The law-positive covenants to pay for repairs
59 Defendant's counsel contended that it was open to the plaintiffs to proceed under cl.1(b) of the s.88B Instrument, rectify the cattle yards after giving notice, and then sue the defendant for the cost of rectification. It was then suggested that the amount involved is relatively small and that it was inappropriate for the plaintiffs to seek a remedy in this Court.
60 The present proceedings cannot be treated, as defendant's counsel sought to do, as a small claim or one which should have been brought in some lower court. Effective remedies for the infringement of the plaintiffs' right include a mandatory injunction, and there is no other court which it was reasonable for them to approach.
61 In my opinion the procedure in cl.1(b) is not available. The matter of complaint is not that the defendant was in default in duly performing the condition in clause 1(a) that she maintain and keep in good repair and sound condition the cattle yards. The obligation in clause 1(a) not to pull down or remove fences relates to fences and not to the cattle yards. Further it appears to me to be very doubtful as a matter of law whether, when the easement was created, a positive obligation to make a payment in respect of maintenance or repair could be imposed by a provision of a s88B Instrument. At common law a positive covenant given in association with the creation of an easement, whether a covenant to repair or a covenant to pay for repairs, and other positive covenants, were effectual as between the original grantor and grantee, but the burden of a positive covenant did not run with the land so as to bind later owners of the servient land. In Megarry & Wade "The Law of Real Property" 6th ed. London 2000 at 1004-1005 and at 1152 this is treated as a matter of course.
62 In England the view expressed by Megarry and Wade is now firmly established by the decision of the House of Lords in Rhone v Stephens [1994] 2AC 310. Lord Templeman said at 321:
For over 100 years it has been clear and accepted law that equity will enforce negative covenants against freehold land but has no power to enforce positive covenants against successors in title of land. To enforce a positive covenant would be to enforce a personal obligation against a person who has not covenanted. To enforce negative covenants is only to treat land as subject to a restriction.
63 I find the speech of Lord Templeman, with whom all members of the House concurred, persuasive, indeed convincing, and in my view I should follow it. This is a subject on which no settled position has appeared from Australian decisions, which I will review.
64 Megarry and Wade refer to several mechanisms which can produce much the same result, that presently significant being that the grant of an easement may be so expressed that entitlement to the benefit is conditional upon compliance with some condition such as the payment of money for repair. In the present case the s.88B Instrument is not expressed so as to make enjoyment of the right of way conditional upon the dominant owner's having first met the cost of repair and maintenance. In any event that mechanism would be ineffective if, as appears to be the case of the defendant, the servient owner was prepared to accept being denied the benefit of the easement.
65 In Frater v. Finlay (1968) 91 WN (NSW) 730 at 734 Judge Newton QC decided:
Whether the covenant does or does not run with the land does not seem to me to matter. If a covenant is an easement or part of an easement, or is an incident to an easement, that, I think, is sufficient to bind the assigns of the grantor and to confer a benefit upon the assigns of a grantee.
66 Judge Newton's opinion was based upon Cameron v. Dalgety [1920] NZLR 155 (Herdman J), and on a review of some earlier authorities which appear to me to show the difficulty of the conclusion which Judge Newton reached. In Cameron v. Dalgety the covenant of the grantor on behalf of himself and his assignees was treated as part of the grant. In Frater v. Finlay, with what I regard as a marked extension of anything supported by Cameron v. Dalgety, the covenant by the grantee for himself and his assigns was treated as part of the grant. Frater v. Finlay has had later judicial consideration, not uniformly favourable. In Rufa Pty Ltd v. Cross [1981] Qd.R 365 in the Full Court of the Supreme Court of Queensland mutual easements for support were granted by joining owners over a party wall; each party was to be at liberty to extend the wall longitudinally and was to pay in the first place all the construction costs, and in the event of the other party desiring at any subsequent time to use any part of the extension he was to pay the other party one half of the value of such portion of the extension as he proposed to use. In the court below it was held that the covenant was part of the essential fabric of an easement binding upon any successors in title who chose to make use of the extension; and it was enforced against a subsequent owner. D.M. Campbell J held that the right to use the extended portion of the wall provided that a neighbour seeking to use it contributed half its value was a right capable of forming the subject matter of a grant of an easement; see 368B. Lucas SPJ agreed with this view: see 366D while Kneipp J did not: 370-371. With respect, I do not find the view expressed by D.M Campbell J to be applicable to support any general principle relevant in the present case. In my understanding his Honour was of the view that the meaning and effect of the grant of easement were that the right to use the extended portion of the wall was conditional upon contributing half its value; see 368B. This conclusion does not uphold the ruling in Frater v. Finlay, to which Lucas SPJ and D M Campbell J did not refer. In my respectful view an observation of Kneipp J at p370F-G shows that the conclusion of Newton DCJ in Frater v. Finlay was incorrect: "But I cannot see that a covenant by the grantee can be regarded as part of the grant." See 370F-G to 371B.
67 Kneipp J at 371 upheld the claim on a different ground, that "A man who takes the benefit of a deed is bound by a condition contained in it though he does not execute it." This ground is not applicable in the present case, where the defendant is not seeking to take the benefit of the easement but appears concerned to minimise its effect in every way she can. The principle relating to benefit and burden cannot apply to the defendant in respect of the cattle yards, which are situated on her own land; no benefit with respect to the use of the cattle yards is conferred on her by the easement. The principle of benefit and burden,, if it had been invoked, may well have supported the decision in Frater v. Finlay. It was in this context that, in Gallagher v. Rainbow (1994) 179 CLR 624 at 647-648 McHugh J referred to Frater v. Finlay and Rufa v. Cross - "Furthermore, the successor in title to a person bound by a deed may be bound by obligations in the deed if the successor in title takes a benefit conferred by the deed Rhone v Stephens [1994] 2 W.L.R 429; Halsall v Brizell [1957] Ch. 169; E.R. Ives Investments Ltd. v High, [1967] 2 Q.B. 379; Frater v Finlay (1968), 91 W.N.(NSW) 730; Rufa Pty. Ltd. v Cross, [1981] Qd R. 365." McHugh J assumed but to my reading should not be understood to have decided that the benefit and burden principle extends to persons who are not parties to or named in the Deed; see p648. The benefit and burden principle was extensively criticised in Government Insurance Office (NSW) v. KA Reed Services Pty Ltd [1988] VR 829 by Brooking J in his judgment at 830 to 841: the views of Brooking J would have to be addressed carefully by a court which is asked to act simply on that principle, but that is not the present case. The principle of benefit and burden has not become established as a general legal principle. It has sometimes been referred to as the Ocean Island Equity, an allusion to Tito v Waddell (No 2) [1997] Ch 106. It was considered with references to authorities and sources, by Young J in Rural and Agricultural Management Ltd v West Merchant Bank Ltd (1995) 18 ACSR 793 and in Ryan v Rouen [2000] NSWSC 468 at paras [72] to [75]. There seems to be room for such a principle where owners of equitable interests or claimants against a fund compete with other similar claims. In context of positive obligations under easements Rhone v Stephens appears to have concluded against any such principle.
68 In my opinion Rufa v. Cross is not authority for the principle upon which Frater v. Finlay was decided. In my view I should not follow Frater v. Finlay. I should follow Rhone v Stephens. For that reason the contention that the plaintiffs could, and also should have sought a much simpler remedy in a Local Court is not well founded.
69 It is not difficult to see inconveniences in this state of the law, and several provisions of the Conveyancing Act 1919 now deal with positive covenants. Positive covenants were first dealt with by amendments to Pt.6 Div.4 of the Conveyancing Act 1919 made by the Conveyancing (Covenants) Amendment Act 1986, which commenced on 21 May 1986, later than the registration of the deposited plan, and dealt only with positive covenants imposed by prescribed authorities, in aid of public purposes such as Town Planning. More general provisions relating to positive covenants for maintenance or repair in s.88BA were inserted in the Conveyancing Act 1919 by the Property Legislation Amendment (Easements) Act 1995.