Cornes v Village Residential Ltd

• Jurisdiction: New Zealand
• Judge: Dunningham J
• Judgment Date: 31 May 2021
• Neutral Citation: [2021] NZCA 216
• Court: Court of Appeal
• Docket Number: CA526/2020
• Date: 31 May 2021

Between

David Ian Cornes and Rei Kahui Jones

Appellants

and

Village Residential Limited

Respondent

[2021] NZCA 216

Court:

Clifford, Brewer and Dunningham JJ

CA526/2020

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Property — appeal against a High Court decision which held that the implied covenants under the Property Law Act 2007 relating to vehicular rights of way, allowed the respondent to upgrade a driveway — interpretation of easement — whether reference to repairs and maintenance of a driveway incorporates the right to upgrade the driveway

Counsel:

D J O'Connor and J C Heaphy for Appellant

D M Kerr for Respondent

• A The appeal is dismissed.

• B The appellants must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Dunningham J)

Introduction

1 The appellants, Mr Cornes and Ms Jones, own a property at 24 Lucknow Road in Havelock North. It comprises a large back section of over 1500 square metres including a strip of land extending to Lucknow Road which contains their driveway. Its legal description is Lot 2 Deposited Plan 8107 (Lot 2).

2 In mid-2018 the respondent, Village Residential Ltd (VRL), agreed to purchase the property at 26 Lucknow Road which sits in front of the appellants' property. VRL's property comprises a large section of just over 2000 square metres and its legal description is Lot 1 Deposited Plan 8107 (Lot 1). Although Lot 1 has frontage onto Lucknow Road it, too, uses the appellants' driveway for access pursuant to a right of way easement registered against the title when the lots were created.

3 The driveway which serves both properties was once partially or fully sealed but now consists of a combination of disintegrating seal and loose metal. It has a storm water sump located approximately halfway down it which was installed around 10 years ago. The sump is described by VRL's advisors as inadequate to manage stormwater on the shared driveway which slopes downhill towards Lucknow Road.

4 Subdivision of Lot 1 is a controlled activity under the Hastings District Plan and on 8 July 2019 the Hastings District Council (the Council) granted subdivision consent to VRL on various conditions. VRL is now in the process of subdividing Lot 1 into five lots, two of which will have access directly from Lucknow Road, while the other three will have access via the existing right of way.

5 The resource consent for subdivision of Lot 1 is conditional on the driveway being upgraded and a new drainage sump being installed within it to provide better stormwater management and reduce potential runoff. The approved plans show the driveway will be constructed of reinforced concrete with a new kerb and channel, and there will be a drainage sump installed at the lower end of the driveway close to the road. There will also be a drainage sump installed at the head of the driveway, but within VRL's land, to collect stormwater that would otherwise flow down the driveway.

6 The appellants do not want the driveway upgraded as proposed. They are content to have it maintained, but not upgraded as is required to complete the approved subdivision. The affidavit evidence indicates the appellants are concerned the development of Lot 1 will erode the privacy and amenity values they currently enjoy. They are opposed to the development proceeding.

The application to the High Court

7 In the face of the appellants' strong objection to work occurring on the driveway, VRL applied for orders under s 313 of the Property Law Act 2007 (PLA) confirming it was entitled to carry out the construction on the driveway. 1

8 Section 313 of the PLA empowers the Court to make orders, on any condition it thinks fit, concerning:

• (a) the existence of an easement;

• (b) the enforceability of an easement;

• (c) the question of whether any work is required to be done under the terms of the easement, and the nature and extent of such work;

• (d) who should bear the cost of any required work;

• (e) the entry onto any land for the purpose of doing any required work and the use of vehicles or machinery on that land for the purpose of carrying out that work; and

• (f) any other matters arising in relation to a question or dispute concerning the existence or effect of an easement.

The right of way easement

9 There is no dispute that Lot 1 enjoys a right of way easement over the appellants' land created by memorandum of transfer dated 30 May 1951 and recorded on the titles as a right of way created by Transfer 98046. It covers the full width of the 5.2 metre wide strip of land that gives the appellants access to Lucknow Road.

10 The terms of the right of way easement include the following provision:

2. THE [Transferor] reserves unto himself his executors administrators and assigns a full and free right and liberty for him or them and his or their servants visitors tenants and licensees and all persons having bona fide and lawful business with him or them in common with all other persons having the like right at all times hereafter by day or night with or without horses carts or other vehicles of any description for all purposes connected with the use and enjoyment of Lot 1 on Deposited Plan Number 8107 for whatever purpose the said land may be lawfully used and enjoyed to pass and repass along that part of Lot 2 on Deposited Plan 8107 being thereon coloured yellow for the purpose of giving access to the said Lot 1 or any part or parts thereof and to and from the public road delineated on the said plan and thereon named at Lucknow Street. TO THE INTENT that such easement of right-of-way hereby created shall be forever appurtenant to the said Lot 1.

In summary, the easement permits the owner of Lot 1 to have access over the marked right of way on Lot 2, including vehicular access, “for whatever purpose [Lot 1] may be lawfully used”.

11 Clause 3(c) of the transfer records the transferor and transferee (and their successors in title) are to share equally “… the cost of maintenance and repair of the said right-of-way and of any gate and gate posts erected at the entrance of the said right-of-way”.

12 No other provision in the transfer appears relevant to the dispute which is the subject of this appeal.

13 The parties accept the easement is also subject to statutory implied covenants. Specifically, s 297 of the PLA provides that every vehicular right of way contains the implied covenants in sch 5 of the PLA, including: 2

2 Right to establish and maintain driveway

The owners and occupiers of the land for the benefit of which, and the land over which, the right of way is granted have the following rights against one another:

• (a) the right to establish a driveway on the land over which the right of way is granted, and to make necessary repairs to any existing driveway on it, and to carry out any necessary maintenance or upkeep, altering if necessary the state of that land; and

…

14 At issue is whether expressly or by implication, the terms of the easement allow VRL to upgrade the driveway as the conditions of subdivision consent require.

The High Court decision

15 Doogue J heard VRL's application on 12 August 2020 and issued her decision on 14 August 2020. 3 After setting out the facts which led VRL to make the application, the Judge summarised the respective positions of the parties. 4

16 VRL submitted that Mr Cornes and Ms Jones had an improper motive in opposing the proposed works of to the driveway, saying they were doing this merely to slow or impede the progress of the subdivision. VRL maintained it had the implied right under sch 5, cl 2(a) of the PLA to make necessary repairs to the driveway and to carry out necessary maintenance or upkeep, including altering the state of the land if necessary. This right was sufficient to allow it to carry out the proposed upgrades.

17 Mr Cornes and Ms Jones, however, submitted the terms of the easement and the implied rights under the PLA only permitted repairs and maintenance of the driveway, and not the right to upgrade it or to install a drainage sump as proposed by VRL.

18 The Judge accepted that provisions in the Land Transfer Regulations 2018 (initially relied on by VRL and which expressly permitted the replacement of the easement facility), did not apply because the section of the Land Transfer Act 2017 under which the Regulations were made did not have retrospective effect. 5

19 However, the Judge found the implied covenants in cl 2 of sch 5 of the PLA gave VRL the right to construct the Council approved works, and in doing so, to alter the land. Doogue J noted the existing driveway surface was deficient and needed stabilizing and permanent surfacing. 6 She accepted that this work should be constructed in accordance with current Council requirements and that it was

reasonable to allow VRL to meet these requirements in order to use its land in a lawful way by subdividing it. 7

20 Doogue J also noted the existing provision for water drainage off the driveway was inadequate, 8 and the proposed works for draining surface water off the driveway (being the kerb and channel and the new sump) were integral to supporting the new sealed driveway surface. 9 Accordingly, she confirmed VRL's entitlement to carry out the proposed upgrade of the driveway as recorded in the conditions of subdivision consent and made orders to facilitate that. 10 Those orders included formalising the offer made by VRL to meet all the implementation costs.

This appeal

21 The issues on appeal are limited. They are whether, as the appellants say, the Judge erred:

• (a) by finding that VRL had the right to “upgrade” the driveway when both the express and implied rights for such an easement only allow for repair, maintenance and upkeep of the driveway, not its upgrade; and

• (b) by effectively recognising “drainage rights”...