Re Pivotel Pty Ltd [2000] VSC 264 (23 June 2000)

Re Pivotel Pty Ltd [2000] VSC 264 (23 June 2000) - VSC 2000 case summary — Zoe

[48]

The first primary or source document from which there may be gained an understanding of the character or composition of the "neighbourhood" at an earlier time than the present was an aerial photograph taken in 1951 of the area in which Lot 38 is situated. There was tendered a series of aerial photographs from that time until 1995 giving some insight into the nature and character of the "neighbourhood" in which Lot 38 is situated and its changes. In 1951 the area in which Lot 38 is situated was generally cleared of vegetation. There were some dwellings erected but development generally in the "neighbourhood" was that which could be considered as patchy. An aerial photograph taken in 1962 demonstrates that by that time there were considerably more dwellings erected in the area of the subdivision. As expressed by Biasci it demonstrated a further development towards urban rather than rural settlement and the area in the "neighbourhood" was moving towards and becoming an "urban fringe". The next aerial photograph tendered was one taken in 1972. That photograph shows that by then the Maroondah Highway had been duplicated and that since 1962 there had been a considerable increase of an urban nature in the general "neighbourhood". Further, within the subdivision there had also been a substantial increase in development of an urban nature. A further aerial photograph taken in 1978 was also tendered. It showed that during the period since 1972, further urban development had occurred in the general "neighbourhood" and there had been an increase in the number of dwellings erected in the area comprising the subdivision. This aerial photograph also depicted that in the northern section of the "neighbourhood", that is north of Meadow Road, the allotments of land were generally smaller than those within the subdivision. By the time that the next aerial photograph was taken in 1987 further urban development had occurred in the "neighbourhood". Biasci gave evidence that the changes in the general "neighbourhood" reinforced the pattern of development which had occurred in the previous decade which was the "suburbanisation" of Croydon. He described a "suburbanised environment" as having the elements of available services including sealed and curbed roads, constructed footpaths and the inter-dispersal of brick dwellings with older weatherboard houses together with the maturing of formal gardens. The witness Gattini expressed the view that by 1987 the "suburbanisation" of the area comprising the "neighbourhood" had been completed. It is to be recalled that it was on 7 October 1987 that by Order of a Master the restrictive covenant affecting Lot 38 was modified to a "not more than four dwelling" restriction.

[50]

A further insight into the changes that have occurred over the past years to the nature and character of the area comprising the subdivision is to be gained from the evidence of a Astrida Roper who has lived in that area since commencing to live there with her family in 1953. She said that it was in 1972 that Bonnie View Road was sealed and curbed and that footpaths were constructed and that it was in 1983 that the area was sewered. She also gave evidence confirming that Lots 46, 47 and 48, being the allotments opposite her land, had been sub-divided and that there are now eight houses constructed on those separate allotments. Although accepting that there had been changes in the "neighbourhood" since 1953 she denied that such changes had been substantial either in the area of the subdivision or the "neighbourhood". She and her husband, Keith Roper, were each strong in their opposition to the present application to modify the restrictive covenant so as to permit 10 dwellings to be constructed on Lot 38. She said that in the area of the subdivision there were many large blocks with single dwellings on a lot, that the houses were set well back from the street, that the lots were well treed with matured gardens and that there was a spacious surround to each house. She gave evidence that she and her husband had chosen to remain living in the area as they loved the spacious style of living that was available and that there was space for vegetation which included a significant number of mature trees whether they be native trees or otherwise. She further expressed the view that to allow medium density development on one lot, being the concentration of numerous dwellings on one lot, would allow a density of housing far greater than that which was normally in existence in the area "of this particular neighbourhood" which I understood her to refer to the area of the subdivision rather than the larger area of the "neighbourhood". She said that some of the "multi-dwellings" now present in that area were smaller than the cottage which was her family home. She further gave evidence that in 1999 she and her husband refused to sign the written advice provided to them by Swincer to allow the development of Lot 37 by varying the covenant applicable to that land. She denied that she had informed Swincer that although she refused to sign the document that he presented to her she would not oppose his application. I accept her evidence on this matter. Keith Roper also gave evidence in opposition to the present application. His evidence was in substance, that to allow the restrictive covenant affecting Lot 38 to be modified, as now sought by Pivotel, it would set a precedent, that it would make it easier for other restrictive covenants in the area to be varied, that it would increase traffic and the parking of motor vehicles in the area and that it would alter the character of the area by increasing the density of housing in the area. He further said that to modify the present restrictive covenant would allow for the construction of dwellings in the area which did not fit the character of the "neighbourhood". He described the area surrounding Bonnie View Road as characterised by large blocks with well-treed frontages and established gardens. He described the four dwellings recently constructed on Lot 38 as appearing crowded together on the site and being located close to the boundaries. He further said that within the subdivision there were "large blocks" which were affected by a restrictive covenant and which would restrict further development and therefore the reduction of vegetation would be limited. He said he chose to live in his present dwelling because of the large block on which it is situated and the proximity of his land to the Warrien Reserve which he said was a nature reserve which was important to him. He expressed the view that if the restrictive covenant applicable to Lot 38 was modified as sought by Pivotel it would threaten this reserve whereas on allotments which had single dwellings on them, there were canopy trees and vegetation, which, he said, enhanced the reserve.

[51]

As part of Pivotel's case there were called as witnesses a number of persons who were objectors to this application. Each conceded that they had signed a document produced to them by Swincer that they did not object to the discharge or modification of the restrictive covenant affecting Lot 37. This evidence was advanced, as I understand it, to found an argument that when regard is had to the evidence of Swincer that he informed each person that the worst case scenario with respect to Lot 37 could be the development of the same for nine dwellings, that their opposition to the present application is inconsistent to their attitude when not raising objection to a contemplated application by Swincer for the variation or modification of the restrictive covenant affecting his land. One such witness was Horst Zitlaff, who resides in one of the nine units erected on Lot 41. He said that when he signed the document for Swincer, there was to be three units built on Lot 37. He gave further evidence that he did not object to the present proposed development, however, he expressed concern that if Lot 38 was developed as sought by Pivotel it may put pressure on facilities available to the area. A further witness in this category was Jacqueline O'Dwyer who resides with her husband on the northern sub-divided allotment of Lot 20. She said that since commencing to live in the area in 1991 there had been a lot of development in the area. She said she and her husband signed a document provided to them by Swincer. She said she could not recall how many dwellings were to be erected on Lot 37. She gave evidence that she and her husband had previously lived in Prahran but they did not want cluster-type living and that they wanted to raise their family in an area of larger blocks and that they did not want tight living spaces such as they had while living in Prahran. Ruth Harris, also an objector but called as a witness on behalf of the applicant, gave evidence that she resides at 10 Bonnie View Road. The land on which her house is situated forms part of Lot 52 which had previously been sub-divided into two allotments as previously referred to. She commenced living in the area in 1968. Her property is situated opposite Lot 38. She said she signed the document presented to her by Swincer and that she had been given the impression by Swincer that he was going to build three units on his land. She said that at that time Swincer had been working with them to keep the number of buildings down. She gave further evidence that "when she moved into the area, over 30 years ago, it was beautiful, it was like country, it was a reasonably quiet street". She further said, "that the road wasn't made then, that there were not the amount of buildings there then and that it suited them". She said, "It was country enough and yet you had Croydon which is a mile away to do your shopping".

[52]

A further objector called as a witness on behalf of the applicant was Barbara Jay. She resides in one of the five dwellings erected on Lot 39. She gave evidence that she signed the document produced to her by Swincer. She said that Swincer told her that he hoped to develop his land with a development of three, three bedroom units in addition to the house. She said that over the last five years there had been a dramatic change in the area, that there were so many units all round that it was hardly recognisable. She said that she had moved into the area because it was leafy and a "beautiful area". Notwithstanding that she lived in a unit in a five dwelling development, she said she opposed the application of Pivotel in these proceedings. A further objector called as a witness on behalf of the applicant was Kathryn Hole who resides at 26 Bonnie View Road which is one of the houses built on the land which has been now sub-divided and was previously Lots 47 and 48. She gave evidence that she signed the document produced to her by Swincer. In cross-examination she said that she and her husband were led to believe that a maximum of four dwellings were to be built on Swincer's property. She said that she and her husband moved into the area because they like the large "treed" aspect of the blocks and that it was beautiful, green and quiet. Jennifer McCain, a further objector who was called as a witness on behalf of the applicant gave evidence that she signed the document produced to her by Swincer. She said that Swincer was suggesting that four units or houses would be built on Lot 37. The property owned and occupied by her comprises part of Lot 32 on the Plan of Subdivision. As previously referred to, this land has the benefit of the restrictive covenant affecting Lot 38 but is not burdened by a restriction. She said she and her husband commenced living there some 19 years ago. She said that it was a suburban area but had the advantage of being bush like in character and that there was a fair distance between houses. She said that she had not objected to the covenant affecting Lot 20 being varied because that only involved two dwellings. She agreed that there had been a considerable change "behind" them which I took to mean to the north of the property occupied by her. She said that her concern was that if further change occurred it would decrease the number of trees in the area and the wildlife they presently enjoyed.

[56]

It was submitted on behalf of the applicant that when regard was had to the fact that of the 52 allotments comprising the original allotments in the subdivision only 31 allotments (including Lot 38) were burdened with a "single dwelling" restriction and the remainder were not so restricted, it was not the purpose of the original subdivider nor was it his intent to form a uniform subdivision. It was submitted that other than concluding that it was the purpose of the subdivider to impose a "single dwelling" restrictive covenant on a limited number of allotments within the subdivision, no other purpose on the part of the original subdivider could be discerned. It was submitted that where such a restriction as that imposed on Lot 38 was not imposed on some 21 allotments, as time progressed it was destined that there would be development within the subdivision beyond single dwellings on those allotments. It was submitted that in such circumstances where that had occurred and where there had also been substantial changes in the character of the neighbourhood since 1921, during which period the character of the "neighbourhood" has changed from that of an undeveloped area to a "suburbanised neighbourhood", including the development of medium density housing on a number of allotments, it should be concluded that the subject restrictive covenant is now obsolete. On behalf of the objectors it was submitted that when regard is had to the construction of the covenant and the inevitable consequences of its imposition it should be concluded as best as it can that the purpose of the covenant was to achieve not single dwelling development on Lot 38 and other allotments in the subdivision to which a similar covenant applied but rather it should be concluded that the purpose of the covenant was to achieve low density housing on those allotments. It was further submitted that the purpose of the covenant was to achieve a semi-rural or treed "neighbourhood" and to achieve low impact on infrastructure such as roads, sewerage, et cetera.

[58]

When regard is had to the structure of the subdivision and the fact that of the 52 allotments within it, 20 allotments had the benefit of the covenant without the burden of restriction covenant and 15 allotments had the benefit of the covenant but had the burden of a covenant of a similar nature to that initially affecting Lot 38 and 16 allotments were without the benefit of the covenant but had the burden of a covenant of a similar nature and one allotment had neither the benefit of the restrictive covenant affecting lot 38 nor the burden of a restriction, it should be concluded and I do conclude, that in subdividing the land the subject of the subdivision, the subdivider did not have the purpose or intent of having the land developed in a uniform manner. As best as it is able to be concluded at this point of time, I have reached the conclusion that the purpose of imposing "one dwelling only" restrictive covenants on some 31 allotments in the subdivision including Lot 38 was to confine the use of those allotments to residential purposes and to strictly limit and control the number of dwellings that may be erected on each allotment in order to provide a spacious living environment when compared to the development that may otherwise occur on other allotments. Accordingly, as best as can be ascertained it is my view that such was the purpose for imposing the restriction on Lot 38. The fact that changes have occurred in the character of the "neighbourhood" including that within the area comprising the subdivided land since 1921 to the present, does not lead me to conclude that this purpose can no longer be achieved. That purpose is still able to be served thereby providing within the subdivision, housing development of a varied and mixed character. The fact that by the Order of the Master made on 7 October 1987 the restrictive covenant affecting Lot 38 was modified to a "not more than four dwelling houses on the subdivided lot" did not bring about a change in the character of Lot 38 nor did it constitute a material circumstance which results in the original purpose of the imposition of the restriction with respect to that allotment no longer being able to be served. This is so because of the size of the allotment. The modification of the restrictive covenant affecting Lot 38 at that time was a modification made, in my view, which was consistent with the original purpose of the imposition of the restriction. Accordingly, the conclusion I have reached when considering the first limb of paragraph (a) of s.84(1) of the Act is that it ought not to be deemed that the restrictive covenant affecting Lot 38 has become obsolete because I consider that the original purpose for imposing the restriction on that lot can still be served.

[59]

On behalf of the applicant, reliance was also placed on the second limb of paragraph (a) of s.84(1) of the Act. As I understand the argument advanced on behalf of the applicant with respect to this matter, it is that it was reasonable for Lot 38 to be developed as a whole with ten dwelling houses or units on it and that the continued existence of the restrictive covenant as modified by Order of the Court on 7 October 1987 impedes the reasonable user of the land. There is exhibited to the affidavit of Biasci sworn 25 November 1999 that which he describes as a copy of a plan of subdivision "Stage 1". That plan, dated 8 July 1998, shows the eastern section of the allotment being subdivided into four separate lots with the western section not appearing to be subdivided in itself. That latter section is marked "S2, 1776m2." Although on 12 February 1995, the Maroondah City Council issued a permit for the use and development of Lot 38 for the purpose of seven "multi dwelling units" that permit was overtaken by the permit issued on 29 October 1997 in accordance with the determination of the Administrative Appeals Tribunal for the use and development of the land for the purpose of ten multi dwelling units and also the plan of subdivision issued on 16 December 1997 for Lot 38 to be developed with a ten lot subdivision. Although the evidence is not precise as to where the four dwelling houses, now erected on the eastern portion of Lot 38 are situated, it appeared not to be an issue in dispute that those four dwelling houses had been erected on the four most easterly lots of the plan providing for a ten lot subdivision of Lot 38. It was in substance submitted on behalf of the applicant that in circumstances where a permit had issued for the use and development of Lot 38 for ten multi-dwelling units, and a plan of subdivision had been issued for a ten lot subdivision, that the continued existence of the restrictive covenant affecting Lot 38 impedes the reasonable user of the land without securing practical benefits to other persons. In substance it was submitted that the reasonable user of Lot 38 was for its development by erection thereon of 10 multi-dwelling units including the development of the western portion of the land and the impediment to that user as brought about by the restrictive covenant as affecting Lot 38 did not secure practical benefits to other persons and in particular those who had the benefit of the restrictive covenant.

[64]

Each of the objectors Ruth Harris, Astrida Roper and Keith Roper as owners of land, as previously described, enjoy the benefit of the restrictive covenant affecting Lot 38 even though the area in which they each reside has developed and changed over the years since they commenced to live in their respective properties in Bonnie View Road. The benefit of the restrictive covenant which they enjoy limits the development of Lot 38 to no more than four dwellings. Even though other properties in Bonnie View Road which are not burdened with a restriction covenant have been developed and may be developed in the future to permit them to be used for the purpose of that which may be described as medium density housing, the real benefit enjoyed by those persons is that while no more than four dwellings may be erected on Lot 38 there is preserved to some extent the character and amenities of the area in which they have lived and have chosen to live for many years. That area is an area where single dwellings erected on separate allotments of land have not been overborne by what is described as medium density housing on allotments which are large allotments and which were formerly occupied by one dwelling. When Lots 46, 47 and 48 were subdivided they were subdivided into eight separate allotments on which separate dwellings are erected. Lot 45 was subdivided into three allotments and each of Lots 51 and 52 have been subdivided into two allotments on which dwelling houses are erected. The development of those allotments for housing as has taken place can be seen to be a development of a similar kind to that which Lot 38 is able to be developed while the present restriction remains not modified, that is limiting the erection of dwellings to four dwellings on that land. The practical benefit which these persons, in particular, have in consequence of having the benefit of the restrictive covenant which affects Lot 38 is, at least to some degree, to be able to limit the amount and density of dwellings that may be erected on this allotment which has its frontage to Bonnie View Road. The right of these persons in particular to limit the extent of development of lot 38 to four dwellings only, is in my view, a real benefit to them. That benefit is that while the restriction remains in its present form, persons who have its benefit are able to keep in balance the density of housing development in Bonnie View Road and to that extent maintain its environment as an area which is one generally of low density housing with established trees and gardens. To deprive such persons of that benefit even with respect to Lot 38, by discharging or modifying the restrictive covenant affecting that allotment in the manner sought by the applicant so as to permit ten dwellings to be erected on that lot would be to deprive them of a practical benefit.

[67]

Evidence shows that in respect of each of Lots 1, 2, 3, 10, 13 and 14 that they are used wholly or in part for non-residential uses. Lot 1 has erected on it part of a multi-storeyed motor inn which extends further to the north-east along Maroondah Highway. Lot 2 has erected on it a dwelling and part of the multi-storeyed motor inn. Lot 3 has erected on it a building used for retail sales purposes. Lot 10 has erected on it a dwelling and a building used for retail sales purposes and the building on Lots 13 and 14 is used as a reception centre. Each of the last referred to allotments face generally south and have their frontage to Maroondah Highway. It was submitted that for those allotments to be used for purposes other than for the erection of a dwelling it constituted a breach of the restrictive covenant which prevents the erection of more than one dwelling house on such allotments. This was contested on behalf of the objectors. However, assuming for the purpose of the argument that the covenant affecting such latter allotments which prevented erection thereon of more than one dwelling house was breached by other constructions erected on such properties and the use to which they are in part or fully put and assuming that the persons entitled to the benefit of the covenants which affect each of those allotments are those entitled to the benefit of the covenant affecting Lot 38, in my view it cannot be concluded that by such persons permitting such breaches to occur or acquiescing in the continuance of such breaches that by implication they have agreed to the covenant affecting Lot 38 being discharged or modified as sought by this application. Such persons may well tolerate non-residential uses of allotments facing on to the divided highway, Maroondah Highway, without in any way affecting their objection to the present application. By permitting or acquiescing in such breaches it could not in my view be properly concluded that they have by implication agreed to the restriction affecting Lot 38 being modified. Lot 38 is in the heart of the subdivision. This is not a case in which by tacit or express agreement an area formerly a residential area by reason of the imposition of restrictions has been altered in its character and nature substantially to become a commercial area, from which it may be implied that persons with the benefit of the restriction have agreed to it being discharged or modified.

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Judgment (73 paragraphs)

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