1. This was an application under section 77 of the Planning and Environment Act 1987 to review a decision by the City of Maroondah to refuse to grant a permit (in application No. M/2000/713) to vary a restrictive covenant contained in Instrument of Transfer No. 1136891 over Lot 11 on Plan of Subdivision No. 7683 (Certificate of Title Vol 4788 Folio 410) at 309 Maroondah Highway, Croydon.

2. The subject site is located on the north side of Maroondah Highway, west of Bonnie View Road. The site is regular in shape and has a frontage of 30.48 metres, a depth of 62.92 metres and an area of 1926 m² square metres. The site is currently occupied by a single detached dwelling.

3. The land is burdened by the following restrictive covenant:

"...... will not erect or cause to be erected on the said land hereby transferred more than one dwelling house ........"

4. The permit applicant proposed a variation of the covenant to provide for the erection of five dwellings in accordance with plans approved by the Council under a different planning permit, which dealt with Good Design Guide issues.

5. Pursuant to the Planning and Environment Act 1987, s.60(5) a most stringent bar is applied to the Responsible Authority (and on review to the Tribunal) before a restrictive covenant can be varied or removed.

The Responsible Authority must not grant a permit which allows the removal or variation of a restriction referred to in sub-section (4) unless it is satisfied that:

(a) the owner of any land benefited by the restriction (other than an owner who, before or after the making of the application for the permit but not more than three months before its making, has consented in writing to the grant of a permit) 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

(b) if the owner has objected to the grant of the permit, the objection is vexatious or not made in good faith.

6. It is patent that there are completely different considerations for the Responsible Authority to take into account when considering variations of a restrictive covenant, then when considering unit developments under the Good Design Guide or ResCode legislative provisions.

7. The original Plan of Subdivision from which the subject land was transferred contained 52 lots, of which 31 are burdened by the restrictive covenant. Many of those burdened by the covenant front the busy Maroondah Highway, and abut commercial land uses. Location along a busy highway and abutting commercial uses is usually a good reason for permitting multi-unit development. The five unit planning permit is entirely reasonable in this context, and the only thing preventing its fruition is the restrictive covenant.

8. Interestingly enough, of the 21 lots which are benefited, but not burdened, by the covenant, many of them lie in the less intensive "hinterland" of the subdivision, namely well away from the Maroondah Highway frontage, and have been developed with three, four or five units per block respectively.

9. The land uses within the subject subdivision fronting Maroondah Highway comprise a reception rooms, three detached dwellings, a car importer, two dual occupancies, four detached dwellings, a car detailing business and the Victorian House Motel.

10. Further, there are a number of anomalies caused by the peppering of lots which are burdened by the covenant among other lots which are benefited, but not burdened. For example, four lots prohibited from multi-unit development front Maroondah Highway, but inner lots that are more protected from commercial development and traffic, have no bar against multi-units. Secondly, the covenant permits businesses to develop on the lot (it is only more than one dwelling which is prohibited). Therefore businesses have been able to establish along Maroondah Highway, for example, the car detailing business abutting the subject land.

11. The objectors were very passionate about maintaining the rights preserved to them by the restrictive covenant, even though some of them lived in units themselves. The objectors remarked that the fact that 16 of the original benefiting lots have been further developed or subdivided with multi units, its not surprising, given that there is no bar against them doing so. They are simply not burdened by a similar restrictive covenant. They also maintain that the mix of non-residential uses along Maroondah Highway is also not surprising, given that there is no bar against that by the same restrictive covenant.

12. They base their opposition to the covenant variation on the grounds of neighbourhood character and precedent.

13. Apropos neighbourhood character, they say the restrictive covenant has a real and practical benefit because it maintains a subdivision with a strong mix of single and multi-dwellings on large allotments throughout. Otherwise they say the pressure for multi-units would be unstoppable. It is the covenant that maintains that mixture. The neighbourhood is one of large blocks with well treed frontages and well established side and rear gardens and it is that low density garden character which gives the residents and objectors their present amenity. They maintain that other multi-unit development sites remove and do not replace, canopy trees or the feeling of spaciousness which is preserved by the restrictive covenant.

14. The objectors maintain that any variation in this case would lead to the creation of a bad precedent, because of the very strong pressure for variation of the covenant on other blocks in the subdivision. The objectors presented me with a time line created on an Excel Spreadsheet, which showed their continued participation and dedication in opposing both Supreme Court proceedings issued to remove a restrictive covenant in the Pivotel case (Re Pivotel Pty Ltd No. 5523/1999, Supreme Court, 23 June 2000), as well as in the present case where they contested an extension of time application, resulting in this fresh permit application. All in all, they have been continuously opposing variations to restrictive covenants since November 1997 to the present date.

15. The Pivotel case is an interesting one. It started off as Carson Simpson Pty Ltd v Maroondah CC [1999] VCAT 462 and a Council refusal to vary a covenant which had already been varied once before on Lot 38 on Plan of Subdivision 7683, Nos 15-17 Bonne View Road, Croydon. In the Pivotel case a variation to restrictive covenant had been permitted which allowed four units to be built on Lot 38. The developer built the four units, but built all four of them on the front half of the land, leaving the back half vacant. The developer then applied to vary the covenant once again to allow a further six units to be developed to the rear of lot 38. A town planning permit had been granted for the additional six units on the site which would have amounted to ten in total. In a Supreme Court hearing before McDonald J. on 23 June 2000, His Honour refused to further vary the restrictive covenant and upheld the covenant. In the Pivotel case that effectively means that the four units were squashed to the front of the land with the land left vacant to the rear now thwarted or stymied for development.

16. The objectors point to lots 8, 11, 37 and 38, all of which have planning permits for multi-units and say that approval on this subject land will put unbearable pressure on future decision makers. They argue that this precedent will create a bad precedent because the subdivision will lose its mix that it currently contains.

17. It has been said, in Wilde v City of Moonee Valley, McKay & Ors [1997] 18 AATR 145, Grisby & Anor v City of Greater Geelong, Crosbie & Ors 21 AATR 11, and Scuderi v City of Hume ( 1998) 22 AATR 261 that, although the s.60(5) bar is not a complete bar, it is a very high one sufficient to prevent the granting of a permit in very many situations, probably most situations in which variation is sought.

18. It is impossible for me to be satisfied that the objections lodged have been made vexatiously or not in good faith. To the contrary, the continuous dedication of the objectors before both the Tribunal and the Supreme Court proves their genuine opposition to the covenant variation.

19. It is also impossible for me to be satisfied that these same objectors will be unlikely to suffer any detriment of any kind, as they genuinely perceive (and are supported by McDonald, J. in this respect) a change to their neighbourhood character as a result of this intensification of land use.

20. It is worth extracting from Ambrose H oldings PL v Bor oondara CC [1999] VCAT 185 which recognised the fear of precedent if a covenant is varied:

"Mr Montebello submitted that to permit higher density population in the area would be contrary to the purpose of the covenant and a detriment to those entitled to benefit from it. He also supported the Objectors' view that a variation of the covenant in this application would diminish the integrity of it, making it easier for a variation or removal the next time someone else applies in regard to another lot in the same subdivision."

He referred to the Tribunal's decision in M Grisby and anor - v - City of Greater Geelong and anor (1997) 21 AATR 11 where the Tribunal said (p.20):

"To remove a restrictive covenant entails the extinction of a proprietary interest. This for reasons already given is not in itself a detriment, however the Tribunal or the responsible authority must be satisfied that the removal would be "unlikely" to result in detriment or a perceived detriment. To move from a situation where one has the advantage of a legally enforceable restriction to maintain what is perceived to be a higher residential amenity viz. without medium density development, to one where that restriction is removed and the planning policies favouring medium density development apply with their full vigour, constitutes at the very least a perceived detriment. Even if we were wrong in this, since medium density residential development is so prevalent and is now favoured by planning policy it would be impossible for the responsible authority or the Tribunal to come to the view that removal of a single dwelling covenant would be unlikely to lead to at least a perceived detriment to the owner of the land having the benefit of the covenant.".

Mr Montebello submitted that the covenant could not, in the circumstances, be considered to be a "dead wood" covenant, in that it continued to serve the purpose for which it was imposed that is, to protect and retain the existing character of the neighbourhood which it largely brought about....................................

The notion that a precedent created by an order in this case might lead to applications of a similar nature in regard to this subdivision is not "remote" or fanciful by any means. It is very real."

21. In summary, I have been unable to find that the owners of land benefitted by the covenant will be unlikely to suffer any detriment of any kind. Accordingly the section operates to prevent the issue of a permit. The Tribunal will disallow the application for review and direct that no permission issue to vary the covenant.

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