Sidwell Developments Limited Partnership v Top Dream Developments Ltd - [2024] NZHC 899

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-388

[2024] NZHC 899

UNDER ss 316 and 317 of the Property Law Act 2007 and Part 19 of the High Court Rules 2016

IN THE MATTER

of an application for an order that covenant D045783.3 be modified under s 317 of the Property Law Act 2007

BETWEEN

SIDWELL DEVELOPMENTS LIMITED PARTNERSHIP

Applicant

AND

TOP DREAM DEVELOPMENTS LTD

First Respondent

FULTON HOGAN LAND DEVELOPMENT LTD

Second Respondent

DEGUI YIN
Third Respondent

SIMON LEO ANDREW, JODIE ANN MARGARET ANDREW AND NICHOLAS INDEPENDENT TRUSTEE CO LTD

Fourth Respondent

Hearing: 12 and 13 February 2024

Counsel:

A S Ross KC and Y Lee for Applicant

C T Walker KC and A J Thorn for Fourth Respondents

Judgment:

23 April 2024

JUDGMENT OF BREWER J

SIDWELL DEVELOPMENTS LIMITED PARTNERSHIP v TOP DREAM DEVELOPMENTS LTD [2024] NZHC 899 [23 April 2024]

This judgment was delivered by me on 23 April 2024 at 2.30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Introduction

[1] The applicant applies pursuant to ss 316 and 317 of the Property Law Act 2007 (the Act) to remove a restrictive covenant registered against the title to its property at 64 Sidwell Road, Wainui (Lot 6). The fourth respondents are the owners of land at Endsley Rise (Lot 3), which has the benefit and burden of the same restrictive covenant. For the purposes of this judgment, it is enough to say that the restrictive covenant prevents the subdivision of land to which it applies.

[2]There are two major issues for me to determine:

(a)whether the covenant should be extinguished; and, if so,

(b)whether, and to what extent, the fourth respondents should be compensated.

Background

[3] Lot 6 comprises 4.198 hectares. It was formed from the subdivision of approximately 73 hectares of land into six rural residential titles. Lot 3 is also one of them. The covenant was registered against the six titles in 1996. Clause 1 of the Second Schedule of the covenant prevents the use of the subject land for any purpose other than permitted or controlled activities under the relevant District Plan, as well as specified potentially offensive uses, such as pig farming.

[4] In 1996, the land comprising the six Lots was zoned “Rural 1 (Rural General)”. This zoning provided a limited range of “permitted activities” and “controlled activities”. These activities were reflective of the primary purpose of the zone which was to enable farming activities while providing for limited opportunities for other non-rural activities.

[5] In 2016, the proposed Auckland Unitary Plan recommended that the land and its surrounding area become the Wainui Precinct. The recommendations now form part of the Auckland Unitary Plan.

[6] The land is now zoned as a mixture of Residential — Mixed Housing Suburban, Residential — Mixed Housing Urban, Residential — Terrace Housing and Apartment Building, and Open Space — Conservation.

[7] Since 1996, the Northern Motorway has been constructed and the surrounding…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Sidwell Developments Limited Partnership v Top Dream Developments Ltd [2024] NZHC 899
Case: [2024] NZHC 899
Decision Date: 23 April 2024

CaseChat Overview and Summary

Sidwell Developments Limited Partnership has applied to the High Court of New Zealand to modify a restrictive covenant registered against their property at 64 Sidwell Road, Wainui (Lot 6), under sections 316 and 317 of the Property Law Act 2007. The covenant prevents the subdivision of the land to which it applies. The fourth respondents, Simon Leo Andrew, Jodie Ann Margaret Andrew, and Nicholas Independent Trustee Co Ltd, who own land at Endsley Rise (Lot 3) with the benefit and burden of the same restrictive covenant, oppose the application. The key issues for determination are whether the covenant should be extinguished and, if so, whether the fourth respondents should be compensated. The applicant argues that the covenant should be removed due to changes in the nature and extent of the use of the land, the character of the neighbourhood, and other relevant circumstances since its creation in 1996. The applicant has obtained resource consents to develop and subdivide Lot 6 into 74 new residential dwellings. The fourth respondents argue that the covenant should remain in place to protect their rural lifestyle and to prevent intensive housing development on adjacent lots. The Court finds that the applicant has established that sections 317(1)(a) and (1)(b) of the Act apply, as the neighbourhood of Lot 6 has changed significantly since the covenant was created, and the continuation of the covenant in its existing form would impede the reasonable use of the burdened land to a different extent from that which could reasonably have been foreseen in 1996. The Court declines to exercise its discretion against the applicant, as the fourth respondents' concerns about the loss of amenity and potential urbanisation are outweighed by the significant changes in the neighbourhood and the applicant's right to develop their land. The Court also declines to award compensation to the fourth respondents, as there is no appreciable loss or damage to them if the covenant is extinguished. The Court's decision is based on the "willing seller, willing buyer" principle, which does not support a share of profit award to the fourth respondents, as the increase in property values due to the change in zoning applies equally to all lot owners. The Court grants the application, extinguishing the covenant against Lot 6 in its entirety, and declines to award compensation.

Orders