G W Wilfield Limited

[2022] NZHC 3212

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-000526

[2022] NZHC 3212

UNDER

the Property Law Act 2007

IN THE MATTER OF

an application by G W WILFIELD

LIMITED for an order that a covenant be extinguished

Hearing:	On the papers
Judgment:	2 December 2022

JUDGMENT OF NATION J

[1]                 The applicant (Wilfield) seeks to bring a without notice originating application for orders under the Property Law Act 2007 removing a covenant from land which is to be vested in the Council for road and reserves for a subdivision.

Background

[2]                 The application relates to a residential subdivision in West Melton. The subdivision has 189 residential lots to date, with a further 92 sold and currently under construction. Wilfield has also recently acquired 10.5 ha of land for further stages of the subdivision.

[3]                 The land for the subdivision is subject to a covenant. I refer to the land which has the benefit of the covenant as “dominant land”.

[4]In substance, the covenant requires the owner of the affected land to:

RE G W WILFIELD LTD [2022] NZHC 3212 [2 December 2022]

(a)        provide written approval to, and support, any application (including any application for resource consent or regulatory permission) for subdivision of the dominant land;

(b)       otherwise not inhibit such subdivision; and

(c)        design, construct and operate chicken sheds in accordance with good trade practice using tunnel ventilation and use best endeavours to minimise discharge of air over the dominant land.

[5]                 In order to subdivide parts of the affected land into residential lots, it is inevitable that part of the land will need to vest in the local authority (the Selwyn District Council) or the Crown as road or reserve.

[6]Section 238 of the Resource Management Act 1991 (RMA) provides:

238  Vesting of roads

(1)   When the Registrar-General of Land deposits a survey plan, or a Chief Surveyor approves a survey plan to which section 228 applies, the land shown on the survey plan as road to be vested in a local authority or the Crown vests, free from all interests in land including any encumbrances (without the necessity of any instrument of release or discharge or otherwise),—

(a)in the case of a regional road, in the territorial authority or regional council, as the case may be:

(b)in the case of a Government road declared as such under any Act, in the Crown:

(c)in the case of a State highway, in the Crown or the territorial authority, as the case may be:

(d)in the case of any other road, in the territorial authority.

[7]Section 239(1) of the RMA provides:

239  Vesting of reserves or other land

(1)   When the Registrar-General of Land deposits a survey plan, or a Chief Surveyor approves a survey plan to which section 228 applies,—

(a)any land shown on the survey plan as reserve to be vested in the territorial authority or the Crown, vests in the territorial authority or the Crown, as the case may be, free from all interests in land,

including any encumbrances (without the necessity of any instrument of release or discharge or otherwise) for the purposes shown on the survey plan, and subject to the Reserves Act 1977; and

(b)any land shown on the survey plan as land to be vested in the territorial authority or in the Crown in lieu of reserves, shall vest in the territorial authority or in the Crown, as the case may be, free from all interests in land, including any encumbrances (without the necessity of an instrument of release or discharge or otherwise); and

(c)any land or any part of the bed of a river (not being part of the coastal marine area) or lake, shown on the survey plan as land to be vested in the territorial authority or the Crown, shall vest in the territorial authority or the Crown, as the case may be, free from all interests in land, including any encumbrances (without the necessity of an instrument of release or discharge or otherwise); and

(d)to avoid doubt, any land shown on the survey plan as land in the coastal marine area becomes part of the marine and coastal area.

[8]Section 224(b)(i) of the RMA relevantly provides:

224 Restrictions upon deposit of survey plan

No survey plan shall be deposited for the purposes of section 11(1)(a)(i) or (iii) unless—

…

(b)where land shown on the survey plan will vest in the Crown or a territorial authority, there is endorsed on the survey plan or deposited with the Registrar-General of Land, written consent to the subdivision given by—

(i)in the case of land subject to the Land Transfer Act 2017, every registered owner of an interest, including any encumbrance, in the land; …

[9]                 As a result of s 224(b)(i), LINZ will not allow parts of the affected land to vest in council or the Crown as roads or reserves until the covenant is removed insofar as it relates to the relevant land.

[10]             Wilfield seeks orders that will remove the covenants from the land affected to avoid the need for registered proprietors of the dominant land to consent to the surrender of the covenant for the relevant land.

Leave to commence proceeding by way of originating application

[11]             This is not a proceeding which may, as of right, be brought as an originating application under rr 19.2 to 19.4 of the High Court Rules 2016. There is jurisdiction under r 19.5 for the court to grant leave for the proceeding to be brought as an originating application. It has previously been said it is probably through an oversight that r 19.2 does not expressly allow applications under ss 316-317 of the Property Law Act to be made by way of an originating application.1 The originating application process is commonly used for these applications.2 Leave is granted accordingly.

Without notice aspect of the application

[12]             There are 194 records of title to land which enjoy the benefit of the covenant through being part of the dominant land. Many of the titles are in the names of multiple owners. Accordingly, identifying, tracking down and giving notice of the application to all such registered proprietors would cause considerable cost and lead to delay in resolving the application and progressing the subdivision.

[13]             It is also most unlikely those people will suffer any prejudice through not having notice of the proceeding. The covenant will be removed only from those parts of the land which are to be vested as road or reserve. The owners of lots within the dominant land will retain the benefit of the covenant insofar as it remains over land which is not to be registered as road or reserve. The proprietors of the affected land not vested as road or reserve will still therefore have to consent to any subdivision of the dominant land.

[14]             The covenant requires the proprietors of the affected land to construct and manage chicken sheds in an efficient way so as their operation is not a nuisance to the owners of lots in the dominant land. There will not be chicken sheds on the land to be vested as road or reserve. The chicken sheds which were there have already been decommissioned and will be removed from the land subject to the covenant in anticipation of the residential development.

1      Re Avlis Ltd [2022] NZHC 1157 at [13] citing Re Marriner Property Ltd [2020] NZHC 1747 at

[31] and Wang v Auckland Council [2021] NZHC 499 at [8].

2      See Taurikura Holdings Ltd v Tauranga City Council [2022] NZHC 994; Land Depot Ltd v Friese

[2020] NZHC 1085; and Fair v Fair [2019] NZHC 2349, (2019) 20 NZCPR 652.

[15]             With the exception of three records of title, all the records of title comprising the dominant land (not otherwise owned by Wilfield, the Selwyn District Council or a network utility operator) are subject to a covenant granted in favour of Wilfield. It prevents the owners of those records of title from inhibiting the residential subdivision of affected land which is part of the Wilfield development.

The orders

[16]Section 317 of the Property Law Act relevantly 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:

(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

…

(d) the proposed modification or extinguishment will not substantially injure any person entitled; or

…

[17]             It is clear from the affidavit evidence presented for Wilfield that there has been a change in the use of the affected land since titles to that land were made subject to the covenant. Originally, the land had a chicken farm on it. It is now being developed for residential subdivision. There has also been a change in the character of the neighbourhood.

[18]             The extinguishment of the covenant would not substantially injure any person entitled under s 317(1)(d). The extinguishment of the covenants for the land to be vested as road or reserve would not substantially injure the proprietors of the dominant

land. As mentioned earlier in this judgment, the requirement to not oppose any subdivision would still apply to the parts of the dominant land not vested as road or reserve.

[19]             The extinguishment of the covenant is necessary to effect the vesting of the road and reserve in the Selwyn District Council or the Crown and for Wilfield to undertake the subdivision of the affected land. Wilfield served a copy of this application on the Council. The Council confirmed it has no objection to the covenant being extinguished.

[20]             I am satisfied it is just and equitable for the covenant to be extinguished in terms as sought.

[21]             Wilfield’s application for orders extinguishing the covenant for the purpose sought is granted on a without notice basis, the orders to be in a form to be approved by the Court.

[22]             Any costs for registering the orders granted against the records of title for lots within the dominant land are to be paid by Wilfield.

Solicitors:
Rhodes & Co., Christchurch.