JUDGE:	BELL J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	2, 3, 4, 7 OCTOBER 2013
DATE OF JUDGMENT:	22 OCTOBER 2013
CASE MAY BE CITED AS:	FREILICH v WHARTON
MEDIUM NEUTRAL CITATION:	[2013] VSC 533

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RESTRICTIVE COVENANT – application for removal – property on busy corner of quiet estate having heritage residential character – prohibition on use of house on property for trade or business – proposed use of house for specialist medical centre – whether persons entitled to benefit of restriction would be substantially injured – purpose of power to approve modification of covenant – whether a broad power to facilitate use and development of land in public interest – principles governing exercise of the power – planning considerations not relevant to whether ground of modification established – intended purpose of covenant to ensure residential character neighbourhood – likely impact of approval of modification – whether would detract from that character – identification of neighbourhood – whether approval of modification would set bad precedent – Property Law Act 1958 (Vic) s 84(1)(c).

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APPEARANCES:	Counsel	Solicitors
For the plaintiff	Mr S Morris QC with Mr D Lloyd	Aitken Partners
For the defendants	Mr S Horgan SC with Mr B Murphy	Best Hooper

HIS HONOUR:

Introduction

Dr Mark Freilich is an interventional cardiologist and consultant who wishes to convert the single-storey house at 201 Wattletree Road, Malvern into consultation rooms for medical specialists. As the property is subject to a covenant providing that the building ‘shall not be used for any trade or business’, he has applied to the court under s 84(1)(c) of the Property Law Act 1958 (Vic) for modification of the covenant.

The house is part of the historic Coonil Estate. In Prowse v Johnstone,[1] Cavanough J recently rejected an application for modification of a similar covenant applying to another house in the estate just four properties to the west at 191-193 Wattletree Road. In that judgment, his Honour gave the following description of the estate:

The Coonil Estate was originally owned by the Langmore family. In 1886 they constructed a mansion on the western portion of it. The Estate was subdivided into 63 allotments in 1910. Lot 1, a site of some three acres on which the mansion stood, was retained. In 1919 Lot 1 was acquired by the Sisters of Mercy and the mansion was used by them as a private hospital until 1948. Thereafter Lot 1 was taken over by another order of Sisters associated with the worldwide Cabrini Association. They founded a new hospital, Cabrini Hospital, which evolved and expanded and is now one of Melbourne’s leading hospitals. There has also been a lawn bowling club within the Coonil Estate for many years. Otherwise, since its establishment, the Estate has generally consisted of good quality residential properties presenting as detached houses…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Freilich v Wharton

Details

AGLC: Freilich v Wharton [2013] VSC 533
Case: [2013] VSC 533
Decision Date: 22 OCTOBER 2013

CaseChat Overview and Summary

Freilich v Wharton involved a dispute over a restrictive covenant on a property located on a busy corner of a quiet estate with a heritage residential character. The property had a covenant prohibiting the use of the house for trade or business. The applicants sought to remove the covenant to use the house as a specialist medical centre. The central legal issue was whether those entitled to the benefit of the restriction would be substantially injured if the covenant were removed. The court also considered the purpose of the power to approve the modification of a covenant, whether this was a broad power to facilitate land use and development in the public interest, and the principles governing the exercise of this power.

The court found that the power to approve the modification of a covenant was not a broad power facilitating land use and development in the public interest. Instead, the court identified the intended purpose of the covenant as ensuring the residential character of the neighbourhood. The court held that planning considerations were not relevant to whether the ground of modification was established. The court concluded that the likely impact of approving the modification would detract from the residential character of the neighbourhood, and the approval would set a bad precedent for other properties in the area.

The court dismissed the application to remove the restrictive covenant. The court held that the applicants had not established that those entitled to the benefit of the restriction would not be substantially injured if the covenant were removed. The court found that the proposed use of the property as a specialist medical centre would likely detract from the residential character of the neighbourhood. The court held that the approval of the modification would set a bad precedent for other properties in the area. The court found that the applicants had not demonstrated that the intended purpose of the covenant would be served by the approval of the modification.

The court ordered that the application to remove the restrictive covenant be dismissed, and the covenant remain in place.

Orders