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It could attached, meaning no gap to 1.8m. Obviously if you make it more than 1.8m you don't need a fire rated wall. This doesn't change the 3m side / secondary street setback though. That remains regardless.

From your diagram I see 5.607m from boundary to the wall of the house. Therefore if the granny flat was attached, the maximum width of the granny flat could be 2.607m. Now if you want it separated, the minimum would have to 1.8m if you didnt want to do a fire rated wall. Therefore 5.607...

Its 3m from your boundary. The 900mm from the boundary is for blocks that DO NOT have a secondary st (ie non corner blocks). As for the secondary st question... its the entire secondary street. So draw a parallel line that is 3m in. The building can touch that line, but it cannot be over...

Navid, do you have any more information regarding granny flats larger than 60sqm for Ashfield council (and any other council for that matter?)

Your block size is 680sqm. Therefore the granny flat needs to be a MINIMUM of 3m away from the secondary street. Assuming where the green (which i assume is grass) ends is the boundary, you will not be able to put a granny flat where you have drawn it. Unfortunately devank's design won't fit...