ITMA by Tu and Yew
[2018] VSC 738
•27 November 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2018 01327
IN THE MATTER of an application pursuant to section 84 of the Property Law Act 1958 for the modification of a restrictive covenant
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IN THE MATTER of an application for the modification of the restriction arising under a covenant in a transfer of land registered no. C465254 dated 5 March 1966 affecting the land at 154 Through Road, Camberwell being lot 8 on plan of subdivision no. LP 25153 and being the land in folio of the Register volume 8628 folio 164 by:
| JIM SENG TU and LIN LIN YEW | Plaintiffs |
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JUDGE: | Mukhtar AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 November 2018 |
DATE OF JUDGMENT: | 27 November 2018 |
CASE MAY BE CITED AS: | ITMA by Tu and Yew |
MEDIUM NEUTRAL CITATION: | [2018] VSC 738 |
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REAL PROPERTY — Restrictive covenant — Restriction to single dwelling and single storey — Restriction to brick masonry and tiled roofing — Established suburb with no nearby multiple dwellings or dual occupancies — Presence of double storey dwellings — Absence of similar type of covenant in neighbourhood — Limited number of beneficiaries of covenant — Proposed development of two dwellings having common wall using non masonry cladding and roofing — No objectors to application — Plaintiffs’ onus to show no substantial injury — Whether possible precedential effect is injurious — Injury to beneficiaries not demonstrable — Application to modify covenant allowed
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr D P Lloyd | Aughtersons Lawyers Pty Ltd |
| No appearance by any objector |
HIS HONOUR:
On 19 November 2018, at the conclusion of argument, the Court announced it would allow this application to modify a restrictive covenant on the plaintiffs’ land. The application was unopposed. It is not always the case in these applications, but there are features of the case that move the Court to give these reasons concerning a part of this well-established residential area to ensure residents in the nearby or greater neighbourhood, and uninvolved in this application, understand the basis of the decision and the confinement to its facts and its particular locality. I frequently read evidence in these application of residents who ring an applicant’s solicitor to enquire and say ‘Well if they bought a place with a covenant why don’t they stick with it?’
The plaintiffs are the registered proprietors of the land at 154 Through Road in Camberwell. The land is rectangular in shape with an area of 616.7 square metres. The land is about 150 metres away from an intersection with Riversdale Road. There are nearby shops and other businesses. Through Road is a major distributor road that extends in a southerly direction to Toorak Road.
The plaintiffs’ land is burdened by a restrictive covenant made in a transfer of land dated 5 March 1966. A covenant that restricts land usage is not a statutory imposition. It is a private promise to restrict land use given for the benefit of other land. The promise runs with the land. Under that covenant, the plaintiffs as successors in title have bound themselves not to:
… excavate carry away or remove from the land … any earth clay stone gravel or sand except for the purpose of preparing for the foundations of any building to be erected thereon and that we will not at any time hereafter erect upon the land … any building other than one detached private dwelling house of one storey only with the usual and necessary garage and outbuildings and that any such dwelling house garage and outbuildings shall not be of any construction other than brick or brick veneer with a tiled roof …
The plaintiffs propose to demolish the existing dwelling and build two new double-storey dwellings on the land in a side-by-side arrangement; that is, a dual occupancy or two households divided by a common wall. Both dwellings will be accessed by one double‑width crossover in the centre of the frontage from Through Road. The proposed architectural drawings of this dual occupancy development show that each dwelling would have a two-car basement garage with turntable, and small swimming pools in the back yard. That will require excavation and soil removal beyond that which is specifically permitted in the covenant. The elevation and section drawings in evidence show the land has a distinct slope from front to back so that at the rear of the property the basement will appear to create a third level to a height of 10 metres. The plans also shows a flat roof to reduce the overall building height, to be made with metal decking behind parapet walls so as to not be visible from the ground. The external walls of the building are to be constructed and clad in a range of materials other than brick. The proposed building materials are outside the covenant.
The plaintiffs have applied under s 84(1)(c) of the Property Law Act for a modification of the restrictive covenant to enable the construction of two dwelling houses; to remove the single storey limitation; to enable construction materials to be used other than brick or brick veneer with a tiled roof; and to allow for additional excavation on the land. The Court has power under that provision to modify the covenant if the proposed modification ‘…will not substantially injure the persons entitled to the benefit of the restriction.’ It is very important to understand that the injury has to be not substantial. Moreover, the injury with which the Court is concerned is not to any landowner in the immediate or greater neighbourhood, but substantial injury to those landowners who at law have the benefit of the covenant and thus the legal standing to object to the application. They are the ones to whom the covenant has been given privately. That is why the Court’s notification orders in these proceeding inform recipients that this is not a planning application.
Whether or not a landowner has the benefit of the covenant depends on the words of the covenant and the timing of transfers of land in the subdivision, according to title searches. However, if the covenant is modified, and the plaintiffs proceed to apply for a planning permit for their proposed development, then those approval processes will involve public notice to landowners affected by the proposal (whether they be beneficiaries of the covenant or not) with the opportunity to lodge objections to the responsible local authority in a process outside the Court.
The Court is not a planning authority, and the standards or protective measures in operative planning and building controls cannot of themselves be used to justify a modification of a covenant. But, statutory planning provisions could matter to show ― realistically ― the result of a proposed modification of the covenant. In the case of a single dwelling covenant (which is by far and away the most common covenant sought to be modified) the Court looks to substantial injury consonant with the purpose of a single dwelling covenant, which is: to establish a relatively quiet and low density environment; to contain overbuilding; to create a spacious feel in a neighbourhood usually with front and back yards; to make for lesser traffic; and generally make for a feel of being less densely populated. In contemporary times, these things come to be debated in wider planning and socio-economic circles in response to the ageing of the covenants, vast improvement in the aesthetic appeal of building design and external building materials; better roads and amenities and municipal infrastructure and planning controls; the housing needs of a growing population, and a desire by people (not just commercial developers) to make a greater economic use of their land.
This application has proceeded as unopposed. That is, according to facts I will expose shortly, there are no beneficiaries of the covenant who have come forward to object that the application will cause them substantial injury. This is significant. But, the absence of any opposition does not relieve the plaintiffs of their onus under the Act to show that their proposed modification to the covenant will not cause substantial injury to the beneficiaries. It is also important to understand that the question of substantial injury is referrable not to the interests of all or any land owners in the immediate or greater neighbourhood. It is referrable only to the persons entitled to the benefit of the restriction. The interests of non-beneficiaries may come to play a part in the processes undertaken by the responsible authority when it comes to considering the plaintiffs’ eventual application for a planning permit, if the covenant is first modified or discharged.
The plaintiffs’ application is supported by a planning report prepared by Mr Robert Easton who is a planning, development and subdivision consultant. The Court comes to depend on these type of reports as there standards have risen to comprehensively set out the facts concerning the subdivision of the area, the history of transfers from previous titles, a photographic depiction of the neighbourhood and the features or the land use on each of the lots within the relevant subdivision, an explanation of some planning considerations, and the proposed development. Whilst Mr Easton gives the opinion that the modification sought here will not cause substantial injury, and has the qualifications to do so, that ultimate question is of course a matter for the Court.
I need not rehearse the history of the land title or the subdivision. Under the relevant transfer of land, the covenant made by the plaintiffs’ predecessors in title was with the vendors as well as ‘their heirs executors administrators and transferees registered proprietors or proprietors for the time being of the land remaining untransferred in the said Certificate of Title … ‘. The certificate of title is the parent title, and the parent title originally comprised seven Lots of land and the road reserve for Weafgreen Court, all of which was contained in plan of subdivision 25153 created in April 1953. For present purposes I can put aside the road reserve for Weafgreen Court as having the benefit of the covenant. What matters is that out of 20 lots in the plan of subdivision, only six of the original lots have the benefit of the covenant. Moreover, only four lots (including the plaintiffs’) are burdened by a single dwelling covenant. That is significant. It shows this subdivision or part of the greater neighbourhood is not to be characterised as having been, schematically or effectively by pattern, marked out as requiring a single dwelling area by private land dealing over time.
To illustrate that, attached to this judgment are the two sheets comprising the plan of subdivision LP25153. I have annotated the plan to show the subject land (shaded red), the benefitting lots (circled in green) and other annotations to show those lots which are covenant free and which have two storey dwellings. But, according to the report, there are no dual occupancies in the subdivision and no multi-unit developments within the subdivision.
On 25 September 2018, on the first return of the plaintiffs’ motion, the Court made routine orders for the giving of notification of this application to beneficiaries. The orders made that day required direct postal notification to be given to all six beneficiaries; that is, to the owners of Lot 4 (No 8 Quinton Road); Lot 5 (No 164 Through Road); Lot 6 (No 162 Through Road); Lot 7 (No 160 Through Road); Lot 10 (No 150 Through Road); and Lot 11 (No 148 Through Road). The Court’s orders also required service of colour copies of the concept plans and the elevations and sections for the proposed development, and a document titled ‘Information for Objectors’ that is prepared by the Court to enable objectors to have some basic information to understand the significance of the application, the procedural steps, and their right to object.
The plaintiffs’ solicitor, Glen Andrew Edgerton, has sworn an affidavit which proves service of the notification.[1] His affidavit states that he has had contact from two people. First, he had contact from the owner of Lot 4 who ‘ … indicated that she had queries regarding the proposal’ and did not agree with it suggesting that the plaintiffs’ property was too small. She then suggested that it appeared unfair and what was the point in having a covenant if it can be modified and that the matter would end up in Council chambers? Nothing more has been received from her and she did not appear in court. Secondly, on 22 October an email was received from a Legal Assistant at Danaher Legal on behalf of the owners of Lot 20, that is, No 1 Weafgreen Court. The side boundary of that property is perpendicular to the plaintiffs’ rear boundary. It seems to me that such is the lay of the land, Lot 20 will have a prominent view of the plaintiffs’ development (with basement), particularly as the plaintiffs’ land slopes down to that boundary, and stands to be affected by the proposal. The e-mail on behalf of the owner of Lot 20 contended that all 20 lots on the plan of subdivision have the benefit of the covenant and their client should have also been notified of the application. Mr Egerton swears that he sent the planning report to the lawyers for the owners of Lot 20. That report states that Lot 20 does not have the benefit of the covenant. Nothing more has been heard from, or on behalf of, that landowner.
[1]Dated 31 October 2018.
As the annotations on the attachments to this judgment show, the evidence shows that only Lots 4, 5, 6, 7, 10 and 11 had the benefit of the covenant. Lot 7 is the land next to the plaintiffs’ land to the north. It does not have a single dwelling covenant. The land immediately to the south of the plaintiffs’ land (Lot 9) does not have the benefit, but is burdened by a single dwelling covenant. And, as I have said, the land at Lot 20 which adjoins the rear boundary of the plaintiffs’ land does not have the benefit of the covenant.
There are some additional facts. Lots 1, 2, 3, 4, 5, 6 and 7 do not have a restrictive covenant burdening the land. As the annotations show, within those seven lots, there are four double-storey dwellings. As for Lots 10 and 11, those lots have covenants but there is no limit on the number of residences that may be built or how many storeys. Lot 10 has a double storey residence. Thus, when it comes to assessing substantial injury on this application to those having the benefit of the covenant, the fact is that none of the beneficiaries have land that is burdened by a single dwelling or a single storey covenant. That means they are at liberty as landowners, subject to planning approvals, to build more than one residence or dwelling of greater than one storey of non-masonry building materials. That is a most important consideration as the Court’s responsibility under the statute, regardless of planning laws, is to assess whether there will be any substantial injury to those having the benefit of the covenant.
Likewise, remaining faithful to the relevant neighbourhood being represented by LP 25153, out of the nine lots that surround the ‘bulb’ of Weafgreen Court, only Lot 20 and Lot 15 are burdened by a covenant. Moreover, within that court, there are four instances of double-storey constructions.
I took my own unaccompanied view of the area on Sunday, 18 November 2018. Through road is quite a wide road. This is a leafy and attractive locality. I could not see in the nearby any instances of apartments, or conspicuous dual occupancies or multiple dwellings on a single lot. But there are certainly instances of large and conspicuous double-storey dwellings in what would be described as a family area.
Approaching it from the viewpoint of direct impact on those nearby (a propinquity test) it is obvious that Lots 7, 9 and 20 would obviously be affected. But, the owners of Lot 7 next door have made no objection. Lot 9 next door is not a beneficiary. Lot 20 in Weafgreen Court is not a beneficiary.
Thus it comes down to the indirect impact of the proposed modification. Although the application was unopposed, an unavoidable question arises whether the granting of this application would create a substantial injury in creating a legal precedent for others in the neighbourhood to apply to do the same thing. This apprehension of allowing ‘the thin edge of the wedge’ or opening the floodgates has been accepted by legal authorities as being a relevant factor in applications where the substantial injury is the likely erosion of the overall pleasantness and quiescent milieu of a single dwelling area.
The floodgates argument, without a propounder, is to my mind a policy type way of thinking unless a propounder can establish a neighbourhood as having a distinct single dwelling quality, underlying which is a cohesive presence of single dwelling covenants that have remained in place to preserve that feature of the neighbourhood and presumably creates an attraction to prospective purchasers looking for an area that is ‘protected’ by single dwelling covenants as a guard against future overdevelopment or altered housing density. Otherwise, it is not implausible to think that beneficiaries may not object to these applications because they may wish to preserve the possible desire to do the same thing themselves.
So much depends on the individual case. I think the floodgates argument could be tenably made here, but I think it lacks sufficient strength. That is because there is no cohesive pattern of single dwelling or single storey covenants to enable it to be said that this neighbourhood is by origin or design or scheme a single dwelling area. That is its feature, but as I have exposed, most of the neighbourhood is not burdened by a single dwelling or a single storey covenant. Thus, subject to planning approvals, they or any purchasers of their land are at liberty to build more than one dwelling of more than one storey.
Secondly, one must keep steadily in mind the requirements of the statute that the proposed modification will not substantially injure the persons entitled to the benefit of the restriction. As I have said, the perceived and recognised benefit of a single dwelling covenant is to preserve the tranquillity of an area, to preserve the spaciousness of an area, and to keep a control on the population or the occupants in a neighbourhood. That is, the benefit of having the one household per one block. It is frequently argued in these applications that the presence of a single dwelling covenant would not, subject to planning restrictions, prevent an owner from building a very large and imposing, possibly aesthetically horrible building which would surpass in adverse impact the presence of a dual occupancy or even multiple dwellings. It is a questionable argument because, even if it be an imposing or overbearing single dwelling, the fact is: it is still a single dwelling faithful to the covenant. Questions of height or set back or overshadowing are matters for the planning authority when assessing an application for a planning permit.
Thus build form does not transform a two household development into a single dwelling or create equivalence. I think the right legal approach is to focus on the statutory phrase ‘substantial injury’. Put in other words, in this case, will adding another household in a single lot inflict a substantial injury? In this case what is proposed is the erection of a building which, by design intent, is made to look like a single dwelling or at least a monolithic structure with a single driveway. The additional household may lead to increased human activity (not necessarily a bad thing) and a perceived sense of reduction of spaciousness. But the question is: would that be a substantial injury to those having the benefit?
I formed the view that the modification here according to the proposed plans would not. I do not see substantial injury to the ‘quality of life’ for the beneficiaries in this subdivision in permitting two households in the one lot in a subdivision where the single dwelling restriction exists only in a minority of the Lots, and the majority of Lots have no restriction. Secondly, I see no substantial injury in allowing a second storey as there are many instances of two storey developments in the neighbourhood. Thirdly, I see no substantial injury in allowing additional excavation for a basement and swimming pool. That is reasonable and necessary even for a single dwelling as part of the use and enjoyment of the land. Then there is the brick and tiled roof restriction. I think that restriction is designed to prevent the weather board home and the corrugated iron roof, once regarded as mediocre or worse. The planning report cites instances in this neighbourhood of homes with cladding material other than brick and steel deck carports. I adhere to what was said in Re Hammond[2] that:
In these sorts of covenants, the courts recognise the reality that in the last 100 years the type, durability, and aesthetic quality of construction materials has so markedly changed and advanced that the Court looks to see if there are any special benefits of a ‘bricks and stone covenant’ that might be taken away unjustly if the application is granted.
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The Court can only suppose that the ‘bricks and stone covenant’ had as its intent the desirability of maintaining what might have once been perceived as the aesthetic displeasure of timber or weatherboard homes and the perception that such dwellings not only lacked the permanence of bricks and masonry but might have also been regarded as ‘lessening’ the appeal or housing standards of a better area, or possible being a fire hazard. These things are now very much debatable. But even so, the fact is the availability of high grade, everlasting and aesthetically high grade materials and finishes cast serious doubt on views that might have been had over a century ago about building materials.
[2] [2015] VSC 608, [22]-[26].
It is for those reasons, the Court was willing to allow the application.
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