Halswell Prestige Limited v Datsun Holdings Limited

[2021] NZHC 2292

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-277

[2021] NZHC 2292

BETWEEN

HALSWELL PRESTIGE LIMITED

Applicant

AND

DATSUN HOLDINGS LIMITED

First Respondent

Cont’d over

Hearing:

16 August 2021

Appearances:

S Caradus for Plaintiff

No appearance for First to Twenty-fourth Respondents D M Lang for Twenty-fifth Respondent

No appearance for Twenty-sixth Respondent

Judgment:

2 September 2021

JUDGMENT OF MANDER J

This judgment was delivered by me on 2 September 2021 at 4 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar Date:     .

CRAIG RICHARD MCBEATH & LYNNE MARIE MCBEATH

Second Respondents

INDEPENDENT TRUSTEES (CANTERBURY) LIMITED AND WENDY BROWN

Third Respondents

ANNE BEATRICE WINIFRED CHAMBERS

Fourth Respondent

DARYL WAYNE PETHERAM AND ROBERT FREDERICK PETHERAM

Fifth Respondents

SANDHURST PROPERTIES LIMITED
Sixth Respondent

GAVIN ALEXANDER ASKEW AND ROSEMARY JANE ASKEW

Seventh Respondents

BENJAMIN DAVID LANG
Eighth Respondent

TUATARA HOMES LIMITED
Ninth Respondent

STREETCO LIMITED

Tenth Respondent

CHRISTOPHER MICHAEL PLATT
Eleventh Respondent

CRAIG STEVEN TREGURTHA AND REBEKAH JOY TREGURTHA
Twelfth Respondents

WARREN ARTHUR GOLLAN AND JOAN BARBARA GOLLAN

Thirteenth Respondents

TSUTOMU UEYAMA
Fourteenth Respondent

PHILLIPA KAYLENE FENEMOR AND OXFORD STREET TRUSTEES (2014) LIMITED

Fifteenth Respondents

HUGH WILLIAM MCDERMOTT AND TERESA MARIA MCDERMOTT
Sixteenth Respondents

MARTHA JANE MORTIMER AND MICHAEL JOHN NABER

Seventeenth Respondents

EDUARDO ANDRES CONEJEROS TORO AND EMMA LOUISE COOPER

Eighteenth Respondents

STRAVEN TRUSTEE SERVICES LIMITED, GRAEME PETER MCKENZIE AND SUSAN ELIZABETH MCKENZIE

Nineteenth Respondents

MALLEY & CO TRUSTEES LIMITED, COLLEEN FAYE WILLIAMS AND SHANE JOHN WILLIAMS

Twentieth Respondents

TONY FRANCIS CHEYNE

Twenty-first Respondent

OWEN NOEL HAZELDINE AND TRUDI ELLEN HAZELDINE

Twenty-second Respondents

CHARLES LEONARD DUNSTAN AND JESSIE MABEL DUNSTAN
Twenty-third Respondents

ANTHONY KLASS STRYDER AND JENNIFER ANN STRYDER

Twenty-fourth Respondents

FLETCHER RESIDENTIAL LIMITED
Twenty-fifth Respondent

DEON FRANK SRHOY BIGGS
Twenty-sixth Respondent

[1]    The applicant, Halswell Prestige Limited (Halswell Prestige), and the twenty- fifth respondent, Fletcher Residential Ltd (Fletcher Residential), seek orders to remove two easements that protect a stormwater drain across Halswell Prestige’s land and a neighbouring property belonging to Fletcher Residential. The easements are in favour of 25 neighbouring properties which are owned by the First to Twenty-fourth Respondents and a prospective Twenty-sixth Respondent. Pursuant to directions made by Associate Judge Paulsen, all respondents have been served.1

Background

[2]    The land the subject of the application was subdivided in the 1970s. This resulted in the creation of 25 properties (the neighbouring properties) and two larger sections that are now owned by Halswell Prestige and Fletcher Residential (collectively referred to as the servient land). Halswell Prestige intends to subdivide its property into 94 sections and is currently working with the city and regional councils to obtain the necessary consents. Fletcher Residential is undertaking a similar development of its property.

[3]    The servient land was originally zoned for rural use but is now zoned “Residential New Neighbourhood”. All the neighbouring properties’ services are accessed from Halswell Junction Road apart from stormwater discharge, which travels through a pipe into an open drain which runs through the middle of the servient land. This stormwater drain is protected by two easements that were registered against the servient land almost 50 years ago.2 Presently, the stormwater does not follow the drain but ponds at the northern boundary to Halswell Prestige’s land. It is submitted on behalf of Halswell Prestige that the current stormwater system is not appropriate for a modern, urbanised environment.

[4]    As noted, Halswell Prestige and Fletcher Residential seek to subdivide their land and, as part of that subdivision, they seek to remove the existing easements. Halswell Prestige proposes to register a new easement in gross in favour of the

1      Halswell Prestige Ltd v Datsun Holdings Ltd HC Christchurch CIV-2021-409-277, 29 June 2021.

2      Easement Certificate 865897 (right to drain stormwater and sewage); and Transfer 890313 (right to drain stormwater).

neighbouring properties simultaneously with the removal of the existing easement. The proposed new easement would follow a planned legal road through the servient land.

[5]    The Christchurch City Council (the Council) has confirmed that its resource consent for Halswell Prestige’s proposed subdivision includes conditions that ensure that suitable stormwater infrastructure is constructed with sufficient capacity to cater for the neighbouring properties. The draft conditions for the subdivision consent state:

14.11. Upon decommissioning [the current stormwater system], the consent holder shall provide stormwater drainage from the 300mm RCRR pipeline SwPipeID 24557 into their internal site reticulation, to be protected by easement in gross if necessary.

…

14.16. The consent holder shall submit an Engineering Design Report for acceptance by 3 Waters and Waste and Resource Consents Units. The Engineering Design Report shall demonstrate how the design will meet all of the applicable standards and shall contain all of the plans, specifications and calculations for the design and construction of all stormwater infrastructure and mitigation systems.

[6]    The proposed stormwater infrastructure will follow legal roads and connect via the Fletcher Residential land to a $12 million water treatment facility and wildlife reserve that has already been constructed by the Council, known as the Cox’s Quaifes Stormwater Facility.

Applicable law

[7]    Section 317 of the Property Law Act 2007 (the Act) provides that an easement may be extinguished (or modified) by the Court if it is satisfied, among other things, that:

(a)the easement should be extinguished because of a change since its creation in the nature or extent of the use being made of the burdened land;3 or

3      Property Law Act 2007, s 317(1)(a)(i).

(b)the easement’s continuance 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;4 or

(c)the proposed modification or extinguishment will not substantially injure any person entitled.5

[8]In Pollard v Williams, Cooke J observed:6

[18] Section 317 involves a balancing of policy considerations.  It  recognises the importance of property rights, and the sanctity of contract. But it also recognises other public policy considerations associated with the efficient utilisation of land resources. Parliament empowers the Court to act across contractual and property rights in light of the other policy considerations. Some restrictions can reasonably be removed, or relaxed. The balance struck by the section overall has changed in significant, but not necessarily profound, ways by the amendments made to the provision over time.

The position of the respondents

[9]    All the respondents have been served with the application and the supporting materials. Those documents were accompanied by a letter from Halswell Prestige’s lawyers advising that it intends to replace the current open stormwater system running across its land with a modern stormwater system that connects to the Council’s new stormwater treatment facility. Further, the letter advised that Halswell Prestige would not seek to remove the current easements over its land until it has put in place an alternate stormwater system and substitute easements in favour of the neighbouring properties. It was further noted that the cost of maintaining the new stormwater infrastructure would fall on the Council. The neighbouring property owners were also advised that it was for Halswell Prestige to demonstrate that it met the criteria under s 317 of the Act to successfully remove the easements and that it was not necessary for the neighbouring property owners to take any steps in response to the application unless they wished to do so.

4      Property Law Act 2007, s 317(1)(b).

5      Property Law Act 2007, s 317(1)(d).

6      Pollard v Williams [2019] NZHC 2029, (2019) 20 NZCPR 371.

[10]   One of the neighbouring properties (163A Halswell Junction Road) was, at the time the proceedings were filed, owned by Sandhurst Properties Ltd (the sixth respondent). On 2 August 2021 that property was transferred to a Mr Biggs. Sandhurst Properties Ltd continues to own a neighbouring property at 163B Halswell Junction Road but it is necessary to add Mr Biggs as the twenty-sixth respondent. Mr Biggs has been served with the proceedings and it is appropriate that he be added as a party since he has succeeded to the interests of the former owner in 163A Halswell Junction Road. Without opposition, an order is made joining Mr Biggs as the twenty-sixth respondent.

[11]   No notices of opposition have been filed to Halswell Prestige’s application, nor was there any appearance on behalf of any of the respondents, apart from Fletcher Residential, at the call of this matter. Fletcher Residential has filed a memorandum in support of the application and appeared at its first call to confirm that support.

Decision

[12]   The evidence filed in support of the application shows that the neighbouring properties are serviced for sewer, water, power, telecommunications and access from Halswell Junction Road. The only servicing exception is stormwater, which follows the natural contour away from Halswell Junction Road on to Halswell Prestige’s land. It is reticulated through neighbouring properties by way of a single exit pipe discharging untreated stormwater into a drain that travels across the middle of Halswell Prestige’s land. It is that drain which is protected by the existing easements. The drain is approximately two metres wide but it appears very unkempt with little or no maintenance having been provided to it. As a result, the stormwater drainage system was described as compromised. Stormwater entering the drain does not currently flow but, as previously mentioned, tends to pond on Halswell Prestige’s property.

[13]   I accept that this open stormwater drain was never envisaged as being appropriate for a highly urbanised environment. Halswell Prestige and the Council have now agreed that the existing stormwater from the neighbouring properties should

be upgraded and piped to the newly completed Council stormwater treatment facility. This application will effectively facilitate that improvement.

[14]   I am satisfied that the easements should be extinguished, not only because of the change in use of the burdened land since their creation but also because the proposed modification will not substantially injure any person who presently has the benefit of the existing easements which are now over 50 years old. The present stormwater system is inadequate and no longer functions properly. The replacement system will provide a modern underground system which will be to the benefit of neighbouring properties and allow both Halswell Prestige and Fletcher Residential to subdivide their land and construct further housing in the area. It is not proposed that the current easements will be removed until the replacement stormwater infrastructure is in place and protected by a replacement easement in gross.

Result

[15]Orders in the following terms are to issue:

(a)Deon Frank Srhoy Biggs, of 163A Halswell Junction Road, Christchurch, is joined as the twenty-sixth respondent to this matter.

(b)Subject to paragraph (e) below, Easement Certificate 865897, as registered on Records of Title 186777, 954124, CB13F/339, CB13F/338, CB13F/337, CB23A/1269, CB25A/1185, 457135, 457136, 296372, CB13F/333, CB13F/332, CB13F/331, CB13F/330, CB13F/329, CB13F/328, CB14A/843, CB14A/844, CB13F/326, CB13F/325, CB13F/324, CB13F/323, CB13F/322, CB13F/321, CB14A/156, CB14A/157, and CB25B/1252 (Canterbury Registry), be extinguished.

(c)Subject to paragraph (e) below, Transfer 890313 as registered on Records of Title 186777, 954124, CB13F/339, CB13F/338, CB13F/337, CB23A/1269, CB25A/1185, 457135, 457136, 296372, CB13F/333, CB13F/332, CB13F/331, CB13F/330, CB13F/329, CB13F/328, CB14A/843, CB14A/844, CB13F/326, CB13F/325,

CB13F/324,   CB13F/323,    CB13F/322,    CB13F/321,   CB14A/156,

CB14A/157, and CB25B/1252 (Canterbury Registry) be extinguished.

(d)The above orders are to be entered against each of the above Records of Title by the Registrar-General of Land.

(e)The orders set out at paragraphs (b) to (d) above shall not take effect until a replacement easement in gross to drain stormwater is registered on Records of Title 186777 and 954124 in favour of the Christchurch City Council.

(f)The registered owners of Records of Title 186777 and 954124 will not register the replacement easement referred to in paragraph (e) above on Records of Title 186777 and 954124 until a replacement stormwater system of equivalent or better quality is constructed in accordance with any subdivision consent or resource consent conditions imposed by the Christchurch City Council.

(g)The parties shall have leave to revert to the Court if further directions are required.

(h)There is no order as to costs.

Solicitors:

Duncan Cotterill, Christchurch Saunders & Co, Christchurch