Re Comdain Homes Pty Ltd
[2013] VSC 487
•11 September 2013
| Do Not Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2013 2772
IN THE MATTER of the Property Law Act 1958, section 84(1)
and
IN THE MATTER of a restriction imposed by Instrument of Transfer No. 1086247 registered in the Land Registry on Certificate of Title Volume 5152 Folio 351
and
IN THE MATTER of an application by COMDAIN HOMES PTY LTD (ACN 092 279 918) for the discharge or modification of the restrictive covenant contained in Instrument of Transfer No. 1086247 registered in the Land Registry in the Register Book and imposed upon the land more particularly described in Certificate of Title Volume 5152 Folio 351
WHEREIN
COMDAIN HOMES PTY LTD (ACN 092 270 918)
is Plaintiff
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JUDGE: | Derham AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 August and 11 September 2013 | |
DATE OF JUDGMENT: | 11 September 2013 | |
CASE MAY BE CITED AS: | Re Comdain Homes Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2023] VSC 487 | |
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REAL PROPERTY – Restrictive covenant – Application for modification – Applicable legal principles – Covenant restricting erection on the land of any building other than one house not to be used for any purpose other than as a private dwelling or as bank premises– Application to modify to include use as a display home for two years – Whether modification will not substantially injure the persons entitled to the benefit - Application granted – Property Law Act 1958, section 84(1)(c).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Chiappi | Hunt and Hunt |
| For the Objectors | Mr P. Tibballs, in person | |
| For the Boroondara City Council | Mr C. Cantor, solicitor | Maddocks Lawyers |
HIS HONOUR:
Introduction
By originating motion filed on 31 May 2013, the plaintiff applies pursuant to s 84(1) of the Property Law Act1958 (“the Act”) that the restrictive covenant, contained in Instrument of Transfer No. 1086247 registered on the property situate and known as 629 Whitehorse Road, Surrey Hills, Victoria, being the land more particularly described in Certificate of Title Volume 5152 Folio 351, and being Lot 3 on Plan of Subdivision 007993 (“the Land”), be modified.
On 11 June 2013, I made orders for notice of the application to be given to the registered proprietors of four properties having the benefit of the covenant. They are the successors in title of transferees that took their respective lots after the subject land was transferred out of the parent tile. These included the mayor, counsellors and citizens of the City of Camberwell, now the Boroondara City Council (“the Council”).
In the usual way, the notice required that persons entitled to an estate or interest in land in the subdivision who may be entitled to enforce the covenant and to oppose the application give written notice to the plaintiff’s solicitors and to the Prothonotary.
The Council gave such notice, as did one Mr Peter Tibballs, of 4 Smythe Avenue, Mont Albert,[1] two doors up from the Land. Eric Lam, on behalf of his parents Mr Wai Yuen Lam and Mrs Suk Mui (Anna) Lam notified the plaintiff’s solicitors that his parents opposed the removal or amendment of the covenant.
[1]Lot 35 on Plan of Subdivision 7993.
The executor of the estate of Dorothy May Ballard, of 15 Smythe Avenue, Mont Albert, being Lot 26 on the Plan of Subdivision, was also given notice and has indicated that she does not oppose the modification.[2]
[2]Letter from Cornwall Stodart, solicitors, to Hunt & Hunt, solicitors for the plaintiff, dated 20 June 2013, being Exhibit 1, tendered on 30 August 2013 without objection.
Mr Tibballs’ land is not benefitted by the covenant. Nevertheless, he sought to appear and represent the owners of two properties to whom notice had been given and who did have the benefit of the covenant, namely:[3]
(a)David Murray Robinson and Bruce Thomas Robinson as the legal personal representatives of Thomas Trevor Robinson, the registered proprietor of Lot 44 on the subdivision, being 22 Smythe Avenue, Mont Albert; and
(b)Suk Mui Lam and Wai Yuen Lam, the registered proprietors of Lot 43 on the subdivision, being 20 Smythe Street, Mont Albert.
(“Robinson and Lam Owners”)
[3]These proprietors had purported to authorise Mr Tibballs, in writing, to represent them.
Mr Tibballs is not a legal practitioner and has no right to represent those proprietors having the benefit of the covenant. However, in order to avoid cost and expense, the plaintiff consented to the Court hearing what Mr Tibballs had to say. The plaintiff did not seek to add any objector as a defendant, nor did the Council or any objector seek that course.
The representative of the Council, Mr Cantor, solicitor, did not oppose the modification in fact sought, which was a little different from the modification advanced in the originating motion.
Under Rule 52.09(2) of the Supreme Court (General Civil Procedure) Rules 2005, a determination is to be made as to whether the plaintiff has made enquires or given notices in accordance with the order made under Rule 52.09(1). Under Rule 52.09(3), this must be done before the application can proceed.
The plaintiff submitted that it is appropriate for the Court to determine that the notices as ordered have been duly given. I am satisfied, by the affidavits of service filed by the plaintiff, that the notices ordered to be given by order made on 11 June 2013 have been duly given and will by order so declare.
The restrictive covenant
The restrictive covenant provides, so far as relevant, that:
"…..and the said Francis Michael Burke doth hereby for himself his heirs executors administrators and transferees registered proprietor or proprietors for the time being of the lands comprised in this transfer or any part or parts thereof covenant with the said Carlyle Greenwood Smithe and The Union Trustee Company of Australia Limited and their transferees registered proprietor or proprietors of the balance of the land comprised in Certificate of Title Volume 4372 Folio 874236 that he the said Francis Michael Burke his heirs executors administrators and transferees registered proprietor or proprietors for the time being of the lands comprised in this transfer or any part or parts thereof will not erect or permit or allow to be erected on any one of the lots comprised in this transfer any building or erection other than one house and that any house so built shall not be used for any purpose other than as a private dwelling house or as bank premises….” [emphasis added].
The modification
The originating motion sought the discharge of the covenant, or alternatively, its modification by amending the use, so that the Land may be used as a display home for the public to access and view the Land and its improvements.
Mr Chiappi of Counsel, who appeared for the plaintiff, only sought modification of the covenant so that the Land may be used as a display home, and then only for a limited period of 2 years or so.
Those proprietors having the benefit of the covenant for whom Mr Tibballs spoke were not, and Mr Tibballs was not, it seems, aware of this change to the modification proposed by the plaintiff; that is, limiting its operation to 2 years or so.[4] It therefore became appropriate for Mr Tibballs to inform those he spoke for of this change so as to ascertain whether they continued to oppose the modification and, if so, to enable them, if they were so minded, to appear, or obtain representation, so as to make submissions in opposition to the modification.
[4]I note however that in reasons given by the Member of the Victorian Administrative Appeals Tribunal when affirming the decision of the Council to refuse the issue of a planning permit to use the Land as a display home (as to which see below at paragraph [27]), the plaintiff had apparently notified the Tribunal and the objectors, of whom Mr Tibballs was one, that the proposal was to seek a modification limited to 2 years.
I therefore adjourned the further hearing of the application to 11 September 2013 to enable either the beneficiaries opposing the modification, or Mr Tibballs on their behalf, to make their views known.
Background facts
The Land was formerly one of a number of lots contained in certificate of title Volume 4372 Folio 874236 (“the Parent Title”). The Parent title was created in 1920 and has been cancelled.
On 24 January 1923, the Land and another 36 lots in the Parent Title were transferred, by Instrument of Transfer 1086247, to Francis Michael Burke. That Transfer contained the covenant in question. The searches of the parcels of land that were the balance of the land in the Parent Title at the time of the transfer of the Land, and therefore have the benefit of the covenant, are as set out in the following table.
Lot
Title of Benefited Lot
Registered Proprietor
Lot 43 on PS 007993 V 10679
F 342
Wai Yuen Lam and Suk Mui Lam of 20 Smythe Avenue, Mont Albert, Victoria 3127 Lot 44 on PS 007993 V 6105
F 812
David Murray Robinson of 28 Eton Road, Lindfield, NSW 2070 and Bruce Thomas Robinson of 5 Langley Way, Booragoon, WA 6154 as Legal Personal Representatives of Thomas Trevor Robinson (deceased) Lot 58 on PS 007993 V 5174
F 669
The Mayor, Councillors and Citizens of the City of Camberwell Lot 26 on PS 007993 V 4761
F 169
Dorothy May Ballard of 15 Smythe Avenue, Mont Albert, Victoria 3127
There are 32 lots burdened by the covenant.
The plaintiff became the registered proprietor of the Land on 7 April 2011. It has built a single dwelling on the land and wants to use the Land and dwelling as a display home; that is, to use the land and dwelling for display to encourage people to buy or construct similar dwellings.[5]
[5] Display home is defined at clause 74 of the Boroondara planning scheme as A building constructed as a dwelling, but used for display, to encourage people to buy or construct similar dwellings.
The construction of the building does not breach the covenant – if the covenant is not modified, the building is a dwelling and can be immediately used as such. It is the use of the land as a display home that will contravene the covenant. That use will in any event require the grant of a planning permit. The permit will address the prospect of offsite impacts.
The location of the Land and the neighbourhood
The plaintiff relies on the evidence of Marco Negri, town planner. Mr Negri’s evidence is in the form of a report dated May 2013 (“Report”).[6] It is an exhibit (TR-8) to the affidavit of Tony Raunic sworn 31 May 2013. In the Report, Mr Negri describes the location of the Land and the characteristics of the neighbourhood. What follows is taken from that Report.
[6]In addition, on 6 September 2013 Mr Negri swore an affidavit as to his qualifications and experience and made the declaration required by r.44.03(2)(h) of the Supreme Court (General Civil Procedure) Rules 2005.
The Land is on the north-east corner of Whitehorse Road and Smythe Avenue, Mont Albert (also known as Surrey Hills). Appendix A contains a copy of a location plan showing the Land and the benefitted lots. Whitehorse Road, as is well known, is a Main Road, which hosts a tram route. Union Road is one block (5 titles) to the west. It is what Mr Negri describes as a ‘higher order road’, which provides a north – south connection between Balwyn to the north and Surrey Hills.
The residential precinct to the north of the Land is characterised by single dwellings generally set within established gardens. The architectural styles vary and include single and double story houses. Along the section of Whitehorse Road between Union Road and Barloa Road the properties are mostly single detached dwellings, except:
(a)619 Whitehorse Road, on the north-east corner of Union and Whitehorse Roads, is a Council-owned public car park (opposite a shopping precinct on Whitehorse Road);
(b)621 Whitehorse Road (immediately to the east of the car park) is used for the purposes of a medical centre. This property was also burdened with the same covenant which was modified in 2002 by the Council granting a permit permitting the modification;[7]
(c)A multi-dwelling development at 10 to 12 Smyth Avenue;[8] and
(d)A park north of Carlyle Crescent and east of Union Road on what was Lots 57, 58, 60, 61, 62, 63 and 64 (marked on the plan in Appendix A as 279 Union Road).
[7]See Report of Mr Negri, paragraph 57.
[8]Mr Negri refers to there being three dwellings on this land. Mr Tibballs’ evidence is that there are only two. Even if this is correct, it is still an exception to the single dwelling character of the neighbourhood.
Mr Negri’s Report refers to the fact that the plaintiff lodged a Planning Application with the Council on 20 September 2012 seeking approval to use the land for the purpose of a display home. The Planning Application was advertised and attracted 2 objections. At the time of the application the house now on the Land was under construction. It is a large two-story dwelling with a swimming pool and an area at the rear (north) abutting a laneway, which appears to be set aside for use as a car park.
Mr Negri also refers to, and apparently relies upon, the Statutory Planning Delegate Report to the Council (called by Mr Negri the “Council Officer Report” and attached to his report as Attachment 5). This Council Officer Report records that the Planning Application included provision for 5 car parking spaces at the rear, accessed via the rear laneway from Smythe Avenue, but that these spaces are yet to be constructed. It notes that if they were, they would not unreasonably affect the neighbourhood character of the area. The Council Officer Report also dealt with grounds of objection advanced by the objectors and concluded:
(a)In relation to the objection that the use would result in increased traffic, particularly in Smythe Avenue, the Report concluded that the proposed display home will not create significant amounts of traffic volume;
(b)In relation to the impact on amenity and disruption, the Report concluded that the application has generally good compliance with Discretionary Uses Policy (which deals with such things as location, hours of operation, access, setbacks, noise, rubbish, duration of use and location of car parking);
(c)In relation to insufficient parking and impact on traffic flow in Smythe Avenue, the Report concluded that the carparking from the rear laneway would require carefully placed and worded direction signs to assist future visitors in finding the car parking; and
(d)In relation to there being no cross-over to Whitehorse Road, the Report concluded that it is not relevant.
The Planning Application was refused on the sole ground that the proposed use is in breach of the restrictive covenant.
The plaintiff applied to the Victorian Civil and Administrative Tribunal to review the refusal to grant the planning permit. On 13 August 2013, the plaintiff sought leave to withdraw the application and, in consequence, the decision of the Council to refuse the permit application was affirmed.[9]
[9]Exhibit 4 to the affidavit of Peter Tibballs sworn 29 August 2013, filed without objection from the plaintiff.
Mr Negri was asked to consider whether the proposed modification of the covenant would satisfy the tests in s 84(1)(a) of the Act, and concluded (at least in relation to the first limb of that section) that in his opinion it did not, principally because detached housing and residential use is the dominant character of the neighbourhood.[10]
[10]Report paragraph 60.
Mr Negri did conclude, however, that in his opinion the proposed modification satisfied the test in s 84(1)(c) of the Act as it will not substantially injure the persons entitled to the benefit of the restriction.[11]
[11]Report paragraph 78.
That opinion of Mr Negri’s was based on the following factors:
(a)The four properties with the benefit of the covenant over the subject land lie between about 150m and 350m from the subject land.[12] Thus, the subject land is distant from the properties with the benefit of the covenant.[13]
(b)Display homes are not unusual in residential areas.[14]
(c)The differences in appearance and function of the land as a display home and a dwelling include signage, traffic and pedestrian movements during opening hours and car parking associated with the use during opening hours.[15]
(d)The fact that the benefited properties are distant from the Land, when combined with the Land’s location on a main road with access to a side street, is positive from an amenity perspective as the traffic and activity is directed towards the main road.[16]
(e)Traffic and car parking impacts from the proposed use are likely to be confined to Whitehorse Road and the southern end of Smythe Avenue.[17] Additional traffic on Whitehorse Road is unlikely to be discernable. On Smythe Avenue, the additional traffic will not be significant.[18] Parking demand generated by the proposal is likely to be met by parking provided on site.[19]
(f)Although Mr Negri’s report states that parking on site can be accessed from Smythe Avenue, and not from the laneway at the rear (north boundary) of the Land,[20] I was informed by Counsel for the plaintiff (and it is apparent from the Planning Application) that it was proposed, without apparent objection from the City of Boroondara, that access to a car park at the rear of the Land would be made via the laneway that separates the site from the properties to the north.
(g)A display home is typically a temporary use to assist the sale or construction of similar housing. Planning permits typically allow the use for 2 to 3 years.
(h)Mr Negri concludes, as I have said, that the persons with the benefit of the covenant will not be substantially injured by the proposed use. His view is that, even if there were benefitting properties close to the subject land, they would not be adversely affected.
[12]Report paragraph 65.
[13]Report paragraph 71.
[14]Report paragraph 66.
[15]Report paragraph 69.
[16]Report paragraph 70.
[17]Report paragraph 73.
[18]Report paragraph 74.
[19]Report paragraph 75.
[20]Report paragraph 76.
Applicable law
The plaintiff relies only on s 84 (1)(c) of the Act. Section 84 of the Property Law Act 1958 provides, so far as 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)….
(b)….
(c)that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction:
(2)The Court shall have power on the application of any person interested—
(a)to declare whether or not in any particular case any land is affected by a restriction imposed by any instrument; or
(b)to declare what upon the true construction of any instrument purporting to impose a restriction is the nature and extent of the restriction thereby imposed and whether the same is enforceable and if so by whom.”
(3)The Court may before making any order under this section direct such inquiries (if any) to be made of any local authority or such notices (if any) whether by way of advertisement or otherwise to be given to such of the persons who appear to be entitled to the benefit of the restriction intended to be discharged, modified or dealt with as, having regard to any inquiries, notices or other proceedings previously made given or taken the Court thinks fit.
(4)Any order made under this section shall be binding on all persons whether ascertained or of full age or capacity or not then entitled or thereafter capable of becoming entitled to the benefit of any restriction which is thereby discharged, modified or dealt with and whether such persons are parties to the proceedings or have been served with notice or not.
(5)An order may be made under this section notwithstanding that any instrument which is alleged to impose the restriction intended to be discharged, modified or dealt with has not been produced to the Court, and the Court may act on any evidence of such instrument as it thinks fit.
The principles that govern an application to discharge or modify a restrictive covenant under s 84 (1)(c) of the Act may be summarised as follows.[21]
[21]Vrakas v Registrar of Titles [2008] VSC 281, [23]-[48]; see also Prowse v Johnstone & Ors [2012] VSC 4, [97] per Cavanough J.
(a)Whether a person entitled to the benefit of the covenant would be substantially injured within the meaning of s 84(1)(c) is a question of fact.[22] It follows that each case must be decided on its own facts.[23]
[22]Re Alexandra [1980] VR 55, 60.
[23]See Fraser & Ors v Di Paolo & Anor [2008] VSC 117, [43], [58] (“Fraser”).
(b)The applicant has the onus of establishing the matters set out in s 84(1)(c) upon which he or she relies.[24] This means that the applicant must effectively prove a negative.[25]
[24]Re Cook [1964] VR 808, 809, 812 (in relation to s 84(1)(c)); Re Robinson [1972] VR 278, 281; Re Stani (unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 7; Greenwood v Burrows (1992) V ConvR 54-444, 65,192 (“Greenwood”); Re Pivotel Pty Ltd [2000] VSC 264, [28] (“Pivotel”).
[25]Re Cook [1964] VR 808, 812-13; Greenwood v Burrows (1992) V ConvR 54-444, 65,199; Bevilacqua v Merakovsky [2005] VSC 235, [24] (unreported, Ashley J, 30 June 2005) (“Bevilacqua”).
(c)The test for whether a discharge or modification of a covenant would “substantially injure” a person entitled to the benefit of the covenant is similar to that in relation to “practical benefits” in the second limb of s 84(1)(a).[26]
[26]Re Robinson [1972] VR 278, 283; Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 10; Pivotel [2000] VSC 264, [37]; Bevilacqua [2005] VSC 235, [24] (unreported, Ashley J, 30 June 2005).
(d)The emphasis is on the injury suffered by the persons entitled to the benefit. From the nature of the proprietary right arising from the restrictive covenant, the injury must occur in relation to the person’s enjoyment of his or her property.[27]
(e)Whether the proposed discharge or modification “will not substantially injure the persons entitled to the benefit of the restriction” requires a comparison between the benefits initially intended to be conferred and actually conferred by the covenant, and the benefits, if any, which would remain after the covenant has been discharged or modified. If the evidence establishes that the difference between the two (that is, the injury, if any) will not be substantial, the ground in s 84(1)(c) is made out.[28]
(f)The injury must be something more than ‘unsubstantial’, it must be real and not a fanciful detriment.[29]
(g)It is not enough for the applicant merely to prove that there will be no appreciable injury or depreciation in value of the property to which the covenant is annexed.[30]
(h)A lack of specific plans makes it more difficult for an applicant to show that there will be no substantial injury to persons entitled to the benefit of a covenant.[31]
(i)The prospect that, if the application for the discharge or modification of a covenant were granted, that might be used to support further applications in a similar vein, may be relevant.[32] Such “precedent value” may, in an appropriate case, of itself be a factor demonstrating that an applicant fails to establish the requirements in s 84(1)(c).[33]
(j)Town planning principles and considerations are not relevant to the Court’s consideration of whether an applicant has established a ground under s 84(1).[34] However, town planning principles and considerations may be relevant to the exercise of the Court’s residual discretion.[35] “Precedential” issues similar to those discussed above may also be relevant in the exercise of that discretion.[36]
(k)The absence of objectors to the discharge or modification of a covenant will not, in itself, necessarily satisfy the onus of proof.[37]
(l)Even if the matters set out in a limb of s 84(1)(a), or in s 84(1)(c), are proved by the applicant, the Court has a discretion to refuse the application.[38]
[27]Re Cook [1964] VR 808, 810.
[28]Re Cook [1964] VR 808, 810-11; Fraser [2008] VSC 117, [36].
[29]Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 10; Greenwood (1992) V ConvR 54-444, 65,199.
[30]Re Cook [1964] VR 808, 810.
[31]Stanhill Pty Ltd v Jackson & Ors (2005) 12 VR 224, 246 (“Stanhill”); Bevilacqua [2005] VSC 235, [22] (unreported, Ashley J, 30 June 2005).
[32]Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 11; Greenwood (1992) V ConvR 54-444, 65,200; Fraser [2008] VSC 117, [49]–[57].
[33]Greenwood (1992) V ConvR 54-444, 65,200.
[34]Re Robinson [1972] VR 278, 285; Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 6–7; Greenwood (1992) V ConvR 54-444, 65,198; Pivotel [2000] VSC 264, [50]; Bevilacqua [2005] VSC 235, [22] (unreported, Ashley J, 30 June 2005).
[35]Greenwood (1992) V ConvR 54-444, 65,200–65,201; Bevilacqua [2005] VSC 235, [22] (unreported, Ashley J, 30 June 2005).
[36]Greenwood (1992) V ConvR 54-444, 65,201.
[37] Re Cook [1964] VR 808, 812.
[38]Re Cook [1964] VR 808, 810; Re Robinson [1972] VR 278, 285-6; Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 7; Greenwood (1992) V ConvR 54-444, 65,192, 65,200; Stanhill (2005) 12 VR 224, 239.
In Stanhill Pty Ltd v Jackson, Morris J, after considering the ordinary grammatical meaning of s 84(1), the history of the provision and the provision’s policy basis, departed from what he described as the narrow traditional approach to s 84(1) in favour of a more “robust” interpretation of the provision and indicated that, in his view, “some of the restrictions adopted in earlier cases are without justification”.[39]
[39]Stanhill (2005) 12 VR 224, 231, 239–40.
In relation to s 84(1)(c), his Honour concluded, in effect, that it must only be shown that any harm caused to a person entitled to the benefit of a covenant would not be of real significance or importance. In the decision of Fraser v Di Paolo,[40] Coghlan J referred to, but found it unnecessary to express a settled view about Morris J’s comments. In Prowse v Johnstone Cavanough J declined to adopt the approach of Morris J in Stanhill Pty Ltd v Jackson, saying that in his view the longstanding principles should be followed by single judges of this Court unless and until the Court of Appeal or the High Court rules otherwise.[41]
[40]Fraser [2008] VSC 117, [26]–[28], [32]–[36].
[41]Prowse v Johnstone & Ors [2012] VSC 4, [99].
The Court has a discretion as to whether to modify the covenant if s 84(1) is satisfied.[42]
[42]See for example, Vrakas [2008] VSC 281, [67]–[71]; and Suhr v Mechelmore [2013] VSC 284, [47]–[48].
Substantial injury
The question in this case is whether the plaintiff has established a negative, namely that the proposed modification will not substantially injure those persons entitled to the benefit of the restriction. The test is similar to that applying in relation to “practical benefits” in the second limb of s 84(1)(a).[43]
[43]Vrakas [2008] VSC 281, [34].
The plaintiff submitted that, on a comparison of the benefits intended to be conferred and actually conferred by the covenant and the benefits which would remain after the covenant is modified, the difference between the two is not substantial. There is no substantial or real injury, to the persons with the benefit of the covenant, which would result from the modification.
The plaintiff relies on the evidence of Mr Negri, referred to above. The plaintiff submits that:
(a)The proposed use is, of its nature, one that will not have a material or significant impact on its immediate neighbours, let alone properties 150m distant;
(b)The extent of impact from the proposed modification can be readily anticipated. There is no impact resulting from the built form – it is a single house in a neighbourhood of single houses;
(c)The only adverse impacts that can arise are from the nature and frequency of visits to the house by interested buyers. In the nature of display houses, the duration of visits is likely to be relatively short. People will come, look and leave. They may return for a second look. The only activity on site is passive viewing and discussion. The normal use of a dwelling may generate greater activity. The location of the land on the corner of a main road means that vehicular traffic generated by the proposed use is unlikely to be noticed or of any adverse impact;
(d)In terms of the possibility of modification establishing a precedent, it seems unlikely that the modification of the covenant would result in similar uses elsewhere within the neighbourhood. The location of the Land and the opportunity to the plaintiff to redevelop the lot are not circumstances that would appear readily to arise elsewhere. Further, the temporary use with low off-site impacts is one that holds little consequence if it were to be replicated elsewhere within the subdivision;
(e)That for these reasons, the use of the building as a display home will not substantially injure the persons entitled to the benefit of the restriction, and that accordingly this is an appropriate case for the modification of the restriction as proposed.
Mr Tibballs was offered the opportunity to cross-examine Mr Negri, who was available in Court. He declined to do so. He made submissions that ranged widely over matters largely to do with town planning considerations, particularly concerning increased traffic and congestion at the south end of Smythe Avenue. In so far as his submissions concerned matters relevant to the persons having the benefit of the covenant, he submitted that:
(a)The provision for off-street car parking was limited to 5 spaces, and these would be accessed via Smythe Avenue and the laneway. This would cause congestion at the south end of Smythe Avenue and impede reasonable access by those with the benefit of the covenant to their properties further north up that Avenue;
(b)Smythe Avenue is not a wide street. The risk that persons visiting the display home would park on both sides of Smythe Avenue would result in larger vehicles being unable to pass and proceed north up that avenue, thus affecting access by those with the benefit of the covenant to their properties;
(c)Visitors to the display home were likely also to park on Whitehorse Road, leading to egress from Smythe Avenue being more hazardous;
(d)The modification established a precedent.
On the adjourned date, Mr Tibballs duly appeared and sought leave to file an affidavit on behalf of the Robinson and Lam Owners. He deposes that he sought their views on the acceptability of the plaintiff’s revised proposed amendment to limit the use of the premises for a period of two years, or so, as a display home and as to what their preference was for the commencement of that period. He reports that the Robinson and Lam Owners can accept the revised modification to the covenant with an effective period of two years, but that the effective date should be from 31 March 2013 when, it is suggested, the property was first opened for inspection as a display home or de facto display home.
Mr Tibballs gives evidence that on its website the plaintiff is advertising the land as a display home and that in a recent advertisement in “The Weekly Review” magazine, issue 161 dated 14-20 August 2013, the land is advertised as a display home. In each case, it is advertised that the land is open for inspection on Saturday, Sunday and Wednesday from 1-5pm or by appointment. There is also a suggestion that the Council has requested the plaintiff to comply with the current planning approval, which does not enable the use of the land as a display home.
In these circumstances, Mr Tibballs submits that any modification of the covenant should be backdated to 31 March 2013 or, alternatively, the next appropriate date.
Mr Tibballs also relied on a petition signed by local residents opposing the use of the Land as a display home. For the reasons I have given above, this cannot be taken into account in determining whether or not the proposed modification to the restrictive covenant will or will not substantially injure the persons entitled to its benefit. The petition may be relevant to the Council in determining whether a permit should be issued, but that is a town planning matter and is not relevant to this application.
Mr Tibballs also relied on a petition signed by local residents opposing the use of the Land as a display home. For the reasons I have given above, this cannot be taken into account in determining whether or not the proposed modification to the restrictive covenant will or will not substantially injure the persons entitled to its benefit. The petition may be relevant to the Council in determining whether a permit should be issued, but that is a town planning matter and is not relevant to this application.
Conclusion
It seems to me that the evidence is all one way, despite Mr Tibballs valiant effort to the contrary. The modification is as to the use of the dwelling constructed on the Land only.
Given that the Robinson and Lam Owners now do no oppose a modification for a limited period, and only contest the starting point of that period, and given the evidence of Mr Negri as to there being no substantial injury to any of the benefitted owners’ use of their land, the conclusion I have reached is that the modification should be allowed.
I do not think that the slight evidence of use of the house on the Land earlier this year in contravention of the covenant, and the evidence of advertising that use now, should in the circumstances affect my residual discretion. The absence of any substantial injury to those having the benefit of the covenant should be, and is, my guide in this respect.
A comparison of the benefits intended to be conferred and actually conferred by the covenant, and the benefits which would remain after the covenant is modified, leads to the conclusion that the difference between the two is not substantial. There is no substantial or real injury, to the persons with the benefit of the covenant, which would result from the modification.
The timing of the commencement of the period within which the house on the Land may be used as a display home is still in dispute. The plaintiff proposes, with the agreement of the Council, that the modification be the addition of the following words at the end of the covenant:
“…or as a display home in accordance with a planning permit issued under the Boroondara planning scheme for a period not exceeding two years from the grant of the permit …”
Mr Tibballs, on behalf of the Robinson and Lam Owners, submits that the modification should be limited as follows:
“…or as a display home for a period not exceeding two years from the date of the Supreme Court of Victoria’s Hon Associate Justice Derham’s order in the matter of S CI 2013 2772 dated XX September 2013 …”
The timing of the issue of any planning permit is unable to be accurately ascertained, having regard to the requirement that a planning application be made, and the delays that may be encountered in dealing with any appeal to the Victorian Civil and Administrative Tribunal. This means that an order framed as Mr Tibballs proposes may result in there being a very limited period during which the modification operates, given that a planning permit is nevertheless required even after the modification is ordered.
The Council agrees with the modification as proposed by the plaintiff, and the objectors, through Mr Tibballs, only contest the issue of timing. It seems to me that the evidence relating to there being no substantial injury arising from the modification points to the desirability of modifying the covenant in the way proposed by the plaintiff and agreed to by the Council.
Accordingly, I will order as follows:
Pursuant to section 84(1) of the Property Law Act 1958 the restrictive covenant contained in instrument of transfer no. 1086247 registered in the Land Registry be modified to the extent it affects the land known as Lot 3 on Plan of Subdivision 007993 being the whole of the land described in Certificate of Title Volume 5152 Folio 351 by the addition of the words “or as a display home in accordance with a planning permit issued under the Boroondara planning scheme for a period not exceeding two years from the grant of the permit” following the words “or as bank premises” so that the covenant reads:
“… AND the said Francis Michael Burke doth hereby for himself his heirs executors administrators and transferees registered proprietor or proprietors for the time being of the lands comprised in this transfer or any part or parts thereof covenant with the said Carlyle Greenwood Smithe and The Union Trustee Company of Australia Limited and their transferees registered proprietor or proprietors of the balance of the land comprised in Certificate of Title Volume 4372 Folio 874236 that he the said Francis Michael Burke his heirs executors administrators and transferees registered proprietor or proprietors for the time being of the lands comprised in this transfer or any part or parts thereof will not erect or permit or allow to be erected on any one of the lots comprised in this transfer any building or erection other than one house and that any house so built shall not be used for any purpose other than as a private dwelling house or as bank premises or as a display home in accordance with a planning permit issued under the Boroondara planning scheme for a period not exceeding two years from the grant of the permit …”
Appendix A
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