$143,000 payout for Navy tunnel

John Waugh says the case was about standing up for his rights, not just money. File Picture / Brett Phibbs

The Defence Force has been ordered to pay the former owners of a Devonport house damages of $143,220 for use of a tunnel under their property linking the Navy's main base and its north yard.

The judgment - which also awards interest and costs to John Waugh and his ex-wife Karen Robinson - comes after a dispute between the parties which began in 1996 when the Navy realised that it had no legal basis for the tunnel and began negotiations with landowners.

But it is not the end of the dispute. The Land Valuation Tribunal is likely to be asked to decide a compensation figure for the easement obtained for the presence of the tunnel beneath the Waugh/Robinson property in 2004.

The damages awarded by Justice Mark Cooper in the High Court were for illegal use by the Navy of the plaintiffs' land from 1996 to 2004.

Mr Waugh said the 10-year battle had been financially and emotionally costly and he accused the Defence Force of an abuse of power by attempting to wear them down and using public money to fund "a spurious argument".

The Crown, on behalf of the Defence Force, argued that the landowners, despite having at the outset served a trespass order on the Navy preventing its surveyors coming on to their property, had acquiesced to the Navy's use of the tunnel by way of such actions as negotiating and agreeing an easement giving the Navy future use.

That argument was rejected by Justice Cooper, who said: "It was not inconsistent for the plaintiffs to negotiate about and grant an easement which would have the effect of authorising the future use of the tunnel whilst wanting to be compensated for the fact that hitherto the tunnel had not been lawfully on their land nor lawfully used by the NZDF."

The parties' compensation estimates - produced by expert witnesses - varied dramatically. The property owners sought $487,864, based in part on what it would have cost the Navy to use an alternative route to the tunnel; the Navy based its assessment on a land rental calculation and came up with $16,680.

The judge accepted the landowners' approach of assessing damages based on the benefit derived by the Navy from the presence of the tunnel through private land but said account had to be taken for the "considerable cost of construction of the tunnel" that the Navy would not have faced had it opted for an alternative.

Defence public relations director Lieutenant-Colonel Mike Shatford said the decision was being considered by the ministry and the Crown Law Office. He was unable to provide information in time for this report about the cost of negotiations and litigation involving the Waugh/Robinson property or the total cost of gaining consent for easements from the other 13 affected landowners.

Mr Waugh said they had "no regrets at all", despite the stress.

"As time moved on, the issue of principle became greater as the Crown through their obstructive behaviour demonstrated the lengths they would go to to wear us down both financially and emotionally," said Mr Waugh, a lawyer who works in banking.

"This was never about the money. This was simply about standing up for your rights and standing firm.

"There is a lot of personal satisfaction in getting to the end of this and being vindicated. I think a letter of apology from the NZDF would not go astray. However, last time I looked Disneyland was still in the USA."

The tunnel was built under emergency wartime measures, the Defence Emergency Regulations 1941. They lapsed but no steps were taken to give the tunnel a legal basis until 1996.

Justice Cooper said the Waugh/Robinson property in Rutland Rd was "probably the most affected because, under it, the tunnel was closest to the surface [half a metre at its shallowest]".

The couple had bought the property in 1994, unaware the tunnel ran beneath it - there was no record of it on the property's Land Information Memorandum report.

Mr Waugh and Ms Robinson, who at the time were married with three children, had intended it to be their long-term family home.

Part of the attraction was that, at 1012sq m, the property could be subdivided - an option that has effectively been lost because of the presence of the tunnel and easement conditions.

It did not become an issue until 1996 when a letter arrived from Defence informing the couple that the tunnel "had never had appropriate legal provision made for it" since the emergency regulations were repealed.

Defence wanted to fix that by paying residents compensation for easements to allow it to use the tunnel and to get right-of-way approval from North Shore City Council. The council has given approval.