Process for a s84 application to vary or remove a restrictive covenant.
Ordinarily, s84(1)(c) provides the broadest scope to modify or remove a covenant where discretion and is the only ground required. Property Law Act ss84(1)(a) and (c):
The Court shall have power … to discharge or modify any such restriction (subject or not to the payment by the applicant of compensation to any person suffering loss in consequence of the order) upon being satisfied:
• that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Court deems material the restriction ought to be deemed obsolete or that the continued existence thereof would impede the reasonable user of the land without securing practical benefits to other persons or (as the case may be) would unless • that the proposed discharge or modification will not substantially injure the persons entitled to the benefit of the restriction…
To remove or modify a covenant in the Supreme Court starts with an Originating Motion setting out the orders sought along with an affidavit in support. The first hearing will ordinarily be heard without opposition so no summons is required.
• You must provide the Court with evidence about who enjoys the benefit and the burden of the covenant through a colour coded cadastral plan obtained from a professional title searching service along with the essential circumstances of the application.
• If a particular form of development is sought to be achieved this should be included in this affidavit or in the report of the planner which supports the application.
Once this information is obtained then you provide it to a town planner for the preparation of a planning report.
• A planning report is ordinarily sufficient substantive evidence in support of an application to modify or remove a covenant provided it covers the key issues raised in the application, for instance, addressing any injury that might be said to be substantial under s84(1)(c) of the Property Law Act 1958. Planning evidence must deal with the question of proving there will be no substantial injury to those who benefit from the Covenant; achieved by evidence from the planner but also some plans setting out the kind of building envelope that is being proposed.
The first hearing normally has no opposition and the Court makes orders including a direction for a sign on the land, a notice to the most proximate beneficiaries and an indicative plan of the proposal attached to the advertising notice.
• You must provide the Court with evidence about who enjoys the benefit and the burden of the covenant through a colour coded cadastral plan obtained from a professional title searching service along with the essential circumstances of the application.
The second return occurs once the advertising has concluded and the Court is provided an affidavit what was done during the advertising period and if there were any responses received and if any beneficiaries objected.
• If there is opposition then the Court will make orders for filing of any evidence and the listing the matter for a contested hearing. Sometimes the practitioner can arrange a mediation if the parties are amicable to settlement. Having said that with the multiplicity of parties and their often divergent views, cases such as this are ordinarily not set down for mediation, although negotiation often occurs at the first return of the application.
• If the second return is not opposed and no person appears as a defendant then often the Court will require submissions to ensure compliance with s84(1)(c) of the Property Law Act. Although the absence of objectors is not the test the Court will consider it may assist the Court to have greater assurance in a decision. The Property Law Act says a Court might discharge that obligation or modify it if doing so will not cause substantial injury to those benefiting from the covenant. Further the Court would want draft orders with an affidavit to that effect.
The range of modification supported depends on it being proven to the Court the modification or removal will not occasion substantial injury to beneficiaries in the terms meant by s84(1)(c) of the Property Law Act 1958.
• If there is a contested hearing the outline of argument and submissions in support of a modification/removal application must be substantial.
• The test for contested modifications of Covenants is the so-called “substantial injury” test includes the relevance of planning controls in cases to modify covenants pursuant to the Property Law Act 1958 to assist in the determination of amenity impacts and harm to the beneficiaries.
• If you wish to object to a modification/removal restrictive covenant and you benefit from it and find out through direct mail out from the applicant or advertising then you must write an objection and appear at the second return hearing. If you are not a beneficiary then it will be difficult to establish standing with the Court to become a party; the best way to establish your position is obtain a colour coded cadastral plan obtained from a professional title searching service.
• Any argument you have against the modification/removal will need to be based around any the evidence made pursuant to s84(1)(c) of the Property Law Act 1958 and the so-called “substantial injury” test.
• It is likely those opposing the modification/removal will need to appear in the Supreme Court to support their objection.
Ordinarily in contested restrictive covenant cases and pursuant to section 84 of the Property Law Act 1958 defendants are entitled to their standard costs, even if they lose the contested proceedings. Although it is worth applicants filing offers of compromise prior to the final hearing in the hope it may impact an objectors mind set. There is no guarantee that an applicant will obtain costs even if successful in the final hearing and there is an offer of compromise served.
Daniel Epstein of Counsel
