Transfer of Land Act 1893, s 129C

Oleander Nominees Pty Ltd & Ors v The Owners of Lakeside Villas Strata Plan 14025 [2002] WASC 255

Owners of Corrine Court 290 Stirling Street Perth Strata Plan 12821 v Shean Pty Ltd [2000] WASC 181; (2000) 23 WAR 1

Smith v Australian Real Estate & Investment Co Ltd [1964] WAR 163

Barrett v RSE Holdings Pty Ltd [1999] WASC 128

Kort Pty Ltd v Shaw [1983] WAR 113

Pieper v Edwards (1982) 1 NSWLR 336

Re Henderson's Conveyance [1940] Ch 835

1 MASTER SANDERSON: This is the plaintiffs' originating summons seeking a modification of a restrictive covenant over certain property in the Perth metropolitan area. For reasons which will become apparent, it was necessary to deal with the application at short notice. After hearing the parties, I indicated that the application would be refused and that I would publish reasons in due course. These are those reasons.

2 The originating summons sought the following order:

"1. The restrictive covenant set out in the schedule marked 'B' that burdens the land set out in the schedule marked 'C' be modified pursuant to section 129C of the Transfer of Land Act 1893 (WA) so as to delete from paragraph 11 of the restrictive covenant the words 'until the 31st day of December 2004'."

3 The restrictive covenant, the subject of the application, burdens some 402 properties which are collectively known as The Vines. The restrictive covenant is in the following terms:

"The Transferee on behalf on himself, his successors in title, transferees and assigns to the land above described (hereinafter referred to as 'the said land') hereby covenants and agrees with the Transferor, its successors in title, transferees and assigns as follows:

1 That the Transferee shall not construct or erect or externally renovate any building or structure or appendage (including but without limiting the generality thereof any dwellings, garages, outbuildings, swimming pools, tennis courts, rotary clothes hoists, fences, walls, television, radio or other antennae in the above land) without the written consent of the Transferor first had and obtained and the Transferee shall submit to the Transferor or its assigns plans and drawings in form acceptable to the Transferor of the proposed construction, erection, external renovation, structure or appendage and the siting thereof where applicable together with details of the materials proposed to be used in the said construction, erection, external renovation, structure or appendage.

2 That the Transferee shall not erect or display any sign, hoarding or advertisement of any description whatsoever on the said land provided that this restriction shall not operate to bar the Transferor from erecting or displaying such sign, hoarding or advertisement on the said land.

3 The Transferee shall not cause, permit or authorise any part of a residence to be used in any way directly or indirectly for any business, commercial, manufacturing, mercantile, storage, vending or any non-residential purpose.

4 The Transferee shall not park, store or keep or permit to be parked, stored or kept on the said land any vehicle of a commercial type which is used by the Transferee or his invitees in the ordinary course of business.

5 That the Transferee shall not conduct or permit to be conducted any repairs or restorations of any motor vehicle, boat, trailer, aircraft or other vehicle on the said land other than wholly within a garage on the said land.

6 That the Transferee shall not raise, breed or keep or permit to be raised, bred or kept any insects, reptiles, animals, livestock or poultry on the said land provided that this restriction shall not operate to bar the Transferee from keeping two dogs and two cats which shall be belled at all times on the said land.

7 That the Transferee shall not accumulate or permit to accumulate any rubbish, trash or garbage or other waste material on the said land or keep or permit the same to be kept on the said land except in containers located in appropriate areas screened or concealed from view so as not to be visible from any street unto which the said land fronts.

8 That the Transferee shall not erect or commence to erect or permit or suffer to be erected or commenced to be erected on the said land a dwelling house having a floor area of less than 140 square metres contained within the internal walls of the main body of such dwelling house but not including garage and carport and outbuildings.

9 The land subject to the burden of the restrictions above is the land hereby transferred.

10 The land having the benefit of the restrictions above are all the Lots shown in the Plan of Subdivision of which the said land forms part save and except the said land.

11 The covenants and restrictions herein contained or implied shall run with and bind the said land and shall inure for the benefit of and be enforceable by each and every registered proprietor for the time being of the land the subject of the said Plan and every part thereof until the 31st day of December 2004."

4 Pursuant to cl 11 of the restrictive covenant, the restrictions only operated until 31 December 2004. The originating summons was issued on 12 November 2004 and was first returned on 24 November 2004. The plaintiffs were quite rightly concerned that if the matter was not determined before the date upon which the restrictions were said to expire, no effective order could be made after that date. That explains the urgency in this matter.

5 The evidence established that the plaintiffs notified all of the owners of the 402 properties that they intended to make this application. The plaintiffs received written consents from 202 registered proprietors consenting to the application: see par 11 and 12 of the affidavit of Ann Clubley, sworn 10 December 2004. Certain of the other owners of the properties were served with the application and appeared at the hearing by counsel to oppose the orders sought. The application was made under s 129C of the Transfer of Land Act 1893. That section is in the following terms:

(1) Subject to subsection (1a), where land under this Act is subject to an easement or to any restriction arising under covenant or otherwise as to the user thereof or the right of building thereon, the court or a Judge may from time to time on the application of any person interested in the land burdened or benefited, or any local government or public authority benefited, by the easement or restriction, by order wholly or partially extinguish, discharge or modify the easement or restriction upon being satisfied -

(a) that by reason of any change in the user of any land to which the easement or the benefit of the restriction is annexed, or of changes in the character of the property or the neighbourhood or other circumstances of the case which the court or a Judge may deem material the easement or restriction ought to be deemed to have been abandoned or to be obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or

(b) that the persons of full age and capacity for the time being or from time to time entitled to the easement or to the benefit of the restriction whether in respect of estates in fee simple of any lesser estates or interests in the land to which the easement or the benefit of the restriction is annexed have agreed to the same being wholly or partially extinguished, discharged or modified or by their acts or omissions may reasonably be considered to have abandoned the easement or to have waived the benefit of the restriction wholly or in part; or

(c) that the proposed extinguishment, discharge or modification will not substantially injure the persons entitled to the easement or to the benefit of the restriction.

(1a) An application under subsection (1)(a) or (c) to extinguish, discharge or modify a single dwelling covenant that benefits more than 10 lots shall be accompanied by -

(a) the applicant's affidavit to the effect that the registered proprietor of each lot that is -

(i) wholly or partially within the prescribed area; and

(ii) benefited by the covenant the subject of the application or any other single dwelling covenant,

has been given written notice, the form and content of which has been approved by the Registrar, of the proposed application; and

(b) the written consent of the registered proprietors (at the time the application is made) of the majority of the lots referred to in paragraph (a) to the extinguishment, discharge or the modification of the covenant as proposed.

(1b) For the purposes of subsection (1a)(b), the written consent of the registered proprietor of a lot that has 2 or more registered proprietors is taken to have been given if consent has been given by -

(a) in the case of proprietors who are joint tenants, the majority of those proprietors; or

(b) in the case of proprietors who are tenants in common, a proprietor who is, or 2 or more proprietors who between them are, entitled to the majority of undivided shares in the lot.

(1c) If a lot is subject to a mortgage or charge, the written consent of the registered proprietor of that lot is not to be taken into account for the purposes of subsection (1a)(b) unless it is accompanied by the written consent of the mortgagee or chargee of the mortgage or charge that is first in order of priority.

(1d) In subsection (1a), (1b) and (1c) -

"lot" means a parcel of land that is shown on a plan (as defined in section 136A) as a lot, other than a common property lot on a survey-strata plan;

"single dwelling covenant" means a restrictive covenant that prohibits the construction of more than one dwelling on the lot burdened by the covenant.

(2) When any proceedings by suit or otherwise are instituted to enforce an easement, or to enforce any rights arising out of the breach of a restrictive covenant affecting land under this Act or any local government or public authority then any person against whom the proceedings are instituted may in such proceedings apply to the court or a Judge for an order under this section.

(3) The court or a Judge may on the application of any person interested make an order declaring -

(a) whether or not in any particular case any land under this Act or any local government or public authority is affected by an easement or by a restriction imposed by any instrument or created under Part IVA; or

(aa) what is the nature and extent of the easement and whether the same is enforceable and if so by whom; or

(b) what upon the true construction of any instrument, plan or diagram purporting to impose a restriction is the nature and extent of the restriction and whether the same is enforceable and if so by whom; or

(c) whether or not any easement or any restrictive covenant ought to be removed as an encumbrance from the Register.

(4) Notice of any application under this section shall, if the court or a Judge so directs, be given to the local government of the district in which the land is situated and to such other persons and in such manner whether by advertisement or otherwise as the court or a Judge either generally or in a particular instance may order.

(5) An order under this section shall when entered in the Register as hereinafter provided be binding on all persons whether of full age or capacity or not then entitled or thereafter becoming entitled to the easement or interested or thereafter becoming interested in enforcing any restriction which is thereby extinguished, discharged, modified, or dealt with and whether such persons are parties to the proceedings or have been served with notice or not.

(6) This section applies to easements and to restrictions whether subsisting at the commencement of this section or imposed thereafter whether or not created under Part IVA.

(6a) If an order is made on an application to which subsection (1a) applies, the applicant for the order shall apply to the Registrar, in an approved form and with payment of the prescribed fee, for the Registrar to make the amendments and entries in the Register necessary to give effect to the order.

(7) The Registrar shall on the prescribed application make all necessary amendments and entries in the Register for giving effect to such order in respect of all certificates of title specified therein.

(8) The costs of and incidental to an application made pursuant to the provisions of this section to the court or a Judge shall not be awarded against the defendant or respondent in any event.

(9) This section does not apply to easements granted under section 144 of the Land Administration Act 1997."

6 The power given to the Court by s 129C(1) is to "wholly or partially extinguish, discharge or modify the easement or restriction". The plaintiffs' application anticipated extending the restriction by removing the temporal limit of 31 December 2004. In other words, the covenants would continue to operate indefinitely. Thus to entertain the plaintiffs' application it would be necessary to read the power to modify the restriction to mean that it was open to the Court to increase or extend the restriction. I am not satisfied that is a proper interpretation of the subsection. In my view, s 129C is directed at lessening or reducing the burden and benefit of a restrictive covenant, not increasing it.

7 This interpretation of s 129C emerges, I think, from a reading of the various subsections. For instance, s 129(1)(a) allows for removal of the restriction if it "be deemed to have been abandoned or to be obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons". That suggests a removal, not an increase, in the restriction. Subsection (1)(b) anticipates all persons of full age and capacity, having agreed to the restriction being extinguished, discharged or modified, or by their acts having given such an indication. Once again there is nothing to suggest that the restriction can be increased.

8 Such authorities as there are on s 129C support this interpretation. In particular, the observations of Negus J in Smith v Australian Real Estate & Investment Co Ltd [1964] WAR 163, where his Honour said at 167:

"... I feel sure Parliament did not, when enacting s 129C, intend the Court to allow what is in effect the expropriation of private property, namely the right of a landowner to the benefit of a restrictive covenant, without compensation, unless completely satisfied that the benefit is valueless to such owner from a practical standpoint and does not secure him any practical benefit."

9 This passage was approved by Judges of this Court in Owners of Corrine Court 290 Stirling Street Perth Strata Plan 12821 v Shean Pty Ltd [2000] WASC 181; (2000) 23 WAR 1 at 24 and 29 and Oleander Nominees Pty Ltd & Ors v The Owners of Lakeside Villas Strata Plan 14025 [2002] WASC 255 at 30.

10 With respect, what was said by Negus J makes perfect sense. Any purchaser of a property in The Vines, the subject to a restrictive covenant, would have purchased the property with actual or constructive knowledge of the terms of the restriction. In other words, the purchase would have been made on the basis that the restriction was to fall away as at 31 December 2004. To now reimpose that restriction and to extend it indefinitely would remove from that purchaser a property right without compensation. It would take very clear words indeed in a statute for that to be the course taken by the courts.

11 In the circumstances then, I was not satisfied that s 129C authorised the modification of the restrictive covenant in the way proposed by the plaintiffs. I therefore dismissed the plaintiffs' application.

12 Subsequent to the publication of these reasons, I will hear the parties as to costs. I would note in passing that pursuant to s 129C(8) that no costs could be awarded against the defendants, even if the plaintiffs' application had been successful. That would seem to limit the options to either the plaintiffs paying the defendants' costs or there being no order as to costs. If agreement between the parties cannot be reached on this issue, then the matter should be listed in general chambers for determination.