What is the effect of the covenant affecting 33 Park Street?

1. Nos. 33 Park Street is described in Certificate of Title Volume 09506 Folio 012 and also in Plan of consolidation 154760. The land is affected by a restrictive covenant that limits the number of dwellings that can be constructed on the land to only one dwelling, requires access to the land to be from Park Street, and restricts excavation of soil and its removal from the land.
2. At the hearing on 14 May 2010, the effect of the restrictive covenant was extensively canvassed. Mr Bennett put that the development complied with the covenant. Mr Tobin put that the proposed development could not be approved as it was contrary to the covenant. In particular, Mr Tobin urged the Tribunal to find that parts of the dwellings to be located on No. 31 Park Street extend to No. 33 Park Street, contrary to the requirement that only one dwelling can be developed on that land. Mr Tobin further put that excavations required to provide driveways to the basement garages for dwellings three and four also contravened the covenant. Mr Bennett tabled a legal opinion from Mr Townsend regarding the part of the covenant constraining development to only one dwelling. It did not address the matter of excavations. Mr Bennett sought the opportunity to obtain further legal advice.
3. I ordered that further legal opinion could be obtained on the matter of whether the excavations for the driveways would be consistent with the covenant. Such advice was to be provided to the Tribunal by 11 June 2010, and that opinion was to be circulated all parties.
4. I also ordered that I would request a legal member to rule on the effect of the restrictive covenant.
5. Member Philip Martin was appointed as the legal member dealing with the issue. Member Martin has found that the Tribunal has no jurisdiction to deal with this Application for Review as the proposal breaches the relevant restrictive covenant. His reasons are contained at Appendix A.

Would the proposal comply with the planning policy framework?

1. Even if Member Martin is held to have erred in his conclusion, I would have refused the proposal as being inconsistent with the planning policy framework and its failure to satisfactorily address the objectives and standards of clause 55.
2. In respect of compliance with the planning policy framework, I find that the following clauses are relevant to this matter:

1. The State Planning Policy Framework provides general support for the development of a more diverse housing stock in locations where additional households can enjoy convenient access to established community infrastructure and physical infrastructure. Increasing the provision of housing in established areas can have the community benefits of making more efficient use of the infrastructure invested in established areas. It can enable an increasing number of smaller households to access housing that best meets their housing needs. Providing an increasing number of smaller dwellings in established areas may also positively contribute to overall housing affordability.
2. Increasing the diversity of the housing stock in an established area needs to be undertaken in a sensitive manner. Replacing existing detached dwellings with several dwellings on a lot can generate anxiety and concern from people in the local community. Planning policies encourage new medium density development to be respectful of the character of the local neighbourhood. New housing should fit into the local area and be a comfortable fit in the established setting. The general setting for this development comprises single dwellings on lots, many of which are single storey. There are some two storey dwellings in the local area, but multi unit developments are rare in this part of Inverloch. Most of the dwellings are modest buildings on large lots, with extensive landscaping and gardens.
3. Inverloch is identified in clause 21.02 as one of the towns in Bass Coast Shire that will accommodate population growth, including a variety of dwelling types to meet changing housing needs for an older population. Local planning policies (clause 21.06) seek to direct medium density housing development into areas in proximity to existing commercial centres. Increased housing densities will be encouraged within 200 metres of the main commercial centre. Development in locations in the order of 800 metres from a commercial centre would be encouraged to have a (lesser) density of one dwelling per 450 square metres of site area. New development is also encouraged to be designed and sited to complement the specific context of land form, vegetation and urban character.
4. I refer to the development density policy at clause 21.06 with great caution. There is a temptation to apply a simple density calculation as a blunt design test rather than consider the entirety of the planning policy framework and the design objectives and standards of clause 55. The proper test is not whether the development complies with a somewhat arbitrary density calculation, but whether the development fits into the existing neighbourhood character. It is also important to consider whether opportunities are being made available to provide a more diverse housing stock close to commercial centres and existing infrastructure. The density calculation should be used only as a guide to neighbourhood character.
5. In this case, the prevailing neighbourhood character is described in the Inverloch framework plan as being an environmental residential area with lower density, spacious and landscaped, comprising largely single dwellings with low site coverage. Development in this precinct should generally be of lower intensity with a building footprint not exceeding 30 percent of the lot and 40 percent of the lot retained as lawn or landscaping. The first floor should be a lesser footprint than the ground floor. Fencing is to be minimised, and new vegetation should be planted. The Inverloch Framework Plan is included as a reference document at clause 21.12 of the Planning Scheme.
6. Mr Tobin advised that a current review of the Inverloch framework plan has confirmed that this area would continue to be included in an environmental residential area consistent with the current reference document.
7. I am satisfied that the proposed development would be inconsistent with the prevailing neighbourhood character by attempting to place five dwellings on one lot. The site coverage and building mass would appear to be significantly more dense, with much greater visual bulk and lesser landscaping than the prevailing character of the neighbourhood.
8. I note that the entirety of the planning policy framework strongly encourages opportunities for a more diverse housing stock. If development opportunities are to be constrained in a neighbourhood as it has a special character that should be retained, then opportunities should be provided elsewhere. The Inverloch framework plan and local planning policies identify opportunities in closer proximity to the Inverloch town centre (see clause 21.10). I note from my visit to the town that these opportunities are being taken up. With this balance in mind, I am satisfied that the character of neighbourhood within which this review site is located should be retained. A development comprising fewer dwellings would be a more respectful outcome and would more comfortably fit into the neighbourhood. I am less concerned with double storey dwellings as I consider that there are enough double storey dwellings in the neighbourhood to consider this to be a part of the prevailing built form. The proposed development fails to fit in because it proposes an excessive amount of built form on the site and insufficient opportunities for landscaping and screening of the new built form.

1. Mr Tobin, drawing on Council's planning officer assessment, identified a number of areas of non-compliance with the objectives or standards of clause 55 or local policy. The areas of non-compliance include:
   • Setback to Park Street should be increased to reflect the large variance between the dwellings at 33 and 29 Park Street.
   • Site coverage is excessive if the development is considered to be five dwellings on one lot.
   • Building height at 8.1 metres exceeds the maximum height under the Inverloch Framework Plan.
   • Dwellings one and two have south facing living areas.
   • The private open space areas for dwellings four and five have inadequate access.
   • There are limited landscaping opportunities for dwellings one and two.
   • The setbacks and extended building bulk on the eastern boundary do not respect the prevailing character of the area.
   • There is some overlooking capacity for the bedrooms.
   • Living room windows to dwellings one and two may not achieve adequate natural light.
   • The private open space for dwellings one and two would be overshadowed for most of each day.
2. I would usually have limited concern with non-compliance with a few of the standards in Clause 55, provided that I was satisfied that the objectives are being met. However, in this case, I concur with Council that the extent of the non-compliance indicates that too much development is being imposed on one lot. This proposed development would not be a comfortable fit into this neighbourhood. It presents too much bulk and built form into an area characterised by more generous setbacks and landscaping. The future residents of dwellings one and two in particular would not enjoy a level of internal amenity that should be provided in a new residential development. In this case, less is better, and I encourage the owners and designers to reconsider the proposal with fewer dwellings.

1. The Tribunal finds that it has no jurisdiction to consider the proposal, and hence this Application for Review is refused. No permit is to issue.
2. Had the Tribunal had jurisdiction in this matter, it would have refused the planning application as an overdevelopment of the site that is contrary to the planning policy framework and the character of the neighbourhood.

LEGAL RULING BY MEMBER MARTIN ON POINT OF LAW ARISING IN THIS PROCEEDING P2615/2009.**

1. This proceeding P2615/2009 involves a multi-unit proposal in relation to the land at 31-33 Park Street in Inverloch. This is a "failure to decide" review proceeding before the Tribunal pursuant to Section 79 of the Planning and Environment Act 1987. This is in the context of there being objections to the proposal raised by certain objectors.
2. The hearing of this matter came before Member Geoff Rundell on 14 May 2010. In the course of the hearing, it became apparent to Member Rundell that there was a question of law requiring resolution, in terms of whether or not the proposal would breach the restrictive covenant which affects one of the two titles in question ie the title to 33 Park Street.
3. To deal with the situation, on 20 May 2010 Deputy President Helen Gibson as Head of the Planning and Environment List (pursuant to a Instrument of Delegation dated 17 October 2005) appointed myself as a Legal Member to deal with this question of law pursuant to Clause 66(1)(b) of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998.

1. As mentioned, the subject land for this proceeding involves two titles, being the lots at 31 and 33 Park Street Inverloch. Although the 31 Park Street property is not affected by any restrictive covenant, the 33 Park Street property is.
2. Relevantly for our purposes and with what I see as the key text highlighted by myself, the covenant provides that the covenantee:

... will not at any time hereafter excavate carry away or remove or permit to be excavated carried away or removed any earth clay stone gravel or sand from the said land hereby transferred except for the purpose of excavating for the foundations of any building to be erected thereon. Not more than one dwelling house and outhouses shall be erected thereon on either of the said lots. As to Lot 44 such dwelling house not to be fronted otherwise than to Bank Street and [a]s to Lot 45 such dwelling house not to be fronted otherwise than to Bank Street shewn on said Plan of Subdivision and further that she will not use or permit or allow the said land to be used for the manufacture or winning of brick tiles or pottery ware ...

1. It is common ground that pursuant to Clause 61(4) of the Planning and Environment Act 1987, if the grant of a permit would authorise anything that would result in a breach of a restrictive covenant, the decision maker must refuse to grant that permit:

(4) If the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, the responsible authority must refuse to grant the permit unless a permit has been issued, or a decision made to grant a permit, to allow the removal or variation of the covenant.

1. At a glance and in very simple terms, the proposal involves retaining the existing dwelling on the 33 Park Street property, and also building five new dwellings on the 31 Park Street property (ie. the new dwelling 1 and 2 oriented towards Park Street, together with the new dwelling 3, 4 and 5 which have vehicle access across the rear of the No.33 property to Cashin Street).
2. However when the situation is considered in more detail, the dispute which has arisen is whether in fact the restrictive covenant affecting the No. 33 property would be breached by the proposal involving:
   • the use of the middle and rear sections of the No. 33 property as driveway vehicle access for the proposed new dwellings 3-5;
   • the proposed deck and associated awning of the new dwelling 1 extending into the No.33 property;
   • the above mentioned vehicle access involving a degree of excavation and the construction of retaining walls on the No. 33 land; and
   • the new dwellings 3 and 4 having a front porch which is accessed via new steps to be developed the closest edge of the No.33 property.

Submissions by Council why the covenant is allegedly breached by building encroachment

1. I have reviewed the 17 page written submission provided to the Tribunal at the 14 May 2010 hearing, which was prepared and presented by Mr Greg Tobin of Harwood Andrews lawyers. However,most of this written submission touches on either background matters or other conventional planning merits issues, which are not relevant for my purposes. Instead, the only text from that 17 page submission which is directly relevant is found at paragraph 62 to 71, which read as follows:

1. The restrictive covenant is registered on the title to 33 Park Street. The current design response has been fashioned as an attempt to avoid trespass onto the covenanted land. In the Council's submission this has failed.
2. There is no application on foot for a planning permit pursuant to Clause 52.02 of the Planning Scheme. It is understood that there is no application to the Supreme Court nor request for an amendment to the Planning Scheme those being the other methods by which a restrictive covenant may be varied or removed. In these circumstances the application will succeed or fail dependent on the interpretation of the covenant.
3. It has variously been held that in construing a covenant `the words shall be given their meaning in the common vernacular use and not regarded as terms of art to be given some special meaning' (Natraine Nominees Pty Ltd v Patton [2000] VSC 303).
4. In this case the covenant contains the following limitations:

65.1. Not more than one dwelling house and outhouses shall be erected on the said lots.

65.3. The owner will not at any time hereafter excavate carry away or remove or permit to be excavated carried away or removed any earth, clay stone gravel etc....'except for the purpose of excavating for the foundations of any building to be erected thereon'.

1. In this case the Council asserts that Houses 1, 3, 4 and 5 all contravene the restrictive covenant.
2. They do so in the following ways:

67.1. The basement plans clearly depict a 1:5 slope in the driveway to each of Houses 3, 4. This is clearly excavation and not for the purpose of a dwelling on burdened lot (although as noted below the Council asserts that each four of the proposes buildings in fact breach the lot boundary).

67.2. The retaining walls supporting the basement driveway are part of the structural support required to found the buildings. Without these connected walls the building would not be sound.

67.3. The entry steps of dwellings 3, 4, and 5 all rely upon the burdened land

67.4. The decking for House 1 is attached and part of the structure. It clearly extends over the burdened land.

67.5. There is a canopy that extends over part of the deck on House 1.

1. It is submitted that in construing whether features of the houses in fact form part of the structure of each house, it is appropriate to ask, would an ordinary person consider those structures to be part of the house?
2. In Council's submission the answer must be emphatically yes.
3. The operation of the restrictive covenant is to deprive the Tribunal of any discretion to order that a permit issue in respect of the application. Section 61(4) of the Planning and Environment Act 1987 provides:

If the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, the responsible authority must refuse to grant the permit unless a permit has been issued, or a decision made to grant a permit, to allow the removal or variation of the covenant.

1. It is submitted that Application must be refused on this ground alone, if no other.

Submissions of Applicant why the covenant allegedly will not be breached by any building encroachment

1. It is easiest here for me to cross-reference to the previous legal opinion obtained by the Applicant from an experienced planning barrister, Mr Matthew Townsend. I have included a copy of this six page written opinion as an annexure to this Appendix.
2. While I have no problem with much of the points and commentary in this opinion, it needs to be said that most of this discussion more goes to the general principles of interpretation for this type of restrictive covenant.
3. The two key paragraphs in Mr Townsend's legal opinion which I focused on paragraphs 12 and 13, which read as follows:

The grammatical and ordinary sense of the expression "dwelling house" in this context refers to the structure of the house itself and not the ancillary facilities that comprise or are contained within its curtilage.

Further, it is significant that a restriction in the Covenant is placed on the use of the land for the "manufacture or winning of bricks tiles or pottery ware" yet the restriction only extends to the development or erection of the dwelling house and outhouses. There is no restriction on the land being used to service more than one dwelling house and outhouse.

1. In summary then, my impression is that none of the cases referred to by Mr Townsend in his legal opinion are directly relevant to the particular issue I must deal with here, which is whether any of the contentious building structures referred to above and/or the contentious No. 33 driveway areas constitute a breach of the restrictive covenant.

1. In terms of my general approach to interpreting the covenant, I endorse the cases referred to by both Mr Townsend in his opinion and by Mr Tobin at the hearing. In particular:
   • I agree that it is appropriate to give the key words of the covenant their common meaning rather than regarding them as a term of art or giving them an overly technical/legalistic meaning - see Natraine Nominees Pty Ltd v Patton [2000] VSC 303 and also Ex Parte High Standard Constructions Ltd [1928] 29 NSWLR 274 at 278.
   • As the aim is to understand the intent of the draftsperson at the time the covenant was created (which in this case is May 1925), I agree with Mr Townsend that modern definitions of terms like "dwelling" or "structure" are of little assistance.
2. With the legal dispute which I must resolve, I see the stand out issue as being whether the proposed deck for the new dwelling 1 (which extends into the No. 33 lot) will breach the requirement under the covenant that in relation to the No. 33 not be more than "one dwelling house and outhouses ....erected".
3. I am satisfied that the proposed erection of this deck will breach the covenant, relying on:
   • It being common ground that this deck will be built on the No. 33 lot affected by the covenant.
   • The deck being clearly associated with and forming part of the building works/development associated with a 2nd dwelling ie the new Dwelling 1.
   • The application plans indicating that the deck will be attached to the new Dwelling 1 structure, so that an occupant of the new Dwelling 1 can walk straight out of the living room on to the deck area. Hence I accept that the deck will be available as part of the day-to-day use of the proposed Dwelling 1.
   • The deck being a significant sized structure.
4. On this basis, I see the proposed erection of this deck on the No. 33 lot as in itself being a fatal problem. That is, I consider that the proposed erection of this deck will breach the covenant, such that the Tribunal has no jurisdiction to consider this planning merits proceeding. Although it is a smaller structure, I would make the same finding to the extent that the proposed awning above the deck intrudes into the land affected by the covenant.
5. Whilst strictly speaking I am not required to formally deal with the other aspects of the dispute, I make the following comments in passing.
6. The proposed driveways for the new Dwellings 3-5 involve erecting retaining walls and in some cases ancillary steps on the No. 33 property. I consider that there is a real case that these improvements forming part of the overall works for Dwellings 3-5 breach the "no erection of more than one dwelling" aspect of the covenant. Whilst I appreciate that these works are smaller than the contentious deck, it seems a stretch to find that the erection of these retaining walls/steps are so trivial as to be treated on a de minimis[1] basis as meeting the requirements of the covenant.
7. Putting to one side what works are intended to be done, I have a fundamental problem with the simple fact that the middle and rear sections of the No. 33 property will be used to provide vehicle access for the new Dwellings 3-5 on the No. 31 property. Each of the No. 31 and No. 33 properties have their own title. Accordingly, if the overall proposal involving both titles was to be approved, there would be nothing then stopping the owner of the No. 33 property separately selling that title. This would effectively leave the approved new Dwellings 3-5 land-locked in terms of vehicle access. Clearly this would be a nonsensical planning result. Whilst it is a moot point whether this "land-locked risk" in itself constitutes a breach of this covenant (noting that the covenant has a "works emphasis" in prohibiting the erection of more than one dwelling on the No. 33 lot), I in any case see this as a fatal problem with the proposal in terms of orderly planning.
8. Finally, I acknowledge and have taken into account the follow up written submissions provided to the Tribunal by both parties since the hearing. To the extent that these written submissions touched on the issues which I have already dealt with above, the arguments made largely reinforced the basic positions already put forward to the Tribunal at the hearing.
9. However the advocates at the hearing did not have the opportunity to deal with the question of whether the proposal breached the "excavation" aspect of the covenant. In this regard, I have given careful consideration to the further arguments put forward in the follow up information provided by both parties.
10. In summary, the Council encouraged the Tribunal to take a more literal interpretation of the "excavation" aspect of the covenant. Following this approach, no excavation can occur on the land affected by the covenant unless that excavation is associated with the "... purpose of excavating for the foundations of any building to be constructed thereon". In response, the Applicant has provided an updated legal opinion from the barrister Matthew Townsend. Mr Townsend's fresh submissions in essence argue that the covenant is intended to do no more or less than prohibiting any commercial quarrying on the subject land. In this regard, Mr Townsend relies on certain previous decisions of the Tribunal including Shaw v Glen Eira CC [2006] VCAT 68 and also Brissac Investments Pty Ltd v Stonnington CC [2004] VCAT 342.
11. I find Mr Townsend's submission on this issue more persuasive. My finding is that I am not satisfied that the proposal would constitute a breach of the "excavation" aspect of the covenant. That is, I agree that if one reviews the key previous Tribunal decisions on this issue, it is largely "one-way traffic" in terms of the significant number of decisions that had considered similar covenants and which have found that the aim of this type of covenant has been to avoid commercial quarrying. A common factor relied on in reaching this conclusion is that if one was to take a very literal reading of the "excavation" aspect of the covenant, then it would appear that the covenant also prohibits any excavation for other residential-type purposes such as installing a in-ground swimming pool, building a sand pit, creating trenching for the laying of pipes etc. Obviously this would be a nonsensical result.
12. Apart from the cases already referred to, some other decisions which reinforced my finding here are my own previous decision of Phil Nolan & others v Moreland City Council VCAT (Ref P3685/2008), together with Petroulis v Moreland CC (VCAT Ref P602/2002), Cavina v Boroondara CC [2008] VCAT 1362, D'Amelio v Monash CC [2004] VCAT 60 and also the decision of the Victorian Supreme Court in Tonks v Tonks [2003] VSC 195.

ANNEXURE TO APPENDIX - COPY OF LEGAL OPINION BY MR MATTHEW TOWNSEND

[1] The full term here is "De minimis non curat lex" - the law does not concern itself with trifles - as per Osborn's Concise Law Dictionary, 7th Edition.