Larsen v Skelton - [2022] NZHC 3028

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2112

[2022] NZHC 3028

UNDER Parts 7 and 9 of the High Court Rules 2016 and Sections 316 and 317 of the Property Law Act 2007

IN THE MATTER OF

the modification of a land covenant

BETWEEN

WAYNE WILLIAM LARSEN, MARGARET GAYE LARSEN, PETER GEORGE GOODMAN and LORELLE

SHARON GOODMAN as Trustees of the WOOTTON TRUST and BIRICHINO

TRUSTEES LIMITED
Applicants

AND

TUI JACQUELINE SKELTON, ROBERT MARTIN HODGE, CHRISTINE MARIE HUTTON, DANIEL JAMES HUTTON, HARRY HAMLET ABRAHAM and JACQUELINE ANN ABRAHAM

Respondents

Hearing: 4 July 2022; site visit 13 July 2022

Appearances:

EJ Taia for the Applicants

TJ Skelton and RM Hodge (self-represented), First and Second- named Respondents

MD Talbot for the Third and Fourth-named Respondents

Judgment:

18 November 2022

JUDGMENT OF FITZGERALD J

This judgment was delivered by me on 18 November 2022 at 3.00pm,pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

LARSEN v SKELTON [2022] NZHC 3028 [18 November 2022]

Introduction [1]

The parties and the lots [4]

The application [9]

The evidence [12]
Preliminary points and aerial images [13]

Mr Larsen’s evidence [20]

The Goodmans’ evidence [43]

The Birichino evidence [46]

Valuation evidence – Mr Bates [51]

Mrs Hutton’s evidence [57]
Mr Hodge and Ms Skelton’s evidence [72]

The Goodmans’ reply evidence [81]

Mr Morris’ reply evidence [83]

Mr Larsen’s reply evidence  [84]
Evidence of Gregor Hoheisel  [91]
Evidence of Michael Sprague  [92]

The site visit [102]

Legal principles – general [105]

Section 317(1)(a)(i) – change in nature or extent of use [116]

Approach [116]

Discussion [118]

Section 317(1)(b) – impediment to reasonable use [124]

Approach [124]

Discussion [126]

Section 317(1)(a)(ii) – change in character of neighbourhood [127]

Approach [127]

Discussion [132]

Result and costs [144]

Introduction

[1] The applicants apply for an order pursuant to s 137 of the Property Law Act 2007 (the Act) to modify or extinguish a land covenant which has the effect of preventing further subdivision on their properties (the Covenant). The applicants own three properties in a six-property subdivision (the Site). The first named applicants, to whom I will refer in this judgment as the Larsens, originally purchased the Site as a single block of land in 1975. They built a home on the Site in 1982, and in 1994 decided to subdivide the Site into six lots, retaining the largest lot for themselves. As part of this subdivision, the Covenant was registered against each of the new titles. An interesting feature of this case is that, other than in respect of one of the lots, all of the owners of the remaining lots are the original owners.

[2] While a number of grounds for modification or extinguishment of the Covenant are relied on, counsel for the applicants, Mr Taia, confirmed that an alleged change in the neighbourhood for the purposes of s 317(1)(a)(ii) of the Act is at the heart of the application. The change in neighbourhood is…

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.

Continue reading Larsen v Skelton

Details

AGLC: Larsen v Skelton [2022] NZHC 3028
Case: [2022] NZHC 3028
Decision Date: 18 November 2022

CaseChat Overview and Summary

Larsen v Skelton concerns an application to modify or extinguish a covenant which restricts further subdivision of three of six lots in a subdivision in Stillwater. The applicants, the original owners of the lots, seek an order pursuant to s 137 of the Property Law Act 2007 to modify or extinguish a land covenant which prevents further subdivision on their properties. The applicants rely on a number of grounds, but at the heart of the application is an alleged change in the neighbourhood for the purposes of s 317(1)(a)(ii) of the Act. The respondents oppose the application on the basis that the residential developments to the immediate north and east of the Site have been in place for some 20 years, they were known about at the time the Covenant was registered, they have not altered the essential rural nature of the Site, the other developments relied on do not form part of the neighbourhood, and there is no evidence as to the implications of the planned Penlink development. Fitzgerald J considered that there had been some change in the character of the neighbourhood since the creation of the Covenant, namely by the development of the Coastal Heights and Inlet Views subdivisions. The Court was not persuaded, however, that this change in the neighbourhood was of a kind which meant the Covenant ought to be extinguished. The Court found that the change in the neighbourhood was foreseeable, the zoning that enabled the developments was put in place before the Covenant’s creation, the developments were completed some 20 years ago, and the Site and its immediate surrounds retain a sufficiently rural character that the Covenant still has relevance and is not obsolete. The application to extinguish or modify the covenant was dismissed. The Court indicated that costs should follow the event in the ordinary way, on a 2B basis.

Orders