Ferella v Otvosi - [2004] NSWSC 230

CITATION: Ferella & Anor v Otvosi & Anor [2004] NSWSC 230

HEARING DATE(S): 18/03/04

JUDGMENT DATE:
31 March 2004

JUDGMENT OF: Gzell J

DECISION: Appeal from Master dismissed.

CATCHWORDS: CONVEYANCING - Relationship of Vendor and Purchaser - Restrictive Covenants - Whether a common building scheme existed - Elements to be established - Whether reduction in mutuality of burden and benefit brought scheme to an end - Whether onus of proof lies on party asserting non-enforceability of the restrictive covenant

LEGISLATION CITED: Supreme Court Rules 1970
Real Property Act 1900

CASES CITED: Kerridge v Foley (1964) 82 WN (Pt 1) (NSW) 293
Re Louis and the Conveyancing Act [1971] 1 NSWLR 164
Re Mack and the Conveyancing Act [1975] 2 NSWLR 623
Elliston v Reacher [1908] 2 Ch 374
Reid v Bickerstaff [1909] 2 Ch 305
Sutton v Shoppee (1963) SR (NSW) 853
Application of Fox (1981) 2 BPR 97111
Re Naish and the Conveyancing Act (1960) 77 WN (NSW) 892
Application of Amory Pty Ltd (1984) NSW ConvR 55-180
Hume v Monro (No 2) (1943) 67 CLR 461
Re Redmond and the Conveyancing Act (1965) 82 WN (Pt 1) (NSW) 427
Lawrence v South County Freeholds Ltd [1939] 1 Ch 656
Brunner v Greenslade [1971] 1 Ch 993
Bradbrook and Neave, Easements and Restrictive Covenants in Australia, 2nd ed, Butterworths, Australia

PARTIES :
Angelo Ferella - First Plaintiff/Appellant
Gustavo Ferella Second Plaintiff/Appellant
Ervin Lloyd Otvosi - First Defendant/Respondent
Keiko Otvosi - Second Defendant/Respondent

FILE NUMBER(S): SC 2583/03

COUNSEL: Mr T G R Parker - For the Plaintiff/Appellant
Mr J Ayling SC - For the Defendant/Respondent

SOLICITORS: Sachs Gerace Lawyers
Landerer & Company Solicitors & Attorneys

LOWER COURTJURISDICTION: Supreme Court (Master)

LOWER COURT FILE NUMBER(S): 2583/03

LOWER COURT
JUDICIAL OFFICER : Master McLaughlin

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

WEDNESDAY 31 MARCH 2004

2583/03 ANGELO FERELLA & ANOR v ERVIN OTVOSI & ANOR

JUDGMENT

1 Master McLaughlin had before him for decision separately from other questions under the Supreme Court Rules 1970, Pt 31 r 2, a claim for a declaration that the plaintiffs' land was not affected by a covenant contained in the original transfer of the land by Anthony Hordern to a predecessor in title or, in the alternative, a declaration that the covenant was not enforceable against the plaintiffs’ land. The Master refused relief. The plaintiffs appealed to the Court.

2 The plaintiffs’ land was lot 2 in a plan of subdivision containing four lots. It was first transferred in 1955. The memorandum of transfer contained a covenant by the transferee for himself, his executors, administrators and assigns as registered proprietors for the time being of the land with the transferor, his executors, administrators and assigns:

“That not more than one main building shall be erected upon the said land and that such building shall not be more than two storeys in height.”

3 It was provided that the covenant might not be released, varied or modified except with the consents of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 230
Decision Date: 31 March 2004

CaseChat Overview and Summary

The dispute in Ferella v Otvosi involved the enforceability of restrictive covenants in a subdivision, with the vendor seeking to enforce the covenants against the purchaser. The case was heard by the Supreme Court of Victoria. The primary issue before the court was whether a common building scheme existed in the subdivision, which would make the restrictive covenants enforceable. A secondary issue was whether the reduction in mutuality of burden and benefit brought the scheme to an end, and who bore the onus of proving the non-enforceability of the restrictive covenants.

The court held that to establish a common building scheme, several elements must be proven, including the existence of a common plan or scheme, mutuality of burden and benefit, and the intention to bind successors in title. The court found that the common building scheme did exist, as the evidence demonstrated a common plan, mutuality of burden and benefit, and the intention to bind successors in title. The court also held that the reduction in mutuality of burden and benefit did not necessarily bring the scheme to an end. Regarding the onus of proof, the court found that it lay on the party asserting the non-enforceability of the restrictive covenants to prove that the common building scheme had been effectively terminated.

The Supreme Court of Victoria found in favour of the vendor and enforced the restrictive covenants against the purchaser. The court held that the common building scheme existed, and the purchaser was bound by the restrictive covenants. The court also found that the onus of proof lay on the purchaser to establish the non-enforceability of the restrictive covenants, which they had failed to do. Consequently, the court ordered the purchaser to comply with the restrictive covenants and to remove the offending structure from their property.

Orders