Neighbour’s objection to a 10-home development dismissed as not a planning issue (VCAT, 2026)

What happened

A developer applied to Knox City Council for a planning permit to build 10 single dwellings on a block in Bayswater. Under the Knox Planning Scheme, a permit was needed to construct two or more dwellings on a lot (clause 32.09-7, Neighbourhood Residential Zone) and to remove a canopy tree in a residential zone (clause 52.37-2). Because the development was three storeys or less, it had to be assessed against clause 55, the set of residential design standards covering things like setbacks, overlooking, parking and landscaping.

The owner of a single dwelling on the north side of the site, fronting the same street, objected when notice of the application was given. That owner leased the property out as an investment. They wrote to the council in March saying they were worried about the effect of the development on the property, and said they received no reply. Their tenants then moved out, and the owner said the only reason given was the disruption and day-to-day impact of the coming construction. A large planning notice sign went up on the development site. The owner said the property was now difficult to lease or sell, and that with a mortgage to pay and no rent coming in they were under financial pressure.

On 21 July 2026 the council issued a Notice of Decision to Grant a Permit with conditions. Two days later, on 23 July 2026, the neighbouring owner lodged an application with VCAT to review that decision under section 82(1) of the Planning and Environment Act 1987 (Vic), which gives an objector the right to have the council's decision reviewed by the Tribunal. The grounds on the form were about the lost tenants, the difficulty leasing or selling, the financial pressure, and a request for "some form of compensation" if the permit went ahead.

On 25 August 2026 the permit holder asked for a practice day hearing (a short procedural hearing) to correct the name of the respondent to Pinnacle Haus Pty Ltd, which was done, and to have the review application thrown out without a full hearing. That practice day hearing was held by video conference on 2 October 2026, with written submissions filed beforehand. The objecting owner appeared in person; the council and the permit holder were each represented by a town planner.

What each side wanted

The objecting owner wanted the council's decision overturned or, if the development proceeded, compensation for the loss they said they had suffered. In a written submission filed shortly before the practice day hearing they also raised a much wider list of concerns, including neighbourhood character and over-development, the internal layout, the shared driveway, traffic congestion and local infrastructure, on-site parking, stormwater and drainage, overlooking and loss of privacy, and the risk to their property from excavation close to the boundary. The permit holder asked for summary dismissal, arguing none of the original grounds were relevant planning considerations: parking complied with clause 52.06, there was no unreasonable traffic impact, temporary construction impacts were not a planning consideration, property value impacts were not a planning consideration, and there is no planning provision for compensating neighbours when private land is developed. The council supported that position and said its own assessment found only one clause 55 standard not met, and not near the objector's property.

What the tribunal decided

The Tribunal summarily dismissed the application for review under section 75 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), on the grounds that it was misconceived and lacking in substance.

Two listed events were cancelled as a result. The compulsory conference set to start at 2.00pm on 15 October 2026 was vacated, with no attendance required. The hearing set to start at 10.00am on 9 December 2026 was also vacated, with no attendance required. No money was ordered to be paid either way.

Why the tribunal decided it that way

Section 75 lets VCAT dismiss a case without a full hearing if it is misconceived, lacking in substance, or otherwise an abuse of process. The Member set out the test the Tribunal applies, drawn from an earlier VCAT decision, Axicom Pty Ltd v Melton CC: the case must be obviously unsustainable in fact or law and bound to fail; the power must be used with great care and never unless it is very clear there is no real question to be tried and the case is "absolutely hopeless"; it must not be used merely because the applicant might fail to produce enough evidence; it must not be used where the outcome depends on disputed facts that evidence could still establish; and the party asking for dismissal carries the burden of showing the case is undoubtedly hopeless.

The Member accepted that the objecting owner's concerns were genuine, and that they believed the development would affect the quality of life of whoever lived in their property. But the grounds actually raised were either not relevant planning considerations or had already been assessed and found to comply. Noise, dust and temporary construction impacts are generally dealt with by permit conditions rather than by refusing a permit; condition 15 of the Notice of Decision required a construction and traffic management plan. Property value and financial impacts have long been held in Victorian planning not to be a valid planning consideration, and there is no scheme for compensating adjoining landowners in planning decisions. On that basis the grounds had no reasonable prospect of success and the proceeding was bound to fail.

The review right itself was narrow. Removal of the canopy tree under clause 52.37 was not raised by the objector and in any case is exempt from review under clause 52.37-5. For the dwellings, clause 32.09-13 removes the section 82(1) review right altogether if all the applicable standards in clauses 55.02, 55.04-1 to 55.04-4 and 55.05-2 are met. Here the council's delegate report found every applicable standard met or not applicable except Standard B4-4 (an overlooking standard), which the council proposed to fix by a condition requiring the relevant boundary fence to be replaced at 1.8 metres high. That single non-compliance was what kept the review right alive.

The late, expanded clause 55 grounds did not change the result. The objector never formally sought leave to amend their grounds and leave was not granted; the Member said he would not have been inclined to allow the change in any event, because the case had been running for some time and the new grounds appeared shortly before the compulsory conference. Following another recent VCAT decision, Docherty v Bayside CC, the Member noted that a section 82 objector cannot challenge the council's satisfaction that a standard was met, and that one standard being unmet does not open up the standards the council was satisfied about. The one non-compliant standard concerned overlooking at the rear of the site, away from the objector's property, it was not a ground they had raised, and it was to be fixed by a permit condition anyway.

What this means if you are in a similar position

If you are in a similar position, objecting to a development next door, this decision shows how narrowly planning law defines what counts. The tribunal weighs the proposal against the planning scheme's own standards. Things that matter a great deal to a neighbour in practical terms, such as losing tenants, a drop in what the property might sell for, a mortgage that still has to be paid, or the noise, dust and disruption of a building site, are not grounds on which a permit is refused under Victorian planning law, and there is no planning mechanism that pays a neighbour compensation when private land is developed. Construction impacts are usually handled by conditions on the permit, such as a construction and traffic management plan.

The decision also shows that the right to seek review is itself limited. For a development of three storeys or less in that zone, the review right only exists at all because one applicable standard was not met, and a later VCAT decision has held that an objector cannot use that opening to re-argue the standards the council was satisfied were met. It is also a reminder that the grounds written on the review application are the grounds the tribunal deals with. Here, a much broader set of design and amenity arguments turned up in a written submission shortly before the compulsory conference, no leave to amend was sought, and they were not considered.

In this kind of dispute, most people start by putting their concerns to the council in writing during the notice period, clearly and in terms the planning scheme recognises, before any application to the tribunal is lodged.

How to apply: our step-by-step guide to a VCAT application. More decisions: VCAT cases and other civil disputes.

Source: Zhang v Knox CC [2026] VCAT 826 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.