Plaintiffs v Defendants

2 The defendants, Mr Kevin Phelan, Ms Bernadette Phelan and Dr Yang Yun, are beneficiaries of the covenant and object to the plaintiffs' application.

3 The issue for determination is: should the covenant be modified to permit two dwellings to be erected on the subject land? The application is made pursuant to s 84(1)(c) of the Property Law Act 1958 ('the Act').

4 I find the plaintiffs have failed to establish that the proposed modification will not substantially injure persons entitled to the benefit of the covenant. Accordingly, their application is unsuccessful.

5 The plaintiffs rely upon the following filed affidavits which were tendered at trial:

(a) affidavit of Mr Dominic Lastrina, director of the first plaintiff company, sworn on 13 February 2020;

(b) affidavit of Ms Raffaela Lastrina, second plaintiff, sworn on 13 February 2020; and

(c) affidavit of Mr Giovanni Gattini, affirmed on 27 July 2020 ('Mr Gattini's affidavit') containing his expert report at exhibit 'GG-2'.

6 Ultimately, I do not accept the conclusions Mr Gattini drew on the question of substantial injury. The reasons for coming to a contrary conclusion are discussed further below.

7 The defendants rely upon the following filed affidavits which were tendered at trial:

(a) affidavit of Mr Kevin Phelan, first defendant, affirmed on 22 June 2020 as corrected on 24 November 2020 ('Mr Phelan's affidavit');

(b) affidavit of Ms Bernadette Phelan, second defendant, filed on 28 June 2020 ('Ms Phelan's affidavit); and

(c) affidavit of Dr Yang Yun, third defendant, filed on 28 June 2020 ('Dr Yun's affidavit').

8 Mr and Ms Phelan are the registered proprietors of a property in Beatrice Avenue and reside there. Their property is on the same side of the street as the subject land but not abutting it. Dr Yun is a registered proprietor of a property on Clydebank Road and resides there. Clydebank Road runs roughly parallel with Beatrice Avenue and is directly below it. Dr Yun's property does not abut the subject land.

9 Oral evidence was given by Mr Lastrina, Ms Lastrina, Mr Gattini, Mr Phelan, Ms Phelan and Dr Yun. The defendants caused a subpoena for production to be issued to Architecton, the architectural firm engaged by the plaintiffs. Mr Nick Lukas, director of Architecton, appeared and produced documents, and provided evidence identifying those documents.

10 I accept the witnesses genuinely attempted to answer questions truthfully. This does not mean that I accept all of their evidence. I preferred the evidence of Mr and Ms Phelan and Dr Yun over the evidence of the plaintiff witnesses in respect of the character of the neighbourhood. It accorded with the impression of the neighbourhood that I formed while undertaking a view.

11 The defendants challenged the independence of the plaintiff's expert, Mr Gattini.[1] Mr Lukas, the architect of the plans for the subject land, produced emails that he sent to Mr Gattini and Mr Lastrina about the plans. Mr Gattini agreed under cross-examination that he had liaised with Mr Lukas regarding the obtaining of plans to append to his report.[2] The critical issue is whether Mr Gattini's report was based upon an undisclosed assumption. As Riordan J stated in Finance & Guarantee Company Pty Ltd v Auswild,[3] 'unless the earlier retainers and communications considered matters upon which his opinions as expressed in the report were based', there is no obligation to disclose them.[4] I find Mr Gattini's report was not based upon an undisclosed assumption.[5]

12 The defendants submitted that the plaintiffs and Mr Gattini exhibited a shorter version of the plans rather than the lengthier plans Mr Lukas identified in oral examination and dated September 2019. The defendants made submissions about Mr Gattini's conduct but did not put the allegations directly to him during cross-examination.[6] The plaintiffs submitted that not once were any of the allegations as to Mr Gattini's impartiality or independence put to him during cross-examination, in violation of the rule in Browne v Dunn.[7] The rule in Browne v Dunn was explained by the Victorian Court of Appeal in Lord Buddha Pty Ltd v Harpur[8] as follows.

As observed by Goldberg J in White Industries (Qld) Pty Ltd v Flower & Hart (a firm)[9] the rule in Browne v Dunn[10] is a rule of fairness which requires a party or a witness to be put on notice that a statement made by the witness may be used against the party or witness or to be put on notice that an adverse inference may be drawn against the witness or an adverse comment made about the witness in order that the witness may respond to that issue and give an explanation. The rule is intended to ensure that a witness is given an opportunity to give an explanation for matters that are later going to be alleged against him or her unless by some other means the point has been exposed in the sense that it was clear what was going to be said in advance of the witness giving the evidence and the nature of the attack was otherwise apparent to the witness.[11]

The rule does not require that there be put to the witness in cross- examination every point upon which his or her evidence might be used against him or her or against the party who calls the witness. It is not a rule designed to encourage or condone excessive cross-examination.[12]

13 The defendants did not directly put to Mr Gattini that his evidence was or could be misleading. It would be unfair and is indeed unnecessary for me to deal with the allegations.

14 The evidence establishes that Mr Gattini liaised with the architect and a more condensed set of plans was utilised in his report. I accept that the plans evolved over time and it was unnecessary to attach all the iterations or provide the full version to the Court or indeed to include opinions by the architect as to the neighbourhood. The plans utilised by Mr Gattini are those exhibited to his report. Other plans prepared by Mr Lukas are in evidence. It is not in dispute that the plans evolved over time and that the report does not attach a longer document containing the plans. It was unnecessary to do so given the report was not based on those other plans.

15 The defendants referred to Mr Gattini's letter of instruction from the plaintiffs' solicitors which posited the conclusion he was to find, that being, 'support of the removal of the covenant'.[13] The wording of the letter of instruction caused concern to the defendants who submitted that Mr Gattini was partisan in his approach. However, there is no evidence of a partisan approach in Mr Gattini's reports. Mr Gattini's report states its purpose, namely to consider 'the merits of the proposal to modify the restrictive covenant' pursuant to s 84 of the Act.[14] His reports contains his opinion on that issue. Mr Gattini's report concluded that the proposed development would not have any significant impact on the character of the subdivision.[15] A later affidavit concluded:

The proposed variation to the covenant will not give rise to substantial injury to the persons entitled to the benefit nor will it substantially alter the character of the neighbourhood. If the covenant were varied it would give rise to a built form that is consistent with many new dwellings within the neighbourhood and the immediate area.[16]

16 The paramount duty of an expert is to assist the Court impartially on matters relevant to their expertise.[17] Mr Gattini's report indicates that he was aware of his obligations as an expert witness.[18] Although ultimately I did not accept his conclusions, I found that he answered questions put to him during cross-examination carefully and truthfully.

17 The subject land is described in certificate of title volume 07840 folio 155. The land is lot 46 on plan of subdivision 007918. The plan of subdivision includes all lots between Afton Street and the Maribyrnong River reserve. The restrictive covenant is contained in transfer number 1779699 dated 11 June 1940.

18 By way of their originating motion filed,[19] the plaintiffs seek the restrictive covenant be modified by deletion of the words struck through in the extract below and insertion of the word and letter in bold text, capitalised and double-underlined, so that the covenant as modified reads:

... they will not at any time hereafter erect built or construct or allow or permit to be erected built or constructed a dairy on either the said lots 46 and 59 hereby transferred nor erect nor leave standing nor allow to be erected or left standing on either of the said lots hereby transferred any building except a private dwelling house and shall not erect or allow to be erected as aforesaid more than one TWO such dwelling-houseS to be at a cost including fences and outbuildings of not less than three hundred pounds and having its front elevation to the road to which the lot upon which it is erected abuts ...

19 Figure 1 (below) is a map depicting the subject land, shaded green with red hatching and a thick black border, in relation to the location of the benefitting lots marked yellow and burdened lots ma[20]ed green.20

Figure 1 Plan showing the location of the beneficiaries

20 The plaintiffs are the registered proprietors of the subject land. The onus of proof rests upon them to demonstrate that modification of the covenant will not cause substantial injury to those who benefit from it. There will be no material impact on the neighbourhood character or amenity and no substantial injury if the modification is allowed. The onus is readily discharged. The application should be allowed for the following reasons.

21 Firstly, the covenant plays a minimal role in maintaining the built form of the neighbourhood. It is limited as it does not govern the scale, height, building bulk or appearance of any dwelling at the subject land nor the number of people who may live there. Mr Gattini's report states:

During my inspection of the neighbourhood I noted that there have been a number of changes to the character of the neighbourhood since the covenant was imposed. The neighbourhood is no longer defined by single dwellings on lots. There are a number of lots which have more than one dwelling on them, for instance Beatrice Avenue contains 3 lots which have more than one dwelling on them, a total of 7 dwellings is evident on 3 lots. Clydebank Road where it meets Afton Street has four dwellings on what were 2 lots. Afton Street also contains a number of multi-dwelling lots ranging from 3 to 5 dwellings on each lot. Multi-unit development is along parts of Afton Street extending to Buckley Street.

The neighbourhood is in transition due to the ageing nature of the dwellings. Existing dwellings are being demolished to make way for a mix of multi-dwellings and new homes.

The Moonee Valley Planning Scheme supports the ongoing development of the neighbourhood for a mix of dwelling types and densities. I envisage that the level of change in the neighbourhood will continue to occur and the neighbourhood will continue to evolve towards a more diversified neighbourhood comprising multi-dwellings.[21]

22 Secondly, the modern scale and appearance of the proposed dwellings are consistent with contemporary dwellings on Beatrice Avenue. Mr Gattini states in his affidavit:

... Many new homes exhibit similar spatial and built form characteristics to those proposed by the plaintiffs. The proposed development is not substantially different architecturally and in scale with many other large houses in the area.[22]

23 Thirdly, traffic impacts will be minimal. Off-street car parking will reduce any car parking impacts. Mr Gattini's report states:

... There will not be a discernible increase in traffic on the road network. Limited access to Buckley Street from Beatrice Avenue will ensure that traffic movements in Beatrice Avenue will remain very low by suburban standards.[23]

24 Fourthly, the lots with the benefit of the covenant do not share a boundary with the subject land. Mr Gattini's report states:

...I noted from my inspection of the subdivision that some 50% of all beneficiaries are either located on Afton Street or Buckley Street which have no practical relationship with the property.[24]

25 Fifthly, across from the subject land, is 13 Beatrice Avenue which successfully modified the covenant to construct two dwellings on that lot. The defendants did not defend the application relating to 13 Beatrice Avenue and having failed to oppose that, here they are employing every tactic to oppose this application. The development at 13 Beatrice Avenue is the newest multi-dwelling development along Beatrice Avenue. Mr Phelan accepted in cross-examination that the new developments form part of the character of the area.

26 The plaintiffs have not satisfied the Court, on the balance of probabilities, that their proposed modification will not substantially injure any persons entitled to the benefit of the covenant. The plaintiffs have not discharged the burden of proof and their application should be dismissed.

27 Firstly, the neighbourhood remains a predominantly single dwelling one because of the covenant. Mr Phelan gives the following evidence:

This subdivision has a predominance of single dwellings. There are dwellings on Lots 1-4, Lots 6-97 and Lots 112-133. There is no Lot 5 and Lots 98-111 are undeveloped providing parkland along Smiley Crescent and a link to the shared pathways to the Maribyrnong in each direction. Therefore, of the one hundred and eighteen Lots with houses there are just seven with more than one dwelling, lots 4, 6, 30, 59, 125, 126 and the lot known as 3A and 3B Clydebank Rd.[25]

28 Secondly, the single dwelling covenant defines the character of the neighbourhood. The advantages include: low-density living, spaciousness, abutting backyards, being attractive to families, protection of the historical value of post-war housing and a community-oriented 'quality of life'.[26] If the covenant was modified as proposed, traffic would increase because the street is narrow and has a bend along it, in addition to restricted parking and a traffic control measure. On-street parking will become more difficult. Mr Gattini's statement that there would be no 'discernible' impact on the overall volume of vehicles is a generalisation unsupported by data. Ms Phelan gives the following evidence:

Size & Bulk Proposed at 20 Beatrice

I am particularly concerned about the size and bulk of the proposed development, which will contain a total of 8 bedrooms. Such a development would be completely out of character with the predominance of single dwellings in the street. A new single dwelling on that lot would surely not provide more than 4 or 5 bedrooms.

Increase in Numbers of Residents

It would follow that such a development would increase the number of people living in the street, an increase in population density.

More Cars, Two Driveways

Each of the two proposed houses provides for two [off-street] car spaces. With each having four bedrooms, there is a possibility of at least four cars per townhouse, a total of 8 cars for the entire site. This will impose an increased burden on our street due to existing parking restrictions. On-street parking is very limited.[27]

The proposal is therefore out-of-character with the neighbourhood. The size and bulk of the proposal is greater than for a single dwelling.

29 Thirdly, Mr Gattini misdirected himself in forming his opinion that there is 'no practical relationship' between the subject land and lots benefitting from the covenant. Mr Gattini conflates an absence of physical connection with an absence of practical benefits. It ignores the legal relationship between the properties. Mr Gattini failed to properly consider 'intangibles' contrary to the authorities.[28] It is not part of the practical benefits test, outlined by the authorities, to require that the subject land and benefitting land be in a close physical relationship such as a short distance, within a line of sight or a horizontal line of sight as Mr Gattini states in his report.[29] Therefore, Mr Gattini failed to properly consider the relationship between the subject land and the lots which enjoy the benefit of the covenant.

30 Fourthly, there would be a precedential effect if the application were allowed. It could act as encouragement to more applications as seen at 13 Beatrice Avenue. In 2016, the Court made an order, unopposed, to modify a similar covenant at 13 Beatrice Avenue. The Court did not have the benefit of an opposition and may not have conducted a view at that time.

31 Fifthly, there is evidence that beneficiaries relied on the covenant when they purchased their land or existing home.

32 Sixthly, the plaintiffs do not address the potential adverse impact on property value should the covenant be modified. There would be a direct adverse consequence arising from the loss of a point of difference from other neighbourhoods in Aberfeldie and the municipality which do not have the benefit of a single dwelling restriction.

33 There will be substantial injury caused by the proposed modification.

34 The plaintiffs' application is made pursuant to s 84(1)(c) of the Act. It provides:

Power for Court to modify etc. restrictive covenants affecting land

(1) The Court shall have power from time to time on the application of any person interested in any land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon by order wholly or partially to discharge or modify any such restriction (subject or not to the payment by the applicant of compensation to any person suffering loss in consequence of the order) upon being satisfied -

...

(c) that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction:

Provided that no compensation shall be payable in respect of the discharge or modification of a restriction by reason of any advantage thereby accruing to the owner of the land affected by the restriction unless the person entitled to the benefit of the restriction also suffers loss in consequence of the discharge or modification nor shall any compensation by payable in excess of such loss; but this provision shall not affect any right to compensation where the person claiming the compensation proves that by reason of the imposition of the restriction the amount of consideration paid for the acquisition of the land was reduced.

35 The relevant principles are well established. These principles, among others, were summarised by Derham AsJ in Jiang v Monaygon Pty Ltd:[30]

The plaintiff relies on s 84(1)(c) of the PLA, and therefore has the burden of proving as a matter of fact[31] that the proposed discharge or modification will not substantially injure those with the benefit of the covenant. As the person carrying the burden, the plaintiff must prove the negative[32] and the failure by the plaintiff to establish its plans with specificity may result in the Court not being satisfied that the conditions of the section have been fulfilled.[33]

The following guiding principles apply to determine whether those entitled to the benefit of the covenant will not be substantially injured:

(a) a substantial injury must be a detriment that is real and not fanciful.[34] The requirement that the injury must be substantial was intended 'to preclude vexatious opposition cases where there is no genuineness or sincerity or bona fide opposition on any reasonable grounds';[35]

(b) the substantial injury relates to practical benefits, being any real benefits to the person entitled to the benefit of the covenant.[36] 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;[37]

(c) substantial injury may consist of 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'.[38] This consideration is referred to as the 'precedent value';[39] 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.[40]

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.[41]

In Prowse v Johnstone,[42] Cavanough J considered that in assessing the benefits actually conferred by the covenant, the Court should have regard to 'the realistic probabilities of the plaintiff actually bringing about the worst that could be done under the existing covenant.'[43] His Honour was prepared to 'assume, without deciding' that in assessing the benefits which would remain, if the covenant is removed or modified, the Court could consider the protections afforded to neighbouring properties by statutory planning provisions. It is relevant to consider evidence of statutory planning provisions to the extent it shows 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'.[44]

In considering whether the plaintiff has satisfied the Court that there will not be substantial injury:

(a) town planning principles and considerations are not relevant;[45]

(b) the absence of objectors to the discharge or modification of a covenant will not necessarily satisfy the onus of proof;[46] and

(c) each case must be decided on its own facts,[47] and each covenant should be construed on its own terms and having regard to the particular context in which it was created.[48]

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.[49] The Court in exercising its discretion, may consider town planning principles and the precedent value.[50]

37 Applying s 84(1)(c) of the Act, the question is whether there will be substantial injury to the beneficiaries of the restrictive covenant if it is modified. In addition to the oral and documentary evidence, my findings below are informed by the view which I undertook of the subject land and neighbourhood, accompanied by Mr Phelan and the solicitor for the plaintiffs. The plaintiffs have failed to establish there will be no substantial injury if the covenant is modified. I disallow the plaintiffs' application for the following reasons.

38 The proposed plans are exhibited to Mr Gattini's report. Mr Lukas, architect, confirmed that these were the plans.[51] The plans are for two large adjoining residential buildings with large windows facing Beatrice Avenue. Each is proposed to have a driveway leading into garage below the proposed dwellings following the steep slope down from Beatrice Avenue to the back of the subject land. Figure 2 (below) is a drawing depicting the proposed view from Beatrice Avenue, extracted from the architectural plans attached to Mr Gattini's report.

Figure 2 Design Response for 20 Beatrice Avenue by Architecton

39 Mr Gattini gave oral evidence describing the plans as follows.

Viewed on the oblique, this imagery shows how the building is sculpted, and it's sculpted by means of it having an address to the street... And then there's a stepping down of the built form both down the slope and along the side view... Both garages have two cars within. And there was storage space within them to park an additional car at the very least...

...[T]he building breaks behind the garage, starting to step into the block and then it steps into a kitchen living area, swimming pool, and on both sides there's a landscaping to integrate with the backyards of its neighbours... The upper level is ostensibly bedrooms, access via lift... [There is an] essentially straightforward roof, with a minimal pinch to the edge... [T]he built form steps down from Beatrice Avenue, and basically uses the slope to interpose the two-storey built form. It's important to understand that ostensibly the building as viewed from the street is a one - slightly more than one-storey building... Materially is exhibited there showing a combination of glass, aluminium, what's commonly referred to in the industry as standing seam, which is a charcoal Colourbond click-lock system, that looks like a series of ribs running vertically along the building.[52]

40 Firstly, the parties agree that the neighbourhood is defined by the subdivision. It is characterised by an unique enclave of overwhelmingly single dwelling homes. It is a neighbourhood with a sense of spaciousness, as discussed further below. The Maribyrnong River is very close by. The neighbourhood is on a hill inclining down towards the river. Indeed, only Clydebank Road and Smiley Crescent are between Beatrice Avenue and the reserves and parklands abutting the river and which contain a tributary to it. From some parts of the neighbourhood, there are views across the river to the hills on the opposite side.

41 This characteristic of single dwelling homes has developed over time from and within the parameters of the covenant. I accept the defendants' evidence that of 118 lots only 7 have more than one dwelling. That is, a vast proportion of the lots have a single dwelling on them. This feature numerically defines the predominate character of the subdivision as being single dwelling lots.

42 In cross-examination, Mr Gattini conceded he had not counted the number of lots to ascertain how many contained a single dwelling compared to the number of lots with more than one dwelling and agreed with Mr Phelan's affidavit in that respect.[53]

43 I do not accept Mr Gattini's evidence that 'the neighbourhood will continue to evolve towards a more diversified neighbourhood comprising multi-dwellings'.[54] It is speculative. Moreover, it is premised on the basis that the restrictive covenants will be modified so as to permit more than one dwelling to be erected. Mr Gattini gave the following oral evidence.

...Now turning to the question of substantial injury. What impact, in your view, do you think that modification of the covenant in the manner proposed by the plaintiffs would have upon the character, as the - as you have described it? --- Yes. So in assessing the impact on the character of the area, on has to have regard to what is the nature of the area, what (indistinct) what new dwellings have been built, what is the direction that the area is going to. And what we're left - we're having here is that this subdivision, albeit a 1930s subdivision, most of the construction within the subdivision took place in the 40s. And many of these dwellings now are approaching their effective lifecycle. And experience and observation of the subdivision has shown us that a lot of the dwellings are getting replaced with quite contemporary built forms, not dissimilar to what is being proposed as part of this variation to the covenant. I suspect that as time goes by, many of these dwellings willing be replaced, either with a single dwelling of significant stature, because land values (indistinct) probably are now quite high. But essentially reflecting the trend that is right across most Melbourne metropolitan areas for more contemporary built forms.[55]

44 Mr Gattini gave evidence that the character of the neighbourhood will inevitably change: 'invariably, when a subdivision reaches maturity, the dwellings will be replaced'.[56] He stated that many dwellings in the subdivision are approaching the end of their lifecycle and many will be demolished.[57] He stated, 'I've got considerable experience in the planning of large-scale subdivisions. I know the generation rates for dwellings and that's why I've come to that conclusion'.[58] This is speculative. There is no expert evidence, for instance, from a builder or architect, regarding the duration of the buildings across the subdivision.

45 Ultimately, Mr Gattini conceded that his focus had been on built form.[59] A neighbourhood's characteristics are not solely derived from built form and must include other characteristics. This leads to the next characteristic of the neighbourhood.

46 Secondly, the predominance of single dwelling lots has created a neighbourhood character with an ambience of spaciousness. Typically, homes are set back from the street with a wide front yard and a single driveway to one side. Front yards tend to be adorned in gardens or lawn. There is space between dwellings on neighbouring lots. The streetscape is visibly well-maintained. There are views of the riverbanks and public lands from each street sloping down to the Maribyrnong River reserve and parklands. The enclave is largely a preservation of distinctive weatherboard and brick, post-war era homes.

... the general amenity of the area is that it's a very quiet, tucked away, low vehicle volume area. It's really not connected from the traffic point of view so it experiences quite low volumes. By virtue of the slope, which is quite pronounced from street to street, there's a staggering of the way that the dwellings have been positioned on the slope and that gives rise to the situation where people further up the slope have proper views across the valley... Now, the subdivision is what we call a curvilinear subdivision so it's not your typical grid layout at 90 degrees. Naturally the surveyors at the time saw the slope and sought to build the roads in along the contours of the slope contours [sic] to avoid unnecessary cut through the slope...[60]

48 Mr Phelan gives the following evidence on the character of the neighbourhood:

The proposed development will detract from the character of the neighbourhood in the following ways:

We enjoy gardens when we regularly walk passed the property at 20 Beatrice Ave or whenever we babysit our grandchildren we take them along Beatrice Ave to Clifton Park with its adjoining playgrounds. For us it is much more pleasant to have a neighbourhood with dwellings which allow space for a front garden.

It is of benefit for us and our visitors to be able to park within a reasonable distance from our home.

For us, the pleasant amenity of our area is diminished by buildings which have bulk extending to within 4.5m with an overhang at 3.5m from the footpath.

The visual impact of the proposed building is out of keeping with the level of bulk in homes in the neighbourhood. The development will dominate the houses on either side.

The proposed development will cause a loss of privacy for homes to the west because of the height of the buildings, and to the south and north. Upper windows overlook private garden areas.

Double the number of residents' and their visitors' cars per lot, if the dual dwelling was allowed would detract from the sense of space, the actual parking spaces and thus add to the sense of over-crowdedness.

If our right to maintain the single dwelling restriction is removed, we fear the precedential value that such a decision will have for us in the future. I feel this very strongly because of the way the development occurred at number 13.

It is my opinion that the covenant is of benefit in the broader meaning of the word, to others besides the beneficiaries because it helps maintain something that is good for the neighbourhood. Overturning it benefits the plaintiffs alone.[61]

49 Dr Yun gives the following evidence that the proposal is out-of-character:

Bulk of Proposed Development

The plaintiffs' concept plans to develop the property reveal proposed buildings of bulk and a proportion of land coverage which are not in keeping with our neighbourhood character.

It does not reflect the nature of low density, single dwellings in our neighbourhood.

We do not want our neighbourhood to become over developed by two-dwellings-per-lot homes which impact on pedestrian safety, traffic flow, parking and street environment.[62]

50 The following figures, 3 and 4, are the proposed ground floor and first floor plans for the subdivision extracted from the architect's plans exhibited to Mr Gattini's report. Mr Lukas gave evidence that he recognised the document and the date on the front cover is September 2019.[63]

51 Figures 3 and 4 are visually representative of the impact the proposed development of two dwellings on the subject land would have if the modification to the covenant was allowed.

Figure 3 Ground Floor Plan for the subject land by Architecton

Figure 4 First Floor Plan for the subject land by Architecton

52 I accept the defendants' evidence that the proposed construction of two double-storey dwellings on the subject land would break up the streetscape, impact upon the spaciousness of the area and be out-of-character. The plaintiffs submitted that the plans for the proposed dwellings are consistent with the modern scale and appearance of dwellings emerging in the area. However, the predominant feature of the neighbourhood is different, as described above. Nor does the plaintiff's submission comparing any injuries with those arising from a hypothetical large single dwelling. A large single dwelling, compliant under existing planning controls, would not necessarily alter the ambience of the neighbourhood and in particular the characteristic of spaciousness. On the other hand, permitting modification to the covenant to allow two dwellings would be inconsistent with the ambience of the subdivision created by the existence of the covenant.

Relationship between the subject land and lots with the benefit of the covenant

53 Thirdly, lots enjoying the benefit of the covenant do not share a common boundary with the subject land. Mr Gattini noted that about half of the number of lots benefitting from the covenant are on neighbouring streets, Afton Street and Buckley Street, meaning there is no practical relationship with the subject land.[64] The defendants responded that Mr Gattini conflated an absence of a physical connection with an absence of a practical benefit. I accept the defendants' submission. By the nature of the unique neighbourhood, including its characteristics of single dwelling homes and spaciousness, lots benefitting from the covenant experience practical benefits even though they do not abut the subject land. Indeed, the defendants' properties do not abut the land and they gave evidence, as discussed above, about the benefits they derive from the covenant.

54 Fourthly, permitting modification would create a precedent for applying to modify the covenant. The plaintiffs and defendants referred to an unopposed order made by this Court to modify a covenant over 13 Beatrice Avenue, a lot across the street from the subject land. As outlined by in Jiang v Monaygon Pty Ltd (quote above at [35]), each case is decided on its[65]wn facts.65

55 I accept Mr Phelan's evidence at paragraph 27.7 of his affidavit (quoted above at [48]). Dr Yun gives evidence about the reasons he purchased his property in 2010 and his concerns for the future of the neighbourhood:

We knew when we purchased that there was a covenant on our title which we thought protected our block of land and others in the neighbourhood from overdevelopment in the future (because at that time we thought all lots had the same covenant).

We felt safe and secure believing the future streetscape and low-density housing would remain intact because of the covenant. We did not understand that we would have to defend a proceeding in Court to secure that protection.

...

Effects Creeping West to Clydebank

Presently, on Clydebank Road, there is only one lot which has been subdivided. We are part of the same neighbourhood as Beatrice Avenue, a little further west, and we do not want to see the incidence of dual dwelling lots increase and creep into our street. If this one is allowed it would increase the chances of more to follow.[66]

56 I accept the defendants' evidence that some beneficiaries purchased their property knowing the covenant to be in place and relied on its existence. I accept the defendants' concerns that modification to the covenant could set a precedent for future applications. Property ownership changes over time. Houses are demolished or renovated. Permitting modification here could create a precedent for future applications to modify the covenant in the neighbourhood.

57 The parties agree that the neighbourhood is characterised as having a low volume of traffic movement, in particular along Beatrice Avenue. I assess this factor neutrally. On the one hand, the defendants did not provide any expert evidence regarding it. On the other hand, Mr Gattini was not in a position to draw conclusions on the impact on traffic or car parking that the proposed development will have on beneficiaries. The following exchange occurred during cross-examination of Mr Gattini:

Your CV, Mr Gattini, does not say you are qualified or experienced as a trafficking in [sic] engineer, does it?---No, that's correct.

...

And then you say, 'Traffic movements in Beatrice Avenue will remain very low by suburban standards?---Correct.

Your report does not say there anything about measurements or the counting that you have done to determine the capacity of the road network; does it?---There's no need to---

Sorry, sorry, I'm just asking you what your report doesn't say?---My report doesn't do counts for Beatrice [Avenue].

Your report does not say, does it, what is the highest capacity or the practical capacity or any other capacity of Beatrice Avenue to carry vehicles, does it?---No, it does not.

...

So your affidavit does not say there anything about the measurements or the counting that you have done, does it?---No.

...

So, what I'm trying to [explain] succinctly is that I haven't transgressed into the area of traffic, traffic comments. It is from my experience that I draw the conclusion that having a single dwelling, an additional single dwelling within Beatrice [Avenue] will not make a significant difference to the capacity of Beatrice [Avenue] to operate... I make that observation with considerable experience... I do make the point that this a relatively low traffic volume neighbourhood, I acknowledge that.[67]

58 The defendants' submissions about land values in the area was not supported by expert evidence. It was speculative and I have not taken it into account.

59 The plaintiffs have failed to establish that the proposed modification will not substantially injure the beneficiaries to the covenant. Their application is unsuccessful. I will hear the parties on costs.

[1] Transcript of 24 November 2020, 197.22-198.7.

[3] (2019) 59 VR 288, 298 [39].

[5] Mr Gattini made three reports. Where reference is made to his report, it is to the final report dated 25 February 2020 ('Mr Gattini's report').

[6] Transcript of 24 November 2020, 199.28-200.9, 201.10-26.

[7] [1894] 6 R 67. Transcript 24 November 2020 203.16-20; 220.1-28.

[8] Lord Buddha Pty Ltd v Harpur [2013] VSCA 101 ('Lord Buddha').

[9] [1998] FCA 806; (1998) 156 ALR 169, 216.

[11] Browne v Dunn (supra); Bulstrode v Trimble [1970] VicRp 104; [1970] VR 840, 849; Karidis v General Motors-Holdens Pty Ltd [1971] SASR 422, 425-6; Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 44 ALR 607, 623.

[13] Exhibit 'GG-1' to Mr Gattini's affidavit 'Copy of the letter of instruction' dated 20 September 2019.

[14] Exhibit 'GG-2' to Mr Gattini's affidavit, 2.

[17] Clause 2, Expert Witness Code of Conduct contained in Form 44A of the Supreme Court (General Civil Procedure Rules) 2015 together with Order 44. See also s 65F of the Civil Procedure Act 2010.

[18] Exhibit 'GG-2' to Mr Gattini's affidavit 'Required Expert Witness Statement' dated 30 October 2019 outlining the information requirements of Form 44A - Expert witness code of conduct.

[19] The originating motion was filed on 18 November 2019, amended on 18 February 2020 and further amended on 10 March 2020.

[20] Exhibit 'GG-2' to Mr Gattini's affidavit, 'Attachment 7: Feigel & Newell map and Search of Beneficiaries'.

[21] Exhibit 'GG-2' to Mr Gattini's affidavit, 9.

[23] Exhibit 'GG-2' to Mr Gattini's affidavit, 14.

[26] Summarised from Mr Phelan, Ms Phelan and Dr Yun's affidavits and Mr Phelan's oral evidence.

[27] Ms Phelan's affidavit, [8]-[10].

[28] Prowse v Johnstone [2012] VSC 4 ('Prowse'), [106]; Re Morihovitis [2016] VSC 684, [38].

[29] Fraser v Di Paolo [2008] VSC 117, [47].

[30] [2017] VSC 591, [31]-[36] ('Jiang v Monaygon Pty Ltd').

[31] Vrakas v Registrar of Titles [2008] VSC 281, [40] (Kyrou J) ('Vrakas') and the cases cited.

1. [35] Ridley v Taylor (1965) 1 WLR 611, 622 (Russell LJ), referred to with approval in Re Stani (Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 10.

[36] Vrakas [2008] VSC 281, [30], [34] and the cases cited.

[37] Re Parimax (SA) Pty Ltd (1956) 56 SR (NSW) 130, 133 (Myers J).

[38] Re Stani (Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 11.

[39] Vrakas [2008] VSC 281, [39] and the cases cited.

[41] Re Cook [1964] VicRp 106; [1964] VR 808, 810-11 (Gillard J), approved in Freilich v Wharton [2013] VSC 533, [25] (Bell J).

[45] Vrakas [2008] VSC 281, [41] and the cases cited.

[49] Re Cook [1964] VicRp 106; [1964] VR 808, 810; Re Robinson [1972] VicRp 28; [1972] VR 278, 285-6; Re Stani (Full Court of the Supreme Court of Victoria, Young CJ, Barber and Nelson JJ, 7 December 1976) 7; Greenwood v Burrows (1992) V ConvR 54-444, 65,192, 65,200; Stanhill Pty Ltd v Jackson [2005] VSC 169; (2005) 12 VR 224, 239.

[50] Vrakas [2008] VSC 281, [45]-[46].

[51] Transcript of 24 November 2020, 176.22-3.

[52] Transcript of 23 November 2020, 55.2-56.13.

[54] Exhibit 'GG-2' to Mr Gattini's affidavit, 9.

[55] Transcript of 23 November 2020, 56.24-57.15.

[61] Mr Phelan's affidavit, [27]-[28].

[63] Transcript of 24 November 2020, 176.22-6.

[64] Exhibit 'GG-2' to Mr Gattini's affidavit, 11.

[65] Jiang v Monaygon Pty Ltd, [35].

[66] Dr Yun's affidavit, [3]-[4], [13].

[67] Transcript of 23 November 2020, 66.11-14, 21-31; 68.6-8, 23-29; 68.31-69.1; 69.5-7.