Auckland Council v Analie Properties Limited
[2022] NZHC 269
•28 February 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-1043
[2022] NZHC 269
UNDER Property Law Act 2007 and the Declaratory Judgments Act 1908 IN THE MATTER
of an application under s 3 of the
Declaratory Judgments Act 1908 and/or the Court’s inherent jurisdiction for a declaration as to claimed interests with respect to records of title NA25B/679, NA62D/735 and NA62D/740
AND
IN THE MATTER
of an application under s 142 of the Land Transfer Act for an order that the caveats created by instruments 11686493.1,
11691920.1, 11691951.1 and 11691866.1 are
removedBETWEEN
AUCKLAND COUNCIL
Applicant
AND
ANALIE PROPERTIES LIMITED
First Respondent
………………………………Continued
Hearing: 8-11 and 14 February 2022 Appearances:
I J Thain and I E Scorgie for Applicant
G H Brant, O Ward and J M van Bolderen for Cleethorpes Sixty Two Ltd, Analie Properties Ltd, Parkview Commercial Ltd and the trustees of the Stockley Family Trust
No appearance for remaining respondents
Judgment:
28 February 2022
JUDGMENT OF LANG J
AUCKLAND COUNCIL v ANALIE PROPERTIES LIMITED [2022] NZHC 269 [28 February 2022]
CLEETHORPES SIXTY TWO LIMITED
Second Respondent
PARKVIEW COMMERCIAL LIMITED
Third Respondent
REBECCA LOUISE GALLACHER,
RICHARD GARETH STOCKLEY of RK STOCKLEY TRUSTEES LIMITED
Fourth Respondent
BODY CORPORATE 471999
Fifth Respondent
EUN TAI YI and MI HYANG CHO
Sixth Respondent
FAITH CITY TRUST BOARD
Seventh Respondent
OSTERLY 6 LIMITED
Eighth Respondents
THE FRIENDSHIP HOUSE FOUNDATION
Tenth Respondent
VMAX LIMITED
Eleventh Respondent
AUCKLAND COUNCIL
Twelfth Respondent
This judgment was delivered by me on 28 February 2022 at 2 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
Solicitors:
DLA Piper, Auckland Stace Hammond, Hamilton
CIV-2018-404-2882
UNDERProperty Law Act 2007 and the Declaratory Judgments Act 1908
IN THE MATTER of an application under s 316 of the
Property Law Act 2007 for an order under s 317 of that Act extinguishing covenants
created by memoranda of transfer numbered 425929.1, 679401.3, B011484.1
and 737669.4
AND
IN THE MATTER of an application under s 3 of the
Declaratory Judgments Act 1908 for a declaration as to the construction of the covenants if not extinguished
BETWEEN AUCKLAND COUNCIL
Applicant
AND CLEETHORPES SIXTY TWO LIMITED
First Respondent
OSTERLEY WAY INVESTMENTS LIMITED
Second Respondent
THE FRIENDSHIP HOUSE FOUNDATION
Third Respondent
ANALIE PROPERTIES LIMITED
Fourth RespondentOSTERLEY 6 LIMITED
Fifth RespondentPARKVIEW COMMERCIAL LIMITED
Sixth RespondentBODY CORPORATE 471999
Seventh RespondentA LONG MA
Eighth Respondent
AC MOVING FORWARD LIMITED
Ninth Respondent
AKHTAR INVESTMENTS LIMITED
Tenth RespondentAMITA RAJESH GANTRA & RAJESH CHUNILAL GANATRA
Eleventh RespondentsAMRITA MAKHNI & VIKRAM SINGH MAKHNI
Twelfth Respondents
ANDREW BERNARD LYSAGHT & CLAIRE ANDREA LYSAGHT
Thirteenth Respondents
ANDRENA HOLDINGS LIMITED
Fourteenth RespondentsANJUM SHAMA NAFIS & NEE SEZE KHOO
Fifteenth Respondents
ANTHONY JOHANNES PEPPING & MIRRIAN ROSITA MACKAY
Sixteenth Respondents
AVENDRAN KRISHNA NAIDU & SHILAJA KARTIK GOPAL
Seventeenth Respondents
BADENOCH ENTERPRISES LIMITED
Eighteenth RespondentBHARDWAJ FAMILY TRUST LIMITED
Nineteenth RespondentBONG LAI CHO & JI IN LEE
Twentieth RespondentsBRETT JAMES MATHER & HOLLAND BECKETT TRUSTEE NO. 12 LIMITED
Twenty-First RespondentsBRUCE JAMES BELL
Twenty-Second Respondent
CHI POON CHRISTOPHER NG & YIN SIU SYLVIA LAU
Twenty-Third Respondents
CHIUNG-YU LIN & TSANG-LIANG JIANG
Twenty-Fourth Respondents
CHRISTINA MARY GREEN & JAMES JOSEPH GREEN
Twenty-Fifth Respondents
CORACLE INVESTMENTS LIMITED
Twenty-Sixth Respondents
DAVID THOMAS LEONARD WALMSLEY & WENTY LORRAINE WALMSLEY
Twenty-Seventh Respondents
DEZHEN POH, KIANG KHANG POH & MICHAEL POH
Twenty-Eighth Respondents
EAST PROPERTY CONSTRUCTION LIMITED
Twenty-Ninth Respondent
EDWARD MORRIS RASMUSSEN & SUE KILISIMASI RASMUSSEN
Thirtieth Respondents
EH HONG TAN & HOW TEK SIA
Thirty-First Respondents
ELIZA RAIHA JACKSON, TANIA MARIE JACKSON & TERENCE JOHN JACKSON
Thirty-Second Respondents
ELLIAZ IFTIKAR AKBAR & YASIBUN NISHA AKBAR
Thirty-Third Respondents
ENG KIAT YEO & FRANCISCA SZE GO
Thirty-Fourth Respondents
ESEDAYLE LIMITED
Thirty-Fifth Respondent FEIYEE TRADING LIMITED
Thirty-Sixth Respondent
FLOINDA SALIBA REYES
Thirty-Seventh RespondentG S BUILDERS LIMITED
Thirty-Eighth RespondentGAGANDEEP SINGH
Thirty-Ninth RespondentGALAPARK LIMITED
Fortieth Respondent
GAVIN ROSS LAW, KEVIN ASHLEY BOOTH & RAMILA VALA
Forty-First Respondent
GK INTERNATIONAL LIMITED
Forty-Second RespondentGMU LIMITED
Forty-Third RespondentGRACE FANG ANDRE & JOCELYN DANIEL GERARD ANDRE
Forty-Fourth Respondents
GRANT ERROL ALEXANDER
Forty-Fifth RespondentH2C INVESTMENTS LIMITED
Forty-Sixth RespondentHAIJIANG LIU
Forty-Seventh RespondentHANS PROPERTIES LIMITED
Forty-Eighth RespondentHOMES FOREVER LIMITED
Forty-Ninth RespondentHOUSING NEW ZEALAND LIMITED
Fiftieth RespondentHUI-CHEN KUO & LIANG-NAN CHEN
Fifty-First Respondent
HWEE KIANG IRENE BENNETT & JOHN RICHARD BENNETT
Fifty-Second Respondents
IAN STUART CALVERT & RAEWYN CHRISTINE CALVERT
Fifty-Third Respondents
IRFANA BIBI ALI & SHIRAZ HUSSEIN ALI
Fifty-Fourth Respondents
J & C PEGLEY PROPERTIES LIMITED
Fifty-Fifth Respondent
MOHAMMED FAIYAM KHAN & JASMINE SHEHNAZ KHAN
Fifty-Sixth Respondents
JAYPRAKASH AMRUTLAL PARMAR & RUPESHKUMAR JAYPRAKEASH PARMAR
Fifth-Seventh Respondent
JAYPRAKASH AMRUTLAL PARMAR & RUPESHKUMAR JAYPRAKEASH PARMAR
Fifty-Eighth Respondent
JCB PROPERTY HOLDINGS LIMITED
Fifty-Ninth Respondent
JIE DENG
Sixtieth Respondent
JON KIANG SOO & YANG YANG
Sixty-First Respondents
JOYTIKA ARCHANA AWADH & SULJA CHAND
Sixty-Second Respondents
JULIE RACHEL BENNS
Sixty-Third Respondent
KAI TAI CHAN
Sixty-Fourth Respondent
KAMALAPADI GOPAL & RAM GOPAL
Sixty-Fifth Respondents
KRISHNAN KUPPEN & MOHANRAJ KRISNAN
Sixth-Seventh Respondents
KRISHNAN KUPPEN & YUVARAJ KRISHNAN
Sixty-Eighth Respondents
KULJIT KAUR
Sixty-Ninth RespondentKWAI TAN YUE
Seventieth RespondentLAI CHU PANG JIM & YON FOOK JIM
Seventy-First Respondents
MARK IAN LAYFIELD
Seventy-Second RespondentMEAGHAN INVESTMENTS LIMITED
Seventy-Third RespondentMILLENIUM INVESTMENTS (2002) LIMITED
Seventy-Fourth Respondent
MITHUN ASHWINDRA NARAYAN GAUNDAR & SUMAN LATA
Seventy-Fifth Respondents
MONICA CATHERINE BOWER & PETER BOWER
Seventy-Sixth Respondent
NAM HA & THI DANG HA
Seventy-Seventh RespondentNECTARANS LIMITED
Seventy-Eighth RespondentNGATOKORUA TUAKAMA POKOINA & TUTEARIIHIA POKOINA
Seventy-Ninth Respondents
NIMBUS AWHINA STANILAND & UANI RHODES TALAGI
Eightieth Respondents
PAUL SIMMONS
Eighty-First RespondentPETER WATERS & SUSHILA WALTERS
Eighty-Second Respondents
PREENIKA PAYAL SINGH & RITESH VICKASH RAJ
Eighty-Third Respondents
PRIYANG DILIPKUMAR PATEL & TRUPTI THAKKARSHI PATEL
Eighty-Fourth Respondents
RAGNI CHETTY, SIVANATHEN CHETTY & YETINZ CORPORATE TRUSTEE LIMITED
Eighty-Fifth Respondents
RAMANDRA PRAKASH & VINEETA DEVI PRAKASH
Eighty-Sixth Respondents
RAMESH CHANDRA CHHOTALAL MEHTA & MEHAT KUMAR MANSUKHLAL VATHER
Eighty-Seventh Respondents
RIAZ MOHAMMED
Eighty-Eighth Respondent
RISHA HOLDINGS (NZ) LIMITED
Eighty-Ninth Respondent
RITESH LAL
Ninetieth Respondent
RNB PROPERTIES LIMITED
Ninety-First Respondent
ROSHNI LATA SIMMONS
Ninety-Second Respondent
ROTECH INVESTMENT LIMITED
Ninety-Third Respondent
RUTH URMILA DEVI PRAKASH
Ninety-Fourth Respondent
SAMUEL NASAU FUIMAONO & TUIMATAVAI ROSETTA RETI SIMANU
Ninety-Fifth Respondents
SANJAY PIET PATEL WALTERS
Ninety-Sixth Respondent
SEREIMA LIMITED
Ninety-Seventh Respondent
SHABNAM NAZIA ALI & ZOHEB ALI
Ninety-Eighth Respondents
SHANON GAVIN GODDARD & TAMMY LOUISA GODDARD
Ninety-Ninth Respondents
SHUQIN WENG
One-hundred First Respondent
SNR INVESTMENTS LIMITED
One-hundred Second Respondent
SUBHAN CHAND
One-hundred Third Respondent
SUSAN JOHANNA DOROTHEA LUSK
& WINSTON’S COMPANY LIMITEDOne-hundred Fourth Respondent
SWETAKUMARI JAYPRAKASH PARMAR
One-hundred Fifth Respondent
T & K LY INVESTMENT LIMITED
One-hundred Sixth Respondent
TANGLEWOOD (ASCOT) LIMITED
One-hundred Seventh Respondent
THE JAN ALBERTS TRUST CO LIMITED
One-hundred Eighth Respondent
THIYAGA RAJ KRISHNAN
One-hundred Ninth Respondent
TRACEY REBECCA CHAND
One-hundred Tenth Respondent TUYET HUONG TIEU
One-hundred Eleventh Respondent
TWIN TOWERS PROPERTY 2015 LIMITED
One-hundred Twelfth Respondent
U N I LIMITED
One-hundred Thirteenth RespondentULTIMATE HOME INVESTMENT LIMITED
One-hundred Fourteenth Respondent
VALERIE JONES LARKINS
One-hundred Fifteenth RespondentVANKE CO. LIMITED
One-hundred Sixteenth RespondentWEN GAO
One-hundred Seventeenth RespondentXIOLIN SHI
One-hundred Eighteenth Respondent
YUANFEN LI
One-hundred Nineteenth RespondentZHOU WU
One-hundred Twentieth RespondentAUCKLAND COUNCIL
One-hundred Twenty-First RespondentCIULAM INDUSTRY LIMITED
One-hundred Twenty-Second RespondentEUN TAE YI & MI HYANG CHO
One-hundred Twenty-Third RespondentFAITH CITY TRUST BOARD
One-hundred Twenty-Fourth RespondentMANUKAU CITY CENTRE LIMITED
One-hundred Twenty-Fifth Respondent
MCDONALDS RESTAURANTS (NEW ZEALAND) LIMITED
One-hundred Twenty-Sixth Respondent
PMG DIRECT OFFICE FUND TRUSTEES LIMITED
One-hundred Twenty-Seventh Respondent
REBECCA LOUISE STOCKLEY, RICHARD GARETH STOCKLEY & RL STOCKLEY TRUSTEES LIMITED
One-hundred Twenty-Eighth Respondents
AUCKLAND COUNCIL
One-hundred Twenty Ninth Respondent
Index
PART ONE: The Caveat proceeding................................................................. [8]
The competing arguments [8]
Approach [11]
The argument for the opposing respondents in greater detail [13]
The history of the Manukau City Centre development [16]
Early days [16]
Restrictive covenants....................................................................................... [27]
Correspondence relied upon by the opposing respondents [37]
Transfer and surrender of the lease [46]
Analysis.............................................................................................................. [56]
Decision [65]
Result [76]
PART TWO: The Covenant Proceeding.......................................................... [78]
A. The application to extinguish the restrictive covenants [79]
Relevant principles.............................................................................................. [83]
Jurisdiction under s 317(1)................................................................................ [85]
Section 317(1)(a) [86]
Section 317 (1)(b) [92]
Section 317 (1)(d) [95]
Sections 317(1)(f), 317(1)(a)(iii) and the exercise of the Court’s discretion [106]
Result: orders.................................................................................................... [115]
B. Does the restrictive covenant prevent the owner of the land from selling food and beverages for immediate consumption and providing associated goods and services (including by cafes, restaurants and food
stalls)?................................................................................................................ [116]
Costs.................................................................................................................. [123]
[1] These proceedings concern disputes between owners of land situated in the Manukau City Centre.
[2] In the first, the caveat proceeding,1 the Auckland Council (the Council) seeks an order under s 142 of the Land Transfer Act 2017 (LTA) removing caveats that the first to fourth respondents have registered against the titles to three properties owned by the Council. All twelve respondents in the caveat proceeding own office buildings near the Council’s land and currently use the Council’s land for carparking. They are invoiced monthly by the Council’s agent, Auckland Transport. The carparks are in two separate locations a short distance apart. There are approximately 350 car parks on the larger site and approximately 110 car parks on the smaller site.
[3] The Council advances its application to remove the caveats on the basis that the first to fourth respondents have no caveatable interest in the carpark land. It goes further, however, and seeks a declaration that none of the respondents has any interest in the carpark land. The first to fourth respondents oppose the caveat being removed because they say the Council arguably holds the land under a constructive trust for their benefit. They also oppose the declaration the Council seeks.
[4] The remaining respondents have been served with the caveat proceeding but have taken no steps to oppose it.2 They will, however, be bound by the Court’s decision in this proceeding.
[5] In the second proceeding, the covenant proceeding,3 the Council seeks orders under s 317 of the Property Law Act 1957 (the PLA) extinguishing restrictive covenants registered against the titles to three parcels of land that it owns in the Manukau City Centre. Each of the covenants prohibits the owner of the property in question from using it for the purpose of retail or wholesale shopping activities. In the alternative, the Council seeks a declaration that the sale of food and beverages for immediate consumption is not an activity that breaches the restrictive covenants.
[6] The covenant proceeding was served on the owners of all 123 properties that enjoy the benefit of the restrictive covenant registered against the Council’s land. Some of those properties are also subject to the same restrictive covenants. The largest of the properties that enjoys the benefit of the covenants is owned by Manukau City
1 CIV-2021-404-1043.
2 Takahe Properties Ltd (the eighth respondent) initially filed a notice of opposition to the Council’s applications but subsequently withdrew its opposition.
3 CIV-2018-404-2882.
Centre Ltd. That company operates a very large Westfield shopping mall on its land. Manukau City Centre Ltd supports the Council’s applications, as does the Council in its capacity as the owner of other land in the Manukau City Centre that enjoys the benefit of the covenants. Kainga Ora, formerly Housing New Zealand, owns several units in a residential apartment block that enjoys the benefit of the covenants. It also supports the Council’s application to extinguish the restrictive covenants.
[7] The only landowners who oppose the applications in the covenant proceeding are the four respondents who also oppose the Council’s applications in the caveat proceeding.
PART ONE: The Caveat proceeding
The competing arguments
[8] The Council’s position is straightforward. It is the registered proprietor of the land that is subject to the caveats. It says the opposing respondents have no interest in the carpark land, let alone any caveatable interest in it. It therefore contends it is entitled to an order removing each of the caveats and a declaration that none of the respondents has an interest in the carpark land.
[9] The Council points out that its predecessor, the Manukau City Council, originally leased much of the land on which the Manukau City Centre was to be constructed to the developer of that project, a consortium called Fletcher-Mainline Ltd (Fletcher Mainline). In 2001, once the development had largely been completed, Fletcher Mainline transferred the lease to Manukau City Centre Ltd, the owner of the land on which the Westfield shopping mall is now located. In 2005, Manukau City Centre Ltd surrendered the lease of the office carpark land to the Council. Since that time the Council has been responsible for administering the car parks. It considers the respondents have a licence to occupy the land and it has charged them a monthly licence fee accordingly. The Council contends the licence arrangement does not provide the respondents with any legal or beneficial interest in the car park land. It also says it is entitled to terminate the licence to occupy the land on one months’ notice.
[10] The opposing respondents contend the legal position is not as straightforward as the Council makes out. They say it needs to be viewed in light of the history of the development of the Manukau City Centre. They point out that the respondents all own land in the Manukau City Centre upon which office buildings have been built, and that
they have an interest in the carpark land because of contractual arrangements that their predecessors in title entered into with the Manukau City Council and Fletcher Mainline. According to the opposing respondents, these arrangements resulted in some of their predecessors in title contributing to the capital costs of developing the carpark land. Thereafter, the owners of the office buildings have continued to meet the outgoings on the carpark land on the basis that they would have the ongoing right to use that land as a carpark. They say the Council knew of that right when it accepted a surrender of the lease from Manukau City Centre Ltd in 2005. They therefore contend the carpark land is subject to an institutional constructive trust in their favour, and that it would be unconscionable for the Council to deal with it in a manner inconsistent with their rights.
Approach
[11] An application for an order removing a caveat is not usually an appropriate means by which to determine substantive rights in land. In order to establish a caveatable interest in land, the caveator must normally only show that its case is arguable. This reflects the fact that such an application is a summary procedure that is not suited to the determination of contested issues of fact.
[12] The position in the present case is different because all affected parties have been served and those who oppose the application have had an opportunity to cross- examine the Council’s witnesses. The Council has also been able to cross-examine the witness called by the opposing respondents. It is therefore now possible for the Court to determine whether the respondents hold any interest in the carpark land.
The argument for the opposing respondents in greater detail
[13] The caveats lodged by the opposing respondents contend that the Council holds an interest in the car park land as trustee of a constructive trust that resulted from the surrender of the lease of the car parks in 2005. Three of the caveats also allege that the Council “had knowledge of the beneficiary’s rights in the lease” for the benefit of the caveator. The opposing respondents are limited to these assertions in opposing the application for removal of their caveats. However, they are entitled to rely upon a wider argument in response to the Council’s application seeking a declaration that they have no legal or equitable rights in the car park land. In particular, they are entitled to rely upon any exceptions to the principle of indefeasibility of title that is now enshrined in s 51 of the LTA. These are preserved by ss 52 to 56 of the LTA.
[14] One exception is where the registered proprietor of land is found to have conducted itself so as to give rise to a claim against it in equity. This is commonly referred to as an “in personam” claim given that equity provides relief by making orders against persons rather than against property. In Duncan v McDonald the Court of Appeal explained this principle in the following way:4
Registered title is subject to a further qualification, the limits of which have very recently been explored by this Court in CN & NA Davies Ltd v Laughton (CA264/96, judgment 21 July 1997), namely that the registered proprietor may be subjected to claims arising out of his or her personal conduct (in personam claims), whether that conduct occurred before or after registration. Registered proprietors may be required to hold their estate or interest, and to deal with it, so as to give effect to obligations with which they have burdened themselves at law or in equity so long as enforcement of those claims is not inconsistent with the objective of the Torrens system. Barwick CJ remarked in Breskvar v Wall (at p384-5):
“Proceedings may of course be brought against the registered proprietor … by persons setting up matters depending upon the acts of the registered proprietor himself. These may have as their terminal point, orders binding the registered proprietor to divest himself wholly or partly of the estate or interest vested in him by registration and endorsement of the certificate of title: or in default of his compliance with such an order on his part, perhaps vesting orders may be made to effect the proper interest of the claimants in the land.”
In personam claims must be recognised causes of action: Garofano v Reliance Finance Corporation Pty Ltd (1992) NSW Conv R 59,659 at 59,662-59,663 and Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222- 3. The causes of action may be legal or equitable but the relief is equitable. Although the precise limits of in personam claims have not yet been determined, it would be plainly inconsistent with the Land Transfer Act to allow such a claim against a registered proprietor in all circumstances in which an owner's rights could be defeated under a deeds system. It is a question of fact and degree when a registered proprietor's behaviour will give rise to an equity of sufficient strength to support an in personam claim. …
Before a registered proprietor is susceptible to an in personam claim it must be shown that he or she has acted or is acting unconscionably in obtaining or taking advantage of the registered interest, but the registered proprietor's conduct need not have involved actual dishonesty towards the in personam claimant. An attempt by the registered proprietor to enforce an interest knowingly obtained by his or her unlawful behaviour may be found to be unconscionable.
[15] In order to analyse both arguments it is necessary to analyse the history of the Manukau City Centre development.
4 Duncan v McDonald [1997] 3 NZLR 669 (CA) at 683-4.
The history of the Manukau City Centre development
Early days
[16] The Manukau City Council was created following the amalgamation of the Manukau County Council and the Manurewa Borough Council in 1965. The land on which the Manukau City Centre came to be developed was acquired by those Councils between 1963 and 1966. At that stage it was bare farmland. The Council then engaged a firm of engineering consultants, Beca Carter Hollings & Ferner (Beca Carter), to provide it with advice regarding development of the site into a city centre to service the wider South Auckland region.
[17] In 1968, the Manukau City Council selected a consortium known as Fletcher- Mainline-Dillingham to undertake the planning of the city centre development. The consortium later became Fetcher-Mainline Ltd (Fletcher Mainline).
[18] In the latter part of 1971, Beca Carter provided the Council with a site development plan. At a special meeting held in September 1971 the Council adopted the plan in slightly modified form. It then formed Appendix H to the Code of Ordinances attached to the Council’s operative District Scheme.
[19] A diagram attached to the site development plan and known as Plan 6.4a showed in broad outline the shape and nature of the proposed development. It was to comprise three distinct components. The first, and largest, was an area to be developed as a shopping centre. The second comprised land on which the Manukau City Council was to build a civic administration building. The third comprised land that was to be used for the construction of office buildings.
[20] The shopping centre was to be surrounded by landscaped parking, as was an area of land in the middle of the office building development. The principal points of access to the office carpark were to be located on the southern boundary of the car park, which fronted Davies Avenue. A copy of Plan 6.4a is annexed to this judgment as Appendix 1.
[21] On 14 May 1973, Beca Carter provided Fletcher Mainline with a report that provided further details of the site development plan, taking into account changes that had occurred since 1971. The report annexed four plans labelled X/1 to X/4. X/4 showed the manner in which the land was to be subdivided into separate lots. In the office building development, some of these were to be freehold lots on which office
buildings were to be erected. Others, including the carpark in the middle of the office building development, were to be leasehold. A copy of the plan labelled X/4 is annexed to this judgment as Appendix 2.
[22] Subsequent iterations of Plan X/4 were produced as the development progressed. For ease of reference, a copy of an iteration known as X/4/2 is attached as Appendix 3. This shows the proposed subdivision of the office building development in larger relief. The office carpark comprises Lots 48, 49 and 25. The larger site comprises Lots 25 and 49, whilst the smaller site is on Lot 48. The land now owned by the four opposing respondents comprises Lot 10 (Analie Properties Ltd), Lot 11 (the Stockley Family Trust), Lot 45 (Cleethorpes Sixty Two Ltd) and part of Lot 57 (Parkview Commercial Limited). Lot 57 was divided into two new lots, of which the Parkview owns the southernmost (nearest Davies Avenue).
[23] Fletcher Mainline undertook the development in accordance with the provisions of a lease that it entered into with the Manukau City Council on 12 March 1974. The lease was to be for a term of 100 years from 1 April 1971 and thereafter with rights to renew the lease for terms of five years. It related to the whole of the
16.186 hectare parcel of land on which the development was to be undertaken. This comprised Lot 61 on Deposited Plan 68883 and was the land then described in Certificate of title 25A/494. The lease was registered against the title to the property on 8 November 1974.
[24] The lease permitted Fletcher Mainline to subdivide the whole (but not part) of the land into lots for the purposes designated in the development plan. It was then required to complete the construction of buildings on the land progressively and in conformity with the development plan. The construction work was to meet specified targets by 31 October 1976, 1981 and 1986.
[25] Fletcher Mainline was not permitted to assign its interest under the lease until it had completed its obligations under the lease. However, it was given options to purchase freehold lots for the purpose of on-sale to third parties on a progressive basis.
[26] Following execution of the lease, work began in earnest. Fletcher Mainline subdivided the existing parcel of land into separate lots that were generally in accordance with the diagram attached to the development plan. This resulted in Deposited Plan 69242, which forms the basis of the development of the Manukau City Centre.
Restrictive covenants
[27] From about 1976, Fletcher Mainline began acquiring title to freehold lots in the office building development and selling these to third parties. In some cases, the purchaser also engaged Fletcher Mainline to construct an office building on the site. Eventually twelve parties came to own freehold sections in the office building development.
[28] Fletcher Mainline wished to be able to recoup the future outgoings payable in relation to the carpark to be constructed for the office building development. To that end, Fletcher Mainline required the purchasers of freehold lots to agree to the insertion of a restrictive covenant in the memorandum of transfer. This required the purchaser and subsequent owners to reimburse Fletcher Mainline for a specified proportion of future outgoings payable in relation to the carparking areas. These included the ground rental payable to the Council under the lease, rates and maintenance.
[29] An example of such a covenant is to be found in the memorandum of transfer dated 9 August 1978, under which Fletcher Mainline transferred its interest in Lot 43 to the General Trust Board of the Diocese of Auckland. The recitals to the Memorandum included the following:
AND WHEREAS it is the Transferor’s intention that the commercial office building lots, being Lots 10, 11, 12, 23, 42, 43, 45, 46, 47, 55, 56 and 57 on the said Deposited Plan shall be subject to a general scheme applicable to and for the benefit of other owners or occupiers of commercial office building lots on the said Deposited Plan and that the owner or occupier for the time being of each of the said recited commercial office building lots should be bound by the stipulations and restrictions and have the benefit of the rights and privileges hereinafter set forth and that the respective owners and occupiers for the time being of any of the commercial office building lots on the said Deposited Plan be able to enforce the observance of such stipulations restrictions and rights by the owners or occupiers for the time being of any of the said recited commercial office building lots in equity or otherwise howsoever.
[30]The operative part of the memorandum then stated:
AND IN FURTHER PURSUANCE of the said agreement the Transferee for itself and its successors in title and so as to bind the above described lands and for the benefit of each and all of the other lots on the said Deposited Plan No. 69242 HEREBY COVENANTS AND AGREES with the Transferor and its successors in title for the benefit of each and all of such other lots on the said Deposited Plan not hereby transferred by the Transferor and also separately with each and every one of the registered proprietors and for the benefit of each and all of the other lots on the said Deposited Plan heretofore transferred to such registered proprietors that the Transferee will henceforth and at all
times hereafter observe and perform all the stipulations and restrictions contained in the Schedule hereto TO THE END AND INTENT that each of such stipulations and restrictions shall in the manner and to the extent prescribed forever enure for the benefit of and be appurtenant to each and all of the other lots on the said Deposited Plan and every part thereof
PROVIDED ALWAYS that the Transferee shall as regards the said stipulations and restrictions be liable only in respect of breaches thereof which shall occur whilst it shall be the registered proprietor of the above described land or any part thereof in respect of which such breach shall occur AND the Transferor HEREBY COVENANTS with the Transferee that it will obtain from each and every one of the Transferees to the extent and in the manner necessary of each and all of the other lots on the said Deposited Plan as aforesaid or any part or parts thereof the like covenants as are contained herein on the part of the Transferee.
[31]The Schedule then recorded:
(ii)That the Transferee shall hereafter contribute to the annual rates ground rentals to Manukau City Council or its successor in title land tax or any other governmental municipal or statutory charges including any service charges and costs (annual and otherwise) of maintenance in all things including reformation if necessary of all roadways, access ways and to all service facilities and installations arising in respect of Lots 9, 24, 35, 36, 54 and 25, 26, 48, 49, 51, 70, 50 and 71 on Deposited Plan No. 69242 (hereinafter in this clause called “Total Costs”) in accordance with the table hereinafter in this clause (ii) of this Schedule set out on the basis that each and every one of the registered proprietors of each of the commercial office building lots as hereinbefore defined shall likewise contribute their respective proportion of such costs
Lot No. 10 Deposited Plan 69242 - 7.85% of Total Costs Lot No. 11
Deposited Plan 69242 –
7.85% of Total Costs
Lot No. 11
Deposited Plan 69242 –
9.34% of Total Costs
Lot No. 23
Deposited Plan 69242 –
12.62% of Total Costs
Lot No. 42
Deposited Plan 69242 –
6.72% of Total Costs
Lot No. 43
Deposited Plan 69242 –
2.52% of Total Costs
Lot No. 45
Deposited Plan 69242 –
8.40% of Total Costs
Lot No. 46
Deposited Plan 69242 –
6.46% of Total Costs
Lot No. 47
Deposited Plan 69242 –
7.30% of Total Costs
Lot No. 55
Deposited Plan 69242 –
5.62% of Total Costs
Lot No. 56
Deposited Plan 69242 –
13.54% of Total Costs
Lot No. 57
Deposited Plan 69242 –
11.78% of Total Costs
[32] All twelve lots in the office building development that Fletcher Mainline sold to third parties have the same, or a similar, restrictive covenant registered against the title.
[33] In addition, Fletcher Mainline entered into agreements for sale and purchase that contained similar, albeit slightly different, covenants. By way of example, it originally sold Lot 45, the property now owned by Cleethorpes Sixty Two Ltd, to the Australian Mutual Provident Society (AMP) in 1981. Cleethorpes has discovered an unsigned copy of an agreement for the sale and purchase relating to the original purchase of the property by AMP. This was attached to the agreement under which Cleethorpes purchased the property from AMP in 1989.
[34] The unsigned agreement between Fletcher Mainline and AMP contains a provision under which AMP agreed to reimburse Fletcher Mainline for a fixed proportion of the capital costs Fletcher Mainline incurred in undertaking aspects of the office building development. The agreement also contained the following provision:
21. THE Society acknowledges it is aware that Fletcher-Mainline intends, as Fletcher-Mainline hereby covenants and agrees pursuant to the terms of its agreement and obligations to the Manukau City Council under the Development Agreement in respect of the Manukau City Centre, it will generally develop form and construct upon those Lots within the Office Park (such Office Park being more particularly shown as the lands within the blue perimeter line on Plan X/4/2 annexed hereto) to remain as Lots held by Fletcher-Mainline on a leasehold basis, roadways, accessways parking areas for the benefit of owners, customers and invitees using the Office Park and Manukau City Centre generally. Fletcher-Mainline covenants and agrees that such development works shall be completed no later than 31st October, 1986. The leasehold Lots hereinafter referred to are shown on Deposited Plan number 69242 as Lots numbers 25, 26, 48, 49, 50, 51, 70 and 71. The Society further acknowledges (subject as hereinafter appears) that it will as and when called upon in writing by Fletcher-Mainline take and accept from Fletcher- Mainline the sole title to an undivided 8.4% share of the whole of such leasehold lots as aforesaid. Such transfer shall be made by Fletcher-Mainline to the Society in consideration of the Society fulfilling its obligations to Fletcher-Mainline hereunder pursuant to the provisions of Clause 4 hereof and at no further capital cots to the Society save that the Society shall be liable for any stamp duty and registration fees payable on such transfer of leasehold title. It is acknowledged by the Society and Fletcher-Mainline requiring the Society to take title as provided in this clause such leasehold Lots shall be formed as roads, parking areas, accessways or general open space pursuant to the provisions of Fletcher-Mainline’s agreement with the Manukau City Council. Notwithstanding any other provision of this clause it is acknowledged that Fletcher-Mainline is responsible in all things for securing at Fletcher- Mainline’s cost the consent of the City Council to the transfer by Fletcher- Mainline to the Society of such share and interest in the said leasehold lots
PROVIDED HOWEVER and the Society hereby acknowledges that if as a condition of its consent the City Council shall require the Society to join with
and associate together with other owners of freehold land within the Office Park so that the leasehold title as aforesaid shall be held by one company or other incorporated body on behalf of all such freehold owners in the Society shall not unreasonably refuse to do so.
(Emphasis added)
[35] Similar provisions are to be found in an agreement dated 24 January 1984, under which Fletcher Mainline agreed to sell Lot 10 to Bexley Developments Ltd, and an agreement dated 9 November 1990, under which Fletcher Mainline agreed to sell Lot 11 to the New Zealand Insurance Life Limited. The former was subsequently superseded by a deed dated 27 June 1986 after the Colonial Mutual Life Assurance Society Ltd (Colonial Mutual) agreed to buy Lot 10. Under this deed Fletcher Mainline, Bexley Developments Ltd and Colonial Mutual agreed that the obligations contained in Clause 21 would be transferred to Colonial Mutual. By the time the first of these agreements was signed in 1984, Fletcher Mainline only held a leasehold interest in the two office carparks: Lots 25, 48 and 49. It had surrendered the lease of the remaining lots back to the Manukau City Council.
[36] Notwithstanding the obligations imposed on the building owners by these covenants, there is no documentary record of the building owners receiving any contractual right to use the office carparks, either exclusively or together with members of the public. It is clear, however, that they began to use them for carparking purposes as soon as they were constructed. Members of the public were also able to use the carparks until 1996. Lot 48 had not been designated as an office carpark in the original plans, but it nevertheless came to be used as such on the same basis as Lots 25 and 49. The evidence does not disclose when this began happening.
Correspondence relied upon by the opposing respondents
[37] The opposing respondents rely on other evidence in support of their claims. In particular, they rely upon statements made by the City Manager in a letter dated 5 July 1984 to Fletcher Mainline’s agent, Challenge Properties Ltd. The letter sought Fletcher Mainline’s consent to a proposal by the Council to transfer part of Lot 58, which had never been subject to the lease, to a third party for commercial development. On this topic the City Manager stated:
The purchaser of this new Lot is also to have a liability to enter into the existing lease agreement with the other Office Park owners to the extent that the owner of part Lot 58 will have a 6.9% obligation relating to communal car parks, accessways, and payment of levies for the maintenance of such assets. The purchaser will not be obliged to contribute to the initial
construction costs of the car parks, streets, or landscaping, as these costs are deemed to have been included in the transfer to Council of Lot 42.
(Emphasis added)
[38] The proposal relating to Lot 58 did not proceed and this meant Fletcher Mainline continued to be responsible for the 6.9 percent contribution to operating expenses, for which the new owner of part of Lot 58 would have assumed responsibility. The opposing respondents say the italicised portions of the letter dated 5 July 1984 make it clear that the City Manager was under the impression that those parties who were contributing to the outgoings of the car park areas held a leasehold interest in those areas.
[39] Issues relating to the use of Lot 58 arose again in 1990. On this occasion, the focus was on the need for further car parking in and around the office building development. On 3 April 1990 the Director of Property Management for Manukau City advanced the following proposal in a letter to Fletcher Mainline’s solicitors:
An opportunity exists to develop this carparking [Lot 48] in association with Council’s development of Lot 58 at a potentially reduced cost. This could only be satisfactorily achieved if Council could utilise Lot 48 in conjunction with the development. I note that the Development Manager for Challenge Properties (Mr R Demler) in submissions to Council relating to the Proposed Reviewed District Scheme on 21/3/90 noted that Council has a number of options worthy of consideration including that the small leasehold block (Lot
48) presently used for grade parking could be incorporated into Lot 58 making for a larger more developable block.
The Council proposes that consideration be given to the following:
a.The leasehold on Lot 48 be relinquished by Challenge Properties which would relieve it of its rental commitment on that carparking area. Lot 48 would come out of both the area leased and the designated area in the proposed office park lease.
b.The 6.9% contribution referred to in (2) above be redistributed amongst the freehold titles in the office park to cover rent and outgoings in respect of the reduced area in the office park lease.
c.Council in return undertakes to retain the carparking provided already on Lot 48 until it is able to provide additional carparking over and above that already provided for the office park as well as meeting the requirements of additional carparking generated by any new commercial development.
d.Council manage all carparking in and around the office area but the cost of maintenance of the reduced leased area and other outgoings under the lease remain with the Lessee.
(Emphasis added)
[40] The opposing respondents say the italicised portion of this letter provides further confirmation that the Manukau City Council regarded Lot 48 as being earmarked or reserved for use as a car park. It is common ground, however, that at this stage both car parks were still being used by members of the public as well as the owners and occupiers of the office building development.
[41] The opposing respondents rely in a similar way on a letter sent by the Council’s Portfolio Manager for Corporate Buildings to Challenge Properties’ Property Manager on 31 May 1994. In that letter, the Council expressed concern about the manner in which the larger car park was being used. Vehicles were parking in non-designated spaces, including areas designated for disabled persons’ parking as well as on yellow lines, corners, footpaths and planted areas. The Council proposed to address this issue by issuing parking infringement notices to vehicles parked in these areas. The letter concluded by asking Challenge Properties to “survey the other office park building owners” and let the Council know whether “by our combined efforts we can have orderly parking with road and emergency access kept open and disabled parking left for those entitled to use it”. The opposing respondents say this supports their submission that the Council accepted they had an interest in the car parking areas.
[42] Issues also arose in early 1996 when building owners became frustrated at Council employees using the office carpark, after the Council began regulating the use of its own carpark. This prompted building owners to mark their names on carpark spaces in an effort to dissuade others from parking in them.
[43] The opposing respondents also point to a letter dated 2 April 1996 from Challenge Properties to Parkview Tower Properties Ltd, the owner of a building in the office development. This raised a concern that lessees in Parkview’s building had been designating carpark spaces for their own exclusive use and had apparently arranged for vehicles to be towed away when they found them parked in those spaces. The letter went on to say:
Would you please urgently advise your tenants that because of your undivided share in the carpark they have no such rights and run the risk of claims for damages from other parties.
If one of your lessees has either placed signage or painted their name on the carpark surface warning of tow-away, then they must remove such markings immediately and make good any damage.
We will shortly be inspecting the property and will arrange the removal of any signage at your cost if the person is one of your lessees.
A number of attempts have been made in the past to obtain the consent of the owners to have designated spaces, but these have all failed. We are not prepared to carry out this exercise again, but if an interested party wished to canvas the other owners and obtained a consensus then all well and good.
The opposing respondents contend the reference in this letter to the building owner’s “undivided share” in the car park confirms that the Council has always viewed the building owners as holding an interest in the car parks.
[44] Allocation of parking spaces to building owners in proportion to their respective contributions to outgoings appears to have occurred later in 1996. On 7 August 1996, Challenge Properties wrote to building owners advising them that “the overwhelming request” it had received from building owners was for an allocation to be made of fixed blocks of car park spaces to individual building owners. The letter attached a schedule and plan setting out the proposed allocation to the owners. The schedule was as follows:
MANUKAU OFFICE PARK ALLOCATION
TOTAL CARPARK
SHARE OF SPACES PLAN TOTAL 458 CODE FLETCHER MAINLINE
6.72%
31
1
SCHOFIELD PROPERTIES 7.58% 36 2 MFL MUTUAL FUND 6.46% 30 3 ANGLICAN CHURCH 2.52% 11 4 SENTRY INVESTMENTS 7.85% 36 5 PARKVIEW TOWER PRO 5.08% 23 6 STAGS LEAP LTD 7.41% 34 7 HITCHCOCK HOLDINGS 7.40% 38 8 PARKVIEW HOLDINGS 10.83% 50 9 MANUKAU CITY COUNC 7.30% 33 10 FIX STAR HOLDINGS 13.54% 62 11 TWIN TOWERS PROPERTIES 6.70% 31 12 HOWICK SECURITIES 9.34% 43 100% 458
[45] The letter went on to say that building owners were free to allocate their allocated spaces to their tenants or other persons as they saw fit. Challenge Properties said it would erect signage at the entrances to the car park to advise members of the public that the car park was a tow away zone. Building owners were to post similar signage on the spaces allocated to them. If building owners agreed, Challenge Properties proposed to implement the scheme on 1 October 1996. However, it also reserved the right to discard the plan on two months notice.
Transfer and surrender of the lease
[46] The transfer of the lease from Fletcher Mainline to Manukau City Centre Ltd occurred in 2001. In a letter dated 27 August 2001, Fletcher Mainline (through its agent Fletcher Property) advised building owners that the Manukau City Council had consented to the transfer of the management of the office carpark to Manukau City Centre Ltd, the owner of the Manukau Shopping Centre. It said that this was “a practical management arrangement” given that the shopping centre management already administered 86 per cent of the carparks leased from the Council and had a team onsite to oversee issues such as lighting and garden maintenance.
[47] The subsequent surrender of the lease of the office carparks was recorded in an Agreement to Vary Lease signed by Manukau City Centre Ltd (the owner of the Westfield shopping mall) and the Manukau City Council on 31 October 2005. This occurred at a time when Manukau City Centre Ltd wished to build a cinema complex, additional shops and structured car parking on land that the lease did not permit it to build on. The surrender of the office carparks occurred as an adjunct to the Council consenting to the new development proposed by Manukau City Centre Ltd.
[48] The agreement recorded that Manukau City Centre Ltd agreed to surrender and assign to the Council “all the Lessee’s Interest in the Office Park Carpark leased under the Lease, so that the interest merges in the Lessor’s interest in the Office Park Carpark and is extinguished for the date of this document”. The agreement defined the Office Park Carpark as being Lots 25, 48 and 49 on Deposited Plan 69242. There was no mention in the agreement of the arrangement then in place between Manukau City Centre Ltd and the building owners relating to the management of the car parking spaces.
[49] On 26 October 2005, Manukau City Centre Ltd wrote to building owners under Westfield letterhead advising that Westfield had recently agreed to surrender the lease of the office carparks. It advised building owners they should deal with the Manukau City Council as from 1 November 2005 regarding future arrangements for the carparks.
[50] On 17 November 2005, the Manukau City Council wrote to building owners to advise them that Manukau City Centre Ltd had agreed to surrender the lease of the carparks. The letter went on to say:
…
With effect from 1 December 2005 Council will allow you to continue to use your car parks under a licence at the same fee which you have been paying to Manukau City Centre Limited. Council may need to review the fee in future. The licence is to be determinable on one month’s notice from either party.
Council envisages that a more formal licence will be proposed in the near future.
Meantime please confirm you[r] acceptance of these interim arrangements by signing the copy of this letter.
…
[51] Analie Properties Ltd, the owner of Lot 10, responded on 29 November 2005 saying that the right to use the car parks “may be entrenched in the title” to its property. However, the letter went on to say that Analie was in any event enthusiastic at the prospect of working with the Council “to achieve a long-term outcome to provide appropriate parking facilities for the occupants of its building”.
[52] In December 2005 Parkview asked the Council whether it could obtain a fixed term lease of the carparks it was then using. In a letter dated 14 December 2005, the Council responded that it “was not currently in a position to offer car parking on the terms you requested”. It said that work was currently underway to resolve issues surrounding the future development of the city centre and car parking would be a critical component.
[53] Matters then appear to have advanced no further until 4 August 2011, when Auckland Transport wrote to building owners advising that it had assumed responsibility “for certain leased carparks within the new Auckland Council’s district”. This followed the vesting of assets formerly owned by Manukau City Council in the new Auckland Council on 20 May 2011. The letter noted that payments for “your leased carpark” were currently being made to an account in the name of the Manukau City Council and this account would soon cease to exist. The letter contained bank account details for future payments. The letter also referred to copies of old invoices which showed that the building owners leased a specified number of spaces in the carpark. It asked them to indicate on an enclosed map the spaces that they leased. This would enable Auckland Transport to erect signage “so the correct licence holders are parking in the right space”.
[54] On 20 August 2012, Auckland Transport advised the building owners that it had obtained a current market valuation for carpark licence rental rates and that licence fees would increase as from 1 October 2012.
[55] On 25 August 2015, Auckland Transport wrote to Analie advising that it had been unable to locate any licence agreement relating to the car parks it was using. The letter pointed out that if there was no such agreement, or the agreement had expired, it would be necessary to enter into a new agreement.
Analysis
[56] The events that occurred during the early days of the Manukau City Centre development do not assist the opposing respondents. At that time, the Manukau City Council was endeavouring to make decisions about the proposed development in very broad terms. It was not dealing with third parties other than its own advisers and the nominated developer. Although the large office carpark was depicted from the outset in the plans produced by Beca Carter, there was no suggestion that any person other than the developer was to have any interest in that area. The fact that some of those plans described the large carpark as “Leasehold Parking” is no more than an acknowledgement that the developer was to lease the office carpark land from the Council.
[57] The opposing respondents rely largely upon events that occurred when Fletcher Mainline sold freehold lots in the office development subject to restrictive covenants. Those covenants required the owners of those lots to pay the outgoings on, and in some cases the cost of constructing, the carpark area. It is noteworthy, however, that none of the contemporaneous evidence gave the building owners and their successors in title any rights in relation to the office carpark land. It would have been a simple matter for the right to use that land for carparking purposes to have been recorded in some way. This could have been done, for example, by means of a restrictive covenant registered against the titles to the office carpark land. Instead, the building owners assumed payment obligations that also bound subsequent owners when they knew, or ought to have known, that the arrangement did not give them any contractual right to use the office carpark in return.
[58] A stronger argument can be advanced by building owners whose predecessors in title signed a deed of covenant with Fletcher Mainline, in which they agreed to accept a proportionate share in the leasehold title held by Fletcher Mainline when required to do so.5 Mr Brant endeavoured to argue, on behalf of the opposing respondents, that assumption of this obligation gave those building owners an immediate interest in the leasehold title to the office carpark land. I do not accept this
5 The clause is set out at [34].
submission. I accept Mr Thain’s submission for the Council that this arrangement constituted a “put” option that enabled Fletcher Mainline to require the building owners to accept a transfer of its leasehold interest in the carpark land. However, it did not give the building owners any right to require Fletcher Mainline to offer that interest to them. Again, they assumed an obligation without acquiring a corresponding right in return.
[59] Perhaps the strongest argument for this group of building owners arises out of the fact that, on one reading, the same provision also contained a covenant by Fletcher Mainline that it would hold the carpark land in leasehold “for the benefit of” those using buildings in the office development. However, several factors weaken this argument.
[60] The first is that, even if Fletcher Mainline breached the covenants by surrendering the lease in 2005, this did not give the building owners an interest in the freehold of the land.
[61] Secondly, there is no evidence that Fletcher Mainline entered into similar deeds of covenant with all parties to whom it sold freehold sections in the office development. The evidence also fails to explain why it chose to do so in the case of Lots 10, 45 and 57. None of the deeds of covenant that apply to those lots purports to affect or apply to other lots in the office development. It follows that only those respondents whose predecessors in title signed such deeds could seek redress for any breach by Fletcher Mainline of its obligations under them. However, none of the deeds stated that the benefit of the covenant was to extend to successors in title. Nor did the covenants run with the land, because the deeds were not registered against the titles to the properties to which they related. It follows that the current respondents have no ability to claim for any breach of the covenant that may have occurred when Fletcher Mainline surrendered the lease.
[62] The restrictive covenants therefore do not assist the opposing respondents to establish that they hold any interest in the carpark land.
[63] I do not place any weight on statements made in correspondence by persons who became involved over the years in issues relating to the use of the office carparks, either as representatives of Fletcher Mainline or the Councils. They were made by lay persons who were endeavouring to respond to practical issues that arose relating to the use of the carparks. The makers of these statements are unlikely to have given thought
to the legal effect of the terms they were using. In any event, such statements could not give the respondents an equitable interest in the carpark land when it did not exist beforehand. The correspondence as a whole simply demonstrates that the Council and Fletcher Mainline knew the building owners were using the office carparks and were meeting the outgoings on them. For that reason, they needed to be consulted when issues arose in relation to the use of the carparks.
[64] Similarly, I do not consider that the circumstances surrounding the surrender of the lease of the carpark in 2005 assist the opposing respondents. To the extent that these are discernible from the evidence, they focussed on the desire by Manukau City Centre Ltd to gain access to further land for development purposes, rather than the use of the office carpark land.
Decision
[65] Against that background, I conclude that none of the dealings between the original office building owners and either Fletcher Mainline or the Council gave the respondents any equitable interest in the office carpark land. The only remaining issue, and it is one that overlaps considerably with the matters I have already discussed, is whether the Council’s past conduct means it would now be unconscionable for it to deal with the carpark land in a manner inconsistent with the rights of the building owners.
[66] The starting point is that the building owners dealt from the outset with Fletcher Mainline and not the Manukau City Council. Any actions taken by Fletcher Mainline in relation to the building owners and the carpark can only be held against the Council if it was aware of those actions, and either consented to them or took no action to stop them.
[67] The Manukau City Council was plainly aware of the restrictive covenants contained in the memoranda of transfer by which the building owners obtained freehold title to their land. However, the covenants did no more than require the purchasers to meet a proportionate share of the outgoings payable on the office carpark areas. They therefore enabled Fletcher Mainline to recover the rental and rates it was paying to the Council for those areas as well as the cost of maintaining them. The Council would not have had cause for concern about this, given the fact that the building owners and their invitees had begun using the office carparks from an early stage, even though they had no contractual right to do so. The carparks were of obvious benefit to the office building owners given the proximity of the office carparks
to their buildings. Nothing in the restrictive covenants would have suggested to the Council that the building owners were making payments under the covenants in the belief or expectation that they were thereby obtaining an interest in the land on which the office carparks were situated.
[68] Given that the deeds of covenant were never registered, it is difficult to know whether the Council would have known of their existence. Even if it had, however, I do not consider they create an issue for the Council in the present context. The three purchasers that signed the deeds were large and presumably sophisticated commercial entities. Each must have thought it was commercially worthwhile to assume the obligations imposed by the deeds. Furthermore, nothing in the deeds created any expectation for the purchaser that it was acquiring more than the freehold lot that it was purchasing. There was a prospect that Fletcher Mainline would require the purchaser to accept a proportionate share of the leasehold title to the carparks, but this was no certainty. Furthermore, any such transfer would have required the consent of the Council as the owner of the land.
[69] This Court has recently observed that an in personam claim must not conflict with or undermine the concept of indefeasibility of title. Rather, it is confined to cases “that truly engage the conscience of the party whose registered priority is challenged.”6 I see nothing in the Council’s past conduct towards any of the original office building owners to suggest it gave them cause to believe they had any interest in the office carpark land. Furthermore, as current owners of buildings in the office development, the opposing respondents have not been able to point to any action by either the Manukau City Council or the Auckland Council that may have caused them to believe they held an interest in the office carpark land. Nor do they contend they acquired their own land in that belief.
[70] The evidence is in fact to the contrary. As I have already recorded,7 the Manukau City Council told building owners they were using the office carparks as licensees very shortly after Manukau City Centre Ltd surrendered the lease of the office carparks in October 2005. Analie responded by suggesting that the right to use the carpark “may be entrenched” in its title but took matters no further than that. The following month, Parkview enquired as to whether it could obtain a fixed term lease of its carpark spaces, but the Council declined that request. None of the other
6 JEB Management Ltd v Grubz United Whenua Trust [2015] NZHC 157 at [40].
7 At [50].
respondents has ever sought to advance a claim to an interest in the office carparks until the present proceeding.
[71] I am therefore satisfied that neither the Manukau City Council nor the Auckland Council has conducted its affairs in such a way that would now make it unconscionable for Auckland Council, as current owner of the carpark land, to deny that the current owners of buildings in the office development have any interest in that land.
[72] It became evident during the hearing that the opposing respondents’ real concern arises out of the fact that the Council views the present use of the office carpark land as an inefficient use of land zoned for mixed use in an urban setting. In the medium term, it will therefore seek to develop the carpark land to enable it to be more effectively and efficiently utilised. The most likely form of any such development is the erection of a mixed use building on Lot 49, the larger carpark site. This would contain office and/or residential accommodation, as well as shops on the ground floor. If this should occur, the building owners who currently use the large carpark will need to find an alternative venue. This may present a significant practical problem because there are currently limited parking options available in the area.
[73] The largest area available for both casual and reserved parking is the Ronwood Avenue parking building, which the Council built approximately ten years ago on Lot 58 of the Manukau City Centre development. Lot 58 was retained by the Council and did not form part of the lease to Fletcher Mainline. The Ronwood Avenue carpark currently has approximately 400 spaces available for use as casual car parking. The remaining spaces are leased on monthly tenancies. If the vehicles that currently park in the large office carpark were to relocate to the Ronwood Avenue carpark, they would completely extinguish that building’s capacity to provide casual parking. I therefore accept that the building owners will face significant issues if the Council develops the carpark land as it currently intends to do.
[74] However, this does not mean it would be unconscionable for the Council to use the carpark land as it sees fit. The building owners have never had any contractual right to use that land. The fact that they initially paid the outgoings on it, and more recently have paid a market rental for use of it, does not change this fact. In legal terms, the current building owners have never had more than a licence to use the land for carparking purposes, even though they may have believed they held a greater
interest than that. Any such belief has been fostered by their own view of events rather than as a result of anything the Council and Fletcher Mainline may have done.
[75] This means the opposing respondents have failed to establish that they have any interest in the carpark land.
Result
[76] I make a declaration that the respondents have no legal or equitable interest in Lot 25 on Deposited Plan 69242 and Lots 48 and 49 on Deposited Plan 111652.
[77] I make an order under s 142 of the LTA removing caveats 11691920.1, 11686493.1, 11691951.1 and 11691866.1.
PART TWO: The Covenant Proceeding
[78] This proceeding raises two issues. The first is whether the Court should make an order under s 317(1) of the PLA removing restrictive covenants that are currently registered against the titles to three parcels of land that the Auckland Council owns in the Manukau City Centre development. The covenants prohibit the owner of the land from using it or permitting it to be used for any retail or wholesale shopping purposes. The second issue is whether the Court should make a declaration that the restrictive covenants do not in any event prohibit the Council from selling food and beverages for immediate consumption on its land and do not prohibit the provision of associated goods and services.
A. The application to extinguish the restrictive covenants
[79] The restrictive covenants are registered against two sections that originally comprised Lot 47 on Deposited Plan 69242 and a section that now comprises part of the road named Putney Way. The sections that were originally Lot 47 comprise an area of land that forms part of the plaza referred to earlier and known as Manukau Court, and land on which an office building has been constructed. This is currently occupied by the Council and known as Kotuku House.
[80] The restrictive covenant has no practical effect on the land that forms part of Putney Way because, for obvious reasons, that land will never be able to be used for the purposes of retail or wholesale shopping. It may have some effect on the land that now forms part of the plaza, but could only be used for shopping activities provided
by “pop up” or temporary shopping facilities on that area. The covenant has the greatest effect on the land on which Kotuku House is situated. Kotuku House has a ground floor street frontage that is approximately 30 metres in width. Although it is not currently suitable for retail, it could be converted to that use relatively easily.
[81] If the application to extinguish the covenants is granted, the Council has no immediate plans to convert the ground floor of Kotuku House into shops. However, the Council may wish to sell the land in the future, and it is conscious that a purchaser of the land may wish to do so.
[82] As the intituling of the covenant demonstrates, numerous parcels of land within the Manukau City Centre development enjoy the benefit of the restrictive covenants. All have been served with the present proceeding, but only the four respondents who opposed the caveat proceeding oppose the application to extinguish the restrictive covenants. They advance their opposition on the basis that the Council has not established any of grounds that justify an order for extinguishment under s 317 of the PLA. They also contend it would be premature for the Court to grant the application because the Council still needs to resolve existing parking issues that relate to the office building development. They therefore contend the Court should exercise its discretion not to make the orders sought by the Council.
Relevant principles
[83]Sections 316 and 317 of the PLA provide as follows:
316Application for order under section 317
(1)A person bound by an easement, a positive covenant, or a restrictive covenant (including a covenant expressed or implied in an easement) may make an application to a court for an order under section 317 modifying or extinguishing that easement or covenant.
(2)That application may be made in a proceeding brought by that person for the purpose, or in a proceeding brought by any person in relation to, or in relation to land burdened by, that easement or covenant.
(3)That application must be served on the territorial authority in accordance with the relevant rules of court, unless the court directs otherwise on an application for the purpose, and must be served on any other persons, and in any manner, the court directs on an application for the purpose.
317Court may modify or extinguish easement or covenant
(1)On an application (made and served in accordance with section 316) for an order under this section, a court may, by order, modify or extinguish (wholly or in part) the easement or covenant to which the application relates (the easement or covenant) if satisfied that—
(a) the easement or covenant ought to be modified or extinguished (wholly or in part) because of a change since its creation in all or any of the following:
(i)the nature or extent of the use being made of the benefited land, the burdened land, or both:
(ii)the character of the neighbourhood:
(iii)any other circumstance the court considers relevant; or
(b) the continuation in force of the easement or covenant in its existing form would impede the reasonable use of the burdened land in a different way, or to a different extent, from that which could reasonably have been foreseen by the original parties to the easement or covenant at the time of its creation; or
(c) every person entitled who is of full age and capacity—
(i)has agreed that the easement or covenant should be modified or extinguished (wholly or in part); or
(ii)may reasonably be considered, by his or her or its acts or omissions, to have abandoned, or waived the right to, the easement or covenant, wholly or in part; or
(d) the proposed modification or extinguishment will not substantially injure any person [entitled; or]
(e) in the case of a covenant, the covenant is contrary to public policy or to any enactment or rule of law; or
(f) in the case of a covenant, for any other reason it is just and equitable to modify or extinguish the covenant, wholly or partly.
(2)An order under this section modifying or extinguishing the easement or covenant may require any person who made an application for the order to pay to any person specified in the order reasonable compensation as determined by the court.
[84] The leading authority regarding the approach to be taken in determining an application for orders under ss 316 and 317 is the judgment of the Supreme Court in Synlait Milk Ltd v New Zealand Industrial Park Ltd.8 In that case, the court observed that the cases demonstrate that s 317 requires a two-stage approach.9 The Court must
8 Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157, [2020] 1 NZLR 657.
9 At [67] and [90].
first determine whether jurisdiction exists under s 317(1) to make the order sought. This requires the Court to determine whether one or more of the grounds under that subsection have been established. If so, the Court must go on to consider whether to exercise its discretion to extinguish the covenant in question. The exercise of the discretion requires the Court to consider all relevant factors (including the power to award compensation).10
[85] The Court also observed that the importance of contractual and property rights is not to be underestimated. Such rights may be significant where the original parties to the covenant are also the parties to the application. However, they must be considered as part of the factual context before the court, rather than as generic fetters on the court’s discretion. Each case must therefore be considered on its own merits.11
Jurisdiction under s 317(1)
[86]The Council relies upon the grounds contained in s 317(1)(a), (b), (d) and (f).
Section 317(1)(a)
[87] The Council says the neighbourhood around the land subject to the restricted covenants has changed markedly in character since the covenants were registered between 1976 and 1981. At that time, the area was in the early stages of development from bare farmland into what is now the Manukau City Centre development.
[88] The Council also points out that, whereas the original site development plan made no provision for residential accommodation, there are now three multi-storey residential apartment buildings in the neighbourhood. One of these, known as the MCentral apartment complex, is situated in the office building development.
[89] The Council contends that, in light of these significant changes, the continued prohibition on the use of the Council’s land for activities such as food stalls and shops is also inconsistent with the “Transform Manukau” plan the Council is promoting for
10 At [90].
11 At [88].
the area. This aims to transform and rejuvenate the Manukau City Centre development.
[90] I acknowledge that, in strict terms, there has plainly been a significant change in the nature and extent of the use being made of both the benefited land and the burdened land. Rather than bare farmland as was the case between 1976 and 1981, the neighbourhood now comprises the extensive shopping area comprising the Westfield shopping mall, the office building development and the Council’s civic administration centre.
[91] In broad terms, however, the character of the neighbourhood remains largely consistent with that proposed in the original site development plan. This anticipated the establishment of a shopping precinct, an office building development and the civic administration precinct. Each was to be a distinct and separate area and that is what has transpired. The shopping precinct is now larger than was originally envisaged but I do not consider anything turns on that fact. The establishment of residential apartment buildings obviously represents a departure from the original site development plan. However, they form a relatively small part of the overall development.
[92] Taking these factors into account, I do not consider ss 317(1)(a)(i) and (ii) provide the Court with jurisdiction to extinguish the covenants. However, I consider the position to be different in relation to s 317(1)(a)(iii), which permits the Court to extinguish a restrictive covenant where there has been a change in any other circumstances the Court considers to be relevant. The issues that arise under this head largely reflect the factors to be considered at the second stage when the Court exercises its discretion. I will therefore discuss s 317(1)(a)(iii) at that point.
Section 317 (1)(b)
[93] Section 317(1)(b) requires the Court to find that continuation of a restrictive covenant “would impede the reasonable use of the burdened land in a different way, or to a different extent, from that which could reasonably have been foreseen” at the time the covenant was created. In Synlait, the Supreme Court observed that there is
nothing in the PLA to suggest that what constitutes reasonable use of land is static.12 Where the reasonable use of land changes, that fact may become relevant to the nature and extent of the impediment.
[94] The Council contends this factor is engaged because the zoning of land in the Manukau City Centre development has now changed to allow mixed use activities. In Synlait, the Supreme Court held that a change in zoning could be relevant when considering whether the nature and extent of the impediment has changed.13 The Council also points out that at the time the covenants were registered, it was not particularly common for shops to be located on the ground floor of office buildings. That practice has only become the common in the last twenty years.
[95] I accept it is now a reasonable use of land for retail shops to be located on the ground floor of office buildings, where zoning permits. I do not consider, however, that there is sufficient evidence to enable me to conclude that this was not the case when the covenants were created. The prohibition on shopping in the office development is unlikely to have been imposed on the basis that such activity was not a recognised or common use at that time. It is more likely to have reflected the Council’s desire to ensure wholesale and retail shopping activity was restricted to the area designated for that purpose. Furthermore, there is insufficient evidence to permit me to conclude that any such change in use was not foreseeable when the covenants were created. I therefore do not accept that jurisdiction exists to extinguish them under s 317(1)(b).
Section 317 (1)(d)
[96] Section 317(1)(d) permits the Court to extinguish a restrictive covenant where such an order will not substantially injure any other “person entitled”. Section 4 of the PLA defines a “person entitled” as an owner or occupier of land who is entitled to enforce the covenant. Section 4 also provides that an “occupier” includes a person who occupies the property under a lease for a term of not less than ten years.
12 Synlait Milk Ltd v NZ Industrial Park Ltd, above n 8, at [161].
13 At [163].
[97]The PLA does not define what constitutes substantial injury in this context. In
Synlait, the Supreme Court observed:
[103] The inquiry under s 317(1)(d) focuses on whether the extinguishment or modification of the covenant will “substantially injure” the owner or owners of the benefited land. The Court must be satisfied that it will not do so. …
[104] Section 317(1)(d) contemplates that the benefited owner may be injured by removal of the covenant so long as that injury is not substantial. It was common ground that for the injury to be “substantial”, it must be “real, considerable, significant, as against insignificant, unreal or trifling”. Australian cases express this in slightly different language, but the substance is the same: the injury must be real and have present substance, rather than merely being theoretical or fanciful.
[105] The injury may be of an economic kind (for example, a reduction in the value of the benefited land), physical kind (for example, being subjected to noise or traffic), or intangible kind (such as impairment of a view, intrusion upon privacy, unsightliness or an altercation to the character or ambience of the neighbourhood).
[106] Assessment of substantial injury requires the court to compare the position of the owner of the benefited land with the covenant in place with the position if the covenant is modified or extinguished. …
(footnotes omitted)
[98] The Council contends extinguishment of the covenants will not substantially injure any other person. It points to the fact that the owner of the Westfield mall supports the application, even though its tenants are likely to be the persons most affected by any extension of shopping activity to areas outside the Westfield mall.
[99] The opposing respondents take a different view. They contend that any use of the Council’s land for retail or wholesale shopping activities is likely to result in an increased number of vehicles travelling to the area. They say the building owners who use the office carparks are already concerned at the extent to which unauthorised vehicles are using those carparks. They believe this is occurring because there is a shortage of casual parking facilities in the area, and that any increase in shopping facilities in the neighbourhood is likely to significantly aggravate the problem.
[100] The opposing respondents contend this will result in buildings in the office development being viewed by prospective tenants as being less desirable. They also say that retail activities in the vicinity of the office development will find it difficult
to survive, and that the failure of such businesses will further detract from the desirability of the area to future tenants. The opposing respondents therefore contend that they (and the other owners and occupiers of buildings in the office building development) will suffer substantial injury if the restrictive covenants are extinguished.
[101] A considerable portion of the cross-examination of witnesses for both parties focussed on the issue of whether the Ronwood Avenue carparking building still has capacity to provide parking for casual visitors to the area. I have concluded, however, that the evidence in the present case falls well short of enabling the Court to reach any firm conclusion on this issue. By way of example, much of the data produced by the Council is of limited value because it depends on surveys conducted over a limited period of time. A much more detailed analysis would be necessary before the Court could confidently make any assessment as to whether the Ronwood Avenue carpark has the capacity to provide carparking for any increase in visitors to the area.
[102] I consider this issue to be of little relevance in any event. It would only assume significance if there was a realistic prospect that the establishment of shops in the ground floor of Kotuku House, or of “pop-up” facilities in the plaza, would lead to a discernible increase in visitors who would travel to the area by car. I consider that prospect to be inherently unlikely. The Westfield shopping mall already accommodates those types of specialty retail stores that can be viewed as destinations in their own right, such as supermarkets and nationally branded clothing, jewellery and electronics stores. Such outlets are likely to favour locations of that type due to the numerous advantages they provide for larger retailers. Malls attract a large customer base that enjoys the ability to use dedicated parking facilities, to shop under cover and to take advantage of a wide variety of shopping facilities and amenities. The owners of stores in the Westfield mall are therefore unlikely to see any benefit in re-locating their premises to the ground floor of Kotuku House, let alone to the plaza area.
[103] It seems much more likely that the ground floor of Kotuku House will be more attractive to convenience stores or retail outlets that offer goods and services sought by persons who are already in the area. These may be persons who visit and work in
the office buildings nearby, as well as those who live in the apartment complexes that have now been established. Such persons are likely to use shops outside the mall’s precincts to purchase items that would not justify a visit to the mall. This may explain why Kainga Ora, formerly Housing New Zealand, supports the Council’s application. It owns several units in one of the apartment buildings in the MCentral apartment complex and is contemplating the construction of another apartment complex in the neighbourhood.
[104] It is also relevant in this context that not all the land in the office development is burdened by a restrictive covenant prohibiting use of the land for retail and wholesale shopping activities. Several parcels of land enjoy the benefit of the covenant but are not burdened by it. That fact has not led to a proliferation of shops on the ground floors of office buildings on land not burdened by the covenant. Few if any owners of those buildings have established shops on the ground floor, even though they are not prohibited from doing so. This means there is currently no established retail or wholesale shopping presence in the office development. It follows that people do not come to that area to go shopping. The establishment of a handful of shops in Kotuku House or on the plaza is unlikely to reverse this trend.
[105] For these reasons, I do not accept that extinguishment of the restrictive covenants will result in any real increase in neighbourhood traffic. This means I do not accept the opposing respondents’ submission that they and other respondents are likely to be substantially injured if extinguishment is ordered. Jurisdiction therefore exists to make an order under s 317(1)(d).
Sections 317(1)(f), 317(1)(a)(iii) and the exercise of the Court’s discretion
[106] Section 317(1)(f) permits the Court to make an order extinguishing a restrictive covenant where, for any other reason, it is just and equitable to do so. Factors that are relevant to this ground are also relevant to s 317(1)(a)(iii), which allows a restrictive covenant to be extinguished due to any other change in circumstances since the creation of the covenant. Factors relevant to the issue of jurisdiction under both ss 317(1)(a)(iii) and (f) are also relevant to the exercise of the Court’s discretion. I therefore deal with all three issues together.
[107] Before doing so I note that in Synlait, the Supreme Court observed that a finding that one or more of the grounds in s 317(1) has been established is likely, without more, to provide a good reason or reasons for making the order sought.14 The Supreme Court also noted that counsel had been unable to locate any case in New Zealand in which a court had found one or more of those grounds to have been established, but nevertheless exercised its discretion against the applicant.15
[108] The first relevant factor in this context flows from the fact that, although the site development plan and other documents referred to the office development being part of a general scheme, the imposition of the restrictive covenants does not appear to have been an integral or significant feature of that scheme. If the prohibition on shopping in the office building development was to be an integral or significant component of the scheme, one would expect to see the same restrictive covenant registered against the titles to all parcels of land within that development. However, as I have already observed, this has not happened. Several parcels of land in the office building development are not subject to the restrictive covenant. There is no obvious explanation for why this has occurred, nor is there any explanation for why Fletcher Mainline required covenants to be registered over the titles to some lots but not others. In the absence of a logical explanation, the imposition of covenants appears to have been both random and arbitrary.
[109] The second relevant factor is that the opposing respondents represent a tiny proportion16 of landowners who currently enjoy the benefit of the covenants registered over the Council’s land. The overwhelming majority have taken no issue with the present application.
[110] Thirdly, to the extent that the purpose of the covenants may have been to stimulate the development of the dedicated shopping precinct, that purpose was achieved many years ago. The mall is now well established and, in fact, is larger than was originally envisaged. Furthermore, the owner of the mall is plainly not concerned
14 Synlait Milk Ltd v NZ Industrial Park Ltd, above n 8, at [168].
15 At [168].
16 The opposing respondents represent four out of 181 landowners who enjoy the benefit of the covenants.
by the prospect that shops might be established on the Council’s land, as shown by the fact that it supports the Council’s application.
[111] Fourthly, the establishment of shops on the Council’s land is likely to provide an amenity to those living and working in the area that is not currently present. Whether it contributes in any significant way to the Council’s plan to revive and rejuvenate the wider neighbourhood remains to be seen. As the Council’s principal witness Mr Clive Fuhr observed when giving evidence, however, it is likely to be a step in the right direction.
[112] Fifthly, I do not consider there is any realistic downside to the extinguishment of the covenants. I have already found that the establishment of shops on the Council’s land is not likely to increase traffic volumes in the neighbourhood. The other argument advanced by the opposing respondents is that businesses in the area are likely to struggle, as has always been the case in the plaza area. This may be because shoppers tend to congregate in the mall and there is very little foot traffic in the plaza. The opposing respondents point out that a café in the plaza has recently closed its doors after struggling to survive for 20 years. They say the fact that Kotuku House fronts onto the plaza means it is not a promising venue for the establishment of shops.
[113] I accept that the establishment of shops in Kotuku House and on the plaza is likely to be a challenging exercise given the proximity of the mall and the current lack of foot traffic in the plaza. This means that prospective tenants seeking to establish shops in Kotuku House will need to have confidence in their business model. The owner of Kotuku House, whether it be the Council or a subsequent purchaser, will need to share that confidence. Ultimately, however, I consider this amounts to an exercise of commercial judgment that falls outside the exercise the Court is now undertaking. I therefore consider it to be a neutral factor in the exercise of the discretion.
[114] For the reasons set out above, I consider grounds exist to make an order extinguishing the covenants under s 317(1)(a)(iii), (d) and (f). I am also satisfied that it is appropriate to exercise the discretion in favour of the Council.
Result: orders
[115] I make orders under s 317(1) of the PLA wholly extinguishing the restrictive covenants that prevent the owner and occupier of the Council’s land from using the land for the purpose of wholesale and retail shopping.
B. Does the restrictive covenant prevent the owner of the land from selling food and beverages for immediate consumption and providing associated goods and services (including by cafes, restaurants and food stalls)?
[116] In the alternative, the Council seeks a declaration that the restrictive covenants do not in any event prohibit the sale of food and beverages for immediate consumption in premises such as (but not restricted to) cafes and restaurants, as well as the provision of associated goods and services.
[117] The fact that I have now made orders extinguishing the covenants over the Council’s land means that this issue is now of no direct relevance to the Council. This is because it will henceforth be free to use its land for retail and wholesale shopping activities. However, the Council points out that it still enjoys the benefit of the same covenant because it is registered over other parcels of land in the office development. The issue therefore remains live from its perspective to that extent.
[118] The difficulty with providing a declaration in the terms the Council seeks is that it would necessarily be abstract in nature. There is currently no live dispute between the Council and any other landowner as to the interpretation of the covenant. The position would be different if another owner of land burdened by the covenant sought to establish a café or restaurant, for example, and the Council (or another owner of land that enjoyed the benefit of the covenant) objected on the basis that such activity breached the terms of the covenant. In that situation, an application for a declaration would be appropriate because the Court would know the exact nature of the activity that the owner of the land burdened by the covenant proposed to undertake.
[119] Speaking generally, it is difficult to see how the use of land purely as a café or restaurant could amount to retail, let alone wholesale, shopping activity. The term “shopping” usually connotes the acquisition of goods that are taken away from the
premises at which they are purchased. This does not occur when food and beverages are consumed immediately on the premises.
[120] However, issues may arise where the business also sells food or beverages to be taken away from the premises for consumption elsewhere. That is now routinely the case with cafes and, in some cases, with restaurants. It may also occur in the case of food stalls. This may constitute the provision of associated goods and services and may also amount to a form of shopping as that term is commonly understood.
[121] In the absence of an actual dispute, I do not consider the Court should issue what would effectively be an advisory opinion. Resolution of the interpretation of the covenant should therefore await a case in which the Court is asked to resolve a dispute involving a known set of facts.
[122] I therefore decline to make the declaration sought by the Council regarding the interpretation of the restrictive covenant.
Costs
[123] The Council has succeeded in obtaining the orders that it seeks in both proceedings. It would ordinarily be entitled to an order of costs on a category 2B basis together with disbursements as fixed by the Registrar. If the parties are unable to reach agreement regarding costs, they may file concise memoranda and I will fix costs on the papers.
Lang J
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