Last week the Court of Appeal released its decision relating to the issue of nuisance and negligence on the part of Christchurch Adventure Park during the Port Hills fires. In this FYI we discuss the background of the case (Leisure Investments NZ Limited Partnership v Cecile Grace & Ors) and the reason behind the Court’s decision.

 

 

What is the case about?

The case relates to the Port Hills fires in February 2017 which was started by an arsonist. A large number of residential properties were badly damaged, and some completely destroyed.

The Port Hills fires were two separate fires - the Early Valley Road fire and the Marleys Hill fire, which started on Monday 13 February 2017 but by Wednesday night had combined.

The owners claimed Leisure Investments was responsible for spot fires at the Adventure Park which joined with the Marleys Hill fire and damaged or destroyed their houses. It was accepted that were it not for those spot fires, the Marleys Hill fire would have passed well south of the houses and they would not have been affected.

What happened?

The Adventure Park contains mountain bike trails, a zip line and a hiking area. It has a chairlift which operated in a corridor of cleared pine trees. It was used to ferry mountain bikers, zipliners and sightseers from the bottom of the Park to the top.

By 9:30pm on Monday, the Marleys Hill fire was around 300m from the Adventure Park and by midnight it had entered the Park boundary. A decision was made to keep the chairlift running as a precaution to protect the haul rope from heat concentration - a step recommended by the chairlift’s operation and safety manual in the case of fire. The manual did not say whether chairs had to be removed from the haul rope or not but Leisure Investments removed some but not all of the chairs.

By early afternoon on Wednesday, 15 February 2017, staff noticed a chair was on fire when it was coming down the hill. The lift kept running. Some of the chairs ignited and molten plastic dripped onto pine slash, causing spot fires.

The High Court decision

Leisure Investments faced a claim alleging liability under s 43 of the Forest and Rural Fires Act 1977 (now repealed), negligence and nuisance. The High Court decided that they were liable and ordered them to pay damages of $10,296,041 saying a reasonable operator in the position of Leisure Investments would have appreciated that the plastic on the chairs would melt and create a fire spread risk and would have removed the chairs.

The Court of Appeal decision

The owners of the Adventure Park appealed, claiming the High Court decision was wrong. Among other things, it said it had followed advice from the chairlift manufacturer and acted in accordance with industry best practice. It claimed it was not right that they should be held liable for a fire they did not start in those circumstances.

The Court was sympathetic to Leisure Investments position but ultimately agreed with the High Court’s decision. The critical issue was whether it was reasonable to have removed the chairs. The Court said Leisure Investments knew:

• about the close proximity of the Marleys Hill fire.

• that type of a fire was the greatest risk to the Park.

• the majority of the chairlift corridor adjoined urban development and, during the fire, knew there was a reasonable possibility of a major fire in that corridor.

• the seats on its chairlift were coated in plastic, which melts when exposed to excessive heat and burns.

• there was a lot of dry slash underneath the chairlift that is highly flammable.

• the haul rope could be run without the chairs attached and, although difficult, it was possible to remove them and there was time to do so.

The Court said that in determining whether Leisure Investments was negligent, the “standard of effort” required of it in response to the fire must take into account its lack of initial responsibility, its knowledge and its resources. It acknowledged that removing the chairs was not as easy but found there was no evidence that “it was prohibitively resource intensive or excessively demanding”.

The Court decided that there was sufficient reason for concern on Tuesday 14 February such that a reasonable operator would have started to remove the chairs. It was influenced by the fact that although reports were that the fire was on the boundary of the Adventure Park but under control, Leisure Investments had decided that it was necessary to keep the chair lift running to protect it from heat. The Court thought Leisure Investments anticipated that the fire might reach the chairlift and it is common knowledge that dry slash in the summer heat is highly flammable especially in the sort of conditions prevailing in Christchurch that summer.

Leisure Investments also failed to convince the Court that the High Court was wrong to also find them liable in nuisance and under s 43 of the Forest and Rural Fires Act (now repealed).

In the nuisance claim, Leisure Investments took issue with the High Court’s finding that if physical damage is caused to a neighbour because of a fire outbreak, there must have been an unreasonable use of the land by Leisure Investments. It said that if it that was correct it would mean that every fire would constitute a nuisance.

The Court agreed that where a nuisance is caused by the unauthorised act of a third party (in this case, an arsonist), the owner or occupier is not strictly liable unless they continue the nuisance. Someone is considered to have continued a nuisance if with knowledge of it they fail to take reasonable steps to remove or abate it. Here, the Court decided that Leisure Investments failed to take reasonable steps because its actions in not removing the chairs caused the spread of the fire and those actions were unreasonable.

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