Street v Fountaine [2014] NZHC 2697 (31 October 2014)

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UNDER	Section 313 of the Property Law Act 2007
IN THE MATTER	of an application for relief concerning principally the land comprised in computer freehold registers WN40A/853 and WN564/201
BETWEEN	CHRISTOPHER JOHN STREET, PHILIP JOHN ENGLAND, MICHAEL JOHN STREET AND JOAN ISABELLA STREET Plaintiffs
AND	REX ALISTAIR FOUNTAINE First Defendant ASHBY DOWNS LIMITED Second Defendant ANZ BANK NEW ZEALAND LIMITED Third Defendant MARGARET ELIZABETH FOUNTAINE Fourth Defendant

Hearing:	22 October 2014
Counsel:	R K Macdonald for Plaintiffs T G Stapleton QC for First Defendant
_Judgment:	_{31 October 2014}

This judgment was delivered by me on 31 October 2014 at 3.00 pm, pursuant to r 11.5 of the High Court Rules.

[1] The plaintiffs are the trustees of the Homunculus Trust (the Trust) which owns and operates a farm (the Trust land) in the Wairarapa region. The key representative of the Trust is Mr Street.

[2] The plaintiffs seek interim relief against the first defendant, Mr Fountaine, for personal access to a 40mm pipeline that traverses land owned or connected to Mr Fountaine, pending determination of their substantive claim. The pipeline is part of the Lower Scheme of the Ahiaruhe Water Scheme (the Lower Scheme).

[3] The source of water for the Lower Scheme is the land known as Aranui, which is owned by the second defendant, Ashby Downs Ltd. The pipelines of the Lower Scheme are primarily on the property known as Waikaramu (owned by the first defendant’s family since 1949) and partly on the properties known as The Downs (owned by Ashby Downs Ltd since 1957) and on the property known as Maungahuia (owned by Mr and Mrs Fountaine and Mr McKenzie as the trustees of the Maungahuia Fountaine Trust since 1997).

[4] The substantive relief sought by the plaintiffs is for an easement to be registered over Waikaramu to take and convey water, which would permit them access to Waikaramu for inspection and maintenance.

[5] The plaintiffs’ position is that their statement of claim discloses a serious question to be tried and the balance of convenience favours the grant of interim relief. Alternatively, the plaintiffs submitted that the Court should enforce an interim access agreement reached between the parties in 2011.

[6] On behalf of Mr Fountaine, Mr Stapleton QC submitted that the plaintiffs have no real prospect of success in their substantive claim because neither Mr Fountaine nor his father (the previous owner of Waikaramu) agreed to an easement over Waikaramu. In the event that it becomes necessary to consider the balance of convenience, Mr Stapleton submitted interim relief would not be

necessary to preserve the status quo pending determination of the substantive proceedings, as the Fountaines are prepared to allow a registered plumber to access the property on behalf of the Trust.

[7] The principles relating to interim injunctions are well settled. Two broad enquiries are involved. The first is whether there is a serious question to be tried. In that regard, the Court must consider the facts contended for by both sides; where the issues lie; the applicable law; whether there are arguable differences concerning the law; and whether there is a tenable combination of resolutions of the issues of law and fact on which the plaintiff could succeed.

[8] The second enquiry concerns the balance of convenience. This involves balancing the injustice that will be caused to the applicant if an interim injunction is refused and the applicant’s case ultimately succeeds; against resulting injustice to the respondent if the injunction is granted, but subsequently discharged in the course of

[9] In Wellington International Airport Ltd v Air New Zealand Ltd, Wild J adopted a four step approach. The first step is whether damages would adequately compensate the defendant in the event interim relief is granted and the plaintiff fails at trial. The second step is to consider preservation of the status quo, as opposed to recent change that has led to the dispute in question. Preservation of the status quo is often a prudent course. The potential for injustice for the defendant will often be

increased if he or she is required to do something rather than passively desist.²The

third step is consideration of the non-compensatable disadvantages to each party, dependent on whether an interim injunction is granted or refused. The fourth step is to consider the relative strength of each party’s case as revealed by the affidavit

¹Wellington International Airport Ltd v Air New Zealand Ltd HC Wellington CIV-2007-485-1756,

²Citic New Zealand Ltd v Fletcher Challenge Forests Ltd HC Auckland CP583-SW/99, 7 March

[10] In every case, the Court is required to stand back and enquire as to where the overall justice lies concerning the grant or refusal of an interim injunction.³

[11] The relevant facts are disputed between the parties. In the context of this interim application the Court is not required to and cannot resolve conflicting affidavit evidence or express an opinion on the merits of the proceeding, beyond determining whether the claim has a real prospect of success at trial. The facts relied on by the plaintiffs must be sufficiently precise to satisfy the Court as to this question.

[12] By way of history, in 1971, a dispute over water use arose between neighbours living in the Ahiaruhe Valley in the Wairarapa region. Farm owners downstream of Aranui took water from the Ahiaruhe Stream and became concerned when upstream farmers indicated an intention to do the same.

[13] The Wairarapa Catchment Board became involved in resolving the dispute. Following negotiations, two schemes were implemented, labelled the Upper Scheme and the Lower Scheme. The Upper Scheme pumps from the water source on Aranui. The Lower Scheme is a gravity fed scheme that originally went from the water source on Aranui to a weir on Aranui, before travelling downhill through a 50mm pipeline to the downstream farmers. For the Lower Scheme to work, the pipeline had to travel across Waikaramu.

[14] On 24 December 1971 Mr Mahoney, chief engineer of the Board, wrote to Mr Ashby senior, who owned the Downs through his company, Ashby Downs Ltd, stating:⁴

Please find enclosed a letter regarding the agreement reached at a recent meeting of the committee set up to resolve the differences arising over water use in the Ahiaruhe Valley.

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 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.

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

[16] Mr Ashby senior wrote the following notes on the second page of the attached letter:

We acknowledge receipt of a copy of your letter (undated) setting out the terms of agreement reached between the Upstream Owners and the Downstream Owners.

1. That the Upstream Owners were to install the pipeline and if there is any change out of $900 the Downstream Owners could have it towards their other expenses.

2. Whether or not the Downstream Owners desire a registered easement is of no concern to any of the Upstream Owners except that “Aranui” Station will grant an easement if so requested.

3. 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.

We think it fair to say, therefore that there was no agreement by the Upstream Owners to “institute” an easement for the Downstream Owners, or indeed, to have anything to do with such an easement.

... 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 pipeline.

[19] This is the first major area of dispute between the parties and is relevant to whether there is a serious question to be tried. According to both Mr Ashby and Mr Fountaine, water easements were not registered for the Lower Scheme because Mr Fountaine senior did not agree to such an easement on his land. According to the plaintiffs, Mr Fountaine senior:

_{... agreed to the registration of an easement for the conveyance of
water over}

[20] In 1994 the downstream users upgraded the Lower Scheme. As part of the upgrade, a new weir and sediment holding tank were constructed on Waikaramu and new twin 40mm and 50mm pipelines were laid across Waikaramu. The 50mm pipeline is connected with the original 50mm pipeline on the Ashby section, while the 40mm pipeline connects with the existing 40mm pipeline on Maungahuia.

... at the time of the upgrade and the 1994 modifications, it was reaffirmed by the downstream users with Rex and Shona Fountaine that there was to be no easement over Waikaramu, that we were there at their pleasure, and that access for service was only with their permission.

[22] In 1989, Mr MacPhail registered a water easement over Maungahuia in favour of what ultimately became the Trust land.

[23] The Trust purchased properties on the northern side of Millars Road in 1998,

From the time of the modifications to 2007, there were no problems. The users of the scheme on the 40mm pipeline respected the fact that they had no rights of access to Waikaramu for the purpose of inspection or carrying out maintenance work on the pipeline unless they gave me prior notice and I then agreed if it was convenient for me, having regard to my farming operations, stock movements on Waikaramu, the presence of other persons and other activities (such as recreational hunters) on Waikaramu, and other relevant matters (such as OSH requirements). Waikaramu is not a property of open field and easy access. Access from Millars Road to the weir is by means of a single lane, narrow, winding track with blind corners which has its dangers...

[24] It appears that in 2007 the relationship between Mr Fountaine and the users of the 40mm pipeline deteriorated. This occurred during a drought that started in winter and continued into the following summer. At that time, there were several users of the 40mm pipeline, including the Trust and Mr MacPhail. According to Mr Fountaine:¹⁰

... users of the scheme started coming on to Waikaramu without notice and permission. My wife and I complained to Mr MacPhail (as the caretaker manager of the 40mm pipeline) about this.

[25] Mr MacPhail instructed Mr Kershaw of Gawith Burridge. Mr Kershaw wrote to Mr and Mrs Fountaine in a letter dated 16 October 2007:¹¹

Doug MacPhail has asked that I co-ordinate and write a letter to you both, setting out some assurances that the users of the water scheme wish to make...

Doug, on behalf of all users, gives you both an assurance that he will give not less than 12 hours notice if he wishes to organise maintenance work to be undertaken on the Millars Road Water scheme pipelines.

In cases of urgency (ie when the scheme fails), Doug wishes to assure you that he will give you as much formal notice as is reasonably possible and will not go onto your farm without having contacted you...

Doug accepts your concerns that there are safety issues regarding the use of the farm track to the source and holding tanks and wishes to assure you both that care is always taken while accessing the scheme.

[27] However, according to Mr Fountaine, the assurances given in this letter were not complied with. He said changes were made to the infrastructure of the Lower Scheme on Waikaramu without consultation with the Fountaines.¹²In December

2009 Mr and Mrs Fountaine wrote to the users of the Lower Scheme on the 40mm pipeline as follows:¹³

... we take it that you are considering bringing in a third party in the way of employing a Plumbing Contractor – to be involved in the agreement you have with us. Initially our reply to Doug was positive.

However after a phone conversation with Richard Ashby we realise there is concern over the issue of communication.

We feel very strongly about the importance of relationship with neighbours. We have what is known as a Gentleman’s agreement with our boundary neighbours on Aranui and The Downs and were disappointed the Ashbys were not communicated with when you presented your signed agreement. Your pipes and tank and Weir affect them as well.

_{Farm – the land that your weir, tank and pipes are on and I
mention that not}

all your pipes are buried. We hope that you will address this issue of communication, as bringing in a third party will provide concerns for us regarding insurance and OSH requirements. We were disappointed that when the latest changes made to the scheme involving a Plumbing firm we were in no way consulted by the users of the scheme. May we remind you all of the preciousness of this wonderful resource and the importance of communication.

We would like to think there are many workable options that could be discussed as to the workings and continuance of our arrangement with you.

... we would like to put forward that any changes that are made are to be finalised with a written signed agreement before they take place.

[28] At this time, Mr MacPhail stopped using the 40mm pipeline and began pumping water directly from the Ahiaruhe Stream. According to Mr Fountaine, the maintenance of the scheme was handed over to Mr Mouldey of G V Electrical and Pumping Ltd.¹⁴The Trust became the main user of the 40mm pipeline¹⁵and its strained relationship with the Fountaines continued.

[29] In an attempt to clarify the water supply arrangements, Mr Street wrote to the

I have prepared, and attach, a draft agreement to record the water supply arrangements between our respective farms.

I am sure you will want to take legal advice on the draft – I encourage you to

In the meantime, we would like to access the system next week to find out why it has been out of action since the end of July. We have held off doing so to date because we didn’t want to disturb ground etc in the height of winter. But we are now getting to the point where our stock need the water.

At this point I suspect it will be Stewart Cowan¹⁶and me that inspect the line etc. Ideally, we would welcome your joining us to identify any important features or other points you would like us to bear in mind, but realise that this may not suit ... I can probably arrange for Doug MacPhail to assist us on this occasion if you are not available.

¹⁵_{The Putlands continued to take a small amount of water
from the Lower Scheme.}

I will look forward to receiving your comments on the agreement at your earliest convenience... I would be grateful if you could call me ... to let me know whether there is a time that suits you next week (and might work for Stewart) for us to try to fix the supply.

[30] In relation to access to the Fountaines’ land, the agreement provided that the grantee (including the agents, employees, contractors, tenants, licensees, and other invitees of the grantee) may:

(c) make good any damage to the grantor’s land, and compensate the grantor for any damage to the buildings, fences and crops on the grantor’s land.

[32] In drafting the agreement, Mr Street evidently attempted to address some of the concerns previously expressed by the Fountaines. In relation to notice, the agreement provided that the Trust would give:¹⁷

(a) at least 48 hours’ notice before entering Waikaramu for routine maintenance, repair or other work on the supply system; or

(b) as much notice as practicable (for example, any occasion on which the supply of water through the supply system has ceased).

[33] The agreement acknowledged that there may be some occasions on which notice of entry would not be possible. The grantor was required to acknowledge receipt of notice and advise of special considerations to be taken into account on entering the property (for example, stock issues, works being undertaken and hazards).

[34] The agreement also outlined procedures to address health and safety considerations that arose from access to the property.

[35] The following day Mr Fountaine telephoned Mr Street. The tenor of the conversation is disputed between the parties but they accept that Mr Fountaine said that:¹⁸

(b) Lower Scheme users had a plumber (Mr Mouldey) who carried out any maintenance work;

(d) he was not interested in signing the draft agreement or any other water right agreement.

1. Thank you for the draft Water Rights Agreement and the revised edition. However, please note that we do understand Rex or Shona are willing to sign a formal Water Rights Agreement.

2. The Fountaines believe the water system in place is the best way to proceed, namely with you engaging the plumber... or his firm, or some other plumbing firm agreed to by both yourself and Rex.

4. Rex does not think he is the only grantor as the source of the spring is on Ashby’s land. Rex does not use the system but understands your need to maintain supply and would not stop that being achieved. Rex just believes it best if a qualified plumber is used. The plumbers seem to better understand Rex and Shona’s need to be notified and consulted prior to entry.

5. Rex accepts that you have an easement for water supply over that part of the farm purchased from Doug MacPhail and known as Maungahuia and clearly, if you wish, you can make whatever arrangements for maintenance that you choose, in the knowledge that you have an easement...

6. We are instructed to advise that Rex is reluctant to permit access to his original farm known as Waikaramu over which no easement is held.

[37]	Mr Street replied in an email that afternoon:²⁰ ...
	We are very clear about our rights under the Scheme. We have endeavoured to be as courteous and co-operative as possible, taking steps, and proposing protocols, not required on our part. We consider your clients’ clear attempt to interfere with our rights and business to be nothing short of reprehensible (in addition to unlawful and unneighbourly).
	The draft agreement is withdrawn. We will now issue proceedings to establish our rights, and those will not be “softened” or trimmed by any process agreement, once established.
[38]	The parties reached an interim agreement as to access pending	the

determination of substantive proceedings. However, the precise terms of this agreement are the second major area of dispute between the parties and are relevant to the question of the status quo and the effect the grant or refusal of interim relief would have on each of the parties.

[39] In relation to interim access Mr Street wrote in the above email on 5 October

2011 asking whether the Fountaines agreed to Mr Cowan or himself having access to the property on the basis outlined in his draft agreement, pending determination of

the substantive proceedings.²¹Mr Kershaw replied the following day, advising that the Fountaines agreed to allow access for the purposes of maintaining the water scheme.²²

14 October 2011, he advised Mr Street that the Fountaines were prepared to execute an agreement granting the Trust the right to convey water over their land. In relation to access, Mr Stapleton confirmed that the Fountaines would allow access to the property for the purpose of maintenance “at reasonable times on reasonable telephone notice”.²³

[41] Mr Street’s consistent position was that, under the interim access agreement, it was sufficient for him to provide notice of an intention to access the property on an ongoing basis. This position was reiterated on numerous occasions²⁴and is perhaps

[42] The Fountaines’ response was to confirm the access conditions outlined in the

14 October 2011 letter. This position was reiterated in a letter from Mr Stapleton on

[43] The next development occurred on 29 January 2012, when Mr Street met with the Ashbys and Mr Fountaine. What was said during that meeting is the third major area of dispute. Mr Street contends that Mr Fountaine:²⁶

... unreservedly confirmed to me that he no longer had any objection, or took issue, with the Trust itself accessing [Waikaramu] for the [Lower Scheme].

_{[44] Mr Fountaine disputes this account of the conversation, saying
that:}²⁷

(d) the Ashbys asked me if I would be prepared to allow Mr Street to come onto Waikaramu to carry out inspection and maintenance work. I told the three of them that I would be prepared to allow that if Mr Street withdrew his threat of proceedings and if he agreed to give me prior notice and obtain permission before he came on to Waikaramu to do inspection and maintenance work.

(e) Mr Street would not agree to the prior notice and permission and also wanted me to pay costs for his threatened proceedings... There was no agreement at the meeting that Mr Street could come onto Waikaramu for inspection or maintenance work without prior notice and permission. In short, there was no oral agreement...

4. In terms of the agreed interim arrangements, the Homunculus Trust is not free to access the Maungahuia Fountaine Trust’ and Mr Fountaine’s lands as the Homunculus Trust sees fit, but only at reasonable times on reasonable telephone notice, and the assertions to the contrary in your email to Mr Kershaw of 19 January 2012 are not correct.

[46] Matters progressed further the following day, when Mr Street emailed a draft agreement to Mr Kershaw. According to Mr Street, one of the reasons the Trust continued to press for a written agreement was that:²⁹

... on 31 January 2012 ... the Trust discovered that a relatively obscured valve in its pipeline on [Waikaramu] had been opened by somebody, which had resulted in the almost total disruption to the supply of water under the [Lower Scheme] for several months.

[47] This latest proposal was not accepted. Mr Kershaw replied on 10 February with a different agreement, which he said his clients were prepared to sign, and which relevantly provided:³⁰

(b) such rights may not be exercised by the Trust in any way that adversely affected the rights of the other users and landowners;

(e) it was acknowledged that there may be some exceptional occasions on which notice of entry will not be possible.

[48] Mr Street rejected the agreement put forward by Mr Kershaw. He indicated an intention to commence proceedings and reiterated his position in relation to interim access:³¹

HT will access your clients’ land when, how, through whom and by whichever entrance point it considers appropriate, without any further notice to attend to its water scheme.

... Your comments ignore the rights of my clients and other landowners and users and the notice provisions which were agreed as part of the interim access arrangements. If the Homunculus Trust will not abide by all the provisions of the interim access arrangements (notice and otherwise), then those arrangements are likely to be cancelled ...

[50] Mr Street replied later that day, disputing the nature of the interim access agreement:³³

... There were NO notice provisions agreed at all between us. Instead, you were put on notice that HT would be accessing its scheme from time to time, pending the outcome of the substantive proceeding. That arrangement was specifically relied on by HT, and accordingly no interim measures were enforced at that point.

[51] Mr Kershaw replied on 17 February 2012, denying that his clients were attempting to resile from the interim access arrangements:³⁴

... If the Homunculus Trust abides by all of the provisions of those arrangements (notice and otherwise), then they will continue. If not, then they are likely to be cancelled.

You will probably be aware that we have had little water in our supply system for much of this year.

We have tried to make do with poor flow rates, in an effort not to disturb you (or the Ashbys). But we can no longer do that, as we head into the warm and dry season during which water becomes absolutely critical for our animal welfare. Our extensive storage facilities (which we have been using to compensate for the poor inflow) will be exhausted before much longer.

The arrangements in regard to your accessing the properties are as follows: On Maungahuia Farm

[54] Mr Street replied on 18 March 2014, advising of the Trust’s intention to “exercise its full rights at law and pursue registration of the standard take and convey easement” for Waikaramu. Mr Street also sought to confirm the interim access arrangement, stating:

... your clients recognised on an interim basis HT’s rights to access the scheme infrastructure. Rex Fountaine also advised orally that he had no issue whatever with direct ongoing access by HT, only to resile from that assurance in later correspondence ...

- invite your clients ... to confirm that the previous interim arrangement (sanctioning access by HT and its agents) is immediately reinstated and applies until the easement has been registered.

[55] In his reply on 28 March 2014 Mr Kershaw advised Mr Street that the Trust’s planned proceedings would be defended and that access to Waikaramu would be provided on the terms put forward in Mr Fountaine’s letter dated 19 December 2013.

[57] Relying on the background facts as outlined above, Mr Macdonald submitted, on behalf of the Trust, that a serious question exists as to the existence of an equitable easement over Waikaramu.

[58] Three elements are essential to an equitable easement by agreement. First, the right to be granted must possess the essential characteristics of an easement. There is no dispute that the right to be granted possesses such characteristics.

[59] Second, the grantee must provide valuable consideration for the grant. There is adequate evidence at this stage to support the plaintiffs’ contention that the Lower Scheme was implemented as part of a compromise involving valuable consideration between all affected parties.

(1) A contract for the disposition of land is not enforceable by action unless—

(b) the contract or written record is signed by the party against whom the contract is sought to be enforced

[61] It does not appear that such a written contract was signed by the parties. Certainly, one was not produced to the Court. However, this element can also be satisfied by a sufficient act of part performance. In T A Dellaca Ltd v PDL Industries Ltd Tipping J outlined three relevant considerations:³⁶

(1) Was there a sufficient oral agreement such as would have been enforceable but for the [Property Law] 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;

(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.

(3) Do the circumstances in which that part performance took place make it unconscionable (fraudulent in equity) for the defendant to rely on the Act?”

[62] Mr Macdonald also submitted that the requirements to raise an equitable estoppel are present. The party alleging an estoppel must show that:³⁷

(a) a belief or expectation has been created or encouraged through some action, representation, or omission to act by the party against whom

³⁷DW McMorland, McMorland on Easements, Covenants and Licences (2^nded, LexisNexis, 2014)

(b) the belief or expectation has been relied on by the party alleging the estoppel;

(d) it would be unconscionable for the party against whom the estoppel is alleged to depart from the belief or expectation.

[63] Turning to the evidence currently before the Court, the letter from the Wairarapa Catchment Board appears to indicate that Mr Fountaine senior consented to an easement over Waikaramu. However, against that letter is evidence from Messrs Ashby and Fountaine that no such consent existed, as well as the fact that no easement was ever registered.

[64] Nonetheless, some form of agreement between upstream and downstream owners must have been reached in 1971 and that arrangement remained in place with little incident until 2007. The exact nature of this agreement and whether it gives rise to an equitable easement cannot be determined on the affidavit evidence and documents before the Court without the benefit of discovery and cross-examination. That is for the substantive proceedings. At this interim stage, I am satisfied that the facts and law relied on by the plaintiffs disclose a serious question to be tried.

[65] In determining where the balance of convenience lies, the first step is to consider whether damages would adequately compensate Mr Fountaine if the interim injunction were granted and the plaintiffs failed at trial. Mr Stapleton did not contend that damages for inconvenience caused by access would provide inadequate compensation.

[66] The second step is consideration of the preservation of the status quo. Mr Macdonald submitted that the status quo is unrestricted access by the Lower Scheme owners, which began in the early 1970s and was confirmed by Mr Street’s

interpretation of the “interim access agreement” and statements by Mr Fountaine on

[67] Plainly, the status quo has never been “unrestricted access”. The correspondence outlined above discloses that Mr Fountaine consistently required prior notice and permission to access the property. Equally however, the restriction of access to a registered plumber by the Fountaines is a new condition, imposed in late December 2013, and cannot be considered part of the status quo. Drawing together all of the correspondence between the parties, it appears that the most embedded arrangement is that outlined by Mr MacPhail in his letter to the Fountaines in 2008; whereby access to the land is permitted for the purposes of repair and maintenance provided not less than 12 hours’ notice is given. In cases of urgency, as much formal notice as is reasonably possible is required.

[68] The third step is consideration of the non-compensatable disadvantages to each party dependent on whether an interim injunction is granted or refused. In this regard Mr Macdonald submitted that damages would not provide an adequate remedy should the plaintiffs succeed at trial. He emphasised the stress and anxiety that will be caused, should the need to repair the 40mm pipeline and access be restricted to a plumber.

[69] He contended that generally a plumber would have a range of competing commitments, would not be required for most jobs, and would be unfamiliar with the

40mm pipeline. Mr Macdonald also contended that problems with the 40mm pipeline would endanger the welfare of the stock on the Trust land with resultant financial losses.

[70] While not referring to any non-compensatable disadvantages that would be borne by the first defendant, Mr Stapleton disputed the matters advanced by Mr Macdonald, submitting that the 40mm pipeline is not the sole supply of water for the Trust land and also referring to the presence of water storage facilities on the

... To date (in part due to water inflow issues under the ... Water Scheme, but more due to Scheme performance issues) we have not been successful; in maintaining appropriate storage levels when they are most needed...

[71] The final step is to consider the relative strength of the parties’ case. In the absence of further evidence, I consider this to be a neutral factor. The salient facts are vigorously disputed between the parties and cannot be sensibly determined at this stage.

[72] Taking all of these matters into consideration I am satisfied that the overall interests of justice favour the grant of interim relief. Mr Fountaine conceded that it may be necessary for the Trust to carry out inspection and maintenance of the 40mm pipeline between now and determination of the substantive proceedings. It is also possible that urgent repairs will need to be carried out on the pipeline during this time. I am satisfied that it would cause undue prejudice for the plaintiff to instruct a plumber for each and every task related to the pipelines. On the other hand, I perceive no prejudice to the Fountaines if the farm manager is allowed to access Waikaramu, provided adequate notice is given.

[73] The next question is the nature of the interim relief orders. The plaintiffs have applied for an order prohibiting Mr Fountaine from preventing the plaintiffs or their agents from entering Waikaramu as if there were a registered easement in place. However, I do not consider it necessary to grant access to Mr Street, particularly in light of the current level of unfortunate acrimony that appears to exist between him and the Fountaines.

[74] On that basis, I consider the farm manager should be accorded the right to access Waikaramu on 12 hours’ notice, or on as much notice as is practicable (although in exceptional circumstances notice of entry may not be not be possible). Those are the terms put forward by the Fountaines in their proposed agreement of

10 February 2012 and they provide for a shorter period of notice than initially suggested by Mr Street in 2011. The balance of convenience at this stage favours the requirement of prior notice, taking into account the status quo and the evidence relied on by Mr Fountaine regarding the nature of Waikaramu as a working farm.

[75] In addition, access by the farm manager will be subject to the conditions outlined at [31] and [32] above, as set out in the draft agreement proposed by Mr Street in 2011.

[76] Finally, Mr Street is to provide an undertaking that he will pursue the substantive proceeding in this matter expeditiously. In the meantime, the conditions imposed will fairly balance the interests of both sides pending determination of the substantive proceeding.

[77] It is not necessary to determine the plaintiffs’ arguments in relation to the

2011 interim access arrangement and the statements allegedly made by Mr Fountaine on 29 January 2012. I do note, however, that the 2011 interim access agreement does not permit the Trust to access Waikaramu on an “as and when” basis, as Mr Street contended. On the contrary, Mr Fountaine has consistently informed Mr Street that access was permitted “at reasonable times on reasonable telephone notice”. Against this background I consider it unlikely that Mr Fountaine would suddenly agree to unrestricted access to Waikaramu on 29 January 2012.

[78] While the plaintiffs have in large part been successful, the correspondence outlined at the beginning of the judgment discloses that Mr Street sought to provide ongoing notice of his intention to access Waikaramu for the purpose of repairs and maintenance, rather than simply providing reasonable notice on each occasion. This position was contrary to the interim access agreement reached between the parties and contributed significantly to the further deterioration of the relationship between Mr Street and the Fountaines, as well as the prohibition of Mr Street or his farm manager from conducting repairs and maintenance personally, all of which precipitated the need for interim relief.

[79] In these circumstances I am satisfied that costs should lie where they fall.

[80] Counsel are invited to confer and come back to the Registrar within 28 days of the issue of this judgment, to advise what further steps the parties might wish to take. If counsel so desire, a telephone conference can be convened for directions.

High Court of New Zealand Decisions

Street v Fountaine [2014] NZHC 2697 (31 October 2014)