Pirie v Registrar-General

[1962] HCA 58

High Court of Australia|1962-07-01|Before: Owen JJ, Kitto J, Jacobs J

View original source

At a glance

Source facts

Court

High Court of Australia

Decision date

1962-07-01

Before

Owen JJ, Kitto J, Jacobs J

Source

Original judgment source is linked above.

Judgment (50 paragraphs)

[1]

High Court of Australia Kitto, Taylor, Menzies, Windeyer and Owen JJ. Pirie v Registrar-General [1962] HCA 58

[2]

ORDER Appeal allowed with costs. Order of the Supreme Court set aside. In lieu thereof order that it be declared that the Registrar-General has not substantiated and upheld the grounds of his refusal to cancel the notification of a restrictive covenant at present appearing on certificate of title volume 5607 folium 206, and that the Registrar-General pay the costs of the application in the Supreme Court up to and including the order of 9th October 1961. Further proceedings (if any) in the matter remitted to the Supreme Court.

[3]

This is an appeal from an order of the Supreme Court of New South Wales (Jacobs J.) made upon an application by the appellants under s. 121 of the Real Property Act, 1900-1956 N.S.W.. That section, so far as material, applies where a registered proprietor of land under the Act has applied to the Registrar-General to have an act done or duty performed which by the Act is prescribed to be done or performed by him, and the Registrar-General has refused so to do. By sub-s. (1) the proprietor is enabled to require the Registrar-General to set forth in writing the grounds of his refusal, and to summon him to appear before the Supreme Court to substantiate and uphold the grounds of his refusal. Sub-section (3) provides that if any question of fact is involved the Court is to direct an issue to be tried to decide the fact, and that the Court shall thereupon make such order as in their (sic) judgment the circumstances of the case may require, and the Registrar-General shall obey the order. The provisions as to the making of an order and the Registrar-General's obedience to it apply, as I read the section, in every case, whether or not a question of fact has had to be decided. This was clearly so when all the provisions of the section were grouped together in one long sentence devoid of punctuation, as they were in the predecessor of s. 121, viz. s. 107 of the Act 26 Vic. No. 9; and the manner in which the section has now been subdivided can hardly be taken to have produced a difference in operation.

[6]

From the nature of the Torrens system of registration of titles, and in particular from such provisions of the Real Property Act as ss. 4, 12 (d) and (f), 32, 40, 42 and 43, it is, I think, a necessary conclusion that the Registrar-General, as head of the department authorized to carry the provisions of the Act into execution (s. 4), is under a general duty to keep the register book clear of all notifications save those which are authorized by law: see Wolfson v. Registrar-General (N.S.W.) [1] . The removal of an unauthorized notification is therefore, in my opinion, an act or duty which by the Act is prescribed to be done or performed by the Registrar-General, within the meaning of s. 121. The ground upon which Jacobs J. dismissed the appellants' application was, if I understand his Honour's judgment correctly, that s. 121 does not provide a method of challenging a refusal by the Registrar-General to remove a notification from the register book in a case such as the present, because a condition of the jurisdiction under the section is that the particular thing which the Registrar-General has refused to do shall be one which the Act obliges him to do; and that the Act does not oblige him to cancel a notification of a restriction which the proprietor contends should never have been entered, at least unless the want of justification for the entry is clear. His Honour thought that in a case such as this a registered proprietor ought in the first instance to take proceedings under s. 89 (3) of the Conveyancing Act, 1919-1954 N.S.W. for an order declaring that his land is not affected by the restriction, and that only after obtaining such an order would he be entitled to proceed under s. 121. With great respect, I do not think that his Honour correctly interpreted that section. Far from limiting itself to the case where the Registrar-General's refusal is so plainly unjustifiable that his duty to do what is asked of him is clear, the section assumes that he may in fact be able to justify his refusal. It even contemplates, in sub-s. (3), that there may be a contested issue of fact to be determined. It therefore cannot mean that the existence of a demonstrable right to have the thing done is a condition precedent to the proprietor's right to adopt the procedure. It must mean, in my opinion, that the proprietor may apply to the Court whenever he and the Registrar-General are in disagreement as to whether a course which he has requested the Registrar-General to follow is one which, upon a correct view of the relevant facts and of the law, it is incumbent upon him under the Act to follow. It is true that there is no provision in the section for joining as parties to the proceeding other persons who may have an interest in the question; but it is necessary to remember not only that general provisions as to procedure contained in ss. 139 and 140 may meet the needs of some cases but that since the jurisdiction under s. 121 is to make such order as the circumstances of the case may require there would seem to be no reason why the Court should not, if it thought the interests of justice would best be served by so doing, adjourn the case until rights as against third parties should have been determined in other proceedings. So construing the section, I am of opinion that the Supreme Court had jurisdiction in this case under s. 121. I turn, therefore, to consider what the Registrar-General's stated ground of refusal amounted to, and whether it should have been upheld. Jacobs J. himself thought it was ill-founded.

[13]

In the argument addressed to us on behalf of the Registrar-General it was put that although the prospective provision in s. 88 (3) applies only to restrictions validly existing as burdens on the land, the deeming provision is intended to recognize a longstanding practice in the Registrar-General's office of noting restrictive covenants on the register without considering their validity or operation, and to authorize the retention on the register of all notifications of covenants which in fact had been made before the enactment of the provision. In my opinion the contention is unsupportable. The one set of words describes both that which the Registrar-General is to be deemed to have had authority to do in the past and that which he is to have authority to do in the future. The provision cannot mean one thing for the future and a different thing for the past. Its subject matter in each case is a restriction which subjects land to a burden. The fact that a covenant has been entered into which curtails the covenantor's rights with respect to the user of land is not enough by itself to attract the operation of the sub-section. The restriction must be a burden upon the land; that is to say, it must be enforceable not merely as a contractual obligation, but as an interest in the land, so that even a stranger to the covenant, upon acquiring the land, will become bound by the restriction in virtue of his ownership - unless, of course (since the interest it creates is only equitable), he or a predecessor of his has obtained the legal estate for value and without notice. In other words, the restriction must be one which is enforceable in equity under the doctrine of Tulk v. Moxhay [2] . That a restriction so enforceable does confer an interest in the land to which a subsequent owner's title is subject unless he or his predecessor has taken by purchase of the legal estate for value without notice must be considered settled, as regards land not under the provisions of the Real Property Act, by the decision of the Court of Appeal in In re Nisbet & Potts' Contract [1] ; and as regards land under that Act the position before the Conveyancing Act was, I think, that although the interest was not unenforceable against the covenantor by reason of s. 42: Barry v. Heider [2] ; Great West Permanent Loan Co. v. Friesen [3] ; Abigail v. Lapin [4] , it was unenforceable against a registered proprietor subsequent to the covenantor if he took as or under a purchaser for value, whether with or without notice, since s. 43 supplements the principle of In re Nisbet & Potts' Contract [1] by making notice immaterial.

[17]

Thus there are only three kinds of restriction which burden the land to the use of which they relate - restrictions the benefit of which is by express language annexed to the protected land, restrictions the benefit of which is annexed to the protected land by virtue of a building scheme, and restrictions the benefit of which is assignable with the protected land - and the restrictions in the present case are not shown to fall within any of them. They are not annexed to other land by the language of the instrument. If they are annexed to other land by a building scheme, at least the evidence does not show it. (What would have had to be shown is that the conditions were fulfilled in this case which were laid down in Elliston v. Reacher [1] ; Reid v. Bickerstaff [2] and Kelly v. Barrett [3] ). Nor is there anything in the material before us to point to any other land as being land upon a disposition of which the covenant was intended to be assignable to the new owner. It is not finally settled by authority whether a restriction can fall within the third of these kinds unless the land with which it is intended to be assignable is defined by the instrument itself which creates the restriction. Bennett J. held that it could not, that is to say he held that extraneous evidence to identify that land is inadmissible except in so far as, on ordinary principles, it may be looked at in aid of interpretation: Miles v. Easter [4] . Upjohn J., on the other hand, has held that the necessary identification may be found entirely in evidence of surrounding circumstances: Newton Abbot Co-operative Society Ltd. v. Williamson & Treadgold Ltd. [5] . Learned writers on the subject have supported the opinion of Bennett J.: See Sir Lancelot Elphinstone's article (1952) 68 L.Q.R. 353, and Preston & Newsom, Restrictive Covenants Affecting Freehold Land, 3rd ed. (1960) p. 27. But in the present case there is nothing either in the instrument containing the covenant or in the evidence which has been adduced, to identify any land as being land which the covenant was designed to benefit. For all that appears the covenant was a covenant in gross. If it was, the restrictions were never binding save as between the parties to their creation and therefore cannot be said to have subjected the appellants' land to any burden: cf. Concord Municipal District v. Coles [6] .

[19]

For this reason I am of opinion that the Registrar-General has not shown that his notification on the appellant's certificate of title is one to which the retrospective operation of s. 88 (3) applies. But the fact that the instrument containing the restrictive covenant did not by its language annex the benefit of the restrictions to land retained by the covenantee is, in my opinion, by itself a reason for reaching the same conclusion, because s. 88 (3), as I would construe it, relates only to a restriction of the same description as that to which sub-s. (1) of the same section is directed, that is to say a restriction (as to the user of land) the benefit of which is intended to be annexed to other land. The sub-section links that class of restriction with easements, and provides that neither shall be enforceable against a person interested in the land claimed to be subject to it, not being a party to its creation, unless the instrument clearly indicates (a) the land to which the benefit of the easement or restriction is appurtenant; (b) the land which is subject to the burden of the easement or restriction; (c) the persons (if any) having the right to release, vary or modify the easement or restriction other than persons having, in the absence of agreement to the contrary, the right by law to do so; and (d) the persons (if any) whose consent to a release, variation or modification of the easement or restriction is stipulated for. The expression "is intended to be annexed to other land", as here used, is not satisfied, in my opinion, unless the instrument creating the restriction discloses an intention that by force of its own language the benefit of the restriction shall be annexed to other land. This excludes the case where annexation is not express but is the result of a building scheme. It excludes also the case where the benefit of a restriction is not annexed to other land and is merely made assignable with other land - excludes it even if the law is, as Mr. H. W. R. Wade maintains (1957) Cambridge Law Journal 146, notwithstanding the case of In re Pinewood Estate, Farnborough [1] , that an assignment of the benefit together with the other land brings about an annexation. Neither a natural reading of s. 88 as a whole nor the probabilities of the matter would lead one, I think, to understand sub-s. (3) as intending to refer by the expression "a restriction" to any different kind of restriction from that with which, up to that point, the section has been dealing. The form of the section tends against such a reading. A sudden change of subject matter in the middle, not only of a section, but of a sub-section, indeed of a sentence, is not likely to be intended. But that is not all. If the change of subject matter is intended, the contrast produced is remarkable. The first subject is a restriction of such a kind that its enforceability as a burden upon the subject land is ensured by the fact that both the general law and the section itself require a clear indication in the instrument itself of land to which the benefit is appurtenant. The other subject is a restriction of a kind for which case law has not yet definitely laid down that the land to be benefited must be defined by the instrument, and for which the section itself does not take upon itself to enact that requirement. Consider the result which s. 88 (3) would produce if its provisions were to extend to a restriction of this latter kind. In the case of a restriction enforceable only by virtue of the doctrine applying to building schemes, it would mean that the Registrar-General would be authorized to undertake the task - often a difficult enough task even for a court - of investigating the circumstances of the sale in which the restriction was created, and deciding whether the case is within the Elliston v. Reacher [1] doctrine; and he would be authorized to record his decision on the register as a statement of ascertained fact. In the case of a restriction which is assignable with the land benefited but is not annexed to that land, it would have further consequences sufficiently odd to give one pause. First, if the opinion of Upjohn J. be correct as to the identification of the dominant land from extrinsic evidence, the Registrar-General would be authorized to inquire and satisfy himself as to the identity of the land intended to be benefited in cases where the instrument itself does not supply the answer. Secondly, he would be authorized to inquire into the question whether the land benefited had been transferred without an assignment of the covenant since the creation of the restriction; for, if it had, the restriction would no longer exist as a burden on the subject land. Thirdly, he would be authorized to enter on the title to that land a notification that the restriction is a burden upon it, though the statement could not in truth be more than an expression of his opinion upon a possibly doubtful question. And, finally, the notification would stand thereafter as a continuing statement that the restriction is a burden on the land, notwithstanding that a transfer of the land benefited without an accompanying assignment of the covenant may at any moment bring the burden, if it exists, to an end, and no one would be able to tell at any given point of time whether it has come to an end unless he were to investigate transactions unconnected with the subject land and not necessarily to be discovered by search in the Lands Titles Office. It must be remembered that what s. 88 (3) authorizes is not a notification of the historical fact that a restrictive covenant has been entered into; it is a notification of the existence of a burden consisting of a restriction upon user; so that no notification of a covenant is within the authority unless it is, or amounts to, a statement that the covenant is currently effectual in law to subject the land to the burden of a restriction.

[28]

Prior to the coming into operation of the Conveyancing Act, 1919 (1st July 1920) there was no legislation in force in New South Wales which governed the creation of, or directly affected the efficacy of, covenants restrictive of the use of land. But in general, a restrictive covenant would not bind the land to which it related unless by the terms of the covenant itself the benefit of the restriction was annexed to other specified land. This general proposition, however, had no application to covenants given and obtained as part of a common building or development scheme and it must also be read subject to the unresolved difference of opinion between Bennett J. in Miles v. Easter [1] and Upjohn J. in Newton Abbot Co-operative Society Ltd. v. Williamson & Treadgold Ltd. [2] concerning covenants of the character under consideration in those cases. However, by s. 89 (1) of the Conveyancing Act, 1919 it was provided that: "No purchaser of any land shall be affected by any covenant restrictive of the use of the land contained in any instrument coming into operation after the commencement of this Act unless the instrument containing such covenant clearly defines - (a) the land to which the benefit of the covenant is intended to be appurtenant; and (b) the land which is to be subject to the burden of such covenant; and (c) the persons (if any) by whom or with whose consent the covenant may be released, varied, or modified". It is of importance to notice that this provision related only to covenants contained in instruments coming into operation after the commencement of the Act and it left unaffected covenants in instruments which came into operation prior to that event. But it is even more important to notice that the opening words of the section were sufficiently general to make the provision applicable to all restrictive covenants whether obtained as part of a common building scheme or not (cf. (1948) 22 A.L.J. p. 72). This provision was repealed by the Conveyancing (Amendment) Act, 1930. So also was the immediately preceding section of the principal Act which had conferred authority upon the Supreme Court, in specified circumstances, to discharge or modify restrictions imposed by covenants of the character under consideration. In place of these two sections three new sections - 88, 88A and 89 - were inserted in the principal Act. The conditions specified in the new s. 88 (1) were substantially similar to those specified in the old s. 89 (1) but some difference may be observed in the opening words of these two sub-sections. The next thing to be noticed is that sub-s. (3) of the new s. 88 contained a novel provision. It provided that: "This section applies to land under the provisions of the Real Property Act, 1900, and in respect thereof - (a) The Registrar-General shall have and be deemed always to have had power to enter in the appropriate folium of the register book relating to the land subject to the burden of a restriction, a notification of the restriction, and a notification of any instrument purporting to affect the operation of the restriction of which a note has been so entered, and when the restriction is released, varied, or modified, to cancel or alter the notification thereof. (b) A notification in the register book of any such restriction shall not give the restriction any greater operation than it has under the instrument creating it. (c) Every such restriction notified on the appropriate folium of the register book shall be an interest within the meaning of section forty-two of that Act.".

[32]

The question now is whether s. 88 (3) of the Conveyancing Act, as it now stands, must be taken to justify the entry of notifications of covenants created otherwise than in accordance with the conditions specified in that section. The learned judge of first instance expressed the view that: "The only restrictions which can be notified on the register book", pursuant to this section, "are those which comply with the requirements of s. 88 (1)". But, of course, sub-s. (1) applies only to covenants contained in instruments coming into operation after the Conveyancing (Amendment) Act, 1930 and sub-s. (3) not only authorizes the making of such notifications in the future, but deems the Registrar-General "always to have had power to enter in the appropriate folium of the register book relating to the land subject to the burden of a restriction, a notification of the restriction" and it is, therefore, obvious that the provision was intended to apply also to restrictions created by covenants contained in instruments coming into operation prior to 1930. However, I do not understand his Honour to limit the operation of sub-s. (3) to covenants contained in instruments coming into operation after the commencement of the amending Act; rather, it seems to me, it is implicit in his observations that it applies also to covenants, whenever they were given, which conform to the conditions specified in s. 88 (1), or, as must be so, to those specified in s. 89 (1) of the Conveyancing Act, 1919. But if the latter proposition be correct - and I think it is - I can see no reason why s. 88 (3) should not be taken to apply to any restriction, whenever created, which would, apart from any special objection based upon the provisions of the Real Property Act, bind the subject land. It is, I think, not a valid answer to say that when sub-s. (1) speaks of a restriction "the benefit of which was intended to be annexed to other land" it is speaking only of a restriction contained in a covenant which itself declares that the benefit of the restriction is annexed to other land.

[33]

The sub-section, it should be observed, does not purport to validate restrictions created in accordance with its provisions; on the contrary, it denies binding efficacy to restrictions created by covenants which do not comply with the prescribed conditions. That is to say, the sub-section applies to covenants which do not "clearly indicate" one or more of the matters specified in pars. (a), (b), (c) and (d) and denies such efficacy to them. Accordingly it cannot, I think, be said that sub-s. (1) speaks only of restrictions contained in covenants which, in terms, declare that the benefit of the restriction is annexed to other land. On the contrary view restrictive covenants created in the course of a common building scheme would not, in their creation, be subject to the conditions prescribed by sub-s. (1) in spite of the fact that the existence of an intention to annex the benefit of the restrictions to other land is one of the requisites in the creation of such restrictions in the course of any such scheme (Elliston v. Reacher [1] ). But I am of the opinion that no such result was intended. Section 89 (1) of the Conveyancing Act, 1919 prescribed conditions non-observance of which in the creation of restrictions upon the use of land, even in the course of common building schemes, would result in the subject land not being "affected". And I can see no reason for thinking that when the Conveyancing (Amendment) Act, 1930 was enacted any departure from this legal situation was intended. Nor can I see any reason for thinking that when sub-s. (3) speaks of restrictions which constitute a burden on land it should not be taken to apply to all such restrictions validly created in accordance with the law at the time of their creation. Indeed, since the deeming provisions of sub-s. (3) require, ex post facto, the conclusion, that at all times, including November 1919, the Registrar-General had power to enter in the appropriate folium of the register book relating to the land subject to the burden of a restriction, a notification of the restriction, this conclusion is, I think inescapable.

[35]

Upon this view of s. 88 (3) the determining factor in the proceedings is the character of the restrictions created by the covenant. But it is impossible to say, upon the evidence, whether the covenant found its origin in a common building scheme and, therefore, whether apart from any question arising under the Real Property Act, it could be said to bind the appellants' land. In these circumstances it is, I think, difficult to see how the appellants could have succeeded in their application to the Supreme Court. That application was made under s. 121 of the Real Property Act and, the summons by which it was initiated, called upon the respondent, in the language of the section, "to substantiate and uphold the grounds of his refusal to cancel the notification" on the relevant certificate of title. But it is a prerequisite to the exercise of the power conferred by that part of the section which is relevant to this appeal, that it should appear that the respondent has refused "to have any act or duty done or performed which, by this Act is prescribed to be done or performed" by him. Overlooking the necessity, which these words create, of finding some "prescribed" act or duty, I fail to see how it can be said that the respondent is under a duty to cancel the notification unless he can show affirmatively that it binds the subject land. Whether or not the covenant did bind, and continues to bind, the subject land raises, I think, questions which can be determined only in proceedings between the appellant and the person, or persons, if any, who claim as the owners of other land to be entitled to the benefit of the covenant and, so long as these questions remain undetermined in proceedings inter partes, there can be no warrant for asserting that the respondent is under a duty, prescribed by the Act or otherwise arising, to cancel the notification. In my opinion, s. 121 provides a summary remedy in cases where it appears that there has been a prima facie failure on the part of the Registrar-General to perform a duty imposed upon him by the Act and has no application to cases where there exists an issue to be tried between the applicant and a third party or parties. In this case there is such an issue, that is to say, whether the covenant found its origin in a common building or development scheme and this cannot be decided in the absence of the person or persons, if any, who claim to be entitled by virtue of their ownership of other land to be entitled to the benefit of the covenant. I should add that the views which I have expressed concerning s. 121 are quite consistent with the decision in Ex parte Smart [1] , for the foundation of the jurisdiction of the Court to make an order in that case was the proposition that the Registrar-General had, in effect, refused - and refused improperly - to issue to the applicant a certificate of title under the Act. Accordingly, in my view, the appeal should be dismissed.

[41]

Furthermore I find in par. (b) and (c) of sub-s. (3) some indication that par. (a) has a broad application, although my understanding of par. (b) and (c) of the sub-section is admittedly imperfect. In sub-s. (3) (b) there is to be found a provision that a notification in the register book shall not give the restriction to which it relates any greater operation than it has under the instrument creating it. This is perhaps an indication that entries made under (a) are not of the character, typical of the Torrens System, which are conclusive evidence of the title of the person named in them but are rather intended merely to furnish information of outstanding interests the validity of which is not warranted by the registry, to use the language of Mr. Hogg at p. 761 of his work The Australian Torrens System (1905), but against this is the consideration that par. (c) makes a restriction when notified an interest for the purposes of s. 42 of the Real Property Act. It is, however, not necessary to come to any firm conclusion about what par. (b) means but for present purposes what is important is that it is the instrument rather than what appears upon the register book to which attention must be directed when the operation of a restriction falling within the terms of the sub-section is in question and from the history that has been given it is obvious that the date of the instrument's operation might be of decisive importance. I have found no good reason for adopting a construction of sub-s. (3) (a) that would prevent its applying to an enforceable instrument coming into operation in 1900 or 1925 because it would not have been enforceable had it been made after 1931. So far as s. 88 (3) (c) is concerned I am inclined to think that an unnotified restriction - that is, one to which s. 88 (3) (c) would have no application - would at least for some of the purposes of s. 42 of the Real Property Act be regarded as an interest, for perhaps the most important thing that that section does is to free the estate of a registered proprietor from any interest which is not notified and which does not fall within the enumeration (a) to (d) therein appearing and this is so notwithstanding that equitable interests may be protected by caveat; accordingly, I see no reason why the title of a registered proprietor cannot in some circumstances be free by virtue of ss. 42 and 43 from an unnotified restrictive covenant: cf. Wicks v. Bennett [1] . It was perhaps the recognition that it was hardly consistent with the fundamental idea of the Torrens System to authorize putting on the register what are in their nature equitable interests that made it appear expedient to insert a special provision such as s. 88 (3) (c) and then to accompany it by a safeguard such as is found in s. 88 (3) (b) but I find it unnecessary to attempt to exhaust the meaning of these difficult provisions. It is sufficient for present purposes to indicate that their general effect is to direct attention to the state of the law at the time when a particular deed creating a restriction came into operation.

[43]

Once it appears that the question whether the burden of the restriction under consideration bound the land in question cannot be decided merely by reference to the description of the restrictions to be found in s. 88 (1), it seems to me impossible to decide the question upon the information available and I consider that no order for the removal of the notification could be made under s. 121 of the Real Property Act. The ground upon which the appellant applied to the Registrar-General for the removal of the notification was, "as the covenant did not describe the land to which the benefit was intended to be appurtenant it is not enforceable against assigns of the original parties and is therefore not binding on ourselves as the present registered proprietors". Thus, in refusing to remove the notification on the ground that "the notification relates to restrictions arising under covenant as to the user of the land within the meaning of s. 88 (3) of the Conveyancing Act, 1919 as amended" the Registrar-General was really doing no more than rejecting the contention that it was a fatal objection that the covenant did not describe the land to which the benefit of the restriction was intended to be appurtenant. In my opinion he was correct in so doing whether or not s. 88 (1) only applies when the instrument itself shows that the benefit of a restriction which it creates is intended to be annexed to other land; when we are concerned with a deed made before 1st July 1920 I consider it unwise to express an opinion upon what the position would have been had it been made after that date. Furthermore, I am not satisfied that the Registrar-General was under a duty to decide whether or not the notification was rightly entered and to cancel the entry if he thought it was not. Section 121 assumes that the Act requires the Registrar-General to do an act in some circumstances and establishes the procedure for summarily determining whether a refusal to do the act was well founded but, having regard to ss. 88 and 89 of the Conveyancing Act, it seems to me that it is not for the Registrar-General to decide whether an entry should be cancelled because it was not authorized by s. 88 (3) and then to act upon his own decision, notwithstanding it can be conceded that once it is authoritatively decided in properly constituted proceedings that an entry should not have been made in the register book, the Registrar-General both should and could remove it without any order directing him to do so. I agree with the view which Jacobs J. took of the application of s. 121.

[44]

The Torrens system of registered estates and interests, as it exists in New South Wales, has as its main foundation s. 42 of the Real Property Act. Once a grant or certificate of title has issued the Registrar-General is, I think, under a duty to permit no entries or notifications to appear on the folium of the register book except such as the law authorizes. Persons claiming equitable interests, or having other claims the notification of which on certificates of title the law does not authorize, may up to a point protect their interests by caveats. But that does not cut across the fundamental principle of the system. It follows, I think, that the Registrar-General whose duty it is to put no unauthorized entries in the register book is under a corresponding duty to remove any that ought not to be there. And that duty can, I think, be enforced by proceedings pursuant to s. 121 of the Act. I think this section has a wider application than Jacobs J. was prepared to allow it, but I appreciate the difficulty that his Honour felt in allowing the applicants in this case to avail themselves of that section, other persons who may be interested in the question not being represented. I would, however, make three observations on his Honour's reasons for his conclusion: First, it seems that in practice the Registrar-General has on occasions entered upon inquiries as to the validity of restrictive covenants and without referring the question to a court has decided, inter alia, whether or not they were sustained by common building schemes. Apparently he has on occasions decided this, often very difficult, question of fact relying upon a statutory declaration: see Messrs. Baalman and Wells, Land Titles Office Practice 3rd ed. (1952) pp. 405-408. Secondly, his Honour thought that there was an alternative procedure open to the applicants under s. 89 (3) of the Conveyancing Act. Speaking generally, I do not doubt that proceedings under s. 89 are preferable to proceedings under s. 121; because in proceedings under s. 89 the Supreme Court directs notice of the application to be given by advertisement or otherwise to persons likely to be interested or affected. But the availability of the procedure under the Conveyancing Act does not, I think, make unavailable the procedure under the Real Property Act. And, thirdly, I agree with Kitto J. that that procedure can be suitably moulded and applied to meet the requirements of a particular case.

[49]

Although my construction of the Act thus accords generally with that adopted by Jacobs J., I do not accept his view that s. 88 (3), in so far as it deals with restrictions that the Registrar-General is deemed to have had authority to note on the register, cannot relate to restrictions that got their validity from building schemes. I agree that since 1931, and in some cases since 1920, the doctrine of a common building scheme will not, of itself, suffice to sustain in New South Wales a restrictive covenant, whether of land under the Real Property Act or under common law title. The statutory conditions must be complied with. But, these express statutory provisions aside, I do not agree that the benefit of a restriction on the user of one lot in a building scheme cannot be said to be intended to be annexed to other land. Whether or not the covenant be with the common vendor alone, and whatever form it takes, its benefit may have been intended to be annexed either to other land of the vendor or to all the other lots in the subdivision. Therefore, in my view, it does not follow that because in this case the instrument in which the restrictive covenant appears does not expressly state to what land its benefit is intended to be annexed, that the land in question could not, at the date when the note was made in the register book, have been "subject to the burden of the restriction" within the meaning of s. 88 (3) par. (a). I agree with my brother Kitto that there is here no evidence that that was so, for there is no evidence that there was in the relevant sense a building scheme. The covenant was made with a vendor who was subdividing a large area into lots. It may be that there was a common building scheme sufficient to sustain the covenant. But the Registrar-General has not suggested this, nor given that as his reason for not removing the notation from the register book. Unless, therefore, the maxim, omnia praesumuntur rite esse acta, applies - and that hardly seems likely, for we were told that it had been the practice to note in the register book any restrictive covenant contained in any instrument dealing with the land - the notation should, I think, prima facie be removed, for no grounds are shown for its being there. But it may be that there are grounds that the Registrar-General, or someone else, would wish to put forward for consideration in some further proceedings in the Supreme Court; and it may be that that Court might think that notice should be given by advertisement or otherwise to anyone who might be concerned to maintain the covenant on the register. These proceedings, in the form they have taken up to the present, are, I agree with Jacobs J., hardly suitable for the final determination of the issue. I think, therefore, that it would be appropriate to remit the case to the Supreme Court. I would allow the appeal with costs.