Plaintiff v Defendants

1 This proceeding concerns an application by Viva Energy Refining Pty Ltd ('Plaintiff') for the discharge or modification of four restrictive covenants burdening part of the land known as 90 Refinery Road, Corio, Victoria, more particularly described in certificate of title volume 8866 folio 943 ('Land').[1] The Plaintiff is the registered proprietor of the Land.

2 While I will describe the covenants affecting the Land in more detail later, it suffices at this point to note that they are single dwelling covenants and prevent any building being erected on the Land other than a dwelling house, school, church or hall and outbuildings thereto, and prevent any trade or business being carried out upon the Land.

3 In brief, the Plaintiff intends to construct a service station on the Land which dispenses hydrogen, gasoline and diesel, and which offers fast charging stations for battery electric vehicles. Unless modified or discharged, the covenants prevent the Plaintiff from doing so.

4 Sumervale Pty Ltd ('First Defendant') and Sunyhill Pty Ltd ('Second Defendant') (together, the 'Defendants') oppose the Plaintiff's application. They are both companies in the United Petroleum group of companies ('United Petroleum Group') and are the registered proprietors of the land at 452-458 Princes Highway, Corio, Victoria ('United Petroleum Land') which has the benefit of three of the relevant covenants, as will be explained later.

5 For the reasons which follow, the Plaintiff's application to discharge the Covenants will be granted.

6 At the trial, the Plaintiff tendered the following evidence:

(a) affidavit of Marco Negri affirmed 9 June 2022 ('Negri Affidavit');

(b) affidavit of Myles Watson sworn 9 June 2022 ('Watson Affidavit');

(c) affidavit of Mark Steven Gerhardy sworn 8 June 2022 ('Gerhardy Affidavit');

(d) affidavit of Stephen Davis sworn 28 July 2022 ('Davis Affidavit'); and

(e) affidavit of Alison Milner affirmed 15 February 2023 ('Milner Affidavit').

(a) affidavit of David Szymczak sworn 27 January 2023 ('Szymczak Affidavit');

(b) affidavit of Luke Wainscoat sworn 30 January 2023 ('Wainscoat Affidavit'); and

(c) affidavit of Peter Murphy sworn 17 February 2023 ('Murphy Affidavit').

8 At trial, none of the deponents listed in the preceding two paragraphs were cross‑examined, save for Mr Negri and Ms Milner.

9 During the course of the first day of trial, an objection was made by the Defendants to an aspect of Ms Milner's report exhibited to the Milner Affidavit. I heard argument from the parties and ruled that the Defendants' objections as to hearsay would be dealt with in the course of considering my reasons, and those objections would go to weight.[2]

10 The parties each provided written outlines of opening submissions, and the Defendants also provided a short written submission regarding the evidence as part of its closing submissions. At the close of trial, each party made oral submissions.

11 The evidence and submissions enumerated above have all been taken into account. The materials were conveniently provided in a paginated court book.

12 Most of the evidence described below regarding the description and history of the Land is uncontentious. I have set out a summary below, but it is described in more detail below when discussing the Watson Affidavit.

13 The Plaintiff is the registered proprietor of the Land. The Land is zoned Industrial 1 (IN1Z) in the City of Greater Geelong Planning Scheme, and is within the larger plot of land known as 90 Refinery Road, Corio, shown in the figure below.[3]

14 The Land is approximately 235,413 m and presently undeveloped.

15 Relevantly, the Subject Land is burdened by four restrictive covenants, contained in Instruments of Transfer:

(a) 1417550,[4] dated 29 May 1929 ('First Covenant');

(b) 1435176,[5] dated 19 October 1929 ('Second Covenant');

(c) 1503993,[6] dated 15 June 1932 ('Third Covenant'); and

(d) 1806300,[7] dated 14 February 1941 ('Fourth Covenant')

16 The First Covenant is in the following terms:[8]

I PERCY HAGUE HOLDEN of 28 Latrobe Terrace Geelong in the County of Grant Sub-Inspector of Customs being registered as the proprietor of an estate in fee simple in the land hereinafter described subject to the encumbrances notified hereunder in consideration of the sum of Five Hundred Pounds paid to me by DUNCAN INNES MCQUEEN of Corio near Geelong Dealer DO HEREBY TRANSFER to the said Duncan Innes McQueen All my Estate and interest ALL THAT piece of land being Lots seventy four and seventy five on Plan of Subdivision Number 12708 lodged in the Office of Titles and being part of Crown Portion eighty three at Ciwues Creek Parish of Moranghurk County of Grant and being part of the land more particularly described in Certificate of Title entered in the Register Book Volume 5221 Folio 1044122 AND the said Duncan Innes McQueen with the intent that the benefit of this covenant shall be attached to and run at law and in equity with the other lots excepting Lots numbered one hundred and fifty four and one hundred and seventy five to one hundred and eighty six (inclusive) on the said Plan of Subdivision and on Plans of Subdivision Numbers 12706 and 12707 and that the burden of this covenant shall be annexed to and run at law and in equity with each of the said Lots hereby transferred DOTH HEREBY for himself and his heirs executors administrators and transferees COVENANT with the said Percy Hague Holden his heirs executors administrators and transferees registered proprietor or proprietors for the time being of so much of the land described in the said Certificate of Title and in Certificate of Title Volume 4090 Folio 817834 as comprises the whole of the Lots expecting the said lots one hundred and fifty four and one hundred and seventy five to one hundred and eighty six (inclusive) on the said Plan of Subdivision and Plans of Subdivision Numbers 12706 and 12707 (other than the said lots hereby transferred) that he the said Duncan Innes McQueen his heirs executors administrators and transferees will not at any time erect or construct or allow to be erected or constructed more than one dwelling house upon each of the said lots hereby transferred which dwelling house together with any outbuildings and fences appurtenant thereto shall cost not less than the sum of Six hundred pounds AND will not at any time excavate or remove or permit or suffer to be excavated or removed from each of the said Lots hereby transferred any soil or other material except such as building construction or the laying out of a garden may necessitate AND will not at any time erect or build or cause to be erected or built on each of the said Lots or any part thereof any building other than a dwelling house church school or hall and outbuildings thereto respectively and will not carry on or permit or suffer to be carried on upon the said Lots or any part thereof any trade or business whatsoever.

17 The other Covenants are largely in the same terms as the First Covenant described above, and contain the following restrictions:

(a) no more than one dwelling shall be erected on any lot;

(b) the cost of construction shall be no less than six hundred pounds;

(c) soil or other material shall not be excavated (other than as part of the construction of a building);

(d) no building shall be erected on any lot other than a dwelling, church, school or hall; and

(e) no trade or business whatsoever shall be carried out on any lots.

18 The figure below shows the location of the Plaintiff's Land affected by the various Covenants, on which the Plaintiff proposes to construct a service station:[9]

19 By its Amended Originating Motion filed 19 August 2022, the Plaintiff seeks the following relief:[10]

(a) an order that the restrictive covenants contained in Instruments of Transfer 1435176, 1503993, 1806300 and 1417550 in the Register Book kept by the Registrar of Titles under the Transfer of Land Act 1958 (Vic) burdening part of the land known as 90 Refinery Road, Corio, Victoria, more particularly described in Certificate of Title Volume 8866 Folio 943 be discharged; or in the alternative

(b) an order that the restrictive covenants contained in Instruments of Transfer 1435176, 1503993, 1806300, and 1417550 in the Register Book kept by the Registrar of Titles under the Transfer of Land Act 1958 (Vic) burdening part of the land known as 90 Refinery Road, Corio, Victoria, more particularly described in Certificate of Title Volume 8866 Folio 943 be modified as follows:

(i) with respect to the covenant contained in Instrument of Transfer 1435176, by removing the words struck through and adding the words underlined:

... will not at any time erect or construct or allow to be erected or constructed more than one dwelling house upon any Lot hereby transferred which dwelling house together with any outbuildings and fences appurtenant thereto shall cost not less than the sum of six hundred pounds and will not at any time excavate or remove or permit or suffer to be excavated or removed from any Lot hereby transferred any soil or other material except such as building constructions or the laying out of a garden may necessitate and will not at any time erect or build or cause to be erected or built on any Lot hereby transferred or any part thereof any building other than a dwelling house, church, school, or hall or service station, industry and associated uses and outbuildings thereto respectively and will not carry on or permit or suffer to be carried on upon any such Lot or any part thereof any trade or business whatsoever ...

(ii) with respect to the covenant contained in Instrument of Transfer 1503993, by removing the words struck through and adding the words underlined:

...will not at any time erect or construct or allow to be erected or constructed more than one dwellinghouse upon any Lot hereby transferred which dwellinghouse together with any outbuildings and fences appurtenant thereto shall cost not less than the sum of Six hundred pounds And will not at any time excavate or remove or permit or suffer to be excavated or removed from any Lot hereby transferred any soil or other material except such as building construction or the laying out of a garden may necessitate And will not at any time erect or build or cause to be erected or built on any Lot hereby transferred or any part thereof any building other than a dwelling house, church, school or hall or service station, industry and associated uses and outbuildings thereto respectively and will not carry on or permit or suffer to be carried on upon any such Lot or any part thereof any trade or business whatsoever ...

(iii) with respect to the covenant contained in Instrument of Transfer 1806300, by removing the words struck through and adding the words underlined:

...will not at any time erect or -- construct or allow to be erected or constructed more than one -- dwellinghouse upon any lot hereby transferred which dwellinghouse together with any outbuildings and fences appurtenances thereto shall cost not less than the sum of £600 and will not at any time excavate or remove or permit or suffer to be excavated or removed from any Lot hereby transferred any soil or other material except such as building construction or the laying out of a garden may necessitate and will not at any time erect or build or cause to be erected or built on any such lot any part thereof any building other than a dwellinghouse, church, school, or hall or service station, industry and associated uses and outbuildings thereto respectively and will not carry on or permit or suffer to be carried on upon any such lot or any part -- -- thereof any trade or business whatsoever ...

(iv) with respect to the covenant contained in Instrument of Transfer 1417550, by removing the words struck through and adding the words underlined:

...will not at any time erect or construct or allow to be erected or constructed more than one dwelling house upon each of the - said lots hereby transferred which dwelling house together with any outbuildings and fences appurtenant thereto shall cost not less than the sum of Six hundred pounds AND will not at any time excavate or remove or permit or suffer to be excavated or removed from each of the said Lots hereby transferred any soil or other material except such as building construction or the laying out of a garden may - necessitate AND will not at any time erect or build or cause to be erected or built on each of the said Lots or any part thereof any building other than a dwelling house, church, school or hall or service station, industry and associated uses and outbuildings thereto respectively and will not carry on or permit or suffer to be carried on upon the said Lots or any part thereof any trade or business whatsoever ...

20 The Plaintiff proposes to construct a service station that dispenses hydrogen, gasoline and diesel via a bowser system on the Land ('Plaintiff's Proposal').[11] The Plaintiff's Proposal will also offer:

(a) fast charging stations for battery electric vehicles;[12]

(b) a public hydrogen refuelling facility on the south-western edge of the Land,[13] with renewable hydrogen produced using recycled water from Barwon Water's Northern Water Plant;[14] and

(c) a 2.5 MW electrolyser as well as hydrogen compression, storage and dispensing infrastructure.[15]

21 The part of the Land that is proposed to accommodate the Plaintiff's Proposal ('Development Site') is encumbered by the Covenants.[16] The figure below shows the location of the Development Site relative to the location of the relevant parent title:

22 An artist's impression of the Plaintiff's Proposal is presented in the exhibit to the Gerhardy Affidavit as follows:[17]

23 More detailed plans are exhibited to the Negri Affidavit as follows:[18]

24 The Plaintiff is the registered proprietor of the Land.[19] The Plaintiff acquired the Land from The Shell Company of Australia Ltd ('Shell Australia') in or around 2014, when the Plaintiff purchased Shell Australia's downstream business, including all of Shell Australia's downstream Australian assets.[20] The Land was vacant at the time Shell Australia was the registered proprietor and has remained vacant since the Plaintiff's acquisition in 2014.[21]

25 The Defendants are the registered proprietors of the United Petroleum Land, otherwise known as the land in PC374859F, more particularly described in Certificate of Title Volume 11538 Folio 907.[22] The Defendants purchased the United Petroleum Land in or about February 2013 for the purpose of erecting a United Petroleum service station.[23]

26 The United Petroleum Group operates service stations throughout Australia, directly on its own behalf or by appointed commission agents, franchisees or dealers.[24] The commission agents operate service stations as an agent of the United Petroleum Group.[25] The United Petroleum Group owns the petroleum products sold by the commission agents on behalf of the United Petroleum Group, and the commission agents own all of the convenience store goods.[26] The service station on the United Petroleum Land is operated by a commission agent pursuant to commission agency agreements.[27]

27 The Plaintiff's Proposal concerns the development of a service station on the Land located approximately 1.1km from the United Petroleum Group's service station, with dual frontage access to the Princes Highway and Refinery Road, Corio.[28]

Principles applicable to applications to modify or discharge covenants

28 As noted above, this application is made under s 84(1)(c) of the PLA. That section relevantly provides that the Court has the power, on application of any person interested in any land affected by any restriction under a covenant, to order (wholly or partially) to discharge or modify any such restriction, upon being satisfied that 'the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction'.

29 Whether the discharge or modification of the covenant would 'cause substantial injury' is a question of fact requiring consideration of the purpose of the covenant, and the benefits originally and presently conferred by the covenant, as against the impact of the proposed discharge or modification upon those benefits.[29] As Gillard J put it in Re Cook,[30] in respect of the assessment of 'substantial injury' under s 84(1)(c):

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 benefit so discovered.[31]

30 The injury must be 'real', in the sense that it is not unsubstantial or fanciful, in order to be 'substantial'.[32] A wide variety of matters including noise, privacy, accessibility of properties and other matters of amenity may be considered in appropriate cases.[33] As suggested in the passage from Re Cook quoted above, it is necessary to show that the 'substantial injury' is properly related to the benefits afforded by the covenants, in the sense that the 'substantial injury' derives from the proposed modification.[34]

31 Further, the Court may consider the 'precedential' effect of a proposed modification leading to similar applications within the estate or neighbourhood, resulting in a more widespread detrimental change.[35]

32 In Randell v Uhl,[36] Derham AsJ described the guiding principles to assessing whether a beneficiary of the covenant would likely suffer substantial injury from its discharge or modification in the following way:[37]

(a) a substantial injury must be a detriment to the benefitted land that is real and not fanciful. The requirement that the injury must be substantial is intended 'to preclude vexatious opposition cases where there is no genuineness or sincerity or bona fide opposition on any reasonable grounds'. That does not mean, however, that s 84(1)(c) of the PLA is restricted to dealing with vexatious or frivolous objections. Although the restriction of s 84(1)(c) of the PLA to 'substantial' injury would enable the weeding out of vexatious objections to the modification or removal of a covenant, the dichotomy in the section is not between vexatious and non-vexatious claims but is between cases involving some genuinely felt but insubstantial injury, on the one hand, and cases where the injury may truly be described as substantial, on the other;

(b) the substantial injury relates to practical benefits, being any real benefits to the person entitled to the benefit of the covenant. It is not sufficient for a plaintiff to merely prove that there will be no appreciable decrease in the value of the property that has the benefit of the covenant;

(c) substantial injury may arise from the order for modification of the covenant being 'used to support further applications resulting in further encroachment and in the long run the object sought when the covenant was imposed [being] completely defeated'. This consideration is referred to as the 'precedent value'; and

(d) whether there will be substantial injury is to be assessed by comparing:

(i) the benefits initially intended to be conferred and actually conferred by the covenant; and

(ii) the benefits, if any, which would remain after the covenant has been discharged or modified;

(e) if the evidence establishes that the difference between the two will not be substantial, the plaintiff has established a case for the exercise of the Court's discretion under s 84(1)(c) of the PLA;

(f) it is relevant to consider evidence of statutory planning provisions to the extent they show what realistically will be the result of the removal or modification of the covenant because 'it would be artificial and wrong to pay no heed at all to the reality of the situation';

(g) in considering whether the plaintiff has satisfied the Court that there will not be substantial injury:

(i) town planning principles and considerations are not relevant;

(ii) the absence of objectors to the discharge or modification of a covenant will not necessarily satisfy the onus of proof; and

(iii) each case must be decided on its own facts, and each covenant should be construed on its own terms and having regard to the particular context in which it was created;

(h) if the plaintiff satisfies the Court that there will be no substantial injury to the relevant persons, the Court has a residual discretion to refuse the application. The Court in exercising its discretion, may consider town planning principles and the precedent value.

33 In Barport Pty Ltd v Baum,[38] the Court of Appeal described the constructional principles that apply to construing a restrictive covenant on title. The Court observed that:[39]

It is not necessary to dwell on the constructional principles that apply to construing a restrictive covenant on title. Plainly, the text of the covenant is crucial. As with any constructional exercise, context plays a role and the words should be construed by reference to the instrument as a whole and not in the abstract, but by reference to the location of the physical characteristics of the properties which are affected by it. However, context may not be used to ascertain or elucidate the subjective intentions or expectations of the covenantor. The purpose of the covenant will be important in so far as it can fairly be discerned from the instrument as a whole.

34 None of the witnesses called by the Defendants were required by the Plaintiff for cross-examination. Their affidavits and, where applicable, expert reports, were tendered without challenge by the Plaintiff.

35 Similarly, the affidavits of Mr Gerhardy, Mr Watson and Mr Davis were tendered by the Plaintiff without them being required by the Defendants to attend for cross‑examination.

36 I consider that Mr Negri and Ms Milner, the expert town planners who provided expert reports and attended the trial for cross-examination by the Defendants, each gave their evidence truthfully and honestly. They appeared to me to be seeking to assist the Court. While they both adhered to the opinions expressed in their respective reports, they made concessions where appropriate.

37 The evidence of each of the witnesses relied upon by the parties is summarised below.

38 Mr Gerhardy is an employee of the Plaintiff.[40] He holds the role of Geelong Energy Hub Projects Manager.[41] He has held that role since 2019.[42] He has worked and been involved in the energy industry since 1988, when he became an employee of Shell Australia.[43]

39 Mr Gerhardy provides some background as to the manner in which the Plaintiff became the registered proprietor of the Land. Mr Gerhardy also elucidates the nature of the Plaintiff's Proposal including its development plans. He deposes that:

(a) he first became familiar with the Land in 1998 when it was owned by Shell Australia;[44]

(b) in or around 2014, the Plaintiff purchased Shell Australia's downstream business, including all of its downstream assets in Australia.[45] In doing so, the Plaintiff acquired the Land;

(c) the Plaintiff's Proposal for a service station on the Land forms part of the Plaintiff's transition to renewables and will represent the Plaintiff's first step in seeking to establish the "Geelong Energy Hub", which would see green hydrogen and solar energy facilities established alongside the existing Geelong Refinery, which the Plaintiff operates;[46] and

(d) the Plaintiff's Proposal is said to be located on part of the Land which he understands was historically the subject of a failed subdivision project.[47]

40 Mr Watson was engaged on behalf of the Plaintiff in an advisory capacity to, amongst other things, provide a title analysis in respect of the Land.[48] Mr Watson is an experienced Australian Legal Practitioner and principal of a law firm with expertise in property related matters.[49] He deposes to the following:

(a) the Land is comprised in TP874212U, having been created by Instrument of Transfer D935848 on 14 January 1971.[50] The land in TP874212U is consistent with the land that was formerly described in Lot 12708, save for the exclusion of former Lot 21 and Lot 22 on Plan 12708 ('Telstra Land'), which was acquired by the Commonwealth of Australia in 1954 pursuant to the Transfer of Land (Acquisitions) Act 1948 (Vic);[51]

(b) the purpose of the creation of TP874212U appears to have been to include the discontinued portion of Refinery Road within the Fee Simple Estate of the registered proprietor pursuant to Application G283037;[52]

(c) Lot Plan 12708 is a sibling plan of Lot Plans 12705, 12706 and 12707, which together sought to subdivide the Land and the area immediately to its north in the shape of a pointed triangle bounded by Princes Highway to the west and the Geelong Railway (formerly Railway Avenue) to the east;[53]

(d) the land subdivided by the Lot Plans was in the land in:

(i) Certificates of Title Volume 5221 Folio 122 ('Parent Title 1'); and

(ii) Certificate of Title Volume 4090 Folio 834 ('Parent Title 2')

(together, the 'Parent Titles');[54]

(e) the Covenants account for every lot that was previously described within Lot Plan 12708;[55]

(f) the Land falls within the area previously contained in Parent Title 1. A Register Search Statement for the Land recites 10 parent titles, some of which were issued directly from Parent Title 1, whereas others are the consolidation of former parent titles, and/or passed through other folios in the Register in the period between the initial transferal out of Parent Title 1 and eventual consolidation of the Land in 1971;

(g) it is sufficiently clear that the Land as described is consistent with that part of Parent Title 1 that was represented as Lot Plan 12708, save for the exclusion of the Telstra Land;

(h) the Instrument of Transfer 1885889 ('IT1885889') effected the transfer of numerous lots described within Lot Plans 12706, 12707 and 12708, including Lot 182 on Lot Plan 12708;[56]

(i) Lot 182 is now known as Lot 68 on TP874212U, part of which concerns land proposed to be developed by the Plaintiff in the event that the Covenants are modified or discharged;[57]

(j) IT1885889 contains two series of restrictions, the first of which only burdens lots transferred out of LP 12705. The second, concerning the number of permitted dwellings, cost, removal of soil and the like, prohibited types of buildings, and restriction as to use (no trade or business). In each respect, these excluded application to certain lots, including Lot 182.[58] Accordingly, Mr Watson deposes that it appears Lot 68 on TP874212U is not burdened by any restriction in IT1885889.[59] Mr Watson deposes that this is consistent with the Historic Register Search Statement for the Land, which includes an image of the original paper title describing the lots encumbered by IT18858889 as Lots 49 to 73 (both inclusive), Lots 76 to 79 (both inclusive) and Lot 183;[60]

(k) notwithstanding that the Covenants were entered into over a twelve-year period from 1929 to 1941, they are consistent with one another, both as to the restrictions created, and the conferral of benefit;[61]

(l) the Covenants conferred benefit on the lots then in Lot Plans 12706, 12707 and 12708.[62] Mr Watson deposes that, given that the Land comprises former Lot Plan 12708, the benefit of the Covenants is located within 12706, 12707 and the remainder of 12708 ('Benefiting Lot Plans').[63]

(m) each of the Covenants specifically excludes Lots 154 and 175 to 186 (being lots spread across the Benefiting Lot Plans and Lot 12708) from taking the benefit of the Covenants;[64]

(n) the covenant in Instrument of Transfer 1885889 contains references in the margins of the first and second pages which indicate that this Court has, on at least two occasions, discharged it with respect to certain lots burdened thereby;[65]

(o) the covenants in Instruments of Transfer 1446006, 1440043, 1451627, 1497884, 1779318, 1711666, 1450947, 1388710, 157578 and 1487333 were discharged by orders of this Court;[66]

(p) Registration of Plan of Subdivision 426481F effected the removal of restrictive covenants burdening lots in the former Lot Plan 12707, by way of an amendment to the Greater Geelong Planning Scheme;[67]

(q) the restrictive covenant contained in Instrument of Transfer 1397003 affecting the former Lot 199 was removed pursuant to Application AJ70233J, under s 22 of the Subdivision Act 1988 (Vic) on 2 July 2012;[68] and

(r) when the Telstra Land was acquired by the Commonwealth of Australia in 1954, the restrictive covenant contained in Instrument of Transfer 1503993 appears to have been removed by way of s 3 of the Transfer of Land (Acquisitions) Act 1948 (Vic), as noted on the transfer page of Certificate of Title Volume 7268 Folio 404.[69]

41 During the course of the hearing, I requested that the parties provide me with a map of the Parent Titles showing the various covenants affecting lots on the Parent Titles and their later removal. I was subsequently provided with the following diagram:

42 Mr Davis is the managing partner at the law firm engaged on behalf of the Plaintiff.[70] He is the solicitor with day-to-day carriage of this proceeding on behalf of the Plaintiff.[71]

43 Mr Davis's evidence describes the notification procedure undertaken by the Plaintiff to notify relevant persons of the Application that is the subject of this proceeding, and the manner in which he became aware of the Defendants' opposition to the Plaintiff's Application. In this regard, Mr Davis deposes the following:

(a) by orders of this court made 16 June 2022, the Plaintiff was required to give direct notice of the Application to various persons.[72] Compliance with those orders was completed by 23 June 2022;[73]

(b) in response to providing notice of the Plaintiff's Application, on 27 June 2022, he received a letter via email from the Defendants' solicitors requesting copies of various documents relating to this proceeding;[74]

(c) on 29 June 2022, he provided the Defendants' solicitors with various documents in response to that letter;[75] and

(d) on 13 July 2022, he received a letter via email from the Defendants' solicitors advising that the Defendants objected to and opposed the Plaintiff's Application.[76]

44 Mr Negri is a qualified and experienced town planner.[77] He was engaged on behalf of the Plaintiff to provide his opinion as an expert town planner in relation to the discharge, or in the alternative, modification, of the Covenants.[78] Mr Negri provided an expert report ('Negri Report') to the solicitors acting on behalf of the Plaintiff in or around June 2022.[79]

45 In the Negri Report, Mr Negri opines on the purpose of the Covenants as follows:

(a) the purpose of the Covenants is to establish and maintain a predominantly residential estate characterised by single dwellings on individual allotments;[80]

(b) the requirement that the dwelling is of a cost no less than 600 pounds is intended to establish a quality benchmark.[81] Mr Negri also points to the restriction in relation to quarrying.[82] He opines that, whilst a limited range of uses other than dwelling is permitted (such as church, school and hall), the lots cannot be used for any form of trade or business;[83]

(c) the church, school and hall use are community uses that would potentially have contributed to the amenity of the residential estate.[84] He says the residential estate was not developed in accordance with this purpose. No dwellings occupy lots within the area defined by the Parent Titles;[85]

(d) the Parent Titles are located within a land use buffer to the refinery in which sensitive uses (such as dwellings) are discouraged.[86] Mr Negri says the Land is located within the Industrial 1 Zone.[87] Dwelling is a prohibited use in that zone;[88] and

(e) the telephone exchange (on the Telstra Land) that benefits from the Covenant is also included in the Industrial 1 Zone.[89] The other benefiting properties are included in the Commercial 2 Zone.[90] Dwelling is a prohibited use in the Commercial 2 Zone.[91] The benefiting properties are not occupied by dwellings.[92]

46 Mr Negri opines that, having regard to the combined prohibitions under the group of Covenants and the Industrial 1 Zone, the Land can only be used for the purpose of school (but not a primary school or secondary school), hall or church.[93] He says the practical benefit that endures, based on the interplay between the planning context and the Covenants' restrictions, is the restriction on the use of the Land for this limited range of uses.[94] Mr Negri states the following as the basis for this opinion:

(a) the practical benefit that was originally intended to be conferred by the group of Covenants related to the purpose of establishing a residential estate characterised by a single dwelling on each allotment.[95] He says that the prohibition on trade and business supported the outcome sought for the residential estate and provided potential amenity benefits in relation to land use conflicts;[96]

(b) the limit on the number of dwellings and the benchmark minimum construction costs provides neighbourhood character benefits;[97]

(c) the town planning context that has emerged following the creation of the Covenants has not supported this purpose;[98]

(d) the benefits are unable to be realised as "dwelling" is a prohibited use in the Industrial 1 Zone and the Commercial 2 Zone;[99] and

(e) "Dwelling" is an inappropriate use in the buffer area to a refinery.[100]

47 Mr Negri further opines that if the Covenants were to be discharged, the land use and development opportunities that will arise from the proposed modification to the Covenants will not cause substantial injury to the persons entitled to the benefit of the restriction.[101] He expresses this opinion on the basis that:

(a) the benefitting properties (with the exception of land owned by the Plaintiff) are used for various commercial, service and industrial purposes.[102] These properties are included in the Industrial 1 Zone (telephone exchange) and Commercial 2 Zone in recognition of these uses;[103]

(b) the use and development of the Development Site in accordance with the provisions of the Industrial 1 Zone would be compatible with these uses;[104]

(c) there is separation between the benefitting properties (excluding the land owned by the Plaintiff) and the Development Site;[105]

(d) the telephone exchange building faces Princes Highway and has a side wall orientated towards the Development Site;[106]

(e) the other properties that benefit from the Covenants are orientated towards respective street frontages (Princes Highway and School Road), and are not orientated towards the Development Site.[107] The closest of these properties (those on the south side of School Road) are developed with buildings that have rear wall and service areas orientated towards the Development Site;[108]

(f) the Development Site will potentially have access to Princes Highway, Station Street or Refinery Way.[109] The traffic related to vehicles using these access points will not be apparent from the benefitting properties, given the separation distance;[110] and

(g) the activity associated with the use and development of the Development Site, in accordance with the provisions of the Industrial 1 Zone, will not substantially injure benefitting properties given the land uses conducted at these properties, the substantial separation distances, and the orientation of buildings.[111]

48 Mr Negri opines that, if the Covenants were to be modified in the manner proposed by the Plaintiff, the land use and development opportunities that will arise from the proposed modification to the Covenants will not cause substantial injury to the persons entitled to the benefit of the restriction.[112] He forms this opinion on the basis that:

(a) the proposed modification to the group of restrictive Covenants will enable the Development Site to be used and developed for a more limited range of uses permitted in the Industrial 1 Zone (service station, industry and associated uses);[113]

(b) the indicative plans detail a potential land use and development outcome that would be possible in the event that the Covenants are modified in the form sought;[114]

(c) the Plaintiff's Proposal for use of the Land for the purposes of developing a service station is similar to the conventional service stations that occupy properties with the benefit of the Covenants to the north of School Road;[115]

(d) the Development Site is also located diagonally opposite an existing service station facing Princes Highway;[116]

(e) the Plaintiff's Proposal for use of the Land for the purposes of developing a service station is a use that is compatible with the highway context and the range of uses that occupy properties in the locality, including properties with the benefit of the group of Covenants;[117]

(f) the industrial activity (production and storage of hydrogen) is associated with the service station use.[118] The infrastructure associated with this aspect of the use is to be integrated into the overall design of the facility.[119] It is a use that is compatible with the range of uses that occupy the benefitting properties;[120]

(g) the Plaintiff's proposed service station will have access to Princes Highway and Refinery Road.[121] Traffic associated with this access will not be apparent from the benefitting properties, given the separation distance;[122]

(h) the Plaintiff's proposed service station will be located within a landscaped setting. It will not detract from the visual amenity of the locality. It is, in any event, well distanced from the benefitting properties and will not be visually apparent from these properties;[123] and

(i) given the substantial separation distance, noise and general nuisance associated with the Plaintiff's proposed use of the Land would not cause injury to the properties with the benefit of the Covenants.[124] In any event, the properties with the benefit of the Covenants are not occupied by uses that are sensitive to noise and general nuisance.[125]

49 The letter of instruction to Ms Milner from the Plaintiff's solicitors, dated 8 February 2023, instructs Ms Milner to prepare a peer review of the Negri Report.[126] Ms Milner is a qualified town planner and has practiced in that capacity since 2001.[127] Ms Milner provided an expert report ('Milner Report') to the solicitors acting on behalf of the Plaintiff in or around February 2023.[128]

50 Ms Milner concurs with the Negri Report and considers it to be a thorough and appropriately informed assessment taking into consideration the matters relevant to the Land and the planning context.[129] The Defendants objected to this part of Ms Milner's evidence, characterising it as "bolstering". After hearing the parties in relation to this objection, I ruled that it was a matter going to weight. There was no vice in Ms Milner looking at Mr Negri's report and stating whether she agreed or disagreed with it. I can review Mr Negri's evidence and see whether I agree with it, and take into account Ms Milner's evidence on the substantive issues, but I do not need to know what she thinks in qualitative terms about the Negri Report.

51 Ms Milner opines that the purpose and intent of the Covenants was to:[130]

(a) support the establishment of part of a larger residential neighbourhood;

(b) achieve a neighbourhood character distinguished by detached dwellings of a particular value, on their own lots;

(c) support the neighbourhood with community facilities; and

(d) protect the amenity of the residential neighbourhood from the detrimental amenity consequences of trades or business operating in the same area.

52 Ms Milner opines that she does not consider the restriction on "trade and business" to have been included to protect the trade, business, or commercial interests of beneficiaries.[131] In that regard, she says that with the passage of time, a residential neighbourhood was not developed and instead:[132]

(a) the lots comprising the Land were variously transferred between 1929 and 1941;

(b) the Shell Geelong Refinery was established, which she says was a significant influence on the suitability and attractiveness of the Land and any beneficiaries' land for residential purposes; and

(c) the beneficiaries' land was used and developed for a range of industrial and commercial activities, which together serve to provide a buffer to Corio's established residential area from the Geelong Refinery and associated industrial activities established in its environs.

53 Ms Milner opines that, despite the above, the Covenants have maintained an expectation for beneficiaries about the residential or community use of the Land.[133]

54 Ms Milner opines that the Land and the beneficiaries' land has been zoned for industrial and commercial purposes, supporting the established range of non-residential uses and development, and creating a strategically significant industrial precinct.[134] She says that, regardless of the Covenants, the relevant planning scheme has been applied to the Land and surrounding benefiting area to prohibit residential use and development, while providing support for a range of industrial and commercial activities established at and surrounding the Geelong Refinery.[135] Ms Milner says the circumstances of this matter are such that the contemporary land use and planning context contradicts the purpose and intent of the original restriction, particularly as it explicitly sought to establish a residential neighbourhood and prohibit trade and business.[136]

55 Ms Milner opines that while the planning controls would not themselves prohibit some use of the Land in compliance with the Covenants, the planning controls prohibit the original purpose and intent of the restriction for a high amenity residential neighbourhood.[137] In the context of those considerations, Ms Milner opines that the Covenants might be held to be obsolete.[138]

56 With respect to the assessment of whether there is substantial injury, Ms Milner opines that the proposed changes of uses that would be permitted by modification of the Covenants would not materially or detrimentally impact upon the use and development of the beneficiaries' land when assessed against the Covenants' purpose.[139] Ms Milner opines that, in respect of the change to the character of the area, the presence of further industrial activity or a service station would change the existing undeveloped and vegetated character of the Land, but would continue to complement the character of the broader surrounding precinct to the east of the highway.[140]

57 Ms Milner opines that, in circumstances where the Court is satisfied that the Covenants ought to be discharged or modified in the manner sought by the Plaintiff, the Greater Geelong Planning Scheme will control the future use and development of the Land in any event.[141] She says the planning policy framework provides that beneficiaries would be assured that the Land's future use and development would be regulated in line with planning controls.[142] Ms Milner says, further, that the Land's use and development as a service station would also be subject to relevant contemporary legislation and safety standards which operate to regulate and manage major hazard facilities.[143]

58 Mr Szymczak provided evidence on behalf of the Defendants. He is the Chief Executive Officer of United Petroleum.[144] He begins his evidence by providing some general background information about the United Petroleum Group, deposing as follows:

(a) businesses operated from United Petroleum service station sites throughout Australia are either operated directly by United Petroleum or on its behalf by appointed Commission Agents, franchisees and dealers;[145]

(b) the Commission Agents operate the service stations as an agent of United Petroleum;[146]

(c) United Petroleum owns the petroleum products sold on behalf of it by Commission Agents, and the Commission Agent owns all of the convenience store goods sold by the business;[147]

(d) United Petroleum imports most of its fuel products, which are shipped to various terminals around Australia for storage and distribution.[148]

59 Mr Szymczak then deposes that, at United Petroleum service stations around Australia, customers can purchase fuel products including Premium 98, Premium 95, Unleaded 91, Unleaded 91 Low Aromatic, Unleaded + ethanol, E85 Race Blend, Premium Diesel, Diesel, AdBlue and LPG ('Fuel Products').[149] His evidence is that the United Petroleum Corio service station sells all of these Fuel Products.[150]

60 Mr Szymczak deposes that each United Petroleum service station including the United Petroleum Corio service station has a convenience store. He says that the product offerings sold throughout the convenience stores include confectionary products, tobacco products, beverages, general household food products and consumables, pies and hot food products ('Non-Fuel Products').[151]

61 Mr Szymczak deposes that the United Petroleum Corio service station was built and completed in or about September 2016 at an approximate cost of $4 million.[152] He says that United Petroleum considers this service station as a flagship site and one of its premium stations.[153] Mr Szymczak deposes that the Defendants' land is leased to United Petroleum pursuant to a written lease,[154] and that since it opened, the United Petroleum Corio service station has been operated by a Commission Agent pursuant to commission agency agreements.[155]

62 Mr Szymczak deposes that the competitors in the vicinity of the United Petroleum Corio service station are The Metro service station located at 446-450 Princes Highway, Corio, the BP service station located at 298-304 Princes Highway, Corio, the Ampol service station located at 248 Princes Highway, Corio, and the 7/11 located at 83B Purnell Road, Corio.[156]

63 Mr Szymczak deposes that the Corio and Geelong retail fuel market is very competitive and the fuel prices in Corio are for that reason typically similar.[157] He says that fuel transportation costs to the various United Petroleum service stations vary depending on the service station's distance from the nearest United Petroleum terminal.[158]

64 Mr Szymczak deposes that, based on his experience as Chief Executive Officer of United Petroleum, it is expected that customers who would otherwise frequently visit the United Petroleum Corio service station would also have the option of choosing to go to the Plaintiff's planned service station.[159] He says that, if less customers were to visit the United Petroleum Corio service station, this would necessarily adversely affect the profitability of the site because of the reduction in sale of Fuel Products and Non-Fuel products.[160]

65 Dr Luke Wainscoat was engaged on behalf of the Defendants. By letters of instruction dated 14 November 2022[161] and 16 January 2023,[162] Dr Wainscoat was instructed to address the following questions:

(a) what effect (if any) the Plaintiff's proposed service station development and operation would have on competition and markets, and the revenue and profit of the United Petroleum Corio service station; and

(b) what effect (if any) the Plaintiff's proposed service station development and operation would have on the freehold value of the United Petroleum Land, and the value of the United Petroleum Land sold as a going concern as a tenanted property, and the value of the United Petroleum Land more generally.

66 Dr Wainscoat provided his expert report ('Wainscoat Report') to the Defendants' solicitors in or around late January 2023.[163] Dr Wainscoat is an economic consultant with substantial experience and training in the economic analysis of markets, particularly in competition and regulatory economics.[164] He has been employed as an economic consultant for over 11 years,[165] and has provided economic advice in relation to competition matters across many industry sectors.[166]

67 Dr Wainscoat's report is very detailed. I have not set out those details here, rather I have focussed on setting out his conclusions. My approach in this regard will be explained later in these reasons.

68 Dr Wainscoat opines that the closest competitors to the United Petroleum Corio service station are those on the Princes Highway, from the junction with the M1 to the junction with Bacchus Marsh Road and Cox Road.[167]

69 Dr Wainscoat opines that changing the Covenants will lead to the entry of a new service station in close proximity to the United Petroleum Corio service station. He says that increasing the number of service stations in a market raises the intensity of competition, reducing prices and market shares, based upon:

(a) the application of the appropriate economic models of competition; and

(b) the empirical literature examined by him in relation to how competition is affected by the number of service stations in local areas.

70 Dr Wainscoat opines that he expects the introduction of the proposed service station will increase competition in the relevant markets to a significant degree because:[168]

(a) the new service station will be on the same road as the United Petroleum Corio service station with the vast majority of vehicles going past the proposed Viva service station;

(b) there are relatively few service stations to begin with - the change in the Covenants would increase the number of firms with service stations on the same road from four to five, and in the market from five to six;

(c) the Plaintiff has a similar brand, location and product offering to United Petroleum, implying a significant degree of substitutability; and

(d) the Plaintiff will have relatively low costs for transporting fuel to its proposed service station because it is located close to its refinery.

71 Dr Wainscoat opines that he expects the introduction of the proposed Viva service station will lead to:[169]

(a) lower prices charged at the United Petroleum Corio service station due to increased competition, reducing revenue and profits earned at the United Petroleum Corio service station, all else being equal; and

(b) a reduction in market share and quantity of sales for the United Petroleum Corio service station, reducing revenue and profits earned at the service station, all else being equal.

72 Dr Wainscoat opines that the combined effect of a reduction in price and quantity sold will result in lower revenue and profits earned at the United Petroleum Corio service station.[170]

73 Dr Wainscoat opines that increases in competition can be expected to lead to lower prices for firms in the market, and therefore lower margins too. He concludes that the entry of the proposed Viva service station is likely to lead to lower prices being charged at the United Petroleum Corio service station, and therefore lower margins earned at the service station.[171]

74 Dr Wainscoat opines that the entry of the Viva service station will cause the market share of the United Petroleum Corio service station to fall, based on his application of the appropriate economic models of competition.[172]

75 Dr Wainscoat opines that the reduction in the United Petroleum Corio service station's prices, margins and market share will lower its profit, affecting the value derived from the service station, and also the various businesses associated with the service station.[173]

76 Dr Wainscoat opines that the development and operation of the Plaintiff's proposed service station would reduce the future cash flows that a tenant would expect to achieve, and so reduce its maximum willingness to pay for rent.[174] He says that a lower willingness to accept to pay will result in a lower transaction value; i.e., rent paid by the tenant, without other changes to the transaction. Dr Wainscoat opines that this reduces the cashflow that United Petroleum could obtain from the United Petroleum Land, thus reducing the value of its freehold ownership of that land.[175]

77 Dr Wainscoat opines that the Plaintiff's development and operation of the proposed service station would reduce the rent that an owner could obtain from leasing the United Petroleum Land, thus reducing its future cash flow and the value of its freehold ownership in the land. Consequently, he says that the proposed Viva service station would reduce the maximum amount that a potential purchaser would be willing to pay for the United Petroleum Land, if it was sold as a going concern as a tenanted property.[176]

78 Dr Wainscoat opines that a reduction in the profits that can be earned from the United Petroleum Corio service station would reduce the value of the United Petroleum Land, as long as the highest value of the land was still as a service station. He says that, at some point, if the profits kept falling, the highest value of the land will no longer be as a service station. Dr Wainscoat says that any further reduction in profits for the United Petroleum Corio service station, beyond that point, would not affect the value of the United Petroleum Land.[177]

79 Mr Murphy was engaged on behalf of the Defendants by letters of instruction from the Defendants' solicitors dated 11 January 2023[178] and 31 January 2023.[179] Mr Murphy provided a copy of his report to the Defendants' solicitors on or around 17 February 2023 ('Murphy Report').[180] He has been a Certified Practising Valuer since December 2006, and has been involved in the valuation and consultancy of service stations since 2003. He is recognised as a specialist valuer and assessor of petrol stations and carwashes, regularly undertaking freehold and rental assessment valuations of assets on behalf of various clients.[181]

80 Like the Wainscoat Report, the Murphy Report is quite detailed. I have not set out the details here. Rather, I have focussed on his conclusions. My approach in this regard will be explained later in these reasons.

81 He opines that if the Covenants are discharged or modified, and the proposed service station is developed on the Land, it is highly likely that this would have a direct negative impact on the United Petroleum Land.[182] He says that the proposed Viva service station would be considered the biggest competitor to the United Petroleum Corio service station. Mr Murphy says, as is typical with increased competition, this would result in a reduction in market share for the United Petroleum Corio service station, which in turn would result in a reduction in revenue and profit to United Petroleum. As petrol station rentals tend to directly reflect the trading performance, this would result in lower maintainable market rental, which in turn would lead to a lower investment return, and a lower market value for the United Petroleum Land would be the result.[183]

82 Mr Murphy provides his opinion in respect of three proposed scenarios:[184]

(a) assuming the status quo is maintained, in other words, the Covenants are neither discharged nor modified and the Land remains unaffected ('Scenario 1');

(b) assuming the Covenants are discharged or modified, and the Plaintiff's proposed service station is constructed and supplies fuel products and electric vehicle charging ('Scenario 2'); and

(c) assuming the Covenants are discharged or modified, and the Plaintiff's proposed service station is constructed and supplies fuel and non-fuel products which are the same or substantially the same as those sold at the United Petroleum Corio service station ('Scenario 3').

83 Mr Murphy opines that, in the event that Scenario 2 eventuates, it is reasonable to expect that:

(a) it would directly result in a reduction in diesel sales/throughput of between 14% and 20%;[185] and

(b) it would be reasonable for the reduction of the overall convenience store sales to be between 2.5% and 4.8%.[186]

84 Mr Murphy opines that, for Scenario 2, and having regard to the report of Dr Wainscoat, it is reasonable to expect that in the event the Plaintiff's facility is constructed with the full range of fuel products that the United Petroleum facility offers, this would directly result in a reduction in total fuel throughput of between 14% and 20%.[187]

85 Mr Murphy opines that if the Covenants are discharged or modified, as proposed by the Plaintiff, it will have the following impact on the United Petroleum Land:

(a) the market rental of United Petroleum Land would fall by $30,000 to $40,000 per annum, if the Plaintiff was to operate a service station that offers fuel products and electric vehicle charging as contemplated in Scenario 2;[188]

(b) the market rental of United Petroleum Land would fall by $85,000 to $110,000 per annum, if the Plaintiff operated a similar service station to the United Petroleum Corio service station, selling fuel and non-fuel products as contemplated in Scenario 3;[189]

86 Further, Mr Murphy opines that the market values, subject to the existing lease for the United Petroleum Corio service station, as at 6 February 2023, are as follows: [190]

(a) Scenario 1: $11,200,000;

(b) Scenario 2: $10,400,000 to $10,600,000; and

(c) Scenario 3: $9,000,000 to $9,500,000.

87 Based on this material, the inferential calculation is that if Scenario 2 was to come to fruition, it would result in a decline in value of the United Petroleum Land of $600,000 to $800,000, and if it were Scenario 3, that would result in a decline of $1.7m to $2.2m.

88 The Plaintiff accepts that it has the burden of proving, as a matter of fact, that the proposed discharge or modification will not substantially injure beneficiaries.[191] In effect, the Plaintiff must prove a negative.[192]

89 The Plaintiff relies on Randell v Uhl (discussed above) as instructive to the proper approach to the operation of s 84(1)(c) of the PLA.[193] The Plaintiff submits that the question of injury must be understood in the context of the Covenants' purpose.

90 The Plaintiff submits that the words 'initially intended to be conferred' from Randell v Uhl (referred to in paragraph 32(d) above) are critical. It says, in that case, His Honour found that the test for injury must be seen through the prism of the covenant&#821[194] purpose.194

91 The Plaintiff relies on Jiang v Monaygon Pty Ltd[195] and says, in that case, Derham AsJ found that a single dwelling covenant was not a de facto height control, because the original purpose of the covenant was to control density and not height.[196] The Plaintiff says it was not seriously contended by Jiang v Monaygon that any height restriction could be implied into the covenant.[197]

92 In the present case, the Plaintiff says that the purpose of the Covenants was to create a quality residential community free from abandoned clay pits.[198]

93 The Plaintiff relies on the evidence of Mr Negri where he opines that:[199]

(a) the purpose of the Covenants is to establish and maintain a predominantly residential estate characterised by single dwellings on individual allotments;

(b) the requirement that the dwelling costs not less than 600 pounds is intended to establish a quality benchmark;

(c) there is also a restriction in relation to quarrying; and

(d) whilst a limited range of uses other than dwelling is permitted, the lots cannot be used for any form of trade or business. The church, school and hall use are community uses that would potentially have contributed to the amenity of the residential estate.

94 The Plaintiff says, however, that Mr Negri also notes that such a purpose was never fulfilled, and having regard to the relevant planning controls and policies and surrounding development, it is now never likely to be realised (emphasis in underlining added in submissions):

1. The residential estate was not developed in accordance with this purpose. No dwellings occupy lots within the area defined by the [P]arent [T]itles.
2. The [P]arent [T]itles are located within a land use buffer to the refinery in which sensitive uses (such as dwelling) are discouraged.
3. The Development Site is located within the Industrial 1 Zone. Dwelling is a prohibited use in this zone. ...
4. Given the current land use and development of the [P]arent [T]itles, the location within the land use buffer of the refinery and the prohibition on the use of both the burdened land and the benefitting land for dwellings, the purpose of the covenant, to establish and maintain a predominantly residential estate characterised by single dwellings on individual allotments, is unable to be attained.[200]

95 The Plaintiff submits that it is therefore difficult to envisage an injury to current beneficiaries concomitant with the original purpose of the Covenants.[201] Further, the restriction on trade or business on the Land was not intended to protect the commercial interests of the covenantee or beneficiaries. Rather, the purpose of the restriction was to protect the residential character of the neighbourhood.[202]

96 The Plaintiff says this distinction is revealed by comparing restrictions on trade or businesses in different contexts. For example, in Specialist Diagnostic Services Pty Ltd v Healthscope Ltd,[203] a covenant in a lease restricting particular trade was clearly designed to protect the covenantee's commercial interests. The covenant in Specialist Diagnostic pertained specifically to trade or business that would compete with the tenant's business:[204]

Subject to the terms of clause 20.2 the Landlord must not during the term of this lease or any extension, renewal or over holding of this Lease:

(a) carry on or be concerned, engaged, interested or employed directly or indirectly in a trade, business or calling similar to that conducted by the Tenant in the Premises at the Commencement Date;

(b) grant a lease, licence or any right to occupy any part of the Building to any person other than the Tenant for any trade business or calling similar to the use to which the Premises are put by the Tenant or such other trade business or calling conducted by the Tenant in the Premises[.]

97 The Plaintiff submits, in comparison, that Bell J in Freilich v Wharton[205] considered a restriction on trade or business in a covenant as having intended to ensure the residential character of the relevant estate.[206]

98 The relevant covenant was in the following terms:

her heirs executors administrators or transferees will not at any time or times hereafter quarry on the said land or cart or carry away any stone gravel soil or sand therefrom or make any excavations therein except such as may be necessary for laying the foundation of any building on the said land AND FURTHER that she or they will not erect more than one house on the said land and that any house so erected shall be of stone or brick or brick and stone with roof of slates or tiles on the main portion thereof at a cost of not less than six hundred pounds exclusive of stables and outbuildings and that such building shall not be used for any trade or business AND FURTHER that [the Transferee] her heirs executors administrators and transferees will not subdivide the said Lot into smaller allotments nor reduce the frontage thereof to a smaller frontage than appears on the said Plan of Subdivision.[207]

99 According to the Plaintiff,[208] his Honour said that it was clear from the terms of the covenant that the intended purpose was to be achieved not only by ensuring that any building on a burdened property would be a house, but that the purpose was also to be achieved by 'prohibiting the use of the house for any trade or business. The requirement that any building be a house which is not to be used for any trade or business was intended to ensure the residential character of the estate'.[209]

100 The Plaintiff submits that, consistent with this reasoning, Myers J in Heaton v Loblay[210] concluded that where a covenant does not intend to protect the value of a property, any depreciation in property value as a result of the modification or discharge of the covenant should not be relevant. His Honour stated that:

Expert evidence has been tendered on behalf of the defendants to prove that the modification would not depreciate the value of the plaintiff's property. I do not pause to consider that point because loss of value is not necessarily a decisive factor and where, as in this case, the covenant was not exacted to preserve the value of the covenanter's land but for another and different purpose, value is not a factor at all.[211]

101 The Plaintiff says that this reasoning was applied by Gillard J in Re Cook:[212]

It seems to me that in order to succeed under paragraph (c) the applicant cannot establish his case by merely proving that there will be no appreciable injury or depreciation in value of the property to which the covenant is annexed. If it were proved by evidence that the purpose of the covenant was not to preserve the value of the property, proof of value may even become irrelevant.

102 The Plaintiff submits that, in Re Parimax (S.A) Pty Ltd,[213] Myers J highlighted that loss of material value was not a central question in the substantial injury inquiry:

An impression seems to have got abroad that when an application is made to modify a restriction one considers the benefit of the person entitled to it wholly from a material point of view, that all one has to do is to say: "will he be any worse off financially; will his land be less readily saleable, or will it be depreciated in value?" Well, for my part I consider that the benefit which a person gets from a restriction cannot necessarily be measured only by material consideration. ...[214]

103 The Plaintiff says, in other words, it is not sufficient to simply point to a financial impact from the modification of the Covenants, the injury must be in the context of a benefit that the Covenants intended to confer or protect.[215]

104 The Plaintiff submits that, in the present case, the purpose of the Covenants was to establish a residential estate of quality, whilst also allowing certain non-residential uses that contributed to the amenity of the estate. This is reflected in Mr Negri's evidence that:[216]

The purpose of the covenants is to establish and maintain a predominantly residential estate characterised by single dwellings on individual allotments.

The requirement that the dwelling is of a cost of no less than 600 pounds is intended to establish a quality benchmark.

There is also a restriction in relation to quarrying.

Whilst a limited range of uses other than dwelling is permitted (church, school and hall), the lots cannot be used for any form of trade or business. The church, school and hall use are community uses that would potentially have contributed to the amenity of the residential estate.

105 The Plaintiff submits that the covenant in Re Parimax restricted the erection of any building or retaining wall on the applicant's land that exceeded, in height, a point fixed at sixteen feet below the curb level:[217]

The land of the applicant is subject to a number of restrictions, of which the only material one is the restriction against erecting any building or retaining wall on the applicant's land which exceeds in height a point fixed at sixteen feet below the curb level of Eastbourne Road at the south-west corner of the applicant's land. This restriction was created in 1929, and the applicant purchased the land by a transfer dated 2nd October, 1953.

106 The Plaintiff observes that Myers J decided Re Parimax by assessing injury in terms of the relevant covenant's purpose, and not by the simple criterion of whether the beneficiary would be financially worse off. His Honour stated:[218]

I base my decision on the matters I have referred to, namely, that I am satisfied that there would be a serious loss of sunlight, a serious loss of natural light, and the deprivation of a pleasant view and the substitution for it of a blank wall of a garage.

I therefore dismiss the application. ...

107 The Plaintiff says it follows that economic loss cannot properly be construed as a substantial injury, when the network of covenants "was not exacted to preserve"[219] the financial prosperity of commercial activity undertaken by the beneficiaries.[220] The Plaintiff submits that the question, "will [the defendants] be any worse off financially[?]",[221] is similarly immaterial because the Covenants were never purposed to protect financial or commercial interests.[222]

108 The Plaintiff contends that the Covenants were not intended to protect commercial or financial interests, and that this is supported by the fact that, when the relevant network of covenants was created, none of the land within the Parent Titles had been developed as commercial businesses.[223] Indeed, until the restrictive covenants were removed from the Defendants' land between 1954 and 2012, trade or business was prohibited.[224]

109 The Plaintiff submits that similar covenants have already been removed from the land within the original subdivision of Parent Titles, many at the direction of the Supreme Court. For example:

(a) the restrictive covenant contained within Instrument of Transfer 1503993, which affected the Telstra Land, was removed when the land was transferred to the Commonwealth of Australia on or around 15 October 1954, by way of s 3 of the Transfer of Land (Acquisitions) Act 1948 (Vic);[225]

(b) the restrictive covenants contained in Instruments of Transfer 1446006 and 1885889, which affected the former Lots 207, 208, 209 and 210, were wholly discharged on the basis that to do so would not substantially injure any beneficiaries, by order of the Supreme Court of Victoria on 5 August 1960;[226]

(c) the restrictive covenants contained in Instruments of Transfer 1440043, 1451627, 1497884, 1779318 and 1885889, which affected the former Lots 319, 320, 321, 191, 204, 205, 188, 189, 190, 334, 187, 278, 279, 193-198, 200, 201, 202, 203, 206, 211-277, 280-288, 291-299, 306-313, 316, 317, 318 and 323-333, were wholly discharged on the basis of obsolescence and that to do so would not substantially injure any beneficiaries, by order of the Supreme Court of Victoria on 29 September 1964;[227]

(d) the restrictive covenants contained in Instruments of Transfer 1711666 and 1450947, which affected the former Lots 289, 290, 314, 315 and 300, were discharged by order of the Supreme Court of Victoria on 1 April 1977;[228]

(e) the restrictive covenants contained in Instruments of Transfer 1388710, 157578 and 1487333, which affected Lots 301-305, were wholly discharged on the basis of obsolescence and that to do so would not substantially injure any beneficiaries, by order of the Supreme Court of Victoria on 26 October 1978;[229]

(f) the restrictive covenants burdening the land formerly contained within LP12707 were discharged pursuant to s 23 of the Subdivision Act 1988 (Vic), and Amendment R241 of the Greater Geelong Planning Scheme, on or around 16 June 2000, upon the registration of PS426481F;[230] and

(g) the restrictive covenant contained in Instrument of Transfer 1397003, which affected the former Lot 199, was removed pursuant to application AJ702333J, under s 22 of the Subdivision Act 1988 (Vic), on 2 July 2012 - noting that Lots 180 and 181 were never burdened by any restriction.[231]

110 The Plaintiff notes that the restrictive covenant contained in Instrument of Transfer 1503993 was discharged from the Telstra Land, and says that it is significant that this covenant also burdens part of the Viva land. The Plaintiff draws the Court's attention to the following wording in the covenant:

[the covenantor] will not at any time erect or construct or allow to be erected or constructed more than one dwellinghouse upon any Lot hereby transferred which dwellinghouse together with any outbuildings and fences appurtenant thereto shall cost not less than the sum of Six hundred pounds And will not at any time excavate or remove or permit or suffer to be excavated or removed from any Lot hereby transferred any soil or other material except such as building construction or the laying out of a garden may necessitate And will not at any time erect or build or cause to be erected or built on any Lot hereby transferred or any part thereof any building other than a dwellinghouse, church, school or, hall and outbuildings thereto respectively and will not carry on or permit or suffer to be carried on upon any such Lot or any part thereof any trade or business whatsoever ...

111 The Plaintiff submits that, further, these removals include the discharge of covenants burdening the United Petroleum Land.[232] Importantly, in these applications, the Supreme Court was satisfied that there would be no substantial injury resulting from their removal:

(a) as for the former Lots 207-210 on LP12706, in response to an application by Vacuum Oil Company Proprietary Limited, Adam J of the Supreme Court of Victoria made orders on 5 August 1960 discharging the restrictive covenants contained in Instruments of Transfer 1885889 and 1446006, on the basis that the Court was satisfied that the discharge would not substantially injure the persons entitled to the benefit:

AND UPON HEARING Mr Stephen of Counsel for the Applicant AND UPON READING the Affidavit of Albert Raymond Casboult sworn the 22nd day of December 1959 and filed herein, the Affidavit of Marsden Albert Wood sworn the 5th day of May 1960 and filed herein and the Affidavit of Eric Keith Hart sworn the 9th day of May 1960 and filed herein and the several exhibits therein respectively referred to and the Order of His Honour Mr Justice Dean made herein the 2nd day of June 1960 and the further Affidavit of Eric Keith Hardt sworn the 3rd day of August 1960 ...

... IT IS ORDERED that the restrictions arising under the covenants contained in such aforementioned Instruments of Transfer be wholly discharged in so far as those restrictions relate to those portions of Lots numbered 207, 208, 209, 210 on Plan of Subdivision No. 12706 ... the Court being satisfied that the aforementioned discharge will not substantially injure the persons entitled to the benefit of the said restrictions ...[233]

(b) as for the former Lots 203-206, 274-279 and 286-288 on LP 12706, in response to an application by Trans-West Haulage Proprietary Limited, Dean J of the Supreme Court of Victoria made orders on 29 September 1964 discharging the restrictive covenants contained in Instruments of Transfer 1497884 and 1885889, on the basis that the restrictions ought to be deemed obsolete and the continued existence of the restrictions would impede the reasonable user of the land without securing practical benefits to other persons, and that the discharge would not substantially injure the persons entitled to the benefit:

UPON READING the said Summons the Order of Master Jacobs dated the Seventeenth day of July 1964 the affidavit of Albert Raymond Casboult sworn the Thirteenth day of July 1964 the affidavit of Peter Alexander Bain sworn the Eighteenth day of August 1964 and the two several affidavits of the said Peter Alexander Bain each sworn the Twenty third day of September 1964 and all severally filed herein and the exhibits referred to in the said affidavits and the abovementioned Plans of Subdivision Certificates of Title and Instruments of Transfer and UPON HEARING Mr Bradshaw of Counsel on behalf of the applicant ...

... the restrictions arising under the restrictive covenant hereinafter referred ought to be deemed obsolete AND THAT continued existence of the said restrictions would impede the reasonable user of the land affected without securing practical benefits to other persons AND THAT the discharge of the said restrictive covenants will not substantially injure the persons entitled to the benefit of the said restrictions IT IS ORDERED AND DIRECTED that the restrictive covenants ... be wholly discharged.[234]

and

(c) as for the former Lot 289 on LP12706, in response to an application by Winter & Taylor (Marketing Services) Pty Ltd, Master Brett of the Supreme Court of Victoria made orders on 1 April 1977 discharging the restrictive covenants contained in Instruments of Transfer 1711666 and 1450947.[235]

112 The Plaintiff submits that these covenants imposed similar restrictions to the restrictions found in the Covenants that burden the Land; for example, Instrument of Transfer 1885889 (which burdened the majority of the Defendants' Land),[236] is expressed as follows:

administrators and transferees will not at any time erect or construct or allow to be erected or constructed more than one dwelling house upon any of the said Lots on such last mentioned Plans of Subdivision hereby transferred (other than upon said Lots 154, 175 to 177, 179 to 182 and 184 to 186) which dwelling house together with any outbuildings and fences appurtenant thereto shall cost not less than the sum of Six hundred Pounds AND will not at any time excavate or remove or permit or suffer to be excavated or removed from any of the said Lots on such Plans of Subdivision hereby transferred (other than said Lots 154, 175 to 177, 179 to 182 and 184 to 186) any soil or other material except such as building construction or the laying out of a garden may necessitate AND will not at any time erect or build or cause to be erected or built on any of the said Lots or any part thereof (other than on Lots 154, 175 to 177, 179 to 182 and 184 to 186) any building other than a dwelling house church school or hall and outbuildings thereto respectively AND will not carry on or permit or suffer to be carried on upon the said Lots or any part thereof (other than on Lots 154, 175 to 177, 179 to 182 and 184 to 186) any trade or business whatsoever.

113 The Plaintiff submits that the abovementioned applications facilitated the use and development that exists on the United Petroleum Land today.

114 The Plaintiff submits that, critically, Dean J found that the covenants affecting the Defendants' Land were obsolete under s 84(1)(a) of the Property Law Act 1958 (Vic).

115 The Plaintiff submits that the test for obsolescence in s 84(1)(a) is more difficult to satisfy than the test of substantial injury under s 84(1)(c). In Re Truman, Hanbury, Brixton & Co Ltd's Application,[237] with which Morris J agreed in Stanhill v Jackson,[238] Romer LJ found that a covenant is obsolete when its purpose, such as preserving a residential estate, can no longer be achieved:

It seems to me that the meaning of the term "obsolete" may very well vary according to the subject matter to which it is applied. Many things have some value, even though they are out of date in kind or in form - for example, motor cars or bicycles, or things of that kind - but here we are concerned with its application to restrictive covenants as to user, and these covenants are imposed when a building estate is laid out, as was the case here of this estate in 1898, for the purpose of preserving the character of the estate as a residential area for the mutual benefit of all of those who build houses on the estate or subsequently buy them. It seems to me that if, as sometimes happens, the character of an estate as a whole or of a particular part of it gradually changes, a time may come when the purpose to which I have referred can no longer be achieved, for what was intended at first to be a residential area has become, either through express or tacit waiver of the covenants, substantially a commercial area. When that time has come, it may be said that the covenants have become obsolete, because their original purpose can no longer be served and, in my opinion, it is in that sense that the word "obsolete" is used in section 84(1)(a).

116 The Plaintiff says it follows that, as early as 1964, when the covenants affecting the United Petroleum Land began to be discharged on the basis of obsolescence, the Court recognised that the purpose of the Covenants could no longer be achieved, presumably as the proposed residential subdivision had never come to fruition.

117 The Plaintiff acknowledges that the precedential value of prior discharges or modifications is well established. In Vrakas, Kyrou J explained that the precedent set by the modification of a covenant may be enough to preclude a plaintiff from demonstrating an absence of substantial injury:

The prospect that, if the application for the discharge or modification of a covenant were granted, that might be used to support further applications in a similar vein, may be relevant. Such "precedent value" may, in an appropriate case, of itself be a factor demonstrating that an applicant fails to establish the requirements in s 84(1)(c).[239]

118 The Plaintiff says that the precedent set by the discharge or modification of a covenant can itself constitute substantial injury, and demonstrates that the discharge or modification of similar covenants in the neighbourhood is relevant.

119 The Plaintiff submits that, while it is true that each case ought to be decided on its facts,[240] being able to establish that similar covenants in the locality have been discharged, to some extent, diminishes the injury that a beneficiary may suffer as the protection secured by the network of covenants has been eroded.

120 The Plaintiff relies on Re DVC Management & Consulting Pty Ltd[241] and submits, in that case, Mukhtar AsJ considered whether a precedent of modifications to single dwelling covenants supported the plaintiff's application, finding that it would be unjust to deny the precedent of modifications that had already been set:

In any case, faithful to the statute, and the evidence, I think the numerous instances of multi-unit developments means it is not reasonable to contend that a modification of a single dwelling covenant would cause substantial injury by setting an undesirable precedent for similar applications in the future ― applications which have to be made by those living in the 'sanctuary' and presumably likewise minded to preserve the existing single dwelling conditions. The precedent for this application by the plaintiff has already been set, to the extent that I think it would be unjust to deny it.[242]

121 Further, the Plaintiff relies on Lahanis v Livesay[243] and submits, in that case, Derham AsJ described the role of evidence of changes in the neighbourhood in applications to modify a covenant. The Plaintiff submits that his Honour explained that an assessment of whether other properties burdened by covenants had undergone changes operates to assist the court in identifying any real benefits secured by the covenant:

Another aspect of the role of the expert is to review the changes that have taken place in the area or areas surrounding the subject land, whether the properties on which changes have occurred were burdened with a covenant similar to the one sought to be modified or discharged, and to describe in some detail the 'built environment' of the areas both proximate and less proximate to the subject land. This assists the Court in identifying any real benefits, that is practical benefits, to the person entitled to the benefit of the covenant in issue. This is an important aspect of expert evidence in applications of this kind. But the expertise is in the collection and collation of 'on the ground' information rather than the interpretation of that information.[244]

122 The Plaintiff submits that his Honour went on to say that "the question of whether a particular covenant should be modified or discharged has a lot to do with changes to the environment in which the burdened land is situated".[245]

123 The Plaintiff says the fact that the previous covenants burdening the United Petroleum Land have been removed is significant in the present proceeding, as it reveals:

(a) the precedent for modification of like covenants in the locality; and

(b) the Supreme Court's satisfaction, on at least two occasions, that no substantial injury would arise from the removal of equivalent restrictive covenants.

124 The Plaintiff submits that, ultimately, the only land within the original subdivision that continues to be burdened by the restrictive covenants arising from the Parent Titles forms part of the Land, or is otherwise owned by the Plaintiff.

125 The Plaintiff submits that the network of Covenants therefore no longer secures the practical benefit of ensuring a residential neighbourhood or restricting trade or commerce in the original subdivision. In effect, a service station identical to the one proposed by the Plaintiff could be developed on land closer to the United Petroleum Land, which has had its covenant removed.

126 Accordingly, the Plaintiff submits that the application for modification of the Covenants on the Land is supported by the fact that no network of covenants remains, rather a precedent for discharge of the same or equivalent covenants is well-established in the locality, and has:

(a) enabled trade or commerce; and

(b) with respect to the Defendants' Land, enabled use of the land for a service station.

Compatibility of Plaintiff's Proposal with other land uses

127 The Plaintiff submits that, given the robust nature of surrounding uses and developments, Mr Negri's evidence is such that he considers it likely that the Plaintiff's Proposal would have little to no injurious impact on the beneficiaries:

1. The activity associated with the use and development of the Development Site in accordance with the provisions of the Industrial 1 Zone will not substantially injure benefitting properties given the land uses conducted at these properties, the substantial separation distances and the orientation of buildings.

128 The Plaintiff submits Ms Milner agrees, in that she says:[246]

(65) The existing use and development of the Beneficiaries' land includes:

• warehousing activities;

• vehicle repairs and sales;

• bulky goods retailing;

• offices;

• food and drink premises;

• two service stations, including on the objecting beneficiaries' land at 452-458 Princes Highway; and

• a Telstra exchange building.

(66) The above uses are at odds with the quiet and pleasant amenity and activities that would typically be associated with a residential neighbourhood.

(67) The proposed changes of uses that would be permitted by the modification of the Covenants would not materially or detrimentally impact upon the use and development of the Beneficiaries' land when assessed against the Covenants' purpose.

Removal of Covenants appropriate in all the circumstances

129 The Plaintiff submits that, although the default approach of the Court is to favour modification of covenants rather than their removal, applications to discharge a restrictive covenant have been allowed where the Court finds that outcome appropriate to avoid future confusion.[247]

130 The Plaintiff relies on a decision of Lansdowne AsJ, where the Court stated that:

In many cases, modification of a restrictive covenant to allow an intended development will be more appropriate than discharge of the covenant. In this case, however, the Court considers that discharge of the Covenant is more appropriate than modification. The Court considers that the proposed form of modification, to allow the construction of 'one residential building', could be unclear and so introduce confusion, and is not necessary given the nature of existing development proximate to the subject land and its zoning as residential. [248]

131 In that decision, the Plaintiff submits that the Court found a modification was unnecessary, having regard to surrounding planning policy and development.[249]

132 Similarly, the Plaintiff submits that, in Stonnington v Wallish & Ors,[250] Ierodiaconou AsJ found the removal of excavation covenants was appropriate, given that quarrying would never be possible in light of the residential zoning and development:

Given the limited scope of the restrictions imposed by the covenants and for substantially the same reasons outlined above, I do not consider that my residual discretion should be exercised in the defendants' favour. I accept that it is desirable for the covenants to be discharged in order for there to be clean titles on the subject land. Such a course will avoid any future confusion or disputes and will not cause the defendants substantial injury.

133 The Plaintiff submits that, in the present case, a residential subdivision is never likely to be realised given the proximity of the Geelong Refinery and industrial zoning.

134 The Defendants referred to and relied on many of the principles set out in paragraphs 28 to 33 and 88 above.

135 The Defendants submit that, in approaching the task set out in s 84(1), the Court must focus on the individual restrictions. In doing so, the Defendants submit that the first question to consider is, do the beneficiaries enjoy any practical benefits from the restriction as against trade or commerce, or indeed, the other two restrictions that prevent construction of a service station?[251]

136 The Defendants submit that the second question is, would the discharge or modification cause substantial injury?[252] They say that the burden of proof lies on the Plaintiff to negate the existence of those practical benefits, and to negate any substantial injury.

137 The Defendants submit that "practical benefits" are any real benefits to a person entitled to the benefit of the restriction.[253]

138 The test in the second limb of s 84(1)(a) and the test in s 84(1)(c) are similar; that is, if there are any practical benefits to beneficiaries, will they be lost with a modification or discharge? The court will then assess whether that constitutes a substantial injury.[254]

139 The Defendants submit that the Plaintiff's reliance on Barport is misplaced, because the terms of the statutory test in s 84(1) focus attention on the restrictions, not the purpose of the covenant as a whole.[255]

140 The Defendants make the following additional submissions on the relevant tests:

(a) the applicant must prove a negative; namely, that the proposed modification of the covenant will not substantially injure those persons entitled to the benefit of the restriction,[256] which means all persons entitled to the benefit, not just the defendants;

(b) the test for whether the discharge or modification of a covenant would "substantially injure" a person entitled to the benefit of it is similar to that of "practical benefits" in the second limb of s 84(1)(a);[257]

(c) "Practical benefits" are any real benefits to a person who is entitled to the benefit of the restriction, and are not limited to the sale value of the land.[258] If the person with the benefit of the covenant believes that the covenant secures practical benefits, then the court will accede to that view unless it is clearly unreasonable;[259]

(d) the emphasis is on the injury suffered by the persons entitled to the benefit. From the nature of the proprietary right arising from the restrictive covenant, the injury must occur in relation to the person's enjoyment of his or her property;[260]

(e) it is not enough for the applicant merely to prove that there will be no appreciable injury or depreciation in value of the property to which the covenant is annexed;[261]

(f) the prospect that, if the application for discharge or modification of a covenant were granted, it might be used to support further applications of a similar nature, may be relevant.[262] Such "precedent value" may, in an appropriate case, of itself be a factor demonstrating that an applicant has failed to establish the requirements in s 84(1)(c);[263]

(g) the "non-traditional" approach taken by Morris J in Stanhill v Jackson[264] should not be followed, particularly as his Honour failed to follow the Full Court decision in Re Stani, in relation to ss 84(1)(a) and (c) of the PLA;[265]

(h) even if the matters set out in ss 84(1)(a) or 84(1)(c), are proved by the applicant, the court has a discretion to refuse the application;[266]

(i) the approach in s 84(1) does not direct itself to the effect of many restrictions. It looks at the restriction sought to be modified or removed. Each of the grounds contained in ss 84(1)(a)-(c) is focused on the restriction that is sought to be discharged or modified. The Defendants submit that those grounds do not direct themselves to the Covenants as a whole, but are instead focused on the restrictions sought to be modified or removed;[267] and

(j) "Covenant" means "promise"; specifically, whatever the promises are in the relevant instruments. The promise is broader than the restriction. In identifying practical benefits enjoyed and consequently the existence of substantial detriment under s 84(1)(c), the court must consider the restriction separately.[268]

141 The Defendants rely on Kyrou J's decision in Vrakas to support the submission that planning considerations are not relevant to whether or not a plaintiff can satisfy one of the grounds in s 84(1).[269]

Precedential value of granting the application

142 The Defendants rely on Jeshing Property Management Pty Ltd & Anor v Yang & Ors[270] to submit that precedential effect alone is sufficient for substantial injury.

143 The Defendants submit that the fact other restrictive covenants have been removed or modified in the relevant neighbourhood is irrelevant to the Plaintiff's application.[271] They say that decisions regarding an expression in one instrument are of very dubious utility in relation to another.[272]

144 The Defendants submit that the express intended purpose of the relevant restriction in the Covenants, the subject of this proceeding, is to restrict "any trade or business". The Defendants submit that this restriction is a benefit to the Defendants. They say that, once the benefit of that restriction has been identified, and the Plaintiff is unable to prove that the discharge or modification will not substantially injure the party entitled to that benefit, the Court must refuse to discharge or modify the Covenants.

145 The Defendants submit that the Plaintiff attempts to avoid and confuse the benefit conveyed by the relevant restriction by conflating the various restrictions in the Covenants with a single presumed intention of maintaining a residential neighbourhood. They say that approach is flawed and inconsistent with the words of the statute and binding authority.[273]

146 The Defendants submit that, in approaching the task set out in s 84(1) of the Act, the Court must focus on the individual restrictions.[274] The Defendants say that the Plaintiff's case conflates the restrictions in the instruments of transfer in an attempt to impose a single purpose or intent upon the Covenants.[275] They submit that the Plaintiff's reliance on Barport does not help it, because the terms of the statutory test in s 84(1) focus attention on the individual restrictions, not the purpose of the Covenant, however deduced.[276] Further, the Defendants submit that the Plaintiff's reliance on Jiang v Monaygon is misplaced, because that case concerned the Court's refusal to imply a height restriction into a single dwelling covenant; whereas in this case, the Defendants have the benefit of an express restriction against trade and commerce.[277] In defending the Plaintiff's application, the Defendants submit that they are not attempting to have anything implied into the restriction, rather they say that the benefit conferred on their land is express.[278]

147 The Defendants rely on Re Stani, where Young CJ, Barber and Nelson JJ stated:[279]

Having regard to the purpose of para. (c) it may well be that this is the correct view, that in other words any injury sufficient to prevent the Court from modifying the restriction must be something more than unsubstantial, must be a real and not fanciful detriment. In the long run the test to be applied is similar to that applied in determining under paragraph (a) whether the continued existence of the restriction would secure practical benefits to other persons.

148 The Defendants rely on this passage and submit that the law on any practical benefit extends to the investigation of substantial detriment or injury.[280]

149 The Defendants submit that the Plaintiff is required to prove a negative to satisfy s 84(1)(c); namely, that the proposed modification or removal of the Covenants will not substantially injure those persons entitled to the benefit of the restriction.[281]

150 The Defendants submit that the relief sought by the Plaintiff, if granted, would permit the Plaintiff to operate any type of trade or business from the Land, including a service station that could compete with the fuel and non-fuel products currently being offered for sale by the United Petroleum Corio service station.

151 The Defendants submit that it is reasonable to assume that if the Plaintiff is successful in removing the restrictions, the whole of the burdened land will be open to any sort of development permitted by zoning and planning laws. The Defendants contend that this is much broader relief than is required to conduct a hydrogen refuelling station. The Defendants submit that the statute should not be used to achieve results not disclosed at the time of the application, and not advertised to all of the beneficiaries. I will discuss this latter point in more detail later in these reasons.

152 The Defendants purchased the United Petroleum Land for the purpose of erecting the United Petroleum Corio service station[282] at a cost of $4 million.[283] The Defendants currently lease the United Petroleum Land to United Petroleum,[284] and the service station is operated by a commission agent for United Petroleum, pursuant to a commission agency agreement.[285] Mr Szymczak has deposed that, when it becomes possible, United Petroleum will look to offer alternative fuel types such as hydrogen.[286]

153 The Defendants submit that the Plaintiff and the Defendants are competitors in the market for retail petroleum products and have service stations positioned in prominent locations in Victoria.[287]

154 The Defendants rely on the following from Re Cook, where Gillard J said:[288]

It should be noted that in paragraph (c) the emphasis is on the injury suffered by the persons entitled to the benefit. From the nature of the proprietary right arising from the restrictive covenant clearly the injury must occur in relation to the persons enjoyment of his property.

155 The Defendants submit that, in order to satisfy the requirements under s 84(1)(c) of the PLA, the Plaintiff must show that the Defendants will not suffer any substantial injury by reason of the proposed discharge or modification of the Covenants.[289] The Defendants submit that the authorities indicate that this is the same as showing that no practical benefits are secured by the Covenants.[290] The Defendants submit that neither the statute nor the authorities limit the benefits enjoyed by any notion of the presumed intention of the covenantor.[291]

156 The Defendants submit that the practical benefits secured by the Covenants are clear, and that the primary practical benefit enjoyed by the Defendants is the prevention of any trade or business on the Land.

157 The Defendants submit that there are real benefits to them of excluding any trade or business being conducted on the Land, and point to their expert and lay evidence to support what they say are real and tangible benefits.

158 The Defendants submit that, conversely, the Plaintiff's experts have not addressed this issue in relation to the benefits of the relevant restriction in the Covenants, nor have they expressed the basis for any opinion that the Defendants will not suffer a substantial injury if the Covenants are discharged or modified.[292]

159 The Defendants observe that their economic expert, Dr Wainscoat, opines that:

(a) there will be increased competition from the proposed service station on the Land, and this will reduce prices offered at the United Petroleum Corio service station, as well as the margin achieved on sales;[293]

(b) the proposed service station on the Land will cause the United Petroleum Corio service station to suffer a fall in its market share;[294]

(c) the development of the proposed service station will reduce future cash flows for the tenant, and therefore its willingness to pay the maximum rent;[295]

(d) rental income underpins the freehold value of the United Petroleum Land. Ipso facto, a decrease in rent will decrease the cashflows, and therefore the freehold value of the United Petroleum Land;[296] and

(e) the proposed development of the service station on the Land would reduce the maximum amount that a potential purchaser would be willing to pay for the United Petroleum Land, if sold as a going concern as a tenanted property.[297]

160 The Defendants observe that their property valuer expert, Mr Murphy, opines that if the Covenants are discharged or modified as proposed by the Plaintiff, this will have the following impact on the United Petroleum Land:

(a) the market rental of United Petroleum Land would fall by $30,000 to $40,000 per annum, if Viva was to operate a service station that offers hydrogen, diesel and electric vehicle charging;[298]

(b) the market rental of United Petroleum Land would fall by $85,000 to $120,000 per annum, if Viva operated a similar service station to the United Petroleum Corio service station;[299]

(c) the market value of the United Petroleum Land would fall by $600,000 to $800,000, if Viva was to operate a service station that offers hydrogen, diesel and electric vehicle charging;[300] and

(d) the market value of the United Petroleum Land would fall by $1.7m to $2.2m, if Viva operated a similar service station to the United Petroleum Corio service station.[301]

161 The Defendants submit that the Plaintiff has not discharged its onus to demonstrate that the proposed modification or removal of the Covenants will not substantially injure the Defendants. They submit that neither Mr Negri nor Ms Milner have offered any admissible opinion on whether the discharge or modification of the Covenants sought by the Plaintiff will or will not substantially injure the Defendants. The Defendants submit that Mr Negri has simply not considered the United Petroleum Land and the benefits that the Defendants enjoy by reason of the Covenants.

162 Accordingly, the Defendants submit that there is no satisfactory evidence to contradict the opinions of Dr Wainscoat and Mr Murphy.

163 The Defendants submit that, on 13 June 2022, the Plaintiff filed and served preliminary submissions in support of its Application to discharge or modify the Covenants. The Defendants say that, as part of its submission, the Plaintiff stated that it was seeking this relief to allow construction of a service station that could produce and dispense hydrogen. The Defendants submit that the Plaintiff's intended use of the Land at the time of filing its originating motion was not to have a petroleum service station.[302]

164 The Defendants submit that, on 16 June 2022, the Court made orders requiring the Plaintiffs to give notice to each person that had the benefit of the Covenants. The Defendants note that, at paragraph C in other matters, it is recorded that: "The Plaintiffs seeks to discharge or modify the Covenants to develop a retail hydrogen service station on that land."

165 The Defendants observe that, in the Plaintiff's Submissions for trial, the following is stated: "The Plaintiff proposes to construct a service station that dispenses hydrogen, gasoline and diesel as well as fast charging for battery vehicles."[303]

166 The Defendants submit that the expansion of fuel types and services offered by the Plaintiff at its proposed service station is different to what was notified to beneficiaries, in accordance with the orders made by the Court on 16 June 2022. The Defendants submit that it is clear that the Plaintiff's proposed service station will not just offer hydrogen for sale (whenever this may actually be possible), but in the meantime, it will offer diesel, gasoline and charging for electric cars.

167 The Defendants rely on Re Stani to support their submission that the Court has discretion as to whether it will discharge or modify a covenant under s 84(1), but only after satisfaction of the relevant sub-section relied upon.[304]

168 The Defendant submits that, even if the Plaintiff was able to establish that the proposed discharge or modification of the Covenants would not substantially injure the persons entitled to the benefit, the Court still has discretion to refuse the Plaintiff's Application.[305] The Defendant submits that it would be open to the Court to exercise its discretion in this way, given that the Plaintiff purchased Shell Australia's downstream assets with full knowledge of the Covenants, and with the obvious intention of wanting to use the Land for commercial purposes.[306] In these circumstances, the Defendants say that the Plaintiff has made a calculated risk in relation to a proposed commercial enterprise, which is otherwise prohibited by the Covenants that protect the Defendants.[307]

Plaintiff's response to the Defendants' submission regarding its alleged shifting position

169 The Plaintiff submits that it was always part of its original plan to consider selling a range of goods and services, and that there was no suggestion that gasoline would be excluded.[308] The Plaintiff submits that, in the evidence, the Court has the Plaintiff's statement of intention for what it intends to do on the Land subject to the Covenants.[309]

170 The Plaintiff submits that the primary focus for its proposed development of the Land has been, and always will be, to develop a vehicle refuelling facility using alternative fuels. The Plaintiff says that this is because it is an important part of educating the transport community that hydrogen can be used and is safe.[310]

171 The Plaintiff contends that, as part of the education process, it will seek to encourage people who visit its proposed service station for traditional fuels to consider hydrogen as a viable alternative to traditional fuels.[311]

172 The Plaintiff submits that it put a good deal of thought into what the proposed amendment to the modification ought to be, and in seeking a variation to allow a service station, it was clearly not hiding its intentions.[312] The Plaintiff submits that, by using the words, 'Industry and associated uses', it could not have been clearer of its intentions.

173 The Plaintiff submits that it wishes to leave open the option of running a traditional service station, which is what is contemplated in its originating motion.

174 The Plaintiff submits that the Defendants are attempting to distract the Court by questioning the description of the use sought by the Plaintiff, particularly in circumstances where the Plaintiff's primary case is for discharge.

175 Further, the Plaintiff says that the suggestion by the Defendants that the other beneficiaries elected not to join the proceeding, on the basis of a misapprehension as to the Plaintiff's intentions with the Land, is pure fantasy.[313]

176 This case is a curious one in some respects, in that the parties engaged with only some aspects of each other's case.

177 For example, the Defendants did not adduce any expert evidence in relation to the planning aspects, and did not really challenge much of the Plaintiff's expert evidence in that regard. Rather, the Defendants focused their challenge to the Plaintiff's expert evidence on the experts' evidence about the purpose of the Covenants, and the extent to which the experts had relied on town planning considerations, rather than the Covenants themselves in arriving at their views.

178 For its part, the Plaintiff did not challenge the expert evidence relied upon by the Defendants. There was no cross-examination of those experts, and there were no submissions made as to whether the Court should accept the conclusions of those experts as contained in their respective reports. Rather, the Plaintiff's case theory effectively meant that the Plaintiff regarded the evidence of the Defendants' experts as not relevant to the questions which the Court must determine.

179 Naturally, these approaches have an effect on how I have determined this case, as will become apparent.

The proper approach to considering the requirements of s 84(1)(c) of the PLA

180 As set out in numerous authorities, the assessment of substantial injury relates to practical benefits enjoyed by the beneficiaries of the covenants. Whether there is substantial injury is to be assessed by comparing the benefits initially intended to be conferred and actually conferred by the covenant; and the benefits, if any, which would remain after the covenant has been discharged or modified. If the evidence establishes that the difference between the two will not be substantial, then the applicant has established a case for the exercise of the Court's discretion under s 84(1)(c) of the PLA.[314]

181 The essential difference between the parties as to the approach that the Court should take, when considering whether the Plaintiff has satisfied the requirements of s 84(1)(c) of the PLA, boils down to this: is the Court to look at the Covenants as a whole to discern their purpose, as part of assessing the benefits initially intended to be conferred and actually conferred by the Covenants (the Plaintiff's approach); or does the Court look solely at the restrictions contained in the Covenants themselves to elucidate the benefits (the Defendants' approach)? In effect, the Defendants would have it that the Court should focus on whether the Defendants were intended to be conferred, and were actually conferred, a benefit by the 'no trade or business' restriction on the Land, without reference to the purpose of the Covenants. If so, the question then is whether the removal or modification of the Covenant would substantially injure the Defendants if the benefit did not remain or was adversely affected.

182 In my view, it is clear that the Plaintiff's approach is to be preferred. It is consistent with the authorities, whereas the Defendants' approach is not.[315] I accept the Plaintiff's submission set out at paragraph 90 above. In Randell v Uhl, Derham AsJ clearly assessed substantial injury by reference to the purpose of t[316]covenant.316 For example, it is not a single dwelling restriction per se which is the benefit, but a low density neighbourhood as a consequence of that restriction which is to be assessed against the proposed modification.

183 Taking an individual restriction, without reference to other restrictions and the purpose of the covenant, as discerned from the terms of the covenant itself, is not the correct approach. This will become apparent when I consider the Covenants at issue in this case.

184 I accept the Plaintiff's evidence and submissions as to the purpose of the Covenants.[317] In coming to this view, I have not had regard to the town planning aspects such as the change in zoning of the Land and its surrounds, but to the terms of the Covenants themselves, and to the network of covenants in the neighbourhood at around the time they were created.

185 It is abundantly clear from the terms of the Covenants that the purpose of the Covenants was to create a residential neighbourhood of low density, quality, and residential amenity. It is also abundantly clear from the terms of the Covenants that the restrictions on use (no trade or business) and types of buildings (only dwellings, schools, churches or halls and outbuildings thereto) were to ensure the residential amenity of the neighbourhood.

186 The benefits intended to be conferred were the benefits associated with living in a residential neighbourhood of low density, quality, and residential amenity. The restriction on use, that is, no trade or business being conducted on the Land, was intended to confer the benefit of residential amenity.

187 I do not accept the Defendants' submissions that in coming to their views about the purposes of the Covenants, Mr Negri and Ms Milner relied heavily on the applicable planning scheme. In reading their reports and assessing their oral evidence, it was apparent to me that the planning scheme was but one aspect of their reasoning. For example, the Defendants submit that the planning scheme context was a big part of Ms Milner's reasoning;[318] however, when that proposition was put to her in cross-examination, she stated that it was one part of her reasoning.

188 There is nothing in the terms of the Covenants to suggest an intention to confer a benefit of not having a trade or business conducted on the Land which competed commercially with businesses operating on benefiting land. This is particularly the case when one takes account of the fact that at the time the Covenants were created, there was a network of covenants in the neighbourhood in similar (if not identical) terms, such that beneficiaries of the Covenant had similar restrictions applicable to their own land. The purpose of the 'no trade or business' restriction was not to protect beneficiaries from the effects of commercial competition but to preserve and protect the residential amenity of the neighbourhood. In this regard, the comparison made by the Plaintiff of the covenant in Specialist Diagnostic Services with that in Freilich v Wharton is apposite.[319]

189 I do not accept the narrow approach taken by the Defendants: they say that the express purpose of the relevant restriction in the Covenants is to restrict "any trade or business". That simply states the restriction. It says nothing about its purpose.

190 In this instance, the benefits of a residential neighbourhood have not actually been conferred on beneficiaries, since the neighbourhood itself was never developed as a residential neighbourhood. That the current zoning would prevent the Land from now being developed for residential use is not to the point. It is relevant, however, that many of the similar covenants burdening other land in the neighbourhood (including that land owned by the Defendants) have been discharged such that the neighbourhood now is not a residential one at all. There are at least three existing service stations along the Princes Highway in that vicinity, a Harvey Norman store, a furniture store, a panel shop and a camping and fishing store in the neighbourhood of the Land.

The extent to which the Defendants continue to enjoy the benefits of the Covenants

191 That being the case, it cannot be said that the Defendants continue to enjoy the benefits of the Covenants. They do not continue to enjoy (including that their land effectively never enjoyed) the benefits intended to be conferred by the Covenants, being a residential neighbourhood of low density, quality and residential amenity.

192 In this regard, it is particularly telling that similar covenants on the United Petroleum Land were discharged by the Court over time, including on the basis that to do so would not substantially injure the beneficiaries of those covenants.[320] The Plaintiff also observes that some of the covenants burdening the United Petroleum Land were discharged on the basis of obsolescence, which is much more difficult to establish.[321] I accept this submission.

193 That the Defendants currently have the benefit of a commercial competitor not operating a business on the Land is not to the point in the analysis required in the circumstances of this case. The Defendants' cross-examination of Mr Negri as to whether he considered the effect of removal of the trade and business restriction on the Defendants or other beneficiaries, in terms of the Plaintiff not being able to compete against them in business, therefore goes nowhere.

194 I do not accept the Defendants' contention that because they have this benefit, which they say is a practical benefit, that this benefit should be protected by refusing the Plaintiff's application.

195 In the circumstances of this case, it may be accepted that the Defendants experience a practical benefit from not having a commercial competitor operating a service station on the Land. Where the Plaintiff has not challenged the Defendants' expert evidence, either by cross-examination or by submission, the evidence from Dr Wainscoat and Mr Murphy must be accepted. Thus, there is no basis for the Court disregarding the economic effects of another competitor on the profits of the United Petroleum Corio service station (as set out in the Wainscoat Report), or the effect of lower profits on the value of the United Petroleum Land insofar as the market value of a lease of that land is concerned, such that it would result in a lower market value of the United Petroleum Land (as set out in the Murphy Report).

196 Importantly, however, this is not a practical benefit intended to be conferred by the Covenants on the beneficiaries of the Covenants. Therefore, it does not assist the Defendants in opposing the Plaintiff's application.

197 Taking the discharge or modification of like covenants in the neighbourhood into account is not to use those covenants to construe the terms of the Covenants. The proposition contended for by the Defendants at paragraph 143 above is to be confined to interpreting the Covenants. Here, the discharge or modification of like covenants in the neighbourhood is used, legitimately, to aid in the consideration of what characteristics the neighbourhood now has as part of discerning whether the initially intended for benefits remain.

Whether the Plaintiff has shown that the Defendants will not suffer substantial injury

198 Comparing the benefits initially intended to be conferred and actually conferred by the Covenants, with the benefits (if any) which would remain after the Covenants have been discharged or modified in the manner sought by the Plaintiff, the evidence establishes that the difference between the two will not be substantial.

199 This is not to say that the differences between the value of the United Petroleum Land under Scenarios 2 or 3 is not substantial when compared with the value of the United Petroleum Land under Scenario 1. The uncontested evidence is that it is. Differences in value of that magnitude cannot be regarded as not substantial.

200 However, that difference is not the difference which needs to be assessed for the purposes of assessing whether discharge or modification of the Covenants would cause the Defendants substantial injury. That is because the benefit enjoyed by the Defendants from having no commercial competitor on the Land is not a benefit initially intended to or actually conferred by the Covenants. Preserving the value of the United Petroleum Land by preventing a competing trade or business from operating on the Land is not a benefit intended to or actually conferred by the Covenants.

201 I do not see this case as giving rise to any precedential effect. Rather, it is the opposite in terms of this neighbourhood, as the precedent of discharging or modifying like covenants so as to enable commercial or industrial developments has already occurred. Indeed, it has occurred over a sustained period of time. I accept the Plaintiff's submissions in respect of the effect of removals/modifications of like covenants in the neighbourhood, as set out at paragraphs 117 to 122 above, and agree with the submission made by the Plaintiff set out in paragraph 123 above.

Conclusion as to whether the jurisdiction to exercise the discretion under s 84(1)(c) of the PLA has been enlivened, and consideration of discretionary factors

202 In my view, for the reasons set out above, the jurisdiction for the Court to exercise its discretion under s 84(1)(c) of the PLA has been enlivened. The Plaintiff has established that no substantial injury will be caused to beneficiaries if the Covenants are discharged or modified in the manner sought in the Originating Motion.

203 That being the case, should the Court's discretion be exercised to discharge or modify the Covenants? I have concluded that the Court's discretion should be exercised so as to discharge the Covenants.

204 I have given some thought to whether the relief should be the discharge of the Covenants, or the modification of them in the manner sought. In my view, this is a case where granting the primary relief sought, being the discharge of the Covenants, rather than the alternative relief of modification, is justified. The phrase "service station, industry and associated uses", which is the suggested addition to the types of buildings able to be built on the Land if the Covenants were modified, seems to me to be productive of confusion or disputes as to meaning. More importantly, the Plaintiff sought discharge on the grounds of no substantial injury to beneficiaries, and relied on the same grounds for its alternative relief of modification. In the circumstances of this case, I am satisfied that discharge of the Covenants will not substantially injure beneficiaries of the Covenants. This is not a case where aspects of the covenants need to be retained (albeit with modification) so as to ensure no substantial injury to beneficiaries.

205 I am satisfied that there is no reason to refuse to exercise the discretion to discharge the Covenants.

(a) to the extent that precedential effect is a discretionary factor (as well as a factor going to substantial injury), then there is no precedential effect created by granting the application;

(b) the evidence overwhelmingly establishes that the purpose of the Covenants, being to establish a residential neighbourhood of low density, quality and residential amenity, has not been achieved. To the extent that current planning laws mean that such purpose now cannot be achieved, that is a reason telling in favour of exercising the discretion but is not part of the consideration of substantial injury; and

(c) there is no reason not to exercise the discretion.

207 I do not accept the Defendants' submission that the application should be refused because the Plaintiff allegedly changed its position in terms of whether it would sell petrol (gasoline) or Non-Fuel Products at the service station it proposes to conduct on the Land.

208 The principal debate between the parties on this issue was whether the Plaintiff had changed its position with the filing of its submissions on 15 February 2023 by including petrol (gasoline) as one of the products to be sold at its proposed service station, as opposed to hydrogen, charging for electric vehicles, and diesel.

209 When filing the Originating Motion, the Plaintiff also filed the Gerhardy Affidavit and the Negri Report. The Gerhardy Affidavit refers to the proposed service station, describing it as the first public hydrogen refuelling facility in Australia, and does not mention other products. However, Mr Gerhardy exhibits an article from the Australian Financial Review dated 1 March 2022 referring to the proposed hydrogen facility, in which a Viva executive is quoted as saying: "Our vision is for the site to manufacture and deliver traditional fuels, as well as offering transitional and alternative energies".[322] At paragraphs 87 to 89, the Negri Report refers to the proposed service station selling hydrogen and diesel and providing electric vehicle charging.

210 The notice to beneficiaries of the Covenants which was ordered to be provided to them states: "The plaintiff seeks the discharge or modification of the restrictive covenant over the subject land to develop a retail hydrogen service station on the land".[323] Beneficiaries could seek copies of the supporting affidavits, including the Negri Report, and the Originating Motion, from the Plaintiff's solicitors if they wished.

211 The Plaintiff's application was always to discharge, alternatively to modify, the Covenants.

212 The wording of the proposed modification, so as to include building a "service station, industry and associated uses", was not confined to a "hydrogen service station".

213 I accept that the Plaintiff's emphasis, in its materials, was on a hydrogen service station, along with electric vehicle charging and diesel, and that petrol (gasoline) only came to be specifically mentioned much later in the course of the proceeding, with the filing of the Plaintiff's submissions.

214 However, I do not regard this as significant in the circumstances of this application.

215 The Plaintiff's application was always to discharge, alternatively to modify, the Covenants.

216 The Plaintiff's emphasis being on the discharge of the Covenants, it is difficult to conceive how a beneficiary, properly advised, could think that the Plaintiff would be confined to building a hydrogen service station.

217 Further, the wording of the proposed modification, so as to include building a "service station, industry and associated uses", was not confined to a 'hydrogen service station'. The phrase sought to be inserted was sufficiently wide as to include a service station selling petrol. Again, properly advised, it is difficult to see how a beneficiary could be misled about this.

218 It follows that I do not accept the Defendants' submissions in this regard. Even if the Plaintiff has changed its position, it is not a reason to refuse to grant the application. The difference between the Plaintiff building a hydrogen service station or a service station which sells a range of products, including hydrogen and petrol, is immaterial to the assessment of whether substantial injury would be caused by discharging the Covenants, for the reasons already set out above.

219 Insofar as the exercise of the discretion is concerned, I also reject the Defendants' submission as set out at paragraph 168 above.

220 If I were not minded to discharge the Covenants, then I would have modified the Covenants in the manner sought by the Plaintiff, for essentially the same reasons.

221 It follows from the above reasons that the Plaintiff's application will be granted and the Covenants discharged.

222 The parties are to confer as to a proposed form of order to give effect to these reasons, including on the question of costs. If they agree on a proposed form of order, then that should be sent to my Chambers by 20 July 2023. If they do not agree, then by 20 July 2023, each party should send to my Chambers their proposed form of order and a short written submission of no more than 3 pages (including as to costs) as to why their form of order should be preferred. Subject to any further order, I intend to finalise the orders and costs on the papers after 20 July 2023.

[1] The covenants are those contained in Instruments of Transfer 1435176, 1503993, 1806300 and 1417550 ('Covenants').

[2] Transcript of Proceedings on 1 March 2023 ('Trial Day 1 Transcript') pp. 50-53.

[4] Watson Affidavit, exhibit MPW-1, p. 75.

[5] Watson Affidavit, exhibit MPW-1, p. 67.

[6] Watson Affidavit, exhibit MPW-1, p. 63.

[7] Watson Affidavit, exhibit MPW-1, p. 71.

[8] Watson Affidavit, exhibit MPW-1, p. 75.

[9] The part of the site upon which the Plaintiff proposes to build the service station is referred to in this diagram as the Development Site and shown outlined in white. The figure is from the Negri Report, p. 13.

[10] Plaintiff's Amended Originating Motion filed 19 August 2022, Court Book ('CB') pp. 4-5.

[11] Plaintiff's written outline of submissions dated 15 February 2023 ('Plaintiff's Submissions') [11].

[12] Plaintiff's Submissions at [11].

[17] Gerhardy Affidavit, exhibit MSG-1, p. 6.

[18] Negri Affidavit, exhibit MN-1, p. 53.

[19] Watson Affidavit, exhibit MPW-1, pp. 84-85; CB pp. 107-108.

[22] Szymczak Affidavit at [14], exhibit DS-1, p. 32.

[29] Re Alexandra [1980] VicRp 7; [1980] VR 55, 60; Vrakas v Registrar of Titles [2008] VSC 281, [35] ('Vrakas'); Suhr v Michelmore [2013] VSC 284, [41] ('Suhr').

[30] [1964] VicRp 106; [1964] VR 808 ('Re Cook').

[32] Re Stani (Unreported, Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) [10] ('Re Stani'); Vrakas, [36].

[33] See generally Re Robinson [1972] VicRp 28; [1972] VR 278, 283 ('Re Robinson').

[35] Re Stani, 9-10; Vrakas, [32].

[36] [2019] VSC 668 ('Randell v Uhl').

[37] Randell v Uhl, [85] (footnotes omitted). For a similar summary of the principles in respect of s 84(1)(c) of the PLA, see Vrakas, [34]-[46].

[38] [2019] VSCA 167 ('Barport').

[50] Watson Affidavit at [5], exhibit MPW-1, p. 7.

[52] Watson Affidavit at [5], exhibit MPW-1, pp. 18-23.

[53] Watson Affidavit at [7], exhibit MPW-1, pp. 24-30.

[126] Milner Affidavit, exhibit AM-1, CB p. 515.

[128] Milner Affidavit at [5]. The Milner Report is exhibit AM-1 to the Milner Affidavit commencing at CB p. 482.

[143] Milner Report at [77], CB p. 508.

[161] Wainscoat Affidavit, exhibit LW-1, CB p. 429.

[162] Wainscoat Affidavit, exhibit LW-1, CB p. 434.

[178] Murphy Affidavit, exhibit PW-1, CB p. 624.

[179] Murphy Affidavit, exhibit PW-1, CB p. 620.

[182] Murphy Report at [17], CB p. 556.

[183] Murphy Report at [17], CB p. 556.

[184] Murphy Report at [18], CB p. 556.

[193] Trial Day 1 Transcript, p. 12, line 8.

[194] Trial Day 1 Transcript, p. 12, lines 20-22.

[195] [2017] VSC 591 ('Jiang v Monaygon').

[196] Trial Day 1 Transcript, p. 12, lines 23-26.

[197] Trial Day 1 Transcript, p. 13, lines 9-20.

[198] Plaintiff's Submissions at [27].

[199] Plaintiff's Submissions at [27]; Negri Report at [101]-[104].

[200] Negri Report at [105]-[107], [110], CB pp. 187-188.

[201] Plaintiff's Submissions at [29].

[202] Plaintiff's Submissions at [30].

[203] [2012] VSCA 175 ('Specialist Diagnostic Services').

[204] Specialist Diagnostic Services, [6], quoted in Plaintiff's Submissions at [33] (emphasis in submissions).

[205] [2013] VSC 533 ('Freilich v Wharton').

[206] Plaintiff's Submissions at [34].

[208] Plaintiff's Submissions at [36].

[210] (1960) 60 SR (NSW) 332 ('Heaton').

[211] Heaton, 335-336 (emphasis in submissions).

[212] Re Cook, 810 (citations omitted; emphasis in submissions).

[213] [1954] 56 SR (NSW) 130 ('Re Parimax').

[214] Re Parimax, 133 (emphasis in submissions).

[215] Plaintiff's Submissions at [40].

[216] Negri Report at [101]-[104].

[220] Plaintiff's Submissions at [22].

[222] Plaintiff's Submissions at [44].

[223] Plaintiff's Submissions at [45].

[224] Plaintiff's Submissions at [45].

[225] Watson Affidavit, CB pp. 149-152.

[226] Watson Affidavit, CB pp. 117-120.

[227] Watson Affidavit, CB pp. 121-127.

[228] Watson Affidavit, CB pp. 113-114.

[229] Watson Affidavit, CB pp. 131-135.

[231] Watson Affidavit, CB pp. 139-141.

[232] Watson Affidavit, CB pp. 119-127.

[235] By Supreme Court Order No. M12210.

[236] Instrument of Transfer 1885889 burdened all of the Defendants' Land, except the land that comprised the former Lots 289, 210, 203, 204 and the roads.

[237] [1956] 1 QB 261.

[238] [2005] VSC 169, [11].

[239] Vrakas, [39] (footnotes omitted).

[240] Fraser & Ors v Di Paolo & Anor [2008] VSC 117, [43], [58] ('Fraser').

[241] [2018] VSC 814 ('Re DVC Management').

[242] Re DVC Management, [34] (emphasis in submissions).

[243] [2021] VSC 29 ('Lahanis v Livesay').

[244] Lahanis v Livesay, [17] (emphasis in submissions).

[247] Plaintiff's Submissions at [69].

[248] Order of Lansdowne AsJ in Re Ambrens (Supreme Court of Victoria, SCI2016/03948, 4 May 2017).

[249] Plaintiff's Submissions at [70].

[250] City of Stonnington v Wallish & Ors [2021] VSC 84.

[251] Transcript of Proceedings on 6 March 2023 ('Trial Day 2 Transcript') pp. 114, lines 26-31.

[252] Trial Day 2 Transcript, p. 115, lines 1-2.

[253] Vrakas, [30]. Trial Day 2 Transcript, p. 115, lines 5-8.

[254] Trial Day 2 Transcript, p. 115, lines 12-17.

[255] Trial Day 2 Transcript, p. 117, lines 17-24.

[256] Re Cook, 812-13; Greenwood v Burrows (1992) V ConvR, 54-444, 65,199 ('Greenwood'); Bevilacqua v Merakovsky [2005] VSC 235, [24] ('Bevilacqua'); Prowse v Johnstone [2012] VSC 4, [113] ('Prowse'); Suhr, [44].

[257] Re Robinson, 283; Re Stani, 10; Re Pivotel Pty Ltd [2000] VSC 264; (2001) V ConvR 54-635, 62,215; Bevilacqua, [24]; Suhr, [45].

[258] Greenwood, 65,196; see also Re Miscamble [1966] VicRp 81; [1966] VR 596, 601; Vrakas, [30].

[262] Re Stani, 11; Greenwood, 65,200; Fraser, [49]-[57].

[264] [2005] VSC 169; [2005] 12 VR 224.

[265] Prowse, [99]-[102]; see also Freilich v Wharton, [21]-[26].

[266] Re Cook, 810; Re Robinson, 285-286; Re Stani, 7; Greenwood, 65,192, 65,200.

[267] Trial Day 1 Transcript, p. 69, lines 2-11.

[268] Trial Day 1 Transcript, p. 69, lines 12-17.

[269] Trial Day 1 Transcript, p. 73, lines 6-28.

[270] [2022] VSC 306, [166] ('Jeshing').

[271] Defendants' Submissions at [13].

[272] Jeshing, [111]; Ferella v Otvosi [2005] NSWSC 962; (2005) 64 NSWLR 101, [17]; Tonks v Tonks [2003] VSC 195; (2003) 11 VR 124, [8].

[273] See Vrakas, [35]-[41]; Prowse; Suhr; Re Comdain Homes Pty Ltd [2013] VSC 487.

[274] Trial Day 2 Transcript, p. 114, lines 26-27.

[275] Trial Day 1 Transcript, p. 68, lines 30-31; p. 69, line 1.

[276] Trial Day 2 Transcript, p. 117, lines 17-24.

[277] Trial Day 2 Transcript, p. 117, lines 27-31; p. 118, lines 1-2.

[278] Trial Day 2 Transcript, p. 118, lines 3-5.

[280] Trial Day 1 Transcript, p. 74, lines 26-30.

[281] Defendants' Submissions at [16]. See the discussion at paragraphs 155-158 below.

[287] Szymczak Affidavit at [24], CB p. 247.

[288] Re Cook, 810-11. The Defendants then include the rest of the passage from Re Cook set out in paragraph 29 above, which I do not need to repeat here. See also Fraser, [36]; Vrakas, [34]-[35]; Re Stani, 10.

[289] Defendants' Submissions at [22].

[290] Defendants' Submissions at [22].

[291] Defendants' Submissions at [22].

[292] Defendants' Submissions at [23].

[302] Trial Day 1 Transcript, p. 65, lines 28-30.

[303] Plaintiff's Submissions at [11].

[304] Trial Day 1 Transcript, p. 74, lines 14-21.

[305] Defendant's Submissions at [32].

[306] Defendant's Submissions at [33].

[307] Defendant's Submissions at [33].

[308] Trial Day 2 Transcript, p. 139, lines 14-22.

[309] Trial Day 2 Transcript, p. 121, lines 3-7.

[310] Trial Day 2 Transcript, p. 139, lines 14-22.

[311] Trial Day 2 Transcript, p. 139, lines 14-22.

[312] Trial Day 2 Transcript, p. 139, lines 14-22.

[313] Trial Day 2 Transcript, p. 139, lines 14-22.

[314] See paragraphs 32(d) and (e) above.

[315] See paragraph 29 above and the authorities referred to therein, including in the footnotes.

[316] For example, see Randell v Uhl, [119].

[317] In particular, see paragraphs 92 and 93 above.

[318] Citing Trial Day 1 Transcript, p. 59, lines 23-26.

[319] See paragraphs 96-99 above.

[320] See paragraphs 111-113 above.

[321] See paragraphs 114-116 above.

[322] Gerhardy Affidavit, exhibit MSG-1, pp. 6-7.

[323] Schedule B to the orders made on 16 June 2022.