At a recent NZLS seminar on easements and covenants, a query was raised as to whether the words "inter partes" in section 90F of the Land Transfer Act 1952 ("LTA") mean that a land covenant created by easement instrument under s307 of the Property Law Act 2007 ("PLA") binds only the original parties and therefore does not bind successors in title. Thomas Gibbons, a partner at McCaw Lewis Chapman in Hamilton, and one of the co-presenters of that seminar, followed up that query in LawTalk issue 719.

As a first comment, "inter partes", according to Butterworths NZ Law Dictionary is Latin for "between the parties". Latin is not, of course, a compulsory part of LLB training any more and when the LTA is redrafted, it is hoped that Latin phrases like this can be avoided: they mean nothing to younger generations. That said, this provision only became law in 2005, so clearly some people feel there is still a place for Latin in legislation, as long as the words are in italics. I am not one of them.

We might logically ask why anyone would create a covenant by easement instrument if that would bind only the parties who signed. Why not simply create a covenant by deed? The reason for using an easement instrument rather than a deed would, of course, be to allow the covenant to be notified on the land transfer register. That is, the reason for using an easement instrument is to allow the covenant to bind successors in title.

To me, it seems counter-intuitive that a statute might be saying that you can put a covenant in an easement, but that it will not be binding on parties other than those who signed it. Odd provisions are not unknown to statute law, but we do need to start from the position that a statutory provision has some purpose.

To labour the point, if a covenant effected by easement instrument binds only those who sign it, then no covenants will be created by easement - a simple deed can do the job instead.

The matter is further clarified by the wording in s90F(1)(b) of the LTA, which says that the "inter partes" provision is subject to s307 of the PLA. As long as the covenant meets certain statutory requirements (benefits land and burdens other land, created at the right time, etc), then s307(3)-(5) seem to answer the question.

Section 305 says the Registrar General of Land may enter a notification of a covenant in the register (for the burdened and benefited land), while s307(4) states that a notified covenant is an interest in land under s62 of the LTA (meaning title is taken by subsequent purchasers subject to that covenant). Section 307(5) states that notification on the register makes the covenant an interest in land, "but does not in any other way give the covenant any greater operation than it would otherwise have".

So it is clear that a covenant - even one created by easement - is an interest in land, thereby binding future owners of the land. Section 307(5), in my view, means that the covenant remains an agreement (deed) between parties: not, for these purposes, the parties who signed it, but rather the relevant landowners at the time a question arises as to the covenant.

This provides a good place to refer back to s90F. We can, through the lens of s307, interpret "inter partes" to mean "between the parties owning the relevant land", rather than "between the parties who signed the instrument". This interpretation accords with s307, with property law practice, and with common sense, and means that we don't need to doubt the enforceability of land covenants created by easement against successors in title.