This decision was about whether it was acceptable to have planning permit conditions that required specific sustainability features be installed in small, new buildings. More broadly, the decision considered the extent to which local councils can promote built form sustainability ¹⁾ through planning permits.

Under the Planning and Environment Act 1978 (Vic), Darebin Council granted Mr Robert Polizzi a permit to build two dwellings: one double-storey and the other single-storey. The permit was subject to 23 conditions, two of which Mr Polizzi challenged before the Tribunal.

The first disputed condition, Condition 1(k), required Mr Polizzi to modify the building design in accordance with the Sustainable Design Statement (“SDS”). The SDS was the subject of Condition 5, the other disputed condition. Condition 5 obligated the permit holder to submit an SDS to the Responsible Authority. The SDS was to detail rather specific sustainable design strategies that would be incorporated into the building development.

1. Whether the two conditions were acceptable as permit conditions.

2. How councils could promote greater built form sustainability for smaller units like Mr Polizzi’s.

The conditions are not valid, and they should be deleted from the permit.

Member Philip Martin considered the two conditions ‘excessive and lacking a reasonable nexus with the approval granted’,²⁾ because it was disproportionately expensive for smaller multi-unit constructions like the ones in the present case.

The test for whether permit conditions are acceptable is found in Domus Designs Pty Ltd v Frankston City Council:

To be valid, a condition in a planning permit must fairly and reasonably relate to the permitted development or the condition must be reasonably capable of being regarded as relevant to the implementation of planning policy as ascertained from the Planning and Environment Act and relevant planning scheme.

Member Martin supported previous Tribunal decisions that had upheld similar conditions, but stressed that they were for larger developments, ‘where the additional costs are more proportionate to and can be readily factored into the project budget’³⁾ [emphasis in original]. In short, permit conditions that promote greater built form sustainability are good, provided that the cost of the measures that they impose is reasonably proportionate, or reasonably related, to the value of the construction.

In supporting a test of proportionality, Member Martin rejected a ‘blanket basis’ to setting permits. He stated that unless Councils can justify otherwise they;

need to consider each permit application on its own merits in terms of what permit conditions should apply…

Member Martin quoted Poulos v Darebin City Council,⁴⁾ in which the Tribunal was ‘troubled with’ permit conditions that specified ‘detailed construction methods, building materials, appliances and fixtures’. The Tribunal’s unease stemmed from the overlap between existing building approval processes and the permit system. Member Martin cited Hasan v Moreland City Council⁵⁾ as a key decision in which permit conditions requiring solar hot water systems, rainwater tanks and 5-star energy ratings were inappropriate (though lawful), because building regulations already ‘comprehensively’ covered them. He considered this decision to still have ‘strong weight’ against ‘very prescriptive planning permit requirements intended to be applied on a blanket basis’.

Member Martin commended the efforts of the Darebin, Moreland and Port Phillip Councils in seeing to promote more sustainable housing. He noted that the Darebin Planning Scheme includes a ‘real emphasis on environmental sustainability’.

Despite his continuing support of the proposition in Hasan, he acknowledged that planning permits, as opposed to building permits, may yet have potential to promote sustainable design. He said that the building permit stage may be too late for sustainability requirements. For example, if planning approval is given for a poorly sited dwelling, then a subsequent building permit would be unable to increase its exposure to sun for solar power.

Member Martin expressed the need for Councils to be careful when using advanced tools like STEPS (Sustainable Tools for Environmental Performance Strategy), which is a program for modelling sustainable design performance. He emphasised the desirability of providing clear information on when and how to use such tools.

• The full decision is available on Austlii