Victoria Lane Remuera Limited v White
[2021] NZHC 2228
•27 August 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-000744
[2021] NZHC 2228
IN THE MATTER OF an application under s 319 of the Property Law Act 2007 BETWEEN
VICTORIA LANE REMUERA LIMITED
Applicant
AND
HARRY ROBERT IVAN WHITE, CHRISTINE MORRIN WHITE and ANTHONY CLIVE SANDLANT
First Respondents
ELIZABETH MARY SELAK, ALLAN HARDLEY DICKINSON and SELAK TRUSTEES LIMITED
Second RespondentsANTHONY FOX LAITY, ANTHONY ROGER HUMPHREY LAITY, GRAHAM ANDREW MCKENZIE, JUDITH
CATHERINE LAITY and VERYAN FAYE LAITY
Third Respondents/Contd. over
Hearing: 9 August 2021 Appearances:
J Donkin for Applicant
T Rainey for First Respondents
No appearance by or for Second to Thirty First RespondentsJudgment:
27 August 2021
INTERIM JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 27 August 2021 at 3.00 pm Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:…………………………
VICTORIA LANE REMUERA LTD v WHITE [2021] NZHC 2228 [27 August 2021]
HUGH WILLIAM BAIRD LITCHFIELD and PAUL LEWIS MIDDLEMASS
Fourth Respondents
LINDA GHEN YOUNG
Fifth Respondent
ALASTAIR MACCORMICK, RAEWYN JOY MACCORMICK and JUDITH MARJORIE POTTER
Sixth Respondents
IRENE HESSEY HARGRAVE
Seventh Respondent
PENGUIN NOMINEES LIMITED
Eighth Respondent
WILLIAM JAMES MACKEY and
ELAINE MERLE YOLLAND-MACKEY
Ninth Respondents
WAYNE TREVOR DERRICK and NIGEL PHILLIP SMITH
Tenth Respondents
ROSEANNE PHILIPPA O’LOGHLEN MEO and CHRISTOPER DAVID GILL
Eleventh Respondents
FRANCIS HUGH WEBSTER
Twelfth Respondent
BEVERLY PHYLLIS GENTLES
Thirteenth Respondent
CYNTHIA ANGELA MCNICHOLL, DAVID JOHN ROSS and DEREK SINCLAIR FIRTH
Fourteenth Respondents
CURE KIDS
Fifteenth Respondent
BANK OF NEW ZEALAND
Sixteenth Respondent
/Contd…over
ERICA ALICE MOORE, PETER JAMES MOORE and WAYNE ROSS
STOLLERY
Seventeenth Respondents
GRAEME LOUIS COLLINSON and MARIA LUISA LUCIA COLLINSON
Eighteenth Respondents
WAVEFIT LIMITED
Nineteenth Respondent
REVAAH GOURMET LIMITED
Twentieth Respondent
AOTEAROA NEW ZEALAND INVESTMENT LIMITED
Twenty First Respondent
AS NO 1 LIMITED
Twenty Second Respondent
FEDERAL HOLDINGS LIMITED
Twenty Third Respondent
WENDY RUTH HAWKE
Twenty Fourth Respondent
ANTHONY KEENAN and SHAN LU
Twenty Fifth Respondents
ASB BANK LIMITED
Twenty Sixth Respondents
BED BATH N’TABLE NZ PTY LIMITED
Twenty Seventh Respondent
JONES FAMILY CHIROPRACTIC LIMITED
Twenty Eighth Respondent
NEW ZEALAND POST LIMITED
Twenty Ninth Respondent
EASTERN BAYS HOSPICE TRUST
Thirtieth Respondent
DENNIS MADDEN
Thirty First Respondent
Introduction
[1] The applicant, Victoria Lane Remuera Ltd (“Victoria Lane”) wishes to build an apartment complex on a property situated at 4 and 4A Victoria Avenue, Remuera, Auckland (“the development site”). It wants to undertake the construction works using a flat top tower crane. The main boom and the counterweight boom of the crane will, from time to time, pass over adjoining properties at a height of approximately 33 metres above ground level.
[2] There are 31 persons or entities whose properties lie under the slew path of the main boom. Victoria Lane approached each of them seeking consent to its proposal. Some consented but others opposed or remained silent. As a result, Victoria Lane has brought an originating application seeking an order that it be authorised to enter and re-enter over the neighbouring properties by using a flat top crane for the purpose of erecting the proposed apartment complex.
[3] A notice of opposition was filed by the first respondents – Harry White, his wife, Christine White, and Anthony Sandlant (jointly “the Whites”). They own a property at 6 Victoria Avenue. It enjoys access via a lane which immediately abuts both their property and the development site. The front yard of their property and approximately half of their house lies underneath the proposed crane’s slew path.
Procedural issues
[4]Various affidavits were filed by Victoria Lane and the Whites.
[5] One of the affidavits filed by the Whites was from Warren Chapman, an engineer and project manager. He prepared a report on the use proposed to be made of the flat top tower crane and whether or not there are other viable means of providing access to the development site for construction purposes.
[6] Mr Chapmans’ evidence was filed late. Victoria Lane objected and I heard from counsel in relation to this issue at the commencement of the hearing. Mr Donkin, for Victoria Lane, asserted that his client was prejudiced by the late filing of the affidavit and asked me to rule that it should not be read. I indicated that I was not
prepared to take this step. It seemed to me that the Court should, in the interests of justice, have all relevant materials before it. I indicated that I would however allow Victoria Lane an adjournment if it wanted time to address the matters in Mr Chapman’s affidavit. I also indicated that I would be prepared to consider an order in Victoria Lane’s favour for any wasted costs it might incur as a result of any adjournment.
[7] After consulting with his client, Mr Donkin confirmed that Victoria Lane wished to proceed. Mr Rainey, appearing for the Whites, advised that he would endeavour to put all relevant matters in Mr Chapman’s report to the deponents for Victoria Lane (all of whom were being called for cross-examination) so that they would have the opportunity to comment on them. The hearing proceeded on this basis.
[8] Each of the deponents who had filed affidavits in support of Victoria Lane’s application – Richard Kroon, Andrew Moore and Donald Crowe – was cross- examined by Mr Rainey. Victoria Lane did not seek to cross-examine the deponents who had sworn affidavits in support of the notice of opposition, namely Mr White and Mr Chapman.
Factual background
[9] Victoria Lane is a property development company. It has undertaken property developments elsewhere in and around Auckland, including at Browns Bay and on Waiheke Island.
[10] The proposed apartment complex will comprise 23 units and associated amenities. The building will be five levels high.
[11] Victoria Lane has obtained resource consent for the development. A consent was initially obtained for stage one on 14 May 2019. That consent related to 4A Victoria Avenue only and it permitted a 17 unit complex. A second consent was granted on 1 September 2020. This consent relates to both 4 and 4A Victoria Avenue and is for a 23 unit complex.
[12] The development site is long and narrow – approximately 100 metres long by 20 metres wide but widening towards the western end of the site. It has neighbours on three sides. Some are commercial and others are residential. The fourth side affords street access to Victoria Avenue.
[13] Victoria Lane has engaged CMP Construction Ltd (“CMP”) as its head contractor and project manager for the construction works.
[14] It was identified at a relatively early stage that a crane would be necessary. Mr Moore, a construction manager for CMP, told me that an analysis was undertaken as to what type of crane would be suitable and that CMP looked at 10 or 12 different types of tower cranes, including luffer cranes.1
[15] Victoria Lane wishes to use an electric flat top or “hammerhead” type crane called a Liebherr 280ECH. It proposes that the crane will be erected in the centre of the development site where the site is approximately 20 metres wide. The tower of the crane will rise some 36 metres into the air from basement level on the development site (approximately 33 metres into the air above the existing ground level). The main boom of the crane is 50 metres long. It will be able to reach each end of the development site. The counterbalancing boom (also known as the machine deck) is 20 metres long. If an order is made as sought by Victoria Lane, both booms will from time to time pass over adjoining properties at a height of approximately 33 metres above ground level.
[16] Victoria Lane and CMP have satisfied all necessary pre-start conditions imposed by the Council. Two existing houses on the development site have already been demolished and all potentially contaminated material has been removed. An application for building consent was lodged with the Council on 3 December 2020.
1 Both luffer cranes and flat top cranes are tower cranes.
A luffer crane has a gib or boom connected close to the top of the tower. The gib pivots from the tower and is raised and lowered, along with any materials being lifted. The gib from which the materials are suspended slews around the tower to the drop-off point where the gib and the materials are lowered to the ground.
A flat top crane has a fixed boom close to the top of the tower. Materials are lifted up to the boom and brought in close to the tower. The boom then slews around the tower until it is over the drop- off point. The materials then travel along the boom before being lowered to the ground.
Consent was issued relatively recently. The development site is now ready for piling but work cannot continue until this application is resolved.
[17] Victoria Lane has obtained funding for the construction project from First Mortgage Custodians Ltd. It was the evidence of Mr Kroon, Victoria Lane’s sole director, that First Mortgage Custodians will not advance funds for the works until all of the various pre-conditions in the construction contract have been met. One of those conditions requires that Victoria Lane obtain all necessary consents and access rights before construction can begin. It was also Mr Kroon’s evidence that, if Victoria Lane cannot draw down funding once CMP is ready to begin construction, the development could stall. There is a risk that the funding could be cancelled. Delay to the project could also impact Victoria Lane because, according to Mr Kroon, at least six of the sale and purchase agreements that Victoria Lane already has with prospective purchasers contain “sunset” clauses. Purchasers can avoid the agreements if there is any significant delay. If Victoria Lane loses the benefit of these pre-sale agreements, then its funding will again be at risk.
Consultation with neighbours
[18] On 24 September 2020, Mr Kroon sent a letter to adjoining neighbours advising them that the construction works would be commencing in November 2020 and that the works would last approximately two years. He informed neighbours that CMP was the nominated contractor. At the same time, CMP sent an accompanying letter to all neighbours. It informed them that a tower crane would be erected in the centre of the development site. It advised that no loads would be lifted over any adjoining properties but that when the crane is not in use, it is required to “free-vane” in the wind. As a result, the boom would swing over adjacent properties.
[19] After sending these letters, representatives of Victoria Lane and/or CMP met with some of the neighbours. The Whites and one other neighbour raised concerns.
[20] On 13 October 2020, Mr White responded to Mr Kroon, recording his views. He told Mr Kroon that Victoria Lane did not have an air space agreement with him and that it had no right to encroach over his and his wife’s property.
[21] Mr Kroon responded on 16 October 2020. He advised Mr White that there were alternatives – two smaller cranes or a large single luffer crane. He noted that either would slow the project down. He said that using a flat top crane would reduce the construction time by around five to six months.
[22] Mr White spoke to his neighbours and had various meetings with Mr Kroon. Agreement could not be reached.
[23] On 10 March 2021, Victoria Lane’s solicitors wrote to all affected neighbours detailing the use that Victoria Lane proposed would be made of the crane. The letter confirmed that:
(a)The proposed crane is an electric flat top tower crane.
(b)The proposed crane will be erected in the middle of the development site.
(c)It is not feasible to use a mobile crane.
(d)Use of an electric flat top crane will reduce the time it will take to complete the development by around five months.
(e)The boom of the proposed crane will be 36 metres above the basement level on the development site.
(f)The proposed crane will not lift loads over any of the neighbouring properties and it will only be operated at the times that construction work is permitted under the resource consent – i.e. Mondays to Saturdays, between 7:30 am and 6:30 pm.
(g)When the proposed crane is not in use, it will free vane (rotate with the wind) as a safety measure. Its booms will then slew above neighbouring properties.
[24] At the time the letter was written, it was anticipated that the crane would be required from May 2021 to November 2022 (although it was noted that that time might need to be modified depending on how the project progressed). It was asserted that the operation of the crane would not physically impact neighbouring properties in any way nor impede access by neighbours to their properties. Neighbours were invited to respond to the letter, indicating whether or not they agreed to the proposed use of the crane. Neighbours were also advised that, should it be necessary, Victoria Lane would apply to this Court, naming them as respondents to any application. Neighbours were invited to raise any issues they might have with the solicitors.
[25] There were difficulties in serving some of the neighbours. In a minute issued on 6 May 2021, Brewer J waived strict compliance with the notice requirements.
[26] The originating application was filed on 23 April 2021 on notice. It has been served on all neighbours. The second, third, ninth, eleventh, twelfth, fourteenth, fifteenth, sixteenth, twenty third, twenty fifth, twenty ninth and thirty first respondents consented to the proposed intrusion into their air space. The Whites filed a notice of opposition. The twenty first respondent, Aotearoa New Zealand Investment Ltd, also lodged a notice of opposition. It has managed to resolve matters with Victoria Lane and its opposition has been withdrawn. Other respondents have taken no steps.
Relevant statutory provisions
[27] The application is brought pursuant to ss 319 and 320 of the Property Law Act 2007 (“the Act”). Relevantly, those sections provide as follows:
319Owner or occupier of land may apply to court for order authorising entry onto or over neighbouring land
(1)A person may apply to a court for an order under section 320 if the person is an owner or occupier of any land who wishes to enter onto or over any neighbouring land for any of the following purposes:
(a)to erect, … the whole or any part of any structure on the applicant’s land; or
(b)to do any other necessary or desirable thing in relation to the applicant’s land.
…
320Powers of court making order authorising entry onto or over neighbouring land
(1)On an application under section 319(1), the court may make an order authorising the applicant to do either or both of the following things:
(a)to enter and re-enter onto or over the neighbouring land at reasonable times, with or without any employees, agents, or contractors and any aircraft, boats, vehicles, appliances, machinery, and equipment that are reasonably necessary for the purposes specified in the order:
…
(2)An order under subsection (1) must specify—
(a)how and when entry is to be made; and
(b)any other conditions that the court thinks fit to impose.
(3)Those conditions may relate to all or any of the following matters:
(a)the period of time during which the entry onto or over the neighbouring land is authorised:
(b)the hours of the day or night during which the work may be done:
(c)the preservation of the safety of persons or property on the neighbouring land:
(d)the maintenance of adequate access to the neighbouring land:
(e)the restoration of the neighbouring land to its former condition:
(f)the provision of security or indemnity to secure the performance of any condition of the order:
(g)the making good of any damage caused by the entry onto or over the neighbouring land or the reimbursement of the owner and, if applicable, the occupier of the neighbouring land for any costs, expenses, or loss arising from the entry:
(h)any other relevant matters.
(4)Before exercising any powers conferred by an order made under subsection (1), the applicant must serve the order on the owner and, if applicable, the occupier of the neighbouring land concerned.
[28] The power conferred on the Court is remedial. The sections are expressed in broad terms and relief can be granted when the Court considers it to be appropriate to do so.
[29] Application can be made where the owner or occupier of land wishes to enter onto or over a neighbour’s land for any of the defined purposes set out in s 319(1). There is no particular hurdle an applicant has to get over. In particular, an applicant does not have to show that permission to enter onto or over a neighbour’s land is “necessary” or that there is no other way of achieving the purpose or purposes for which consent to enter is sought.
[30] Similarly, the Court’s power to make an order under s 320(1), while discretionary, is not dependent on the Court being satisfied to any particular level. Rather, the Court is given a broad discretion to authorise an applicant to enter onto or over neighbouring land along with any persons or equipment that is reasonably necessary for the purpose or purposes specified in the order. Orders can be made on such terms and conditions as the Court thinks fit to impose.
[31] In effect, the Court is empowered to make a pragmatic but principled decision in circumstances where neighbours are unable to resolve disputes that have arisen between them.2
Victoria Lane’s application – analysis
[32] The Whites do not want to stop the development and it is common ground that the dimensions of the development site require a crane of some kind capable of moving materials from a loading bay on Victoria Avenue to the rear of the property while construction is being undertaken. There is no other practical way of undertaking the development.
2 See Guo v Bourke [2017] NZCA 609 at [12] and Body Corporate 329331 (In administration) v Escrow Holdings Forty-One Ltd [2019] NZHC 600 at [30].
[33] The proposed apartment complex incorporates pre-cast concrete panels. They will be made in Whangarei and transported by truck to the development site. Each panel weighs 5.6 tonnes and any crane has to be large enough to lift these panels. It would be possible to use smaller lighter panels but this would increase the time taken to complete the construction works and add considerable cost to the project. The site is 100 metres long. If the crane is placed in the centre of the site, it has to be capable of lifting 5.6 tonnes at a distance of 50 metres from the tower. The requirement dictates the size of crane that is necessary.
[34] It was Mr Moore’s evidence that a mobile or crawler train cannot be used either on Victoria Avenue or on the site due to its width and size. A mobile crawler crane would not be able to lift the weights needed over the required distance and there would be difficulties getting the crane out after the apartment complex is complete.
[35]This evidence was not challenged before me.
[36] The choice of crane came down to two types – a flat top crane or a luffer crane. Each will intrude into the Whites’ air space although a luffer crane will intrude to a lesser extent. As a result, they understandably favoured a luffer crane.
[37] Victoria Lane has no right to enter into the Whites’ air space without their permission. In the absence of permission, any entry by Victoria Lane would be a trespass.3
[38] At common law, the owner of the soil was presumed to be “the owner of everything up to the sky and down to the centre of the earth”.4 As has been noted in the leading text on land law, considerable inroads have been made on owners’ rights both by modern statutes and the Courts.5 The position at common law has been put into perspective in more recent case law. For example, the common law rule has been described as being “… sweeping, unscientific and impractical …”; it has been said
3 De Richaumont Investment Co Ltd v OTW Advertising Ltd [2001] 2 NZLR 831 (HC) at [37] – considering the predecessor section to s 320, s 128 of the Property Law Act 1952.
4 Corbett v Hill (1870) LR 9 Eq 671 at 673; Mitchell v Mosley [1914] 1 Ch 438 at 450.
5 See DW McMorland and others Hinde, McMorland & Sim Land Law in New Zealand (online ed, LexisNexis) at [6.004].
that, at most, the rule is a statement “… imprecise enough, of the extent of the rights, prima facia of owners of land”.6 It nevertheless remains the law that the owner of a fee simple title in land has rights in respect of the air space above the land. While the owner’s rights and the air space above his or her property do not extend to an unlimited height, the direct invasion of the immediate air space by artificial objects and projections such as wires and cables, advertising signs or the booms of cranes7 amounts to trespass and is actionable per se. Even if no damage has been suffered, the owner of the fee simple can obtain an injunction although, if there is no indefinite trespass and construction is already underway, the operation of any injunction may be postponed8 or the grant of an injunction may be refused.9
[39] Having considered the available evidence, I am satisfied that a flat top crane is the preferred option notwithstanding that it will result in a more significant intrusion into the Whites’ air space.
[40] First, and most importantly, Mr Crowe, an independent crane consultant engaged by CMP, told me that it is far easier to control the load being lifted on a windy day with a flat top crane than with a luffer crane. With a luffer crane, there is a “pendulum” effect. This is because the gib of a luffer crane is raised and lowered, which changes the dynamics of the load “under hook”. When a luffer crane lifts a load and is then slewed to carry the load to where it needs to be put down, the distance from the top of the gib to the load being lifted increases as a result of the pendulum effect (the operator cannot lift the load all the way to the top of the gib). With a flat top crane, the gib is not being raised or lowered. The load is lifted up to the boom before the boom slews around to the drop off point. As a result, the operator of a flat top crane is better able to control the load “under hook”.
[41] Mr Crowe also told me that a luffer crane big enough to carry 5.6 tonnes a distance of 50 metres would need a gib weighing approximately 7.5 tonnes. This has to be factored into the load being lifted. With a flat top crane:
6 Commissioner for Railways v Valuer General [1974] AC 328 (PC) at 351-352.
7 Woollerton & Wilson Ltd v Richard Costain Ltd [1970] WLR 411; Graham v KD Morrison and Sons Pty Ltd [1974] QR 1; Concrete Properties Ltd v Churchill Group Holdings Ltd HC Auckland CP297/88, 18 April 1988; and see DW McMorland and others, above n 5, at [6.006].
8 Woollerton & Wilson Ltd v Richard Costin Ltd, above n 7.
9 Concrete Properties Ltd v Churchill Group Holdings Ltd, above n 7.
You’re not raising a gib, you’re not adding another dynamic to your ability to move a heavy load.
It was Mr Moore’s evidence that a luffer crane is “a lot more unsafe” than a flat top crane. I accept this evidence.
[42] Secondly, it was the evidence of Mr Crowe that a flat top crane is the best fit for the site given the space constraints. The tower of a flat top crane has a smaller footprint, which will only minimally impede other construction activities that must take place around it. A luffer crane requires a bigger base. The evidence suggested that a base for a luffer crane would add approximately $200,000 to the construction costs. Moreover, a bigger base is more intrusive. It would impede building work in the centre of the site. The evidence also suggested that it is harder to get a luffer crane down at the end of the construction works and remove it from the site.
[43] Thirdly, a flat top crane has a greater lifting capacity than most luffer cranes that are presently available given the current construction boom. While luffer cranes are available that can lift 5.6 tonnes 50 metres from the crane tower, the evidence was that they are very hard to find and very expensive to hire. Mr Moore’s estimate was that it would add approximately $800,000 to the construction costs if a luffer crane were used.
[44] Fourthly, the proposed flat top crane is an electric crane. Most luffer cranes are diesel. There are electric luffer cranes available (albeit that CMP does not have one) but the evidence established that there are constraints with the power supply available to the development site. There is sufficient power for a flat top crane but not an electric luffer crane that would be capable of lifting 5.6 tonnes 50 metres. An additional diesel generator would be required for an appropriately sized electric luffer crane and that would create additional noise as well as other forms of environmental pollution.
[45] Fifthly, a luffer crane has a bigger boom cross section and a broader tower than a flat top crane. The gib on a luffer crane capable of doing the job would be approximately 90 metres high when it is lifted up, whereas the proposed flat top crane
will only be 36 metres high. A luffer crane would be more visually intrusive than a flat top crane.
[46] The main advantage of a luffer crane is that it could be kept largely within the confines of the development site. However, the width of the development site means that even a luffer crane would encroach on the air space of adjoining neighbours, including the Whites, particularly when it is free-vaning. Mr Moore told me that the gib of a luffer crane needs to be set at a 70 degree angle to the tower when it is free- vaning. The arc of the gib of a luffer crane large enough to lift the concrete panels the required distance is, according to Mr Moore, some 17 metres in diameter. This is considerably less than the arc of the boom of a flat top crane. Nevertheless, in my judgement and in the round, the balance lies firmly in favour of a flat top crane. A flat top crane would be more efficient. It would be cheaper; this has consequences not only for Victoria Lane but also for the purchasers of the apartments. A flat top crane would reduce the amount of time taken for the construction works. That is in the interests of neighbours and of road users generally. The intersection of Victoria Avenue and Remuera Road is busy. It is in the public interest that works close to the corner be minimised insofar as is reasonably practicable.
[47] Accordingly, I am prepared to grant the application and permit Victoria Lane to enter and re-enter the air space over the Whites’ property with the booms of a flat top crane.
Draft order/conditions
[48] Victoria Lane submitted a draft order through its counsel. The draft incorporated many of the matters that are required to be addressed, for example, how and when entry can be made. There were however some matters which seemed to be unnecessary. For example, the draft order purported to give Victoria Lane consent to erect the crane. It does not need consent to erect the crane. The evidence suggested that the crane will be erected on its own site without any intrusion into neighbours’ air space.
[49] The draft also proposed that the crane should be able to enter and re-enter the air space above the neighbouring properties for the purposes of allowing Victoria Lane
to undertake the construction of the apartment complex. It is only the main boom and the counterweight boom (machine deck) which will be entering and re-entering the air space of neighbouring properties – not the whole crane. The draft order should be amended to record that during work hours, it is only the counterweight boom which may enter and re-enter the air space over neighbouring properties, but that when the crane is not being used and is “free-vaning”, the main boom may enter and re-enter the air space above neighbouring properties.
[50] The draft sought orders in respect of all properties affected. As I understand it, Victoria Lane has reached agreements with a number of the owners. No order is required in respect of these properties.
[51]There are also difficulties with some conditions proposed.
[52] First, the draft order requires Victoria Lane and its employees, agents or contractors to comply with the site-specific safety plan produced by CMP. A final copy of that plan has not been made available. There is a pro forma version of the plan annexed to Mr Moore’s affidavit but it is far from complete. The Whites must be entitled to sight the plan and to comment on it. Further, the Court cannot be asked to impose a condition requiring that Victoria Lane and its employees, agents or contractors comply with a site-specific safety plan, when it has not been given that plan to consider.
[53] Secondly, there is a difficulty with the proposed “make good obligation”. Victoria Lane suggests that a condition be imposed requiring it to make good any damage resulting to the owners of the properties whose air space it will be entering. It also says that it should be required to reimburse the owners of the neighbouring properties in full for their reasonable costs, expenses, or losses caused by the crane works (as defined in the draft). There is nothing however to support these proposed obligations. Victoria Lane has not put in evidence its accounts. The Court does not know whether or not the company has an excess of assets over liabilities or if it is in a position to meet the obligations it is offering. There is no bond proposed. Rather, Victoria Lane seeks to rely on CMP maintaining a public and products liability insurance policy.
[54] This is unsatisfactory. While the evidence suggested that CMP is very experienced in utilising flat top cranes and knows what is required to safely operate such cranes, there must inevitably be a risk, albeit small, of something going wrong. While CMP has public liability insurance in the sum of $20 million, the difficulty is that that insurance simply provides CMP with indemnity cover in respect of claims made against it for compensation as a result of property damage or personal injury caused by it. It does not entitle the Whites, or any of the other owners, to compensation if the crane intrusion causes injury or damage. Rather, the Whites, or any other owners, would have to sue Victoria Lane for negligence or perhaps nuisance. Victoria Lane would look to CMP who would look to its insurer and to any subcontractors employed by it. The subcontractors would look to their insurers. There must be a possibility that one or all of the insurers would defend the claim. An insurance policy held by the head contractor is not the same as an indemnity from the party given consent to intrude into air space, secured by a bond.
[55] On the materials before me at this stage, it is my view that what is required is an indemnity from Victoria Lane, secured by a bond, providing the Whites and other owners affected by the order with an assurance that, in the event of damage, they will be indemnified for all losses suffered as a result.
[56] Mr Rainey suggested that a bond of no less than $1 million would be appropriate.
[57] These matters were put to Mr Kroon when he gave evidence. He acknowledged that the Whites should not be put in the position of having to sue for compensation in the event that there is damage to their property. He accepted that CMP’s public liability insurance policy would not provide adequate cover to the Whites and that an indemnity from Victoria Lane would be preferable. He said:
… I would accept that it would be fairer for me to [indemnify Mr White] for some of the loss, for that situation …
He did however say that a bond would be difficult for Victoria Lane because it already has financial obligations. When I pointed out to him that Mr Rainey was suggesting
an indemnity of $1 million, he responded that this sounded rather high to him. He did however indicate that he was prepared to “entertain something along these lines”.
[58] It is my current view that Victoria Lane should indemnify the Whites and the other owners whose properties will be affected. Further, that indemnity should be secured by a bond and, in the absence of any evidence to the contrary, the sum of $1 million does not seem unreasonable.
[59] After the hearing, Mr Donkin filed further submissions in relation to Victoria Lane’s proposed obligation to make good. These further submissions were filed in breach of r 11.8A of the High Court Rules 2016. A party seeking to file further submissions after a hearing has closed but before judgment has to seek the leave of the Court to do so. Here, no leave was sought. I decline to take the further submissions into account. The Whites have belatedly filed a response, just before this judgment was finalised. I have not taken that response into account either.
[60] Thirdly, it seems to me that Victoria Lane should not be permitted to externalise its costs. Rather, there should be some provision for compensation to the Whites. There will undoubtedly be an adverse effect on their enjoyment of their property. The counterweight boom will slew over a small portion of their property frequently during working hours. The main boom will slew over a large part of their property when it is free-vaning. A wind rose for the area was not produced in evidence but it was Mr Moore’s guess that the main boom will slew over the Whites property perhaps 20 per cent of the time. The Whites are understandably concerned they will be deprived of the use of their garden, particularly by their grandchildren, and that they will be subject to the ongoing stress and inconvenience associated with having a crane boom hanging above their home.
[61] Under s 320(3)(g) of the Act, the Court can make an order conditional upon the payment of money to compensate for any cost, expense or loss arising from the entry. Mr Rainey suggested that a total payment of $50,000 should be made to the Whites. He endeavoured to draw a parallel with awards of compensation made for inconvenience and distress in leaky building cases. I am not convinced that this
analogy is apposite but I do consider that the Whites are entitled to compensation for the intrusion into their air space.
[62] There was no evidence before me as to the agreements made by Victoria Lane or by other developers who have gained permission to enter the air space of their neighbours. I do not know what payments (if any) are made. Nor was there any evidence as to the payments made to owners who are prepared to let out the air space over their properties (for example, for advertising hoardings). Such evidence would have been helpful. Absent evidence, I will have no alternative but to put a best estimate on it.
[63] In my view, a payment should be made by Victoria Lane to the Whites to compensate for the stress and inconvenience caused. I consider that it is preferable to provide for monthly payments rather than a lump sum. There will then be some incentive to Victoria Lane to ensure that the crane is removed from the development site as soon as is reasonably practicable.
[64] Any order should also provide that when the main boom is free-vaning, the lifting hook is to be placed next to the tower. There should be no advertising, flags, bunting or similar attached to the boom or the lifting hook. Except as required by any relevant safety regulations, there should be no lighting on the tower or on the booms.
Directions
[65] For the reasons I have set out, the terms of any order and the conditions for the proposed entry into air space require further thought and perhaps evidence.
[66] I direct the parties to submit a joint memorandum (or memoranda if agreement cannot be reached) setting out a timetable for the filing and service for such further evidence and materials as may be required within 10 working days of the date of this judgment. If a joint memorandum is filed, I will endorse the timetable. If there is disagreement, I will fix a timetable on the papers.
[67] It may be necessary to reconvene the hearing to consider any further evidence or materials adduced.
[68] If the parties can reach agreement on the terms of any order, they should file a further draft incorporating the proposed orders and conditions they consider appropriate for the Court’s consideration. I will then deal with the matter on the papers unless I require the assistance of counsel.
[69]Costs are reserved pending final judgment on the application.
Wylie J
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