Land Depot Limited v Friese
[2020] NZHC 1504
•30 June 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-000198
[2020] NZHC 1504
UNDER the Property Law Act 2007 IN THE MATTER
of an application to extinguish a covenant
BETWEEN
LAND DEPOT LIMITED
Applicant
AND
FRANZISKA JOHANNA FRIESE
First Respondent
AND
PHILIPPA MAY ADAMS and STANLEY CHARLES BAKER
Second Respondents
AND
GRANT NOEL BRIGHT and KAREN ANN NICHOLAS
Third Respondents
AND
DEANNE LEA DOWDING and MALCOLM LESLIE DOWDING
Fourth Respondents
AND
ANNE ILES and PETER GRANT ILES
Fifth Respondents
AND
CAROL AGNES ROBINSON, TONY DEAN ROBINSON and SUSAN MARY TODD
Sixth Respondents
AND
LINDSAY WILLIAM WELCH and MARILYN THERESE WELCH
Seventh Respondents
AND
DIANE OLIVIA ROLTON and VERNON CLAUDE ROLTON
Eighth Respondents
AND
DAVID CHARLES BENBOW
LAND DEPOT LIMITED v FRIESE [2020] NZHC 1504 [30 June 2020]
Ninth Respondent AND
LORRAINE ANGELA BOYCE
Tenth Respondent
AND
CAROLE KAY GAINS and PAUL RICHARD MARK GAINS
Eleventh Respondents
AND
WATTS ROAD INVESTMENTS LIMITED
Twelfth Respondent
Hearing: 29 June 2020 Counsel:
J M Pow and J A Higby for Applicant
Judgment:
30 June 2020
JUDGMENT OF MANDER J
This judgment was delivered by me on 30 June 2020 at 3 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar Date: .
[1] Land Depot Ltd (Land Depot) applies to extinguish a covenant pursuant to ss 316 and 317 of the Property Law Act 2017 (the Act).
Background
[2] In November 2019, Land Depot became the registered owner of a property situated at 458 Sparks Road, Halswell, Christchurch (the property).1 The property is subject to a covenant which was registered on 27 June 1907.2 The covenant requires the owner of the property to:
... keep open and clean from all rubbish, weeds and obstructions of all kinds the drains shown on the said plan running through the said [lot] and will keep the said drains clean and in good working order so that the same may act efficiently in draining all the land shown on the said plan intended to be drained thereby.
[3] The covenant to which the property is subject is some 113 years old. At the time of its creation the surrounding land was undeveloped and consisted of large tracts of bare land with no water drainage infrastructure or development. The drain on the property is an open drain that is often referred to as a “swale”. There is no infrastructure or piping associated with the drain.
[4] Over the years various subdivisions and developments have taken place. These have resulted in new records of title being issued and the creation of new lots. Many of those new titles have included the covenant despite the new lots created by the subdivisions being far removed from the actual location of the open drain and it being of no practical utility to those properties.
[5] In February 1988 an easement in gross was granted in favour of the Christchurch City Council (formerly the Christchurch Drainage Board).3 This easement protected the functional open drains in the area by allowing the Christchurch City Council to take and carry water along those drains and access the easement areas to maintain them as required. The easement has provided protection to those parts of the drain recorded in the covenant over the affected properties which remain in use,
1 Legally described as Lot 1 on Deposited Plan 68682 contained in Record of Title CB40A/672.
2 The covenant was contained in Transfers 75370 and 75371.
3 The easement was created by way of Memorandum of Transfer 123743.4 over the areas marked A, B, C and D on Deposited Plan 52374.
and upon which a number of properties still rely and use as part of their surface water drainage systems.
[6] Notably, however, the part of the drain that lies on the property is not subject to the easement in gross. No part of the easement in gross is over that part of the drain that is on the property. Mr Philip Rance, a director of Land Depot, has affirmed that the reason for this is because the drain is no longer required by the Christchurch City Council or any adjacent property to ensure effective surface water drainage. The drain on Land Depot’s property is now redundant, otherwise the easement in gross would have extended over the length of the drain on the property.
[7] It follows, on Mr Rance’s evidence, that the part of the drain on his company’s property is of no benefit to any adjacent property. None of those properties in respect of which the covenant is recorded on their titles needs to use or rely on the drain that runs over Land Depot’s property to collect and convey water from and away from their property. The covenant is said, for all practical purposes, to be redundant as no other neighbouring property having its registered benefit now uses or relies on the drain, whether to convey water from their properties or for any other reason. Those properties’ surface water is collected and conveyed by other drains not located on the property and are now protected by the easement in gross obtained by the local council in 1988.
The application
[8] Land Depot intends to develop and subdivide the property. However, it is alleged that the covenant may unreasonably impede that development if it were to remain in place. It may prevent any development of new lots over that part of the property on which the drain exists. Furthermore, if it was to remain a further covenant might be required containing a “no build area” on any new lot created over that part of the property. It is said that this would significantly reduce the value of those properties for their subsequent owners.
[9] There are 12 entitled or affected properties (13 including Land Depot’s property). The covenant could be extinguished by the owners of these properties signing a registerable form of surrender of the covenant, but I accept that would be a
difficult, time consuming and costly exercise given the number of properties involved and the redundancy of the drain to those properties.
[10] Land Depot considers the present application is the appropriate means of achieving the same result. All property owners have been served with the application and the accompanying supporting material, including both Mr Rance’s affidavit and an affidavit affirmed by Mr Kevin Hayes, a Christchurch surveyor, together with the judgment of Associate Judge Paulsen granting leave to Land Depot to commence the proceeding by way of originating application and directing service on the landowners and the Christchurch City Council.4 Neither the Christchurch City Council nor any of the respondent landowners have filed notices of opposition to Land Depot’s application.
Decision
[11] Section 317(1) of the Act provides a number of grounds upon which a covenant may be modified or extinguished:
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 of the easement or covenant 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 or covenant at the time of its creation; or
4 Land Depot Ltd v Friese [2020] NZHC 1085.
(c)every person entitled who is of full age and capacity—
(i)has agreed that the easement or covenant should be modified or extinguished (wholly or in part); or
(ii)may reasonably be considered, by his or her or its acts or omissions, to have abandoned, or waived the right to, the easement or covenant, wholly or in part; or
(d)the proposed modification or extinguishment will not substantially injure any person entitled; or
(e)in the case of a covenant, the covenant is contrary to public policy or to any enactment or rule of law; 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.
...
[12] I accept the submission made on behalf of Land Depot that because of the changed use and circumstances of the land over the last 113 years the covenant has become obsolete and redundant and should be removed from Land Depot’s servient title. In 1907 the land and surrounding area was rural. The zoning of the land is now residential (residential new neighbourhood) and it no longer relies on shallow open drains. The character of the neighbourhood has changed and the surrounding residential lots have their own dedicated water and stormwater drainage.
[13] Land Depot is carrying out a residential subdivision of the land and the subdivision consent to which the development is subject imposes conditions to ensure stormwater and surface water drainage for each residential lot is created without needing to rely on the open drain. In contrast, the covenant is premised on this being a largely rural neighbourhood with no other available stormwater infrastructure.
[14] I am satisfied on the evidence filed by Land Depot that if the covenant remained in force it would impede the reasonable use of Land Depot’s servient land and may in fact prevent it from improving the stormwater management for the permitted use of that land. The extinguishment of the covenant over Land Depot’s land will not substantially injure any person entitled to benefit from it because no person any longer relies on the open drain for its stormwater management. Any
property to which the open drain retains some utility has since 1988 been protected by the easement in favour of the Christchurch City Council which is responsible for its maintenance.
[15] The situation in the present case is akin to two similar cases where similar applications were successfully made. In Travis Country Estates Ltd v Trotter the applicant sought to extinguish old easements for stormwater drains to allow development of residential land.5 It was considered that obtaining the individual consent of all the affected 89 properties would be time consuming and expensive. As in the present case, none of the respondents opposed the application. The old easement had essentially been replaced by a more recent stormwater pipeline which was protected by an easement in favour of the Christchurch City Council.
[16] Tipping J agreed with the applicants and held on the evidence presented to him that there was no risk of injury to the respondents from the extinguishment of the easement because their stormwater requirements were now adequately catered for by the later easement in gross in favour of the Council and there seemed to be little or no likelihood of any necessity to use the earlier arrangements in the future. The lack of any opposition clearly suggested that the proposed change would result in no prejudice to the respondents. The situation is therefore almost identical to the present case.
[17] Similarly, in Re Yoursection Ltd, the applicant company made an application under s 317(1)(a)(iii) and (1)(d) to extinguish a very similar and equally historic covenant over land in Halswell.6 Associate Judge Lester was satisfied that no other party received the benefit of the covenant and, on the assumption that the Christchurch City Council would be obliged to maintain the only part of the drain that would have otherwise remained subject to the covenant, it could be removed without substantially affecting any landowners.
[18] I accept Land Depot’s submission that the facts in the present case are materially similar. The covenant is of a similar vintage to that in Re Yoursection and
5 Travis Country Estates Ltd v Trotter (1991) 1 NZ ConvC 190,983 (HC). The application in that case was made under s 126G of the Property Law Act 1952, as it then was.
6 Re Yoursection Ltd [2019] NZHC 1825.
is no longer of any benefit to the surrounding landowners. The Christchurch City Council now has responsibility for maintenance over that part of the open drain that may actually be used, and Land Depot’s subdivision consent imposes conditions to manage stormwater runoff from the lots it creates as part of its development and will not need to rely on the open drain.
Conclusion
[19] I am satisfied that a number of the grounds set out in s 317(1) of the Act that may justify the modification or extinguishment of a covenant have been established. These include the changes to the benefited and burdened land and to the character of the neighbourhood; the fact the continuation of the covenant would impede the reasonable use of the burdened land; that its extinguishment will not substantially injure any person entitled under the covenant; and that it would in the circumstances be just and equitable to modify or extinguish the covenant as proposed. Further, the affected parties, including the Christchurch City Council, all of whom have been served with the application and provided with the supporting information, have not sought to oppose its removal.
[20]The following orders are accordingly made:
(a)The covenant specified in Transfers 75370 and 75371 registered in 1907, as noted against Records of Title CB40A/672, CB40A/673, CB30F/1130, CB30F/1132, 388729, 388730, 388731, CB14A/762, CB14A/763, CB11K/1046, CB11K/1047, CB11K/1048 and CB21F/818, all Canterbury Registry, is extinguished over and removed from the applicant’s land, legally described as Lot 1 on Deposited Plan 68682, contained in Record of Title CB40A/672.
(b)The Registrar-General of Land shall record on the Record of Title to the applicant’s land that the covenant has been extinguished by order of the Court.
(c)No compensation is payable to the respondents or any other persons by the applicant (or any other person) for the extinguishment of the covenant over the applicant’s land.
Solicitors:
Tavendale and Partners, Christchurch
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