Plaza Investments Ltd v Queenstown Lakes District Council - Rice Speir
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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE CIV-2017-425-65  NZHC 1925 BETWEEN PLAZA INVESTMENTS LTD Appellant AND QUEENSTOWN LAKES DISTRICT COUNCIL Respondent Hearing: 4 October 2017 Appearances: L MacDonald for the Appellant N M H Whittington and R J Gibson for the Respondent Judgment: 31 July 2018 JUDGMENT OF CULL J TABLE OF CONTENTS Factual background  Pre Tree-fall in 2014  Post Tree fall in 2014  District Court judgment  Approach to appeal  Grounds of appeal  Did the Judge err in defining the scope of the duty of care owed by the Council?  Parties’ positions  The law on duty of care  Discussion  (a) The duty of care  (b) Standard of care  (c) Policy considerations  Conclusion  Was there insufficient evidence to find the Council had breached the duty of care owed?  The Judge’s findings on breach  The parties’ positions  The law on breach of the duty of care  The nature and foreseeability of the potential risk  The evidential basis for a breach finding  PLAZA INVESTMENTS LTD v QUEENSTOWN LAKES DISTRICT COUNCIL  NZHC 1925 [31 July 2018]
The inconsistent findings made by the Judge  (a) Reliance on one expert’s interpretation of another expert’s work  (b) The Council’s visual assessments since 2007  (c) Internal testing may not have been helpful  (d) The meaning of “dozy”  (e) The relevance of the Lower Shotover Road tests  The subsequent risk assessment approach  The pleadings objection  Findings on breach  Conclusion  Was there a causal link between the Council’s breach of duty and the damage caused to Plaza’s property?  The law on causation  Discussion  Conclusion  Result   During high winds in January 2014, an “over-mature veteran” poplar tree (the Tree) in Queenstown’s St Omer Park snapped from its root crown, falling across the road into a motel property opposite, causing extensive damage. The Tree was under the control of the Queenstown Lakes District Council and the motel owner, Plaza Investments Limited, sued the Council in negligence for the breach of its duty of care.1  Plaza appeals the oral District Court judgment, determining that the Council had not breached its duty of care, and therefore was not liable to Plaza for any losses caused by the falling Tree.2 Plaza seeks to recover its losses from the Council’s breach of its duty of care, namely, its failure to take reasonable care to minimise or prevent the risk of the Tree causing damage.  The question in this appeal is whether the District Court Judge erred in his articulation of the duty and standard of care owed by the Council and his consequential conclusions on the evidence of breach.  At the outset of this appeal, both parties submitted that as the evidence was largely of an expert nature, uncontentious and based on documentary evidence, the lower Court’s usual advantage in seeing and hearing witnesses is not significant in this case. 1 The parties are referred to in this judgment as the Council and Plaza. 2 Plaza Investment Ltd v Queenstown Lakes District Council  NZDC 12589.
 I find that the District Court Judge erred and that the Council is liable to Plaza for the damage caused. I base my finding on the following conclusions: (a) the Judge erred by restricting the scope of the duty of care owed by the Council to one of inspecting and maintaining its trees. The duty of care on the Council was to take reasonable steps to prevent or minimise known hazards on its land from causing damage to its proximate neighbours; (b) the Judge erred in failing to apply an objective test to the standard of care on the Council. The standard of care is to take such steps, as are reasonable for a local authority with similar hazards, powers and resources; (c) it was reasonably foreseeable that internal decay was a major risk for the over-mature poplars in St Omer Park and that the probability of one or more of these trees falling, including this Tree, from their compromised structure, was more likely than not to occur within the foreseeable future, causing damage to the neighbouring property; (d) there is sufficient evidence, on the balance of probabilities, to find the Council had breached its duty of care as set out in (a) above; and (e) there was a causal link between the Council’s breach of duty and the damage caused to Plaza’s property.  Plaza is therefore entitled to damage for its losses. Factual background  Plaza owns a lakeside motel on Lake Esplanade in Queenstown. During high winds on 17 January 2014, the 30-metre-tall 120 year old Lombardy poplar tree located on the Council’s land in St Omer Park (the Park), snapped at its root crown and fell onto Plaza’s property. Plaza’s property suffered extensive damage, particularly to the eastern end motel units, its signage, a garden and some cars. There
is no dispute that the total cost to repair that damage was $63,577.72.  Inspection of the Tree showed its base was severely afflicted with white rot. This was causative of its falling in the high winds. White rot results from a fungal attack on a tree and commonly enters through the roots of a tree. Older poplar trees are more prone to white rot.  This was not the first time a poplar tree had fallen in one of the Council’s reserves. In late 2004, a poplar tree in the Park fell on an abandoned car parked on Lake Esplanade. In September and November 2009, two trees fell on Queenstown’s Lower Shotover Road, one of which killed a person.  Following the previous three tree-fall incidents, the Council arranged inspections and received expert reports in relation to the poplar trees in the Park, Speargrass Flat Road and Lower Shotover Road.  Three types of testing were undertaken on the Park trees in the relevant period. The type of tests carried out were:3 (a) Visual tree assessment (VTA), which does not intrude into the tree trunk. It is a visual examination to determine whether changes in the trees could be an indicator of the tree’s health or condition. A mallet or hammer may be used to take soundings of the tree trunk to listen for changes in density or signs of decay; (b) Picus Tomograph testing, which involves mechanical intrusion through the bark of a tree using a series of sonic sensors connected to pins. The pins are tapped to test the relevant part of the heartwood. The device measures the velocity of sound waves in wood to detect decay, damage and cavities in the wood; (c) Resistograph testing, which involves mechanical intrusion into a tree by driving fine needles into the heartwood. It measures drill resistance 3 Plaza, above n 2, at .
to locate areas of decay, hollows, cracks, ring structure and other structural integrity issues.  I refer to the latter two tests as “internal tests” in this judgment. Pre Tree-fall in 2014  In January 2005, City Care undertook Picus Tomograph testing of the trees in the Park and on Lower Shotover Road. The report said that the trees appeared to be about 100 years old, were coming to the end of their lives and had a low to medium safe useful life expectancy (five to 10 years). The report recommended that the Council: (a) regularly inspect the trees every six to nine months; (b) arrange for a qualified arborist to inspect every 12 to 18 months; and (c) institute a phased felling plan, in which certain trees are removed and replaced as part of a rolling programme of maintenance.  In March 2005, the Council’s Director of Parks advised the Council to adopt City Care’s recommendations and to prepare a 10 year tree management programme “for felling and replacement planting in” the Park with a related increase in the tree maintenance budget.  The Council obtained resource consent to remove four poplars and crown clearing of 12 others as the City Care report had recommended, but did not implement the recommended phased felling programme.  In 2007, as a result of further tree-fall from strong winds in Speargrass Flat Road, the Council’s Parks Manager commissioned a detailed report on the health of the trees in Speargrass Flat Road.  The initial inspection was undertaken by Mr Glenn, the Council’s consultant arborist, who was asked to inspect 120 Lombardy poplars on Speargrass Flat Road.
He undertook a VTA and used a sounding hammer. The Glenn Report, dated 19 January 2007, identified a number of trees in Speargrass Flat Road, which he described as exhibiting “signs of decay”. He recommended “these be probed with a resistograph to establish the extent of decay pending a final decision on the removal of the trees.”  In April 2007, the Council’s Parks Manager engaged Horttraining New Zealand Limited (Hort) to resistograph test the poplar trees in Speargrass Flat Road and reassess the trees in the Park, as it had been three years since City Care’s testing and report. Hort observed in its report (as the Judge recorded) that:4 … Lombardy Poplar trees are not noted for having solid heartwood or good compartmentalisation properties/barriers (that aid in the restriction of decay spreading throughout a tree’s structure). Due to this propensity, it is reasonably common to observe hollows and decay in the structure of older Lombardy Poplar trees …  The Hort report: (a) contained resistograph readings for each poplar tree in the Park and Speargrass Flat Road variously depicting categories of sapwood/bark, soft/dozy wood, young wood/dozy, dozy wood, decay or “appears sound”; (b) recommended that a total of 23 Lombardy poplars and one grey poplar at the Park be monitored by a suitably experienced and qualified arborist on an annual basis to detect further signs of decay and/or decline; (c) described the subject Tree as having “dozy” timber. The resistograph reading, for the Tree, contained this explanation:5 Drilled in a south westerly direction, some soft/dozy wood found between 4 cm and 8.5 cm otherwise appears sound. Recommend yearly monitoring. (d) did not recommend that any of the trees in the Park be felled. 4 Plaza, above n 2, at . 5 The Tree’s resistograph reading is in the Appendix.
 There was no explanation of the term “dozy”. The dictionary definition of “dozy”, in respect of timber, is “in a state of incipient decay” or “so decayed as to be soft and useless” for trees and timber.6 The evidence on “dozy” is explored further under breach of the duty of care.7  On 1 August 2007, the Council’s Parks Manager8 briefed the Council on the Hort report findings. He explained to the Council that he sought a reassessment of the Park’s trees, by resistograph testing, because it had been over three years since the last report on them and that report recommended “regular inspections of the poplar trees to ensure they were safe and healthy.” He noted that the recommendations for the trees in the Park were:9 quite straightforward and will be undertaken as part of our regular tree maintenance programme.  In 2009, following a tree-fall on Lower Shotover Road, Asplundh completed an inspection report of the Lombardy poplars on Lower Shotover Road. Asplundh inspected the remaining 66 trees by VTA, to assess their health and safety. It reported that the fallen tree: … provides evidence in conjunction with other external signs to suggest the majority of these populus trees’ inner cores are compromised and that these trees are in decline and have poor or failing health.  Asplundh recommended the removal of all of the trees to ground level or indefinite road closure because of “the hazard” posed by the line of poplar trees. The Council did not follow that recommendation immediately but rather resolved to have all remaining poplar trees in Lower Shotover Road tested by resistograph.  In November 2009, the Council commissioned Buddinghtree Consultancy Ltd (Buddinghtree) to undertake digital testing of the Lower Shotover Road trees. Buddinghtree did an initial VTA test on the trees, in the course of which it tapped all 6 Lesley Brown (ed) The New Shorter Oxford English Dictionary on Historical Principles: Volume 1 (Clarendon Press, Oxford 1993) at 740; and Isaac K Fund (ed) Funk and Wagnalls New Standard Dictionary of the English Language: Volume 1 (Funk and Wagnalls Co, New York, 1924) at 754. 7 At  of this judgment. 8 Previously this role was the Director of Parks. 9 Plaza, above n 2, at .
trees with a sounding hammer. The Judge recorded that:10 The results it reported on its initial VTA test were significantly different from those reported from its follow up digital test.  The digital test identified significant decay and noted the trees were compromised in stability by soft wood and minor cavities. It found that only three of the trees were sound and the remaining trees tested were “unsafe”. As the safety of the three sound trees would have been compromised by the removal of the others, it recommended the removal of all the trees. It also recommended that a succession plan for the trees be implemented.  In January and March 2010, Asplundh completed a visual assessment of the Park trees and recommended the removal of one of them. The tree had not been removed at the time the Tree fell into Plaza’s motel.  Apart from the use of resistograph testing by Hort in 2007, the Council’s consultants conducted visual tree assessments only as part of the Council’s general tree maintenance. The Council did no internal testing of the trees in the Park from 2007 until this Tree fell in 2014.  The last inspection of the Tree before it fell was conducted by Asplundh New Zealand in October 2013. This was a visual assessment only. The Council’s arborist subsequently explained that there was no record of any arborist recommending that the particular Tree be removed and it appeared to Asplundh to be one of the better specimens in the Park. Post Tree fall in 2014  Following the Tree-fall in 2014, the Council contracted Greenscene to do an inspection. Greenscene did a visual assessment and resistograph testing and reported: (a) the main areas of decay caused by white rot were within the base of the fallen Tree. The decay caused the Tree to snap at the base; 10 Plaza, above n 2, at  (emphasis added).
(b) the visual tree assessments showed the trees to be in good health. The resistograph tests showed the presence of decay to varying degrees in virtually all the Lombardy poplars. The grey and black poplar trees had a greatly reduced level of decay compared to the Lombardy poplars; (c) the Lombardy poplars were “over-mature” and problems associated with old age were showing up in the form of cavities and heartwood decay; (d) the Park is relatively exposed. It experiences strong winds, snow, ice and rain and has high foot traffic; and (e) the potential risk to persons and/or property from part or whole of a Lombardy poplar tree falling is of concern. This is due to the frequent use of the Park and the adjoining buildings.  In summary, three important facts about the Tree emerged from the trial evidence: (a) The Tree is a Lombardy poplar. These are relatively fast growing and have a short typical lifespan of 50–70 years.11 (b) The “heart” of the Tree was significantly compromised by white rot which, together with a strong wind, was a material cause of the Tree’s fall.12 (c) White rot is a consequence of a fungal attack on a tree. White rot enters through the roots and older poplars such as the Tree are more prone to it.13 11 Plaza, above n 2, at . 12 At . 13 At .
District Court judgment  At the District Court hearing, the following experts were called by the parties:14 (a) Dr Wakeling, a biodeteriatian consultant and wood protection scientist with over 25 years’ study, work and expertise in wood decay. (b) Mr Roberts, an arborist with over 25 years’ experience, a former president of the New Zealand Arboriculture Association and former industry leader and trainer of arborists. (c) Mr Webb, an arborist with 17 years’ experience. (d) Mr Earp, an ex-arborist with 10 years’ experience. (e) Mr Mackinnon, an arborist with over 40 years’ experience and the author of the City Care report.  The Judge focussed initially on Plaza’s pleading. Plaza pleaded that: (a) The Council owed it a duty of care to exercise reasonable skill and care in inspecting and maintaining the poplar trees on the reserve land to ensure they pose no risk to safety or neighbouring property. (b) In breach of that duty, the Council failed to: (i) identify the existence of white rot in the poplar tree that fell on the property; (ii) take all reasonable necessary precautions to minimise the risk of the tree falling.  The Judge rejected the Council’s suggestion that Plaza’s claim was framed as a strict liability duty but confirmed that the claim was in negligence. The Judge observed that in the absence of any decided New Zealand case exactly on the point, the case should be determined on settled negligence principles.  The Judge confirmed the New Zealand approach to a duty of care encompassed 14 Plaza, above n 2, at .
three dimensions: proximity, foreseeability and consideration of policy.15  The Judge was “overwhelmingly” satisfied that the Council owed a duty of care to undertake inspection and maintenance of the trees, including the Tree, in the Park.16 He held that the standard of care was the standard that a reasonable local authority would have applied in January 2014, in view of all the information then available.  However, the Judge concluded, that based on the evidence before him, he was:17 not in a position to draw any definitive conclusions on whether or not the Council’s approach to monitoring inspection as at January 2014 fell short of a typical local authority practice. The evidence, for what it is, suggests the contrary.  The Judge held Plaza failed to meet the onus on it and did not establish the pleaded duty of care on the Council to undertake internal or resistograph testing of the trees after 2007. He said that even if resistograph testing had been carried out, there was no assurance that the decay issues would have been detected.  The Judge found the Council had acted on appropriate expert advice. There was no reason, he said, to find that it did not act as a reasonable local authority would have in the circumstances. He held there was insufficient evidence for a finding that the Council was in breach of its duty of care. Because of this finding, the Judge did not go on to determine the issue of causation. Approach to appeal  This is a general appeal from a District Court decision.18 The established 15 Plaza, above n 2, at  and , citing Body Corporate 207624 v North Shore City Council  NZSC 83,  2 NZLR 297 [Spencer on Byron]; and North Shore City Council v Attorney-General  NZSC 49,  3 NZLR 341 [The Grange]. 16 Plaza, above n 2, at . 17 At . 18 This is an appeal under s 72 of the District Courts Act 1947, which provided a general right of appeal to the High Court from District Court decisions. This provision has subsequently been repealed and replaced by s 124 of the District Court Act 2016, which provides for a similar general right of appeal. The 2016 Act came into force on 1 March 2017, however, because Plaza filed their amended statement of claim in the District Court in December 2015, the 1947 Act still applies
principles for general appeals apply.19 The appellant bears the onus of satisfying the appellate court that its decision should differ from that under appeal,20 the appellate Court is entitled to its own assessment of the merits of the case.21 Grounds of appeal  The issues for determination on appeal, as amended, are whether the Judge erred by: (a) restricting the scope of the duty of care owed by the Council;22 (b) determining there was insufficient evidence to find the Council had breached the duty of care owed; and (c) determining that even if the Council did breach its duty of care, there was no causal link between the breach and the damage (both physical and economic) caused to Plaza’s property.  I will deal with each of the issues in turn, with the respective parties’ submissions addressed in relation to each. Did the Judge err in defining the scope of the duty of care owed by the Council? Parties’ positions  First, Plaza submits the Judge incorrectly defined the scope of the duty of care as being that of a reasonable local authority, rather than a reasonable landowner. Plaza contends that the Judge limited the scope of the duty of care and then decided that he could not decide in favour of Plaza, because he did not have evidence of what other local authorities might be doing with similar trees. Plaza says this was a legal error which then led inevitably to a series of errors of evidential sufficiency, evidential to this proceeding; see District Court Act 2016, sch 3, cl 5(1). I note that the wording of the two provisions is almost identical. 19 Austin, Nichols & Co Inc v Stichting Lodestar  NZSC 103,  2 NZLR 141 at . 20 At . 21 At . 22 This ground of appeal is reframed. Plaza had pleaded that the error was defining the duty of care owed by the Council as being that of a reasonable local authority and not a reasonable landowner.
weight and simple errors of fact.  Second, Plaza submits the correct duty of care is that of a reasonable landowner with access to the resources, knowledge and expertise about safe tree maintenance that the Council had available to it, compared to the resources available to an ordinary landowner.23 The standard of care of an occupier is what is reasonably expected in the occupier’s individual circumstances.24 Plaza submits that the individual circumstances of the Council give it far greater resources than the ordinary person.  On the other hand, the Council submits the Judge did not err in assessing the duty of care, sourced from the Council’s position as administrator of the Park or landowner. The Council agrees with the Judge’s characterisation of the scope of the duty: to undertake inspection and maintenance of the trees in the Park. The Council was aware that the trees were coming to the end of their useful lives, but it had no knowledge that any of the trees – let alone the Tree that fell – were suffering from rot or decay. The risk was not an obvious one,25 but was latent and required ongoing monitoring, inspection and maintenance. A reasonable landowner without its own expert arboreal knowledge cannot be expected to do more than to instruct and rely on expert advice.26 The Council argues it did this. The law on duty of care  The claim in this case is one of negligent omission. It involves the application of negligence principles to the duty of care on a landowner/occupier local authority with a known hazard on the lands it controls.  The Supreme Court reviewed the application of negligence principles in the 23 Plaza cites a number of cases in support of its position: J L Tindall v Far North District Council HC Auckland CIV-2003-488-135, 20 October 2006 at ; Easton Agriculture Ltd v Manawatu- Wanganui Regional Council  1 NZLR 120 (HC) at ; Goldman v Hargrave  1 AC 645 (PC) at ; and Double J Smallwoods Ltd v Gisborne District Council  NZHC 1284 at –. 24 Goldman, above n 23, at . 25 As compared with the situation in Goldman, above n 23, and in Smallwoods, above n 23, where shrubbery was on fire and immediate action was required by the landowners. 26 Relying on Caminer v Northern and London Investment Trust Ltd  AC 88 (HL) where the landowner failed to have an elm tree inspected, but was not found liable because the evidence showed that even if the tree was inspected the issue that caused the tree to fail would not have been found.
context of local authorities in North Shore City Council v Attorney-General (The Grange). It endorsed the following two-stage approach to the finding of a duty of care:27 (a) the loss must be a reasonably foreseeable consequence of the plaintiff’s act or omission and occur within a relationship that was sufficiently proximate (assessing the closeness of the connection between the parties); and (b) it is fair, just and reasonable to impose the claimed duty of care in the circumstances (weighing up broader policy considerations or implications for the community in recognising or denying a duty).  The Judge specifically referred to the New Zealand courts’ approach to the duty of care by reference to The Grange and Body Corporate 207624 v North Shore City Council (Spencer on Byron)28 and the established principles of proximity, foreseeability and policy considerations. He accepted that Plaza’s claim is one of negligent omission and considered the duty on an occupier of land, with a hazard liable to threaten neighbouring property. The following cases were referred to, in part, by the Judge, and are relevant.  In Goldman v Hargrave, the Privy Council held that a landowner has a general duty of care to a neighbouring occupier, in relation to hazards occurring on that land (regardless of their cause).29 In that case, the hazard was a fire on the appellant’s land. The duty is to take such steps as are reasonable for a person in the shoes of the landowner to prevent or minimise the risk once the landowner is, or should have been, aware of it. The Privy Council said:30 in general terms that the existence of a duty must be based upon knowledge of the hazard, ability to foresee the consequences of not checking or removing it, and the ability to abate it. 27 The Grange, above n 15, at –. 28 Spencer on Byron, above n 15. 29 Goldman, above n 23, at 662. 30 At 663.
The standard to be required of landowners31 was what was reasonable to expect of them in their individual circumstances. In Goldman, the Court upheld that the landowner was negligent by omission as he had failed to respond adequately to a fire caused by a third party.  I now consider the three relevant New Zealand cases, which examined the imposition of a duty on local authorities, in occupation or control of property with inherent or potential risk.  In J L Tindall v Far North District Council, the plaintiffs were oyster farmers, whose farms had been contaminated with norovirus causing an outbreak of gastro- enteritis.32 The plaintiffs alleged that in times of moderate or heavy rainfall, raw sewage was discharged downstream to the farms from the nearby sewerage reticulation and treatment plant. The treatment plant was operated by the Far North District Council.  Winkelmann J considered the application of negligence principles to local authorities in circumstances where the common law duty imposes a duty to take steps that a reasonable authority would have taken in similar circumstances. Her Honour noted that financial resources of the local authority are relevant to assessing the nature of the duty:  When the defendant is a local authority … given the practical reality for such bodies of limited funding and often competing priorities for those funds. In Crimmins v Stevedoring Industry Finance Committee Gaudron J considered the special considerations that applied when considering the nature of any duty on a public body: A public body or statutory authority only has those powers that are conferred upon it. And it only has the resources with which it is provided. If the common law imposes a duty of care on a statutory authority in relation to the exercise or non-exercise of its powers or functions, it only imposes a duty to take those steps that a reasonable authority with the same powers and resources would have taken in the circumstances in question.  The issue of limitation of resources effecting local authorities, and competing priorities are often taken into account when determining the 31 The use of “landowners” in this judgment refers to landowners, occupiers and controllers of land. 32 Tindall, above n 23.
existence and scope of the duty, as opposed to whether a duty held to exist has been breached…  There, Winkelmann J held the evidence established that the Far North District Council had limited funding, and had applied all available resources to identify defects in the sewerage reticulation system after consulting with experts to identify priorities and address those priorities as funds became available. The Council had proceeded properly in allocating the limited resources it had to the most pressing priorities.  In Easton Agriculture Ltd v Manawatu-Wanganui Regional Council, the plaintiffs’ land was inundated following the breach of a stopbank of the Moutoa floodway, which was managed and maintained by the Regional Council.33 Kós J held the Council owed the plaintiffs a duty of care in monitoring and maintaining the stopbank. That duty was supported by the statutory scheme. There was sufficient proximity between the Council (as the owner of the stopbanks) and the adjoining landowners and occupiers (whose rates substantially funded stopbank maintenance), to find that it was just and reasonable that a duty existed. The Judge said that:34 landowners in New Zealand may be held to owe a duty to maintain their land and to take positive steps to prevent harm to adjacent landowners resulting from the operation or use of their land.  More recently, Goldman has been applied in Double J Smallwoods Ltd v Gisborne District Council.35 In Smallwoods, Thomas J found that the Gisborne District Council owed a duty of care as a landowner in relation to a fire that started in pampas grass on the Council’s land and then spread to the plaintiff’s land, causing widespread damage. The Judge noted there is no authority that the status of the landowner as a territorial authority is somehow relevant to the existence of that duty.36 Rather, the determining factor in the existence of the duty is control over the land where the hazard arises. The Judge held that a duty of care was owed by the Council. It was aware of the fire hazard posed by the pampas grass on Council land, such that it had previously taken action to clear the vegetation. In addition, it was aware that for some years, fires had been illegally lit in the rail corridor adjoining the plaintiff’s 33 Easton Agriculture, above n 23. 34 At . 35 Smallwoods, above n 23, at . 36 At .
property and the Council land.  From those authorities on negligent omission by landowners, the following principles emerge: (a) landowners have a general duty of care to a neighbouring occupier in relation to hazards on their land; (b) the duty is to take such steps as are reasonable for a person in the shoes of the landowner to prevent or minimise the risk, once the landowner is aware of it; (c) the standard required of landowners is what is reasonable to expect of them in their individual circumstances; (d) the identity of the landowner is irrelevant. The common law imposes the same duty of care on a statutory authority landowner. The determining factor in establishing the existence of the duty is the control over the land where the hazard arises; and (e) the duty on a statutory authority is to take the steps that a reasonable authority with similar hazards, powers and resources would have taken in the circumstances.  The two-stage approach in The Grange is reflected in the above principles, as foreseeability of damage is inherent in the landowner’s knowledge of risk, and proximity is assessed by the threat to neighbouring land.37 The broader policy issue which is relevant is whether it is just and reasonable to impose a duty of care on a local authority in considering the steps a reasonable authority with similar powers and resources would have taken in the circumstances. 37 The Grange, above n 15, at –.
Discussion  Both parties accepted that the Judge correctly identified that Plaza’s claim was one of negligent omission and that the Council was “as the administrator of the reserve, effectively in the position of landowner”.38 The first issue is whether the Judge incorrectly narrowed the duty of care.  I turn then to analyse the Judge’s findings, applying the principles from the authorities as summarised at above. There are three aspects to the Judge’s finding on the duty of care, which are the focus of my analysis: (a) the articulation of the duty of care; (b) the applicable standard of care; and (c) the policy considerations. (a) The duty of care  The Judge held that there was no general duty to act for the benefit of others. However, he accepted it was well established that there can be a positive duty to act in “various circumstances”.39 Such a circumstance is where a landowner has a hazard on its land which is liable to threaten neighbouring property. The Judge referred to Winfield and Jolowicz on Tort, which states:40 An occupier is under a duty not only to [its] visitors but to take steps to remove a hazard on [its] land which threatens neighbouring property even though it has arisen from the act of nature or of a third party – property is a source of obligation as well of rights.  The Judge confirmed the evidence “overwhelmingly establishes” that the Tree posed a threat to Plaza’s motel.41 Importantly, he found that the evidence demonstrated that:42 38 Plaza, above n 2, at . 39 At . 40 Edwin Peel and James Goudkamp Winfield and Jolowicz on Tort (19th ed, Thomson Reuters, London, 2014) at [5–045], cited in Plaza, above n 2, at . 41 Plaza, above n 2, at . 42 At .
(a) “an apparently healthy young tree of this height and species is capable of unexpectedly failing even on a sunny day”; (b) the Tree, “estimated at more than 30 metres in height, is clearly capable of spanning the road to hit the motel”; (c) aggravating that inherent risk was the fact that this Tree was “a veteran of its species”; (d) at its age the Tree is “prone to disease (including in the vicinity of its root crown)”; and (e) “the Tree was in an exposed environment capable of compromising it and in a strong wind event exposing the motel to an increased risk of being hit.”  The Judge found that a reasonable local authority at that time would have considered the unanticipated fall of a similar poplar tree. The Council was informed of the characteristics of the poplar species; the incidents associated with similar aged poplars in the Park and elsewhere in Queenstown; and the felling of the trees in the Park, due to the issues identified. By January 2014, the Council had received various reports and recommendations from qualified arborists, many of which recommended “regular inspection and maintenance.”43  The Judge went on to find there was a duty of care on the Council that a reasonable local authority would be expected to apply, with the knowledge the Council had available to it at the time. He said he was “overwhelmingly satisfied on the evidence that the Council owed a duty of care to undertake inspection and maintenance of the trees on the reserve.” This included the Tree in issue.44  The authorities establish that the duty on a landowner is to take reasonable steps to prevent or minimise the hazard or risk on their land from harming 43 Plaza, above n 2, at . 44 At  (emphasis added).
neighbouring land or occupiers, once the landowner is aware of the risk.  I consider that the Judge erred by defining the Council’s duty of care as a duty to inspect and maintain its trees, rather than a duty to undertake such steps as were reasonable to minimise or prevent known risk of damage from its trees, including the Tree.  The Judge erred in defining the duty in three ways: (a) he formulated a duty of care, which fell short of the Goldman formulation and the positive duty, to which he had already referred;45 (b) he formulated the duty in the context of the 2010 District Tree Policy, on which the Council’s tree maintenance programme is based. He overlooked the fact that the Policy does not focus on the management of the known and inherent risks associated with the Council’s aged poplar trees; and (c) he misstated the advice from the arborists’ experts to the Council to undertake inspection and maintenance of its trees, and overlooked their recommendations.  First, in finding the duty of care on the Council is limited to one of inspection and maintenance, without the additional duty to prevent or minimise the known hazards in the Park from causing damage, the Judge inappropriately restricted the duty on the Council. I consider he overlooked the Goldman duty on the Council to manage its risk, i.e. to prevent and minimise the known risks. The Judge did refer to “the positive duty to act in such circumstances” earlier in his judgment (a standard which the New Zealand authorities have not yet adopted)46 but gave neither it nor the principles affecting landowners further consideration in reaching his findings.47 45 Plaza, above n 2, at . 46 In Easton Agriculture Ltd (above n 23 at ) Kós J posited whether landowners in New Zealand may be held to owe a duty to maintain their land and to take positive steps to prevent harm to adjacent landowners. The positive duty has not yet been adopted in New Zealand. 47 Plaza, above n 2, at  and .
 Second, when defining the Council’s duty of care, the Judge observed that the District Tree Policy (the Tree Policy), together with the District Plan, was part of the context within which a reasonable local authority could have been expected to act at the relevant time and is one of various potentially relevant considerations.48 The Judge recognised that the Tree Policy (or the District Plan) does not single out special treatment for the Park trees. As he observed, the Tree Policy gives emphasis to heritage protection on the basis that consent can be obtained on a discretionary basis to take “proper account of health and safety issues.”49  The question is, however, whether adherence to the Tree Policy by the Council was reasonable, in the management of its high risk trees. The Tree Policy may well have been reasonable for a Council with the care and control of trees generally. Here, however, the Council had a known hazard with its veteran or aged poplars. The Tree Policy does not focus on how to prevent or minimise damage or danger, in the Council’s retention of the mature Lombardy poplar trees on its land. In particular: (a) the Tree Policy does not address health and safety issues for the public or property, unless a tree is identified for removal;50 (b) public safety is only mentioned twice in this policy; (c) it is the fourth criteria in the prioritisation of tree maintenance;51 and (d) the Tree Policy primarily concerns maintenance work to be carried out on trees generally and, as the Judge observed, gives emphasis to heritage protection.  The Council’s adherence to the Tree Policy, without more, did not meet its duty to control its risk associated with veteran poplar trees. 48 Plaza, above n 2, at . 49 At . 50 The Policy also provides that work on trees be carried out according to recognised and accepted contemporary arboricultural standards, industry practices and guidelines from the New Zealand Arboricultural Association and/or International Society of Arboriculture. 51 Plaza, above n 2, at .
 Third, the Judge’s characterisation of the expert reports as recommending regular inspection and maintenance only, was incomplete. As with the restricted duty of care, this inappropriately constrained the Judge’s finding on the applicable standard of care.  As set out above,52 the reports recommended among other things, regular inspection of these trees every six to nine months; inspection and monitoring of the 23 Lombardy poplars by a qualified arborist every 12 to 18 months to detect further decay and/or decline; and that the Council should institute a phased felling programme of removal and replanting of the trees.53 The focus of those reports was on regular monitoring and detection to prevent further risk or damage, not just inspection and maintenance.  Importantly, the Council’s Parks Manager followed the City Care recommendation to reassess the Park trees “to ensure they were safe and healthy”, by commissioning the resistograph testing in 2007, because it had been “over three years since the last report.” However, no further internal tests of the Park trees were undertaken by the Council from 2007 until the tree-fall in 2014.  I consider the error in the Judge’s formulation of the restricted duty of care on the Council has led to further error in the Judge’s consideration of the applicable standard of care.54 (b) Standard of care  The Judge found that the standard of care on the Council was “the standard that a reasonable local authority would have applied in January 2014 in view of all the information then available.”55 The Judge found that “a reasonable local authority at the time would have considered the unanticipated fall of a similar poplar in the reserve, which prompted the City Care report in 2005.” He accepted the Council would have “been informed of the nature of this Poplar species common to this District and the 52 At – of this judgment. 53 At  of this judgment. 54 At  onwards of this judgment. 55 Plaza, above n 2, at .
incidents associated with similar aged poplars in Lower Shotover Road and the facts of the trees that have fallen in the reserve or were felled (due to identified issues).”56  The Judge then embarked on a consideration of the “nature of the duty of care” with his assessment of whether the duty had been breached.57 This led the Judge to focus on what a reasonable authority would have done in terms of maintenance and inspection in January 2014, in view of the information then available.  The Judge accepted the evidence of Mr Webb (one of the Council’s expert arborist witnesses) that this Council’s practice in tree maintenance and inspection was consistent with what he saw other local authorities do.58 Mr Webb had conceded in cross-examination that he based his opinion on his limited knowledge of local authorities. The Judge acknowledged Mr Webb’s limitation but relied on it as the only evidence before him, albeit that it was limited.59  The Judge found that he had “no sound basis for determining what a reasonable local authority would have considered as full inspection, including how far it would consider it ought to go to identify the presence or otherwise of white rot or to minimise the risk of the tree falling.”60  I consider there are two problems with the Judge’s reasoning and finding on the applicable standard of care.  First, the standard of care must be that of a reasonable council with a known hazard or risk. Although the Judge was correct to define the standard of care as that of a reasonable local authority in the Council’s position in January 2014, he has focussed on whether the Council’s approach to monitoring and inspection fell short of “typical local authority practice” and what a reasonable authority would consider as “full inspection.”61 56 Plaza, above n 2, at . 57 At  onwards. 58 At . 59 At . 60 At . 61 At  and .
 The standard of “a typical local authority” or a “reasonable Council” will only be relevant if those councils have the same or similar risks. The Judge failed to apply the standard of care required by a reasonable Council with these known risks, which he had identified at the outset. The Council’s duty was to minimise or prevent damage from them.62  Second, the standard of care must be viewed objectively. In assessing the evidence on other authorities’ practice, the Judge accepted the evidence of Mr Webb, who “attested in essence that what he experienced the Council was doing was consistent with what he saw other local authorities do.”63 Mr Webb said that in his experience, visual assessments are most commonly relied on by councils for assessing the large tree populations under their care, but acknowledged that he did not have a full understanding of the practices of all councils, only the ones he has worked with, in Auckland in particular.  There was no evidence that the other Councils referred to by Mr Webb had to manage over-mature poplars, with known potential defects and risk. Although Mr Webb said he was aware of poplar trees and their susceptibilities, he did not have experience of working with a Council with a known hazard or risk of decay in over- aged Lombardy poplars, as the Council was facing in this case.  The standard of care of reasonableness is an objective test. The test does not depend on whether other local authorities are following an appropriate tree maintenance policy, which can be compared with this Council’s, unless those local authorities have similar known risks. Other local authorities may have tree maintenance programmes, which are not necessarily appropriate for managing hazards or risks such as those associated with aged Lombardy poplars. Therefore, their standard is not the applicable standard of a reasonable local authority in this Council’s position.  Having correctly defined the standard of care, the Judge failed to apply an objective standard of reasonableness on this Council. 62 At . Also see  of this judgment. 63 At .
(c) Policy considerations  As part of the Judge’s consideration of the broader policy issues in his assessment of the standard of care required of the Council, he took into account the Council’s financial constraints. The Judge did so, in the absence of any evidence that the Council had financial constraints in relation to the choices it made over the maintenance of the poplars in the Park.  The Judge specifically noted that the financial constraints within which “the Council would have to exercise its responsibilities” were another “unknown, but highly relevant, dimension”.64 He observed also, that the arborists’ briefs were not inappropriately constrained.65  The Judge found that the evidence did not enable him to draw any conclusions on whether a reasonable local authority in the Council’s position would apply a greater proportion of financial resources to the care of the poplars in the Park. He said that he “could safely infer that a reasonable local authority in the Council’s position, and with its knowledge, would have to factor in financial implications of the budgeting choices it made.”66  However, Mr Webb gave no evidence about budget or financial constraints. Nor was there sufficient evidence that the Council was constrained by financial considerations. In assessing policy considerations, I consider the Judge overstated the budget considerations, when they had not been put in issue.  In the context of budget choices, the Judge again referred to the Tree Policy, which is one of the various “potentially relevant considerations” (together with the District Plan).67 As noted at , the policy does not include or address any factors relating to the risk of Lombardy poplar trees in this district. Rather, it gives emphasis to heritage protection of trees generally. 64 Plaza, above n 2, at . 65 At . 66 At . 67 At .
 The Judge has taken into account matters that were not put in issue by the Council, such as the financial implications of the budgeting choices the Council may make. Nor was there evidence to support his inferences on financial constraints. Although resource constraints may be relevant to the nature of the duty of care,68 no issue was raised nor was there evidence presented for the Judge to take this into account. The Judge has failed to take into account the more relevant policy consideration as to whether it was fair, just and reasonable to impose a duty of care on the Council, to prevent risk or damage, and manage the known risks of poplars on its land. Conclusion  The Judge restricted the duty of care on the Council to a duty of care to inspect and maintain the trees in the Park. The Council is a landowner, with known hazards in the Park, over which it has ownership and control. The duty of care on the Council is to take reasonable steps to prevent or minimise damage to proximate neighbours from known hazards on its land.  The Judge was correct to define the standard of care as that of a reasonable local authority in the Council’s position in January 2014. However, the Judge failed to apply an objective standard of reasonableness, in finding that there was no comparative evidence from other councils on tree inspection and maintenance, which enabled him to make a finding on the reasonable steps this Council should have taken in these circumstances. Objectively, the standard of care on the Council is to take such steps, that a reasonable authority, with similar hazards, powers and resources, should have taken in the circumstances.  Further, the Judge’s policy focus was misplaced on budget constraints, when there was no issue raised or evidence to support such inferences. However, I consider that it was fair, just and reasonable to impose a duty of care on the Council to prevent risk or damage from the hazard on its land.  Thus, the Judge erred in defining the duty, and he failed to apply an objective 68 Tindall, above n 23, at –.
standard of care on the Council. Was there insufficient evidence to find the Council had breached the duty of care owed?  The Judge’s conclusions on the applicable duty and standard of care led to further error in his analysis of the evidence on breach.  I considered referring this matter back to the District Court for rehearing. However, at the outset of this appeal, both parties were agreed that the factual issues in this case were such that the lower Court’s usual advantage in seeing and hearing witnesses, to which deference should be paid, is not significant in this case. The evidence was largely of an expert nature, not contentious and based on documentary evidence.  I propose, therefore, to deal with the evidence on whether the Council had breached its duty of care to take reasonable steps to prevent or minimise risk, by considering the following factors: (a) the Judge’s findings; (b) the parties’ positions; (c) the law on breach of the duty of care; (d) the nature and foreseeability of the potential risk; (e) the evidential basis available for a breach finding on the corrected duty of care; (f) the inconsistent findings made by the Judge; (g) the subsequent risk assessment approach; (h) the pleadings objection; and
(i) findings on breach. The Judge’s findings on breach  The Judge found that: (a) he had no sound basis for determining what a reasonable local authority would have considered was full inspection; (b) a reasonable local authority would have taken advice from appropriate arborists as the Council did here; (c) there was no evidence that the Council inappropriately constrained the briefs of the arborist experts or the budgets they were to apply; (d) the evidence was insufficient and indeterminate as to whether the duty obliged the Council to undertake internal or resistograph testing of the trees after 2007. Nevertheless, the Judge confirmed that competently applying these methods of testing, alongside a visual assessment in tandem, is likely to reduce the risk of missing internal decay issues; (e) the evidence fell short of demonstrating that a reasonable local authority in the Council’s position would have gone further than the regular visual assessment testing and undertaken resistograph or similar testing; (f) although inspection of the Tree after it fell in 2014 revealed significant decay in the basal area, the duty of care on the Council “is not to be defined by what is learned in hindsight”;69 and (g) the information provided to the Council, up until when the Tree fell in 2014, was not such that a reasonable local authority should have assumed that the Tree was afflicted or even likely afflicted with basal 69 Plaza, above n 2, at .
decay such that it needed to undertake more drastic measures. The parties’ positions  Plaza submits it was a negligent omission on the part of the Council not to undertake internal inspections on the trees in the Park between 2007 and 2014. The experts had agreed that a visual assessment alone could not have located the rot and the trees were known to be at high risk of basal decay because of the species’ qualities and age.  Plaza submits that there was no dispute at trial that if a duty of care was found to exist, and was breached, then the resulting harm from the Tree falling was reasonably foreseeable.  The Council submits that since 2004, when a poplar tree fell in the Park, it regularly monitored these trees, engaged qualified arborists to carry out numerous investigations and report to the Council on the condition of the trees. On the advice of arborists and in light of the poor state of some trees and the potential safety hazard they posed, the Council has felled trees in the Park.  The Council points to the evidence at trial as demonstrating that it undertook reasonable monitoring, inspection and maintenance to reduce the risk that one of the trees might fall. There was no evidence that a reasonable person, whether a local authority or landowner, would have done anything more than the Council had done, which was to rely on its expert arborists to advise it on the state of the trees.  The Council submits negligence cannot be found on the evidence of Plaza’s expert, Mr Roberts, who believed that internal testing ought to have been completed between 2007 and 2014. Even if more rigorous invasive testing was completed, there was insufficient evidence to conclude that white rot would be found. The Tree that fell presented outwardly as one of the healthier specimens. The law on breach of the duty of care  Once the duty of care is defined, there must be a breach of the duty to take
reasonable care.  In Tindall, Winkelmann J held it was necessary to consider:70 (a) the nature and foreseeability of the potential risk, danger or harm in question; (b) the probability of that harm eventuating; and (c) the expense and difficulty for a defendant in alleviating that harm.  In Tindall, the plaintiffs failed to prove that discharge from a treatment plant caused contamination to their oyster farm and that the damage was reasonably foreseeable.71 The Council had not breached its duty of care as the operator of the treatment plant, as it had taken staged repairs to remedy defects in the sewage reticulation. Winkelmann J had regard to the limited resources available to the Council and found that the Council proceeded properly, in light of those resources, to address the most pressing priorities as identified by consultants engaged.  In Easton Agriculture, Kós J also held that in determining whether a breach has occurred, the standard of reasonable care and performance should “generally reflect constraints the community itself has imposed on the Council in terms of funding”.72  In Smallwoods, Thomas J held that in order to find a breach, the key question to answer was whether the Council, as a landowner, acted reasonably in all the circumstances by not taking active steps to remove or minimise the hazard on the Council land.73 The Judge said further:74  The plaintiffs must establish that a reasonable person in the Council’s position could have foreseen this involved a risk of injury to the plaintiffs. If so, they must establish what a reasonable landowner would do by way of 70 Tindall, above n 23, at , citing Wagon Mound Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty Ltd (No 2)  1 AC 617 (HL). 71 Tindall, above n 23. 72 Easton Agriculture, above n 23, at . 73 Smallwoods, above n 23, at . 74 Footnote omitted.
response to the risk. Relevant considerations include the magnitude of the risk, the probability of its occurrence, as well as the expense, difficulty and inconvenience of taking alleviating action.  In Smallwoods, Thomas J found the Gisborne District Council breached its duty of care as a landowner because it was aware of its duty, knew that the hazard on its land was dangerous and damage was foreseeable due to the close proximity of the public, residential and commercial properties which bordered its land.  In Caminer v Northern & London Investment Trust Ltd, the House of Lords held that the duty of care of a reasonable landowner was not breached when the defendants failed to call in an expert to advise as to the possible existence of an unsuspected and undiscoverable disease in an elm tree on their land that had fallen and injured the plaintiffs.75 Even though an expert might have recommended topping and lopping the tree, which could have prevented it from falling, the evidence did not establish that elm trees are “so plainly a danger” as to require pruning because to all external appearance the tree was sound and no expert inspection would have considered it dangerous.76  Caminer was applied in New Zealand in Helson v Dear.77 In that case, Ellis J found that the duty of care of a reasonable landowner was not breached when two pine trees on the defendant’s property fell during high winds and damaged the plaintiffs’ property. The Judge found it “would have been quite unreasonable” to require the defendant to inspect her trees other than by observing their continued healthy state, unless something occurred to put her on guard.78 To expect the defendant to call in experts would go far beyond what was required of an ordinary reasonable prudent landowner, where the trees did not appear to be an immediate danger and had not caused any problems. The nature and foreseeability of the potential risk  The Judge found it was foreseeable that the Tree in the Park was of a height 75 Caminer, above n 26. 76 At 99, 104 and 105–106. 77 Helson v Dear HC Wellington CP536/86, 25 October 1988 at 11–12 and 16. 78 At .
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