Ardsley Pty Limited v Butler

Ardsley Pty Limited (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation and enforceability of a restrictive covenant contained within a deed of transfer of land. The appellant sought to enforce the covenant against the respondent, who was the current owner of the land burdened by the covenant.

The primary legal issue before the Court of Appeal was whether the restrictive covenant "not to erect any building other than a single private dwelling house" was enforceable by the appellant against the respondent. This involved determining whether the covenant "ran with the land" and whether the appellant, as a successor in title to the original covenantee, had the necessary standing to enforce it. The court also considered whether the covenant had been breached by the respondent's proposed development.

The Court of Appeal, in allowing the appeal, reasoned that the restrictive covenant was intended to benefit the land retained by the original vendor and therefore ran with the land. The court applied the principles established in cases concerning the enforceability of restrictive covenants, particularly the requirement that the covenant must be negative in nature and intended to benefit the dominant tenement. The court found that the covenant was indeed negative and that the appellant, as the current owner of the land intended to be benefited, had the right to enforce it. The court also found that the respondent's proposed development, which involved subdividing the land and erecting multiple dwelling houses, constituted a breach of the covenant.

Consequently, the Court of Appeal ordered that the appeal be allowed, the orders of the Supreme Court be set aside, and that the respondent be restrained from proceeding with the proposed development in breach of the restrictive covenant.