Victorian Supreme Court clarifies test for non-residential uses in residential zones
The Victorian Supreme Court has provided important guidance for planning disputes involving non-residential uses in residential zones throughout Victoria. In Denali Nominees Pty Ltd v Banyule City Council, the court held that planning decision-makers should apply the test of 'acceptability' not 'sameness'.
Key takeaways
- Non-residential uses in residential zones must be assessed for acceptability, not equivalence to residential uses.
- The planning scheme expressly allows non-residential uses that serve local needs, especially in locations near commercial areas or main roads.
- Decision-makers must adhere to the planning framework and avoid introducing extra-statutory tests or comparators.
Background and context
Hall & Wilcox acted for the applicant, Denali Nominees, who sought to relocate its established veterinary clinic to another part of Lower Heidelberg Road, Ivanhoe East, within the Neighbourhood Residential Zone Schedule 3 (NRZ3) of the Banyule Planning Scheme. The new site sits at the edge of a residential area, adjacent to the Ivanhoe East commercial precinct. Because the intended use is non-residential, a planning permit was required. Banyule City Council initially supported the application, but objectors appealed to the Victorian Civil and Administrative Tribunal (VCAT), which refused the permit.[1]
A revised application was subsequently lodged with the council, which sought to address some of the Tribunal's concerns in the initial application. However, this application was also opposed by objectors and was again taken on review to VCAT which, despite recognising the efforts made by the applicant to address previously raised concerns, again refused the grant of a permit. The applicant subsequently appealed to the Victorian Supreme Court on the following main grounds:
- the Tribunal erred by holding that the grant of a permit for a non-residential use on land in a residential area was by itself unacceptable in circumstances where the Act and the Scheme specifically contemplates that non-residential uses could be established on the land; and
- the Tribunal erred by imposing a requirement that the intensity of any non-residential use not exceed the intensity of use associated with a dwelling or dwellings.
VCAT’s reasoning
VCAT had concluded that the proposed veterinary clinic would introduce an intensity of activity, through increased movement of people, animals and vehicles, that was inconsistent with the level of activity expected from a residential development in the NRZ3. The Tribunal measured the proposal against a hypothetical, compliant residential use and, on that basis, deemed the non-residential use unacceptable, even though the site satisfied many of the scheme's locational criteria for non-residential uses.[2]
Supreme Court decision
Justice Finanzio held that VCAT had applied the wrong legal test. The planning scheme does not require non-residential uses to mirror the intensity or character of residential uses. On the contrary, it contemplates that non-residential uses serving local community needs may be appropriate in residential zones, particularly on main roads and adjacent to commercial areas.[3]
The court emphasised that the correct test is one of 'acceptability', not 'sameness'. ³ Decision-makers must consider whether the impacts of a proposed non-residential use are acceptable in light of the planning scheme's policies and guidelines, rather than comparing them to a notional residential benchmark. Accordingly, non-residential uses that have different, or even greater, impacts than residential uses may still be approved, provided they are suitably located and designed.[4]
Outcome and implications
The Supreme Court set aside the Tribunal's decision and has remitted the matter for rehearing before a differently constituted Tribunal.
The judgment makes clear that planning authorities and tribunals should not impose an artificial residential comparator when assessing non-residential uses in residential zones. Instead, they must apply the planning scheme as written, recognising the legitimate role of non-residential uses in meeting community needs.[5]
This case provides important guidance for future planning disputes involving non-residential uses in residential zones throughout Victoria.
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