The Supreme Court has refused developer Big River Paradise Ltd leave to appeal against a Court of Appeal decision, upholding a decision of the High Court, that a subdivision proposed by Big River Paradise Ltd would breach a restrictive covenant in favour of a neighbouring property owner.

Big River Paradise ("Big River") had purchased a large parcel of land (about 190 hectares) on the banks of the Clutha River.

Restrictions placed on the title by the previous owner/subdivider meant that Big River was only entitled to divide the land into three lots with no more than one building on each lot.

Big River tried to get around the restrictions by applying to divide the land into 52 leasehold allotments, arguing that leasehold title meant it wasn't a "subdivision" of land under s 218(1)(a)(iii) Resource Management Act 1991 because the term of the lease was less than 35 years.

The Supreme Court has ruled that:

• Rig River's approach went against the plain ordinary meaning of the words of the covenant, and
• the purpose of the covenant - that is, to protect the neighbour's land from the consequences of a large scale subdivision of Big River's land - would be defeated if the subdivision were allowed.

Read the related article on restrictive covenants