Nelson Lakes Holdings Ltd v Seifried - [2018] NZHC 521

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2017-442-47

[2018] NZHC 521

BETWEEN
NELSON LAKES HOLDINGS LIMITED

Applicant

AND

HERMANN AND AGNES SEIFRIED

Respondents

Hearing: On the Papers

Counsel:

C Heaton for Applicant

Judgment:

23 March 2018

JUDGMENT OF CLARK J

Introduction

[1] Nelson Lakes Holding Ltd (the applicant or NLH) applies to extinguish an easement registered against its property.1

[2] Following directions as to service relevant property owners and Tasman District Council were served with the application. No party has filed any opposition. The application therefore proceeds by way of formal proof.

Background

[3] Lot 62 on Deposited Plan 413403 was zoned commercial by the Tasman District Council in 2002.2

1 Pursuant to s 317 of the Property Law Act 2007.
2 Resource consent decision RM990381 dated 5 August 2002.

NELSON LAKES HOLDINGS LIMITED v SEIFRIED [2018] NZHC 521 [23 March 2018]

[4] On 27 May 2009 Beechnest Ventures Ltd, a company which managed the development prior to St Arnaud Property Holdings Ltd (from whom NLH purchased Lot 62), registered Easement Instrument 8171105.9 against the certificate of title for Lot 62. The restrictive covenants contained in sch 2 to the easement instrument include a number of restrictions clearly relating to residential properties. Under clause 8 the transferee covenants:

Not to use the property for any purpose other than for residential activity….

[5] The applicant purchased Lot 62 on 16 July 2010 from St Arnaud Property Holdings Ltd. The applicant was not made aware of the covenant when purchasing the property. The property was advertised as a sub-divisible commercial section and was, indeed, purchased for commercial purposes.

[6] In 2012 the Council consented to NLH building a commercial centre on Lot 62. The applicant built a café, gift shop and boat shed on part of the property all of which are used by the public.

[7] In 2016 Lot 62 was subdivided and two new certificates of title were issued: Lots 1 and 2 on Deposited Plan 480563.

[8] The applicant entered into an agreement whereby the applicant is to adjust the boundary with its neighbour. A boundary adjustment plan was deposited and the legal description of the applicant’s property changed to Lot 2 Deposited Plan 480563 and Lots 3 and 5 Deposited Plan 513339.

Originating application

[9] The applicant seeks to have the easement instrument extinguished pursuant to s 317 of the Property Law Act 2007 on the basis the proposed extinguishment will not substantially injure any person entitled. Section 317 provides:

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—

…

(d)the proposed modification or extinguishment will not substantially injure any person entitled.

[10] The applicant believes Beechnest Ventures Ltd did not consider the…

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.

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Details

Case: [2018] NZHC 521
Decision Date: 23 March 2018

CaseChat Overview and Summary

In the case of Nelson Lakes Holdings Limited v Seifried, Nelson Lakes Holdings Limited applied to extinguish an easement registered against its property. The easement had been registered against the property by Beechnest Ventures Ltd, who managed the development prior to Nelson Lakes Holdings Limited purchasing the property. The easement contained restrictive covenants that were clearly intended to apply to residential properties, but the property had been zoned for commercial use since 2002. Nelson Lakes Holdings Limited sought to extinguish the easement on the basis that it would not substantially injure any person entitled.

The court had to decide whether the easement should be extinguished. The court found that the easement was contrary to the commercial zoning of the land and had never been enforced. The court also found that the extinguishment of the easement would not substantially injure any person entitled. The court noted that the property had been used for commercial purposes without objection from surrounding landowners and in accordance with district zoning.

The court granted the application and extinguished the easement. The court noted that the form of the order was different from the form of the order sought in the originating application, as the legal description of the applicant's property had changed due to an agreement for an exchange of land entered into prior to filing the originating application. The court reserved leave to apply further should the order not be in the terms anticipated by the applicant.

Orders