KOKO RIDGE LTD [2023] NZHC 1187

KOKO RIDGE LTD [2023] NZHC 1187 [18 May 2023]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECIV-2023-425-24[2023] NZHC 1187In the matter of Part 19 of the High Court Rules 2016 andss 316-317 of the Property Law Act 2007AndIn the matter of anapplication byKoko Ridge LimitedHearing: On the papersJudgment: 18 May 2023JUDGMENT OF HARLAND JIntroduction[1] The applicant, Koko Ridge Ltd (Koko Ridge), seeks to bring a without noticeoriginating application for orders under ss 316 and 317 of the Property Law Act 2007(PLA) removing several easements and covenants from land which is to be vested inthe Queenstown Lakes District Council (the Council) as a public road for asubdivision.Background[2] Koko Ridge is undertaking a two-stage residential subdivision of land inQueenstown. It is the registered proprietor of the land contained within RT 522182,described as Lot 1 DP 431492 (East title), and RT 103217, described as Lot 2 DP325561 (West title). The land contained in the titles abut one another.[3] The subdivision has made considerable progress. Consents have been granted,physical works have largely been completed including installation of services andsome roading, and several lots have been pre-sold with some owners beginningconstruction of residences.[4] A portion of the land will dedicate or vest in the Council as a public road; theeastern portion to be named Kahiwi Drive and the western portion to be named MiroPlace.[5] The land is, however, subject to several easements and covenants addressingmatters such as water, reverse sensitivity in respect of the airport and parameters forcertain construction.[6] Section 238 of the Resource Management Act 1991 (RMA) provides:238 Vesting of roads(1) When the Registrar-General of Land deposits a survey plan, or a ChiefSurveyor approves a survey plan to which section 228 applies, the landshown on the survey plan as road to be vested in a local authority or theCrown vests, free from all interests in land including any encumbrances(without the necessity of any instrument of release or discharge orotherwise),—(a) in the case of a regional road, in the territorial authority or regionalcouncil, as the case may be:(b) in the case of a Government road declared as such under any Act, inthe Crown:(c) in the case of a State highway, in the Crown or the territorialauthority, as the case may be:(d) in the case of any other road, in the territorial authority.[7] Section 239(1) of the RMA provides:239 Vesting of reserves or other land(1) When the Registrar-General of Land deposits a survey plan, or a ChiefSurveyor approves a survey plan to which section 228 applies,—(a) any land shown on the survey plan as reserve to be vested in theterritorial authority or the Crown, vests in the territorial authorityor the Crown, as the case may be, free from all interests in land,including any encumbrances (without the necessity of anyinstrument of release or discharge or otherwise) for the purposesshown on the survey plan, and subject to the Reserves Act 1977;and(b) any land shown on the survey plan as land to be vested in theterritorial authority or in the Crown in lieu of reserves, shall vestin the territorial authority or in the Crown, as the case may be, freefrom all interests in land, including any encumbrances (without thenecessity of an instrument of release or discharge or otherwise); an(c) any land or any part of the bed of a river (not being part of thecoastal marine area) or lake, shown on the survey plan as land tobe vested in the territorial authority or the Crown, shall vest in theterritorial authority or the Crown, as the case may be, free from allinterests in land, including any encumbrances (without thenecessity of an instrument of release or discharge or otherwise);and(d) to avoid doubt, any land shown on the survey plan as land in thecoastal marine area becomes part of the marine and coastal area.[8] But, s 224(b)(i) of the RMA states:224 Restrictions upon deposit of survey planNo survey plan shall be deposited for the purposes of section 11(1)(a)(i)or (iii) unless—(b) where land shown on the survey plan will vest in the Crown or aterritorial authority, there is endorsed on the survey plan ordeposited with the Registrar-General of Land, written consent tothe subdivision given by—(i) in the case of land subject to the Land Transfer Act 2017,every registered owner of an interest, including anyencumbrance, in the land; [9] As a consequence of s 224(b)(i), Land Information New Zealand (LINZ) hasdecided it will not allow parts of the affected land to vest in council or the Crown asroads or reserves until the covenants and easements are removed insofar as they relateto the land intended for the public road.[10] Koko Ridge became aware of this position in May 2022, after significant workhad already been completed. It seeks without notice orders to remove the covenantsand easements from the affected land to avoid the need for the registered proprietorsof the dominant land to consent to their surrender for the relevant land. While effortshave been made under s 115 of the Land Transfer Act 2017 to extinguish the relevantparts of the easements, this process has not progressed materially and is unhelpful inrespect of the covenants.Leave to commence proceeding by way of originating application[11] This is not a proceeding which may, as of right, be brought as an originatingapplication under rr 19.2 to 19.4 of the High Court Rules 2016. There is jurisdictionunder r 19.5 for the Court to grant leave for the proceeding to be brought as anoriginating application where to do so is in the interests of justice. The originatingapplication process is commonly used for these applications.1[12] I am satisfied it is appropriate to grant leave. This judgment sets out thereasons for my decision.[13] Leave is granted.Without notice[14] Rule 7.23 of the High Court Rules provides:7.23 Application without notice(2) An application without notice may be made only—(a) on 1 or more of the following grounds:(i) that requiring the applicant to proceed on notice wouldcause undue delay or prejudice to the applicant:(ii) that the application affects only the applicant:(iii) that the application relates to a routine matter:(iv) that an enactment expressly permits the application to bemade without serving notice of the application:(v) that the interests of justice require the application to bedetermined without serving notice of the application; and1 Re Avlis Ltd [2022] NZHC 1157 at [13], citing Re Marriner Property Ltd [2020] NZHC 1747 at[31]; and Wang v Auckland Council [2021] NZHC 499 at [8]; Taurikura Holdings Ltd v TaurangaCity Council [2022] NZHC 994; and Land Depot Ltd v Friese [2020] NZHC 1085.(b) if the applicant has made all reasonable inquiries and taken allreasonable steps to ensure that the application and supportingdocuments contain all material that is relevant to the application,including any defence that might be relied on by any other partyand any facts that would support the position of any other party.[15] Koko Ridge has provided evidence indicating that there are several hundredregistered titles, not within the titles owned by Koko Ridge, in respect of the covenantsand easements relevant to the application. Providing notice to all owners of landrelevant to the instruments at issue would be difficult and time consuming, causingundue delay and prejudice to Koko Ridge.[16] The material provided to the Court by Koko Ridge satisfies me that subs (b),requiring all reasonable inquiries and steps to have been made and taken to ensure theCourt has all the necessary and relevant information before it, is satisfied. Theaffidavit of Timothy Allan (accompanied by extensive exhibits) sets out the relevanttitles as well as the relevant easements and covenants, both to the extent they burdenKoko Ridge's land and how they extend to other titles in the area. The affidavitexplains the history of each easement and covenant as well as its relevance to the roadto be vested in the Council and the lack of effect of extinguishment on parties carryingthe benefit of the covenants and easements.[17] Given the stage of development Koko Ridge's subdivision is at, the relativelylate notice Koko Ridge had of the issue at hand, and for reasons that follow concerningthe limited effect of dealing with the relevant covenants and easements, I am satisfiedit is appropriate to allow this application to proceed on a without notice basis.[18] Pursuant to s 316(3) of the PLA, an application for orders under s 317 must beserved on the territorial authority unless the Court directs otherwise on an applicationfor that purpose. Koko Ridge has placed before the Court correspondence between itand the Council which confirms the Council does not oppose the application and doesnot wish to be heard in respect of it.Analysis317 Court may modify or extinguish easement or covenant(1) On an application (made and served in accordance with section 316) foran order under this section, a court may, by order, modify or extinguish(wholly or in part) the easement or covenant to which the applicationrelates (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 orany 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(d) the proposed modification or extinguishment will not substantiallyinjure any person entitled; or(f) in the case of a covenant, for any other reason it is just and equitableto modify or extinguish the covenant, wholly or partly.[19] I deal with each instrument in turn and outline the orders Koko Ridge seeks inrelation to it.Easement instrument 5820735.7[20] The easement, and the various areas over which it provided water conveyancerights, was originally created for the benefit of a planned rural lifestyle subdivision.[21] What eventuated was a more intensive residential subdivision known as "theShotover Country subdivision". The Shotover Country subdivision was eventuallyconnected to the Council's reticulated water supply instead of using the water systemenvisaged and to which this easement relates.[22] In regard to the West title, the areas marked "F", "I", and "IA" on DP 325561,subject to the easement, no longer convey potable water. The pipework has beendecommissioned and is redundant. Rights in respect of the easements for these areashave been surrendered by adjoining owners, and the Council has indicated the rightsare to be cancelled. The areas marked "FA" and "H" are connected to the Councilwatermain and continue to be used to carry water. Responsibly, Koko Ridge onlyseeks extinguishment of the easement in respect of areas "F", "I", and "IA".[23] In respect of the East title, Koko Ridge seeks a full extinguishment of theeasement. The parts of the easement are similarly redundant, not in use, and have hadrights surrendered and earmarked for cancellation. That right of way marked "LD" onDP 325561, created by the easement, only benefits the West title owned by KokoRidge, which consents to its extinguishment[24] The easement is registered, on the information provided by Koko Ridge, overjust under 600 titles, most of which are part of the Shotover Country subdivision.Requiring any kind of consent process would be arduous.[25] The Shotover Country subdivision, and its connection to the Council'sreticulated water supply, has rendered this easement largely redundant. It follows Iam satisfied extinguishing it in the manner sought by Koko Ridge will notsubstantially injure any entitled person and is in the interests of justice.Easement instrument 8410792.5[26] This easement pertains to the East title. It provides for a right to convey waterover the area marked "E" and a right to store and convey water over the area marked"F" (DP 384954 / DP 431492).[27] The benefitted land, comprising around 60 registered titles, has alsosubstantially become part of the Shotover Country subdivision. The easement rightsare presently redundant for the same reasons as are outlined in relation to instrument5820735.7. No water is being stored or conveyed, and the associated system has beendecommissioned.[28] I am satisfied the extinguishment of the easement from the East title, as soughtby Koko Ridge, is appropriate.Easement instrument 8678414.5[29] This easement provides for the same rights as easement 8410792.5 and is alsoregistered over the East title. For the same reasons outlined above, I am satisfied it isappropriate to extinguish the easement in respect of the East title.Land covenant in deed 834400.3[30] This land covenant burdens both the East and West titles.[31] The covenant relates to a water scheme whereby water was drawn from aprivate bore on the north side of State Highway 6. The bore is decommissioned andno water is conveyed within the original scheme's pipework as it relates to the road todedicate or vest in the Council.[32] Koko Ridge seeks extinguishment of the covenant over the land in the titlesinsofar as that land will dedicate or vest in the Council as a road.[33] The covenant is no longer of any practical effect in respect of the road and willnot adversely affect the rights of anyone benefitting from the covenant as a result.[34] Clause 12 of the covenant provides that a registered proprietor will only beliable in respect of the covenant if they erect a residence or other building on the landand connect it to the water supply scheme. As this will not apply to the land to dedicateor vest as road, the covenant is redundant to that extent.[35] This covenant also relates to several hundred properties, largely within theShotover Country Subdivision.[36] I am satisfied that the orders sought by Koko Ridge are appropriate.Land covenants in deeds 838259.3, 850246.4 and 850246.7[37] These covenants relate to the water scheme created by deed 834400.3 andprovide an entitlement to a limited domestic water supply as well as indemnityobligations in respect of the scheme created by deed 834400.3.[38] For the same reasons as relate to deed 834400.3, I am satisfied it is appropriateto extinguish the deeds from the land contained in East and West titles insofar as thatland will dedicate or vest in the Council as a road. The road will not be drawing adomestic water supply.[39] The deeds are also registered over a large number of titles.Land covenant in deed 5226852.1 (Airport covenant)[40] This covenant concerns the Queenstown International Airport and operates forthe benefit of Queenstown Airport Corporation Ltd. The covenant is intended toprovide protection to the airport from reverse sensitivity. In short, it provides that theowners of burdened land "occupy and use the buildings upon the land" at their ownrisk with respect to disturbance related to the airport, they cannot interfere with orcomplain about the airport's activities and may not bring actions against the airport forany activities of the airport, such as claiming damages or nuisance. The covenantapplies to the land contained in both titles.[41] Koko Ridge seeks extinguishment of the covenant over the land in the titlesinsofar as that land will dedicate or vest in the Council as a road.[42] There will be no buildings for occupation on the road. Further, the Council asowner of the road will have no role in supporting or opposing airport activities outsideof exercising its legislative functions. Queenstown Airport Corporation Ltd hasconsented, through its solicitors, to the removal of the covenant in respect of the landto become road owned by the Council.[43] I am satisfied this covenant has no practical effect in respect of the road andextinguishing it is appropriate.Land covenant in easement instrument 5907860.3[44] The covenant concerns the "Ladies Mile Development", a subdivisionintended to include the land at issue. The development did not progress to that stageand was overtaken by the Shotover Country subdivision. The covenant therefore hasa broad geographical application extending substantially beyond the borders of theland at issue and encompassing much of the Shotover Country subdivision, meaningit also relates to a high number of registered titles. The covenant sets out requirementsas to the construction of dwellings in terms of materials used, colours, times ofconstruction, heights, and other related matters. It also sets parameters in respect ofcontrolling vegetation and animals as well as the creation of a "residents society".[45] I agree with counsel's submissions that this covenant does not sensibly applyto areas that are destined to become public road given the lack of dwelling constructionon such areas and as the Council will no doubt manage any vegetation and animalissues as they normally would in respect of public roading. Further, granting the orderssought will not prevent the covenant from continuing to apply to the residential lots.Summary[46] I am satisfied the orders sought by Koko Ridge are appropriate pursuant to s317(1) of the PLA.Orders[47] In light of the above findings, orders are made as follows:(a) Leave is granted for this application to be brought by way of originatingapplication.(b) The application is properly made without notice and service is notrequired.(c) Deeds 834400.3, 838259.3, 850246.4, 850246.7, and 5226852.1,containing land covenants, shall be extinguished from any land containedwithin Records of Title 103217 and 522182 (Otago Registry) (includingany record or records of title subsequently issuing therefrom) where thatland is to, upon deposit in accordance with a survey plan, transfer/dedicateor vest as road to be owned by the Queenstown Lakes District Council.(d) Easement instrument 5907860.3 shall be extinguished from any landcontained within Records of Title 103217 and 522182 (Otago Registry)(including any record or records of title subsequently issuing therefrom)where that land is to, upon deposit in accordance with a survey plan,transfer/dedicate or vest as road to be owned by the Queenstown LakesDistrict Council.(e) Easement instruments 8410792.5 and 8678414.5 shall be extinguishedfrom Record of Title 522182 (Otago Registry).(f) Easement instrument 5820735.7 shall be extinguished from Record ofTitle 103217 (Otago Registry) insofar as it relates to areas "F", "I", and"IA" on DP 325561.(g) Easement instrument 5820735.7 shall be extinguished from Record ofTitle 522182 (Otago Registry).(h) Leave is granted to apply for a variation of these orders should any issuearise as to their implementation.____________________Harland JSolicitors:Rhodes & Co., Queenstown.