• Celtic Club, 316-322 Queen Street, Melbourne, 42 storey tower above a 3 storey heritage building.
• Charter House, 4-10 Bank Place, several levels above a 'B' graded building in a Level 2 streetscape.
• Corner Gipps and Nicholson Streets, Abbotsford, four floors inserted above a contributory building.[30]

1. A number of these approvals were the subject of Tribunal decisions, including cases we determined as parts of other divisions of the Tribunal. We have had the benefit of reading the decisions. We note neither the Celtic Club building nor the former Ivy Club development has yet been built. We were also referred to a current application before another division of the Tribunal relating to No. 1-5 Queens Street which, as far as we are aware, is yet to be determined. That involves a 'C' graded building on a corner with Flinders Street with setbacks from a retained façade to a tower.
2. We appreciate that there are completed developments and new proposals seeking to use airspace above heritage buildings. On our review, the examples do not show a particular theme per se but they do demonstrate that the higher the level of significance, the greater level of deference. Most involve several floors being added atop of heritage buildings. However, the heritage buildings have varying levels of building and streetscape significance and varying physical context while the new works have varying horizontal and vertical setbacks, and varying architectural treatments. This is not a particularly new approach; many developments of this kind can be seen in commercial and residential settings across Melbourne. The extent to which this type of new development is compatible with the identified heritage features of the place (be it an adjacent building, lane, streetscape or area) can only be assessed having regard to the characteristics and context of a specific site.
3. Larger and tower forms, such as the HWT, Celtic Club, 205-221 Pelham Street, Wills Street and 114-120 Russell Street, are less common. We note that, other than 114-120 Russell Street, all of the examples have horizontal setbacks (of varying distances) plus vertical separation (or varying heights) between the retained heritage fabric and tower insertion. They have varying factual circumstances relating to the following:
   • Varying corner and mid-block locations with consequentially different degrees of viewing in the round or in a 3 dimensional form;
   • Varying levels of exposure based on the different scale and prominence of intersections;
   • Varying levels of building and streetscape significance, and different reasons for their heritage significance.
   • Very different approaches to the design response having regard to the specific features of the host heritage building.
4. Further, the heritage host buildings in these cases maintain their discernible proportions and standing relative to the new form. None provide a precedent value that persuades us to depart from the conclusion we have reached that the proposed tower is unacceptable in its relationship with the retained 'B' grade bank building.
5. We note and agree with the Tribunal's comments in FJM relating to the four additional floors (surrounded by a mesh curtain) atop of the four storey warehouse (former Ivy nightclub):[31]

The strict geometry and self-effacing finishes give the building a severe modesty that responds and would be secondary to the exuberance of the host building. We are persuaded that the scale, massing, materials, bulk, form and appearance of the addition would not adversely affect the significance of the warehouse. We consider that with some increase in the setback and consequential reduction in the scale of the addition, the proposal has the potential to enhance both the building and this prominent corner in the CBD.

We do not accept Council's assertion that our approval of this proposal will "open the flood gates" and may have immense consequences with respect to infilling of the airspace above heritage buildings, such that the Melbourne CBD becomes a city like that envisaged in the film "Bladerunner". The planning scheme requires each proposal to be reviewed individually and on its merits. No two cases are alike.

1. The design proposal uses the retained heritage building to essentially provide a street wall or podium for the major part of the site. It does not provide the street setbacks proposed by Amendment C196 (whether the Panel or adopted versions), a matter commented upon in the Council's submission.
2. Policy, DDO61, and the proposed HO1124, expect a street wall that responds to the heritage form and Elizabeth Street streetscape. The "problem", however, is that approved building at No. 690-694 Elizabeth Street does not include a strong street wall. Instead, the street wall to Pelham Street wall adopts a subtle curve. Retention of the bank building with a new building setback vertically and horizontally presents an opportunity to maintain the pedestrian scale to the street and enhance Pelham and Elizabeth Streets.

1. We do not distinguish the bank as either a constraint or an opportunity. It is a significant handsome heritage structure, in good condition and with a high level of integrity, at least in terms of the external walls, occupying the land to which any new development must respond.
2. For the above reasons:
   • We have some concerns about the extent of demolition associated with the eastern walls of the bank.
   • We accept that works to restore the facades and the removal of the sky sign atop of the splay corner of the bank would assist to conserve and enhance the retained bank. These works can be documented and approved by way of a permit condition.
   • We do not consider the proposed tower inserted above and behind the retained form of the bank achieves an acceptable heritage outcome. It does not integrate the old and new in a manner that conserves and enhances the 'B' graded building. Rather, it dominates the host building in a manner that adversely affects the significance of the heritage place. It is inconsistent with the existing Scheme provisions and policies and directions being pursued through the City North Structure Plan.

DOES THE DESIGN RESPONSE ACHIEVE AN ACCEPTABLE OUTCOME IN TERMS OF DDO44?

Is the relationship between the proposed building and the Royal Elizabeth apartment building acceptable in urban design terms?

1. Relying on Dr Gunn's and Ms Heggen's evidence, which we do not recite, Mr Townshend submitted the additional height compared with the Royal Elizabeth apartment building will assist in emphasising the corner and entry to Elizabeth Street. In long views and arriving at the Haymarket, the sculptured tower with its sinuous corner spine treatment would certainly give the site more prominence and architectural interest. In closer views, the relationship between old and new will be visually interesting with the pillared cupola linking the heritage building and the tower. "In very close views, particularly for the pedestrian, the charm and character of the 1880's building will be appreciated and still read as a former bank but enlivened by the mixed uses including the café".
2. We appreciate that parties, including the permit applicant in the current case, were involved in negotiations leading to the final approval of the Royal Elizabeth apartment building. The reality is that the Royal Elizabeth apartment building borrows significantly from the subject land. It is built essentially to the common boundary along two sides of the site. It wraps around the bank site with facades to both Pelham and Elizabeth Streets. The façade curves in two directions with green, variously angled, balustrade elements that move with the façades. It presents an active façade to the subject land, rather than benign elevations (such as a wall or service core) waiting to be matched or met with a new building on the subject land. We say this because, even though corner units have their primarily outlook to Elizabeth or Pelham Streets, there is one, one bedroom, unit at each of Levels 2-18 that has a curved balcony viewing down the 2.7 metre wide lane abutting the eastern site boundary.[32]
3. We are not persuaded that the proposed tower form on the subject land achieves an acceptable urban design outcome. When viewed from a distance, such as along Flemington Road, the proposed building and Royal Elizabeth apartment building will appear together. The latter will frame the former and be appreciated as a background element. This is not particularly problematic in a distant view where there is a mix of high building forms seen together and the relationships or spacing between them is sometimes difficult to discern.
4. It is in closer views from the public realm that we find the bulk, location and appearance of the proposed building to be a discordant element by the way in which it is pressed up against the façade of the Royal Elizabeth apartment building.
5. Along the Elizabeth Street elevation, there is no breathing space or separation between the two towers. When viewed from either side of Elizabeth Street, the interface between the two buildings appears awkward and unresolved.
6. Along Pelham Street, a narrow lane separates a solid 70+ metre high wall from the curving façade of the Royal Elizabeth apartment building. The inappropriateness of this interface is accentuated by the very confusing architectural relationship between the two towers. They appear to be attached. They do not work together as a design response that is expected by Clause 43.02 because the proposed building would not be in keeping with the character and appearance of the adjacent building.
7. We do not repeat our earlier findings that are relevant to other DDO44 outcomes, such as the building's scale, its response to the Haymarket gateway and circus, and the role of dominant landmark buildings.

IS THE INTERNAL AMENITY OF ALL UNITS WITHIN THE PROPOSED DEVELOPMENT ACCEPTABLE?

1. The Council expressed concern about several elements of the internal layout of the residential tower. These matters included the use of winter gardens (which are now resolved by the substituted plans); the long light corridor to some bedrooms creating issues with respect to outlook, solar and daylight access; and some other details such as floor to ceiling heights.
2. We agree with some of these matters. That is particularly in relation to the long corridor providing light to the bedrooms of some units as well as the depth of these units where the kitchen is 6-10 metres from the windows.
3. We have considered plans tendered on the final hearing day that significantly improve upon the outcome by changing internal walls to bi-fold screens. This would open up the interior. However, the depth of these units with a single aspect, and internalised winter gardens, still limits solar access and ventilation opportunities. For a site that enjoys two street frontages and the corner, we believe a better outcome should be possible.

DOES THE DESIGN RESPONSE ACHIEVE AN ACCEPTABLE OUTCOME IN TERMS OF THE AMENITY OF ABUTTING DWELLINGS?

1. We have referred, above, to section 173 agreements relating to the land at No. 690-694 Elizabeth Street. In part, if a building is built within one metre of the boundary of No. 690-694 Elizabeth Street, affected windows are required to be covered by prescribed means within 12 months. There is also an acknowledgement that any future development at No. 708 Elizabeth Street will not be setback from the property boundary with No. 690-694 Elizabeth Street so as to provide for light or air or otherwise for the amenity of the dwellings at No. 690-694 Elizabeth Street.
2. Mr Townshend submitted that, as a party to the now-executed agreements, the City of Melbourne (and in turn the Tribunal) is bound by the law including legal agreements and permit conditions. On this basis, and other points made in his submission, he contended that it is unreasonable for the Council to ventilate issues relating to the impact of the proposal on the amenity of dwellings in the abutting property. Mr Townshend submitted the Tribunal should accept the evidence presented that the impacts on abutting dwellings are acceptable in the context of the policy, dwelling layouts and agreements that resolve the question of equity. It should also accept, he said, the consent position associated with the agreements. If, however, the Tribunal remains concerned, Mr Townshend submitted that the Tribunal should convene a directions hearing to consider the lawful status of the agreements and their effect on our decision in this proceeding. The questions of law were not finally framed but were indicated in Mr Townshend's written submission.
3. We accept that there was a consent position reached in other proceedings and that section 173 agreements foreshadow development abutting the land at No. 690-694 Elizabeth Street. However, from a purely merits perspective, we have significant concerns about the manner in which the proposed building addresses dwellings in the Royal Elizabeth apartment building:
   • First, the proposal introduces a 70+ metre boundary wall on the north side of the 2.3 metre wide by 3 metre deep light court in the Royal Elizabeth apartment building. This light court serves bedrooms in two separate apartments at each level. The most impacted dwellings are those at the curve of the façade that, with the proposed development, rely solely on an outlook down the 2.7 metre wide by 6+ metre[33] long laneway which will have 60 metre and 70+ metre walls on either side.
   • Second, the south-eastern corner wall of the proposed development abuts the tapering end of the balcony to those units just referred to and, behind that is a window serving the kitchen/open living/family room area. A plan produced by Mr Townshend on the last day of the hearing that cuts into the south-eastern wall by 600mm for a depth of 2.8 metres would improve upon the outcome.
   • Third, the outlook from west-facing apartments (family room window) into the blank eastern wall of the proposed building at a distance of 2.7 metres, although it is accepted that these 4 metre (approx.) wide rooms also have an alternative aspect to the north.
4. Given the conclusions set out in the earlier parts of this decision, we have not called a directions hearing to enable the applicant to pursue potential question/s of law. Even if Mr Townshend's submissions were determined to be correct after review of the questions of law by a legal practitioner, and it was found to not be open to us to assess this aspect of the merits of the permit application, our conclusion about the project would not change for the heritage and urban design reasons set out earlier. If there is any future application for the subject land, it would be appropriate for these questions of law to be fully articulated for consideration at a preliminary hearing or as part of the main hearing. They could be the subject of a declaration proceeding.

WHAT ABOUT OTHER RELEVANT PLANNING CONSIDERATIONS?

1. We have not found it necessary to address a number of planning considerations that are agreed between the parties including:
   • The contribution the project would make to housing in a location that has excellent access to public transport, services, medical and educational facilities, and is earmarked for more housing.
   • The amount of parking and requested reduction in parking under Clause 52.06.
   • The waiver of a loading bay under Clause 52.07.
   • The use of part of the ground floor for food and drink premises.
   • The manner in which the proposal addresses the public realm, mindful of the retention of the bank along both street frontages.
2. Suffice to say that these are positive elements that have been considered by us when reaching a final outcome as required by Clause 10.04.

1. For the reasons explained above, the decision of the responsible authority is affirmed.
2. We agree with Dr Gunn that the subject land is an unique opportunity to make a valuable contribution to one of Melbourne's gateways, building on the role played by the heritage building and the emerging built form character. The current proposal has not, in our view, successfully resolved this opportunity when taking into account the level of significance and integrity of the historic bank building and the design challenges provided by the new Royal Elizabeth apartments wrapping around the small site. These are both contextual considerations to which the proposal does not satisfactorily respond.
3. Thus, while we appreciate the beautiful and striking architectural composition that is offered by this application, our concerns about the proposal's heritage and urban design outcomes have caused us to refuse a permit, specifically because:
   • The marriage of the tower building and the retained sections of the bank overwhelm the heritage structure and do not integrate the new with the old in a manner sought by Clause 43.01 or local policy.
   • The relationship between the proposed development and the Royal Elizabeth apartment building, in that the two buildings appear to be attached and the proposed building presents a 70+ metre high blank wall within 2.7 metres of the north-western face of the Royal Elizabeth apartment building.

[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] Mr Townshend QC submitted this ground by Council raises a question of law, a matter to which we return to later in this decision.

[3] The visualisation we have shown is taken from the material provided to us and includes the development at No. 690-694 Elizabeth Street which is in construction (as we refer to in the next section of these reasons).

[4] This is recognised in the Scheme including DDO30.

[5] University of Melbourne v Minister for Planning [2011] VCAT 469.

[6] Vaughan Constructions Pty Ltd v Melbourne CC [2015] VCAT 364.

[7] Angel & Naggar Superannuation Fund v Melbourne CC [2014] VCAT 1445.

[8] No. 3-5 Bedford Street is within DDO32 and the Turf Club hotel is within DDO30. The Victorian Comprehensive Cancer Centre is not within a DDO and we were advised that no planning permit was required for this public building.

[9] Clause 21.04-1.3. 'City North' generally extends from immediately north of Victoria Street to Melbourne University between Peel Street and Swanston Street, as well as partially along Flemington Road, North Melbourne.

[14] DDO32 has a maximum of 14 metres and DDO30 has a discretionary maximum of 6 storeys.

[15] Three other built form outcomes relate to locations that are distant from the subject land and matters that do not have a bearing on the dispute before us.

1. [16] Clause 22.05 defines a 'B' grade as "'B' buildings are of regional or metropolitan significance, and stand as important milestones in the architectural development of the metropolis. Many will be either already included on, or recommended for inclusion on the Register of the National Estate". "Outstanding building means a grade A or B building anywhere in the municipality".
2. [17] Clause 22.05 defines a level 3 streetscape as "Level 3 streetscapes may contain significant buildings, but they will be from diverse periods or styles, and of low individual significance or integrity".

[18] We have not recited parts of these policies referring to adjoining heritage buildings because there are none. We have also not referred to "Concealment Of Higher Rear Parts (Including Additions)" because it is common ground that it is not reasonable to apply this policy in the context of this site. We refer below to the relevance of Clause 22.05 in the current situation, a matter upon which parties made submissions in the context of Amendments C196 and 198.

[19] We refer to the provisions of the Amendment below but have also considered the content of the Plan.

[20] This matter was also the subject of discussion in Vaughan Constructions Pty Ltd v Melbourne CC [2015] VCAT 364 at paragraph 14 referring to Angel & Naggar Superannuation Fund v Melbourne CC [2014] VCAT 1445.

[21] Lyndale & Black Pty Ltd & I O Black v MMBW 1 PABR 207.

[22] C196 Report dated 18 October 2013 at Section 7.1 and C198 Report dated 11 July 2014 at Section 4.9.

**[25] Paragraph 31 of the applicant's written submission.

[26] Staged Developments Australia Pty Ltd v Executive Director of Heritage Victoria, City of Melbourne and the National Trust (Vic) [2001] 8 VPR 131.**

[27] Vaughan Constructions Pty Ltd v Melbourne CC [2015] VCAT 364.

[28] Highbury Venture Pty Ltd v Melbourne CC [2013] VCAT 209. The image shown is not the approved form of the tower but gives an impression of the concept.

**[29] FJM Property Pty Ltd v Melbourne CC [2013] VCAT 1833; FJM Property Pty Ltd v Melbourne CC [2014] VCAT 108.

[30] Common Equity Housing Ltd v Yarra CC & Ors [2009] VCAT 1722. Mr Raworth's evidence stated this building was significant but that is not consistent with the decision that cites it as contribution but with a limited contribution in terms of the statement of significance.

[31] FJM Property Pty Ltd v Melbourne CC [2013] VCAT 1833 at paragraphs 82 and 99.**

[32] These units otherwise rely only on a bedroom window that will be required to be covered by the section 173 agreement with then the sole access to air and light for that bedroom being the light court. We refer to this again later in these reasons.

[33] This measure takes account of the curved corner of the new building being constructed and the curved balcony that overhangs the lane, as shown on the application plans for No. 708 Elizabeth Street. The lane is 2.7 metres x 10+ metres.