Sly v United Development Corporation Pty Ltd

Sly v United Development Corporation Pty Ltd concerned a dispute between the plaintiff, Sly, and the defendant, United Development Corporation Pty Ltd, heard before Menzies J in the Supreme Court of New South Wales. The core of the disagreement revolved around the interpretation and enforceability of a restrictive covenant contained within a deed of conveyance. Sly sought to enforce this covenant against United Development Corporation, which intended to develop land in a manner allegedly contrary to the restriction.

The primary legal issue before the court was whether the restrictive covenant, which purported to bind successors in title to the land, was valid and enforceable against the defendant. Specifically, the court had to determine if the covenant "ran with the land" at common law or in equity, and if it satisfied the requirements for enforceability against a subsequent purchaser for value without notice. This involved an examination of the nature of the covenant, its intention, and its impact on the use and enjoyment of the land.

Menzies J reasoned that for a restrictive covenant to bind successors in title, it must satisfy certain conditions. At common law, restrictive covenants generally do not run with the land unless they are covenants that impose a positive burden, which was not the case here. In equity, however, a restrictive covenant can bind successors in title provided it touches and concerns the land, was intended to run with the land, and the successor had notice of the covenant. His Honour found that the covenant in question did touch and concern the land and was intended to benefit the retained land of the vendor. Crucially, the defendant, as a purchaser for value, had notice of the covenant through the registered deed.

Consequently, Menzies J held that the restrictive covenant was valid and enforceable against United Development Corporation Pty Ltd. The court made orders restraining the defendant from carrying out the proposed development in breach of the covenant.