Western Avenue Properties Limited v Western Bay of Plenty District Council

[2023] NZHC 1570

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2022-470-143

[2023] NZHC 1570

IN THE MATTER

of an application under s 317 of the Property Law Act 2007 to modify Easement 10879715.8

BETWEEN

WESTERN AVENUE PROPERTIES LIMITED and MCA 29 LTD

Applicants

AND

WESTERN BAY OF PLENTY DISTRICT COUNCIL

First Respondent

Hearing:

On the papers

Counsel:

T Conder for the Applicants

K M Stubbing for First Respondent

Judgment:

22 June 2023

JUDGMENT OF HARVEY J

This judgment was delivered by me on 22 June 2023 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Date: …………………..

(Deputy) Registrar

Solicitors:           Holland Beckett, Tauranga

Cooney Lees Morgan, Tauranga

WESTERN AVENUE PROPERTIES LTD and MCA 29 LTD v WESTERN BAY OF PLENTY DISTRICT COUNCIL [2023] NZHC 1570 [22 June 2023]

Introduction

[1]MCA 29 Limited (MCA) seeks orders that:

(a)the present application proceed by way of originating application; and

(b)the right of way easement contained in Instrument 10879715.8 is modified by removing the entire right of way area “A” on DP 509184 and recreating the right of way over area “C” on New Plan LT 557097.

[2]                 The applicant requests that any judgment of this Court confirms that the affected parties have been served so that they need not be served again before registration.

[3]The issue for determination is whether the application should be granted.

Background

[4]                 The originating application dated 8 November 2022 sought the now requested modification of easement. In support is an affidavit of Edward Pendergast affirmed on 27 October 2022 (filed 10 November 2022).

[5]                 On 7 February 2023, Associate Judge Sussock gave directions requiring that the Western Bay of Plenty District Council (the Council) and seven local property owners – the benefitting owners – be served. The Council filed its notice of intention to appear on 23 May 2023 confirming its support for the application. This was followed by an affidavit from a Ms Wilson affirmed on 6 June 2023, confirming service on three parties. Soon after, on 8 June 2023, Mr Pendergast affirmed an affidavit confirming that service on a further four parties had occurred. Both these affidavits were filed with the Court on 13 June 2023.

[6]                 Following that, this Court issued a minute on 20 June 2023 directing submissions for the matter to be dealt with on the papers. To avoid doubt, Mr Conder confirmed that there had been no opposition filed to the application to date.

[7]Ms Stubbing for the Council filed a brief submission in support on 21 June.

Applicant’s submissions

[8]                 Mr Conder submitted that MCA owns a property at Ōmokoroa. It is part of a residential subdivision undertaken by Western Avenue Properties Ltd. On a temporary basis a right of way across the property allowed access for neighbouring properties to Ōmokoroa Road. It was contained in easement 10879715.8.

[9]                 According to counsel, the neighbouring properties now have road access which means the right of way is redundant. Mr Conder contended that due to a drafting error, the easement cannot be reduced by operation of law. Until it is removed, MCA cannot build on the property. Attempts to achieve this outcome by consent were unsuccessful. Mr Conder highlighted that the principal party who had refused to consent now agrees. The short point is that no party opposes the application.

[10]             Counsel submitted that s 317 of the Property Law Act 2007 empowers this Court to extinguish or modify a covenant. Counsel cited Sutherland v MacAlister in support.1 The Court, according to Mr Conder, has the jurisdiction to determine the application.

[11]             On the issue of leave to commence by originating application, counsel contended that under r 19.5, the Court can allow a proceeding to commence as an originating application where it is in the interest of justice. Counsel cited Solarbright Ltd v Martin in support.2 Mr Conder argued that such an approach would not be appropriate for cases that require particular pleadings or interlocutory processes including discovery or those that involve significantly contested facts. It is, however, appropriate where the Court can determine a straight-forward matter.

[12]             Here, counsel submitted that the originating application approach is appropriate because first, pleadings are not required. The grounds for the application are clear. No detailed factual findings are necessary to require the statutory test in this case regarding the easement. Secondly, interlocutory processes are unnecessary – more so given that there is no opposition. Thirdly, the case concerns the determination

1      Sutherland v McAlister (2010) 11 NZCPR 732 (HC).

2      Solarbright Ltd v Martin [2019] NZHC 300 at [18] and [26].

of a statutory test. Fourthly, as foreshadowed, the application is unopposed and a determination of contested facts is unnecessary. Counsel then cited a number of cases where this overall approach had been followed relating to changes to covenants.3

[13]             Overall, and consistent with r 1.2, Mr Conder argued that the originating application procedure is appropriate to achieve the speedy, just and inexpensive determination of the application.

[14]             Turning to the substantive application, counsel cited the Supreme Court’s decision Synlait Milk Ltd v New Zealand Industrial Pipe Ltd in support of the argument that, if the Court finds that one of the six stated grounds is satisfied, it will have found that the easement or covenant should be modified or extinguished, wholly or in part. Any determination on whether the discretion should be exercised must have regard to all relevant factors and, where appropriate, whether compensation is payable. Equally importantly, the Supreme Court underscored that given the broad range of circumstances where s 317 may apply, the potential range of relevant matters to take account of should not be confined.

[15]             Invariably, Mr Conder submitted that each case turns on its own facts. Even so, Synlait confirms that the second stage inquiry will involve a careful balancing of policy considerations, along with the importance of property rights, the sanctity of contract and the notion of fairness.

[16]             Counsel contended that while the Court has adopted a conservative approach to easement modification, in this case the point of difference is that the easement was always intended to come to an end. There can therefore be no prejudice to any party from the loss of rights that were never intended to continue. Therefore, the usual balance does not apply, according to Mr Conder. The easement was part of a subdivision process and an interim measure only.

[17]             Counsel highlighted that the relevant change of circumstances rendered access across the easement unnecessary – the Council’s structure plan became operative.

3      Fair v Fair [2019] NZHC 2349, (2019) 20 NZCPR 652; Land Depot Ltd v Friese [2020] NZHC 1085; Re Marriner Property Ltd [2020] NZHC 1747; Wang v Auckland Council [2021] NZHC 499; and Taurikura Holdings Ltd v Tauranga City Council [2022] NZHC 994.

Equally importantly, all parties directly affected by any change have either consented to it or, having been served, have not participated. It is not unreasonable for the Court to assume that none of the unengaged parties have a strong objection to the proposal.

[18]             As to the discretion, Mr Conder argued that the facts warrant the exercise of that discretion in the applicant’s favour. It also will enable a dwelling to be built on the property, a factor strongly in the public interest. Alternatively, if the change is refused then the landowner is left with a property that cannot be developed and a technical breach of the relevant consent. From all of these reasons, counsel submitted that the application should be granted.

First respondent’s submissions

[19]             Ms Stubbing submitted that, in summary, the Council supports the application and agrees with the orders sought by the applicant. Unless the Court required further detailed submissions, the Council was content to simply endorse the position of the applicant.

Legal framework

[20]Section 317 of the Property Law Act 2007 provides:

317     Court may modify or extinguish easement or covenant

(1)On an application (made and served in accordance with section 316) for an order under this section, a court may, by order, modify or extinguish (wholly or in part) the easement or covenant to which the application relates (the easement or covenant) if satisfied that—

(a)the easement or covenant ought to be modified or extinguished (wholly or in part) because of a change since its creation in all or any of the following:

(i)the nature or extent of the use being made of the benefited land, the burdened land, or both:

(ii)the character of the neighbourhood:

(ii)any other circumstance the court considers relevant; or

(b)the continuation in force of the easement or covenant in its 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 easement or covenant at the time of its creation; or

(c)every person entitled who is of full age and capacity—

(i)has agreed that the easement or covenant should be modified or extinguished (wholly or in part); or

(ii)may reasonably be considered, by his or her or its acts or omissions, to have abandoned, or waived the right to, the easement or covenant, wholly or in part; or

(d)the proposed modification or extinguishment will not substantially injure any person entitled; or

(e)in the case of a covenant, the covenant is contrary to public policy or to any enactment or rule of law; or

(f)in the case of a covenant, for any other reason it is just and equitable to modify or extinguish the covenant, wholly or partly.

(2)An order under this section modifying or extinguishing the easement or covenant may require any person who made an application for the order to pay to any person specified in the order reasonable compensation as determined by the court.

Discussion

[21]             Mr Conder’s submissions are compelling. The easement was in its current form was always intended to be temporary. There has now been a relevant change in circumstances. The modification as sought is accordingly appropriate.

[22]             There is no opposition to the application. The Council supports it. Some of the parties have consented to the change. The remainder who have been served have decided not to engage. It is not unreasonable to assume therefore that they do not oppose the application. In any case, I do not see, if they had opposed the application, what prejudice they will suffer if it is granted.

[23]             I am satisfied that the originating application approach is appropriate and that the orders set out in the application should be granted.

Decision

[24]The applications are granted.

[25]             For clarity and ease of registration I confirm that the affected parties have been served with the easement modification application.

Harvey J