Beechnest (2014) Limited v Marshall - [2023] NZHC 3226

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2022-442-30

[2023] NZHC 3226

BETWEEN
BEECHNEST (2014) LIMITED

Appellant

AND

LEIGHTON WATSON MARSHALL and ALEXANDRA UNTERBERGER and NELSON TRUSTEES NO. 8 LIMITED as

trustees of the Portixol Family Trust First Respondents

GISELA BARBARA PURCELL and WAYNE CALVIN POOL
Second Respondents

RUSSELL MAURICE McGUIGAN and FRANCESCA FIONA DEBORAH McGUIGAN
Third Respondents

ERIN LESLEY McLEOD and JARRON STEWART McLEOD

Fourth Respondents

Hearing: 16 August 2023 (AVL)

Appearances:

D M O’Neill for Appellant

B F McDonald for Respondents

Judgment:

16 November 2023

JUDGMENT OF GRICE J

(Leave to appeal)

BEECHNEST (2014) LIMITED v MARSHALL & ORS [2023] NZHC 3226 [16 November 2023]

Introduction

[1] Beechnest (2014) Ltd (Beechnest) applies for leave to appeal to the Court of Appeal against a judgment dated 15 March 2023.1 The appeal would be a second appeal, as the High Court decision dismissed an appeal from a District Court judgment.2

[2] The substantive issue involved relates to an application under s 317 of the Property Law Act 2007 (the Act) to modify or extinguish a covenant registered on two large lots, numbered Lots 55 and 20, in a residential subdivision at St Arnaud, near Nelson. The area boasts spectacular alpine wetland views. The proposal drew strong opposition from owners of other lots in the established subdivision. They refused to grant their consent to the proposal by Beechnest to modify the covenants to enable a subdivision of those two lots into a total of 10 lots.

[3] In submissions on appeal, Mr O’Neill, for Beechnest, noted the matter was significant for the appellant as it would enable it to develop 10 sections instead of two. It stood to make a substantial amount more out of selling 10 lots than it did out of the present two lots. The appellant also had obtained subdivision approval under the Resource Management Act 1991 before applying for the modification of the covenants. It said that at the time it obtained resource consent from the Tasman District Council, it did not realise that it was prohibited from subdividing by the terms of the covenants.3 Mr O’Neill also noted that Beechnest had invested approximately $600,000 to establish building platforms on the lots. Beechnest was unsuccessful in both the District Court and on appeal to the High Court in obtaining the modifications that it sought to the covenants.

1      Beechnest (2014) Ltd v Marshall [2023] NZHC 519 [High Court decision].
2      Beechnest (2014) Ltd v Marshall [2021] NZDC 16591 [District Court decision].
3      In oral argument in support of this leave application, Mr O’Neill for Beechnest conceded that the covenant prevented subdivision and was not limited to building or construction on the sites. He had taken the position that subdivision was not prevented in his earlier submissions. However, the covenant on its face prohibits subdivision as well as construction, contrary to the terms of the covenant.

Proposed grounds of appeal

[4] The memorandum in support of the application for…

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 Beechnest (2014) Limited v Marshall

Details

AGLC: Beechnest (2014) Limited v Marshall [2023] NZHC 3226
Case: [2023] NZHC 3226
Decision Date: 16 November 2023

CaseChat Overview and Summary

Beechnest (2014) Ltd applied for leave to appeal to the Court of Appeal against a judgment dismissing its appeal from a District Court decision. The substantive issue involved an application under s 317 of the Property Law Act 2007 to modify or extinguish a covenant registered on two large lots in a residential subdivision at St Arnaud, near Nelson. The appellant sought to modify the covenants to enable a subdivision of those two lots into a total of 10 lots. The other lot owners in the established subdivision opposed the proposal and refused to grant their consent. The appellant was unsuccessful in both the District Court and on appeal to the High Court in obtaining the modifications that it sought to the covenants.

The proposed grounds of appeal were as follows: the first related to the District Court finding upheld on appeal as to the likely use of the two lots unsubdivided compared to the likely use of the 10 lots. The second ground of appeal was related to the District Court finding that the appellant could not take advantage of its own actions in breach of the covenant. The third and fourth grounds of appeal were related to the second ground. The fifth ground of appeal was related to the exercise of the Court’s discretion to dismiss the application.

The legal principles applicable were common ground. The proposed appeal must raise some question of law or fact capable of bona fide and serious argument, in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. The Court found that the grounds proposed by the appellant in essence challenged the factual findings of the District Court, upheld on appeal. There were no proposed grounds of appeal which raised any question of law or fact capable of bona fide and serious argument nor a point of interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. The application for leave to appeal was dismissed.

In conclusion, Beechnest (2014) Ltd's application for leave to appeal to the Court of Appeal against the High Court's judgment dismissing its appeal from the District Court decision was dismissed. The proposed grounds of appeal challenged the factual findings of the District Court, which were upheld on appeal. There were no proposed grounds of appeal which raised any question of law or fact capable of bona fide and serious argument nor a point of interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. The cumulative result of the errors was not sufficient to provide grounds to grant leave to appeal.

Orders