VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
administrative DIVISION
planning and environment LIST	vcat reference No. P1877/2018
Permit Application no. TPA/49147	
CATCHWORDS	
Section 77 Planning and Environment Act 1987; clause 52.02 Monash Planning Scheme; variation of restrictive covenant; materials of construction; section 60(5) Planning and Environment Act 1987; detriment as a consequence of variation of covenant; objection by owner of benefiting land	

APPLICANT	CY Executive Pty Ltd	
responsible authority	Monash City Council	
SUBJECT LAND	59 Brandon Park Drive
WHEELERS HILL  VIC  3150	
WHERE HELD	Melbourne	
BEFORE	Juliette Halliday, Member 	
HEARING TYPE	Hearing	
DATE OF HEARING	5 April 2019	
DATE OF ORDER	28 May 2019	
CITATION	CY Executive Pty Ltd v Monash CC [2019] VCAT 731	
Order

Amend permit application 
1	Pursuant to section 127 and clause 64 of Schedule 1 of the Victorian Civil & Administrative Tribunal Act 1998, the permit application is amended by substituting the following for the permission sought:
Variation of the restrictive covenant contained in Instrument of Transfer C309612 to insert the words ‘with the ground floor’ after the words ‘dwelling house’. 
No permit granted
2	In application P1877/2018 the decision of the responsible authority is affirmed.

3	In planning permit application TPA/49147 no permit is granted.

Juliette Halliday Member  			

Appearances
For CY Executive Pty Ltd 	Roz Wilson, solicitor and urban planner	
For Monash City Council	Sally Moser, planning consultant	

Information
Description of proposal	Variation of covenant in Instrument of Transfer C309612	
Nature of proceeding	Application under section 77 of the Planning and Environment Act 1987 – to review the refusal to grant a permit. 	
Planning scheme	Monash Planning Scheme	
Zone and overlays	General Residential Zone – Schedule 2	
Permit requirements	Clause 52.02	
Land description	The subject land is located on the north-western side of the intersection of Brandon Park Drive and Plato Crescent and has an area of 707 square metres. It is improved with a single storey brick dwelling with a pitched tiled roof and a single vehicle crossover on the western boundary of the subject land. It is irregular in shape, with a curved frontage to the intersection of Brandon Park Drive with Plato Crescent.                                               	
Tribunal inspection	An unaccompanied inspection of the subject land and surrounds was conducted subsequent to the hearing.    	

Reasons
What is this proceeding about?
1	This is an application under s 77 of the Planning and Environment Act 1987 (PE Act) seeking review of a refusal by the Monash City Council (Council) to grant a planning permit to remove a restrictive covenant which burdens the land at 59 Brandon Park Drive, Wheelers Hill (Land). The covenant prevents the construction of ‘any building other than a dwelling house of brick or brick veneer’ on the Land. 
2	The Council refused the permit on the grounds that it was not satisfied that the owners of land benefitting from the covenant will be unlikely to suffer any detriment of any kind (including perceived detriment) as a consequence of the removal of the restriction.
3	Prior to the hearing, the applicant provided notice of an amendment to the permit application (as required under the Tribunal’s Practice Note PNPE9 – Amendment of Plans and Applications). The permit application was amended to seek approval for a variation of the covenant so that it prevents the construction of ‘any building other than a dwelling house with the ground floor of brick or brick veneer’. The effect of this would be to allow the upper levels of a dwelling on the Land to be constructed of materials other than brick or brick veneer.
4	The applicant contends that the grounds of objection from the objectors with the benefit of the covenant do not relate to the restriction; that there will be no detriment of any kind (including perceived detriment) to any beneficiary as a result of the removal or variation of the materials restriction in the covenant. A planning permit was previously issued for the development of the Land for two dwellings, but this permit has not been acted upon. The applicant contends that the change in materials (as shown on the plans endorsed under the permit) to materials other than brick or brick veneer at the upper levels of the proposed dwellings will not result in any detriment of any kind to the beneficiaries.
5	Two beneficiaries of the restrictive covenant oppose the variation. They objected to the planning permit application. They filed statements of grounds with the Tribunal. They are not parties to the proceeding because pursuant to clause 56(5) of schedule 1 to the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) their statement of grounds indicates that they do not intend to participate in the hearing of the proceeding.
6	For the reasons that follow I have decided not to grant permission to vary the covenant and to refuse the application.
Statutory framework
7	Amongst other things, s 6A(2) of the PE Act provides that a planning scheme may require a permit to be obtained before a person proceeds under s 23 of the Subdivision Act 1988 (Subdivision Act) to create, remove or vary an easement or restriction.
8	Clause 52.02 of the Monash Planning Scheme (Scheme) provides that a permit is required before a person proceeds under s 23 of the Subdivision Act to create, vary or remove an easement or restriction. The purpose of clause 52.02 is to enable the removal and variation of an easement or restrictions to enable a use or development that complies with the planning scheme after the interests of affected people are considered.
9	Section 60(5) of the PE Act applies to the consideration of any permit application to remove or vary a restrictive covenant created before 25 June 1991. The covenant in question was created in 1965, and so s 60(5) applies. 
10	Section 60(5) provides as follows:
(5)	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 (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 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.
What are the key issues?
11	The key issues that are required to be addressed in determining this application are as follows:
a.	Is the grant of the permit to vary the covenant to facilitate the construction of dwellings on the land with upper levels of material other than brick or brick veneer precluded by s 60(5) of the PE Act?
b.	If the grant of the permit is not precluded under s 60(5) of the PE Act, should a permit be granted having regard to clauses 52.02 and 65 of the Scheme? (If the grant of the permit is precluded under s 60(5) then this issue does not need to be considered).
The restrictive covenant
12	The Land is burdened by the restrictive covenant set out in Transfer of Land C309612 dated 8 September 1965. An extract from the covenant is set out below:
…the Transferee its successors and transferees shall not at any time erect construct or build or cause to be erected constructed or built or allow to remain erected constructed or built on the land hereby transferred or any part thereof any building other than a dwelling house in brick or brick veneer (apart from any necessary outhouses and garages) and it is intended that the above covenant shall appear as an encumbrance on the certificate of title to issue in respect of the land hereby transferred.
13	The variation to the covenant for which permission is sought would alter the wording of the covenant to read as follows (the words to be inserted are in bold):
…other than a dwelling house with the ground floor in brick or brick veneer…
14	The beneficiaries of the covenant are all the lots that were contained in Plan of Subdivision number 68231 other than the Land (which is Lot 90). The information provided by the Council indicates the properties with the benefit of the covenant are Nos 43-59  Brandon Park Drive, 6 properties in Minerva Court, all the properties in Plato Crescent and two properties in Magid Court. 
15	The information provided by the Council indicates that notice of the application was given to the owners and occupiers of benefited land in accordance with sections 52(1)(cb) and 52(1AA) of the PE Act. The information filed with the Tribunal in accordance with Practice Note  - PNPE9 Amendment of Plans and Applications indicates that notice of the application to amend the permission sought to a variation of the covenant was provided to the owners and occupiers of properties with the benefit of the covenant. 
  The Land and its context
16	The Land is located in an established residential area comprising predominantly single, detached brick dwellings. The surrounding land is developed as follows:
a.	To the north at No 57 Brandon Park Drive is a single storey brick dwelling with a vehicle crossover on the common boundary with the Land;
b.	To the west at No 28 Plato Crescent is a single storey brick dwelling with a crossover along the common boundary with the Land;
c.	To the south at Nos 47 and 45 Plato Crescent are single brick dwellings;
d.	To the east at No 48 Brandon Park Drive are multi-unit brick dwellings, and at No 50 Brandon Park Drive is a single brick dwelling.
17	Premises within Plato Court, Minerva Court and Brandon Park Drive within proximity to the Land are predominantly characterised by single brick dwellings (some of which are painted) with open gardens. Nos 9, 19, 31 and 43 Plato Crescent are fully rendered single dwellings (noting that Ms Moser’s submission is that No 9 Plato Crescent is a rendered brick dwelling). Other dwellings in the area are brick with some non-brick elements, including Nos 43, 44 and 46 Brandon Park Drive, Nos 5, 7, 27 and 35 Plato Crescent (and possibly No 36 Brandon Park Drive). 
18	Of the properties which have the benefit of the covenant, there are in the order of four dwellings finished in render, and there are others which are brick dwellings, with non-brick elements. In a general sense, the properties with the benefit of the covenant are predominantly characterised by single brick dwellings. 
Planning permit TPA/42948
19	Planning permit TPA/42948 (the Permit) was granted to develop the Land for two, two-storey dwellings. The Permit has not been acted upon. Relevantly, the plans endorsed under the Permit show:
a.	The ground floor external finishes of both dwellings to be selected blockwork, render and timber cladding;
b.	The first floor external finishes of both dwellings to be scyon axon panel and render; and
c.	A note stating ‘Unit 1 and Unit 2 to be constructed in brick and brick veneer only’.
20	Initially, the applicant sought a permit to remove the covenant. The applicant now wishes to vary the covenant to allow the upper floors of the dwellings to be constructed in materials other than brick for reasons of both cost and design/engineering issues. As I understand it, the applicant wishes to construct the ground floor of both units in brick or brick veneer, which will be clad with external finishes at the ground floor (which are shown on the plans endorsed under the Permit as selected blockwork, render and timber cladding) and the upper levels of materials other than brick.
Is the grant of the permit precluded under s 60(5) of the PE Act?
Objections
21	The Council received two objections to the application from beneficiaries of the covenant (Ms Prendergast and Mr Borg) both of whom live at No 43 Brandon Park Drive. It is Ms Prendergast’s view that she does ‘not agree to the removal of the restrictive covenant’. She expressed concern about the appearance of the proposed multi-unit dwellings on the Land; the amount of hard surfaces proposed, and the traffic and car parking implications of two dwellings on the Land. She is also concerned about flooding in the area, asbestos in the existing dwelling and an ‘oversupply’ of this type of dwelling in the area. In Mr Borg’s view, multiple dwellings on the land are out of character with the area, and this will result in approval of other developments; increased traffic; stress on facilities and a loss of the character of the area.
22	Ms Prendergast and Mr Borg filed statements of grounds with the Tribunal in response to the notice provided by the applicant of the application to amend the permit application to the variation of the covenant and indicated to the Tribunal that they did not intent to participate in the hearing of the proceeding. Ms Prendergast objected to the proposed changes to the covenant and expressed concern that this will open the flood gates to cheaper, inferior dwellings. In her view, the covenant was put on the land to maintain the standard of the quality of the houses in the area, and the removal of the restriction would lower the standard of buildings. She also expressed concern that it was not intended to have inferior, combustible buildings in the area. Mr Borg objected to the removal of the covenant because in his view, it may change the character of the area, and that any change to the building conditions will decrease the quality of the neighbourhood.
Purpose of the covenant
23	The Tribunal has previously stated that it is relevant to identify the purpose of the covenant so as to consider what detriment may potentially be suffered consequent on the variation of the covenant, and whether any objections by benefiting owners are relevant to the covenant or the purposes behind it in the context of determining if they are vexatious or not made in good faith.
24	I am of the opinion that the purpose of the covenant is to create and protect the amenity and neighbourhood character of the area by both establishing a residential environment of dwellings and ensuring that the dwellings are built from substantial (rather than light-weight) construction materials. 
Will there be any detriment to benefiting land?
25	A number of Tribunal decisions have referred to the ‘extraordinarily high’ bar set by s 60(5). Section 60(5)(a) requires the Tribunal to be satisfied that the owner of any land benefited by the covenant will be unlikely to suffer any detriment of any kind (including perceived detriment) as a consequence of the variation of the covenant.
26	The principles that are relevant to assessing detriment have been set out in earlier Tribunal decisions, and are summarised in Dacre v Yarra Ranges SC as follows:
a.	the Tribunal must be affirmatively satisfied that a covenant beneficiary will be unlikely to suffer any detriment of any kind if the variation or removal of the covenant is permitted.
b.	it is not necessary for an affected person to assert or prove detriment because the Tribunal must be affirmatively satisfied of a negative, namely that it is unlikely that there will be detriment of any kind.
c.	even if no objections are received from the owners of land benefited by the covenant, their interests must still be considered. The fact that benefitting owners have not objected does not impel the conclusion that they are unlikely to suffer detriment of any kind.
d.	the onus is generally on the applicant to demonstrate the unlikelihood of detriment resulting as a consequence of the covenant being varied or removed.
e.	if the application to vary or remove a covenant is not accompanied by a collateral application for approval of a specific development, it will generally not be possible (or it will at least be extremely difficult) for the responsible authority or VCAT to reach the conclusion that any form of development of the land permitted by the proposed variation or removal of the covenant will be unlikely to cause detriment, particularly where abutting or adjacent properties enjoy the benefit of the covenant.
f.	the concept of ‘any detriment’ is a very wide one and includes even minor detriments. An assessment under Section 60(5) does not involve the balancing of detriments against countervailing benefits, such as may occur in the exercise of discretion in a general planning matter. If there is any detriment of any kind, then a permit can only be granted if such detriment is considered to be unlikely.
g.	detriment (and, in particular, perceived detriment) does not rely on the establishment of a direct physical amenity impact – for example, from any form of multi-dwelling development on the land. In a town planning context, it includes broader concepts of detriment or non-physical amenity impacts, including perceptions of neighbourhood character or “an appeal to aesthetic judgment”.
h.	VCAT does not need to find that detriment will occur as a probability, rather it is sufficient that there is a possibility, which is neither fanciful nor remote, that detriment may result.
i.	the compliance of a proposed development or use with current planning controls does not, of itself, and without more, establish that a covenant beneficiary will be unlikely to suffer any detriment of any kind.
27	The applicant submits that:
a.	The covenant requires the dwelling to be constructed of brick or brick veneer, but does not require the outer walls to be exposed brick;
b.	If a dwelling which is constructed in brick or brick veneer is ‘rendered or clad’, there would be no breach of the covenant because the covenant does not specify external building materials. In that case the internal materials of construction would not be visible to any beneficiary of the covenant; and
c.	‘many dwellings’ in the area benefitted by the covenant have external render, cladding or paint. It is not possible to ascertain what is beneath the render or cladding, and one can only assume that the underlying material complies with the covenant.
28	If the materials of construction for the upper floors of the dwellings are varied to be materials other than brick, the applicant submits that there would be no detriment (including perceived detriment) to any beneficiary of the covenant on the basis of the following:
a.	The variation to the covenant sought will alter the materials beneath the render/cladding on the upper level as shown on the plans endorsed under the Permit; 
b.	There will be no impact on neighbourhood character and there will be no external impacts because the endorsed plans show render and cladding on the building exterior. The only change to the endorsed plans will be that only the ground floor (and not the upper floor) of the two dwellings are constructed in brick. The exterior of the building will not change from what is shown on the endorsed plans; and
c.	The plans endorsed under the permit which show both dwellings finished in materials other than brick, and a note on the plans stating ‘Unit 1 and Unit 2 to be constructed in brick and brick veneer’.
29	I acknowledge that the covenant does not restrict the use of external finishes other than brick or brick veneer, provided that the underlying vertical structure is brick or brick veneer.
30	However, I consider that it is not enough for the applicant to point to the matters referred to above and submit that on that basis the Tribunal can be satisfied that it is unlikely that any owner of any land in the area will suffer any detriment of any kind (including perceived detriment).
31	Mr Borg has expressed concern that the variation to the covenant may change the character of the area and decrease the quality of the neighbourhood. Ms Prendergast stated that the removal of the covenant would lower the standards in a context where the covenant was put on the land to maintain the standard and quality of houses in the area.
32	Although the beneficiaries of the covenant may have initially misunderstood the nature of the covenant to be a single dwelling covenant, I consider their concerns about the character of the area and the quality of materials used in constructing the dwellings to be relevant matters.
33	Whilst neither of the objectors own land which directly adjoins the Land, and so they are unlikely to suffer a direct physical impact of two dwellings with the upper levels constructed of materials other than brick, an objection based on a non-physical impact, such as a change in neighbourhood character resulting from the use of materials of construction at the upper levels other than brick or brick veneer, cannot be eliminated.
34	Section 60(5)(a) requires me to consider whether any benefiting land owner will suffer any detriment of any kind. Based on the facts and circumstances of this application, I consider that detriment and/or perceived detriment may be experienced as a result of changes to the neighbourhood character resulting from the development of two dwellings on the Land with the upper levels constructed of materials other than brick or brick veneer. I do not consider that the possibility of this detriment and/or perceived detriment is either ‘fanciful’ or ‘remote’.
35	In this regard, I note that the part of Brandon Park Drive and Plato Court surrounding the subject land predominantly consists of brick dwellings. There are in the order of four dwellings which are rendered in the surrounding area (although Mr Wilson acknowledged that ‘one can only presume that the underlying material complies with the covenant’).
36	There are also dwellings which have elements that are not constructed with brick or brick veneer (including part of the upper level of the objectors dwelling at No 43 Brandon Park Drive, and possibly the upper level at No  36 Brandon Park Drive). The nature of the external finishes of the two dwellings shown on the endorsed plans are not brick or brick veneer. However, in my view the properties in the surrounding area with the benefit of the covenant are predominantly characterised by single brick or brick veneer dwellings. 
37	If the covenant is varied as sought (and the dwellings are constructed pursuant to the plans endorsed under the Permit which were provided at the hearing) then in place of two brick (or brick veneer) dwellings, there would be two dwellings with the ground floor levels constructed of brick or brick veneer (with non-brick external finishes) and the upper floors constructed of materials other than brick or brick veneer (the scyon axon panel and render finishes). 
38	Whilst the exterior finishes of the two dwellings (as shown in the endorsed plans) will not be brick or brick veneer, the materials of construction of the upper level of each dwelling will change from brick or brick veneer (with external finishes) to lighter weight materials (being scyon axon panel and render finishes). I consider that the construction of the upper levels of the two dwellings in light-weight materials other than brick or brick veneer represents a departure from the prevailing neighbourhood character, which would be a discordant feature in this area, which is predominantly characterised by brick and brick veneer dwellings.
39	I consider this to be a relevant detriment for the purpose of s 60(5)(a) of the PE Act and on this basis, I am not satisfied that a variation of the covenant will be unlikely to cause any detriment of any kind (including any perceived detriment).
Objections by owners of benefiting land
40	Under the second limb of s 60(5)(b), before granting a permit to remove or vary a covenant, the decision maker must be satisfied that any objection made by an owner of land benefited by the covenant is vexatious or not made in good faith.
41	Ms Wilson acknowledged that the objections of Ms Prendergast and Mr Borg could not be said to be ‘not made in good faith’. Her submission is that the objections are vexatious in the sense of being so obviously untenable or manifestly groundless as to be utterly hopeless.
42	In Giosis, the Tribunal considered the concept of vexatiousness with reference to other authorities including Attorney General for the State of Victoria v Kay in which the Supreme Court considered the meaning of ‘vexatious’ in the context of a person declared to be a vexatious litigant. In Kay, Eames J cited what was said in Attorney General v Wentworth as follows:
It seems to me that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds.  I believe that the tests may be expressed in the following terms:
1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought. 
2.  They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise.  
3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.
43	In Giosis, the Tribunal:
a.	raised concerns about a ‘direct translation of a judicial definition in one statutory context to a different statutory context’ and said that this is particularly the case where s 60(5)(b) is clearly directed towards the objectors motive; and
b.	said this casts some doubt about the applicability of the notion of ‘constructive vexation’ suggested by the third leg of the definition in Wentworth which is to apply irrespective of motive; and
c.	indicated that the notion of vexatious imports intent to cause annoyance, which can often be inferred from the fact that the objection is ‘obviously untenable’ or ‘manifestly groundless’.
44	I have already referred to the objections by Mr Borg and Ms Prendergast who own land which has the benefit of the covenant. I do not agree that the objections made in this application are vexatious. There is no evidence that the objections were made with the intention to annoy or frustrate. I do not consider the objections to be ‘obviously untenable’ or ‘manifestly groundless’.
45	Mr Borg’s objection and statement of grounds raise the issue of whether the change to the covenant will result in a change to building conditions which will decrease the quality of the neighbourhood and change the character of the area.
46	Whilst it is arguable that Ms Prendergast’s objection to the permit application was directed towards concerns about multi-unit development, she clearly stated that she ‘does not agree to the removal of the covenant’. Ms Prendergast’s statement of grounds raises the issue of how the variation of the covenant will affect the standard of houses in the area.
47	Mr Borg and Ms Prendergast are not only concerned about the impact of multi-unit development in the area. They are concerned about changes to the area brought about by alterations to the standard and condition of dwellings, and in Mr Borg’s case these extend to a concern about the character of the neighbourhood. I do not consider (in the absence of more) that the objections are wholly misconceived or that they raise issues entirely unrelated to the variation of the covenant. Even if Mr Borg and Ms Prendergast misunderstood the covenant as being a single dwelling covenant, I am satisfied that their objections (and their statements of grounds filed with the Tribunal) have relevance, and I do not consider that they should be excluded on the basis of being vexatious.
Conclusion 
48	I am not satisfied of the matters set out at s 60(5) of the PE Act. On this basis I am required to refuse to grant the permit.
49	Having regard to my findings regarding s 60(5) of the PE Act, I am not required to consider whether I should exercise my discretion under clause 52.02 or 65 of the Scheme.
50	For the reasons given above, the decision of the responsible authority is affirmed. No permit is granted.

Juliette Halliday Member