FUGE & ORS v WIMAX NEW ZEALAND LIMITED [2022] NZHC 1121

FUGE & ORS v WIMAX NEW ZEALAND LIMITED [2022] NZHC 1121 [20 May 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-000202[2022] NZHC 1121BETWEEN MICHAEL and JULIA FUGE, BRYCEMARLOW TOWN, CHLOE ANNE FUGEand JULIA ELIZABETH FUGE as trusteesof the Aberdeen Four TrustAppellantsAND WIMAX NEW ZEALAND LIMITEDRespondentHearing: 24 March 2022Appearances: Adam Ross QC, Phil Ahern and Rayhan Langdana for theAppellantsKelly Quinn and Carter Pearce for the RespondentJudgment: 20 May 2022JUDGMENT OF MOORE JThis judgment was delivered by me on 20 May 2022 at 4:00 pmpursuant to Rule 11.5 of the High Court Rules.Registrar / Deputy RegistrarDate:Contents ParagraphNumberBackground .............................................................................................................. [1]FactsThe parties............................................................................................................. [7]The easement ......................................................................................................... [9]The arbitration ...................................................................................................... [17]Approach to appeal ............................................................................................... [23]Issues on appeal ..................................................................................................... [25]Did the arbitrator err by misinterpreting the rights set out in the2017 Easement and implied by the 2002 Regulations and the PLA? ................. [27](a) The 2017 Easement and the statutory provisions ................................. [28](b) Legal principles on right of way easements ......................................... [32](c) Wimax's interpretation of the rights conferred bythe 2017 Easement ................................................................................ [33](d) The appellants' interpretation of the rights conferred bythe 2017 Easement ................................................................................ [35](e) Did the arbitrator err in his interpretation of the 2017 Easement? ....... [36](i) Meaning of the clauses conferring a right of way ......................... [37](ii) Consistency with case law ............................................................ [49](ii) Consistency with the express terms of the easement .................... [61](iv) Consistency with the 2018 Regulations ........................................ [64](f) Conclusion on Question 1 ..................................................................... [68]Did the arbitrator misapply the "substantial interference with theeasement" test? .................................................................................................. [70](a) The "substantial inference with the easement" test .............................. [71](b) Wimax's submissions............................................................................ [73](c) Appellants' submissions ....................................................................... [74](d) Did the arbitrator misapply the "substantial interference with theeasement" test? ..................................................................................... [75]Should the matter be remitted to the arbitrator to consider the questionof remedy? ........................................................................................................... [79]Result ...................................................................................................................... [90]Background[1] This case is about a neighbours' dispute. They share a driveway whichconnects various properties in Glendowie, Auckland. The driveway is about 143metres long. It provides numerous properties (which would otherwise be landlocked)access to Riddell Road. The residents of these properties share access through a rightof way easement ("the ROW Easement"). The ROW Easement is 6.2 metres wide.However, the driveway occupies only part of the ROW Easement. In some places itis less than 3 metres wide.[2] From 2014 onwards, the respondent, Wimax New Zealand Ltd ("Wimax"),undertook renovations and constructed driveways and retaining walls which protrudeinto the ROW Easement. It built retaining walls, gates, entrance pillars, drains and aconcrete parking area. There is no dispute that these structures encroach into the areaof the ROW Easement. They do not, however, obstruct the driveway or impedemovement up or down it.[3] The appellants, who occupy a property at the end of the driveway and aretrustees of a trust connected to the Fuge family, asked Wimax to remove theencroaching structures. Wimax refused on the basis that the works did not impedemovement and to remove them would cost Wimax approximately $1.28 million.1[4] The parties took the dispute to arbitration.2 On 11 November 2020, the HonPaul Heath QC found that structures which encroach within the full width of the rightof way would only give rise to an actionable infringement if they were to obstruct agrantee's ability to use and enjoy the formed driveway. As they did not substantiallyinterfere with the driveway, he found that they did not unlawfully infringe the uponthe ROW Easement.1 My understanding is that Mr Ross QC, for the appellants, advised that this figure represented theestimated cost of removing the structures and subsequently reconstructing others to maintain thecurrent level of amenity. He says that simply removing the structures would cost in the order of$200,000.2 Land Transfer Regulations 2002, sch 4 cl 14 implies into every easement a dispute resolutionprocedure, ending with arbitration.[5] The appellants sought leave to appeal. On 20 September 2021, Katz J grantedleave on the following two questions of law:3(a) Question 1: Did the arbitrator err by interpreting the rights set out in theeasement instrument, and implied by the Land Transfer Regulations2002 ("the 2002 Regulations") and the Property Law Act 2007 ("thePLA") to mean that, in circumstances where there is an existing formeddriveway, structures that otherwise encroach within the full width of aright of way will only give rise to an actionable infringement if theywere to obstruct a grantee's ability to use and enjoy that existing formeddriveway?(b) Question 2: Did the arbitrator err by failing to apply the relevant legaltest, which is whether the obstructions or impediments Wimax placedor allowed to be placed on the ROW Easement were substantial, andtherefore actionable?[6] The substantive appeal now falls to be determined.FactsThe parties[7] The appellants are the trustees of a family trust called the Aberdeen Four Trust("the Trust"). In 2013, the Trust acquired the property at 515 Riddell Road. Michaeland Julia Fuge lived in the property until July 2014. Mr Fuge then obtainedemployment overseas. The Fuges left New Zealand for a number of years beforereturning to live at 515 Riddell Road in late 2018.[8] Wimax owns a property on the same driveway at 519 Riddell Road. For manyyears it was rented out to tenants. In around September 2016, the shareholders anddirectors of Wimax, Brett and Averley Dennerly, moved into the property. Since then,they have occupied it as their family home.3 Fuge v Wimax New Zealand Ltd [2021] NZHC 2470.The easement[9] The easement facility has existed for well over five decades. The originaleasement certificate was issued on 27 May 1964 ("the 1964 Easement"). In 2008, theutility of the 1964 Easement was called into question. The residents of the propertiesat that time met to discuss resolving the problems with the 1964 Easement. Thesediscussions continued for several years.[10] During this period, the owner of 515 Riddell Road was theHon Robert Fisher QC, formerly a Judge of this Court. On 28 September 2011, hecirculated a memorandum among affected owners in which he highlighted three issuesof concern with the 1964 Easement. In his view, the 1964 Easement omitted:(a) to express rights to use the accessway for services;(b) to clearly define mutually acceptable arrangements for theapportionment of maintenance costs; and(c) to provide for reinstatement in the case of damage caused by an ownerundertaking work on their property.[11] The residents successfully negotiated terms for a new easement, which wasregistered in 2017 ("the 2017 Easement"). It includes three separate easementfacilities, each prescribing different rights.4 The particular easement facility in issuein this case concerns vehicular access. The 2017 Easement provides for a vehicularright of way with a consistent width of 6.2 metres. However, the reality is that at nopoint does the driveway itself extend across the entire width of the ROW Easement.[12] The appellants complain about numerous structures along the ROW Easement.As noted, some of these were erected by Wimax. While the Fuges were overseas,Wimax renovated their driveway and adjacent surrounding areas. Other structureswere constructed by the owners of 517 Riddell Road, Tony and Lynda Rae. While thelatter works were for the benefit of the Raes, construction actually occurred on4 The easement facilities deal with vehicular access, pedestrian access, and the provision of services(such as optic fibre and telecommunications).Wimax's land. In summary, the encroaching structures placed on Wimax's landinclude several retaining walls; entrance pillars and gates; retaining wall planters;stone walls; drains; and a driveway connecting to a concrete parking area outside theDennerlys' downstairs flat.[13] At the arbitration, Mr Fuge gave evidence that while he and his wife wereliving overseas, they made occasional visits home. It was during these visits that theybecame aware of Wimax's works. Mr Fuge's evidence was that it never occurred tohim that Wimax (or any of the neighbouring residents) would carry out works whichwould encroach into the easement. For that reason, the Trust took no steps to checkwhether the structures were within the ROW Easement area.[14] The Raes began their works in late 2018 or early 2019. By this time the Fugeshad returned to New Zealand and were permanently living at 515 Riddell Road. TheFuges noticed that the Raes' works involved raising existing parts of the accessway.This concerned them.[15] They instructed surveyors to identify the boundaries of the ROW Easement.The surveyors produced a report which revealed the extent the structures protrudedinto the ROW Easement area. Mr Fuge said it was at this point that he first learnedthat the driveway was considerably narrower than the width of the ROW easement.[16] The Fuges raised their concerns with Wimax and the Raes. They asked themto remove the structures. They refused. This was followed by exchanges ofcorrespondence and meetings involving the residents and their solicitors. Wimaxsteadfastly refused to remove the structures. No settlement was reached.The arbitration[17] Under the provisions of the 2002 Regulations the dispute was referred toarbitration. The Hon Paul Heath QC was appointed arbitrator.[18] The Trust sought an order under s 313 of the PLA requiring Wimax to removethe encroaching structures, so as to ensure that the entire easement facility, over whichit had granted rights pursuant to the 2017 Easement, is free from any interference,impediment or restriction to the use of the area as a right of way.[19] The arbitrator noted that the 2017 Easement was subject to the implied termsin sch 4 to the 2002 Regulations and sch 5 to the PLA. None of the relevant clausesof those schedules had been excluded or varied by the express terms of the 2017Easement. The arbitrator interpreted the relevant provisions in the following way:"[37] Clause 6(3)(a) is one of the provisions that refer to a "driveway" ratherthan a "right of way". Clause 6(3)(a) confers a right to establish a driveway,repair and maintain an existing driveway and, where necessary for any ofthose purposes, to alter the state of the land over which the right of way isestablished. I interpret the chapeau to clause 6(3) to mean that a "driveway"may be created over the whole of the stipulated area, or part of it. By contrast,clause 6(3)(b) requires that the "easement facility" be "kept clear at all timesof obstructions to the use and enjoyment of the driveway".[38] Clause 6(3)(a) and (b) must be read together. In my view, thereference to "easement facility" in clause 6(3)(b) is intended to equate to thestipulated area in an easement facility, thereby capturing the whole width ofthe right of way created by (in this case) the 2017 Easement: namely, the widthof 6.2 metres. It follows that the term "driveway" is used to denote an actual(and usually formed) area over which vehicles pass and re-pass, whether thatis the same as or less than that comprised in an easement instrument. Forpresent purposes, the "right of way" comprises 6.2 metres but the "driveway"is the smaller area that is actually available for vehicles to use.[39] Applying the relevant implied terms [in the 2002 Regulations and thePLA], the 2017 Easement affirms:(a) The existence of a right of way of 6.2 metres;(b) The right to repair and maintain the existing driveway;(c) The ability to alter the existing driveway, if necessary for itsrepair or maintenance;(d) That the whole width of the right of way is to be kept clear, toensure that there are no "obstructions to the use andenjoyment of the driveway" [40] Put another way, any structures that encroach within the full width ofthe right of way will only give rise to an actionable infringement if they wereto obstruct a grantee's ability to use and enjoy the formed driveway. To provean actionable infringement, a nexus must be established between anobstruction to the right of way and an inability to use the driveway.[43] Read in the context of the clause 6(3) definition of "right of way" inSchedule 4 to the Regulations, clause 1(1) of Schedule 5 to the Act providesthe general right to pass and re-pass over the land on which the right of wayhas been granted, while clause 2(a) and (c) of Schedule 5 to the Act maintainsthe need for a nexus between the need to keep the right of way clear ofobstructions and an unreasonable impediment to the use and enjoyment of thedriveway itself."(emphasis original and footnotes omitted)[20] In light of that interpretation, the arbitrator considered that the structures werenot a substantial interference with the ROW Easement because they did not affect thefunctionality of the driveway. There was no evidence that the width of the drivewayhad been materially narrowed by the structures, nor that any other form ofunreasonable impediment to the use and enjoyment of the driveway existed. Thearbitrator distinguished Harvey v Hurley on the basis that that case concerned astructure that had been built on the part of the right of way which was used to pass andre-pass,5 in contrast to the present case.[21] He then dismissed the Trust's claims that the structures created a safety risk tousers of the driveway. The arbitrator considered that Mr Fuge's evidence alleging thatthe driveway was unsafe was unfounded. Instead, he accepted the contrary evidenceof Mrs Rae and Stuart Macky (an owner of 509 Riddell Road).[22] Nor did the arbitrator see any merit in the Trust's claim that the encroachingstructures hindered the development potential and reduced the value of the 515 RiddellRoad. He noted that the purpose of the ROW Easement was to provide a right of way.He considered that the possibility an owner might be denied the opportunity toeconomically benefit from developing their property did not undermine that purpose.In any event, he noted that such a development would require a discretionary consent,in which case the capacity of the driveway would be scrutinised. The arbitratortherefore considered that, without further information on the development potential ofthe property, it would be premature to grant relief even if the infringements wereactionable.5 Harvey v Hurley (2000) 9 NZCPR 427 (CA).Approach to appeal[23] This is an appeal against an arbitral award on two questions of law. The roleof the Court is to determine whether it has been established that the arbitrator erred inlaw within the terms of the questions of law formulated for the appeal.6[24] On appeal, the parties are bound by the arbitrator's findings of fact, howeverflawed they may be.7 The appellate Court's jurisdiction does not extend to anyquestion of whether the award was supported by evidence, or whether the arbitratordrew the correct inferences from the primary facts.8 Nor is there scope for the Courtto supplement the factual findings of the arbitrator with new facts.9Issues on appeal[25] The issues on appeal are:(a) whether the arbitrator erred by misinterpreting the rights set out in the2017 Easement and implied by the 2002 Regulations and the PLA;(b) whether the arbitrator misapplied the "substantial interference with theeasement" test; and(c) if the arbitrator misapplied the legal test, whether the question of reliefshould be remitted back to the arbitrator.[26] I shall deal with each of these questions in turn.Did the arbitrator err by misinterpreting the rights set out in the 2017 Easement andimplied by the 2002 Regulations and the PLA?[27] This is the first question of law posed by the appellants. It asks whether thearbitrator erred by interpreting the rights set out in the easement instrument and6 David Williams and Amokura Kawharu Williams & Kawharu on Arbitration (2nd ed, LexisNexis,Wellington, 2017) at [18.7.6].7 Pupuke Service Station Ltd v Caltex Oil NZ Ltd, reported as an appendix to Gold and ResourceDevelopments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318 (CA).8 Arbitration Act 1996, sch 2 cl 5(10).9 Shell (Petroleum Mining) Company Ltd v Vector Gas Contracts Ltd [2014] NZHC 31 at [40].implied by the 2002 Regulations and the PLA to mean that, in circumstances wherethere is an existing formed driveway, structures that otherwise encroach within the fullwidth of a right of way will only give rise to an actionable infringement if they wereto obstruct a grantee's ability to use and enjoy that existing formed driveway.(a) The 2017 Easement and the statutory provisions[28] The 2017 Easement is subject to the implied terms in sch 4 to the 2002Regulations and sch 5 to the LTA. As noted by the arbitrator, none of the relevantclauses of those schedules had been excluded or varied by the express terms of the2017 Easement.[29] Clause 6 of sch 4 to the 2002 Regulations provides for the right of way impliedin an easement:"6 Rights of way(1) A right of way includes the right for the grantee in commonwith the grantor and other persons to whom the grantor maygrant similar rights, at all times, to go over and along theeasement facility.(2) The right to go over and along the easement facility includesthe right to go over and along the easement facility with orwithout any kind of—(a) vehicle, machinery, or implement; or(b) domestic animal or (if the servient land is rural land)farm animal.(3) A right of way includes—(a) the right to establish a driveway, to repair and maintainan existing driveway, and (if necessary for any of thosepurposes) to alter the state of the land over which theeasement is granted; and(b) the right to have the easement facility kept clear at alltimes of obstructions (whether caused by parkedvehicles, deposit of materials, or unreasonableimpediment) to the use and enjoyment of the driveway."[30] The "easement facility", in relation to a right of way, is defined as the part ofthe surface of the land that is shown on a plan prepared for the purpose of specifyingthe easement and is referred to in a transfer instrument, easement instrument, ordeposit document.10[31] Clauses 1 and 2 of sch 5 to the PLA further provide for covenants implied ineasements relating to the general rights to pass and re-pass, and to establish andmaintain a driveway:"1 Right to pass and re-pass(1) The grantee and the grantor have (in common with oneanother) the right to go, pass, and re-pass over and along theland over which the right of way is granted.(2) That right to go, pass, and re-pass is exercisable at all times,by day and by night, and is exercisable with or withoutvehicles, machinery, and equipment of any kind.(3) In this clause, the grantee and the grantor include agents,contractors, employees, invitees, licensees, and tenants of thegrantee or the grantor.2 Right to establish and maintain drivewayThe owners and occupiers of the land for the benefit of which, and theland over which, the right of way is granted have the following rightsagainst one another:(a) the right to establish a driveway on the land over which the rightof way is granted, and to make necessary repairs to any existingdriveway on it, and to carry out any necessary maintenance orupkeep, altering if necessary the state of that land; and(b) any necessary rights of entry onto that land, with or withoutmachinery, plant, and equipment; and(c) the right to have that land at all times kept clear of obstructions,whether caused by parked vehicles, deposit of materials, orunreasonable impediment to the use and enjoyment of thedriveway; and(d) the right to a reasonable contribution towards the cost ofestablishment, maintenance, upkeep, and repair of the drivewayto an appropriate standard; and(e) the right to recover the cost of repairing any damage to thedriveway made necessary by any deliberate or negligent act of aperson bound by these covenants or that person's agents,contractors, employees, invitees, licensees, or tenants."10 Land Transfer Regulations 2002, sch 4 cl 1 definitions of "easement facility" and "stipulated area".(b) Legal principles on right of way easements[32] The relevant legal principles relating to right of way easements were largelyundisputed:(a) a right of way easement is not a right of ownership.11 The granteeacquires the right to travel over the burdened land to access their ownproperty.12 The grantor retains the right to use the land in a manner notinconsistent with the grantee's right to pass and re-pass;13(b) the grantee's right to pass and re-pass is not unfettered – it is limited tosuch use and enjoyment as is reasonable.14 There is accordingly noright to go over every square inch of the burdened land,15 nor to paveevery inch,16 only so much as is reasonable for the purpose of accessingtheir own land; and(c) where a structure pre-dates the grant of an easement, it is a question ofinterpretation of the instrument of the grant whether the right of waywas granted subject to, or free from, the obstruction.17(c) Wimax's interpretation of the rights conferred by the 2017 Easement[33] Mr Quinn, for Wimax, submits that the arbitrator cannot be criticised for hisinterpretation of the rights conferred by the 2017 Easement. He submits that cl 6(3)(b)is clearly worded. It prohibits only obstructions to the use of the driveway. Similarly,cl (2)(c) refers to "unreasonable impediment to the use and enjoyment of thedriveway". This, he submits, is consistent with the common law position that it is not11 Clifford v Hoare (1874) LR 9 CP 362 at 371.12 McKellar v Guthrie [1920] NZLR 729 (SC) at 731.13 Pettey v Parsons [1914] 2 Ch 653 (CA) at 667.14 Breslin v Lyons [2013] NZCA 161 at [29].15 F C Strick and Co Ltd v City Offices Co Ltd (1906) 22 TLR 667 (Ch) at 669; Pettey v Parsons[1914] 2 Ch 653 (CA) at 663 and 665; Emmons Developments (NZ) Ltd v RFD Investments LtdHC Christchurch, CP42/01, 4 July 2001 at [43]; and Keam v Theilman-Le Cornec Trust (2005) 7NZCPR 26 (HC) at [102].16 Butler v Muddle (1995) 6 BPR 13,984, (1996) ANZ ConvR 147 (NSWSC) at 13,986.17 Spear v Rowlett [1924] NZLR 801 (SC) at 804.any structure or object on a right of way that will be actionable, but only those thatsubstantially interfere with the use and enjoyment of the right of way.[34] Mr Quinn further submits that while other clauses refer to the "the land overwhich the right of way is granted" more generally, that is not a right to go over everysquare inch of the land. He submits that the prohibition is against obstructions "to theuse and enjoyment" of the easement facility, not merely any structures placed on theeasement area.(d) The appellants' interpretation of the rights conferred by the 2017 Easement[35] Mr Ross QC, for the appellants, submits that the arbitrator's interpretation wasin error. He submits that such an interpretation was unduly narrow. He seeks toemphasise the references in cl 1(1) to "the land over which the right of way is granted",and in cl 6(1) and (2) to the "right to go over and along the easement facility". Mr Rosssubmits that the cl 6(3) rights relating to the driveway are included in the more generalrights conferred by the preceding subclauses. He submits that this interpretation isconsistent with cl 10, the express terms of the 2017 Easement and the Land TransferRegulations 2018 ("the 2018 Regulations").(e) Did the arbitrator err in his interpretation of the 2017 Easement?[36] In my view the arbitrator erred in his interpretation of the rights conferred by2017 Easement. Specifically, through the proposition that "any structures thatencroach within the full width of the right of way will only give rise to an actionableinfringement if they were to obstruct a grantee's ability to use and enjoy the formeddriveway". My reasons follow.(i) Meaning of the clauses conferring a right of way[37] First, the arbitrator's interpretation rests on an unduly narrow construction ofthe clauses of sch 4 to the 2002 Regulations and sch 5 to the PLA.[38] Clause 6(1) of sch 4 provides that a "right of way includes the right for thegrantee at all times, to go over and along the easement facility". Clause 6(2)clarifies that the right may be exercised "with or without any kind of vehicle".Clause 6(3) then provides that the right includes the "right to establish a driveway"and to have "the easement facility kept clear at all times of obstructions (whethercaused by parked vehicles, deposit of materials, or unreasonable impediment) to theuse and enjoyment of the driveway."[39] In my view, the broadest right conferred by cl 6 is the sub-cl (1) right to goover and along the easement facility. The easement facility is, in general terms, theentire area of the right of way as described in the easement instrument. While thecommon law has clarified that there is no right to go over "every square inch" of theland, the purpose of that rule is to prevent the grantee insisting upon unreasonable useof that land. The grantor and grantee agree to the easement facility covering aparticular area. They together can set the boundaries of the easement as widely ornarrowly as they please. The grant then necessarily confers the right to pass and re-pass over that agreed area. While sub-cl (1) does not expressly say so, that area mustbe kept clear of obstructions which substantially interfere with the use of the easement.It is not possible to exercise the right to go over and along the easement facility, in itsentirety, if the easement facility is materially obstructed.[40] Sub-clause (2) clarifies how the right of way might be exercised. It listsparticular examples of things that the grantee might wish to bring across the easementfacility. One of those examples is "any kind of vehicle".[41] Sub-clause (3)(a) expands the right of way to include the rights to establish,repair and maintain a driveway. In doing so the grantee may alter the state of the landover which the easement is granted. Sub-clause (3)(b) then confers the right to havethe easement facility kept clear of obstructions to the driveway. The error in thearbitrator's approach was construing sub-clause (3)(b) as if it prescribed the onlyprohibition against impediments to the use of the easement facility. In my view the"driveway" and the "easement facility" are separate concepts which should not beconflated. Sub-clause (3)(b) clarifies that the driveway is a particular element of theeasement facility with which the grantee might wish to avoid interference. The grantoris nevertheless required to keep the remainder of the easement facility free fromsubstantial interference. A failure to do so would be at odds with both:(a) the broader right conferred by sub-cl (1) to go over and along the entireeasement facility; and(b) the right to alter the land within the easement facility for the purpose ofestablishing, repairing or maintaining the driveway.[42] A grantee can hardly exercise these rights when the right of way is obstructed.Sub-clause (3)(b) therefore does not narrow the application of sub-cl (1) in the waysuggested by the arbitrator – it is a specific example of the general right.[43] Clauses 1 and 2 of sch 5 are similarly drafted. Clause 1(1) sets out the generalright to "go, pass and re-pass over and along the land over which the right of way isgranted". That right is expressed in sufficiently wide terms to encapsulate the entiretyof the land over which the right of way is granted.[44] Clause 2 then sets out the specific rights relating to the driveway. Sub-cl (a)provides for similar rights to establish, repair or maintain a driveway. Sub-cl (c)provides for the right to have the land clear of obstructions, whether caused by parkedvehicles, deposit of materials or unreasonable impediment to the use and enjoymentof the driveway.[45] Similarly to cl 6(3), the rights conferred by cl 2 are a subset of the general rightof way conferred by the preceding clauses. Clause 2(c) cannot be read as confiningthe right of way in cl 1(1), particularly because it would only do so if the granteeactually decided to construct the driveway. If the grantee did not do so, the specificrights relating to the driveway would not apply and the grantee would enjoy a right ofway over the entire easement area. Nor can cl 2(c) affect the right to alter the state ofthe land for the purpose of establishing, repairing or maintaining the driveway in cl2(a). Placing structures on the easement facility, but not on the driveway, wouldimpede the grantee's ability to expand the driveway within the area of the easement.[46] This approach is consistent with cl 10 of sch 4, which provides:(a) for the right to use any easement facility already situated on thestipulated area or course for the purpose of the easement granted;18(b) for the right to lay, install, and construct an easement facility reasonablyrequired by the grantee if no suitable easement facility exists;19 and(c) that the grantor must not do and must not allow to be done on theservient land anything that may interfere with or restrict the rights ofany other party or interfere with the efficient operation of the easementfacility.20[47] A significant encroachment on the ROW Easement restricts the right to widenor develop the driveway in the event that it is required. This is inconsistent with thegeneral rights in cl 10.[48] It thus follows that I am satisfied the arbitrator's interpretation of these clauseswas unduly restrictive.(ii) Consistency with case law[49] The broader interpretation is consistent with case law.[50] In interpreting the rights conferred by the easement, the arbitrator distinguishedHarvey.21 Mr Ross submits that this was an error. He relies on the general principlestated in that case by Cartwright J, and endorsed by the Court of Appeal, that:22"The right is "uninterrupted and unrestricted to go pass and repass through over and along [the right of way]." The right is not restricted to anarrow passage of access and egress. It is conferred over all of the land andwould therefore include a right to walk over any portion of the land and toturn a vehicle on it."18 Clause 10(1)(a).19 Clause 10(1)(b).20 Clause 10(2).21 Harvey v Hurley, above n 5.22 At [19].[51] The arbitrator distinguished Harvey on the basis that the case "did not deal witha situation in which a structure had been built on that part of the right of way that wasused to pass and re-pass", in contrast to the present case.[52] I agree with Mr Ross that this interpretation was in error. The grantee inHarvey was concerned with the development potential of their land and wished toprotect a portion of the right of way which was not yet being used as a driveway andremained unsealed.23 The Court of Appeal rejected the appellants' submission that thegrant did not include this area and nor was it required for a reasonable user.24 TheCourt concluded that:25" the respondents are entitled to exercise the rights conferred by the grant.This means they are not only able to move to and from their property but alsothat, subject to any topographical or physical limitations, they may turn avehicle on the land subject to the right of way."[53] Harvey is analogous to the present case. In both, the grantee does notspecifically require the particular area of the ROW Easement to access its property.But the area could be used for that purpose and that increases the developmentpotential of the land. The principle, as stated by the Court of Appeal, that the granteeis "entitled to exercise the rights conferred by the grant" which are "not restricted to anarrow passage of access and egress", is applicable to the present case.[54] Mr Ross then relies on Guo v Bourke.26 There, Mrs Guo was the grantor of aneasement in favour of the Bourkes.27 There was a shared driveway within the area ofthe easement, but the total easement area was larger than that occupied by thedriveway.28 The parties agreed that about 50 per cent of the width of the easementarea was obstructed by planting and other impediments.29 Those impediments did not,however, obstruct the driveway.3023 At [10] the Court of Appeal reproduced Cartwright J's summary of the facts, which included thata "portion of the right-of-way, however, has not been used in that manner and remains unsealed.But the [respondents], although having no present intention to do so, may wish to redevelop theirproperty in the future to a higher density level and would then wish to use the right-of-way fully."24 At [14]–[21].25 At [20].26 Guo v Bourke [2017] NZCA 609.27 At [1] and [5].28 At [6].29 At [21].30 At [21].[55] The Court of Appeal recognised that the impediments did not "cause [theBourkes] any difficulty".31 Given the extent to which they encroached into theeasement area, however, the Court of Appeal upheld Duffy J's order that Mrs Guo wasrequired to remove the obstructions.32[56] Guo thus supports the proposition that structures which substantially encroachonto the area of an easement, but do not interfere with a formed driveway, arenotwithstanding contrary to the grant. To that end, the case is consistent with bothHarvey and my interpretation of the clauses conferring the right of way.[57] Mr Quinn submits that Breslin v Lyons is on point and supports the propositionthat structures (or objects) will only be actionable if they inhibit passage.33 In thatcase Mr Breslin applied for a declaration that he and his visitors were entitled to parkvehicles permanently on his strip of the shared rights of way provided that suchparking did not substantially obstruct the Lyons' right of access over that land.34 Onappeal, the Court of Appeal commented that:[24] Mr Breslin can only use his servient land in a way that does notderogate from the Lyons' right to pass and repass over his property. Parkinga vehicle permanently there will create an obstruction to that right if, as amatter of fact, it will hinder the Lyons' use of the area for access to theirproperty. That would constitute a substantial and thus unlawful interferencewith the rights of freedom and ease of passage conferred by the grant,amounting in law to a derogation from it.[58] The Court considered that if a car was to be commodiously wide, or to have itswing mirrors extended, or not be parked hard up against the fence, there wouldundoubtedly be an obstruction.35[59] Breslin is an example of a case where the particular obstruction could be sosubstantial as to render the right of way completely unusable. That is quite differentto the factual scenarios in Harvey and Guo. A lesser infringement on the right of waymay still be contrary to the grant and therefore actionable.31 At [62].32 At [62].33 Breslin v Lyons [2013] NZCA 161.34 At [10].35 At [31].[60] It follows that the case law supports the conclusion that the arbitrator erred ininterpreting the rights set out by the ROW Easement. That body of law is clear that astructure which is within the area of a ROW Easement, but does not interfere with aformed driveway, can constitute an actionable infringement.(ii) Consistency with the express terms of the easement[61] The broader interpretation of the rights conferred by the ROW Easement isconsistent with the express terms of the 2017 Easement. Clause 3 of the 2017Easement provides that:"3. In addition to the obligations implied by Schedule 4 and Schedule 5,the Residents shall keep and maintain the Right of Way in good orderand shall prevent it from becoming a danger or nuisance and at alltimes shall keep it in a reasonable condition. The Residents shallpromptly repair any potholes or large cracks in the Driveway. Wherepart of the Driveway is being resealed for any reason, the resealingmust extend at least 3 metres either side of the affected area of theDriveway."[62] Clause 3 again distinguishes between the "Right of Way" and the "Driveway".The "Driveway" is defined by cl 2(k)(vii) as "the formed driveway over the EasementAreas A to C". Easement Areas A through C are defined by reference to areas on theplan. The Driveway is clearly a part, but not necessarily the whole of the EasementAreas. If the Driveway always constituted the whole of the Easement Areas therewould be no need for separate definitions. Specific obligations attach to the Driveway.Of particular significance is if the Driveway requires resealing. Notably, the resealingmust extend at least three metres either side of the affected area of the Driveway. Thiscould well require the Driveway to extend beyond its existing width further into thearea of the ROW Easement.[63] The express terms of the 2017 Easement therefore support the broaderinterpretation that structures placed within the area of the ROW Easement, but notinterfering with the driveway, may nonetheless give rise to an actionable infringement.(iv) Consistency with the 2018 Regulations[64] Next, I turn to consider the 2018 Regulations, which succeeded the 2002Regulations. The 2018 Regulations obviously do not dictate the proper interpretationof the 2002 Regulations. But the background context to, and content of, the 2018Regulations may assist in interpreting the 2002 Regulations.[65] Clause 6 of the 2018 Regulations does not distinguish between the drivewayand the easement facility. Instead, cl 6(3) provides that:"(3) A right of way includes the right to have the easement facility keptclear at all times of obstructions (whether caused by parked vehicles,deposit of materials, or unreasonable impediment) to the use andenjoyment of the easement facility."[66] The "easement facility" is defined as "the surface of the land described as theeasement area, including any driveway".36[67] Neither counsel nor I have found an explanation for this change in wording. Itis possible that this iteration of cl 6(3) refers to the "easement facility", with that term"including any driveway", because the 2002 iteration of cl 6(3) provided for rightsonly over the driveway. A more likely explanation is that the use of "easement facility"in the 2018 iteration of cl 6(3) is an attempt to clarify the uncertainty in the predecessorprovision. The drafting of the 2018 Regulations more clearly expresses what in myview was always the position – that the driveway is an aspect of the easement facility,and that rights attach to the entirety of that easement facility.(f) Conclusion on Question 1[68] For these reasons, it is my view that the arbitrator incorrectly limited the rightconferred by the 2017 Easement to a right to pass and re-pass over the formeddriveway only. The correct interpretation is that the right conferred by the 2017Easement is to pass and re-pass over the entirety of the easement facility, includingthe driveway.[69] Question 1 is thus answered in the affirmative.36 Clause 1 definition of "easement facility".Did the arbitrator misapply the "substantial interference with the easement" test?[70] I turn to the consider the second question. This is whether the arbitrator erredby failing to apply the relevant legal test, which is whether the obstructions orimpediments Wimax placed or allowed to be placed on the ROW Easement weresubstantial, and therefore actionable.(a) The "substantial inference with the easement" test[71] In McKeller v Guthrie, Sim J set out the "substantial interference with theeasement" test:37Any wrongful interference with a right of way constitutes a nuisance but itis not every obstruction of the way which amounts to an unlawful interference.There must be a substantial interference with the easement and before thegrantee can complain of an obstruction it must be clear that the obstruction isoperating to the injury of the grantee [72] Whether an obstruction constitutes a "substantial interference" is a question ofdegree that turns upon the facts of the particular case.38(b) Wimax's submissions[73] Mr Quinn submits that the arbitrator correctly stated and applied the legal test.He submits that the structures do not substantially interfere with the reasonable use ofthe right of way. He submits that the use of the right of way is facilitated by the useof the driveway. The test, he submits, is not whether the thing itself is substantial, butwhether the interference with the use of the right of way (in these circumstances viathe driveway) can properly be characterised as substantial.(c) Appellants' submissions[74] Mr Ross submits that the arbitrator erroneously approached this issue from theperspective of whether a structure on an easement breaches the rights of a grantee touse an existing driveway. He submits that the proper approach is to consider whetherthere are obstructions on the easement, and then to consider whether those obstructions37 McKellar v Guthrie [1920] NZLR 729 (SC) at 731. See also Emmons Developments (NZ) Ltd vRFD Investments Ltd HC Christchurch, CP42/01, 4 July 2001 at [43].38 Spear v Rowlett [1924] NZLR 801 (SC) at 802.or impediments are substantial. Taking that approach, he submits that the conclusionwas inevitable that Wimax's structures were placed on the easement area andconstituted a substantial interference with that easement.(d) Did the arbitrator misapply the "substantial interference with the easement"test?[75] The arbitrator found that to prove an actionable infringement "a nexus must beestablished between an obstruction to the right of way and an inability to use thedriveway".[76] With respect, this was in error. There is no requirement to establish a nexusbetween the obstruction and the formed driveway. The rights conferred by the 2017Easement relate to the entirety of the easement facility. The driveway is a particularaspect of the right of way to which further, more specific, rights attach. It is not theonly element of the right of way. That conclusion is consistent with the express termsof the 2017 Easement and those implied by the 2002 Regulations and the PLA, thecase law, and the 2018 Regulations.[77] The "substantial interference with the easement test" must therefore beassessed by reference to the entire area of the ROW Easement. It is undisputed thatthere are several permanent structures which encroach into the area of the ROWEasement. When viewed from this perspective, the conclusion that those structuressubstantially interfere with the easement is inescapable.[78] Question 2 is answered in the affirmative.Should the matter be remitted to the arbitrator to consider the question of remedy?[79] Answering both questions in the affirmative leads to the conclusion that thearbitrator erred in law. The finding that the structures are a substantial interferencewith the easement necessarily leads to the question of remedy.[80] On the determination of an appeal against an arbitral award on a question oflaw, the High Court may, by order:39(a) confirm, vary, or set aside the award; or(b) remit the award, together with the High Court's opinion on the questionof law which was the subject of the appeal to the arbitrator forreconsideration.[81] The Trust seeks an order that Wimax remove the infringing structures. Wimax,on the other hand, submits that the appropriate course is to remit the matter back tothe arbitrator to determine remedy.[82] Mr Ross' principal submission in support of remedy being dealt with by thisCourt was to avoid the costs associated with remitting the matter. He submits that thenature of the dispute is neighbourly and that it is unsatisfactory for the costs associatedwith the matter to escalate by remitting the matter back to the arbitrator to decide. Hefurther submits that the remedy is obvious to the extent that the wrongfully placedstructures must be removed.[83] I am acutely aware of the fact that this is a dispute between neighbours and thatcontributing to the escalating costs by remitting the matter back operates in favour ofthis Court determining remedy. I also accept that finality is a relevant considerationin play here. However, I cannot accept Mr Ross' submission that the remedy isobvious in the present case. Put bluntly it is not, for the reasons which follow.[84] Where there is a substantial interference with an easement, remedies lie at thediscretion of the authority determining the dispute.40 That discretion is broad. The39 Arbitration Act 1996, sch 2 cl 5(4).40 Property Law Act 2007, s 313.authority may make an order, on any conditions that it thinks fit, relating to (amongother things):41(a) the question whether any work is work required to be done under theterms of an easement and, if so, the nature and extent of any requiredwork at the time in question;(b) the reasonable and proper cost of any required work, including intereston outlay, expenses of survey, and reasonable remuneration for thesuperintendence or work of a person entitled or person bound who is orhas been personally engaged on that work;(c) the person or persons by whom the cost of any required work is to beborne and, if the cost is to be shared among two or more persons, theshares to be borne by each of them; and(d) the time at or before which, and the manner in which, any required workis to be undertaken.[85] The ROW Easement has existed since 1964. For almost 60 years theneighbours living along the easement have harmoniously and co-operatively sharedthe driveway. Over that entire period, the area of the property where the structureswere built does not seem to have ever been used for the purpose of passing and re-passing. Certainly, they do not appear to have caused any material obstruction to thosepassing up and down the driveway. The portion of the area which is now a concreteparking area was historically covered in vegetation. The area includes the privatedriveway connecting 519 Riddell Road to the shared accessway. It is inclined at areasonably steep gradient that would, on the face of it, be unsuitable for vehiclespassing and re-passing. To excavate and level that portion of the land to avoidencroachment into the easement would be no simple or inexpensive task. Taking intoaccount these circumstances and the broad discretion of the arbitrator as to remedy, itis by no means plain that the appropriate remedy is simply to order that the structuresbe removed.41 Section 313(1)(c)–(f).[86] Having found that the appellants' claim failed, the arbitrator did not considerthe question of remedy. He has not yet had the opportunity to exercise his discretion.In my view the arbitrator is in a uniquely advantageous position to do so. Over thefour-day hearing he received a substantial volume of material. He undertook a sitevisit. He heard and saw witnesses who were tested in cross-examination. I do nothave the advantages he has in this regard.[87] Additionally, further evidence relevant to remedy is likely to be necessary. Theambit of any additional evidence is potentially wide, including enquiries such as whatfuture development plans might any of the parties have? How realistic are these?What are the likely physical, compliance and resourcing impediments to any suchdevelopment? What are the indicative costs? How and to what extent do the presentintrusions into the easement affect any such proposals? These and other issues godirectly to the question of remedy.[88] Furthermore, I am not inclined to accept Mr Ross' submission that theinfringing structures can simply be removed, with responsibility then being put on theparties to agree upon an appropriate course of action to deal with the site. Given theregrettable history of animosity between neighbours I have no confidence that anyform of agreement is capable of being reached. The parties have evidently attemptedand failed to settle the dispute. The arbitrator may need to impose further conditionsto ensure that any process required to implement remedial orders operates effectively.It may be that the removal of the structures is not the appropriate approach at all.Assessing that issue and the complexities which surround it is much moreappropriately determined by a highly experienced and able arbitrator who is wellfamiliar with the site, the parties, the evidence and the core issues engaged.[89] For those reasons, I am easily satisfied that the proper course is to remit thequestion of remedy to the arbitrator and I so order.Result[90] The appeal is allowed.[91] Questions 1 and 2 are answered in the affirmative.[92] The matter is remitted to the arbitrator to consider and determine the questionof remedy.Moore JSolicitors:Mr Ross QC, AucklandMr Ahern, AucklandMr Langdana, AucklandMr Quinn, AucklandMr Pearce, Auckland