Anascot Pty Ltd v Alcoa of Australia Ltd - [2017] WASCA 228

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: ANASCOT PTY LTD -v- ALCOA OF AUSTRALIA LIMITED [2017] WASCA 228

CORAM: MARTIN CJ
BUSS P
MURPHY JA

HEARD: 17 NOVEMBER 2017

DELIVERED : 22 DECEMBER 2017

FILE NO/S: CACV 21 of 2017

BETWEEN: ANASCOT PTY LTD
Appellant
AND
ALCOA OF AUSTRALIA LIMITED
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :ANASCOT PTY LTD -v- ALCOA OF AUSTRALIA LTD [2017] WASC 36
File No  :CIV 2377 of 2016

Catchwords:

Property law - Restrictive covenant - Application pursuant to s 129C(1) of the Transfer of Land Act 1893 (WA) to remove a restrictive covenant - Whether, pursuant to s 129C(1), restrictive covenant is 'obsolete', or is impeding reasonable user of land without securing practical benefits, or whether its proposed extinguishment will not substantially injure party entitled to benefit of covenant - Proper construction of registered restrictive covenant - Proper construction of s 129C of the Transfer of Land Act

Legislation:

Transfer of Land Act 1893 (WA), s 129C(1)(a), s 129C(1)(c)

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant: Mr D H Solomon
Respondent: Mr S K Dharmananda SC

Solicitors:

Appellant: Solomon Brothers
Respondent: Clayton Utz

Case(s) referred to in judgment(s):

Anascot Pty Ltd v Alcoa of Australia Ltd [2017] WASC 36
Ashoil Holdings Pty Ltd v Fassoulas [2005] NSWCA 80; (2005) 12 BPR 23,525
Big River Paradise Ltd v Congreve [2008] NZCA 78; 2 NZLR 402
Clay v Clay [1999] WASCA 8; (1999) 20 WAR 427
Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337
Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] QCA 9; [2012] 2 Qd R 511
Davidson v Elkington [2011] WASC 29
Driscoll v Church Commissioners for England [1957] 1 QB 330
Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] NSWCA 28; (2000) 10 BPR 18,099
Ferella v Otvosi [2005] NSWSC 962; (2005) 64 NSWLR 101
Frasers Lorne Pty Ltd v Burke [2008] NSWSC 743; (2008) 14 BPR 26,131
Gallagher v Rainbow [1994] HCA 24; (1994) 179 CLR 624
Greenwood v Burrows (1992) V ConvR 54‑444
Hare v Van Brugge [2013] NSWCA 74; (2013) 84 NSWLR 41
HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342
In Re Ghey & Galton's Application [1957] 2 QB 650
In Re Truman, Buxton & Co Ltd's Application [1956] 1 QB 261
Kort Pty Ltd v Shaw [1983] WAR 113
Long v Michie [2003] NSWSC 233
Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR 55‑116
Morpath Pty Ltd v ACT Youth Accommodation Group Inc (1987) 16 FCR 325
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
Panton v The Owners of Survey Strata Plan 46838 [2013] WASC 35
Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598
Prowse v Johnstone [2012] VSC 4
Re Alexandra [1980] VR 55
Re Application of Poltava Pty Ltd [1982] 2 NSWLR 161
Re Cook [1964] VR 808
Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925
Re Miscamble's Application [1966] VR 596
Re Pivotel Pty Ltd [2000] VSC 264
Re Robinson [1972] VR 278
Re Stani (Unreported, Full Court, VSC, 7 December 1976)
Ryan v Sutherland [2011] NSWSC 1397
Sertari Pty Ltd v Nirimba Developments Pty Ltd [2007] NSWCA 324; (2008) NSW ConvR 56‑200
Suhr v Michelmore [2013] VSC 284
Tujilo v Watts [2005] NSWSC 209; (2005) 12 BPR 23,257
Tulk v Moxhay (1848) LJ Ch 83
TZ Developments Pty Ltd v Rickman Pty Ltd (1993) 7 BPR 97,582
Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392
Vrakas v Registrar of Titles [2008] VSC 281
Webster v Bradac (1993) 5 BPR 12,032
Westfield Management Ltd v Perpetual Trustee Company Ltd [2007] HCA 45; (2007) 233 CLR 528
Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522
WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297
Zhang v ROC Services (NSW) Pty Ltd; National Transport Insurance by its manager NTI Ltd v Zhang [2016] NSWCA 370; (2016) 93 NSWLR 561

JUDGMENT OF THE COURT: This is an appeal against Master Sanderson's decision in Anascot Pty Ltd v Alcoa of Australia Ltd[1] (primary decision). That decision concerned an application by the appellant (Anascot) to remove a restrictive covenant registered over certain land of which it is the registered proprietor, and which it had granted for the benefit of neighbouring land owned by the respondent (Alcoa).
[1] Anascot Pty Ltd v Alcoa of Australia Ltd [2017] WASC 36.
The master dismissed the application, and Anascot has appealed against that decision.
For the reasons which follow, the appeal should be dismissed.

Background[2]

[2] The following background is taken from the findings made by the master in the primary decision, unless otherwise indicated.

As at 3 March 1988, Alcoa was the registered proprietor of certain land in Pinjarra which was subdivided into two lots known as Lot 1 and Lot 251. Alcoa has an aluminium refinery on the land in Lot 251.[3]
[3] Primary decision [4], [10].
On 3 March 1988, Anascot[4] and Alcoa entered into an agreement for the sale of Lot 1 to Anascot (land sale agreement).
[4] Then named Rhone-Poulenc Chimie Australia Pty Ltd.
Also on 3 March 1988, Anascot and Alcoa entered into an agreement which was to govern the setting up and operation of a gallium plant by Anascot on Lot 1 (general rights agreement). The function of the gallium plant was to extract and process gallium. Gallium cannot be extracted from Lot 1 without bayor liquor. Pursuant to the general rights agreement, it was agreed between Alcoa and Anascot that Anascot would transport bayor liquor from Alcoa's aluminium refinery on Lot 251 to the gallium plant on Lot 1 via a pipeline constructed on a portion of Lot 251.[5]
[5] Primary decision [4] - [5].
On 2 June 1988, a transfer of land for Lot 1 from Alcoa to Anascot was registered. The transfer contained a restrictive covenant, the terms of which are set out later in these reasons.
On 26 August 1988, an easement, granted by Alcoa in favour of Anascot, was registered over the portion of Lot 251 which contains the pipeline.[6]
[6] Primary decision [5].
On 14 August 1990, Anascot closed the gallium plant and sent Alcoa a notice of suspension recording its closure.[7]
[7] Primary decision [6].
On 13 November 2001, Anascot, GEO Specialty Chemicals Inc and Alcoa entered into the Pinjarra Gallium Extraction Agreement (extraction agreement), which provided for a new arrangement whereby Anascot could transport bayor liquor to Lot 1 via the pipeline. Notwithstanding the extraction agreement, Anascot has not transported any bayor liquor from Alcoa's aluminium refinery to the gallium plant (or any other gallium plant) since its closure on 14 August 1990.[8]
[8] Primary decision [7].
On 14 June 2002, Anascot and Alcoa entered into a deed. Clause 1 of the deed provides that in return for Anascot paying Alcoa $2,820,000, the 'contracts' (as defined) 'shall be terminated on the date of this deed'. The 'contracts' are defined in the preamble to include, amongst others, the land sale agreement and the general rights agreement.[9] All of the contracts (with the possible exception of the extraction agreement) were thereby terminated by cl 1 of the deed on 14 June 2002.[10]
[9] GB 124 - 125.
[10] Primary decision [8].

The restrictive covenant

The restrictive covenant on the registered transfer of Lot 1 from Alcoa to Anascot contained the following terms:[11]
[11] GB 48, 50.
(b) The Transferee [ie, Anascot] covenants for itself and its successors in title the registered proprietor or proprietors for the time being of [Lot 1] (collectively 'the Transferee') to the intent to bind [Lot 1] and for the covenants to run with [Lot 1] and for the benefit of the Transferor [ie, Alcoa] and the Transferor's Land that:
(1) [Lot 1] shall not be used, at any time, by the Transferee for any purpose other than to establish and operate facilities for:
(i) the extraction refining and processing of gallium and rare earths;
(ii) the manufacture or preparation of materials used to extract, refine or process gallium and rare earths but excluding the manufacture of nitric acid and sulphuric acid;
(iii) the production of any product produced by the use, as one of its feed stocks, of a pure gallium or rare earths compound …;
(iv) farming in lots of not less than one hundred and fifty hectares; and
(v) any other use of which prior written approval has been given by the Transferor;
(2) except for any pipeline and any related services and facilities to be constructed by the Transferee from the gallium plant to be erected on part of [Lot 1] to the Transferor's nearby alumina refinery on [Lot 251] and the railway spur from the Hotham Valley Railway to the gallium plant, no plant or facilities to be constructed on [Lot 1] by the Transferee shall, in whole or in part, encroach on that part of [Lot 1] as is shown coloured red ('the Red Land') on the diagram attached hereto and marked 'A' PROVIDED THAT at any time after the expiration of ten years from the date the Transferee shall have commissioned a rare earths facility on [Lot 1], the Transferee may establish evaporative ponds within the area of the Red Land, subject to the Transferee complying with and observing all of the requirements of all relevant statutory provisions and of any rules, regulations or by-laws made thereunder and the directions of any competent authority and upon first giving to the Transferor six months' prior written notice of its intention to do so, providing with that notice a detailed proposal; and
(3)no thorium waste will be permanently stored by the Transferee upon [Lot 1].
The 'Red Land' on the attached diagram was described as 'BUFFER ZONE 300 METRES WIDE'.[12]
[12] GB 46.
Although it is not critical to the disposition of this appeal, Anascot appeared to accept that a diagram attached to the land sale agreement indicated that the area of Lot 1 is 515.2108 hectares.[13] A similar diagram appears to be part of the restrictive covenant on the registered transfer.
[13] Appeal ts 31.
'Gallium', referred to in par (b)(1), is a rare, bluish white, easily fusible trivalent metallic element, used in high‑temperature thermometers. 'Thorium', referred to in par (b)(3), is a radioactive metallic element present in thorite and monazite, used in gas mantles, electrodes and nuclear fuel.[14]

Section 129C(1) of the Transfer of Land Act 1893 (WA)

[14] Macquarie Online Dictionary definitions of 'gallium' and 'thorium'.

As discussed below, Anascot applied for the restrictive covenant to be extinguished or discharged pursuant to s 129C(1) of the Transfer of Land Act 1893 (WA) (TLA).
Section 129C(1) of the TLA provides:
(1)Subject to subsection (1a), where land under this Act is subject to an easement or to any restriction arising under covenant or otherwise as to the user thereof or the right of building thereon, the court or a judge may from time to time on the application of any person interested in the land burdened or benefited, or any local government or public authority benefited, by the easement or restriction, by order wholly or partially extinguish, discharge or modify the easement or restriction upon being satisfied -
(a)that by reason of any change in the user of any land to which the easement or the benefit of the restriction is annexed, or of changes in the character of the property or the neighbourhood or other circumstances of the case which the court or a judge may deem material the easement or restriction ought to be deemed to have been abandoned or to be obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or
(b)that the persons of full age and capacity for the time being or from time to time entitled to the easement or to the benefit of the restriction whether in respect of estates in fee simple of any lesser estates or interests in the land to which the easement or to the benefit of the restriction is annexed have agreed to the same being wholly or partially extinguished, discharged or modified or by their acts or omissions may reasonably be considered to have abandoned the easement or to have waived the benefit of the restriction wholly or in part; or
(c)that the proposed extinguishment, discharge or modification will not substantially injure the persons entitled to the easement or to the benefit of the restriction.
(emphasis added)

Anascot's application

On 11 August 2016, Anascot applied by originating summons for the restrictive covenant in favour of Alcoa to be wholly extinguished or discharged pursuant to s 129C(1) of the TLA. Anascot contended, in effect, that the restrictive covenant should be removed because:
1.the restrictive covenant is 'obsolete' within the meaning of s 129C(1)(a) of the TLA; and/or
2.its continued existence 'would impede the reasonable user of [Lot 1] without securing practical benefits' to Alcoa within the meaning of s 129C(1)(a) of the TLA; and/or
3.the extinguishment would 'not substantially injure' Alcoa within the meaning of s 129C(1)(c) of the TLA.
Alcoa resisted the application. Both parties filed affidavits. There was no cross‑examination. Alcoa's affidavit material, as summarised by the master, was to the following effect. Alcoa conducts an aluminium refinery on Lot 251, and has done so at all material times. Alcoa maintains that the restrictive covenant is of benefit to Alcoa because it forms part of a buffer zone around its refinery, thus protecting the integrity of its plant and ensuring that complaints from neighbours are minimised.[15]
[15] Primary decision [10].
Anascot contended that the language of the restrictive covenant was determinative. It contended that following the decision in Westfield Management Ltd v Perpetual Trustee Company Ltd,[16] the evidence led by Alcoa about the activities on Lot 251 was irrelevant, and that the restrictive covenant must be read in isolation.[17]
[16] Westfield Management Ltd v Perpetual Trustee Company Ltd [2007] HCA 45; (2007) 233 CLR 528.
[17] Primary decision [11].
Anascot submitted that par (b)(1)(i) of the restrictive covenant provides unambiguously that Lot 1 cannot be used for any purpose other than to establish and operate facilities for the extraction, refining or processing of gallium or rare earths. Paragraph (b)(1)(v), however, allows for facilities to be established and operated for any other purpose approved by Alcoa. Anascot said that, accordingly, the purpose of the restrictive covenant is to ensure the continued operation of a gallium plant on Lot 1, whether used for the purpose in par (b)(1)(i), or some related use approved by Alcoa under par (b)(1)(v), or otherwise for facilities for farming in lots of at least 150 hectares under par (b)(1)(iv).[18]
[18] Primary decision [13]; appellant's submissions, par 11.
Alcoa accepted that the terms of the restrictive covenant were determinative of its scope and effect.[19] Alcoa submitted that the use of Lot 1 is restricted in every way save for those matters set out in the covenant itself, and that it matters not whether Anascot has ceased to use Lot 1 for a gallium plant. Alcoa submitted that the restrictive covenant applies irrespective of the operation of a gallium plant on Lot 1.[20] Alcoa contended that if the covenant was to be removed pursuant to s 129C(1) of the TLA, evidence was required as to the present use made of the dominant and subservient tenements with a view to establishing that the criteria set out in the section warranted the removal of the covenant.[21]
[19] Primary decision [11].
[20] Primary decision [14].
[21] Primary decision [11].

Primary decision

The master accepted that the terms of a restrictive covenant are determinative,[22] and concluded that Alcoa's interpretation of the restrictive covenant was correct. He said that the very purpose of a restrictive covenant is to prevent a party doing certain things on land. He said, in effect, that the restrictive covenant offers to the dominant tenement (ie, Lot 251) certain rights over use of the subservient tenement (ie, Lot 1), and the fact that gallium is no longer processed on Lot 1 is irrelevant.[23]
[22] Primary decision [12].
[23] Primary decision [15].
The master said that it is possible to imagine circumstances where the restrictive covenant might be removed under s 129C(1). The master referred to circumstances including where Alcoa stopped refining aluminium on its land, demolished the plant, and subdivided the land for farmlets or for housing. However, that was not this case.[24] The master said that Anascot did not challenge Alcoa's contentions referred to in [19] above.[25] He said that Alcoa clearly needs a buffer around its refinery operations and to remove the restraint on Lot 1 might well compromise its business. Accordingly, it could not be said that the restrictive covenant is obsolete or that for any other reason it ought to be removed.[26]
[24] Primary decision [16].
[25] Primary decision [10].
[26] Primary decision [17].

Appeal

The appellant's case contains five grounds of appeal.
Grounds one and two concern the master's treatment of Alcoa's affidavit evidence. In substance, they are to the effect that:
1.Anascot had objected to aspects of Alcoa's evidence. The master said that he would rule on the objections in giving reasons, but he failed to do so and, in consequence, he erred in finding that Anascot did not challenge Alcoa's contention that the restrictive covenant has, at all times, caused Lot 1 to form part of a buffer zone.
2.The master erred in failing to find that certain paragraphs of Alcoa's affidavit evidence were inadmissible to establish the original purpose of the restrictive covenant.
Ground three alleges that the master erred in law in holding that, properly construed, the original purpose of the restrictive covenant 'was to restrict every possible use of Lot 1 save for those uses expressly permitted by the Restrictive Covenant'. It is alleged that the master should have held that:
the original purpose of the Restrictive Covenant … was to ensure the use of Lot 1 for the development and operation of a gallium plant and related uses (whether used in the manner detailed in pars (b)(1)(i) ‑ (iii) of the Restrictive Covenant … or some related use approved by Alcoa), or otherwise for facilities for farming in lots of at least 150 hectares. (emphasis added)
Anascot contends that the master should have found that this was the original purpose of the restrictive covenant by reason of, in effect, one or more of the following:
1.if the original purpose of the restrictive covenant was to restrict all uses of Lot 1 unless specifically consented to by Alcoa, then permitting the development and operation of a gallium plant and related uses on Lot 1 was not required to be included in the restrictive covenant to achieve that original purpose, and pars (b)(1)(i) ‑ (iii) were otiose;
2.permitting the development and operation of a gallium plant and related uses on Lot 1 was inconsistent with the whole of Lot 1 forming part of a buffer zone for the ongoing benefit of Lot 251;
3.the sketch of Lot 1 annexed to the transfer shows only a small portion of Lot 1 as a 'buffer zone', and that is inconsistent with construing the restrictive covenant as having the original purpose of rendering the whole of Lot 1 as a buffer zone;
4.even in the portion of the sketch of Lot 1 annexed to the transfer marked 'buffer zone', the registered proprietor of Lot 1 is permitted by par (b)(2) of the restrictive covenant to construct and operate a pipeline and a railway spur, which is inconsistent with the whole of Lot 1 being a buffer zone; and
5.because the burden of a positive covenant on a purchaser does not run with the land, the only way for the owner of Lot 251 to achieve the object that Lot 1 be used and continued to be used by Anascot and its successors for a specific purpose was to register a restrictive covenant on the title of Lot 1 restricting all uses except for that specific purpose.

Ground four alleges, in effect, that the master erred in law to the extent that he held that a registered restrictive covenant will not be 'obsolete' under s 129C(1) of the TLA if its original purpose is no longer being achieved, but the person entitled to the benefit of the restrictive covenant is achieving some other, present, benefit. It is alleged that that construction is inconsistent with the purpose of s 129C(1) because its application results in a restrictive covenant which has in fact become obsolete not being held to be obsolete.
Ground five alleges that the master erred in fact and law in failing to find that the restrictive covenant should be held to be extinguished or discharged and ordered to be removed because:
1.it is obsolete;
2.further or in the alternative, it is impeding the reasonable user of Lot 1 without securing any practical benefits to Alcoa; and
3.further or in the alternative, its proposed extinguishment will not substantially injure Alcoa.

The parties' submissions

Anascot's submissions

Anascot's submissions in relation to grounds 1 and 2 effectively repeat the grounds.
In relation to ground three, Anascot submits that, in accordance with established principles, the restrictive covenant must be construed, and its purpose determined, in light of both its text and an objective consideration of context.[27] On this basis, Anascot submits that the restrictive covenant's original purpose was 'to ensure the use of Lot 1 for the development and operation of a gallium plant (whether used in the manner detailed in pars (b)(1)(i) ‑ (iii) of the Restrictive Covenant …, or some related use approved by Alcoa), or otherwise for facilities for farming in lots of at least 150 hectares'.[28] It is submitted, in effect, that this construction should be preferred to the master's construction of the restrictive covenant, irrespective of whether the master's construction was based solely on the language of the restrictive covenant or was in part based on the affidavit material referred to in grounds 1 and 2.[29]
[27] Appellant's submissions, par 15. Reference was made to various authorities including Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392 [51], [63] - [64]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [51]; Zhang v ROC Services (NSW) Pty Ltd; National Transport Insurance by its manager NTI Ltd v Zhang [2016] NSWCA 370; (2016) 93 NSWLR 561 [79]; WIN Corporation Pty Ltd v Nine Network Australia Pty Ltd [2016] NSWCA 297 [59]; Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 [16]; HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342 [134].
[28] Appellant's submissions, pars 11, 20, emphasis added.
[29] Appellant's submissions, par 21.
Anascot submits, in effect, that while the restrictive covenant must be construed in light of both its text and an objective consideration of the context, an objective consideration of the context does not permit recourse to 'inadmissible evidence of surrounding circumstances external to the Restrictive Covenant'.
In relation to the relevant textual considerations, Anascot submits, in effect, that by reason of one or more of points 1 ‑ 4 at [28] above, the master's construction of the restrictive covenant is inconsistent with the permissive language and effect of the transfer when read as a whole.[30]
[30] Appellant's submissions, par 17.
In relation to contextual considerations, Anascot submits that the following are material in construing the restrictive covenant to establish its original purpose:[31]
1.restrictive covenants registrable under s 129A of the TLA are only those supported by the equitable doctrine derived from Tulk v Moxhay;[32]
2.the burden of a positive covenant made by a purchaser does not run with the land;
3.a restrictive covenant must be designed to protect the value of land other than the land of the covenantor, and is only enforceable to preserve the value of that other land;
4.the benefit of the restrictive covenant in this case is therefore annexed to Lot 251 as an added incident of the title to Lot 251;
5.it was not possible to register a restrictive covenant annexing to the title of Lot 251 the benefit of a positive obligation attached to the title of Lot 1 obliging the covenantor and registered proprietor for the time being of Lot 1 to develop and use Lot 1 as and for the operation of a gallium plant or related uses detailed in pars (b)(1)(i) ‑ (iii) of the restrictive covenant;
6.the effect of the presumption of regularity[33] is that it is to be inferred that the restrictive covenant, including the uses permitted by the exceptions in pars (b)(1)(i) ‑ (iii), was designed to protect the value of Lot 251, because of the rule referred to in 3 above; and
7.by reason of the rule referred to in 2 above, the only way in which the value referred to in 6 could be annexed to Lot 251 was by registering a restrictive covenant which prohibited all uses of Lot 1 except specified exceptions.
[31] Appellant's submissions, par 18.
[32] Tulk v Moxhay (1848) LJ Ch 83.
[33] Clay v Clay [1999] WASCA 8; (1999) 20 WAR 427 [56].
By reason of these contextual matters, Anascot says that an obvious purpose of the restrictive covenant was to achieve, as nearly as possible, a result that, for legal reasons, cannot be achieved, namely the 'burden of a positive covenant running with the land'.[34]
[34] Appellant's submissions, par 19, emphasis added.
In relation to ground four, Anascot submits, in effect, that it is not clear whether the master determined that it was the 'original purpose' of the restrictive covenant, or a 'present benefit' being obtained by Alcoa from the restrictive covenant, that the whole of Lot 1 was to form part of a buffer zone.[35] Ground four applies to the extent that the master found that the use of Lot 1 as a buffer zone was a present benefit, and not part of the original purpose of the restrictive covenant.[36]
[35] Appellant's submissions, par 22.
[36] Appellant's submissions, par 23.
Anascot made a number of general observations as to the proper approach to the construction of legislation. Amongst other things, Anascot submits that the purpose of s 129C of the TLA is to make provision as to the circumstances in which a registered restrictive covenant may be extinguished or discharged by order of the court. If and to the extent that the benefit of a registered restrictive covenant is a fundamental right to which the principle of legality applies, s 129C confers jurisdiction on the court to interfere with that right where the prescribed circumstances exist. Anascot says, however, that the powers conferred by s 129C are better analysed as a defining element of a registered restrictive covenant in that, from the time of registration, it is always liable to be extinguished, discharged or modified under s 129C, and the rights of persons entitled to the benefit of a registered restrictive covenant are limited by the powers conferred by s 129C. Hence, Anascot submits that s 129C of the TLA does not interfere with fundamental rights in the sense referred to in the principle of legality.[37]
[37] Appellant's submissions, par 33.
The purpose of these submissions appeared to be directed to the proposition that, at least with respect to the word 'obsolete' in s 129C(1)(a) of the TLA, the relevant inquiry is directed to the original purposes of the restrictive covenant on its proper construction, without regard to extrinsic evidence.[38]
[38] Appellant's submissions, pars 34 - 37.
Anascot submits that the word 'obsolete' in s 129C(1)(a) must necessarily refer to the original object and purpose of a restrictive covenant, and not to some other purpose or object to be ascertained from extrinsic material or subsequent dealings.[39] Anascot refers in this regard to the meaning given to the word 'obsolete' by Romer LJ in In Re Truman, Buxton & Co Ltd's Application[40] in analogous English predecessor legislation.[41] Anascot submits that it would be inconsistent with the clear meaning of s 129C, and contrary to public policy, to hold that, even if the original object of a restrictive covenant is obsolete, a covenantee may rely on some form of collateral benefit that is beyond the benefit conferred by the language of the restrictive covenant.[42] Anascot submits that the observations of Pagone J in Suhr v Michelmore[43] to the contrary effect should not be followed.[44]
[39] Appellant's submissions, par 41.
[40] In Re Truman, Buxton & Co Ltd's Application [1956] 1 QB 261. See [72] later in these reasons.
[41] Appellant's submissions, par 36.
[42] Appellant's submissions, pars 41 - 42.
[43] Suhr v Michelmore [2013] VSC 284 [24].
[44] Appellant's submissions, pars 40, 43.
Anascot submits, in effect, that the original purpose of the restrictive covenant, on its proper construction, can no longer be achieved or fulfilled, and the restrictive covenant is thereby 'obsolete' under s 129C(1)(a).
In summary, Anascot's case on s 129C(1)(a) of the TLA is, in effect, as follows:
1.The original purpose of the restrictive covenant, on its proper construction, is to give permission for, or to facilitate, the construction and operation of the gallium plant on Lot 1.
2.Once the prospect of constructing and operating a gallium plant on Lot 1 is removed (as is the case on the facts), then the original purpose of the restrictive covenant cannot be effectuated and it should, accordingly, be deemed to be 'obsolete' within the meaning of s 129C(1)(a) of the TLA.[45]
[45] Appeal ts 11 - 12.
In relation to ground five, Anascot submits, in effect, that the master should have reached one or more of the conclusions at [30] above by reason of the matters referred to in grounds 1 ‑ 4, the uncontested evidence that the gallium plant ceased operations years ago, and Alcoa's subsequent reliance on the restrictive covenant for the purpose of rendering the whole of Lot 1 a buffer zone.[46]
[46] Grounds of appeal, pars 5.1 - 5.3.
Anascot's contentions with respect to the restrictive covenant being deemed to be 'obsolete' within the meaning of s 129C(1)(a) of the TLA have been summarised above. It was accepted by Anascot that if the restrictive covenant, on its proper construction (without recourse to extrinsic evidence), were to continue to serve any original purpose beyond the one identified by Anascot in its submissions, then on the authorities there would be insurmountable difficulties in contending that the restriction should be deemed to be 'obsolete' within the meaning of s 129C(1)(a) of the TLA.[47]
[47] Appeal ts 12, 14.
Next, in relation to its contention that the continued existence of the restrictive covenant 'would impede the reasonable user of the land without securing practical benefits to other persons' for the purposes of s 129C(1)(a) of the TLA, Anascot's contentions are to the following effect.
Anascot says that, for extinguishment, it is not sufficient merely to show that the continued existence of the covenant would impede a particular reasonable use which is proposed by the applicant, but that the applicant must show that the restriction would impede 'all reasonable uses'.[48] In that regard, Anascot referred to Suhr at [28] and Vrakas v Registrar of Titles.[49]
[48] Appellant's submissions, par 45.
[49] Vrakas v Registrar of Titles [2008] VSC 281 [29].
Anascot also relies on a number of authorities which have applied the observations of Lord Evershed MR (Morris & Pearce LJJ agreeing) in In Re Ghey & Galton's Application[50] where his Lordship referred, amongst other things, to the significance of the purpose of the restrictive covenant in this context.
[50] In Re Ghey & Galton's Application [1957] 2 QB 650, 663; Re Stani (Unreported, Full Court, VSC, 7 December 1976), 8; Re Alexandra [1980] VR 55, 58; see also Re Miscamble's Application [1966] VR 596, 603.
Anascot submits, in effect, that the continuance of the restrictive covenant hinders, to a real and sensible degree, the land being reasonably used for all reasonable uses.[51] Further, it submits that the master should have found that 'practical benefits' should be construed as limited to practical benefits which are conferred by the original purpose of the restrictive covenant, ascertained from the text and context. On that basis, it says that the only practical benefit which Alcoa could now achieve would be its ability to sell and deliver bayor liquor to the gallium plant. As Alcoa is not supplying bayor liquor to the gallium plant, Anascot contends that the master should have found that Alcoa is not obtaining any 'practical benefits' within the meaning of s 129C(1)(a) from the restrictive covenant.[52]
[51] Appellant's submissions, pars 45 - 47.
[52] Appellant's submissions, par 50.
In relation to its case under s 129C(1)(c) of the TLA, Anascot refers to the principles outlined in Re Cook[53] and Panton v The Owners of Survey Strata Plan 46838.[54]
[53] Re Cook [1964] VR 808, 810.
[54] Panton v The Owners of Survey Strata Plan 46838 [2013] WASC 35 [89]; appellant's submissions, par 53.
Anascot submits that s 129C(1)(c) requires an assessment as to whether any harm will be caused to Alcoa by the extinguishment or discharge of the restrictive covenant itself, and that that assessment is to be done by reference to the original purpose and object of the restrictive covenant. It is submitted that a comparison is required between the permitted and prohibited uses of Lot 1 under the restrictive covenant in its existing terms, and what the permissible uses would be if the restrictive covenant was extinguished.[55]
[55] Appellant's submissions, pars 52 - 53.
In this case, Anascot submits that, as Alcoa is not obtaining any practical benefits from the restrictive covenant properly construed, its extinguishment or discharge will not 'substantially injure' Alcoa within the meaning of s 129C(1)(c).[56]
[56] Appellant's submissions, par 55.

Disposition

Restrictive covenants

A brief, but convenient, broad historical overview of the law of restrictive covenants was outlined by Bryson J in Gosford RSL Club Ltd v Gosford Race Club Ltd.[57] His Honour said:[58]
Restrictive covenants are an exception to the law of contract and the pre‑existing land law and when they were recognised as equitable interests in land, recognition was limited to burdens and restrictions and did not extend to operation to impose positive obligations, such as covenants to repair or positively to carry on any activity. The perception is that the covenantee excepted the benefit of the covenant from the transfer, and that the transferee did not ever acquire the right to do what is restricted; that right is still in the transferor, who owns it. A positive obligation to perform some service is outside the limit of what courts of equity have been prepared to treat as proprietary interests in the burdened land and to protect by remedies appropriate to proprietary interests. There are exceptions where there is statutory authorisation for covenants imposing obligations to pay money or other positive obligations. The law was established by decisions of the Court of Appeal of England in Haywood v Bunswick Permanent Benefit Building Society (1881) 8 QBD 403 and Marquess of Zetland v Driver [1939] 1 Ch 1; see Farwell J at 8: 'No affirmative covenant requiring the expenditure of money or the doing of some act can ever be made to run with the land.'
Although the difference is usually obvious it is not always easy to discern whether a covenant is positive or restrictive. The substance of a covenant is considered. There is no difference in substance between a covenant which says that land is to be used only for a stated purpose and a covenant which says it is not to be used for any other purpose; the assumption should be made that the land will be used and a covenant to use it only for a stated purpose is a restriction in substance. Tulk v Moxhay exemplifies this. (emphasis added)

The approach to construction of a restrictive covenant in a registered instrument

[57] Gosford RSL Club Ltd v Gosford Race Club Ltd (Unreported, NSWSC, 18 December 1997; BC9707073).

[58] Gosford RSL Club (34 ‑ 36).

In Westfield,[59] the High Court said, in relation to the question of the proper construction of a registered easement, that rules of evidence assisting the construction of contracts inter partes, of the nature explained by authorities such as Codelfa Construction Pty Ltd v State Rail Authority (NSW),[60] had no application. The court rejected the statement by McHugh J in Gallagher v Rainbow[61] that the principles of construction that have been adopted in respect of the grant of an easement at common law are equally applicable to the grant of an easement in respect of land under the Torrens system. The court said:[62]
The third party who inspects the Register cannot be expected, consistently with the scheme of the Torrens system, to look further for extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing and placing the third party (or any court later seized of a dispute) in the situation of the grantee.
[59] Westfield [37].
[60] Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337, 350 ‑ 352.
[61] Gallagher v Rainbow [1994] HCA 24; (1994) 179 CLR 624, 639 - 640.
[62] Westfield [39].
The High Court added that, in the absence of argument to the contrary, it may be accepted that evidence is admissible 'to make sense of that which the Register identifies by the terms or expressions found therein'. An example would be the surveying terms and abbreviations appearing on the Deposited Plan.[63]
[63] Westfield [44].
Both parties in this appeal appear to have accepted that the High Court's observations in Westfield, referred to above, regarding rejection of extrinsic evidence as an aid to the proper construction of a registered easement, applied equally to the proper construction of the restrictive covenant in this case.[64]
[64] Cases which have considered the application of the High Court's observations in Westfield to restrictive covenants include Ryan v Sutherland [2011] NSWSC 1397 [10]; Big River Paradise Ltd v Congreve [2008] NZCA 78; 2 NZLR 402 [16] ‑ [23]; Prowse v Johnstone [2012] VSC 4 [57]; Suhr [6] ‑ [17]; Panton [34] - [36].
Neither party suggested that this case called for a consideration of the admissibility of any evidence of the kind referred to by the High Court in [54] above, namely 'to make sense of that which the Register identifies by the terms or expressions found therein'.
Nor did the parties suggest that the restrictive covenant should be construed by reference to extrinsic evidence concerning the physical characteristics of the dominant and servient tenements.[65]
[65] cf Sertari Pty Ltd v Nirimba Developments Pty Ltd [2007] NSWCA 324; (2008) NSW ConvR 56‑200 [15] ‑ [16]; Hare v Van Brugge [2013] NSWCA 74; (2013) 84 NSWLR 41 [15] ‑ [18]. See also Currumbin Investments Pty Ltd v Body Corp Mitchell Park Parkwood CTS [2012] QCA 9; [2012] 2 Qd R 511 [48] ‑ [49].
A restrictive covenant may, properly construed, indicate that the restriction is intended (objectively) to fulfil a number of purposes: Long v Michie;[66] Greenwood v Burrows;[67] Post Investments Pty Ltd v Wilson.[68] Further, the object or purpose of a restriction in a restrictive covenant may, properly construed, be seen to serve an immediate object or purpose, as well as securing a broader or wider purpose. In a context such as the present, the relevant purpose or object of the covenant, properly construed, is not limited to the narrow, more immediate purpose or object: Re Mason and the Conveyancing Act.[69]

The proper construction of the restrictive covenant in this case

[66] Long v Michie [2003] NSWSC 233 [36].

[67] Greenwood v Burrows (1992) V ConvR 54‑444, 65,194, 65,197.

[68] Post Investments Pty Ltd v Wilson (1990) 26 NSWLR 598, 641.

[69] Re Mason and the Conveyancing Act (1960) 78 WN (NSW) 925, 927 ‑ 928.

In substance, there are three distinct but related elements of the restrictive covenant on the title to Lot 1, as follows.
The first, par (b)(1), is to the effect that Lot 1 shall not be used for any purpose other than:
(i)to establish and operate facilities for the extraction, refining and processing of gallium and rare earths;
(ii)to establish and operate facilities for the manufacture or preparation of materials used to extract, refine or process gallium and rare earths (but excluding the manufacture of nitric and sulphuric acid);
(iii)to establish and operate facilities for the production of any product produced by the use, as one of its feed stocks, of a pure gallium or rare earths compound;
(iv)for farming in lots of not less than 150 hectares;[70] and
(v)for any other use of which prior written approval has been given by Alcoa.
[70] This particular aspect of construction appeared to be accepted by Anascot: appeal ts 9 - 10.
The second, par (b)(2), is to the effect that, in relation to the strip of land in Lot 1 referred to as the 'Red Land' and described as 'BUFFER ZONE 300 METRES WIDE':
(i)no plant or facilities otherwise permissible under par (b)(1) is to encroach on that strip of Lot 1, save as allowed under (ii) or (iii) below;
(ii)any pipeline and related services and facilities to be constructed by Anascot from its gallium plant to Alcoa's nearby alumina refinery, and the railway spur from the Hotham Valley Railway to the gallium plant, may encroach, in whole or in part, on that strip of Lot 1; and
(iii)further, after the expiration of 10 years from the date on which Anascot has commissioned a rare earths facility on Lot 1, Anascot may establish evaporative ponds within that strip of Lot 1, subject to complying with all regulatory requirements and giving Alcoa six months' prior written notice and a detailed proposal.
The third, par (b)(3), is to the effect that no thorium waste is to be permanently stored by Anascot on Lot 1.
Contrary to Anascot's submissions,[71] the reference in par (b)(1)(v) to 'any other use' ought not be read down to mean 'any other related use'. There is no warrant for reading down the language of par (b)(1)(v) on the text of that provision, or when that provision is read within the context of the restrictive covenant as a whole. Moreover, it is plain from par (b)(2) of the restrictive covenant that the parties expressly used the word 'related' where that was intended.
[71] Appeal ts 44.
It is evident, from its terms, that the restrictive covenant operates to preclude any use or development of Lot 1, save for the permissible purposes under par (b)(1) and, even then, to further limit[72] the use to which Lot 1 may be put by imposing additional restrictions on development on the 'Red Land' strip of Lot 1, and precluding[73] permanent storage of thorium waste on Lot 1.
[72] By par (b)(2).
[73] By par (b)(3).
The effect of the restrictive covenant, read as a whole, is to limit substantially the scope for development and use of Lot 1, thereby securing the principal purposes or objects of:
1.preserving and controlling the degree of privacy enjoyed by Lot 251, at least insofar as that land is used for operating an alumina refinery; and
2.reducing the scope for nuisance and related complaints so as to facilitate the use and enjoyment of the land in Lot 251 for the operation of an alumina refinery.
A further, incidental, purpose served in particular by par (b)(3) is to preserve, in a broad sense, the amenity of Lot 251 (notwithstanding its own industrial use) by precluding the permanent storage of radioactive waste on neighbouring land, despite the permitted user of the land on Lot 1 for refining and processing gallium and rare earths.

Onus under s 129C(1) of the TLA

The onus is on the applicant to establish at least one of the relevant elements in s 129C(1) of the TLA, and if it succeeds in doing that, the making of the orders sought is discretionary: Kort Pty Ltd v Shaw;[74] see also Re Stani;[75] Tujilo v Watts[76] and Ferella v Otvosi.[77] If the evidence suggests that the purpose of the restriction,[78] or one of its purposes,[79] is still capable of fulfilment, the onus on the applicant has not been discharged.

The use of extrinsic evidence in determining the original purpose of the restrictive covenant in connection with s 129C(1) of the TLA

[74] Kort Pty Ltd v Shaw [1983] WAR 113, 114 - 115.

[75] Re Stani (7).

[76] Tujilo v Watts [2005] NSWSC 209; (2005) 12 BPR 23,257 [36].

[77] Ferella v Otvosi [2005] NSWSC 962; (2005) 64 NSWLR 101 [28].

[78] TZ Developments Pty Ltd v Rickman Pty Ltd (1993) 7 BPR 97,582, 14,610 ‑ 14,611.

[79] Greenwood (65,197); Re Mason (927 ‑ 928).

As noted below, the original purpose of the restriction in the restrictive covenant is, amongst other things, relevant to the question of whether the restriction should be deemed to be 'obsolete' within the meaning of s 129C(1)(a) of the TLA.
The parties were at odds on the question of the admissibility of extrinsic evidence as to original purpose in relation to the application of s 129C(1) of the TLA. Anascot contends, in effect, that the purpose(s) or object(s) of the registered restrictive covenant are to be ascertained exclusively from the terms of the written instrument on its proper construction (excluding extrinsic evidence in the case of a registered instrument). Alcoa, on the other hand, contends that extrinsic evidence is admissible in ascertaining the original purpose(s) or object(s) of the restrictive covenant for the purposes of an application under s 129C(1) of the TLA, albeit not for 'constru[ing] the meaning of the words used in a restrictive covenant'.[80]
[80] Respondent's submissions, par 6(a). Alcoa refers in this regard to Suhr [20]. See also, for example, Re Application of Poltava Pty Ltd [1982] 2 NSWLR 161, 170; Edgeworth, B, Butt's Land Law (7th ed) [10.870].
It is difficult to see why, on the proper construction of s 129C(1) of the TLA, evidence of mutually known surrounding circumstances prior to the grant of a restrictive covenant in a registered instrument would be inadmissible on the question of original purpose in this context, at least where the suggested original purpose to be inferred from such evidence is not inconsistent with the scope and effect of the restriction in the registered covenant on its proper construction without regard to such evidence.
Nevertheless, the point is a moot one in this case because, for reasons to be developed, Anascot cannot succeed in this appeal even accepting its submissions as to the inadmissibility of extrinsic evidence concerning original purpose. Accordingly, these reasons proceed on the basis (favourably to Anascot but without deciding) that, with regard to the application of s 129C(1)(a) and (c) of the TLA, the purpose(s) or object(s) of the restrictive covenant are to be ascertained exclusively from the terms of the registered instrument, without regard to extrinsic circumstances.

Whether the restrictive covenant ought to be deemed to be 'obsolete' under s 129C(1)(a) of the TLA

As noted earlier, Anascot relies on the observations of Romer LJ (Birkett LJ & Evershed MR agreeing) in the case of In Re Truman. In that case, his Lordship said:[81]
It seems to me that the meaning of the term 'obsolete' may very well vary according to the subject‑matter to which it is applied. Many things have some value, even though they are out of date in kind or in form - for example, motor‑cars or bicycles, or things of that kind - but here we are concerned with its application to restrictive covenants as to user, and these covenants are imposed when a building estate is laid out, as was the case here of this estate in 1898, for the purpose of preserving the character of the estate as a residential area for the mutual benefit of all those who build houses on the estate or subsequently buy them.
It seems to me that if, as sometimes happens, the character of an estate as a whole or of a particular part of it gradually changes, a time may come when the purpose to which I have referred can no longer be achieved, for what was intended at first to be a residential area has become, either through express or tacit waiver of the covenants, substantially a commercial area. When that time does come, it may be said that the covenants have become obsolete, because their original purpose can no longer be served and, in my opinion, it is in that sense that the word 'obsolete' is used in section 84(1)(a) [of the relevant English statute]. (emphasis added)
[81] In Re Truman (271 - 272).
Cases which have adopted those observations in this context include Driscoll v Church Commissioners for England;[82] Re Alexandra;[83] Re Miscamble's Application[84] and Re Robinson.[85]
[82] Driscoll v Church Commissioners for England [1957] 1 QB 330, 345 (Hodson LJ), 349 (Morris LJ).
[83] Re Alexandra (58).
[84] Re Miscamble's Application (603).
[85] Re Robinson [1972] VR 278, 281.
On the other hand, Alcoa contends, in effect, that the language of 'obsolete' in s 129C(1)(a) also conveys the notion of the restriction serving no present useful purpose.[86] Reference is made to the decision of Mason P (Stein JA agreeing) in Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd[87] and Davidson v Elkington.[88] In Suhr, Pagone J appeared to accept the possibility that a restriction may not be 'obsolete' within the meaning of the relevant provision if it provides a continuing benefit to persons by maintaining a restriction on the user of land, notwithstanding the fact that the purpose for which it was designed has since become wholly obsolete.[89] That view appears to be consistent with the view expressed by Denning LJ in Driscoll,[90] although Hodson & Morris LJJ in Driscoll applied the observations of Romer LJ in In Re Truman.
[86] Respondent's submissions, par 9.
[87] Durian (Holdings) Pty Ltd v Cavacourt Pty Ltd [2000] NSWCA 28; (2000) 10 BPR 18,099 [3].
[88] Davidson v Elkington [2011] WASC 29 [65]; cf Ashoil Holdings Pty Ltd v Fassoulas [2005] NSWCA 80; (2005) 12 BPR 23,525 [40], [63]; see also the cases referred to by Edgeworth B, Butt'sLand Law (7th ed) [10.870].
[89] Suhr [24].
[90] Driscoll (341).
For the purposes of the disposition of this appeal, it is sufficient to proceed on the basis that, in accordance with the observations of Romer LJ in In Re Truman, a restriction ought to be deemed to be 'obsolete' if its original purpose can no longer be served.
As noted in [65] above, it is evident that the principal purposes or objects of the restrictive covenant, read as a whole, are to:
1.preserve and control the degree of privacy enjoyed by Lot 251, at least insofar as that land is used for operating an alumina refinery; and
2.reduce the scope for nuisance and related complaints so as to facilitate the use and enjoyment of the land in Lot 251 for the operation of an alumina refinery.
Accordingly, even if there is no possibility of Lot 1 being used in the future for facilities concerning gallium and rare earths, the removal of that possibility leaves unaffected the covenant operating to serve its original purposes or objects. It will continue to preclude any development on Lot 1, including on the 'Red Land' strip, other than for farming in lots of a minimum, specified, size, without the prior approval of Alcoa, and thereby continue to serve the objects or purposes referred to above.
It follows that Anascot has not shown, in this case, that the restriction in the restrictive covenant ought to be deemed to be 'obsolete' within the meaning of s 129C(1)(a) of the TLA.

Whether the continued existence of the restriction would impede Anascot's reasonable user of lot 1 without securing any practical benefits to Alcoa for the purposes of s 129C(1)(a) of the TLA

As noted earlier, Anascot contends that it was required to show that the continued restriction will impede all reasonable uses of Lot 1.[91] It also contends, in effect, that the observations of Lord Evershed MR in In Re Ghey are applicable in this context. In In Re Ghey, Lord Evershed MR said:[92]
I am not attempting an exposition of this section which would, so to speak, replace the parliamentary language by the language of my judgment. But I think it must be shown, in order to satisfy this requirement, that the continuance of the unmodified covenants hinders, to a real, sensible degree, the land being reasonably used, having due regard to the situation it occupies, to the surrounding property, and to the purpose of the covenants. (emphasis added)
[91] cf Morpath Pty Ltd v ACT Youth Accommodation Group Inc (1987) 16 FCR 325, 339 ‑ 341; TZ Developments (14,610); Edgeworth B, Butt's Land Law (7th ed) [10.880].
[92] In Re Ghey (663).
Anascot has not established that, in light of the permitted use for farming in par (b)(1)(iv) of the restrictive covenant, the continuation of the restriction hinders to a real and sensible degree, Lot 1 being reasonably used, having regard to its situation, the surrounding property (including Lot 251) and to the purposes of the restrictive covenant properly construed.
Further, and in any event, Anascot has failed to establish that the continued restriction would impede the reasonable user of the land 'without securing practical benefits to other persons' within s 129C(a)(a) of the TLA. In Re Robinson (a decision referred to by Anascot without criticism), Adam J said:[93]
The test of practical benefit, it seems clear enough, is not merely whether if the covenant is modified or discharged there would be any depreciation in the sale value of land benefited by it. The notion of practical benefit goes much further than that ... [I]t [is] clear that if there is some real benefit to the person entitled to the restrictive covenant, then to deprive him of it is to deprive him of some practical benefit. And the right of a person to have preserved amenities for what he reasonably considers to be amenities for his projects is a right, the deprivation of which deprives him of a practical benefit.
[93] Re Robinson (283); see also Re Pivotel Pty Ltd [2000] VSC 264 [36]; Vrakas [30].
That aspect of the decision in Re Robinson provides, with respect, useful guidance to the approach to be taken to the question of 'practical benefits' in the application of s 129C(1)(a) of the TLA. It has been adopted in Panton;[94] Re Pivotel Pty Ltd[95] and Vrakas.[96]
[94] Panton [149].
[95] Pivotel [36].
[96] Vrakas [30].
There can be no doubt that the restrictive covenant secures practical benefits to Alcoa insofar as it continues to secure the principal objects and purposes referred to earlier. See also [88] ‑ [91] below.

Whether the proposed extinguishment will not substantially injure the persons entitled to the benefit of the restriction under s 129C(1)(c) of the TLA

As noted earlier, in relation to its case under s 129C(1)(c) of the TLA, Anascot refers to the principles outlined in Re Cook[97] and Panton.[98]
[97] Re Cook (810).
[98] Panton [89].
In Re Cook, Gillard J said:[99]
It seems to me that in order to succeed under [the equivalent of s 129C(1)(c) of the TLA] the applicant cannot establish his case by merely proving that there will be no appreciable injury or depreciation in value of the property to which the covenant is annexed … It should be noted that in paragraph (c) the emphasis is on the injury suffered by the persons entitled to the benefit. From the nature of the proprietary right arising from the restrictive covenant clearly the injury must occur in relation to the person's enjoyment of his property. Such injury can only be properly assessed by a comparison between the benefits intended to be conferred and actually conferred by the covenant initially on the persons entitled thereto and the resultant benefits, if any, remaining to such persons after the covenant has been modified. If from the evidence it appears that the difference between the two will not be substantial, then the applicant will have established a case for the exercise of the Court's discretion under paragraph (c). In order to make this comparison it is proposed to consider what benefits the covenant over the subject land may have conferred upon the persons entitled thereto, and then to assess whether the modification of such covenant would or would not substantially diminish the benefits so discovered. (emphasis added)
[99] Re Cook (810 - 811).
The word 'substantial' denotes 'an injury which has present substance; that is to say, not a theoretical injury but something which is real and which has a present substance': Re Mason;[100] see also Tujilo[101] and Panton.[102]
[100] Re Mason (928).
[101] Tujilo [37].
[102] Panton [87].
In Mogensen v Portuland Developments Pty Ltd,[103] McLelland J said (with reference to the equivalent provision in the New South Wales statute):
The kind of injury contemplated in the section is injury to the relevant person in relation to his ownership of (or interest in) the land benefited. The injury may be of an economic kind, eg reduction in the value of the land benefited, or of a physical kind, eg subjection to noise or traffic, or of an intangible kind, eg impairment of views, intrusion upon privacy, unsightliness, or alteration to the character or ambience of the neighbourhood. These arbitrary categories, while serving to illustrate the ambit of the concept of injury for the purposes of the section, are neither mutually exclusive nor necessarily exhaustive, and what I have described as injuries of a physical or intangible kind could well also affect the value of the land in question. However it is clear that a person may be 'substantially injured' within the meaning of sec 89(1)(c) notwithstanding that the value of his land would be unaffected or even increased by the proposed modification …
It is also clear, particularly in the case of injuries of what I have called an intangible kind, that the subjective tastes, preferences or beliefs of particular individuals may, within limits of reasonableness, give rise to injury in the relevant sense to those individuals[.]
[103] Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR 55‑116, 56,856; Webster v Bradac (1993) 5 BPR 12,032, 12,035; Tujilo [38]; Panton [87] ‑ [88].
In practical terms, in the long run, the test to be applied is not dissimilar to that to be applied in determining, under s 129C(1)(a), whether the continued existence of the restriction would secure 'practical benefits' to other persons: Re Stani;[104] Re Alexandra;[105] Frasers Lorne Pty Ltd v Burke.[106]
[104] Re Stani (10).
[105] Re Alexandra (60).
[106] Frasers Lorne Pty Ltd v Burke [2008] NSWSC 743; (2008) 14 BPR 26,131 [28].
The master found, relevantly in this context, that:[107]
Although it was not really argued by [Anascot] that looking at the present use made by [Alcoa] of its land the restrictive covenant should be removed I should deal briefly with the issue for the sake of completeness. As I have indicated [Alcoa] filed extensive affidavit material attempting to demonstrate why the restraint on Lot 1 had to be maintained. The evidence is overwhelming. Clearly [Alcoa] needs a buffer around its refinery operations and to remove the restraint on Lot 1 might well compromise its business. In no sense could it be said the restrictive covenant is obsolete or that for any other reason it ought be removed. (emphasis added)
[107] Primary decision [17].
There was ample evidence to support that finding of fact.[108]
[108] See, eg, affidavit of A Richardson sworn 24 October 2016, pars 60 - 63 (GB 199 - 200); affidavit of S Pascoe sworn 24 October 2016, pars 15 - 51 (GB 386 - 390). As noted later in these reasons, the master did not use this evidence to establish the original purpose of the restrictive covenant.

The master's reference to 'a buffer around [Alcoa's] refinery operations' is evidently a shorthand description for the nature of the benefits conferred on Alcoa by the restrictive covenant operating to secure the principal purposes or objects referred to in [65] above. The extinguishment of the restrictive covenant would substantially injure Alcoa in that the extinguishment would substantially diminish, if not effectively eliminate, such benefits to Alcoa.
The master correctly found that Anascot had not established a claim for relief under s 129C(1)(c) of the TLA.

The grounds of appeal

With respect to the particular grounds of appeal relied on by Anascot, the following observations may be made.
As to ground 1, any error in the master not dealing with Anascot's objections to Alcoa's evidence is immaterial. That is so for three related reasons. First, the master did not use Alcoa's evidence for the purpose of construing the restrictive covenant generally, or particularly for the purpose of ascertaining the original purposes or objects of the restrictive covenant. Secondly, ground 1 proceeds on the erroneous assumption that at [10] of the primary decision, the master held that Anascot did not challenge Alcoa's contention that, at all material times, the restrictive covenant has operated to cause the whole of Lot 1 to form part of a buffer zone around Lot 251. The master did not make that finding. What he said was that Alcoa's evidence indicated that Alcoa maintains that the restrictive covenant is of benefit to it because it operates to form part of a buffer zone. That was correct. Alcoa did maintain that position before the master. Thirdly, the master's reference to a 'buffer zone' is, in context, no more than a shorthand description of the effect of the restrictive covenant on its proper construction as outlined in [65] above. Ground 1 should be dismissed.
Ground 2 should be dismissed. The master did not use the evidence for the inadmissible purpose alleged.
Ground 3 should be dismissed. The proper construction of the restrictive covenant is set out in [59] ‑ [66] above. The restriction provided for is, plainly, both negative in form and in substance. The suggestion that it is intended (objectively) to operate as a positive covenant burdening the land on Lot 1 so as to 'ensure' that Lot 1 is used for the development of a gallium plant is inconsistent with the terms of the restrictive covenant, including, in particular, the restriction on use save for farming in lots of a minimum size. Further, the description of 'BUFFER ZONE' in the diagram attached to the restrictive covenant on the registered transfer indicates that the 'Red Land' in par (b)(2) of the restrictive covenant has a particular role to play as a zone forming a buffer between Alcoa's land and Anascot's land. The fact that the 'Red Land' provides an immediate and direct buffer between Lots 1 and 251 does not gainsay the proposition that the restrictive covenant, read as a whole and on its proper construction, is (objectively) intended to serve the principal objects and purposes referred to earlier.
For the reasons given earlier, ground 4 should be dismissed. The master did not find that a restrictive covenant should not be deemed to be 'obsolete' if it no longer serves its original purpose, but the person entitled to the benefit of the restrictive covenant is achieving some other, present, benefit. Moreover, Anascot has not established that the restrictive covenant ought to be deemed to be 'obsolete' within the meaning of s 129C(1)(a) of the TLA.
Ground 5 should similarly be dismissed for the reasons given in [72] ‑ [92] above.

Conclusion

The appeal should be dismissed.