High Court modifies covenant on Drury properties, clears path for urban development

The High Court approved modifying a restrictive covenant on two Drury properties, allowing higher-density residential development in line with Auckland's new urban zoning plans.

The application, brought under section 317 of the Property Law Act 2007 (PLA), sought to modify a covenant registered in 1995 on two properties located at 25 and 30 Burberry Road. This covenant imposed strict land-use limitations intended to maintain a “rural residential lifestyle,” restricting building design, construction materials, and the type of development allowed. Since then, zoning in the area has transitioned from rural to urban to support Auckland’s growing housing needs, with the Drury area now zoned for residential use, including terrace housing and apartments. The Auckland Council’s recent plan changes reflect the area’s transformation, setting out provisions for urban infrastructure and higher-density housing.

Evidence submitted showed that significant development has already reshaped the Drury area. An adjacent project, the Auranga development, is set to add approximately 2,650 new homes, along with educational facilities and a town center. The properties at Burberry Road are now located within the Mixed Housing Urban Zone, aligning with Auckland Council’s urban growth strategy and no longer fitting the rural lifestyle restrictions imposed by the covenant.

The High Court found that continuing to enforce the covenant would conflict with current zoning policies and impede reasonable use of the land, contrary to the PLA’s criteria. The court noted that the covenant’s restrictions no longer serve a useful purpose, as they limit development in a way not foreseeable when the covenant was created. Furthermore, the lack of opposition from other parties underscored the covenant’s diminished relevance.

In making its decision, the court applied the PLA’s two-stage test from the precedent Synlait Milk Ltd v New Zealand Industrial Park Ltd, assessing first whether statutory grounds for modification existed and, second, whether it was appropriate to grant the modification. The court found both criteria met, emphasizing that the significant shift in neighborhood character and public interest in new housing justified the covenant’s removal.

With this ruling, the High Court modified covenant C892866.1, removing its restrictions on 25 and 30 Burberry Road. The decision paves the way for increased residential development in line with the Auckland Unitary Plan’s Drury 2 Precinct requirements, enabling greater housing density and improved infrastructure for future residents.