1. Pursuant to clause 64 of schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), the permit application is amended by substituting for the permit application plans the following plans prepared by MK Design filed with the Tribunal:
   • Date: 21 January 2025
   • Plan references: TP-006-2025, Plans 01-19

1. In application P1042/2024 the decision of the responsible authority is set aside.
2. In planning permit application PLN23/0627 a permit is granted and directed to be issued for the land at 38 Neptune Street Richmond VIC 3121 in accordance with the endorsed plans and the conditions set out in Appendix A. The permit allows:

To extend one dwelling on a lot under 300 square metres.

To construct a building and construct or carry out works.

Partial demolition and construction of a two-storey addition to the rear of an existing dwelling.

Application under section 77 of the Planning and Environment Act 1987 (Vic) - to review the refusal to grant a permit.

Development Contributions Plan Overlay - Schedule 1 ('DCPO1')[1]

Clause 32.08-5 (GRZ2) - to extend one dwelling on a lot under 300 square metres.

Clause 43.01-1 (HO) - to partially demolish a building.

Clause 43.01-1 (HO) - to construct a building and construct or carry out works.

The subject site is on the western side of Neptune Street in Richmond just south of Bridge Road. It has an area of approximately 134 square metres and runs in an east - west alignment. The street frontage is 4.62 metres and the lot depth is 28.95 metres. The existing dwelling is one of a row of six relatively intact Victorian terraces and is contributory in the HO. Neptune Street is a relatively narrow two-way local access street. Development in the area is mixed use with commercial development in the Commercial 2 Zone on the east side of the street and residential development on generally small lots on the western side.

The Tribunal inspected the site and surrounds on an unaccompanied basis on 27 March 2025.

1. Christopher Gillett and Adam Jones ('the applicant') seek to demolish the rear of their property and construct a two-storey extension. An extract from the ground floor plan is shown in Figure 1.

1. The property is in the Heritage Overlay ('HO') and is one of a series of six single-storey Victorian terraces on this part of Neptune Street.
2. Yarra City Council ('Council') has refused a planning permit on the basis of non-compliance with elements of clause 54 in the Yarra Planning Scheme ('planning scheme').
3. Council is satisfied that the proposed development responds appropriately to the heritage values sought to be protected and does not object on heritage grounds. This is largely due to the extension being set back and of a height that it will not interrupt the heritage streetscape as shown in the northern elevation in Figure 2.

1. The key issue is whether the application achieves an acceptable planning outcome when viewed against the suite of relevant policies and controls in the planning scheme.

IS THE PROPOSAL AN ACCEPTABLE PLANNING OUTCOME?

1. The proposal is in a residential zone[3] and there was no dispute between the parties that the proposed residential extension is an acceptable use in principle in this location.
2. The existing Victorian terrace is contributory in the HO. Council submits that the proposal is an appropriate heritage response to the overlay and extensive policy in the planning scheme for heritage protection in this area. Council submits however, that:

Somewhat ironically by adopting an acceptable level of recessiveness from a heritage point of view this large double storey rear addition, places too much of a burden on the amenity of the property to the south at No. 36 Neptune St.[4]

1. Council's view is that there are a number of points of non-compliance with the standards in clause 54 One dwelling on a lot or a small second dwelling on a lot in the planning scheme.[5] Areas of non-compliance include side setbacks, walls on boundaries, daylight to windows and overshadowing of private open space.
2. In the hearing Council illustrated this by focusing on visual bulk and what it called the 'spaciousness' of the proposal and in particular shadow impacts on 40 Neptune Street to the south.
3. Council acknowledged that in dense inner-city locations meeting the standards is not always practical but considered that the proposal does not provide an acceptable balance between development and offsite amenity impacts.
4. The applicant identified previous decisions of the Tribunal that established:
   • Meeting the objectives in clause 54 is what is critical; compliance with the standards is not mandatory;[6]
   • When considering clause 54 non-compliance in a highly urbanised context, the amenity expectations of neighbours should be tempered to respond to that context.[7]
5. Here it submits that the proposal is an acceptable response to the physical context of the site, being part of a narrow row of heritage terraces. Compliance with the standards in clause 54 would result in a proposal that could be 'uninhabitable' if you were to, for example, increase side setbacks on a 4.62 metre wide lot.
6. The applicant submits that the approach to the extension is consistent with other recent approvals in the area including a two-storey extension at 34 Neptune Street.
7. The applicant's view is that the proposal is an acceptable planning outcome and meets the objectives of clause 54. In particular there will be adequate daylight and solar access to 40 Neptune Street in the context of this highly urbanised area and the tempered amenity expectations that flow.

1. This is a densely developed inner urban area. The row of 'cheek by jowl' heritage terraces fronting a narrow street with narrow rear lane access is typical of many of the historic suburbs near the Melbourne CBD including Richmond, Collingwood and Carlton. Backyards are very small and often with outbuildings or with outdoor covered open space.
2. These areas are frequently identified for redevelopment, and this can be seen widely in the area around 38 Neptune Street. It can be seen more immediately in the extension on 36 Neptune Street (part of this row of terraces) and the approved plans for 34 Neptune Street (a detached dwelling to the north).
3. I am not required to determine whether this is an ideal application; in the much-quoted words of Osborne J[8], I need to be satisfied that the permit will be a 'reasonably acceptable outcome' when considering the relevant matters in the planning scheme.
4. In this case the use is supported by the zone, being a residential use. The design responds to the heritage character sought to be protected by the HO and the resultant development will not be visible from Neptune Street. This will leave the row of heritage terraces undisturbed from the street, allowing the ongoing appreciation of the heritage fabric.
5. It follows that, in my view, the application is an acceptable response to relevant policy around settlement and heritage protection.
6. In relation to offsite amenity, I am satisfied that the departures from the standards in clause 54 are an acceptable outcome in this physical context. The need to be flexible with the application of the standards in a highly developed urban area is well established by the Tribunal and I am satisfied on the facts that this is one of those situations.
7. The side setbacks and walls on boundary (clauses 54.04-1 and 54.04-2) have similar objectives, being to respect existing or preferred neighbourhood character and limit amenity impacts on existing dwellings.
8. I consider character has been addressed in the response to heritage as outlined above in these reasons, and limiting amenity impacts on existing dwellings must be considered in the context of the lowered amenity expectations in such a densely developed area.
9. There is no dispute that there will be increased offsite amenity impacts, and particularly an increase in overshadowing to 40 Neptune Street. The shadow diagrams show a reduction in sunlight to the rear of 40 Neptune Street at different times, whilst there are still areas of sunlight generally to the rear of the open space for the property. The objective for overshadowing of private open space in clause 54 is that it must not be 'unreasonable'.
10. The objectives for allowing access to daylight for habitable rooms and north facing windows are put in terms of 'adequate' access. There are two north facing habitable widows in the rearward extension of 40 Neptune Street. These are likely to get a reduction in light as part of the proposal, but I note the upper level of the proposal has been set back to allow for a greater light penetration in this area.
11. For overshadowing and light access, I am satisfied that in the physical context of this narrow site in a densely developed area the clause 54 objectives are met to an appropriate level, and an acceptable planning outcome will result.
12. I note that the future development of 40 Neptune Street may be a relevant consideration as put in Di Mase v Yarra CC[9] but have not placed significant weight on that eventuality in my decision.

1. A draft without prejudice set of planning conditions were put forward by Council for consideration in the hearing. It was noted in the hearing that a number of the conditions were duplicated which has been rectified in Appendix A. The applicant otherwise did not object to, or seek to revise, the conditions.

1. I am required to consider the net community benefit in my decision in the terms of clause 71.02-3 in the planning scheme. In this case, in my view, the proposal with protection of heritage elements and an acceptable offsite amenity outcome in a dense inner urban context means the balance falls in favour of issuing a planning permit.
2. For the reasons given above, the decision of the responsible authority is set aside. A permit is granted subject to conditions.

To extend one dwelling on a lot under 300 square metres.

To construct a building and construct or carry out works.

1. Before the development commences, amended plans to the satisfaction of the Responsible Authority must be submitted to and approved by the Responsible Authority. When approved, the plans will be endorsed and will then form part of this permit. The plans must be drawn to scale with dimensions, and must be generally in accordance with the plans prepared by MK Design, TP-006-2025 Sheets 01-19, dated 21 January 2025, but modified to show:

(a) A roof demolition plan, clearly showing all areas of demolition.

(b) The material and finishes schedule updated to include colour imagery of each material and finish.

(c) All areas of permeable groundcover clearly annotated with type of finish (e.g. lawn, permeable pavers) and area in square metres which aligns with the development summary table figures.

1. The development as shown on the endorsed plans must not be altered (unless the Yarra Planning Scheme specifies that a permit is not required) without the prior written consent of the Responsible Authority.
2. Before the building is occupied, or by such later date as approved in writing by the Responsible Authority, all new on-boundary walls must be cleaned and finished to the satisfaction of the Responsible Authority.
3. Before the development is occupied, or by such later date as approved in writing by the Responsible Authority, all screening and other measures to prevent overlooking as shown on the endorsed plans must be installed to the satisfaction of the Responsible Authority. Once installed the screening and other measures must be maintained to the satisfaction of the Responsible Authority.
4. Before the building is occupied, or by such later date as approved in writing by the Responsible Authority, any damage to Council infrastructure resulting from the development must be reinstated:

(a) at the permit holder's cost; and

(b) to the satisfaction of the Responsible Authority.

1. Except with the prior written consent of the Responsible Authority, demolition or construction works must not be carried out:

(a) Monday-Friday (excluding public holidays) before 7 am or after 6 pm;

(b) Saturdays and public holidays (other than ANZAC Day, Christmas Day and Good Friday) before 9 am or after 3 pm; or

(c) Sundays, ANZAC Day, Christmas Day and Good Friday at any time.

(a) the development is not commenced within two years of the date of this permit; or

(b) the development is not completed within four years of the date of this permit.

In accordance with section 69 of the Planning and Environment Act 1987 (Vic) an application may be submitted to the responsible authority for an extension of the periods referred to in this condition.

[1] The number of dwellings is not increased so no development contribution is triggered.

[2] The submissions of the parties, supporting exhibits given at the hearing and the statements of grounds filed have all been considered in the determination of the proceeding. Not all of this material will be referred to in these reasons.

[3] At the time of hearing, it was known that Amendment VC267 would modify the zone purpose from 31 March 2025 from 'respecting' neighbourhood character to being 'responsive to' neighbourhood character. In this matter the parties agreed that this would have limited effect on my decision as neighbourhood character is primarily found in this area in the heritage fabric; heritage not being in dispute.

[4] The Tribunal presumed this to be a reference to No. 40 which is to the south.

[5] The Delegates Report of 9 August 2024 outlines in detail the assessment against clause 54 standards. The amended plans improved some of these elements but there are still significant areas of non-compliance with the standards in the clause.

[6] Red Star Beaumaris Pty Ltd v Bayside CC (Correction) [2015] VCAT 305 at [202].

[7] Crawford v Port Phillip CC [2018] VCAT 10 citing Fasso v Port Phillip CC [2017] VCAT 1438, Di Mase v Yarra CC [2009] VCAT 1222.

[8] Knox City Council v Tulcany Pty Ltd & Ors [2004] VSC 375 at [13].

[9] [2009] VCAT 1222 at [49].