Real property - Restrictive covenant limiting height of buildings - Statutory power to vary - Whether application within statutory power - Meaning of substantial injury to those entitled to benefit of covenant

Transfer of Land Act 1893 (WA) s 129C(1)

Perth Construction Pty Ltd v Mount Lawley Pty Ltd (1955) 57 WALR 41

1 PARKER J: By originating summons filed on 20 November 1998 the plaintiffs sought an order pursuant to s 129C(1) of the Transfer of Land Act 1893 that the restrictive covenant in Transfer F806307 as regards the land comprised in Certificate of Title Volume 2026 Folio 256 be varied so that the height restriction be amended from 18.7 ahd above the Australian Height Datum to 19.86 ahd above the Australian Height Datum.

2 This originating summons was heard before me on 23 July 1999. A number of those served with the originating summons as defendants, but by no means all, appeared in opposition to the order sought. At the conclusion of the hearing on 23 July 1999 I dismissed the application as it had not been demonstrated that the application came within the provisions relied on for the plaintiffs - 129C(1)(a) or (c) of the Transfer of Land Act 1893 - nor, if it had, that this was a case in which the discretionary power conferred by s 129C(1) should be exercised; see Kort Pty Ltd v Shaw [1983] WAR 113. I indicated that my reasons would be published later.

3 The plaintiffs' land the subject of the summons is more usually known as Lot 219 Cape View Lane. It is situated close to the town of Capel and fronts the ocean beachfront on Geographe Bay. It is one lot of a relatively small subdivision which was effected in 1994. As part of the subdivisional scheme a number of restrictive covenants were placed on all of the lots which comprised the subdivision. For the most part it may be said that these covenants appear to be directed to ensuring that only dwellings of some substance and quality were erected on each of the lots. In the case of the plaintiffs' land and the other lots of the subdivision which fronted the ocean beach there was an additional covenant which is the subject of this summons. By that covenant buildings may not be erected to a height which exceeds 18.7 ahd above the Australian Height Datum. There is in evidence before me sales literature used for the sale of the lots that were comprised in the subdivision and the note in that literature concerning the restrictive height covenant may usefully be quoted. The note read:

"... This is quite simply to stop the building of two storey dwellings or higher on those lots which may detract from the view of those people behind them. The lot sizes are such that there is ample room on the ground to build a very large home without going two storeys."

There is no question that when then the plaintiffs purchased their lot they were fully and correctly informed of the restrictive covenants and purchased subject to them, including that covenant which restricted the height of buildings to 18.7 ahd above the Australian Height Datum.

4 The plaintiffs decided to have a home built on their lot. They consulted a well known building company and eventually entered into a contract for the construction of a home. This house appears to have complied with the restrictive covenants that attached to the lot except that concerning height. The evidence led before me for the plaintiffs includes that of the managing director of the building company and a building consultant with whom the plaintiffs dealt. It is clear from that evidence that the plaintiffs drew the attention of the builder to the existence of the height restriction and that the builder obtained details of that restriction and included those details in its file. The plaintiffs selected one of the standard plans of the builder to form the basis of the dwelling they proposed but this was modified considerably to suit their particular requirements. As the plan was finally settled it included provision for a large upstairs room which ran substantially the length of the house from the street to the rear of the block, the rear being the frontage to the ocean beach. This large room was variously described as a loft or master bedroom on plans and in the evidence, but incorporated in the upstairs area was an ensuite bathroom. The room is used by the plaintiffs as their master bedroom although there are on the ground floor a number of other bedrooms including one which the builder originally designated a master bedroom. It too has an ensuite bathroom. Access to this upstairs room is by internal stairway and the room has a balcony on the ocean frontage.

5 The roofing of the house is a pre-painted corrugated iron over a timber frame. I am told the roof is pitched at about a 30 degree pitch. The bed plate for the roof rests on the brick walls of the ground floor rooms and the large upper room is constructed within the pitch of the roof. From the street it may be said that the roof is a predominant feature of the appearance of the house. The design of the roof has been dimensioned and pitched so as to accommodate within the roof structure the large upstairs room.

6 Even though the builder was well aware of the height restriction and had been required by the plaintiffs to build within it, unfortunately that seems to have been completely overlooked in the course of the detailed designing of the house. This designing was undertaken by the builder. As a consequence, when the house was constructed in accordance with the plans that had been agreed between the plaintiffs and the builder the height of the structure when completed exceeded the height limit of 18.7 ahd stipulated by the covenant. The height of the house as constructed is in fact 19.86 ahd above the Australian Height Datum. I am told the difference is approximately 1.2 metres in height.

7 The plaintiffs, and it appears their builder, first realised that the design in fact exceeded the height allowed by the restrictive covenant when the roofing structure was being pitched. It seems that at that time other owners of land in the subdivision raised their concern that the height of the roof structure appeared to exceed that allowed by the restrictive covenant. The plaintiffs and their builder discussed the problem at that time and apparently some consideration was given to modification of the design although the evidence does not provide the full details of this. The plaintiff decided to press on and complete the construction of their house in accordance with the original design ie to complete the house even though it exceeded the height allowed by the covenant by approximately 1.2 metres. Although the evidence does not allow any precise determination of the matter it would appear to be the case from the terms of the building contract with respect to progress payments that the house may have been approximately one-third completed in terms of cost at the time the plaintiffs became aware that their partly built house would not comply with the height restriction imposed by the covenant.

8 Having completed the construction of the house and occupied it in 1998, the plaintiffs eventually commenced this originating summons in November 1998 with a view to having the restrictive covenant varied so that the house as constructed would comply with the covenant as varied. By the terms of the summons, of course, the height restriction imposed on the other beach frontage lots of the subdivision which had been subject to the same height restrictions as the plaintiffs' lot would remain at 18.7 ahd; only the plaintiffs' lot would be subject to a restriction of 19.86 ahd.

9 The owners of three lots in Cape View Lane which may be loosely described as across the road from the plaintiffs' lot are among those who appeared before me in opposition to the granting of any variation to the height restriction. The owner of a lot adjoining the plaintiffs' lot also appeared in opposition, as did a number of other owners in the subdivision. The lots which I have described as across the road are Lots 236, 237 and 238. Those lots fall from their rear to the street so that generally speaking they are higher than the street and higher than the plaintiffs' land. This would normally give them some advantage with respect to views toward the ocean across the plaintiffs' land and any building constructed on it. I should make it clear that the height difference is not great. I am satisfied from the evidence that has been placed before me by the owners of these lots, each of which is still vacant land, that those owners each contemplate the construction of a two storey building so that they may take advantage of the views toward the ocean, particularly from the upstairs level of their contemplated homes. None of these lots are subject to a covenant which restricts the height of construction. On the landward side of Lot 238 Cape View Lane is Lot 242 Peppermint Grove Terrace and on the landward side of Lot 237 is Lot 243 Peppermint Grove Terrace. The owners of these two lots each appeared in opposition. One of them, Lot 243, has a substantial two storey dwelling erected on it. This dwelling enjoys favourable views at the present time toward the ocean, although those views have been affected by the height of the plaintiffs' house and will be further restricted whenever buildings are constructed on Lots 236, 237 and 238 Cape View Lane, especially if those buildings are two storey residences.

10 A home has been constructed on Lot 220 Cape View Lane which immediately adjoins the plaintiffs property. The peak of the roof of the home on Lot 220 is at or just within 18.7 ahd above the Australian Height Datum. On the other side of the plaintiffs' land, Lot 218 is vacant but the owner is among those objecting to any variation to the restrictive covenant. Beyond Lot 218 lies Lot 217 on which a home has been constructed, the roof of which is well below the 18.7 ahd height line.

11 If the variation of the covenant sought by this summons is not allowed it is to be anticipated that other owners will take steps to require compliance by the plaintiffs with the terms of the covenant. Much of the evidence before me was directed to the question whether that could be achieved by some variation to the roof structure of the plaintiffs' home while leaving them with the use of the upstairs room which they presently enjoy. There are problems, both structural and with respect to securing building approval, in the way of achieving such an outcome. While the evidence is far from precise or complete, I am persuaded that the plaintiffs could not expect to receive building approval from the local authority for a modification of their house so that the roof line did not exceed 18.7 ahd whilst retaining the upstairs room for use as a master bedroom. In essence this is because, on the proposals put before me, the internal height of the upstairs room would not at any point be as great as 2.4 metres which is the minimum height provided by the Building Code of Australia ("the Building Code") for a habitable room such as a bedroom. Clause 3.8.2.2 of the Building Code deals with ceiling heights and habitable room is defined in cl 1.1.1.2 to include a bedroom. Clause 3.8.2 is introduced with a reference to performance requirement which is Part 2.4 of the Building Code. Part 2.4 provides by cl O2.4.2 that the object of the Building Code is to safeguard the occupants from injury or loss of amenity caused by inadequate height of a room or space, and by cl F2.4.2 that a building is to be constructed to provide room height in a room or space suitable for the intended use, and by cl P2.4.2 that a room or space must be of a height that does not unduly interfere with its intended function. The ceiling of the upstairs room is in fact sloping or raked and, on the view I take of cl 3.8.2.2, it is par (e) which is applicable. If that be so the height described by the Building Code is one "that does not unduly interfere with the proper function of the room or space." However, the minimum height prescribed by 3.8.2.2(a) for a habitable room such as a bedroom is 2.4 metres. In construing the effect of the Building Code that precludes me from being satisfied that pursuant to cl 3.8.2.2(e), read with cls O2.4.2, P2.4.2 and F2.4.2, approval could be expected to a design for a bedroom with a raked ceiling of which the greatest ceiling height is less than 2.4 metres.

12 There was even uncertainty in the evidence as to the legal force of the Building Code. Given what evidence there is on the matter I am persuaded, on balance, that a local authority would be guided in the granting or refusal of approval by the Building Code.

13 Evidence from the managing director of the plaintiffs' builder also persuades me that structural difficulties would be encountered, despite the views of an engineer called for the defendants, if the roof line were to be flattened as it approached its peak so that it did not exceed 18.7 ahd, as was proposed by the engineer. In particular, I am persuaded that it is likely that there would be significant and ongoing problems with weatherproofing were the roof to be modified in the way proposed by the engineer. I accept that this is aggravated because this is an ocean front property and high winds are to be expected from time to time, especially during the winter months.

14 To the extent that the matter was canvassed in evidence before me, it appeared more probable than not that to achieve a significant reduction in the roof height of the plaintiffs' home whilst maintaining the upper level master bedroom would necessarily involve some encroachment above the height restriction allowed by the covenant. Only in this way would there be an adequate internal ceiling height in the upper room. One possible design, briefly canvassed in cross-examination but not fully explored in the evidence, was for the upper walls of the upstairs room to be raised to protrude above the present pitched roof, with an entirely distinct flattened roof structure fitted onto those walls. This could overcome the weatherproofing problem. No detailed design evidence was placed before me, but it was clear, nevertheless, that while such a design would enable the total roof height to be reduced significantly, a design of this type would still exceed the height restriction of the covenant.

15 More significantly the evidence of the second named plaintiff, Mrs Barrett, who gave evidence on behalf of herself and her husband was most emphatic that any form of flattening of the main pitch of the roof in either of the ways which were canvassed before me in evidence would be quite unacceptable to the plaintiffs on aesthetical grounds as it would spoil for them the appearance of their home. In short, on her very clear evidence, unless the restrictive covenant could be varied in the way sought to allow the present roof design to remain, the plaintiffs would look to their builder to design another house which did comply with the height covenant and which met the plaintiffs' other requirements, even if this meant entirely replacing the present house. The evidence of Mrs Barrett made it clear that there was no practical point in pursuing the possibility of some form of modification of the present roof in search of a design which complied with local authority requirements and which was structurally sound and water tight and which would allow them the use of their upper room, whilst minimising any infringement of the present height covenant. In short, the plaintiffs wanted their present house as it is, or they expected their builder to replace the house with one they found satisfactory. They were not prepared to compromise on the aesthetics of the roof design. The evidence before me indicated that the builder accepted that this would be its obligation if the present height restriction was not varied in the way sought.

16 The plaintiffs rely on so much of s 129C of the Transfer of Land Act as provides:

"(1) Where land under this Act is subject to an easement or to any restriction arising under covenant or otherwise as to the user thereof or the right of building thereon, the court or a Judge may from time to time on the application of any person interested in the land by order wholly or partially extinguished, discharge or modify the easement or restriction upon being satisfied -

(a) that by reason of ... other circumstances of the case which the court or a Judge may deem material ... the continued existence (of the restriction) 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

(c) that the proposed extinguishment, discharge or modification will not substantially injure the persons entitled to the easement or to the benefit of the restriction."

17 With respect to par (a) I do not see how the continued existence of the restriction and the height provided by the covenant "would impede the reasonable user of the land". There is no question that the land is adequate in size to enable the construction of a large residence within the present height restriction. It is not the case that the plaintiffs cannot have full and adequate use of this land as a residential property. Their present predicament does not arise because the height restriction precludes the reasonable user of the land as a residential lot but because those designing the house that has been built failed to have regard to the restriction when they were preparing the design. Hence, it is merely the design of the particular house that has been constructed which presents the problem, not any impediment on the reasonable use of the land as a residential block. A second obvious problem for the plaintiffs with s 129C(1)(a) is that the height restriction does, in my view, secure practical benefits for others, in particular those whose properties are to the landward of the plaintiffs' lot and whose views toward the ocean take in the roof structure of the plaintiffs' house insofar as that structure encroaches above the height allowed by the covenant. In expressing this last conclusion I have, to a degree, anticipated factual matters to which I will now turn in the context of considering the possible application of s 129C(1)(c) to this case.

18 It is contended for the plaintiffs that to vary the height restriction so that the present roof complies would not substantially injure persons entitled to the benefit of the restriction. On this basis it is contended for the plaintiffs that an order might be made under par (c).

19 With respect to the meaning of the phrase "substantially injure" in par (c) I have been considerably assisted by the discussion of McLelland CJ in Eq of the Supreme Court of New South Wales in Webster v Bradac (1993) 5 BPR 12,032 in particular at 12,035. There his Honour said of the similar phrase in a somewhat similar provision in the Conveyancing Act 1919 (NSW) s 89:

"I turn now to the question raised by par (c) of s 89(1), namely whether the proposed modification will substantially injure persons owning (or having an interest in) other lots in the subdivision ... in this context "substantially" connotes injury which has substance in the sense of being real or appreciable. The kind of injury contemplated in par (c) is injury to the relevant person in relation to his ownership of (or interest in) the land benefited. The injury may be of an economic kind, for example, reduction in the value of the land benefited, or of a physical kind, for example, subjection to noise or traffic, or of an intangible kind, for example, impairment of views, intrusion upon privacy, unsightliness, or alteration to the character or ambience of the neighbourhood. These arbitrary categories, whilst serving to illustrate the ambit of the concept of injury for the purposes of the paragraph, are neither mutually exclusive nor necessarily exhaustive and what I have described as injuries of a physical or intangible kind could well also affect the value of the land in question. However, it is clear that a person may be "substantially injured" within the meaning of par (c) notwithstanding that the value of his land would be unaffected or even increased by the proposed modification. It is also clear, particularly in the case of injuries of what I have called an intangible kind, that the subjective tastes, preferences or beliefs of particular individuals may, within limits of reasonableness, give rise to injury in the relevant sense to those individuals. ..."

20 Evidence in this regard was given on behalf of each of the parties who appeared before me in opposition to the order sought by the plaintiffs. The bases for their concerns and objections varied. I do not propose to deal exhaustively with this evidence. It is enough to turn to the evidence on behalf of the owners of Lots 236, 237 and 238 Cape View Lane, ie those lots which are directly across the road from the plaintiffs' land. In part, each of these parties were concerned that their views toward the ocean were adversely affected by the roof structure that had been constructed on the plaintiffs' house. I am satisfied that each of these owners had in contemplation that they might well build a two storey house to take the most advantage of the views which they had anticipated because of their location, the height restriction on the plaintiffs' land, and the height advantage of their land over that of the plaintiffs and of the other beachfront blocks in the subdivision. I am satisfied that in purchasing their land the owners of each of Lots 236, 237 and 238 saw it as a material consideration that there was a height restriction imposed on the land of the plaintiffs by the restrictive covenant and that this factor influenced each of those owners in their decision to purchase the respective lots which they purchased.

21 There was some contention about the evidence as to whether the owners of Lots 236, 237 and 238 could expect to enjoy a view of anything other than sky even from a second storey of a house constructed on their land. It was contended for the plaintiffs that there was no evidence of any reliable survey or testing to demonstrate that there would be views of ocean from a second storey on any of these lots even if the roofs of the houses on the ocean front blocks were restricted to the covenanted height. The plaintiffs contended that a video recording tendered for them demonstrated that no view could be expected. However this video was taken at about the eye level of a person standing on the lot. Without canvassing all the relevant evidence I would indicate that I accept the evidence of one of the objecting owners, that he had views which included ocean, over the covenanted height level of the plaintiffs' land when he stood on the roof of his four wheel drive vehicle as it was parked on his lot. I am also satisfied that even more extensive views of ocean above the covenanted height level of the plaintiff's land would be enjoyed from the second floor of a building constructed on any of Lots 236, 237 or 238 because the second floor would be higher than the top of his vehicle.

22 The evidence I have received satisfies me that the roof that has been constructed on the plaintiffs' lot does impede the view which would be enjoyed from a normal two storey home constructed on any one of Lots 236, 237 or 238 to a significantly greater degree than were the roof of the home on the plaintiffs' land constructed in compliance with the restrictive height covenant. I am further satisfied that by virtue of this impediment of the view there is an adverse effect to the enjoyment of their land which the owners of the three lots in question would otherwise have had. The three owners struck me as typical owners. They showed no unusual sensitivity about this issue. Their appreciation of the qualities of their lots and of the effect of the limitation of their views would, in my view, be typical of others who might in the future contemplate purchasing any one of the blocks from the present owners. On this basis I am satisfied that it is reasonable to conclude that there is a real potential for an adverse effect on the market value of the three lots in question by virtue of the non-compliance with the restrictive height covenant of the roof presently constructed by the plaintiffs. I was impressed with the likelihood that a reasonable buyer contemplating the purchase of any of the three lots would see the present covenanted height restriction on the plaintiffs' block, as a factor which added materially to the value of each of the three blocks being considered and that such a potential buyer would be likely to be more influenced to buy or to pay a higher price if the present height covenant were applicable to the plaintiffs' land, than if the height covenant which the plaintiffs seek to have substituted were applicable.

23 These considerations alone preclude me from being satisfied that the plaintiffs can rely on s 129C(1)(c). To raise the covenanted height so that the plaintiffs' roof complied with the covenant would result in real or appreciable injury at least to the owners of Lots 236, 237 and 238. On the analysis of McClelland CJ in Eq, the injury would be of two distinct kinds. It would be economic because of the effect on the value of their land, and it would be of an intangible kind because of the impairment of the views they would otherwise have been able to enjoy. In each case, in my view, the injury to these owners can be categorised as substantial ie real or appreciable. There may be other injury beyond these two kinds but there is no need to consider this.

24 I should record my view that the circumstances of the present case are materially different from those considered by Lavan J in Wall v Australian Real Estate Investment Company Ltd [1978] WAR 187.

25 As I have indicated the plaintiffs bare the onus of demonstrating that this application came within s 129C(1). For the reasons given already I have not been persuaded that this present application comes within either of the paragraphs relied on by the plaintiffs. In fact, on the present evidence, I am satisfied to the contrary ie that neither of the paragraphs relied on does apply.

26 There was other evidence led from other defendants in opposition to the present application which is capable of coming within the notion of substantial injury contemplated by s 129C(1)(c), but it is unnecessary for me to canvas that evidence in view of the clear position which, in my view, exists with respect to Lots 236, 237 and 238.

27 It was also necessary for the plaintiffs to persuade me as a matter of discretion that an order should be made. Not only have they not persuaded me that the application comes within s 129C(1) but they have also failed to persuade me that this would be an appropriate case for the exercise of discretion.

28 This is a quite recent subdivision so that there is no scope for any view that the generally pertaining circumstances have changed with time so as to lessen the significance or value of the height restriction. All persons who purchased land in the subdivision, especially and including the plaintiffs, appear to have been very well impressed with the existence of this covenant with respect to height on the ocean front lots. It is clear that many people purchased lots with knowledge of the height restriction, and of the other covenants which were imposed, and I am persuaded that in various ways, some financial, others less tangible but nevertheless material to those concerned, the existence of the height covenant played a part in their decision to purchase land in the subdivision and to do so at the prices they paid.

29 I readily accept that the plaintiffs did not set out to flout the height restriction and that the matter was drawn to the attention of their builder at the design stage and that the plaintiffs proceeded to enter into their contract to build their home on the understanding that the design agreed upon complied with the height restriction, although clearly enough they too failed to verify this before reaching final agreement to build. Nevertheless, it did not, and the non-compliance was substantial. The height itself is significant, some 1.2 metres, but this must also be viewed in conjunction with the significant extent of the roof which is constructed above the covenanted height line. The plaintiffs became aware that their design offended the height restriction at a point where some change of plan could have enabled the construction of a house which did not offend the covenanted height restriction. Instead, the plaintiffs chose to proceed with the construction, and to incur the very considerable additional cost of completing the house, in the knowledge that their house did not comply with the height restriction. This, in my view, detracts materially from the weight that otherwise would properly be attached to the financial expense and inconvenience which is now to be faced by the plaintiffs if the present structure has to be modified or pulled down so that there is no continuing infringement of the height restriction. In any event, on the evidence placed before me for the plaintiffs, it is clear that the financial cost will not fall upon the plaintiffs but on their builder. The plaintiffs of course will have inconvenience.

30 While one may readily sympathise with the plaintiffs who have been placed in this position primarily by the oversight of their builder, nevertheless, the circumstances are such that there is no justification for other land owners in the subdivision having to bear the consequence of the failure on the part of the plaintiffs and their builder to ensure compliance with the height restriction. This particular height covenant, along with the other covenants which were such a feature of the subdivision, were intended for the benefit of all. I am not at all persuaded that the covenant should be varied in the way proposed to overcome the present predicament facing the owners of one lot and their builder, to the disadvantage in various degrees of so many other owners in the subdivision.

31 For these reasons I was not persuaded on 23 July 1999 that the plaintiffs should succeed on this summons. It was then dismissed for these reasons which I now publish.