Insights Library
Supreme Court confirms: a covenant’s benefit must be easily ascertainable
The Supreme Court of Victoria has reaffirmed that the benefit of a restrictive covenant will not run with the land unless the benefiting land is easily ascertainable from the covenant instrument itself.
In a recent, and yet unreported decision, Best Hooper acted for the plaintiff in an application under section 84 of the Property Law Act 1958 (Vic) seeking to discharge a restrictive covenant burdening our client’s land.
The covenant, created prior to 1991, purported to benefit the original transferors “and their transferees” but did not specify any parcel of land to which the benefit was intended to attach. The Court followed the reasoning of Emerton J (as Her Honnor then was) in Beman Pty Ltd v Boroondara City Council [2017] VSC 207 and Matthews AsJ in Re Ferraro [2021] VSC 166. Those authorities establish that for a covenant to run with the land, the benefiting land must be capable of identification from the face of the registered document (or related registered instruments). It is not enough that beneficiaries might be inferred or assumed from historical ownership.
As Emerton J observed in Beman, a covenant “touches and concerns” land only where it is given for the benefit of identifiable land, not merely for the personal benefit of individuals. Without clear identification, the covenant is a personal promise and unenforceable by successors in title.
Applying these principles, the Court found that the covenant burdening our client’s land failed to identify any benefiting land and that the original beneficiaries no longer existed. The covenant was therefore unenforceable and obsolete within the meaning of section 84(1)(a) of the Property Law Act 1958 (Vic).
This decision reinforces the importance of:
- Clarity in the drafting of restrictive covenants. If the benefiting land is not expressly or readily ascertainable, the covenant may not bind successors in title and may be discharged as obsolete; and
- Identifying what, if any, land is in fact burdened, which might assist in unlocking your land from the covenant.
Best Hooper Lawyers acted for the successful applicant.
