Real Property Assignment PDF

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LAWS604 – 2019 Real Property Assignment Dear Mark, This letter includes legal advice pertaining to your issues facing the right of way, covenant, and garage lease. Issues relating to the use of the right of way Firstly on the facts, The Smiths are the servient tenement as they grant Mark access to “... the full and free right to go, pass, and repass, through over and along to the intent that the right-of-way hereby created shall be forever hereafter appurtenant…” thus making Mark the dominant tenement1. The use of a right of way can be limited, to determine if the right of way was limited to pedestrians thus excluding vehicles we can use the reasoning in Coleman v Shand2. It was found that the words used in the easement did not allow for motor vehicles if the easement allowed for motor vehicles it would detrimentally affect the use of the dominant tenement land. It was also noted that the subsequent owners of the lots in the general vicinity were private owners and enjoyed their peace and tranquillity, who majority opposed to the right of way permitting vehicle access3. Although in the present case words to specify the type of vehicle if any have not been included or excluded from access to the right of way. However, based on Coleman v Shand it is unlikely the right of way will be modified to permit vehicle access. A modification that may be granted instead is a wider right of way as per Coleman v Shand or an upgraded right of way that would not adversely interfere with the private enjoyment of land by the Smiths. Secondly the cutting of the Ti trees, McKellar v Guthrie4 can provide a guide to cutting down the Ti tress. In McKellar v Guthrie trees were cut down as they were supposedly obstructing the right of way. However the judge Sim J found that the defendant had not cut down the trees for the bona fide intention of using the right of way and had not proved that the trees had been an unlawful hindrance to the right of way that would justify the removal of the trees5. Therefore, it can be said to remove the Ti trees, they must be obstructing the use of the right of way. Based on the facts the Ti trees do not block the right of way or have greatly hindered the access of it. Coming to an agreement with The Smiths of the removal of the Ti trees may be the best option to allow for easier use of the right of way. Covenant Granted by Frieda The covenant granted by Frieda is a restrictive covenant, as Frieda wants to prevent the land from being used for tourist purposes. Therefore this covenant acts as a burden to the land, a negative covenant. To determine if this restrictive covenant will bind successive purchasers, the restrictive covenant must run with the land and they must be given notice. This was

1 David Brown ‘Easements, profits and Covenants” in Elizabeth Toomey (eds) New Zealand Land Law (3 rd ed, Thomson Reuter, New Zealand, 2017) 1049 at 1061. 2 Coleman v Shand (No 2), [2004] HC Auckland. 3 Coleman v Shand (No 2), [2004] HC Auckland at 41. 4 Mckellar v Guthrie, [1920] NZLR 729. 5 David Brown ‘Easements, profits and Covenants” in Elizabeth Toomey (eds) New Zealand Land Law (3rd ed, Thomson Reuter, New Zealand, 2017) 1049 at 1070.

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LAWS604 – 2019 Real Property Assignment shown in Tulk v Moxhay6, the covenant could be described as a contract. The court examined whether the successive purchaser could use the land in a way that was inconsistent with the contract between the vendor when giving notice of the covenant. It was found that with notice the successive purchasers would be bound by the covenant7. As well as this in Ceda Drycleaners Ltd v Donnan, it was found that for a covenant to run with the land it must be negative, benefits the convenantee, intended to run with the land and successive purchasers are given notice of such covenant8. Therefore, if covenant granted by Frieda is to be enforced on successive purchasers of the farm, the requirements set out in Ceda Drycleaners Ltd v Donnan must be met. As well as this the covenant does not specify whether the successive owners should continue to allow guests of the motel to walk across the farm, thus the motel guests will not be permitted to do so unless an agreement can be made between the motel and the new owners of the farm. Lease of the garage Although the agreement was sealed with a handshake based on the facts given there is no indication that Sally had signed the documentation, therefore there is no privity of contract. This follows the Property Law Act 2007 where every contract to enter into a lease must be in writing and is signed by the party the contract will be enforced against9 unless it is a short term lease. The duration of the lease as at 2019 is four years, therefore, cannot be classified as a short term lease and will require writing as per s(24) of the Property Law Act 2007. As well as this the Land Transfer Act 2017 requires there to be a transfer instrument, that is executed by the owner of the estate or interest10 in this case Sally. Sally has not execute the documentation. As well as this as the lease for the garage includes a covenant under the Property Law Act 2007 the lessee (Sally) must attain consent from the lessor to assign the lease to a new lessee11. There is no indication on the facts that Sally has received consent. Therefore, it can be argued that there is no lease for the garage. Sally to complete the assignment Under the Property Law Act 2007, you may be able to enforce the lease due to part performance. When there is no sufficient legal documentation of the assignment of the lease part performance such as the three points s found by Tipping J in TA Dellaca Ltd v PDL Industries Ltd12. Tipping J found that if there was a sufficient oral agreement13 that would bind the parties, in the present case the "straightforward" oral agreement and a handshake could be considered to be sufficient. As well as this if there were any steps taken to perform the contract or exercise the rights of the contract14, you started to exercise your rights to the use of the garage last week which may constitute as performance. Also, if examined “independently of the oral agreement was, on the probabilities, done on the footing that a 6 Tulk v Moxhay [1848] 41 ER 1143 (HL) 7 Tulk v Moxhay [1848] 41 ER 1143 (HL) 8 Ceda Drycleaners Ltd V Donnan [1998] 1 NZLR 224 (HC) at 234 9 Property Law Act 2007, s24. 10 Land Transfer Act 2017, s73 (3) 11 Property Law Act 2007, s225 (1) (a) 12 TA Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) 13 TA Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109 14 TA Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109

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LAWS604 – 2019 Real Property Assignment contract relating to the land such as that alleged was in exitance15” and lastly if “the circumstances in which the part performance took place make it unconscionable for the defendant to rely on the act16” . If the last two requirements mentioned were able to be proven the lease may be enforceable. Bound by Covenant 18 Sally was assigned the lease in 2006, the lease was also created in 2003 this is prior to the enactment of the Property Act 2017 which commenced on the 1st of January 2008. Therefore, according to Spencer’s case17 the covenants that “touched and concern” the land was binding on Sally. As per P. & A. Investments v Combined English Stores Group plc, applying the test for “touch and concern” on covenant 18, it is proven to not benefit the reversioner personally18 therefore it is binding on Sally. If Sally were to assign the lease to you (in 2019), it would be assigned under the Property Act 2017 which has already commenced. Thus, making all covenants that were bound to Sally bound to you including covenant 1819. The covenants will also be binding in equity, “unless a contrary intention appears”20. As well as this the “touch and concern” test has already established for covenant 18 so will be enforceable against successive lessees. Therefore, if sally were to assign the lease to you, you would be bound by covenant 18.

15 TA Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109 16 TA Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109 17 Spencer’s Case [1583] KB 5 Co Rep 16a 18 P. & A. Investments v Combined English Stores Group plc [1989] 1 AC 633. 19 Property Law Act 2007, s240 20 Property Law Act 2007, s303 (3)

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