Alderton v Sixty-Six Auckland Limited
[2024] NZHC 2263
•13 August 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-137 [2024] NZHC 2263
IN THE MATTER OF 199-201 Anzac Valley Road, Waitakere, Auckland BETWEEN
PETER and LINDA ALDERTON as trustees of the PETER ALDERTON FAMILY
TRUST
Applicants
AND
SIXTY-SIX AUCKLAND LIMITED
First Respondent
DOKAD TRUSTEES LIMITED and PETER WILLIAM MAWHINNEY
Second Respondents
Hearing: 21 September 2023 plus material filed in October and November 2023 (including an application to adduce further evidence) and further material filed in May and June 2024 Appearances:
A Low for the Applicants
P W Mawhinney, the second-named second respondent, in person No appearance by or for the other respondents
Judgment:
13 August 2024
JUDGMENT OF GAULT J
This judgment was delivered by me on 13 August 2024 at 11.30am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Ms AAH Low, Barrister, Auckland
Mr K Mackie (applicants’ instructing solicitor), Mackie and Co., Auckland The Respondents
ALDERTON v SIXTY-SIX AUCKLAND LTD [2024] NZHC 2263 [13 August 2024]
TABLE OF CONTENTS
Introduction [1]
Post-hearing developments [7]Factual background [15]
Scope of originating application [29]
Application to adduce further evidence [30]
Section 339 – legal principles [35]
Analysis [39]
Co-owners
The extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made [42]
The nature and location of the property [44]
The number of other co-owners and the extent of their shares [46]
The hardship that would be caused to the applicant by the refusal of the order,
in comparison with the hardship that would be caused to any other person by the making of the order [47]
The value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property [73]
Any other matters the Court considers relevant [74]
Conclusion [83]
Compensation [84]
Result [88]
Costs [89]
Introduction
[1] By originating application,1 Mr and Mrs Alderton (the Aldertons) as trustees of the Peter Alderton Family Trust (PAFT) seek orders under s 339 of the Property Law Act 2007 (PLA), primarily requiring them to acquire the respondents’ 1/10 interest in a property on Anzac Valley Road, Waitākere (the property).
[2] The Aldertons say that in 1997, before the parties agreed to share ownership in the property they were purchasing, Mr Mawhinney (the second-named second respondent) said he would transfer the 1/10 interest to them without payment once an access issue had been resolved. In 1997, access over the forestry road on the property was needed by Mr Mawhinney’s interests to develop two other lots. Neither lot now exists as it did in 1997, and by 2017 Mr Mawhinney’s interests no longer owned any neighbouring land.
[3] The primary ground of opposition was that acquisition of the 1/10 share would cause hardship because access to other land up the forestry road remains a live issue given the Mawhinney interests’ other subdivision consents.2 In particular, Mr Mawhinney submitted that he will lose the benefit of SUB-2008-571 and SUB-2011-63 (summarised below). During the hearing, Mr Mawhinney went further and submitted that the 1/10 share was effectively to provide indefinite access or at least until the forestry road is incorporated into a long-term alternative as it runs over a small part of the property.
[4] The property comprises three lots: lot 309, deposited plan 210991, which is 4.2841 hectares and the Aldertons’ family home (the main lot); and a 1/8 share in two access lots – lot 200, deposited plan 210991, which is 0.3919 hectares, and lot 9, deposited plan 166619, which is 0.3681 hectares (lot 200 and lot 9 respectively; together, the access lots).3 Although the order sought in para 1(a) of the originating application defined the property as only “lot 309, DP210991”, it was clear enough from paragraph 2(b) of the application that the property comprises all three lots. At the
1 Permission to commence by way of originating application was granted by Harvey J: Alderton v Sixty-Six Auckland Ltd HC Auckland CIV-2023-404-137, 31 January 2023 (Minute).
2 No point is taken that the notice of opposition was only filed by the first respondent.
3 Identifier 645960.
hearing, Ms Low, for the Aldertons, sought to amend the application orally, if necessary. The evidence in opposition, filed by Mr Mawhinney, indicated that he also understood the property comprised all three lots irrespective of the wording of the order sought, but he raised one aspect of hardship in submissions which had not been addressed in his evidence. In the circumstances, Ms Low did not oppose granting Mr Mawhinney leave to file a further affidavit limited to such hardship.
[5] A procedural point also arose at the hearing in relation to an affidavit of Mr Mawhinney dated 17 August 2023, which Ms Low had not previously seen (at least in sworn form), and therefore had not dealt with in her written submissions. That affidavit proceeded on the basis that the application only concerned the main lot, and suggested the arrangement in 1997 was that the 1/10 share would be exchanged for access land that ran over a small part of the main lot. Ms Low reviewed that affidavit over lunch and sought leave to file a brief further submission. Mr Mawhinney did not oppose.
[6] I directed that Mr Mawhinney’s further affidavit and Ms Low’s further submission were to be filed and served within two weeks.
Post-hearing developments
[7] Mr Mawhinney filed a further (fifth) affidavit on 5 October 2023 annexing multiple exhibits, together with further submissions. Ms Low also filed her brief further submission.
[8] As set out further below, filings after the hearing did not end there despite the limited scope of the leave granted in the directions.
[9] On 9 October 2023, Mr Mawhinney filed a memorandum objecting to Ms Low’s further submission. Ms Low had been granted leave to file a brief further submission addressing Mr Mawhinney’s affidavit of 17 August 2023. She did so. Mr Mawhinney’s five grounds of objection were procedural and did not justify refusing to read Ms Low’s memorandum, nor call for a reply from him.
[10] On 22 November 2023, Mr Mawhinney filed an interlocutory application seeking leave to file further information.
[11] On 27 November 2023, I issued a minute noting that Mr Mawhinney’s interlocutory application referred to an affidavit that I had not seen.4 I directed the Aldertons to file and serve a response. I said that, if necessary, I would then issue a further minute.
[12] I subsequently received Mr Mawhinney’s further (sixth) affidavit dated 22 November 2023, filed on 28 November 2023, and Ms Low’s memorandum dated 29 November 2023. Ms Low’s memorandum referred to inconsistencies between versions of Mr Mawhinney’s further documents sent to her electronically. Ms Low submitted that the Court should decline to receive Mr Mawhinney’s application and evidence. Alternatively, she sought time to respond with a formal opposition and evidence in support.
[13] While I initially considered determining Mr Mawhinney’s application for further evidence on the papers as part of my substantive decision without hearing further from the parties, I decided it was preferable to give the Aldertons a proper opportunity to respond with their opposition. I issued a minute accordingly.5 I indicated that I did not consider a further hearing was required in relation to the application for further evidence, but that I would receive brief, properly confined, supplementary written submissions from both parties. I made directions accordingly and indicated that I would then deal with the application on the papers, likely as part of the substantive decision.
[14] Following the filing of the Aldertons’ opposition to Mr Mawhinney’s application to file further evidence, on 4 June 2024 Mr Mawhinney filed another (seventh) affidavit in reply instead of submissions. Following my further minute,6 the Aldertons filed their brief submissions.
4 Alderton v Sixty-Six Auckland Ltd HC Auckland CIV-2023-404-137, 27 November 2023 (Minute).
5 Alderton v Sixty-Six Auckland Ltd HC Auckland CIV-2023-404-137, 2 May 2024 (Minute).
6 Alderton v Sixty-Six Auckland Ltd HC Auckland CIV-2023-404-137, 10 June 2024 (Minute).
Factual background
[15] In about 1997, the Aldertons were looking to purchase the property from the Waitakere Forest Land Trust (WFLT). Mr Alderton understood that Mr Mawhinney was the trustee of WFLT. Mr Mawhinney was developing the property and surrounding land on Anzac Valley Road, including a forestry block. The Aldertons agreed to purchase a lot in the development.
[16] Mr Mawhinney wanted to secure the ability to repurchase an access strip in order to facilitate the further development of other lots, lot 1 deposited plan 178776 (lot 1) and lot 8 deposited plan 166619 (while providing the Aldertons with equivalent access).7 Corban Revell, solicitors, proposed in a letter to Mr Alderton dated 16 April 1997 that the vendor retain 10 per cent ownership of the whole of the land subject to a covenant providing that this 10 per cent share could be discharged without payment once the access strip was resolved. These other lots Mr Mawhinney intended to develop were included on a title issued on 23 May 1997 to Kitewaho Bush Reserve Company Ltd (Kitewaho), a company owned by Mr Mawhinney.8 Mr Alderton said that in his mind, the reservation of the 10 per cent interest was likely to be short-term.
[17] Mr Alderton recalls that the property was initially transferred to Riveria Developments Ltd (Riveria), a company owned by him, and later transferred to the Aldertons (as trustees of the PAFT) and Kitewaho.9
[18] On 22 August 1997, Kitewaho signed a transfer to the Aldertons of an undivided 9/10 share in land comprising the main lot, one of the access lots (lot 9) and a share in another parcel of land.10 The same day, Kitewaho and the Aldertons (as lessor) granted the Aldertons (as lessee) a 999-year lease of that same land,
7 Lot 1 deposited plan 178776 was later subdivided into two new lots (lots 323 and 324). Lot 8 deposited plan 166619 was later subdivided on more than one occasion into further lots, initially in 2005 to produce lot 1 deposited plan 320387 (Identifier 80938). As indicated, neither lot now exists as it did in 1997.
8 CT 110B/23 North Auckland.
9 Another title issued on 23 May 1997 records Riveria as the owner of three lots including lot 200. Part of this lot was transferred to Northern Light Investments Ltd (1/8 share), and the trustees of the PAFT and Kitewaho (1/8 share), with Riveria retaining a 6/8 share, at the same time as the September 2002 title was issued. Mr Alderton said that the PAFT has had an interest in the property since 2001.
10 Preceding title CT 110B/24 North Auckland. The other access lot, lot 200, did not exist at that time.
commencing on 1 July 1997, with rent of $10 per year, if demanded, over the full term of the lease (999-year lease).11
[19] The 999-year lease contains a proviso to the lessee’s right to quiet enjoyment stating:
… the lessor shall be entitled at all times to pass and repass on foot or by vehicle over any tracks and carriageways located on the land for the purpose of obtaining access to and from any other land owned by the Lessor from or to the legal road nearest to that other land.
[20] On 25 September 2002, a new title was issued comprising the property together with an additional lot.12 It recorded the registered owners as the Aldertons and a trustee company as to a 9/10 share, and Kitewaho as to a 1/10 share.
[21] On 3 April 2004, Kitewaho was placed into liquidation. At some stage, its 1/10 share in the property was transferred, directly or indirectly, to the first respondent (Sixty-Six).
[22] In April 2008, Mawhinney interests applied for a subdivision consent (SUB-2008-571) that entailed 17 proposed parcels to be served by access over the forestry road, which includes the access strip. These parcels included the property, but by the time the proceeding commenced, 5/8 of the land area was owned by Waitakere Farms Ltd (WFL). The respondents are only registered proprietors in respect of their interest in the property. This 2008 consent application requested that consent not run with the land. The application has not been determined. Mr Mawhinney said he has applied to the Environment Court for enforcement orders to procure determination.
[23] In 2011, the trustees of the Forest Trust (apparently also Mawhinney interests) applied for a subdivision consent (SUB-2011-63) proposing to divide lots 323 and 324 (previously subdivided from lot 1) into new lots.13
11 D237844.2.
12 CT NA139A/724. The additional lot (lot 8 deposited plan 166619) was subsequently subdivided.
13 The excess land would be annexed to existing lot 200 to produce proposed lot 400. Access would be over proposed lot 400, which would be held in shares by the registered proprietors of those parcels in the same ratio as in existing lot 200.
[24] On 22 June 2012, SUB-2011-63 was granted. Consent was subject to various conditions with which the Forest Trust was not happy. It launched an objection. That objection languished for some years but was considered by the Council, and a decision was issued in July 2018. Mr Mawhinney appealed. The Environment Court confirmed Auckland Council’s decision.14 On 11 April 2019, this Court refused leave to continue with a further appeal.15
[25] On 10 February 2014, a new title was issued for the property. It recorded the registered owners as the Aldertons as to a 9/10 share and Sixty-Six as to a 1/10 share.
[26] By 2017, the land neighbouring the main lot that shares an interest in the access strip (lot 1 deposited plan 320387 on the same side of the forestry road and lots 323 and 324 across the forestry road) was owned by third parties, including WFL. However, Mr Mawhinney’s interests retain forestry rights granted when they owned other land.16 In particular:
(a)7411076.1, memorandum of grant of forestry right between North Kaipara Nominees Ltd and itself dated 25 May 2007 over lot 324, a 1/80 share in lot 9 and a 1/80 share in lot 200; and
(b)8601968.3, memorandum of grant of forestry right between Forest Trustee Ltd and itself dated 20 September 2010 over lot 323, a 1/10 share in lot 9 and a 29/40 share in lot 200.
These forestry rights also give the holder the option to purchase the underlying land to which the forestry rights attach.
14 Mawhinney v Auckland Council [2018] NZEnvC 239, [2018] ELHNZ 363.
15 Mawhinney v Auckland Council HC Auckland CIV-2019-404-000036, 11 April 2019 (Minute). In the meantime, Mr Mawhinney was restrained from commencing or continuing any civil proceeding that relates in any way to various parcels of land including the access lots, subject to an order under s 166 of the Senior Courts Act 2016: Auckland Council v Mawhinney [2019] NZHC
299. Subsequently, the Court of Appeal reduced the five-year order to three years: Mawhinney v Auckland Council [2021] NZCA 144, [2021] 3 NZLR 519.
16 It is unnecessary to decide exactly what interests in the neighbouring land Mr Mawhinney’s interests previously held, or to address Mr Alderton’s reference to a mortgagee sale of lot 1 deposited plan 320387.
[27] Since 2016, Mr Alderton has been looking to regularise the access strip.17 The access lots make up only part of the access strip. The other part is owned by third parties, including WFL. A number of people use the access strip. In part, it is unformed. Mr Alderton said it needs to be brought up to a decent carriageway standard and there needs to be agreement between the owners over maintenance costs. He said WFL is happy to regularise the access strip and help sort out its development and maintenance issues.
[28] On 21 July 2023 (after this proceeding was commenced), Sixty-Six transferred its 1/10 share in the property to the second respondents.18 Mr Mawhinney said the second respondents are trustees. Thus, the property’s title reflects the Aldertons’ 9/10 share and the second respondents’ 1/10 share.
Scope of originating application
[29] I treat the application as relating to the property comprising all three lots referred to in [4] above. Having given the respondents a further opportunity to address hardship relating to the access lots (even though, as indicated, the scope of the originating application was clear enough from paragraph 2(b)), there is no prejudice to the respondents. Much of Mr Mawhinney’s fifth affidavit and further submissions filed on 5 October 2023 went beyond the scope of the leave granted, and repeated (and expanded) his various substantive arguments in a way that made them increasingly difficult to follow. I will consider the respondents’ claimed hardship relating to the access lots as part of the application below.
Application to adduce further evidence
[30] It is necessary to consider whether to admit Mr Mawhinney’s sixth and seventh affidavits filed after the hearing. The Aldertons’ concern that the originating application not be bogged down by the evidence filed was well-founded, especially given the further filings post-hearing.
17 I do not have regard to the without prejudice correspondence referred to in the evidence, particularly in Mr Mawhinney’s affidavit.
18 Mr Mawhinney said this was to include him as a co-owner so the application could be defended. Dokad Trustees Ltd, the first-named second respondent, is also associated with Mr Mawhinney and his family.
[31] Even in the case of further submissions after a hearing, leave is required and will only be granted in exceptional circumstances.19 At least the same constraint applies to further evidence after a hearing. The conventional requirements for adducing further evidence on appeal – before an appeal hearing – are that the further evidence must be fresh, credible and cogent, and that evidence is not regarded as fresh if it could with reasonable diligence have been produced at the trial.20 Those requirements assist by analogy when considering whether leave should be granted to adduce further evidence after the hearing in this proceeding.
[32] Mr Mawhinney’s sixth affidavit addresses a further application for a subdivision consent lodged with Auckland Council by the trustees of Dokad Trust after the hearing (SUB60425988). SUB60425988 runs to 199 pages.21 Mr Mawhinney said that SUB60425988 will enable the outcome sought – transfer of the 1/10 share in exchange for long-term use of the forestry road, including that part than runs over the main lot. SUB60425988 seeks to subdivide the main lot so that the forestry road is located in a separate parcel. Mr Mawhinney said that SUB60425988 seeks consent to the same division as Mr Alderton’s earlier subdivision consent which lapsed in 2020 (referred to at [62] below). SUB60425988 seeks in part to revive that consent. Mr Mawhinney considers that SUB60425988 must be granted, and that the subdivision can be completed quickly given the options to purchase (in the forestry rights). He says that the amalgamation condition issue that arose with Mr Alderton’s consent will not reoccur.
[33] Mr Mawhinney submitted that it was not practical or prudent to lodge SUB60425988 earlier, for 10 reasons. Most concerned matters that had occurred well before the hearing. The only reason that concerned a matter after the hearing, and which might be considered fresh, was WFL’s October 2023 abandonment of an appeal against this Court’s decision in Waitakere Farms Ltd v Mawhinney relating to lot 323.22 Mr Mawhinney submitted that it would have been imprudent to incur costs with the
19 High Court Rules 2016, r 11.8A; and Practice Note [1968] NZLR 608.
20 Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA) at 192; affirmed in Paper Reclaim Ltd v Aotearoa International Ltd (Further Evidence) (No 1) [2006] NZSC 59, [2007] 2 NZLR 1 at [6].
21 Irregularly, the hard copy affidavit attaches an abridged version of SUB60425988, whereas the electronic version of the affidavit attaches the full version of SUB60425988.
22 Waitakere Farms Ltd v Mawhinney [2023] NZHC 1397.
consent application whilst there was a danger of the forestry right 8601968.3 and the option to purchase in it being extinguished. However, the alternative division proposal could have been put before the Court in advance of the hearing even though SUB60425988 had not been lodged. Even accepting that evidence of the consent application may be fresh and credible, there is a real issue with its cogency. However, I consider it is preferable to address the affidavit’s cogency together with Mr Mawhinney’s other subdivision consent evidence below.
[34] Mr Mawhinney’s seventh affidavit dated 4 June 2024 was filed in reply to Mr Alderton’s affidavit in opposition to the application to adduce further evidence. It was filed instead of brief, properly confined, supplementary written submissions which my directions gave leave to file. It largely repeated Mr Mawhinney’s earlier affidavits and submissions. Mr Mawhinney did note, however, that the application in SUB60425988 is now subject to an appeal to the Environment Court, which may be heard in the last quarter of this year. As it was in reply, I admit this affidavit.
Section 339 – legal principles
[35] Under s 339(1)(c) of the PLA, the Court may make, in respect of property owned by co-owners, an order requiring one or more co-owners to purchase the share in the property of one or more other co-owners at a fair and reasonable price.
[36] Making an order under s 339 involves a broad discretion, limited by s 339(1), but beyond that turning on whatever factor appears to the Court to be relevant when the broad range of factors in s 342 and the broad powers in s 343 are considered.23 As s 339(2) makes clear, the provision largely overrides indefeasibility of title under the Land Transfer Act 2017.24
[37] In considering an application under s 339, the Court must have regard to the following factors set out in s 342:
(a)the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made;
23 Bayly v Hicks [2012 NZCA 589], [2013] 2 NZLR 401 at [27] (concerning division of a property).
24 This is subject to ss 340-342.
(b)the nature and location of the property;
(c)the number of other co-owners and the extent of their shares;
(d)the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order;
(e)the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property; and
(f)any other matters the Court considers relevant.
[38] The further orders available under s 343 include an order that requires the payment of compensation by one or more co-owners of the property to one or more other co-owners.25
Analysis
Co-owners
[39] The threshold requirement under s 339 of the PLA is that the property is owned by co-owners. That is the case here. The Aldertons and the second respondents are tenants in common in unequal shares; 9/10 and 1/10 shares respectively.
[40] The true nature of the arrangement giving rise to the respondents’ 1/10 share in the property was disputed. As Ms Low submitted, it is not critical to the originating application to determine disputed facts as to exactly what the position was in 1997. Section 339 is remedial in nature. The section is available to address difficulties between co-owners. Once the threshold applies, the Court exercises its broad discretion having regard to the mandatory factors. Ms Low accepted, however, that the circumstances of any 1997 arrangement, insofar as they can be ascertained on this originating application, are relevant to the Court’s discretion. I deal with this
25 Property Law Act 2007, s 343(a).
arrangement below under the heading “Any other matters the Court considers relevant”.
[41] I first turn to assess the other statutory factors in s 342 of the PLA on the basis of the affidavit evidence.
The extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made
[42] The Aldertons have a 9/10 share in the property (noting the property comprises the main lot and a 1/8 share of the access lots). The Aldertons’ share is by far the greater proportion of the freehold title.
[43] The Aldertons also have the right to occupy, and absolute ownership of the improvements to, the main lot (at least) by virtue of the 999-year lease. It provides that the Aldertons are entirely responsible for the maintenance of the property. Mr Mawhinney submitted that the Aldertons have zero interest in the proviso to the lessee’s right to quiet enjoyment because they have the right to use the forestry road even if the proviso did not exist. However, that is not the relevant question.
The nature and location of the property
[44] The property’s main lot is the Aldertons’ family home. The main lot is a little over four hectares, in the north western lifestyle/rural suburb of Waitākere. It has a two-level family residence with a recorded floor area of 307m2.
[45] The access lots essentially comprise a strip on the forestry road from Anzac Valley Road up to the main lot. Lot 9 is nearer Anzac Valley Road than lot 200 and makes up only one side of the forestry road.
The number of other co-owners and the extent of their shares
[46] The second respondents are the only other co-owners of the property. They have a 1/10 share, which they hold as trustees. This is a relatively small interest. Under the terms of the 999-year lease, they do not contribute to upkeep of the property.
The hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order
[47] Hardship, for the purposes of s 342(d), is to be read consistently with the policy of the statute which respects property rights of tenants in common, but seeks to resolve conflicts fairly.26
[48] I accept that the Aldertons will suffer hardship if an order is not made. The parties cannot agree on forming the road on the access strip. Without the consent of the co-owners, the Aldertons cannot make the improvements they say are needed. Mr Mawhinney has not been co-operative, disputing the need for improvements. Moreover, while the Aldertons have no immediate intention to sell their 9/10 share in the property, they are understandably concerned that they could not do so without the co-owners’ agreement, or that even with agreement, the Mawhinney interests’ 1/10 share would negatively impact the property’s value. There is no expert valuation evidence quantifying such a negative impact on sale value. Even so, the Aldertons are both in their sixties and Mr Alderton said he intends to retire in the near future. The Aldertons would like to be in a position to move into a smaller property. Given Mr Mawhinney’s approach, it would be even more difficult for the Aldertons’ children to address the issues in the future. Even if not viewed as hardship, these are relevant considerations under s 342(f).
[49] I address Mr Mawhinney’s suggestion that the 1997 arrangement was that the 1/10 share would be exchanged for access land that runs over a small part of the main lot below. But I do not accept that the Aldertons have brought any hardship on themselves by not agreeing to a boundary change and transfer of that part of the property.
[50] Turning to hardship to the respondents, the primary hardship claimed is said to relate to use of the forestry road for the Mawhinney interests’ other subdivision plans. Mr Mawhinney’s various arguments may be addressed in two main categories: the first relating to rights to acquire land and the second relating to subdivision consents or
26 Holster v Grafton (2008) 9 NZCPR 314 (HC) at [50]; cited in Jespersen v Secretary of the Treasury
[2018] NZHC 2603 at [33].
applications that he says remain live. There were also some miscellaneous points to be addressed.
[51] As to the first category, rights to acquire land, even assuming the respondents have options to acquire interests in the access lots from other landowners pursuant to the forestry rights, as successors to the parties to those documents, they have no such right to acquire interests from the Aldertons, irrespective of their 1/10 share in the property. The Mawhinney interests are also bound by the 999-year lease to the Aldertons. Any option to acquire interests in the access lots from other landowners pursuant to the forestry rights is not affected by ownership of the 1/10 share of the property.
[52] As indicated, at the hearing Mr Mawhinney also submitted that he had indefinite access, which I note is inconsistent with his other evidence and his acknowledgment that none of the parties intended the arrangement to apply in the long term. In support of that submission, he referred to the proviso in the 999-year lease. He raised multiple arguments in relation to the lessor’s right in the 999-year lease to pass and repass on foot or by vehicle tracks and carriageways to gain access to and from land owned by the lessor. As this right applies to the lessor, there is no need to consider Mr Mawhinney’s reference to contractual privity under s 12 of the Contract and Commercial Law Act 2017. Assuming the Mawhinney interests are successors to Kitewaho as a lessor, the proviso to the lessee’s right to quiet enjoyment applies only where there is “other land owned by the Lessor”.
[53] In support of a claim to own such “other land”, Mr Mawhinney made various submissions. He relied on the meaning of “owner” in the Resource Management Act 199127 – which includes persons who have agreed in writing to purchase an interest in land – and said this definition applied to the agreements to purchase the land subject to forestry rights. He also referred to the more limited definition of “owner” in s 4 of the PLA, which includes the holder of an estate in fee simple or a life interest in the land, but submitted that s 5(1)(b) of the PLA relating to succession applies. He also submitted (correctly) that the PLA definition of “owner” only applies to subpts 4 and
27 Section 2(1).
5 of pt 5 and pt 6 of that Act. Finally, he relied on the broader meaning of “owner” in s 5 of the Land Transfer Act:
owner—
(a)means the owner of a legal or an equitable estate or interest in land; and
(b)includes a person who has a future estate or interest in land
[54] Here, the relevant issue is the meaning of “owned” in the clause of the 999-year lease containing the lessor’s covenant of quiet enjoyment and its proviso that “the lessor shall be entitled at all times to pass and repass … for the purpose of obtaining access to and from any other land owned by the Lessor…” (emphasis added). That is an issue of contractual interpretation. Mr Mawhinney relied on the reference to an “occupier” in s 301(3) of the PLA, and submitted that the forestry rights are a right to occupy (the holders of which would fall within the definition of “owner” in s 4). But s 301(3) has no application here – it concerns extending the benefit of a covenant to the successors of the covenantee, including an occupier of the benefitted land, not other land such as lots 323 and 324. It may be that “owned” in this context includes freehold and leasehold interests in other land, but here the issue is whether “owned” in this context includes an option to acquire other land (in this case, lots 323 and 324). I accept that the grantee of an option to purchase acquires an immediate equitable interest capable of supporting a caveat.28 But the issue here is whether the access proviso applies before the option is exercised. I doubt that it does for the same reason that an option to acquire land does not give a right of access to that land before it is exercised.
[55] Mr Mawhinney also said that the “purchase” has now been exercised by posting to WFL two copies of a document called an agreement for sale and purchase dated 25 March 2023 (after this proceeding was commenced) between WFL as vendor and Sixty-Six and Mr Mawhinney (or nominees) as purchasers, but which has only been signed by the purchasers. This document relates to memorandum of grant of
28 Bevin v Smith [1994] 3 NZLR 648 (CA) at 665, citing Morland v Hales (1910) 30 NZLR 201 (SC).
forestry right 8601968.3.29 Mr Mawhinney said that this purchase gives the purchasers a 29/40 (72.5 per cent) share in lot 200. He submitted this somehow made it mandatory for the Court to order the land to be sold under s 140 of the (repealed) Land Transfer Act 1952. Even if the respondents did own such a majority share in lot 200, reference to s 140 is misconceived and the cases Mr Mawhinney referred to do not support his position.30 If anything, they support the Aldertons as 9/10 owners of the property.
[56] In any event, I do not consider it likely that this document purporting to purchase WFL’s land for $10, which is said to be “conditional upon the purchasers obtaining advice to their entire satisfaction prior to settlement date” and contains terms not included in the original memorandum of grant of forestry right, amounts to valid exercise of the option to acquire that land such that lot 323 is “owned” by Sixty-Six or Mr Mawhinney so as to enable them to use the access right in the lease. Further, the option to acquire in the memorandum of grant of forestry right is conditional upon obtaining all consents to enable completion of any subdivision necessary to complete the sale and purchase, completion of the subdivision accordingly and provision of access to land remaining in the ownership of the grantor, all at the grantee’s expense. There is no evidence of compliance with any of those preconditions. Thus, even assuming that the respondents are successors to Kitewaho as lessors, the proviso in the lease covenant has no current application. Mr Mawhinney’s interests do not own any “other land” to which the access proviso in the 999-year lease applies. Once Mr Mawhinney’s interests ceased to own neighbouring land, the need to preserve access was arguably spent. While the access proviso might apply again during the life of the 999-year lease if and when the lessor owns such “other land”, the proviso does not create an indefinite right to retain a 1/10 share of the freehold. It is the freehold interest that is in issue in this application.
29 Mr Mawhinney also said in his fifth affidavit filed after the hearing that two copies of a “sale and purchase agreement” had been posted to the proprietor of lot 324 exercising the option in forestry right 7411076.1 to purchase the part that makes up the proposed lot 400 in SUB-2011-63. He submitted this is a 1/80 share. This “sale and purchase agreement” was not in evidence.
30 Styler v James [2020] NZHC 713, (2020) 20 NZCPR 804; and Ngui v Ngui [2020] NZHC 160, (2020) 21 NZCPR 573 at [71].
[57] Mr Mawhinney also submitted there is indefeasibility in the right to pass and repass to gain access to and from other land contained in the proviso in the lease. While that right has no current application, I accept that the order sought under s 339 would not override the lease. Even if acquisition by the Aldertons of the 1/10 share would enable merger of the lease into the freehold interest, with the consequence of extinguishing any access right in the lease, Ms Low submitted that the Aldertons will not cancel the lease and Mr Mawhinney has an interest in lot 9 because of the forestry rights in lots 323 and 324. The order sought would not affect any such separate interest in lot 9 in any event.
[58] Turning to the second main category of Mr Mawhinney’s arguments, subdivision consents or applications that he says remain live, his evidence referred to a number of applications for resource consents or granted consents. He particularly relied on two as having possible ongoing relevance to his hardship claim: SUB-2011-63 and SUB-2008-571.31 He suggested that delay in resolving the access strip is due to consent being “held up by bureaucracy”. I do not consider that is apt given the following chronology, whether or not Mr Alderton is correct that Mr Mawhinney has been arguing with Auckland Council (or its predecessor) since at least 2003.
[59] SUB-2011-63 was granted in 2012. Mr Mawhinney said it remains extant on the basis that the 2019 appeal to this Court against consent conditions has not been finally determined and so the duration period for the subdivision consent has not yet commenced. However, there is no evidence that, since this Court’s decision on 11 April 2019 refusing leave to continue with the appeal, it has been pursued by any other appellant or by Mr Mawhinney following his release from his s 166 restraint order in 2022.32 In any event, it is certainly outside the scope of this proceeding to address Mr Mawhinney’s various resource consent arguments.
31 Mr Mawhinney also said that he relied on any other subdivision that needs access over the part of the forestry road that lies in the main lot, including a possible variation of the application by WFL and subdivision enabled by future district plans that have not yet been formulated. Such generic reference did not assist.
32 The closed file has been recovered from archives. The only document on the file since April 2019 is a memorandum from Mr Mawhinney to the Registrar dated 18 May 2023 enquiring as to the status of the appeal. No steps have been taken before or since.
[60] Further, SUB-2011-63 does not relate to the main lot. It relates to two neighbouring parcels of land and the access lots. It is a consent to divide the two neighbouring parcels, which have shares in the access lots. As indicated, the Mawhinney interests have forestry rights over other land with options to acquire the access lots from other landowners. Mr Mawhinney referred to possibly widening the access strip so that it could be vested as a public road. However, SUB-2011-63 makes no adjustment in respect of the property including the access lots.
[61] Mr Mawhinney also claimed that loss of access over the forestry road that includes the access strip would impact on the subdivision potential of SUB-2008-571, which Mr Mawhinney seems to characterise as a more likely alternative to WFL’s separate subdivision consent application (although Mr Alderton says that WFL’s application involves access from Bethells Road on the far side of WFL’s land). However, even if enforcement orders are made and ultimately lead to SUB-2008-571 being granted, Mr Mawhinney does not explain how he intends to implement this consent given that there is third-party ownership of the majority of that land (despite the suggested purchase already addressed). Moreover, as indicated, insofar as the Mawhinney interests may acquire an interest in that other land and implement SUB-2008-571, they will be able to secure access irrespective of the 1/10 share of the property. Also, according to Mr Mawhinney, he has other interests in the driveway.
[62] Mr Mawhinney also said that Mr Alderton obtained a separate subdivision consent in 2015 to replace the access strip with a jointly owned access lot. He said this subdivision consent would have resolved the issue by locating the forestry road on a separate access lot, except that the Mawhinney interests had no prior knowledge of amalgamation conditions that would enable another 47 lots to use it (when WFL subsequently proposed to divide lot 1 deposited plan 320387 into 47 allotments). Mr Mawhinney said those amalgamation conditions have the potential to destroy the utility of SUB-2011-63. Mr Alderton denied any such conspiracy with WFL and did not accept that the plan he sent to Mr Mawhinney did not include the amalgamation conditions. It is unnecessary to decide this (albeit the timing of Mr Alderton’s change to his survey plan – before he had dealings with WFL – casts doubt on the allegation). In any event, Mr Mawhinney said that Mr Alderton’s consent lapsed in 2020, which Mr Alderton accepted. Mr Mawhinney cannot unilaterally achieve his suggested
solution of having Mr Alderton’s lapsed consent reinstated, but with changed amalgamation conditions, whereby a 998/1000 share in the separate access lot would be transferred to the respondents (irrespective of whether that is lawful if they are not served by the access) so as to avoid WFL getting the benefit of that access and increase the prospect that WFL will co-operate to implement SUB-2011-63 (Mr Mawhinney referred to providing WFL a right of way easement).
[63] The further subdivision consent application adduced in Mr Mawhinney’s sixth affidavit after the hearing, SUB60425988, seeks to enable transfer of the 1/10 share in exchange for long-term use of the forestry road, including that part that runs over the main lot, by subdividing the main lot so that the forestry road is located in a separate parcel. Mr Mawhinney expresses confidence that SUB60425988 will be granted with favourable conditions. However, it is not for the Court in this proceeding to assess the merits of SUB60425988. In this proceeding, the respondents did not seek an order for the division of the property in kind among the co-owners.33 SUB60425988 also affects other land, namely lot 323 and lot 324 (and Mr Alderton says that lot 323 is no longer owned by WFL). In any event, assuming consent is granted in SUB60425988, making use of the consent can only occur with the involvement of the Aldertons as co-owners of the property.34 The further subdivision consent application SUB60425988 is not a reason to decline the Aldertons’ current application, nor to defer determination of this proceeding pending determination of a separate Environment Court appeal. For these reasons, this further evidence is not cogent.
[64] Stepping back, SUB-2011-63, SUB-2008-571 and SUB60425988 appear fraught with difficulty given Auckland Council’s position, and are unlikely to give rise to an opportunity for Mr Mawhinney’s interests to purchase adjoining land.
[65] Mr Mawhinney also said several times that the existing carriageway of the forestry road runs over part of the main lot, which I infer would affect use of the forestry road for the Mawhinney interests’ subdivision plans. He raised this in the context of what he said was the 1997 arrangement, so I will deal with it separately below.
33 Property Law Act, s 339(1)(b).
34 MacLaurin v Hexton Holdings Ltd [2008] NZCA 570, (2008) 10 NZCPR 1 at [47].
[66] Even accepting that the Mawhinney interests wish to do something more with the neighbouring parcels of land, I do not consider the order sought would cause hardship to the respondents that outweighs the hardship to the Aldertons. The Aldertons are not seeking to deprive the respondents of something needed to make a subdivision work. The order sought in this proceeding would not preclude the Mawhinney interests from continuing to seek further consents or exercising legitimate rights in relation to other land. The Land Transfer Act includes provisions in relation to access strips.35
[67] I now deal with Mr Mawhinney’s remaining miscellaneous hardship arguments. In his fifth affidavit, filed with leave after the hearing, he claimed hardship relating to easements in place benefitting the 1/8 share in lot 9, one of the access lots. These easements relate to stock grazing, stock access and horse riding.36 The burdened land is lot 1 deposited plan 320387. Mr Mawhinney submitted that the easements prevent or greatly inhibit WFL’s proposed subdivision into 47 allotments. He expects that WFL will be prepared to negotiate and he said the respondents might agree to surrender the easements in part or in full in return for a share in the net proceeds of the proposed subdivision. He submitted that if the order sought is made, the Aldertons would hold that “bargaining chip”. This is consistent with what Mr Alderton said Mr Mawhinney told him – that he believes he will get one of the adjoining lots back (from WFL). Mr Alderton said that Mr Mawhinney appears to be trying to hold onto the property as some sort of leverage against WFL. I do not consider that losing the chance to deploy such easements for a collateral purpose – as a bargaining chip – amounts to hardship.
[68] Mr Mawhinney did also suggest there were proposals to set up a venture that would include horse riding over tracks and roads including lot 9 and lot 200. However, in the absence of a more definite proposal, this seems an unlikely alternative to his proposed bargaining chip, and does not amount to material hardship. Mr Mawhinney’s submissions sought conversion of the easements over lot 1 deposited plan 320387 into easements in gross, which he submitted would result
35 Land Transfer Act 2017, pt 4, subpt 3.
36 There is also a water easement relating to the stock grazing.
in the Aldertons ceasing to own lot 9. Even if that was the result of such conversion, it is not appropriate on this application.
[69] Separately in relation to lot 9, Mr Mawhinney also submitted that the Aldertons are bound to sell their interest in lot 9 under an option to purchase in registered lease C878988.1. That is a 999-year lease between Mawhinney interests dated 13 July 1995. Ms Low submitted that such rights, if available to Mawhinney interests, are unaffected by the present application by virtue of lease C878988.1.
[70] While that 1995 lease is noted on the property’s title, it is recorded as a lease “of part” of the property.37 The preceding title NA110B/244 refers to this lease as a lease of lot 8 deposited plan 166619. Further, even if it was a lease of lot 9, it could not have remained in place in August 1997 given the 999-year lease of lot 9 to the Aldertons. There is also a historical search copy of the leasehold title for the 1995 lease indicating surrender in 2010.38
[71] Finally, in relation to hardship, Mr Mawhinney also submitted that dilution of the respondents’ shares in lot 200 would make it harder for lot 200 to be vested as a public road or to be adopted as private road. However, there is no other evidence to suggest that the transfer of a 1/8 share in lot 200 would make a material difference in this respect.
[72] For these reasons, I conclude that the hardship that would be caused to the Aldertons by refusing the order outweighs the hardship that would be caused to the second respondents and their associated interests by making the order.
The value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property
[73] The Aldertons have contributed considerable improvements to the property, including building a home, and the lease provides them with ownership of the
37 The lease itself relates to the “land comprising 107.3556 hectares more or less being Lot 1 Deposited Plan 163750 and being Part Allotments 16 and 17 Parish of Waipareira and being all the land comprised and described in Certificate of Title Volume 93C Folio 769 North Auckland Land Registry”.
38 Identifier 414092.
improvements. There is no suggestion the respondents have contributed to any improvements to, or maintenance of, the property.
Any other matters the Court considers relevant
[74] Mr Mawhinney submitted that the relief sought is ultra vires as it would require the Court to contravene s 241(2)(a) of the Resource Management Act. I accept that the property’s title records that it is subject to s 241(2). Assuming that s 241(2)(a) applies to the 1999 subdivision consent conditions requiring the access lots to be held as to specified undivided shares by the owners of specified lots, the subsection provides that the separate parcels of land included in the record of title shall not be capable of being disposed of individually or of again being held under separate records of title, except with the approval of the territorial authority. That precludes individual disposal of the separate parcels of land included in the record of title without approval. It does not preclude disposal of a share of all the parcels of land included in the record of title, which is the relief sought.
[75] As indicated, it is not critical to the application to determine disputed facts as to exactly what the position was in 1997. It is relevant, however, to consider the circumstances of any 1997 arrangement. The starting point is that there is no covenant on the property title addressing transfer of the 1/10 share. Nor is there any other evidence of a written agreement. Mr Mawhinney submitted that s 24 of the PLA – which provides that contracts for disposition of land are not enforceable unless in writing – somehow precludes relief under s 342. It does not. However, I accept that the lack of a written agreement providing for the return of the 1/10 share to the Aldertons is relevant.
[76] Limited contemporaneous documents relating to the 1997 arrangement are now available, but there is the Corban Revell letter to Mr Alderton dated 16 April 1997. Ms Low submitted that the letter from Corban Revell, acting for Mr Mawhinney’s interests, is a relevant and important consideration. She characterised it as a representation from Mr Mawhinney. Mr Mawhinney’s affidavit dated 20 February 2023 said that this letter predated the transfer and lease back to the Aldertons dated 22 August 1997.
[77] Mr Mawhinney also referred to a subdivision carried out by Riveria in 2002 which included the creation of lot 200. He submitted these dealings were inconsistent with Mr Alderton’s statement that he cannot transfer the access strip to Mawhinney interests because they do not own any adjoining land. I note that statement by Mr Alderton was merely part of his explanation for why he had declined Mr Mawhinney’s request for transfer of the access strip.
[78] Mr Mawhinney subsequently submitted that Corban Revell was acting for the Aldertons, not him. That seems unlikely given the terms of the letter and the fact that Corban Revell prepared the earlier 1995 lease between Mawhinney interests. In any event, I accept that Corban Revell’s 16 April 1997 letter is insufficient to establish a pre-contractual representation.
[79] Even so, Mr Alderton’s evidence was that, while he could not recall the full detail of the deal he had with Mr Mawhinney in 1997, Mr Mawhinney was to transfer the 1/10 share when he had finished the subdivision of lot 8 (later lot 1), and that the Corban Revell letter reflected his understanding of the arrangement. The subdivision of lot 8 initially occurred in 2005.
[80] Between his first affidavit and the hearing, Mr Mawhinney adopted another position in his August 2023 affidavit, as indicated, suggesting that the arrangement in 1997 was that the 1/10 share would be exchanged for access land that ran over a small part of lot 309, the main lot. Accepting that the 1/10 share may have been to avoid the cost of surfacing the forestry road,39 the contemporaneous documents do not corroborate an arrangement to exchange the 1/10 share for that part of the main lot. In any event, access over that small part of the main lot would not require transfer of that part to the Mawhinney interests (in the suggested expectation that smaller undivided shares could later be transferred to new owners of neighbouring subdivided land). Access rights over that part of the main lot would suffice (for those with an interest in the neighbouring land needing access). Even if a boundary change was necessary (such as for a public road), that would not have involved transfer to the Mawhinney interests. Indeed, Mr Mawhinney’s submissions also characterised the
39 Mr Mawhinney says this has now occurred in any event.
arrangement as a transfer of the 1/10 share when the part of the forestry road on the main lot was formally made into permanent public access. That is also inconsistent with an arrangement to exchange the 1/10 share for that part of the main lot.
[81] Mr Mawhinney’s third affidavit then suggested that the main lot was transferred from Kitewaho to the Aldertons in 1997/98, and then again in 2002, so that the subdivision carried out by Mr Alderton was not at the threshold level applied by the IRD for property development. Mr Alderton says this is incorrect. It is unnecessary to address Mr Mawhinney’s suggestion, which in any event does not provide a basis for retaining a 1/10 share. It is not material to the current application many years after transfer to the Aldertons.
[82] The evidence indicates that the arrangement involved retention of a 1/10 share pending resolution of the access strip needed for the Mawhinney interests’ subdivision of the neighbouring lots, and was not intended to be long-term. It has continued well beyond what could have been in the reasonable contemplation of the parties, given the difficulties arising with the Mawhinney interests’ subdivision plans and third-party ownership of the neighbouring lots. The various subdivision consents, applications and other arguments do not justify ongoing retention of the respondents’ 1/10 share of the property, including the main lot. The arrangement should be brought to an end without further delay. It is now 27 years since 1997.
Conclusion
[83] Having regard to all these factors, I consider it is appropriate to make an order requiring the Aldertons to purchase, and the second respondents to sell, the second respondents’ 1/10 share in the property at a fair and reasonable price.
Compensation
[84] The Aldertons accept that compensation is ordinarily payable when an order is made (despite the reference in the Corban Revell letter to the 10 per cent interest being discharged without payment). Compensation under s 343(a) of the PLA, however, is separate from the need to pay a fair and reasonable price under s 339(1)(c). The Aldertons are willing to pay a fair price for the Mawhinney interests’ 1/10 share.
[85] I do not accept Mr Mawhinney’s submission that compensation should be determined at a further hearing. Any evidence needed to be filed before the hearing. Mr Colcord provided expert valuation evidence, which was not challenged by another expert valuer. I accept Mr Colcord’s valuation opinions that the value of the property sits exclusively with the Aldertons despite there being a registered 1/10 share in favour of the respondents, and that the registered lease which has created the lessor’s interest in favour of the respondents has nil value for exchange on the open market as there is no benefit to be derived in purchasing this interest. I do not accept Mr Mawhinney’s suggestion that the value of the 1/10 share should take into account the subdivision potential of interests in other properties, or an arrangement whereby it is to be exchanged for access over the forestry road that lies partly in the main lot, for the reasons already given.
[86] However, as the Aldertons fairly accept, even though there is no quantifiable detriment to the Mawhinney interests, there is a benefit to the Aldertons in having the “blot” on their title removed. In the absence of a difference in value, the benefit of removing the “blot” might be quantified by reference to any cost saving to the party seeking removal when the other party has acted reasonably. However, that does not apply here. The Aldertons have been put to additional cost by a lack of co-operation and ultimately a wide-ranging and unsuccessful opposition to this application. The benefit of removal of the respondents’ interest on the title might also be quantified by reference to the cost saving of the 10 per cent arrangement (described by Mr Mawhinney as the “cheaper option”) compared with the alternative of obtaining a right of way (and surfacing the forestry road) when the land in deposited plan 210991 was subdivided. However, there was no evidence quantifying such a cost saving either.
[87] In these circumstances, it might be appropriate to set the fair and reasonable price to purchase the second respondents’ 1/10 share at zero. However, I consider it fairer to apply a modest but more than nominal price of $10,000 to reflect the benefit to the Aldertons in having the “blot” on their title removed.
Result
[88] I make an order requiring the Aldertons to purchase, and the second respondents to sell, the second respondents’ 1/10 share in the property comprising lot 309, deposited plan 210991, and a 1/8 share in each of lot 200, deposited plan 210991, and lot 9, deposited plan 166619,40 at the price of $10,000.
Costs
[89] The Aldertons are entitled to costs against the respondents jointly and severally. I urge the parties to take a reasonable and proportionate approach to finalising costs. The costs principles applicable under the High Court Rules 2016 are settled. They provide guidance to the parties to assist in the quantification of costs in a cost- effective way.
[90] If costs cannot be agreed, memoranda (not exceeding three pages) may be filed within 20 working days, and I will determine costs on the papers.
Gault J
40 Identifier 645960.
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