A developer may want to know whether a particular development proposal will comply with a restrictive covenant.

It might be a mistake to believe this power exists in section 84(2) of the Property Law Act 1958 that provides:

(2)     The Court shall have power on the application of any person interested—

(a)     to declare whether or not in any particular case any land is affected by a restriction imposed by any instrument; or

(b)     to declare what upon the true construction of any instrument purporting to impose a restriction is the nature and extent of the restriction thereby imposed and whether the same is enforceable and if so by whom.

In Prowse v Johnston[1] the plaintiff’s case was put first as a declaration application and as a modification application in the alternative:

21 … so far as declaratory relief is concerned, the plaintiff now seeks, in substance, a declaration that a development generally in accordance with the current architectural plans would not contravene that part of the restrictive covenant which prohibits the erection of more than one house on each of Lots 7 and 8. In the alternative, the plaintiff seeks an order under s 84(1)(a) or (c) of the Act modifying that particular restriction. Further, the plaintiff seeks an order under s 84(1)(a) or (c) modifying the restrictions relating to excavation, building materials, subdivision and frontages. Taken together, the modifications sought are modifications that would permit the construction of a building generally in accordance with the current architectural plans.

In that case, Cavanough J expressed reservations as to whether section 84(2) was capable of being used to determine a hypothetical question such as whether a building constructed in accordance with a given set of plans would satisfactorily comply with a restrictive covenant. His Honour therefore relied on the Court’s general jurisdiction to make a declaratory order:

26     As indicated above, the declaration is sought under s 84(2) of the Act or under the Court’s general or inherent jurisdiction and powers, including under s 36 of the Supreme Court Act 1986. It would necessarily be a declaration as to a situation or position that has not yet arisen, in that the development is merely proposed. It is very doubtful whether s 84(2) of the Act would authorise the Court to make a declaration of that kind. The plaintiff acknowledged this during oral submissions and thereafter placed principal reliance on the Court’s general or inherent jurisdiction. I accept that that jurisdiction may extend to future questions, and that it is available in this case. The jurisdiction is apparently no less ample than any jurisdiction under s 84(2) of the Act. So it is not necessary to decide finally whether jurisdiction under s 84(2) of the Act also exists.

In Stoops v Lefas, Cavanough J again discussed section 36 of the Supreme Court Act and Rule 23.05 of the Supreme Court Rules in this context:

17. …However, the claim which Mr Stoops wanted to be free to advance at trial, as set out in the originating motion, was a claim of an entirely theoretical or hypothetical nature. It did not involve any definite development proposal for the land. In fairness to him as an unrepresented litigant, I informed him that, in my view, the Court would probably not entertain such a claim in any event and that, if he wished to proceed, he would probably need to put forward a definite building proposal. I also expressed concern that his claim might in any event amount to a claim for a declaration as to a future matter; that, in those circumstances, s 84(2)(b) of the Property Law Act 1958 might not be applicable; and that he might need to rely on the Court’s general jurisdiction and powers to grant declarations. …I ordered…that by a specified time the plaintiff file and serve a further amended originating motion confining the proceeding to a claim for a declaration in respect of a clearly defined proposal for the land in question, such as the proposal the subject of the decision given by VCAT in 2003 in the matter referred to above, namely Stoops v Frankston City Council; and that the parties be prepared on 14 May 2015 to advance the cases which, if this proceeding were not stayed, they would respectively advance at the final hearing of the proceeding (as confined in accordance with my order)…

19. In his further amended originating motion filed on 15 April 2015, Mr Stoops duly invoked s 36 of the Supreme Court Act 1986 and Rule 23.05 of the Supreme Court (General Civil Procedure) Rules 2005 (as well as s 84(2)(b) of the Property Law Act 1958 ) in relation to his claim for a declaration in the contingent final hearing. He substituted for his theoretical or hypothetical claim a claim with respect to the very building proposal (and associated architects’ plans) which had been the subject of the application for review determined by VCAT in 2003. He exhibited the relevant plans to an affidavit of his own affirmed on 10 April 2015 and filed on 15 April 2015.

The Court’s general power to grant declaratory relief is discretionary, and requires a real question to be tried. Query whether a contradictor would be required in practice, or whether the Court would be satisfied with notice being first given to beneficiaries.

A plaintiff seeking a declaration that a particular development proposal complies with a covenant should therefore invoke the Court’s powers under section 36 of the Supreme Court Act 1986 (Vic) (Supreme Court Act) and rule 23.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Supreme Court Rules), which reads as follows:

23.05    Declaratory judgment

No proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the Court may make binding declarations of right whether or not any consequential relief is or could be claimed.

More generally, although plaintiffs are often tempted to run declarations as preliminary points, they are rarely short and sharp hearings, meaning that a failure in the declaration application can lead to litigation fatigue and the subsequent abandoning of an application. Far better then, in most cases, to run an application for declaration and an application for modification in the same hearing. As the adage goes “Most people who ask for a preliminary hearing on the separate question, eventually come to regret it.”

[1]              Prowse v Johnstone [2012] VSC 4.

[2]              [2016] VSC 350.

[3]              These rules were repealed and replaced in 2015. The current corresponding provision is in the same terms.

[4]              (1972) 126 CLR 297.

[5]              DPP v Frederico [2006] VSC 24.