Forcing the Andrew family to remove a land covenant blocking intensive subdivision on neighbouring land near Orewa on Auckland’s North Shore entitled them to compensation, but not to capture all the profits to be earned on the neighbouring subdivision, the Court of Appeal ruled.
With new planning rules allowing intensive subdivision on what was once rural land, local land values have escalated dramatically.
In 2007, the Andrews purchased a four hectare lifestyle block on Endsley Rise. It is on the western side of the northern motorway, opposite Millwater subdivision, near Orewa.
This lifestyle block is part of a six-lot 1970s subdivision of what was then rural land. Restrictive covenants on each lot prevent further subdivision and requires any dwelling constructed on the property to exceed an inflation-proofed value. The adjusted figure as at 2023 was some $715,000.
Five decades later, the district is no longer rural.
The area is now intensively subdivided, with Council rules allowing ‘precinct’ development, requiring integration of residential building and infrastructure.
The Court of Appeal was told a McConnell joint venture has precinct approval for a development near the Andrew’s property allowing a 74 lot subdivision, including two high-rise apartment blocks.
Owners of land to be subdivided, and other near neighbours, have all agreed to remove their existing restrictive covenants, allowing the joint venture project to proceed. Earthworks have started.
The Andrew family refused approval, stating they intended to keep their property as a lifestyle block and would enforce their rights to block development of neighbouring land in breach of their covenant.
As the one affected landowner not to agree, the Andrew family could block the entire project.
This led to McConnell’s Property Law Act application, forcibly removing the Andrew’s covenanted rights on grounds the ‘character of the neighbourhood’ had changed, making the existing restrictive covenants no longer appropriate.
Andrew family appealed a High Court refusal to award compensation. The trial judge said removing the covenant made their own land more valuable, since it too could now be subdivided. This was compensation enough.
On appeal, the Court of Appeal ruled Property Law Act compensation is payable. Further evidence is needed. Courts have a discretion as to the amount of compensation.
Past practice has seen compensation calculated at twenty to thirty-six per cent of the increased value accruing to neighbouring land on removal of a restrictive covenant.
On their calculation, Andrew family are looking to claim twenty to thirty million dollars.
In the Court of Appeal, Justice Muir said they cannot claim anything approaching that amount when removal of the covenant also benefits them. Their land can now be subdivided, regardless of their claims of having no intention to do so.
A decision on the amount of compensation was referred back to the High Court.
Andrew v. Sidwell Developments Ltd Partnership – Court of Appeal (21.08.25)
25.185