Horncastle Homes Limited - [2015] NZHC 987

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000251 [2015] NZHC 987

IN THE MATTER
of Parts 7 and 19 of the High Court Rules

and sections 316 and 317 of the Property
Law Act 2007

AND IN THE MATTER

of an application by HORNCASTLE HOMES LIMITED, a Company at Christchurch, for an order extinguishing easements

Applicant

Hearing: 8 May 2015 (Determined on the papers)

Counsel:

J M Moran for Applicant

Judgment:

11 May 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] The applicant (Horncastle) applies for orders extinguishing four registered easements created by transfers registered between 1876 and 1881. Each easement creates a right over parts of a parcel of land now owned by Horncastle. Horncastle is in the process of developing the land for residential use by building and transferring to the local authority a roadway, and subdividing the balance of the land. It holds the resource consents which are required for this purpose. It is not possible, however, for the road to vest in the local authority while there are easements over the area that will become the roadway, in favour of other titles. As well, Horncastle wishes to be able to sell the sections it has created without historic easements on the titles which will be issued.

[2] Horncastle seeks leave to commence this proceeding by way of originating application, and for it to be decided on a without notice basis.

Horncastle Homes Limited Application [2015] NZHC 987 [11 May 2015]

[3] Section 316 of the Property Law Act 2007 provides for an application to be made to the Court for an order modifying or extinguishing an easement or a covenant. It provides that an application must be served on the Territorial Authority unless the Court otherwise directs, and must be served on any other persons and in any manner the Court directs, on an application made to the Court for that purpose. In this case, Horncastle applies for an order that the application not be served at all.

[4] The issues raised by Horncastle are suitable for determination by way of originating application, and I grant leave accordingly. I refer to the question of notice in discussion of the orders that are sought.

[5] Section 317 provides, to the extent relevant:

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

(b) the continuation in force…

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

AGLC: Horncastle Homes Limited [2015] NZHC 987
Case: [2015] NZHC 987
Decision Date: 11 May 2015

CaseChat Overview and Summary

The applicant, Horncastle Homes Limited, applied for an order extinguishing four registered easements created between 1876 and 1881. These easements were created in favour of other titles over parts of a parcel of land now owned by Horncastle. Horncastle intended to develop the land for residential use by building and transferring to the local authority a roadway and subdividing the remaining land. However, the easements were an impediment to these plans as they could not vest in the local authority while the easements existed. Horncastle also wished to be able to sell the sections it had created without historic easements on the titles which would be issued. The court was required to determine whether the easements could be extinguished under the Property Law Act 2007. Section 317 of the Act provides that a court may modify or extinguish an easement if it is satisfied that the easement ought to be modified or extinguished due to changes in circumstances since its creation. The court also had to decide whether the application could be decided on a without notice basis.

The court found that the easements were redundant as the watercourse no longer carried water and it was physically impossible for water to flow from the brook into the watercourse. The court was satisfied that the easements should be extinguished as they impeded the reasonable use of the burdened land in a different way from that which could reasonably have been foreseen by the original parties to the easements at the time of their creation. The court also found that there was no need for the application to be served on any other party as the owners of individual allotments which were once contained in the paddocks given the benefits of the easements, could not be affected. The local authority had also granted resource consent and required the removal of the easements from the land which was to vest as road. The court considered that the application could be dealt with without notice to any other party.

The court granted leave for the application to be decided on a without notice basis and ordered that the easements be extinguished. The court deferred making a final order until Horncastle had an opportunity to consider the court's decision and filed a memorandum and draft order, as there may be practical implications in registering an order cancelling the easements entirely.

Orders