Brillan Pty Ltd v Tulloch
[2022] VSC 618
•19 October 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2021 03239
IN THE MATTER of an application under s 84(1)(c) of the Property Law Act 1958 (Vic)
- and -
IN THE MATTER of an application by BRILLAN PTY LTD for the modification of the restrictive covenant contained in Instruments of Transfer Nos. 0904142, 0904143 and 0904144 registered in the Register Book at Land Registry and which burden the land known as 9 - 11 Wimba Avenue, Kew, more specifically being the land described in Certificate of Title Volume 09433 Folio 860
BETWEEN:
| BRILLAN PTY LTD | Plaintiff |
| v | |
| DEBORAH TULLOCH and ORS (according to the attached Schedule) | Defendants |
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JUDGE: | Matthews AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 19 October 2022 |
CASE MAY BE CITED AS: | Brillan Pty Ltd v Tulloch & Ors |
MEDIUM NEUTRAL CITATION: | [2022] VSC 618 |
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REAL PROPERTY – Restrictive covenants – Application for modification of covenants – Property Law Act 1958 (Vic), s 84(1)(c) – Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) – Vrakas & Anor v Registrar of Titles & Ors [2008] VSC 281 – Re Cook [1964] VR 808.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Walker of counsel | Planning and Property Partners Pty Ltd |
| No appearance for the Defendants |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background......................................................................................................................................... 2
The Subject Land and its history................................................................................................. 2
The Covenants............................................................................................................................... 4
Summary............................................................................................................................... 4
The 1919 Covenants............................................................................................................. 5
The 1980 Modification and the 1980 Covenant............................................................... 7
Beneficiaries of the 1919 Covenants.................................................................................. 9
Application of single dwelling covenants in the lots described in LP 6331.............. 10
The Plaintiff’s proposal and application.................................................................................. 10
Brief procedural history............................................................................................................. 11
Evidence............................................................................................................................................. 13
Negri Report................................................................................................................................ 13
General matters.................................................................................................................. 13
Plaintiff’s proposed development and consideration of other proposals................. 15
Actual benefits of the 1919 Covenants and the 1980 Modification for beneficiaries 18
Will the modification of the 1919 Covenants (as already modified by the 1980 Covenant) cause substantial injury to the beneficiaries of the covenants?...................... 20
Applicable principles...................................................................................................................... 21
Plaintiff’s submissions................................................................................................................... 23
Consideration.................................................................................................................................... 25
Conclusion......................................................................................................................................... 27
HER HONOUR:
Introduction
This proceeding concerns the land at 9-11 Wimba Avenue, Kew in the State of Victoria (‘Subject Land’), being the land more particularly described in Certificate of Title Volume 09433 Folio 860 (‘Current Title’), and also being the land known as Lots 1, 2 and 3 on title plan 838216Q (‘Title Plan’).
The Subject Land is burdened by restrictive covenants contained in Instruments of Transfer Nos. 0904143 and 0904144 (‘Relevant Covenants’). Another covenant, contained in Instrument of Transfer No. 0904142, also burdens the Subject Land but that covenant is no longer the subject of this application, as I will later explain.
By this proceeding, the Plaintiff, which is the registered proprietor of the Subject Land, seeks to modify the Relevant Covenants pursuant to s 84(1)(c) of the Property Law Act 1958 (Vic) (‘PLA’) on the basis that the proposed modification will not substantially injure the persons entitled to the benefit of the Relevant Covenants.
In support of its application, the Plaintiff relies on the following:
(a) affidavit of Scott Blake Edwards affirmed 30 August 2021 (‘First Edwards Affidavit’) and the exhibits thereto. Mr Edwards is a solicitor at Planning & Property Partners Pty Ltd, the solicitors for the Plaintiff in this proceeding;
(b) affidavit of Mr Edwards affirmed 1 December 2021 (‘Second Edwards Affidavit’) and the exhibits thereto;
(c) affidavit of Marco Negri sworn 15 October 2021, including his expert report dated July 2021 which is exhibited to that affidavit (‘Negri Report’); and
(d) outline of written submissions from the Plaintiff’s counsel dated 11 August 2022 (‘Written Outline’).
As will be explained later in these reasons, the application to modify the Relevant Covenants is now not opposed and For the reasons which follow, the application to modify the Relevant Covenants will be granted.
Background
The Subject Land and its history
The Subject Land was originally part of a larger parcel of land, being the land described in certificate of title volume 3782 folio 229 (’the Parent Title’).[1] The land described in the Parent Title has been subdivided in accordance with plan of subdivision LP6331 (‘LP 6331’).[2]
[1]First Edwards Affidavit, [6] and exhibit SBE-3.
[2]First Edwards Affidavit, [7] and exhibit SBE-4.
Lots have been transferred out of the Parent Title over time.[3]
[3]First Edwards Affidavit, [7]. References to lots are to lots as shown on LP 6331, unless otherwise stated.
The Subject Land consists of Lot 14, part of Lot 15 and part of Lot 16, as shown on the Title Plan. Although the whole of Lots 14, 15 and 16[4] were transferred out of the Parent Title in 1919, parts of Lots 15 and 16 have been transferred to adjacent landowners over time.
[4]And lots 12 and 13.
By way of background to the application, the history of the dealings with the Subject Land is as follows:[5]
[5]First Edwards Affidavit, [4]–[8] and exhibits SBE-1 – SBE-8.
(a) the whole of Lots 14, 15 and 16 (being the land described in certificate of title volume 4250 folio 937), together with the whole of Lots 12 and 13, were transferred out of the Parent Title on 30 September 1919. Charlotte Madeline Norman was listed as the registered proprietor for these Lots that were transferred out of the Parent Title;[6]
[6]First Edwards Affidavit, [8(a)] and exhibit SBE-5.
(b) on 22 June 1945, Lot 14,part of Lots 15 and the whole of Lot 16 (‘the Lots’) were transferred out of certificate of title volume 4250 folio 937. The Lots were transferred to Arthur Howard Norman. A new certificate of title was created for the Lots, being certificate of title 6806 folio 045;[7]
[7]First Edwards Affidavit, [8(b)] and exhibit SBE-6. [8(b)] states that the land was transferred to Arthur Howard Norman on 22 February 1945. This is not correct. The land was transferred on 22 June 1945.
(c) on 24 June 1953, the Lots were transferred to Elizbeth Lois Menhennitt and Phyllis Madeline Joyce Norman. Concurrently with this transfer, certificate of title 6806 folio 045 was cancelled and a new certificate of title, being certificate of title 7923 folio 140, was issued (‘the Interim Title’);[8]
[8]First Edwards Affidavit, [8(c)] and exhibit SBE-7. Note: the land described in certificates of title 6806 folio 045 and certificate of title 7923 folio 140 appear to be identical.
(d) on 26 May 1976, Elizbeth Lois Menhennitt’s interest in the Lots were transferred to Phyllis Madeline Joyce Norman under probate granted to Clifford Inch Menhennitt, so that Phyllis Madeline Joyce Norman became the sole registered proprietor of the land contained in the Interim Title;[9]
[9]First Edwards Affidavit, [8(d)] and exhibit SBE-7.
(e) on 12 June 1978, a part of Lot 16 was transferred out of certificate of title 7923 folio 140.[10] The land that was transferred out of the title was the small “projecting” south-west portion of the land;[11]
(f) on 10 April 1981, the land remaining untransferred in the Interim Title was transferred to Natsac Nominees Pty Ltd. Concurrent with this transfer, the Interim Title was cancelled and a new certificate of title, being the Current Title, was issued;[12] and
(g) on 12 August 1994, the Subject Land was transferred to Young Cheung Kwai Chi Cindy.[13]
[10]First Edwards Affidavit, [8(e)] and exhibit SBE-7.
[11]See the plan attached to certificate of title 7923 folio 140, being part of exhibit SBE-7.
[12]First Edwards Affidavit, [8(f)], exhibit SBE-8.
[13]First Edwards Affidavit, [8(g)], exhibit SBE-8.
On 15 June 2020, the Subject Land was transferred to the Plaintiff.[14]
[14]First Edwards Affidavit, [8(h)], exhibit SBE-8. A copy of a search of the Current Title is also found as exhibit SBE-2 of the First Edwards Affidavit.
The Title Plan for the Current Title shows the Subject Land as follows, clearly depicting the portions of Lots 15 and 16 on LP 6331 that were excised previously (now shown as Lots 2 and 3 on the Title Plan:[15]
[15]Negri Report, [21].
The Covenants
Summary
Instruments of Transfer Nos. 0904142, 0904143 and 0904144 created three covenants (‘1919 Covenants’). The 1919 Covenants were all created on 30 September 1919.[16] The 1919 Covenants were single dwelling covenants which burdened Lots 12, 13, 14, 15 and 16, and prohibited those lots from being developed with more than one dwelling. They also set out requirements as to the building materials which had to be used in the construction of the dwellings and the minimum cost of construction which was set at 500 pounds.[17]
[16]First Edwards Affidavit, [9]–[12].
[17]First Edwards Affidavit, [13].
Relevantly, the 1919 Covenants were modified by orders of Master Bergere made on 5 February 1980 (‘1980 Modification’). In summary, the 1980 Modification:
(a) modified the 1919 Covenants to permit the Subject Land to be re-subdivided into eight lots with a single storey dwelling or semi-detached dwelling on each lot;
(b) modified the covenants which burdened Lots 14 and 15 to permit Lots 14 and 15 to be re-subdivided into not more than five lots with a single storey dwelling or semi-detached dwelling on each lot.[18]
[18]The modification refers to those parts of Lots 14 and 15 which were then comprised in the Interim Title. This is of no consequence for present purposes as the land then comprised in the Interim Title is the same as the land described in the Current Title. Accordingly, the 1980 Modification relates only to parts of Lots 14 and 15, however, for ease of reference I will continue to refer to these as “Lots 14 and 15”.
Part of the Subject Land (being part of Lot 16) is also burdened by a new covenant that was created in 1980, as contained in Deed of Covenant J172190 dated 30 September 1980 (‘1980 Covenant’). Lot 17 (being the land known as 7 Wimba Avenue and being the land more particularly described in certificate of title volume 04250 folio 939) (‘7 Wimba Avenue’), is the only land which has the benefit of the 1980 Covenant.[19]
[19]First Edwards Affidavit, [19]–[24], and exhibits SBE-13 and SBE–14.
The 1980 Covenant prevents any two storey dwelling house from being erected within ten feet of the southern boundary of the Subject Land.
It is convenient to now set out the history of the creation of the 1919 Covenants and the 1980 Covenant, the full text of these covenants, and the 1980 Modification in detail.
The 1919 Covenants
As set out above:
(a) the 1919 Covenants were all created on 30 September 1919;[20]
(b) the 1919 Covenants were single dwelling covenants which applied to Lots 12, 13, 14, 15 and 16 and prohibited those lots from being developed with more than one dwelling. They also set out requirements as to the building materials which had to be used in the construction of the dwellings and the minimum cost of construction which was set at 500 pounds;[21] and
(c) the 1919 Covenants were modified in 1980, in accordance with the 1980 Modification.
[20]First Edwards Affidavit, [9]–[12].
[21]First Edwards Affidavit, [13].
The 1919 Covenants were created by:
(a) Instrument of Transfer No. 0904142, which burdens Lot 16;[22]
(b) Instrument of Transfer No. 0904143, which burdens Lot 14;[23] and
(c) Instrument of Transfer No. 0904144, which burdens Lot 15.[24]
[22]First Edwards Affidavit, [11], exhibit SBE-9.
[23]First Edwards Affidavit, [11], exhibit SBE-10. The covenant in this transfer also burdens lots 12 and 13.
[24]First Edwards Affidavit, [11], exhibit SBE-11.
The 1919 Covenants are expressed in identical terms, except for the description of the burdened land.
The covenant created by instrument of transfer 904142 reads as follows (emphasis added):
AND the said Charlotte Madeline Norman DOTH HEREBY for herself, her heirs executors administrators and transferees COVENANT with the said The National Permanent Building Society its successors and transferees registered proprietor or proprietors for the time being of the balance of the land comprised in Certificate of Title Volume 3782 Folio 756229 that she her heirs executors administrators and transferees shall not erect more than one residence on the said Lot 16 and that any residence so erected shall be built of brick stone concrete or rough-cast at a cost of not less than Five hundred pounds.
The covenant created by instrument of transfer 904143 reads as follows (emphasis added):
AND the said Charlotte Madeline Norman DOTH HEREBY for herself, her heirs executors administrators and transferees COVENANT with the said The National Permanent Building Society its successors and transferees registered proprietor or proprietors for the time being of the balance of the land comprised in Certificate of Title Volume 3782 Folio 756229 that she her heirs executors administrators and transferees shall not erect more than one residence on each of the said lots [lots 12, 13 and 14 on Plan of Subdivision Number 6331] and that any residence so erected shall be built of brick stone concrete or rough-cast at a cost of not less than Five hundred pounds.
The covenant created by instrument of transfer 904144 reads as follows (emphasis added):
AND the said Charlotte Madeline Norman DOTH HEREBY for herself, her heirs executors administrators and transferees COVENANT with the said The National Permanent Building Society its successors and transferees registered proprietor or proprietors for the time being of the balance of the land comprised in Certificate of Title Volume 37812 Folio 756229 that she her heirs executors administrators and transferees shall not erect more than one residence on the said Lot fifteen and that any residence so erected shall be built of brick stone concrete or rough-cast at a cost of not less than Five hundred pounds.
The 1980 Modification and the 1980 Covenant
As set out above, the 1919 Covenants were modified by the 1980 Modification to permit the re-subdivision of the Subject Land into no more than eight lots, with no more than one single storey separate or semi-detached dwelling on each lot, and the re-subdivision of Lots 14 and 15 into no more than five lots, with no more than one single storey separate or semi-detached dwelling on each lot.
The order modifying the 1919 Covenants was made by the consent of the persons appearing. The order reads:[25]
I DO ORDER that the covenants contained in instruments of transfer numbers 904143, 904142 and 904144 be modified insofar as they affect the lands being those parts of Lot 14, 15 and 16 on Plan of Subdivision 6331 remaining untransferred in Certificate of Title Volume 7923 Folio 140 so as to permit the said lands to be re-subdivided into not more than eight allotments units or lots together with accessory units, or accessory lots and common property and so as to permit a separate single storey dwelling house or a separate single storey semi-detached dwelling house to be erected and maintained on each of the allotments, lots or units in such re-subdivision AND that the covenants contained in instruments of transfer Numbers 904143 and 904144 be further modified so as to permit those parts of the said lots 14 and 15 now comprised in the said Certificate of Title to be re-subdivided into not more than five allotments or units or lots together with accessory units or accessory lots and a common property and so as to permit a separate single storey dwelling house or a separate single storey semi-detached dwelling house to be erected and maintained on each of the allotments, lots or units in such alternative re-subdivision provided that any dwelling house or residential unit so erected shall not be deemed to be of more than one storey only because garage and other like facilities appurtenant to it are located wholly below the level of the surface of the existing footpath of Wimba Avenue….
[25]A copy of the order can be found as part of exhibit SBE-9 to the First Edwards Affidavit.
The 1980 Covenant was created in favour of the then owners of 7 Wimba Avenue. The 1980 Covenant prevents any two storey dwelling house from being erected within ten feet of the southern boundary of the Subject Land.
The 1980 Covenant was created pursuant to a deed of covenant, entered into between Phyllis Madeline Joyce Norman (then registered proprietor of the Subject Land) and John Alexander Cruickshank and Ruth Ware Cruickshank (then registered proprietors of 7 Wimba Avenue).[26]
[26]First Edwards Affidavit, [19], and exhibit SBE-13.
The 1980 Covenant was entered into as a result of an agreement between Ms Norman and Mr and Mrs Cruickshank, whereby Mr and Mrs Cruickshank consented to the modification of the 1919 Covenants, on the condition that the 1980 Covenant burden part of the Subject Land.[27]
[27]First Edwards Affidavit, [20] and exhibit SBE-13.
The 1980 Covenant burdens only part of the Subject Land. It burdens the southern portion of the Subject Land, being that part of Lot 16 described in the Current Title.[28]
[28]First Edwards Affidavit, [22]–[24].
The 1980 Covenant relevantly provides:
that Miss Norman HEREBY COVENANTS for herself and her heirs, executors, administrators and transferees with the Cruickshanks and their heirs, executors and transferees being the registered proprietors for the time being of the other land[29]
1.THAT no two storey part of any dwelling house erected or to be erected on the land or any part of such dwelling house have more than two storeys shall be erected within ten feet of the southernmost boundary of the land.
2.THAT the purpose of this Deed of Covenant when any development of the land proceeds in the manner referred to in Clause one above then notwithstanding that garaging and other like facilities are located beneath any such dwelling house the same shall still be regarded as having only a single storey so long as the garaging and other like facilities are located wholly below the level of the surface of the land such level to be fixed and determined by the level of the surface of the existing footpath of Wimba Avenue.
3.THAT the benefit of this covenant shall attach to and run at law and in equity with the other land that the burden of this covenant shall attach to and run at law and in equity with the land in every part thereof and it is intended that this covenant shall appear as an encumbrance on the face of any Certificate of Title to issue from time to time in respect of the land.
[29]The “other land” being lot 17 and the land described in certificate of title volume 4250 folio 939 – that is, 7 Wimba Avenue.
Relevantly, the Plaintiff does not seek to modify the 1980 Covenant.
Beneficiaries of the 1919 Covenants
The 1919 Covenants describe the beneficiaries of the 1919 Covenants as (emphasis added):
The National Permanent Building Society its successors and transferees registered proprietor or proprietors for the time being of the balance of the land comprised in Certificate of Title Volume 3782 Folio 756229.
There is no building scheme in place. Accordingly, the land benefitted by the 1919 Covenants are those lots which remained untransferred out of the Parent Title as at the date that the 1919 Covenants were created. Those lots, which have the benefit of the 1919 Covenants, as modified by the 1980 Modification are set out in the below table (together, the ‘Benefitted Lots’):[30]
[30]First Edwards Affidavit, [17]. Refer also to the Parent Title (exhibit SBE-3).
Lot numbers Street Address Lot 17 on LP 6331 7 Wimba Avenue, Kew Lot 1 on LP 6331 31 Wimba Avenue, Kew Lot 2 on LP 6331 100 Park Hill Road, Kew Lot 4 on LP 6331 96 Park Hill Road, Kew Lot 1 on title plan 969110A 23 Wimba Avenue, Kew Lot 1 on title plan 965839 25 Wimba Avenue, Kew Lot 11 on LP 6331 17 Wimba Avenue, Kew Lot 1 on title plan 969112 19 Wimba Avenue, Kew Lot 1 on title plan 951029G 29 Wimba Avenue, Kew Lot 1 on title plan 969111 21 Wimba Avenue, Kew Lt 1 on title plan 951029G 27 Wimba Avenue, Kew Application of single dwelling covenants in the lots described in LP 6331.
Over 40% of the lots in LP 6331 (8 out of the 18 lots) were not burdened by a single dwelling covenant. After the 1980 Modification, more than half (11 out of the 18 lots) were not burdened by, or in effect not burdened by, a single dwelling covenant.[31]
[31]First Edwards Affidavit, [25] – [26]; exhibits SBE-15 to SBE-33.
The Plaintiff’s proposal and application
The Plaintiff seeks to vary the covenants as follows:
(a) the covenant described in Instrument of Transfer 904143 is amended by the insertion of the following words after the words “and that any residence so erected shall be built of brick stone concrete or rough-cast at a cost of not less than Five hundred pounds”:
Except that the said Lot 14 may be developed with one single two-storey building, housing six (6) dwellings, generally in accordance with the building envelopes shown on Lot 2 and generally in accordance with the plans for Apartment Block B, as shown in the attached plan (“Option A Proposed Multi Dwelling Development – Lots 1,2 and 3 of Title Plan 838216Q” prepared by Idle Architecture Studio dated 17 May 2021).
(b) the covenant described in Instrument of Transfer 904144 be amended by adding the following words after the words “and that any residence so erected shall be built of brick stone concrete or rough-cast at a cost of not less than Five hundred pounds”:
Except that the said Lot 15 may be developed with one single two-storey building, housing seven (7) dwellings, generally in accordance with the building envelopes shown on Lot 1 and generally in accordance with the plans for Apartment Block A, as shown in the attached plan (“Option A Proposed Multi Dwelling Development – Lots 1,2 and 3 of Title Plan 838216Q” prepared by Idle Architecture Studio dated 17 May 2021).
The reference to the ‘Option A Proposed Multi Dwelling Development – Lots 1, 2 and 3 of Title Plan 838216Q’ prepared by Idle Architecture Studio dated 17 May 2021 (‘Option A Plans’) is a reference to the Plaintiff’s proposal for the development of the Subject Land.
The Plaintiff does not apply to modify the covenant described in Instrument of Transfer 904142. Nor does it apply to modify the 1980 Covenant. Thus, the application is made on the basis that Lot 16 will only be developed with a two storey single dwelling and with the first level setback more than 10 feet from the southern boundary of the Subject Land.
The Plaintiff had sought, as the primary form of relief, a declaration pursuant to s 84(2) of the PLA that the Subject Land is not affected by the covenants described in Instruments of Transfer Nos. 904142, 904143 and 904144 (as modified by the 1980 Modification) on the ground that:
the burden of those covenants does not extend to bind any interest in the Subject Land beyond the interests of Charlotte Madeline Norman her heirs executors administrators and her direct transferees taking an interest in the Subject Land from Charlotte Madeline Norman (and does not bind the interests of the plaintiff as a person who was not a direct transferee of Charlotte Madeline Norman.
The Plaintiff advised the Court that it no longer pursued the application for the declaration and asked the Court to proceed on the basis that the three covenants burden the Subject Land. The Court has followed this approach. The only relief now sought is the application to modify the Relevant Covenants, in the manner described in paragraph 34 above.
Brief procedural history
On 21 October 2021, I made orders directing that notice of the application be given to the registered proprietors of the Benefitted Lots. Those orders were complied with,[32] and on 2 December 2021 I made a declaration pursuant to r 52.09(3) of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) that the Plaintiff had given notice as required by the Court.
[32]Second Edwards Affidavit, [5]–[6].
Following the giving of notice in accordance with the orders made on 21 October 2021, the Plaintiff’s solicitors received:[33]
[33]Second Edwards Affidavit, [8]–[10].
(a) an enquiry from Mr Alex Zhang’
(b) an objection from Xue Zhen Zhao, the registered proprietor of 29 Wimba Avenue, Kew’
(c) an email attaching a joint objection to the application on behalf of:
(i) Deborah Tulloch of 25 Wimba Avenue, Kew;
(ii) Jennifer O’Callaghan of 23 Wimba Avenue, Kew;
(iii) Michael and Rita Shearer of 21 Wimba Avenue, Kew;
(iv) Michael and Sali McFarlane of 19 Wimba Avenue, Kew;
(v) Sarah Kondogiannis of 17 Wimba Avenue, Kew; and
(vi) Mandy Zhang of 7 Wimba Avenue, Kew
(together with Xue Zhen Zhao, the ‘Objectors’).
On 2 December 2021, I made orders that the Objectors notify the Plaintiff’s solicitor by 16 December 2021 if they wished to be added as defendants to the proceeding and that the Plaintiff file an amended originating motion by 23 December 2021 naming those Objectors who gave such notification. Objectors who were joined as defendants were ordered to file notices of appearance by 17 January 2022. Other directions, for mediation and pre-trial steps, were made on 2 December 2021 as well, with the proceeding fixed for trial on 14 November 2022.
The Objectors listed in paragraph 40(c) above informed the Plaintiff’s solicitors that they wished to be joined as defendants to the proceeding, and an amended originating motion (‘AOM’) was filed by the Plaintiff on 20 December 2021 naming them as the First to Eighth Defendants. The notices of appearance were filed by the First to Eighth Defendants on 14 January 2022.
Xue Zhen Zhao did not file a notice of appearance and did not appear at any of the directions hearings held in this proceeding. Accordingly, Xue Zhen Zhao was not listed as a defendant in the AOM and is not a party to the proceeding.
On 28 March 2022, I made orders by consent between the parties permitting the First to Eighth Defendants to withdraw their appearances.[34]
[34]Orders pursuant to r 36.07 of the Rules were made on 11 April 2022 correcting a minor error in those orders, but nothing turns on this.
On 21 April 2022, I made orders vacating a number of the previously ordered pre-trial steps and vacating the trial date of 14 November 2022, and ordered that a copy of those orders be served on Xue Zhen Zhao. Instead, I fixed the proceeding for trial on 15 August 2022. The Plaintiff had sought these orders given that the application was no longer opposed.
On 11 August 2022, I made orders on the Court’s own motion, following a request from the Plaintiff, that the hearing listed for 15 August 2022 be vacated and that, subject to any further order of the Court, the application be determined on the papers.
Thus, in effect, the application to modify the Relevant Covenants is not opposed.
Evidence
Apart from the expert evidence relied upon, most of the relevant evidence has been summarised in the preceding section of this judgment.
Negri Report
General matters
Mr Negri prepared his report in accordance with the instructions given to him by the Plaintiff’s solicitors, which included an instruction that notwithstanding the application for the declaration, he should prepare his evidence on the assumption that the original single dwelling covenants, as modified, burden the Subject Land.[35]
[35]Negri Report, [13].
I note that this is consistent with the manner in which the Court has now been urged to approach the application.
The current state of the Subject Land is that it contains a centrally located double storey dwelling with a driveway providing vehicle access at the southern end of the front of the property. There is an established garden, which including some mature native and exotic trees, with a swimming pool and cabana located on the northern part of the Subject Land.[36]
[36]Negri Report, [50]-[57].
Mr Negri describes the Subject Land as being located within an established residential precinct, with the predominant form of development being single detached double storey housing on reasonably large well landscaped allotments. There are some properties at each of the southern and northern ends of Wimba Avenue that have been developed with multiple dwellings.[37]
[37]Negri Report, [58]-[61].
The only property adjoining the Subject Land which has the benefit of the covenants is 7 Wimba Avenue.[38] It adjoins the southern boundary of the Subject Land and is developed with a double storey dwelling that has its side wall set reasonably close to that boundary. A tennis court and swimming pool are located within its rear yard, and the swimming pool and a covered deck are located close to the boundary shared with the Subject Land.[39] The other properties adjoining the Subject Land all contain single dwellings, mostly double storey, and the properties on the opposite side of Wimba Avenue, which do not have the benefit of the covenants, are also single detached dwellings.[40]
[38]Negri Report, Figure 2.6.
[39]Negri Report, [70].
[40]Negri Report, [62]-[71].
Plaintiff’s proposed development and consideration of other proposals
Mr Negri describes the proposed development under Option A in the following way:[41]
[41]Negri Report, [101]-[105].
(a) the Subject Land would be subdivided into 3 allotments;
(b) Allotment 1 is to be located across the northern part of the Subject Land. It is to have an area of 1620 m2. It is to accommodate a double storey building over a basement that is to be setback a minimum of 17.655 m allowing for the retention of two mature trees in this front setback area. It is to contain seven apartments;
(c) Allotment 2 is to be located across the middle part of the Subject Land. It is to have an area of 1175 m2. It is to accommodate a double storey building over a basement. It is to contain six dwellings; and
(d) Allotment 3 is to be located across the southern part of the Subject Land. It is to have an area of 810 m2. It is to accommodate a double storey building over a basement, containing one dwelling. The double storey component of this dwelling is to be setback a minimum of 3.050 m (10 feet) from the southern boundary. Provided the basement is designed to be located wholly below the level of the surface of the land (determined by the level of the existing footpath of Wimba Avenue), the obligation in the 1980 Covenant will be met.
Mr Negri was provided with two other sets of plans prepared by Idle Architecture, referred to as Options B and C, which describe possible development scenarios that are said to accord with the covenants that apply to the Subject Land.[42] In effect, these provide a counterfactual to the development proposal preferred by the Plaintiff, being Option A, which obviously requires a modification of the Relevant Covenants in the manner sought.
[42]Negri Report, [10].
Option B provides for the construction of three double storey dwellings on the Subject Land, which is consistent with the 1919 Covenants, with the height of the building within 10 feet of the boundary with 7 Wimba Avenue not exceeding a single storey, consistent with the 1980 Covenant.[43]
[43]Negri Report, [39]–[45].
Option C provides for the subdivision of the Subject Land into eight allotments and the construction of a single storey dwelling on each proposed lots. Consistent with the 1980 Modification, the whole of the Subject Land is subdivided into eight allotments, the former Lots 14 and 15 are subdivided into five allotments, and a separate single storey semi-detached dwelling house is erected on each allotment. This is also consistent with the 1980 Covenant.[44]
[44]Negri Report, [46]–[49].
Mr Negri opines that the purpose of the 1919 Covenants was to guide a residential outcome characterised by single dwellings, on comparatively large allotments, constructed of durable high-quality materials, to a specific value.[45] He opines that the purpose of the 1980 Modification was to permit an alternative, being the subdivision of the Subject Land into no more than eight allotments (with no more than five of them being on lots 14 and 15) containing a single storey dwelling or semi-detached dwelling on each.[46] The purpose of the 1980 Covenant, according to Mr Negri, is to control the siting of a double storey dwelling on the southern part of the Subject Land so as to manage amenity implications.[47]
[45]Negri Report, [110].
[46]Negri Report, [117].
[47]Negri Report, [120].
Mr Negri considers that the 1980 Modification was an addition to, rather than a replacement of, the 1919 Covenants. He states that the 1980 Modification permits an increased dwelling density of approximately one dwelling per 450m2, with the dwellings being single storey.[48]
[48]Negri Report, [113], [115].
By considering the surrounding neighbourhood and the Subject Land, Mr Negri concludes that:
(a) the changes to the Subject Land since 1919 do not render the modified covenants obsolete;[49]
[49]Negri Report, [144].
(b) the changes to the neighbourhood since 1919 do not render the modified covenants obsolete;[50]
[50]Negri Report, [148].
(c) there are no material circumstances which have arisen since 1919 which render the modified covenants obsolete;[51]
[51]Negri Report, [150].
(d) the Subject Land is capable of being used without modification to the 1919 Covenants, the 1980 Modification, and the 1980 Covenant. In this regard:[52]
[52]Negri Report, [151]–[157].
(vii) the Option B Plan depicts a form of development that accords with the 1919 Covenants. That use and development would be similar to the use and development of other properties within the neighbourhood; and
(viii) the Option C Plan depicts an alternative form of use and development that would be permitted by the 1980 Modification. It would be similar, although at a lesser density, to the townhouse developments on properties at the southern end of the neighbourhood (which are within the Parent Title).
(e) further modification of the Relevant Covenants as sought by the Plaintiff, with the development proposal being that contained in the Option A Plan, would be respectful of the streetscape and character of the neighbourhood in that:[53]
[53]Negri Report, [160].
(i) the height of buildings would be similar to the height of other buildings in the street;
(ii) the spacing of buildings would generally follow the spacing and built form grain of other buildings in the street;
(iii) the setback of the buildings to the street frontages would enable the retention of large canopy trees and would offer further opportunity for landscaping to respond to garden character elements of the neighbourhood;
(iv) the number and spacing of driveways would follow the pattern of subdivision and driveway placement observed elsewhere in the street;
(v) the front fencing treatment would be compatible with the front fencing treatment evident in Wimba Avenue; and
(vi) the buildings would front Wimba Avenue in a manner similar to existing dwellings in the street.
Actual benefits of the 1919 Covenants and the 1980 Modification for beneficiaries
Having opined on the purpose of the 1919 Covenants and the 1980 Modification, Mr Negri opines that the actual benefit to beneficiaries that arises from these a form of amenity protection by managing land use conflict and limiting the number of dwellings on the Subject Land, by ensuring control over:[54]
[54]Negri Report, [166]–[167].
(a) the use of the Subject Land for residential purposes;
(b) the number of dwellings that can be constructed on the Subject Land; and
(c) the height of any dwelling where more than one dwelling is to be erected on each of the new lots.
Mr Negri also considers that there are benefits arising from the 1919 Covenants and the 1980 Modification from a neighbourhood character perspective, however this is compromised by the 1980 Modification in that it:[55]
(a) permits a development outcome in the form of single storey semi-detached housing that departs from the predominant characteristic of single detached houses on comparatively large lots; and
(b) does not maintain the restriction in relation to building materials.
[55]Negri Report, [168].
According to Mr Negri, the benefit of the minimum construction cost requirement is diminished given the passage of time.[56]
[56]Negri Report, [169].
Mr Negri says that while the 1980 Modification introduces a limit on building height and dwelling type, that benefit is not absolute and in the control of beneficiaries as it only applies where the land owner elects to subdivide the Subject Land into eight allotments and constructs a dwelling on each allotment.[57]
[57]Negri Report, [170].
Further, the modified covenants do not include any control in relation to building width and form, building setbacks and siting, site coverage, architectural style, fencing, tree removal and landscaping.[58]
[58]Negri Report, [171].
The benefit of the 1919 Covenants and the 1980 Modification derive from the density limit, to the extent that it manages character consequences, regulates traffic and parking and limits general activity.[59]
[59]Negri Report, [172].
The benefit to the only beneficiary with an immediate interface to the Subject Land, being 7 Wimba Avenue, is that either only one residence will be constructed on the property adjoining its northern boundary or any multiple dwelling development is limited to single storey. According to Mr Negri, the 1980 Covenant provides 7 Wimba Avenue with the additional benefit of ensuring that any double-storey building will be setback a minimum of 10 feet from its northern boundary.[60]
Will the modification of the 1919 Covenants (as already modified by the 1980 Covenant) cause substantial injury to the beneficiaries of the covenants?
[60]Negri Report, [173]–[174].
Mr Negri states that the proposed modification would allow for three detached buildings to be erected on the Subject Land (as shown in the Option A Plan) at a similar scale and arrangement as three single detached dwellings constructed to accord with the 1919 Covenants (as depicted in the Option B Plan). Therefore, he says:[61]
[61]Negri Report, [175], [180]-[189].
(a) the building form and arrangement will present three double-storey detached buildings to Wimba Avenue, which is similar to the building form that is possible under the 1919 Covenants;
(b) the buildings will be setback from property frontages to allow for the retention of canopy trees and to provide further landscaping opportunities;
(c) the buildings will be spaced in a manner that is respectful of the subdivision pattern, building spacing and urban grain of buildings in Wimba Avenue;
(d) the proposed front fencing will mark the frontages in a manner similar to that of other properties in Wimba Avenue;
(e) three driveways, spaced in an arrangement similar to other driveways in Wimba Avenue, will provide vehicle access to the buildings;
(f) the modification will allow two of the three detached buildings to accommodate multiple dwellings rather than a single residence. Given that the benefitting properties are separated from these apartment buildings, there will be no injury related to immediate amenity consequences such as overlooking and general activity/noise caused by this difference;
(g) the containment of the apartments within detached buildings will manage any neighbourhood character injury caused by the difference. The buildings will appear as three detached buildings, each two storeys in height, that are sited and arranged to provide a good streetscape fit; and
(h) there will be a difference in traffic movements and parking requirements for a development accommodating 14 dwellings rather than three dwellings or eight dwellings. The difference in traffic, experienced on a north-south road providing connection from Cotham Road to Parkhill Road and serving an established urban area, will be minor. The difference in parking can be accommodated within the proposed basement car parking areas.
Insofar as 7 Wimba Avenue is specifically concerned, Mr Negri opines that:[62]
[62]Negri Report, [176]–[179].
(a) the Option A Plan locates one double storey detached dwelling on the southern side of the Subject Land;
(b) this produces an interface to 7 Wimba Avenue that is no different to the outcome that could be achieved without modification to the covenants, noting that the 1919 Covenants do not limit the height of a single dwelling on the former Lot 16;
(c) given that the form of development at the interface with 7 Wimba Avenue is no different than that which could be achieved currently, the proposed modification will not cause injury to the owners of 7 Wimba Avenue in terms of immediate amenity consequences such as overlooking, overshadowing, visual impact, daylight impact and increased activity and noise at the immediate interface.
Mr Negri concludes that comparing the land use and built form outcome that is possible under the current restriction to the outcome possible following the proposed modification, the modification will not substantially injure persons entitled to the benefit of the restrictions.[63]
[63]Negri Report, [190].
Applicable principles
As noted above, this application is made under s 84(1)(c) of the PLA. That section relevantly provides that the Court has the power, on application of any person interested in any land affected by any restriction under a covenant, to order wholly or partially to discharge or modify any such restriction, upon being satisfied that ’the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction’.
Whether the modification of the covenant would ‘cause substantial injury’ is a question of fact requiring consideration of the purpose of the covenant and benefits originally and presently conferred by the covenant, against the impact of the proposed modification upon those benefits.[64] As Gillard J put it in Re Cook,[65] in respect of the assessment of ‘substantial injury’ under s 84(1)(c):
Such injury can only be properly assessed by a comparison between the benefits intended to be conferred and actually conferred by the covenant initially on the persons entitled thereto and the resultant benefits if any remaining to such persons after the covenant has been modified. If from the evidence it appears that the difference between the two will not be substantial, then the applicant will have established a case for the exercise of the court’s discretion under paragraph (c). In order to make this comparison it is proposed to consider what benefits the covenant over the subject land may have conferred upon the persons entitled thereto, and then to assess whether the modification of such covenant would or would not substantially diminish the benefit so discovered.[66]
[64]Re Alexandra [1980] VR 55, 60; Vrakas [35]; Suhr [41].
[65][1964] VR 808 (‘Re Cook’).
[66]Re Cook, 810.
The injury must be ‘real’, in the sense that it is not unsubstantial or fanciful, in order to be ‘substantial’.[67] A wide variety of matters including noise, privacy, accessibility of properties and other matters of amenity may be considered in appropriate cases.[68] As is suggested in the passage cited above from Re Cook, it is necessary to show that the ‘substantial injury’ are properly related to the benefits afforded by the covenants, in the sense that the ‘substantial injury’ derives from the proposed modification.[69]
[67]Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) [10] (‘Re Stani’); Vrakas v Registrar of Titles [2008] VSC 281, [36] (‘Vrakas’).
[68]See generally Re Robinson [1972] VR 278, 283.
[69]Re Cook, 810.
Further, the Court may consider the ‘precedential’ effect of a proposed modification leading to similar applications within the estate or neighbourhood, resulting in a more widespread detrimental change.[70]
[70]Re Stani, 9–10; Vrakas [32].
Plaintiff’s submissions
The Plaintiff submits that the proposed modification of the Relevant Covenants does not cause substantial injury to the benefitting land and that the application should be allowed, there being no reason justifying the unfavourable exercise of the Court’s residual discretion. Further, the application is not opposed by the beneficiaries of the Relevant Covenants.
The primary submissions relied upon by the Plaintiff in this regard are:
(a) the minimum construction cost contained in the 1919 Covenants has been rendered otiose with the passing of time;
(b) the purposes of the 1919 Covenants as set out by Mr Negri have been compromised by the 1980 Modification;
(c) the purpose of the 1919 Covenants has also been compromised by the fact that more than half of the lots in LP 6331 are now not, or are now not in effect, burdened by a single dwelling covenant;
(d) the proposed modification does not set a precedent, as:
(vii) the facts and circumstances of the Subject Land are unique;
(viii) the 1919 Covenants have already been modified;
(ix)the Subject Land consists of, in effect, three lots; and
(x) these facts do not apply to any of the other lots in LP 6331.
(e) the proposed modification has been carefully prepared to ensure that no beneficiary will suffer a substantial injury in comparison to the development currently permitted under the 1919 Covenants as modified pursuant to the 1980 Modification:
(i) the proposed modification to the Relevant Covenants permits the Subject Land to be developed ‘generally in accordance’ with the Option A Plan. It does not permit other forms of development;
(ii) the proposed development of Lot 16 satisfies the conditions of the 1980 Covenant and is similar to what could be constructed under the single dwelling covenant created in Instrument of Transfer 0904144;
(iii) the two apartment buildings do not abut 7 Wimba Avenue, and the owners of that land, who are beneficiaries of the 1919 Covenants and the 1980 Covenant, will not suffer any injury related to the immediate amenity consequences such as overlooking and general activity/noise caused as a result of the increased density of the apartment buildings on Lots 14 and 15. They will be shielded from these impacts by the intervening built form of the two storey single dwelling that is proposed on Lot 16;
(iv) other beneficiaries of the Relevant Covenants are some distance from and do not have a direct interface with the Subject Land. Apart from 7 Wimba Avenue, there is no land to the south which has the benefit of the 1919 Covenants as modified by the 1980 Modification. To the north, the nearest benefitted land is 17 Wimba Avenue and does not have a direct interface with the Subject Land. The owners of 17 Wimba Avenue will not suffer any injury related to the immediate amenity consequences such as overlooking and general activity/noise caused as a result of the increased density of the apartment buildings on Lots 14 and 15. They will be shielded from these impacts by the intervening built form of the dwellings at 13 and 15 Wimba Avenue;
(v) the Option A Plan shows setbacks from Wimba Avenue which will allow for the retention of canopy trees and opportunity for landscaping, whereas the present covenants do not seek to control the setback from Wimba Avenue;
(vi) the Option A Plan shows spacing between the three buildings, which is respectful of the subdivision pattern, whereas the 1919 Covenants do not regulate this; and
(vii) any difference in traffic movements will be minor.
Consideration
To grant the application, I must be satisfied that the proposed modifications will not cause substantial injury to the beneficiaries of the Relevant Covenants and that there is no reason for the Court not to exercise its discretion to grant the application.
I have given very careful thought to this application,[71] particularly given that the 1919 Covenants helped create a neighbourhood of single dwellings on quite large allotments, and the Plaintiff’s proposal would allow up to 14 dwellings on the Subject Land. In the circumstances of this case, to describe the application in these terms is to do a great disservice, as:
(a) first, there will not be 14 separate buildings – there will be three. In terms of built form, that is no different to what is permitted under the 1919 Covenants; and
(b) second, and most importantly, that description does not take into account the effect of the 1980 Modification.
[71]Including by conducting a ‘view’ of the Subject Land and Wimba Avenue Kew, on 1 October 2022, so as to see the Subject Land and the immediate neighbourhood for myself. Such a course is not uncommon when considering applications to modify or discharge a restrictive covenant.
A significantly different development of the Subject Land is permitted by the 1980 Modification when compared to the 1919 Covenants. While it is the 1919 Covenants which require modification if the Plaintiff is to proceed with its proposed development, such that the authorities require a comparison between the benefits conferred under the 1919 Covenants and the situation obtaining for beneficiaries if the proposed modification is permitted, the presence of the 1980 Modification means that in effect the real comparison is between a development in accordance with the 1980 Modification and the proposed development in the form of the Option A Plan.
I accept Mr Negri’s evidence and the opinion contained in his report, and I accept the Plaintiff’s submissions.
In particular, I accept that the only benefitting land which immediately abuts the Subject Land, being 7 Wimba Avenue, will not suffer substantial injury as a result of the proposed modification of the 1919 Covenants in the manner sought, for the reasons given by Mr Negri. Further, the proposed development is also in accordance with the 1980 Covenant, which covenant provides additional protection to 7 Wimba Avenue, insofar as amenity close to the boundary with the Subject Land is concerned, by providing for only a single storey within 10 feet of that boundary. When viewing the Subject Land and the immediate neighbourhood, I noticed that Wimba Avenue slopes downward from Cotham Road (ie south of the Subject Land) to Parkhill Road, and that the Subject Land is already lower than 7 Wimba Avenue such that the natural environment also provides some protection of amenity in that regard.
I also accept that the other land benefitting from the 1919 Covenants will not suffer substantial injury as a result of the proposed modification of the 1919 Covenants in the manner sought for the reasons given by Mr Negri.
In my view, three double-storey buildings on the Subject Land, even though two of them will be apartment buildings, is more in keeping with at least some of the benefits of the 1919 Covenants than eight separate single storey detached or semi-detached dwellings (as permitted by the 1980 Modification) would be, especially in respect of built form. Apart from a small number of multi-unit developments at each of the northern and southern ends of Wimba Avenue, most of the dwellings in Wimba Avenue are double storey and have a large built form.
Hence, I am satisfied that the proposed modification of the 1919 Covenants will not cause substantial injury to the owners of the Benefitted Lots.
The absence of opposition does not determine the application: the PLA clearly requires that the Court must be satisfied that the statutory test of no substantial injury has been met. However, it is permissible to take the lack of opposition into account when considering the exercise of the Court’s discretion to allow the application. In circumstances where a number of beneficiaries, including the owner of 7 Wimba Avenue, who had originally objected to the application and later elected to become defendants in this proceeding with legal representation, it is reasonable to infer that they had carefully considered the application and its effect on them before later withdrawing from the proceeding.
I am also satisfied that there is no precedential effect in granting the application, primarily due to the presence of the 1980 Modification and what is permitted by that modification.
Having determined the question of substantial injury, there are no discretionary factors which warrant refusing the application.
Conclusion
Accordingly, the application will be granted.
The Plaintiff is directed to provide a draft form of orders to my Chambers to give effect to this judgment.
SCHEDULE OF PARTIES
| S ECI 2021 03239 | |
| BETWEEN: | |
| BRILLAN PTY LTD | Plaintiff |
| - v - | |
| DEBORAH TULLOCH | First Defendant |
| JENNIFER O’CALLAGHAN | Second Defendant |
| MICHAEL SHEARER | Third Defendant |
| RITA SHEARER | Fourth Defendant |
| MICHAEL MCFARLANE | Fifth Defendant |
| SALI MCFARLANE | Sixth Defendant |
| SARAH KONDOGIANNIS | Seventh Defendant |
| MANDY ZHANG | Eighth Defendant |
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