Hermez v Karahan

The case involved an application to have a covenant restricting a property to single dwelling use removed. The parties were Hermez, the applicant seeking removal of the covenant, and Karahan, the respondent who sought to enforce the covenant. The dispute was heard in the Supreme Court of Victoria. The court had to determine whether the single dwelling restriction was obsolete and whether its removal would substantially injure those entitled to the benefit of the restriction. The case hinged on the interpretation of section 84 of the Property Law Act 1958 (Vic), which provides for the modification or removal of restrictive covenants if they are obsolete or if their removal would not substantially injure any party entitled to the benefit of the restriction.

The court examined the principle that a covenant may be considered obsolete if it is no longer necessary to protect the interests of the party entitled to its benefit. Additionally, the court considered whether the removal of the covenant would cause substantial injury to the respondent, Karahan. The court found that the covenant had become obsolete because the circumstances that originally justified its imposition no longer existed. The court also determined that the removal of the covenant would not substantially injure Karahan, as the covenant was no longer necessary for the protection of her interests.

In light of these findings, the court exercised its discretion under section 84 of the Property Law Act 1958 (Vic) to remove the covenant. The court concluded that the covenant was obsolete and its removal would not substantially injure Karahan. Consequently, the court granted Hermez’s application to remove the single dwelling restriction on the property. This decision provides a useful precedent for future cases involving the modification or removal of restrictive covenants under similar statutory provisions.