Kingfish Lodge (1993) Ltd v Archer [2000] NZCA 150; [2000] 3 NZLR 364; [2001] NZRMA 1; (2000) 4 NZ ConvC 193,246 (2 August 2000)

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Kingfish Lodge (1993) Ltd v Archer [2000] NZCA 150 (2 August 2000); [2000] 3 NZLR 364; [2001] NZRMA 1; (2000) 4 NZ ConvC 193,246

Last Updated: 8 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 133/99

	BETWEEN	KINGFISH LODGE (1993) LIMITED
		Appellant

	AND	C J ARCHER
		First Respondent

	AND	R D BURTON AND A J KENNEDY
		Second Respondents
	AND	THE FAR NORTH DISTRICT COUNCIL
		Third Respondent
	AND	C T MINHINNICK AND A N M MINHINNICK
		Fourth Respondents
	AND	R I GREENBURY
		Fifth Respondent
	AND	C A SHEPHERD AND O B J SHEPHERD
		Sixth Respondents

Hearing:	18 July 2000
Coram:	Keith J Doogue J Fisher J
Appearances:	M J Ruffin for Appellant
	J O Upton QC & W Peters for First Respondent
	R M Bell for Second Respondents
Judgment:	2 August 2000

JUDGMENT OF THE COURT DELIVERED BY FISHER J

Introduction

[1] Kingfish appeals against the dismissal of its application for private road access to its tourist lodge on the shores of the Whangaroa Harbour. It sought an order under s129B of the Property Law Act 1952 requiring neighbours to provide access to the land on the basis that it was landlocked. The application was successfully opposed by the neighbours whose land would be affected, the first, second, fourth, fifth and sixth respondents. Potter J held that Kingfish’s land was not landlocked for the purpose of s129B. Even if it had been landlocked, she would have exercised her discretion against granting relief. The question is whether she was wrong in those two conclusions.

Background

[2] Kingfish’s property is a 12 hectare one near the entrance to the Whangaroa Harbour. Apart from the usual marginal strip along the shoreline the property runs down to the sea. Access is and always has been by sea, there being a wharf for that purpose.
[3] The Crown originally took the property for defence purposes as an appropriation from a larger farm, which remained in private hands. After the Second World War the appropriated property was no longer needed for defence purposes. It was returned to private use in 1947 but without amalgamating it again with the surrounding farm. It has been continuously used as an independent fishing lodge ever since.
[4] Initially the proprietors of the lodge held it under a series of leases and licences from the Crown. In 1985 the Crown transferred the freehold title to the proprietors. The present proprietors, Mr and Mrs Leary, purchased the Lodge in the name of their private company, Kingfish Lodge (1993) Limited, in 1993. They run a twelve-room licensed tourist lodge there.
[5] Surrounding the Kingfish land on all sides except the sea is the 211 hectare farm of the first respondent, Mr Archer. Road access to Mr Archer’s land is by easement over the 50 hectare property of the second respondents, Mr Burton and Ms Kennedy. Their property in turn adjoins Tauranga Bay Road. The Kingfish proposal is that its property should be linked to Tauranga Bay Road by a private road over the Archer and Burton/Kennedy properties, the road being protected by an easement in favour of Kingfish.
[6] The fourth, fifth and sixth respondents have contiguous residential properties of about half a hectare each. Their properties are adjacent to the Burton/Kennedy property at the Tauranga Bay Rd end. They were joined in the proceedings because part of the access road presently used by the Archer and Burton/Kennedy properties encroached on to their land. There were engineering difficulties in moving the access road fully on to the Burton/Kennedy property in the way that had been intended when Mr Archer’s easement over the Burton/Kennedy land was created. Apart from some submissions presented in the High Court, the fourth, fifth and sixth respondents have taken no active part in the proceedings.
[7] The third respondent, the Far North District Council, is the local territorial authority. The Council was served as required under the Property Law Act s129B(4) but took no active part in the hearings in either Court.

The roading proposal

[8] When Kingfish purchased in 1993 the new proprietors, Mr and Mrs Leary, set about improvements to the Lodge and its surrounds. They were encouraged in this by the operative district plan of the Far North District Council. It expressly recorded that “the Council will encourage upgrading of the Kingfish Lodge in line with its policy of encouraging tourist facilities”. In addition, work was needed on seawalls, the wharf and other aspects of the Lodge.
[9] The Learys subsequently proposed development of the property in two stages. Stage one would provide for an additional 15 “accommodation units”. There would also be improvements to the wharf, seawalls to stop erosion, installation of a boat ramp, and extensive replanting. Existing and future buildings would be divided into separate unit titles under the Unit Titles Act. All of that could be done quite independently of stage two. Stage two would involve the creation of a further 15 “development units” which could be sold to private investors.
[10] Both stages would increase transport demands. The demands would be particularly heavy during the construction phase but would continue thereafter given the increased scale of permanent operations on the site. Development aside, the Learys also had concerns about the disadvantages and inconveniences of access by sea alone.
[11] With those plans and concerns in mind, the Learys proposed a 3.5 kilometre private road over the neighbouring properties at a cost in excess of half a million dollars. Negotiations with the neighbours began in 1995 and continued over the next two years. The parties appear to have come close to agreement but talks foundered over compensation. Eventually in September 1997 Kingfish issued the present proceedings in the High Court.
[12] The Learys also pressed ahead with an application for resource consent to both stages of the proposed development. On 8 October 1998 consent was given but only to a modified form of stage one. Kingfish was permitted to construct another eleven accommodation units along with seawalls to protect against erosion, upgrading of the wharf, and installation of a boat ramp. Consent to stage one was given on the condition that Kingfish proceed with an extensive replanting programme.
[13] Resource consent to stage two was declined for essentially two reasons. One was said to be that “the proposed private road access for it was not included in the application, particularly in that the proposed access was not described, its location was not detailed. An assessment of any actual and potential effects of the proposed access and the way in which any adverse effects may be mitigated, was not covered in the application.” The other was that the stage two buildings would be on the upper part of the site and “to the maximum extent possible building development on the site should be clustered in the lower area of the site extending no higher than the western point elevation of the Kingfish Point Ridge”.

High Court proceedings and judgment

[14] It was against that background that Kingfish’s application for road access under s129B of the Property Law Act 1952 fell to be determined in the High Court. Section 129B materially provides:

(1) For the purposes of this section,—

(a) A piece of land is landlocked if there is no reasonable access to it:

(b) "Owner", in relation to any landlocked land, means the owner of the legal estate in fee simple, except where the landlocked land is leased to any person for a term of not less than 21 years, in which case the term "owner" means that other person:

(c) "Reasonable access" means physical access of such nature and quality as may be reasonably necessary to enable the occupier for the time being of the landlocked land to use and enjoy that land for any purpose for which the land may be used in accordance with the provisions of any right, permission, authority, consent, approval, or dispensation enjoyed or granted under the provisions of the Resource Management Act 1991.

(2) The owner of any piece of land that is landlocked (in this section referred to as the landlocked land) may apply at any time to the Court for an order in accordance with this section.

(3) On an application made under this section—

(a) The owner of each piece of land adjoining the landlocked land shall be joined as a defendant to the application:

(b) Every person having any estate or interest in the landlocked land, or in any other piece of land (whether or not that piece of land adjoins the landlocked land) that may be affected if the application is granted, or claiming to be a party to or to be entitled to any benefit under any mortgage, lease, easement, contract, or other instrument affecting or relating to any such land, and the local authority concerned, shall be entitled to be heard in relation to any application for or proposal to make any order under this section.

(4) The applicant shall, as soon as practicable after filing his application in Court, serve a copy of it on the local authority concerned.

(5) For the purposes of subsection (3) of this section the Court may, if in its opinion notice of the application or proposal should be given to any person mentioned in that subsection, direct that such notice as it thinks fit shall be given to that person by the applicant or by any other person.

(6) In considering an application under this section the Court shall have regard to—

(a) The nature and quality of the access (if any) to the landlocked land that existed when the applicant purchased or otherwise acquired the land;

(b) The circumstances in which the landlocked land became landlocked;

(c) The conduct of the applicant and the other parties, including any attempts that they may have made to negotiate reasonable access to the landlocked land;

(d) The hardship that would be caused to the applicant by the refusal to make an order in relation to the hardship that would be caused to any other person by the making of the order; and

(e) Such other matters as the Court considers relevant.

(7) If, after taking into consideration the matters specified in subsection (6) of this section, and all other matters that the Court considers relevant, the Court is of the opinion that the applicant should be granted reasonable access to the landlocked land, it may make an order for that purpose—

(a) Vesting in the owner of the legal estate in fee simple in the landlocked land the legal estate in fee simple in any other piece of land (whether or not that piece of land adjoins the landlocked land):

(b) Attaching and making appurtenant to the landlocked land an easement over any other piece of land (whether or not that piece of land adjoins the landlocked land).

(8) Any order under this section may be made upon such terms and subject to such conditions as the Court thinks fit in respect of--

(a) The payment of compensation by the applicant to any other person; and

(b) The exchange of any land by the applicant and any other person; and

(c) The fencing of any land, and the upkeep and maintenance of any fence; and

(d) The upkeep and maintenance of any land over which an easement is to be granted; and

(e) The carrying out of any survey that may be required by the District Land Registrar before he will issue, in respect of any piece of land affected by the order, a certificate of title free of any limitations as to title or parcels within the meaning of Part XII of the Land Transfer Act 1952; and

(f) The time in which any work necessary to give effect to the order is to be carried out; and

(g) The execution, stamping, and delivery of any instrument; and

(h) Such other matters as the Court considers relevant.

(9) Every order made under subsection (7) of this section shall provide that the reasonable cost of carrying out any work necessary to give effect to the order shall be borne by the applicant for the order, unless the Court is satisfied, having regard to the matters specified in paragraphs (b) and (c) of subsection (6) of this section, that it is just and equitable to require any other person to pay the whole or any specified share of the cost of such work.

(10) Where the Court makes an order under this section, the Court may, in the order—

(a) Declare any estate or interest in any piece of land affected by the order to be free of any mortgage, lease, easement, or other encumbrance affecting that piece of land, or vary, to such extent as it considers necessary in the circumstances, any mortgage, lease, easement, contract, or other instrument affecting or relating to that piece of land:

(b) Declare that the legal estate in fee simple in any piece of land to be vested in the owner of the legal estate in fee simple in the landlocked land shall so vest subject to the same terms, conditions, liabilities, and encumbrances as those on and subject to which the owner holds the estate in the landlocked land, and shall be subject in all respects to any instrument of mortgage, charge, lease, sublease, or other encumbrance affecting that estate in the landlocked land as if the piece of land to be vested had been expressly included in the instrument.

(11) Where the Court makes an order (in this subsection referred to as the principal order) under subsection (7) of this section, it may, at the same time or at any other time on an application made to it in that behalf, make—

(a) An order authorising any person named in the order, his agents, employees, and contractors, with or without animals, vehicles, aircraft, hovercraft, and any mode of conveyance and any equipment, to enter upon any piece of land specified in the order for the purpose of carrying out any work necessary to give effect to the principal order.

(b) Such other consequential order as the Court may think necessary or desirable to give full effect to the principal order.

[15] The application under that provision came before Potter J for hearing in December 1998. It was actively opposed by the first and second respondents. In addition to taking a view of the site, the Judge heard evidence and submissions over a period of six days.
[16] The Judge rejected Kingfish’s contention that physical access excluded access by sea. She concluded that “physical access” merely denoted bodily (as distinct from mental or spiritual) access. Whether or not vehicular access was required depended on the circumstances of the particular case. The Judge also adverted to the marginal strip. While not expressly referring to the strip when answering the question whether the property was landlocked, she pointed out that the Lodge had successfully operated for many years on the strength of sea access alone. Plainly the legal status of the marginal strip had not proved an obstacle in practice.
[17] Kingfish then contended that even if it did have a degree of physical access, the access did not have that nature and quality which was reasonably necessary to allow the land to be used for its permitted purposes in terms of s129B(1)(c). Whether better access was reasonably necessary involved a value judgment, which required the Judge to address many detailed considerations. Given the nature of an appeal of this kind it is necessary to outline her approach in some detail.
[18] The Judge acknowledged that the Kingfish property was surrounded by Mr Archer’s land and that access overland was possible only at the will, and to the extent, permitted by Mr Archer. However, the focus lay upon the adequacy of the sea access, which the Judge described as “a short boat ride from a wharf at Whangaroa”. She pointed out that in Kingfish’s resource management application, Kingfish had essentially contended that stage one of its proposed development could satisfactorily proceed on the strength of that sea access, and that the Joint Hearings Committee of the Council had been prepared to give its consent on that basis.
[19] The Judge then addressed a series of specific disadvantages and inconveniences which the sea access entailed. Not included were alleged difficulties caused by adverse weather conditions, no specific evidence having been presented to support that allegation. Matters the Judge expressly took into account included difficulties over carparking at the Whangaroa Wharf, transport of inward perishable supplies, transport of outward rubbish disposal, fire appliance access, sewage tank access, medical emergency, ambulance/doctor access, guest vehicle, limousine and mini coach access, movement of staff, transport of maintenance materials and service people, transport of construction materials for the development work and the cost override of approximately 30 percent on both construction and continuing operations.
[20] The Judge recognised that those burdens would be encountered when raising the standards of the Kingfish Lodge operation to meet travel industry requirements and so maintain and develop market share, quite apart from the extra demands which would be associated with the stage two development. She also recognised that they were to be considered in the context of permitted resource management uses and the express encouragement for upgrading Kingfish Lodge in the Operative District Plan. Nevertheless she concluded that this was not a situation where want of reasonable access wholly prevented realisation of development potential. She pointed out that even when confined to its existing sea access, Kingfish had been able to gain stage one development consent, albeit at a level slightly reduced from that which it had wanted.
[21] On the question whether the land was landlocked due to lack of reasonable access the Judge concluded:

I accept that the inconveniences, difficulties and cost overrides experienced by the plaintiff, are, at least to some extent, the product of limitations imposed by water access. However, similar impediments and disadvantages are usually associated with any geographically isolated property, they being an aspect of the price to be paid for the advantages of remoteness. In my view, they do not either individually or in combination have the result that the plaintiffs land is denied reasonable access. I conclude, therefore, that the plaintiff’s land is not landlocked within the meaning of s129B.

[22] In case she were wrong in her conclusion that the Kingfish land was not landlocked, the Judge went on to say how she would have exercised her discretion pursuant to s129B(6) and (7). Proceeding through the considerations listed in s129B(6), she concluded as to para (a) that Kingfish had purchased in full knowledge that the property had sea access only. As to (b) she pointed out that it was not a case where the land had become landlocked as the result of any action by one of the current parties. As to (c) she complimented the parties on the way they had conducted themselves but did not consider the history of negotiations to be relevant. She recognised that para (d) (“the hardship that would be caused to the applicant by the refusal to make an order in relation to the hardship that would be caused to any other person by the making of the order”) required more lengthy consideration.
[23] For the purpose of s129B(6)(d), the Judge had already traversed the hardships encountered by Kingfish in the context of s129B(1). In the present context those hardships had to be compared with hardship to the owners of the Archer and Burton/Kennedy properties. In their cases the Judge accepted that the road access proposed would result in a substantial increase in traffic, contribution to road upkeep, lack of flexibility in livestock movements, invasion of privacy, increased security risk, unwelcome ongoing contractual relationships, the potential for future differences between the parties, pressure on neighbourly relationships, business competition with the homestays offered at Butterfly Bay, difficulties over enforcing covenants against individual unit title holders, and minimal betterment given the lack of current intention to further subdivide. Referring to Murray v Devonport Borough Council [1980] 2 NZLR 572 at 573 and Roberts v Cleveland (High Court, Nelson, 23 February 1990, M 18/87, Jeffries J, at p5, upheld on appeal [1993] 2 NZLR 17) and other decisions, the Judge also considered that the central purpose of the statutory provision was to remedy a situation which had arisen by inadvertence or historical accident and that there was no evidence of such in the present case.
[24] Weighing all of those considerations, the Judge concluded that had it been necessary to exercise her discretion under s129B(6) and (7), she would have declined the application in any event.

Appeal ground one: no physical access

[25] In this Court Mr Ruffin renewed the submission that the Kingfish property was landlocked due to lack of physical access. He submitted that the phrase “physical access” in s129B(1)(c) “must mean access to the land physically by an individual without any external assistance (e.g. boat or helicopter) to overcome the physical barriers and obstacles”.
[26] We are unable to accept that submission. In our view the word “physical” was used to place the emphasis upon access in fact. A property owner normally has both a legal right of access and the physical means to exploit it. In exceptional cases there can be one without the other. Paper roads can be physically impassable. Routes which are physically passable are not always supported by strict legal rights. In our view the phrase “physical access” was used in s129B(1)(c) to make it clear that in this context the factual situation may be decisive.
[27] The other factor said to negate physical access was that Kingfish’s property is separated from the sea by the Crown’s coastal marginal strip. The marginal strip is the usual strip of land running along a foreshore reserved by the Crown pursuant to s24 of the Conservation Act 1987. Mr Ruffin contended that this strip precluded physical access to the property for present purposes.
[28] One of the purposes of a marginal strip is “to enable public access to any adjacent water courses or bodies of water” – see s24C(b) of the Conservation Act. That provision would seem to be broad enough to include the use of the marginal strip as a means of access between the sea and the Kingfish property. But, more importantly, the presence of the marginal strip has never constituted an impediment to use of the sea as a means of access to the Kingfish property in practice. Nor is there any suggestion that it could do so in the future. Given our interpretation of the expression “physical access” discussed earlier, we cannot see that the existence of the marginal strip has any bearing upon the question whether the land was landlocked for the purposes of s129B.
[29] “Physical access” in the present case turns on the question whether Kingfish has actual access to its property in practice. Obviously it does. The real question raised by s129B(1) is whether the physical access which Kingfish does enjoy is adequate for the property’s permitted resource management purposes.

Appeal ground two: lack of reasonably necessary access

[30] The Kingfish property could still be “landlocked” for present purposes if the physical access which it does have fails to meet the nature and quality reasonably necessary to enable use and enjoyment for the purposes permitted under the Resource Management Act.
[31] Plainly a major value judgment was involved at this point. The tenor of Mr Ruffin’s submissions was to rehearse the whole of the factual ground again on appeal. We question the value of that exercise. The Judge dealt with the subject at length after taking a view and seeing and hearing many witnesses. In the absence of clear error, appellate courts will be slow to depart from assessments by trial judges in those circumstances. The matter is not to be approached de novo.
[32] Nor can we accept Mr Ruffin’s complaint that the Judge failed to individually list and comprehensively discuss each of the disadvantages and inconveniences at a detailed level. The important thing is that she referred to all the significant ones. It is not to be expected that in a matter of this kind a judge will individually enumerate and discuss every last detail.
[33] Turning to his more specific points, Mr Ruffin submitted that in addressing the adequacy of sea access the Judge wrongly focused upon those access requirements which would have been needed for stage two of the development. We agree that access requirements for existing use and developments to stage one level were the test, given the resource management status of the property as at the date of the High Court hearing. However, we cannot accept that the Judge approached the matter on any other basis. Most of the disadvantages and inconveniences listed in her judgment relate to the existing operations of the Lodge. The Judge also took into account Kingfish’s wish to raise the standards of the Lodge to meet travel industry requirements for the purpose of maintaining and developing market share and, by implication, the other features of stage one. While she rightly discounted the demands which would have been posed by stage two, we can find no instance in which she wrongly assumed that without stage two, the access disadvantages and inconveniences would evaporate.
[34] Mr Ruffin also submitted that the Judge was wrong to approach the matter on the basis that Kingfish had effectively conceded before the Joint Hearings Committee of the Council that access by sea was reasonable for existing use of the land and for stage one development. We do not accept the criticism. Kingfish’s application for resource consent was advanced on the basis that resource management consent could properly be granted for stage one without road access. An application advanced on that basis cannot be reconciled with a contention in the High Court that the proposed activities could not be satisfactorily carried out without road access.
[35] Consistent with Kingfish’s approach before the Council’s Joint Hearings Committee, the Judge noted the Council’s letter of 4 December 1998 to the second defendants recording that “Council is satisfied that access to the site is available by sea, and a 321(3)(d) certificate will be issued by Council...”. The normal requirement for a subdivision under s321 of the Local Government 1974 is that each allotment have a frontage to an existing road or private road. As the Judge noted, s321(3)(d) creates an exception where “the allotment abuts upon any ... seashore and the council is satisfied that reasonable access by ... sea is afforded to the allotment and it is not reasonable that the owner should be required to provide access by road or private road...” (emphasis added). In the end the Judge had to make up her own mind whether there was reasonable access for the purposes of the Property Law Act but she was entitled to take into account Kingfish’s own assessment of the matter when advancing its case for a resource consent.
[36] Nothing we have heard persuades us that the Judge was wrong in her overall conclusion that the existing access by sea provided all that was reasonably necessary for use and enjoyment for the purposes permitted under the Resource Management Act. As the property was not landlocked there was no jurisdiction to grant relief under the Property Law Act. It follows that the appeal must fail.

Appeal ground three: wrongful exercise of discretion under s129B(6) and (7)

[37] In deference to the arguments of the appellant we comment briefly upon the way in which Potter J would have exercised her discretion had the property been landlocked.
[38] As a preliminary point, we accept that the Judge rather overstated the case in her comment that the central purpose of the Act was to remedy a situation which had arisen by inadvertence or historical accident. The criteria specified in s129B(6) speak for themselves. However it is implicit in some of those criteria that inadvertence or historical accident will make it easier to secure relief. Nor is there anything in the judgment to suggest that the comment diverted the Judge away from a careful review of the specified statutory criteria and their application to the facts in the present case.
[39] We further accept that to up to a point, hardship to neighbours could have been mitigated in part by the imposition of appropriate conditions. The direct costs of construction and maintenance could have been imposed upon Kingfish and its purchasers.Binding obligations could have been imposed upon a body corporate created for unit title purposes. The creation of a road at Kingfish’s expense would have produced some degree of betterment to mitigate other disadvantages, at least in the sense that it would facilitate future development if and when wanted.
[40] It could not be suggested, however, that the Judge was wrong to conclude that substantial hardship to the neighbours would have remained regardless of the conditions which might have been imposed. Enforcement of financial and performance obligations can itself be problematic, time-consuming, stressful and expensive. The principal attraction of the area was its seclusion. No conditions were capable of protecting the neighbours against some degree of intrusion if the road went through. Nor was there any justification for saddling the neighbours with a need to develop their properties in order to exploit the potential for betterment.
[41] We could find no merit in the remainder of the points which Mr Ruffin advanced in connection with the statutory discretion. Acceptance of his submissions would have typically required belittling the privacy concerns of the neighbours, the security threats to their properties posed by multiple guests and visitors, the increase in traffic which would inevitably result, and the inconvenience of having to negotiate over, and enforce, ongoing roading obligations. It must be questioned whether arguments of the nature made were worth advancing. We can see nothing wrong in the Judge’s approach to the statutory discretion.

Fresh evidence

[42] Both sides sought to introduce fresh evidence on appeal. Having considered the proposed evidence we concluded that it should not be admitted. Much of the hearing and judgment at first instance was devoted to future needs, developments and consequences. We cannot see that the events which have occurred since Potter J’s judgment fell outside the broad range of those which had already been contemplated.

Result

[43] The appeal is dismissed. The appellant must pay the costs of the first and second respondents in the sum of $5,000 each together with the reasonable travel and accommodation expenses of counsel in each case. The other respondents having taken no active part in the appeal, there will be no order for costs in their favour.

Solicitors
Meredith Connell & Co, Auckland for Appellant
Thomson Wilson, Whangarei for First Respondent
Webb Ross Johnson, Whangarei for Second Respondents