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Fair v Fair

Fair v Fair

Case [2019] NZHC 2349 17 September 2019

Covenants

Modification of Covenants

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IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2019-454-40

[2019] NZHC 2349

BETWEEN
EILEEN ELEANOR FAIR

Applicant

AND

EILEEN ELEANOR FAIR AND ORS

First Respondents

AND

PALMERSTON NORTH CITY COUNCIL

Second Respondent

Hearing: 11 September 2019

Appearances:

P J Wright and T Nelson for the Applicant Appearance excused for Second Respondent

Judgment:

17 September 2019

JUDGMENT OF CULL J

[1] Eileen Fair seeks orders under ss 316 and 317 of the Property Law Act 2007 (the PLA) to partially extinguish and modify a land covenant (the Covenant) applicable to land she is subdividing in Palmerston North.

[2] The Covenant governs the number and standard, in terms of character, design specification and the like, of dwellings and fences and other aspects of the use of the new residential sections in the development. In its present form, the Covenant also applies to land that will become roads and reserves which are to be vested in the local authority, the Palmerston North City Council. It was not intended to apply in this manner, and this has arisen as a result of an oversight during the previous stage of the development.

FAIR v FAIR AND ORS [2019] NZHC 2349 [17 September 2019]

[3] Under s 224(b) of the Resource Management Act 1991 (the RMA), the consent of every registered owner of the already-subdivided titles is required to the subdivision because of their interest in the land intended to vest as a road through their land being the dominant tenements under the Covenant.

[4] Also as part of the subdivision, the new roads that are to vest in the Council must, under s 238 of the RMA, vest free from all interests in the land including any encumbrances.

[5] Because the Covenant is registered against the land required for a road in the current stage of the subdivision, the effect of s 238 is to prevent the plan depositing, unless the consent of every registered owner of the dominant tenements is obtained.

[6] Because the process would be unduly burdensome on Ms Fair, she seeks an order to extinguish the Covenant from that part of the land now needed to vest as a road and add a deemed consent provision of a kind commonly used in this context into the Covenant to prevent this problem from arising again in future stages of the development.

Factual background1

The Development: Fair Estates Subdivision

[7] The applicant is carrying out a multistage residential development, the Fair Estates Subdivision (the Development), on a parcel of land adjacent to Fairs Road in Palmerston North (the Site). She inherited the Site for the Development in 1975.

[8] Stages I and II of the Development have been completed. The Covenant was registered as part of Stage II.2

[9] The problem the applicant now faces did not arise in respect of Stages I and II. This was because the land that vested in the Council as roads was excluded from 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 Fair v Fair

Details

AGLC: Fair v Fair [2019] NZHC 2349
Case: [2019] NZHC 2349
Decision Date: 17 September 2019

CaseChat Overview and Summary

Eileen Fair applied for orders to partially extinguish and modify a covenant registered against her property in Palmerston North. The covenant governed the use of the land, including the number and design of dwellings and fences. However, the covenant inadvertently applied to land that was to vest as a road in the local authority, which was not its intended purpose. The court was required to determine whether the covenant could be modified or extinguished in part to allow the subdivision to proceed, and if such an order would be just and equitable.

The court found that the covenant should be partially extinguished and modified as it no longer served its intended purpose for the affected land. The court held that the covenant met the criteria for modification or extinguishment under the Property Law Act 2007, as there had been changes in the use of the burdened land and the proposed modification would not cause substantial injury to any person entitled. The court also found that the application was well-suited to the originating application procedure, and granted leave for the application to proceed.

The court made the following orders: (a) the covenant was partially extinguished from the land that was to vest as a road; (b) the Registrar-General of Land was directed to note against all relevant titles that the covenant had been extinguished in the terms specified by the court; and (c) the covenant was modified to include a deemed consent provision to prevent the issue from arising again in future stages of the development. The court also granted leave to counsel to seek further amendment to these orders if required.

Orders