Application under Section 77 of the Planning and Environment Act 1987

McFarlane v Greater Dandenong CC & Ors [2002] VCAT 469

Trajkovski v Wyndham CC [2009] VCAT 1231

Ingberg v Bayside CC [2000] VCAT 2407

1. This application involves the removal of a restrictive covenant from the land at 35 Vasey Avenue, Lalor. If the covenant is removed, then a subsequent application is proposed to be lodged so as to allow the construction of a second dwelling on the land.
2. In its response to the Tribunal's Practice Note, Council advised that the application to remove the covenant may raise a question of law by virtue of Sections 60(2) and 60(4) of the Planning and Environment Act 1987.
3. The matter was listed before me for hearing on 20 January 2011 and I advised the parties that I was not a legally qualified member. Sec 107(1) of the Victorian Civil and Administrative Tribunal Act 1998 provides that a question of law must be decided by a legally qualified person. However, Section 66(1) of Schedule 1 to the Act notes that the question of law may be decided by the presiding member unless the parties to the proceeding disagree with the member making that decision.
4. Neither Ms Metcalfe, for council nor Mr Vivarini, the permit applicant disagreed with, or objected to my determining the matter including the question of law.

1. It is proposed to remove Restrictive Covenant No. 2145002 on Lot 76 on Plan of Subdivision 020068 (Vol 07360 - Fol 857) being No. 35 Vasey Avenue, Lalor.
2. Lot 76 is located on the south-west side of Vasey Avenue and it is approximately 375m east of High Street and about 940m west of Dalton Road. The site is a corner allotment, it is rectangular in shape and it has a frontage of 13.10m to Vasey Avenue, a depth of 43m and an overall site area of about 560m².
3. Restrictive Covenant No. 2145002 applies to the land and to a total of 110 nearby properties. The covenant is dated 28 May 1948.
4. In a summary sense, the covenant has five separate restrictions being:
   • The display of any posters, bills or advertisements upon any hoarding well or fences;
   • The erection of a hoarding or structure for the use of bill posting or advertising.
   • The construction of any building without the consent and approval in writing of the 'Peter Lalor Home Building Co-operative Society Limited';
   • The erection of only one residential dwelling on the land; and
   • The use of land for quarrying or brick making.
5. While it is clear that the main 'restriction' of concern to Mr Vivarini relates to the 'one dwelling' provision, the intention of the application is to completely remove the covenant from the land so that a subsequent application can be made for a second dwelling without any restrictions including some of the 'dead wood' parts of the covenant. In this context, Council advised me for instance that the "Peter Lalor Home Building Co-Operative Society Limited" no longer exists according to the register of the Corporations Act.
6. No part of the current application concerns the erection of the second dwelling and I have not turned my mind at all to the merits of a second dwelling on the land.
7. The current proposal is confined to whether the covenant should be removed or not.
8. Council advised me that the site is located within an established residential precinct in Lalor which is characterised by mainly single storey cream brick and weatherboard dwellings constructed during the 1950's. The site is part of the former residential estate known as the Peter Lalor Housing Co-operative which was established in the late 1940's to provide housing for ex-servicemen. There are many examples of modest timber and red brick dwellings constructed by the Co-operative within the immediate area. The subdivision design of the Peter Lalor Estate has an unusual layout with distorted grid streets and an unusual radial pattern centred on Paschke Crescent.
9. I confirmed this on my site inspection of 21st January 2011.

1. The subject site is within a Residential 1 zone under the Whittlesea Planning Scheme and is also covered by a Development Contributions Plan Overlay. Neither of these controls require a permit for the removal of a restrictive covenant.
2. However, Clause 52.02 of the Whittlesea Planning Scheme (Easements, Restrictions and Reserves) does require a planning permit to vary or remove a covenant. In deciding on an application, the Council must consider the 'interests of affected people'.

1. The relevant legislative provisions affecting covenant removal were introduced into the Planning and Environment Act about a decade ago. Relevant provisions include Section 60(2); Section 60(4); and Section 60(5).
2. Section 60(2) of the Act states:

The responsible authority must not grant a permit which allows the removal or variation of a restriction (within the meaning of the Subdivision Act 1988) unless it is satisfied that the owner of any land benefited by the restriction (other than an owner who, before or after the making of the application for the permit but not more than three months before its making, has consented in writing to the grant of the permit) will be unlikely to suffer -

(c) loss arising from change to the character of the neighbourhood; or

as a consequence of the removal or variation of the restriction.

1. Section 60(4) of the Act states that Section 60(2) does not apply to any restriction which was -

(a) registered under the _Subdivision Act 1_988; or

(b) lodged for registration or recording under the Transfer of Land Act 1958; or

1. I have already noted that Covenant No. 2145002 is dated 28 May 1948 and so Sections 60(2) and 60(4) do not operate.
2. However, Section 60(5) of the Act relates to those covenants created before 25 June 1991 and it states: [with my emphasis]

The responsible authority must not grant a permit which allows the removal or variation of a restriction referred to in subsection (4) unless it is satisfied that -

(a) the owner of any land benefited by the restriction .........will be unlikely to suffer any detriment of any kind (including any perceived detriment) as a consequence of the removal or variation of the restriction; and

(b) if that owner has objected to the grant of the permit, the objection is vexatious or not made in good faith.

1. Since the change to the Act, there have been a number of Tribunal decisions on the question of covenant removal.
2. One of the first tests of the new legislation was McFarlane v Greater Dandenong CC & Ors [2002] VCAT 469 where the Tribunal identified the following principles having analysed Section 60(5)(a) (at paragraphs 21-23):
   1. It is for the Tribunal to determine whether it is satisfied on the balance of probabilities that any covenant beneficiary "will be unlikely to suffer any detriment of any kind if the variation is permitted". In other words, it is not a question of whether the Tribunal is satisfied there will be detriment: the Tribunal must be affirmatively satisfied that there will be none.
   2. Compliance with planning controls does not, of itself, and without more, establish that a covenant beneficiary will be unlikely to suffer any detriment of any kind. Consideration of a proposal from a planning perspective often requires a balancing of competing interests. There is no such balancing exercise involved in the consideration of the issue which arises under paragraph (a). The nature of the enquiry is fundamentally different.
   3. The mere assertion of the existence of a detriment is not sufficient to demonstrate its existence. On the other hand, loss of amenity will constitute a detriment, and in this regard amenity includes an appeal to aesthetic judgement, which is difficult to measure, however the notion of 'perceived detriment' specifically contemplates that this consideration is relevant to the enquiry.
   4. The determination must be made on the evidence before the Tribunal "including the appeal site and its environs".
   5. It is not necessary for an affected person to assert detriment. This is so for two reasons: first, because the Tribunal must be affirmatively satisfied of a negative, namely that there will probably be no detriment of any kind; secondly, the Tribunal is entitled to form its own views from the evidence.
3. Having established these, the Tribunal in McFarlane then commented that:

The stringency of paragraph (a) is perhaps not universally appreciated. It sets the bar extraordinarily high. The existence of any detriment of any kind (including any perceived detriment) is sufficient to defeat an application to vary a covenant. "Perceived detriment" is a curious expression. We are by no means sure what it means. In Carabott the Tribunal opined that it contemplates that "an appeal to aesthetic judgment" is relevant to the enquiry. We agree that "perceived detriment" would include any loss of amenity in the form of diminution of aesthetic quality. Aesthetics is, of course, a subjective concept; perhaps this is what is meant by "perceived detriment". We do not however, think it necessary to further examine the concept for the purpose of these reasons.

It might be thought in some quarters that "any detriment of any kind" means "any appreciable , detriment" or "any significant detriment". It does not. It means what it says. Moreover, as we are at pains to emphasise, it is not a matter of whether detriment can be demonstrated. What must be demonstrated is the complete lack of it.

This construction is borne out by paragraph (b), the effect of which is that the mere presence of an objection by a relevantly interested person is fatal unless the Tribunal is satisfied that the objection is vexatious and not made in good faith. Although (b) does not apply in the circumstances of this case, it underscores the near impossible task faced by an applicant for variation or removal of a covenant who has not procured the consent of those entitled to its benefit.

1. The Tribunal in McFarlane sourced the second reading speech in parliament to support this view noting that when introducing the provisions, the Minister stated (and the Tribunal emphasised):

In relation to covenants, or title restrictions, in place before 25 June 1991, Clause 15 [section 60] ensures that permits are not granted to remove or vary those covenants unless any owner of land benefiting from the covenant will not suffer detriment of any type and unless any objection by an owner is not brought in good faith. That tightens the provision in relation to covenants in place before that date when s.60(2) of the principal Act commenced.

The effect of the clause is that permits should be granted only for "dead wood" covenants if no owner benefiting from the covenant objects to its removal or variation. The alternative avenue to remove or vary a covenant remain in place, being application to the Supreme Court under the Property Law Act 1958 and the preparation of a planning scheme amendment.

1. Council relied on a decision which emphasised the difficulties in satisfying Section 60(5). In Trajkovski v Wyndham CC [2009] VCAT 1231, the Tribunal noted (at paras 19 and 26):

It is apparent from the terms of subsection (5), its context in s.60, and from the second reading speech of the minister when it was introduced into the Act that it is intended to be very restrictive. There was talk in the second reading speech, of it being applicable to so-called "dead wood" covenants. It appears that the provision was intended to prevent amendment or removal of covenants created before 25 June 1991, except if there is no opposition to their removal. That somewhat overstates the position but it is very difficult for an applicant to satisfy subsection (5), especially if an objection is lodged.

The requirement of any detriment of any kind is severe enough. It means that the likelihood of a small detriment, even a slight one, is sufficient to prevent an alteration to the covenant, even if there were many substantial considerations weighing in favour of such a result.

1. I note that other cases (see Ingberg v Bayside CC [2000] VCAT 2407) have analysed the physical separation of the objector from the site as being a relevant consideration. In that case, a permit had already been issued for the construction of two dwellings and the Tribunal found that it was unlikely that it would have a detrimental effect on a beneficiary of the covenant who lived some distance away and in a different street.
2. I also acknowledge that the Tribunal has often granted permits to remove or vary covenants but invariably the facts of these cases have revealed that there was either no objection to the removal, or that the objections were from parties without the benefit of the covenant.

1. Council advertised the application to remove the covenant to all of the beneficiaries of the covenant. Evidently, there are a total of 110 beneficiaries. One objection was received and this was from a party in a street behind (but not abutting) Vasey Avenue. No owner consented in writing to the grant of a permit. The grounds of objection were:

1. The removal of the Restrictive Covenant to allow the construction of a second single storey dwelling does not respect neighbourhood character, protect amenity or does it provide more sustainable development. 2. The lifecycle cost of heating and cooling a (10-12) square storey house are very high. Also, a single storey, sprawling house creates a larger footprint, taking up precious outdoor space and visual access to the sky.

1. To only produce shelter is inadequate. This only protects us from the heat and the cold. We want to live in a Sustainable, Innovative, Dynamic Architectural Environmental Solution, not outdated sixties and seventies buildings to survive in.

1. I will be affected by the degradation of urban built form, which will affect the entire fabric of this fantastic and important suburb of Lalor. 2. Property values will be affected with a monotone human scale, dull character and no contrast. This will not attract a new generation of people. This will be a negative for this area.
2. The first thing that I have to determine is whether this objection is vexatious or not as provided by Section 60(5)(b). While some of the grounds are not as relevant as others (property values, shelter protection), there is sufficient expression of detriment in terms of amenity, character and built form for me to consider this as a legitimate objection. I am therefore satisfied that the objection is not vexatious and is made in good faith.

1. At the hearing, both Ms Metcalfe and Mr Vivarini spoke to written submissions. The sole objector, Mr Senek, was not a party to the application for review.
2. At the completion of the hearing, Council provided me with information regarding the planning history of properties within the estate which have the benefit of the covenant. Seemingly, Council has either varied or removed the restrictive covenant in the estate on six occasions since 2000, all on the basis of there being no objection. On one occasion Council refused an application on the basis of multiple objections to the removal. Based on the material that I received from Council, the only permit that Council has issued in this estate which had attracted an objection was when that objector was identified as a non benefiting landowner. In other words, the lack of any objection from any beneficiary is a critical ingredient in Council's decision making on the removal of covenants. I therefore find that Council has consistently determined these matters.
3. Essentially Council rejected the request as it was not satisfied that the owner of any land that had the benefit of the covenant would not suffer any detriment of any kind, including a perceived detriment. That being the case, Council felt it had no alternative but to refuse the request on that basis.
4. Mr Vivarini noted that:
   • In his opinion, the objector will not be immediately affected;
   • Only one of 110 properties has objected;
   • The grounds of objection are general, subjective and speculative;
   • There are now numerous examples in the covenant area of multiple dwellings;
   • Any subsequent development application will conform with planning policy in terms of character, design, amenity, sustainability and energy rating.
5. Mr Vivarini pointed out at least six examples of multi unit dwellings in the affected area some of which were very recent (No. 1 Paschke Crescent; Nos. 8A & 8B Newton Crescent; No. 1A Gratwick Street) as supporting his case.
6. I confirmed these and other examples on my inspection and I also confirmed the physical separation of the objectors property (No. 15 Chowne Street) from the subject site.

1. I have already dealt with the issue of the competency of the objection and I am satisfied that it is not vexatious.
2. My inspection revealed that the area is dominated by single dwellings. While I acknowledge that there are now some examples of medium density housing in the estate, I also note that in most cases these were permits that were issued by Council having removed the covenant on the basis of there being no objection.
3. It seems to me that the important word in Section 60(5) is 'any' and it is repeatedly used. "Any' is very limiting and it gives no room to move. "Any" provides a completely different test to the typical planning assessment which variously talks of 'balance' (see Clause 10.04 of all planning schemes; Section 4 of the Planning and Environment Act) or 'acceptable outcomes' (see Clause 65 of all planning schemes). Determining whether there is "any" detriment is quite a different test to assessing whether a detriment is unreasonable or not which is the more typical test of a decision making in a planning application.
4. The test of Section 60(5) is to determine if any owner is unlikely to suffer any detriment of any kind including perceived detriment. Of the 110 owners who benefit from the restriction only one has indicated it will suffer any detriment and those grounds include character, amenity and sustainability. No owner has consented in writing. If any of these grounds of objection 'stick' then I think that I must refuse the request. However, I am also mindful that on top of this one objector, Section 60(5)(a) requires me to also consider the owner of any land and therefore I think that the net is cast much wider than this sole objector.
5. I also note that the test provided by Section 60(5) is not based on whether or not I think that the site can support two dwellings; nor is it based on how the covenanted estate might have since been developed; nor is it based on any previous decisions of Council. The test is solely based on whether I think that any owner is unlikely to suffer any detriment of any kind by virtue of the covenant removal.
6. I agree with the Tribunal decisions in McFarlane and Trajkovski that the bar is set extraordinarily high for any party to satisfy this test. I especially acknowledge the following comments in Trajkovski, noting that this is not a balancing exercise as is often the case (para 26):

The requirement of any detriment of any kind is severe enough. It means that the likelihood of a small detriment, even a slight one, is sufficient to prevent an alteration to the covenant, even if there were many substantial considerations weighing in favour of such a result.

1. Notwithstanding the physical separation of the sole objector, the issues raised of amenity, character and built form all relate to the limitation of one dwelling on the land in an estate of which the objector is a part of. Given the limitations of Section 60(5) I am unable to satisfy myself that the removal of the covenant is unlikely to cause any detriment to any person including the perception of detriment. I therefore cannot conclude that any party (including this objector) would be unlikely to suffer any detriment of any kind. Having formed that view, I have no alternative but to refuse a permit under Clause 52.02.
2. The applicant would be aware that a permit application is not the only means of varying or removing a restrictive covenant with the main other avenue being Supreme Court proceedings.
3. I direct that no permit issue.