Rural View Developments Pty Ltd v Fastfort Pty Ltd

Case [2009] QSC 244

SUPREME COURT OF QUEENSLAND

CITATION:

Rural View Developments P/L v Fastfort P/L & Anor
[2009] QSC 244

PARTIES:

RURAL VIEW DEVELOPMENTS PTY LIMITED ACN 122 848 042
(plaintiff)

v

FASTFORT PTY LIMITED ACN 128 989 159
(first defendant)

GRAEME ANGUS INGLES
(second defendant)

FILE NO/S:

BS 12645 of 2008

DIVISION:

Trial

PROCEEDING:

Hearing

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

24 August 2009

DELIVERED AT:

Brisbane

HEARING DATE:

11 June 2009

JUDGE:

McMurdo J

ORDER:

The contract of sale dated 21 January 2008 between the plaintiff and the first defendant be specifically performed.

CATCHWORDS:

REAL PROPERTY – EASEMENTS – EASEMENTS GENERALLY – NATURE OF AN EASEMENT – where the grantor and grantee were each subject to a positive covenant to be responsible for one half of the costs of construction, repairs, maintenance and upgrading of the infrastructure of the easement – where the grant of the easement was not conditional upon the performance of any covenant by the grantee – where the general rule is that the burden of a positive covenant does not run with the land – whether a subsequent owner of the dominant tenement would be bound by this covenant

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER MATTERS – where the first defendant had contracted to buy certain land from the plaintiff conditional upon the registration of an easement “for access and/or services … required as part of the local authority conditions of approval” – where the contract did not provide that the easement was to contain no term that had not been required by the local authority – whether the covenant that each party be responsible for one half of the upkeep of the infrastructure of the easement so affected the benefit of the easement that it made it something other than the easement for which the parties had agreed

CONVEYANCING – MATTERS ARISING AFTER COMPLETION – COVENANTS – AGAINST ENCUMBRANCES – where the first defendant had contracted to buy certain land from the plaintiff subject to “nil” encumbrances – where the easement contained a covenant that each party be responsible for one half of the upkeep of the infrastructure of the easement – where the first defendant may choose not to take the benefit of the covenant – whether the covenant constitutes an encumbrance upon the land

CONVEYANCING – BREACH OF CONTRACT FOR SALE AND REMEDIES – VENDOR’S REMEDIES – SPECIFIC PERFORMANCE – where the purchaser claims that it is unable to raise finance from banks and lenders – where the purchaser is a shell company – where the purchaser’s ability to perform the contract was always dependent upon its ability to borrow the purchase price in full – where the purchaser is one of 50 or 60 companies in a property development group controlled by the second defendant – where the second defendant is also the purchaser’s guarantor – where the second defendant has a net worth “way in excess of [the purchase price]” – whether it…

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Rural View Developments Pty Ltd v Fastfort Pty Ltd [2009] QSC 244
Case
[2009] QSC 244
Decision Date

CaseChat Overview and Summary

Rural View Developments Pty Ltd v Fastfort Pty Ltd involved a dispute over an easement granted by Rural View to Fastfort. The easement was intended for access and services as part of local authority approval conditions. The contract stipulated that the purchase was conditional upon the registration of the easement, but it did not specify that the easement should not include terms beyond those required by the local authority. The easement contained a covenant that each party was to be responsible for half of the costs of construction, repairs, maintenance, and upgrading of the infrastructure of the easement. Rural View sought specific performance of the contract, arguing that Fastfort had failed to comply with the terms of the easement.

The legal issues revolved around whether the burden of the positive covenant would run with the land, binding subsequent owners of the dominant tenement. The court had to determine if the covenant that each party be responsible for half of the upkeep of the infrastructure of the easement altered the nature of the easement, making it something other than what the parties had agreed upon. Furthermore, the court considered whether the covenant constituted an encumbrance upon the land, given that the contract specified "nil" encumbrances. Lastly, the court examined whether it would be futile or cause undue hardship to decree specific performance, considering Fastfort's financial situation and the involvement of its parent company.

The court ruled that the burden of the positive covenant did not run with the land and would not bind subsequent owners of the dominant tenement. The covenant did not alter the nature of the easement, as it was a necessary condition for the use of the land. The covenant was not an encumbrance, as it was not prohibited by the contract. Regarding specific performance, the court found that it was not futile or would not cause undue hardship to decree specific performance, as the second defendant, who controlled Fastfort and was its guarantor, had a net worth significantly exceeding the purchase price.

The court ordered specific performance of the contract, directing Fastfort to complete the purchase of the land as agreed.

Orders

Orders of the court

The contract of sale dated 21 January 2008 between the plaintiff and the first defendant be specifically performed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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