Mr Jeremy Gobbo QC and Mr Nick Tweedie both of Counsel. They called the following expert evidence during the hearing - planning evidence from Mr Stuart McGurn and Mr Jamie Govenlock, design evidence from Mr Tim Biles and Mr Andrew Hutson, and traffic evidence from Mr Kiriakidis. By consent the author of the relevant photo montages was not required to attend at the hearing.

Mr Robert and Ms Katya Pellicano both appeared in person on the first hearing day.

The construction and use of a multi-storey building for dwellings, shops (as of right), food and drink premises (café as of right), and associated car parking and loading bay dispensation.

Section 79 of the Planning and Environment Act 1987 (failure of the Responsible Authority to make a decision in the statutory period).

Design and Development Overlay Schedule 7 (Prahran/South Yarra and Windsor Activity Centre). This DDO7 is an interim control due to expire on 31 October 2012.

Clause 34.01-1 - "use" permission is required for a dwelling because the frontage at ground floor level would exceed two metres, on a site affected by the Business 1 zone.

Clauses 34.01-4 and Clause 43.02-2 - a permit is in each case required for the construction of "building and works" on land affected by the Business 1 Zone and the DDO7.

Clauses 52.06 and 52.07 - a permit is required for car parking and loading bay dispensation.

LPPF - Clauses 21.01- 21.05, 22.02, 22.06, 22.09, 22.12, 22.13, 22.15 and 22.19.

Also see the Clause 65 general decision making guidelines and the Guidelines for Higher Density Residential Development.

The review site lies on the south-west corner of the intersection of Commercial Road and Grattan Street in Prahran. The site is located about 450 metres west of Chapel Street. It consists of several combined land title areas and has a combined area of 1915 sqm. The subject land is currently improved by five separate commercial buildings, each with a height of one or two storeys. This is a mixed use area, the subject land falls within a Principal Activity Centre and Commercial Road is a Road Zone Category 1.

After the hearing both Tribunal Members together carried out an unaccompanied inspection of the site and surrounds.

1. The subject land at 132-152 Commercial Road, Prahran is an unusually large combined development site at about 1915 sqm, on the south side of Commercial Road, about 450 metres west of Chapel Street. It is proposed in essence to redevelop the site by constructing a nine level building, featuring basement car parking, ground level shops/café and dwellings on the upper levels. Objections have been received and the application has been referred to the Tribunal as a "failure to decide" appeal. The hearing of this review occurred over 13-14 February 2012 and we together inspected the site and surrounds on the following day.
2. To summarise the Tribunal's findings, we regard most aspects of the proposal as straightforward and deserving of approval. We see the key issues requiring more detailed consideration as being whether the design is suitably site-responsive or alternatively constitutes an over-development of the site, and reviewing how the new building would interface with the potential redevelopment of the abutting site to the west. With the former issue, our finding is that the design response is an innovative and high quality one which will sit comfortably in the more eclectic context of this particular section of the south side of Commercial Road. In relation to the western interface, we are not comfortable that the existing design adequately deals with same. We have decided to give the Applicant the opportunity to provide us with revised plans which respond to our comments on this issue.

1. The subject land has an "L" shape, with its northern frontage to Commercial Road, it eastern boundary running along Grattan Street, plus there is a laneway running in an east-west orientation behind part of the rear of the review site accessed off Grattan street. The subject land is currently improved by several fairly non-descript commercial buildings with a height of 1-2 storeys.
2. This is a mixed use area, with primarily shops located along this section of Commercial Road but established residential housing close by to the south. Some nearby prominent buildings/uses are the newly built Cullen Hotel to the immediate east, the Council community building a little further away to the south-east, the Prahran Market building somewhat further east and on the opposite side of Commercial Road, and the very large/tall Pran Central emporium-style building on the Chapel Street intersection. The latter two buildings are handsome period buildings affected by heritage controls.
3. The review site is zoned Business 1, is not affected by any heritage controls but is subject to a Design and Development Overlay Schedule 7 ("DDO7"). The DDO7 plays an important role in providing design objectives and guidelines, designating change areas and setting out preferred building heights and setbacks. The site falls within a Principal Activity Centre and under the Chapel Vision structure plan lies within the Prahran Precinct. Under the heading "Physical context" in terms of "Built form and density", the following statement is made at page 25 of Chapel Vision in relation to this Precinct (with our emphasis):

The Prahran Precinct has a built form with a more predominant larger scale and footprint. Major Emporiums, civic institutions and public housing projects have contributed to this scale. In recent years this has been further consolidated through shop top redevelopment and adaptive re-use of some of the remnant industrial fabric such as the former Red Tulip site. Finer grain retail characterises the Greville Street link to the Station with a blend of finer grain and larger footprints in the area between Chapel Street and the railway line.

1. On 30 April 2008 by direction of the Tribunal[1] a planning permit No. 447/07 was issued for a mixed use development on the subject land, although this permit has since lapsed. This approval in summary provided for a substantial development but in a more modular form, with varying heights (maximum of 30.5 metres) for the new built form across the site. The tallest component was to be in the south-west corner of the site.
2. This section of Commercial Road has a quite different streetscape character for the north side of the road compared to the south. The built form along the north side is affected by a Heritage Overlay, features a significant number of attractive 2 storey period shops, has a fairly consistent pattern of 2/3 storey street walls and otherwise has a more sensitive/fine grain feel to it. By contrast the majority of the buildings on the south side are not affected by heritage controls, are non-descript if not dated looking commercial structures of an eclectic nature and there is no consistent pattern to the height of the street walls.
3. In this context, it is proposed to demolish the existing buildings on the review site and obtain planning approval for the construction and use of a multi-storey building for dwellings, shops (as of right), food and drink premises (café as of right), and associated car parking and loading dispensation. To avoid repetition, full details of the proposal are set out at pages 5-7 of the Council written submission presented at the Tribunal hearing (a copy of which is retained on the Tribunal file). Suffice to say that the proposal would:
   • Have a single level podium and an overall maximum height of 31 metres.
   • Provide for 9 above ground levels plus two levels of basement car parking.
   • Involve a contemporary and innovative design, both in terms of its layout and use of materials. In particular, whilst much of the new building would extend to the maximum 31 metre height limit, in terms of its basic floor plan the building has something of an "elongated butterfly" shape. In particular, its proposed front setback to Commercial Road involves each of the front corners extending to or close to the front boundary, but with the middle section of this setback curving inwards substantially, so as to provide for a setback of over 10 metres at its most inward point. The rear section of the building also spreads out to the east and west because of the "L" shape nature of the review site.
   • Include basement parking for 149 vehicles plus 4 bicycles.
   • Incorporate materials consisting of "pre-cast concrete panels, anodised aluminium, bronze features and a metal canopy"[2].
   • Offer six ground level shops facing Commercial Road, plus a ground level café facing Grattan Street. At ground level there would also be vehicle access via the rear laneway plus pedestrian access to the upper level dwellings. The eight upper levels would be utilised for the new dwellings. There would be a north-facing communal area on Level 1 sitting above the shops, plus a Level 8 rooftop terrace area.

Tribunal appeal, revised plans and scope of involvement of objectors

1. Objections have been received to the proposal. The Applicant has initiated a "failure to decide in the requisite statutory period" merits appeal to the Tribunal. Council's position coming into the hearing, in brief, was that it primarily opposed the proposal as constituting an overdevelopment of the site and failing to meet the objectives of the DDO7/Chapel Vision. Council also raised traffic and parking concerns.
2. In the lead up to the scheduled Tribunal hearing, the Applicant:
   • Circulated revised plans under cover of the Norton Rose lawyers letter dated 23 December 2011, which were put forward for substitution at the hearing.
   • Subsequently circulated a handful of supplementary plans under cover of the Norton Rose letter dated 1 February 2012. This was on the basis that it had been discovered by the Applicant that these handful of plans contained discrepancies or glitches which needed to be corrected.
3. At the beginning of the Tribunal hearing on 13 February 2012, we made orders by consent that the abovementioned revised plans (incorporating the necessary corrections) were substituted as the new application plans for the purposes of the proceeding. Council then confirmed that whilst it maintained its overall opposition to the proposal, it was no longer pursuing its "traffic" concerns and accepted that the "car parking" issues were more secondary rather than being fundamental to whether or not the proposal should be approved.
4. We otherwise over the balance of 13 and 14 February 2012 heard submissions from all parties and received the expert evidence from the relevant consultants listed above which were called by the Applicant. The two objectors Robert and Katya Pellicano attended just on the first hearing day.
5. Given the relevant Planning Scheme provisions[3] only required certain aspects of the proposal to be publicly advertised, the objectors were only entitled to make submissions to the Tribunal to the extent of such required advertising. In particular, the relevant "Notice of an application for planning permit" included the following statement in the "Description of works" section of that notice:

Please note that as the site is located more than 30m from a residential zone and the works are within the preferred height indicated at Table 1 of Schedule 7 to the Design and Development Overlay, notification of the proposal is restricted the proposed residential use and car parking dispensation only ie the proposed buildings and works an built form are exempt from notification.

1. The previous decision of West Valentine Pty Ltd v Stonnington CC [2005] VCAT 224 is a good example of a line of previous Tribunal decisions standing for the proposition that objectors can only present on those planning issue they have the right to object to.
2. Whilst it is hard to see how this Notice could be any clearer about the extent of notification, this "restricted scope to make submissions" situation was confirmed by the Tribunal to the Pellicanos at the beginning of the hearing. For the avoidance of any doubt, we have (as per this West Valentine decision) only taken into account the submissions of the objectors at the hearing to the extent which this restriction allows.
3. In the next section of our Reasons, we have summarised those planning issues arising from the proposal which we see as more straightforward and benevolent.
4. The final section of our Reasons discusses the two key issues on which this appeal has turned, being whether the proposal is adequately site-responsive or otherwise constitutes an over-development of it, and whether the proposal has acceptably responded to the abutting property to the west.

1. Putting to one side for the moment the key issue of whether the proposal is acceptable when assessed against the DDO7, we endorse the credible expert planning evidence of Mr McGurn and Mr Govenlock that the applicable planning framework per se is strongly supportive of the proposal. While this does not create an "open slather" situation in terms of what constitutes a reasonable design response, it is a major "plus" for the proposal.
2. The site is zoned Business 1. A key aspect of the objectives of this zone (with our emphasis) is '...to encourage the intensive development of business centres...".
3. The review site is not subject to any heritage controls and is only subject to one overlay, being the DDO7.
4. In relation to State planning policies and the Melbourne 2030 metropolitan strategy, the Chapel Street activity centre (which the subject land falls within) is nominated as a Principal Activity Centre ("PAC"). This type of PAC location is where planning policy is encouraging quite substantial increases in residential density, to make better use of this type of extremely well serviced location with excellent access to public transport and local facilities[4].
5. With respect to the local policy framework and the Chapel Vision structure plan 2007-2031:
   • Chapel Vision has "Reference document" status in the Stonnington Planning Scheme by way of Clause 22.19 and the DDO7;
   • the proposed 31 metre maximum height of the new building is consistent with the preferred height range of 23-31 metres under Chapel Vision (see Drawing 8). We understand that under Chapel Vision the only two sites in this area nominated as having a height range of up to 31 metres are in fact the subject land and the Jam Factory site; and
   • the subject land forms part of an area where "Substantial" change is being encouraged, being the most intensive of four potential "change areas" applicable under Chapel Vision (see Drawing 7). In fact all of the land on the south side of Commercial Road between the railway and the Pran Central building has this designation. In relation to "Substantial Change Areas", Clause 2.1 of the DDO7 defines this term as follows:
     • Substantial Change Areas are areas that can accommodate significant new development and where substantial changes from the form and character of existing development can be proposed.
6. We acknowledge that Map 1 of the DDO7 identifies certain "Entry Markers" in this area as being the principal road intersections with Chapel Street. Hence the review site is located several hundred metres from the nearest such Entry Marker site, being the corner of Chapel Street and Commercial Road. However we do not see this as changing the fundamental position outlined above, and we accept that this type of large development site and main road location point to the site being suitable for a quite substantial replacement building.

Review site has some very favourable re-development features

1. With reference to the various expert planning and design evidence presented to us and with the benefit of a site inspection, we accept that the overall development site in question (being several land titles combined with an area of 1915 sqm) has some very favourable re-development features, as follows.
2. It does not feature any heritage buildings - the existing commercial buildings are fairly non-descript commercial buildings. The site is relatively flat and does not involve any "vegetation removal" issues. It is unusually large for this locality. It sits on a tram line and is very close to a railway station.
3. As the subject land has a road on its northern and eastern edges, together with a laneway on part of its southern interface, only the western half or so of the review site has a direct abuttal to other privately owned land. These abutting privately owned buildings are also fairly non-descript low rise commercial buildings, that themselves may well be re-developed in the foreseeable future.
4. With respect to car parking, the laneway at the rear provides fairly easy and convenient vehicle access into the car park. The laneway also acts as a buffer area between a potential new building on the review site and the existing building on the southern side of the laneway.
5. As alluded to above, it is a development advantage for the proposal that it is located on the southern rather than the northern side of this section of Commercial Road. That is, whereas the northern side has a more fine grain and consistent streetscape character and is affected by heritage controls, the southern side has no heritage controls, a very eclectic and somewhat tired looking range of buildings and no real pattern in terms of how the street walls present to Commercial Road.
6. Critically, on the other side of Grattan Street lies the recently constructed Cullen Hotel. This is a highly prominent and very robust 7 storey building with a rather box-like shape, albeit with some elements protruding out from its western external wall. Its walls are painted black, with lime green as the main highlight colour. In so far as the Cullen Hotel presents to Commercial Road and Grattan Street, its external walls (apart from the protruding elements on the western side) essentially rise straight up, without any stepping in. This includes a zero front setback.
7. We see the approval and recent construction of the Cullen Hotel as being a "game-changer" in terms of the development potential of the southern side of this section of Commercial Road. On the one hand, we accept that the built form closer to Chapel Street (on both sides of Commercial Road) is more sensitive and has heritage controls on both the north and south sides. By contrast, we see the introduction of the Cullen Hotel building as creating greater flexibility in those locations either side of the hotel (ie on the south side of Commercial Road) for the introduction of relatively ambitious and tall new built form.
8. Similar to our "not open slather" comment above, these favourable attributes of the review site does not mean that its owner can just "let rip" with the intended re-development. However it also needs to be acknowledged that the review site represents an unusual opportunity for a major contribution to be made in this municipality towards greater urban consolidation in metropolitan Melbourne, with a view to reducing Melbourne's sprawl at its edges. In this regard, we endorse the following comments of the Tribunal in McColl v Stonnington CC [2008] VCAT 1318:
   1. It should not be supposed that good planning involves forever trying to minimise proposals. Various significant planning policies and purposes, including that metropolitan document known as Melbourne 2030, look for urban consolidation as well as the provision of a variety of styles and size of dwellings to meet various needs. They particularly look for such development in close proximity to shops and stations and the like; and to capitalise on existing infrastructure by making fuller use of it. Whilst it is right to say that overdevelopment represents bad planning, it can equally be said that underdevelopment compromises many important planning purposes, and is also bad planning. It is the optimum or best balance sought between these competing considerations that should be sought. This certainly does not mean development that underutilises the potential of a site.

1. By the beginning of the hearing, Council advised that it was no longer pursuing any traffic concerns about the proposal. In this context, what also emerged during the hearing was that the Pellicanos were no longer actively pursuing this concern. With the benefit of our site inspection, we are satisfied that the traffic access arrangements for the new basement car park via the laneway are acceptable, and that the local road network should be able to accommodate the additional traffic arising from the proposal. Whilst the occupants of the new building may experience a degree of traffic congestion from time to time, we accept that this goes with the territory in terms of this type of sought-after inner city/activity centre location. We expect that at least during the week many potential occupants would find it attractive to use the nearby public transport options to commute, rather than driving.
2. In relation to parking issues, the key issue raised by Council is whether the proposed basement car park layout is workable or at least requires improvements. In this regard we had the benefit during the hearing of evidence from an experienced traffic engineering expert in the form of Mr Kiriakidis. His evidence was that whilst he conceded that two aspects of the proposal were not strictly compliant with the relevant Australian Standards, he nevertheless (with one proviso) regarded the overall car park layout to be an acceptable arrangement where it would be regularly used by occupants of the building. In relation to the more problematic dimensions of car space 19, he relied on the fact that the access aisles have a more generous width than he indicated was strictly required ie the actual width would be 6.4 metres, where less than 6 metres was required.
3. The proviso was that in relation to the ground level car park layout, Mr Kiriakidis recommended that the wall inbetween the ramp and the nearest car stacker be constructed so as to allow as much cross-visibility as practicable, with a view to minimising the chances of a collision of a vehicle using this ramp at the same time as another vehicle was coming in or out of the nearest car stacker.
4. To the extent that the proposal requires car parking and loading dispensation, Mr Kiriakidis relied on the parking survey work carried out and the favourable features of the surrounding street network in giving evidence that no dedicated loading area was required and that any overflow car parking demand could be readily accommodated on nearby street spaces.
5. We see the evidence of Mr Kiriakidis on these contentious aspects as credible and regard the overall parking outcome as acceptable. In particular:
   • while the dimensions of car space 19 may not be ideal, we expect this will still be a workable outcome;
   • given the generous access aisle width, we accept it is reasonable for the relevant car park columns to be located in the access aisle area, rather than in the parking space area. We also understand that this is necessary to accommodate the proposed car stackers;
   • we endorse his suggestion re modifying the wall treatment alongside the relevant car stacker;
   • we consider the proposed car parking and loading dispensation to be reasonable in all the circumstances.
6. As part of this presentation, Mr Pellicano argued that the "car parking dispensation" aspect of the proposal indirectly and inappropriately allowed the proposed building to be higher than would otherwise be the case. Following this line of thinking, if no parking dispensation was granted, there would be less dwellings proposed and hence a lower intended building. As a preliminary point, we are struggling to see that the scope of our discretion under the relevant Clause 52.06 criteria is so broad-ranging, given that Clause 52.06 more deals with car parking issues of a technical/practical nature. However even beyond that, we agree with Mr Gobbo that this is a somewhat flawed line of thinking. We say this because if greater car parking was in theory required, it would be open to the developer to retain the same above-ground design and simply add more below-ground basement car parking, albeit at a greater cost.

1. Subject to two provisos, we see the unusual location of the review site vis-à-vis the surrounding streets and neighbouring properties as being quite benevolent, such that no significant external amenity issues arise. In particular, the review site has the benefit of having street rather than private interfaces to its north and east and the laneway running along some of its rear area.
2. The first proviso is in relation to the abutting neighbouring property to the west. This is currently a fairly non-descript low rise commercial building. We accept that in its current form, there are no amenity impact issues to speak of with this western property. However we still see a debate to be had whether the proposed new building on the review site adequately allows for the likely future more intensive redevelopment of this neighbouring western side (see discussion below).
3. The second proviso is as follows. On the one hand, it is clear that the restricted scope for the Pellicanos to present to us (see discussion above) did not allow them to make general amenity-driven submissions, as is often the case with neighbours involved in conventional planning hearings involving multi-storey unit proposals. It is on this restricted basis that we have received the Pellicano submissions.
4. On the other hand, as a matter of the Tribunal dealing with the broader range of issues detailed in the relevant planning policies and controls and in considering the proposal from an "orderly planning" basis, we consider it still open to the Tribunal to consider how the proposed building would interface with the existing building on the southern side of the laneway ie the 29-30 Grattan Street building. This building is zoned Business 2 and we understand is three stories high, originally developed purely for offices/commercial use, but in some cases has been retro-fitted to provide for residential units.
5. We find that there would be no unreasonable/unacceptable amenity impacts on the occupants of the 29-30 Grattan Street building. The starting point here is that the laneway itself provides a significant buffer area, noting that the proposal involves this access area being further widened to provide for convenient vehicle access in and out of the proposed building.
6. Taking into account this extra width, but subject to the modification discussed in the paragraph below, we do not see any unreasonable overshadowing, visual bulk, noise or privacy issues. In this regard, we also rely on the expert planning and design evidence presented to us during the hearing. We consider that where any one person chooses to work or live in a building (ie at 29-30 Grattan Street) in an activity centre location, just off a main road and on land zoned Business 2, that person's amenity expectations need to be tempered accordingly. This basic position is reinforced by the fact that:
   • both Chapel Vision and the DDO7 are expressly anticipating a new building on the subject land of up to 31 metres;
   • the subject land is zoned Business 1, where a much more intensive proposed redevelopment should, from a zoning perspective, hardly come as a surprise; and
   • a permit was granted in 2008 for the redevelopment of the review site including substantial built form on the northern side of the laneway (albeit this 2008 permit has since lapsed). The point here is that even under this previous approval, there would be major overshadowing of the Pellicano building.
7. The one modification we do consider reasonable vis-à-vis the Pellicano building (which the Applicant did not offer any particular opposition to at the hearing) is that the relevant south-facing units at level 1 of the proposed building should have their south-facing windows and balconies screened, in the interests of the privacy of both the potential occupants of those units and also the occupants of the adjoining Pellicano building. We rely on the fact that as part of presenting his expert planning evidence, Mr McGurn discussed and supported the use of such screening.

1. Putting to one side for the moment the issue of how the west-facing units in the proposed new building would interface with the potential redevelopment of the abutting land to the west of the review site, we are otherwise satisfied that the new building would offer a good level of internal amenity to the future occupants. The proposal includes adequate balcony areas, a level 8 roof top terrace area, a north-facing communal area on level l, reasonable dwelling layouts and outstanding proximity to local shops, restaurants, public transport etc.
2. We do not see heritage issues as playing any significant role in our discretion. As mentioned, this section of the south side of Commercial Road does not feature any Heritage overlay controls. We see no problem with this type of contemporary building sitting on the opposite side of Commercial Road from the period shops on the north side that do have heritage protection. To the extent that it was queried what role the new building would play in the viewline eastwards along Commercial Road vis-à-vis the historic Pran Central building which lies further east, we see this interface as fairly benevolent given the substantial intervening distance between the two buildings and the fact that the very prominent Cullen hotel building now lies inbetween.

1. It is common ground that the new building would cast some shadow over the plaza area in front of the nearby community centre building as at 3.00pm at the winter solstice, along with the eastern footpath of this section of Grattan Street. The DDO7 provides that new buildings should minimise overshadowing of public spaces as at the winter solstice. DDO7 also provides that new buildings should not cause additional shadowing on the eastern side of Grattan Street between 10.00am and 3.00pm on 22 September. We agree with the Applicant that as per AusGroup Property Pty Ltd v Stonnington CC [2011] VCAT 672, these shadowing benchmarks need to be balanced against the strategic context of the site.
2. Our finding here is that the additional overshadowing in all the circumstances is acceptable. We are conscious that:
   • Following the Ausgroup decision, it is appropriate in considering this overshadowing issue that we give weight to the fact that this is an usually large site for this locality with major strategic importance in terms of its redevelopment potential.
   • As Chapel Vision and the DDO7 indicate a preferred maximum height of 31 metres, it follows that one would expect that any number of potential designs for the re-development of the review site which fully comply with this benchmark would still cause a degree of overshadowing which would not comply with the "overshadowing" benchmarks mentioned above. As per the comments of the Tribunal at paragraphs 51-52 of the AusGroup decision, this suggests that the real issue is whether the extent of the additional overshadowing is unreasonable, rather than an expectation that there will literally be no additional overshadowing at all. We also note that in relation to the potential overshadowing of public spaces, a key word in this section of the DDO7 is "minimise", as opposed to "must avoid".
   • We endorse the Applicant's submission that the expected degree of overshadowing in a south-east direction from the proposed building will affect the plaza area near the community building, but should fall short of the primary park/playground area situated further south. We agree with Mr Gobbo that it seems hard to imagine anyone stopping to rest in this plaza area - it seems more an area which one would simply pass through en route to somewhere else.
   • Whilst the proposal will cause a degree of additional overshadowing between 10 am and 3 pm on 22 September to the eastern footpath of Grattan Street, it will also further activate Grattan Street through the new café and also introduce additional passive surveillance.

FINDINGS OF TRIBUNAL - "DESIGN RESPONSE" AND WESTERN INTERFACE ISSUES

1. We now turn to the two issues on which this proceeding has turned, being whether or not the proposed design is site-responsive to an acceptable level, and how adequately the new building would interface with the potential redevelopment of the abutting property to the west.

Does the proposal constitute an acceptable design response, or an over-development of the site?

1. Any assessment of the acceptability or otherwise of a given design response must reasonably be undertaken not only within the physical context of the review site, but importantly, within the strategic and regulatory framework established by the Planning Scheme. This approach assumes a heightened level of importance in locations such as this which have been earmarked for substantial change. Indeed, it is should go without saying that decisions need to be made bearing in mind the strategic directions embodied within relevant policy.
2. We have already mentioned that the review site is included within the boundaries of the Prahran/South Yarra Principal Activity Centre. That being so, it is also within the boundaries of the Study Area of Chapel Vision - a document that comprehensively outlines the broad strategic vision for the Activity Centre in respect of its land use and built form composition. Both the Council and the Applicant made reference to Chapel Vision in their submissions. We accept that this is an important document in our assessment of this proposal.
3. Chapel Vision is the strategic document which underpins both the Local Policy at Clause 22.19[5] and DDO7. As noted, both the policy and the overlay have been included in the Planning Scheme on an interim basis[6] while the Council prepares an Amendment to introduce a suite of policies and controls that will govern the development and use of land within the Activity Centre on an on-going basis.
4. The purpose of the Prahran, South Yarra and Windsor Activity Centre Policy is to implement the land use components of Chapel Vision. Its objectives refer to providing a mix of land uses and activities, which includes accommodating housing growth and diversity. As there is no dispute amongst the parties that the proposed uses within this development are appropriate to the activity centre context and would further the implementation of this policy (and similar policies within the State and Local Planning Policy Frameworks), we do not propose to undertake a detailed analysis of the proposal against the objectives and policies of Clause 22.19. Suffice to say, we are satisfied that the proposed provision of commercial uses at the ground floor level and residential on the floors above is entirely consistent with the objectives of this policy.
5. Notably, the policy makes no reference to the envisaged built form outcomes. It explicitly confines itself to land use only. This is because development considerations are addressed by DDO7. This Overlay is central to our deliberations and we propose to address it in some detail - particularly given our decision to support a design response that does not comply with the nominated street wall and setback requirements.
6. Under DDO7, the review site is within a Substantial Change Area. It is therefore in an area that can accommodate significant new development and where substantial changes from the form and character of existing development can be proposed. The following discretionary building heights and setbacks have been nominated for development on the review site:
   • A preferred maximum building height of 31 metres.
   • A preferred minimum street wall height of 8 metres.
   • A preferred minimum street setback of 0 metres for that part of the building between ground level and 12 metres, and a setback of 6.0 metres for any part of the building that exceeds 12 metres.
7. The development does not exceed the preferred maximum height and achieves compliance with the DDO7 in this respect. However, the proposed street wall is less than the minimum specified, and the upper level setbacks partly encroach within the nominated 6.0 metres. Specifically, the street wall height is shown as 4.5 metres; and, due it its sculptured form, the building's upper levels partly extend to the frontage and are partly set back in the range of 1.0 to 10.3 metres.
8. The question before us, then, is whether the proposed street wall height and setbacks will result in a built form outcome that will meet the design objectives of the Overlay and represent an acceptable response to the physical and strategic context of the review site.
9. In answering this question, there are a number of key design objectives of DDO7 that we wish to take particular note of:

To ensure that new development sympathetically responds to the Centre's historical urban fabric, identity and character to maintain a viable future of heritage and cultural icons within the Centre.

To encourage innovative, high quality and well designed buildings which complement the existing urban fabric and the mixed use character of the Activity Centre and which achieves the preferred built form outcomes for the Activity Centre as set out in this Schedule.

To achieve a fine grain building rhythm at street level.

To facilitate the redevelopment and/or revitalisation of identified strategic areas consistent with the requirements of this Schedule.

To avoid the under development of land in the Activity Centre.

1. As they form part of the DDO7 provisions, it is fair to assume that, as a starting point, compliance with the nominated height and setback parameters should be influential in achieving a built form outcome that responds positively to the design objectives. The fact that these parameters are not mandatory leads us to the conclusion that alternatives can be considered as means of meeting the relevant design objectives.
2. Design and Development Overlays are inherently quite prescriptive. Commonly, they articulate expectations in respect to the siting and form of buildings. They represent an additional layer of control on development, and are included to achieve a specific policy objective. In other words, they exist for a reason.
3. Generally speaking, the built form requirements of the Overlay should not be departed from lightly. In our view, this applies equally to interim controls as it does to permanent controls. We can find no basis in DDO7 or in Clause 22.13 to support an argument that greater flexibility should be exercised in the assessment of applications under this interim DDO. While the interim control forms part of the Planning Scheme, it is for all intents and purposes the same as a permanent control and, we think, must be given the same weight. Of course, discretion is still able to be exercised in respect of the application of the nominated heights and setbacks, but the analysis that leads to any decision to depart from these should be no less rigorous than would be undertaken within the context of a permanent control. If decision-makers are to deviate from the Overlay requirements, they must be satisfied that it is appropriate to do so having regard to all relevant matters including the physical and strategic context of the land. Perhaps more importantly, they must be satisfied that the relevant design objectives will be met.
4. We have given careful consideration to the site's context and to the design response in deciding that strict compliance with the requirements of DDO7 is not necessary in this instance in order to achieve an acceptable outcome. Specifically, we consider that the context of the review site allows flexibility in the application of the street wall height and setback requirements.
5. We noted earlier in these reasons that the north and south sides of Commercial Road, west of Chapel Street, display quite different characters. The north side has a relative consistency in building style, height and form. There is a prevalence of two-storey period buildings, an evident two-three storey street wall, and a fine grain pattern of development. The inclusion of this side of the road in a Heritage Overlay reflects the heritage qualities of this streetscape. Had the review site been located on this side of the road, we are unlikely to have supported the proposed design response. We believe that, within that particular context, there would be a strong case for requiring compliance with the street wall and setback requirements of DDO7.
6. The south side of Commercial Road - particularly that part west of Izett Street - has a far more disparate appearance. It lacks consistency in building form and scale, and there is no evident pattern of either a street wall or a prevailing 'grain' of development. Buildings range in height from low profile single-storey structures to the 7 storey Cullen Hotel.
7. We are not persuaded that a street wall of 8.0 metres would respond in any meaningful way to existing buildings. Influential in us reaching this view has been the site's proximity to the Cullen Hotel - a recently completed structure which has no prospect of redevelopment, at least not in the short or medium term. It is here to stay and has a marked presence in the composition and appearance of the south side of Commercial Road. The Cullen Hotel rises to 6 storeys on the site's frontage. It is a sheer wall, with minimal relief. That being the case, it provides an opportunity for development on the review site to extend to frontage at a height greater than 8.0 metres and with a corresponding absence of a setback above this. We believe that the design of the proposal has done this successfully. At its eastern end, it incorporates a wall on the frontage that rises to the full 9 storeys. It then steps down to 7 storeys to transition to the height of the Cullen Hotel. Above this 7 storey wall is a partial setback, and here the design adopts a lightweight presentation through the use of bronze aluminium screens (which appear as a series of horizontal louvres). This is successful in providing a recessive appearance to the upper levels. The development will be a comfortable companion to the Cullen Hotel, reflecting the solid nature of its façade, with rectangular window openings in an otherwise solid wall. Its construction to the frontage at this height is acceptable, and will not result in the development having a jarring appearance within the streetscape.
8. To the west, the site interfaces with what we have described as a relatively non-descript two-storey brick building. Given the utilitarian appearance of this structure, the relative likelihood that it, too, will be redeveloped, and the absence of any development further west (given the railway reservation), we do not see any justification for an 8.0 metre street wall to respond to this part of the street. The absence of a consistent street wall on this side of the road; the very obvious separation from the heritage context further east by the Cullen Hotel; the location of the review site proximate to the edge of the overlay; and the physical and visual separation from development further west by the railway reservation, leads us to conclude that the proposed 4.5 metre street wall is acceptable in this instance.
9. The Council argued that the upper levels of the development should be set back from the frontage in accordance with the requirements of DDO7.
10. We note that DDO7 states that reduced upper level setbacks may be appropriate for corner sites and along side streets, subject to an appropriate site-specific design response. Again, having regard to the context of the site and the proposed variation in setbacks afforded by the curvilinear form of the building (described in the Applicant's Urban Design evidence as 'sinuous') we think the proposed design response is acceptable.
11. In reaching this conclusion, we have been significantly influenced by the form of the Cullen Hotel. It rises as a sheer 6 storeys to its street frontage. In additional to its visual presence, it provides the review site with a very strong physical and visual separation from the more traditional buildings further east. These are traditional one and two storey commercial buildings with a relative consistency of siting, scale and proportion. They are within a Heritage Overlay. The Cullen Hotel creates a very clear 'visual disconnect' between these buildings and the review site, which has the effect of diluting any need for development on this site to respond to that context.
12. For the reasons outlined earlier, the adjoining building to the west, together with the railway reservation, similarly do not provide a context which demands 6.0 metre upper level setback in order represent an acceptable response.
13. That said, we agree that some form of setback is warranted and appropriate. The curvilinear form of the building results in a variable setback above the street wall. With the exception of that portion that is on the boundary (proximate to the Cullen Hotel), this setback ranges between 1.0 metre to approximately 10 metres. It avoids the presentation of a sheer wall to the street and provides sufficient visual relief to ensure that the building does not overwhelm the public realm. It incorporates significant visual interest and represents some acknowledgement of the DDO requirement for upper level setbacks. The central 'indent' with its maximum 10.3 metre depth is effective in visually separating the building into two distinct forms as it is viewed east and west along Commercial Road. It will ensure that the development does not appear as one building mass but, rather, a sculptured form with two quite distinct yet architecturally similar styles. We think the proposed siting represents an interesting and acceptable interpretation of the DDO setback requirement, notwithstanding that strict compliance is not achieved. The disparate and eclectic nature of the streetscape provide sufficient flexibility for the adoption of the design response proposed here.
14. Again, we say this having regard to the specific circumstances of the review site. We have considered the locational and contextual matters detailed earlier that act to distinguish the south side from the north side. Had the review site being on the opposite side of the road, we would not have considered the proposal acceptable, given the form, scale, heritage value and pattern of existing development in that location.
15. We consider that the development will, within its context, meet the design objectives of DDO7 as:
    • it responds appropriately to the character of this part of Commercial Road;
    • the building is a well designed piece of contemporary architecture that can fairly be described as being innovative and of a high quality. It will complement the existing urban fabric and is an acceptable interpretation of the built form outcome sought to be achieved by the DDO;
    • its height does not exceed the preferred maximum height specified in the DDO. We can find no basis in the provisions of DDO7 to support the Council's submission that what is sought to be achieved is a range of heights across the site, rather than a uniform maximum of 31 metres;
    • the northern façade of the ground level displays an evident pattern arising from individual shopfronts which reflect those existing in Commercial Road and achieves a fine grain building rhythm at street level;
    • it avoids underdevelopment of one of the few parcels of land within the Activity Centre that has been earmarked for substantial change and with the 'highest' maximum preferred height.
16. Our conclusion is that the development is an acceptable response to the physical and strategic context of the review site and that is represents an acceptable built form outcome, notwithstanding that it does not meet the street wall height and setback requirements of DDO7.
17. We wish to conclude this section of our Reasons by emphasising that this decision is not be taken as saying that DDO7 should not be complied with. Within a different context, we may well have found that the preferred heights and setback specified in DDO7 should have been met. We have made our findings on the facts and circumstances of this particular case.

1. Given the strategic and policy imperatives to increase the density of development in Activity Centres, orderly planning requires that consideration be given to the effect a proposal may have on the development potential of adjoining land. Equally, care must be taken to ensure that buildings will provide an acceptable level of amenity for their residents in the event that adjoining land is developed. We are not persuaded that these issues have been satisfactorily addressed in this application, specifically in relation to the interface with the property to the west.
2. The Guidelines for Higher Density Residential Development[7] include the following objective:

To ensure areas can develop with equitable access to outlook and sunlight.

Consider the possible future development on adjoining sites and allow, as best as possible, or an equitable spread of development potential throughout the area.

1. At the first floor level, the balconies of five (5) dwellings extend to the western boundary. The west facing windows of these dwellings are set back a minimum of 1.455 metres from the boundary. At the levels above, both the windows and balconies are set back a minimum distance of 1.455 metres.
2. The proximity of these sensitive elements to the boundary does not display sufficient regard for either the development potential of the adjoining site (which itself is included in the Substantial Change Area) nor for the consequential impacts on the amenity of these dwellings in the event the neighbouring land is re-developed in a multi-level form.
3. It was put to us that any development on this neighbouring land will be orientated to the west, given is abuttal to Porter Street and open aspect created by the railway reservation beyond. It was suggested that any dwellings on that land would have their outlook toward the west, with the eastern side of the building devoted to passageways and other non-sensitive areas. That may well be what eventuates, but we have no evidence before us that this will be an acceptable design response in other respects when regard is had to the broad range of considerations that would be relevant in any assessment.
4. Our concern lies with the relatively narrow nature of the adjoining allotment - already a constraint on its development potential. Submissions were put to us that the strategic designation of the review site as part of a Substantial Change Area, and the limited nature of locations with a 31 metre preferred maximum height, mean that development on the site should be maximised (or optimised). The same can be said for the adjoining land to the west. We are concerned that the siting and design of the dwellings on the western side of the proposed development unreasonably constrain the development potential of this land. It is also already constrained by its relatively narrow width and restricted site area. In our view, it should not be further unreasonably constrained by the balconies and windows of the development on the review site.
5. This does not mean that there should be no windows or balconies in the western elevation of the proposal. There are obvious site efficiencies and desirable urban design outcomes that are facilitated, and achieved, by including such elements in this side of the building. What we think needs to be done is for the development to be more responsive to protecting the amenity of its residents in the likely event that the neighbouring land is redeveloped. If this is achieved, then the constraint on the development potential of the adjoining site is also, as a consequence, lessened.
6. We are not supportive of balconies extending to the boundary. They are not conducive to achieving the equitable spread of development potential referred to in the Guidelines. This siting exacerbates the impact that an adjoining building will have on these elements. All balconies should be set back off the boundary.
7. In respect of the upper level balconies, we are concerned that they will suffer an unreasonable loss of outlook, and a potential sense of enclosure as a consequence of adjoining development. This is because the balconies are designed as indented features that are roofed and are enclosed on three sides by full-height walls. The only outlook, or aspect, is to the west via a 2.0 metre wide opening. In our view, occupants of these balconies will experience an unreasonable loss of amenity arising from the future development on the neighbouring land.
8. We have concluded that the dwellings along the western side of the building need to be re-designed to address this issue. While we will not be prescriptive in terms of how should be done, we note that larger balcony areas with a greater north-south dimension, together with a reduced extent of enclosure by dwelling walls, would go part-way in achieving a greater level of amenity for the associated dwellings. Greater setbacks from the western boundary should also be provided. Rather than refuse the grant of a permit, we have decided to allow the Applicant the opportunity to prepare amended plans for our consideration. As outlined in our order, the plans must be circulated to the other parties for comment.

1. We have provided our interim findings above and now await the further information from the parties, pursuant to our Orders 2 and 3.

[1] See Oxdra Pty Ltd v Stonnington CC [2008] VCAT 1864.

[2] See paragraph 3.3 of the Council written submission.

[3] See paragraph 4.0 of the DDO7 and Clause 34.01-4 of the Business 1 zone.

[4] For example, see Clauses 11.01 and 11.04 of the State planning policy framework. At Clause 11.04 under the heading "Principal and Major Activity Centres", one of the policy objectives is for Principal and Major Activity Centres to "Have the potential to grow and support intensive housing developments without conflicting with surrounding land uses".

[5] Prahran, South Yarra and Windsor Activity Centre Policy

[6] Both the Policy and the DDO7 expire on 31 October 2012.

[7] Department of Sustainability and Environment, 2004, referred to in the policy guidelines of Clause 15.01-2