Horncastle Homes Limited [2015] NZHC 987 (11 May 2015)

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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 HORNCASTLE HOMES LIMITED, a Company at Christchurch, for an order extinguishing easements _Applicant

Hearing:	8 May 2015 (Determined on the papers)
Counsel:	J M Moran for Applicant
_Judgment:	_{11 May 2015}

[1] The applicant (Horncastle) applies for orders extinguishing four registered easements created by transfers registered between 1876 and 1881. Each easement creates a right over parts of a parcel of land now owned by Horncastle. Horncastle is in the process of developing the land for residential use by building and transferring to the local authority a roadway, and subdividing the balance of the land. It holds the resource consents which are required for this purpose. It is not possible, however, for the road to vest in the local authority while there are easements over the area that will become the roadway, in favour of other titles. As well, Horncastle wishes to be able to sell the sections it has created without historic easements on the titles which will be issued.

[2] Horncastle seeks leave to commence this proceeding by way of originating application, and for it to be decided on a without notice basis.

[3] Section 316 of the Property Law Act 2007 provides for an application to be made to the Court for an order modifying or extinguishing an easement or a covenant. It provides that an application must be served on the Territorial Authority unless the Court otherwise directs, and must be served on any other persons and in any manner the Court directs, on an application made to the Court for that purpose. In this case, Horncastle applies for an order that the application not be served at all.

[4] The issues raised by Horncastle are suitable for determination by way of originating application, and I grant leave accordingly. I refer to the question of notice in discussion of the orders that are sought.

(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:

(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

(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.

[6] The four easements in issue were created by four memoranda of transfer which I now describe:

(a) Transfer 3253 – the easement created by this transfer was granted when land described as Paddock 10 was sold, in 1876, to Robert and John Lockhead. Adjacent to Paddock 10 was a watercourse which, at that time, evidently joined a nearby waterway known as Birdlings Brook. It granted a right to use water from the watercourse.

(b) Transfer 3254 – the easement created by this transfer was also granted in 1876. It granted an easement over Paddock 7 for one William Hill Jamieson to use water from the same watercourse. The rights created by this transfer are comparable to the rights created by Transfer 3253.

(c) Transfer 3255 – also in 1876, an easement was created by this transfer in relation to Paddock 9, which was bordered on one side by the waterway to which I have referred, and on the opposite side by the brook. This easement was granted on the sale of Paddock 9, and preferred to the grantor, as owner of Paddock 3, the right to dam Birdlings Brook and store water from the brook on Paddock 3.

6 August 1881. This easement was granted on sale of Paddock 2 which lies on the west side of Birdlings Brook. The rights created by this easement are similar to those created by Transfers 3253 and 3254, namely to use of the water in the watercourse that I have described.

[7] Evidence in support of the application is given by Mr W J Horncastle, and by

[8] According to Mr Horncastle, the first title issued for this land under the Land Transfer Act 1870, which included the land now owned by Horncastle, was Certificate of Title 1/190. In 1876 the land in this title was subdivided into

10 paddocks, described on Deposited Plan 101. These are the paddocks described in the documents to which I have referred. Both Mr Horncastle and Mr Williams

support this application on the basis that all of the easements are now, as they put it, redundant.

[9] The evidence establishes that the watercourse is no longer connected to Birdlings Brook. It ends approximately 2 to 3 metres short of the bank. It is physically impossible for water to flow from the brook into the watercourse. None of the dominant tenements has a right of access over this intervening strip of land, so owners of those tenements cannot enter the land for the purpose of carrying out earthworks to establish a flow of water into the watercourse. Further, Mr Williams, who has inspected the land on the line of the original watercourse, says that it is completely overgrown and, in effect, no longer exists. He expresses the opinion that water has not flowed along the watercourse for many decades. For these reasons, Mr Horncastle and Mr Williams say that neither the easements giving rights to access to water in the watercourse, nor the easement giving a right to dam Birdlings Brook and store water on Paddock 3 has any practical use.

[10] Horncastle owns part of the land within Paddock 3, but not all of it. The land it owns extends the full length of Paddock 3 and lies between the land it does not own, and the brook. Therefore the owners of other land in Paddock 3 cannot in fact access water from the brook, even if they were minded to attempt to store water on their land.

[11] Quite apart from these impediments to the utility of the easements, other changes to the law since the 1860s relating to the taking, storage and use of water, not to mention the building of dams, have created a very different environment for activities of the kind anticipated by the easements in question, than appears to have existed at the time they were created.

[12] I am satisfied on the evidence presented to the Court that the extent of use being made of the watercourse, and indeed of the brook itself, which led to the easements in question being created, is now materially different from the use being made of this land in the 1860s. It seems a reasonable inference that when the easements were created, the watercourse was in fact connected to Birdlings Brook. However, either that was not the case (though connection must have been

contemplated, otherwise the easements would not have been granted in the first place) or earthworks have been undertaken at some unknown point in the last 140 years or so to disconnect the waterway from the brook. This must have been at least several decades ago, going by the evidence of Mr Williams.

[13] By reference to s 317(1)(b), I am satisfied that the use of the land owned by Horncastle which is now intended is a reasonable use, and it is use in a significantly different way from the use which could reasonably have been foreseen by the parties who created the easements in question. It is a residential use, with a roadway created through it, on the outskirts of an existing township. Once completed, the land in the subdivision will blend into and become part of the township, whereas 150 years or so ago continued rural use of the land was plainly in contemplation.

[14] For these reasons, I am satisfied that the easement should be extinguished.

[15] In the material filed in support of the application, the view is expressed that some of the easements have not been recorded in memorials on some titles which have been issued after further subdivision of the land which was once in the paddocks created by the first subdivision. Horncastle expresses a concern that this may have occurred by error within the land registry and that there is a risk that at some point this error might be recognised, resulting in memorials being placed on the titles to further dominant tenements. Horncastle sought a direction that the easements not be registered against any further certificates of title, to guard against this possibility.

[16] Having formed the view, however, that there has been a change since the easements were created in the nature of the use being made of the land burdened by the easement, and in the character of the neighbourhood, and that the continuation in force of the easement would impede the reasonable use of the land burdened by the easements in a different way from that which could reasonably have been foreseen when they were created, it would, in my opinion, be preferable to extinguish the easements in their entirety. This would result in an order being made in terms different to those sought, though largely to the same effect. I defer the making of a final order until Horncastle has an opportunity to consider this, and files a

memorandum and draft order, as there may be practical implications (unknown to me) in registering an order cancelling the easements entirely.

[17] Finally, because of the circumstances to which I have referred, I see no need for this application to be served on any other party. Owners of individual allotments which were once contained in the paddocks given the benefits of the easements, cannot be affected. Some of those owners have no direct access to the edge of the previous waterway, so even if it were reinstated, no prospect of exercising their rights. Others, with immediate access, cannot draw water because the original watercourse no longer carries water and, for the reasons given, cannot become a watercourse again. Any owners of land within the area that was once Paddock 3, who might develop a wish to dam Birdlings Brook and store water on their property, cannot do so because they cannot access the brook. Nor, for that matter, would they be able to do so without surmounting the substantial regulatory challenges in their way.

[18] So far as the local authority is concerned, it has granted resource consent and requires removal of the easements from the land which is to vest as road. Its support of this application may reasonably be inferred.

[19] For these reasons I consider that this application may appropriately be dealt with without notice to any other party.

[20] The decision reached on this application accords with the tenor of the application but differs from it slightly in that if practicable the easement is to be completely extinguished, rather than extinguished only in part, and directions in relation to other titles are not being made. I therefore invite counsel to file a draft

High Court of New Zealand Decisions

Horncastle Homes Limited [2015] NZHC 987 (11 May 2015)

High Court of New Zealand

Horncastle Homes Limited [2015] NZHC 987 (11 May 2015)