Simply,the Victorian Regulation 409 of the Building Regulations 2006 says you can not come forward of the nearest setback of your adjoining neighbour blah blah blah or 9m minimum so the first in gets to set the setback either at 5m or further back which is also covered by Rescode to a maximum.But this presents problems for those who come later,i.e they have to fit in with Rescode and the neihgbours amenity.
But! Rescode gives councils some latitude to play with the rules as long as they cover their proverbials.
Hence dispensation comes into play.You pay a fee for your builder or you to apply to the council for a setback variation.To quicken the process you see the neighbours on both sides,show them your site plans and ask for them to agree to a lesser setback than theirs e.g they are nine metres from the footpath and you want five m for your house.If they do agree you get them to sign the plans as being agreeable and then complete the forms which are basically to do with addressing why the council should rubber stamp your request.
It can be done,takes a couple of hours work to address the forms,get the signatures and submit to council.
Scrowl done to Reg409
http://www.dms.dpc.vic.gov.au/Domino/Web_Notes/LDMS/PubStatbook.nsf/b05145073fa2a882ca256da4001bc4e7/79D66077DE4827BCCA2571850013458E/$FILE/06-068sr.pdf