Aust-One Investment Pty Ltd v New World Investments Pty Ltd

Aust-One Investment Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning a registered easement. The dispute centred on a positive covenant contained within the easement, which required the owner of the dominant tenement to pay a proportion of rental income from shops to the owner of the servient tenement. The appellant, as the successor in title to the dominant tenement, argued that this positive covenant was not binding on them.

The Court of Appeal was required to determine whether a positive covenant requiring payment of money, contained within a registered easement, was enforceable against successors in title to the dominant tenement. Specifically, the court considered the applicability of the "conditional benefit principle" in Australian law, which suggests that a positive covenant may be enforceable against successors in title if it is for the benefit of the dominant tenement. The court also had to consider whether the primary judge had erred in applying this principle and whether the positive covenant formed an essential part of the registered easement. Furthermore, the court examined the admissibility of an earlier deed between the parties as an aid to construing the registered easement.

The Court of Appeal held that the conditional benefit principle, as understood in English law, does not form part of Australian law. The court reasoned that the enforceability of covenants in registered easements is governed by the Torrens system and the specific terms of the easement itself, rather than by equitable doctrines developed in the context of old system title. The court found that the positive covenant in question was not an essential part of the fabric of the registered easement, nor was it a covenant that ran with the land at common law. The court also determined that while the earlier deed was admissible as an aid to construction, it did not alter the interpretation of the registered easement.

The appeal was allowed, and the orders of the primary judge were set aside. The court declared that the positive covenant was not binding on the appellant.