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Covenants - Coggle Diagram

- - - - **The benefit of negative (restrictive) covenants may be enforced in equity. YOU CANNOT ENFORCE A POSITIVE COVENANT IN EQUITY.
        The benefit of the covenant will run with the dominant land and be enforceable by successors in title if: **
        
        Benefit of positive covenants cannot be enforced in equity
        
        1. The covenant touches and concerns the benefitted land
        
        2. The benefit has passed to the successor by:
        
        A. Annexation: now deemed to transfer unless contrary intention expressed: PLA s 301
        ○ Annexation: simply looking to see whether benefit attached to property rather than individuals in agreement.
        
        B. Assignment: where the covenant has been transferred to someone else ○ Rare, for noting only
        
        C. Building or development scheme: Where number of parties have common intention Subdividing and creating a community on land. Everyone who purchases a lot needs to sign a scheme of mutual covenants.
        ○ Rare, for noting only
    - - The benefit of positive and negative covenants may be enforced at common law; the benefit of the covenant will run with the dominant land PLA 2007 s301(1) and be enforceable by successors in title if:
        
        1. The covenant touches and concerns the benefitted land
        
        The covenant must affect the nature, qualify, mode of user or value of the land P&A Swift Investments - .e., the covenant must be genuinely related to the land ● It cannot be personal
        
        2. The covenantee has a legal estate in the land
        
        Covenants intending to expire after a party sells their property needs to be specifically drafted to only bind parties to agreement.
        
        deemed intention
  - - - The burden of negative covenants may be enforced in equity
        
        The covenant touches and concerns the benefitted land
        
        Notice has been given s 307 PLA 2007
        ● If noted on title at time covenantor buys land, notice will be deemed. If not can prove in other ways.
      - YOU CANNOT ENFORCE A POSITIVE COVENANT IN EQUITY: Haywood v Brunswick Permanent Benefit Building Society
    - - Negative and posiitve covenants and covenants in gross may be noted on title, so passing the burden and allowing enforcement at statute against successors in title s 303 PLA 2007 if:
        
        1. The covenant relates to the burdened land
        
        2. The covenant touches and concerns the benefitted land
        ● The covenant must affect the nature, qualify, mode of user or value of the land P&A Swift Investments
        ● It cannot be personal
        
        3. There is no privity of estate
        
        Notice has been given: s 307 PLA 2007
        ● Note of covenant on register/title is deemed notice to all the world
        ○ The covenant is then an interest in land, and the RO holds their estate subject to that interest: s 52(1)(b) LTA 2017
        ● It is inequitable to ignore a covenant which you have notice of: Tulk v Moxhay
        
        Section 303 PLA applies to:
        • Negative covenants (from 01/01/1953)
        • Positive covenants (from 01/01/1987)
        • Covenants in gross (from 12/11/2018)
        
        You can contract out of this if you express a contrary intention
        ● Must appear in written agreement in which covenant is expressed or implied.
  - - - A covenant in gross requires the person making a promise to do/refrain from doing something in relation to their land: s 307A unless a contrary intention is expressed.
      - • Key idea: Burdened land with no benefitting land, but a benefitting person.
      - Still requires relationship to land (‘touches and concerns’ test) – it can’t be any random/personal obligation.
- - - - Application: Need to take the covenant in the environment in which it was intended to apply commercial project of a residential subdivision – to market and sell properties
        Obiter comments in Green Growth No. 2 favour the approach in Westfield Management Ltd (HCA)
        The extrinsic evidence on interpretation of a covenant is limited to what someone with access to documents on the register, and can as a third-party, read from the land and its context
        Registered documents should be construed without regard to extrinsic evidence not apparent on the face of the register
        But will not exclude reference to facts a reasonable future reader of the document could be expected to be aware of and would recognise as relevant and which they have access to
- - - - A covenant limiting owners of burdened land from erecting a building exceeding 1 storey with a maximum height of 25 feet gives ‘dual protection’ – both elements are important - no modification (argued that the purpose of the covenant was view protection, should be able to build 2 storeys under 25 feet): Jansen v Mansor (prior to 2017)
    - - Stonehill v Jackson (AU) emphasises public policy basis for intervention: the court found it could modify a covenant preventing the building of more than one house on land (allowed two, not five) because there had been a fundamental change in society and the nature of demand for housing since the covenant was agreed in 1929.
        ○ Balances property rights of benefitting owners and public policy arguments supporting modification/extinguishment
      - The breadth of the court’s s 317 discretion is yet to be determined: New Zealand Industrial Park v Stonehill is currently before the Supreme Court:
        ○ CA declined to modify covenants protecting the ability to operate a quarry on benefitting land for 200 years.
        ○ “While there has been a progressive broadening of the statutory power granted to the courts, s 317 of the Act still cannot be used to free a servient tenement owner from an easement or covenant simply to improve the enjoyment of his or her property for his or her private purposes. The courts are reluctant to allow contractual property rights to be swept aside in the absence of strong reasons”