Spring Grove Land Limited [2016] NZHC 2109 (6 September 2016)

Last Updated: 16 September 2016

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000844 [2016] NZHC 2109

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 SPRING GROVE LAND LIMITED a Company at Christchurch for an Order extinguishing covenants

Hearing:	6 September 2016 (Determined on the papers)
Counsel:	N A Till QC for Applicant
Judgment:	6 September 2016

_{JUDGMENT OF ASSOCIATE JUDGE MATTHEWS}

[1] Spring Grove Land Limited (Spring Grove) applies by originating application, without notice, for orders directed at extinguishing certain land covenants registered over land which it owns at Belfast, and which it is in the process of subdividing into separate residential titles. Essentially, Spring Grove seeks release of the covenants from areas within the subdivision which are to vest in the Christchurch City Council (the Council) as road and reserve, and other areas which are to be transferred to Orion New Zealand Limited (Orion) for electricity reticulation purposes. It is a requirement of both the Council and Orion that when they receive title to the land in question, as they must in order for the subdivision to proceed, it is unencumbered.

[2] Evidence in support of this application has been presented by Mr I R Thompson, an experienced property consultant engaged by Spring Grove, Mr D W

Spring Grove Land Ltd application for an Order extinguishing covenants [2016] NZHC 2109 [6 September 2016]

Mawhinney, the surveyor responsible for the surveying work required for the subdivision, Mr J M van Bolderen, a consultant on complex land transactions, and Mr A P Alloo, the solicitor for Spring Grove.

[3] The evidence establishes that the two land covenants, registered in 2012, were created respectively to avoid the possibility of any business being established which might compete with a nearby meat processing works, the owner of which then owned the land in question, and to ensure that no complaints in relation to smell were received in respect of a nearby tannery from purchasers of any land in any future development. The tannery has now ceased business and the land on which it stood has been sold to another owner.

[4] The evidence also establishes that both the covenants will remain registered on all the titles to the residential allotments which are being created by the subdivision, both in Stage 1 (which is now at an advanced point) and in relation to future stages. It also establishes that removing the covenants from the land to vest in the Council and to be transferred to Orion would not adversely affect either the owners of future allotments, or the Council and Orion. The short point is that land to be used for roading and electricity reticulation, which are public amenities, does not require the benefit of the restrictive covenants in issue.

[5] The covenants could be extinguished by each owner of other allotments to which they relate signing a registerable form of surrender. Mr Alloo says that this is impractical. He cites as an example of the difficulties experienced, an attempt he made to arrange a surrender of a right to drain water, which involves the same servient tenements as are the subject of the restrictive covenants involved in this application. There were 10 parties concerned, and responses have ranged from agreement in principle through to a lack of any reply at all. Even if responses are received, in favour, formal documentation then has to be drawn and sent out for signing.

[6] Mr Alloo says the difficulties with this procedure will multiply as later stages of the subdivision come onstream. Further, the difficulties are exacerbated by

properties changing hands during the course of a mechanical process of obtaining individual surrenders.

[7] On the basis of the evidence now before the Court, I am quite satisfied of the following matters. First, it is appropriate that this application be brought by originating application. In my opinion that is the correct procedure to adopt for bringing the present issues before the Court.

[8] Secondly, I am satisfied that the application is properly made without notice. It has been sufficiently established that there is no detrimental effect on any other party and therefore I am of the view that no other party need be served with this application.

[9] Thirdly, I am satisfied that both covenants should be surrendered by order of the Court. This is the most practical and cost-effective method of so doing, and in addition brings certainty of outcome at a point when titles are close to being issued for Stage 1 of the subdivision. All lots in Stage 1 have been sold to a developer of housing packages, who has onsold the majority of them. This means that any delay in effecting surrender of these covenants has the potential to cause widespread disruption, inconvenience and cost to a significant number of parties. Conversely, there is no detriment to any party enjoying the benefit of the covenants.

[10] In the application, the first surrender sought relates to Stage 1, and specifies lots on the deposited plan from which the land covenants are to be surrendered. The second surrender sought relates to allotments which will become roads and reserves to vest in the Council, and utility sites to be transferred to Orion, which are shown on a concept plan but which are to be further defined as the plans for stages subsequent to Stage 1 are finalised. The orders sought in relation to surrender of the covenants on these later stages are therefore in more general terms, but a reservation of leave is sought to apply further following finalisation of the title plans for subsequent stages.

[11] I am satisfied that this is an appropriate way to proceed. There is no reason for the applicant to be involved in the material cost of bringing a new application in relation to each subsequent stage, at the point when the lots are defined. The

principal issue before the Court is the concept of surrendering the covenants by court order from lots which are to vest in the Council and to be transferred to Orion and on that point I am satisfied on the evidence that this should occur. I therefore reserve leave to apply by interlocutory application on the present proceeding for defined orders in relation to stages beyond Stage 1.

[12] The final order sought is a direction to the Registrar-General of Lands which is a mechanical follow-up to the surrender of the easements granted by this judgment. Again, this is an appropriate order.

Outcome

_{[13] I make orders in terms of the draft order submitted on this application.}

J G Matthews

Associate Judge

Solicitors:

Albert Alloo & Sons, Dunedin