Structured Finance (NZ) Limited v Innovus Beaumont Limited HC Auckland Civ-2011-404-007221
[2011] NZHC 1738
•29 November 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2011-404-007221
IN THE MATTER OF the Land Transfer Act 1952
BETWEEN STRUCTURED FINANCE (NZ) LIMITED
Applicant
ANDINNOVUS BEAUMONT LIMITED Respondent
Hearing: 28 and 29 November 2011
Appearances: S A Grant and M E Smith for Applicant
N D Arthur and L Fraser for Respondent
Judgment: 29 November 2011
ORAL JUDGMENT OF WHATA J
Solicitors:
Knight Coldicutt Ltd, Private Box 106214, Auckland City 1143. Chapman Tripp, PO Box 2206, Shortland Street, Auckland 1140
Copy to:
S A Grant, PO Box 4338, Shortland Street, Auckland 1140
STRUCTURED FINANCE (NZ) LIMITED V INNOVUS BEAUMONT LIMITED HC AK CIV-2011-404-
007221 29 November 2011
[1] Structured Finance (NZ) Ltd (“SFL”) is the mortgagee in respect of a property known as the Beaumont Quarter. The mortgagor, Beaumont Trustee Co Ltd (“Beaumont Trustee”) has defaulted on the mortgage and SFL has exercised its mortgagee powers to sell the property to Mr Ladbrook.
[2] Mr Ladbrook wants to realign the existing access way so that it conforms to the registered access easement. The existing access way however avoids the drip line of a large tree in accordance with a resource consent.
[3] Innovus Beaumont Ltd (“IBL”), owns several of the units occupying Beaumont Quarter. IBL does not want the access way to change. It says that SFL consented to the current alignment. It has registered a caveat to protect the current access way. SFL seeks to remove the caveat.
[4] The primary issue in this case is whether or not SFL consented to the realignment of the access way to its current position.
[5] I am grateful to counsel for assembling their respective and helpful cases under urgency.
Facts
[6] Both parties spent some time to persuade me that the factual matrix supported their respective positions. It is necessary for me to set out my view of events in some detail.
Mortgage
[7] SFL lent money to Beaumont Trustee secured by a mortgage over the Beaumont Quarter site. The mortgage is dated 10 April 2001. The mortgage included standard clauses, including 16 which states:
16. BUILDING AND OTHER WORKS
(a) (i) This clause applies if any development works (as defined in paragraph (ii) of this subclause) are in the course of being, or are intended to be, carried out.
(ii) In this clause, “development works” includes the subdivision, development or improvement of the land and also includes the construction, development, alteration or repair of any building or other improvement on the land.
(b) The mortgagor will immediately and continuously proceed with the development works until completion in a workmanlike manner and in accordance with plans and specifications submitted to and approved by the mortgagee and, where applicable, in accordance with a building permit or other approval or consent issued by the relevant authority.
(c) …
Resource consents applications (and some consents)
[8] The relevant works are detailed in the various consents granted in respect of the site. Regrettably, the consenting history of the site is far from clear. Complete copies of consents, verified by an appropriate independent expert were not tabled. The following is an account based on a collection of disparate information available to counsel in the short time leading up to hearing.
[9] On 2 April 2002, Melview Developments Ltd (“Melview”) obtained a resource consent to subdivide Beaumont Quarter in to 15 lots. It was the first consenting step in a proposal to develop the whole site for residential units to be effected in three stages. The plans (apparently) lodged with the application show a north entry access way from Beaumont Street and then crossing lot 11 over an area marked “L”. Lot 11 is also described in the report preceeding the decision to grant consent as follows:
Lot 11, which is vacant, will have an area of 423 square metres. This site has direct access off Beaumont Street. The ground level of this lot will have a 6 metre wide and 4.0 metre high right of way corridor to provide access to the rest of the development.
[10] Relevant conditions dealing with access within and to the site include conditions 4.2.1 and 4.2.2. Those conditions state:
4.2.1That the rights of way labelled, A, B, C, D, E, F, G, H, I, J, K, L, M, NM R, S, V, X, and Y be formed, paved and drained to Auckland City Council specifications including the provision of a stormwater catch-pit within the boundaries of the rights of way and where necessary the provision of kerbing, or similar, to prevent water flowing onto other property. Engineering plans showing the proposed construction of the rights of way are to be submitted to Development Engineering for prior approval. Acceptable solutions can be found in ACC Standard Engineering details sheets 12903/401
– 404.
Note Council engineers have indicated that they would look favourable on an application to bond for the paving of these rights of way until the construction of the proposed Units has been effected, provided that this occurs prior to the lapsing of the consent. However, during this period, access is to be maintained in a condition satisfactory to Council, and is to be available for use by all the future Unit Title owners of Lots 2, 3, 4, 5 12A and B.
4.2.2That the two existing street crossing serving the development of Beaumont Street be re-constructed to Auckland City Council standards prior to any development being carried out on the site or the issue of the Section 224(c) Resource Management Act, 1991
Certificate, whichever should come first. …
[11] The plans attached to the resource consent are not uniform in their description of area “L”. One plan identifies area “L” with a slight kink as the access way exits onto Beaumont Street. Another plan in the same set shows egress straight on to Beaumont Street. Relevantly, neither route avoids the drip line of a large tree immediately to the north of the access way.
[12] The reference to “L” was later changed to “U”, and an easement granting access rights with that label was registered on 19 April 2002. This easement is shown with a slight kink, but again does not avoid the drip line of the tree.
[13] As early as 16 April 2002, however, Melview was aware that the access way would need to be designed and located so as to avoid the drip line of a large tree.1
This change was reflected in the application for a vehicle crossing permit, which shows the access way avoiding the drip line.
[14] Melview then applied to bond outstanding works, including those in relation to the access way. Section 224(c) certificates could not be released until all of the
1 Refer facsimile Brian Wrench to Nick Mouat, 16 April 2002, and detail plan of north entrance, Sinclair Knight Merz.
works were completed. To enable the required certificates to be issued in lieu of the works, Melview offered two guaranteed bonds securing completion of those works. The officers‟ reports recommending grant observes:
4.1 Condition 4.2.1 – right of way construction
The bond is for the complete construction of all right of ways for the development. The reciprocal rights of way form legal access to the lot 2, 3,
4, 5, 6A, 6B, 6C, 7A, 7B, 7C, 8 and 9. There is approximately 430 metres of dual access carriageway. The “Rights of Way” will be constructed over remediated contaminated areas. … The bond is considered to be an
appropriate item provided the works are completed prior to any occupation of the dwelling. This will afford access to the site as would be typically
expected by any subsequent owner.
5. Conclusion
The consent holder has made an application to bond four Subdivision Consent Conditions 4.2.1, 4.2.3 and 4.2.23 that cover the requirement to construct right of way access and an interim car park. The application is primarily made in order to allow the consent holder to obtain new titles for the development and allow completion of sale and purchase agreements made on individual dwellings within the development. The works are considered to be discretionary bonding items. We consider that the bond application is in order and recommend the bond with a condition.
[15] The Council approved the application on 1 August 2002.
[16] On 13 April 2004, Melview Beaumont Quarter Limited sought consent for
130 residential units, groundfloor bulk retail and office space comprising stages 3, 4 and 5 of the Beaumont Quarter comprehensive mixed use development.2 The application included a plan produced by Warren and Mahoney, SK000, showing the access way aligned to avoid the drip line of the tree. A further application for stage 5 of the development was made on 6 October 2005. The (apparently) attached plans (200500662401), show the “as built” north entrance access way avoiding the drip
line of the tree. They also refer to the easement area “U”, noting areas of access outside of the “right of way”. A copy of this as built plan is attached to this
judgment as annexure A.3
2 There is evidence of an earlier consent hearing being granted to Grange Projects Limited dated 13
February 2004.
3 Exhibit 4. The Court has inserted the letter “U” to identify the location of the easement.
[17] Regrettably, the resource consents to which these applications related were not produced (as far as I could tell). I will nevertheless assume they were granted on the conditions sought.
[18] For completeness, the approved section 224 plans show the north entrance access way as per the registered easement, that is within the area marked “U”. This included the pedestrian right of way in favour of the Auckland City Council as required by the resource consent.
Deed of Development
[19] On 21 December 2007, Melview and the owner, then Beaumont Partners Ltd, executed a development deed (“Development Deed”). The Development Deed records at clause 3:
3.1Apart from the development works proposed for Lot 9 and Lot 11 described generally and not definitively in Schedule 2 and 3 respectively, the development is substantially completed however, the Developer reserves the right to:
3.1.1 …
3.1.2Make variations to the Lot 9 and Lot 11 plans attached in Schedules 2 and 3 provided that any material change will require the prior approval of the Owner (such approval not to be unreasonably withheld or delayed);
3.1.3 …
and the Owner will not object to any Consents in relation thereto, nor attempt to frustrate or prevent and will support the exercise of such rights by the Developer.
[20] The agreement also provides that:
3.2.2the Owner shall not be required to do or omit to do anything which would put it in breach of the terms of any leases or the Property or any statutory, regulatory or other legal requirement.
[21] Attached to the Development Deed is schedule 3, being the plans for lot 11. On the site plan as built, there is shown an area marked “U”, the area subject to the registered easement. While not entirely clear, the plan also identifies the “as built”
area outside of the right of way. This plan appears to be a precursor to the consent plans subject to the final stage 5 consent.
[22] Most relevant to this case, a plan attached to the Development Deed shows a form of development that spans the “as built” access way. This plan also appears to be a precursor to the consented plans for stage 5.
[23] At IBL‟s request, there was a variation to the land covenant, with SFL‟s approval. The variation altered 2.2 of the Development Deed and added a proviso limiting the liability of the owner to loss or damaged caused by its own breaches.
SFL’s role
[24] SFL actively monitored the development of the site. There are communications showing that Martyn Reesby, managing director of SFL, was kept abreast of the works that Council required to achieve s 224(c) compliance, including the need for bonds in respect of those works specifically relating to the access way. Mr Reesby was also actively engaged in securing the bonds, both from the Bank of New Zealand and also from SFL. A term of one of those bonds included:
(g) Resource consent obtained with acceptable conditions for the development of stage two. SFL will accept a letter from an acceptable town planner confirming resource consent for stage two which will be obtained in the next month for the first SFL draw down of up to 1.6 million.
[25] Clause (h) of the same document requires the following:
(h) Prior to the first drawdown of the development loan the SFL approved quantity surveyor shall (at your cost) provide SFL with a certificate confirming:
(i) All building, local authorities permits and resource consents required under the Resource Management Act 1991 and the Building Act 1991 have been obtained for the 55 units and will remain current throughout the period of construction, or that there are no impediments to the issuance of the building consent should it not have been issued prior to the drawdown.
[26] There is also a communication from Mr Reesby enclosing the quantity surveyor report and then seeking a report from the project manager as soon as
possible on, among other things, the status of roading and when it will be completed. As noted, SFL also specifically consented to the variation of the Development Deed that IBL sought.
IBL interests
[27] On 19 April 2002 Beaumont Trustee acquired lot 11 from Melview. Beaumont Trustee owned the underlying free titles of the remaining lots, subject to leasehold unit plans. Beaumont Trustee sold all of the 258 residential units on the freehold lots in Beaumont Quarter (except for lot 11). In 2008, Beaumont Trustees then sold the underlying freehold titles (except for lot 11) to Beaumont Partners Ltd. Martyn Reesby was a shareholder of Beaumont Partners at the time. In about 2009
Beaumont Partners sold the freehold assets to IBL, who converted the leasehold unit plans to freehold unit plans. IBL owns about 20 per cent of the units in Beaumont Quarter.
Beaumont Trustee’s Default
[28] In March 2011, Beaumont Trustee defaulted under its mortgage to SFL. Notice was served on Beaumont Trustee on 27 April 2011, and the defaults were not remedied by 27 May 2011 as required.
[29] At the same time, Beaumont Trustee entered into an agreement to sell lot 11 to Mr Ladbrook. SFL then advised Mr Ladbrook that SFL had elected to adopt the agreement for sale and purchase under s 179 of the Property Law Act.
[30] It is not disputed that Mr Ladbrook proposes to build a hotel across the full length of lot 11 with a easement for pedestrian and vehicle access in accordance with the registered easement on the land. The immediate effect of this will be to displace the as built access way.
[31] IBL objects to this and advised the liquidators of Beaumont Trustee that SFL
agreed to realign the easement to reflect the “as built” access way.
Jurisdiction/Issues
[32] A caveator must demonstrate a beneficial interest in land to the extent that there is a reasonably arguable case supporting the existence of that interest.
[33] Without accepting that IBL holds a caveatable interest, Ms Grant accepted that the focal point for determination is whether SFL consented to the equitable interest asserted by IBL. This issue drives from s 105 of the Land Transfer Act 1952 which states:
105 Transfer by mortgagee
Upon the registration of any transfer executed by a mortgagee for the purpose of exercising a power of sale over any land, the estate or interest of the mortgagor therein expressed to be transferred shall pass to and vest in the purchaser, freed and discharged from all liability on account of the mortgage, or of any estate or interest except an estate or interest created by any instrument which has priority over the mortgage or which by reason of the consent of the mortgagee is binding on him.
[34] I will proceed on that basis. However, in order to find consent, I must first identify what it is that SFL is alleged to have consented to.
[35] In terms of consent, my jurisdiction was recently stated by the Supreme Court in Cashmere Capital Ltd v Carroll.4 The Supreme Court stated:
[79] These decisions indicate that a consent which, under ss 105 and 119, binds a mortgagee to the competing estate or interest in another instrument, requires conduct which affirms the lease. A mortgagee who is aware of a third party‟s interest, and passively stands by, making no objection, has not consented. For there to be a valid consent the mortgagee must either have been aware of the essential terms of the lease or be shown to have consented to the lease whatever its terms may be. Only then does the mortgagee consent to the terms of the other instrument, in the sense of agreeing to be bound by it. Making an advance as mortgagee, while being aware of the other instrument and another party‟s interest in it, of itself, does not amount to consent.
[36] While both parties cited various cases to me, the resolution of this case depends on its facts. I note only that:
(a) IBL need only show a reasonably arguable case; and however
4 Cashmere Capital Ltd v Carroll [2009] NZSC 123; [2010] 1 NZLR 577.
(b)An expansive approach to the meaning of consent would not be consistent with the purpose of the legislation implementing the Torrens system of land tenure.5
SFL’s main arguments
[37] SFL contends that:
(a) There is no agreement in writing upon which to base a caveatable interest in land;
(b) There is no valuable consideration to bind SFL;
(c) There is no consent to an easement over the “as built” works in accordance with the test set out by the Supreme Court in Cashmere Capital Ltd v Carroll.6
(d)There is no prejudice to IBL given that it can still seek relief under the Property Law Act 2007. SFL also makes the point that any change to the alignment will require fresh resource consent so there is no immediate need for the caveat.
IBL’s main arguments
[38] IBL contends that:
(a) There is a long history to the background of the current alignment, including a significant consenting process leading to the location of the current access way;
(b) Bonds were required for the roads as a pre-condition of purchase and
SFL was closely involved in that bonding process;
5 Ibid at [75].
6 Ibid.
(c) Residents have used the access way since its inception;
(d)There have been various agreements between Beaumont Trustees and the owners that the right of way would be granted on the “as built” roadway and that this intended to create rights in the nature of an agreement;
(e) SFL‟s active involvement in the development including the brokering of the road bonds and consenting to the variation of the Development Deed confirms SFL‟s consent to the realignment;
(f) SFL has benefited from the closure of the transactions which in themselves were premised on the realignment;
(g) The unit owners contracted to agree the variation with the land owner;
(h)The caveat is necessary as interim protection pending the resolution of the Property Law Act proceedings.
Agreement?
[39] I begin by analysing the equitable easement that IBL says exists between Beaumont Trustee (as former owner of lot 11) and the various owners, including IBL, of the residential units in the Beaumont Quarter. I will then turn to examine whether SFL consented to that agreement.
[40] Mr Arthur, for IBL, submitted that the agreement arose out of the sale and purchase agreements between residential owners and Beaumont Trustees, informed by representations made by (among others) Melview, together with the “as built” condition of the access way at the time of the purchase. Mr Arthur refers to evidence of Mr Brown who states:
6I did not receive any written marketing material prior to my purchase. I did not need any such material because I actually worked on College Hill near the development (and still do), which was what caused me to be interested in it. I visited the development,
and was able to view some of the completed units, including the unit next door to the one that I ultimately ended up purchasing. Those visits gave me sufficient information about the development as a whole so as to give me a clear picture as to what I was purchasing into.
7The driveway and access points were already constructed (although the pavements and pathways were not fully completed at that point in time) which gave me a good appreciation of the general layout of the development.
8.On my purchase, I received a “Residents‟ Manual” which included information about the management services within the development, the body corporate and the residents‟ society, security and access information, information about the finishes and general maintenance, and a master plan of the development. A copy of that manual is at page [1]. The current location of the driveway and access points is clearly marked on that master plan, which was included towards the end of that manual. My unit, number 94, is in the block of six units adjacent to the Beaumont Street access point closest to the northern motorway. I also purchased, together with the unit itself, a carpark which is located underneath the unit. I access that carpark from the driveway that is shown on the master plan and which is located at the northern end of Fisher Point Drive, just before the access way on to Beaumont Street.
[41] In IBL‟s case, Mr Stilwell, a director of IBL observed:
10Nigel took the time to explain the Patterson Plan. It was clear to me from the discussion that his intention was for the accessway and footpath to remain in its present location. We talked about the portal in the building as I wanted to be assured that it would be constructed with the generous opening shown. Nigel assured us that the site would be developed in accordance with the Patterson Plan. I can recall asking about the height of the portal, as I wanted to know whether tall vehicles were still going to be able to get through the opening. I also recall in that discussion that Nigel specifically made the point that the building was going to complement Beaumont Quarter, and that it was going to be a „five star green building‟. I took comfort in the building being an Andrew Patterson design, given his reputation for high quality architecture, and that the environmental star rating was also noted on the plans.
[42] He also observes at:
11 While I do not recall specifically discussing a re-alignment of the easement for the right of way over Lot 11, the conversation was along the lines that the proposed development would tidy-up this remaining piece of the Beaumont Quarter „jigsaw puzzle‟. There was a brief discussion about the transformer on Lot 11, which as it turns out is in the wrong location. I recall from looking at the plans attached to the Development Deed, that the „as-built‟ accessway and the easement were not aligned. While we did not specifically
address the point, I inferred from the conversation that Nigel‟s intended „completion‟ of the Lot 11 development covered all such matters.
[43] Mr Arthur also contends that an intention to create binding legal rights is demonstrated by the conduct of Melview and Beaumont including:
(a) Beaumont‟s commitment to construct the roadway as a precondition for further consents.
(b)All subsequent proposals for the development of lot 11 have recognised the actual location of the roadway and footpath.
(c) The registered land covenant giving effect to the Development Deed – and specifically attaching the proposed development of the site with the as built easement retained, with owner approval also required for any departure from the plans.
[44] With respect to Mr Arthur‟s careful argument, I am doubtful that the material assembled provides a sound basis for establishing the requisite agreement to vary or create a new easement. There is no evidence of a clear statement made by Melview or Beaumont Trustee that the easement will be realigned to fit the as built condition. At most it is inferred from their conduct and then drawn from the Development Deed. But the Development Deed stops short of making a commitment to vary the registered easement. The Deed records a commitment to seek owner approval if the developer intends to depart from the attached plan. This, in my view, defines the “agreement” reached. If the parties to the Deed intended to go further, and grant a variation to the easement, then they could have expressed that intention in equally clear terms. That is particularly relevant given that IBL, as the new owner of the freehold succeeded to the rights under the Development Deed, and sought and obtained a variation to the Deed at the time of IBL‟s acquisition of the freehold. While it may have assumed that the access way would be retained, and an appropriate easement granted at some time, it did not take the step of entrenching that assumption in the Development Deed, as it could have done.
[45] Nor am I prepared on the limited material before me to imply such a term into the Deed. It is not commercially necessary to do so. It was already established. No condition of consent required it. Moreover, it seems to me that the flexibility contemplated by clause 3 of the Deed, insofar as it contemplates a variation to the plans, runs counter to an implied term that would fix in stone the future shape of the development by way of a variation to the registered easement.
[46] Having said all of that, as I have said, I am prepared to proceed on the basis that IBL has at least a seriously arguable case for a caveatable interest, based on the combination of elements identified by Mr Arthur. I am also conscious that with more time, further information might be produced to show that an agreement was reached to vary the registered easement. Accordingly, I turn to the assessment of whether SFL consented to that interest.
Consent?
[47] Mr Arthur develops his position by contending that SFL must have known about the Melview and Beaumont Trustee‟s intentions, having taken such an active role in the project.
[48] More specifically he points to the fact that: (a) SFL was a major financier;
(b)SFL was aware and advised others of the consents and certificates that followed confirmation of the location of the roadway;
(c) SFL demanded that the development be completed strictly in accordance with the conditions of consent, including the location of the access way;
(d) SFL bonded the roadway – so it must have approved its location; (e) SFL benefited from the speedy release of the s 224 titles;
(f) SFL consented to the registration of the Development Deed; and
(g) SFL has known at all times the roadway is a permanent structure.
[49] As I stated in my summary of facts, SFL plainly had an active role in the development of the site. I am prepared to infer that it knew, or was aware of the plans to build the access way in its current location. That suited its commercial ends. I also consider that by executing a variation to the Development Deed, it consented to the land covenant and its terms. But I am not satisfied that this establishes even a reasonable argument that SFL gave its consent, in terms of s 105, to grant a fresh easement in respect of the road for the following reasons.
[50] First, given the underlying purpose of s 105, any agreement or consent to vary a registered instrument must be clearly given and be clear on its terms. It is not clearly given. There is no express statement either recording an agreement to vary the easement or that SFL consents to it. This was, reasonably in my view, conceded by Mr Arthur (though he made the point that IBL has been constrained by lack of time to prepare and without full discovery. I will come back to the significance of this later).
[51] Second, while consent may be inferred by a combination of actions, those actions must also evince a clear intention to be bound. Knowledge of the location of the access way is not sufficient. SFL‟s knowledge and therefore intentions can be readily explained as knowledge of a temporary measure, while Melview assessed the final options for development. Indeed, developers are notorious for wanting to maintain design flexibility to the last possible moment so as to ensure the maximum return on the final product. There was clearly evidence produced showing that Melview wanted to maintain such flexibility. In those circumstances, I do not consider it is reasonably arguable that SFL intended by its conduct to be bound to a variation to the registered easement. Even if Melview intended to do so, as I have assumed, there is not sufficient probative evidence that SFL was aware of or consented to such a commitment.
[52] Third, SFL‟s directive to Melview to ensure compliance with consent conditions is readily explicable as commercial common sense, rather than consent to alter its underlying legal entitlement. It needs to be remembered that a resource consent is enabling or permissive of development. A consent by itself does not constrain the owner of land to the form of development of the land described in the consent. Obviously, a consent must be exercised consistently with its conditions. But consents may be varied or replaced altogether and without having any effect on the underlying property rights. A directive to comply with a consent condition so titles can be released is not therefore a commitment to a particular outcome that requires adjustment to the property rights. Accordingly, it is not in my view reasonable to infer from SFL‟s concern about compliance that it intended to affect its underlying legal entitlements. It is certainly well short of evidence of direct consent to that realignment.
[53] Fourth, the best evidence (in all senses) of SFL‟s intentions is the Development Deed. It can be reasonably inferred that SFL accepted, through its endorsement of the Development Deed, that the developer of lot 11 would seek approval of IBL (and other owners) before departing from the description of the development set out in the plans attached to the Development Deed. But it is not then reasonable to infer that SFL bound itself to a variation to the easement. Naturally if the development proceeds in accordance with the Development Deed plans, SFL would be bound by the covenant to enable that to be completed. This would inevitably lead to an easement reflecting the “as built” condition. But until it is implemented, the Development Deed contemplates the potential for change and a process for dealing with that. That is the extent to which it can be reasonably said that SFL consented to alter its rights.
[54] Fifth, IBL in essence is relying on a course of conduct, namely ongoing involvement, oversight and approval of various development plans. But in reality, that course of conduct reflects simply commercial pragmaticism. It does not evince an intention to alter SFL‟s legal rights to priority in any respect, except as I have said, in terms of the land covenant.
[55] Finally, stepping back from the finer grain, caution must be exercised when seeking to infer consent in a mobile context such as the present. The vagaries of property development, and included within that resource consenting processes, are such that mortgagees ought to be able to rely on the protection afforded by s 105 unless they overtly consent to a change to their priority. In my view, it would be quite dangerous to assume that mortgagee approval to a resource consent (which may or may not be implemented) is tantamount to a s 105 consent. While I can fully appreciate the frustration of IBL, whose expectations may not be realised, indefeasibility of title and the priority afforded by s 105 must be respected, unless there are clear cases where the mortgagee has consented to alter its strict legal right to priority. This is not such a case.
Prejudice
[56] Given where I have got to it is not necessary for me to comment on arguments about prejudice. What I will say is that IBL is not without a potential remedy. As Ms Grant, for SFL, concedes, IBL may still seek relief under the Property Law Act 2007. It may also seek to challenge any variation to the resource consent. I appreciate that there may be issues relating to notification. But given the wider context, it might be said to be surprising if directly affected landowners are not given the opportunity to submit on a variation.
[57] Finally, I express the tentative view that the land covenant itself, when read within the wider factual matrix put to me by Mr Arthur, might enable IBL to reasonably object to a variation of the development plans. It is not for me to express the final view on any of these matters, but it cannot be said IBL is without an alternative potential remedy.
Lack of information
[58] I acknowledge that IBL has been somewhat hamstrung by both the limits of time and access to information. The ability to ameliorate that is limited. I can only reasonably proceed on the evidence before me and counsel are to be commended for assembling what they have, at such short notice. I would observe however, that
given the very clear guidance afforded by the Supreme Court in Cashmere, a respondent without a written agreement to vary indefeasible rights must start from the back foot. There is, in those circumstances, very little against which to attach mortgagee consent. I also record for completeness that I am not satisfied on the material before me that discovery or interrogation of witnesses for SFL would have been productive on the consent issue.
[59] As a final point, and without meaning any criticism to counsel or the helpful evidence of Mr Maier, in cases involving multiple consents for large projects, it would be wise to retain the services of an experienced planner with the requisite expertise to assemble the relevant consents and attached plans. That would have saved considerable time and would have been of significant assistance to me.
Orders
[60] Accordingly, I grant the application to remove the caveat upon presentation of the memorandum of transfer by SFL for registration.
Costs
[61] I award costs on a 2B basis, together with disbursements to be fixed by the
Registrar to SFL. I certify for second counsel.
Whata J
ANNEXURE ‘A’
0