Residential 1 Zone and Development Contributions Plan Overlay

Located on north side of Maclagan Crescent the land has an area of approximately 985 square metres and is occupied by a single storey detached brick dwelling.

The area is fully developed predominantly with detached houses. There is some multi-dwelling development including a four unit development at No. 28 Maclagan Crescent.

1. This is an application by Peter Giosis to review the decision of the Darebin City Council to refuse a permit to vary a restrictive covenant which burdens land at 26 Maclagan Crescent, Reservoir.
2. The part of the covenant which it is sought to vary provides as follows.

(c) no shops, laundries, factories or works shall be erected on this Lot and not more than one dwelling house shall be erected on any one Lot and the cost of constructing each house shall not be less than Four Hundred Pounds (inclusive of all architect's fees and the cost of erecting any outbuildings and fences).

1. The variation seeks to replace the words "one dwelling house" with the words "three dwellings". This would enable application to be made to redevelop the land for three units or dwellings.

1. Five objections were received by the Responsible Authority of which three were from persons owning land which is entitled to the benefit of the covenant. The properties owned by these three beneficiaries are located as follows.

1. Each of these properties is located some distance from the subject land (at least 100 metres).
2. The application was refused by the Responsible Authority on the following ground.

The proposed variation to the Covenant contained in Instrument Number 1340550 on the Certificate of Title of 26 Maclagan Crescent, Reservoir (Lot 278 on LP8486, Certificate of Title Vol 5330 Folio 937) to allow not more than three dwellings to be constructed on the lot will result in detriment to beneficiaries and is therefore contrary to Section 60(5) of the Planning and Environment Act 1987.

1. The covenant was imposed in 1927. This means that the relevant statutory provision is Section 60(5) Planning and Environment Act 1987 (the Act). This subsection provides as follows.

(5) The responsible authority must not grant a permit which allows the removal or variation of a restriction referred to in subsection (4) unless it is satisfied that -

(a) the owner of any land benefitted by the restriction (other than a 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 that owner has objected to the grant of the permit, the objection is vexatious or not made in good faith.

1. The effect of the enactment of this provision in 1993 was to curtail the previously unfetted power of a responsible authority to remove or vary a restrictive covenant having regard to the planning merits of the case. The new provision recognised that the benefit of a restrictive covenant is a proprietary right that should not be lightly removed or interfered with. The Ministers second reading speech introducing subsection (5) explained it as follows.

The effect of the clause is that permits should be granted only for "dead wood" covenants if no owner benefitting from the covenant objects to its removal or variation. The alterative avenues to remove or vary a covenant remain in place, being applications to the Supreme Court under the Property Law Act 1958 and the preparation of a planning scheme amendment.

1. A "dead wood" covenant is one that no longer serves any useful purpose.
2. Under clause 52.02 of the Darebin Planning Scheme a permit is required before application can be made under the Subdivision Act 1988 to vary a restrictive covenant. The two objectors who do not have the benefit of the covenant are entitled to pursue their opposition because there is a discretion under clause 52.02 to refuse the application even if section 60(5) of the Act can be satisfied by the permit applicant (see Hill v Campaspe Shire Council (2011) VCAT 949).

1. The issues which fall for determination are therefore as follows.
   • Can it be said that the owner of any land benefited by the covenant will be unlikely to suffer any detriment of any kind, including perceived detriment, as a consequence of the proposed variation of the covenant.
   • Are the objections by the beneficiaries of the covenant vexatious or not made in good faith.
   • If the first two questions are answered in the affirmative, should a permit be granted in the exercise of discretion.

Section 60(5) Planning and Environment Act 1987

1. A number of decisions of the Tribunal have referred to the "extraordinarily high" bar set by the subsection (McFarlane v City of Greater Dandenong (2002) VCAT 696, Trajkovski v Wyndham City Council (2009) VCAT 1231, Vivarini v Whittlesea City Council (2011) VCAT 217 and Hill v Campaspe Shire Council supra). In fact, the difference between the bars set by section 60(5) and the conventional planning test which requires a balancing of competing interests is akin to the difference between the high jump and the pole vault.
2. The two paragraphs of the subsection are directed to quite different considerations. Paragraph (a) is concerned with the planning merits of the application which must be considered in order to determine whether it is unlikely that detriment will be suffered. On the other hand paragraph (b) is concerned with the motives of the objector rather than the substance or cogency of the objection. It is convenient to deal with each paragraph in turn.

Subsection 5(a)

1. Subsection 5(a) was initially considered by the Tribunal in Carabott and Ors v Hume City Council (1998) 22 AATR 261. A strongly constituted division (Judge Wood, Deputy President Macnamara (as he then was), Senior Member Byard and Member Moles) analysed the provision and came to a number of propositions which were summarised by Judge Strong and Member Cimino in the subsequent decision in McFarlane v City of Greater Dandenong, supra, as follows (at para 15).
   1. It is for the Tribunal to determine whether it is satisfied on the balance of probabilities that any covenant beneficiary "will be unlikely to suffer any detriment of any kind if the variation is permitted." In other words it is not a question of whether the Tribunal is satisfied there will be detriment: the Tribunal must be affirmatively satisfied that there will be none.
   2. Compliance with planning controls does not, of itself, and without more, establish that a covenant beneficiary will be unlikely to suffer any detriment of any kind. Consideration of a proposal from a planning perspective often requires a balancing of competing interests. There is no such balancing exercise involved in the consideration of the issue which arises under paragraph (a). The nature of the enquiry is fundamentally different.
   3. The mere assertion of the existence of a detriment is not sufficient to demonstrate its existence. On the other hand, loss of amenity will constitute a detriment, and in this regard amenity includes "an appeal to aesthetic judgment, which is difficult to measure, however the notion of `perceived detriment' specifically contemplates that this consideration is relevant to the enquiry".
   4. The determination must be made on the evidence before the Tribunal "including the appeal site and its environs".
   5. It is not necessary for an affected person to assert detriment. This is so for two reasons: first, because the Tribunal must be affirmatively satisfied of a negative, namely that there will probably be no detriment of any kind; secondly, the Tribunal is entitled to form its own views from the evidence.
2. At the outset it should be noted that the paragraph casts a wide net. The responsible authority is required to be satisfied that all owners of any land benefitted by the covenant will not suffer detriment, not just those benefitting owners who have objected to the application for permit.
3. It is also necessary that any detriment be a consequence of the variation of the covenant. Obviously a consequence of the proposed variation in this case is the probability that the land will be redeveloped for multi-dwelling purposes, so the responsible authority must assess the possible impacts of that type of development.
4. Unlike many applications for a variation of a restrictive covenant the present applicant has not concurrently sought approval for any particular form of development. This makes it difficult for the responsible authority to be satisfied as required by paragraph (a) because it must consider all possible forms of three unit multi-dwelling development and conclude that it is unlikely that any of them would cause detriment to a benefitting owner.
5. In this case the three benefitting owners who have objected are located some distance from the subject land. It could cogently be argued, as indeed it was by Mr Watters of Counsel, for the permit applicant, that they could suffer no direct physical amenity impacts from any form of multi-dwelling development on the subject land. However, paragraph (a) refers to "any detriment of any kind (including perceived detriment)." This means that an objection based on a non-physical impact, such as a change in neighbourhood character resulting from further intrusion of unit development into the neighbourhood, cannot be eliminated.
6. In the present case the property immediately adjoining the subject land at No.28 Maclagan Crescent and four properties more or less opposite the subject land at nos.31, 33, 35 and 37 Maclagan Street have the benefit of the covenant. Two of those properties have themselves been redeveloped with units. None of the owners of the five properties or of any of the units occupying those properties objected to the grant of the permit.
7. It would be difficult for the owners of the unit developments to raise issues of neighbourhood character, and the fact that none of the owners have objected can be taken as some acknowledgment that they do not see themselves as likely to suffer detriment (see Ingberg v Bayside City Council (2000) VC AT Application no. 2000/24731 at para 67).
8. However, in my view that is not an end of the matter. As mentioned in McFarlane it is not necessary for an affected person to assert detriment. This is because the Tribunal must be positively satisfied of a negative, namely, that there is unlikely to be detriment of any kind. In this case in the absence of a firm development proposal means that there are an infinite number of three unit or three dwelling developments that could take place in consequence of the variation of the covenant. In my view it is simply not possible to say that none of those developments would be likely to have a detrimental impact of some kind on the benefitting properties, particularly the adjoining units at 28 Maclagan Crescent. The application for permit therefore falls at the first hurdle.

1. Unlike paragraph (a), paragraph (b) is directed to a benefiting owner or owners who have objected, and requires consideration of their motives.
2. The meaning of "vexatious" in the context of a person declared to be a vexatious litigant was considered by the Supreme Court (Eames J) in Attorney General for the State of Victoria v Kay (1999) VSC 30. His Honour cited what was said in the same context in the Supreme Court of NSW by Roden J in Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.

It seems to me that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds. I believe that the tests may be expressed in the following terms. 1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought. 2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise. 3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.

1. In Inberg v Bayside City Council supra Deputy President Bruce applied this explanation of the meaning of "vexatious" directly to the word as used in paragraph (b) on the basis that Kay's Case involved in the use of the word "in a Victorian statute" (see para 99)
2. There are some similarities between the statutory context in which a person may be declared a vexatious litigant under the Supreme Court Act 1986 and paragraph (b) which removes the de facto vetoing effect of an objection. However there are also dangers in the direct translation of a judicial definition in one statutory context to a different statutory context. This is particularly so in the present case where paragraph (b) is clearly directed towards the objector's motive. This casts some doubt over the applicability of the notion of "constructive vexation" suggested by the third leg of the definition in Wentworth Case which is to apply "irrespective of motive".
3. I prefer to be guided by the ordinary and everyday meaning of "vexatious" as set out in the Macquarie Dictionary.

1. law (of legal actions) instituted without sufficient grounds, and serving only to cause annoyance..
2. The notion of "vexatious" imports intent to cause annoyance, which of course can often be inferred from the fact that the objection is "obviously untenable" or "manifestly groundless".
3. The objections from the benefitting owners were not pursued before me so I have taken them to be as lodged with the responsible authority in response to the advertising of the application.
4. The careful analysis presented by Mr Watters reveals that in relation to Ms Pettolino (1/15 Hobbs Crescent) and Ms Papalia (33 Gellibrand Crescent) there is a strong case that the objections are untenable and have no prospect of being upheld. There was no evidence that the objections were calculated to annoy or frustrate the applicant although clearly they might have that effect. Ultimately I do not have to decide whether this is sufficient to render the objections "vexatious" because the same cannot be said of the third benefitting objectors, Sanchez and Morales. They have raised the issue of whether a multi-dwelling development of the subject land would change the character of the neighbourhood.
5. This is an arguable point, and indeed it might be said that the purpose of the covenant is to create and preserve a certain neighbourhood character, being a single detached dwelling on each allotment. In my view it cannot be said that this objection , although unlikely to succeed having regard to the incursion of multi-dwelling development in the area, is vexatious. One objection which cannot be impuned under paragraph (b) is sufficient to defeat the application.
6. For these reason the application for review is dismissed and the decision of the responsible authority to refuse a permit is affirmed.