SALIS v FILLEUL APARTMENTS JV LTD [2019] NZHC 766

SALIS v FILLEUL APARTMENTS JV LTD [2019] NZHC 766 [10 April 2019]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2019-412-000008[2019] NZHC 766BETWEEN SERGIO SALIS AND CHRISTOPHERROBERTSONAppellantsAND FILLEUL APARTMENTS JV LIMITEDRespondentHearing: 5 April 2019Appearances: L A Andersen for AppellantsS Chadwick for RespondentJudgment: 10 April 2019JUDGMENT OF GENDALL J[1] This is an appeal against a decision of the District Court delivered on13 February 2019. The appeal relates to a Notice of Appeal filed by the appellants on18 February 2019. The appeal is opposed by the respondent.General factual background[2] This proceeding and its predecessors have a reasonably long history. Somebrief background to this whole matter is useful.[3] The appellants own a commercial property at 34 London Street, Dunedin(34 London) from which in part they operate their dental practice. 34 Londonneighbours an adjoining property at 95-97 Filleul Street, Dunedin (97 Filleul), ownedby the respondent. This general area in Filleul and London Streets is quite steep, with34 London lying to the north and above the shared boundary with 97 Filleul. Adriveway and car park area in 34 London runs along that shared boundary.[4] The respondent is in the process of building a four storey apartment buildingon 97 Filleul and, as I understand it, a number of apartments have been the subject ofpre-purchase agreements.[5] A little over three years ago the respondent applied to the Dunedin City Council(the DCC) for a resource consent for their proposed apartment building developmentat 97 Filleul. The DCC heard that application and a resource consent was granted inApril 2016. The appellants, who I understand had opposed the original resourceconsent application, then appealed the DCC's decision to grant consent. AnEnvironment Court hearing was held to consider this appeal in March 2017 with adecision issuing in mid-2017 which dismissed the appeal and confirmed therespondent's resource consent.[6] The appellants then lodged a further appeal against that Environment Courtdecision to the High Court. That appeal was dismissed by this Court in September2017.[7] The respondent suggests that from an early stage it took a number of specificdesign approaches and changes in its development in an effort to mitigate the effectson the appellant's neighbouring property and their dental practice offices.[8] The respondent goes on to state that over quite a long period of time it madenumerous approaches to the appellants in an effort to agree:(a) What would be built on the parties' shared boundary to improve theretaining walls between the two properties; and(b) Any possible methods of access over the driveway and part of the carpark at 34 London to facilitate construction on 97 Filleul.The respondent contends that there has been almost no constructive engagement bythe appellants, both with respect to this boundary work and access possibilities, despitethe respondent's claim that at its own expense boundary arrangements with 34 Londonhave been improved considerably.[9] It is interesting to note that a condition of the resource consent adopted by boththe Dunedin City Council and the Environment Court required the respondent toensure that:The exterior wall surfaces on the northern and southern facades are to bepainted in a light colour and finish that maximises light reflection.[10] It follows that the respondent claims it had no other alternative but to bring theapplication to the District Court at issue here under ss 319 and 320 of the PropertyLaw Act 2007 (the PLA). This application sought orders from the District Courtauthorising entry onto 34 London. The purpose of this entry was to complete certaindevelopment work and paint exterior walls, that painting in particular being necessaryto comply with the requirement of the respondent's resource consent noted at para [9]above.[11] It is true to say that many of the contentions advanced by the respondent aredisputed by the appellants. In doing so, however, Mr Anderson, counsel for theappellants, notes here that their principal complaints are the lack of recognition of theirproperty rights relating to 34 London, an allegation that they have been unjustifiablyblamed by the respondent for delays in having this case heard and their request forvindication as landowners of the position they have taken in this matter, which theyregard as an appropriate one.The ss 319 and 320 PLA application[12] Sections 319 and 320 of the PLA provide the Court with certain special powersto make orders to enable an applicant to enter neighbouring land for certain specifiedpurposes. These purposes are specified in s 319(1) as follows:(a) to erect, repair, alter, add to, paint, or demolish the whole or any partof any structure on the applicant's land; or(b) to do any other necessary or desirable thing in relation to theapplicant's land.[13] In its ss 319 and 320 application the respondent detailed the purposes for whichentry was sought over 34 London as directed to:(a) Construction of the northern aspect of the respondent's apartmentbuilding, including block-laying, timber framing and finishing, fibrecement cladding and roofing;(b) Finishing and painting the northern aspect of the respondent'sapartment building, including preparation and painting and any othermiscellaneous finishing work; and(c) Any necessary remedial work.[14] The respondent also proposed in the application what seemed to be acomprehensive range of conditions of access set out in detail there.[15] This s 319 and 320 application was filed on 24 July 2018. It was accepted bythe District Court Judge who was involved that the matter was urgent and directionswere made to ready it for hearing. Various other matters intervened in the meantime,however, and it was not until 6 December 2018 that the initial hearing in the DistrictCourt took place. Issues arose over whether the proceeding should have beencommenced as it was by way of originating application, rather than by way of a fullstatement of claim, but I need not go into this aspect for present purposes. Therespondent claims that what it says was delay in having this application heard, meantthat construction under its approved development project on 97 Filleul was underconsiderable pressure, in particular with weatherproofing and related constructionissues.[16] At the hearing before the District Court on 6 December 2018,Judge Christiansen found the originating application process adopted by therespondent here to be appropriate and he granted leave for it to commence its presentapplication by this process. Directions were then made for what was then an amendedapplication to be filed and served on neighbouring tenants. This was attended to withintwo days of the hearing.[17] The appellants then filed a Notice of Opposition to the amended applicationand affidavit in support around 21 December 2018.[18] The respondent contends, however, that the appellants failed to file anyappropriate evidence that properly contradicted the clear evidence from Mr N Lyonsand Mr J Lyons for the respondents. Both of these men are said to have considerableexpertise and experience in managing construction projects and it is claimed theirevidence clearly demonstrated the need for access to 34 London to complete the workspecified in the application, not least of all for health and safety reasons.[19] Again, many of these matters are strongly disputed by the appellants but forreasons which will become apparent later in this judgment I need say little furtherrelating to these at this point.District Court 13 February 2019 decision under appeal[20] In his decision, Judge Christiansen in the District Court reiterated an earlierview that the access sought by the respondent here was urgent. He noted too that theCourt had sought to provide this matter with as much urgency as it could in all thecircumstances.[21] Addressing ss 319 and 320, Judge Christiansen found:(a) The requirements of s 319(3) had been complied with, and the Court'sinvolvement in this matter was necessary. He determined that theappellants had refused to give the construction access sought which wasessential here both for health and safety reasons and also because itwould not be possible to reasonably access the northern faces of therespondent's building except from the appellant's property.(b) The amended application, which was one now to use scissor lifts ratherthan scaffolding, was appropriate and would reduce the amount of timerequired for construction access.(c) The full terms of the amended orders sought were clear, the provisionsof the Health and Safety at Work Act 2015 were relevant here, and theobligation on the respondent to comply with the resource consentcondition to paint the north wall facing the appellant's property whichrequired access was also a relevant factor.[22] Judge Christiansen granted access for specified purposes and on detailedconditions. Immediately following this 13 February 2019 decision, the appellants thenlodged this appeal. They also at the same time sought from the District Court a stayof the orders authorising access, but this was unsuccessful.Initial developments in this Court[23] The appellants' appeal to this Court was given urgency and set down forhearing on 5 April 2019.[24] When the appeal file came before me, on 4 April 2019, I issued a minute whichit is useful to repeat here:[1] On 18 February 2019 the appellants filed in this Court a Notice ofAppeal against a decision given in the District Court at Dunedin on 13February 2019.[2] That appeal was then set down for hearing tomorrow, 5 April 2019 at10 a.m.[3] The District Court judgment dated 13 February 2019, the subject ofthis appeal, made orders in terms of an amended originating application filedby the respondents on 10 December 2018.[4] The orders made in terms of ss 319 and 320 of the Property Law Act2007 enabled the respondent Filleul Apartments JV Limited to enter and re-enter onto and over the driveway and a portion of the car park area of theappellants' property at 34 London Street, Dunedin, to carry out certainconstruction finishing and painting work on a town-house development on therespondent's neighbouring property described as being such work as may be"reasonably necessary for the Specified Purposes". Those "SpecifiedPurposes" were set out in the orders which, in addition, provided conditionsof access to 34 London Street including a provision relating to timing whichstated:Time(i) Subject to any unforeseen events, access for the SpecifiedPurposes is required for a period of approximately twomonths from the date of these orders. This period includes allwork required through to any remediation and final clean up.The timeframe may be subject to reasonable variations asconstruction proceeds.[5] Relating to that District Court decision and the orders made on 13February 2019, the appellants, Mr Salis and Mr Robertson, then filed anapplication in the District Court for a stay of execution of the judgment andorders. In a reserved judgment dated 12 March 2019 Judge Christiansen inthe District Court addressed this and dismissed the application for a stay.[6] The appeal against the 13 February 2019 judgment still remains andhas been scheduled to be heard in this Court tomorrow, 5 April 2019.[7] That said, I repeat as I have outlined at para [4] above, that the orderagainst which the respondents appeal envisaged that generally access to theirproperty for the Specified Purposes was to be required for a period of twomonths from the date the orders were made. That date was 13 February 2019with the two month period expiring in a little over one week's time.[8] It is acknowledged that the timing provision did go on to say that thetimeframe may be subject to "reasonable variations as construction proceeds".Notwithstanding this, and given the history of this matter and what has beensaid to be the need for the respondents to proceed with construction work intheir development with all reasonable speed, I question whether the work tobe carried out on the respondent's property may now be approachingcompletion. I say this given that the two month period noted above has almostelapsed. If that is so, then an obvious question arises as to what is hoped tobe achieved with the present appeal. It is noted, as I understand the position,that no appeal was brought against the 12 March 2019 judgment of JudgeChristiansen dismissing the application for stay.[9] Comment is now sought from counsel for the parties on these aspects.[25] In response to that minute, on 4 April 2019 counsel for the respondent filed amemorandum in this Court which relevantly stated:2 In respect of paragraph 7, [of the 4 April 2019 minute] FAJV notes:a The Directors of the company were uncomfortable accessing34 London Street for the specified construction purposes priorto the District Court's decision on the Appellants' applicationfor a stay. A copy of FAJV's Memorandum of Counsel filedin the District Court advising their position in that regard isattached.b As a result FAJV has only began accessing 34 London Streetafter the stay was declined, since approximately 14 March2019 (incorporating two days' notice to the Appellants andtheir tenants, which it was necessary to provide pursuant toFAJV's Construction Management Plan).c To date the weather conditions have been particularlyfavourable and Counsel understands the necessaryconstruction work is well underway. Subject to anyreasonable variations, FAJV is hopeful that the necessarywork will be able to be completed by 14 April 2019.3 In respect of paragraph 8:a FAJV notes the importance of obtaining construction accessto complete work on the building at 97 Filleul, for FAJV, andfor the other parties with legal interests in the properties underconstruction. FAJV has therefore been obligated to defendthe appeal.b On the further matters in this paragraph, FAJV has no furtherknowledge of why the Appellants continue to press theirposition on appeal, and as recorded in evidence, FAJV hasunsuccessfully sought further clarification from theAppellants on this point over a long period of time.4 Finally it is noted that if FAJV is the successful party Counsel hasbeen instructed that the Company will look to make application for anadditional award of costs above scale.(emphasis added)[26] Counsel for the appellants also filed a memorandum dated 4 April 2019 inresponse which relevantly stated:2 The Respondent did not exercise any of the rights contained in theOrder until 14 March 2019 which was a reasonable position to take asit had waited for the decision on the stay application. Consequently,it seems possible that there is at least one month more work to carryout, although part of the appellants' appeal is that they are not certainwhat work is going to be carried out in addition to painting and sealing(which seems now to be almost complete).3. The Appellants' main complaint is that they have not been listened toby the Court and they seek vindication of their position including thesetting aside of the determination that they are liable for costs and thatthey have any responsibility for matters that occurred prior toDecember 2018.The hearing before me[27] At the outset of the hearing of this appeal before me Mr Anderson for theappellants reiterated matters he had outlined in his 4 April 2019 Memorandum inanswering the question he posed himself, "Why are we here today?" His answers tothis question were:(a) The appellants feel they did not have a fair hearing in the DistrictCourt; and(b) The appellants contend there was a complete lack of recognition oftheir property rights in the District Court and feel aggrieved by this;and(c) The earlier costs award against the appellants was wrong and shouldbe reversed.[28] And, at the start of this hearing, Ms Chadwick for the respondent alsoconfirmed again that all the work required to be done on 97 Filleul which needed someaccess over 34 London was now almost complete and at the most should take only oneweek from 5 April 2019 to attend to. Thus, Ms Chadwick contended that the realpurposes of this appeal, and the main relief sought (being to refer the matter back tothe District Court for a re-hearing) in reality were simply otiose.Discussion[29] On all the substantive matters usually addressed in an appeal of this kind, it isdifficult to escape the conclusion here that the original purpose of this appeal has nowgone. At the hearing before me, counsel for both parties agreed that effectively all thework the respondents were intending to complete requiring access over 34 Londonwas almost finished and was likely to be fully completed by the time this judgment isreleased. There would no longer be any need for the s 319 and 320 orders made byJudge Christiansen to continue. I accept therefore this appeal has served no significantpractical purpose and in terms of the substantive issue here is now largely futile. Thehorse has effectively bolted.[30] That said, it is my view I do not need to address in detail the significant numberof appeal points Mr Andersen advanced for the respondent.[31] The appellants' real concern, as noted in Mr Andersen's 4 April 2019memorandum noted at [26] above, is for "vindication of their position and theirproperty rights" given their claim they were not "listened to" in the District Court.And formally they seek the "setting aside of the determination that they are liable forcosts".[32] I will now turn to broadly address these issues. In doing so, however, I willneed at least for the sake of completeness to record the various grounds for appealwhich the appellants have advanced here and I now do so:(a) The procedure adopted in determining the case was unfair andcontrary to natural justice as the Appellants were not given anyopportunity to challenge by cross-examination the assertions by theRespondent that access was required for health and safety reasons;(b) Inadequate consideration was given to the Appellants' rights asproperty owners to undisturbed possession of their land and, on thecontrary the decision appears to proceed on the premise that theRespondent is entitled to have access to the Appellants' propertynotwithstanding their objection;(c) No additional evidence was filed supporting the claims made in theamended originating application and the Appellants' argument thatsection 319 requires a detailed explanation of the work to be carriedout and the necessity for access to carry out the work was wronglyrejected by the Court;(d) No account was taken of the fact that the Respondent had failed tocomply with the conditions of its resource consent and, in particular,has failed to remedy the damage that it has already caused to theAppellants' land;(e) No consideration was given by the Court to the reasonable offer madeby the Appellants which would have allowed the Respondent to applysealant and paint the wall adjacent to the property in a manner whichminimised the disturbance to the Appellant's property.(f) The Court ignored the claim by the Appellants that there werealternative means to carry out the work required without access to theAppellant's land;(g) The claim that health and safety requirements required access to theAppellant's land was accepted uncritically by the Court despite thelack of supporting information;(h) The Court wrongly determined at [24] that "The evidence is that theapplicant has made numerous offers to the respondents in an effort toreach an agreement about the planned development, including plansfor upgrading the shared retaining wall along the boundary" when nosuch evidence was before the Court;(i) The finding that "Application delays are largely due to theRespondents' opposition" is incorrect in law as:(i) The appellants correctly identified that the proceedings hadbeen wrongly commenced by way of originating summonswhen no application for leave was filed or granted; and(ii) The decision was made within 2 months of the Respondentbeing granted leave to file an amended originatingapplication.(j) The application should not have been heard until the supportingdocumentation was served on the tenants and the finding that thetenants were not required to be served is contrary to the requirementsof section 319 Property Law Act 2007 which requires all occupiers tobe served with the application (including the affidavits) and it was aspecific direction in the judgment of 18 December 2018 that was notcomplied with by the Respondent;(k) There is no proper basis for the determination that the Appellantsshould pay costs to the Respondent.[33] I do not intend to minutely address each of those eleven specific appealgrounds for reasons I outline below. To do so in light of the ultimate result I proposehere would be pointless.[34] At this point it is useful to reflect upon the final decision of the EnvironmentCourt issued on 19 June 2017 which I refer to at [6] above and one aspect of thatdecision. In the decision itself, Schedule 1 set out the specific conditions upon whichthe resource consent for construction and operation of the proposed apartment buildingat 97 Filleul was granted. In this Schedule 1 the Environment Court specificallyprovided:6. All construction activities are to be implemented in a manner thatmaximises the protection of adjoining properties and shall provide for:[3] Any significant effect on, intrusion into or reliance on theneighbouring property at 34 London Street is prohibited.[35] Then, in the advice notes attached to that Schedule 1, the Environment Courtstated at para [8]:Advice notes:8. This resource consent does not give the consent holder permission toundertake work on adjoining sites. Work on adjoining property canonly occur with the express permission of the relevant propertyowner/s. The consent holder is advised to familiarise themselves withthe legal requirements for undertaking construction works onadjoining sites, including temporary excavation.[36] Mr Anderson for the appellants made something of these matters. Hecontended that with these specific prohibitions in existence, the appellants feelproperly aggrieved that their property rights have now been effectively ignored in thiscase when the District Court granted the respondent's ss 319 and 320 application. Henoted that the starting point for a s 319 application is that property rights are inviolable,and that three key principles arise from the authorities on these provisions:(a) The Court is authorising a trespass when it is persuaded that it isappropriate to use the provisions of the PLA to overcome aneighbouring property owner's right not to be trespassed;(b) The authorisation is only permitted for statutory purposes; and(c) The authorisation is to be the minimum necessary to achieve thestatutory purpose.[37] Significantly, Mr Andersen pointed to the specific prohibition imposed on theresource consent conditions prohibiting any intrusion into or reliance on theneighbouring property at 34 London.[38] Although I accept there is something in this argument advanced byMr Andersen, it does not necessarily prohibit the District Court (as it did here) fromgranting access for construction purposes when the court considers it just and equitablein terms of s 319 and 320 of the PLA. What is clear is that there must be a principledbasis to justify a court authorising access in a case like this. The respondent says theevidence it provided from Mr J Lyons made clear that there were no other reasonablealternatives available to carry out the construction work in question other than throughthe limited access use of 34 London it sought. Ms Chadwick contended this waspurely a pragmatic issue which the District Court itself had noted. In the amendedapplication Ms Chadwick suggested the reduced period of use required (being now foronly a short period of time) and the far less intrusive specified purposes of the use (byway of a scissor lift rather than erected scaffolding) added to the desirability of itsapplication being granted.[39] From a very recent interim judgment in this Court, Jagose J in Body Corporate329331 (In Administration) v Escrow Holdings Forty One Ltd1 addressed similarissues under s 320 of the PLA:[30] Yet the section [s 320] relies for entry on exercise of the Court'sdiscretion, which must have some principled foundation. In Guo v Bourke[[2017] NZCA 609 at [11]], the Court of Appeal observed generally the 2007 Actgives courts "a range of special powers to deal with issues that often arisebetween neighbours". This included s 320, which it described as empowering"orders authorising owners of adjoining properties to enter onto each other'sland where reasonably necessary in connection with work required on theirown property." But the Court went on to say at [12]:The powers are remedial, and hence are typically expressed in broadterms. Generally, relief may be granted when the Court considers itjust and equitable, and orders may be made on such terms andconditions as the Court thinks fit. The Courts are thereforeempowered to make pragmatic but principled decisions incircumstances whereneighbours are unable to resolve differencesthat have arisen.[31] I would apply that test to the present application.1 Body Corporate 329331 (In Administration) v Escrow Holdings Forty One Ltd [2019] NZHC 600.[40] I agree that this is the test to be applied here. It requires a decision betweenthese parties to be both pragmatic and principled and in a situation where the Courtconsiders it just and equitable for relief to be granted.Appeal by way of rehearing[41] The PLA does not expressly provide a right of appeal here. The appellantstherefore rely on the general right of appeal from a District Court decision to theHigh Court pursuant to s 124 of the District Court Act 2016. This appeal is, therefore,to be by way of rehearing. The principles applicable to all general appeals wereoutlined in the Supreme Court decision in Austin Nichols & Co Inc v StichtingLodestar.2 In a general appeal like the present, this Court must form its own view ofthe merits. The appellants, however, bear the onus of satisfying this Court that itshould differ from the decision under appeal.3[42] In a case where there may be a mix of findings of fact and evaluative judgmentand the exercise of a statutory discretion then the issues on appeal may not be entirelystraightforward.4 In a case where an appeal is made against the exercise of adiscretion, the appeal court should not interfere unless the judge whose decision isunder appeal acted on a wrong principle, failed to take into account some relevantmatter, took account of some irrelevant matter or was otherwise just plainly wrong.5My decision[43] The consequences of the present appeal, in light of recent events and theconstruction progress that has been made, must mean in my view that the major itemof relief sought by the appellant here has been overtaken by these events and servesno practical purpose. Any question of referring this matter back to the District Courtto reconsider its decision would be entirely futile.2 Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103.3 Above n 2 at paras [4] – [5].4 Bethel v Bethel [2018] NZHC 3171 at [20].5 Above n 4 at [19].[44] The appellants, nevertheless, have chosen to proceed with this appeal tohearing. This is on the basis that they say they require "vindication" of their positionand a reconsideration of the costs question.[45] On this first matter, there is major disagreement between the parties, it seemsto me, on the evidence which was before Judge Christiansen in the District Court. Itis my view that little would be gained by endeavouring to trawl through these mattersnow long after the events in question have been completed.[46] Suffice to say I accept here that the decision of the District Court in grantingthe respondent's ss 319 and 320 application was a significant indulgence. I say thisparticularly bearing in mind the earlier Environment Court consent conditions, (notedat para [34] above) which initially prohibited any intrusion by the respondent into34 London in carrying out the development.[47] That said, there might well be something, as I see it, in the argument advancedby Mr Andersen that, Judge Christiansen in his decision may have paid insufficientattention to that Environment Court condition and the appellants' property rights in34 London. I say no more than that at this point however. Also, I make no definitivedecision on the 11 individual grounds of appeal advanced by the appellants before me.I note that they were all strongly opposed by the respondent.[48] The pragmatic outcome that in my view is needed on this appeal simplyrequires that I should set aside the orders for costs made by Judge Christiansen in hisdecisions under appeal. I now do so and I direct that costs with respect to all thosematters are simply to lie where they fall. This takes into account the fact too that, inmy view, although the respondent succeeded in its s 320 application it effectivelyobtained an indulgence in being permitted to have access to 97 Filleul, no doubt withsome beneficial cost-savings to it. The work for which access was required, as I havenoted, is now effectively completed.[49] That leaves one question outstanding. This relates to costs on this presentappeal to the High Court. Again I note, as I have recorded at para [2] above, that thiswhole matter involving the respondent's development at 97 Filleul has a long andtortuous history. It is hoped that the many differences that have arisen between theseneighbours, the appellants and the respondent, are now virtually at an end.[50] With this in mind and adopting what I see as a pragmatic approach here, I findthat costs with respect to the current appeal to this Court should also simply lie wherethey fall.Result[51] This appeal, in my view, having some merit is nevertheless largely otiose,given that from a pragmatic perspective it serves no useful purpose. Subject to [52]below, the appeal is effectively dismissed.[52] The order for costs in the District Court decisions under appeal is quashed.Costs on those matters and costs in this Court on the present appeal are to lie wherethey fall....................................................Gendall JSolicitors:Guest Carter, DunedinL A Anderson, Barrister, DunedinWebb Farry, Dunedin