A High Court judge has cleared the way for a Pauanui golf course to collect membership from a businessman who owns a property within a nearby gated community.
Hartley Vincent is a co-director of Harpers Fashions, which operates more than 20 women's clothes shops around the country.
The Vincent family trust is also the owner of property in the Lakes Resort, a gated community around a Pauanui golf course.
A covenant registered against this property says the land owner is to join the golf club, remain a member and meet all levies and charges by the club.
The golf club, according to the covenant, was to be set up as an incorporated society which would provide playing rights on the golf course.
But the entity now running the golf club, Lakes International Golf Management, is a company and not an incorporated society.
Lakes International Golf Management sent invoices to Vincent for $5070, representing three years of membership fees for the club.
These fees were not paid and Lakes International brought action against Vincent claiming them.
The businessman, however, resisted and argued that because Lakes International was not an incorporated society it was not entitled to enforce the covenant.
The dispute has already been to the Court of Appeal and last month the parties were back in the High Court at Auckland for the case.
Justice Paul Heath, in a decision released on Monday, said he was told during the hearing that the ability to recover levies from property owners in Lakes Resort (whose title had a covenant on the same terms) depended on the outcome of the Vincent action.
Lakes International, the Court of Appeal said last year, had also run into difficulties enforcing payment of the memberships fees from "many" of the other 39 Lakes Resort property owners caught by this covenant.
The company, and an associated firm, wanted a definitive ruling from Justice Heath so they could plan their business operations.
The judge, when considering the issue, said it was plain that anyone considering purchasing a Lakes Resort property would have contemplated the ability to use the golf course.
He believed Vincent's lawyer, Michael Fisher, had over-emphasised the differences between an incorporated society or a company running the golf club.
"The covenant includes a promise that the person acquiring the land will join the golf club and remain a member while owning the land. No doubt, any solicitor acting on the acting on the acquisition of such a property would make inquiry as to the nature of membership.
Undoubtedly, he or she would discover that the golf club had been incorporated as a limited liability company. In the unlikely event that that proved to be a 'deal breaker', the purchaser simply would not proceed with the transaction," said Justice Heath.
"In my view, the fact that the golf club was incorporated as a limited liability company, as distinct from an incorporated society, does not render the covenant unenforceable," he said.
While Justice Heath indicated he was prepared to make orders declaring that Vincent must join the golf course and pay outstanding fees, he sought submissions from both lawyers as to their exact form.
He awarded costs of the hearing to Lakes International.