Orewa Developments Limited - [2019] NZHC 575

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-360

[2019] NZHC 575

IN THE MATTER of ss 316 and 317 Property Law Act 2007

AND

IN THE MATTER

of an application by OREWA DEVELOPMENTS LIMITED for an Order Modifying Covenants

Hearing: On the papers

Judgment:

26 March 2019

JUDGMENT OF GORDON J

This judgment was delivered by me
on 26 March 2019 at 12.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Dawsons, Howick
Counsel: S Robertson QC, Auckland

Re Orewa Developments Ltd [2019] NZHC 575 [26 March 2019]

[1] The applicant, Orewa Developments Ltd, has made an on-notice application dated 1 March 2019 for orders modifying land covenants under s 317 of the Property Law Act 2007 (the Act).

[2] In an affidavit sworn in support of the application, solicitor William Endean, who has acted for the applicant since 2013, deposes that an error occurred on the issue of titles in Stage 1D of the subdivision concerned, in that mutual building and fencing covenants applicable to the Stage 1D titles were also brought down on the residue title. The residue title includes land that will vest as roads and reserves. LINZ will not progress the issue of titles for Stage 3 of the development with the covenant applying to land that will vest as roads and reserves.

[3] An application is accordingly made to modify the building and fencing covenants so that they do not apply to any land that will become road or reserves.

[4]Section 317 of the Act provides in relevant part:

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

(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;

…

[5]The application as filed…

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 Orewa Developments Limited

Details

AGLC: Orewa Developments Limited [2019] NZHC 575
Case: [2019] NZHC 575
Decision Date: 26 March 2019

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, heard an application by Orewa Developments Limited for an order modifying covenants. The applicant sought to modify mutual building and fencing covenants that mistakenly applied to land intended to vest as roads and reserves in Stage 1D of their subdivision. The covenants had also been applied to the residue title, including land designated for future stages of the subdivision. The application was made under section 317 of the Property Law Act 2007, which allows for the modification or extinguishment of covenants if certain criteria are met.

The legal issues before the court were whether the covenants should be modified under section 317(1)(b) of the Act due to a change in circumstances since the covenants were created, and whether all relevant parties had agreed to the modification under section 317(1)(c). The court had to determine if the covenants, as they stood, impeded the reasonable use of the burdened land in a manner that was not foreseeable at the time of creation. Additionally, the court needed to consider whether all parties entitled to the benefits of the covenants had agreed to their modification.

Gordon J found that the covenants should be modified under both section 317(1)(b) and section 317(1)(c) of the Act. The court was satisfied that the covenants impeded the reasonable use of the land, given that they applied to land intended for roads and reserves. Furthermore, all relevant parties had consented to the modification, as evidenced by their filings. The court exercised its discretion to modify the covenants as requested by the applicant, ensuring that they would cease to have any effect on lots that vested or were dedicated as roads or reserves. This modification would occur automatically upon the deposit of the subdivision plan and the vesting or dedication of any lot as a road or reserve.

The final orders of the court included modifying the covenants in Easement Instruments 11116850.5 and 11116850.6 to cease their effect on lots vesting or being dedicated as roads or reserves, effective upon the deposit of the subdivision plan and the vesting or dedication of any lot as a road or reserve.

Orders