Re Milbex Pty Ltd

The dispute before the court involved Milbex Pty Ltd, the appellant, and two respondents, who were property developers. The appellant sought to modify a restrictive covenant limiting each lot in a subdivision to a single dwelling, arguing that changes in the market and the nature of the area warranted the modification. The respondents opposed the modification, asserting that it would undermine the covenant's purpose and substantially injure the beneficiaries. The matter was heard by the Supreme Court of New South Wales.

The primary legal issue was whether the court should exercise its discretion to modify the restrictive covenant to allow for multiple dwellings per lot, given the appellant's argument that the covenant no longer served its intended purpose. The court had to assess if the modification would substantially injure the beneficiaries and consider the principle that courts should be slow to alter restrictive covenants, given their purpose of preserving the character and value of the property. Additionally, the court needed to determine if the modification would not substantially injure the beneficiaries.

The court found that the modification of the restrictive covenant would not substantially injure the beneficiaries. It considered the changes in the surrounding area, the nature of the lots, and the economic implications of the modification. The court concluded that the modification was necessary to adapt to the current market conditions and the practicalities of the property development. The court's decision was grounded in the principle that restrictive covenants should be interpreted flexibly to achieve their purpose, provided that such modification does not significantly harm the beneficiaries. The court exercised its discretion to modify the restrictive covenant, allowing for multiple dwellings per lot.

The final orders included the modification of the restrictive covenant to permit multiple dwellings on each lot, subject to certain conditions to ensure that the character and value of the property were preserved as much as possible. The court also directed that the modification would be binding on all parties and their successors in title.