Koko Ridge Limited

[2023] NZHC 1187

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2023-425-24

[2023] NZHC 1187

In the matter of	Part 19 of the High Court Rules 2016 and ss 316-317 of the Property Law Act 2007
And
In the matter of an application by	Koko Ridge Limited

Hearing:	On the papers
Judgment:	18 May 2023

JUDGMENT OF HARLAND J

Introduction

[1]                 The applicant, Koko Ridge Ltd (Koko Ridge), seeks to bring a without notice originating application for orders under ss 316 and 317 of the Property Law Act 2007 (PLA) removing several easements and covenants from land which is to be vested in the Queenstown Lakes District Council (the Council) as a public road for a subdivision.

Background

[2]                 Koko Ridge is undertaking a two-stage residential subdivision of land in Queenstown. It is the registered proprietor of the land contained within RT 522182, described as Lot 1 DP 431492 (East title), and RT 103217, described as Lot 2 DP 325561 (West title). The land contained in the titles abut one another.

KOKO RIDGE LTD [2023] NZHC 1187 [18 May 2023]

[3]                 The subdivision has made considerable progress. Consents have been granted, physical works have largely been completed including installation of services and some roading, and several lots have been pre-sold with some owners beginning construction of residences.

[4]                 A portion of the land will dedicate or vest in the Council as a public road; the eastern portion to be named Kahiwi Drive and the western portion to be named Miro Place.

[5]                 The land is, however, subject to several easements and covenants addressing matters such as water, reverse sensitivity in respect of the airport and parameters for certain construction.

[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); an

(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]But, s 224(b)(i) of the RMA states:

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 consequence of s 224(b)(i), Land Information New Zealand (LINZ) has decided it will not allow parts of the affected land to vest in council or the Crown as roads or reserves until the covenants and easements are removed insofar as they relate to the land intended for the public road.

[10]             Koko Ridge became aware of this position in May 2022, after significant work had already been completed. It seeks without notice orders to remove the covenants and easements from the affected land to avoid the need for the registered proprietors of the dominant land to consent to their surrender for the relevant land. While efforts

have been made under s 115 of the Land Transfer Act 2017 to extinguish the relevant parts of the easements, this process has not progressed materially and is unhelpful in respect of the covenants.

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 where to do so is in the interests of justice. The originating application process is commonly used for these applications.1

[12]             I am satisfied it is appropriate to grant leave. This judgment sets out the reasons for my decision.

[13]Leave is granted.

Without notice

[14]Rule 7.23 of the High Court Rules provides:

7.23 Application without notice

…

(2)An application without notice may be made only—

(a)   on 1 or more of the following grounds:

(i)that requiring the applicant to proceed on notice would cause undue delay or prejudice to the applicant:

(ii)that the application affects only the applicant:

(iii)that the application relates to a routine matter:

(iv)that an enactment expressly permits the application to be made without serving notice of the application:

(v)that the interests of justice require the application to be determined without serving notice of the application; and

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]; Taurikura Holdings Ltd v Tauranga City Council [2022] NZHC 994; and Land Depot Ltd v Friese [2020] NZHC 1085.

(b)   if the applicant has made all reasonable inquiries and taken all reasonable steps to ensure that the application and supporting documents contain all material that is relevant to the application, including any defence that might be relied on by any other party and any facts that would support the position of any other party.

[15]             Koko Ridge has provided evidence indicating that there are several hundred registered titles, not within the titles owned by Koko Ridge, in respect of the covenants and easements relevant to the application. Providing notice to all owners of land relevant to the instruments at issue would be difficult and time consuming, causing undue delay and prejudice to Koko Ridge.

[16]             The material provided to the Court by Koko Ridge satisfies me that subs (b), requiring all reasonable inquiries and steps to have been made and taken to ensure the Court has all the necessary and relevant information before it, is satisfied. The affidavit of Timothy Allan (accompanied by extensive exhibits) sets out the relevant titles as well as the relevant easements and covenants, both to the extent they burden Koko Ridge’s land and how they extend to other titles in the area. The affidavit explains the history of each easement and covenant as well as its relevance to the road to be vested in the Council and the lack of effect of extinguishment on parties carrying the benefit of the covenants and easements.

[17]             Given the stage of development Koko Ridge’s subdivision is at, the relatively late notice Koko Ridge had of the issue at hand, and for reasons that follow concerning the limited effect of dealing with the relevant covenants and easements, I am satisfied it is appropriate to allow this application to proceed on a without notice basis.

[18]             Pursuant to s 316(3) of the PLA, an application for orders under s 317 must be served on the territorial authority unless the Court directs otherwise on an application for that purpose. Koko Ridge has placed before the Court correspondence between it and the Council which confirms the Council does not oppose the application and does not wish to be heard in respect of it.

Analysis

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

…

(f) in the case of a covenant, for any other reason it is just and equitable to modify or extinguish the covenant, wholly or partly.

[19]             I deal with each instrument in turn and outline the orders Koko Ridge seeks in relation to it.

Easement instrument 5820735.7

[20]             The easement, and the various areas over which it provided water conveyance rights, was originally created for the benefit of a planned rural lifestyle subdivision.

[21]             What eventuated was a more intensive residential subdivision known as “the Shotover Country subdivision”. The Shotover Country subdivision was eventually connected to the Council’s reticulated water supply instead of using the water system envisaged and to which this easement relates.

[22]             In regard to the West title, the areas marked “F”, “I”, and “IA” on DP 325561, subject to the easement, no longer convey potable water. The pipework has been decommissioned and is redundant. Rights in respect of the easements for these areas

have been surrendered by adjoining owners, and the Council has indicated the rights are to be cancelled. The areas marked “FA” and “H” are connected to the Council watermain and continue to be used to carry water. Responsibly, Koko Ridge only seeks extinguishment of the easement in respect of areas “F”, “I”, and “IA”.

[23]             In respect of the East title, Koko Ridge seeks a full extinguishment of the easement. The parts of the easement are similarly redundant, not in use, and have had rights surrendered and earmarked for cancellation. That right of way marked “LD” on DP 325561, created by the easement, only benefits the West title owned by Koko Ridge, which consents to its extinguishment

[24]             The easement is registered, on the information provided by Koko Ridge, over just under 600 titles, most of which are part of the Shotover Country subdivision. Requiring any kind of consent process would be arduous.

[25]             The Shotover Country subdivision, and its connection to the Council’s reticulated water supply, has rendered this easement largely redundant. It follows I am satisfied extinguishing it in the manner sought by Koko Ridge will not substantially injure any entitled person and is in the interests of justice.

Easement instrument 8410792.5

[26]             This easement pertains to the East title. It provides for a right to convey water over the area marked “E” and a right to store and convey water over the area marked “F” (DP 384954 / DP 431492).

[27]             The benefitted land, comprising around 60 registered titles, has also substantially become part of the Shotover Country subdivision. The easement rights are presently redundant for the same reasons as are outlined in relation to instrument 5820735.7. No water is being stored or conveyed, and the associated system has been decommissioned.

[28]             I am satisfied the extinguishment of the easement from the East title, as sought by Koko Ridge, is appropriate.

Easement instrument 8678414.5

[29]             This easement provides for the same rights as easement 8410792.5 and is also registered over the East title. For the same reasons outlined above, I am satisfied it is appropriate to extinguish the easement in respect of the East title.

Land covenant in deed 834400.3

[30]This land covenant burdens both the East and West titles.

[31]             The covenant relates to a water scheme whereby water was drawn from a private bore on the north side of State Highway 6. The bore is decommissioned and no water is conveyed within the original scheme’s pipework as it relates to the road to dedicate or vest in the Council.

[32]             Koko Ridge seeks extinguishment of the covenant over the land in the titles insofar as that land will dedicate or vest in the Council as a road.

[33]             The covenant is no longer of any practical effect in respect of the road and will not adversely affect the rights of anyone benefitting from the covenant as a result.

[34]             Clause 12 of the covenant provides that a registered proprietor will only be liable in respect of the covenant if they erect a residence or other building on the land and connect it to the water supply scheme. As this will not apply to the land to dedicate or vest as road, the covenant is redundant to that extent.

[35]             This covenant also relates to several hundred properties, largely within the Shotover Country Subdivision.

[36]I am satisfied that the orders sought by Koko Ridge are appropriate.

Land covenants in deeds 838259.3, 850246.4 and 850246.7

[37]             These covenants relate to the water scheme created by deed 834400.3 and provide an entitlement to a limited domestic water supply as well as indemnity obligations in respect of the scheme created by deed 834400.3.

[38]             For the same reasons as relate to deed 834400.3, I am satisfied it is appropriate to extinguish the deeds from the land contained in East and West titles insofar as that land will dedicate or vest in the Council as a road. The road will not be drawing a domestic water supply.

[39]The deeds are also registered over a large number of titles.

Land covenant in deed 5226852.1 (Airport covenant)

[40]             This covenant concerns the Queenstown International Airport and operates for the benefit of Queenstown Airport Corporation Ltd. The covenant is intended to provide protection to the airport from reverse sensitivity. In short, it provides that the owners of burdened land “occupy and use the buildings … upon the land” at their own risk with respect to disturbance related to the airport, they cannot interfere with or complain about the airport’s activities and may not bring actions against the airport for any activities of the airport, such as claiming damages or nuisance. The covenant applies to the land contained in both titles.

[41]             Koko Ridge seeks extinguishment of the covenant over the land in the titles insofar as that land will dedicate or vest in the Council as a road.

[42]             There will be no buildings for occupation on the road. Further, the Council as owner of the road will have no role in supporting or opposing airport activities outside of exercising its legislative functions. Queenstown Airport Corporation Ltd has consented, through its solicitors, to the removal of the covenant in respect of the land to become road owned by the Council.

[43]             I am satisfied this covenant has no practical effect in respect of the road and extinguishing it is appropriate.

Land covenant in easement instrument 5907860.3

[44]             The covenant concerns the “Ladies Mile Development”, a subdivision intended to include the land at issue. The development did not progress to that stage and was overtaken by the Shotover Country subdivision. The covenant therefore has

a broad geographical application extending substantially beyond the borders of the land at issue and encompassing much of the Shotover Country subdivision, meaning it also relates to a high number of registered titles. The covenant sets out requirements as to the construction of dwellings in terms of materials used, colours, times of construction, heights, and other related matters. It also sets parameters in respect of controlling vegetation and animals as well as the creation of a “residents society”.

[45]             I agree with counsel’s submissions that this covenant does not sensibly apply to areas that are destined to become public road given the lack of dwelling construction on such areas and as the Council will no doubt manage any vegetation and animal issues as they normally would in respect of public roading. Further, granting the orders sought will not prevent the covenant from continuing to apply to the residential lots.

Summary

[46]             I am satisfied the orders sought by Koko Ridge are appropriate pursuant to s 317(1) of the PLA.

Orders

[47]In light of the above findings, orders are made as follows:

(a)        Leave is granted for this application to be brought by way of originating application.

(b)        The application is properly made without notice and service is not required.

(c) Deeds 834400.3, 838259.3, 850246.4, 850246.7, and 5226852.1,

containing land covenants, shall be extinguished from any land contained within Records of Title 103217 and 522182 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road to be owned by the Queenstown Lakes District Council.

(d)      Easement instrument 5907860.3 shall be extinguished from any land contained within Records of Title 103217 and 522182 (Otago Registry)

(including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road to be owned by the Queenstown Lakes District Council.

(e)       Easement instruments 8410792.5 and 8678414.5 shall be extinguished from Record of Title 522182 (Otago Registry).

(f)        Easement instrument 5820735.7 shall be extinguished from Record of Title 103217 (Otago Registry) insofar as it relates to areas “F”, “I”, and “IA” on DP 325561.

(g)      Easement instrument 5820735.7 shall be extinguished from Record of Title 522182 (Otago Registry).

(h)      Leave is granted to apply for a variation of these orders should any issue arise as to their implementation.

Harland J

Solicitors:

Rhodes & Co., Queenstown.