Anto v Pegoraro

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
PROPERTY LIST

S ECI 2018 02364

ASHIN ANTO	First Plaintiff
ANITA PAUL	Second Plaintiff
v
ROBERT PEGORARO AND OTHERS (according to the schedule attached)	Defendants

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JUDGE:	Lansdowne AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	30 October 2019; further submissions November 2019 and February 2020
DATE OF JUDGMENT:	26 February 2020
CASE MAY BE CITED AS:	Anto & Anor v Pegoraro & Ors
MEDIUM NEUTRAL CITATION:	[2020] VSC 76

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REAL PROPERTY – Restrictive covenant – Application to modify single dwelling covenant to allow two dwellings – Whether modification would substantially injure the beneficiaries of the restriction – Substantial injury would not be occasioned by way of direct impact on amenity – Whether the modification would occasion substantial injury by way of setting a precedent – Discussion of the principles to apply – Earlier more intense development considered and distinguished – Application refused – Property Law Act 1958 (Vic) s 84(1)(c).

REAL PROPERTY – Restrictive covenant – Application to remove materials restriction – Necessity for evidence – Application refused.

REAL PROPERTY – Restrictive covenant – Application to remove minimum size requirement – Removal of the restriction not required for the plans before the Court – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the plaintiffs	Mr D P Lloyd	Aughtersons Solicitors
The defendants in person

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Law........................................................................................................................................................ 2

Facts...................................................................................................................................................... 4

Subdivision and covenant............................................................................................................ 4
Beneficiaries and objectors........................................................................................................... 7
Description of the Subdivision.................................................................................................. 10
Observations on a view.............................................................................................................. 12

Proposal.............................................................................................................................................. 13

Defendants’ case............................................................................................................................... 15

Plaintiffs’ submissions................................................................................................................... 16

Consideration.................................................................................................................................... 18

Direct amenity impact................................................................................................................ 18
Privacy and light................................................................................................................ 18
Character of the area......................................................................................................... 20
Effects of increased density.............................................................................................. 20
Effect on value.................................................................................................................... 21
Traffic and parking............................................................................................................ 21

Indirect effect: precedent............................................................................................................ 25
Conclusion on modification of single dwelling restriction................................................... 38
Materials restriction.................................................................................................................... 38
Size requirement.......................................................................................................................... 40

Conclusion and orders.................................................................................................................... 41

HER HONOUR:

Introduction

The plaintiffs seek to modify a restrictive covenant (‘the Covenant’) burdening their land at 37 Delbridge Drive, Sydenham so as to permit them to build a further dwelling on the land in addition to the single storey dwelling currently erected on it. Their land is on the corner of Delbridge Drive, and Bryson Court, Sydenham. The proposed new two storey dwelling would front onto Bryson Court, utilising an existing cross over to Bryson Court at the rear of the land. The plaintiffs also seek to remove a restriction in the covenant as to the minimum size of the dwelling, and a requirement that 85% of the external walls of the dwelling, including any garage, carport or other building which fronts onto the street, be constructed of brick, brick veneer or stone. The plaintiffs propose to move into the new dwelling with their children, and either let or sell the original dwelling on their land.

The defendants are the registered proprietors of land that benefits from the restrictions. They are two couples who own and reside on land fronting onto Bryson Court. The land owned by the first and second defendants, Mr and Mrs Pegoraro, adjoins the plaintiffs’ land on the west and is known as 2 Bryson Court. The land owned by the third and fourth defendants, Ms Undy and Mr Cameron, is further to the west, on the opposite side of Bryson Court, diagonally opposite the Pegoraro land. Its street address is 3 Bryson Court. The defendants oppose each aspect of the plaintiffs’ application.

The modification that the plaintiffs seek is a modest one, and their proposal about the future use of their land is entirely understandable. The evidence of the first plaintiff, Mr Anto, is that he seeks to build a larger home for his family. The plaintiffs’ proposed new dwelling is also unexceptional, and in itself would not, in my view, occasion substantial injury to the Pegoraro land. However, a large part of the opposition voiced by the defendants to the proposal is based on their concern that this modification, if allowed, would establish a precedent which would over time erode the current low density aspects of Bryson Court, as conferred by the Covenant, and like covenants. I consider that concern to be well founded. In a case of this type, the proprietor of land that is currently burdened with a restriction bears the onus of showing that the modification proposed will not occasion any substantial injury to the beneficiaries of that restriction. While I am sympathetic to the desire of the plaintiffs to develop their land for the benefit of their family, I do not consider that they have discharged that onus. For the reasons that I now give, I will refuse their application.

Law

The application is made pursuant to s 84(1)(c) of the Property Law Act 1958 (Vic) (‘PLA’). That section relevantly provides as follows:

84Power for Court to modify etc. restrictive covenants affecting land
(1)The Court shall have power from time to time on the application of any person interested in any land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon by order wholly or partially to discharge or modify any such restriction (subject or not to the payment by the applicant of compensation to any person suffering loss in consequence of the order) upon being satisfied—
(a) (not relied on); or
(b) (not relied on); or
(c)that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction …

The principles that govern the Court in the exercise of this power are well known and were helpfully summarised by Riordan J in Oostemeyer v Powell.[1] The first step requires identification of the benefits intended to be conferred by a single dwelling covenant. Those benefits were identified in that case as being the provision of a quiet and tranquil existence for the beneficiaries of the covenant; preservation of the area as one having spacious homes and gardens; and the maintenance of reduced population numbers. These benefits were contrasted with the consequences of higher density living in in Re Morihovitis (which concerned a proposal to build an apartment building) in these words:

the manifest purpose or benefit of a single dwelling covenant is to maintain the building density in an area, variously put by saying that single dwellings keep the peace and tranquillity or ambience of an area, as the presence of multiple dwellings on land brings with it added use, more people (maybe tenants), more cars, more movement, reduction in land values and space, more noise or general hustle and bustle, more rubbish and waste collection, so on and so forth.[2]

[1][2016] VSC 491, [47]-[51].

[2]Re Morihovitis [2016] VSC 684, [20].

The plaintiffs and the defendants agree that these are the benefits of a single dwelling covenant. The plaintiffs also seek to remove the current materials restriction in the covenant. In Gardencity Altona v Grech & ors[3] (‘Gardencity’) I identified the purposes of a restriction that the main walls must be constructed of brick or stone as being twofold – to avoid buildings of low quality, and to require the external appearance of brick or stone.[4] The plaintiffs do not dispute that those were the benefits intended to be conferred by the materials restriction in this case. In relation to appearance, on the evidence in Gardencity I found that:

…it is possible to detect the use of brick as a building material even if the brick is rendered, although perhaps without detailed examination only by an expert.[5]

[3][2015] VSC 538.

[4]Ibid [113].

[5]Ibid [116].

The plaintiffs and the defendants also adopt the summary in Oostemeyer v Powell[6] of the principles that guide the Court in the exercise of its powers pursuant to s 84(1)(c). Accordingly, it is not necessary to set out that summary in length. Instead, I highlight the principles that are particularly relevant to this application, with my comment as to how they apply here, as follows:
[6](n 1).

1. The plaintiffs must prove as a matter of fact that the proposed modification will not substantially injure the beneficiaries of the restriction. The requirement is that the plaintiffs prove a negative (no substantial injury); not that they prove a positive i.e. a benefit to the beneficiaries.

2. A failure to provide specific plans may result in a plaintiff being unable to discharge this burden. It follows that specific plans are usually required, although the Court recognises that on submission to a local council for planning permission changes are sometimes required.

3. A substantial injury must be a real and not a fanciful detriment. Substantial injury may be caused by the precedential effect of a modification.

4. Whether there will be substantial injury is to be assessed by comparing the benefits initially intended to be and actually conferred, which in the case of the single dwelling restriction are those identified in Oostemeyer v Powell and Re Morihovitis, and the benefits which would remain after modification. This makes it relevant to consider, for example, if prior dual occupancies in the area of benefit of a single dwelling covenant have already so eroded its benefit, that any further injury occasioned by the proposed modification will not be substantial.

5. If the difference between the benefits conferred and those that remain will not be substantial, then the plaintiff has established the requirements of s 84(1)(c).

6. The Court retains a residual discretion to refuse an application, even if the plaintiff has established that it would not cause substantial injury to beneficiaries.

7. Planning principles and controls are only relevant in very specific ways. The Court may take into account the protections afforded to neighbouring properties by statutory planning provisions in assessing whether or not the proposal will occasion substantial injury. On the facts of this case, that means, for example, that the existence of town planning protections against overlooking and overshadowing may show that the proposal will not result in substantial injury by way of invasion of privacy or effect on sunlight. The authorities also establish that the Court may take planning provisions into account in considering whether or not to refuse an application in its discretion. In my view, this could be relevant, for example, if the proposal did not comply with planning controls. However, the desirability or otherwise of the proposal from a town planning perspective is not otherwise relevant. This is because the question before the Court concerns personal proprietary rights, not public interests.

Facts
Subdivision and covenant

The plaintiffs purchased their land, which I will henceforth call ‘the Land’, in 2012. The Land is Lot 42 in Plan of Subdivision 219536C (‘Subdivision’). The Subdivision contains 34 residential lots, numbered 41 to 74, a reserve and a road reserve. It contains a portion of Delbridge Drive, which runs north to south; two courts, Bryson Court and Calais Court; and a reserve entered from each of those courts. The residential lots in the Subdivision front either side of Delbridge Drive, and the Courts. The Pegoraro land is Lot 43 in the Subdivision, and the Undy/Cameron land is Lot 53. A copy of the Subdivision, annotated by counsel for the plaintiffs, is set out below:

The Land is coloured pink. Benefited land is coloured blue. The black numbers in circles show the street addresses; the green coloured circles and numbers show multiple dwellings; and the purple coloured circles show covenant modifications or discharge.

The plaintiffs rely on the expert evidence of Mr Robert Easton in relation, amongst other things, to the history of the Subdivision, and the sale of land in the Subdivision by the developer, Keilor Gateway Estate Pty Ltd (‘the Developer’). His evidence is unchallenged, and I accept it in relation to facts and opinions relating to title searching and observations of the Land and surrounds. As I will discuss further later in these reasons, in my view the area considered by Mr Easton to show that the benefits of the Covenant have already been eroded is too wide. Further, Mr Easton’s affidavit also expresses his opinion on the ultimate issue, that is whether the proposed modification will occasion substantial injury to the beneficiaries, but that is, of course, a matter for the Court.[7]
[7]This objection is taken by the defendants in submissions prepared for them by pro bono counsel, Mr Michael Gronow QC, who was engaged pursuant to the pro bono scheme between the Court and VicBar to advise the third defendant in relation to procedural matters relating to cross examination and a view.

As might be suggested by the lot numbers, Mr Easton’s evidence is that the Subdivision was one of a number of subdivisions undertaken by the Developer of land originally contained within a large parcel of 107 hectares bounded on the north by the Keilor-Melton Road. All lots within the Subdivision had titles issued in the name of the Developer on or around 30 August 1990, who progressively sold them thereafter.

Mr Easton’s evidence is that the first three transfers by the Developer, being the transfer of Lot 49 and those of the reserve and roads, did not contain any covenant. His evidence is that each of the subsequent transfers, including the transfer of the Land, contained a covenant. The terms of the covenant burdening the Land (henceforth ‘the Covenant’), created by its transfer from the Developer dated 23 November 1990, are as follows:

AND THE SAID TRANSFEREES for themselves their heirs executors administrators and transferees the registered proprietor or proprietors for the time being of the lot hereby transferred and of every part thereof DO HEREBY as separate covenants COVENANT with the said KEILOR GATEWAY ESTATE PTY. LTD. it [sic] successors assigns and transferees and other the registered proprietor or proprietors for the time being of each and every lot comprised in the said Plan of Subdivision No. 219536C and every part or parts thereof (other than the lot hereby transferred) that they will not on the lot hereby transferred:
(a)for a period of eighteen months from the date hereof whilst the said lot remains vacant erect or cause to be erected any sign board or notice advertising the sale of the said lot or any other lot excepting signs advertising house and land packages;
(b)erect or cause to be erected or remain erected on the land hereby transferred or any part thereof any building other than one dwelling house having a floor area or [sic] not less than 120 square metres and having not less than eighty five percent (85%) of external walls of brick, brick veneer or stone (including any garage carport or other building which fronts into [sic] any street);
(c)construct or erect a fence across the fontage [sic] of any allotment and no fence shall be erected or constructed where:
(i)a footpath is to be provided 5.5 metres from the front boundary;
(ii)where no footpath is to be provided 4.5 metres from the front boundary;

(d)construct or erect or permit to construct or erect or to remain constructed any dwelling which has a set back from boundaries less than the following:
(i)where a footpath is to be constructed 5.5 metres from the front boundary;
(ii)where no footpath is to be constructed 4.5 metres from the front boundary;
(iii)in respect of corner allotments 2 metres from any side road;
(iv)from all other boundaries 1.2 metres.

The plaintiffs seek to modify the restrictions so as to delete the words after ‘thereof’ in paragraph (b) and replace them with the words ‘more than two dwellings’. In other words, the plaintiffs seek to replace the limitation to one dwelling house with a limitation to two dwellings, and remove the requirement of size and the materials restriction.

The terms of only some of the other covenants noted to exist by Mr Easton are in evidence, but counsel for the plaintiff concedes that it would be a reasonable assumption that they were all in similar terms.[8]
[8]Transcript of Proceedings, Anto v Pegoraro & ors (Supreme Court of Victoria, S ECI 2018 02364, Lansdowne AsJ, 30 October 2019) (‘Transcript’) 120, 148.

Beneficiaries and objectors

On its face the Covenant purports to confer the benefit of the restrictions contained within it on each other lot in the Subdivision. In Xu v Natarelli,[9] Ierodiaconou AsJ held that a transferor/covenantee to a covenant in these terms could, as a matter of law, only confer the benefit of the restrictions contained within the covenant to land that it still owned at the time of the transfer. That proposition has not been challenged in this case, and for the purposes of this case the Court considers it correct. Mr Easton’s evidence is that on this basis 14 original lots of the 34 lots within the Subdivision benefit from the Covenant, being the lots that the Developer still owned at the time the Covenant was created. Of those 14 lots, three have been further subdivided into two lots, and each of those lots also take the benefit of the Covenant.
[9][2018] VSC 759.

On the first occasion the application came before the Court, on 7 February 2019, the Court made orders for direct notification of the registered proprietors and mortgagees of all of the original benefitted 14 lots in the Subdivision, together with notice of the application on the Land. The defendants objected to the application in writing in a letter of objection dated 27 February 2019, which was also signed by a number of other owners of lots in the Subdivision (‘Objection’).[10] One of those persons, Ms Vanessa Gonzalez, a proprietor of 44 Delbridge Drive (Lot 73 in the Subdivision) subsequently withdrew her objection, stating that she has no objection to one single dwelling being added to the property she identifies as 34 Delbridge Drive.[11] I assume this is an error, and that she intended to refer to the Land. Ms Gonzalez’s land is on the other side of Delbridge Drive to the Land, and directly opposite it. Her land is a beneficiary of the Covenant. I take into account that she, as a beneficiary, does not oppose the application.
[10]Part of Exhibit GAE-10 to the affidavit of Glen Andrew Egerton sworn 8 April 2019.
[11]Ibid.

Mr Anto gave evidence that three other proprietors in proximity to the Land have told him that they support the application, being a Mr Shah, of 36 Delbridge Drive; a Mr Shaji Abraham, the proprietor of 9 Bryson Court; and another person whose first name is Robert, but Mr Anto could not recall his surname or street address.[12] I do not consider Mr Anto’s evidence to be sufficiently reliable to give it any weight as support from beneficiaries for three reasons. First, ‘Robert’ and his land are not sufficiently identified. Secondly, the land known as 36 Delbridge Drive is Lot 69, and the title searches in evidence show that the registered proprietors of that land are Vesna and Borce Naumcevska. In fairness to the plaintiffs, I will assume that Mr Anto intended to refer to one of the registered proprietors of Lot 68, which is known as 34 Delbridge Drive, the proprietors of which are Shreya and Chirag Shah. That land is benefited land. The land at 9 Bryson Court, which is Lot 50 in the Subdivision, is also benefited land, and the title searches in evidence show that a Shaji Abraham is indeed the registered proprietor. Support from a beneficiary within Bryson Court could have been important in the disposition of this application. However, there is nothing before the Court directly from Mr Abraham, or any of the other persons noted by Mr Anto, to indicate their position in relation to the application, despite multiple opportunities for beneficiaries to express a view.
[12]Transcript 41.

By contrast, four other owners of land in the Subdivision signed the Objection in addition to the defendants and Ms Gonzalez. The solicitors for the plaintiffs informed two, Okan Erden of 35 Delbridge Drive (Lot 55), whose land is on the opposite corner of Delbridge Drive and Bryson Court to the Land, and Toni Bosilkovski of 1 Bryson Court (Lot 54), whose land is directly opposite the Pegoraro land, that the plaintiffs do not accept that they are beneficiaries of the Covenant. Neither Mr Erden nor Mr or Ms Bosilkovski sought to dispute that contention, and accordingly I accept that it is correct and disregard their objections.

The two remaining persons who made written objection in addition to the defendants, Rita Purgaric of 30 Delbridge Drive (which is Lot 66 in the Subdivision), and Kalina Josevski of 40 Delbridge Drive (Lot 71) are registered proprietors of lots with the benefit of the Covenant. They did not take up a further opportunity given to them by the Court to become defendants, but stated in the Objection that they wished the Pegoraros to represent them.

Another registered proprietor of benefited land, Mr Michael Tasevski of Unit 2, 46 Delbridge Drive (part of former lot 74), expressed his opposition to the application verbally to the solicitors for the plaintiff. As he did not take the required step of giving written notice of that objection, or attend Court to voice his objection, I disregard it.

The plaintiffs must disprove substantial injury flowing from the modification that they propose to any and all beneficiaries and so strictly speaking determination of the application does not depend on competing numbers of beneficiaries who support, and those who oppose, the application. However, the fact that objection is taken by a number of beneficiaries nevertheless tends against the application.

The usual practice of the Court is to take into account all written objections where the objector attends court either directly or by representative to give voice to the objection, even if the objector does not become a defendant. The plaintiffs in this case do not oppose that course. Accordingly, I take into account that the proprietors of four of the original 14 benefited lots object to the plaintiffs’ application on the grounds stated in the Objection. The proprietors of two of those lots took the additional step of becoming defendants, and so demonstrated a greater level of commitment to their opposition to the application. They had the opportunity to give oral evidence to elaborate their objections and make submissions, and were exposed to cross examination. As a consequence, their evidence carries greater weight than the mere lodging of an objection.

Description of the Subdivision

The Plan of Subdivision shows that the original lots in the Subdivision are all of similar dimensions, ranging from approximately 608 square metres to 695 square metres in size. The Land has an area of 643 square metres, and currently is developed with a single dwelling which is single storey and constructed of brick with a tiled roof. The evidence of the first plaintiff, Mr Anto, is that the house has three bedrooms, but they are very small. The Land has a single car garage attached to the dwelling accessed via Delbridge Drive, and has a second driveway already constructed at the rear from Bryson Court. The rear yard is currently empty and does not contain either vegetation or outbuildings. Mr Anto agreed in cross‑examination that on occasion he allows friends or family to park their cars there.

From visual inspection, the Land could be seen as eminently suitable for a second dwelling fronting onto Bryson Court. The existing dwelling is small, fronts onto Delbridge Drive, and occupies only about half the Lot. The presence of an existing cross over from Bryson Court to the large and empty rear yard adds to the impression that the Land could easily accommodate a second dwelling. It is not, however, the siting of an existing dwelling on land that determines whether or not two dwellings would be permitted where the land is burdened by a single dwelling covenant. Mr Anto’s evidence is that he was not aware of the covenant when he purchased the Land in 2012, but a restrictive covenant does not depend for its force on actual knowledge by the current proprietor of its existence. In any event, the covenant is noted on the title to the Land and so an intending purchaser would ordinarily be deemed to have knowledge of it.

The Pegoraro land is immediately to the west of the Land. It is 648m² in size. It is developed with a single dwelling, which from a photograph in the Easton Report[13] appears to be constructed over much of the lot, running south to north at a slight angle away from the boundary to the Land. Mr Pegoraro confirmed that the photograph was accurate in that respect in his oral evidence.[14] The Pegoraro land contains a long driveway running south to north from the cross over to Bryson Court, along the eastern boundary to the Land. Ms Undy states in her closing submissions for the defendants that is that it is long enough to accommodate the six cars sometimes parked there, reflecting vehicles driven by the Pegoraro children and their partners.
[13]Exhibit RWE-1 to the affidavit of Robert Walter Easton sworn 14 August 2019, Figure 9 (‘Easton Report’).
[14]Transcript 69.

Immediately to the west of the Pegoraro land is a vacant block, which is Lot 44 in the Subdivision, known as 4 Bryson Court. One of the concerns of the defendants is that if this modification is allowed, it would set a precedent for a similar development on that vacant block. The land owned by Ms Undy and Mr Cameron is immediately opposite 4 Bryson Court. There is no evidence as to the position of the dwelling on their land.

Mr Easton’s evidence reveals that 6 of the 34 original lots in the Subdivision now contain dual occupancies, including two corner lots. Of the 14 originally benefitted lots, three are now subdivided, being Lots 58, 70 and 74. I will discuss these dual occupancies further later in this judgment when discussing the possible precedential effect of the proposed modification.

Observations on a view

I took an unaccompanied view of the exterior of the Land and the Subdivision on Thursday 5 December 2019 between 4 and 5.30pm. Both plaintiffs and defendants requested before the trial that I undertake a view and were content that it be unaccompanied. To undertake the view, I drove along Delbridge Drive, Bryson Court and Calais Court and some of the surrounding streets a number of times and also walked the area. The view assisted me in putting into context the evidence. It also revealed one circumstance which had not been the subject of evidence. That circumstance was that there were at the time of the view not just one vacant lot within Bryson Court, but two – Lot 49, known as 11 Bryson Court, in addition to Lot 44 next door to the Pegoraro property, which was the subject of evidence. I gave the parties the opportunity to make further submissions in relation to the vacant Lot 49, and each did so. I had also earlier given the parties an opportunity to make further submissions in relation to a previous successful application for discharge of a single dwelling covenant formerly burdening Lot 57.

I observed the following on the view. Delbridge Drive is a loop road that travels in a U shape from a road called ‘Community Hub’ which contains a school. Within this U are a number of residential areas formed by roads called ‘courts’ and ‘ways’. Bryson Court is one such court. Delbridge Drive and the various courts and ways are to my eye all relatively narrow roads. The defendants assert that Delbridge Drive is wider than Bryson Court, as well as being longer, but I personally did not discern much difference in width between Delbridge Drive and Bryson Court. No comparative measurements are in evidence. I accept that even if a similar width to Bryson Court, Delbridge Drive has a greater sense of spaciousness being a through way. Delbridge Drive is lined with houses, as are the various courts and ways. Most of those houses are single storey brick and tile, but there are a small number of rendered houses, and a small number of two storey homes of slightly more recent appearance. I saw a small number of vacant blocks along Delbridge Drive, and as noted, two within Bryson Court, being lots 44 (4 Bryson Court) and 49 (11 Bryson Court).

Although the area is quite close to Melton Highway and the large Watergardens Shopping Centre in a direct line, and both the Highway and the Shopping Centre were quite busy, Delbridge Drive felt quiet, spacious and residential. This level of amenity is of course an important part of the benefit conferred by a single dwelling covenant. Calais Court and Bryson Court are each quite small and not thoroughfares and so had a slightly less spacious feel. The larger number of cars parked close to houses within these Courts compared to Delbridge Drive generally contributed to this admittedly subjective impression. Each of these Courts is connected to an attractive walking path running along a reserve parallel to Delbridge Drive. I saw a number of parks and a dog off leash area.

Proposal

The proposed development is deposed to by the first plaintiff in his affidavits sworn on 21 February 2019 and 22 August 2019. The latter affidavit exhibits more detailed plans of the proposed development.[15] The plans show that the proposed additional dwelling is two‑storey. It has a total floor area (including both floors, garage and the porch) of 211.9 sq. m. The existing dwelling by contrast has a total area of 176.40 sq. m. Each satisfies the size requirements of the Covenant. The Covenant does not limit a dwelling to single storey. The ground floor of the proposed new dwelling contains a kitchen, laundry, living and dining area, master bedroom with en-suite and walk in wardrobe, garage and entrance porch. The upper storey is a little under half the size of the ground floor and contains two further bedrooms, a full bathroom and an area described as ‘retreat’. Mr Easton’s evidence is that the maximum number of storeys under the applicable provisions of the Brimbank Planning Scheme is two.[16] The plans show the heights of each storey, excluding roof, but do not reveal the total height of the proposed new dwelling. Mr Easton’s evidence is that the proposal in all probability satisfies the maximum height requirement of the Scheme, which is 9 metres.[17]
[15]An enlarged version containing elevations and other details is plaintiffs’ Exhibit A.
[16]Easton Report [9.4].
[17]Easton Report [9.4] and Transcript 33-34.

There is a single garage attached to the proposed dwelling on the west, i.e. on the side facing the Pegoraro land. Between that garage and Bryson Court there is space for parking a further car. Extending north from the north wall of the garage there is a deck opening to the west from the living area. The ground floor of the proposed dwelling is set back 1.6 metres from each of the northern boundary and the proposed new subdivision boundary with the existing dwelling on the east. It is set back 3 metres from Bryson Court on the south. On the west, i.e. the boundary adjoining the Pegoraro land, the western edges of the garage, the deck and the driveway are in a line which is set back 3.05 metres from the boundary. The house itself is set back a further 3.5 metres. Mr Easton’s evidence is that these setbacks comply with the requirements of the Covenant.[18] The plaintiffs do not seek to modify those requirements.
[18]Transcript 32-33.

The plans show that the external walls on the ground floor are proposed to be constructed of face brick. Mr Anto confirmed this in his evidence. I assume from the depiction that this includes the walls of the garage. However, the external walls of the upper storey are proposed to be of weatherboard or light weight cladding construction. Mr Anto’s evidence is that this was the choice of the draftsmen and town planners.[19] He himself was not aware of any particular reason for the upper storey external walls not being of brick construction.[20] Counsel for the plaintiffs concedes that this aspect of the proposal would make the dwelling as a whole non-compliant with the current 85% brick, brick veneer or stone requirement.[21] The plaintiffs seek to remove that requirement. The roof of the dwelling and the garage are each shown as pitched, and the house roof, and I assume the garage, are shown as concrete tiles.
[19]Transcript 50.9-14.
[20]Transcript 44.6-13.
[21]Transcript, 141.

The plans identify the permeable and garden area as 40.60% of the total site. Mr Easton’s evidence is that the benchmark garden area for a lot of this total size in the planning scheme is 30%,[22] and so the proposal exceeds that benchmark. The site coverage at 50% as noted on the plans would appear to comply with the requirements of the Brimbank Planning Scheme.[23] As noted, the proposal includes a single car garage and space to park an additional car on the driveway. The potential for increased on street parking was one of the objections taken by the defendants, and other objectors. I was not directed by any party to any off street parking requirement in the Brimbank Planning Scheme. In summary, Mr Easton’s oral evidence is that there is no respect in which the proposal is unlikely to comply with the requirements of that Scheme.[24]
[22]Easton Report [9.4].
[23]Easton Report [9.4].
[24]Transcript, 33-35.

Defendants’ case

Three defendants gave oral evidence, Mr and Mrs Pegoraro and Ms Undy. As is often the case with unrepresented parties, the defendants did not always observe a strict distinction between evidence and submission, and so I summarise both under the compendious description ‘case’. With one exception, their evidence elaborated the concerns initially stated in the Objection. As noted earlier, I also take into account that two beneficiaries in addition to the defendants, Ms Purgaric and Ms Josevski, signed the Objection. However, as they did not become defendants, they were not able to elaborate their concerns on oath, or have them tested by cross examination. For that reason, their concerns have less weight than those expressed by the defendants.

The objectors’ concerns, either in the evidence of the defendants or in the Objection, may be summarised as relating to the following broad areas:

1. Direct adverse impact on the neighbouring Pegoraro land at 2 Bryson Court, being adverse impact on privacy and sunlight, particularly given the proposed new dwelling is double storey.

2. The proposal does not fit the character of the area.

3. Adverse impacts on beneficiaries by reason of increased density, in particular increased traffic and parking congestion, and reduction in the current feel and quiet atmosphere of the Subdivision, particularly Bryson Court.

4. Possible adverse effect on the value of their properties.

5. Indirect adverse impact on the beneficiaries of the Covenant, particularly within Bryson Court, by reason of setting a precedent for covenant modification to allow two dwellings on a lot.

6. Brick or stone remain preferred building materials.

I will discuss these concerns in detail in the section of this judgment headed ‘Consideration’. One matter needs to be excluded now, however. In relation to possible adverse effect on the value of their own properties, the objectors (including the defendants) state in the Objection that the plaintiffs’ existing home is in disrepair and not well kept, causing them to have concern about the quality of the proposed new dwelling. This assertion was not adopted in the evidence of the defendants on oath, and so was not subject to cross examination. Nor was it put to Mr Anto in cross‑examination to enable him to comment, as it should have been if it was to be relied upon. It is not supported by the evidence of Mr Easton, and was not a matter that I observed on the view. For these reasons, I disregard it.

Plaintiffs’ submissions

The plaintiffs accept that in establishing their case the Court must consider the impact of the proposed modification on all beneficiaries,[25] or putting it another way, the Court must be satisfied that no beneficiary will be substantially injured.[26] Nevertheless they submit that the Court should be less reluctant to grant the application where only some beneficiaries, being the proprietors of four of the original fourteen benefited lots, object.[27]
[25]Transcript 105.9-12.
[26]Ashin Anto & anor, “Outline Submissions on behalf of the Plaintiffs”, Submissions in Anto v Pegoraro & ors, S ECI 2018 02364, dated 5 September 2019 (‘Plaintiffs’ Written Submissions’) [17].
[27]Ibid.

In this portion of the judgment, I will briefly summarise the plaintiffs’ submissions in relation to the principal modification sought, that of an increase to two dwellings. I will refer to their submissions in relation to the other two aspects of the application in the Consideration section.

The plaintiffs submit that the proposed modification to allow two dwellings will not occasion substantial injury to the beneficiaries of the restriction for the following reasons. First, they rely on Mr Easton’s evidence that there would be minimal direct adverse impact on properties immediately adjacent to the Land, including the Pegoraro property. They also rely on Mr Easton’s opinion that the impact of the proposal on parking and traffic would not be significant.

Next, they emphasise that what is sought is a modest modification to allow two dwellings, not discharge of restriction as to the number of dwellings.

They submit that the benefits conferred by the single dwelling restriction have already been eroded to a degree by the dual occupancies on six of the original 34 residential lots within the Subdivision. The plaintiffs do not expressly rely on the other dual occupancies within the broader area identified by Mr Easton. They also rely on the fact that in three of these six dual occupancies covenants were discharged or removed in support of their submission that the precedential effect of this proposed modification would be limited.

The plaintiffs submit that the concerns raised by the objectors relating to the following matters – the fit between the proposed development and the character of the area; the impact on privacy and light; and further difficulties associated with traffic and parking – are matters for planning, and in the case of on-street parking, regulatory control by Council. They contend that a large single dwelling consistent with the Covenant may have the same impact in any event. In relation to the concern that the plans submitted to Council may be different to what is before the Court, the plaintiffs rely on the evidence of Mr Anto that the plans before the Court are what the plaintiffs propose to build. They submit that there is no evidence to support the defendants’ concern about detrimental impact on the value of their own land.

Consideration

I will first discuss the proposed modification of the Covenant to allow two dwellings with reference to possible direct adverse impact, and then consider possible adverse precedential effect.

Direct amenity impact
Privacy and light

The defendants contend that allowing a second dwelling on the Land will adversely impact the adjacent land to the north, at 39 Delbridge Drive, and to the west, which is the Pegoraro land. In particular, they are concerned about adverse impact on the privacy of and available sunlight to the Pegoraro land. This is said to be especially so because the proposed new dwelling is second storey. Compounding this objection are concerns that the plans before the Court may not be the plans that go before Council, and in particular the plaintiffs could seek permission to build over the easement that currently corresponds with the proposed 3 metre setback from the western boundary.

Dealing with the concern about uncertainty first, the first plaintiff gives evidence, not departed from in cross examination, that it is the plaintiffs’ intention to construct the proposed second dwelling substantially in accordance with the plans before the Court. There is no evidence to the contrary, and so I find that is the plaintiffs’ intention. The Court does not usually seek to make a modification conditional on specific plans because amendment can be required by Council at the planning stage, or by the Victorian Civil and Administrative Tribunal on review of a Council decision.

However, as discussed in oral argument, if modification of the Covenant is granted to allow a second dwelling, the defendants, and other proximate landowners even if not beneficiaries, will have a further opportunity at the stage of application for a planning permit to express any concerns. It follows that if the plaintiffs sought at that stage to substantially depart from the plans on the basis of which the modification was granted, the defendants and other objectors could raise that in opposition to the planning application.

In evaluating concerns about what the impact of the proposed planned dwelling, I accept the plaintiffs’ submission that the starting point is what sort of single dwelling would be currently permitted by the Covenant. The comparison between the benefits conferred, and the benefits that would remain, is not made in relation to the actual current dwelling, but in relation to what could be built without modification of the Covenant, and what is proposed to be built if the modification is granted. The defendants are concerned about a two storey dwelling, but the Covenant does not contain a height or storey limitation and only restricts building close to the boundary by requiring a 1.2 metre set back from the boundary with the Pegoraro land and the land to the north, at 39 Delbridge Drive. In other words, a large two storey single dwelling that extended as close as 1.2 metres to the western and northern boundaries would comply with the Covenant. The construction of a large two storey single dwelling at 42 Delbridge Drive illustrates that the construction of such a large single dwelling is not fanciful, particularly given that that development took place after an application to Council for permission to build two dwellings was successfully opposed by the defendants, and perhaps others.

In their application to the Court, the plaintiffs do not seek to change the setback requirements in the Covenant, and indeed the setbacks they propose for the new dwelling are in fact greater, being 1.6 metres from the northern boundary, and a minimum 3 metres from the western boundary to the Pegoraro land. I describe this as a minimum setback because the setback to the west facing windows on the ground and first floors of the proposed new dwelling is a further 3.58 metres. It follows that a comparison between benefits afforded by the Covenant in respect of height and proximity to boundaries and what would remain if the modification was approved shows there would be no substantial injury in these respects.

I make it clear that this analysis does not in any way seek to minimise what may be legitimate concerns about overlooking or overshadowing, but merely to say that amenity in those respects is not directly protected by the Covenant other than as discussed. Further, I accept the plaintiffs’ submissions that overlooking and overshadowing are matters that would be addressed at the planning stage.

Character of the area

The defendants and objectors have expressed a concern that the proposal does not fit with the character of the area. The defendants did not elaborate in their evidence exactly what they mean by this. If it relates to the proposed use of materials other than brick for the upper walls, I will address it shortly. If it relates to the proposed new dwelling being two storey, on the view I could observe that most dwellings in the area are single, not double storey, but as discussed above single storey is not a requirement of the Covenant. If the objection relates to two dwellings on a lot, then the evidence of Mr Easton shows that there are six instances of dual occupancies on the original 34 lots in the Subdivision. I will discuss those instances shortly.

Effects of increased density

The defendants and other objectors are concerned that the introduction of another dwelling into Bryson Court will cause injury to them by reason of increased density and population with the consequences of loss of quiet and feeling of spaciousness, increased pull on resources and increased traffic. I will discuss traffic and parking separately, as these were major concerns of the defendants. Leaving those matters aside for the moment, there is no evidence that one extra household would pose a strain on municipal resources and it would seem very unlikely.

As I observed on the view, the Subdivision has a quiet spacious, low density feel. The proposal would increase the density of the Subdivision, and in particular Bryson Court, because it would result in the addition of another dwelling fronting onto Bryson Court where currently there is only a large fence. The introduction of an additional dwelling facing into a court has taken place on each lot fronting onto Delbridge Drive at the entrance to Calais Court, and on the view I took particular note of those dual occupancies. To my eyes, the construction of an additional dwelling on those lots did not detract from the low density feel of the area generally. I consider that the same would apply in relation to the proposed new dwelling at the rear of the Land. Further, because it will front onto Bryson Court it will appear to the casual observer to be part of a continual line of houses fronting the Court, as compared with the original dwelling which fronts onto Delbridge Drive and so does not appear immediately connected to the Court. Mr Easton makes a similar point in his Report.[28]
[28]Easton Report [12.5].

Effect on value

The high point of the defendants’ case about potential adverse impact on the value of their land was that some real estate agents had said that it might, depending on the quality of what was built. The agents expressed that very qualified opinion without seeing the plans before the Court. I understand that the defendants may have a legitimate concern about the effect on the value of their own land, but this evidence is too vague and unsubstantiated to have any weight.

Traffic and parking

The defendants are particularly concerned at the impact an extra dwelling would have by reason of an increase in the number of cars parked in Bryson Court, or on the nature strip on Delbridge Drive. The thrust of the defendants’ case seems to be that there are already difficulties of access and egress occasioned by on street parking, and although the plans for the new dwelling allow for onsite parking of two cars, that will not be enough, so that the existing difficulties will be compounded.

The plaintiffs’ overall submission in relation to concerns about traffic and parking is that these are matters to be addressed by the local council at the planning stage, or in its capacity as manager of roads pursuant to the Road Management Act 2005 (Vic). In particular, the plaintiffs submit that if there is a problem caused by on street parking, or parking on the grass verge, on either Delbridge Drive or Bryson Court, that is a matter to be regulated by Council under that Act.

In support of the defendants’ concerns, Ms Undy illustrated by a photograph that if cars are parked either side of Bryson Court there is no space for emergency vehicles on the road. In relation to the subdivisions on each of the corner blocks of Calais Court, which is an example of what the plaintiffs seek to achieve, Ms Undy said it was not possible to physically drive into that court, and that pedestrian access was only possible by walking on the road because of the number of cars parked on the nature strip, or too close to corners, and over driveways. She implied that this was a consequence of those subdivisions.[29]
[29]Transcript 83.4-5.

The defendants also sought to demonstrate that onsite parking for two cars for the new dwelling will be insufficient by reference to the number of cars associated with each of their own dwellings. In the case of the Undy/Cameron dwelling, Ms Undy said this was four cars for seven residents; and in the case of the Pegoraro land Ms Undy said that there were up to six cars representing three adult children and their partners parked there at any one time, presumably exclusive of any cars driven by Mr and Mrs Pegoraro themselves. The defendants say that they can accommodate this number of vehicles on their own land.[30]
[30]Ibid 168-169.

In relation to current parking associated with the Land, Mr Anto agreed in cross examination that, notwithstanding that his current dwelling has a single garage with an apron in front, on occasion he parks on the street and sometimes parks one car on the nature strip on Delbridge Drive and one on the grassed area in Bryson Court.[31] He also agreed that on occasion he has permitted the owner of 9 Delbridge Court to park vehicles on the currently vacant rear portion of the Land, which is proposed to be taken up by the proposed new dwelling. Mrs Pegoraro, who cross examined Mr Anto, sought to elicit a concession that he parks his vehicle on the grassed verge of Delbridge Drive in a manner that obscures exit from Bryson Court, but he did not make that concession, and as Mrs Pegoraro withdrew the question, and did not give evidence herself on the point, it cannot be established.
[31]Ibid 56.6-9.

In addition to this evidence, I take into account the photographs that appear in Mr Easton’s report as Figures 2 and 5. Figure 5 is an aerial photograph dated 4 April 2018 which shows a car parked in the rear portion of the Land, a car parked on the apron to the crossover of the Land to Delbridge Drive, a car parked on the nature strip on Delbridge Drive outside the adjoining land to the north, two cars in the driveway on the Pegoraro land, and a car parked on the grass verge in Bryson Court outside the Pegoraro land. There would seem to be room for two more cars on that driveway. Figure 2 is an undated photograph of the Land from Delbridge Drive, presumably taken before the date of the report which is June 2018. It shows a car parked in the driveway to Delbridge Drive, and one parked on the nature strip on Delbridge Drive. Further in relation to parking of vehicles associated with the Land on the street, Ms Undy gave evidence that when she parked her car on Bryson Court opposite a car already parked there, to demonstrate the limited area left for emergency vehicles, she saw a person leave that car and enter the Land.

On the view, I observed very little traffic on Delbridge Drive or within the U shaped area contained within it when I attended, although the Melton Highway, which is quite close, was very busy with traffic. Within that whole area there were also very few cars parked on the street or on the street verge. Most parked cars that I could see were within the curtilage of the houses, either on driveways or on lawns. One house within Calais Court (which according to Mr Easton’s evidence is not a dual occupancy) had multiple cars parked in front or within the house curtilage. Multiple cars or vehicles were also parked close to three of the houses in Bryson Court. Mr Easton notes that the land directly opposite the Pegoraro land at 1 Bryson Court has provision for open air parking for commercial vehicles at its frontage.[32] I saw a single instance of a car parked on either side of Delbridge Drive, leaving a single lane left for traffic. This supports the evidence given by the defendants that on street parking could cause difficulties for larger or emergency vehicles.
[32]Easton Report [8.3].

I have set out the evidence in relation to on street parking at length because it was a central concern of the defendants. My observations on the view, and what is shown in the photographs, are of course at a particular point in time, and in the case of Ms Undy’s photograph staged for the purpose of illustrating her point. The evidence of the defendants that there are difficulties occasioned by on-street parking, and that on-site parking for two cars at the proposed dwelling may be insufficient, is general, but nevertheless, with one exception, I accept the overall tenor of it, which was supported by my own observations on the view. The exception is that I do not consider that their evidence shows that the difficulties for pedestrians in Calais Court are occasioned by the addition of the two dwellings on the corners, as opposed to single dwellings elsewhere in the Court. Otherwise I accept that in Bryson Court and Calais Courts a large number of vehicles may be associated with a single dwelling, depending on the number, activities and ages of the residents, and that if vehicles park on the street opposite each other it would occasion difficulties for larger or emergency vehicles. It follows that the addition of a dwelling at the rear of 37 Delbridge Drive may exacerbate an existing problem.

The creation or exacerbation of difficulties of vehicular access or egress can detract from the amenity of benefited land, and so can conceivably result in an applicant for modification of a single dwelling covenant failing to show there will be no substantial injury occasioned by the modification. I took this approach in In the matter of CLC Property Group Pty Ltd[33] in which I refused a proposed modification of a single dwelling covenant to allow six dwellings on a suburban street, which was objected to on the basis that it would substantially exacerbate already existing traffic problems on that street. That was a much more ambitious modification (one to six) than is here proposed, and so the likely exacerbation of an existing problem was sufficiently shown by the sheer number of new dwellings. Here there is a necessary element of speculation as to whether or not this new dwelling would cause further loss of amenity, and so injury, let alone substantial injury, to the beneficiaries. For many dwellings, particularly a family home with young children, which is what on the evidence of Mr Anto the new dwelling would be at least initially, on-site parking for two vehicles would be sufficient.
[33][2019] VSC 492.

On balance, I do not consider that the possibility of the exacerbation of difficulties occasioned by on-street or on-verge parking would be a substantial injury to the beneficiaries if this modification is viewed in isolation. The effect would, however, be amplified if it were to be used as a precedent to support further applications for modification of single dwelling covenants, particularly in Bryson Court, which is an enclosed space, with only one point of entry and exit.

Indirect effect: precedent

In the comparison between the benefits afforded by a single dwelling covenant, and the benefits, if any, that would remain after the proposed modification, a relevant matter is any precedential effect of the modification. Precedential effect can be most easily conceived where the proposed modification would be the first in an area of otherwise single occupancy, governed by a network of covenants. However, modification to permit a dual occupancy has also been refused where some dual occupancies have already been created within the relevant subdivision.[34] A principal concern of the defendants is that success in this application may have precedential effect in respect of applications for similar modification of covenants on other land within the Subdivision. In particular, they are concerned that if this Covenant is modified, successful application could be made to modify a covenant burdening the currently vacant land at 4 Bryson Court, which is adjacent to the Pegoraro land on the west.
[34]Oostemeyer v Powell (n 1); Del Papa v Falting & ors [2018] VSC 384.

The starting point for analysis of the precedent effect, if any, of a proposed modification is identification of the relevant area for consideration of any previous increase in density, particularly by way of modification of covenant. In his report, Mr Easton expressed the view that the relevant area for this purpose was not just the Subdivision, but also the nearby five subdivisions to the north, south and west affecting other portions of Delbridge Drive. On that basis, he identified ‘at least 32 lots’ which now contain dual occupancies, of which 13 are on corner lots having similar dimensions and size to the Land.[35] The defendants do not agree with this approach. They submit that the potential precedential effect of this proposed modification should be judged having regard to the Subdivision, not the broader area discussed by Mr Easton. In the Subdivision there have only been six instances of dual occupancies, of which five took place prior to the requirement of Court approval in 2000.[36]
[35]Easton Report [12.1].
[36]Ms Undy in chief Transcript 81.12-18; corrected in cross examination Transcript 91-92.

I agree with the defendants that Mr Easton took the wrong approach to identifying the relevant area for the purpose of consideration of precedential effect. While it may be appropriate as a matter of planning and public policy to consider the broader area of which the parent subdivision forms a part, for the purpose of covenant modification the relevant area will ordinarily be confined by the relevant parent title or subdivision, because it is that document by which the extent of covenants, and so injury to the beneficiaries of the subject covenant if further modifications ensue, is to be determined. Reliance on the broader area here is particularly inappropriate given that, according to Mr Easton, lots in the other proximate subdivisions he includes in his analysis are not burdened by single dwelling covenants.[37]
[37]Easton Report [12.1].

Counsel for the plaintiffs did not in fact rely on Mr Easton’s observations in relation to the broader area, but relied on only the six prior dual occupancies within the Subdivision. There are now dual occupancies on three former Lots on the east of Delbridge Drive, being 67 (32 Delbridge Drive); 70 (38 Delbridge Drive); and 74 (46 Delbridge Drive). There are also three dual occupancies on west of Delbridge Drive, being on former Lots 64 (27 Delbridge Drive); 58 (29 Delbridge Drive) and 57 (31 Delbridge Drive). In short, of the 34 original residential lots in the Subdivision, at the time of Mr Easton’s report six contained dual occupancies. Three of those are on land benefited by the Covenant, being former Lots 58, 70 and 74.

One of these, former Lot 58, is on the corner of Calais Court and Delbridge Drive. The opposite corner, former Lot 64, has also been developed into a dual occupancy. Those original lots each now contain a dwelling at the rear of the original dwelling in a similar way to the proposal for the Land. Those original corner blocks are slightly smaller than the Land, each being 608 square metres in size. The subdivision on Lot 74 is a battle axe subdivision with a house at the rear of the original house. The subdivisions on Lots 57, 67 and 70 have resulted in two houses side by side on each of the original Lots. There are no current dual occupancies on lots within Bryson Court or on the corner of Bryson Court and Delbridge Drive.

Analysis of any potential precedential effect of a proposed modification requires consideration of both the past and the potential future. Consideration of what has already occurred by way of more intense development may show that the benefits of the single dwelling covenant have already been so eroded that what is now proposed will not have a substantial effect, even if used as a precedent for further development. Consideration of the potential future effect of a modification also requires careful analysis of the nature of past dual occupancies – have they already established the relevant precedent? Finally, it is important to consider if what is now proposed would have limited precedential effect, because it is distinguishable from other possible future development.

The analysis can involve a number of factors. These can include:

· the number of previous dual occupancies, as compared to the remaining number of single dwellings;

· whether those previous dual occupancies have already eroded the benefits of the single dwelling covenant;

· whether there is a network of covenants constraining further dual occupancies, so that any future proposal would require modification of a covenant;

· the likelihood of similar applications being made; and

· the history of those past dual occupancies, including date, whether modification of a covenant was required, and whether that modification was by way of planning permit or Court order.

The number of previous dual occupancies in the Subdivision is not large, compared to the number of lots. It follows that the general benefits of low density, in particular low population and a sense of spaciousness, have not already been significantly eroded. Further, I infer from the size and set back restrictions in the Covenant, as well as the single dwelling restriction, that one of the benefits intended to be conferred, and actually conferred, by it, and other similar the covenants in the Subdivision, was relative uniformity of street frontage. The dual occupancies to date have taken different forms. To my eye, on the view, the smaller houses side by side on a lot have detracted to some degree from the otherwise relatively uniform street frontages, but the corner subdivisions at Calais Court have not detracted from that impression, as the new dwelling appears to form part of a continuous street frontage onto that Court. As noted earlier, I do not consider that this would be lost by the proposed modification, which would retain a continuous street frontage onto Bryson Court, and indeed add to it.

However, an increase in dual occupancies, would of course over time, erode the sense of spaciousness in the Subdivision generally, and would particularly do so in enclosed areas, such as Bryson Court. A factor weighing heavily against the plaintiffs is that there are currently no dual occupancies within Bryson Court itself, which contains four benefited Lots in the twelve Lots contained wholly within it. As discussed earlier, I consider that if dual occupancies were to occur within Bryson Court then this could exacerbate existing traffic and parking difficulties. The defendants draw this distinction between the dual occupancies approved or constructed along Delbridge Drive, and potential dual occupancies within Bryson Court, on the basis that Delbridge Drive is a thoroughfare, whereas Bryson Court is enclosed, with only a single point of entry and exit.[38] I agree that the four dual occupancies which front wholly onto Delbridge Drive, i.e. excluding the corner subdivisions at the entrance to Calais Court, are distinguishable from a subdivision on a Lot within a Court because Delbridge Drive, as a thoroughfare, is better able to absorb the reduction on spaciousness occasioned by an increase in density of housing.
[38]Transcript 84.3-10.

This Subdivision contains a network of covenants. According to Mr Easton’s evidence every residential Lot is burdened by a covenant, with the exception of Lot 49, which is 11 Bryson Court. Mr Easton includes some of those covenants in the annexures to his report, and they contain similar restrictions to the Covenant.[39] Counsel for the plaintiffs concedes that it is a reasonable assumption that all of the covenants are similar and contain a single dwelling restriction, imposed at the date of the original transfers of the land in question, which occurred from 1990. Prior to 12 December 2000, landowners whose land was burdened by a restrictive covenant could obtain a permit to develop the land or subdivide even if that development or subdivision would breach the covenant. Following amendments to the Planning and Environment Act 1989 (Vic) (‘PEA Act’) from 12 December 2000 a planning authority must refuse planning permission if the proposed development would breach a covenant. Application must now be made, either under the PEA Act to the local Council or under the PLA to this Court, to modify the single dwelling restriction before the development can be given planning consideration. This change in the law means previous Court ordered modifications, such as is here sought, are relied upon routinely in support of subsequent modifications, and so can have significant precedential effect. Here, for all Lots other than Lot 49, a future dual occupancy would require modification of a covenant.
[39]Easton Report Table of Transfers from the parent subdivision [5.4].

The evidence on behalf of each defendant couple is that they purchased in the area in reliance on the protection afforded by a single dwelling covenant, and at least in the case of the Pegoraro land constructed their home on the basis of that restriction.[40] It is not generally understood, and may not have been understood by these defendants, that a covenant imposed on the transfer of land out of a subdivision or parent title usually does not impose both a burden and a benefit on the land transferred.[41] The burden is imposed on the land being transferred (and so is evident on the title of that land when purchased), but it is only the land still owned by the developer in the parent subdivision or title that in law can take the benefit of the covenant. In other words, single dwelling covenants usually have a reducing effect, with later purchasers from the developer only taking the benefit of covenants imposed on earlier purchases from the developer of land in the subdivision, and conferring the benefit of the restriction on their land on land yet to be purchased out of the subdivision. To ascertain if they have the benefit of an earlier covenant, an intending purchaser would need to search the parent title or subdivision, and the covenants created earlier than that on the land they are considering purchasing, and there is no evidence that these defendants undertook that exercise.
[40]For example, Mr Pegoraro Transcript 69; Mrs Pegoraro Transcript 101.
[41]Unless they constitute a building scheme, which is not here asserted.

However, Mr Easton’s evidence and the plaintiffs’ concession that the Subdivision contains a network of covenants show that the defendants’ assumptions that they would benefit from single dwelling restrictions were in fact reasonable. As the transfers out of the Subdivision of the land now owned by the defendants occurred relatively late in the sequence of sales by the Developer,[42] their land presumably benefits from the single dwelling restrictions imposed on all other residential Lots purchased earlier in time from the Developer (except Lot 49), which includes many Lots sold by the Developer earlier than the Land. I accept their evidence that they relied on the presence of a single dwelling covenant in purchasing their own land, even if they did not entirely understand how covenants operate.
[42]Easton Report Table of Transfers from the parent subdivision [5.4].

The defendants gave evidence of having previously objected to dual occupancy proposals. Ms Undy deposed in her affidavit that all defendants, together with other residents, had opposed two prior applications to Council for dual occupancies on the Land, in 1998 and 2004. There is no documentary evidence before the Court to substantiate this evidence, or show the precise nature of these applications, but the plaintiffs did not adduce any evidence to the contrary or cross examine Ms Undy on the point, and so I take it to be uncontroversial.

Mrs Pegoraro also gave evidence of previous opposition by her to dual occupancies in the Subdivision. She said that she had opposed such applications at Council on at least three occasions before 2000 and most recently in 2013 in relation to a dual occupancy proposal for Lot 72. She said that she objected to that proposal on the basis that it did not comply with the single dwelling covenant, and would affect traffic going into Bryson Court, which is directly opposite. The proprietors of that lot subsequently built a large two storey single dwelling, with what Mrs Pegoraro described as ‘plenty of parking’.[43] Mrs Pegoraro said that her opposition, shown over a long period of time, was:

about trying to keep our neighbourhood the way we have had it for the last 27 years, the way we signed our contract. It’s a very family oriented street. And as long as we’re there, we would like to try and maintain that.[44]

[43]Transcript 97-98.

[44]Ibid 101.25-29.

Mrs Pegoraro was cross‑examined as to whether she opposed the construction of two dwellings on three particular Lots: Lot 57, 31 Delbridge Drive (which followed Court discharge of a single dwelling covenant); Lot 64, which is on the southern corner of Calais Court and Delbridge Drive; and Lot 67, which is directly opposite Lot 64 on the eastern side of Delbridge Drive. She conceded that she did not object to the dual occupancies on Lots 57 and 64. In relation to Lot 67, she said that she believed the dual occupancies there were built without permission, which was only sought and granted after construction.

In relation to Lot 57, Mrs Pegoraro said in cross examination that she ‘saw the planning permit go up’, but decided not to actively oppose it because ‘quite frankly, I’m exhausted. I’ve been exhausted over all these years fighting just the one next door to me’. She said that had the neighbours of that property approached her to oppose it she would have supported them, but no one else wanted to do anything about it.[45] In summary, she accepted that there were instances of permitted dual occupancies, but said that on every occasion that she had opposed such a development, the application was refused.[46] The defendants’ history of objection, and successful objection, to more intense development supports their case that departure from the protection afforded by this network of covenants would be a substantial injury to them.
[45]Ibid 100.
[46]Ibid 101.15-16.

I now turn to consider whether there is any evidence as to the likelihood in fact of further development in reliance on this application, if approved. As discussed, every Lot within Bryson Court is burdened by a covenant that it is accepted contains a single dwelling restriction, with the exception of Lot 49, 11 Bryson Court. This is the Lot that is now vacant, as I observed on the view. There is no direct evidence from the proprietors of that Lot, or by way of application to Council, as to what is now proposed on that Lot. I accept the submission by the plaintiffs that their proposed modification could not have any legal precedential effect on that Lot, as it is not burdened by a single dwelling restriction. Subject to planning permission, the proprietors could construct more than one dwelling on the site, and would not need to seek Court modification of a covenant in which they could rely on this application, if successful. On the other hand, the absence of a covenant on that Lot arguably increases any injury to the beneficiaries within Bryson Court if the plaintiffs’ modification is approved, because there already exists the potential to increase density within the Court.

At the date of the trial there was already another vacant Lot within Bryson Court, Lot 44, which is next door on the west to the Pegoraro land and opposite the Undy/Cameron land. The plaintiffs have provided a copy of the covenant burdening that Lot, and it contains a single dwelling restriction. The defendants are particularly concerned that if this application is successful then the proprietors of Lot 44 may seek a similar modification. There is no evidence as to the intentions of the proprietors of Lot 44, or indeed of the intentions of any proprietor within Bryson Court whose land is currently burdened by a single dwelling covenant. However, were similar applications for modification to be made in respect of such land, success on this application would very likely be relied upon, as counsel for the plaintiffs conceded.[47] This application concerns an extra dwelling that would appear as part of a continuous frontage of dwellings onto the Court, as opposed to the sort of dual frontage or battle axe subdivision that would be required for two dwellings on Lot within the Court. In that sense it would perhaps be distinguishable, but in terms of impact on density I am not persuaded that it could be sufficiently distinguished.
[47]Ibid 120.19-121.3.

Finally, in assessing what benefits of a network of single dwelling covenants would remain if this application was approved, given the dual occupancies to date, it is also important to consider the history of those dual occupancies. If, for example, they occurred some time ago, particularly before current objectors acquired their land, the impact of increased density on spaciousness, traffic and resources may have been so absorbed within the Subdivision as to be not noticeable to current beneficiaries. It is what might happen hereafter that could cause concern. Similarly, it can be relevant to inquire whether modification of a covenant was required for the dual occupancy, and, if so, whether it was obtained, and whether by Court approval as is now required. If prior dual occupancies are distinguishable on that basis, then it would be this application if approved that would establish the precedent, not those earlier ones.

The six dual occupancies in the Subdivision occurred from 1992 to 2010. According to Mr Easton’s evidence, which I accept, covenants in similar terms to this Covenant burdened all of these further subdivided original Lots. I set out their history below, with particular attention to the modification or discharge of single dwelling covenants:

· on Lot 64, on the southern corner of Calais Court and Delbridge Drive, application to modify the covenant was made in 1992 and approved 1993 and a new plan of subdivision registered April 1994;[48]
[48]Easton Report [11.3 (3)] and A 65-70.

· on the immediately opposite Lot, Lot 67, 32 Delbridge Drive, a planning permit allowing dual occupancy was issued in July 1992 and a plan of subdivision accordingly registered in 1993. The covenant was not amended until December 1995, over two years after construction of the two dwellings, as it appears the application for variation was not lodged until late 1994;[49]
[49]Ibid [11.3(4)] and A 75-89.

· on Lot 58, on the northern corner of Calais Court and Delbridge Drive, plan of subdivision registered in May 2000, but single dwelling covenant not modified;[50]
[50]Ibid [11.3(2)] and A 60.

· on Lot 70, 38 Delbridge Drive, single dwelling covenant remains although plan of subdivision was registered in February 2004, according to Mr Easton presumably pursuant to permit being granted prior to 12 December 2000; [51]

· on Lot 74, 46 Delbridge Drive, plan of subdivision registered in May 2006, although the covenant was not modified;[52] and

· on Lot 57, 31 Delbridge Drive, registration of plan of subdivision in July 2010, following the discharge of a covenant in similar terms to this Covenant by order of this Court on 10 October 2008.[53]

[51]Ibid [11.3(5)] and A 90.

[52]Ibid [11.3(7)] and A 98.

[53]Ibid [11.3(1)] and A 48 and A 57.

For the following reasons, I consider these prior dual occupancies to be largely distinguishable from what is now proposed.

First, most occurred some time ago, and at a time when it was not necessary to first seek Court or council permission to modify the single dwelling restriction to allow a dual occupancy. This was the case in respect of the subdivisions on Lots 58 and 64, the northern and southern corners of Calais Court and Delbridge Drive, which would otherwise be identical to what is now proposed. It was apparently not necessary to modify the single dwelling covenant burdening Lot 58 to obtain planning permission and the subdivision.

Next, it appears that the defendants purchased their own land or constructed their own dwellings in approximately 1992, i.e. about the same time as the approval of dual occupancy on Lots 64 and 67.[54] It follows that the subdivision on Lot 64, to which Mrs Pegoraro concedes she did not object, may have been underway prior to the Pegoraros purchasing their land, or about that time. For practical purposes, the Subdivision as lived in by the defendants has always contained those two subdivisions. The injury to them would be what has occurred thereafter, or may occur as a result of approval of this application.
[54]The title to the Undy/Cameron land, which is exhibited to an affidavit of service of the plaintiffs’ solicitor, shows it became registered in their names on 29 December 1992. Mr Pegoraro’s evidence is that he and his wife purchased their land ’27-odd years ago’, which would also be approximately 1992.

That modification of the single dwelling covenant was not a central consideration prior to 12 December 2000 is further shown by Mr Easton’s evidence that the construction of a second dwelling on Lots 58 and 70 proceeded despite the single dwelling restrictions in the covenants burdening those Lots, which still remain.

This is also the case in respect of the subdivision on Lot 74. Although the date of the subdivision is after December 2000, Mr Easton records that the single dwelling covenant still remains on both subdivided lots. He surmises that ‘(t)his will be due to either the relevant permits being issued prior to December 12 2000 or alternatively the previous owner neglected to lodge the relevant documents at the Title Office’.[55]
[55]Easton Report [11.3(7)].

For these reasons, I do not consider that the dual occupancies on any Lot other than that on Lot 57 constitute a relevant precedent. That is the only prior subdivision where the Court or Council was required to consider, as a discrete and initial matter, whether the modification would substantially injure the beneficiaries of the restriction.

Mr Easton includes in his Report the Court order of Daly AsJ made on 10 October 2008 by which the single dwelling covenant was discharged.[56] The order records that previous orders made 14 July 2008 for notification of the application had been complied with, and there were no objectors to the application. For the purposes of this proceeding, I caused that file to be obtained from archives. It shows that the order for notification was not extensive, in accordance with the practice of the time. Mr Easton’s table of transfers from the Subdivision shows that 21 other Lots benefited from the single dwelling restriction over Lot 57, including the defendants’ land. However, the order required direct postal notification of the application only to the proprietors of benefited Lots along Delbridge Drive, not to all the benefited Lots within the Subdivision, and in particular not to the defendants. Further, the order did not require a notice on the subject land, but only advertising in The Age newspaper and a local newspaper. In recent years, the Court has substituted a notice on the land for newspaper advertising on the basis that it is likely more effective.
[56]Ibid A 58, made in the application of Lidia Petrovic in proceeding number 7092 of 2008.

The plaintiffs submit that the Court should not look behind the order by which the covenant was discharged to examine the circumstances in which it was made. I do not accept that submission. In my view, examination of the extent of the notification of that application is prompted by the cross examination of Mrs Pegoraro as to whether or not she objected to the dual occupancy on that land. She concedes that saw an application advertised on the land, but did not object. She says that this was because she was exhausted. Given that the application relating to the covenant did not require a notice on the land, the notice to which she refers was presumably the planning application, as indeed she describes it, which was only possible because the covenant had already been discharged. I accept her explanation as to her stance in relation to the planning application, and do not consider that the lack of objection to it significantly detracts from the force of the defendants’ stance in relation to dual occupancies generally.

The Court file for that proceeding also shows that the covenant burdening the subject land in that proceeding was in identical form to the Covenant, and that at the time of the application the subject land was undeveloped and the plaintiff sought to construct two single storey dwellings. Those dwellings were subsequently constructed in a side by side arrangement.[57]
[57]Ibid [11.3(1)].

The fact that there is already an example of Court discharge of a single dwelling restriction in relatively recent times shows that this application if approved would not be the first, and indeed is more modest in scope, as only modification not discharge is sought. It would, however, be the first Court approved intensification of development directly affecting the enclosed area of a court, and the first of any kind for Bryson Court. It would also be a modification approved notwithstanding objection, and so arguably of greater weight than the discharge approved in respect of Lot 57.

It is true that there are arguments that could be put in a future application to separately distinguish the discharge of the covenant over Lot 57 and the modification of the Covenant in this proceeding if approved. The intensification of development on Lot 57 took place on the through road of Delbridge Drive, not within an enclosed area. The proposal in this application is for a form of intensification that is possible because it is a corner block, and so it is not readily replicable on lots wholly within Bryson Court. It would be replicable, however, on the only other corner lot remaining unsubdivided in the Subdivision, at 35 Delbridge Drive which is directly opposite the Land on the southern corner of Bryson Court and Delbridge Drive. Subdivision on that corner would intensify the adverse impact of increased density on beneficiaries within Bryson Court.

Further, if successful modification in this case were approved, then any argument that it should be quarantined to a corner block could be diminished by the fact that the proposal for Lot 57, as accepted by the Court, was for a side by side arrangement, which would be possible on a Lot wholly within Bryson Court. Indeed, Mr Easton describes both side by side arrangements and utilisation of a corner block as equally preferred forms of dual occupancy.[58] If there were to be two Court ordered modifications of the single dwelling restriction on the basis of each of these preferred forms of dual occupancy I do not consider that the plaintiffs have shown that their combined effect would not occasion substantial injury by setting a precedent for like development within Bryson Court.
[58]Easton Report [12.2].

Conclusion on modification of single dwelling restriction

I do not consider that this proposed modification, viewed alone, would occasion substantial injury to the beneficiaries of the single dwelling restriction. However, the plaintiffs have not shown that approval of this application would not have the injury of establishing a precedent for similar modification on the other corner of, or within, Bryson Court. That possible injury would be a substantial one to the defendants, other beneficiaries within the Court and possibly within the Subdivision as a whole, for at least two reasons. First, the enclosed nature of that Court means any reduction in spaciousness and increase in on-street or on-verge parking has a greater effect than on Delbridge Drive. Next, the diminishment of amenity would undermine the legitimate expectation of the defendants, which they have prosecuted over time, that their land would retain the benefit of low density. Having regard to its precedential effect, I will refuse the proposed modification to permit a dual occupancy.

Materials restriction

The proposed new dwelling would require removal of the requirement that 85% of external walls be constructed of brick or stone restriction because the external walls of its upper storey would contain lighter weight materials.[59] In that sense, removal of the materials restriction is dependent on the modification of the single dwelling restriction, and so does not require detailed consideration given the failure of that more significant modification. The converse was not necessarily the case, however, as the plaintiffs may have been prepared to accept a more restricted modification in relation to building materials if the single dwelling restriction were to be modified as sought, but not the materials restriction removed.[60] For that reason, and for the guidance of applicants and practitioners in the future, it is worthwhile to make some observations about the application to remove the materials restriction.
[59]Transcript 141.15-22.
[60]Ibid 142.2-15.

The first observation is that there is no real evidence to support this aspect of the application. Counsel for the plaintiffs concedes that there is no expert evidence in support.[61] In answer to a question from me, Mr Anto could not give a reason for the proposed use of lightweight materials in the upper storey, saying he assumed that it was ‘more of a planning thing’.[62] He reiterated this in cross examination, and accepted that in Bryson Court the houses are built mostly of bricks, with some use of rendering.[63] My observation on the view is that the houses in the Subdivision are largely brick and tile. Discussion at the hearing established a consensus that the relatively new two storey house at 42 Delbridge Drive, constructed after refusal of a two dwelling application, also may comply with an identical materials restriction in that at least at the front it is constructed of brick to the base of the upper storey windows.[64] This would seem to suggest that brick can be utilised in upper storeys.
[61]Transcript 147.14.
[62]Transcript 44.6-13.
[63]Ibid 50.1-14.
[64]Transcript 143-150.

The plaintiffs rely on observations made by Associate Justice Mukhtar in Re Hammond,[65] which he repeated in a later case, In the matter of Tu and Yew[66] (‘Tu and Yew’) that:

…the courts recognise the reality that in the last one hundred years the type, durability, and aesthetic quality of construction materials has so markedly changed and advanced that the court looks to see if there are any special benefits of a ‘brick and stone covenant’ that might be taken away unjustly if the application is granted.[67]

[65][2015] VSC 608.

[66][2018] VSC 738.

[67]Re Hammond (n 64), [23].

Those observations, no doubt appropriate in the context of those cases, do not obviate the need for evidence to support the proposed removal of a brick and stone covenant in this case for a number of reasons. First, each case is decided on its own facts. The applications in both Re Hammond and Tu and Yew were unopposed, as compared with this case where the application is opposed on grounds that relate to the desirability of uniform appearance, not quality of materials.[68] Nor did Associate Justice Mukhtar attempt by the extracted observation to express a conclusion independent of the facts before him. On the contrary, he went on in each case to consider the character of the neighbourhood and found that the removal of the materials covenant would not cause the proposed new construction to depart from that character. In this case, by contrast, the evidence in Mr Easton’s report and my observations on the view are both that existing houses are almost without exception constructed of brick and so a departure from that standard would be a departure from the existing character. The defendants express a preference for that to continue, and so evidence was required to show that change from that form of construction would not substantially injure them in that regard.
[68]Defendants’ closing submissions, Transcript 171-172.

Finally, the observation by Associate Justice Mukhtar referred to change over the last one hundred years. This restriction by contrast was imposed only thirty years ago, and houses built at that time and subsequently have adhered to it. The defendants’ preference for brick is expressed to be in relation to uniformity of appearance. In these circumstances, specific evidence is necessary to substantiate that change would not occasion substantial injury.

For these reasons, even if I considered it appropriate to modify the single dwelling restriction as sought, I would have hesitated to remove the materials restriction.

Size requirement

The plaintiffs also seek removal of the minimum size requirement in the Covenant. Removal of the size requirement is opposed by the defendants. There is no evidence as to why removal would be necessary to enable the proposal the subject of this application to proceed, given that the proposed new dwelling would comply with it in any event. Applications are considered in the context of specific plans, and so a need for change must ordinarily be shown on the basis of those plans.

If the requirement were to be removed, then that change would also apply to any subsequent development on the Land. The benefit conferred by a minimum size requirement is, I infer, to encourage a minimum quality of dwelling, and perhaps ensure a uniform minimum size of dwelling across the Subdivision. The plaintiffs have not adduced any evidence as to how these benefits would remain after removal of the requirement. By contrast, the defendants’ evidence (to which objection on hearsay grounds was not taken[69]) is that they have been told that the value of their own land could be diminished by a poor quality dwelling on the proposed new subdivision. I conclude that the plaintiffs have not discharged the onus on them of showing that removal of the minimum size restriction would not occasion substantial injury to the beneficiaries. I would have refused this aspect of the application even if otherwise disposed to grant the modification to enable two dwellings.
[69]Objection was only taken to statements in the nature of submissions - Transcript 63, 80.

Conclusion and orders

I will refuse the application. I ask the legal representatives for the plaintiffs to prepare appropriate orders to give effect to that determination, after consultation with the defendants. Those orders should include appropriate orders in relation to costs.

For the benefit of the defendants, who were unrepresented at trial but had a solicitor on record for them at an earlier point in time in the application, I note that it is common for the unsuccessful party, here the plaintiffs, to be ordered to pay the legal costs of the successful party, here the defendants. There are exceptions and qualifications to that common course, and the defendants may wish to seek some legal advice in relation to whether or not to seek an order for the payment of their legal costs, if any.

In the event that the parties are not able to agree on the orders to be made, I will hear them further.

SCHEDULE OF PARTIES

S ECI 2018 02364

ASHIN ANTO First Plaintiff

ANITA PAUL Second Plaintiff

ROBERT PEGORARO First Defendant

JOANNE MARIE PEGORARO Second Defendant

ROBYN LYNN UNDY Third Defendant

LEIGH ARTHUR CAMERON Fourth Defendant

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[2020] VSC 76

26 February 2020