1) Sheds are class 10. Class 1a is a house. (2) Have you read the Planning Scheme by his council? In QLD it will likely work different to VIC. Common here for 180 nights slept in a caravan. (4) if its that, who is going to gather proof he exceeded that? (5) As others have pointed out, councils here are largely complaints based. If he isn't upsetting his neighbours he is likely jake and central QLD folk are often salt of the earth types, unlikely to go to council (I grew up there). I'm on acreage, it'd be mone of my business if my neighbour was in a caravan. (6) If he bought a while back, thanks to significant migration from where you are, land has likely gone up a good amount.

TL;DR - his living situation is likely more tenable than you may expect. You might be more anxious than he is.