Re Barfilon Investment Ltd - [2019] NZHC 780

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-1251

[2019] NZHC 780

IN THE MATTER

AND

of Part 7 and 19 High Court Rules and

ss 316 and 317 of the Property Law Act 2007

IN THE MATTER

of an application by BARFILON INVESTMENT LIMITED, L & W RISING LIMITED, BURBERRY DEVELOPMENTS LIMITED and BURBERRY ROAD 32

LIMITED for an order modifying covenant Applicants

Hearing: 8 March 2019

Appearances:

D J Neutze and C Robertson for the Applicants

J G Goodyer for Interested Party Elly S-Y Pan in support
R O Parmenter for Interested Parties Frewin/Duggan and Guthrie

Judgment:

11 April 2019

JUDGMENT OF GAULT J

This judgment was delivered by me on 11 April 2019 at 11:00 a.m. pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

RE BARFILON INVESTMENT LTD, L & W RISING LTD, BURBERRY DEVELOPMENTS LTD and BURBERRY ROAD 32 LIMITED [2019] NZHC 780 [11 April 2019]

[1] The four applicants each own a property in Drury, South Auckland.1 Those four properties, and other neighbouring land, are encumbered by a covenant registered on the various titles that precludes relatively small or low-cost dwellings.2 The applicants seek an order modifying the covenant so that it no longer applies to their properties, in reliance on ss 316 and 317 of the Property Law Act 2007 (the Act).

[2] The application arises because the applicants, in conjunction with a developer, Karaka and Drury Consultant Ltd (KDCL), wish to have their properties developed as part of a development in Drury, known as the Auranga Project, under a resource consent issued by Auckland Council on 10 August 2016 and in accordance with the Housing Accords and Special Housing Areas Act 2013 (HASHAA).

[3] It is common ground that the covenant prevents development in accordance with the resource consent. The Auranga Project will involve a mix of stand-alone houses, terraced homes and manor apartments on land that is currently used for farming and/or lifestyle blocks. It will also include affordable housing under HASHAA.

[4] The application was served on the owners of each of the other 15 properties subject to the covenant as well as Auckland Council in accordance with s 316 of the Act. Owners of two of the 15 properties have consented to the application, including Ms Pan, whose counsel, Ms Goodyer, appeared in support. Owners of two other properties have confirmed they do not oppose. Owners of another two properties oppose the application – the owners of 5 Burberry Road and 18 Burberry Road.3 The remainder have taken no steps.

Factual background

[5] The covenant was executed in 1995 following the subdivision of some 57 hectares of land for the purposes of sale of those lots comprising rural residential lots

1 Barfilon Investments Ltd – 132 Bremner Road; L & W Rising Ltd – 138 Bremner Road; Burberry Developments Ltd – 31 Burberry Road; and Burberry Road 32 Ltd – 37 Burberry Road.
2 Land…

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: [2019] NZHC 780
Decision Date: 11 April 2019

CaseChat Overview and Summary

Barfilon Investment Ltd, L & W Rising Ltd, Burberry Developments Ltd and Burberry Road 32 Ltd (the applicants) seek an order modifying a covenant that restricts the type of dwelling that may be built on their properties in Drury, South Auckland. The covenant, which restricts the size and cost of dwellings to be built, was created in 1995. The applicants wish to develop their properties as part of a larger development in Drury, known as the Auranga Project. The applicants rely on ss 316 and 317 of the Property Law Act 2007. Owners of two of the 15 other properties subject to the covenant consented to the application. Owners of two other properties do not oppose. Owners of two other properties oppose the application – the owners of 5 Burberry Road and 18 Burberry Road. The remainder have taken no steps. The key issues were whether there had been a change of circumstances since the covenant was created such that it ought to be modified, whether continuation of the covenant 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 at the time of its creation, and whether the proposed modification of the covenant would substantially injure any of the interested parties. The Court found there had been a change of circumstances since the covenant was created, the continuation in force of the covenant 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 at the time of its creation, and the proposed modification of the covenant would not substantially injure any of the interested parties. The Court exercised its discretion to modify the covenant. There will be an order that Land Covenant C892866.1 be modified so that it no longer applies to the following four properties: an estate in fee simple in Lot 9 on Deposited Plan 166291, as comprised in Unique Identifier NA100D/690; an estate in fee simple in Lot 1 on Deposited Plan 376355, as comprised in Unique Identifier 307027; an estate in fee simple in Lot 10 on Deposited Plan 166291, as comprised in Unique Identifier NA100D/691; and an estate in fee simple in Lot 2 on Deposited Plan 376355, as comprised in Unique Identifier 307028. There is no order as to costs.

Orders