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Street v Fountaine [2018] NZCA 55 (19 March 2018)

Last Updated: 9 April 2018

IN THE COURT OF APPEAL OF NEW ZEALAND
BETWEEN
 Appellants
AND
 First Respondent ASHBY DOWNS LIMITED Second Respondent ANZ BANK NEW ZEALAND LIMITED Third Respondent
BETWEEN
 Appellants
AND
 Respondents
Hearing:

8 ,9 and 10 August 2017 (further submissions 3, 10 October and 4 December 2017)
Court:
French, Winkelmann and Gilbert JJ
Counsel:

D J Goddard QC and R K Macdonald for Appellants
T G Stapleton QC for Respondents
Judgment:

19 March 2018 at 10.30 am


JUDGMENT OF THE COURT

  1. The appeal against the substantive judgment of Clifford J is allowed.
  2. The Street Trustees are entitled to orders as set out in [154]–[155].
  1. The costs orders made in the High Court are quashed.
  1. Costs in the High Court are fixed on the basis that the Street Trustees are entitled to costs calculated on a band 2B basis, together with disbursements to be fixed by the Registrar of the High Court.
  2. The respondents must pay the appellants costs for a complex appeal on a band A basis and usual disbursements. We certify for two counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Winkelmann J)

Table of Contents
Para No.
Introduction
The issues on appeal
Factual background
The creation of the scheme
Easement over Maungahuia
The upgrade of the scheme in 19931994
Tensions
High Court judgment
First issue: did the Judge err in finding there was no enforceable agreement to grant easements in relation to scheme infrastructure located on Waikaramu and The Downs?
Legal principles: easements
Did Mr John Fountaine agree to grant an easement over Waikaramu in 1971–1972 and, if so, is that agreement enforceable?
(a) Documentary record
(b) Conduct of the parties
(c) Oral evidence
(d) Conclusion on whether Mr John Fountaine agreed to grant an easement over Waikaramu in 1971
(e) Was there sufficient consideration?
(f) Were there sufficient acts of part performance?
(g) Did Mr John Fountaine have sufficient interest in the land to grant an easement?
Did Mr James Ashby agree to grant an easement over The Downs in 1971–1972?
(a) The basis of the claim
(b) Analysis
Were easements agreed to in respect of the scheme as modified in 1993–1994?
(a) The basis of the claim
(b) Analysis
Second issue: did the Judge err in finding that the respondents were not estopped from denying the existence of such easements?
Relevant principles
The issues
Third issue: if there is an equitable easement or easements, what relief if any is appropriate to give effect to these easements?
Submissions
Orders
Fourth issue: if there is no equitable easement, what other equitable rights and obligations exist in relation to scheme infrastructure, and what relief is appropriate?
Costs appeal
Result


Introduction

[1] In the early 1970s a group of farmers in the Wairarapa worked together to establish a scheme to provide stock water to farms in the immediate vicinity of the Ahiaruhe stream. The scheme collected water from the Ahiaruhe stream and carried it through a series of pipes to the points of use. Although ownership of many of the farms within the scheme has changed since that time, the scheme remains in operation today. It supplies, or has the capacity to supply, stock water to farm properties, including properties owned by the appellants, the trustees of the Street Trust (the Street Trustees).
[2] The original point of collection for the scheme was on land known as Aranui but in 1993–1994 it was moved to a farm, Waikaramu, as part of an upgrade to improve performance. Waikaramu is owned by Mr Rex Fountaine, the first respondent, although at the time the scheme was created it was occupied by his father, Mr John Fountaine, who had been farming Waikaramu since 1949.
[3] Water pipes for the scheme are located on The Downs, a farm owned by the second respondent, Ashby Downs Ltd. In the 1970s Mr James Ashby ran the farming operations on The Downs. Today, his sons Michael and Richard work together to farm that land.
[4] At issue in this proceeding is whether there are easements supporting the presence of the scheme infrastructure on Waikaramu and The Downs. Tensions between the users of the scheme have flared from time to time, but began to significantly escalate in the last decade, with a dispute ultimately developing as to the basis on which the scheme’s infrastructure was on Waikaramu and, to a lesser extent, The Downs. Was it pursuant to an easement, or some other arrangement, characterised by the respondents as a gentlemen’s agreement terminable at pleasure?
[5] The Street Trust is Mr Christopher Street’s family trust. It brought these proceedings seeking declarations as to the legal basis on which the scheme operates and consequential orders. The Street Trustees’ primary contention is that Waikaramu and The Downs are each subject to unregistered (equitable) easements in respect of the scheme infrastructure in favour of Trust land, and the Trust therefore has a right of access to the land for the purposes of maintenance and repair. These easements are claimed to arise from either agreement or estoppel.
[6] The respondents say that the infrastructure is on their farms at their pleasure pursuant to a gentlemen’s agreement. They say there are no easements, legal or equitable, and no other legally enforceable rights protecting the scheme users’ ability to operate the scheme across their land.
[7] In a judgment dated 3 October 2016, Clifford J dismissed the Street Trustees’ claim for an easement in respect of Waikaramu.[1] The Street Trustees now appeal that decision on the grounds that the Judge was wrong in a number of his factual and legal findings. It also says that he failed to address and resolve all the pleaded issues before him. He did not address or resolve the Street Trustees’ claim to an easement in respect of The Downs, and he did not address the argument that, if there was no easement (which was his finding), the Court should nevertheless grant some other form of equitable relief.
[8] The Street Trustees produced a schedule of factual errors allegedly made by the Judge. The respondents say any errors by the Judge were inconsequential. We are satisfied that most of the factual matters included within that schedule were of no consequence to the Judge’s reasoning or decision, and we do not therefore address them. Where we consider that any factual matter in the schedule is material, the allegation of factual error is addressed in the course of the judgment.
[9] Mr Rex Fountaine also seeks to support the judgment on other grounds. He says the Judge could have rejected the claim to an easement on Waikaramu on the additional ground that the farm was held under a licence in the 1970s and so the Fountaine family did not have the ability to grant an easement.

The issues on appeal

[10] The easements claimed in respect of both The Downs and Waikaramu relate to the scheme as modified in 1993–1994. The Street Trustees’ case is that the scheme modifications in 1993 and 1994 entailed an oral agreement to modify the existing equitable easement, introducing new infrastructure in the place of old but not altering the legal nature of the arrangements. The respondents accept that the 1993–1994 scheme was a modification of the 1970s scheme but, on their case, both involved a gentlemen’s agreement and not an agreement to grant an easement.
[11] It is therefore common ground that before deciding the issue of what was agreed in 1993–1994, if anything, we must first address the nature of the initial arrangements for the scheme in the 1970s.
[12] The issues for determination on this appeal are as follows:
[13] The parties each also appeal against awards of costs made in the High Court.[2] Because of the view we take on the principal appeal, we do not need to address the costs appeals in any detail.

Factual background

The creation of the scheme

[14] The Ahiaruhe stream rises from the Aranui spring on land called Aranui. It then flows across several other farms, including Waikaramu, until it joins the Ruamahanga river.
[15] By the early 1970s, a number of water pumping pipeline storage systems were in place to extract and distribute water from the stream to nearby farming properties. In 1971 Mr Burns, who controlled Aranui Land Co Ltd (the owner of Aranui) proposed a scheme to take water from the stream to irrigate farms outside the Ahiaruhe watershed.[3] These proposed users were referred to in the course of this litigation as upstream owners or users, and the scheme that was eventually installed to service them was called the upper scheme. We adopt those descriptors.
[16] Several farmers with land downstream from Mr Burns’ property objected to this proposal. They were concerned that allowing those who did not have the stream flowing across their land to draw from it would deplete the stream, leaving insufficient water flow for stock purposes and perhaps for the operation of the existing pumps. Those objecting to the development of the upper scheme included Mr John Fountaine (Waikaramu), Mr James Ashby (The Downs) and other land owners, the Riddells. At the time, the Riddells were owners of a large farm which bordered both sides of a road located within the scheme — Millars Road.
[17] Notes of meetings in early-to-mid 1971 record the downstream farmers’ concerns and their intention to object to the scheme unless their current and future requirements for water for their stock could be fully safeguarded. The downstream farmers’ position was that the upstream owners should instead seek their water supply direct from the Ruamahanga river.
[18] These objections spurred Mr Burns to seek legal advice on the downstream farmers’ ability to object, advice which he passed on to them. The advice he obtained was that under the recently enacted Water and Soil Conservation Act 1967, it was unclear whether the downstream owners could take any action to prevent the upper scheme from proceeding. Nevertheless, the lawyer advising Mr Burns tended to the view that any person, and not just riparian owners, could now take whatever quantities of water they reasonably needed for stock and domestic purposes and that “lower riparian owners do not now have any rights if their supply of water is diminished”.
[19] It was probably after this advice was distributed that those involved in this issue agreed to seek the assistance of the Wairarapa Catchment Board to resolve their differences. The affected parties met with representatives of the Wairarapa Catchment Board — in particular, the Chief Engineer, Mr Mahoney. The precise number and dates of these meetings is unclear.
[20] Mr Ross Heveldt, a farm advisory officer with the Ministry of Agriculture and Fisheries, designed a new water scheme for downstream owners. He produced a Water Supply Feasibility Report, outlining the scheme which could provide stock water supply to three farms — The Downs, and the McGrath and Riddell farms, all farms in the area. His plan allowed for the addition to the scheme of a farm owned by other landowners in the area, the Nelligans.
[21] The scheme — we refer to it as the lower scheme — as originally conceived involved:
[22] Following this report, agreement was reached that the downstream and the upstream farmers would take stock water from the same source on the Ahiaruhe stream to service the newly proposed lower scheme alongside the upper scheme. If taken from the source in this way, use could be managed to ensure fair and sufficient supply for the upper and lower scheme users and downstream farmers. The lower scheme users would not be left with the dregs after upstream users had drawn off their water and the Catchment Board could arbitrate rate of flow to ensure the stream did not run dry. The upper scheme would be a pumped scheme and the lower scheme would rely on gravity for water flow. This agreement was recorded in a letter from the Catchment Board to all those involved in December 1971. The precise meaning of that December letter is one of the critical issues in this litigation.
[23] We pause to note that there were several aspects to the lower scheme. There was an arrangement of some sort to allow pipes to be laid on the land to enable the scheme to operate. The nature of this arrangement is at the heart of this litigation. There was also an agreement as to the rate at which water could be drawn and, separately, an agreement as to the mechanism for setting those rates in the future.[4] There may have been an agreement that the water drawn was to be used for stock purposes only, although that issue was not the subject of argument before us and is not an issue we need resolve.
[24] The lower scheme was installed over the next year or so, and was completed by the end of 1973. Those involved in installing and paying for the scheme were Messrs Ashby, McGrath, Riddell, Nelligan and other owners, the Andrews. The Fountaines did not contribute to the cost of the scheme, as they did not draw water from it. The lower scheme as installed differed from Mr Heveldt’s original plan to the following extent. Point B, the point at which two pipes branched off, was shifted further onto The Downs. Secondly, whereas the original plan was that the pipe between Point A and Point B would be laid on Aranui, as constructed, the pipe between Points A and B deviated briefly onto Waikaramu. This deviation was necessary to enable the gravity-fed lower scheme to work. We attach a plan of the scheme as built in 1973 [Appendix A].
[25] The upper scheme pipeline and the lower scheme pipeline over Aranui and Waikaramu were surveyed and the combined survey plan was registered as Deposited Plan 35275. The Plan was entitled “Plan of Pipeline Easement”. It is common ground that whilst easements were registered in respect of the upper scheme, none were registered against the titles of either The Downs or Waikaramu in respect of the lower scheme.

Easement over Maungahuia

[26] In 1982 the Riddell land was sold to the MacPhail Trust. Over time, Mr Doug MacPhail subdivided the land, creating a farm on the western side of Millars Road called Maungahuia. The five blocks of land on the eastern side were later bought by the Street Trustees in three separate purchases (in 1998, 2006 and 2009).
[27] In 1989 Mr MacPhail granted an easement over Maungahuia for water pipes, seemingly to ensure continued access to water for the parcels of land on the eastern side of the road, the land now owned by the Street Trustees. The Fountaine family acquired Maungahuia from Mr MacPhail in 1997, subject to the registered easement over the property in favour of the land on the eastern side of the road.[5]

The upgrade of the scheme in 1993–1994

[28] It is clear from the evidence that Mr James Ashby was a meticulous record keeper. He recorded in his diary the work done on the water scheme by downstream owners, as well as accounts paid in respect of the scheme. His diary notes reflect that from early on there were performance issues with the scheme, with the rate of flow a persistent issue. Although various remedial steps were taken, none seemed to solve that issue. In 1993–1994 the scheme was upgraded to address these concerns. The upgrade resulted in the construction of a new concrete weir in the streambed of Waikaramu, which, as we understand it, was the new point of collection for the lower scheme with new pipelines to a new concrete settling/header tank also on Waikaramu. From there, two new separate long-distance pipelines were constructed — one (50 mm) to The Downs and one (40 mm) to Maungahuia. It is this second pipeline, the 40-mm pipeline, which provides stock water to the Millars Road part of the lower scheme. We attach a plan of the scheme as modified in 1993–1994 [Appendix B].
[29] There is no written record of any agreement to modify the 1971 arrangements to provide for the upgrade. The upgrade involved substantial work and expense but again, as in 1971, no easements were registered.

Tensions

[30] Mr MacPhail managed the 40-mm pipeline (Millars Road) part of the scheme. Tensions flared from time to time between Mr MacPhail and the Fountaines about access to Waikaramu to service the scheme. Access was along a narrow single lane farm track with poor visibility and the Fountaines had safety concerns about people coming onto the property without adequate notice.
[31] The Ashbys and Fountaines were also concerned about a major upgrade of the scheme undertaken by the Street Trustees in 2008. The Ashbys and Fountaines believed they should have been consulted about these changes to the scheme. Although the upgrade was to the part of the scheme located on Trust land, the Ashbys and Fountaines believed it had potential to affect the stream and the performance of the scheme for other users. As such, they believed the upgrade should have been discussed with them.
[32] Mr MacPhail retired from management of the scheme in 2008, and at that point Mr Christopher Street became more actively involved. Tensions escalated, again focusing on issues of access. Mr Street bridled at the notion of having to seek permission to access the infrastructure on Waikaramu, access he regarded as an ancillary right attaching to an easement which supported the presence of that infrastructure.

High Court judgment

[33] Clifford J summarised the case before him for the Street Trustees as being a claim to equitable easements over Aranui, Waikaramu and The Downs.[6] As the Street Trustees point out, the Judge was mistaken in this because the Street Trustees neither asserted rights nor sought relief over Aranui. They did however claim an easement over The Downs, a claim the Judge failed to address, instead focusing upon the claim to an easement over Waikaramu.
[34] The Judge identified a letter from the Catchment Board of December 1971 and the background to it as critical to the Street Trustees’ claim in respect of Waikaramu.[7] It is convenient to set that letter out in full:

This letter is to record the mutual agreement reached between the upstream and downstream owners in the Ahiaruhe Valley with regard to water use for stock purposes.

The original difference arose when the upstream owners planned to take water from a spring on Mr Burns’ property and pump it outside the catchment to other properties by easement for stock and domestic use, and the downstream owners were concerned that this action would jeopardise their existing supply derived from the stream bed. Both parties felt they had legal rights to their contentions, but rather than have these argued at law the upstream owners agreed to assist without prejudice the downstream owners to establish a communal supply to their properties and thus ensure a compromise that provided for all.

A committee was set up to finalise details, and it has now been agreed that the upstream owners will contribute $900 towards a communal supply this to take the form of supplying and laying a 2” pipe from an agreed point in the stream on Mr Burns property to an agreed point on Messrs Ashby’s and Burn’s boundary. The pipe is to be buried a minimum of 18” in the ground and a simple inlet constructed to tap the stream and provide a full pipe flow.

Messrs Fountaine and Burns have agreed to an easement over their land for the pipe, and the survey for the easement shall be financed or partly financed by the upstream owners to the extent their costs of establishing the pipe falls short of $900.

The Board shall be the arbiter as to the reasonableness of the costs incurred in installing the supply and the easement shall be instituted by the upstream owners.

The easement shall be finally legalised by and to the benefit of the users who shall also be responsible for maintenance in a manner to be prescribed.

The Board shall also arbitrate as to reasonable water withdrawals by all parties in the future bearing in mind the total surface flows available to ensure an equitable allocation.

In turn, the downstream owners will allow the listed upstream owners to draw up to 30.1 gallons per minute from the spring referred to.

The Board will act as general arbiter in all cases of lack of agreement, and its decision will be binding on all parties.

The following are the parties to and areas contemplated as being served with water in terms of this agreement.

UPSTREAM OWNERS:
Property
Area Served





Aranui
1,200
acres

Tokoroa
1,300
acres

Mr Ellis
200
acres

Messrs Snell Bros.
450
acres

Mr Paton
450
acres






3,600
acres
DOWNSTREAM OWNERS:


Mr Ashby
730
acres

Mr McGrath
80
acres

Mr Riddell
840
acres

Mr Nelligan
370
acres

Mr Andrews
180
acres






2,200
acres




This mutual agreement was made to cover the above parties and areas and the mentioned draw-offs but otherwise without prejudice to any group or individual’s rights and does not purport to be an interpretation of the law with respect to water rights.

Yours faithfully,

P.G. MAHONEY,

CHIEF ENGINEER.

[35] The Judge addressed whether this and other matters relied upon by the Street Trustees evidenced an agreement on the part of Mr John Fountaine to an easement. In respect of the documentary record he concluded:

[68] First, the Catchment Board 24 December 1971 letter purports, on its face, to be the record of an agreement between the Upper and Lower Owners. Other than the reference to Mr Fountaine having agreed to grant an easement, Mr Fountaine himself is not referred to in the letter, and the letter writer does not purport to write to, or on behalf of, Mr Fountaine. Moreover, the letter writer had no authority to do so.

[69] The other, very brief, references in the documentary record to easements add little if anything. The most they establish is the possibility that there may have been discussions – whether involving Mr Fountaine or not is unclear – amongst the Lower Owners about an easement. If those discussions did occur, that was more likely than not when, in the context of the Mr Burns’ agreement the Lower Owners were to have an easement over Aranui to Point B, it was realised that a brief diversion onto Waikaramu was desirable.

[70] But that is far from establishing, on the basis of that documentary evidence, that Mr Fountaine had ever agreed to that proposal.

[71] Nor is there any evidence available as to what was meant by those various documentary references at the time.

[36] He said the letter was written against the background that the proposed scheme described in the letter was not on, and nor did it service, Waikaramu.[8] The Judge noted, however, that installing the scheme would involve use of a Waikaramu fourwheel-drive access road, as that was the most convenient way to access both where the Ahiaruhe stream rose and Point B, from which the separate pipelines would go to the two branches of the lower scheme.[9] Similarly, he said maintenance of the lower scheme, particularly prior to the development of relevant parts of Aranui and The Downs, could most conveniently be undertaken using that access road.[10]
[37] On one reading of the judgment, the Judge proceeded on the basis that it was only as the lower scheme was being installed that it became apparent it could not be completed in terms of the feasibility plan and that to achieve an adequate flow to Point B, the pipeline had to deviate into Waikaramu. It is fair to say however that the judgment is not clear on this factual issue.
[38] The Judge then discussed the oral evidence he had heard. He noted that none of the individuals involved in the discussions in 1971 survived.[11] Nevertheless he heard evidence from Mr Rex and Mrs Shona Fountaine, and the Ashby brothers Richard and Michael (the next generation on from Mr John Fountaine and Mr James Ashby) of their understanding of the agreement. Mr Rex and Mrs Fountaine’s evidence was that Mr John Fountaine would never have agreed to give an easement to the users of the lower scheme.[12] Rather, he had agreed that, with appropriate notice, the lower owners could get to the lower scheme via his land, and in particular, the Waikaramu access track.[13] Later, when the scheme was constructed, it is argued that he entered into a gentlemen’s agreement to allow a short section of pipe to be buried on Waikaramu.[14]
[39] The Judge gave weight to this evidence. He concluded in respect of it:

[77] I accept that, on that matter and indeed more generally, the Fountaines and the Ashbys were honest, that is, credible, witnesses. By my assessment, they were not fabricating or embellishing the narrative they provided, including as regards the rights of the users of the Lower Scheme. That is not to say, of course, that their narrative was at all points fully accurate or complete. They themselves recognised that, with the passage of time, details could have been lost or misinterpreted. But that recognition did not lead me to conclude that they were in any material way unreliable witnesses. Their understanding, based on what their parents had told them and based on their own participation as farmers, was that the Lower Owners accessed Waikaramu for the purposes of the Lower Scheme on notice to Mr Fountaine, with his permission and subject to appropriate terms and conditions. Given that, when the Lower Scheme was first established, only a short section of the pipe was in fact on Waikaramu, and the great majority of it was on The Downs and Maungahuia, it can easily be understood why a group of local owners did not see easements as being necessary.

[40] The Judge saw the dealings around the 1993–1994 modifications to be supportive of the view that there was no agreement in 1971 to grant easements. He said:

[78] The circumstances surrounding the modification of the Lower Scheme in 1993-1994 are of considerable evidential significance in this context. At that time, by far the greater part of the infrastructure for the Lower Scheme, as it served both The Downs, Maungahuia and the land on the eastern side of Millars Road, was – for the first time – located on Waikaramu. There is no evidence of an easement over Waikaramu being discussed, let alone agreed at that time. If the original arrangement had been that Mr Fountaine Senior agreed to grant an easement over Waikaramu, then the incentive for the Lower Owners to pursue that arrangement, and register that easement, was considerably greater at that time. That the Lower Scheme was modified, without that happening, in my view points to the absence of any agreement from Mr Fountaine Senior to grant any such easement, whether in 1971 or in 1993-1994.

[41] He therefore concluded that the Street Trustees had not established the existence of an agreement to grant an easement in respect of Waikaramu.[15]
[42] The Judge identified further obstacles to the claim — an absence of valuable consideration and insufficient acts of part performance to render any agreement affecting the land enforceable.[16]

First issue: did the Judge err in finding there was no enforceable agreement to grant easements in relation to scheme infrastructure located on Waikaramu and The Downs?

Legal principles: easements

[43] The issue between the parties is the nature of the relationship created by the parties’ dealings in the 1970s, and then again in 1993–1994. As we come to, Mr Stapleton QC, for the respondents, resisted ascribing the label of licence to those arrangements. He preferred to describe them as a “gentlemen’s agreement” terminable at pleasure. However, in argument before us Mr Stapleton accepted this agreement did create legal rights for lower scheme users to have the infrastructure on the Ashbys’ and Fountaines’ land, and legal rights for lower scheme users to go on the land with notice to service the scheme. These rights, he conceded, continued until they were terminated. As to the circumstances giving rise to a right to terminate, he adopted the evidence of Mr Rex Fountaine that they could terminate “if we felt at risk”.
[44] The critical issue is whether the dealings in the 1970s, and then again in the 1990s, created only personal rights which we consider are properly described as a licence (although the language does not matter) or rather, as the Street Trustees contend, equitable easements which passed with the land?
[45] The relevant principles governing the creation of an easement are not in dispute. A registered easement is a legal easement. An equitable easement creates an interest in land which is registerable (but not registered), but can nevertheless be protected by a caveat. Successors in title obtain the benefit of, and are subject to the burden of, an easement subject to the usual rules as to indefeasibility of title if the easement is not protected by the registration of a caveat. No issue as to indefeasibility of title has been pleaded or argued in this proceeding.
[46] An easement is an orthodox mechanism for protecting significant interests in perpetuity. The Land Transfer Act 1952 and Land Transfer Regulations 2002 provide default terms that apply to registered easements unless modified by agreement between the parties.[17] They expressly address default terms for the classic (in the sense of the most common) easements for the passing of services over land such as electricity, gas and water pipes, or for rights of way.
[47] In contrast, a licence does not grant any interest in the land. The benefit of a licence does not pass to successors in title of the licence, nor bind successors in title to the land. A licence is a personal, contractual arrangement which provides permission to a party to do an act on land that would otherwise be a trespass.[18] A mere licence is not registerable and cannot be protected by caveats. It is therefore usually terminated on change of ownership of the relevant land. There are no standard or default terms that apply to a licence so the terms will be those agreed by the parties. Licences are revocable as the parties agree but otherwise at will. For all these reasons, licences are not generally suitable for multi-party arrangements as they create difficulties when there is a change of ownership in either the licensee or the licensor. Easements are the usual mechanism employed where there are to be multiple parties to one arrangement, including initial and subsequent owners of land.
[48] As regards the essential characteristics of an easement, the following requirements must be met:[19]
[49] The easements alleged to exist easily meet all of the essential requirements of an easement: there are independently-owned dominant and servient tenements and the nature of each easement is one capable of supporting a grant. The easements in question are for common services (water pipes and infrastructure) to be present on the servient land (Waikaramu and The Downs) for the benefit of the dominant land (the land which benefits from the lower scheme).
[50] The most common way in which an equitable easement is created is by agreement to grant that easement. Three elements are essential:[24]
[51] The critical issues in this case are, first, whether there were agreements to grant the alleged easements, and secondly, whether those agreements were supported by the necessary consideration and sufficiently evidenced by acts of part performance. In order to be successful, the Street Trustees must show part performance as it is not suggested that there is a sufficient written record signed by either Mr John Fountaine or Mr James Ashby (on behalf of Ashby Downs Ltd) granting the easement for the purposes of s 2 of the Contracts Enforcement Act.
[52] There are some useful principles that can be gleaned from case law that assist in determining whether an arrangement is a licence or an easement:

Did Mr John Fountaine agree to grant an easement over Waikaramu in 1971–1972 and, if so, is that agreement enforceable?

[53] We are invited to revisit factual findings made by Clifford J on appeal. As is well established, those exercising general rights of appeal are entitled to judgment in accordance with the independent opinion of the appellate court, even where the opinion is an assessment of fact and degree.[28] However, in determining whether the judgment was wrong, the appellate court will take into account any particular advantages enjoyed by the trial court, especially where assessments of credibility and reliability are involved.[29] At least in respect of the creation of the lower scheme, we are as well placed as the Judge to take a view on the evidence, as none of those who were party to the discussions gave evidence. Just precisely what was agreed at that time is best gleaned from the documentary record, which in our view provides strong evidence that Mr James Ashby and Mr John Fountaine agreed to grant easements over their land as necessary to support the lower scheme as it was installed in 1971–1973.
[54] As we come to, we have concluded that the Judge made several errors in his interpretation of the evidence, which led him to erroneously conclude that there was no agreement on the part of Mr John Fountaine to grant easements at the time of the creation of the lower scheme in 1971. The Street Trustees’ are also correct that he did not address their claim in respect of The Downs and so we must do that afresh.
(a) Documentary record
[55] We think it a safe conclusion that Mr John Fountaine attended at least one of the early meetings at which the downstream owners’ concerns about the proposed upper scheme were discussed. He was one of the objectors, whose concerns were noted in one of Mr James Ashby’s diary entries. Mr James Ashby also noted Mr John Fountaine’s apology for one meeting, suggesting on-going involvement in the issues.
[56] We are also satisfied Mr John Fountaine was party to discussions at which the plan was agreed to create the upper and lower schemes and in this we differ from Clifford J. We have reached this view for a number of reasons.
[57] First, as a matter of common sense, as one of the initial objectors, it is very likely that Mr John Fountaine would be involved in discussions to resolve the issues that had arisen.
[58] Secondly, in late 1971 the Chief Engineer of the Wairarapa Catchment Board, Mr Mahoney, provided a report to the Board to explain:

... discussions which have been held with the owners who wish to develop the scheme and the down stream owners who consider the scheme would interfere with their existing supplies from the stream.

[59] The report, as summarised in the minutes of the Board meeting, described discussions between the upstream owners and the downstream owners “who at present relied on the water for stock purposes”. The minutes then record Mr John Fountaine’s agreement to an easement over his land for the pipe for the scheme. The simple point to be made is that it is improbable the Chief Engineer would record agreement to an easement unless he had grounds for believing that Mr John Fountaine had agreed to that.
[60] We are further reinforced in our view of the evidence by the letter sent in December 1971 by the Chief Engineer, written on behalf of the Catchment Board to proposed upper and lower scheme users, recording the “mutual agreement” reached with regard to the schemes. This is the letter we earlier set out in full at [34]. We repeat the critical portion here for ease of reference:

A committee was set up to finalise details and it has now been agreed that the upstream owners will contribute $900 towards a communal supply this to take the form of supplying and laying a 2̎ pipe from an agreed point in the stream on Mr Burns property to an agreed point on Messrs Ashby’s and Burn’s boundary. The pipe is to be buried to a minimum of 18̎ in the ground and a simple inlet constructed to tap the stream and provide a full pipe flow.

Messrs Fountaine and Burns have agreed to an easement over their land for the pipe, and the survey for the easement shall be financed or partly financed by the upstream owners to the extent their costs of establishing the pipe falls short of $900.

The Board shall be the arbiter as to the reasonableness of the costs incurred in installing the supply and the easement shall be instituted by the upstream owners.

The easement shall be finally legalised by and to the benefit of the users who shall also be responsible for maintenance in a manner to be prescribed.

The Board shall also arbitrate as to reasonable water withdrawals in the future bearing in mind the total surface flows available to ensure an equitable allocation ...

[61] The letter concluded with a list of those who would draw stock water from the scheme.
[62] The report to the Board and the December letter provide strong evidence that Mr John Fountaine was not only party to the discussions and agreements but also that, in the course of those discussions, he agreed to grant an easement over Waikaramu to support the operation of the lower scheme.
[63] In resisting this conclusion the respondents say several things about the letter. They say first that there was no evidence it was received by Mr John Fountaine, so it does not evidence his agreement. Secondly, a related point, the letter records agreement between scheme users. It is not a record of an agreement to grant an easement over Waikaramu. Third, Mr Stapleton notes the letter refers only to an “easement”, not easements, but Mr John Fountaine and Mr Burns did not own any land jointly. Mr Burns did however jointly own land with a Mr Short, and it was that land over which an easement was granted for the upper scheme. Mr Stapleton therefore argues, as we understand it, that reference to Mr Fountaine was a mistake.
[64] While it is true that there is no direct evidence the letter was sent to Mr John Fountaine, the inability to locate an addressed copy is easily explained by the time that has passed since the letter was sent and received. It is very likely that Mr John Fountaine was sent a copy, as part of the group who were concerned regarding the proposed upper scheme. After all, the letter recorded an agreement which would resolve the issues between upstream and downstream owners, including Mr John Fountaine’s consent to an easement. It is plain from the covering letter that the Chief Engineer was keen to check that he had accurately captured this resolution. To do that, he had to send the letter to all affected by the agreed resolution. That being the case, we are satisfied he would have sent a copy of the letter to all of the downstream owners, including Mr John Fountaine.
[65] In the unlikely event Mr John Fountaine did not receive a copy of the letter, it nevertheless provides good evidence of what had been agreed. The Chief Engineer invited corrections to the letter. It is common ground the letter was sent to Mr James Ashby, that he and Mr John Fountaine were friends, and that Mr James Ashby was a person punctilious in detail. Given this context, if the letter misreported the existence of Mr John Fountaine’s agreement to an easement it can be safely assumed that Mr James Ashby would have raised that. The only recorded response from Mr James Ashby suggests rather to the contrary. In his copy, there is a handwritten notation which says:

(1) Agreement to be signed that no further easements given with regards to water especially by upstream;

(2) Explain the water available and take off.
[66] This also answers Mr Stapleton’s third point, that the Chief Engineer meant to record Mr Short’s agreement to an easement, not Mr Fountaine’s. If such a mistake had been made, it is highly likely Mr Ashby would have detected that error and raised it with the Chief Engineer. There is no evidence he did.
[67] We also see nothing in the respondents’ second point — that Mr John Fountaine was not party to the agreement recorded in the letter as it just affected those who would be drawing water from the scheme and whose names were listed in the agreement as such. This seems to be the point the Judge was making also when he said the letter set out an agreement between the upper and lower owners.[30] The flaw in this argument is that the letter is not proffered as evidence of a written agreement to grant an easement. Rather the Street Trustees say it is circumstantial evidence which tends to prove that an oral agreement to grant an easement was reached. We accept that it does tend to prove this.
[68] Clifford J said it was not possible to tell from that letter what the easements referred to were for.[31] We do not agree. The letter refers to Mr John Fountaine’s and Mr Burns’ agreement to the grant of easements over their land for the pipes, which in context makes perfectly clear the nature of the proposed grant.
[69] As we noted earlier, the Judge also seems to have proceeded on the basis that at the time of the December 1971 Catchment Board letter, it was only intended to use Waikaramu for gaining access to the pipes laid on Aranui, because the original plan for the scheme did not entail the laying of pipes on Waikaramu.[32] Although the judgment is not entirely clear on this point, it is also a view of the facts urged upon us by Mr Stapleton. We are not persuaded that the evidence supports such a view.
[70] In context, the easement over Waikaramu for “the pipe”[33] can only mean an easement for the pipe carrying the water from Point A to Point B on the lower scheme. It cannot sensibly be read as referring to a right of entry to obtain physical access to Aranui and The Downs. There is evidence that by the time of the December 1971 Catchment Board letter, it had been agreed by all affected that the pipe for the lower scheme would pass through Waikaramu. This included Mr John Fountaine. While the original report prepared by Mr Heveldt did not show the pipe going through Waikaramu, the need for the pipe to deviate probably emerged around October 1971. It seems from the diary of Mr James Ashby that an initial survey of the pipeline from Point A to Point B was undertaken by Mr Fred Phillips, who Mr Michael Ashby described in evidence as a surveyor with the Department of Agriculture and Fisheries. That survey would, we infer, have revealed that the originally proposed path had insufficient fall for the gravity-fed scheme to work.
[71] There is further corroboration that an easement was contemplated in correspondence following on from the December letter. Apparently responding to the Chief Engineer’s request that the interested parties identify any respect in which the letter misreported the broader agreement, the solicitor for one of the upstream owners wrote to challenge the proposition that the upstream owners would be responsible for instituting the easement for the downstream owners. The solicitor said that whether the downstream owners desired to register the easement was of no concern to any of the upstream owners and continued:

If any easement is desired the Downstream Owners were advised to instruct the same surveyor to carry out the necessary surveys in conjunction with the surveys he will be undertaking for the Upstream Owners. In this way costs can be minimised.

[72] Following receipt of this letter clarifying the upstream owners’ position, the Chief Engineer sent a further letter to the affected parties. In the follow-up letter, the Catchment Board noted the challenge to the notion that the upstream owners would be responsible for instituting the easement for the downstream owners and continued:

The intent of the letter was to ensure that the survey for easement on both projects were co-ordinated in the interests of economy. Rather than suggest that the upstream owners institute the easement the same objective can be reached by suggesting that both parties combine in the matter of survey for easement. In this direction as the upstream owners will probably be ready first the initial approach for a co-operative effort should come from them.

[73] This recommendation was apparently acted upon. A survey of the affected land was completed, showing pipes for both the upper and lower schemes including pipes on The Downs and Waikaramu. It seems to us that the only reason to complete the survey plan in respect of the lower scheme was the registration of the easement. Mr Stapleton was not able to suggest a plausible alternative explanation.
[74] The completion of the survey plan has other evidential significance. It is improbable that Mr John Fountaine did not know the survey was being completed. Surveyors had to enter onto his land to survey the pipe. The surveyors would surely have sought Mr Fountaine’s consent to do that.
[75] We come to the last piece of documentary material supporting the Street Trustees’ claim in respect of Waikaramu. Although it is chronologically last, it is perhaps the most significant. It puts beyond doubt that there was an understanding common amongst the downstream farmers, that there would be an easement through Waikaramu. In a handwritten note which the parties estimate to have been completed in mid to late 1973, Mr James Ashby lists under the heading future or further accounts: “Easements to be done through Aranui and Fountaine”.
(b) Conduct of the parties
[76] The respondents point to the failure to register an easement for the lower scheme as evidence that no easement was intended. The chronology we have set out does raise the question as to why no legal easement was registered in respect of the lower scheme. However, a reading of the contemporaneous documents offers a ready explanation. From the beginning, there were concerns as to the cost of the survey and registration of the easement, with the original letter from the Wairarapa Catchment Board suggesting that the cost be met to the extent it could from the cost contribution by the upstream owners. There are also multiple references in Mr James Ashby’s diary notes to the way in which the costs were being broken down and shared. Mr James Ashby wrote in one note, again undated, but obviously after the installation of the scheme:

My position is that after a considerable expenditure I have far less water than my own original scheme and wasted a good part of a week checking mine and attempting to get water to all users. This also applies to others.

[77] It seems likely that an easement was not registered then either because of a desire to save costs or because of a failure of organisation. As to the latter, the upper scheme users had declined to take responsibility for that registration. In their absence, it was unclear who would take responsibility.
[78] Another factor we identify as supporting a finding that Mr John Fountaine agreed to an easement for the scheme pipe is the common-sense point that the nature and value of the extensive infrastructure involved in the scheme was such that it can readily be inferred the parties intended the arrangements to create long-term rights. This was a community water scheme. It is unlikely that the farmers would have proceeded without long term security for the scheme’s operation, or an ability to pass on the benefit of the scheme when and if they came to sell the land.
[79] The farmers devoted a great deal of time to the installation, with Mr James Ashby assiduously recording the time spent by each farmer. As to money expended, Mr James Ashby includes various calculations in his notes. It is hard to glean the exact expense. In 1971 Mr Heveldt estimated a cost of $3,200. Figures of up to $9,000 are noted elsewhere in what appears to be Mr James Ashby’s handwriting, itemising the cost of the scheme as installed.
[80] Wherever the “as built” cost sat on that range, the amounts were large in the context of the 1970s. It was money expended by the lower scheme users to create a scheme that would benefit their land. It is a fair inference we think that the rights to use the infrastructure installed were, from inception, intended to pass with the land. They were not seen as personal to the parties to the agreement but rather rights which affected the use, enjoyment and inevitably the value of the land. It is apparent that an aspect of the opposition to the proposed upper scheme was the impact that damage to the stream would have on the value of the land. In one of Mr James Ashby’s records of discussions, he writes:

All of us, and especially Riddell, McGrath and Ashby paid a premium for the good water supply when buying our properties. With water being pumped to outside properties our requirements could be in jeopardy.

[81] Over the course of the dispute and these proceedings, the respondents have offered different versions of the arrangements. In a memorandum filed before the High Court hearing dated 9 March 2015, the respondents characterised the rights of lower scheme users as a personal property interest in the pipes and a right to receive stock water through them, but denied that the Street Trustees have any real property rights in relation to Waikaramu or The Downs. But in the same memorandum the respondents accepted that successors in title to the original landowners are entitled to use the scheme and receive stock water from it. It is hard to reconcile these two positions.
[82] For the respondents, Mr Stapleton attempted to meet this difficulty at the hearing by postulating that each time land changed hands there was a need to enter into a new agreement with the new owner, and that this reflected the “gentlemen’s agreement” that regulated it. But it is unlikely that the original landowners set up a scheme which would involve such legal complexity in its administration. In an arrangement affecting multiple users it is implausible that the parties intended that each time there was a change of ownership there would have to be what was essentially a novation of the licence. It is safe to infer from the arrangements that were put in place that they wanted a secure and inexpensive scheme that met their concerns as to continuity of stock water supply and preserved the value of their farms. We also note that subsequent conduct is inconsistent with the existence of a gentlemen’s agreement, as there is no evidence that there was ever any discussion of rights and obligations associated with the scheme when land changed hands.
(c) Evidence in the High Court
[83] When construing the nature of the arrangements reached regarding the lower scheme, the Judge placed most weight on the evidence of Mr Rex Fountaine (the son of Mr John Fountaine); Mr Rex Fountaine’s wife Shona; and Messrs Richard and Michael Ashby, the sons of Mr James Ashby.[34] Mr John Fountaine died in 1988 and Mr Rex Fountaine has been the sole proprietor of Waikaramu since 1992.
[84] Mr Rex Fountaine’s evidence was that he was working with his father on the farm in 1971, but from 1972 to 1975 he worked on other farms in the Carterton area and in the South Island, returning to Waikaramu in 1975. He accepted he was not involved in discussions with the other downstream farmers regarding the settingup of the scheme but nevertheless was permitted to give evidence as to whether his father granted an easement over Waikaramu in 1971, including the following:

Waikaramu owners were not aware of the details worked out between the parties and did not receive the letters and documents written by the Wairarapa Catchment Board in December 1971 and January 1972 ...

John Fountaine was against an easement on his property. I know this because I can remember him warning me at the time. You would never want to give the neighbours water scheme an easement because you do not know what may happen in the future.

[85] Mrs Shona Fountaine gave evidence about the arrangements although she did not move to Waikaramu until 1986. She claimed that Mr John Fountaine had told her about the scheme and “certainly mentioned there was no easement on Waikaramu”.
[86] Mr Richard Ashby worked on The Downs in 1971 prior to leaving to go to university. Although he accepted he was not involved in discussions regarding the installation of the scheme, he gave evidence about their nature including the following passage:

It was a Gentlemen’s Agreement which had been in place since the start of the Lower Scheme. A Gentlemen’s Agreement is an informal and legally nonbinding agreement between two or more parties. That accurately describes the arrangements.

The Lower Scheme users adhered to the Gentlemen’s Agreement in place from the start of the scheme, especially respecting Waikaramu. We knew we were not entitled to water easements, especially over Waikaramu, for the Lower Scheme.

[87] Mr Michael Ashby did not claim to have been working on The Downs at the time of the installation of the lower scheme or have been party to the arrangements regarding the installation of pipes on The Downs and Waikaramu, yet he gave evidence about what Mr John Fountaine had agreed to:

John Fountaine allowed the 50mm pipeline to be placed on Waikaramu at his pleasure; he specifically did not allow an easement over Waikaramu. All downstream farmers agreed to respect John Fountaine’s property rights and to seek permission for access before going on to Waikaramu to service the Lower Scheme headworks and the 50 mm pipeline.

[88] In part this evidence is unsubstantiated assertion. To the extent it is a report of what Mr John Fountaine said to each of the witnesses, it is properly characterised as hearsay. To be admissible it must pass the gateway provisions in the Evidence Act 2006 for the admission of hearsay evidence.[35] It is true that Mr John Fountaine was unavailable to give evidence, because he had died. But we are not satisfied that this evidence was sufficiently reliable to cross the reliability threshold for admissibility. It relates to events very far in the past. It is inevitable that memories will fade, and shift over time. The evidence is general and undetailed and, in our assessment, conflicts with the contemporaneous documentary record. Although the evidence was admitted at the hearing, we are satisfied that no weight can safely be placed upon it.
(d) Conclusion on whether Mr John Fountaine agreed to grant an easement over Waikaramu in 1971
[89] As follows from the analysis we have set out, we are satisfied there is strong evidence to conclude that Mr John Fountaine agreed to grant rights, with all the characteristics of an easement, over Waikaramu for the pipe necessary to support the operation of the lower scheme. This is evidenced by the contemporaneous documentation. It is further evidenced by the arrangements actually put in place and implemented in the decades that followed, as the right to use the scheme passed from landowner to landowner, and as the new owners continued to go on to Waikaramu when maintenance of the infrastructure was required.
(e) Was there sufficient consideration?
[90] The Judge saw as fatal to the claim of an equitable easement that no consideration ever flowed to Mr John Fountaine, or the Fountaines, in exchange for a grant of water carriage and maintenance access rights.[36]
[91] But as Mr Goddard QC submits for the Street Trustees, it is not necessary to show that consideration benefits the promisor. It is sufficient if there is either detriment to the promisee or a benefit to the promisor.[37] Here it was enough that the promisees had provided consideration in the form of detriment to them. The agreement contemplated that the promisee downstream users would give up their rights of objection to the upper scheme. That was sufficient consideration. In any case, we also note in passing that Mr John Fountaine did in fact receive benefits under the agreement — these benefits flowed from the regulation of the use of the stream’s water which was acceptable to all parties.
(f) Were there sufficient acts of part performance?
[92] Tipping J addressed the requirements of a sufficient act of part performance in T A Dellaca Ltd v PDL Industries Ltd:[38]
  1. Was there a sufficient oral agreement such as would have been enforceable but for the [Contracts Enforcement] Act?
  2. Has there been part performance of that oral agreement by the doing of something which:

(a) clearly amounts to a step in the performance of a contractual obligation or the exercise of a contractual right under the oral contract; and

(b) when viewed independently of the oral contract was, on the probabilities, done on the footing that a contract relating to the land and such as that alleged was in existence.

  1. Do the circumstances in which that part performance took place make it unconscionable (fraudulent in equity) for the defendant to rely on the Act?
[93] The Judge also saw as fatal to the Trust’s claim the absence of a sufficient act of part performance by Mr John Fountaine.[39]
[94] The Judge said that what Mr John Fountaine and his successors in title have done in the years since 1971 was “consistent with their characterisation of an informal arrangement that was never intended to, nor did it, reflect a contract to grant a legal easement”.[40] Accordingly, there was insufficient evidence of clear steps taken in the performance of a contractual obligation or right under the alleged oral contract.
[95] But this finding overlooks the important point that the acts must be those of the party relying on the part performance.[41] This requirement arises from the nature of the doctrine as stated in Fleming v Beevers:[42]

It is clear that over the years two concepts have been said to underpin the doctrine of part performance. The first ... is that equity will not allow the Statute of Frauds itself to become an instrument of fraud. Thus, if there has been part performance, equity takes the view that the defendant is not charged upon the contract alone but also upon the equities arising from part performance. Therefore it is not the contract alone which is being enforced contrary to the statute but also the collateral equities which arise out of the contract. The other concept behind the doctrine of part performance is an important but subsidiary one. It concerns proof. The acts of part performance are treated for probative purposes as a satisfactory substitute for the statutory requirement of writing.

[96] In this case a number of steps were taken by the downstream users which amounted to steps taken in performance of a contract to grant an easement and the exercise of rights under that agreement. The downstream users abandoned their objections to the upper scheme. They installed the infrastructure and it seems likely that they paid for a survey to be undertaken of the placement of the pipes. These steps are more consistent with performance of an agreement to grant an easement rather than an agreement to grant a licence. As the Street Trustees submit, it is unlikely that such extensive arrangements would have been taken absent a permanent entitlement to place infrastructure on the land, and use and maintain it.
(g) Did Mr John Fountaine have sufficient interest in the land to grant an easement?
[97] The respondents filed a notice supporting the decision of Clifford J on an additional ground. In the High Court, Mr Stapleton argued that Mr John Fountaine could not grant an easement in respect of the land because he held it under a deferred purchase agreement and so, by virtue of the provisions of s 60 of the Land Act 1948, could not grant an easement over the land.
[98] In 1949 Mr John Fountaine leased the land from the Crown. In 1966 he entered into a Deferred Payment Licence Agreement in which the Crown agreed to sell the land to Mr John Fountaine but to accept deferred payment. Pending payment, Mr John Fountaine was granted an exclusive licence to occupy the land. This was an interest capable of registration, and which was registered, and able to be dealt with. Mr John Fountaine transferred 45 per cent of his ownership interest in the land to a family trust in 1975 and, in 1977, transferred 55 per cent to Mr Rex Fountaine. A fee simple title was issued in 1991 and acquired by Mr Rex Fountaine in 1992.
[99] Mr Stapleton argues that only the Crown, not Mr John Fountaine, had the power to grant an easement in the 1970s. He points to s 60(1) of the Land Act which provides “the [Land Settlement] Board may from time to time grant or reserve any right of way, or other easements over or under any Crown land”. Section 60(3) provides that “[a]ny grant or reservation of a right of way, or other easement under this section may be subject to such conditions, restrictions, and covenants as the Board determines”. It follows, says Mr Stapleton, that it was the Crown, and not Mr John Fountaine, with the power to grant an easement.
[100] The Judge characterised this as a technical argument he did not need to address.[43] We agree that it is a rather technical argument but given our different view of the facts, we address it. The argument can be shortly dealt with. Although styled as a deferred purchase payment licence, this was in reality an unconditional agreement for sale and purchase. As such, it conveyed the beneficial interest to Mr John Fountaine.[44] The Crown held the land on trust for him.[45] Mr John Fountaine was therefore competent to agree to grant an easement over his interest in the land. Section 60(3) does not, by its terms, affect that position.

Did Mr James Ashby agree to an easement over The Downs in 1971–1972?

(a) The basis of the claim
[101] This issue was not addressed by Clifford J in his judgment, an oversight on his part as the claim to an easement over The Downs for the lower scheme was pleaded in the statement of claim.
[102] Initially Mr Goddard put the Street Trustees case to us in respect of The Downs only on the basis that an easement arose by reason of an estoppel. Over the course of the three-day hearing that argument shifted to include an allegation that there was an agreement to grant an easement.
[103] We are satisfied the Street Trustees’ pleadings are sufficient to encompass the latter allegation. The pleading does no more than narrate the chronology of events which are said to support the claim to an easement over The Downs to give effect to the lower scheme.
[104] The respondents do not suffer any unfair prejudice by reason of allowing this argument to be advanced on appeal even though it was not advanced in the High Court. We say this because Clifford J did not address the claim to an easement over The Downs in the High Court. Further, the issue as to whether there is an agreement in force must be decided purely on the basis of the documentary record, as there is no party to the original arrangement available to give evidence. Mr Stapleton did not seek to argue that the respondents are prejudiced by the late emergence of this argument.
(b) Analysis
[105] The starting point to consideration of this claim is that there is no reference in the Wairarapa Catchment Board letter of December 1971 to the grant of an easement by Ashby Downs Ltd. If Mr James Ashby agreed to grant an easement for the pipes, why would Mr Burns and Mr John Fountaine be singled out for reference in this connection, but not Mr James Ashby? And why would there be reference in documents from that time to the need to register easements over Aranui and Waikaramu, but no reference to registration of an easement over The Downs? It seems to us the answer is as simple as this. Mr James Ashby was to be a participant of the lower scheme. Messrs Burns and Fountaine were not members of either the upper or lower scheme, and so their agreement to the presence of pipes justified express reference in the correspondence and the extra protection of registration.
[106] As discussed, what was agreed in that letter was in our view sufficient to amount to an agreement to grant an easement. The essential elements of an easement are present. The servient tenement was The Downs, over which the pipes would run. The dominant tenements were the other farms serviced by the lower scheme. The grant was a classic water carriage easement.
[107] We are satisfied that what was agreed to was an easement rather than a licence because:
[108] The survey of the upper and lower scheme recorded all the pipes in the schemes, including those passing over The Downs, suggesting that both schemes would be supported by easements. It would be illogical were it otherwise — that is, if the lower scheme operated pursuant to licences and the upper scheme operated pursuant to easements.
[109] For these reasons we are satisfied that Mr James Ashby, on behalf of the second respondent Ashby Downs Ltd, agreed to the grant of rights amounting to an easement to support the presence of scheme infrastructure on The Downs. Again, the promisees (other scheme users) had provided consideration, by giving up their rights of objection to the upper scheme. As to acts of part performance, they are the same acts we identify at [96] above.

Were easements agreed to in respect of the scheme as modified in 1993–1994?

(a) Basis of the claim
[110] The Judge’s finding that there was no agreement to grant an easement was built upon his finding that Mr John Fountaine did not agree to grant an easement for the lower scheme infrastructure at the time of its creation, a finding we have held to be in error. Because we have reached a different view to the Judge in respect of the 1970s lower scheme, it is necessary for us to look afresh at the evidence in connection with 1993–1994 as it is the scheme as modified the Street Trustees lay claim to.
[111] The evidential task in respect of the 1993–1994 upgrade is different because the respondents could and did call witnesses to the arrangements. Mr Rex Fountaine was the principal witness. He said that in 1993 the downstream users decided to modify and upgrade the lower scheme. The modifications consisted of a new weir on Waikaramu, a settling/header tank, and two new separate long-distance pipelines, one to The Downs and one to Maungahuia — the latter located principally on Waikaramu but briefly on The Downs.
[112] Mr Rex Fountaine viewed the modifications as a continuation of the 1970s lower scheme. Although he agreed to these improvements and modifications, his evidence was that he did not agree to grant anyone an easement over the land in respect of the water pipes and equipment. Rather he agreed under strict conditions that there would be no easement over Waikaramu, that the modifications and upgrades were not to interfere with his farming operation, that his permission would be needed for downstream users to come onto his land and that they would all abide by a gentlemen’s agreement.
[113] Under cross-examination Mr Rex Fountaine expanded upon the gentlemen’s agreement. His understanding of it was that if there was a dispute the scheme users would try and sort it out through mediation but, ultimately, if they could not resolve the dispute, he could ask for the removal of the pipes. As noted earlier, he said Waikaramu had a right to cancel the gentlemen’s agreement “if we felt at risk”.
[114] Both Michael and Richard Ashby worked on the lower scheme upgrade in 1993–1994. Mr Michael Ashby said that at the time of the upgrade it was:
[116] During the appeal hearing, Mr Stapleton conceded that the arrangements were not terminable at “pleasure” and that there had to be cause for termination. Nevertheless it is the witnesses’ description of the arrangements that is important for our assessment.

(b) Analysis

[117] The argument on appeal focused on Waikaramu in respect of this upgrade. However, the upgrade affected the placement of scheme infrastructure on The Downs and Waikaramu and we have therefore addressed issues in respect of both. We have concluded that the modifications and upgrade in 1993–1994 were a modification of the existing easement over Waikaramu and The Downs to support the operation of the lower scheme. The infrastructure continued to be present on Waikaramu and The Downs on the same basis as it had been previously — supported by an equitable easement. In reaching this view, we have rejected the evidence of Mr Rex Fountaine and the Ashby brothers that there was no easement supporting the post 1993–1994 infrastructure.
[118] Our reasons for reaching this view of the evidence are as follows.
[119] Mr Rex Fountaine’s and Mr Michael Ashby’s evidence on the arrangements in 1993–1994 is very general and undetailed — perhaps inevitably so when the events recounted occurred more than 20 years ago. It is not corroborated by any documentary record made at the time. The respondents point to a diary note made by Mr Michael Ashby that reads “we have to negotiate with an upstream farmer on placement of pipe and tank which could further complicate matters”. That does not assist. Clearly there would have to have been negotiations for a change to the scheme infrastructure, including its placement on Waikaramu. We attach more significance to the inconsistency between their evidence of a gentlemen’s agreement and other evidence less vulnerable to the vicissitudes of memory.
[120] Our starting point is that the upgrade was seen by all as a continuation of the existing arrangements, which by the time of the upgrade had been in place for 20 years. Those arrangements were to allow infrastructure to support a water scheme which served multiple parties, and which conferred rights that passed with title to new owners of the farms. The evidence of Mr Rex Fountaine and the Ashbys that the scheme was terminable “at pleasure” is out of step with these existing arrangements, yet both said it was a continuation of those arrangements.
[121] We also weigh evidence of an acknowledgment by Mr Michael Ashby that the benefits of the scheme passed with title. This is significant because it is evidence of his understanding before litigation began. In 2007 because of ongoing tension regarding the use of the scheme, the lawyer for Mr MacPhail wrote to the Fountaines setting out some assurances the users wished to give to the Fountaines. At that time the Street Trust had acquired some, but not all, of the properties owned on the northern side of Millars Road previously owned by Mr MacPhail and his interests. Mr MacPhail continued to manage the scheme for the Trust, himself and other users. Mr MacPhail undertook to give the Fountaines notice of maintenance work to be undertaken and that he would exercise care over the use of the farm track on Waikaramu. The letter concluded:

Doug [MacPhail] is mindful (as no doubt you are) that this scheme is often a very important source of stock water, especially during the summer months. Doug confirms the scheme is for stock water only but, in Doug’s case, also a little for his garden.

[122] The letter was signed by the other downstream owners but not the Ashbys. The Fountaines replied to the letter with their own letter of December 2008 in which they said they were disappointed the Ashbys had not been copied into the signed agreement. That oversight was addressed in 2009 and the Ashbys were invited to cosign the letter. Michael Ashby noted on his copy of that letter:

The right of Doug to use water on his garden does not pass to succeeding owners.

[123] The evidence that Mr Michael Ashby and Mr Rex Fountaine gave as to the arrangements being “at pleasure” is, we consider, inconsistent with the acknowledgment implicit in this note — that the right to use the scheme for stock water passed with title.
[124] As noted above the evidence of Mr Rex Fountaine was that permission was required before lower scheme users could come on the land in order to service the infrastructure. But there is no mention of a need for permission, only notice, in the correspondence between the parties in connection with access.
[125] We also take into account the common-sense point made earlier about the creation of the scheme. Again there was significant investment of time and money in the upgrade on the part of the lower scheme users. Mr Richard Ashby refers to having been involved to varying degrees with the planning, organisation and actual work on the upgrade. This was no small undertaking. The upgrade also was a critical part of a much larger scheme running across several farms. Without it, the rest of the lower scheme would not carry stock water.
[126] It is against this background that we have concluded it is unlikely the parties proceeded to modify the scheme on the basis that they give up the easement rights created by the original scheme (including the right to pass the benefit of the scheme to successors in title) and take in its place a licence terminable at the pleasure of the Ashbys and Fountaines.
[127] Clifford J was impressed with the evidence of the Fountaines and Ashbys.[46] He found them to be both credible and reliable witnesses, and we acknowledge that he had the benefit of seeing them give their evidence. The view we take of the evidence does not turn upon an assessment of these witnesses’ credibility. Where we differ from the Judge is in our assessment of their reliability, an assessment based upon our analysis of documents created at the time, and the conduct of the parties and these witnesses before the present litigation.
[128] In assessing this evidence we have weighed, as we are bound to, the impact on memory of the passage of time and the circumstances in which memories are recalled. Any memory is malleable and can be affected by the context in which it is called to mind. To the extent these witnesses were calling upon memories of past discussions, they are now shaped by the fact that there is conflict between the parties. This point was well made by Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd:[47]

[19] The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party’s lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.

[20] Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness’s memory has been “refreshed” by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness’s memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.

[129] We accept the Street Trustees’ submission then that this was a variation to an existing easement, and simply modified the location and nature of the infrastructure supported by the easement.
[130] We are satisfied that the variation was supported by valuable consideration. Each party agreed to modify existing rights and obligations in consideration of the amendment to the easement to reflect the new infrastructure.
[131] The variation was not of course recorded in writing, so it is necessary for the Street Trustees to point to a sufficient act of part performance. In respect of the 1993–1994 variation, the abandonment of the old infrastructure and the investment in the new is a sufficient act of part performance.
[132] We add as a postscript to this analysis that we would have concluded that the 1993–1994 arrangements were sufficient to found an equitable easement arising from an agreement, even had Mr Stapleton persuaded us that in 1971–1972 Mr John Fountaine was not competent to grant an easement. As we have explained, we do not accept as reliable the evidence of Mr Rex Fountaine and Mr Michael Ashby that there was discussion in 1993–1994 that no easement was granted, and that the scheme infrastructure was there at the pleasure of the owners. We are satisfied that the 1993–1994 upgrade of a long-standing water scheme, with the intent that the rights to use the scheme continue to pass with the land, is sufficient evidence of agreement as to all the required elements of an easement.

Second issue: did the Judge err in finding that the respondents were not estopped from denying the existence of such easements?

Relevant principles

[133] The Street Trustees advanced, as an alternative to their claim to an equitable easement founded on agreement, the claim that the respondents are estopped from denying the existence of equitable easements.
[134] The circumstances in which the doctrine of equitable estoppel will operate to create an equitable easement are not circumscribed at law.[48] The principles governing the law of equitable estoppel in New Zealand were restated by this Court in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd as follows:[49]

The issues

[135] There are difficulties with how this claim is pleaded for the Street Trustees. The pleading contains a series of factual allegations under the heading: “The Trust’s experience of and actions relying on the Millars Road Water Scheme.” There is no clear identification of what actions or representations are relied upon to give rise to an estoppel. There is also no clear pleading of the acts of reliance alleged, although it can perhaps be inferred from the pleading that it was the Trust’s expenditure of $130,000 on the scheme, and the 2009 purchase of land.
[136] The way in which the estoppel claim has been argued has also shifted through the course of this proceeding. At trial Mr Street gave evidence the Street Trustees acted reasonably in buying properties and investing in the upgrade of the scheme, in reliance upon the representation implicit in the pleaded actions — that title to the land the Street Trustees acquired carried with it the benefits of easements over Waikaramu and The Downs. But most of the evidence at trial focused on the conduct of Mr Street, the Fountaines and the Ashbys in the period following those purchases.
[137] In the High Court Clifford J summarised the Trustees’ case as follows:

[86] For the Street Trustees, the argument Mr Macdonald advanced as regards an easement by estoppel can, I think, fairly be summarised as follows:

(a) Mr Fountaine Senior and after him the Fountaines had, through their actions and acquiescence, created or encouraged a belief or expectation in the Lower Owners – if not Mr Street or the Street Trustees themselves, of water carriage and access rights as represented by the pleaded easement.

(b) That belief or expectation had been relied on by the Street Trustees, through Mr Street, when from 2006 onwards the Street Trustees acquired additional land on the eastern side of Millars Road and invested considerable sums of money in improving the water supply and distribution infrastructure on that land.

(c) Detriment, in effect the potential loss of the value and benefit of that investment, would be suffered if that belief or expectation was departed from.

(d) It would unconscionable for the Fountaines, and Ashby Downs, to depart from the belief or expectation as represented by their action in declining to grant the Street Trustees a registered easement in the terms pleaded.

(footnotes omitted)

[138] It was this claim that was rejected by the Judge.
[139] Before us Mr Goddard put the case for an estoppel on alternative bases. The first basis is this. Mr John Fountaine and Ashby Downs Ltd were estopped against the original landowners of the Trust land, the Riddells, from denying the existence of easements in the 1970s. Mr Rex Fountaine and Ashby Downs Ltd were further estopped as against Mr MacPhail from denying the existence of the modified 1993–1994 easements.
[140] It is difficult to extract this claim from the pleadings and evidence at trial. But in any case there is an obvious difficulty with this formulation. The Street Trustees did not own the Trust land in the 1970s or in 1993–1994, so how is it that they can claim the benefit of any estoppel?
[141] Mr Goddard argued that when the estoppels arose the notional beneficiary of them, the Riddells or Mr MacPhail, had recognisable equitable interests in both The Downs and Waikaramu. These were in the form of equitable easements which the respondents were estopped from denying. They could have obtained an order for specific performance to achieve registration of these easements. While the rights to assert an estoppel arising from the original scheme were the rights of the Riddells, Mr Goddard argues that since a registered easement would have passed with the title by operation of provisions of the Land Transfer Act, equity would follow the law in this. The effect of this, he contends, is that the equity the Riddells had because of the estoppel would have passed to Mr MacPhail, and then through him to the Street Trustees.
[142] The same argument applies in respect of the estoppel claimed in connection with the 1993–1994 modifications. Mr Goddard argues that since Mr MacPhail could have sought registration of an easement, the respondents were estopped from denying that equity flowed from Mr MacPhail to the Street Trustees.
[143] We acknowledge the strength of the argument that the elements of a claim for estoppel were made out in the early 1970s and again in 1993–1994. This flows from our observations above as to how the scheme operated and the extent of the owners’ investment in it originally as well as later in the 1993–1994 upgrade.
[144] However, the right of a third party (such as Mr MacPhail or the Street Trustees) to obtain an interest in land through the transfer (express or implied) of the right to an easement based on an estoppel, and before any court order has recognised that claim, involves consideration of complex legal issues in an area of unsettled law.[50] Mr Goddard did not assist us with legal argument on this point, beyond telling us during oral argument that it was one basis for the estoppel claim. Mr Stapleton also did not address the issue, which is not surprising given the late articulation by the Street Trustees of such a complex issue. We do not therefore take our consideration of this argument further, in light of the fact that the outcome of the argument is not dispositive of the appeal.
[145] The alternative basis for the estoppel claim is a direct claim by the Street Trustees. The Street Trustees argue that the respondents are estopped from denying the existence of easements on the following basis. The respondents created an expectation that there was an easement by allowing the continued operation of the scheme, through many changes of ownership. They did not suggest that the rights were personal to the original members of the scheme. The respondents recognised the rights of those original owners’ successors in title to use the scheme and to exercise the right ancillary to it to go on to Waikaramu to service the infrastructure, requiring only notice to meet safety concerns. The suggestion that there was a need for permission has only arisen in the context of this dispute.
[146] Although this is a more straightforward formulation of an estoppel claim, we have nevertheless concluded that we should not address it. We have found for the appellants in respect of their principal claim that equitable easements arise through agreement, and so the issue of an estoppel does not, strictly speaking, arise. Our reluctance to address the claim also springs in part from the way in which this claim has evolved through the course of the proceeding, and the absence of any proper pleaded basis for it.

Third issue: if there is an equitable easement or easements, what relief if any is appropriate to give effect to these easements?

Submissions

[147] In the statement of claim, the Street Trustees seek registered easements for a right to convey stock water to be effected under pt 5 of the Land Transfer Act, comprising the rights and powers implied under s 90D(1) of that Act, reg 10 of the Land Transfer Regulations and sch 4 to the Land Transfer Regulations. They seek these orders in respect of Waikaramu and The Downs. They also seek orders that the respondents complete any and all documents necessary for registration under the Land Transfer Act and take any other steps necessary for that purpose.
[148] In light of our conclusion that the Street Trustees are entitled to equitable easements in respect of Waikaramu and The Downs, we are satisfied that it is appropriate to grant the relief sought. Both parties were provided with the opportunity following the hearing to provide written submissions in respect of the terms of any easements, should the Court be minded to grant them. The background to this was that during the course of the hearing, the Court identified the possible need to add a condition to any easements requiring notice for access for the purposes of maintenance on the scheme infrastructure supported by the easement. This was in response to the health and safety concerns raised by Mr Rex Fountaine.
[149] Counsel for the respondents provided lengthy submissions repeating their various arguments as to why an easement should not be granted. We do not consider those parts of the submissions directed toward a re-argument of this issue, as it is beyond the grant of leave and was fully canvassed during the hearing.
[150] In addition, the respondents seek to add conditions or qualifications to any easements granted as follows:
[151] We are not satisfied that any of the conditions proposed on behalf of the respondents should be imposed upon the easements to be registered. As to the land purchased in 1998 while disconnected from the pipe, we have found that the parties had the benefit of an equitable easement arising by agreement. The fact the pipes were disconnected is irrelevant to the existence of these easements. Accordingly, the easement should be for the benefit of that land as well as the other parcels of land held by the Street Trustees.
[152] As to whether the easement should extend to more properties that are entitled to the benefit of the scheme, via either the 40-mm or 50-mm pipelines, and not just the Street Trustees’ properties, that relief was not sought by the respondents during the hearing in the High Court nor before this Court. Most of the parties who would be affected by those orders are not before the Court. Accordingly, such a condition cannot be imposed.
[153] Finally, we address the lengthy and restrictive terms proposed by the respondents, which are intended to regulate the use to which the stock water may be put and the rate of flow. We do not consider these are matters that can or should be regulated through the terms imposed on the grant of an easement. Even were it appropriate to include such conditions in an easement (we do not decide whether it is) the original agreement was for the Catchment Board to regulate and arbitrate rates of flow over time. The passage of time has meant that Board has fallen by the way. The entity which had the flow rate setting function no longer exists. The parties may need to find another body and mechanism to set the level at which stock water may be taken, but an easement is not the means to settle this issue, or even to establish such an entity.

Orders

[154] Accordingly, we are satisfied that the Street Trustees are entitled to the orders they seek, as set out in [147] modified as the Street Trustees now propose, to require that notice be given of an intention to enter upon the land to access the scheme infrastructure.
[155] Accordingly, the additional terms of easements to give effect to that modification are as follows:
[156] We are satisfied that these conditions are appropriate. They draw upon interim relief granted at a much earlier stage of these proceedings in response to an application for access to the 40-mm pipeline on Waikaramu.

Fourth issue: if there is no equitable easement, what other equitable rights and obligations exist in relation to scheme infrastructure, and what relief is appropriate?

[157] We do not propose to address this issue. It would be artificial to do in light of our factual findings. We record, however, the respondents’ argument that the Street Trustees could not pursue this issue on appeal because it was not sought as alternative relief in its statement of claim. We also record that had we been required to address this alternative relied upon, we would have done so as we are satisfied it was sufficiently pleaded in the High Court.[52]

Costs appeal

[158] The costs orders made in the High Court were the subject of an appeal by the Street Trustees and a cross-appeal by the respondents. Because we have allowed the principal appeal, it follows that costs in the High Court should be reassessed and it is not necessary to address the costs appeals.
[159] It was agreed between the parties that costs in the High Court should be fixed in this Court because Clifford J no longer sits in the High Court. For the Street Trustees Mr Goddard seeks that costs in the High Court be fixed on a band 2B basis. We do not understand Mr Stapleton to oppose that.[53] Accordingly, we fix costs and disbursements in the High Court to be calculated on a 2B basis.
[160] In relation to costs in this Court, we are satisfied that the respondents should pay the Street Trustees costs for a complex appeal on a band A basis and usual disbursements. We certify for two counsel.

Result

[161] The appeal against the substantive judgment of Clifford J is allowed.
[162] The Street Trustees are entitled to orders as set out in paragraphs [154]–[155] above.
[163] The costs orders made in the High Court are quashed.
[164] Costs in the High Court are fixed on the basis that the Street Trustees are entitled to costs calculated on a band 2B basis, together with disbursements to be fixed by the Registrar of the High Court.
[165] The respondents must pay the appellants costs for a complex appeal on a band A basis and usual disbursements. We certify for two counsel.





Solicitors:
R K Macdonald, Lower Hutt for Appellants
Nowland Gordon & Associates, Wellington for Respondents



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[1] Street v Fountaine [2016] NZHC 2343 [HC judgment].

[2] Street v Fountaine [2016] NZHC 2670 [Costs judgment].

[3] Namely farms which did not have the Ahiaruhe stream passing through them.

[4] It was agreed that the Board would arbitrate as to reasonable levels for drawing water by all parties, should issues arise in the future.

[5] Maungahuia was acquired by the trustees of the Maungahuia Fountaine Trust.

[6] HC judgment, above n 1, at [4].

[7] At [23].

[8] At [22].

[9] At [22].

[10] At [22].

[11] At [72].

[12] At [74].

[13] At [74].

[14] At [74].

[15] At [79].

[16] See [80]–[82].

[17] See Land Transfer Act 1952, s 90D(1); and Land Transfer Regulations 2002, reg 10 and sch 4.

[18] See DW McMorland and others Hinde McMorland & Sim Land Law in New Zealand (loose-leaf ed, LexisNexis) at [18.001].

[19] Re Ellenborough Park [1955] EWCA Civ 4; [1956] Ch 131, [1955] 3 WLR 892 (CA) at 900; Attorney-General v Holland [2007] NZHC 498; (2007) 5 NZ ConvC 194,480 (HC).

[20] See Woodman v Pwllbach Colliery Co Ltd (1914) 111 LT 169 (CA) at 172; and McMorland and others, above n 18, at [16.003].

[21] However, this common law requirement is now subject to s 291 of the Property Law Act 2007, which permits easements “in gross”.

[22] Bolton v Bolton (1879) 11 Ch D 968; Metropolitan Railway Co v Fowler [1892] 1 QB 165 (CA) at 171.

[23] See Re Ellenborough Park, above n 19, at 140; and McMorland and others, above n 18, at [16.006].

[24] McMorland and others, above n 18, at [16.035].

[25] See for example Motor Holdings (Air Services) Ltd v Bryers (1985) 2 NZCPR 307 (HC) at 313.

[26] See McDonald v Peddle [1923] NZGazLawRp 26; [1923] NZLR 987 (SC) at 990–991.

[27] Hart v Mitchell [2006] NZHC 1169; (2006) 7 NZCPR 588 (HC) at [41].

[28] Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4]–[5].

[29] Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [31].

[30] HC judgment, above n 1, at [68].

[31] At [71].

[32] At [23].

[33] As referred to in the Wairarapa Catchment Board letter of December 1971.

[34] See HC judgment, above n 1, at [77].

[35] See Evidence Act 2006, ss 17 and 18.

[36] HC judgment, above n 1, at [81].

[37] HG Beale (ed) Chitty on Contracts (32rd ed, Sweet & Maxwell, London, 2015) vol 1 at [4–004].

[38] T A Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109.

[39] HC judgment, above n 1, at [80].

[40] HC judgment, above n 1, at [80].

[41] Mahoe Buildings Ltd v Fair Investments Ltd [1994] 1 NZLR 281 (CA) at 287.

[42] Fleming v Beevers [1994] 1 NZLR 385 (CA) at 393.

[43] HC judgment, above n 1, at [84].

[44] Firth Concrete Industries Ltd v Duncan [1973] 1 NZLR 188 (SC) at 191–193; and DW McMorland Sale of Land (3rd ed, Cathcart Trust, Auckland, 2011) at 411–412.

[45] Lysaght v Edwards (1876) 2 Ch D 499.

[46] HC judgment, above n 1, at [77].

[47] Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm).

[48] See DW McMorland and others, above n 18, at [16.035] and [18.007].

[49] Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567 at [44].

[50] For a discussion of the issue see Ben McFarlane The Law of Proprietary Estoppel (Oxford University Press, Oxford, 2014) at [8.65]–[8.68].

[51] WN47C/453.

[52] We also note that rule 5.31 of the High Court Rules 2016 provides the High Court can grant any other relief to which the plaintiff is entitled even if it is not pleaded.

[53] The respondents’ costs appeal was brought on the basis that costs should be calculated on a category 3 basis, rather than category 2, and that increased costs by way of an uplift were appropriate.

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