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High Court of Australia |
PIRIE v. REGISTRAR-GENERAL [1962] HCA 58; (1962) 109 CLR 619
Conveyancing (N.S.W.)
High Court of Australia
Kitto(1), Taylor(2), Menzies(3), Windeyer(4) and Owen(5) JJ.
CATCHWORDS
Conveyancing (N.S.W.) - Restrictive covenant - Notification on certificate of title in 1919 - Restriction not expressed to ensure for benefit of any land - Application to Registrar-General to cancel notification - Refusal - Application to Supreme Court - Duty of Registrar-General - Effect of deeming provision in s. 88 (3) (a) of the Conveyancing Act, 1919-1954 (N.S.W.) - Real Property Act, 1900-1956 (N.S.W.), ss. 42, 43, 121 - Conveyancing Act, 1919 (N.S.W.), ss. 88, 89 - Conveyancing Act, 1919-1954 (N.S.W.), ss. 88, 89.
HEARING
Sydney, 1962, August 3, 7; November 30. 30:11:1962DECISION
November 30.2. The situation in which the appellants made their application to the Court was as follows. The appellants, being the registered proprietors as tenants in common in equal shares of an estate in fee simple in certain land under the Act, namely lot 181 on a certain deposited plan, No. 5275, had applied in writing to the Registrar-General for the cancellation of a notification, appearing on their certificate of title, of the terms of a restrictive convenant. The covenant was contained in a memorandum of transfer of the lots, which had been made in 1919 by one Halloran in favour of two persons named Maclure and Horton. The notification was entered in 1919 on the two certificates of title of lot 181 issued to Maclure and Horton respectively in that year. A new certificate of title was issued in respect of the lot in 1946 in consequence of transfers that had taken place, and the notification was carried onto the new certificate. It is under that certificate that the appellants are now the registered proprietors. (at p623)
3. The Registrar-General refused to cancel the notification, and he stated in the following terms the ground of his refusal: "The notification relates to restrictions arising under covenant as to the user of the land comprised in the said Certificate of Title within the meaning of s. 88(3) of the Conveyancing Act, 1919, as amended, and I am not satisfied that such restrictions have ceased to affect the said land". (at p623)
4. 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.) [1934] HCA 29; (1934) 51 CLR 300 . 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 RegistrarGeneral's stated ground of refusal amounted to, and whether it should have been upheld. Jacobs J. himself thought it was illfounded. (at p624)
5. The Registrar-General's statement that he was not satisfied that the restrictions of the covenant had ceased to affect the land - the reference is to s. 32(3) of the Real Property Act - may be put on one side. The appellants had not suggested that the restrictions had ceased to affect the land. They had stated as their only ground that "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". They were thus contending that the covenant never had bound the land, and that that fact took it out of any provision which otherwise might have authorized the Registrar-General to allow a notification of it to stand on the register. Accordingly the issue raised by the RegistrarGeneral's reliance upon s. 88(3) of the Conveyancing Act was simply whether the covenant created such a restriction as that provision permits to be upon the register. (at p625)
6. The memorandum of transfer which contained the covenant related to one only of a large number of lots into which Halloran had subdivided an area of some 211 acres. The covenant was expressed to be made with Halloran, "his heirs executors administrators and assigns". It was a covenant by the transferees, Maclure and Horton, and each of them, for themselves, their respective heirs, executors, administrators and assigns, to the intent (as it said) that it should be binding on them and each of them and upon their respective assigns and on the land and on all successive owners, occupiers and tenants thereof. There was no expression of intention that the benefit of the covenant should be annexed to any land. The covenant itself was not expressed as intended to enure or be for the benefit of any land, or to be made with Halloran in the capacity of owner of any land; indeed, save in the description of the land transferred as being a lot on a deposited plan, there was no reference to any other land, nor was there anything to suggest that there was in existence a building scheme under which restrictions in respect of individual lots should enure for the benefit of other lots. (at p625)
7. The substance of the covenant was contained in four sub-clauses, the first two negative in import and the last two positive. Sub-clause (a) stipulated that all main buildings thereafter erected on the land should be detached or semi-detached, that each main building should cost and be of the value of 250 pounds at the least, and that not more than one main building should be erected on the land. Sub-clause (b) stipulated that the land or any building to be erected on it should not be used for the purposes of a hotel, factory or store or for the sale or hire of goods or for any other purposes than those of a dwelling or boarding house. Sub-clause (c) required that the land be enclosed with a substantial fence within a year after commencement of any building operation. And sub-cl. (d) required that each main building should be to a complete design, and that one such building should be completed within a year after commencement of building operations on the land. (at p626)
8. Section 88(3) of the Conveyancing Act falls into four parts. It begins by making s. 88 as a whole apply to land under the Real Property Act, and then adds, with respect to land under that Act, provisions which it divides into three paragraphs. Paragraph (a) contains the provision which is of chief importance in this case: it is that 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. Paragraph (b) provides that a notification in the register book of any such restriction shall not give the restriction any further operation than it has under the instrument creating it. (Presumably this means that the making of the notification on the certificate of title shall not provide a ground of validity or enforceability for a restriction which otherwise is invalid or unenforceable: the provision is concerned only with the operation of the restriction itself, and not, I should suppose, with the question whether a particular person in particular circumstances is subject to its operation.) Finally, par.(c) provides that every such restriction notified on the appropriate folium of the register book shall be an interest within the meaning of s. 42 of the Real Property Act - that being the provision by which a registered proprietor holds (except in case of fraud) subject to such encumbrances, liens, estates or interests as are notified on the folium, but absolutely free from all others (with specified exceptions). (at p626)
9. It is obvious that neither sub-cl. (c) nor the second portion of sub-cl. (d) of the covenant in the present case purports to impose a restriction, in any sense of the word: each is positive in its obligation, requiring, both in form and in substance, the doing upon the land of acts involving expenditure of money. The Registrar-General's inclusion of these portions of the covenant in his notification, therefore, not only was unauthorized in 1919 but is plainly unsupported by the retrospective validation contained in s. 88(3): cf. Cator v. Newton (1940) 1 KB 415 . On the other hand, the ex facie operation of sub-cll. (a) and (b) and the first portion of sub-cl. (d) is undoubtedly to impose restrictions upon the user of lot 181; and the enforceability of the restrictions, if they are enforceable, is unaffected by the presence of the positive portions of the covenant: cf. Collins v. Castle (1887) 36 Ch D 243 . The questions to be considered under s. 88(3), therefore, arise in relation to the restrictive portions of the covenant. There are, logically, two questions: first, whether the material that was adduced before Jacobs J. established that at the time the notification was entered the appellant's land was subject to the burden of the restrictions; and, secondly, if so, whether the restrictions nevertheless fall outside the operation of s. 88(3) because of an implied limitation upon the word "restriction" in that provision. (at p627)
10. 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 convenantor'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 (1848) 2 Ph 774 (41 ER 1143) . 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 (1906) 1 Ch 386 ; 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 [1914] HCA 79; (1914) 19 CLR 197 ; Great West Permanent Loan Co. v. Friesen (1925) AC 208 ; Abigail v. Lapin (1934) AC 491, at p 500; (1934) 51 CLR 58, at pp 64, 65 , 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 (1906) 1 Ch 386 by making notice immaterial. (at p628)
11. But it is basic to the doctrine of Tulk v. Moxhay (1848) 2 Ph 774 (41 ER 1143) that it applies only to a restriction created to preserve the value of other land, and that the restriction is not enforceable against derivative owners except for the protection of that other land. A familiar line of cases, of which it will suffice to mention London County Council v. Allen (1914) 3 KB 642 ; Chambers v. Randall (1923) 1 Ch 149 ; Miles v. Easter (1933) Ch 611 and Zetland (Marquess) v. Driver (1939) Ch 1, at p 10 shows that a restriction will be no longer enforceable against an owner of the subject land (other than the covenantor) once the person entitled to the benefit of the covenant has become a stranger in title to the land benefited. Accordingly a restriction cannot burden the land to the use of which it relates unless either (a) it is so created that the benefit of it is annexed to other land - conferred so as to amount to an added incident of the title and accordingly to pass upon and by virtue of a transfer without any need of specific assignment: Rogers v. Hosegood (1900) 2 Ch 388, at p 407 - or (b) it is made by the terms of its creation susceptible of assignment to a purchaser upon a sale of that other land. Annexation of the benefit to other land may be produced in either of two ways: by the use of appropriate language in the instrument creating the restriction, or by the circumstance that the covenant was imposed on a disposition of the subject land as one of the lots covered by a common building scheme in which restrictions have been placed on all lots for their mutual advantage. (at p628)
12. 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 (1908) 2 Ch 374, at p 384, 665 ; Reid v. Bickerstaff (1909) 2 Ch 305 and Kelly v. Barrett (1924) 2 Ch 379, at p 401 ). 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 (1933) Ch 611, at p 625 . 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. (1952) Ch 286 . Learned writers on the subject have supported the opinion of Bennett J.: See Sir Lancelot Elphinstone's article (1952) 68 LQR 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 [1905] HCA 35; (1905) 3 CLR 96 . (at p629)
13. 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 (1958) Ch 280 , 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 (1908) 2 Ch 374, at p 384, 665 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. (at p631)
14. To my mind it is of first-rate importance to realize that s. 88(3) makes an inroad upon the fundamental doctrine of the Torrens system, that if you take a registered title and yourself become registered your title is free not only (by force of s.42) from encumbrances, liens, estates and interests not notified on the certificate of title (other than equitable interests which arise after your registration) but also (by force of s. 43) from all such unregistered interests to which the land was subject in the hands of your predecessor as you would have been free from if you had had no notice of their existence. A provision departing from the policy of the system at so cardinal a point, by giving the Registrar-General a discretionary power to detract from the indefeasibility of a registered title, ought to be construed with the utmost strictness. (at p632)
15. Perhaps it was because of some such considerations as these that the draftsman of the New Zealand Property Law Act, 1952, when adapting the New South Wales s. 88(3) for enactment as s. 126 of his own statute, expressly limited the application of the provision to the case of a restriction the benefit of which is intended to be annexed to other land. By contrast, the provision now contained in s. 88(1) of the Victorian Transfer of Land Act 1958, first introduced in 1954, enables all restrictive covenants to be noted on the register. But the history of the matter has been different there; it has been much influenced by the presence in the Land Transfer Act of a definition of "encumbrance" which has always been taken to include restrictive covenants: see the discussion of the subject by Sholl J. in Re Arcade Hotel Pty. Ltd. (1962) VR 274, at pp 280 et seq . It seems to me that the limiting words in the New Zealand section, though not appearing in s. 88(3), are implied in that provision by reason of the context and the nature of the subject matter. (at p632)
16. In my opinion, therefore, the Registrar-General has not substantiated and upheld the grounds of his refusal. The question then arises whether an order should be made for the removal of the notification. It would not be right to make such an order unless we were satisfied that, s. 88(3) of the Conveyancing Act being put on one side, no provision exists which could justify the retention of the notification on the register. The Registrar-General has placed a degree of reliance upon s. 88(8) of the Conveyancing Act, 1919, as originally enacted. This provision required the Registrar-General, upon a restriction being discharged or modified by the order of the Court, to make, upon application, all necessary amendments and entries in the register book for giving effect to the order in respect of all certificates of title specified therein. We are invited by the Registrar-General to treat this provision as providing legislative support for such notifications as that which is in question here. It is to be noticed that what is referred to is "the register book" generally. The expression includes every registered instrument (s. 36(4)), and not merely the folium constituted by the relevant certificate of title. A restrictive covenant may well be found in a registered instrument, particularly in a memorandum of transfer, and it is also possible that a restriction created by an unregistered instrument, such as a contract of sale, may be recorded or referred to in or on a registered instrument. It would not be sound, in my opinion, to infer from s. 88(8) an intention to take away, as by a side wind, the prima facie right of a registered proprietor, a right which indeed goes to the root of the Torrens system, to insist upon his certificate of title being kept free of notifications for which statutory authority is wanting. (at p633)
17. There is still another provision to be borne in mind. In 1938, an amending Act (No. 30 of 1938) introduced into s. 12 of the Real Property Act a new par. (f), which empowers the Registrar-General, if he thinks fit, to enter a notification in the register book or a caveat for the protection of any person interested in the land. The paragraph goes on, following the example of s. 88(3) of the Conveyancing Act, to provide that where any such notification is so entered the entry shall not give the interest any greater operation or effect than it would otherwise have, and that the interest notified shall be deemed to be an interest within the meaning of s. 42. The extent of the power to enter notifications under s. 12(f) may be a matter for future decision. The reasons I have given for a strict construction of s. 88(3) of the Conveyancing Act would seem to apply a fortiori, but we have heard no argument on the point and it will not arise for decision in relation to this case unless the Registrar-General enters a notification in exercise of the power. (at p633)
18. In the proceedings that have taken place there has been no opportunity for persons to be heard who may be interested in the retention of the existing notification on the certificate of title, and for that reason it seems inappropriate to do more at present than declare that the Registrar-General has not substantiated and upheld the grounds of his refusal to cancel the notification. (at p633)
19. Agreeing with Jacobs J. on the substantive question in the case, and disagreeing with him on the procedural question only, I am of opinion that the appeal should be allowed, the declaration made, and the matter remitted to the Supreme Court for any further proceedings that may be necessary. (at p633)
TAYLOR J. Upon the arguments presented to us upon this appeal the first matter for consideration is whether the covenant contained in the transfer of 27th November 1919 imposed upon the subject land the "burden of a restriction" within the meaning of s. 88(3) of the Conveyancing Act, 1919-1954. The appellants maintain that it did not and contend that the only restrictions to which sub-s. (3) applies are those which answer the description contained in sub-s. (1), that is to say, "a restriction arising under covenant or otherwise as to the user of any land the benefit of which is intended to be annexed to other land". I would not wish to deny the latter proposition but, for reasons which will appear, I do not assent to either of the further propositions that sub-s. (3) has no application to covenants other than those created in accordance with sub-s. (1), or, that sub-s. (3) has no application to a restrictive covenant unless it appears from the terms of the covenant itself that the benefit of the restriction was intended to be annexed to other identified or identifiable land. (at p634)
2. 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 (1933) 1 Ch 611 and Upjohn J. in Newton Abbot Co-operative Society Ltd. v. Williamson & Treadgold Ltd. (1952) 1 Ch 286 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.". (at p635)
3. As I have already said s. 89(1) of the Conveyancing Act, 1919 applied only to covenants contained in instruments coming into operation after 1st July 1920. Likewise, s. 88(1) which was substituted in the principal Act by the Conveyancing (Amendment) Act, 1930, applies only to covenants contained in instruments coming into operation after the commencement of the amending Act. It appears, therefore, that the binding force of restrictions upon the use of land created by covenants contained in instruments coming into operation prior to 1st July 1920 fell to be determined according to the general law. In the period which elapsed after that date and prior to the Conveyancing (Amendment) Act, 1930 the conditions to be observed in the creation of such restrictions by covenants coming into operation during that period fell to be determined according to the Conveyancing Act, 1919 and, finally, those contained in instruments coming into operation after the commencement of the amending Act of 1930 are governed by s. 88(1). (at p635)
4. As already appears the covenant in question in these proceedings was given prior to the commencement of the Conveyancing Act, 1919 and it remains unaffected by the subsequent legislation. But whether, apart from any special considerations arising out of the fact that the subject land was under the provisions of the Real Property Act, it would have bound the subject land originally is another question. On its face it does not purport to bind the land but the circumstances disclosed by the evidence tend to suggest that it may have found its origin in a common building scheme. But the evidence does no more than suggest that this may have been so and, accordingly, it is impossible in these proceedings to say whether, apart from the provisions of the Real Property Act, the land would or would not have been bound. (at p636)
5. From time to time there has been considerable professional discussion as to how far, if at all, purchasers of land under the provisions of the Real Property Act are affected by notice of the existence of covenants restrictive of the use of their land (see e.g. (1953) 27 ALJ 367) It is unnecessary to trace the course of this controversy but it is important to observe that for many years the Registrar-General has followed the practice of entering notifications of such covenants upon the register in spite of the fact that until the commencement of the Conveyancing (Amendment) Act, 1930 no legislation existed in New South Wales which made provision for or authorized the entry of such notifications. Nevertheless, s. 89(8) of the Conveyancing Act, 1919 had contained provisions which required the Registrar-General, upon the prescribed application being made, to "make all necessary amendments and entries in the register book for giving effect" to any order made under the section which had the effect of wholly or partially discharging or modifying existing restrictions and, no doubt, pursuant to the practice mentioned, the register book contained many notifications of restrictions created by covenants prior to 1st July 1920. (at p636)
6. 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. (at p637)
7. 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 (1908) 2 Ch 374 ). 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. (at p638)
8. As already appears, notwithstanding the fact that no statutory authority existed prior to 1930 for the making of such notifications some acknowledgment of the long-established practice of the Registrar-General was to be found in the Conveyancing Act, 1919. Section 88 of that Act applied to land under the provisions of the Real Property Act and it contained provisions authorizing the Court, in specified circumstances, to discharge or modify restrictions imposed by such covenants and by sub-s. (8) thereof the Registrar-General was directed to make all necessary amendments and entries in the register book for giving effect to any order by way of discharge or modification by the making of appropriate entries in the register book. Sub-section (3) of the present s. 88 is, I think, a provision which was plainly intended to authorize both retrospectively and for the future the practice which had for so long been observed by the Registrar-General in so far as that practice was concerned with the notification of restrictions which constituted a burden on the subject land and I can see no reason why its quite general language should be given such a limited construction as that contended for by the appellants. (at p638)
9. 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 (1867) 6 SCR (NSW) 188 , 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. (at p639)
MENZIES J. The question of substance which it is necessary to decide in determining this appeal is whether the power of the Registrar-General conferred by s. 88 (3) of the Conveyancing Act (N.S.W.) did not extend to the entry in the folium of the register book relating to land of which the appellants are the registered proprietors of the notification of a restriction as to the user of that land, which arose under a covenant in a transfer dated 27th November 1919 whereby the transferees covenanted "for ourselves our respective heirs executors administrators and assigns" with the transferor "his heirs executors administrators and assigns", to the intent that the covenant should be binding upon the transferees "and on our respective assigns and on the land and on all successive owners occupiers and tenants thereof". The appellants are successors in title of the transferes who so covenanted and they sought the removal of the notification upon the ground that it should not have been made because the covenant did not describe the land that it was intended to benefit. (at p640)
2. Jacobs J. held that the entry of the notification was not authorized because the power conferred by sub-s. (3) was limited to restrictions of the sort specified in s. 88(1) and the restrictive covenant in question fell outside that category because the covenant contained no description of the land intended to be benefited. Although in considering the correctness of the limitation which the learned judge put upon the power of the Registrar-General it is necessary to examine critically the text of s. 88 as a whole, it is sufficient at this stage to indicate shortly the general effect of the various provisions contained in the section that are directly relevant to the question under consideration. (at p640)
3. Sub-section (1) limits the enforceability of any restriction arising under covenants or otherwise as to the user of any land, the benefit of which is intended to be annexed to other land, contained in an instrument coming into operation after the commencement of the Conveyancing Act, 1930 (i.e. 1st January 1931), to persons party to the creation of the restriction unless the instrument indicates (a) the land to which the restriction is appurtenant; (b) the subject land; (c) the persons (if any) given the right to release or modify the restriction; and (d) the persons (if any) whose consent to any release or modification of the restriction is stipulated for. Sub-section (3) applies the provisions of sub-s. (1) to land under the Real Property Act and provides in respect of such land that 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 land subject to the burden of the restriction a notification of the restriction and of any modification thereof ((3) (a)); that "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" ((3)(b)); and that "every such restriction notified on the appropriate folium of the register book shall be an interest within the meaning of" the Real Property Act ((3) (c)). (at p640)
4. It is to be observed - and this seems to me to be one of the sources of the difficulty which has arisen - that s. 88(3) is concerned with two separate things: in the first place, it restricts the enforceability of specified restrictions (that is, those to which s. 88(1) relates); secondly, it authorizes the Registrar-General to enter notifications of restrictions without express limitation beyond requiring that the land in respect of which the notification is entered must be subject to the burden of the restriction notified. It could hardly have been intended that the restrictions of which notification may be entered pursuant to s. 88(3) are the restrictions the enforceability of which is actually limited by s. 88(1) to persons party to their creation, for it would, I think, be a strange application of the Torrens System to construe s. 88(3) as authorizing the notification of a restriction because it has been reduced from a restriction binding successors in title to land to a restriction binding only parties to its creation. The two provisions do not operate upon the same restrictions. It would be a construction less open to objection to confine sub-s. (3)(a) to restrictions the enforceability of which is not limited by sub-s. (1) because, being restrictions of the character there described, the instruments indicate what (a), (b), (c) and (d) (supra) require. For my part, however, I find no compelling reason for transferring into an enabling provision the description or any part of the description of a restriction taken from a provision with an entirely different operation when the enabling provision itself describes the restrictions to which it does relate (that is, restrictions burdening the land in question). (at p641)
5. It appears to me that ordinary principles of statutory construction are of themselves a sufficient answer to the contention that the language of sub-s. (3)(a) should be limited by such an implication, but the answer here does not depend merely upon general principles. In addition, there is the circumstance that sub-s. (3) confers power upon the Registrar-General retrospectively to 1863 whereas sub-s. (1) is confined to covenants contained in instruments coming into operation after 1st January 1931. For the period between 1919 and 1931 the section replaced by s. 88(1) (that is, Conveyancing Act, 1919, s. 89) simply provided that no purchaser of land, including land under the Real Property Act, should be affected by any covenants restrictive of the use of land contained in an instrument coming into operation after 1st July 1920 unless certain conditions were specified. Once it is appreciated that it is one power to enter notifications which has been given to the Registrar-General over the whole period since 1863, that before 1919 the enforceability of restrictions was not limited by statute and that thereafter there were differences before and after 1931 in the description of the restrictions the enforceability of which was limited by statute, it becomes highly artificial to attempt to define the power which the Registrar-General has had since 1863 by reference to a description or any part of a description of restrictions which in replacement of an earlier description came into existence for a different purpose in 1931. (at p642)
6. 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 [1921] HCA 57; (1921) 30 CLR 80 . 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. (at p643)
7. Rejecting, therefore, the implication from s. 88(1) that s. 88(3)(a) has a meaning narrower than its language warrants, I consider that the authority which it has given the Registrar-General is to enter notification of a restriction created by an instrument and burdening specified land. The question whether an entry was authorized is to be determined by finding out whether it notified a restriction arising under an instrument of a particular date which was in all the circumstances effective to subject the land to the burden of the restriction. It follows, of course, that the provisions of the Conveyancing Act, 1919, s. 89, and those of s. 88(1) are important in determining this question in respect of restrictions created by instruments coming into operation after 1st July 1920 but, as I have already pointed out, the restriction now under consideration arose under a covenant in a provision dated 27th November 1919. Accordingly the question here whether the land was subject to the burden of the restriction so created is in my opinion to be answered without reference to the foregoing sections but by applying the law as it stood on that date to the instrument and the circumstances in which it was made. (at p643)
8. 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. (at p644)
9. I would dismiss the appeal. (at p644)
WINDEYER J. 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. (at p645)
2. I go therefore to the substantial question, the effect of s. 88(3) of the Conveyancing Act, 1919-1954. It is an important question, because it is said to affect very many certificates of title on which notifications of restrictive covenants had been entered before 1930. For very many years before 1930, it was the practice of the Registrar-General to place notifications of restrictive covenants in the register book. The validity of this practice was at least doubtful and from time to time it was questioned. But s. 88(8) of the Conveyancing Act, 1919, which enabled the Court to modify or discharge the restriction arising under a covenant, was expressly made to apply to land under the Real Property Act and the Registrar-General was directed to make, on application, all necessary amendments and entries on the register book for giving effect to any such order made by the Court: s. 88(3). This provision thus recognized the well-known fact that there were then entries of restrictive covenants on the register book; and it contains no hint that any such entries had been improperly made or ought not to be there. Section 89 of the same Act provided that purchasers of land should not be affected by any covenant restrictive of the use of the land contained in any instruments coming into operation after 1st July 1920 unless the instrument clearly defined (a) the land to which the benefit of the covenant was intended to be appurtenant, (b) the land subject to the burden, (c) the persons, if any, by whom or with whose consent the covenant might be released, varied or modified. (at p646)
3. These sections 88 and 89 of the Conveyancing Act, 1919 were in 1930 repealed and replaced by new provisions, respectively ss. 89 and 88. (at p646)
4. It is on the construction of s. 88 and especially sub-s. (3) of that Act that this case turns. I need not set it out. For the purposes of the Real Property Act it now matters not, I think, whether those restrictions that by sub-s. (3) the Registrar-General is given power to note on the title, and those too which he is deemed to have had power to note are, apart from the Act, the creatures of equity. Once notified on the register book they are interests within the meaning of s. 42 of the Act. But this does not mean that every notification of a restriction appearing on the register was properly put there or should be left there. Paragraphs (b) and (c) of sub-s. (3) apply only to any "such restrictions". The key words are in par. (a), "land subject to the burden of a restriction". It is only on a certificate of title of such land that a restriction can be noted. There is, I think, no doubt that no restriction that is contained in an instrument coming into operation after 1st January 1931 can be noted in the register book, unless the instrument complies with the requirements of s. 88(1). For after that date only by such an instrument could land be made subject to the burden of a restriction. (at p646)
5. The question here arises, however, because the Registrar-General is deemed always to have had power to enter upon the folium of the register book "relating to the land subject to the burden of a restriction, a notification of the restriction". I entertain no doubt that "the restriction" that is there referred to is a restriction of the kind that s. 88 as a whole is dealing with. That is to say it is, in the words of sub-s. (1), "a restriction arising under covenant or otherwise as to the user of any land the benefit of which is intended to be annexed to other land". Such restrictions are of the kind that have sometimes been called equitable easements or quasieasements. It is not without significance that s. 88(1) links easements and restrictive covenants. There was, of course, no need to refer to easements in s. 88(3) for the Real Property Act already provided for their appearance on the register book. Therefore, as I read the enactment, the Registrar-General is deemed to have had power to note only a restriction having two attributes. First, it must be a restriction as to the user of land, the benefit of which was intended to be annexed to other land; and secondly, at the time the notification was entered on the register the land to which the entry related must have been in fact subject to the burden of the restriction. That, I think, must mean subject, according to the rules of law and equity apart from the Real Property Act. Section 88(3) is thus a validating provision so far as notifications made in the past were concerned, but it validates them only when the land was in fact subject to the burden of the restriction. (at p647)
6. 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. (at p 648)
OWEN J. I agree with the reasons of Kitto J. which I have had the opportunity of reading. (at p648)
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.
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