LAW INSTITUTE OF VICTORIA - SPECIALIST FORUM RESTRICTIVE COVENANT CASES IN VCAT (THE LAST TWO YEARS) RICHARD HORSFALL Senior Member, Planning and

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1 LAW INSTITUTE OF VICTORIA - SPECIALIST FORUM RESTRICTIVE COVENANT CASES IN VCAT (THE LAST TWO YEARS) RICHARD HORSFALL Senior Member, Planning and Environment List, VCAT Including a contribution by PATRICK DOYLE, Solicitor, of Maddocks 2 March 2005 INTRODUCTION 1. This paper reviews the 2003/4 cases in VCAT s Planning and Environment List about restrictive covenants. 2. Most importantly I acknowledge the contributions of my VCAT colleagues and the generous assistance of Patrick Doyle of Maddocks, known for his intense interest in the subject, who has assisted me in reviewing the list of cases and contributed the section on Digging and Swimming Pool Excavation. 3. My searches of the Tribunal s database and Austlii showed about 60 restrictive covenant cases. I may have missed some, but I think we have a reasonably complete picture. RELEVANT LEGISLATION 4. Relevant legislative provisions are: Planning and Environment Act 1987 S 3 definition of registered restrictive covenant; S 61(4); S 60(2), (4), (5), (6) & (7); S62 (1). Subdivision Act 1989 S 3 definition of restriction. PROCEDURE 5. Cases involving restrictive covenants come to VCAT in a number of ways: Applications for review of Council decisions to refuse or grant or failing to decide a permit application to removal or vary a covenant where either SS -60(2) or 60(5) is in issue; Applications for review of Council decisions to refuse or grant or failing to decide a permit applications for use or development where the issue arises under S 61(4) whether the grant of the permit would authorise anything which would result in a breach of a covenant; Applications for declarations under Section 149B as to the effect and meaning of a covenant. 6. VCAT should not hear the merits of such an application, unless notice of the permit application or of the application to VCAT for a declaration has

2 been given to the owners of the land benefiting from the covenant (the dominant tenements) as their rights under the covenant may be affected by the decision. They should have the opportunity to object to any permit application or to apply to VCT to be joined as a party and be heard in a declaration application. See Vogele v Darebin City Council [2004] VCAT 534 (23/5/2004). 7. An interesting decision is Hill v Campaspe SC [2004] VCAT 1456 (26/7/2004) which related to S 47(2), which provides that the requirements to give notice of permit applications in SS 52 & 55 do not apply to an application for a permit to remove a restriction over land if the land has been used or developed for more than 2 years contrary to the restriction. Deputy President Gibson held this provision did not apply to an application to remove the whole of a covenant where the noncompliance was as to part only of the covenant s provisions, and that acquiescence in a partial breach does not constitute acquiescence for the whole of the covenant. WHAT IS A RESTRICTIVE COVENANT? 8. The 2003/4 cases have confirmed that a S 173 agreement and an easement are not registered restrictive covenants. For S 173 agreements the relevant decisions are Van Der Hayden v Mansfield SC [2003] VCAT 102 (22/1/2003) and Plentie v Banyule CC [2003] VCAT 750 (26/6/2003), and for easements Focused Vision v Nillumbik SC [2003] VCAT 1393 (7/7/2003). 9. The S 173 agreement cases, whilst complex, essentially distinguish the S 173 agreements from restrictions as defined in the Subdivision Act, because they are registered under the Planning and Environment Act, not under the Transfer of Land Act as required by the definition of restrictions. VARIATION AND REMOVAL OF COVENANTS Numbers and trends 10. This is the main topic of this paper. 11. I found /4 VCAT decisions on applications to vary or remove a covenant. 13 were granted and 2 refused. With one exception, this represents a more practical and objective interpretation of the relevant provisions including what is perceived detriment in S 60(5)(a) in contrast with the earlier view expressed in cases such as Ambrose Holdings PL v Boroondara CC [1999] VCAT 185 (30/6/1999) where the Tribunal found the detriment to be any relaxation of the covenant s restriction likely to lead to applications of a similar kind, and the erosion of its benefit resulting in a detrimental change to the whole subdivision.. The 2003/4 cases tend to follow Deputy President Bruce in Ingberg v Bayside CC [2000] VCAT 2407 (30/11/2000) 2

3 12. Also the decisions are now much shorter, a most desirable benefit reflecting a more accepted position of the relevant principles. 13. This paper does not cover the removal of covenants by planning scheme amendment to which different tests apply. 14. The cases all deal with pre-25 June 1991 covenants, so S 60(2) has not been in issue. The focus is SS 60(5) and 61(4) which read: S 60(5) (5) The responsible authority must not grant a permit which allows the removal or variation of a restriction referred to in sub-section (4) unless it is satisfied that (a) (b) S 61(4) the owner of any land benefited by the restriction (other than an owner who, before or after the making of the application for the permit but not more than three months before its making, has consented in writing to the grant of the permit) will be unlikely to suffer any detriment of any kind (including any perceived detriment) as a consequence of the removal or variation of the restriction; and if that owner has objected to the grant of the permit, the objection is vexatious or not made in good faith. (4) If the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, the responsible authority must refuse to grant the permit unless a permit has been issued, or a decision made to grant a permit, to allow the removal or variation of the covenant. Perceived Detriment 15. It is useful to refer to Ingberg v Bayside CC [2000] VCAT 2407 (30/11/2000) in which the question whether the owner of the land benefited will be unlikely to suffer any detriment of any kind (including any perceived detriment) was treated objectively, and the Deputy President found that construction of 2 dwellings was unlikely to have a detrimental effect on a beneficiary who lived some distance away in a different street. 16. In contrast, Mrs Rickards refused a variation of a single dwelling covenant to allow 4 double storey dwellings in Russo v Moonee Valley CC [2004] VCAT 586 (5/4/2003) finding there would be a dramatic change in the aesthetic nature of the area likely to have an impact on the amenity of the beneficiaries, but her approach was the same. 17. She relied at [14] on the statement of principles in McFarlane v Greater Dandenong CC [2002] VCAT 469 (26/6/2002) which have been consistently followed: 3

4 1. It is for the Tribunal to determine whether it is satisfied on the balance of probabilities that any covenant beneficiary "will be unlikely to suffer any detriment of any kind if the variation is permitted." In other words it is not a question of whether the Tribunal is satisfied there will be detriment: the Tribunal must be affirmatively satisfied that there will be none. 2. Compliance with planning controls does not, of itself, and without more, establish that a covenant beneficiary will be unlikely to suffer any detriment of any kind. Consideration of a proposal from a planning perspective often requires a balancing of competing interests. There is no such balancing exercise involved in the consideration of the issue which arises under paragraph (a). The nature of the enquiry is fundamentally different. 3. The mere assertion of the existence of a detriment is not sufficient to demonstrate its existence. On the other hand, loss of amenity will constitute a detriment, and in this regard amenity includes "an appeal to aesthetic judgement, which is difficult to measure, however the notion of 'perceived detriment' specifically contemplates that this consideration is relevant to the enquiry. 4. The determination must be made on the evidence before the Tribunal "including the appeal site and its environs". 5. It is not necessary for an affected person to assert detriment. This is so for two reasons: first, because the Tribunal must be affirmatively satisfied of a negative, namely that there will probably be no detriment of any kind; secondly, the Tribunal is entitled to form its own views from the evidence. 18. In Northern Exposure v Darebin CC [2003] VCAT 1839 (9/12/2003) Mrs Rickards considered a complicated situation of one beneficiary living in another street some distance away from the site objecting to a variation allowing a second dwelling at the rear and where second and third dwellings had been allowed on other sites closer to the objector. It was not a pristine single dwelling estate. She found there was no detriment in the sense that the objector would not suffer any amenity impacts or any aesthetic detriment and his claim was an assertion only. This decision moves away from the position taken in Ambrose Holdings PL v Boroondara CC [1999] VCAT 185 (30 June 1999). Examples of Variations allowed 19. Single dwelling covenants were varied to allow two or more new dwellings or a second dwelling in the following cases: Beaumont v Bayside CC [2003] VCAT 1152 (2/9/2003) - where the area benefited had many multi dwelling developments; Castles & Maney v Bayside CC [2004] VCAT 864 (11/5/2004); Schock v Yarra Ranges SC [2003] VCAT 1733 (24/11/2003); Northern Exposure v Darebin CC [2003] VCAT 1839 (9/12/2003); Meates v Maroondah CC [2004] VCAT 47 (28/1/2004) - objectors living some distance away and claiming loss of trees and bird life; Pupillo v Moreland CC [2004] VCAT 529 (22/3/2004) no beneficiaries objecting; 4

5 Cassar v Brimbank CC [2003] VCAT 1947 (22/12/2003) concerns by objector, who was not a beneficiary, as to traffic noise from second dwelling and loss of value not accepted as evidence of detriment; Hogan v Casey CC [2004] VCAT 1614 (2/8/2004) although no development proposal for the second dwelling had been made; Marras v Stonnington CC [2004] VCAT 110 (29/1/2004) no beneficiaries objected, many multi dwelling developments in original subdivision; Bingham v Wyndham CC [2004] VCAT 875 (11/5/2004) objection from only beneficiary withdrawn; Ventura v Darebin CC [2004] VCAT 860 (6/5/2004) objectors were not beneficiaries; Kontogioris v Darebin CC [2004] VCAT 2391 (29/11/2004) no objectors who were beneficiaries lodged Statement of Grounds with VCAT, objector/beneficiary properties located some distance away from site in different streets. 20. Brick/Brick Veneer/Single Storey construction covenant Morgan v Monash CC [2004] VCAT 2598 (2/6/2004) - brick/brick veneer construction/single storey covenant varied to allow two storey and brick or rendered brick and blue board external wall construction. Only a small portion at rear of the objectors land had the benefit of the covenant, it was heavily vegetated, and the covenant did not prevent two storey forms consisting of a single storey with an under croft garage. The objection was found to be vexatious as having no merit. 21. Examples of Variations refused in Russo v Moonee Valley CC [2003] VCAT 586 (5/4/2003) the Member found that variation of a single dwelling covenant to allow 4 double storey dwellings would cause a dramatic change in the aesthetic nature of the area likely to have an impact on the amenity of the beneficiaries; In Thompson v Greater Bendigo C [2004] VCAT 1072 (2/6/2004) where there was a covenant prohibiting the building of more than one private dwelling house, the Tribunal refused to remove the covenant in an application for 2 lot subdivision. The Member acknowledged the detriment may be perceived and not real. She agreed it was not possible to assess the likely impacts on land likely to be benefited by the covenant. She considered that the objector genuinely holds these views and was not acting vexatiously or not in good faith. My comment is that this decision may be inconsistent with the general trend. See the comments on S 60(5) (b) and subdivision below. 5

6 S 60(5) (b) 0bjection must not be vexatious or not made in good faith 22. In all the applications (except for Thompson v Greater Bendigo CC [2004] VCAT /6/2004)) there has been no change in the application of the accepted principle that in S 60(5) (b) vexatious means groundless or having no merit without regard to the objector s attitude, intentions or honesty. See Ingberg v Bayside CC [2000] VCAT 2407 (30/11/2000) at [104] and Castles and Maney v Bayside CC [2004] VCAT 864 (11/5/2004) [53] in which the decision of Attorney General of NSW v Wentworth (1988) 14 NSWLR 481 as applied in Attorney General of Victoria v Kay [1999] VSC 30 and Attorney General of Victoria v Lindsay (unreported 16 July 1998) was followed. For an example of other conduct see Schock v Yarra Ranges [2003] VCAT 1733 (23/11/2003). 23. The test of vexatious stated in Wentworth by Roden J is: 1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought. 2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise. 3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless An interesting recent case is Morgan v Monash CC [2004] VCAT 2598 (4/11/2004) where a brick/brick veneer construction/single storey covenant was varied to allow two storey and brick or rendered brick and blue board external wall construction. Only a small portion at the rear of the beneficiary/objectors land had the benefit of covenant and was heavily vegetated. The Member found the covenant did not prevent a single storey with under croft garage, so double storey forms were not prohibited. She found no detriment and that the objection was vexatious as having no merit. Beneficiary not objecting to variation after notice. 25. Owners of land who have not objected to the variation or removal after being given notice of the permit application or the VCAT proceedings generally are treated as not suffering any detriment as a result of the variation or removal, although VCAT must still be satisfied that no detriment is likely. See Schock v Yarra Ranges [2003] VCAT 1733 (24/11/2003), Ventura v Darebin CC [2004] VCAT 860 (16/5/2004) [17]. Pupillo v Moreland CC [2004] VCAT 529 (22/3/2004), Cassar v Brimbank CC [2003] VCAT 1947 (22/12/2003), Marras v Stonnington CC [2004] VCAT 110 (29/1/2004), Bingham v Wyndham CC [2004] VCAT 875 (11/5/2004). 26. In Kontogioris v Darebin CC [2004] VCAT 2391 (29/11/2004) there were objectors to the permit application who were beneficiaries, but none lodged Statement of Grounds with VCAT or appeared at the hearing. 6

7 Their properties were located some distance away from site in different streets. The Tribunal (Mrs Rickards) followed McFarlane v Greater Dandenong CC [2002] VCAT 469 (26/6/2002) and commented at [7]: In McFarlane v Greater Dandenong City Council and Ors (2002) VCAT 269 the Tribunal indicated that it is not necessary for a benefiting owner to be before the Tribunal or to even object, rather it is a matter for the Tribunal to determine whether it is satisfied on the balance of probabilities that any covenant beneficiary will be unlikely to suffer detriment of any kind if the variation is permitted. In other words it is not a question of whether the Tribunal is satisfied that there will be no detriment: the Tribunal must be affirmatively satisfied that there will be none. 27. She made an objective assessment of aesthetic and amenity impacts on beneficiaries and found none and said at [11] Being aware there is an additional dwelling on a lot does not mean that a detriment exists. Detriment must flow from a breach of the covenant 28. The detriment claimed must relate to the operation of the covenant. In Dukovski v Banyule CC [2003] VCAT 190 (13/2/2003) the detriment claimed was increased traffic, loss of view and neighbourhood character, but was held not to flow from a variation of a covenant which regulated only the frontage of dwellings, i.e., the way they face. Likewise in Summerby v Hume CC [2003] VCAT 1968 (22/12/2003) the construction of a second dwelling was held not to be a relevant detriment under a covenant regulating building materials and minimum floor area. In Edkins v Mornington Peninsula SC (2003P1621 7/10/2003) the covenant required a dwelling with a minimum cost and was held not to prevent a second dwelling or subdivision. See also the comments on subdivision below. Consent of original transferor or beneficiary 29. Covenants often contain provision for the original subdivider or developer to consent to the variation or development which might otherwise be in breach. Where this consent is obtained it has been held there is no breach. This was the case in CIV Homes Pty Ltd v Banyule CC [2003] VCAT 1032 (19/8/2003) where the owners of the benefited land consented in writing, in Campaspe SC v Harland [2004] VCAT 1836 (21/9/2004), where the transferor consented to a subdivision where there was a single dwelling and no subdivision covenant, and in Nguyen v Brimbank CC [2004] VCAT 1858 (20/9/2004), where the developer named in the covenant as entitled to give consent did so. No land benefited or no beneficiaries 30. The method of identifying the land benefited by the covenant is well established. The land is specifically identified by a title reference in the transfer or instrument creating the covenant. More commonly the covenants are created in transfers out of a subdivision by the original 7

8 developer and are expressed to benefit the land remaining untransfered in the parent title. In this case only the lots transferred after the transfer of the relevant lot have the benefit, those transferred before do not. Title searches need to be made to identify the dates. In a large subdivision this can be a difficult and costly exercise. I found no case dealing with building scheme covenants. 31. S 61(5) has been held not to apply if there is no land benefited and thus no owners of any land benefited by the covenant. McEntee v Frankston CC [2003] VCAT 80 (20/1/2003) referred to an earlier covenant removal where the land was the last lot transferred out of the parent title, and in Arifoglou v Stonnington CC [2003] VCAT 1461 (16/10/2003) the covenant was held not enforceable as a restrictive covenant as it did not identify any land benefited, e.g., by reference to the land remaining untransfered in the parent title. DIGGING AND SWIMMING POOL EXCAVATION - TO DIG OR NOT TO DIG 32. This section is a paper prepared by Patrick Doyle of Maddocks, Lawyers. 33. The Tribunal's Planning and Environment List continues to grapple with the difficult questions which arise in the context of restrictive covenant interpretation 34. In recent times, one kind of covenant has been the subject of much discussion and dispute. I refer to the 'no quarrying' covenants, which are common across many areas of metropolitan Melbourne, as well as some regional areas. 35. Most of these covenants were imposed by developers and subdividers of land in the 1920s and 1930s, and generally read along the following lines (or similar): no quarrying operations shall be carried out on the said land hereby transferred nor shall any marl sand stone or gravel be dug or removed or allowed to be dug or removed from the said lot.. excepting excavating for the foundation of any buildings to be erected or placed thereon or for use in such building Earlier forms of this kind of covenant do not always include the 'exception', which allows excavation for the foundations of buildings In Isles v Glen Eira CC (2003) 14 VPR 73 ([2003] VCAT 2039 (11 June 2003) the Tribunal employed a literal interpretation of a typical 'antiquarrying' covenant. This case concerned an application for a planning permit for an in-ground swimming pool, pursuant to a 'buildings and works' requirement, under a heritage overlay. 38. The Tribunal found that 'the covenant appears to... prohibit digging and removal... of soil', and consequently refused to grant the permit that was sought. The following reasoning appears at page 76 of that decision: I am not sure that the 'purposive approach' to interpret wording in light of a piece of legislation, is the correct approach in relation to the interpretation of a 8

9 covenant. There could be a number of reasons as to why a covenant was imposed in the form it was imposed, reading into the covenant and interpreting the covenant in the light of the meaning of words used in a current planning context is not necessarily what the imposition of a covenant seeks to achieve. If one is to look at the context of the covenant and the intention of the covenant from its wording, that is taking a literal approach, what is proposed does not amount to quarrying, that is an operation primarily for the purpose of obtaining material - Bishop v Shire of Upper Yarra (1926) VLR 93.. Excavation, digging and removal of marl sand stone or gravel is only for the purpose of installing the in ground swimming pool. To place the swimming pool in the ground it will be necessary to dig and to remove soil to a reasonable depth. The prohibition is on the digging and removal of 'marl sand stone or gravel'... No soil analysis was provided but it appears to be common ground that soil in the area of the subject site would consist, if one was to dig below the level of top soil, of marl, being a soil or earth deposit consisting of clay, sand, stone or gravel. The covenant appears to therefore to prohibit digging and removal not of top soil but of soil found below the level of top soil that would be exposed if excavation of the depth required for an in ground swimming pool occurred. 39. The swimming pool was not considered to come within the meaning of a 'building' under the covenant, and so it was held that excavation or quarrying in order to construct the swimming pool would be contrary to the covenant. 40. In Petroulis v Moreland City Council (unreported decision No. P602/2002 (11 July 2002), the Tribunal again considered the usual form of 'no digging' covenant, in the context of a permit application for an in-ground swimming pool. The Tribunal found that it was not prevented from granting the permit sought, on the basis that the swimming pool was really part of the 'buildings' to be erected on the land, and therefore within the 'exemption' contained in the covenant. 41. Since then, the Tribunal has reconsidered this kind of covenant in a number of cases. The 'purposive' approach, rather than the literal approach, has been preferred in the later cases. 42. In PropDev Pty Ltd v Stonnington City Council [2003] VCAT 1558 (27 October 2003) the Tribunal held at [2], in a brief decision, that a similar covenant did not preclude excavation to facilitate the construction of dwellings on the basis that 'the covenant is directed toward preventing the use of the land for the purpose of quarrying.' 43. D'Amelio v Monash City Council [2004] VCAT 60 (22 January 2004) concerned an application for a residential development which included a basement car park. The covenant in question in that case was one of the stricter 'no quarrying' covenants (in that it did not exempt excavation for the purpose of the foundations of any building). Despite this, the Tribunal found: 9

10 'that this covenant was not intended to prohibit the removal of materials such as earth, clay and marl which were removed solely for the ancillary purpose of constructing a dwelling house.. In my view however, consistent with the principles enunciated by Bongiorno J in Tonks v Tonks objectively considered that was not the intention of the covenant and it does not prohibit the removal of any of the materials referred to therein on an ancillary basis so solely in connection with the construction of a dwelling house or dwelling houses.' 44. The Tribunal's approach in D'Amelio was then followed in Brissac Investments Pty Ltd v Stonnington City Council [2004] VCAT 342 (1 March 2004). In that case the Tribunal considered the more typical 'no quarrying' covenant, and expressed the view that the D'Amelio 'purposive' interpretation represented a 'colloquial and non-technical manner of interpretation'. The Tribunal concluded that this covenant did not prevent the grant of a permit to allow either an underground car park or an in-ground swimming pool, finding that both of these should be considered 'part and parcel' of the use and development of a dwelling house. 45. The reasoning in these decisions is often contradictory. However, it could also be said that most of the results in these cases could be reconciled, by having closer regard to the planning scheme 'triggers' that applied in the each case. 46. I say this on the basis that section 61(4) of the Act prohibits the grant of a planning permit in circumstances where the grant of a permit would 'authorize' anything which would result in a breach of a registered restrictive covenant. I think it essential to be clear about what any given permit will 'authorize', in terms of the planning scheme triggers (rather than what the end result will be). 47. This is because most of the above decisions deal with applications under the Residential 1 Zone, where a permit is required to construct or extend one or more dwellings (in various circumstances). A planning permit is not usually required to dig or excavate land in that zone, and so much of this excavation could possibly have been carried out 'as of right'. If so, such excavation is not necessarily 'authorized' by the permits that were being sought. 48. Isles v Glen Eira City Council, on the other hand, dealt with an application triggered by the more general 'buildings and works' control that applies under a heritage overlay. Unlike under the residential 1 zone controls, there can be no question that planning permits for swimming pools and the like, when granted under heritage overlays, operate to specifically 'authorize' excavation. 49. Putting that view to one side, it seems to me that the Tribunal's approach to these covenants has shifted, from a more traditional, and literal interpretation, to a more 'purposive' interpretation. That is to say, the Tribunal has begun to look behind the words of these covenants, and to 10

11 search for what was the likely intention at the time of the covenants. 50. It is likely that the Tribunal will continue to interpret the 'no quarrying' covenants in a purposive, rather than a literal, way. What is not clear is whether the Tribunal will adopt a similar approach for other common forms of covenant. If so, responsible authorities may be expected to have closer regard to the circumstances surrounding the execution of restrictive covenants, in order to draw conclusions as to how they should be interpreted. Patrick Doyle Post Script 51. In Foodies Pty Ltd v Boroondara CC [2004] VCAT 1628 (19/8/2004) at [24] Senior Member Byard found that excavation for a second dwelling was a not a breach of a covenant which did not contain the exception for excavation for foundations for a dwelling. The Senior Member took a robust view of such covenants analogous to a purposive approach, and held there was no breach as the use of the land was to be for a dwelling and not for quarrying, brick making or extractive industry which were the things against which the covenant is directed. EVIDENCE OF A COVENANT 52. In Australian Child Care Developments v Wyndham CC [2003] VCAT 1501 (17/10/2003) the land had been subdivided but the titles for the individual lots had not yet issued. Council wished to ascertain whether the titles would be subject to a restrictive covenant and made a request for further information requesting the separate titles created by the subdivision and refused to deal with the application until they had issued. The Tribunal decided this was not information and suggested that production of the contract of sale would establish whether the ultimate transfer would or would not contain a covenant. SUBDIVISION 53. It is an accepted principle that subdivision of itself does not cause breach of a covenant relating to construction, frontage, single dwelling, and cost or construction materials. Dukovski v Banyule CC [2003] VCAT 190 (13/2/2003), Hampsons Enterprises v Casey CC (P3125/ /6/2003). See also Weiler v Casey CC [2004] VCAT 470 (20/4/2004) for a similar conclusion on a single dwelling S 173 agreement. 54. A different outcome occurred in Carmrer v Port Phillip CC [2002] VCAT 1319 (23/9/2003) where the covenant prohibited the erection of more than one dwelling house or two semi detached houses. A 2 lot subdivision of an existing building with 5 bed sits was rejected on planning grounds, but no breach of the covenant was found because future development possibly could comply with the covenant. 55. The President in Stevens v Greater Bendigo CC (P219/ /3/2004) made a declaration that a 2 lot subdivision for 2 dwellings was a breach of 11

12 a covenant that the lot shall not be subdivided by Strata subdivision, Cluster subdivision or otherwise. He concluded that the words or otherwise were not restricted by the preceding references to strata or cluster subdivision but the intention of the covenant was to prevent any subdivision. 56. Mr Eccles and I considered a complex situation in Chester v Banyule CC [2003] VCAT 167 (5/2/2003), where the covenant prohibited the erection of and use of the land for (amongst other things) a business establishment, and also the erection of any more than one dwelling house. The proposal was for subdivision into 2 lots and the construction of a car park for 5 vehicles for the business. At the time the house was used as a veterinary clinic and had a residence upstairs which was not occupied in conjunction with the business. The applications were refused. We found the construction of the car park was a use (in contrast to a development) in conjunction with the business and its construction would be a breach, as was the existing business use, because the residence was not a dwelling house with offices. We held the subdivision by itself would not be a breach but that the construction of a dwelling on lot 2 would not overcome the breach of the use covenant in the existing building. 57. A recent development is Deputy President Gibson s decision in Wade v Yarra Ranges SC [2005] VCAT 111 (20/1/2005) where she declined to make a declaration that a 2 lot subdivision for residential purposed breached a single dwelling covenant, directed that the permit issue but imposed a condition that before a statement of compliance could issue the covenant must be removed or varied to allow a single dwelling to be constructed on each lot. In requiring the condition she did not rely on S 61(4) but on the comments of Member Eccles in Chester V Banyule CC, and Member Monk in Carmrer v Port Phillip CC (both cited above) that the decision guidelines in Clause include the existing use and possible future development of the land and nearby land as relevant considerations. This decision allows the subdivision but requires the covenant issue to be dealt with before development in breach can proceed. SUMMARY DISMISSAL 58. Applications have been made to VCAT for summary dismissal under S 75 Victorian Civil and Administrative Tribunal Act 1998 of applications which might involve a breach of a covenant on the ground that the refusal of the application is an obvious result and the application is misconceived and lacking in substance. Despite one decision doing so in Bevilacqua v Port Phillip CC [2002] VCAT 1537 (26/11/2002), a similar application was refused in Cardamone v Darebin CC [2004] VCAT 171 (6/2/2004), in which the Member considered time should be given to allow Supreme Court proceedings for removal to take their course, although caution was expressed that this should not take too long. A related issue arose in Hogan v Casey CC [2004] VCAT 1614 (2/8/2004) where Deputy President Gibson granted an extension of time to extend a planning permit to construct dwellings although no application to remove or vary the 12

13 covenant had been commenced, although no indication on the merits was given. INTERPRETATION 59. There are a number of cases about interpretation of covenants and whether the proposal is a breach of it under s 61(4). In general, the principles of interpretation stated in Gubby v Mornington Peninsula SC [2002] VCAT 1344 (15/11/2002), in particular that each covenant must be interpreted according to its particular wording. 60. Single Dwelling covenants meaning of messuage In Stoops v Frankston CC [2003] VCAT 965 (31/7/2003) and [2004] VCAT 591 (30/3/2004) construction of 4 units was held to breach a covenant prohibiting more than one messuage or dwelling house. Messuage was held to mean one dwelling. In Stahel v Mornington Peninsula SC [2003] VCAT 815 (17/7/2003) construction of 5 detached self contained holiday units breached a covenant for not more than one building and/or shop purposes. Temporary accommodation was treated as residential. In Dukovski v Banyule CC [2003] VCAT 190 (13/2/2003) a covenant regulating frontage did not prevent a second dwelling. The Tribunal in McGinley v Monash CC [2004 VCAT] 1029 (31/5/2004) held that a second dwelling was not prohibited by a covenant in terms not erect or build any building other than a dwelling house in brick or brick veneer following the Supreme Court in Tonks & Anor v Tonks & Anor [2003] VSC 195 (13/6/2003) 61. Use or Development Mr Justice Morris in Panayiotou v Moonee Valley CC [2003] VCAT 1279 (15/9/2003) held that alterations to an existing dwelling and change of its use to a child care centre did not breach a covenant that no building shall at any time hereafter be erected on the land.save one dwelling house, for the reason that the covenant did not regulate the use of the land, but rather how the land was to be developed. A similar form of covenant was held not to prevent the conversion and use of an existing dwelling to a medical centre in Saxena v Manningham CC [2003] VCAT 1387 (10/12/2003). 62. Frontage Prue v South Gippsland SC [2003] VCAT 275 (26/3/2003) considered the meaning of frontage, and favoured the definition in clause 72 of the planning scheme The road alignment at the front of a lot. If a lot abuts two or more roads, the one to which the building, or proposed building, faces. In Shelton Finnis Architects Pty Ltd v Port Phillip CC [2004] VCAT 209 (10/2/2004) it was held that the ordinary dictionary meaning of 13

14 frontage when applied to a covenant requiring a building have a frontage to a particular street, did not prevent it having a frontage to another street. 63. Cladding Steflok Investments Pty Ltd v Greater Bendigo CC [2004] VCAT 699 (19/4/2004) considered that a covenant that no fence shall be constructed using sheet metal cladding colourbond or like material did not prohibit a solid wooden fence. The Tribunal in Denys v Hobsons Bay CC [2004] VCAT 1105 (3/6/2004) agreed that a covenant requiring the main walls of the building to be brick or stone prohibited the upper walls being in painted shadow clad. Biasin v Mornington Peninsula SC [2004] VCAT 1148 (17/6/2004) considered the definition of cladding in a covenant and commented that the covenant extended to prohibit timber weatherboard, but in declaration proceedings as to the interpretation of the same covenant Deputy President Gibson found that the words in their contest only extended to cement sheeting or metal cladding. Neil Wright v Mornington Peninsula SC (P3005/ /3/2005) 64. Height Biasin v Mornington Peninsula SC [2004] VCAT 1148 (17/6/2004) considered a covenant restricting building height and found the words of the covenant set the starting point for the measurement of height to be natural ground level 65. Other Senior Member Byard in Lento v Whittlesea SC [2004] VCAT 2101 (18/10/2004) held that a covenant not to breach any of the provisions of the Design and Development Overlay did not bar a development under the DDO for which a permit is needed. Richard Horsfall 14