Wagg v Squally Cove Forestry Ltd
[2012] NZHC 2763
•19 October 2012
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
CIV 2010-442-445 [2012] NZHC 2763
IN THE MATTER of Property Law Act 2007
AND
IN THE MATTER of an application under section 327 for relief in respect of landlocked land
BETWEEN ASHLEY JOHN WAGG AND OTHERS Plaintiffs
ANDSQUALLY COVE FORESTRY LIMITED AND OTHERS
First Defendants
ANDMARLBOROUGH DISTRICT COUNCIL Second Defendant
Hearing: 11-15 June 2012
Closing submissions and memoranda filed between 26 June 2012 and
28 August 2012
Counsel: J M Fitchett and R D J Fitchett for the Plaintiff
L J Taylor and G Downing for the First Defendant
P J Radich for the Second Defendant
Judgment: 19 October 2012
JUDGMENT OF MALLON J
Contents
Introduction ....................................................................................................................................... [1] Background........................................................................................................................................ [7] The layout of the land ..................................................................................................................... [7] The uses to which the land is put .................................................................................................. [12] The private roads at issue............................................................................................................. [15] Bill Bryants Road (the red and blue road) is built ........................................................................ [21] Subdivisions.................................................................................................................................. [22]
Mr Thornley’s arrival in the Bay .................................................................................................. [25] Access arrangements negotiated with Mr Thornley ..................................................................... [27] The new road/the yellow road is built........................................................................................... [36]
WAGG v SQUALLY COVE FORESTRY LIMITED HC NEL CIV 2010-442-445 [19 October 2012]
Mr Thornley wishes to close red road .......................................................................................... [41] These proceedings and offers to settle .......................................................................................... [44] The suitability of the roads ............................................................................................................. [47] Bill Bryants Road ......................................................................................................................... [47] The yellow road ............................................................................................................................ [52] The foreshore road........................................................................................................................ [54] Taipari Road ................................................................................................................................. [57] The Law ........................................................................................................................................... [59] Landlocked ................................................................................................................................... [59] Relief............................................................................................................................................. [61] Some overarching issues ................................................................................................................. [64] Sea access..................................................................................................................................... [65]
Is land landlocked if it has a legal right of way over Taipari Road?............................................ [72] Is land landlocked if offer re yellow road is reasonable? ............................................................. [76] Was the offer re yellow road reasonable? ..................................................................................... [79] Is land landlocked if access has not been closed? ........................................................................ [93] Agreement in relation to blue road ............................................................................................... [95]
Each plaintiff ’s individual position.............................................................................................. [100] a) McInnes (sixth plaintiffs) ......................................................................................................... [101] Sea access................................................................................................................................... [101] Red road ..................................................................................................................................... [104] Yellow road ..................................................................................................................................[113] Purple road..................................................................................................................................[115] Relief............................................................................................................................................[116]
b) Muir (second plaintiff) ............................................................................................................. [131] Sea access................................................................................................................................... [131] Red road ..................................................................................................................................... [132] Yellow road ................................................................................................................................. [139] Purple road................................................................................................................................. [140] Relief........................................................................................................................................... [141]
c) Zwart (third plaintiffs) ............................................................................................................. [148] Sea access................................................................................................................................... [148] Red road ..................................................................................................................................... [150] Yellow road ................................................................................................................................. [153] Purple road................................................................................................................................. [154] Relief........................................................................................................................................... [155]
d) Bryant/Miller (eighth plaintiffs) .............................................................................................. [156] Sea access................................................................................................................................... [156] Purple road................................................................................................................................. [162] Yellow road ................................................................................................................................. [167] Relief........................................................................................................................................... [177]
e) Wagg (first plaintiff) ................................................................................................................. [189] Sea access................................................................................................................................... [189] Red road ..................................................................................................................................... [194] Yellow road ................................................................................................................................. [195] Purple road................................................................................................................................. [197] Relief........................................................................................................................................... [198]
f) Price/Plum (seventh plaintiffs) ................................................................................................. [201] Sea access................................................................................................................................... [201] Red road ..................................................................................................................................... [204] Yellow road ................................................................................................................................. [205] Purple road................................................................................................................................. [208] Relief........................................................................................................................................... [209]
g) Gould (fifth plaintiffs)............................................................................................................... [210] Sea access................................................................................................................................... [210] The red and yellow roads ........................................................................................................... [214] Purple road................................................................................................................................. [218] Relief........................................................................................................................................... [219]
h) Foley (twelfth plaintiff)............................................................................................................. [220]
Sea access................................................................................................................................... [220]
Purple road................................................................................................................................. [222] Red road ..................................................................................................................................... [223] Yellow road ................................................................................................................................. [224] Relief........................................................................................................................................... [226]
i) Parkins (ninth plaintiffs) ........................................................................................................... [229] Sea access and the purple road .................................................................................................. [229] The red and yellow roads ........................................................................................................... [233] Relief........................................................................................................................................... [238]
j) Whiting (tenth plaintiffs) .......................................................................................................... [239] Sea access................................................................................................................................... [239] The red road ............................................................................................................................... [240] The purple road .......................................................................................................................... [241] The yellow road .......................................................................................................................... [242] Relief........................................................................................................................................... [244]
k) Hollyman (eleventh plaintiffs) ................................................................................................. [246] Sea access and the purple road .................................................................................................. [246] The red and yellow roads ........................................................................................................... [249] Relief........................................................................................................................................... [251] Compensation ................................................................................................................................ [253] Terms of relief ................................................................................................................................ [271]
Appendix 1
Introduction
[1] For over 50 years property owners in Wairangi Bay, in the Marlborough Sounds, have accessed their properties by vehicle on a private road known as Bill Bryants Road. This was a mutually cooperative arrangement which operated without difficulty by the goodwill of the property owners over which the road passed. Since the mid 1990s, the first 650 metres of that road (from the public road end of Bill Bryants Road) has been owned by Squally Cove (the first defendants) or interests associated with Squally Cove’s manager (Mr Thornley).
[2] Squally Cove no longer wishes to adhere to the arrangement in respect of Bill Bryants Road. Mr Thornley has built an alternative road in the Bay and is prepared to grant legal rights of way over that road on a number of conditions. The plaintiffs do not wish to take up the offer in respect of the alternative road. They object to the conditions on which the right of way has been offered and, in any event, prefer and wish to continue to use the road they have always used.
[3] The plaintiffs apply for relief under the Property Law Act 2007, contending that their land is landlocked and seeking an order for reasonable access over the portion of Bill Bryants Road which is owned by Squally Cove. Squally Cove opposes the application and contends that the plaintiffs have reasonable access by sea, or by accepting the offer for access via the new road built by Mr Thornley, or (in the case of some plaintiffs) by accepting an offer in respect of Bill Bryants Road or via previously negotiated arrangements over the new road, Bill Bryants Road or a third road (Taipari Road).
[4] The first issue in relation to each plaintiff is whether their land is landlocked. The issues under this head are:
(a) for all plaintiffs, whether sea access is reasonable access;
(b)for McInnes, whether their existing agreement over the red road provides reasonable access;
(c) for Muir and Zwart, whether a licence proposal over the red road provides reasonable access;
(d) for Parkins, whether an existing licence provides reasonable access;
(e) for all plaintiffs, whether the offer made in respect of the yellow road means that they have reasonable access;
(f) for Gould and Hollyman, whether, in accepting the terms of which access was offered over the yellow road, they have reasonable access;
(g)for Foley, Parkins, Whiting and Hollyman, whether their legal right of way over Taipari Road, is reasonable access.
[5] In respect of any plaintiff that is landlocked the second issue is whether the
Court should grant relief to provide reasonable access and, if so, on what terms.
[6] The Marlborough District Council (the second defendant) has no interest in or intention to acquire the land for a public road. It regards the matter as a private matter between landowners in the Bay. It retains an interest in this proceeding because, if a new right of way were ordered by the Court, the Council would require it to comply with the Council’s standards for roading. It also has an interest to the extent that any rights of way that may be ordered require a permanent access way over Council road.
Background
The layout of the land
[7] This dispute relates to land in the outer Marlborough Sounds in the cove called Squally Cove. Apparently the name reflects the sometimes squally conditions in the area. I had the benefit of a site visit (by helicopter) with representatives of the parties. On that day the conditions were calm and sunny, and the land and surrounding water were very picturesque. The area is typical of other land in the Marlborough Sounds in that the topography is mainly steep hills covered in vegetation, with some flatter areas near the water.
[8] The first to third and fifth to eighth plaintiffs own land on the headland between Whakitenga Bay and Wairangi Bay. Going in a clockwise order around the headland, these landowners are Muir, Zwart, Gould, Wagg, Price/Plum, Bryant/Miller and McInnes. The landowners, between the Zwart and Gould properties, Raharuhi, were the fourth plaintiff but they later discontinued their claim.
[9] The ninth to twelfth plaintiffs own land on the western side of Wairangi Bay leading through Oyster Bay and out to Otarawao. Moving around the next headland, between Wairangi Bay and Oyster Bay, are Whiting, Hollyman, Parkins and Foley. Foley’s land extends from Oyster Bay and out to Otarawao. There are other landowners who have not joined in this proceeding between McInnes and Whiting (including Mr Thornley who is the representative of the defendant in this proceeding), between Whiting and Hollyman, and between Hollyman and Parkins.
[10] The sea borders, or is close to, the boundaries of all these properties at some point. To the east of these properties, but not bordering them, is a public road, known as the Croisilles-French Pass Road (which goes from Okiwi Bay to French Pass). Okiwi Bay is a settlement about 10 miles to the south of these properties. If travelling from Nelson by car, you reach Okiwi Bay before these properties. There is a boat launching ramp at Okiwi Bay.
[11] The following map shows the layout of the properties:
The uses to which the land is put
[12] The lands are zoned Rural under the Marlborough Sounds Resource
Management Plan.
[13] Mr Foley is a permanent resident, as is Mr Thornley and his wife. The other plaintiffs own baches in the Bay. Mr Hollyman has two baches on his property which he sometimes uses himself and sometimes rents out to holiday makers. The recreational pursuits in the area include hunting and fishing. Some of the land is used for grazing stock (for example, there are photographs showing some stock on the flat land in front of what is referred to in this judgment as the Frog subdivision).
[14] Some of the land is used for forestry operations. Wairangi Forestry Partnership purchased land from Bulford Farm Ltd in about 1993 for this purpose. Further land, now owned by Squally Cove Forestry Partnership, was bought from Bulford Farm Ltd in about 1995 also for this purpose.1 Squally Cove Forestry
Partnership is made up of companies that operate as a business partnership. These
1 Various dates are given in the evidence. The dates I have used are approximate only.
companies are named as the first defendant and are referred to collectively in this judgment as Squally Cove. The Partnership is managed by a partnership committee. Mr Thornley is a member of the partnership committee, and is the manager appointed to manage the business of the partnership. Mr Thornley is also manager of the Wairangi Forestry Partnership.
The private roads at issue
[15] There is no public road into these properties. There are, however, three private roads which are relevant to this dispute. These are Bill Bryants Road (also referred to as “the red and blue road” in this proceeding), a new road (referred to as “the yellow road” in this proceeding) and Taipari Road (referred to as “the purple road” in this proceeding and also known as Ginny Road). Running right around the foreshore in front of the properties there is a 20 metre driveable track which in large part is on Council land (rather than private property) and was reserved for access purposes.
[16] These roads are indicatively shown on the following map:2
2 The depiction of the roads are not entirely accurate at the left hand end of the yellow road and the beginning portion of the purple road but nevertheless suffice to show their general position. Further, what is shown as Wairangi Forestry is part of Squally Cove Forestry, and Wairangi Forestry is in fact to the left of what is shown.
[17] The property owners between Wairangi Bay and Whakitenga Bay drive from the Croisilles-French Pass Road along Bill Bryants Road (the blue and red road) to get to their properties. They use the foreshore track to visit properties to the west (e.g. if the Millers are visiting Mr Foley). The property owners to the west of Wairangi Bay drive along the foreshore track3 to Bill Bryants Road to get to the Croisilles-French Pass Road.
[18] Bill Bryants Road passes through a number of properties. The part shown in the map from 2 to 3 (the red road) is on land owned by Squally Cove. The area shown in the map from 3 to 4 is built on Council land reserved for roading purposes and (possibly) partly on private land.4 (The part from 1 to 3 is also Council road. However it is a “paper road” only – it being too steep to provide any practical access.) The area from 4 to 5 passes through a number of privately owned
properties. Apart from Raharuhi, the owners of those properties are plaintiffs in this proceeding.
[19] The dispute has arisen because Squally Cove (represented by Mr Thornley), which is the owner of the land over which the red part of Bill Bryants Road5 is situated, no longer wishes the landowners in the area to use that part of the road. Mr Thornley has built the yellow road and has offered access over that road instead. The plaintiffs do not wish to have access over the yellow road at all and, in any event, object to the terms on which access has been offered.
[20] Whiting, Hollyman, Parkins and Foley (being the plaintiffs who are to the west of Wairangi Bay) have rights of way over Taipari Road (the purple road). However this road has not been used for many years by the Bay residents and is
essentially impassable in its current state (discussed further below).6
3 On the west side of Wairangi Bay some of this track is on rights of way.
4 The Council says it is on Council land whereas the plaintiffs say that it is at least partly also on the
McInnes land.
5 Counsel for the plaintiffs was concerned about the extent to which Mr Thornley had informed the first defendant shareholders of the dispute and surrounding circumstances. This is a non-issue for the purposes of determining the application that is before me.
6 It is usable and does provide access for residents with properties at the top end of the road.
Bill Bryants Road (the red and blue road) is built
[21] There was no road into the Bay until the Croisilles-French Pass Road was built in 1956. At the time the headland between Whakitenga Bay and Wairangi Bay and the land at the head of Wairangi Bay was owned by the Kellor family. The Kellor homestead was on the flats at the head of Wairangi Bay. Mr Kellor arranged for the Bryant brothers, who had built the Croisilles-French Pass Road, to build a road on the Kellor property so that the Kellors had vehicular access from the Croisilles-French Pass Road across their property. The road was duly built. At the time it was completed the whole of the newly built road passed over land owned by
the Kellor family.7
Subdivisions
[22] Over the years there have been a number of subdivisions. As a result of the subdivisions in the headland between Whakitenga Bay and Wairangi Bay, the blue part of Bill Bryants Road now passes through the Zwart, Raharuhi (no longer a plaintiff), Gould, Wagg, McInnes, Price/Plum and Bryant/Miller properties. The red portion is across land owned by Squally Cove. There have also been subdivisions to the west of Wairangi Bay. This has meant that there are now more than 13 houses to the west of the Bryant/Miller property when previously there were just four, with a consequent increase in the number of users of the foreshore road and Bill Bryants Road.
[23] Some of the subdivisions were granted consent on the basis of “sea access”. There was some limited evidence from Mr Sutherland from the Council about this. He has been with the Council for the last 10 years. He could not say what level of inquiries the Council would have made before his time when considering an application made on the basis of sea access. He said that since he has been with the Council, he has implemented over time some scrutiny of the feasibility of sea access.
He said that granting approval to subdivision applications on the basis of sea access
7 Except that between 3 and 4 on the map above it followed the line of the legal road vested in
Council.
had become more of an issue over time because the Council’s policies and plan are
concerned with the proliferation of jetties and moorings and other coastal structures.
[24] Regardless of whether or not sea access is available, all of the plaintiffs purchased their land after Bill Bryants Road was built. They have all used Bill Bryants Road as their principal means of access to their properties from the time of purchasing their properties and without difficulty until the yellow road was built (see below).
Mr Thornley’s arrival in the Bay
[25] Mr Thornley first came to live in the Bay when he was living at his brother’s property in 1984. He became involved in forestry operations in the mid 1990s when he and others purchased 200 hectares (which became Wairangi Forestry Partnership) and a further 200 hectares (which became Squally Cove Forestry Partnership). He was also involved in a number of subdivisions (including subdivisions in 1990, 1996 and 2007 which are discussed further below). He built the property on which he now lives in 1999.
[26] From the time Mr Thornley arrived in the Bay, he also used Bill Bryants Road across all the properties without difficulty or objections from the property owners. This included having trucks on the road for forestry operations. The evidence was that the whole of the bottom half of the Squally Cove and Wairangi Forestry plantings were serviced by coming through the blue road. Mr Thornley did not ask for permission to drive commercial trucks on the road. The mutually cooperative attitude of the property owners was illustrated by Mr Wagg’s response to a question in re-examination about that, which was “Well I didn’t expect him to [ask for permission] frankly”. The shareholders in the forestry operations increased over time to about 40 or 50 and they would also use Bill Bryants Road to access huts and tow their boats into the Bay etc without objection by the property owners.
Access arrangements negotiated with Mr Thornley
[27] Largely in the context of subdivisions in which Mr Thornley was involved, some of the plaintiffs entered into agreements with Mr Thornley relating to access. These are mentioned now in outline, and are discussed in more detail when I consider each plaintiff ’s application for relief.
[28] Mr Thornley’s first subdivision was in about 1990. This was in Oyster Bay. Some of the residents (Parkins and Foley) were opposed to this. This led to settlements whereby Parkins and Foley were granted access over Taipari Road. However the necessary work on upgrading Taipari Road was never carried out and Parkins and Foley continued to use Bill Bryants Road as their principal means of
access.8
[29] In 1996, not long after Mr Thornley was involved in purchasing the land on which Squally Cove has its forestry operation, Mr Thornley (through his company, Marvek Marine Limited, referred to in this judgment as “Marvek”) and his brother entered into an arrangement with Mr and Mrs McInnes in respect of the red road.9
[30] In 1996 Mr Thornley was involved in a further subdivision application at the head of Wairangi Bay. This application was in the name of Squally Cove Developments. It involved creating three lots, which are now owned by Whiting, Dick and Mr Thornley and his wife. The application was opposed by Bryant/Miller. A settlement was reached with Bryant/Miller in September 1996 under which new lots, which were to be created by Bryant/Miller’s own subdivision, would take a right of way over Taipari Road. Squally Cove Developments was granted consent
for this subdivision in December 1996.10
[31] Against a background of disputes between the Parkins family and Mr Thornley, in 1999 Mr Parkins Senior commenced a High Court proceeding claiming that their land was landlocked and seeking access to the red portion of Bill
Bryants Road and the foreshore road where it passed in front of and over
8 Refer [220] to [222] and [229] to [237] below.
9 Refer [104] to [112] below.
10 Refer [162] to [166] below.
Mr Thornley’s residential property. This was settled in 2001 with the Parkins family obtaining a licence over the red road and that part of the foreshore road.11
[32] In about 2007, there was a further subdivision application. This was on land between Leov and McInnes at the head of Wairangi Bay and was for eight allotments. The applicant for the subdivision was Frog Investments Ltd (“Frog”). Mr Stokes, who is a friend of Mr Thornley, is the sole shareholder and director of Frog. Mr Thornley proposed to Mr Stokes that he carry out the subdivision. The Thornley Family Trust also lent Frog $209,000 (unsecured and not documented) in respect of this subdivision and Mr Thornley counts this subdivision as one of the five
subdivisions he has been involved with in the Bay.12
[33] The Council granted consent for the Frog subdivision on 22 November 2007. As part of that consent, a new road (“the yellow road”) was to be built. The consent from the Council was on the basis of rights of way over the new road for
27 properties, eight of which were for Frog and the remaining available for other properties in the area.
[34] One of the opponents to the Frog subdivision was Mr Wagg. At the Council hearing for the Frog subdivision, Mr McFadden as Frog’s solicitor (who is also Mr Thornley’s solicitor) told the Council that the application “would not take away Bill Bryants Road, Mr Wagg would still be able to use this.” Mr Thornley, for his part, told the Council that he understood that Mr Wagg was concerned that Squally Cove would block access over the red road. He said that Squally Cove “have always been in a position to block access to Bill Bryants Road” but had not done so. Mr Thornley said that it was not Squally Cove’s responsibility to provide Mr Wagg, or others who had been granted subdivision consent on the basis of sea access, with vehicular access into the Bay. He further said:
Those parties continuing to use Bill Bryants Road need to determine whether they want to upgrade the road to meet the Council’s right of way standards or whether they want to continue to use the road as it is and formalise that by way of a written agreement with all the relevant property owners.
11 Refer [233] below.
12 Despite this interest through his family trust he told the Council when it was considering the subdivision application that he did not have an interest in Frog but was seeking safer access. In hindsight he regrets making that statement, I infer because he accepts it was misleading.
[35] Bryant/Miller had also opposed the Frog subdivision. Bryant/Miller were seeking approval of their own subdivision, which in turn had been opposed by Frog. In July 2008 a mediated agreement was reached under which the resource consent for the rights of way over the yellow road were varied to 30 users (to allow rights of way for the three allotments being created under the Bryant/Miller subdivision) and
Bryant/Miller would take up legal rights of way over the yellow road.13
The new road/the yellow road is built
[36] In 2009 Mr Thornley constructed the yellow road. It was constructed to Council standards. It cost approximately $300,000 to build. Mr Thornley paid for that personally. The yellow road was formed over land owned by Squally Cove, Wairangi Forestry Partnership and also over a small corner of the Frog land. Mr Thornley holds powers of attorney from both partnerships and Frog in relation to rights of way over the new road.
[37] By letter dated 6 November 2009, and shortly before the road was completed, Mr Thornley offered landowners in the Bay a legal right of way over the yellow road. It seems that Mr Thornley intended that everyone, with the exception of the Parkins family, would receive this offer. In fact Whiting did not receive the offer at this time, but he was presented with the same offer two years later. The Parkins’ offer was different in that Mr Thornley proposed that their existing licence over the red road be swapped with a new licence over the yellow road.
[38] The offer in the 6 November 2009 letter was on the basis of a payment of
$10,000 (contribution towards the road construction costs) and $750 (contribution to surveying costs). Landowners taking up the offer would also have to pay their own legal costs for documenting the right of way and contribute to on-going maintenance costs. Apart from those details the letter did not set out the terms on which the right of way would be offered. The letter stressed that it was not compulsory to take up the offer as users could continue to use the road “on the same basis as now exists”
but they would be required to pay for maintenance. The letter also said that the offer
13 Refer [167] to [168] below.
was not an “on-going” one because resource constraints might mean that those wanting legal access later could not be accommodated.
[39] Subsequently landowners were advised of the terms on which the right of way was being offered. These terms included conditions that:
(a) restricted the right of way to the owner’s present land title and would not confer further rights of use of the right of way to any subdivision of part of the owner’s existing land title, i.e. one user per existing land title only (no further users from subdivision without prior written consent);
(b) prohibited using the road for forestry purposes undertaken on or
relating to the owner’s land;
(c) restricted use of the road to private domestic use only and did not confer a right of use for commercial activity undertaken on or relating to the owner’s land;
(d)gave Mr Thornley control over management of the road and enabled a caveat to be lodged if a property owner was in default of maintenance payment obligations; and
(e) prohibited users from using the foreshore road in front of
Mr Thornley’s property.
[40] A number of landowners in the area accepted the offer and have taken rights of way over the new road. Others declined the offer, and issued this Court proceeding. Some accepted the offer because they felt they had little choice, but joined this proceeding because they have always preferred Bill Bryants Road and would like to continue to use it despite the right of way they have over the yellow road.
Mr Thornley wishes to close red road
[41] At this stage Mr Thornley has not closed off access to the red road but he would like to do so. At the top of Bill Bryants Road (where it joins the Croisilles- French Pass Road) Mr Thornley has installed a gate and erected a sign. The sign states:
Road Closed. Wairangi Bay Next Left. All Trespassers Will Be Prosecuted. No Hunting.
[42] A number of the plaintiffs were told directly or at least understood that Mr Thornley intended to lock the gate and close Bill Bryants Road. Mr Wagg, for example, says that Mr Thornley told him this about a year after the Frog subdivision. On other occasions Mr Thornley indicated that there would be a key provided to some of the property owners but not all of them. He acknowledges that he has “made it clear that I would like to close that road off, that I would like a locked gate on that road, but I have not done so and at this point in time that gate is still open and the plaintiffs still ... use the red road”. He also says that “certainly access ... is discouraged.” He says that he decided that he wanted to close off the red road when it became apparent to him that it was not needed if the yellow road was used.
[43] Mr Thornley does not want to permit access over the red road for a number of reasons. First, he says the road is unsafe, whereas the yellow road is safe. Secondly, the red road runs adjacent to where skid sites14 may be needed (for logging the Squally Cove forest in about 10 years’ time). Thirdly, he says that it is highly dangerous to have logging vehicles in potential conflict with people trying to gain access to their properties. Fourthly, he says that there are also forestry management issues. This is because Squally Cove wants to be able to exclude access through the forestry land whenever fire risk reaches an unacceptable level. Fifthly, he says that two access roads off the Croisilles-French Pass Road will make it easier for poachers
and burglars to enter into the area.
14 Flat area used for hauling logs up from the hill and processing them for removal by trucks.
These proceedings and offers to settle
[44] After an unsuccessful attempt to resolve matters, the proceeding was filed in November 2010. There are now 11 plaintiffs.15 The plaintiffs seek rights of way over the top section of Bill Bryants Road (the red part of the road), which is on the land owned by Squally Cove.
[45] Further offers were made to settle the proceeding by both parties. For their part, the plaintiffs continued to seek rights of way over the red road. They have entered into an agreement amongst themselves under which they each have access over the blue road. They were prepared to offer reciprocal rights of way to Squally Cove over the blue road. They also proposed that they have rights of way over the yellow road on the basis that they would make payments that met the cost of its construction, on conditions that included that Mr Thornley not make any profit from the yellow road, and that the conditions preventing commercial use and using the foreshore road be deleted.
[46] For its part, Squally Cove (through Mr Thornley) was prepared to offer rights of way over the yellow road on the conditions it had previously offered but at a higher price. The proposed conditions were varied in the course of the hearing (see below).16 The evidence was that Mr Thornley also raised the possibility of a licence for some landowners (Zwart and Muir) over the red road. It is unclear from the evidence how detailed this proposal was. However it appears that it was intended that the licence would not run with the land and that those taking up the offer would be required to make a payment. This was not acceptable to the plaintiffs to whom it
was offered because their view was that the access should be available to all of the plaintiffs. Mr Thornley did not wish to settle the matter on the basis of providing a legal right of way over the red road. He repeated this position at the hearing. He says that the plaintiffs do not need this, and it limits Squally Cove’s options in the
future.
15 Initially there were nine plaintiffs. Three plaintiffs joined the proceeding and one discontinued.
16 Refer [81] below.
The suitability of the roads
Bill Bryants Road
[47] Mr Thornley says that the red portion of Bill Bryants Road is dangerous and steep, and would not meet any reasonable engineering standards including the Marlborough District Council Standards. Mr Thornley says he has had to tow out numerous heavy vehicles which have become stuck over the years. He personally had an accident on the road on a drizzly day. His vehicle rolled 200 metres down the bank and he was hospitalised for a week. He says that this is “one of the main reasons” why Squally Cove does not wish Bill Bryants Road to be used.
[48] The plaintiffs say that this is the only accident of which they are aware. They say that the red road is a safer, better road than the yellow road. They say it is not as steep and has provided good access for many years. They believe that Mr Thornley must have been speeding to have had the accident. The plaintiffs say that from late
2010 the road has deteriorated because Mr Thornley would not let the Council grader do its annual work. Mr Thornley confirms that he said to the Council that he did not want the red road graded.
[49] Regardless of each side’s views about Bill Bryants Road, at present it does not meet Council standards. The Council would be looking to achieve improvements to the road to meet present “best practice” standards for a road of this kind but, because the road has been in use for over 50 years, it might permit some deviation from that provided it was satisfied that the road was safe. The Council’s evidence was that to bring Bill Bryants Road up to an acceptable standard, the following work would be required:
(a) upgrading the intersection from the Croisilles-French Pass Road to
Bill Bryants Road;
(b)cutting back vegetation where it has encroached on and impeded visibility;
(c) formation of a minimum width of six metres, with a minimum carriageway width of five metres;
(d) surfacing the carriageway with metal; (e) drainage work;
(f) some widening of corners; and
(g) a post-construction safety audit.
[50] Mr Thornley received a cost estimate of $81,305 (from Mike Edridge Contracting Ltd) for bringing the red road up to Council standards, plus survey and consent costs and GST. That estimate exceeds the Council’s estimate. The Council’s evidence is that the upgrading work of Bill Bryants Road would cost around
$130,000 in total, made up of $10,000 for the entrance, $20,000 for the red road,
$40,000 for the blue road between points 3 and 4 on the above map, and $60,000 for the rest of the blue road, but also accepting that it might be less than this if done privately.
[51] As part of my site visit, I was driven along Bill Bryants Road. That helped me to understand why the plaintiffs like the road. It is a settled road, with protective vegetation alongside the road and a gradient that does not feel steep. Accepting that some upgrading work will be required by the Council, Bill Bryants Road can provide practical vehicular access for Muir, Zwart, Gould, Wagg, Price/Plum, Bryant/Miller and McInnes, providing that the red road is not closed by Squally Cove. For Whiting, Parkins, Hollyman and Foley it can also provide practical vehicular access when used in combination with the foreshore road.
The yellow road
[52] The plaintiffs do not like the yellow road. This might be partly attributable to the feelings some of the plaintiffs have about Mr Thornley’s conduct, mainly in using Bill Bryants Road for many years and then seeking to force them off that road
and on to his new road, potentially for a profit. However it is not just that. The
plaintiffs’ comments about the road included the following:
(a) Ms Plum describes the road as needing a settling in period, as being steep in some places and there being nothing at the side of the road to stop you if you went over the edge. She believes that, as a new road, the yellow road will need more maintenance over the next few years than the established Bill Bryants Road. She also believes she would have difficulty in getting a horse float out on the yellow road, whereas there is no problem with a horse float on Bill Bryants Road.
(b)Mr Whiting, an earthworking contractor who does roading, confirms that the yellow road is quite steep in places. Of its 4.2 kilometres length, there is a continuous section of about 300 metres which is about 10 degrees. He says that this is “pretty steep” for a gravel road and that is a long section for a vehicle to get stuck on. He says that red road is not as steep, being about 9 degrees at its steepest point.
(c) For Mr Foley, the yellow road is about one kilometre shorter than taking the foreshore road and Bill Bryants Road. He nevertheless says that the yellow road is not as convenient because of the gradient. His view is that the yellow road should not have been built that steep and his partner refuses to drive on it because of its steepness. His partner has been driving to the Foley property for 18 years. He says that the steep drops on the blue road are protected by vegetation which is not present alongside the yellow road. His view is that the yellow road presents more danger than the one that he has been using for 26 years.
(d)Other plaintiffs made similar comments about the steepness of the road and their preference for Bill Bryants Road with which they were familiar.
[53] As part of my site visit, I was driven along the yellow road. Again, I can understand the plaintiffs’ comments about the road. There are parts of the road (on the far left branch and coming through the middle branch) that are quite steep and there is nothing on the sides, so that there is quite a steep drop from the edge of the road down into the valley. It looks and feels less “settled”. However the yellow road is built to Council standards. It therefore must be considered suitable for vehicular access. It can provide practical access for Foley, Hollyman, Parkins, Whiting, McInnes, Bryant/Miller and Price/Plum when (for some of them) used in combination with the foreshore road. It can provide practical vehicular access for Wagg, Gould, Zwart and Muir when used in combination with the blue part of Bill
Bryants Road.17
The foreshore road
[54] The foreshore road is essentially a drivable track. There is a portion of the foreshore road in front of the Clark property which is not passable for about an hour each side of high tide. There used to a bridge across the ford at this point, but the bridge was removed a few years ago by the Council because it was considered unsafe. Some of the plaintiffs have enquired about building a replacement bridge or culvert and understand there would be no objection from the Council to this. In the meantime, they know not to try and use this part of the road around high tide.
[55] Where the foreshore road passes in front of Mr Thornley’s land, about
70 percent of the track now encroaches on to Mr Thornley’s land. That has not always been the case and the plaintiffs consider that this can be fixed so that it does not. The plaintiffs’ use of the track has been made more difficult in recent times by the erection of gates in front of the Frog subdivision and in front of Mr Thornley’s property. The gates in front of the Frog subdivision were seemingly because of stock. Initially these were “Taranaki gates” but Mr Thornley later replaced these with pipe gates because everybody was having difficulty with them. As for the gate across Mr Thornley’s property, Mr Thornley said there were two reasons for them.
One reason was to slow down the traffic in front of his property. His wife wanted
17 See below at [95] to [99] regarding access to blue road.
this because in the summer holidays they can have up to 10 grandchildren running across the road on to the beach. The second reason was security. There have been a number of burglaries in the Bay over the years and, by having people go through a gate, he was able to identify people and stop anyone that was not known to him.
[56] I was driven along the foreshore road on the site visit. It is obvious that it serves a useful function for property owners to get from one property to another, and for those property owners to the west of Wairangi Bay to access Bill Bryants Road. In the absence of evidence from Squally Cove contesting this, there is no reason to think that it cannot continue to do so with some upgrading, particularly where the bridge has been removed.
Taipari Road
[57] Taipari Road has in the past provided access, but it is presently practically impassable, even with a good four-wheel drive. This is particularly so if there has been rain which causes slips across the track. This was the general tenor of the plaintiffs’ evidence, which included the following:
(a) Ms Plum says that she has been going to the Bay her entire life. As a child she used to walk along the track that is Taipari Road. She has not seen anyone ever using Taipari Road as access to the properties in the Bay. She believed it may have been used in the very early 1980s, and also in about 2000 when Mr Thornley drove a four-wheel drive along it for the purposes of the Parkins litigation. For the purposes of this proceeding, Ms Plum flew over the road with Mr Parkins where they identified slips across its path. The next day, at the invitation of Mr Hollyman, she walked along the road and took photographs of the slips. These photographs were produced at the hearing. At about halfway along the road, Ms Plum noticed that there was a locked gate.
(b)Mr Hollyman had a look at Taipari Road at Christmas time.18 He saw that there was a major slip on the road. He says that the gradient on Taipari Road is better than the yellow road but would need to have major expenditure on it if it were to be used again.
(c) Mr Whiting was asked about whether the Taipari Road could be made usable again. He said that this might involve quite a cost and might be impracticable.
(d) Mr Foley used Taipari Road from time to time in the late 1980s and
1990s but says that it has been impassable to anything other than an expertly driven quad bike for a considerable period of time. He says that in late December 2010 substantial slips took place and since then it is not passable even with a four-wheel drive.
(e) Mr Parkins’ family used Taipari Road until about 1996. Mr Parkins agrees that Taipari Road is impassable, even with a four-wheel drive, because of slips.
[58] This evidence about the present state of Taipari Road was confirmed by the site visit. We did not get very far up the road in a four-wheel drive before we turned back. On the basis of the evidence Taipari Road in its present condition does not provide practical access to any of the plaintiffs’ properties. Squally Cove does not really contest this evidence. It says that with upgrading it could provide reasonable access for Foley, Parkins, Hollyman and Whiting.
The Law
Landlocked
[59] Land is landlocked if there is “no reasonable access” to it.19 “Reasonable access” is defined as physical access of a nature and quality reasonably necessary to
18 I understand Mr Hollyman to be referring to Christmas 2011.
19 Property Law Act 2007, s 326.
use and enjoy the land in accordance with any right or consent under the Resource
Management Act.20
[60] From the cases that have considered this definition, the following principles are established:
(a) Whether there is reasonable access to land is a question concerned with whether there is practical21 physical access in fact, rather than whether there is legal access.22
(b)It is a question of present fact, concerned with whether reasonable access now exists, not whether (for example) “it is possible to provide access by upgrading existing tracks on the applicant’s own land”.23
(c) Access “at the whim of an adjoining owner” or dependent on the “courtesy and goodwill” of the adjoining owner is not reasonable access.24
(d)What is reasonably necessary to use and enjoy the land “in accordance with any right ... [or] consent under the Resource Management Act” is concerned with existing uses, not potential uses for which a land owner could apply for consent.25
(e) Reasonable access is not necessarily the same as the best access that could be achieved. Other access may be convenient and reasonable but that does not mean that the access the land presently has is
unreasonable.26
20 Property Law Act 2007, s 326.
21 Murray v BC Group (2003) Ltd [2010] NZCA 163, [2010] 3 NZLR 590 at [20].
22 Kingfish Lodge (1993) Ltd v Archer [2000] 3 NZLR 364 (CA) at [26]; Murray v BC Group (2003) Ltd at [20].
23 Cleveland v Roberts [1993] 2 NZLR 17 (CA) at 23-24 cited in Asmussen v Hajnal (2005) 6 NZCPR
208 (HC) at [61]-[62].
24 Benham v Cameron (1999) 4 NZConvC 193,013 (HC) at 193,021; White v Bevan (1985) 2 NZCPR
270 (HC) at 280; Reikorangi Forest Ltd v Charman HC Wellington CIV-2004-485-1255, 15 October
2007 at [47] and [48].
25 MacLaurin v Hexton Holdings Ltd [2008] NZCA 570, (2008) 10 NZCPR 1 at [13]-[21].
26 Murray v BC Group (2003) Ltd at [25].
(f) Whether there is reasonable access is a value judgment that the Court has to make on the basis of the evidence. Factors such as the characteristics of the locality (residential, commercial or mixed), the topography of the area and contemporary transportation requirements are relevant.27
(g)The circumstances as they existed at the time the land was acquired may be relevant evidence as indicating what the purchaser regarded as reasonable at that time.28
(h)Reasonable access does not invariably mean vehicular access, but nowadays the situations in which non-vehicular access will be regarded as reasonable are likely to be few because of the great dependence people now have on motor vehicles.29
(i)The legislation is remedial. There is no presumption in favour of non- interference with another title.30
Relief
[61] On an application by the owner or occupier of landlocked land the Court “may” make an order granting reasonable access to the landlocked land.31 In determining an application for such an order the Court “must” have regard to the following:32
(a) the nature and quality of the access (if any) to the landlocked land at the time when the applicant purchased or otherwise acquired the land:
(b) the circumstances under which the land became landlocked:
27 Murray v BC Group (2003) Ltd at [19] citing B A Trustees Ltd v Druskovich [2007] NZCA 131, [2007] 3 NZLR 279 at [61] and Asmussen v Hajnal.
28 Murray v BC Group (2003) Ltd at [24]; Kingfish Lodge (1993) Ltd v Archer.
29 Asmussen v Hajnal at [58] endorsed by the Court of Appeal in B A Trustees Ltd v Druskovich at [61]
and referred to in Murray v BC Group (2003) Ltd at [18].
30 Murray v BC Group (2003) Ltd at [14].
31 Property Law Act 2007, s 328(1).
32 Property Law Act 2007, s 329.
(c) the conduct of the parties, including any attempts they have made to negotiate reasonable access to the landlocked land:
(d) the hardship that would be caused to the applicant by the refusal of an order, in comparison with the hardship that would be caused to any other person by the making of an order:
(e) any other relevant matters.
[62] In making such an order, the Court “may” impose any conditions “it thinks
fit”. These may include conditions relating to:33
(a) the payment of reasonable compensation by the applicant to any other person:
(b) the exchange of any land between the applicant and any other person:
(c) the fencing of any land and the upkeep and maintenance of any fence:
(d) the upkeep and maintenance of any land over which an easement is to be granted:
(e) the carrying out of a survey of any land:
(f) the time within which any work necessary to give effect to the order is to be carried out:
(g) the execution of any instrument or the doing of any other thing necessary to give effect to the order:
(h) any other matters that the court considers relevant, including any question arising under section 331.
[63] The last of those possible conditions concerns the cost of work necessary to give effect to the order. The general requirement is that the reasonable cost of any such work must be met by the applicant. This applies “unless” the Court:34
(a) is satisfied, having regard to the matters specified in section 330(1), that it is just and equitable to require any other person to pay the whole or any specified share of the cost; and
(b) gives a direction in the order accordingly.
33 Property Law Act 2007, s 330.
34 Property Law Act 2007, s 331.
Some overarching issues
[64] Before considering each plaintiff’s individual position I consider some overarching issues that are raised by Squally Cove.
Sea access
[65] Squally Cove submits that sea access is available to each of the plaintiffs’ properties and provides reasonable access for them. It relies on Kingfish Lodge (1993) Ltd v Archer in support of this submission.35 In that case there was a tourist lodge on the property, which was near the entrance to the Whangaroa Harbour, which had operated on the basis of sea access since 1947. The Property Law Act application arose following a change in ownership of the property. The new owners wanted to redevelop the lodge and considered that the construction phase and redeveloped lodge would increase transport demands. Negotiations with the adjoining landowners to build a private road over their properties to the public road
were ultimately unsuccessful.
[66] The new owners proceeded to seek resource consent. The first stage of that consent involved the construction of another 11 accommodation units. Under the Local Government Act a subdivision normally required there to be road access. There was an exception if the Council was satisfied that the sea provided “reasonable access”. The Court of Appeal upheld the High Court decision that sea access provided reasonable physical access. In upholding this decision, the Court of Appeal said that the High Court was entitled to take into account the applicant’s own assessment of the matter when advancing its case for a resource management consent.
[67] Squally Cove submits that sea access is reasonable access for those plaintiffs where the subdivision resource consents were sought and granted on that basis (Gould, Wagg, McInnes, Bryant/Miller and Whiting). In respect of a number of
plaintiffs (Muir, Zwart, Price/Plum, Hollyman, Parkins and Foley) it is unknown
35 Kingfish Lodge (1993) Ltd v Archer, above n 22.
whether the subdivisions were granted on the basis of sea access. Squally Cove says that even if there are plaintiffs who were not granted consents on the basis of sea access, sea access is in fact reasonable access for these properties.
[68] I agree with the plaintiffs’ submission that Kingfish Lodge does not preclude a finding that land is landlocked even where a subdivision was granted on the basis of sea access and even where the applicant for that subdivision remains the property owner claiming that land is landlocked. Whether land is landlocked is a value judgement to be determined on the basis of all the circumstances at the time the application for relief is made. It is a relevant circumstance to be taken into account, when considering whether non-vehicular access is reasonable access, that a consent was granted on the basis of non-vehicular access. But it is not determinative. As is said in Murray v BC Group (2003) Ltd, “the fact that a property owner, when acquiring it, knew that there may be access difficulties does not preclude them from
obtaining relief” under s 129B of the Property Law Act.36 It is a “piece of evidence”
relevant to whether a purchaser regarded the access that then existed as reasonable. Kingfish Lodge is no more than an example where non-vehicular access was regarded as reasonable on the facts.
[69] I also agree with the plaintiffs’ submission that Kingfish Lodge is distinguishable on the facts. Most of the properties do not have a mooring. Some of the plaintiffs can and do access their properties by boat on occasion (e.g. Bryant and Wagg). For others it is more difficult (e.g. Zwart and Muir where the sea frontage is very tidal). But all of the plaintiffs have had vehicular access for many years, and bought their properties against the background of there having been vehicular access across the red and blue road for the last fifty years. I discuss this in more detail below. It is this fact which makes this not one of those relatively rare cases where sea access is reasonable access for each plaintiff.
[70] Squally Cove refers to another example where non-vehicular access was considered reasonable, namely the case of Murray. In that case the parties had always predominantly accessed their property via a Council-owned walkway, that
was paved and lit. For a period the property owners gained vehicular access via a
36 Murray v BC Group (2003) Ltd, above n 21, at [24].
formed driveway on neighbouring properties, but that was not always used when it was available to the property owners and for most of the time it was not an option made available to them at all. The walk was 70 metres in length, with an elevation of 15 metres up or down, that would take approximately one to three minutes to traverse. That access was typical access to properties in hilly suburbs in Wellington. It only became unsuitable for the property owners as they got older and health problems arose. The facts in that case are therefore quite different from here, where the plaintiffs have always used Bill Bryants Road.
[71] Squally Cove also refers to Moore v Mabin.37 That was a case concerning access to properties in the Marlborough Sounds. That case recognises that reasonable access may be limited in its nature and extent because of the difficult terrain, and that in the Marlborough Sounds some properties have only foot access from the sea or road. It does not assist with this case where the plaintiffs have always had vehicular access over Bill Bryants Road.
Is land landlocked if it has a legal right of way over Taipari Road?
[72] Squally Cove submits that Foley, Parkins, Hollyman and Whiting, being the plaintiffs who have a legal right of way over what is known as Taipari Road, are not landlocked. Squally Cove notes that this road is formed and was in use in 1999/2001 (i.e. the time of the Parkins litigation). It notes that it was also in use in previous times. For example, in the late 1980s and 1990s Mr Foley used Taipari Road several times. It acknowledges that Taipari Road has deteriorated. It says that this is because the plaintiffs have not maintained it and it has been left to Mr Thornley solely to maintain. Squally Cove submits that Taipari Road has been a good road in the past and, with everybody who has a legal right of way over it contributing to the maintenance of the road, it would be a good road again and provide reasonable vehicular access to the properties to the west of the head of the Bay.
[73] The plaintiffs say that they were never asked to contribute to the maintenance of Taipari Road and that they did not need to use it when everyone was able to use
Bill Bryants Road, which was the preferred road. Mr Thornley acknowledges that he
37 Moore v Mabin HC Christchurch A65/84, 29 June 1998.
has not asked the plaintiffs to contribute to the cost of maintaining the road because the plaintiffs were not using it. He carries out some work on it from time to time to keep it open for the benefit of the forestry operations. The plaintiffs say that, because it has not been maintained over many years, there would now be considerable cost to upgrading Taipari Road.
[74] Squally Cove’s submission is similar to that which was made in Asmussen v Hajnal.38 In that case, the defendants submitted that the plaintiffs’ land was not landlocked because there were two ways in which the plaintiffs could obtain practical feasible access but had unreasonably failed to do so. Applying dicta from the earlier Court of Appeal decision in Cleveland v Roberts, the High Court rejected this submission stating:39
The issue in terms of s129B(1) is not whether reasonable access to the land could be formed, and does not involve a consideration of the reasonableness or otherwise of the applicant’s attitude or actions. The issue is whether there is reasonable access to the land. The question is: does reasonable access to the land exist now?
[75] The reasonableness of the parties’ actions was viewed as relevant to the
Court’s discretion, but not to the threshold issue of whether the land is landlocked.40
I therefore do not accept Squally Cove’s submission that land with a right of way over Taipari Road is not landlocked. The present position is that Taipari Road does not provide practical access at this time. That it might if upgraded, and that those with a right of way over this road might have failed to maintain the road, are matters potentially relevant to the discretion to grant relief and the particular relief that may be granted if that discretion is exercised.
Is land landlocked if offer re yellow road is reasonable?
[76] Both parties submit that if Mr Thornley’s offer for use of the yellow road is reasonable, the land is not landlocked. In my view that is not correct. This is no different from a situation where there would be access if the applicant for relief
carried out upgrading work. The issue is whether reasonable access exists now. It
38 Asmussen v Hajnal, above n 23.
39 At [61].
40 At [60] to [62].
does not. That there would be access if the parties were prepared to accept an offer that has been made for a legal right of way is relevant to the discretion to grant relief, but not to the threshold issue of whether the land is landlocked.
[77] This was the High Court’s view in Benham v Cameron.41 There the Judge said:
I also reject the respondent's submission that her offer of pedestrian access deprives me of jurisdiction. The jurisdictional issue is whether No. 21 is physically landlocked as defined in s 129B(1)(a), not whether a party has offered access which might, if accepted, provide "reasonable access". It would be perverse if such an offer removed the Court's jurisdiction, so that a party's offer of access was determinative of the matter. Such an offer of access is but a relevant consideration under s 129B(6)(c).
[78] I agree with that view. I consider that this approach fits with the remedial nature of the legislative provisions. Where land is landlocked it should not be the case that access is dictated by the particular terms of access on offer from a landowner who can provide access, even if those terms are reasonable for the right of way on offer. That would be the case if this issue went to the threshold question rather than relief. The Court’s discretion on relief is wider than that. The Court can consider, for example, the circumstances in which the land became landlocked and the behaviour of the parties. Here those are highly relevant considerations. The plaintiffs cannot understand how Mr Thornley can drive across the road that passes through a number of their properties for 20 years, and then effectively force them off that road and on to a new road that he has built, which they did not ask for, and to potentially make a profit from that road.
Was the offer re yellow road reasonable?
[79] If the terms of the offer for a right of way over the yellow road were reasonable, that is relevant to whether relief should be granted to any of the plaintiffs. The offer is to use the yellow road and pay a share of maintenance; or to take a legal right of way over the yellow road on the terms proposed by Mr Thornley. The first of those two options is reasonable providing the costs of maintenance are
reasonably incurred and equitably allocated and there is no real prospect that access
41 Benham v Cameron, above n 24, at 193,022.
will be terminated. It is the basis on which access has operated over Bill Bryants
Road for many years.
[80] The terms on which the second option (for a legal right of way) are available involve a payment to Mr Thornley and a number of restrictions and conditions attaching to the right of way. The terms of this offer, as amended during the course of the hearing, are available to all the plaintiffs (including Parkins) and for a period of 40 working days after this judgment is delivered.
[81] Turning first to the restrictions/conditions attaching to the right of way, the amendments during the course of the hearing were that:
(a) the proposed restrictions on rights of way for further subdivision of properties and for use for forestry or commercial purposes were subject to obtaining the prior written consent of Mr Thornley “(including as to conditions as to payment of any royalty, compensation or other payment) such consent not to be unreasonably withheld” and any dispute to be resolved by arbitration;
(b)the restriction on using the road for “commercial activity” would not include the renting of baches and holiday homes;
(c) Mr Thornley would not have voting control of the management company; and
(d)the restriction on using the foreshore road in front of Mr Thornley’s property would be qualified by the words “except for emergencies or other exceptional circumstances or occasional use.”
[82] Squally Cove acknowledges that these terms are different from the implied terms in the Land Transfer Regulations 2002. It says (correctly) that these are default terms which are subject to any express terms in the right of way documentation. It says that it is not unusual to include express terms. I accept that point but the real question is whether the proposed express terms are reasonable.
[83] Squally Cove submits that these terms of access are based on standard principles and are manifestly reasonable. In support of this submission, Squally Cove called evidence from Ms O’Donnell. She is a lawyer with extensive experience in subdivision developments. Her evidence is that the right of way arrangements are not on usual terms but they do not create unreasonable obligations. She then goes on to consider each of the terms that the plaintiffs object to here. She says:
(a) It is standard commercial practice for a developer to require a third party neighbour to make payment to receive the benefit of a new fully formed and legalised right of way. A developer of such a right of way may expect such a payment to recover costs and the benefit of the easement to the third party’s land.
(b)It is not uncommon for rural right of way easements to contain restrictions on the number of residential dwellings or dominant tenements that receive the benefit of the easement.
(c) It is not uncommon for a developer to restrict a right of way to prevent it from being used for commercial activities.
(d)It is not common for an easement to provide for a restriction on the use of a nearby legal road.
(e) Having the grantee hold a share in the management company is standard conveyancing practice and the recovery arrangements for default (including the ability to lodge a caveat) is not unusual.
[84] Probably the condition that generated the most upset for the plaintiffs was that which prevented them from using the foreshore road in front of Mr Thornley’s property. Squally Cove’s expert evidence was that the restriction was unusual. Mr Thornley is only able to seek to impose it because the foreshore road now partially crosses his property. Even Mr Thornley’s friend, Mr Stokes, could not see an issue about the foreshore road. He said about the road in front of his subdivision:
Well, there’s not a lot of traffic down there anyway from the times I’ve been there and to be quite honest anyone going in and out of that bay is normally going to visit somebody or go there for a holiday, it’s not like it’s state highway one, so whether or not we had extra traffic there for people going on holiday or whatever wouldn’t worry me, I’d be concerned if there was someone driving backwards and forwards all the time with a truck load of mussels or whatever.
[85] Mr Thornley said in evidence that he misjudged how strongly the plaintiffs would react to this proposed restriction. He said in cross-examination that he would be prepared to delete it. Squally Cove’s closing submissions confirm that this concession remains part of the terms that are available for acceptance for a period of
40 days after this judgment is delivered.
[86] Squally Cove submits that the terms are reasonable in the context of “a long rural road with a large number of users, and a history of maintenance contribution difficulties” in the Bay. I agree with Squally Cove that, as amended, the maintenance provisions are not unreasonable. The plaintiffs’ objection was to Mr Thornley having control. The amendments are intended to remove that. I also agree with Squally Cove that it is not unreasonable for Mr Thornley to have some control over the number of rights of way available in respect of any property that is granted a right of way. That is because there are a limited number of rights of way
that may be granted over the road.42
[87] In relation to the forestry and commercial use restrictions, Squally Cove submits that there is significant forestry and a history of marine farming in the area and it is sensible to make provision for this in the right of way. Squally Cove submits that the amendments proposed by Mr Thornley at the hearing to ameliorate the plaintiffs’ concerns about this were reasonable. It submits that in the Marlborough Sounds forestry is often done by barge. On the basis of Ms O’Donnell’s evidence, it submits that it is reasonable to require payment of a royalty if the forestry business wishes to take logs out by road.
[88] I accept Ms O’Donnell’s evidence that the commercial use/forestry restriction
might not be unusual in other subdivisions. However the right of way being offered
42 The limit is set by the Council based on the New Zealand Standard roading standards which are based primarily on vehicle movements per day.
here did not arise in usual circumstances. Access into these properties requires a degree of cooperation amongst the property owners. These cooperative arrangements have worked for many years. The plaintiffs have been using Bill Bryants Road for up to 50 years. The right of way was being offered by someone who for 20 years had the benefit of using a road that passed through a number of the plaintiffs’ properties. That use included commercial use. No royalty was paid by Squally Cove for that use. The terms that are appropriate in an arm’s length commercial negotiation in respect of new development are not appropriate here.
[89] Moreover, the terms being sought in respect of the yellow road are not the terms on which existing rights of way have been granted in the Bay. Part of the foreshore road from Hollyman around to Foley runs across other privately-owned properties. There are rights of way in place over these properties which were put in place at the time of the settlement with Foley and Parkins in respect of Taipari road. In total there are around 24 dominant owners in respect of Taipari Road and these do not have the restrictions that Mr Thornley seeks to impose on the yellow road. In explanation for the difference Mr Thornley said that he now knows a lot more about rights of way than he did then and at that time he just wanted to get the dispute with Foley and Parkins settled. Be that as it may, these rights of way are illustrative of the cooperative nature of vehicular access in the Bay.
[90] I therefore consider that it is unreasonable to require consent and payment terms for forestry and commercial uses by any of the plaintiffs who permitted Mr Thornley/Squally Cove to use Bill Bryants Road for 20 years for his forestry and commercial purposes. It is not a necessary condition either. To the extent that any such use is more likely to damage the road, the implied terms under the Land Transfer Regulations 2002 deal with this. Damage caused by a user is to be repaired by that user. Mr Thornley is seeking to extract a payment from commercial users because he has control over the only roads into the Bay (effectively a monopoly) and a commercial user may be in a position to pay it. However some of the plaintiffs are
existing (arguably) commercial users43 and are therefore “captive” to Mr Thornley’s
demands. Other (new) large scale commercial uses will not be established in the
43 Mr Gould, for example, runs a small commercial enterprise from his property. Mr Foley runs a substantial farm.
Bay without Council consent (which possibly may require the business to satisfy the
Council that there are satisfactory access arrangements in place anyway).
[91] As to the payment intended to contribute to the costs of building the yellow road, in November 2009 Mr Thornley was offering a legal right of way over the yellow road for $10,000, plus survey costs of $750, plus GST. Later the payment required increased to $28,000, plus GST. Mr Thornley sees the increased payment being sought as reasonable because “significant costs have been incurred as a result of the plaintiffs’ unreasonable failure to accept access on the terms offered in 2009”. It is unclear what these costs are, but they are said not to be the legal costs in defending this proceeding.
[92] A payment in and of itself is not unreasonable. Nor is it necessarily unreasonable that Mr Thornley could end up making a “profit” from the road providing the terms he has offered to each user are reasonable. Mr Thornley says that is unlikely but I agree that, if he were to do so, that is of no relevance to the plaintiffs. It is not reasonable to increase the payment merely because the plaintiffs did not accept the original offer which was made on unreasonable terms. That said, the $28,000 sum may still be a reasonable amount to pay as a condition of granting legal access (even though at an earlier time Mr Thornley was prepared to accept a lesser sum). Squally Cove submits that the $28,000 payment is reasonable on the basis of evidence from Mr Trueman (a valuer). He gives evidence as to the likely increase in value of the plaintiffs’ land if they obtain legal vehicular access and the cost to Mr Thornley/Squally Cove of providing access. This issue is discussed
below under the “Compensation” heading.44
Is land landlocked if access has not been closed?
[93] Mr Thornley/Squally Cove have not at this stage prevented the plaintiffs from using the yellow road. The Hollymans have accepted the offer that they continue to use the road providing they contribute to maintenance fees. That offer was available
to the other plaintiffs. Mr Thornley/Squally Cove have also not at this stage
44 Refer [253] to [270] below.
prevented the plaintiffs from using the red road. However access to either road remains at the whim of Mr Thornley or Squally Cove. It is not legal access.
[252] As with the other plaintiffs I consider that access should be ordered over the red road on the terms available to the other plaintiffs.72
Compensation
[253] In making an order granting access the court “may” include a condition relating to the payment of compensation by the applicant for relief to any other person.
[254] It is not the case that compensation will always be ordered when an order granting access is made. Reikorangi Forest Ltd v Charman is an example of a case where compensation was viewed as not appropriate.73 There the applicant had a right of way which deviated in three places from the registered easement as it passed through the defendant’s land. The defendant threatened to close the road at those three points. The High Court said that compensation is usually available to a
defendant who is required to give up some portion of land but that was not the case here. The road had been a road for 20 years and would continue to be used as a road by others whether the relief was granted or not.
[255] Where compensation is ordered the right of access being acquired (through court order) is assessed on a willing buyer/willing seller approach.74 Relevant to the assumed negotiations over that acquisition are the effects on the property over which the access is granted and the value the acquirer would obtain/be expected to pay for obtaining that access.75
[256] Here Squally Cove seeks compensation. It submits that the offer it made that each plaintiff pay $28,000 (plus GST) for the right of way over the yellow road does not set the upper limit of any compensation offer. It submits that this offer was made to resolve the dispute, but the Court should set compensation on landlocked land
principles. It submits that on those principles, the compensation should be much
72 Refer [271] to [277] below.
73 Reikorangi Forest Ltd v Charman, above n 24.
74 Lowe v Brankin (2005) 6 NZCPR 607 (CA) at [38] and [41].
75 At [42] and [43].
more than $28,000. It submits that the sum should reflect the increased value to the
plaintiffs’ land and the detrimental effects to Squally Cove.
[257] Squally Cove called evidence from Mr Trueman, a registered valuer from Blenheim. Mr Trueman’s evidence is that conservatively there would be an average increased value of 5-10 per cent to each plaintiff ’s land if they had the benefit of a legal right of way (without any other access impediments). On the basis of the 1
July 2011 rating valuations that would result in “average” increases in value per holding of (using rounded figures) between $32,000 and $63,000. On this basis Squally Cove submits that at least $32,000 per right of way should be paid to the grantor by way of compensation for the increase in value. Alternatively, it submits that an individual assessment could be made per plaintiff, at 7.5 per cent (the midpoint of 5-10%) of the capital value of the plaintiff property as the compensation figure.
[258] As to detriment, Squally Cove submits that there will be loss as a result of creating an alternative skid site, and associated new forestry roading amounting to
$38,338 plus GST; plus loss of land value of $2,470 plus GST (total $41,808 plus GST). These figures are on the basis of calculations made by or provided to Mr Trueman. In addition Squally Cove says that there will be loss of trees arising from having to form alternative roading for forestry and from upgrading the existing road, which Mr Trueman did not assess. It submits that some compensation should be added for such detriment and it suggests a sum of $20,000 for this. It therefore submits that compensation for detriment should be assessed on a total amount of
$62,000 plus GST, divided by the number of rights of way granted.
[259] Squally Cove submits that if eleven rights of way were granted over the red road each plaintiff should pay to Squally Cove $37,636 plus GST:
(a) Benefit to plaintiff land: $32,000 plus GST (b) Detriment to defendant land ($62,000 ÷ 11) $5,636 plus GST
(c) Total: $37,636 plus GST
[260] I do not accept Squally Cove’s assessment of compensation for a number of reasons. First, it is set on the basis of what Squally Cove might propose in a negotiation over access, rather than the price that realistically would be agreed to in such a negotiation. As was said in Cleveland v Roberts one might expect to find in the outcome of these negotiations a gain to both parties.76
[261] Secondly, Mr Trueman’s estimate of value was very approximate. He was working off Rating Valuations and was applying a standard percentage to them. From that he derived an “average” improvement value. He accepts that a standard percentage applied to all the properties is potentially misleading. He considered that
10 per cent would be more appropriate at the lower property value end and 5 per cent for the higher valued properties.
[262] Thirdly, Mr Trueman did not rely on any valuation textbook (or similar) for his assessment and had limited empirical evidence to support his 5-10 per cent assessment. He referred to differences in property values between Queen Charlotte Drive (which has vehicular access) and Onahau Bay (which does not), but acknowledged that there are other variables such as north facing sections and better beaches potentially accounting for differences in value.
[263] Fourthly, there is an argument that the Rating Valuations are already on the basis of assumed access. As Mr Wagg said:
Now I believe that this land has had road access for 50 years, all the parties here have had road access, they purchased their land knowing what the situation was, it wasn’t legal but it was agreed mutual access and nobody has ever argued that they should pay less price because the access is not legal. But I will say that if road access was taken away and we had to go by sea access the value of the land would be less. But by legalising the access we already have I would argue it will not increase the value of the land at all.
[264] This view is to some (limited) degree supported by the Rating Valuation for the Gould property. After the Goulds obtained legal access over the yellow road,
their Rating Valuation went down. That is likely to have been a reflection of the
76 Cleveland v Roberts, above n 23, referred to in Lowe v Brankin. See also Hajnal v Asmussen [2010] NZCA 410 at [51] where the amount the appellant claimed for compensation was rejected as being wrongly “premised on a reluctant seller determined to extract all that he or she could, if they were to sell at all”.
general decline in property values in the area, however, as it is not known whether any consideration was given to the legal right of way obtained.
[265] Fifthly, if there is any increase in the value of the plaintiffs’ property from securing legal access, then that increase in value is not all attributable to acquiring access over the red road. Mr Trueman was asked in cross-examination what he would assess the increase in value to be from access over the red road, for example for the Zwarts, if they did not have a legal right of way over the McInnes property. Mr Trueman said that it would “be very limited if there was such a benefit” and suggested the figure of “a thousand” or “maybe a little bit more”.
[266] As for the detriment to Squally Cove, the plaintiffs submit there is none. That is because Mr and Mrs McInnes and the Bryant/Millers have contractual rights over the red road. That submission is not entirely correct in that the contractual right is not with the party that now owns the red road. Squally Cove was, however, told of the McInnes Agreement when it purchased the land. That suggests that Squally Cove was aware that skid sites might have to be located somewhere other than on the red road. Squally Cove submits that this should be disregarded as speculative. I do not agree. If Squally Cove did not consider the risk that Mr and Mrs McInnes and/or the Bryant/Millers might seek to enforce the agreements (or take some other action because they were not given prior notice of the sale to Squally Cove) then it ought to have.
[267] In any event, the plaintiffs submit that this issue could be dealt with by interrupting the right of way when the forest is harvested (which would occur once every 25 years) there being access available over the yellow road when that occurs. That does not appear to fully answer Squally Cove’s evidence. That evidence is to the effect that if there is no legal right of way over the red road the cost of constructing the necessary skid sites at harvesting time will be less by the amount Mr Trueman has said. The plaintiffs have not put forward any evidence to challenge the costings that Mr Trueman’s evidence is based on.
[268] I accept that with the widening of the red road there may be some loss of trees. However there is no proper evidence on which to base that loss.
[269] On the evidence before me I consider that in a negotiated legal access arrangement over the red road, the willing seller (Squally Cove) would contend that some payment be made to Squally Cove for the forestry value of the lost land ($2,470), loss of trees ($ unknown) and the additional cost of the skid sites ($38,338). The willing buyer (the plaintiffs) would contend that there be a substantial discount because of the risk that the McInnes Agreement and the July
2008 Agreement (Bryant/Miller) could be enforced. They would also contend that if anything were to be included for the increased value to the plaintiffs’ land because of legal access over the red road, it would be minimal.
[270] The willing buyer (the plaintiffs) would also contend that no payment should be made because for over 20 years Mr Thornley and then Squally Cove used the blue road. It seems to me that a way to value those years of use is to ask what would have been negotiated for that use if the parties had negotiated legal rights of way 20 years or so ago. It seems to me that the most likely scenario is that the parties would have agreed on reciprocal rights of way which did not involve any of them compensating each other. On that basis I consider it is not appropriate to order any compensation beyond the actual loss of trees in the upgrading of the road. Compensation for those trees recognises that the negotiation did not take place 20 years ago and since then Squally Cove has grown trees which will have some value.
Terms of relief
[271] All the plaintiffs, except the fourth plaintiff (who discontinued) and the ninth plaintiffs (the Parkins) with whom I hope a formal right of way will nevertheless be agreed, are granted a right of way over the red road. The Council has set out draft conditions for a right of way over the red road. These are set out in Appendix 1 to this judgment.
[272] Squally Cove accepts these conditions subject to the following:
(a) it submits that any right of way over the red road should be on the same conditions as that which it offers over the yellow road;
(b)the right of way should not be registered until all upgrading work has been carried out on the blue road;
(c) all upgrading work should be at the plaintiffs’ costs; and
(d)all upgrading should be carried out using end haul (rather than side cast) to minimise the risk of damage to trees on Squally Cove’s property.
[273] The plaintiffs also accept the Council’s conditions subject to the variations show in italics in Appendix 1. It submits that it should be a condition that upgrading be carried out by side cast (as with the other roads in the area) and that the blue road need not be part of the conditions on which the right of way over the red road is granted.
[274] I make an order granting access over the red road on the terms set out in Appendix 1, but with the variations shown in italics which I accept are appropriate. It is not appropriate to grant the right of way on the same conditions as those which have been offered in respect of the yellow road. Those terms were not reasonable in the circumstances. The upgrading work on the blue road is left for negotiation between the plaintiffs and the Council and is not a condition on which relief is granted. The matter referred to by Squally Cove at (c) above is already covered by the Council’s proposed conditions. It is not for me to determine whether the upgrading work should be carried out by end haul or side cast. If it is the latter, and if that causes damage to trees, then that will be covered by the condition that the plaintiffs pay compensation for such damage.
[275] In addition to the terms set out in Appendix 1 I impose the further condition that the plaintiffs for whom a right of way is granted are to compensate Squally Cove for any damage to Squally Cove’s trees in upgrading the red road for the purposes of the right of way. Any dispute about the value of those trees is to be referred to an expert agreed to by the parties and, if there is no such agreement, appointed by the President of the New Zealand Law Society. I also reserve leave for any party to
apply further to the Court if the parties intend to seal an order on the terms of the relief that I have granted and some difficulty arises in that respect.
[276] For the avoidance of doubt, this relief does not prevent the parties from negotiating access over the yellow road on reasonable conditions if they wish to do so.
[277] The plaintiffs have succeeded. My preliminary view is that the costs should follow the event and that costs should be ordered on a 2C basis. The C allocation would recognise that, although the plaintiffs were all represented by the same counsel, more than the normal amount of time for each step is likely to have been necessary because of the number of plaintiffs. If the parties do not accept this preliminary indication, and are unable to settle costs by negotiation, they have leave to file brief submissions (limited to no more than three pages) on the items in dispute within six weeks of today’s judgment.
Mallon J
Solicitors:
Rout Milner Fitchett for the plaintiff
McMadden McMeeken Phillips for the first defendants
Radich Law for the second defendants
Appendix 1
[1] The form of reasonable access shall be an Easement Instrument (Right of
Way) in terms of the Land Transfer Act 1952 and the Land Transfer Regulations
2002.
[2] The right of way shall specify that the servient lands are [details to be included]* and the dominant lands are [details to be included]*.
[3] The right of way documentation shall provide:
(a) The right of way shall serve no more than 30 household units; Replace a) with:
The right of way shall serve no more than 30 users which are to be allocated to the first to third, fifth to eighth, and tenth to twelfth plaintiffs and any other users which the parties to this litigation may agree to include.i
(b)That there shall be no maintenance or formation obligations on the registered proprietors of the servient lands unless the need for any maintenance has arisen on account of the use of the right of way by or on behalf of the registered proprietors of the servient lands and in such case such allocation of cost as is fair shall be made;
(c) Otherwise all maintenance and formation obligations in relation to the right of way shall accrue to the registered proprietors of the dominant lands on a joint and several basis and there shall be an obligation on such registered proprietors on the same basis to maintain the right of way to a reasonable standard having regard to its use.
(d)The use of the right of way by the registered proprietors of the dominant lands shall be limited to such owners and their invitees and
WAGG v SQUALLY COVE FORESTRY LIMITED HC NEL CIV 2010-442-445 [19 October 2012]
the right of way shall not be thrown open for use by the general public;
(e) The registered proprietors of the servient lands may limit or curtail the use of the right of way during such times as it may be reasonable for them to do so to allow for commercial forest harvesting on lands belonging to the registered proprietors of the servient lands but the terms of any such limitation or curtailment of use shall be reasonable and no more than is reasonably required;
(f) Any dispute in relation to matters arising out of or incidental to the operation of the right of way shall be dealt with by arbitration.
[4] If there is any dispute about the form of the right of way documentation the dispute shall be referred to an independent experienced conveyancing solicitor for his or her determination as an expert.
[5] The right of way shall be the subject of a survey and shall be shown on a cadastral survey data set and ultimately on a plan deposited under the Land Transfer Act 1952.
[6] The right of way and the area where it intersects with the formed French Pass Road shall be formed and constructed in accordance with the following requirements:
(a) The design and construction must be undertaken by and supervised by an appropriately experienced chartered professional engineer;
(b) The design and construction must aim to provide for a minimum of
4.5 metres of carriageway within a six metre formation but with the signing off of the right of way formation and standards to be left to the auditor and Council process set out at [7] and [8] below;
(c) Appropriate stormwater controls;
(d) Widening at bends where required;
(e) In the case of the intersection an approach to the French Pass Road at no more than 20 degrees from a right angle.
Delete “at no more than 20 degrees from a right angle” in [6](e) and replace with “to the satisfaction of the Marlborough District Council and pursuant to the process in [7] and [8] below.”
[7] Before further formation of the right of way and the intersection begins the design shall be audited by a qualified road safety auditor. Such auditor shall provide a written report to Marlborough District Council for its consideration.
[8] When any report of a road safety auditor in terms of [7] above has been approved by Council the design shall be implemented by construction. A post construction audit shall be undertaken by the auditor and any defects identified by the auditor shall be remedied to the auditor’s satisfaction.
[9] When the auditor is satisfied with the post construction state of the right of way and the intersection he or she shall report to the registered proprietors of the servient land and the registered proprietors of the dominant land and to the Marlborough District Council.
[10] No right of way documentation shall be registered under the Land Transfer Act 1952 until such time as the road safety auditor is satisfied with the post construction state of the right of way and the intersection.
[11] All of the costs of design, construction, audit and associated matters shall be met by the registered proprietors of the dominant lands on a joint and several basis.
[12] The costs in connection with the right of way documentation, the survey and the registration of the documentation shall be met by the registered proprietors of the dominant lands on a joint and several basis.
[13] The costs of any expert conveyancing solicitor shall be met by the registered proprietors of the dominant lands on a joint and several basis unless the conveyancing solicitor determines that the costs have been incurred or have been contributed to by unreasonable behaviour on the part of the registered proprietors of the servient lands in which case the conveyancing solicitor shall have the power to allocate costs and they shall be met accordingly.
[14] For the purpose of service and notifications:
(a) The address of the registered proprietors of the servient lands shall be
[details]*;
(b)The address of the registered proprietors of the dominant lands shall be [details]*;
(c) The address of Marlborough District Council shall be Seymour Street, PO Box 443, Blenheim.
* The parties are to complete these details, with the intent being that the servient land is the Squally Cove land over which the red road passes and the dominant lands are the lands owned by the first to third, fifth to eighth, and tenth to twelfth plaintiffs and any further lands that the parties to this litigation may agree to include (for
example, the fourth and ninth plaintiffs).
i This is a slight variation to the mechanism proposed by the plaintiffs for allocating the “spare” users but is intended to meet the same objective without it being necessary to involve the Court further. It is envisaged that this may at least include the ninth plaintiffs (who already have a licence) and the fourth plaintiffs (who discontinued their claim but who own property over which the blue road passes).
6
4
0