* Mr J. Dumond, traffic engineer with Grogan Richards.

For the Respondents: Mr S.P. Mayer, town planner, appeared for the Responsible Authority the Yarra City Council.

1. This was an application under Section 80 of the Planning and Environment Act 1987 (P & E Act) for review of conditions in a permit (Application No. 990593) for the development of two office buildings at 60 - 88 Cremorne Street Richmond. The conditions in review are:

"1. This permit does not come into effect until amended plans showing:

(a) the building height for Office Building A is reduced from the proposed 5/4 storeys to 4/3 storeys respectively;

(b) the building setback from the Blanche Street property boundary is increased to 1 metre from the current property alignment, with an appropriate treatment of the setback area to the satisfaction of the Responsible Authority;

2. The following works to be funded by the applicant and completed prior to either the commencement of the use or the issue of statement of compliance at subdivision stage:

(a) works to widen the Blanche Street footpath and carriageway, with the southern footpath increased in width by 0.5 metres and the carriageway increased in width by 0.5 metres. The total road reserve is to measure 6.47 metres from the northern property boundary alignment opposite the site;

(b) the construction standard of the southern footpath to withstand heavy vehicle load, and maintain a low kerb profile as existing;

(b)(sic) the widening of Blanche Street is to involve the transferring of land to Council, with all associated costs to be borne by the applicant.

3. The owner of the subject land shall contribute $20,000 to Council for implementation of landscaping works in Cremorne Street. The use shall not commence until Council has received payment of the above amount."

2. The subject site is located on the south-west corner of Cremorne and Blanche Streets. The site is regular in shape and has a frontage of approximately 50m to Cremorne Street, a side boundary of approximately 55m to Blanche Street and an area of approximately 3,175sq m. The site forms part of a larger land parcel of approximately 6,743sq m which, except for a remaining warehouse and storage shed has been cleared for re-development.

3. The following description of the surrounding land is taken from Mr Kelderman's report:

"The surrounding area comprises a mix of industrial, commercial, educational, residential and home office uses.

Cremorne Street itself has a commercial and industrial character, whilst the area to the west (ie. to the rear of the site) and extending through to Punt Road has a traditional residential character.

To the north of the subject land, across Blanche Street, is a large warehouse building that fronts Cremorne Street. Extending westward along the north side of Blanche Street is a row of three Victorian weatherboard dwellings.

To the south of the subject land, across Parkins Lane, is a contemporary three-storey building that fronts Cremorne Street. This building is used as both a residence and the offices of the Balloon Sunrise hot air balloon company. Further along Parkins Lane, to the south of the larger site, are the rear boundaries of residential properties fronting Kelso Street.

To the east of the site across Cremorne Street is the Richmond Campus of the Barton Institute of TAFE.

A bluestone laneway that is accessible from Parkins Lane extends along the western boundary of the larger site in part. Beyond the laneway are the rear yards of a row of single storey Victorian terrace houses fronting Wellington Street.

Also abutting the larger subject site to the west is the former vinegar factory, which is currently being developed for a series of dwellings, including three storey townhouses fronting Blanche Street with high-pitched rooflines. The eastern-most of these townhouses is built to the common boundary with the larger subject site. The vinegar factory site is identified in the Richmond Conservation Study as a site of regional historic significance.

There are also three other residential properties to the west fronting Wellington Street that abut the subject site. One of these is vacant, whilst the others accommodate run-down attached houses.

Cremorne Street is a local collector road providing access to Swan Street to the north and the South Eastern Arterial to the south. It has a road pavement width of 10.8 metres within a 14.7 metres wide road reserve.

Blanche Street is a narrow one-way street that is classified by the Council as a residential street. Its trafficable width is 2.8 metres, with indented parking bays on the north side. Parkins Lane is also narrow, having a width of approximately 3.5 metres."

4. When measured in 1995, Council engineers determined that Blanche Street carried 70 vehicles per day and Cremorne Street in the order of 6,100 vehicles per day.

5. The Tribunal adopts the following description of the proposal taken from Mr Kelderman's report:

"The current proposal is for the development of two new office buildings on the north-eastern portion of the subject land with associated car parking as the first stage of development on the site. It extends across the two northern-most lots of the three lots that form the combined parcel of land known as 60-88 Cremorne Street and represents approximately one-quarter of the total area of the total land holding.

* demolition of the existing factory building fronting Cremorne Street, and the remnants of the existing brick wall along the north side boundary to Blanche Street;

* construction of a four-level office building fronting Cremorne Street and an adjoining five-level office building at the corner of Cremorne and Blanche Street also fronting Cremorne Street;

* provision of 4,570m2 of total gross office floor space (4,195m2 net);

* construction of a split-level basement car park, comprising three levels and 70 car spaces, which will be accessed directly from a driveway ramp to Cremorne Street (70 spaces);

* construction of a ground level car parking area comprising 56 car spaces to the rear of the proposed buildings, which will be accessed via a separate driveway entry from Cremorne Street;

* provision of 126 car spaces in total, which equates to a parking provision of 3.0 spaces per 100m2 of net office floor area; and

* provision of landscaping along the northern boundary of the site and within the open space and car parking areas of the development.

The proposed office buildings have been designed as a stand-alone development, albeit that the ground level car parking spaces will eventually be re-accommodated within a larger basement car park as the balance of the site is developed.

The proposed office buildings are contemporary in their appearance and simple and clean in their design. The two buildings, whilst adjoining each other, have their own sense of identity. This is achieved through the variation in building height, the incorporation of façade openings (including the provision of terrace and deck areas) and the variation in the façade treatments generally. A variety of materials are to be used, including pre-cast concrete (which is to be colour rendered and patterned), metal cladding (which is to be coloured and rusticated), glass (which is to be clear and opaque) and timber louvres and sheets (which are to be weathered and stained)."

6. The subject land is zoned Business 3 under the Victoria Planning Provisions (VPP) format Yarra Planning Scheme. The stated purpose of this zone is:

"To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

To encourage the integrated development of offices and manufacturing industries and associated commercial and industrial uses."

7. Within this zone no permit is required to use land for the purpose of an office. However, pursuant to Clause 34.03-4, a permit is required in the zone to construct a building or to carry out works.

8. In addition to the matters for consideration set out at Clause 65 of the Scheme, including the State and Local Planning Policy Framework, the matters set out at Section 60 of the P & E Act and any effect on the amenity of the area, pursuant to Clause 34.03-4 of the Scheme, the Responsible Authority, before deciding upon an application, must consider, as appropriate:

"* The State Planning Policy Framework and Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

* The movement of pedestrians and cyclists, and vehicles providing for supplies, waste removal, emergency service and public transport.

* The streetscape, including the conservation of buildings, the design of verandahs, access from the street front, protecting active frontages to pedestrian areas, the treatment of the fronts and backs of buildings and their appurtenances, illumination of buildings or their immediate spaces and landscaping of land adjoining a road.

* Defining the responsibility for the maintenance of buildings, landscaping and paved areas.

* The availability of and connection to services.

* Any natural or cultural values on or nearby the land.

* Outdoor signage, lighting and stormwater discharge.

* The design of buildings to provide for solar access."

9. As stated by Mr Mayer at page 3 of his submission:

"The LPPF provides the local context and strategic planning directions for the City of Yarra. It contains the Municipal Strategic Statement (MSS) and various local policies on specific issues. Clause 21.05-3 of Council's Municipal Strategic Statement identifies the subject site as within a Business Enterprise Area. The objectives for this area are concerned with increasing the number and diversity of local employment opportunities in locations which are adequately serviced by public transport, and bicycle and pedestrian networks.

Yarra's MSS (Clause 21.05-3) envisages that Business Enterprise Areas would be supported through the more efficient use of marginalised industrial land and a shift in the City's economic base towards "service" businesses. It is intended that Business Enterprise Areas will accommodate a broad range of business activities, enable the co-location of industrial, warehouse and administrative functions and encourage business operations which will not detrimentally affect the amenity of proximate residential areas."

10. The subject application for permit was lodged with the Responsible Authority on 17th of May 1999. Following the giving of notice of the application, nine objections were received. The grounds for objection were summarised by Mr Mayer as follows:

"* building heights are excessive in the context of the surrounding buildings and would be visually detrimental to the area. The bulk and appearance of the building would be inconsistent with the locality and would be detrimental to the architectural integrity of the area;

* traffic and parking would become further congested in an area that already has inadequate traffic infrastructure;

* the building height would obstruct the amount of natural light to the front of cottages in Blanche Street, which rely on this light due to the terrace configuration. One objector suggests that the proposed office buildings be reversed so that the lower building be sited along Blanche Street, and that the wall height along Blanche Street should not exceed 10.5 metres;

* four of the representations have commented on the narrowness of the footpaths in Blanche Street and suggest that they be appropriately widened."

11. A consultative meeting was held on 22nd of June 1999 with nine residents in attendance. The issues discussed included both the current permit application and the balance of the site. Again as submitted by Mr Mayer the issues under discussion at the meeting were as follows:

"* an on-going concern by residents in Blanche and Wellington Streets regarding the height of the proposed office buildings;

* some residents are concerned that the proposed buildings heights, if approved, could be treated as a precedent for the balance of the site;

* residents are concerned with current traffic conditions and are unsure how this development would add to the congestion; and

* the narrow width of Blanche Street was criticised by residents, and an improvement to this aspect was sought."

12. The application for permit was considered by the Council's Internal Development Assessment Committee which is the Responsible Authority's delegate for such matters. The Committee resolved to grant a permit subject to conditions. The Notice of Decision issued on 29th of July 1999.

13. The subject application for review was lodged on the 25th of August 1999. The stated grounds for review were:

"1. Conditions 1(a), 1(b), 2 and 3 are unwarranted and without proper basis given the appropriateness of the proposal.

2. The proposal is consistent with the planning controls which affect the subject site.

3. The proposal will have no unreasonable detrimental amenity impacts."

14. By forwarding grounds for contesting the application for review the following objectors became parties to the proceeding: D. Tziropomos, H. Martin, C. Dewhirst, C. Varousiadis and M. and L. Smith.

15. Except for Mr Tziropomos, who made a brief oral presentation, endorsing the Council's submission, those parties or their representatives that attended the hearing, as well as the witnesses called to give evidence, tabled and spoke to written submissions or reports. The written material, together with the plans, photographs and other material tendered in the course of the hearing have been retained on the Tribunal's file.

16. At the conclusion of the hearing the Tribunal announced that it would be allowing the application for review and gave oral reasons for its decision. The following is a summary of those reasons.

17. The conditions in review arise in response to three beliefs held by the Council. In summary these were that:

* The part of this development closest to Blanche Street is too high, both in juxtaposition with the existing cottages in Blanche Street and more broadly, in the context of the precinct as a whole.

* The re-development presents an opportunity to rectify an existing "constraint" in Blanche Street, namely the difficulty, due to the width of the street, in accessing indented car spaces on the north side of the street opposite the subject land.

* The development presents an opportunity to require a contribution towards the beautification of Cremorne Street so assisting in improving the image of the precinct as a business enterprise area.

18. My response to these propositions is set out below.

19. On the issue of height I found the evidence of Mr Kelderman to be persuasive. He suggested that the stepped nature of the structure served to reinforce the identity of the building as two separate offices. At the same time other qualities of its design - including the proportions of vertical elements - would be lost by reducing the whole structure to the height of Building A. In any event, what would such a reduction achieve? As Mr Bissett put it - "to what end?". Such an amendment to the design would reduce the floor area of Building A by 25%. This would take away an opportunity for the very economic activity which is being encouraged under the policy framework. Such a loss of floor area is not warranted for car parking or traffic reasons. The evidence of Mr Dumond confirmed this.

20. The only basis for a reduction in height is that otherwise the building is too prominent. To this end I accept Mr Bissett's submission that in the context of this fast changing precinct, prominence is not a fault. Indeed, as suggested by him, it may act as a catalyst for other business enterprises who may see this as an up and coming up-market, high quality architectural precinct. Such facilitation is of course consistent with Council's policy for the area.

21. I also find that a reduction in the height of this building would not have any particular benefit for local residential amenity - either in Wellington Street (and in this regard I rely on Mr Kelderman's cross-sections) or from Blanche Street. In the latter instance the cottages in question are located to the west of the proposed development with a 2 to 3m wide landscaping strip located opposite. In many ways the prospect of a carefully designed and articulated building with a landscaped area adjacent would constitute an improvement on the existing outlook for residents of Blanche Street. It is also likely that should the car park opposite be re-developed, any further development would be lower - acting as a linking element to the townhouses to the west. It may even be that the cottages, which are non-conforming in the zone, are themselves re-developed - consistent with the business zoning and Council's stated policy for the area.

22. I gave consideration to the recommendations within the officer's report to the Responsible Authority's delegate, for further articulation of the top floor. However, given the fact that this is clearly a building of some architectural merit I find that in the context of change within this precinct it is appropriate to adopt the design of a well respected architectural firm. Clause 19(3) of the State Planning Policy Framework, which refers to design and built form, has an objective "to achieve high quality urban design and architecture". I consider the subject development to meet this objective.

23. Before proceeding to deal with the terms of Conditions 2 and 3, some comment must be made about their drafting. The nature of these conditions is clearly as a form of development contribution. Section 64(6) of the P & E Act, dealing with such conditions states:

"(6) The responsible authority must not include in a permit a condition requiring a person to pay an amount for or provide services or facilities other than -

(a) a condition required to implement an approved development contributions plan; or

(b) a condition requiring services or facilities to be provided in accordance with an agreement under Section 173."

24. There is no adopted development contributions plans for this precinct. Accordingly, in order to conform with Section 63(6) the works would have to be the subject of a Section 173 agreement. This of course would be a simple matter of amendment. The real issue however is whether such development contributions are valid or appropriate in the subject instance.

25. There is a well established body of law in relation to the validity of permit conditions. For a comprehensive summary I would recommend a reading of paragraphs 67 to 77 of the relatively recent Tribunal decision Rosemeier and Others v City of Greater Geelong (No. 1) (1996/45189) 20 AATR 86. This was a decision of then Deputy President Byard. I do not intend to set these paragraphs out but merely to refer to the two key cases referred to, namely; Pyx Granite Company Limited v Ministry of Housing and Local Government and 271 William Street v City of Melbourne.

26. A central finding in Pyx Granite, a case decided by the English Court of Appeal, was that to be valid a condition "must fairly and reasonably relate to the permitted development" and that planning authorities are not at liberty to use their powers "for an ulterior motive, however desirable that object may seem to them in the public interest".

27. In 271 William Street the Victorian Supreme Court found that it is valid and not an ulterior motive where the condition is "reasonably capable of being related to the implementation of planning policy" to be discerned from the Act and relevant scheme and not some pre-conceived notion of planning.

28. In the context of the increased emphasis on policy within planning schemes it might be suggested that the court's findings in 271 William Street have increased relevance today.

29. Added to these tests for validity are the criteria of need, nexus, equity and accountability, first formulated in the now well known case Eddie Baron Constructions Pty Ltd v Shire of Pakenham and Minister for Planning and Urban Growth 6 AATR 10. These criteria were suggested as tests to determine the appropriateness of development contributions.

30. Whilst there may be a "need" in some people's eyes to widen Blanche Street - primarily to facilitate easier access into the indented kerbside parking spaces - I could not be satisfied that this need has any "nexus" with the proposed development. The evidence of Mr Dumond was persuasive in so far as it suggested that this development would be unlikely to affect vehicle or pedestrian use of Blanche Street. I also accept Mr Bissett's submission that the absence of such a condition on the townhouse development to the west, lends weight to the argument that such a contribution for this site only, would be inequitable.

31. There is no stated policy - either through the Act or within the Planning Scheme - to suggest that Blanche Street should be widened in the manner proposed. This being the case I can only but find that the condition has been imposed for an ulterior motive - not withstanding that it may seem to be in the public interest. If the Council really sees a need to widen Blanche Street it has powers to do so under the Local Government Act. This planning permit is not the appropriate vehicle for such a widening, especially given that it is not intended to compensate the owners for the loss of their land.

32. On the issue of street trees in Cremorne Street, there was consensus, supported by the evidence of Mr Kelderman, that such plantings could very well improve the image of the precinct so furthering the objectives of this Business Enterprise Area. To date however no proper analysis of constraints that might exist within the street has been undertaken and no framework for future improvements has been prepared. Not surprisingly therefore no accountable system is in place for holding or spending the $20,000 sought to be obtained from the permit applicant. In addition, whilst there was some rather unsubstantiated evidence of other properties, namely the Holliphane development, having been required to contribute to street beautification, this requirement was not imposed in the manner sought here. Rather it arose out of a requirement of the scheme itself following a site specific amendment.

33. I find in the circumstances that it would be most inequitable to impose the subject requirement in the manner proposed, especially given the absence of any real link between the proposed development and the need for street trees. If anything, the proposed development makes a more positive contribution, in an urban design sense, than most existing development. A more equitable arrangement might be a special rate scheme, applicable to all of the land owners likely to benefit from such urban design improvements. Alternatively, a development contributions plan for the precinct, supported by an accountable funding arrangement, could be considered.

34. The Council would do well to note the submission put by Mr Bissett that his clients would not be adverse to contributing towards such a scheme. Understandably they want the scheme to be accountable and shared equitably between the beneficiaries.

35. Once again I find that Condition 3 does not fairly or reasonably relate to the permitted development. The need for street trees does not arise out of this development. Rather it stems from a more general need. It could be said that this need relates to "the implementation of planning policy ... discernible from the scheme" namely the identification of the precinct as a business enterprise area where a new and different image can be anticipated. Unfortunately however there is no proper or accountable system in place for the collection and expenditure of funds in relation to such works. Neither can it be said that the mechanism of a permit condition, in the absence of such a framework, is equitable given the range of other properties likely to benefit. The Council would do well to take into consideration the submission by Mr Bissett on behalf of his clients, namely that his clients were more than willing to contribute towards a properly formulated scheme.