For the Applicant: Mr C.J. Canavan, QC and Mr C.J. Townshend of Counsel, instructed by Nathan Kuperholtz, Solicitor for Martin Stuart Pty Ltd

For the Objectors: Mr D. Scally, Solicitor, Best Hooper for the following objectors:

1. A property known as No. 10 Jackson Street and No. 35-37 Fitzroy Street St Kilda, is comprised in Certificate of Title Volume 9339 Folio 605. It has an overall area of 1247m2. The property is irregularly shaped with frontages both to Fitzroy Street St Kilda, a wide boulevard which is a well known retail and entertainment strip in St Kilda and another frontage to the much narrower Jackson Street which has a residential or mixed use character. From approximately 1970 onwards the Fitzroy Street frontage was largely or totally occupied by a branch of the Commonwealth Bank of Australia. The bank ceased operations in recent years and the former bank building has now been refurbished so as to include three retail outlets which are now offered for lease. In accordance with Planning Permit No. 1324/98/K issued by the City of Port Phillip as Responsible Authority under the Planning and Environment Act 1987 these shops may be used as to one, as a shop generally; as to the second as a take-away food premises and as to the third as a 30 seat restaurant.

2. On 6 July 1999 Martin Stuart Pty Ltd lodged a planning permit application No. 846/99/C with the City of Port Phillip to erect a 54 room residential hotel including a second storey on the existing building fronting 35-37 Fitzroy Street and a second five-storey building facing 10 Jackson Street. Council issued a refusal notice dated 27 August 1999 upon the following grounds:

2. The proposal provides inadequate on-site parking.

3. The proposal would adversely affect the amenity of adjacent residential properties.

4. The proposal fails to comply with Council's Design Manual."

3. Council made its determination after having received some 33 objections. On 2 September 1999 the proponent's planning consultants lodged an application for review with this Tribunal seeking a direction that a permit issue for the development proposal.

4. On 17 September 1999 Judge Wood, Vice President of the Administrative Division of the Tribunal ordered, inter alia:

"That upon the applicant certifying by 1 October 1999 that the plans or amended plans will not be further amended, the application is admitted to the Commercial List".

5. It appears that the required certification was given and the matter was listed for hearing before us on 10 and 11 November 1999. Some 13 objectors or groups of objectors lodged grounds of appeal with this Tribunal and so became parties to the proceeding. At the hearing Mr Scally, Solicitor of Best Hooper, represented some six of those objectors or groups of objectors. A Mr Lyons representing Lydford Pty Ltd attended the hearing and made a brief oral submission supplementing the grounds which he had already lodged with the Tribunal. A number of other objectors placed written material before us but did not appear and make any submissions at the hearing.

6. Demor Pty Ltd, the owner of the Prince of Wales Hotel, 29 Fitzroy Street St Kilda, through its consultants A.T. Cocks Consulting, by fax and letter dated 9 November 1999 advised the Registrar that it had received further information from the proponent which satisfied its concern and "would support the proposed redevelopment as per the amended plans forwarded to all parties".

7. The site has an area of 1247sq m. It is relatively level but nevertheless slopes almost 4m from the low point at the Fitzroy Street frontage to the highest point at the Jackson Street frontage. The site is in the St Kilda Neighbourhood Area 3 and is part of a Business 1 Zone which in accordance with Clause 34.01 of the Port Phillip Planning Scheme has as one of its purposes:

"To encourage the intensive development of business centres for retailing and other complementary commercial, entertainment and community uses"

8. "Residential hotel" is an unspecified Section 2 use and therefore requires a planning permit. Permission for the development of the land is also required by the zone controls.

9. The Fitzroy Street frontage as previously noted forms part of a well known entertainment strip. At the Jackson Street abuttal the site is now occupied by an asphalt parking area which we were advised accommodates some 30 cars. The site is bounded on the west of its Jackson Street abuttal by a recently constructed multi-storey car park constructed as part of the redevelopment of the Prince of Wales Hotel which is situated at the corner of Fitzroy Street and Acland Street. This redevelopment area is part of the same zone as the site. On the east is an inter-war block of flats known as "Clovebury Lodge" which is designated as a Significant Heritage Building under the Council Heritage Review. Clovebury and the balance of Jackson Street to the east is zoned Residential 1. Jackson Street to the west on the northern side is zoned Business 1. The site is subject to two overlays: Design and Development Overlay No.6 (Fitzroy Street, The Esplanade and Acland Street) and Heritage Overlay No. 5. There are no heritage buildings erected on the site itself.

10. The amended plans lodged with the Tribunal in accordance with Judge Wood's order, cut the number of units in the proposed hotel from 54 to 48. This is done by deleting six rooms which in the original plans were to be located on the eastern boundary at the fourth floor level (that is the boundary adjacent to the Residential 1 Zone and the Significant Heritage Building) and included a number of other variations from the plans originally considered by Council.

11. The western boundary of the proposed building will be hard against the recently constructed Prince of Wales multi-storey car park. A 4m setback from the eastern boundary is provided with a landscaped area upon which it is proposed to place mature height Cabbage Palms and other plantings to create a garden area. Access to the reception area is to be by means of a covered walkway behind a tall bulletproof glass screen salvaged from the former bank premises on Fitzroy Street. That walkway is to be screened for some of its length by a "wing wall" erected close to the eastern boundary. A large advertising sign is to be sited on the front wall. Illumination of the sign would be confined to the west face. The proposed hotel is to include no restaurant or banqueting facilities. A breakfast room only is proposed.

12. The Council was represented by its Urban Planner, Mr Richard Schuster who submitted that Council's decision should be affirmed. He observed first, that since the use "residential hotel" is defined in the Planning Scheme as follows:

"Land used to provide accommodation and serviced rooms for persons away from their normal place of residence. If it has at least 20 bedrooms, it may include the sale of liquor for consumption on, or off, the premises, function or conference rooms, entertainment, dancing, amusement machines and gambling."

13. This definition is wide enough to include a "backpacker's lodge". Such lodges, according to Mr Schuster:

"Are notorious for the adverse impact they have on neighbouring residential properties."

14. These lodges frequently cause problems particularly by way of nuisance noise which given its intermittent nature was difficult to police. He concluded:

"It is Council's submission that the issue of potential and negative interface [with residential zones] is best addressed by the sensitive location of low cost accommodation on appropriate sites in the first instance, rather than to allow them to establish adjacent to sensitive residential uses and then try to regulate their impact on neighbours."

15. According to Mr Schuster the design of the proposed development also did not respond to the interface with a residential zone "with a scale, bulk, massing and height appropriate to the location" and did not deal with issues of overlooking and overshadowing. He observed:

" ... the location of the entrance to the reception/lobby and the location of the breakfast room (the only communal areas within the design) are all designed to sit alongside 12 Jackson Street ... adjacent to habitable room windows."

16. He observed that the amended plans provide for some 23 car spaces. Planning Permit No. 1324/98/K requires 14 spaces to be provided to the three retail premises facing Fitzroy Street including the 30 seat restaurant. This left only nine car spaces to cater for guests and staff at a 48 room hotel which was manifestly inadequate. In oral submissions in reply, Mr Schuster said that a more appropriate parking allocation for the hotel would be 18 spaces.

17. Mr Schuster said that Council could take no comfort from a number of matters relied upon by the proponent's traffic engineer. The exclusion of restaurant facilities from the present plan only intensified Council's concern that the development might be or become a backpacker's hostel. The suggested split of clientele which the hotel would attract could not be controlled by any planning mechanism. Mr Schuster questioned the appropriateness of some of the survey material relied upon by the traffic engineer and his reference to "eight metropolitan boarding houses" intensified Council's concern that this development might in truth be a backpacker's hostel.

"There is a critical shortage of car parking available to the precinct as a whole, particularly on Friday nights and weekends when the occupation rate of the residential hotel is also likely to peak"

19. The site in its existing configuration permits the parking of 30 cars and therefore, said Mr Schuster, the present proposal "will represent a net increase of zero from the existing situation".

20. The Planning Scheme previously governing this site set a maximum building height of 15m. Schedule 6 to the Design and Development Overlay sets a preferred height of 15m. Mr Schuster conceded that the proposed building has a parapet height of 15m measured from Jackson Street but its height from Fitzroy Street ground level is some 19m. The building rises some 19m above natural ground level to the top of the plant and lift overrun on the roof and 17m above ground level on the part of the building towards the centre of the site. According to Mr Schuster it was open to argument whether heights should be measured from Jackson Street level or a Fitzroy Street level. He continued:

"It is Council's submission that rather than rely on semantics, the preferred height should be considered in the context of:

a) compliance with the Council's Design Manual forming part of the Port Phillip Planning Scheme

b) the height of the building at any point on the land measured above natural ground level at that point (in which case the preferred height is breached by up to 2m) and

c) an appropriate height based on the design which is site responsive to the neighbourhood."

He said that the proposed building would be some 5m taller than the Prince of Wales car park "excluding the proposed lift overrun".

21. Mr Schuster said that the proposal did not comply with Council's Design Manual in that:

(a) The Jackson Street abuttal "is dominated by car parking, the car park entry and crossover and a long covered walkway to the reception area over 10m from the street frontage abutting a common boundary shared with a residential property. There is no active street frontage and little weather protection provided to the public domain."

(b) There is no respect for the human scale and mass and bulk with a virtually sheer five storey wall abutting Jackson Street.

(c) The design does not respect the characteristic of the site placing a five storey built form adjacent to a two storey dwelling with little or no transition in height and without any obvious response to the commercial/residential zoning interface issues. The Design Manual requires new development to "respect and enhance the surrounding neighbourhood character and image as well as the built form patterns and movement patterns of the area".

(d) The built form does not express the purpose and function of the building and lacks an interesting roof form.

(e) The building does not complement the streetscape and help to reinforce the character of the neighbourhood.

22. Mr Schuster criticised the decision to locate the main bulk of development at the Jackson Street abuttal rather than at the Fitzroy Street end. A more site responsive development would:

(a) have the 15m section over the existing shops or in lieu of the existing shops fronting Fitzroy Street and adjacent to the Prince of Wales Hotel;

(b) have a building no more than 11m (equal to the height of the Prince of Wales Hotel) at the western boundary of the Jackson Street abuttal and limit building to 9m on the eastern side at the edge of the Residential Zone.

"There is little evidence that the proposal has been designed to minimise overlooking or visual impact on the property to the east. There is no meaningful transitional zone in the building design and the proposal places 40 windows directly towards the property indicating a lack of regard for its amenity."

23. In so far as the application seeks a permit for a large sign on the front of the building "Council opposes the sign as the first commercial and first sign encroachment into the Jackson Street residential environment". If the sign were to be allowed it should be reduced in size and lowered with restrictions as to its illumination between midnight and 6.00 a.m.

24. All objectors were critical of the mass and bulk of the proposed building and complained that its off-street parking was inadequate and that the development would worsen an already unsatisfactory traffic situation.

25. Mr Scally of Best Hooper appeared and made a lengthy submission on behalf of his client objectors all of whom, with the exception of Jane Strangword are residents of Jackson Street. Mr Scally supported Council's refusal and said the proposed development:

* Exacerbates existing traffic problems in Jackson Street

* Noise associated with a hotel use will have an unreasonable effect on the amenity of the neighbours

* The scale and bulk of the five storey building is unreasonable

26. As to parking Mr Scally referred to Clause 52.06-6 of the Scheme which specifies as appropriate a parking rate of one space per lodging room. He conceded that this requirement may be waived or reduced in certain circumstances but the necessary circumstances were not he said made out here. He criticised the evidence of the proponent's traffic engineer, suggesting for instance that the demand for parking for the restaurant would not begin to reduce at peak times like Saturday night as early as 10.00 p.m. as the proponent's traffic engineer Mr Hunt assumed. Mr Scally said that if this development were to become a backpacker's hostel, significantly different parking issues would arise and the problem would be greater. He said that particularly in light of a number of proposed developments which if this proceeded would draw off existing surplus car parking in the Prince of Wales car park "it is critical that the proposal will provide a net gain in car park spaces for the area". This proposal he said resulted in a nil gain of car parking space. Mr Scally presented a large number of photographs showing both parking and traffic problems in the vicinity of the site. "The removal of the top two floors of the building would go some way to addressing the car parking problems with the proposal." He said the area of Jackson Street to the west of the site and up to the site's eastern boundary is "two-way" but further to the east there is a speed hump and the street narrows to one-way. Mr Scally said that this caused a repeated traffic problem with vehicles making three point turns in the vicinity of the site and near the residence of one of his clients in a block of units at No. 11 Jackson Street immediately opposite the site. The entrance to the hotel at the Jackson Street frontage would intensify the already existing traffic management problems, he said. Mr Scally also said that an inspection would disclose evidence of damage to the gates at No. 11 Jackson Street and the subject site caused by turning vehicles. Moreover, to the extent that the proposed hotel would seek to cater to international travellers, such persons would increasingly arrive very late at night or early in the morning since there is an increasing tendency to avail of the lack of a night time curfew at Tullamarine Airport as curfews operate at other major Australian airports. He tabled a letter from the management of Melbourne Airport supporting this view. Traffic problems will also be generated by the need for commercial deliveries to the Jackson Street frontage of the hotel.

27. The increased traffic movements particularly at night would (in Mr Scally's submission) create a noise problem for the predominantly residential Jackson Street. Rooms 5, 6 and 7 in the proposed hotel include first floor balconies which would encourage outdoor entertaining and therefore unreasonable noise for Jackson Street residences, particularly in summer.

28. Mr Scally also criticised the size of the proposed building. He said:

"It will tower over Jackson Street and set a planning precedent for increasing the size and height of the Prince of Wales Hotel. This should not be encouraged."

"There should be a transition by way of a stepping down in height from the Prince of Wales car park (11m in height) to Clovebury Lodge (8.2m in height to the roof ridge) to the east. A transitional height of about 8.5m to 9.5m is preferred for the site."

He stressed that Clovebury Lodge is a significant heritage place and that a development modified in accordance with his suggestions would be in accordance with the Council's Design Manual rather than at odds with it as he submitted the present proposal was.

29. His clients also opposed the sign sought to be placed on the front of the hotel.

30. Martin Stuart Pty Ltd the proponent of this development was represented by Mr Canavan QC and Mr Townshend. In addition to making submissions they relied upon expert evidence from a town planner, Mr Borelli; a traffic engineer, Mr Hunt of Grogan Richards; the proposed development's architect, Mr Swansson; and a landscape architect, Mr Tim Vernon.

31. Mr Canavan's primary submission was that the key to the resolution of this proceeding was the issue of interface between the proposed development and the residential heritage property to the east of it, namely Clovebury Lodge. He said that the issue of "backpacker's hostels" was a red herring. This hotel would be operated by Rendezvous Hotels International which operates a variety of hotels and resorts in Australia and Asia including Singapore, Perth, Brisbane and Sydney. A number of these establishments could be classed as "five star". The Jackson Street hotel would be looking at "attracting the budget-mid-range market. There are no suites and minimal food and beverage services." He said that his client would consent to the imposition of a condition that no more than 100 guests be permitted to stay in the hotel at any time and that no more than two adult persons might occupy any one room. These conditions would, he said, effectively exclude the hotel from the backpacker market which he said depended upon the use of dormitory style accommodation or putting four or five people in a single room.

32. According to Mr Canavan the proposed use is in accordance with the orderly planning of the area. He stressed that this site formed part of an activity centre of significance not only to St Kilda but to the whole metropolis and it was State policy "that activity centres should be planned to incorporate and integrate a variety of land uses including commercial and residential where appropriate" (he referred to Clause 17.01-2 of the State Planning Policy Framework). Mr Canavan further observed that Council's Municipal Strategic Statement recognised that the City of Port Phillip has an integral role to play in the achievement of State Government objectives because:

"(i) It contains a substantial proportion of the State's significant tourist features and infrastructure; and

(ii) It is joint custodian with the City of Melbourne of the largest commercial centre outside the CBD (ie. along St Kilda Road)."

He referred to Clause 21.01-4 of the Municipal Strategic Statement. The City's Tourism Policy specifically encourages tourism which "supports the local economy, provides jobs and acts as a catalyst for residential development and the provision of new facilities". He said that the preservation of the retail frontages in Fitzroy Street was "consistent with the local policy objectives which seek to preserve retail frontages in Fitzroy Street".

33. Mr Canavan observed that a residential hotel was a proper discretionary use on the interface of a residential and business zone. It was particularly so in light of the burden of evidence and submissions from objectors which "describe a residential amenity in Jackson Street that is already compromised by the proximity of the Fitzroy Street activity centre". Choice of discretionary uses on an interface between a Business 1 Zone and a Residential Zone must be seen in light of the as of right uses allowed without a permit for a Business 1 site, including shop, office and food and drink premises, which uses may be more compromising to residential amenity than the proposed hotel. The proposed hotel would provide "a useful buffer between the residential uses to the east and the car park and restaurant uses to the west"

34. Mr Canavan rejected the criticisms of the design of the proposed building. He described the design as "an excellent piece of architecture which makes a conscious attempt to respect a number of important St Kilda design themes". In contrast to the monolithic aspect of the Prince of Wales car park, the bulk of this building was broken up into a number of different parts including a proposed stone facing around the car park entrance, a main frontage of glass with a strong segmentation from wide window sills, a very distinct aluminium mesh covering the staircase and a lower and differently finished building segment to the eastern boundary with a substantial setback from that boundary. He said the interface with the eastern boundary and the Residential Zone was appropriate because:

"(i) the pedestrian entrance is to the east of the site;

(ii) residential scale windows in the east elevation present a soft edge to the commercial area;

(iii) the building is stepped back at the fourth floor creating a transition from the residential abuttal and preserving daylight to windows on the west side of the adjacent building"

"The proposed built form is consistent with the eclectic and diverse character of St Kilda's streetscapes and the traditional variety of accommodation in the streets off The Esplanade and Fitzroy Street."

"The proposal would not reduce the 14 spaces currently required for retail uses, indeed a further nine spaces would be provided."

He relied upon the evidence of Mr Hunt. Mr Canavan stressed the wide discretion bestowed upon the Tribunal by Clause 52.06 as to parking issues and relied upon a decision in 12 Fitzroy Street St Kilda v The City of Port Phillip 1999/19867 as indicating a wide variety of matters which might be considered relative to a development's car parking requirement "including a separate rate scheme, availability of parking in indoor car parks, and the prospect of new public parking being constructed in the future if demanded". It emerged in evidence that Council has promoted a special rate scheme to provide additional off-street parking in Jackson Street to meet a perceived shortfall for the area.

36. He submitted that issues of overlooking had been reasonably dealt with by the inclusion of a number of wide window sills, the use of opaque glass for a number of windows, landscaping with mature sized plantings of Cabbage Palms and a "wing wall".

37. Mr Canavan said that no account should be paid to the Council's Design Manual. He said that he had been present for virtually the entirety of a panel hearing to consider Amendment C5 to the Scheme and the Council's Design Manual had received what he described as a "shellacking". What would ultimately emerge he said was a complete departure from any prescriptive height limits.

38. Mr Vernon, the landscape architect, described his proposals for the site and noted the availability of mature size Cabbage Palms for immediate planting to provide significant screening. Mr Vernon favoured a substantially higher fence at the eastern boundary than the existing 1.7m. If a 1.7m fence were substituted he favoured its being topped with some trellis.

39. The proponent's planning expert Mr Borelli said that the proposal

"... is squarely consistent with the State Planning Policy Framework. It supports the objective of concentrating commercial facilities in activity centre locations where access to public transport and community services and infrastructure is greater and where adverse effects on residential neighbourhoods can be avoided. It will also enhance the range of services and facilities available to the community and make more efficient use of an under-utilised site."

"... largely complies with the 15m preferred building height in the table to Schedule 6 of the DDO. Only the screened rooftop building services exceed this height. While the DDO allows such features to exceed the preferred height by 4m over 10% of the top floor footprint, the screen plant area in fact exceeds the preferred height by only 1.2m but over approximately 80% of the footprint and the lift overrun exceeds the preferred height by only 2.6m. In the context of this neighbourhood I regard these differences as minor and I consider that the development will still achieve the desired outcome stated in the table, that is, maintenance of human scale, sunlight penetration and avoidance of wind tunnelling and excessive visual bulk, particularly as it may affect views of the Prince of Wales Hotel."

40. Mr Borelli conceded that "the development has potential amenity impacts on [the flats at No. 12 Jackson Street] in terms of sunlight and daylight access, loss of privacy and visual bulk". Nevertheless he said

"It is relevant that these dwellings are located within mixed use areas adjacent to commercially zoned land forming part of a vibrant inner-urban activity centre. Large buildings close to site boundaries must be expected in this locality and, in fact, the zone purposes encourage "intensive development". Residents who choose to live in a closely settled neighbourhood adjoining an activity centre on two sides cannot reasonably expect the same standards of amenity as residents in low density, wholly residential neighbourhoods. In essence, they have chosen to place a higher value on accessibility and convenience to facilities and services than on a quiet leafy environment."

41. Mr Borelli conceded that there was some overshadowing but having analysed it, concluded "this degree of overshadowing is significantly less than compliance with the Good Design Guide techniques would allow and therefore, in my opinion, loss of sunlight access is not a significant issue." He said that the building would be set back 5m from the ground floor windows of No. 12 Jackson Street and the north-eastern wall would be finished "in a light colour to maximise reflective sunlight". In Mr Borelli's view the combination of measures including window sills, use of opaque glass, set back at the fourth floor combine to "ensure that no unreasonable overlooking will occur from the development to surrounding residential properties". Mr Borelli referred to and relied upon the opinion of Mr Stephen Hunt as to car parking and access arrangements. Accordingly Mr Borelli supported the development and suggested that a permit should issue for the development.

42. The architect for the project Mr Richard Swansson also gave evidence. He said

"The idea for the building was to find a "tough" architecture that could sit engagingly in a difficult complex streetscape and provide the pre-requisite accommodation without affecting the amenity of adjacent residential properties."

He described its styling as slightly "retro" which styling was "intended to prompt the St Kilda context in which the design should be read" referring to a number of post-World War II buildings which he regarded as suitable "style manuals" to inform his design. He observed that since there was no consistency in the streetscapes of either Jackson Street or Fitzroy Street "a contemporary architecture based on that developed at the Prince of Wales site adjacent is appropriate. The site's adjacency to the Prince of Wales car park façade requires a "visually tough" architecture." Mr Swansson rejected any suggestion that there was a need for further compromise or transition as at the boundary of a residential zone. His view as we understood it was that this site was to be regarded as having all the usual entitlements of a Business 1 Zone and the zoning was not to be "watered down" by the fact that it was adjacent to a residential zone.

43. Mr Swansson also rejected any suggestion that this building should be either lower or at least no higher than the Prince of Wales car park. He referred to a principle of hierarchy of buildings in which "Parliament House would be on top of the hill" leading to the view that a hotel was a "higher" form of use than a car park and therefore deserves to be taller than it.

44. In accordance with the direction given by Judge Wood, Mr Hunt of Grogan Richards, provided a written reported dated 29 October 1999. Based upon his general expertise and in particular upon a survey conducted of car parking patterns at the Tolarno Residential Hotel in Fitzroy Street St Kilda, he concluded "the proposed provision of nine dedicated spaces will cater for the demand [for parking generated by the proposed hotel] on most occasions." Not infrequent peak demands of 12 spaces and an absolute peak of 16 spaces were also postulated for the subject hotel based on the survey at Tolarnos. The survey was conducted at the Tolarno Hotel on the basis that it was a "similar facility" to the proposed hotel which his instructions informed him would operate as a "budget residential hotel, attracting both corporate guests as well as international and domestic leisure clients. Based on the operation of similar hotels, it is understood that the applicant expects that approximately 60% of trade will be corporate, mainly mid-week with 40% leisure split between domestic and international tourists." We read his report as implying that this precise designation of the hotel and its customer mix were vital to the projections as to parking requirements. During his oral evidence it became clear however, that Mr Hunt regarded his conclusions as applicable to hotels generally. Five star hotels for instance, according to his view, generated no additional parking requirement per room because of the high percentage of international visitors who would not have either their own vehicles or hire vehicles to park.

45. Based on the survey at Tolarno, Mr Hunt extrapolated a parking generation rate (spaces per occupied room) averaging 0.18. In his oral evidence he confessed that an error of method or calculation led to these figures being incorrect. The appropriate figure is around 0.3. The survey was conducted with the use of questionnaires. The hotel under survey provided no off-street parking itself and so there was no electronic or manual count of vehicles on the premises. The total response rate during the survey which included the W.S. Cox Plate weekend in October was 52%. The result of this re-adjustment of Mr Hunt's evidence was that by the time he completed his cross-examination he conceded that the proper requirement for the hotel car park at peak demand was 18 not 12. These spaces he said could nevertheless be obtained by "sharing" the 14 spaces which were already required to be provided for the three retail premises in Fitzroy Street. The requirement of 18 spaces was according to Mr Hunt a "peak" requirement arising on occasions such as Saturday night. He conceded that this would also be time for peak demand for car spaces from the restaurant on Fitzroy Street. Nevertheless, since the other two shops would have no requirement at that time, five spaces would be sufficient to cater for the restaurant, he said. Perhaps in light of the dramatic evolution of his client's expert evidence on the subject of car parking, Mr Canavan QC suggested that an additional condition could be included in a permit to issue requiring the provision by the proponent of an additional three car parking spaces to the satisfaction of the Responsible Authority. When asked whether this would require a further amendment to the plans which his client had certified would not be further amended, Mr Canavan said that he did not desire there to be any direction for further amendment of plans. His client wanted to maintain maximum flexibility. One proposal was that a basement car park could be added. Mr Canavan produced sketch plans depicting this basement car park. It would require an additional crossover to Jackson Street and a change to the layout of the originally proposed ground floor car park. The additional crossover would of course lead to the loss of one on-street car park. Another option said Mr Canavan would be acquisition on a long term basis of an entitlement to use three spaces in the Prince of Wales Hotel car park.

46. In our view the proposed development is unsatisfactory for a number of reasons and no permit should issue.

47. We accept that a residential hotel is an unexceptionable use in this zone and in this location. The design of the proposed building, has obviously resulted from a great deal of thought and within the context of its "retro" style, represents an innovative approach to the problems created by the site. In our view the height and bulk is nevertheless inappropriate on the Jackson Street frontage and adjacent to a heritage building in a Residential 1 Zone. We accept Mr Borelli's observation that residents, even of a heritage building, near an entertainment strip such as Fitzroy Street and adjacent to a Business 1 Zone, must accept a compromised residential environment; but the other side of that coin must lead to the rejection of Mr Swansson's view that a developer on the other side of the interface was obliged to make no compromises. The owners and occupiers of allotments at such zone interfaces must both make compromises. The occupier of the residential allotment must accept a lower residential amenity. The occupier of the business zone allotment must accept a possible requirement that the height and intensity of development that may be appropriate elsewhere in the zone be softened or scaled down at the boundary. Merely because a 15m height limit is "preferred" or possible throughout a Business 1 Zone does not mean that it is the appropriate height for every part of that zone. We also reject Mr Swansson's view that on the basis of some principle of land use "hierarchy" the proposed residential hotel is "entitled" to be taller than the car park. Mr Swansson rightly observed that car parks by their nature must be large and the need for extensive ventilation seriously limits what can be done with finishes and articulation upon the exterior. This means in effect that the Prince of Wales car park is at best a necessary evil, not a point from which future development should be scaled, much less scaled up. Mr Swansson gave us no sure guide as to how to set the "hierarchy" of buildings. One may accept that the religious faith of the Middle Ages rendered the cathedral manifestly the building highest in the hierarchy of a medieval city; but the Prince of Wales Hotel car park may be seen as simply part of the Prince of Wales Hotel, a building equal in hierarchy to this proposed development.

48. We also conclude that the proposal to locate the most heavily trafficked area in the development, namely the pedestrian walkway immediately adjacent to the boundary of No. 12 Jackson Street is a less than adequate response to the problems of overlooking. The disagreement between Mr Vernon, the landscape architect and Mr Swansson the building architect, as to the required or desirable height of the boundary fence, indicates that the problems in this regard have not been solved.

49. The problems just identified principally derive from the developer's decision to locate the largest bulk of the proposed building towards the Jackson Street frontage. Mr Swansson said there was a strong economic motive to retaining the existing shops at the Fitzroy Street frontage and engineering advice was to the effect that no more than one additional storey could be placed above those structures as they now exist. Mr Swansson said that to provide a relatively narrow entrance from Fitzroy Street would be unsatisfactory for a number of reasons. First, it would be distant from the proposed reception area and the bulk of the building. Secondly, a narrow corridor would in an area such as Fitzroy Street be likely used as a urinal, and thirdly, Fitzroy Street is a less than satisfactory "dropping point" for persons trying to alight from taxis and move luggage into a hotel. He suggested that the luggage tends to "walk off down the street". The existing shops had and have no heritage value, however. There is no reason why they could not have been demolished thereby removing any engineering constraints upon the height of the building at the Fitzroy Street frontage. A building of this development's height in Fitzroy Street would relate well to the high profile of the Prince of Wales Hotel immediately to the west and stretching to the corner of Acland Street. Even if such a hotel development retained its front entrance in Jackson Street, the bulk could have been shifted back from the interface with the residential zone at the Jackson Street eastern boundary. Our role is to consider the development proposed by this applicant and to decide whether it conforms to the Planning Scheme and other relevant rules, not propose our preferred development. Nevertheless it is proper to note that at least some of the features in this development proposal which we regard as unsatisfactory derive from constraints which appear to be self-imposed.

50. We accept the evidence put by the objectors and the Responsible Authority that the parking situation in this area is unsatisfactory as are a number of the elements of traffic management. We carried out an inspection of the subject site and its environs and noted many if not all of the features which objectors complained of, including gates damaged, apparently by vehicles completing three point turns at the end of the two-way section of Jackson Street. During our short time in Jackson Street we observed one vehicle drive in and make a three point turn and another one drive in and proceed illegally the wrong way down the one-way section. We also observed a large skip outside the Prince of Wales car park which a number of resident objectors complained had been there for two years. The parking situation, even in the middle of Thursday afternoon, was obviously quite tight. The proponent's evidence and proposals as to parking are most unsatisfactory for a number of reasons. Without necessarily entertaining serious doubts as to the views ultimately expressed by Mr Hunt, we found the manner in which they ultimately emerged somewhat disturbing. It will be recalled that in his written statement he said that nine car parking spaces would be sufficient to meet the demand for on-site car parking generated by the hotel on "most" occasions. In the course of his oral evidence he conceded that the word most would have to be deleted. He doubled the number of parking spaces which were required. His solution which would entail a radical compromise of the parking stipulation made in the permit for the shops was in our view wholly inappropriate. Even if we accept that on a Saturday night the present permit requirements for 14 car parking spaces is to be cut by a process euphemistically described as "sharing" to five, how can even these five car parking spaces be available to other than staff members or "friends of the family" of the shop proprietors, given that it seems they would have to be accessed through a secure car park entrance controlled by the hotel management? Further, we note that the premises on Fitzroy Street are not yet leased, and we are not persuaded that the only peak parking demand by those premises upon the 14 spaces required by the permit would be that generated by the restaurant.

51. We also regard the manner in which the suggestion of three additional car parks was made as being unsatisfactory. The Commercial List in which this proceeding is being heard, offers applicants particular advantages of speedy hearing but there are offsetting restrictions and disadvantages. An applicant for admission to the List must certify that there is no proposal for a further amendment to the plans upon which it relied. The course Mr Canavan asked us to follow entailed the possibility that the plans will be the subject of as radical a revision as the introduction of an entirely new level with new access point. Nor are we attracted to the suggestion that the mode of provision of these additional car parking spaces should be put on the long finger to be dealt with after the issue of a permit. What happens if the development is completed and the issue of the additional car parking spaces remains unresolved? Even if the permit condition prohibits the commencement of the use until the additional car parks are provided, the very completion of the building would provide an almost irresistible pressure upon the Responsible Authority or this Tribunal to agree to a waiver or modification which would not have been countenanced had the issue been determined initially at the substantive adjudication on the development as a whole. Even although both Mr Swansson and traffic engineer Mr Hunt, said that the additional parking level depicted on the sketch plans was achievable, we were left uneasy as to its practicability by its being a late arrival in sketch form and advanced with so little conviction that the proponent desired to have the option of trying some other solution (eg. acquisition of parking rights in the Prince of Wales Car Park).

52. Had our only misgivings as to this development been the threat that it would turn into a "backpacker's hostel" we would have been persuaded that the conditions proposed by Mr Canavan would adequately deal with that concern but our objections to the development are more fundamental than this.

53. The Responsible Authority's determination is affirmed. We direct that no permit issue.