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Dear everyone

This is a brief summary from a New Zealand Environment Law newsletter, of a case where the New Zealand High Court awarded damages for wrongful use of land in a cause of action based on trespass. It might be of interest to list members.

Paul Michalik

CPM35-SD96 Roberts, CA (formerly Ardern) -v- Rodney District Council
Local Government Act 1974, 16th Schedule 20 pages
Judgment Date: 2/2/2001 Barker J; High Court Auckland
Appearances: Berman, KW; Manilo, S; Heaney, DJ; Macky, S
Keywords: High Court; trespass to land; wrongful use of land; sewer pipe

A claim for damages after the Rodney District Council ("the Council") constructed a sewer pipe through a property owned by the plaintiff and her former husband as tenants-in-common. The plaintiff had received no notification of the proposed construction. In a reserved judgment of 2 October 1997, the Court had found that the Council was liable to the plaintiff for trespass to land. The plaintiff claimed the following damages:

$556,265 for trespass to land; particular losses scheduled in evidence; and, interests and costs.

The plaintiff claimed for damage to a certain part of the property and also for wrongful use. The Court held that a choice had to be made between these remedies. The plaintiff's preference was for wrongful use. The Court found that the plaintiff was entitled to claim for continuing, rather than past wrongful use, given that it had refused to grant an injunction because the balance of convenience had favoured the Council.

In looking at the principles of assessing such a claim the Court noted that wrongful use damages are an anomalous measure which assumes that the plaintiff has incurred loss, and the trespasser profit. They include principles of both compensation and restitution. In the Court's view, the correct starting point was the reasonable price for purchasing the right to do what otherwise would be a trespass. In this particular case, determination of a reasonable price involved costing the other options available to the Council at the time it would have negotiated to purchase the right of passage. It was established that the "Ardern option" for routing the sewer pipe was $208, 802 cheaper than the alternative. The Court concluded that half of this amount was a fair and reasonable proportion that a "willing but not anxious" Council would have paid. However, the Court also considered that it was fair to include maintenance costs, which brought the total price payable to the plaintiff to $144,401. The alternative basis on which the plaintiff could have recovered damages was the Council's undertaking to abide by a Court order for damages. As this amount, based on land valuation, was considerably less than damages on the basis of the tort measure, damages were awarded to the plaintiff on the basis of the tort and not the undertaking. The plaintiff was entitled to recover the full amount but was required to account to her former husband for half of it.

Costs arguments were to be heard after the judgment.

________________________________________
Paul Michalik

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