Environmental Significance Overlay and Schedule 1 - Proclaimed Catchment Protection (Clause 42.01).

Vegetation Protection Overlay (Clause 44.01) over part of the land that is not subject to any works or building in this application.

Use and development of the land for a dwelling on a lot less than 20 hectares in a Farming Zone (Clauses 35.07-1 and 35.07-4 and schedule to the zone).

Construct a building (dwelling) and carry out works under an Environmental Significance Overlay (Clause 42.01-2 and schedule 1).

Construct a building and works associated with accommodation under a Bushfire Management Overlay (Clause 44.06-1).

Crown Allotment 38, 111 Cranneys Lane has a width of 211m, depth of 402m, yielding an area of just under 8.5 hectares.

Native trees and vegetation mark the boundary to Cranneys Lane and there are scattered trees along the eastern boundary. A square line of pines and a small number of chestnut trees are centrally located on the lot. Remaining areas of the lot are open pasture.

A dam of 0.5Ml capacity is located near the north-east corner of the lot while a smaller dam is located in the south-east corner.

A central, low ridge divides the lot, with a fall to the south and Trent Creek that lies to the south of Cranneys Lane. Land to the north falls toward a shallow swale that lies on adjoining properties.

Kapiris v Macedon Ranges SC (includes Summary) (Red Dot) [2012] VCAT 1969.

1. Mr Andrews wishes to live and work on a small farm. To that end, he purchased an eight-hectare lot just outside Trentham in 2003. He now wishes to live on this property, raise cattle, grow vegetables, harvest chestnuts and generally lead a farming lifestyle.
2. Because of the property's size in this Farming Zone and because of its location in an open potable water supply catchment, Mr Andrews requires planning permission to use a dwelling on this lot as well as permission for its construction.
3. Hepburn Shire Council has refused to grant planning permission, largely on the basis that the relevant water authority, Coliban Water, objects to the grant of a permit for the land to be used as a dwelling.[1] The Council also considers that the use of the land for a dwelling would be contrary to the purposes of the Farming Zone, although this was not a ground originally given in its notice of refusal.
4. Mr Andrews seeks a review of the decision to refuse to grant a permit.
5. Coliban Water objects because it believes that the dwelling and its reliance on on-site wastewater disposal system presents an incremental yet unacceptable increase in risk to potable water supplies drawn from the catchment. While recognising that there are only a small number of dwellings on rural land in the vicinity of Mr Andrews' property, the authority is concerned that this development will lead to more applications with a consequential increase in risks to water quality. The authority is therefore concerned about the precedence that will be set by a decision to allow another dwelling in this locality. Its view is that a line must be drawn in the sand at this point not withstanding Mr Andrews' recognised personnel investment in his application.
6. It falls upon the Tribunal to decide whether the application to use and develop the land for a dwelling is acceptable having regard to the relevant matters under the Hepburn Planning Scheme and the Planning and Environment Act 1987. While the site is subject to a number of planning controls relevant to both the use and the development, including vegetation protection and bushfire management overlays, the determinative issues in this application are about the use of the land for a dwelling in a Farming Zone and in an open potable water supply catchment.

1. Four of the six purposes of the Farming Zone are directed towards the protection and ongoing use of the land for farming (agriculture). Another purpose is to protect and enhance natural resources while another is to implement state and local planning policy.
2. To use and construct a dwelling on land within a Farming Zone is only as of right, i.e. a section 1 use where no permit is required, if the land unit meets or exceeds the minimum specified area. The schedule to the zone specifies that in this part of the shire, the minimum lot size is 20 hectares. This is smaller than the standard 40ha applied in the Victorian Planning Provisions, a difference that I consider later. As the subject lot is less than the minimum 20ha, a permit is required and the need to consider whether a dwelling is acceptable having regard to the zone's purposes arises.
3. An application for a permit for a dwelling in a Farming Zone is required to provide a written statement explaining how such a proposal responds to the decision guidelines for dwellings.[2] The guidelines raise the following questions:
   • Whether the dwelling will result in the loss or fragmentation of productive agricultural land?
   • Whether the dwelling is reasonably required for the operation of the agricultural activity conducted on the land?
   • Whether the dwelling will be adversely affected by agricultural activities on adjacent and nearby land due to dust, noise, odour, use of chemicals and farm machinery, traffic and hours of operation?
   • Whether the dwelling will adversely affect the operation and expansion of adjoining and nearby agricultural uses?
   • The potential for the proposal to lead to a concentration or proliferation of dwellings in the area and the impact of this on the use of the land for agriculture?
4. Cumulatively, these guidelines require an examination of what agricultural activities may be undertaken on this and the adjoining land as well and an examination of whether or not using the land for a dwelling will support or hinder such activity. In particular there needs to be a demonstration that there is a 'reasonable need' for the dwelling to support the agricultural activity on the subject land.
5. There are other matters raised in the decision guidelines that are also relevant to this application. These include requiring the decision maker to consider the impact the dwelling using might have on the environment as well as design and site location issues, including impacts on the landscape character of the area.

1. Relevant to this matter is the site context in terms of local land use and the wider policy setting about agricultural land use.
2. The subject land is a crown allotment, its size of 8.4 ha[3] arises from the historical partitioning and subsequent agricultural use of the land. It is one of a cluster of eight such lots in the immediate locality with similarly sized lots located on the west, north and eastern boundaries. Similar sized lots are also located further east. Beyond this, the rural lot sizes generally increase but not to what one would typically term broad acre size of 100ha or more.
3. Ms Johnstone submitted and the MSS confirms that the small lot sizes are largely an historical artefact, arising in part from a need for farm produce to support the influx of gold miners in the 1850's.[4] The small size of the crown allotments is now to be managed in the context of current rural land issues and the direction of agricultural and rural land management policies. The application of a 20ha minimum lot size in this area, rather than the default 40ha under most policy and rural land planning controls, appears to be an attempt to strike a balance between this historical character of this area and this policy context.
4. The MSS[5] highlights key values of the shire to include the potable water supply catchments, agriculture supported by good quality soils as well as its proximity to a number of regional centres and outer Melbourne. Because of this location, the MSS highlights that there is pressure for recreation and lifestyle living on rural land. The MSS goes on to recognise that such pressure runs the risk of fragmenting agricultural land (including existing small lots) and introducing incompatible land uses.
5. In reference to rural land use matters, the recently revised MSS identifies[6] that in keeping with the state wide trend for farming, only a small proportion of agricultural enterprises in the Shire could be:

...considered 'large' operations based on farm income, that is, their income level enabled the capacity for reinvestment and family support without the addition of any off-farm income.

1. These (traditional) enterprises are identified as grazing, horticulture (potato/vegetable growing and viticulture), cropping and intensive animal husbandry. Such enterprises are identified to be in decline. Lifestyle farming and consequential property prices are identified as constraining these traditional farming enterprises from expanding and / or reinvesting.
2. Through the MSS, the Council recognises that there are opportunities to support diversification of agricultural activity in order to address the decline in traditional agricultural activity.[7] It is acknowledged that such diversification will be through smaller scale agricultural enterprises supported by off-farm income which will none the less contribute economically to the region and achieve positive land management and land rehabilitation outcomes.
3. On this basis, diversification of agricultural land use and hence small agricultural enterprises can be supported by planning decision making. However in supporting such an outcome another key planning strategy is to not support dwellings on small lots unless they are associated with existing agricultural uses.[8] There is therefore a clear position in policy to ensure bone fide agricultural activity is being undertaken on the land when a dwelling is also being proposed.
4. This recognition in the MSS of the value of agricultural land and the need to protect such values accords with the State Planning Policy Framework for agriculture and agricultural land.
5. Local policy also directs attention to protecting high and very high quality agricultural land. The subject site is not located in such areas.[9] Policy, while promoting that dwellings should only be considered where 'associated with and required to support a productive agricultural enterprise' provides discretion in decision making when dealing with dwellings on smaller lots of lower quality agricultural land. Nevertheless, such an exercise of discretion needs to take account of the impact on the productivity of the land.[10]
6. One can see from the above policy analysis that the overall theme of the local planning policy framework in Hepburn accords with that of the State policy. That theme is to protect and promote agricultural use of rural land and protect it from inappropriate uses that include lifestyle dwellings.

1. A key issue for the Shire is to contain lifestyle living from extending outside the town boundary to maintain this context. Specifically, rural land policy[11] seeks to protect rural landscape character from inappropriate levels of development and ensure built form does not adversely affect landscape values and characteristics of the surrounding area. Thus a wider view of the site's landscape setting is useful in weighing up the site context and the impact of permitting a dwelling.
2. As identified by the Council and Mr Tsourounakis, the subject land lies only some 600m from the urban edge of Trentham. The applicable structure plan identifies the land to the east of Trentham as providing a rural landscape and rural living.[12]
3. Aerial photographs and cadastral maps indicate that, not withstanding the historical small lot subdivision pattern to the east of Trentham, there has been limited degree of development of land with dwellings.
4. The cluster of eight small lots in which Mr Andrews' property is located has a scattering of sheds and other buildings, but only four have been identified as containing dwellings.[13] Beyond this many of the properties to the north, south and east comprise of multi-lot land holdings. The result is an open rural agricultural landscape that accords with the description set out in the structure plan.
5. This open rural character is a strong contrast to the clearly residential landscape that marks the eastern boundary of Trentham. The latter includes the low density residential zone along this side of Trentham. A clear direction of local policy is to maintain this distinct break between the two landscape characters.

1. While Mr Andrews' property is one of eight small lots under separate ownership, the pattern of landholdings to the east of Trentham is generally that of larger, multi-lot land holdings. The cadastral plan tabled by Mr Tsourounakis indicates property landholdings ranging from 16ha[14] up to 129ha.[15] The majority of property sizes range from 30ha to 50ha.
2. This is an important point to highlight. As I referred to earlier, the small lot sizes around this locality arise from historical decision making. In looking at the ownership patterns that exist today, these small lot sizes have not prevented land from being incorporated into larger holdings to support agricultural activity. Current planning policy seeks to support this activity. Thus while the land is fragmented into small lots, the ownership patterns indicate it remains possible for agriculture to continue if the lots are available to incorporate into larger holdings.
3. To allow the development of dwellings on currently vacant smaller lots would make it more difficult to incorporate such land into larger land holdings. This would constrain agricultural activity in the area resulting in an outcome that local and state planning policy seeks to avoid.
4. The fact then that the site is a small lot does not mean that its use is limited and is suitable for what has been described as a lifestyle form of agricultural use. Indeed, its vacant status makes it a candidate to be a part of a larger enterprise. A dwelling on this land would serve to fragment its potential incorporation into a larger holding.
5. While referring to the pattern of land use, I acknowledge that within the wider setting there are smaller lots, some being 2ha or less. Some have been developed with dwellings, although not all. These smaller lots represent the exception rather than the rule. Their development is the outcome of past decision making under different regimes. The current policy and provisions seek to now avoid such outcomes, specifically rural lifestyle living in a working agricultural environment. Their presence is limited, but serves to reinforce the need to not repeat such decision making with the consequential fragmenting of agricultural land.
6. In terms of agricultural activity, the Council describes the area as typically supporting grazing and fodder (hay) making enterprises. The smaller lots are an area that policy indicates may well support new, more intensive horticultural activity. It is evident that the subject land, while not falling within an area of high or very high quality categories of agricultural land remains capable of supporting a range of agricultural uses. Such uses could be achieved by incorporation into a larger enterprise or supporting a small intensive enterprise.

1. Mr Andrew's proposal is for a four bedroom dwelling of some 296sqm in living area, with 42sqm under roof line car port. All up it is not a large dwelling at under 30squares, however neither is it a modest one.
2. The dwellings size and presence will signal a substantive change in land use within the context of a modestly sized 8ha lot. This scale, the dwelling's setting between other dwellings on adjoining land and the relatively low intensity of agricultural activity on the land cumulatively (which I discuss later) contribute to an outcome where the use of the land for a dwelling would be a dominant use of the land. The grouping of dwellings would also see a clustering of such uses emerge in this area.
3. The analysis of the zone and the policy completed earlier indicates that the use of the land for a dwelling should be subservient and complimentary to agricultural use of the land. The outcome of locating a dwelling on this lot are not supported by state and local policy.
4. Further, under the decision guidelines for the zone, clustering of dwellings is to be avoided. This proposal would incrementally add to the clustering of dwellings in this area.
5. The dwelling is said to be needed to support Mr Andrews' intention to farm the property. He proposes to graze up to 12 head of cattle on a small paddock rotation basis as well as raise a small number of chickens (8-10), grow vegetable and harvest chestnuts from 3-4 trees already established on the site. He has hopes of selling produce at farmer's markets and possibly one day establishing his own produce store. It is however the grazing that is the main focus of the enterprise. However references to rotational and intensive grazing of cattle are not supported by a layout of paddocks, pasture management and stocking levels that can be supported on the land. The other activities, as described to me are akin to a modest level of cottage scale activity.
6. The commercial nature of the activities appears to be an aspiration rather than a clear and substantive agri-business plan. Indeed no systematic farm or agri-business plans have been placed before me to support the application. Indeed, Mr Andrews evidence about how many cattle he may graze on the property and how he will attend to the stock is vague and there is little detail by way of a farm business plan.
7. While Mr Andrews' intentions put forward agricultural activities the scale of these activities are modest. I am not persuaded that they are of a scale that supports a 'reasonable need' for a dwelling on the land. The management activities said to require such a presence, such as tending to stock, bush fire responses, mending of fences, weeding, etc are not unusual for any farming enterprise or raise any particular need for a full time presence. Many grazing and other cottage scale activities can be undertaken on an absentee basis. While he brings to the table a statement from a neighbours who graze cattle, about the need to be on site for constant oversight of stock and other farm related activities, this is not the evidence of experts.
8. Further the frequent references to this proposal being comparable and complimentary to adjoining 'hobby farms' strongly suggests that this is what Mr Andrews' proposal represents. Indeed, some application material even states as much, setting out that the dwelling is in association with hobby farming activities. I agree that the scale of operation and the presence of a dwelling, when looked at objectively have all the appearances of a lifestyle or hobby farm.
9. Given the scale and nature of proposed agricultural activities operation, I am not persuaded that a fulltime presence is required on the property. Mr Tsourounakis refers to the convenience of being on-site, however it is clear that the property is close to Trentham. Mr Andrews described its location as a comfortable walk from the town centre. Given such a location, I am not persuaded that living off site, in Trentham, would not be an unworkable or present a substantial inconvenience.
10. In summary, I find that the proposed dwelling would incrementally contribute to fragmentation of productive agricultural land and contribute to the incremental transformation of the rural agricultural character and use of land in the area to one of lifestyle rural living.
11. Mr Andrew's proposal lacks sufficient rational and material to support the case that there is a reasonable need for a dwelling to support the agricultural activity being or proposed to be conducted on the land.
12. For these reasons, I conclude that to allow a dwelling under these circumstances would be contrary to the purposes of the Farming Zone and to relevant state and local planning policy. A permit should therefore not be granted.

1. Schedule 1 of the Environmental Significance Overlay (the ESO) that applies to this site and indeed all of the Shire of Hepburn highlights that:

Hepburn Shire is situated in the Central Highlands at the source of a number of catchments linked to Port Phillip Bay or the Murray River. Protection of the quality of this water has significant local and regional implications, especially where these catchments provide domestic water supply.

1. Two of the five purposes of this overlay schedule seek planning outcomes that:
   • Protect the quality of domestic water supplies within the shire and more widely; and
   • Prevent pollution and increased nutrient levels of surface water bodies, natural water courses and storages.
2. These objectives are to be achieved through the permitting or restricting of buildings and works. In Mr Andrew's application a permit is required because his dwelling cannot be connected to reticulated sewerage system and all effluent disposal must be 'managed and discharged' to the satisfaction of the responsible authority.[16] Thus the impact of the dwelling's development on water quality requires consideration.
3. The subject land is located in the Eppalock Special Water Supply Catchment, i.e. an open water supply catchment. The site is bisected by a low ridge, with southerly surface drainage directed toward Trent Creek, which is some 60m at its closest point to the southern boundary of the site. At the nominated location for the dwelling and wastewater disposal field, the shortest possible drainage distance to Trent Creek is approximately 200m. Northerly surface drainage is toward an unnamed ephemeral drainage line that lies 30m in a straight line from the northern boundary. However the proposed dwelling and effluent field locations are not within the sub-catchment of this drainage line. It is the proximity of the proposed dwelling and the associated wastewater disposal field to Trent Creek and its location in the catchment more widely that is the subject of Coliban Water's objection to the dwelling.
4. Mr Ford's evidence also goes to possible impacts to groundwater and consequent impacts to springs and surface water quality. He relies on outcomes from a groundwater impact study conducted at Benalla, Victoria to contend that septic tanks present a risk of contamination to shallow groundwater. In short I find that the reliance on this example to be of little assistance in assessing such risks under the conditions of this site. It follows in any event that it has not been necessary to consider the groundwater issues raised by Mr Ford in arriving at my decision.
5. Coliban Water contends that the proposed dwelling and its reliance on on-site wastewater disposal is contrary to the objectives of the ESO and proper management of water resources because it represents a small but unacceptable increase in risk to water quality. This risk is said by Coliban Water to arise from the incremental increase in dwelling density within the rural catchment area, which would be contrary to the Guidelines for Planning Permit Applications in Open Potable Water Supply catchment Areas (the Guidelines).[17]

1. The Minister for Water released the current version of the Guidelines in November 2012. The purpose of the guidelines are to:

...assist water corporations and other referral and responsible authorities in their assessment of planning permit applications for use and development of land within all open, potable water supply catchments in Victoria. These Guidelines have been adopted for the purposes of s.60(1A)(g) of the Planning and Environment Act 1987.

1. The 2012 guidelines replaced those of May 2009. The intent and purposes of the guidelines has not varied, however the manner in which Guideline 1 is to be applied to applications has been revised under the 2012 versions. These are matters which I will address shortly.
2. A considerable body of decision-making and judgement has been passed on the application of the Guidelines, and more particularly the density target of one dwelling per 40ha under Guideline 1 in open potable water supply catchments.[18] Such cases have dealt with the 2009 version of the Guidelines. The recent case of Kapiris[19] considered and applied the 2012 Guidelines.
3. It would be fair to say that this body of decision making has identified the primacy of water quality protection when the purposes of applicable planning provisions and policy are directed toward such an outcome. In such situations, considerable weight (importance) has been given to complying with the Guidelines and the dwelling density of one dwelling per 40 hectares under Guideline 1.
4. It would also be right to say that the application of Guideline 1 is seen by some to be particularly problematic. Mr Tsourounakis submits that the application of Guideline 1 would see very little development of land in this part of Hepburn, not withstanding 'as of right' development of dwellings being allowed on lots of 20 ha under the Farming Zone.
5. I do not agree that Guideline 1 of itself is problematic. The purpose of this guideline is not to prevent development. Rather the one in 40ha density requirement of Guideline 1 is a default means of managing water quality risks from wastewater disposal within the catchment in the absence of other risk mitigating measures deemed to be acceptable under this guideline. The revised Guideline 1 addresses the very issue raised by Mr Tsourounakis about lot sizes and the conflict between what is permissible under a zone and the one if 40ha density target. It does this through a consideration of various matters, including a range of water quality risk factors. I consider the application of these risk factors and other relevant considerations later in the reasons. However for now I am not persuaded by Mr Tsourounakis' submission that the Guidelines are problematic or will prevent appropriate development of land in open potable water supply catchments.

1. At this point it is worth highlighting that in this particular application the location of the land in a Farming Zone is a distinguishing factor from the circumstances of the Rozen, Kapiris and other similar matters[20] that have turned on the issue of water quality protection. In those cases, the subject sites typically fell within Rural Conservation Zones with the primary purpose being for water quality protection.
2. However I do not find that this distinction means the Guidelines are to be treated differently in this application. As set out earlier, while the primary purpose of the Farming Zone is to encourage and retain agricultural production, a further purpose is to 'protect and enhance natural resources'. Clearly, water supply from agricultural catchments is one such resource, and its protection is a valid purpose of the zone. Thus the agricultural purposes of this zone do not diminish the importance of protecting water quality.
3. This is the more so when the application of the ESO over the land is taken into consideration. This ESO is a response to the policy recognition at both a state and local level about the importance of protecting water quality, the more so in potable water supply catchments.[21] The fact that Hepburn lies at the headwaters of a number of potable water supply catchments adds to the importance of ensuring planning assists in achieving appropriate levels of water quality protection. This has been expressed through the application of the ESO over all of Hepburn.
4. Thus the Guidelines are to be given weight notwithstanding that the density target of one dwelling per 40ha presents a potential conflict, as suggested by Mr Tsourounakis, with greater densities that could otherwise be acceptable under the zone.

1. Related to this issue of zone development density conflict, Mr Ford sought through his evidence to draw a distinction between urban and rural development in the application of Guideline 1. Mr Ford's evidence, as relied on by Coliban Water, is that greater weight should be given to achieving the one in 40ha density in rural areas to compensate for water quality risks from urban or town areas where such a density cannot be achieved.
2. For the following reasons I do not accept such evidence.
3. As set out in Kapiris, the 2012 Guidelines has retained the general nature of the 2009 Guidelines:

The Catchment Guidelines include five guidelines that must be addressed where a planning permit is required to use land for a dwelling or to subdivide the land in a water supply catchment. Guideline 1 refers to density of dwellings; Guideline 2 to effluent disposal and septic tank system maintenance; Guideline 3 to vegetated corridors and buffer zones along waterways; Guideline 4 to buildings and works; and Guideline 5 to agricultural activities. Guidelines 1, 2, 3 and 4 are relevant to an application for a dwelling and associated outbuildings, effluent disposal arrangements and other buildings and works.[22]

Where a planning permit is required to use land for a dwelling or to subdivide land or where a planning permit to develop land is required pursuant to a schedule to the Environmental Significance Overlay that has catchment or water quality protection as an objective:

• the density of dwellings should be no greater than one dwelling per 40 hectares (1:40 ha); and

• each lot created in the subdivision should be at least 40 hectares in area.

1. Three categories are set out under this guideline where the preferred dwelling density does not apply. None of these exempt an application from the density guideline if development is located in a residential, township or other such urban zone. A further category 'Category 4' sets out the conditions where, in the event that none of the other three categories apply, a water corporation may consider a higher density of development than the one in 40ha guideline target. This category does allow for consideration of minimum lot sizes under the applicable zone of the subject land, however this is conditional on other requirements being met.
2. The 2012 Guidelines thus clearly sets out the circumstances in which Guideline 1 does not apply, applies unmodified or applies but where a higher density might be considered. None of what was given in evidence about balancing urban densities with rural densities is relevant to or set out in the application of Guideline 1.
3. Mr Ford in supporting his statement refers to a guideline developed by the Water Industry Association to assist in determining dwelling density.[23] This guideline sets out a number of methods to calculate the dwelling density. This includes the method adopted by Mr Ford of calculating the density based on the number of dwellings within a one kilometre radius of the subject land. This guidance note is based on counting unsewered dwellings.[24] If I were to give this guidance any weight, I observe that the emphasis, in accord with Guideline 1 is on unsewered dwellings regardless of their urban or rural setting.
4. Further Mr Ford's evidence goes on to state that the small size of urban areas will have less impact than wider rural areas, contingent on certain conditions. Curiously, Mr Ford includes in his conditions that unsewered lots in urban areas can be excluded if they are large enough to contain wastewater onsite. It is difficult to envisage a lot in an urban setting that would be as large as say the 8ha of Mr Andrew's property, which Mr Ford and Coliban Water contend presents a small but unacceptable incremental increase in risk because of the risk of not containing wastewater onsite. The logic applied to urban lots seems somewhat contradictory to the position adopted for rural lots.
5. As a recognised purpose of the Guidelines is to deal with cumulative risks from all unsewered dwelling developments, I cannot accept that one can or should balance risks from urban areas through management of risks in rural areas. Each potential source of risk needs to be managed appropriately. It would be unfair and unreasonable to expect rural areas to carry the load and somehow 'dilute' the risk from other sources. Indeed the underlying basis for the specified dwelling density is to ensure there is no unacceptable increase in cumulative risk across the catchment from all unsewered dwellings. As is stated in the Guidelines:

The proper application of the precautionary principle requires consideration of the cumulative risk of the adverse impact of onsite waste water/ septic tank systems on water quality, in open potable water supply catchments, resulting from increased dwelling density.[25]

1. The key factor in applying Guideline 1 is whether the dwellings the subject of the density test are sewered or unsewered not whether they are in an urban or rural area.

Guideline 1 and the EPA Code of Practice for On-site Wastewater Treatment

1. As I have noted above Mr Ford adopts the '1km radius' method in calculating the dwelling density around the subject land.
2. Previous Tribunals have recognised the difficulty of estimating dwelling density and have tacitly accepted 1km radius approach as a useful rule of thumb to asses cumulative risk from the impact of on-site wastewater treatment and other sources of water quality impact. The focus however has primarily been on wastewater treatment systems, and in particular the risk arising from failure of such systems.
3. This approach is to be compared to that adopted under the EPA Code of Practice for Onsite Wastewater Treatment. The latter requires buffers and offsets from waterways or other water bodies to address water quality risks, including that of system failures.[26]
4. A part of a well designed system in accord with the Code of Practice is to ensure a buffer from waterways or other sensitive features in the event of a system failure. Assuming neutral conditions, 100m is the accepted buffer designed to account for a failure of a system such that no adverse or significant impact to water quality should occur. Higher risk conditions can be addressed by increasing the buffer distance.
5. In this instance the buffer distance between the wastewater treatment system and the nearest waterway is 200m, and an even greater distance applies to the disposal field. Arguably such a distance goes someway to mitigating the contribution of this site to the cumulative level of risk to water quality from surface water discharges.
6. The question remains however whether this minimises the risk to an acceptable level as sought under the Guidelines.
7. Mr Glossop submits that such technical considerations and site specific matters should not override policy or the Guidelines. I am somewhat reluctant to accept such a submission. It is an understanding of risks that should underpin the application of policy guidance in this case and not an unquestioning application of policy for policy's sake.
8. Ultimately, any policy intention is to achieve an outcome or purpose and should be understood and applied in that context. If that outcome or purpose can be achieved by means not anticipated by one policy, but possibly by means set out under another, then that outcome should not be rejected outright. To apply a policy or guideline without considering the context in which it is framed and the context in which it is then applied would be contrary to accepted administrative practices in the application of guidelines and discretion in decision making.
9. Indeed, as I address later in these reasons, the revised 2012 Guideline 1 adopts such an approach in assessing when the one in 40ha density might be waived, setting out a range of factors for consideration.

1. While I have raised a number of concerns about the approach of Coliban Water to this application, it cannot be argued that the Guidelines are not relevant. Each of the relevant guidelines is to be met. It is acknowledged by Mr Ford that with some modification to the proposed wastewater system, the EPA Code of Practice requirements can be met. Thus Guideline 2, which requires compliance with the code, is satisfied. It is not disputed by the parties that the requirements of Guidelines 3, 4 and 5 can also be satisfied. The most pertinent in this application is thus Guideline 1 and the ability to either meet the one in 40ha density target or otherwise qualify for an increase in density without an increase in water quality risk.
2. The parties more or less agree that the density of unsewered dwellings, excluding a small number in the nearby LDRZ, is around one dwelling per 24ha. Mr Andrew's dwelling would increase this to one in 22ha. This density, even without taking into consideration the LDRZ dwellings is well above the guideline requirement of one in 40ha.
3. Guideline 1 provides three categories where the preferred dwelling density does not apply. None of these are relevant to this application so I will not address them further.
4. A further category 'Category 4' sets out the conditions where, in the event that none of the other three categories apply, a water corporation may consider a higher density of development than the one in 40ha.
5. Coliban Water submits that none of these conditions are met. In these circumstances, the one in 40 hectare density is said to be the appropriate benchmark and because the proposal cannot meet this benchmark a permit should be refused.
6. The relevant conditions under Category 4 require that:
   • The minimum subdivision lot size in the zone be met;
   • The water corporation is satisfied a Domestic Wastewater Management Plan (DWMP) has been prepared, adopted and is being implemented in accordance with requirements set out in the Guidelines; and
   • The proposal does not present an unacceptable risk to the catchment when assessed against eight specified matters that are additional to any land capability assessment undertaken pursuant to the EPA Code of Practice.
7. I have used these conditions to assess this application, as set out below.

Does the application acceptably address water quality risks

1. The minimum lot size specified for this region of the farming zone is 20ha. Being on a lot of 8ha, this application does not meet the requirement to be a development consistent with the minimum subdivision lot size.

1. I am advised that no DWMP has been implemented to the satisfaction of Coliban Water, although one is in preparation. This plan would address compliance and failure management of wastewater systems in the shire. In the absence of such a plan, this proposal has the potential to add to the cumulative risk of other unmanaged systems.

1. Eight risk factors for consideration are specified under the third condition of Category 4 of Guideline 1. These factors are to be considered in assessing the possible risk to water quality and ability to reduce the risk to an acceptable level not withstanding a higher density of one dwelling per 40ha. The factors encompass matters about :
   • the proximity and connection between the proposal site and a waterway or potable water supply source;
   • the existing condition of the catchment and evidence of unacceptable water quality impacts;
   • site factors such as soil quality and slope (and hence drainage);
   • the nexus between the dwelling and agricultural use of the land;
   • lot and dwelling patterns around the site and the related intensity or size of the development or use of the subject land;
   • remediation or improvement works on the land that are proposed or might be required; and
   • the generation of runoff that might occur under the proposed development and use of the land.
2. Having considered these factors against the proposed development and site conditions, I make the following findings:
   • The location of the wastewater treatment system would be setback from the waterway a distance well above that recognised under the EPA Code of Practice as being unacceptable for potable waterways. Some 140m of the 200m buffer lies within the site. This is a factor that weighs in favour of reducing the risk to water quality.
   • Another supportive factor is that the land capability assessment generally indicates good soil conditions and moderate slope and an acceptable depth to groundwater,[27]facts not disputed by Mr Ford. The only limiting factor is the high rainfall of the area which may present a risk of failure if the system is not properly engineered and managed.[28] The site conditions therefore point to a lowering of cumulative risk
   • I ascertain from the evidence of Mr Ford that existing conditions within the catchment present water quality risks because of poor urban stormwater from townships and the high densities of dwellings in some towns that are not sewered. The risk is highlighted by broader assessment of dwelling density around the site and his evidence about town stormwater risks.
   • For the reasons set out earlier, I have concluded that there is a poor link between the proposed dwelling and the agricultural use of the land. Further, I find that there is and should remain a generally dispersed intensity of dwellings in this area consistent with its rural agricultural character and its farming zone purposes.
   • The pattern of surrounding land subdivision is more intensive than the minimum 20ha size specified under the Farming Zone. It is approximately three times more intensive. Dwellings are present on three of the immediately adjoining 8ha lots, yielding a density of three dwelling over 48ha or one dwelling per 16ha in the immediate vicinity of the site. Adding another dwelling to this would yield a density of one dwelling per 12 ha, or almost twice that of the minimum lot size. This outcome points to an increase in the cumulative risk to water quality rather than a lowering of such risk.
   • In terms of runoff generation, the dwelling would be a relatively low intensity generator of additional runoff that can be managed through use of rainwater tanks and dispersal of excess flows. Coliban Water has not identified specific risks to the waterway from general rainwater runoff.
3. On balance then, while some factors acceptably address water quality risks, this proposal fails to satisfactorily address all of the factors that could be seen to mitigate the level of risk to water quality set out under the third condition of Category 4.
4. This proposal thus cannot meet all of the conditional qualifications necessary to satisfy a reduction in dwelling density under Category 4 of Guideline 1. I would add that this is not a mere exercise of ticking boxes. The areas where this proposal fails to address these requirements are important factors in addressing unacceptable risks to water quality across the catchment and more particularly within the locality of this site. This includes the lack of a DWMP and the present degree of risk from other surrounding land uses. This proposal incrementally adds to that risk. Consequently on balancing these considerations under Guideline 1, I find there is insufficient reasons to support an increase in the density of dwellings above the one in 40ha target established under Guideline 1. Given the primacy of protecting water quality under planning policy and as expressed through the application of the ESO-1 such a finding weighs against permitting the dwelling.

1. It follows from the above reasons that Mr Andrews' application for review should fail. Principally this is because of the impact the dwelling would have on the character of the land and the failure to persuade me that there is a genuine and reasonable need for a dwelling on this land in order to conduct the agricultural activities he proposes. I find that allowing a dwelling to be used on this land would add to the incremental transformation of this agricultural area of Trentham into a rural lifestyle area. Such an outcome is contrary to the purposes of the zone and applicable planning policy.
2. I also find that the dwelling and its associated on-site wastewater system presents an incremental risk to water quality in the Eppalock open potable water supply catchment that is unacceptable under present conditions. To therefore permit the dwelling under this situation would be contrary to the very strong planning imperatives to protect such water quality.
3. I have prepared my order accordingly in directing that no permit be granted.

[1] Coliban Water is a referral authority under the provisions of the planning scheme and Planning and Environment Act 1987. Its objection to the grant of a permit carries statutory weight and the Council is bound to refuse a permit if it objects.

[7] These are identified as including viticulture, herb growing, specialised animal raising and seed production.

[9] Refer to Framework Plan: Economic Development under Clause 21.03.

[14] Lot 1 of TP318512, located immediately to the south.

[15] Formed by a large landholding under the address of 200 Pearsons Road.

[16] Part 3 of Schedule 1 to Clause 42.01.

[17] Department of Sustainability and Environment Melbourne, November 2012.

[18] Rozen v Macedon Ranges SC (includes Summary) (Red Dot) [2009] VCAT 2746; Western Water v Rozen & Anor [2008] VSC 382; Rozen v Macedon Ranges Shire Council & Anor [2010] VSC 583; Simpson v Ballarat CC (includes Summary) (Red Dot) [2012] VCAT 133

[19] Kapiris v Macedon Ranges SC (includes Summary) (Red Dot) [2012] VCAT 1969.

[23] Guidance Note for Determining Dwelling Density When Assessing Planning Permit Applications. Developed by the VicWater Open Potable Water Supply Catchment Management Working Group. December 2012.

[24] Curiously it recommends including other point sources of wastewater discharge, which Guideline 1 does not seek to consider or address.

[26] At the time of this application and the subsequent review hearing, the 2008 version of the EPA Code of Practice applied. The references to setbacks and risk management are based on this version of the Code of Practice and can be found at section 4.4.

Subsequent to the hearing, a revised version of the Code of Practice was issued in February 2013. In light of my reasons for refusing this application, it has not been necessary to seek the views of the parties about this new version. However, for the record I note that this revised version now specifically addresses cumulative risks and points to the benefit of on-site management containing wastewater to minimise cumulative risks.

[27] Table 1 of the Graeme O'Brien Land Capability Assessment.

[28] Mr Ford's opinion is that such wet conditions will present a risk; yet he concedes that the risk can be mitigated by increasing the size of the disposal field to disperse the applied water more thinly through the subsoil. The use of more appropriate treatment technology and dispersal methods, such as subsurface drip lines can also address this limitation.