Kriechbaum v Jyron Investments Limited
[2015] NZHC 2420
•15 September 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-002144 [2015] NZHC 2420
BETWEEN JUNE ESTHER KRIECHBAUM
Plaintiff
AND
JYRON INVESTMENTS LIMITED Defendant
Hearing: 15 September 2015 Appearances:
A Sorrell for Plaintiff
D J Chisholm QC for DefendantJudgment:
15 September 2015
Reasons:
6 October 2015
JUDGMENT OF GILBERT J
This judgment is delivered by me on 6 October 2015 at 1.00 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
KRIECHBAUM v JYRON INVESTMENTS LTD [2015] NZHC 2420 [15 September 2015]
Introduction
[1] This proceeding arises out of a dispute between the respective owners of adjoining residential properties concerning a right of way. The plaintiff, Ms Kriechbaum, is the registered proprietor of a single dwelling property at
45 Benson Road, Remuera, Auckland. This property has an area of some 3,009m2 and is comprised in three lots. The defendant, Jyron Investments Ltd, is the registered proprietor of a single dwelling property at 37 Benson Road comprising some 560m2. Ms Kriechbaum contends that the benefit of the right of way easement registered against the title to 37 Benson Road attaches to all three lots comprising
45 Benson Road. Jyron contends that the easement is appurtenant to only one of these lots, Lot 2 DP194543 comprising some 100m2.
[2] Ms Kriechbaum and her late husband previously owned both properties. In
1998, they obtained permission to take 100m2 from the title to 37 Benson Road and amalgamate it with the title to the property at 45 Benson Road. The Kriechbaum’s utilised the procedure available under s 90A of the Land Transfer Act 1952 to create the required easements, including the right of way easement.1 They executed an easement certificate in the prescribed form which required the identification of the nature of the easement and the servient and dominant tenements. The servient tenement for the purposes of the right of way easement is stated to be Lot 1 DP
194543. This is the land at 37 Benson Road. The dominant tenement is stated as Lot 2 DP 194543. This is the 100m2 lot that is one of the three lots at 45 Benson Road. The other two lots at 45 Benson Road are Lot 2 DP 57703 and Lot 1 DP
44821. Neither of these lots is referred to in the easement certificate or on the titles.
[3] The title to the land at 37 Benson Road (NA123B/16) now has the following interest noted on it:
D384902.4 Easement certificate affecting Lots on DP 194543
NATURE SERVIENT
LAND
DOMINANT
LAND
Sanitary 2-A 1 Sewage Right of way 1-B 2 CT 123B/17
Stormwater 1-B 1 drainage,
Telephone,
Power, Gas and Water
The above sanitary, sewage and right of way easements will be subject to
Section 234(a) Resource Management Act 1991 when created – 5.5.1999 at
9.42
[4] The title to the land at 45 Benson Road (NA123B/17) has the following relevant interest noted:
Appurtenant hereto is a right of way and stormwater drainage, telephone, power, gas and water rights specified in Easement Certificate D384902.4 –
5.5.1999 at 9.42 am (affects Lot 2 DP 194543)
[5] On the face of these documents, it appears that the right of way easement is appurtenant to Lot 2 DP 194543 only, not the other two lots. Nevertheless, Ms Kriechbaum has contended for some time that the right of way was intended to benefit all three lots. She raised this with earlier owners of 37 Benson Road in 2012. They obtained an opinion from their legal advisors, Russell McVeagh, which concluded:
We are aware that in recent times the owner of 45 has suggested that both Lot 2 and the Remainder have the benefit of the ROW. In our view this is patently wrong and unsupported by the express terms of the Easement and the law.
[6] Ms Kriechbaum is now residing in care and two of her children are assisting in the management of her affairs. Ms Kriechbaum’s daughter attended an open home promoting the sale of 37 Benson Road. The real estate agent advised that the right of way over 37 Benson Road served a lot of 80m2 only.2
[7] This prompted the filing of the present proceeding seeking a declaration as to the scope of the rights conferred by the right of way easement. At the same time, Ms Kriechbaum applied for an interim injunction in the following terms:
That the defendant not enter into a contract for sale of 37 Benson Road Remuera without first informing the intending purchasers in writing that there is a dispute between the plaintiff and the defendant as to the scope of the easements over 37 Benson Road and appurtenant to 45 Benson Road and partly described in Easement Certificate D384902.4 whereby the plaintiff asserts the easements attach to the entire 3009m2 more or less known as
45 Benson Road, Remuera, presently comprised in Certificate of Title
Identifier 585224 and the defendant asserts those same rights only attach to some 80m2 of that same land.
[8] Jyron opposed Ms Kriechbaum’s application for an interim injunction and made its own application for an interim injunction to restrain her from utilising the right of way for obtaining access to any part of 45 Benson Road other than Lot 2. This application was prompted by the fact that over the weekend of 12 and 13
September 2015, works commenced on Lot 2 to form a driveway to facilitate access to the other lots at 45 Benson Road.
[9] Ms Kriechbaum’s application had to be heard urgently in the Duty Judge List on 15 September 2015 because Jyron’s property at 37 Benson Road was due to be offered for sale at auction the following day. At the conclusion of the hearing at about 5.00 pm, I dismissed Ms Kriechbaum’s application and said that I would give brief reasons for doing so later.
[10] Since the hearing, I have been notified that the property did not sell at auction but that the parties have been able to reach agreement on suitable undertakings from Ms Kriechbaum obviating the need to determine Jyron’s cross-application for an interim injunction. These undertakings have now been filed with the Court.3 This means that all that is now required is for me to summarise briefly my reasons for dismissing Ms Kriechbaum’s application for an interim injunction. I set these out
below.
Legal principles
[11] The legal principles applicable to an application for an interim injunction are well settled. There must be a serious question to be tried in the proceeding and the
balance of convenience must favour the grant of the injunction. Ultimately, an
3 The undertakings are dated 17 September 2015 and are attached to the defendant’s memorandum dated 21 September 2015 which has been signed by the plaintiff ’s solicitor and counsel for the defendant.
injunction should be issued if the Court is persuaded that this is the course most likely to serve the interests of justice in all the circumstances.
Is there a serious question to be tried?
[12] Mr Sorrell submits that because Lot 2 DP 194543 is only 100m2 in area, it cannot be built on or used for any purpose independently of the balance of the land at 45 Benson Road. For this reason, he argues that the Kriechbaums, who owned both properties at the relevant time, must be taken to have intended that the right of way would serve the whole of the land at 45 Benson Road, not just Lot 2 DP 194543. He submits that, properly interpreted, the dominant tenement under the right of way easement is all of the land in CT123B/16, namely, Lot 2 DP 194543, Lot 1 DP 44821 and Lot 2 DP 57703. He contends that this is the “common sense” interpretation taking into account the context in which the easement was created. While Mr Sorrell argues that this interpretation is clear from reading the titles and the easement certificate, he says that further relevant contextual material may be available at trial to assist the interpretative exercise. For that reason, he submits that no concluded view can be reached at this stage, even though the dispute is confined to a question of interpretation of legal instruments.
[13] I accept that it is neither necessary nor appropriate to express any concluded view at this preliminary stage of the proceeding and that further relevant information may be available at trial.4 However, based on the evidence before me, I consider that Ms Kriechbaum’s claim faces formidable obstacles. The documents clearly show that the dominant tenement for the purposes of the right of way easement is Lot 2 DP
194543 and does not include Lot 1 DP 44821 or Lot 2 DP 577703 which had separate, legal and formed access to Benson Road prior to the subdivision.
[14] On the evidence presented, Ms Kriechbaum’s claim is barely arguable, if at all. For the reasons given in the next section of this judgment, I concluded that the injunction had to be declined because of balance of convenience considerations in
any event. I therefore did not need to determine whether Ms Kriechbaum had
4 The extent to which extrinsic evidence is admissible to assist in interpreting instruments registered against a title is not yet settled in New Zealand.
established that she has a seriously arguable case. Had that been critical to my decision, I would have hesitated before concluding that she had done so.
Where does the balance of convenience lie?
[15] An applicant for an interim injunction is generally required to show that they will suffer irreparable harm that cannot be adequately compensated by an award of damages if the injunction is not granted. The only evidence put forward by the plaintiff to address this issue is the following paragraph in the first affidavit of Christopher Kriechbaum, sworn on 11 September 2015:
My sister and I are concerned that the interests of my mother and ultimately the wider family will be compromised if intending purchasers are not aware of these disputes.
[16] Mr Kriechbaum did not explain how his family’s interests could be compromised if prospective purchasers are not made aware of the dispute. Nor could Mr Sorrell advance any cogent argument to support this assertion. Given that the dispute is purely one of interpretation of documents on the register, I fail to see how the Kriechbaum family could be affected by a purchaser acquiring
37 Benson Road in ignorance of the present dispute. Mr Sorrell responsibly conceded that the correct legal interpretation of these documents cannot depend on the view taken by a purchaser of the property at 37 Benson Road or be affected by whether they purchased without knowledge of the dispute.
[17] Mr Sorrell then submitted that prospective purchasers are likely to want to know that there is a dispute about the rights conferred by the right of way easement so that they can take their own advice about it. However, prospective purchasers are able to take their own advice as to the meaning and legal effect of the right of way easement and should do so. They are unlikely to be assisted by knowing that Jyron disagrees with Ms Kriechbaum’s interpretation of the easement. The possibility of harm to a prospective purchaser who fails to take competent legal advice before committing to a purchase does not justify granting a mandatory interim injunction to Ms Kriechbaum. Her position will not be affected either way.
[18] In short, Ms Kriechbaum has not established that she will suffer any harm, let alone irreparable harm that cannot be adequately compensated by an award of damages, if the injunction is not granted.
[19] There are further reasons why the injunction should not be granted. The property at 37 Benson Road has been on the market for some time. Interested purchasers were likely to have completed their due diligence enquiries. No useful purpose would be served by requiring Jyron to notify them of the dispute at such a late stage prior to the auction. If such an order was made, it could well have created real difficulties for Jyron in its efforts to sell the property. The balance of convenience is heavily in favour of Jyron.
[20] There were also practical difficulties with the form of the order sought given the requirement for written notice to be given before any agreement was concluded. The terms of sale would have been settled well in advance and made known to prospective purchasers. Some bidders might attend the auction using an agent or by telephone. Any written notice would need to be given before the auction commenced because the parties would be bound at the fall of the hammer. Mr Sorrell was not able to provide a practical solution to these difficulties.
[21] Delay is a further factor weighing against the grant of an injunction in this case. The easements were registered against the titles 16 years ago. There have been six subsequent purchasers of 37 Benson Road since that time. Ms Kriechbaum has known for some time that her view of the correct interpretation of the easement is disputed. Despite this, she delayed issuing this proceeding until a few days before the property was due to be offered for sale at auction. She must have been aware that the property had been on the market for some time and that any delay in seeking an injunction would be likely to cause significant disruption to the sale process.
Conclusion
[22] The plaintiff’s claim is weak and faces considerable obstacles.
[23] The plaintiff has not shown that she will suffer any harm if the injunction is not granted. If Ms Kriechbaum’s interpretation of the easement is correct, any
purchaser of 37 Benson Road will be bound accordingly, irrespective of its interpretation and whether it purchased with notice of the dispute.
[24] The balance of convenience is weighted heavily in favour of Jyron. The injunction would serve no useful purpose but would be likely to cause significant inconvenience and potential harm to Jyron.
Result
[25] The plaintiff’s application for an interim injunction was dismissed for these reasons.
M A Gilbert J
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