McInness v Jones [2018] NZHC 1499 (20 June 2018)

Last Updated: 5 July 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-465 [2018] NZHC 1499

BETWEEN	ANTONY FRANKLYN McINNESS SUSANNE MAVIS McINNESS and HENRY WILLIAM CRANEFIELD Plaintiffs
AND	PETER ALLAN KEITH JONES JUDITH ANN JONES and TIMOTHY JOHN BURCHER First Defendants 161 TAMAKI DRIVE LIMITED Second Defendant PETER ALLAN KEITH JONES Third Defendant

Hearing:	20 June 2018
Appearances:	G Blanchard QC for the Plaintiffs R O Parmenter for the Defendants
Judgment:	20 June 2018

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:

Gill, Coutts & Co (Christopher Gill), Auckland, for the Plaintiffs Carnahan Lawyers, Auckland, for the Defendants

Copy for:

Greg Blanchard QC, Auckland, for the Plaintiffs R O Parmenter, Auckland, for the Defendants

McINNESS v JONES [2018] NZHC 1499 [20 June 2018]

[1] The plaintiffs apply for discovery of these documents:

1. All documents relating to which party or parties is or are developing 20A and 20B Selwyn Avenue, Mission Bay, Auckland;

2. All invoices and delivery slips relating to the development of 20A and 20B Selwyn Avenue;

3. All documents relating to budgeted costs in respect of the development of 20A and 20B Selwyn Avenue; and

4. All document relating to arrangements with the owners of 18 Selwyn Avenue, including but not limited to all communications with them.

[2] The case involves a dispute about the use of a right-of-way. The plaintiffs sue the defendants in trespass. The case will be heard for three days beginning on 26 November 2018. Edwards J gave the background in her summary judgment decision of 14 November 2017:¹

The dispute in context

[2] The plaintiffs are the trustees of the McInness Family Trust which owns the property at 24 Selwyn Ave. That property is the principal residence of Mr and Mrs McInness.

[3] The first defendants are the trustees of the Jones Family Trust. They own the property at 26 Selwyn Ave, which is currently a vacant lot. The Jones Family Trust is building a luxury residential home on the land.

[4] Mr and Mrs Jones are shareholders in the second defendant, 161 Tamaki Drive Limited (161 TDL). Mr Jones is the sole director of that company. 161 TDL owns the property at 20A and 20B Selwyn Ave (which I shall refer to as 20A/B). That land is being developed by 161 TDL into three high-end residential apartments.

[5] All of the properties, and the property owned at 18 Selwyn Ave, are accessed from a common driveway. The current ownership and access rights in respect of this driveway are shown in the plan scheduled to this judgment and are as follows:

¹ McInness v Jones [2017] NZHC 2781 at [2]- [9].

[a] The 24 Selwyn Ave share of the driveway is the far right-hand side section which ends at that property.

[b] The 26 Selwyn Ave share is the section in the middle of the driveway which widens towards the top, and ends at that property.

[c] The 18 Selwyn Ave share are those sections on the left of the driveway.

[6] There are reciprocal rights of way granted over the 24 and 26 Selwyn Ave shares of the driveway. That reciprocal right of way provides:

... their servants agents workmen and visitors and all persons having business with them ingress egress and regress on foot and with and without implements and vehicles of every description loaded or unloaded by night as well as by day in over upon and through that portion of the land ... for the purpose of giving access to and from the land first above described and any part thereof and to and from the public road

...

[7] The right of way means that trucks which are delivering goods to 26 Selwyn Ave may use the 24 Selwyn Ave share of the driveway without trespassing.

[8] There are also rights of way in favour of 20A/B Selwyn Ave granted over the 18 and 26 Selwyn Ave shares of the driveway. That means that trucks accessing 20A/B may use the left-hand side and middle portions of the common driveway without trespassing. However, there is no right to use the 24 Selwyn Ave share of the driveway to access 20A/B. It is common ground that trucks which travel over the 24 Selwyn Ave share of the driveway to access 20A/B are trespassing.

[9] Because of a slight height differential in the common driveway there is currently only 2.68 metres of formed driveway which trucks accessing 20A/B may use without trespassing on the 24 Selwyn Ave share of the driveway. The defendants have plans to widen the formed driveway which they say will result in a width of 2.87 metres. A replacement right of way between the defendants and the owners of 18 Selwyn Ave has been agreed, but not yet registered.

[3] The plaintiffs say that trucks accessing the 161 site are trespassing on the 24 Selwyn Avenue share of the driveway. The trespasses continue on an almost daily basis. The 18 and 26 Selwyn Avenue shares of the driveway are not wide enough for trucks to access the 161 site without trespassing. For the summary judgment application, they included in their evidence photographs of trucks accessing the building site at the end of the driveway using the 24 share of the driveway. They accept that vehicles accessing the development on 26 Selwyn Avenue are entitled to use their share of their driveway as of right. They do not, however, accept the
assertions of Mr Jones that the trucks using the driveway shown in their photographs were going exclusively to 26 Selwyn Avenue.

[4] There are disputes of fact whether trespasses are happening, the extent of trespass and whether trucks using the 24 Selwyn Avenue share of the driveway are going to the 161 site or to 26 Selwyn Avenue. The plaintiffs say that the trustees of the Jones family trust and Mr Jones are personally liable for the trespasses by the truck drivers.

[5] The defendants accept that there have been occasions when trucks accessing the 161 building site have used the 24 Selwyn Avenue share of the driveway. But they say that they have taken steps to avoid that by erecting signs and painting a pink strip to show the trucks which part of the driveway they can use. The plaintiffs do not accept that the trespasses by trucks have stopped, notwithstanding those steps.

[6] The plaintiffs sought a permanent injunction in their application for summary judgment. Edwards J dismissed the application. She considered that there was an arguable dispute whether damages may be an adequate remedy. She also accepted that there are disputable issues as to the liability of the trustees of the Jones Family Trust and Mr Jones. Those matters should only be decided at a final hearing.

[7] The statement of claim alleges trespass by an impermissible use of the right- of-way easement. The plaintiffs seek a permanent injunction barring the defendants, their employees, agents, contractors or any other party from using the 24 Selwyn Avenue share of the driveway. The prayer for relief also seeks damages in addition to or in lieu of an injunction, with the amount to be formulated before trial. The plaintiffs seek damages for wrongful use rather than compensatory damages. A useful authority explaining this distinction is Barker J’s decision in Roberts v Rodney District Council.²

Discovery

[8] So far, the parties have not carried out formal discovery. The applicants applied for further discovery under r 8.19. That rule applies only if there has already been

² Roberts v Rodney District Council [2001] 2 NZLR 402 (HC).

discovery and the applicant contends that there is reason to believe there are further documents that should have been disclosed. Instead, I am dealing with this as an application for tailored discovery under r 8.8 of the High Court Rules. The defendants apparently do not require the plaintiffs to make discovery.

[9] Standard discovery would be disproportionate. The issues are confined and discovery should also be confined. Potentially, under standard discovery a huge number of documents might be required. I emphasise, however, that I intend to keep the discovery focused.

Documents relating to who is developing 20A and 20B Selwyn Avenue, Mission Bay

[10] These documents are said to be relevant to establishing who is liable for the trespasses by the truck drivers. In Cashfield House Ltd v David and Heather Sinclair Ltd Tipping J said:³

1. A principal has no vicarious, i.e. secondary, liability for the negligence of an independent contractor on the basis that the activity involved is a particularly hazardous one or on any other basis.

2. The principal may nevertheless in some circumstances owe a primary non-delegable duty of care and thus be liable to those to whom the independent contractor is liable if the independent contractor is negligent.

3. The principal may well also owe a primary duty of care to those who could foreseeably be damaged by the acts or omissions of the independent contractor.

[11] There is no pleading that any of the defendants owed a primary duty of care to the plaintiffs to ensure that the trucks coming to the building sites did not trespass. So the question may instead turn on whether any of the defendants can be liable under non-delegable duties. There is no hazardous activity which could trigger imposing a non-delegable duty. A possible route for liability is that the defendants, as neighbouring landowners, with shared use of a right-of-way, may be liable to the plaintiffs if their visitors use the part of the driveway which they are not permitted to use. That may involve an extension of the case law where neighbouring landowners

³ Cashfield House Ltd v David and Heather Sinclair Ltd [1995] 1 NZLR 452 (HC) at 465.

have been held to owe non-delegable duties, but the matter is at least arguable. That requires consideration of who might be liable under such a non-delegable duty.

[12] 161 Tamaki Drive Ltd as the landowner has the benefit of the easement, that is, it owns the dominant tenement. Mr Blanchard says, however, that the other defendants may be potentially liable. I do not see how under a non-delegable duty line of argument they could be liable only as shareholders of 161 Tamaki Drive Ltd or as a director of the company. It may be that, notwithstanding the ownership of the property by 161 Tamaki Drive Ltd, either Mr Jones or the Jones trustees are the developers who are carrying out a development with the licence of the landowner. The matter can be clarified by discovery.

[13] Potentially, a huge number of documents could be discoverable under this head. It might require a protracted search for documents. I put to counsel that there may be a simple way of finding the identity of the developer: the defendants should disclose their applications for building consent which will state the owners. That is because under the Building Act, it is important that the owner be identified.⁴ The owner engages the contractors and, through them, any sub-contractors. That provides an easy method of identification. I require the defendants to disclose the application for building consent and the building consent for both 161 Tamaki Drive Ltd, and for 26 Selwyn Avenue. I shall explain later why I require the documents for 26 Selwyn Avenue to be disclosed. All the documents for building consent applications do not need to be disclosed, only those parts of the documents which show the application, the building value and the identity of the owner. That is the minimum disclosure required of the defendants under this head.

[14] If the defendants contend that the building consent application does not show the complete picture, they will be under a wider duty to disclose all documents which may be relevant to identifying the developer. For example, if the building consent application identifies Mr Jones as the developer but the defendants wish to say “That is not the case. He is not really the developer. Instead the true developer is 161 Tamaki Drive Ltd”, the defendants will need to disclose fuller documentation to establish who

⁴ See Building Act 2004, definition of “owner” in s 7, and s 14B.

is the developer. That may, for example, include minutes recording decisions of trustees and financial statements. To the extent that confidential records are disclosed, the defendants will be able to claim confidentiality and have it protected. But it will not release them from disclosing those documents.

Documents relating to invoices and delivery slips for the development of 20A and 20B Selwyn Avenue

[15] The plaintiffs say that these documents are relevant to establish whether there are trespasses, and the extent of those trespasses. They point to the dispute as to the frequency of trespass. Their case is that trespasses by trucks are more often than the defendants are prepared to allow. They say that the part of the driveway which trucks accessing the 161 Tamaki Drive site can use is only 2.68 metres wide. Vehicles and trucks accessing construction sites are typically heavy and truck-drivers are not always careful to make sure that they stay on the right side of line and to heed the notice that Mr Jones has already put up, telling them where they should drive.

[16] There is also a dispute as to the destination of trucks using the driveway as developments are taking place on both 26 Selwyn Avenue and 20A/B Selwyn Avenue. It is important to keep a sense of proportion. The fact of some trespasses is acknowledged by the defendants. There is a question as to the extent to which vehicles using the driveway are accessing the 20A/B site as opposed to the 26 Selwyn Avenue site. I am not confident that an analysis of invoices and delivery dockets will necessarily give great insight into that. And I am not sure that a full analysis of invoices and delivery dockets is required for this case. In my view, a simpler approach is available.

[17] In my view, it is reasonable to infer that truck drivers accessing the building sites at the end of the driveway are likely to apply the same attention or lack of attention to whether they keep away from the 24 Selwyn Avenue part of the driveway. The building applications for both developments should enable any experts retained by the plaintiffs to work out the kinds of vehicles likely to access the sites. The nature of the construction is likely to give a better indication as to vehicles that might come to the site. The applications, which will show plans and the values of the works, will give data to work out the relative proportions of vehicles accessing the 161 site, as
opposed to the 26 Selwyn Avenue site. Greater analysis of invoices and delivery slips seems to be taking matters too far with what overall is a relatively modest dispute.

[18] There is one basis on which the plaintiffs could ask for delivery dockets. If they want to go down this route they should signal it. The plaintiffs are proposing that damages be fixed as one sum payable for use of their right-of-away. Another way may be to make a charge per trip. If there were to be a claim for a charge per trip, it will be necessary to find out how many trips and delivery dockets would be required for that. Any charge per trip is likely to be modest. I note that the toll charge for trucks on state highways where tolls are charged is $4.70 per trip. It is unlikely that the charge per trip for use of the 24 Selwyn Avenue share of the driveway could be more than that charged on state highways. If there were a thousand trips, the amounts would still be within the jurisdiction of the Disputes Tribunal. If the plaintiffs want to claim for wrongful use on the basis of a charge per trip, they should advise the defendants within 10 working days. The defendants will then be required to obtain all the delivery dockets in their control and under the control of the contractors and the sub- contractors, and to disclose them. Mr Blanchard indicated that a full list of documents need not be provided. They could be bulk-listed and handed over in a box.

Documents relating to budgeted costs of the development at 20A and 20B Selwyn Avenue, Mission Bay

[19] The plaintiffs seek these documents because they want to follow an approach Barker J took in Roberts v Rodney District Council. In that case the district council built a pipeline on the plaintiff’s property without consent. Barker J took into account the savings to the council in running a pipeline over the plaintiff’s property instead of taking a longer route. The plaintiffs propose that in this case the costs saved should be taken into account.

[20] I do not regard that as appropriate for this case. That is because there does not seem to be any realistic alternative to using the driveway to access 20A and 20B Selwyn Avenue. Mr Blanchard suggested that materials for the site could be loaded onto smaller vehicles and taken along the driveway. Given modern construction practices, that sounds implausible. I find it hard to consider how concrete could be delivered other than in conventional concrete trucks. The fact is that carrying out the
developments on 26, 20A and 20B Selwyn Avenue requires the driveway to be used. It seems to be an unavoidable but unfortunate effect of use of the driveway that trespasses have occurred from time to time.

[21] If lump sum compensation for wrongful use is to be awarded, the approach seems to be similar to that the courts have applied in land-locked land cases. Here I refer to the decision of Prichard J in Jacobsen Holdings Ltd v Drexel:⁵

I think, therefore, that in a case such as this the willing buyer-willing seller concept must be applied in the way described by Cooke P — by envisaging a friendly negotiation between fair-minded people who are in the situation in which the plaintiffs and the first defendant find themselves, who are willing to consider all factors of benefit or detriment to either side, taking due account of the benefits which will accrue to the plaintiffs but assuming, at the same time, that the first defendant is not an unprincipled opportunist with no thought except to capitalise to the fullest possible extent on the plaintiffs' dilemma. I would expect a fair-minded person in the first defendant's position to be content to hold out for a moderate rather than an extortionate windfall from the plaintiff's predicament. By the same token, I would expect a fair-minded person in the plaintiffs' position to be conscious of the fact that he was seeking an advantage in no way commensurate with the first defendant's almost negligible detriment and so to be prepared to agree on a figure considerably in excess of the value of the land affected by the right-of-way.

That was said in the context of a plaintiff taking an easement which would continue on a permanent basis. This matter, on the other hand, is for limited use. Notwithstanding that, it is guidance how the court can approach fixing a sum for wrongful use of the plaintiffs’ share of the driveway.

[22] Given those matters, I do not see that it is necessary to require the defendants to provide all the budgeting costs for the development. Undoubtedly very extensive developments are taking place on 161 Tamaki Drive Ltd’s land and on the trustees’ land at 26 Selwyn Avenue. That would be apparent from the purchase price for the land, which is publicly available, and from the costs of works shown in the building consent applications for both properties. But more than that is not required. To establish an amount payable for wrongful use it will not be necessary to go into a detailed analysis of the costs of the development and any likely profit to be made on sale. It will be sufficient to show that there are high-end apartments being built on the 161 Tamaki Drive land and that the benefits will far outweigh any detriment to the

⁵ Jacobsen Holdings Ltd v Drexel [1987] 2 NZLR 52 (HC) at 54.

plaintiffs in trucks accessing the 161 site, and occasionally moving onto the 24 Selwyn Avenue share of the driveway.

Documents relating to arrangements with the owners at 18 Selwyn Avenue

[23] The defendants negotiated an agreement with the owners of 18 Selwyn Avenue (the Poly Wealth Trust) which resulted in 161 Tamaki Drive Ltd agreeing to a height restriction for its development and the right-of-way being widened. That was done to meet resource consent requirements as to driveway width. The defendants also refer to it as showing that this will not be a long-term problem. They also say that if they had known about the plaintiffs’ concerns at the outset they might have negotiated something along the same lines. Updating evidence has shown that the easement that was registered in September 2017. In evidence handed up today there is also evidence of a boundary adjustment with 18 Selwyn Avenue under which it has taken land under a boundary adjustment which may allow it to carry out further development work on its property.

[24] For this proceeding, the plaintiffs want to go further. They want to see evidence of the negotiations. Again, given what is in issue in this case, I do not regard such discovery as necessary. The defendants and the Poly Wealth Trust have apparently negotiated arrangements, as can often happen with neighbours who are each keen to see how they can develop their properties to their advantage. It is invariably a process of “horse-trading”. The results are apparent from the documents in evidence. It is unnecessary to see what the bargaining process was. It is of no more than peripheral interest for establishing what compensation should be awarded to the plaintiffs. I accordingly do not direct discovery of documents under this head.

Outcome

[25] I direct the defendants to make disclosure of the building consent applications and the building consents for both 161 Tamaki Drive and 26 Selwyn Avenue. The defendants will also be required to provide copies of delivery dockets for the development at both 20A and 20B Selwyn Avenue and 26 Selwyn Avenue if the

plaintiffs require them within 10 working days. The defendants are to file and serve an affidavit of documents within a further 10 working days after that.

[26] The plaintiffs will need to file and serve an amended statement of claim in which they are to provide further and better particulars of the damages that they seek. They should clarify their election whether to seek compensatory damages or wrongful use damages and they should show the amounts of damages they seek in each case.

[27] This hearing has been very much an extended case management conference to establish the scope of tailored discovery. It is not appropriate to award costs either way. I reserve costs, to be decided later.




.....................................

Associate Judge R M Bell