Re Marriner Property Ltd
[2020] NZHC 1747
•17 July 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-000131
[2020] NZHC 1747
UNDER Sections 316 and 317 of the Property Law Act 2007 IN THE MATTER OF
an application by MARRINER PROPERTY LIMITED for orders extinguishing an easement pursuant to ss 317 and 317 of the Property Law Act 2007
On the Papers Counsel:
K M Paterson & O D Peers for the Applicant
Judgment:
17 July 2020
JUDGMENT OF DOOGUE J
This judgment was delivered by Justice Doogue on 17 July 2020 at 4.45 pm
pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
Solicitors:
Buddle Finlay, Christchurch
RE MARRINER PROPERTY LIMITED [2020] NZHC 1747 [17 July 2020]
Introduction
[1] Marriner Property Limited (MPL) is the equitable owner of 11 Marriner Street, Sumner, Christchurch (the property), being the nominated purchaser under an unconditional agreement for sale and purchase between Peterborough 15 Limited and the majority of the owners of the unit plan development on the property.
[2] MPL plans to develop the property by cancelling the existing unit plan and subdividing the property into five fee-simple lots.
[3] The application is brought because the property is subject to a right of way easement. MPL seeks the extinguishment of the easement.
[4] All relevant parties have been served, public advertisement has taken place and no party has expressed an interest in joining the proceeding or opposing the orders sought. This matter proceeds by way of formal proof.
Background
[5] The property comprises an area of land of approximately 4,186 m2 contained in and described as Lot 1 DP 76630. The property is the subject of a unit plan development created in 1998, under the Unit Titles Act 1972.
[6] The unit title development was known as the Cave Rock apartments, a development which comprised 50 units. The Cave Rock units were damaged in the Canterbury earthquake sequence. Some of the units were demolished after the earthquakes and some remain standing today, albeit damaged and unoccupied.
[7] Peterborough 15 Limited entered into an agreement for sale and purchase with the majority of the owners of the Cave Rock units and the Body Corporate to purchase the property on 15 March 2019 (the agreement). Peterborough 15 Limited has nominated MPL to complete the purchase of the property under the agreement.
[8] The agreement became unconditional on 20 December 2019, after the High Court released its decision in White v VXJ Holdings Ltd.1 This proceeding involved a successful application by the majority of the Cave Rock unit owners, seeking to require the remaining unit owners to sell their units pursuant to the agreement.
[9] The preparatory subdivision work for MPL’s plans to develop the property is well under way. MPL have been working with consultants, who prepared the subdivision consent application that was lodged with the Christchurch City Council on or about 7 February 2020. They are now in negotiations with the Council regarding the consent application, and the conditions of that consent if granted. MPL anticipate this will be granted within the next few months.
Easement – history
[10] The property is subject to a right of way easement in gross to Fletcher Humphreys and Company Limited (FHCL) and George Humphreys (the easement).
[11] The location and dimensions of the easement are shown in the subdivision plan DP 76630. The easement runs through proposed Lots 3 and 4.
[12]Mr Humphreys owned two sections on the property:
(a)Certificate of title CB332/232 dated 21 March 1921 records that Mr Humphreys was a joint owner of a section between the Esplanade and Grafton Street (Grafton Street was subsequently renamed Marriner Street).
(b)Certificate of title CB237/77 dated 7 June 1907 records that Mr Humphreys was the owner of a section between the Esplanade and what was then known as Sumner Road.
1 White v VXJ Holdings Ltd [2019] NZHC 3095.
[13] The easement was created by memorandum of transfer 198838 in 1932, as part of the sale of these two titles. Mr Humphreys and FHCL owned part of the property and transferred it to another entity, Cave Rock Hotel Limited. As part of this transfer, Cave Rock Hotel Limited granted the easement in favour of FHCL and Mr Humphreys.
[14] The memorandum of transfer, at page 3, describes the right of way created on part of CB237/77. It provides:
Cave Rock Hotel Limited ... doth hereby grant to the said George Humphreys and Fletcher Humphreys and Company Limited and their respective agents servants workmen and others wishing to use the same a full and free right-of-way for all purposes on foot and at all times hereafter over that part of the land comprised in Certificate of Title Volume 237 Folio 77 Nine feet in width on the Western boundary of the said parcel of land ...
[15]At page 5 it says further:
THE MAYOR COUNCILLORS AND BURGESSES OF THE BOROUGH
OF SUMNER in pursuance of Section 181 of The Municipal Corporations Act 1920 HEREBY CONSENT to the within Memorandum of Transfer and Grant of Right-of-way Subject to the Right of Way hereby created being kept at all times in a clean and sanitary condition and maintained in good order and repair to the satisfaction of the Sumner Borough Council SUBJECT ALSO to the conditions imposed in respect of private ways and rights-of-way by the Municipal Corporations Act 1920 and by the By-laws of the Sumner Borough Council from time to time in force relating to private ways and rights of way and SUBJECT ALSO to the said Right of Way being formed and laid out to the satisfaction of the Sumner Borough Council and that the area of same be tar sealed and that an electric light shall be erected in the centre of the said Right-of-way to the satisfaction of the said Sumner Borough Council when required.
Mr Humphreys - FHCL
[16] FHCL had family links to Sumner. MPL produced an article from the Sumner Ripples dated 4 November 1916 about Harry Fletcher, a Sumner resident. He was a soldier in the First World War and the son of John Fletcher. Another article said John Fletcher was an owner/partner of FHCL.
[17] It is unclear whether Mr Humphreys also lived in Sumner; however, he owned large areas of land in the Sumner area, including a portion of the property. He also owned land above Sumner on Richmond Hill.
[18] Mr Humphreys died in or around 1934, only a few years after the Easement was registered.
[19] Mr Humphreys' associated company, FHCL, changed its name in 1938 to Citmart (1983) Limited in 1983, and in 1985 to Discount Centre Limited. Discount Centre Limited was removed from the companies register on 28 February 1990.
Why the easement should be extinguished
[20] It is not entirely clear why Mr Humphreys and FHCL required the registration of the easement on the property. The easement provides access directly from Marriner Street onto the Esplanade. It may be that FHCL had, or intended to have, business interests in the surrounding area in Sumner and the access rights provided under the easement were beneficial for that reason.
[21] Whatever the case, it is clear that the easement has not been used as a right of way for some decades. The Cave Rock apartments were built in 1997-1998, and apartments were built over the easement area.
[22] MPL produced historic aerial imagery for the property site at various date ranges. A snippet image from the period 1945-1949 shows that the easement was formed. Snippets from 1970-1974 show that by this stage, the easement was not being used as a right of way; it had been subsumed within a larger bare section which is capped with a fence boundary on the northern end. By 1980-1984 the easement area appears to have been part of a garden.
[23] By at least 1998 there was no longer any practical purpose for the easement. The developer of the Cave Rock apartments must have been aware that the easement existed but decided they could ignore it without taking any formal steps to remove it from the title. It is reasonable to infer from the circumstances that they considered the easement was redundant, and further that it was extremely unlikely that anyone would ever seek and/or be able to enforce it.
[24] A later image for the period 2010-2015 shows the Cave Rock development constructed over the top of the easement. The easement ran directly underneath the now demolished units 40-44 and 21-23 of the Cave Rock apartments.
The law: extinguishing an easement
[25]Section 317 of the Property Law Act 2007 (the Act) relevantly provides:
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 patties 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; or
(d)the proposed modification or extinguishment will not substantially injure any person entitled; or
…
[26] The parties who once had the benefit of the easement are deceased or no longer exist, and the right of way has not been in use since at least, it seems, the period 1970-1974 (if not earlier). Further, there has been a unit title development constructed over the top of the easement since 1998. These circumstances engage, in particular, ss 317(a)(i), 317(a)(iii) and s 317(d) of the Act.
[27] Pursuant to s 317(1)(b), because of the change in use of the property, the easement now impedes the reasonable use of the property to a different extent from that which could reasonably have been foreseen by the original parties to the easement.
[28] The easement no longer serves any purpose and, it appears, has not done so for a long time. I find that the easement is redundant and can therefore be extinguished.
Leave to commence proceedings by way of originating application
[29] MPL brings its application in the High Court on the basis that s 4 of the Act refers to any Court in which the matter falls to be determined, so that either the District Court or High Court has jurisdiction depending on the manner in which the issue arises. The concurrent jurisdiction of both the District Court and High Court was confirmed in Sutherland v MacAlister:2
I adopt this passage as correctly summarising the law. There is concurrent jurisdiction in the High Court and District Court when the s 316 proceeding is commenced for the purpose of obtaining a s 317 order. On the other hand, pursuant to s 316(a) of the Act, where a proceeding has already been commenced in relation to an easement or covenant, then the s 316 application for a s 317 order may be made in that proceeding, in which event by necessity the s 316 application is filed in the Court in which the proceeding was commenced.
[30] I grant leave to MPL under r 19.5 of the High Court Rules 2016 to bring this application by way of originating application. Rule 19.2 of the High Court Rules does not identify s 316 of the Act as one of the provisions that must be brought under Part 19. By contrast, r 20.13 of the District Court Rules 2014 provides that applications made to the District Court under s 316 of the Act are to be brought by way of originating application.
[31] Therefore, the omission of s 316 of the Act from the equivalent High Court Rule (r 19.2) may be an oversight. But, in any event, there appears to be no sound reason why applications made to the High Court under s 316 of the Act should not also be brought by way of originating application. The originating application process is more efficient and appropriate for s 316 applications than a
2 Sutherland v MacAlister (2011) 11 NZCPR 732 (HC) at [24]."
proceeding brought by way of statement of claim, particularly where there are no named parties.
Orders
[32]Orders shall issue:–
(a)granting permission to commence this proceeding by way of originating application under part 19 of the High Court Rules 2016; and
(b)extinguishing the right of way in gross created by transfer 198838 over the land marked B on DP 76630 at 11 Marriner Street, Sumner, Christchurch.
Doogue J
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