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Court of Appeal of New Zealand |
Last Updated: 9 December 2011
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IN THE COURT OF APPEAL OF NEW ZEALAND
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CA 243/99
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BETWEEN
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GAVIN LOGAN
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Appellant
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AND
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AUCKLAND CITY COUNCIL
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Respondent
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Hearing:
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28 February 2000
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Coram:
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Richardson P
Thomas J Tipping J |
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Appearances:
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Appellant in person
D A Kirkpatrick and P M S McNamara for Respondent J A L Oliver and E F Fitzgerald for Building Industry Authority |
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Judgment:
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9 March 2000
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JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P
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[1] This appeal is against a judgment of Hammond J of 1 October 1999. The proceeding in the High Court was an appeal on questions of law against a determination of the Building Industry Authority ("the Authority") under Part III of the Building Act 1991.
The legal issues
[2] The proceeding relates to a building development by Mr G Logan, the present appellant, at 72 Melrose Road, Mt Roskill, Auckland. His development became embroiled in a controversy between the Authority and the Auckland City Council, the territorial authority (the Council), over the jurisdiction of the Authority and the interpretation and application of the Building Act to the particular issues. That led to two determinations in which the Authority ruled against the Council. The Council did not appeal against the first determination but did so against the second, issued on 5 May 1999, which covered much the same ground as the first. The Authority took a full part in the hearing in the High Court and was granted intervener status in this court under r19 of the Court of Appeal (Civil) Rules 1997.
[3] Section 86 of the Building Act confines appeals to the High Court from determinations of the Authority to appeals on points of law. The Council's notice of appeal raised six questions for determination under two heads. Paragraphs (a), (b) and (c) concerned the interpretation of s36 relating to building on land subject to specified hazards, including inundation (flooding), and paras (d), (e) and (f) related to a stopbank, known technically as a bund, which the Council proposed constructing alongside the channel of a stormwater drain. The questions were:
(a) Is the relationship between section 36(1) and 36(2) of the Act such that if the requirements of either section 36(1)(a) or section 36(1)(b) are met, a territorial authority must refuse consent under section 36(1) but may grant consent under s36(2)?
(b) Is a territorial authority required to impose a condition in terms of section 36(2) of the Act on a building consent where:
(i) land on which building work is to take place is subject to, or likely to be subject to inundation or some other hazard identified in section 36(2); and
(ii) the building work itself will not accelerate, worsen, or result in inundation or that other hazard; and
(iii) the building work in all respects meets the requirements of section 34 of the Act; and
(iv) the territorial authority is satisfied that the applicant for building consent is the owner?
(c) Can territorial authority only impose a condition in terms of section 36(2) on a building consent, where it has granted a waiver or modification of the Building Code?
(d) Does the Authority have jurisdiction to give directions in respect of a bund located on land other than that which is subject to the consent out of which the Determination arises?
(e) Is a bund or construction of a bund, which is neither work for or in connection with the construction, alteration, demolition or removal of a building, nor site work, "building work" as defined in the Act?
(f) Are pipes, drains, bunds and structures not intended for occupation by people, machinery or chattels, which are owned or operated by a network utility operator and form part of a system for reticulating other property, excluded from the definition of "building" under section 3(1)(a) of the Act?
[4] As well, questions of any appropriate relief for the Council arose if the Council succeeded in its appeal.
The statute
[5] The immediately relevant provisions of the Building Act relating to the first set of questions are s36(1), (2) and (4) and s34(3) and (4). Those relating to the second set of questions are the definitions of "building", "building work" and "network utility operator" in ss 3 and 2 respectively.
- (1) Except as provided for in subsection (2) of this section, a territorial authority shall refuse to grant a building consent involving construction of a building or major alterations to a building if--
(a) The land on which the building work is to take place is subject to, or is likely to be subject to, erosion, avulsion, alluvion, falling debris, subsidence, inundation, or slippage; or
(b) The building work itself is likely to accelerate, worsen, or result in erosion, avulsion, alluvion, falling debris, subsidence, inundation, or slippage of that land or any other property--
unless the territorial authority is satisfied that adequate provision has been or will be made to--
(c) Protect the land or building work or that other property concerned from erosion, avulsion, alluvion, falling debris, subsidence, inundation, or slippage; or
(d) Restore any damage to the land or that other property concerned as a result of the building work.
(2) Where a building consent is applied for and the territorial authority considers that--
(a) The building work itself will not accelerate, worsen, or result in erosion, avulsion, alluvion, falling debris, subsidence, inundation, or slippage of that land or any other property; but
(b) The land on which the building work is to take place is subject to, or is likely to be subject to, erosion, avulsion, alluvion, falling debris, subsidence, inundation, or slippage; and
(c) The building work which is to take place is in all other respects such that the requirements of section 34 of this Act have been met--
the territorial authority shall, if it is satisfied that the applicant is the owner in terms of this section, grant the building consent, and shall include as a condition of that consent that the territorial authority shall, forthwith upon the issue of that consent, notify the District Land Registrar of the land registration district in which the land to which the consent relates is situated; and the District Land Registrar shall make an entry on the certificate of title to the land that a building consent has been issued in respect of a building on land that is described in subsection (1) (a) of this section. In any such case it shall not be necessary for the Registrar to record the like entry on the duplicate of the certificate of title.
(4) Where--
(a Any building consent has been issued under subsection (2) of this section; and
(b) The territorial authority has notified the District Land Registrar in accordance with subsection (2) of this section that it has issued the consent; and
(c) The territorial authority has not notified the District Land Registrar under subsection (3) of this section that it has determined that the entry made on the certificate of title of the land is no longer required; and
(d) The building to which the building consent relates later suffers damage arising directly or indirectly from erosion, subsidence, avulsion, alluvion, falling debris, inundation, or slippage, or from inundation arising from such erosion, subsidence, avulsion, alluvion, falling debris, or slippage--
the territorial authority and every member, employee, or agent of the territorial authority shall not be under any civil liability to any person having an interest in that building on the grounds that it issued a building consent for the building in the knowledge that the building for which the consent was issued or the land on which the building was situated was, or was likely to be, subject to damage arising, directly or indirectly, from erosion, subsidence, avulsion, alluvion, falling debris, inundation, or slippage or from inundation arising from such erosion, subsidence, avulsion, alluvion, falling debris, or slippage.
(4) The territorial authority may grant a building consent subject to--
(a) Such waivers or modifications of the building code, or any document for use in establishing compliance with the building code, subject to such conditions as the territorial authority considers appropriate; and
(b) Such conditions as the territorial authority is authorised to impose under this Act or the regulations in force under this Act.
(a) Systems owned or operated by a network utility operator for the purpose of reticulation of other property; ...
"Building work" means work for or in connection with the construction, alteration, demolition, or removal of a building; and includes sitework:
"Network utility operator" means a person who--
...
(d) Is the operator of a sewerage system or a stormwater drainage system.
The factual background
[6] Mr Logan's company owned the land at 72 Melrose Road. The agreed statement of facts before the High Court recorded that the land was subject to inundation. There was a house on the property. On 15 October 1998 the company applied for a building consent to erect two new dwellings and three carports on the site. The Council was satisfied that adequate provision would be made to protect the building work from inundation and that that work would not itself accelerate, worsen or result in inundation of the site or any other property.
[7] On 21 October 1998 the Council issued a building consent. The consent was not issued pursuant to any waiver or modification of the building code, as the building work met the requirements of the building code in all respects The consent was subject to the following condition:
Appropriately worded section 36 notices (Building Act), that the whole site floods and must not be developed to alter this flood flow is required to be registered on the titles of all properties comprising this consent, to Council approval. All costs to be borne by the applicant.
[8] On 13 November 1998 Mr Logan applied to the Authority under s17 for a determination in respect of the Council's decision. Leaving aside a matter concerning backflow preventers not put in issue on appeal to the High Court, the Authority's decision:
(b) Determines that the proposed bund and any associated building work is required to comply with the building code, subject to any waivers or modifications which the territorial authority may grant to itself under section 34(4) of the Building Act. In order to comply with clause E1.3.1 of the building code:
(i) Provisions must be made for overland flows of surface water from the applicant's property that are collected or concentrated by the bund to discharge into the watercourse;
...
(c) Reverses the territorial authority's decision that a section 36(2) entry is to be made on the title to the applicant's property.
[9] The bund which the Council proposed constructing was a 500mm high stopbank "which could well be a low concrete block wall" between the public stormwater drain on neighbouring property, over which it must be assumed the Council had an easement, and Mr Logan's property.
[10] The Council promptly but on an unspecified date appealed against the Authority's determination of 5 May 1999.
[11] In the meantime the building work was completed; the site was subdivided with cross-leases and between 1 June and 6 October 1999 the three one-third shares in the site and the leasehold interests in the respective parts were transferred by the company to third parties.
[12] In his judgment of 1 October 1999 Hammond J allowed the appeal, quashed the decision of the Authority, and substituted therefor:
A building consent will issue for the work applied for in terms of the plans and specifications as presented, subject to:
(a) the registration of s36(2) notices in the terms contained in the Territorial Authority's consent of 21 October 1998, and;
(b) the construction of back-flow preventers at any points at which the applicant's drain joins the Olsen channel.
He made an order for costs in favour of the Council, which was taken as being against both Mr Logan and the Authority.
[13] The Authority had not up till then sought to register the s36 notices against the titles to the land. It did so after a stay sought by Mr Logan pending the hearing of this appeal was declined on 13 December 1999.
The rival arguments in the High Court
[14] On the primary issue the Council in its written submission said:
The essence of the appellant's case as regards section 36 is as follows. The Act requires territorial authorities to issue a building consent where proposed building work complies with the building code. Section 36(2) of the Act carries over this general principle to circumstances where land on which building work is to take place is subject to natural hazards such as inundation, but the building work itself is not likely to accelerate, worsen or result in that natural hazard occurring. A territorial authority required to issue consent in these circumstances is also required to impose a condition on consent requiring the certificate of title for the land in question to be suitably tagged to indicate the existence of that hazard.
[15] As Hammond J summarised the argument, s36(1) and (2) run in tandem. Section 36(1) ensures that there is adequate protection qua the building. Where the land on which the building stands is likely to be subject to inundation (s36(2)(b)), s36(2) applies and notification is required.
[16] The argument for the Authority (and Mr Logan) as summarised by Hammond J was that s36(1) and (2) are to be approached sequentially. The question under subs(1) was whether the Authority was satisfied that adequate provision would be made to protect the land and building from inundation and if answered affirmatively, as here, that was the end of the inquiry and s36(2) did not come into play.
[17] They also contended that s36(2) was addressed only to the situation in which the territorial authority grants a waiver or modification of the building code, in which case it directs the placement of the s36(2) notice on the title and the territorial authority gains protection against liability to purchasers under s36(4). The argument was that it is only if the territorial authority grants a waiver or modification of the building code that there is an additional risk relating to the natural hazard. And the territorial authority has means other than the blot of a s36(2) entry on the title to make known that the land itself is prone to the listed hazards, e.g. planning maps under the Resource Management Act 1991, project information memoranda under s31 of the Building Act, and land information memoranda under the Local Government Official Information and Meetings Act 1987.
The High Court decision
[18] Hammond J expressed concern that what he saw as the central issue was not in contest and so not before him. Where the land on which the building work is to take place is subject to inundation, a building consent is not to issue under s36(1) unless the territorial authority or the Building Industry Authority is satisfied that "the building will be 'adequately protected' from the inundation". That provision, he said, seemed to have been read very narrowly by both the Authority and the Council as satisfying the application where the protection is from the result of inundation to the interior of the residence, whereas the Judge saw the obligation as protecting against the inundation of the site itself where, at least as in this case, the building and the site are intimately connected.
[19] However, on the arguments addressed to him he preferred the construction of the section advanced for the Council. The work cannot advance at all if there is not "adequate provision ... to protect" against inundation under s36(1). But it can advance, with building code compliance, even if there is still inundation, under s36(2) provided there is the title notification provided for in s36(2). In that sense, the two subsections are complementary.
[20] Further, the construction urged by the Council was supported by the general purposes of s36:
This statutory provision has to contend with three interests, simultaneously. First, there is the applicant's legitimate interest that the building work complies with the code. Secondly, there is the future purchaser's interest in having the susceptibility of the land to a natural hazard drawn to their attention. Thirdly, there is a Territorial Authority's interest in being protected from civil liability to a future purchaser arising from the granting of consent, in the event that the land or building is subsequently damaged because of that hazard. Section 36(4) grants that protection in the event that consent is issued subject to a s36(2) condition. The point here is that there is nothing in the construction contended for by the appellants which offends this difficult balancing exercise - if anything it supports it - and no manifest absurdity arises.
[21] Finally, Hammond J dealt shortly with the bund issue, holding that, at least on Mr Logan's application, the Authority had no jurisdiction to determine that the bund was subject to the building code. The only determination it could make related to work on land subject to the consent out of which the determination arose and the bund would not be on Mr Logan's land.
Mr Logan's position and the disposal of his appeal
[22] As noted in para [2], Mr Logan has been caught up in controversy between the Authority and the Council over the jurisdiction of the Authority and the interpretation of the Building Act. The drawn out processes have caused delays, inconvenience and expense. Mr Logan has completed the development and transferred the properties He has ceased development activity. His particular remaining concerns are the continuation of the s36(2) notice on the title, his liability under the costs order in the High Court, and his expenses in relation to the High Court proceeding and this appeal.
[23] It became clear in the course of argument that the s36(2) notice should not have been notified by the Council to the District Land Registrar in December 1999 and then entered on the titles. Section 36 applies where "the applicant is the owner" and the territorial authority is required "forthwith, upon the issue of that consent" to notify the District Land Registrar. The building consent was given on 21 October 1998. Nothing was done to notify the District Land Registrar until after Hammond J's decision a year later. By then the necessary identity between applicant for the building consent and owner of the land had ceased to exist. Clearly the Council did not display the sense of urgency inherent in the expression "forthwith". The relief sought by the Council in the High Court should not have been given. The only appropriate course is to allow the appeal and quash para (a) of the order. The Council should ensure that the notification is removed from the titles forthwith.
[24] The construction of backflow preventers was not properly in issue before the High Court and para (b) must also be quashed. The order for costs in the High Court is also quashed. However, it is reasonable that Mr Logan should have an order against both the Council and the Authority in respect of any reasonable expenses, including travel expenses in connection with the hearing of this appeal, which he incurred in the High Court and on this appeal, to be fixed if necessary by the Registrar of this court. The Authority and the Council are to bear their own costs in the High Court and on the hearing of this appeal.
The interpretation of s36 and the inter-relationship between subss (1) and (2)
[25] What we have said is sufficient to dispose formally of the appeal. However, counsel for the Authority and the Council asked the court to record our conclusions on the interpretation questions for the benefit of the Authority and territorial authorities. In the course of argument we reached a clear provisional view which we canvassed with counsel and we can set out that approach quite shortly.
[26] Section 36(1) and (2) are to be read in sequence, not with subs (2) coming first, as the Council was at one time inclined to suggest. On a natural and straightforward reading, subs (1) requires a territorial authority to refuse a building consent if either condition (a) or (b) is present unless satisfied that provision for adequate protection is made in respect of (c) or (d). If (c) or (d) as the case may be is satisfied, the building consent issues. But if in terms of the subsection a building consent is otherwise to be refused, then the opening words of the subsection "except as provided for in subsection (2)" come into play. In that situation the territorial authority is entitled to grant the building consent only where each of the paras (a), (b) and (c) of subs (2) is satisfied.
[27] Paragraphs (a) and (b) of s36(1) deal respectively with the land on which the building work is to take place (para (a)) and the building work itself (para (b)). Paragraph (a) is directed to the risk to the land of the listed hazards and para (b) to the likely impact of the building work in the same listed respects, on that land or other property. In short, both (a) and (b) are concerned with the risk to the land on which the building work is to take place. Para (a) applies where there is an existing risk; para (b) where an existing risk is likely to accelerate or worsen or the building work is likely to result in a new risk.
[28] Paragraph (c) goes on to require provision for adequate protection of "the land or the building work or that other property concerned". In ordinary parlance, "or" is used disjunctively, expressing alternatives, and "and" is used conjunctively, expressing addition, with the connected items being treated as being cumulative. But in some usages in context "or" may create a multiple rather than an alternative obligation and there are numerous examples in the books where the word has been construed as "and" in order to reflect the intent evident in the context in which the word is used - see for example the discussion in Federal Steam Nagivation Co Ltd v Department of Trade and Industry [1974] 2 All ER 97 (House of Lords) and for a recent decision of this court, Power New Zealand Ltd v Mercury Energy Ltd and Commerce Commission [1997] 2 NZLR 669.
[29] While using the ordinarily disjunctive word "or" in the context of subs (1), para (c) necessarily requires that the land as well as the building work be protected. It is badly drafted, but to conclude otherwise would negate the whole thrust of paras (a) and (b). Similarly, provision for both protection (para (c)) and restoration (para (d)) may be required in some cases.
[30] That construction of s36(1)(c) is reinforced by consideration of paras (a) and (b) of subs (2). Those paragraphs parallel and follow exactly paras (b) and (a) respectively of subs (1). The building work itself will not accelerate, worsen or result in the listed hazards (subs (2)(a)) but the land on which the building work is to take place is at that risk. Under the statutory scheme subs (2)(b) applies because s36(1)(c) is not satisfied in respect of the land.
[31] That analysis reflects an understandable legislative policy that where a building is to be constructed or major alterations to a building are to be made, it is not reasonable to issue a building consent as of course unless adequate provision is made to protect the land concerned as well as the building work itself from the listed hazards. And if that requirement cannot be satisfied, subs (2) goes on to provide the flexibility to allow for the issue of a building consent if the set requirements of paras (a), (b) and (c) of subs (2) are met with notice to the world then being given through the entry on the title and with consequential exemption from civil liability of the territorial authority under s36(4). Significantly, that exemption protects the territorial authority against being charged with issuing a building consent in the knowledge that either the building or the land was or was likely to be subject to damage (or inundation) arising from the listed hazards.
[32] It follows, too, that I can see no basis in the scheme and purpose of the legislation for reading down the natural language of s36(2) and importing as a gloss the limitation that s36(2) can be invoked only where the territorial authority has granted a waiver or modification of the building consent. Again, the statutory language does not allow the qualification suggested by Mr Oliver, that it is only those hazards that affect the integrity of the building as a building that are relevant when it comes to considering the protection of the land. And the existence of other statutory provisions for giving public notice of such risks affecting particular land is no justification for failing to give effect to the clear terms of s36.
[33] We should add that in determining whether the statutory risk threshold under subs (1)(a) and subs (2)(b) has been reached, and what will be adequate provision to protect the land under subs (1), given, too, that adequate provision for protection does not require the elimination of any possibility in all conceivable circumstances of inundation or other relevant hazards, a territorial authority can be expected to take a common-sense approach. Whether the risk is at the level and frequency to justify the expense and other implications of making adequate provision to protect the land and, if not, to require a warning notice, which is a blot on the title and may have significant insurance implications, will always require a sensible assessment involving considerations of fact and degree.
Bund
[34] Jurisdictionally, and as Mr Kirkpatrick accepted, Mr Logan as the owner of other property affected by a decision of the Council to construct a bund on neighbouring property which could affect the drainage of 72 Melrose Road, was entitled to apply to the Authority for a determination (s16(d) and s17(1)). It was not unreasonable for Mr Logan to do so in a single application also relating to the building consent issued by the Council rather than making two separate applications for determinations.
[35] But the difficulty for the Authority on this branch of the case is that while the proposed bund may otherwise constitute a building within the opening words of s3, it is excluded under para (a), being a system operated by a network utility operator. In terms of the definition of network utility operator in s2, the Council as the operator of a stormwater drainage system, which includes the drain in question, is in respect of the proposed bund outside the definition of building. We note, however, that the proposed bund has been granted resource consent by the Auckland Regional Council as part of the Oakley Creek Management Plan.
Solicitors
Simpson Grierson, Auckland, for
respondent
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