1. Leave is given to any party to apply within 14 days of the date of this order to reconvene the hearing.
2. If no application is received under order 1, the Tribunal will make an order to cancel planning permit No PLP/2007/867.

Mr Neil Haydon, town planner and solicitor, of Beveridge Williams and Co Pty Ltd

Two lot subdivision involving the resubdivision of two existing lots.

• Area of new Lot 1 - 22.15 hectares
• Area of new Lot 2 - 8655 square metres, which will contain existing dwelling and associated outbuildings.

Section 87 Planning and Environment Act 1987 - application to cancel permit

Clause 42.01 - 2 (carry out works in ESO2 and ESO3)

The land has a long abuttal to Creswick Creek on its west and south boundaries. It slopes generally towards the Creswick Creek with steeper slopes along the creek escarpment.

The land is within the Tullaroop Special Water Supply Catchment

Gerdes v Hepburn SC [2010] VCAT 268

Rozen v Macedon Ranges SC [2009] VCAT 2746

1. Ballarat City Council, as responsible authority, has applied to cancel planning permit No PLP/2007/867 for a two lot subdivision, which it issued without giving notice of its decision to grant a permit to an objector, Central Highlands Water. A permit was issued instead of a notice of decision as required by section 64 of the Planning and Environment Act 1987.
2. The council made the application under section 87(1)(e) of the Planning and Environment Act 1987, which relates to any failure to give notice in accordance with this Act. There is no dispute that Central Highlands Water lodged an objection with the responsible authority and that no notice was given to it under section 64(1) of the Act. Grounds for cancelling the permit have therefore been established.
3. However, the Tribunal has a discretion under section 87 whether to cancel a permit even when grounds have been established.
4. At the hearing, both the council and the respondents submitted that although a permit was issued rather than a Notice of Decision to Grant a Permit, the permit should not be cancelled because, on its merits, the subdivision was appropriate subject to conditions. They say that the subdivision responds to the relevant planning scheme provisions and site constraints, and the proposed waste water management system will take care of any concerns that the water authorities (Goulburn Murray Water and Central Highlands Water) have with respect to water quality in a proclaimed special water supply catchment.
5. A number of issues arise in connection with this application. They include:
   • What permissions are required under the planning scheme?
   • The significance of the land's location a special water supply catchment.
   • The status of the water authorities, Goulburn Murray Water and Central Highlands Water.
   • The adequacy of the proposed waste water treatment system.
   • Whether a section 173 agreement to prevent further dwellings would be appropriate?
6. At the hearing we indicated that we would give the respondents, Mr and Mrs Myers, leave to make their own application under section 87 of the Planning and Environment Act 1987 to amend the permit to include a permit to carry out works for a wastewater management system and any access roads (if necessary).
7. However, since the hearing, we have had the opportunity to consider the above issues in greater detail and no longer believe that this is a desirable or lawful course of action for reasons we shall explain. First though, we shall consider the issues arising in connection with the application, which we have identified.

1. The land is in the Farming Zone and subject to three overlays - ESO2, ESO3 and EMO. A permit for subdivision is required under the zone and each of the overlays.
2. The subject land has an area of 23 hectares, which is less than the 40 hectare minimum subdivision lot size in the Farming Zone. The land consists of two similar sized lots, one with an existing dwelling. The applicants have recently acquired the land to add to their existing agricultural holding in the area. They have no need for the existing dwelling and wish to dispose of it. They propose to resubdivide the land to excise the dwelling. The lot with the dwelling will then be sold. A new on-site wastewater management system is proposed for the dwelling and a land capability assessment has been undertaken by Provincial Geo-Technical Pty Ltd. Replacement of the wastewater disposal area of the existing dwelling is a condition of the permit required by Goulburn Murray Water (condition 5).
3. Construction of a 4 metre wide all weather vehicular access to each lot is also a condition of the permit (condition 3).
4. The planning permit allows subdivision into two lots, but the permit does not also allow the construction or carrying out of works associated with the wastewater management system.[1] The council and the applicants appear to have entirely overlooked the requirements under the Environment Significance Overlay and the Erosion Management Overlay for a permit to carry out these works.
5. From the planning scheme maps, it appears that the works associated with the wastewater management system are contained within that part of the land which is subject to ESO3. The other two overlays (ESO2 and EMO) apply either side of the Creswick Creek. The works do not appear to be on land affected by these overlays, but this needs to be verified.
6. Schedule 3 to the Environmental Significance Overlay applies to water catchment areas. The overlay affects land within catchments providing a potable water supply to Ballarat and urban areas to the north.[2] The environmental objective to be achieved within this overlay is[3]:
   • To provide for the appropriate development of land within proclaimed water catchments;
   • To control development within proclaimed water catchments where such development may have an impact on the use of water for domestic and other purposes;
   • To protect the water quality and water yield within the catchments.
7. Under the overlay there are a range of permit requirements, which must be satisfied, that relate in particular to septic tanks and septic tank effluent absorption areas. They include a requirement for a section 173 agreement relating to the maintenance and management of any onsite disposal and treatment of wastewater.[4]
8. The need for a planning permit to carry out works relating to the proposed wastewater management system exists as a separate obligation under the planning scheme. Such a permit is distinct from and in addition to the requirement for a septic tank permit. The permit that has been issued does not include this permission. Although condition 5 requires replacement of the wastewater disposal area, the condition does not operate to grant this permission.
9. Thus the subdivision cannot proceed without a further permit to carry out works associated with the provision of a new wastewater management system. The need for such a permit arises under both the Farming Zone and the ESO3. It remains to be confirmed whether a permit is also required under ESO2 and the Erosion Management Overlay.

1. The land is within the Tullaroop Special Water Supply Catchment under the Catchment and Land Protection Act 1994. As such, the Guidelines, planning permit applications: planning permit applications in open, potable water supply catchment areas (May 2009)[5] must be considered in the assessment of all planning permit applications for use and development pursuant to section 60(1A)(g) of the Planning and Environment Act 1987.[6] There is no evidence that the council has considered the guidelines or turned its attention to the location of this land in a special water supply catchment area.

1. Under clause 66.02-6 of the planning scheme, a permit to use, subdivide or consolidate land, to construct a building or construct or carry out works must be referred to the relevant water board or water supply authority.
2. There appears to be confusion on the part of both the council and the relevant water authorities as to which authorities are referral authorities under this provision. Goulburn Murray Water is the owner and operator of the Tullaroop Reservoir and Central Highlands Water is a water supply authority. It draws water from the Tullaroop Reservoir to supply the City of Maryborough and surrounding towns. The subject land is also approximately 1.3 kilometres from groundwater bores from which Central Highlands Water supplies drinking water to the township of Clunes.
3. The permit application was referred to Goulburn Murray Water as a referral authority under clause 66.02-6. Notice was also given to Central Highlands Water, but not as a referral authority. Central Highlands Water lodged an objection on the basis that it was not a referral authority under section 55 of the Planning and Environment Act 1987, but as an agency that is affected by the proposal in accordance with section 52 of the Act.
4. In a recent case, Gerdes v Hepburn SC[7], the Tribunal considered the status of water authorities under clause 66.02-6 in situations similar to this where a reservoir is owned and operated by one authority, but water is supplied from the reservoir by another authority. On this issue it said:

[43] This confusion appears to arise from the wording of clause 66.02-6, which requires referral to:

The relevant water board or water supply authority.

[44] It seems this is sometimes interpreted as meaning that an application needs only be referred to one or the other, not both, in cases where there is one authority owning and operating the reservoir, which provides water to a domestic supply, and another authority actually supplying the water.

[45] In my view, clause 66.02-6 should be interpreted as requiring an application to be referred to any relevant water authority responsible for storage management or the collection, storage, treatment, transfer or distribution of water under the Water Act 1989. If there is more than one such authority, it should be referred to them all.

[46] By not referring an application to each authority, various objectives of the planning scheme relating to the protection of water catchments and the quality and quantity of water may be compromised. There is a risk that government's Guidelines: Planning permit applications in open potable water supply catchment areas (May 2006) may not be appropriately applied.

[47] The purpose of the referral provision in clause 66.02-6 is to protect water quality in special water supply catchment areas by ensuring that all authorities with an interest in the quality of water within the catchment are consulted. ...

1. We find it strange that in Gerdes, which was also concerned with the Tullaroop Reservoir Catchment and where the same two water authorities were involved (Goulburn Murray Water and Central Highlands Water), the Hepburn Shire Council accepted that a permit application should be referred to both water authorities under clause 66.02-6 whereas in the present case, the Ballarat City Council referred the application only to Goulburn Murray Water. We find it even more strange that Central Highlands Water did not consider itself to be a referral authority. It only lodged an objection on the basis of having been given notice under section 52 of the Planning and Environment Act 1987. If Central Highlands Water does not have a clear view of whether or not it is a referral authority under clause 66.02-6, it only adds to the confusion that responsible authorities face in these situations.
2. In the present case, we consider that Central Highlands Water is a referral authority under clause 66.02-6 as well as Goulburn Murray Water for the reasons set out in Gerdes v Hepburn SC. On this basis, if Central Highlands Water is a referral authority and it objected to the grant of a permit, then the council was obliged to refuse the permit pursuant to section 61(2) of the Act.
3. Nevertheless, leaving aside its status as a referral authority, Central Highlands Water did lodge an objection to the planning permit. Although Central Highlands Water is noted as an objector in the delegated officer' report, there does not appear to be any consideration of this objection or the issues it raises. This is surprising given the sensitivity of land in special water supply catchment areas, and the environmental objective to be achieved as identified in schedule 3 to the Environment Significance Overlay. Before deciding whether a permit for subdivision should be granted and the conditions associated with the subdivision or works for the wastewater management system, Central Highlands Water should have an opportunity to have its objections properly considered.

1. As we have noted earlier, neither the council nor the applicants have recognised the need for a permit to carry out works associated with the proposed wastewater management system, even though it is a condition of the permit for subdivision. A land capability assessment was required at the request of the Catchment Management Authority.
2. At the hearing there was no analysis of the land capability assessment, but our subsequent examination has identified a number of shortcomings and queries, which we consider need to be resolved. We have set these out in Appendix A.

Would a section 173 agreement be appropriate?

1. It is unfortunate that Central Highlands Water did not appear at this hearing. After all, the application to cancel the permit was made by the council as a result of its failure to give Central Highlands Water notice of its decision to grant a permit. Central Highlands Water has maintained its opposition to this permit and we would have expected it to be represented at the hearing in support of its opposition.
2. It is possible that Central Highlands Water did not appreciate that even though a ground may be established for cancelling a permit under section 87, such as a failure to give notice, the Tribunal nevertheless retains a discretion as to whether the permit should be cancelled. Under section 90A, in determining a request to cancel or amend a permit, the Tribunal must take into account the matters set out in section 84B(2) as if the request were an application for review.[8]
3. Condition 2 of the permit requires a section 173 agreement that the land may not be further subdivided so as to increase the number of lots. In its correspondence with the council and the Tribunal, Central Highlands Water stated it would be satisfied if the section 173 agreement contained an additional clause providing that no further dwellings will be constructed on the two lots. Mr and Mrs Myers oppose such a condition. Although they say they have no intention to build a further dwelling on the vacant lot at present, they wish to retain this as a possible option for the future.
4. We consider that the critical issue, which the council has failed to consider in its decision to grant a permit and which was raised in the objection by Central Highlands Water, is the question of further dwellings being constructed in the Tullaroop Special Water Supply Catchment area. As we have previously indicated, this issue is raised squarely by consideration of the Guidelines: planning permit applications in open, potable water supply catchment areas (May 2009).[9]
5. The inclusion of a further clause in the section 173 agreement to prevent any further dwellings would address this issue of increased dwelling density within the special water supply catchment area. However, we do not consider that, in itself, such an amendment to the permit would overcome the other problems we have highlighted. In particular, a permit is still required for works associated with the proposed waste water management system even though it is required by a permit condition. We consider that both water authorities (Central Highlands Water and Goulburn Murray Water) should have the opportunity to consider such an application. As we have also indicated, we do not consider that the current land capability assessment report would be adequate to support a permit application to carry out works in such a sensitive location.

1. As stated earlier, at the hearing we indicated that we would give the respondents, Mr and Mrs Myers, leave to make their own application under section 87 of the Planning and Environment Act 1987 to amend the permit to include a permit to carry out works for a wastewater management system.
2. Since then, we have further considered whether this is a desirable option. At the hearing, we had not finally determined that Central Highlands Water is a referral authority under clause 66.02-6 of the planning scheme. We had not had an opportunity to critically examine the land capability assessment report. Since the hearing, we have also had the opportunity to look more closely at the planning permit conditions themselves. We consider that condition 3 (road construction) is inadequate in terms that it fails to specify any standards or identify suitable measures for the prevention of soil erosion in the absence of a general provision "to the satisfaction of the responsible authority". We question what condition 4 (flood levels) is intended to mean.[10] We have already commented about condition 5 (Goulburn Murray Water) and determined that the condition does not obviate the need for a separate permit to carry out works for the wastewater management system.
3. We have considered whether it would be preferable to cancel the permit and to simply require a fresh permit application to be made for subdivision and to carry out works.
4. For several reasons we have decided that it is not an appropriate course of action for Mr and Mrs Myer to request an amendment of the permit to include the carrying out of works.
5. The current proceeding is an application to cancel the permit by the responsible authority on quite separate grounds. In our view, it would not be appropriate to use the current proceeding as a vehicle to amend the permit to include a new primary consent required under the planning scheme.
6. Procedurally, none of the grounds set out under section 87(1) would apply to this aspect of an amendment to the permit. In respect of a works permission, there has been no failure to give notice or to comply with section 55 of the Act. There has been no material change of circumstances or material mistake in relation to the grant of the permit. There has been no material misstatement or concealment of fact in relation to the application for the permit. Instead, it has simply not been appreciated that a separate permit is required for works under the planning scheme and this component was omitted from the original planning permit application.
7. Nor can the permit be amended under section 87A because it is not a permit that was issued at the direction of the Tribunal.[11]
8. We have considered the possibility of whether an amendment of the permit under section 72 (Part 4 Division 1A of the Act) would be possible. If there were no doubts about the validity of the permit, this might be appropriate. However, when the permit is the subject of a cancellation application before the Tribunal and the grounds for cancellation have been established, it seems fraught with uncertainty for the respondents to make an application to the council to amend such a permit. In any event, we do not consider that any time would be saved because a section 72 application for amendment must still be processed as though it was a new permit application.
9. Alternatively a new permit application just for works could be made. However, a permit to carry out works in the absence of a permit to subdivide is of little use to the Myers. They want the certainty associated with a permit for subdivision. From their perspective, the works component is simply a means of facilitating the subdivision.
10. The best alternative is for the Myers make a fresh permit application to the council for a permit for subdivision and to carry out works associated with the wastewater management system. This would enable proper referral to all relevant authorities and a proper consideration by the council against relevant guidelines and planning policies. The current permit, which is the subject of this proceeding, would be cancelled.
11. We have considered whether we should provide a further opportunity for the parties to comment on this proposed course of action in light of what was discussed at the hearing, although we are concerned about the further delay this may cause. The council's inadequate handling of this matter has already caused significant delays for the Myers and we do not wish to prolong this.
12. We have decided to deal with this issue by giving parties liberty to apply to reconvene the hearing if they wish to take issue with any of the procedural issues determined by the Tribunal. If no application to reconvene the hearing is received within 14 days of the date of this order, we shall proceed to make a formal order to cancel planning permit No PLP/2007/867 on the basis that there has been a failure to give notice in accordance with the Act under section 87(1)(e) and also that under section 87(1)(f) there has been a failure to comply with section 55 of the Act.

1. Grounds for cancelling the permit have been established. The permit itself is deficient because it does not include permission for works required by a condition in the permit namely the wastewater management system. Both the subdivision and the wastewater management system require assessment by the two referral authorities under clause 66.02-6, Goulburn Murray Water and Central Highlands Water. To enable all aspects of the subdivision and works to be considered in an integrated way, the permit should be cancelled and a fresh application should be made for both subdivision and works.

QUERIES AND COMMENTS REGARDING LAND CAPABILITY ASSESSMENT REPORT FOR 247 ANDERSONS ROAD, TOURELLO PREPARED BY PROVINCIAL GEOTECHNICAL PTY LTD - REFERENCE NO A9056, DATED 3 FEBRUARY 2009.

• Section 2 - Domestic water supply. A reticulated water supply has been assumed to not be available. The Tribunal would have expected the Assessor to have confirmed with the relevant water supply authority whether reticulated supply is currently available.
• Section 2 - Anticipated Wastewater load. As the house already exists the Tribunal would expect the Assessor to have confirmed the number of bedrooms in the residence rather than assuming a 3 bedroom residence.
• Section 2 Description of the Development - Anticipated Wastewater load. Incorrectly refers to Table 4.2 of EPA publication 891.1, the correct reference is Table 4.1. Further the correct allowance for tank water supply with standard fixtures is 115 litres not 80 as used. This anomaly will require a recalculation of the required absorption trench length. The Tribunal notes that in Section 6.3 a figure of 150 l/person/day has been quoted. The Assessor should be consistent in the usage of effluent load figures.
• Section 2 - Availability of Sewer. The Assessor states that "The area is unsewered and unlikely to be sewered in the short to medium term future." However it is unclear whether this statement is based on information provided by the relevant water corporation or an assumption.
• Section 3 - Site Key Features states that the site "experiences both site run-on and run-off". However Table 2 - Stormwater Run-on and Upslope Seepage states that the "effluent management area is expected to receive negligible stormwater run-on" and elsewhere at Site Drainage and Subsurface Drainage "The Site could experience variable stormwater run-on and run-off.". The Tribunal would expect that the Assessor would clearly identify whether run-on is going to occur and from which direction and require the provision of an appropriate solution.
• Section 3 - Table 2 Site Features - Exposure. States that the "site is cleared" with a "high sun and wind exposure." However the site survey prepared by Beveridge Williams & Co. Pty Ltd. Ref. 16942 v.01 indicates Cyprus trees on three boundaries of the proposed subdivision and a mature tree and other trees on the proposed Land Application Area.
• Section 3. - Table 2 Landform - States that "The local topography is of slightly sloping volcanic plains." The Tribunal was advised by both Mr Myers and Mr Hayden that the adjacent creek which is less than 250 metres away was approximately 40 metres lower than the residence. The Tribunal would have expected that this information would have been identified in the assessment.
• Section 3. Table 2 - Recommended Buffer Distances refers to Table 4.6 of the EPA code of Practice. The correct reference should be Table 4.2.
• Table 2 Flood Potential, states that the Land Application Area "may lie above the 1:100 year flood level." The Tribunal would expect an expert in land evaluation to be more definitive in relation to flooding, especially as the LAA is approximately 40 metres above the creek.
• Section 4. Soil Assessment and Constraints - Table 3 Soil Features - Soil Permeability and Design Loading Rates notes that the assessment was based on and analysis for a secondary treated effluent and recommends against the use of primary treatment systems. However Section 6.1 advises that "primary treatment and disposal via absorption trenches is suitable for this site." This is reflected in Section 9. Conclusions, which recommends as a minimum ". Primary treatment of wastewater." The Tribunal is concerned that the design of the required disposal area and required level of treatment is not clearly defined or articulated in the report.
• Section 4 Table 3. The tribunal notes that pH and electrical conductivity were not measured. The Tribunal would expect that all relevant parameters would be analysed as part of a Land Capability Assessment.
• Section 5. Land Capability Assessment Matrix - There is no data or discussion why the site rating for evaporation is rated at 3.
• Section 6.3 Sizing the Disposal System - Nutrient Balance. No details were provided to allow confirmation that the nitrogen and phosphorous assimilation requirements can be met.

[1] Although the overlays all require a permit for the construction of buildings and works, works associated with the access roads would be exempt under clause 62.02-2. We have not further considered the issue of a permit for works for the access roads. Conditions regarding the standard of construction and other related matters may be included as conditions of the subdivision permission.

[2] Clause 1.0 of schedule 3 to the Environment Significance Overlay

[3] Clause 2.0 of schedule 3 to the Environment Significance Overlay

[4] Clause 4.0 of schedule 3 Environment Significance Overlay, third dot point

[5] Published by the Department of Planning and Community Development

[6] These guidelines replaced the Interim guideline for planning permit applications in open, potable water supply catchment areas in May 2009. The permit in this case was issued on 27 May 2009. It is unclear exactly which guideline applied at this time, although the provisions in each are similar.

[7] [2010] VCAT 268

[8] Section 90A(2) provides that the matters set out in section 84B(2) are in addition to any other matters which the Tribunal can properly take account of or have regard to or is required to take account of or have regard to in determining a request, for example the matters set out in section 91(3). We note that section 91(3) applies only to a request under section 89(1) of the Act. That section is not relevant in the present case because the request is made by the responsible authority, rather than a person under section 89. Nevertheless, whether it would be just and fair in the circumstances to cancel a permit (section 91(3)(c)) is inherent in any exercise of the Tribunal's discretion under section 87(1).

[9] A detailed consideration of the implications of the guidelines was undertaken in Rozen v Macedon Ranges SC [2009] VCAT 2746

Flood levels for the 1% AEP probability (100 year ARI) have not been designated or declared for this area under the Water Act 1989. However anecdotal evidence indicates that in the event of a 100 year ARI flood it is possible that a portion of the location of the proposed works may be subject to inundation from Creswick Creek.

[11] See section 87A(1) Planning and Environment Act 1987