Handforth v Kokomoko Farms Ltd

• Jurisdiction: New Zealand
• Judge: Wild J
• Judgment Date: 21 January 2010
• Neutral Citation: [2010] NZHC 3
• Docket Number: CIV 2009-441-000477
• Court: High Court
• Date: 21 January 2010

Between

John Anthony Handforth and Olive Florence Handforth

Appellants

and

Kokomoko Farms Limited

Respondent

[2010] NZHC 3

CIV 2009-441-000477

IN THE HIGH COURT OF NEW ZEALAND

NAPIER REGISTRY

Appeal against decision determining extent of a rural right of way — whether Judge incorrectly decided that fence constructed on right of way were illegal — whether Judge erred in terms of relief granted — issue of rural rights of way

Counsel:

A M Gallie for the Appellants

M A Courtney for the Respondent

JUDGMENT OF Wild J

Introduction

1 The primary point on this appeal is whether the District Court correctly determined the extent of a right of way over the appellants' rural property at Porangahau in the Hawkes Bay. Though dependant on a favourable answer to that primary point, the appellants also assert that the Judge incorrectly decided that fences built by the appellants on the right of way were illegal, and erred in terms of the relief he granted to the respondent.

2 The appeal is against the judgment of Judge Rea given on 24 June 2009 in the District Court at Waipukurau.

3 The grounds of appeal raise these questions:

• (1) Interpretation: Did the Judge correctly construe the right of way, in particular in respect of the respondent's rights to use it for its farming operations?

• (2) Interference: Was the Judge correct to find that fences and a sign erected by the appellants on the right of way substantially interfered with the respondent's rights to use the right of way?

• (3) Jurisdiction: Did the Judge err in assuming jurisdiction to make an order restraining the appellants from building further structures on the right of way?

• (4) Compensatory damages: Did the Judge err in finding the respondent had established losses of $4,530 resulting from the appellants' interference with its right of way?

• (5) Exemplary damages: Was the Judge wrong in finding the respondent had met the threshold for awarding exemplary damages?

4 The appellants seek an order quashing all the relevant orders made by Judge Rea, on the grounds that they are wrong.

Background

5 In 1990 the respondent purchased a block of farm land adjoining, to the south, its existing, and main, farm property on Porangahau Road, Waipukurau. I will call this Kokomoko Farm. It then subdivided off from Kokomoko Farm a small (4.9 hectares or 12 acres) piece of that land containing a farm cottage, with the intention of selling it as a ‘lifestyle block’. At the same time the respondent, then still registered proprietor of the lifestyle block, created a right of way over part of the lifestyle block by executing an Easement Certificate subsequently registered on 3 October 1990. By operation of s 90A Land Transfer Act 1952, the Certificate gave Kokomoko Farm, as dominant tenement holder, the following rights and powers set out in the Seventh Schedule to the Land Transfer Act 1952:

The full, free, uninterrupted, and unrestricted right, liberty, and privilege for the grantee, his servants, tenants, agents, workmen, licensees, and invitees (in common with the grantor, his tenants, and any other person lawfully entitled so to do) from time to time and at all times by day and by night to go pass and repass, with or without horses and domestic animals of any kind and with or without carriages, vehicles, motor vehicles, machinery, and implements of any kind, over and along the land over which the right of way is granted or created.

6 The appellants are the third owners of the lifestyle block: the transfer to them was registered on 11 April 2000. In short, they were not privy to the circumstances in which, or the purposes for which, the right of way was created. The appellants do not directly challenge the Judge's findings about that which were:

[4] In his evidence Mr Henderson (a director of Kokomoko Farm) said that the right of way was created to provide the main access to the woolshed and cattleyards which he described as the hub of the farming operation. He said for those reasons the easement was kept of sufficient width between the woolshed gate and the road gate so that mobs of cattle and sheep could be controlled and turned comfortably with dogs. At the road gate there was an area for a mob to assemble before being released on to Porangahau Road. He said that the survey line was taken up the hill rather than along the drive so that trucks could unload directly on to the bank near the road gate if that was necessary.

[5] I accept the evidence that Mr Henderson has given about this. It is obvious by the very dimensions of the right of way and the shape of it that it was created as it was to ensure Mr Henderson could continue an efficient farming operation both then and into the future.

7 At the end of this judgment is a copy of the plan of the right of way drawn in 2008. I have added labels giving some additional detail. Depicted on the 2008 plan with dot/dash lines (coloured brown on the plan put in evidence) are the fences built by the appellants on the right of way. It was the building of those fences which precipitated this litigation. Those fences, and the differences between the parties which precipitated their construction, were described by the Judge thus:

[7] Over the years there were arguments and differences of opinion between Mr Henderson on the one hand and Mr and Mrs Handforth on the other about the right of way. Mr and Mrs Handforth believed that Mr Henderson's farming operations were substantially damaging parts of the right of way and that he was not properly maintaining the right of way. They also believed that the manner in which he used the right of way for the movement of stock and heavy vehicles was contrary to the terms of the right of way.

[8] The disagreements between the parties became increasingly bitter and more heated. On 21 August 2007 Mr and Mrs Handforth began building post and rail fences on both sides of the driveway which runs through the right of way. When they had completed the fence it went for the full length of the right of way and created what could only be described as a constraining channel of about 4 metres width down the length of the right of way. I have visited the site with Counsel and I am aware of the dimensions of the right of way from the plans shown to me and the markers at the site. The fences built by Mr and Mrs Handforth are substantial structures which in most parts of the right of way considerably constrict the usable space.

8 In [6] I said the appellants do not directly challenge the Judge's findings as to the circumstances in which and purposes for which the right of way was created. The appellants did call evidence from Ms Angela Wilson, who was the first owner of the lifestyle block. The transfer from Kokomoko Farm to Ms Wilson was registered on 21 February 1991, and in evidence she said she left the property in 1995. In his submissions Mr Gallie referred to Ms Wilson's evidence:

… insofar as it relates to the representations made by Myles Henderson to her concerning the intended limited use of the easement and also as to the actual use especially in the first six months of her occupation of the cottage …

9 This is obviously a reference to paragraph 3 of Ms Wilson's statement of evidence in which she stated:

3. We purchased the above property late in 1990 or early 1991 and there was a gentleman's hand shake between myself, my husband and Myles that a right of way would only be used on occasion and we would hardly see Myles on the easement however this changed after about 6mths after the purchase of the property, and in part, this was no rush to erect fences.

10 I consider the gist of Ms Wilson's evidence (both in her written statement and her oral evidence to the Court) was this:

• • The respondent's cattleyards, sheepyards and woolshed on Kokomoko Farm were all there before the right of way was created.

• • That section of the southern boundary of the right of way bounding with farmland owned by a third party was fenced throughout. The northern boundary (with Kokomoko Farm) of the right of way was not fenced until “about 12 months after (Ms Wilson) purchased the property”.

• • When the northern boundary was fenced, there was only one side gate, giving access to the woolshed. A further gate was added later, next to the cattleyards.

• • The right of way was not much used by the respondent for the first six months. It was used by trucks carting fertiliser and stock through to the respondent's farm property, and occasionally for moving sheep. The use of the right of way for moving mobs of cattle and for unloading and loading cattle from the cattleyards began only after the northern boundary of the right of way was fenced.

• • Ms Wilson used the right of way to graze her own stock and therefore the gate onto Porangahau Road was kept shut. In commenting about this grazing of the right of way Ms Wilson stated:

  … He (Myles) didn't charge us and that was just the way it was at the time.

  (Transcript 43/26)

11 I have included that last quote from Ms Wilson's evidence because it seems to me to indicate confusion on her part about the status of the right of way. She seems not to have understood that it was her land, and that no question of Kokomoko Farm charging her to graze her stock on it could possibly have arisen.

12 Under cross-examination Mr Henderson substantially agreed with Ms Wilson's evidence, although he disagreed that the right of way was little used for the first six months. He considered the level of use had been fairly constant since the respondent acquired Kokomoko Farm. Questioned about side gates in the northern boundary fence, giving access from Kokomoko Farm into or out of the right of way, Mr Henderson explained that there were three:

• a) A wooden gate beside the cattleyards installed when the fence on the northern boundary of the right of way was built (this was against Ms Wilson's wishes, but pursuant to...