1. Mr Rantino clarified at the hearing that Council does not contest the basic position that no beneficiaries exist today. Rather, Council considers that more as a matter of 'orderly planning' and a sensible outcome that the Covenant should be varied rather than removed.
2. With respect to Mr Hiscock, he submitted in a passing manner that he considers himself a beneficiary of the Covenant. He supported Council's position that there should be no full removal of the Covenant and expressed concern that (if such full removal occurred) there could be inappropriate changes sought to the external materials of the proposed 733-735 five storey building that has already been approved so as to be compliant with the Covenant.

1. By contrast, Mr Munt for the Grace Park Residents Association contested the position taken by Council/the applicant on this issue and submitted that (analysed carefully) it is possible to ascertain the beneficiaries of the Covenant. In particular, he focused on:
   • The role of the words '...and their transferees' which I have highlighted above, in the text from the Covenant.
   • The fact that the final words in the Covenant provide that '...and it is intended that this covenant....shall run with the land'.
2. Mr Munt urged the Tribunal to find that it was intended through the use of the words 'and their transferees' that the Covenant would 'run with the land'. Following this approach, the relevant land benefitting from the Covenant is the residual land in this area owned by the original vendors, which still formed part of their main landholding as at the time the Covenant was created on 11 October 1909.
3. Some key cases Mr Munt relied upon in advancing this line of argument were as follows:
   • In relation to cases involving jurisdictions other than Victoria, the cases of Baraman Sales Pty Ltd v Goodman Fielder Mills Ltd [2001] FCA 1672 and Midland Brick Company Pty Ltd v Welsh & Anor [2006] WASC 122.
   • With respect to Victorian cases, the two Prowse cases ie Prowse v Johnstone [2012] VSC 4 decided by Justice Cavanagh and Prowse v Johnstone [2015] VSC 621 decided by Justice Ginnane.
4. With respect to the 2015 Prowse decision, Mr Munt specifically relied on Justice Ginnane stating at [155] that:

The decision in Re Dennerstein, upon which the plaintiff relied, was not relevant because it dealt with the question of whether a building scheme existed.

1. Mr Munt submitted that these cases support the proposition that in interpreting whether or not a covenant 'runs with the land', it is appropriate for the decision maker to look at the context involved. He relied upon Justice Ginnane's statement in the second Prowse case at [158] that:

The intent of the parties to the covenant is to be objectively ascertained. The words of a restrictive covenant must always be construed in their context and upon a reading of the whole of the instrument.

1. In summary then, the Residents Association submitted that if one properly reads the whole of the Covenant including the words 'and their transferees' and '...and it is intended that this covenant....shall run with the land', it is clear enough that the intent was for the Covenant to 'run with the land'.

1. On the one hand, I acknowledge that there are several factors at work that create an arguable case that the Covenant does not run with the land.
2. First and foremost, all parties agree that the text from the Covenant does not expressly identify the benefitting land. This is in the situation where the abovementioned Bradbrook and Neave academic text and various cases emphasise the importance of a restrictive covenant overtly identifying the benefitted land.
3. Second, I acknowledge that Council has taken the view that this is merely a personal Covenant and that Senior Member Rickards (albeit it appears more in the nature of an obiter dictum comment) has previously expressed the same view.
4. Third, in cases involving some degree of similarity, the previous Tribunal decisions of Costa, Herzog and Poulakis all involved very senior legal members of the Tribunal finding that (where the benefitting land had not been expressly identified) the covenants involved did not run with the land.
5. With respect to the wide-ranging case law cited by Mr Munt, a considerable extent of it involves older English case law, which on common sense should be approached with real caution in terms of 'weight'. In addition, I consider the following three cases emphasised by Mr Munt to largely turn on their own facts, for the reasons I have set out below:
   • The Baramon Sales Pty Ltd decision was a 2001 Federal Court decision involving the very different facts of a contract dispute, where there was a high level of surrounding correspondence which the court had regard to. Here the Covenant was created in 1909 and the task is simply to construe its terms appropriately and correctly.
   • The Midland Brick Company Pty Ltd decision is a 2006 decision by the Supreme Court of Western Australia. It similarly involved a dispute regarding the terms of a contract and the associated conduct and correspondence of the parties, rather than the interpretation of an older registered restrictive covenant in Victoria.
   • The 2011 Prowse decision by Justice Cavanagh seems of little direct relevance to the dispute before me, since that case more involved a dispute about the interpretation of other aspects of the covenant, rather than whether or not the covenant 'ran with the land'.
6. However, I accept that the 2015 Prowse decision by Justice Ginnane is central to my discretion, being a recent Victorian Supreme Court decision with very comparable facts. In this case a landowner was similarly seeking a ruling that a 1909 restrictive covenant affecting her property in Malvern was no longer of any effect. For our purposes, a less relevant issue arose as to whether or not certain handwritten amendments to the relevant covenant carried out in 1912 were validly made. More relevantly, the owner argued that if even if these amendments were valid, the covenant had not run with the land since the text of the covenant did not overtly identify the benefitted land. In the final result, Justice Ginnane found the amendments to have been validly done and that the covenant did run with the land.
7. Apart from it being a recent Victorian Supreme Court decision, I accept that this 2015 Prowse decision is an extremely strong precedent case for the Residents Association, given that Justice Ginnane:
   • Found that the subject land was one of 63 lots subdivided out of the parent title, ie the relevant title history was established and this made it easier to infer an intention by the vendor that its residual landholding as at the day of sale would have the benefit of the covenant.
   • At [155] sees the Re Dennerstein case as irrelevant, because that case '...dealt with the question of whether a building scheme existed'.
   • At [159] places importance on the use of the words 'transferees' after the description of the vendor.
   • At [159] also sees as important the fact that the final words of the covenant were 'and run with the land'.
8. If one takes these factors and applies them to the key cases relied upon by the applicant:
   • I agree that it is open to debate whether Re Dennerstein sets out broad principles going beyond the operation of building schemes, as the language of that decision is very closely tied to 'building scheme' issues rather than being wide-ranging (see pages 8 and 9 in particular).
   • The text in the relevant covenants in both the Poulakis and the Costa decisions make no reference to an intent that it 'run with the land'.
   • Where the covenant text in the Herzog decision likewise finishes with the words '...and run with the land', I acknowledge that DP Dwyer still found the covenant to be merely personal. However a key part of him making this finding was the failure of that text to consistently use the words 'and transferees' at the critical points of the text.
9. Although it is an older case of less relevance now, similarly there is no use of the words 'run with the land' in the relevant covenant before the Tribunal in Afifoglou v Stonnington CC (VCAT Ref. P188/2003).
10. In summary, I find that the Covenant here does 'run with the land' and that it is probable that there are current beneficiary neighbours (or at the least this should have been properly investigated as part of this proposal). I make this finding on the strength of:
    • It being clear enough that the Lots 79 and 80 being sold in 1909 were merely a small part of a much larger residual landholding of Kate Lynch and James Byrne in this area at that time. This provides some degree of counter-balance to the fact that the Covenant does not expressly identify the benefitting land. With a larger residual landholding by the vendor in this area, it is more straightforward to infer an intention by the vendors that this residual landholding as at the day of sale in 1909 would benefit from the Covenant.
    • What I accept are the very similar circumstances before Justice Ginnane in the 2015 Prowse decision vis-vis those before me, where this is a recent Victorian Supreme Court decision.
    • Neither the earlier legal advice to Council nor SM Rickards having any exposure to the 2015 Prowse decision, as that decision came later in time.
    • The precedent value of the Re Dennerstein and Poulakis/Costa decisions being weakened by the differences I have highlighted two paragraphs above.
    • The possibility that DP Dwyer may have found that the covenant in Herzog ran with the land if the key words 'and transferees' had been used at all critical points of the text of that covenant. In our situation, it is critical that the words 'and their transferees' are used after the description of the vendors, as part of the most relevant text in the middle section of the quoted text which I have set out above.
    • What I see as the game-changing role of the words '...and shall run with the land' at the end of the Covenant. The use of the words 'and shall run with the land' is in my view a strong indication of the more expansive intent of the draftsperson of the Covenant. I can indicate that but for these words, I would have accepted that the Covenant is personal in nature.
11. Having found that the Covenant does run with the land, it follows that:
    • I would expect there to be a substantial number of beneficiary properties in this area (or at least this should have been properly investigated).
    • It seems probable that the public notification of the proposal should have included formal notification of the beneficiaries (or at least this should have been properly investigated).
    • It also seems probable that any proposed variation or removal of the Covenant should have been assessed by Council against the section 60(5) criteria.
12. I consider these unresolved procedures and issues to be fatal to the proposed full removal of the Covenant and hence I have made orders that the proposal is refused and there shall be no amendment to the Permit.

APPLICATION OF CLAUSE 52.02 OF THE PLANNING SCHEME

1. It is common ground that even in the theoretical absence of any current beneficiaries, the variation or removal of a restrictive covenant still requires either a Supreme Court order or the granting of a planning permit pursuant to clause 52.02 of the Planning Scheme. Hence even Ms Cincotta acknowledged that the Tribunal must consider and apply the clause 52.02 provisions.
2. The stated purpose of clause 52.02 is:

To enable the removal and variation of an easement or restrictions to enable a use or development that complies with the planning scheme after the interests of affected people are considered.

1. The 'Decision Guidelines' for clause 52.02 are that:

Before deciding upon an application, in addition to the decision guidelines in clause 65, the responsible authority must consider the interests of affected people.

1. At a broader level, the generic clause 65 decision guidelines set out various common-sense considerations for planning decision makers in Victoria.
2. Whilst endorsing the position that there are no longer any beneficiaries of the Covenant, Council argued that there was still a significant inherent planning discretion at work under clause 52.02 of the Planning Scheme. Following this approach, it would be over-reaching and inappropriate on the planning merits for the Covenant to be completely removed. Instead the preamble approved by Council in the Permit involves a compromise whereby the scope of the Covenant is narrowed, noting that an updated proposed version of the preamble wording was circulated by Council after the hearing. Mr Hiscock supported this position but the applicant argued that it was unreasonable and should be rejected by the Tribunal.

1. Also relevant here is Hill v Campaspe SC (Red Dot) [2011] VCAT 949, being a decision of Deputy President Gibson. This case involved a flood-prone lot in Echuca where a restrictive covenant prohibited any dwelling being built on that lot. The owners had apparently bought the lot knowing of this restriction but hoping that it could be removed. With this aim, they sought a variation of the covenant, which would simply allow the construction of the particular two storey dwelling for which plans had been put forward. This was opposed by many nearby neighbours, of which two were beneficiaries of the covenant.
2. The owners sought procedural orders that no objecting neighbours other than the two beneficiary neighbours had standing to object to the proposed variation of the covenant. DP Gibson considered the scope of the text of clause 52.02 and rejected this narrow 'standing' submission. Rather, she held that the reference to 'the interests of affected persons' in the decision guideline to clause 52.02 refers to both beneficiaries of the covenant and also those affected neighbours who wish to raise ordinary planning merits concerns. However, at [52] DP Gibson acknowledges that how much weight should be given to such ordinary objections is a different issue to be resolved.
3. Taking this broader position a step further, DP Gibson at [150-164] considered whether there is a general discretion for the planning decision maker to refuse a clause 52.02 application, even if there were no fatal section 60(5) considerations. In these paragraphs the Deputy President discussed the low-density setting for the proposed dwelling, the requirement for native vegetation to be removed, the flood-prone nature of the location and the fact that the proposed double storey dwelling would sit close to the nearest affected neighbours. At [164] DP Gibson concludes that were it necessary for her to make a formal decision about it, she would have refused to exercise the general discretion under clause 52.02 to approve the proposal.

1. I have already explained further above why I consider the proposal to be fatally flawed, in the situation where:
   • The applicant asserts that this was merely a personal covenant, but where I have found that the Covenant does 'run with the land'.
   • The processing of the proposal did not include any notification of the potential beneficiaries of the Covenant or assessing of the proposal against the section 60(5) criteria.
2. As this first aspect of my findings constitutes a 'knock out blow' for the proposal, I am not required to make any formal finding regarding this 'planning merits' aspect. However, to provide the parties with an informal response, my initial impressions are as follows.
3. I am struggling to see proposal before me as throwing up the type of fundamental planning merits problems which DP Gibson identified in Hill v Campaspe SC.
4. I acknowledge that Council can legitimately query whether the Covenant needs to be fully removed to achieve an acceptable planning outcome, as opposed to being narrowed down in the manner suggested by Council with its proposed variation.
5. But this needs to be counter-balanced against the fact that the subject land's main frontage is to a vibrant and more robust main road in the form of Glenferrie Road, rather than being located in a more sensitive and homogeneous residential hinterland location. If in theory the Covenant was removed and the owner wished to re-visit the choice of materials for the exterior of the proposed new building on the subject land, the owner would still have to seek the necessary:
   • heritage approval for such changes from Heritage Victoria, as such changes affect the No. 735 property; and
   • planning approval from Council.
6. This point is reinforced by the relevant comments (along the same lines) of the Delegate Planner at page 2 of the Delegate Report. In supporting the full removal of the Covenant, this report states at page 2 that:

Any future application to amend either the 2011 permit or the 2014 permit would require separate planning approval and would be assessed against the requirement of Council's Heritage Policy. This means that officers would take into consideration the existing streetscape character and heritage significance, including building materials.

1. For the reasons given above, I have affirmed Council's Notice of Refusal and made orders that there be no modification to the conditions or the preamble of the Permit.

[1] The submissions and evidence of the parties, any supporting exhibits given at the hearing, and the statements of grounds filed; have all been considered in the determination of the proceeding. In accordance with the practice of the Tribunal, not all of this material will be cited or referred to in these reasons.