Owners of adjoining cross-leased units on Auckland’s North Shore in dispute over parking arrangements and the refurbishment of one unit were told to go to arbitration as their cross-leases required.
The High Court was told of escalating disharmony between the Mortimers in flat two and the McKenzies as owner of flat three, cross-leased properties on Beach Road in Castor Bay. The McKenzies refused to sign off on the Mortimers’ plans to build a pop-top on the roof of flat two; did not agree to an alternative plan to change part of the existing flat two iron roofing with clear glass; and took legal action when the Mortimers then set about making internal alterations within their flat. Their dispute escalated with the McKenzies complaining that the Mortimers parking arrangements for a car and campervan constituted a legal nuisance, obstructing safe exit and entrance to the property.
Cross-lease developments were a crafty legal workaround first developed to overcome Auckland Council’s then restrictions on subdivision sizes. There was no subdivision, lawyers argued. All flat owners part-owned the undivided freehold, granting each a 999 year lease over a specified area for their own personal use. Each lease is in identical terms, bar identification of the area each claims as their own. The cross-lease sets out rights as between owners.
The McKenzies went to court arguing the Mortimers’ activities breached terms of the cross-leases. They want the Mortimers to remove all internal alterations, returning flat two to its original layout. Associate judge Smith ruled their dispute must first be put to arbitration. Their cross-leases require arbitration for any ‘differences’ arising out of the leases ‘operation.’
McKenzie v. Mortimer – High Court (17.01.20)
20.021