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

14. The land so subdivided had as its boundary on its southern side, that which forms part of the Maroondah Highway. On its northern side in its eastern section, its boundary comprised Meadow Road and its western section its boundary was the general alignment of that road. In its north-south axis the land so subdivided was divided in its northern section by Bonnie View Road and in its southern section by that which was originally known as Hampton Road but which is now also known as Bonnie View Road. On its east-west axis the land so subdivided was divided by the road known as Zealandia Road.

17. The subject land (Lot 38) is situated in the northern portion of the subdivision on the western side of Bonnie View Road with its frontage to Bonnie View Road.

20. Set out hereunder is a drawing of the land as subdivided as taken from a certified reproduction of the plan of subdivision.

23. After the plan of subdivision was lodged and registered in the Office of Titles, Edward Vernon Jones sold and transferred a number of allotments out of the parent title which were allotments 1, 4, 13-17 (both inclusive), 21, 22, 26, 28, 29, 34, 49 and 50, some 15 allotments in all. It was common ground that each of those allotments did not have the benefit of the restrictive covenant which affects Lot 38, the land the subject of these proceedings but with the exception of Lot 34, each other of those allotments was burdened by a restriction of a similar nature to that which initially affected Lot 38.

26. On 6 September 1921, Edward Vernon Jones, by Instrument of Transfer registered in the Office of Titles in dealing No. 1013193, sold and transferred Lots 37 and 38 on the plan of subdivision No. 768321 to Alice McGill. She became the registered proprietor of each of those allotments on the plan of subdivision in Certificate of Title Volume 4489 Folio 655. On 24 February 1955, Certificate of Title Volume 8076 Folio 005 was issued in respect of the land comprising Lot 37. On 16 June 1954 Certificate of Title Volume 8048 Folio 671 issued in respect of the land comprising Lot 38 which is the land the particular subject of these proceedings.

29. The Instrument of Transfer No. 1013193 by which Lots 37 and 38 were transferred by Edward Vernon Jones to Alice McGill on 21 September 1921 contained a covenant which as relevant provided -

"AND the said Alice McGill doth hereby for herself her heirs executors administrators and transferees registered proprietor or proprietors for the time being of the land hereby transferred covenant with the said Edward Vernon Jones his heirs executors administrators and transferees registered proprietor or proprietors for the time being of the balance of the land now comprised in the said Certificate of Title that she the said Alice McGill her heirs executors administrators or transferees will not erect or cause to be erected on either of the said lots hereby transferred more than one dwelling house AND it is hereby requested that this encumbrance be noted on and appear on every future Certificate of Title for the said land or any part thereof as an encumbrance affecting the same."

33. There is noted on the Certificate of Title Volume 8048 Folio 671 the covenant contained in the Instrument of Transfer No. 1013193.

36. It was common ground that in consequence of subsequent transfers, Lots 2, 3, 5-8, 10-12, 18, 20, 23-25 and 31, which have the benefit of the restrictive covenant affecting Lot 38 were each burdened with a restriction of similar nature to that which initially affected Lots 38. Further, it was common ground that as to the remaining allotments in the sub-division which had the benefit of restrictive covenant which affects Lot 38, they were not burdened with a restriction. Those allotments are Lots 9, 19, 27, 30, 32, 33, 35, 36, 39-48, 51 and 52.

39. As appears from the plan of subdivision, Lot 38 has a frontage to Bonnie View Road of 30.48 metres and it has a depth to the west of 104.17 metres. The area of Lot 38 comprises approximately 3,175m2. All of the allotments in the subdivision are large allotments. Their dimensions can be observed from the plan. In general, as can be observed from the plan of subdivision the larger allotments on the plan are in the northern section of the subdivision.

42. As is to be observed from the plan of subdivision, Lot 37 is situated to the immediate south of Lot 38. To the north of Lot 38 and on the western side of Bonnie View Road the lots in the subdivision are Lots 39 - 45. Each has the benefit of the covenant affecting Lot 38 but is not burdened by a restrictive covenant. Lot 39 which is to the immediate north of Lot 38 has been developed and on that land there is erected five unit dwelling houses.

45. The next allotment to the north, Lot 40, has been subdivided into two allotments. The westernmost allotment of that subdivision and a walkway running from Bonnie View Road to the western allotment, is land which is owned by the City of Maroondah. The walkway and this land, which is not developed, provides access to a natural reserve comprising some 6 hectares and which abuts on is eastern side the western side of Lots 34, 35, 36, 37, 38, 39 and 40. On the eastern allotment of the subdivision of Lot 40 a dwelling house is erected.

48. To the immediate north of Lot 40 on the plan of subdivision there is situated Lot 41. This land has been developed and there is erected on the same two houses and seven units comprising nine dwellings in all.

51. To the north of the last referred to allotment there is situated Lots 43 and 44. A dwelling house is erected on each allotment. Lot 43 is owned and occupied by Mr Keith Roper and Mrs Astrida Roper. They are each objectors to the present application by Pivotel. Lot 44 is owned by Astrida Roper. The dwelling on that allotment was her family home in which she commenced living in 1953. Since that time she has lived in the house on Lot 44 or Lot 43, the latter of which is now her family home. The northern most lot on the western side of Bonnie View Road, Lot 45, has been the subject of development and it has been subdivided into three allotments. A dwelling house is erected on the eastern most lot of that subdivision. Its frontage is to Bonnie View Road.

54. To the immediate south of Lot 38, is Lot 37 which at present has a single dwelling house erected on it. It is owned by one Swincer and his wife. In the year 1999, Swincer undertook preliminary steps, in contemplation of selling his house, to have the restrictive covenant applicable to his land discharged or modified. He approached the owners of land within the subdivision and obtained a considerable number of written advices from such people that they would not object to an application made by him to discharge or modify the restrictive covenant affecting his land. He gave evidence that when he approached each such person he informed the person at the time that they signed such written advices that the worst case scenario that they would face if the restrictive covenant applicable to his land was discharged or modified was that nine dwelling houses could be erected on the land. This evidence was disputed by a number of persons who were called as witnesses on the trial and who had signed and provided to Swincer such written advices. To this evidence I shall later return.

57. The next two allotments south of Lot 37 are Lots 36 and 35. Each has a frontage to Bonnie View Road and each one is approximately the same size as Lot 38. Both Lots, 35 and 36 have been purchased by Pivotel. They are not burdened by a restrictive covenant but have the benefit of the restrictive covenant affecting Lot 38. The land comprising these allotments has been completely cleared of any structure and all vegetation. These two allotments stand bare and vacant. At present the land is the subject of an application for the issue of a permit to use and develop that land for the purpose of constructing 16 unit dwellings on the same.

60. On the eastern side of Bonnie View Road, within the subdivision and commencing at the north, Lots 46, 47 and 48 which have the benefit of the restrictive covenant affecting Lot 38 but are not burdened by a restrictive covenant, have been subdivided into a total of eight allotments on which dwelling houses are erected. Lots 49 and 50 are allotments without the benefit of restrictive covenant affecting Lot 38 but are burdened with a restrictive covenant. Each has a single dwelling house erected on it. The next two allotments to the south, Lots 51 and 52 each have the benefit of the restrictive covenant affecting Lot 38 but are without burden of a restrictive covenant. Each has been subdivided into two allotments and a dwelling house is erected on each of those four allotments.

63. I turn next to the allotments on the southern portion of the subdivision which portion along its east-west axis is divided by Zealandia Road and at its southern boundary there is situated the Maroondah Highway. Of the allotments on the northern side of Zealandia Road, Lots 27 and 30, which have the benefit of the covenant affecting Lot 38 but do not have the burden of a restrictive covenant, have each been subdivided and developed, there being three dwellings erected on Lot 27 and four dwellings erected on Lot 30. Lot 32 which similarly has the benefit of the covenant affecting Lot 38 but is not burdened with a restrictive covenant has been subdivided and developed and there are three dwellings now erected on that allotment of the plan of subdivision.

66. Of the allotments on the southern side of Zealandia Road, Lot 20 which has the benefit of the covenant affecting Lot 38 but which was burdened with a similar restriction to that initially affecting Lot 38 has been the subject of an Order made by a Master of the Court on 19 December 1985 varying the covenant to a "not more than two dwelling" restriction. That which is Lot 20 has been subdivided and a dwelling house is erected on each of the northern and southern parts of that allotment. Lot 21 has also been subdivided and has a dwelling house erected on the northern and southern portion of that allotment.

69. Of the allotments within the subdivision which have as their frontage Maroondah Highway, Lot 8 which has the benefit of the restrictive covenant affecting Lot 38 and which was burdened by a restriction of a similar nature to that which initially affected Lot 38 has been the subject of an Order made by a Master of the Court on 22 May 1980 wherein the covenant was varied to a "not more than two dwelling" restriction. The allotment has been subdivided and there is a dwelling house erected on each of the allotments of the subdivision, one of which has a frontage to Maroondah Highway and the other has a frontage to the southern portion of Bonnie View Road.

72. I now turn to the recent history of Lot 38 and its present state of development. On 7 October 1986, James Bone Pty Ltd, the then registered proprietor of Lot 38, made application to this Court for the discharge or modification of the restrictive covenant affecting that land. The application was for an order to modify the restrictive covenant so as to permit four dwellings to be erected on the land. That application was not objected to and on 7 October 1987 a Master of the Court ordered that the restrictive covenant affecting Lot 38 be modified by substituting for the words, "on either of the said lots hereby transferred", the words, "on Lot 37" and by adding after the words "one dwelling house", the words "and on Lot 38 not more than four dwelling houses and in the event that it is subdivided not more than one dwelling house on any one lot in the subdivision and not more than a total of four dwelling houses on the subdivided lot".

75. On 12 December 1995, the Maroondah City Council issued permit, No. 95/183 permitting the use and development of Lot 38 for seven multi-dwelling units (including the existing house). Thereafter, application was made to the Maroondah City Council for a permit to use and develop Lot 38 for the purpose of constructing 11 units. On 18 June 1997, the Maroondah City Council refused that application. On 18 August 1997, a further application was made to the council for a permit to use and develop the land for the purpose of constructing 10 units on the land. On 20 October 1997, the Maroondah City Council refused the application for a permit to use and develop Lot 38 for the purpose of constructing 10 units. An appeal was instituted to the Administrative Appeals Tribunal against the council's refusal to issue a permit to use and develop Lot 38 for 11 units. In the process of that appeal the application was replaced by an application for a permit to use and develop Lot 38 for the purpose of constructing 10 units. On 3 November 1997, the Administrative Appeals Tribunal determined that the appeal be allowed and it directed that a permit issue for the use and development of Lot 38 for the purpose of constructing 10 units. Such permit was issued by the Maroondah City Council on 7 November 1997. Further, on 16 December 1997 a further permit was issued by the Maroondah City Council which permitted Lot 38 to be developed with a 10 lot subdivision in accordance with the endorsed plans. Subsequent to the issue of those permits four brick units have been erected on Lot 38. Those units have been erected on the eastern end of that allotment, two on each side, with a concrete drive dividing the same. The remainder of Lot 38 remains not developed at this time.

78. Section 84(1) of the Property Law Act 1958 as is relevant provides -

"(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 by compensation to any person suffering loss in consequence of the order) upon being satisfied - (a) by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the court deems material the restriction ought to be deemed obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless so modified impede such user; or (b) that persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction whether in respect of estates in fee simple or any lesser estates or interests in the property to which the benefit of the restriction is annexed have agreed either expressly or by implication by their acts or omissions to the same being discharged or modified; or (c) that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction."

82. In these proceedings Pivotel relies on each of paragraphs (a), (b) and (c) of s 84(1) of the Act, in seeking to have the restriction affecting Lot 38 discharged or modified in such manner as to permit ten dwelling houses to be erected on that allotment.

85. In Re Alexandra [1980] VicRp 7; [1980] VR 55 Menhennitt, J held that paragraph (a) of s.84(1) of the Act contained two independent limbs, the first relating to facts which ought to lead to the conclusion that the covenant should be deemed obsolete whereas the second limb concerns circumstances which are dependent on it being established that the continued existence of the restrictive covenant, "would impede the reasonable user of the land without securing practical benefits to other persons". In such a case as the present it is for the applicant to satisfy the court of the existence of the conditions set out in paragraphs (a), (b) and (c) of s 84(1) of the Act insofar as any or all of such paragraphs are relied on to give rise to a discretion in the court to order that the relevant restriction be discharged or modified. - Re Anton Stani (Full Court SC Vic, unreported, delivered 7 December 1976).

88. In Re Miscamble's Application [1966] VicRp 81; [1966] VR 596 McInerney AJ held that when considering the application of paragraph (a) of s.84(1) of the Act and whether there had been changes in the character of the relevant "neighbourhood" the relevant time to determine what constitutes "the neighbourhood" for the purpose of determining whether changes in its character had occurred such as it should be deemed that the restriction is obsolete, is the date of the hearing of the application for the discharge or modification of the restrictive covenant.

91. As part of its case, Pivotel contended that there had been such changes in the character of the "neighbourhood", in which Lot 38 was situated, that it ought to be deemed that the restriction was now obsolete. On behalf of Pivotel, Andrew Biacsi, a town planner, gave evidence in which he identified that which he said constituted the "neighbourhood" in which Lot 38 was situated as that area in Croydon which had its boundaries in the north Exeter Road, to the east and south Maroondah Highway and to the west Warrien Road and Patrick Avenue. A town planner called as a witness on behalf of the objectors, Giovanni Gattini, generally agreed that the area identified by Biacsi as the "neighbourhood" was the area of land comprising the "neighbourhood" in which Lot 38 was situated. In context the area comprising the subdivision of which lot 38 forms part, comprises generally the south-east quadrant of that "neighbourhood".

94. Before turning to the further facts in this case it is appropriate to deal with some further aspects of the law relevant to this case. I deal first with the first limb of s.84(1)(a) of the Property Law Act 1958. In Re Miscamble's Application McInerney AJ at p.601 accepted that for a restrictive covenant to be deemed "obsolete" it is necessary that it be established that the original purpose of the covenant is no longer capable of being fulfilled. In doing so he referred to Re Truman, Hanbury & Co Ltd's Application [1956] 1 QB 261 at p.272. After discussing the purpose of the covenant with which he was concerned he said at p.601-

"The enquiry must ... be whether there have been changes in the character of the neighbour and whether those changes lead to the conclusion that it is no longer possible to achieve the purpose of the covenant. ... "

98. In Re Markin [1966] VicRp 69; [1966] VR 494 Gillard J at p.496 said -

"Looking then at the requirements specified in s.84(1)(a) of the Property Law Act 1958, the applicants must prove that the original purpose in imposing the covenant can no longer be achieved because of changes in the character of the property or the neighbourhood: see Re Truman, Handbury, Buxton and Co Ltd's Application; Driscoll v Church Commissioners for England [1957] 1 WB 330; [1956] 3 All ER 802; Re Mason and The Conveyancing Act (1960), 78 WN(NSW) 925. Now it is no light task to sustain this burden. In many cases, the real purpose is not easily discovered and, accordingly it is difficult to discover whether the restriction has become obsolete".

102. In Re Robinson [1972] VicRp 28; [1972] VR 278 Adam J at p.281 said -

" ... I have to be satisfied on the first limb of paragraph (a) that 'by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Court deems material the restriction ought to be deemed obsolete. It appears to me the critical words in that limb of the section are the words 'shall be deemed to be obsolete'. What does 'obsolete' mean? When is a restrictive covenant properly to be deemed 'obsolete'? This has by authority been stated to arise when the object of the restrictive covenant can, by reason of changes that have occurred, be no longer achieved or fulfilled. In other words through changes that have occurred the restrictive covenant has become futile or useless."

His Honour after citing Re Truman, Handbury and Buxton Co Limited and Driscoll v Church Commissioners for England further said at p.282 -

"It appears from that, that if the restrictive covenant continues to have any value for the persons entitled to the benefit of it then it can very rarely, if at all be deemed obsolete. One really enquires into the purpose of the restrictive covenant."

108. Turning to the second limb of paragraph (a) of s.84(1) of the Act, in Re Alexandra Menhennitt, J held that to establish that the continued existence of a restrictive covenant "would impede the reasonable user of the land" it must be shown that the covenant, to a real and sensible degree, hinders the reasonable use of the land having regard to its situation, the surrounding property and the purpose of the covenant. At p.58 after referring to Re Anton Stani his Honour said -

"It appears to me that as to the issue whether the continued existence of the restrictive covenant would impede the reasonable user of the land, the Full Court has adopted and applied the concepts applicable thereto stated by Lord Evershed, M.R. in Re Ghey and Galton's Application [1957] 2 QB 650, especially at 663; [1957] 3 All ER 164 at p.171 where Lord Evershed, M.R. said: 'But I think it must be shown in order to satisfy this requirement that the continuance of the unmodified covenants, hinders, to a real, sensible degree, the land being reasonably used, having due regard to the situation it occupies, to the surrounding property, and to the purpose of the covenant'."

After considering a further part of the judgment of the Full Court in Re Anton Stani, Menhennitt, J. at p.58 further said -

"In that passage, in my respectful view, the Full Court was adopting the whole of the considerations stated by Lord Evershed as to the meaning of 'impeding the reasonable user of the land' and the passage I have quoted from the Full Court judgment makes it manifest that that is essentially a question of fact."

114. Further, in Re Alexandra Menhennitt, J. held, that for it to be established that the continued existence of a restrictive covenant would not secure practical benefits to others, there must be some proper evidence that the restriction is no longer necessary for any reasonable purpose of the person who is enjoying the benefit of it. As stated by his Honour at p.59 this is essentially a question of fact.

"The test of practical benefit, it seems clear enough, is not merely whether if the covenant is modified or discharged there would be any depreciation in the sale value of land benefited by it. The notion of practical benefit goes much further than that. ... It [is] clear that if there is some real benefit to the person entitled to the restrictive covenant, then to deprive him of it is to deprive him of some practical benefit. And the right of a person to have preserved amenities for what he reasonably considers to be amenities for his projects is a right, the deprivation of which deprives him of a practical benefit."

121. As to the provisions of paragraph (c) of s.84(1) of the Act, in order to establish that the proposed discharge or modification will not "substantially injure" the persons entitled to the benefit of the restriction, the test to be applied is similar to that to be applied under paragraph (a) when determining whether the continued existence of the restriction would secure practical benefit to other persons - Re Robinson at p.284, Re Anton Stani at p.10 and Re Alexandra at p.60.

124. In an affidavit sworn by Biasci on 12 August 1999, he addressed the matter as to whether there have been changes in the "neighbourhood" in which Lot 38 is situate, since 1921, the year in which the restriction was imposed on the land, to the present time. He was unable to describe what was the character or composition of the "neighbourhood" in 1921. In a later affidavit sworn by Gattini he has deposed as to what he considered would have been the composition or character of the "neighbourhood" at that time. However, he produced no primary source document or material on which his view may have been based.

127. 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.

130. There was also tendered a further aerial photograph taken in 1991. Biasci gave evidence that by reference to that photograph it could be seen that the area within the "neighbourhood" had reached a mature suburban state and that there was a mix of conventional unit development with single lot housing and further there was to be seen smaller lot subdivisions. The final aerial photograph of the area was that taken in 1995. By reference to this photograph Biasci gave evidence that it showed that development was generally consistent with a conventional style of residential development with a mixture of unit development and single detached housing. He observed that the photograph depicted the unit development to the immediate north of Lot 38. He also observed that by this time there was to be seen in Bonnie View Road that "chicanes" had been constructed. He expressed the view that this would have been done because the roadway had come under traffic pressure and the construction of the "chicanes" would slow down the progress of traffic. Gattini gave evidence that by 1995 the "neighbourhood" had substantially developed and that by then it was an established "neighbourhood" with houses and other related services.

133. 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.

136. 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".

139. 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.

142. I return to the evidence of Swincer earlier referred to, that when he obtained the signatures of persons within the subdivision to the document that advised that they did not oppose a modification to the restrictive covenant affecting Lot 37, he told each of these that the worst case scenario would be that nine dwellings could be built on that land. I do not accept that evidence. The evidence of a number of objectors called as witnesses on behalf of the applicant directly contradicts the evidence of Swincer on that matter. These were people who objected to the present application which if acceded to would permit 10 dwellings to be erected on Lot 38. It is unlikely in my view that only last year people who now object to the modification of the restrictive covenant relevant to Lot 38 were informed that the worst case scenario in respect of Lot 37 could see nine dwelling houses erected on that allotment and that at that time they did not raise objection to it. I prefer the evidence of the witnesses in particular being Barbara Jay, Kathryn Hole and Ruth Harris on the matter as to what they were told by Swincer as to the likely development and extent of the development on Lot 37. To modify the restrictive covenant applicable to Lot 37 to such extent to which they referred would not have increased the density of housing on that Lot further than that presently permitted by reason of the restrictive covenant applicable to Lot 38. Their non objection to such a development would not be inconsistent with their objection to the present application.

145. I now turn to consider whether on the facts of this case the restrictive covenant as it affects Lot 38 "ought to be deemed obsolete" within the first limb of s. 84(1)(d) of the Act. The starting point when addressing that question is to ascertain, if it is able to be done, the purpose of the restrictive covenant - Re Miscamble's Application, Re Markin and Re Robinson. It is then that the court must consider whether by reason of "changes in the character of the property or the neighbourhood or other circumstances of the case which the court deems material" it ought to be deemed by the court that the restrictive covenant is "obsolete". Although the test as to whether the restrictive covenant ought to be "deemed obsolete is expressed in a slightly different language in each of the cases referred to, in each case reliance was had on the decision of In Re Truman Hanbury Buxton & Co Ltd's Application [1956] 1 QB 261. In that case Romer, LJ at 271-272 said:

"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 were 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 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 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 does 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 s. 84(1)(a)."

149. 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.

152. On the evidence before the court, including that of the town planners Biasci and Gattini, I am satisfied that since 1921 to the present time there has been substantial changes in the character of the "neighbourhood" including changes in the character of the area comprising the subdivision. When regard is had to the nature and character of the "neighbourhood" in 1951 it is likely that the character of such "neighbourhood" in 1921 was undeveloped in nature. From the evidence and particularly the first aerial photograph it is apparent that the character of the "neighbourhood" and area comprising the subdivision was principally undeveloped in 1951. Since that time the character of the "neighbourhood" has changed substantially. Lot 38 is now situated in a "neighbourhood" of a developed suburban character. The "neighbourhood" is serviced by sealed roads and it is provided with facilities forming an integral part of developed suburban living. Within the "neighbourhood" there are interspersed among allotments on which single dwellings are erected, allotments accommodating that which is described as medium density housing. It is this development of the "neighbourhood" over a period exceeding three-quarters of a century that demonstrates changes in the character of the neighbourhood as a whole including that part comprising the area of the subdivision. However, the question is whether such changes in the character of the "neighbourhood" have brought with it such change as it ought to be deemed that the restrictive covenant affecting Lot 38 is now obsolete as its original purpose can no longer be achieved.

155. 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.

158. 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.

161. In exercising the power vested in it pursuant to s.84(1) of the Act, the Court is not concerned with town planning considerations - Re Anton Stani, p.6; Re Robinson at p.285; and Greenwood & Anor v Burrows & Ors (1992) V Conv R, 54,444 at 65,198. Accordingly, the determination of the Administrative Appeals Tribunal relevant to lot 38 and the permits issued thereafter as to the use and development of the land cannot be determinative of the issue whether the restriction now impedes the reasonable user of the land. As referred to by Balmford J in M.A. Zeltoff Pty Ltd and Margaret Barkeley v Stonnington City Council [1998] VSC 270 at p.9 there are a number of different statutory means whereby a restrictive covenant may be varied or removed which are provided for separately in legislation involving the operation of different principles that must be applied without reference from one to another. That which I must have regard to in these proceedings are the provisions of s.8.4(1) of the Act.

164. In order to determine whether the present restriction affecting Lot 38, unless modified. would impede reasonable use of the land, it is appropriate to have regard to the purpose of the covenant - Re Anton Stanley p.10. As previously stated I am of the view that as best as one can ascertain, the purpose of the restrictive covenant affecting Lot 38 and similar covenants affecting some 30 other allotments on the subdivision was to confine the use of these 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 otherwise may occur on other allotments. There is presently able to be built on Lot 38 four dwelling houses in accordance with the modification of the restrictive covenant as effected by Order of the Master on 7 October 1987. In my view when regard is had to the original purpose of the restrictive covenant, and its present form, it does not "hinder to a real, sensible degree the land being reasonably used". This is so when regard is had to the development and use of surrounding properties.

167. Adjoining Lot 38 on the north side is Lot 39. It is not affected by a similar restrictive covenant. It has been developed for the purpose of five dwellings only. The evidence of Gattini was that if the restrictive covenant affecting Lot 38 was modified with the consequence that 10 multi-dwellings could be built on that allotment, the density of housing development on that lot would be higher than all other allotments within the "neighbourhood" with the exception of one allotment on which there is erected 12 dwellings. The fact that part of Lot 38 on which no dwelling house has been erected, as compared to the eastern section thereof, cannot be used for the purpose of erecting a dwelling house while the present restrictive covenant remains in force, in the circumstances that have occurred, cannot be permitted to affect my decision on this matter. They were built at a time when notwithstanding that there was a planning permit authorising the use and development of the land for the purpose of ten dwelling houses, nevertheless by reason of the restrictive covenant affecting Lot 38 no more than four dwellings could be erected on the land. Those who built those four dwelling houses must have done so knowing of the restriction applicable to Lot 38.

170. Even if the restrictive covenant affecting Lot 38 was said to impede a reasonable user of the land, that is not sufficient in itself for the court to exercise its power to discharge or modify the restrictive covenant affecting Lot 38 under the second arm of paragraph (a) of s.84(1) of the Act. It is also necessary for the applicant to show that the covenant does not secure practical benefits to other persons, that is, there must be proper evidence that the restriction is no longer necessary for any reasonable purpose of the persons who are enjoying the benefit of it.

173. 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.

176. On the facts in this case I am satisfied that the applicant has not established by evidence, proper grounds for the court to exercise its power to discharge or modify the restrictive covenant affecting Lot 38 under either limb of paragraph (a) of s.84(1) of the Act.

179. In reliance on s.84(1)(b) it was submitted on behalf of the applicant that by those persons entitled to the benefit of the restrictive covenant affecting Lots 8, 20 and 38, not opposing the modifications affecting those allotments which were made by Orders of this court on 22 May 1980, 19 December 1985 and 7 October 1987 respectively, those persons with the benefit of the restrictive covenant affecting Lot 38 had by implication agreed to the covenant affecting Lot 38 being discharged or modified. It was further submitted that evidence before the court established that the restrictive covenant being a "one dwelling" restriction affecting Lots 1, 2, 3, 10, 13 and 14 had been breached in consequence of each of those allotments being used either solely or in part for non-residential uses. It was argued that such breaches had been tolerated by persons having the benefit of the restrictive covenant affecting lot 38 and that from those facts it ought to be implied that those with the benefit of the restrictive covenant affecting Lot 38 had by implication agreed to the restrictive covenant affecting Lot 38 being discharged or modified.

182. 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.

185. Further, the fact that those with the benefit of the restrictive covenant affecting Lot 38 did not object to the modification to that restriction brought about by Order of the Court on 7 October 1987, and the fact that those with the benefit of the restrictive covenant affecting Lots 8 and 10 did not object to the modification of the restriction affecting such lots, does not constitute an act or omission from which it can be implied that they have agreed to the covenant now affecting Lot 38 being modified or discharged as now sought by this application. The fact that a person with the benefit of the covenant affecting Lot 38 did not object to it being modified to a "four dwelling only" restrictive covenant does not in my view constitute an act or omission on which it can be implied that such person agreed to discharge the covenant entirely or it being modified to the extent as now sought. The modification of the covenant now affecting Lot 38 to a "ten dwelling only" restrictive covenant is materially different to that, the subject of the application and Order made on 7 October 1987 with respect to Lot 38. The matters relied on by the applicant under s.84(1)(b) do not in my view lead to the conclusion that such persons who have the benefit of the covenant affecting Lot 38 have by implication agreed to that restrictive covenant being discharged or modified as now sought by this application.

188. The applicant, as I have previously referred to, also relied on s.84(1)(c) of the Act. On its behalf it was contended that the proposed discharge or modification, "will not substantially injure the persons entitled to the benefit" of the restriction affecting Lot 38. That which the applicant must establish by evidence, to empower the court to discharge or modify the restrictive covenant under paragraph (c) is that the continued existence of the covenant in its present form, for it is that which is being sought to be discharged or modified, does not secure practical benefits for other persons. Each of the objectors, Astrida Roper, Keith Roper and Ruth Harris, are owners of land in close vicinity to Lot 38 and have resided in the area for considerable periods of time. By being beneficiaries of the covenant affecting Lot 38 they have the benefit of a restriction which provides them with practical benefit of the nature to which I have previously referred.

191. In my view to discharge or modify the restrictive covenant affecting Lot 38 as is now sought by Pivotel so as to permit the erection of ten dwellings on that land would deprive those persons of the practical benefit which they enjoy as beneficiaries of the covenant affecting Lot 38 and it would thereby "substantially injure" such persons.

194. The conclusion I have reached is that the applicant, Pivotel, has failed to make out the conditions necessary for it to establish under paragraph (c) of s.84(1) of the Act so as to empower the Court to discharge or modify the restrictive covenant presently affecting Lot 38, as is now sought.

197. For the reasons expressed the application of Pivotel for an order that the restriction imposed by Instrument of Transfer No. 1013193 in the Register Book affecting Lot 38 on Plan of Subdivision No. 7683 lodged in the Office of Titles and being the land described in Certificate of Title Volume 8048 Folio 671, be discharged or modified so as to permit the erection of ten dwellings on that land, fails.

200. The Order of the Court is that the proceedings be dismissed.