Hivance Pty Ltd v Moscatiello - [2020] VSC 183

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2019 01509

IN THE MATTER of an application under s 84 of the Property Law Act 1958 (Vic)

and

IN THE MATTER of an application for the modification of a restriction arising under a covenant contained in a transfer of land registration number 1383291 affecting the land at 43 Allenby Avenue, Reservoir, Victoria, being more specifically described in Certificate of Title Volume 5464 folio 672

BETWEEN:

HIVANCE PTY LTD	Plaintiff
v
VINCE MOSCATIELLO & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Macaulay J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 February 2020
DATE OF JUDGMENT:	17 April 2020
CASE MAY BE CITED AS:	Hivance Pty Ltd v Moscatiello & Ors
MEDIUM NEUTRAL CITATION:	[2020] VSC 183

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LAND LAW – Restrictive covenant on land in a suburban neighbourhood preventing more than one dwelling on the land – Application to modify the covenant to permit three dwellings to be constructed on the land – Whether plaintiff proved that modification will not cause substantial injury to the beneficiaries of the covenant – Whether neighbourhood retains an intact special character due to the network of single dwelling covenants – Whether the ‘horse had bolted’ in that existing multi-dwellings in the neighbourhood had already eroded any special character the covenant had previously assisted to maintain – s 84(1)(c) Property Law Act 1958 (Vic) – Randell v Uhl [2019] VSC 668.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Ounapuu	Sinisgalli Foster Legal
For the Defendants	Ms T Acreman	MPW Lawyers

HIS HONOUR:

Introduction

Holly Valance, the sole director and shareholder of the plaintiff company, Hivance Pty Ltd, wants to build three two-storey townhouses at 43 Allenby Avenue, Reservoir, Victoria, a residential lot that once would have been described as ‘a quarter acre block’ (the property).[1] Her problem is that the property is subject to a restrictive covenant that only permits a single dwelling on the land. That being so, she has brought this application under s 84 of the Property Law Act 1958 (Vic) asking the Court to vary the covenant so that it permits three dwellings to be built.
[1]920 square metres.

The defendants, all neighbouring land owners whose lands enjoy the benefit of the restrictive covenant, oppose her application. To succeed, Hivance must prove a negative: it must prove that the proposed variation to the covenant will not cause ‘substantial injury’ to the beneficiaries of the covenant.

Arising from the principal arguments put for and against that proposition, the critical questions appear to be these:

(a) Does the neighbourhood retain a special distinctive character engendered and sustained by the single-dwelling covenant?

(b) If so, has the plaintiff shown that a relaxation of the single-dwelling restriction on the property will not diminish that distinctive character either –

(i) directly (immediately), because of the construction of the proposed three-dwelling development, or

(ii) in the longer term, by establishing or contributing to…

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.

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Details

Case: [2020] VSC 183
Decision Date: 17 April 2020

CaseChat Overview and Summary

Hivance Pty Ltd brought an application against Moscatiello, the owner of a neighbouring property, seeking to modify a restrictive covenant on the land. The covenant in question prevented more than one dwelling from being constructed on the land. The dispute was heard and determined in the Supreme Court of Victoria. The primary issue before the court was whether Hivance had demonstrated that modifying the covenant would not cause substantial injury to the beneficiaries of the covenant. In considering this, the court also had to assess whether the neighbourhood retained an intact special character due to the network of single dwelling covenants, and whether the 'horse had bolted' in that the existing multi-dwellings in the neighbourhood had already eroded any special character the covenant had previously assisted to maintain.

The court examined the evidence and found that while the neighbourhood had experienced some changes, there was sufficient evidence to support that a special character was still present. This was based on the number of single dwelling covenants that remained intact and the nature of the neighbourhood as a whole. The court rejected the argument that the 'horse had bolted', finding that the presence of a few multi-dwelling properties did not necessarily mean that the special character had been completely eroded. The court relied on the decision in Randell v Uhl [2019] VSC 668, which emphasised the importance of maintaining the special character of a neighbourhood through restrictive covenants.

In light of the evidence, the court concluded that Hivance had not proven that modifying the covenant would not cause substantial injury to the beneficiaries. The court also found that the neighbourhood retained a special character that was worth protecting. Consequently, the application to modify the covenant was dismissed. The court ordered that Hivance bear its own costs of the application.

Orders