Plaintiffs v Defendants

INTRODUCTION

1 The plaintiffs are the owners of land located at 54 Riverside Avenue, North Balwyn. There is a restrictive covenant noted on the certificate of title to the plaintiffs' land. Relevantly, the restrictive covenant provides that only one dwelling house may be built on the land.

2 The plaintiffs have applied under s. 84(1) of the Property Law Act 1958 (Vic) ("the Act") to wholly or partially discharge or modify the restrictive covenant. All of the owners of land which may be affected by the plaintiffs' application were given notice of the proceeding and an opportunity to be joined as defendants.

3 Each of the defendants other than the Registrar of Titles ("the defendants")[1] owns land abutting, adjacent to or in the vicinity of the plaintiffs' land. The defendants object to any discharge or modification of the restrictive covenant.

4 At the commencement of the trial, I ordered, at the request of the parties, that there be a separate trial of the following questions before any of the other issues in the proceeding are tried:

(1) Does any person have the right:

(a) to the benefit of; and

(b) to enforce against the plaintiffs the burden of,

the restrictive covenant contained in Instruments of Transfer numbered 1769993 and 1860493?

(2) If yes to (1), who is so entitled?

5 I made this order because I was satisfied that the resolution of these questions will substantially affect the evidence which will be admissible on the hearing of the application under s. 84(1) of the Act. Further, I was informed by counsel that there is a real prospect that the outcome of the trial of the separate questions may have the result that either the plaintiffs will decide to withdraw their application or that most of the defendants will cease to have any standing to oppose the relief sought by the plaintiffs.

FACTS

6 The plaintiffs' land, and that owned by the defendants, is located within what was once called the "Riverside Estate."

7 The Riverside Estate was created in 1914 or 1915 by the subdivision of two farms. One farm was owned by Sarah Leonora Robinson and was contained in the land comprised in certificate of title Volume 3868 Folio 411 ("the Robinson head title"). The Robinson head title was the subject of plan of subdivision numbered LP6551 ("the Robinson subdivision").

8 The other farm was owned by George Freer-Smith and was contained in the land comprised in certificate of title Volume 3868 Folio 495 ("the Freer-Smith head title"). The Freer-Smith head title was the subject of plan of subdivision numbered LP6652 ("the Freer-Smith subdivision").

9 The two plans of subdivision were approved in 1915 and were apparently submitted together for the purposes of establishing the Riverside Estate.

10 An advertisement for the sale of land in the Riverside Estate, apparently dated in or about 1914, was placed in evidence. The advertisement describes the proposed Riverside Estate and offers lots for sale from both subdivisions. The advertisement provides that the solicitor for both Mr Freer-Smith and Ms Robinson is Walter G Hiscock.

11 The form of contract of sale drawn by Mr Hiscock for the sale of lots in the Freer-Smith subdivision was placed in evidence. Special Condition 16 of that form of contract of sale provides:

The purchaser shall enter into a covenant with the vendor, his executors, administrators and transferees that he, his executors, administrators and transferees shall not... permit or allow any building other than a dwelling-house and its appurtenances to be erected on the land sold, and shall not erect more than one dwelling-house on each lot, and that each such house shall not cost less than five hundred pounds.

The forgoing special covenant shall appear in the transfer of the land sold if so required by the vendor, and shall appear as an encumbrance in the transfer of the land sold and on the Certificate of Title to be issued to each purchaser.

12 The plaintiffs and the defendants own land which was previously part of the Robinson subdivision. The evidence established that there were 60 lots in the Robinson subdivision, that all of them have since been sold and that 56 of them were transferred out of the Robinson head title subject to the restrictive covenant in issue. There was no explanation as to why four of the lots were transferred without imposition of the restrictive covenant. However, two of these lots were transferred after the death of Ms Robinson.

13 The restrictive covenant is in the following terms:

[The Transferee] doth hereby for herself, her heirs, executors, administrators and transferees covenant with the said Sarah Leonora Robinson her heirs executors administrators and transferees registered proprietor or proprietors for the time being of the land comprised in the said Certificate of Title other than the land hereby transferred as follows:- That the [Transferee] her heirs executors administrators and transferees will not at any time hereafter carry on quarrying operations on the said land hereby transferred nor dig, carry away or remove any marl stone earth clay gravel or sand therefrom except for the purpose of excavating for the foundations of any building to be erected thereon and further that no building shall at any time hereafter be erected on the lot hereby transferred save one dwelling house with the usual and necessary outbuildings thereto and that such dwelling house shall not be of less value that five hundred pounds and the [Transferee] doth hereby request that the above covenants may appear as encumbrances on the Certificate of Title to issue in respect of the land hereby transferred. (Emphasis added).

14 The plaintiffs' land is a consolidation of two parcels of land. First, the land which was previously Lot 372 on the Robinson plan of subdivision. Second, a small part of the land which was previously Lot 371 on the Robinson plan of subdivision.

15 The certificate of title to the plaintiffs' land records that it is subject to the restrictive covenant contained in two instruments of transfer.[2] Those instruments of transfer are the initial instruments under which Lots 371 and 372 were transferred out of the Robinson head title.

16 At the time of the initial transfer of Lot 372, and the creation of the restrictive covenant burdening that lot, there were four remaining lots in the Robinson subdivision - Lots 311, 312, 340 and 342. All of these lots have since been transferred out of the Robinson head title and that title has been cancelled. Of the owners of these four lots, Lyndy and Gregory Smart are the only defendants. They own the land which was previously Lot 311 and is now comprised in certificate of title Volume 7072 Folio 387 ("the Smart's land").

17 There was no direct evidence of the form of contract of sale used for sales of lots in the Robinson subdivision. However, I infer that a similar form of contract of sale to that used in the sale of lots in the Freer-Smith subdivision was used. I make this inference upon the basis that:

(1) the two subdivisions were created at the same time and were jointly advertised;

(2) the advertisement contains a statement that the same solicitor, Mr Hiscock, was acting for both Mr Freer-Smith and Ms Robinson;

(3) the contract of sale for lots in the Freer-Smith subdivision was drawn by Mr Hiscock; and

(4) the restrictive covenant which was included in the transfer of 56 of the 60 lots in the Robinson subdivision is consistent with Special Condition 16 of the contract of sale used in relation to the sale of lots in the Freer-Smith subdivision.

ISSUES FOR DETERMINATION

18 The preliminary questions require the Court to determine whether any person, and if so who, is entitled to the benefit of the restrictive covenant which is noted as an encumbrance on the certificate of title to the plaintiffs' land.

19 None of the plaintiffs or the defendants is an original covenantee, having purchased their land from Ms Robinson or her executors directly. In these circumstances, there are only three ways in which a defendant can establish an entitlement to enforce the benefit of the restrictive covenant against the plaintiffs. In Re Arcade Hotel Pty Ltd[3] Lowe J stated:

It has recently been laid down in a judgment generally accepted as accurately stating the law as it emerges from prior authority that where the person seeking to enforce the covenant is not the original covenantee there are only three possible ways in which he can become entitled to the benefit of the restrictive covenant viz.,

(1) As an assign of land to which the benefit of the covenant is annexed.

(2) As an express assign of the benefit of the covenant and of some or all of the dominant land.

(3) That he and the defendant own lands subject to a scheme of development and that they are reciprocally affected by the covenant".[4]

20 It was common ground that none of the defendants is an express assign of the benefit of the restrictive covenant. Accordingly, the second way in which the defendants or one or more of them may become entitled to the benefit of the restrictive covenant, as identified by Lowe J in Re Arcade Hotel, is of no application in this case.

21 It was submitted on behalf of the defendants that:

(1) Mr and Mrs Smart, and also the current owners of the lands previously comprised in Lots 311, 340 and 342 of the Robinson subdivision, were entitled to the benefit of the restrictive covenant in the first way identified by Lowe J in Re Arcade Hotel. This is because their land was transferred out of the Robinson head title after the plaintiffs' land. Accordingly, upon a proper construction, the restrictive covenant was given in favour of Ms Robinson as owner of the Smart's land, and also as owner of Lots 311, 340 and 342, and her successors and assigns.

(2) The Robinson subdivision constituted a scheme of development. Accordingly, each of the defendants, and also all other owners of land which was previously part of the Robinson subdivision, is entitled to the benefit of the restrictive covenant in the third way identified by Lowe J in Re Arcade Hotel.

IS THE RESTRICTIVE COVENANT ANNEXED TO THE SMART'S LAND?

22 In Re Arcade Hotel the Full Court of this Court considered a restrictive covenant expressed to be in favour of the transferor, "his heirs, executors, administrators and transferees, registered proprietor or proprietors for the time being of the land comprised and described in the said [head title] excepting thereout the land hereby transferred." This covenant is in substantially the same form as the covenant in this case. It was held in Re Arcade Hotel that the covenant enured only for the benefit of the whole of the retained land, and was not a benefit annexed to the individual portions thereof which were later excised from that land.[5]

23 If the decision in Re Arcade Hotel continued to bind me, I would have no hesitation in concluding that the benefit of the restrictive covenant was not annexed to the Smart's land. However, the effect of the decision in Re Arcade Hotel was abrogated by the enactment in 1964 of s. 79A of the Act. That section provides:

79A. Construction of covenants affecting land

It is hereby declared that when the benefit of a restriction as to the user of or the building on any land is or has been annexed or purports to be annexed by any instrument to other land the benefit shall unless it is expressly provided to the contrary be deemed to be and always to have been annexed to the whole and to each and every part of such other land capable of benefiting from such restriction.

24 It was accepted by counsel for the plaintiffs that if s. 79A is applicable then the benefit of the restrictive covenant is annexed to the Smart's land. However, it was submitted that the restrictive covenant ceased to be annexed to the Smart's land when, before the enactment of s. 79A, the last remaining lot was transferred out of the Robinson head title and it was cancelled. Accordingly, immediately before s. 79A was enacted, the plaintiffs' land was free of the restrictive covenant as there was no dominant title to which it was annexed. I accept that this was the position at that time.

25 Next, it was submitted on behalf of the plaintiffs that s. 79A should not be construed so as to deprive the plaintiffs of an unrestricted right which their predecessors in title enjoyed as a result of the decision in Re Arcade Hotel. It was submitted that this unrestricted right was a right, subject to any applicable planning controls, to erect more than one dwelling house on the plaintiffs' land. Reliance was placed upon the principle of statutory interpretation that a statute which divests rights is to be construed as operating prospectively only, unless the language used plainly manifests in express terms or by clear implication a contrary intention.[6] This principle does not assist the plaintiffs. The language of s. 79A manifests a clear intention that it is to operate retrospectively. The words "be deemed to be and always to have been annexed" could not be clearer. Furthermore, there is direct authority in favour of this result.[7]

26 It was accepted on behalf of the plaintiffs that, if s. 79A was applicable in this case, Mr and Mrs Smart, together with the owners of the lands previously comprised in Lots 311, 340 and 342 of the Robinson subdivision, are entitled to the benefit of the restrictive covenants over the plaintiffs' land. Accordingly, I find that Mr and Mrs Smart and the owners of those lands have the benefit of, and are entitled to enforce against the plaintiffs the burden of, the restrictive covenants in issue.

WAS THERE A SCHEME OF DEVELOPMENT?

27 Where the lots in a subdivision of land are all sold subject to a restrictive covenant, the Court may find that there has been a scheme of development, often called a building scheme. Where a scheme of development is established, all purchasers and their assigns are bound by, and entitled to the benefit of, the restrictive covenant.[8]

28 The requirements which must exist to establish a scheme of development were stated by Parker J in Elliston v Reacher[9] in the following terms:

[I]t must be proved (1) that both the plaintiffs and defendants derive title under a common vendor; (2) that previously to selling the lands to which the plaintiffs and defendants are respectively entitled the vendor laid out his estate, or a defined portion thereof (including the lands purchased by the plaintiffs and defendants respectively), for sale in lots subject to restrictions intended to be imposed on all the lots, and which, though varying in details as to particular lots, are consistent and consistent only with some general scheme of development; (3) that these restrictions were intended by the common vendor to be and were for the benefit of all the lots intended to be sold, whether or not they were also intended to be and were for the benefit of other land retained by the vendor; and (4) that both the plaintiffs and the defendants, or their predecessors in title, purchased their lots from the common vendor upon the footing that the restrictions subject to which the purchases were made were to enure for the benefit of the other lots included in the general scheme whether or not they were also to enure for the benefit of other lands retained by the vendors. If these four points be established, I think that the plaintiffs would in equity be entitled to enforce the restrictive covenants entered into by the defendants or their predecessors with the common vendor irrespective of the dates of the respective purchases.[10]

29 There will often be difficulties in establishing one or more of the essential elements of a scheme of development. Consequently, it may be necessary to infer their existence from all of the circumstances of the case. On this topic, Gillard J said in Fitt v Luxury Developments:

Where a scheme was established many, many years ago often there is no extrinsic evidence available to establish it. Hence in those circumstances one is left with the conveyancing documents and the like produced at the time and the court must do its best on that evidence...

Nevertheless the court can draw the inference from the documentation and will readily do so where it is proven that there was a large subdivision of building blocks and which were sold over a relatively short period.

In the case of Re Dennerstein Hudson J discussed the available evidence at p.692 and relied upon such factors as a common vendor, many lots being offered for sale in a subdivision and the common form of restrictive covenant as being factors of some importance in drawing the inference.[11]

30 It was submitted on behalf of the defendants that there was as scheme of development in respect of all of the land previously comprised in the Robinson subdivision. On behalf of the plaintiffs, it was submitted that the defendants had not proved all of the necessary elements to establish the existence of a scheme of development.

31 The first element is not in dispute. All of the present owners of land which was previously comprised in the Robinson subdivision derive their title from a common vendor, Ms Robinson.

32 The second element requires proof that Ms Robinson laid out her estate in the Robinson head title in lots subject to restrictions which she intended to impose on all of the lots, consistent only with some general scheme of development. It was submitted on behalf of the plaintiffs that this element has not been established because the existence of the restrictive covenant is not notified on the plan of the Robinson subdivision. Accordingly, the land in the Robinson subdivision was not "laid out" in lots subject to any restrictions. Those restrictions are to be found only in the individual transfers of land, and perhaps contracts of sale, to each purchaser. I do not accept this submission. In my view, the evidence establishes that Ms Robinson laid out her land in lots for sale with the clear intention of imposing a restriction, in the form of the restrictive covenant, on the sale of each lot. The fact that 56 of the 60 lots were sold subject to the identical form of restrictive covenant, over a 20 year period, is strong evidence of this intention. It is consistent only with some general scheme of development.

33 The third element requires proof that Ms Robinson, and later her executors, intended the restrictions in the restrictive covenant to be for the benefit of all of the lots in the Robinson subdivision which were sold. As I have said, all of the lots were sold and the Robinson head title has been cancelled. It was submitted on behalf of the plaintiffs that this element has not been established because four of the lots in the Robinson subdivision, including the final two which were sold, were not sold subject to the restrictive covenant. I do not accept this submission. Once again, the fact that the identical form of restrictive covenant was imposed on 56 of the 60 lots, over a period of 20 years, provides strong evidence of the necessary intention. The four exceptions are isolated instances, two before the death of Ms Robinson and two after her death. It is important to note that the first three sales after Ms Robinson's death, including the sale of Lot 372 which comprises the majority of the plaintiffs' land, were sold subject to the restrictive covenant.

34 Furthermore, such an argument was considered and rejected in Re Mack and the Conveyancing Act.[12] In that case, nine of 115 lots in a plan of subdivision were sold without the imposition of the common form restrictive covenant. Notwithstanding this, a scheme of development was found to exist. Wootten J reviewed the relevant authorities and concluded that the intention which is relevant is that of the vendor existing at the time of establishing the scheme.[13]

35 The fourth element requires proof that the parties to the proceeding to enforce the covenant, or their predecessors in title, purchased their lots from the common vendor on the footing that the restrictions were to enure for the benefit of the other lots included in the general scheme. It was submitted on behalf of the plaintiffs that this element has not been established because the lots were sold over a period of 20 years and there was no proof of a contractual obligation on Ms Robinson to impose a restrictive covenant on any subsequent sale of lots by her. I accept these submissions.

36 In my view, the facts do not establish the fourth essential element for the establishment of a scheme of development. Nor do they permit an inference to be drawn that this element existed.

37 In Elliston v Reacher, Parker J stated that the fourth element

may readily be inferred, provided the purchasers have notice of the facts involved in the first three points; but if the purchaser purchases in ignorance of any material part of those facts, it would be difficult, if not impossible, to establish the fourth point.[14]

Although it can be inferred that the purchasers from Ms Robinson had notice of the first two elements, because each transfer of land identifies the land transferred by reference to its lot number in the Robinson subdivision and identifies the land as being part of the land comprised in the Robinson head title, of which Ms Robinson was the owner, I am not prepared to infer that the purchasers had notice of the third element; that the intention of Ms Robinson was to benefit all of the lots in the Robinson subdivision intended to be sold by her. In my view, the sale of the lots in the Robinson subdivision over a period of 20 years, combined with the lack of any suggestion that Ms Robinson was contractually obliged to impose a restrictive covenant in respect of any subsequent sale of lots by her, militates against an inference that the purchasers knew Ms Robinson's intention was to benefit all of the lots in the subdivision which she intended to sell.

38 Further, there is no evidence that the purchasers were ever informed that the restrictive covenant was imposed on them for the benefit of other purchasers of lots in the Robinson subdivision, or that they would be the beneficiary of a reciprocal covenant in their favour. In this regard, the statement by Buckley LJ in Reid v Bickerstaff[15] is applicable:

There can be no building scheme unless two conditions are satisfied, namely, first, that defined lands constituting the estate to which the scheme relates shall be identified, and, secondly, that the nature and particulars of the scheme shall be sufficiently disclosed for the purchaser to have been informed that his restrictive covenants are imposed upon him for the benefit of other purchasers of plots within that defined estate with the reciprocal advantage that he shall as against such other purchasers be entitled to the benefit of such restrictive covenants as are in turn to be imposed upon them. Compliance with the first condition identifies the class of persons as between whom reciprocity of obligation is to exist. Compliance with the second discloses the nature of the obligations which are to be mutually enforceable. There must be as between the several purchasers community of interest and reciprocity of obligation.[16]

39 I conclude that the defendants have not established the requirements of a scheme of development, or building scheme, in respect of the land previously comprised in the Robinson subdivision. However, even if they had done so, I would nevertheless have been of the view that the plaintiffs purchased their land without notice of any such scheme and are unaffected by it.

NOTICE

40 The plaintiffs' land is under the operation of the Transfer of Land Act 1958 (Vic). In these circumstances, it was submitted on behalf of the plaintiffs that, notwithstanding the existence of a scheme of development, the only persons entitled to enforce the restrictive covenant against them remain Mr and Mrs Smart, and also the current owners of the lands previously comprised in Lots 311, 340 and 342 of the Robinson subdivision. It was submitted that this result follows because the plaintiffs purchased their land subject only to the restrictive covenant notified on the certificate of title. That notification contains no reference to a building scheme. Nor does it give any notice that the restrictive covenant is for the benefit of all of the lands previously comprised in the Robinson subdivision.

41 In Re Dennerstein[17] Hudson J considered an application under s. 84 of the Act for a declaration as to whether or not the applicant's land was affected by a restrictive covenant imposed in the original transfer of land from the head title of a subdivision. In an earlier decision, another judge had found that the restrictive covenant in question was invalid because the benefit of it was not annexed to any land; it was simply a covenant in favour of named persons and their executors, administrators and transferees.[18]

42 The objectors sought to contend that there was a scheme of development affecting the land. Hudson J found that there was a scheme of development.[19] However, as there was no notice in the Register that the restrictive covenant arose under a scheme, or as to the identity of the land to which the benefit of the scheme was to be annexed, Hudson J decided that the plaintiff was not bound by the restrictive covenant.

43 In Re Dennerstein, it was submitted on behalf of the objectors

that from the transfer it would appear that the land was transferred out of a certificate of title which comprised an area of land known as the "Como" estate, that from an inspection of the lodged plan of subdivision of this estate the lots therein could be identified and by searches of the transfers of those lots, it could be ascertained as a matter of reasonable inference that the transfers were made pursuant to a common building scheme and what were the lands affected thereby and subjected to the burden and entitled to the benefit of the restrictions imposed by the scheme.[20]

44 This argument was firmly rejected by Hudson J in the following terms:

In my view, a purchaser of land under the Transfer of Land Act is not bound to prosecute inquiries and searches and make deductions such as would be involved if Mr Searby's contentions were accepted. Even when all the materials and evidence in relation to the circumstances under which an estate has been subdivided and sold are available it is not by any means easy to determine whether the sale of allotments in the estate has been made under or pursuant to a common building scheme. To require a person interested in purchasing one of those allotments to make this determination after obtaining the necessary evidence perhaps years after the original sale if it is available would render conveyancing a hazardous and cumbersome operation, and, in the case of dealings in land under the operation of the Transfer of Land Act, would defeat the object of the Act and destroy in large measure the efficacy of the system sought to be established thereby.

I have reached the conclusion that, even assuming there is power under the Act to notify as encumbrances on a certificate of title restrictions arising under a building scheme, such a notification will not be effective to bind transferees of the land unless not only the existence of the scheme and the nature of the restrictions imposed thereunder, but the lands affected by the scheme (both as to the benefit and the burden of the restriction) are indicated in the notification, either directly or by reference to some instrument or other document to which a person searching the register has access. In the present case these requirements are not satisfied. The covenants contained in the instrument of transfer notified as an encumbrance, though they certainly set out the restrictions, give no indication that they arose under a building scheme, nor of the land to which the benefit thereof was intended to be annexed, under such a scheme. The applicant, therefore, had no notice of the existence of the scheme or of the restrictions imposed thereby. She did have notice that the covenants contained in the instrument of transfer had been entered into by her predecessor in title but those covenants as she had no doubt been advised are no longer enforceable by any person and, therefore, she took her transfer free of the restrictions contained therein and is entitled to a declaration accordingly.[21]

45 It is apparent from the above passage from Re Dennerstein that, in order to bind a transferee of land registered under the Transfer of Land Act with a restrictive covenant arising under a scheme of development, it is necessary for the notification in the Register to give notice of:

(1) the existence of the scheme;

(2) the nature of the restrictive covenant; and

(3) the identity of the lands affected by the scheme, both as to the benefit and the burden of the restriction.

Further, it is necessary that this notice is given in the certificate of title, either directly or by reference to some instrument or other document to which a person searching the Register has access.

46 In this case, there is no issue that the plaintiffs were on notice of the nature of the restrictive covenant. The restrictive covenant is contained in the two instruments of transfer which are recorded as encumbrances on the certificate of title to the plaintiffs' land. However, the form of the restrictive covenant does not make any reference to the existence of a scheme of development or as to the lands affected by it. Notwithstanding this, it was submitted on behalf of the defendants that the plaintiffs had sufficient notice of a scheme and of the lands affected by it. It was submitted that there are numerous documents indicating the existence of a scheme available from a search of the Register, including: (1) the Robinson plan of subdivision; (2) the Robinson head title; (3) each title created out of the Robinson head title; and (4) the 56 transfers of land out of the Robinson head title, each containing an identical restrictive covenant. Further, reliance was placed upon other extrinsic evidence such as the joint advertisement for the sales of lots in the Robinson subdivision and Freer-Smith subdivision and the form of the contract of sale used by the common solicitor representing the owners of each subdivision. I do not accept these submissions. They are to the same effect as the submissions made in Re Dennerstein on behalf of the objectors, which were rejected. For the reasons stated in Re Dennerstein, they should be rejected here also.

47 In the alternative, it was submitted on behalf of the defendants that the decision in Re Dennerstein is wrong and I should decline to follow it. In this regard, reliance was placed upon some criticisms of Re Dennerstein by Gillard J in Fitt v Luxury Developments. In that case, the restrictive covenant was expressed to be in favour of the vendor and his assigns "of so much of the land described in [the head title] as is represented by the Lots on the said Plan of Subdivision other than the land hereby transferred and every part thereof."[22] Furthermore, in that case, the plan of subdivision contained a notation on each page in the following form:

All Lots on P/S8402 are Affected by a Building Scheme.[23]

48 In these circumstances, it was clear that the Register contained full notice of both the fact that a building scheme was asserted and of the lands affected thereby, being all of the lands comprised in the plan of subdivision. In these circumstances, it was unnecessary for Gillard J to decide whether he was bound to follow Re Dennerstein,[24] because the notice required by it had been given.

49 However, by way of obiter dicta, Gillard J expressed some disapproval of Re Dennerstein.[25] In my opinion, when analysed for their full effect, Gillard J's criticisms of Re Dennerstein do not assist the defendants in this case. This is because those criticisms are limited to the necessity for giving notice of the existence of a building scheme. On my reading, Gillard J's comments do not contain any criticism of the requirement stated in Re Dennerstein that notice must be given of the identity of the lands affected by the building scheme. Indeed, Gillard J reaffirmed the need to give notice of the lands affected. First, Gillard J expressed the view that "there is a strong argument that the decision [in Re Dennerstein] is wrong in respect to a requirement that information in the Register must establish the building scheme's existence."[26] Second, in respect of the requirement to identify the lands affected by a building scheme, Gillard J said: "I do not wish to make any observation in respect to that requirement."[27] Third, Gillard J expressed his conclusion in the following way:

In my view there is a very strong argument that the recording must make it clear that there is a restrictive covenant, identify the land to be benefitted and set out the restrictions and other questions concerning the basis upon which it is said to be valid and enforceable are matters for the Court and not required to be part of the information in the Register of Land.[28]

50 As I have said, the restrictive covenant affecting the plaintiffs' land does not contain any notice that the covenant is for the benefit of all of the owners of the land previously comprised in the Robinson subdivision. As a result, there is no notice of the lands affected by the building scheme contended for by the defendants. Accordingly, whether or not Gillard J's criticisms of the requirement to give notice of the existence of a scheme are correct, the plaintiffs are unaffected by the scheme relied upon by the defendants.

51 It follows that, even if a scheme had been established, the only persons entitled to the benefit of the restrictive covenant remain Mr and Mrs Smart and the owners of the lands previously comprised in Lots 311, 312, 340 and 342 in the Robinson subdivision. As stated above, this is because the restrictive covenant is annexed to the lands owned by them.

CONCLUSION

52 For the above reasons, I answer the preliminary questions as follows:

(1)(a) Yes.

(1)(b) Yes.

(2) Lindy Smart, Gregory Smart and the owners of the lands previously comprised in Lots 311, 312, 340 and 342 of plan of subdivision numbered LP6651.

53 I will hear the parties as to the appropriate form of orders, as to costs and as to the future conduct of the proceeding.

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[1] The Registrar of Titles gave notice that she would abide the outcome of the proceeding and played no further part in it.

[2] The power of the Registrar to record a restrictive covenant is contained in s. 88(1) of the Transfer of Land Act 1958 (Vic).

[3] [1962] VicRp 41; [1962] VR 274.

[4] Ibid 276 (citations omitted).

[5] Ibid 278.

[6] See, eg, Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261, 270.

[7] Re Miscamble's Application [1966] VicRp 81; [1966] VR 596, 600-1; Re Cooke [1964] VicRp 106; [1964] VR 808, 809; Re Robinson [1972] VicRp 28; [1972] VR 278, 279-80.

[8] Fitt v Luxury Developments Pty Ltd [2000] VSC 258, [249]-[54].

[9] [1908] 2 Ch 374.

[10] Ibid 384.

[11] Fitt v Luxury Developments Pty Ltd [2000] VSC 258, [146]-[48] (emphasis added).

[12] [1975] 2 NSWLR 623.

[13] Ibid 635.

[14] [1908] 2 Ch 374, 385.

[15] [1909] 2 Ch 305.

[16] Ibid 323.

[17] [1963] VicRp 93; [1963] VR 688.

[18] Ibid 689.

[19] Ibid 692-4.

[20] Ibid 696.

[21] Ibid 696-7.

[22] Fitt v Luxury Developments Pty Ltd [2000] VSC 258 [40].

[23] Ibid [29].

[24] Ibid [305].

[25] Ibid [305]-[30].

[26] Ibid [305] (emphasis added).

[27] Ibid [307].

[28] Ibid [330] (emphasis added).