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No 8 Wire Solution Costs Landowner $286,000

11 April 2011

What New Zealand farmer hasn't found a No 8 wire solution to a problem facing him on the farm? Unfortunately for Mr Street of rural Taranaki, his solution to his drainage problem had devastating and costly consequences.[i]

 

Mr Street's Drainage System

Mr Street constructed a drainage system on his property so that he could build an access-way. The drainage system carried water from a pond, along an open channel, through a steel culvert under the access-way, and then down a steep slope into a gully by means of a corrugated iron flume (or chute). The corrugated iron flume was supported by wooden trestles. The flume structure was held together by nails and no. 8 wire. In the words of Mr Street's neighbour Mr Brouwers, the flume was "flimsy".

 

The Landslip

In February 2004 there was unprecedented rainfall. The slope on which the flume was constructed collapsed into the gully. Mr and Mrs Brouwers had nearly completed building their adobe home on the land immediately adjacent to the landslip. (Mr Street had subdivided and sold this land to the Brouwers.)

After the slip Mr and Mrs Brouwers’ house was perched precariously on the edge. They could not afford the cost of the work required to obtain a Certificate of Code Compliance for the house so they sold it for substantially less than what it would have been worth if the slip had not occurred.

 

The Court Cases

Mr Brouwers sued Mr Street for the loss he had suffered. (By then Mr and Mrs Brouwers had separated.) Mr Brouwers' claim was unsuccessful in the High Court. Mr Brouwers appealed the High Court decision. The Court of Appeal found in favour of Mr Brouwers and ordered Mr Street to pay him $286,495 in damages. These damages were for the loss in value of his property ($260,000), miscellaneous damages ($6,495), and damages for stress and anxiety ($20,000). In respect of the damages for stress and anxiety, the judge commented that the landslip and consequential hardship would have imposed additional burdens on the Brouwers' marriage.

 

The Reasons Why Mr Street Was Liable

The Court of Appeal held Mr Street to be liable on two legal grounds:

  1. Removal of Support
    A landowner has a right to have his land supported by neighbouring land. If the neighbour removes that support, then the landowner can claim the loss he has suffered as a result. The Court said that the neighbour will be liable whether or not the neighbour is negligent, or whether or not the removal of support is by excavation or other non-natural means. (In this case the Court found that removal of support was the failure of the flume, which caused the slope to collapse, and not the severe rainfall. The Court accepted expert evidence that water from the open drain cascading down to the valley floor at the rate of 300 litres per second would have had significant sluicing power on the lower valley sides. If the Court had found that the slope had failed first causing the flume to fail, then Mr Street would not have been liable.)
  2. Negligence
    Mr Street failed in his duty to Mr Brouwers to take all reasonable and necessary steps to ensure the drainage system was sufficiently strong and safe to carry prolonged continuous rainfall without endangering Mr Brouwers' property. The construction of the flume was "questionable". Mr Street was liable even though the drainage system met the council's minimum requirements.

 

The Last Word

One of the Court of Appeal judges reflected that the strict liability imposed on a landowner who removes support from his neighbours' land is a property rule of "real antiquity", going back to cases as early as 1670. The rights to support are very important, particularly in water, oil and gas law.

Landowners would do well to heed the judge's caution: In New Zealand, which is a country with numerous cities and towns built on hilly terrain, persons undertaking land development have to take real care with those developments. 

 

[i] Brouwers v Street [2010] NZCA 463.

 

Please email me at barbara.mcdermott@nwm.co.nz with your ideas for future articles. Keep an eye out for next month's column, where I will discuss another relevant rural legal issue.

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Barbara McDermott is a partner of Norris Ward McKinnon, specialising in commercial and rural law. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.