In a decision handed down in May 2013, the Supreme Court of Victoria confirmed that it is permissible to refer to materials outside the Register of Titles to properly understand the effect of a restrictive covenant.

In Suhr v Michelmore [2013] VSC 284 the Plaintiffs contended that the following covenant was void for uncertainty:

[W]ill not at any time hereafter erect any building of a greater height than twelve feet above the present level of the land hereby transferred and any such [building] shall not be erected within five feet of the southern boundary of the lastmentioned land. [Emphasis added]

All parties agreed that the words “the present level of the land” was a reference to the level of the land in 1937. However, the plaintiffs contended that this level could not be determined on the face of the covenant and could not permissibly be determined by reference to extrinsic evidence.

Pagone J rejected this argument, noting that the covenant clearly directed a reader to something outside the register:

11           The cases decided since Westfield Management Ltd v Perpetual Trustee Company Ltd[1] do not compel the conclusion propounded by the plaintiffs, namely, that the covenant must be void for uncertainty because the determination of the “present level” of the land as at 1937 would require reference to something outside of the Register. Plainly it would be void for uncertainty if its terms were “so vague that it [was] really impossible of apprehension or construction” such as might occur by the omission of any criteria by which the words in the restrictive covenant are to be ascertained. In Miller v Evans[2] Hall J took what might be called a narrow view of the impact of Westfield as limiting the construction of the restrictive covenant to what appears on the “face of the document” and not “to go beyond the text”. A statement to much the same effect may be seen in Ryan v Sutherland.[3] Neither case concerned a restrictive covenant where its terms, as revealed on the face of the Register, directed a searcher unambiguously to something outside the Register.

The Court also noted an important difference between easements and restrictive covenants namely that the former require registration for validity whereas the latter are required to be notified but the recording does not establish or effect validity:

14           A restriction in a covenant to be valid must of course, be capable of operation. However, that does not mean that all of the terms of a covenant must appear on the Register. It is important to bear in mind that the function of registration on title of a restrictive covenant is to give notice rather than to create validity.

In the circumstances, the covenant was capable of being properly construed and that it was therefore permissible for the covenant to refer a reader to extrinsic materials, in particular the condition of the land itself:

17           The covenant in this case, without regard to extrinsic evidence, itself unambiguously directs attention to the land for its operation. The covenant, as was in my view correctly conceded, was valid when first made in 1937, and is not shown by the plaintiffs to have become invalid because of any material change to the land since then. A visual inspection of the land revealed by the numerous present and historical photographs tendered in evidence showed that there had been no construction on the land since 1937 beyond such work as was required to surface or resurface the land for use as a tennis court. Such variation to the level of the land as may have occurred by its surfacing or resurfacing is in my view de minimis. In my view the covenant is not void for uncertainty and does not offend the principles in Westfield.

Matthew Townsend
Owen Dixon Chambers
http://www.vicbar.com.au/profile?3183
townsend@vicbar.com.au (04) 1122 0277
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