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[2003] VSC 37
plaintiff. The covenant was to be modified by adding the stated proviso, subject to any further submissions from counsel.
The Court considered an aged-care hostel extension proposed for land subject to a covenant restricting the number of main dwelling houses. It read dwelling house in its ordinary, contextual sense and concluded that the proposed bedrooms and shared facilities would form one dwelling house. The Court also considered that uncertainty about the covenant could be resolved by a limited modification. Because the most affected neighbouring beneficiary consented, no other beneficiary objected after notice, and the evidence did not suggest substantial injury, the Court proposed adding a proviso tied to the proposal's drawings and setbacks.
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2,390 words · generated 01/10/2026
In Longo Investments Pty Ltd [2003] VSC 37, Osborn J considered an application concerning a restrictive covenant over land at Ash Road, Leopold. Longo Investments owned and operated an existing hostel providing residential accommodation for the aged on Lot 1 of lodged plan 206628U. It wished to extend the hostel and provide additional accommodation on adjoining Lot 2. The application sought a declaration about the covenant's effect or, alternatively, modification under s 84 of the 1958 (Vic) ([2]).
No linked legislation citations have been extracted yet.
The covenant applied to the relevant lots, subject to the exception for Lot 1 identified in the judgment. It restricted owners from erecting “more than one main dwelling house”, required the main building to have at least 1,400 square feet of floor area, specified external wall materials, and restricted use to residential purposes ([10]). The proposal showed a building with individual bedrooms and ensuite facilities, together with communal activity areas. The plans also showed a building exceeding the covenant's floor-area requirement and intended for residential use ([14]).
The Court identified an interpretation difficulty in the covenant's drafting. On a literal grammatical reading, the provisions about the size and materials of “such main building” could apply only to a building of which no more than one could be built. Osborn J observed that this might not have been the draftsperson's intention, but that the covenant did not express independent requirements about size and materials clearly ([20]). The Court did not need to resolve every possible consequence of that drafting problem to address the proposed development.
The judgment proceeded along two related lines. First, it considered whether the proposed building would breach the restriction on the number of dwelling houses. The Court concluded that the hostel would constitute one dwelling house, not multiple dwellings, and that the proposal would not breach that restriction ([47], [50]). Second, because the covenant's meaning was uncertain and the planning process might lead to changes in the proposal, the Court considered modification desirable. It was satisfied that the statutory basis for modification in s 84(1)(c) had been established ([63], [73]).
The proposed modification was a proviso referring to the aged-accommodation building generally in accordance with specified architectural drawings, provided that its setbacks from the southern, eastern and western boundaries were no less than those shown in the drawings ([87]). The judgment records that this proposed order remained subject to any further submissions counsel might wish to make ([87]).
On the dwelling-house issue, the Court treated the phrase as ordinary language, not a technical term with a fixed legal meaning. It referred to authority indicating that whether a building is a dwelling depends on its characteristics and use ([28], [32]). It also adopted the view that the covenant should be read in its colloquial and ordinary sense, having regard to the wording and context of the particular instrument ([36]).
The hostel's arrangement was important. The proposal involved separate bedrooms, but it also included shared communal facilities and was designed and intended to operate as one household. Osborn J distinguished that arrangement from cases in which separately occupied bedsitting rooms might each be treated as a dwelling house. The Court's conclusion was specific to the proposal's combination of accommodation and communal areas ([47]). It also gave an alternative reason: even if the covenant's language were read literally in a way that gave effect to its prohibition on more than one “main” dwelling house, the proposed development would not erect more than one such main dwelling house ([50]).
For modification, the statutory question was whether the proposed change would “not substantially injure” those entitled to the covenant's benefit. Section 84(1)(c), as reproduced in the judgment, gave the Court power to discharge or modify a restriction if that condition was met ([69]). Osborn J applied the substantial-injury approach stated in Re Cook: compare the benefits the covenant was intended to confer and actually conferred with the benefits that would remain after modification. If the difference was not substantial, the statutory basis could be established ([73]).
The evidence and context supported that assessment. The owner of the southern adjoining property, which the Court regarded as having the covenant's benefit most affected by the proposal, consented. No other beneficiary objected, and the evidence established that appropriate notice had been given. The Court said the plans and their context did not suggest likely substantial injury. It also regarded the change as one of degree rather than substantial character and as a clarification ([81]). Those were the stated reasons for its finding, rather than a general rule that consent or lack of objection alone establishes the statutory test.
The Court explained why a modification was useful even though it considered that the proposal would not breach the dwelling-house limit. Under s 61(4) of the Planning and Environment Act 1987 (Vic), a responsible authority must refuse a permit if it would authorise a breach of a registered restrictive covenant, unless the relevant permit or decision to vary or remove the covenant exists. The Court noted that this requires a responsible authority, where relevant, to form a view about the covenant's effect, a task that could be difficult here ([56], [60]). It considered a declaration about a hypothetical development unsatisfactory because the proposal might change during planning approval. A modification would clarify the covenant's effect before that process was finalised ([63]).
The judgment does not set out a comprehensive account of the law before and after the decision, and it should not be read as establishing a statutory amendment or a new general test. Its contribution, on the material supplied, is the application of existing interpretive and statutory principles to a particular covenant and development proposal.
Before the decision, the relevant covenant restricted development to one main dwelling house and included additional requirements concerning floor area and building materials. Its wording produced a threshold difficulty: the relationship between the one-building limit and the later requirements was not clear on a literal reading ([20]). The legal framework described in the judgment included s 84(1)(c), which authorised modification where the proposed change would not substantially injure beneficiaries, and s 61(4) of the planning legislation, which made the covenant's effect relevant to the permit process ([56], [69]).
After applying that framework, the Court concluded that the proposed hostel was one dwelling house for this covenant and that modification was nevertheless desirable to remove uncertainty. It proposed a proviso for a development generally in accordance with the identified drawings and with specified minimum setbacks ([47], [63], [87]). The practical result in this case was therefore a clarified, plan-specific treatment of the proposed aged-accommodation building, rather than an abstract redefinition of “dwelling house” or a general relaxation of restrictive covenants.
The Court's approach to substantial injury followed Re Cook's comparison of benefits before and after modification ([73]). The case also referred to Greenwood & Anor v Burrows & Ors as further discussion of that test, without setting out its reasoning in the supplied extract ([73]). The judgment gives no basis to claim that Longo Investments altered the governing statutory test.
At [20], Osborn J observed that the covenant was “badly expressed” and that its wording created a threshold interpretive difficulty. In plain English, the Court considered that the drafting did not clearly separate the limit on the number of buildings from the floor-area and materials requirements. That uncertainty was part of the reason it saw value in a clarifying modification.
At [36], the Court said the meaning of “dwelling house” should be the “colloquial” one. This means that the phrase was to be understood in its ordinary language and covenant context, rather than by assuming a narrow technical definition.
At [47], the Court concluded that “the combination of individual bedrooms and communal facilities creates one dwelling house.” In plain English, separate bedrooms did not automatically make the proposed hostel a collection of separate houses. The shared facilities and intended operation as one household mattered to the Court's classification.
At [50], the Court gave two related reasons for finding no breach of the dwelling-house restriction: the proposal would not involve more than one “main” dwelling house on a literal reading, and the proposal would in any event result in only one dwelling house. This makes clear that the conclusion was grounded both in the covenant's wording and in the Court's view of the building's character.
At [73], the Court used the comparison described in Re Cook: identify the benefits the covenant initially conferred, then compare them with what beneficiaries would retain after modification. Put simply, the statutory question was not whether the change had any effect at all, but whether any reduction in covenant benefits would be substantial.
At [81], the Court listed the evidence supporting its conclusion that beneficiaries would not be substantially injured. This included the most affected adjoining owner's consent, notice to other beneficiaries, the absence of objections, the plans and context, and the limited, clarifying nature of the change.
At [87], the proposed proviso tied the permitted building to named drawings and minimum setbacks. In practical terms, it did not describe an unrestricted permission for any aged-care development. It identified a particular form of building by reference to drawings and boundary distances.
The reasoning is most directly relevant to cases involving a restrictive covenant whose wording limits the number of “dwelling houses” but does not clearly define that expression. In particular, it may be useful where a proposed residential building contains individual bedrooms alongside shared facilities, and the question is whether the building should be treated as one dwelling or several ([47]).
Its application is fact-sensitive. The Court relied on the proposed hostel's design and intended operation as one household, and distinguished the arrangement from separately occupied bedsitting rooms ([47]). A building with different facilities, occupancy arrangements, or a different pattern of independent occupation would require separate consideration. The judgment does not supply a universal test for every kind of shared residential accommodation.
The decision is also relevant where a covenant's drafting makes it uncertain how a building-number limit relates to requirements about size, materials, or use ([20]). A related situation is one in which a planning authority must consider whether a permit would authorise a breach of the covenant, given the connection between s 61(4) and the covenant's effect discussed by the Court ([56], [60]).
For statutory modification, the judgment is relevant where an applicant seeks to show that a defined, limited amendment will not substantially injure beneficiaries. The Court considered the actual benefits of the covenant, the likely effect of the proposed development, notice, objections, consent from the most affected beneficiary, and whether the change was one of clarification or substantial character ([73], [81]). The decision does not establish that the same evidentiary combination will be sufficient in other cases.
Finally, the proposed modification was closely tied to drawings and setbacks, and was intended to deal with a development proposal that had not yet received planning approval ([63], [87]). The case may therefore be of interest where the court is asked to clarify a covenant for a proposal that could change in the planning process. The judgment's stated concern was to avoid a declaration about a hypothetical proposal that might be altered.
The supplied judgment contains no decisions after Longo Investments and therefore does not establish how later courts treated it. No later application, approval, distinction, or rejection can be verified from the material provided. It would be unsafe to infer a subsequent precedential history from this judgment alone.
The authorities that Osborn J did discuss are earlier authorities. For interpretation of “dwelling house”, the judgment referred to Bakes v Huckle, Downie v Lockwood, Ex parte High Standard Constructions Ltd and Uratemp Ventures v Collins ([28], [32], [36], [40]). For substantial injury under s 84(1)(c), it applied the test stated in Re Cook and referred to Greenwood & Anor v Burrows & Ors ([73]). It also cited decisions concerning the form of a modification and the character of the proposed change ([78], [81]). Those references show the authorities used in this judgment, but do not answer how later courts have used Longo Investments itself.
The judgment leaves some issues unresolved on its facts. First, Osborn J identified a threshold drafting problem but did not fully resolve how the floor-area and materials conditions should be read in relation to the one-main-dwelling-house limit ([20]). The outcome concerning the proposal did not require a complete reconstruction of the covenant's drafting.
Second, the meaning of “dwelling house” remains dependent on context. The Court found one dwelling house because this proposal paired individual bedrooms with communal facilities and was designed to function as one household ([47]). The judgment does not specify how much independence, separate facilities, or separate occupation would be needed for units within a larger building to count as separate dwelling houses under another covenant.
Third, the reasons do not set out detailed findings quantifying each beneficiary's original covenant benefits or the precise degree to which those benefits would be reduced. Instead, the Court states its conclusion after considering the evidence and gives the relevant factors ([81]). The general comparison is stated through Re Cook at [73], but its application will depend on evidence about the covenant's benefits and the modification's effects.
Fourth, the proposed proviso was tied to particular drawings and setbacks, while the proposal had not yet received planning approval and could change during that process ([63], [87]). The extract does not explain how materially different later plans would be treated, or whether a further modification would be required for a changed design. The wording of the proposed proviso indicates that the drawings and setbacks were important limits, but the judgment does not resolve every possible variation.
Finally, the disposition is expressed as subject to anything further counsel might submit ([87]). The supplied extract does not include any later submissions or a subsequent order. Accordingly, the analysis above describes the reasoning and proposed modification recorded in the judgment text, not any unprovided later procedural history.
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[2003] VSC 37
RESTRICTIVE COVENANT - Application for modification - "Dwelling house" - Whether modification will not substantially injure the persons entitled to the benefit of the restriction - Property Law Act 1958,s.84.
- four rectangular lots fronting the west side of Ash Road each having an area a little in excess of 3,000 square metres; and
- a fifth lot of 1.430 hectares (Lot A) located to the west of the four lots referred to above, and which has been further subdivided into 16 smaller lots generally in the order of 600 to 700 square metres in area located around Greenbank Court.
"(a) ... will not erect or cause or suffer to be erected or placed upon the said lot more than one main dwelling house together with the usual out-buildings such main building containing a floor area of not less than 1400 square feet within the outer walls thereof calculated by excluding the area of all carports, garages, terraces, pergolas and verandahs and such main building having external walls made principally of stone, brick or brick veneer. (b) ... will not use or permit or suffer any such main building to be used for other than residential purposes."
(a) that there can be no doubt that the proposed use is for a residential purpose;
(b) that the building proposed will comprise a floor area of more than 1400 square feet as defined by the covenant; and
(c) that the building is intended to comprise a series of individual bedrooms with ensuite facilities together with communal activity areas.
"... the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no further."[1]
These considerations give rise to a threshold difficulty with the interpretation and application of the covenant.
"Whether particular premises are a dwelling is a question to be decided on the facts of each case ... In deciding that question the test is whether at the material time the premises possessed the characteristics ordinarily found in buildings used or let for human habitation as homes."
"The word 'dwelling house' is capable of a wide meaning in which it extends to any building or part of a building used as the place of abode of one or more persons. It has been used in this sense in the criminal law and in relation to parliamentary franchise: cf Thompson v. Ward (1871) LR 6 CP 327, at pp.358-9; Hollyhomes v. Hind [1944] KB 571; [1944] 2 All ER 8. It has been so used in bankruptcy law: see Re Hecquard (1889) 24 QBD 71 at pp.75-6. It has been held to apply to buildings not of a private character. Thus in South-West Suburban Water Co. v. St. Marylebone Guardians [1904] 2 KB 174, it was held to cover residential workhouse schools occupied by children and by those in control of them. And in London County Council v. Davis (1897) 77 LT 693, it was held to cover a hotel for poor men which was a public building. It has also been held applicable to a building comprising a number of separate dwellings: see Kilpatrick v. Maxwelltown Town Council [1912] SC 228; Hollyhomes v. Hind [1944] KB 571; [1944] 2 All ER 8. The use of the word in its wide sense is illustrated by Lord Atkinson's statement in at p.304, that by the term 'dwelling-house' he understood 'a house in which people actually live or which is physically capable of being used for human habitation.' In popular speech the term is commonly used in a narrower sense derived, perhaps, from an abbreviating of the expression 'private dwelling-house'. In this narrower sense it covers, I think, only those places of abode which are either separate structures or else divided from other buildings by vertical walls, and which, in addition, are occupied, or adapted for occupation, by persons living in one household. But for premises to be used 'only as a dwelling-house', in this narrow sense of the word, it is not necessary that the person residing therein should be members of the one family, or related to each other. For example, if half a dozen students rented a house such as I have described and made it their place of abode, living in it in one household, they would be using it as a 'dwelling-house' even in this narrower sense."
"The question then with which I must deal is the meaning of the first covenant that only 'one house' shall be erected upon the land. This matter has to be considered in the light of the decisions of the English Court of Appeal in Rogers v Hosegood ([1900] 2 Ch 388); Kimber v Adams ([1900] 1 Ch 412); and of Swinfen Eady J in Ilford Park Estates Ltd v Jacobs ([1903] 2 Ch 522). Those cases appear to me to show that the language of the covenant is to be interpreted in a colloquial and ordinary sense and not in any technical or legal sense, and that primarily it is a question of the interpretation of the particular covenant before the Court which must be searched to see if the context throws any light on the meaning of the words."
"The starting point must be that 'dwelling-house' is not a term of art. It is an ordinary word in the English language. While I accept that dictionaries cannot solve issues of interpretation, it nevertheless is helpful to bear in mind that dwelling house has for centuries been a word of wide import. It is often used interchangeably with lodging. It conveys the idea of a place where somebody lives: see Dr Johnson's Dictionary, sv 'dwelling-house' and Murray's Oxford English Dictionary, sv 'dwelling-house' and 'lodging'. In ordinary parlance a bed-sitting room where somebody habitually stays is therefore capable of being described as a dwelling house. So much for generalities. The setting in which the words appears in the statute is important. It is used in legislation which is intended to afford a measure of protection to tenants under assured tenancies. This context makes it inappropriate for the court to place restrictive glosses on the word 'dwelling'. On the contrary, as counsel appearing as amicus curiae accepted, the courts ought to interpret and apply the word 'dwelling-house' in s 1 of the 1988 Act in a reasonably generous fashion."
(a) if the threshold difficulty of interpretation is resolved in accordance with the literal meaning of the covenant there will on any view be no more than one "main" dwelling house erected;
(b) furthermore, the proposed development will, in my opinion, not result in more than one dwelling house.
"(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."
(a) it is undesirable to seek to frame a declaration with respect to a hypothetical development which has as yet not received planning approval and which may undergo some modification in form during the course of such approval process; and
(b) it is in the interests of justice that the effect of the covenant with respect to the proposed development be clarified so as to remove doubt prior to the finalisation of the planning approval process.
"(1) The Court shall have power from time to time on the application of any person interested in any land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon by order wholly or partially to discharge or modify any such restriction (subject or not to the payment by the applicant of compensation to any person suffering loss in consequence of the order) upon being satisfied - (a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Court deems material the restriction ought to be deemed obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless modified so impede such user; or ... (c) that the propose discharge or modification will not substantially injure the persons entitled to the benefit of the restriction ..."
"Such injury can only be properly assessed by a comparison between the benefits intended to be conferred and actually conferred by the covenant initially on the persons entitled thereto and the resultant benefits, if any, remaining to such persons after the covenant has been modified. If from the evidence it appears that the difference between the two will not be substantial, then the applicant will have established a case for the exercise of the Court's discretion under paragraph (c). In order to make this comparison it is proposed to consider what benefits the covenant over the subject land may have conferred upon the persons entitled thereto, and then to assess whether the modification of such covenant would or would not substantially diminish the benefits so discovered."
This test is further discussed by Eames J in Greenwood & Anor v Burrows & Ors[8].
(a) the owner of the abutting property to the south, being that property having the benefit of the covenant which will be most affected by the proposed development, consents to the making of such an order;
(b) no other person entitled to the benefit of the restriction has objected to the modification of the covenant and the evidence establishes that full and appropriate notice was given of the intention to seek modification of the covenant;
(c) the evidence before me including the plans of the proposal and its context does not suggest any likelihood of substantial injury to persons entitled to the benefit of the restriction as a result of the development facilitated by its modification;
(d) the modification proposed to the covenant is one of degree rather than of substantial character cf Re Robinson[12]; and
(e) the modification proposed is properly characterised as one of clarification only.
"Provided always for the avoidance of dispute that the erection of a residential building for the purposes of the accommodation of the aged generally in accordance with drawings numbers 1229.5.2 sheets 1, 2, 3, 4 and 5 prepared by J.F. Bufton Architect and dated June 2000 (annexed hereto) having minimum setbacks from the southern, eastern and western boundaries of the lot equivalent to or greater than those shown on such drawings, shall be deemed to not contravene this covenant."
[1] Grey v Pearson [1857] VI HLC 106 per Lord Wensleydale
[2] [1948] VicLawRp 29; [1948] VLR 159 at 160
[3] [1965] VicRp 38; [1965] VR 257 at 262
[4] [1928] 29 NSWSR 274 at 278
[5] [2001] UKHL 43; [2002] 1 All ER 46 at p.50
[8] [1992] Vic Conveyancing Reports 54-444
[11] [1965] Vic Conveyancing Reports 54-178
[12] [1972] VicRp 28; [1972] VR 278 at 283 and 284
The covenant was to be modified by adding the stated proviso, subject to any further submissions from counsel.