G W Wilfred Limited

[2023] NZHC 1071

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-118

[2023] NZHC 1071

IN THE MATTER OF

Part 19 High Court Rules 2016 and ss 316 – 317 Property Law Act 2007

BETWEEN

GW WILFIELD LIMITED

Applicant

Hearing:	On the papers
Appearances:	J E Bayley for Applicant
Judgment:	5 May 2023

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 5 May 2023 at 2.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

RE GW WILFIELD LTD [2023] NZHC 1071 [5 May 2023]

[1]This is an application, brought without notice, for orders:

(a)granting leave under r 19.5 of the High Court Rules 2016 for this proceeding to be brought by way of originating application; and

(b)directing that, pursuant to ss 316 and 317 of the Property Law Act 2007 (PLA), certain easement instruments are extinguished from land which is intended to be vested as road or reserve for a subdivision.

Leave to commence proceeding by way of originating application

[2]        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. The court has jurisdiction under r 19.5 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 and 317 of the PLA to be made by way of an originating application.1 However, the originating application process is commonly used for these applications.2 Leave is granted accordingly.

Background

[3]        The application relates to a subdivision in West Melton, in the Selwyn District. The subdivision is being developed in stages and Mr Hamish Wheelans, a director of the  applicant  company,  explains  in  his  affidavit  that  to  date  approximately   189 residential lots have been created, with a further 92 sold and currently under construction. There is further land still to be developed which includes land contained within the following records of title (the Affected Titles):

(a)839859 (the First Affected Title); and

(b)985831 (the Second Affected Title).

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.

[4]        The land in the Affected Titles is to form stages 11 to 19 of the applicant’s development, and subdivision consent for this development has been granted by the Selwyn District Council (the Council).

[5]        The Affected Titles are subject to the following land covenants (the Covenants):

(a)The First Affected Title is subject to covenants created by the following easement instruments:

(i)       10339794.9;

(ii)      10532652.12;

(iii)     10596830.9; and

(iv)     10684724.14.

(b)Part of the land contained within the Second Affected Title is subject to land covenants created by the following easement instruments:

(i)       10596830.9;

(ii)      10684724.14; and

(iii)     10718118.4.

[6]        It is not necessary for the purposes of this decision to outline in full the titles which enjoy the benefit of the Covenants. Suffice to say, the Covenants benefit between seven and 64 other titles each.

[7]        The covenants are on identical terms. They were created by the applicant and are registered over land that has been developed, or is intended to be developed as part of the applicant’s subdivision. In summary, they:

(a)require fencing and certain other works to be carried out prior to construction of a dwelling;

(b)prohibit storage containers being located on the land;

(c)prohibit altering the contour of the land;

(d)prohibit residential occupation prior to a dwelling being built;

(e)require a single-level dwelling for sections smaller than a specified size;

(f)prohibit further subdivision or intensification of residential lots;

(g)require dwellings and driveways to be built according to specific guidelines/criteria; and

(h)contain some restrictions around fencing, waste and signage.

[8]        In order to subdivide parts of the Affected Titles into residential lots, it is inevitable that part of the land will need to vest in the Council or the Crown as road or reserve.

[9]Section 238(1) of the Resource Management Act 1991 (RMA) provides:

238Vesting 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.

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

239Vesting 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[.]

[11]However, s 224(b)(i) of the RMA provides:

(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[.]

[12]      As a result of s 224(b)(i), Land Information New Zealand will not allow staged subdivision plans of the land within the Affected Titles to vest in the Council or the Crown, until every registered proprietor of land who has an interest in each of the Covenants gives consent, or the Covenants are surrendered insofar as they relate to the land to vest as road and road reserve.

The application

[13]      The applicant seeks orders that will remove the Covenants from the relevant parts of the Affected Titles to avoid the need for the many registered proprietors of the dominant land to consent to the surrender of the covenant for the relevant land. The applicant considers it is too uncertain and impracticable to attempt to obtain the written consent of hundreds of owners (noting most of the properties are co-owned) to the covenants being surrendered from the land. The applicant, therefore, pursues this

application, on a without notice basis, to enable the Covenants to be extinguished by court order.

[14]      The application has been served on the Selwyn District Council. It has filed a memorandum advising it does not seek to be involved in the application as it is not a party to the Covenants.

The grounds for the application

[15]      The application is sought on the basis that extinguishing the Covenants over the parts of the land contained in the Affected Titles which are to vest as road or reserve is warranted on the grounds that there are relevant circumstances justifying extinguishment under s 317(1)(a)(iii) of the PLA or that no person will be substantially injured under s 317(1)(d) of the PLA.

[16]      In that regard, I accept the extinguishment, as proposed, is necessary in order to effect the vesting of the road and reserve in Council or the Crown in order to enable the applicant to complete the subdivision of the land contained in the Affected Titles.

[17]      The Covenants relate to the development of residential dwellings and improvements on residential lots. The Covenants have no logical application to roads or reserves that will be vested in the Crown or Council given there will be no residential occupation of these areas. Consequently, there is no need for the Covenants to apply to roads or reserves and there can be no injury to owners of the benefitted land.

[18]      The Covenants will continue to apply to the parts of the Affected Titles that are not vested as roads or reserves, so the owners of the benefitted land will still be able to enforce the Coveneants against the owners of the residential lots. Furthermore, the benefitted owners are subject to cl 19 in the Covenants which, in substance, provides they will not object to or take any action that would prevent or hinder the applicant from completing its subdivision. The applicant says this precludes the owners from objecting to the extinguishment of the covenants from land to vest as road or road reserve as part of the ongoing subdivision.

[19]      I am satisfied that the extinguishment of the Covenants is warranted both because the Covenants will have no practical function in respect of land which is to be vested as road or reserve and because the proposed extinguishment will not substantially injure any person entitled to the benefit of the Covenants.

[20]      In these circumstances, I am also satisfied it is appropriate to allow the application to proceed without notice. There are numerous affected titles, many of which are in multiple ownership. Identifying and serving all registered proprietors would involve considerable cost and delay. Furthermore, for the reasons set out above, I can see no possibility that they will be adversely affected by the making of the orders.

Result

[21]      I am satisfied it is just and equitable for the Covenants to be extinguished under ss 316 and 317 of the PLA on the terms sought.

[22]      The applicant’s application for orders extinguishing the Covenants for the purpose sought and for related orders, is granted, on a without notice basis, as follows:

(a)granting leave under r 19.5 of the High Court Rules 2016 for this proceeding to be brought by way of originating application;

(b)directing that, pursuant to ss 316 and 317 of the Property Law Act 2007:

(i)Easement Instrument 10339794.9 shall be extinguished from any land contained within Records of Title 839859 (Canterbury Registry) (including any record or records of title subsequently issuing therefrom) where that land is surveyed and deposited/approved to vest as road or reserve in accordance with ss 238 or 239 of the Resource Management Act 1991;

(ii)Easement Instrument 10532652.12 shall be extinguished from any land contained within Record of Title 839859 (Canterbury Registry) (including any record or records of title subsequently issuing therefrom) where that land is surveyed and

deposited/approved to vest as road or reserve in accordance with ss 238 or 239 of the Resource Management Act 1991;

(iii)Easement Instrument 10596830.9 shall be extinguished from any land contained within Record of Title 839859 and 985831 (Canterbury Registry) (including any record or records of title subsequently issuing therefrom) where that land is surveyed and deposited/approved to vest as road or reserve in accordance with ss 238 or 239 of the Resource Management Act 1991;

(iv)Easement Instrument 10684724.14 shall be extinguished from any land contained within Records of Title 839859 and 985831 (Canterbury Registry) (including any record or records of title subsequently issuing therefrom) where that land is surveyed and deposited/approved to vest as road or reserve in accordance with ss 238 or 239 of the Resource Management Act 1991;

(v)Easement Instrument 10718118.4 shall be extinguished from any land contained within Record of Title 985831 (Canterbury Registry) (including any record or records of title subsequently issuing therefrom) where that land is surveyed and deposited/approved to vest as road or reserve in accordance with ss 238 or 239 of the Resource Management Act 1991; and

(c)granting leave to apply for a variation of these orders should any issue arise as to their implementation.

Solicitors:
Rhodes & Co. Christchurch