Everybody needs good neighbours… Supreme Court confirms the measured duty owed to neighbouring property owners for natural hazards

In Young v Attorney-General [2023] NZSC 142, the Supreme Court has dismissed an appeal seeking damages from the Crown for a hazard posed by neighbouring red zone land the Crown purchased following the Canterbury Earthquake Sequence.

Given the increasing frequency of severe weather events, and recent central and local government decisions regarding the purchase of private land impacted by natural hazards, this decision is significant for public bodies, insurers, and any substantial landowner.

 

What you need to know

• The Supreme Court has confirmed the orthodox approach to nuisance for a naturally occurring hazard that arises on land and harms (or poses a risk to) a neighbour’s property.
• Neighbouring property owners (including the Crown and local authorities) owe a “measured” duty of care for nature hazards on their property to do what is reasonable to address that hazard.
• What is “reasonable” requires a factual assessment, considering factors like: practicability; whether the hazard was solely on the defendant’s property or shared across both parties’ properties; any underlying statutory framework; and whether remedial work would benefit both parties.
• The scope of the Crown’s measured duty as a neighbouring property owner in this case was to warn the appellant (Mr Young) of the risks and assist with access to his property. Having done both of these things, the Crown had met its measured duty of care and it had no obligation to compensate Mr Young for his loss. 
• The Crown’s offer to purchase Mr Young’s redzone land was not related to its measured duty. The making of that offer is not something that would be required of a private landowner.
• More broadly, the Court noted that most leading authorities on nuisance stand apart from disaster response because they are easily removed or remedied. Natural disaster response belongs more in the realm of public law than tort law, and this is relevant to the nature of any duty owed.

 

What was the case about?

Mr Young’s land is situated below cliffs which were damaged during the Canterbury Earthquake Sequence in 2010/2011. The earthquakes caused rockfalls onto Mr Young’s property.

After his property was red zoned, the Crown made a series offers to purchase it (after deductions for EQC and private insurance proceeds). Mr Young rejected those offers and instead brought proceedings against the Crown in both trespass and nuisance, on the basis the Crown had become the neighbouring landowner following its red zone purchase of properties at the top of the cliff.

Mr Young initially wanted the court to require the Crown to remove existing rockfall and remediate future risk to enable his continued use and occupation of his land, or pay damages in the alternative. The former part of the claim fell away and, in the Supreme Court appeal, Mr Young only sought damages for the value he ascribed to property lost as a result of the cliff instability.

Mr Young argued that the cliffs are inherently unstable, and that the risk of future collapse arises from the parts of the cliff which form the Crown’s land. As a result, his argument was that the nuisance is the continuing instability on the Crown’s land. The Crown disputed this, arguing that the real reason for the risk is damage to the cliffs caused by the earthquakes, and that the rockfall source area is almost entirely on the cliff face, pointing to expert evidence given in the High Court.

 

Decisions in the courts below

The High Court dismissed Mr Young’s claim. It accepted there was an actionable nuisance as the Crown had a measured duty to prevent or minimise risk of harm. However, it held the Crown had discharged its duty with its red zone offer and that there was no obligation to compensate Mr Young fully for his loss.

The Court of Appeal upheld the High Court’s decision, agreeing that the Crown had discharged its measured duty.

 

The Outcome

Ultimately, the Supreme Court saw no reason to depart from the Court of Appeal's eventual finding that the risk was shared between both properties. After reviewing a long line of English and New Zealand authorities, the Court concluded

[68] This line of cases relevantly shows that there can be liability in private nuisance arising from a natural hazard where the defendant knows or ought to have known of it but does not take reasonable steps to prevent it. In this situation, the defendant is said to continue the nuisance. Where the defendant did not create the private nuisance but rather continues it, that gives rise to fault-based, rather than strict, liability. There is, as the respondent submits, an overlap with negligence in this area.

The Court confirmed that reasonableness is always a fact specific assessment, given the broad range of factors which can constitute a nuisance, and that the assessment will include foreseeability. The duty imposed is a measured one and requires consideration of what is practicable in the circumstances. Measured can be taken to mean “tailored and restricted”.

In this context, the Judges noted that most cases they were referred to involved nuisances which could be “abated with ease”. In Mr Young’s case, abatement would require significant effort and expense. The ease and practicality of mitigation will be relevant factors. It was also relevant that the Crown assumed liability in its role as a “rescuer” as part of significant legislative and policy response.

Ultimately, the Court held it would be unreasonable to require the Crown to remediate the cliff face in these circumstances given the expense and difficulties of its implementation. There was no certainty that resource consents would be granted. The cost of remediation could ultimately be more expensive than the value of what was preserved. The Crown acquired the land in the context of a natural disaster, ultimately as a complex policy response. Public law is better suited than tort law to respond to a situation of this type.

The Court further considered that the red zone offer was not related to the measured duty, as it is not something which would be required of a private landlord. The Crown discharged its duty by warning Mr Young of the risks associated with the property, and assisting with access.