Kiwi Trustee Limited v Lin

[2017] NZHC 108

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-2 [2017] NZHC 108

UNDER

the Property Law Act 2007 and the

Declaratory Judgments Act 1908

IN THE MATTER OF

an application to determine and enforce an easement, both legal and equitable, and for resulting claim in nuisance both for diminution in value and consequential and foreseeable losses

BETWEEN

KIWI TRUSTEE LIMITED Plaintiff

AND

QING LIN
First Defendant

SCOTT THOMAS NABARRO Second Defendant

Hearing:	7 February 2017
Appearances:	P F Chambers for the Plaintiff K Davenport QC for the Defendants
Judgment:	7 February 2017

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:

Henley-Smith Law (Mark Henley-Smith), Glen Eden, Auckland, for Plaintiff
Lewis Callinan (Rowena Lewis), Browns Bay, Auckland, for Defendants

Counsel:

P F Chambers, Auckland, for Plaintiff

K Davenport QC, Auckland, for Defendants

KIWI TRUSTEE LIMITED v QING LIN [2017] NZHC 108 [7 February 2017]

[1]      The plaintiff applies under r 8.19 of the High Court Rules for discovery of one document, an agreement under which the first defendant sold a property at

1331 State Highway 16, Reweti, to Campsites Trustees Ltd.  The defendants resist disclosure on the ground that the document is not relevant.

[2]      In Kiwi Trustee Ltd v Lin I dealt with Kiwi Trustee Ltd’s application to sustain a caveat it had lodged against Ms Lin’s property at 1331 State Highway 16 in support of its equitable easements.1 That decision gives a background to this proceeding. Kiwi Trustee Ltd owns a 8 hectare property at 1343 State Highway 16, Reweti. Mrs S Hart is a director of Kiwi Trustee Ltd. Ms Lin bought the neighbouring 72 hectare property at 1331 State Highway 16. The former owner of

Ms Lin’s property is Mr Hart, Mrs Hart’s husband.  Ms Lin became the registered proprietor in June 2013 as purchaser from a mortgagee exercising its power of sale. The 1331 property is subject to two registered easements, for which Kiwi Trustee’s property is the dominant tenement.   One easement was created in 1974 and the second in 1987.  The easements give the dominant tenement the right to take water from a stream and convey it to its own property, to lay pipes, to enter on the servient tenement for maintenance and repair, to install an electric pump and maintain it and run an electricity supply to the pump and to go onto the property for any repairs.

[3]      After Ms Lin took ownership of the 1331 property, she and her farm manager, the second defendant, arranged for a surveyor to define the boundary of the easement and also to define the boundary between the 1343 property and the 1331 property. The farm manager arranged for the area of the easements to be fenced off.  It was found that the pipes to take the water to the 1343 property were outside the easement area. He moved them so that they were within the area identified by the surveyors.

[4]      Kiwi Trustee Ltd objected to these steps and took special exception to the manner in which the farm manager acted towards them.  Kiwi Trustee Ltd maintains

that these actions are in breach of the registered easements.  It also claims that under

1      Kiwi Trustee Ltd v Lin [2016] NZHC 595.

the easement it has the right to enter onto the 1331 property from the State Highway, rather than from the point where the easement area abuts its boundary.

[5]      In this proceeding, it claims rights under the registered easements.   It has three  causes  of  action.    For  the  first  cause  of  action  it  sues  for  breach  of  the easements and under s 313 of the Property Law Act 2007.   It claims damages for diminution in value of its land and general damages for humiliation and suffering.  In the second cause of action it seeks declarations as to the interpretation of the easements.  The third cause of action is for nuisance.  Again it claims damages for diminution  in  value of its  property and  additional  damages  for humiliation  and suffering.

[6]      Since  the  start  of  the  proceeding,  Ms  Lin  has  on-sold  the  property  to

Campsites Trustee Ltd.  I infer that she entered into the agreement towards the end of

2015 or the beginning of 2016.   That is because Campsites Trustee Ltd lodged a caveat against the title on 25 January 2016.   The sale has now been completed. Campsites Trustee Ltd became the registered proprietor on 10 November 2016.  The agreement under which Ms Lin sold the property to Campsites Trustee Ltd is the subject of the present application.

[7]      Associate  Judge  Doogue  ordered  standard  discovery.    Under  r  8.7  that requires disclosure of documents that are:

(a)       documents on which the party relies;

(b)      documents that adversely affect that party’s own case;

(c)       documents that adversely affect the another party’s case;  and

(d)      documents that support another party’s case.

[8]      It is, of course, well established that relevance is determined by the pleadings. The standard authority for that is the Court of Appeal’s decision in New Zealand Rail

Ltd v Marlborough New Zealand Ltd.2   The standard discovery test under r 8.7 does not require disclosure of documents that would have been discoverable under the old “train  of  enquiry”  test  referred  to  by the English  Court  of Appeal  in  Peruvian Guano.3   Amongst his authorities, Mr Chambers cited AMP Society v Architectural Windows Ltd.4 The passage in the decision of Chilwell J at p 202 referring to Peruvian Guano is no longer relevant under the standard discovery test.

[9]      Mr Chambers sought disclosure of the agreement for sale and purchase on the basis that it may cast light on Ms Lin’s motivation, and also that it may raise matters that could have a bearing on the rights of Kiwi Trustee Ltd.  In this proceeding, Kiwi Trustee Ltd is enforcing its rights under a registered easement.  As part of its case, I understand that it will run arguments that it is not restricted to the area of the registered easement, and its rights extend to allowing it to enter on to other parts of the property at 1331 State Highway 16.   Those may be raised as arguments as to implied terms.  For the reasons I gave in the caveat decision, I do not believe that arguments as to an equitable easement will be available against Ms Lin.

[10]     The primary actions of Ms Lin which are complained of are the conduct of herself and her manager between June and August 2013.  Admittedly that conduct would have ongoing effects, and the ongoing effects may be relevant.  But the fact that towards the end of 2015 and early 2016 Ms Lin entered into an agreement to sell the property cannot be relevant to this case except to assist in identifying when Ms Lin’s occupation of the property came to an end.

[11]     Ms Davenport QC accepts that Ms Lin, for the purpose of any nuisance liability, was occupier up until 10 November 2016 when Campsites Trustee Ltd took ownership.   She does not rely on the agreement to show cessation of occupation before then.

[12]     The case for Kiwi Trustee Ltd will remain the same, whatever the agreement for sale and purchase might say.  For example, if that agreement were to say that the

2      New Zealand Rail Ltd v Port Marlborough New Zealand Ltd [1993] 2 NZLR 641 (CA) at 644.

3      Compagnie Financière et Commerciale du Pacifique v Peruvian Guano Co [1894] 3 Ch 690 (EWCA).

4      AMP Society v Architectural Windows Ltd [1986] 2 NZLR 190 (HC).

purchaser need not worry about the easements in favour of Kiwi Trustee Ltd, that would be entirely irrelevant to this proceeding because Kiwi Trustee Ltd is not a party to the agreement and cannot be bound or be affected by its provisions.

[13]     Mr  Chambers  referred  to  a  resource  consent  application  under  which Campsites  Trustee  Ltd  applied  for  consent  to  subdivide  the  property  (before  it became  owner  of  the  property).     The  subdivision  application  contained  an assessment of effects which suggested that Kiwi Trustee Ltd will not be affected by any subdivision activity or any consequential residential activity on separate lots. The application makes no reference at all to the easements or to Kiwi Trustee Ltd’s ongoing rights under its easement.  That might be a point of criticism of the resource consent application, but it does not alter the rights of Kiwi Trustee Ltd under its easement and will not affect this court’s assessments of the parties’ rights under the easement.  Nor, for that matter, will it affect the measure of damages if Kiwi Trustee Ltd does establish liability under any of its causes of action.   In particular, the damages sought in the statement of claim are purely compensatory.   There is no claim to have Ms Lin account for any profits made on the re-sale.  I cannot conceive how the statement of claim could be amended to seek any different relief than that which has been claimed.

[14]     In summary then, I am not satisfied that the agreement for sale and purchase is relevant for the case on either side, and I cannot see how the document can be required to be discovered under the standard discovery test under r 8.7 of the High Court Rules.

[15]     For these reasons I dismiss the application.

[16]     I order Kiwi Trustee Ltd to pay costs on the application to the first defendant. I encourage counsel to confer on costs.  I record that the case has taken no more than a quarter of a day to hear and to give a decision.  The effort required to resist the application would not have been very great.

………………………............

Associate Judge R M Bell