Belfast Business Park Limited - [2018] NZHC 554

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

CIV-2017-409-000964

[2018] NZHC 554

IN THE MATTER OF THE PROPERTY LAW ACT 2007

IN THE MATTER OF

AN APPLICATION BY BELFAST BUSINESS PARK LIMITED

Applicant

Hearing: 26 March 2018

Appearances:

K M McMullen for Applicant

Judgment:

26 March 2018

ORAL JUDGMENT OF GENDALL J

[1] The applicant Belfast Business Park Limited applies for orders effectively seeking to modify land covenants created by an easement instrument. The applicant alleges that the continuation and force of the land covenants in their existing form is impeding the development of a road on a proposed subdivision. This was not, it is said, foreseen by the applicant or any parties when the covenant was first registered in 2012 when the applicant purchased the land in question.

[2] The application before me is one brought pursuant to s 317 of the Property Law Act 2007 which states:

317 Court 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:

RE: BELFAST BUSINESS PARK LIMITED [2018] NZHC 554 [26 March 2018]

(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.

(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.

[3] All affected parties in this matter have been served. It is clear that no parties have opposed the present application and indeed a number of parties have supported it. The order now sought by the applicant is in the following terms, that the land covenants created by Easement Instrument No. 9213826.2 be modified to include in Annexure Schedule 2 of the easement…

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.

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Details

Case: [2018] NZHC 554
Decision Date: 26 March 2018

CaseChat Overview and Summary

The High Court of New Zealand, Christchurch Registry, considered an application by Belfast Business Park Limited to modify land covenants created by an easement instrument. The applicant sought to modify the covenants to facilitate the development of a road within its business park, which was impeded by the existing covenants. The application was brought under section 317 of the Property Law Act 2007, which allows the court to modify or extinguish easements or covenants under certain conditions. The court had to decide whether the covenants ought to be modified due to changes since their creation, or if their continuation would impede the reasonable use of the burdened land in a way that was not foreseen by the original parties. Importantly, all affected parties had been served, and none opposed the application, with some even expressing support.

The court found that the existing covenants were indeed impeding the development of the Stage 2B Road in a manner not foreseen when the covenants were registered in 2012. The applicant argued, and the court agreed, that the modification was necessary for the reasonable use of the burdened land. Given the lack of opposition and the potential benefit of the modification to the burdened land, the court concluded that the application should succeed. The court granted the order sought by the applicant, modifying the land covenants to cease their application to the part of the servient land intended to vest as a road or reserve, upon the approval of a survey plan.

The court also noted that the proposed modification would not substantially injure the benefitted land and might even provide additional benefits. This decision effectively allows Belfast Business Park Limited to proceed with the development of the Stage 2B Road, subject to the modified covenants. The final order modifies the land covenants to include the specified changes, facilitating the applicant's development plans.

Orders