Aztec Projects Limited v Matthews - [2024] NZHC 1293

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-002945

[2024] NZHC 1293

UNDER Property Law Act 2007

IN THE MATTER OF

An application pursuant to ss 316 and 317 of the Act for an order modifying covenant 607.2326.11

BETWEEN

AZTEK PROJECTS LIMITED

Applicant

AND

RHONDA ANNE MATTHEWS, MICHAEL GREGORY ARTHUR JOYCE and BBMR FAMILY TRUSTEES LIMITED

First Respondents

KEVIN TE PAI GURNEY and CHRISTINE MARY GURNEY

Second Respondents

GRAHAME WILLIAM POWELL
Third Respondent

ANNETTE JOY CARR and JOHN HILTON CARR
Fourth Respondents

DEVAN COLIN FLEWELLYN and GAYLENE GRACE FLEWELLYN

Fifth Respondents

PATRICK RAYMOND COLE and LOUISE DEBORAH COLE

Sixth Respondents

CARMEL LILLIAN DRAPER, MARK ANDREW GRIFFITHS and CORNWALL TRUSTEES 53 LIMITED

Seventh Respondents

MATA HOLDINGS LIMITED

Eighth Respondent

AZTEK PROJECTS LTD v MATTHEWS & ORS [2024] NZHC 1293 [23 May 2024]

VICTOR JOWSEY, SHEILAH ESME TOMS and STEPHANIE FAY PAXTON- PENMAN
Ninth Respondents

AILSA CLAIRE
Tenth Respondent

JEFFREY LEWIS SMITH and PATRICIA SUSAN SMITH
Eleventh Respondents

Hearing: 9 May 2024

Appearances:

A Casey and M Matti for Applicant No appearance for Respondents

Judgment:

23 May 2024

JUDGMENT OF ANDREW

This judgment was delivered by Justice Andrew on 23 May 2024 at 4.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date ………………………….

Introduction

[1] The applicant, Aztek Projects Ltd (Aztek), is a land development company. It makes application pursuant to ss 316 and 317 of the Property Law Act 2007 to modify a covenant over land at 59 Wilson Road, Warkworth.

[2] The covenant1 was first registered in 2004. It restricts developments on the titles it is registered against, by allowing construction of only one residential dwelling on each burdened title.

[3] Aztek purchased one of the burdened titles in 2017 (the Head Title). Although the covenant was on the title, Aztek’s directors were unaware of the single-dwelling restriction imposed by it. Aztek then proceeded to subdivide the Head Title into two new titles (being 63 Wilson Road and 59 Wilson Road) and built a residential dwelling on each.

[4] As soon as it became aware of the restriction, Aztek suspended its development plans and contacted the owners of the other affected titles with a view to having the covenant modified by consent. Those attempts were unsuccessful.

[5] The respondents are the registered proprietors of all of the properties which have the benefit (and burden) of the covenant, other than 59 Wilson Road. Only one of the respondents, Mata Holdings Ltd, the eighth respondent, has filed and served a notice of opposition. A number of the other respondents sent informal oppositions to the Court. They were directed to file and serve formal oppositions (including any supporting evidence) by 14 March 2024; no such formal oppositions have been filed or served.

[6] Auckland Council has filed a memorandum advising that it does not oppose the application.

[7]Attached marked ‘A’ is an appendix setting out the position of the respondents.

1 Instrument 607236.11.

Factual background

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 Aztec Projects Limited v Matthews

Details

AGLC: Aztec Projects Limited v Matthews [2024] NZHC 1293
Case: [2024] NZHC 1293
Decision Date: 23 May 2024

CaseChat Overview and Summary

Aztek Projects Limited, a land development company, sought to modify a covenant registered over land at 59 Wilson Road, Warkworth. The covenant, registered in 2004, restricts developments on the burdened titles to only one residential dwelling per title. Unaware of this restriction, Aztek subdivided a purchased title into two new titles and constructed a dwelling on each, subsequently discovering the covenant and halting further development. Aztek applied to modify the covenant to permit three dwellings on the original title. Most respondents did not formally oppose the application, with only Mata Holdings Ltd filing a notice of opposition. The Court examined whether the covenant should be modified based on changes in the neighbourhood, impediment to reasonable use, and whether modification would substantially injure any person entitled. The Court found that the neighbourhood had changed significantly since the covenant's creation, making its continuation an impediment to reasonable use. The proposed modification would not substantially injure any respondent, as there would be no economic, physical, or intangible injury. The Court exercised its discretion to modify the covenant as there was no good reason to reject the application, and Aztek would suffer significant consequences if the covenant remained unchanged. The Court concluded that there was no basis for awarding compensation to the respondents.

The Court granted Aztek's application to modify the covenant, allowing three dwellings on the original title. The Court requested a short memorandum from Aztek's counsel explaining the inclusion of the word "each" in the proposed order.

Orders