Farm advice: Water Services Act 2021 and easements

Additional obligations and responsibilities for drinking water suppliers in the rural sector


In the December 2021 (#303) edition of Farm Trader, we reported that the Water Services Act 2021 had certain implications for suppliers of water.

Basically, the Act imposed obligations on ‘drinking water suppliers.’  A drinking water supplier is defined as a person who supplies drinking water through a drinking water supply.

The definition includes:

  • A person who ought reasonably to know that the water they are supplying is, or will be, used as drinking water
  • The owner and operator of a drinking water supply, and
  • A person who supplies drinking water to another drinking water supplier.

It doesn’t include a domestic self-supplier. A domestic self-supplier means a standalone domestic dwelling that has its own supply of drinking water.

A ‘drinking water supply’ means the infrastructure and processes used to extract, store, or transport drinking water and includes the point of supply (that is: the river, stream, or bore) and any end point treatment device and backflow prevention device.

Water easements and drinking water supply

In the rural context, an interesting issue arises in relation to water easements.

Most water easements are on standard terms that, under Land Transfer Regulations 2018, simply allow the person having the benefit of the easement to take and convey water from the source on a property across that property to their own property.

Sometimes there are limitations on the use of that water. Those limitations, however, are usually phrased as being ‘for domestic and stock purposes only’ or there are restrictions on the volume of water that can be taken.


The majority of easements in place today were created before the Water Services Act 2021 came into force. With the extra obligations imposed on water suppliers under this legislation, the question now arises as to what responsibility the owner of the source of water now has given that in the majority of cases, they will have no ability to control the use of the water? Most easements are expected to endure ‘in perpetuity’ (forever) and, clearly, the use of the land benefited by the easement can change over time.

Possible landowner liability

The terms of easements can only be varied by agreement or, in some instances, by the court. Therefore, landowners who have a source of water on their property that services other properties by way of easements, now face potential liability if the water that they are supplying becomes contaminated and causes illness.

When granting new easements, a landowner can require the terms of the easement to ensure the water user puts in appropriate systems, etc. if the water will be used for drinking where it’s not a domestic supply and to protect themselves against liability for other users’ use of the water.

For existing easements, however, the landowner cannot unilaterally change the terms of an easement. The landowner would have to put in the appropriate infrastructure to treat the water themselves (possibly at their cost) even though it benefited the water user; alternatively, the landowner would have to use the dispute resolution mechanisms in the Land Transfer Regulations to have the easement varied. 

Problems can arise in a potential dispute

The problem in using a dispute resolution mechanism is that the standard dispute resolution procedures set out in the Regulations (Schedule 5) don’t really lend themselves to this sort of dispute given that the situation probably wasn’t foreseen when those Regulations were drafted.


Effectively, the landowner would have to argue that legislative change has imposed obligations on them far in excess of what was envisaged when the easement was granted. As a result of this, if further costs and obligations are imposed on the landowner by the water user by virtue of the water being used for domestic water supply then fairness would suggest the user should pay those costs and/or indemnify that landowner against any such costs.

Early days in terms of a test case

The Act is new, and it probably won’t be until a case arises where contamination or illness occurs that a court or inquiry will consider what responsibilities under the legislation the owner of a water source might have given their inability to control or dictate what that water is used for.

If you’re a drinking water supplier and are concerned about your obligations and responsibilities under this new legislation, you should talk with your lawyer.

Neil Dent is a partner in Hastings law firm, Gifford Devine. He specialises in all aspects of rural and commercial property and related issues.

Gifford Devine is a member of NZ LAW Limited, an association of 54 independent law firms practising in more than 70 locations.

Information given in this column should not be a substitute for legal advice.

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