Brouwers v Street

• Jurisdiction: New Zealand
• Judge: Randerson,Harrison,Hammond J [133],Gudsell
• Judgment Date: 13 October 2010
• Neutral Citation: [2010] NZCA 463
• Docket Number: CA374/2009
• Court: Court of Appeal
• Date: 13 October 2010

Between

Michael John Brouwers

Appellant

and

Brian Thomas Street

Respondent

[2010] NZCA 463

Court:

Hammond, Randerson and Harrison JJ

CA374/2009

IN THE COURT OF APPEAL OF NEW ZEALAND

Catchline: Appeal against a High Court decision which held that the respondent was not liable in negligence for a landslip which caused a decrease in value of the appellant's land — respondent had subdivided his land on which the appellant had constructed a house — respondent had constructed a drainage system on his property which had failed — whether the cause of the failure was heavy rainfall or a failure of the drainage system — whether a flume connected to the drainage system erected on the surface of the land was still an excavation of the purpose of the tort of removal of support—whether the respondent owed the appellant a duty of care—whether the appellant was entitled to the shortfall in the difference between the price the property was sold at and its previous valuation.

C T Gudsell QC and S C Herbert for Appellant

S W Hughes QC for Respondent

JUDGMENT OF THE COURT

• A The appeal is allowed.

• B Judgment is entered for Mr Brouwers against Mr Street for the sum of $286,495 together with interest fixed at Judicature Act 1908 rates from the date of issue of the proceeding.

• C Mr Street shall pay costs and disbursements in this Court for a standard appeal on a Band A basis together with disbursements to be fixed by the Registrar.

  D Mr Street shall pay the costs of the proceeding in the High Court, calculated according to category 2B together with disbursements and witnesses’ expenses. If the parties are unable to agree, costs, disbursements and expenses are to be fixed by the High Court.

REASONS

Randerson and Harrison JJ [1]

Hammond J [133]

Randerson And Harrison JJ

(Given by Harrison J)

Table of Contents
		Para No
Introduction	………………………………………………………………………………………………………….	[1]
Background	………………………………………………………………………………………………………….	[4]
Causation
Introduction	…………………………………………………………………………………………………….	[18]
The Brouwers’ experts	………………………………………………………………………………………	[24]
Mr Street's experts	……………………………………………………………………………………………	[44]
Conclusion	………………………………………………………………………………………………………	[55]
Removal of Support
High court	……………………………………………………………………………………………………….	[62]
Excavation	………………………………………………………………………………………………………	[66]
Extent of liability	………………………………………………………………………………………………	[83]
Duty of care
High Court	………………………………………………………………………………………………………	[93]
Nature of duty	………………………………………………………………………………………………….	[97]
Standard [104]
Negligence	…………………………………………………………………………………………………….	[108]
Damages	……………………………………………………………………………………………………………	[124]
Result	………………………………………………………………………………………………………………..	[132]

Introduction

1 One evening in February 2004, during a period of prolonged and heavy rainfall, a large slope collapsed into a gully in a rural area in Taranaki. The landslip occurred mainly within a property owned by the respondent, Brian Street. But it encroached upon the common boundary of an adjoining property owned by the appellant, Michael Brouwers and his former wife, Patricia, causing some of their land to subside also. The Brouwers had nearly completed construction of a new home in an area physically adjacent to the landslip area. As one expert observed after the slip, the house was “perched on the edge, it looked precarious”.

2 As a result of the landslip, the local authority would not issue a Certificate of Code Compliance for the Brouwers’ building without an engineer's confirmation of land stability. Because they were unable to afford the cost of erecting a retaining wall, the Brouwers sold the property at a price substantially less than its notionally unimpaired market value. They sued Mr Street in the High Court, claiming damages for the amount of the shortfall on sale. They alleged that Mr Street's commission of the torts of removal of support, negligence or breach of statutory duty caused their loss. In a reserved decision delivered following trial at New Plymouth, Andrews J dismissed all three claims. 1 In this Court, Mr Brouwers has confined his grounds of appeal to the first two causes of action. 2

3 The fate of Mr Brouwers’ appeal will be materially influenced by our conclusion on the cause of the landslip. Was it caused, as Mr Brouwers alleges, by the failure of a critical component of a drainage system erected on Mr Street's land which had the effect of sluicing away his right of lateral support? Or was it caused, as Mr Street asserts, by the forces of nature and in particular severe rainfall?

Background

4 We have drawn upon Andrews J's narrative to prepare a truncated summary of the background circumstances for our purposes.

5 Mr Street owned and occupied a rural property at Surrey Hill Road, inland from Oakura and situated on the northern slopes of the Kaitake Ranges, to the west of Mt Taranaki. Mr Street and a friend had acquired the property from his parents in 1988. In its original state the area of the property was more than 22 hectares and included a pond which Mr Street's parents had created in the area of an existing watercourse. The pond was a dam-like construction which was drained through a

combination of logs and earth, laid as a platform allowing water movement underneath and over the top as a ford when there was heavy rain

6 In 1995 Mr Street and his friend physically subdivided the land. Mr Street took the property to the north and his friend acquired an area to the south including the pond. Mr Street then constructed an access-way to his property off Surrey Hill Road following the route of a cattle track.

7 Construction of the access–way required Mr Street to alter the drainage from the pond. He dug an open channel on either side to channel water from the pond across the access-way at a point further in from the road, and on to another channel. Later in 1999 and 2000 Mr Street decided a more permanent solution was required. He installed an 800 millimetre steel culvert under the access-way so that it could be metalled. The pipe then led to the existing channel. From there the water was conveyed by a flume, which was an open, artificial water chute constructed of corrugated iron, at a 34 deg angle down a large bank into a gully filled with native bush. This was the bank which later collapsed. The effect of Mr Street's work was to divert the outlet away from its existing course by 30 metres to directly above the site of the slip.

8 Mr Street constructed the entire system. It was, as his counsel, Ms Susan Hughes QC observed, of a tripartite nature. The first part was the existing drainage channel from the swamp. The second part was the steel culvert. The third part was the channel's continuation into the flume. The flume, and the integrity of its right- angled concrete join to the channel, assumed central importance to the Brouwers’ case.

9 In 2001 Mr Street subdivided his land. He sold a one hectare block to the Brouwers on the western or Surrey Hill Road side. Mr Street purposely aligned the block's south-eastern boundary to ensure that the channel and flume drainage system remained on his land.

10 Mr Brouwers, who is a builder, decided to construct an adobe or mud brick style dwelling on a site not far from and above the bank which later collapsed. He

had earlier removed a row of 20 to 30 pine trees from near the eastern boundary and planted some natives there. Because the proposed dwelling was close to the south- eastern and south-western boundaries of the Brouwers’ property, adjoining Mr Street's property, the Taranaki District Council required the Brouwers to obtain Mr Street's approval before it would issue a building consent. Mr Street advised the Brouwers of a slip which had occurred earlier at the point of the original drainage from the pond but, nevertheless, gave approval. Mr Brouwers then commenced construction of the dwelling and also erected a water tank, pump shed and septic tank soak pit nearby.

11 In February 2004, just before Mr Brouwers had completed construction of his dwelling, NIWA recorded rainfall at New Plymouth airport of 398 millimetres. This reading was 416 per cent of normal and the second highest monthly rainfall since records began in 1863. It was agreed that, because of its elevation, rainfall at Surrey Hill Road would have been greater than that recorded at New Plymouth airport.

12 One of the heaviest days of rainfall was on 28 February. Mr Street, who has lived in the area for most of his life, said that it rained for 24 days continuously at Surrey Hills. Mr Street inspected the flume at about 7 pm on 28 February. His evidence, noted by Andrews J, was as follows: 3

I found a water course that was flowing like I've never seen water before. There was so much rain the flume appeared to have been working sufficiently to handle that [but] it was at its maximum. … I did venture down beside the flume and while doing that wanted to get the hell out of there straight away because the water under foot was soggy, the footing under ground was so muddy that with surface water running off it was hard to get a decent footing on that side of the bank. … The water in the ground was loaded up with surface water and the amount it was still raining over top.

13 Mr Brouwers felt a “land movement tremor” at about 9 pm that evening. There was “a very sharp movement and a thud”. He went outside and found “considerable subsidence right behind the barn”. He and his family then left the property because they believed it was unsafe to remain.

14 On 29 February a geologist, Mr Karl Browne, visited the site. He was impressed by the huge size of the slip. He noticed “a massive amount of earth had moved down into the...