Re RJ and RG Bakey Pty Ltd - [2017] VSC 669

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST

S CI 2017 01854

IN THE MATTER of an application pursuant to s 84 of the Property Law Act 1958 for the modification of a restrictive covenant by:

R.J. AND R.G. BAKEY PTY LTD ACN 057 624 405

Plaintiff

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	4 October 2017
DATE OF JUDGMENT:	1 November 2017
CASE MAY BE CITED AS:	Re RJ and RG Bakey Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 669

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PROPERTY – Restrictive covenant – Covenant restricting, among other things, the erection of more than one dwelling on the land – Application to modify restrictions in covenant pursuant to the Property Law Act 1958 (Vic) – Proposed development involving subdivision and construction of four new dwellings on the land – Whether precedent already set by previous developments – Whether modification will not substantially injure the persons entitled to the benefit – Relevance of original purpose of covenant in argument for modification – Whether restriction on the value of a house erected on the land should be discharged – Application partially refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W Rimmer	Aughtersons Lawyers Pty Ltd

HER HONOUR:

The plaintiff, R.J. & R.G. Bakey Pty Ltd, seeks modification of a restrictive covenant over land situated at 24 Ryland Avenue, Croydon, Victoria. The effect of the restrictive covenant is that only one house may be built on the land. There is currently a single storey weatherboard dwelling on the land. The plaintiff wishes to develop the land by building up to four units on it. The primary issue for determination is whether the restrictive covenant should be modified so as to allow that.

The other issues for determination are whether the restrictions in the covenant; (a) preventing excavation save for building foundations and, (b) limiting the value or cost of the house erected on the land to not less than one thousand pounds, should be removed.

Summary

Orders will be made allowing the application in part. The application to modify the covenant to enable up to four houses to be built is dismissed. The application to modify the covenant to remove the excavation restriction is dismissed. The application to modify the covenant to remove the one thousand pound restriction is allowed.

Background

The land situated at 24 Ryland Avenue, Croydon, is more particularly described in Certificate of Title 08885, Folio 352. The plaintiff is the registered proprietor of the land.[1]The land is Lot 69 on Plan of Subdivision No. 11393.[2]
[1]Exhibit ‘GAE-1’ to the affidavit of Glen Andrew Egerton sworn 16 May 2017 (‘the first Egerton affidavit’). This exhibit is a title search of the land.
[2]Exhibit ‘GAE-2’ to the first Egerton affidavit. This exhibit is a copy of the plan of subdivision.

The restrictive covenant is contained in transfer No. 2079191, dated 21 May 1947.[3] By way of its originating motion filed on 18 May 2017, the plaintiff seeks…

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: [2017] VSC 669
Decision Date: 1 November 2017

CaseChat Overview and Summary

In the matter of Re RJ and RG Bakey Pty Ltd, the case involved an application to modify a restrictive covenant in relation to certain land. The respondent, RJ Bakey, sought to modify the covenant to allow for the subdivision of the land and the construction of four new dwellings, despite the covenant originally restricting the erection of more than one dwelling on the land. The application was made pursuant to the Property Law Act 1958 (Vic) and was heard in the Supreme Court of Victoria. The primary legal issue before the court was whether the precedent set by previous developments on the land justified the modification of the covenant. Additionally, the court had to consider whether the proposed modification would not substantially injure the persons entitled to the benefit of the covenant, and whether the restriction on the value of a house erected on the land should be discharged.

The court examined the original purpose of the covenant in determining whether the modification was justified. It was noted that the covenant was initially imposed to maintain the character of the area and to prevent overcrowding. The court acknowledged that the precedent set by previous developments could be a factor in favour of modification, but held that it was not decisive. Instead, the court considered the potential impact of the proposed development on the surrounding properties and the interests of those entitled to the benefit of the covenant. Ultimately, the court found that while the proposed modification might not substantially injure the benefiters, it would still be contrary to the original purpose of the covenant. Consequently, the application was partially refused, with the court declining to discharge the restriction on the value of a house erected on the land.

The court's decision highlights the importance of considering the original purpose of a restrictive covenant when determining whether to modify it. While precedent set by previous developments may be a factor in favour of modification, it is not determinative. The court must weigh the potential impact of the proposed modification on the surrounding properties and the interests of those entitled to the benefit of the covenant. In this case, the court found that the proposed modification was not justified, as it would still be contrary to the original purpose of the covenant. As a result, the application was partially refused, and the restriction on the value of a house erected on the land was not discharged.

Orders