IN THE SUPREME COURT OF VICTORIA AT MELBOURNECOMMON LAW DIVISION

No. SCI 2016 03948

IN THE MATTER section 84(1)(c) of the Property Law Act 1958 (Act)

- and -

IN THE MATTER of an application for the modification of the restrictive covenant contained in Instrument of Transfer 786906 (Covenant) recorded in the Register Book at the Office of Titles affecting the land at 923 Dandenong Road, Malvern East, being the land described in Certificate of Title Volume 3927 Folio 373,

- wherein -

MARTIN JOHN AMBRENS

is Plaintiff

OUTLINE OF ARGUMENT

CONTENTS

CONTENTS........................................................................................................................................1

APPLICATION...................................................................................................................................2ORIGINATING MOTION..................................................................................................................2

EVIDENCE.........................................................................................................................................2COVENANT CREATION..................................................................................................................3

Beneficiaries..............................................................................................................................3OBJECTIONS.....................................................................................................................................4

DEVELOPMENT................................................................................................................................4SUBMISSIONS IN SUPPORT OF THE MODIFICATION..............................................................5

There is a precedent for the modification of covenants in the neighbourhood.........................5C207 Amendment.....................................................................................................................8Beneficiaries impacted by the Application are limited...........................................................10Limited if any traffic impacts..................................................................................................10Impact on property value is of questionable relevance...........................................................10

CONCLUSION..................................................................................................................................11

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APPLICATION

1. The Plaintiff has applied to the Court to remove, or in the alternative, modify the Covenant (Application) which burdens the land known as 923 Dandenong Road, Malvern East; or more particularly described as

a) Lot 1 on Title Plan 431391P (formally known as part lot 19 on Plan of Subdivision 55380 (Plan of Subdivision); and

b) contained in Certificate of Title Volume 3927 Folio 373—

(Land).

ORIGINATING MOTION

2. The Application was commenced by an Originating Motion dated 8 October 2016 which seeks the following relief:

1. An order pursuant to Section 84(1) of the Property Law Act 1958 that the said restrictive covenant affecting the land owned by the Plaintiff be discharged from the said certificate of title or alternatively modified to allow the construction of one residential building on the lot.

EVIDENCE

3. The Plaintiff relies on the following documents to support the Application:

a) Affidavit of Robert Easton dated 1 December 2016 ;

1) Exhibit RWE-1 is the Town Planning Report, by Easton Consulting dated October 2016 (Planning Report); and

b) Affidavit of Myles Patrick Watson, dated 6 December 2016 ; and

1) Exhibit MPW-1 is a copy of a letter from the City of Stonnington to the Plaintiff, dated 24 October 2016.

c) Second Affidavit of Myles Patrick Watson , dated 28 April 2017;

1) Exhibit MPW-2 is a photograph of the Notice of Application affixed to the Land;

2) Exhibit MPW-3 is a photograph of the Notice of Application affixed to the Land prior to the removal of the notice;

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3) Exhibit MPW-4 is a copy of a letter from Adam Wilson, objecting to the Application, dated 13 April 2017, and a letter from MPW Lawyers to Adam Wilson providing all relevant documentation, dated 19 April 2017; and

4) Exhibit MPW-5 is a copy of the City of Stonnington Council meeting agenda regarding Planning Scheme Amendment C207, dated 20 February 2017.

COVENANT CREATION

4. The Covenant was created when the Land was transferred from Certificate of Title Volume 3211 Folio 044 (Parent Title) by Instrument of Transfer No. 786906 on or about 7 October 1915. The Covenant provides:

…and the said Letitia Nicholson doth hereby for herself, her heirs executors, administrators and transferees covenant with the said Samuel John Graham, his heirs executors administrators and transferees registered proprietor for the time being of the land now comprised in the said Certificate of Title and every part thereof) [sic] that not more than one detached house or two semi-detached houses shall be erected on the land hereby transferred and that not less than the sum of Five hundred pounds shall be expended in the erection of a detached house and not less than the sum of Six hundred and fifty pounds shall be expended in the erection of two semi-detached houses nor shall any such house or houses be used for any other purpose than a dwelling house or houses…

Beneficiaries

5. In accordance with the wording of the Covenant, the benefit is conferred upon all the land remaining untransferred in the Parent Title, as at 7 October 1915.

6. These benefiting lots (Beneficiaries) are shown, highlighted in green, on page 10 of the Planning Report—

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OBJECTIONS

7. By way of a letter dated 13 April 2017, an objection to the Application was received by MPW Lawyers, solicitors for the Plaintiff, from Adam Wilson of Unit 12, 919 Dandenong Road, which included the following:

… I am writing to advise you that I oppose either the discharge or modification of the covenant at 923 Dandenong Rd, Malvern East as I believe this will reduced the value of my proper considerably…

DEVELOPMENT

8. As explained by Robert Easton, the Plaintiff intends to remove the Covenant, allowing development by a future purchaser:

7.1 The plaintiff’s intention is to remove the Covenant so that a future purchaser may develop the subject land in accordance with current

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planning controls. As such no detailed plans of the proposal are yet available. However the explicit planning controls applying to the subject land and the nature of other developments in the neighbourhood tend to lock in a type of development feasible on the subject land.1

SUBMISSIONS IN SUPPORT OF THE MODIFICATION

9. The Application is made pursuant to section 84(1)(c) of the Act which provides:

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—

…

(c) that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction…

10. The test for an application under section 84(1)(c) of the Act is whether the discharge or modification of the restriction would substantially injure a person entitled to the benefit.

11. Substantial injury amounts to injury that is not ‘unsubstantial, and must be real not a fanciful detriment’2.

There is a precedent for the modification of covenants in the neighbourhood

12. The land now known as 915 Dandenong Road, being lot 17 and east part of lot 16 on the Plan of Subdivision (shown in blue, below), was burdened by two restrictive covenants contained in:

a) Instrument of Transfer No. 765824; and

b) Instrument of Transfer No. 683959.

1 Planning Report by Robert Easton, dated October 2016, p11 at [7.1].2 Vrakas v Registrar of Titles [2008] VSC 281 at [36].

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13. Instrument of Transfer No. 765824 provided:

… not more than one detached house or two semi-detached houses shall be erected on the land here by transferred (missing) less than the sum of Five hundred pounds shall be (missing) erection of a detached house and not less than (missing) and fifty pounds shall be expended in (missing) detached houses nor shall any such house or (missing) purpose than a dwelling house (missing)…

14. Instrument of Transfer No. 683959 provided:

… not more than one house shall be erected on the land here by transferred and that not less than the sum of Five hundred pounds shall be expended in the erection thereof nor shall any such house be used for any other purpose than a dwelling house…

15. Both Instruments of Transfer No. 765824 and 683959 were discharged in 1972.3

16. The land now known as 1-3 Burke Road (shown in purple, below), being lots 21 and 22 on the Plan of Subdivision, was burdened by two restrictive covenants contained in:

a) Instrument of Transfer No. 836184; and

3 Planning Report by Robert Easton, dated October 2016, p 27 at [13.11].

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b) Instrument of Transfer No. 654468.

17. Both Instrument of Transfer No. 836184 and 654468, which required that “not more than one house” be built on the lots, were modified in 1993 to allow the construction of a total of eight dwellings.4

18. The land now known as 11 and 13 Burke Road (shown in yellow, below), being Lot 27 on the Plan of Subdivision, was burdened by a restrictive covenant contained in Instrument of Transfer No. 729803. This transfer limited development on the land to “not more than one house”.

4 Planning Report by Robert Easton, dated October 2016, p30 at [13.14].

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19. Despite Instrument of Transfer No. 729803 not being formally modified, 11 and 13 Burke Road was subdivided in 1990 and is now developed with two dwellings.5

20. By reason of these changes, it is submitted that there is already an established precedent for the modification or discharge of similar covenants in the neighbourhood.

C207 Amendment

21. In addition, the City of Stonnington (Council) has proposed an amendment to clause 52.02 of the Stonnington Planning Scheme known as Amendment C207. The purpose of Amendment C207 was:

… to amend the Schedule to Clause 52.02 (Easements, Restrictions and Reserves) of the Stonnington Planning Scheme to provide for the removal of the two restrictive covenants. The restrictive covenants are contained in Instrument of Transfer No. 666618 as it applies to 909 and 911 Dandenong Road, Malvern East and Instrument of Transfer No. 762426 at is applies to 913 Dandenong Road, Malvern East.6

22. The Land is a beneficiary of the covenants affecting 909, 911 and 913 Dandenong Road (C207 Lots). The Land (shown in green) and the C207 Lots (shown in orange) are highlighted in the map below—

5 Planning Report by Robert Easton, dated October 2016, p31 at [13.16].6 Letter from City of Stonnington to M J Ambrens, dated 24 October 2016.

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23. Both the Land and the C207 Lots share frontages to Dandenong Road.

24. Amendment C207 is intended to allow the nearby lots to achieve the strategic direction for the area as set out by the Council:

The existence of the two restrictive covenants is at odds with the broad strategic directions contained within the Stonnington Planning Scheme regarding density and development of this area.

The land is identified as a substantial change area as described in the Strategic Framework Plan. This Plan forms part of Clause 21.03 (Vision) of the Stonnington Planning Scheme, and provides that the land is suitable for accommodating medium and higher density development.

Furthermore, the land at 909, 911 and 913 Dandenong Road, Malvern East is in the Residential Growth Zone (RGZ1). The purpose of the Residential Growth Zone is to provide housing at increased densities in buildings up to and including four storeys.

It is considered appropriate to remove the restrictive covenants burdening the land as they limit development of these sites in a manner, which is contrary to the purpose of the Residential Growth Zone, and ultimately the objectives contained within the State and Local Planning Policy Frameworks of the Stonnington Planning Scheme.7

Beneficiaries impacted by the Application are limited

25. While abutted to the north and south by benefitting lots, the Land is otherwise relatively distant to other Beneficiaries of the Covenant.

26. Any injury sustained by the Beneficiaries due to the removal or modification of the Covenant will likely be limited to the lots directly to the north and south of the Land.

27. 919 Dandenong Road, being to the immediate north of the Land, was not subject to a covenant and has now been developed as three level, 15 unit apartment building.8

28. The only objection to the Application is from an owner of this apartment block.

29. 925 Dandenong Road, which abuts the southern boundary of the Land, is burdened by a covenant contained in Instrument of Transfer 786905 in similar terms to the Covenant, and is developed as what appears to a be a single residential building.9 However, it is understood that the building is presently used as a chiropractic clinic.

30. No objection to the Application has been received from 925 Dandenong Road.

7 Planning Scheme Amendment C207, Removal of Two Restrictive Covenants- Frequently Asked Questions sheet. 8 Planning Report by Robert Easton, dated October 2016, p28 at [13.12].9 Planning Report by Robert Easton, dated October 2016, p28 at [13.13].

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Limited if any traffic impacts

31. As has been made clear in the evidence of Robert Easton, the Land fronts on to Dandenong Road.

32. Dandenong Road is now a major arterial road spanning eight lanes, and carrying large volumes of traffic.

33. Further, the Land is contained within a border of Waverley Road to the north, and Burke Road to the east. These roads are also substantial thoroughfares.

34. By reason of these matters, any additional dwellings constructed upon the Land as a result of an approval of the Application is unlikely to have any noticeable impact on, or cause any injury to, the Beneficiaries.

Impact on property value is of questionable relevance

35. The only objection to the Application received by the Plaintiff came Adam Wilson of Unit 12, 919 Dandenong Road. Mr Wilson’s sole basis for objection was the potential loss of value to his property.

36. However, Myers J in Heaton v Loblay10 concluded that where a covenant does not intend to protect the value of a property, any depreciation in property value as a result of the modification or discharge of the covenant should not be relevant:

… Expert evidence has been tendered on behalf of the defendants to prove that the modification would not depreciate the value of the plaintiff’s property. I do not pause to consider that point because loss of value is not necessarily a decisive factor and where, as in this case, the covenant was not exacted to preserve the value of the covenanter’s land but for another and different purpose, value is not a factor at all.11

37. This position was supported by Gillard J in Re Cook [1964] VR 808:

…It seems to me that in order to succeed under paragraph (c) the applicant cannot establish his case by merely proving that there will be no appreciable injury or depreciation in value of the property to which the covenant is annexed: see Re Parimax (S.A) Pty Ltd [1956] SR (NSW) 130. It if were proved by evidence that the purpose of the covenant was not to preserve the value of the property, proof of value may even become irrelevant: see Heaton v Loblay (1960) 77 WN (NSW) 140 at 142.12

38. Certainly no evidence has been produced in support of the objector’s assertion.

10 (1960) 60 SR (NSW) 332.11 Heaton v Loblay (1960) 60 SR (NSW) 332 at 336 as per Myers J.12 Re Cook [1964] VR 808 at 810.

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CONCLUSION

39. In all the circumstances, it is submitted that the Plaintiff has proved that there will not substantial injury from the proposed discharge of the covenant or its modification as proposed.

Matthew TownsendOwen Dixon Chambers

Instructed byMPW Lawyers

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