1. Planning permit application No. 0346/03 for two apartments as described in the accompanying plans, breaches the restrictive covenant in Instrument of Transfer No. 1375742.

2. The underground basement car park and the in-ground swimming pool do not breach or offend the restrictive covenant in Instrument of Transfer No. 1375742.

3. Provided that if necessary, a condition is imposed on any planning permit that may issue, that no building including outbuildings erected on the said land may have its roof or any of its exterior walls of iron or metal of any description or of any material which shall be an imitation or substitute thereof or therefore, there will be no breach of the restrictive covenant in Instrument of Transfer No. 1375742.

This application is listed for directions in the Practice Court of the Planning and Environment List on Friday, 12 March 2004, to consider the applicant's desire to amend the planning permit application to seek a variation to the restrictive covenant based upon the accompanying plans, and consequential directions as to re-advertising and re-listing a merits hearing that flow therefrom.

Mr C Canavan QC with Mr A Finanzio for the Nicholsons

1 I am asked to determine whether the construction of two apartments housing two separate households under one roof within one building, separated from each other horizontally (apt 1 is on the ground floor and apt 2 is on the 1st and 2nd floors), with a common access from the excavated underground basement car park but with two separate entrances at the natural ground floor level, together with a swimming pool for the ground floor apartment, breaches a restrictive covenant, which I will set out in its six respective parts:

that there may not be erected on the above-described land any church school hotel shop or building to be used for religious business educational or charitable purposes of any kind whatsoever or for public entertainment of any kind whatsoever nor any hoarding for advertisement

nor may there be erected or left standing on the said land more than one dwelling house or residential flats

and that all buildings and fences to be erected on the said land shall be constructed of good materials and that no building including outbuildings erected on the said land may have its roof or any of its exterior walls of iron or metal of any description or of any material which shall be an imitation or substitute thereof or therefor

and that any dwelling house to be erected on the said land shall have its front elevation to Verdant Avenue shewn on the said Plan of Subdivision

and that no sand-pit or quarry may be dug excavated or opened up on the said land and that no marl stone earth gravel clay or sand may be dug carried away or removed therefrom except for the purposes of laying the foundations of any buildings to be erected on the said land.

2 The three critical parts of the covenant which it is alleged will be breached are:

a. that part as to more than one dwelling house or residential flats;

b. that part as to the materials on the roof or exterior walls;

c. that part as to removal of marl stone earth gravel clay or sand except for the foundations of any buildings to be erected on the said land.

3 To short circuit one of the issues, the applicant acquiesced to a planning permit condition prohibiting the roof or exterior walls of the buildings to be from iron or metal of any description whatsoever or of any material which shall be an imitation or substitute thereof or therefor.

4 As to interpretation of covenants, all parties agreed with first principles as expressed in the Tonk, High Standard and Re Marshalls & Scott's Contract cases:

... [the] language of the covenant should be interpreted in a colloquial and non-technical sense. Ex parte High Standard Construction Ltd [1928] NSWStRp 107; (1928) 29 SR (NSW) 274, 278-9 Harvey CJ in Equity in the Supreme Court of New South Wales.

The richness of the English language is such that even slight changes in the wording used or even in the order in which words are used have a significant effect on the meaning of phrases which, at first glance, appear similar. Re Marshalls & Scott's Contract [1938] VicLawRp 22; [1938] VLR 98 @ 100 per Mann CJ.

It is established that in approaching such a task the object is to discover the intention of the parties as revealed by the language they have used in the document in question. Tonks v Tonks [2003] VSC 195 per Bongiorno J.

5 At the commencement of the hearing and pursuant to Clause 64 of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 (`VCAT Act'), Mr H McM Wright QC requested the Tribunal to amend the application for permit and the application for review by substituting the name of the landowner Brissac Investments PL for that name which had originally accompanied the application (Fruche PL).

6 There was no objection to the name substitution. Being also of the opinion that such substitution was appropriate, the Tribunal made the amendment in the manner requested.

Does the covenant permit two apartments or more than one household?

nor may there be erected or left standing on the said land more than one dwelling house or residential flats

8 Mr Canavan QC for the objector as well as the Responsible Authority construe the covenant as follows:

nor may there be erected or left standing on the said land more than one dwelling house

nor may there be erected or left standing on the said land residential flats

nor may there be erected or left standing on the said land residential flats or more than one dwelling house

a. ties the more than one to the dwelling house only and not to the residential flats (submitting the alternative involves poor use of the English language mixing the singular with the plural)

b. ties the residential flats to the first words of that phrase

c. characterises the reference to one dwelling house as dealing with use by a single household

d. adds strength to his interpretation by the reference to a front elevation of the dwelling house to Verdant Avenue and no further reference to the residential flats.

10 Mr Wright QC for the applicant countered with two different modes of construction:

a. that the engine room or operative part of that phrase are the words more than one, and that both the dwelling house and the residential flats are tied to those words, so that either one dwelling house or one residential flats are permitted as follows:

nor may there be erected or left standing on the said land more than one dwelling house

nor may there be erected or left standing on the said land more than one residential flats.

b. the reference to one dwelling house deals with a physical built form in a 'single building' covenant and not with use by a single household

c. the separate reference to 'residential use' in the fifth part of the covenant consistent with his 'single building' interpretation.

11 Dealing with the latter submission first, contrary to Mr Wright's argument that the word one dwelling house can comprise more than one household or unit of occupancy (Natraine Nominees PL v Patton & Robert Hodges Real Estate Agency PL [2000] VSC 303 and Kimber v Admans [1900] 1 Ch. 412 @ 413) I am of the opinion that it comprises one household, so that the two independent households contemplated in this application would not comply with this part of the covenant. Re Marshalls & Scott's Contract [1938] VicLawRp 22; [1938] VLR 98, ex p High Standard Constructions Limited [1928] NSWStRp 107; (1928) 29 SR (NSW) 274, Cobbold v Abraham [1933] ArgusLawRp 55; [1933] VLR 385 followed.

12 Natraine Nominees PL v Patton & Robert Hodges Real Estate Agency PL, used a different set of words 'brick building to be used exclusively as a residence or dwelling house only', was concerned with misrepresentation and trade practices law, and also indicated a struggle which Smith, J. had with his decision.

13 Nor do I think that a rearrangement of the built form to create one single front door lobby entry to the two apartments (instead of the two separate ground floor entries at present) would cure anything.

14 On Mr Canavan's construction that one dwelling house deals with use by a single household rather than built form, Mr Wright QC argued that Mr Canavan's construction would render the residential flats portion of the phrase surplusage, for if no more than one dwelling house (or one household) were permitted, that would in itself encompass residential flats, which, ipso facto, involve more than one household.

15 Mr Canavan justification the surplus words as a belt and braces approach, being that at that time English courts were deciding (see Kimber v Admans above) that a dwelling house could nevertheless encompass a number of different households or residential flats, depending on their method of construction (one access, one roof, one foyer) and it was the draftsperson's intention to prohibit this possibility also.

16 Applying Mr Wright QC's construction that dwelling house deals with a 'single building' covenant rather than use by a single household, there is no internal inconsistency in the covenant read as a whole, permitting either one household unit in one building or multiple household units in one building, for the mischief to be avoided is the construction of more than one building on the land.

17 At first blush, it is indeed possible to arrive at a conclusion that flats do not breach the covenant, and I have had the same struggle with this decision as Smith J. may have had in Natraine, for it is as arguable that the addition of the words 'residential flats' must be given some meaning, otherwise they are unnecessary surplusage, as it is to argue that their inclusion and effect is a belt and braces approach.

18 But I have come to the difficult conclusion that the preferred interpretation is that of Mr Canavan QC, since Mr Wright QC's interpretation leads to infelicitous or poor English, a matter which he acknowledged as far as sentence construction is concerned. As Mr Rintoul submitted, Mr Wright QC's construction requires the insertion of the words 'one building of' before the words 'residential flats'.

19 I am persuaded to this opinion, irrespective of the following extraneous material put to me by Mr Wright QC:

a. a subsequent amendment to the restrictive covenant pertaining to Lot 22 which added the words one set of before the words residential flats to clarify the intention of the draftspersons;

b. the fact that many other lots on the same side of Verdant Avenue built in the same period comprise flats as opposed to a single household detached dwellings

because the wording of covenants in later contracts of sale and transfers of land cannot influence this one, and any unlawful flats construction also cannot influence correct construction.

Does the covenant permit the removal of soil for a basement car park?

20 Mr Canavan QC's next submission was that a basement car park breached the covenant.

and that no sand-pit or quarry may be dug excavated or opened up on the said land and that no marl stone earth gravel clay or sand may be dug carried away or removed therefrom except for the purposes of laying the foundations of any buildings to be erected on the said land.

22 Lodged plans indicate that the basement car park lies between the foundations of the building to be erected on the said land.

23 I agree with Mr Wright QC's common sense approach that the car park, utilising land between the foundations as it were, is brought within the exception to this last phrase in the covenant and is automatically legitimised by them.

24 Secondly, I also agree with Wright QC that, on a literal interpretation, the covenant would allow excavation for a dwelling yet would prohibit excavation for the following activities:

25 Thirdly, in D'Amelio v Monash CC [2004] VCAT 60, Macnamara DP held that:

in applying the principles expounded by Biongiorno J in Tonks v Tonks one is forced to the conclusion that this covenant was not intended to prohibit the removal of materials such as earth, clay and marl which were removed solely for the ancillary purpose of constructing a dwelling house;

In my view however, consistent with the principles enunciated by Biongiorno J in Tonks v Tonks objectively considered that was not the intention of the covenant and it does not prohibit the removal of any of the materials referred to therein on an ancillary basis so solely in connection with the construction of a dwelling house or dwellings houses (@ para 18).

26 In so holding, Macnamara DP applied the colloquial and non-technical manner of interpretation favoured by e_x parte High Standard Construction Ltd_, and so do I. The car park is part and parcel of and ancillary to the building to be erected on the site and its foundations, and it would be contrary to common sense to consider it prohibited.

Does the covenant permit removal of soil for an in-ground swimming pool?

27 Mr Canavan QC's final submission was that an in-ground swimming pool breached the covenant.

and that no sand-pit or quarry may be dug excavated or opened up on the said land and that no marl stone earth gravel clay or sand may be dug carried away or removed therefrom except for the purposes of laying the foundations of any buildings to be erected on the said land.

29 Lodged plans indicate that ground floor Apartment 1 enjoys a swimming pool at its rear.

30 On 11 July 2002, in Petroulis v Moreland City Council unreported decision No. P602/2002, I ruled that an in-ground swimming pool did not breach the following covenant:

that there may not be erected or placed on the above described land more than one dwelling house no such house to be other than a new double fronted weatherboard brick stone concrete or other similar building ........... and that the said land may not be quarried on nor may any excavation be made thereon except as may be necessary for laying the foundations of any building to be erected thereon.

The swimming pool does not constitute use of the land for quarrying. It constitutes part and parcel of the use of the land for the dwelling house and a part and parcel of the dwelling house.

the words "or other similar building" relate to the dwelling house but not to appurtenant structures which are part and parcel of and ancillary to the primary or dominant dwelling house building. A swimming pool is such an ancillary or appurtenant structure. The fact that it is a separate structure does not meant that there is "more than one dwelling house" being erected on the land in breach of the restrictive covenant. Coridas v Monash CC [1998] V.C.A.T. 475 considered

31 I so held, applying the colloquial and non-technical manner of interpretation applied in e_x parte High Standard Construction Ltd_ without expressly referring to that authority, and I so hold again, applying the same principles as followed by Macnamara DP in D'Amelio v Monash CC [2004] VCAT 60, and I distinguish Isles v Glen Eira City Council unreported P3209/2002 dated 11 June 2003.

32 Mr Wright QC asked me not to dismiss this review if I held against him on the point of law, but to give him an opportunity to apply for an amendment to the permit application, to add 'variation to the restrictive covenant' based on the particular set of plans submitted, and to re-advertise so that the merits can still come before the Tribunal. I afford him this opportunity.