Medium Neutral Citation [2002] VCAT 280

The decision of the responsible authority is affirmed. A permit must not be granted.

Mr C Bannon of Bannon Consultants, Planners and Engineers, appeared on behalf of the Applicant for Review.

Mr P O'Dwyer, town planner, appeared on behalf of the Responsible Authority.

Mr B Hickey appeared on behalf of the Victorian Roads Corporation.

1. This is an Application under Section 77 of the Planning and Environment Act 1987 ("The Act") brought by Mr and Mrs J Adams to review a decision by the Shire of Indigo ("The Council") to refuse a permit .

2. Prior to the commencement of the hearing, correspondence was received by the Tribunal on 6 February, 2002 from the Regional Manager of VicRoads. The correspondence stated that VicRoads was of the view that the application ought to have been referred to it in accordance with clause 52.29 of the planning scheme, on the basis that Lindsay Road is a road in a Road Zone Category 1. The application had not been referred to VicRoads.

"An application to create or alter access to, or to subdivide land adjacent to, a road declared under the Transport Act 1983, land owned by the Roads Corporation for the purpose of a road, or land in a Public Acquisition Overlay if the Roads Corporation is the authority responsible for acquiring the land, must be referred to the Roads Corporation under Section 55 of the Act. This does not apply to:

* Subdivisions of existing buildings already connected to services and requiring no new access.

* Proposals which, in the opinion of the responsible authority, satisfy requirements or conditions previously agreed in writing between the responsible authority and the Roads Corporation.

Any other application must be referred to the owner of, or the authority responsible for acquiring, the adjacent land in the Road Zone, Category 1, or the Public Acquisition Overlay"

4. The decision guidelines under that clause state that;

"Before deciding on an application, in addition to the decision guidelines in Clause 65, the responsible authority must consider:

* The State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

* The effect of the proposal on the operation of the road and on public safety."

5. While the current application is for the subdivision of land adjacent to a road in a road Zone Category 1, the exemptions from the referral provisions are clearly applicable given that the application is for the subdivision of an existing building already connected to services and requiring no new access, and is a two lot subdivision requiring no new access.

6. Having regard to the decision guidelines under clause 52.29 however, I formed the view pursuant to section 60 (1) of the Victorian Civil and Administrative Tribunal Act 1998 that it would be appropriate for VicRoads to be joined as a party to this proceeding.

7. It is proposed to subdivide a rural lot which currently has an area of 84.9 hectares into two lots of two hectares and 82.9 hectares. The property is currently used as open grazing land and comprises a house and farm outbuildings and stock yards. It is proposed that the two hectare lot will accommodate the house while the grazing land and the infrastructure associated with that use will be located on the larger lot.

8. Mr Bannon accurately described the proposal as "....quite simply to excise the house from the present 84.9 hectare holding." I was advised that the applicant owns a farm property of approximately 320 hectares adjacent to the review site and purchased the review site in April 2001 as part of a strategy to increase the size of their farm holding in order to improve farm efficiency. It is intended that the proposed 82.9 hectare lot will be used for grazing purposes in association with the applicant's principal farm, but the dwelling on the review site is not required for that purpose and it is proposed to dispose of the dwelling to at least partly offset the cost of acquisition of the site.

9. The review site is located on the south side of Lindsay Road, Staghorn, which is a farming community located approximately ten kilometres north of Yackandandah, and 15 kilometres south of Wodonga, on the Yackandandah - Wodonga Road.

10. Mr O'Dwyer provided the following useful description of the land and its environs which I adopt;

"The land currently contains a single dwelling located on a fence suburban sized house lot with direct frontage to Lindsay Road. The remainder of the property is predominantly used for grazing and cropping purposes. A number of sheds are also located on the land.

Immediately adjacent across Lindsay Road is a rural property which contains a house and various outbuildings. Lindsay Road forms a border with the Rural city of Wodonga and consequently that land is located within the Wodonga Planning Scheme (Appendix 3). The subject land is undulating with a small hill along the northern boundary. Over that hill to the west are located two house lots (1 and 2 ha respectively) which were subdivided from the subject land under previous planning schemes."

11. It is also significant that within the immediate locality of the review site there is a number of rural/residential subdivisions including estates known as Baranduda and Patrice Vale, which are located within the City of Wodonga.

12. The site is zoned Rural under the Indigo Planning Scheme. The purpose of the zone is, in addition to implementing the State Planning Policy Framework and the Local Planning Policy Framework;

"To provide for the sustainable use of land for Extensive animal husbandry (including dairying and grazing) and Crop raising (including Horticulture and Timber production).

* Protection and creation of an effective rural infrastructure and land resource.

* Improvement of existing agricultural techniques.

* Protection and enhancement of the bio-diversity of the area.

* Value adding to agricultural products at source.

* Promotion of economic development compatible with rural activities.

* Development of new sustainable rural enterprises.

To ensure that subdivision promotes effective land management practices and infrastructure

13. Pursuant to clause 35.01-4 of the planning scheme, a permit is required to subdivide land. Each lot must be at least the area specified for the land in a schedule to this zone, and if no area is specified, each lot must be at least 40 hectares. A permit may be granted to create smaller lots if any of the following apply;

* "The subdivision is the re-subdivision of existing lots. The number of lots must not be increased and all lots must be at least 0.4 hectare.

* The number of lots is no more than the number the land could be subdivided into in accordance with a schedule to this zone. All lots must be at least 0.4 hectare. An agreement under Section 173 of the Act must be entered into with the owner of each lot created which ensures that the land may not be further subdivided so as to increase the number of lots, unless creating a lot for an existing dwelling. The agreement must be registered on title.

* The subdivision is to create a lot for an existing dwelling. Only one additional lot which does not contain a dwelling may be created in the subdivision. Each lot must be at least 0.4 hectare.

* The subdivision is by a public authority or utility service provider to create a lot for a utility installation".

14. The schedule to the zone specifies a minimum subdivision area for all land in the Rural zone of 40 hectares, except where approved by the responsible authority in accordance with the Local Planning Policy titled Land use, development and subdivision in rural areas (Clause 22.02-2).

15. An application to subdivide land must be accompanied by a report which explains how the proposed subdivision;

* Responds to the decision guidelines for this zone.

* Responds to any additional objectives and performance requirements set out in any relevant Local Planning Policy in this scheme.

16. Decision Guidelines for the consideration of planning permit applications for the use, subdivision or development of land in the Rural zone are included at Clause 35.01-6. General Decision Guidelines are included at Clause 65.

17. The State Planning Policy Framework (SPPF) of the planning scheme contains strategic issues of State importance which must be considered when decisions are made on applications for planning permits. Clause 17.05 of the State Planning Policy Framework is directly relevant to the consideration of this application. The objective of the clause is:

" To ensure that the state's agricultural base is protected from the unplanned loss of high quality productive agricultural land due to permanent changes of land use and to enable protection of productive farm land which is of high quality and strategic significance in the local or regional context."

18. Clause 17.05 provides broad policy support for the protection of productive agricultural land and for the encouragement of sustainable agricultural land use and practices. Under the heading General Implementation at clause 17.05-2 it is stated that the following factors must be considered by a Responsible Authority (and on review this Tribunal) in considering a proposal to subdivide or develop agricultural land:

"* The desirability and impacts of removing the land from primary production, given its agricultural quality and productivity.

* The impacts of the proposed subdivision or development on the continuation of primary production on adjacent land, with particular regard to land values and to the viability of infrastructure for such production.

* The compatibility between the proposed or likely development and the existing uses of the surrounding land.

19. The Local Planning Policy Framework (LPPF) identifies long term directions about land use and development in the municipality and provides the rationale for the zone and overlay requirements and particular provisions in the scheme. It is I think necessary to summarise in some detail the provisions of the LPPF because this application raises fundamental policy issues concerning the subdivision of land zoned rural in the municipality. In this respect I note Mr O'Dwyer's submission that this application for review is the first of its type in which a council decision to refuse an application has been pursued under the VPP format Indigo Planning Scheme and it is viewed by the council as a test case for the council's policy on subdivision in the Rural zone.

20. The Municipal Strategic Statement (MSS) provides a statement of the key strategic planning, land use and development objectives for the municipality and the actions for achieving those objectives. The MSS is complemented by a series of local policies. Small lot subdivisions and house lot excisions are specifically identified as one of the key issues confronting the municipality. The municipality's attractiveness for alternative residential lifestyles and the strong demand for rural living derives primarily from its proximity to Albury and Wodonga, one of the fastest growing regions in Australia. The MSS also identifies the economic importance of the agricultural sector, the significance of high quality agricultural land, broadacre grazing and crop production areas, and the need to protect and support these because of their economic significance.

21. While the Council's economic development strategy emphasises the provision of high quality residential and rural living environments, the MSS establishes very clear policy directions for managing the potential conflicts which arise out of those policy objectives which also call for the protection for and support of agricultural land, broadacre grazing and crop production areas. The basic tenets of these policy directions can be outlined as follows:

* The strengthening of the shire's economy will be facilitated by reinforcing the importance of agriculture to the region and allowing new industries and existing primary industries to diversify and expand in appropriate locations.

* The use and development of rural land is expected to be compatible with and complementary to agricultural activities.

* The subdivision of rural land will be allowed where it facilitates the ongoing rural use of the land.

* Population growth will be accommodated within existing towns serviced by reticulated infrastructure, and the extension of Residential 1 zones will not occur until the land supply levels within each township is reduced to ten years (currently at 15 years).

* Rural living and hobby farm developments will be directed into specific localities zoned for that purpose which include established and/or fragmented areas around Allan's and Osborn's Flat, Wooragee, Fighting Gully and Barnawartha.

22. The strategic directions contained in the MSS are complemented by a series of local policies, of which the following are relevant to my consideration of this matter;

* Clause 22.01-1 Rural living. This policy applies to the subdivision and development of land in the Rural Living zone and while not therefore applicable to this application, its provisions reinforce the strategic directions outlined above that rural living activities are to be confined to specifically identified locations which are zoned for that purpose.

* Clause 22.02-1 House lot excisions. The policy basis of this policy is that the "fragmentation of productive agricultural land by inappropriate subdivisions is to be avoided to ensure that productive capacity of the land is maintained and to prevent land use conflicts". The objectives of the policy are;

* To limit the subdivision of land that will be incompatible with the utilisation of land for agricultural use.

* To ensure that excisions of dwellings and creation of lots smaller than that specified in the Schedule to the Rural Zone are consistent with the purposes of the zones.

* To ensure that the subdivision of land that excises a dwelling is designed in a manner which does not prejudice surrounding agricultural activities.

* To provide a consistent strategic basis for considering permit applications for the excision of an existing rural dwelling"

Decision guidelines under the policy provide for a maximum lot size of 2 hectares, the discouragement of a concentration of lots which may lead to change in land use and character of the rural area, and the discouragement of excisions which restrict agricultural production on adjacent agricultural land. The decision guidelines also seek to ensure that where excisions are approved, lots created have satisfactory frontage to depth ratios, the dwellings excised are in habitable conditions, the site is capable of containing and treating on site effluent and wastewater, and access is available from an all weather public road.

* Clause 22.02-2 Land use, development and subdivision in rural areas. The policy basis of this policy seeks to "....achieve a balanced approach to the land use, development and subdivision of land in the Rural Zone." The policy recognises the increasing pressure on productive rural areas from competing land uses, some of which are not compatible with agricultural uses. The policy also acknowledges that the subdivision of rural land for uses including rural living, has been a major element of the development in the shire, and that this has facilitated a variety of lifestyle choices, and also more intensive use of agricultural land and/or better environmental management of land. The objectives of the policy are;

* "To retain land in larger parcels suitable to the relevant production requirements of the viticulture, horticulture and grazing industries.

* To ensure that development and changes to the use of land do not prejudice the continued operation of agricultural industries or the productive capacity of the land.

* To encourage opportunities for the expansion of viticultural, horticultural and grazing production, where compatible with adjoining land uses.

* To protect high quality agricultural land or land that produces recognised high quality produce.

* To provide for the subdivision of land into lots less than 40 hectares where appropriate.

* To ensure that subdivision providing for lots less than 40 hectares in area does not adversely impact on the maintenance and development of agricultural uses, infrastructure requirements or water management.

* To ensure that appropriate infrastructure is provided in rural areas.

* To ensure that development takes account of site opportunities and constraints".

The relevant decision guidelines under the policy referring to the subdivision of land place significant emphasis on the need for an applicant to demonstrate that a subdivision proposal enhances resource management and/or farming practices in the zone, that new lots are compatible with the purpose of the zone, surrounding agricultural land use, the rural character of the area and available infrastructure. Where lots of less than 40 hectares are proposed support will be dependant upon the council being satisfied that the lots facilitate the agricultural use of the land , is not used for the purpose of a dwelling and is consistent with policy.

Council Consideration and the Application for Review

23. The planning permit application was received by the council in April, 2001, and was refused by the council on 3 August, 2001 on the following grounds;

1. The proposed subdivision is not consistent with the purposes of the Rural Zone.

2. The subdivision is related to creation of small rural living lot which has no relationship to the adjoining rural use of land.

3. The house lot excision if approved would remove the major asset from the rural property.

4. The house lot excision is approved would result in a situation where a dwelling was permissible without a permit on the parent lot.

5. Having regard to the provisions of clause 65.2 of the Indigo Planning Scheme and in particular;

i) the existing use of the land and possible future development;

6. The proposal is inconsistent with the objectives of clause 22.02-1 "House lot excisions".

24. An application for review of the council decision was subsequently commenced on the following grounds;

1. The proposed subdivision is in accordance with the policies and objectives of the Indigo Planning Scheme relating to use and development of agricultural land.

2. The proposed use will, most likely, result in a better more efficient agricultural use of the land then would otherwise be the case.

3. The grounds of refusal are invalid because they do not have appropriate regard to:

* The area of the land and the size of the proposed allotments.

* The existing full time farming operations of the land owner on near by land and the intention to incorporate the larger proposed allotment into these existing farming operations.

* The existing house on the land proposed to be subdivided is surplus to the existing and proposed farming operations.

* The absence of an application to build an additional house or intention to do so.

25. At the review hearing, all parties tabled and read from written submissions and made oral presentations.

26. Various plans, photographs and other documents were tendered, either as attachments to written submissions and reports or as separate items. The material submitted in documentary form, together with the written submissions, have been retained on the Tribunal's file.

27. Following the completion of the hearing I inspected the land and locality unaccompanied by the parties.

28. Mr O'Dwyer provided me with a very detailed submission in which he explained the history of land subdivision in rural areas in this municipality and its pre amalgamation predecessor municipalities. Mr O'Dwyer advised that prior to the introduction of the VPP format scheme in January 1999, the approval of small lot subdivisions and house lot excisions was a regular occurrence and indeed applications were rarely refused. Mr O'Dwyer further submitted that the council has now "drawn a line in the sand" with respect to these applications and has relied heavily on the policy framework of the planning scheme in exercising its discretion to consider such applications. I was advised that since January 1999, the council has approved five applications for house lot excisions and refused three applications. It was Mr O'Dwyer's submission that the applications which have been approved were justified on the basis of the applicable policy framework and involved proposals relating to circumstances where two dwellings existed on a lot and/or there was a consolidation of titles leading to substantially fewer lots (for example one application involved a consolidation of 12 lots into 2).

29. It was Mr O'Dyer's submission that the proposal cannot be justified having regard to the applicable policy framework in that it provides for rural living type development in an area zoned for rural purposes, will reduce the total area available for productive agricultural use, and will create an expectation that the balance lot will also be built on and subsequently subdivided. Mr O'Dwyer further submitted that the granting of a permit would establish a precedent for future house lot excisions in the municipality to the detriment of the municipality's agricultural land resource and would undermine the policy framework of the planning scheme which seeks to support and protect that resource.

30. In support of his submission Mr O'Dwyer referred me to a number of decisions of the Victorian Civil and Administrative Tribunal and its predecessors.

31. Mr Bannon who appeared on behalf of the applicants for review, outlined in some detail the reason his clients are seeking a permit for the subdivision. Mr Bannon's submission makes it very clear that the primary reason for the subdivision relates to the fact that the applicants paid a price for the review site which they regard as inflated and that the sale of the house lot would reduce the price per hectare to that which they consider reasonable for agricultural land in the area. There is I think some benefit in quoting that part of Mr Bannon's submission under the heading "Reasons for Subdivision" because it provides an appropriate context to his client's motivations;

"Mr and Mrs Adams purchased the 84 hectares and house last year and took possession in April 2001.

Mr and Mrs Adams own a property known as Mill Park which is almost adjacent to the subject land. Mill Park is approximately 320 hectares and produces beef cattle. Mr and Mrs Adams live on their property and are full time farmers. The Adams family has owned and farmed Mill Park for over 100 years. Mr John Adams (the current owner) inherited the property in 1994.

Since that time Mr and Mrs Adams have been actively seeking to increase the size of their holding for reasons of farm efficiency. They have determined that the efficiency of their operations would be improved by the addition of up to 160 hectares, depending on soil types and proximity to Mill Park.

It is important to state that Mr and Mrs Adams are full time farmers. The farm is their means of livelihood and they do not have any substantial off farm income. This farm is well run, fences are in good order, pastures are excellent, and are regularly fertilised and improvements, shedding, yards, etc are all well maintained.

The necessary farm equipment including tractor and vehicles are part of the enterprise.

The property Mill Park is located between Yackandandah and Albury Wodonga (15 minutes from Wodonga). This has resulted in considerable demand for various size holdings from hobby farmers and Collins Street farmers (from Albury Wodonga). The results of this demand has resulted in the price of rural land increasing rapidly in recent years far beyond the true value of the land for traditional farming operations.

Not only has the price of land made it difficult economically to purchase land, it has also resulted in land usually being sold in smaller parcels for non traditional farm uses, often bought by persons with off farm occupations and incomes. The scenic nature of the countryside has also contributed to the demand from life style purchasers.

Since 1994 Mr and Mrs Adams have been losing bidders on two properties viz: -

* 120 hectares auctioned by the Albury Wodonga Land Corporation in the Kiewa Valley approximately 6 kilometres from Mill Park. This property was known as Bartons.

* 160 hectares in Whites Road, Baranduda approximately 10 kilometres from Mill Park.

One other suitable nearby property of interest to the Adams was sold prior to auction. The Adams have inspected several other properties in the area but have not pursued purchase because of the properties being offered in separate allotments and therefore at prices far too high for economic farm use.

When they discovered that the 84 hectare property known as "Valley View" was about to be put on the market Mr and Mrs Adams decided that there was unlikely to be a better opportunity in the future. Accordingly they purchased the property immediately (within 24 hours) and before it was advertised. They subsequently discovered they were just in front of another prospective purchaser.

There was no time or opportunity to purchase `subject to a permit' or to make detailed inquiries as to the likely outcome of a permit application to excise the existing house.

They made preliminary inquiries at the Council Offices and spoke to an officer in the planning department (Ms Kate Oswald). The verbal information was that a house excision was a possibility.

Mr and Mrs Adams and their young family (two daughters) live in a substantial house on Mill Park. They do not employ full time staff and accordingly have no use for the small house in their recent acquisition. The size of their desirable land holding is in part determined by the land being capable of being efficiently farmed without additional employees.

In these circumstances the Adams will either sell the house (if their application is successful) or lease it to tenants.

It is currently rented on a temporary basis to Mr and Mrs David Pernarowski who are renting the house on the basis that if the subdivision proceeds they will purchase it. If they cannot purchase it they will move and purchase elsewher.

The Adams do not wish to be landlords, they are farmers and wish to devote their time to this occupation. Accordingly they wish to sell the house.

In addition the price paid for the property, $453,000 including stamp duty, equates to $2157 per acre or $5335 per hectare. This is too high a price to allow for economic farming when the farming operation is beef cattle and the land is of the carrying capacity of the subject land. Sale of the house would realise approximately $150,000 which would reduce the effective purchase price to about $1500 per acre after expenses. Mr Adams estimates that somewhere in the order of $1300 per acre is a reasonable price for the land based on its beef producing capacity.

In summary Mr and Mrs Adams have no use for the house. They do not wish to spend the time being landlords with maintenance etc: -

* The house exists and will either be rented out or sold and in either situation its use will not contribute to the agricultural use of the land.

* The sale of the house will allow the effective purchase of the land at a price that is reasonably close to farming value."

32. It is I think to Mr Bannon's credit that he did not seek to disguise the primary reasons for this application, but the problem confronted by Mr Bannon and his clients is that these reasons do not constitute grounds which would persuade me that the proposal achieves acceptable outcomes having regard to the provisions of the planning scheme. It is these outcomes which the council in considering this application, and on review of the council decision, this Tribunal, must be satisfied about.

33. In addition to my comments above, there is I think a certain irony in the submissions put to me by the applicants in support of this proposal. As I have indicated above Mr Bannon went to some lengths to demonstrate the difficulties confronted by his clients in enlarging their land holdings as a consequence of the fragmented subdivision and land ownership patterns of agricultural land in this locality, a feature which exists as a direct consequence of the decision making of previous councils. I agree with Mr Bannon that inflated land values being achieved in this locality are partly due to its proximity to the expanding urban areas of Albury/Wodonga, but they are also partly attributable to the fact that productive agricultural land holdings have in the past been fragmented by small lot subdivisions and house lot excisions which have provided the opportunity for those seeking alternative residential lifestyles to acquire land holdings which are of a suitable size for that purpose, but not for viable agricultural use.

34. In my view, the proposal before me represents a typical example of those applications which have previously been approved and which have contributed to the present difficulties being encountered by the applicants in enlarging their present land holdings.

35. In response to these circumstances the council has, to its credit, sought to implement via its planning scheme, a policy framework which attempts to protect the remaining productive agricultural land by discouraging its further fragmentation, unless it can be demonstrated that the creation of smaller lots is for an agricultural purpose or it enhances resource management and/or farming practices in the zone. In seeking to address the policy framework and zone provisions of the planning scheme, Mr Bannon did submit that, in addition to the reasons for the subdivision detailed above, the application is consistent with the planning scheme, because of the following;

* The subdivision will allow a better and more efficient use of the land than would be the case if the land had not been purchased to be used in conjunction with the existing grazing property.

* The applicants are full time farmers and have no intention of seeking to build an additional house and further subdividing the review site. In these circumstances it was submitted that the current proposal should not be viewed in the same light as applications to fragment rural properties by persons who are not genuine farmers or persons who regularly subdivide part of their land.

* The planning scheme specifically provides for the excision of house lots.

* The subdivision will make no practical difference to the agricultural viability of the land because it is being applied to an existing dwelling.

* The proposal is capable of complying with each of the decision guidelines under clause 22.02-1.

36. I disagree with these submissions. While I acknowledge that the applicant's actions in acquiring the review site as part of an enlargement strategy for their existing land holding is an outcome which is entirely consistent with the outcomes sought to be achieved by the planning scheme, a planning permit is not required to achieve this outcome and this is not what the current subdivision application is intended to achieve. The outcome which will result from the granting of a permit for the subdivision is that the subdivision and land ownership pattern of rural land in this locality will be further fragmented in direct conflict with the outcomes sought to be achieved by the applicable policy framework and zone provisions.

37. With respect to the submission that the proposal demonstrates compliance with the local policy at clause 22.02-1, I acknowledge that the configuration of the subdivision does meet certain relevant tests under that clause, however this does not outweigh my principal findings with respect to the application's failure to achieve acceptable outcomes having regard to the policy framework in its totality. Had I formed a different view on that matter, the configuration of the proposed lot, access arrangements and its ability to contain and treat on site waste water and effluent, are matters, among others, which would also have to be addressed and considered. As I have indicated, I do not regard compliance with these detailed provisions as being sufficient to justify the grant of a permit in the face of the overwhelming policy provisions which are mounted against the grant of a permit.

38. It also necessary for me to comment on the submissions made that the identity of the applicants and the fact that they are committed, full time farmers, is a factor which ought to influence me to be satisfied that the proposal will therefore be consistent with the planning scheme. While I do not dispute the applicant's intentions in relation this application and I acknowledge that they have a demonstrated, long term commitment to this community and to the farming of this land, the applicant's personal circumstances are not relevant to my deliberations. This point has been the subject of a large number of decisions of this Tribunal and its predecessor Tribunals over many years, and it has been consistently held that an applicant's personal reasons for pursuing a proposal are not matters which can be given significant weight and cannot outweigh the need for proper and orderly planning of an area. I have not been presented with any submissions which would persuade to depart from that position.

39. Having regard to my findings in this matter it is not necessary for me to address the submission of VicRoads which sought the imposition of conditions on a permit in the event that a permit was directed to be issued. The conditions were contested by both the applicant and the council.

40. It follows from the above that the decision of the responsible authority is affirmed and no permit shall issue.