It’s long been established that equitable restrictive covenants or restrictive covenants inter partes should be construed in a common sense and non-technical way, with the objective being to ascertain the intention of the parties by reference to the words in their context. See Clare v Bedelis [2016] VSC 381 at [31]

Arguably, this approach to interpretation should not be strictly applied to a restriction in a plan created by way of the Subdivision Act 1988 (Vic).

As the learned authors of the Victorian Law Reform Commission’s report on Easements and Restrictive Covenants (VLRC Report) explained, equitable restrictive covenants and restrictions on a plan are not the same:

6.40 It is commonly assumed that a restriction created by registration of a plan is a restrictive covenant and that all lot owners in the subdivision have the benefit of it. The idea is likely to have been fostered by the inclusion of ‘restrictive covenant’ in the definition of ‘restriction’ in the Subdivision Act. It also finds some support from administrative provisions recently inserted into the Transfer of Land Act, which refer to a ‘restrictive covenant created by plan’.

6.41 We disagree with this assumption. A restriction created in a plan is not one that equity would recognise or enforce, as the restriction is not created for the benefit of specified land. Equity has strict requirements about identifying the benefited land.

In Manderson v Smith [2021] VSCA 359, the Court of Appeal was asked to construe a restriction arising out of a now-expired plan of subdivision, however, their Honours did not see fit to draw the distinction made in the VLRC Report.

Rather, Beach and Kennedy JJA were content to have recourse to a dictionary definition of a term in the restriction, namely “building”, and eschewed reliance on the definition of “building” in the Planning and Environment Act 1987:

42 Restriction 2 prohibits the ‘develop[ment]’ of the land ‘other than in accordance with’ the NDP. Even presuming that the construction of a boundary fence constitutes a development of the land, the fence is only ‘other than in accordance with’ the NDP if it properly constitutes a ‘building’, or ‘part of a building’ the subject of the prohibition in the NDP.

43 The Macquarie Dictionary definition of a ’building’ is as follows:

1. a substantial structure with a roof and walls, as a shed, house, department store, etc.
2. the act, business, or art of constructing houses, etc.

There is nothing in this definition which suggests that a ‘building’ should extend to a boundary fence. In this respect, we would respectfully disagree with Emerton J that it was appropriate to have recourse to the definition contained in the Planning and Environment Act 1987.
The matter does not appear to have been the subject of contested submission. In any event, we do not consider that any such recourse is necessary or appropriate. Although the Permit is to be interpreted pursuant to the definitions in that Act, the Permit is spent. It would also be unnecessary to include the words, ‘or part of a building’ if that definition applied, because the statutory definition already includes ‘and part of a building’.

Such an approach, their Honours found, would be consistent with the principles summarised in Clare v Bedelis and avoided a technical or legal approach.

The tantalising point made in the VLRC report about jurisdiction was not taken and will need to be fought another day:

6.43 If, as we maintain, statutory restrictions are not restrictive covenants, they are enforceable under administrative law rather than as property rights. Administrative law is the branch of public law that regulates the exercise of public powers and duties. Statutory duties and restrictions can be enforced by obtaining an injunction or declaration by a court. The Attorney-General has the right to enforce the public interest in the observance of a statutory duty or a restriction, and can apply to a court for an injunction or declaration or authorise somebody else to do it.