Burberry Developments Limited v Auckland Council
[2022] NZHC 3273
•7 December 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1820
[2022] NZHC 3273
IN THE MATTER of s 316 of the Property Law Act 2007 BETWEEN
BURBERRY DEVELOPMENTS LIMITED
Applicant
AND
AUCKLAND COUNCIL
First Respondent
WATERCARE SERVICES LIMITED
Second RespondentHOUSING NEW ZEALAND BUILD LIMITED
Third Respondent
BARFILON INVESTMENT LIMITED
Fourth Respondent
Hearing: 28 November 2022 Counsel:
D K Wilson for Applicant
No appearance for Respondents
Judgment:
7 December 2022
JUDGMENT OF HARVEY J
This judgment was delivered by me on 7 December 2022 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………….
Solicitors: Loo & Koo, Auckland
BURBERRY DEVELOPMENTS LIMITED v AUCKLAND COUNCIL [2022] NZHC 3273 [7 December 2022]
Introduction
[1] The applicant seeks orders under ss 316-317 of the Property Law Act 2007 to partially extinguish an easement that was created in 1995 to convey water between lots in a lifestyle block subdivision. Water use was limited to livestock and domestic gardens. Since then, the properties in question have changed to become an intensive residential subdivision. The existing easements have therefore become redundant.
[2] That said, the applicant confirms that there are some parts of the original easement which continue to function since different parts of the land are affected by the existing easement differently. The application therefore does not seek to wholly extinguish the easement from titles owned by the respondents and other parties who have been given notice. Instead, it seeks only to remove part of the easement from the applicant’s title.
[3] All of the relevant affected parties have been served, according to counsel and supported by two affidavits of service. No opposition has been filed, nor any expression of opposition received. Accordingly, the applicant seeks by way of formal proof the granting of this application on the papers.
Background
[4] On 22 September 2022, Duffy J granted a without notice application for leave to commence proceedings by way of originating application and for directions as to service. Orders were issued that:
(a)The named respondents were to be personally served with the proceedings;
(b)The remaining 83 registered proprietors of benefitting lots in a schedule annexed to the application for directions were to be given notice by courier post to the available address in a form of letter from the applicant’s solicitors as approved by the Court.
[5] The four respondents were personally served on 31 October 2022 in accordance with Michael Steven Holt’s affidavit of service sworn on 18 November 2022. The respondents received the originating application, the notice of the hearing
date and supporting affidavits. Regarding the giving of notice by courier post, Jean Ong swore an affidavit on 21 November 2022 which sets out the steps she took to comply with the Court’s directions.
[6] Regarding one of the owners of a dominant lot to be served, MWYC Investments Limited, that was delivered to 123 Ormiston Road, Flat Bush, Auckland by Mr Holt personally after issues arose with service through NZ Post. In addition, it emerged that Kāinga Ora – Homes and Communities is a part owner of two titles. Rather than sending the notice to a residential address, counsel confirmed that it was courier posted two separate letters to Kāinga Ora’s registered office at 7 Waterloo Quay, Pipitea, Wellington.
[7] As foreshadowed, notwithstanding service, no steps in opposition have been taken by any party. Mr Wilson, counsel for the applicant, submits that it is not anticipated there will be any opposition.
Applicant’s submissions
[8] Mr Wilson submitted that s 317 of the Property Law Act empowers the Court, on an application made and served in accordance with s 316, to extinguish an easement where satisfied that, in summary:
(a)since the creation of the easement there have been changes in the nature and extent of the use being made of the benefitted land the burdened land and changes in the character of the neighbourhood;
(b)the easement continuing in its existing form will impede the reasonable use of the burdened land in a different way or to a different extent from that which could have been foreseen by the original parties to the easement; and
(c)the proposed extinguishment will not substantially injure any person.
[9]Counsel then highlighted the Supreme Court’s decision Synlait Milk Limited. 1
In that case, the Court underscored the two-stage approach set out in s 317.2 The first
1 Synlait Milk Limited v NZ Industrial Park Ltd [2020] NZSC 157, [2020] 1 NZLR 657.
2 At [90].
step is to determine whether at least one of the grounds in s 317(1) is made out. The second step to determine is whether the discretion should be exercised, taking into account all relevant factors including the possibility of compensation.
[10] Mr Wilson submitted that there have been a number of examples of easements being extinguished or modified under s 317 simply because, over time, they have become obsolete. He cited Te Manuao Developments Limited v County Heights Limited, a decision of Churchman J.3 In that case, the Court concluded that where easements that no longer served any useful purpose were still in existence, they could be extinguished.
[11] Turning to the evidence, counsel confirmed that the affidavit of one of the applicant’s directors, Liangchun Huang, sworn on 15 September 2022 dealt with ownership of relevant titles, the detail of the easement including dominant and servient interests and how the area has become a residential subdivision. The applicant is now seeking to subdivide that land for residential purposes. Mr Huang also mentioned at paragraph 12 of his affidavit that the application is concerned only with a part of the water easement and how the applicant’s title will still be subject to rights set out in the supporting document.
[12] Mr Wilson referred to the affidavit by registered surveyor Russell Dick who stated that the applicant owns Title 1025838 that is servient to the easement rights and the water conveyance as part of the application. Mr Dick confirmed that the applicant’s subdivision proposal requires part of the land to be vested in Auckland Council as roading and reserve. Such a vesting must be free of encumbrances. Mr Dick then outlines the original easement terms from 1995 which he said are no longer fit for purpose for a residential subdivision. Namely, because of subdivision of the main dominant lifestyle block, there are now about 85 to 90 small residential sections where there is a dominant interest in the easement over these titles. Mr Dick confirmed that those residences are now fully supplied with water by Watercare Services Limited.
[13] Then at paragraph 21 of his affidavit, Mr Dick stated that the subdivision of Lot 9 into approximately 90 lots occurred without provision for continued use of water
3 Te Manuao Developments Limited v County Heights Limited [2022] NZHC 981.
supply by the easement. This meant that there are no pipes for such water anywhere on the land previously Lot 9 now subdivided. Moreover, Mr Dick confirmed that it will be impossible to reinstate pipes over the subdivision since that would require a new and complex easement system over numerous different titles and private land and road vested in Auckland Council. It would simply not be viable according to Mr Dick.
[14] Mr Wilson then referred to the affidavit of Barry Wayne Green sworn on 22 September 2022 which dealt with the detail of all the dominant interests affected by the easement that is to be extinguished.
[15] Accordingly, Mr Wilson sought an order partially extinguishing the easement, in the terms set out at para 22 of his submissions, together with an order reserving leave to apply to vary the orders should any unforeseen developments arise.
Legal framework and principles
[16]Sections 316 and 317 of the Property Law Act provide:
316Application for order under section 317
(1)A person bound by an easement, a positive covenant, or a restrictive covenant (including a covenant expressed or implied in an easement) may make an application to a court for an order under section 317 modifying or extinguishing that easement or covenant.
(2)That application may be made in a proceeding brought by that person for the purpose, or in a proceeding brought by any person in relation to, or in relation to land burdened by, that easement or covenant.
(3)That application must be served on the territorial authority in accordance with the relevant rules of court, unless the court directs otherwise on an application for the purpose, and must be served on any other persons, and in any manner, the court directs on an application for the purpose.
317Court 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:
(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; or
(e)in the case of a covenant, the covenant is contrary to public policy or to any enactment or rule of law; or
(f)in the case of a covenant, for any other reason it is just and equitable to modify or extinguish the covenant, wholly or partly.
(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.
[17] As mentioned, counsel cited Te Manuao Developments Limited v County Heights Limited in support,4 a case involving an application for particular riparian rights to be extinguished in order for the applicants to be able to register roads for subdivisions. As mentioned, in that case Churchman J held that an order extinguishing the easement was held to be appropriate in circumstances where the riparian rights were no longer relevant for what they were intended to provide, and where:5
[t]he easements have ceased to serve any useful purpose and impede the reasonable use of the applicants’ land in a way that could not reasonably have
4 Te Manuao Developments Limited v County Heights Limited, above n 3.
5 At [13].
been foreseen by the original parties to the easements at the time of their creation.
Discussion
[18] The evidence confirms that the applicant is owner of Record of Title 1025838 being 3.9224 hectares in Auranga, a suburban area being developed near Drury, south of Auckland.6 As foreshadowed, the easement that is the subject of this application was created in 1995. It provided a system to convey water between 12 lots of a subdivision of lifestyle blocks, most of which were approximately 4 to 5 hectares in area. The easement made provision for a pump and bore on one of the lots that created a water supply system of pipes under and through the easement areas defined in the schedule of the Easement Certificate. That specified that the use of water was only for such reasonable quantities needed for livestock and watering a domestic garden adjacent to a dwelling. The water was not to be used for horticulture or personal residential use. In short, circumstances have changed such that the rights under the easement are now, as Mr Dick opined in his evidence, effectively “obsolete and unusable”.
[19] Having carefully considered the evidence and the submissions of counsel, I am satisfied that there has been proper compliance with the statutory requirements by the applicant, and that the easement ought to be partially extinguished under s 317. Consequently, I see no impediment to the granting of the orders as sought by the applicant.
Decision
[20] Orders are now issued that Easement Certificate C878364.7 is partially extinguished by:
(a)deletion of rights to convey water over parts marked “F”, “E” and “D” on DP 569241 (formerly specified as HH, Q and II on DP 166291 and Easement
6 Accordingly, as a person bound by the easement, the applicant has standing under s 316 to bring an application seeking orders under s 317 of the Property Act. As noted earlier, service has been duly effected as directed by the Court.
Certificate C878364.7 (as contained in Burdened Record of Title 1025838,
North Auckland Land Registration District); and
(b)Extinguishment of Easement Certificate C878364.7 on the Benefitting Records of Title in the annexure attached to the application labelled “List of Benefitting Lots.”
[21]The applicant may apply to vary these orders should any unforeseen issue arise.
Harvey J