Kid Country Te Atatu Ltd v Hoy
[2019] NZHC 988
•10 May 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-001422
[2019] NZHC 988
UNDER ss 339 to 343 of the Property Law Act 2007 IN THE MATTER
of an application for a Partition Order
BETWEEN
KID COUNTRY TE ATATU LIMITED
PlaintiffAND
NICHOLAS ALFRED HOY
Defendant
Hearing: 15-16 April 2019 Counsel:
JC Brabant for Plaintiff
RO Parmenter for Defendant
Judgment:
10 May 2019
JUDGMENT OF DOWNS J
This judgment was delivered by me on Friday, 10 May 2019 at 11 am pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Lewis Lawyers, Cambridge.
Daniel Overton & Goulding, Auckland. JC Brabant, Auckland.
RO Parmenter, Auckland.
KID COUNTRY TE ATATU LTD v HOY [2019] NZHC 988 [10 May 2019]
The case
[1] Kid Country Te Atatu Ltd1 and Mr Nicholas Hoy co-own 1/4 and 4 Waipani Road.2 There are two units on the property, which share a driveway. Kid Country occupies unit 2; Mr Hoy unit 1. The property is governed by a cross-lease, which permits only residential use.3 Kid Country leases a neighbouring property, 2 Waipani Road, from which it operates a childcare centre. Kid Country wants to use unit 2 the same way. Mr Hoy does not want that. The parties have disagreed since at least January 2017.
[2] Kid Country seeks an order dividing the property in two, each being fee simple. If granted, the property would no longer be governed by a cross-lease, and Kid Country would be able to use unit 2 as a childcare centre. Mr Hoy opposes the application. Central is hardship.
Background in brief
[3] Mr Hoy has lived in unit 1 since 1997. Kid Country has operated a childcare centre from the neighbouring property since 2014. Approximately 100 children attend, aged from three months to six years.
[4] Mr David Lowry is a director and shareholder of Kid Country. In late 2016, Mr Lowry learnt unit 2 was to be sold by auction on 16 November, and of the unit’s cross-lease status.
[5] On 4 November 2016, Mr Lowry visited Mr Hoy to discuss Kid Country’s interest in unit 2 as a childcare centre. Recollections of this meeting differ. Lawyers’ correspondence followed. Mr Lowry visited Mr Hoy again on 14 November. Recollections of this meeting also differ. In short, Mr Lowry believed Mr Hoy agreed in principle to Kid Country’s proposed use of unit 2 as a childcare facility.
1 Kid Country.
2 The property.
3 The lease, cl 3. Clause 10 of the lease precludes structural alterations absent consent. Clause 16 protects quiet enjoyment.
[6]Kid Country bid successfully at auction. It bought unit 2 for $850,000. All but
$70,000 of the purchase price was bank-funded. Settlement was in December 2016.
[7] In 2017, Kid Country moved to convert the property to fee simple titles, which obviously required Mr Hoy’s agreement. On 23 January, its lawyers wrote to Mr Hoy’s. On 31 January, they replied, saying Mr Hoy did not wish to “proceed any further with your client’s proposal” in relation to unit 2, but offering to sell unit 1 to Kid Country so it could “have free reign over the present and future use” of both. Mr Hoy’s proposed price was $1,500,000, a figure well above market value.
[8] Subsequent attempts to resolve the dispute are mentioned later. It is sufficient to observe these have been protracted—and unsuccessful.
[9] The property is governed by the Auckland Unitary Plan, and in the Mixed Housing Urban zone. This zone permits some non-residential activities, including childcare facilities for up to 10 children. Larger childcare facilities are a Restricted Discretionary Activity in this zone.
[10] Kid Country applied to Auckland Council to vary the property’s resource consent. Expert reports said there would be little additional noise and traffic-effect “can be accommodated within the site and … adjacent road network without compromising … function, capacity or safety”.
[11] On 22 May 2017, the Council consented to unit 2’s use as a childcare centre for up to 20 children, aged under two years. On 20 March 2018, the Council also consented to the property being subdivided to fee simple lots. Both decisions envisage an overall roll of 120 children, the majority of whom would continue to attend the neighbouring property at 2 Waipani Road.
[12] On 10 July 2017, Kid Country filed this action. It seeks an order dividing the property in kind between it and Mr Hoy, thereby allowing it to use unit 2 in accordance with its resource consent. Additional background is addressed in context of the statutory criteria. So too the parties’ competing recollections of their meetings.
A precis of the competing cases
[13] Kid Country contends an order should be made. It bought the property believing Mr Hoy agreed to its proposed use. Kid Country borrowed heavily to do so. Mr Hoy then changed his mind. The parties are now deadlocked. Kid Country has invested time and money to use unit 2 as a childcare facility. It will suffer hardship unless it does so. Mr Hoy will not suffer hardship if an order is made. Indeed, his unit will appreciate if made fee simple.
[14] Mr Hoy submits an order should not be made. He did not agree to Kid Country’s use of unit 2 as a childcare facility. Kid Country bought knowing—or at least appreciating—there was a real risk he would not agree. Proposed use would cause him hardship. The property’s character would change. There would be more noise and traffic. Mr Hoy would have no effective say over the use of unit 2, or anything else in relation to it. Mr Hoy and his partner would likely move. Mr Hoy also submits an order should not be made to defeat his property rights, especially when the cross-lease contains a dispute resolution mechanism—arbitration.
Principle
[15] Section 339 of the Property Law Act 2007 empowers a Court to order division of property “in kind among the co-owners”.4 The provision envisages division, then allocation of resulting lots between co-owners. The objective is to achieve fairness between them.5 Section 342 articulates relevant considerations. It reads:
342 Relevant considerations
A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:
(a) the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:
(b) the nature and location of the property:
(c) the number of other co-owners and the extent of their shares:
4 Property Law Act 2007, s 339(1)(b).
5 Bayly v Hicks (2011) 13 NZCPR 568 at [25].
(d) the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:
(e) the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:
(f) any other matters the court considers relevant.
[16]Related discretion is “broad”.6
[17] The parties cited cases under s 342 and other decisions too. Citation is unnecessary. The issue is not whether other cases are apparently similar, but whether the facts of this one warrant an order given the principles above.
Analysis
Section 342(a): the extent of the share in the property of any co-owner
[18] Mr Hoy is a co-owner as a tenant in common. He holds a half-share of the fee simple estate. The division proposed by Kid Country respects this, and existing boundaries of the cross-lease. Kid Country and Mr Hoy agree this criterion is neutral.
Section 342(b): the nature and location of the property
[19] As observed, Kid Country operates an existing childcare centre next door. It submits this feature exerts “a strong influence” on the property and constitutes “a distinguishing characteristic” of its application. Auckland Council considered the nature of the property when agreeing to subdivision, all of which, Kid Country argues, provides modest support for partition.
[20] Mr Hoy contends this criterion is also neutral, while accepting nothing about nature or location “would prevent the making of the partition order”.
[21]I prefer Kid Country’s analysis for the reasons it gives.
6 Bayly v Hicks [2012] NZCA 589, [2013] 2 NZLR 401 at [25].
Section 342(c): the number of other co-owners and extent of their shares
[22] Kid Country submits there is a “subtle distinction” between this criterion and subs (a), as there is only one “other” co-owner, Kid Country, who owns a half-share of the fee simple estate. This provides modest support for the application as impact would be confined.
[23] Mr Hoy contends “if the s 342(a) consideration is neutral, so should this consideration be neutral”.
[24]Again, I prefer Kid Country’s analysis for the reasons it gives.
Section 342(d): hardship that would be caused to [Kid Country] by the refusal of the order, in comparison with the hardship that would be caused to [Mr Hoy] by the making of the order
[25] Hardship in this context has been described “as a value laden criterion”,7 and as requiring assessment “in the round”.8 I consider the statute intends the term be used in its usual sense, with one refinement: the statutory concern is comparative hardship. The Court must consider the hardship that would be caused to the applicant if an order were not made, “in comparison with” the hardship that would be caused “to any other person” if an order were made. The latter obviously encompasses those opposing the order, but is potentially broader.
[26]Kid Country and Mr Hoy agree hardship is central.
[27] Mr Lowry said Kid Country had suffered “significant hardship” from not being able to use unit 2 as anticipated. Most of the purchase price came from the bank, and Kid Country has not generated any income from the unit. The company cannot mitigate its loss by renting the unit as a restrictive banking covenant treats it as “under development”. This covenant is part of Kid Country’s “overall banking arrangements and cannot be amended for this property alone”. Kid Country has paid the loan for more than two years without related income. For this reason, loan repayments are
7 Holster v Grafton (2008) 9 NZCPR 314 at [50].
8 Bayly v Hicks, above n 5, at [61].
interest only. These are between $3,600 and $4,000 monthly. Absent income, they have been met by shareholder advances of approximately $130,000.
[28] Kid Country anticipated unit 2 would be sold once developed and the loan repaid (in this scenario, Kid Country would lease the unit from its owner). Obviously, this has not occurred. Mr Lowry said this financial commitment has “a significant opportunity cost”. Sale now would likely yield a loss. Development costs thus far would be wasted.
[29] Clients of the existing centre wish to enrol their younger children in the proposed one. A waiting list exists for all 20 spaces. Each child generates $5,000 net income per year. Mr Lowry said Kid Country is losing net income of $100,000 each year.
[30]Materially, none of this evidence was contested.
[31] Mr Hoy said if an order were made, associated development “would destroy the essential residential nature” of the property, and he would be “living in a boxed in corner surrounded by a modern, acoustically fenced and expanding commercial enterprise”. This is Mr Hoy’s “major concern”. Others are traffic and noise.
[32] Mr Hoy said traffic would increase. Resulting congestion would be “a nightmare”. Mr Hoy is troubled “anxious new mums and dads dropping off their bundles of joy … in a mad rush to get to work” will not be prepared to park other than adjacent to the centre, in turn compromising access. Mr Hoy said he disputes the expert traffic report relied on by the Council “in the most violent terms”.
[33] Mr Hoy said noise would increase—and reach his home from another direction. This would be “most unwelcome”.
[34] Mr Hoy accepts subdivision would increase the value of his unit. However, associated development would incline him to sell it, which he does not want to do. Mr Hoy has lived here contentedly for many years.
[35] I do not doubt the sincerity of Mr Hoy’s concerns. But, I do consider them exaggerated.
[36] As observed, expert reports were given to the Council in relation to both noise and traffic. These were admitted by consent. The former concluded, “Overall, the noise levels will remain unchanged relative to the noise from the existing childcare centre at 2 Waipani Road.” Mr Hoy did not accept this conclusion. However, Mr Hoy acknowledged he had no expertise in this area, and offered no contrary report.
[37] The proposed centre would have only 20 more children. And, like the existing one, would operate only on weekdays during business hours. There would be no noise in the evenings or weekends, or during public holidays.
[38] The latter concluded additional traffic “can be accommodated within the site and … adjacent road network without compromising … function, capacity or safety”. Again, while Mr Hoy disputed this conclusion, he has no relevant expertise and no contrary report. There would be no additional traffic—indeed no associated traffic— on evenings, weekends and public holidays. And, Mr Hoy acknowledged in evidence “I don’t care about the number of children or the noise really”.
[39] Mr Hoy’s primary concern—adverse effect on residential character—needs to be assessed in context. In cross-examination, Mr Hoy said he would not want a three- storey residential building next to him, a property-type permissible in this zone, or any supported residential care, a permissible in-zone activity. Mr Hoy expressed “firm opposition to any activity occurring on [the] site, other than residential use of the house, essentially in its current form”. This view is entirely defensible, but obviously animates Mr Hoy’s opposition.
[40] The proposed centre would entail little physical change to the unit beyond the addition of a deck and double glazing. Associated car parking would be accommodated by the existing centre, save for three staff car parks in front of unit 2. These would not be visible to Mr Hoy in unit 1.
[41] Consequently, I do not accept an order would “destroy” the property’s residential nature, or cause hardship in relation to noise or traffic. Mr Hoy’s hardship is thus confined to diminution of his longstanding enjoyment of unit 1 and related inability to control—through mechanism of the cross-lease—use of unit 2.9 The latter is a two-edged sword as Mr Hoy would not answer to unit 2’s owner if the property were subdivided. All of which is to say Kid Country would suffer appreciably more hardship by the refusal of an order than Mr Hoy by the making of one.
Section 342(e): the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property
[42] The parties agree this criterion is neutral; no relevant contributions were identified.
Section 342(f): any other matters the court considers relevant
[43] Kid Country contends events before its purchase of the property are relevant: it bought the property reasonably believing Mr Hoy had agreed, in principle, to its use of unit 2 as a childcare centre. Mr Hoy argues he did not and Kid Country is the author of its own misfortune.
[44] The point is factual. It turns on what happened at two meetings before the purchase, a third after it, and related correspondence.10 Before examining the evidence, it is important to be clear we are not here concerned with a binding legal agreement; no one suggests that. Rather, what is in issue is Kid Country’s state of mind in consequence of Mr Hoy’s alleged representations, apparent acquiescence, or both.
The meeting on 4 November 2016 – Mr Lowry’s account
[45] Mr Lowry said he approached Mr Hoy at his home, explained Kid Country was “looking to expand”, and asked Mr Hoy if he had “any issue with … us putting an
9 Kid Country argued loss of control cannot constitute hardship and is instead a factor under s 342(f) (“any other matter”). I consider this aspect is better understood as hardship, at least on these facts, because Mr Hoy’s concerns stem from his inability to control unit 2’s use under a fee simple estate.
10 For this reason, I made an oral examination order in relation to the meetings; see Minute (No 2) of 12 April 2019.
infant centre in the front house”. Mr Hoy said he wanted to be “a good neighbour” and saw “no issue with … this”. Mr Lowry explained the unit would not be altered, save for possible installation of double glazing. Mr Lowry also explained the fence between the units would need “acoustic treatment” to minimise noise. Mr Lowry asked Mr Hoy if he would accept Kid Country “having a resource consent for 20 or 25 children”. Mr Hoy said he liked the idea “of having you guys next door”. Mr Lowry said Kid Country’s lawyers would draft an agreement and send it to Mr Hoy’s lawyers “in the next few days”. A handshake concluded the brief meeting, which occurred outside.
Mr Hoy’s account
[46] Mr Hoy said Mr Lowry referred to Kid Country’s proposal as “slumber care” for children not older than 18 months. Mr Hoy thought “Oh God”; he was taken aback at the idea of “infants being dropped off to day-care”. Mr Hoy did not object—but did not agree either. Absent detail, “there was nothing to object to”. Mr Lowry did not ask Mr Hoy for a decision, and Mr Hoy did not give one. Mr Hoy considered he was “being schmoozed” by an experienced business person.
The meeting on 14 November 2016 – Mr Lowry’s account
[47] Mr Lowry said he returned to Mr Hoy’s home as the auction was only two days away. Mr Hoy invited him inside. Mr Lowry said to Mr Hoy he understood Mr Hoy agreed in principle to Kid Country’s proposed use, but he was still waiting for Mr Hoy’s lawyers to “come back” to Kid Country. Mr Hoy explained he had been away. Mr Lowry asked Mr Hoy if he had “any issues” with Kid Country’s proposal. Mr Hoy did not identify any, albeit he was unpersuaded about the merit of subdivision. Mr Hoy did not believe his property would appreciate. Mr Lowry left documents for Mr Hoy to sign, which Mr Hoy “was happy with”.
Mr Hoy’s account
[48] Mr Hoy had little recollection of detail. He described Mr Lowry as forceful and confrontational, and said he was “appalled” at Mr Lowry’s approach. Mr Hoy said the “only thing I do definitely remember was … as he left I thought man that was
the most unpleasant thing I’ve had in a long time, I hope it never happens again”. Mr Hoy did not elaborate.
The meeting on 25 May 2017
[49] Mr Paul Hamlyn is also a director and shareholder of Kid Country. He and Ms Christie Bradley—a manager at Kid Country—met Mr Hoy at unit 2 (Kid Country’s unit). Mr Hamlyn said to Mr Hoy he understood Mr Hoy had agreed to Kid Country using the unit as a childcare centre. Mr Hoy said, “he did at the time”, but had “changed his mind”. Mr Hamlyn asked why. Mr Hoy said he was concerned about noise and “really didn’t want it there”. Mr Hamlyn explained the noise would not be significant. He identified solutions to Mr Hoy’s concerns. Mr Hoy said “he had no real issues” with the existing childcare centre, which he considered a better neighbour than the previous one. Mr Hamlyn said it “didn’t make sense” for Kid Country to buy Mr Hoy’s unit for $1.5 million, given this was well above market value. Mr Hoy said his price “was a negotiating point”. The conversation was friendly but ended because Mr Hoy “wasn’t interested in anything”.
[50] Mr Hoy accepted Mr Hamlyn’s account except for one aspect: Mr Hoy had no recollection of ever agreeing to the proposal; he had “always been against it”. For this reason, Mr Hoy said he did not refer to having changed his mind. Mr Hoy said Mr Hamlyn might have misunderstood this aspect, confusing it for Mr Hoy’s acceptance of Kid Country’s existing centre.
Findings
[51] I find Mr Hoy offered apparent agreement to Kid Country’s proposed use of unit 2 as a childcare centre, and Kid Country reasonably believed it had such agreement when it bought the unit at auction on 16 November 2016.
[52] First, I accept the evidence of Mr Lowry, Mr Hamlyn and Ms Bradley, which dovetails. Second, their evidence is consistent with lawyers’ correspondence between 7 and 14 November 2016:
(a)On 7 November, Kid Country’s lawyers wrote to Mr Hoy noting, “we understand you have agreed to the company operating, lodging resource consent for a 20 licence childcare centre”. The letter enclosed a deed consenting to a variation of the cross-lease and resource consent application.
(b)On 11 November, Mr Hoy’s lawyer responded. The letter began with an acknowledgement Mr Hoy “agreed in principle to the proposed use of Unit One, 4 Waipani Road by your client as a childcare centre”.
(c)Only then were qualifications expressed. The letter continued: “the devil is in the detail”; Mr Hoy would not be bound until a written agreement was executed; but he would “consider” a variation to the cross-lease, permitting a childcare centre for children aged 18 months and younger.
(d)Kid Country’s lawyers replied with a succession of emails. Mr Hoy’s lawyers did not respond before the auction. This is consistent with Mr Lowry’s meeting with Mr Hoy on 14 November and related testimony he understood Mr Hoy had agreed in principle to Kid Country’s proposed use, but was still waiting for Mr Hoy’s lawyers to “come back”.
[53] Third, the evidence of Mr Lowry, Mr Hamlyn and Ms Bradley is consistent with Mr Hamlyn’s letter of 25 May 2017 to Mr Hoy, in which Mr Hamlyn recorded events to that point. Material aspects are italicised:11
Dear Nick,
….
David spoke to you before the auction of the property in front of yours and you said you couldn’t see any issue with it being a baby’s centre. Following on from this we purchased the property with the intention of implementing this plan.
11 Emphasis added.
During our discussion you indicated that you now have had some concerns regarding your privacy etc.
It’s probably worth noting at this point that if the plan were to proceed then the actual layout of the house would change very little externally. Most of the modifications would be to the exterior view of the house, replacing the windows and doors with new Aluminium joinery, painting and possibly extending the deck a little. We would also replace the garden shed that the previous owner removed prior to us taking over the property.
During our discussion, you indicated that you were very happy living in your house, you liked the area and didn’t want to move. We understand this and have no intention of seeking otherwise.
I suggested that we could separate the cross-lease titles into 2 unit titles. This would be at no cost to yourself and would include the upgrade of the driveway entrance and whatever the council requires for the services. You commented that you were happy with the cross-lease situation.
….
[54]Fourth, Mr Hoy accepted the accuracy of this letter.
[55] Fifth, Mr Hoy did not express unequivocal opposition to the proposed usage until 31 January 2017, by which time Kid Country had bought the unit (settlement was in December 2016). On 23 January 2017, Kid Country’s lawyers wrote to Mr Hoy’s “again seeking your client’s consent to my client operating a childcare centre on the property for up to 25 children under the age of two years”. Kid Country offered to pay all related costs. The 31 January reply said, “Our client has decided not to accept your client’s offer or proceed any further with your client’s proposal.” Materially, Mr Hoy and Kid Country had not communicated since the 14 November meeting, and Mr Hoy accepted in cross-examination he did not voice opposition at that meeting (or at the earlier one on 4 November).
[56] Sixth, Mr Hoy’s contrary testimony—that he never offered apparent agreement— is inconsistent with the threads discussed thus far, and:
(a)Mr Hoy’s inertia. Mr Hoy said he was “appalled” by Mr Lowry’s conduct at the 14 November meeting, and this was “the most unpleasant thing” he encountered “in a long time”. However, Mr Hoy did not raise
this concern in his lawyers’ letter of 31 January 2017—or earlier.12 Instead, Mr Hoy sought $1.5 million for his unit, a position he later described as “a negotiating point”.
(b)His own testimony. Two examples should suffice:
(i)In cross-examination, Mr Hoy said when Mr Lowry referred to acoustic fences on 14 November, “that was a turning moment for me” (because Mr Hoy did not wish to live behind a fence of that type).13 When I asked Mr Hoy how this could be reconciled with his evidence he never agreed to Kid Country’s proposed use, Mr Hoy said he was “still reasonably open minded to that point”.
(ii)Mr Hoy accepted he did not voice opposition at the 14 November meeting. Mr Hoy said he did not do so because his position was already captured by his lawyers’ letter of 11 November. I accept Kid Country’s submission this is “somewhat disingenuous” as Mr Hoy must have known Mr Lowry was seeking to ensure Mr Hoy agreed in principle: the auction was only two days away, and this was the point of Mr Lowry’s visit. Mr Lowry had no other reason to see him. Moreover, the 11 November letter referred to an in-principle agreement.
[57] For these reasons, I do not accept Mr Hoy’s submission Kid Country bought unit 2 knowing there was a real risk disagreement about use may thwart its intentions. True, Mr Lowry accepted in cross-examination some risk remained absent a written, legally binding agreement. The concession was realistic; absent such an agreement, Mr Hoy was at liberty to insist on his rights under the cross-lease. However,
12 Mr Hoy did not raise the point until 14 June 2017, and then, obliquely only. A letter from his lawyers that day concluded, “To summarise, our client wishes to continue living in his residential home without threats, annoyance, grievance or disturbance from your clients.”
13 Mr Hoy said these were first discussed on 14 November 2016. Though it matters not, I prefer Mr Lowry’s evidence he raised this topic 10 days earlier. Mr Lowry had a much clearer recollection of events.
Mr Lowry—and hence Kid Country—reasonably apprehended Mr Hoy agreed in principle to unit 2’s use as a childcare centre before it bought the unit, and Mr Hoy expressed unequivocal opposition only thereafter.
[58]The mix favours subdivision.
[59] Kid Country also contends the fact of an impasse provides support for its application. Mr Hoy disagrees. He observes the cross-lease contains an arbitration mechanism, which has not been utilised. It is therefore artificial for Kid Country to advance this submission.
[60] I disagree. At the meeting on 25 May 2017, Mr Hamlyn raised the possibility of alternative approaches. For example, he suggested unit 2 be used as carpark to service the existing centre (next door). None was acceptable to Mr Hoy. For more than two years, correspondence between the parties has been exclusively through lawyers.
[61] Disagreement has since spilled to other areas. The driveway needs to be repaired. A structure in relation to Mr Hoy’s unit is not on the plans, and Kid Country does not agree to it. Trees are contested. There is no reason to believe arbitration would resolve any of the parties’ differences, let alone their primary one. Cooperation—or at least some give and take—must inform a viable cross-lease arrangement. Neither is foreseeable.
[62]This factor also favours subdivision.
[63] This leaves one argument. Mr Hoy submits “there is a significant risk … the remedial powers contained in the Property Law Act are being used, overmuch, to extinguish significant property rights”. And, his case should resist this trend. The answer to this submission is the statute itself, as ss 339 and 342 of the Property Law Act confer a broad discretion for orders, in appropriate cases, affecting property rights in relation to land. Which leads to the important question: is this an appropriate case?
[64] I am satisfied it is. Kid Country would suffer appreciably more hardship from refusal of an order than Mr Hoy by the making of one. Kid Country bought the unit reasonably believing Mr Hoy agreed to its use, for which it now has resource consent. The parties are at an impasse, a position incompatible with a cross-lease. The remaining statutory criteria provide modest support for an order or are neutral. This is a reasonably obvious—albeit not self-evident—case for statutory variation of property rights.
Result
[65]I grant Kid Country’s application.
Orders
[66]I order:
(a)Lot 40 DP 42139 be divided in kind among Mr Hoy and Kid Country.
(b)Division be consistent with Kid Country’s existing resource consent: SUB60314525.
(c)With Kid Country’s consent, it pays for the survey; legal; and LINZ expenses which result “from giving effect”14 to (b). So too “road crossing and driveway upgrade works”.15
Costs
[67] I am inclined to award Kid Country 2B costs. If the parties disagree, they may submit memoranda of not more than four pages:
(a)Kid Country by Friday, 31 May 2019.
14 Kid Country’s opening submissions at para 104.
15 As above.
(b)Mr Hoy by Friday, 7 June 2019.
……………………………..
Downs J
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