Anascot Pty Ltd v Alcoa of Australia Ltd
[2017] WASC 36
•16 FEBRUARY 2017
ANASCOT PTY LTD -v- ALCOA OF AUSTRALIA LTD [2017] WASC 36
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WASC 36 | |
| Case No: | CIV:2377/2016 | 1 FEBRUARY 2017 | |
| Coram: | MASTER SANDERSON | 16/02/17 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff's application dismissed | ||
| B | |||
| PDF Version |
| Parties: | ANASCOT PTY LTD ALCOA OF AUSTRALIA LTD |
Catchwords: | Property law Application by plaintiff to remove a restrictive covenant in favour of defendant Turns on own facts |
Legislation: | Transfer of Land Act 1893 (WA) |
Case References: | Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
ALCOA OF AUSTRALIA LTD
Defendant
Catchwords:
Property law - Application by plaintiff to remove a restrictive covenant in favour of defendant - Turns on own facts
Legislation:
Transfer of Land Act 1893 (WA)
Result:
Plaintiff's application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr D H Solomon
Defendant : Mr S K Dharmananda SC
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Clayton Utz
Case(s) referred to in judgment(s):
Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528
1 MASTER SANDERSON: This is the plaintiff's application to remove a restrictive covenant. The plaintiff is the registered proprietor of Lot 1, Napier Road, Pinjarra. Lot 1 is burdened by a registered restrictive covenant created by transfer and registered on 2 June 1988. The restrictive covenant registered on Lot 1 in its terms benefits the neighbouring land being Lot 251. The registered proprietor of the neighbouring land is the defendant.
2 The restrictive covenant is in the following terms:
The Transferee covenants for itself and its successors in title the registered proprietor or proprietors for the time being of the land above described (collectively 'the Transferee') to the intent to bind the land above described and for the covenants to run with the land above described and for the benefit of the Transferor and the Transferor's Land that:
(1) the land above described 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. For the purposes of this paragraph a pure gallium or rare earths compound is a material where ninety percentum of the cation is gallium or rare earths (as the case may be);
(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 the land above described to the Transferor's nearby alumina refinery on the Transferor's Land and the railway spur from the Hotham Valley Rai1way to the gallium plant, no plant or facilities to be constructed on the land above described by the Transferee shall, in whole or in part, encroach on that part of the land above described 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 the land above described, 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 competant 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 proposal1; and
(3) no thorium waste will be permanently stored by the Transferee upon the land above described.
3 The relevant background facts can be shortly stated. What follows is taken directly from the plaintiff's outline of submissions filed 22 December 2016. None of the facts are contentious.
4 On 3 March 1988 Anascot (then named Rhone-Poulenc Chimie Australia Pty Ltd) and Alcoa entered into a land sale agreement for the sale of Lot 1. Prior to the land sale agreement Alcoa was the registered proprietor of Lot 1. Also on 3 March 1988 Anascot and Alcoa entered into a general rights agreement. The purpose of the agreement was to govern the setting up and operation of a gallium plant by Anascot on Lot 1 and known as the Pinjarra Gallium Plant. The function of the gallium plant was to extract and process gallium.
5 Gallium cannot be extracted from Lot 1 without a substance known as bayor liquor. Anascot transported bayor liquor from Alcoa's aluminium refinery on the neighbouring land to the gallium plant via a pipeline pursuant to the agreement. The pipeline was constructed on a portion of the neighbouring land which is subject to a registered easement which was granted by Alcoa in favour of Anascot and registered on 26 August 1988.
6 On 14 August 1990 Anascot closed the gallium plant and from that date ceased transporting bayor liquor from Alcoa's aluminium refinery on the neighbouring land to the gallium plant via the pipeline. Anascot sent Alcoa a notice of suspension recording the closure of the gallium plant. The gallium plant was closed because its operation caused 'technical problems to Alcoa'.
7 On 13 November 2001 Anascot, GEO Specialty Chemicals Inc and Alcoa entered into the Pinjarra Gallium Extraction Agreement. The extraction agreement was to provide 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 plants since the closure of the gallium plant on 14 August 1990.
8 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 in the deed) 'shall be terminated on the date of this deed'. The 'contracts' are defined in the preamble of the deed to include the operation and construction agreement, the land sale agreement, the agreement and a deed of guarantee dated 3 March 1988. All of the contracts (with the possible exception of an extraction agreement) were terminated by cl 1 of the deed on 14 June 2002.
9 Section 129C(1) of the Transfer of Land Act 1893 (WA) is in the following terms:
(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 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.
11 It was the plaintiff's position the language of the restrictive covenant was determinative. In support of this proposition it relied on the High Court decision in Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528. Based on that decision it was said all of the evidence led by the defendant about the activities on the neighbouring land was irrelevant and the restrictive covenant had to be read in isolation. For its part the defendant accepted the terms of the restrictive covenant were determinative of the scope of the covenant and its effect. But its position was that if the covenant was to be removed pursuant to s 129C(1) evidence was required as to the present use made of the dominant and subservient tenements with a view to establishing the criteria set out in the section warranted the removal of the covenant.
12 There is no doubt that the terms of a restrictive covenant are determinative. A party who searches the register and comes across a restrictive covenant on certain property need not go and investigate the circumstances that led to the covenant being put in place. Upon reading the covenant the party may make certain assumptions. For instance if a property has on it a height restriction and the property is located in Bicton or Mosman Park then the chances are the covenant is designed to protect the views from the dominant tenement. That assumption may be right or it may be wrong. It does not matter. Nor do the circumstances that led to the imposition of the restrictive covenant affect the position. The covenant simply means what it says.
13 The plaintiff made the following submissions as to how the covenant ought be interpreted. Relevantly in par 17 of those submissions:
Paragraph (b)(l)(i) of the Restrictive Covenant provides unambiguously that Lot 1 cannot be used for any other purpose other than to establish and operate facilities for the extraction, refining or processing of gallium or rare earths. Paragraph (b)(1)(v) allows for facilities to be established and operated for any other purpose approved by the Transferor ... . 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 paragraph (b)(1)(i) or some related use approved by the Transferor under paragraph (b)(1)(v), or, otherwise, facilities for lots of at least 150 hectares for farming under paragraph (b)(1)(iv).
14 The defendant's interpretation of the restrictive covenant is entirely different. It says the use of Lot 1 is restricted in every way save for those matters set out in the covenant itself. So the plaintiff can maintain and operate a gallium plant on Lot 1. It can use Lot 1 for farming provided the farmlets are more than 150 hectares. It can seek approval from the defendant to do anything else it chooses but the defendant has the absolute right to refuse to grant permission. On the defendant's case it matters not whether the plaintiff has ceased to use Lot 1 for a gallium plant. The restrictive covenant applies irrespective of the operation of the gallium plant.
15 In my view the defendant's interpretation of the restrictive covenant is clearly correct. The very purpose of a restrictive covenant is to prevent a party doing certain things on the land. There is no such thing as a positive covenant - that is to say, a covenant which requires a party to use land in a particular way. A restraint offers to the dominant tenement certain rights over use of the subservient tenement. That is exactly what this covenant does and the fact gallium is no longer processed on Lot 1 is irrelevant.
16 It is possible to imagine a circumstance where this covenant might be removed under s 129C(1). If, for instance, the defendant stopped refining aluminium on its land, demolished the plant, subdivided the land and sold off the lots either as farmlets or perhaps for housing then the plaintiff may well have an argument for removing the restrictive covenant. It is the defendant's present position the restraint on Lot 1 is necessary to act as a buffer. But if a buffer was no longer needed then the restrictive covenant may well be obsolete. But of course that is a long way from the present position.
17 Although it was not really argued by the plaintiff that looking at the present use made by the defendant 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 the defendant filed extensive affidavit material attempting to demonstrate why the restraint on Lot 1 had to be maintained. The evidence is overwhelming. Clearly the defendant 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.
18 For these reasons I would dismiss the plaintiff's application. I will hear the parties as to costs.
1
1