VCAT has again shown how difficult it is to modify a covenant via the Planning and Environment Act 1987 process, when a beneficiary of the covenant opposes the application.

In Stuart v Mornington Peninsula SC [2018] VCAT 67, the permit applicant sought a permit to vary a covenant that limited the height of a boundary fence to 18 inches (0.46m) in height. The application sought to allow a fence ranging in heights between about 1.5m to 2.2m, extending for a length of ~30m.

The Council refused the application on the basis that it could not be satisfied that the proposed covenant variation met the tests required by section 60(5) of the Planning and Environment Act 1987, because an objection had been received from a beneficiary who expressed a perceived detriment.

The applicant submitted that there would be no detriment to any beneficiary in allowing the new fence and that the objection was so clearly without merit that it should be considered to be vexatious or not made with good faith within the meaning of s 60(5) of the PE Act.

The objector submitted that the variation of the covenant would be detrimental to the enjoyment of her property, the amenity of the area and contrary to the purposes of the covenant.

The Tribunal also entertained the submissions of another objector who was not a beneficiary of the covenant, consistent with DP Gibson’s ruling in Hill v Campaspe SC (Red Dot) (2011) VCAT.

The Tribunal explained that because the covenant was created or registered before 25 June 1991, s 60(5) of the Act applies. This provides:

(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.

The decision maker is required to be satisfied of both limbs of s 60(5) before directing the grant of a permit for the variation of the covenant.

Ultimately, the Tribunal rejected the application because it did not find the beneficiaries’ objection to be vexatious or not made in good faith. This was so, even though the beneficiary would not be able to see the fence from her own property.

The take away lesson from this case is that if you are attempting to modify a covenant created before 25 June 1991 and you have a beneficiary opposing that application, it is rarely, if ever, worthwhile taking the matter on appeal to VCAT. Your remedy is more likely to be via the Property Law Act 1958 or Supreme Court process.