WFH PROPERTIES LIMITED AND CHRISTCHURCH CITY COUNCIL
[2024] NZHC 2797
•27 September 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2024-409-300
[2024] NZHC 2797
UNDER the Property Law Act 2007 IN THE MATTER
of Part 19 of the High Court Rules 2016 and sections 316 and 317 of the Property Law Act 2007
AND
IN THE MATTER
of an application by WFH Properties
Limited for orders partially extinguishing an easement
BETWEEN
WFH PROPERTIES LIMITED
Applicant
AND
CHRISTCHURCH CITY COUNCIL
Respondent
Hearing: On the papers Counsel:
A K Dunbar for Applicant
Judgment:
27 September 2024
JUDGMENT OF DUNNINGHAM J
This judgment was delivered by me on 27 September 2024 at 10.15 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
WFH PROPERTIES LIMITED v CHRISTCHURCH CITY COUNCIL [2024] NZHC 2797 [27 September 2024]
Introduction
[1] This is an application brought by WFH Properties Ltd for an order partially extinguishing easements against land that it is authorised to subdivide pursuant to a resource consent granted by the Christchurch City Council.
Procedural history
[2] On 21 June 2024 Associate Judge Paulsen directed that the application may proceed as an originating application under pt 19 of the High Court Rules 2016.
[3] In a minute issued on 8 August 2024 Associate Judge Paulsen also determined that there should be a direction dispensing with further service of the application. At that point, the application had been served on the Christchurch City Council which did not oppose the application. He also noted the difficulty and expense involved in having to identify the owners of each property affected by the easements, and their mortgagees, and then arranging for service upon them, particularly when there was no practical benefit to any of these persons given the easements did not currently protect, nor were they capable in the future of protecting, any rights of the owners of those properties to create water courses.
[4] The application was then set down to be heard in a short causes list, but with the option of the Judge assigned to hearing it dealing with it on the papers. On 30 August 2024, McQueen J directed that the matter be dealt with on the papers, and I am now considering it on that basis.
The applicant
[5] The application seeks the following orders under s 317 of the Property Law Act 2007 (the Act):
(a)An order partially extinguishing the easement described as “Subject to water and other rights contained in Transfer 98091” registered against Lot 24, Deposited Plan 3217, being 6.3737 hectares contained in Record of Title CB23A/897 (Canterbury Registry) to the extent that this lot is no longer subject to the easements.
(b)An order partially extinguishing the easement described as “Appurtenant hereto are water and other rights contained in Transfer 98091” registered against Lot 24, Deposited Plan 3217, being 6.3737 hectares contained in Record of Title CB23A/897 (Canterbury Registry) to the extent that this lot is no longer benefited by the easement.
(c)An order partially extinguishing the easement described as “Subject to a water drainage easements [sic] created by Transfer 102543” registered against Lot 25, Deposited Plan 3217, being 6.4471 hectares contained in Record of Title CB10B/253 (Canterbury Registry) to the extent that this lot is no longer subject to the easement.
(d)An order partially extinguishing the easement described as “Appurtenant hereto is a water drainage easement created by Transfer 102543” registered against Lot 25, Deposited Plan 3217, being 6.4471 hectares contained in Record of Title CB10B/253 (Canterbury Registry) to the extent that this lot is no longer benefited by the easement.
Why the application is brought?
[6] The reasons for making the application and the grounds relied on in support are explained in the memorandum of counsel dated 17 June 2024.
[7] The applicant is a land development company which owns property at 250– 258 Cashmere Road, Christchurch, being Lots 24 and 25, Deposited Plan 3217 contained in Records of Title CB23A/897 and CB10B/253 respectively (the Land).
[8] The applicant has obtained a subdivision consent (RMA/2023/1256) (the Consent) authorising the applicant to undertake a subdivision creating 61 residential lots on the Land and to undertake associated works including earthworks.
[9] Condition 1.13 of the Consent requires that the Applicant “shall provide evidence to council that the existing water drainage easements (T.102543 and T.98091) have been surrendered prior to physical works commencing for Stage 3”.
[10] The Easements referred to cross the Land in an east-west alignment through the balance of Lot 300 and bisect stage three of the proposed development.
[11] Record of title CB23A/897, containing Lot 24 DP3217, records that the Land is subject to water and other rights contained in Transfer 98091. Transfer 98091 created several different rights for owners of the Lots shown in DP3217. These include:
(a)“the right to the full, free and uninterrupted flow and passage of water at all times hereafter along the watercourses (whether natural or artificial) in or upon any of the lots shewn upon the said plan … as shewn and coloured blue upon the said plan in the direction indicated on the said plan and otherwise as the same flowed and passed along the said watercourses in their natural condition or as constructed or improved prior to the Eighteenth day of March One thousand nine hundred and eleven..” with a reservation to the transferors and the owners of the lots shown on DP3217 of “rights on the part of the transferors and such owners as aforesaid (whether having watercourses upon or adjoining their lands or not) to the full free and uninterrupted flow and passage of water at all times ”
(b)Owners also had rights to divert water for stock de-pasturing on the land.
(c)Owners were also required to maintain and clear the watercourses and not damage or obstruct them.
[12] Record of Title CB10B/253, containing Lot 25 DP3217 records, from 27 April 1914, that the Land was “subject to a water drainage easement created by Transfer 102543”.
[13] Counsel for the applicant advises that Transfer 102543 has been lost by LINZ and cannot be searched. However, for the reasons explained in the memorandum of counsel dated 17 June 2024, it is highly likely it contained the same or similar wording to Transfer 98091 because transfers registered over other neighbouring titles on the same plan, have the same wording as Transfer 98091.
[14] The applicants have engaged surveyors to identify what watercourses if any are situated on the land and may be protected by the easement. The result of that work is that there is no evidence that any watercourse exists in the area which is protected by the easements. Furthermore, the reference in Transfer 98091 to watercourses which exist prior to 1911 mean there can be no new watercourses created in the area.
[15] For this reason, it is considered there will be no detriment to any owners of land whose titles are also affected by the easements as there are no existing watercourses, and therefore no rights to protect.
[16] For completeness, it is also noted that there is a condition in the consent that effectively requires the applicant to ensure and satisfy the Council that existing drainage is protected and adequate stormwater outfalls provided for neighbouring Lot 23 as part of the proposed subdivision.
The legal framework for the application
[17]The application is brought pursuant to s 317 of the Act 2007 which 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:
(iii)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.
[18] In Synlait Milk Ltd v New Zealand Industrial Park Ltd, the Supreme Court observed that a two-stage approach to applications under s 317 is generally adopted:1
(a)first, whether one or more of the grounds in s 317(1) is made out; and
(b)whether the discretion to extinguish or modify the covenant and/or easement should be exercised.
Application to the present case
[19] In the present case, counsel submit that there are several grounds that apply. First, the easements sought to be partly extinguished, insofar as they affect the Land, do not serve any useful purpose as there is no evidence of any watercourse and there is no longer a right to construct or improve one. It is submitted this is a change which is a relevant circumstance for the court to take into account pursuant to s 317(1)(a)(iii).
[20] The use and zoning of the Land and the neighbourhood have changed since the easements were created, satisfying s 317(1)(a)(i) and (ii). The part of the Land that is
1 Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157 at [67].
being subdivided into residential lots is now zoned Residential New Neighbourhood, having previously been zoned Rural 2 until 2017.
[21] The continuation in force of the easements 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 easements at the time of their creation.2 The continued existence of the easement over the Land will mean the survey plan cannot be approved and the residential subdivision will not be completed. Given the age of the easements, and the previous rural zoning of the Land, it is unlikely that a residential subdivision of the type proposed would have been contemplated when the easements were created.
[22] The partial extinguishment will not substantially injure any person entitled.3 As the supporting affidavits demonstrate, a review of historical aerial images and topographical surveys indicate that no watercourse exists in the easement area and there is no longer a right to construct or improve a watercourse. Accordingly, no rights exist to be protected, and so no injury can result if the easement is removed.
[23] For all these reasons, the applicant submits that the Court should exercise its discretion to partially extinguish the easements as sought, noting that in Synlait, it was observed that a finding of fact that one or more of the statutory grounds have been made out is usually a good reason to make an order.4
[24] Finally, although transfer 102543 has been lost, I note that does not prevent an order under s 317 of the Act being made.5 Given the likelihood that this transfer, which is also described as a water drainage easement, is on materially the same terms as Transfer 98091, I am satisfied that it, too, should be extinguished insofar as it affects the land.
2 Property Law Act 2007, s 317(1)(b).
3 Section 317(1)(d).
4 Synlait Milk Ltd v New Zealand Industrial Park Ltd, above n 1, at [168].
5 Re Greenstone Land Developments Ltd [2022] NZHC 1419.
[25] For the reasons detailed above, the applicant has satisfied me that a number of the grounds for extinguishment of an easement set out in s 317 of the Act are met. The application is therefore granted on the terms sought.
Solicitors:
Mortlock McCormack Law, Christchurch