The Victorian Civil and Administrative Tribunal (VCAT) Practice Day Hearing for the Waterfront Place Beacon Cove covenants was held today with the following outcomes (subject to the wording of any official VCAT record or order):
- Issues relating to the ambit of covenants were not resolved, and as a result another Practice Day hearing is scheduled for 14 June 2013.
- The hearing for application P764/2013 is scheduled for 7 October 2013, with a duration of up to 5 days.
Parties at the hearing included:
- Waterfront Place Pty Ltd (Applicant),
- City of Port Phillip (Responsible Authority),
- Mirvac Victoria Pty Ltd (Respondent), and
- Covenant holders (Respondents).
Ambit issue: who are beneficiaries of covenants?
The issue on the ambit of covenants refers to an argument brought by some Beacon Cove property owners that there may be a common building scheme that affects the whole of the Beacon Cove estate including 1-7 Waterfront Place . This argument is based among others, on the suggestion that most properties in Beacon Cove were burdened and benefitted with similar or identical restrictive covenants affecting 1-7 Waterfront Place. Additionally, many purchasers of properties in Beacon Cove bought their properties with the notice of the restrictive covenants burdening 1-7 Waterfront Place and previous stages of releases, which were attached to their contracts of sale.
If that argument is successful, then the scope of those who are entitled to notices and rights to object in VCAT as covenant beneficiaries may potentially widen considerably.
The Tribunal was open to consideration of this argument, leading to the provision of additional time for the applicant and respondent to research the issue and report back to the Tribunal on 14 June 2013.
More information on restrictive covenants in Victoria
Note that any information may dated or superseded by changes to legislation or case law, and also note that references to specific sections of an Act need to be interpreted in the context of the whole Act and case law. This is for information only and does not replace professional legal advice.
- Department of Planning and Community Development website
- Restrictive Covenant Cases in VCAT (The Last Two Years), a paper for the Law Institute of Victoria by VCAT Senior Member Richard Horsfall, with a contribution from Patrick Doyle, Solicitor, of Maddocks dated 2 March 2005
- Property Laws, Easements and Covenants: Consultation Paper, Law Reform Commission, 2010
- “Removal of Covenants: Section 84 of the Property Law” Rupert Watters of Greens List Barristers
Interpretation of a Covenant: Strict vs Purposive
Patrick Doyle (then of Maddocks Lawyers, now Managing Principal Solicitor in the Administrative law Division of the Victorian Government Solicitor’s Office) noted in 2005 that “it seems to me that the Victorian Civil and Administrative 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 search for what was the likely intention at the time of the covenants.”
However more recent decisions at the Supreme Court of Victoria have returned to a strict interpretation, and this may be reflected at VCAT.
A recent case in the Victorian Supreme Court, Grant & Anor v Preece  VSC 55, is noted by Lawyer Assist as having particular significance to Victorian practitioners because of “Daly AsJ’s decision to take the ‘traditional approach’ to the interpretation of s 84(1) and not to take the less stringent approach of Morris J in the Stanhill case. This is now the third Supreme Court decision of note to consider itself bound by the Full Court’s decision in Re Stani (Unreported, Vic SC, Full court, 7 December 1976), even if Kyrou J in Vrakas v Register of Titles  VSC 281 thought that Morris J’s judgment ‘had much to commend it’. The upshot of this must surely be that Re Stani, and not Stanhill, represents the law in Victoria and that applicants for the discharge or modification of restrictive covenants in that state will find obtaining an order a challenging task—as did the applicants in this case.” [More]
The Lawyer Assist caution to those seeking a Supreme Court of Victoria order for removal of a restrictive covenant is also offered by Rupert Watters of Greens List Barristers in his paper “Removal of Covenants: Section 84 of the Property Law“.
Section 79 appeals decided by VCAT
The Austlii database provides information about recent Section 79 appeals decided by VCAT [Click]
The objective in identifying Section 79 cases (or similar) cases involving restrictive covenants is to provide information to restrictive covenant holders on issues and consideration of those issues, for the purpose of information and self-education, rather than provision of legal advice.
Particularly relevant cases (i.e. Section 79 (or similar) applications involving a restrictive covenant and a planning application) include:
- Simonovski v Wyndham CC & Ors  VCAT 1323 (13 July 2009): Before Tracey Bilston-McGillen. Decision: in favour of council.
“Consideration of the application
Having regard to the covenants in question, I am obliged to consider this matter in accordance with the provisions of the Planning and Environment Act 1987 and Sections 60(2) and 60(5). The act establishes two tests that must be satisfied before a permit may be granted to allow the variation or removal of the covenant , namely:
• The beneficiaries of the covenant will be 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
• The objections made by beneficiaries of the covenants are vexatious or not made in good faith.
Will the objector be unlikely to suffer detriment of any kind, including perceived detriment, as a result of the proposed variation to the covenant ?
The permit applicant made submissions on the merits of two dwellings on the lot and how is satisfies urban consolidation state and local policies. I am not required to assess the merits of two dwellings on the site. This is not a case whereby consideration in this matter is defined by the Planning and Environment Act 1987 as described above. There are two tests applying to the consideration of the test for the variation of a restriction at sections 60(2) and 60(5) of the Planning and Environment Act 1987.
Ms Filippone submitted that she believes she will suffer perceived detriment in this case in that the variation to the restriction will allow for a second dwelling on the lot which in turn will affect her amenity in the following manner:
• Change in character of the area;
• Change in the quietness of the area:
• Increase in traffic of the area; and
• Impact on the safety of the area particularly pedestrian (children’s) safety due to traffic increase.
Pursuant to section 60(2) of the Planning and Environment Act 1987 a Responsible Authority can only grant a permit if it considers that the owners of the land benefiting from the covenant will be unlikely to suffer financial loss, loss of amenity, loss arising from change to the character of the neighbourhood or any other material detriment as a consequence of the removal or variation of the restriction. In considering the submission of Ms Filippone, I am unable to reach the conclusion that she will not suffer a loss arising from change to the character of the neighbourhood or a loss of amenity as a consequence of the variation to the restriction.
Pursuant to section 60(5) of the Planning and Environment Act 1987, a Responsible Authority can only grant a permit if it considers that the owners of the land benefiting from the covenant will be unlikely to suffer any detriment of any kind. Given the submission of Ms Filippone I am unable to reach the conclusion that she will not suffer any detriment of any kind even if it is perceived detriment.
On this basis, the application does not meet the test of sections 60(2 ) or 60(5) of the Planning and Environment Act 1987 which requires me to be satisfied that Ms Filippone will not suffer any detriment of any kind even if it is perceived detriment.
Was the objection vexatious or not made in good faith?
Given my finding of my assessment against section 60(5) (a), I am not required to consider 60(5) (b). However, I heard submissions on the matter and make the following observations.
I agree with the Responsible Authority that there is no basis to find that the objection lodged was vexatious or not made in good faith. Ms Filippone indicated that they purchased their property understanding that the covenant applied to their house and the area, which in their mind provides a higher level of protection regarding the future development of the area. In my view the objection genuinely reflect the concerns of Ms Filippone relating to preserving the character of the area.
For the above reasons I affirm the decision of the Responsible Authority and will direct that no permit issue for the variation of the restriction.“
- Tabone v Mitchell SC & Ors  VCAT 383 (2 April 2013): Before Dr Rebecca Leshinsky. Decision: in favour of council (and retention of covenant).
“There is a beneficiary who has objected on grounds noted in section 60 (2) of the Planning and Environment Act that they will suffer detriment should the restrictive covenant be lifted or varied. From the submissions and evidence put to before the Tribunal, I have no reason to believe that this objection is vexatious or not made in good faith.
It is for these reasons why the Tribunal is not able to lift or vary the covenant regardless of the merits of the proposed subdivision and this then affects the applicants’ application to subdivide the land because the restrictive covenant only permits ‘one single dwelling house’ on the subject site.
The application for a planning permit must therefore not be permitted. The decision of the responsible authority will be affirmed. No permit will be granted.“