Objecting in Court

Disclaimer: What we offer on this page is not legal advice. It is the result of our research of case law on issues relevant to the Waterfront Place covenants case in the Supreme Court of Victoria. Our conclusions may not be correct, and are not a substitute for professional legal advice … but we hope they help people focus on and understand the critical issues.

Please note that the full texts of sections of legislation referred to in this site are provided in the “Legislation” page.

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Focus on the criteria

The application to the Supreme Court of Victoria for removal of covenants [Document] is made under Section 84(1) of the Property Law Act 1958. Your objection needs to address the criteria of that Section of the Act, in particular:

  • S84(1)(a): Whether there has been a change in: “the character of the property or the
    neighbourhood or other circumstances of the case which the Court deems
    material

  • S84(1)(c): Whether “the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction

The applicant’s argument

The applicant has the onus of establishing the matters set out in a limb of s 84(1)(a), or in s 84(1)(c), upon which he or she relies. In relation to s 84(1)(c), this means that the applicant must effectively prove a negative. (Judgment of Kyrou J at 42)

Waterfront Place’s argument is expressed in a report by Urbis submitted to the City of Port Phillip [Report (PDF)].

“This report outlines that the proposal should be supported for the following reasons:”

  • “The covenants are redundant as the Beacon Cove Development has been completed.” (relevant to S84(1)(a) of the Property Law Act 1958)
  • “It will not result in financial loss, loss of amenity, loss arising from change to the character of the neighbourhood or any other material detriment to beneficiaries of the covenants” (relevant to S84(1)(c) of the Property Law Act 1958)
  • “It will allow consideration of a planning approval for a high quality mixed use development.”
  • “It will allow the revitalisation of the foreshore with a proposal for urban renewal at this important strategic site.”

The report asserts (inter alia):

  • Page 12: “The residential beneficiaries which are located 250 metres away on The Crescent are so far removed from the subject site that any increase in scale and activity that might result from the variation or removal of the covenants are unlikely to experience any negative impact on these whatsoever on those properties, let alone any material impact. If anything, the residents of these benefiting properties will ultimately enjoy an improvement to their amenity to the extent that they will be a walkable distance from (contemplated) greatly improved leisure and recreational facilities.
  • Page 13: “The proposed removal or variation of the covenants is unlikely to result in financial loss to any person. Beneficiaries are unlikely to suffer loss of amenity or financial loss from the removal or variation of the covenants due to the distance of beneficiaries from the subject site. There will not be a change in the character of the beneficiaries’ neighbourhood and the proposal is unlikely to result in a loss of land value.
  • Page 13: “The character of the neighbourhood has changed since the covenants were imposed on the subject site.

That argument did not satisfy the Council, who refused the application.

Case Law: Interpreting and applying the criteria

Vrakas & Anor v Registrar of Titles & Ors [2008] VSC 281 (28 July 2008)

The Judgment in this case (part of which is set out below), by Justice Kyrou has been adopted in subsequent cases, and is authoritative on the subject, recognised as such by Associate Justice Randall in Parmurro Nominees Pty Ltd and Ors v Doughty and Anor [2013] VSC 156 (9 April 2013)

Background

Plaintiffs George Vrakas and Kathy Vrakas (represented by P G Nash QC and solicitor John Dimitropoulos) have applied under S84(1) to discharge or modify single dwelling restrictive covenants burdening their land which is located at 54 Riverside Avenue, North Balwyn so that they can construct 5 dwellings on the property.

Defendants, including the Registrar of Titles and benefitted owners of covenants burdening the Plaintiffs’ lane (represented by Mr G Garde QC and
Mr J Samargis and solicitor Best Hooper) oppose the application. These covenants limit the burdened property to a single dwelling.

Judgment: Kyrou J

Section 84 of the PL Act and relevant legal principles

“22 Section 84(1) of the PL Act provides:”

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 … upon being satisfied –

(a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Court deems material the restriction ought to be deemed obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or

(b) …

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

“23 The principles that govern an application to discharge or modify a restrictive covenant under s 84 of the PL Act may be summarised as follows.”

24 Section 84(1)(a) has two limbs. In essence, the first limb is that, due to changes in the character of the property or neighbourhood or other circumstances, the covenant is obsolete, and the second limb is that the covenant’s continued existence would impede the reasonable user of the land without practical benefits to other persons. An applicant need only establish one of these limbs in order to have a right to a remedy under s 84(1)(a), subject to the court’s residual discretion (see below).

25 In relation to the first limb of s 84(1)(a), what is the “neighbourhood” must be determined as at the date of the hearing, rather than the date of the covenant. What is the “neighbourhood” is a question of fact.

“26 A covenant is “obsolete” if it can no longer achieve or fulfil any of its original objects or purposes or has become “futile or useless”. A covenant is not obsolete if it is still capable of fulfilling any of its original purposes, even if only to a diminished extent. The test is whether, as a result of changes in the character of the property or the neighbourhood, or other material circumstances, the restriction is no longer enforceable or has become of no value. If a covenant continues to have any value for the persons entitled to the benefit of it, then it will rarely, if ever, be obsolete. A covenant could be held to be not obsolete even if the purpose for which it was designed had become wholly obsolete, provided that it conferred a continuing benefit on persons by maintaining a restriction on the user of land.”

“27 Strictly speaking, the inquiry is as to whether the restriction of user created by the covenant is obsolete, rather than as to whether the covenant itself is obsolete.”

“28 In relation to the second limb of s 84(1)(a), to establish that a covenant would impede the reasonable user of the land, it must be shown that “the continuance of the unmodified covenants hinders, to a real, sensible degree, the land being reasonably used, having due regard to the situation it occupies, to the surrounding property, and to the purpose of the covenants”. Whether this is so is essentially a question of fact.”

“29 It is not sufficient merely to show that the continued existence of the covenant would impede a particular reasonable use which is proposed by the applicant. The applicant must show that the restriction will impede all reasonable uses.”

“30 “Practical benefits” within the meaning of the second limb of s 84(1)(a) are any real benefits to a person entitled to the benefit of a restrictive covenant and are not limited to the sale value of the land benefited by the covenant.”

“31 It must be established that the covenant is not necessary for any reasonable purpose of the person who is enjoying the benefit of it.”

“32 If a relaxation of the restriction imposed by a covenant would be likely to lead to further applications of a similar nature, resulting in a detrimental change to a whole area, this “precedential” effect may be relevant in determining whether the restriction secures any practical benefits.”

“33 Whether there are any practical benefits to other persons is a question of fact.”

34 In relation to s 84(1)(c), the test for whether a discharge or modification of a covenant would “substantially injure” a person entitled to the benefit of the covenant is similar to that in relation to “practical benefits” in the second limb of s 84(1)(a).

35 Section 84(1)(c) requires a comparison between the benefits initially intended to be conferred and actually conferred by the covenant, and the benefits, if any, which would remain after the covenant has been discharged or modified – if the evidence establishes that the difference between the two (that is, the injury, if any) will not be substantial, the ground in s 84(1)(c) is made out.

36 The injury must not be unsubstantial, and must be real and not a fanciful detriment.

37 It is not enough for the applicant merely to prove that there will be no appreciable injury or depreciation in value of the property to which the covenant is annexed.

“38 A lack of specific plans makes it more difficult for an applicant to show that there will be no substantial injury to persons entitled to the benefit of a covenant.”

“39 The prospect that, if the application for the discharge or modification of a covenant were granted, that might be used to support further applications in a similar vein, may be relevant. Such “precedent value” may, in an appropriate case, of itself be a factor demonstrating that an applicant fails to establish the requirements in s 84(1)(c).”

“40 Whether a person entitled to the benefit of the covenant would be substantially injured within the meaning of s 84(1)(c) is a question of fact.”

41 Town planning principles and considerations are not relevant to the Court’s consideration of whether an applicant has established a ground under s 84(1).

“42 The applicant has the onus of establishing the matters set out in a limb of s 84(1)(a), or in s 84(1)(c), upon which he or she relies. In relation to s 84(1)(c), this means that the applicant must effectively prove a negative.”

43 The absence of objectors to the discharge or modification of a covenant will not, in itself, necessarily satisfy the onus of proof.

44 Each case must be decided on its own facts.

45 Even if the matters set out in a limb of s 84(1)(a), or in s 84(1)(c), are proved by the applicant, the Court has a discretion to refuse the application.

“46 Town planning principles and considerations may be relevant to the exercise of the Court’s residual discretion. “Precedential” issues similar to those discussed above may also be relevant in the exercise of that discretion.”

“47 In Stanhill Pty Ltd v Jackson, Morris J, after considering the ordinary grammatical meaning of s 84(1), the history of the provision and the provision’s policy basis, departed from what he described as the narrow traditional approach to s 84(1) in favour of a more “robust” interpretation of the provision and indicated that, in his view, “some of the restrictions adopted in earlier cases are without justification”. In essence, his Honour held: in relation to the first limb of s 84(1)(a), that “obsolete” should be given its ordinary meaning of “outmoded” or “out of date” (rather than meaning something that is futile or wholly unable to achieve its original purpose); in relation to the second limb of s 84(1)(a), that “the reasonable user of the land” means a user of the land acting reasonably, with what is reasonable to be gleaned from current attitudes and circumstances (including town planning issues), “impede” means to retard, obstruct or hinder (and does not mean “prevent”), and “practical benefits” are actual benefits having substance rather than purely theoretical or trifling benefits; and, in relation to s 84(1)(c), that it must only be shown that any harm caused to a person entitled to the benefit of a covenant would not be of real significance or importance. In the recent decision of Fraser v Di Paolo, Coghlan J referred to, but found it unnecessary to express a settled view about Morris J’s comments.”

“48 In this case, I apply the longstanding principles to the interpretation of s 84(1). I note, however, that had I applied Morris J’s interpretation of s 84(1) (which has much to commend it), the result would have been the same.”

First limb of s 84(1)(a) of the PL Act

“49 Mr Nash QC, who appeared for the plaintiffs, relied on the evidence of Mr d’Oliveyra in submitting that the covenants are obsolete. As I mentioned in paragraph 16 of this judgment, Mr d’Oliveyra’s evidence was largely to the effect that the covenants are obsolete because they have been superseded by modern planning controls. However, as discussed above, it is well established that the advent of modern town planning controls does not, in and of itself, render single dwelling covenants obsolete.”

“50 Mr Nash relied on the consolidation of lot 372 with part of lot 371 as a change in the character of the property that rendered the covenants obsolete. He also relied on the fact that on 15 June 1965, O’Bryan J made an order permitting three dwellings to be constructed on two lots (lots 35 and 36 on plan of subdivision numbered LP6652) located at the corner of Burke Road and Cascade Street, in submitting that a modification of the covenants affecting the plaintiffs’ land would permit the same result, namely two dwellings on 54 Riverside Avenue (lot 372) and one dwelling on 52 Riverside Avenue (that part of lot 371 that is not owned by the plaintiffs). Mr Garde QC, who appeared with Mr James Samargis for the defendants, pointed out that O’Bryan J’s decision was made unopposed in chambers in relation to land on the periphery of the estate and that, in any event, the parcel of land previously in lot 371 that was annexed to lot 372 is a modest strip which is used for a swimming pool. I accept Mr Garde’s submission. Lots 35 and 36 are part of the Freer-Smith subdivision and are on the north-west perimeter of the estate, and the order made by O’Bryan J was unopposed. The plaintiffs’ land is centrally located within the Robinson subdivision of the estate and the discharge or modification of the covenants affecting their land is vehemently opposed by the defendants. The acquisition of part of lot 371 in 1962 for the purposes of a pool does not constitute a sufficiently material change to the character of the property to warrant discharge or modification of the covenants.”

“51 I accept the evidence of Mr Milner that, for the purposes of the plaintiffs’ land, the immediate neighbourhood is bounded by Cascade Street to the north, The Boulevard to the west and to the south and Bulleen Road to the east. I reject Mr d’Oliveyra’s evidence that each of Riverside Avenue, Bulleen Road and Cascade Street is a distinct neighbourhood. Between 1923 and the present time, the neighbourhood has undergone change, in the sense that a rural environment has become a suburban environment. Most of the changes occurred in the 1930s, 1940s and 1950s, when houses were constructed on the allotments in the neighbourhood and vegetation was planted. The houses that were built in the neighbourhood originally reflected a mixture of architecture. Most of the original houses, including the houses owned by the plaintiffs and the defendants, remain in their original form, with some modifications. The houses in the estate that have been demolished and replaced by modern houses are in a small minority. It follows from this that most of the houses are well set back from the street and are surrounded by trees and landscaped gardens.”

“52 There was considerable debate before me as to the purpose of the restrictive covenants that apply in the estate. Much of this debate was focused on an advertisement that was prepared in approximately 1914 for the sale of allotments in the estate. As this was what we would today describe as a “marketing document” and contained inconsistencies about the contemplated uses of the land, it does not assist me. In the absence of other contemporaneous evidence of purpose, the purpose can be inferred from the fact that a single dwelling covenant with a minimum construction cost of £500 per dwelling was imposed on nearly all of the allotments in the estate. That purpose was to establish an estate that is overwhelmingly dominated by good quality detached single dwellings and to create a low density housing environment with plenty of space for trees and gardens in each allotment. Further, irrespective of the purpose of the covenants and whether that purpose was legally enforceable in light of the then prevailing law, they have in fact produced an estate having the above characteristics and the benefits for the residents of the estate, including the defendants, resulting from those characteristics.”

“53 I accept Mr Milner’s evidence (set out in paragraphs 18 to 21 of this judgment) that the covenants burdening the plaintiffs’ land continue to enure, for the benefit of the defendants, low density housing with the advantages that this brings. Although Mr Milner conceded that the covenants do not, in themselves, require attributes such as generous setbacks and landscaping, in his opinion such covenants produce low density housing which in turn results in a spacious living environment with attributes such as generous setbacks and landscaping. I also accept the evidence of the defendants that they continue to enjoy the spacious living environment of their neighbourhood including when they walk or drive in the neighbourhood. The covenants burdening the plaintiffs’ land, in conjunction with the other covenants applying in the neighbourhood, have facilitated, and continue to facilitate, that environment.”

54 It follows that I reject Mr d’Oliveyra’s evidence that the covenants burdening the plaintiffs’ land are obsolete by virtue of modern town planning controls. Those controls do not provide a guarantee to the defendants that only a single dwelling house will be constructed on the plaintiffs’ land whereas the covenants do provide such a guarantee. The covenants also guarantee that non-residential uses, which may otherwise be permitted under town planning controls, cannot be established on the plaintiffs’ land. These guarantees constitute an important ongoing benefit for the defendants.

55 On the evidence, the plaintiffs have not satisfied me that, by reason of changes in the character of their property or the neighbourhood or other circumstances of the case, the single dwelling covenants ought to be deemed obsolete.

Second limb of s 84(1)(a) of the PL Act

“56 The plaintiffs sought a declaration that the continued existence of the single dwelling covenants would impede the reasonable user of the plaintiffs’ land without securing practical benefits to other persons. Alternatively, they sought a declaration that the continued existence of the covenants would, unless modified to substitute for the expression “save one dwelling house” the expression “save two dwelling houses”, impede the reasonable user of the plaintiffs’ land without securing practical benefits to other persons.”

“57 The difficulty with this aspect of the plaintiffs’ case is that they failed to give evidence of what use of the property was impeded by the covenants. The plaintiffs bought the property as a family home in 2003 and have continued to use the property as a family home since then. There was no evidence that, by reason of changed family circumstances, the property was no longer capable of being used as a family home. Nor was there any evidence about particular proposed alternative uses of the plaintiffs’ land that were impeded by the single dwelling covenants. As an alternative to the discharge of the covenants, the plaintiffs sought their modification to permit the construction of two dwelling houses. Mr Vrakas’ evidence was that he and his wife did not have any specific plans to build two dwelling houses on their land; rather, they wanted the covenants discharged or modified to give them the option of constructing two dwelling houses on the land.”

“58 It is of significance that the plaintiffs’ expert, Mr d’Oliveyra, conceded that “the subject land will still be capable of reasonable beneficial use in future if the Covenants are retained”. He also did not support any modification (as distinct from discharge) of the covenants burdening the plaintiffs’ land.”

“59 Mr Garde described the plaintiffs’ application to the Court as opportunistic, in the sense that it sought to discharge or modify the covenants to enhance the value of the plaintiffs’ land and give them greater flexibility in using the land. I agree. It is not sufficient for a plaintiff to simply assert that land with a restrictive covenant provides less options than land without a restrictive covenant and therefore the restrictive covenant impedes a reasonable user of their land. Every applicant for the discharge or modification of a single dwelling covenant can make this assertion. By failing to present evidence that the single dwelling covenants impeded a particular reasonable use of their land, the plaintiffs have failed to satisfy me of the second limb of s 84(1)(a).”

60 Even if I were satisfied that the covenants impede the reasonable user of the plaintiffs’ land, I am not satisfied that the covenants do not secure practical benefits to other persons. For the reasons discussed in paragraphs 52 to 54 of this judgment, the single dwelling covenants have facilitated the creation of low density living in the neighbourhood (and throughout the estate) which has secured, and continues to secure, practical benefits for the defendants.

61 For the above reasons, the plaintiffs have not made out their case under the second limb of s 84(1)(a).

Section 84(1)(c) of the PL Act

“62 Mr Nash submitted that the proposed discharge or modification of the single dwelling covenants will not substantially injure the defendants. He emphasised that, as the defendants’ land is on different roads than the plaintiffs’ land, there is considerable distance between the relevant lots, and the plaintiffs’ land is not visible from the defendants’ land, a change in the number or size of new dwelling houses on the plaintiffs’ land will not have any adverse impact on the defendants’ land and therefore will not cause any substantial injury to the defendants.

“63 At first blush, there appears to be some force in Mr Nash’s submission. However, the authorities establish that the beneficiaries of a single dwelling covenant do not have to own land that is contiguous to the servient tenement in order to suffer injury for the purposes of s 84(1)(c). The authorities make it clear that, depending on the evidence, impairment of the character of the relevant neighbourhood, including through the discharge or modification of a covenant potentially establishing a precedent, may suffice.

“64 I have already found that the covenants have produced, and continue to produce, benefits for the defendants in that they have facilitated the creation of low density housing and a spacious and aesthetic environment. The discharge or modification of the covenants would directly affect the defendants’ enjoyment of their land by altering the dominant single dwelling character of their neighbourhood. Some of the defendants regularly walk or drive past the plaintiffs’ land and their enjoyment of their neighbourhood would be adversely affected in a real rather than fanciful manner if there were a departure from a single dwelling on the plaintiffs’ land.

“65 In addition to these direct impacts, it can be inferred that if I were to accede to the plaintiffs’ application, my decision may encourage developers to acquire other properties in the neighbourhood and apply to discharge or modify covenants affecting those properties, relying on my decision as a precedent in those applications. While each such application would be decided on its particular facts, and may not succeed, the fact is that the defendants would be in a weaker position in seeking to resist subsequent applications that affect their land. The defendants’ concerns about the precedent value of a decision by this Court in favour of the plaintiffs, are well founded because their neighbourhood has large allotments which are attractive to developers and there has already been one instance (in 1993) where a developer attempted (unsuccessfully) to remove single dwelling covenants burdening two of those allotments (51 and 53 Cascade Street) under s 60(5) of the Planning and Environment Act 1987 (Vic) for the purpose of constructing 14 dwelling houses. The abovementioned precedent value constitutes a substantial injury to the defendants for the purposes of s 84(1)(c).

“66 For the above reasons, the plaintiffs have failed to make out their case under s 84(1)(c).

Discretion under s 84(1) of the PL Act

“67 Even if the plaintiffs had succeeded on one of the three alternative bases upon which they argued their case, I would have refused them relief under s 84(1) in the exercise of my discretion.

“68 Mr Vrakas’ evidence was that he and his wife bought the property without first inspecting it or making other inquiries and therefore they were not aware, at the time of the purchase, that the property was burdened by the covenants. Mr Garde submitted that, as Mr Vrakas is an experienced real estate agent, it is unlikely that he did not know about the single dwelling covenants when he and his wife acquired the property. Alternatively, Mr Garde submitted that, if Mr Vrakas’ evidence is true, his conduct was “close to recklessness”. I accept Mr Vrakas’ evidence that he bought the property without inspecting it and without knowing that it was burdened by the covenants. I find that the plaintiffs bought the property for its development value rather than the attributes or intrinsic value of the existing house. The plaintiffs saw potential to develop the land and took a risk that there may be legal impediments to achieving that goal. Unfortunately for them, the restrictive covenants, which have burdened the property since the early 1940s, are an impediment to developing the land other than use for a single dwelling house. To that extent, they are the authors of their own misfortune. As a matter of discretion, I cannot see any compelling reason why the defendants should lose the benefit of the covenants in order to assist the plaintiffs to overcome the difficulties that they have created for themselves.

“69 The plaintiffs’ conduct is also relevant to my discretion. They bought the property in April 2003 and applied to this Court in June 2005 to discharge the covenants or modify them to permit the construction of five units on their land. Such a proposed modification had poor prospects of success from the outset. Two weeks before the hearing before me, they gave notice to the defendants that they would seek, in the alternative, a modification to enable the construction of two dwelling houses on the land. The proposed modification to enable the construction of five units was not formally abandoned until the first day of the hearing before me. Neither of the proposed modifications was supported by the evidence of the plaintiffs’ town planning expert. Mr Nash conceded that Mr Vrakas was “pretty vague in the witness box” about what the plaintiffs were going to do with the property.

“70 Persons who apply to this Court seeking relief that they perceive will bring them financial and other benefits and which they know is perceived by other parties to be detrimental to them should be as specific as possible about the proposals they have in mind so that the Court is placed in the best position to assess the impact that those proposals may have on all the parties. Plaintiffs who do not produce to the Court any specific plans but base their case on a general desire to optimise their options in relation to their property, as in this case, face the risk that the Court will not be satisfied, on the evidence, that they have made out their case.

“71 Although Mr Vrakas denied Mr Garde’s assertion that, in the absence of specific plans, the plaintiffs were seeking to test the Court’s attitude to the covenants, he agreed that the application was made to “confirm our position in regard to what … options I had”. That is not a sufficient basis for relief under s 84(1). In any event, the plaintiffs’ failure to produce any specific plans as part of their case made it very difficult for this Court to exercise its discretion in their favour if such discretion had been enlivened by a finding that the plaintiffs had satisfied one of the three bases upon which they argued their case under s 84(1) of the PL Act. As no such finding has been made, the discretion was never enlivened.”

Case Law: Importance of addressing the criteria

Djurovic [2010] VSC 348 (17 August 2010)

Judgment: Mukhtar AsJ

“8. On 23 July 2010, a Mr Eric Belcher, the owner and occupier of 12 Thames Street, Frankston South (Lot 90), appeared and addressed the Court. He is a senior citizen, and has lived there since 1957. He did not wish to be added as a party, but over Ms Harrison’s objection, I allowed him to state his concerns. He conducted himself with decorum and in good faith. In essence, he said (and it was apparent) that he had nothing personal against the applicants, but was concerned about the prospect of increasing housing density in a neighbourhood which he adores and regards as a beautiful and most pleasing place to live. He is concerned that if this application is allowed then others may follow and the grant of the application would be the “thin end of the wedge.” This is a not uncommon lament, and what he had to say was sincere.”

“9. But Mr Belchar did not wish to address the factual considerations that I am required to consider under s 84 (1) of the Property Law Act. His address to the Court however did give me pause to consider carefully the work and opinion of the applicants’ town planning consultant. I was particularly concerned to re-examine the materials to see if it truly could be said, under s 84(1)(a) that there had been changes in the character of the neighbourhood or other circumstances which made the restrictive covenant obsolete. For that reason, even though this application was unopposed, I adjourned the matter for further argument to 10 August 2010.”

The application was approved

Case Law: Costs of defending against a plaint

Stanhill Pty Ltd v Jackson [2005] VSC 355 (2 September 2005)

Background

In an earlier case (Stanhill Pty Ltd v Jackson [2005] VSC 169 (19 May 2005)) the Plaintiff had applied for an order to discharge or modify a covenant that prevented the plaintiff from building 5 dwellings on a property that was burdened by a covenant that restricted it to a single dwelling property. Morris J modified the order to allow for the construction of up to 2 dwellings.

The defendants, who had objected to any modification of the covenant, sought costs, relying upon the decision in Re Withers.

Judgment: Morris J

“…in Re Withers … Anderson J commented:

“Though costs are a matter of discretion and each case stands on its particular facts, such cases as these indicate that, unless the objections taken are frivolous, an unsuccessful objector in a proper case should not have to bear the bitter burden of his own costs when all he has been doing is seeking to maintain the continuance of a privilege which by law is his.”

“The principle set out in Re Withers is consistent with other decisions of the Court, such as that by Gillard J in Re Markin, Lush J in Re Shelford Church of England Girls’ Grammar School and McGarvie J in Re Ulman. In my opinion, it is a sound principle.”

“4. The plaintiff submitted that it is rare for a successful plaintiff to be deprived of a costs order in his or her favour. However that general principle is not applicable where a plaintiff seeks some indulgence from the court or (as is the present case) seeks to change an existing right. This is especially so where the remedy sought by the plaintiff is discretionary. I agree with the plaintiff’s submission that section 84 of the Property Law Act should not be seen as a section in which an applicant obtains an indulgence or concession. There is a right to make such an application and any such application must be considered on its merits. However it remains true that the court has a discretion as to whether or not to grant a remedy. It is this element, rather than some notion of a concession or indulgence, which underpins the principle articulated in Re Withers.”

“5 The plaintiff also submitted that costs will always remain in the discretion of the court; and there is no universal rule to be applied in cases of this type. This may be so, but cases such as Re Withers, will provide guidance. It is striking that the facts of this case are not only quite similar to those in Re Withers, but also support a conclusion that the defendants played a proper role in defending the claim.”

“6 It is also relevant that the defendants conducted the proceeding responsibly. If a defendant, resisting an application to modify a covenant, acts irresponsibly then it would not be entitled to costs in relation to that irresponsible conduct; indeed, it might be in a position where it would have to pay the plaintiff’s costs.”

“7 If the plaintiff had been wholly successful and had obtained a modification to the covenant so as to permit four or five dwellings, then I would have been inclined to make no order as to costs. But in the present circumstances the appropriate order is that the plaintiff pay the defendants’ costs, to be assessed on a party and party basis.


Last updated: 19 May 2013 | Shortlink: http://wp.me/P3tOu9-q3