Shildon Limited
[2025] NZHC 2663
•12 September 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-1714
[2025] NZHC 2663
UNDER Part 19 of the High Court Rules 2016 and ss 316–317 of the Property Law Act 2007 IN THE MATTER OF
an application to extinguish the land covenants created by transfers C971602.2, D023735.1 and D024469.2
BETWEEN
SHILDON LIMITED
First Applicant
JIE XIAO and QIN ZHAO
Second ApplicantsTREVOR ANTHONY KNOX and JOANNE ISABELLE KNOX
Third Applicants
Hearing: 11 September 2025 Appearances:
S E Wroe and L M Sykes for Applicants
Judgment:
12 September 2025
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 12 September 2025 at 3 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors/Counsel:
Daniel Overton Goulding, Auckland S E Wroe, Auckland
SHILDON LTD [2025] NZHC 2663 [12 September 2025]
Introduction
[1] This is an originating application seeking an order under s 317 of the Property Law Act 2007 to extinguish restrictive covenants registered against the titles to three properties.
[2] The land covenants in question were registered in 1996. The applicants own neighbouring properties on West Hoe Heights, Orewa:
(a)Shildon Ltd owns 250 West Hoe Heights;
(b)Jia Xiao and Qin Zho own 246 West Hoe Heights; and
(c)Trevor Anthony Knox and Joanne Isabelle Knox own 248 West Hoe Heights;
together, the Properties.
[3] The wording of the covenants do not clearly identify the benefited land and refer only to retained land. The applicants have examined all the land titles owned by the original transferor in the 1990s. The largest section of land that sits around the applicants’ land is currently being divided into 466 new sections. The first stage of the subdivision has created 12 new titles. One large section remains in the ownership of Shildon Ltd (the first named applicant), 10 are owned by Shildon Ltd and are subject to sale and purchase agreements with settlement due to occur on 2 January 2026. The terms of the sale and purchase agreements with each purchaser allow Shildon Ltd to provide consent on matters relating to title without reference to the buyers. The remaining title has been sold to Minas Anor 2022 Ltd (Minas). The solicitor for the applicants has written to Minas and its mortgagee seeking consent. They have been served with proceedings. No communication has been received in response. No opposition documents have been filed. Accordingly, the application is unopposed.
[4] The covenants registered against each of the applicants’ properties are materially similar in terms, with some differences in wording. In substance they provide as follows:
(a)not to erect any building or structure without previously providing plans and specifications of the proposed building to the transferor and obtaining the prior written consent of the transferor, such consent not to be unreasonably withheld;
(b)not to erect any commercial glasshouse or round barn;
(c)not to erect or use any existing building on the land for the purposes of a piggery, any commercial poultry use, the keeping of ferrets, or the keeping of birds and/or farm animals for a commercial purpose;
(d)an obligation to maintain a stock-proof fence with posts eight wires and battens along the boundary between the land and retained land; and
(e)not to erect or paint any existing fence white.
[5] In addition, each of the applicants’ properties contains covenants placed on the transferor to permit entry for the purposes of connecting into the electricity transmission network and to take electricity supplies from that network and lay cables under or over the retained land together with rights of maintenance, provided that such works cause as little inconvenience as possible and subject to make good obligations.
[6] The owners of any current titles that have been identified as possibly constituting the “retained land” (to the extent they still remain) have all advised they support the application to extinguish the covenants, as have the mortgagees of those properties.
Legal principles
[7] Pursuant to ss 316 and 317 of the Property Law Act, the Court may make an order to extinguish an easement or covenant if it is satisfied as to any of the grounds in s 317(1).
[8]Section 317(1) provides:
317 Court may modify or extinguish easement or covenant
(1)On an application (made and served in accordance with section 316) for an order under this section, a court may, by order, modify or extinguish (wholly or in part) the easement or covenant to which the application relates (the easement or covenant) if satisfied that—
(a)the easement or covenant ought to be modified or extinguished (wholly or in part) because of a change since its creation in all or any of the following:
(i)the nature or extent of the use being made of the benefited land, the burdened land, or both:
(ii)the character of the neighbourhood:
(iii)any other circumstance the court considers relevant; or
(b)the continuation in force of the easement or covenant in its existing form would impede the reasonable use of the burdened land in a different way, or to a different extent, from that which could reasonably have been foreseen by the original parties to the easement or covenant at the time of its creation; or
(c)every person entitled who is of full age and capacity—
(i)has agreed that the easement or covenant should be modified or extinguished (wholly or in part); or
(ii)may reasonably be considered, by his or her or its acts or omissions, to have abandoned, or waived the right to, the easement or covenant, wholly or in part; or
(d)the proposed modification or extinguishment will not substantially injure any person entitled; or
(e)in the case of a covenant, the covenant is contrary to public policy or to any enactment or rule of law; or
(f)in the case of a covenant, for any other reason it is just and equitable to modify or extinguish the covenant, wholly or partly.
…
[9] In Synlait Milk Ltd v New Zealand Industrial Park Ltd, the Supreme Court observed that a two-stage approach to applications under s 317 is generally adopted:1
(a)first, whether one or more of the grounds in s 317(1) is made out; and
(b)whether the discretion to extinguish or modify the covenant and/or easement should be exercised.
Analysis
[10] The main ground relied on under s 317 is that there have been extensive changes in the nature and use of the benefited and burdened land since 1996 in terms of s 317(1)(a)(i). As identified by the Court of Appeal, the more distant the creation of a covenant in terms of time and parties, and the less foreseeable the change in circumstances that has occurred since the covenant was created, the easier it will be to make out the case for extinguishment.2
[11] The land was originally farmland, and the wording of the covenants suggests that the intention was for the land to retain its rural character given references to maintaining stock-proof fences and prohibiting piggeries and commercial poultry.
[12] In 2025, that land is now being used for residential purposes, and there is no farming in the area. In that context, the impact on the burdened land owners in relation to consents and maintaining stock-proof fencing is unnecessarily restrictive. The effect of subdivisions also means that the burdened land owners would need consent from multiple “transferors”, creating a greater burden than was anticipated. At the time the covenants were created, the land was in a “Special Zone”, which contemplated rural living amongst a farming environment. The land is now in a “residential — single house” zone contemplating suburban housing density. Accordingly, the extent to which the land can be used for housing development has greatly increased.
1 Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157, [2020] 1 NZLR 657 at [67].
2 Reynolds as trustees of the F&J Reynolds Trust v Parklands Properties [2021] NZCA 394, (2021) 22 NZCPR 516 at [149].
[13] Correspondingly, the character of the neighbourhood has changed substantially in terms of s 317(1)(a)(ii). The neighbourhood has changed from rural lifestyle/ countryside living to a situation where planning laws support a move from rural development to urban development.
[14] I consider that reasonable use of the burdened land is also impeded in a way that was not foreseen by the original parties in terms of s 317(1)(b). At the time of creation, consent would have been needed from just one party (Mr Hall) to approve a building or structure, and limited development in the area might have made it reasonable for Mr Hall to wish to maintain a consistent look or aesthetic. Now, the difference in zoning has meant that there is a much greater number of houses in the area than originally anticipated, and a consistent aesthetic in an urban development is no longer reasonable, nor are the covenants congruent, such as the stock-proof fence requirement.
[15] In terms of s 317(1)(d), I am satisfied that no substantial injury will result from removal of the covenants. The covenants are not registered against any benefiting titles, so it is unlikely that those current owners were aware of them until this application arose. No objections have been raised.
[16] Mr Tollemache, a resource management planner, has explained in his affidavit his assessment that the covenant is no longer relevant. Among other things, he notes that a fast track consent for the subdivision involving 250 West Hoe Heights requires installation of an underground electricity supply system to service the approved development in accordance with the requirements of the Auckland Code of Practice for Land Development and Subdivision, and the relevant network utility operator. This will require a new layout of electricity services that differs from the current easement situation.
[17] For the above reasons, I am satisfied that there are numerous grounds made out under s 317, meaning that the Court has a discretion to extinguish the covenants.
[18] In terms of the second stage assessment of whether to exercise the discretion, I see no good reason not to do so. All benefiting owners save one have expressly consented to the application, and there is no identified detriment from granting the application for the remaining benefiting owner. Conversely, if the covenants were to remain in place, they would impose unnecessary obligations on the applicants in the context of a suburban development that is entirely different from the circumstances and zoning when the covenants were put in place.
[19] Accordingly, the applicants have satisfied me that there are proper grounds for extinguishment of the covenants under s 317 of the Property Law Act and that it is appropriate to grant the orders as a matter of discretion.
Result
[20]I make the following orders under s 317 of the Property Law Act:
(a)The land covenant created by Transfer D023735.1 shall be extinguished from any land contained with Record of Title NA103A/898, known by its street address as 246 West Hoe Heights, Orewa.
(b)The land covenant created by Transfer D024469.2 shall be extinguished from any land contained within Record of Title NA103A/899, known by its street address as 248 West Hoe Heights, Orewa.
(c)The land covenant created by Transfer C97160.2 shall be extinguished from any land contained within Record of Title NA103A/900, known by its street address as 250 West Hoe Heights, Orewa.
O’Gorman J
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