Deguisa v Lynn - [2019] SASCFC 107

Supreme Court of South Australia
(Full Court)
DEGUISA & ANOR v LYNN & ORS
[2019] SASCFC 107
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Peek and The Honourable Justice Hughes)
5 September 2019
REAL PROPERTY - TORRENS TITLE - RESTRICTIVE COVENANTS - ENFORCEABILITY AND EFFECT
REAL PROPERTY - RESTRICTIVE COVENANTS - BUILDING AND OTHER SCHEMES - GENERAL PRINCIPLES
REAL PROPERTY - RESTRICTIVE COVENANTS - INTERPRETATION - GENERAL PRINCIPLES
The appellants are the registered proprietors of land situated at 538 Henley Beach Road, Fulham (Lot 3). The first two respondents are the executors of the estate of the late Mrs Betty Joan Fielder, a party to the original Memorandum of Encumbrance containing the subject restrictive covenants. The third respondent is the owner of two properties, namely Lots 5 and 35.
Lot 3 was originally part of a much larger area of land (the original Fulham land) held as an estate in fee simple by Mr Oliver George Ayton (the third respondent’s maternal grandfather). After his death, the original Fulham land was transferred to Mr Keith Oliver Ayton and Mrs Betty Joan Fielder (the third respondent’s mother). Thereafter, a process of subdivision was completed whereby 54 lots were presented for sale to the public as depicted in a plan referred to as the “Gaetjens Plan”. Each lot created out of the subdivision (with the exception of Lots 5 and 21) was eventually sold with each conveyance burdening the lot by way of a registered memorandum of encumbrance imposing the same restrictive covenants.
Lot 3 was sold on 4 November 1965 to Mr Giulio Boin and Mrs Franca Boin. The Memorandum of Encumbrance into which the Boins entered contained a notation that “This encumbrance forms portion of a common Building Scheme” (the Memorandum of Encumbrance). The Memorandum of Transfer and the Memorandum of Encumbrance were registered on 19 November 1965. Lot 3 was thereafter transferred in 1967 to Mr William McKenzie and Mrs Muriel McKenzie. Mr McKenzie died in 1994 and Mrs McKenzie died in 2007, after which time the property was purchased by the appellants. The transfer to the appellants took effect on 23 January 2008.
Mrs Betty Joan Fielder died on 2 November 2014 and probate of her estate was granted to the respondents on 17 March 2015. On 16 December 2015, the appellants applied for development approval to subdivide Lot 3. The application was granted on 12 April 2016.
On 4 July 2016, the respondents, as executors of the estate of Mrs Betty Joan Fielder, lodged a caveat over Lot 3. The caveat was registered on 19 July 2016. The appellants applied to the Lands Titles Office (LTO) to remove the caveat on 2 December 2016. The respondents commenced proceedings to enforce the restrictive covenants. On 21 July 2017, Judge Tilmouth held that the respondents had standing to enforce the restrictive covenants in the Memorandum of Encumbrance; that there was a common building scheme; and that the appellants were bound by the Memorandum of Encumbrance.
On 3 November 2017, the appellants sought approval to construct two single storey dwellings on their property. Approval was granted on 30 November 2017. On 1 June 2018, the respondents commenced a second District Court action. On 9 August 2018, Judge Tilmouth held that the appellants were precluded by the terms of the restrictive covenants from building the two dwellings for which they had received development approval.
The appellants appeal to this Court from the two decisions of Judge Tilmouth.
Held, per Peek J (Hughes J agreeing), dismissing the appeal:
1. The process of subdivision and the subsequent sale of the lots created out of the subdivision to members of the public, which lots were encumbered with identical restrictive covenants, led to the creation of a common building scheme. The common building scheme comprised the 52 lots out of the subdivision which were specifically encumbered: Elliston v Reacher [1908] 2 Ch 374; Re Mack and the Conveyancing Act [1975] 2 NSWLR 623 discussed. Baxter v Four Oaks Properties Ltd [1965] Ch 816; Re Dolphin’s Conveyance [1970] Ch 654; Vrakas v Mills [2006] VSC 463; Brunner v Greenslade [1971] Ch 993 considered.
2. Where the Certificate of Title notifies the potential purchaser of the existence (but not the detail) of an apparent impediment or restriction to the title, he or she is required to make reasonable searches of the Register to determine the nature and extent of that apparent impediment or restriction. The searches that ought reasonably be made by a prospective purchaser will be informed by matters of detail varying with the particular case. Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73; Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528; Clem Smith Nominees Pty Ltd v Farrelly (1978) 20 SASR 227; Burke v Yurilla SA Pty Ltd (1991) 56 SASR 382 discussed. Blacks Ltd v Rix [1962] SASR 161 considered. Re Dennerstein [1963] VR 688 not followed.
3. The appellants were required to inspect the encumbrance referred to on their Certificate of Title and, on such inspection, were put on notice as to the likely existence of a common building scheme. The appellants were obliged to undertake further reasonable searches of the Register, which would have confirmed the existence of the common building scheme. Accordingly, the restrictive covenants run with the land and bind all subsequent owners of Lot 3, including the appellants.
4. The third respondent’s ownership of Lot 5 did not suffice to give him standing in the within proceedings because Lot 5, having never been encumbered, is no longer part of the common building scheme. Lot 35 suffices to give the third respondent standing to bring the within proceedings because it was specifically encumbered following its sale out of the ownership of the common vendors and thus remains part of the common building scheme.
5. On a proper construction of the Memorandum of Encumbrance, only one dwelling house is permitted to be constructed on the said land, either before or after any subdivision of the said land. Natraine Nominees Pty Ltd v Patton [2000] VSC 303; Tonks v Tonks (2003) 11 VR 124 discussed. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; Farella v Otvosi (2005) 64 NSWLR 101; Christie v Purden v Dalco Holdings Pty Ltd [1964] Tas SR 34 considered.
Held, per Kourakis CJ, allowing the appeal:
1. Neither the memorial of the encumbrance, nor the registered instrument itself, identifies the land benefited by it. Therefore, the appellants are not bound by the restrictive covenant.
2. The third respondent has not shown that he has standing by reason of his ownership of Lot 5 and of Lot 35 because the evidence fails to prove that it, and Lot 3, were originally part of a single building scheme.
Electronic Conveyancing National Law (South Australia) Act 2013 (SA); Real Property Act 1886 ss 3, 47, 49, 51B, 51C, 57, 64, 65, 69, 72, 78, 80H, 101, 103; Town Planning Act 1929 (SA) ss 2, 11, 14, referred to.
Bahr v Nicolay (No 2) (1988) 164 CLR 604; Baramon Sales Pty Ltd v Goodman Fielder Mills Limited [2001] FCA 1672; Brunner v Greenslade [1971] Ch 993; Burke v Yurilla SA Pty Ltd (1991) 56 SASR 382; Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73; Clem Smith Nominees Pty Ltd v Farrelly (1978) 20 SASR 227; Elliston v Reacher [1908] 2 Ch 374; Forestview v Perpetual Trustees WA [1998] 193 CLR 154; Gibbs v Messer [1891] AC 248; Lawrence v South County Freeholds Ltd [1939] Ch 656; Natraine Nominees Pty Ltd v Patton [2000] VSC 303; Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9; Nottingham Patent Brick & Tile Co v Butler (1885) 15 QBD 261; Re Dennerstein [1963] VR 688; Re Mack and the Conveyancing Act [1975] 2 NSWLR 623; Re Naish and Conveyancing Act (1960) 77 WN (NSW) 892; Renals v Cowlishaw (1878) 9 Ch D 125; Re Union of London v Smith’s Ltd’s Conveyance; Miles v Easter [1993] 1 Ch 611; Rodgers v Hosegood [1900] 2 Ch 388; Tonks v Tonks (2003) 11 VR 124; Vrakas v Mills [2006] VSC 463; Westfield Management Ltd v Perpetual Trustee Co Ltd (2007) 233 CLR 528, discussed.
Baxter v Four Oaks Properties Ltd [1965] Ch 816; Blacks Ltd v Rix [1962] SASR 161; Castle Constructions Pty Limited v Sahab Holdings Pty Ltd [2013] HCA 11; Christie & Purden v Dalco Holdings Pty Ltd [1964] Tas SR 34; Farella v Otvosi (2005) 64 NSWLR 101; Fitt v Luxury Developments Pty Ltd [2000] VSC 258; Hargraves v The Queen (2011) 245 CLR 257; Lynn & Ors v Deguisa & Anor [2017] SADC 78; Lynn v Deguisa (No 2) [2018] SADC 84; Marten v Flight Refuelling Ltd [1962] 1 Ch 115; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; R v Parsons [2015] SASCFC 183; Re Dolphin’s Conveyance [1970] Ch 654; Registrar-General (NSW) v Cihan [2012] NSWCA 297; Re Hunt [2017] VSC 779; Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500; Texaco Antilles Ltd v Kernochan [1973] AC 609; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Xu v Natarelli [2018] VSC 759, considered.

DEGUISA & ANOR v LYNN & ORS
[2019] SASCFC 107
Full Court: Kourakis CJ, Peek and Hughes JJ

KOURAKIS CJ: I gratefully adopt the summary of the relevant facts and the identification of the issues in the reasons for judgment of Peek J. I adopt his Honour’s terminology unless it otherwise appears. I hasten to add, however, that the primary issue on the appeal is not whether the original owners of Lot 3 entered into a building scheme with the first purchasers of all of the other blocks subdivided from the grandparent title. It is whether or not the appellants had notice, from the registered encumbrance memorialised on Lot 3’s folio of the Register Book, of the land which held the benefit of the covenant it contained.
The questions, first, whether there were ever any building scheme or schemes binding the first purchasers of Lot 3, and secondly, if there were, which allotments they comprised, arise only on the issue joined as to the standing of the third respondent, Mr Fielder. Mr Fielder is the registered proprietor of Lot 35, which is burdened by an encumbrance in the same terms as that noted on the appellants’ title, but the properties are not adjacent, do not front the same street, and their respective titles were extracted from the grandparent title in very different ways. The existence of a mutual intention to include Lot 35 in a building scheme with Lot 3 can only be proved by admissible evidence of the circumstances surrounding the marketing, negotiations and contracting for sale of those lots. That evidence is sparse. All that is known is that all, or most, of the land in the grandparent title was formerly disposed as a dairy farm, that in 1964 and 1965 it was subdivided and re‑subdivided and Certificates of Title for the resulting house blocks were issued which, for the most part, were encumbered with a restrictive covenant. However, there were two different deposited plans of subdivision. Lot 35 was in one of them and Lot 3 in neither of them; it was one of five lots for which titles were issued on a plan of re-subdivision of the land remaining on the grandparent title after the two subdivisions.
I would allow the appeal and hold that the appellants are not bound by the restrictive covenant included in the encumbrance, because neither the memorial of the encumbrance, nor the registered instrument itself, identifies the land benefited by it. I would also hold that Mr Fielder has not shown that he has standing by reason of his ownership of Lot 5 for the reasons given by Peek J, and no standing as the registered proprietor of Lot 35 because the evidence fails to prove that it, and Lot 3, were originally part of a single building scheme.
Restrictive covenants and building schemes – the general law
I acknowledge the assistance I have received from the survey of the law of restrictive covenants and building schemes essayed in the judgment of Peek J. I make the following brief observations on a number of discrete points.
First, I draw attention to the warning in [13.82] of Bradbrook and Neave[1] that the application of the general law principles of restrictive covenants to Torrens system land is problematic. In particular, the general law conveyancing technique, commonly used in conveyances to purchasers under a building scheme, is to refer in the recital to the intention that all purchasers of identified lots should be bound by the covenants, but no provision is made for a recital in a Torrens system transfer. Secondly, the importance of expressly defining the area covered by the scheme is emphasised because ‘a purchaser of one parcel cannot be subject to an implied obligation to purchasers of an undefined and unknown area’.[2] According to Bradbrook and Neave, if not defined in the covenant, the benefited land must be identified ‘by reference to the language of the document considered in the light of the surrounding circumstances’.[3]
[1]    Adrian J Bradbrook and Susan V MacCallum, Bradbrook and Neave’s Easements and Restrictive Covenants in Australia (LexisNexis Butterworths, 3^rd edn, 2011) (Bradbrook and Neave).
[2]    Bradbrook and Neave at [13.94], citing Reid v Bikerstaff [1909] 2 Ch 305 at 319 (Cozens-Hardy MR).
[3]    Bradbrook and Neave at [13.95].
It is accepted that lotting is a strong indication that the land has been laid out for a building scheme.[4] However, it is not conclusive. In Nottingham Patent Brick & Tile Co v Butler, Wills J said: [5]
But it is in all cases a question of intention at the time when the partition of the land took place, to be gathered, as every other question of fact, from any circumstances which can throw light upon what the intention was.
[4] Bradbrook and Neave at [13.96]-[13.97].
[5] (1885) 15 QBD 261 at 269.
Importantly, in Re Naish and Conveyancing Act (Naish),[6] Myers J emphasised that the creation of the scheme of development does not depend only upon the intention of the vendor, but that it is necessary also to show that the first purchasers were aware, when they contracted for the land, of the obligations which were to be imposed upon them. In Naish, there was no evidence of the information which had been given to the purchasers. No printed form of contract or plan for the information of the purchases was produced. The only evidence was that all the lots were sold over a period of 16 years, and were subject to similar restrictions. Myers J declined to infer that every purchaser was informed of the relevant facts.
[6] (1960) 77 WN (NSW) 892 at 895.
On the question of annexation, I make the following observations. Annexation does not involve any notation on the title of the benefited land, but is effected by the covenant on the burdened land recording that its benefit should run with the dominant land identified by it. Annexation could be achieved either by express reference and identification of the specified land in the covenant, or express declaration that the covenantee’s heirs and assigns, in his or her capacity as the owner of identified land, also held the benefit. The emphasis on the covenantee’s capacity as owner of the land is important. The covenant would not run if it were otherwise. In the absence of express words of annexation of the kind just mentioned, the orthodox view is that the covenant protects only the covenantee.[7]
[7] Bradbrook and Neave at [13.29].
Even though it is not always necessary, in order to achieve annexation, for the benefited land to be precisely defined and identified in the document creating the covenant, real difficulties arise if it is not. In Baramon Sales Pty Ltd v Goodman Fielder Mills Limited (Baramon Sales),[8] a question arose as to the sufficiency of the identification of the benefited land in a covenant by annexation.[9] Goodman Fielder, an industrial miller, sold land on which stood an old flour mill it no longer wished to use (the old mill land). Moreover, the old flour mill was protected under the Historic Buildings Act 1981 (Vic). Goodman Fielder owned land about 12.5 kilometres away (the Kensington land) on which it had built a new flour mill. A special condition to the contract of sale provided that Goodman Fielder and the purchaser agreed that the transfer would include a restrictive covenant that the old mill land could not be used for purposes associated with the milling of the flour. The transfer lodged for registration contained that covenant, but did not identify the Kensington land, or any other land, as the dominant land. The Registrar requisitioned the purchaser, requiring the dominant land to be identified. The purchaser then lodged a redrafted covenant which identified the Kensington land as the dominant land. The question of whether the restrictive covenant ran with the burdened land arose only as a subsidiary issue in Baramon Sales. The primary issue, between the original parties, was whether the covenant was void for being in restraint of trade; it being accepted that whether it ran with the land or not relevantly affected the validity of the covenant. The decision in Baramon Sales says nothing about the notice required to burden a subsequent purchaser, because the dispute was between the original parties to the contract for sale. The issue in Baramon Sales was therefore whether, as a matter of fact, the parties to the covenant intended to annex it to the Kensington land. If so, both the original covenant and the amendment filed in accordance with the requisition were effective. In the particular circumstances of that case, Finkelstein J relied on the correspondence between the parties and, in particular, the purchaser’s admission in answering the requisition, to find that the Kensington land was the benefited land. That was sufficient for the purposes of resolving the particular matter before him.
[8] [2001] FCA 1672.
[9] Assignment differs from annexation, in that in the covenant itself the dominant land is not identified and therefore the benefit, if it is to pass, must be assigned from one owner of the benefited land to his or her successor. It has no present relevance.
Very obviously, there would have been difficulties if a dispute as to the identity of the benefited land in Baramon Sales had arisen between subsequent purchasers, who might not have had evidence of what passed between the parties and no notice of what they intended. It bears on the primary issue in this case to enquire as to the position of a subsequent purchaser of the old mill land if the covenant had provided that the benefit was held by ‘Goodman Fielder, its assigns, in its capacity as owner of land within an 11 kilometre radius (or in its capacity as the owner of nearby land on which there is a flour mill)’. The question then would be: is a subsequent purchaser, reading the covenant noted in the memorial, required to search the Register Book for land owned by Goodman Fielder to ascertain the land within a 11 kilometre radius or on which there was a flour mill? Plainly not. Searches of that kind are inconsistent with the fundamental concept of indefeasibility on which the Torrens system is founded.
Bradbrook and Neave gives examples of what has been held to be sufficient identification. The examples include a reference to ‘the land adjoining or adjacent to’ the burdened land, and the description of the land by a name well known to the surrounding community. However, the more recent trend in England, according to Bradbrook and Neave, is to require that the land ‘be able to be identified from the words of the covenant itself, or by implication from the wording of the covenant or by other admissible evidence’.[10]
[10] Bradbrook and Neave at [13.41], citing Crest Nicholson Residential (South) Limited v Macallister [2004] 1 WLR 2409

The two necessary conditions for the enforceability of a covenant by the successor to the benefited land were described by Bennett J in Re Union of London and Smith’s Bank Limited’s Conveyance; Miles v Easter (Re Union of London).[11]Although related, they are not entirely subsumed one by the other. The first condition is that the covenant was entered into for the benefit of land owned by the covenantee. The point of that condition is that it must be clear that the covenant is not simply a personal promise to the covenantee. However, even if the covenant shows that it is not personal but it intended to protect land, that is not enough. The second condition must also be satisfied, and that is that the ‘covenant defines or contains something to define’ the benefited property.[12] True it is that if the second condition is satisfied, the first must be, but the converse does not hold. The point of stating the requirements as two conditions is to emphasise that the benefited land itself must be identified. A covenantee may own several parcels of land. The covenant may expressly state that it is not merely personal and intended to protect the covenantee’s land, but it must go further, and make it clear whether it is all or a specified part of the covenantee’s land which is protected. And so it is that Romer LJ, on appeal in the matter of Re Union of London, made the point that in a case where it is shown that it was intended that the benefit enure to each part of the land retained by the original covenantee, nothing more is required to ensure the enforceability of that covenant. The benefit will pass to the purchaser of the retained land without being mentioned because it runs with the land. However, where so much is not clear from the original covenant, the purchaser of the land of the original covenantee will not acquire the benefit of the covenant unless that benefit be expressly assigned to him – that is, it must appear that the benefit of the covenant was part of the subject matter of the purchase. Moreover, Romer LJ emphasised that although the Court will readily infer the intention to benefit the other land of the vendor where the other land is indicated in the conveyance, or has been otherwise shown with reasonable certainty, it is impossible to do so from vague references in the conveyance or in other documents laid before the Court.
[11] (1933) 1 Ch 611 at 625.
[12] Re Union of London and Smith’s Bank Limited’s Conveyance; Miles v Easter (1933) 1 Ch 611 at 625.
In considering the importance of ascertainment of the land, Bradbrook and Neave emphasises the importance of ‘ascertainability’ in the sense that ‘the instrument contains some reference to the land and it can be identified by reference to surrounding circumstances’.[13]
[13] Bradbrook and Neave at [13.71].
In Clem Smith Nominees Pty Ltd v Farrelly & Ors (Clem Smith)[14], Zelling J expressed criticism of the English decisions of Newtown Abbot Co-operative Society Ltd v Williamson & Treadgold Ltd[15] and Marten v Flight Refuelling Limited,[16] which seemed to go further and to identify the benefited land from surrounding circumstances alone.
[14] (1978) 20 SASR 227.
[15] [1952] Ch 286.
[16] [1962] Ch 115.
By the early 20th century, the conditions for inferring the requisite intention for a building scheme had ‘crystallised’ into the requirements laid down by Parker J in Elliston v Reacher:[17]
… In my judgment, in order to bring the principles of Renals v. Cowlishaw and Spicer v. Martin into operation it must be proved
(1) that both the plaintiffs and defendants derive title under a common vendor;
(2) that previously to selling the lands to which the plaintiffs and defendants are respectively entitled the vendor laid out his estate, or a defined portion thereof (including the lands purchased by the plaintiffs and defendants respectively), for sale in lots subject to restrictions intended to be imposed on all the lots, and which, though varying in details as to particular lots, are consistent and consistent only with some general scheme of development;
(3) that these restrictions were intended by the common vendor to be and were for the benefit of all the lots intended to be sold, whether or not they were also intended to be and were for the benefit of other land retained by the vendor; and
(4)that both the plaintiffs and the defendants, or their predecessors in title, purchase their lots from the common vendor upon the footing that the restrictions subject to which the purchases were made were to enure for the benefit of the other lots included in the general scheme whether or not they were also to enure for the benefit of other lands retained by the vendors. If these four points be established, I think that the plaintiffs would in equity be entitled to enforce the restrictive covenants entered into by the defendants or their predecessors with the common vendor irrespective of the dates of the respective purchases.
(Citations omitted)
[17] [1908] 2 Ch 374 at 384.
To these four points, Parker J added the following observations:[18]
… I may observe, with reference to the third point, that the vendor’s object in imposing the restrictions must in general be gathered from all the circumstances in the case, including in particular the nature of the restrictions. If a general observance of the restrictions is in fact calculated to enhance the values of the several lots offered for sale, it is an easy inference that the vendor intended the restrictions to be for the benefit of all the lots, even though he might retain other land the value of which might be similarly enhanced, for a vendor may naturally be expected to aim at attaining the highest possible price for his land. Further, if the first three points be established, the fourth point may readily be inferred provided the purchasers have notice of the facts involved in the first three points; but if the purchaser purchases in ignorance of any material part of those facts, it would be difficult, if not impossible, to establish the fourth point.
(Emphasis added)
[18] Elliston v Reacher [1908] 2 Ch 374 at 384-385.
It follows from the emphasised passage that the proponent of the existence of a building scheme must show that the purchaser knew that the restrictions ‘were for the benefit of all of the lots intended to be sold’. It is necessary, therefore, to identify which lots were in which building scheme or schemes.
Intersection with the Real Property Act
Under the general law, a restrictive covenant both binds the parties to it as a matter of contract and creates a proprietary interest in land which may bind strangers to the covenant who take the burdened land with notice. Under the provisions of the Real Property Act 1886 (SA) (the RPA), restrictive covenants cannot be registered and, therefore, a proprietary interest in burdened land under a restrictive covenant can never be a legal one. The interest in the burdened property therefore is necessarily only equitable, and can only bind a purchaser for value who has, not only notice, but notice of a kind which is consistent with the indefeasibility of title conferred by the RPA.
In Burke v Yurilla SA Pty Ltd (Burke v Yurilla), Debelle J, with whom King CJ and Cox J agreed, contrasted the difference in the treatment of restrictive covenants under the Torrens system in South Australia with such covenants in other States:[19]
In some States of Australia, legislation relating to Torrens system land has recognised the practice of notifying on the Certificate of Title of the burdened land registered covenants which create a building scheme. The practice has been given legislative recognition in New South Wales (see Conveyancing Act 1919 (NSW), s 88(3)(a)); in Western Australia (see Transfer of Land Act 1893 (WA), s 129A); in Victoria (see Transfer of Land Act 1958 (Vic), s 88); and in Tasmania (see Land Titles Act 1980 (Tas), ss 102-104). However, there is no specific provision in South Australia for noting restrictive covenants of this kind on the Register. Nevertheless, for a long time, there has been a practice in South Australia by which restrictive covenants have been notified on the Certificate of Title of land under the Real Property Act.
The device which has been adopted has been to register an encumbrance which included the restrictive covenants. The encumbrance charged the land with a nominal annual rent charge and then went on to include the restrictive covenants. The encumbrance was in the form of the encumbrance provided in the Tenth Schedule to the Real Property Act and so was registrable. The form contained in the Tenth Schedule provided for the inclusion of ‘any special covenants’ and this was the means adopted to include restrictive covenants creating a building scheme. The intention was to ensure registration of the encumbrance and thus registration of the covenants so as to enable enforcement against a subsequent registered proprietor.
[19] (1991) 56 SASR 382 at 386.
Debelle J referred to the decision of Napier CJ in Blacks Ltd v Rix,[20] in which it was held that restrictive covenants were enforceable against subsequent purchasers because s 249(1) of the RPA[21] preserved ‘equities generally’[22]. Debelle J referred to the criticisms of that decision made in Clem Smith[23] and in certain texts.[24] The criticisms were, first, that Napier CJ’s construction of s 249(1) of the RPA was inconsistent with the principle that mere notice could not defeat indefeasibility.[25] The saving of equities generally from the operation of the RPA was intended only to preserve personal equitable claims against a registered proprietor, and not proprietary interests which could bind subsequent bona fide purchasers.[26] I mention here that the appellants’ reliance on s 117 of the Law of Property Act 1936 (SA) (the LPA) is also misplaced. Its effect is to restrict what otherwise would have been constructive notice under the general law. In its application to the RPA it must be limited to notice of instruments because that is the very purpose of the registration system it establishes. In any event, s 6 of the LPA expressly so provides. The decision in Registrar‑General (NSW) v Cihan[27] resolved a difficult problem which arose because of a failure of the Registrar-General to include a registered easement when issuing a new title. It serves as no authority in this case.
[20] [1962] SASR 161.
[21] Section 249 of the RPA provides:
249—Equities not abolished
(1)Nothing contained in this Act shall affect the jurisdiction of the Courts of law and equity in cases of actual fraud or over contracts or agreements for the sale or other disposition of land or over equities generally.
(2)And the intention of this Act is that, notwithstanding the provisions herein contained for preventing the particulars of any trusts being entered in the Register Book, and without prejudice to the powers of disposition or other powers conferred by this Act on proprietors of land, all contracts and other rights arising from unregistered transactions may be enforced against such proprietors in respect of their estate and interest therein, in the same manner as such contracts or rights may be enforced against proprietors in respect of land not under the provisions of this Act: Provided that no unregistered estate, interest, contract, or agreement shall prevail against the title of any bona fide subsequent transferee, mortgagee, lessee, or encumbrancee, for valuable consideration, duly registered under this Act.
[22] Blacks Ltd v Rix [1962] SASR 161 at 164-165, cited in Burke v Yurilla (1991) 56 SASR 382 at 387.
[23] (1978) 20 SASR 227.
[24] Adrian J Bradbrook and Marcia A Neave, Easements and Restrictive Covenants in Australia (Butterworths, 1981), Ch 17 at [1714].
[25] Burke v Yurilla (1991) 56 SASR 382 at 388.
[26] Section 72 of the RPA provides:
72—Knowledge of trust not evidence of want of bona fides
Knowledge of the existence of any unregistered estate, interest, contract, or trust shall not of itself be evidence of want of bona fides so as to affect the title of any registered proprietor.
[27] [2012] NSWCA 297.
Secondly, even if a restrictive covenant is mentioned in an encumbrance, the covenant itself is not a registered instrument.[28]
[28] Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9.
The last of the criticisms is that s 97 of the RPA exhaustively confines the obligations of a transferee of encumbered land to the indemnification of the transferor against liability for breach of covenant and stops short of directly binding the transferee to comply with those covenants.
Before returning to the decision in Burke v Yurilla, it should be noted that the encumbrance endorsed on the titles in that case expressly referred to all of the allotments that were bound by it. The question in Burke v Yurilla was whether restrictive covenants were enforceable under the RPA at all. It is most improbable therefore that Debelle J intended to state a proposition as to the sufficiency of notice, of the benefited land, which went well beyond Re Dennerstein[29] in a case in which the issue did not arise.
[29] [1963] VR 688.
It follows from the holdings in Burke v Yurilla and Clem Smith that the only form of notice sufficient to bind a subsequent purchaser to a restrictive covenant entered into by a predecessor in title is notice arising from a registered dealing with the land. Other forms of notice which might have sufficed in equity, outside the confines of a Torrens style registration system, will not bind a subsequent purchaser. So much is common ground on the appeal. The controversy on this appeal is whether notice of the land to which the benefit of the covenant accrues is confined to what is expressly identified on the face of the Certificate of Title of the encumbered land, or a registered instrument noted in it, or whether the benefited properties may be ascertained inferentially from a search of other Certificates of Title and the registered instrument memorialised on them.
In Burke v Yurilla, Debelle J explained that a restrictive covenant, not registered against the title as such, might nonetheless bind a subsequent purchaser of the land, notwithstanding the indefeasibility provisions of the RPA, but only if all of the elements of the covenant can be ‘identified’ from other instruments registered against the burdened title:[30]
Where a building scheme is found to exist in the case of land under the general law and the successor in title has notice of the covenants, the courts of equity will enforce the common interest in maintaining the restrictions. To use Lord Macnaghten’s words in Spicer v Martin (1888) 14 App Cas 12 at 25, the community of interests necessarily requires and imports reciprocity of obligation. In the case of land under the Real Property Act, the enforcement of the equitable right will depend on whether a person dealing bona fide with the registered proprietor will be deemed to have notice of the restrictive covenants contained in a registered encumbrance. If he is, the courts will be able to enforce the equitable interest.
…
The burden of restrictive covenant will run with the land in equity against a subsequent holder of the land who has notice of the covenant when the covenant is entered into for the benefit of some parcel of land, or possibly some interest in land: see Clem Smith Nominees Pty Ltd v Farrelly, per Bray CJ (at 235); Re Louis and The Conveyancing Act [1971] 1 NSWLR 164 at 175, 177-178. Before it can be held that the burden of a restrictive covenant will run with the land under the Torrens system, it is necessary to establish that the land entitled to the benefit of the covenant is capable of identification from the registered document or from the Register. In Clem Smith Nominees Pty Ltd v Farrelly, Bray CJ said (at 237):
‘I am of opinion that under the Torrens system it is essential, before the burden of a restrictive covenant can be held to run with the land, that the land entitled to the benefit of the covenant shall be capable of identification in some way from the registered document containing the covenant or, at least, from other related documents which can be discovered by a search in the Lands Titles Office: see Bursill Enterprises Pty Ltd v Berger Bros Trading Pty Ltd (1971) 124 CLR 73. A prospective purchaser of land subject to a burden should be able to find out by a search whether the covenant is a covenant in gross, which will not be binding on him if he purchases, or a covenant the benefit of which is attached to some parcel or parcels of land, which may be binding on him. It was so held by Hudson J in the Supreme Court of Victoria in Re Dennerstein [1963] VR 688. With respect I agree.’
It can be stated, therefore, that a person who deals with a registered proprietor is deemed to have notice of and will be bound by a restrictive covenant which runs with the land which is contained in a registered encumbrance noted on the original Certificate of Title. Covenants which are intended to establish a building scheme will ex hypothesi be for the benefit of other parcels of land. Provided the land entitled to the benefit of the covenant can be identified from the Register, those entitled to the benefit of the covenant will be able to enforce the covenant by equitable remedies. Those criteria are satisfied here and the covenants are enforceable against the plaintiff.
(Emphasis added)
[30] (1991) 56 SASR 382 at 389-390.
I emphasise the following aspects of the passage from the decision of Bray CJ in Clem Smith,[31] cited by Debelle J:
·The decision in Re Dennerstein as to what must appear on the register in order for the restrictive covenant to bind a subsequent purchaser was expressly approved.
·The Court held that the restrictive covenant and, therefore in the case of a building scheme, the land entitled to its benefit must be ‘capable of identification’ from the registered encumbrance which contains the covenant or from ‘related documents which can be discovered by a search in the Lands Titles Office’.
[31] (1978) 20 SASR 227 at 237.
I also interpolate here that, in Clem Smith, Zelling J also took a very strict approach to the requirement that the covenant identify the benefited land. His Honour expressed the view that Napier CJ was wrong to find that the land comprising the building scheme was sufficiently identified in the covenant. He said: [32]
In my opinion, the judgement of Richards J. in R. J. Finlayson Limited v. Elder Smith & Company Limited states the position correctly. He said: “The position appears to be that surrounding circumstances cannot annex the benefit of a covenant to land; the instrument containing the covenant must itself show an intention to annex it, and then circumstances may be used in order to identify the land to which the parties intended to annex it.” It follows that in my opinion the case of Blacks Ltd v. Rix was wrongly decided in so far as it allowed evidence to be adduced which linked up all the matters required to prove the building scheme then before the Court. The actual decision may not necessarily have been wrong in the result because it does not appear from the statement of facts at page 163 of the report whether the defendant Edna Eileen Rix was a transferee for value, and if she was not, then the actual decision was correct.
(Citations omitted)
[32] Clem Smith v Farrelly (1978) 20 SASR 227 at 255.
From the report of Blacks Ltd v Rix it appears that the only material on which Napier CJ founded his finding that the defendants acquired their registered title ‘well knowing that the land had been bought on the faith of the restrictive covenants, as covenants running with the land, and enuring to the benefit of all the purchases under the building scheme’[33] was the fact that all of the titles to the lots were carved out of the same land. Certainly, there was nothing in the restrictive covenant reported in Blacks Ltd v Rix that in any way identified the benefited land. Accordingly, the holding of Zelling J in Clem Smith stands squarely against, and in the way of, the respondents’ success in this matter.
[33] [1962] SASR 161.

In Burke v Yurilla, Debelle J set out certain passages from the judgments of Barwick CJ and Stephen J in Mercantile Credits Ltd v Shell Co of Australia Ltd,[34] in which their Honours explained that conferring indefeasibility on a right of renewal given by a registered lease noted on the title was not inconsistent with the scheme of the RPA. Debelle J then continued:[35]
[34] (1976) 136 CLR 326.
[35] Burke v Yurilla (1991) 56 SASR 382 at 390-391.
The necessity for a person intending to deal with the registered proprietor to make proper searches of the Register had earlier been emphasised by the High Court. In Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73, the High Court had held that where a purchaser failed to make such searches as he ought reasonably to have made, he is bound by that which is contained on the Register notwithstanding that the endorsement on the title might not have accurately described the nature of the interest to which the land is subject. In that case, it was held that a purchaser who had seen a reference to the registered number of a transfer described as creating a right of way ought to have searched the transfer to ascertain exactly the nature of the rights granted by it, which inspection would have disclosed that the transfer also included a transfer of air space. Windeyer J said (at 93):
‘But it seems to me that what is ‘notified’ to a prospective purchaser by his vendor’s Certificate of Title is everything that would have come to this [sic] knowledge if he had made such searches as ought reasonably to have been made by him as a result of what there appears.
... It seems to me that, at any time from 1872 till today, a prudent conveyancer acting for a purchaser of the land that is now Bursill’s would have ascertained what it was that transfer 7922 referred to on the vendor’s Certificate of Title in law effected. True, he might have been surprised to discover all that his search revealed. But surely no prudent person, seeing the reference to a right of way, would neglect to ascertain what exactly was the nature of the right of way, the land subject to it, the persons who could avail themselves of it, for what purposes, in what manner and at what times.’
Barwick CJ (at 79) expressed it quite plainly:
‘To my mind, it is inescapable that a person dealing with the registered proprietor in this case would be bound to search the registered dealing of which particulars were endorsed on the relevant Certificate of Title.’
(Emphasis added)
I first observe that the decision of the High Court in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (Bursill)[36] went no further than to hold that a purchaser is bound by all the terms of a registered transfer noted on his or her title, even though the brief memorial of that transfer appearing on the face of the title does not set out all of its terms. In short, the memorial or notation on the face of the title incorporates, by reference, onto the title, all of the terms of the registered document to which it refers. That proposition is not in issue here, nor is it in any way inconsistent with Re Dennerstein. Moreover, that incorporation is required by s 57 of the RPA which I mention further below.
[36] (1971) 124 CLR 73.
It is also important to appreciate that the wide reference to reasonable searches in the first sentence of the passage cited from the judgment of Windeyer J in Bursill is significantly narrowed to the four corners of the transfer noted on the Certificate of Title in the second cited sentence. In this respect, the passage cited from the judgment of Barwick CJ could not be clearer – the purchaser is bound only by the contents of the ‘registered dealing of which particulars were endorsed on the relevant Certificate of Title’.[37]
[37] Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 at 79.
Debelle J continued:[38]
In practice, the decision in Bursill’s case (supra) should not lead to difficulty in the case of encumbrances which include restrictive covenants which run with the land. The practice of the Registrar-General is to endorse on the Certificate of Title an entry to the effect that the land is subject to an encumbrance. As can be seen from the terms of the endorsement in this case, the endorsement conveys little more information than the fact that the encumbrance exists. Apart from any obligation which the decision in Bursill’s case might impose on a person intending to deal with the registered proprietor, the paucity of information disclosed by the endorsement will make it necessary in any event to search the Register to ascertain the precise terms and effect of the encumbrance. If the encumbrance is discharged, an endorsement to that effect is noted on the title. It would not be difficult, therefore, for any person searching the Register to ascertain whether the encumbrance is current. Provided that the person intending to deal with the registered proprietor is able to identify the land which is entitled to the benefit of the covenant either from the encumbrance or from other related documents which can be discovered on a search of the Lands Titles Office, the purchaser would have notice from the Register itself of the restrictive covenant and its terms: see per Bray CJ in Clem Smith Nominees Pty Ltd v Farrelly and Re Dennerstein [1963] VR 688.
[38] Burke v Yurilla (1991) 56 SASR 382 at 391.
The following can be drawn from that passage. First, the word ‘Register’ is used by Debelle J in the sense of the Certificate of Title and the registered documents referred to in the memoranda noted on that title. So much follows from the immediately preceding discussion of the decision in Bursill and the reference to a purchaser being bound by what is ‘contained on the Register notwithstanding [the accuracy of] the endorsement on the title’.[39]
[39] Burke v Yurilla (1991) 56 SASR 382 at 390.
Secondly, the search of the Register to ascertain the precise terms and effect of the encumbrance to which Debelle J refers must only be a search of the encumbrance registered on the proprietor’s Certificate of Title.
Thirdly, the reference to other related documents which can be discovered on a search at the Lands Titles Office is to documents identified by the encumbrance itself, for example if the registered encumbrance itself were to refer to a deposited plan.
Finally, any attempt to read the judgment of Debelle J as allowing a wider search of other titles necessarily founders on his Honour’s express approval of the decision in Re Dennerstein.
The RPA refers not to a Register, but to the Register Book. The Register Book, now an electronic file or folder,[40] contains, as a separate folio, every Certificate of Title for land within the Torrens system. To speak loosely of the ‘Register’ may mislead.
[40] See s 3 (definition of document), s 51B of the RPA, and the Electronic Conveyancing National Law (South Australia) Act 2013 (SA).
Section 47 of the RPA provides that the Register Book is the book containing the records of the title to all land under the RPA. Each certificate is ‘a separate folium’ of the Register Book.[41] Section 57 of the RPA provides that every instrument, when registered, is deemed to be part of the Register Book. That provision provides the statutory mechanism by which an encumbrance memorialised on the title creates a legal interest which detracts from the registered proprietor’s indefeasibility of title. As we shall see, however, a deposited plan is not a registered instrument. A cancelled certificate may be kept in the other records of the Registrar-General, but it ceases to be a part of the Register Book because there cannot be multiple Certificates of Title and therefore folios for the same land.[42] Any person can have access to instruments filed or deposited.[43] Section 69 of the RPA confers indefeasibility of title, the fundamental characteristic of a Torrens system, ‘subject to such encumbrances, liens, estates, or interests as may be notified on the certificate of title of such land’ (emphasis added). Importantly, s 72 of the RPA provides that mere knowledge of the existence of an unregistered interest derived from a source other than a registered interest is not, of itself, evidence of a lack of bona fides.
[41] Section 49.
[42] See also ss 51C, 64, 78, 80H and 103.
[43] Section 65.
Accordingly, the question in this case is whether the memorial of the registered encumbrance containing the restrictive covenant, or the registered encumbrance itself, gives notice of the properties which hold the benefit of the covenant which burdens Lot 3. There is no statutory basis on which to frame the question more widely to include memorials and registered instruments in the entirety of the Register Book. It is one thing to be able to identify the benefited land by an internal reference, in the registered encumbrance itself, to the Certificates of Title of the benefited land, or by a reference to land which can be ascertained with certainty from public documents, like a deposited plan in the Lands Titles Office. It is quite another thing to bind the registered proprietor on the basis of inferences he or she might draw from other Certificates of Title and the registered instruments noted on them, however probable those inferences might appear to be.
The decision in Re Dennerstein is directly inconsistent with the respondents’ contention that inferences which might be drawn in that way bind a subsequent purchaser. In Re Dennerstein, Hudson J considered a claim that a registered proprietor of land was bound by a restrictive covenant included in an earlier transfer of that land out of a larger parcel of land which was noted on the registered proprietor’s title. The plan of the subdivision of the larger parcel was held in the Lands Titles Office. The same covenant was included in the transfers of land from the larger parcel to the subdivided blocks. The covenant provided:[44]
Each purchaser shall enter into covenants with the vendors their executors administrators and transferees that he or his executors administrators and transferees will not erect or allow to be erected any Church State School or building to be used for religious or charitable purposes of any kind or for public entertainment of any kind whatsoever or any hoarding for advertisement. …
[44] Re Dennerstein [1963] VR 688 at 691.
Hudson J observed as to that covenant:[45]
… The covenants contained in the instrument of transfer notified as an encumbrance, though they certainly set out the restrictions, give no indication that they arose under a building scheme, nor of the land to which the benefit thereof was intended to be annexed, under such a scheme. The applicant, therefore, had no notice of the existence of the scheme or of the restrictions imposed thereby. …
[45] Re Dennerstein [1963] VR 688 at 697.
Hudson J stated the question which fell to him to decide, and which is in issue in these proceedings, as follows:[46]
… But can the notification as an encumbrance of a covenant which contains no such identification [of the benefited land] be effective? …
[46] Re Dennerstein [1963] VR 688 at 695.
In proceeding to answer that question, Hudson J first observed:[47]
… The whole object of the Act is to define the nature and extent of the title as registered, and so that the certificate of ownership shall disclose the full title of the owner with whatever charges liens and other encumbrances may be registered against it. A purchaser under such a certificate ought not to be put upon inquiry as to anything beyond what the certificate itself discloses. Here the certificates discloses a condition implemented by a covenant apparently for the benefit of the Suydam Realty Co., and it alone. There is nothing on its face to suggest that the restriction is for the benefit of any parcel of land whatsoever. To give to others rights which are not spread upon the face of the register is, in my opinion, quite opposed to the whole intention of the Act. And I think that when restrictive conditions are registered under s. 99 of the Act, if those who impose the conditions intend the benefit of these to attach to and run with other lands, those other lands ought to be clearly defined and set forth in the register and the certificate of ownership”. …
… What has been notified is simply a covenant by the transferee with his transferors their executors, administrators and transferees. Upon its true construction this has been held to be a covenant which fails to identify any land in favour of which the benefit thereof is to be annexed. It is only when resort is had to an inquiry as to the circumstances under which the covenant was entered into, that it may be inferred that it was to give effect to a building scheme to which the owners of lands affected by the scheme were parties; only when this has been done can it be postulated that the benefit and the burden of the restrictions were intended to pass to and bind subsequent registered proprietors. No reference to the existence or the extent of such a scheme is contained in the covenant, and, for all that appears in it, the covenant may have been intended to have no greater effect than what the law would give it.
(Emphasis added)
[47] Re Dennerstein [1963] VR 688 at 695-696.
I draw attention here to Hudson J’s description of the task which is necessary if the benefited land is not identified on the encumbrance itself. It is one of ‘inquiry as to the circumstances’, followed by inference.[48] Hudson J then set out the contention of counsel for those propounding the covenant:[49]
But it was contended by Mr. Searby on behalf of the objectors that from the transfer it would appear that the land was transferred out of a certificate of title which comprised an area of land known as the “Como” estate, that from an inspection of the lodged plan of subdivision of this estate the lots therein could be identified and by searches of the transfers of those lots, it could be ascertained as a matter of reasonable inference that the transfers were made pursuant to a common building scheme and what were the lands affected thereby and subjected to the burden and entitled to the benefit of the restrictions imposed by the scheme.
[48] ReDennerstein [1963] VR 688 at 696.
[49] ReDennerstein [1963] VR 688 at 696.
That submission is for all practical purposes the same as the submission put by the respondents on this appeal. It was rejected by Hudson J:[50]
In my view, a purchaser of land under the Transfer of Land Act is not bound to prosecute inquiries and searches and make deductions such as would be involved if Mr. Searby’s contentions were accepted. Even when all the materials and evidence in relation to the circumstances under which an estate has been subdivided and sold are available it is not by any means easy to determine whether the sale of allotments in the estate has been made under or pursuant to a common building scheme. To require a person interested in purchasing one of those allotments to make this determination after obtaining the necessary evidence perhaps years after the original sale if it is available would render conveyancing a hazardous and cumbersome operation, and, in the case of dealings in land under the operation of the Transfer of Land Act, would defeat the object of the Act and destroy in large measure the efficacy of the system sought to be established thereby.
[50] ReDennerstein [1963] VR 688 at 696.
The preceding analysis of the decisions in Clem Smith, Burke v Yurilla and Re Dennerstein is the same as that of Perry J in Netherby Properties Pty Ltd v Tower Trust Ltd (Netherby).[51]The factual circumstances are not dissimilar to this matter. In 1936, Elders Trustee and Executor Company Ltd (Elders), which later came to be known as Tower Trust Ltd (Tower Trust), subdivided land in an estate, of which it was executor and trustee, into 43 allotments. The allotments were laid out in two different LTO plans. In November 1950, 35 of the allotments were sold by auction. All allotments were sold subject to an encumbrance executed in favour of Elders, and its successors and assigns, but made no specific reference to Elders in its capacity as the trustee of the other allotments in the building plan.
[51] (1999) 76 SASR 9.
As in this case, a brochure, which included a plan of the subdivision, was admitted into evidence. However, unlike this case, there was also evidence of its use at the time of the sale of the allotments. The judgment records that the brochure ‘was distributed by Elders in conjunction with the auction sale held in November 1950’.[52] That evidence was given by one of the original purchasers of the lots. Again, unlike this case, but importantly, the brochure itself stated that, ‘with a view to stimulating development on lines in keeping with the neighbourhood and for the mutual protection of buyers, each site will be sold subject to suitable Building Conditions incorporated in a Memorandum of Encumbrance to be registered on the Certificates of Title.’[53] The brochure informed prospective purchasers that a copy of the encumbrance was available at the offices of the agents, before setting out its main provisions.
[52] Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9 at [15].
[53] Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9 at [15].
Perry J carefully considered the seminal authorities on the enforceability of building schemes. His Honour noted that it was when the law came to treat restrictive covenants as analogous to easements that the requirement to identify the benefited land was emphasised.
Perry J accepted the academic criticism of the decision in Blacks Ltd v Rix.[54]Perry J expressed his view that, because the restrictive covenant and the rent charge were not mutually dependent, the restrictive covenant could not properly be treated as a registered interest.[55] Indeed, the respondent’s counsel accepted that Perry J was right to so conclude. Perry J then explained that, if that were so, the registered proprietor took his or her estate free of the restrictive covenant. However, Perry J accepted that he was bound to hold otherwise by the decision in Burke v Yurilla. His Honour therefore went onto consider whether, accepting that Netherby Properties must be taken to have notice of the restrictive covenant insofar as it was recorded in the registered encumbrance, the encumbrance, in the case before him, provided notice of all of the elements of the restrictive covenant necessary for it to be binding.
[54] (1962) SASR 161.
[55] (1962) SASR 161 at [58].
Perry J concluded that the covenant failed to identify the quasi‑dominant land:[56]
[71]The problem for the defendant in that respect is that the memorandum of encumbrance in question encumbers the land “… for the benefit of the said Elders Trustee and Executor Company Limited its successor and assigns …”, but makes no reference either to a building scheme or to the covenants attached to the rent charge enuring for the benefit of the remaining allotments in the building scheme.
[72]I have no doubt at all that there was in this case a building scheme in the sense in which that expression has been used in this context. But whether or not a building scheme is in existence, it is nonetheless essential if the covenants are to be enforceable by subsequent purchasers of the land said to be burdened by them, that the memorandum of encumbrance be in terms which identifies the land intended to be benefited by the covenants, or that in the case of Torrens System land, the identity of the quasi dominant tenement be identifiable by a search of the register. …
[56] Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9 at [71]-[72].
Perry J then referred to the ‘express approval’ of the decision in Re Dennerstein by Bray CJ in Clem Smith and Debelle J in Burke v Yurilla:[57]
[75]I have set out that long quotation from the judgment of Hudson J as it seems to me to be directly in point. Furthermore, what Hudson J said in that case was expressly approved by Bray CJ in the passage which I have already cited from his judgment in Clem Smith v Farrelly. The point is put beyond doubt in the judgment of Debelle J in Burke v Yurilla, being a judgment in which King CJ and Cox J agreed. Debelle J said:
“Before it can be held that the burden of restrictive covenant will run with the land under the Torrens System, it is necessary to establish that the land entitled to the benefit of the covenant is capable of identification from the registered document or from the register.”
(Citations omitted)
[57] Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9 at [75].

Perry J continued:[58]
[77]When Debelle J uses the expression “provided the land entitled to the benefit of the covenant can be identified from the Register”, given that this immediately follows his citation, with apparent approval, of what Bray CJ said in Clem Smith v Farrelly, it must follow that what is envisaged is that the quasi dominant tenement can be readily identified from the register, without a complex inquiry of the kind referred to by Hudson J.
[78]Furthermore, when he uses the expression “covenants which are intended to establish a building scheme”, details must appear in the encumbrance or on the certificate of title upon which the encumbrance is registered, from which the nature and extent of the scheme, and the identity of the land to be benefited, must clearly appear.
[79]In that respect, the observations by Hudson J in Dennerstein are apposite. The test cannot be regarded as satisfied if, years after a building scheme has been implemented, in this case some 38 years afterwards, there are registered encumbrances of the kind now in question, being covenants, in which there is no reference to a building scheme or to the land to be benefited by the covenants. In such circumstances, a purchaser is put to “prosecute inquiries and searches and make deductions” which would necessarily involve a most extensive inquiry locating the plan of the subdivision and piecing together the picture which may be obtained by tracking down the individual titles and the encumbrances noted upon them. Here, there was not even anything on the face of the restrictive covenant or on the face of the title to alert a purchaser of the land to the fact that it might have been part of a building scheme. The encumbrance is expressed simply to be in favour of Elders, and it is, for all intents and purposes, a mere covenant in gross.
(Citations omitted; emphasis in original)
[58] Netherby Properties Pty Ltd v Tower Trust Ltd (1999) 76 SASR 9 at [77]-[79].
Those passages clearly preclude the broader search of other Certificates of Title, and the drawing of inferences from the encumbrances registered on them for which the respondents contend.
In their written submissions, the respondents described the judgment of Perry J in Netherby as ‘a masterly exposition of the law’. That it is. They also contended that it was distinguishable on its facts, but no factual differences which could possibly have any legal significance were identified. Such factual differences as there are serve only to make this matter a priori case for holding that there has been no notice of the benefited land. The judgment of Perry J denies the essential premise of the respondents’ case.
In Vrakas v Mills,[59] Hargrave J followed Re Dennerstein in yet another case in which a transfer was noted on the title as one which included a restrictive covenant but which neither claimed the existence of a building scheme nor identified the benefited land. The parties who asserted that the restriction was binding relied on the existence of a plan of subdivision, and the other title issued under it, to make up for the deficiency. Hargrave J dismissed their contention for the following reasons:[60]
[59] [2006] VSC 463.
[60] Vrakas v Mills [2006] VSC 463 at [46]-[50].
[46]… I do not accept these submissions. They are to the same effect as the submissions made in Re Dennerstein on behalf of the objectors, which were rejected. For the reasons stated in Re Dennerstein, they should be rejected here also.
[47]In the alternative, it was submitted on behalf of the defendants that the decision in Re Dennerstein is wrong and I should decline to follow it. In this regard, reliance was placed upon some criticisms of Re Dennerstein by Gillard J in Fitt v Luxury Developments. In that case, the restrictive covenant was expressed to be in favour of the vendor and his assigns ‘of so much of the land described in [the head title] as is represented by the Lots on the said Plan of Subdivision other than the land hereby transferred and every part thereof.’ Furthermore, in that case, the plan of subdivision contained a notation on each page in the following form:
All Lots on P/S8402 are Affected by a Building Scheme.
[48]In these circumstances, it was clear that the Register contained full notice of both the fact that a building scheme was asserted and of the lands affected thereby, being all of the lands comprised in the plan of subdivision. In these circumstances, it was unnecessary for Gillard J to decide whether he was bound to follow Re Dennerstein, because the notice required by it had been given.
[49]However, by way of obiter dicta, Gillard J expressed some disapproval of Re Dennerstein. In my opinion, when analysed for their full effect, Gillard J’s criticisms of Re Dennerstein do not assist the defendants in this case. This is because those criticisms are limited to the necessity for giving notice of the existence of a building scheme. On my reading, Gillard J’s comments do not contain any criticism of the requirement stated in Re Dennerstein that notice must be given of the identity of the lands affected by the building scheme. Indeed, Gillard J reaffirmed the need to give notice of the lands affected. First, Gillard J expressed the view that ‘there is a strong argument that the decision [in Re Dennerstein] is wrong in respect to a requirement that information in the Register must establish the building scheme’s existence.’ Second, in respect of the requirement to identify the lands affected by a building scheme, Gillard J said: ‘I do not wish to make any observation in respect to that requirement.’ Third, Gillard J expressed his conclusion in the following way:
In my view there is a very strong argument that the recording must make it clear that there is a restrictive covenant, identify the land to be benefitted and set out the restrictions and other questions concerning the basis upon which it is said to be valid and enforceable are matters for the Court and not required to be part of the information in the Register of Land.
[50]As I have said, the restrictive covenant affecting the plaintiffs’ land does not contain any notice that the covenant is for the benefit of all of the owners of the land previously comprised in the Robinson subdivision. As a result, there is no notice of the lands affected by the building scheme contended for by the defendants. Accordingly, whether or not Gillard J’s criticisms of the requirement to give notice of the existence of a scheme are correct, the plaintiffs are unaffected by the scheme relied upon by the defendants.
(Emphasis in original; citations omitted)
And here, these reasons could properly end with a judgment allowing the appeal. However, because the respondents contend that the results of a broader factual enquiry do bind a subsequent purchaser, and that Mr Fielder has standing, it is necessary to explain why even such an enquiry would not have put the appellants on notice. The enquiry on which I shall shortly embark serves only to expose the mischief and uncertainty that that approach produces. The very complexity of what follows should be reason enough to reject the respondents’ contentions. Conveyancers and their clients should not be required to undertake it, nor to choose between the competing inferences which might be drawn from the evidential material they come across.
The conveyancer’s nightmare
It is convenient to start with the Gaetjens Plan and the question of whether Lots 3 and 5 were part of a single building scheme.
The only evidence about the Gaetjens Plan is that it was found amongst the personal belongings of Betty Joan Fielder, who, with her brother, Keith Oliver Ayton, inherited the land comprised in the grandparent title from her father, Oliver George Ayton. It can be inferred that she was given the Gaetjens Plan by an agent or principal of that firm after their engagement to sell the subdivided lots. It can also be inferred that it was, at least at some point, intended to market all of the lots together. Whether or not that happened cannot be known. Unlike the case of Netherby, there is no evidence of an auction, or when, how and to whom the plan was shown. There is no evidence whatsoever of what, if anything, was said to purchasers of the lots as to which land the benefit of the restrictive covenant in the registered encumbrance accrued. As to that, there are many possibilities.
The respondents’ case as to standing is premised on drawing an inference that the first purchasers were told or came to believe from what they read and saw that all of the lots on the Gaetjens Plan were part of a single building scheme, and that the benefit of the covenant adhered to all of the lots. But why should that be so? The allotments in Deposited Plan 8199 all front Riverside Drive, but only share rear fences with allotments on Deposited Plan 7593. They naturally fall within one scheme. The allotments in Deposited Plan 7593 front small internal streets, which are not thoroughfares like Henley Beach Road and Riverside Drive. They too would naturally form a single building scheme. Lots 1 to 5 all front Henley Beach Road, an arterial road. There is every reason why they might have formed a distinct smaller scheme with different interests.
In the absence of evidence as to the common vendors’ intention and the communication of that same intention to the first purchasers of Lot 3, Mr and Mrs Boin, and to the original purchasers of Lot 35, it is not possible to distinguish between the competing hypotheses which might be inferred. The burden of the appellants’ contention on this issue is not that the failure to encumber all of the Certificates of Title abstracted from the grandparent title means that there is no building scheme. It is that the Gaetjens Plan is not evidence of how much of the grandparent title was laid out for sale as a single, or several, building scheme. It is for that reason that Mr Fielder has not shown that Lot 35 is part of the same building scheme as Lot 3. He therefore has no standing.
I turn now to the notice which the respondents contend must be imputed to the appellants. The encumbrance registered on the Certificate of Title of Lot 3 is described by its coversheet as a ‘building scheme’, but the failure to identify the land benefited by the covenant renders the notice it gives ineffective against subsequent bona fide purchasers for value. The encumbrance fails to identify the building scheme it purports to relate to. Plainly, on the authority of Burke v Yurilla, if the covenant appearing in the registered encumbrance had identified the benefited land by reference to the new Certificates of Title issued on the cancellation of the grandparent title, the appellants would have been bound.
So too if the covenant had referred to the building scheme over the land in the Deposited Plan 7593, Deposited Plan 8199 and Lots 1 to 5 (also identified by the letters M, N, O and P respectively) in the plan of the re-subdivision on Docket No. 669/64. A covenant drawn in that form would have incorporated, by reference, into the encumbrance, and onto the Certificate of Title on which it was registered, public documents deposited with the Registrar-General.
The process of identifying the benefited land for a covenant so drawn would involve no more than reading the register. I acknowledge that to appreciate the legal significance of the words of the registered instruments may require some legal or conveyancing knowledge. But that is beside the point. The process of identifying the benefited land would, as I earlier observed, simply be a matter of reading the instruments registered against the Certificate of Title, together with the public documents it incorporated by reference.
It is important to emphasise, however, that a deposited plan is not itself part of the Register Book. The deposited plans prepared for the subdivision of the grandparent title in this case were received by the Registrar-General pursuant to s 101 of the RPA, as it then stood. Section 101 of the RPA has since been repealed, but it was enacted as a consumer protection measure, prohibiting the sale of lots in land which was comprised in a single title (like the grandparent title in this case) unless a plan of the subdivision showing the lots had first been deposited with the Registrar‑General. It provided:
101. Deposit of plans by persons subdividing land.
(1)     Any registered proprietor subdividing land for the purpose of selling the same in allotments shall deposit with the Registrar-General a map or plan, in duplicate, of such subdivision. Such map or plan shall exhibit, distinctly delineated, all roads, streets, passages, thoroughfares, squares, or reserves appropriated or set apart for public use; and also all allotments into which the said land may be divided, marked with distinct numbers or symbols; and every such map or plan shall be signed by the registered proprietor, or his attorney, and shall be accompanied by a declaration by a licensed surveyor that he has personally surveyed such land, and that such a map or plan is a correct delineation of the subdivision thereof.
(2)     Any registered proprietor subdividing land for the purpose of selling the same in allotments who—
(a)neglects or fails to deposit a map or plan of such subdivision as required by subsection (1) hereof; or
(b)sells or offers for sale, or conveys or transfers, such land, or any part thereof, in allotments, before such map or plan is deposited; or
(c)after such map or plan is deposited, sets apart, without the consent in writing of the Surveyor-General, or of some other person to be authorized by the Minister in that behalf, any reserve or allotment on such land other than a reserve or allotment shown on the deposited plan,
shall be liable to a penalty of not more than two hundred dollars.
(3)     Any licenced land broker or other person acting as the agent of any registered proprietor who as such agent sells or offers for sale any land contrary to subdivision (b) of subsection (2) hereof shall be liable to a penalty not exceeding two hundred dollars.
(4)     This section shall apply to any person, whether the registered proprietor or not, who subdivides any land which is subject to the provisions of this Act, for the purpose of selling the same in allotments, and to any licensed land broker or other person acting as the agent of such a person.
(5)     This section does not apply to the division of land into units in accordance with a strata plan, within the meaning of Part XIXB of this Act, deposited by the Registrar‑General in the Lands Titles Registration Office under that Part.
(Emphasis added)
As we shall see, additional regulatory requirements were imposed on subdivisions, and re‑subdivisions, by the Town Planning Act 1929 (SA). I have emphasised by underlining in the reproduction of the section that the plan of subdivision is deposited but is not registered. In any event, a plan of subdivision must precede the issue of new Certificates of Title and, if it were to be registered, could only be registered against the parent or grandparent title, which is ultimately cancelled in whole or in part. It can therefore not affect the indefeasibility of title to the land comprised in the new certificates.
Even though the deposited plan of subdivision and the ‘dockets’ to which I have referred are not part of the Register Book, they are records of the Lands Titles Office which are maintained for a variety of purposes, but in particular so that they may be incorporated by reference onto a Certificate of Title. The Deposited Plans and dockets put into evidence show that they were working documents which were amended from time-to-time by developers, but maintained so that when all was finalised, Certificates of Title could be issued in conformity with the subdivisions which had been certified by surveyors, the Town Planning Commissioner, the Commissioner for Highways and the relevant local council.
In the absence of an express incorporation of a deposited plan in the encumbrance itself by reference to which of the benefited land is identified, much more is required to locate the benefited land than a mere reading of the Register Book. It is necessary to go down to, and then draw inferences of fact from, the two Deposited Plans, the application for approval of a re-subdivision, and the terms of encumbrances burdening other land registered on other Certificates of Title, appearing in different Volumes and Folios of the Register Book. On the respondents’ contention, that process then burdens the registered proprietor by reference, not only to the instruments specified by s 69 of the RPA, i.e. those notified on the registered proprietor’s Certificate of Title, but by reference to instruments notified on the Certificates of Title, extant or cancelled, of other land.
It will be remembered that, under Deposited Plan 8199, 10 new titles were issued (Lots 24 to 30 and 36 to 38 in the Gaetjens Plan), and under Deposited Plan 7593, 38 new titles were issued (Lots 7 to 23, 31 to 35 and 39 to 54 of the Gaetjens Plan). No plan was deposited for the five house blocks on the northern side of Henley Beach Road (the Henley Beach Road lots), including the appellant’s land, Lot 3 (CT 5804/55), and Mr Fielder’s land (Lot 5 on the Gaetjens Plan). All five blocks were the subject of an application for subdivision consent, to which Docket No. 669/64 in the Lands Titles Office refers. The dockets are not registered instruments, and therefore are not part of the Register Book. As I earlier observed, they are the working documents of the Registrar-General.
The template encumbrance, on which the encumbrance registered on the Certificate of Title for Lot 3 was prepared, contains a proforma reference to a deposited plan, with space for the insertion of the number of the deposited plan. However, on the Lot 3 encumbrance that reference has been crossed out by typing over, and there is no numerical reference to a deposited plan. The template used for Certificates of Title for land in each of the Deposited Plans (DP 8199 and DP 7593) identifies the burdened land by reference to the lot number allocated to it in the applicable deposited plan.
In the process of drawing inferences for which the respondents contend, different conclusions might reasonably be reached by different persons on a perusal of the two Deposited Plans and the Docket No. 669/64. That result cannot be accepted in a registration system because it introduces radical uncertainty into a scheme that has, as its very purpose, certainty. As we shall see, in this case, for example, a real question would arise as to whether a reasonable subsequent purchaser of Lot 3, who cannot have knowledge of the Gaetjens Plan, inspecting the other Certificates of Title and plans deposited in the Lands Titles Office, should infer that the benefited land is the land in both of the Deposited Plans and the application for re-subdivision, or only the land within the latter.
It is necessary now to plunge into the enquiry which the respondents contend shows that the benefited land includes Mr Fielder’s Lot 35.
What has been referred to as the grandparent title was Folio 85 in Volume 2442 of the Register Book, but as we shall see, that Certificate of Title has long been cancelled. The grandparent title is contained in Appendix 1 to these reasons. It shows that Keith Oliver Ayton and Betty Joan Fielder inherited that land from their father, Oliver George Ayton, and they became registered as proprietors on 28 November 1961.
The first transfer of any land out of their hands noted on the grandparent title was of certain land marked ‘S in Docket No. 1279 of 1963’ which vested in the Corporation of City of West Torrens for a road pursuant to s 14 of the Town Planning Act 1929-1957. Docket No. 1279/63 does not contain a deposited plan. A stamp placed on the front page of the grandparent title notes that an application for re‑subdivision to be found in Docket No. 1279/63 is approved. From a plan in that Docket No. 1279/63 which is headed ‘Proposed Resubdivision Under Sec 11 of the T.P. Act’ and bears the alphanumerical identification T.P. 1279/63, it appears that the strip of land ‘S’ was a small portion of land used to widen the road, now known as Susan Street, as required by the West Torrens Council. That plan is contained in Appendix 2 to these reasons. The strip of land ‘S’ also appears to be marked as Lot 59 on the plan of subdivision DP 7593, and was ultimately included in a new single Certificate of Title which was issued for all of the roads established by DP 7593.[61] DP 7593 is contained in Appendix 3 to these reasons. It can be accepted that the ‘TP Act’ is the Town Planning Act 1929 (SA). ‘Plan of subdivision’ and ‘plan of re-subdivision’ are terms defined by s 2 of the Town Planning Act 1929 (SA). [62] The primary distinction is between those subdivisions which create new roads and those which do not.
[61] See memorial of cancellation on the grandparent title.
[62] 2. Interpretation.
“Plan of subdivision” means—
(a)any plan which, in addition to dividing or subdividing the land delineated therein into allotments, shows any new or intended road, street, thoroughfare, or reserve; and
(b)any other plan which, in the opinion of the Town Planner, ought to be dealt with as a plan of subdivision:
“Plan of re-subdivision” means any plan dividing or subdividing the land delineated therein into allotments or otherwise, and not being a plan of subdivision:
“Plan” includes plan of subdivision and plan of re-subdivision.

I consider this to be a strong point in favour of the respondents and I cannot discern in the appellants’ written or oral submissions an answer to it.
The respondents next submit that density of construction is just as important to amenity as is the mode of construction – indeed, perhaps more important – and an intention to not impose any maximum number of dwellinghouses to be erected is highly unlikely. They submit in writing that if the appellants are correct in their construction, the appellants would be free to “construct 3 or 4 or 10 detached dwellings on the said land”.
The appellants’ response in writing was simply: “The suggestion that there might be as many as 10 detached dwellings on the subject land is hyperbole”. The response has the merit of brevity, but none other that I can detect.
I consider that the respondents’ submission here has both legitimacy and weight. Their essential point is that, in the light of all of the covenants, it cannot sensibly be suggested that it was the drafter’s intention to leave unaddressed the matter of the maximum number of buildings of the nature that the appellants now wish to erect. For the respondents to point out that the consequence of this submission is that there is no specified maximum, and that the appellants may therefore “construct 3 or 4 or 10 detached dwellings”, is simply to emphasise that, if the appellants submission is correct, there is no line to cross or have regard to. The respondents’ position is that the matter is indeed addressed in the covenants and that there is a specified maximum number of one.
The appellants’ position is that the matter is not addressed. If the use of the word “hyperbole” is supposed to suggest (sub silentio) the narrow point that the actual number “ten” would not be achievable due to governmental planning requirements, that might be so; but it avoids the responsibility of addressing the essential point of the respondents’ submission as outlined above.
The decision in Natraine Nominees Pty Ltd v Patton bears consideration.[200] There, the certificate of title contained a reference to a restrictive covenant which was stated in the following terms:
no building may be erected on the above described land except a brick building to be used exclusively as a residence or dwelling house only or outbuildings of any material in connection with such brick building. [Emphasis added]
[200] [2000] VSC 303.
The plaintiff made representations in advertising the property for auction as “a great two unit development”. The framework of the litigation was that even if the covenant permitted only one building to be erected, the representations would not constitute misrepresentation if a single building containing two units could be erected without breaching the covenant. Therefore, the question to be determined was whether a single building containing two units was caught by the covenant. Smith J held that on the correct construction of the covenant only one building could be erected. His Honour stated:
16. I note that on reading the restrictive covenant for the first time, without the benefit of authority, my initial impression was that the restrictive covenant forbade any development involving two units of residence. My initial impression was that it sought to confine development to a single brick building which contained within it a single residential unit. On further consideration, however, and having considered the authorities, I have reached a different conclusion.
17. I remain of the view that the reference to "a residence" was intended as a reference to a single residential unit. The problem facing the plaintiff, however, lies in the words "dwelling house".
His Honour proceeded to hold that the traditional view was that a dwelling house could contain more than one separate residence and therefore a single building containing two units was not caught by the covenant. His Honour stated:[201]
21. It seems to me that the critical point that emerges from these authorities is that the words "dwelling house" in their colloquial and ordinary meaning can include a building in which there is more than one residential unit depending upon the layout and structure of the building. … a building that for exterior purposes appears to be one house containing a single entrance could contain within it two residential units and not offend the restrictive covenant. The word "unit" in this content ordinarily refers to an accommodation unit in a building or group of buildings.
22. I am unable to point to anything in the restrictive covenant itself which would suggest that the words "dwelling house" should be read down from what appears to have been accepted for many years to be the ordinary meaning of the words. On the contrary, as counsel for the defendants has pointed out, to construe "dwelling house" so as to confine it to a single residence would render the reference to "a residence" superfluous. I also note that the covenant does not qualify the words "dwelling house" with words such as "one", "single" or "private".
[201] [2000] VSC 303.
The decision in Natraine assists the present respondents in several ways.
First, the covenant in Natraine was very similar to that in the present case. Here, the question is whether two detached dwellings can be erected and Smith J’s decision in Natraine was that they could not be. Further, it may be said that the present position is a fortiori to Natraine in that here the covenant does qualify the words “dwellinghouse” with the words “for private residential purposes” making the position all the more clear.
Secondly, it is obvious that in the present case the covenants are more comprehensive than in Natraine in that they go on to prohibit the very situation addressed in Natraine of two residences within one dwellinghouse. Of importance, such scenarios had been explored long before the decision in Natraine and long before the date of the drawing of the present covenants in the early 1960s. Thus in Natraine, Smith J alluded to a 1937 decision on this very point. His Honour stated:
Counsel for the defendants drew my attention, however, to the case of Munns v Watson [1937] VicLawRp 36; 1937 VLR 178 where the restrictive covenant prevented the erection of any buildings “except a double fronted house with outbuildings for residential purposes”. That restrictive covenant was held not to prevent the construction of two separate residential units within the double fronted house.
The respondents therefore submit that, having regard to precedents such as the above, it was very natural for the draftsperson to adopt a “belt and braces” approach and to add covenant 3 so as to make quite clear that multiple dwellings in any guise were prohibited ex abundanti cautela.
The appellants’ submissions (and the respondents’ response)
The appellants submit that if the respondents’ submissions are correct, the whole of covenant 3 is otiose because the prohibition in covenant 2 (with only the exception of a dwellinghouse (with or without outbuilding(s)) would of itself prohibit the erection of any of the structures in covenant 3.
As is apparent, I accept the respondents’ “belt and braces” approach as referred to immediately above. I consider that this submission of the appellants should be rejected.
Next, the appellants seek to rely upon the decision in Tonks v Tonks (Tonks).[202] In that case there was a scheme of development involving three lots. Lots 2 and 3 had been bound by a restrictive covenant which provided that:
[the registered proprietor for the time being] will not erect or cause or permit to be erected on the land hereby transferred or any part thereof any building other than a dwelling house …
[202] (2003) 11 VR 124.
Bongiorno J, in construing the covenant, stated:[203]
15. The task of construction commences with a determination of the purpose for which the covenant was inserted in the original contract. In this case there appear to be two possible answers to this inquiry. The covenant could be directed to ensuring that lot 3, and for that matter the whole sub-division, was maintained as a residential area without restriction on the number of dwelling houses constructed on each block. Alternatively, the purpose of the covenant might have been not only to maintain the residential character of the area but also to restrict the number of dwelling houses to one on each block.
16. … if the parties to the original covenant had wished to restrict the number of dwelling houses built on each of these lots they could have done so very simply and definitively by replacing the word “a” in the covenant with the word “one”, or by making some similar simple amendment. The true construction of the covenant is that it prohibits the placing of any building on the land unless that building is a dwelling house. Provided that any building constructed can be properly described as a dwelling house there would be no breach of the covenant. The covenant says nothing, in my opinion, as to the number of dwelling houses which might be built. To import a restriction as to the number of houses which might be built on lot 3 into the covenant would extend its effect beyond the words used by the parties without any warrant for doing so.
[203] Tonks v Tonks (2003) 11 VR 124, 127.
In my view, the circumstances in the present case are very different to those in Tonks. There, the covenants were not of the same structure as those in the present case which, as noted above, are much closer to those in Natraine.
Further, irrespective of the precise interpretation of covenant 3 (as to which see below), it is clear that the purport of covenant 3 is to limit the number of “residences” (and hence the number of residents be they individuals or families). The fact that covenant 3 demonstrates that it was intended to address the matter of the maximum number of buildings that could be erected very much supports the contention that the correct interpretation of covenant 2 is that it is indeed directed to regulating the number of dwellinghouses that can be erected (as well as their required standard of quality).
The words “any part thereof” in covenant 2
Next, the appellants contend that the phrase “any part thereof” in covenant 2 indicates that the drafter of the covenant had in mind the possibility of sub-division and that the covenant should therefore be read as if addressing a situation after sub-division had taken place so as to mean “one dwellinghouse on each of the new subdivided blocks”.
I do not necessarily accept that the draftsperson did have the possibility of sub-division in mind here. However, on an assumption that he or she did, the use of the phrase “any part thereof” would not indicate that the draftsperson meant “one dwellinghouse per each newly created lot”.
As is apparent from the authorities and textbooks, the phraseology “all or any part” of benefited land has played a significant part in the law of restrictive covenants. In brief, it was not infrequently held that if a covenant couched only in terms of “all of the land” was attached to a large area of land, then on later sub-division it might well be held by a Court that the covenant had not been intended to apply to each and every part of the original large area; with the end result being that it could not apply to each of the smaller subdivided blocks.[204] A response of draftspersons to this inconvenient outcome was to use such phraseology as “or any part of the land” so as to ensure that the covenant would in fact apply to each part of the land after sub-division.
[204]Adrian Bradbrook and Susan MacCallum, Easements and Restrictive Covenants (LexisNexis Butterworths, 3^rd ed, 2010) [13.45]-[13.63].
In my view, a draftsperson in the early 1960s with some knowledge of this area of the law may well have thought that a covenant designed to keep the number of buildings to a maximum could also be made to continue to apply after sub-division to the whole of the original area of the land by the use of that same phraseology “or any part of the land”; or simply that it was good to have the extra words there “just in case”.
Further, and in any event, I consider that the words “at any time” in covenant 2 are important in this regard. The effect of these words is that the application of covenant 2 produces the same result of restricting the total number of dwelling houses over the entirety of the estate to about fifty when viewed by reference to either of two points in time in the following manner.
The first point in time is from the date of the annexure of the covenants until any sub-division eventuated (if ever). As to this period, one approaches covenant 2 from the standpoint of the whole of Lot 3 (“the said land”) as it then was, namely subject to a prohibition on erecting more than one dwellinghouse on the whole of Lot 3 (thus ensuring a maximum number of about fifty dwellinghouse over the entire estate).
The second point in time is onwards from the date of a sub-division. As to this second period, one again approaches covenant 2 from the standpoint of the whole of Lot 3 as it had been prior to sub-division (“the said land”). There remains a prohibition on erecting more than one dwellinghouse on the whole of Lot 3 as it had stood prior to sub-division (thus again ensuring a maximum number of about fifty dwellinghouses over the entire estate).
Finally, the appellants address covenant 3. I consider that covenant 3 is important in at least two respects. The first respect is its very presence and subject matter quite apart from its precisely correct construction. By this I mean that it is clearly designed to complement the restriction in covenant 2 (relating to the number of buildings that may be erected) and to guard against certain Court precedents by a “belt and braces” approach as referred to above.
The second aspect is that covenant 3 may be an independent danger to the appellants on a certain construction, namely that the term “multiple dwellings” standing alone might be construed as meaning “more than one dwelling ‘on the said land’”, those last words in parentheses meaning the same area of land before and after any sub-division.
So it is that the appellants submit that the term “multiple dwellings” should here be read as bearing the meaning given to that term in the early 1960s by the Regulations to the Building Act 1923 then in force, namely the definition that a multiple dwelling was:
… a dwelling-house any part or parts of which are either rented, leased, let or hired out to be occupied, or adapted for occupation as the abode, residence or home of two or more families living independently of each other and in which some of the accommodation is used or is adapted to be used in common.
The submission is in effect that the terms in covenant 3, “block or blocks of flats”, “home units” and “multiple dwellings” should be read ejusdem generis with the ultimate result being that the prohibition in covenant 3 is to be read down so as not to include the particular buildings proposed to be erected by the appellants.
This submission by the appellants may be correct. However, I do not find it necessary to finally decide whether covenant 3 does independently prohibit erection of the proposed dwellings because I consider that the meaning of covenant 2 (in the context of all of the restrictive covenants) is plainly that the particular buildings proposed to be erected by the appellants are each “dwelling houses” within the meaning of covenant 2 and, as explained above, only one such building is permitted to be constructed on the said land, either before or after any subdivision of the said land.
For all of the above reasons, I conclude that, on the correct construction of the covenants, the appellants are prohibited from constructing more than one dwellinghouse on any part of Lot 3 (being CT Vol 5804 Folio 557) before or after any sub-division.
I would dismiss the appeal.
HUGHES J: I would dismiss the appeal for the reasons given by Peek J.
APPENDIX 1: THE GAETJENS PLAN
APPENDIX 2: The Real Property Act 1886 (SA) – Some relevant provisions
3—Interpretation
3(1):
-     encumbrancee means the registered proprietor of an encumbrance;
-     encumbrancer means the registered proprietor of land subject to an encumbrance;
-     instrument means any document capable of registration in the Lands Titles Registration Office, or in respect of which a record is under an Act directed, required or permitted to be made in the Register Book, and includes a document that may be registered or recorded in the Register of Crown Leases under section 93
3(2) The description of any person as proprietor, transferor, transferee, mortgagor, mortgagee, caveator, caveatee, encumbrancer, encumbrancee, lessor, lessee, or trustee, or as seized of, having, or taking any estate or interest in land shall be deemed to extend to and include the heirs, executors, administrators, and assigns of such person.
47—Registration of title in the Register Book
This Division applies to, and in relation to, the registration of title to land in the Register Book.
49—Folios in Register Book
Each certificate of title shall constitute a separate folium of the Register Book, and the Registrar-General shall record thereon distinctly and separately all memorials affecting the land included in each certificate.
51—Requirements of memorial
Every memorial entered in the Register Book shall be sealed with the seal of the Registrar-General, and shall state the nature of the instrument to which it relates and such other particulars as the Registrar-General directs, and shall refer by number or symbol to such instrument.
51C—Issuing certificates of title
(1) If title to land is registered under this Division, the Registrar-General must issue a certificate of title setting out the registered proprietor's estate or interest in the land and the encumbrances, liens or other interests (if any) to which the estate or interest is subject.
57—Effect of registration or recording of instruments
(1) Subject to subsection (2), every instrument will, when registered or recorded, be deemed part of the Register Book.
(2) Subsection (1) does not operate to deem an instrument registered or recorded in the Register of Crown Leases part of the Register Book.
(3) Every instrument registered in the Register Book or the Register of Crown Leases will be deemed to be a deed duly executed by the parties.
65—Search allowed
(1) Subject to this section, any person may have access to the Register Book, and to all instruments lodged or deposited in the Lands Titles Registration Office, for the purpose of inspection during the hours, and on the days, appointed for search.
(1a) If an instrument is lodged electronically, the Registrar-General may determine that only the instrument as registered is to be accessed.
69—Title of registered proprietor indefeasible
The title of every registered proprietor of land shall, subject to such encumbrances, liens, estates, or interests as may be notified on the certificate of title of such land, be absolute and indefeasible, subject only to the following qualifications: …
77—Memorials on certificates
The Registrar-General shall record on every certificate issued by him, and in such manner as to preserve their respective priorities, memorials of all subsisting mortgages, leases, and encumbrances, and of any dower or rent-charge to which the land may be subject; and if such certificate be issued to a minor or to a person otherwise under disability, he shall record thereon the age of such minor or the nature of the disability so far as known to him.
97—Transferee of land subject to mortgage or encumbrance to indemnify transferor
In every instrument transferring land mortgaged or encumbered there shall be implied the following covenant by the transferee with the transferor, and so long as such transferee shall remain the registered proprietor, with the mortgagee or encumbrancee, that is to say—That the transferee will pay the principal, interest, and other moneys secured by such mortgage or encumbrance, after the rate and at the time or times specified therein, and will indemnify and keep harmless the transferor from and against such principal, interest, and other moneys and from and against all liability in respect of any of the covenants contained in such mortgage or encumbrance or by this Act implied on the part of the transferor.
128B—Encumbrance of land
(1) If land is to be charged with, or made security for, the payment of an annuity, rent-charge or sum of money in favour of a person, an encumbrance in the appropriate form must be executed by the registered proprietor and the person.
(2) This section only applies to land intended to be charged or made security under this Act by the registration of an encumbrance.
129—Contents of mortgage or encumbrance
(1) Every mortgage or encumbrance to which section 128 or 128B applies must, for description of the land intended to be dealt with, refer to the certificate of the land, or give such other description as may be necessary to identify the same, and contain an accurate statement of the estate or interest intended to be mortgaged or encumbered.
(2) Where, in any such mortgage or encumbrance—
(a) the rate of interest, the manner of repayment of the principal sum and interest or any other term that, in the opinion of the Registrar-General, relates to the substance of the transaction is determined by reference to some other document; or
(b) the mortgagor or encumbrancer is required to—
(i) build in accordance with any plans and specifications which are in existence at the date of the mortgage or encumbrance; or
(ii) do or refrain from doing any other act or thing by reference to some other document and the requirement is not, in the opinion of the Registrar-General, adequately set forth in the instrument lodged for registration,
the Registrar-General may require that a copy of the plans and specifications or the document concerned be attached to the mortgage or encumbrance or be deposited in the General Registry Office or in any other public registry in the State.
249—Equities not abolished
(1) Nothing contained in this Act shall affect the jurisdiction of the Courts of law and equity in cases of actual fraud or over contracts or agreements for the sale or other disposition of land or over equities generally.
(2) And the intention of this Act is that, notwithstanding the provisions herein contained for preventing the particulars of any trusts being entered in the Register Book, and without prejudice to the powers of disposition or other powers conferred by this Act on proprietors of land, all contracts and other rights arising from unregistered transactions may be enforced against such proprietors in respect of their estate and interest therein, in the same manner as such contracts or rights may be enforced against proprietors in respect of land not under the provisions of this Act: Provided that no unregistered estate, interest, contract, or agreement shall prevail against the title of any bona fide subsequent transferee, mortgagee, lessee, or encumbrancee, for valuable consideration, duly registered under this Act.

See generally Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, 508,

518; Marten v Flight Refuelling Ltd [1962] Ch 115, 131; Re Dolphin’s Conveyance [1970] Ch 654, 659; Texaco Antilles Ltd v Kernochan [1973] AC 609, 624.