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Court rejects company’s bid to avoid liability for Port Hills fire damage

28 Apr 2023

| Author: Andrea Hilton

Unsuccessful appeal, fire caused by third party, negligence, industry practice, s 43 Forest and Rural fires Act 1977, Rylands v Fletcher, nuisance, quantum of damages, procedure, pleading of allegations, statutory interpretation, ss 17 and 19 Evidence Act 2006, hearsay, weighting of evidence, causation, ignis suus rule “his fire”, quantum of damages.

Leisure Investments NZ Limited Partnership v Cecile Grace & Ors [2023] NZCA 89

(French J)

Note: The Forest and Rural Fires Act 1977 was repealed by the Fire and Emergency New Zealand Act 2017. For this reason, this case note does not cover the court’s analysis of s43. The FENZ Act does not include a civil cause of action.

Leisure Investments NZ Limited Partnership (Leisure) unsuccessfully appealed the High Court’s finding that it was liable to the respondents under s 43 of the Forest and Rural Fires Act 1977 (s43) and for negligence and nuisance and the quantum of damages awarded.

On 13 –15 of February 2017, Monday to Wednesday, two fires started in the Port Hills in Christchurch. The fires were called the Marley’s Hill fire (Marley’s) and the Early Valley Road fire. This decision mainly concerns Marley’s which was started by an arsonist. It spread into Leisure’s land, approximately 358ha.

At the time the weather was exceptionally dry and windy, and a complete fire ban had previously been imposed in Christchurch.

Leisure operated an adventure park in a pine forest on its land, including a chairlift line over a 12-20 m wide corridor approximately 1.8 km long, cut through the forest. Slash was created by the clearance of the corridor and there was dry and inflammable matting along the corridor boundary. The presence of the slash was a breach of Leisure’s fire management plan. The chairlift seats were upholstered in inflammable plastic. It was possible to remove all the chairs from the lift carrier rope.

Despite Marley’s starting 500m from Leisure’s top boundary and Leisure observing the fire crossing the chairlift corridor at 9.30pm Tuesday night, Leisure waited until Wednesday morning to remove some chairs but left some attached to the moving rope. In addition, because of a power outage, the rope was run at a much slower speed and the remaining chairs were sometimes stationary for up to seven minutes in the fire. It appears the chairs were removed to protect the rope rather than to reduce the risk of the fire spreading.

On Wednesday afternoon, the chairs’ upholstery melted and started spot fires in the corridor that merged with Marley’s and the fire spread to the respondents’ properties, damaging or destroying their homes. It was accepted that Marley’s spread to the respondents’ properties only because the chairs caught on fire.

The respondents had three causes of action, negligence, s43, and nuisance.

Applicable principles – a judge is entitled to prefer one expert’s evidence over another – judge’s factual mistake must be material to affect the outcome – failure to plead allegation not always a problem -situation caused by third-party relevant consideration not a defence – defendant must take steps to abate fire – common knowledge is sufficient to establish foreseeability – preventative action must be onerous before lack of action is a defence – specific circumstances relevant to assessing reasonableness – industry practice is relevant to assessing standards of care and negligence – nuisance concerned with protecting right to the quiet use and enjoyment of owner or occupier – interference must be substantial and unreasonable – negligence is not necessary for nuisance – occupiers who continue a nuisance also liable -nuisance is continued if, with knowledge, occupier fails to take reasonable steps to remove or reduce – in subrogated claims sum paid by insurer irrelevant – evidence necessary to award special damages -difficult to challenge admissibility of evidence if acquiesced to it admission – quantum of damages is a question of fact – no absolute rules regarding award of damages, only guidelines – guidelines overruled by compelling circumstances – proof not always necessary for special damages – prima facie intention to reinstate required when damages to reinstate awarded – aim that damages fair to both parties.

Held: All the High Court judge’s findings were upheld. The appeal was dismissed with costs awarded to the respondents.

2023-NZCA-89-Leisure Investments NZ Ltd v grace 7 ors

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