Burns v Araghi [2006] NSWSC 687

New South Wales Supreme Court

CITATION : Burns v Araghi [2006] NSWSC 687 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 27 and 28 June 2006

JUDGMENT DATE : 28 June 2006

JURISDICTION : Equity Division

JUDGMENT OF : Windeyer J at 1

DECISION : Defendant to remove fixtures in breach of restrictive covenant

CATCHWORDS : REAL PROPERTY - restrictive covenants - covenant provided height restriction - privacy screen and hand rail above garage built higher than covenant height - screen and rail 'a building' under covenant - purpose of covenant to protect views collateral benefits as a result, impact of use of garage roof on persons having benefit

CASES CITED : Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR 55-116 Re Mason 78 WN (NSW) 925

Robert Ashley Burns (First Plaintiff/First Cross-Defendant) PARTIES : Leisel Mary Burns (Second Plaintiff/Second Cross-Defendant) Shirley Joy McLoughlin (Third Plaintiff/Third Cross-Defendant) Mehrodkht Araghi (Defendant/Cross-Claimant))

FILE NUMBER(S) : SC 4433 of 2004

COUNSEL : Mr J E Thompson (Plaintiffs/Cross-Defendants) Mr P Walsh (Defendant/Cross-Claimant)

SOLICITORS : P Dobrich & Co (Plaintiffs/Cross-Defendants) Hones Lawyers (Defendant/Cross-Claimant)

- 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

WEDNESDAY 28 JUNE 2006

4433/04 ROBERT ASHLEY BURNS & ORS v MEHRODKHT MOHAJER ARAGHI

JUDGMENT

1 HIS HONOUR: This is an application by the plaintiff for a mandatory order requiring the defendant to remove improvements or structures on her property, 16 Illawarra Road, Mosman, which it is accepted are erected in breach of a restrictive covenant. By way of answer to that, the defendant by cross-claim seeks an order that the covenant be modified so as to allow the structures which contravene the restrictive covenant to remain. 2 There has been some concession by the plaintiffs as to one of those structures which is a rail along a pathway and I would intend to modify the covenant so that the particular railing can remain. I should say that, having had a view of the relevant land, in my opinion that modification would not create any injury at all to the persons entitled to the benefit of the restrictive covenant. It is accepted that the pathway at its existing height, which gives foot access to the land of the defendants, should be allowed to remain, and it seems obvious enough, for general safety purposes, a railing would be necessary. No more need be said about that. 3 So that there is no undue suspense, I state now that in my view no further modification ought to be granted. 4 The plaintiffs, Mr and Mrs Burns, are the owners of property 53B Raglan Street, Mosman, and the plaintiff, Mrs McLoughlin, is the owner of property 53A Raglan Street, Mosman. Those properties are the land in folio identifier D/28358 and folio identifier B/28358, so far as the plaintiffs respectively are concerned, and Folio Identifier E/28358, so far as the defendant is concerned. 5 The land of each of the plaintiffs, and I should add also of those persons who are cross-defendants other than the plaintiffs, has the benefit of a covenant contained in transfer number H457937 under which the transferor, Mr Neville Ryrie, transferred to a purchaser, Bonney Posma Lot E in DP 28358. The covenant which was for the benefit of Lots A, D, and B in that deposited plan provided that any building erected on that part of Lot E edged in blue and marked B should not be 10 feet higher than the level of the land at point A and that any building erected on the land edged in red on the said plan not be higher than the level of the land at point A on the plan. That seems rather complicated but what it meant was, so far as the land burdened by the covenant was concerned, that the land closest to Illawarra Road as shown on that particular plan be burdened so that no building could be erected any higher than a point which was at the south-western corner of Lot E and that the land further to the north allowed a building to be 10 feet higher. It is accepted for this case that the relevant level at that point A is RL 39.95.A.H.D. 6 What has happened is that the defendant by way of substantial alterations and reconstruction of a dwelling on lot E has included as part of that construction a garage, the roof of which has now been covered with concrete and the sides of which are enclosed by a handrail which appears to be an iron handrail, presumably for safety purposes, and has erected a screen on the western side of that garage roof deck which is at a height of RL 41.2, the railing being at a height of RL 40.4. It follows from this, as it is not argued that these do not form part of the building, and I think that they obviously do, that both the rails and the screen have been erected in breach of the restrictive covenant. 7 It is I think proper to say that the defendant erected those structures and reconstructed the house in accordance with plans and specifications ultimately approved in the Land and Environment Court. The Mosman Council refused permission for the top of the garage to be used for, what might be described as, pedestrian access or traffic, but that restriction was overturned by the decision of the Land and Environment Court which allowed such use provided the screen was put in place. In other words, the plans to which the present structures have been put in place were ultimately approved and stand as an approval by the local council, the approval having been obtained through the Land & Environment Court process. That approval was ultimately obtained in February 2005. At the time it was obtained these proceedings had been commenced. They were commenced at least at the outset because there was a threat, and a real threat, that the roof of the main house, which the defendant proposed to build, would exceed the height allowed under the height covenant; that is no longer a problem and the new roof height does not exceed the covenant height. 8 It is however, relevant to this matter to restate that these proceedings were on foot prior to the plans being approved so far as the deck was concerned. According to the unchallenged evidence the defendant or her husband was advised by the assessor on site not to proceed until the position, so far as the covenant was concerned, was clarified. In other words, the defendant was aware when she built in accordance with the approved plans that unless she obtained an order for modification, then she was at least at risk of being found to have built in breach of the covenant and being required to remove whatever structures were erected in breach. 9 It is I think clear that the main purpose of the covenant was to protect the views of Little Sirius Cove and the harbour available from the land having the benefit of the covenant; an inspection at the site makes that clear. The evidence, including the view, also makes it clear that the structures as erected have no real impact upon that view. So far as Mrs McLoughlin is concerned, they have no impact at all, as she cannot see them. So far as Mr and Mrs Burns are concerned, the screen and the railings do not in any way interfere with the water views which their property enjoys at the present time. 10 What the plaintiffs, or at least Mr and Mrs Burns argue, is that the breach of covenant has enabled the defendant to use the roof of the garage as a deck which use would not have been available without the breach. They say that this results in a reduction of the amenities enjoyed by them because there is likely to be more movement and more noise which will impact on them through the ability of the defendant her family and visitors to enjoy the use of the garage roof area. They say that from their point of view this is a substantial detriment to their enjoyment and they say that the breach of covenant will enable the defendant and any visitors to her property not to overlook but look up on them in their use of their own property, albeit that the screen might to some extent prevent this. In other words, what is being claimed is that while the view is not impacted by the breach, other enjoyment and benefits available to them as a result of the covenant being in place are not available as a result of the breach. I consider that this is established and that even if it were not established that there was some economic loss to them by way of diminution of the value of their property as a result of the breach, that, nevertheless, the loss of enjoyment is an injury to them. I do not think that the defendant on the cross-claim seeking modification, who has the onus of establishing that the modification sought would not substantially injure the persons entitled to the benefit of the covenant has made out that claim or has discharged that onus. 11 The other relevant matter is the evidence of Mr McNeilly as to value. His evidence is that in considering these matters one looks at the property having the benefit of the covenant without infringement and the position with the current infringement. This was what he described as "with and without" basis. He said that the infringement would bring about a diminution in value of the property of Mr and Mrs Burns in the order of 3 to 5 per cent. That evidence was given not on the basis of comparable values in the area but on his general valuing experience. I accept the evidence that there would be some diminution in value, although it is very hard to quantify, and that is as far as it takes it. 12 It has been put that the result of this finding may be that the defendant will in some way reduce the roof height of the garage so as to enable that roof to be used in accordance with the current permission of the council: I think it could be accepted that if the level were lowered, then the council would permit the use in accordance with the existing decision of the Land & Environment Court which becomes the decision of council; that, however, is not really a question before the court at this stage. The court has no idea what action if any the defendant might decide to take if a mandatory order is made requiring removal of those structures erected in breach of the covenant - she may sell the property, she may decide to do nothing, or she may decide to alter the garage levels. In those circumstances future action is not something which in this case can be taken into account. What must be taken into account is that the modification would, in the words of the authorities, "cause injury of substance to the plaintiffs" as the persons, or, at least Mr and Mrs Burns as the persons, entitled to the benefit of the restriction. 13 It has next been argued by counsel for the defendant that this is not a case where the court should make a mandatory order. I accept that if a person owning land to which the benefit of a restrictive covenant is annexed stands by and allows work to take place in breach of that covenant, then the court may well be reluctant to grant a mandatory order requiring removal of the structures erected in breach; that, however, is not the case here. There is no doubt that the first approval which the defendant obtained from council did not authorise any use of the roof of the garage. There is no doubt that the defendant's husband, who seems to be in control of the proceedings, knew, and one must assume the defendant knew, that the plaintiffs were intending to stand upon their rights and maintain their rights under the covenant. There was, in fact, an injunction in place restraining the defendant from carrying out work in breach of the covenant. While I am not suggesting that the first defendant purposely acted in breach of that injunction, because there was some argument at one stage as to the level from which the covenant was to be measured, which has now disappeared for obvious reasons, the fact was that the work was done knowing of the risk. In those circumstances, the arguments which might otherwise have prevailed against the making of a mandatory order in this case, have no basis. 14 Because I decided that having come to a decision it was desirable to give it immediately, I have not referred in detail to the cases which support the conclusion to which I have come and which decide that the benefits obtained by a covenant extend beyond those benefits for which the covenant was most clearly put in place. Those cases include Re Mason 78 WN (NSW) 925, and in particular the decision of McLelland CJ in Eq in Mogensen v Portuland Developments Pty Ltd (1983) NSW ConvR 55-116. 15 In the circumstances, I conclude that the plaintiffs are entitled to a mandatory order for removal of those structures erected in breach of the covenant and that, therefore, the application by way of cross-claim for modification apart from the passageway railing should be dismissed. 16 I should add, by way of clarity, that the only relief sought by the cross-claimant under the amended cross-claim was that sought in paragraph 5, namely, for a modification, that modification subsequently expressed so as to allow the existing contravening structures to remain. The other claims as to enforceability or extinguishment were not pressed. 17 It is accepted that in places, the pedestrian pathway leading to the defendant's home is at RL 39.96. There is no objection by the plaintiffs to this. In those circumstances, I do not propose to make a special modification order for it, as it seems unnecessary and I think no court would grant an injunction to restrain that infringement breach. On any basis, the plaintiffs, having allowed it to remain in place, cannot themselves take any objection to it. 18 I make orders in accordance with the document initialled by me and dated today. Order the cross-claim be otherwise dismissed. Order the defendant/cross-claimant to pay the plaintiffs' costs of the proceedings including the cross-claim and any reserved costs. No order as to costs of the 4th, 5th, and 6th cross-defendants. The exhibits may be returned.