Covenants protect land in perpetuity

The Court of Appeal has ruled in favour of the QEII National Trust, upholding the protection of its covenants:

. . .Spanning 4 years, the case has been taken as far as the High Court and on to the Court of Appeal by the property developer, who has been trying to overturn the 404ha forest covenant he owns on the Coromandel Peninsula. His intention was to have the covenant removed so the land could then be subdivided for lifestyle blocks, to the detriment of the protected area’s ecological values and the intentions of the original covenantor. The covenant agreement allows for the construction of one dwelling only.

The land in question was covenanted in 1997 to protect a block of lowland tawa-towai forest. The block sits within a network of other protected lands that together form a wildlife corridor, connecting the Coromandel Forest Park in the middle of the Coromandel Peninsula to the Peninsula’s eastern coast.

National Trust Legal Manager, Paul Kirby, said the latest ruling has further strengthened open space covenants as an excellent mechanism for protecting land.

‘This win exemplifies the purpose of the National Trust as the perpetual Trustee of covenants,’ Mr Kirby said.

 ‘With the ruling in favour of the National Trust, the intentions and wishes of the original covenantor, who is now deceased, have been honoured and upheld when he was not here to do that himself,’ he said.

Described as a ‘complex’ case by the Court, the decision has established new case law and corroborates existing case law from a previous High Court hearing on the same matter, confirming that open space covenants have the protection of ‘indefeasibility’ under the Land Transfer Act. It has been confirmed in law that, once registered on a land title, open space covenants bind current and future owners and are not susceptible to attack arising from defects or error.

The Court confirmed that the National Trust acted in the best interests of the original covenantor, Mr Russell, and fulfilled its statutory mandate for the benefit of the people of New Zealand. It also awarded the highest possible costs to the National Trust.

The National Trust’s Chief Executive, Mike Jebson is delighted with the outcome.

‘It has been a time consuming and costly exercise but we now have excellent case law that should categorically put an end to any similar challenges on the status of open space covenants,’ he said.

‘We are a charity organisation with limited funds but this case was something that we could not afford to drop. It has diverted precious funds that would normally have been used for protecting land and supporting covenantors. We are hugely relieved, therefore, that some of our costs will be recovered with this decision,’ he said. . . 

Federated Farmers supports the ruling:

Federated Farmers environment spokesman Chris Allen says the decision ensures a new landowner cannot get open space covenants lifted so they build on the land, in this case a developer wanting to build lifestyle blocks.

“As landowners, farmers are some of the biggest contributors to environmental protection in New Zealand.

“Farmers care deeply about the environment and leave a protected legacy for future generations. Our members are extremely proud of their work and achievements on their farms to protect and enhance biodiversity,” Mr Allan said.

“This latest ruling in the Coromandel shows open space covenants as an excellent mechanism for protecting land; even better than District Plans and arguably more than National Parks.”

The QEII National Trust was set up in the 1970s, when a visionary group of farmers came together to investigate ways they could protect special natural and cultural sites on their land after they were gone.

These landowners were the driving force behind the establishment of the QEII National Trust, which was set up in 1977 by an Act of Parliament to deliver on their aspirations.

Federated Farmers strongly support and acknowledges the existing investment in its partnership with QEII working with landowners to enhance and protect our special places and things. . . 

Covenants are legal agreements and any restrictions they place on future owners ought to be reflected in the price they pay for the land.

Landowners place covenants on their land to protect it in perpetuity and this court ruling upholds that protection.

 

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