Sixty-Fifth Eternity Pty Ltd v Boroondara CC [2009] VCAT 2314

Mr Golvan QC and Mr Adrian J. Finanzio of Counsel instructed by Allan Wainwright J. Ockno & Co

Mr Greg Garde, QC and Mr Henry Jackson of Counsel instructed by Maddocks Lawyers

1. In 2004 I considered a dispute as to the fixation of rental for the premises at 596 Burke Road, Camberwell. In opening that decision I gave a brief description and short history of Camberwell Junction which I take the liberty of quoting:

Burke Road provides a major through-road link between Ivanhoe in the north and Caulfield in the south, across Melbourne's inner-eastern suburbs. It intersects at Camberwell with Riversdale Road which is a major east-west link from Central Melbourne to the inner and middle eastern suburbs. At that point of intersection, Burke Road is also crossed by Camberwell Road, running from the north-west to the south-east across the intersection of Burke Road and Riversdale Road and joining Burwood Road, Hawthorn at the north-west end with Toorak Road, Hartwell at the south-east end. The crossroads created by these three thoroughfares known as Camberwell Junction has been a centre of commerce and transport in this part of Metropolitan Melbourne for well over 100 years and since the earliest days of settlement. The now long gone public house situated at the Junction gave the locality of Camberwell its name. The Junction is a low point with the ground rising to the east along Riversdale Road and to the north and south along Burke Road itself. The Junction is now the centre of a major complex of strip shopping. To the east, between Riversdale Road and Prospect Hill Road (the next intersecting street running to the east from Burke Road and half-way up the hill to the north) some two blocks of 19th and early 20th Century houses have been demolished to create a large open space on which a supermarket (Safeway) and a discount department store (Target) are erected with a large surrounding car park. Shops line both sides of Burke Road from Riversdale Road north to the top of the hill, past Prospect Hill Road and an intersecting rail line which passes below the road. The shops on the eastern side, between Riversdale Road and Prospect Hill Road command the highest rentals because of their proximity to the large car parking facilities and anchor retailers. There are less extensive off-street car parking complexes to the rear of the shops on the western side of Burke Road. The majority of the shops on the east side of Burke Road in the block from the Junction to Prospect Hill Road have rear accesses letting out onto the large car park.

Kurc v Eyecare [2004] VCAT 1139

1. This proceeding concerns premises at 15-25 Station Street, Camberwell on which are erected the Woolworths (formerly Safeway) supermarket and Target discount department store referred to above.
2. Until the Local Government reforms of the 1990s the Camberwell Junction Shopping Centre suffered from divided control. The main shopping strip was and is constituted by Burke Road. The eastern side of Burke Road and areas beyond were controlled by Camberwell City Council whilst the western side of Burke Road and the areas to the west were controlled by Hawthorn City Council. In 1981 as part of the planning strategy for metropolitan Melbourne, Camberwell Junction was designated as one of 15 district centres within which commercial and retail development was to be promoted. These district centres including Camberwell Junction were to be regarded as second only in importance to the Central Activities District, viz. central Melbourne itself. In the 1980s the subject property was owned by National Mutual Life Association Limited, one of the nation's major life offices. National Mutual adopted a plan to redevelop this area and other holdings within the junction shopping precinct as a regional shopping centre with a lettable area of no less than 24,000 sq m. Towards the end of the 1980s this proposal was the subject of bitter opposition by local activists from Camberwell. These activists went the distance of picketing the homes of National Mutual executives.
3. On 16 May 1998 the then City of Camberwell entered into an agreement authorised by Part XLB of the Local Government Act 1958 which provided for the redevelopment of the subject site and a number of other sites surrounding it in the Camberwell Junction precinct with a company known as Camberwell Shopping Centre Pty Ltd which was part of the Podgor Group which had bought the site from National Mutual. The agreement provided for Podgor to construct 20,000 sq m of additional retail space. Parking for 2,230 cars would be provided and two large department stores would be built with the existing Camberwell Market (situated in Riversdale Road) being reconstructed. A clause in the development agreement between Camberwell and Podgor obliged both parties to 'do all necessary and desirable acts, matters and things and ... use their best endeavours' to satisfy the conditions of the agreement 'as soon as possible'.
4. The Council which entered into these arrangements it is reasonable to conclude was 'pro-development'. The following year however, the balance of power on the Council changed and the majority was 'anti-development'. Council purported to withdraw from the arrangement in September 1989 and Podgor commenced proceedings in the Supreme Court seeking a determination that the Council was in breach of the agreement.
5. The hearing was split so that a judge of the Supreme Court determined the issue of liability first. Teague J found in favour of Podgor. The Council appealed to the Full Court of the Supreme Court which dismissed its appeal City of Camberwell v Camberwell Shopping Centre Pty Ltd [1994] VicRp 10; [1994] 1 VR 163.
6. Eventually Podgor and the Council settled the entire proceeding by an arrangement in which Council purchased Podgor's holdings in the Camberwell Junction Shopping Centre from Podgor which by then was under the control of receivers. As a result of that arrangement Camberwell Council became the freehold owner of the present subject site and a number of other adjacent sites.
7. In response to the designation of Camberwell Junction as a District Centre in 1981, and no doubt to some degree also in response to the turmoil surrounding the abortive National Mutual/Podgor redevelopment proposal, the cities of Camberwell and Hawthorn adopted the Camberwell Junction Structure Plan in December 1993. The cover of this plan described it as one that:

Seeks to inject renewed confidence into the junction from an economic and retail point of view, whilst at the same time ensuring that redevelopment occurs in an orderly, proper and sympathetic manner.

1. The introductory section of the plan included the following:

Much of this work has been focussed on the east side of the junction, as the City of Camberwell needed to address the future development of the former 'Podgor' site which the 1992 exhibited structure plan did not deal with due to constraints brought about by the litigation with Camberwell Shopping Centres Pty Ltd at the time.

1. Amongst the strategic principles adopted in the plan is the following:

The distinctive strip shopping character of Camberwell Junction's retail environment must be maintained and enhanced.

• Prohibit the development of major enclosed shopping centres.
• Limit the size and scale of new developments to ensure new retail opportunities are spread over a number of sites within the junction.
• Work with traders to promote and enhance the junction's distinctive retail environment.

1. Another strategic policy was stated as follows:

The surrounding residential areas would be protected from traffic and parking impacts generated by activities in the junction.

• Manage parking demand generated by commercial activity in the junction.
• Provide for through traffic to use the designated main road rather than other streets.
• Discourage the use of Protected Local Streets by non-residential traffic and/or parking.

Although Camberwell Junction still remains popular with a wide variety of residents and customers, and elements within the centre continue to trade well (eg; the Safeway supermarket, which is the busiest Safeway in Victoria), a number of traders are nevertheless experiencing declining trade.

The potential of the junction to increase its retail floor space capacity cannot and should not be achieved through a single large scale retail complex. This has been reflected in the structure plan by a prohibition on the development of any major enclosed shopping centres.

1. The plan commented upon a number of weaknesses including:

A lack of pedestrian amenity in the shopping areas together with poor pedestrian linkages between precincts.

Potential also exists for additional retail floor space on other sides spread throughout the junction, including extension of the Camberwell Market, the Safeway and Target stores (and possible relocation to the rear of the Burke Road strip) and at other locations on the periphery of the centre.

1. The plan identified the subject land as a potential development site. With respect to Station Street (which runs parallel to Burke Road and to the east of it connecting Prospect Hill Road in the north with Riversdale Road in the south) the plan proposed to:

Maintain as open street but enhance pedestrian environment, particularly at southern end.

1. At this point the subject site remained in the ownership of Camberwell City Council. The Safeway supermarket and Target discount department store were located on the block between Station Street to the west and Fairholm Street to the east. Aside from the building footprints of the two stores themselves the balance of this site was occupied by car parking serving the customers of these stores.
2. To the west of Station Street was further open air car parking occupying the land between Station Street and the rear of the shops fronting the eastern side of the Burke Road strip. The car park for the east and west of Station Street served as an integrated whole. There were no barriers on either side of Station Street so shoppers could pass freely at any point from the car park on the east of Station Street to the car park on the west of Station Street or vice versa. Both car parks were in Council ownership.
3. Toward the southern end of Station Street and abutting its boundary is a multi-storey red brick electricity sub-station erected by the Melbourne and Metropolitan Tramways Board (at that time the operator of Melbourne's metropolitan electric tram service) in 1924. Following institutional rearrangements of the ownership and operation of Melbourne's public transport by the 1980s the ownership of this sub-station, which was effectively an island in the car park to the west of Station Street, was vested in the Public Transport Corporation. As early as 1986 and in support of the National Mutual redevelopment proposal, Camberwell City Council began investigating the purchase and relocation of the substation from the then Metropolitan Transit Authority. The plan was to relocate the sub-station to Council land at 557 Riversdale Road, that is further south and across Riversdale Road. Later a triangular site at the intersection of Butler Street and Riversdale Road, also owned by Camberwell City Council was identified as the preferred site for relocation.
4. Meanwhile Boroondara City Council as successor to Camberwell City Council contracted to sell the subject site to Fabcot Pty Ltd under a contract of sale dated 27 December 1995. Fabcot Pty Ltd was a wholly owned subsidiary of Woolworths Limited, the owner of the Safeway supermarket chain. The contract provided for a total purchase price of $12,425,000. Special Condition 11 entailed an agreement by Fabcot to enter into an agreement under Section 173 of the Planning and Environment Act 1987 in the form annexed to the contract. The special condition allowed for variations to that form, inter alia:

By incorporating any amendments which become necessary and to which the vendor [that is Boroondara City Council] has consented.

1. The draft agreement under Section 173 and the contract of sale itself provided for Fabcot to redevelop the subject land on a staged basis entailing inter alia, the demolition and reconstruction of the supermarket and the redevelopment of the discount department store.
2. Fabcot was obliged to do everything necessary to enable the agreement to be recorded under the Transfer of Land Act 1958 as an encumbrance to the site. The draft agreement was expressed to be made between the Council and Fabcot defined as 'the owner'. Clause 1.9 defined owner as follows:

'owner' means the person or persons entitled from time to time to be registered by the Registrar of Titles as proprietor or proprietors of an estate in fee simple in the subject land or any part of it.

7.7 not [to] develop and/or use the subject land at any time for any purpose other than as a supermarket with a maximum of 4,740 sq m gross lettable floor area and a discount department store with a maximum of 7,250 sq m gross lettable floor area;

Not [to] seek or support any change in the zoning of the subject land or any land adjoining or in the vicinity of the subject land under the Scheme without the written consent of the Council first had and obtained.

1. The contract of sale proceeded to settlement and the redevelopment was duly completed. One feature of the redevelopment was to construct fences and landscaping barriers along both sides of Station Street such that shoppers wishing to cross from west to east or vice versa were all directed to a central point constituted by a pedestrian crossing. The agreement provided for Fabcot to carry out certain works on the land retained by Council on the western side of Station Street including two covered walkways which would link the redevelopment to Burke Road and entail the construction of an architectural tower.
2. As part of the redevelopment arrangements Nascon Australia Pty Ltd acting on behalf of the Woolworths Group lodged a permit application BOR 9941 for the necessary work in January 1996. The permit was granted and included some 40 conditions. The last of those conditions stated:

The development and use of the site will be carried out in accordance with the Section 173 agreement proposed to be entered into between the Boroondara City Council and Fabcot Pty Ltd as required by the contract of sale providing for the sale of the site from the Boroondara City Council to Fabcot Pty Ltd.

1. The only covenant by Council in the version of the Section 173 agreement scheduled to the contract of sale was numbered 9 and stated:

Subject to clause 14.5, the Council covenants that it will deal with all applications for all requisite consents and approvals of the Council in respect of the Stage One Development and the Stage Two Development with due expedition.

1. Clause 14.5 was a standard clause which provided that the agreement does not unlawfully fetter the Council's statutory discretions or powers. The 173 agreement as it had been negotiated when the contract of sale was entered into between the City Council and Fabcot on 27 December 1995 did not contain any covenant relative to the electrical sub-station. In the new year by letter dated 8 February 1996 Minter Ellison acting for Fabcot noted that at a meeting held between representatives of Fabcot and the City Council, council had agreed to 'undertake the demolition and removal of the Public Transport Corporation substation'. This matter was agreed to in a facsimile transmission to Minter Ellison by Maddock Lonie and Chisholm on behalf of the council and dated 12 February 1996. Accordingly the Section 123 agreement as executed on 5 March that year was as follows under the heading 'Covenants of Council':
   1. The Council covenants and agrees that it will:

9.1 Subject to Clause 14.5, deal with all applications for all requisite consents and approvals of the Council in respect of the Stage One Development and the Stage Two Development with due expedition;

9.2 Undertake the demolition and removal and relocation of the Public Transport Corporation sub-station and equipment ('the PTC sub-station') situated on the land in Certificate of Title Volume 3343 Folio 402 ('the PTC land'); and

9.3 In the event that the removal and relocation of the PTC sub-station in accordance with the preceding clause is not completed by the Date of Practical Completion of Stage One Development, construct car parking on the PTC land in accordance with Clause 1.9.1.1 of the Development Design Guidelines. Such car parking shall be constructed following completion of the works in accordance with the preceding clause.

1. The cross-reference to Clause 1.9.1.1 of the Development Design Guidelines appears to be in error that clause not being germain.
2. The supermarket and discount department store development continued according to plan as previously noted. The issue of the removal of the PTC sub-station however did not. Council's records disclose a lengthy period of negotiation between it and the Public Transport Corporation. Council's view was that the PTC was demanding excessively wide indemnities requiring Council, as Council saw it. to accept possible risks relative to design flaws (with the design to be prepared by the PTC), industrial action and the cost of alternative bus services during the period of relocation and recommissioning. In the event Council regarded the position taken by the PTC as unjustified. It wrote to the then Premier, Mr Jeff Kennett, seeking his assistance in having the PTC modify its stand. Council and the Corporation could not come to terms. The result is that the PTC sub-station remains where it has been since 1924. As a result of the extensive changes in the proprietorship and operation of public transport in Victoria the land and the installation are now apparently vested in an organisation called 'VicTrack Limited'. Yarra Trams also has an interest. The station supplies power services for the Yarra Trams network. Council abandoned any attempt to move the sub-station. Moreover, whilst at the time of the Fabcot negotiations Council officers regarded the station as a 'eyesore' which Council had wished to be rid of even although it was identified in a heritage study in 1991 as being a C grade heritage building, a more recent study carried out and delivered to Council as recently as this year by Lovell Chen proposes that there be an overlay providing some heritage protection to the station. Since 1996 the apparatus within the building has been removed. With modern more compact technology the result is that a large part of the brick structure is now left empty. I was told in the course of the hearing that Council contemplated the possibility of developing the unused portion of the station as some form of kiosk or perhaps as public toilets. It is clear that any plan which Council had of acquiring the sub-station site, removing the building and converting it to open car parking has been irrevocably abandoned.
3. The owner of the subject land did not lose sight of the issue. When in 2002 Motor Trades Association of Australia Superannuation Fund Pty Ltd purchased the subject site from Fabcot its solicitors, Malleson Stephen Jaques wrote to Council's solicitors noting that the fund and the tenant had performed their obligation under the Section 173 agreement. The letter continued:

The only outstanding obligation is the removal of the PTC sub-station on the car park site, in accordance with Clause 9.2 of the Section 173 agreement by Council.

1. The letter continued with a recital of correspondence between the parties and concluded:

Should we not receive a satisfactory response within 28 days from the date of this letter then our client will initiate proceedings to compel your client to comply with its obligations.

1. In the event it appears no proceeding was ever instituted.
2. Meanwhile, Council did provide additional car parking at No. 37 Fairholm Grove, Camberwell. That is on the eastern or 'residential' side of Fairholm Grove. This new car park abuts a pre-existing car park at the corner of Fairholm Grove and Riversdale Road, that is, at the southern end of Fairholm Grove. This represented the completion of a strategy which reached back to 1980 when Camberwell City Council as Boroondara's predecessor acquired the land with a view to using it for car parking purposes.
3. During 1997/98 the Section 173 agreement was the subject of review and possible renegotiation. In 1998 Council contemplated removing the control on the land use and floor area contained in Clause 7.7 of the Section 173 agreement and replacing it with a control by way of site specific amendment in the Schedule to the Business 1 Zone of the Boroondara Planning Scheme. The subject land was and is zoned Business 1 under that scheme. On 16 June 1999 Council so advised Fabcot and its parent Woolworths Limited. Council was apparently moved to favour this approach amongst other things because the cancellation of the Section 173 agreement as a whole which was proposed would release Council from its obligations under Clauses 9.2 and 9.3. These matters were to be embodied in an amendment to the Planning Scheme 'C6'. This amendment was not proceeded with by reason of ratepayer objection. Apparently opponents of the change believed locating the limitation on tenancies and floor space in the Section 173 agreement provided a greater security for their continued operation than their inclusion of a site specific control in the Planning Scheme.
4. Maddock Lonie and Chisholm had prepared a draft deed of cancellation for the Section 173 agreement. This document was executed by Fabcot and by Motor Trades Association of Australia Superannuation Fund Pty Ltd but for the reasons given remained unexecuted by the City Council.
5. The next owner of the subject site was Sixty-Fifth Eternity Pty Ltd. Sixty-Fifth Eternity had a re-development proposal which it took to Council's Chief Planning Officer, Mr Storer and his assistants for consultation. This led to the lodgement of a permit application, PP05/01192 which enjoyed the support of Council's Planning Officers. This proposal would have taken the retail floor space from the level stipulated in Clause 7.7 of the Section 173 agreement to 13,958 sq m representing an addition of 2,218 sq m, 1,793 sq m at Level 1 and 425 sq m at Level 2 basement. The proposal entailed a net increase of 34 parking spaces. The officers' memorandum to the Urban Planning Special Committee of Council dated 20 August 2007 described the history of the provision in the Section 173 agreement for the removal of the PTC sub-station and its replacement on Council property at Butler Street. According to the report the provision of 30 car spaces would under this proposal entail an expenditure of between $2.5m and $3.5m. The report observed:

To provide 30 additional car parking spaces would cost $540,000 in a multi-deck car park or $840,000 in a basement car park.

It is therefore suggested that Council's funds would be better utilised in providing the 30 spaces in one of these ways. It is recommended that Council consider varying the Section 173 agreement so that Council funds can be more appropriately utilised.

1. As to the development proposal the officers said that it was in accordance with State Planning Policy which encouraged:

Urban consolidation as a way of reducing infrastructure costs, providing more effective housing, preserving valuable land at the urban fringe and giving more people access to community services and facilities.

The site has excellent access to public transport and this supports the policy objectives to locate new development near public transport links and the way to encourage walking as a form of transport.

1. The officers noted that the subject site was identified as a development site in the Camberwell Junction Structure Plan 1993. The buildings were considered by the officer to be of 'high quality design'. The officers recommended the termination of the 1996 Section 173 agreement and the negotiation of a new one limiting the number of tenancies at Level 1 to five premises including the supermarket and the discount department store. There should be no absolute limit on floor space, they recommended.
2. On 3 September 2007 Council issued a determination of refusal to grant a permit. The grounds stated were as follows:
   1. Inadequate off-street car parking has been provided.
   2. The scale and built form will have a detrimental impact on the amenity of the area.
   3. The location and use of the loading dock facilities will have a detrimental impact on the amenity of Fairholm Grove and nearby residential properties.
   4. The proposal fails to comply with the requirements of the Section 173 agreement which applies to the site.
3. The effect then was not merely to refuse the particular redevelopment proposal but to reaffirm the continued operation of the 1996 Section 173 agreement.
4. The Section 173 agreement had been the subject of a special condition in the contract dated 8 October 2004 whereby Sixty-Fifth Eternity purchased the site from Motor Trades Association of Australia Superannuation Fund Pty Ltd. The solicitor for Sixty-Fifth Eternity wrote a letter of demand to the City Council dated 3 March 2008. The letter recited Clauses 2 and 3 of the Section 173 agreement and continued:

It is now some 12 years since the agreement was signed and the Council has consistently failed to comply with the requirements of both Clauses 9.2 and 9.3 imposed upon the Council. We understand that proposals concerning the obligations in Clause 9.2 have been considered by the Council on a number of occasions but for reasons which are not known to our client the works have not been carried out at the cost of the Council as required by the agreement.

Clauses 9.2 and 9.3 of the agreement contained fundamental contractual obligations required to be performed by the Council under the agreement. They are intended to benefit the property and our client by the removal and relocation of the PTC sub-station and the provision of additional car parking on the PTC land in accordance with Clause 1.9.1.1 of the Development Design Guidelines. The serious breaches by the Council, in failing to comply with Clauses 9.2 and 9.3 of the agreement, have resulted in serious detriment to the property by reducing the number of customer car parking available to the retailers occupying the property. ...

The Council is required to proceed with the necessary Council works on the PTC land, involving completion of the demolition, removal and relocation of the PTC sub-station and the provision of the further car parking, by 15 June 2008 which our client considers is a reasonable time for the Council to carry out and complete the required covenant works.

If completion of the works by the date specified is not undertaken, our client intends to treat the Council's failure to comply with covenants of the agreement as amounting to a repudiation of the agreement by the Council, and will take steps to rescind and thereby terminate the agreement forthwith, as it is entitled to do so.

1. Council referred the letter to its legal advisers responding to the letter of demand noting that the solicitors were investigating.
2. No response having been received, Alan Wainwright J. Okno and Co wrote again on 25 June 2008 referring to the earlier letter of demand and concluding:

Unless these matters are attended to within 14 days of this date proceedings will be instituted by our client to obtain a declaration that the Agreement is terminated and for orders for an amendment to the Agreement to remove the land from the application of the agreement. We note that Section 184(3) of the Act provides that a purchaser of land who is a party to an Agreement or an owner of land, may apply to the Victorian Civil and Administrative Tribunal for an amendment to the Agreement to remove the land from the application of the Agreement, if the parties cannot agree that the agreement should be so amended.

1. In 2004 the City of Boroondara commenced preparation of a new Camberwell Junction Structure Plan. The Council's draft of the plan was completed, it showed the subject site blank, implicitly indicating that the regime laid down by the Section 173 agreement represented a permanent statement of the development status of this site. To put it another way this structure plan envisaged that the subject site had already reached its full developmental potential. This new structure plan has yet to be exhibited publicly. Its status is therefore uncertain.

1. Alan Wainwright J. Okno and Co filed the application which commenced this proceeding on 14 July 2008. This application sought relief :
   1. Orders by the Tribunal pursuant to s.184(3) of the Act that:

(a) the Agreement be amended to remove the Land from the application of the Agreement;

(b) the Registrar of Titles cancel the recording of the Agreement in the Register relating to the Land.

1. Such further and other Orders and Directions as may be required.

1. Following lengthy interlocutory steps including a discovery process which was somewhat out of the ordinary and messy the matter came on for hearing before me. The application sought the same relief as contained in the document filed on 14 July 2008 but amended points of claim dated 14 August 2009 were filed as the basis for the proceeding. The application in its original form sought the relief on the basis that the Section 173 agreement had been repudiated by Council which repudiation has been accepted by Sixty-Fifth Eternity such that the agreement was 'duly rescinded and discharged and [was] at an end'. The amended points of claim included contentions that Sixty-Fifth Eternity was 'not subject to any further liability ... because the restrictive covenants in Clause 7.7 are not capable of enforcement by the respondent' not only because of Council's failure to comply with its obligations relative to the PTC sub-station but also because:

There has been an alteration in the character of the neighbourhood such that the original purpose of the restrictions contained in the covenants in 7.7 can no longer be justified and the existence of the Clause 7.7 covenants stand as an unjustified and unreasonable impediment to the achievement of current planning policy objectives.

1. The points of claim referred to some six planning permits issued for other land within the Camberwell Junction Precincts at the direction of this Tribunal which it was said reflected:

The changing planning policy context and the need to facilitate development that satisfies the policy intent for principal activity centres.

1. The parties' submissions depend crucially upon the precise terms of the relevant sections of the Planning and Environment Act 1987. Fully to understand those submissions it is necessary to quote extensively from the relevant sections.
2. The agreement in dispute here was entered into pursuant to Section 173 of the Planning and Environment Act 1987 which I quote in full:
   1. Responsible authority may enter into agreements

(1) A responsible authority may enter into an agreement with an owner of land in the area covered by a planning scheme for which it is a responsible authority.

(2) A responsible authority may enter into the agreement on its own behalf or jointly with any other person or body.

(3) A responsible authority may enter into an agreement under subsection (1) with a person in anticipation of that person becoming the owner of the land.

(4) Despite anything in this Division, if an agreement entered into with a purchaser in anticipation of the purchaser becoming owner is registered by the Registrar of Titles, it does not bind the vendor unless the vendor assumes the purchaser's rights and obligations under the agreement.

1. The form and contents of such agreements are provided for in Section 174 which states:
   1. Form and contents of agreement

(1) An agreement must be under seal and must bind the owner to the covenants specified in the agreement.

(2) An agreement may provide for any one or more of the following matters -

(a) the prohibition, restriction or regulation of the use or development of the land;

(b) the conditions subject to which the land may be used or developed for specified purposes;

(ii) the objectives of the planning scheme or any amendment to the planning scheme of which notice has been given under section 19;

(d) any matter incidental to any one or more of the above matters.

1. Section 177 is headed 'When does an agreement end?' and provides as follows:
   1. When does an agreement end?

(1) An agreement may provide that the agreement ends wholly or in part or as to any part of the land on or after -

(c) the cessation of the use or the development of the land or any part of the land for a specified purpose.

(2) An agreement may be ended wholly or in part or as to any part of the land by the responsible authority with the approval of the Minister or by agreement between the responsible authority and all persons who are bound by any covenant in the agreement.

1. Section 179 requires a responsible authority to lodge copies of Section 173 agreements with the Minister for Planning 'without delay after the agreement is made'. The responsible authority is by virtue of sub-section (2) required to keep copies of each agreement marked up to show any amendments.
2. By virtue of Section 181 a responsible authority may apply to the Registrar of Titles to register an agreement. The Registrar of Titles is obliged to record the agreement 'in the Register'. Section 182 provides as to the effect of registration:
   1. Effect of registration

(a) the burden of any covenant in the agreement runs with the land affected; and

(b) the responsible authority may enforce the covenant against any person deriving title from any person who entered into the covenant as if it were a restrictive covenant despite the fact that it may be positive in nature or that it is not for the benefit of any land of the responsible authority.

1. Section 183 provides for a cancellation or alteration of registration obliging a responsible authority to inform the Registrar of Titles 'without delay' when an agreement ends wholly or in part. The Registrar of Titles is required to record these matters in the Register.
2. Section 184 is the provision under which this application is made and so I will quote it in full:
   1. Application to Tribunal

(1) An owner of land may apply to the Tribunal for an amendment to a proposed agreement if -

(a) under a planning scheme or a permit the use or development of land for specified purposes is conditional upon an agreement being entered into under this Division; and

(b) the owner objects to any provision of the agreement.

(2) The Tribunal may approve the proposed agreement with or without amendments.

(3) A purchaser of land who is a party to an agreement, or an owner of land, may apply to the Tribunal for an amendment to the agreement to remove the land from the application of the agreement, if the parties to the agreement cannot agree that the agreement should be amended.

(a) it considers that the land owner is not subject to any further liability under the agreement; or

(b) having regard to any relevant permit, or requirements under the Subdivision Act 1988, it considers it inappropriate that the agreement should continue to apply to the land and the owner.

1. Mr Golvan QC and Mr Finanzio said that this proceeding had been brought:

In an attempt to free the subject land from the constraints contained in the 173 agreement upon the use and development of the subject land which in the circumstances are both:

(b) inconsistent with the proper and orderly planning of the area.

1. They said Council's continued attempt to enforce the Section 173 agreement thwarted a reasonable development proposal for the site despite the fact that this proposal was:

Unequivocally consistent with current planning policy ... supported by the Council's professional planning [staff] that is and pose[d] no greater threat to the amenity of the surrounding area than the development which already exists on the subject land.

Hence they said there was no reason in planning or logic for the continued enforceability of the agreement.

1. They said that Sixty-Fifth Eternity Pty Ltd was subject to no further liability under the Section 173 agreement because it had been terminated and Council was disentitled to the benefit of the covenants in the agreement because of its own conduct and because enforcing the owner's covenant under the Section 173 agreement:

Would give effect to an outcome not reasonably intended by the parties, no mere constraint on the development of the subject land that is inconsistent with achieving a good planning outcome.

1. They said that Section 177 of the Planning and Environment Act set out the circumstances in which a Section 173 agreement:

May provide that the agreement ends, and also circumstances when the agreement may be ended by the Responsible Authority or by agreement between the Responsible Authority and the parties to the agreement.

1. They said this section did not purport to prescribe the circumstances:

In which the owner of land subject to an agreement arrives at a position where the landowner considers that it is not subject to any further liability under the agreement.

These matters they said were dealt with under Section 184(3) and (4) of the Act.

1. They said that an agreement may be brought to an end where an innocent party accepts repudiation and thereby treats the repudiatory breach as one going to the root of the whole consideration. This acceptance discharges the innocent party from further performance. They referred to Heyman v Darwins Limited [1942] AC 356, 399.
2. They said there was no code as to the discharge of Section 173 agreements to be found in the Planning and Environment Act.
3. They said that the power which Section 184(4) of the Planning and Environment Act grants to the Tribunal to approve an amendment to a Section 173 agreement 'is discretionary and the discretion is a broad one'. They referred to Solid Investments Australia Pty Ltd v Greater Geelong City Council [2004] VCAT 2366 [96].
4. They noted that the Section 173 agreement was executed under seal and contained mutual covenants by the parties. They said that nothing in the Planning and Environment Act made covenants by the Council any less enforceable than covenants given by an owner of land. They said the Podgor litigation was an example of Council being held to its covenants at the suit of an owner, hence they said, a landowner is entitled to rely on ordinary private law principles of contract law in enforcing its entitlements under Section 173 agreements. They said Morris J in his decision in the Solid Investments case at [58] had acknowledged as much.
5. They said that Osborn J in North Burnside Pty Ltd v Melton Shire Council [2006] VSC 35; (2006) 18 VR 1 [31] acknowledged that a covenant given by a Council was enforceable against it, other things being equal so long as it was entitled and empowered to give a covenant of the type in question. Here they said there was no question as to the enforceability of Council's covenant with respect to the electricity sub-station.
6. They said the covenants entered into by Fabcot and the Council were mutual and Sixty-Fifth Eternity was entitled to enforce Council's covenant against it because Clause 1.9 of the agreement defined owner to mean:

The person or persons entitled from time to time to be registered by the Registrar of Titles as proprietor or proprietor to the estate in fee simple in the subject land or any part of it.

1. They said that the benefit of a positive covenant runs with the land so as to be enforceable by a successor in title subject to the following requirements being met: first the covenant must touch and concern the land. They referred to Smith and Snipes Hall Farm Limited v River Douglas Catchment Board [1949] 2 KB 500 and Williams v Unit Construction Co Limited (1951) 19 Conv NS 262. Secondly, that the applicant is a successor in title to the original convenantee and is legal owner; the covenants were intended to benefit the successors in title and the benefited land is identified in the agreement as the subject land. Here they said the covenants relative to the sub-station benefited the subject land because they require the provision of additional car parking for the subject land, albeit on the site across the road and:

The general improvement of the public realm for the benefit of and in contemplation of the development of the subject land.

1. The definition of 'owner' which they referred to above indicated the covenant relative to the sub-station was for the benefit of successors in title, they also referred to Section 78(1) of the Property Law Act 1958 and the subject property was identified in the Section 173 agreement as the subject land.
2. The evidence shows, they said, that the covenant relative to the sub-station was included at Fabcot's insistence and it was contemplated that the appearance and attractiveness of the area and its connectivity with Burke Road would be enhanced by the sub-station works.
3. Mr Golvan and Mr Finanzio noted that in May 1999 Council had agreed to consent to the cancellation of the Section 173 agreement which would release Council from liability relative to the sub-station but Council went back on this agreement.
4. They said that Council's clear decision now not to comply with the sub-station covenant constituted a repudiation which Sixty-Fifth Eternity Pty Ltd had accepted by its solicitor's letter of 25 June 2008, hence they said Sixty-Fifth Eternity was under no further liability and the relief sought should be granted.
5. Further they said according to Section 182(b) of the Planning and Environment Act enforceability of a Section 173 agreement by a responsible authority was to be had 'as if it were a restricted covenant'. It was established, they said, that a covenantee may not enforce a restrictive covenant where it has become disentitled to sue for enforcement of a covenant by its own conduct or where the enforcement of the covenant would give rise to a result not within the reasonable contemplation of the party. These were private law principles which they said were incorporated by reference for the purposes of Section 173 of the Planning and Environment Act by virtue of the express reference in Section 182(b) to restrictive covenants. They referred to Osborne v Bradley [1903] 2 Ch 446, 450, 451; Elliston v Reacher [1908] 2 Ch 37;4, 395 and Preston and Newsom Restrictive Covenants and Freehold Land. They said also that a restrictive covenant may not be enforceable where there has been an alteration in the character of a neighbourhood. They referred to Preston and Newsom.
6. Mr Golvan and Mr Finanzio noted that the obligation on Council relative to the sub-station was not included in the original draft of the Section 173 agreement as included in the contract of sale. It was inserted following negotiations aimed at the request of Fabcot, hence:

It was only after Council agreed to the inclusion of Clause 9 [in its present form] that the 173 agreement was entered into and Fabcot became obliged to settle upon the sale of the subject land and construct the development the subject of the planning permit.

1. They said it was reasonable to infer that Council gave its covenant to induce Fabcot to buy and construct the new complex on the subject land. Since Council refused to honour its part of the bargain it has:

Lost its entitlement to enforce the burden of the covenants imposed upon the owner under the 173 agreement, and the covenants would not be enforced by a Court.

1. The restrictions on further development on the site were inserted, they said, to ensure that future development was in conformity with the 1993 Camberwell Junction Structure Plan and to ensure that development on the land did not compromise the economic viability of traders on Burke Road. They continued:

Importantly, the land use restrictions were not imposed for the purpose of protecting the amenity of adjoining or nearby properties over and above that which could have been legitimately expected under the planning framework in place at the time the 173 agreement was executed. Indeed, this objective was achieved by the grant of the planning permit itself independently of any agreement.

1. They said since the agreement was entered into there had been a substantial change in the planning policy framework applicable to Camberwell Junction with the introduction of the policy framework 'Melbourne 2030' and the revision of the Camberwell Junction Structure Plan. Moreover, there had been some six important decisions by the Tribunal granting major development permits in the vicinity of Camberwell Junction since 2007 which included a 14 storey high rise development in the junction, a seven storey supermarket development on the western side of Burke Road, a six storey development between Camberwell Road and Harold Street, a five storey development on land opposite the railway station, a six storey residential and office development in Cookson Street (near the railway station) and a redevelopment of the Camberwell railway station site. They noted that in each case the permit was issued at the direction of the Tribunal and in the face of refusal of a permit by Council, objections by residents or requests to modify or impose unacceptable conditions. They said the restriction in Clause 7.7 has the effect of limiting:

Development on the subject land when land everywhere else in Camberwell Junction is operating under changed planning parameters.

1. Developments approved and referred to in the evidence of the applicant's planning expert, Mr Robert Milner, entailed they said:

More intensive development than anyone contemplated at the time that the 173 agreement was executed.

1. They said it was only the existence of the 173 agreement that blocked the applicant's redevelopment proposal in 2008. They continued:

The existence of the clause 7.7 therefore stands as an impediment to the achievement of current planning policy objectives.

1. They said the purpose of the clause was to give effect to the then Planning Policy Framework:

The purpose of Clause 7.7 of the 173 agreement was not to restrain development that would be consistent with current planning policy setting. In other words, the purpose of the 173 agreement was not to retard, penalise or prejudice the development of the subject land in the event that a major shift in the Planning Policy Framework which would facilitate more intensive development everywhere else in the Camberwell Junction but on the subject site.

1. They referred to the evidence of Mr Milner who observed that to the best of his knowledge there were no restrictions on any other development sites in the Camberwell Junction precinct along the lines of those contained in Clause 7.7 of the subject agreement. They said:

If the Tribunal agrees that the Council should not be entitled to the enforcement of the covenants in Clause 7.7, it follows that the applicant is no longer subject to any further liability under the 173 agreement.

1. In any event they said having regard to relevant permits it was inappropriate for the Section 173 agreement to continue to apply to the land and the owner. Section 184(4)(b) enables reference to be made to 'any relevant permit' to determine whether it is inappropriate for the Section 173 agreement to continue to bind this land. They said that the relevant permits were the permit issued in 1996 and the other permits identified in Mr Milner's evidence issued in the last two years or so.
2. They observed that Sections 184(3) and (4) were introduced into the Planning and Environment Act by the Subdivision (Miscellaneous Amendments) Act 1991 which amended a number of Acts to facilitate:

The removal or variation of restricted covenants and other restrictions applying to land by the planning process such as Section 60(2) of the [Planning and Environment] Act.

1. This context they said should inform the manner in which Section 184 was construed. Sub-sections (3) and (4) thereof being:

Part of a suite of other amendments to provide a cost effective mechanism for overriding covenants of limited utility.

1. They noted that Camberwell Junction has been identified in State Planning Policy as a Principal Activity Centre and this strategic designation and the grant of the six permits 'is a recognition of the paradigm shift of planning policy [relative to Camberwell Junction]'.
2. They said that Clause 7.7 could by virtue of Section 174 of the Planning and Environment Act be inserted only for a planning purpose. Clause 7.7 they noted had no time limit and would, other things being equal, apply in perpetuity regardless of the changes in planning framework or developments on surrounding sites. They observed:

That simply cannot be correct, if for no other reason than that it has the potential to consign valuable land capable of efficient use to a perpetual state of under development. Rather than achieve planning objectives, such an agreement, if allowed to continue, has the potential to thwart the achievement of appropriate planning objectives which had been formulated.

1. Melbourne 2030, the Government's metropolitan strategy and the planning permits referred to by Mr Milner show that the continued operation of the Section 173 agreement was 'inappropriate'. They referred to Mr Milner's evidence to the effect that the agreement in its current form:

Could reasonably be held to frustrate the Council's and the State Government's planning policies for the principal activity centre. The tight limitation on the existing floor space, car and other attributes of the development effectively prevent renewal or development occurring or the policy intent to build up activity centres is the focus for high quality development activity and living from being achieved.

1. In submissions in reply Mr Golvan and Mr Finanzio observed that Council's position entailed a construction of the Planning and Environment Act:

Which would entitle it to secure the bargain of the landowner by making comments to perform certain obligations, but then once the bargain is struck ignore its obligations contained in the agreement, whilst at the same time being entitled to hold the landowner to its obligations.

1. They said this was being unfair and unreasonable construction of the statute and one which should be rejected.
2. They denied contentions put on behalf of Council that the provisions relative to the electricity sub-station were an afterthought. They said they represented an essential term of the Section 173 agreement. A term is an essential term if the innocent party would not have entered into the contract unless assured of a strict and literal performance of that promise. Any substantial breach of such a promise entitled the innocent party to discharge from further liability under the contract. They referred to Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 and Tramways Advertising Pty Ltd v Luna Park (NSW) Limited (1938) 38 SR (NSW) 632, 642 per Jordan CJ. They said that Fabcot would not have entered into the Section 173 agreement unless Council agreed to accept the obligations imposed relative to the sub-station. They referred to a letter from Minter Ellison to Maddock Lonie and Chisholm dated 8 February 1996. They said Fabcot was within its rights to insist upon the insertion of Clauses 9.2 and 9.3 (the provisions relative to the sub-station) before executing the Section 173 agreement. They said that the omission of any provision that time was of the essence relative to Clauses 9.2 and 9.3 did not change their essential character and Council was obliged in the circumstances to perform its obligations under those clauses within a reasonable time.
3. They rejected any contention that the Responsible Authority could not repudiate a Section 173 agreement. They said covenants by councils in Section 173 agreements were a common occurrence and therefore:

It cannot be the intent of the legislature that these agreements are never enforceable, and can simply be dis by a Council, whilst at the same time maintaining a right enforce the covenants of the landowner.

1. They said that the effect of Council's arguments was that covenants given by councils in Section 173 agreements were not enforceable at all.
2. They also urged rejection of a contention by Council that by providing alternate additional car parking in Fairholm Grove in 2001, Council had substantially performed the obligation which it undertook relative to the electricity sub-station. They said:

The parking facilities provided at Fairholm Grove were not comparable in any way to the situation secured by Council's agreement to Clauses 9.2 and 9.3.

1. Mr Golvan and Mr Finanzio conceded the argument put by Council that there was no privity of contract between it and the applicant. However this did not, they said, mean however that the occupant was not entitled to enforce Council's covenants under the agreement. In any event they said the effect of Section 78 of the Property Law Act 1958 was that Council's covenants were deemed to have been made not only with Fabcot but also its successors in title including the present applicant. The applicant derived title from Fabcot and the covenants related to land previously belonging to Fabcot now belonging to the applicant in that they sought to provide additional parking for the applicant's land and to:

Improve the pedestrian connection and public realm experience between the main street [that is Burke Road] and the applicant's land.

1. Any contention by Council that the covenants would not benefit the applicant's land:

Grossly underestimates the importance of the physical setting of commercial development like that contemplated by Fabcot.

1. These covenants were extracted from Council for the benefit of Fabcot's land they said.
2. There was nothing, they said, which would render Section 78 of the Property Law Act inoperative by an implied repeal effected by the Planning and Environment Act itself. They referred to Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1, 7, 10. This view, they said, was not inconsistent with the decision of Morris J. as President of the Tribunal in Solid Investments Australia Pty Ltd v Greater Geelong City Council [2004] VCAT 2356 or the decision of Byrne J of the Supreme Court of Victoria in Kameel Pty Ltd v Casey City Council [2005] VSC 23. They said while Section 173 agreements had a public law objective there is nothing in the Planning and Environment Act which should be regarded as excluding the ordinary rules as to contract derived from private law. They said reference in Section 173 to agreement incorporates by reference the law of contract.
3. Mr Golvan and Mr Finanzio rejected any argument that Clauses 9.2 and 9.3 were unenforceable against Council and should be severed from the agreement pursuant to Clause 14(4) thereof. They said insofar as that argument was based on the view that enforcement order proceedings under Section 114 of the Planning and Environment Act were the only possible means of enforcing a Section 173 agreement such premise was wrong. There was no reason they said why the Section 173 agreement could not be enforced in forums other than the Tribunal simply as an agreement. Since Section 114 of the Planning and Environment Act does not envisage that enforcement proceedings be taken against a responsible authority as such it could never, they said, be a proper vehicle for enforcement of a Council covenant under a Section 173 agreement therefore, covenants by a council under a Section 173 agreement would be simply unenforceable. They said 'that simply cannot be correct'.
4. They said there was no reason in logic or principle why a council covenant in a Section 173 agreement should not be enforceable by anyone in privity of contract with Council or for that matter an assignee.
5. It was no answer they said to the contention that Council had conducted itself whether by repudiation or otherwise in a manner which disabled it from enforcing the Section 173 agreement to say that a private citizen would be entitled to enforce such agreement under Section 114 of the Planning and Environment Act. They said

The only means by which a third party member of the public could seek to enforce the terms of a 173 agreement is under Section 114(1) of the P & E Act which is itself a discretionary remedy. A member of the public is entitled to apply for orders, but whether orders are made is a matter of discretion. The facts as raised by the applicant in these proceedings which would disentitle the Council for the benefit of the applicant's obligations would militate against the grant of discretionary relief in favour of third party member of the public.

In any event, a member of the public may only seek to enforce a 173 agreement if it is enforceable against the owner of the land.

1. As to what permits are 'relevant permits' for the purposes of Section 184(4)(b) of the Planning and Environment Act they relied upon a statement by Morris J in the Solid Investments case to permits for neighbouring land being relevant for these purposes. Section 184(4)(b) could be given a liberal construction they said because it was introduced along with a suite of other provisions which were intended to ensure that attainment of the planning objectives were not impeded by the existence of inappropriate agreements or restrictions. They concluded:

It is difficult to conceive of a more powerful case, in the circumstances, for the removal of the land and the owner from the application of the agreement exercising the discretion given to the Tribunal under Section 184(3) of the P & E Act.

1. They noted that one of the six recent permits granted at the direction of the Tribunal for this precinct was for a site west of Burke Road for a development known as 'the Well' including a supermarket. This permit had none of the restrictions on floor space and numbers of outlets found in the Section 173 agreement.

1. Mr Garde QC and Mr Jackson on behalf of the Council submitted that this application should be dismissed. They referred first to the general framework of planning in Victoria and to a number of provisions of the Planning and Environment Act. They noted for instance that under Section 6(2) of the Planning and Environment Act paragraph (k) a planning scheme can provide that any use or development is conditional on an agreement being entered into with the responsible authority or a referral authority and that by virtue of Section 62(2)(f) of the Planning and Environment Act a condition may be included in a planning permit requiring the landowner to enter into an agreement with the Responsible Authority under Section 173 of the Act. They noted next that in the event that there was a contravention of a Section 173 agreement by an owner or an occupier, the Responsible Authority or any other person is empowered to seek enforcement orders from the Tribunal under Section 114 of the Act. As a consequence of this planning framework they said that a Section 173 agreement was a:

Site specific control on land use or a development which runs with the land. Because it is capable of enforcement by any person (Section 114), it is not capable of being lost or waived by the actions of a responsible authority.

1. They noted that by virtue of Section 179 of the Planning and Environment Act these agreements are public documents and must be provided to persons who desire to inspect them. They referred to Solid Investments Australia Pty Limited v Greater Council (2004) 18 VPR 308 [42] - [46], [50], [53] - [59] per Morris J and North Burnside Pty Ltd v Melton Shire Council [2006] VSC 35; (2006) 18 VR 1. They said that at [57] of the Solid Investments case, Morris J observed:

Further, the agreement may contain covenants that do not run with the land, such as, but not confined to, covenants by the Responsible Authority ...

1. At paragraph [31] of the North Burnside case Osborn J said according to Messrs Garde and Jackson:

The statutory scheme does not provide for contractual obligations to be imposed on the Responsible Authority which run with the land.

1. They said that a number of Tribunal decisions have recognised Section 173 agreements as 'public agreements created by statute'. They referred to Van Der Heyden v Mansfield Shire Council [2002] VCAT 102 [24] per Mrs Rickards and:

As part of a suite of complementary planning controls and tools under the Act that are available to regulate the use and development of land, or to otherwise achieve a permanent objective.

1. They next referred to Wodonga City Council v Kiene [2009] VCAT 81 per Deputy President Dwyer.
2. They noted that at paragraph [33] and [34] of Kiene's case, Deputy President Dwyer noted that councils entered into Section 173 agreements as bodies responsible for the administration of planning rather than as normal contractual parties, hence the agreements took the character of planning instruments rather than merely private agreements that had a public character. To the same effect a decision of Byrne J in Kameel Pty Ltd v Casey City Council [2005] VSC 23 [25]. They also referred to Victoria Inn Pty Ltd v Hobsons Bay City Council [2005] VCAT 1866 [9] and Associated Town Planning Consultants v Boroondara City Council [2006] VCAT 304 [21] - [22] (Member Martin).
3. They said there was no good reason why the Tribunal should release the applicant as a successor to the original developer from covenants agreed to by it to obtain a permit for the original development:

When those covenants were given to protect the community generally and particularly the amenity of landowners, shopkeepers and residents in the surrounding area.

1. Even if, which they did not admit, Council had been guilty of a breach of contract it would not be appropriate to deprive the public and the community of the benefit of the covenants in the Section 173 agreement.
2. According to Mr Garde and Mr Jackson, the Planning and Environment Act:

Does not permit an owner of land to unilaterally terminate a Section 173 agreement.

1. In any event they said there was no privity of contract between Council and the applicant, hence there could be no repudiation. Even if this difficulty did not confront the applicant they said that Clauses 9.2 and 9.3 were not essential terms of the agreement, there was no breach of a non-essential term which would go to the root of the agreement and in any event Council has substantially performed the two clauses by providing additional parking on the other side of Fairholm Grove.
2. They said that Clauses 9.2 and 9.3 are not capable of specific enforcement because neither the applicant nor the Council controls or owns the land on which the sub-station is located. They said that by virtue of Clause 14.4 these clauses should be severed from the agreement. They said the power under Section 184(3) of the Planning and Environment Act does not apply to terminated agreements:

That sub-section permits the Tribunal to amend an agreement - the section has no effect if the agreement no longer exists.

1. They said it was significant that in none of the many drafts prepared before February 1996 was there any reference to the sub-station land:

This points strongly to the non-essential character of the relocation of the PTC sub-station.

Division 2 of Part 9 of the [Planning and Environment Act] provides a code for the amendment and termination of an agreement entered into pursuant to Section 173 of the P & E Act. That code does not provide for, nor permit, a decision of Section 173 agreements by owners for alleged repudiation of breach by responsible authorities.

1. They said since Councils entered into such agreements as responsible authorities rather than as normal parties, they:

Cannot repudiate or derogate from [their] statutory duties and responsibilities as directed by the P & E Act.

1. They noted that Section 174(1) of the Planning and Environment Act provides that the owner is bound by the agreement but not the Council. They said that the decision of the Tribunal in Solid Investments and of Osborn J in North Burnside provide that Council's covenants are not enforceable by assignees and do not run with the land. They noted that Section 177 of the Planning and Environment Act sets out circumstances in which a Section 173 agreement may end. Repudiation or a fundamental breach by the Responsible Authority is not one of those. These they said are the only circumstances recognised in the Act by which the agreement can end. They noted that the parties to a Section 173 agreement can amend it not merely among themselves but only with the approval of the Minister. The requirement in Section 179 for copies of the agreement to be lodged in the Minister's office 'highlights the public role of Section 173 agreements'. According to Mr Garde and Mr Jackson, Section 184(3) of the Act was not a separate power to terminate Section 173 agreements or an empowerment to the Tribunal to recognise non-statutory terminations but merely a machinery provision empowering the Tribunal to adjudicate upon differences between the parties as to whether one of the terminating or amending events referred to in Sections 177 and 178 of the Act had occurred. It would be contrary to the statutory scheme they said:

To allow the applicant to terminate the agreement through a purported acceptance of the Council's alleged repudiation.

1. Next they noted that Clause 4.2 provided that the obligations of the owner under the agreement ran with the land both at law and in equity. There was no provision to the effect that the rights of the owner ran with the land or that the obligations of the Responsible Authority ran with the land. There was no provision for the benefit, as distinct from the burden, of covenants to pass automatically cf Section 182 which provides for the burden of covenants to run with the land. They noted that Section 174 of the Planning and Environment Act required that the obligations under Section 173 agreements 'must bind the owner to the covenants specified in the agreement'. They noted there was no such corresponding provision relative to responsible authorities.
2. Referring again to the Solid Investments case and the North Burnside case, they submitted that the applicant derived no rights under the agreement against the Council simply as a successor in title to Fabcot. They said that the expanded definition of owner to be found in Clause 1.9 of the agreement was a:

mechanism to ensure that the burden of any covenant made by the original owner binds future owners in the event that the agreement is not registered at all or not registered prior to the transfer of the land to another person.

1. They observed that whilst Section 181 of the Planning and Environment Act permits the registration of Section 173 agreements it does not make that mandatory. They observed 'there is commonly a lag between the execution of the Section 173 agreement and its registration on title'.
2. They said Section 78 of the Property Law Act 1958 had no application here. They said this section only applied to covenants 'relating to any land of the covenantee' in the present case Fabcot. They said Clauses 9.2 and 9.3 'are not covenants relating to any land of the covenantee'. Moreover, they said that Section 78 of the Property Law Act 'was inconsistent with the provisions of Division 2 of Part 9 of the Planning and Environment Act and hence was inoperative. They referred to Wodonga City Council v Kiene [2009] VCAT 81 at [31]. In that case Deputy President Dwyer concluded that these provisions were inconsistent with Section 42 of the Property Law Act and had effected an implied repeal.
3. They referred to the statement by Morris J in Solid Investments at [43] 'that Section 173 agreements have a hybrid character'.
4. They said that since Clauses 9.2 and 9.3 required work to be done on land owned by the Public Transport Corporation and now owned by VicTrack there was no land of the covenantee involved and they did not relate to the applicant's land in any requisite sense:

Because the performance of the obligations in the covenants does not benefit the applicant's land or even relate to it as land.

1. They said that whilst the phrase 'relating to' has been held to be of broad import its precise width depends upon the context. They referred to O'Grady v North Queensland Co Limited [1990] HCA 16; (1990) 169 CLR 356, 374, 376 and Workers Compensation Board of Queensland v Technical Products Pty Ltd [1988] HCA 49; (1988) 165 CLR 642, 653. They said:

There is no more nexus a relationship between the subject matter of the covenant and the land on which the market is located or the land of any other shopkeeper, bank or service provider whose premises adjoin the market place (Council) car park.

1. The removal of the sub-station would have provided additional car parking spaces but they said the evidence showed that the car parking provided in the Fabcot development was already adequate 'the main purpose of removal was to provide for the beautification of the area'. They said that in terms of the analysis that is necessary to be carried out in considering the enforceability of restrictive covenants one would conclude that the covenants in Clauses 9.2 and 9.3 do not benefit the applicant's land.
2. Next they denied that Council had repudiated the agreement. They said the concept of a responsible authority repudiating a Section 173 agreement was:

At odds with the statutory functions and duties of a responsible authority and must give way to the statutory scheme of the P & E Act particularly Part 9.

1. In any event they said that a finding of repudiation is a matter not lightly to be made. They referred to Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620, 633-4. They said that a repudiation can only arise where a party is unable or unwilling to perform a term of a contract that is properly characterised as an essential term of the contract or one that goes to the root of the contract. They referred to Foran v Wright [1989] HCA 51; (1989) 168 CLR 385, 416 per Brennan J, 441 per Dawson J; and Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623, 642. These covenants were not of such importance that Fabcot would not have entered into the contract unless it had been assured of substantial performance and this would have been apparent to Council. They referred to Laurinda [1989] HCA 23; (1989) 166 CLR 623, 642 per Brennan J. The clauses were not essential terms apart from stating that Council might perform its obligation after the completion of Stage 1 of the development, they said:

The agreement was silent as to any link between the owner's obligations and Council's obligations relative to the sub-station.

1. They said the clauses were added as an afterthought and had not been included in the sale contract executed by Fabcot, performance of these obligations was beyond the sole capacity of the Council and this was known to both parties at the time of the contract and time was not made of the essence. They noted that neither the contract for the sale of the land nor the planning permit referred to the redevelopment of the sub-station and Fabcot proceeded with the development arrangements despite the failure of Council to remove the sub-station. The shopping centre has operated under the ownership of Fabcot and successors for many years. There is no evidence they said that Fabcot or any subsequent purchaser had suffered any loss or damage. The Council car park to the west of Station Street even with the sub-station included as an island provided extensive car parking space and Council had provided additional car parking in Fairholm Grove. Neither Fabcot nor any successor had made a claim for damages. They said that even if Clauses 9.2 and 9.3 were characterised as essential Council had provided substantial performance by demolishing a house at 37 Fairholm Grove and providing additional 35 car parking spaces. They noted that the agreement has otherwise been wholly performed as far as Council is concerned and no prejudice or damage has been demonstrated to exist. The demand for performance made in 2008 was unrealistic having regard to the fact that Council did not own the sub-station and could not directly control it. They said that since Clauses 9.2 and 9.3 were not specifically enforceable they should be regarded as unenforceable and the boilerplate severance clause at Clause 14.4 of the agreement should be regarded as operative to sever those clauses leaving the balance of the agreement operative. They referred to B.A. Garner_, A Dictionary of Modern Legal Usage_ (2nd Ed 1995) 315 where the learned author stated:

Lawyers continually speak of enforcing contracts, though this term is not apt unless one is seeking specific performance. Usually, the law merely specifies a remedy for breach of contract - damages - and does not compel performance.

1. They said that if enforceability in this context referred to enforceability under the provisions of Section 114 of the Planning and Environment Act in the Tribunal, these covenants were not enforceable under that section in the Tribunal and hence should be regarded as unenforceable. They said severance was automatic and not a matter of discretion. Clause 14.4 said that the relevant clause or clauses 'shall be severed'. They said the requirements for severance as laid down in Whitlock v Brew (No. 2) [1967] VR 883 had been met. The clauses should therefore be severed, they submitted.
2. Even if such severance did not take place they said Section 184(3) of the Planning and Environment Act as relied upon by the applicant did not apply. They said that Section 177 of the Act provided the only circumstances in which a Section 173 agreement could be brought to an end in whole or in part. Since none of those had been satisfied, hence there is no occasion for any finding in the present circumstance under Section 184(4) that the applicant was not subject to any further liability under the agreement.
3. Next they said that the provision in Section 182 of the Planning and Environment Act entitling a Council to enforce a Section 173 agreement 'as if it were a restricted covenant' was facultative and enabling not restrictive. The purpose they said was to enable enforcement to be made even of positive covenants in the same way as restrictive covenants are enforced not to provide that this was the only manner in which Council could seek to enforce. They said it would be contrary to the objectives of planning as set out in Section 42(k) of the Planning and Environment Act to adopt the construction on this point urged by the applicant. In any event they said 'the rights of another person to enforce a Section 173 agreement are not affected by what the Council may do'. They observed that Council was not seeking to enforce the agreement, it was the applicant that was seeking to avoid the agreement.
4. There was nothing they said in Council's conduct that should support the view that it had rendered the agreement unenforceable. They said since the provisions of Clauses 9.2 and 9.3 were late additions to the agreement and not found in the version annexed to the contract it could not be said that there were reciprocal obligations between Council and the landowner.
5. Mr Garde and Mr Jackson noted that Condition 40 of the relevant planning permit for the present supermarket and discount department store renders the existence of the Section 173 agreement mandatory. They continued:

If the agreement were to be terminated, the applicant would fall into immediate breach of Condition 40. There would be no Section 173 agreement in the required form.

1. They said the permit and the Section 173 agreement were 'complementary planning controls'. They continued:

It is submitted that whilst the applicant seeks to take advantage of the current permit allowing the use and development of the supermarket and discount department store, it now seeks to do so without the fundamental obligations associated with, and part and parcel of, the existing planning controls.

The subject land is not identified anywhere as a development opportunity. It is a site with a sensitive and extensive residential interface. There is nothing to suggest that the [Section 173] agreement is out of place or inappropriate having regard to the current structure plan.

1. They said that the existence of other approvals on different sites does not alter the situation of the subject site. They said:

A pivotal aspect of Section 173 agreements was that they have ongoing effect. They bind the landlord to perform certain obligations and subject them to certain restrictions despite the change in planning context. That is why they are registered on title.

1. They said that adherence to the Section 173 agreement was not inconsistent with what the original parties contemplated but was precisely what they did contemplate. They said:

A finding by the Tribunal with general changes to the planning context constituted ground on which a Section 173 agreement might be rendered inoperative would radically alter the fundamental basis on which planning operates in Victoria.

1. They referred to the North Burnside case where the agreement found still to be binding on the landowner had been entered into as long ago as 1987. The change they said:

Might fairly be said to significantly outstrip those referred to in Mr Milner's evidence in reply.

1. As to the question of what permits were to be regarded as 'relevant permits' for the purposes of Section 184(4)(b) they denied that the six decisions referred to by Mr Milner and in submission by Messrs Golvan and Finanzio were relevant. To accede to the arguments put on this point by the applicant would according to Messrs Garde and Jackson render Section 173 agreements 'very informal - indeed less permanent than planning permits, so making a mockery of their registration on title'. They submitted that the phrase 'relevant permit' is ordinarily directed to a permit that has been issued in relation to some or all of the burdened land. None of the permits could be regarded as relating to neighbouring land in accordance with the statement by Morris J in Solid Investments.
2. They said that there was no particular significance in the grant of the various permits referred to and relied upon 'that is precisely what would be expected in an activity centre'.
3. Finally, Mr Garde and Mr Jackson said that even if contrary to their primary submissions I was satisfied that the legal and factual elements of the applicant's claims were made out as a matter of discretion I ought not grant the relief. They said there was no demonstrated detriment to the applicant in circumstances where the current situation had persisted since 1996. This applicant they said bought the subject property with full knowledge of the present dispute and the continued existence of the PTC sub-station. They contended that the applicant's reliance on the issue is relevant to the sub-station was opportunistic. In contrast they said the Section 173 agreement was harmonious with the existing permit and there was a public and community interest in upholding it.
4. I accordance with directions given by Deputy President Gibson a residents' group put in a written submission opposing the applicant's case.

1. I now turn to consider the various matters argued by the parties.

1. Council's argument that its obligations relative to the sub-station are 'unenforceable' and hence by virtue of the Section 173 agreement should be severed and disregarded is a potential 'knock out blow' for the applicant's entire case relative to alleged repudiation.
2. It can be speedily disposed of. Mr Garde and Mr Jackson submitted that since the subject land viz. the sub-station land is not vested in the Council an order for specific performance of the obligations under Clauses 9.2 and 9.3 of the agreement would not be made against them. Mr Golvan and Mr Finanzio did not contend to the contrary. The proposition seems to me without any independent research of my own to be correct and so I will accept it. The next step in the argument is that since these obligations are not specifically enforceable they are to be treated for the purposes of the severance clause in the Section 173 agreement as 'unenforceable' and hence subject to compulsory severance.
3. On this view no contractual obligation is 'enforceable' unless it could be the subject of an order for a specific performance. It will be recalled that this submission relies upon the statement quoted above from B.A. Garner A Dictionary of Modern Legal Usage 2nd Ed 1995. In the quoted passage the author does not deal at all with a very common form of legal proceeding which I think most people whether lawyers or not would refer to as 'enforcement' viz. seen for the recovery of a debt or other liquidated sum (as to the meaning of which see Alexander v Ajax Insurance Co Limited [1956] VicLawRp 70; [1956] VLR 436 per Sholl J).
4. At this point it is necessary to note some of the curiosities of English legal history. English non-statutory law which remains the basis of Australian law consists of two strands, the common law which sets out the basic rules and underlying doctrines and the principles of equity developed as a supplement where, in the view of the Lord Chancellor as keeper of the King's conscience, the principles of common law were inadequate to do justice. Until 1875 in England and as late as 1972 in New South Wales the common law and equity were administered by separate and distinct courts. As Dr Spry in his work on Equitable Remedies states:

Historically the basis for the grant of specific performance by courts of equity has been the inadequacy of legal remedies, and particularly of damages, in the material circumstances. The precise question that has been asked is whether the allegation of the plaintiff to such remedies as he has in damages or other legal remedies would leave him in as favourable a position in all material respects as would exist if the obligation in question were performed in specie.

Spry, Equitable Remedies (7th Edition 2007) 59-60

1. The result then is to start with the presumption that specific performance is unavailable. It is only when it is demonstrated that the common law remedies such as damages are inadequate that equity will step in and provide its own remedy by way of specific performance. Dr Spry notes however that:

The occasions on which Courts decline to consider specific performance, on a jurisdictional or a threshold basis by reference to the adequacy of damages had been becoming progressively fewer.

1. The principle remains however that our law does not commence with the proposition that all contractual obligations are specifically enforceable with the exception of certain classes. The presumption was the opposite. Against that historical background it seems unlikely that a contractual obligation would be regarded as 'unenforceable' if only the remedies of the common law were available for its enforcement.
2. When one turns to the specific provisions of the present agreement and its factual matrix the point is stronger still. To the knowledge of the parties at the time the agreement was entered into the sub-station land was not under the ownership or occupation of the Council. According to the premise which I have accepted, from the outset and to the knowledge of the parties, according to the applicant's view of things, Clauses 9.2 and 9.3 were unenforceable. Why would parties trouble to include as a piece of negotiation in the latter stages of the finalisation of the form of this agreement clauses which according to other provisions in the same agreement were to be treated as unenforceable and severed. Why not just omit it from the start?
3. Is it not more likely then that those responsible for the drafting of this agreement have done what Garner says lawyers perpetually do, that is, treat the possibility of the prosecution of a claim for damages as constituting enforcement of these clauses?
4. Mr Garde and Mr Jackson however submit that not even damages would be recoverable. They point to the fact that the evidence shows that the subject site has a full complement of off-street parking within its own boundaries. Customers at the supermarket and the discount department store can park in the remainder of Council's car park to the west of Station Street. They can also park in the Council car park as extended by Council in Fairholm Grove. Hence it is submitted, no damage could be proven as suffered by the applicant or its predecessors as a result of Council's failure to perform relative to the sub-station. This view of events was not disputed by Mr Golvan and Mr Finanzio, however as Professor Carter notes in his work 'Carter on Contract':

Because a breach of contract is actionable per se, a plaintiff who has established a breach of contract by the defendant is entitled to nominal damages, for breach of contract without proof of loss.

Carter on Contract [41-050] 102, 071 (Service 3)

1. Accordingly the ability of whichever party is entitled to enforce Council's covenants (as to which I will have more to say later) to recover at least nominal damages renders the relevant covenants enforceable, or to put it another way prevents their being categorised as 'unenforceable'.
2. Council's severance point fails.

1. In North Burnside Pty Ltd v Melton Shire Council [2006] VSC 35; (2006) 18 VR 1, Osborn J of the Supreme Court of Victoria dealt with the enforceability of an agreement under Section 52A of the Town and Country Planning Act 1961, a provision which corresponds with Section 173 of the Planning and Environment Act 1987. That agreement had been entered into by Peboll Pty Ltd with the then Responsible Authority, the Shire of Melton. A successor in title of Peboll, namely North Burnside, sought to enforce obligations of the Shire of Melton against its successor, Melton Shire Council on an appeal from determinations of the Tribunal. Osborn J held that the agreement did not 'run with the land', hence since there was no privity of contract between North Burnside Pty Ltd and Melton Shire Council the agreement was not enforceable against the Shire Council. At [31] and [32] His Honour said:

Reference to s.52A demonstrates, however, that an agreement made pursuant to that section 'shall be an agreement under seal under which the owner of the land binds himself to the covenant specified in the agreement.' What is contemplated is not an agreement imposing mutual obligations upon the responsible authority and the owner of the land but an agreement under seal (and therefore not requiring consideration) under which the owner of the land covenants with respect to one or more of the matters set out in s.52A(4). The provisions of s.52B in turn provide that the burden of such a covenant runs with the land affected if the agreement is registered. As a consequence the responsible authority has the power to enforce the covenant against any person or persons deriving title from the person or persons who entered into the covenant as if it were a restrictive covenant. This statutory scheme does not provide for contractual obligations to be imposed upon the responsible authority which run with the land.

Accordingly, the agreement (whatever its effect may have been as between the contracting parties) is not enforceable against the successors of the former Shire of Melton at the instance of the plaintiff simply by virtue of the fact that the plaintiff is a successor in title to part of the land formerly owned by Peball Pty Ltd and forming part of the land the subject of the 52A agreement.

1. On the basis of this authority according to Mr Garde and Mr Jackson, Sixty-Fifth Eternity Pty Ltd had no title to seek to enforce Clauses 9.2 and 9.3 and the obligations relative to the sub-station against the Council.
2. Mr Golvan and Mr Finanzio relied upon a decision of the English Court of Appeal in Smith and Snipes Hall Farm Limited v River Douglas Catchment Board [1949] 2 KB 500. In that case an agreement was entered into under seal in 1938 whereby the Catchment Board contracted with the owner of flood prone land that in consideration of payments by the owner the Board would carry out certain flood mitigation works and maintain them. The landowner transferred her land to another party and the land was rented to the plaintiff company. There was a flood in 1946 and the company and the transferee of the freehold sought damages against the Board for breach of contract and tort. The Court of Appeal held that the plaintiffs were entitled to damages for breach of contract. The agreement according to the headnote was:

Such that it affected the value of the land per se and showed an intention that the obligation should attach thereto into whosever's hands the land should come; that the covenant by the Board ran with the land and by virtue of s.78 of the Law Property Act 1925, it could be enforced at the suite of the covenantee and her successors in title and of the persons deriving title under her or them.

1. This case established, according to Mr Golvan and Mr Finanzio, that a covenant was enforceable by a successor in title and hence ran with the land if first, it touched and concerned the subject land and is intended for the benefit of the successors of the original covenantee. They relied upon the definition of 'owner' to be found in Clause 1.9 of the agreement and also upon Section 78 of the Property Law Act 1958 which is in the same terms as Section 78 of the Law Property Act 1925 considered by the Court of Appeal in Smith and Snipes Hall Limited. Section 78 provides as follows:
   1. Benefits of covenants relating to land

(1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed. For the purposes of this subsection in connexion with covenants restrictive of the user of land successors in title shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefited.

(2) This section shall apply to covenants made after the commencement of this Act but the repeal of section sixty-four of the Conveyancing Act 1915 shall not affect the operation of covenants to which that section or any corresponding previous enactment applied.

1. Mr Garde and Mr Jackson said that Clauses 9.2 and 9.3 did not touch and concern the land and in any event did not relate to the subject property so as to 'run' with title to that property.
2. The test for whether a covenant touches and concerns the land is as stated by the Full Court of the Supreme Court in Lang v Asemo Pty Ltd [1989] VicRp 67; [1989] VR 773 where the question was whether a covenant by a guarantor of a lease of the subject land passed with title to the reversion in the absence of any express assignment. The Court held that it did. Gobbo J with whom Murphy and Phillips JJ concurred approved a formulation of the test as to whether a covenant touched and concerned land by Lord Oliver of Aylmerton in P & O Swift Investments v Combined English Stores Group PLC [1988] UKHL 3; [1988] 2 All ER 885 as follows:

(1) The covenant benefits only the reversioner for the time being, and if separated from the reversion ceases to be of benefit to the covenantee. (2) The covenant affects the nature, quality, mode of user or value of the land of the reversioner. (3) The covenant is not expressed to be personal (that is to say neither being given only to a specific reversioner nor in respect of the obligations only of a specific tenant). (4) The fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three foregoing conditions are satisfied and the covenant is connected with something to be done on, to or in relation to the land.

1. The various considerations in this test with the possible exception of the first clearly point to a covenant by Council to put car parking on the sub-station land on one side of Station Street touching and concerning the subject site which is on the other side. Clearly additional parking in this location would be beneficial to the owners and occupiers of the subject site. I am troubled however as to whether it can be said that Clauses 9.2 and 9.3 benefit only the reversioner for the time being of the subject site. Clearly additional car parking in the relevant location would be beneficial to the owners or occupiers of Camberwell Market and of shops which front Burke Road additionally to any benefit which might be derived by the owner of the reversion of the subject site. This stands in contrast to a situation where a guarantee of an obligation that is owed to the reversioner of demised land can be beneficial only to the person who has the right to receive the relevant rent, namely the freeholder from time to time. This was the situation in Lang's case. I accept however that in the present instance the benefit from car parking on the sub-station site would primarily benefit the freeholder of the subject site and regard that as sufficient to make out the relevant requirement for present purposes. Both the subject site and the proposed car park are clearly identified in the relevant agreement. Osborn J in the North Burnside case does not appear to have been referred either to Section 78 or to the Smith and Snipes Hall case.
2. In Smith and Snipes Hall Tucker LJ who constituted the Court with Somervell and Denning LJJ said:

It is first necessary to ascertain from the deed that the covenant is one which 'touches and concerns' the land, that is, it must either affect the land as regards mode of occupation, or it must be such as per se and not merely from collateral circumstances, affects the value of the land, and it must then be shown that it was the intention of the parties that the benefit thereof should run with the land.

1. This is a slightly different formulation from the one approved in Lang's case. It seems to me however that this formulation too is satisfied in the present instance because the availability of additional car parking would affect the value of the subject land not merely from collateral circumstances. The definition of owner in the agreement might be thought to show an intention that the benefit should run with the land.
2. Clearly this is contrary to the view expressed by Osborn J in the North Burnside case. Mr Golvan and Mr Finanzio submitted that these passages were dicta and not part of the ratio decidendi.
3. To test the correctness of this submission requires the somewhat elaborate rehearsal of the background to the North Burnside case. According to His Honour the 1987 agreement in North Burnside:

Was intended to provide a framework for the provision of road reserves, open space, a main drain, a vehicular crossing structure over Kororoit Creek, a pedestrian bicycle path along Kororoit Creek and the surface preparation of public open space both along Koroit Creek and where transferred to the Responsible Authority for recreational or community purposes.

[2006] VSC 35; (2006) 18 VR 1, 3 [5]

1. North Burnside contended that the effect of a Section 52 agreement was to require the Responsible Authority to approve the subdivision and developments contemplated by the Section 52A agreement despite the current planning regime which in the years that had followed had changed materially. The question for the Tribunal was whether the Section 52 agreement committed to Council and to approve proposals by North Burnside in accordance with the agreement or whether the matter was to be adjudicated upon by the then existing planning scheme and rules. The Tribunal held that a body with a statutory discretion to exercise as a Responsible Authority had, could 'fetter' its discretion to approve something in advance if and only if it had a specific statutory authority so to do. The Tribunal referred to the Camberwell Shopping Centre case [1994] VicRp 10; [1994] 1 VR 163, 184 per Marks and Gobbo JJ. The Tribunal concluded that no such authority to fetter discretion in advance existed for the Section 52 agreement. His Honour agreed with the Tribunal's conclusion that it was to be guided by the current planning law and not constrained by the Section 52A agreement.

It was not the intent of s52(4) that the ongoing operation of relevant planning scheme controls might be evaded by specifying conditions of development n a s 52A agreement. Such a construction would be contrary to the apparent intention of the T&CP Act read as a whole.

1. His Honour had earlier determined in the passages which I quoted at paragraphs [31] and [32] of his judgment that the agreement was not in any event enforceable at the suit of North Burnside. The author of the head note, Mr Rimmer of Counsel took the view that His Honour's reasoning at [31] and [32] constituted the first of his reasons for decision and that his conclusion based upon the rules prohibiting a statutory authority's fettering its discretion constituted the second reason for his determination to dismiss North Burnside's appeal. In my respectful opinion the head note correctly described His Honour's pathway to his conclusion. In Jacobs v London County Council [1950] AC 361 Lord Simonds (as he then was) said:

There is in my opinion no justification for regarding as abiter dictum a reason given by a judge for his decision, because he is giving another reason also. If it were a proper test to ask whether the decision would have been the same apart from the proposition alleged to be abiter, then a case which ex facie decided two things would decide nothing.

[1950] AC 351, 369

1. In my view therefore paragraphs [31] and [32] of the judgment of Osborn J form part of the ratio decidendi of his judgment and hence are binding upon me. His Honour does not appear to have been referred either to Section 78 of the Property Law Act or to the Smith and Snipes Hall case. It may be open to question whether it would ever be appropriate for this Tribunal to determine a decision of the Supreme Court was per incuriam cf Jacob v Utah Construction and Engineering Pty Ltd [1966] HCA 67; (1966) 116 CLR 200, 207. Even it were, Smith and Snipes Hall was not binding upon Osborn J. The form of Section 78 of the Property Law Act is not such as to change the substantive law, merely to deem a particular construction to be given to certain deeds in the absence of any intention to the contrary. Hence I do not believe there could be any question of North Burnside being per incuriam
2. North Burnside requires me to hold that the Section 173 agreement was not enforceable at the suit of this applicant. Hence this applicant cannot have the authority to accept an alleged repudiation.
3. This conclusion disposes of the applicant's case insofar as it is based upon an allegation of repudiation. I will nevertheless consider the alleged repudiation lest this matter go further.

1. In Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620, 625-6 Gibbs CJ said:

... a contract may be repudiated if one party renounces his liabilities under it - if he evinces an intention no longer to be bound by the contract ... or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way.

1. One of the matters for determination by the Court in Shevill's case was whether breaches of the rental covenant by a tenant amounted to a repudiation of the relevant lease. The Court held that it did not. The learned Chief Justice said:

It is clear that a covenant to pay rent in advance at specified times would not, without more, be a fundamental or essential term having the effect that any failure, however slight to make payment at the specified times would entitle the lessor to terminate the lease.

[1982] HCA 47; (1982) 149 CLR 620, 627

1. In his work Carter on Contract, Professor Carter says that a repudiation will be regarded as having taken place only where the criterion of seriousness is met. He postulates a number of possible tests for when the criterion of seriousness would be met including the suggestion of an anticipated breach which:

(c) involves delay which will frustrate the performance of the contract.

1. Mr Garde and Mr Jackson referred me to a recent decision of the High Court of Australia Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115. In that case the administrator of the Land Council alleged that Sanpine had breached its obligations concerning co-ordination funding and record keeping of the joint venture thereby evincing an intention not to be bound by the joint venture agreement constituting a repudiation. The administrator stated that he accepted the repudiation. At first instance Campbell J of the New South Wales Supreme Court held that the Land Council had validly terminated the agreement. His Honour's judgment was reversed by majority in the New South Wales Court of Appeal. On further appeal the High Court of Australia, Gleeson CJ, Gummow, Kirby, Heydon and Crennan JJ allowed the appeal and restored the trial judge's decision. In their joint judgment Gleeson CJ, Gummon, Heydon and Crennan JJ said:

The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the parties' obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it. (In this case, we are not concerned with the issues that arise where the alleged repudiation takes the form of asserting an erroneous interpretation of the contract. Nor are we concerned with questions of inability as distinct from unwillingness.) Secondly, it may refer to any breach of contract which justifies termination by the other party. ... there may be cases where a failure to perform even if not a breach of an essential term (as to which more will be said), manifests unwillingness or an ability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation of failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of the party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.

[2007] HCA 61; (2007) 233 CLR 115, 135-6 [44]

For present purposes, there are two relevant circumstances in which a breach of contract by one party may entitle the other to terminate. The first is where the obligation with which there has been failure to comply has been agreed by the contracting parties to be essential. Such an obligation is sometimes described as a condition. In Australian law, a well known expedition is that of Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Limited [(1938) 38 SR (NSW) 632, 641-2] who, in comparing conditions and warranties, employed language reflected in many statutory provisions. The widespread statutory adoption of the distinction between conditions and warranties, when essential and inessential terms is an established part of the background against which the common law has developed.

[2007] HCA 61; (2007) 233 CLR 115, 136-7 [47]

1. Their Honours approved the approach of the English Court of Appeal in Hong Kong Fair Shipping Co Limited v Kawasaki Kasen Kaisha Limited [1961] EWCA Civ 7; [1962] 2 Qb 26 where the Court said that there would be a right to terminate for breach of an intermediate term neither a condition or a warranty if the breach were sufficiently serious and of sufficient consequence. Their Honours also said at [2007] HCA 61; (2007) 233 CLR 115, 140 [55] that a breach goes to the root of a contract where it is such as to deprive the injured party of a substantial part of the benefit to which he is entitled under the contract.
2. It is clear I think that Council has made a final determination not to perform the obligations that it undertook under Clauses 9.2 and 9.3 of the Section 173 agreement. Given that the interlocking contractual arrangements were aimed at promoting the re-development of the department store and the supermarket and that such re-development took place and has been availed of not merely by the original developer Fabcot but by two successors in title points away from the criterion of seriousness as described by Professor Carter (and as elaborated in the High Court authorities to which I have made reference) being satisfied. Additional car parking would be of significance to the freehold owner of the subject site and was sufficiently significant for Fabcot to negotiate this provision in. However, given that the Council's car park to the west of Station Street provides large supplementary car parking to car parking arrangements on the subject site which are already sufficient in themselves to meet planning requirements it is altogether too much to suggest that the modest additional parking that removal of the sub-station would grant was of such importance that Fabcot would not have proceeded with the arrangements with Council without it. The nature of the re-development fortifies me in this view. As my earlier recital shows before re-development there was a far greater integration of the parking areas around the supermarket and the department store in their former incarnations to the east of Station Street and the car parking areas to the west. Shoppers were able to move from one side of Station Street to another at all points without any particular obstruction. Now their movements are obstructed as between the two parking areas by fences and barriers so as to be limited to a single pedestrian crossing point. These arrangements which were made in accordance with the re-development as contracted for substantially diminish the integration between the parking areas to the east and west of Station Street.
3. The provisions of Clause 9.2 and 9.3 are not essential terms or conditions according to the analysis from the authorities above. Nor in my view does the breach of Clauses 9.2 and 9.3 constitute conduct going to the root of the contract because it has not deprived Fabcot and its successors of the substantial benefit of the contract. The re-development took place and the two major stores are trading now and have traded since 1996. In the context of the entire set of arrangements the breach is not so serious, regarding Clauses 9.2 and 9.3 as 'intermediate terms', but in accordance with the principles postulated in the Hong Kong Fair Shipping case and accepted by the High Court in Koompahtoo that a right to terminate the contract should be regarded as existing. Therefore assuming contrary to my views expressed earlier that Sixty-Fifth Eternity Pty Limited, the applicant in these proceedings is entitled to enforce Clauses 9.2 and 9.3 and hence accept a repudiation based upon their breach, the breach here does not constitute a repudiation and does not give a right to terminate.

Is a Section 173 Agreement Repudiatable by a Responsible Authority?

1. In the course of his decision in the Solid Investments case where he was considering an application under Section 184 of the Planning and Environment Act, Morris J considered the application of private law principles to Section 173 agreements. He said:

There is little doubt that some of these principles do apply: for example, a responsible authority could sue a landlord or owner to recover money owed under such an agreement. But as I have explained, the Section 173 agreement can also perform the role of a public planning control over land. This may place some limitation upon the operation of doctrine such as abandonment, waiver and estoppel, in the context of a Section

1. His Honour referred to Besmaw Pty Ltd v Sutherland Shire Council [2003] NSWLEC 181; (2003) 127 LGERA 413, 446 and Park Street Properties Pty Ltd v City of South Melbourne [1990] VicRp 48; [1990] VR 545. In the Park Street Properties' case the Full Court, Crockett, O'Bryan and Gray JJ held that there was no application of the contractual doctrine of abandonment to a planning permit granted under the Town and Country Planning Act 1961. In Besmow's case Talbot J of the Land and Environment Court of New South Wales rejected a contention that a permit holder was excused from compliance with a permit condition on the basis that a responsible authority had waived compliance with it.
2. In the present case there is no doubt that Clause 7.7 is a public control on the use of the subject site. As Mr Garde and Mr Jackson pointed out a private ratepayer would be entitled to seek relief by way of enforcement from the Tribunal under Section 114 of the Planning and Environment Act whether Council wished to enforce compliance with Clause 7.7 or not. It would be inconsistent in my view with the status of Clause 7.7 as a public control on the use of land to treat it, as in effect, a private piece of property which in accordance with ordinary contractual principles and doctrines such as waiver, repudiation and the like could be bargained away or lost by the Council as if it were its sole beneficial property.
3. Mr Golvan and Mr Finanzio complained that this view pressed by the Council entailed the conclusion that Council could insist on compliance with the landowner's obligations and simply flout its own obligations with no consequences. This contention assumes that the only remedy for the victim of a breach of contract is to treat the contract as repudiated. Ordinary contractual remedies would be available. It is perhaps a matter of misfortune to the present applicant that the parties seem agreed that specific performance would not be ordered and only nominal damages could be recovered for breach. If the fact is that this breach has inflicted no provable economic loss on the applicant which is a trading company the injustice of leaving it without an effective means of enforcement of the relevant policy is not entirely evident.

Has Council's Conduct Disabled it From An Entitlement to Enforce Clause 7.7?

1. The first point to be made is as Messrs Garde and Jackson point out, the Council is respondent to this proceeding. It is taking no enforcement action. If Council were the only party entitled to enforce Clause 7.7 and if the law on the subject of the enforcement of restrictive covenants led to the conclusion that Council by its conduct was disabled from enforcing, there might be much to be said for the view that in those circumstances the applicant was under no further liability with respect to Clause 7.7 and this might establish a ground for relief under Section 184 of the Planning and Environment Act. As it is however, local ratepayer residents would be entitled to seek to enforce Clause 7.7. The history of public activism relative to developments in the Camberwell Junction precinct make this possibility more than fanciful. I do not find it necessary to reach a conclusion as to whether Council has by its conduct rendered itself unfit to enforce Clause 7.7. Clearly there are other parties who would not be in this situation and Council's conduct therefore cannot avail the applicant on this point.

Is it Inappropriate that the Agreement Should Continue to apply 'Having Regard to Any Relevant Permit'?

1. Section 184(4)(b) entitles the Tribunal to approve the amendment of a Section 173 agreement so that it not continue to apply to the land and the owner 'having regard to any relevant permit ... [the Tribunal considers it inappropriate that the Tribunal should continue to apply]'. The Section also makes reference to the operation of the Subdivision Act 1988. No argument has been put to me based upon the Subdivision Act and so I may put it to one side.
2. The argument is based, as noted, above upon the six recent permits directed by the Tribunal for large scale and intensive retail and commercial developments in the Camberwell Junction precinct. These permits and the designation of Camberwell Junction as a Principal Activity Centre have according to the applicant rendered it inappropriate that the Section 173 agreement should continue to bind it and the subject site.
3. The first question that arises is whether the six permits referred to above can be regarded as 'relevant' for the purposes of this section. Following the conclusion of argument in this matter my attention was drawn by both parties to a decision of Deputy President Dwyer in John Pernal Pty Ltd v Mornington Peninsula Shire Council [2009] VCAT 1595 where the learned Deputy President declined to give relief to a landowner under Section 184 of the Planning and Environment Act 1987 in a proceeding bearing some resemblance to the present. The learned Deputy President first concluded that Section 184 did not allow the terms of the Section 173 agreement to be re-visited generally upon 'the merits', that is, re-drawn according to what the Tribunal at the time of the hearing considered to be the appropriate planning outcome. The relevant permits to which Mr Dwyer referred were those affecting the subject property. It is fair to say nevertheless, that there is nothing to suggest that he was pressed to consider permits affecting any other site, so I cannot regard him as having determined in the John Pernal case the particular question that confronts me, namely the relevance of the six permits from elsewhere in the precinct. Rather closer to the issue arising in this proceeding are the dicta of Morris J in the Solid Investments case. In Solid Investments His Honour said:

There is no reason why the permit or subdivision requirement that is 'relevant' must be a permit or requirement in respect of the subject land itself. It may be that it is inappropriate that an agreement should continue to apply to particular land because a permit has been granted in relation to neighbouring land.

1. I take His Honour to be using the participle 'neighbouring' here as being synonymous with the adjectives 'adjacent' or 'contiguous'. According to these criteria the six permit sites relied upon which are hundreds of metres from the subject site cannot be regarded as neighbouring.
2. In my view had Parliament intended the Tribunal in an application such as this to be at large in effect to look at the complexion of an entire precinct and say, as I have been invited to do in effect in this proceeding, 'times have changed and this Section 173 agreement is out of date' it could have said so in far more direct and clear language. I remind myself that the Planning and Environment Act is one of the early examples of 'plain English' drafting in the Victorian legislative canon. The wider intent would, if it were truly there, be made manifest in the words. Further, if a wide ranging consideration of planning policy and rules were in contemplation one would have expected specific references to changes in planning schemes and perhaps to the possibility of land the subject of a Section 173 agreement being re-zoned. The fact that none of these things is mentioned indicates to me that Parliament intends a relatively narrow focus upon permits affecting the subject land itself or adjacent sites.
3. Even if I were wrong I am not persuaded that there has been a 'seachange' of planning policy relative to this site that is here alleged. True it is that under Melbourne 2030 Camberwell Junction has been designated a Principal Activity Centre; but under earlier planning schemes and strategies it was nominated a District Centre in the 1980s. The size and intensity of the National Mutual/Podgor proposal indicates that this site and its adjacent areas was seen as the proposed epicentre of intensive development in the area. The permits issued at the direction of the Tribunal recently, if anything, are indicative of a switch of focus away from this site as the heart and soul of Camberwell shopping to sites on the periphery.
4. The 'Well' development to the west of Burke Road could be regarded as representing a long overdue re-balancing of the relative intensity of development to the east and to the west of Burke Road. Mr Golvan and Mr Finanzio noted that there were no stringent restraints on tenancies, floor space and so forth in the permit for the Well development which would correspond with Clause 7.7. This seemed to be an appeal to a general sense of fairness or to the general planning merits of the matter, something which is not according to the text of Section 184 permissible. Certainly Mr Dwyer did not permit himself to be turned to these matters in the John Pernal proceeding. So one might say 'so what?'. It must be said however that the interface with heritage residential areas is far more acute on the eastern side at Fairholm Grove on the edge of the subject site than it is to the west where the neighbouring uses are more miscellaneous and the heritage value is generally not so high. There is therefore no complete identity between the issues relative to the 'Well' and the subject site. The applicant's case fails on this score as well.

1. It will be recalled that the permit issued for the supermarket and the discount department store BOR9941 subject to a Condition 40 requiring the Section 173 agreement. This condition is set out above at [26]. In Kameel Pty Ltd v Casey City Council and Hopin Pty Ltd [2005] VSC 23 Byrne J was considering an appeal against a determination of this Tribunal (constituted by the present writer) to make an enforcement order relative to a Section 173 agreement. Such an order could only be made in accordance with sub-section (1) of the section if a:

Use or development of land ... contravened ... a planning scheme, a condition of a permit or an agreement under Section 173.

Where a use or development is permitted, subject to terms contained in the scheme or in a permit granted under a scheme or in an s.173 agreement, the use or development is a contravention where that term is not complied with or it is then not permitted use. In short, the jurisdiction of the Tribunal under s.114 is enlivened, not because a developer or user of land breaches a term in an s.173 agreement, but because the use or development which is permitted subject to compliance with that term is thereby not permitted.

1. In Kameel's case as in the present, a condition for a commercial development was made subject to the developer entering into an agreement under Section 173 of the Planning and Environment Act with the Responsible Authority. The effect of His Honour's reasoning is that if the Section 173 agreement is expunged so far as this applicant and this land is concerned, the development and use constituted by the department store and the supermarket will cease to be permitted and therefore lawful under the Planning Scheme and the Planning and Environment Act. It can scarcely have been contemplated by Parliament in enacting Section 184 and that orders would be made under its terms which would have this effect. To some extent this point is but a manifestation of a larger underlying one which does not depend upon the true construction of the Planning and Environment Act at all. If a landlord repudiates a lease and a tenant accepts the repudiation the lease is terminated and the tenant cannot remain in possession under the terms of an alleged lease. If a supplier repudiates a supply agreement and the purchaser accepts the repudiation the supply agreement is at an end. There can be no further supplies pursuant to the now terminated agreement. Here, the applicant's predecessor Fabcot was able to purchase the subject site and obtain Council's support in the planning process subject to the covenants in the Section 173 agreement. It would in my view be contrary to fairness and principle for the applicant as Fabcot's successor to be entitled to free itself of the Section 173 agreement and yet continue to derive the benefits which the original arrangements between Fabcot and Council contemplated to accrue to the owner of the subject site. Deputy President Dwyer made a similar point at [20] of his determination in the Pernal case where he said:

I note that the owner and its predecessors have had the benefit of a permit for use and development of the broader integrated resort, and should therefore also adopt the corresponding obligations unless there is a very good reason to the contrary.

1. The proceeding will be dismissed. For the reasons given I am satisfied neither that the applicant is subject to no further liability under the Section 173 agreement nor that it is inappropriate that the agreement should continue to apply to the applicant or the site.