25 KBR Limited - [2022] NZHC 1194

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-213

[2022] NZHC 1194

UNDER the Property Law Act 2007

IN THE MATTER

of an application to extinguish a covenant

BETWEEN

25 KBR LIMITED

Applicant

Hearing: 25 May 2022

Appearances:

J R Pullar for the Applicant

Judgment:

26 May 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

Re 25 KBR LIMITED [2022] NZHC 1194 [26 May 2022]

[1] The applicant seeks an order extinguishing covenants relating to the maintenance of drains on nearby land dating back to 1907 and seeks an order dispensing with service on the owners of the titles which may have the benefit of the covenants, and leave to use the originating application procedure. There are two drains to which the two covenants relate.

[2] The area originally subject to the covenants, which was a farm, has been subsequently subdivided resulting in the covenants being brought down onto various titles. The covenants have in fact been extinguished from some titles which have been subdivided into residential Lots. The applicant is in the process of completing a subdivision of a further area subject to the covenants.

[3] The applicant seeks to have the covenants removed only from what it calls “the Application Site” marked as such on Plan A attached and in purple on Plan B attached. It is necessary for the covenants to be removed because, as is normally the case in a subdivision, the roading created for the subdivision is to vest in the Christchurch City Council (the Council).

[4] Section 238 of the Resource Management Act 1981 provides that any land that vests in the territorial authority for the purposes of a road must vest free of all interests in the land including any encumbrances. Hence this application.

[5] The application to extinguish the 1907 covenants is made pursuant to ss 316 and 317 of the Property Law Act 2007 (the Act). The applicant relies on the following provisions of those sections:

(a)that the covenants should be extinguished pursuant to s 317(1)(a) of the Act on the basis that there has been a change to the purpose for which the land is used since the covenants were created in 1907;

(b)that the covenants should be extinguished pursuant to s 317(1)(b) on the basis that their continuation in force would impede the reasonable use of the burdened land in a manner which could not reasonably have

been foreseen by the original parties to the covenants at the time of their creation; and

(c)that the covenants should be extinguished pursuant to s 317(1)(d) of the Act on the basis that the removal of the covenant will not substantially injure any person entitled to their benefit.

[6] Having considered the application for directions dispensing with service, I convened a hearing where Mr Pullar, counsel for the applicant, provided requested maps and diagrams to explain the application in more detail. While that hearing was aimed at dealing with the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading 25 KBR Limited

Details

AGLC: 25 KBR Limited [2022] NZHC 1194
Case: [2022] NZHC 1194
Decision Date: 26 May 2022

CaseChat Overview and Summary

The applicant, 25 KBR Limited, sought an order to extinguish two covenants relating to the maintenance of drains on nearby land, dating back to 1907, and sought an order dispensing with service on the owners of titles that might benefit from the covenants, and leave to use the originating application procedure. The area originally subject to the covenants, a farm, has been subdivided, bringing the covenants down onto various titles. The applicant is in the process of completing a subdivision of a further area subject to the covenants. The applicant seeks to have the covenants removed only from the "Application Site" marked as such on Plan A and in purple on Plan B.

The legal issues before the court were whether the extinguishment of the covenants would substantially injure any person entitled to their benefit, and whether it was appropriate to dispense with service on the registered proprietors and only require the application to be served on the Christchurch City Council. The applicant relied on sections 316 and 317 of the Property Law Act 2007, arguing that the covenants should be extinguished because there had been a change to the purpose for which the land was used since the covenants were created, their continuation would impede the reasonable use of the land, and their removal would not substantially injure any person entitled to their benefit.

The court considered the application for directions dispensing with service and found that the extinguishment of the covenants would not substantially injure any person entitled to their benefit. The court was satisfied that it was appropriate to dispense with service on the registered proprietors and only require the application to be served on the Council. The court noted that the applicant would remain subject to the 1907 covenants by virtue of its ownership of Lot 2, and any landowner with the benefit of the covenants would retain the ability to enforce those covenants against the applicant. The court also found that the drain in the short area marked red in the centre of Plan A no longer existed and that the owner of Lot 1 no longer had access to either drain. The court concluded that it was not necessary to serve the registered proprietors of the titles with the benefit of the 1907 covenants and that it was appropriate that the 1907 covenants be removed from the Application Site. The orders extinguishing the 1907 covenants were subject to the conditions that the proceedings, along with a copy of the judgment, be served on the Christchurch City Council, the orders may not be sealed unless and until the Council files a memorandum with the Court confirming it has no objection to the orders, and if the Council does not provide the memorandum, the applicant is to report that its substantive application be listed in the next available Duty Judge List.

Orders