First published in NZ Winegrower, June/July 2014 edition.
The Resource Management Act 1991 presumes that land users may undertake any
activity provided they do not generate adverse effects on the environment beyond
the boundary of the land. In reality, many productive uses of land, including
vineyards, generate effects beyond the farm gate that are not capable of being
avoided, remedied or mitigated.
Vineyards are particularly susceptible to conflict between uses on adjoining
properties. The romantic, idyllic imagery associated with the industry is a
powerful marketing tool for prospective subdivision of rural land for rural
residential lifestyle blocks. However, the reality of the working environment is
often at odds with new residents’ perceptions. Planning mechanisms such as “no
complaints covenants”, separation distances and buffer zones have been used to
address this issue.
This article will consider the “no complaints covenant” in terms of its
purpose, its enforceability and its application to subsequent purchasers of the
land bound by the covenant.
A “no complaints covenant” is an agreement which prevents the owner or
occupier of land nearby or neighbouring an effects-producing activity (the
nearby owner) from complaining about the effects of that
activity. Such an agreement will propose various restrictions upon the nearby
owner, preventing them from taking action against the owner/occupier of the
effects-producing site (the effects-producing owner). Such
restrictions might involve preventing the nearby owner/occupier from:
suing for nuisance;
taking enforcement action under the Resource Management Act 1991;
opposing, or making a submission on an application by the effects-producing
landowner for a resource consent to carry on existing effects-producing
activities, or for new effects-producing activities; or
funding any of the above actions (Asher Davidson “Reverse Sensitivity: Are No
Complaints Covenants the Solution?).
In order to ensure a no complaints covenant will be enforceable against a
nearby owner, both the nearby owner and effects-producing landowner must freely
consent to its terms – a no complaints covenant cannot be imposed unilaterally.
The reason for this is that a no complaints covenant restricts the rights of a
nearby owner under the Bill of Rights Act 1990 and the Resource Management Act
1991. Such nearby owners are entitled to waive their rights under both of these
statutes. However, to do so, they must freely consent to the terms of the
covenant and its restrictions on an informed basis Rowell v Tasman District
Council  NZRMA 202). In essence, this will require the nearby owner
to have understood the covenant’s terms, and have entered into the covenant
For winegrowers’ purposes, the most useful no complaints covenants are those
covenants which bind subsequent purchasers of the nearby land. A covenant which
binds these purchasers alleviates the need to renegotiate such covenants every
time the land changes hands, and affords winegrowers more certainty in their
A no complaints covenant will not automatically bind subsequent purchasers of
the land. In fact, the legal presumption is that it will not; the law of
contract generally provides that a contract between two parties cannot confer
liability on a third party. However, this general principle can be overruled by
The best method is to require, in an Agreement to covenant, that the covenant
be registered on the title of the nearby land. Once registered, the covenant
will bind all subsequent purchasers of that land (s 302 of the Property Law Act
2007). Such a clause will entitle the effects-producing landowner, is the nearby
owner attempts to on-sell the land before the covenant is registered, to lodge a
caveat on the title. A caveat will prevent the nearby owner from selling the
land until the covenant is registered and subsequent purchasers are bound (s
141, Land Transfer Act 1952).
Another method is to give the subsequent purchaser notice of the covenant
prior to sale (Tulk v Moxhay (1848) 41 ER 1143). “Notice” essentially
requires that the subsequent purchaser’s attention is brought to the covenant
and its terms. However, this route is more difficult, since practically notice
is a matter for the nearby owner in the course of sale. Nearby owners have an
incentive not to give notice, as the covenant may potentially affect the value
of their land (both positively in that an existing productive activity may
continue unabated, and negatively if it highlights potential sensitivities).
It is important to remember no complaints covenants will only go so far; they
cannot restrict members of the public members of the public from taking
enforcement action against the effects-producing landowner, making a complaint
or submitting on an effects-producing resource consent application. However,
they are a useful tool for winegrowers (and other landowners whose land houses
effects-producing activities) to enable them to carry out their business without
constant threat of complaint from neighbours.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.