May 2021 - McCaw Lewis

A Changing Landscape: New Direction for Resource Management

Posted on May 14, 2021March 19, 2026 by au_common_admin

Many of the environmental issues we now face are consequences of legislation that strived for a better future, but in practice did more damage than good. Over the coming months we’ll be bringing you a series of articles which will look at the background and issues for resource management, and track the ever-developing changes. Our first article looks at the motivation to change the resource management space, and where things are at in that process.

The Resource Management Act 1991 (“RMA”) was the first comprehensive and integrated review of the laws governing the management of the country’s natural and built resources: land, air, water, and minerals. The RMA repealed 54 statutes and more than 20 regulations, creating a trail blazing piece of legislation both locally and from a global perspective. This ‘one stop shop’ wrote into law the principle of sustainable management and provided a framework for mitigating, remedying or avoiding adverse effects on the environment. The RMA aspired to protect our natural environment while balancing the needs of society in the developing world.

Fast forward 30 years, and the practical implementation of the RMA has failed to give effect to its original intention.

As a result, the Government appointed Hon Tony Randerson QC to lead the Resource Management Review Panel (“the Panel”) in reviewing the RMA. The report – New Directions for Resource Management in New Zealand – was issued in June 2020. In it, the Panel made (among other matters) the following key recommendations:

The RMA should be repealed and replaced with new legislation;
The new regime should:
- introduce the concept of Te Mana o te Taiao and giving effect to Te Tiriti o Waitangi;
- implement a new purpose and provide new guiding principles;
- change the national direction mechanisms and role of central government;
- implement a mandatory plan for each region combining regional policy statements and regional and district plans;
- establish a comprehensive, nationally coordinated environmental monitoring system. This should be lead by the Ministry for the Environment in consultation with other agencies; and
Resourcing should be provided by local and central government to mana whenua to participate in RMA processes.

Consequently, the government has followed the recommendations of the Panel. In particular, the government has agreed to repeal the RMA and replace it with three new pieces of legislation – the Natural and Built Environments Act, the Strategic Planning Act and the Climate Change Adaption Act. The government is moving quickly to prepare/create the new regime, with Bill’s for each of the proposed legislation set to be introduced by December 2021.

Currently, there is little information available to understand the extent to which the government will implement the findings of the Panel’s report. However, given the velocity this process is likely to have, it will be important for stakeholders in the new regime to be responsive once engagement begins.

In our next article, we will step through the Panel’s report in more detail and provide some insight into issues that the new regime looks to address.

Kuru is an Associate in our Māori Legal Team and can be contacted on 07 958 7475.

Inconvenient Covenants and How to Remove Them – A Cautionary Tale for Developers

Posted on May 10, 2021March 19, 2026 by au_common_admin

Land covenants are commonly used in New Zealand to protect a party’s underlying interests in land. The Supreme Court has recently provided guidance for landowners and developers on how the Courts will treat potentially irrelevant covenants, and how they can be extinguished or modified by the Court.

Summary

Section 317 of the Property Law Act 2007 (“PLA”) contains the legal process for modifying or removing land covenants. A person bound by a land covenant can apply to the Court to modify or extinguish it. In short, even when it may seem that a land covenant is no longer relevant, the Courts will be reluctant to sweep it aside. In the recent December 2020 Supreme Court decision of Synlait Milk Ltd v New Zealand Industrial Park Ltd, Synlait would be ultimately successful in its application under section 317 of the Property Law Act 2007 (“Act”). However, this was a costly and time consuming exercise, to the point that Synlait ultimately settled the matter out of Court to protect its new $250 million factory, despite having gone through a full Supreme Court hearing. This case presents a cautionary tale on the difficulties of removing land covenants.

History

Synlait entered into a conditional contract in February 2018 to purchase 28 hectares of land from Stonehill Trustee Limited (“Stonehill”). The contract was conditional upon Stonehill removing land covenants which restricted use of the site to grazing, lifestyle farming and forestry.

The land covenants were 20 years old and ran for 200 years. The land covenants had been put in place to protect New Zealand Industrial Park Limited’s (“NZIPL”) ability to develop a quarry in the future. Removing the land covenants would make it more difficult for NZIPL to apply for a quarry resource consent on Stonehill’s land.

Stonehill attempted to negotiate with NZIPL for the removal of the land covenants but was unsuccessful.

The land had been rezoned from rural to industrial land in 2012 and notably there were other industrial activities nearby, including another dairy plant. There were also a number of planning changes to the Pōkeno area which changed the Synlait land to “Industrial 2” land. Grazing, lifestyle farming and forestry were “non-complying activities” under “Industrial 2” zoning which compromised what the land covenants had intended to achieve. NZIPL’s land was still zoned to allow for discretionary quarrying.

Court Decision and Appeal Grounds

A High Court decision in November 2018 removed the land covenants, and Synlait consequently took title of the land and began building their milk factory. NZIPL succeeded in overturning the High Court decision in the Court of Appeal, with the Court of Appeal finding that despite the changes in zoning and neighbourhood, NZIPL should continue to enjoy the same benefits from the land covenants.

Synlait appealed the May 2019 Court of Appeal decision. The key ground being under section 317 (d) of the PLA, and the Court of Appeal’s assessment of whether there has been “substantial injury” to entitled parties.

In short, Synlait sought to extinguish the land covenants on their burdened land. Alternatively, it sought to modify the land covenants to allow development of the burdened land.

NZIPL submitted that Synlait’s factory would make it harder for NZIPL to obtain quarrying resource consent, thereby “substantively injuring” NZIPL.

Supreme Court Analysis

Section 317 of the PLA has a number of grounds that can be considered when modifying or extinguishing an easement of covenant. The categories considered by the Supreme Court were:

317(1)(d): Would there be substantial injury (from the milk factory)?

For an injury to be substantial it must be “real, considerable, significant as against insignificant, unreal or trifling.” The Supreme Court was satisfied that modification of the land covenants would not substantially injure NZIPL. This was in part because there were already two milk factories in the area, meaning a further milk factory would not make much difference. There was also uncertainty as to whether NZIPL would ever actually develop a quarry.

317(1)(a)(ii): Does the change in neighbourhood justify the removal/modification of the land covenants?

The second ground relied upon was that modification of the land covenants was justified due to changes in the neighbourhood. The Supreme Court was satisfied this ground was made out due to a significant increase in the population of Pōkeno, and there had been significant commercial and residential development.

317(1)(b): Do the land covenants impede reasonable use of the burdened land?

When the land covenants were entered into, it was reasonable for the burdened land to be restricted to grazing or forestry operations. The reasonable use of the burdened land had changed because of the changes in zoning and the neighbourhood generally.

The Supreme Court was satisfied that the changes were not foreseeable when the land covenants were entered into. This in turn meant that the land covenants, appropriate at the time, now impeded the reasonable use of the land to a greater extent. The Supreme Court disagreed with the Court of Appeal, and held the land covenants were an impediment on the land.

Key Learnings

Land developers should treat land covenants with an appropriate amount of respect before looking to challenge them, even if the covenants appear no longer relevant. There has been a substantial increase in the numbers of applications to modify covenants in recent years, and with the increasing pressure on land use and availability, that trend is likely to continue. Although the Courts look like they are more willing to modify or remove covenants, the process is still slow, and as Synlait found out, extremely costly.

Andrew is a Solicitor in our Dispute Resolution Team and can be contacted on 07 958 7447.

Contracting Out Agreements: Protecting Your Assets in a Relationship or Marriage

Posted on May 6, 2021March 19, 2026 by au_common_admin

Introduction

Ensuring you and your significant other are on the same page when it comes to your shared and separate assets gives you both peace of mind. This article outlines how you can make your mutual understanding official with a Contracting Out Agreement (“COA”) (sometimes referred to as a “pre-nuptial agreement”).

What is a COA?

Under the Property (Relationships) Act 1976 (“the Act”) many assets that were the separate property of one party will become relationship property after the parties have been in a relationship of three years or more (making those assets equally divisible between parties upon separation). A COA allows parties to “opt out” of the Act and identifies property that each party will retain should they separate.

For a COA to be enforceable, both parties are required to receive independent legal advice, and the agreement must be in writing.

What is relationship property?

“Relationship property” is defined in the Act and includes:

The family home and contents (but not taonga or heirlooms), other land or buildings and vehicles;
Property acquired before the start of the relationship, but with the relationship in mind. For example, buying a holiday home in one party’s name (pre-marriage) with the intent of using it for the family;
Income, superannuation, insurance pay outs, rents, and other income earned during the relationship;
Any assets you acquired during (or even before) the relationship and that you intended both parties to use;
Any increase in value, income/gains derived, and/or proceeds of sale from the items above;
Non-personal debts (your personal debts are your own responsibility).

What is separate property?

Simply put, any property not classified as relationship property is classed as “separate property”.

The general rule is that separate property remains the property of the spouse or partner who owns it and does not have to be divided when the relationship ends. Examples of this include:

Gifts;
Property acquired while not living together as a couple;
Increases in separate property value, and/or income derived from separate property.

Separate property can become relationship property if it gets mixed with relationship property or used for family purposes.

Trust Property

In New Zealand, where the use of trusts is widespread, a COA cannot include the division of trust assets. Essentially, a COA can only record the parties’ intentions towards trust assets, but the final say remains with the trustees. If parties have significant assets in a trust, best practice is to have two separate agreements – a COA dealing with personal property owned by each party, and a Property Sharing Agreement to deal with trust assets owned by the parties.

When should I get a COA?

While you can get a COA at any stage in your relationship (even after having passed the three year threshold), they tend to crop up in the following situations:

When a couple is purchasing property together;
Upon inheritance;
When one party has significantly more assets than the other;
When one party has significantly more debt than the other;
Partners entering into their second or subsequent relationships.

Why should you get a COA?

If you are considering getting married or entering a de facto relationship and you have significant assets, a COA is a good idea. A COA sets out what will happen to property that was acquired both before and during your relationship should you separate. A COA is not an ironclad guarantee, but it will help provide certainty and reassurance for both parties, and will assist should there be dispute on separation.

Conclusion

Knowing whether to get a COA can be difficult, and a preliminary assessment of a couples’ current assets is usually advised. A well drafted COA can provide clarity and peace of mind for both parties. The first step is to have an initial discussion with a lawyer.

Our team of lawyers can help you prepare an agreement that is tailored to you and your partner’s needs.