1. The Japanese Mountain Retreat operates from 14 Mountain Crescent, Montrose (adjacent land) and is subject to various permissions for the uses and development currently occurring on the adjacent land. Relevantly, Planning Permit No. YR 2008/1585 (2008 permit) authorises the adjacent land for the use and development:

... for a Wellness Retreat and buildings and works for the extension to the existing dwelling including buildings and works within the Erosion Management Overlay.

1. The overall proposed site plan endorsed under 2008 permit depicts various land uses operating from the adjacent land. Below are extracts of TP22 rev B (sheet 2 of 5) endorsed by council on 15 November 2021:

1. The applicant relies upon an affidavit[3] in which she affirms that:
   • the Quitt Family Trust purchased the land in 2021;
   • the western parcel is presently developed with a dwelling;
   • the 'other parcel' (southern) is vacant;
   • shortly after settlement of the land occurred, two chefs employed by the Japanese Mountain Retreat occupied the existing dwelling on the western parcel as part of their employment package;
   • the existing dwelling is proposed to be renovated as depicted in architectural drawings prepared by Michael G Dore (TP30, TP31 Rev B, TP32 Rev B & TP33 Rev C;
   • once the renovations are complete one of the chefs presently residing in the existing dwelling will again occupy the renovated primary residence and will:
     • manage entry and admission for guests of the bed and breakfast;
     • cook and serve breakfast; and
     • arrange for cleaning, gardening, maintenance and repairs.
   • Bookings for the bed and breakfast on the land will be managed by the business operating on the adjacent land - Japanese Mountain Retreat, including via its website.
2. In viva voce evidence the applicant said as follows:
   • guests have the option of dining in the outdoor community area but in inclement weather guests will be invited to dine inside the dwelling on tatami mats on the floor of the living area;
   • meals including dinner will be prepared by the chef for guests upon request;
   • there will be a limited choice of meals on offer;
   • meals such as breakfast and dinner will be included in the pricing structure with the accommodation;
   • the chef proposed to reside in the dwelling will not be preparing meals for the Japanese Mountain Retreat; and
   • cleaning services will be undertaken by staff employed by the Japanese Mountain Retreat but it is likely that more staff will be required for such services.
3. Further, in response to a question from council regarding the table and chairs in the kitchenette area, the applicant accepted that nothing prevents guests from eating in their rooms. However, she says that this will be discouraged.
4. In response to a question about staff not wanting to reside in the primary residence on the land, the applicant said that she had not contemplated that arrangement and that lodging was an attractive component of the employment package.

1. The land is within the Green Wedge Zone A, Schedule 2 (GWAZ2) of the scheme in which a planning permit is not required for use of the land for a bed and breakfast.
2. Section 1 of the table at clause 35.05-1 of the scheme states (as relevant):

1. Hence, if the conditions set out in the table above are met, the use of land for a bed and breakfast in the GWAZ2 of the scheme does not require a planning permit.
2. Use of land for accommodation in the GWAZ2 is prohibited and this includes use of land for a residential hotel.[4]
3. The following terms are relevant in this proceeding:

1. Prior to the filing of the application for declaration by the applicant, there ensued significant correspondence between the parties. The applicant and council provided summaries of this correspondence.[5] I have reviewed this correspondence and do not consider it to be directly relevant to the determination of this proceeding.

1. The applicant's submission sets out the principles relevant to the proper characterisation of land use. Council adopts the principles as articulated by the applicant.[6] Thus, it is convenient to extract the principles relied upon by the parties at this point.[7]

33.1 In characterising the proposed use of premises it is always necessary to ascertain the purpose of the proposed use. > > 33.2 The use is characterised by reference to the real and substantial purpose of the use of the land. > > 33.3 It is wrong to approach the ascertainment of purpose of proposed use on the footing that it must fit within one (or more) of the uses defined in a scheme, at least that is so when there is provision for innominate uses in the scheme. > > 33.4 The ascertainment of purpose of a proposed use may yield the result that the purpose revealed very largely falls within a defined use. The extent to which it does not may be so trifling that it should be ignored. In that event the purpose as revealed should be taken to fall within the defined use. Or, to put it another way, a purpose does not need to fit a defined use but if it very largely falls within a defined use it may be so characterised.

34. In addition to this:

34.1 The land use terms in clause 74 of the Scheme often overlap.

34.2 If a use clearly falls within more than one specified land use term, the proposed user is entitled to take advantage of the most (or more) favourable provision.

34.3 However, some parts of the Scheme are structured so as to invite a choice between different land use terms, at least where an activity can obviously or commonly fit within a specified term. In this context it is the intent of the Scheme that a choice be made, having regard to what is the best fit (or in the present context, the better fit).

34.4 If a proposed use comfortably fits the definitions of two specified land use terms, the choice will often involve giving preference to the more specific term, But it is not always clear which is the more specific form.

34.5 Usually, it will be necessary to identify critical differences between land use terms. These may flow from comparing the definitions but sometimes the words of the definitions will be vague and the task of interpretation will be more challenging.

34.6 Words should be given their natural meaning, having regard to the term itself which is being defined.

1. The applicant says that in applying the principles to the facts and evidence in this proceeding, the proposed land use is for bed and breakfast for the following determinative factors:
   1. there will be a resident in the primary residence occupying it as his/her primary place of residence; and
   2. this resident will manage guest arrival and departure, preparation of meals and manage the property.
2. In addition, the applicant says that the proposed land use:
   1. is not for residential hotel because the proposal includes a building which is to be used as a dwelling;
   2. will be conducted from a dwelling that is to be purpose built; and
   3. is conducted from a building in which the four rooms[8] are in close proximity to the primary residence including the need for guests to park their vehicles and walk past the residence to access their rooms.
3. The applicant also highlights the four rooms are linked to the primary residence via decking with a roof above.
4. In reply submissions, the applicant accepted that if the primary residence is no longer occupied by a resident who conducts the bed and breakfast, that use would need to cease operation from the land. But the applicant says, that is the case for any other bed and breakfast.
5. The applicant relies upon the decision of the Tribunal in Hoppach v Wangaratta RCC[9] (Hoppach) and particularly paragraph 34 which states:
   1. I find that the three pods attached to the original dwelling by a central covered walkway constitute part of a single dwelling. It does not matter that the format is not that of a larger home with a number of bedrooms off a corridor such as that commonly found in a traditional Bed and Breakfast. In my opinion, it is reasonable to afford some flexibility to the form of the development to enable it to provide more generous facilities for guests, provided that the structure is designed to operate as an integrated whole.

1. Council says that the proposed land use is not for a bed and breakfast because:
   1. of the lack of physical and functional connection between the dwelling and the four rooms;
   2. the resident of the dwelling is not the owner of the land; and
   3. the resident is not providing the accommodation.

1. Council submits that there is very limited physical and functional connection between the dwelling and the four rooms. It says this is evident from the plans for the following reasons:
   1. there are no internal spaces within the dwelling that are accessible to guests;
   2. the only physical connection is the covered walkway;
   3. there is no reception area for guests in the dwelling;
   4. the modest size of the kitchen to cater for up to eight guests;
   5. the outdoor dining area that does not provide any form of covering. Thus, in inclement weather, meals will be taken by guests to their rooms.
2. Council relies upon the decision in Stuckey v Yarra Ranges SC[10] (Stuckey) in which the Tribunal stated:
   1. The question is whether the construction of the three units and their use to accommodate persons away from their normal place of residence would fall within the land use definition of bed and breakfast or whether they would more appropriately fall within the land use definition of group accommodation. This depends on how one characterises the three individual units. Do they form part of the existing dwelling in terms that they could be said to be outbuildings normal to a dwelling or, if not outbuildings, are they otherwise part of the dwelling? Alternatively, are they separate dwellings used to accommodate persons away from their normal place of residence within the meaning of the definition of group accommodation?
   2. This is a question of fact, which must be determined having regard to the circumstances of each particular case.
   3. In the present case, I do not consider that the three units can be characterised either as outbuildings normal to a dwelling or as part of the dwelling itself for the following reasons.
   4. I accept that a dwelling does not need to comprise only a single building and that in other cases the Tribunal has accepted that a bungalow, a habitable outbuilding, or a single unit without all the facilities referred to in the definition of dwelling may be considered to be part of a dwelling. For example, in Hoppach v Wangaratta RCC, the Tribunal needed to consider whether three "pods" constructed to the rear of an existing dwelling running off an interconnected, and closed veranda were part of the dwelling. The Tribunal held, on the particular facts of that case, that there was sufficient integration between the various accommodation units and the rest of the dwelling, with food being offered to guests from the central kitchen, to support a finding that the three pods constituted part of a single dwelling and consequently the proposed use of this structure could be characterised as a bread and breakfast.
   5. However, what we have in this case are three separate identical units all of which contain the basic facilities specified in the definition of dwelling, as well as a bedroom, bathroom and separate living room. They have no physical or functional connection to the existing dwelling. In these circumstances, I do not consider that the three units can be said to constitute outbuildings normal to a dwelling and nor are they part of the existing dwelling.

1. I further find that the units bear no relationship to the existing dwelling either in terms of physical or functional integration with it.
2. Accordingly, I find that the units are not a part of the existing dwelling. On this basis, even though they will be used to provide accommodation for persons away from their normal place of residence, because they are not part of the dwelling the use of the land cannot be characterised as bed and breakfast.
3. Council submits that the facts before me are akin to the facts in Stuckey and thus, the proposed use of the land is not for a bed and breakfast. It says that the fact scenario in this proceeding can be distinguished from the material facts in Hoppach because:
   1. the accommodation pods were to be constructed next to an existing dwelling which would only be receiving minor works;
   2. the existing dwelling was to be converted into a lounge, office/reception area, communal dining and large family room for shared use by the residents and guests;
   3. a large commercial kitchen was available;
   4. the guests were reliant on the resident's dwelling for the shared leisure opportunities;
   5. the residents were the owner of the land and his family; and
   6. the accommodation pods were small in size and comprised single rooms and ensuites and did not provide any food preparation facilities or kitchen sinks.
4. Council submits that in Hoppach the Tribunal emphasised the integration of the accommodation for the guests with the dwelling as follows:[11]
   1. Importantly, in terms of the proposed use of the rooms to be made available for visitors, they are reliant on the owner's facilities for any meals that may be desired, and also on the original building for shared leisure opportunities. Whether or not each and every visitor takes advantage of this opportunity is not the point. There is clearly a large kitchen and meals area and food (including breakfast) will be offered to guests. Similarly, sizeable communal dining and family rooms will be provided. The integrated nature of the guest rooms and the remainder of the property is facilitated by a direct physical connection between the various accommodation units by an enclosed walkway, leading to the shared internal and external areas of the property.

1. Having regard to the above, it is apparent to me that the development shown on the most recent set of plans (Appendix C) suitably fits within all elements of the definition of a Bed and Breakfast in the planning scheme. In addition, it also accords with what I regard as the ordinary understanding of what this use entails which, to my mind, centres around the owners residing at the property and conducting the use, the rooms being limited in facilities which are geared towards only sleeping and bathing, the provision of shared leisure facilities and also the offer of meals (at least breakfast) in a shared dining area.

1. Council says that a 'natural reading' of the land use definition 'bed and breakfast' contemplates the 'resident of the dwelling' and the provider of the accommodation services are 'one and the same'.[12]
2. Council relies upon the definition of bed and breakfast and submits:
   1. there must be a dwelling in which the resident lives;
   2. the resident of the dwelling must use the dwelling to provide accommodation; and
   3. the accommodation must be provided for persons away from their normal place of residence.
3. Council says the evidence is clear, the accommodation is not provided by the resident because he or she is a third party employee. Council submits it is not sufficient for a third party to reside in the dwelling as part of their employment contract and manage the accommodation on behalf of another person or entity.

1. Council says that the proposed use is a form of visitor accommodation and most likely 'residential hotel' because the accommodation proposed is occurring in serviced rooms in which the rooms will be cleaned daily, beds will be made for the guests, and fresh towels and linen will be provided daily. Further, the accommodation is provided and managed by the Japanese Mountain Retreat.
2. Council relies on advertising occurring on the website of the Japanese Mountain Retreat to submit that the proposed use is part of that operation rather than a bed and breakfast. The extract from the websites is below:

1. There is no dispute that the general task for a decision maker in characterising the use of land is to ascertain the real and substantive purpose of the use of the land in question.[13]
2. In Shire of Perth v O'Keefe and Anor[14], the High Court of Australia was considering the prohibition of a use through a by-law where the land in question had been used for pottery and the by-law prohibited light industry. Kitto J stated:

The application of the by-law in a particular case is therefore not to be approached through a meticulous examination of the details of processes or activities, or to a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use* of the premises at the material date. This question being answered, it remains only to enquire, when a use that is being made of the premises at a later date is challenged is not being authorised by By-law 370, whether that use is really in substantial use for the designated purpose. That will often be a question of fact and degree: ... and for that reason border-line cases will inevitably arise in which opinions will differ....[15]

(*Tribunal emphasis)

1. Further, in National Lifestyle Villages Pty Ltd v Wyndham CC[16] (National Lifestyle), the Tribunal set out an approach to land use characterisation and specifically stated:
   1. If a use clearly falls within more than one specified land use term, the proposed user is entitled to take advantage of the most (or more) favourable provision. But it will not always be appropriate to regard a use as falling within more than one specified land use term. This is because some parts of the scheme are structured so as to invite a choice between different land use terms, at least where an activity can obviously or commonly fit within a specified term. The present case is of this character. As the nesting diagram in clause 75 of the scheme demonstrates, there are many different types of uses that might be called "accommodation". Two land use terms which are nested within "accommodation" are "camping and caravan park" and "residential village". Having regard to this context, it is the intent of the scheme that in characterising a use of the type proposed a choice be made having regard to what is the best fit (or, in the present context, the better fit).

1. Usually it will be necessary to identify critical differences between land use terms. These may flow from comparing the definitions. Sometimes the words of the definitions will be vague and the task of interpretation will be more challenging...;[17]
2. To distinguish one land use from another land use, one needs to examine the essential requirements of the definitions and ascertain any key qualitative differences.
3. I proceed on the basis that the conditions set out for bed and breakfast can be met and note that council did not argue that the conditions could not be met.
4. A bed and breakfast is included within the land use term 'dwelling'. For a building to be used as a dwelling it must be self-contained and include: a kitchen sink, food preparation facilities; bath or shower and toilet and wash basin. Dwelling includes outbuildings and works normal to a dwelling.
5. I agree with the observations of the Tribunal in both Stuckey[18] and Cotsonis v Darebin CC[19] (Cotsonis) that there are two components to the definition of dwelling, that is, a use component and a development component. Further, the key component of use as a dwelling relies upon the self-contained nature of the residence. Whereas the development component relies upon the facilities listed in the definition being provided.
6. There is no dispute before me that the proposed building can and will be used as a dwelling, particularly when the existing building (dwelling) is so used. Further, there can be no dispute that the proposed dwelling now contains all the facilities in a dwelling from a development component.
7. I also adopt the findings in Hoppach that:
   • the format in a built form sense for a bed and breakfast need not be one building with several bedrooms within that primary building; and
   • some flexibility to the built form is permissible to enable generous facilities for guests.
8. However, the proviso is that the building is designed to operate as a whole in order to be used as a bed and breakfast.

1. In a physical sense, a bed and breakfast requires a dwelling to be used to provide the accommodation in a built form sense compared to a residential hotel that simply refers to 'serviced rooms'.
2. I find as a matter of fact the rooms shown on the plans referred to earlier do not provide food preparation facilities, notwithstanding they provide a sink, coffee station and mini bar. Therefore, the rooms are not dwellings because they are not 'self-contained residences'. The facts in this proceeding are readily distinguishable from those in Stuckey because the Tribunal found the units:
   • each contained the basic facilities specified in the definition of 'dwelling'; and
   • had no physical or functional connection with the existing dwelling.
3. I also note that in Stuckey the Tribunal made comments regarding additional plans tendered at the hearing of that matter. This additional material comprised the 'Buyer's Guide' and provided further details as to the layout of the units in Stuckey. These details included a sink and stove in the kitchen and laundry whereas the application for planning permit only depicted a sink in the kitchen and no laundry was shown.[20]
4. It is also relevant that in Stuckey the Tribunal said:[21]

In my view, the provision of food preparation facilities does not require the provision of a fully equipped kitchen. A bench, a kettle and a microwave will enable food to be prepared. There is nothing in the permit application or the material submitted by the applicant at the hearing, which indicates that guests will be provided with meals by the resident of the dwelling. Rather, there is a clear implication that the guests occupying the units will be self sufficient...

1. In this proceeding, the material before me is that guests will be provided with meals, including breakfast and dinner upon request.
2. Further, I find that the four rooms are close to that part of the building that will be used by the resident as the primary residence, and that the four rooms form part of the dwelling because they are connected by the timber walkway and roof covering over this walkway.

1. I agree with council that the quality and nature of the rooms considered in this proceeding can be distinguished from those being considered in Hoppach.
2. The rooms appear to offer more space and amenities, in that they provide a bedroom and ensuite at first floor and lounge room with a private garden and spa at ground floor.
3. The definition of bed and breakfast does not mandate a level of accommodation to be offered. Again, the term 'bed and breakfast' indicates that at a minimum a guest will be provided with a 'bed' or some form of sleeping arrangement. However, the quality of the amenities surrounding the sleeping arrangement does not mean the use is something other than a bed and breakfast, it may be a 'luxury' bed and breakfast.
4. There will of course be examples where the quality of the amenities offered, in combination with other aspects such as the lack of physical and functional association, or lack of provision of meals leads a decision maker to conclude the land use is not for a bed and breakfast.
5. However, in this proceeding, the quality of the accommodation does not derogate from the land use being a bed and breakfast.

1. The functional relationship requires the dwelling to be occupied by a resident in addition to operation as an integrated whole.

1. The evidence before me is that guests will be greeted by the resident upon arrival to allow access to their room etc. Council highlights the lack of a reception area to meet the guests as an indicator the land is not being used as a bed and breakfast. I fail to see how that is particularly relevant, most dwellings do not have formal reception areas to meet guests. At best, a typical dwelling may have an area near the front door for visitors to the dwelling, to gather. The proposed plans depict a 'standard' dwelling entry arrangement at the front door.
2. Further, I consider it appropriate to highlight that processes for arrivals and departures of guests have changed over time. In the modern world, there is little need for the completion of documents and exchange of information at arrival or departure because this is all done generally online.
3. Council also relies upon bookings being managed through the Japanese Mountain Retreat as a further indicator that the use is not for a bed and breakfast. It is important to recognise that many accommodation providers now, regardless of the land use characterisation will engage the services of third party agencies to manage bookings online. The use of a third party to manage bookings does not detract from the use of the land for a bed and breakfast. The definition of bed and breakfast does not require the resident of the dwelling to directly manage the bookings. I cannot see anything in the definition of bed and breakfast that even implies the resident of the dwelling must manage the bookings.

1. In terms of the operation as an integrated whole, guests are offered meals such as breakfast and dinner that are provided from the servery which connects to the kitchen. The meals are then consumed either in the outdoor communal area or inside the primary residence. Thus, whilst there is no need for guests to enter the primary residence for a meal, on the evidence before me, they are not precluded from doing so. In fact, in inclement weather they are invited to do so. Moreover, the resident of the primary residence is employed to manage guests on the land and as such is highly likely to be present on the land to assist the guests.
2. I find that in terms of meals, there is a functional association with the primary residence because that is where the meals are to be prepared and served. The fact that a meal can be consumed in an outdoor living area or within the guest's room does not detract from a bed and breakfast use.
3. I add that even in a more traditional bed and breakfast where bedrooms are within the primary residence itself, if a guest does not want breakfast, then he/she does not have breakfast on the site. Moreover, the definition of bed and breakfast does not prevent a guest from consuming breakfast in the guest's room. Nothing in the definition requires meals to be provided to guests or to be provided indoors. Rather, the land use term itself refers to 'breakfast' raising an expectation that breakfast at the very least is provided or offered to guests.
4. The evidence before me is that guest packages include breakfast and can also include dinner. Having regard to the material before me, I am satisfied meals are provided to guests and that they will generally be consumed in the outdoor communal space, which forms part of the garden area to the dwelling to be constructed on the land. Therefore, there is a functional relationship between the guests and the primary residence.
5. Council also said that the lack of a commercial kitchen distinguishes the facts before me from that in Hoppach. I agree that the plans show a typical sized kitchen for a dwelling, however the size of the kitchen does not indicate whether meals can be prepared for guests.

1. Council has relied on the decision in Hoppach and the dwelling in that case being used for shared leisure opportunities specifically at paragraphs 32 and 35 set out earlier. As far as I can tell from Hoppach, the opportunities for shared leisure were not fully articulated other than a passing reference to access to 'sizeable communal dining and family rooms'.
2. From the evidence before me, I acknowledge that because of the generous nature of the four rooms and the private outdoor spa, leisure opportunities beyond meals do not occur organically. However, in my view the generous outdoor communal dining area and the provision of meals indoors in inclement weather is sufficient integration in a functional sense.

1. Council says that the accommodation is not being provided by the resident of the dwelling but by the owner of the land. This is because the resident is an employee of the owner, and as such it is more likely to be a transient residency. Thus, council says the use cannot be for a bed and breakfast.
2. In essence, council submits that the resident should be one and the same as the provider of the accommodation.
3. I disagree with council's submission because nothing in the language or grammar of the definition leads to this conclusion. Rather, the natural reading of the definition of bed and breakfast is that the dwelling must be occupied by a resident. That is, there must be a person who resides in the dwelling, the relationship of that resident to the land is irrelevant. The resident of the dwelling could be an owner, tenant or employee. The term 'resident' infers a degree of permanency with respect to the residency of the person in the dwelling. Whilst traditionally permanency of residency may be easier to comprehend if one owns the land, I cannot see how an employee subject to an employment contract infers a different form of permanency with respect to residency of the dwelling. This is particularly so, when the resident is employed to manage and operate the bed and breakfast.
4. Council says there is a difference between 'providing' the accommodation and 'assisting' or 'facilitating' the delivery of the accommodation.
5. The term 'provide' is defined in the Macquarie Dictionary as:[22]
   • - Verb (t) 1. To furnish or supply.

2. to afford or yield

3. Law to arrange for or stipulate beforehand, as by a provision or proviso

.....

1. I disagree with council's submissions regarding the definition of bed and breakfast. I find that the definition requires:
   1. the dwelling as the physical form of building to accommodate persons away from their normal place of residence; and
   2. the dwelling to be used by a resident as his/her permanent residence.
2. Viewed in this light, I find that a dwelling is proposed, and the four rooms comprise part of the dwelling, and that the dwelling will have a resident with permanency of occupancy.
3. Even if I am wrong about the interpretation of the definition, I nonetheless find that the resident is furnishing or supplying the accommodation because it is the resident that guests interact with:
   • upon arrival;
   • for meals;
   • on departure;
   • and for any service needs.
4. Further, it is the resident that arranges for maintenance, cleaning, gardening and the like. The situation is no different to a more traditional bed and breakfast, where an owner employs a cleaner to clean the primary residence, or a linen service to provide clean linen, or a gardener to maintain the garden. The definition does not require these services to be performed by the resident.

1. Having regard to the above and in particular the plans and evidence of the applicant, I find that the proposed use of the land would be a bed and breakfast.

[1] The submissions and evidence of the parties, any supporting material given at the hearing, and the statements of grounds filed; have all been considered in the determination of the proceeding. In accordance with the practice of the Tribunal, not all of this material will be cited or referred to in these reasons.

[2] Source: MapshareVic database - labels added by Tribunal.

[4] See section 3 of the table at clause 35.05-1 of the scheme.

[5] See applicant's submission at [26-32] and council's submission at [15-22].

[6] See council submission at [38-39].

[7] See applicant's submission at [33-34].

[9] [2009] VCAT 2785.

[10] [2014] VCAT 295.

[11] [2009] VCAT 2785.

[13] Pacific Seven Pty Ltd v City of Sandringham and Ors [1982] VicRp 14; [1982] VR 157 at page 161.

[14] [1964] HCA 37; (1963) 110 CLR 529.

[16] [2006] VCAT 798.

[19] [2005] VCAT 232 at [20-21]