Netherby Properties Pty Ltd v Tower Trust Ltd - [1999] SASC 247

NETHERBY PROPERTIES PTY LTD v TOWER TRUST LTD
[1999] SASC 247

Civil

PERRY J The plaintiff, Netherby Properties Pty Ltd (“Netherby Properties”) challenges the validity and enforceability of restrictive covenants recorded in a Memorandum of Encumbrance registered on the title to an allotment of land (“the subject land”) situated at Netherby and purchased by it on 19 November 1998.
The defendant to the proceedings, Tower Trust Limited (“Tower Trust”) was formally known as Elders Trustee and Executor Company Limited (“Elders”) and later as Austrust Ltd (“Austrust”). As most of the relevant dealings were with the plaintiff when it was known as Elders, I will generally refer to it by that name.
Initially, the Registrar-General was joined as a defendant. Subsequently, the action was discontinued as against him.
Shortly before the hearing, an application seeking leave to intervene was lodged on behalf of Jeremy Randell who, together with his wife, is the owner of one of the allotments within the sub-division of which the subject land forms part. I gave leave in terms of his application. His counsel, Mr White, tendered an affidavit sworn by Mr Randell, and as well an affidavit sworn by John Freeman who occupies another two allotments within the sub-division.
The hearing proceeded on the basis of those affidavits and other affidavits tendered by the plaintiff. No oral evidence was called.
There is no dispute between the parties as to the essential facts upon which the matter falls to be decided. The following account of the relevant circumstances is drawn mainly from three of the affidavits which were tendered, sworn respectively by Mr Tom Doman, solicitor for Netherby Properties, Mr Donald Mackintosh, the Deputy Registrar-General, and Mr Andrew McLachlan, a solicitor employed by Tower Trust.

Factual Background

Elders was the executor and trustee of the will of Robert Henry Pulleine (“the deceased”) who died on 13 June 1936. At the time of his death the deceased was the registered proprietor of a parcel of land at Netherby. By his will, the deceased empowered Elders to subdivide the land.
Elders subdivided the land into 43 allotments. It did so in two stages. Allotments 1 and 3 to 8 (inclusive) were laid out in LTO Plan No 4273, deposited in the Lands Titles Office on 8 January 1949. The balance of the land, being allotments 2 and 9 to 43 (inclusive) were laid out in LTO Plan No 4500, deposited on 3 August 1950. In both plans, the sub-division is described as “Portion of the Township of Netherby”. Eventually, separate Certificates of Title were issued with respect to each allotment.
In November 1950, Elders sold 35 of the allotments by auction. The evidence does not establish when the remainder was sold. All of the allotments were sold subject to an encumbrance executed in favour of Elders by the purchaser, registered on the Certificate of Title relating to each allotment pursuant to s128 of the Real Property Act 1886 (“the Act”).
It is important to note the terms of the…

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.

Continue reading Netherby Properties Pty Ltd v Tower Trust Ltd

Details

AGLC: Netherby Properties Pty Ltd v Tower Trust Ltd [1999] SASC 247
Case: [1999] SASC 247
Decision Date: 17 June 1999

CaseChat Overview and Summary

Netherby Properties Pty Ltd sought a declaration that restrictive covenants registered against their property were unenforceable. Tower Trust Ltd, the former executor of the original vendor’s estate, sought to enforce the covenants. The covenants were registered in the form of a rent charge under the Real Property Act 1886. The court considered whether the covenants were enforceable despite the fact that the identity of the land benefiting from the covenant was not ascertainable from the covenants themselves or readily ascertainable from the Register. The court found that the covenants were unenforceable because the quasi dominant tenement was not identifiable. The court held that the restrictive covenants must be regarded as covenants in gross, given that the identity of the land intended to benefit from the covenants was not ascertainable from the covenants themselves, or readily ascertainable from the Register. The court concluded that Netherby Properties was entitled to a declaration that the covenants contained in the Memorandum of Encumbrance were unenforceable against it.

In this case, the court had to decide whether the restrictive covenants registered against the plaintiff’s property were enforceable. The court found that the covenants were unenforceable because the quasi dominant tenement was not identifiable. The court held that the restrictive covenants must be regarded as covenants in gross, given that the identity of the land intended to benefit from the covenants was not ascertainable from the covenants themselves, or readily ascertainable from the Register. The court concluded that Netherby Properties was entitled to a declaration that the covenants contained in the Memorandum of Encumbrance were unenforceable against it. The court also noted that the encumbrance was a valid encumbrance insofar as it created a rent charge. However, the restrictive covenants were unenforceable against the plaintiff for the reasons which the court had given. Furthermore, it would be wrong to declare the covenants void, as they were operative as between the original vendor and purchaser of the land.

Orders