Restrictive Covenants and the Torrens System

Introduction Restrictive covenants are created by landowners through private contracts, to limit and control the way other landowners may use and develop their land. While easements may be necessary for the enjoyment of land, restrictive covenants are mainly concerned with modes of development, the character of buildings, and the preservation of views. Negative easements and restrictive covenants may overlap, however, in practice, restrictions regarding light and the flow of air are predominantly the subject of easements. Any other restrictions on land concerning development, the character of buildings, and preserving views are covered by restrictive covenants. Restrictive covenants imposed by the state or public authorities are dealt with by planning legislation. Restrictive covenants may conflict with public planning and policies employed by states and local government in relation to town planning. Restrictive covenants are a form of private land use planning and can, under certain circumstances, be enforced under common law, in equity and under the Torrens system. However, their recognition and enforcement under the Torrens system is debatable. Restrictive covenants received judicial recognition in equity in the case of Tulk v Moxhay in 1848. This was around the time that the Torrens system of land ownership was developing and ‘the law relating to restrictive covenants was in its infancy’. The first Torrens statute was enacted in South Australia only 10 years later, in 1858, and no provision was introduced to recognise freehold covenants. The High Court of Australia in 1914 recognised the existence of equitable interests under the Torrens system. Some equitable interests have since achieved express recognition in the Torrens legislation. Since then, interests relating to restrictive covenants have been recognised as equitable interests under the Torrens system with a few exceptions. Some statutory provisions were enacted to recognise notification of restrictive covenants on the register and in one jurisdiction, the Northern Territory, statutory provisions provide for registration and indefeasibility of restrictive covenants. Other traditional land interests, such as leases, easements and mortgages, were accommodated by the Torrens system. Encumbrances, such as rent charges, were recognised in Torrens legislation and can be registered. The creation, notification and registration on the register, and enforcement of restrictive covenants under the Torrens system, are dealt with in a variety of ways across Australian jurisdictions. It has been said that the way Australian jurisdictions deal with restrictive covenants is inconsistent, irreconcilable and piecemeal.