The Kornhauser family, who control a property and business empire worth an estimated $430 million, have taken their bid to run a religious school from their mansion in a residential area in St Kilda East all the way to the Supreme Court.
The legal move comes after Eliezer (Eric) and Nicole Kornhauser failed to secure planning approval from the Glen Eira Council and lost an appeal to the Victorian Civil and Administrative Tribunal.
The dispute centres on the operation of an "education centre" the Kornhausers have run from their two-storey contemporary mansion built across two allotments on Springfield Avenue in St Kilda East.
The northern wing of the U-shaped property holds classrooms where 14 boys receive Jewish religious instruction during the day, and intensive courses are held for young local and international Jewish women through the Merkos Women program.
Some of the visiting women live next door at another property owned by the Kornhausers. After complaints began to mount from neighbours about "creeping" intensity of use at the site - particularly noise, parking and traffic problems - the Kornhausers sought formal planning approval for the education centre. Glen Eira Council refused the application and the decision was upheld at VCAT in July.
VCAT member Philip Martin found the Kornhausers' proposal represented a "fatally poor planning outcome".
"I have some sympathy for the line of thinking that a dead-end residential street zoned Residential 1 is not an obvious place to establish this type of combined 'women's and children's religious studies' use," he said.
Mr Martin also found that it was likely that a 95-year-old covenant established over the southern allotment prohibiting the use of the land for "any religious educational or charitable use" was being breached by students using the pool on the residential side of the property.
The council has agreed not to fight the move in exchange for a promise from the Kornhausers that they would not seek to force the council to pay any legal costs if the family wins the case.
Nicole Kornhauser could not be reached for comment. A directions hearing is set for November 29.