If the Victorian government wants to find land for additional housing, it should consider limiting people from contracting out of the planning system.

At the moment, the provisions for removing restrictive covenants via the Planning and Environment Act 1987 barely move the needle on releasing land for housing burdened by single dwelling covenants. This is perhaps not surprising, for the legislation was never intended to be broad in its application. In introducting section 60(5) of that Act, the Minister for Planning explained:

The effect of the clause is that permits should be granted only for “dead wood” covenants if no owner benefitting from the covenant objects to its removal or variation. The alterative avenues to remove or vary a covenant remain in place, being applications to the Supreme Court under the Property Law Act 1958 and the preparation of a planning scheme amendment.

However, in exercising its discretion pursuant to section 84 of the Property Law Act 1958 the Supreme Court is largely if not wholly concerned with the potential impacts on the private property rights of beneficiaries. As explained by Mukhtar AsJ in Re DVC Management & Consulting Pty Ltd:

“Recent decisions of this Court have it that town planning principles and considerations are not relevant to the Court’s consideration of whether an applicant has established a ground under s 84: see Vrakas v Registrar of Titles and Prowse v Johnstone.”

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… Of course, if a covenant is removed or modified, disaffected neighbours may make later objections to the particular features of the proposed development to the planning authority on public planning grounds if and when a planning permit is sought.

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Furthermore, it may even be inadmissible to rely on historical materials to explain to the Court why a restrictive covenant were created in the first place.

Take, for instance, a subdivision in which a single dwelling covenant was imposed on 4,000sqm lots by reason of an absence of reticulated sewerage. Upon the arrival of a full suite of services, those lots may now be capable of supporting a significant increase in the number of homes.

However, the Supreme Court might not only be legally incapable of taking into account the public benefits of releasing land for housing, it might be unable to properly consider the reason for the covenant in the first place, unless that reason is expressly stated in the restriction. The court is more likely to infer from the instrument’s language that the intention of the single dwellling restriction was to “preserve the area in question … as an area of spacious homes and gardens”.

True it is, that covenants can be removed by way of planning scheme amendments, but this option is rarely used because of its expense and political risks. To succeed, an application will need the support of the local council and the relevant Minister at the time the amendment is both prepared and adopted. The last time I recall this option being used the Council Officer was said to have declared “We won’t be doing that again. The next time someone asks us to remove a restrictive covenant, we will tell them to go through the Supreme Court.”

The nuclear option is to simply amend the Planning and Environment Act 1987 to provide that to the extent of any inconsistency between a restrictive covenant and a planning scheme, the planning scheme should prevail.

But there no doubt other, more incremental means of releasing land for housing presently burdened by restrictive covenants.

This would still allow the consideration of matters such as the protection of neighbourhood character, but in the framework of a discussion centred on the concept of net community benefit.

At the moment, tens of thousands of hectares of land in Victoria, must be subject to single dwelling restrictive covenants, yet there is no readily available means of convincing a Court or Tribunal that that land could be better used in the interests of the broader Victorian community.