The Tier Woods Limited

[2024] NZHC 2130

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2024-425-66

[2024] NZHC 2130

IN THE MATTER

Part 19 High Court Rules and ss 316–317 Property Law Act 2007

BETWEEN

THE TIERS WOODS LIMITED

Applicant

Hearing:	On the papers
Appearances:	J E Bayley for Applicant
Judgment:	1 August 2024

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 1 August 2024 at 10.30 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

RE THE TIERS WOODS LIMITED [2024] NZHC 2130 [1 August 2024]

The application

[1]    The applicant, The Tiers Woods Ltd (TWL), has brought an originating application under ss 316 and 317 of the Property Law Act 2007 (PLA) for the following orders extinguishing easements and covenants on land overlooking Frankton Road in Queenstown and which is being subdivided:

(a)Easement Instrument 10097957.3 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

(b)Easement Instrument 10449745.27 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

(c)Easement Instrument 10449745.28 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

(d)Covenant Instrument 11400022.13 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

Procedural history

[2]    The application was made without notice and leave was sought for the proceedings to be brought by way of originating application.

[3]    On 18 June 2024, Harland J granted leave for the proceedings to be brought as an originating application. However, Harland J sought further information before considering the proposal to proceed without notice being served on the 53 individuals or entities who were registered proprietors of the land that was affected by the application.

[4]    In light of the further information received from the applicant and the clarification regarding the scope of the application, the Court confirmed the application could proceed without notice and I am now dealing with it on that basis.

The grounds for the application

[5]    The application is supported by affidavit evidence from Mr William Taylor, the director of the applicant company, TWL. He explains that TWL is currently undertaking   a   residential   subdivision   of   land   which    is    accessed    from 658 Frankton Road, Queenstown.

[6]    The subdivision has proceeded in  stages,  with  different  companies  that  Mr Taylor has an interest in carrying out each stage of the development.

[7]    Mr Taylor explains that the final parcel of land to be subdivided in the development being an area at the top north-east corner of the subdivision is owned by TWL. This land is contained within record of title (RT 927540) (Otago Registry) and described as Lot 5, DP (DP 545733) (Balance Land). The subdivision plan for the Balance Land will entail the creation, in stages, of 13 residential sections with the balance lot (Lot 100) to become road.

[8]    The subdivision of the Balance Land has been carried out under resource consent RM 210832, granted by the Queenstown Lakes District Council (the Council). It is a condition of the subdivision consent that the development will be undertaken in accordance with the approved subdivision plan which entails Lot 100 vesting in the Council as road. This part of the road will, in  substance, be  a continuation of  Woods Lane, which has already vested in the Council as part of an earlier stage of the development. Likewise, the primary access  road  off  Frankton  Road,  called  Potters Hill Drive, vested in the Council as part of the earlier stages of the development.

[9]    The record of title to the Balance Land is subject to various easements and land covenants. In order for Lot 100 to vest as road, s 238(1) of the RMA provides as follows:

When the Registrar-General of Land deposits a survey plan, or a Chief Surveyor approves a survey plan to which section 228 applies, the land shown on the survey plan as road to be vested in a local authority or the Crown vests, free from all interests in land including any encumbrances (without the necessity of any instrument of release or discharge or otherwise) …

[10]However, s 224(b)(i) of the RMA provides:

No survey plan shall be deposited for the purposes of s 11(1)(a)(i) or (iii) unless—

(b)where the land shown on the survey plan will vest in the Crown or a territorial authority, there is endorsed on the survey plan or deposited with the Registrar-General of Land, written consent to the subdivision given by—

(i)in the case of land subject to the Land Transfer Act 2017, every registered owner of an interest, including any encumbrance, in the land; or

…

[11]   As a result of s 224(b)(i) Land Information New Zealand will not allow subdivision plans for the Balance Land to deposit, with road to vest in the Council, until every registered proprietor of land who has a dominant interest in any easement/covenant over the relevant portion of the land gives consent, or the easement/covenant is surrendered or removed insofar as it relates to the land to vest as road.

[12]   It is for this reason that the application is brought to ensure that the relevant easements and covenants which affect the Balance Land will no longer apply to that portion of it that will vest as road.

[13]   Mr Taylor explains that in the earlier stage of this development, it was possible to obtain the written consent of each relevant owner for the purposes of s 224(b)(i), although this was a time consuming and costly exercise. However, with the subdivision having now progressed to the point where there are 37 titles over which one or more of the relevant easements/covenants are registered with 53 individuals or entities who are registered proprietors, he considers it is not practicable to obtain their consent and given the lack of detriment to the registered proprietors it is appropriate that this application is made without notice in order to remove the registered easements and covenants from Lot 100.

The easements/covenants sought to be extinguished

[14]   In terms of the easements and covenants that are sought to be extinguished, Mr Taylor explains what each easement or covenant does as follows:

Easement Instrument 10097957.3

[15]   Easement Instrument 10097957.3 creates land covenants over the Balance Land which set out parameters for the construction of the dwellings (such as building materials) landscaping, fencing and restrictions on the use of the property in the subdivision. The restrictions are typical of covenants that are customarily brought down onto lots in a residential subdivision.

[16]   TWL seeks an order that this easement instrument be removed from any land contained within the Balance Land on the grounds that:

(a)there will be no dwellings or residential fencing or landscaping on areas that are to become road and the covenant has no sensible application to what will become road;

(b)the covenant has, with the consent of all the grantees, been revoked on that portion of Woods Lane that has already vested as road;

(c)the covenant will continue to come down onto the residential lots when the Balance Land is subdivided and so the owners of the dominant land will have the ability to enforce the covenant against the owners for the time being of those residential lots, such that the position of the dominant owners will be protected.

Easement interest 10449745.27

[17]   Easement interest 10449745.27 contains five clauses which create land covenants over the Balance Land, some of which only cover part of the Balance Land.

[18]   TWL seeks an order that this easement instrument be removed from any land contained within the Balance Land to vest as road. This is on the grounds that:

(a)the covenants in cls 1 to 3 only applied until 20 February 2021 and have now expired and are redundant;

(b)the covenant in cl 4 prohibits the erection of a structure or building on Lot 15 DP 490069 that exceeds eight metres above ground level. This Lot does not comprise any of the Balance Land and so the restrictions do not apply to it;

(c)the covenant in cl 5 provides that the registered proprietor of Lot 10 DP 490069 shall not require the grantee to remove or trim any vegetation that is planted on the grantee’s land. The restriction in this covenant has no sensible application to the Balance Land to vest as road because there will be no registered proprietor of legal road to enforce the covenant against and the Council, who will be responsible for the road, will not have any interest in seeking to control the activities of neighbouring land owners. In all other respects, the covenant will continue to come down onto the residential lots when the Balance Land is subdivision.

Easement interest 10449745.28

[19] Easement interest 10449745.28 creates land covenants over the Balance Land. The covenants set out parameters for the construction of buildings (such as building materials), landscaping, fencing and restrictions of the use of the property in the subdivision. Again, the restrictions are typical of covenants that are customarily brought down onto lots in a residential subdivision. TWL seeks an order that the easement interest be removed from any land contained within the Balance Land to vest as road on the same grounds as it seeks the removal of easement interest 10097957.3 as set out at [16] above.

Covenant instrument 11400022.13

[20]   Covenant instrument 11400022.13 creates a land covenant over the Balance Land. The covenant restricts the permissible height of any “building” which includes, but is not restricted to, “dwellings, garages, carports, garden sheds and other

structures”. Mr Taylor explains, however, that the building height restriction in the covenant only relates to an area that does not comprise any of the Balance Land to vest as road. However, out of an abundance of caution he says even if it did, the covenant should be removed from any land that is to vest as road because:

(a)there will be no buildings or structures within the contemplation of the covenant on areas that are to become road and the covenant has no sensible application to a road;

(b)the covenant will continue to come down onto the residential lots when the Balance Land is subdivided and the owners of the benefitted land will have the ability to enforce the covenant against the owners for the time being of the burdened residential lots.

Legal principles applying to the application

[21]   The Court’s jurisdiction to modify or extinguish an easement or covenant is set out in s 317 of the PLA. Here, the applicant relies on:

(a)Section 317(1)(a)(iii) being that the easement or covenant ought to be modified or extinguished (wholly or in part) because of a relevant change in circumstances since its creation; and

(b)Section 317(1)(d), being that the proposed modification or extinguishment will not substantially injure any person entitled.

[22]   Having regard to the factual circumstances as outlined by Mr Taylor in his affidavit, Mr Bayley submits that the proposal to vest the land as road in order to progress  the  subdivision  is  both  a  relevant   circumstance  for  the  purposes  of   s 317(1)(a)(iii) and will mean that no owner who has the benefit of the easement or covenant will be injured by the orders being made. The fact that the land will vest as road precludes the activities governed by the easement or covenant from taking place, and the various registered proprietors will still have the benefit of the easement or covenant in respect of the newly created residential lots.

[23]   In this regard, Mr Bayley points out that there are multiple examples of applications of this nature which have been granted. For example, Re Koko Ridge Ltd;

Re GW Wilfield Ltd and Re Avlis Ltd.1

[24]   In my view, this is a case on all fours with such cases. For example, in Re GW Wilfield Ltd where an application to remove covenants from land to vest as road was brought in reliance on the same grounds, I held as follows:2

[17] The Covenants relate to the development of residential dwellings and improvements on residential lots. The Covenants have no logical application to roads or reserves that will be vested in the Crown or Council given there will be no residential occupation of these areas. Consequently … there can be no injury to owners of the benefitted land.

[25]   Here, for the same reasons, I am satisfied that the grounds in ss 317(1)(a)(iii) and 317(1)(d) of the PLA are satisfied and it is appropriate to make the orders sought.

Result

[26]   The applicant’s application for orders pursuant to ss 316 and 317 of the PLA extinguishing the identified easements and covenants, is granted on a without notice basis, as follows:

(a)Easement Instrument 10097957.3 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

(b)Easement Instrument 10449745.27 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

(c)Easement Instrument 10449745.28 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

1      Re Koko Ridge Ltd [2023] NZHC 1187; Re GW Wilfield Ltd [2023] NZHC 1071; Re GW Wilfield Ltd [2022] NZHC 3212; and Re Avlis Ltd [2022] NZHC 1440.

2      Re GW Wilfield Ltd, above n 1.

(d)Covenant Instrument 11400022.13 shall be extinguished from any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom) where that land is to, upon deposit in accordance with a survey plan, transfer/dedicate or vest as road;

(e)that the orders herein may be relied upon by any registered proprietor for the time being of any land contained within Record of Title 927540 (Otago Registry) (including any record or records of title subsequently issuing therefrom); and

(f)that leave is reserved to seek further directions or a variation of the above orders if there is any difficulty implementing the same.

Solicitors:

Rhodes & Co., Christchurch