Councillors have sent the applicants behind a two-lot subdivision back to the drawing board stating a planning permit approval would set a false precedent for the future development of Port Campbell.
All but Corangamite Shire's south-west ward councillor Kate Makin voted on Tuesday night to refuse an application to build a second, two-storey dwelling at 33 Pitcher Street.
The proposal would have encompassed lot one with the existing 347-square metre dwelling and lot two, a proposed battle-axe configuration of 648 square metres.
The proposed two-storey building would have reached a maximum height of 8.34 metres and housed four bedrooms, three bathrooms and a double garage.
One objection was raised regarding issues including overlooking, privacy, building mass and scale and neighbourhood character.
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Peter Younis told councillors in a deputation that the proposal did not fit with the existing character of the town.
"We are not objecting to the fact it's a two storey building, the building proposed is not a small scale infill development, it's large-scale and it's definitely not maintaining the low-scale coastal character," he said.
"Most importantly this particular slight is a sloping block ... which increases the overlooking (aspect)".
South-central ward councillor Jo Beard acknowledged Mr Younis' comments, stating she did not agree with the officer's recommendation.
"I'm not comfortable with the application as it sits and the officer's recommendation," Cr Beard said.
"The overlooking was a significant issue and I appreciate there's been some steps taken and some mitigation applied, but I still don't think it's enough.
"I think there are some other options or opportunities left not taken into account and I would have liked to see more work done in this area.
"It is a significant house for an infill site, I don't have an issue with the fact it's a two-lot subdivision or that we have an opportunity to provide infill to Port Campbell but we have to be careful about the precedent we're setting.
"If we just let this one go through with the objections, we are setting ourselves up for more in the future.
"I'd like to see the applicants do some more work around the protection and the rights of those people who live around them."
Coastal ward councillor Jamie Vogels said he took issue with the location of the proposal.
"I'm not against two-storey houses in Port Campbell if they're situated in the right spot," he said.
"I'm not against subdivisions in small lots if it's done well. It's just the siting of this on the block that is unacceptable."
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