Read the full judgment text of HCA 006837/1994 on BabelCite. This High Court CFI judgment was delivered on 7 March 1995 before Findlay J.
Land law – deed of mutual covenant – sub-deed of mutual covenant – common area – breach – injunctive relief – Civil procedure – Order 14 and Order 29 summary judgment application – whether defendant breached sub-deed by enclosing passageway designated as common area – whether unregistered licence from predecessor owner overrides sub-deed against subsequent purchasers without notice – whether plan in main deed of mutual covenant excluded disputed area from common use – whether constructive trust arises entitling defendant to exclusive use – whether sub-deed voidable for mutual or unilateral mistake – whether first plaintiff (building manager) has locus standi – whether discretionary relief should be granted where second plaintiff attempted to extract high price for consent. Deed of mutual covenant entered into 3 October 1991 governed Lippo Sun Plaza building. Sub-deed of mutual covenant entered into 30 September 1993 by owners of units on seventh floor designated the disputed area as Office Common Area. Defendant, owner of offices 706 to 714, enclosed part of the common passageway in March 1994 in breach of the sub-deed. The court held that the defendant was in clear breach of the sub-deed; that an unregistered licence granted by Gosam Limited by letter dated 21 September 1993 could not bind subsequent purchasers who acquired undivided shares without notice and in reliance on the sub-deed; that the main deed did not purport to allocate space on the office floors and Clause 5 thereof expressly contemplated the designation of common areas, which the sub-deed duly did; that no constructive trust arose because equity will not grant a party a right it formally accepted it did not have; that there was no mutual or unilateral mistake since the parties deliberately designated the common areas; that the first plaintiff had locus standi as a party to the main deed of mutual covenant entitled to enforce the covenants, particularly the obligation to use corridors and passageways in a good and orderly manner; and that injunctive relief should be granted, the second plaintiff's morally questionable conduct in seeking a high price for consent not disentitling it to relief and not affecting the first plaintiff. Order made in terms of the summons of 6 August 1994 in favour of both plaintiffs.
Legal issues: Whether the defendant breached the sub-deed of mutual covenant by enclosing common area · Whether the unregistered licence from Gosam Limited can override the sub-deed of mutual covenant · Whether the plan in the main deed of mutual covenant excluded the disputed area from common use · Whether a constructive trust gives the defendant exclusive use of the disputed area · Whether the sub-deed is voidable for mutual or unilateral mistake · Whether the first plaintiff has locus standi to enforce the covenants · Whether injunctive relief should be granted in the plaintiffs' favour
Outcome: Judgment for the plaintiffs; the defendant's summons dismissed and the plaintiffs' claim upheld. Order made in terms of the plaintiffs' summons of 6 August 1994, granting the relief sought.