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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Clause 2 provides for the commencement of the proposed Act on a day or
days to be appointed by proclamation.
Clause 3 is a formal provision giving effect to the amendments to the Real
Property Act 1900 set out in Schedule 1.
Schedule 1 Amendments
Extinguishment of restrictive covenants
A restrictive covenant is an express or implied obligation, originating in an
instrument, to refrain from using land in a particular way or to refrain from
doing a particular thing on or in relation to land.
Schedule 1 amends the Real Property Act 1900 to empower the
Registrar-General to extinguish certain restrictive covenants, including
restrictive covenants that are no longer of any practical application or value.
The amendments create a procedure, including court action, to protect the
interests of those with the benefit of a restrictive covenant.
Schedule 1 [21] inserts a new Part 8A in the Real Property Act 1900. The
provisions of that Part are as follows:
Part 8A Extinguishment of restrictive covenants
Division 1 Preliminary
Proposed section 81 defines terms used in the proposed Part, including
building materials covenant, fencing covenant and value of structures
covenant, the three types of restrictive covenants in relation to which an
application for extinguishment can be made.
Division 2 Applications to have restrictive covenants
extinguished
Proposed section 81A provides that a person who is the registered proprietor
of land that is subject to the burden of a building materials covenant. fencing
covenant or value of structures covenant, that has been in effect for 12 years
or more, can apply to the Registrar-General for the extinguishment of the
restrictive covenant.
Explanatory note page 2
Proposed section 81B empowers the Registrar-General to ask for further
information to support an application.
Proposed section 81C empowers the Registrar-General to reject an
application for extinguishment without going through all the procedures in
proposed Part 8A if, in the opinion of the Registrar-General, the relevant
restrictive covenant is not a building covenant, fencing covenant or value of
structures covenant or is less than 12 years old.
Division 3 Right to be notified of proposed extinguishment of
restrictive covenant
Proposed section 81D sets out the persons who have a right to receive written
notice of any application to extinguish a restrictive covenant. These include
every person who has a registered or equitable interest in the land benefited
by the restrictive covenant and every person who has the right to release,
vary or modify the restrictive covenant or to consent to such release,
variation or modification.
Proposed section 81E sets out the form of notice that must be given to those
interested persons, informing them of the making of an application for
extinguishment of the restrictive covenant by another person. That notice
must inform the interested person of the person's right to object to the
proposed extinguishment, by lodging a caveat against the grant of the
application within a specified time.
Proposed section 81F sets out the minimum time to be allowed for such a
person to lodge a caveat, that is, the time during which the application will
not be determined.
Proposed section 81G sets out the way in which a notice of an application is
to be served. Generally, service is to be in person or by registered post, but
the Registrar-General may give notice by way of a newspaper advertisement
if certain conditions are satisfied.
Proposed section 81H allows the Registrar-General to direct the person who
made the application for extinguishment to meet the obligations relating to
the giving of notice that the proposed Division imposes on the
Registrar-General. The Registrar-General may reject the person's application
if the person does not notify all interested persons in the appropriate way.
Division 4
Extinguishment of restrictive covenants
Proposed section 81I sets out the circumstances in which the application may
be granted. namely, if the application was properly made, appropriate notice
was given and no caveat was lodged within the required time.
Explanatory note page 3
Proposed section 81J provides that the Registrar-General may extinguish a
restrictive covenant without receiving an application if the restrictive
covenant is of no practical value or practical application or in other specified
circumstances.
Proposed section 81K provides for the Registrar-General to cancel the
recording in the Register of any restrictive covenant that he or she has
decided to extinguish. A restrictive covenant is taken to have been
extinguished when that recording is cancelled.
Proposed section 81L provides that if a restrictive covenant is extinguished it
is not enforceable.
Caveats against extinguishment of restrictive covenants
Provisions are also inserted in the Real Property Act 1900 to enable a person
to lodge a caveat prohibiting the extinguishment of a restrictive covenant if
the person has a registered interest, or claims to be entitled to any equitable
estate or interest, in land benefited by the restrictive covenant or has a right to
release, vary or modify the restrictive covenant or to consent to that release,
variation or modification.
The proposed amendments will result in an application for the
extinguishment of a restrictive covenant being dealt with in a similar way to
other types of applications, such as primary applications, possessory
applications and applications for the cancellation of easements, that are
publicised before being granted and the grant of which can be prevented by
the lodgment of caveats.
Schedule 1 [2] provides for the lodgment of caveats prohibiting the
Registrar-General from granting an application to extinguish a restrictive
covenant.
Schedule 1 [4] requires the Registrar-General to notify any person who has
made an application for the extinguishment of a restrictive covenant that a
caveat has been lodged against the extinguishment of the covenant.
Schedule 1 [5][11] specify that the effect of a caveat lodged under proposed
section 74F (4B) is that the Registrar-General cannot extinguish any
restrictive covenant to which the caveat relates.
Schedule 1 [13] deals with the lapsing of caveats on the application of the
person who made the original application for the extinguishment of the
restrictive covenant.
Explanatory note page 4
Schedule 1 [14] and [15] make consequential amendments to the provision
of the Act that empowers the Supreme Court to extend the operation of a
caveat if the Court is satisfied that the caveator has a claim that has
substance.
Schedule 1 [16] makes a consequential amendment to the provision that sets
out the circumstances in which a caveat is taken to be withdrawn.
Schedule 1 [17][19] make consequential amendments to the provision that
sets out the circumstances in which the Act restricts the lodgment of further
caveats by the same caveator.
Schedule 1 [20] makes it clear that a caveator retains the right to apply to the
Supreme Court for an injunction for the purposes of restraining the granting
of an application to extinguish a restrictive covenant.
Schedule 1 [1], [3], [9] and [12] make other consequential amendments.
Barring of actions relating to extinguishment of restrictive
covenants
Schedule 1 [22] provides that no action can be brought against the
Registrar-General in relation to any loss arising from the extinguishment of a
restrictive covenant if the person alleging the loss was notified, or was
otherwise aware, that an application for the extinguishment of the restrictive
covenant had been made and the person did not lodge a caveat in the
appropriate time. or allowed the caveat to lapse.
Savings and transitional regulation-making power
Schedule 1 [23] inserts a power to make savings and transitional regulations
consequent on the enactment of the proposed Act.
Explanatory note page 5