Philpott and Others v Noble Investments Ltd

• Jurisdiction: New Zealand
• Judge: Winkelmann J
• Judgment Date: 30 July 2015
• Neutral Citation: [2015] NZCA 342
• Docket Number: CA274/2013
• Court: Court of Appeal
• Date: 30 July 2015

BETWEEN

Shayne Philpott, New Zealand Trustee Services Limited, Colin Peter Stokes, Fay Eunice Richardson, Burnside Trustees Limited and Gregory Robert Smith

Appellants

and

Noble Investments Limited

Respondent

[2015] NZCA 342

Court:

Ellen France P, Stevens and Winkelmann JJ

CA274/2013

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against a decision that a caveat placed on the title of the respondents land should lapse — the appellants and the respondent entered into an agreement for sale and purchase a block of rural land — the and was sold in advance of subdivision — under the agreement the respondent undertook that it would provide roading and services to the appellants' land and that it would arrange the vesting of the road in the Council — there was no express provision in the contract that easements would be granted — while it was envisaged that the road would follow a particular route, the agreement also provided that the respondent could determine an alternative route — whether the contract had granted implied easements which could be the subject of a caveat — if so, whether the easements were too ill — defined to support caveats — whether a right of way for roading was contemplated by the contract if the route of the road did not the original route contemplated — whether a condition allowing the respondent to seek lapse of the caveat if the road was vested and easements registered should not have been imposed.

Appearances:

W J Palmer and S A Brookes for Appellants

P B McMenamin for Respondent

• A The application for leave to adduce further evidence is granted.

• B The appeal is allowed.

• C The respondent's cross-appeal is dismissed.

• D The Judge's orders that caveat numbers 8322656.1 (caveat 1) and 8003770.1 (caveat 2) not lapse are confirmed.

• E The condition set out at [118](d) of the first High Court judgment that caveat 1 should lapse insofar as it affects Lot 11 is quashed.

• F The condition set out at [118](e) of the first High Court judgment reserving leave to the respondent to apply for lapse of the caveat if it met certain conditions, is quashed. We replace it with the condition that leave is reserved to the respondent to apply for an order that caveat 1 lapse. Such application may be brought on the grounds that the caveatable interest has been satisfied or will be satisfied on registration of documents.

• G The respondent must pay the appellants one set of costs for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Winkelmann J)

Introduction

1 In 2002 the appellants bought part of a large piece of rural land, owned by the respondent, Noble Investments Limited (Noble). Noble planned to subdivide its land but in advance of the subdivision sold lots within it, including to the appellants. These sales occurred on the basis that the on-sold lots would be included within Noble's scheme for the subdivision if it proceeded. As part of its agreement with the appellants in 2002 (the 2002 agreement), Noble undertook that if the subdivision went ahead it would provide roading and services to the appellants' land in keeping with the subdivisional scheme.

2 Noble has gone ahead with the subdivision, although progress has been slow and intermittent. Disputes have arisen between Noble and the appellants, including a dispute as to the performance of Noble's obligations to provide roading and services. The appellants lodged two caveats, the first (referred to as caveat 1) in reliance upon the obligations that Noble undertook to provide roading and services to the appellants' land, and the second (caveat 2) in reliance upon a further agreement that the appellants say they reached with Noble to grant a right of way over land owned by Noble.

3 Noble challenged the appellants' claim for caveatable interests in respect of both caveats 1 and 2. These challenges have been subject to two judgments by Associate Judge Osborne. 1 In the first, the Associate Judge found that the appellants had caveatable interests sufficient to sustain both caveats but made orders that caveat 1 should lapse in respect of one of the lots to which it applied, Lot 11. He also imposed conditions that would enable Noble to apply to the Court to have the caveats discharged in certain circumstances. The appellants say the order that caveat 1 lapse in respect of Lot 11 was based on a mistaken view of the facts, and also challenge the imposition of the particular conditions. Noble cross-appeals the finding that the appellants had caveatable interests to support either caveats 1 or 2.

4 In the first High Court judgment, the Associate Judge reserved leave to the parties to apply for further directions, which they subsequently did. The Judge then made various further orders in the second High Court judgment which are now also the subject of this appeal.

5 Determination of this appeal involves resolution of the following issues:

• (a) Was the Judge in error in finding that the appellants had a reasonably arguable case that they had an interest in the Noble land issue sufficient to sustain each of caveats 1 and 2?

• (b) Did the Associate Judge err in making his orders sustaining the caveats subject to the particular conditions?

Factual background

6 In 2002, the appellants and Noble entered into an agreement for sale and purchase pursuant to which the appellants purchased rural Lots 9, 19 and an undivided one-tenth share of an access way, Lot 22. That access lot describes a right angle, the first portion travelling south from a road bordering the Noble land, Yaldhurst Road, and the second portion, travelling east to west where it abuts Lot 9.

7 The lots purchased by the appellants totalled approximately four hectares, and were part of a 41.49 hectare area owned at that time by Noble. At the time of the agreement the lots were yet to be formed, but were marked out on a plan annexed to the agreement for sale and purchase, and which we annex to this judgment as Appendix A. The agreement contemplated two subdivisions. The first in time, the “initial subdivision”, would create lots including the three lots the subject of the agreement. Appendix A records that proposed subdivision. The second in time was the “further subdivision”, intended to allow the entire large block of land, which we refer to as the Noble land, to be used for more intensive residential purposes. The Noble land included land sold by Noble to the appellants and to other parties in advance of the subdivision. These purchasers are referred to collectively as “Noble Owners” in the agreement.

8 The agreement included the grant of an option in favour of Noble to buy back Lot 19 once the initial subdivision was completed.

9 The agreement imposed quite detailed obligations on Noble in respect of the further subdivision. The three critical clauses of the agreement for sale and purchase are best understood out of numeric order, and are as follows:

• 21.1. … the Vendor [Noble] will at its own cost pursue on behalf of all Noble Owners with the Relevant Authority district plan changes(s) and/or resource consent(s) (the “Further Consent”) which will enable Noble to be subdivided for more intensive residential purposes (and for any activities which are compatible with residential purposes) (the “Further Subdivision”). The timing and content of such applications will be at the absolute discretion of the Vendor, however the Vendor will act in good faith in seeking to achieve the Further Consent.

• 14. … [the Vendor] shall not agree to a lesser zoning for Lot 9 than for any other lot where it is seeking L1A zoning or it's equivalent (unless previously agreed in writing with the Purchaser).

• 15. … the Vendor undertakes to provide full width roading to L1A zoning standard at its cost, together with sewer, power, telephone, water and stormwater connection for this zone's standard to Lot 9. This work is to be completed within TWO YEARS of residential zoning being granted or when development of the Vendors adjoining land is undertaken, whichever comes first.

10 Access to the appellants' land was at least initially to be through Lot 22. The agreement provided that prior to settlement Noble would seal that lot to at least a 4.5 metre width. It contemplated that as part of Noble pursuing the further consent and undertaking the further subdivision, Noble would apply on behalf of the appellants and other Noble owners for the vesting in the “Relevant Authority” (here the Christchurch City Council) of Lot 22 together with strips of land that ran alongside the east-west portion of Lot 22 (the “road-widening area”). Because the road-widening area lay inside lots that Noble intended to sell prior to the further subdivision, the agreement provided a form of covenant Noble owners would be required to enter into to preserve Noble's ability to widen the road.

11 At some point Noble involved a company, Apple Fields, as the manager of the subdivision development. In 2006 residential zoning was granted for the land. In 2009 consent was granted for the further subdivision as contemplated in the agreement. The grant of that consent activated clauses 14 and 15.

12 Over time, various disputes have arisen between the parties to this proceeding. In 2008 a resolution of one of those disputes involved the appellants agreeing to transfer Lot 19 back to Noble, but with an agreement that the appellants would be granted an access easement over the lot (the 2008 agreement).

13 On 12 December 2008, the appellants lodged a caveat, caveat 2, in respect of Lot 19 to protect “a right of way easement” over it. The caveatable interest expressed in caveat 2 was simply an agreement “to create a right of way easement over the … land.”

14 On 28 October 2009, the appellants lodged a further caveat, caveat 1, over eight titles, which are Lots 11 to 18 inclusive in the initial...