SABATIER & ANOR v ADDISON DEVELOPMENTS LIMITED [2016] NZHC 575

SABATIER & ANOR v ADDISON DEVELOPMENTS LIMITED [2016] NZHC 575 [6 April 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2015-404-001789[2016] NZHC 575BETWEEN JEAN-MARIE PIERRE FRANCOISSABATIER AND IAN FRANCISKNOBLOCH (AS TRUSTEES OF THESABATIER FAMILY TRUST)PlaintiffsAND ADDISON DEVELOPMENTS LIMITEDDefendantHearing: (On the papers)Counsel: Leslie Divers for the PlaintiffsMichael Arthur and Natasha Kusel for the DefendantJudgment: 6 April 2016JUDGMENT OF MOORE JThis judgment was delivered by me on 6 April 2016 at 2:00 pmpursuant to Rule 11.5 of the High Court Rules.Registrar/ Deputy RegistrarDate:Introduction[1] The plaintiffs seek to extinguish a restrictive covenant registered on the title to a parcel of land they own in Takanini. The covenant prevents the land being used for any purpose other than the agisting, training or stabling of horses, and prevents the owners of the land from erecting more than one dwelling house on it.[2] The covenant was initially for the benefit of a large tract of surrounding land owned by the Auckland Racing Club. This land has since been sold and subdivided. The largest portion, which adjoins the plaintiffs' land, is owned by the defendant, Addison Developments Limited ("Addison"). The remainder is made up of smaller residential lots.[3] The application was made under s 316 of the Property Law Act 2007. On 14 August 2015, detailed directions as to service were made by Doogue AJ. In accordance with these directions, the plaintiffs took steps to serve Addison, along with many of the owners of the surrounding residential lots. None of the concerned parties filed a defence or opposition to the application. The plaintiffs thus sought a formal proof hearing on 9 November 2014. Addison has since filed a memorandum stating it does not oppose the granting of the application.[4] I now proceed to consider the merits of the claim on the basis of the affidavit evidence given by Ms Sabatier and Mr Knobloch, the plaintiffs.Background[5] The plaintiffs' land (identifier NA 94B/273) is a 3.3875 hectare lot located inTakanini. It is vacant and unused. The land originally formed part of the training track and stabling facilities of the Auckland Racing Club before it was separated off and sold to the plaintiffs in 1994. The following covenant appeared in the transfer:"The transferee shall:i. Not use or permit or suffer the servient land to be used other than for the purpose of agisting, training, and stabling of horses;ii. Not erect or permit or suffer to be erected on the servient land morethan one dwelling house. The term "dwellinghouse" means a building orgroup of buildings comprising a detached residential dwellinghouse designed for and exclusively for one household and being the only one onthe property."[6] The Racing Club initially retained its remaining land which it continued to use for the purposes of horse training. However, on 2 June 2004, the Racing Club sold its land to Addison. All activities and uses relating to horse racing or breeding ceased in 2005. The land was then re-zoned for residential use and subdivided by Addison. To date, 126 residential lots have been created and a number of these havebeen sold off. The process of subdivision is still continuing. Ms Sabatier's evidence is that both the plaintiffs' and Addison's land is zoned mixed housing suburban under the Proposed Auckland Unitary Plan.[7] The covenant does not appear on the title to Addison's land, however, the plaintiffs accept that this remains the dominant tenement and that the covenant ran with the land after it was sold to Addison. The distance separating the nearest part of the plaintiffs' property from any of the subdivided residential lots varies between 280and 480 metres. None of these lots is affected by the covenant.The pleadings[8] The plaintiffs seek to have the covenant extinguished. They rely on the grounds set out in s 317(a) and (b) which provide that:"(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 to which the application relates (theeasement 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 theeasement or covenant at the time of its creation."[9] The plaintiffs accept they purchased the land with full knowledge of the covenant, and that they expected the surrounding land to continue to be used for horse racing and training in the long term. However, they argue the nature and extent of the use being made of both Addison's land and their land has now changed considerably. Addison's land has not been used for horse racing or training in any capacity since 2005. Since that time, it has been residentially zoned and subdivided extensively. All the while, the plaintiffs land has largely gone unused because horse racing functions have all been moved elsewhere.[10] The plaintiffs further argue that restricting the land to horse training purposes impedes the reasonable use of their land in a different way from that which could reasonably have been foreseen by the original parties to the covenant at the time of its creation.[11] For these reasons, they argue that the covenant is now obsolete and should be extinguished.Analysis[12] I accept that there has been in a change in the terms set out in both ss 317(a)(i) and (ii). The benefited land, being Addison's land, no longer hosts any form of horse training or breeding and has not been used in this capacity since 2005. Plainly, it is now used for residential housing and will continue to be so used in the future. It follows that there has also been a fundamental shift in the character of the neighbourhood.[13] I am satisfied that the covenant ought to be extinguished, and note that Addison, unsurprisingly, does not oppose this course of action.Result[14] I order that the land covenant in transfer C612218.2 be extinguished from identifier NA 94B/273, North Auckland Land Registration District.Moore JSolicitors:Churton Hart & Divers, AucklandChapman Tripp, Auckland