1. Part of Council's refusal of this application derived from a concern that the amenity of adjoining residential properties will be unreasonably impacted due to inadequate setbacks. In particular these impacts are a loss of daylight, sunlight and outlook from adjoining dwellings to the north across the site.
2. A number of owners of dwellings within 401 St Kilda Road oppose the development. Mr Pitt made submission on their behalf that the loss of daylight, sunlight and outlook was unacceptable. In doing so he called evidence of Dr Greenup who identified that natural daylight and direct sunlight would be reduced into bedrooms of the adjoining development to the north. Mr Pitt submitted that the site is not in a high scale commercial centre where amenity impacts on outlook, sunlight and daylight should be compromised. He submitted that adequate daylight should be maintained to affected dwellings between levels 1 to 4 of 401 St Kilda Road. Mr Pitt submitted that there should be no loss of daylight to the south facing rooms of 401 St Kilda Road, as a number of these rooms already have a less than ideal aspect and provision of natural daylight.
3. Any development on the review site will impact on adjoining properties. The test is whether the impact is reasonable. In the case before us, the reasonable amenity expectations of the adjoining property at 401 St Kilda Road need to be considered in context of the physical and policy setting of the site.

1. The site is located in a Commercial 1 Zone where a range of activities are expected with "residential uses at densities complementary to the role and scale of the commercial centre". Amenity expectations for sites within this Commercial 1 Zone area need to be read in context of the existing built form scale and role of the centre as part of the St Kilda Road residential and business environs.
2. The zone does not include any specific decision guidelines to address amenity between sites that are both within the Commercial 1 Zone, other than having regard to Clause 55 where a building is less than five storeys high. It is therefore the general decision guidelines of Clause 65 that direct a need to consider the impacts on amenity, along with local and State policy to maintain reasonable amenity to existing sites.
3. State policy at Clause 15.01 requires consideration of the Guidelines for Higher Density Residential Development (GHDRD). Mr Clarke referred to these guidelines, commenting that design suggestion 2.6.2 seeks to maintain sunlight and daylight access to adjoining private open spaces of developments and design suggestion 2.6.3 seeks to provide space between taller buildings to allow outlook, daylight access and privacy for residents. The guidelines then direct that development should demonstrate design initiatives to optimise daylight access into interiors of new and existing dwellings, and call for the design of new buildings to respond to the placement of adjoining windows. These design suggestions sit under an objective "To ensure areas can develop with an equitable access to outlook and sunlight".
4. Mr Clarke also drew reference to the environmental sustainability policies of Council in Clause 21.06 and a growing perception within the community to achieve greater sustainable design, as is demonstrated in new policies introduced into other planning schemes, such within the Cities of Port Phillip and Yarra.
5. We must assess the proposal against the Melbourne Planning Scheme. We therefore do not give the policies of other planning schemes any weight in our consideration. Policy at Clause 21.06-3 of the Melbourne Planning Scheme broadly seeks to encourage environmentally sustainable building design innovation, but does not direct any specific measures for this.
6. No evidence was put to us that the existing building at 401 St Kilda Road was designed to achieve a particular environmental 'best practice' standard that will be compromised as a result of the proposal. The findings of Dr Greenup are based on whether each of the affected bedrooms within the existing development at 401 St Kilda Road achieve an 'acceptable' benchmark of 0.5% average daylight factor or a 'best practice' benchmark of 1.0% average daylight factor. These benchmarks are measures created by Dr Greenup. He stated they had been used in a number of previous Tribunal cases, but they are not the measures used in the alternative benchmarks referred to by Mr Clarke in assessing best practice[8].
7. The benchmarks used in Dr Greenup's evidence are also different to those he has used in other Tribunal cases where he has assessed a building as a whole. In other cases, such as in SPEC Property Developments Pty Ltd v Boroondara CC[9], Dr Greenup's measures are identified as follows:

[57] For daylight access, Dr Greenup proposes the following criteria:

1. At least 90% of living rooms and bedrooms (considered collectively) should achieve average daylight factors[10] of 0.5% for bedrooms and 1.0% for living rooms;
2. At least 80% of living rooms should achieve an average daylight factor of 1%; and

1. At least 80% of bedrooms should achieve an average daylight factor of 0.5%.

1. Both the Built Environment Sustainability Scorecard (BESS) and Dr Greenup's 'best practice' measures used in other cases address a building as a whole. We are not convinced that maintaining reasonable amenity to individual bedrooms can be assessed against the 'best practice' criteria proposed by Dr Greenup in his evidence to us, when this is normally associated as part of an assessment of all rooms in a building to determine if the building as a whole provides a sustainable design outcome.
2. We consider the crux of the case before us is about whether reasonable internal amenity is maintained to adjoining individual rooms, not whether sustainable design 'best practice' can or should be achieved for a neighbouring building. We therefore consider the important test is whether the bedrooms maintain acceptable daylight based on the information before us and the provisions of the planning scheme.

1. Within the affected property at 401 St Kilda Road there are eight dwellings that have windows that will be directly impacted by the development. These are bedroom and study windows of dwellings 103, 104, 203, 204, 303, 304, 403 and 404 of this building.
2. Dwellings 103, 203, 303 and 403 have their main living and balcony area facing Arnold Street to the east. Dwellings 104, 204, 304 and 404 have their main living and balcony areas facing west toward St Kilda Road. The main living and balcony areas of all the directly interfacing apartments are not impacted by the proposal.
3. Each of the impacted dwellings has at least three bedrooms (some also have studies). Most of these bedrooms have their sole outlook and daylight accessed from the south side, across the review site and a rear, four metre wide access lane. Some of these bedrooms are large, including some master bedrooms that are over eight metres deep. The southern form of the building at 401 St Kilda Road includes curved balcony areas that overhang these bedrooms. They also have tinted glass and hedges on the edges of balconies. Combining the depth of these rooms, their south orientation to the review site or laneway, along with the overhang and hedging of balcony areas all leads to an existing context that reduces daylight into these bedrooms.

1. There are no quantifiable tests in the Melbourne Planning Scheme to determine what is an acceptable standard (or best practice) for daylight. There is therefore no specific measure of what is a reasonable loss of daylight and sunlight into existing dwellings, particularly when it is development above four storeys.
2. Mr Pitt relied on evidence of Dr Greenup that the access to direct sunlight and daylight to the bedroom windows would be diminished, with some diminished below what Dr Greenup described as an acceptable standard. His evidence was that a number of the rooms were already below what he considered was an acceptable daylight standard. Mr Pitt's submission was that Dr Greenup's evidence should guide our decision making, as it was the only evidence led in the hearing on this issue.
3. There are number of cases where maintaining reasonable or acceptable daylight into existing dwellings has been assessed by the Tribunal. In Highbury Venture Pty Ltd v Melbourne CC, the physical context of the site and the affected dwellings was discussed by the Tribunal. As that Tribunal commented:

... the difficulty with assessing amenity based on daylight is that the amenity is based on a transient condition. In our view, to attempt to quantify or codify what forms reasonable amenity at anything other than at the broadest levels will be difficult[11].

1. In that case the impact on adjoining dwellings was exacerbated because of the single orientation and size of adjoining dwellings. These were identified in Highbury Venture as "small one bedroom dwellings". The Tribunal went on to comment that:

In the case of the small apartments in Wills Court, there are few alternatives or opportunities to change behaviours or adapt to reduced daylight conditions because of the constrained size_[12]_.

1. We also find it useful to reiterate findings of Highbury Venture that:

[136] A quantitative assessment of daylight factors and daylight amenity are useful inputs to our consideration of amenity but they are not determinative.

[137] In assessing amenity, qualitative judgements are required mindful of factors such as the size, layout and orientation of the adjacent existing dwellings including their balconies and the degree and type of change in amenity that can be determined or expected.

1. We concur with these findings of the Tribunal in Highbury Venture. While the evidence of Dr Greenup provides some guide, it is not a definitive numeric test by which we consider we can deem the impact on the adjoining development reasonable or not. We also note that his model and 'acceptable' benchmarks are his own invention, and not identified in the best practice guidelines adopted by him in other cases, or by other Councils[13] to which Mr Clarke referred to in his discussion of policy context.
2. The measure used by Dr Greenup is that for a bedroom to be deemed to have 'acceptable' daylight, it should achieve a 0.5% daylight factor, averaged across the room. On a dull day in Melbourne, this is an average daylight factor over 50 lux, or 0.5% of 10,000 lux[14], across the room. To give some understanding of what this means, we note that Australian Standard AS1680.2.0-1990 recommends at least 40 lux for circulation spaces and stairs. A higher lux level of 160 lux is recommended for kitchen and working areas, with 240 lux recommended for homework or sustained reading[15].
3. The numerical assessment of Dr Greenup against his 'acceptable' benchmark as detailed in Table 1 below indicates that there are currently two bedrooms of the 25 bedrooms assessed that do not meet this benchmark. A further four will not meet it with the proposed development. Of these, two drop to only just below 0.5% (being the master bedroom of dwelling 104 and bedroom 2 of dwelling 304).

Table 1 - Average daylight factors to rooms of 401 St Kilda Road, as extracted from Page 13 of Dr Greenup's evidence.

1. As a percentage of the south facing dwellings, currently 8% do not meet Dr Greenup's acceptable standard. This will rise to 24% with the proposed development. Put another way, 76% of bedrooms on the south side the lower part of the apartment building will maintain acceptable daylight based on Dr Greenup's numeric. All apartments will maintain at least one bedroom with acceptable daylight under Dr Greenup's benchmark.
2. Dr Greenup also acknowledged that some of his modelling had potentially underestimated the existing and proposed daylight access due to errors in the model. This particularly impacted daylight to the master bedroom of dwelling 103 because he had assumed there was screening to the west side of the balcony, when there is not. We also note that the master bedroom in dwelling 103 is generally orientated to the south toward 405 St Kilda Road and is over eight metres from the rear, north western boundary of the review site. The proposed building is not particularly close to this bedroom, relative to its existing interface to the building at 405 St Kilda Road.
3. Dr Greenup accepted that the daylight to bedroom 3 of dwellings 104 and 204 was potentially better than modelled as the model had assumed a wing wall shown on the endorsed plans provided to him that was not constructed, as we identified on our inspection.
4. Dr Greenup agreed that in some rooms, notably the larger, deeper master bedrooms, the daylight readings are lower, simply because the floor area is larger. In these rooms the area near the window may have a daylight factor of over 1.0%, but more than half of the room is less than 0.5%. This explains why, for example the existing average daylight factor to adjoining bedrooms 1 and 2 of apartment 104 are 1.16% and 2.32% respectively. Dr Greenup acknowledged that the master bedroom average is lower most likely because it is over eight metres deep from the window line, yet bedroom 2 is only approximately 3 metres deep. Therefore the extent of daylight deep into the master bedroom is poor. Dr Greenup's evidence did not map how daylight was measured across the room and therefore if the average represents a small bright area in one part of the room, with poor daylight in the remainder of the room, or an overall slightly under average light into the room as a whole, with much of the room being acceptable by his standards.
5. This leaves us with a number of unknowns as to what the qualitative impact is of the reduction in average daylight across the room and therefore the impact on usability and liveability of a bedroom, that is principally used for sleeping. We accept that some of these rooms may be used as studies or secondary living spaces. Indeed our inspection of a number of these dwellings was that some are used as studies. Some master bedrooms also have seating near the windows.
6. Mr Clarke sought to use a more rudimentary approach to determining if the space between buildings was acceptable, based on the tests used for buildings less than five storeys[16], noting that this building is six storeys. With the findings we have made about building height from the street and that one level should be removed, it is worth noting that with this, the adjoining levels 1 to 4 of the building forms (above the joined ground levels) become (effectively) four storey with the adjoining wall opposite at 401 St Kilda Road 12 metres high (based on the scaled plans tabled by Mr Bastone at the hearing). At this height the proposed buildings are separated by over 6 metres and therefore would comply with the standard in Clause 55.04-3 that has an objective to allow adequate daylight into existing habitable room windows.
7. Unlike other cases about daylight (such as Highbury Venture), there are alternatives for residents of 401 St Kilda Road to obtain good daylight within their dwellings if they want or need it. This includes the large living areas that face east or west. The bedrooms are also located to a side, south facing boundary in a Commercial 1 Zone.
8. The impacts on 401 St Kilda Road also largely arise from the design of its own building, including the orientation of bedrooms to an adjoining commercially zoned site, the depth of the rooms, (particularly the large master bedrooms), use of overhanging balconies on a south facing building and use of hedge and screening. In equitable development terms we consider the proposal has met its obligations to maintain reasonable amenity to this existing building in terms of daylight. Changes to the building we consider necessary to address streetscape issues (as we have determined above) should further reduce any impact to the adjoining property from loss of daylight due to the loss of the upper level of the proposed building.

1. Dr Greenup's evidence modelled the likely loss of direct sunlight into bedrooms affected and measured this against his own benchmark that "acceptable sunlight access" is when "living rooms have access to direct sunlight for at least two hours per day for at least six months of the year". He identified "Best Practice" is for living rooms to receive a minimum of three hours of direct sunlight between 9 am and 3pm in mid winter.
2. The best practice benchmark is that used in BESS. The acceptable benchmark is an invention of Dr Greenup. Both relate to living rooms. The impacted rooms are all bedrooms and studies. Dr Greenup acknowledged he did not consider the studies to be living spaces.
3. The proposal will reduce what limited direct sunlight occurs into the bedrooms. However, there is no test, either based on industry best practice or Dr Greenup's acceptable tests to indicate that direct sunlight into bedrooms is critical to maintaining reasonable amenity to the affected dwellings. These dwellings have other sources of direct sunlight into their main living spaces that face to St Kilda Road or Arnold Street. We are satisfied that based on the tests of the planning scheme, and even the tests for best practice, the affected dwellings at 401 St Kilda Road maintain reasonable access to direct sunlight.
4. We also consider the loss of outlook from the adjoining bedrooms in 401 St Kilda Road is reasonable. The proposed building will be separated by at least six metres to the window line of the existing bedrooms. We again reiterate that this is a side boundary of an existing four storey podium form of a building in a Commercial 1 Zone in St Kilda Road, Melbourne. This existing building is set back a minimum of three metres from the window line to the boundary. We find the proposed three metre minimum setback, thereby creating a six metre separation distance from existing habitable windows, to proposed highlight windows is a reasonable amenity outcome for this context.

1. In the physical and policy context of this site we consider the proposal can maintain reasonable amenity to the existing adjoining development at 401 St Kilda Road. This is not to suggest that the amenity will remain the same, but that the loss of amenity is reasonable in this context.
2. In making this finding, we note that this loss of amenity will and can be further mitigated. Our findings on built form will reduce the overall height of the building by one storey. While we do not have a model of the outcome of this, the reduced height should result in some additional outlook, daylight and sunlight into the light court between buildings.
3. As we commented at the hearing, there also appears to be some screening provided to the balconies of dwellings in 401 St Kilda Road that appears unnecessary with the development that has now occurred at 405 St Kilda Road and is not necessary for the maintenance of reasonable amenity to 403 St Kilda Road. Most notable is the heavy black privacy screen to the south boundary of dwelling 104 that also impacts on bedroom 3 of dwelling 103 within 401 St Kilda Road. Dr Greenup acknowledged that this screening was included in his model (and indeed extended further in the model than exists on site) and reduced the available daylight into existing rooms of the first floor.
4. It is open to the owners of these dwellings to seek an amendment to the permit for 401 St Kilda Road to remove this screening. This is a matter for the owners of these dwellings to consider and not for us to conclude is acceptable. We simply note that based on the material provided to us, we are unable to ascertain the need for this screening with the construction of the proposed development at 403 St Kilda Road.

1. For the reasons explained above, we find there is a need to amend the building height and presentation to St Kilda Road. We have determined to issue an interim order to invite the Applicant to respond to our concerns through the submission of amended plans. The plans should identify:

1. The removal of the fifth floor as currently depicted on TP04c Amendment A. 2. On the fourth floor, reduction of the size of Apartment 7 to provide a five metre setback from the site frontage to the living and dining area and the balcony relocated, so as to form a similar setback and balcony configuration to that provided for Apartment 9 in the application plans.

1. A revised material selection for the new building form to provide a 'warmer' tone of colours, more consistent with the heritage advice of Ms White to use lighter coloured materials which would tone with the render and better complement the red brick of the heritage buildings.

1. Details of restoration works proposed to the ground floor of the existing building façade. This should include any need to amend or supplement the balustrades to accord with current building code requirements.
2. We have provided the Applicant with the opportunity to present these amended plans upon which we can make a final determination. If the Applicant does not wish to amend the plans we will order that no permit be issued.
3. We emphasise that this interim order provides the opportunity to depict on plan the changes we consider necessary to this proposal. It is not an opportunity for further changes (other than consequential changes) to be made to the design.
4. The next step is to ascertain whether the Applicant wishes to take up the opportunity and, if so, how long it will need to prepare amended plans. If the Applicant advises that it does wish to take up the opportunity we will issue further directions:

1. Requiring amended plans, a written explanation of the amendments made and any other supporting material necessary to be served on the Tribunal, the Council and the Respondents. 2. Providing an opportunity for the Council and the Respondents to make further written submissions on the proposed amendments (only).

1. Requiring all parties to advise in writing if they wish the Tribunal to convene a further hearing and, if so, why.
2. Upon receipt of the amended plans and any relevant supporting material, and all further written submissions, we will then determine if a further hearing is required or if we will finalise our determination based on written submissions to the amended plans.

[1] We have considered the submissions of all the parties that appeared, all the written and oral evidence, all the exhibits tendered by the parties, and all the statements of grounds filed. We do not recite or refer to all of the contents of those documents in these reasons.

[2] Measurements taken from plans provided by the applicant at the hearing.

[3] For example see Ashlyn Enterprises Pty Ltd v Yarra CC [2003] VCAT 87 and SMA Projects Australia Pty Ltd v Yarra CC [2015] VCAT 613.

[4] Boroondara CC v 1045 Bourke Road Pty Ltd [2015] VSCA paragraph 37 of Warren CJ.

[5] Based on context plans provided to us by parties.

[6] The six levels behind the hospital building is set back 15 to 20 metres from St Kilda Road. The top three levels of 401 St Kilda Road are set back 10 metres from St Kilda Road with some balcony protrusion to 7.5 metres from St Kilda Road.

[7] To the top of level six, not the roof screen.

[8] Being BESS and Greenstar. The indoor environmental quality (IEQ) section of BESS, as provided to us by Mr Bisset, directs that 80% of dwellings in a new development should achieve a 0.5% minimum daylight factor for 90% of the floor area of bedrooms. BESS also includes a "deemed to comply" measure that new development be set back 3 metres from a bedroom outlook to a boundary line for form up to 12 metres high and light wells to be a minimum of three metres wide and 9sqm in area. Our reading of BESS is that the proposed building would meet these "deemed to comply" measures.

[9] SPEC Property Developments Pty Ltd v Boroondara CC [2015] VCAT 1068.

[10] Dr Greenup's evidence explains that the daylight factor metric is the ratio between the amount of daylight available at a selected location to that available at an unobstructed location, under an overcast sky condition. The example given is: at a position with a 1% daylight factor, where the external unobstructed overcast sky provides 10,000 lux, that position receives 1% x10,000 lux = 100 lux of daylight illumination.

[11] Paragraph 120 Highbury Venture Pty Ltd v Melbourne CC [2013] VCAT 2094.

[12] Paragraph 120 Highbury Venture Pty Ltd v Melbourne CC.

[13] It is BESS that is identified as best practice in policies that now apply in Port Phillip and Yarra Councils as referred to by parties at the hearing.

[14] Which is the average external daylight.

[15] As referenced from Irwinconsult Daylight report dated 9 April 2015 that formed part of the application material to Council.

[16] Being Clause 55, which is also referred to in the Commercial 1 Zone as the relevant guideline test for buildings of four storeys or less.