Ohinetahi Ridge Ltd v Witte

[2004] NZCA 20

IN THE COURT OF APPEAL OF NEW ZEALAND

CA122/03

BETWEENOHINETAHI RIDGE LIMITED

First Appellant

ANDANDREW NEIL CAUSER AND JULIA CLAIRE CAUSER

Second Appellants

ANDWILLIAM STUART WITTE AND KAY JEAN WITTE

Respondents

Hearing:18 February 2004

Coram:William Young J
Gendall J
Doogue J

Appearances:  G P Malone and C J Royds for Appellants

D A Wood for Respondents

Judgment:15 March 2004 

JUDGMENT OF THE COURT DELIVERED BY WILLIAM YOUNG J

Introduction

[1]       This is an appeal from a judgment of John Hansen J in the High Court at Christchurch.  It concerns a water easement. 

The people who are affected by the case

[2]       The first appellant (Ohinetahi Ridge Ltd) is the owner of a property in the Lyttelton Harbour basin.  The principals of this company are second appellants, Dr Andrew Causer and Dr Julia Causer.  For ease of reference we will ignore the existence of the company and will refer to the land as if it were owned directly by the Causers.

[3]       The respondents to the appeal are Mr William Witte and his wife Mrs Kay Witte.  They own a property which is adjacent to the Causers’ land.

[4]       The Causer and Witte land is on the uphill side of Governors Bay Road.  Also involved in the dispute (but not parties to the litigation) are Mr Neville Valentine and his wife, Mrs Doreen Valentine.  Their property is on the seaward side of Governors Bay Road (ie. on the opposite side of the road from the Witte and Causer properties but otherwise adjacent to them).

The background to the dispute

The spring

[5]       This case concerns a spring which is situated on the Causers’ property.

[6]       This spring has been the subject of three easements.

The easements

[7]       The first of the easements was referred to in the High Court as the “Koa Mara easement”.  It was created on 12 August 1918 and granted by Mr Arthur Wakelin, who was then the owner of the land on which the spring is situated, to his neighbour, Mr James Power. It permitted the drawing up of “half the water from the said spring”.  The easement was specific as to the position of the pipes through which the water was to be drawn but the plan which depicts this positioning could not be located by the parties. 

[8]       The second easement was created on 23 December 1958.  This easement was granted by the then owner of the land (Jondor Estates Ltd) on which the spring is situated as part of the transaction in which the land now owned by Mr and Mrs Valentine was sold to Governors Bay Transport Ltd.  Given the current ownership of this land, we will refer to this easement as the “Valentine easement”.  The Valentine easement granted Governors Bay Transport Ltd and their successors:

the full free and uninterrupted right liberty and privilege, in common with [Jondor Estates Ltd] to draw water from the water supply system situated on the land … comprising spring well and pipe lines already laid in the said land.

…

To take and convey water for all normal domestic and garden purposes in free and unimpeded flow (except during any periods of any necessary repairing and cleaning) from the said water supply system to the land [being acquired by Governors Bay Transport Ltd] by means of a line of pipes already on the land [retained by Jondor Estates Ltd] as shown by diagram by a firm blue line on the plan annexed hereto and running between the point of connection to the said water supply system marked “stopcock” on the said diagram and a point on the boundary of the land first hereinbefore described as shown on the said diagram.

(Emphasis added)

[9]       The Valentine property is 1,669 square metres in area.  In an affidavit which was filed in the High Court, Mr Witte said:

… [O]ur property is subject to a similar easement in favour of a property to the south owned by Neville Patrick Valentine and Doreen Ann Valentine.  The Valentines have owned and occupied their property for many years, in fact since 1957. The Valentines effectively take their water from the spring on the land owned by the [Causers] by virtue of [the Valentine easement]. 

It will be recalled that Governors Bay Transport Ltd did not acquire the Valentine land until 1958.  The land was not transferred by Governors Bay Transport Ltd to Mr and Mrs Valentine until 1973.  It may be that Mr and Mrs Valentine had an interest in Governors Bay Transport Ltd and were in fact living on the property from or about 1958.  We note in passing that a letter written by Mr and Mrs Valentine in 2002 referred to their occupation of their property for some 34 years which, if correct, would indicate that they moved into the property in 1968.  In any event, whether Mr and Mrs Valentine had occupied the property since 1958 or thereabouts is of little moment.  Given the size of the property, the general evidence given by Mr Witte in his affidavit and the terms of the Valentine easement, it is reasonable to infer that the purpose of the easement was to provide water to the Valentine property for domestic purposes associated with actual or proposed residential use. 

[10]     The house now occupied by the Wittes was built in the 1930s and is on the other side (ie the uphill side) of Governors Bay Road. 

[11]     The diagram that formed part of the transfer which created the Valentine easement showed a half-inch polythene pipe and a stopcock on the uphill side of Governors Bay Road (ie. on land then retained by Jondor Estates Ltd and now owned by Mr and Mrs Witte).  In the context of the case as a whole it seems reasonable to assume that the stopcock was already in position at the time the easement was granted and that it served to allow the Valentine property first access to the water from the spring but with an overflow arrangement providing water back to the house now owned by Mr and Mrs Witte and perhaps for stock purposes as well. 

[12]     The evidence is silent as to whether the Koa Mara easement was being exercised in 1958. 

[13]     The third easement was granted on 3 April 1965.  It was created as part of a transaction in which the then owner of the land on which the spring is situated (Mr Albert Lugg) sold off part of the property (some 95 acres) to Mr James Hayward and retained the balance of some 8 acres which is now owned by Mr and Mrs Witte.  The spring was on the land which was sold.  So Mr Lugg retained for himself an easement conferring on himself and his successors (including Mr and Mrs Witte):

the full free and uninterrupted right liberty and privilege in common with [Mr Hayward] to draw water from the water supply system situated on the land firstly described comprising spring well storage tank and pipe lines already laid in and on the said land TO THE INTENT that the same shall be an easement …

TO take and convey water for all normal domestic and garden purposes and watering of stock in free and unimpeded flow (except during any periods of necessary repairing and cleaning) from the spring well and storage tank marked “spring” through and along the half-inch pipe shown as a firm blue line and marked “proposed water pipeline easement” on Deposit Plan No 23639.

TO maintain over and under the soil of the land firstly described a line of pipes of an internal diameter of not more than 1 inch.

TO enter upon the land [sold to Mr Hayward] with or without engineers and workmen and with or without any necessary vehicles, implements, tools pipes and material of any kind for the purpose of cleansing the said spring and laying maintaining repairing and from time to time renewing the said storage tank and pipe line and opening up the soil of the land firstly described as shall be necessary thereto.

AND [Mr Lugg] DOTH HEREBY COVENANT with the [Mr Hayward] as follows that is to say:

THAT [Mr Lugg] will at his own cost if required to do so by [Mr Hayward] forthwith instal [sic] a valve or stopcock in his existing storage tank on his own property or if necessary fit a new storage tank to take such valve or stopcock and will keep and maintain the said storage tank and valve or stopcock and pipelines in good and serviceable repair and shall not nor will permit the same to fall into disrepair nor do damage of any kind nor become a nuisance by bursting leakage or any cause whatsoever and will not waste or allow the wastage of any water from the spring well.

AND [Mr Hayward] DOTH HEREBY COVENANT with [Mr Lugg] as follows that is to say:

[Mr Hayward] will do nothing … whereby the free and unimpeded flow of water from the spring and along the pipe may be in any way interrupted or restricted and [Mr Hayward] will not deliberately damage the spring or pipe but this covenant shall not require [Mr Hayward] to take special or additional precautions in the cultivation grazing or other use of the land to prevent such interference or damage.

…..

THAT all expenses of future renewals upkeep and maintenance of the spring well, storage tank and pipe line shall be borne by the users thereof in such proportions as they shall agree upon….

(Emphasis added)

It is appropriate to refer to this easement as the “Witte easement”.

[14]     Given the similarity of wording, it appears that the Valentine easement was used as a starting point for the drafting of the Witte easement.  But there are some differences:

1.The water supply system is differently described in the two easements.  In the Valentine easement this is described as comprising “spring well and pipeline already laid in the said land”.  In the Witte easement this is described as comprising “spring well storage tank and pipelines already laid in and on the said land”. 

2.The Valentine easement provides for the water to be used only for “all normal domestic and garden purposes” whereas the Witte easement contemplates the use of water for such purposes and also for stock. 

3.There is an express covenant in the Witte easement but not in the Valentine easement preventing the interruption or restriction of the free flow of water from the spring. 

4.Up until 1965 the pipe would appear to have been half an inch in diameter.  The Witte easement permitted the laying of a pipe about one inch in diameter and the current pipe in fact is 20mm in diameter. 

5.The Witte easement provided for a valve or stopcock to be fitted to the existing storage tank (or a new storage tank to be fitted to take such a value or stopcock) and this was presumably attended to after the easement was executed.  Such a system is currently in place, ie there is a second stopcock.  This regulates the flow of water between the Causer property and the Witte property.

[15]     In 1988 the owners of the land on which the spring is situated acquired the land in favour of which the Koa Mara easement had been created.  This resulted in the Koa Mara easement being extinguished by unity of seisin. 

The current structures

[16]     The current structures work in this way.  Water is drawn from the spring and gravity fed into a silt collection barrel.  A system of pipes, storage tanks and stopcocks then operates so that the water is available first to the Valentine property, and then, when their storage tanks are full, to the Witte property and then, and only when the Wittes’ storage tanks are full, becomes available to the Causer property.  The current pipe is 20mm in diameter and is thus larger than the half-inch pipe which would appear to have been in place in 1965.  Prior to the building of a house on the Causer property around ten years ago, the overflow water fed a stock trough.  It appears that it is now used primarily to supplement a domestic rain water supply for the house on the Causer property. 

The current dispute

[17]     The history of the current dispute between the Causers and the Wittes is of little moment here.  It is sufficient to say that the Causers acquired their property in August 2002 and almost immediately there were difficulties between them and the Wittes in relation to water from the spring. 

[18]     Broadly the position taken by the Wittes is that they are entitled to draw water from the spring for “all normal domestic and garden purposes and watering of stock” and that the Causers are entitled only to the surplus, after water required by the Valentines and the Wittes has been taken. 

[19]     The Causers disagreed with this stance.  They took the position that the phrase “in common” in the Witte easement meant that they had an entitlement to the same amount of water as the Wittes.  So in November 2002 they made unilateral changes to the silt barrel by inserting a 20mm pipe to provide their own water supply independently of the overflow system.  This prompted the present litigation although, as an interim measure, the Causers have ceased diverting water from the silt barrel.

Evidential difficulties

[20]     There are two evidential difficulties with the case.

[21]     The first relates to the history of the structures associated with the water supply system.  The current structures are consistent with the terms of the Valentine and Witte easements but there is no direct evidence as to the exact nature of the structures in place in 1958 and 1965.  It is clear that the half-inch pipe which was used up until 1965 has been replaced with a pipe of larger diameter, ie. the 20mm pipe.  As well, it is clear that the stopcock provided for in the Witte easement has been installed.  That apart, there is no evidence to suggest any alteration of any significance to the physical structures in existence in 1958 and 1965. 

[22]     A second evidential difficulty is associated with the Koa Mara easement.  Unclear on the evidence is the location of the pipes permitted by this easement.  Also unclear is the extent, if any, to which this easement was being used in 1958 when the Valentine easement was created and in 1965 when the Witte easement was created. 

[23]     There is no evidence to suggest that, within living memory, the Koa Mara easement has been exercised.  Rather, the evidence as a whole supports the inference that the water supply system associated with the spring has been used since the 1930s or thereabouts for purposes which included the domestic supply of the house situated on the Witte property and, probably from somewhat later, providing water to the house now situated on the Valentine property (although when that house was built is not dealt with in the evidence).  Before a house was built on the Causer property the overflow water produced by the system appears to have been used for stock purposes. 

[24]     The language used in the Valentine and Witte easements is inapt if at the time those easements were created water was being extracted from the spring pursuant to the Koa Mara easement.  If such extraction was occurring, we would have expected that this would have been recognised one way or another in the Valentine and Witte easements. 

[25]     So the evidence as a whole, along with the terms of the Valentine and Witte easements, suggests that the Koa Mara easement was not being exercised in either 1958 or 1965. 

The proceedings in the High Court

[26]     As a result of the unilateral alterations made to the water supply system by the Causers, the Wittes applied for declaratory relief in the High Court.  Their position was that their entitlement to water under the easement was paramount and that the Causers were entitled only to the overflow produced by the existing structures. 

[27]     The Causers challenged these contentions.  They sought to claim for themselves the benefit of the Koa Mara easement and in any event contended that the Witte easement did not prevent them taking directly the water produced by the spring.  They relied heavily on the phrase “in common” which appears in the Witte easement.

[28]     In his judgment, John Hansen J concluded that any changes made to the existing supply system since 1965 must have been by consent and agreement.  He took the view that he should construe the Witte easement by reference to the physical structures on the ground.  Accordingly he saw the Causers’ entitlement to water from the spring as confined to the water which the existing system made available to their property.  In this context, commonality of interest meant simply that neither party had the right unilaterally to take action to alter the system in place.

[29]     John Hansen J did not deal in great detail with the arguments advanced by the Causers associated with the Koa Mara easement.  He noted that the easement had been “extinguished some time ago” and he plainly saw it as irrelevant. 

[30]     Accordingly the Judge made the following declarations:

The easement created by transfer 658334 granting the [Wittes] and the [first appellant] rights in common expresses the rights to be subject to all of the rights outlined in clauses 1 to 11 in the transfer granting easement.

The rights of the [Wittes] to draw water in a full and unimpeded flow in the manner expressed in the easement is paramount and any interference by the [Ohinetahi Ridge Ltd or the Causers] in the water supply system will interfere with those rights.

[Ohinetahi Ridge Ltd and the Causers] are entitled to take water only by way of overflow from the tank upon which a ball-cock operates on the [Wittes’] property.

The arguments advanced on behalf of the Causers in this Court

[31]     Mr Malone who appeared for the Causers in this Court advanced two key arguments.

[32]     The first was based on the Koa Mara easement.  Mr Malone claimed that, in 1965 when the Witte easement was created, up to one half of the water produced by the spring was subject to the Koa Mara easement.  Therefore, in 1965, Mr Lugg was not entitled to reserve to himself the right to more than half the water produced by the spring.  Mr Malone went on to submit that when the Koa Mara easement was extinguished, the right to the half of the water supply covered by that easement reverted to the Causers’ predecessor in title.  In the course of oral argument Mr Malone put a related argument to us.  He said that given the existence of the Koa Mara easement (which was still extant in 1958 and 1965) the Valentine and Witte easements could not sensibly be construed as providing for any paramount entitlement to the water produced from the spring. 

[33]     The second principal argument advanced by Mr Malone was that John Hansen J erred in his interpretation of the phrase “in common”.  Mr Malone contended that this phrase (which appears in both the Valentine and Witte easements) means that the water produced by the spring should be shared between all parties with a relevant interest, that is the Causers, the Valentines and the Wittes.  He said that the phrase was inconsistent with any parties having paramount rights. 

[34]     Mr Malone also invoked more general considerations. He contended that the Valentine and Witte easements could not be sensibly construed as providing for them to have first access to the full flow produced by the spring and that the unilateral changes by the Causers to the structure are acceptable provided they do not substantially interfere with or derogate from the Witte and Valentine easements.  Allowing the Causers to draw more water from the spring would not substantially interfere with the rights of the Valentines and the Wittes to a free flow of water.  He also contended that the Causers are not bound by the physical structures they acquired, but only by the terms of the easements.

The submissions advanced on behalf of Mr and Mrs Witte in this Court

[35]     Mr Wood for the Wittes contended in his oral submissions that the logical inference to be drawn from the case as a whole was that the Koa Mara easement was not being exercised in 1958 or 1965.  But, in any event, even if it was being exercised then, the right created by it did not accrue to the Causers’ predecessor in title when the easement was extinguished. 

[36]     In other respects Mr Wood adopted the approach of John Hansen J.

Discussion

General

[37]     A right to extract water is properly the subject of the law of easements and is not a profit à prendre, see Manning v Wasdale (1836) 5 Ad & El 758 and Race v Ward (1855) 4 El & Bl 702. So this case falls to be determined by reference to the construction of the easements in question (particularly, of course, the Witte easement) and the general backdrop provided by the law of easements.

[38]     The enforcement of an easement can proceed on two overlapping bases. 

[39]     If the actions of the owner of the servient tenement are specifically contrary to the terms of the easement, then a claim in contract will lie to enforce the easement.  So if there is an express prohibition in an easement, that can be enforced as a matter of contract.

[40]     More commonly, an easement will be in general terms and the issue will be whether the actions complained of, although not specifically prohibited by the easement, are an unreasonable interference with the rights created by the easement.  A claim in these circumstances is in nuisance. 

[41]     It is important to recognise as well that the excessive use of an easement by the grantee may itself be wrongful and warrant a claim in nuisance. 

The interpretation of the Witte and Valentine easements

[42]     It is clear that the Witte easement must be interpreted in its proper context, that is the factual matrix which existed at the time.  The same is true of the Valentine easement. 

[43]     That factual matrix plainly included the water supply system in place in 1958 and 1965 and as contemplated by the Witte easement.  Each easement refers to the existing water supply system.  Neither can sensibly be construed otherwise than by having regard to water supply system as it was at the relevant time. 

[44]     Construed in that way, the meaning to be placed on the easements is reasonably clear.  Water produced from the spring is first to be available to supply the storage capacity on the Valentine property and then the storage capacity on the Witte property with only the surplus being available to the Causer property.  Of course, the water provided to the Witte and Valentine properties may only be used for the purposes specified in the relevant easements.  We note that there could be scope for argument whether the rights of the Wittes and the Valentines are confined to the storage capacity in existence on their properties when the easements were created, see paras [53] and [54] below. 

[45]     As we have already indicated, the wording of the easements and the evidence (exiguous though it is) as to the evolution of the structures and their purposes suggest that as at 1958 and 1965 the Koa Mara easement was not being exercised.  Against that background, we do not see how the extinguishing of this easement in 1988 could have released the Causers’ predecessors in title from the covenants in the Valentine and Witte easements.

[46]     In approaching the case in this way we are not assuming that the Koa Mara easement ceased to be of legal effect before 1988.  So we are prepared to accept that, prior to 1988, the rights conferred by the Witte and Valentine easements were subject to the Koa Mara easement and thus to the contingency that “half the water from the …. spring” might be extracted for the purposes of the Koa Mara easement.  We do not, however, see the extinguishing of the Koa Mara easement as making the rights of the Wittes and the Valentines subject to the quite different contingency that up to half the water from the spring might be extracted for the purposes of providing the Causers with a domestic water supply. 

[47]     Are the Causers entitled to divert water from the spring in such a way as to reduce the flow of water from the spring into the existing water supply system? 

[48]     The scheme of the easements provides for a “full, free and uninterrupted right, liberty and privilege … to draw water from the water supply system” with these rights to be exercised “in common” with the owner of the land on which the spring is situated.  It is important to recognise that the right which is held “in common” is to draw water from the water supply system.  Given that the Causers have entitlements in relation to the water which is produced by the existing water supply system, it would be destructive of the scheme of the easements as a whole to regard them as entitled to divert water before it enters the physical structures which form part of that water supply system.  This is all the more so as the water supply system which is defined in the two easements includes the spring itself. 

[49]     More particularly, diversion of water which would otherwise flow from the spring and through the existing physical structures would necessarily result in the “free and unimpeded flow of water from the spring” being restricted.  So we would regard any interference by the Causers with the flow of water from the spring into the physical structures which form part of the water supply system (and indeed any “upstream” interference) as a breach of the covenant to do nothing “whereby the free and unimpeded flow of water from the spring and along the pipe may be in any way interrupted or restricted”.  We would likewise see any attempt by the Causers to interfere with the spring “upstream” as a breach of the covenant not to “deliberately damage the spring”.

[50]     Are the Causers entitled to tap into the water supply system so as to provide themselves with a flow of water additional to the overflow provided by the existing structures?

[51]     Essentially for the reasons set out in paras [48] and [49], we would regard any diversion of water from the existing water supply system direct to the Causers’ property as a breach of the entitlement of the Valentines and the Wittes to a “free and unimpeded flow” from the water system and an unjustified restriction on that flow, and thus a breach of the relevant covenant in the Witte easement. 

[52]     These conclusions mean that we are substantially against the Causers on the appeal and that we broadly agree with the approach advanced by Mr and Mrs Witte and upheld by John Hansen J.  There is, however, one aspect of the case which gives rise to some concern on our part. 

[53]     What is not clear to us is whether the storage tanks used by Mr and Mrs Valentine and Mr and Mrs Witte are of the same (or broadly the same) capacity as the tanks which were in existence or were contemplated in 1958 and 1965.  If tanks of significantly greater capacity have been constructed (or were to be constructed in the future) then that might – and we emphasise might – raise issues as to the scope of the rights conferred pursuant to the easements. 

[54]     This case has been about the actions of the Causers and their entitlement (if any) to take water directly from the existing water supply system.  There has been little or no focus on the extent to which the Wittes and the Valentines may use water from the spring.  We did not hear argument whether the rights of the Wittes and the Valentines to water are constrained by the size of the storage tanks in place at the time the easements were created or the related question whether substantial increase in the size of those water tanks might represent an unreasonable and excessive use of the easements. 

[55]     For this reason we think that the second of the three declarations made by John Hansen J (see para [30] above) may be expressed in terms which are too absolute because that declaration (if construed literally) might be thought to permit the Wittes (and by implication the Valentines) to increase the size of their storage tanks to such an extent as to eliminate the possibility of supply of water to the Causer property.  We are of the opinion that the other declarations sufficiently capture the entitlements of the parties and that, in those circumstances, and given the discussion which appears in this judgment, we think that the second of the declarations can be deleted. 

[56]     Before departing from the case, there  are three other comments which we think it appropriate to make:

1. The scheme of the easements and the physical structures in place leave the Valentines and the Wittes with first access to the water produced by the spring and this will be most relevant when water requirements are at their highest and when, correspondingly, the flow from the spring is likely to be at its most limited. 

2. Associated with this point, the Causers have an absolute entitlement to the overflow produced by the system.  So there is nothing to stop the Causers accumulating the overflow water in whatever facilities they choose to provide.

3. Against that background, a common sense and practical solution to the current situation would appear to be called for ahead of any further resort to law.  So the remarks in paras [53]-[55] should not be regarded by the parties (and particularly the Causers) as suggesting or inviting further litigation over the spring and the associated easements.

Disposition

[57]     Accordingly, we amend the declarations made by John Hansen J so that they now read:

1.The easement created by transfer 658334 granting the Plaintiffs and the First Defendant rights in common expresses the rights to be subject to all of the rights outlined in clauses 1 to 11 in the transfer granting easement; and

2.The First Defendant and/or the Second Defendants are entitled to take water only by way of overflow from the tank upon which a ball-cock operates on the Plaintiffs’ property.

Otherwise the appeal is dismissed.

[58]     The appellants have been substantially unsuccessful in this appeal and accordingly they are to pay costs in the sum of $6,000 to the respondents together with disbursements (including the travel and accommodation expenses of counsel) to be agreed by the parties and, in default of agreement, to be fixed by the Registrar.

Solicitors:
Fletcher Vautier Moore, Nelson for Appellants
Kate Langham Law, Auckland for Respondents