Re Nazari

Case •

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•

3 May 2024
IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S ECI 2023 03198

IN THE MATTER of an application pursuant to section 84(1)(c) of the Property Law Act 1958 (Vic) for the modification of a restrictive covenant

- and –

IN THE MATTER of an application for the modification of the restriction arising under the covenant contained in Instrument of Transfer M805798R registered in the Register Book at the Office of Titles burdening the land known as 5-6 Malanie Close, Narre Warren North, Victoria, more particularly described as Lot 9 on Plan of Subdivision 206280K and being the land in Certificate of Title Volume 09734 Folio 086, by:

BETWEEN:

ABDUL ALI NAZARI Plaintiff

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JUDGE:

Irving AsJ

WHERE HELD:

Melbourne

DATE OF HEARING:

16 April 2024

DATE OF JUDGMENT:

3 May 2024

CASE MAY BE CITED AS:

Re Nazari

MEDIUM NEUTRAL CITATION:

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PROPERTY LAW — Section 84 of the Property Law Act 1958 (Vic) – Application for modification of restrictive covenant – Substantial injury under s 84(1)(c) of Property Law Act 1958 (Vic) – Principles for assessing whether beneficiary of covenant would likely suffer substantial injury on modification – Application for modification of restrictive covenant granted.

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APPEARANCES:

 Counsel Solicitors
For the Plaintiff Mr M Townsend of counsel MPW Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

The Subject Land and its history....................................................................................... 2

The Covenant....................................................................................................................... 3

The plaintiff’s proposal and application.......................................................................... 4

Brief procedural history...................................................................................................... 7

Evidence............................................................................................................................................... 9

The Easton Report............................................................................................................... 9

Purpose and intent of the Covenant............................................................................... 10

Mr Easton’s approach to the assessment of substantial injury................................... 10

The proposal.......................................................................................................... 10

An alternate complying development.............................................................. 11

Planning and building controls.......................................................................... 11

The neighbourhood.............................................................................................. 12

Summary of Mr Easton’s opinion................................................................................... 15

Mr Easton’s conclusion..................................................................................................... 18

Mr Nazari’s evidence........................................................................................................ 18

Mr Watson’s evidence....................................................................................................... 19

Applicable principles.................................................................................................................. 19

The objectors’ submissions........................................................................................................ 22

The plaintiff’s submissions........................................................................................................ 23

Consideration.............................................................................................................................. 25

Conclusion.................................................................................................................................... 27

HIS HONOUR:

Introduction

  1. Abdul Ali Nazari (plaintiff) is the registered proprietor of the land known as 5- 6 Malanie Close, Narre Warren North, Victoria, more particularly described as Lot 9 on Plan of Subdivision 206280K, being the land in Certificate of Title Volume 09734 Folio 086 (Subject Land).

  1. The plaintiff has filed an originating motion seeking orders pursuant to s 84(1)(c) of the Property Law Act 1958 (Vic) (PLA) that the covenant burdening the Subject Land be modified.

  1. The plaintiff relied on the following materials:

(a)   affidavit of Myles Patrick Watson, solicitor for the plaintiff, sworn 20 July 2023 (First Watson affidavit);

(b)  affidavit of Abdul Ali Nazari, sworn 21 July 2023 (First Nazari affidavit);

(c)   affidavit of Myles Patrick Watson, solicitor for the plaintiff, sworn 6 September 2023 (Second Watson affidavit);

(d)  affidavit of Robert Walter Easton, sworn 4 October 2023, exhibiting Mr Easton’s expert report;

(e)   affidavit of Myles Patrick Watson, solicitor for the plaintiff, sworn 16 October 2023 (Third Watson affidavit);

(f)    affidavit of Abdul Ali Nazari, sworn 28 March 2024 (Second Nazari affidavit);

(g)  written preliminary submissions of the plaintiff’s counsel dated 26 July 2023;

(h)  written final submissions of the plaintiff’s counsel dated 18 October 2023;

(i)     written supplementary submissions of the plaintiff’s counsel dated 28 March 2024; and

(j)     written addendum to supplementary submissions of the plaintiff's counsel dated 15 April 2024.

  1. I have decided, for the reasons set out below, to grant the plaintiff’s application to modify the covenant to permit a second dwelling and a second multi or single garage or carport.  In respect of building materials, the application to modify the covenant to allow the dwelling houses to be constructed substantially of brick or other materials with a rendered finish is granted.  In addition I have granted the application to modify the covenant to add the requirement that if two dwellings are constructed on the Subject Land, they be constructed in a semi-detached typology.

Background

The Subject Land and its history

  1. The Subject Land has an area of 4016m2.  It is currently developed with a single storey brick dwelling with a tiled roof and a tennis court.  The Subject Land is accessed via two crossovers connecting to a driveway that loops in front of the dwelling.  It is depicted in the following aerial diagram, with the Subject Land being outlined in red.

  1. On 13 March 1987 the land in Plan of Subdivision 206280K (PS 206280K) was derived from Certificate of Title Volume 04826 Folio 158, being the folio recorded as the Parent Title to the Subject Land (Parent Title).

  1. The Subject Land was sold and transferred to the plaintiff on 17 August 2022.

  1. The Subject Land is zoned Low Density Residential Zone (LDRZ).

The Covenant

  1. The covenant is contained in Instrument of Transfer M805798R , which was signed on 16 April 1987 and registered on 24 April 1987 (Covenant).

  1. The terms of the Covenant are as follows:

(a)That at no time hereafter will there be erected upon the said lot or any part thereof any buildings save and except one separate private dwelling house of not less than one hundred and eighty five (185) square meters in area together with usual outbuildings including therein one multi or single garage or carport (which may be erected beneath such dwelling house,) laundry, tool shed and other outbuildings suitable and appropriate to the dwelling house upon the said lot and the reasonable occupation and enjoyment thereof.

(b)That such dwelling house and outbuildings shall not be constructed of other than brick or brick veneer and shall not be roofed with fibrous cement and asbestos cement sheet or panelling and shall not be houses removed from another site and erected on the lot hereby transferred.

  1. Parsed, the Covenant restricts:

(a)   the use of the Subject Land to one private separate dwelling house with a minimum floor area of 185m2, together with any suitable outbuildings;

(b)  the construction of one garage or carport, but not both;

(c)   the materials that may be used in the construction of the dwelling house and outbuildings to brick or brick veneer;

(d)  the roofing materials to any materials other than fibrous cement or asbestos cement sheet or panelling; and

(e)   the use of the house removed from another site and erected on the Subject Land.

  1. The burden of the Covenant is expressed to be ‘an encumbrance on the Certificate of Title issued or to issue for the said lot hereby transferred and shall run with the land’.

  1. The Covenant purports to benefit all land in PS 206280K. Mr Easton’s expert report has identified 15 other beneficiaries of the Covenant, being Lots 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22 on the Plan (Beneficiaries).  The beneficiaries and Subject Land are represented on the following map prepared by Mr Easton, with the Beneficiaries highlighted blue and the Subject Land highlighted pink.

The plaintiff’s proposal and application

  1. During the course of the proceeding the plaintiff amended his proposal and application. I discuss the differences between the plaintiff’s two proposals later in these reasons.

  1. The plaintiff now seeks the following relief:

(a) an order pursuant to s 84(1)(c) of the PLA that the Covenant burdening the Subject Land be modified by removing the words struck through and adding the words and letters double underlined, as follows:

…

AND THE SAID RONALD JOSEPH POWER & ALICE THELMA POWER with the intent that this covenant shall be attached to and run at law and in equity with every Lot on Plan of Subdivision No. 206280K save and except the lot hereby transferred and that the burden of this covenant shall be annexed to and run at law and at equity with the lot hereby transferred and every part thereof…HEREBY AND AS SEPARATE COVENANTS for themselves and their successors in title…with the said COUNTY PARK DEVELOPMENTS PTY. LTD.…its transferees and other registered proprietors for the time being of every lot in the said Plan of Subdivision save and except the lot hereby transferred:

(a)That at no time hereafter will there be erected upon the said lot or any part thereof any buildings save and except one or two separate private dwelling houses (and where two, then in a semi-detached arrangement in accordance with the attached Plan A) of not less than one hundred and eighty five (185) square meters in area together with usual outbuildings permitted including therein one multi or single garage or carport each (which may be erected beneath such dwelling houses,) laundry, tool shed and other outbuildings suitable and appropriate to the dwelling houses upon the said lot and the reasonable occupation and enjoyment thereof.

(b)That such dwelling houses and outbuildings shall not be constructed of other than substantially of brick or brick veneer, and other materials with a rendered finish, and shall not be roofed with fibrous cement and asbestos cement sheet or panelling and shall not be houses removed from another site and erected on the lot hereby transferred and in the case of there being two dwellings on the said lot, there shall be no dividing fence constructed that is visible from the front boundary to the said lot.

  1. Attached Plan A, referred to in the plaintiff’s amended proposal, is depicted below:

  1. The plaintiff, by his amended proposal (Proposal) intends to subdivide the Subject Land into two similarly sized lots and construct two dwellings co-located in a duplex arrangement.  The plaintiff intends that there will be one building on the Subject Land, consistent with the size and scale of other dwellings in the neighbourhood.

  1. An outline of the Proposal is shown on the following concept plan:

Brief procedural history

  1. The plaintiff’s application first came before the Court on 27 July 2023 at which time I made orders requiring the plaintiff to notify the registered proprietors of the land taking the benefit of the Covenant.

  1. The plaintiff’s solicitor, Mr Watson, provided that notice by email sent on 1 August 2023.

  1. Mr Watson deposed that he received one email from Mr James Bell informing him of a group objection to the plaintiff’s application on behalf of seven benefitting lots.  Mr Bell’s email stated that he was authorised to make the objection on behalf of:

(a)   James and Janet Bell of 7-8 Malanie Close (Lot 10 on the Plan);

(b)  Ben and Linda Vodiloski of 9-10 Malanie Close (Lot 11 on the Plan);

(c)   Josie and Rob Morando of 3-4 Malanie Close (Lot 8 on the Plan);

(d)  Alison Roberts of 17-18 Malanie Close (Lot 15 on the Plan);

(e)   Jenny Arcaro of 53-54 Malanie Close (likely Lot 19 on the Plan);[1]

(f)    Baldev Jassal of 56-56 Malanie Close (likely Lot 21 on the Plan); and

(g)  Jan and Julie Kovaton (sic) of 57-58 Malanie Close (likely Lot 21 on the Plan).

[1]The addresses in Mr Bell’s email to Mr Watson do not all correspond directly to the lot numbers and addresses in Schedule A to the Court’s orders of 27 July 2023, hence I have used the qualifier ‘likely’ in some instances.

  1. On 26 October 2023, at the second return of the plaintiff’s application, Mr and Mrs Bell were in attendance.  Mr and Mrs Bell provided the Court with copies of written statements of objection by Zeljan Kovacich and Julie Kovacich, and Robert Morando and Josie Morando, each of whom are beneficiaries of the Covenant.  I declined to allow Mr Bell to represent or speak on behalf of Baldev Jassal, Jenny Arcaro or Ben and Linda Vodiloski as none were present in Court and nor had they provided written statements of objection.  Mr and Mrs Bell expressed the basis of their objection to the plaintiff’s application and advised the Court that they did not seek to be made defendants to the proceeding.

  1. On 26 October 2023 I made a declaration pursuant to r 52.09(3) of the Supreme Court (General Civil Procedure) Rules 2015 that the plaintiff had given notice as required by my orders of 27 July 2023.

Evidence

The Easton Report

  1. Mr Easton is a town planner of some thirty four years’ experience.  The plaintiff instructed Mr Easton to prepare a report in relation to the plaintiff’s application to modify the Covenant affecting the Subject Land.

  1. Mr Easton’s report sets out the analysis he undertook to identify the beneficiaries of the Covenant.  According to Mr Easton, on 16 April 1987 County Park Developments Pty Ltd transferred the land in Certificate of Title Volume 09734 Folio 086 to Ronald Joseph Power and Alice Thelma Power.  That transfer covenants with ‘the said COUNTY PARK DEVELOPMENTS PTY. LTD. (formerly AUSTRA ASEAN PTY. LTD.) its transferees and other registered proprietors for the time being of every lot in the said Plan of Subdivision save and except the lot hereby transferred’.  The relevant plan of subdivision, referred to earlier in the transfer, was LP206280K.

  1. Plan of subdivision LP206280K was approved on 13 March 1987 and contained 16 residential lots with areas between 4000m2 and 4728m2.  Only the lots on the plan take the benefit of the Covenant.  Roads are thus excluded from the benefit.

  1. While the transfer of the Subject Land is dated 16 April 1987, all lots on the plan had titles issued on the same date.  Mr Easton explains that while the Covenant purports to give the benefit to every lot on the plan, only lots that were still owned by the vendor on the day the Covenant was signed by both the vendor and purchaser, and sold after the Subject Land, ie. after 16 April 1987, take the benefit of the Covenant.

  1. The beneficiaries identified by Mr Easton are listed at paragraph 13 of these reasons.

Purpose and intent of the Covenant

  1. Mr Easton describes the two parts of the Covenant:

Part (a) of the covenant restricts the use of the land to one separate private dwelling house and one garage or carport.  At the time the covenant was created this area was subject to a mandatory minimum lot size of 4000 sq metres (approximately 1 acre). The covenant was therefore consistent with the prevailing planning provisions as the subject land had an area of 4000 sq metres. It also required the minimum lot size of such dwelling house to be at least 185 sq metres (approximately 20 squares).  While the minimum size is restricted there is no maximum size or any limit on the height or number of storeys of the dwelling house.

Part (b) of the covenant relates to building materials. It is presumed that the intention was to require external walls to be brick or brick veneer and to prevent the use of fibro cement or asbestos cement roofing materials,(sic) The restrictions on roofing materials is still in accordance with current standards. However a far wider range of building materials are now in common usage on modern dwellings. The reference to dwellings removed from another site would mainly prevent weatherboard and similar dwellings. It is further noted that the building material restriction also relates to outbuildings.

Mr Easton’s approach to the assessment of substantial injury

  1. Mr Easton considered the following in coming to his opinion about the impacts of any modification to the Covenant:

(a)   the plaintiff’s first proposal;

(b)  the role of contemporary planning and building controls in the development approval process;

(c)   the present and emerging character of the area; and

(d)  whether the proposal will create a greater impact on the beneficiaries than an alternate complying development.

The proposal

  1. Mr Easton was asked to provide his opinion of a version of the plaintiff’s proposal that has since been amended to address some of the concerns expressed by the objectors. Counsel for the plaintiff submitted that the Court should be satisfied that, Mr Easton’s conclusions were equally, if not more, applicable to the Proposal because it now addressed the objectors’ concerns and included amendments over and above the restrictions imposed by the Covenant.  

  1. The properties to the north and south of the Subject Land and directly opposite it on the west side of Malanie Close have the benefit of the Covenant. The property adjacent to the rear boundary of the Subject Land is outside the parent subdivision and does not have the benefit.

An alternate complying development

  1. Mr Easton considered the nature of any alternate complying use or development which could otherwise be built on the Subject Land.  He identified the most obvious example as being a large double or triple storey replacement dwelling, neither of which would require a planning permit and so would not involve third party objection rights. A large dwelling, in Mr Easton’s opinion, could have a potentially greater impact on any nearby beneficiaries.  He identified several examples of new double or triple storey dwellings within the neighbourhood and noted the planning scheme in this location does not limit the height or site coverage of any new dwellings.

  1. Mr Easton also noted that in the broader neighbourhood some 4000m2 lots were suited to use as onsite garaging of multiple cars, trucks and heavy machinery not suited for standard suburban areas.

Planning and building controls

  1. Mr Easton notes that while town planning considerations do not in themselves provide justification for modification or discharge of a covenant under the PLA, they do provide a framework to assess how land may be developed and a range of standards to quantify the degree of impact on neighbouring owners.

  1. The Subject Land is located in a LDRZ.  The primary purpose of this zoning is to provide for low-density residential development on lots which, in the absence of reticulated sewerage, can treat and retain all wastewater.

  1. Mr Easton notes that in July 2013 the zone was amended to provide an alternative option of 2000m2 size lots in areas where reticulated sewerage was available.  This amendment was preceded by a report of an independent panel appointed by the Minister for Planning to consider submissions both in favour and against the amendment.  The panel report noted that it did not consider that reducing the minimum lot size from 4000m2 to 2000m2 in limited low density residential areas would significantly increase traffic or add pressure on services and infrastructure.

  1. Mr Easton noted that unlike controls operating in other residential zones, there is no restriction on site coverage or the maximum height of any dwelling.

The neighbourhood

  1. Mr Easton assumed the neighbourhood comprised all of the land originally contained within the parent subdivision and other subdivisions creating roads connected to Malanie Close and comprising Carolyn Crescent and Carmen Crescent.  This neighbourhood represented a self-contained network of seven different subdivisions by varying developers based on two access points from either Heatherton Road to the north or Hallam Road to the west. Mr Easton inspected the neighbourhood and noted:

(a)   Lot 7 LP206280K (1 Malanie Close), located 60m north of the Subject Land, has an area of 4000m2 and contains a single story brick dwelling with a freestanding garage with four roller doors at the front of the site and is burdened by a covenant expressed in similar terms to the Covenant;

(b)  Lot 10 LP206280K (7 Malanie Close), located adjacent to the southern boundary of the Subject Land, has an area of 4000m2, contains a double storey brick dwelling and is burdened by a covenant in similar terms to the Covenant;

(c)   Lot 13 LP206280K (13-14 Malanie Close), located 150m south of the Subject Land, is a narrow lot with a 30m frontage and area of 4025m2, contains a double storey dwelling with a triple car garage accessed by a long driveway from Malanie Close and is burdened by a covenant in similar terms to the Covenant;

(d)  Lot A LP206280K (Carolyn Close), a balance lot on the parent subdivision located adjacent to the north side of the other lots, it was further subdivided on 13 March 1987 creating Carolyn Close (linking Malanie Close to Heatherton Road) and eleven lots ranging in size from 4001m2 to 4180m2;

(e)   Lot 27 LP206279T (51-52 Carolyn Close), located on the south western corner of Carolyn Close and Heatherton Road, has an area of 4001m2 and contains a double storey dwelling constructed partly of brick and weatherboard, accessed by a driveway from Carolyn Close;

(f)    Carolyn Close (West), located to the west of the Parent Title and parent subdivision, and was further subdivided on 13 March 1987 to extend Carolyn Close to the west (terminating in a cul de sac) and creating 14 lots varying in size from 4000m2 to 5617m2;

(g)  Lot 30 LP206715V (37-38 Carolyn Close), further subdivided into two lots of 2020m2 and 2902m2 in December 2022 with lot 2 containing the original dwelling and lot 1 vacant;

(h)  Lot 38 LP 206715V (21-22 Carolyn Close), contains an original dwelling accessed by a loop driveway from two crossovers, and is the subject of an application, pending with the City of Casey, to subdivide the land into two lots;

(i)     Malanie Close (West), located south west of the parent subdivision, was further subdivided into two lots, including an easement for a future location of Malanie Close;

(j)     Lot 13 PS311516E (33-34 Malanie Close), located at the western end of Malanie Close, contains a single dwelling and is subject to a pending planning permit to create a two lot subdivision with the City of Casey;

(k)  Malanie Close & Carmen Crescent (South), a balance lot further subdivided to create eleven residential lots ranging in size from 4002m2 to 4681m2 and a section of Malanie Close previously shown as an easement and the southern section of Carmen Crescent;

(l)     Lot 6 PS333951L (25-27 Carmen Crescent), located on the north west corner of Malanie Close and Carmen Crescent with an area of 4028m2, contains a three storey dwelling with a double car garage on each side of the dwelling, accessed by two driveways connecting to a loop driveway in front of the dwelling;

(m)             Lot 7 PS333951L (46-47 Malanie Close), located on the north east corner of Malanie Close and Carmen Crescent, currently vacant but subject to a pending planning application to create a two lot subdivision with the City of Casey;

(n)  Lot 8 PS333951L (21-22 Malanie Close), located on the south side of Malanie Close adjacent to the western boundary of the subdivision with an area of 4095m2, and containing a large double storey rendered dwelling with a double car garage on each side of the dwelling;

(o)   Carmen Crescent (West), which land was further subdivided in November 1993 to create seven lots ranging in size from 4001m2 to 4325m2, a large balance lot of 3.272 hectares and the westernmost section of Carmen Crescent;

(p)  Lot 2 PS320496G (5-7 Carmen Crescent), with an area of 4001m2, containing a single storey dwelling, burdened by covenants that do not appear to restrict the number of dwellings and subject of a pending planning permit application for a two lot subdivision with the City of Casey;

(q)  Lot A PS320496G (Carmen Crescent East), which land was further subdivided in May 1994 to create seven residential lots ranging in size from 4029m2 to 4867m2 and created the section of Carmen Crescent previously shown as an easement;

(r)    Lot 5 PS320500U (17-19 Carmen Crescent), with an area of 4114m2 , contains a single storey dwelling and large outbuilding, accessed by two driveways connecting to a loop driveway and with two additional driveways to the north and south of the site providing access to truck parking areas, burdened by covenants that do not restrict the number of dwellings or building materials and subject to a pending planning permit application for a two lot subdivision;

(s)    Lot 8 PS320500U (26-28 Carmen Crescent), which land has been subdivided into two lots in December 2022, with lot 1 having an area of 2005m2 with a dwelling currently under construction and lot 2 being a battleaxe shaped lot of 2862m2 containing the original dwelling, burdened by covenants that do not restrict the number of dwellings;

(t)    Lombard Court, located to the east of the Subject Land and outside Mr Easton’s defined neighbourhood, and which land was party subdivided in January 1988 to create eighteen lots ranging in size from 4000m2 to 7789m2, one of which had a common boundary with the Subject Land;

(u)  Lot 15 LP209526M (23-24 Lombard Court), located 20m south east of the Subject Land, with an area of 4000m2, a dwelling with a loop driveway at the front and is burdened by a covenant modified by the Supreme Court of Victoria to allow two private separate dwelling houses and concrete render finish to the allowable building materials.

Summary of Mr Easton’s opinion

  1. Mr Easton said the parent subdivision was one of seven subdivisions by various developers that created his defined neighbourhood.  The subdivisions fitted together like a jigsaw and relied on only two access points to the surrounding major road network.  The minimum lot size of 4000m2 was based on prevailing planning scheme provisions that could not be varied by the Council or the Victorian Civil and Administrative Tribunal.  The purpose of the size requirement was to provide for low-density residential development on lots which, in the absence of reticulate sewerage, could treat and retain all wastewater.

  1. Mr Easton stated that covenants similar in wording to the Covenant burdened all sixteen lots within the parent subdivision, however, the other fifty-three lots in the neighbourhood had either varying types of covenant or no covenant at all.

  1. The planning scheme was amended in November 2019 to allow lots of 2,000m2, subject to permit, where the land was connected to reticulated sewerage.  Mr Easton noted that unlike other areas within the City of Casey with a similar zoning, the independent panel report stated the area had no identified remnant vegetation, and limited identified biodiversity value.  This conformed with Mr Easton’s inspection where he noted the area was not heavily landscaped with native vegetation.

  1. Mr Easton stated that the wider neighbourhood has been subject to several applications to allow the subdivision of lots into 2000m2 sized lots.  Mr Easton detailed eight instances of such applications including two in Malanie Close which, while burdened by covenants, those covenants did not restrict the number of dwellings.

  1. Mr Easton provided the following observations about the character of the neighbourhood:

(a)   the style and size of the dwellings varied from relatively modest single storey swellings to large imposing two and three storey dwellings; and

(b)  properties had between one and four driveways and several properties had multiple garages for four vehicles.

  1. The proposal considered by Mr Easton for the Subject Land was the removal of the present dwelling and the subdivision of the site into two lots in a side by side arrangement.  Access to the site would be via two existing driveways with one driveway being allocated to each new dwelling.  Mr Easton considered that the overall footprint of the two dwellings would be similar to several other dwellings in the neighbourhood that also have two driveways and two double car garages.

  1. In Mr Easton’s opinion, the proposal was unlikely to create any significant increase in traffic movements in the area compared to a large multi car garage that could otherwise be built.

  1. In relation to building materials, Mr Easton said that the restrictions on building materials in the Covenant was to encourage the type of dwellings being constructed in 1987, and that alternate materials had been used in the neighbourhood without detracting from the neighbourhood’s overall character.  He said the proposed modification of permissible building materials in the Covenant would bring the Covenant into line with current building practices and was unlikely to detract from the appeal or character of the neighbourhood.

  1. Mr Easton made particular note of the following:

(a)   as the proposed new dwellings would be in a side by side arrangement, there would be no need for long driveways to the rear of the Subject Land and any impact on abutting owners is therefore the same as the construction of a single dwelling;

(b)  several other dwellings in the area have twin driveways and multiple car garages;

(c)   the plaintiff’s proposal for two dwellings will not necessarily increase the density of population in the area because since the Covenant was created the occupancy rate per dwelling has reduced;

(d)  the proposal remains consistent with a low density environment and so there would be no reduction in the ‘quality of life’ for beneficiaries of the Covenant;

(e)   there is nothing to suggest the proposal would result in an increase in noise levels from activities of occupants and their pets, vehicles or crowd gathering;

(f)    the proposal was unlikely to create any significant increases in traffic movements in the area; and

(g)  the modification of the Covenant to include ‘rendered materials’ allows current materials to be used without any negative impact on benefitted properties.

Mr Easton’s conclusion

  1. Mr Easton concludes that the plaintiff’s proposed modification of the Covenant in respect of an additional dwelling and the use of rendered finishes will not substantially injure the persons entitled to the benefit of it.

Mr Nazari’s evidence

  1. In Mr Nazari’s first affidavit, he deposed that:

(a)   he is the sole registered proprietor of the Subject Land;

(b)  if the application is approved he intends to subdivide the land into two similarly sized lots, so that two dwellings may be constructed generally on that part of the Subject Land developed with one large dwelling;

(c)   he caused a proposed plan of subdivision to be prepared to give effect to his intentions which was exhibited to his affidavit; and

(d)  he intends to retain the large hedging tress situated at the side boundaries of the Subject Land.

  1. The proposed plan of subdivision exhibited to Mr Nazari’s first affidavit indicated a proposed subdivision line bisecting the Subject Land in two from the middle of the Malanie Close frontage to the rear boundary.  Within each proposed lot was a proposed building envelope indicating a possible dwelling footprint extending considerably closer to the Malanie Close frontage than the existing dwelling and that the proposed dwellings would be completely separated.

  1. Mr Nazari’s second affidavit, sworn after the Court had conducted a site inspection, deposed that

(a)   he now intended to develop the Subject Land in accordance with an amended proposal with the effect that there will be one building on the Subject Land, consistent in size and scale with other dwellings in the neighbourhood;

(b)  he proposed to maintain the existing front setback to preserve the character of this part of the neighbourhood; and

(c)   he had caused an amended proposed plan of subdivision to be prepared to give effect to his amended proposal.

  1. The amended proposed plan of subdivision again indicated a proposed subdivision line bisecting the Subject Land in two from the middle of the Malanie Close frontage to the rear boundary.  The building envelopes had been moved so that they indicated a possible common wall between the two dwellings so that the two dwellings would present as one building.  In addition the front setback of the building envelopes conformed with the front setback of the current dwelling.

Mr Watson’s evidence

  1. Mr Watson’s first affidavit set out his title analysis, conducted to identify the beneficiaries of the Covenant to inform the terms of the orders necessary to effect notification of the plaintiff’s application.  It is unnecessary to rehearse Mr Watson’s title analysis which was confirmed by the Easton Report.

  1. Mr Watson’s second affidavit set out his evidence regarding the plaintiff’s compliance with the Court’s orders for notification of the application and communications with objectors. As set out above, I was satisfied that the plaintiff had complied with the orders for notice of the application to be given.

  1. Mr Watson’s third affidavit set out his correspondence with persons who had informed him they objected to the plaintiff’s application.

Applicable principles

  1. Section 84(1)(c) of the PLA gives the Court the power, on the application of any person interested in any land affected by any restriction under a covenant, to order, either wholly or partially to discharge or modify any such restriction upon being satisfied that ‘the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction’.

  1. Whether the modification of the covenant would cause substantial injury is a question of fact that requires the Court to consider the purpose of the covenant and the benefits conferred, both originally and currently, by the covenant, against the impact of the proposed modification upon those benefits.[2]

    [2]Re Alexandra [1980] VR 55, 60 (Menhennitt J); Vrakas v Registrar of Titles [2008] VSC 281 [33-35] (Kyrou J)(‘Vrakas’), William Suhr & Ors v Andrew Gordon Michelmore & Ors [2013] VSC 284 [41-45] (Pagone J)(‘Suhr’).

  1. In Re Cook,[3] Gillard J said of the assessment of substantial injury under s 84(1)(c):

Such injury can only be properly assessed by a comparison between the benefits intended to be conferred and actually conferred by the covenant initially on the persons entitled thereto and the resultant benefits, if any, remaining to such persons after the covenant has been modified.  If from the evidence it appears that the difference between the two will not be substantial, then the applicant will have established a case for the exercise of the Court’s discretion under paragraph (c).  In order to make this comparison it is proposed to consider what benefits the covenant over the subject land may have conferred upon the persons entitled thereto, and then to assess whether the modification of such covenant would or would not substantially diminish the benefits so discovered.[4]

[3][1964] VR 808.

[4]Ibid 810-811.

  1. In order to be characterised as substantial, the injury must be ‘real’, and not unsubstantial or fanciful.[5] The Court may consider a variety of matters including noise, privacy, accessibility of properties and other matters of amenity in appropriate cases.[6] It is necessary to show that the substantial injury is properly related to the benefits conveyed by the covenant, ie. that the substantial injury derives from the proposed modification.

    [5]Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) [10] (‘Re Stani’); Vrakas (n 2) [36].

    [6]Re Robinson [1972] VR 278, 283-284 (Adam J).

  1. The Court may consider whether a proposed modification would, if granted, create a precedent leading to similar applications within the estate or neighbourhood, resulting in more widespread detrimental change.[7]  

    [7]Re Stani (n 5) 9-10; Vrakas (n 2) [32].

  1. In Randell v Uhl,[8] Derham AsJ set out the principles relevant to assessing whether a beneficiary of the covenant would likely suffer substantial injury from its modification:

    [8][2019] VSC 688 [85].

(a)a substantial injury must be a detriment to the benefitted land that is real and not fanciful. The requirement that the injury must be substantial is intended ‘to preclude vexatious opposition cases where there is no genuineness or sincerity or bona fide opposition on any reasonable grounds’. That does not mean, however, that s 84(1)(c) of the PLA is restricted to dealing with vexatious or frivolous objections. Although the restriction of s 84(1)(c) of the PLA to ‘substantial’ injury would enable the weeding out of vexatious objections to the modification or removal of a covenant, the dichotomy in the section is not between vexatious and non-vexatious claims but is between cases involving some genuinely felt but insubstantial injury, on the one hand, and cases where the injury may truly be described as substantial, on the other;

(b)the substantial injury relates to practical benefits, being any real benefits to the person entitled to the benefit of the covenant.  It is not sufficient for a plaintiff to merely prove that there will be no appreciable decrease in the value of the property that has the benefit of the covenant;

(c)substantial injury may arise from the order for modification of the covenant being ‘used to support further applications resulting in further encroachment and in the long run the object sought when the covenant was imposed [being] completely defeated’. This consideration is referred to as the ‘precedent value’; and

(d)      whether there will be substantial injury is to be assessed by comparing:

(i)the benefits initially intended to be conferred and actually conferred by the covenant; and

(ii)the benefits, if any, which would remain after the covenant has been discharged or modified;

(e)if the evidence establishes that the difference between the two will not be substantial, the plaintiff has established a case for the exercise of the Court’s discretion under s 84(1)(c) of the PLA;

(f)it is relevant to consider evidence of statutory planning provisions to the extent they show what realistically will be the result of the removal or modification of the covenant because ‘it would be artificial and wrong to pay no heed at all to the reality of the situation’;

(g)in considering whether the plaintiff has satisfied the Court that there will not be substantial injury:

(i)town planning principles and considerations are not relevant;

(ii)the absence of objectors to the discharge or modification of a covenant will not necessarily satisfy the onus of proof; and

(iii)each case must be decided on its own facts, and each covenant should be construed on its own terms and having regard to the particular context in which it was created;

(h)if the plaintiff satisfies the Court that there will be no substantial injury to the relevant persons, the Court has a residual discretion to refuse the application.  The Court in exercising its discretion, may consider town planning principles and the precedent value.

(citations omitted).     

The objectors’ submissions

  1. The concerns expressed by the objectors, made in response to the plaintiff’s original proposal, were, in summary:

(a)   The neighbourhood is characterised by landowners who, for the most part, have resided there for quite some time and purchased the land with knowledge of the Covenant;

(b)  The protection afforded by the Covenant that the area would remain a low density residential area, was a significant factor influencing their decision to purchase their land;

(c)   The plaintiff’s proposal would significantly impact the streetscape of Malanie Close, particularly the 60m plus frontages to the lots, and the allotments neighbouring the plaintiff’s lot will be most adversely affected;

(d)  The modification of the Covenant is likely to act as a precedent, causing an increase in similar applications in the future; and

(e)   The shallow nature of the Subject Land means that there are differing considerations to other lots in the area that have been subdivided, such that the reasons that supported those subdivisions do not apply in this case.   

The plaintiff’s submissions

  1. The plaintiff submitted that there will be next to no injury from the Proposal being approved, much less substantial injury. The plaintiff reasoned:

(a)   the Covenant does not impose any restrictions on the extent of built form beyond imposing a 185m2 minimum floor size;

(b)  the Court has recognised that a large dwelling, compliant with the existing terms of the Covenant, could have a potentially greater impact on neighbouring properties than two dwellings;[9]

[9]Re Forrester[2023] VSC 284 [90] (Matthews AsJ).

(c)   there have been relatively few instances in which the Court has refused an application for a second dwelling on a lot, and few if any where the dwelling sits on an approximately 4000m2 lot;

(d)  no precedent will be created because the Court has ordered variations to similar covenant in Re Collard,[10]Re Elmazovski,[11] Re Mirranay,[12]and Re Forrester,[13] with each of these cases involving land within the neighbourhood identified by Mr Easton in this application and, in the case of Re Forrester almost directly abutting the rear boundary of the Subject Land;

[10]S ECI 2021 02478.

[11]S ECI 2021 04108.

[12]S ECI 2022 02402.

[13]Re Forrester (n 9).

(e)   in each of those cases the land the subject of the application was also in the order of 4000m2, burdened by a covenant containing similar restrictions and involved the same covenantee, County Park Developments Pty Ltd;

(f)    if the Subject Land is subdivided as the Proposal envisages, each lot will still enjoy a frontage to the street in excess of 30m;

(g)  despite there being nothing in the Covenant restricting front setbacks, in order to respond to the objectors’ concerns, the plaintiff’s amended proposal further increases the proposed setbacks to ensure any built form is consistent with neighbouring properties;

(h)  the amended proposal includes a design that will largely present as a single dwelling with a semi-detached typology so as to ensure the retention of a single building on the Subject Land, consistent in size and scale with neighbouring dwellings;

(i)     the plaintiff’s amended application includes a form or words binding the plaintiff to such a design outcome;

(j)     the Court has often held that a single dwelling covenant does not control parking and traffic and in this case Mr Easton indicated that the plaintiff’s first proposal is unlikely to cause a significant increase in traffic;[14]

(k)  the restriction on building materials in the Covenant appears to evidence an intention to encourage the type of buildings being constructed in 1987, namely brick or brick veneer dwellings; and

(l)     Mr Easton suggests that where render has been used this does not appear to detract from the overall character of the neighbourhood and the modification sought to include rendered material would bring the terms of the  Covenant in line with current building practices.

[14]Re Forrester (n 9) [94]; Re Jonson [2016] VSC 721 [41] (Ierodiaconou AsJ); Re EAPE (Holdings) Pty Ltd [2019] VSC 242 [46] (Lansdowne AsJ).

  1. The plaintiff’s counsel submitted that the plaintiff’s Proposal sought to address the concerns raised by the objectors and the Court’s observations of the character of the neighbourhood following the site inspection.  Counsel submitted that the Court may determine that not all of the amendments reflected in the plaintiff’s Proposal and amended application are warranted.  In particular counsel suggested the Court could decide to grant the application to modify the Covenant without one or other of the requirement for the semi-detached arrangement to achieve a single building typology, the setback from Malanie Close indicated on Plan A or the requirement that there be no dividing fence visible from the front boundary if two dwellings are constructed.

Consideration

  1. I am satisfied that the proposed modification to the Covenant will not cause substantial injury to the beneficiaries and  that there is no reason for the Court not to exercise its discretion to grant the amended application.

  1. At the hearing on 26 October 2023, the plaintiff’s counsel invited the Court to conduct a view of the Subject Land and the neighbourhood.  Neither the plaintiff nor the objectors objected to me doing so unaccompanied.  On 10 January 2024 at approximately 2:30 pm I conducted the view.  I observed:

(a)   my impression of the neighbourhood is of large blocks and of Malanie Close, that most of the blocks had a very wide frontage;

(b)  in Malanie Close most houses were set well back from the road although the dwelling setback varied in the broader neighbourhood;

(c)   the house type in the neighbourhood varied greatly from multi storey mansions to large single storey dwellings;

(d)  at least one of the lots on Malanie Close contained a large freestanding garage in addition to a single storey dwelling;

(e)   the area encompassed by Malanie Close from its intersection with Carolyn Court to about one lot back from its intersection with Carmen Crescent, which area coincides with the area covered by the parent subdivision, appeared flatter than other parts of the neighbourhood, with less open paddock areas and generally (but not uniformly) wider, shallower blocks;

(f)    Mr Easton’s description of the neighbourhood is consistent with my observations during the view.

  1. I am satisfied that the modification of the Covenant to allow two dwellings as proposed by the Plaintiff will not substantially injure the persons entitled to the benefit of the Covenant.  I have reached this view because:

(a)   I accept Mr Easton’s description of the Covenant and his characterisation of the neighbourhood, noting that the shape of the lots in Malanie Close is generally wider and shallower than in other parts of the neighbourhood.

(b)  while I accept the objectors’ submission that the beneficiaries are mostly long term residents who likely purchased with knowledge of the Covenant and because the area would remain low density, the plaintiff’s Proposal, being for each dwelling to be on 2000m2 remains low density;

(c)   in this regard I have, consistently with the authorities, not considered the evidence of town planning considerations and restrictions including the amendment to the town planning scheme in November 2019 to allow lots of 2000m2 if the land is connected to reticulated sewerage when considering whether the plaintiff has satisfied the Court that there will not be substantial injury to beneficiaries;

(d)  while the  Proposal was amended to retain the existing setback and to ensure that the two proposed dwellings would present as one building from the street and the abutting lots, in my view issues such as setback and fencing are not within the benefits conferred by the Covenant and so not part of the comparison necessary in an assessment of substantial injury;

(e)   there is unlikely to be any substantial injury arising from the proposed increase from one dwelling to two dwellings in terms of increased traffic and parking, in any event, the Covenant does not contain any restrictions regarding traffic;

(f)    the proposed modification will not create a precedential effect because, as the plaintiff submitted, the Court has ordered variations to similar covenants in three other matters within the defined neighbourhood, one of which is almost directly behind the Subject Land, and in any event, each application falls to be assessed on its own merits.

  1. I have decided that the requirements of maintaining the existing setback and ensuring, if two dwellings are constructed, that any dividing fence is not visible from Malanie Close  should not be included in any orders reflecting the Court’s determination of the application.  I have reached this view because, while they address concerns raised by the objectors, the inclusion of these things would increase the benefits conferred by the Covenant on the beneficiaries and thus they are unnecessary and inappropriate modifications, where I have determined no substantial injury to the beneficiaries arises.

  1. In my view it is appropriate retain the plaintiff’s intention that if two dwellings are constructed on the Subject Land they would present as one building from the street and abutting lots.  In my view the particular character of Malanie Close, comprising the beneficiaries of the Covenant, distinguishes the modification appropriate here from other modifications of Covenants in the wider neighbourhood identified by Mr Easton.

  1. I accept Mr Easton’s evidence and opinion that the use of rendered materials in the neighbourhood and do not consider there will be any substantial injury to the beneficiaries if the building materials restriction is modified to permit the use of other materials with a rendered finish. I agree such a modification would bring the restriction in line with modern building practices and there was no suggestion the use of rendered material would be out of character with the neighbourhood.  The objectors did not address this aspect of the Proposal and I have assumed they do not object to it.

Conclusion

  1. For the reasons given above, the application to modify the Covenant so as to permit up to two dwellings and in respect of building materials will be granted.

  1. I request the plaintiff prepare a draft order reflecting these reasons.


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Vrakas v Registrar of Titles [2008] VSC 281
Suhr v Michelmore [2013] VSC 284
AE Brighton Holdings Pty Ltd v UDP Holdings Pty Ltd [2019] VSC 688