To the best of my knowledge there is no settled authority on the question of whether a negotiated agreement to amend a covenant becomes the new comparator or floor, for the determination of substantial injury in section 84(1)(c).

This is of particular significance to parties negotiating an amendment to a covenant prior to the land being sold. In practical terms, beneficiaries are entitled to ask: “what’s to stop the purchaser having another go at this, but using the negotiated agreement as the basis for determining substantial injury under section 84(1)(c) of the Property Law Act 1958?”

This challenge was met with the inclusion of the following words in paragraph H of other matters in Re Natwes in the draft consent terms provided for the court’s consideration: “In compromising the proceeding, the parties agree that the modifications set out in this order (Agreed Modifications) will not result in substantial injury but acknowledge that any further modification, however minor, may result in a substantial injury to the beneficiaries having regard to the protections afforded by the Covenants in their original form.”