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Re Avlis Ltd

Re Avlis Ltd

Case [2022] NZHC 1157 24 May 2022

Covenants

Modification of Covenants

Dedication and Transfer

Without Notice Proceedings

Property Law

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-000184

[2022] NZHC 1157

UNDER Sections 316 and 317 of the Property Law Act 2007 and pts 7 and 19 of the High Court Rules 2016

IN THE MATTER

of an application for an order by Avlis

Limited that covenants be modified under s 317 of the Property Law Act 2007

BETWEEN

AVLIS LIMITED

Applicant

Hearing: On the papers

Counsel:

P J Woods and M J McConway for the Applicant

Judgment:

24 May 2022

JUDGMENT OF NATION J

[1] Avlis Limited (Avlis) wishes to progress a significant residential subdivision in Twizel. To do that, they need to vest certain areas in the Mackenzie District Council as a road. The areas are currently subject to a covenant not to erect a motel on that land and another covenant not to grow trees or plants that would exceed two metres in height which might damage services over the land.

[2] For earlier stages of the development, Avlis had been able to transfer other lots subject to such covenants to the Mackenzie District Council by a process called “dedication and transfer” so that roading and services could be put through. The Registrar General of Land has now advised that this procedure is not permitted for road creation done as part of a subdivision undertaken under the Resource Management Act 1991. Because of this, Avlis says they now need to be able to auto-

Re Avlis Ltd [2022] NZHC 1157 (24 May 2022)

extinguish covenants over the proposed roading area in the subdivision as soon as a piece of land becomes irreversibly earmarked to become a road. They will then be able to vest the roads in the Mackenzie District Council and finish the development.

[3] Avlis seeks to modify the relevant covenants to achieve this through an originating application under ss 316 and 317 of the Property Law Act 2007 with orders to be made on a without notice basis.

The background in detail

[4] Avlis’ subdivision is called Tussock Bend. Some stages of the subdivision have already been subdivided and sold. The current head title, that is still to be subdivided and which is the subject of this application, is Lot 400 Deposited Plan 550232 contained in record of title 947911 (Avlis’ land).

[5] Avlis’ land is subject to “the motel covenant”, being the land covenant in transfer 5420545.4, registered on 3 December 2002. The motel covenant is “not to erect or permit to be erected any motels on the servient lots”. The covenant was created by a number of parties. It affected 19 titles they owned, including the predecessor title to Avlis’ land.

[6] Avlis’ land is also subject to “the tree covenant” which was in transfer 5420545.5 and registered on 3 December 2002 in the same way as the motel covenant. It affected 18 titles owned by the then parties.

[7]The tree covenant provides:

1. The Transferors will not plant or grow any…

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 Re Avlis Ltd

Details

AGLC: Re Avlis Ltd [2022] NZHC 1157
Case: [2022] NZHC 1157
Decision Date: 24 May 2022

CaseChat Overview and Summary

Avlis Limited applied to the High Court for an order modifying certain covenants to allow for the development of a residential subdivision in Twizel. The covenants in question restricted the erection of motels on the land and the growth of trees or plants exceeding two metres in height, which might damage services over the land. The court was required to decide whether it was appropriate to hear the application without notice to the owners of the lots benefiting from the covenants and whether the territorial authority should be served with the application. The court found that it was in the interests of justice to hear the application without notice due to the impracticality and unreasonableness of serving all adjacent owners, as well as the urgency of the situation given the number of lots in stage six of the development that were conditional on titles issuing by 22 December 2022. The court also found that it was appropriate to direct that Avlis serve the Mackenzie District Council with copies of all documents filed in these proceedings, together with a copy of this judgment. The proceedings were adjourned for a telephone conference with counsel on 10 June 2022 at 9.00 am.

The court granted leave for the proceedings to be brought by originating application under ss 316 and 317 of the Property Law Act. The court found that it was appropriate to hear the application without notice to the owners of the lots benefiting from the covenants as it would be impractical and unreasonable to require the originating application to be served on all adjacent owners. The court also found that it was appropriate to direct that Avlis serve the Mackenzie District Council with copies of all documents filed in these proceedings, together with a copy of this judgment. The court adjourned the proceedings for a telephone conference with counsel on 10 June 2022 at 9.00 am. The court made directions for the Mackenzie District Council to file with the High Court within two weeks of service of the documents a memorandum advising the Court as to whether they wish to be involved further in the proceedings, whether they consent to the modification of the covenants as sought by Avlis, and contact details for either the Council or their legal representatives with regards to the proceedings.

Orders