Are the amendments to the proposal's built form outcome acceptable?

1. The Applicant submitted the modifications to the building envelope are minor. Most are not opposed by the Council. The most contentious extensions are the addition of a balcony to Unit 28 to the south-east, for which screening would be required, and the addition of a bedroom to Unit 30. The Council opposes the cantilevered form of Unit 30 even though it abuts a church building. Neighbours oppose a number of the changes particularly the additional balcony elements and cribbing of the building envelope.
2. The changes are generally not sizeable but the two most contentious additions or extensions to the built form would add visual bulk. With respect to Unit 30, the extra bedroom to Unit 30 would not comply with Standard B17 but the more significant issue with this extra room is its impact on internal amenity as noted below. With respect to Unit 28, the large new balcony would be an added presence particularly for the dwelling to the south which has multiple habitable room windows and private open space relying on a northern aspect. The balcony would add some noise. The balcony can, however, be screened in accordance with Standard B22 to protect against unreasonable overlooking.

1. The Council opposed amendments to the layout of six of the dwellings. These units are proposed to be rearranged so that a second bedroom relies on borrowed light. Two additional dwellings require the second (inboard) bedroom to rely on a skylight. The additional bedroom for Unit 30 would affect the internal amenity of units below. There is also the potential for inter-viewing from the new bedroom to other dwellings within the development.
2. Mr McGurn's evidence was that the changes to the dwellings are acceptable. He said the modifications improve the outcome for living, kitchen and dining areas but acknowledged that the "trade-off" is a lesser amenity for the second bedroom. On balance, he said, the outcome is acceptable. Suggestions were made as to how some windows could be rearranged in the new bedroom to Unit 30. The operation of the skylight system was explained by Mr Mrocki.
3. The endorsed plans provide some single bedroom units with the bedroom reliant on borrowed light and second bedrooms that are not in the same configuration as now proposed. The proposal positions some second bedrooms located behind another bedroom and bathroom often at a significant distance from the closest window. Overhanging balconies above further affect light access. Ventilation would be limited as the Council noted.
4. These changes compromise the internal amenity of these units. The Tribunal has discussed issues about borrowed light for second bedrooms in a number of recent cases including the following comments in one decision[7]:

...the reliance on borrowed light to the bedrooms of single-bedroom dwellings can represent an acceptable (although not ideal) outcome. The generally sole occupancy nature of such dwellings means that the residents have the flexibility of leaving the bedroom area open to the main living area if they so wish without having to contemplate any privacy concerns arising from other occupants using the living area, for example. Relevant factors for consideration in assessing whether reliance on borrowed light represents an acceptable outcome in any instance include the distance of the bedroom from the light source, the layout of the dwelling, and the amenity of the dwelling as a whole, amongst others

1. In the current case, the modifications would result in 27% of the dwellings relying on this style of layout (including the two with skylights). I agree with the Council that the outcome is unacceptable for a site enjoying two street frontages and only one sensitive residential abuttal. It is the result of massaging the approved building envelope to achieve a higher density of bedrooms.

Would there be unreasonable off-site impacts in terms of overlooking and noise?

1. I have alluded to concerns of Ms Avdi and Mr Culhane about the amendments in terms of increased overlooking from the new balcony attached to Unit 28 and the potential for noise associated with the balcony and development. I consider the balcony should be relocated. That would reduce the impact on the windows and private open space serving the semi-detached dwelling abutting the lane that relies on its northern aspect for all light and amenity.
2. The Applicant agreed to erect an acoustic fence along Ms Avdi's boundary. I would not require that fence in the context of this proceeding given the reduced number of cars on-site. However, it would be possible as a private agreement.

How do the amendments impact upon the integrity of the mediated outcome?

1. I was advised that the mediation resulting in an agreement and the Permit issuing involved three Tribunal mediation sessions. The agreement removed a floor of the building (six units) and increased the size of the second basement so that on-site car parking exceeded the standard required by Clause 55 for a three storey building[8]. As negotiated and reflected in the endorsed plans, most units would have two car spaces on-site none of which are in stackers. Many parties in the current proceeding argued that these elements were critical to their involvement in reaching a mediated agreement.
2. Other parts of the agreement included changes to the unit layouts to address internal amenity issues as noted by the Council.
3. Mr Mrocki apologised to the Tribunal and parties for the amendment request. He said that his intention was to build the two basements however, he was not fully aware of the financial implications of the agreement reached. He said the Section 87A application arises from the costs of site decontamination and a second basement, as well as increased construction costs, that have made the development economically unfeasible. Mr Mrocki explained the project costs. He said the development has been shown as unfeasible after the design in the endorsed plans had been documented and tenders received. Builders' quotes tendered at the hearing are dated 12 and 26 July 2011. Mr Rosier gave expert evidence with respect to costs associated with a second basement.
4. Parties opposing the amendments disagree that these reasons justify the amendments. They argue that the Applicant should have known about costs when agreeing to the mediated outcome and, as an experienced developer, would have been aware of costs associated with site decontamination. They noted that the original proposal included a partial second basement level that is now proposed to be removed entirely only six months after the mediation.
5. The time elapsed since the Permit issued allowed the permit holder to document and tender the project. The application made to the Tribunal in April 2011 (around 6 months after the mediation) describes the reason for the amendment as being rising costs and economic circumstances. Tenders subsequent to the application show the current projected building costs.
6. Changes in response to market conditions, and changes arising during the detailed design, construction or financing of a project, are examples of potentially appropriate uses of Section 87A described in The King David decision. Changing the unit mix and adding or deleting bedrooms in large scale projects is not uncommon. This type of change is often acceptable provided internal amenity is not unacceptably compromised and there are not other unacceptable consequences such as with respect to parking ratios or building form. I am most concerned about the basement. The permit application lodged with the Council had one and a half basement levels. It is now for building efficiencies and because any second basement is too expensive that the proposal is sought to be amended. In some situations that may be a reason to allow an amendment. However, I am less persuaded in the circumstances of this proceeding that it provides a fair basis to depart so significantly from the mediated agreement. I explain next how the mediated agreement is affected.
7. While not accepted by some, a benefit of the amendment is that less cars will rely on the lane because fewer would be parked on-site. This would mean reduced noise and impact on parents and carers using the lane to access the pre-school. Thus, safety concerns raised are less of an issue when compared with the outcome of the existing Permit involving more vehicle use of the lane.
8. On the other hand, the application seeks a significantly more favourable outcome than negotiated. It seeks to gain some aspirations by removing 18 car spaces from the site resulting in less cars than included in the original permit application. The amendment does not, however, seek more dwellings or floors.
9. Other aspects of the mediated outcome that achieved benefits for Objectors and the Council but would be negatively affected by the proposed amendments include the following:
   • The confined nature of a Section 87A proceeding limits the ability to review inter-related components of the mediated outcome. As Mr Bromley observed, where only part of the development is to be amended, there is no opportunity to reconsider the "package" as a whole. This, he said, "denies the Council the opportunity to test the merits of the building in its entirety, an option the Council would have exercised had this proposal been sought in the first instance".
   • The intent of the agreement was to provide more parking than required by the Scheme for a lesser number of dwellings, with 24 of the 30 units each provided with two car spaces. With the requested changes, all dwellings would have one car space except the larger three bedroom unit that would have two spaces. The reduction in car parking is a major concern for those who agreed to the mediated outcome. It is a substantial change.
   • Removal of the top floor reduced visual bulk and perceptions of overlooking for residential properties to the south. The amendments introduce a balcony to service Unit 28 that would bring the building closer to No. 28 Alexander Street and add to a perception of loss of privacy even though screening can be required. These changes negatively affect the benefit achieved as identified by Mr Culhane.
   • The proposal adds to the likely population density by increasing two bedroom dwellings. It reduces car parking. Although compliant with Clause 55, the outcome is less spaces per dwelling in a context of more likely occupants on the site. This is a disadvantage to some parties who agreed through mediation to a design with a lower density by the removal of the previous top floor that contained six dwellings.
   • The internal alterations result in an inferior planning outcome from the Council's perspective and depart from an acceptable internal amenity outcome that the Council says was achieved through the mediation.

1. Aspects of the amendment application are acceptable. However, some of the proposed changes depart significantly from the mediated agreement and result in some poorer planning outcomes. On balance, I find the application is not appropriate. Consequently, I will not amend the Permit. If the Applicant does not wish to proceed with the project, there remains the avenue for a fresh proposal to be considered via a new permit application.

[1] I have considered all submissions, evidence, and statements of grounds but do not recite all of the contents in these reasons.

[2] Bestway Group Pty Ltd v Monash CC (Red Dot) [2008] VCAT 86. Consequently, I have not addressed some of the broader concerns about the development referred to in some submissions (for example, with respect to the use of the lane for access into the basement).

[3] In that case, dealing with a fence treatment.

[4] The King David decision explains changes it allowed in that case. Another example is Minawood (cited above) where the Tribunal had regard to the context of the original permit application and approval that involved retention of a heritage building.

[5] The points may be able to be adapted to a reasoned Tribunal decision.

[6] An example might be window or balcony screening agreed at mediation even though that would not be required based on Standard A15 of Clause 54 or Standard B22 of Clause 55.

[7] Bensons Property Management Group v Boroondara CC [2011] VCAT 533 at paragraph 30.

[8] A four storey building is assessed under Clause 52.06 where the standard is two spaces per dwelling rather than Clause 55 rate that applies a different rate.