Spring Grove Land Limited - [2016] NZHC 2109

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000844 [2016] NZHC 2109

IN THE MATTER
of Parts 7 and 19 of the High Court Rules

and Sections 316 and 317 of the Property
Law Act 2007

AND

IN THE MATTER

of an application by SPRING GROVE LAND LIMITED a Company at Christchurch for an Order extinguishing covenants

Hearing: 6 September 2016 (Determined on the papers)

Counsel:

N A Till QC for Applicant

Judgment:

6 September 2016

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] Spring Grove Land Limited (Spring Grove) applies by originating application, without notice, for orders directed at extinguishing certain land covenants registered over land which it owns at Belfast, and which it is in the process of subdividing into separate residential titles. Essentially, Spring Grove seeks release of the covenants from areas within the subdivision which are to vest in the Christchurch City Council (the Council) as road and reserve, and other areas which are to be transferred to Orion New Zealand Limited (Orion) for electricity reticulation purposes. It is a requirement of both the Council and Orion that when they receive title to the land in question, as they must in order for the subdivision to proceed, it is unencumbered.

[2] Evidence in support of this application has been presented by Mr I R Thompson, an experienced property consultant engaged by Spring Grove, Mr D W

Spring Grove Land Ltd application for an Order extinguishing covenants [2016] NZHC 2109 [6 September 2016]

Mawhinney, the surveyor responsible for the surveying work required for the subdivision, Mr J M van Bolderen, a consultant on complex land transactions, and Mr A P Alloo, the solicitor for Spring Grove.

[3] The evidence establishes that the two land covenants, registered in 2012, were created respectively to avoid the possibility of any business being established which might compete with a nearby meat processing works, the owner of which then owned the land in question, and to ensure that no complaints in relation to smell were received in respect of a nearby tannery from purchasers of any land in any future development. The tannery has now ceased business and the land on which it stood has been sold to another owner.

[4] The evidence also establishes that both the covenants will remain registered on all the titles to the residential allotments which are being created by the subdivision, both in Stage 1 (which is now at an advanced point) and in relation to future stages. It also establishes that removing the covenants from the land to vest in the Council and to be transferred to Orion would not adversely affect either the owners of future allotments, or the Council and Orion. The short point is that land to be used for roading and electricity reticulation, which are public amenities, does not require the benefit of the restrictive covenants in issue.

[5] The covenants could be extinguished by each owner of other allotments to which they relate signing a registerable form of surrender. Mr Alloo…

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: Spring Grove Land Limited [2016] NZHC 2109
Case: [2016] NZHC 2109
Decision Date: 6 September 2016

CaseChat Overview and Summary

The High Court of New Zealand heard an application by Spring Grove Land Limited to extinguish covenants over land it owns in Belfast, Christchurch, which it is subdividing into residential titles. The applicant sought to extinguish the covenants from areas designated for the Christchurch City Council as road and reserve, and from areas designated for Orion New Zealand Limited for electricity reticulation. Both the Council and Orion required the land to be unencumbered upon transfer. The covenants were established in 2012 to prevent competition with a nearby meat processing works and to avoid smell complaints from a nearby tannery. The tannery has since ceased operations and the land sold to another owner.

The court was required to decide if the covenants could be extinguished by a court order instead of requiring individual signatures from each owner of the affected allotments. The court also needed to determine whether the application could proceed without notice, given the lack of detriment to other parties, and if the surrender of the covenants by court order was the most practical and cost-effective method. Additionally, the court had to consider whether it was appropriate to reserve leave to apply for defined orders in relation to future stages of the subdivision.

The court found that it was appropriate for the application to proceed by originating application without notice, as there was no detrimental effect on any other party. The court was satisfied that both covenants should be surrendered by court order, as this method was more practical and cost-effective, and it would bring certainty at a time when titles were close to being issued for Stage 1 of the subdivision. The court also found it appropriate to reserve leave to apply for defined orders in relation to future stages of the subdivision, to avoid the need for new applications at each stage. The court made orders in line with the draft order submitted on the application.

This decision highlights the importance of practical and cost-effective solutions in complex land transactions, and the court's willingness to adapt its processes to facilitate efficient outcomes.

Orders