The owner of the property on the corner of Manuka Circle and Fitzroy St has been embroiled in on ongoing round of development applications and objections from neighbours and inner south residents. Two stopwork notices were reportedly issued in 2015, one for an unapproved steel frame on the roof that was subsequently removed, and another for an unapproved upper floor at the rear.

Nearby resident Rebecca Scouller, who says the redevelopment sets a precedent that could ruin the heritage values of the precinct, took the case to the ACT Civil and Administrative Appeals Tribunal on Monday.

The heritage-listed block, built in 1939, consists of the old fire station and seven brick homes - one on each corner and duplexes between.

In October 2015, the planning directorate approved plans from owner Tomislav Kasunic for a two-storey extension for a house, an office, and two carports.

In November 2016, a second application to extend the building to add a second office and a car stacker was rejected. The planning directorate said the 160 sq m office was too big given the Forrest planning code required offices to be "limited in scale". The proposal replaced all the front landscaping with parking and driveways and was dangerous for pedestrians, and would remove all private open space. While there was a rooftop area with umbrella, it had never been approved. Noise from the air-conditioning unit would impact the adjacent block. The proposal did not meet disability rules, was inconsistent with the lease, and heritage had withdrawn its support, the November decision said.

But the decision was reversed in December 2016 after the proposal went to the government's "major projects review group" - a high-level group set up to give an "agency-wide perspective on complex development proposals".

In its December 21 decision, the planning authority said after a site visit it was satisfied the driveways were not dangerous, the air conditioning units were adequately screened, paved areas and the rooftop space were satisfactory, and open space requirements were met, taking into account the rooftop and proximity to Telopea Park. While it was not in line with some housing code rules, it met the criteria for privacy and separation. A new lease had been lodged, and an accessible parking spot would be provided.

Ms Scouller and the Kingston and Barton Residents Group have complained over many months about the proposals and the work. Ms Scouller says a ground-floor extension at the rear of the building was approved by the heritage unit on the basis that it was a laundry, but it runs the entire length of the house, with approval now given for another storey on top.

She says she was assured in 2015 that the property would only be allowed to contain one residence and one office, but it was now being split into two offices and a residence.

When the owner applied for permission for two underground water tanks, she raised concerns that the space would be used for a "car stacker" instead. While the government assured her that only water tanks would be allowed, the car stacker had now been approved.

Concerned the development sets a precedent that could destroy the heritage precinct, Ms Scouller tried to appeal to the tribunal on Monday.

But government lawyers blocked the move, pointing to a 2008 planning regulation that bans appeals in commercial zones, so long as the development is not within 50 metres of a residential zone and the work does not increase the gross floor area by more than 50 per cent.

The Manuka fire station precinct is in the commercial CZ5 zone. Government lawyers told the tribunal the nearest residential zone was 59 metres away and the development would increase the floor area by about 45 per cent.

Ms Scouller's lawyers argued that the development increased gross floor area by much more than 50 per cent when compared with the building before 2015.

But the argument was rejected by tribunal presidential member Mary-Therese Daniel, who found in favour of the government.

Ms Daniel, though, was also critical of a letter from the planning authority to Mr Scouller advising her of its decision and telling her she could appeal. While government lawyers said the letter had been sent in error, Ms Daniel said it was "very disappointing and upsetting" for members of the public to be told they could review, then go ahead and lodge a review only to be told they had no right to review.