Rosenwald v Hogg [2015] VSC 199
[2015] VSC 199
•13 May 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2014 01142
| ROSENWALD | Plaintiff |
| v | |
| HOGG | Defendant |
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JUDGE: | MACAULAY J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 21 - 23 April 2015 |
DATE OF JUDGMENT: | 13 May 2015 |
CASE MAY BE CITED AS: | Rosenwald v Hogg [2015] VSC 199 |
MEDIUM NEUTRAL CITATION: | [2015] VSC 199 |
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REAL PROPERTY – Restrictive Covenant – Construction – Whether covenant should be discharged – Whether covenant should be modified - Proceeding dismissed – Property Law Act 1958 (Vic) s 84(1).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N Jones | Subdivision Lawyers |
| For the Defendant | Mr N Tweedie SC with D Robinson | Rigby Cooke Lawyers |
HIS HONOUR:
Introduction
Hila Rosenwald, the plaintiff, wishes to demolish the detached single dwelling on her land at 468 Hawthorn Road, Caulfield South (‘the subject property’) — situated on the corner of Hawthorn Road and Seaview Street — and replace it with a three storey building, with a basement car park, containing up to 13 apartments.
To do so, she requires the discharge or modification of a restrictive covenant imposed on the title unless I determine that, on its proper construction, the covenant does not limit the use of the land to a single dwelling. For reasons I will explain, I consider that the covenant does limit the use of the land to one dwelling. So, the question is whether I am satisfied that it is appropriate to either discharge or modify it to allow for multi-dwelling use. Again, for reasons I will explain, I am not satisfied the covenant should be discharged. It follows that the critical issue is whether it should be modified.
Modification of the covenant is sought either because the restriction on the use of the land for only a single dwelling is obsolete, or because a modification to permit the development that Mrs Rosenwald proposes would not substantially injure those who are entitled to the benefit of the covenant. Proof of either basis would suffice. Each of these bases corresponds to a ground for modification available under s 84(1) of the Property Law Act1958 (Vic) (‘the Act’).
But the real issue is narrower still. The only person with the benefit of the covenant who has objected to Mrs Rosenwald’s application is the defendant, Margaret Hogg.[1] Mrs Hogg owns the land on the corner of Seaview Street and Bracken Street, about 100m to the west of Mrs Rosenwald’s land. Mrs Hogg does not object to the construction of a two storey building with up to 8 apartments, on a building envelope of 50% of the land area and with basement car parking for 8 cars (and subject to a few other parameters I need not mention at present). Mrs Hogg’s position implies that a covenant beneficiary would not suffer substantial injury if a building of that kind was built, but that such beneficiary would suffer substantial injury if a building was erected with one additional storey, with up to 5 more apartments and on a building envelope on 10% more of the land area (as proposed by Mrs Rosenwald).
[1]In fact, Mrs Hogg herself lives in a nursing home and has alzheimer’s disease. The objection was lodged on her behalf by her son who holds her power of attorney. Her son lives nearby to the burdened land but does not enjoy the benefit of the covenant. None of the remaining 13 beneficiaries of the covenant objected.
Broadly put, Mrs Hogg’s position is that if a modification is to be permitted, the resulting development needs to retain a single dwelling-like appearance in order for it to not substantially injure those who benefit from the covenant. She considers that a development of the kind proposed by Mrs Rosenwald would not have a single-dwelling like appearance. Further, she argues that the additional population density it would bring, with resulting additional traffic implications, would tip the scales so that the impact of the development would cause substantial injury. She correctly points out that it is for the applicant to prove that it would not.
In essence, when other arguments are cleared away, the case largely falls to be determined on whether modifying the covenant to permit the built-form of a development that is proposed by Mrs Rosenwald would ‘substantially injure’ a covenant beneficiary as that concept is to be properly understood.
The three issues are as follows:
(a) On its proper construction, does the restrictive covenant limit the use of the land to only one dwelling?
(b) If so, should the covenant be discharged?
(c) If not, should the covenant be modified as proposed by Mrs Rosenwald?
What is the proper construction of the covenant?
Mrs Rosenwald’s land is described as lot 36 on LP 5916, certificate of title volume 4406 folio 007. The covenant encumbering her land is contained in instrument of transfer 0950916 registered on the title of the land on 10 July 1920.
The covenant provides, relevantly, that:
… the said James Kenyon for himself his heirs and executors administrators and transferees hereby covenant with the said Percy Owen his heirs executors administrators and transferees registered proprietor or proprietors for the time being of the untransferred portion of the land in the said Certificate of Title that neither he the said James Kenyon nor his heirs executors administrators or transferees will remove cause or allow to be removed from the said land herby transferred except for the purpose of erecting a building thereon any of the earth sand or clay thereon or make any excavation thereon except for the purpose aforesaid nor shall erect more than one building including outbuildings on the said lot hereby transferred and such building shall be a private dwelling of the value including fences and outbuildings of at least four hundred pounds and shall not erect such building nearer than twenty feet from Hawthorn Road.
Mrs Rosenwald seeks a declaration to the effect that the covenant does not prevent the construction on the land of a single building containing a number of residential apartments as well as outbuildings. Mrs Hogg argues that it restricts the number of dwellings in the one building to one.
It can be seen that the covenant has three relevant elements, emphasised in bold above, namely —
·there shall be not more than one building (including outbuildings) erected on the land;
·that building shall be a private dwelling, and
·it shall be no nearer than 20 feet from Hawthorn Road.
It is axiomatic to say that in each case the proper construction of a covenant depends upon the precise form of words used and the context in which those words appear.[2] It is my view that the natural and ordinary meaning of the words as they appear in the covenant in this case is that they prohibit construction on the land of more than one building containing more than one dwelling.
[2]See Re Marshall and Scott’s Contract [1938] VLR 98, 100; Re Bishop and Lynch’s Contract [1957] VR 179, 181; Tonks v Tonks (2003) 11 VR 124, 126 [13]; Prowse v Johnstone & Ors [2012] VSC 4 (11 January 2012) [56]; See also Philip Barton, ‘Interpretation of Restrictive Covenants’ (2013) 87(10) Law Institute Journal 64, 64-7 and Adrian Bradbrook and Susan MacCallum, Bradbrook and Neave’s Easements and Restrictive Covenants (LexisNexis Butterworths, 3rd ed, 2011) 407-8 [15.4].
In substance, I adopt the argument set out in the defendant’s written outline of submission. Without repeating the whole of it, I accept that the preponderance of authority interprets the word ‘dwelling’ in the narrower of the two senses identified in Downie v Lockwood,[3] namely, a structure adapted for occupation by persons living in one household. In this particular case, that construction is reinforced by the use of the word ‘private’ ahead of the word ‘dwelling’.[4]
[3][1965] VR 257, 262.
[4]See Prowse v Johnson [2012] VSC 4 (11 January 2012) [74], where Cavanough J distinguished Natraine Nominees Pty Ltd v Patton (2001) V ConvR ¶54-636; See also Bradbrook and MacCallum, above n 2, 411 [15.12].
Viewed as a discrete element, it could rationally be argued that the expression ‘a private dwelling’ in some contexts merely prescribes residential use rather than limits the number of dwellings. But, in my opinion, the composite and sequential prescription of the ‘one building’ to be ‘a private dwelling’ is not merely intended to prescribe a residential use of the one building, but is also intended to limit the number of households to be accommodated in that building to one.[5]
[5]Contrast Tonks v Tonks (2003) 11 VR 124, 127 [17].
I reject Mrs Rosenwald’s argument on the construction of the covenant.
Should the covenant be discharged altogether?
Section 84(1) of the Act relevantly provides as follows:
84 Power for Court to modify etc. restrictive covenants affecting land
(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 (subject or not to the payment by the applicant of compensation to any person suffering loss in consequence of the order) upon being satisfied—
(a)that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Court deems material the restriction ought to be deemed obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or
(b)…
(c)that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction:
…
Discharge due to obsolescence?
Principles
It is noted that s 84(1)(a) of the Act has two limbs, the first of which is that the restriction ought be deemed obsolete by reason of changes in the character of the property or neighbourhood or other circumstances of the case which the Court deems material. The second limb is that the continued existence of the covenant would impede the reasonable user of the land without securing practical benefits to other persons or would unless modified so impede such user.
In this case the plaintiff disavows any reliance upon the second limb so, except in relation to the notion of ‘practical benefits’ which is picked up in construing the ‘substantially injure’ ground in s 84(1)(c) (discussed below), I will not mention it further.
The principles governing the application of s 84(1) of the Act are well settled and were not in dispute. They were comprehensively summarised by Kyrou J at paragraphs 23-48 of Vrakas v Registrar of Titles (‘Vrakas’).[6] I gratefully adopt his Honour’s summary.
[6][2008] VSC 281 (28 July 2008).
When considering the ‘obsolete’ ground sub-paragraph (a), his Honour summarised the principles this way:[7]
·What is the “neighbourhood” is a question of fact[8] and must be determined as at the date of the hearing, rather than the date of the covenant.[9]
·A covenant is “obsolete” if it can no longer achieve or fulfil any of its original objects or purposes or has become “futile or useless”.[10]
·A covenant is not obsolete if it is still capable of fulfilling any of its original purposes, even if only to a diminished extent.[11] Also, a covenant is not obsolete even if the purpose for which it was designed had become wholly obsolete, provided that it conferred a continuing benefit on persons by maintaining a restriction on the user of land.[12]
·The test is whether, as a result of changes in the character of the property or the neighbourhood, or other material circumstances, the restriction is no longer enforceable or has become of no value.[13]
·If a covenant continues to have any value for the persons entitled to the benefit of it, then it will rarely, if ever, be obsolete.[14]
·Strictly speaking, the inquiry is as to whether the restriction of user created by the covenant is obsolete, rather than as to whether the covenant itself is obsolete.
[7]Ibid [25]-[27].
[8]Re Miscamble’s application [1965] VR 596, 602 (‘Miscamble’); Greenwood v Burrows (1992) V ConvR ¶54-444, 65 196 (‘Greenwood’).
[9]Miscamble [1965] VR 596, 597, 601; Re Pivotel Pty Ltd (2001) V ConvR ¶54‑635; [2000] VSC 264 (23 June 2000) [29] (‘Pivotel’).
[10]Miscamble [1965] VR 596, 597, 601; Re Markin [1966] VR 494, 496; Re Robinson [1971] VR 278, 281; Greenwood (1992) V ConvR ¶54-444, 65 196 - 65 197; Pivotel (2001) V ConvR ¶54-635; [2000] VSC 264 (23 June 2000) [31]-[33].
[11]Miscamble [1965] VR 596, 597; Greenwood (1992) V ConvR ¶54-444, 65 197.
[12]Greenwood (1992) V ConvR ¶54-444, 65 197 - 65 198.
[13]Ibid 65 196.See also Miscamble [1965] VR 596, 601.
[14]Re Robinson [1971] VR 278, 282; Greenwood (1992) V ConvR ¶54-444, 65 197.
Description of the area and neighbourhood
Before applying the principles above, I will first describe the area and the neighbourhood. The subject property is located on the western side of Hawthorn Road, close to midway between Glen Huntly Road and North Road. Both the plaintiff’s and the defendant’s experts, whilst coming to very different conclusions as to what constituted ‘the neighbourhood’, agreed that the subject property has good access to a wide range of services and facilities within a kilometre radius, including bus and tram routes, schools and parks and reserves. The subject property is currently zoned General Residential Zone (Schedule 2), the land to immediately to the west is zoned Neighbourhood Residential (with strict controls applying to residential development and density), and the land across Hawthorn Road to the east is zoned Commercial 1 Zone.
Describing the change in the character of the area, Mr Chapman, the plaintiff’s town planning expert, noted that there had been a shift from the ‘mainly detached single dwellings (with some attached pairs) to a stronger presence of medium density housing on redeveloped sites in the back streets and medium to higher density development including apartment buildings occurring along Hawthorn Road’.[15] Mr Chapman pointed to instances of two and three storey townhouses and apartments along the western side of Hawthorn Road (including at 462 Hawthorn Road), as well a five story mixed-use development, with commercial tenancies and apartments above, across from the subject property, on the eastern side of Hawthorn Road. In contrast, the defendant’s expert, Mr Milner, was of the view that the ‘new genre of apartment style development’ constituted the exception rather than the rule in the predominately residential neighbourhood, setting out: [16]
The properties are characterised by allotments like the subject site of approximately 650-700sqm, generous street setbacks, relative low site coverage, rear gardens as well as a clear presence of mature vegetation including trees and shrubs
…
The residential neighbourhood surrounding the subject site has not been subject to extensive medium or higher density apartment style developments, but select multi-dwelling developments are evident both within the area covered by the covenant and the broader neighbourhood.[17]
[15]Report of Matthew Chapman dated 14 May 2014, part of exhibit E, [14].
[16]Report of Robert Milner dated August 2014, part of exhibit I, p.31 [107].
[17]Ibid p.30, [99]-[100].
There are a number of properties within the subdivision that have already been turned over to multi-dwellings. Mr Chapman said that several of the 36 allotments in the original subdivision have been re-subdivided to allow for the development of more than one dwelling, noting that:
Three properties in the immediate vicinity of the subject site have been developed with two dwellings and subdivided, being the properties at 3 & 5 Seaview Street (immediately to the west), 1 & 2/4 Banksia Road (diagonally to the west) and 472 & 472A Hawthorn Road (to the south).[18]
[18]Report of Matthew Chapman dated 14 May 2014, above n 15, [12].
In his subsequent report, Mr Chapman also said:
…if we are to consider the parent subdivision in its entirety, the integrity of the covenant has already been eroded by the development of several multi-dwelling developments within the parent subdivision (of which there are at least six examples).[19]
[19]Report of Matthew Chapman dated 9 September 2014, part of exhibit F, [40].
Moreover, a number of the properties never had any single dwelling covenant and there were a few which once had them but no longer have them. In total, about a quarter of the 36 allotments within the subdivision were always amenable to having a multi-dwelling residence built upon it. That does not mean that all such properties do have multi-dwelling residences on them; many still only have a single dwelling.
But, the overall result is that the subdivision within which Mrs Rosenwald’s property is to be found is a residential area, predominantly with single dwellings but with a fair smattering of multi-dwelling developments.
Further, even where there is a single dwelling covenant burdening land, owners of some properties have demolished the older style single dwelling and constructed a modern single dwelling occupying greater land area and of at least two storeys. Current zoning west of the row of houses on Hawthorn Road within the subdivision would prevent the construction of any houses of more than two storeys, although that restriction does not apply to the houses along the western side of Hawthorn Road which have a height restriction of 10.5 metres which could accommodate three storeys.
From this it is evident that the covenant on Mrs Rosenwald’s land was, in conjunction with like covenants on other properties within the subdivision, intended to contribute to the creation and maintenance of a particular character within the neighbouring area: that is, a residential area characterised, potentially, by a mixture of single-dwellings and multi-dwellings but nevertheless with a preponderance of single dwellings.
Applying the principles
In the end, I doubt whether Mrs Rosenwald ultimately pressed her argument that the covenant was not capable of fulfilling any of its original purposes having regard to the character of the neighbourhood (however it was defined) as it stood today. Nevertheless, to the extent that she did, I will address it briefly.
For this argument, I do not need to resolve the issue of which of the two ‘neighbourhoods’ put forward by the opposing town planning experts called respectively by each party was the more appropriate. In my view a consideration of either of them would bring the same result. The purpose of the single dwelling covenant was, it is plain enough, to maintain a residential use on the land so as to contribute to the residential amenity of the neighbourhood whichever of the two ‘neighbourhoods’ one selects. The competing conceptions of ‘the neighbourhood’ might each have different proportions of residential and non-residential properties, but maintaining that mix still requires the preservation of some residential uses.
Although the properties on the western side of Hawthorn Road in the vicinity of Mrs Rosenwald’s land face properties on the eastern side of Hawthorn Road that have a mixture of commercial, residential and mixed commercial/residential uses, nevertheless the properties on the western side are all residential in character. Some, it is true, are now multiple dwelling residences. Lying further west of the row of houses fronting the western side of Hawthorn Road, within the original subdivision of which Mrs Rosenwald’s land is part, the properties are entirely residential.
Retaining a residential use on Mrs Rosenwald’s land clearly fulfils at least part of the original purpose of the single dwelling covenant, even if only to a diminished extent from its original intent. It is, therefore, not correct to say that there would be no value or benefit to the beneficiaries of the covenant in preventing the construction of a non-residential dwelling on Mrs Rosenwald’s land. Current town planning zoning, absent the private restrictive covenant, would not prevent the use of the land for some non-residential purposes. Apart from the private restrictive covenant, Mrs Rosenwald’s land could be developed, without a permit, as a medical practice or place of worship or, with a permit, for a café or function centre or a range of other trading uses.[20]
[20]Transcript 75-7.
Because a non-residential use of her land would alter the proportion of residential and non-residential uses in favour of non-residential use, and potentially create a precedent which might further erode the preponderance of residential use, whichever neighbourhood is selected the restriction imposed by the covenant continues to serve its original purpose.
I reject Mrs Rosenwald’s argument that the covenant should be discharged on this ground.
Discharge due to no substantial injury?
Section 84(1)(c) of the Act provides that the court has power to discharge or modify a restrictive covenant if satisfied that the proposed discharge or modification will not substantially injure[21] the persons entitled to the benefit of the restriction.
[21]I also term this the ‘substantial injury’ test.
The principles with respect to substantial injury were also conveniently summarised by Kyrou J in Vrakas. Because the law likens the ‘substantially injure’ test to the notion of ‘no practical benefits’ in the second limb of s 84(1)(a) of the Act, as well as setting out Kyrou J’s summary of the principles for substantially injure, I also set out what his Honour said in respect of ‘practical benefits’:[22]
“Practical benefits” within the meaning of the second limb of s 84(1)(a) are any real benefits to a person entitled to the benefit of a restrictive covenant and are not limited to the sale value of the land benefited by the covenant.[23]
It must be established that the covenant is not necessary for any reasonable purpose of the person who is enjoying the benefit of it.[24]
…
Whether there are any practical benefits to other persons is a question of fact.[25]
[22]Vrakas [2008] VSC 281 (28 July 2008) [28]-[33].
[23]Re Robinson [1971] VR 278, 283; Pivotel (2001) V ConvR ¶54-635; [2000] VSC 264 (23 June 2000) [36].
[24]Re Alexandra [1980] VR 55, 59; Pivotel (2001) V ConvR ¶54-635; [2000] VSC 264 (23 June 2000) [35]; Bevilacqua [2005] ANZ ConvR 504; [2005] VSC 235 (30 June 2005) [23].
[25]Re Alexandra [1980] VR 55, 59.
Specifically in relation to s 84(1)(c) of the Act, his Honour continued that:[26]
[26]Vrakas [2008] VSC 281 (28 July 2008) [35]-[40].
·[It] 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.[27]
·The injury must not be unsubstantial, and must be real and not a fanciful detriment.[28]
·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.[29]
·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.[30]
·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.[31]
·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).[32]
·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.[33]
[27]Re Cook [1964] VR 808, 810-11; Fraser v Di Paolo (2008) V ConvR ¶54-751; [2008] VSC 117 (18 April 2008) [36] (‘Fraser’).
[28]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.
[29]Re Cook [1964] VR 808, 810.
[30]Stanhill (2005) 12 VR 224, 246 [69]; Bevilacqua [2005] ANZ ConvR 504; [2005] VSC 235 (30 June 2005) [22].
[31]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) V ConvR ¶54-751; [2008] VSC 117 (18 April 2008) [2008] VSC 117, [49]-[57].
[32]Greenwood (1992) V ConvR ¶54-444, 65 200.
[33]Re Alexandra [1980] VR 55, 60.
For reasons similar to those I have stated for the obsolescence ground, it would be very difficult to argue that no substantial injury would be caused to the beneficiaries of the covenant if it was removed altogether. As I say, it remains the only bastion against the construction of certain non-residential buildings (described above at paragraph 32) on a corner allotment which stands as the gateway to what is otherwise a residential subdivision. Moreover, as I have said, the properties on the western side of the road, including Mrs Rosenwald’s property, retain that residential character.
In summary, I reject any contention that the covenant should be discharged altogether. Accordingly, as I said at the outset, the critical issue in this case is whether or not the covenant should be modified. I now turn to that matter.
Should the covenant be modified and, if so, on what terms?
In her amended originating motion, amended during the trial, Mrs Rosenwald applied for an order that the covenant..
...be modified insofar as it affects the land…by allowing the construction of a single dwelling containing a number of residential apartments as well as outbuildings on the said land in accordance with the plans being exhibit HR 2 to the plaintiff’s affidavit sworn 24 June 2014 as may be modified by the Glen Eira City Council on the issue of a planning permit.
The modification was sought on the grounds that, unless so modified, the covenant is obsolete or that the proposed modification of the covenant would not substantially injure the persons entitled to the benefit of the restriction in the covenant.
Here, the covenant does not set out that the private dwelling need be a particular form, height or specify a particular site coverage. Although there are, and always could have been, a proportion of buildings scattered amongst the subdivision which were of a multi-dwelling nature and appearance, the single dwelling covenant has the practical benefit of helping to maintain the predominance of single dwelling buildings.
It may well be the case that on a particular allotment a modern multi-dwelling could hypothetically be built with such a monolithic presentation to the street that it has the appearance of a single dwelling construction. Whilst that is hypothetically possible, the features of the modern single dwellings that have already been built on the relatively large allotments suggest that is improbable.
In any event, where the presentation of a building to the street, and thus its contribution to the perceived character of the neighbourhood, is only across the shorter front boundary, its overall depth and sidewall appearance plays a lesser role in affecting that character than when the building is situated on a corner block. And, as I have already observed, not only is Mrs Rosenwald’s land on a corner block, but it is one of the ‘gateway’ properties from Hawthorn Road to Seaview Street, and the residential subdivision lying within.
A large two storey residence with reasonably generous setbacks from the street front and side may be one thing; a three storey building necessary to accommodate 13 individual dwellings, with resultant loss of open land area due to the need for a larger building envelope and common access to a large basement car park, is another. One is more closely aligned to the mass and appearance of a single-dwelling building; the other is hard to disguise as a multi-dwelling apartment block.
Although it is a finely balanced matter, it is my view that in this particular case the boundary-line in terms of whether there is substantial injury to the beneficiary of the covenant lies between the impact of a development which retains a ‘single dwelling-like appearance’, on the one hand, and a development which is indisputably of a multi-dwelling appearance, on the other.
Mrs Rosenwald’s proposed development is of the latter kind. The more limited, eight-dwelling development of only two storeys, with greater setbacks, lesser building envelope and a more ‘domestic’ roofline, as proposed by Mrs Hogg’s expert, is of the former kind.
It is true, as Mrs Rosenwald’s counsel repeatedly emphasised, that the existing covenant does not purport to dictate the built-form features of a single-dwelling to be erected on the land (apart from a setback from Hawthorn Road). It is also true that, consistently with the zoning permissions applicable to land on Hawthorn Road, a single-dwelling could, in theory, be constructed with such large proportions that it might resemble a set of apartments containing 13 or so separate dwellings.
But, that argument misses the point. The subtle question here is this: what modification would not substantially injure the beneficiaries of the covenant given the practical benefits the covenant secures and the character of the surrounding area as it exists today? A modification so crafted that the resulting development would continue to contribute to the visual perception of a predominantly single-dwelling neighbourhood, yet permit greater population density than would a single-dwelling, is well capable of providing—and in my view does provide—a logical and appropriate answer to that question.
I place somewhat less weight on the potential increase in traffic that would be associated with 13 dwellings as opposed to eight dwellings—another potential impact raised by Mrs Hogg—although I cannot discount the possibility that such an increase would be perceptible and possibly injurious to the covenant beneficiaries.
Further, although there is a risk that a modification to permit a development of the kind proposed by Mrs Rosenwald could set an injurious precedent to beneficiaries of the covenant, I am inclined to think that its impact would be readily confined to only conferring precedential benefit to land on Hawthorn Road burdened by a similar covenant.
In short, I am unable to be satisfied that a development of the kind proposed by Mrs Rosenwald would not cause substantial injury to the beneficiaries of the covenant. For that reason, I am not satisfied that the covenant should be modified in the way suggested by Mrs Rosenwald so as to permit it.
There is no need to resolve what terms an appropriate modification might have contained were I of a different view. But, the language of the modification ultimately proposed by Mrs Rosenwald in her amended originating motion was problematic as was pointed out in argument by Mrs Hogg. Essentially, the expression ‘as modified by the Glen Eira Council’ embedded a Trojan-horse into the order. That is evident if regard is paid to the scope for modification during the permit application process, and the broad, alternative uses to which the property might be put if a variation to the plans was made during the permit process or at some later time whether by the current or a later owner. Those concerns caused Mrs Rosenwald, during her final submissions, to suggest yet further limitations to the terms of the propose modification. It is unnecessary now to consider them.
Conclusion
I am not satisfied that the construction of the restrictive covenant contended for by the plaintiff is correct, so I decline to make the declaration she seeks. Further, for the reasons I have given above, I am not satisfied that the covenant should be discharged altogether or that it should be modified in the terms proposed by the plaintiff.
Accordingly, the plaintiff fails in her application.
One final observation. This is a classic example of a case where the parties may well have been able to achieve a ‘compromise’ result, by negotiation and agreement, which the court simply could not give them. That opportunity was given to the parties at the commencement of this case when I pointed out the finely balanced difference between them having regard to their respective experts’ opinions.
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