Philpott v Noble Investments Ltd
[2013] NZHC 400
•5 March 2013
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2010-409-002984 [2013] NZHC 400
IN THE MATTER OF Caveats Numbers 8322656.1 and
8003770.1
BETWEEN SHAYNE PHILPOTT, NEW ZEALAND TRUSTEE SERVICES LIMITED, COLIN PETER STOKES, FAY EUNICE RICHARDSON, BURNSIDE TRUSTEES LIMITED AND GREGORY ROBERT SMITH
Applicants
ANDNOBLE INVESTMENTS LIMITED Respondent
Hearing: 13 and 14 February 2013 (Heard at Christchurch)
Appearances: W J Palmer and E D Peers for Applicants
S M Dwight for Respondent
Judgment: 5 March 2013
FURTHER JUDGMENT OF ASSOCIATE JUDGE OSBORNE [as to application for orders that caveats not lapse]
Introduction
[1] In this judgment, the Court is revisiting orders made in a caveat lapsing
proceeding (“the 2012 judgment”).
[2] This is a judgment supplementary to that I issued on 28 June 2012.1
1 Philpott v Noble Investments Ltd [2012] NZHC 1431.
PHILPOTT V NOBLE INVESTMENTS LIMITED HC CHCH CIV-2010-409-002984 [5 March 2013]
Background
[3] The respondent (Noble) is undertaking a subdivision of land at Yaldhurst Road, Christchurch, now known as Noble Village. The applicants (whom I will refer to as “the caveators”) purchased the proposed Lot 9 (together with other interests in the proposed subdivision). They subsequently lodged two caveats to protect asserted interests over other lots in the subdivision. The caveators had a number of concerns both as to roading and as to services. Central to their concern was a determination by Noble that the main road access into the development would be via what became known as the “spine road” and that a previously envisaged route, via land designated as Lot 22, would not be a primary focus of roading or services.
[4] The caveators had lodged two caveats. The caveat lodged first in time (which for convenience I referred to in my judgment as “Caveat 2”) was lodged over a parcel of land identified as Lot 19 in the original subdivision plans. Caveat 2 relied upon a 2008 agreement reached between Noble, Applefields and the caveators, in settlement of a number of issues, whereby Lot 9 was to be provided with further roading and a sealed and serviced right of way.
[5] The caveators subsequently lodged a further caveat (“Caveat 1”) over eight titles being Lots 11-18 (which I referred to in my judgment as “the Eastern lots”, as they lay to the east of the caveators’s Lot 9). Caveat 1 relied upon the applicants’ original 2002 purchase agreement.
[6] The conclusions which I reached in my judgment were as follows:
[82] In relation to Caveat 1, I conclude:
(a) The caveators have established a reasonably arguable case that by the 2002 agreement Noble granted the caveators an equitable easement.
(b) While the caveators arguably had an entitlement to have Noble provide the easement through a widened Lot 22, Noble also arguably retained a discretion to designate other of its land as the route for the equitable easement. It has now arguably designated two routes, namely a widened Lot 22 north-south and the spine road.
(c) The routes for the alternative easements lie over all titles caveated in
Caveat 1 other than Lot 11.
(d) If and when Noble finalises the spine road in conformity with
Cardno’s drawing no. PS-18 as approved on 25 May 2009 (Schedule
4), any equitable easement will expire.
(e) If and when the spine road (as shown in PS-18) vests in the Council, then the caveat in relation to Lots 12 and 18 will no longer be sustainable but the caveat in relation to Lots 13, 14, 15, 16 and 17 will be sustainable to the extent that proposed Lots 504 and 510 adjoining Lot 22 north-south represent land in relation to which the caveators have arguably caveatable interests.
[102] I conclude –
(a) The caveators have a reasonably arguable case for the interest claimed in Caveat 2.
(b) The caveators arguably have an entitlement, enforceable against Noble, to an equitable easement over Lot 19.
(c) Unlike the situation with Caveat 1, the caveators’ interests will not be adequately protected should the spine road vest in the Council because the route to be followed by the right of way and services over Lot 19 will not form part of the spine road.
(It is common ground that the reference to “Lot 504” was a typographical error – that error will be corrected later in this judgment but for convenience other references which the June 2012 judgment made to “504” will be amended herein to read “514”).
[7] As a consequence of those findings in relation to each caveat, I concluded that those caveats should not lapse, that is to say should not lapse for the time being, with the exception that in relation to Caveat 1, it should lapse insofar as it affected Lot 11.
[8] The full order in the 2012 judgment was in these terms:
[118] I order:
(a) Caveat instrument no. 8003770.1 (Caveat 2) shall not lapse. (b) Caveat instrument no. 8322656.1 (Caveat 1) shall not lapse.
(c) Leave is reserved to the parties to apply in relation to the following matters.
(d) It is a condition of the order numbered (b) above that Caveat instrument no. 8322656.1 shall lapse insofar as it affects Lot
11, Deposited Plan 323203, Identifier 440795, Canterbury
Land Registration District.
(e) In the event and at the time that the “spine road” as shown on Schedules 2 and 3 to this judgment is vested in the Christchurch City Council both as a road and with the services that are to be provided off Yaldhurst Road running through it, and Noble Investments Limited has caused an easement for right of way and other services to be registered over Lots 504 and 510 (as they appear on Schedule 4 to this judgment) in favour of the registered proprietors of Lot 9 in Deposited Plan 323203, Identifier 440793 (of any subdivided lot thereof), then Noble Investments Limited may on three working days’ notice have this proceeding brought on for the making of orders that the balance of land in Lots 12, 13, 14, 15 should lapse.
(f) In the event that Noble Investments Limited is in a position to demonstrate to the reasonable satisfaction of the caveators or the Court that a route for stormwater drainage from Lot 9 has been secured other than over the caveated property, then Noble Investments Limited has leave on three working days’ notice to apply to the Court for an order that the caveats lapse in relation to titles for land unaffected by the stormwater drainage (except to the extent that a caveat also protects interests other than in relation to stormwater drainage).
(g) The parties shall within fifteen working days of this Order meet to consult as to outcomes which will resolve all or some of the issues raised in this proceeding including but not limited to:
(i) On an assumption that the spine road and its side roads will vest in the Christchurch City Council, will the caveators accept such vesting as compliance with the 2002 agreement either in relation to right of way or services and, if so, to all or which?
(ii) Do the parties have any agreement on the widening of Lot 22 north-south to include either proposed Lots 514 and 510 or any other land?
(iii) Can the parties agree on the formalisation of the rights of the caveators in relation to the additional right of way referred to in the 8 August 2008 agreement?
(h) The application stands adjourned to 3 December 2012 for mention, but with leave to the parties on three working days notice to request an earlier date for mention, and with leave to apply for any further orders or directions required to give effect to this order.
The 2012 judgment summarised
[9] Thus, in the 2012 judgment, I found that the caveators had arguable equitable interests and that the caveats ought not to be removed as a matter of the Court’s residual discretion, except on certain conditions which would protect the caveators’ interests.
[10] I summarise the order:
(a) The caveats should not immediately lapse;
(b)Caveat 1 (based on the 2002 agreement) should lapse insofar as it affected Lot 11;
(c) Noble was entitled to have Caveat 1 lapse in relation to Lots 12-15 once:
(i) The spine road vested in the Council;
(ii)Noble had registered an easement in favour of the caveators over Lots 514 and 510;
(iii)Noble may apply for an order that the caveats lapse to the extent that Noble can demonstrate a secure route for stormwater drainage from Lot 9 other than over the caveated properties (except to the extent the caveats protect other interests).
[11] I reserved leave to the parties to apply in relation to the conditions (those contained at [18](d)-(g). I did not reserve leave in relation to the first orders whereby the caveats were not to lapse. Further leave was reserved to the parties to apply for orders or directions to give effect to the orders in the 2012 judgment.
[12] The 2012 judgment was delivered on 28 June 2012. Neither side filed an appeal.
The applications before the Court
[13] Both the caveators and Noble now apply for further orders or directions. Most of the applications are opposed.
The principles applied
[14] For the 2012 hearing, the parties filed competing affidavit evidence. The evidence was not filed in an urgent or restricted way. The caveats had been lodged in 2008 and 2009. Noble initiated the caveat lapsing procedures in December 2010. Evidence was filed at that time. The proceeding was then effectively parked while the parties dealt with the consequences of the Christchurch earthquakes and entered negotiations. Further affidavits were filed before the May 2012 hearing.
[15] At the May 2012 hearing, there was no difference between counsel as to the principles to be applied in a caveat-lapsing case. The principles are those as I stated in the judgment.2
[16] The Court continues in this proceeding to sit in its jurisdiction of supervising caveats. Caveats are not generally removed unless it is clear that the caveat cannot be maintained, either, because there was no valid ground for lodging it or that such valid ground as then existed no longer exists. In that latter situation, the Court must be completely satisfied, as the Court of Appeal held in Stewart v Kaipara Consultants Ltd, that the caveator’s legitimate interests would not be prejudiced by
removal.3
[17] The consequence of my applying those principles to the facts deposed to in the affidavits was the conclusion of the 2012 judgment. I found that the caveators had a reasonably arguable case for each interest claimed (by way of an equitable easement over Noble’s land). The primary orders were therefore that the caveats not
lapse (except insofar as Caveat 1 related to Lot 11). A condition of the non-lapsing
2 At [36].
3 See Stewart v Kaipara Consultants Ltd [2000] 3 NZLR 55 (CA) at [23].
of Caveat 1 (whereby that caveat is to lapse in the event of the vesting of the spine road) came about, because I found that Noble’s identification and ultimate vesting of that road network would satisfy the obligations protected by equitable easement.
[18] The rights protected by Caveat 2 (to an easement for other services) were found in my judgment to be protected by routes already identified and provided by Noble or to be provided through the spine road, with the exception of the route for stormwater drainage. The condition in relation to the non-lapsing of Caveat 24 provided leave to Noble to return to Court to establish, in relation to Caveat 2, that the route for stormwater drainage had now been secured other than over the caveated property.
[19] As an appendix to his written submissions, spoken to at the start of his oral submissions, Mr Palmer addressed me on the legal principles relevant to the discharge of caveats in a subdivision. Those were, of course, the principles which I had to apply in delivering the 2012 judgment. Mr Palmer’s submissions were framed in such a way as to suggest that there are principles particularly relevant to the discharge of caveats when the caveats relate to land which is subject to a proposed or developing subdivision.
[20] Mr Palmer’s point is encapsulated in Shannon Lindsay’s Caveats against dealings in Australia and New Zealand where the author says:5
... although the general principle that a caveat cannot restrict dealings in land in which the caveator does not have an interest has not been challenged, there is now a line of authority establishing that a purchaser of part of a parcel of land has an interest in the whole parcel which justifies the lodgment of a caveat prohibiting dealings with the whole parcel until a subdivision of the parcel is completed.
4 Philpott v Noble Investments Ltd, above n 1, at [118](f).
5 Shannon Lindsay, Caveats Against Dealings in Australia and New Zealand (Federation Press, Sydney, 1995) at 161.
[21] The authors of Hinde McMorland & Sim Land Law in New Zealand
similarly conclude that:6
A different principle may ... apply in relation to land that is to be subdivided.
They then refer immediately to the passage I have quoted from Lindsay’s work.
[22] There is, as these texts indicate, a line of Australian authority in support of the proposition in the texts.7 The line of authority in Australian jurisdictions has been referred to and found favour in at least two New Zealand cases.8
[23] These authorities were not referred to by either counsel at the 2012 hearing.
[24] From these authorities, Mr Palmer drew the proposition that in such subdivision cases, the subdivision plan in existence at the time the parties entered their contract of sale and purchase represents the “rights of the purchaser” and that the purchaser, as caveator, is then entitled to require that the status quo be preserved until such time as substantive rights are determined.9
[25] I do not find it necessary or appropriate in this judgment to draw any further conclusions from the Australian or New Zealand line of authorities to which Mr Palmer drew my attention. In the June 2012 judgment, I found for the caveators in relation to their assertion of a caveatable interest upon the basis of an application of broader principles. Whether it is strictly correct to identify Mr Palmer’s line of authority as involving (as the authors of Hinde McMorland & Sim suggest) a “different principle” is for a later day and Court. It may be equally correct to view
the line of authority as simply involving the application of the general principles to a
6 Hinde, McMorland & Sim, Land Law in New Zealand (online looseleaf ed., LexisNexis) at
[10.013] (e).
7 See Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 at 429 per Malcolm CJ, with whom Pidgeon & Seaman agreed; Lintel Pines Pty Ltd v Nixon [1991] 1 VR 287 (VSC) at 290-
291; Re Henderson’s Caveat (1993) Q Conv R ¶54-450 (CA); Locke v Yogoat Pty Ltd (1992) 5
BPR 11,687 (NSWSC); Forder v Cemcorp Pty Ltd [2001] NSWSC 281, (2001) 51 NSWLR 486.
8 Howard v Rangeview Investments Ltd HC Wellington CIV-2004-485-2566, 31 March 2006;
Howard v Resort Developments Ltd HC Auckland CIV-2007-404-3066, 26 July 2007.
9 Mr Palmer relying particularly on Howard v Resort Developments Ltd, above n 9, at [43] per
Associate Judge Doogue.
particular situation (namely the sale of smaller lots to be subdivided from the parent lot).
[26] In the 2012 judgment, I found the caveat asserted rights to be supportable. I further found that the rights covered by Caveat 1 would be fully protected by the vesting of the spine road. I found in relation to Caveat 2 (and provided an avenue whereby) the rights of the caveators could be secured by Noble to the satisfaction of the Court (or the caveators).
Observations as to the limitations of the caveat jurisdiction
[27] The 2012 hearing was the parties’ opportunity to provide their comprehensive evidence and to have the Court determine (in the “arguable” jurisdiction) the fate of the caveats. In mid-2012, the Court gave its final judgment on the parties’ caveat issues. The hearing of the present applications is not the opportunity for the parties to revisit the 2012 findings as if by some form of review or appeal, upon the basis of supplementary evidence or suggestions which could have been brought forward in
2012. Time has been available and continues to be available to the parties to assert their substantive rights and establish those through an ordinary proceeding upon evidence in the ordinary way. To date, the parties have chosen not to take that route. Instead, the Court is asked in some areas to review its factual findings in a fundamental manner and to alter the outcome of the 2012 judgment.
[28] To the extent that leave was reserved by the Court to the parties to apply (under the order contained at [118] (c) of the judgment), such leave was in relation only to the conditions and other provisions of the order set out from [118] (d) – (g). The reservation of leave did not apply to the central order whereby the caveats were not to lapse.
[29] Except to the limited extent identified later in this judgment, and for the reasons specific to those areas of amendment, the time has come where the parties must accept that their respective contractual rights and expectations of each other, if they are incapable of being satisfied by commercial discussion and negotiation in the usual way, can only be resolved by trial (or arbitration) with evidence.
[30] These observations apply to several aspects of the applications before the
Court, as will be noted at relevant points of this judgment.
[31] It is against this background that I must consider the applications now before the Court. I do so in the same order as counsel dealt with them. I first deal with an evidential issue which arose and on which I reserved my decision.
The heads of agreement between Noble and Applefields Ltd
[32] In the June 2012 judgment, I recorded that Noble, in proceeding with its subdivision, entered into a contract with Applefields Ltd for Applefields to manage the development.10 The caveators entered into the 2008 settlement agreement (on which Caveat 2 is based) not only with Noble but also with Applefields. In the 2012 judgment, I referred to some detailed passages of evidence from both sides as to Applefields’ involvement.11 In finding that the caveators had an arguable case that Noble was bound under the 2008 agreement to provide a right of way, I observed that there had been no detailed exploration in the evidence of the extent to which, and the capacities in which, Applefields conducted and managed the development for Noble.12
[33] In the context of the applications now before the Court, Noble has provided a severely redacted version of a document entitled “Amended heads of agreement” between Applefields, Noble and a financier. Parts of three clauses and the schedules remain visible. The vast majority of clauses, together with the entire recitals have been fully redacted. The document provided is undated. The execution page bears no signatures or dates although, on the face of it, there has been no redaction of such detail.
[34] Ms Dwight had, prior to the hearing, recorded an objection to the admissibility of this document. At the start of the hearing, I heard briefly from
10 Philpott v Noble Investments Ltd, above n 1, at [3].
11 At [88]-[91].
12 At [99].
counsel as to the document. I then provisionally admitted the document subject to an ultimate ruling as to its admissibility, if I found it to be relevant.
[35] In the event, I have not found any aspect of the document to assist in the conclusions I must reach in this judgment. The unredacted parts of the document do little more than reflect the general understanding which the Court was given of the document at the time of the 2012 hearing.
[36] Even if it had contained material arguably relevant to this judgment, I would have nonetheless found that no weight should be attached to the document. As a document which is undated and contains no evidence of execution, it does not support any measure of reliance. Had it done so, there would have remained arguable issues in this caveat jurisdiction as to the particular roles and responsibilities of Applefields and Noble in the context of the 2008 settlement
agreement.13 It would not alter the outcome.
Introduction to the various applications before the Court
[37] The various applications before the Court are those contained, in the case of the caveators, in a third amended notice of interlocutory application dated 7
December 2012 and, in the case of Noble, in a notice of interlocutory application dated 15 October 2012.
“Extension” of Caveat 1 to include Lot 19
[38] The caveators sought an order whereby the Court permitted them to “extend Caveat 1 and lodge it over Lot 19 in addition to Lots 12-18”. The application was opposed by Noble on the ground that there is no jurisdiction to extend a caveat as sought.
[39] Counsel filed conflicting submissions as to the jurisdiction to amend a defective caveat and as to the appropriateness of any amendment.
13 At [99]-[100].
[40] Mr Palmer, at the hearing, advised the Court that this application was no longer pursued in this proceeding (but without prejudice to the jurisdictional issue involved as to whether a “defect” such as omitting to caveat a relevant title is a defect capable of amendment). That application will be dismissed.
Direction of services
[41] The condition at [118](e) of the 2012 judgment relating to the spine road14 referred to “the services that are to be provided off Yaldhurst Road”. The evidence filed in fact indicated that in terms of the subdivision plan the services would come from the south (rather than from Yaldhurst Road to the north). The reference in the order to Yaldhurst Road was a mistake on the part of the Court.
[42] Noble’s application to amend paragraph [118](e) by deleting the words “off Yaldhurst Road” is not opposed by the caveators. It is an appropriate amendment covered by the leave reserved. The amendment will be made in the orders below.
The sliver of Lot 19 required for the spine road
[43] The 2012 judgment imposed at [118](e) a condition on the order made whereby Noble should be allowed to proceed to vest the spine road in the Christchurch City Council, subject to further conditions. Such vesting would lead to a substantial discharge of Caveat 1.
[44] There is, however, a sliver of Lot 19 which is to form part of the spine road. Dealings with Lot 19 are precluded by Caveat 1. The partial release of that sliver of land from Caveat 2 would not detract from the interest which the 2012 judgment found should continue to be protected by Caveat 2.
[45] It was common ground between counsel at this hearing that the significance of the sliver of Lot 19 in relation to the vesting of spine road had been overlooked.
That is not entirely surprising. It is a very small overlap of proposed boundaries in
14 At [118](e).
the context of a proceeding where the parties were concerned with a wide range of detailed matters involved with the subdivision.
[46] The notice of opposition filed by the caveators indicated that it was the wording of Noble’s application to the Lot 19 sliver, rather than the substance of the application, to which opposition was made. The particular pleading of that ground of opposition was in these terms:
In respect of the order sought ... the applicants have already provided formal assurances, through their solicitors, that they will in appropriate circumstances provide a partial discharge of caveat 2 over Lot 19 to the extent necessary to enable the vesting of the Spine Road... The wording of the order sought at 1.2.1 of Noble’s application is such that the applicants must oppose the same.
[47] In the event, Mr Palmer (while he did not withdraw the formal opposition to the wording of the order) saw fit to not develop any submission in opposition.
[48] The amendment to the order sought by Noble is clearly appropriate. The key finding of the Court in this regard was that Noble should be allowed to proceed with the vesting of the spine road (on conditions). It was implicit in that finding that Noble should have the ability (free of caveat) to vest all the land required for the spine road in the Council. The location of the Lot 19 sliver within the spine road (protected by Caveat 2), was a matter of detail which escaped the attention of the parties, and of counsel, and thereby of the Court. It is a matter of detail which should be amended pursuant to the leave reserved. It requires a modification of the order contained at [118](e) of the 2012 judgment relating to the spine road, which will be dealt with in the order made below.
The provision of a discharge of Caveat 1 by the caveators
[49] Noble applies for an amended order (being an amendment of the condition specified in the 2012 judgment at [118](e)) whereby the caveators are to provide a discharge of Caveat 1 insofar as it affects the spine road as shown on Schedules 2 and 3 of the 2012 judgment. Ms Dwight explains that this as an amendment
necessary to deal with what would otherwise be a “chicken-and-egg situation”.
Order [118](e) of the 2012 judgment at present provides that Noble may:15
[i]n the event and at the time that the “spine road” ... is vested in the Christchurch City Council.. have this proceeding brought on for the making of orders that the [caveat in relation to] the balance of land in Lots 12, 13,
14, and 15 should lapse.
An executed partial discharge would enable the vesting to occur, effecting the intention of the order at [118](e), albeit in a different manner.
[50] This application is opposed by the caveators.
[51] Noble’s opposition to the order sought by the caveators in relation to the spine road may be for the main part described, as Ms Dwight did, as resting on the proposition that a requirement upon the caveators to provide a discharge at this point would be premature. The full grounds of opposition to the requirement for discharges at this point as contained in the notice of opposition reads thus:
Spine Road
(e) The applicants have already provided formal confirmation through their solicitors that they will provide a partial withdrawal of Caveat 2 over Lot 19 to the extent necessary to allow the Spine Road to vest, if and only if Caveat 2 over Lot 19 is the only thing preventing the Spine Road from vesting. The failure to vest the Spine Road all the way to Yaldhurst Road means that Lot 9 has no certain route to Yaldhurst Road and its caveatable interest in Lots 11, 12, 13, 14, 15,
16, 17, 18 and 19 remains.
(f) The applicants are prepared to provide a formal and signed undertaking to the Court and to Noble in respect of the formal confirmation referred to in (e) above, if that is necessary.
(g) A partial withdrawal of caveat 2 cannot be registered unless such registration is part of the deposit of the survey plan which vests the Spine Road in Council. Until Noble is in a position to deposit the survey plan and vest the Spine Road (which will turn on the resolution of other aspects of the applications filed by Noble and the applicants) a partial withdrawal of Caveat 2 cannot be registered.
(h) In response to the ground set out at paragraph 2.2.4 of Noble’s
application, the inability of the Spine Road to vest is an unavoidable
15 At [118](e).
consequence of the fact that the applicants have a caveatable interest over the land subject to Caveat 1. In any event, the applicants have seen no evidence that the Spine Road is ready to be accepted for vesting by the Council irrespective of Caveat 1.
(i) The applicants will suffer prejudice if the Spine Road is allowed to vest in the Council in circumstances where caveatable interests arising under Caveat 1 have not been discharged or otherwise resolved.
[52] Ms Dwight, for Noble, characterised the caveators’ opposition as turning in part on a proposition that the caveators’ interests in road access to Yaldhurst Road would arguably not be protected were the spine road to vest. This, submitted Ms Dwight, amounted to an attempt to re-litigate one of the issues resolved by the Court in the June 2012 judgment. There is force in Ms Dwight’s submission as the 2012 judgment, in relation to Caveat 1, proceeded on the basis that the spine road (if vested in accordance with the plans attached to the 2012 judgment as Schedule 2 and
3) would provide the caveators with the road access to which they were entitled. As it is, for the reason I now come to, this decision does not need to turn on that submission.
[53] I find it inappropriate to grant the application of Noble, either in its terms or along its general lines by reason of a clarification of fact which has emerged since the 2012 evidence and hearing. At the 2012 hearing, the evidence was presented and the case argued upon an assumption that the spine road as shown on Schedules 2 and
3 of the judgment that Noble (subject only to having the Caveat 1 removed from the Title) was in a legal position to have the land comprising the spine road vested in the Christchurch City Council. Noble was not in fact in such a position.
[54] In the first schedule to this judgment (which I refer to for convenience as Schedule 5 to distinguish it from the Schedules in the 2012 judgment), there appears an almost identical copy of what was Schedule 2 to the 2012 judgment, showing the layout of the spine road as it joined Yaldhurst Road. I reproduce this coloured diagram from the exhibits produced by Richard Graham, the surveyor involved by Noble in the development. Mr Graham identifies that part of the proposed spine road marked red on Schedule 5 as being now known as Lot 600. The small area coloured blue at the northern (Yaldhurst Road) end of Lot 22 is identified by Mr
Graham as forming part of Lot 22. He and counsel for convenience referred to this
blue area as “the knob”.
[55] Mr Graham then described the situation in relation to Lot 600 and the knob in this way:
Lot 600
13.Lot 600 is located at the northern tip of the spine road and effectively forms the intersection with Yaldhurst Road.
14.At present the intersection of the spine road and Yaldhurst Road is closed to traffic and access for the adjacent landowners from Yaldhurst Road is via Lot 22, crossing the end tip of Lot 22 that is known colloquially as the ‘knob’.
15.The New Zealand Transport Agency will not allow two access routes to be open off Yaldhurst Road at the same time and will therefore not allow the spine road intersection to vest and open until the tip of Lot
22 adjoining Yaldhurst Road (the ‘knob’) closes.
16. Noble does not own Lot 22 and I understand that some of the owners
of Lot 22 have refused to consent to the vesting of the ‘knob’.
[56] The evidence of Mr Graham (which is undisputed) indicates that the expectation concerning the spine road, upon which the 2012 judgment proceeded, was based on incomplete evidence. Contrary to the understanding which the Court was given, Noble was not, and is not, in a position to have the spine road vested in the Council. Transit (the New Zealand Transport Agency) will not permit usage of the spine road intersection at Yaldhurst Road until the Lot 22 access to Yaldhurst Road through the knob is closed. It now emerges that Noble has completed much of the physical work and the legal work associated with the formation and vesting of the spine road, without first securing a solution to overcome the fact that others owned the knob.
[57] In these circumstances, the relationship between the vesting of the spine road in the Council and the provision of discharges of caveat does not involve a simple, two-part “chicken-and-egg” situation as posited by Ms Dwight. There is a third factor in the equation, namely the need for resolution in relation to the knob.
[58] The orders concerning the caveats as reached in the 2012 judgment were made upon the basis of the evidence adduced. Caveat 1 was not to lapse until the spine road vested in the Council. The requirement of the vesting of the spine road was a condition to protect the interests of the caveators. The situation disclosed in the evidence subsequently filed for the purposes of the present applications complicates the interests of the caveators in that it has introduced uncertainty, not only as to the timing, but the very occurrence of the vesting of the spine road.
[59] The present form of the order at [118](e) of the 2012 judgment will continue to serve for the time being the appropriate concern of protecting the interest of the caveator (by ensuring that Caveat 1 will lapse only when Noble is able to ensure that the spine road is vesting). In the meantime, the leave reserved to the parties will protect the parties’ interests in relation to the administrative steps required in relation to discharge of the caveat.
[60] Accordingly, in the orders to be made below, this aspect of Noble’s
application will be dismissed.
The exclusion of Lot 600 from the condition [118](e) of the 2012 judgment
[61] Noble’s notice of opposition includes an application specifically to deal with
the Lot 600 problem identified by the surveyor, Mr Graham.16
[62] The regime in relation to Caveat 1 under the 2012 judgment was that Caveat
1 would not lapse until the spine road as shown in Schedules 2 and 3 to the judgment vested in the Christchurch City Council. The solution to the Lot 600 problem proposed by Noble is that the Court should insert the words “but excluding the Lot marked as Lot 600” between the words “judgment” and “is” in the passage of paragraph [118](e) to which I have just referred. (Noble provided an alternative
form of wording with which I do not deal as it is to very similar effect).
16 See above at [55].
[63] This aspect of Noble’s application must fail for the same reason as that I have discussed in relation to the spine road. It is Noble’s own evidence that Transit will not allow two direct access routes to Yaldhurst Road. The 2012 judgment, including the condition at [118](e), proceeded upon the basis that the vesting of the spine road would protect the caveators’ interest in roading access to Yaldhurst Road. There is no assurance that Lot 22 effects the same outcome. The Court cannot be completely satisfied that the caveators’ legitimate interest would not be prejudiced by removal of Caveat 1. Thus, the approach of the Court of Appeal in Stewart v Kaipara
Consultants Ltd17 is not met.
[64] Accordingly, in the orders to be made below, this aspect of Noble’s
application will also be dismissed.
Easements over Lots 514 and 510
Correct description of Lots 514 and 510
[65] The condition at [118](e) of the 2012 judgment related to Noble’s causing an easement to be registered over “Lots [514] and 510 as they appear on Schedule 4 to this judgment”. The reference ought to have been to Schedule 2 of the judgment, the two pages of which indicate that the correct Lot descriptions ought to have been to “Lots 514 and 510”.
[66] The parties accept that the typographical error should be corrected, as will be the reference to the schedule. That is done in the orders to be made below.
[67] Ms Dwight has referred to evidence indicating that the planning of the subdivision has now proceeded to the point that the previous Lots 514 and 510 have been amalgamated into a single Lot 514. I do not propose to alter the wording of the
2012 judgment to take that into account – that judgment speaks at its date on the
evidence as it was, with Schedule 2 of the 2012 judgment identifying the areas of
17 Stewart v Kaipara Consultants Ltd, above n 3.
land in question. Any subsequent change in the numbering of lots does not alter the identified land.
An easement over Lots 514 and 510 – the very concept
[68] In the 2012 judgment, in relation to Caveat 1, I concluded at [82](e) that the caveat in relation to Lots 13, 14, 15, 16 and 17 would be sustainable to the extent that proposed Lots 514 and 510 (adjoining Lot 22 North-South) represented land in relation to which the caveators had, arguably, a caveatable interest.
[69] In the application now before the Court, Noble does not seek to challenge that finding. Rather, Noble challenges the manner in which that finding then led to protection of the caveators’ interest through the condition imposed in relation to the release of Caveat 1 at [118](e) of the 2012 judgment. One of the pre-requisites to the discharge of Caveat 1 was that:
Noble Investments Limited has caused an easement for right of way and other services to be registered over Lots 514 and 510... in favour of the registered proprietors of Lot 9...
[70] Noble applies for amendment of that aspect of the condition (at [118](e)) and its replacement by registration of a fresh caveat over proposed Lots 514 and 510 only. The principal legal ground relied upon by Noble is that the requirement to register an easement (thereby forming a right of way) would in effect amount to a determination of the parties’s substantive rights, rather than simply continuing the protection afforded by a caveat. Noble also relies upon evidence which it has adduced as to difficulties which might confront Noble as Noble is entirely dependent on Council consent to the formation of any easement and on conditions the Council might impose. As with the legal point, Noble’s submission is that the proper place to work through such matters is in the context of a hearing of substantive rights and not in the context of the caveat jurisdiction which serves to protect arguable interests.
[71] The primary ground of opposition by the caveators to this application is that if the Court were to grant the amendment sought by Noble it would confer on the caveators a lesser degree of protection than the Court considered was appropriate in the 2012 judgment.
[72] Secondly the caveators oppose the application upon the basis that the amendments sought would “significantly prejudice the protection which the 2012 judgment currently provides”.
[73] In his submissions, Mr Palmer for the caveators developed this point. He said that the mere retention of a caveat over Lots 510 and 514 provides no protection for the caveators because it would give rise to the lapsing of a caveat without the creation of the right of way access.
Discussion
[74] The final point developed by Mr Palmer in opposition returns to the caveators’ focus on the performance of purely contractual obligations (in this context in relation to the actual formation of a right of way) which I was at pains in the 2012 judgment to segregate.
[75] Once the Court’s focus remains firmly upon arguable legal interests in land, it is clear that the protection which the Court should normally preserve in a caveat lapsing case where the arguable rights affect part of the caveated land only, is to preserve the operation of the caveat to that part of the land. At the 2012 hearing, no significant submissions were addressed to whether or not Noble should have to move immediately to the registration of an easement, rather than having to accept a caveat in relation to part of its titles. Pursuant to the leave reserved in relation to the conditions, it is appropriate to revisit this issue. When that is done, Ms Dwight’s submission that the requirement of an easement goes beyond what is necessary when there is to be partial retention of the caveat is unanswerable. The fact that by amending the condition, the Court will be reducing a benefit which would have come to the caveators (if Noble was in a position to comply with the condition) is not a proper basis for leaving in place a condition of caveat lapsing which goes beyond what was necessary to protect the arguable interests of the caveators. This is the right time and context in which to redefine the condition so as to fulfil the appropriate purpose of imposing a condition in the first place.
[76] There will accordingly be an order below which has the effect of amending condition [118](e) insofar as it deals with Lots 514 and 510.
Caveat 1 as it affects Lot 11
The issue
[77] The order in the 2012 judgment at [118](d) required Caveat 1 to lapse insofar as it affects Lot 11 (while otherwise preserving Caveat 1).
[78] The caveators apply for an order rescinding this condition in relation to Lot
11. In the alternative, the caveators seek permission to relodge Caveat 1, or a second and amended caveat, over Lot 11. That alternative order would have become relevant had Noble already sealed the 2012 judgment and had the discharge over Lot
11 been effected at the Land Registry Office. That, however, had not happened. Accordingly, the Court is not concerned with this alternative application.
[79] The ground relied upon by the caveators for retention of a caveat over Lot 11 arises from Noble’s now disclosed difficulty in relation to the vesting of the spine road where it joins Yaldhurst Road.
[80] The ground is stated in this way in the caveators’ application:
Because Noble cannot in fact vest at the Yaldhurst Road intersection at present (and possibly ever) the only alternative route for providing legal road connection from Yaldhurst Road to Lot 9 may be through a remodelled Yaldhurst Road intersection over Lot 22 which will of necessity require land currently contained within Lot 11.
[81] Mr Palmer, in the course of his oral submissions, illustrated the caveators’ proposition as to the alternative route onto Yaldhurst Road by reference to a marked up version of a plan prepared by Noble’s surveyors. The plan Mr Palmer spoke to is attached to this judgment, in reduced form, as Schedule 6. Ms Dwight objected to the production of this plan on the basis that it had not been properly produced by a witness. I received the plan upon the basis that it was a document by which Mr
Palmer could illustrate the alternative route. It was not admitted for any purpose of proving any aspect of its content.
[82] This application by the caveators in relation to the caveat over Lot 11 was introduced through a third amendment on 21 November 2012. All the original evidence of Colin Stokes, as the caveators’ principal deponent, had been filed by that date. That evidence does not focus on the reinstatement of the caveat over Lot 11 to protect a remodelled Yaldhurst Road intersection possibility. That possibility was, in terms of the evidence, first addressed by Mr Graham, the surveyor who gave evidence for Noble, when responding to the amended application. In Mr Graham’s evidence, he refutes any suggestion that a remodelling of the Yaldhurst Road intersection would of necessity require access to land contained within Lot 11. He gives various reasons for that conclusion.
[83] Mr Stokes filed a reply affidavit in which, after a point by point critique of Mr Graham’s evidence in this regard, he concludes that the realignment of the spine road along Lot 22 is a realistic possibility.
[84] Ms Dwight objected to the admissibility or reliability of Mr Stokes’s evidence in this regard, given that he is a factual witness and not an expert. For reasons which follow, I do not have a need to resolve either the admissibility of the evidence I have referred to or to reach a conclusion of preferring one conclusion to the other. In this caveat jurisdiction, with purely affidavit evidence, I am not in a position to reach the factual conclusions which Ms Dwight for Noble invites me to reach. The caveators are entitled to have the Court proceed on the basis of what is factually arguable. But, in relation to this issue, I do not find that assists them.
Discussion
[85] The first ground of opposition by Noble to the application in relation to Lot
11 is that Caveat 1 has already lapsed. Put another way, Ms Dwight asserts that the order contained in the 2012 judgment at [118](d) has taken effect (and has not been appealed). The fact that the District Land Registrar has not been asked to register the order does not cut across the fact that the caveat has, by order, lapsed. Ms Dwight
submits that it is not for the Court on these further applications to re-open the order in this regard.
[86] I accept this submission. It is not open for the Court in the circumstances of this case to rescind or otherwise interfere with the effect of that particular aspect of the order.
[87] I am also satisfied for a second reason that it would not be appropriate to entertain either rescission of the order or permission to lodge a further caveat. This may be viewed as either an exercise of the Court’s discretion (as Ms Dwight invited through Noble’s grounds of opposition) or upon the more fundamental proposition that the 2012 hearing was the parties’ opportunity to provide their comprehensive evidence and to have the Court determine (in the “arguable” jurisdiction) the fate of the caveats. I refer to my earlier observations as to the limitations of the caveat
jurisdiction.18
[88] The caveators’ application in relation to Lot 11 will therefore be dismissed in
the orders which follow.
Lot 22 connectivity and stormwater services
[89] Although the caveators made applications in relation to each of these, namely Lot 22 connectivity and stormwater, it is convenient to deal with them together as the Lot 22 connectivity application is expressly linked to the stormwater application.
[90] Rather than paraphrase, I reproduce the two orders sought in the caveators’
application as finally amended:
Lot 22 Connectivity
(a) To amend/clarify the orders at paragraph [118](e) of Associate Judge Osborne’s judgment dated 28 June 2012 (“the judgment”) to provide that the respondent (“Noble”) shall not have the right to apply to the Court to lift Caveat instrument no. 8322656.1 (Caveat 1) over the balance of the land in Lots 12, 13, 14, 15, 16, and 17 at the time that the Spine Road, as shown on Schedules 2 and 3 to this judgment, is
18 See above at [27]-[31].
ready to be vested in the Christchurch City Council (“the Council”)
...
...
(ii) And subject also the requirements of the orders in
1(b) below, the Council has given its permanent irrevocable undertaking/agreement that it will permit full-width vested roading connection to a Living G Zone standard from the Spine Road to reach the Northern Boundary of Lot 9 (via formation of the East/West leg of Lot 22) on conditions that Noble is able to satisfy to the requirements of the applicants or the Court.
Stormwater
(b) To amend/clarify the orders at paragraph [118](f) of the judgment to recognise further to paragraph [115](c) of the judgment that all of the lots still subject to a caveat (Lots 12-18, and Lot 11, if the order sought in paragraph 1(d) of this application below is granted) are potentially affected by the stormwater drainage as described below, and to provide that Noble’s right to apply to lapse the caveats in relation to land unaffected by the stormwater drainage does not arise until such time as Noble is in a position to demonstrate, to the reasonable satisfaction of the applicant or the Court, that:
(i) a certain and legally secure location for and route to the stormwater basis and pipes required for Lot 9, the East/West leg of Lot 22 as widened (if order (a)(i) above is not made) and the road to connect to the South of Lot 9 (shown as catchments B and C, on Noble’s current stormwater plans – “basins B and C”); and
(ii) the necessary easements/access right to be created in respect of these basins and pipes in favour of the applicants’ land, Computer Freehold Register
440793 (Canterbury Land Registration District).
[91] Mr Palmer clarified the use of the term “connectivity” in this way. He indicated that it is used to indicate a lack of impediment to Lot 9 (as proposed to be subdivided) being connected to Yaldhurst Road. He submits that on the evidence this requires formation of at least Lot 22 east-west (to use the description in the 2012 judgment).
[92] In his written submissions, Mr Palmer came to what he called the crux of the issue from a caveat perspective. It is that, if Noble is permitted to partially lapse Caveat 1 without connectivity (from Lot 9 through) to Yaldhurst Road, then Noble’s
ability to form the arguably required full width roading from Yaldhurst Road to and past Lot 9 is likely to be precluded.
[93] This submission is put forward in the light of the fact that an issue has arisen since the 2012 judgment, namely whether the northern end of the spine road, intersecting with Yaldhurst Road, can vest.
[94] Mr Palmer, drawing on evidence of Mr Stokes, submits that there is no assurance that the caveators, as owners of Lot 9, will be permitted by the Council to take their roading and service connections from the northern boundary of Lot 9 to the spine road, even if the spine road comes to the boundary of Lot 22, as it does.
[95] Mr Palmer relied also upon an affidavit of Lindsay Lloyd filed in reply. Mr Lloyd gives evidence as a conveyancing expert having significant experience in relation to subdivisions. Mr Lloyd draws the distinction between Council approval of a subdivision and the conditions of a resource consent (which in this case require compliance with the Council’s infrastructure design standard). Mr Lloyd then comments, with reference to the evidence of others, on the position relating to stormwater. He identifies areas of factual uncertainty in the way stormwater disposal will be dealt with. He also identifies the “unresolved issue” over the vesting of the spine road. Mr Lloyd concludes that the “better course” (apparently meaning better than allowing Noble to proceed as it wishes):
would be to enable the implementation of the subdivision of Lot 9 in conjunction with the first stage vesting of the subdivision while Noble still have the consent and the control to do so.
[96] In relation to the evidence as to potential stormwater drainage, Mr Palmer referred again to the evidence of Mr Stokes, in reply to the surveyor, Mr Graham. It will be seen from the 2012 judgment that as at mid-2012, the precise routing of stormwater drainage from Lot 9 and surrounding area was uncertain. Indeed, Mr Graham’s expectations as to what point stormwater would be drained changed in the course of filing of evidence for that hearing.19 I concluded that the evidence
indicated that until Noble designated its precise routing for stormwater away from
19 Philpott v Noble Investments Ltd, above n 1, at [109]-[112].
Lot 9, the probability was that stormwater would be routed over Lots 16, 17, 18 or
19 or a combination thereof.20
[97] Noble had argued for the complete release of Caveat 1 so far as it affected those Lots (16, 17, 18 and 19) on the grounds that the likely solution was now to take stormwater drainage to the west. I found in the 2012 judgment that the caveators’ reasonably arguable equitable interest had to be protected by preserving the caveats until and unless Noble was able to demonstrate a secure route for stormwater drainage over land unaffected by the caveats – see the order at [118](f).
[98] The caveators’ case in relation to stormwater drainage is that caveats now need to be retained across all of Lots 12-19 in relation to stormwater. Whilst I detect nothing in the admissible evidence to identify a real possibility that stormwater from Lot 9 would be drained to Lots 12, 13 or 14, the fresh evidence adduced in relation to these applications suggests that there is now a real possibility that drainage from Lot 9 or the surrounding areas might be routed in part to Lot 15 (and/or a combination of Lots 16, 17, 18 and 19). (Dealings over Lot 19 being protected by Caveat 2 whereas it is dealings over the other caveated Lots that are protected by Caveat 1).
Discussion
[99] The consideration of these particular applications (relating to connectivity and stormwater drainage) attracts the same reservations as in relation to two other applications previously discussed. The 2012 judgment is a judgment binding upon both parties and was not the subject of appeal by either.
[100] To the extent the 2012 judgment allowed for lapsing upon the vesting of the spine road (and the satisfaction of other conditions), it turned on a finding that such vesting would protect the caveators’ interests. The further evidence and arguments now put forward should not be permitted to cut across those earlier findings. The
caveators, through the summary process of the caveat lapsing procedures, are
20 At [115](c).
entitled to retain the benefit of the non-lapsing order to the extent it operates and subject to the conditions imposed.
[101] Similar considerations apply in relation to the stormwater issues. The caveators obtained the protection afforded by the non-lapsing of the caveats with the condition set out in the judgment at [118](f) then operating and now continuing to operate so as to place an onus upon Noble, if it seeks an order that the caveats lapse, to demonstrate a secure route for stormwater drainage.
[102] None of these is a new issue. The rights asserted by the caveators date back to agreements entered into 2002 and 2008. The caveats have been in place since
2008 and 2009, respectively. I refer to my earlier observations as to the limitations of the caveat jurisdiction.21
[103] Accordingly, there will be no alteration of the orders as they stand on the basis of the caveators’ arguments as to connectivity and stormwater drainage. Those applications will be dismissed.
Costs
[104] Counsel agreed that the appropriate course was to reserve costs. Having regard to the pursuit of application on both sides and the differing measures of success, the reservation of costs is clearly appropriate. If the parties cannot agree costs, then memoranda are to be filed (no more than five pages) with counsel to agree on an order of filing and to file the first memorandum in any event no later than 2 April 2013, with the responding memorandum no later than five working days
after that. The Court will then deal with costs on the papers.
21 See above at [27]-[31].
Orders
[105] I order:
(a) There is to be added after paragraph [118](c) of the 2012 judgment the following condition:
(ca) It is a condition of the order numbered (a) above that caveat instrument no. 8003770.1 shall lapse insofar as a portion of Lot 19 overlaps the land required for the spine road as shown on Schedule 2.
(b) Paragraph [118](e) of the 2012 judgment is amended by deleting the
words “off Yaldhurst Road”.
(c) Paragraph [118](e) of the 2012 judgment is further amended by replacing the words “Lots 504 and 510 (as they appear on Schedule 4 to this judgment)” with the words “Lots 514 and 510 (as they appear on Schedule 4 to this judgment).”
(d)Paragraph [118](e) of the 2012 judgment is further amended by deleting the words from “and Noble Investments Limited has caused
...” down to “... (of any subdivided lot thereof)” and adding at the conclusion of [118](e) in place of the words “the making of orders that the balance of land in Lots 12, 13, 14, 15 should lapse” the words “the making of orders that Caveat instrument 8003770.1 shall lapse in relation to Lots 12, 13, 14 and 15 but not in relation to any land contained within Lots 514 and 510 as shown on Schedule 4 hereto.”
(e) The caveators’ application for an order rescinding the condition in paragraph [118](d) of the 2012 judgment in relation to Lot 11 or alternatively for an order permitting the caveator to relodge caveat instrument 8322656.1 is dismissed.
(f) Noble’s application for an amendment to paragraph [118](e) of the
2012 judgment whereby the caveators would be required to provide a
discharge of caveat insofar as it affects the spine roads shown on
Schedules 2 and 3 of the 2012 judgment is dismissed.
(g) Noble’s application for an order amending paragraph [118](e) of the
2012 judgment to include the words “but excluding the Lot marked as
Lot 600” is dismissed.
(h)The caveators’ applications for orders amending or clarifying paragraphs [118](e) and [118](f) as to connectivity and stormwater are dismissed.
The caveators’ application for an order permitting them to extend
Caveat 1 and lodge it over Lot 19 is dismissed. (j) The cost of all applications are reserved.
Associate Judge Osborne
Solicitors:
Buddle Findlay, PO Box 322, Christchurch 8140
Cavell Leitch Pringle & Boyle, PO Box 799, Christchurch 8140
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