DATES OF HEARING: Tuesday 9 and Wednesday 10 September 2003

MEDIUM NEUTRAL CITATION: [2003] VCAT 1279

It is directed that a permit must not be granted in relation to planning permit application No MV 15274/2002 for the land at 76 McCracken Street, Essendon.

For the applicant for review: Mr. William Kusznirczuk. Consultant Town Planner. He called the following persons to give evidence;

* Mr. James Higgs, Traffic Engineer with TTM Consulting Pty Ltd.

* Ms Elizabeth Hui, Acoustic Engineer with Marshall Day Acoustics Pty Ltd.

For the responsible authority: Mr. John Rantino, Solicitor with Maddocks. He called the following persons to give evidence;

* Ms. Kate Stevens, Children's Services Co-ordinator for the City of Moonee Valley.

* Mrs. Kate Partenio, Traffic Engineer with GTA Consultants.

For the respondent objectors: Mr. Daniel Bowden, Consultant Town Planner.

1. This was an application under Section 77 of the Planning and Environment Act 1987 (The Act) to review a decision by Moonee Valley City Council to refuse to grant a permit to develop and use the land at 76 McCracken Street, Essendon for the purpose of a 30 place, child care centre.

2. Prior to the hearing the Responsible Authority notified the Tribunal and other parties that in its view the proceeding raised a question of law, namely whether the grant of a permit would be in breach of a restrictive covenant affecting the land.

3. Being constituted without a legally qualified member, I referred this question of law to the Tribunal's President, Justice Morris. Accordingly, the parties submissions in relation to the effect of the covenant were heard and determined by the President prior to my hearing the planning merits of the application. The President's reasons for his decision were given orally and these reasons, as revised, are attached to this decision.

4. The President held that the proposed use and development would not be in breach of the covenant. Accordingly it was open for me to consider the merits of the proposal.

5. At the conclusion of the hearing, having heard the submissions and evidence of the Responsible Authority and the Applicant for Review, but without finding it necessary to hear the submissions of the respondent objectors, I advised the parties of my decision that a permit should not be granted. I then proceeded to give oral reasons for my decision. The following constitutes an edited transcript of those reasons.

6. The land is zoned Residential 1 under the Moonee Valley Planning Scheme and is not affected by any Overlay.

7. A permit is required under Clause 31.01-2 to use the land for a child care centre which is a Section 2, unspecified use in the table of uses at Clause 32.01-1 of the Scheme. A permit is also required pursuant to Clause 32.01-6 to construct buildings and works for such a Section 2 or "discretionary" use.

8. Before deciding on an application for permit the Responsible Authority and this Tribunal on review must consider, as appropriate, the decision guidelines at Clause 65 of the Scheme.

9. The decision guidelines most relevant to this application are the purpose of the Residential 1 Zone, the orderly planning of the area, the effect on the amenity of the area and various relevant clauses of State and Local Planning Policy Framework.

10. Of the Residential 1 Zone purposes the following is the most relevant:

"In appropriate locations, to allow educational, recreational, religious, community and a limited range of non residential uses to serve local community needs."

11. This Tribunal and its predecessors have invariably held that a child care centre is an appropriate use for a residential area - as are schools and medical centres. However, the purpose of the zone refers to "appropriate locations", and it can be inferred that a permit is required in order to ensure that the use is appropriately located, having regard to the relevant decision guidelines.

12. The State Planning Policy Framework reminds us at Clause 11.03-6 that planning is to recognise social needs by providing land for a range of accessible community resources such as affordable housing and educational, cultural and community support facilities. The Clause goes on to direct that planning must support the development and maintenance of communities with adequate and safe physical and social environments for their residents through the `appropriate location' of uses and developments and through quality urban design.

13. Consistent with this State Policy the City of Moonee Valley has identified a need, within its municipality, for well designed and well located child care facilities to serve the needs of its residents and others.

14. In order to provide certainty to residents and applicants as to where child care or other discretionary uses would be appropriate in a residential zone the Council has included a specific Local Policy to this effect at Clause 22.02 of its Planning Scheme. Objectives of this policy include; "to provide a higher degree of certainty for developers and residents" and "to aid Council's decision making".

15. This Policy, being part of the Local Planning Policy Framework, is required to be taken into account, as appropriate, before deciding on an application. Clause 65 also provides that when deciding about an application the Responsible Authority, and therefore this Tribunal on review, "must decide whether the proposal will produce acceptable outcomes in terms of the decision guidelines...".

16. The principal question to be decided in this application is whether the development and use of this land as a child care centre would produce an acceptable outcome in terms of the relevant decision guidelines, most notably the Discretionary Uses Policy.

17. While the proposed use is to be accommodated within an existing dwelling, which is consistent with one of the locational criteria for discretionary uses, it fails to meet a number of other locational criteria. The most notable failure is that such uses should "generally not be located in local residential streets". The preferred location for such discretionary uses are corner sites that adjoin or have access to a road in a Road Zone or sites that abut non residential uses or that are located on the periphery of commercial or industrial zones. While the subject land is a corner site, the roads in question are not within a Road Zone.

18. Indeed the evidence pointed to the road pavement width of Braemar Street being insufficient, outside of the subject land, to accommodate any spill over kerbside parking. In the opinion of both traffic engineering witnesses, the grant of a permit for this site would necessitate the introduction of parking restrictions outside the site. This would be necessary in order to ensure the smooth flow of traffic within and adjacent to the round-about at the corner of McCracken and Braemar Streets.

19. The proposed use and development also fails to meet the General Standards at Clause 22.02-3. The works necessary to facilitate this use require the conversion of the front garden into a playground to be surrounded by a 1.8m high brick pier and steel railing fence, with only the very minimum of landscaping - a 300 mm strip adjacent to the fence on both the western and southern site boundaries, abutting McCracken Street and Braemar Street respectively. The general standards for discretionary uses refer to the provision of "adequate space for landscaping to contribute to the residential amenity". Whilst in a strict sense this standard is only applicable to purpose built premises, I think it relevant to have regard to it. What is currently a space for landscaping, that contributes to residential amenity, is to be substituted by something considerably lesser in its contribution to residential amenity.

20. The subject land is located within a residential precinct of some considerable intactness and it seems only reasonable that a discretionary use located within such an area should make a contribution in landscape terms to the amenity of the area. It was clear from the evidence of Ms Stevens that this site is only just adequate to meet the various regulatory requirements for child care centres, based on the amount of internal and external space available per child. It seems that as a result there is little room left to contribute to the residential character of the area, as encouraged by Local Policy.

21. The proposed car park is an even more significant intrusion on the residential amenity of the area. Again, this is due to the inability to provide an appropriate visual screen to the street. This would be exacerbated, having regard to the evidence of Mrs Partenio, if the enclosing fence was to be partly removed and the crossover to Braemar Street widened. Even Mr Higgs' evidence was to the effect that the fence should be removed in part.

22. The General Standards at Clause 22.02-3 also refer to the need to ensure that a discretionary use does not cause detriment to occupants of nearby residential properties including through the generation of noise from the use and from associated traffic. Having heard the evidence of Ms Hui I am satisfied that this proposal, given its daytime, weekday use, would not result in unreasonable detriment due to noise.

23. The ease of use of the proposed car park was a further issue in this proceeding. It is relevant to refer to Clause 52.06, dealing with car parking. Pursuant to this Clause the Responsible Authority must be satisfied that "an adequate number of car spaces" is to be provided and that the layout of any car park is satisfactory. There was no real issue as to the adequacy of 5 staff car parking spaces and 4 parent drop off spaces. Rather the issue was whether they were laid out, consistent with the purposes of Clause 52.06, in a manner that "creates a safe environment for users, achieves a high standard of urban design and enables easy and efficient use".

24. I accept the evidence of Mrs Partenio that the proposed parking layout "is not the ideal design at all by any means". Indeed it was her evidence also that the design is "sub standard". Under cross examination, Mrs Partenio was prepared to agree that if the crossing was widened to allow cars to both enter and exit at the same time, if the fence on the south eastern side was reduced to enable easier access into Drop Off Bay No. 1 and if the drop off bays were mirror imaged, the car park would be "workable". In Mrs Partenio's opinion the drop off bays needed to be mirror imaged in order to provide a safer outcome for children. Without such a change there would be a constant risk of children, located behind parked cars, being unseen by reversing drivers. I regard this as a highly unsatisfactory layout for a use of this nature.

25. It was the evidence of Mr Higgs, however, that by flipping the drop off bays a more inconvenient access outcome would result. Because the likely approach route is from the north west, a flipping of the drop off spaces would mean that drivers entering the car park would need to perform a virtual u-turn to access the spaces. Such inconvenient access is likely to result in greater use of kerbside spaces, to the detriment of residential amenity and traffic safety at this narrow part of Braemar Street.

26. I was ultimately persuaded by the evidence of Mrs Partenio that the car park is a further example of this site being insufficient to adequately accommodate the proposed use and not give rise to poor design outcomes. The confidence of Mr Higgs that the peak accumulation of cars within the car park would be unlikely to give rise to conflicts, was not sufficient to persuade me that important safety issues had been addressed or were capable of being addressed.

27. In conclusion, I find the subject land to be too constrained to accommodate all that is required for a 30 place child care centre and not detract from the amenity of this residential area. The land has insufficient space for landscaping to enable it to integrate with its residential context, as well as insufficient room for a car park that is both safe and convenient to use. This, taken with the fact that it fails to meet the locational criteria of the relevant Local Policy for Discretionary Uses, makes it inappropriate to grant a permit, despite the Council's encouragement of additional child care facilities.

The grant of the permit which is sought would not authorise anything which would result in a breach of a registered restrictive covenant.

REASONS (given orally at the hearing and subsequently revised):

1 In this case application has been made for a planning permit pursuant to the Moonee Valley Planning Scheme for a child care centre at 76 McCracken Street, Essendon. There exists on the land a dwelling house. Essentially it is proposed to make internal changes to the house, construct some external works and then use the building and the land for a child care centre.

2 An issue which has arisen is whether the grant of the permit would authorise anything which would result in a breach of a registered restrictive covenant. As this involves a question of law, it has fallen to me to express an opinion on the matter.

3 Section 61(4) of the Planning and Environment Act 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 has been made to grant a permit to allow the removal or variation of the covenant.

4 No permit has been granted, or a decision made to grant a permit, so as to allow the removal or variation of the covenant that affects the land. Hence the legal issue that arises is whether or not the grant of the permit sought would authorise anything which would result in a breach of that covenant.

5 In order to answer the question it is necessary to first ascertain precisely what it is for which a permit is sought. The land is in a Residential 1 Zone pursuant to the scheme. In that zone a permit is required to use land for the purpose of a child care centre. Further, a permit is required to construct a building, or construct or carry out works, for a section 2 use, such as a child care centre. However that requirement is subject to clause 62 of the scheme, which exempts the internal rearrangement of a building. It follows that the permit that is sought in this case essentially is, first, to use the land as a child care centre and, second, to construct building works external to the existing building on the land, that is car parking works, the erection of two outbuildings and fencing works.

6 I now turn to the other matter that needs to be ascertained, namely the meaning of the covenant. The covenant is one which covers a sizeable suburban area, as part of a subdivisional development. It was imposed in 1922. There are a number of beneficiaries of the covenant. The key words of the covenant involve a promise on the part of the landowner, and on behalf of subsequent landowners, that:

No building shall at any time hereafter be erected on the land hereby transferred save one dwelling house with the usual and necessary outbuildings thereto and such dwelling house shall front McCracken Street.

7 This case turns upon the construction of the words in the covenant. 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. (See, for example, Tonks v Tonks [2003] VSC 195 per Bongiorno J.)

8 I have had the benefit of comprehensive submissions from both Mr Rantino, on behalf of the Moonee Valley City Council, and Mr Adrian J Finanzio, on behalf of the permit applicant. Mr Rantino's submission took me to a number of cases and other relevant material. The extent and depth of the research shown in his submission was considerable.

9 The answer to the question must lie in the words used in the covenant. Turning to those words, it is apparent that the covenant is essentially concerned with the erection of buildings. The initial operative words in the covenant are that no building shall at any time hereafter be erected on the land. Those operative words are then qualified by a saving provision. The focus of the covenant is upon the erection of buildings; it is not upon the use of buildings.

10 For present purposes I assume that a physical modification to an existing dwelling house would involve an erection of a building for the purposes of the covenant. I assume that notwithstanding possible arguments to the contrary based upon Lawton v SHEV Pty Ltd (1969) 89 WN(Part1)(NSW) 635. But even making that assumption it does not seem to me that either matter for which permission is necessary in this case, namely the use of the building as a child care centre, or the construction of the works external to the building, would authorise anything that would result in a breach of a covenant that is directed to the erection of buildings.

11 In the first instance, namely the permission in relation to the use, to so hold would require one to infer into the words used in the covenant words such as and used as. Reading the words in their plain and ordinary manner, they do not cover the use of buildings at all; but, rather, are directed at the erection of buildings.

12 Mr Finanzio submitted that if the covenant was intended to cover the use of buildings it could have said so. I think that argument has some merit in this case. That type of argument is not always applicable because it may be that the draftsperson simply chose to use the words that he or she used; and the fact that they did not use different words does not mean that the interpretation which would follow from the use of those different words was intended to be excluded. However it certainly was commonplace during the period of the 1920s for restrictive covenants to be imposed regularly on subdivisional developments. Those covenants sometimes specifically referred to the use of the land and sometimes they did not. The absence of specific words in relation to use in this case, in my opinion, does negate any possibility of inferring that such words are to be embraced within the words actually used.

13 It is not necessary to rely upon the principle that Mr Rantino identified in the extract from Bradbrook and Neave dealing with construing covenants against the covenantor. I agree that that is a principle essentially of last resort, but I find it is unnecessary to rely upon it.

14 Essentially my conclusion is that the promise made in the covenant was a promise about how the area must be developed. It was not a promise about how the area would be subsequently used into the future.

15 I note that neither counsel was able to identify an authority which was precisely in point in relation to this matter. The closest that either party came was clause 15.10 of the 2nd edition of Bradbrook and Neave, Easements and Restrictive Covenants. The passage at clause 15.10 states that courts have often been prepared to infer restrictions on the use of buildings from restrictions on the type of building which can be erected. There are some cases cited in support: one being an Irish case of 1870 and others being cases in some other publication. I am not prepared to guess on this matter, because so much depends upon the precise wording of the covenant in question. As Chief Justice Mann said in Marshall and Scotts Contract [1938] VicLawRp 22; [1938] VLR 98, small differences in words are of great importance and the decision often turns on them. It follows from that comment that it is dangerous to take a statement, such as that in Bradbrook and Neave, and apply it without carefully scrutinising the words of each covenant upon which the authors have based their premise.

16 I turn now to the question of the frontage of the proposed building. In a sense my conclusion on the principal issue really resolves the second issue. My conclusion on the principal issue is that the covenant is directed at the way in which the land would be developed, rather than subsequently used. I think the same follows in relation to the promise that the dwelling house front McCracken Street. Looking at the proposed permit it does not seem to me that anything that would be authorised by that permit, namely the use of the land or the external works, would result in there being a breach of that part of the covenant which involves a promise that the dwelling house front McCracken Street. The closest one could get to that is that the combination of the fencing and the change in access would reorient the frontage to Braemar Street. But it seems to me that the covenant is really directed at the appearance of the building and its appearance in the context of neighbouring buildings. And the fact that access, even primary access, is to be obtained from the sideage, and the fact that the fence at the front will essentially enclose a play area, does not seem to me to involve any breach of that part of the covenant.

17 Now, as to the question of the outbuildings, I note that the outbuildings that will be authorised if the permit is granted consist of a metal shed, 4 metres by 2 metres, together with an external bathroom that would appear to have dimensions of approximately 2 metres by 2 metres. The metal shed will be used for storage. The external bathroom would appear to have two toilets within it, without there being any internal division between the toilets. Looked at purely as buildings, the two buildings that are proposed to be authorised by the permit are, in my opinion, within the description of usual and necessary outbuildings to a dwelling house. Certainly if those buildings were built behind any other building which was used for a dwelling house, one would not question that they were usual and necessary outbuildings. As far as the shed is concerned, that type of shed is, in fact, found at the rear of probably the majority of houses in Melbourne. As far as the external toilet building is concerned, whilst that is now relatively uncommon, looked at in the context of the date at which the covenant was entered into, it would not be at all uncommon. It was said that having two toilets made a difference. In my opinion it makes no difference at all because the covenant is not directed at internal features that might be within an outbuilding. It is concerned with the nature of the outbuilding from its external appearance and whether that type of building is appropriate in conjunction with a building that is a dwelling house.

18 I conclude my opinion in this way: The grant of the permit which is sought would not authorise anything which would result in a breach of a registered restrictive covenant. Given that conclusion it is unnecessary to consider the interesting and difficult issues raised in relation to section 62(1)(aa) of the Planning and Environment Act.

19 I wish to make it clear that the conclusions I have reached on this point do not in any way mean that a permit should or should not be granted for the proposed child care centre. That is a matter that will need to be determined having regard to the planning merits, which will be revealed by the relevant planning controls, planning policies and submissions about those matters.