Sanctuary Community Organic Garden Mahi Whenua Incorporated v Attorney-General
[2025] NZHC 1240
•30 May 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-2084
[2025] NZHC 1240
BETWEEN SANCTUARY COMMUNITY ORGANIC GARDEN MAHI WHENUA INCORPORATED
ApplicantAND
THE ATTORNEY-GENERAL on behalf of the MINISTRY OF HOUSING AND URBAN DEVELOPMENT
Respondent
Hearing: 12 December 2024 Appearances:
WA McCartney and JEG San Diego for the Applicant AM Cameron for the Respondent
Judgment:
30 May 2025
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 30 May 2025 at 10 am pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Cowan Law, Auckland
Greenwood Roche, Wellington
SANCTUARY COMMUNITY ORGANIC GARDEN MAHI WHENUA INC v MINISTRY OF HOUSING AND URBAN DEVELOPMENT [2025] NZHC 1240 [30 May 2025]
Table of Contents
Introduction [1]
Relevant legal principles [16]
Is it reasonably arguable that cl 25.4 creates a sufficient interest in the land to support a caveat? [17]
Requirements for easement in gross [18]
Is it reasonably arguable there is burdened land? [22] Is it reasonably arguable the grantee and the burdened owner are different persons? [25]
Is it reasonably arguable the right is capable of being the subject of a grant? [29]
Is the right sufficiently clear? [31]
Is it reasonably arguable that the right is not so precarious that the right is liable to be taken away? [80]
Is it reasonably arguable that the right is not so extensive or invasive as to oust
the burdened owner from the enjoyment and control of the burdened land? [81] Is it reasonably arguable that the right does not impose on the burdened owner an obligation to spend money or do anything beyond mere passivity? [83]
Conclusion on capacity to be subject of grant [85]
Is it reasonably arguable there was consideration? [86]
Is it reasonably arguable there was a sufficient record in writing? [88]
Conclusion on whether it is reasonably arguable that cl 25.4 creates a sufficientinterest in the land to support a caveat [89] If so, is it reasonably arguable that cl 25.4 confers a benefit on the Society capable of enforcement under s 17 of the CCLA? [90]
Do the interests of justice weigh in favour of the caveat being allowed to
lapse? [97]
Further orders [101]
Corrected respondent [102]
Result [105]
Costs and conditions [106]
Introduction
[1] This is an application by Sanctuary Community Organic Garden Mahi Whenua Incorporated (Society) to sustain a caveat lodged in May 2024 in respect of a community garden in Mount Albert at a site which the Society says has been cultivated as a garden since pre-European times (Community Garden).
[2] The Society is a registered charity formed in 2017 for the purpose of preserving and maintaining the Community Garden. Until recently when development work began on areas adjacent, the Society’s evidence is that the Community Garden was open to the public at all times.
[3] The 0.7 hectare garden sits within approximately 39.6 hectares of land purchased by the Crown from Unitec Institute of Technology (Unitec) in February 2018. In a March 2018 variation to the sale and purchase agreement a clause was added in relation to the Community Garden, but the parties are in dispute as to the meaning of that clause.
[4] Clause 25.4 is critical to the issues in this application and so I set it out in full below, replacing references to the purchaser with the Crown, and the vendor with Unitec:
25.4 Community gardens
(a)The [Crown] acknowledges the cultural and historical significance of the gardens and fruit forest (occupying up to 7000 square metres) (Community Gardens) currently situated on part of what will become Lot 4 following the Subdivision and agrees to consult with Unitec, Iwi and Kaumatua in agreeing and documenting an arrangement for the ongoing use and preservation of those gardens.
(b)To assist the [Crown] in respect of the matters set out in clause 25.4(a), following the date that this agreement is unconditional:
(i)[Unitec] will provide written notice to the Sanctuary Community Gardens Mahi Whenua Incorporated (Society) (being the current occupiers of the Community Gardens) that [Unitec] will transfer ownership of the property including the Community Gardens on Lot 4 to the [Crown] on the settlement date; and
(ii)the [Crown] and [Unitec] will work collaboratively with other interested groups (including Iwi and Kaumatua) in relation to the proposed arrangements for the Community Gardens in order to:
(A)have formal documentation finalised before settlement; and
(B)agree plans to preserve the Community Gardens and demonstrate the cultural links with other sites within [Unitec]'s Adjacent Land and wider environs that commemorate early occupation by Māori (notably the spring Te Puna, the Marae on [Unitec's] Adjacent Land, and the landing site of the waka Mataatua).
(c)the [Crown] recognises that the gardens to be preserved may serve multiple purposes, such as enjoyment of students, visitors, residents and the wider community; provision of food to residents; source of future archaeological study; and possible use as an education resource by [Unitec].
[5] Section 138 of the Land Transfer Act 2017 (LTA) provides that a party is able to lodge a caveat against dealings with the land “whether capable of registration or not”.1 However, a personal or contractual right is not enough, the caveator must show a current entitlement to a beneficial interest in the land under the caveat.2
[6]The interest claimed by the Society is set out in the caveat as follows:
Estate or Interest Claimed
1.An easement in gross created by a written agreement for sale and purchase made on or about 5 March 2018 between Unitec New Zealand Limited as vendor and the Ministry of Business Innovation and Employment, as agent for the registered owner Her Majesty the Queen and her successors, which includes His Majesty King Charles.
2.At the date of contract, the caveator, Sanctuary Community Organic Garden Mahi Whenua Incorporated was an occupier and user of a community garden on the land.
3.The easement provides for preservation of the garden and continued use by the caveator in perpetuity. It is, or includes, a profit à prendre.
4.The part of the land containing the garden is within the co-ordinates: a. -36.878093°S, 174.705646°E
b. -36.877645°S, 174.704954 °E
c. -36.877329°S, l 74.704979°E
d. -36.877110°S, 174.705064°E
e. -36.876982°S, 174.705279°E
f. -36.877608°S, 174. 706 l 83°E
[7] At the time the caveat was lodged, the Society had not been provided with a full copy of the 13 February 2018 agreement for sale and purchase between Unitec and the Crown (Agreement) or the 12 March 2018 variation adding cl 25.4 (March 2018 Variation).
[8] The Crown submits that the Society’s application to sustain its caveat must be considered against the background that the land over which the caveat has been lodged
1 Land Transfer Act 2017, s 138(1)(a).
2 Guardian Trust & Executors New Zealand Ltd v Hall (No 2) [1938] NZLR 1020 (CA) at 1025;
Philpott v NZI Bank Ltd (1990) ANZ ConvR 242 (CA) at 246.
is subject to rights of first refusal under the Ngā Mana Whenua o Tāmaki Makaurau Collective Act 2014 (Redress Act) and that the development of the 39.6 hectares of land is being undertaken pursuant to a housing protocol negotiated between the Department of Building and Housing and the Tāmaki Collective (Protocol).
[9]A principal policy adviser for the Ministry of Housing and Urban Development
- Te Tūāpapa Kura Kāinga (HUD), Hannah McGregor, has sworn an affidavit in support of the Crown’s opposition. Ms McGregor’s evidence is that the practices and processes surrounding the Protocol entered into by HUD’s predecessor were well- established by the time the land was acquired by the Crown from Unitec.
[10] Ms McGregor says that the Protocol requires that before land subject to a right of first refusal under the Redress Act can be disposed of for state housing purposes, the holder of the right of first refusal must first be provided with the opportunity to develop the land for housing, ahead of other Crown agencies and entities or the private sector. Ms McGregor says the purpose of the Protocol was to enable iwi and hapū of the Tāmaki Collective to build an economic base for their members.
[11] Ms McGregor further explains how the Crown’s Treaty settlement obligations under the Protocol were engaged to provide the three rōpū of Ngā Mana Whenua o Tāmaki Makaurau (Marutūāhu, Ngāti Whātua and Waiohua-Tāmaki) (together Rōpū) with the opportunity to deliver housing projects on the land purchased from Unitec. Ms McGregor describes the Crown’s role, through HUD, as being primarily to facilitate the housing development consistent with these obligations, including co- ordination between the three Rōpū and adjacent landowners such as Unitec.
[12] Against that background, the Crown submits that cl 25.4 is nothing more than an agreement to agree, or an obligation on the Crown to consult further with Unitec, Iwi and Kaumātua (as defined in the Agreement) in agreeing and documenting an arrangement for the ongoing use and preservation of the Community Garden. Given the background context, the Crown submits it is clear on the face of cl 25.4 that no commitment arose which is capable of giving rise to an easement in gross or a profit à prendre in favour of a third party with no privity of contract, as claimed by the Society.
[13] It is not in dispute that an easement in gross or a profit à prendre are sufficient beneficial interests in the land to sustain a caveat.3 However, the Crown submits the Society does not have such an interest, saying at best the Society and its members are bare licencees under a licence granted by the previous owner, Unitec. A licence only creates personal rights against the original licensor and so does not amount to an interest sufficient to support a caveat.4
[14] The Crown therefore opposes the Society’s application to sustain the caveat on the following grounds:
(a)there is no reasonably arguable case to support the caveatable interest claimed by the Society;
(b)cl 25.4 of the Agreement does not create a proprietary interest in the land for the benefit of the Society that is sufficient to support a caveat;
(c)even if cl 25.4 creates a caveatable interest in land (which the Crown denies), the clause does not confer, or purport to confer, a benefit on the Society which is capable of enforcement under s 17 of the Contract and Commercial Law Act 2017 (CCLA); and
(d)the interests of justice weigh in favour of the caveat being allowed to lapse.
[15] I set out the legal principles relevant to an application to sustain a caveat below before considering the following issues:
(a)Is it reasonably arguable that cl 25.4 creates a sufficient interest in the land to support a caveat?
3 DW McMorland and others, Hinde McMorland & Sim (online ed, LexisNexis) at [10.009](t) and (u).
4 At [10.010](b).
(b)If so, is it reasonably arguable that cl 25.4 confers a benefit capable of enforcement by the Society under s 17 of the CCLA?
(c)Do the interests of justice weigh in favour of the caveat being allowed to lapse?
Relevant legal principles
[16] Section 143 of the LTA sets out the requirements for an application to sustain a caveat. The principles applying were summarised by the Court of Appeal in Green & McCahill Holdings Ltd v Ara Weiti Development Ltd:5
[80]The core principles covering applications to sustain caveats under s 143 of the LTA are those set out in this Court’s decision in Philpott v Noble Investments Ltd (drawing in turn on our earlier decision in Sims v Lowe): 6
(a)The onus is on the applicants to demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively;
(b)It is enough if the applicants put forward a reasonably arguable case to support the interest they claim;
(c)The summary procedures involved in applications of this nature are not suited to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained — either because there is no valid ground for lodging it in the first place, or because such a ground no longer exists; and
(d)Where an applicant has discharged the burden upon it, the Court retains discretion to remove the caveat which it exercises on a cautious basis. Before it does so the Court must be satisfied that the caveator’s legitimate interest would not be prejudiced by removal.
…
[83] Although summary process does not permit close engagement with contested facts, the court must still assess the arguability of the asserted case of a proprietary right realistically and interrogate the documentary record. As the Privy Council said in Eng Mee Yong v Letchumanan, a court is not required:7
… to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement in an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself it may be.
5 Green & McCahill Holdings Ltd v Ara Weiti Development Ltd [2022] NZCA 218.
6 Philpott v Noble Investments Ltd [2015] NZCA 342 at [26]; Sims v Lowe [1988] 1 NZLR 656 (CA) at 659–660. Philpott was referred to with approval by the Supreme Court in Melco Property Holdings (NZ) 2012 Ltd v Hall [2022] NZSC 60, [2022] 1 NZLR 59 at [56].
7 Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 335–337.
Is it reasonably arguable that cl 25.4 creates a sufficient interest in the land to support a caveat?
[17] As set out in the introduction, the interest claimed in the caveat is an easement in gross which is, or includes, a profit à prendre. The issue is whether the Society can show that such an interest is reasonably arguable on the facts of this case.
Requirements for easement in gross
[18] An easement is a right of use granted by an owner of land to another person over their land falling short of possession.8 The land subject to the right of use or burden is called the burdened land and the owner of that land, the burdened owner. If there is land that enjoys the benefit of the easement, it is called the benefited land. But if there is none, there can still be an easement, but it will be an ‘easement in gross’.9
[19] For a contract to create an equitable easement in gross, as is claimed here by the Society in reliance on cl 25.4, the essential characteristics are:10
(a)the existence of burdened land;
(b)the grantee and the burdened owner must be different persons; and
(c)the right must be capable of being the subject of a grant.
[20] The Crown further submits that if the Society is relying on a contract to create the easement, not only must the right granted possess the essential characteristics of an easement in gross, but there must also be valuable consideration and the requirements in s 24 of the Property Law Act 2007 (PLA) for a sufficient record in writing must be satisfied, or a sufficient act of part performance.
[21] As accepted by the Crown and set out above, for the caveat to be sustained, the Society only has to establish that its position is reasonably arguable. I therefore
8 DW McMorland and others, Hinde McMorland & Sim, above n 3, at [16.003].
9 Property Law Act 2007, s 291(1).
10 DW McMorland and others, Hinde McMorland & Sim, above n 3, at [16.003]-[16.006].
consider whether the Society has established that it is reasonably arguable that these requirements can be made out.
Is it reasonably arguable there is burdened land?
[22] There cannot be an easement unless there is burdened land for which the area has been defined with sufficient certainty.11
[23] Here, the Society claims an easement in gross over land now owned by the Crown, referring in its caveat to coordinates within the larger parcel of land to which the title relates.
[24] It is therefore reasonably arguable that, if the other essential characteristics are made out, there will be burdened land.
Is it reasonably arguable the grantee and the burdened owner are different persons?
[25] The Crown submits that the Society's first difficulty is the apparent absence of a grantee. While the Crown accepts cl 25.4 identifies the Society as the “current occupiers of the Community Gardens”, the Crown says the clause does not seek to confer a benefit in favour of the Society over the land.
[26] The Society’s position is that the wording of cl 25.4(a) makes it clear that Unitec and the Crown agreed that the Community Garden was to be preserved and only the mechanics of implementing the preservation are still to be agreed. With preservation as a given, the Society submits cl 25.4 recognises the Society as the grantee because it refers to the Society as the current occupiers and requires the Society to be notified of the sale in writing.
[27] I accept that if cl 25.4 is interpreted so that preservation is a given, as the Society submits, then the reference to the Society being the current occupiers and the notice requirement would mean it is reasonably arguable the Society is a grantee. But this depends on the interpretation of cl 25.4 and whether it is reasonably arguable that preservation of the Community Garden was agreed.
11 DW McMorland and others, Hinde McMorland & Sim, above n 3, at [16.003].
[28] The interpretation of cl 25.4 is also the focus of the next question, whether it is reasonably arguable the right is capable of being the subject of a grant. I therefore proceed on the basis that the grantee will be a different person to the burdened owner if the interpretation put forward by the Society is arguable.
Is it reasonably arguable the right is capable of being the subject of a grant?
[29] A right is capable of being the subject of a grant if the following requirements are met:12
(a)the easement is in sufficiently clear terms;
(b)it is not so precarious that it is liable to be taken away by the burdened owner;
(c)it is not so extensive or invasive as to oust the burdened owner from the enjoyment and control of the burdened land; and
(d)it does not impose on the burdened owner an obligation to spend money or do anything beyond mere passivity.
I consider each of these four requirements below.
Is the right sufficiently clear?
[31] The Crown submits that the right is not particularly well-defined, either in the caveat itself, the Society’s evidence, or its submissions. The Crown says the caveat as lodged does not identify anything other than “the preservation of the garden and continued use by the caveator in perpetuity” and “… is, or includes, a profit à prendre”.
[32] But the interest claimed in the caveat refers first to it being an easement in gross. A similar right to use a garden annexed to residential properties has been held
12 Schmuck v Opua Coastal Preservation Inc [2019] NZSC 118, [2019] 1 NZLR 750 at [56(c)] per O’Regan J for the Court (using the terminology of the Property Law Act 2007 and Land Transfer Act 2017, so replacing “servient owner” with “burdened owner” and “servient tenement” with “burdened land”).
to be an easement,13 as have rights to use a lake and its foreshore for recreational purposes.14
[33] The right claimed in the caveat is therefore sufficiently defined but the question is whether it is reasonably arguable that cl 25.4 grants the right claimed.
[34] This requires interpretation of clause 25.4. I briefly set out the principles that apply:
(a)When interpreting a contract, a court is required to adopt an objective approach to ascertain “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”.15
(b)The interpretive exercise needs to take place within the overall context, with the focus “on interpreting the document rather than the particular words.” However, the text remains of central importance and the ordinary and natural meaning will be a powerful indicator of what the parties meant.16
(c)If pre-contractual negotiations shed objective light on meaning they can be relevant and admissible. This means evidence of a party’s subjective intent is not likely to be admissible if it was not communicated before the contract was formed. However, evidence of a common mutual understanding will be admissible.17 Evidence of post-contractual conduct is admissible in the same way, if it tends to prove anything relevant to the objective approach to interpretation.18
13 Re Ellenborough Park [1956] 1 Ch 131(CA), [1955] 3 All ER 667.
14 City Developments Pty Ltd v Registrar-General of the Northern Territory (2000) 156 FLR 1, 135 NTR 1.
15 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) at 912 per Lord Hoffmann; cited in Firm PI 1 Ltd v Zurich Australian Insurance Ltd t/a Zurich New Zealand [2014] NZSC 147, [2015] 1 NZLR 432 at [60]; and endorsed in Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85, [2021] 1 NZLR 696 at [43].
16 Firm PI 1 Ltd v Zurich Australian Insurance Ltd t/a Zurich New Zealand, above n 15, at [63].
17 At [75]–[76].18 Firm PI 1 Ltd v Zurich Australian Insurance Ltd t/a Zurich New Zealand, above n 15, at [84]-[90].
[35] As set out above, the Society submits that cl 25.4 proceeds on the basis that preservation of the Community Garden is a given, including submitting the reference to “the gardens to be preserved” in cl 25.4(c) speaks for itself. The Crown challenges this, saying the clause is no more than an agreement to agree and emphasises:
(a)the central role that was envisaged for Iwi and Kaumatua in discussions which were to follow execution of the Variation;
(b)that the gardens and fruit forest, which comprised the Community Garden, were referred to only as being “currently situated” on the land in issue which the Crown says was an acknowledgement on the part of both the Crown and Unitec that the location of any such future gardens was not fixed; and
(c)the indication in cl 25.4(c) that the gardens may serve “multiple purposes” being reflective of Unitec’s previous confirmation that the Society would not play a formal role in the future of any community gardens on the Land.
[36] Focusing first on the words of cl 25.4, I consider it is reasonably arguable that it is an agreement that the Community Garden was to be preserved with only the arrangements to be documented, as the Society submits.
[37] Clause 25.4(a) begins with the Crown acknowledging the cultural and historical significance of the Community Garden and “agreeing to consult with Unitec, Iwi and Kaumatua in agreeing and documenting an arrangement for the ongoing use and preservation of those gardens.” The subclause does refer to the Community Garden being “currently situated” on part of what will become Lot 4 but it is arguable that the reference is an acknowledgement that the description of the land may change with the development, rather than an indication that the location of the Community Garden may change.
[38] Clause 25.4(b)(i) requires written notice to the Society, describing them as “being the current occupiers of the Community Gardens”. The Crown submits the
reference to the Society being “current occupiers” again supports the Crown’s position that there was no agreement to preserve the Garden. But the reference may instead signify the age of the Garden and the fact that according to the Society’s unchallenged evidence it has been a garden since pre-European times.
[39] The words of cl 25.4(b)(ii)(B) state that to assist the Crown with the matters set out in cl 25.4(a), the Crown and Unitec will work collaboratively with interested groups in order to “agree plans to preserve the Community Gardens.” There is no “if possible” or similar rider to this clause so again I consider it supports the position that the interpretation proposed by the Society is arguable.
[40] Clause 25.4(c) then records that “the Crown recognises that the gardens to be preserved may serve multiple purposes” (emphasis mine). If the clause was intended to allow the parties to attempt to reach agreement on whether to preserve the gardens, one might have expected the italicised part of this subclause to be expressly conditional but again it is not.
[41] As the principles set out above make clear, the words of the contract must be interpreted within their overall context. The Crown says this begins with the signing of the Ngā Mana Whenua o Tāmaki Makaurau Collective Deed 2012 (Redress Deed). The redress provided under the Deed was then confirmed by the Redress Act.
[42] On 5 December 2014 a certificate was registered on the title to the land in issue under s 148 of the Redress Act confirming that the land is subject to a right of first refusal and is subject to Subpart 1 of Part 4 of the Redress Act, which restricts disposal, including leasing of the land.
[43] The Crown did not go so far as to submit that these restrictions prevented an agreement being reached to preserve the Community Garden and there appear to be a number of exceptions to the disposal restrictions. The Crown instead relies on this background as informing the interpretation of cl 25.4.
[44] Ms McGregor records in her evidence for the Crown that at around the same time as the right of first refusal was registered on the title, Unitec separately sought to
consolidate its landholdings through the Wairaka Land Company (WLC), and to guide the urban redevelopment of up to 48 hectares of its land as a “master developer”.
[45] Due to financial difficulties, Ms McGregor says Unitec and WLC decided to move away from a “master developer” role and began looking for purchasers for the land that was surplus to Unitec’s requirements.
[46] Ms McGregor’s evidence is that between November 2017 and February 2018, the Ministry of Business, Innovation and Employment (MBIE), as predecessor to HUD, negotiated with Unitec for the purchase of the land for State housing purposes.
[47] The Agreement for Unitec to sell the land to the Crown was then entered into on 13 February 2018 and, less than a month later, on 12 March 2018, the variation inserting cl 25.4.
[48] Ms McGregor explains that in February 2019, to facilitate the development of the land, the three Rōpū and the Crown completed a high-level masterplan, titled the ‘Reference Masterplan and Strategic Framework. The Masterplan included an intention to incorporate community gardens within the development but was not specific as to where that was to occur.
[49] The Crown’s evidence is that the land that was the subject of the Agreement, along with further land acquired by the Crown, was subsequently divided up roughly into thirds as between the three Rōpū, with the Waiohua-Tāmaki Rōpū having responsibility for developing the land on which the Community Garden is situated.
[50] Ms McGregor explains that the position that HUD has taken throughout its involvement with the land, post-acquisition, is that it is for the three Rōpū, and not HUD, to make decisions about how the land held for State housing purposes is ultimately developed, within the broad parameters of the Crown’s housing objectives.
[51] Ms McGregor says that HUD has engaged directly with members of the Society throughout, including granting temporary occupation to install a pipeline to provide short-term water supply for the Community Garden. The Crown relies on the
email acknowledgement by Trevor Crosby for the Society at this time that it was “not to be regarded as a permanent granting of occupation of the area being used by Sanctuary Gardens […]”. Throughout that engagement with the Society, Ms McGregor’s evidence is that there was an acknowledgement on the part of the Crown and the Rōpū that they were seeking to balance current and future community interests and uses against the need to deliver much needed housing.
[52] Infrastructure works have subsequently been constructed in the vicinity of the Community Garden and in August 2024 and with the support of HUD, resource consent was granted to an entity associated with Ngāti te Ata, one of the constituent iwi of the Waiohua-Tāmaki Rōpū, to construct approximately 509 apartments within the property, including on land that is occupied by the Community Garden.
[53] The Crown refers to a letter of support provided by Unitec saying the development was “an opportunity for Ngāti te Ata to right some of those past wrongs, to repatriate traditional lands of the Iwi, [and] to house its kaumātua, whānau and wider community”.
[54] The Crown submits that cl 25.4 needs to be interpreted against that background. In addition, the Crown relies on a number of clauses in the Agreement itself, including the due diligence condition providing for the Crown to confirm by the nominated date that the property was suitable for the Crown’s requirements, with the due diligence exercise to include, inter alia, “the terms and implications of all encumbrances, rights and interests affecting the title(s) to the property”.
[55] Ms McGregor’s evidence is that a copy of a letter from Unitec’s landholding Company, WLC, to members of the Society in 11 December 2017 was provided to the Crown during the due diligence phase in response to a query relating to any unregistered or informal arrangements on the land. The WLC letter was sent to the Society while the sale and purchase negotiations between the Crown and Unitec were ongoing and recorded:
(a)At an earlier meeting on 11 August 2017, WLC and Unitec had asked the Society to put forward options for the future of community gardens
in the Precinct, “given that it is unlikely they could continue to exist in their current location long-term”.
(b)At a subsequent meeting in late October 2017, members of the Society had indicated a lack of desire to consider alternative options, and proposed they remain in their current location.
(c)That, in developing the new master plan for the Precinct, WLC and Unitec had decided to attempt to sell the parcel upon which the Community Garden was located by the end of 2018, and expected to have vacant possession of the land from 1 May 2018. WLC and Unitec confirmed “[c]ontinued occupation of the land by the [Society] past this point is therefore untenable”.
(d)WLC would endeavour to write into any future sale and purchase agreements for the subject site that developers “must make reasonable efforts to preserve at least 2,500sqm of mature trees as part of any future development”.
(e)Finally, that the future community garden area in the Precinct would be tended to by the future residents of the Precinct, founded on a document which determines the future use and enjoyment of the land, and which the Society “will not be a party to”.
[56] The Crown also points to the fact that sch 5 of the Agreement contained a list of leases, which were defined broadly in the Agreement to include any “other right of occupation in relation to the whole or any part” of the land and yet did not refer to any interest in relation to the Community Garden.
[57] Furthermore, the Crown submits the Agreement included warranties under sch 3 cl 3 that there were no leases other than those disclosed and that Unitec was not aware of any undisclosed occupiers of the property, whether authorised or not.
[58] I note that these submissions do not take into account the March 2018 Variation which added cl 25.4 relating to the Community Garden to the Agreement, and in clause 25, the clause dealing with leases.
[59] The Crown further points to the new cl 37, introduced together with cl 25.4 in the March 2018 Variation, which required the registration of a number of unregistered interests in the underlying land, including an easement in gross for rock anchors and sale of an area required for roading purposes. The Crown says by contrast with cl 25.4, the obligations in cl 37 on the Crown are of a much more concrete and fixed nature: “the purchaser shall be bound and comply with the same” and that “in the event the Required Interests are not registered with [LINZ] against the property prior to settlement, the purchaser shall arrange for the same to be registered”.
[60] The Crown emphasises Ms McGregor’s evidence in the penultimate paragraph of her affidavit:
80.The original clause 25.4 envisaged a process whereby the Applicant, the Crown, Iwi and Unitec all worked together to achieve an outcome for the preservation of the Community Gardens. The vision for the development includes community gardens but does not anticipate any role for the Incorporated Society, as the community gardens will be for the benefit of the future residents of the site. The preservation of the site being gardened by the Incorporated Society has not proved possible, and the explicit intention of Ngati Te Ata is that they wish to develop the Property for housing purposes. It is relevant that Unitec also supports that vision. As a responsible Treaty partner, and in the absence of any agreement between the parties to the contrary, HUD feels that it is its role to support Ngati Te Ata in that goal.
(emphasis added)
[61]The Crown then submits:
4.21Fundamentally, the position of the Society is at odds with the position of Unitec, the Rōpū (including Ngāti te Ata), and the Crown. As Ms McGregor says, the preservation of the site being gardened by the Society has not proved possible, because it is the wish of mana whenua to develop that area for housing. There is provision within the Reference Masterplan for community gardens elsewhere within the broader development of the Wairaka Precinct, but that does not extend to an agreement to preserve this site in perpetuity.
(footnotes omitted)
[62] As emphasised in italics, Ms McGregor’s evidence relies on there not being any agreement to the contrary but the Society’s position is that there is such an agreement, being cl 25.4.
[63] A large part of the Crown’s evidence, rather than providing the background knowledge that would have been available to the Crown and Unitec when entering into the March 2018 Variation, as is required to properly interpret cl 25.4, focuses more on matters as they have evolved following March 2018.
[64] The Society submits that if further interpretation of cl 25.4 is required (the Society’s primary position being that cl 25.4 clearly creates an easement), then it is not appropriate for that to occur in the context of this caveat application as evidence of the pre-contractual negotiations would be necessary, as well as evidence of whether statements of subjective intent and subsequent statements were communicated to the opposing parties and accepted or not by those parties. The Society says, for example, that the Unitec letter referred to by the Crown in support of the resource consent being granted is very general and does not refer to the Community Garden so it is not clear the author knew the Community Garden was going to be built on.
[65] The Society points to other post-contractual statements made by Unitec following entry into the March 2018 Variation that suggest Unitec believed it had achieved protection of the Community Garden in perpetuity.
[66] For example, an email was sent to Unitec staff by the interim CEO, Alastair Carruthers, announcing the purchase of the land by the Crown on 25 March 2018, less than two weeks after the Variation was agreed adding cl 25.4, which dedicated a paragraph to the Community Garden saying:
Ownership of the Community Gardens (in lot 4 on the map) will transfer to the Government as part of the sale, and the purchase agreement acknowledges the cultural and historical significance of the gardens, which will be preserved and maintained into the future.
[67] A statement was also included in Unitec’s 2017 Annual Report in respect of the Agreement recording:
The agreement also preserves an established garden space adjacent to Oakley Creek, ensuring it will remain for the future enjoyment of students, staff and residents.
[68] Mr Carruthers spoke at an event called Save Our Sanctuary held at the gardens on 29 April 2018, six weeks following the March 2018 Variation. A video was taken of this speech from which a transcript has been prepared and annexed to Mr Crosby’s affidavit for the Society. The transcript records that Mr Carruthers explained:
I want to tell you what exactly happened. The land, the whenua, that these gardens are comprised, but some significant part of, has been sold to the Crown. We actually settled the transaction last week and this now belongs to the Crown.
But in the transfer of these 7000 square metres we created and agreed in the sale and purchase agreement about two pages of binding objectives that are all about this particular whenua and its purposes.
And broadly speaking there are 4 purposes. They include:
• an ongoing provision of food
• a site of memory not just from the current gardeners but the many previous gardeners of the whenua [archaeological]
• a site where citizens of the region can come and recreate and continue
• and finally, and this is a very important purpose for my colleagues at Unitec, a site that could also be used for future educational purposes.
So all four of those purposes are actually caught into the agreement. And I don't think that has ever happened [before]; I think that the status of the gardens has actually been unsure across that period.
I think what it is also important to know that it doesn't even say gardeners. It just says they will be gardens, and they will be gardens in perpetuity for those 4 purposes.
[69] The Crown challenges this evidence as hearsay and says the Society should have obtained an affidavit from Mr Carruthers. However, a caveat application does not finally determine rights and matters have to be filed relatively quickly given the timeframes in the LTA. I therefore consider it is in the interests of justice to take this evidence into account (especially as there is a video of the speech available).19
19 High Court Rules 2016, r 7.30 and commentary.
[70] The Crown submits that, in any event, these statements of subjective intent are irrelevant to interpretation of the contract, referring to Bathurst Resources Ltd v L & M Coal Holdings Ltd where Winkelmann CJ and E France J stated:20
… As to category (b), evidence of what a party subjectively understood or intended as to the meaning of the contract will not be admissible if that was not communicated to the other party prior to contract formation. An undeclared understanding or intention as to the meaning of a contract is not evidence that would have been available to the notional reasonable person having all of the information reasonably available to the parties at the time. It is not therefore relevant to the task of contractual interpretation.
[71] But it is not clear whether evidence of subjective intent was communicated to the Crown prior to entry into the March 2018 Variation or not as the Society was not involved in the negotiations leading up to the Agreement or the March 2018 Variation or any correspondence following. The Society is therefore unable to refer to those documents, unless or until the Society obtains discovery.
[72] Furthermore, the Society points out that the Crown could have produced evidence of the pre-contractual negotiations but has chosen not to do so.
[73] The Society stresses the importance of discovery in this case as there are examples of a lack of transparency by the Crown to date with, for example, the Crown refusing to provide a copy of the Agreement or Variation, other than cl 25.4, until the Crown filed its affidavit in opposition in this proceeding.
[74] In addition, the Society points to a paper by the Minister of Housing in approximately April 2020 that records in a footnote:
Unitec’s other significant issue is the illustrations which show the community gardens moving to allow development. HUD and mana whenua have made no decisions on the community gardens and there is no intention of allowing development on any culturally significant sites, as will be reflected in the detailed master-planning.
[75] Counsel for the Crown suggests that discovery would essentially be a fishing expedition and that the Society could have sought a discovery order. However, it would be unusual in a caveat application for a discovery application to be made, with
20 Bathurst Resources Ltd v L & M Coal Holdings Ltd, above n 15, at [68].
such applications reserved for substantive proceedings where rights are finally determined.
[76] In any event, I do not accept that seeking discovery of the pre-contractual correspondence amounts to a fishing expedition. It is simply what is required to allow proper interpretation of a contract when a party relying on that contract was not involved in the negotiations.
[77] This is especially the case when the Crown itself seeks to rely on the background matrix and submits that the Society’s evidence and its chronology ignore the factual matrix and background to the Agreement reached between Unitec and the Crown as set out in Ms McGregor’s affidavit.
[78]The interpretation exercise requires the Court to ascertain the meaning that cl
25.4 would convey to a reasonable person having all the background knowledge that would reasonably have been available to the parties at the time of the variation.21 The Crown sets out some of the background knowledge that may have been available but is not comprehensive in doing so. For example, very little, if any, correspondence between the Crown and Unitec leading up to the Agreement or Variation is in evidence so there will clearly be discoverable material and that may shed light on the factual matrix in which cl 25.4 was agreed and may assist in the interpretation of cl 25.4. It is not possible therefore to undertake the interpretation exercise in the context of these caveat proceedings.
[79] From all of the above, however, I consider the Society has established it is reasonably arguable that cl 25.4 properly interpreted is an agreement to preserve the Community Garden creating an easement in gross as described in the caveat. The first requirement for the right in issue being capable of a grant, that the right is sufficiently clear, is therefore reasonably arguable. I do not go on to consider whether cl 25.4 also creates a profit à prendre as it is unnecessary given the view I have reached in respect of an easement in gross.
21 See [34(a)] above and footnote 15.
Is it reasonably arguable that the right is not so precarious that the right is liable to be taken away?
[80] Again, this depends on the proper interpretation of cl 25.4 which is not possible in this caveat application. However, if interpreted as proposed by the Society this requirement would also be reasonably arguable as the right claimed is for the preservation of the Garden.
Is it reasonably arguable that the right is not so extensive or invasive as to oust the burdened owner from the enjoyment and control of the burdened land?
[81] The right claimed by the Society is not an attempt to exclude the burdened owner, the Crown, from the Community Garden, instead seeking to preserve the Community Garden for everyone. It is reasonably arguable therefore that this requirement is satisfied as well.
[82] The Crown appears to accept this when it submits the Society’s claim is to joint occupation of the Community Garden and that there is no suggestion, for example, that any future owners of the property would be excluded from the Garden.
Is it reasonably arguable that the right does not impose on the burdened owner an obligation to spend money or do anything beyond mere passivity?
[83] The Crown submits that the right claimed does not appear to require anything more than mere passivity on the part of the burdened owner and that such a requirement is incapable of amounting to an easement.
[84] This submission is the opposite of what is required – the right will be capable of a grant only if it requires mere passivity on the part of the burdened owner. By its submission, the Crown appears to accept the Society is not seeking anything more than mere passivity on the part of the Crown and so this requirement is reasonably arguable as well.
Conclusion on capacity to be subject of grant
[85] The four requirements for a right to be capable of a grant are each reasonably arguable in the circumstances of this case so this third essential characteristic of an easement in gross is reasonably arguable.
Is it reasonably arguable there was consideration?
[86] Consideration is required for cl 25.4 to be enforceable but I do not accept the Crown’s submission that consideration must flow from the Society to the Crown or from the Society to Unitec. The consideration flowing between Unitec and the Crown is sufficient for the Agreement, including cl 25.4 as added in the Variation, to be an enforceable contract. There is no requirement for consideration to be able to be tagged to a particular clause as the Crown appeared to submit.
[87] However, whether the Society, as a non-party, can enforce cl 25.4 depends on the application of the contract privity provisions in the CCLA, as discussed further below.
Is it reasonably arguable there was a sufficient record in writing?
[88] The Crown submits that cl 25.4 is only an agreement to agree so there is no sufficient record in writing, and there has been no part performance, so the Agreement fails on this basis. But again this depends on the interpretation of cl 25.4. For the reasons discussed above, I consider it is reasonably arguable that the clause is more than an agreement to agree, and may instead be an agreement to preserve the Garden, so this element is satisfied as well.
Conclusion on whether it is reasonably arguable that cl 25.4 creates a sufficient interest in the land to support a caveat
[89] Each of the requirements for an equitable easement in gross based on a contract are reasonably arguable. It is not disputed that an easement in gross is a sufficient interest to support a caveat. It is therefore reasonably arguable that cl 25.4 creates a sufficient interest in the land to support a caveat.
If so, is it reasonably arguable that cl 25.4 confers a benefit on the Society capable of enforcement under s 17 of the CCLA?
[90] The Society relies on s 12 of the CCLA to submit that it is reasonably arguable that cl 25.4 confers or purports to confer a benefit on the Society that the Society is able to enforce.
[91]Section 12 of the CCLA provides:
12 Deed or contract for benefit of person who is not party to deed or contract
(1)This section applies to a promise contained in a deed or contract that confers, or purports to confer, a benefit on a person, designated by name, description, or reference to a class, who is not a party to the deed or contract.
(2)The promisor is under an obligation, enforceable by the beneficiary, to perform the promise.
(3)This section applies whether or not the person referred to in subsection
(1) is in existence when the deed or contract is made.
[92] The Crown submits that it is not clear what benefit cl 25.4 is intended to confer on the Society and that the sole express benefit afforded to the Society was to receive notice of the transfer of ownership from Unitec to the Crown prior to settlement. The Crown accepts that arguably the Society would have been an “interested group” who Unitec and the Crown agreed to work collaboratively with to document or agree plans to preserve the gardens prior to settlement. However, the Crown says that the Society was only one such interested group, which also expressly included Iwi and Kaumatua.
[93] The Crown submits further that s 13 of the CCLA would apply. Section 13 provides that s 12 does not apply to a promise that, on the proper construction of the deed or contract, is not intended to create an obligation enforceable by the beneficiary.
[94] Again, whether s 12 confers a benefit and whether s 13 would apply depends on the interpretation of cl 25.4.
[95] As I have found that the interpretation of cl 25.4 put forward by the Society is reasonably arguable, and the Society is named as the “current occupiers” in the clause and was, in Mr Crosby’s evidence, formed for the purpose of preserving and
maintaining the Community Garden, I consider that it is reasonably arguable that cl 25.4 confers a benefit which it is intended the Society ought to have the right to enforce.
[96] Section 17 of the CCLA provides a right to a party on whom a benefit is conferred to sue to enforce the contract as if the beneficiary were a party to the contract. It is therefore reasonably arguable that the Agreement confers a benefit on the Society capable of enforcement as provided for in s 17 of the CCLA.
Do the interests of justice weigh in favour of the caveat being allowed to lapse?
[97] The Crown submits that the caveat has the potential to frustrate (or substantially disrupt) the development of the land by Ngāti te Ata. The Crown’s evidence is that the development opportunity has already commenced with infrastructure being delivered currently, including the construction of an adjacent ‘spine’ road running down the western edge of the land. Ms McGregor records that the caveat is likely to prevent subdivision or transfer of title to Ngāti te Ata and says that while the caveat issue remains live, the enabling infrastructure works on those parts of the land affected by the caveat remain on hold.
[98] The Crown submits that cl 25.4 provided an opportunity for parties to consider whether the Community Garden could be preserved as part of any future development on the land undertaken by mana whenua, but that the final decision as to whether or not the Community Garden could be incorporated in their current form and/or with its current guardians, being the Society, was for mana whenua to make and that Ngāti te Ata has sought to develop this part of the property for much needed housing, a choice which should be respected.
[99] These are important aims, and it is unfortunate that the development of the property is currently delayed by this dispute and the proceedings that are likely to follow if matters cannot be resolved. However, the residual discretion to remove a caveat in the interests of justice where a caveator has sufficiently established its interest, as the Society has here, is confined to situations where removal would not
harm the interests of the caveator.22 In this case, as submitted by the Society, when the Community Garden is gone, it is gone. It is not therefore an appropriate case for the exercise of the Court's discretion to remove the caveat despite an arguable interest being found.
[100] It may be a situation where discussions could lead to a position enabling development of the surrounding site whilst also preserving the Community Garden. I encourage the parties to make every effort to negotiate a resolution, even in the interim, to avoid further cost and delay.
Further orders
[101] Ordinarily when a caveat is sustained, it is on condition that proceedings are brought to determine the caveatable interest. I did not hear from the parties sufficiently on the appropriate conditions so ask the parties to confer and propose conditions by memoranda (preferably joint with any differences set out). The memoranda are to be filed together with any submissions on costs as set out below.
Corrected respondent
[102] Finally, I note that originally the Ministry of Housing and Urban Development was named as the respondent. The Crown recorded in its notice of opposition that the correct respondent is the Attorney-General as the Crown is the registered owner of the land and s 14(2) of the Crown Proceedings Act 1950 provides that the Attorney- General is the appropriate party unless the relevant government department or minister or officer has been given the power to sue by statute (which neither have been).
[103] A joint memorandum was filed prior to the hearing recording that the Attorney- General consented to being a party and seeking an order adding the Attorney as the second respondent.
[104] As the correct respondent is the Attorney-General, the Attorney-General should instead be substituted for the respondent on the basis that the Attorney is acting on behalf of HUD. I therefore make this change to the parties.
22 Green & McCahill Holdings Ltd v Ara Weiti Development Ltd, above n 5, at [80(d)].
Result
[105] The application by Sanctuary Community Organic Garden Manu Whenua Incorporated that its caveat not lapse is granted, subject to further conditions to be made if necessary following the filing of memoranda as set out below.
Costs and conditions
[106] The Society has succeeded and so is entitled to costs. I ask the parties to confer and to file memoranda (preferably joint), including as to any necessary conditions, on behalf of the Society by 19 June 2025 and the Crown by 27 June 2025.
Associate Judge Sussock
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