DOUGLAS V MORGAN HC HAM CIV-2012-419-1061

DOUGLAS V MORGAN HC HAM CIV-2012-419-1061

The covenants in the Transfer, read as a whole, restrict each original Meadow Park Heights allotment to one dwellinghouse and one ancillary building; subdivision of Lot 5 does not automatically breach those covenants and the subdivision works to date did not constitute a prohibited "commercial activity" under covenant 1.5; however the operation of Henry Morgan Builders from Lot 2 amounted to a commercial activity in breach of covenant 1.5 and, having failed to remedy after notice, triggered the contractual liquidated damages and indemnity provisions, entitling plaintiffs to $50,000 liquidated damages, $1,000 for the notice and an indemnity for reasonable solicitor‑client costs, and...

Citation
openlaw-05b96a7c_d75f_4767_ace2_6b6633b5f419.pdf
Parties
Plaintiffs (trustees of the Mainland Trust): Grant Frederick Douglas; Jennifer Carol Douglas; John Lindsay Millar (as trustees of the Mainland Trust); First Defendants (trustees of the Heracle Trust): Henry Joseph Morgan; Bridget Jane Morgan; Baileyingham Trustees Ltd (as trustees of the Heracle Trust); Second Defendants (trustees of the Morgan Family Trust): Henry Joseph Morgan; Bridget Jane Morgan; Baileyingham Trustees Ltd (as trustees of the Morgan Family Trust)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
18 December 2012
Procedural Posture
Declaratory Judgment (restrictive Covenants and Enforcement) / Judgment Following Hearing Under Part 18 High Court Rules
Outcome
Declaration that restrictive covenants limit each original lot to one dwellinghouse and one ancillary building; finding that second defendants breached covenant 1.5 by operating a commercial building business from Lot 2; orders for liquidated damages, costs and indemnity; scale costs against first defendants;...
Legal Topics
Interpretation of Restrictive Covenants, Commercial Activity Restriction, Subdivision, Enforcement and Remedies (liquidated Damages and Indemnity), Declaratory Relief and Costs
Property Law Restrictive Covenants Resource Management (subdivision) Trusts Civil Procedure Interpretation of Restrictive Covenants Commercial Activity Restriction Subdivision +2 more

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Parties

Grant Frederick Douglas; Jennifer Carol Douglas; John Lindsay Millar (as trustees of the Mainland Trust)

Plaintiffs (trustees of the Mainland Trust)

Henry Joseph Morgan; Bridget Jane Morgan; Baileyingham Trustees Ltd (as trustees of the Heracle Trust)

First Defendants (trustees of the Heracle Trust)

Henry Joseph Morgan; Bridget Jane Morgan; Baileyingham Trustees Ltd (as trustees of the Morgan Family Trust)

Second Defendants (trustees of the Morgan Family Trust)

Procedural Posture

Declaratory Judgment (restrictive Covenants and Enforcement) / Judgment Following Hearing Under Part 18 High Court Rules

Legal Issues

  1. 1 Whether covenants restrict number of buildings on Lot 5 to one dwellinghouse and one ancillary building
  2. 2 Whether proposed subdivision of Lot 5 is a "commercial activity" prohibited by covenant 1.5
  3. 3 Whether defendants are undertaking a "commercial activity" on Lot 2 in breach of covenant 1.5

Ratio Decidendi

The covenants in the Transfer, read as a whole, restrict each original Meadow Park Heights allotment to one dwellinghouse and one ancillary building; subdivision of Lot 5 does not automatically breach those covenants and the subdivision works to date did not constitute a prohibited "commercial activity" under covenant 1.5; however the operation of Henry Morgan Builders from Lot 2 amounted to a commercial activity in breach of covenant 1.5 and, having failed to remedy after notice, triggered the contractual liquidated damages and indemnity provisions, entitling plaintiffs to $50,000 liquidated damages, $1,000 for the notice and an indemnity for reasonable solicitor‑client costs, and...

Court Disposition

Declaration that restrictive covenants limit each original lot to one dwellinghouse and one ancillary building; finding that second defendants breached covenant 1.5 by operating a commercial building business from Lot 2; orders for liquidated damages, costs and indemnity; scale costs against first defendants;...

Orders

  • Declaration that covenants (notably clauses 1.1 and 1.9) restrict total number of buildings on Lot 5 (including any subdivision) to one dwellinghouse and one ancillary building
  • Second defendants to pay plaintiffs liquidated damages of $50,000 for breach of covenant 1.5