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Who Pays For Damaged Land?

Land ownership continues to be an important goal for many New Zealanders. It promises freedom and independence and can be a symbol of material success. It is easy to forget that land owners do not enjoy complete freedom over their land.

There are a number of laws that restrict how land can be used. Many of these laws are well known. Most land owners know that they will need to pay rates, comply with the Resource Management Act 1991 if they want to develop their land and follow the Building Act 2004 if they want to build on it. However, other legal rules are not well known at all. One of these was clarified in 1866 in the English case of Rylands v Fletcher.

Rylands v Fletcher arose following a dispute between neighbours in Lancashire. Rylands operated a steam-powered textile mill and he constructed a reservoir on his land to supply water for his machinery. His reservoir was constructed over disused mineshafts which were connected to mines under Fletcher’s land. After Rylands filled his reservoir with water, a significant amount of the water escaped through the mineshafts and damaged Fletcher’s mines. Fletcher sued Rylands for compensation.

The courts ordered Rylands to compensate Fletcher for the damage. They established a legal rule that: “the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and, if he does not do so, is answerable for all the damage which is the natural consequence of its escape.”

All this talk of steam-powered textile mills, “mischief” and “peril” may seem archaic and out of touch with life in the Waikato today but it is still the law in New Zealand. It illustrates that the laws which govern our lives are a complicated mixture of legislation passed by our own Government and decisions made by the Courts over hundreds of years, both in New Zealand and overseas.

If you own land and use it to store anything which could cause damage if it escapes (such as water or dangerous chemicals) you need to take steps to protect your neighbours. Even if you take precautions, you may still be liable if your neighbours suffer damage because your dangerous goods escape, all because 134 years ago, in England, a Mr Rylands flooded his neighbours’ mine.

As published in the Waikato Times’ supplement ‘The Biz’ on March 29, 2010.


This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

For further information

Matthew Peploe - Harkness Henry Partner

Matthew Peploe

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