SCOTT KERRY JACKSON and SARAH ANNE JACKSONPlaintiffsANDGEOFFREY CLEMMENT SMALL and ARIA SMALLFirst Defendants
[2024] NZHC 2328
•20 August 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-000864 [2024] NZHC 2328
UNDER the Declaratory Judgments Act 1908 and Part 18 of the High Court Rules 2016 IN THE MATTER
of an application for a Declaratory Judgment
BETWEEN
SCOTT KERRY JACKSON and SARAH ANNE JACKSON
Plaintiffs
AND
GEOFFREY CLEMMENT SMALL and ARIA SMALL
First Defendants
BOMBAY INVESTMENTS LIMITED
Second Defendant
Hearing: 13 August 2024 Appearances:
T Allan for the Plaintiffs
A Simkiss for the Defendants
Judgment:
20 August 2024
JUDGMENT OF GORDON J
This judgment was delivered by me on 20 August 2024 at 3 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors:
Grove Darlow & Partners, Auckland Minter Ellison Rudd Watts, Auckland
JACKSON v SMALL [2024] NZHC 2328 [20 August 2024]
[1] The first defendants,1 Geoffrey and Aria Small (the Smalls), have built an equestrian facilities building (EFB) on their lifestyle block in a rural subdivision. The EFB does not comply with restrictive covenants registered on their title.
[2] In a reserved decision on 1 March 2023, Duffy J made orders that the Smalls alter the EFB in accordance with the directions set out in her judgment.2 Justice Duffy reserved leave to the parties to return to court for further directions should the need to do so arise.3
[3] The Smalls have not altered the EFB as directed. Further, they continue to live in the EFB in the part which they describe as “temporary accommodation”. The architect called by the Jacksons and the architect called by the Smalls at the hearing before Duffy J agreed that residential accommodation is not permitted in an outbuilding4 and that the residential part of the building, as well as one bay, needed to be demolished.5 That has not yet happened.
[4] The plaintiffs, Scott and Sarah Jackson (the Jacksons), who live in another of the properties in the same subdivision, are fed up with the delays in the Smalls taking action to alter the EFB. The Jacksons have filed an application dated 5 March 2024 seeking orders that the Smalls:
(a)modify the EFB in accordance with Justice Duffy’s orders at [171], before 31 July 2024;6
(b)vacate the EFB within 90 days of the Court making the order in (a) above;
1 The second defendant, Bombay Investments Ltd, has not taken an active part in the proceeding. The first defendants are essentially the only defendants.
2 Jackson v Small [2023] NZHC 343 [third HC judgment] at [170]–[174].
3 At [175].
4 The equestrian facilities building is an “outbuilding” in terms of the restrictive covenants.
5 At [27].
6 Clearly that date is unworkable given the date of the hearing. At the hearing Mr Allan, counsel for the Jacksons, proposed a revised date of 31 January 2025, being around five months from the date of the hearing.
(c)prove they have vacated the EFB by the 91st day after the date on which the Court makes the order in (a) above.
[5]The Jacksons seek further orders that:
(a)If the Smalls have not vacated the EFB within the 90 day period and have not filed and served proof within 93 days that they are not using the EFB as their residential dwelling and if they have not complied with the modifications ordered by Duffy J in [171], then the Jacksons may apply for sequestration orders against the Smalls.
(b)In any event the Registrar of the High Court is ordered to demolish the EFB upon security for the cost of doing so being posted by the Smalls.
[6] The Jacksons also seek costs on this application and costs on the hearing before Duffy J (those costs never having been determined).
[7] The Smalls oppose the Jacksons’ application. They say the application should be dismissed or struck out because the Jacksons have not complied with pt 11 of the High Court Rules 2016 (HCR) which require a judgment (the judgment of Duffy J) to be sealed; and that under r 11.13(1) the Jacksons require leave of the Court to take any enforcement steps and they have not sought or obtained leave.
[8] The Smalls further say that if the Court does not dismiss or strike out the Jacksons’ application, the Court should make orders (in terms of timing) that are possible to comply with.
[9] The Smalls now propose three changes to the plans to the EFB that were before Duffy J and on which Duffy J based her orders. They say that the orders made permit two of those proposed changes. They accept that the third proposed change does not comply with the orders of Duffy J but they say it is permitted in terms of the restrictive covenants.
[10] The Jacksons accept that one of the proposed changes can be made but say the other two do not comply with the orders made by Duffy J. It is those orders that govern what the Smalls are required to do in relation to the EFB.
[11] The Smalls also seek costs on this application and on the hearing before Duffy J.
Background
[12] The proceedings have been protracted. They did not start with the hearing before Duffy J. I will briefly summarise the earlier hearings and in particular the orders made in those hearings so as to provide the necessary background to explain how there came to be a hearing before Duffy J.
[13] The proceedings commenced in 2018 when the Jacksons and a number of others living in the same rural subdivision7 filed an application for two declaratory orders. One was in relation to the number of dwellinghouses that could be built on the land the Smalls had purchased from the then first plaintiffs, the Taylors, and which the Smalls had subsequently subdivided. The second was whether the EFB which had been constructed on the lot the Smalls had retained for themselves, was in breach of the terms of the restrictive covenants.
[14] I heard the application on 17 September 2018 and in a judgment (first HC judgment) I found in favour of the Smalls in relation to the number of dwellings that could be built in the subdivision they had created.8 On the second issue I found that the EFB did not comply with the restrictive covenants but only in two respects: first, there was not (yet) a dwellinghouse associated with the EFB; and second, as a result, the EFB could not be said to be “in keeping” with the dwellinghouse.9
7 Those others have since dropped out. The only remaining plaintiffs are the Jacksons.
8 Taylor v Small [2018] NZHC 2785, (2019) 20 NZCPR 151 [first HC judgment].
9 At [125].
[15] I found that the EFB otherwise complied with the requirements of the restrictive covenant. I said, of relevance to the present application:10
[24] Earthworks carried out on the property as part of the development works included preparation of a building site for a dwelling house which has not been built. Since December 2014, the Smalls have been living in the accommodation included in the [EFB].
…
[171] I have found, significantly, the [EFB] complies with the qualitative controls in the clause. Furthermore, I note that the Smalls have prepared a building site for a dwelling house. They have not yet constructed a dwelling house, as they have been awaiting the outcome of these legal proceedings.
[172] The grant of an injunction is discretionary. In these circumstances, I do not consider it would be equitable to require the [EFB] to be taken down and removed, only to have it restored once a new dwelling house was constructed.
[173] I therefore refuse to grant injunctive relief as sought in relation to the [EFB]. I refuse this relief on the basis that the Smalls will construct a dwelling house.
[16]The Smalls have not yet constructed a dwellinghouse on their property.
[17] The Jacksons and others who were still plaintiffs at the time, appealed the first HC decision to the Court of Appeal. The Court of Appeal heard the appeal on 9 April 2019 and gave judgment on 13 May 2019.11 The Court allowed the appeal in part. It upheld the first HC decision on the first issue in relation to the number of dwellings that were permitted, but held that the Court erred in relation to the way it interpreted the requirements of the covenants in relation to an outbuilding or ancillary building (namely the EFB).
[18] Following the Court of Appeal judgment, the then plaintiffs amended their statement of claim and on 12 September 2019 a Judge of this Court set the proceeding down for a three day trial commencing on 4 May 2020. The Smalls failed to comply with any of the timetable orders made, but fortuitously for them, for COVID-19 related reasons, the Court vacated the 4 May 2020 fixture on its own motion.
10 First HC judgment (footnote omitted).
11 Taylor v Small [2019] NZCA 152, (2019) 20 NZCPR 152.
[19] On 11 May 2020 the Court allocated a three day fixture commencing 27 July 2020 and made fresh timetable orders for the exchange of submissions.
[20] On 17 July 2020 the Smalls applied for an adjournment of the trial. That application was opposed and was refused by the Court. The second trial accordingly proceeded on 27 July 2020, again before me. The issue was a narrow one: whether the EFB complied with the terms of the restrictive covenants. If not, the Court needed to consider whether injunctive relief should be granted. My judgment issued on 11 August 2020 (second HC judgment).12
[21] Following the approach set out by the Court of Appeal on how the restrictive covenants were to be interpreted, I found in favour of the then plaintiffs, including the Jacksons. The Court was assisted with expert evidence from architect Christopher Hume, who gave evidence for the plaintiffs. The Smalls did not call any expert evidence.
[22] In the second judgment I summarised the reasons why I considered injunctive relief was justified and in particular why it was to be preferred instead of damages:13
[136] The factors weighing in favour of injunctive relief are as follows:
(a)As the Court of Appeal said, the covenants are concerned with the quality of buildings. That is emphasised by another clause in both covenants which is concerned with ensuring covenantors adhere to high standards of building practice by prohibiting the erection of certain structures on the servient land. This is not a situation where damages would be an appropriate form of relief;
(b)Mr Small accepted under cross-examination that he and his wife were legally represented at the time of the purchase of the land from the Taylors and that he asked the solicitors acting for him at the time for advice before they committed to purchasing the property. He accepted they would have been made aware of the restrictive covenants;
(c)The Smalls did not seek to engage with the plaintiffs or the Taylors or the Johnstons before constructing the equestrian facilities building;
12 Taylor v Small [2020] NZHC 2023, (2020) 21 NZCPR 337 [second HC judgment].
13 At [136] (footnotes omitted).
(d)Mr Small accepted that before he consulted with the architect, he did not get any advice from his then solicitors on information he should give the architect about the way in which the equestrian facilities building should be designed;
(e)Mr Small was not able to say whether he gave the architect a copy of the restrictive covenants; and
(f)The Smalls have not attempted to engage with the plaintiffs since the Court of Appeal decision.
[23] As part of the relief the then plaintiffs had sought what was effectively a right of veto as regards the plans that the Smalls were proposing to commission for the purpose of modifying the EFB. I did not make such an order saying:
[150] I consider an order which allows for input from the plaintiffs but does not give them a right of veto is appropriate. It will involve a two-step process if agreement cannot be reached. I therefore will not order injunctive relief requiring demolition and removal at this stage.
[24]It is to be noted that the Smalls advised the Court that:
(a)They intended to “instruct a qualified architect or architectural designer to prepare modifications to comply with the restrictive covenant in the event the Court declares that the equestrian facilities building is infringing”.14
(b)Three months would be an appropriate period for them to obtain modification plans. They asked the Court to impose a 14 month period for completion of modifications rather than the nine month period proposed by the plaintiff.15
(c)The design would be provided to “all owners in the Taylor subdivision, and then filed a month later”.16
(d)That timeframe would allow approximately nine months to complete the modifications and obtain code compliance which would then be filed with the Court.
14 At [145].
15 At [146].
16 At [146].
(e)All up the modifications would have been completed by December 2021.
[25]I made the following orders:
[152] I make a declaration that the equestrian facilities building is in breach of the restrictive covenants in paragraph (i) of the schedule to covenants 3 and 4.
[153]I make the following orders:
(a)Within three months of the date of this judgment, the Smalls are to provide to the plaintiffs plans of alterations to the equestrian facilities building prepared by a registered architect or architectural designer with reference to the restrictive covenants and this judgment;
(b)Within five months of the date of this judgment, the plaintiffs and the Smalls may file a consent memorandum advising the Court that they agree to plans and specifications of agreed modifications to the existing equestrian facilities building (agreed modifications). Such plans are to be attached to the consent memorandum;
(c)In the event of the parties filing the agreed modifications, the Smalls shall:
(i)effect and complete the agreed modifications;
(ii)obtain the code compliance certificate in respect of the agreed modifications;
(iii)file the code compliance certificate attached to a memorandum in this Court; all within 14 months of the date of this judgment;
(d)In the event that the parties cannot agree on modifications to the existing equestrian facilities building, they have leave to apply to the Court for directions or further orders. Any such application shall be made promptly after the expiry of the five month period referred to in (b) above; and
(e)The parties also have leave to apply for directions if any issues arise in relation to the implementation of these orders.
[154] For the avoidance of doubt, the equestrian facilities building does not include the horse walker, arena, or yards and vehicle access, including the truck turning bay or hard stand.
[155] I further make an order restraining the Smalls, whether by themselves, or by their servants or agents from erecting any farm building or ancillary building on CT 745034 which does not meet the requirements of restrictive covenants 3 and 4.
[26] The Smalls did not comply with the first order in [153(a)]. The Jacksons accordingly applied for enforcement orders by application dated 16 March 2021. In that application the Jacksons sought an order that the Smalls dismantle or demolish and remove the EFB from the property. They further sought an order that if within three months of the date of the order the Smalls had not dismantled or demolished and removed the EFB, the Registrar of the High Court was entitled to perform the order. It was this application that was heard by Duffy J.
[27] By the time the application was first called in Court on 13 April 2021, the Smalls advised they intended to retain an architect and that they would file an affidavit in opposition to the application.
[28] The hearing commenced before Duffy J on 20 June 2021. At that stage the two architects (Christopher Hume for the Jacksons and Graham Strez for the Smalls) had not conferred. The Judge made a direction that they do so and the hearing resumed before her between 6 and 10 December 2021. Both Mr Hume and Mr Strez were cross-examined.
[29] The Judge issued her judgment on 1 March 2023 (third HC judgment). Early on in the third HC judgment the Judge noted:
[7] The failure of the parties to reach agreement on the modification of the equestrian facilities building means paragraph (d) of the orders of Gordon J is now in effect, and the plaintiffs have relied on the leave reserved to them to make the present application for orders to enforce the covenants.
Subsequent events
[8] Since Gordon J delivered judgment on 11 August 2020, the parties have been unable to reach agreement on an appropriate modified design, which is why they are before this Court again.
…
[13] The inability of the parties to reach agreement on a modified design has meant that it is now for me to decide on the proposed modified designs. This is against a background where the present building is clearly non-compliant, and unless it is modified to comply with the covenants it must be demolished, and the land reinstated to how it appeared before the building was constructed.
[30]The Judge set out the issues for determination as follows:
[4] The second judgment of Gordon J and the orders made thereon have not been appealed. Accordingly, there is now no doubt that the present equestrian facilities building contravenes the covenants and the plaintiffs are entitled to have that rectified. The issue for me to determine is whether such rectification should be by a mandatory injunction that (a) requires the first defendants to de-construct the existing building to a point where it complies with the covenants; or (b) a wholesale removal of that building with the land on which it stands being re-instated to its former appearance. ...
[31] The Judge favoured the design by Mr Strez (Strez design) and made the following orders:
[171] The present equine facilities building is to be altered by the following actions:
(a)Removal of the wooden cladded residential north face of the present building and its replacement with a small single story building having a gable roof and a ridge line running on an east/west axis and using cladding like the present dark coloured long run steel cladding, dark coloured vertical boards or a cladding that ties in with the cladding to be used in the first defendants’ dwelling house.
(b)Removal of the west section of the present building; being the area described at [27] herein.
(c)Reduction of the length of the horse truck bay area by removal of six metres from its southern end.
(d)Adding a total of 10 clerestory windows to the western external wall of the stables area.
(e)Adding extra clerestory windows (to the two sets of windows proposed by Mr Strez) to the eastern external wall of the stables area in light of the longer projection of this wall in consequence of the reduced length of the horse truck bay.
(f)Taking such other steps as will make the present building conform with the Strez design.
[172] The first defendants are within 40 working days of this judgment to commission technical/working drawings to implement the above reductions and make further necessary alterations to achieve a building that confirms [sic] with the Strez design.
[173] The first defendants are within 60 working days of completion of the aforementioned technical/working drawings, to engage contractors to obtain necessary consents to carry out works on the present building in accordance with the aforementioned technical/working drawings and to perform building work to make the present building conform to the consented technical/working drawings.
[174] The first defendants are ordered to ensure the design of any dwelling house they build on their land is in a style that is compatible with the Strez design for the equine facilities building.
[175] The parties have leave to return to Court for further directions should the need to do so arise.
[176]The parties have leave to file memoranda on costs.
[32] For ease of understanding I annex to this judgment two of the appendices to the third HC judgment. Appendix A shows the EFB in its present form (and as it has been since it was constructed). Appendix C contained two pages of the Strez design. I annex the first page.
[33] No part of the EFB has been modified in accordance with Duffy J’s directions. The EFB is in the same state as it was when the proceeding commenced in 2018. At the hearing Ms Simkiss advised the Court that the Smalls had applied for a building consent 11 days prior to the hearing. It appears that the application was accompanied by plans which the Smalls knew contained aspects that were in issue in this hearing.
[34] Mr Allan, counsel for the Jacksons, notes in his memorandum of 5 March 2024 filed with the application, that (at that time) more than 100 working days had expired since Duffy J made the orders in the third HC judgment requiring the Smalls to have at least obtained consents to modify the EFB.
[35] As further context for this hearing I set out two further aspects emphasised by Mr Allan in his submissions: the absence of timeframes in the orders of Duffy J for modifications to be completed and, the Smalls’ continued residence in the EFB.
Absence of timeframes for modifications to be completed
[36] Mr Allan points out that there is no timeframe specified for the order at [172] of the third HC judgment (commissioning of technical/working drawings to implement the orders in [171]) to have been completed. Additionally, Mr Allan notes there is no timeframe in the order at [173] specifying the date by which the Smalls were required to have:
(a)filed consent drawings and an application for building consent with the Auckland Council (Council);
(b)obtained a building consent from the Council;
(c)entered into a construction contract to undertake the modifications; or
(d)completed the modifications necessary to comply with the injunction.
[37] Mr Allan submits the Smalls have plainly treated the orders as being at large and, therefore, avoidable despite the injunction ordered by the Court as long ago as 11 August 2020 in the second HC judgment. Mr Allan further notes there is no milestone reporting to the Court in the third HC judgment.
[38] Mr Allan submits that notwithstanding the Smalls having assured the Court in the 2020 hearing before me that they would have completed the modifications to the EFB by the end of 2021 they have not even commenced complying with the modifications expected both in the second HC judgment and the third HC judgment. That submission was made prior to Ms Simkiss advising the Court at the hearing that an application for building consent had been made.
The Smalls’ continued residence in the EFB
[39] Mr Allan submits the Smalls have been enabled to take advantage of their own wrong by continuing to use the two storey brown/orange section at the northern end of the EFB (refer Appendix A) as their permanent residential dwelling.
[40] He submits that rather than constructing a dwelling plus an “ancillary” building or “outbuilding” on their Lot, the Smalls constructed the EFB to include an unlawful two level timber clad dwelling across the front of the EFB. Mr Allan submits that has always been in and of itself an unlawful structure. He notes that Mr Hume and Mr Strez both agreed that residential accommodation is not permitted in an outbuilding. He notes the Court’s finding that:17
17 Second HC judgment at [136(b)].
Mr Small accepted under cross-examination that he and his wife were legally represented at the time of the purchase of the land from the Taylors and that he asked the solicitors acting for him at the time for advice before they committed to purchasing the property. He accepted they would have been made aware of the restrictive covenants; …
[41] Mr Allan further notes that the Court, in the first HC judgment, did not grant an injunction requiring the removal of the EFB because the Smalls had simultaneously been building and living in the EFB, in which they had been living from the outset on a “temporary” basis.18
[42] Mr Allan refers to the statement of the Court of Appeal judgment that it was the Smalls’ intention to use the proceeds of the sale of six of the seven lots in the subdivision they created to “build a home on Lot 7, where they are temporarily living in the equestrian facilities building”.19
[43] Mr Allan makes the point that the Smalls have been living in the EFB as “temporary accommodation” that does not comply with the restrictive covenants since December 2014. By contrast, every other owner in the Taylor subdivision has complied with the restrictive covenants by ensuring they construct both a dwelling and a separate “outbuilding” or “ancillary” building. He says the Smalls alone have not. In the first HC judgment the Court found that in the absence of a dwellinghouse the EFB cannot be said to be an outbuilding or an ancillary building. That finding in the first HC judgment was not challenged in the Court of Appeal. He draws attention to the following paragraph in the second HC judgment:20
Before undertaking an analysis of the evidence in relation to the two requirements [in the restrictive covenants as regards dwellinghouses and outbuildings], I note that I am proceeding on the basis that, because the Smalls have yet to build a house on their property, the equestrian facilities building fails to comply with the restrictive covenants. In the absence of a dwelling-house it cannot be said to be an “outbuilding” or an “ancillary building”. That finding in the original High Court judgment was not challenged in the Court of Appeal.
[44] Mr Allan submits that even if the time runs from 3 August 2021, namely the time of the joint expert witness statement, both experts agreed that continued use of
18 First HC judgment at [110].
19 Taylor v Small, above n 11, at [14].
20 At [27] (footnotes omitted).
the brown/orange wooden part of the EFB as residential accommodation was unlawful.
[45] Mr Allan submits the Smalls are deliberately ignoring the Court’s orders to modify the EFB while at the same time continuing to live unlawfully in the EFB. He submits in those circumstances an immediate order should be made requiring the Smalls to vacate the EFB within 90 days of the date of the order.
Dismissal/strike-out of the Jacksons’ application
[46]The Smalls apply to dismiss or strike out the Jacksons’ application.
[47] Ms Simkiss submits there is no reasonable excuse for the Jacksons’ decision not to seal the judgment. She says leave should not be granted for the application to be brought. Ms Simkiss further submits that the Jacksons are trying to have it all ways by deliberately refraining from sealing the third HC judgment (as referred to in Mrs Jackson’s affidavit) on the basis it is not clear while also attempting to enforce it. Ms Simkiss says the Jacksons knew the interpretation of the judgment was contested, as was obvious from the parties’ correspondence in May 2023. She says if the judgment was unclear or contentious, the process of having it sealed would have forced a resolution of the issues. She submits under r 11.13 of the HCR the Jacksons cannot bring this application and it should be dismissed or struck out.21
[48] Mr Allan made and developed five points to support his submission that it was not appropriate for the judgment to have been sealed in order for the Jacksons to make their application. Mr Allan submits in the alternative that if r 11.13 is engaged, then it is appropriate that leave be granted in all the circumstances.
[49] Without intending any disrespect to the careful arguments on both sides, I move straight to the issue of leave under r 11.13. Assuming (but without deciding) that leave is necessary I consider it is appropriate to grant leave to the Jacksons to bring their application. I have regard to all the circumstances as set out in the earlier part of this judgment and in particular, even if it can be said that the third HC judgment
21 Relying on Tiny Intelligence Ltd v Resport Ltd HC Christchurch CIV-2003-409-352, 2 March 2007 at [12]–[15] and Estate of MD Kidd v Van Heron [2021] NZHC 2661.
determined substantive rights (as opposed to being a decision on an interlocutory application) the Court of Appeal has expressly held that the sealing of a judgment is premature where counsel do not agree and the Judge had expressly invited an application for further directions in that case.22 In the present case, leave was expressly reserved by the Judge23 and there are disputed issues in relation to the judgment. Accordingly, I grant leave (to the extent it is necessary) for the Jacksons to bring their application.
Changes to Mr Strez’s plans that were before Duffy J
[50] Mr Small says in his undated affidavit of April or May 2024 that “right after judgment of Duffy J was delivered” they engaged Mr Strez to develop his design. He says Mr Strez has done that so that they could apply for building consent. I have serious doubts that the Smalls engaged Mr Strez “right after” the third HC judgment. That judgment was delivered on 1 March 2023.
[51] As noted above Ms Simkiss advises the Court that the application for building consent was made eleven days before the hearing (namely around 2 August 2024). That is approximately seventeen months since the third HC judgment was delivered.
[52] Mr Small says Mr Strez has made three changes to his design. Mr Small says this was to do with aesthetic and practical considerations. Those changes are, as expressed by Mr Small:
(a)a slight adjustment of the roofline angle on the small auxiliary building from 30 degrees to 35 degrees for aesthetic reasons.
(b)retaining the lower part of the western wall of the small auxiliary building which houses the termination of the mains power supply; and
(c)retaining the length of the truck bay but making roof and wall changes to the eastern side of the building to visually break up the long façade and add various human scale features.
22 Amax Gold Mines New Zealand Ltd v Moore CA23/94, 8 July 1994 at 12.
23 Third HC judgment at [175].
[53] There has been no appeal, no application or stay, no application for recall and no application for variation of the third HC judgment by the Smalls. That judgment, once delivered, must stand, subject to appeal.
[54] In the absence of agreement by the Jacksons and further in the absence of any evidence from Mr Hume, as a general proposition, the Court is simply not in a position to engage in amending orders made by Duffy J after she had received detailed evidence and plans from both architects, a joint statement from them and having heard cross-examination of both architects, after a site visit, and after the Judge gave a very detailed decision extensively discussing the evidence. I do not consider the reservation of leave for further directions extends to the Court amending aspects of the Strez design unless those amendments now proposed clearly fall within the orders or they are consented to by the Jacksons.
[55]I now consider each of those proposed changes in turn.
Roofline of auxiliary building
[56]It is first necessary to explain what is meant by the “auxiliary building”.
[57] By reference to Appendix C it is the small building at the northern end of the EFB shown in the proposed bird’s eye view (Image 3). As the Court understands, it is proposed that the auxiliary building will house an office, lunchroom and bathroom. The auxiliary building effectively replaces (but in a different position) what was on the ground floor below the residential accommodation on the first floor at the northern end of the EFB.
[58] The Jacksons say they have no objection to what they accept is a minor increase in the pitch of the roof on the auxiliary building from 30 degrees to 35 degrees. Accordingly, the Smalls may proceed with this amendment.
Retention of the lower part of the western wall of the auxiliary building
[59] This proposed alteration to the plans that were before Duffy J is better characterised as a change in the location of the auxiliary building. As is apparent from
Image 3 in Appendix C the western face of the auxiliary building is set back from the western face of the EFB.
[60] It is now proposed to move the auxiliary building further to the west (the Court is told by 1.2 metres) so that the western face of the auxiliary building and the western face of the EFB are in line with each other.
[61] The issue is whether changing the position of the auxiliary building is permitted by the terms of the third HC judgment. Ms Simkiss says it is. Mr Allan says it is not.
[62] Ms Simkiss says there is nothing in the Judge’s order in [171(a)] which fixes the location of the auxiliary building. I repeat that order here for ease of reference:
[171] The present equine facilities building is to be altered by the following actions:
(a)Removal of the wooden cladded residential north face of the present building and its replacement with a small single story building having a gable roof and a ridge line running on an east/west axis and using cladding like the present dark coloured long run steel cladding, dark coloured vertical boards or a cladding that ties in with the cladding to be used in the first defendants’ dwelling house.
[63] The submission that Ms Simkiss makes overlooks two other orders made by Duffy J. At [171(b)] the Judge ordered:
(b)Removal of the west section of the present building; being the area described at [27] herein.
[64]The relevant part of [27] is as follows:
[27] The experts were agreed that what can be identified as the residential part of this building [the EFB] as well as one bay (known as the circulation area) of the stables should be removed. This would remove the wooden cladded two storied area and the metal roller door on the western side and surrounds beside it Mr Hume accepted under cross-examination that once
the residential part of this building is removed the length of the west wall will be reduced to 72 percent of its former length.
[65] The content of [27] clearly includes removal of the part of the western face of the EFB that the Smalls now seek to retain as the western wall of the auxiliary building. That would be contrary to the order at [171(b)].
[66] I consider the relocation of the auxiliary building would also be contrary to the order at [172] which is as follows:
The first defendants are within 40 working days of this judgment to commission technical/working drawings to implement the above reductions and make further necessary alterations to achieve a building that confirms [sic] with the Strez design.
[67] The Strez design as shown in Appendix C at Image 3 clearly has the auxiliary building set back from the western face of the modified EFB.
[68] Accordingly, I consider that what is now proposed in terms of the relocation of the auxiliary building does not accord with the orders made by Duffy J. The position of that building may not be altered as is now proposed.
[69] I note for completeness it is said on behalf of the Smalls that the proposed retention of the lower part of the western wall will be cost-effective in that the lower part of the existing western wall houses the termination of the mains power supply. However, it is apparent that electrical costs were taken into account by Mr Strez in his evidence before Duffy J. There is a document that sets out reconstruction cost estimates in which Mr Strez includes an estimate of $2,000 for “electrical”. In other words, this is not a new issue.
[70] Finally, I do not consider it is open to the Smalls to argue that what they propose in terms of the location of the auxiliary building complies with the restrictive covenants when what is now proposed is contrary to the orders made by Duffy J.
Length of the truck bay
[71]The truck bay is enclosed and runs along the eastern length of the EFB.
[72] Mr Small says the order made by Duffy J to reduce the length of the truck bay to 15 metres was unexpected as, Mr Small says, he does not believe that this was what either party asked for.
[73] That is not correct. Mr Hume contended that the length of the horse truck bay area should be reduced to 14 metres.24 The Judge discussed the length of the horse truck bay from [127] to [133]. The Judge noted that in the second HC judgment the length of the horse truck bay was described as 17 metres.25 The Judge, however, further noted that in the expert statement it was recorded that when on site Mr Strez found that an additional four metres in length had been added which took the actual length to 21 metres.26 The Judge considered that a reduction from 17 metres (the length it was thought to have been) to 14 metres (the length proposed by Mr Hume) could be regarded as tinkering whereas a reduction of seven metres would have a greater visual impact and therefore be more likely to reduce the apparent size and bulk of the eastern wall of the horse truck bay.27
[74] The Judge considered there was some need to reduce the bulk and scale of the building because that would help to alleviate its faceless monolithic appearance.28 The Judge said that having a 21 metre long bay to accommodate a horse truck 11 metres in length was excessive and it was something that could be reduced without impinging on the functionality of the horse truck bay area.29 The Judge acknowledged that the present horse truck bay was also used to accommodate a tractor, but as she noted, Mr Strez accepted under cross-examination there are other buildings that could house the tractor.
[75]The Judge further said:
[131] ... Further this length [21 metres] (which has no windows) contributes to the featureless and industrial appearance of the present eastern elevation. Neither the Strez nor the Hume design have provided for windows to be inserted in the wall of the horse truck bay. Therefore, this aspect of the present building (a blank featureless wall) will not be changed by either design,
24 Third HC judgment at [127].
25 Second HC judgment at [68].
26 Third HC judgment at [127].
27 At [127].
28 At [129].
29 At [129].
although the Hume design would have its length reduced to 14 metres. Shortening the length will reduce the scale and form of the horse truck bay. It will also amplify the appearance of the recession where the horse truck bay ends and the eastern external stable wall projects out. This recession creates a change in the direction and shape of the eastern wall, which enhances the visual complexity and human scale features of this elevation. ...
[76]The Judge concluded:30
[132] I am not, however, persuaded that the reduction needs to be exactly to 14 metres. A reduction to 15 metres would provide a two-metre allowance at either end of the horse truck bay once the 11 metre horse truck is installed there. This seems to me to provide more realistic access and ease of movement around the horse truck. On the other hand, reduction of the horse truck bay wall by six metres rather than seven metres should still be enough to have a positive aesthetic effect on it.
[133] I am satisfied that the additional benefits to be gained by shortening the length of the horse truck bay will enhance the appearance of the eastern elevation without adversely affecting the functionality of the horse truck bay. Accordingly, I find there is nothing standing against reducing the length to 15 metres and much to be gained by doing so.
[77] Mr Small now says, for what are effectively practical reasons, the truck bay needs to be longer than 15 metres. It is not necessary to go into those reasons as Ms Simkiss properly accepts that what is now proposed is contrary to Duffy J’s order at [171(c)] which requires:
(c)Reduction of the length of the horse truck bay area by removal of six metres from its southern end.
[78] Ms Simkiss, however, submits that what is now proposed (a truck bay of 18 metres) complies with the restrictive covenants. The addition is at the southern end and is described in a letter from Ms Simkiss to Mr Allan dated 4 May 2023 as:
Another window is added to the lower height eastern wall of the truck bay. This gives the eastern elevation the look of a “lean-to” with a stepped roofline, which has further ameliorated the otherwise blank and monolithic look of this side of the building by providing additional human scale, visual complexity and visual interest.
[79] In light of a clear order by Duffy J I do not consider it is open to the Court to now consider an amendment to her order on the basis of a submission that what is now proposed complies with the restrictive covenants.
30 At [132] and [133].
[80] I consider that the Smalls are bound to reduce the length of the truck bay as ordered by Duffy J.
Orders sought and timeframes
[81] The timeframes proposed by Mr Small in his undated affidavit of April or May 2024 are:
20.We ask that the Court make orders which allow a reasonable time. We suggest that the following is reasonable:
(a)we will apply for a building consent within 5 working days of the Court’s order;
(b)deconstruction and reconstruction will be commenced within 10 working days of the building consent being granted;
(c)the Small family will vacate the building when the upper level of the building is removed as part of the deconstruction of the building;
(d)deconstruction and reconstruction will be completed within 6 months of commencement.
[82] As noted above, the Smalls have already filed an application for building consent. I find it somewhat surprising that they did so, so close to the hearing, on the basis of plans they knew were disputed.
[83] A new application for building consent will need to be filed with amended plans. The pitch of the roof of the auxiliary building may remain at 35 degrees (refer
[58] above). However, the location of the auxiliary building (refer [67]–[68] above) and the length of the truck bay (refer [80] above) do need to be amended in the plans to accord with the orders of Duffy J in the third HC judgment and confirmed in this judgment.
[84] At the hearing Ms Simkiss, having taken advice, informed the Court that 15 working days would be needed for the application for the building consent to be re-filed if the plans were required to be amended.
[85] The Court readily understands the frustration expressed by the Jacksons, when daily, despite some planting on the Smalls’ land, they look on to a building I described as “industrial in style”, in a rural residential subdivision.31
[86] However, I also consider there is some force in Ms Simkiss’ submission that any orders the Court makes should be able to be complied with in terms of timing. The drop-dead date of 31 January 2025 proposed by Mr Allan (refer note 6 above) may, for reasons outside the control of the Smalls, not be able to be complied with. On that latter point, Mr Allan makes a not unreasonable submission. He points to the possibility that the documents filed with the application for building consent may be considered by the Council to be incomplete. The Council would then respond with a request for information (RFI). There might then ensue an endless round of back and forth with more RFIs, all of which could stretch out over an extended period before the building consent application is finally considered and issued by the Council.
[87] Mr Allan submits that if the Court is minded to make orders as proposed by the Smalls, then the Court should require Mr Strez to provide a certificate to the Court that, to the best of his knowledge, the documents and information he has filed with the application for building consent meet the Council’s requirements for such documents and information. Ms Simkiss accepts that such an order would be appropriate.
[88] There is also the issue of when the Smalls should move out of the “temporary accommodation” they continue to occupy with the knowledge that residential occupation of the EFB is contrary to the restrictive covenants. The Jacksons seek an order that the Smalls must vacate the EFB within 90 days of the Court making an order. The Smalls say (in terms of what is said in Mr Small’s affidavit) that an appropriate order is that they must vacate the building when the upper level of the building is removed as part of the deconstruction of the building.
[89] To say that the Smalls have taken a leisurely approach to vacating the EFB is a significant understatement in circumstances when they know they should not be living there.
31 Second HC judgment at [86].
[90] At the hearing I asked Ms Simkiss why the Court should not direct that the Smalls vacate the residential accommodation in the EFB within say two weeks. The best response Ms Simkiss could come up with was a request for the Court to take a compassionate approach. That is simply not a good enough reason when the Smalls have been living there knowing such occupation is not permitted.
[91] In the end, however, I have decided I will make an order in terms as sought by the Jacksons, namely to vacate the EFB within 90 days of my order in this judgment, and not a shorter period as I was initially minded to do. That is simply and only because the Smalls came to Court expecting to defend an application that they move out within 90 days and not a shorter period as raised by the Court at the hearing.
[92] I propose to make an order as sought by the Smalls that the deconstruction and reconstruction is to be completed within six months of the commencement of the building process. However, I will also add leave for the Jacksons to apply for sequestration orders if the process is not completed within the six month period.
[93] I propose to make orders that adopt some of the orders sought by the Jacksons and some sought by the Smalls with further orders regarding reporting to the Court. The Court’s aim is to be as prescriptive as possible so that there is no misunderstanding or ambiguity as regards the process required.
[94] With such orders having been made I do not propose to add a final order as sought by the Jacksons giving the Registrar of the High Court the power to demolish the EFB.
[95] Out of an abundance of caution I also to propose to give leave to the parties to apply for directions if any issues arise in relation to the implementation of the orders.
Orders
[96]I make the following orders:
(a)The Smalls are to apply for a building consent within 15 working days of the date of this judgment on the basis of plans that conform with the
orders of Duffy J in relation to the location of the auxiliary building and the length of the truck bay, as confirmed in this judgment and as amended in this judgment in relation to the pitch of the roof of the auxiliary building.
(b)Within five working days of the filing of the application for a building consent, counsel for the Smalls is to file and serve together:
(i)a certificate from Mr Strez confirming that to the best of his knowledge, the documents and information he has filed with the application for building consent meet the Council’s requirements for such documents and information; and
(ii)a memorandum of counsel for the Smalls advising of the date of filing of the application for a building consent.
(c)Within five working days of the date that the building consent is issued by the Council, counsel for the Smalls is to file and serve a memorandum advising the Court of the date of issue.
(d)The deconstruction and reconstruction of the EFB is to be commenced within 10 working days of the building consent issuing. Within five working days of the commencement of the deconstruction/reconstruction process counsel for the Smalls is to file and serve a memorandum advising of the same.
(e)The Smalls are to vacate the residential part of the EFB within 90 days of the date of this order. To be clear, the Smalls must vacate irrespective of whether or not the deconstruction of that part of the EFB has commenced.
(f)Counsel for the Smalls is to file and serve a memorandum accompanied by photographic proof that the Smalls are no longer using the EFB as a
residential dwelling, within five working days of vacating the residential part of the EFB.
(g)The deconstruction and reconstruction of the EFB is to be completed within six months of the commencement of the deconstruction/reconstruction process.
(h)Counsel for the Smalls is to file and serve a memorandum within five working days of the completion of the deconstruction and reconstruction process advising of the same.
(i)If the Smalls have not completed the deconstruction/reconstruction process within six months of its commencement in accordance with the orders of Duffy J and (in relation to the pitch of the roof of the auxiliary building) as amended in [58] of this judgment, then the Jacksons may apply for sequestration orders against the Smalls.
(j)The parties have leave to apply for directions if any issues arise in relation to the implementation of these orders.
Costs on this application
[97]The Jacksons seek indemnity costs on their application.
[98] The Smalls oppose and seek a decreased award of costs under r 14.7(f)(v). That rule provides that the Court may reduce costs otherwise payable under the HCR if the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by failing, without reasonable justification, to accept an offer of settlement.
[99] Ms Simkiss submits it was not reasonable for the Jacksons to reject the settlement offers made by the Smalls. However, those settlement offers were based on the Smalls’ interpretation of the orders of Duffy J. In this judgment I have rejected the Smalls’ interpretation.
[100] Ms Simkiss submits the Smalls did not breach the orders made by Duffy J. I acknowledge that there are no timeframes in the orders made by Duffy J for the steps that she ordered, to be completed. Interpreted strictly, it cannot be said that there was a failure by the Smalls to comply with the letter of the orders made.
[101] However, the Court strongly suspects that unless the Jacksons had made their application, the Smalls would not have advanced their application for building consent as they have now done. Further, the Smalls continue to live in the residential part of the building in the knowledge that is not permitted by the terms of the restrictive covenants.
[102] The Jacksons did not achieve success in that all the orders they sought have not been made. But partial success is still success.32
[103] A further submission made by Ms Simkiss is that the present attempt by the Jacksons at enforcement without first sealing the judgment is very unreasonable and is reason for the Court to refuse costs. Having regard to my decision refusing the Smalls’ application to strike out the Jacksons’ application, there is no substance in this point made by Ms Simkiss.
[104] I intend to award scale costs in favour of the Jacksons. This is not a case for indemnity costs. Although there has been significant delay on the part of the Smalls in modifying the EFB, as noted, there was no timeframe in the orders made by Duffy J for completion of any of the steps she directed be taken.
[105] Counsel are to file a joint memorandum on scale costs to be awarded to the Jacksons on this application within 10 working days of the date of this judgment.
Costs on the third HC judgment
[106] Ms Simkiss submits that the Smalls were successful in the hearing before Duffy J and accordingly should be awarded costs. The Smalls say that the Jacksons’
32 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].
application heard by Duffy J was for orders to demolish the building. Ms Simkiss refers to the following paragraph in the third HC judgment:
[69] The plaintiffs accordingly seek orders which will effectively require the first defendants to modify the equine facilities building in accordance with the proposed design recommended by Mr Hume or in the alternative to demolish and remove the present equine facilities building.
[107] Ms Simkiss submits that Duffy J did not grant either order sought by the Jacksons:
(a)the orders were that the Strez design, with a few modifications, complied with the covenants; and
(b)the application for an order requiring demolition was dismissed.
[108] Ms Simkiss submits that the Smalls succeeded in large part and their costs should be paid. She further submits that there is no case for costs to lie where they fall, which is the Jacksons’ alternative position.
[109] On the other hand, Mr Allan submits that it is the Jacksons who should be awarded costs in relation to the third HC judgment. He submits the Jacksons are the beneficiary of the second HC judgment declaring the EFB is in breach of the restrictive covenants and requiring the defendants to either remediate or demolish the EFB. Mr Allan notes the Smalls did not appeal the second HC judgment.
[110] Mr Allan says the reason for the application heard by Duffy J was a failure on the part of the Smalls to comply with the second HC judgment.33
[111] Mr Allan submits the Smalls did not comply with the first order made in the second HC judgment,34 namely that within three months of the date of the judgment they were to provide plans of the alterations to the EFB prepared by a registered architect or architectural designer. Mr Allan says having regard to the Smalls’ history
33 Third HC judgment at [2].
34 At [153(a)].
and admissions recorded in the second HC judgment, the Jacksons applied for enforcement orders.
[112] Mr Allan refers to delays on the part of the Smalls and says on the very last day of the three-month period given for them to comply with the second HC judgment (to provide plans of alterations prepared by a registered architect or architectural designer) the Smalls produced a visual simulation of a potential alteration.
[113] Mr Allan notes that after the Jacksons’ application for enforcement orders dated 16 March 2021 was filed and served, the Smalls filed an affidavit from Mr Strez dated 30 March 2021 in support of the Smalls’ opposition to the Jacksons’ application. In his affidavit, Mr Strez acknowledged he had made no structural modifications.
[114] Mr Allan submits that given the delay and acknowledgements by the Smalls and their architect that they had made no structural modifications, it was reasonable for the Jacksons to apply for and pursue their application for enforcement orders.
[115] Mr Allan acknowledges the Jacksons did not obtain the precise form of enforcement orders sought but he says they were successful in obtaining further enforcement orders in the judgment of Duffy J.
[116] Mr Allan submits that while the Jacksons’ application for enforcement by demolition failed, it is unreasonable and unsatisfactory that the Jacksons should have to take any step to enforce the covenants, let alone three times (up to the point of the hearing before Duffy J). For all the foregoing reasons Mr Allan submits the Jacksons are entitled to costs.
[117] In the alternative, Mr Allan submits that costs should lie where they fall. He says both parties enjoyed varying degrees of success: the Smalls were able to maintain the EFB but were under a much more rigid regime in terms of the Court orders in which to modify it to comply with the covenants.
[118] I consider the submission made by Ms Simkiss takes an unduly narrow view of the whole background of the case by the time it came on for hearing before Duffy J.
I consider both parties enjoyed a measure of success as submitted by Mr Allan. The Smalls were able to retain the EFB rather than having to demolish it completely but were required to demolish it in part and were made subject to orders directing a regime for compliance with the third HC judgment.
[119] For those reasons I consider costs should lie where they fall in relation to the Jacksons’ application heard and determined by Duffy J. I make an order accordingly.
Gordon J
APPENDIX A
PRESENT EQUINE FACILITIES BUILDING
APPENDIX C STREZ DESIGN
1
6
0