Sumervale Pty Ltd v Viva Energy Refining Pty Ltd - [2024] VSCA 140

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0085

SUMERVALE PTY LTD (ACN 161 202 697)	First Applicant
AND
SUNYHILL PTY LTD (ACN 161 192 392)	Second Applicant
V
VIVA ENERGY REFINING PTY LTD (ACN 004 303 842)	Respondent

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JUDGES:	NIALL JA, RICHARDS and J FORREST AJJA
WHERE HELD:	Melbourne
DATE OF HEARING:	28 February 2024
DATE OF JUDGMENT:	25 June 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 140
JUDGMENT APPEALED FROM:	[2023] VSC 396 (Matthews J)

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REAL PROPERTY – Restrictive covenants – Application for leave to appeal – Where respondent applied for discharge or modification of covenants – Where judge discharged covenants under s 84(1)(c) of the Property Law Act 1958 – Whether judge erred in assessment of substantial injury to applicants – No error in consideration of injury with respect to intended benefits of restrictions – Whether judge erred in identification of restrictions’ purpose – No error shown – Whether judge erred in having regard to other restrictive covenants – Reference to other covenants in aid of assessment of substantial injury and not construing covenants – Leave to appeal granted – Appeal dismissed.

Property Law Act 1958, s 84.

Deguisa v Lynn (2020) 268 CLR 638; Greenwood v Burrows (1992) V Conv R 54-444; Heaton v Loblay (1959) SR (NSW) 332; Jeshing Property Management Pty Ltd v Yang [2023] VSCA 185; Jiang v Monaygon [2017] VSC 591; Quadramain Pty Ltd v Sevastapol Investments Pty Ltd (1976) 133 CLR 390; Randell v Uhl [2019] VSC 668; Re Cook [1964] VR 808; Re Robinson [1972] VR 278; Re Stani (Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976); Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528, considered.

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Counsel
Applicants:		Mr SR Horgan KC with Mr BJ Murphy
Respondent:		Mr MR Scott KC with Mr MD Townsend
Solicitors
Applicants:	Slocombe Brand Lawyers
Respondent:	Davis Advisory

NIALL JA
RICHARDS AJA
J FORREST AJA:

Introduction

The respondent applied for the discharge or modification of four restrictive covenants burdening part of the land known as 90 Refinery Road, Corio, Victoria, more particularly described in Certificate of Title Volume 8866 Folio 943 (‘Land’). The covenants are single dwelling covenants and prevent any building being erected on the Land other than a dwelling house, school, church or hall and outbuildings thereto, prevent any trade or business being carried out on the Land, and prevent the excavation of the Land other than as part of the construction of a building.
The respondent intends to construct a service station on the Land that will dispense hydrogen, gasoline and diesel, and which will offer fast charging stations for battery electric vehicles. Unless modified or discharged, the covenants will prevent the respondent from doing so.
The applicants opposed the respondent’s application for discharge or modification of the covenants. The applicants are the registered proprietors of the land at 452-458 Princes Highway, Corio, Victoria (‘the applicants’ land’) on…

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: [2024] VSCA 140
Decision Date: 25 June 2024

CaseChat Overview and Summary

In the matter of Sumervale Pty Ltd versus Viva Energy Refining Pty Ltd, the dispute revolved around the application for discharge or modification of restrictive covenants impacting property in Melbourne. The case was heard in the Court of Appeal of the Supreme Court of Victoria. The applicants, Sumervale, sought to challenge the decision of the trial judge who had discharged restrictive covenants under section 84(1)(c) of the Property Law Act 1958. The trial judge's ruling allowed the respondent, Viva Energy, to carry out its operations on the property without the constraints of the covenants.

The central legal issues before the court were whether the judge had erred in his assessment of substantial injury to the applicants and if there was a misidentification of the purpose behind the restrictive covenants. Additionally, the court had to determine if the judge correctly considered other existing restrictive covenants in his evaluation of the substantial injury and the intended benefits of the restrictions. The applicants argued that the trial judge misapplied the law by not properly assessing the impact of the covenants' discharge on the intended benefits and the overall purpose of the restrictions.

The court of appeal found that there was no error in the trial judge's assessment of the substantial injury to the applicants with respect to the intended benefits of the restrictions. It was determined that the judge correctly identified the purpose of the restrictive covenants. Furthermore, the court held that the reference to other restrictive covenants was used to aid in the evaluation of substantial injury and was not an attempt to construe the covenants. Consequently, the appeal was dismissed, but leave to appeal was granted to the High Court.

Orders