Having forfeited a $2.5 million deposit in 2009 to Auckland property developer Parklands Properties, Reynolds family interests had the upper hand twelve years later when the Court of Appeal ruled Parklands would need to pay some $4.6 million to remove an easement restricting further development of its subdivision at Karaka.
In 2004, Joseph Norma’s Parkland Properties Ltd and interests associated with Francis and Juliet Reynolds jointly purchased rural land on the Hingaia peninsular near Papakura. Auckland City expansion has seen this land developed for residential housing. When purchased, the land contained a four hundred metre right of way ensuring access to the two surveyed lots. By agreement Parklands took title to one lot totalling 17 hectares; Reynolds the remaining 14 hectares. Their agreement committed each to co-operate in subdividing the land. A subsequent deal for the Reynolds to buy out lot two owned by Parklands fell over with the Reynolds short of cash after the global financial crisis. They forfeited a $2.5 million deposit. After this deal collapsed, the Reynolds business relationship with Parklands’ Mr Norma soured.
Fast forward a decade: Parklands had Auckland City consent for subdivision of its land with a requirement to create a public road as access for an intended 158 residential lots. The existing four hundred metre right of way was perfect for the job. Parklands surrendered its share of the right of way easement for use as a public road; it asked the High Court that the Reynolds be forced to similarly give up their easement rights allowing completion of the public road designation. The Reynolds no longer used the right of way, it said. Access to their land was provided from other public roads.
The High Court removed the Reynolds rights of way, awarding them $300,000 compensation. This ruling was overturned by the Court of Appeal. The prior agreement between Parklands and the Reynolds to co-operate in any future subdivision anticipated that any variation of their rights would be a matter of negotiation. It was not for the courts to override this agreement, the Court of Appeal ruled.
The court was told that removal of the Reynolds rights of way was worth $13.9 million to Parklands. Reynolds family interests would be entitled to share in this benefit, if negotiating a surrender of access rights, the Court ruled. Payment by Parklands of $4.6 million was an appropriate figure, the Court of Appeal said. This represented $1.44 million loss of value to Reynolds ownership of lot one and a $3.16 million share of the benefit to be gained by Parklands with its proposed subdivision of lot two.
F&J Reynolds Trust v. Parklands Properties Ltd – Court of Appeal (23.08.21)
21.141