Re Longo Investments Pty Ltd - [2003] VSC 37

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6301 of 2001

IN THE MATTER of an Application by LONGO INVESTMENTS PTY LTD
ACN 067 148 305 for modification of a restrictive covenant pursuant to the provisions of Section 84 of the Property Law Act 1958

LONGO INVESTMENTS PTY LTD

Applicant

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JUDGE:	OSBORN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7 FEBRUARY 2003
DATE OF JUDGMENT:	27 FEBRUARY 2003
CASE MAY BE CITED AS:	LONGO INVESTMENTS PTY LTD
MEDIUM NEUTRAL CITATION:	[2003] VSC 37

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Restrictive Covenant – Application for modification - "Dwelling house" – Whether modification will not substantially injure the persons entitled to the benefit of the restriction – Property Law Act 1958,s.84.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr C. Porter	Coulter Bourke Solicitors

HIS HONOUR:

This is an application for a declaration stating the effect of a restrictive covenant or in the alternative for modification of that covenant pursuant to the provisions of the Property Law Act 1958. The applicant owns and operates an existing hostel which provides residential accommodation for the aged. The hostel is located on Lot 1 of lodged plan 206628U, being land which fronts Ash Road, Leopold. The applicant wishes to extend the existing hostel building and provide further residential accommodation upon the adjoining lot being Lot 2 on the same lodged plan.

Lodged plan 206628U is five lot plan of subdivision comprising:

-four rectangular lots fronting the west side of Ash Road each having an area a little in excess of 3,000 square metres; and
-a fifth lot of 1.430 hectares (Lot A) located to the west of the four lots referred to above, and which has been further subdivided into 16 smaller lots generally in the order of 600 to 700 square metres in area located around Greenbank Court.

The two plans of subdivision were approved for registration at the Titles Office on the same day (29 December 1987). Each of the lots on both plans with the exception of Lot 1 on lodged plan 206628U was encumbered by a restrictive covenant when transferred which provides that the transferees:

"(a) … will not erect or cause or suffer to be erected or placed upon the said lot more than one main dwelling house together with the usual out–buildings such main building containing a floor area of not less than 1400 square feet within the outer walls thereof calculated by excluding the area of all carports, garages, terraces, pergolas and verandahs and such main building having external walls made principally of stone, brick or brick veneer.
(b)… will not use or permit or suffer any such main building to be used for other than residential purposes."

The plans of the proposed extension to the hostel demonstrate:

(a) that there can be no doubt that the proposed use is for a residential purpose;
(b)that the building proposed will comprise a floor area of more than 1400 square feet as defined by the covenant;…

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: [2003] VSC 37
Decision Date: 27 February 2003

CaseChat Overview and Summary

The case of Re Longo Investments Pty Ltd involved an application by the respondent to modify a restrictive covenant attached to a parcel of land, originally intended for the construction of a dwelling house. The application was contested by the appellant, who argued that the modification would substantially injure those entitled to the benefit of the restriction. The matter was heard and determined in the Supreme Court of Victoria.

The central legal issues before the court were whether the proposed modification would substantially injure the persons entitled to the benefit of the restriction, and if the modification could be approved under section 84 of the Property Law Act 1958. The court had to consider the original intent of the restrictive covenant, the nature of the proposed modification, and the potential impact on the neighbouring properties and their owners. Additionally, the court examined whether the modification would preserve the essential character of the land as intended by the original covenant.

The Supreme Court held that the proposed modification would not substantially injure the persons entitled to the benefit of the restriction. The court found that the modification was consistent with the original intent of the covenant to maintain the character of the land for residential purposes. Furthermore, the court determined that the modification would not alter the essential character of the land in a way that would be detrimental to the neighbouring properties. The court concluded that the modification was in the best interest of the property and its owners, and accordingly, granted the application for modification under section 84 of the Property Law Act 1958.

As a result of the court's decision, the restrictive covenant was modified to allow for the proposed development on the property. The court's ruling ensured that the character of the land would remain consistent with the original intent of the covenant while allowing for the necessary modifications to facilitate the intended use of the property.

Orders