The order of the Tribunal is that the decision of the Responsible Authority is set aside. A permit is granted for the demolition of the existing buildings on the land and for the construction and use of a three level office building at 173 Buckhurst Street, South Melbourne generally in accordance with the endorsed plans and subject to the following conditions:-

1. Before the development starts, amended plans drawn to scale and dimensioned must be submitted to and approved by the Responsible Authority. When approved, the plans will be endorsed and will then form part of the permit. The plans must be generally in accordance with those plans submitted to the Victorian Civil and Administrative Tribunal but modified to show:

a) The finalization of the detail architectural appearance of the proposed building, particularly in respect of its relationship to the adjoining building in Buckhurst Street.

b) The deletion of car space 9, to provide for waste storage at ground floor level.

c) The colours and materials to be employed in the proposed building.

2. The development and use shown on the endorsed plans must not be altered without the written consent of the Responsible Authority.

3. Vehicular crossings shall be constructed in accordance with the endorsed plan(s), at the cost of the applicant/owner to the satisfaction of the Responsible Authority, before the use is commenced or building occupied:

a) Standard vehicular crossings shall be constructed at right angles to the road to suit the proposed driveways using bluestone pitchers or suitably shaped and coloured concrete kerb and channel to match existing kerb and guttering (as appropriate);

b) Any existing crossing shall be removed and replaced with bluestone pitchers or suitably shaped and coloured concrete kerb and channel to match existing kerb and guttering (as appropriate);

c) Any proposed vehicular crossing shall have satisfactory clearance of any side entry pit, power or telecommunications pole, manhole cover or marker or street tree. Any relocation, alteration or replacement required shall be in accordance with the requirements of the relevant Authority and shall be at the applicant's expense.

4. The Applicant/Owner shall do the following things to the satisfaction of the Responsible Authority:

a) Pay the costs of all alteration/reinstatement of Council and Public Authority assets necessary and required by such Authorities for development (including any necessary line marking of parking spaces, and/or erection of parking signs etc).

b) Obtain the prior written approval of the Council or other relevant Authority for such alteration/reinstatement.

c) Comply with conditions (if any) required by the Council or other relevant Authorities in respect of reinstatement.

5. Before the use starts, areas set aside for parked vehicles and access lines as shown on the endorsed plans must be:

a) Constructed to the satisfaction of the Responsible Authority.

b) Properly formed to such levels that they can be used in accordance with the plans.

c) Surfaced with an all-weather seal coat to the satisfaction of the Responsible Authority.

d) Drained and maintained to the satisfaction of the Responsible Authority.

e) Line marked to indicate each car space and all access lanes to the satisfaction of the Responsible Authority.

Parking areas and access lanes must be kept available for these purposes at all times.

6. Outdoor lighting must be designed, baffled and located to the satisfaction of the Responsible Authority to prevent any adverse effect on adjoining land.

7. The walls on or facing the boundary of adjoining properties shall be cleaned and finished in a manner to the satisfaction of the Responsible Authority.

8. All piping and ducting (excluding down pipes) shall be concealed to the satisfaction of the Responsible Authority.

9. No equipment, services and architectural features other than those shown on the endorsed plan shall be permitted above the roof level of the building unless otherwise agreed to in writing by the Responsible Authority.

10. This permit will expire if one of the following circumstances applies:

* The development and use is not started within (2)two years of the date of this permit.

* The development is not completed within (4)four years of the date of this permit.

The Responsible Authority may extend the periods referred to if a request is made in writing before the permit expires or within (3)three months afterwards.

The Responsible Authority is directed to issue a permit in accordance with this order under the provisions of Section 85(1)(b) of the Planning and Environment Act 1987.

Ms Rebecca Stockfeld, Town Planner, appeared on behalf of the Responsible Authority.

Mr Simon Field, Respondent, appeared with Mr Andrew Biggs on his own behalf.

Ms E L Evans, Respondent, appeared on her own behalf.

Mr How Ng, Town Planner, appeared on behalf of the Applicant for Review and Permit Applicant. Mr Ng called Mr David Bick, Conservation Consultant, and Mr Peter Sgourakis, the Project Architect as witnesses in support of his submissions.

1. This is an application to review the decision of the Responsible Authority to refuse permission for the demolition of existing buildings, and the construction and use of a new three level office building at 173 Buckhurst Street, South Melbourne. The Responsible Authority issued a notice of refusal to grant a permit for the following reasons:

i. The demolition of the significant heritage building on site is contrary to Council's Municipal Strategic Statement and Heritage Policies.

ii. The demolition of the significant heritage building on site is contrary to the purposes of the Heritage Overlay, where the demolition would not conserve and enhance those elements which contribute to the significance of the Heritage Overlay.

iii. The proposed development on site, including its location, bulk and appearance is contrary to Council's Municipal Strategic Statement and Local Policies regarding development within a Heritage Overlay and is not in keeping with the existing built form and heritage qualities of the immediate neighbourhood.

iv. The proposed development is contrary to the purposes of the Heritage Overlay, where the development would not conserve and enhance those elements which contribute to the significance of the Heritage Overlay.

v. The development would have a detrimental impact on the heritage streetscape through its bulky appearance.

vi. The proposed development would be an overdevelopment of the site."

2. At the commencement of the hearing Mr Ng applied to amend the permit application by the substitution of amending plans as foreshadowed in a letter dated 6 September 2001. The Tribunal ordered the amendment of the permit application in accordance with this request. Plans by Peter Sgourakis, Architect, drawings numbered TP1 - TP5 all Revision B, are now the application plans for the purpose of this decision. The parties and the witness at the hearing of the application for review made both written and verbal submissions and a number of photographs, plans and other documents were tendered to the Tribunal. The Tribunal inspected the subject site and its locality.

3. The subject land is located on the eastern corner of the intersection of Boundary Street with Buckhurst Street in South Melbourne. The subject land contains a single storey double fronted timber Victorian cottage which was nevertheless constructed after the end of the Victorian period in the first decade of the twentieth century. Boundary Street was the boundary between the former municipalities of South Melbourne and Port Melbourne, and Buckhurst Street to the south west of Boundary Street becomes Bay Street.

4. Land on the north eastern side of Boundary Street falls within an Industrial 3 Zone under the provisions of the Planning Scheme. This area contains a mix of commercial and industrial buildings interspersed with some remnant dwellings and to a lesser extent other buildings, which pre-date the first world war. Land to the south west of Boundary Street, at least within the immediate proximity of the subject land, is residential in character. In particular, the north eastern end of Bay Street is a quite intact residential streetscape, dominated by residential buildings of the late nineteenth and early twentieth century. This residential area is affected by a Heritage Overlay which extends in a minor way across Boundary Street to incorporate four buildings in Buckhurst Street, comprising a small two storey Victorian commercial building on the northern corner of the intersection, and three dwellings on the south eastern side of Buckhurst Street including the subject dwelling, although none of these dwellings are presently used for the purpose of a dwelling. Under this Heritage Overlay the subject dwelling is a significant building.

5. The proposal is to demolish the existing buildings on the land, and to construct a three level building comprising car parking and entry foyers at ground floor level, and two office floor levels above. Vehicular access to the site is from Boundary Street.

6. The two significant issues to be resolved in this appeal are whether or not it is reasonable to demolish the existing building, given its heritage status, and if it is, whether or not the proposed building is an appropriate infill use and development of the land. The heritage issue is the issue which the Tribunal has had most difficulty resolving given the competing considerations which are relevant to this decision in this case. The demolition issue is a threshold issue and I will deal with that matter first.

7. Under the Planning Scheme and the Local Planning Policy Framework the subject dwelling is a significant building within a Heritage Overlay area, which encompasses large areas of the former municipality of Port Melbourne. Clause 22.04-4 of the Planning Scheme Ordinance provides that it is policy that the demolition of a significant building should be resisted unless the building is structurally unsound or cannot feasibly be reused, and the replacement building displays design excellence which supports the heritage significance of the area. It is clear that the Local Planning Policy Framework places very great emphasis on the desirability of the conservation of the existing building.

8. The existing dwelling is in a relatively poor condition. The floor plate displays a characteristic curve which suggests that the structure needs re-stumping, and the painting system is well past its useful service life. The lean to at the rear of the dwelling, and the associated outbuildings, which appear to have contained all the service areas of the dwelling are in very poor condition and are beyond redemption. Nevertheless, the dwelling is otherwise a relatively straight timber dwelling and the main part of the dwelling is capable of restoration and renovation. Ms Stockfeld made it clear that the Responsible Authority is only concerned to preserve and reinstate the four main rooms of the dwelling, and accepted that the lean to and outbuildings could be demolished.

9. The existing dwelling on the land is not being used for the purpose of a dwelling, and indeed on the basis of ordinary community standards, is probably not habitable. A dwelling is a prohibited use within the Zone, and the land has or will shortly lose any existing use right for the use of the land for the purpose of a dwelling. Therefore, if the building is to be reinstated it would need to be reinstated so that it can be used for the purpose consistent with the Zone provisions.

10. The subject land is a relatively large corner lot, and the main part of the existing dwelling is centrally located within the lot with unusually generous side and front setbacks. The Responsible Authority advocates the retention of the main part of the dwelling, and the addition of a two storey extension towards the rear, adapting the building for a purpose consistent with the Zone. While this form of redevelopment may be feasible, I strongly doubt that it would be practicable or economic, and it would certainly be a relatively low order utilization of a valuable industrial site. Moreover, a very small office of this type might be lawful within the Zone, that can hardly be said to be entirely consistent with the Zone purposes. It would be a considerable under development of the land.

11. An issue to be resolved is the question of how the conflicting purposes of the Heritage Overlay and the Zone are to be resolved. In application for review 2000/025304, Waraglen Developments Pty Ltd v Boroondara City Council, I addressed this issue commenting:

19 Heritage controls, and the heritage policy on which they are based, to a degree take precedence over other planning policy considerations. For example, if a particular place is considered to be of such significance that it should be conserved, then this is a consideration which would outweigh the urban consolidation policies of the Planning Scheme. However, I do not think that this means that the ordinary decision making process of seeking to find a balance between competing policies is entirely irrelevant. In particular when the heritage significance of a place is low or marginal, then other planning considerations may be more important to the decision.

12. In my mind there is a conflict between the purposes of a Heritage Overlay and the purposes of the Zone in this case. I think therefore it is necessary to consider in some detail the actual significance of the subject building. I am aware that there is a view in some quarters that where a building is specified as being of significance in a conservation study or review which led to a Planning Scheme amendment to implement a Heritage Overlay, then the issue of the significance of the building is already resolved and should not be a question for an application for review. I do not think that this is correct, as it disregards the explicit decision guidelines of Clause 43.01 of the scheme. I have previously discussed my reasons for this opinion in decisions such as, Application for Review 2000/033857, Metro Giant Pty Ltd v Boroondara City Council, and Application for Review 2001/007378, Vcon Pty Ltd and Four Square Pty Ltd v Port Phillip City Council.

13. The relevant heritage place is the HO1 area, and therefore it is important to consider the significance of the subject building and its contribution to the heritage place, and the effect of its demolition on the significance of the heritage place. It was basically Mr Bicks opinion that the subject building is of modest heritage significance, but makes no significant contribution to the significance of the heritage place, because Boundary Street has the effect of disassociating the subject building from the broader heritage place.

14. Having inspected the site and walked around the locality, I am inclined to agree with Mr Bick's assessment that Boundary Street is a natural division between two areas of quite different character. With a single exception, from most vantage points the dwelling on the subject land makes little or no contribution to the character of the Heritage Overlay area generally. The single exception is that if one stands on the north western side of Bay Street, close to Boundary Street, then the subject site and the adjoining Victorian terrace can be read as a continuation of the residential development of the south eastern side of Bay Street, although not as a particularly important part of that streetscape character.

15. The existing Victorian cottage on the land, is of limited heritage significance, in isolation, its significance derives from its contribution to the overall significance of a heritage place. Clearly, if this dwelling was located in Bay Street, south west of Boundary Street, then it would be difficult to justify its demolition.

16. If one considers the subject building in the context of the development north east of Boundary Street, in particular the small number of buildings within the Heritage Overlay on the side of Boundary Street, again it is of limited significance. As previously indicated the character of this area is of mixed commercial industrial buildings interspersed with some pre first world war dwellings. The loss of this dwelling on this land would make little difference to the character, heritage or otherwise, of land to the north east of Boundary Street, including that small part of the land affected by the Heritage Overlay.

17. It follows from the above conclusions that I am of the opinion that the subject building has modest heritage significance, it makes a very limited contribution to the significance of the heritage place, and as a consequence its demolition would have a limited effect on the significance of the heritage place.

18. In this case I agree with Mr Ng that the question of the demolition of the existing building does in this case raise an issue of fairness. While a Heritage Overlay on a house in a residential area may result in some loss of opportunity and additional costs, in many respects these costs are offset by the benefits accruing to the area through the operation of the Heritage Overlay control. In this case we have a building which is in an Industrial 3 Zone, it is a building of very modest scale located on the site in such a way that if it is to be kept it severely compromises the extent to which the land can be used or developed in accordance with the Zone. The blighting effect on the land in this case is much greater than that which would result in the more conventional residential example described above.

19. In the Metro Giant case already referred to, I discussed the issue of whether or not fairness is a relevant consideration at some length, and in this regard conclude:

58 I agree with these submissions. A decision to refuse permission for demolition would be neither fair, nor orderly nor economic. These are matters which arise from the Objectives of Planning set out in Section 4 of the Planning and Environment Act 1987, and which must be considered by the Tribunal under Section 84 of that act. The Tribunal is reinforced in this conclusion by the requirements of Section 97 of the Victorian Civil and Administrative Tribunal Act 1998. The section simply provides that "the Tribunal must act fairly and according to the substantial merits of the case in all proceedings". Fairness is a relevant consideration in the decision which must be made in these applications, and in my view economic use and financial hardship are aspects of fairness.´

59 However, having reached this conclusion I think it is important to reiterate that where the issue of fairness relates to questions of economic use and financial hardship, the financial hardship must be something other than the opportunity cost which in all cases can be argued to be the consequence of the implementation of all sorts of regulatory environments but in particular planning controls.

20. On balance it is my conclusion that it is reasonable to demolish the existing dwelling, provided that the infill building is of a reasonable standard. In reaching these conclusions I have had regard to:

s The significance of the subject building and its importance in the significance of the heritage place,

s The completing strategic and policy considerations arising from the Planning Scheme, and

s The issue of fairness, associated with the practical economic use of the land in the context of the preservation of the building.

21. Turning now to the proposed new building and its acceptability.

22. The proposed building is a quite substantial three storey building occupying the entire site and built to the street boundaries. While most buildings within the Industrial 3 Zone area are one and two storeys in height, the overall height of the proposed building is not that unusual in the context of this locality. Moreover, both historically and in the case of more recent development, it is common for corner buildings to be built to the street boundaries and often to have a scale which is somewhat greater than nearby buildings in mid block locations. This is evident on two of the other corners of this particular intersection.

23. The Responsible Authority expressed concern about the relationship of the proposed building to the adjoining buildings, that is the adjoining two storey Victorian terrace used as a restaurant in Buckhurst Street, and the adjoining single storey Victorian cottage in Boundary Street. In respect of the two storey terrace building I accept Mr Sgourakis's argument that he has sought to respond to the rhythms created by the adjoining terrace building in all three dimensions. I believe that this is generally successful, but intend to require that this be a matter which is finally resolved through negotiation with Council's Urban Designer, as should be the final section of colours and materials. In relation to the small single storey terrace adjoining the site in Boundary Street, it was argued that the design failed to provide for an adequate transition between the scale of that building and this larger building. I do not agree with this submission. Firstly, the amending plans do seek to provide for a transition, both horizontally and vertically between the subject building, and this adjoining single storey building. In any event, very sharp transitions between the scale of remnant cottages and adjoining commercial/industrial buildings, in this industrial area are a feature of the character of the area.

24. The architecture of the proposal is quite modern and subject to a resolution of the final architectural detail, and the colours of the materials to be employed, I think it is a generally satisfactory building in the context of the character of this locality and of the adjoining streetscape. At ground floor level the building is primarily devoted to car parking, and the entrance foyers are quite small. As a consequence of this the building can hardly be said to have a particularly "active frontage". I agree that the building does not have active frontages to its adjoining streets, but in reality this is a characteristic of this industrial area, active frontages are both more important, and more prevalent in quite different commercial areas such as shopping precincts.

25. In relation to car parking I note that in the officers report to Council the Responsible Authority's own traffic engineer was satisfied by the proposed car parking provisions. I agree with this assessment. In any event, the overall floor areas seem to have been reduced somewhat in the amending plans.

26. It follows from all the above that it is my overall conclusion that a permit should be granted for the demolition of the existing buildings, and for the construction and use of land for a three level office building generally in accordance with the permit application plans.