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A couple who have spent years tangled up in legal action after subdividing their land say they’re happy “common sense” has prevailed.
Paul and Melanie Lilley were taken to court two years ago after a man they sold subdivided land to wanted “restrictive covenants” he had agreed to, including a $100 fine for each day certain rules weren’t adhered to, removed by the court.
The Horowhenua couple are relieved the battle has come to an end, with the courts retaining the restrictions, but say it should never have made it all the way to the Court of Appeal.
“This process has been long and frustrating, and we are happy that justice and common sense has prevailed,” the couple told NZME.
“[We’re] happy it is finally over, and the covenants remain to protect the integrity of the subdivision and its owners.”
The Court of Appeal recently released its decision in favour of the Lilleys, after chemist Joshua Hürlimann took the couple to court over restrictive covenants imposed on land he had purchased from them in 2020.
Covenants included restrictions on constructing buildings “other than a new residential home” which needed to be built in a year and with modern materials.
Size limits on a residential dwelling were restricted to a minimum of 240 square metres, but Hürlimann told the court he couldn’t afford to build such a structure.
Other covenants included a restriction on a clothesline that had to be “aesthetically sensitive in terms of design and location”, and another was a $100 fine for each day the rules were broken.
Hürlimann said he had dreams of building a log cabin and “mini organic farm” on the plot of land, but argued the covenants, which he had agreed to in November 2020, restricted him.
The Lilleys decided to subdivide their 7ha rural property into four sections, keeping one and selling the rest as lifestyle blocks.
Hürlimann approached the couple in 2019 to buy one of the sections and during the sale process signed the agreement for sale and purchase (ASP) which mentioned the potential for covenants on the land.
It specified in the ASP that if the purchaser, Hürlimann, disagreed, they could cancel the deal and receive a refund of the deposit.
Hürlimann signed the ASP in January 2020, but months later the Lilleys claimed they needed to enforce covenants because of Hürlimann’s poor management of the property.
Felled trees, weeds growing through green waste piles and oil-contaminated soil dumped near the shared driveway were cited as just a few examples of poor section management by the Lilleys in court.
After seeking legal advice, Hürlimann agreed to the restrictions in November 2020, but when he launched his legal battle in 2021 he said he had agreed under duress.
Hürlimann claimed the covenants put on his piece of land were “arbitrary” and “unfair”.
His case fell short in the High Court when Justice Andru Isac ruled last year the covenants should remain and to extinguish them was not “just” or “equitable”.
Hürlimann took his case a step further to the Court of Appeal in March this year, appealing the High Court decision by continuing his bid in having the set of covenants extinguished or modified.
The case was heard in the Court of Appeal at Wellington in March this year with the Lilleys in attendance. Photo / Mark Mitchell
Justice Graham Lang said in the recent appeal decision Justice Isac’s approach to the case wasn’t made in error, and the law around extinguishing property covenants ruled in the Lilley’s favour.
The couple said they had made multiple offers to buy the property from Hürlimann while the court case continued but were denied by the young landowner.
Hürlimann continued with the purchase of the land despite the restrictive covenants and failed to “exercise his right to cancel the agreement and receive a full refund of his deposit”, Justice Lang said.
“Mr Hürlimann ultimately elected not to cancel the agreement because he knew the section had increased significantly in value since he had agreed to buy it,” Justice Lang said.
“As the Judge found, Mr Hürlimann wanted to take advantage of this by on-selling the property even though it would be subject to the restrictive covenants.”
It was accepted by the court that although Hürlimann’s was the only property with the specific set of restrictive covenants, the couple were free to deal with the remaining sections as they saw fit.
As it stands, the plot of land remains empty, according to the couple, who say the case should have never come to one of the country’s highest courts.
They didn’t want to say how much the legal battle had cost them, but because Hürlimann accessed legal aid halfway through the case they will never recover costs.
Hürlimann was approached for comment through his lawyer Matt Freeman, who told NZME his client did not wish to make a comment.
