STREET v REX ALISTAIR FOUNTAINE [2018] NZCA 55

STREET v REX ALISTAIR FOUNTAINE [2018] NZCA 55 [19 March 2018]IN THE COURT OF APPEAL OF NEW ZEALANDCA539/2016[2018] NZCA 55BETWEEN CHRISTOPHER JOHN STREET, PHILIPJOHN ENGLAND, MICHAEL JOHNSTREET AND JOAN ISABELLA STREETAppellantsAND REX ALISTAIR FOUNTAINEFirst RespondentASHBY DOWNS LIMITEDSecond RespondentANZ BANK NEW ZEALAND LIMITEDThird RespondentCA617/2016BETWEEN REX ALISTAIR FOUNTAINE ANDASHBY DOWNS LIMITEDAppellantsAND CHRISTOPHER JOHN STREET, PHILIPJOHN ENGLAND, MICHAEL JOHNSTREET AND JOAN ISABELLA STREETRespondentsHearing: 8, 9 and 10 August 2017 (further submissions 3, 10 October and 4December 2017)Court: French, Winkelmann and Gilbert JJCounsel: D J Goddard QC and R K Macdonald for AppellantsT G Stapleton QC for RespondentsJudgment: 19 March 2018 at 10.30 amJUDGMENT OF THE COURTA The appeal against the substantive judgment of Clifford J is allowed.B The Street Trustees are entitled to orders as set out in [154]–[155].C The costs orders made in the High Court are quashed.D Costs in the High Court are fixed on the basis that the Street Trustees areentitled to costs calculated on a band 2B basis, together with disbursementsto be fixed by the Registrar of the High Court.E The respondents must pay the appellants costs for a complex appeal on aband A basis and usual disbursements. We certify for two counsel.____________________________________________________________________REASONS OF THE COURT(Given by Winkelmann J)Table of ContentsPara No.Introduction [1]The issues on appeal [10]Factual backgroundThe creation of the scheme [14]Easement over Maungahuia [26]The upgrade of the scheme in 1993-1994 [28]Tensions [30]High Court judgment [33]First issue: did the Judge err in finding there was no enforceableagreement to grant easements in relation to scheme infrastructurelocated on Waikaramu and The Downs?Legal principles: easements [43]Did Mr John Fountaine agree to grant an easement over Waikaramuin 1971–1972 and, if so, is that agreement enforceable?[53](a) Documentary record [55](b) Conduct of the parties [76](c) Oral evidence [83](d) Conclusion on whether Mr John Fountaine agreed to grant aneasement over Waikaramu in 1971[89](e) Was there sufficient consideration? [90](f) Were there sufficient acts of part performance? [92](g) Did Mr John Fountaine have sufficient interest in the land togrant an easement?[97]Did Mr James Ashby agree to grant an easement over The Downs in1971–1972?(a) The basis of the claim [101](b) Analysis [105]Were easements agreed to in respect of the scheme as modified in1993–1994?(a) The basis of the claim [110](b) Analysis [117]Second issue: did the Judge err in finding that the respondents werenot estopped from denying the existence of such easements?Relevant principles [133]The issues [135]Third issue: if there is an equitable easement or easements, whatrelief if any is appropriate to give effect to these easements?Submissions [147]Orders [154]Fourth issue: if there is no equitable easement, what other equitablerights and obligations exist in relation to scheme infrastructure, andwhat relief is appropriate?[157]Costs appeal [158]Result [161]Introduction[1] In the early 1970s a group of farmers in the Wairarapa worked together toestablish a scheme to provide stock water to farms in the immediate vicinity ofthe Ahiaruhe stream. The scheme collected water from the Ahiaruhe stream andcarried it through a series of pipes to the points of use. Although ownership of manyof the farms within the scheme has changed since that time, the scheme remains inoperation today. It supplies, or has the capacity to supply, stock water to farmproperties, including properties owned by the appellants, the trustees ofthe Street Trust (the Street Trustees).[2] The original point of collection for the scheme was on land known as Aranuibut in 1993–1994 it was moved to a farm, Waikaramu, as part of an upgrade to improveperformance. Waikaramu is owned by Mr Rex Fountaine, the first respondent,although at the time the scheme was created it was occupied by his father,Mr John Fountaine, who had been farming Waikaramu since 1949.[3] Water pipes for the scheme are located on The Downs, a farm owned by thesecond respondent, Ashby Downs Ltd. In the 1970s Mr James Ashby ran the farmingoperations on The Downs. Today, his sons Michael and Richard work together to farmthat land.[4] At issue in this proceeding is whether there are easements supportingthe presence of the scheme infrastructure on Waikaramu and The Downs. Tensionsbetween the users of the scheme have flared from time to time, but began tosignificantly escalate in the last decade, with a dispute ultimately developing as tothe basis on which the scheme's infrastructure was on Waikaramu and, to a lesserextent, The Downs. Was it pursuant to an easement, or some other arrangement,characterised by the respondents as a gentlemen's agreement terminable at pleasure?[5] The Street Trust is Mr Christopher Street's family trust. It brought theseproceedings seeking declarations as to the legal basis on which the scheme operatesand consequential orders. The Street Trustees' primary contention is that Waikaramuand The Downs are each subject to unregistered (equitable) easements in respect ofthe scheme infrastructure in favour of Trust land, and the Trust therefore has a right ofaccess to the land for the purposes of maintenance and repair. These easements areclaimed to arise from either agreement or estoppel.[6] The respondents say that the infrastructure is on their farms at their pleasurepursuant to a gentlemen's agreement. They say there are no easements, legal orequitable, and no other legally enforceable rights protecting the scheme users' abilityto operate the scheme across their land.[7] In a judgment dated 3 October 2016, Clifford J dismissed the Street Trustees'claim for an easement in respect of Waikaramu.1 The Street Trustees now appeal thatdecision on the grounds that the Judge was wrong in a number of his factual and legalfindings. It also says that he failed to address and resolve all the pleaded issues beforehim. He did not address or resolve the Street Trustees' claim to an easement in respectof The Downs, and he did not address the argument that, if there was no easement(which was his finding), the Court should nevertheless grant some other form ofequitable relief.[8] The Street Trustees produced a schedule of factual errors allegedly made bythe Judge. The respondents say any errors by the Judge were inconsequential. We aresatisfied that most of the factual matters included within that schedule were of no1 Street v Fountaine [2016] NZHC 2343 [HC judgment].consequence to the Judge's reasoning or decision, and we do not therefore addressthem. Where we consider that any factual matter in the schedule is material, theallegation of factual error is addressed in the course of the judgment.[9] Mr Rex Fountaine also seeks to support the judgment on other grounds. Hesays the Judge could have rejected the claim to an easement on Waikaramu onthe additional ground that the farm was held under a licence in the 1970s and sothe Fountaine family did not have the ability to grant an easement.The issues on appeal[10] The easements claimed in respect of both The Downs and Waikaramu relate tothe scheme as modified in 1993–1994. The Street Trustees' case is that the schememodifications in 1993 and 1994 entailed an oral agreement to modify the existingequitable easement, introducing new infrastructure in the place of old but not alteringthe legal nature of the arrangements. The respondents accept that the 1993–1994scheme was a modification of the 1970s scheme but, on their case, both involved agentlemen's agreement and not an agreement to grant an easement.[11] It is therefore common ground that before deciding the issue of what wasagreed in 1993–1994, if anything, we must first address the nature of the initialarrangements for the scheme in the 1970s.[12] The issues for determination on this appeal are as follows:(a) Did the Judge err in finding there was no enforceable agreement,formed in the 1970s or in 1993–1994, to grant easements in relation toscheme infrastructure located on Waikaramu and The Downs?(b) If not, did the Judge err in finding that the doctrine of estoppel did notapply to create such easements?(c) If there is an equitable easement or easements, what relief, if any, isappropriate to give effect to those easements?(d) If there is no equitable easement over either Waikaramu or The Downs,what other (if any) equitable rights and obligations exist in relation toscheme infrastructure, and what relief is appropriate to give effect tothose rights and obligations?[13] The parties each also appeal against awards of costs made in the High Court.2Because of the view we take on the principal appeal, we do not need to addressthe costs appeals in any detail.Factual backgroundThe creation of the scheme[14] The Ahiaruhe stream rises from the Aranui spring on land called Aranui.It then flows across several other farms, including Waikaramu, until it joinsthe Ruamahanga river.[15] By the early 1970s, a number of water pumping pipeline storage systems werein place to extract and distribute water from the stream to nearby farming properties.In 1971 Mr Burns, who controlled Aranui Land Co Ltd (the owner of Aranui) proposeda scheme to take water from the stream to irrigate farms outside the Ahiaruhewatershed.3 These proposed users were referred to in the course of this litigation asupstream owners or users, and the scheme that was eventually installed to service themwas called the upper scheme. We adopt those descriptors.[16] Several farmers with land downstream from Mr Burns' property objected tothis proposal. They were concerned that allowing those who did not have the streamflowing across their land to draw from it would deplete the stream, leaving insufficientwater flow for stock purposes and perhaps for the operation of the existing pumps.Those objecting to the development of the upper scheme included Mr John Fountaine(Waikaramu), Mr James Ashby (The Downs) and other land owners, the Riddells. Atthe time, the Riddells were owners of a large farm which bordered both sides of a roadlocated within the scheme — Millars Road.2 Street v Fountaine [2016] NZHC 2670 [Costs judgment].3 Namely farms which did not have the Ahiaruhe stream passing through them.[17] Notes of meetings in early-to-mid 1971 record the downstream farmers'concerns and their intention to object to the scheme unless their current and futurerequirements for water for their stock could be fully safeguarded. The downstreamfarmers' position was that the upstream owners should instead seek their water supplydirect from the Ruamahanga river.[18] These objections spurred Mr Burns to seek legal advice on the downstreamfarmers' ability to object, advice which he passed on to them. The advice he obtainedwas that under the recently enacted Water and Soil Conservation Act 1967, it wasunclear whether the downstream owners could take any action to prevent the upperscheme from proceeding. Nevertheless, the lawyer advising Mr Burns tended to theview that any person, and not just riparian owners, could now take whatever quantitiesof water they reasonably needed for stock and domestic purposes and that "lowerriparian owners do not now have any rights if their supply of water is diminished".[19] It was probably after this advice was distributed that those involved in thisissue agreed to seek the assistance of the Wairarapa Catchment Board to resolve theirdifferences. The affected parties met with representatives of the Wairarapa CatchmentBoard — in particular, the Chief Engineer, Mr Mahoney. The precise number anddates of these meetings is unclear.[20] Mr Ross Heveldt, a farm advisory officer with the Ministry of Agriculture andFisheries, designed a new water scheme for downstream owners. He produced a WaterSupply Feasibility Report, outlining the scheme which could provide stock watersupply to three farms — The Downs, and the McGrath and Riddell farms, all farms inthe area. His plan allowed for the addition to the scheme of a farm owned by otherlandowners in the area, the Nelligans.[21] The scheme — we refer to it as the lower scheme — as originally conceivedinvolved:(a) A pipeline from the source of the Ahiaruhe on Aranui (Point A) to apoint (Point B) on the boundary between Aranui and The Downs.(b) From Point B, separate pipelines were to go:(i) Over The Downs and onwards to the McGraths'; and(ii) Over The Downs, onto the Riddells' land and onwards, underMillars Road, onto the continuation of the Riddells' land on theeastern side of Millars Road, and from there onwards to theNelligans. This branch is sometimes referred to as theMillars Road scheme but it is in fact just a part of the lowerscheme.[22] Following this report, agreement was reached that the downstream andthe upstream farmers would take stock water from the same source on theAhiaruhe stream to service the newly proposed lower scheme alongside the upperscheme. If taken from the source in this way, use could be managed to ensure fair andsufficient supply for the upper and lower scheme users and downstream farmers. Thelower scheme users would not be left with the dregs after upstream users had drawnoff their water and the Catchment Board could arbitrate rate of flow to ensure thestream did not run dry. The upper scheme would be a pumped scheme and the lowerscheme would rely on gravity for water flow. This agreement was recorded in a letterfrom the Catchment Board to all those involved in December 1971. The precisemeaning of that December letter is one of the critical issues in this litigation.[23] We pause to note that there were several aspects to the lower scheme. Therewas an arrangement of some sort to allow pipes to be laid on the land to enablethe scheme to operate. The nature of this arrangement is at the heart of this litigation.There was also an agreement as to the rate at which water could be drawn and,separately, an agreement as to the mechanism for setting those rates in the future.4There may have been an agreement that the water drawn was to be used for stockpurposes only, although that issue was not the subject of argument before us and is notan issue we need resolve.4 It was agreed that the Board would arbitrate as to reasonable levels for drawing water by all parties,should issues arise in the future.[24] The lower scheme was installed over the next year or so, and was completedby the end of 1973. Those involved in installing and paying for the scheme wereMessrs Ashby, McGrath, Riddell, Nelligan and other owners, the Andrews.The Fountaines did not contribute to the cost of the scheme, as they did not draw waterfrom it. The lower scheme as installed differed from Mr Heveldt's original plan tothe following extent. Point B, the point at which two pipes branched off, was shiftedfurther onto The Downs. Secondly, whereas the original plan was that the pipebetween Point A and Point B would be laid on Aranui, as constructed, the pipe betweenPoints A and B deviated briefly onto Waikaramu. This deviation was necessary toenable the gravity-fed lower scheme to work. We attach a plan of the scheme as builtin 1973 [Appendix A].[25] The upper scheme pipeline and the lower scheme pipeline over Aranui andWaikaramu were surveyed and the combined survey plan was registered asDeposited Plan 35275. The Plan was entitled "Plan of Pipeline Easement". It iscommon ground that whilst easements were registered in respect of the upper scheme,none were registered against the titles of either The Downs or Waikaramu in respectof the lower scheme.Easement over Maungahuia[26] In 1982 the Riddell land was sold to the MacPhail Trust. Over time,Mr Doug MacPhail subdivided the land, creating a farm on the western side ofMillars Road called Maungahuia. The five blocks of land on the eastern side werelater bought by the Street Trustees in three separate purchases (in 1998, 2006 and2009).[27] In 1989 Mr MacPhail granted an easement over Maungahuia for water pipes,seemingly to ensure continued access to water for the parcels of land on the easternside of the road, the land now owned by the Street Trustees. The Fountaine familyacquired Maungahuia from Mr MacPhail in 1997, subject to the registered easementover the property in favour of the land on the eastern side of the road.55 Maungahuia was acquired by the trustees of the Maungahuia Fountaine Trust.The upgrade of the scheme in 1993–1994[28] It is clear from the evidence that Mr James Ashby was a meticulous recordkeeper. He recorded in his diary the work done on the water scheme by downstreamowners, as well as accounts paid in respect of the scheme. His diary notes reflect thatfrom early on there were performance issues with the scheme, with the rate of flow apersistent issue. Although various remedial steps were taken, none seemed to solvethat issue. In 1993–1994 the scheme was upgraded to address these concerns.The upgrade resulted in the construction of a new concrete weir in the streambed ofWaikaramu, which, as we understand it, was the new point of collection for the lowerscheme with new pipelines to a new concrete settling/header tank also on Waikaramu.From there, two new separate long-distance pipelines were constructed — one(50 mm) to The Downs and one (40 mm) to Maungahuia. It is this second pipeline,the 40-mm pipeline, which provides stock water to the Millars Road part of the lowerscheme. We attach a plan of the scheme as modified in 1993–1994 [Appendix B].[29] There is no written record of any agreement to modify the 1971 arrangementsto provide for the upgrade. The upgrade involved substantial work and expense butagain, as in 1971, no easements were registered.Tensions[30] Mr MacPhail managed the 40-mm pipeline (Millars Road) part of the scheme.Tensions flared from time to time between Mr MacPhail and the Fountaines aboutaccess to Waikaramu to service the scheme. Access was along a narrow single lanefarm track with poor visibility and the Fountaines had safety concerns about peoplecoming onto the property without adequate notice.[31] The Ashbys and Fountaines were also concerned about a major upgrade ofthe scheme undertaken by the Street Trustees in 2008. The Ashbys and Fountainesbelieved they should have been consulted about these changes to the scheme.Although the upgrade was to the part of the scheme located on Trust land, the Ashbysand Fountaines believed it had potential to affect the stream and the performance ofthe scheme for other users. As such, they believed the upgrade should have beendiscussed with them.[32] Mr MacPhail retired from management of the scheme in 2008, and at that pointMr Christopher Street became more actively involved. Tensions escalated, againfocusing on issues of access. Mr Street bridled at the notion of having to seekpermission to access the infrastructure on Waikaramu, access he regarded as anancillary right attaching to an easement which supported the presence of thatinfrastructure.High Court judgment[33] Clifford J summarised the case before him for the Street Trustees as being aclaim to equitable easements over Aranui, Waikaramu and The Downs.6 Asthe Street Trustees point out, the Judge was mistaken in this because theStreet Trustees neither asserted rights nor sought relief over Aranui. They did howeverclaim an easement over The Downs, a claim the Judge failed to address, insteadfocusing upon the claim to an easement over Waikaramu.[34] The Judge identified a letter from the Catchment Board of December 1971 andthe background to it as critical to the Street Trustees' claim in respect of Waikaramu.7It is convenient to set that letter out in full:This letter is to record the mutual agreement reached between the upstreamand downstream owners in the Ahiaruhe Valley with regard to water use forstock purposes.The original difference arose when the upstream owners planned to take waterfrom a spring on Mr Burns' property and pump it outside the catchment toother properties by easement for stock and domestic use, and the downstreamowners were concerned that this action would jeopardise their existing supplyderived from the stream bed. Both parties felt they had legal rights to theircontentions, but rather than have these argued at law the upstream ownersagreed to assist without prejudice the downstream owners to establish acommunal supply to their properties and thus ensure a compromise thatprovided for all.A committee was set up to finalise details, and it has now been agreed that theupstream owners will contribute $900 towards a communal supply this to takethe form of supplying and laying a 2" pipe from an agreed point in the streamon Mr Burns property to an agreed point on Messrs Ashby's and Burn'sboundary. The pipe is to be buried a minimum of 18" in the ground and asimple inlet constructed to tap the stream and provide a full pipe flow.6 HC judgment, above n 1, at [4].7 At [23].Messrs Fountaine and Burns have agreed to an easement over their land forthe pipe, and the survey for the easement shall be financed or partly financedby the upstream owners to the extent their costs of establishing the pipe fallsshort of $900.The Board shall be the arbiter as to the reasonableness of the costs incurred ininstalling the supply and the easement shall be instituted by the upstreamowners.The easement shall be finally legalised by and to the benefit of the users whoshall also be responsible for maintenance in a manner to be prescribed.The Board shall also arbitrate as to reasonable water withdrawals by all partiesin the future bearing in mind the total surface flows available to ensure anequitable allocation.In turn, the downstream owners will allow the listed upstream owners to drawup to 30.1 gallons per minute from the spring referred to.The Board will act as general arbiter in all cases of lack of agreement, and itsdecision will be binding on all parties.The following are the parties to and areas contemplated as being served withwater in terms of this agreement.UPSTREAM OWNERS: Property Area ServedAranui 1,200 acresTokoroa 1,300 acresMr Ellis 200 acresMessrs Snell Bros. 450 acresMr Paton 450 acres3,600 acresDOWNSTREAM OWNERS:Mr Ashby 730 acresMr McGrath 80 acresMr Riddell 840 acresMr Nelligan 370 acresMr Andrews 180 acres2,200 acresThis mutual agreement was made to cover the above parties and areas and thementioned draw-offs but otherwise without prejudice to any group orindividual's rights and does not purport to be an interpretation of the law withrespect to water rights.Yours faithfully,P.G. MAHONEY,CHIEF ENGINEER.[35] The Judge addressed whether this and other matters relied upon by theStreet Trustees evidenced an agreement on the part of Mr John Fountaine to aneasement. In respect of the documentary record he concluded:[68] First, the Catchment Board 24 December 1971 letter purports, on itsface, to be the record of an agreement between the Upper and Lower Owners.Other than the reference to Mr Fountaine having agreed to grant an easement,Mr Fountaine himself is not referred to in the letter, and the letter writer doesnot purport to write to, or on behalf of, Mr Fountaine. Moreover, the letterwriter had no authority to do so.[69] The other, very brief, references in the documentary record toeasements add little if anything. The most they establish is the possibility thatthere may have been discussions – whether involving Mr Fountaine or not isunclear – amongst the Lower Owners about an easement. If those discussionsdid occur, that was more likely than not when, in the context of the Mr Burns'agreement the Lower Owners were to have an easement over Aranui toPoint B, it was realised that a brief diversion onto Waikaramu was desirable.[70] But that is far from establishing, on the basis of that documentaryevidence, that Mr Fountaine had ever agreed to that proposal.[71] Nor is there any evidence available as to what was meant by thosevarious documentary references at the time.[36] He said the letter was written against the background that the proposed schemedescribed in the letter was not on, and nor did it service, Waikaramu.8 The Judgenoted, however, that installing the scheme would involve use of a Waikaramufour-wheel-drive access road, as that was the most convenient way to access bothwhere the Ahiaruhe stream rose and Point B, from which the separate pipelines wouldgo to the two branches of the lower scheme.9 Similarly, he said maintenance of the8 At [22].9 At [22].lower scheme, particularly prior to the development of relevant parts of Aranui andThe Downs, could most conveniently be undertaken using that access road.10[37] On one reading of the judgment, the Judge proceeded on the basis that it wasonly as the lower scheme was being installed that it became apparent it could not becompleted in terms of the feasibility plan and that to achieve an adequate flow toPoint B, the pipeline had to deviate into Waikaramu. It is fair to say however that thejudgment is not clear on this factual issue.[38] The Judge then discussed the oral evidence he had heard. He noted that noneof the individuals involved in the discussions in 1971 survived.11 Nevertheless heheard evidence from Mr Rex and Mrs Shona Fountaine, and the Ashby brothersRichard and Michael (the next generation on from Mr John Fountaine andMr James Ashby) of their understanding of the agreement. Mr Rex andMrs Fountaine's evidence was that Mr John Fountaine would never have agreed togive an easement to the users of the lower scheme.12 Rather, he had agreed that, withappropriate notice, the lower owners could get to the lower scheme via his land, andin particular, the Waikaramu access track.13 Later, when the scheme was constructed,it is argued that he entered into a gentlemen's agreement to allow a short section ofpipe to be buried on Waikaramu.14[39] The Judge gave weight to this evidence. He concluded in respect of it:[77] I accept that, on that matter and indeed more generally, the Fountainesand the Ashbys were honest, that is, credible, witnesses. By my assessment,they were not fabricating or embellishing the narrative they provided,including as regards the rights of the users of the Lower Scheme. That is notto say, of course, that their narrative was at all points fully accurate orcomplete. They themselves recognised that, with the passage of time, detailscould have been lost or misinterpreted. But that recognition did not lead meto conclude that they were in any material way unreliable witnesses. Theirunderstanding, based on what their parents had told them and based on theirown participation as farmers, was that the Lower Owners accessed Waikaramufor the purposes of the Lower Scheme on notice to Mr Fountaine, with hispermission and subject to appropriate terms and conditions. Given that, whenthe Lower Scheme was first established, only a short section of the pipe was10 At [22].11 At [72].12 At [74].13 At [74].14 At [74].in fact on Waikaramu, and the great majority of it was on The Downs andMaungahuia, it can easily be understood why a group of local owners did notsee easements as being necessary.[40] The Judge saw the dealings around the 1993–1994 modifications to besupportive of the view that there was no agreement in 1971 to grant easements. Hesaid:[78] The circumstances surrounding the modification of the LowerScheme in 1993-1994 are of considerable evidential significance in thiscontext. At that time, by far the greater part of the infrastructure for the LowerScheme, as it served both The Downs, Maungahuia and the land on the easternside of Millars Road, was – for the first time – located on Waikaramu. Thereis no evidence of an easement over Waikaramu being discussed, let aloneagreed at that time. If the original arrangement had been that Mr FountaineSenior agreed to grant an easement over Waikaramu, then the incentive for theLower Owners to pursue that arrangement, and register that easement, wasconsiderably greater at that time. That the Lower Scheme was modified,without that happening, in my view points to the absence of any agreementfrom Mr Fountaine Senior to grant any such easement, whether in 1971 or in1993-1994.[41] He therefore concluded that the Street Trustees had not established theexistence of an agreement to grant an easement in respect of Waikaramu.15[42] The Judge identified further obstacles to the claim — an absence of valuableconsideration and insufficient acts of part performance to render any agreementaffecting the land enforceable.16First issue: did the Judge err in finding there was no enforceable agreement togrant easements in relation to scheme infrastructure located on Waikaramu andThe Downs?Legal principles: easements[43] The issue between the parties is the nature of the relationship created bythe parties' dealings in the 1970s, and then again in 1993–1994. As we come to,Mr Stapleton QC, for the respondents, resisted ascribing the label of licence to thosearrangements. He preferred to describe them as a "gentlemen's agreement" terminableat pleasure. However, in argument before us Mr Stapleton accepted this agreement15 At [79].16 See [80]–[82].did create legal rights for lower scheme users to have the infrastructure on the Ashbys'and Fountaines' land, and legal rights for lower scheme users to go on the land withnotice to service the scheme. These rights, he conceded, continued until they wereterminated. As to the circumstances giving rise to a right to terminate, he adopted theevidence of Mr Rex Fountaine that they could terminate "if we felt at risk".[44] The critical issue is whether the dealings in the 1970s, and then again inthe 1990s, created only personal rights which we consider are properly described as alicence (although the language does not matter) or rather, as the Street Trusteescontend, equitable easements which passed with the land?[45] The relevant principles governing the creation of an easement are not indispute. A registered easement is a legal easement. An equitable easement creates aninterest in land which is registerable (but not registered), but can nevertheless beprotected by a caveat. Successors in title obtain the benefit of, and are subject tothe burden of, an easement subject to the usual rules as to indefeasibility of title ifthe easement is not protected by the registration of a caveat. No issue as toindefeasibility of title has been pleaded or argued in this proceeding.[46] An easement is an orthodox mechanism for protecting significant interests inperpetuity. The Land Transfer Act 1952 and Land Transfer Regulations 2002 providedefault terms that apply to registered easements unless modified by agreementbetween the parties.17 They expressly address default terms for the classic (in the senseof the most common) easements for the passing of services over land such aselectricity, gas and water pipes, or for rights of way.[47] In contrast, a licence does not grant any interest in the land. The benefit of alicence does not pass to successors in title of the licence, nor bind successors in titleto the land. A licence is a personal, contractual arrangement which providespermission to a party to do an act on land that would otherwise be a trespass.18 A merelicence is not registerable and cannot be protected by caveats. It is therefore usually17 See Land Transfer Act 1952, s 90D(1); and Land Transfer Regulations 2002, reg 10 and sch 4.18 See DW McMorland and others Hinde McMorland & Sim Land Law in New Zealand (loose-leaf ed, LexisNexis) at [18.001].terminated on change of ownership of the relevant land. There are no standard ordefault terms that apply to a licence so the terms will be those agreed by the parties.Licences are revocable as the parties agree but otherwise at will. For all these reasons,licences are not generally suitable for multi-party arrangements as they createdifficulties when there is a change of ownership in either the licensee or the licensor.Easements are the usual mechanism employed where there are to be multiple partiesto one arrangement, including initial and subsequent owners of land.[48] As regards the essential characteristics of an easement, the followingrequirements must be met:19(a) there must be a servient tenement;20(b) the easement must accommodate the dominant tenement if there isone;21(c) the dominant and servient owners must be different persons;22 and(d) the right must be capable of being the subject-matter of a grant.23[49] The easements alleged to exist easily meet all of the essential requirements ofan easement: there are independently-owned dominant and servient tenements andthe nature of each easement is one capable of supporting a grant. The easements inquestion are for common services (water pipes and infrastructure) to be present on theservient land (Waikaramu and The Downs) for the benefit of the dominant land (theland which benefits from the lower scheme).19 Re Ellenborough Park [1956] Ch 131, [1955] 3 WLR 892 (CA) at 900; Attorney-General vHolland (2007) 5 NZ ConvC 194,480 (HC).20 See Woodman v Pwllbach Colliery Co Ltd (1914) 111 LT 169 (CA) at 172; and McMorland andothers, above n 18, at [16.003].21 However, this common law requirement is now subject to s 291 of the Property Law Act 2007,which permits easements "in gross".22 Bolton v Bolton (1879) 11 Ch D 968; Metropolitan Railway Co v Fowler [1892] 1 QB 165 (CA)at 171.23 See Re Ellenborough Park, above n 19, at 140; and McMorland and others, above n 18, at[16.006].[50] The most common way in which an equitable easement is created is byagreement to grant that easement. Three elements are essential:24(a) The right granted must have the essential characteristics of aneasement.(b) The agreement must be supported by valuable consideration.(c) There must be either a sufficient record in writing to satisfythe requirements of the Property Law Act 2007 (or in this case itsstatutory predecessor, s 2 of the Contracts Enforcement Act 1956), or asufficient act of part performance.[51] The critical issues in this case are, first, whether there were agreements to grantthe alleged easements, and secondly, whether those agreements were supported bythe necessary consideration and sufficiently evidenced by acts of part performance. Inorder to be successful, the Street Trustees must show part performance as it is notsuggested that there is a sufficient written record signed by either Mr John Fountaineor Mr James Ashby (on behalf of Ashby Downs Ltd) granting the easement forthe purposes of s 2 of the Contracts Enforcement Act.[52] There are some useful principles that can be gleaned from case law that assistin determining whether an arrangement is a licence or an easement:(a) If the essential elements of an easement are not present thenthe arrangement will be a licence rather than an easement.(b) The language used by the parties to describe the arrangement issignificant in determining whether there is an easement or a licence.However, it is not necessary for the parties to use the language ofeasement or licence.24 McMorland and others, above n 18, at [16.035].(c) An intention to bind successors in title indicates that the agreement isto grant an easement and not a licence,25 although a failure to refer toan intention to bind successors in title is not determinative against theexistence of an easement.26(d) The absence of a time limit or right to revoke the arrangement point toan easement.27(e) Guidance can be derived from a common-sense assessment ofthe arrangements. For example, the installation of expensiveinfrastructure in reliance upon the arrangement may tend to prove aneasement, as it is unlikely the parties would contemplate suchinvestment if it were short-term or revocable.(f) As noted, and relevant to the immediately preceding principle, certainarrangements represent the classic subject matter of easements, such asrights of way, storm water systems, utilities and water supply. That isbecause they are rights important to the use of the dominant land andare likely to be intended to pass with title to the land.Did Mr John Fountaine agree to grant an easement over Waikaramu in 1971–1972and, if so, is that agreement enforceable?[53] We are invited to revisit factual findings made by Clifford J on appeal. As iswell established, those exercising general rights of appeal are entitled to judgment inaccordance with the independent opinion of the appellate court, even wherethe opinion is an assessment of fact and degree.28 However, in determining whetherthe judgment was wrong, the appellate court will take into account any particularadvantages enjoyed by the trial court, especially where assessments of credibility andreliability are involved.29 At least in respect of the creation of the lower scheme, weare as well placed as the Judge to take a view on the evidence, as none of those who25 See for example Motor Holdings (Air Services) Ltd v Bryers (1985) 2 NZCPR 307 (HC) at 313.26 See McDonald v Peddle [1923] NZLR 987 (SC) at 990–991.27 Hart v Mitchell (2006) 7 NZCPR 588 (HC) at [41].28 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4]–[5].29 Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [31].were party to the discussions gave evidence. Just precisely what was agreed at thattime is best gleaned from the documentary record, which in our view provides strongevidence that Mr James Ashby and Mr John Fountaine agreed to grant easements overtheir land as necessary to support the lower scheme as it was installed in 1971–1973.[54] As we come to, we have concluded that the Judge made several errors in hisinterpretation of the evidence, which led him to erroneously conclude that there wasno agreement on the part of Mr John Fountaine to grant easements at the time ofthe creation of the lower scheme in 1971. The Street Trustees' are also correct that hedid not address their claim in respect of The Downs and so we must do that afresh.(a) Documentary record[55] We think it a safe conclusion that Mr John Fountaine attended at least one ofthe early meetings at which the downstream owners' concerns about the proposedupper scheme were discussed. He was one of the objectors, whose concerns werenoted in one of Mr James Ashby's diary entries. Mr James Ashby also notedMr John Fountaine's apology for one meeting, suggesting on-going involvement inthe issues.[56] We are also satisfied Mr John Fountaine was party to discussions at whichthe plan was agreed to create the upper and lower schemes and in this we differ fromClifford J. We have reached this view for a number of reasons.[57] First, as a matter of common sense, as one of the initial objectors, it is verylikely that Mr John Fountaine would be involved in discussions to resolve the issuesthat had arisen.[58] Secondly, in late 1971 the Chief Engineer of the Wairarapa Catchment Board,Mr Mahoney, provided a report to the Board to explain: discussions which have been held with the owners who wish to develop thescheme and the down stream owners who consider the scheme would interferewith their existing supplies from the stream.[59] The report, as summarised in the minutes of the Board meeting, describeddiscussions between the upstream owners and the downstream owners "who at presentrelied on the water for stock purposes". The minutes then record Mr John Fountaine'sagreement to an easement over his land for the pipe for the scheme. The simple pointto be made is that it is improbable the Chief Engineer would record agreement to aneasement unless he had grounds for believing that Mr John Fountaine had agreed tothat.[60] We are further reinforced in our view of the evidence by the letter sent inDecember 1971 by the Chief Engineer, written on behalf of the Catchment Board toproposed upper and lower scheme users, recording the "mutual agreement" reachedwith regard to the schemes. This is the letter we earlier set out in full at [34]. Werepeat the critical portion here for ease of reference:A committee was set up to finalise details and it has now been agreed thatthe upstream owners will contribute $900 towards a communal supply this totake the form of supplying and laying a 2̎ pipe from an agreed point inthe stream on Mr Burns property to an agreed point on Messrs Ashby's andBurn's boundary. The pipe is to be buried to a minimum of 18̎ in the groundand a simple inlet constructed to tap the stream and provide a full pipe flow.Messrs Fountaine and Burns have agreed to an easement over their land forthe pipe, and the survey for the easement shall be financed or partly financedby the upstream owners to the extent their costs of establishing the pipe fallsshort of $900.The Board shall be the arbiter as to the reasonableness of the costs incurred ininstalling the supply and the easement shall be instituted by the upstreamowners.The easement shall be finally legalised by and to the benefit of the users whoshall also be responsible for maintenance in a manner to be prescribed.The Board shall also arbitrate as to reasonable water withdrawals in the futurebearing in mind the total surface flows available to ensure an equitableallocation [61] The letter concluded with a list of those who would draw stock water from thescheme.[62] The report to the Board and the December letter provide strong evidence thatMr John Fountaine was not only party to the discussions and agreements but also that,in the course of those discussions, he agreed to grant an easement over Waikaramu tosupport the operation of the lower scheme.[63] In resisting this conclusion the respondents say several things about the letter.They say first that there was no evidence it was received by Mr John Fountaine, so itdoes not evidence his agreement. Secondly, a related point, the letter recordsagreement between scheme users. It is not a record of an agreement to grant aneasement over Waikaramu. Third, Mr Stapleton notes the letter refers only to an"easement", not easements, but Mr John Fountaine and Mr Burns did not own anyland jointly. Mr Burns did however jointly own land with a Mr Short, and it was thatland over which an easement was granted for the upper scheme. Mr Stapletontherefore argues, as we understand it, that reference to Mr Fountaine was a mistake.[64] While it is true that there is no direct evidence the letter was sent toMr John Fountaine, the inability to locate an addressed copy is easily explained bythe time that has passed since the letter was sent and received. It is very likely thatMr John Fountaine was sent a copy, as part of the group who were concerned regardingthe proposed upper scheme. After all, the letter recorded an agreement which wouldresolve the issues between upstream and downstream owners, includingMr John Fountaine's consent to an easement. It is plain from the covering letter thatthe Chief Engineer was keen to check that he had accurately captured this resolution.To do that, he had to send the letter to all affected by the agreed resolution. That beingthe case, we are satisfied he would have sent a copy of the letter to all ofthe downstream owners, including Mr John Fountaine.[65] In the unlikely event Mr John Fountaine did not receive a copy of the letter, itnevertheless provides good evidence of what had been agreed. The Chief Engineerinvited corrections to the letter. It is common ground the letter was sent toMr James Ashby, that he and Mr John Fountaine were friends, and thatMr James Ashby was a person punctilious in detail. Given this context, if the lettermisreported the existence of Mr John Fountaine's agreement to an easement it can besafely assumed that Mr James Ashby would have raised that. The only recordedresponse from Mr James Ashby suggests rather to the contrary. In his copy, there is ahandwritten notation which says:(1) Agreement to be signed that no further easements given with regards towater especially by upstream;(2) Explain the water available and take off.[66] This also answers Mr Stapleton's third point, that the Chief Engineer meant torecord Mr Short's agreement to an easement, not Mr Fountaine's. If such a mistakehad been made, it is highly likely Mr Ashby would have detected that error and raisedit with the Chief Engineer. There is no evidence he did.[67] We also see nothing in the respondents' second point — that Mr John Fountainewas not party to the agreement recorded in the letter as it just affected those who wouldbe drawing water from the scheme and whose names were listed in the agreement assuch. This seems to be the point the Judge was making also when he said the letter setout an agreement between the upper and lower owners.30 The flaw in this argumentis that the letter is not proffered as evidence of a written agreement to grant aneasement. Rather the Street Trustees say it is circumstantial evidence which tends toprove that an oral agreement to grant an easement was reached. We accept that it doestend to prove this.[68] Clifford J said it was not possible to tell from that letter what the easementsreferred to were for.31 We do not agree. The letter refers to Mr John Fountaine's andMr Burns' agreement to the grant of easements over their land for the pipes, which incontext makes perfectly clear the nature of the proposed grant.[69] As we noted earlier, the Judge also seems to have proceeded on the basis thatat the time of the December 1971 Catchment Board letter, it was only intended to useWaikaramu for gaining access to the pipes laid on Aranui, because the original planfor the scheme did not entail the laying of pipes on Waikaramu.32 Althoughthe judgment is not entirely clear on this point, it is also a view of the facts urged uponus by Mr Stapleton. We are not persuaded that the evidence supports such a view.30 HC judgment, above n 1, at [68].31 At [71].32 At [23].[70] In context, the easement over Waikaramu for "the pipe"33 can only mean aneasement for the pipe carrying the water from Point A to Point B on the lower scheme.It cannot sensibly be read as referring to a right of entry to obtain physical access toAranui and The Downs. There is evidence that by the time of the December 1971Catchment Board letter, it had been agreed by all affected that the pipe for the lowerscheme would pass through Waikaramu. This included Mr John Fountaine. Whilethe original report prepared by Mr Heveldt did not show the pipe going throughWaikaramu, the need for the pipe to deviate probably emerged around October 1971.It seems from the diary of Mr James Ashby that an initial survey of the pipeline fromPoint A to Point B was undertaken by Mr Fred Phillips, who Mr Michael Ashbydescribed in evidence as a surveyor with the Department of Agriculture and Fisheries.That survey would, we infer, have revealed that the originally proposed path hadinsufficient fall for the gravity-fed scheme to work.[71] There is further corroboration that an easement was contemplated incorrespondence following on from the December letter. Apparently responding tothe Chief Engineer's request that the interested parties identify any respect in whichthe letter misreported the broader agreement, the solicitor for one of the upstreamowners wrote to challenge the proposition that the upstream owners would beresponsible for instituting the easement for the downstream owners. The solicitor saidthat whether the downstream owners desired to register the easement was of noconcern to any of the upstream owners and continued:If any easement is desired the Downstream Owners were advised to instructthe same surveyor to carry out the necessary surveys in conjunction with thesurveys he will be undertaking for the Upstream Owners. In this way costscan be minimised.[72] Following receipt of this letter clarifying the upstream owners' position,the Chief Engineer sent a further letter to the affected parties. In the follow-up letter,the Catchment Board noted the challenge to the notion that the upstream owners wouldbe responsible for instituting the easement for the downstream owners and continued:The intent of the letter was to ensure that the survey for easement on bothprojects were co-ordinated in the interests of economy. Rather than suggestthat the upstream owners institute the easement the same objective can be33 As referred to in the Wairarapa Catchment Board letter of December 1971.reached by suggesting that both parties combine in the matter of survey foreasement. In this direction as the upstream owners will probably be ready firstthe initial approach for a co-operative effort should come from them.[73] This recommendation was apparently acted upon. A survey of the affected landwas completed, showing pipes for both the upper and lower schemes including pipeson The Downs and Waikaramu. It seems to us that the only reason to complete thesurvey plan in respect of the lower scheme was the registration of the easement.Mr Stapleton was not able to suggest a plausible alternative explanation.[74] The completion of the survey plan has other evidential significance. It isimprobable that Mr John Fountaine did not know the survey was being completed.Surveyors had to enter onto his land to survey the pipe. The surveyors would surelyhave sought Mr Fountaine's consent to do that.[75] We come to the last piece of documentary material supportingthe Street Trustees' claim in respect of Waikaramu. Although it is chronologically last,it is perhaps the most significant. It puts beyond doubt that there was an understandingcommon amongst the downstream farmers, that there would be an easement throughWaikaramu. In a handwritten note which the parties estimate to have been completedin mid to late 1973, Mr James Ashby lists under the heading future or further accounts:"Easements to be done through Aranui and Fountaine".(b) Conduct of the parties[76] The respondents point to the failure to register an easement for the lowerscheme as evidence that no easement was intended. The chronology we have set outdoes raise the question as to why no legal easement was registered in respect ofthe lower scheme. However, a reading of the contemporaneous documents offers aready explanation. From the beginning, there were concerns as to the cost ofthe survey and registration of the easement, with the original letter fromthe Wairarapa Catchment Board suggesting that the cost be met to the extent it couldfrom the cost contribution by the upstream owners. There are also multiple referencesin Mr James Ashby's diary notes to the way in which the costs were being brokendown and shared. Mr James Ashby wrote in one note, again undated, but obviouslyafter the installation of the scheme:My position is that after a considerable expenditure I have far less water thanmy own original scheme and wasted a good part of a week checking mine andattempting to get water to all users. This also applies to others.[77] It seems likely that an easement was not registered then either because of adesire to save costs or because of a failure of organisation. As to the latter, the upperscheme users had declined to take responsibility for that registration. In their absence,it was unclear who would take responsibility.[78] Another factor we identify as supporting a finding that Mr John Fountaineagreed to an easement for the scheme pipe is the common-sense point that the natureand value of the extensive infrastructure involved in the scheme was such that it canreadily be inferred the parties intended the arrangements to create long-term rights.This was a community water scheme. It is unlikely that the farmers would haveproceeded without long term security for the scheme's operation, or an ability to passon the benefit of the scheme when and if they came to sell the land.[79] The farmers devoted a great deal of time to the installation, withMr James Ashby assiduously recording the time spent by each farmer. As to moneyexpended, Mr James Ashby includes various calculations in his notes. It is hard toglean the exact expense. In 1971 Mr Heveldt estimated a cost of $3,200. Figures ofup to $9,000 are noted elsewhere in what appears to be Mr James Ashby's handwriting,itemising the cost of the scheme as installed.[80] Wherever the "as built" cost sat on that range, the amounts were large inthe context of the 1970s. It was money expended by the lower scheme users to createa scheme that would benefit their land. It is a fair inference we think that the rights touse the infrastructure installed were, from inception, intended to pass with the land.They were not seen as personal to the parties to the agreement but rather rights whichaffected the use, enjoyment and inevitably the value of the land. It is apparent that anaspect of the opposition to the proposed upper scheme was the impact that damage tothe stream would have on the value of the land. In one of Mr James Ashby's recordsof discussions, he writes:All of us, and especially Riddell, McGrath and Ashby paid a premium for thegood water supply when buying our properties. With water being pumped tooutside properties our requirements could be in jeopardy.[81] Over the course of the dispute and these proceedings, the respondents haveoffered different versions of the arrangements. In a memorandum filed before theHigh Court hearing dated 9 March 2015, the respondents characterised the rights oflower scheme users as a personal property interest in the pipes and a right to receivestock water through them, but denied that the Street Trustees have any real propertyrights in relation to Waikaramu or The Downs. But in the same memorandumthe respondents accepted that successors in title to the original landowners are entitledto use the scheme and receive stock water from it. It is hard to reconcile these twopositions.[82] For the respondents, Mr Stapleton attempted to meet this difficulty atthe hearing by postulating that each time land changed hands there was a need to enterinto a new agreement with the new owner, and that this reflected the "gentlemen'sagreement" that regulated it. But it is unlikely that the original landowners set up ascheme which would involve such legal complexity in its administration. In anarrangement affecting multiple users it is implausible that the parties intended thateach time there was a change of ownership there would have to be what was essentiallya novation of the licence. It is safe to infer from the arrangements that were put inplace that they wanted a secure and inexpensive scheme that met their concerns as tocontinuity of stock water supply and preserved the value of their farms. We also notethat subsequent conduct is inconsistent with the existence of a gentlemen's agreement,as there is no evidence that there was ever any discussion of rights and obligationsassociated with the scheme when land changed hands.(c) Evidence in the High Court[83] When construing the nature of the arrangements reached regarding the lowerscheme, the Judge placed most weight on the evidence of Mr Rex Fountaine (the sonof Mr John Fountaine); Mr Rex Fountaine's wife Shona; and Messrs Richard andMichael Ashby, the sons of Mr James Ashby.34 Mr John Fountaine died in 1988 andMr Rex Fountaine has been the sole proprietor of Waikaramu since 1992.[84] Mr Rex Fountaine's evidence was that he was working with his father onthe farm in 1971, but from 1972 to 1975 he worked on other farms in the Cartertonarea and in the South Island, returning to Waikaramu in 1975. He accepted he wasnot involved in discussions with the other downstream farmers regarding thesetting-up of the scheme but nevertheless was permitted to give evidence as to whetherhis father granted an easement over Waikaramu in 1971, including the following:Waikaramu owners were not aware of the details worked out between theparties and did not receive the letters and documents written by the WairarapaCatchment Board in December 1971 and January 1972 John Fountaine was against an easement on his property. I know this becauseI can remember him warning me at the time. You would never want to givethe neighbours water scheme an easement because you do not know what mayhappen in the future.[85] Mrs Shona Fountaine gave evidence about the arrangements although she didnot move to Waikaramu until 1986. She claimed that Mr John Fountaine had told herabout the scheme and "certainly mentioned there was no easement on Waikaramu".[86] Mr Richard Ashby worked on The Downs in 1971 prior to leaving to go touniversity. Although he accepted he was not involved in discussions regardingthe installation of the scheme, he gave evidence about their nature includingthe following passage:It was a Gentlemen's Agreement which had been in place since the start of theLower Scheme. A Gentlemen's Agreement is an informal and legallynon-binding agreement between two or more parties. That accuratelydescribes the arrangements.The Lower Scheme users adhered to the Gentlemen's Agreement in place fromthe start of the scheme, especially respecting Waikaramu. We knew we werenot entitled to water easements, especially over Waikaramu, for the LowerScheme.[87] Mr Michael Ashby did not claim to have been working on The Downs atthe time of the installation of the lower scheme or have been party to the arrangements34 See HC judgment, above n 1, at [77].regarding the installation of pipes on The Downs and Waikaramu, yet he gave evidenceabout what Mr John Fountaine had agreed to:John Fountaine allowed the 50mm pipeline to be placed on Waikaramu at hispleasure; he specifically did not allow an easement over Waikaramu. Alldownstream farmers agreed to respect John Fountaine's property rights and toseek permission for access before going on to Waikaramu to service theLower Scheme headworks and the 50 mm pipeline.[88] In part this evidence is unsubstantiated assertion. To the extent it is a report ofwhat Mr John Fountaine said to each of the witnesses, it is properly characterised ashearsay. To be admissible it must pass the gateway provisions in theEvidence Act 2006 for the admission of hearsay evidence.35 It is true thatMr John Fountaine was unavailable to give evidence, because he had died. But weare not satisfied that this evidence was sufficiently reliable to cross the reliabilitythreshold for admissibility. It relates to events very far in the past. It is inevitable thatmemories will fade, and shift over time. The evidence is general and undetailed and,in our assessment, conflicts with the contemporaneous documentary record. Althoughthe evidence was admitted at the hearing, we are satisfied that no weight can safely beplaced upon it.(d) Conclusion on whether Mr John Fountaine agreed to grant an easement overWaikaramu in 1971[89] As follows from the analysis we have set out, we are satisfied there is strongevidence to conclude that Mr John Fountaine agreed to grant rights, with allthe characteristics of an easement, over Waikaramu for the pipe necessary to supportthe operation of the lower scheme. This is evidenced by the contemporaneousdocumentation. It is further evidenced by the arrangements actually put in place andimplemented in the decades that followed, as the right to use the scheme passed fromlandowner to landowner, and as the new owners continued to go on to Waikaramuwhen maintenance of the infrastructure was required.35 See Evidence Act 2006, ss 17 and 18.(e) Was there sufficient consideration?[90] The Judge saw as fatal to the claim of an equitable easement that noconsideration ever flowed to Mr John Fountaine, or the Fountaines, in exchange for agrant of water carriage and maintenance access rights.36[91] But as Mr Goddard QC submits for the Street Trustees, it is not necessary toshow that consideration benefits the promisor. It is sufficient if there is eitherdetriment to the promisee or a benefit to the promisor.37 Here it was enough thatthe promisees had provided consideration in the form of detriment to them.The agreement contemplated that the promisee downstream users would give up theirrights of objection to the upper scheme. That was sufficient consideration. In anycase, we also note in passing that Mr John Fountaine did in fact receive benefits underthe agreement — these benefits flowed from the regulation of the use of the stream'swater which was acceptable to all parties.(f) Were there sufficient acts of part performance?[92] Tipping J addressed the requirements of a sufficient act of part performance inT A Dellaca Ltd v PDL Industries Ltd:381. Was there a sufficient oral agreement such as would have been enforceablebut for the [Contracts Enforcement] Act?2. Has there been part performance of that oral agreement by the doing ofsomething which:(a) clearly amounts to a step in the performance of a contractualobligation or the exercise of a contractual right under the oralcontract; and(b) when viewed independently of the oral contract was, on theprobabilities, done on the footing that a contract relating to the landand such as that alleged was in existence.3. Do the circumstances in which that part performance took place make itunconscionable (fraudulent in equity) for the defendant to rely on the Act?36 HC judgment, above n 1, at [81].37 HG Beale (ed) Chitty on Contracts (32rd ed, Sweet & Maxwell, London, 2015) vol 1 at [4–004].38 T A Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109.[93] The Judge also saw as fatal to the Trust's claim the absence of a sufficient actof part performance by Mr John Fountaine.39[94] The Judge said that what Mr John Fountaine and his successors in title havedone in the years since 1971 was "consistent with their characterisation of an informalarrangement that was never intended to, nor did it, reflect a contract to grant a legaleasement".40 Accordingly, there was insufficient evidence of clear steps taken inthe performance of a contractual obligation or right under the alleged oral contract.[95] But this finding overlooks the important point that the acts must be those ofthe party relying on the part performance.41 This requirement arises from the natureof the doctrine as stated in Fleming v Beevers:42It is clear that over the years two concepts have been said to underpin thedoctrine of part performance. The first is that equity will not allow theStatute of Frauds itself to become an instrument of fraud. Thus, if there hasbeen part performance, equity takes the view that the defendant is not chargedupon the contract alone but also upon the equities arising from partperformance. Therefore it is not the contract alone which is being enforcedcontrary to the statute but also the collateral equities which arise out of thecontract. The other concept behind the doctrine of part performance is animportant but subsidiary one. It concerns proof. The acts of part performanceare treated for probative purposes as a satisfactory substitute for the statutoryrequirement of writing.[96] In this case a number of steps were taken by the downstream users whichamounted to steps taken in performance of a contract to grant an easement andthe exercise of rights under that agreement. The downstream users abandoned theirobjections to the upper scheme. They installed the infrastructure and it seems likelythat they paid for a survey to be undertaken of the placement of the pipes. These stepsare more consistent with performance of an agreement to grant an easement rather thanan agreement to grant a licence. As the Street Trustees submit, it is unlikely that suchextensive arrangements would have been taken absent a permanent entitlement toplace infrastructure on the land, and use and maintain it.39 HC judgment, above n 1, at [80].40 HC judgment, above n 1, at [80].41 Mahoe Buildings Ltd v Fair Investments Ltd [1994] 1 NZLR 281 (CA) at 287.42 Fleming v Beevers [1994] 1 NZLR 385 (CA) at 393.(g) Did Mr John Fountaine have sufficient interest in the land to grant an easement?[97] The respondents filed a notice supporting the decision of Clifford J on anadditional ground. In the High Court, Mr Stapleton argued that Mr John Fountainecould not grant an easement in respect of the land because he held it under a deferredpurchase agreement and so, by virtue of the provisions of s 60 of the Land Act 1948,could not grant an easement over the land.[98] In 1949 Mr John Fountaine leased the land from the Crown. In 1966 he enteredinto a Deferred Payment Licence Agreement in which the Crown agreed to sellthe land to Mr John Fountaine but to accept deferred payment. Pending payment,Mr John Fountaine was granted an exclusive licence to occupy the land. This was aninterest capable of registration, and which was registered, and able to be dealt with.Mr John Fountaine transferred 45 per cent of his ownership interest in the land to afamily trust in 1975 and, in 1977, transferred 55 per cent to Mr Rex Fountaine. A feesimple title was issued in 1991 and acquired by Mr Rex Fountaine in 1992.[99] Mr Stapleton argues that only the Crown, not Mr John Fountaine, hadthe power to grant an easement in the 1970s. He points to s 60(1) of the Land Actwhich provides "the [Land Settlement] Board may from time to time grant or reserveany right of way, or other easements over or under any Crown land". Section 60(3)provides that "[a]ny grant or reservation of a right of way, or other easement underthis section may be subject to such conditions, restrictions, and covenants as the Boarddetermines". It follows, says Mr Stapleton, that it was the Crown, and notMr John Fountaine, with the power to grant an easement.[100] The Judge characterised this as a technical argument he did not need toaddress.43 We agree that it is a rather technical argument but given our different viewof the facts, we address it. The argument can be shortly dealt with. Although styledas a deferred purchase payment licence, this was in reality an unconditional agreementfor sale and purchase. As such, it conveyed the beneficial interest to43 HC judgment, above n 1, at [84].Mr John Fountaine.44 The Crown held the land on trust for him.45 Mr John Fountainewas therefore competent to agree to grant an easement over his interest in the land.Section 60(3) does not, by its terms, affect that position.Did Mr James Ashby agree to an easement over The Downs in 1971–1972?(a) The basis of the claim[101] This issue was not addressed by Clifford J in his judgment, an oversight on hispart as the claim to an easement over The Downs for the lower scheme was pleadedin the statement of claim.[102] Initially Mr Goddard put the Street Trustees case to us in respect of The Downsonly on the basis that an easement arose by reason of an estoppel. Over the course ofthe three-day hearing that argument shifted to include an allegation that there was anagreement to grant an easement.[103] We are satisfied the Street Trustees' pleadings are sufficient to encompass thelatter allegation. The pleading does no more than narrate the chronology of eventswhich are said to support the claim to an easement over The Downs to give effect tothe lower scheme.[104] The respondents do not suffer any unfair prejudice by reason of allowing thisargument to be advanced on appeal even though it was not advanced in the High Court.We say this because Clifford J did not address the claim to an easement overThe Downs in the High Court. Further, the issue as to whether there is an agreementin force must be decided purely on the basis of the documentary record, as there is noparty to the original arrangement available to give evidence. Mr Stapleton did notseek to argue that the respondents are prejudiced by the late emergence of thisargument.44 Firth Concrete Industries Ltd v Duncan [1973] 1 NZLR 188 (SC) at 191–193; andDW McMorland Sale of Land (3rd ed, Cathcart Trust, Auckland, 2011) at 411–412.45 Lysaght v Edwards (1876) 2 Ch D 499.(b) Analysis[105] The starting point to consideration of this claim is that there is no reference inthe Wairarapa Catchment Board letter of December 1971 to the grant of an easementby Ashby Downs Ltd. If Mr James Ashby agreed to grant an easement for the pipes,why would Mr Burns and Mr John Fountaine be singled out for reference in thisconnection, but not Mr James Ashby? And why would there be reference indocuments from that time to the need to register easements over Aranui andWaikaramu, but no reference to registration of an easement over The Downs? It seemsto us the answer is as simple as this. Mr James Ashby was to be a participant of thelower scheme. Messrs Burns and Fountaine were not members of either the upper orlower scheme, and so their agreement to the presence of pipes justified expressreference in the correspondence and the extra protection of registration.[106] As discussed, what was agreed in that letter was in our view sufficient toamount to an agreement to grant an easement. The essential elements of an easementare present. The servient tenement was The Downs, over which the pipes would run.The dominant tenements were the other farms serviced by the lower scheme.The grant was a classic water carriage easement.[107] We are satisfied that what was agreed to was an easement rather than a licencebecause:(a) the agreement was to install pipes for a water scheme to serve multipleusers;(b) the pipes would be installed on the Ashbys' land, at the expense ofthe lower scheme users, conferring a benefit on the land of the lowerscheme users;(c) the scheme contemplated pipes being used for the benefit of multipleusers — the pipes on The Downs for the benefit of the Riddells andthe Nelligans, and the pipes on the Riddells for the benefit ofthe Nelligans; and(d) the lower scheme was and is intended to be for the benefit of and passwith title to the land, which is why easements were required fromMessrs Burns and John Fountaine.[108] The survey of the upper and lower scheme recorded all the pipes inthe schemes, including those passing over The Downs, suggesting that both schemeswould be supported by easements. It would be illogical were it otherwise — that is,if the lower scheme operated pursuant to licences and the upper scheme operatedpursuant to easements.[109] For these reasons we are satisfied that Mr James Ashby, on behalf of the secondrespondent Ashby Downs Ltd, agreed to the grant of rights amounting to an easementto support the presence of scheme infrastructure on The Downs. Again, the promisees(other scheme users) had provided consideration, by giving up their rights of objectionto the upper scheme. As to acts of part performance, they are the same acts we identifyat [96] above.Were easements agreed to in respect of the scheme as modified in 1993–1994?(a) Basis of the claim[110] The Judge's finding that there was no agreement to grant an easement was builtupon his finding that Mr John Fountaine did not agree to grant an easement forthe lower scheme infrastructure at the time of its creation, a finding we have held tobe in error. Because we have reached a different view to the Judge in respect ofthe 1970s lower scheme, it is necessary for us to look afresh at the evidence inconnection with 1993–1994 as it is the scheme as modified the Street Trustees layclaim to.[111] The evidential task in respect of the 1993–1994 upgrade is different becausethe respondents could and did call witnesses to the arrangements. Mr Rex Fountainewas the principal witness. He said that in 1993 the downstream users decided tomodify and upgrade the lower scheme. The modifications consisted of a new weir onWaikaramu, a settling/header tank, and two new separate long-distance pipelines, oneto The Downs and one to Maungahuia — the latter located principally on Waikaramubut briefly on The Downs.[112] Mr Rex Fountaine viewed the modifications as a continuation of the 1970slower scheme. Although he agreed to these improvements and modifications, hisevidence was that he did not agree to grant anyone an easement over the land in respectof the water pipes and equipment. Rather he agreed under strict conditions that therewould be no easement over Waikaramu, that the modifications and upgrades were notto interfere with his farming operation, that his permission would be needed fordownstream users to come onto his land and that they would all abide by a gentlemen'sagreement.[113] Under cross-examination Mr Rex Fountaine expanded upon the gentlemen'sagreement. His understanding of it was that if there was a dispute the scheme userswould try and sort it out through mediation but, ultimately, if they could not resolvethe dispute, he could ask for the removal of the pipes. As noted earlier, he saidWaikaramu had a right to cancel the gentlemen's agreement "if we felt at risk".[114] Both Michael and Richard Ashby worked on the lower scheme upgrade in1993–1994. Mr Michael Ashby said that at the time of the upgrade it was:[115] reaffirmed by the downstream users with Rex Fountaine that therewas to be no easement over Waikaramu for the Lower Scheme headworks andpipelines, that we were there at his pleasure and were not to interfere with hisfarming operations, and that access for service was only with prior notice andpermission.[116] During the appeal hearing, Mr Stapleton conceded that the arrangements werenot terminable at "pleasure" and that there had to be cause for termination.Nevertheless it is the witnesses' description of the arrangements that is important forour assessment.(b) Analysis[117] The argument on appeal focused on Waikaramu in respect of this upgrade.However, the upgrade affected the placement of scheme infrastructure on The Downsand Waikaramu and we have therefore addressed issues in respect of both. We haveconcluded that the modifications and upgrade in 1993–1994 were a modification ofthe existing easement over Waikaramu and The Downs to support the operation of thelower scheme. The infrastructure continued to be present on Waikaramu andThe Downs on the same basis as it had been previously — supported by an equitableeasement. In reaching this view, we have rejected the evidence of Mr Rex Fountaineand the Ashby brothers that there was no easement supporting the post 1993–1994infrastructure.[118] Our reasons for reaching this view of the evidence are as follows.[119] Mr Rex Fountaine's and Mr Michael Ashby's evidence on the arrangements in1993–1994 is very general and undetailed — perhaps inevitably so when the eventsrecounted occurred more than 20 years ago. It is not corroborated by any documentaryrecord made at the time. The respondents point to a diary note made byMr Michael Ashby that reads "we have to negotiate with an upstream farmer onplacement of pipe and tank which could further complicate matters". That does notassist. Clearly there would have to have been negotiations for a change to the schemeinfrastructure, including its placement on Waikaramu. We attach more significance tothe inconsistency between their evidence of a gentlemen's agreement and otherevidence less vulnerable to the vicissitudes of memory.[120] Our starting point is that the upgrade was seen by all as a continuation of theexisting arrangements, which by the time of the upgrade had been in place for 20 years.Those arrangements were to allow infrastructure to support a water scheme whichserved multiple parties, and which conferred rights that passed with title to new ownersof the farms. The evidence of Mr Rex Fountaine and the Ashbys that the scheme wasterminable "at pleasure" is out of step with these existing arrangements, yet both saidit was a continuation of those arrangements.[121] We also weigh evidence of an acknowledgment by Mr Michael Ashby thatthe benefits of the scheme passed with title. This is significant because it is evidenceof his understanding before litigation began. In 2007 because of ongoing tensionregarding the use of the scheme, the lawyer for Mr MacPhail wrote to the Fountainessetting out some assurances the users wished to give to the Fountaines. At that timethe Street Trust had acquired some, but not all, of the properties owned on the northernside of Millars Road previously owned by Mr MacPhail and his interests.Mr MacPhail continued to manage the scheme for the Trust, himself and other users.Mr MacPhail undertook to give the Fountaines notice of maintenance work to beundertaken and that he would exercise care over the use of the farm track onWaikaramu. The letter concluded:Doug [MacPhail] is mindful (as no doubt you are) that this scheme is often avery important source of stock water, especially during the summer months.Doug confirms the scheme is for stock water only but, in Doug's case, also alittle for his garden.[122] The letter was signed by the other downstream owners but not the Ashbys.The Fountaines replied to the letter with their own letter of December 2008 in whichthey said they were disappointed the Ashbys had not been copied into the signedagreement. That oversight was addressed in 2009 and the Ashbys were invited toco-sign the letter. Michael Ashby noted on his copy of that letter:The right of Doug to use water on his garden does not pass to succeedingowners.[123] The evidence that Mr Michael Ashby and Mr Rex Fountaine gave as tothe arrangements being "at pleasure" is, we consider, inconsistent withthe acknowledgment implicit in this note — that the right to use the scheme for stockwater passed with title.[124] As noted above the evidence of Mr Rex Fountaine was that permission wasrequired before lower scheme users could come on the land in order to servicethe infrastructure. But there is no mention of a need for permission, only notice, inthe correspondence between the parties in connection with access.[125] We also take into account the common-sense point made earlier aboutthe creation of the scheme. Again there was significant investment of time and moneyin the upgrade on the part of the lower scheme users. Mr Richard Ashby refers tohaving been involved to varying degrees with the planning, organisation and actualwork on the upgrade. This was no small undertaking. The upgrade also was a criticalpart of a much larger scheme running across several farms. Without it, the rest ofthe lower scheme would not carry stock water.[126] It is against this background that we have concluded it is unlikely the partiesproceeded to modify the scheme on the basis that they give up the easement rightscreated by the original scheme (including the right to pass the benefit of the schemeto successors in title) and take in its place a licence terminable at the pleasure ofthe Ashbys and Fountaines.[127] Clifford J was impressed with the evidence of the Fountaines and Ashbys.46He found them to be both credible and reliable witnesses, and we acknowledge that hehad the benefit of seeing them give their evidence. The view we take of the evidencedoes not turn upon an assessment of these witnesses' credibility. Where we differ fromthe Judge is in our assessment of their reliability, an assessment based upon ouranalysis of documents created at the time, and the conduct of the parties and thesewitnesses before the present litigation.[128] In assessing this evidence we have weighed, as we are bound to, the impact onmemory of the passage of time and the circumstances in which memories are recalled.Any memory is malleable and can be affected by the context in which it is called tomind. To the extent these witnesses were calling upon memories of past discussions,they are now shaped by the fact that there is conflict between the parties. This pointwas well made by Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd:47[19] The process of civil litigation itself subjects the memories ofwitnesses to powerful biases. The nature of litigation is such that witnessesoften have a stake in a particular version of events. This is obvious where thewitness is a party or has a tie of loyalty (such as an employment relationship)to a party to the proceedings. Other, more subtle influences includeallegiances created by the process of preparing a witness statement and of46 HC judgment, above n 1, at [77].47 Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm).coming to court to give evidence for one side in the dispute. A desire to assist,or at least not to prejudice, the party who has called the witness or that party'slawyers, as well as a natural desire to give a good impression in a public forum,can be significant motivating forces.[20] Considerable interference with memory is also introduced in civillitigation by the procedure of preparing for trial. A witness is asked to makea statement, often (as in the present case) when a long time has already elapsedsince the relevant events. The statement is usually drafted for the witness bya lawyer who is inevitably conscious of the significance for the issues in thecase of what the witness does nor does not say. The statement is made afterthe witness's memory has been "refreshed" by reading documents. Thedocuments considered often include statements of case and otherargumentative material as well as documents which the witness did not see atthe time or which came into existence after the events which he or she is beingasked to recall. The statement may go through several iterations before it isfinalised. Then, usually months later, the witness will be asked to re-read hisor her statement and review documents again before giving evidence in court.The effect of this process is to establish in the mind of the witness the mattersrecorded in his or her own statement and other written material, whether theybe true or false, and to cause the witness's memory of events to be basedincreasingly on this material and later interpretations of it rather than on theoriginal experience of the events.[129] We accept the Street Trustees' submission then that this was a variation to anexisting easement, and simply modified the location and nature of the infrastructuresupported by the easement.[130] We are satisfied that the variation was supported by valuable consideration.Each party agreed to modify existing rights and obligations in consideration ofthe amendment to the easement to reflect the new infrastructure.[131] The variation was not of course recorded in writing, so it is necessary for theStreet Trustees to point to a sufficient act of part performance. In respect of the 1993–1994 variation, the abandonment of the old infrastructure and the investment inthe new is a sufficient act of part performance.[132] We add as a postscript to this analysis that we would have concluded thatthe 1993–1994 arrangements were sufficient to found an equitable easement arisingfrom an agreement, even had Mr Stapleton persuaded us that in 1971–1972Mr John Fountaine was not competent to grant an easement. As we have explained,we do not accept as reliable the evidence of Mr Rex Fountaine and Mr Michael Ashbythat there was discussion in 1993–1994 that no easement was granted, and thatthe scheme infrastructure was there at the pleasure of the owners. We are satisfied thatthe 1993–1994 upgrade of a long-standing water scheme, with the intent that the rightsto use the scheme continue to pass with the land, is sufficient evidence of agreementas to all the required elements of an easement.Second issue: did the Judge err in finding that the respondents were not estoppedfrom denying the existence of such easements?Relevant principles[133] The Street Trustees advanced, as an alternative to their claim to an equitableeasement founded on agreement, the claim that the respondents are estopped fromdenying the existence of equitable easements.[134] The circumstances in which the doctrine of equitable estoppel will operate tocreate an equitable easement are not circumscribed at law.48 The principles governingthe law of equitable estoppel in New Zealand were restated by this Court in WilsonParking New Zealand Ltd v Fanshawe 136 Ltd as follows:49(a) An owner of land creates in another a belief that the other will enjoy aright or benefit over the owner's land.(b) To the extent an express representation is relied upon, it is clearly andunequivocally expressed.(c) The other person reasonably relies on the words or conduct to theirdetriment.(d) It would be unconscionable for the landowner to depart from the beliefor expectation.48 See DW McMorland and others, above n 18, at [16.035] and [18.007].49 Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567 at[44].The issues[135] There are difficulties with how this claim is pleaded for the Street Trustees.The pleading contains a series of factual allegations under the heading: "The Trust'sexperience of and actions relying on the Millars Road Water Scheme." There is noclear identification of what actions or representations are relied upon to give rise to anestoppel. There is also no clear pleading of the acts of reliance alleged, although itcan perhaps be inferred from the pleading that it was the Trust's expenditure of$130,000 on the scheme, and the 2009 purchase of land.[136] The way in which the estoppel claim has been argued has also shifted throughthe course of this proceeding. At trial Mr Street gave evidence the Street Trusteesacted reasonably in buying properties and investing in the upgrade of the scheme, inreliance upon the representation implicit in the pleaded actions — that title to the landthe Street Trustees acquired carried with it the benefits of easements over Waikaramuand The Downs. But most of the evidence at trial focused on the conduct of Mr Street,the Fountaines and the Ashbys in the period following those purchases.[137] In the High Court Clifford J summarised the Trustees' case as follows:[86] For the Street Trustees, the argument Mr Macdonald advanced asregards an easement by estoppel can, I think, fairly be summarised as follows:(a) Mr Fountaine Senior and after him the Fountaines had,through their actions and acquiescence, created or encourageda belief or expectation in the Lower Owners – if not Mr Streetor the Street Trustees themselves, of water carriage and accessrights as represented by the pleaded easement.(b) That belief or expectation had been relied on by theStreet Trustees, through Mr Street, when from 2006 onwardsthe Street Trustees acquired additional land on the eastern sideof Millars Road and invested considerable sums of money inimproving the water supply and distribution infrastructure onthat land.(c) Detriment, in effect the potential loss of the value and benefitof that investment, would be suffered if that belief orexpectation was departed from.(d) It would unconscionable for the Fountaines, and AshbyDowns, to depart from the belief or expectation as representedby their action in declining to grant the Street Trustees aregistered easement in the terms pleaded.(footnotes omitted)[138] It was this claim that was rejected by the Judge.[139] Before us Mr Goddard put the case for an estoppel on alternative bases.The first basis is this. Mr John Fountaine and Ashby Downs Ltd were estopped againstthe original landowners of the Trust land, the Riddells, from denying the existence ofeasements in the 1970s. Mr Rex Fountaine and Ashby Downs Ltd were furtherestopped as against Mr MacPhail from denying the existence of the modified 1993–1994 easements.[140] It is difficult to extract this claim from the pleadings and evidence at trial. Butin any case there is an obvious difficulty with this formulation. The Street Trusteesdid not own the Trust land in the 1970s or in 1993–1994, so how is it that they canclaim the benefit of any estoppel?[141] Mr Goddard argued that when the estoppels arose the notional beneficiary ofthem, the Riddells or Mr MacPhail, had recognisable equitable interests in bothThe Downs and Waikaramu. These were in the form of equitable easements whichthe respondents were estopped from denying. They could have obtained an order forspecific performance to achieve registration of these easements. While the rights toassert an estoppel arising from the original scheme were the rights of the Riddells,Mr Goddard argues that since a registered easement would have passed with the titleby operation of provisions of the Land Transfer Act, equity would follow the law inthis. The effect of this, he contends, is that the equity the Riddells had because ofthe estoppel would have passed to Mr MacPhail, and then through him tothe Street Trustees.[142] The same argument applies in respect of the estoppel claimed in connectionwith the 1993–1994 modifications. Mr Goddard argues that since Mr MacPhail couldhave sought registration of an easement, the respondents were estopped from denyingthat equity flowed from Mr MacPhail to the Street Trustees.[143] We acknowledge the strength of the argument that the elements of a claim forestoppel were made out in the early 1970s and again in 1993–1994. This flows fromour observations above as to how the scheme operated and the extent of the owners'investment in it originally as well as later in the 1993–1994 upgrade.[144] However, the right of a third party (such as Mr MacPhail or the Street Trustees)to obtain an interest in land through the transfer (express or implied) of the right to aneasement based on an estoppel, and before any court order has recognised that claim,involves consideration of complex legal issues in an area of unsettled law.50Mr Goddard did not assist us with legal argument on this point, beyond telling usduring oral argument that it was one basis for the estoppel claim. Mr Stapleton alsodid not address the issue, which is not surprising given the late articulation by theStreet Trustees of such a complex issue. We do not therefore take our considerationof this argument further, in light of the fact that the outcome of the argument is notdispositive of the appeal.[145] The alternative basis for the estoppel claim is a direct claim bythe Street Trustees. The Street Trustees argue that the respondents are estopped fromdenying the existence of easements on the following basis. The respondents createdan expectation that there was an easement by allowing the continued operation ofthe scheme, through many changes of ownership. They did not suggest that the rightswere personal to the original members of the scheme. The respondents recognisedthe rights of those original owners' successors in title to use the scheme and to exercisethe right ancillary to it to go on to Waikaramu to service the infrastructure, requiringonly notice to meet safety concerns. The suggestion that there was a need forpermission has only arisen in the context of this dispute.[146] Although this is a more straightforward formulation of an estoppel claim, wehave nevertheless concluded that we should not address it. We have found forthe appellants in respect of their principal claim that equitable easements arise throughagreement, and so the issue of an estoppel does not, strictly speaking, arise. Ourreluctance to address the claim also springs in part from the way in which this claim50 For a discussion of the issue see Ben McFarlane The Law of Proprietary Estoppel (OxfordUniversity Press, Oxford, 2014) at [8.65]–[8.68].has evolved through the course of the proceeding, and the absence of any properpleaded basis for it.Third issue: if there is an equitable easement or easements, what relief if any isappropriate to give effect to these easements?Submissions[147] In the statement of claim, the Street Trustees seek registered easements for aright to convey stock water to be effected under pt 5 of the Land Transfer Act,comprising the rights and powers implied under s 90D(1) of that Act, reg 10 of theLand Transfer Regulations and sch 4 to the Land Transfer Regulations. They seekthese orders in respect of Waikaramu and The Downs. They also seek orders that therespondents complete any and all documents necessary for registration under theLand Transfer Act and take any other steps necessary for that purpose.[148] In light of our conclusion that the Street Trustees are entitled to equitableeasements in respect of Waikaramu and The Downs, we are satisfied that it isappropriate to grant the relief sought. Both parties were provided with the opportunityfollowing the hearing to provide written submissions in respect of the terms of anyeasements, should the Court be minded to grant them. The background to this wasthat during the course of the hearing, the Court identified the possible need to add acondition to any easements requiring notice for access for the purposes of maintenanceon the scheme infrastructure supported by the easement. This was in response tothe health and safety concerns raised by Mr Rex Fountaine.[149] Counsel for the respondents provided lengthy submissions repeating theirvarious arguments as to why an easement should not be granted. We do not considerthose parts of the submissions directed toward a re-argument of this issue, as it isbeyond the grant of leave and was fully canvassed during the hearing.[150] In addition, the respondents seek to add conditions or qualifications to anyeasements granted as follows:(a) any easement granted should not extend to the first piece of landpurchased by the Street Trustees in 199851 because it was disconnectedfrom the scheme at the time that the Street Trustees purchased the land;(b) any easements granted in respect of Waikaramu and The Downs shouldextend to all properties that are entitled to the benefit of the scheme,through both the 40-mm or 50-mm pipes, and not justthe Street Trustees' properties; and(c) that the easement should be granted on very detailed terms, includingthe use to which the stock water can be put and a requirement that amanagement committee be set up to administer and operatethe easement facility.[151] We are not satisfied that any of the conditions proposed on behalf ofthe respondents should be imposed upon the easements to be registered. As to the landpurchased in 1998 while disconnected from the pipe, we have found that the partieshad the benefit of an equitable easement arising by agreement. The fact the pipes weredisconnected is irrelevant to the existence of these easements. Accordingly,the easement should be for the benefit of that land as well as the other parcels of landheld by the Street Trustees.[152] As to whether the easement should extend to more properties that are entitledto the benefit of the scheme, via either the 40-mm or 50-mm pipelines, and not justthe Street Trustees' properties, that relief was not sought by the respondents duringthe hearing in the High Court nor before this Court. Most of the parties who would beaffected by those orders are not before the Court. Accordingly, such a condition cannotbe imposed.[153] Finally, we address the lengthy and restrictive terms proposed by therespondents, which are intended to regulate the use to which the stock water may beput and the rate of flow. We do not consider these are matters that can or should beregulated through the terms imposed on the grant of an easement. Even were it51 WN47C/453.appropriate to include such conditions in an easement (we do not decide whether it is)the original agreement was for the Catchment Board to regulate and arbitrate rates offlow over time. The passage of time has meant that Board has fallen by the way.The entity which had the flow rate setting function no longer exists. The parties mayneed to find another body and mechanism to set the level at which stock water may betaken, but an easement is not the means to settle this issue, or even to establish suchan entity.Orders[154] Accordingly, we are satisfied that the Street Trustees are entitled to the ordersthey seek, as set out in [147] modified as the Street Trustees now propose, to requirethat notice be given of an intention to enter upon the land to access the schemeinfrastructure.[155] Accordingly, the additional terms of easements to give effect to thatmodification are as follows:(a) subject to (b), the grantee will notify the grantor of entry by the granteeonto the servient tenement;(b) notice will be given at least 12 hours in advance of entry, or as soon aspracticable if 12 hours is not practicable (in that regard, it isacknowledged that there may be exceptional circumstances in whichnotice will not be possible);(c) on receipt of notice under (a) the grantor will promptly confirm receiptof that notice to the grantee and will notify the grantee of any significantactual or potential hazard on the servient tenement that might affectthe grantee;(d) all notices and other communications will be given or made orally or inwriting (including electronically) to the relevant designated person;(e) each of the grantor and the grantee will ensure that there is always adesignated person (for the purpose of (d)) nominated in writing by thatparty to the other. To avoid doubt, such nominations may be modifiedby a party from time to time, and may specify different designatedpersons for different periods; and(f) any nomination under (e) will include the designated person'sresidential address, telephone number and email address.[156] We are satisfied that these conditions are appropriate. They draw upon interimrelief granted at a much earlier stage of these proceedings in response to an applicationfor access to the 40-mm pipeline on Waikaramu.Fourth issue: if there is no equitable easement, what other equitable rights andobligations exist in relation to scheme infrastructure, and what relief isappropriate?[157] We do not propose to address this issue. It would be artificial to do in light ofour factual findings. We record, however, the respondents' argument thatthe Street Trustees could not pursue this issue on appeal because it was not sought asalternative relief in its statement of claim. We also record that had we been requiredto address this alternative relied upon, we would have done so as we are satisfied itwas sufficiently pleaded in the High Court.52Costs appeal[158] The costs orders made in the High Court were the subject of an appeal bythe Street Trustees and a cross-appeal by the respondents. Because we have allowedthe principal appeal, it follows that costs in the High Court should be reassessed andit is not necessary to address the costs appeals.[159] It was agreed between the parties that costs in the High Court should be fixedin this Court because Clifford J no longer sits in the High Court. Forthe Street Trustees Mr Goddard seeks that costs in the High Court be fixed on a band52 We also note that rule 5.31 of the High Court Rules 2016 provides the High Court can grant anyother relief to which the plaintiff is entitled even if it is not pleaded.2B basis. We do not understand Mr Stapleton to oppose that.53 Accordingly, we fixcosts and disbursements in the High Court to be calculated on a 2B basis.[160] In relation to costs in this Court, we are satisfied that the respondents shouldpay the Street Trustees costs for a complex appeal on a band A basis and usualdisbursements. We certify for two counsel.Result[161] The appeal against the substantive judgment of Clifford J is allowed.[162] The Street Trustees are entitled to orders as set out in paragraphs [154]–[155]above.[163] The costs orders made in the High Court are quashed.[164] Costs in the High Court are fixed on the basis that the Street Trustees areentitled to costs calculated on a band 2B basis, together with disbursements to be fixedby the Registrar of the High Court.[165] The respondents must pay the appellants costs for a complex appeal on aband A basis and usual disbursements. We certify for two counsel.Solicitors:R K Macdonald, Lower Hutt for AppellantsNowland Gordon & Associates, Wellington for Respondents53 The respondents' costs appeal was brought on the basis that costs should be calculated on acategory 3 basis, rather than category 2, and that increased costs by way of an uplift wereappropriate.