Avlis Limited - [2022] NZHC 1440

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-000184

[2022] NZHC 1440

UNDER Sections 316 and 317 of the Property Law Act 2007

IN THE MATTER

of an application for an order by Avlis

Limited that covenants be modified under s 317 of the Property Law Act 2007

BETWEEN

AVLIS LIMITED

Applicant

Hearing: On the papers

Counsel:

P J Woods and M J McConway for the Applicant

Judgment:

17 June 2022

JUDGMENT OF NATION J

Introduction

[1] Avlis Limited (Avlis) wishes to progress a significant residential subdivision in Twizel. To do that, it needs to vest certain areas of land in the Mackenzie District Council (the Council) as a road. The land is currently subject to a covenant not to erect a motel on that land and another covenant not to grow trees or plants that would exceed two metres in height which might damage services over the land.

[2] For earlier stages of the development, Avlis had been able to transfer other lots subject to such covenants to the Council by a process called “dedication and transfer” so that roading and services could be put through. The Registrar General of Land has subsequently advised that creating roads by this procedure is no longer permitted under the Resource Management Act 1991 (RMA). Because of this, Avlis says it now

Avlis Ltd [2022] NZHC 1440 [17 June 2022]

needs to be able to “auto-extinguish” the covenants over the proposed roading area in the subdivision as soon as a piece of land becomes irreversibly earmarked to become a road. It will then be able to vest the roads in the Council and finish the development.

[3] Avlis applies under ss 316 and 317 of the Property Law Act 2007 (the Act) to modify the relevant covenants to achieve this.

[4] In an earlier judgment, I granted leave for the application to modify the covenants to be made by way of originating application.1 I also granted leave for Avlis to proceed without notice to landowners who had the benefit of the covenants. I considered it was unlikely that modification of the covenants as sought would detrimentally affect those landowners. I also considered that requiring the proceedings to be served on them would result in significant costs and delay. There was also a reasonable explanation for Avlis having now to proceed with urgency. I required service on the Council in accordance with s 316(3) of the Act.

[5] On 8 June 2022, the Council filed a memorandum confirming they had been served with the relevant documents. It also advised that it does not intend to participate in the proceedings, consents to the modifications of the covenants as sought by Avlis and will abide the Court’s decision. As a result, it is appropriate to now deal with the merits of the application.

Facts

[6]I will repeat the facts as they were outlined in the earlier judgment.

[7] Avlis’s development is called the Tussock Bend Subdivision. Some…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Avlis Limited

Details

AGLC: Avlis Limited [2022] NZHC 1440
Case: [2022] NZHC 1440
Decision Date: 17 June 2022

CaseChat Overview and Summary

Avlis Limited sought to modify covenants on land in Twizel, New Zealand, to allow for the development of a residential subdivision. The covenants in question prohibited the erection of a motel and the planting of trees taller than two metres. Avlis argued that these restrictions were incompatible with its intended use of the land as roads. The case was heard in the High Court of New Zealand, Christchurch Registry. The primary issue before the Court was whether the covenants should be modified to accommodate Avlis's development plans.

The Court considered whether the modification of the covenants was justified under the Property Law Act 2007. It noted that the land had undergone significant changes since the covenants were created, including the subdivision of the land into numerous residential lots. The Court found that the covenants' restrictions were disproportionate to the current use of the land, and their continuation would impede the reasonable use of the burdened land. Additionally, the Court determined that modifying the covenants would not substantially injure any person entitled to the benefits of the covenants.

The Court concluded that it was appropriate to modify the covenants to allow for the development of roads, as this would not adversely affect the rights of the benefitting landowners. The Court also considered the precedent set in previous cases where similar modifications had been granted. Ultimately, the Court granted Avlis's application to modify the covenants, inserting clauses that would cease their application to land intended to be vested as roads. The Court made no order as to costs.

Orders