Chand v Auckland Council - [2021] NZCA 282

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA591/2020
[2021] NZCA 282

BETWEEN	PARWATI CHAND, RAM CHAND AND KHAN & ASSOCIATES TRUSTEE COMPANY (NO. 110) LIMITED Appellants
AND	AUCKLAND COUNCIL First Respondent
AND	CHAMROEUN KONG, KIMHENG CHHIT AND SOKCHAN ARUN KONG Second Respondents
AND	XUANYU HE AND QIUYU SU Third Respondents
AND	RAAD ELIAS AND SAHAR JAMEEL BAHNAM Fourth Respondents
AND	RAJESH PRASAD, VIJAY RAGNI PRASAD AND DR THOMAS LIMITED Fifth Respondents
AND	WILLIAM GORDON CHIPLIN AND THUY THI CHIPLIN Sixth Respondents
AND	LIM THI HOANG, TRAC XUAN BUI, TONG DUC BUI AND MEN THI LUU Seventh Respondents

Hearing:	10 May 2021
Court:	Miller, Venning and Peters JJ
Counsel:	R O Parmenter for Appellants D J Neutze and P Moodley for Respondents
Judgment:	30 June 2021 at 3.00 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants must pay the third to fifth respondents one set of costs for a standard appeal on a band A basis with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

Table of Contents

The properties  [6]
The proposed subdivision  [9]
The covenants  [11]
The application under s 317  [13]
The evidence of injury  [14]
Section 317  [25]
Loss of property rights an injury under s 317(1)(d)  [31]

The covenants against subdivision and building are property rights          [31]
Synlait: property rights relevant and can be significant in the exercise of discretion  [32]
Compensation for loss of property rights at common law  [38]
Loss of property rights is compensable injury under s 317  [44]

Substantial injury in this case [50]
Result [62]

The parties to this appeal own properties at Manukau which were part of an 8‑lot subdivision completed by former owners, the Smyths, between around February 2007 and February 2012. All of the titles are both subject to and beneficiaries of covenants limiting subdivision and construction.
The appellants, whom we will call the Chands, want to further subdivide their property, which is the Smyths’ former home. It comprises approximately 2,229m²and contains a single dwelling. They seek to extinguish the covenant so far as it precludes subdivision and dwelling numbers. They have put forward a proposal to subdivide into five lots.
A covenant may be modified or extinguished under s 317(1)(d) of the Property Law Act 2007, if a court is satisfied that “the proposed modification or extinguishment will not substantially injure any person entitled…”. If so satisfied, a court may order the applicant to pay “reasonable compensation as determined by the court”.[1]
[1]Property Law Act 2007, s 317(2).
The Chands failed to persuade Palmer J that the modification would not substantially injure the third to fifth respondents. The Judge accepted the evidence of the respondents’ valuer, Peter Bates, that the modification would have a significant effect of about $100,000 on the value of each of their properties and for that reason would substantially injure them. The Judge dismissed the application with costs.[2]
[2]Chand v Auckland Council [2020] NZHC 2422.
On…

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: [2021] NZCA 282
Decision Date: 30 June 2021 at 3.00 pm

CaseChat Overview and Summary

The Court of Appeal was asked to decide whether the appellants could extinguish a covenant that prohibited subdivision of their property. The appellants argued that the modification would not substantially injure the respondents. The respondents claimed that the proposed subdivision would result in a significant loss of property value, loss of privacy, and increased traffic and noise. The Court of Appeal found that the proposed modification would result in substantial injury to the respondents, and therefore dismissed the appeal. The Court held that the loss of property rights over the appellants' land was a compensable injury under section 317 of the Property Law Act 2007, and that the loss of value of the respondents' properties and loss of property rights were all relevant factors in determining whether the modification would cause substantial injury. The Court found that the proposed modification would cause substantial injury to the respondents, and therefore dismissed the appeal. The appellants were ordered to pay the third to fifth respondents one set of costs for a standard appeal on a band A basis with usual disbursements.

Orders