusive possession of a thin triangular strip of land that is 2.8 metres in width at the road entrance and tapers off at a point behind the garage. The strip has a total area of approximately 70 metres.
[15] In 1961 Mr London sold his property at 4 Jervois Road to a Mr and Mrs Barker. They, in turn, sold it to a Mr Galloway. Mr and Mrs Thompson became the owners of the property on 14 July 1997, and have continued to own it to the present day.
[16] Mr and Mrs Thompson did not know that their garage and driveway were on Mr Keil’s land when they purchased 4 Jervois Road. They first became aware in or about 1998 that there was an issue about their common boundary with Mr Keil, but they were not aware of the full extent of the problem.
[17] In October 2004 Mr Keil moved out of 2 Jervois Road and went to live elsewhere. His granddaughter, her partner and children moved into the house at
2 Jervois Road at that time, and they have lived there ever since.
[18] In May 2005 Mr Keil engaged a surveyor to prepare a report regarding the true location of the boundary between the two properties. The surveyor’s report showed that almost all of the driveway, and a significant portion of the garage, was located on land owned by Mr Keil.
[19] In May 2005 Mr and Mrs Thompson decided to replace the old driveway with a new concrete driveway. After the old driveway had been removed but before the new driveway had been laid, Mr Keil’s granddaughter told Mr Thompson that her father wanted his land back. It was at that point that Mr and Mrs Thompson became aware of the surveyor’s report and the extent of the problem with the boundary. Mr and Mrs Thompson then took legal advice and, acting on that advice, they went ahead and laid the new driveway. Mr Thompson said in evidence that, by the time he and his wife became aware of the situation, the old concrete had already been removed and the area would have become a “mud bath” if new concrete had not been laid quickly.
[20] It is against that background that the proceeding came to be determined in the
District Court.
The approach to be taken on appeal
[21] Both counsel accepted that the power to make orders under s 129 of the Property Law Act 1952 involves the exercise of a judicial discretion. As a result, it is not open to an appellate court to conduct a rehearing or to substitute its decision for that of the court below on the basis that the appellate court would have exercised its discretion in a different way.
[22] An appellate court may only disturb the exercise of a judicial discretion in limited circumstances. It may interfere if the appellant can demonstrate either that the Judge in the court below erred in principle in exercising his or her discretion, or that the decision is plainly wrong. The appellate court may also interfere where the Judge in the court below has failed to have regard to a material consideration or has taken into account an irrelevant consideration: Harris v McIntosh [2001] 3 NZLR
721 at 724; May v May (1982) 1 NZFLR 165 at 170.
The issues on appeal
[23] The strip of land to the northern side of the concrete block wall now comprises the driveway, the garage and a small triangle of land situated behind the garage.
[24] During the hearing before me, counsel for Mr and Mrs Thompson confirmed that her clients had no need of the land behind the garage. The appeal must therefore be allowed by consent in relation to that piece of land, and Mr and Mrs Thompson will need to return possession of it to Mr Keil. The remaining issues on appeal relate to the orders that the Judge made in relation to the land upon which the garage and the driveway are situated.
[25] Mr Keil contends that the orders in relation to that land should be set aside because the Judge erred in principle in reaching each of the following conclusions:
(a) that it was just and equitable to make an order under s129 of the Property Law Act 1952 vesting ownership of the garage in Mr and Mrs Thompson;
(b)that the laying of the new driveway in 2005 did not amount to an intentional encroachment on Mr Keil’s land;
(c) that he had jurisdiction to vest ownership of the driveway in Mr and
Mrs Thompson;
(d)that it was appropriate in the circumstances to vest ownership of the driveway in Mr and Mrs Thompson;
(e) that compensation should not be awarded to Mr Keil; and
(f) that costs should be awarded against Mr Keil. [26] I now propose to consider each of these issues in turn.
Did the Judge err in concluding that it was just and equitable to make an order under s 129 of the Property Law Act 1952 vesting ownership of the garage in Mr and Mrs Thompson?
[27] There was no dispute that part of the garage encroached over Mr Keil’s boundary and that it had been erected by a previous owner of 4 Jervois Road. As a result, the Judge clearly had jurisdiction to make a wide variety of orders under s 129 of the Act. Section 129 provides:
129 Power of Court to grant special relief in cases of encroachment
(1) Where any building on any land encroaches on any part of any adjoining land (that part being referred to in this section as the piece of land encroached upon), whether the building was erected by the owner of the first-mentioned land (in this section referred to as the encroaching owner) or by any of his predecessors in title, either the encroaching owner or the owner of the piece of land encroached upon may apply to the [[High Court]], whether in any action or proceeding then pending or in progress and relating to the piece of land encroached upon or by an originating application, to make an order in accordance with this section in respect of that piece of land.
(2) If it is proved to the satisfaction of the Court that the encroachment was not intentional and did not arise from gross negligence, or, where the building was not erected by the encroaching owner, if in the opinion of the Court it is just and equitable in the circumstances that relief should be granted to the encroaching owner or any other person, the Court, without ordering the encroaching owner or any other person to give up possession of the piece of land encroached upon or to pay damages, and without granting an injunction, may in its discretion make an order—
(a) Vesting in the encroaching owner or any other person any estate or interest in the piece of land encroached upon; or
(b) Creating in favour of the encroaching owner or any other person any easement over the piece of land encroached upon; or
(c) Giving the encroaching owner or any other person the right to retain possession of the piece of land encroached upon.
(3) Where the Court makes any order under this section, the Court may, in the order, declare any estate or interest so vested to be free from any mortgage or other encumbrance affecting the piece of land encroached upon, or vary, to such extent as it considers necessary in the circumstances, any mortgage, lease, or contract affecting or relating to that piece of land.
(4) Any order under this section, or any provision of any such order, may be made upon and subject to such terms and conditions as the Court thinks fit, whether as to the payment by the encroaching owner or any other person of any sum or sums of money, or the execution by the encroaching owner or
any other person of any mortgage, lease, easement, contract, or other instrument, or otherwise.
(5) Every person having any estate or interest in the piece of land encroached upon or in the adjoining land of the encroaching owner, or claiming to be a party to or to be entitled to any benefit under any mortgage, lease, contract, or easement affecting or relating to any such land, shall be entitled to apply for an order in accordance with this section, or to be heard in relation to any application for or proposal to make any order under this section. For the purposes of this subsection the Court may, if in its opinion notice of the application or proposal should be given to any such person as aforesaid, direct that such notice as it thinks fit shall be given to that person by the encroaching owner or any other person.
(6) Any [[District Court]] shall have jurisdiction to exercise the powers conferred upon the [[High Court]] by this section, and application may be made to a [[District Court]] accordingly, in any case where the value of the piece of land encroached upon (without the buildings thereon) does not exceed the amount to which the jurisdiction of the [[District Court]] is limited in civil cases, and in any case where a [[District Court]] would have jurisdiction in accordance with section 37 of [[the District Courts Act
1947]]:
Provided that a party intending to invoke the powers given to a [[District Court]] by this subsection shall, except in any case where the Court derives its jurisdiction under that section, give notice of his intention to all other parties before the hearing, and in all cases any party shall be entitled as of right to have the action or proceeding or application transferred to the [[High Court]], or to appeal to the [[High Court]] against any order purporting to be made by the [[District Court]] under this section.
[28] Mr Keil contends that the Judge should not have concluded that it was just and equitable to make an order under s 129 vesting ownership of the garage in Mr and Mrs Thompson. He argues that in reaching this conclusion the Judge placed too much weight on several factors, and that he failed to give any weight to other material factors.
[29] It is clear from the Judge’s decision that the principal factor that influenced his conclusion was the fact that Mr Keil had contributed to the present situation himself by erecting the concrete block wall along a line that was well within his own boundary. He had then sat back for decades and allowed successive owners of 4
Jervois Road to continue to use the driveway and garage on the other side of the wall, even though he knew that in doing so they were using his land. As a result, the concrete block wall came to represent the practical boundary between the two properties for a period of nearly 44 years. In addition, Mr Keil had allowed previous owners of 4 Jervois Road to build the garage and to lay the original
concrete driveway without taking any steps to assert his own property rights. The Judge summarised Mr Keil’s approach to this issue when he observed (at [11]) that Mr Keil “acquiesced in and accepted the situation he now claims was significantly disadvantageous to him”.
[30] The Judge also examined the situation from the position of Mr and Mrs Thompson. He placed significance on the fact that they had purchased their property in good faith and without any knowledge of the problem with the boundary. Other than lay the new driveway, they had done nothing at all to create or perpetuate the present problem.
[31] The Judge explained why he proposed to make the orders that Mr and Mrs
Thompson sought in the following paragraphs of his decision:
[27] The Thompsons purchased 4 Jervois Road in good faith based on the boundaries obvious to them at the time of purchase and in circumstances where only a further survey would have revealed the true boundaries. At the time of their purchase there was absolutely nothing to alert them to the fact that the concrete block fence erected by Mr Keil did not, in fact, represent the correct boundary between the property they wished to purchase and the property that Mr Keil had owned for decades.
[28]At paragraph 28 of his submissions Mr Wenley says as follows: “The Keils would be left with a deep sense of grievance if the
boundary was not restored and that grievance would not be unreasonable. They want exclusive possession of their land –
not monetary compensation”.
[29] Bearing in mind the history of this matter that submission is unfortunate. Mr Keil has acquiesced and accepted for decades a boundary that he built between himself and his successive neighbours at number 4. The only difference between now and the situation that he has accepted for nearly half a century is that his granddaughter has become involved and for the reasons that she puts down to the safety of her children and the partial development of the property he has commenced these proceedings.
[30] From the Defendants’ point of view there is absolutely nothing that has changed from the day they purchased their property. If the Plaintiff’s claim was allowed the utility and saleability of their property would be devastated simply because Mr Keil chooses to make a stand now when he was not prepared to do so in past decades. There is nothing that the Thompsons have done that has led to this most unsatisfactory situation. Any fault, in my view, lies with Mr Keil for not resolving this issue many years ago if he really wanted to do so. He has created and accepted the boundary and it would be wrong to change it now.
[31] Bearing in mind the background to this case I do not consider that any order short of vesting the encroached land in the Defendants will properly resolve the situation. Accordingly pursuant to s.129(2) there is an order vesting in the Defendants all of the estate and interest in the land encroached upon. If necessary I will be prepared to make orders requiring Mr Keil to execute any documentation necessary to give effect to this order.
[32] Counsel for Mr Keil accepted during argument that the Judge was entitled to have regard to the conduct of the parties when considering how to exercise his discretion under s 129. That concession was properly made, because the conduct of the parties will almost always be relevant to the exercise of any judicial discretion.
[33] In the present case the matters that the Judge identified were, in my view, highly relevant to the manner in which he exercised his discretion. The fact that Mr Keil had contributed significantly to the creation of the problem by building the concrete block wall and then standing by and doing nothing for more than 40 years was clearly relevant. His inaction over a period of more than 40 years effectively permitted a situation in which successive owners came to purchase 4 Jervois Road believing that the garage and driveway formed part of the property that they were purchasing. To the extent that equitable principles may be applicable in the present context it is to be noted that equity assists the vigilant, not those who sleep on their rights: Collum v Opie (2000) 76 SASR 588.
[34] Of similar relevance and importance was the fact that Mr and Mrs Thompson were not to blame for the situation that has arisen. They purchased the property in ignorance of the problem, and could not reasonably have been expected to know of it. They have therefore paid the previous owner of 4 Jervois Road for land that they have not received.
[35] Counsel for Mr Keil submitted, however, that the Judge had failed to have regard to several relevant factors in reaching his conclusion. The first of these was that the evidence established that the garage was of limited value, and could easily be demolished. Secondly, the evidence also established that Mr and Mrs Thompson did not use the garage for the purpose of storing their vehicles or, indeed, for any other important purpose. Rather, the evidence established that they were not presently living in the property and that, when they had been, they generally parked
their vehicles on the road frontage. The only use to which the garage has apparently been put in recent years is to store furniture and to enable restoration work to be carried out on a motor vehicle. As a result, counsel contended that Mr and Mrs Thompson could not claim that they had any present or pressing need for the garage. He described the garage as “the proverbial tin shed” that could easily be demolished so that Mr Keil’s land could be returned to him.
[36] I consider that the answer to this submission lies in the Judge’s comments (at [30]) regarding the future usability and saleability of Mr and Mrs Thompson’s property in the event that the land under the garage is not vested in them. Mr and Mrs Thompson purchased the property on the basis that the garage came with it, and when they come to sell the property they wish to be able sell it on the same basis. Moreover, the fact that the garage is not presently being used extensively does not mean that it has no real value to the owner for the time being of 4 Jervois Road. It is always potentially available for use, and may be of significant value in the future not only to Mr and Mrs Thompson but also to a subsequent owner.
[37] Counsel for Mr Keil also submitted that the Judge failed to give adequate weight to the fact that an order vesting the garage in Mr and Mrs Thompson would erode Mr Keil’s rights as the registered proprietor of 4 Jervois Road. I accept that this principle is relevant in the context of s 129. It is also important, however, to remember that s 129 is a remedial provision. It is designed to alleviate the hardship that may be caused to the owner of an encroaching building if the strict rights of the registered proprietor are given effect. Any order that vests land in the encroaching owner will inevitably be at the expense of the registered proprietor of the land that is the subject of the encroachment. Parliament therefore contemplates that the powers under s 129 will sometimes be used to the detriment of the registered proprietor. If a Judge considers that the best way to achieve the remedial purpose of the Act is to make an order vesting land in the encroaching owner, that power is available notwithstanding the effect that such an order will have on the present registered proprietor.
[38] In reality, Mr Keil is asking this Court to intervene on the basis that the Judge gave too much weight to a relevant factor and insufficient weight to other relevant
factors. Provided factors are relevant, however, the weight to be given to them is a matter entirely within the province of the Judge at first instance. It is not open to this Court to disturb that decision on the basis that it would have given more (or less) weight to a relevant factor than did the Judge. Although it is not relevant to the determination of the appeal, I would have exercised my discretion in exactly the same way had I been asked to decide the case at first instance. I, too, consider that the conduct of the parties in the present case and the length of time over which that has occurred to be decisive factors in the exercise of the discretion under s 129.
[39] I have therefore concluded that Mr Keil has not shown that the Judge erred in principle when he concluded that the history of the matter and the conduct of the parties were the principal factors to be taken into account in exercising his discretion.
[40] Counsel for Mr Keil contended next that, if relief was to be given to Mr and Mrs Thompson, the Judge ought to have given consideration to making an order that fell short of vesting full ownership of the land in them. The Judge could, for example, have used his powers under s129(2)(b) to created an easement over the land in favour of Mr and Mrs Thompson. Alternatively, he could have made an order under s 129(2)(c) allowing them to retain possession (but not have ownership) of the land.
[41] I am unsure whether, during the hearing in the District Court, counsel for Mr Keil ever suggested that the Judge should make use of the other powers that were available to him under s 129. I say this because Mr Keil appears to have adopted an “all or nothing” approach both at first instance and on appeal. The Judge was, however, obviously aware that other alternatives were available to him. This is implicit in his comment that he did not “consider that any order short of vesting the encroached land in the Defendants will properly resolve the situation”.
[42] In the end, however, the selection of the appropriate remedy was a matter for the Judge. It was clearly open on the evidence to the Judge to make the order that he did in relation to the garage. Moreover, I consider that the Judge was entitled to reach the view that no order short of the one that he selected would finally resolve the situation. The available alternatives would do no more than provide a short term
“stop gap” solution. It would not finally resolve the underlying issues from the perspective of either party.
[43] For these reasons I do not consider that Mr Keil has established that the Judge acted according to an erroneous principle in making an order vesting ownership of the land under the garage in Mr and Mrs Thompson.
Was the Judge correct when he concluded that the re-laying of the driveway in
2005 did not amount to a new encroachment?
[44] This issue is relevant when considering whether relief may be granted in respect of the driveway in its own right as a “building” in terms of s 129(1). The issue arises because, regardless of whether or not the driveway can be viewed as a building, relief is not available where the encroachment was created intentionally.
[45] Mr Keil relies on the evidence that Mr and Mrs Thompson elected to re-lay the new driveway in 2005 after they knew that it was to be laid on his land and that he wanted the land returned to him. As a result, Mr Keil contends that they intentionally created the encroachment in respect of which they now seek relief.
[46] The Judge dealt with the issue as follows:
[20] I propose to deal with the issue of intentional encroachment first. It is the encroachment into the Plaintiff’s land and when that occurred and for what purpose that must be examined. In this case the driveway encroachment occurred at the time Mr London was the owner of 4 Jervois Road. As explained earlier that encroachment was neatly delineated by the fence that Mr Keil erected himself. The original encroachment was to enable a driveway to go to the garage at number 4 and that encroachment continued as a driveway throughout the decades irrespective of what surface was on it. I do not accept Mr Wenley’s submission that by resurfacing the driveway in concrete in June 2005 that a new intentional encroachment thereby occurred depriving the Defendants of any recourse to s.129. The encroachment had occurred decades earlier and could not be effected by the Defendants choosing to resurface.
[47] The Judge clearly viewed the use of the driveway as the actual encroachment, and did not consider that its composition was of any real relevance. In order to ascertain whether that approach is correct, it is first necessary to consider what constitutes an encroachment for the purposes of the Act.
[48] In Tram Lease Ltd v Croad [2003] 2 NZLR 461 (CA), another case involving s 129, Blanchard J adopted the following definition of ‘encroachment’ from Black’s Law Dictionary (7th ed, 1999):
An infringement of another’s rights or intrusion on another’s property.
[49] In the present context I am also assisted by the following passage from the judgment of Carter J in Ex parte van Achterberg [1984] 1 QdR 160. In that case Carter J held that a welded mesh fence set in concrete foundations was a ‘building’ for the purposes of the Queensland equivalent of s 129 of the Property Law Act
1952. He said at 162:
Each case will depend essentially on its own facts. I am satisfied in this case that the offending structure is both “substantial” and “permanent”. Ordinarily however one classifies a building as a structure having walls and a roof. However, the legislature in this Act has remained silent on this point and perhaps deliberately so, because the range of offending encroachments might take any one of a variety of forms, and from common experience one knows that the form in which the ingenuity of a professional architect may find expression is not always predictable.
From Part XI of the Act, read as a whole, the intention of the legislature is clear in my view, that it is intended to deal with an encroachment which is manmade with the building materials of the day, which is of a substantial and lasting character, which is brought into existence for domestic or industrial purposes and which is of such a kind that the legal rights of those affected by it may best be adjusted by permitting it to remain in place rather than ordering its removal on the ground that it is merely a trespassing encroachment upon the land of another … It is in my view consistent with that and with what I perceive to be the legislative intent to hold that in this case this structure is a building within the meaning of the Act and an encroachment intruding as it does into the soil of the adjacent owner. That is not to say that every encroaching picket fence or the proverbial “tin shed” will qualify to be dealt with by applications under this Act. It will always be a question of degree to be determined by reference to the facts and circumstances of the individual case.”
[50] Care needs to be taken when applying the above passage as a whole, because the definitions in the Queensland legislation were different to those in the Property Law Act 1952. The approach that Carter J took also suggests that the courts in
Queensland may well take a more liberal view of what constitutes a ‘building’ for the purposes of the Act: See [58] to [62] post.
[51] The passage nevertheless provides some assistance in determining what may constitute an encroachment for the purposes of s 129 of the New Zealand legislation. Adopting a similar approach to that used by both Blanchard J in Tram Lease and by Carter J in van Achterberg, I consider that an encroachment is best described for present purposes as a manmade structure of a substantial and lasting character which is brought into existence for domestic, commercial or industrial purposes and which intrudes at least in part on the property of another.
[52] I therefore respectfully reach a different conclusion from Judge Rea in relation to this issue. I do not think that the existence of an encroachment can be determined according to the use to which a person may put a neighbour’s land. It must instead be determined on the basis of whether the owner of one piece of land has created or installed a manmade structure so that it intrudes at least in part on land owned by another.
[53] Applying those principles to the present case, there can be no doubt that the garage amounts to an encroachment. The concrete block wall does not have the same status, because Mr Keil erected it on his own land. It also follows that the driveway would not have amounted to an encroachment until such time as it was formed into a manmade surface. Prior to that point it was bare land that could not be said to intrude upon Mr Keil’s property.
[54] It follows from this analysis that, when Mr and Mrs Thompson removed the original driveway in 2005, they removed the encroachment that had been in existence up until that point. At that point the driveway reverted to being bare land, and nothing intruded upon Mr Keil’s property. The fact that Mr and Mrs Thompson may have continued to use the land upon which the driveway was formerly situated does not affect that issue.
[55] It also follows that, when Mr and Mrs Thompson replaced the driveway, they created a new encroachment that intruded on Mr Keil’s land. The fact that they
replaced the driveway in the knowledge that Mr Keil owned the land and wanted it back leads to the conclusion, in my view, that they intentionally created the new encroachment.
[56] This conclusion means that, regardless of whether or not the driveway can be viewed as a ‘building’ in terms of s 129, Mr and Mrs Thompson could not seek relief under the section in respect of the driveway alone, because they intentionally created the encroachment. If relief was to be granted in respect of the driveway at all, it could only be as a consequence of the orders that the Court made in relation to the garage.
Did the Judge have jurisdiction to vest ownership of the driveway in Mr and Mrs
Thompson?
[57] The Judge noted that the Act does not contain any definition of “building” for the purposes of s 129. He then considered several authorities in which the Courts have been prepared to hold that the power to grant relief under s 129 extends beyond the land under which a building is situated.
[58] In Collins v Kennedy [1972] NZLR 939 Henry J accepted that a retaining wall and terrace had been built in such a way that they had become an integral part of the building that they adjoined. As a result, the Court had jurisdiction to grant relief under s 129 in respect not only of the building but also the wall and terrace.
[59] In Blackburn v Gemmell (1981) NZCPR 389 Hardie Boys J considered whether the encroaching building, a washhouse, should be vested in the encroaching owner. He held that it was not necessary to vest land in the encroaching owner for the purposes of access and curtilage. He said at 393 :
…[Sections 29 and 29A] authorise compulsory acquisition of one person’s land and its vesting in another person. They ought therefore to be applied with circumspection: not so as to defeat the purpose for which they have been enacted, but rather to ensure that no more is done than is necessary to achieve that purpose. In the case of an encroachment such as that in this case, the purpose of the legislation will be achieved by vesting the land actually encroached on in the respondents.
[60] In Norris v Weal HC ROT A92/80 30 November 1994 Gallen J held that a concrete drive and concrete retaining wall were sufficiently closely associated with a house so as to constitute a building for the purposes of s 129.
[61] In Briggs v Currie HC WHG M 109/92 5 May 1994 Fisher J said at 7:
Plainly the Court must limit the exercise of its powers under s129 to the minimum intervention necessary in order to secure proper relief for the encroaching owner. However, I think it clear that the power to vest land includes the power to vest enough land to enable a sensible enjoyment of the encroaching building. It is true that the power to vest is related to “the piece of land encroached upon” but this is to be given a sensible interpretation extending well beyond that ground literally under the building in question but the land concerned need not be limited to that which is literally underneath the building in question. Furthermore, there is room for a broad interpretation of the expression “building” to incorporate various ancillary structures and devices associated with the building in the more immediate sense – see for example Norris v Weal Rotorua 92/80 Gallen J 30 November
1994; Collins v Kennedy [1972] NZLR 939,941.
[62] The Judge also reproduced (at [25]) the following passage from the decision of Wild J in Anchorage Holidays Ltd v Stevenson HC NEL CIV 2005 442 220 23
May 2006:
I do, however, agree with Gallen J’s liberal, but necessarily case dependent, interpretation of “building” as encompassing everything necessary to the integrity and basic usability of the structure itself. This interpretation was also adopted by Salmon J in Tram Lease Ltd v Croad [2003] 1 NZLR 73, and subsequently upheld by the Court of Appeal: Tram Lease Ltd v Croad [2003] 2 NZLR 461. In that case, a party wall forming the rear wall of a building was held to be a necessary part of the building for the purposes of s129, thus the building could be said to encroach upon the other piece of land. Such an interpretation is both necessary and appropriate to give s129 the remedial effect Parliament intended in cases of encroachment. That interpretation overcomes most of the limitations Gallen J considered s129 may have, as the outcome in Norris v Weal demonstrates.
[63] Judge Rea expressed his conclusion in relation to this issue as follows:
[26] From those authorities it is clear that in appropriate cases a driveway can be a “building” for the purposes of s.129. In this case I believe that following closely on what Fisher J said in Briggs v Currie & Anor the power to vest the garage in the Defendants must include the power to vest the driveway to enable a sensible enjoyment of the encroaching building. If that was not the case an artificial situation would be created here where I could make an order vesting the garage in the Defendants but frustrate the effect of such an order by having no power to vest the driveway in them as well.
[64] It is clear from this passage that the Judge did not base his decision on a determination that the driveway was integral to the structure or stability of the garage (in terms of Collins v Kennedy) or that it was so closely associated with the garage (in terms of Norris v Weal) that relief should be granted on either of those bases. Neither did he determine that the driveway was essential to the integrity and basic usability of the garage (in terms of Anchorage Holidays Ltd v Stevenson). Instead, he followed the approach taken by Fisher J in Briggs v Currie and held that it was necessary to vest ownership of the driveway in Mr and Mrs Thompson in order to enable them “to obtain a sensible enjoyment of the encroaching building”. He did so in order to ensure that the effect of the order vesting ownership of the garage in Mr and Mrs Thompson was not frustrated.
[65] Counsel for Mr Keil criticised the approach taken by Fisher J in Briggs v Currie. He contended that it went considerably beyond the approach taken in earlier authorities, in which the Courts had only been prepared to extend relief to structures that were integral to, or directly associated with, the encroaching building. He pointed out that the concept of “sensible enjoyment” was potentially extremely wide, and could open the door for relief in respect of many structures that would not have qualified for relief in terms of the earlier authorities. He also contended that such an approach paid insufficient regard to the rights of the registered proprietor of the land that was subject of the encroachment. Earlier authorities had stressed that those rights were to be trammelled to the minimum extent necessary to grant relief to the encroaching owner.
[66] Counsel for Mr Keil also drew my attention to the fact that the two landowners who were directly affected by the encroachment in Briggs v Currie consented to the relief that the Judge granted in that case. As a result, he submitted that the Judge’s comments in that case needed to be considered with caution, and in light of the Judge’s obvious desire to achieve the outcome that the parties themselves had agreed to.
[67] I accept that the form of the relief that Fisher J granted in Briggs v Currie
was undoubtedly influenced by the fact the parties who were directly affected had
agreed to the form of the orders that were to be made. The Judge himself acknowledged this when he said (at 7):
In the present case the land sought to be transferred is generous in area but to a large extent that is dictated by the need to include ancillary devices such as water services, power services, driveway and paddock water. Any hesitation that I might have had over the generous scope of the land is I think likely to go in view of the consent of the owners immediately affected. The Curries and Mr Smith have the exclusive right to the use and occupation of area B. If they had been opposed to the application one might have scrutinised this aspect more closely. But if it turns out that the only persons materially affected consent to it then one can accommodate a generous approach to jurisdiction under s 129.
[68] Even accepting that the orders that he made were wider in scope than may have been the case if the application had been contested, I do not consider that the principles to which Fisher J referred can realistically be challenged. He expressly acknowledged that the Court “must limit the exercise of its powers under s 129 to the minimum necessary in order to secure proper relief for the encroaching owner”. He was also undoubtedly correct, even in terms of the earlier authorities, when he said that the power to vest land is to be “given a sensible interpretation extending beyond that ground literally under the building in question”.
[69] The statements of principle in Briggs v Currie are, in fact, broadly in line with those to be found in earlier authorities. I consider that, in referring to the need to ensure that relief allows for “sensible enjoyment” of the encroaching land, Fisher J was referring to the principle that the Court must ensure that the remedial purpose for which s 129 was enacted is not frustrated. He clearly recognised, however, that the relief that is granted should be no more than is necessary to achieve that purpose.
[70] In each case what will amount to sensible enjoyment will depend upon the facts. Relief will obviously extend to structures that are necessary to preserve the integrity of the encroaching building, and to ensure that the party seeking relief can make proper use of it. Questions of margin and degree will often arise. In those situations the Court must be vigilant to ensure that it grants relief that is sufficiently wide to achieve the remedial objects of the Act, but not so wide that it unnecessarily trammels the rights of the owner of the land that is the subject of the encroachment.
[71] For these reasons I consider that it was potentially open to the Judge in the present case to make an order vesting the ownership of the driveway in Mr and Mrs Thompson. Before he could do so, however, the Judge needed to be satisfied that such an order was necessary in order to enable Mr and Mrs Thompson to sensibly enjoy the use of the garage. He also needed to be satisfied that that order would not unnecessarily infringe upon Mr Keil’s rights as the owner of the land under the driveway.
Was it appropriate in the present case for the Judge to make an order vesting ownership of the driveway in Mr and Mrs Thompson?
[72] I have already reproduced (at [63]) the passage from the Judge’s decision in which he determined that he had the necessary jurisdiction to make an order vesting the ownership of the driveway in Mr and Mrs Thompson. The principal factor that he relied upon in reaching that conclusion was that, if the jurisdiction did not exist, the effect of the Court’s order in relation to the garage could be frustrated.
[73] It is implicit from this passage that the Judge considered that the effect of any order in relation to the garage would be frustrated if he did not make the same order in relation to the driveway. He did not, however, expressly reach his decision in relation to the driveway on that basis. For that reason I have no way of knowing why the Judge may have been of the view that the order that he proposed to make in relation to the garage would be frustrated if he did not make the same order in relation to the driveway.
[74] The issue that the Judge was required to determine was whether it was appropriate to make an order vesting ownership of the driveway in Mr and Mrs Thompson. In order to make that decision he was required to apply the principles to which I have already referred. Given that the Judge said that he was “following closely” the approach taken by Fisher J in Briggs v Currie, it was necessary for him to decide whether Mr and Mrs Thompson needed to be able to use the driveway in order to sensibly enjoy their ownership of the garage.
[75] Counsel for Mr and Mrs Thompson submitted that the Judge was also entitled to take into account the extent to which the driveway enabled Mr and Mrs Thompson to sensibly enjoy their house. In the present context that submission is obviously incorrect, because the house does not encroach upon Mr Keil’s property. As a result, the effect that the driveway may have on the use of the house is irrelevant to the exercise of the discretion under s 129.
[76] Counsel for Mr Keil submitted that, in order for Mr and Mrs Thompson to be able to sensibly enjoy the garage, they did not need to have vehicular access to it. He based this submission on the fact that Mr and Mrs Thompson (and latterly their tenants) have not used the garage as a storage area for their motor vehicles. They have been content to park their cars on the street and to use the garage for other purposes. As a result, counsel contended that it would be sufficient for Mr and Mrs Thompson to have pedestrian access to the garage.
[77] I consider that this submission is unrealistic. The present use of the garage is a factor to be taken into account, but it is not the only factor. The garage was plainly constructed for use as a storage place for motor vehicles belonging to the owners and guests of 4 Jervois Road. Users of the garage have always had vehicular access to it. The fact that the present owners may not have used the garage regularly to store their vehicles does not detract from the proposition that that is the purpose for which it is likely to be used in the future. For these reasons I consider that sensible enjoyment of the garage in the present case would necessarily include the ability to have vehicular access to it.
[78] If the existing driveway was the only possible means of vehicular access to the garage, the issue would be clear-cut. That is not, however, the case. Considerable attention was devoted during the hearing in the District Court, and also on appeal before me, to an alternative possibility. This involves creating vehicular access to the garage by forming a new driveway around the northern side of Mr and Mrs Thompson’s house. At present a pergola that is attached to the side of the house stands in the way of this alternative, but it was suggested that this was in a poor state of repair and could be readily dismantled.
[79] Had the test been the balance of convenience, the outcome would also have been clear-cut. It would obviously be much more convenient for Mr and Mrs Thompson to be able to continue to use the existing driveway rather than go to the trouble and expense of creating a new means of vehicular access to the garage. The issue is not, however, one of convenience. The test is far higher because the driveway is on Mr Keil’s land, and he should not be required to give up more of his land than is necessary to enable Mr and Mrs Thompson to sensibly use the garage.
[80] The Judge was clearly alert to the fact that an alternative proposal was available, but he expressly refrained from considering it. His approach in relation to this issue was as follows:
[34] During the evidence and in submissions there was some focus on how access to the rear of both properties at number 2 and number 4 could be facilitated if there was a different outcome. I have deliberately not referred to those arguments. I accept that for number 4 there is an alternative route to the back of the property but the development of a garage and driveway would involve tens of thousands of dollars and may be prohibitive. In my view this case is not about alternatives. These two properties have happily co-existed for almost half a century based on boundary inaccuracy. The time has come for the legal boundary to be realigned to accord with the boundary that has been recognised by the owners of both 2 and 4 Jervois Road since at least 1963 and probably before then.
[81] I accept that the history of the matter is generally relevant to the exercise of the discretion under s 129. It may also be the case that, when properly examined, the likely cost and inconvenience of the alternative proposal is such that it can safely be put to one side. In my view, however, the Judge needed to consider whether, and to what extent, the suggested alternative was a viable option. This requirement flowed from the fact that relief was not available in respect of the driveway in its own right. It could only be the subject of relief if that was required to enable Mr and Mrs Thompson to sensibly enjoy the garage.
[82] This is obviously a very important issue for Mr Keil. He clearly believes that Mr and Mrs Thompson are using the encroachment by the garage as a “springboard” to enable them to acquire ownership of the driveway. He also believes that Mr and Mrs Thompson have no genuine desire to have vehicular access to the garage. This is demonstrated by the fact that they have never used the garage for any significant purpose. Their real objective, in Mr Keil’s view, is to be able to
continue to use the driveway as a convenient means of access to their house. Mr Keil contends that, in seeking to achieve that objective, Mr and Mrs Thompson are asking the Court to apply s 129 in an illegitimate manner.
[83] In those circumstances, although the arrangement had long been in place, I do not consider that it was sufficient for the Judge to determine the issue relating to the driveway solely on that basis. Instead, it was necessary for him to evaluate whether there was another realistic alternative available to Mr and Mrs Thompson. The alternative that Mr Keil postulated was the creation of a new driveway on the northern side of Mr and Mrs Thompson’s house. The Judge expressly refrained from evaluating that proposal because he took the view that the case was not about alternatives. In reaching that conclusion I consider, with respect, that the Judge fell into error.
[84] In order to rectify the situation it will be necessary to determine whether the creation of the proposed driveway is a realistic alternative. In preparing this judgment I have considered whether, in the interests of achieving finality between the parties, this Court should reach its own conclusion in relation to this issue. Upon reflection, however, several factors persuade me that that would not be appropriate.
[85] First, I have not seen and heard the witnesses, and this could be a matter of some importance in determining whether the alternative proposal is a realistic option. It would be far more appropriate for the Judge who conducted the hearing to determine issues of this nature.
[86] Of greater importance, however, is the impact that any decision by this Court would have on the appeal rights of both parties. There is no general right to a second appeal in civil proceedings. In order to appeal from the decision of this Court, the intending appellant must first obtain leave from either this Court or the Court of Appeal. Leave will generally only be granted in circumstances where the case raises an issue of fact or law that is of sufficient private or public importance to justify the inevitable delay and expense of a further appeal. There is no guarantee in the present case that either party would be granted leave to appeal. There is
therefore a risk that the parties would be left without any further avenue of appeal in the event that this Court was to decide the issue afresh.
[87] Finally, as will shortly become evident, it will be necessary for other issues to be revisited by the District Court in any event. It therefore makes sense that all outstanding issues should be determined in the first instance by it.
[88] The proceeding must therefore be remitted to the District Court so that it can determine this issue in the light of the existing evidence and such further evidence as the District Court may allow the parties to adduce.
Did the Judge err in not awarding compensation to Mr Keil?
[89] It is clear from the wording of s 129(4) of the Act that the Court has power to award compensation in circumstances where it makes an order vesting land in the encroaching party. Orders for compensation were made in several of the authorities to which I have already referred: See eg Collins v Kennedy at 942 and Norris v Weal at 26.
[90] The situation in the present case is clouded somewhat by the fact that Mr Keil has consistently said that he does not want compensation, and that he is solely interested in having his land returned to him. His counsel reiterated that point during the hearing before me.
[91] Mr Keil may, however, alter his position once he comes to terms with the fact that, at the very least, the land under and in the immediate vicinity of the garage is to be vested in Mr and Mrs Thompson. For that reason I propose to consider the issue of compensation notwithstanding the fact that Mr Keil’s current position is that he does not seek compensation.
[92] The Judge dealt with the issue of compensation in the following way:
[32] The Court has the discretion to award compensation to Mr Keil for the land that has been taken under s.129. To deal with this issue a valuer was called on each side to give evidence about the actual value of the encroached land. The valuations were different. I do not need to resolve the differences. I have come to the conclusion that bearing in mind the
background of this matter it would be quite inappropriate to order the
Defendants to pay any compensation at all to Mr Keil.
[33] Mr Keil and his neighbours have lived their lives for nearly half a century on the basis that the boundary was represented by his concrete block wall. The Thompsons purchased the property on that basis and lived there until the middle of 2005 unaware of any potential problems. Mr Keil has lived his life knowing that a portion of his property was being used by his neighbours and it was not until he left the property and his granddaughter became the principal resident that any issue arose. In my view it would be quite wrong to inflict a financial penalty on the Thompsons that would benefit Mr Keil when he acquiesced in and accepted the incorrect boundary for so long. To order the Thompsons to pay money to Mr Keil at this stage would be asking them to pay for all their predecessors in title and to provide a reward for Mr Keil for his own acquiescence.
[93] It is clear from these passages that the Judge elected not to make an award of compensation on the basis of the view that he had reached regarding the history of the matter. He viewed any order for compensation as being in the nature of a “financial penalty” upon Mr and Mrs Thompson. He considered that that would be inappropriate, because it would effectively require Mr and Mrs Thompson to “pay for all their predecessors in title and to provide a reward to Mr Keil for his own acquiescence”.
[94] Viewed objectively, however, an order requiring Mr and Mrs Thompson to pay compensation to Mr Keil is not in any sense a financial penalty. It merely recognises, in a conventional way, that Mr and Mrs Thompson should provide monetary consideration for the land that they are acquiring from him. Viewed in that way, an award of compensation is not a reward to Mr Keil either. He is the person whom the Court requiring to part with some of his land. The payment of compensation in such circumstances is an orthodox approach, and it is one that should generally be adopted regardless of the history of the relationship between the parties concerned.
[95] For these reasons I am satisfied that the Judge erred in principle when he declined to award Mr Keil any compensation. That issue must also be remitted to the District Court for reconsideration. If Mr Keil elects not to seek compensation at that stage, there is of course no obligation on the District Court to consider it further.
Did the Judge err in awarding costs against Mr Keil?
[96] The Judge awarded costs and disbursements in favour of Mr and Mrs
Thompson according to the District Court scale. This amounted to a total sum of
$8,909. He dealt with the issue of costs in the final paragraph of his decision as follows:
[35] Ms McNamara sought costs on a solicitor/client basis. I do not consider in all of the circumstances of this case that such an award would be appropriate. The Plaintiff will be required to pay the Defendants’ costs according to scale as determined by the Civil Jurisdiction Manager at Napier. If there are any disputes about the costs they can be referred to me by memoranda. The Plaintiff will be required to pay the Defendants’ disbursements as fixed by the Civil Jurisdictional Manager at Napier.
[97] The Judge did not give any reasons for his decision to make an award of costs in favour of Mr and Mrs Thompson. In the absence of reasons I assume that he applied the conventional principle that the losing party should be required to contribute to the costs of the successful party. Mr and Mrs Thompson were clearly the successful parties, because they successfully defended Mr Keil’s claim and they also obtained the orders that they sought on their counterclaim.
[98] That principle has not, however, been universally applied in cases where orders have been made under s 129. A party who seeks an order under that section can be viewed as seeking an indulgence of the Court. As a result, costs may sometimes be ordered to lie where they fall: See eg Norris v Weal at 26. In other cases the successful party has been ordered to contribute to the costs of the owner of the land that is the subject of the encroachment: See eg Blackburn v Gemmell at 394; Collins v Kennedy at 942.
[99] In the present case the Judge was obviously entitled to take into account all of the matters that would usually be taken into account when fixing the incidence and quantum of costs. These would include the fact that Mr and Mrs Thompson had succeeded and that Mr Keil had failed. In addition, he would be entitled to take into account whether Mr Keil had adopted a reasonable approach to the litigation and whether he had unnecessarily lengthened it by taking points that had no or little merit.
[100] Equally, however, I consider that the attention of the Judge ought to have been drawn to the approach that has been taken in other cases. There is nothing to suggest that counsel ever raised this issue in the District Court. Given the stance that Mr Keil adopted in relation to the other issues raised in this proceeding, there is a distinct possibility that he did not turn his mind to the possibility that he might ever be required to pay costs.
[101] For this reason I consider that the issue of costs also needs to be reconsidered by the District Court in light of the matters to which I have just referred. In saying that, I do not intend to bind or in any way fetter the manner in which the Judge deals with this issue when it comes back before him.
Result: Orders
[102] The appeal is dismissed to the extent that it relates to the order vesting the ownership of the land upon which the garage stands.
[103] The appeal is allowed by consent to the extent that it relates to the triangular piece of land behind the garage. Mr Keil remains the registered proprietor of that land and Mr and Mrs Thompson must arrange to deliver up possession of it as soon as practicable.
[104] The appeal is also allowed to the extent that it relates to the order vesting ownership of the driveway in Mr and Mrs Thompson and in relation to the issues of compensation and costs. To that extent the orders that were made in the District Court are set aside.
[105] The proceeding is remitted to the District Court for final determination in light of the matters referred to in this judgment.
[106] The Judge did not direct who was to be responsible for arranging and meeting the costs of the survey and other ancillary steps that will need to be taken in order to give effect to his orders. Those issues will also need to be considered by the Judge when the case comes back before him.
Costs
[107] Both parties have been successful to some extent in relation to the appeal. For that reason my initial impression is that costs should lie where they fall. Should either party advocate a different approach, memoranda should be filed and served within 21 days of the date of this judgment. Memoranda in response and reply are
then to be filed and served at 14 day intervals thereafter.
Lang J
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