Xu v Natarelli

The matter of Xu v Natarelli was heard by the Supreme Court of Victoria, where the dispute centred around a restrictive covenant affecting certain properties. The first plaintiff, Xu, sought to modify a restrictive covenant that limited the use of their property, while the defendants, including Natarelli, opposed the modification. The crux of the case was whether the fifth defendant, who had acquired their property after the original covenant was established, had the benefit of the covenant and whether the covenant was part of a broader development scheme that benefitted all lots within the plan of subdivision.

The legal issues revolved around the applicability of the restrictive covenant to the fifth defendant’s property, which was transferred from the parent title after the covenant was made. The court needed to determine if the benefit of the covenant could attach to land not owned by the transferor at the time of the covenant. Additionally, the court had to consider whether the proposed modification of the covenant would substantially injure those entitled to its benefit.

The court examined the provisions of the Property Law Act 1958 and the Planning and Environment Act 1987, alongside relevant case law such as Re Mack and the Conveyancing Act, Re Dennerstein, Fitt v Luxury Developments Pty Ltd, Doyle v Phillips, and Vrakas v Mills. The court concluded that the covenant was part of a broader development scheme and therefore benefited all lots in the plan of subdivision, including the fifth defendant’s property. Furthermore, the court found that the proposed modification would not substantially injure those entitled to the benefit of the covenant, based on precedents such as Vrakas v Registrar of Titles and Jiang v Monaygon Pty Ltd.

In light of these findings, the court ruled in favour of the plaintiffs and granted the application to modify the restrictive covenant. The final orders of the court reflected this decision, allowing the modification to proceed while ensuring that the interests of all parties affected by the covenant were adequately protected.