Beechnest (2014) Limited v Marshall - [2023] NZHC 519

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2022-442-000030

[2023] NZHC 519

IN THE MATTER OF An appeal against the decision of the District Court

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

AND

GISELA BARBARA PURCELL and WAYNE CALVIN POOL

Second Respondents

AND

RUSSELL MAURICE McGUIGAN and FRANCESCA FIONA DEBORAH McGUIGAN

Third Respondents

AND

ERIN LESLEY McLEOD and JARRON STEWARD McLEOD

Fourth Respondents

Hearing: 15 November 2022

Appearances:

D M O’Neill for Appellant

B McDonald for Respondents

Judgment:

15 March 2023

JUDGMENT OF GRICE J

BEECHNEST (2014) LIMITED v MARSHALL [2023] NZHC 519 [15 March 2023]

Contents

Introduction[1]
Background[8]

Grounds of appeal [14]

Principles on appeal[16]
Grounds of appeal[20]
First ground of appeal — substantial injury[23] Assumptions made on the placement of dwellings on the new lots[26] Counterfactual[31]
Views[38]
Knowledge of the subdivisions by the respondents[42]
Ambience and amenities[50]
Economic effects[56]
Conclusion on first ground of appeal[70]

Second ground of appeal — covenants imposed in error [71] Third ground of appeal — changes since the creation of covenants [82] Fourth ground of appeal — impediment of the reasonable use in a different way

[88]

Fifth ground of appeal — discretion [94]

Conclusion[110]

Costs[113]

Introduction

[1] This is an appeal by Beechnest (2014) Ltd (Beechnest)1 against a District Court judgment refusing an application under the Property Law Act 2007 to allow the modification or extinguishment of a registered land covenant restricting further subdivision of two large lots of land owned by Beechnest in a residential subdivision at St Arnaud, near Nelson.2 The area boasts spectacular alpine and wetland views and the proposal has drawn strong opposition.

[2] The modification sought would enable Beechnest to subdivide the two lots which it owns into nine lots in total, each of which could then be sold and a residential dwelling erected on each. At present, due to an apparent error, which brought down a restrictive covenant onto the two titles, only one residential dwelling can be built on each of the two lots. Not realising that, Beechnest has already obtained resource consent from the Tasman District Council to enable it to subdivide the existing Lot 55 into seven lots and Lot 20 into two lots. It has also invested approximately $600,000 in work to establish building platforms on the lots. There were already other services running up to the proposed new lots.

[3] The respondents are neighbours who own properties in the Beechnest subdivision. They opposed the application in the District Court. They say their interests will be substantially injured by the proposed subdivision. Two respondents whose houses are in the vicinity of Lots 20 and 55 are particularly concerned. The injurious effects claimed go beyond views, but include loss of amenity, ambience, and economic damage.

[4] The trial Judge concluded that the prerequisites for modifying or extinguishing the covenant under s 317 of the…

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 519
Case: [2023] NZHC 519
Decision Date: 15 March 2023

CaseChat Overview and Summary

Beechnest (2014) Limited appealed against a District Court judgment refusing its application under the Property Law Act 2007 to allow the modification or extinguishment of a registered land covenant restricting further subdivision of two large lots of land owned by Beechnest in a residential subdivision at St Arnaud, near Nelson. The appellant sought to subdivide the two lots which it owned into nine lots in total, each of which could then be sold and a residential dwelling erected on each. However, due to an apparent error, which brought down a restrictive covenant onto the two titles, only one residential dwelling can be built on each of the two lots. The respondents opposed the application in the District Court. They said their interests would be substantially injured by the proposed subdivision. The trial Judge concluded that the prerequisites for modifying or extinguishing the covenant under s 317 of the Property Law Act had not been satisfied. In any case, the Judge said, if he was required to exercise his discretion, which is the second stage of the consideration, he would have exercised it against granting the modification or extinguishment. The primary factor was the “question of justice between the parties.” The Judge concluded that it was just that the consequences of the error in bringing down the restriction should be borne by Beechnest. The Judge made no errors either in his determination in the first stage assessment under s 317 or in the exercise of his discretion under the second stage of that analysis. In particular, the Judge was correct in his conclusion that he could not be satisfied that the respondents would not be substantially injured by the proposed extinguishment of the covenant, particularly the two respondents who would have been most affected had the application been granted. Accordingly, the appeal was dismissed.

Orders