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Farmer Faces Possible Imprisonment For Wilful Breaches Of QE II Covenants

14 May 2014

Farmer faces possible imprisonment for wilful breaches of QE II covenants

A recent case should serve as a reminder to landowners that the law does have teeth if they wilfully breach open space covenants registered against their land.

 

QE II Open Space Covenants

The Queen Elizabeth II National Trust is an independent statutory body set up to protect natural and cultural features on private land, such as wetlands, forest and bush, tussock grasslands, coastlines, streams and rivers, geological features and archaeological sites. The Trust works with the landowner by reaching agreement on certain conditions to protect the feature. The agreement is recorded in the open space covenant which is registered against the title to the land. The landowner is responsible for pest and weed control in the covenanted area, keeping fences in good condition and keeping stock out of the covenanted areas. The owner of the land and any subsequent owners of the land must comply with the conditions of the open space covenant.

 

QE II Trust v Netherland Holdings Limited

Netherland Holdings Limited (NHL) owned land which was subject to QE II open space covenants to protect areas of Kanuka. Shortly after purchasing the land NHL cleared areas of the Kanuka to allow irrigators to access the land. This was a clear breach of the terms of the covenant.

On discovering that NHL had cleared the Kanuka, the Trust obtained written undertakings from NHL that it would do no further harm to the protected areas. The Trust later found that NHL had breached the undertakings by burning vegetation, causing manure to leach into the covenanted area causing the death of Kanuka trees and operating an irrigator in the covenanted area.  It therefore obtained a Court injunction (court order) restraining NHL and Mr Wobben (a director and shareholder of NHL) from any further breaches of the undertakings.

 

Netherland Holdings Limited defies Court Order

As the judge commented, one would have thought that the injunction would have been the end of the matter. Not so. NHL and Mr Wobben continued to allow irrigators to operate on the covenanted areas and failed to take adequate precautions to ensure that fertiliser would not be spread on those areas. Yet again the Trust was put to legal action. The Trust successfully sought an order that NHL and Mr Wobben were in contempt of Court for deliberately and wilfully breaching the injunction.

The judge did give NHL and Mr Wobben a reprieve by refusing to issue an arrest warrant until a hearing had been held to determine what penalty to impose on them. That penalty would ultimately take into account what steps NHL and Mr Wobben took to purge their contempt before the hearing. The judge also issued a clear warning to NHL and Mr Wobben that the penalty for wilful or reckless disobedience of a Court order could well include imprisonment.

 

Please email me at barbara.mcdermott@nwm.co.nz with your ideas for future articles.  Keep an eye out for next month’s column, where I will discuss another relevant rural legal issue.


Barbara McDermott is a partner of Norris Ward McKinnon, specialising in commercial and rural law.  With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.   Find out more about us at www.nwm.co.nz