It comes despite warnings back in 2020 that the owner would need to "act immediately" if they wanted to keep the permit they have had since at least 2004.

They first applied to build seven residential units and a car park out the back of 28 Johnstone Street, Castlemaine two decades ago.

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The Mount Alexander Shire council had refused a ninth time extension on the project, saying building works were taking too long.

That decision has now been overturned by state planning umpire the Victorian Civil and Administrative Tribunal.

A map showing the location of the build:

The last time the tribunal weighed in on a time extension was in February 2020, when it heard building works were 65 per cent complete and what was left was "the easy part".

That was a month before COVID-19 arrived in Australia.

By the end of March 2020 the entire state was in lockdown and Castlemaine building projects were being hit with a litany of problems, tribunal member Rachel Naylor has now said while outlining why she would allow the newest time extension.

"These problems included a lack of building materials and a lack of availability of various trades to undertake individual parts of the building work when required," she said in a ruling dated to September 14, 2023.

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Ms Naylor had heard the landowner was still grappling with timber supply shortages at the end of 2022.

They had brought multiple witnesses to the tribunal hearing to outline the pressures on Castlemaine's building industry including a plumber, builder and manager of a local hardware supplier.

The tribunal also heard a key builder had fallen ill in 2021 and spent considerable time in hospital and at home recovering. That had impacted their ability to oversee works.

Ms Naylor dismissed the council's arguments that the illness should not be factored into an extension of time.

It argued such matters were not planning matters.

"I disagree," Ms Naylor said.

Both the illness and the pandemic were outside the landowner's control, Ms Naylor said. She said there was scope for extensions of time based on such matters.

Ms Naylor was concerned that the owner's illness could create new delays but said it was clear from the works so far that they wanted to complete the build.

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"Furthermore, having a partially completed development is not desirable for the council or the community more broadly," she said.

Ms Naylor extended the permit for another three years.

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