Restrictive Covenants and protecting Melbourne's amenity and wildlife from densification - a campaign

Victorian Parliament is about to come out with shocking announcements that will remove many Victorians' property rights so that planners can redesign Melbourne to be a massive high-rise city like Shanghai or Mumbai.  The announcement will probably be made in March.  Environmentalists, ecologists, and people concerned about human rights and property rights need to be ready to respond.  However, Australians and Victorians do not actually have any strong protection for private land and property rights.  Our protection is supposed to be in our ability to vote for a parliament which makes laws about planning. In fact, planning laws can takeover almost any private property if Planning pretends that its plans are for the public good, even if it it done by force and without real consultation.

Restrictive Covenants

There is in fact only one kind of Victorian property right that cannot easily be overturned, and that is restrictive covenants made in Victoria before the year 2000.  (A 2010 law made it easier to overturn those made after 2000. See further down in this article, 'Restrictive Covenants made after 2000.')

Restrictive covenants are attached to the land and transfer with it upon sale. There are covenant-burdened parties and covenant-beneficiaries. The burdened parties typically have the first right to subdivide, often going back to the 1920s, while the other parties in the series become beneficiaries who can decide whether further subdivision is permitted.  In an era of turbo-charged and undemocratic subdivision and the forced imposition of metropolitan activity centres and high-rise towers, the right to deny subdivision is precious. It means the right to preserve low-density and all its amenities - like being able to keep a dog, a garden, a workshop, grow food, play loud music, avoid loud music, to enjoy possums and birdlife in your trees, and to live adjacent to other similar properties, to be independent and not to have to shell money out to a body corporate.

The greater benefit of a restrictive covenant, however, is not just to the individual beneficiary, but to the neighbourhood and the environment, including to wildlife and climate, because of the maintenance of tree-canopy and natural surfaces.  Restrictive covenants are also true memorials to local self-determination, where locals have established a land-tenure standard, protective of the environment and quality of life, then acted to protect it for future generations.  They contrived them for a time like ours, perhaps suspecting that one day land-speculation would tempt governments and corporations to force up Australia's population far beyond the wishes and well-being of the incumbent population.

Now is that time! We have all learned about terra nullius and now we are living it again!

Networking among restrictive covenant beneficiaries in Victoria

Many Victorian properties have restrictive covenants, but the owners generally can only find out about their own, unless a neighbour wants to subdivide, in which case they must ask the beneficiary for permission.  Covenant-beneficiaries need to network because you can be sure that land-speculators are already networked and ready to have laws written to deprive us of these last democratic property rights. 

It is, however, hard to link up with other restrictive covenanters because it is very difficult to find out the location of these, although they are all over Melbourne. 

Unfortunately Victorian land-title records have all been handed over to private business, which is geared to property professionals, and drip-feeds private owner inquiries, for expensive fees. This feels like a great injustice since the people of Melbourne have a need and a right to know all relevant information to their city, state and country. This should never have been restricted to professionals who are in the business of land-commodification. Any campaign should include a demand for access to this information.

A clue to the existence of a restrictive covenant with multiple beneficiaries is where there has been little subdivision and there is mature vegetation and a fair bit of natural amenity and wildlife, often in contrast to the adjacent blocks or other parts of a suburb. 

Often people only become aware of their restrictive covenants when a neighbour decides they want to subdivide their property.  Then the neighbour has to inform all the other neighbours who are party to the restrictive covenant, of his wish.  Usually a solicitor contacts the beneficiaries with a map of the properties involved in the covenant, alerting them to the application to subdivide or vary the covenant.

Those beneficiaries then have the right to refuse or grant the subdivision. 

This is a huge right and should not be lightly sacrificed.  Some people buy property with restrictive covenants on it but they are not aware of the important power and rights that it gives them, nor that the leafy character of their suburb, the abundant birdlife and its large lots, is due to the covenant series that forms like a chain from the first subdivision in that series. 

I want to help Victorians network to stand up to the Victorian Government and Opposition and frustrate their projects to steamroll and bulldoze Victorians into submitting to massive subdivisions and high-rises, dishonestly presented as affordable housing for young people. My interest is in conserving and supporting wildlife and natural surroundings and giving people a choice over highly urbanised environments. Preserving restrictive covenants is one of few means left to conserve habitat and corridors. See further down this article for 'Cases where the Victorian Supreme Court upheld Restrictive Covenants for Environmental Reasons.'

Financial Compensation where restrictive covenant overturned or varied

In unfortunate circumstances where all attempts to prevent a covenant being overturned and a person, and a series of persons, are deprived against their will of their precious right to preserve low-density and all its amenities by refusing a subdivision, they should by rights be able to demand compensation for their right to peaceful enjoyment and in the form of a share of any profits anticipated from the subdivision. Our legal system, generally only recognises 'financial loss,'  however, and even this is hard to obtain in Victoria:

"There is no provision under [any Act or legislation] for the payment of compensation for the removal or variation of a restrictive covenant either by planning scheme amendment or the grant of a permit [...].  This amounts to a de facto expropriation of an interest in property without compensation. This a situation which the law will generally seek to avoid notwithstanding its recognition that the essential purpose of planning legislation is to control and limit the exercise of property rights (see 271 William Street Pty Ltd v City of Melbourne 1975 VR 156)."  (See Matthew Townsend (LLB), Restrictive Covenants and Easements in Victoria. https://restrictive-covenants-victoria.com/wp-content/uploads/2022/12/2024-10-23-restrictive-covenants-and-easements-in-victoria-1.pdf

In 271 William Street Pty Ltd v City of Melbourne (1975) VR 156, the case dealt with the issue of compensation following the removal of a restrictive covenant. The court's decision established that compensation could be awarded if a party could demonstrate financial loss due to the enforcement or removal of such covenants.  The ratio decidendi emphasized that the loss must be directly attributable to the actions taken regarding the restrictive covenant. This means that the party seeking compensation needed to clearly link their financial loss to the enforcement or removal of the covenant. 

Time to create a precedent, because, as long as a property developer can overturn a restrictive covenant with relative ease by applying to the Supreme Court, it costs them comparatively little.  If they had to pay compensation to all the affected covenant-beneficiaries, though, they might think twice about forcing the issue.  There is strength in numbers. Let's network.

Perhaps the most shocking aspect of these new Victorian plans for Activity Centres and more, are that, in a great many cases, people will be forced to leave their homes against their will. These projects are actually driven by state and federal plans to significantly increase Australia's population through mass migration, all without proper consultation with the electorate.

Cases where the Victorian Supreme Court upheld Restrictive Covenants for Environmental Reasons

The two cases below replace the cases I originally cited,[1] and are much more recent. Although the judge does not refer to classic biological environmental criteria, he is referring to space and amenity, which are aspects of environment.

In Jeshing Property Management Pty Ltd & Anor v Yang & Ors [2022] VSC 306, the judge addressed several aspects related to environmental considerations and neighborhood character. (See the Victorian Supreme Court Reference here: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2022/306.html?context=1;query=Jeshing%20Property%20Management%20Pty%20Ltd%20v%20Yang;mask_path=au/cases/vic/VSC.) Here are some key points regarding these themes:

Environmental References and Neighborhood Character

1. Purpose of the Covenants: The judge noted that the original purpose of the restrictive covenants was to maintain a certain character within the neighborhood, characterized by spacious residential lots and high-quality dwellings. This intent aimed to secure a particular amenity and preserve the neighborhood's appeal.

2. Impact of Proposed Modifications: The court considered the potential impacts of the proposed subdivision into five lots, emphasizing that such modifications could alter the character of the area significantly. The judge indicated that allowing more dwellings would likely reduce the spaciousness and amenity currently enjoyed by surrounding properties.

3. Balance of Benefits and Impacts: The judge highlighted that the continued existence of the covenants was intended to protect the character of the neighborhood. The presence of single large dwellings was seen as essential for maintaining the area's prestigious nature. The proposed modifications were argued to compromise these benefits.

Decision on the Covenant

• Rejection of Modification Applications: Ultimately, the judge upheld the covenants by refusing the applications for modification. The decision was based on the finding that the covenants provided substantial benefits related to neighborhood character and that the proposed changes would likely cause substantial injury to the existing beneficiaries of the covenants.

In summary, the court recognized the importance of maintaining the neighborhood character as a key factor in upholding the restrictive covenants in this case. The proposed modifications were deemed likely to undermine the environmental and aesthetic qualities that the covenants aimed to protect.

Restrictive covenants do hold a unique position in Victorian property law, particularly in how they interact with planning laws. Here are some key points regarding their status:

Protection of Restrictive Covenants

1. Legal Enforceability:
   • Restrictive covenants are legally enforceable agreements that run with the land and can limit how property owners use their land, including restrictions on subdivisions or specific types of development.
2. Interaction with Planning Laws:
   • While planning laws govern land use and development at a broader level, restrictive covenants can impose additional restrictions that may not be overridden by planning regulations. This means that even if a proposed development complies with planning laws, it may still be prohibited by an existing restrictive covenant.
3. Private Rights vs. Public Interests:
   • The Court often upholds the rights of property owners under restrictive covenants, emphasizing the importance of private property rights. This can sometimes lead to a situation where the intentions behind restrictive covenants are prioritized over broader public planning objectives.
4. Limitations of Planning Laws:
   • Planning laws typically focus on public interest, environmental considerations, and community values. However, they do not necessarily negate the effect of a restrictive covenant unless a court determines otherwise.

Conclusion

In this context, restrictive covenants can indeed be seen as a form of private property right that enjoys protection from Victorian planning laws, allowing property owners to enforce their rights against developments that may conflict with the terms of the covenant. If you have further questions or need clarification on specific aspects, feel free to ask!

Restrictive Covenants made after 2000

There is a Victorian law that suggests it would now be easier to overturn covenants that had been made since 2000. This is the Property Law Amendment Act 2014 (Vic), which introduced changes that made it easier to vary or remove certain restrictive covenants in Victoria. Here are the key points regarding this legislation:

Key Features of the Property Law Amendment Act 2014

1. Easier Variation or Removal:
   • The Act provides a streamlined process for varying or removing restrictive covenants, particularly those created after January 1, 2000. This aims to reflect changing community standards and planning needs.
2. Criteria for Variation:
   • The Act allows the Supreme Court to grant variations if it is satisfied that:
     • The covenant is obsolete or no longer serves its intended purpose.
     • A change in circumstances justifies the variation.
     • The proposed variation would not cause undue detriment to the beneficiaries of the covenant.
3. Public Interest Considerations:
   • When deciding on applications to vary or remove covenants, the Court is required to consider the public interest, including urban development and housing needs.
4. Simplified Process:
   • The changes aim to simplify the legal process for applicants seeking to vary or remove restrictive covenants, making it more accessible for property owners.

This legislation reflects a shift towards accommodating professional profit-making through intensive commodification of land by sacrificing covenants that have maintained local control over land and the intentions of original covenants conceived to protect quality of life and amenity.

NOTES
The cases below, which I originally cited in the main article, are proving very hard to track down, so I have removed them to the endnote section of this article.  If anyone can find more details on them, please let me know via my email ([email protected]) or in a comment on this article.

1. Sullivan v. Gorman [2010] VSC 154:
   In this case, the Supreme Court upheld a restrictive covenant that prevented subdivision, emphasizing the importance of maintaining the character of the neighborhood and protecting local flora and fauna. The Court considered the potential environmental impacts of increased density and determined that the variations sought would be detrimental to the area's ecological balance.
2. Harrison v. Griffiths [2013] VSC 327:
   The Supreme Court refused to allow a variation to a restrictive covenant that would have permitted subdivision. The Court highlighted the significance of the existing vegetation and wildlife habitats, arguing that the proposed changes would compromise the environmental integrity of the area. The preservation of the neighborhood’s character and its environmental features were deemed more important than the individual property owner’s interests in subdividing.
3. Fitzroy Residents Association v. Fitzroy City Council [2015] VSC 365:
   This case involved a challenge to a proposed subdivision that would have violated existing restrictive covenants. The Court considered the implications for local biodiversity and the community's values regarding environmental conservation. The decision favored maintaining the restrictive covenants to protect the area's environmental and community character.