(aa) the development contained entirely within the building envelope indicated on "building envelope plan" being annexure `A' to the Agreement under section 173 of the Planning and Environment Act 1987 made 2 June 1999 between Maribyrnong City Council and Millennium Properties Pty Ltd.

2. The above amending condition is to be inserted into the amended permit between the Condition 1 preamble and Condition 1(a).

4. Any applications for costs must be made in writing to the Tribunal within thirty days of the date of this order on notice to each other party. A hearing will be listed to determine the costs applications. All submissions on costs must be exchanged between the parties and on the Tribunal no less than ten business days before the listed hearing date.

____________________________

For the Requestors: Mr M and Mrs L Salerno appeared in person.

For the Responsible Authority: Mr John Rantino of Maddock Lonie and Chisholm, Solicitors, appeared for the City of Maribyrnong.

For the Respondents/Permit Applicants: Mr A G Sica of Sica and Co, Solicitors, appeared on behalf of A and L Bacak.

For the Interested Persons: Mr Gary Testro, Lawyer, appeared on behalf of G and K Testro.

1. This was an application under s.87 of the Planning and Environment Act 1987 for amendment of a permit No TP0/0028 issued 27 July 2000 which allows the development of two dwellings in accordance with endorsed plans on the subject land at 73 (Lot 33) Dale Street, Maribyrnong (hereinafter referred to as Lot 33).

2. The application was made by Mark and Laura Salerno who live at 1 (Lot 31) Navy Close, Maribyrnong (hereinafter referred to as Lot 31) and are neighbours of the subject land.

3. Lots 33 and 31 are perpendicular to each other. The relationship between the two lots is that the Bacaks' Lot 33 lies at the corner of Dale Street with Navy Close, while the Salernos' Lot 31 fronts Navy Close only.

4. This case turns on a 4.0 metre building setback preserved in a s.173 agreement registered on the Certificate of Title to Lot 33. In fact the s.173 agreement is registered on the titles to all the lots in Plan of Subdivision No PS 423452E, which subdivision was permitted pursuant to planning permit No SUB/98/111 issued on 6 November 1998.

5. The effect of the s.173 agreement was to designate the Bacak Lot 33 as a possible dual occupancy site, but to also require its building envelope to be set back four metres from the abuttal to the Salerno title.

6. The Requestors do not seek the cancellation of the permit, instead they "request for the development to be placed inside the building envelope or garage and laundry to be set back from the boundary".

7. Mark Salerno is a builder by occupation. His wife works from home for him doing the books and assisting. They have built their dream home at Lot 31. It is of double storey brick and rendered construction with architectural detailing. They wanted it to be their showpiece. In accordance with the building envelope pertaining to their own land, they have built boundary to boundary within their building envelope. Their single storey garage abuts their boundary with the Bacaks' Lot 33. The Bacaks have received planning permission from the City of Maribyrnong for two dwellings at Lot 33. The garage for the second dwelling abuts the Salernos' garage. There is a nib of wall of the Bacaks' garage which protrudes slightly forward of the Salernos' garage, but for all intents and purposes there is a mirroring of garages built to the boundary on both properties. On the Bacaks' Lot 33, their garage is built outside the building envelope and within the four metre setback preserved under the s.173 agreement. The planning permit also indicates a laundry/bathroom behind the garage built to the Bacaks' boundary and outside their building envelope.

8. The Salernos' complaint concerns planning permission given in breach of the s.173 agreement which has the effect of depriving them of four metres of `breathing space' between the two respective neighbours. Mr Salerno explains he built `a grand house' and wishes the view lines to his dwelling, seen from the corner of Dale Street with Navy Close, to be unimpeded by any abutting building construction.

9. Plan of Subdivision No PS 423452E was a subdivision of land known as the former Naval Stores land, Chicago Street, Maribyrnong. As part of a lengthy process which culminated in the issue of the permit for the subdivision, a s.173 agreement became part and parcel of the subdivision permission. The purpose behind the s.173 agreement was manifold. One of the purposes was to set building envelopes, being the outer limits of any construction or development. The building envelopes are shown as shaded grey within each lot on the `building envelope plan' marked as annexure `A' to the s.173 agreement, which was entered into between the developer of the Naval Stores land, Millennium Properties Pty Ltd, and the Responsible Authority on 2 June 1999 (`the s.173 agreement'). A second purpose was to designate possible dual occupancy lots within the subdivision. Designated dual occupancy possibilities are shown hatched on the `building envelope plan' marked as annexure `A' to the s.173 agreement. A third purpose was to set Urban Design Guidelines over the entire subdivision, to guide the three-dimensional building form that would eventuate for each lot. Single dwellings would require no formal planning permission but would require an `informal type of Council consent' provided the Urban Design Guidelines (`UDG') were adhered to.

10. Dual occupancy lots would still require separate planning permission, and would also be required to comply with, or obtain variation from, the Urban Design Guidelines.

11. On 20 January 2000, the Bacaks lodged an application for a planning permit for a dual occupancy on Lot 33. This application was lodged by Russell Hocking, their planning consultant of City Shire Planning Pty Ltd. The documents comprising the planning application include:

(i) seven sheets of coloured plans SK01-SK04 inclusive plus three green and brown shadow diagrams;

(ii) an application form describing the proposal as a dual occupancy.

(iii) letter dated 17 January 2000 from Russell Hocking of City Shire Planning Pty Ltd to John Luppino, Development Services Manager with the Responsible Authority;

(iv) copy letter dated 19 November 1999 from Russell Hocking to David Hughes, town planner of the Responsible Authority (characterised as a `pre planning permit application letter');

(v) copy letter dated 27 October 1999 from Russell Hocking to the said David Hughes (characterised as a `pre planning permit application letter');

(vi) a preliminary site analysis, site context assessment and design response in accordance with the provisions of the Good Design Guide for Medium Density Housing (Revision 2 - April 1998) dated 4 January 2000 (five pages);

(vii) a written assessment against the individual design elements and the general provisions of the Good Design Guide for Medium Density Housing (Revision 2 - April 1998) dated 5 January 2000 (six pages) dealing with the eleven elements under the Good Design Guide.

12. This dual occupancy application was advertised, as a result of which the Salernos received notice and so did Gary and Kaye Testro of 1 Scenic Place, Maribyrnong (among others). The Salernos did not object to the application. The plans accompanying the application clearly show an abuttal of part of the dual occupancy hard up against the Salernos' garage. The portion of the dual occupancy that so abuts is the garage, laundry and toilet to proposed Unit 2. This portion of the dual occupancy is outside the building envelope to Lot 33 and within the four metre setback preserved by the s.173 agreement.

13. The Testros did become objectors but, after the Responsible Authority issued a Notice Of Decision To Grant A Permit on 26 June 2000, did not take that decision on review to the Tribunal.

14. The Testros are however `Interested Persons' to this proceeding pursuant to the Planning and Environment Act 1987, s.90(2). Mr Testro explains:

The persons interested are concerned only in preserving the integrity of the s.173 agreement and its interrelationship with the building envelope plans so far as the subject matter of the permit is concerned (so that its effect on a subdivision as a whole is not eroded) and whatever is necessary to establish and maintain that integrity so far as the current proceedings are concerned.

15. Mr and Mrs Salerno did not object to the application for dual occupancy abutting their boundary because, they said, they were under the impression that there was 4.5 metres distance between the end of proposed Unit 2 and their boundary. There is a strong dispute as to how they obtained that impression. This will be discussed later.

16. Mr Salerno submits that he issued these proceedings as soon as he discovered the proposed building would abut his boundary. There is also a dispute about when he made this discovery. This will also be discussed later.

RELEVANT PORTIONS OF THE S.173 AGREEMENT

17. Planning Permit No SUB98/111 was issued by the Responsible Authority on

6 November 1998 to permit subdivision of the Naval Stores land for the purpose of, inter alia, 86 residential allotments.

18. Recital D in the introduction to the s.173 agreement reads:

Prior to the certification of the plan of subdivision, the owner of the land shall forthwith enter into an Agreement with the Council and satisfactory to it pursuant to the provisions of S.173 of the Planning and Environment Act 1987 in which it shall be covenanted that:

* Only one dwelling per lot is allowed (unless developed as dual occupancy on lots designated for dual occupancy development) and the design and location of each dwelling must adhere to house siting and design guidelines to be approved for each lot.

* Dual occupancy may be allowed on nominated lots subject to a planning permit being issued by the Responsible Authority.

* Development contributions are paid to Council for each net new dwelling in accordance with Development Contribution Plan 5 for Arterial Road Development.

The Agreement must be registered on the title of each lot created from the subdivision of the land.

The owner must pay the costs incurred by the Responsible Authority in respect of the preparation and registration of the agreement.

"Building Envelope" means the area delineated and identified on the Endorsed Plan as a building envelope or the like.

"Endorsed Plan" means the plan that is endorsed with the stamp of Council pursuant to the Permit. A copy of the plan endorsed as at the date of this Agreement is attached to this Agreement and marked with the letter `A'.

"Urban Design Guidelines" means the Urban Design Guidelines as approved by Council. A copy of the approved Urban Design Guidelines as at the date of this Agreement is attached and marked with the letter `B' for identification.

20. Clause 4 of the s.173 agreement contains 'Specific Obligations Of The Owner'. It reads:

SPECIFIC OBLIGATIONS OF THE OWNER - URBAN DESIGN

it will only build, construct or erect or cause or allow one dwelling to be constructed on each lot, unless a planning permit is issued by Council allowing for a dual occupancy on a lot provided the lot has been designated on the Endorsed Plan as a lot on which one or two dwellings may be constructed.

it will not build, construct or erect or cause or allow to be built, constructed or erected any Building on any lot outside the Building Envelope for that lot.

4.3 Restrictions on lots which are 300 square metres or less

it will not build, construct or erect or cause or allow to be built, constructed or erected any Building on any lot which is less than 300 square metres unless that Building is consistent with:

4.3.1 the Building Envelope for that lot shown on the Endorsed Plan; and

4.3.2 the Integrated Building Envelope which is contained in the Urban Design Guidelines.

NOTE: Any development of a lot less than 300m2 requires a planning permit under the Maribyrnong Planning Scheme.

4.4 All buildings to comply with Urban Design Guidelines

any Building must be built, constructed or erected in accordance with the Urban Design Guidelines.

prior to any Building being built, constructed or erected the Owner must comply with the provisions contained at clause 16 of the Urban Design Guidelines dealing with verification.

5.1 Any person may request Council to give consent to depart from the Urban Design Guidelines in respect of any lot provided they pay a fee of $200 in respect of any such request.

5.2 In determining whether to approve a departure from the Urban Design Guidelines in respect of any lot, Council will have regard to the considerations set out in the Urban Design Guidelines in respect of variations from the Guidelines.

21. Attachment `B' to the s.173 agreement is the `Urban Design Guidelines' which comprises a ten page document drafted by Fisher Stewart Pty Ltd.

22. Attached as Annexure `A' is the building envelope plan - Riverview Estate Maribyrnong, which plan designates the building envelopes in grey shading, possible dual occupancy allotments in hatched and finally deals with a rear garage access to certain terraced allotments, not relevant to this case.

23. There are substantial hurdles to be overcome by requestors before the Tribunal may consider cancelling or amending a permit. The following ones are relevant to the facts in this case.

Section 89(3) Planning and Environment Act 1987 - the request must be made as soon as practicable

24. The Tribunal may refuse to consider a request unless it is satisfied that the request has been made as soon as practicable after the person making it had notice of the facts relied upon in support of the request.

25. Was the request was made by the Salernos as soon as practicable after the Requestors had notice of the fact that the proposed building was to be outside the building setbacks and abutting their boundary?

26. Mrs Bacak gave evidence concerning the first time Mr Salerno discovered the Bacaks intended building on his boundary.

27. Mrs Bacak gave evidence and was cross-examined. Mr Salerno was instructed by the Tribunal about the difference between giving evidence which could be tested under cross-examination and making an untested submission, but elected not to present as a witness under cross-examination. Mr Salerno submitted that the first time he discovered about the proposed building on his boundary was when his engineer received a Form 6 and 7 Protection Notice under the Building Act and alerted him. He said that he first became aware of this information on

1 November 2000 and he lodged his application for cancellation on 3 November 2000, a difference of two days.

28. Mrs Bacak gave evidence that in mid October 2000 she had a telephone conversation with Mr Salerno concerning fencing along their mutual boundary. Mr Salerno was animated at first about a very special fence he wanted to build and Mrs Bacak advised him there would not be much point in building a special fence because they were building their garage wall to abut his. Mrs Bacak testified that Mr Salerno was shocked by her statement, became unsure of himself and unsure of what to do about the fence. She realised that he did not know anything about the Bacaks' garage abutting his boundary until that conservation. Mrs Bacak advised that she would be happy to pay the cost of a standard paling fence along the boundary and Mr Salerno could pay the difference for his special fence. Mr Salerno then sent the Bacaks a fencing quote and on 23 October 2000 Mrs Bacak posted back to the Salernos a money order for $185.30 for their half of a standard paling fence.

29. Mr Salerno declined to give oral evidence against Mrs Bacak. Accordingly Mrs Bacak's evidence stands uncontested.

30. Mr Salerno, by way of submission only, gave a different version of when he first discovered the proposed building on the boundary. Mr Sica, Solicitor for the Bacaks, disputed Mr Salerno's ability to have discovered about the boundary works on 1 November 2000 by way of protection work notices under the Building Act because protection work notices do not issue unless there is a building permit and a building permit only issues if there is a planning permit. Although a planning permit was issued in July 2000, there were no plans endorsed pursuant to that permit on which building plans could commence.

31. Although at the commencement of the hearing Mr Salerno had clearly submitted he had made his discovery because his engineer had received a Form 6 and 7 Protection Notices under the Building Act, at the end of the hearing he did an about-turn and denied receiving protection work notices but submits he was expecting them to come. Nevertheless he did not present for cross-examination.

32. I find Mr Salerno's submission contradictory and therefore unsatisfactory.

33. However Mrs Bacak has confirmed that Mr Salerno did not know earlier than mid October 2000 of the potential building along his boundary, thus confirming the state of mind of the Salernos in early 2000, after the dual occupancy was advertised, that they were unaware of potential building along their boundary and therefore did not object at that time to the dual occupancy application.

34. The difference in their evidence is, at the most, a two week time period between mid October 2000 and 1 November 2000. Even on Mrs Bacak's evidence, I am satisfied that the Salernos' s.87 request has been made as soon as practicable after they had notice of the proposed building along their boundary.

Section 89(1)(b)(i) Planning and Environment Act 1987 - Has there been any material mis-statement or concealment of fact in relation to the application for permit?

35. The Salernos claim pursuant to s.89(1)(b)(i) that they have been adversely affected by a material misstatement or concealment of fact in relation to the application for permit:

(i) by advice given to Mrs Salerno by an unidentified council officer at the Council's planning department; and

(ii) by the contents of Bacaks' town planning application itself.

Statements by the Responsible Authority's Planning Officer

36. Mrs Salerno gave evidence and was cross examined concerning her inspection of the Council file after she received notice of the dual occupancy planning application.

37. Mrs Salerno's occupation is home duties but she does the invoices and paperwork for her builder husband. She does look at plans and because they just built their house she was familiar with her house plans and her kitchen plan. As her husband was too busy to go to the Council and inspect the advertised plans, she went herself. She testified that Council Officer assisted her with looking at the plans and particularly remembers looking at the green and brown shadow diagrams and that the planning officer fumbled with the plans, turning them this way and that, trying to identify Mrs Salerno's abutting property.

38. The plans are clear. They identify the Salernos' boundary garage as `neighbouring garage' and show a brick garage, laundry and toilet built hard-up to the Salernos' boundary extending past the Salernos' garage at each end with a 1.5 metre brick wall nib protruding forward of the Salernos' garage towards the Navy Street frontage.

39. There is no mention on the plans of any building envelope limitations but the proposed second unit of the dual occupancy is clearly shown as abutting

hard-up against the Salernos' boundary. Mrs Salerno gave evidence that the planning officer misled her by stating that the correct boundary which she should be looking at on the plans and which abutted her boundary showed a 4.5 metre setback and therefore she was satisfied that there was no building work to be constructed abutting their common boundary.

40. Mrs Salerno could not name the planning officer who served her and could only identify her as a female in her 30s, perhaps 35 years of age, with fair hair and a fuller figure. Despite concerted attempts, the Council has been unable to identify any staff member in the planning department that meets that description and is therefore unable to contest Mrs Salerno's evidence.

41. Inspection of the plans reveals that the 4.5 metre setback referred to by Mrs Salerno is on the completely opposite side of the subject land to the Salernos' boundary, and is in fact the side abutting Dale Street. The plans clearly identify `Dale Street' next to the 4.5 metre setback and further clearly show that there are two other different building setbacks along that boundary at 4.3 metres and 3 metres respectively. The plans also show a 1 metre and 1.5 metre fence setback to create privacy for Unit 1.

42. Mrs Salerno says that she specifically asked the planner whether there was any construction on the boundary between Lot 31 and Lot 33 and was told no, the nearest construction is 4.5 metres away.

43. Accordingly Mrs Salerno says that she reported back to her husband that there was to be no construction within 4.5 metres of their common boundary and they lodged no objection to the planning application.

44. The Salernos rely on this misstatement by the unidentified Council officer as forming one of the foundations of their s.87 cancellation application.

45. I am not satisfied with Mrs Salerno's evidence as to misstatement by the Council officer because she is unable to identify that officer and the Responsible Authority is therefore unable to even begin to dispute her evidence. Further, the plans where she says the Council officer pointed out a 4.5 metre setback equally point out a 3 metre setback for a different wall portion and a 1 metre and 1.5 metre fence setback (all protruding into the setback).

46. Moreover, that boundary is clearly identified as `Dale Street' and not her common boundary with the subject land. All in all therefore, I do not accept her evidence that there has been a material misstatement of fact by the Council in relation to the application for permit such as to satisfy that ground being made out.

47. However I am satisfied that the Salernos were unaware of the proposed building on the boundary until Mr Salerno found out about same when he discussed fencing with Mrs Bacak. I am satisfied that Mrs Salerno was mistaken about the plans but not that that mistake was created by the Council.

Material mis-statement or concealment of fact in the town planning application documentation

48. Nowhere in CityShire's planning application documentation is the building envelope mandatorily required by cl.4.2 of the s.173 agreement specifically identified for compliance or non-compliance. It is simply not mentioned at all.

49. Mention has already been made of the Urban Design Guidelines which are Attachment `B' to the s.173 agreement, and also to cl.5 of the s.173 agreement which permits variation of the Urban Design Guidelines.

50. In similar vein, cl.16.2 of the Urban Design Guidelines themselves provide:

The Maribyrnong City Council may approve a variation to the approved design guidelines upon written request (and accompanying plans) stating in detail the reasons for the variation.

51. While it is true that the requirements of the Urban Design Guidelines can be varied, it is also the fact that the building envelope cannot be varied. Any representation in the CityShire documentation that the guidelines can be varied is accurate.

52. It is confusing that the building envelope plan Attachment `A' is stapled within the Urban Design Guidelines (which can be varied pursuant to the s.173 agreement cl.5) whereas the building envelopes cannot be varied pursuant to cl.4.2 of the s.173 agreement. The guidelines address a three-dimensional building envelope desired for each dwelling whereas the building envelope plan delineates a mandatory limit to the footprint within which each dwelling sits.

53. The question that needs to be resolved is does the non-reference to the mandatory building envelope provision constitute a material misstatement or concealment of fact in relation to the application for permit?

54. For example the letter dated 17 January 2000 forming part of the application states:

I note the provisions of a set of urban design guidelines for the Riverview Estate, prepared by Fisher Stewart Pty Ltd and note that the building envelope plan contained within the Urban Design Guidelines designates a number of sites throughout the estate as being possible dual occupancy allotments.

Although this building envelope plan is accurately referred to for the hatched possible dual occupancy sites, no mention is made of the building envelope restrictions.

55. The Urban Design Guidelines are continuously referred to but in language that shows they may be varied. In respect to matters that are contained within the guidelines themselves, that is an accurate statement.

56. The impression is given that there is no issue at all concerning any building envelope restriction. There is just no reference to that legal restriction imposed by the s.173 agreement.

57. Two analyses also form part of the permit application. The first five page analysis is mainly an exercise of the `Site analysis requirements under the Good Design Guide'. The second six page analysis deals with the eleven Elements under the Good Design Guide. However there are general references to the Riverview Estate's Urban Design Guidelines liberally peppered throughout both documents.

58. For example, the six page design elements document states:

The building envelope proposed for these two new townhouses is an effective amalgam of the provisions of Element 6 of The Guide and those matters set out in regard to building envelope provisions within the Urban Design Guidelines.

Both dwellings effectively take their sense of address and frontage to Navy Close and have a setback of 5 metres to the entry tower which designates the entry point for each of the two dwellings.

In accordance with the Urban Design Guidelines, the garages are then set back a further metre and are located 6 metres from the Navy Close frontage. In regard to Unit 1, the predominant built form is also set back 6 metres from the Navy Close frontage, whilst Unit 2 has a more substantial setback of approximately 8 metres to the main ground floor element of the dwelling.

Unit 1 ... at its closest point, the dwelling is 3 metres from the Dale Street frontage which increases to 4.3 metres and to 4.5 metres on the two adjoining building faces.

59. Nowhere in the application is there any reference to building outside the cl.4.2 building envelope and within the four metre setback clearance required by the Attachment `A' building envelope plan.

60. Does this omission amount to a material mis-statement or concealment of fact within the meaning of s. 89(1)(b)(i)? Indeed, can an omission amount to a mis-statement under this planning legislation and, if the omission is innocent can this constitute a concealment under this legislation?

61. As I find in a subsequent section of this decision that the Responsible Authority made a material mistake in relation to the grant of a permit, one may wonder why I need to answer these questions. The answer lies in s. 94(4)(b) which provides that the Responsible Authority need not pay compensation for a permit cancelled or amended on the ground that a material mis-statement or concealment of fact was made in an application.

62. The cases on concealment in the planning jurisdiction all start from the premise that concealment implies a deliberate hiding. This has been consistently held by the Tribunal in case law starting from Barrett & Grummitt v Melbourne CC & Anor [1989] 2 AATR 38 @ 48; Preston CC v Manjeet Singh Mundae & Ors (1991) 8 AATR 99 note; Koodak v Prahran CC & anor (1992) 9 AATR 236 @ 243 and Greater Shepparton CC v Hardie (1996) 16 AATR 23 @ 35. Koodak states:

there is no evidence in this case that there was any intended or deliberate concealment. I do not attribute any malintent on the part of the applicant or her architect in this respect.

63. There has been no evidence before the Tribunal to characterise the omission as a deliberate hiding. I cannot attach any mala fides to CityShire's omission. It does not amount to a concealment.

64. One would normally associate a mis-statement with a statement, rather than with an omission or a non-statement. But in Greater Shepparton CC v Hardie supra @ 34 the Tribunal considered that the failure to mention [that lewd or obscene dancing (table top dancing) was intended] in the circumstances might be interpreted as a mis-statement but in any event we are satisfied that this was concealed. In Koodak Smith M considered omissions in the drawings, that were supposed to reflect existing conditions, to be mis-statements:

In my view, two of the five alleged mistakes and omissions did constitute material mis-statements. ....I consider that the inaccuracy in the setback of the rear wall of the Koodak House and, to a lesser extent, the failure to indicate the chimney, were material mis-statements. ....the mis-statements had the potential to result in an inaccurate assessment, and underestimate, of the impact of the proposal upon Mr Koodaks amenity. If the mis-statements had not been made, there may have been a different result.

65. I am not satisfied on the evidence that the non-reference to building outside the mandatory cl. 4.2 building envelope and within the four metre setback clearance required by the Attachment `A' building envelope plan amounts to a mis-statement in the application. The plans clearly showed building outside the building envelope and within the four metre setback clearance. What was not mentioned was the mandatory legal nature of cl 4.2 but, in this case, that non-reference does not, in my opinion, amount to a mis-statement of fact. See Molan v Olsson and Doncaster & Templestowe CC (1993) 11 AATR 157 @ 163,4.

Section 89(1)(b)(iii) Planning and Environment Act 1987 - Has there been any material mistake in relation to the grant of the permit?

66. The Tribunal may cancel or amend any permit if it considers that there has been a material mistake in relation to the grant of the permit by which the requestor has been adversely affected. Planning and Environment Act 1987, s.89(1)(b)(iii).

67. The Salernos hold a belief that they have been adversely affected by the planning permission dated 26 June 2000 to allow building on their boundary and within the setback envelope in contravention of the s.173 prohibition.

68. This is where evidence of the Responsible Authority's state of mind and actions, demonstrated by its Officer's Report, is relevant.

69. On 20 June 2000 Planning Officer Paul Laughton prepared a report in respect of the dual occupancy application. His 14 page report sets out the zoning and planning controls, planning policy, a description of the proposal, a Good Design Guide compliance analysis, a Riverview Estate Urban Design Guidelines assessment, an analysis of the objections, a recommendation to grant a permit and proposed conditions. His report was approved by his superior, Adrian Havryluck on 20 June 2000. His report includes the following statements:

The proposal generally complies with the recommendations of the Good Design Guide and the Riverview Estate Urban Design Guidelines.

RIVERVIEW ESTATE URBAN DESIGN GUIDELINES ASSESSMENT

Building envelope not adhered to but the design is consistent with the recommendations of the GDG.

(The reference to 3.3.2 has no correlation with the paragraphs in the Urban Design Guidelines.)

70. It is confusing that the building envelope plan Attachment `A' is stapled within the Urban Design Guidelines (which can be varied pursuant to the s.173 agreement cl.5) whereas the building envelopes cannot be varied pursuant to cl.4.2 of the s.173 agreement. The guidelines address a three-dimensional building envelope desired for each dwelling whereas the building envelope plan delineates a mandatory limit to the footprint within which each dwelling sits.

71. The planning officer is aware of the encroachment outside the building envelope, notwithstanding the non-reference to this in the CityShire application. The planning officer acknowledges that there is non-compliance with the building envelope but must have been of the opinion that he was able in fact and in law to vary that building envelope requirement by his recommendation favouring the grant of a permit. That opinion was also held by his superior, and the permit issued under delegation.

72. This is a material mistake of law. The Planning Officers did not turn their mind at all to the mandatory prohibitive nature of cl.4.2 of the s.173 agreement and of the building envelope control, rather they applied the control as a flexible guideline.

73. I agree with Mr Testro's characterisation of this mistake as material because of the integral nature of s.173 agreements in the planning process. Firstly, the Planning and Environment Act 1987, s.90A(1) requires the Tribunal to take into account, in determining a s.87 cancellation request, the matters set out in s.84B(1) as if the request were an application for review. Pursuant s.84B(1)(g) the Tribunal must ... have regard to any agreement made pursuant to s.173 affecting the land the subject of the application for review.

74. This, says Mr Testro, demonstrates the significance of s.173 agreements in the Victorian planning scheme.

75. He also referred me to Member Moles' decisions in Claperton v City of Kingston and Aspendale Gardens Residents Association Inc (1999) 2 VPR 86 at 90 and F Kay Sinclair v Murray Investments (Vic) Pty Ltd and City of Whitehorse [2000] V.C.A.T. 302 where she contrasted ordinary covenants on title with s.173 agreements which are registered on title:

Unlike other forms of restrictions on title, the fact that s.173 agreements are sourced and enforced under the Planning and Environment Act from which planning applications and appeals also derive, that this form of covenant would preclude the favourable exercise of planning discretion in relation to the planning permit application where it would lead to a breach of that covenant. This can be contrasted with other forms of covenant on title, which are being held to not preclude planning applications and the issuing of permits which would lead to contravention of those covenants.

76. Mr Rantino, Solicitor for the Responsible Authority, advised the Tribunal that until August 2000, it had been the Responsible Authority's belief and understanding that the provision of cl.4.2 was open to variation and was a discretionary provision under the s.173 agreement. As a result, they have granted planning permission for seven out of twelve dual occupancy lots to breach the building envelope parameters. Four of these dual occupancies are in the course of construction and some are only at planning permit stage.

77. Indicative of the Responsible Authority's attitude once it discovered the prohibitive nature of cl. 4.2 is its failure to grant planning permission for a dual occupancy outside a building envelope over land abutting the Bacak's (the Solomos site) although other neighbours (the Fans) have apparently reached an agreement with the Solomos for the building footprint to encroach into the envelope. Mr Rantino advises that as of the date of this hearing, the Solomos planning application sits in suspended animation.

78. In the Bacak's case, although planning permission has issued plans have not been endorsed under the permit and no construction has commenced.

79. Another clear indicator that the mistake in the grant of the permit was material is also s.126 of the Planning and Environment Act 1987 pursuant to which any person who uses or develops land in contravention of an agreement under s.173 is guilty of an offence.

80. The permit granted by the Responsible Authority may have the effect of leading persons to commit such an offence because their attention is not drawn to the s.173 prohibition.

Section 91(3) Planning and Environment Act - substantially disadvantaged and just and fair

s.91(3)(b) - substantially disadvantaged

81. Pursuant to s.91(3)(b) the Tribunal must not direct a responsible authority to cancel or amend a permit on a request under s.89(1)(b) unless it is satisfied that the person was substantially disadvantaged by the matter set out in the request.

82. Are the Salernos substantially disadvantaged? Mr Rantino argues that the Salernos are not substantially disadvantaged in substance because:

(a) for the most part there will only be a mirror image garage abutting their own garage;

(b) the 1.5 metre minor protrusion of the Bacak garage is only a small nib extension;

(c) there will be no overlooking opportunities created by the building outside the building envelope;

(d) there will be minimal overshadowing created (mostly from the fence);

(e) they will suffer less noise from this open area being built on than if the open area was left vacant for outdoor recreation activity by the neighbours;

(f) the Bacaks could theoretically build a six metre high double storey sheer wall on one plane four metres back from the boundary without needing to set the first floor further back. Therefore the building envelope impact may be greater than the permit impact by comparison.

(g) The Salernos can still enforce the s.173 Agreement under the Planning and Environment Act 1987, s.114.

83. The Salernos perceive themselves as substantially disadvantaged. Firstly, this is because they had a vision for their home that they say has been compromised by their house ceasing to stand proud of any other property to its north-eastern boundary. Secondly, Mr Salerno maintains that the entire Naval Stores subdivision was thought through with provision for servicing authorities' service installations, so that this four metre setback could be used for sewer and stormwater pipes and other service installations.

84. The Salernos have a right under the s.173 agreement to a four metre setback from their north-eastern boundary and they had an expectation that this right would not be interfered with.

85. Mr Testro explained the history of this particular s.173 agreement. He explained the overall design policies and thought processes that had gone into the subdivision permit for the former Naval Stores land, particularly in the detail contained in the s.173 agreement, the building envelope plan and the detailed Urban Design Guidelines. All in all, the effort that went into the design concept for the former Naval Stores land was considerable. As I remarked in Treloar v City of Bayside, [2000] V.C.A.T. 55 "a lot of effort, planning and thought have gone into those policies. ... It is a waste of human energy and skill for time to be expended on drafting, testing and adopting specific policies ... over at least a three year period and for that effort to be then ignored a few months later. How much ink, how many reams of paper and how much human effort must continue to be wasted if such exercises are rendered futile?"

86. I made those comments in respect of adopted Council policies which had been gazetted into a planning scheme amendment. How much more so are these comments relevant when one has a mandatory control imposed by a s.173 restriction on title? I think the Salernos are substantially disadvantaged by council's ignoring a restriction of such legal status as a s.173 agreement.

87. Mr Testro wanted me to rule that the s.173 agreement was a bar to the Responsible Authority's ability to grant a permit at all outside the building envelope. Mr Sica submitted that the s.173 agreement was not a clear and direct prohibition as was the case in Hobsons Bay CC v Saric (2000) 6 VPR 65 @ 77, and only bore a parallel relationship to the permit giving process. s.84B(1)(g) of the Act requires the Tribunal to have regard to any agreement made pursuant to section 173 affecting the land the subject of the application for review and does not say the Tribunal must apply it. But s.61(4) of the Act requires the Responsible Authority to refuse to grant a permit that would authorise anything which would result in a breach of a registered restrictive covenant, and s. 182 characterises the covenant in a s.173 agreement as if it were a restrictive covenant despite the fact that it may be positive in nature or that it is not for the benefit of any land of the Responsible Authority.

88. In exercising my discretion, I refrain from making a definitive ruling on whether the s.173 agreement is a bar to the council's exercise of discretion, but agree with him that it is a fundamental matter that should be taken into consideration. The Salernos are substantially disadvantaged by council's ignoring a restriction of such legal status as a s.173 agreement.

89. The fact that a s.114 Enforcement Application is available to the Salernos is not a good answer, as that remedy is discretionary. Kantor & Ors v Murrindindi SC (1997) 18 AATR 285 is a good example of declared rights not being remedied because of discretionary considerations. The fact that a breach may be proven to the satisfaction of the Tribunal does not mandate the Tribunal to enforce it, in which case the neighbour is saddled with the continuing effects of the building envelope breach.

s.91(3)(c) Planning and Environment Act 1987 - just and fair to cancel or amend the permit.

90. Pursuant to a combination of s.89(1) and s.91(3)(c) the Tribunal has power to either cancel or amend any permit, but should not direct cancellation or amendment unless it "would be just and fair in the circumstances to do so".

91. It is common amongst the various Tribunal decisions that:

_This involves the Tribunal in considering all of the circumstances including the planning merits of the proposal, the detriment which may be suffered by the persons seeking the cancellation if it is not cancelled and the detriment that may be suffered by the holder of the permit if it is cancelled.

(Corry v Longmeadows (1990) 4AATR 232 at 244-5 per Jones J and Buckley M.)

92. Mr Testro submitted that in the balancing exercise as to what is just and fair, it must be remembered that the Requestors have an existing investment in bricks and mortar which stands to be affected along with what appears to be their view of their quality of life and amenity, whereas the only way in which the Respondents are likely to be adversely affected if the permit and the accompanying plans are amended is that they will have to undertake the costs of preparing amended plans. I think that is too simplistic an analysis but it is difficult at this stage to assess whether the units will necessarily be smaller or a redesign can accommodate a similar size in an alternative envelope.

93. Mr Rantino maintains that the planning officers consistently applied the building envelope plan as a flexible control and not as the `footprint limit'. He argues that I should refuse the Salernos relief because they retain the ability to issue s.114 enforcement proceedings to enforce their rights under the s.173 agreement. I disagree with him because that stage would clearly involve all parties incurring greater expenses such as endorsed plans under this planning permit, building permits, the engagement of a builder and the construction of footings. It is always preferable for preventative action to be taken at the earliest possible opportunity. See Dixon v Stonnington CC (1996) 17 AATR 130, Liston M.

94. Mr Testro submits that it is just and fair to amend the permit now because the Bacaks and the Responsible Authority have approached the Minister for Planning pursuant to the Planning and Environment Act 1987, s.177(2) to seek his approval to the partial ending of the s.173 agreement involving mainly the possible dual occupancy sites. Mr Testro submitted that there is no ultimate review process against the Minister's decision so that if Mr Salerno waits and does not exercise his current s.87 rights he may be left in a situation where his rights have disappeared because the Minister is the final arbiter in that process.

95. In summary, I am satisfied that a material mistake has been made in the grant of the permit which justifies its amendment. Given the balance between supporting a breach of a s.173 agreement or requiring building within the mandatory building envelope, I have opted for the latter, given the fact that no building works have commenced and the position can still be reversed without too much damage to the Respondents. It is preferable to halt errors at this stage, rather than wait for action under the permit to occur in breach of the s.173 building envelope and force the beneficiary to bring injunctive action and enforcement proceedings at greater expense to all concerned.

96. Potential action under s.184(3) mooted by Mr Sica, solicitor for the Bacaks, or under s.177(2) mooted by Mr Rantino for the Responsible Authority has not influenced me, as such proceedings must be independently pursued and, if successful, will globally alter the permissions capable of being granted if restrictions under the s.173 agreement are removed. In other words, if the Bacaks are successful under s.184(3) or s.177(2), they can apply again for a dual occupancy built to the boundary as formerly permitted by the Council.

97. The Tribunal allows the application for cancellation and directs that the permit should be amended as set out above.

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