Kooralbyn Valley Pty Ltd v Pillay & Kooralbyn Real Estate Pty Ltd

[1998] QSC 14

IN THE SUPREME COURT

OF QUEENSLAND  No. 11362 of 1997

[Kooralbyn Valley Pty Ltd v Pillay & Kooralbyn Real Estate Pty Ltd]

BETWEEN:
  KOORALBYN VALLEY PTY LTD
  Plaintiff

AND:
  SHUNMOOGAN PRAGALATHAN PILLAY &
  KOORALBYN REAL ESTATE PTY LTD

First and Second Defendants

CATCHWORDS:                 CONTRACT - construction of building covenant - strike out application.

Solicitors:  Hopgood and Ganim for the plaintiff respondent.

Hearing Date:  18 February 1998

REASONS FOR JUDGMENT - MUIR J.

Judgment delivered 5 March 1998

The applicant second defendant brings the following application by notice of motion:-

“The claim for the plaintiff for relief by way of injunction, damages and costs filed in Brisbane on 16 December 1997 be struck out or stayed in perpetuity or such other orders that the court shall deem meet.”

The plaintiff respondent is a real property developer, or at least, the owner of a large parcel of subdivided land.  The statement of claim delivered in the action alleges that:-

(a)The respondent sold to the first defendant a parcel of land in a residential subdivision pursuant to a contract in writing dated 2 April 1993 (“the contract”);

(b)The contract contained a building covenant;

(c)The applicant, a real estate agent, became aware of the contract, of the building covenant and of the terms and conditions thereof;

(d)The applicant with intent to injure the respondent procured and induced the first defendant in breach of contract to refuse to comply with the building covenant;

(e)The respondent in consequence has suffered loss and damage.

The applicant, who is represented before me by one of its directors, Robert Delahunty, put its argument on two bases.  The first was, in substance, that the action was an abuse of process.  The abuse of process allegedly arose because the respondent had not sought to enforce similar covenants against others or had acquiesced in the breach of such covenants by others or had itself engaged in conduct which, had it been done by a covenantee, would have been in breach of the building covenant.

Some of the conduct complained of by the applicant is conduct engaged in by another company or companies which is or are related to the respondent.  A number of photographs of signs bearing the name “Kooralbyn Developments” have been exhibited to the applicant’s material.  The signs are, or have been, on blocks in the subject estate.

Even if it is possible to look at the conduct of companies related to the respondent and equate that conduct with that of the respondent, it does not seem to me that any basis is disclosed for striking out the action on the grounds of abuse of process.  I note that the restrictive covenant expressly contemplates that the respondent may give consent to a sign which would otherwise be in breach of covenant.  There is other evidence suggestive of a genuine concern on the part of the respondent to enforce the restrictive covenant.  In order to succeed the applicant needed to show a substantial intention on the part of the respondent to obtain an advantage or other benefit, to impose a burden or to create a situation that is not reasonably related to an order that might be made in the action;  Williams v. Spautz (1992) 174 CLR 509.

The other basis of the application was that the building covenant only applied in circumstances in which a purchaser or successor in title of a purchaser was erecting or had erected a dwelling house.  Because, it was asserted, no dwelling house had been or was being erected by the first defendant in this case, the building covenant had no application.  The building covenant relevantly provides:-

“The purchaser acknowledges and agrees for himself, his executors, administrators and assigns that the subject land is part of a large development, the object of which is to establish a modern and well designed resort community and it is desirable that control be exercised by the Vendor or through its agents for the protection and in the interests of the Purchaser and of all Purchasers in relation to the nature and type of construction to be erected on all lands within the Development which includes the subject land and in recognition of the desirability of the construction of sound, modern and attractive development throughout the area, the Purchaser agrees and covenants with the Vendor that the Purchaser of any successor in title of the Purchaser who erects a dwelling shall do so to the following standards: (emphasis supplied)

1.The floor area of the dwelling excluding patios, shall be not less than 110 square metres.

2.All roofs to be clay or concert tiles or dark-painted iron.

3.Exterior cladding to be not less than seventy five percent (75%) clay brick or rendered masonry or timber used in an appropriate manner will be considered by the Vendor.

4.Any second hand or substandard material is not to be used in the erection of a dwelling.

5.The Character of the area is dependent on its large trees and these are to be retained wherever possible.

6.No improvement, excavation or other work which in any way alters the subject land from its natural state shall be made or done except upon strict compliance with and within these covenants.

7.The subject land and the appurtenances thereto shall be maintained in good condition and repair, and noxious weeks shall be removed, refuse shall be not left thereon and in general the subject land shall be maintained in such a manner as to not create a fire hazard.  Such maintenance shall be at the Purchaser’s sole cost and expense.  No noxious or offensive activity shall be carried out upon the subject land which may be or become a nuisance, or cause unreasonable embarrassment, disturbance or annoyance to other owners.

8.No signs whatsoever, excluding name or number plates but including without limitation, commercial, political or similar signs shall be erected or maintained on the subject land except those signs which are required to be displayed by any Local Authority or those permitted expressly in writing by the Vendor.

. . . .

11.No part of the subject land shall be used for any purpose other than for the erection of a private residence and/or primary production provided that no animals others than horses, sheep, cattle, domestic animals and pets shall be permitted on the subject land.  No part of the subject land shall be used for raising or breeding of pigs or poultry and no part of the subject land may be used for commercial market garden uses.

. . . .

22.No fence shall be erected on the subject land to subdivide it from any adjoining land owned by the Vendor, without the consent of the Vendor, but subject as hereinafter provided such consent shall not be withheld if the fence is erected without expense to the Vendor . . .

23.The Purchaser acknowledges that the relevant Local Authority or other statutory Authority, water supply lines, sewerage pipelines may traverse the subject land and the Purchaser acknowledges that any such requirements will not affect the obligations of the Vendor hereunder or under the Contract.

. . . .

The Purchaser further agrees not to construct any improvement upon the subject land unless he has first obtained the permission of the Vendor and shall have also obtained the appropriate Local Authority consents.  The Vendor shall be entitled to withhold consent in circumstances where the aforesaid covenants have been or will as a consequence of the proposed construction not be observed.”

It seems clear that “of” which appears between “Purchaser” and “any successor in title” is a typographical error and should have been “and”.  If the words emphasised in the introductory part of the building covenant are given a literal meaning, the numbered paragraphs in the covenant would apply only where the purchaser or any successor in title of the purchaser had erected a dwelling.  If reference (in the introductory words) is deleted to “successor in title” the covenant reads:-

“The Purchaser agrees and covenants with the Vendor that the Purchaser who erects a dwelling shall do so to the following standards . . .”.

The words “who erects a dwelling” do not appear to qualify only “any successor in title of the Purchaser”.  If reference to successors in title and erection of a dwelling house were to be deleted, the introductory words would read:-

“The Purchaser agrees and covenants with the Vendor that the Purchaser shall do so to the following standards.”

It is apparent that some of the numbered paragraphs are intended to apply whether or not a dwelling house has been constructed and/or to have application prior to the construction of a dwelling house.  Clause 11 is an obvious example.  It envisages the possibility that the land may be used for primary production to the exclusion of residential purposes.  The words “who erects a dwelling, shall do so to the following standard” are not apt to qualify or introduce the words in the clause.

Clauses 5, 6, 7 and 8 are further examples of provisions which:-

“(a)     appear to be intended to apply whether or not a dwelling house is being or has been constructed;

(b)       are not capable of being qualified by the obligation to erect a dwelling house `to the following standards’.”

Provisions such as these then, if to be given efficacy, must be read as if unqualified by the words “shall do so to the following standards”.  Those words are capable of qualifying some of the other numbered paragraphs, eg. 1, 2, 3 and 4. 

In my view, the preferred construction of the building covenant is that it be read as if it provided as follows:-

“The Purchaser agrees and covenants with the Vendor that the Purchaser or any successor in title of the Purchaser who erects a dwelling shall do so to the following standards and that . . .”

I note that the paragraph which follows paragraph 25 is a more general restrictive covenant than many of those contained in the numbered paragraphs.  It could be relied on by the respondent if I am wrong in the above conclusions.  In my view, it also tends to support the construction which I prefer. 

In the circumstances, I am unable to conclude that the statement of claim discloses no sustainable cause of action.  I order that the application be dismissed and that the applicant pay the respondent’s costs of and incidental to the application to be taxed.