A proposed 100-unit aged care facility at Red Hill has been deemed incompatible with the surrounding low-density neighbourhood by the ACT Civil and Administrative Tribunal.
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But the developer, Baptist Community Services, has not ruled out another legal challenge in the Supreme Court.
Redevelopment plans for the Morling Lodge facility were rejected by the ACT Planning and Land Authority twice before the religious organisation took the matter to the tribunal for review.
Yesterday, in a 37-page decision, Don McMichael and Wilhelmena Corby confirmed the planning body's decision to refuse the development application.
In their decision the members objected to the size of the development and its impact on traffic and road congestion.
''The applicant has proposed a development of a scale that still cannot, in our view, be said to be within a low-density environment nor can it be said to respect and contribute to the neighbourhood,'' they said.
''It remains therefore inconsistent with the first and second objectives of an RZ1 zone. Nor do we consider that what is proposed would be sympathetic to the existing garden suburb neighbourhood character in terms of scale and form and hence, in our opinion, it does not adequately address one of the key strategies of the Red Hill Neighbourhood Plan.''
But the ACAT decision left the door open for a smaller development of 50 to 70 units.
''Such a reduction in size would in all probability overcome the inconsistencies with the zone objectives and the key strategies of the Red Hill Neighbourhood Plan [and] would avoid the potential traffic and parking problems arising from the original 100-unit proposal.''
In an emailed statement the chief executive officer of Baptist Community Services Ross Low said the development should be allowed.
''This is very disappointing given that BCS's Red Hill development application has ensured compliance with all Building Code of Australia guidelines and consistency with the Territory Plan - this most recent appeal to the Tribunal included specialist reports demonstrating compliance,'' Mr Low said.
The statement did not rule out any further legal action.
Red Hill resident Tony Gay, who was one of a group of resident respondents involved in the six-day hearing, said the proposed development would have overshadowed residential properties.
''It's nice to see confirmation of what we've believed all along,'' Mr Gay said.
''It's very pleasing to see that despite our cynicism of the system that they can reach the right result on occasion.''
But Gavin Back said locals were concerned that BCS would appeal the decision in the Supreme Court.
''Appeal rights are open to the applicant but we hope they will abide by this decision,'' Mr Back said.
