Restrictive covenants: They’ve done it, why can’t I? - Wolters Kluwer CCH
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Commercial LawLegal

Restrictive covenants: They’ve done it, why can’t I?

By Clare Kent

In Foudoulis v O’Donnell [2020] VSC 248 the plaintiff was applying to modify a single dwelling covenant created in 1922 so that he could build two semi‑detached dwellings in his backyard behind his existing single level home.

The proposed development would have obviously contravened the covenant.  To overcome the restriction, the plaintiff applied to the Supreme Court under s 84(1)(c) of the Property Law Act 1958 (Vic) to have the covenant modified.

The plaintiff’s case was that the neighbourhood had changed in character and that the predominant single dwelling character of the neighbourhood had been eroded since the creation of the covenant almost a 100 years ago.  It was asserted that modifying the covenant to allow three dwellings on the plaintiff’s land would not have substantially injured the beneficiaries of the covenant because the modification would have been just another example of multi dwellings on land or an alteration of housing density that has already occurred in the neighbourhood, and therefore there would be no harm in allowing the modification.

The area had changed in that:

  • some quite large single lots had been subdivided into two or three lots (however each lot only had a single dwelling built on it);
  • some multi-unit developments had been built.

Owners of properties in the vicinity of the plaintiff’s property objected to the proposed modification to the covenant. They accepted that modifications had occurred in the neighbourhood but argued that the court should uphold the utility and purpose of the covenant and not let the changes in the neighbourhood go any further lest the predominantly single dwelling character of their neighbourhood become spoiled or ruined by more of these applications, which they asserted, was bound to happen. 

Decision

The court agreed with the neighbours and refused the plaintiff’s application, finding that the existing changes to the neighbourhood were not great enough to have eroded the benefits of the single dwelling covenant.