Shotover Rise GP Limited v Queenstown Lakes District Council

[2025] NZHC 3321

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2025-425-128 [2025] NZHC 3321

UNDER

Parts 7 and 19 of the High Court Rules 2016 and sections 316 and 317 of the Property Law Act 2007

IN THE MATTER

of an application for an order extinguishing land covenants

BETWEEN

SHOTOVER RISE GP LIMITED

Applicant

AND

QUEENSTOWN LAKES DISTRICT COUNCIL

First Respondent

QUEENSTOWN AIRPORT CORPORATION LIMITED

Second Respondent

TAMATEA INVESTMENTS LIMITED (7523676) AND THOSE PERSONS LISTED IN SCHEDULE 1, BEING THE REGISTERED PROPRIETORS OF THE TITLES AFFECTED BY COVENANT 834400.3

Third Respondents

… continued

Hearing:	On the papers
Appearances:	P J Wright and J A R Barrow for Applicant
Judgment:	4 November 2025

JUDGMENT OF DUNNINGHAM J

SHOTOVER RISE GP LIMITED v QUEENSTOWN LAKES DISTRICT COUNCIL [2025] NZHC 3321

[4 November 2025]

TAMATEA INVESTMENTS LIMITED (7523676) AND THOSE PERSONS LISTED IN SCHEDULE 2, BEING THE REGISTERED PROPRIETORS OF THE TITLES AFFECTED BY COVENANT 838259.3

Fourth Respondents

TAMATEA INVESTMENTS LIMITED (7523676) AND THOSE PERSONS LISTED IN SCHEDULE 3, BEING THE REGISTERED PROPRIETORS OF THE TITLES AFFECTED BY COVENANT 850246.4

Fifth Respondents

TAMATEA INVESTMENTS LIMITED (7523676) AND THOSE PERSONS LISTED IN SCHEDULE 4, BEING THE REGISTERED PROPRIETORS OF THE TITLES AFFECTED BY COVENANT 850246.7

Sixth Respondents

TAMATEA INVESTMENTS LIMITED (7523676) AND THOSE PERSONS LISTED IN SCHEDULE 5, BEING THE REGISTERED PROPRIETORS OF THE TITLES AFFECTED BY COVENANT 5226852.1

Seventh Respondents

QUEENSTOWN COMMERCIAL LIMITED (6149490) AND THOSE PERSONS LISTED IN SCHEDULE 6, BEING THE REGISTERED

PROPRIETORS OF THOSE TITLES AFFECTED BY COVENANT 9051224.1

Eighth Respondents

ALWIN BERNARD ISAAC AND BEENA CHANDRA ISAAC AND THOSE

PERSONS LISTED IN SCHEDULE 7, BEING THE REGISTERED

PROPRIETORS OF THOSE TITLES AFFECTED BY COVENANT 9562502.8

Ninth Respondents

TAMATEA INVESTMENTS LIMITED (7523676) AND THOSE PERSONS

LISTED IN SCHEDULE 8, BEING THE

REGISTERED PROPRIETORS OF THOSE TITLES AFFECTED BY COVENANT 5907860.3
Tenth Respondents

HIS MAJESTY THE KING AND JAN ELIZABETH KELLY AND RUSSELL ANTHONY KELLY BEING THE

REGISTERED PROPRIETORS OF THOSE TITLES AFFECTED BY COVENANT 9002444.1

Eleventh Respondents

Introduction

[1]The applicant, Shotover Rise GP Ltd, has filed:

(a)a without notice application for permission to bring an originating application; and

(b)a without notice originating application for orders extinguishing land covenants.

[2]                 The substantive application is for orders under ss 316 and 317 of the Property Law Act 2007 to extinguish covenants over land the applicant is developing in Queenstown. Specifically, it seeks to extinguish covenants over three yet to be created lots on land being subdivided on the corner of Stalker Road and Frankton-Ladies Mile Highway, Queenstown, RT 941572, and which are to vest in Queenstown Lakes District Council (the Council) for use as roads and reserves. Those three lots are:

(a)in stage 1, Lot 23 LT/DP 617588 which will vest in the Council;

(b)in stage 2, Lot 500 presently part of Lot 100 DP 617588, which will also vest in the Council as a road; and

(c)in stage 2, Lot 600 presently part of Lot 100 DP 617588, which will vest in the Council as a reserve (the Encumbered Lots).

[3]                 The land to be developed is subject to nine covenants (the Covenants), which prevent the Encumbered Lots from vesting in the Council.

[4]                 For completeness, the applicant explains that the Covenants will remain registered over the remainder of the development land and all other relevant titles.

[5]                 The applicant seeks to proceed without notice to avoid the need to serve approximately 5,803 land owners, none of whom will be affected by the application.

[6]                 As is explained in the supporting affidavit of Christopher Charles Hansen, a registered land surveyor acting for the applicant in respect of its residential development, the Encumbered Lots are encumbered by the following covenants:

(a)covenants 834400.3, 838259.3, 850246.4 and 850246.7, which relate to a now-defunct water supply scheme (the Water Supply Covenants);

(b)covenants 5226852.1, 9051224.1 and 9562502.8, which relate to activities carried on at Queenstown Airport (the Airport Covenants);

(c)covenant 5907860.3, which contains building restrictions (the Building Restriction Covenant); and

(d)covenant 9002444.1 which relates to not objecting to a plan change and road relocation (the Plan Change Covenant).

[7]                 In order to carry out the development, the applicant needs to vest the Encumbered Lots in the Council, as reserves and roads. It cannot do so while the covenants remain on the Encumbered Lots because of:

(a)Section 224(b)(i) of the Resource Management Act 1991, which says that a survey plan cannot be deposited for subdivision purposes unless, where land shown on the plan will vest in a territorial authority, the plan

(or accompanying documents) includes written consent to the subdivision from every registered owner of an interest in the land.

(b)Sections 238 and 239 of the Resource Management Act, which require land dedicated for roading and reserves to vest in the Council free of all interests.1

(c)The Council’s policy on accepting land for vesting for use as roads or reserves, which only allow it to accept land subject to interests in certain circumstances, and which the Council has indicated here that it will not do, or as to which Mr Hansen’s evidence is that none of those circumstances apply here.

The without notice application to proceed by way of originating application

[8]                 In support of proceeding by way of originating application counsel point out that this procedure is suited to:2

… a straightforward application, not requiring detailed pleadings or interlocutory orders for its fair resolution. Such a type of proceeding tends to be an application under a specific statutory provision, where the issue that arises can be clearly defined, and the issues confined.

[9]                 The overarching test is whether it is in the interests of justice to allow the application to proceed in that way.

[10]              I accept that this proceeding is, as counsel submit, well suited to the originating application procedure because:

(a)the orders sought are simple and well defined;

(b)the relevant issues can be put before the Court through affidavit evidence;

1      Noting also that s 238 also arguably prevents the Council from taking land subject to any interest for use as a road.

2      Hong Kong and Shanghai Banking Corporation Ltd v Erceg (2010) 20 PRNZ 652 (HC) at [25].

(c)the orders sought will not detrimentally affect any other party;

(d)it would be just, speedy and inexpensive to determine the application this way.

[11]              Accordingly, I grant the application to proceed by way of originating application.

[12]I turn now to the substantive application.

The without notice application for orders extinguishing covenants

Should the application proceed without notice?

[13]              The substantive application is applied for on a without notice basis. Rule 7.23 of the High Court Rules 2016 provides for originating applications to be made and determined without notice on one or more specified grounds. Here, the relevant grounds relied on by the applicant are:

(a)that requiring the application to proceed on notice would cause undue delay or prejudice to the applicant; and

(b)the interests of justice require the application be determined without serving notice of the application.

[14]              Here the applicant submits that there can be no detriment or prejudice to any other party if the application is granted. Vesting lots in the Council to be used as roads and reserves will not contravene the purpose of the Airport Covenants or the Building Covenants. These covenants are directed at restricting behaviours of occupiers and no person will occupy the Encumbered Lots. Insofar as the Water Supply Covenants are concerned, they initially applied to no more than 20 parcels of land, but now apply to 2,592 titles. However, they were registered to support a water supply system which has been replaced by a Council supply and which is no longer used. Finally, the Plan Change Covenant is redundant, the relevant plan change, PC 41, having been implemented.

[15]              Not only will the removal of the covenants from the three encumbered lots not affect any parties, but the court have also recognised that the need to serve a large number of titles may be grounds for an application to proceed without notice. This was the case in Re Avlis Ltd3 and G W Wilfield Ltd.4 The delay and prejudice which the applicant would suffer if it were required to serve all, or even some, of the registered proprietors, is simply not warranted in the factual circumstances of this case. The administrative burden would be disproportionate given the lack of evidence of any effect that the application would have on the registered proprietors. Furthermore, given the lack of impact that removal would have on those parties which enjoy the benefit of the covenants, it is difficult to conceive on what matters the registered proprietors might wish to be heard.

[16]              For these reasons I am satisfied that the application to extinguish the covenants should proceed without notice.

Should the covenants be extinguished?

[17]              Many of the same considerations arise when considering whether to grant the substantive application. The applicant relies on s 317 of the Property Law Act 2007 to support its application to have the Covenants extinguished. It submits that the following grounds in s 317(1) are made out:

(a)there has been a change since their creation in the nature or extent of the use being made of the benefitted and burdened land, the character of the neighbourhood and any other circumstance the Court considers relevant (s 317(1)(a));

(b)the continuation in force of the covenants in their 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 covenant at the time of its creation (s 317(1)(b)); and

3      Re Avlis Ltd [2022] NZHC 1157.

4      Re G W Wilfield Ltd [2022] NZHC 3212.

(c)the proposed extinguishment will not substantially injure any person entitled (s 317(1)(d)).

[18]              In respect of the Water Supply Covenants, as has already been pointed out, the water supply which is protected is no longer used and has been replaced by the Council water supply.

[19]              In respect of the Airport Covenants, these covenants prevent landowners from disrupting airport operations in any way, including by complaining as to noise or otherwise acting in a way that may limit current operations or prohibit or restrict future growth options. As the applicant points out, the Airport Covenants will remain over all other titles, including new titles created as part of the development other than the Encumbered Lots. The Encumbered Lots will be used as roads and as a reserve and there will be no occupants of these lots who could be disturbed or complain about the airport operations. Thus, removal of these covenants from the Encumbered Lots is unlikely to cause substantial injury to Queenstown Airport.

[20]              In respect of the Building Covenants, there is no need for them to remain over the encumbered lots as there is no prospect of buildings being developed over land designated as a road or reserve.

[21]              In respect of the Plan Change Covenant that provides that the covenantors will not oppose plan change PC 41, being a plan change to enable residential subdivision and roading relocation. The plan change has now proceeded and the covenant is redundant, there being no outstanding obligations relevant to the properties involved arising out of the covenant.

[22]              I am satisfied that the granting of subdivision consent to develop the land in the way being undertaken by the applicant is a circumstance which, in particular, invokes s 317(1)(b) of the Property Law Act. I also am satisfied that the proposed extinguishment will not substantially injure any person so entitled.

[23]Accordingly, I:

(a)grant leave for the application to be brought by way of originating application; and

(b)make substantive orders extinguishing the identified land covenants in terms of the draft order accompanying the application.

Solicitors:
Burton Partners, Auckland