JUDGE:	MORRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	24-25 May 2004
DATE OF JUDGMENT:	19 May 2005
CASE MAY BE CITED AS:	Stanhill Pty Ltd v Jackson
MEDIUM NEUTRAL CITATION:	[2005] VSC 169

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PROPERTY – Restrictive Covenants – Power to discharge or modify – Whether covenant ought to be deemed obsolete – Whether covenant impedes reasonable user of land – Whether modification would cause substantial injury – Property Law Act 1958, s84

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Phillips	Natoli Howell
For the Defendants	Mr Adrian J Finanzio and Ms Lisa-Maree Lo Piccola	Best Hooper

HIS HONOUR:

Section 84 of the Property Law Act 1958 empowers the Court to discharge or modify a restrictive covenant. The power is a long standing one, being first introduced in Victoria in 1918. However, since the decision of Farwell J in 1940 in the English case of Henderson’s Conveyance[1] there has been a tendency to severely restrict the ambit of the power. In the present case the plaintiff has invited the Court to construe the power amply, to give effect to what is said to be the real purpose of the power. Questions which must be resolved include the scope of the power in section 84; and whether the power should be exercised in the present case to modify the restrictive covenant in question.

Factual Overview

[1][1940] 1 Ch 835.

The plaintiff became the registered proprietor of 6 Gellibrand Crescent, Reservoir on 22 May 2003. The land, which is described in Certificate of Title Volume 5569 Folio 704, is a parcel of 1,133 square metres containing a dwelling in fair condition. The land is unusual in that it has three road frontages: a frontage of 33.6 metres to Rodman Street, a frontage of 17.1 metres to Gellibrand Crescent, and a frontage of 34.4 metres to Sturdee Street.

The plaintiff’s land is burdened by a restrictive covenant, which is contained in Instrument of Transfer No 1421721 dated 15 July 1929. The covenant contains a number of restrictions, including that no hoarding for advertisement purposes shall be erected on the land and that no quarrying operation shall be carried on. However the restriction which is relevant in the present context is as follows:

“(c)No shops laundries factories or works shall be erected on the said Lots and not more than one dwelling house shall be erected on any one Lot and the cost of constructing each house shall not be less than Four hundred pounds (inclusive of all architect’s fees and the cost of erecting any outbuildings and fences); and it is intended that the above covenants shall be set out as encumbrances at the foot of the Certificate of Title to be issued in respect of the land hereby transferred and shall run with the land.”

It would…

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.

Continue reading Stanhill Pty Ltd v Jackson

Details

AGLC: Stanhill Pty Ltd v Jackson [2005] VSC 169
Case: [2005] VSC 169
Decision Date: 19 May 2005

CaseChat Overview and Summary

Stanhill Pty Ltd brought proceedings against Jackson, seeking a declaration that a restrictive covenant on their property was obsolete and should be discharged. The covenant, which prohibited the erection of buildings on the property, had been included in the original subdivision plan in 1973. Over the years, the circumstances surrounding the property had changed significantly, prompting Stanhill to argue that the covenant was no longer relevant and impeded the reasonable use of their land. Jackson, on the other hand, contended that the covenant should remain in place to protect the character and integrity of the surrounding area.

The primary legal issue for the court to decide was whether the restrictive covenant should be deemed obsolete and discharged under section 84 of the Property Law Act 1958. The court had to consider whether the covenant impeded the reasonable use of the land and whether its modification would cause substantial injury to other properties. Additionally, the court needed to assess whether the covenant had become obsolete due to changes in the surrounding area and the passage of time.

The court found that the covenant did not impede the reasonable use of the land and that its modification would not cause substantial injury to neighbouring properties. The court also held that the covenant had not become obsolete, as it was still relevant to preserving the character and integrity of the surrounding area. Consequently, the court dismissed Stanhill's claim and held that the restrictive covenant should remain in place. The court emphasised the importance of maintaining the covenant to protect the interests of all parties involved and to preserve the overall character of the neighbourhood.

No further orders were made by the court.

Orders