McClure v Cobb
[2017] NZHC 1911
•11 August 2017
IN THE HIGH COURT OF NEW ZEALAND
TAURANGA REGISTRY
CIV 2017-470-000053
[2017] NZHC 1911
BETWEEN ROYCE BOYD MCCLURE, JANET WHITFIELD MCCLURE AND
HOLLAND BECKETT TRUSTEE NO.8
LTD as trustees of the Rajanasac Trust ApplicantsAND
RAYMOND LAWRENCE COBB AND MICHELLE ZILLAH COBB
Respondents
Hearing: 9 August 2017 Appearances:
G Brittain QC for the Respondents/Plaintiffs
M Beech/T Conder for the Applicants/Defendants
Judgment:
11 August 2017
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on 11.08.17 at 3:30pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
R B MCCLURE, J W MCCLURE AND HOLLAND BECKETT TRUSTEE NO.8 LTD AS TRUSTEES OF THE RAJANASAC TRUST v R L COBB AND M Z COBB [2017] NZHC 1911 [11 August 2017]
CIV 2017-470-000084
BETWEEN RAYMOND LAWRENCE COBB AND MICHELE ZILLAH COBB
Plaintiffs
AND
ROYCE BOYD MCCLURE, JANET WHITFILED MCCLURE AND
HOLLAND BECKETT TRUSTEE NO.8 LTD
Defendants
The proceedings
[1] The first mentioned proceeding concerns an application to sustain a caveat. Mr and Mrs McClure as trustees of the Trust owner of their property have applied to sustain their caveat registered on 15 February 2017 over property owned by the respondents Mr and Mrs Cobb.
[2] The second proceeding, of Mr and Mrs Cobb, claims that pursuant to the provisions of the parties’ property sale and purchase agreement the McClures granted the Cobbs a right of way over that land they sold to them but have refused to register the easement instrument by which that right of way is preserved. The Cobbs seek an order for summary judgment requiring the McClures to register that easement.
[3] In opposition to the summary judgment application it is claimed on behalf of the McClures that they have an arguable case for rectification of the easement to record, in effect, that it had been agreed between the parties the easement right of way was limited for use to permit direct access from one end of the right of way to the other end i.e. not to permit access to the Cobbs land part way along that right of way.
[4] Issues upon the caveat application and the summary judgment application are related. They will be dealt with together by this judgment.
The sale contract covenant
[5] The applicants (the McClures) claim they hold a caveatable interest pursuant to a covenant contained in the agreement dated 17 November 2011 by which they purchased land from Mr and Mrs Cobb.
[6] That covenant contained in clause 2 of Schedule 3 of their agreement for sale and purchase provided:
The grantor [Mr and Mrs McClure] and grantee [Mr and Mrs Cobb] agree to surrender this easement if the easement area is to be vested in the Western Bay of Plenty District Council [Council] as an extension of Minden Road, in place of the paper road abutting the eastern boundary of Lot 1 DP 408559.
[7] That provision forms the basis of the applicants’ claim of a caveatable interest. It is about the land the McClures purchased from the Cobbs for the purpose of adjusting the location of the paper road which separated their two properties. The McClures bought land along the Cobb land boundary for the purpose of moving the paper road to and over that land and away from their boundary which the paper road had before abutted. In effect it was intended to give title of the old paper road location to the McClures and to affix the new paper road location over the land the McClures purchased from the Cobbs to effect that adjustment.
[8] The parties’ agreement set out in Schedule 3 of the form of the easement that was to effect ownership and use of the land until the Council accepted the relocation of that stretch of road and took ownership of it. Until that occurred the easement preserved to the Cobbs rights of access over the land as the dominant tenement. The McClures as the registered proprietor of the land in question were the servient tenement. The purpose of the arrangement was to preserve rights of use and ownership until the Council accepted the land in question. In that outcome the old paper road land would form part of the McClures property.
Background
[9] Earlier in 2004 the McClures had bought a section of rural land from the Cobbs, they having since built their home upon it and since have transferred ownership to their Trust. Access to that property is by Minden Road, a rural road running into the hills west of the Tauranga – Katikati highway. Access to the Cobbs property on the other side of Minden Road is via a long right of way. To about that point where that long right of way leaves the road (and shortly before the McClure’s driveway on the other side of the road), the seal on Minden Road ends and beyond that there is only a track and it is clear that much of that track only partly runs along the existing paper road which abuts the Trust property. Some of the track also runs onto that area of land which it is proposed be part of the new paper road which it is hoped the Council will accept in place of the existing paper road.
[10] Meanwhile the parties’ agreement for sale and purchase of the land contains clauses permitting the Cobbs, as dominant tenants, the use of the right of way they had
sold to the McClures, and included obligations of them with respect to the upgrade and maintenance of that new road use area.
[11] The agreement to purchase the additional land in question in 2011 occurred after Mr Cobb advised Mr McClure that the Cobbs were planning to sell sections across the paper road and along the boundary of the Cobb land. Mr McClure made a purchase proposal which he says would protect the McClures boundary. It was his purpose he said to get title to various sections of land which would provide restrictions to building and to other parcels of land.
[12] The written agreement clearly contemplated a joint effort to obtain the agreement of the Council to shift the paper road onto that land the McClures were to purchase from the Cobbs. The Cobbs were required to apply to the Council to obtain that boundary adjustment. Schedule 3 provided the Cobbs with the right to continue to use that land they sold to the McClures for their travel and access purposes. This was to endure until the new road position was formally in place. Both the McClures and the Cobbs agreed to the easement being surrendered once it vested in the Council in substitution for the present paper road.
[13] The parties’ agreement did not provide for a timeframe for the road works to be completed.
[14] Once an agreement was reached the parties contacted their lawyers to prepare the documentation required including the sale and purchase agreement. In that outcome the boundary adjustment took place and new titles issued; Mr Cobb constructed the bulldozed road access as required. For four to five years there were no issues regarding the use by the Cobbs of the proposed road change. The Cobbs registered a caveat to preserve their interest in relation to their right of access. Then on 15 February 2017 the McClures lodged their caveat, it was said, to preserve the applicants own interest in the surrender of the right of access once the realignment was completed. Unusually the interest claimed by the applicants caveat relates to a right of way granted by the McClures to the Cobbs over the McClures land.
Considerations
[15] The McClures application asserts a claim of a caveatable interest in the Cobbs land based on clause 2 in Schedule 3 of the contract between the parties – the details of which were noted in paragraph [6] herein. That contained an agreement to surrender the easement when the land vested in the Council in place of the existing paper road.
[16] The interest that is claimed to support the caveat then is about the Cobbs promise to surrender the easement over the McClure land, when there is an adjustment of the paper road location.
[17] That is how it has been represented by the present application. It seems the real purpose of the caveat is to permit the applicants to try and maintain some element of control over the use of the land intended to become the new paper road and in particular to prevent users of that new road from accessing the Cobb land along the road boundary.
[18] It appears the applicants real concern is that the Cobbs will not cooperate in shifting the Minden paper road. But that, it seems to the Court, indicates an attempt by the applicants to enforce obligations flowing from the agreement for sale and purchase and not from the easement.
[19] Also it appears there are concerns that other subdivision development proposals of the Cobbs raise fears for the applicants that access to those subdivision lots may be provided from the Cobbs boundary along the new paper road.
[20] By the present application and as the counterclaim for rectification heralds Mr McClure claims it was well understood by the parties that that road provided access from one end to the other and was not to provide access only a part of the way along that road – as would be if a new driveway was formed from the access road to a development area beyond and onto subdivided land.
[21] Mr Cobb denies that claim of an understanding. In the Court’s view there is no evidence to support Mr McClure save for what he has to say about it.
[22] If the applicants caveat is to be sustained the Court needs to accept there is a reasonably arguable case of a caveatable interest. In this case the claim of a caveatable interest is about a promise to surrender the easement over the land the applicants purchased from the Cobbs. The applicants’ case rests on the premise that the clause prescribing the duration of the easement is a restrictive covenant by the Cobbs. That cannot however be so because if the relevant agreement clause was construed as a restrictive covenant the Cobb land would be servient and the McClure land dominant whereas clearly by the parties’ arrangements the reverse is the case.
[23] Counsel are at odds regarding the caveatability of a restrictive covenant. That difference does not need to be resolved upon the present application. The Court agrees with the submission of Mr Brittain that if the applicants caveat was sustained on terms requiring the applicants to pursue a proceeding to perfect an equitable interest, then that proceeding could only seek registration of the easement interest. Anyway the Cobbs agree they are bound by the easement instrument and they simply seek an order that the easement instrument be registered against both the McClures and the Cobbs titles. Once registered there is no need for a caveat.
[24] As earlier noted that in conjunction with their opposition to the applicants’ application to sustain a caveat the Cobbs have applied for summary judgment by which they seek specific performance of the contract by which they claim their contract entitles them to have the easement registered.
[25] Summary judgment principles are well understood. An order may be made where there is no defence to a cause of action. Specific performance will allow a Court or a party to fulfil contractual obligations instead of awarding damages for breach. It is about whether the Court considers the remedy is appropriate in the circumstances.
[26] By their opposition the McClures seek rectification of the easement which the Cobbs seek to have registered. They claim there is an arguable case for rectification.
[27] The basis of the claim for rectification is supported by submissions that the contract does not accurately record the mutual intention of the parties.
[28] The McClures say there was oral discussion which preceded the written agreement but that it is clear the parties differ on their conclusion of those discussions
– and therefore because of that difference it should be a matter for trial in due course.
[29] The McClures say the right of access to the new road was to proceed from one end to the other. Mr Cobb says it was a right to use the area as though it was a public road. Until this present application it has not been raised as a matter of difference between the parties.
[30] Mr Conder submits there is a difference of evidence and therefore there should be a hearing to determine that which should be accepted.
[31] That assessment has to be considered in light of the fact that the parties chose to leave the matter in the hands of their lawyers to formulate the basis from which continued use of the paper road would be provided. There is nothing until now which has suggested there was a basis for disparity. Rather, the Court is of the view the McClures are endeavouring to exert some influence over any prospective subdivision of the Cobbs land along the boundary of the new paper road.
[32] It appears, as Mr Brittain submits that the true motive for claims of rectification is to try and stop future subdivision and therefore that rectification is related to the Cobbs ability to use the right of way.
[33] But, what they seek has nothing at all to do with clause 2. Whatever the easement is about, it is subject to clause 2 of the agreement.
[34] If there is some basis for a claim for rectification then there is nothing to prevent the McClures from bringing a separate claim in that regard. There is nothing by that that should effect the clause 2 provisions which are the subject of caveat issues. Rectification is about separate matters and is not available for consideration upon the caveat application.
[35] However viewed the McClures complaints are about the use or maintenance of the right of way. Those are not complaints that require resolution presently. There is no need for a caveat to assist in the purpose of resolving disputes in that regard.
[36] As Mr Brittain submits the Court agrees the caveat has little or anything to do with protecting the applicants’ registration of the easement instrument. The real concern seems to be about whether the Cobbs would abide by an agreement to move the road. It was for that reason they say they contacted their lawyer to see how their rights could be protected. In the outcome their present methods involve an attempt to enforce obligations they claim flow from the agreement for sale and purchase, and not the easement. The Court does not accept those issues can support a caveat when all issues regarding the easement will be solved by registration of the easement instrument.
[37] The evidence suggests there is no basis for their concerns anyway. Neither of the affected proposed subdivision lots will have access from the new paper road.
[38]In the Court’s view the use of the caveat process is not appropriate.
Result
[39]The application to sustain a caveat is dismissed.
[40] There will be an order requiring registration by the McClures and their Trust of that easement in the form detailed by Schedule 3 of the parties’ agreement for sale and purchase dated 17 November 2011.
[41] The McClures and their Trust shall pay costs to the Cobbs on the application to sustain the caveat and the summary judgment application on a 2B basis together with disbursements as approved.
Associate Judge Christiansen
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