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[2010] VSC 366
General information, not legal advice.
Supreme Court of Victoria
2010-08-25
VICKERY J
Original judgment source is linked above.
LAND - Easement - Restrictive Covenant - Permanent public access through private property in shopping arcade - Whether any and what interest in land created.
REAL PROPERTY - Torrens system - Indefeasibility of title - Transfer of Land Act 1958 ss.42 and - Non-registration of interest - Fraud under and - Right in personam created - ; applied.
CONSTRUCTIVE TRUST - Whether constructive trust existed in favour of successors in title in respect of a restrictive covenant - Bahr v Nicolay [No 2] [1988] HCA 16; 164 CLR 604 applied.
1 Killians Walk in Bendigo has been a shopping arcade serving the citizens of the city since at least 1958. It is situated between Hargraves Mall and Queen Street ("Killians Walk"). From May 1989, members of the public had become accustomed to using a pedestrian walkway which linked Killians Walk to an adjoining arcade, known as Centreway. The walkway took them through a small privately owned property known as Unit 10 Killians Walk ("Unit 10") which had come into the ownership of the Defendants. The gentle bustle of orderly trade within the shopping centre was, no doubt, enhanced by this convenience.
2 Then on 7 May 2005 a remarkable thing happened. At about 7.30 am the Defendants erected wooden barriers across the boundaries of Unit 10. The barriers completely blocked pedestrian access through Unit 10 between Killians Walk and the Centreway Arcade. This remained the position until about 1.30 pm when staff employed by the management of the Defendants removed the barriers at the direction of the Building Inspector of the City of Greater Bendigo.
3 This case turns on whether the Defendants, as the registered proprietors of Unit 10, were entitled to take these dramatic steps and permanently shut out the public from using the walkway.
4 The First Plaintiff (the "Body Corporate") has since 1978 been the body corporate for the strata plan established for Killians Walk which is comprised in Registered Strata Plan No. 012870.
5 On 24 September 1987 Killians Walk was destroyed by fire. The Body Corporate determined to rebuild and redevelop the arcade. The rebuilding was completed in May 1989 when it was re-opened to the public. In its new configuration, Killians Walk became a two storied shopping and office complex. As it had done in the past, it continued to provide a pedestrian link between Hargraves Mall and Queen Street. The layout of the new building also provided a pedestrian walkway to the Centreway Arcade from Killians Walk to join up with the Limerick Arcade. This configuration provided pedestrian access from Killians Walk right through to Williamson Street.
6 Since approximately 2007, and after the issue of these proceedings, the Limerick Arcade has been incorporated into a sports store situated between the Centreway Arcade and Williamson Street. Nevertheless, until relatively recent events, members of the public have continued to enjoy pedestrian access through the sports store from Killians Walk through the Centreway Arcade to Williamson Street during normal business hours.
7 The public and shopkeepers alike, since the rebuilding of Killians Walk in May 1987, have therefore enjoyed the free flow of pedestrian traffic between the three arcades, and later through the sports store when the Limerick Arcade was incorporated into it, between Hargraves Mall, Queen Street and Williamson Street.
9 As can be readily observed from the plan, the key to this no doubt beneficial arrangement of pedestrian thoroughfares, was Unit 10. As shown on the plan, this provided the critical link between Killians Walk and the Centreway Arcade, as had been the position since the re-opening of Killians Walk in May 1989. Without it, the free flow of walkway traffic within the complex would be severely compromised.
10 However, Unit 10 remained a privately owned property, and was never incorporated into the common property of the strata plan for Killians Walk. Further, no interest in the nature of a public right of way, easement, restrictive covenant or like right was ever registered as an encumbrance on the title to Unit 10.
11 In 1989 the Defendants (together called "Aldal and Ors"), purchased a one third interest in Unit 10 for $100,000. In 2003, they purchased the remaining two thirds of Unit 10 for $1.00, and became entitled to be registered as the sole registered proprietors of the property. The transfer of the remaining two thirds interest in Unit 10 to the Defendants was registered on 1 February 2005.
12 Then on 7 May 2005, the Defendants blocked off Unit 10 as earlier described.
13 An impasse developed between the parties as to whether Aldal and Ors were entitled to exclude members of the public from using Unit 10 as a pedestrian walkway. The walkway was subsequently re-opened pending resolution of the dispute. The writ in these proceedings was filed on 16 January 2006.
14 The case proceeded largely on agreed facts. The outcome of the litigation turns on two central legal questions:
(a) Whether any and what interest in land was created in the nature of an easement or restrictive covenant over Unit 10 which had the effect of providing permanent public access through and over the property? and
(b) Whether ss.42 and 43 of the Transfer of Land Act 1958 (the "TLA"), by reason of the non-registration of any such interest should it have arisen, operate to defeat it?
15 Section 42 of the TLA provides:
42. Estate of registered proprietor paramount
(1) Notwithstanding the existence in any other person of any estate or interest (whether derived by grant from Her Majesty or otherwise) which but for this Act might be held to be paramount or to have priority, the registered proprietor of land shall, except in case of fraud, hold such land subject to such encumbrances as are recorded on the relevant folio of the Register but absolutely free from all other encumbrances whatsoever, except -
(a) the estate or interest of a proprietor claiming the same land under a prior folio of the Register;
(b) as regards any portion of the land that by wrong description of parcels or boundaries is included in the folio of the Register or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.
(2) Notwithstanding anything in the foregoing the land which is included in any folio of the Register or registered instrument shall be subject to-
(a) the reservations exceptions conditions and powers (if any) contained in the Crown grant of the land;
(b) any rights subsisting under any adverse possession of the land;
(c) any public rights of way;
(d) any easements howsoever acquired subsisting over or upon or affecting the land;
(e) the interest (but excluding any option to purchase) of a tenant in possession of the land;
(f) any unpaid land tax, and also any unpaid rates and other charges which can be discovered from a certificate issued under section three hundred and eighty-seven of the Local Government Act 1958, section 158 of the Water Act 1989 or any other enactment specified for the purposes of this paragraph by proclamation of the Governor in Council published in the Government Gazette-
notwithstanding the same respectively are not specially recorded as encumbrances on the relevant folio of the Register.
16 Sub-section 42(2) contains exceptions not material to the present case as it has been pleaded.
17 Section 43 of the TLA then provides:
43. Persons dealing with registered proprietor not affected by notice
Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any land shall be required or in any manner concerned to inquire or ascertain the circumstances under or the consideration for which such proprietor or any previous proprietor thereof was registered, or to see to the application of any purchase or consideration money, or shall be affected by notice actual or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.
18 Sections 42 and 43 of the TLA give expression to, and at the same time qualify, the principle of indefeasibility of title which is the foundation of the Torrens system of title. It is now nearly one hundred and twenty years since the Privy Council in Gibbs v. Messer[1] described the Torrens system in these terms:
The object is to save persons dealing with registered proprietors from the trouble and expense of going behind the register, in order to investigate the history of their author's title, and to satisfy themselves of its validity. That end is accomplished by providing that every one who purchases, in bona fide and for value, from a registered proprietor, and enters his deed of transfer or mortgage on the register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author's title.
19 On 4 July 1988 Cantown Pty Ltd ("Cantown") acquired land adjacent to Killians Walk. This land had a frontage to 10 Queen Street Bendigo. It included a shopping arcade which became known as the "Centreway Arcade" ("Centreway").
21 Further, as at 21 November 1988, Cantown was entitled to be registered as the proprietor of Unit 12, as it was then called, situated within Killians Walk. Unit 12 as we shall see, was later re-named "Unit 10".
22 Harriet Borland Mansfield and Florence Lorraine McNicoll (together called "Mansfield and McNicoll") were also at that date the registered proprietors as tenants in common in equal shares of units within Killians Walk, then called Units 10 and 11. Units 10 and 11 were later combined and renamed Unit 11.
23 A plan of Killians Walk depicting, inter alia, Unit 12 (as it then was) and Units 10 and 11 (as they then were), is set out below:
24 On or about 21 November 1988 Cantown requested Mansfield and McNicoll to consent to the relocation of their units within the Killians Walk redevelopment to enable Cantown to use its unit as a walkway for the purpose of providing access from Killians Walk to its adjoining property, being the Centreway Arcade.
25 Mansfield and McNicoll agreed to the relocation of their units within the Killians Walk redevelopment as proposed upon the agreement of Cantown to execute a document called a "Deed of Covenant" in respect of what was then described as Unit 12 for the benefit of their Units 10 and 11.
26 The agreement was recorded in an agreement dated 21 November 1988 (the "1988 Agreement"). The 1988 Agreement was signed by Cantown and Mansfield and McNicoll. It was in two parts which were bound together.
27 The first part of the 1988 Agreement recited that Cantown (described as "the Company") had requested Mansfield and McNicoll (described as "the unit-holders") to consent to the relocation of their units 10 and 11 within the redevelopment of Killians Walk to enable the Company to use unit 12 (as it then was) as an "arcade or walkway for the purposes of providing access from Killians Walk to the adjoining property acquired by the Company", being Centreway. A consideration of $100,000 was to be paid to Mansfield and McNicoll by the Company as compensation for the relocation of their units within the proposed development and upon the Company executing the agreement. The first part of the 1988 agreement then provided by clauses 4 and 6:
28 The "Restrictive Covenant" referred to in clause 4 was also entered into by the same parties and was also dated 21 November 1988 (the "1988 Deed of Covenant"). This document, expressed to be a "Deed of Covenant", comprised the second part of the 1988 Agreement. It was physically bound into it, and by reference, was legally incorporated into it. The 1988 Deed of Covenant was executed by Cantown and Mansfield and McNicoll as a deed and was stamped as such on 9 December 1988 acknowledging the payment of stamp duty to the State of Victoria.
29 The 1988 Deed of Covenant, inter alia, did the following things:
(a) It described Cantown's Unit 12 in Killians Walk as the "burdened land";
(b) It described the relocation of Mansfield and McNicoll' Units 11 and 12 as the "benefited land";
(d) Then, in the operative part, the following was provided:
30 The critical part of the Deed of Covenant, which bears repetition, was the provision in clause 1 whereby Cantown purported to covenant on behalf of its successors in title, transferees and assigns, "that neither it nor those deriving title under it would erect any building wall or any other structure other than a floor and a ceiling upon any part of the burdened land and that neither it nor those deriving title under it would use or permit to be used the burdened land for any purpose than that of an arcade only or pedestrian walkway".
31 The Defendants, Aldal and Ors, were then the registered proprietors of the property adjoining Centreway known as the Limerick Arcade. Incorporated within this property was a tavern. Later, the tavern was redeveloped into shops within the Limerick Arcade. It was conceded that Aldal and Ors knew of the 1988 Agreement and its contents, including the Deed of Covenant and its contents, on the date of execution being 21 November 1988.
32 On 14 December 1988 Notice was given to the Registrar of Titles under s.29(2) of the Strata Titles Act 1967 to have a scheme for the reinstatement of the destroyed buildings and improvements within Killians Walk.
33 Then on 23 February 1989 Cantown entered into an agreement in writing with the Defendants, Aldal and Ors, described as "Heads of Agreement" (the "1989 One Third Sale Contract"). The 1989 One Third Sale Contract essentially recorded the sale by Cantown to the Defendants of a one third interest in Unit 10 for $100,000. It also did the following things:
(a) It recited Cantown's ownership of Centreway and Unit 12, as it then was, within Killians Walk;
(b) It recited the ownership of Aldal and Ors in the Limerick Arcade and the Tavern included within the Limerick Arcade;
(d) The 1989 One Third Sale Contract in its operative part then proceeded to provide for the creation of pedestrian access from Killians Walk to Centreway and in turn from Centreway to the Limerick Arcade, and also for the redevelopment of the Tavern. As to the creation of pedestrian access from Killians Walk to Centreway, the 1989 One Third Sale Contract achieved this by Cantown selling to Aldal and Ors a one third interest in Unit 12 for $100,000. This was provided for in the following clauses:
1. Creation of Access From Killians Walk to Centreway
(a) the approval by the Registrar of Titles or by the appropriate Court of a revised strata plan of subdivision in respect of Killians Walk;
(b) the agreement by the parties to have Unit 12 reconstructed as a pedestrian thoroughfare between Killians Walk and Centreway provided that such use of Unit 12 may be altered by the unanimous decision of Cantown and ADE.
(c) the cost of the reconstruction and fit out of Unit 12 (including installation of fire shutters) as a walkway to be paid by Cantown;
(d) the agreement by the parties that all outgoings in respect of the property including rates, land tax, public risk insurance and body corporate levies shall be paid as to 2/3 by Cantown and as to 1/3 by ADE as from the date of settlement.
(e) the settlement to be contemporaneous with the finalisation of all other matters referred to in this Agreement and an agreement between Cantown and Harriet Borland Mansfield and Florence Lorraine McNicoll (the latter being the sole responsibility of Cantown to finalise at its expense.)
34 The portions of the 1989 One Third Sale Contract, which have been underlined above, acknowledged the following things (together, these clauses in the 1989 One Third Sale Contract are referred to as "the first acknowledgments"):
(a) the use of Unit 12 as a pedestrian thoroughfare between Killians Walk and Centreway;
(b) the agreement between Cantown and Mansfield and McNicoll being the 1988 Agreement which included the 1988 Deed of Covenant;
(c) the need to finalise all matters outstanding under the 1988 Agreement, which included attending to cl.3 of the 1988 Deed of Covenant whereby Cantown as the covenantor requested that the covenants contained in cl.1 of the 1988 Deed of Covenant be entered on the Certificate if Title for the burdened land being Unit 12; and
(d) further acknowledged that Cantown and the Defendants should be deemed to include and also refer to the successors in title, transferees, assigns, the registered proprietor for the time being of the lands defined in the agreement, which was to "bind any such person or corporation as if they were a party hereto."
35 Clause 15 of the 1989 One Third Sale Contract then provided:
36 On its proper construction, cl.15 of the 1989 One Third Sale Contract constituted an immediately binding contract for the sale of one third of Unit 12, as it then was, by Cantown to the Defendants, Aldal and Ors, on the terms contained in that clause. This is a case where the parties reached finality in arranging all the terms of their bargain and intended to be immediately bound to the performance of those terms, but at the same time proposed to have the terms restated in a form which would be fuller or more precise in respect of the details of the proposed development, which at the date of the agreement remained to be determined. Nevertheless, the restatement was to be in a form which was not to be different in effect. In the words of the High Court in Masters v Cameron[2] there was "a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document". The contract constituted by cl.15 was not conditional upon the execution of the contemplated formal contract.
37 On 3 April 1989 the firstnamed Plaintiff, the Body Corporate, and Cantown then executed a document called "Deed of Covenant" (the "1989 Deed of Covenant") which provided, inter alia, that Unit 12 in Killians Walk would be renumbered as Unit 10 in the redevelopment ("Unit 10") and would be used as a "permanent arcade or walkway between Killians Walk and Centreway". The 1989 Deed of Covenant was executed by Cantown and the Body Corporate as a deed and was stamped as a deed on 18 May 1989 acknowledging the payment of stamp duty to the State of Victoria.
38 Although they were not parties to the 1989 Deed of Covenant, in spite of then being owners of one third of Unit 10 pursuant to the 1989 One Third Sale Contract, it was conceded that Aldal and Ors had knowledge of the 1989 Deed of Covenant and its contents on the date of its execution, namely 3 April 1989.
39 The 1989 Deed of Covenant contained the following recital and operative provisions:
... AND WHEREAS Cantown is also the owner of a unit situate in Killians Walk and on the Plan of Redevelopment numbered 10 (hereinafter called "Unit 10") and desires to have Unit 10 used as an arcade or walkway for the purposes of providing access to and from Killians Walk to Centreway AND WHEREAS the Body Corporate has agreed to such proposal on certain terms and conditions BE IT KNOWN it has been agreed as follows -
40 In May 1989 Killians Walk was reopened following its reconstruction after the fire which occurred on 24 September 1987.
41 Mansfield and McNicoll became the registered proprietors of Unit 11, Killians Walk on 8 November 1989. Unit 11 incorporated what was previously Units 10 and 11. The renamed Unit 10, which was formerly Unit 12, is also shown on the plan below. The renamed Unit 10 adjoins the renamed Unit 11. These things are shown on the plan below:
42 On 9 April 1990 the Defendants, Aldal and Ors, upon payment of the consideration of $100,000, became registered as the proprietors of a combined one third interest in Unit 10 with Cantown remaining as a proprietor of the other two thirds. The shareholdings of all parties were as tenants in common and in the following shares:
Cantown - eight twelfths;
Aldal Pty Ltd (the First Defendant) - two twelfths;
Dehors Holdings Pty Ltd (the Second Defendant) - one twelfth; and
E.F.M. Burke Investments Pty Ltd (the Third Defendant) - one twelfth.
43 As at the date of registration of those interests, 9 April 1990, and subsequently:
(a) no restrictive covenant was recorded against the title to Unit 10 pursuant to s.88 of the TLA; and
(b) no easement was recorded on the title to Unit 10 pursuant to s.72 of the TLA.
44 On 14 February 1992 Cantown's accountant, Mr Pitson wrote a letter to the Rate Collector, City of Bendigo requesting that rates be waived for the current and future years in respect of Unit 10 Killians Walk. The letter enclosed a copy of the Rate Notice of the City of Bendigo addressed to Cantown Pty Ltd and the Defendants, Aldal and Ors, for the rate year 1991/1992. Mr Pitson was cross-examined. I am not satisfied on the evidence that he had the specific authority of the other owners of Unit 10, Aldal and Ors, to write this letter. However, it is likely that they came to know of the outcome, because from the following rate year and thereafter the City of Bendigo and its successor the City of Greater Bendigo, did not levy the payment of rates in respect of Unit 10 Killians Walk. The letter from Mr Pitson to the City of Bendigo was in the following terms:
Re: Cantown Pty Ltd & Others.
Property: Unit 10 Killians Walk
I refer to rate notice (copy attached) in relation to the above property and request that rates be waived for the current and future years for the following reasons:-
In view of the foregoing we trust Council will waive the payment of rates on the property referred to.
45 Accordingly, whether or not they directly authorised or knew of the terms of the letter sent by Mr Pitson of 14 February 1992, the Defendants, Aldal and Ors, certainly gained the benefit of it thereafter, following the City of Bendigo and its successor accepting the matters raised by Mr Pitson and providing rate exemption in respect of Unit 10. This benefit continues to this day.
46 Harriet Borland Mansfield, died on 19 July 1999. Probate of her will was granted to Timothy Afric Rogers and Phillip John Eddy, who are the Second and Third Plaintiffs, on 31 July 2000.
47 Florence Lorraine McNicoll, died on 30 March 1997. Probate of her will was granted to Emily Schuman Lee and Eve McKenzie on 7 August 1997. The moiety interest of Florence Lorraine McNicoll in Unit 11 was devised and transferred to Kay Lorraine Bayley, David Jeffrey Hughes and Stewart Llewellyn Hughes on 11 November 1999.
48 Then by a Contract of Sale dated 23 July 2003 (the "2003 Two Thirds Sale Contract") Cantown sold to the Defendants, Aldal and Ors, its remaining two thirds interest in Unit 10. For reasons which will become plain, the consideration was merely $1.00.
49 The 2003 Two Thirds Sale Contract contained the following terms of relevance:
1.1 The Purchaser buys the property and the chattels subject to the encumbrances shown in Item 1 of the Schedule
ITEM (1) Encumbrances to be assumed by the Purchaser -
(GC 1) * Any easements and covenants disclosed in the Vendor's Statement.
AND this sale is made with the Purchaser acknowledging the existence of those agreements.
50 The vendor's statement to the purchaser delivered pursuant to s.32 of the Sale of Land Act 1962 and appended to the 2003 Two Thirds Sale Contract contained the following provisions of relevance:
1.1 Description -
As set out in the attached copies of title document/s
And the rights of the Coliban Region Water Authority in respect of any sewerage main which may traverse the property and the three agreements entered into by the Vendor in relation to the Property, copies of which are attached. [Emphasis added by underlining]
1.2 Particulars of any existing failure to comply with their terms are as follows - None to the knowledge of the Vendor.
51 Accordingly, by Special Condition 8 of the 2003 Two Thirds Sale Contract the existence of the 1988 Agreement, the 1988 Deed of Covenant, and the 1989 Deed of Covenant, copies of which were attached to the contract, both the existence and the terms of those documents were referred to and specifically acknowledged by the Defendants, Aldal and Ors. These documents were also disclosed as Restrictions affecting the property sold in cl. 1.1 of the s.32 statement appended to the contract (together, these clauses in the 2003 Two Thirds Sale Contract, namely Special Condition 8 and cl. 1.1 of the s.32 statement, are referred to as "the second acknowledgments").
52 By a transfer dated 21 September 2003, and upon payment of the consideration of $1.00, Cantown transferred to the Defendants, Aldal and Ors, its remaining two thirds interest in Unit 10. Thereafter, the Defendants held Unit 10 as tenants in common in the following shares:
the First Defendant, two quarters;
the Second Defendant, one quarter; and
the Third Defendant, one quarter.
53 There was not on that date, 21 September 2003, nor has there been at any time since:
(a) any restrictive covenant been recorded against the title to Unit 10 pursuant to s.88 of the TLA; or
(b) any easement recorded on the title to Unit 10 pursuant to s.72 of the TLA.
54 The transfer of the two thirds interest in Unit 10 in favour of the Defendants, Aldal and Ors, was stamped for stamp duty purposes on 31 January 2005 and was registered against the title to Unit 10 on 1 February 2005.
55 Some three months later, on 7 May 2005 at about 7.30 am, the Defendants erected wooden barriers at the boundaries of Unit 10 as earlier described.
56 I make the following additional factual findings:
(a) On 23 February 1989 when they entered into the 1989 Heads of Agreement, the Defendants, Aldal and Ors, in accordance with their commercial strategy at the time, agreed with Cantown to create a pedestrian link between Killians Walk, Centreway and the Limerick Arcade in order to enhance both the ease of access by the public to the shops and facilities within each property, including their property comprised in the Limerick Arcade, and the businesses of the proprietors of the shops and facilities within the combined complex. The walkway was created to provide a permanent link between Killians Walk, Centreway and the Limerick Arcade which was necessary for development of shops in the complex and to achieve enhanced value for those premises. For this commercial advantage, the Defendants were prepared to pay $100,000 to Cantown for a one third interest in Unit 10 (formerly Unit 12);
(b) When Killians Walk was reopened in May 1989 and continuously thereafter, Unit 10 was used by members of the public as a pedestrian access in accordance with the Defendants' commercial strategy, a use which would have been plainly obvious and I infer was well known to them. Although the Defendants claim that such use was pursuant to a licence, presumably claimed to be a licence at will, it was also consistent with an encumbrance on the property being Unit 10;
(c) In April 1992, the Defendants gained the advantage of an exemption of rates in respect of Unit 10 from the City of Greater Bendigo on the basis that it provided a permanent walkway between Killians Walk and the Centreway Arcade, an advantage which they have continued to enjoy to this day;
(d) On 23 July 2003 by the 2003 Contract of Sale the Defendants purchased the remaining two thirds interest in Unit 10 from Cantown for $1.00. The purchase price reflected the position that Unit 10, by virtue of its use as a pedestrian walkway by members of the public, had no commercial value;
(e) Thereafter, on 1 February 2005, having registered at the Land Registry[3] the transfer to them of the remaining two thirds interest in Unit 10, thereby gaining between them, subject to encumbrances, full ownership of the property, the Defendants changed their commercial strategy. Three months later, on 7 May 2005, they caused to be erected barricades across Unit 10, thereby excluding members of the public and preventing its use as a pedestrian walkway.
57 In these circumstances, the following questions arise:
(a) was Unit 10 encumbered by any and what unregistered property interest or interests?
58 The Plaintiffs contend that the 1989 Deed of Covenant executed on 3 April 1989 between Cantown and the Body Corporate constitutes an easement over Unit 10 for its use as a permanent public walkway between Killians Walk and Centreway. It was pleaded that the common land owned by the Body Corporate, as the dominant tenement, became entitled to the benefit of the easement over Unit 10, which was the servient tenement. The Defendants in their defence admit that the Body Corporate is the holder of the common land in Killians Walk, being the balance of the land shown on Strata Plan 012870.
59 However, this claim is faced with a threshold difficulty in that the Defendants, Aldal and Ors, by virtue of the 1989 One Third Sale Contract of 23 February 1989 entered into between Cantown and themselves, the Defendants became tenants in common with Cantown as to a one third interest in Unit 10. However, they were not parties to the 1989 Deed of Covenant executed on 3 April 1989.
60 No agency on the part of Cantown to enter into the 1989 Deed of Covenant on behalf of the Defendants, Aldal and Ors as principals, is pleaded or relied upon. The Defendants deny that any of the covenants purportedly made or given by Cantown in the 1989 Deed of Covenant bind them.
61 In these circumstances, it was beyond the alienation power of Cantown to unilaterally grant an easement over Unit 10 in the absence of the tenants in common as to one third of the land joining in the grant. The 1989 Deed of Covenant was therefore not competent as an instrument to create the easement claimed by the Plaintiffs.
62 A further and fundamental difficulty stands in the way of the Plaintiffs in maintaining their claim to the easement. The use of the alleged easement in this case would necessarily involve a very significant restriction on the possessory rights of the servient owners to the point where they virtually gave up their right of possession in any practical sense.
63 In their work "Easements and Restrictive Covenants in Australia"[4] the learned authors note the two seemingly contradictory cases on the "yielding up of possession" characteristic which precludes the creation of an easement, namely Wright v Macadam[5] and Copeland v Greenhalf.[6] In Wright v Macadam, the Court of Appeal held that the implied grant of a right to store coal in a shed was an easement despite the fact that the presence of the dominant owner's coal in the shed was incompatible with the servient owner's right to possession. On the other hand, in Copeland v Greenhalf an alleged easement to store vehicles on a neighbour's land was rejected by Upjohn J on the ground that such a claim was virtually a claim to possession of the servient tenement.
64 In Copeland v Greenhalf, Upjohn J observed in relation to the easement which was claimed before him:[7]
I think that the right claimed goes wholly outside any normal idea of an easement, that is, the right of the owner or the occupier of a dominant tenement over a servient tenement. This claim (to which no closely related authority has been referred to me) really amounts to a claim to a joint user of the land by the defendant. Practically, the defendant is claiming the whole beneficial user of the strip of land on the south-east side of the track there ; he can leave as many or as few lorries there as he likes for as long he likes ; he may enter on it by himself, his servants and agents to do repair work thereon. In my judgment, that is not a claim which can be established as an easement. It is virtually a claim to possession of the servient tenement, if necessary to the exclusion of the owner ; or, at any rate, to a joint user, ...
... the restriction on the owner not to build on the easement area and not to erect any structure thereon goes much further than a prohibition of interference with the enjoyment by the SEC of its rights. I think that if the rights the subject of the [alleged easement] were acquired the plaintiff would be left with very few rights over her property and could do little more with it than move over it and park cars on it. I think that the rights sought to be acquired by the SEC do not fall within the category of a common law easement. They would really amount to rights to joint user by the SEC of the plaintiff's land.
66 In the present case, at least during the business hours of Killians Walk and Centreway, when the arcades are open to the public, Unit 10 can be put to no practical use other than that of a pedestrian walkway. As submitted by Mr Morrison, who appeared for the Defendants, even the clear glass side walls of the unit, which adjoin the neighbouring units, preclude a potential use to display goods or advertising material. Further, there was no evidence of any need to use the sub-surface for piping or cables, and the upper area of the unit is limited by the ceiling. Mr Bevan-John, who appeared for the Plaintiffs, in a disarming and spirited submission, pointed to the potential use of the side walls of Unit 10 for the display of Christmas decorations. The proposed use suffers from obvious temporal limitations, restricted as it would be to the yuletide season.[10] In any event the submission colourfully illustrates the severity of the limitations imposed on the possessory rights of the servient owners by the claimed easement. Not even the accommodation of a Christmas tree was suggested as compatible with the use of Unit 10 as a pedestrian thoroughfare.
67 For these reasons, the rights claimed over Unit 10 cannot be the proper subject matter of an easement.
68 The Plaintiffs also claimed that a restrictive covenant was created by the 1988 Deed of Covenant, earlier described.
69 The expression "restrictive covenant" is a term of art. It is used to describe those covenants arising from an enforceable contract between two or more persons, usually being a promise contained in a deed, which restrict land use, the burden and benefit of which run with the land in equity.[11]
70 It was first contended by the Defendants that the restrictive covenant, so-called, was unclear in that it did not adequately describe the dominant tenement.
71 This submission is rejected. True it is that the 1988 Deed of Covenant did not refer to any "dominant tenement" as such. However, it clearly described Unit 10 (formerly Unit 12) as "the burdened land" and the land owned by Mansfield and McNicoll, then being Units 10 and 11, as "the benefited land". In this instance substance prevails over form. The benefited land, as it was described in the deed, was clearly the dominant tenement.
72 A covenant, being essentially a contract between two or more persons, can be positive or negative in effect. However, the law will not enforce the burdens of a positive covenant on a third party. In short, they will not run with the land. Indeed, the TLA by s.88 only recognises restrictive or negative covenants. Section 88(1)(a) provides:
88. Notification of restrictive covenants
(1) The Registrar has the power, and is taken to have always had the power, to record on a folio of the Register-
(a) a restrictive covenant affecting the parcel or parcels of land to which the folio of the Register relates, if all of the registered proprietors of the land to be affected by the covenant and any mortgagees of such land agree to the creation of the restrictive covenant;
73 The Defendants said that the covenant created by the 1988 Deed of Covenant was essentially positive in nature, and as such could not be enforced against them as third parties to the contract which created it. Accordingly, it was contended that no proprietary interest in the nature of a restrictive covenant arose in relation to Unit 10.
74 I do not accept this submission. The 1988 Deed of Covenant recorded a covenant which was classically restrictive or negative in character. The deed also made clear that the burden and benefit of the restriction was to run with the land. At the risk of immoderate repetition, the operative part of the deed for present purposes is contained in cl.1 which provides:
75 For these reasons, in my opinion, and putting aside the question of lack of enforceability by reason of non-registration, a proprietary interest in the land, being a restrictive covenant amounting to an encumbrance on the title to Unit 10 as claimed by the Plaintiffs, was created by the 1988 Deed of Covenant.
Bahr v Nicolay [No 2] [1988] HCA 16; 164 CLR 604
76 The Plaintiffs claimed that their unregistered restrictive covenant over the property of Unit 10 was not defeated by the indefeasibility provisions of the TLA.
77 Central to the case of the Plaintiffs was their reliance on the decision of the High Court in Bahr v Nicolay [No 2] ("Bahr v Nicolay").[12] In their submission, the indefeasibility provisions of the TLA found in ss.42 and 43 were subject to the considerations referred to in that case, which considerations were directly applicable to the case at hand. The Defendants contended to the contrary, that the case was distinguishable from the present.
78 In Bahr v Nicolay the appellants, Mr and Mrs Bahr, in 1979 acquired property described as Lot 221 which included a general store in a seaside town in Western Australia known as Cervantes. They needed finance in order to build on a second property acquired at the same time, known as Lot 340. They entered into a financial arrangement with the first respondent Mr Nicolay by which they sold to him the second property on a basis which would permit them to occupy the land as lessees and thereafter to buy it back when they were in a financial position to do so. This may be described as a lease and buy-back arrangement.
79 Accordingly, by an undated contract, stamped 25 June 1980, the Bahrs agreed to sell Lot 340 to Mr Nicolay for the sum of $32,000, payable as to $16,000 on execution and as to $10,000 when construction of the premises reached a specified stage, with the balance of $6,000 to be paid within three days of receipt by Mr Nicolay of a certificate of compliance from the building surveyor of the relevant shire. He in turn agreed to lease the land to the Bahrs for a term of three years for an annual rental of $4,000. Clause 6 of the agreement read:
80 The effect of the arrangement made between the parties was that Mr Nicolay outlaid $32,000 for which he was to receive at the end of three years an amount of $45,000 together with rent over that period amounting to $12,000.
81 On 5 March 1981 the Bahrs transferred the land to Mr Nicolay. They did not then lodge a caveat to protect their interest arising from cl.6 of their agreement with him.
82 The building on Lot 340 was completed by 14 August 1980 and the Bahrs began to operate the business of a general store on Lot 340 together with a liquor store on Lot 221.
83 It eventuated that the second respondents, the Thompsons, made an offer to Mr Nicolay to buy Lot 340. They were aware of the agreement between the Bahrs and Mr Nicolay. Indeed Mr Nicolay refused to enter into any contract with the Thompsons unless that contract contained express reference to the earlier agreement.
84 By an agreement dated 26 December 1981 Mr Nicolay sold Lot 340 to the Thompsons for the sum of $40,000. Added to the standard conditions was a condition in these terms:
Under the agreement between Mr Nicolay and the Thompsons settlement took place on 31 December 1981 and the Thompsons thereupon became the registered proprietors of Lot 340. In spite of being advised of the sale, the Bahrs did not lodge a caveat to protect their interest under cl.6 until 14 January 1982, that is after the Thompsons had been registered as the proprietors of Lot 340. On or about 6 January 1982 the Thompsons sent to the appellants' solicitors a letter in which they confirmed the operation of cl.6 of the earlier agreement with Mr Nicolay and their preparedness to be bound by the substance of the clause.
85 On 23 June 1983, that is before the lease had expired, the Bahrs' solicitors wrote to the Thompsons with a cheque for $4,500 by way of deposit and an offer and acceptance form relating to the sale of Lot 340 from the Thompsons to the Bahrs.
86 By letter dated 29 June 1983 the Thompsons' solicitors returned the cheque for $4,500 and the other enclosures with the letter of 23 June, making it clear that their clients did not intend to sell Lot 340 to the Bahrs.
87 Following this development, the Bahrs issued a writ against Mr Nicolay and the Thompsons claiming relief including an order that Lot 340 vest in them on payment of $45,000, alternatively specific performance of the agreement made between them and Mr Nicolay, and damages against all respondents.
88 Mason CJ and Dawson J held[13] that cl.6 of the contract between the Bahrs and Mr Nicolay created for the benefit of the Bahrs an equitable estate or interest in Lot 340, enforceable against Mr Nicolay and, in the events that happened, against the Thompsons, provided that relief by way of specific performance was available at the relevant time. Clause 6 constituted a binding contract between the parties to bring into existence the contemplated formal contract and carry it to completion.
89 Although there was some uncertainty as to the precise nature of the Bahrs' equitable interest, Mason CJ and Dawson J identified a central issue in the case as being whether the indefeasibility sections of the Transfer of Land Act 1893 (WA) (the "WA Act"), which provided the equivalent measure of protection as ss.42 and 43 TLA, had the effect of defeating the interest of the Bahrs by reason of the Thompsons having become registered proprietors of Lot 340.[14]
90 As their Honours observed,[15] by cl.4 of the agreement between Mr Nicolay and the Thompsons, the Thompsons acknowledged that the earlier agreement existed between the Bahrs and Mr Nicolay. The clause did not purport to create in favour of the Bahrs new rights over and above those previously existing. On its face, it merely acknowledged the existence of the earlier agreement and such rights as the Bahrs may have had under the earlier agreement.
91 The Thompsons contended, as did the Defendants in this case, that mere notice of a prior unregistered interest did not amount to fraud within the meaning of s.68 of the WA Act (the equivalent to s.42 TLA). That section provides that, except in the case of fraud, the registered proprietor holds the land subject only to encumbrances notified on the certificate of title, save for exceptions not material to this case. Section 134 of the WA Act (the equivalent to s.43 TLA), provides that, except in the case of fraud, no person taking a transfer of land shall be affected by actual or constructive notice of any trust or unregistered interest and that knowledge of any trust or unregistered interest "shall not of itself be imputed as fraud".
92 However, their Honours adopted a somewhat expansive view of fraud, as that term was used in the equivalent sections to ss.42 and 43 TLA. In the first place, their Honours did not see that fraud, for the purposes of those provisions, was confined to fraud in the obtaining of a transfer or in securing registration.[16] Their Honours said in this respect:[17]
[W]e agree with Higgins J in Stuart v Kingston when his Honour said (at p 345) that there was much to be said for the view, expressed by Stawell CJ on the equivalent Victorian provision, that the section should be "construed strictly" and the exception "liberally". The section restricts, in the interests of indefeasibility of title, rights which would exist otherwise at law or in equity. And granted that an exception is to be made for fraud why should the exception not embrace fraudulent conduct arising from the dishonest repudiation of a prior interest which the registered proprietor has acknowledged or has agreed to recognize as a basis for obtaining title, as well as fraudulent conduct which enables him to obtain title or registration.
[Emphasis added by underlining]
93 Further, as was observed by their Honours in Bahr v Nicolay:[18]
... an acknowledgment of an antecedent agreement in an appropriate context may amount to an agreement or undertaking to recognize rights arising under that antecedent agreement.
If the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred. The present is just such a case. The trust is an express, not a constructive, trust.
95 Central to the approach taken by Brennan J[21] was the construction placed on the acknowledgment clause in the subject contract of sale between Mr Nicolay and the Thompsons. This was found in cl.4 of the contract and read as follows:
96 Brennan J construed this clause in the contract of sale as more than a mere acknowledgment of the existence of the earlier agreement. It also had the effect, so it was held, of acknowledging that the interest being purchased by the Thompsons was subject to the interest which the Bahrs had under the earlier contract. His Honour noted in this respect:[22]
The consequence of inserting cl.4 into the Thompsons' contract was that the Thompsons acknowledged not only the fact that the Bahrs' contract existed but also that the interest which they were purchasing was subject to the interest which the Bahrs' had under cl.6 of the Bahrs' contract. But cl.4 is more than an acknowledgment of a fact; in its context it appears to be a contractual stipulation. It is one of a number of "Conditions" in the Thompsons' offer to purchase lot 340 which Nicolay, by his attorney Robertson, accepted, and the offer was expressed to be "subject to the Conditions".
97 In this way, Brennan J construed cl.4 not as a mere acknowledgment of a fact but as a term of the contract limiting the purchasers' interest by defining the interest to which the purchasers' title should be subject.
98 His Honour also proceeded to consider the extrinsic evidence in finding that, in addition, there was an independent and collateral unwritten contract which, together with the written contract, constituted the arrangements between the parties. The collateral agreement was held to be effective to also subject the title acquired by the purchasers on completion, to the interest of the third parties, the Bahrs.[23]
99 Brennan J went on to note the cases earlier referred to which stand for the proposition that registration of a transfer is not fraudulent within the meaning of the indefeasibility provisions of the Torrens legislation merely because, at the time of the registration of his own interest, the transferee knows of an antecedent interest which is unregistered.
100 However, his Honour observed that the title of a purchaser who not only has notice of an antecedent unregistered interest, but who purchases on terms that he will be bound by the unregistered interest, is subject to that interest. Equity will compel him to perform his obligation.[24] Brennan J also noted that the Transfer of Land Act provisions do not deny the right of a plaintiff to bring against a registered proprietor a claim in personam, founded in law or in equity, for such relief as a court acting in personam may grant.[25] Those provisions, his Honour observed, "are designed to protect a transferee from defects in the title of the transferor, not to free him from interests with which he has burdened his own title".[26]
101 Upon this reasoning, Brennan J was able to conclude that a registered proprietor who has purchased on terms that his title will be subject to an unregistered interest is not able to defeat that interest upon registration of his transfer. His Honour further held that a registered proprietor who has undertaken that his transfer should be subject to an unregistered interest and who repudiates the unregistered interest when his transfer is registered is, in equity's eye, acting fraudulently and he may be compelled to honour the unregistered interest. In this situation his Honour noted that a means by which equity prevents the fraud is by imposing a constructive trust on the purchaser when he repudiates the unregistered interest. The fraud which attracts the intervention of equity lies in the unconscionable attempt by the registered proprietor to deny the unregistered interest to which he has undertaken to subject his registered title.[27]
102 Wilson and Toohey JJ also considered the meaning of fraud in the context of the indefeasibility sections of the WA Act, being the equivalent sections to ss.42 and 43 TLA.
103 Their Honours considered that the fraud referred to is actual fraud, involving some act of dishonesty on the part of the person whose title is sought to be impeached.[28]
104 It was also the view of their Honours that to acquire land with mere notice of an unregistered interest, to become the registered proprietor and then to refuse to acknowledge the existence of the interest is not of itself fraud.[29] The point was also made by Kitto J in Mills v Stokman[30] where his Honour said:
... but merely to take a transfer with notice or even actual knowledge that its registration will defeat an existing unregistered interest is not fraud.
Consistently with these authorities, evidence going no further than to show that when the second respondents took a transfer of Lot 340 from the first respondent and became the registered proprietors of the land they were aware of the contents of cl.6, cannot amount to fraud within the meaning of ss.68 and 134 [of the WA Act]. More is needed before the appellants can disturb the second respondents' registered title on that ground.
106 It was noted by Wilson and Toohey JJ that: "the fraud to which ss.68 and 134 refer is fraud committed in the act of acquiring a registered title",[34] and that it is "in the conduct of the [registering party] that fraud must be found".[35] On this matter, their Honours found that the evidence was "far from precise".[36] Could it be said, it was observed, that the "designed object of the transfer to [the registering party] was to cheat [the holder of the unregistered interest] of a known existing right?"[37] The evidence fell short of establishing that case, to the satisfaction of their Honours.
107 After acknowledging the force of the earlier cited[38] observations of the Privy Council in Gibbs v Messer[39] as to the object of the Torrens system, their Honours nevertheless observed the vulnerability of a registered proprietor to claims in personam founded in law or in equity for such relief as a court seized of such a matter may grant.[40] The making of such claims and the grant of appropriate relief is, as observed by their Honours, "not inconsistent with the concept of indefeasibility," noting that: "The certificate of title is conclusive". If amended by order of a court it is, as Barwick CJ pointed out,[41] "conclusive of the new particulars it contains".[42]
108 Although the indefeasibility provisions of the Torrens legislation may not be circumvented, their Honours observed that, equally, they do not protect a registered proprietor from the consequences of his own actions where those actions give rise to a personal equity in another. Such an equity may arise, it was observed, from conduct of the registered proprietor after registration,[43] and it may also arise from conduct of the registered proprietor before registration.[44]
109 Wilson and Toohey JJ concluded that by taking a transfer of Lot 340 on the basis of the Bahrs' continuing interest under cl.6 of their contract with Mr Nicolay, which constituted an equitable interest in the land, the Thompsons became subject to a constructive trust in favour of the Bahrs. They further held that, if it be the position that the Bahrs' interest under cl.6 fell short of an equitable estate, they nonetheless had a personal equity enforceable against the Thompsons. In either case the indefeasibility provisions of the Act would not preclude the enforcement of the estate or equity because both arise, not by virtue of notice of them on the part of the Thompsons, but because of their acceptance of a transfer on terms that they would be bound by the interest the Bahrs had in the land arising from their contract with Mr Nicolay.
110 Bahr v Nicolay has not been further qualified or explained by the High Court.
111 The decision has been consistently applied in Australia.[45]
112 The Plaintiffs pleaded that they are entitled to a declaration that the property of the Defendants became subject to a constructive trust in favour of Mansfield and McNicoll and their successors in title, including the Second and Third Plaintiffs, in respect of the restrictive covenant. In so doing, the Plaintiffs seek to invoke the approach of Wilson and Toohey JJ in Bahr v Nicolay. I accept that the application of these principles is appropriate to dispose of this case. I do not consider that the facts of Bahr v Nicolay are materially distinguishable from the present, as contended by the Defendants.
113 In this case, the instruments which gave rise to the constructive trust, if it arose, were either or both of the 1989 One Third Sale Contract, pursuant to which Cantown sold a one third interest in Unit 10 to the Defendants, and the 2003 Two Thirds Sale Contract, pursuant to which Cantown sold its remaining two thirds interest in the unit to the Defendants.
114 The starting point for this analysis commences with the construction of the first acknowledgments contained in the 1989 One Third Sale Contract and the second acknowledgments contained in the 2003 Two Thirds Sale Contract (together, referred to as "the acknowledgment clauses").
115 I am satisfied that the terms comprised in the acknowledgment clauses in both contracts of sale were intended by the parties not only to provide notice to the Defendants of the interest of Mansfield and McNicoll in the restrictive covenant, but further, by those terms it was intended that the title to be taken by the Defendants in each case would be subject to that interest. More particularly, the effect of the acknowledgment clauses as used in the contracts of sale was that that the transfers of the interests in the title to Unit 10 to the Defendants in both cases were subject to the restrictive covenant created under the 1988 Deed of Covenant which was intended to run with the land and be enforceable by Mansfield and McNicoll and upon their deaths, by the executors and trustees of their estates, and subsequently by their successors in title, against the owners for the time being of Unit 10. Those parties were and are entitled to enforce the restrictive covenant against Cantown and its successors in title, transferees and assigns, the registered proprietors for the time being of Unit 10, in equity by a suit for specific performance of the covenants contained in the 1988 Deed of Covenant.
116 In this case the inferences to be drawn from the matrix of circumstances provide an aid to the construction of the acknowledgment clauses in the two sale agreements. The consideration of $1.00 as the purchase price for the two thirds interest in Unit 10 provides particularly strong evidence of the intention of the parties. The price reflects the fact that the property was intended to be severely curtailed in its use by the restrictive covenant, leaving the property with little or no practical value.
117 Accordingly, under the acknowledgement clauses in the two sale contracts in respect of Unit 10, the Defendants not only had notice of Mansfield and McNicolls' interest in the restrictive covenant, but, properly construed in their context, the terms of those contracts point to the mutual intention of the parties that the Defendants were to take their title subject to that interest.
118 Such an undertaking was made by the Defendants themselves, who, in entering the two contracts of sale on the terms described, fettered their own title. Their conduct founds a claim in personam against them in equity at the suit of the parties seeking to enforce the restrictive covenant by specific performance. The Defendants cannot rely on the TLA to avoid honouring their undertaking as was provided for in the contracts.
119 Further, in all of the circumstances, it would be unconscionable for the Defendants to avoid their contractual obligation as I have found it to be. These are matters relevant to the exercise of the Court's discretion to impose the constructive trust sought by the Plaintiffs.
120 The constructive trust on which the Defendants hold their title is a trust to give effect to Mansfield and McNicolls' interest in the restrictive covenant. The Defendants, Aldal and Ors, are the constructive trustees. They hold their title in Unit 10 subject to the proprietary interest in the restrictive covenant created by the 1988 Deed of Covenant, the burdening covenants of which they hold on trust. A contractual promise can be the proper subject matter of a trust.[46] As beneficiaries of the trust, Mansfield and McNicoll, if they were alive, could have enforced their property interest in the restrictive covenant against their trustees directly.[47] Upon their deaths as has occurred, the executors and trustees of the estates of Mansfield and McNicoll, or either of them, and their successors in title, are entitled to enforce it directly against the Defendants. They do not thereby impeach the registration of the transfer to the Defendants. Nor does the TLA present a bar to the enforcement of the constructive trust which creates rights in equity in personam.
121 The Court will therefore, in the exercise of its discretion, declare a constructive trust to provide relief to the Second and Third Plaintiffs as executors and trustees of the estate of the late Harriet Borland Mansfield.
122 Although it was not pleaded by the Plaintiffs, respectfully applying the approach of Mason CJ and Dawson J in Bahr v Nicolay, I would have inferred from the two sale agreements that the parties intended to protect the interests of the third parties to those contracts, namely the interests of Mansfield and McNicoll and their successors in title, in the restrictive covenant, such as to give rise to an intention to create a trust in respect of it.
123 Such trust would have been an express trust, not a constructive trust. By such trust, the Defendants would have constituted themselves as trustees of the burdening covenants in the restrictive covenant in favour of Mansfield and McNicoll, their executors and trustees, and their successors in title as the beneficiaries.
124 Again, although it was not pleaded by the Plaintiffs, if fraud, as an exception to the indefeasibility provisions found in ss.42 and 43 of the TLA had been pressed by them, I would have found that, having regard to the intention of the parties expressed in the acknowledgment clauses of the two sale agreements which I have found, the subsequent repudiation of those agreements would have constituted fraud within the exceptions referred to in ss.42 and 43 TLA.
125 In this case the facts point to the existence of fraud in the sense described by Mason CJ and Dawson J in Bahr v Nicolay, namely that arising from the dishonest repudiation of a prior interest which the registered proprietor has acknowledged or has agreed to recognise as a basis for obtaining title. The repudiation was fraudulent because it had as its object the destruction of the unregistered interest in the restrictive covenant notwithstanding that the preservation of the unregistered interest was the foundation or assumption underlying the entry into the two sale contracts pursuant to which the Defendants as transferees took the property in Unit 10, first as to a one third interest, and subsequently as to the remaining two thirds interest.
126 The result would have been that that the prior equitable interest of Mansfield and McNicoll in the restrictive covenant would have prevailed over the Defendants' title, the Defendants having taken Unit 10 with notice of that interest.
127 In the alternative, a finding of fraud of this kind would have given rise to a remedial constructive trust of the type described by Brennan J in Bahr v Nicolay.
The covenantor for itself, its successors in title, transferees and assigns the registered proprietor or proprietors for the time being of the burdened land to the intent and so as to bring the burdened land into whatsoever hands the same may come and to the benefit of and to protect the benefited land and each and every part thereof hereby covenants with the covenantees that neither the covenantor nor those deriving title under it will erect any building, wall, or any other structure other than a floor and ceiling upon any part of the burdened land and neither the covenantor nor those deriving title under it will use or permit to be used the burdened land for any other purpose than that of an arcade or pedestrian walkway.
[1] (1891) AC 248 at 254.
[2] [1954] HCA 72; (1954) 91 CLR 353 at 360.
[4] "Easements and Restrictive Covenants in Australia", Adrian Bradbrook and Marcia Neave, 2nd ed. at 7-8 [1.9].
[10] "Yule" or "yuletide" is a winter festival that was earlier celebrated by Germanic peoples as a pagan religious festival, but was later absorbed into, and has become equated with, the Christian festival of Christmas.
[11] See: "Easements and Restrictive Covenants in Australia", Adrian Bradbrook and Marcia Neave, 2nd ed. at 260 [12.3].
[21] As he then was a Justice of the High Court appointed in 1981. He was appointed Chief Justice in 1995, retiring in 1998.
[24] Ibid at 653 citing Barry v Heider [1914] HCA 79; (1914) 19 CLR 197 per Isaacs J at 213; and Frazer v Walker (1967) 1 AC 569 at 585.
[25] Supra, citing from Frazer v Walker (1967) 1 AC 569 at 585.
[28] Ibid at 630 citing Assets Company, Limited v Mere Roihi (1905) AC 176; Waimiha Sawmilling Co v Waione Timber Co (1926) AC 101; Butler v. Fairclough [1917] HCA 9; (1917) 23 CLR 78; Wicks v. Bennett [1921] HCA 57; (1921) 30 CLR 80; Stuart v. Kingston [1923] HCA 17; (1923) 32 CLR 309, decision reversed by the Privy Council on another point - see [1924] UKPCHCA 3; (1924) 34 CLR 394.
[29] Ibid at 630 citing Oertel v Hordern (1902) 2 SR (NSW) (Eq.) 37; Wicks v Bennett; Friedman v Barrett; Ex parte Friedman (1962) QdR 498; R.M. Hosking Properties v Barnes (1971) SASR 100; Achatz v De Reuver (1971) SASR 240.
[30] [1967] HCA 15; (1967) 116 CLR 61 at 78.
[38] See paragraph [18] of these Reasons.
[39] See above [1891] AC 248 at 254.
[40] Citing Frazer v Walker [1967] 1 AC 569 at 585; and Breskvar v Wall (1971) 126 CLR at 384-385.
[41] In Breskvar v Wall (1971) 126 CLR at 384-385.
[43] Barry v Heider [1914] HCA 79; (1914) 19 CLR 197.
[44] Logue v Shoalhaven Shire Council (1979) 1 NSWLR 537, per Mahoney JA at 563.
[46] See : Vandepitte v Preferred Accident Insurance Corporation of New York, [1933] AC 70 per Lord Wright at 79; Birmingham v Renfrew [1937] HCA 52; (1937) 57 CLR 666 per Dixon J at 686; and Fluor Australia Pty Ltd. v ASC Engineering Pty Ltd & Anor [2007] VSC 262 per Bongiorno J at [16] and following.
[47] Neale v Willis (1968) 19 P&CR 836, cf. Hersey v Giblett [1854] EngR 145; (1854) 18 Beav 174 (52 ER 69).
Body Corporate No 12870 & Ors
Aldal Pty Ltd & Ors [2010] VSC 366
(1954) 91 CLR 353
(1914) 19 CLR 197
(1917) 23 CLR 78
(1921) 30 CLR 80
(1923) 32 CLR 309
(1924) 34 CLR 394
(1967) 116 CLR 61
(1979) 1 NSWLR 537
(1937) 57 CLR 666