SUPPLIED
The Court of Appeal has upheld a judgment by Justice Andru Isac.
An appeal against a judgment by Justice Andru Isac regarding restrictive covenants placed on a lifestyle block near Levin has been dismissed by the Appeal Court.
The case had its beginnings on January 13, 2020, when Joshua Hurlimann signed to buy one of four lifestyle blocks being sold as part of a subdivision at Koputaroa, 7km north of Levin by Paul and Melanie Lilley.
On October 22, 2020, the Lilleys’ solicitor emailed Hurlimann’s solicitor advising of a series of restrictive covenants the Lilleys intended to register over the title to Hurlimann’s section.
The covenants had restrictions on any building that could be erected on the section.
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On November 10, 2020, Hurlimann said he accepted the covenants and advised his solicitor that the land title came with covenants.
In March 2021, the Lilleys’ solicitor advised they intended to register further restrictive covenants against the title to Hurlimann’s section.
“These would prevent the owner of the section from erecting any residential dwelling or other building on it,” Appeal Court documents said.
“The reason given for this was that the section had previously been used as a dumping ground and the Lilleys held concerns about the stability of the land for building purposes.
“This prompted Mr Hurlimann to issue proceedings in the High Court seeking a variety of orders and declarations in relation to both sets of restrictive covenants. At that point the Lilleys elected not to register the second set of restrictive covenants.”
The sale was completed on June 29, 2021.
Stuff
The court said there was nothing about the circumstances of the appeal justifying an award of costs.
In the High Court Hurlimann sought an order extinguishing the covenants claiming the law did not permit the Lilleys to register them and since he had only agreed to them “under duress and subject to illegitimate pressure exerted by the Lilleys”.
Justice Isac delivered a judgment against Hurlimann on all arguments raised.
Hurlimann’s appeal was based on three claims.
Firstly, an alleged failure to follow a two stage approach which was dismissed.
The second claim was that the covenants were inequitable since they only applied to Hurlimann’s section.
This too was dismissed.
“Mr Hurlimann was fully aware of the nature and scope of the restrictions that were being imposed on his section and he expressly agreed to them after taking legal advice and considering his options,” the Appeal Court said.
A third claim that the Lilleys imposed the covenants to force Hurlimann to cancel the purchase contract was also rejected.
The Appeal Court was satisfied there was no error in Judge Isac’s approach and stated: “Mr Hurlimann ultimately elected not to cancel the agreement because he knew the section had increased significantly in value since he had agreed to buy it.
“As the judge found, Mr Hurlimann wanted to take advantage of this by on-selling the property even though it would be subject to the restrictive covenants.
“ We are therefore satisfied the judge was correct to conclude it would not be just and equitable to make an order extinguishing the covenants.”
The court said there was nothing about the circumstances of the appeal justifying an award of costs.
