Sovereign Palms Limited

[2024] NZHC 535

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-115

[2024] NZHC 535

IN THE MATTER

Of Part 19 of the High Court Rules 2016 and Sections 316 and 317 Property Law Act 2007

AND

IN THE MATTER

Of an application for an order by

BETWEEN

of an application for an order by SOVEREIGN PALMS LIMITED

extinguishing land covenant in transfer instrument 35085

Applicant

Hearing:	(On the papers)
Counsel:	S A Segaran for Applicant
Judgment:	14 March 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(application for leave to utilise originating application procedure and directions as to service)

RE SOVEREIGN PALMS LIMITED [2024] NZHC 535 [14 March 2024]

[1]                 In this proceeding, Sovereign Palms Limited (SPL) seeks an order under s 317 of the Property Law Act 2007 (the Act) extinguishing an historical covenant.

[2]                 An applicant seeking orders to extinguish a covenant is not entitled to  use  the originating application procedure as of right as s 317 of the Act is not one of the of the Acts listed in r 19.2(s) of the High Court Rules 2016 (the Rules).

[3]                 Accordingly, SPL seeks leave pursuant to r 19.5 of the Rules, to use the originating application procedure.

[4]                 The matters that have engaged the Court when considering applications under r 19.5 of the Rules were summarised by the Court in Solar Bright v Martin as follows:1

(i)whether the exchange of statements of claim and defence are needed to better define the issues between the parties;

(ii)whether interlocutory procedures are needed to resolve issues such as discovery;

(iii)whether the application is straightforward, such is the application of   a statutory test, or whether  it  is  likely  to  involve  the  application  of common law principles or require expert evidence or cross-examination; and

(iv)whether the application involves multiple parties or may involve cross-claims.

[5]                 The above factors cannot be discussed in isolation from the other aspect of SPL’s application, which is an order that it need not serve its proceeding on those landowners who have the benefit of the covenant and that only the Christchurch City Council (the Council) be served.

1      Solar Bright v Martin [2019] NZHC 300 at [20]-[24].

The nature of the covenant

[6]                 The covenant is an old one having been created some 130 years ago and relates to an historic drain. Unusually, the transfer creating the covenant does not appear on the titles of the land with the benefit of the covenant. Counsel for SPL submits that in those circumstances it is unlikely the owners of titles that, at least on paper, benefit from the covenant, are even aware they enjoy that “paper right”.

[7]                 I refer to the right as being a “paper right” because the evidence is that the drain is not physically present on the land which is presently a block of rural land.

[8]                 The evidence is there is no obvious drain on the land burdened by the covenant, however, along the southern boundary of the land there is a low point that holds water in times of heavy rain. SPL believes this is the historic drain referred to in the covenant, however, any water that accumulates in the historic drain does not actually flow along a drain as such but remains stagnant until it drains naturally.

[9]                 SPL is undertaking a large subdivision in the area. In the course of planning its subdivision, SPL recognised the need to provide additional stormwater capacity. After discussions with the Council, SPL identified the burdened land as suitable for creating a modern stormwater management system that will be in the form of stormwater retention basins to be constructed on the subject land. These stormwater basins will accommodate what is presently understood to be the historic drain such that any water accumulated in the historic drain will instead drain into the stormwater basins.

[10]              The stormwater basins will ultimately vest in the Council which will be responsible for their maintenance.

[11]              Accordingly, the situation amounts to this. The 121 titles that benefit from the covenant are in all likelihood unaware the covenant exists. The drain itself does not exist albeit there is an area on the paddock that floods from time to time. The modern stormwater basins to be constructed will subsume whatever function that area of low lying land has.

[12]              In short, the function of the historical easement, or at least that of the drain to which it once related, has been overtaken by time.

[13]              I am satisfied this is a suitable application to be advanced by way of an originating application as full pleadings are not required for the matter to be considered. As I am satisfied it is not necessary to serve the application on the owners of the benefitting titles, it follows the other aspects of the Solar Bright test are satisfied.

[14]              The Council will be served and will be able to look at its interests in respect of the responsibilities SPL says the Council will take on as part of the creation of the new stormwater basins.

[15]              Accordingly, orders are made in terms of paras 1.1 and 1.3 of the application dated 6 March 2024.

[16]              Those orders may be sealed upon counsel for the applicant filing the correct certificate to be provided in relation to a without notice application. That may be provided by memorandum at the same time as orders are presented for sealing. The correct certificate can be found at the conclusion of Form G32 in sch 1 to the Rules. An Associate Judge does not have jurisdiction to deal with the substance of the application to extinguish the easement. The file will be referred to a Justice to make those orders if the Court considers them appropriate.

Associate Judge Lester

Solicitors:
Cameron & Co Lawyers, Christchurch