The decision of the Responsible Authority in relation to permit application No TP-2006-680 is set aside. Pursuant to the provisions of Section 85(1)(a) of the Planning and Environment Act 1987, it is directed that a permit must not be granted.

Mr N J Tweedie of Counsel, instructed by Bazzani Scully Brand, solicitors. Mr Tweedie called the following expert witnesses to give evidence:

• Mr C Blackford, Director of Permit applicant;
• Mr A Tsiafogiannis, Director of Permit applicant;
• Mr C Huybregts, acoustic engineer;
• Mr S McGurn, town planning consultant.

Mr Paul Chiappi, of Counsel, by direct brief from Melbourne City Council.

Body Corporate Strata Plan No. 17879 & Beconwood Securities Pty Ltd, Neil Rodney Bishop and Others

Mr Peter O'Farrell of Counsel, instructed by Deacons Lawyers. Mr O'Farrell called the following lay persons to give evidence:

• Mr Andrew Joseph
• Mr Paul Choiselat
• Mr Richard Hartnett.

Mr Paul Connor of Counsel, by direct brief. Mr Connor called Mr Edward Hart, licensed premises consultant, as an expert witness.

Mr John Atkins of counsel, instructed by Mr J Robinson of Best Hooper, Solicitors.

Ms C E Kirton of counsel, instructed by Christopher Bunnet, solicitor.

Paul Veith & BCSP 432226N & 407840L, Anthony Isaacs and Others

1. Neighbours in the same and adjoining buildings seek to review council's decision to grant planning permission for a tavern on part of the ground floor of Bank House, together with building alterations to provide a smoking area to comply with the Tobacco Amendment Act 2006, which comes into operation on 1 July 2007. The Tavern is to be known as 'The Emporium'.

1. Mr Tweedie asked that the Tribunal not allow Syracuse to be heard, as he was not prepared for some of Syracuse Restaurant's grounds of review, for example, the noise impact of the smoking area on the patrons of the restaurant. Because Syracuse did not serve its statement of grounds on his client, despite repeated requests by Mr Tweedie, his acoustic consultant could not survey Syracuse. We decided to see whether Mr Tweedie could cure this omission with his acoustic consultant now, and if a costs order against Syracuse were necessary to rectify any disadvantage to Mr Tweedie, we would have been prepared to make one. This did not eventuate.
2. Plans were not sought to be substituted, but Mr Tweedie for the permit applicant advised that if the body corporate were not prepared to permit the expansion of existing toilets inside the common property to cater for the increase generated by the Tavern, they could be provided inside the tenant's demised premises, as illustrated on a plan.
3. The dimensions of the smoking area are reduced to 6.3 metres wide by 2.13 metres deep, an area of 13.42m2 (compared to the previous deck of 20.6m2), so as to comply with guidelines contained in Smoke-free guide: Licensed premises and outdoor dining or drinking areas (January 2007).

1. Bank Place is an historic laneway joining Collins and Little Collins Street about mid block between Queen and William Streets. At its southern, Collins Street end it narrows to an inclined pedestrian laneway approximately 2.5 metres wide. For the northern and central sections (from the southern end of Mitre Tavern to Little Collins Street) it is much wider and is a shared vehicular/pedestrian space. Three short, dead-end laneways intersect at right angles to Bank Place:
   1. Rosezler Lane to the east is located behind businesses fronting Little Collins Street and provides rear access and a bin storage area for those properties;
   2. Stallbridge Lane to the west abuts the northern side of Bank House and at its end provides access to the kitchen of Syracuse Restaurant. It will also provide access to the proposed ground floor Tavern by way of a new door to be constructed towards the end of the laneway. The proposed smoking deck also opens to this laneway;
   3. Mitre Lane to the west is positioned between the Mitre Tavern and Bank House. Although a public lane, for much of the day and early evening the majority of it is taken over as an outdoor eating and drinking area for Mitre Tavern patrons. Apartments on different levels of Temple Court located at the western end of Mitre Lane also face out over this laneway.
2. An increasing number of licensed establishments varying from cafes, restaurants and a members-only club[1] to taverns[2] and nightclubs[3] surround or are in the immediate vicinity of Bank House. Eight front or utilise Bank Place for outside eating and The Emporium will increase that to nine venues with access to Bank Place. The wider area encompassing Collins Street, Little Collins Street and Queens Street includes a great number of restaurants, bars, taverns and nightclubs of various sizes, hours of operation and character[4]. At least two of these - 'The Balcony' and 'The Irish Times' - have a direct impact on Bank Place because of noise and activity late at night and in the early morning.
3. With the notable exception of the historic Mitre Tavern, it is our understanding that although the wider locality around Bank Place may have historically had a subdued professional character, that character has dramatically changed in the past decade or so. That change has also affected Bank Place, with the Marrakesh Tavern and its late opening hours contributing most significantly to changes in the level of noise and activity in this narrow street. The Statement of Significance for Heritage Overlay 503 notes the key attributes as being the intimate scale and character, as well as its strong social and traditionally pedestrian role, and architecturally interesting building facades and detailing throughout. We would observe that this description primarily relates to its physical and built form character and that although reference is made to its social and pedestrian role, that social and pedestrian role is formed by the physical environment.
4. For much of the daytime the various eating venues occupy both sides of Bank Place with tables and chairs for outside eating and drinking. Although our inspections took place in the middle of winter, we noted that these areas were occupied to varying degrees by patrons of the various dining and drinking establishments.

1. In brief, the proposal involves converting existing office space on the ground floor of Bank House to enable the establishment of a Tavern and Licensed Restaurant catering for 250 patrons. The proposal comprises two stages - stage 1 is the Tavern, smoking deck and associated service areas and stage 2 is the Restaurant and associated kitchen facilities. The Tavern is to be limited to a maximum of 165 patrons, the restaurant limited to a maximum of 65 patrons and the outdoor kerbside area in Bank Place limited to a maximum of 15 patrons. The Tavern is to trade between 7am and 1am the following day Monday to Saturday and on Sunday from 10am until midnight.
2. The smoking deck abuts Stallbridge Lane, and as amended at the hearing measures 6.6 metres by 1.78 metres giving it an area of 13.42m2. All patron access to the Tavern and Licensed Restaurant is to be through the common lobby area facing Bank Place. Service deliveries are to take place through the common fire escape stairs off Mitre Lane. The amended plans also include an access door off Stallbridge Lane, although we remain unclear about the eventual extent and purposes for which this door will be used. No parking is available on site or in the immediate vicinity.

1. The land is zoned Capital City Zone Schedule 1 under the Melbourne Planning Scheme. Within this zone:
   1. no planning permit is required to use land for the purpose of a Restaurant;
   2. no planning permit is required for the sale or consumption of liquor;
   3. a permit is required to use land for the purpose of a the Tavern;
   4. a permit is required for the building and works associated with the need to provide a smoking area pursuant to the Tobacco Amendment Act 2006.
2. Heritage Overlay 503 is a precinct control applying to Bank Place. Bank House is identified as a 'D' graded building and Bank Place as a Level 2 streetscape. Permission is required for the building and works associated with the need to provide a smoking area, although we note that heritage matters were uncontroversial and no party called heritage witnesses.
3. Design and Development Overlay (Schedule 1- Active Street Frontages (Area 3 - Other areas)) also triggers a permit for buildings and works.

1. The parties and the witnesses in the appeal made both written and verbal submissions, a number of plans, photographs and other documents were tendered to us and remain on the Tribunal's file. We conducted an extensive inspection of the site, its locality and comparable premises in the city to which the parties directed us, on two occasions during daylight hours. We also spent a considerable amount of time arranging a midnight site inspection for Saturday night of the Queens Birthday weekend, which was cancelled by the parties because of their difficulties (excluding Mr Shaun Bell).
2. The Bank House tenants wanted us to inspect at 4.00 pm on Friday afternoon instead of late at night, Syracuse wanted us to inspect at 10.30 pm or earlier, David and Helen Lewis sold their apartment, and their new occupant did not give us access. Having come to our decision on a discrete point, we did not need to reschedule our nighttime site inspection.

1. The principal issues for consideration are:
   1. Planning policy, whether a Tavern is an appropriate use in this zone with its potential for conflict with nearby uses;
   2. Conflicts, including after house security issues, arising from sharing the constrained common-property lobby by the Tavern's patrons/waiters and the professional business people on the upper floors of the building, their staff and invitees;
   3. Other amenity conflicts including noise and operational aspects (deliveries, storage of products and empties, dumpsters; rubbish collection; mechanical equipment).

1. Planning policy unambiguously supports the provision of a diverse range of uses including office, residential, leisure and entertainment activities operating 24 hours a day. Central Melbourne is seen as the premier location for economic, infrastructure and cultural facilities. Residential activities are seen as of secondary importance to these other uses. Parties highlighted these various policies including those set out in Clause 21.04 (Table 3 )which specifically states that for the Capital City Zone:

Residential amenity in the Capital City and Docklands Zone is not comparable to that of residential zones, and residential use and development in these zones must not compromise the other purposes and functions of the Central City and Central Activities District.

1. That Table sets out comparative policies, depending on each land zoning, and places the clear onus on new residential use and development in this Capital City 1 Zone to manage off-site impacts including appropriate acoustic attenuation measures.
2. In paragraphs 19 -21 of his submission, Mr Tweedie usefully summarised a statement of principles to guide planning for central Melbourne and the Capital City Zone 1 and the overwhelming policy support for bar/taverns within the Capital City 1 Zone:

(i) The Melbourne CAD is the pre-eminent activity centre in Victoria, and the pre-eminent business, tourist, entertainment and recreational centre in the State.

(ii) Policy "unambiguously" supports the provision of a diverse range of uses operating 24 hours a day within the Melbourne CBD.

(iii) The CAD is a place where, in order to achieve Council's vision for the city, activity that is "vibrant", "alive" and "24 hour" is encouraged. Such activity is seen as being important to maintain the City's competitive edge.

(iv) It is envisaged that new business and entertainment uses can successfully coexist with residential uses, and that this diversity is seen as critical to the City's vitality.

(v) Residential uses are, however, of secondary importance to economic, cultural and infrastructure uses. lt is unreasonable for residents living within the CAD to have the same level of amenity as residents living, for example, in Carlton, East Melbourne or even Docklands, let alone traditional suburban settings.

1. In view of the above, it can fairly be said that there is no better strategic location in the State of Victoria for a licensed premises of the kind proposed than within the Melbourne CAD.
2. Indeed, as the Tribunal in Shaffey[5] observed, it could be fairly said that it would be a rare occasion when this Tribunal, given the nature of the planning controls applicable, would contemplate an outright refusal of a planning application for a bar/tavern for a site within the Capital City Zone 1.
3. Mr Chiappi also noted the overwhelming policy support for the 24-hour city and made reference to state and local policy that supported a broad mix of office, retail, residential, leisure, tourism and entertainment activities.
4. This strong policy support was not disputed by any of the other parties, although submissions opposing the tavern asserted that such strong policy did not override the necessity to consider the fair and reasonable expectations of other uses equally encouraged within the Capital City 1 Zone. In particular Mr O'Farrell submitted that:

Schedule 1 to the Capital City Zone requires the responsible authority to consider 'the existing and future use and amenity of the land and the locality'. Underpinning this consideration is substantial policy support for business to locate in the Central City (see Cityplan 2010 and Melbourne Planning Scheme). The thrust of policy is to manage the interface between different uses to encourage a range of uses to make the city vibrant and to ensure the range of CAD functions is achieved. It would be a nonsense to suggest that policy intends that all functions of the CAD must be met in all precincts or in all buildings. To the contrary, the achievement of the intended mix of uses in the Central City will sometimes require judicious management of the interface between different uses.

1. We agree with him. Even having regard to policy and previous Tribunal decisions as summarised by Mr Tweedie, policy cannot be taken to mean virtually untrammelled permission just for entertainment venues. The notion of a 'Vibrant City' has at its heart the concept of a wide variety of uses, intermingled and operating across the whole day, the whole week and the whole year. Other legitimate uses such as offices, retail and residential are also strongly encouraged (although we note that residential use and development has been singled out with the caveat that is must not compromise the other purposes and functions of the Central City and Central Activities District).
2. But within that broad spectrum of uses, offices are an absolutely fundamental land use within central Melbourne. It is not exaggerating to state that with very few exceptions (such as the GPO, cinemas, the major retail stores and shopping arcades) all the major buildings within the central city were constructed for, or are still used as, offices. It is a crucial land use, and policy gives it as much encouragement as entertainment, retailing and the like. As we were told by Mr Choiselat, it is an activity that can also have a 24 hour a day operation, and although less obvious to the passer-by than 24 hour a day entertainment venues, offices clearly contribute to the central Melbourne being the State's gateway to the global economy.
3. We consider that any proposals that have the potential to adversely affect office uses effectively undermine a key plank of planning policy for the central city. It is because of the potential for direct conflict between existing office uses and the proposed Tavern that we do not support the use of the ground floor of Bank House for a Tavern. We further discuss our concerns about this conflict later in our reasons.
4. We now want to say something about the amenity concerns raised by or on behalf of residents in nearby apartments in Temple Court and Charter House. It is evident from comments made that they are already experiencing disruptive noise and activity by virtue of their apartments being so close to existing entertainment venues in Bank Place and Little Collins Street.
5. Although they may not have realised it before moving in, living in central Melbourne means accepting a trade-off between enjoying the unrivalled convenience of living within the most significant and vibrant activity centre in Victoria and experiencing increased noise levels and other perceived 'negative' outcomes associated with living in such a location. The perhaps unfortunate and unanticipated reality is that residents have to tailor their expectations to the location. Planning policy makes it clear beyond doubt that, unlike regular residential zones and even inner city residential zones, residents who choose to live in the central city cannot curtail entertainment, retail, office, commercial and other uses, which take pre-eminence.

1. There was spirited debate about the capacity of the Bank House entrance lobby to cater for both commercial tenants and their invitees - and Tavern patrons. We note that the debate centred around the character and behaviour of Tavern patrons. It was acknowledged by all parties that the licensed restaurant, as an as-of- right use, could establish without any planning approvals at all.
2. In order to assist us understand how a shared lobby might work, an analysis of other restaurants, taverns and nightclubs, which share an entrance lobby with commercial or residential premises, was undertaken by the parties and the Tribunal.
3. The following table indicates that almost no operations involve a sole[6] shared lobby scenario.

Uncomfortably constrained shared lobby 4.8m by 3.7m

Shared entrance to food court/shops on ground floor and lifts giving access to offices upstairs

Tavern/Nightclub shares lobby during the day but we were advised during our inspection that on Friday and Saturday nights a separate door directly off Little Collins Street is used and the shared entrance through the arcade is closed for security purposes.

8 Exhibition Street main entry to Ernst and Young. Former Herald and Weekly Times Building

Separate Flinders Street old HWT entry to The Press Club also serving as subsidiary entrance to Ernst and Young.

Separate entrance to restaurant and subsidiary entrance to offices

Four separate entrances to main building offices (Collins & side)

Shared entry lobby, but nightclub in basement only opens after hours when retail closes

Dedicated after hours entrance off Elizabeth Street after 6.00 pm.

Separate entry to McKean and Park Solicitors offices at 405 Little Bourke

Two entrances for Bellini including corner splay entrance.

Two entrances for Strozzi including Collins Street and subsidiary entrance from lobby of 333 Collins Street

Restaurant entry shared with security lobby to Normanby Chambers

419 shared office and lift lobby closed off after hours.

1. Despite submissions from Mr Tweedie and Mr McGurn to the contrary, none of the shared lobbies we inspected were anything like what is proposed in this case. We are nonplussed at the concept of Tavern patrons utilising a constrained shared lobby with upstairs office uses.
2. The extensive survey we undertook, at the urging of the parties, revealed that there is usually a separate entrance for the entertainment use, even if there is also a shared entrance with commercial uses. This means that there is no forced conflict between the uses: options are available for both types of use to operate independently of the other. Professional invitees do not have to use the entertainment entrance to access professional premises.
3. This case is the diametric opposite. If a permit for this tavern were to issue, the operator could obtain a council local laws permit for kerbside trading. Patrons and staff have no option but to pass through the sole shared lobby space measuring 4.8m by 3.7m. In our opinion, the passage of staff and patrons through this constricted lobby to and from the restaurant/tavern would be detrimental to the commercial amenity of the professional occupants of this building.
4. As far as security after business hours is concerned, the entertainment uses we surveyed enjoy a separate entrance, so that no conflict need arise between patrons of the entertainment use and professional or residential occupants of a building. The professional or residential occupants of the premises we surveyed enjoy separately secured entrances to that part of the building that houses their offices or dwellings.
5. Again, this case is the diametric opposite.
6. The strong impression we gained from our site inspection and from the evidence of people working in the building, is that Bank House at present is in effect a 'citadel' for the office uses that occur within it and for people working on the various floors. Although the front entrance is unmanned during office hours, there is a real sense of leaving the noise and activity of Bank Place and moving into a different and less public space.
7. After hours when, based on the lay evidence we heard, Bank Place is noisier, rowdier and more threatening, that sense of entering a separate and more secure space is even greater.
8. The permit applicants offered to pay for, and accept permit conditions requiring, a range of alternative security arrangements to ensure no breach of security occurs to the professional suites after hours. They offered to install a swipe card system on the internal doors to the lift and stairwell lobby[7], closed circuit TV cameras and/or a security guard stationed in the lobby.
9. We consider that allowing the Tavern patrons into the building, even with new security arrangements on the lift area doors, will remove that sense, expressed above, of being separated from the outside world. Professional occupants would have to compete with patrons. We accept that can occur with a restaurant or some other similar as-of-right use, but it is evident that a tavern operating into the early hours of the morning will attract patrons seeking a different experience than if they were visiting a licensed restaurant.

1. We realise this next section of our decision is strictly speaking irrelevant, given our decision to refuse planning permission. But given the debate at the hearing on White Bar Pty Ltd v Port Phillip CC[8] ('White Bar') a decision concerning the historic George Hotel in Fitzroy Street St Kilda, we think it is important to mention the issue.
2. The security works offered by the permit applicant would generate the need for body corporate consent, because they would need attaching onto body corporate fixtures (except for the security guard). The majority of the body corporate members are opposed, for the time being, to this tavern use and its use of common property.
3. Had we come to the decision that in planning terms this is a location appropriate for a tavern, and imposed conditions on surveillance and security of the lobby, these conditions, unlike White Bar, would have been not negotiable because of the single constrained entrance lobby serving the Tavern and professional offices above.
4. Unlike White Bar, we would not have deleted our requirements if the body corporate were not willing to allow either mechanical alterations to its security system or a security officer to stand in its entrance lobby.

1. We would also make the point that whatever the good intentions of the permit applicant about the 'upmarket character' of patrons who will be attracted to this tavern, there is nothing that can be included in a planning permit to regulate the character of patrons or guarantee an upmarket venue. The quality of furnishings can set the scene when the venue first opens, but even with the best intentions, circumstances change over time. For example, the owners could sell to people with a completely different clientele in mind, or demand for an upmarket tavern may dissipate and so to stay in business the current owners may have to change their business plan.

Noise, other amenity conflicts and operational aspects of the proposal

1. The other major issue raised by nearby land owners concerns music noise from the venue and the behaviour of patrons coming to and from the venue along Bank Place.
2. Music noise from late night venues is always a potential problem for nearby residents no matter where the venue might be. Mr Huybregts gave expert evidence about the noise impacts expected to be created by operation of the Tavern and the measures required to ensure compliance with SEPP N1, SEPP-N2 and to overcome possible sleep disturbance. No alternative expert evidence was given.
3. Mr Huybregts' evidence suggests that noise limits will be exceeded without ameliorative action being taken, but we accept his evidence that with appropriate building treatments and management in accordance with agreed conditions the venue can be operated so that there is no loss of amenity to nearby residents or businesses.
4. We are less convinced of his evidence concerning the impact of the smokers' deck and of patrons outside the venue. He acknowledged that the louvres will have no effect acoustically. There are two doors leading from the Tavern onto the smoking deck and the deck is just 1.78 metres wide. In the absence of air locks, the opening of these doors will enable the clear transmission of noise which will, based on his earlier evidence, exceed the relevant standard. The fitting of airlocks in theory should overcome the problem but given the small width of the deck and the likelihood of people holding both doors open while they are coming and going, this may well result in the airlocks being ineffective. Avoiding adverse noise impacts via the smoking deck depends too much on ensuring the good behaviour of patrons, including ensuring that the doors are always closed. It strains credibility to expect such exemplary patron behaviour. It is evident to us that there will still be major risks of 'incidents' that will result in disturbing unacceptable noise impacts, particularly to people residing in the Metro apartments just across Bank Place beside Rosezler Lane.
5. The noise of patrons coming and going to the facility was also of concern to residents and business owners. Bank Place and Little Collins Street near the review site are part of a very busy and noisy precinct in the evening and the early hours of the morning. There will be quieter periods but this is not outer suburbia. People are already moving about these public thoroughfares and in many cases making considerable noise by talking, shouting, laughing, fighting and generally interacting with one another. We can do nothing about these existing circumstances and have already discussed the relevant policy guiding use and development in the central city.
6. However, because something exists does not mean that it should be exacerbated. Permit conditions can be included to minimise amenity impacts but any such requirements must be practical and make common sense. Although it is a fundamental and underlying assumption that permit conditions will be complied with, it is also nonsensical to include fanciful conditions which cannot be practically complied with, or which if included will require constant surveillance and enforcement. For example, we consider the suggestion that a permit condition be included limiting outside queues to 10 patrons to be both impractical and fanciful. Apart from the difficulty in settling on a number (5, 10 or whatever) the practical difficulties of achieving compliance make a nonsense of even trying to include such a condition. Marrakesh is just one (nearby) example of the impracticality of including such a requirement.
7. Although concerns were also raised about noise and activity in the side laneways, these are of minor importance given that patrons would not be utilising these laneways. There will be deliveries to and from Mitre Lane and some activity to and from Stallbridge Lane, although as noted previously, we are uncertain about how much this door will be used and for what purposes. We remain sceptical about how practical it will be to use these entrances on a daily basis although Mr Tweedie is correct in noting that older buildings often have inconvenient access arrangements through narrow doorways or up and down flights of stairs.
8. Stallbridge Lane is already used for bin storage and as informal extension to the kitchen of Syracuse Restaurant. Mitre Lane is used extensively as an outdoor area for Mitre Tavern and for delivery of beer kegs and the like. We consider that any activity beyond what is occurring or what can be reasonably expected in small service laneways in the middle of a vibrant capital city could be restricted (such as goods delivery, use of emergency stair case, etc) if a permit were being granted. It appeared to us that shared use of the fire exit stairs to Mitre Lane for Bank House was inadequate for deliveries to the Emporium and at risk of being blocked by restaurant/tavern supplies.

1. The use of the ground floor of Bank House for a tavern will introduce what we consider to be unacceptable conflicts between two uses that are equally encouraged in the central city. Although policy does give less emphasis to residential uses, it does not give greater emphasis to entertainment uses over other central city activities such as offices and retailing. We are not convinced that the details of this proposal and how it will relate to existing activities within Bank House have been satisfactorily resolved. We are particularly concerned about the use of such a small lobby for tavern and office uses. We are unconvinced about how the smoking deck will work, both in terms of its size and the way in which noise transmission will be prevented. We remain unconvinced about the practical use of the rear stairway or the door to Stallbridge Lane for loading and unloading purposes and the movement of garbage bins.
2. Accordingly the Tribunal will allow the application for review and direct that no permit issue.

[1] E.g. Treviso Cucina, Ortigia Pizzeria, Lucia's Place; Syracuse, Savage Club

[4] E.g. Vue de Monde, The Balcony, CQ's and Irish Times

[5] Shaffey Pty Ltd v Melbourne CC [2004] VCAT 2473 (10 December 2004), Margaret Baird SM

[6] Georges Long Room was the singular exception

[7] One already exists for the entrance/exit doors to Bank House

[8] (Occupational and Business Regulation) [2007] VCAT 275