Foudoulis v O'Donnell

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE

Not Restricted

COMMON LAW DIVISION
PROPERTY LIST

S CI 2017 00193

IN THE MATTER of an application pursuant to s 84 of the Property Law Act 1958 for the modification of a restrictive covenant

– and –

IN THE MATTER of an application for the modification of the restriction arising under a covenant in a transfer of land registered No. 1073692 affecting the land at 6 Wilson Boulevard, Reservoir being the land in folio of the Register volume 4651 folio 188

BETWEEN:

PETER FOUDOULIS	Plaintiff
- and -
KEVIN HUGH O’DONNELL and DIMMITY JANE PUSPA O’DONNELL	Defendants

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JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	19, 20 February 2018
DATE OF JUDGMENT:	8 May 2020
CASE MAY BE CITED AS:	Foudoulis v O’Donnell
MEDIUM NEUTRAL CITATION:	[2020] VSC 248

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REAL PROPERTY ― Restrictive covenant on title ― ‘Not more than one dwelling house shall be erected’ ― Proposal to build two additional double storey dwellings at rear of existing single storey dwelling ― Application to modify covenant to enable proposed development ― Applicant’s statutory burden of proving modification will not substantially injure the persons entitled to the benefit of the restriction ― Court’s approach to assessment of substantial injury ― Covenant not obsolete ― Relevance of instances of re-subdivisions and numerous dwellings within other Lots in neighbourhood ― Precedential effect of modification ― Application refused ― Property Law Act 1958 (Vic) s 84(1)(c).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Lloyd	Aughtersons
For the Defendants	Mr M Townsend	MPW Lawyers

HIS HONOUR:

The suburb of Reservoir is about 12 kilometres north of Melbourne’s central business district. In this Court’s decision in Stanhill Pty Ltd v Jackson[1] it is reported that the subdivision of land in Reservoir occurred gradually after a purchase, in the year 1919, of 1119 acres of land by two entrepreneurs who gradually subdivided the land into more than 3000 Lots. Initially, allotments of residential land were transferred directly out of the original title. Later on, out of the original title, larger Lots were transferred from which there were further subdivisions into residential Lots.
[1](2005) 12 VR 224, [4] (Morris J).

In this case, the plaintiff Peter Foudoulis is the registered proprietor of the land at 6 Wilson Boulevard in Reservoir. It is a rectangular shaped Lot having an area of about 892 square metres.[2] There is built on it a single storey brick veneer dwelling with a tiled roof. The dwelling has a front yard and back yard and a driveway on its northern boundary that leads to a garage at the rear of the property.
[2]Frontage of 19.8 m; variable depth of 43.9 m to 46.2 m.

By external appearance, the plaintiff’s house and land is in good condition. From a walking and driving view that I have taken of this pleasant neighbourhood, his home resembles many of the established homes in this part of suburbia: unostentatious; a good sized block; single storey; pitched roof; wide nature strip; low front fence; exposed front garden; front veranda; good size front and back yard; and a length of driveway along a side boundary leading to the back of the property.

Wilson Boulevard Road is quite wide at sixty feet. On the west side of Wilson Boulevard that is opposite to the plaintiff’s land, there are some departures in housing character and density in the form of multi-unit developments. Those developments are predominantly on some very large blocks that ‘back on’ to a drainage reserve, an expression which I think belies what I have seen to be an open parkland area with pedestrian recreational walkways near the banks of Edgars Creek. Apart from those instances on the west side of Wilson Boulevard, to my perception based on a walking and driving view I have taken of the area, the plaintiff’s property is otherwise part of a neighbourhood that predominantly has an established look and feel of uncongested living in a rather quiet area. I shall elaborate graphically about the characteristics of the neighbourhood later in his judgment with the aid of annexures.

In the subdivision that formed this neighbourhood within greater Reservoir, the plaintiff’s land is identified as Lot 4419 on Plan of Subdivision 8469 which was approved in October 1921. His land is burdened by a restrictive covenant that was created in a transfer of land to a predecessor in title on 23 October 1922. The covenant states where relevant that ‘… no shops, laundries, factories or works shall be erected on the said lot … and not more than one dwelling house shall be erected on any one lot…’.

That covenant was made for the benefit of land that, as at the date of the original transfer of the plaintiff’s land in 1922, remained as un-transferred out of the parent title. The title searches in evidence show the plaintiff’s land was the 582^nd Lot transferred out. After that transfer, another 2847 Lots were transferred out of the parent title which therefore had the benefit of the single dwelling covenant burdening the plaintiff’s land. Several hundred of those original (benefitting) Lots then came to be further subdivided, thereby creating more Lots having the benefit of the covenant. In total about 3000 Lots came to have the benefit of the single dwelling covenant. But, to put that figure in context, many of those benefitting Lots are quite a distance from the plaintiff’s land.

The plaintiff became registered proprietor of 6 Wilson Boulevard on 16 May 2015. There can be no suggestion he purchased the land without notice of the burdens of the restrictive covenant.[3] Although the restrictive covenant was made as between the original contracting parties almost a century ago, under equitable doctrine created in 1848 the burden and the benefit of the covenant runs with the land so that the covenant remains equally enforceable in property law by and against successors in title.[4] Mr Foudoulis is bound by the covenant.
[3]Recorded on the folio of the Register under s 88 of the Transfer of Land Act.
[4]See the seminal decision in Tulk v Moxhay (1848) 2 Ph 774; 41 ER 1143.

According to concept plans in evidence, the plaintiff proposes to retain his existing home and (subject to obtaining a planning permit) to construct two new semi‑detached dwellings behind it, in what is presently the backyard. Assuming development plans are eventually made and approved by the responsible authority each dwelling is to be two storeys high with two bedrooms and a pitched roof. The concept plans also show three single car garages to be built, one of which will presumably be for the existing dwelling. The garages are to be accessed by the existing street crossover and an enlarged driveway.

On my examination of the materials in evidence (to which I will come to in detail later), if permitted, this will not be the first instance in the area of multi dwellings on a single Lot. But, more pertinently, it will be the first instance of its kind: two double storey dwellings constructed behind a single dwelling on an ‘ordinary’ house block.

There are building elevations and computer-generated images in evidence. They show, I perceive, a substantial change to the build form and density of the plaintiff’s land. The upper section will be visible at street level even though situated behind the existing home. The development will take up a good part of the existing backyard. At its closest, the two additional dwellings will be 3955mm from the rear boundary. The two dwellings will be conspicuous to the backyards of surrounding residential land which has the benefit of the covenant. I shall refer to some drawings and images later in this judgment.

The proposed development would obviously contravene the covenant. To overcome the restriction, the plaintiff has applied to the Supreme Court under s 84(1) of the Property Law Act to have the covenant modified so that it reads ‘not more than three dwelling houses shall be erected’. Section 84(1) of the Act provides where relevant –

(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 … upon being satisfied –
(a)that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Court deems material the restriction ought to be deemed obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or
(b)…
(c)that the proposed discharge or modification will not substantially injury the persons entitled to the benefit of the restriction;
…

An application for covenant modification is a lawsuit. The onus of proof is on an applicant to make out on the evidence a statutory ground for modification of a covenant. The application is not an administrative type application for a permit concerning the use of land, nor does it involve the Court ‘approving’ the proposed development.

The plaintiff’s originating motion did not stipulate on which of the grounds in s 84(1) he relied. However, an affidavit filed with the motion sworn by his solicitor Glen Egerton states:

It is the plaintiff’s case that the proposed of the Covenant will not substantially injure the persons entitled to its benefit, having regard to the expert evidence in the Easton report of the benefits originally intended to be conferred and in fact conferred by the Covenant and the benefits that will remain if the Court grants this application.[5]

[5]Affidavit sworn 19 January 2017, paragraph 9.

The reference to ‘substantially injure’ is the language of s 84(1)(c). The reference to the Easton Report means a planning report dated December 2016 prepared for the plaintiff by Robert Walter Easton, a town planning consultant.[6] Mr Easton frequently makes reports in these cases. His credentials as an expert in the field cannot be questioned. But the opinion to be given on the ultimate legal question affecting the exercise of the power to modify the covenant is one for the Court on the evidence. Curiously, Mr Easton’s planning report and his covering affidavit also looks to the grounds in s 84(1)(a).[7] But the written and spoken submissions made by the plaintiff’s counsel to propound the case at trial were confined to the ground in s 84(1)(c).
[6]Court exhibit P2
[7]See paragraph 11 of his affidavit sworn 25 February 2017, and paragraph 11.1 of his report.

The plaintiff’s selection of s 84(1)(c) as the statutory ground is a most important delineation for analytic purposes. It informs the issue in this case of ‘substantial injury’ and puts in proper context the extensive factual evidence in this case. The plaintiff’s case was that this neighbourhood in Reservoir had changed in character ‘more than a little’ since the creation of the covenant. It was put that modifying the covenant to allow three dwellings on the plaintiff’s land would not substantially injure the beneficiaries of the covenant because the modification would be just another example of multi dwellings on land or an alteration of housing density that has already occurred in the neighbourhood, and therefore there would be no harm in allowing the modification as sought here.

The objectors

As a first procedural step before service of the originating motion, in order to identify the land having the benefit of the covenant the Court examined the plan of subdivision and acted on the historical title searches conducted by Mr Easton in his report. In accordance with the established practice in these applications, the Court identified the Lots in the vicinity of the plaintiff’s land that would, because of their proximity, be most likely to be affected directly by the application rather than the outer lying Lots in the subdivision. Orders were made requiring direct postal service on 29 Lots that surrounded the plaintiff’s land at 6 Wilson Boulevard. In aid of neighbourhood awareness, I also ordered that an enlarged notice of the application be placed at the front of the plaintiff’s premises, visible to people passing by.

There were six objectors to the application. Kevin and Dimmity O’Donnell live at 107 Broadhurst Avenue. That is about 60 metres away near a T-intersection with Wilson Boulevard. Vicky and John Kiriazidis live at 13 O’Donnell Street. That is about 30 metres away on land around the corner, but their backyard is parallel and only a little over a Lot away from the plaintiff’s rear boundary. Michele and Maria Daniele live immediately next door to the plaintiff’s place on the driveway side at 8 Wilson Boulevard.

The number of objectors is immaterial. The burden of proof on the plaintiff under s 84(1) will be the same whether there be one objector or an army of objectors. Indeed, these applications have been refused by the Court where there are no objectors at all.

The O’Donnell’s took the responsibility as the leading objectors and witnesses, and were therefore joined as the proper defendants. Vicky Kiriazidis was active as a witness at the trial. The Danieles are elderly people and for that reason were not disposed to be active participants in Court. The Court received into evidence a letter from then stating their objection to the application.[8]
[8]Court exhibit D6.

The sworn basis of the O’Donnell’s objection was stated to be, amongst other things:[9]

3.When we purchased in the area we believed it to be a quiet, family friendly neighbourhood with low density living and a limited amount of traffic. The area consists largely of established lots with single dwellings on them.
4.At the time of purchasing our property, we were aware of a covenant encumbering our property which contained a single dwelling restriction and we understood that similar single dwelling covenants existed over most, if not all, properties in the area. The Plaintiff’s property is subject to a similar covenant (the Covenant). In our view the network of covenants in the neighbourhood has helped produce an estate that is overwhelmingly dominated by good quality detached single dwellings in a low density housing environment with plenty of space for gardens in each allotment. The result is a spacious living environment with the consequent benefits this brings for all residents of the estate.

[9]Joint affidavit sworn 30 August 2017.

The O’Donnells prepared an extensive, meticulous and dispassionate research paper all based on proper sources in support of their objection which responded directly to the facts and the opinion in Mr Easton’s expert report. They methodically engaged with his report on the facts concerning the re-subdivisions and developments within the neighbourhood ― street by street and Lot by Lot ― to contend that on a refined analysis the changes that have occurred have not been of a degree to make for a conclusion that the predominant single dwelling character of the neighbourhood had been eroded.

The O’Donnells accept, as they must, that modifications have occurred in the neighbourhood in the form of re‑subdivisions of a large Lot into two or more Lots, and, there are some multi-unit developments on blocks on the west side of Wilson Boulevard. But, they say that the resultant re-subdivided Lots themselves are still good-sized housing Lots (of around 500 square metres) and, more importantly, they have single dwellings on them. Their central contention is that whatever the changes to date, the Court should uphold the utility and purpose of a single dwelling covenant and not let the changes in the neighbourhood go any further lest the predominantly single dwelling character of their neighbourhood does become spoiled or ruined by more of these applications, which they apprehend is bound to happen. This is known as the ‘thin end of the wedge’ or precedential effect of a modification, a phenomenon which legal authorities accept as being ‘substantial injury’ for the purposes of s 84(1)(c) especially in neighbourhoods with a cohesive network of single dwelling covenants. The O’Donnells say:[10]

We maintain that the restrictive covenant has great value in protecting the character of the neighbourhood, which remains predominantly comprised of single dwelling houses in a low‑density area with limited traffic. We are concerned that, if allowed, the Plaintiff’s proposed modification of this Covenant will compromise this amenity and substantially injure beneficiaries of the Covenant. In addition, this modification to the Covenant, if granted would have precedential value in encouraging or making it easier for others to modify or remove similar covenants over their properties.

[10]Ibid.

The objectors Vicky and John Kiriazidis objected on similar and additional grounds.[11] They say that the neighbourhood is mostly large blocks with single dwellings on them; the character of the neighbourhood gives it the benefit of providing a quiet, family friendly environment with low‑density living and a limited amount of traffic; and that to allow the modification in this case would allow or encourage the possibility of other medium density developments such as townhouses in the area. In support of that apprehension, they exhibit a standard form letter addressed to ‘Dear Home Owner’ which they in the post from the ‘Acquisitions Manager’ of a firm describing itself as ‘one of Victoria’s largest suburban property development firms’. In substance, that letter states that the developer ‘is now looking at certain pockets of Melbourne for townhouse development opportunities’ and ‘based on our research we are interested in speaking with you regarding the potential purchase of your property as you have fit (sic) a specific criteria’. The letter also says that the developer will ‘pay a premium for your property in return for a longer settlement (approx. 12 months), as it gives us the opportunity to obtain a permit to develop your land before we settle with you’.[12]
[11]See the affidavit of Vicky Kiriazidis sworn 30 September 2017.
[12]Ibid, exhibit VK-1.

It may be supposed this letter was sent to others in the neighbourhood. As counsel for the objectors put it, ‘developers are circling’ and ‘will be interested in this case’. I am able to say this Court has experienced over recent years more than a few applications to modify single dwelling covenants in other neighbourhoods in Reservoir.

As the immediate neighbours to the plaintiff, the Danieles letter of objection expressed their concern that the development would impact on the ’quiet and safe’ area and ‘be out of keeping with the character of the area and the adjacent properties’.[13]
[13]Court exhibit D6.

Unlike the O’Donnells, the Kiriazidis’ and the Danieles have additional grounds for resistance because they are physically so close to the plaintiff’s land. They are in a position to be heard to say they will suffer tangible injury in having two double story dwellings of a substantial build near a boundary interfering with the privacy and the use and enjoyment of their back yard.

The combined outcome of the written engagement between Mr Easton and the O’Donnells was a substantial body of detailed information about re-subdivisions in the neighbourhood and the housing density. This made fact finding extensive, but not problematic, because the plaintiff’s case did not ultimately take issue with the content of the O’Donnell’s response on the facts. Thus, this judgment is largely about the opinion to be drawn by the Court from the facts about the character of the neighbourhood, much aided by a walking and driving view of the neighbourhood that I took after the close of the case, as well as visiting the plaintiff’s backyard and the backyard of the Danieles and the Kiriazidis’.

The issue

The plaintiff’s case at trial and the testing of the objectors’ evidence was on a single thematic track. The case sought to reiterate that which was demonstrable: multi-unit development has already occurred on land in the neighbourhood as had re-subdivisions of some large Lots into smaller Lots. On that basis, came the ultimate contention that such changes had already altered the neighbourhood character and that the plaintiff’s application should be seen as just another instance. So, as was put for the plaintiff: what harm could one more change do to an area that should no longer be regarded as a single dwelling neighbourhood?

By its very nature, the primary purpose of a single dwelling covenant is to prevent, by private agreement, the construction of multi housing in a neighbourhood at least on a single Lot. The extent of achieving a cohesiveness of that purpose will depend on the spread or closeness of the network of covenants in a particular area. But, the obvious idea of the covenant as a form of private planning control is to create a lower density residential area that brings with it: less building bulk; greater opportunities for landscaping; a milieu of spaciousness; a low level of traffic; less activity and noise; less demands on municipal amenities; and a generally quieter and less populous area, all making for a better quality of residential life.

Almost a century has passed since this covenant was made, and of course neighbourhoods can change over time with the introduction of roads, sewerage, reticulated water and other utilities; population and socio-economic changes; and housing needs. But, in this case, the plaintiff does not say under s 84(1)(a) of the Act that the restriction of reasonable user under the single dwelling covenant has become obsolete ‘by reason of changes in the character of the neighbourhood or other circumstances’. I venture to say, I do not think he could sustainably do so. To be obsolete under s 84(1)(a) means the covenant has, on one judicial view, ‘lost all value as to be incapable of achieving, to any degree, the purpose of the covenantor’;[14] or on another judicial view, that the covenant has become outmoded or out of date.[15] The plaintiff is not asserting any of that to be the case.
[14]See Greenwood v Burrows (1992) V ConvR ¶54-444 at 65,197. See also Re Robinson [1972] VR 278, 282.
[15]See Stanhill [28]–[31].

Thus, the most important starting point in this case is that the single dwelling covenant has work to do. As a form of legal promise running with the plaintiff’s land, and in the eyes of the law as a matter of substance, the covenant has purpose and it continues to provide a value to those having its benefit.

Nor, as this plaintiff’s case was propounded at trial does he say under the second limb of s 84(1)(a) that ‘the continued existence [of the restricted user in the covenant] would impede the reasonable user of the land’.[16] I venture to say, I do not think he could sustainably do so. A broad or robust view has it that the expression ‘reasonable user of the land’ means simply a user of the land acting reasonably.[17] Other authorities, including in this Court, align themselves with what is regarded as the traditional or cautious view (consonant with the proprietary significance of a covenant) that requires it to be shown that no reasonable use of the land is possible unless the restriction is discharged or modified.[18] I think views could be assimilated to say that it must be shown that the covenant, unless modified, hinders the land being reasonably used without corresponding benefits to beneficiaries having regard to the land’s physical characteristics, its situation, the surrounding property, the purposes of the covenant, and any planning controls.[19]
[16]The plaintiff’s written and spoken submissions were confined to s 84(1)(c) as were paragraphs 10.4 and 10.5 of the town planning report. In paragraph 11.1 of that report there is a passing reference to ‘reasonable and proper use of the land’.
[17]Stanhill 238 [33].
[18]See Bradbrook and Neave’s Easements and Restrictive Covenants (Third ed) [19.105]. See also Vrakas v Reg of Titles [2009] VSC 281 [29] and Prowse v Johnstone [2012] VSC 4.
[19]See Re Miscambles’s Application [1966] VR 596.

Thus, as is typical in these single dwelling applications, the plaintiff confines himself to seeking a modification of the single dwelling covenant under s 84(1)(c). He must show there will be no substantial injury to those having the benefit of the restriction. In that regard, presumably by deliberate omission, s 84(1)(c) says nothing at all about ‘changes in the neighbourhood’ as does the obsolescence ground in s 84(1)(a).

But applicants seek to inculcate changes in the neighbourhood as a factor into s 84(1)(c) in another way. The typical submission, as here, is that in order to determine under s 84(1)(c) whether there will not be ‘substantial injury’ to the benefit a beneficiary, a comparison is to be made by the Court between the benefit originally enjoyed under the covenant, and, the effect that the modification to the covenant will have upon that benefit. Legal authorities have said so.[20]
[20]See Vrakas [2008] VSC 281 at [23] - [48], and Prowse [2012] VSC 4 at [104].

The submission then goes: under s 84(1)(c) there is no substantial injury in allowing more than one dwelling on the covenantor’s land if the benefit of a single dwelling covenant has become eroded by changes over time in the neighbourhood. Thus, as here, it is contended: if over time there have been instances of multi-dwellings on land or re-subdivisions that have increased housing density (as have occurred despite covenants or as have been allowed for better or for worse by Courts or planning authorities) then such change has already devalued the macro benefit of the single dwelling covenant and concordantly there is no substantial injury in making one more change. In those situations, to use two common metaphors in these cases, it is said of the protective nature of the single dwelling covenant: ‘the guard soldier has fallen’ or ‘the bird has flown’.

In unopposed applications under s 84(1)(c) for modifications to a single dwelling covenant, I am able to say that such a submission is not uncommonly upheld in this Court. Where there is no opposition to an application, a modification is justified on the basis of an inference that beneficiaries have shown that they regard the modification sought as not causing substantial injury. Or, beneficiaries may not object because they have the same idea in mind on their own property. There was an example of that in this case.[21] But, once objectors appear in good faith and seriously maintain their objection, an applicant for modification must face and satisfy the statutory test.
[21]See affidavit of service of G.A Egerton sworn 20 April 2017, paragraph 10.

This brings me to the issue in the case as it was conducted. The issue is not elaborate; but a presentation and analysis of the constituent facts is.

Mr Lloyd of counsel for the plaintiff in essence contended that since 1922 this neighbourhood had changed to the extent that it could no longer be regarded as having the character of being a single dwelling area or an area of low housing density. More precisely, he contended that there have been many instances of re-subdivisions of a single Lot into 2 or more Lots, and instances of multi-unit developments (some two storey) on single Lots in Wilson Boulevard. That meant, he contended, that the benefit of lower density living had been eroded to the degree that the presence of two dwellings at the back of the plaintiff’s land did not truly inflict substantial injury. He relied in essence on Mr Easton’s assessment that there are at least 40 Lots in the neighbourhood where similar covenants have either been varied, discharged or ignored so as to facilitate alternative forms of development. Therefore, he contended, a precedent by accumulation had already been set within the neighbourhood, and therefore, there would be minimal impact in this case on beneficiaries. Mr Easton’s report articulated some permutations on that central plank.[22]
[22]See his report, Court exhibit P2, pp 45-47.

The defendants’ case

Mr Townsend, counsel for the defendants, concentrated on the words of the statute. He elevated the words and purport of s 84(1)(c) to a point of primary principle to say in essence this: there is textually an intentional statutory differentiation between the obsolescence test under s 84(1)(a) and the ‘substantial injury’ test under s 84(1)(c), and as ‘changes in the neighbourhood’ is not expressed in the language of s 84(1)(c), great analytical care must be taken with its importation as a fact into s 84(1)(c) so that it does not eclipse the primary enquiry of ‘substantial injury’.

Mr Townsend’s first thesis is that the words of s 84(1)(c) look to ‘substantial injury’ to a person’s enjoyment of property. That can be subjective. The infliction of injury can be attributable to matters such as the height and bulk of a proposed development; the mass of the development; the potential for overlooking into sensitive private areas such as gardens and swimming pools; the activity of a number of households; and traffic impacts. If a beneficiary (usually one who is an immediate neighbour or quite close to the subject property) can show substantial injury if the covenant is modified, then the Court ought be unconcerned with changes in the neighbourhood. That is, the onus under s 84(1)(c) is not discharged in cases of tangible injury to neighbours by pointing to ‘changes’ elsewhere in the neighbourhood and saying others have erected multi dwellings on land, therefore there is no ‘substantial injury’ here.

The tangible injury here is contended to be of that type. The proposed two double storey dwellings along the rear boundary of the plaintiff’s land are semi-detached and, so I am asked to find, there will be no relief to the mass of the build form when seen from the gardens of the nearby beneficiaries.

The second basis of opposition goes onto the macro grounds of the plaintiff’s case, and challenges the factual sustainability of the assertion that the benefit of the single covenant has been eroded because of changes. The defendants say that on a more refined scrutiny of the so called changes in the neighbourhood, it cannot be said truly that the neighbourhood has lost its predominant character as a single dwelling area bringing with it the cardinal benefits such as spaciousness, more landscaping, less traffic, and quiescence. The benefit of a single dwelling covenant has, the defendants say, not truly been eroded, or at least not been eroded to the point where the benefit has become illusory. Their destination is to say: whatever changes have occurred, a predominant change has not transpired. But, they contend, allowing applications such as this one will only serve to stimulate similar applications using this case as a Supreme Court legal precedent which will, with commercial impetus or self-interest, change the essential character of the neighbourhood.

The trial

The conduct of the trial involved a meticulous exposure of all of the Lots within the neighbourhood to enable the Court understand the layout and building features of the land, a history of planning approvals and court orders for subdivisions of the land, and the modification of covenants to enable some multi-unit developments. This was the result of a combination of Mr Easton’s planning report prepared and the O’Donnell’s response and critique. I repeat, the plaintiff did not dispute the O’Donnell’s factual response. What was in dispute was the conclusion to be drawn.

Thus the task for the Court was two-fold. The principal task became one of surveying the substantial evidence concerning the re-subdivisions and the multi dwelling developments in the neighbourhood to see if it could truly be said that the housing density benefits of a single dwelling covenant have been eroded to the degree that the plaintiff’s proposed development would not cause substantial injury. The second task concerned an assessment of any tangible injury to nearby benefitting land based on an imposing build form near a boundary.

At the outset, I shall state my decision. For the reasons and the findings that follow, I do not accept that the neighbourhood has experienced change since 1922 to an extent that has eroded the benefits of a single dwelling covenant. The plaintiff has not discharged his onus of showing that the proposed modification will not cause substantial injury to the beneficiaries. Therefore the application will be refused. I summarise my findings as follows.

First, the main change in the main part of the neighbourhood are re-subdivisions of some quite large single Lots (burdened by a single dwelling covenant) into two or three Lots but each of them has an area comparable to a typical housing Lot in the neighbourhood and are bound by a single dwelling covenant and, only has a single dwelling built on it.

Secondly, those instances of multi-unit developments are concentrated on very large Lots in a division of land along Wilson Boulevard backing onto the Edgars Creek drainage reserve. Most of those Lots are too large for a single dwelling, which explains why multi-unit dwellings have occurred on them.

Thirdly, if a comparison is to be made ‘like-with-like’, there are only three instances in this part of the subdivision where a house exists at the rear another house: Lot 1454 at 8 O’Donnell Street (a dual occupancy of two single storey dwellings one at the rear of the other, no covenant); Lot 1404 at 65-67 McFadzean Avenue (one double storey at rear of no. 67, covenant removed in plan of subdivision in 2003); and Lot 1402 at 71 McFadzean Avenue (one single storey at rear, covenant disregarded). Away from the western side of Wilson Boulevard there is no other example of two double storey dwellings behind an existing dwelling.

Fourthly, such is the layout, feature and configuration of Lots in the neighbourhood, I think there is for present purposes, an imaginary division to be made between the larger neighbourhood to the east of Wilson’s Boulevard (where the plaintiff is), and the strip of prominently large Lots on the west side of Wilson Boulevard where re-subdivisions have occurred and multi dwellings have been built. That western division does not define the dominant feature or character of the neighbourhood. The analysis of change needs to not lose sight of the neighbourhood on the east of Wilson Boulevard.

Fifthly, there have been subdivisions of large Lots (including corner Lots) into smaller Lots of a range between two and six Lots, but those resultant Lots are of a considerable size of about 500 square metres at a minimum and are burdened by a single dwelling covenant.

Sixthly, in a literal sense there is a ‘change’ when one large Lot burdened by a single dwelling covenant is transformed into three smaller individual Lots each burdened by a covenant. The outcome will be three dwellings over an area of land which originally was limited to one dwelling. According to the plaintiff’s case, such an increase in housing density is an erosion of the single dwelling covenant. I think too much was made of this. True it is, one of the benefits of a single dwelling covenant as part of a knitted network of covenants is to create low housing density in an area. The defendants’ point, which I would accept, is that a re-subdivision of a large residential Lot is not a material change for present purposes where the outcome is the creation of substantial sub-Lots of a good size or a size comparable to other single housing Lots in the subdivision. What matters is the preservation of one dwelling per housing Lot. I would determine that these ‘changes’ by re-subdivision were not of a kind or of an extent that altered the fabric of the neighbourhood as a single dwelling area or diminished the benefit of a single dwelling covenant.

Seventhly, great care must be taken with conclusions about these matters behind a desk or on a Bench according to papers and drawings and numerals. In these cases, a view of the area was of enormous assistance in enabling a better judgment to be made. On my walking and driving view of the whole of the neighbourhood, and as a matter of ordinary perception of physical conditions, I would say this neighbourhood east of Wilson Boulevard has the look and the feel of being a rather quiet, uncongested single dwelling area with not a lot of traffic and not many cars parked on the street. Without a tape measure, I could see that the Lots which were created as the result of a re-subdivision, really look no different to an ordinary single good size housing Lot in the rest of the neighbourhood. I give this observation much weight because it is a real-life tangible or ocular factor.

Eighthly, the area of greater congestion and housing density (not all of which is visible from the street because of the descending land gradient to the Edgars Creek drainage reserve) is the flank opposite the plaintiff’s place on the western side of Wilson Boulevard. This is not single dwelling territory. But, the features and the changes on this western division are attributable to the peculiar features, situation and size of those Lots. All but two of them are quite large Lots and, I think, naturally lend themselves to multi-unit development without permeating into the character of the neighbourhood to the east of Wilson Boulevard.

Ninthly, in my judgment, the construction of two semi-detached double storey dwellings on the plaintiff’s land would involve a substantial change to the build form and density of his land. I have viewed the backyard of the Danieles place and the Kiriazidis’ place and looked over to the plaintiff’s land. One can envisage there will be no relief to the mass of the proposed build form when seen from the gardens of these beneficiaries.

Accordingly, I hold that the plaintiff has not made out a case under s 84(1)(c). I do not see an injustice in holding Mr Foudoulis to the covenant by which he is legally bound.

The evidence

The evidence on both sides condescended into a Lot by Lot description of the features and subdivisional history of the neighbourhood, with diagrams and photographs and visual aids. The extent and detail of their factual exposition would make it indigestible or confusing to state in narrative form. I think the most meaningful and expositive way of analysing the case and giving the Court’s findings and reasons is to identify the following plans and documents which are in evidence.

Annexure A

To give an appreciation of the location of the plaintiff’s land within greater Reservoir, I have reproduced from the plaintiff’s expert evidence an extract from a street directory that marks out, in a red line, the boundary of the grandfather or parent title. That area is bounded by Mahoneys Road to the north, High Street to the east, Broadhurst Avenue to the south, and a zigzag boundary to the west that follows the meanderings of the Merri Creek.

As the O’Donnell’s point out, it is significant that this neighbourhood which is within the area marked out in red in this Annexure corresponds with an area marked out as a ‘Minimum Housing Change Area’ in the Strategic Housing Framework Plan of the Darebin Planning Scheme.[23] Such an area is described in that public document as having:
[23]See exhibit OD-2 to the defendants’ affidavit sworn 30 August 2017.

· a highly intact pattern of subdivision in favour of detached dwellings on individual lots, generally evidenced by more than 80 per cent of housing stock having this attribute;

· having a strong neighbourhood character, evidenced by a high degree of consistency in architectural style and streetscape, in particular where 80 per cent or more of the housing stock is consistent with precinct descriptions in the Darebin Neighbourhood Character Study (2007), and where restoration of original housing stock is prevalent;

· having identified environmental or landscape significance, including land with frontage to Creek bodies.

More pertinently, this Annexure also shows (as marked out in a blue line) the portion of subdivision LP 8469 which the parties agree is the relevant neighbourhood for the purposes of this application. This neighbourhood is bounded by Glasgow Avenue to the north; McFadzean Avenue to the east; (roughly) the Edgars Creek drainage reserve to the west; and Broadhurst Avenue to the South. The neighbourhood has 143 residential Lots, all but 13 of which have the benefit of the covenant. That is equivalent arithmetically to 90 per cent of Lots having the benefit of the single dwelling covenant.

Annexure B

This is a composite plan of the neighbourhood put together and tendered by plaintiff from various sheets making up the south east corner of LP 8469, as part of the much larger subdivision of the grandparent title.[24] Both sides agreed that the area of the subdivision shown in this annexure is the relevant area for the purposes of this application. This annexure was used at trial as a convenient work of reference. In the course of trial, uncontroversial corrections were made to this composite plan and because of that, the Annexure includes handwritten changes, in red, according to the evidence. For example, on Lot 1466 the circled no. 2 was removed as that Lot is vacant land. Lot 1496 and Lot 1463 now show that each was subdivided into 2 Lots.
[24]Court exhibit P5.

On this annexure the red shading is the plaintiff’s land. The green shading is the objectors’ land: Lot 1518 at 107 Broadhurst Avenue is owned by the O’Donnells; Lot 1495 at 8 Wilson Boulevard is owned by the Danieles; and Lot 1499 at 13 O’Donnell Street is owned by the Kiriazidis’. The Lots shaded blue do not have the benefit of the covenant.

A circled number alongside a drawn arc that spans over more than one Lot signifies the number of re-subdivided Lots. A standalone circled number on an individual Lot signifies the number of dwellings built on that Lot.

The red letter ‘V’ on the plan signifies vacant land over which overhead electricity wires pass. Lot 1466 on the corner of Elliot Street and Wilson Boulevard is vacant land on which is erected an electricity transmission tower for the overhead wires. The lines pass over other nearby vacant Lots 1433, 1434, 1426, 1427 which are also part of the entrance to the Mayflower Aged Care Centre shown on the Annexure as “J” Park Reserve. The power lines continue over vacant Lots 1415, 1416, 1395 and 1396.

A number of findings can be made from Annexure B.

First, and subject to what follows, it can be readily observed that the Lots on the west side of Wilson Boulevard are so much bigger and deeper than the Lots to the east of Wilson Boulevard. This explains why some of these big Lots have the greatest number of multi-unit dwellings on them. On my view of the area, these Lots are on a markedly downward gradient to the Edgars Creek drainage reserve. On some of those Lots, the dwellings behind those at street level cannot be obviously seen because of the gradient. I think the size and distinguishing features of these Lots make these Lots innately suitable for multi-unit dwellings. That permits a division to be made, or requires care to be taken with developments peculiar to the west side of Wilson Boulevard when it comes to appraising the dominant character of the whole neighbourhood.

Secondly, and as a feature that focalises some support for the plaintiff’s application, there are multi dwellings on three Lots on the west side of Wilson Boulevard that are opposite to the plaintiff’s land. Lot 1520 is an irregular shaped block which has three large double story townhouses ‘tightly’ built on it. Lot 1522 is directly opposite the plaintiff’s land. It was subdivided into five Lots on which there are 4 dwellings and a parkland area. Lot 1523 has nine dwellings. On the plaintiff’s side of Wilson Boulevard, Lots 1493 and 1496 and 1463 are large corner blocks that have been subdivided into two Lots each with a single dwelling. It has to be said that on my view of the area, the housing on those Lots is quite built up. But care must be taken not to see that enclave as representative of the neighbourhood. This case for the defendants has proceeded with measure to have the Court appraise the predominant neighbourhood character to see if erosion to its single dwelling character truly has occurred.

Thirdly, further north on the west side of Wilson Boulevard, Lot 1528 (an exceptionally large block) has 12 dwellings. Lots 1529 and 1530 were re-subdivided into three Lots. On the third of those, the most recent modification to a single dwelling covenant was made by this Court on 12 February 2018 in an unopposed application to allow up to five dwellings.[25]
[25]See Re Castlerea Carpenters Pty Ltd [2019] VSC 303.

Annexure C

This annexure is collateral to Annexure B. It is a digest of facts that should be taken as findings of the Court. It is based on Mr Easton’s report and the defendants’ additions and responses. This annexure identifies the Lots in the neighbourhood, east and west of Wilson Boulevard, that have been subdivided and the Lots on which there is more than one dwelling. In combination with Annexure B, this annexure in narrative form states what the plaintiff contends is the nature and extent of change in the neighbourhood since 1922, and by the same facts shows what the defendants say shows that despite the re-subdivisions, the neighbourhood is still predominantly single dwelling and where there have been re-subdivisions of land, the resultant blocks nevertheless have an area of at least 500m², and have only a single dwelling built on them.

A tabulation done by the O’Donnells of all of the Lots in the subdivision as shown in Annexure B and as described in Annexure C gives an average area of 502m².[26] On that basis, they contended the re-subdivisions of large Lots (on which the plaintiff so heavily relies to assert that the neighbourhood has changed) resulted in additional housing Lots of about the same area as the average house Lot in whole of the neighbourhood, with one dwelling on them. Thus they say, first, the neighbourhood has truly not lost its single dwelling character.
[26]See pp 18–21 of the defendants’ written submissions. The average figure of 516m² was reduced to 502m² allow for the subsequent allowance of 5 dwellings at 33 Wilson Boulevard.

This led to Mr Easton contending that average Lot size throughout the neighbourhood is not an accurate method of assessing impact on benefitted properties. He says that density considerations on subdivided Lots that are closer to the plaintiff’s land are a more accurate comparison.[27] To make that comparison, he confines himself to four nearby Lots.
[27]See his Supplementary Report dated February 2018, tendered as Court exhibit P3.

The first is at 121 Broadhurst Avenue which is 160 metres west of the plaintiff’s land and on which there are four units on a site of 1196m². I have made checks from maps, and I hope I am not wrong, but that land is not in the relevant subdivision as shown in Annexure B. This land is on the other side of the Edgars Creek drainage reserve, so I shall disregard it and concentrate on the three others.

The second is at 1 Wilson Boulevard (Lot 1520). That is diagonally opposite the plaintiff’s land and has three double storey units on it. The single dwelling covenant was removed by VCAT in an unopposed application. The area of each subdivision is 280m², 266m² and 392m². (Here and following, I have taken the exact dimension of land areas from the information in the plaintiffs materials, which are not disputed.[28]) That gives a Lot density of 1:313 m².
[28]See also affidavit of Kevin O’Donnell sworn 19 February 2018, paragraphs 12-17.

The third is at 9-11 Wilson Boulevard (Lot 1523). That is 70 metres north of the plaintiff’s land. The single dwelling covenant was removed under a process by which some title was obtained by adverse possession. That Lot has nine units on it, each of an area ranging from 174m² to 264m². That gives a Lot density of 1:290m².

The fourth is 29 Wilson Boulevard (Lot 1528). That is 250 metres north of the plaintiff’s land. The area is 7408m². The single dwelling covenant was modified by this court in 1976 to allow up to 12 single story units. The 12 units have an area ranging from 200m² to 274m² giving a Lot density of 1:627m².

As I remarked at trial, this case was approaching the danger of entailing a judgment to be made by mathematics or linear equation. If Mr Easton’s point against the significance of Lot size, and in favour of housing density, is to illuminate the presence of multi-unit development in the four Lots opposite the plaintiffs place that have increased housing density and likewise the 12 units further up in Lot 1528 (and more recently at 33 Wilson Boulevard, the modification in the Re Castlerea Carpenters case to allow 5 units) then that point is valid on the facts. I would add: standing on the corner of O’Donnell Street and Wilson Boulevard, one can see the built up conditions opposite the plaintiff’s land down to Broadhurst Avenue.

But in my respectful opinion, that does not grapple with the issue for determination. The essence of the O’Donnells case, which I would uphold, is that there is a large (and I think dominant) rump of the neighbourhood made up of single dwelling Lots of an average size of about 500m² most of which have a single dwelling covenant on them. And, they say, that is what characterises the greater part of the neighbourhood and ought be preserved by not modifying the covenant That is the basis of their ‘bad precedent’ case.

So understood, that is the significance of Lot sizes and single dwellings. Furthermore, if density was decisive, then as the O’Donnell’s submitted, the proposed development here would be of a density greater than anything yet approved. The plaintiff’s land is 893m² giving an overall density of 1:297m². The approximate Lot sizes for the two additional Lots are said to be 156m² and 148m².

Annexure D

This is Figure 18 extracted from Mr Easton’s planning report. In aid of the plaintiff’s case that the character of the neighbourhood has changed, this Annexure colours in blue the Lots which have been re-subdivided or on which multi dwellings have been built. So presented, it is designed to vividly depict what the plaintiff says are the eroding changes to the character of the neighbourhood.

Annexure E

This Annexure is prepared by the O’Donnells from their research work as a counterpoise to Annexure D. Faithful to the narrative in Annexure C, the purpose of this plan is to refine the categorisation of changes that have occurred in the neighbourhood. To do that, the O’Donnell’s have annotated the subdivision according to a colour key which is self‑explanatory. It is especially important to see the re-subdivided Lots as shaded in yellow and orange. It is also important to see that the re-subdivisions occurred with either a preservation of a single dwelling covenant or the imposition of such a covenant in the process. This leads to the significance of the next annexure.

Annexure F

Annexure F is an equally vivid juxtaposition to Mr Easton’s Annexure D. It depicts what the O’Donnell’s contend, by the refinement in Annexure E, to be the far less significant changes in the neighbourhood than is depicted in Mr Easton’s Annexure D. This is based on their prime contention that a re-subdivision of a large piece of land into two or more housing Lots of at least 500m² and each of which is restricted to a single dwelling, does not therefore make for a change to the character of the neighbourhood or an erosion of the benefits of the covenant burdening the plaintiff’s land.

On this Annexure, the O’Donnells have isolated those Lots on which more than one dwelling has been built either (i) where the covenant was removed or modified; or (ii) where more than one dwelling was built in breach of covenant or where the covenant was removed in unknown or unusual circumstances. This was done in aid of their contention that in truth, and on proper analysis of what has happened in this subdivision, it cannot be said that the extent of departure from single dwellings on land has reached a point where the character of the neighbourhood has changed so as to render the single dwelling covenant no longer of much benefit.

Annexure G

This annexure shows that the back of the additional two storey dwellings will be not all that far from the site boundary and face into the backyards of Lots 1497, 1498, and 1499 (the Kiriazidis’ backyard) and possibly others on the grid along O’Donnell Street. That is apparent from the configuration of blocks as shown in Annexure B. From the backyard of the Danieles’ home next door, the building will be on their title boundary and in full view.

This Annexure and those that follow are concerned not with changes to the neighbourhood but with the question of tangible or physical injury to the surrounding neighbours including the Kiriazidis’ and the Danieles to be judged by the plans showing the proposed building additions on the land. In this context Mr Townsend raised another point of principle concerning proof of the absence of substantial injury which does not inform my view about the expectable tangible injury to the nearby beneficiaries, but I will expose out of deference to the argument.

It is established on the authorities that a lack of specific plans makes it more difficult for an applicant to show there will be no substantial injury.[29] I would add that it is in an applicant’s interests to produce specific plans to possibly allay any concerns by the beneficiaries about substantial injury or reach agreement on a matter.
[29]Stanhill [69]; Vrakasv Registrar of Titles [2008] VSC 281.

As occurs in many applications of this type, the plaintiff has exhibited schematic design plans for the purposes of the application. These are not developed or approved plans. They are indicative. The Court does not incur the responsibility of seeing whether the plans comply with planning laws or are within planning guidelines, or, presage whether the plans will be approved. Nor in allowing an application is the Court giving its imprimatur to the plans, for it is not a planning authority. For the purposes of the ‘substantial injury’ exercise, the assumption is that the development will be built in accordance with the indicative plans.

Yet Mr Townsend urges, the reality could well be different. If the Court modifies a single dwelling covenant to allow up to three dwellings (a so called bare modification) then that is all the amended covenant will be registered as showing. It is a private covenant; not a planning instrument. As Mr Easton readily agreed to be the reality, the day after a Court modification of this type a plaintiff can sell the land to developers who may disregard the plaintiff’s schematic plans and acting on the terms of the modified covenant, decide to demolish the existing dwelling and build three townhouses, subject to planning approval which would be sought on the basis of a modified covenant. Or, the owner may change the plans, maybe to increase the site coverage or make them three bedroom dwellings, maybe with a greater height.

From there, Mr Townsend submitted that an assessment of substantial injury under the statute cannot be made unless the plan that is before the Court is the plan that will definitely go ahead and be built that way. He says the Court is being asked, in these applications, to assess substantial injury by reference to concept plans for which permission may never be given, or may change, or may be disregarded by a new owner of the land, such as a developer. As I understood the submission, it was said that without the certainty of developed and approved plans the Court was in no position to assess substantial injury and therefore could not embark on the exercise of jurisdiction.

One occasional technique is to modify the covenant so as to stipulate a modification to it by identifying it as having to occur according to the concept plans before the Court. But the plans are not final, and are bound to be subject to iterations in the approval process. Drafting techniques such as a Court order that allows modification ‘generally in accordance with’ identified plans is bound to be controversial about what ‘generally’ means in a building and design context, and would require the continuing supervision of the Court as if it were a planning body.

As I understood it, Mr Townsend’s argument about the nascence of the plans was put in aid of fortifying the traditional or conservative approach when assessing ‘substantial injury’ in this, an opposed case. That traditional approach originated in the United Kingdom and stemmed from the ‘reasonable user’ ground in s 84(1)(a). That approach viewed s 84 as not designed to enable a person to ‘expropriate the private rights of another rights of another purely for his own profit’ but as prima facie meant for cases where ‘it seems necessary to do so because it prevents in some way the proper development of the neighbouring [burdened] property, and not merely because, in the view of the person who desires the restriction to go, it would make his property more enjoyable or more convenient for his own private purposes’.[30] The traditional attitude looked to the protection of private rights of landholders having the benefit of the covenant, and to not benefit one private individual at the expense of another individual.
[30]See In re Henderson’s Conveyance [1940] Ch 835, 845-6 (Farwell J).

In this Court, the decision of Morris J in Stanhill[31] is usually held up as showing a departure from that traditional approach in favour of a ‘robust’ approach, which in the context of s 84(1)(c) is this:

…the language used in paragraph (c) does not require a case to be made that the proposed discharge or modification of a restriction will not harm the persons entitled to the benefit of the restriction. The hurdle is not this high. Rather it is sufficient to show that the proposed discharge or modification will not cause harm to the persons entitled to the benefit of the restriction which could be regarded as being of real significance or importance. This will require a judgment call in the particular circumstances being considered; it does not admit of some universal answer based upon the attitude of the beneficiary, the original purpose of the covenant or any other similar factor.[32]

[31](2005) 12 VR 224.

[32]Ibid 238, [17].

More recent authorities in this Court have not adopted or endorsed the approach of Stanhill and prefer to apply the ‘longstanding principles’ about s 84 that preceded it.[33]
[33]See Prowse v Johnstone [2012] VSC 4, [99] (Cavanough J).

This is not the occasion for a pronouncement on the apparent restlessness about Stanhill or, more specifically, on the weight to be given to concept or indicative plans in these applications. An applicant who puts in no plans or crude and unreliable plans cannot expect a Court to make a judgment on substantial injury. In this case, I think the submission is academic because I take the view that the plans and elevations as put forward by the plaintiff in evidence from which to judge the application show substantial change to the build form and density of the plaintiff’ land, and, there will be no relief to the mass of the proposed build form when seen from the gardens of beneficiaries. In my view that will constitute substantial injury.

Mr Easton’s report includes a proposition that when it comes to realistically assessing substantial injury, it may be postulated that, as an alternative form of user, a single dwelling covenant would not prohibit a landowner from building an imposing single dwelling having an imposing build form and site presence that could well exceed that of two double story dwellings. I am bound to say respectfully, I have always doubted this proposition at least as a standalone factor. Subject to the planning laws, a single dwelling may be big and imposing and close to boundaries, but it is nevertheless a single dwelling not prohibited under a single dwelling covenant. It is therefore inapposite, I think, to compare it with two dwellings that are per se contrary to a covenant.[34]
[34]See Re Young [2019] VSC 755, [9].

In addition there is another ‘injury’ of a different species, and that is the setting of particular precedent of two double storey dwellings behind an existing house in a predominantly single dwelling area. As I have shown, there are no other instances of two dwellings being allowed behind an existing home on an ‘ordinary’ block.

Annexure H

Annexure H consists of the advanced schematic design elevations of the proposed development and as produced in Mr Easton’s report.[35] I would give special attention to the south‑west elevation which depicts how the development will look from the street. It is not obscured. It will certainly be eye catching. The north‑east elevation depicts the build form as it will appear from the backyards of land on O’Donnell Street, including land owned by the Kiriazidis’. The north‑west elevation shows what the Danieles will see from their back yard. It is noteworthy that this elevation has superimposed on it the ‘Allowable Height Setback’ which means the elevations for present purposes have been drawn at less than the limits, yet there would be nothing to prevent the plaintiff to build the dwellings to be wider and higher, subject to planning permission.
[35]See Supplementary Report dated February 2018 (Court exhibit P3).

At the rear of the plaintiff’s land there are three very large and dense pines which are effective to create a visual buffer along the back fence. There is no evidence that the plaintiff intends retaining these trees.

Annexure I

These are two computer generated pictures of the proposed development of the plaintiff’s land as furnished by Mr Easton. These show the substantial change to build form and density.

Annexure J

This annexure is two photographs. The first is an aerial photograph annotated to show the consistent open backyard character of the Lots around the plaintiff’s land.[36] The second is taken from the backyard of the Kiriazidis’ place. It shows the three tall conifers currently on the boundary of the plaintiff’s land.[37] This gives an appreciation of the visual presence that the proposed development create towards the backyards of homes to the north, south and east.
[36]Court exhibit D5.
[37]Court exhibit D4.

Summation

In an opposed application for modification of a restrictive covenant, the Court ought proceed with caution before disturbing proprietary rights. The single dwelling covenant in this case is almost a century old, but its purpose remains real and valuable.

The re-subdivisions in the neighbourhood, where they have occurred, have of necessity altered housing density where those subdivisions have occurred. But the re-subdivisions have been to large Lots and corner Lots and have nevertheless resulted in good sized housing Lots similar to stand alone pre-existing single dwelling Lots. Those changes do not displace the descriptor that this neighbourhood in this part of Reservoir is established, and has predominantly a low density environment consisting of single dwellings on single Lots.

Where multi developments have occurred on the western side of Wilson Boulevard , they have occurred on uniquely situated large Lots suitable for multi dwelling development.

To allow this modification will cause substantial injury to the beneficiaries in the remainder of the neighbourhood as it constitutes a precedent contrary to the essential character of the neighbourhood. Its imposing build form will also cause tangible injury to immediate neighbours. Accordingly, I propose to order that the application be disallowed and that the originating motion be dismissed.

That leaves the question of costs. Costs orders are discretionary and the discretion must be judicially exercised according to the requirements of justice. Ordinarily in adversarial civil litigation justice is seen to be done by ordering that costs orders are made in favour of the successful party. What also favours the O’Donnells is authority in this Court that, depending on the particular case, ‘unless the objections taken are frivolous, an unsuccessful objector in a proper case should not have to bear the bitter burden of his own costs when all he has been doing is seeking to maintain the continuance of a privilege which by law is his’.[38] As this is a field of discretion, this could be regarded not as a rule, but as a matter of principled practice.
[38]See Re Withers [1970] VR 319, 320 and the costs decision in Stanhill [2005] VSC 355. See also Wong v McConville & Others (No 2) [2014] VSC 282.

In October last year, counsel for the O’Donnells lodged and served a ‘Submission on Costs’ which relied on that legal authority and included materials to quantify their costs and made an offer to ‘settle the issue of costs’. The plaintiff’s response at that time was to make submissions on costs when invited to do so by the Court.

If there is anything more that the defendant would wish to add to their costs submissions, I would invite them to do so within seven days, and invite the plaintiff to file any responding submissions seven days later. In the current pandemic conditions, unless the parties ask for a ‘virtual court’ to convene, I shall make decision on costs ‘on the papers’.

*****

ANNEXURE A

ANNEXURE B

ANNEXURE C

SUBDIVISIONS AND DEVELOPMENTS IN THE NEIGHBOURHOOD
( * denotes a site having a dwelling behind an existing dwelling)
DIVISION A – LOTS EAST OF WILSON BOULEVARD
Lots 1393 and 1394

These two Lots, each of which were burdened by a single dwelling covenant, were consolidated to an area of about 1,660 square metres and then re-subdivided into three Lots in 1961. The three properties became known as 75, 77 and 79 Glasgow Avenue. The Lot sizes are between 546m² and 558m². Each remains burdened by a single dwelling covenant
* Lot 1402
This Lot is burdened by a single dwelling covenant. It has been developed with a second dwelling (single storey) at the rear of the existing dwelling. The site was re-subdivided into two Lots in 1998 with the preservation of the covenant. Prior to 12 December 2000, Councils were not required to have regard to covenants in issuing permits for dual occupancies or subdivisions. Thus, it appears that the second dwelling was built in contravention of the covenant and subsequently the subdivision of the property was permitted.
* Lot 1404
This Lot was subdivided into two Lots in 1959. The site is now known as 65 and 67 McFadzean Avenue with an approximate area of 517m²and 625m² respectively. Number 67 was re-subdivided into two Lots in 2003. This re-subdivision produced two Lots of 295m² and 210m². The dwelling at the rear of 67 McFadzean Avenue is double storey and accessed via a common property driveway. From the Court’s inspection of this property, the rear dwelling does not have an imposing visual presence at street level, and blends in with the existing dwelling.
Lot 1405
This Lot is on the corner of Elliot Street and McFadzean Avenue originally had an area of about 1508m². It was subdivided into three Lots in 1959. There is now a dwelling on each lot and a single dwelling covenant still applies to each Lot. The three Lots are of an area between 500m² and 506m².
Lot 1408
This Lot, on the corner of Tracey Street and Elliot Street had an area of about 1320m². The land was burdened by a single dwelling covenant. It was subdivided in 1963, to create two Lots of 659m² each burdened with a single dwelling covenant.
Lot 1419
This Lot, on the corner of Glasgow Avenue and Tracey Street, had an area of about 913m². In 1961 it was subdivided (seemingly in breach of a single dwelling covenant) into two Lots having an equal area. The pre-existing single dwelling covenant burdens the resultant two Lots.
Lot 1421
This Lot is located on the corner of Tracey Street and Glasgow Avenue and was burdened by a single dwelling covenant. In 1963 it was subdivided into two large single dwelling Lots of 458m².
Lots 1430 and 1431
These two Lots form a substantial area of about 2302m². In 1959 the two Lots were re-subdivided into four Lots after Court orders modifying the covenants in 1959. The resultant four Lots having an area between 557m² and 599m².
The Mayflower Aged Care Facility
This facility has 22 retirement units. The greater part of the facility is shown as ‘Park Reserve’ on the plan of subdivision. That reserve does not contain a restrictive covenant. There are access ways to the facility created by Lots 1433 and 1434 (on Elliot Street) and Lots 1426 and 1427 (on Tracey Street). The use of the reserve and the four lots of land puts these sites in the aggregate, as having not any bearing on this application.
Lots 1436 and 1437
Lot 1436 is in Elliot Street. Lot 1437 is on the corner of Elliot Street and Wilson Boulevard, a block away from the plaintiff’s land at 6 Wilson Boulevard. In 1962, these two Lots (having an area of about 2358m²) were re‑subdivided into four Lots without any change to the pre-existing covenant. The resultant four Lots have an area of between 533m² and 681m².
Lot 1443
This lot is on the corner of Wilson Boulevard and Glasgow Avenue and originally had an area of about 1432m². In 1964 the Lot was subdivided into two lots having an area of about 727m² and 709m². Each of those Lots remains burdened by a single dwelling covenant.
Lots 1449-1451
These three original Lots, having a combined area of about 3170m², were subdivided in 1961 to create six Lots. The single dwelling covenants on the original lots were modified by the Court in 1961 to permit the construction of a single dwelling on each of the six Lots. The resulting subdivision created six lots of an average of 531m².
*Lot 1454
This Lot is at 8 O’Donnell Street and is the third (and last) example of a rear dwelling behind a front dwelling. It has an area of about 929m². Of the three instances it is the closest to the plaintiff’s land. This Lot has been developed with a dual occupancy of two dwellings. Both dwellings are single storey and from the Court’s inspection of the area the rear dwelling is barely noticeable, beyond seeing some garage doors. The rear dwelling is accessed via a driveway beside the front dwelling. The site was subdivided in 1999 to create two Lots of 559m² and 368m². In the original transfer of land of this Lot the single dwelling covenant was crossed out. The parties have no information about why or by whom the covenant was deleted.
Lot 1463
This Lot, on the corner of Wilson Boulevard and O’Donnell Street is quite close to the subject land. It is burdened by a single dwelling covenant. It originally had an area of about 954m² and was subdivided into two lots in 1960, seemingly in breach of the covenant. The resultant detached single dwelling lots are approximately 450m²and 499m².
Lots 1475-1479
These five Lots have a combined area of about 4531m². They were subdivided in 1962 to create six Lots each of which remains burdened by the covenant. The outcome is the creation of six Lots with an average Lot size of 750m².
Lots 1483 and 1484
These two Lots, having a combined area of about 1771m²were re‑subdivided into three Lots in 1959. In 1961 the Court modified the covenant to permit the construction of a single dwelling on each of the three Lots which have an average area of 590m².
Lot 1493
This Lot is on the corner of Wilson Boulevard and Broadhurst Avenue, and is next to the plaintiff’s land on the southern side. It has an area of about 1332m²and is burdened by a single dwelling covenant. The Lot was subdivided into two lots in 1959 of 626m² and 629m² each restricted to and now containing a single dwelling covenant
Lot 1496
This corner Lot, which is two blocks to the north of the plaintiff’s land, originally had an area of about 1127m². It was burdened by a single dwelling covenant. The land was subdivided into two Lots in 1961 without a variation of the covenant. The resultant Lots are about 560m² each.
Lots 1506-1509
The changes are unique to these Lots and their history.
Original covenants on these Lots prohibited any shops or any more than one dwelling. These four lots were later re-subdivided to create 7 narrow shops sites facing McFadzean Avenue and two residential Lots facing Broadhurst Avenue. Modifications to the covenant made by the Court in 1962 permitted the erection of the shops. In 1965 the Court permitted the shop sites to be used as a petrol station and to allow excavation for underground tanks. The petrol station came to be disused and the site was used as a car park for derelict vehicles. The use of the land had so radically altered as to make render the single dwelling covenant as having no practical utility. Hence by an order that I made on 5 September 2012, the covenant was discharged. The City of Darebin Planning Register suggests that it will be used for the construction of a three storey building with ground floor retail and nine dwellings.
DIVISION B
WESTSIDE LOTS
Lot 1519
This Lot originally had an area of 4321m². The southern boundary abuts the Edgars Creek draining reserve in the same way as all blocks on the western side of Wilson Boulevard. This Lot was sold by the City of Preston in 1949 and transferred without covenant. Ultimately, the majority of this Lot was disposed to the Crown in 2003 and is now undeveloped as a Park and Residential Zone.
The portion not owned by the Crown was subdivided in about 1993 into two Lots that have been developed as single dwelling properties having an area of 773m² and 286m².
Lot 1520 and Lot 1521
This land, covering about 932m², is opposite the plaintiff’s land. It has recently been developed with three large double storey townhouses that appear to take up a good part of the land area. The single dwelling covenant was varied in 2012 by VCAT in the absence of any opposition. The only nearby beneficiary was Lot 1517. All other beneficiaries were north of Elliot Street.
Lot 1522
This land, is diagonally opposite the plaintiff’s land and originally had an area of 3087m². It was divided in 1966 into five Lots two of which face Wilson Boulevard and three of which face Broadhurst Avenue. These Lots have an average area of about 600m². To facilitate the subdivision the covenant was modified by the Court. Four of the Lots now contain a single dwelling and one is used as a park land.
Lot 1523
This land is not far from the subject land. It has an area of 2640m² and was subject to a single dwelling covenant. It has been developed with nine dwellings and further subdivided in 2004. It appears that the single dwelling covenant came to be extinguished as a result of an adverse possession claim over a previous title. Being a multi-unit development, the nine Lots are smaller, having an average of about 200m².
Lot 1528
This land has an area of about 7400m². The restrictive covenant was modified by Court order in about 1976 so as to permit the erection of twelve single storey home units.
Lots 1529 and 1530
These two Lots situated at 33 Wilson Boulevard had a combined area of 2900m². In 1960 the two Lots were subdivided into three lots each with a restrictive covenant to prohibit more than one dwelling. Each of the three Lots had an average area of 1400m².
On 14 February 2018, an Associate Judge of this Court allowed an application made under s 84(1)(c) to modify a single dwelling covenant burdening one of the Lots so as to permit the construction of up to five dwellings.[39] There was no opposition to that application. That case came to attract subsequent controversy, and a substantial and instructive judgment, when the Judge making the order to allow for modification of the covenant discovered subsequently that a previous application by the previous owners for the same Lot had been refused by another Judge in June 2017. That was drawn to the Court’s attention by the O’Donnells at a time when this case was pending and in the situation where they could not object to the application concerning 33 Wilson Boulevard because they were not beneficiaries of the covenant.
[39]See Re Castlerea Carpenters Pty Ltd: S CI 2017 04818 (Lansdowne AsJ). The application was also supported by a planning report made by Mr Easton and the same solicitor as in this case, Mr Egerton, was acting for the applicant.
Having been informed of the previous decision, the legal issue concerned the Court’s power to reopen the second decision and the Court’s jurisdiction to consider the conduct of the legal practitioners involved.[40] The upshot was to not reopen the modification order. For the sake of preserving unblemished and high reputations of the professional people involved, I should stress that no adverse findings were made by the Court concerning the conduct of the case.
[40]For the previous order see Re Katherine Scerri and Others (as Legal personal Representatives of Giovanna Scicluna, Deceased) [2017] VSC 368 (Ierodiaconou AsJ). For the judgment on the question of non-disclosure to the Court by legal practitioners, see: Re Castlerea Carpenters Pty Ltd [2019] VSC 303 (Lansdowne AsJ).
Lots 1534 and 1535
These two Lots having a combined area of about 2000m² were subdivided into three Lots in 1977 to create average Lot sizes of 680m². The covenants remain on each of the Lots.
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ANNEXURE D

ANNEXURE E

ANNEXURE F

ANNEXURE G

ANNEXURE H

ANNEXURE I

ANNEXURE J

[2020] VSC 248

8 May 2020