Walshe v Macrae no.2 [2012] NZHC 3054 (16 November 2012)

Last Updated: 4 December 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-404-008259 [2012] NZHC 3054

BETWEEN ANTHONY PATRICK WALSHE Plaintiff

AND ROSS DONALD MACRAE AND LYNETTE GWYNETH JOY COLLINS Defendants

AND LESLEY ANNE BERTRAM-SMITH First Counter-Claim Defendant

AND DOUGLAS SEYMOUR ALDERSLADE, RAYMOND JOHN BEECH AND CHRISTINE BEECH

Second Counter-Claim Defendants

AND RICHARD HAMMOND AITKEN, ANGELA RUTH AITKEN, BRIAN HAMMOND AITKEN AND ROBERT JAMES AITKEN

Third Counter-Claim Defendants

AND AUCKLAND COUNCIL

Fourth Counter-Claim Defendant

Hearing: On the papers

Counsel: G C Jenkin for Plaintiff

N R Campbell for Defendants

Judgment: 16 November 2012

_{JUDGMENT (No 2) OF KEANE J}

This judgment was delivered by on 16 November 2012 at 12.30pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Bruce Dell Law, Auckland for Plaintiff

McVeagh Fleming, Auckland for Defendants

ANTHONY PATRICK WALSHE V ROSS DONALD MACRAE AND LYNETTE GWYNETH JOY COLLINS HC AK CIV 2009-404-008259 [16 November 2012]

[1] In my decision, dated 28 February 2012, I held that Mr and Mrs Macrae were entitled to the benefit of their existing right of way over the land of Anthony Walshe in Church Bay, Waiheke Island, only to service the dwelling on one of the two lots into which they had subdivided their land, even though they had succeeded in having that easement registered against both their ensuing titles.

[2] I granted, in principle, the Macraes' consequent application to modify their easement to benefit both their titles, solely on the basis that I was satisfied that Mr Walshe would not be 'substantially injured'. I held that he was entitled to compensation. Before entering judgment formally I invited submissions on three issues, apart from the question of costs.

[3] To establish finally Mr Walshe's right to be compensated for the increase in value of one of the Macraes' two lots, lot one, I asked whether, if at all, they had a right of vehicle access to that lot along the foreshore of Te Huruhi Bay from Blackpool Beach, some 600 metres away. Secondly, I asked whether and to what extent Mr Walshe was entitled to be compensated, quite distinctly, for cost and inconvenience; a right, I said, that had been held to extend beyond any ordinary award of costs, including indemnity costs. Thirdly, I asked when the Macraes should pay to Mr Walshe the compensation and costs to which he is entitled and should seal the right of way.

[4] As to that last issue, I wished to know what date to fix to assure Mr Walshe of payment and completed sealing. Should that, I asked, be the date the modifying order took effect, ratifying the existing state of the Macraes' titles, or should it be linked, for instance, to when the Macraes sold one or both of their properties? A related issue was to what standard the driveway was to be sealed and how that was to be assured and paid for.

[5] Since my decision the Macraes have, consistently with the terms of the interim injunction still in place, sold their other lot, lot two, with the benefit of the existing easement. Their near neighbour, Ms Smith, who once owned Mr Walshe's land and from whom the Macraes originally obtained their easement, has since sold her remaining adjacent land. Those sale prices, I considered, might be relevant to the

compensation to which Mr Walshe was entitled on account of any loss of value of his own land or any increase in value of lot one. I asked that the valuer whose evidence I accepted, Matthew Taylor, give a further affidavit.

[6] I have, as well, submissions as to costs. Mr Walshe seeks a scale award heightened by 75 per cent to apply to the entire proceeding, including the interim injunction phase, as to which he already has a scale award. To achieve a completely heightened award, he seeks to have that initial award set aside. As well as resisting such an award, the Macraes seek an offsetting award. Finally, I set out indicatively the orders in which this decision crystallises.

Value of lot one

[7] Mr Taylor valued the lot to which the Macraes retain title, lot one, on the basis that it was landlocked, in the sense that, absent their claimed and disputed extended easement, the Macraes only had access along the Te Huruhi Bay foreshore from Blackpool Beach, a distance of some 600 metres away, or across the foreshore from the sea.

[8] In that landlocked state Mr Taylor valued lot one on two bases. If the Macraes enjoyed only a right of foot access, he considered, lot one would have a value of $1,250,000. If they enjoyed a right of vehicle access its value would stand

$250,000 higher. The effect of a modifying order extending the existing easement to lot one, he said, would be to increase its value to $1,900,000; an increase in the range $400,000 - $650,000. It was his opinion, which I accepted, that Mr Walshe be awarded half that increase, whatever it was.

[9] Whether the Macraes have a right of vehicle access involves two issues that stand independently of each other. The first is whether, after the Macraes purchased their land in 1981 in a landlocked state, they acquired over the ensuing years prescriptively a right of vehicle access along the foreshore from Blackpool.

[10] That is to be assessed under the common law but depends also on in whom the foreshore was vested and on the effect of the statutory regimes that have come

successively into play since. If, for instance, in 1981 the foreshore was vested in the Crown, s 172(1) of the Land Act 1948 would then have precluded any prescriptive right arising. But there is a question whether the Crown did own the foreshore before

1991.1 If the Crown only acquired title in 1991, the bar under the Land Act 1948

would not have applied.2 In 2004, however, claims to prescriptive interests in the foreshore became barred, certainly for the future. The question is whether that bar extended to prescriptive interests already apparently accrued.3

[11] The second issue is whether in 2004 the Macraes, in common with other members of the public, obtained a right of access along the foreshore from Blackpool Beach that effectively gave them vehicle access to lot one.4 Also whether in 2008, when the Auckland City Council approved the Macraes' subdivision, it assured them that right under its related bylaw, in allowing them vehicle access to Te Huruhi Bay from lot one across the esplanade strip it then reserved along their foreshore boundary.5

Prescriptive easement

[12] In 1981, under the common law, unmodified by statute, there was no public right to pass along or across the foreshore 'except in the exercise of rights of navigation or fishery, or in respect of a lawfully dedicated right of way from one place to another over the foreshore'.6 However, the Macraes could then have obtained a right of vehicle access along the foreshore prescriptively, as well as by

_{express grant.}7

1 Foreshore and Seabed Endowment Revesting Act 1991, s 13(5).

2 Section 9A(1).

3 Foreshore and Seabed Act 2004, s 17(2), 24; Marine and Coastal Area (Takutai Moana) Act

2011, s 21(2), 24.

4 Foreshore and Seabed Act 2004, s 7(2), Marine and Coastal Area (Takutai Moana) Act 2004, s

26(1).

5 Foreshore and Seabed Act 2004, s 7(3), Marine and Coastal Area (Takutai Moana) Act 2004, s

26(2).

6 Halsbury's Laws of England (5th ed 2009) vol 100, Water and Waterways , para [46].

7 Laws of New Zealand, Water, para [20], [27].

[13] To have obtained such a prescriptive right 'a right by use or enjoyment during the time and in the manner fixed by the law',8 either by the fiction of a lost modern grant or under the Prescription Act 1832 (UK), until its repeal on 1 January 2008,9 the Macraes would have had to exercise it for at least 20 years in three definitive ways: (i) as fee simple owners against a fee simple owner; (ii) as of right, that is to say publicly and not secretly, and (iii) continuously.

[14] In assessing the Macraes' claim, I will assume in their favour that in 1981 the foreshore of Te Huruhi Bay was vested in the Waiheke County Council. (It might have been vested in the Auckland Harbour Board or the Crown.) I will assume that the decisive issue is whether they did continuously exercise vehicle access along the foreshore to the knowledge of the Council.

[15] That in itself is a high threshold. To surmount it the Macraes must be able to demonstrate that the Council so clearly knew and did not resist their use of the foreshore that it must have acquiesced in the right they assert. For, as Fry J said in Dalton v Angus & Co, in a decision upheld on appeal and since widely endorsed:10

I cannot imagine any case of acquiescence in which there is not shown to be in the servient owner: (i) a knowledge of the acts done; (ii) a power in him to stop the acts or to sue in respect of them; and (iii) an abstinence on his part in the exercise of such power.

[16] The evidence on this comes from the Macraes themselves. The only other witness able to speak to it, Ms Smith, who purchased her land above theirs in 1984 from Church Bay Farm Limited, from whom they themselves had purchased, confirmed that the then owners on the western side of Te Huruhi Bay obtained access either across the tracks of others or along the foreshore. She went no further and the Macraes' evidence is also general.

[17] The Macraes say, with justice, that this access issue did not arise on the pleadings and only emerged a week before the hearing when Mr Taylor's valuation

_{was served. But Mr Macrae, whose evidence is most in point, gave evidence beyond}

8 Hinde McMorland & Sim, Land Law in NZ (vol 2 1979) para 6.045.

9 Property Law Act 2007, s 365, s 367(3).

10 Dalton v Angus & Co (1881) 6 App Cas 740, at 773 - 774.

his brief at the hearing and could easily have said more on this subject too. That apart, I consider, he said enough to enable me to resolve this issue on the evidence as it is. His evidence, in main outline, was that the Council knew that access was being exercised along the foreshore as early as 1982 and must have acquiesced in that happening. He rested that on three bases.

[18] In 1980, Mr Macrae's evidence was, when he and his wife purchased their land from Church Bay Farm Limited, Church Bay was obliged to grant them access over its remaining land. To create that easement formally, they were advised by their solicitor in January 1981, they had to have their proposed right of way surveyed and then approved by the Waiheke County Council.

[19] In order to obtain that approval in 1982, Mr Macrae explained, he and his wife supplied to the Council a plan of their land, in relation to that still owned by Church Bay over which they wished to obtain access. The plan showed a formed roadway from the top of their property, where the point of access was to be, down to the foreshore, consistent, they say, with their existing right of vehicle access along the foreshore from Blackpool Beach.

[20] That without more, I consider, cannot be decisive. The purpose of the Macraes' plan was to obtain access by right of way over the land above theirs, not to confirm access along the foreshore. In that application, moreover, they were unsuccessful. On 17 September 1984, the Council declined approval. It considered the gradients involved too steep. The issue whether they had access along the foreshore never came into focus then or afterwards.

[21] The further purpose of the 1982 plan, Mr Macrae next said, was to obtain Council consent to build on their land the bach in which he and his wife first lived. The Council eventually approved that application, he said, and Council officers had to be aware that the only access then existing was along the foreshore. That must have been the way they themselves entered and left.

[22] That inference, once again, is by no means inevitable. It stands in contrast with Mr Macrae's further evidence that, though the Council declined the easement

proposed over Church Bay's land, he and his wife were able until 1992 to obtain access informally either over that land, or perhaps over that of others, until all or some of the land was subdivided and sold.

[23] That apart, Mr Macrae said, he and his wife never lived on their land continuously. There were lengthy times when they were away and it was in the charge of a ground keeper. Until 1995, he said, they lived overseas for extended periods. In 1994 they began to spend 40 per cent of their time at their bach on the west coast of the south island.

[24] By 1991 then, when the Crown took title to the foreshore, the Macraes cannot have acquired a right of vehicle access prescriptively, even if the Council until then been the owner. They had only owned their property for 10 years, half the term needed for a prescriptive interest, and they had not exercised their claimed right continuously, even if they had done so publicly. They could only have done so intermittently.

Three supervening statutory regimes

[25] In 1991 the foreshore became the subject of the first of three supervening statutory regimes, the Foreshore and Seabed Endowment Revesting Act 1991.

[26] The Crown took title on the landward side to 'such parts of the bed, shore, or banks of the sea ... as are covered and uncovered by the flow and ebb of the tide at mean spring tides'.11 It then unequivocally assumed title to the Macraes' only means of access along the foreshore. They had and have only ever been able to exercise access below the mean spring tide level, and never within the two hours before and after the peaks twice a day, eight hours altogether.

[27] It is therefore pertinent that the title the Crown then assumed was 'free from all subsequent trusts, reservations, restrictions, and conditions', and subject only to

_{'any leases, licences, permits, consents or other authorities granted by a Harbour}

11 Foreshore and Seabed Endowment Revesting Act 1991, s 2.

Board or a local authority' and related agreements in writing.12 Clearly the Macraes did not then enjoy any such formally conferred right.

[28] The Crown did take title free of the Land Act 1948.13 Section 172(1) of that Act, which barred prescriptive interests over Crown land, did not come into play. Notionally, then, the Macraes might have retained the ability to obtain a prescriptive title subject always to this. If in the ten years before the Act came into force the Council did have title, and apparently acquiesced, could the Macraes have claimed a prescriptive interest from the Crown if in the ensuing ten years the Crown also apparently acquiesced?

[29] Any such possibility became academic under the second supervening regime created by the Foreshore and Seabed Act 2004, the object of which was 'to preserve the public foreshore and seabed in perpetuity as the common heritage of all New Zealanders'.14

[30] The 2004 Act vested the foreshore and seabed in the Crown absolutely, subject to recognised and protected customary rights, but not subject to any fiduciary or related duty,15 though once again without the Land Act 1948 applying.16 It preserved existing rights under licences, consents or other authorisations granted under statute.17 Amongst the customary rights claims it also recognised were those relying on any 'rule, principle, or practice at common law or equity' or 'an obligation of any kind'.18 It excluded interests in the foreshore founded on adverse possession or prescriptive title, except in the case of group held territorial customary rights.19 It

_{granted rights of access, navigation and fishing.}20

12 Sections 5, 6(1)(a)(b).

13 Section 9A(1).

14 Foreshore and Seabed Act 2004, s 3.

15 Section 13(1) - (4).

16 Section 13(5).

17 Section 17(1).

18 Section 10(2)(a), (d).

19 Sections 24, 33.

20 Sections 7, 8, 9.

[31] Then in 2011 those features of the 2004 Act were translated to the third and present regime, the Marine and Coastal Area (Takutai Moana) Act, even though it had a definitively different purpose: to 'establish a durable scheme to ensure the protection of the legitimate interests of all New Zealanders in the marine and coastal area of New Zealand'.21

[32] The 2011 Act accords 'special status' to the common marine and coastal area, the landward boundary of which is, as under the 1991 and 2004 regimes, 'the line of mean high-water springs'.22 In contrast to the 2004 Act, it declares that this area does

not lie within the ownership of the Crown or any other person.23 It recognises,

however, 'any lawful use' that does not require authorisation. It recognises powers to permit and control uses of the foreshore by bylaw, and regional or district plan.24

Under s 21(2), it preserves any proprietary interest, as defined by s 21(1)(a), that

'immediately before the commencement of this Act, was in effect'. Any such interest

'continues, so far as it is lawful, to have effect according to its tenor'. Such interests include:

any interest under a lease, licence, permit, easement, or statutory authorisation (not being a resource consent) granted in respect of any land that, on the commencement of this Act, is located within the common marine and coastal area.

[33] Like the 2004 Act, s 24(1) excludes interests founded on adverse possession or prescriptive title and s 24(2) bars any claim for relief for loss or damage on that account. Section 24(1) says this:

Despite any enactment or rule of law, no person may claim an interest in any part of the marine and coastal area on the ground of adverse possession or prescriptive title.

[34] The issue then is whether s 24 only excludes future claims to prescriptive interests, relying on continuous public use of the foreshore beginning after the Act

_{came into force, or also bars claims as at and after that date which rely on the use of}

21 Marine and Coastal Area (Takutai Moana) Act 2011, s 4(1)(a).

22 Section 9, 11(1).

23 Section 11(2).

24 Section 11(5), (6).

the foreshore before that date. The Macraes contend that it can only be the former. The latter, they contend, would be illegitimately retrospective. I am unable to agree.

[35] Section 24(1) bars from the date of the Act any 'claim' to a prescriptive interest. A claim at that date and for many years after would have to rest on continuous use before that date; and that would have been so also, for that matter, under the 2004 Act. So under the 2011 Act, just as under the 2004 Act, the only right of access along the foreshore that the Macraes might now have can only be that accorded the public generally, if it applies.

[36] Under the title 'Rights of access', s 26 says this:

(1) Every individual has, without charge, the following rights:

(a) to enter, stay in or on, and leave the common marine and coastal area:

(b) to pass and repass in, on, over, and across the common marine and coastal area:

(c) to engage in recreational activities in or on the common marine and coastal area.

(2) The rights conferred by this section are subject to any authorised prohibitions or restrictions that are imposed under section 79, or by or under any other enactment.

(3) A prohibition or restriction of the kind described in subsection (2) may, subject to the enactment in which it is contained or by which it is authorised, apply to—

(a) any or all of the rights conferred by this section: (b) 1 or more ways of exercising those rights:

(c) 1 or more defined periods, or an indefinite period, or recurring periods of a stated kind:

(d) 1 or more specified areas.

(4) In this section, enactment includes bylaws, regional plans, and district plans.

[37] The limit on the s 26(1) rights of which s 26(2) first speaks, that under s 79, derives from any Wahi Tapu conditions imposed in any customary marine title, order

or agreement. Then there may be other limits imposed by other enactments which can include, very materially in this case, any bylaw.

[38] Subject to any such limits, the s 26(1) rights of access are, as the Macraes say, widely expressed. A related right to use vehicles, subject to any bylaw, regional plan or district plan, might well appear naturally implicit; and to accord with reality. Cars, trucks, tractors, motor bikes, sand yachts and the like all feature on our beaches where that is permitted locally. It would accord also with one of the defining purposes of the Act: to protect rights of access, navigation and fishing for their

intrinsic worth and public benefit.25

[39] Mr Walshe contends that s 26(1) is to be taken literally and that a right of vehicle access cannot be implied. Section 27, as he says, confers very specific rights of navigation and, he contends, if s 26(1) were to confer a right of vehicle access, it would have to be no less specific. Section 26, he contends, confers rights of foot access only.

[40] Sections 26 and 27 differ in four ways and the first contrast lies in whom these rights are conferred upon. Section 26(1) confers access rights on every

'individual', whereas s 27(1) confers navigation rights on every 'person'. By

'individual' s 26(1) may mean no more than every 'natural person', as was so under the 2004 Act.26 'Person' normally includes bodies corporate.27 If that is the only point of the distinction, it does not seem to me to touch on the present issue.

[41] The second contrast does touch on the essential point of difference. Section

26(1) does not define how access may be exercised in the common area, whereas s 27(1)(a) states that the right of navigation, to enter and pass and repass through the common area, is 'by ship'. 'Ship' is defined to include 'every description of boat or craft used in navigation whether or not it has any means of propulsion', and extends

_{to hovercraft.}28

25 Section 4(d), (e).

26 Foreshore and Seabed Act 2004, s 7(2).

27 Interpretation Act 1999, s 29.

28 Marine and Coastal Area (Takutai Moana) Act 2004, s 9; Maritime Transport Act 1994, s 2(1).

[42] Whether this matters depends on whether the words 'by ship' are prescriptive or descriptive. I think the latter. While the s 26 and 27 rights extend throughout the common area, rights of navigation, in contrast to rights of access, will more normally be exercised beyond the shoreline and to the outer boundary of the common area,

'the outer limits of the territorial sea'.29 To say that rights of navigation will be

exercised by ship, defined widely, is no more than natural and obvious.

[43] The third distinction is the essential point of difference. Apart from conferring the right, which s 26(1) also confers 'to enter, and pass and repass through' the common area by ship, s 27 contains the following specific rights:

(b) to temporarily anchor, moor, and ground within the marine and coastal area:

(c) to load and unload cargo, crew, equipment, and passengers within the marine and coastal area:

(d) to remain in a place within the marine and coastal area for a convenient time:

(e) to remain temporarily in a place within the marine and coastal area until wind or weather permits departure or until cargo has been obtained or repairs completed.

[44] This third difference is, I think, neutral. These rights of navigation go beyond any naturally impliable. They need to be expressed. It is the fourth distinction that I think counts most. Whereas s 26 confers rights expressly, without more, s 27(2) confirms that the rights conferred by s 27(1) 'include anything reasonably incidental to their exercise'. The absence of any equivalent in s 26 could suggest that s 26(1) means only what it says.

[45] The Minister of Conservation, however, by Gazette notice, has power to make bylaws 'for any specified part of the common marine and coastal area for ... the following purposes: prohibiting or regulating the use or parking of vehicles in a specified part of the common marine and coastal area', where satisfied they are

_{'necessary' for 'proper management' and that 'the objectives of the proposed bylaws}

29 Foreshore and Seabed Act 2004, s 9.

cannot be, or are not being, achieved under an existing enactment'.30 The Director General, or a delegate, can take charge within the common area of any 'vehicle' used in breach of any bylaw.31

[46] This bylaw making power is, I consider, consistent with only one inference. A power to make bylaws prohibiting vehicles outright might be consistent with a right of foot access only. But in this instance that power can only be exercised as to specified areas. It is not absolute. That and the power to 'regulate' vehicles within the common area must mean, I consider, that otherwise vehicles may be used there as of right.

Operative bylaw

[47] The Minister of Conservation has not made any bylaw under s 121. The Auckland City Council has, however, made a bylaw with that reach, under the Local Government Act 2002, the Public Places Bylaw 2008.

[48] There is no issue that this bylaw is capable of applying. The Council has powers to make bylaws within its territory.32 Its territory extends to the mean low water springs.33 Clause 20.3.1 is capable of applying to the Te Huruhi Bay foreshore:

Except with the permission of an authorised officer, or a licence from the Council, a person shall not, in, on or over any public place: ... drive, ride, propel or park any vehicle across any beach, reserve, playing field, footpath, grass verge or berm or water channel, except in an area set aside for the driving or parking of vehicles including a formed road or a vehicle crossing properly constructed under a permit issued by the Council. This restriction shall not apply to any person at a speed not exceeding 10 km/h on a beach or by a direct route to deposit or retrieve a boat in the water where vehicular access to that beach is permitted.

[49] The Macraes have never obtained an express licence under this bylaw. They may not have needed to, to have exercised any right of navigation. They would have

_{needed to in order to enjoy vehicle access. The issue is whether the Council gave}

30 Marine and Coastal Area (Takutai Moana) Act 2004, s 121.

31 Section 122.

32 Local Government Act 2002, s 145, 146(b)(vi).

33 Local Government (Auckland City) Boundary Alteration Notice 2005.

them that licence impliedly when reserving them vehicle access to Te Huruhi Bay across the esplanade strip at the base of lot one.

Esplanade strip access right

[50] When, on 7 December 2005, the Macraes applied to the Auckland City

Council for consent to subdivide their land into two, they described their property as

'accessed via a ROW from Church Bay Road'. No new drives, they said, would be needed. They did not refer to, let alone claim, any right of vehicle access to lot one along the foreshore. They did identify as a possibility an esplanade strip to provide

'improved public access along the coastline and additional recreational areas'.

[51] In granting their application the Council took the esplanade strip, now in place, under s 229 of the Resource Management Act 1991, under an instrument of grant, dated 14 November 2008. In that instrument public access to the strip is assured in this way:34

Any person shall have the right, at any time, to pass and repass over and along the strip and to remain on the strip for any period of time, subject to any other provisions of this instrument.

[52] The instrument contains a number of conditions limiting public use of the strip and the one on which the Macraes rely says this:35

The following further acts are prohibited by the strip:- Taking any vehicle (which shall include any bicycle) on to, or driving or having any charge or control of any vehicle on the land (whether the vehicle is motorised or non- motorised) with the exception of the area N on lot 1 DP387905 for the purpose of access to Te Huruhi Bay by the Grantor, and those of the Grantors' agents, contractors, employees, tenants, licensees, invitees and guests occupying, visiting or working on lot 1 the grantor authorises to use it, or any subsequent owner of lot 1.

[53] This reserved right of access across the strip to Te Huruhi Bay does not confer on the Macraes, or those related to them, any equivalent right of access across

_{or along the foreshore of the bay itself. It is incapable of extending beyond the}

34 Clause 3.2.

35 Clause 3.1(b)(vi).

boundary of the esplanade strip. It cannot amount to a licence from the Council under the 2008 Public Places Bylaw.

[54] The right of access reserved does assume such a collateral right of vehicle access across and along the foreshore for the general purposes of navigation and access; rights then secured under the 2004 Act. Indeed, the very fact that the right had to be reserved, because vehicles are otherwise barred from the esplanade strip, suggests that the public do have access to the strip by vehicle across or along the foreshore.

[55] Such a collateral right of vehicle access is certainly consistent with two of the purposes that, according to s 229 of the Resource Management Act 1991, esplanade strips are to serve:

(b) to enable public access to or along any sea ... ;

(c) to enable public recreational use of the ... esplanade strip and adjacent sea ... where the use is compatible with conservation values.

[56] No less materially, the right of vehicle access reserved extends to the Macraes' 'agents, contractors, employees, tenants, licensees, invitees and guests occupying, visiting or working on lot one', implying that they too have equivalent rights of access or navigation along or across the foreshore for their various purposes.

[57] Clause 20.3.1 of the Public Places Bylaw is quite general. It does not impose any further threshold or limiting condition. It is, on the face of it, inconceivable that the Council, having granted to the Macraes and those in related classes a right of vehicle access across the esplanade strip to Te Huruhi Bay would then frustrate that right by refusing them a licence under the bylaw.

[58] I conclude that lot one is to be ascribed the value Mr Taylor placed on it, assuming a right of vehicle access along the foreshore, $1,500,000. The result is that Mr Walshe is entitled to be compensated for half the increase in value to $1,900,000, once the easement over his land is extended to lot one. On those values, Mr Macrae is to receive $200,000. But they now have to be revised.

Revised valuation

[59] Mr Taylor, like the other valuers, valued the properties affected, that of Mr Walshe and those of the Macraes, as at 31 June 2011. Ms Smith sold her property one month later for $1,580,000 compared to a rating valuation on 1 July 2011 of

$2,750,000. The Macraes sold lot two in November 2011 for $1,900,000, in contrast to the value placed on it by Mr Taylor of $2,200,000.

[60] Mr Taylor, at my direction, has revisited his valuation on the fiction that these sales took place before or at the time that he struck his values for lot one, and Mr Taylor does not consider that either sale is incompatible with the values he struck.

[61] Ms Smith's property, she told him, was thought too large and difficult to attract demand as a lifestyle block. The value he gave to the Macraes' lot two and the price they achieved, he considers also, lie within an acceptable range, set against comparable sales he took into account. He does not discount the possibility that the present case may have been a market factor. Mr Taylor also points out that there may have been other relevant sales since his valuation he has not been asked to take into account.

[62] Ultimately Mr Taylor has chosen to discount his values for lot one by 7.5 per cent. He ascribes to lot one a present value with vehicle access from the foreshore of

$1,390,000. Once the easement is granted, he considers, lot one will have a value of

$1,760,000, an increase in value of $370,000. Of that Mr Walshe, I consider, is entitled to one half, $185,000. He is also entitled, as I held in my primary judgment, to $90,000 for the loss in value of his own land.

Transaction cost

[63] There is then the issue whether Mr Walshe is entitled to be compensated as well, as I held provisionally in my primary decision, on the distinct basis that he has suffered loss and inconvenience.

[64] Such a head of claim, I said in my minute, dated 29 August 2012, suffers the difficulty that it was not pleaded or the subject of evidence at the hearing. As the Macraes say, such deficiencies can be fatal.36 High Court Rule 5.31 requires that relief be claimed specifically. But it also reserves to the Court the ability to grant other relief, if it thinks just. There is then the absence of evidence.

[65] Standing in favour of Mr Macrae's belated claim is that s 317(2) of the Property Law Act 2007 defines widely the compensation to which he is entitled potentially. It is 'reasonable compensation as determined by the Court', and what that means has been defined in the cases.

[66] In Jacobsen Holdings Ltd v Drexel, as the Macraes point out, Cooke P said that:37

All factors of benefit or detriment on either side are material under the section, including for instance any inconvenience or disturbance that the owner of the servient or transferred land may suffer and any advantage that he may gain. These are all considerations which would legitimately influence the parties in the hypothetical friendly negotiation. They all go to what sum is reasonable as the value or price or consideration or compensation - terms which seem to me to be interchangeable and identical in effect when a fair figure has to be arrived at as between the parties and there are no special limiting statutory considerations.

[67] In saying this, Cooke P was far from saying that the 'price' that is to be the measure of compensation is confined to shifts in land values assessed on an ordinary arm's length basis between strangers; the sole subject of the valuation evidence in this case. It is a 'price' to be agreed between existing adjacent land owners, one of whom seeks an advantage and the other seeks not to suffer an undue disadvantage. That is the 'compensation' of which the section speaks.

[68] In Lowe v Brankin38 the Court of Appeal resolved the issue of compensation in that wider way. It first compensated for 'the detriment suffered by the residents in the value of their properties', then for 'the premium' the developer would have to pay

them to obtain the increase in value that he was pursuing.39 Then the Court said this:40

As a further element, the residents were being subjected to transaction costs in the form of their own time and attention, and that of their professional advisers, in what has been a prolonged exercise over this land. Those transaction costs were a very distinct disturbance to the status quo, even though it is very difficult to quantify them.

A little later, when disallowing the costs appeal, the Court treated "the costs arising prior to legal proceedings as transaction costs recoverable as part of the

'compensation'".

[69] In this instance Mr Walshe claims to be entitled to compensation for his time and attention in dealing with this case as well as for inconvenience and disturbance, but says that it is impossible to quantify and he has not quantified it. It is not a head of claim that I begin to sustain, let alone at this late stage.

[70] Mr Walshe also claims defined costs, beginning with the fees of his solicitors and counsel when he took advice before launching this case, once he became aware that the Macraes had subdivided and that they were advertising their two lots with the benefit of the easement over his land. Those fees, which are set out in three tax invoices, total $8,388.75.

[71] As well, Mr Walshe claims his airfares to and from New Zealand for the case,

$2,750.14, and notary and courier costs, $159.61, in each instance verified by bank statement, totalling $2,909.75. Finally, he claims the loss of income he suffered in closing his English dental practice for two weeks to travel to New Zealand to prepare for trial and to attend each day. His loss of earnings, as calculated by his accountant, come to $3,067.25.

[72] These costs, $14,365.75 in all, seem to me beyond any sensible challenge and, just as I allowed the Macraes to rely on the two recent sales results going to the

value of lot one, it seems to me to be right to admit this evidence also. I allow Mr

Walshe this further level of compensation.

[73] The Macraes accept that they should meet Mr Walshe's reasonable legal expenses for any modification to the easement or his title. In the view I take of the relief to which they are entitled I do not see, presently, any expense arising in this way.

Costs and disbursements

[74] Mr Walshe seeks a scale 2B award, heightened by 75 per cent, contending that the Macraes were unreasonable from the outset as well as in their conduct of the case. He seeks also to have set aside Woodhouse J's scale 2B award on the interim injunction, and a heightened award for that phase of the case as well.

[75] The Macraes, as well as resisting any heightened award, seek an offsetting award on the basis that they succeeded in resisting a final injunction and obtained their modification to the easement.

[76] In my primary decision I did not refer to costs in the cause, beyond saying that, while the Macraes had succeeded as they now say, the merit of the case clearly lay with Mr Walshe and that he was entitled to compensation. In deciding these contending costs claims, that remains my central premise.

Walshe claim

[77] In Lowe v Brankin, when dismissing the costs appeal, the Court of Appeal stated that these cases are not special and that costs are, as is usual, within the Court's discretion on the principles that ordinarily apply. As it then said, 'This subject area is not amenable to arbitrary rules'. Mr Walshe's entitlement to costs must then be fixed according to scale unless he is entitled to a heightened award under HCR 14.6.

[78] I understand Mr Walshe to claim a heightened award on two bases. The first is that the Macraes pursued arguments that lacked merit and, conversely, failed

without reasonable justification to admit facts and to accept his own contrary legal argument.41 The second and more basic reason is that increased costs are justified, having regard to the Macraes' conduct even before the case began.42

[79] Mr Walshe first complains that from January 1999 onwards, when he was about to purchase his land, the Macraes trucked Windmill House across it without telling Ms Smith or seeking her consent. Then they subdivided their land into two, on a non notified basis, claiming that their right of way extended inherently to both their new lots. They acted unilaterally and he found himself faced with a fait accompli.

[80] That accords with my primary decision. But this complaint concerns conduct preceding the case, and HCR 14.6(3) does not give carte blanche. In Bradbury v Westpac Banking Corporation43 the Court of Appeal certainly stated that 'increased costs may be awarded where there is a failure by the paying party to act reasonably'. But that is only during the case itself, not before.44

[81] Mr Walshe's second complaint is that when he applied for interim injunctive relief the Macraes, who represented themselves, fought their case substantively and enlarged that phase of the case disproportionately. They contended that the easement was capable inherently of being enlarged to the two lots into which they had subdivided their land and that, in any event, he had agreed to that happening, or not dissented.

[82] In his decision granting Mr Walshe interim injunctive relief, dated 25 June

2010, Woodhouse J found without difficulty that he raised a serious question to be tried and that the balance of convenience and overall justice of the case favoured the grant made. To the extent that the Judge had to take into account the Macraes'

_{counter arguments, he rejected them.}

41 HCR 14.6(3)(b)(ii), (iii).

42 Rule 14.6(3)(d).

43 Bradbury v Westpac Banking Corporation [2009] NZCA 234; [2009] 3 NZLR 400, (2009) 19 PRNZ 385 (CA), at

27.

44 Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) 16.

[83] As Woodhouse J said in his costs judgment, dated 26 October 2010, upholding his scale 2B award in favour of Mr Walshe, in the face of the Macraes' application for review, 'there were clear prima facie grounds for the grant of an interim injunction, on a straightforward reading of the terms of the right of way'.45 In his primary judgment he clearly identified why the Macraes' arguments from history lacked merit.

[84] The fact remains that, despite that, Woodhouse J clearly considered that Mr Walshe was entitled to no more than a scale 2B award and, to set his costs decision aside, as I am asked to do, I would have to be convinced under HCR 14.8(2) the order 'should not have been made'. I have no basis for any such conclusion.

[85] To begin with, the Macraes' affidavit evidence in the interim phase, while very full, as is not unusual where people represent themselves, was not inordinate. It set out their substantive case to put in issue whether Mr Walshe had raised a serious question to be tried. It went also to the balance of convenience and to overall justice. The hearing, as is usual, was accomplished within the day.

[86] While, furthermore, Woodhouse J may have awarded Mr Walshe scale 2B costs without seeking submissions, Mr Walshe could, as the Macraes did, have applied for a review. He did not do so and in the submissions made for him on the review he appears not to have pressed for a heightened award. He cannot pursue such an award now.

[87] Mr Walshe's third basis for a heightened award, in the substantive phase, is by contrast, compelling. It is that, while during that phase the Macraes set out to have the easement modified to ratify the state of their two titles, they persisted in contending that this remedy was uncalled for and that they had acted as of right.

[88] At the substantive hearing the Macraes' then counsel, who conducted their case responsibly, made it clear to me that an order modifying the easement was the

_{remedy they were really intent on; and mostly, if not solely, on the basis that}

45 Walshe v Macrae & Anor HC Auckland CIV 2009-404-8259, 26 October 2010 at [5].

Mr Walshe would not be substantially injured and could be compensated. That eventually is how I resolved the case.

[89] Why the Macraes chose to persist in arguing that they had acted as of right, I do not know. But two things are clear. One is that, just as Woodhouse J had intimated, those arguments were without merit. The Macraes had acted unilaterally, and contrary to their contract with Ms Smith and the easement. The other is that their decision to persist in their claim of right doubled the length of the case.

[90] On that basis Mr Walshe will have a scale 2B award as to the substantive phase, heightened by 50 per cent. In principle that also resolves the Macraes' claim for an offsetting award. I refer to it only to be complete.

Macrae claim

[91] The Macraes contend that they are entitled to an offsetting award, under HCR

14.16, on the basis that they, as well as Mr Walshe, 'succeeded in an independent proceeding'. HCR 14.16, however, permits me to deny them any award if I conclude, as I do, that 'the justice of the case otherwise requires'.

[92] I allowed the Macraes' application only because Mr Walshe would not be substantially injured and could be compensated. I rejected their other grounds. I held they had acted unilaterally, beyond the terms of their easement and the preceding contract, and that Mr Walshe had been shut out. An offsetting award would be unjust.

Experts' fees

[93] Mr Walshe claims the fees of his two valuers, Mr Taylor, $11,077.62, and Mr Tooman, $9,191.75. The Macraes contend that Mr Walshe should not be entitled to the fees of both, because under HCR 14.12, only one valuer was 'reasonably necessary'. I am unable to agree.

[94] Where, as here, there is a contested issue of expert opinion, it is not uncommon for there to be more than one expert to a side and the fact that I preferred

Mr Taylor's evidence to that of Mr Tooman should not disqualify Mr Walshe from being reimbursed the fees of both.

[95] Mr Macrae applies also for solicitor's costs incurred in July 2011, after the hearing but before my judgment, $840.50, and the fees charged by Mr Casey QC on

31 March 2012, $3,162.50, and his further fee recently. None of these costs, I

consider, is allowable.

[96] The solicitor's costs do not qualify under HCR 14.12(1)(a) as a disbursement:

'an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged separately from legal professional services'. The fees of Mr Casey QC do not qualify as expenses incurred for expert opinion evidence.

[97] There can be no question as to the expertise of Mr Casey QC. But in his reports he expresses opinions, not on any arcane question of fact or inference on which I need to be assisted, but on the law that I am to apply. In effect he is making a submission. Rule 14.12(1)(c) bars any claim of counsel's fee as a recoverable disbursement.

Terms of orders

[98] There remain three issues: (i) as to the terms of the modifying order; (ii) as to the sealing of the right of way, and (iii) as to when and in what order the modifying order is to take effect, the right of way is to be sealed, and the Macraes are to meet their liability to compensate Mr Walshe and pay his costs.

Modifying order

[99] In my primary decision I held that the fundamental purpose of the easement as granted, was to enable the Macraes, or their successors, to 'service' a single

'dwelling' on their land as it then was, and that the wider right of access it gave them to every part of their land was related and subsidiary.

[100] In then holding, in principle, that the Macraes were entitled to an order

'modifying' the easement by enlarging it to apply to each of the two lots into which they had subdivided their land, doubling its effect, I intended only to ratify what they had accomplished unilaterally. I did not intend to vary the terms of the easement.

[101] The Macraes now ask me to modify the easement to confirm that while the right of way as to each lot will be to service only one dwelling on each, that merely limits the number of dwellings the right of way is to service. They ask that I confirm that 'the right of way may be used to access the two lots generally and each part of them, in respect of permissible or normal uses, in accordance with the District Plan'.

[102] I am not prepared to go that further distance. The effect could be to allow the Macraes, or their successors, access to places of activity, involving permissible or normal uses, implicitly according them a right to service those activities, perhaps generating more traffic than the dwelling the access right was given to service. The subsidiary right might then in a real sense become an equal or even the primary right.

[103] Conversely, Mr Walshe wishes me to modify the easement to state that, while the right of way may be used for any naturally related or ancillary purpose to servicing the single dwelling on each of the two lots, 'any other purpose such as to service a visitors' facility or other commercial enterprise is expressly prohibited'. Again that seems to me to go needlessly far.

[104] The existing easement, as it is now to extend to the two lots, is to be understood as I have interpreted it in my primary decision, subject to any different outcome on any appeal. As I then said:

Despite the breadth of the right of access granted, the only purpose for the single dwelling exception ... is to limit traffic over the right of way to the occupants of a single dwelling, presently the Macraes, and to their natural invitees. If they or their successors, wish access for any equally basic purpose, like another dwelling, or a visitors' centre, or a commercial enterprise, that will call for an enlarged grant.

[105] On that basis the order I contemplate is one simply ratifying the grant of the easement to each of the two lots into which the Macraes subdivided their land, lot

one, which still belongs to them, and lot two, that they have now sold subject to a related covenant.

Sealing of right of way

[106] There is no issue that the Macraes have undertaken to seal the right of way from their own boundary to the road and to pay for regular upgrades, subject to Mr Walshe contributing as to one third. There may still be an issue as to the standard.

[107] Mr Walshe has asked that the seal be 30 mm in depth. The Macraes contend for a light chip seal. Most recently, they say, Mr Walshe agrees to that lesser standard. My own concern is that the right of way be prepared for sealing and be sealed to a standard that will be safe and durable, so that Mr Walshe is assured of the benefit of the Macraes' undertaking and to avoid any dispute in the medium term about the durability and safety of the seal.

[108] I leave it to Mr Walshe and the Macraes to agree on the standard and, if they cannot agree within a reasonable time, the standard to which the right of way is to be prepared and sealed is to be fixed, and supervised, by a civil engineer in practice on Waiheke Island.

Timing issues

[109] Assuming, as I do, that the easement now registered against the two lots into which the Macraes have subdivided their land is to remain unchanged, I do not envisage that I need do more than ratify the present state of those titles. Whether that calls for a further memorial to be registered against Mr Walshe's title may be another issue.

[110] Before any such memorial is registered to Mr Walshe's title, and before the present interim order made by Woodhouse J is revoked, the Macraes must have the driveway sealed to the standard that I have prescribed, and they must pay Mr Walshe the compensation and costs and disbursements awarded him, together with any

reasonable fee he incurs to have his title modified, less his one third share of the cost of sealing the driveway.

[111] The Macraes are to meet these obligations as soon as practicable. I leave it to counsel to settle a sensible time limit. Immediately the Macraes have met their liabilities, counsel are to confirm that to be so by joint memorandum and I will revoke the interim order.

Formal outcome

[112] For the reasons I gave in my primary decision, dated 28 February 2012, I decline Mr Walshe's application for a final injunction and I grant the Macraes' application for an order modifying their easement over Mr Walshe's land, ratifying the registration of that easement against both the two titles into which they have subdivided their land, on the terms set out in this decision.

[113] Counsel are to settle the orders required to reflect my decision, including the costs award to which Mr Walshe is entitled. Any issue as to that calculation is to be resolved by the Registrar unless it calls for a decision of principle that I must make

_{myself. I hope that will not prove necessary.}

P.J. Keane J