1(a) Prior to the commencement of the subdivision and removal of native vegetation permitted under this permit, the owner must submit to the Responsible Authority ("RA") for approval and endorsement (in addition to the application plans) a plan(s) identifying all "existing native trees to be removed" on the land. All plans submitted for endorsement must be to scale and dimensioned and three copies must be provided. Only those trees on the land marked 'existing native trees to be removed' (or similar notation) on the endorsed plans are permitted to be removed or destroyed to the satisfaction of the RA.

1(b) The subdivision and vegetation removal as shown on the endorsed plans must not be altered without the written consent of the RA.

2(a) Prior to the removal of native vegetation on the land or the issue of any Statement of Compliance for the plan of subdivision allowed by this permit, the permit holder/owner ("owner") shall prepare an Offset Plan which must be submitted to and approved by the RA. When approved, the Offset Plan will be endorsed and will form part of this permit. If the Offset Plan incorporates plans, these plans must be drawn to scale with dimensions (where appropriate) and three copies must be provided.

2(b) The Offset Plan must show appropriate offsets to compensate for the loss of 1.24 habitat hectares of native vegetation on the land, and where 2 large and 15 medium old trees require protection and 85 trees need to be recruited.

2(c) The Offset Plan must include details of the following (as applicable):

•

means of calculating the offsets;

•

locations where offsets will be provided;

•

type of offsets to be provided in each location;

•

details of revegetation including number of trees, shrubs and other plants, species mix and density;

•

means of interim protection for newly established vegetation until established;

•

methods of permanent protection for the offsets;

•

persons responsible for implementing and monitoring the offsets;

•

details of any earthworks, drainage and other works;

•

timeframes for implementing the relevant work.

2(d) The RA's approval of an Offset Plan may involve:

•

a requirement for the registered owner to enter into a Section 173 Agreement in respect of any applicable land;

•

a requirement for the registered owner to enter into a binding agreement with a specified person in order to implement aspects of the Offset Plan;

•

a requirement for the registered owner to provide a bond as security for completion for part or all of the Offset Plan.

2(e) Subject to any alternative arrangements and/or extension of time agreed to by the RA, the Offset Plan must be implemented within 12 months of the commencement of the works associated with the subdivision. In the absence of other arrangements the RA considers satisfactory for the on-going maintenance of any new vegetation, the RA may also require the owner to be responsible for appropriate maintenance and any necessary replanting until such new vegetation has survived for at least three years.

3. Prior to the commencement of the subdivision and associated removal of trees hereby permitted, three copies of road reserve landscape and land management plans (drawn to scale and dimensioned) shall be submitted to the RA. Such plans shall include landscaping and land management measures for the road reserve associated with the new internal road on the land, including details on:

a.

weed control;

b.

plantings of native vegetation (which must comply with any relevant features of the approved Offset Plan); and

c.

pest animal control.

Such plans shall be consistent with the BETP Plan required by condition 4 and with the plan(s) identifying all "existing native trees to be removed" required by condition 1(a). Otherwise the plans required by this condition 3 must be to the satisfaction of the RA and when approved shall be endorsed and form part of this permit.

The aforementioned road reserve landscaping and land management measures must be actioned within 12 months of the completion of the new internal road on the land.

4. Prior to the removal of any native vegetation on the land or to the issue of any Statement of Compliance for the subdivision of the land, the owner must:

(a) prepare a Building Envelope and Tree Preservation Plan ("BETP Plan") which must be submitted to and approved by the Responsible Authority. This BETP Plan must be generally in accordance with the Subdivision Concept Plan for the land prepared by Elizabeth Jacka dated 14 February 2005 and must also be consistent with the endorsed plan(s) showing "existing native trees to be removed". The BETP Plan must identify the building envelope for each lot and those significant existing native trees to be preserved. The BETP Plan must also show a Tree Protection Zone for those significant native trees shown on the BETP Plan as being preserved, with this Zone to extend to at least around the drip line of the tree. When approved, this BETP Plan must be endorsed and will form part of this permit; and then

(b) enter into an agreement pursuant to Section 173 of the Planning and Environment Act 1987. The agreement must provide for the following matters:

(i) nomination of building envelopes for each new lot as per the BETP Plan Plan;

(ii) the identification of those significant existing native trees on the land to be preserved as part of the approved subdivision as per the BETP Plan; and

(iii)

(other than as approved by the RA) a prohibition on any removal and/or significant lopping of any significant existing native tree on the land which the BETP Plan shows as identified for preservation, plus a prohibition on any development outside of the building envelopes shown on the Building Envelope Plan including the construction of any building, tennis court or swimming pool.

5. In relation to the Tree Protection Zone for each significant native tree shown on the BETP Plan as being preserved:

•

there must be erected a tree protection fence prior to commencement of any excavation or construction works on the site and shall be maintained in good condition to the satisfaction of the RA until the completion of the construction works on the site;

•

once the tree protection fencing is erected, Council must be notified to arrange for an inspection;

•

the tree protection fence shall be constructed of suitably robust wire mesh approved by the RA and erected to a height of 1.5 metres around the Tree Protection Zone and the fences clearly signed "Tree Protection Zone - Keep Out" on all sides;

•

fences shall only be shifted during construction works on the site with the consent of the RA. The fences shall not be removed before the commencement of occupation of the building hereby permitted;

•

no materials or equipment are to be stored within or should be allowed to enter the Tree Protection Zone. Nothing whatsoever should be attached to any tree including temporary service wires, nails, screws and any other fixing device;

•

no open cut trenching or excavation works are permitted within the Tree Protection Zone. All underground services must be bored or excavated by hand and supervised by an arborist approved by the RA;

•

there shall be no changes to the soil grade level in the Tree Protection Zone;

•

temporary access through the Tree Protection Zone can only be done with the consent of the RA;

•

the entire area within the Tree Protection Zone must be mulched to a depth of 100mm using well-composted timber based mulch;

•

all contractors working at the site must be instructed by the site supervisor of the reasons for the Tree Protection Zone and associated conditions.

6. Other than provided for in the above permit conditions, no other native vegetation on the land shall be removed, damaged or destroyed without the prior written consent of the RA (other than in accordance with a Notice given pursuant to the Local Government Act).

7. A copy of this permit and the endorsed plan must be kept on site and made available for inspection by Council officers upon request at all times that the tree removal is being undertaken.

8. Prior to the issue of any Statement of Compliance, a suitable Drainage Plan providing details of all necessary arrangements/works for the drainage of the land must be submitted to and approved by the RA. Upon such approval, the Drainage Plan must be endorsed and will then form part of this permit.

9. Prior to Council issuing a Statement of Compliance, an on-site detention device is to be installed to as far as practicable restrict the property discharge to a flow equivalent to the pre-development design flow rate as approved by the RA.

10. Prior to Council issuing a Statement of Compliance, the owner of the land shall to Council an amount equivalent to 3% of the value of the land as a public open space contribution.

a.

the subdivision is not commenced within two years of the date of issue of this permit;

b.

the subdivision is not completed within five years of the date of issue of this permit; or

c.

any extension of such periods the RA may allow, if a request is made in writing before the permit expires or within three months afterwards.

12. The endorsed plans must show any relevant SPI Powernet easement fully dimensioned on all affected lots.

13. The endorsed plans must (where applicable) show the position of the SPI Powernet easement to accord with the position of the existing transmission lines as determined by survey.

14. Details of any proposed road construction and the installation of services within the easement (where applicable) must be submitted to SPI Powernet and approved in writing prior to the commencement of work on site.

15. The owner of the subject land must enter into an agreement with Yarra Valley Water for the provision of water supply.

16. The owner of the land must enter into an agreement with Yarra Valley Water for the provision of sewerage.

17. Prior to the issue of a Statement of Compliance the Owner shall enter into and comply with an agreement with Melbourne Water Corporation, under section 269A of the Melbourne and Metropolitan Board of Works Act 1958, for the provision of drainage works and the acceptance of surface and stormwater from the subject land directly or indirectly into Melbourne Water's drainage system.

18. No polluted and/or sediment laden runoff is to be discharged directly or indirectly into Melbourne Water's drains or watercourses.

19. Prior to certification, the Plan of Subdivision must be referred to Melbourne Water in accordance with Section 8 of the Subdivision Act 1988.

20. Stormwater runoff from the subdivision must achieve State Environment Protection Policy (Waters of Victoria) objectives for environmental management of stormwater as set out in the 'Urban Stormwater Best Practice Environmental Management Guidelines (CSIRO) 1999'.

21. Prior to the commencement of works, a Stormwater Management Strategy must be submitted to the RA and Melbourne Water for approval. The strategy must show the inclusion of permanent on-site stormwater quality works to meet (condition 26) above.

22. At least 28 days prior to the commencement of construction a Site Management Plan, detailing pollution and sediment control measures, must be submitted to Melbourne Water.

23. Engineering plans of the subdivision (A1 size) are to be forwarded to Melbourne Water for comment/approval).

24. The plan of subdivision submitted for certification under the Subdivision Act 1988 shall be referred to TXU in accordance with Section 8 of that Act.

25. The applicant shall enter into an agreement for the extension, upgrading or re-arrangement of the electricity supply to the lots on the plan of subdivision as required by TXU. (A payment to cover the cost of such work will be required and easements internal and external to the subdivision and provision of sited for subdivisions may also be required.)

26. Prior to a Statement of Compliance being issued by the RA, the owner shall provide to the satisfaction of Telstra all works for provision of Telecommunication Services to each lot created in the subdivision.

27. Where any extension or alterations to Telstra's network or plant are necessitated by the proposed subdivision, the cost of such works shall be met by the owner prior to the Statement of Compliance being issued.

28. The plan submitted for certification must show details of easements and/or RCM/RIM sites which may be required by Telstra.

29. Operable hydrants above or below ground must be provided.

30. Hydrants must be identified to the satisfaction of the CFA.

31. The maximum distance between a hydrant and the rear of a building envelope (or in the absence of a building envelope, the rear of a lot) must be 120m and hydrants must be no more than 200m apart.

32. Constructed roads must be a minimum of 5.4m in trafficable width.

33. Roads must be constructed so that they are accessible in all weather conditions and capable of accommodating a vehicle of 15 tonnes for the trafficable width.

34. The average grade of roads must be no more than 1 in 7 (14.4%) (8.1 degrees) with a maximum of no more than 1 in 5 (20%) (11.3 degrees) for no more than 50m and dips in roads have no more than 1 in 8 (12.5% (7.1 degrees) entry and exit angle.

35. Constructed roads of more than 60m in length from the nearest intersection must have a turning circle with a minimum radius of 8m (including roll-over kerbs if they are provided) or other turning solutions using T or Y heads of specified dimensions to the satisfaction of the Country Fire Authority.

Mr Ian Pitt S.C. of Best Hooper. He called the following evidence:

•

Traffic evidence from Mr Henry Turnbull; and

•

Environmental evidence from Mr Andrew McMahon.

1 This matter involves a proposed 19 lot subdivision and associated native vegetation removal on a site on the outskirts of Eltham. The site is just over 3 hectares in size, has a significant covering of native vegetation and is subject to an Environmental Significance Overlay ("ESO"). However the primary zoning of the site is Residential 1 and it is located in an established residential area. The Department of Sustainability and Environment ("DSE") is not a referral authority here, as the relatively modest size of the site does not "trigger" DSE's involvement under the Planning Scheme provisions in terms of any native vegetation removal. Hence Council is the key public authority in this regard.

2 The key issue in this appeal has been whether the proposed 19 lot subdivision meets the requirements of the ESO and of the Clause 52.17 native vegetation net gain provisions. Council's position here was that the proposed subdivision is too intense, and that a 9-10 lot subdivision would be more appropriate in light of the aforementioned requirements. The Applicant by contrast emphasised the limitations to the habitat/biodiversity values of the remaining native vegetation on the site, and put to me that the better approach would be to establish a process under the permit conditions whereby the Applicant must make an appropriate net gain offset contribution to other native vegetation in the vicinity of the site.

3 My overall finding has been that it is appropriate that a permit issue for the proposal. However, whereas the Applicant simply proposed that there be a permit condition requiring a one-off $40,500 net gain payment towards the better management of other existing native vegetation reserves in the vicinity to satisfy the "net gain offset" requirements, I have drafted the relevant permit condition (Condition 2) using a "secondary consent" approach. Following this approach, the Applicant must submit a net gain Offset Plan which Council must approve as providing adequate compensation for the loss of 1.24 habitat hectares and where in addition 2 large and 15 medium old trees require protection and 85 trees need to be recruited.

4 While it is possible that Council may agree with Mr Pitt that a one-off financial contribution by the Applicant is the best way to achieve this compensation, this seems an issue for another day. My preference here of relying on a "secondary consent" process to finalise the nature of the offset is consistent with the thrust of the somewhat comparable recent Tribunal decision of Villawood Properties v Greater Bendigo City Council VCAT P1063 & P1061 of 2005. While there may be some good intentions involved, I consider that the proposed $40,500 payment has been put forward on a very arbitrary basis and that I do not have adequate information available to me to assess whether this figure is high, low or appropriate.

5 This matter involves an appeal under s.79 of the Planning and Environment Act 1987 ("Act") against Council's failure to make a decision in the statutory period. The proposal is for the subdivision of the land into 19 lots and associated removal of native vegetation. The site in question is 70 & 78 Leane Drive, Eltham ("subject land").

6 The hearing of this matter took place on 18 November 2005. During the hearing I heard submissions from the Applicant and from Council, plus I received expert evidence from Mr Turnbull (traffic evidence) and from Mr McMahon (environmental evidence).

7 It was clarified that although the applicant had only received copies of objections from two neighbours (Mr Jeffers and Mr Wallace), there was in fact another resident present at the hearing (Mr Robertson), who had objected to the proposal and wished to put forward submissions. Mr Pitt indicated that he did not oppose Mr Robinson making such a submission to me and this was the basis on which the hearing proceeded.

8 Council indicated at the hearing of this matter that if it had been in a position to formally reach a decision on the proposal, it would have issued a Notice of Refusal on the following grounds:

The proposal has not adequately responded to the objectives and decision guidelines of the Environmental Significance Overlay (Schedule 1) that affects the subject land. Secondly, the proposal has not adequately responded to the Victorian Native Vegetation Management Framework as required by clauses 15.09 and 52.17 of the planning scheme.

9 The subject land incorporates two different certificates of title, which have a street address of 70 & 78 Leane Drive. The site lies within an established residential area, about 3 kilometres north-east of the Eltham town centre. The combined area of the two lots is 3.296 hectares. There are three existing single storey brick dwellings on the subject land, two situated on the 78 Leane Drive lot and one on the 70 Leane Drive lot. These dwellings have associated domestic gardens and are accessed from Leane Drive by gravel driveways.

10 In relation to the vegetation on the site, Council's written submission provides at paragraph 2.5 that "the site is covered by a relatively dense scattering canopy trees. The majority of these trees are indigenous to the area, including Yellow Box Red Stringybark and Candlebark. Understorey vegetation indigenous to the area also exists on the subject land although there has been some slashing and clearing of this vegetation". The topography of the subject land is somewhat undulating.

11 In relation to the surrounding area, the land to the west consists of residential properties fronting Victoria Close. The land to the south consists of residential lots fronting Artist Hill. The land to the east consists of lots ranging in size from 2707 square metres to 1.09 hectares, each developed with a dwelling. The land to the north is characterised by larger lots which range in size from 2760 square metres to 1.2 hectares. The dwellings on these nearby properties are predominantly single or double storey and of brick construction.

12 There is an overhead high voltage transmission line easement which passes through the north-east portion of the subject land the high voltage electricity power lines pass through the lots lying to the north of the subject land.

13 The application in its original form proposed a 20 lot subdivision of the subject land with associated buildings and works, and the removal of native vegetation. However, there were various modifications to the application as part of the overall process. In particular, the proposal now is merely for the subdivision of the subject land and associated removal of native vegetation, without any "development" aspect to it. In addition, the number of proposed lots has now been reduced from 20 to 19.

14 I note that the application history for this matter included the provision by the Applicant of a June 2004 Flora and Fauna Report to Council, prepared by Ecology Australia.

15 Following receipt of Council comments on this June 2004 report, revised plans were submitted to Council in March 2005. Apart from reducing the number of proposed lots from 20 to 19, these revised plans provided in March 2005 modify the proposed building envelopes with a view to minimising impacts on the existing significant trees, and lots 4 and 5 are re-configured so that the new lot 5 is a battle-axe lot.

16 The majority of the proposed allotments range in size from 1000 to 1420 square metres. This is roughly comparable to the average size of the other existing neighbouring lots to the west and south. The size of the three lots that abut the south boundary range between 1650 and 2546 square metres. In relation to the three lots that will accommodate the existing dwellings, these lots range in size between 2290 and 2830 square metres.

17 All lots other than those accommodating existing dwellings incorporate a building envelope. The building envelopes range in size from 425 to 555 square metres. Lots 1, 2 and 3 will have direct vehicle and pedestrian access from Leane Drive. All other lots will be accessed from an internal road, extending south from Leane Drive. The proposed road pavement will be 5 metres in width, and will incorporate the court bowl at its southern end. The alignment of this road has been designed to "meander" slightly with a view to reducing the necessary tree removal.

18 One of the contentious features of the proposal is that the assessment by Ecology Australia takes the general approach of concentrating on significant canopy trees rather than a more detailed assessment which incorporates the understorey vegetation. I shall comment on this further at a later stage. Putting this issue to one side, the proposal involves a significant degree of removal of this native understorey and non-significant canopy trees, plus the removal of a handful of identified "significant native canopy trees".

19 The subject land is zoned Residential 1 with a permit being required to subdivide the land pursuant to cl.32.01-2 of the planning scheme. Obviously the clause 56 ResCode provisions apply.

20 Apart from a section of the subject land immediately abutting the eastern side boundary, the majority of the site is covered by the Environmental Significance Overlay Schedule 1. Clause 2 of this Overlay, which deals with "environmental objectives to be achieved", provides as follows:

•

To protect and enhance sites faunal and habitat significance identified in (Beardsell 1997) Sites of Faunal and Habitat Significance in North East Melbourne.

•

To protect and enhance regional and strategic habitat links identified in (Beardsell 1997) Sites of Faunal and Habitat Significance in North East Melbourne.

21 Although there are certain exemptions provided for in cl.3 of the Overlay, it was common ground at the hearing that these exemptions do not apply here. Hence a separate "permit trigger" arises under this Overlay, as well as under the Residential 1 zoning.

22 There is also a permit requirement under cl.52.17 of the planning scheme which deals with native vegetation removal. The decision guidelines in cl.52.17 require Council to consider achieving the goal of "Net Gain" as expressed in the Victorian Native Vegetation Management Framework.

23 The entire subject land is also covered by a Wildfire Management Overlay, which Council summarised as seeking to "ensure that development which is likely to increase the number of people in the area satisfies the specific fire protection objectives, and does not significantly increase the threat to life and surrounding property from wildfire". Neither Council nor the objector Mr Robinson particularly pursued any issues under this Wildfire Management Overlay and it has played no real role in my decision.

24 In terms of relevant policies, Council referred me to cl.14.01 (Urban Settlement), to cl.15.09 (Conservation of Native Flora and Fauna), to cl.16.01 (Residential Development for Single Dwellings) and to cl.18.02 (Car Parking and Public Transport).

25 In relation to Clause 15.09, sub-clause 15.09-2 provides as follows:

Planning and responsible authorities should have regard to Victoria's Native Vegetation Management - A Framework for Action (Department of Natural Resources and Environment 2002). If native vegetation is proposed to be removed as part of a land use or development proposal, planning and responsible authorities should achieve a Net Gain outcome, as defined in the Framework.

26 I have also had regard to cl.22.12, which deals with Council's Neighbourhood Character Policy, which Council described as seeking to "protect an existing neighbourhood character or to contribute to a preferred neighbourhood character". The subject land falls within the "garden court 6" precinct. The design objectives and responses of this precinct are to:

•

maintain the existing mix of native and exotic vegetation including canopy trees and understorey by retaining remnant indigenous understorey vegetation where possible and replant where appropriate; and

•

maintain and enhance the continuous flow of garden settings and the openness of the front boundary treatment by avoiding front fencing or solid side fencing visible from the street where this is a feature of the streetscape.

27 I note that the decision guidelines in Clause 52.17 refers to "relevant operational guidelines". There have been a number of versions of draft operational guidelines under consideration for some time, but this has been overtaken by Amendment VC35. With the recent gazettal of Amendment VC35, this Amendment (amongst other things) amended the decision guidelines of cl.52.17 so as to remove reference to the "operation of guidelines" as a consideration in the discretion whether to approve an application to remove, destroy or lop native vegetation. I am unaware of any guidance as to if and when any revised draft operational guidelines might be produced.

28 The Native Vegetation Management Framework document defines Net Gain as follows.

"Net Gain" is the outcome for native vegetation and habitat where overall gains are greater than overall losses and where individual losses are avoided where possible. Losses and gains are determined by a combined quality-quantity measure and over a specified area and period of time. Gains may be either required offsets for permitted clearing actions or as a result of landholder and Government assisted efforts that are not associated with clearing.

Net Gain comprises three central components to ensure an overall increase in the extent and quality of native vegetation:

1. A reduction in losses in the extent of existing native vegetation;

A reduction in losses in the quality of existing native vegetation due to threatening processes; and

The achievement of gains and extent and quality of native vegetation through its rehabilitation and revegetation with indigenous species for biodiversity conservation and land and water resource outcomes.

29 Importantly, unlike some other Tribunal cases involving contentious subdivision proposals on larger sites and the requirements of Clause 52.17, in this case the Department of Sustainability and Environment is not a referral authority. This is because the relatively modest size of the subject land (under 4 hectares) does not trigger the involvement of DSE - Clause 66.02-3 sets a "minimum area to be cleared" of 10 hectares as the trigger for DSE becoming a referral authority.

30 I shall not repeat the submissions of the parties in any detail, but rather concentrate on what I see as being the key issues in this matter. I note here that copies of the written submissions of the Applicant and Council are retained on the Tribunal file along with the relevant photographs, plans and other tendered materials.

31 In relation to the submissions of Mr Robinson, I note that his residential property on Leane Drive is immediately to the west (ie No. 68 Leane Drive). The key concerns he raised at the hearing included the loss of vegetation associated with the proposal, the impact on his amenity of having a new dwelling next door to his existing dwelling and associated issues with fencing and landscaping. Mr Robinson indicated that he did not oppose subdivision per se of the subject land, but considered in the order of 9 or 10 new lots to be more appropriate than the 19 proposed lots. This echoed Council's submission that the subdivision should only involve about 50% of the 19 lots currently proposed.

32 In setting out my findings, the best approach seems to separate the balance of my decision into three main areas being:

•

the more straight forward planning issues which I can deal with briefly;

•

the more complex issues of whether the requirements of the Environmental Significance Overlay Schedule 1 and cl.52.17 are satisfied by the proposal; and

•

the practical issue of the Applicant's proposal that the "net gain" requirements arising from the proposal be dealt with in practice through a permit condition requiring a "net gain offset" payment of $40,500 towards the maintenance of other existing native vegetation in the vicinity of the subject land.

33 I see a number of aspects of the proposal to be more straight forward and which I can deal with more briefly, as follows.

34 Firstly, I am satisfied that the general design features of the proposed subdivision are satisfactory and meet the relevant ResCode requirements. I note here that the proposed lot sizes seem broadly comparable with the lot sizes of the existing residential development to the west and south.

35 Secondly, I rely on the traffic evidence of Mr Henry Turnbull in finding that I see no traffic engineering reasons to refuse the proposal. In relation to a couple of particular issues that arose from Mr Turnbull's evidence, I am content to adopt his recommendation that there is no need for any specific passing areas to be incorporated into the new internal road.

36 Although I would otherwise be open to widening the internal road by 400mm as was suggested by the CFA, having reviewed the landscaping plan in terms of the existing trees located close to the edge of the internal road, on balance I am unconvinced that this 400 mm widening is appropriate. The better approach seems to avoid any further widening of the internal road, in the interests of avoiding any further removal of those significant existing native trees located close to the edge of the location of the new internal road. I expect that the traffic levels along the new internal road should be relatively low, and one would anticipate that common sense will prevail in terms of vehicles needing to pass one another within the internal road. I also expect that the cross-over entry areas into lots 4 and 5 and the grassy area in between should in practice hopefully act as something of a de facto "passing area" in any case.

37 Thirdly, I am satisfied (excluding for the moment the specific issues discussed below) that the proposal is generally consistent with the relevant planning policies and that there will be no unacceptable impacts on any adjoining neighbours. In relation to the concerns raised by Mr Robinson who lives at the adjoining property of No. 68, while I accept that these concerns are genuinely held, I agree with Mr Pitt that there seems no reasonable basis for altering or refusing the proposal due to these concerns. In particular, I note that the proposed new lots 1, 2 and 3 facing on to Leane Drive will merely continue the existing subdivisional layout pattern of the existing No 68 and 66 Leane Drive properties further to the west.

38 Given that the subject land is zoned Residential 1 and in light of the locality being an established residential area, I agree with Mr Pitt that it seems reasonable that Mr Robinson should have expected that the new lots created which face on to Leane Drive would be of a similar size to Mr Robinson's own lot. Bearing in mind that the proposal does involve building envelopes for these new lots 1, 2 and 3 (ie rather than an "open slather" situation), I consider that any amenity impacts upon Mr Robinson will be within reasonable constraints.

39 Fourthly, in relation to the issue of whether the proposed building envelopes should be made smaller or not, on balance I am content to leave the proposed building envelopes "as is". I agree with Mr Pitt that there seems some risk that the shrinking of the relevant building envelopes could make it more likely that a new owner of any one lot might wish to "go double storey" with the new dwelling. In addition, bearing in mind that the building envelopes have already been varied as part of the re-design process that lead to the revised plans submitted in March 2005, I am satisfied that the building envelopes take reasonable account of the need to minimise the removal of identified native significant canopy trees.

Has Clause 52.17 & the ESO Requirements been Satisfied?

40 I move now to the more complex issue of whether the proposal is satisfactory in terms of meeting the requirements of the Environmental Significance Overlay Schedule 1 and of cl.52.17 of the planning scheme. I have already referred to the objectives of the ESO and clearly the 1997 Beardsell report plays a key role in these objectives.

41 As a good starting point here, I acknowledge that there is an inherent tension between the primary zoning of the subject land as Residential 1, compared to the environmental objectives which the ESO is trying to achieve. In other words, the Residential 1 zoning suggests an inherent planning intent that the subject land is suitable to at some stage be subdivided and developed for residential purposes, whereas the existence of the ESO indicates a desire to preserve the native vegetation on the subject land at least as far as practicable. This expectation of future residential development under the Residential 1 zone is reinforced by the fact that the subject land is in fact surrounded by existing relatively conventional residential development to the west, east and south of the subject land.

42 As pointed out by Mr Pitt in his written submission, the Tribunal has previously recognised this tension between the competing planning objectives in the earlier cases of Roadcon Constructions Pty Ltd v. Ballarat City Council [2004] VCAT 2630, and also in Stoddart v. Australian Eastern Development Corporation Pty Ltd [2005] VCAT 1149. In relation to the Roadcon case, although the relevant overlay in that case was a Vegetation Protection Overlay, the following paragraphs from that case seem helpful here:

In relation to the notion of minimising impacts it would seem that the less amount of development the less impact however, I think that is an overly simplistic approach to take. Once development and associated human activity occurs on a relatively small parcel of land like this, there are going [to be] impacts on bi-diversity values. This would occur even if there were fewer lots or lots were to be made bigger.

The NVF is a policy which must be weighed and balanced against a range of other consideration. It must apply in a sensible and pragmatic way, particularly when dealing with land zone for urban use and development. it seems nonsense to on the one hand to have a strategy that identifies land for residential use, to re-zone and service the land in response to the strategy to allow surrounding land to be redeveloped in accordance with the zoning and then to say it cannot be developed, or alternatively developed at levels that really reflects some of the zoning.

43 Relying on my immediately preceding comments and the Roadcon quote above, it is clear to me that (in considering the merits of the proposal in light of the requirements of the Residential 1 zoning, the ESO and cl.52.17) I similarly need to take a pragmatic approach of seeking to balance the objectives of these various planning controls. The "$64 question" then becomes (using this pragmatic approach) whether the proposal has gone far enough in terms of protecting the native vegetation features of the subject land.

44 In this regard, Council's case was that the form of proposed subdivision is overly intense and that about half as many lots as proposed would be more appropriate in terms of there being less removal of the native vegetation on the subject land. Following this line of thinking, for the proposal to comply with Clause 52.17 and the ESO, the first priority is having less proposed lots, so as to preserve more of the native vegetation on the subject land itself.

45 In relation to the June 2004 report from Ecology Australia and also the expert evidence provided during the hearing from Mr McMahon, Council criticised this information/evidence as not giving sufficient weight to the requirements of the ESO and cl.52.17. In addition, there was criticism of the methodology used by Ecology Australia in its assessment of the subject land, in that Council argued that greater consideration and attention should have been given to the range of native understorey vegetation on the subject land, as opposed to the focus that was given the existing native canopy trees.

46 In response to these criticisms, the main features of Mr Pitt's case on behalf of the Applicant were as follows:

•

Mr Pitt relied on the June 2004 Flora and Fauna Report prepared by Ecology Australia, the redesign process that lead to the fresh plans lodged in March 2005, and the environmental evidence provided by Mr McMahon during the hearing;

•

in relation to the "net gain" procedure of using a "three step approach" under "Victoria's Native Vegetation Management Framework" of seeking to avoid adverse impacts or then minimise those impacts before proceeding to the third step of identifying appropriate offset actions, Mr Pitt put to me that the proposal did adequately deal with the first two of these three steps. In other words, Mr Pitt submitted that the fresh plans submitted in March 2005 incorporated a genuine and satisfactory attempt to avoid adverse native vegetation impacts and otherwise to minimise those impacts, having regard to the advice received from Ecology Australia in its June 2004 report;

•

in relation to the third "net gain" step of "identifying appropriate offset actions", Mr Pitt relied on his proposed new condition 1 sub-clause, which would require the owner of the subject land to contribute $40,500 to the Responsible Authority to contribute to the maintenance of other existing native vegetation reserves within public ownership in the vicinity of the subject land;

•

with respect to the aforementioned objectives of the ESO, Mr Pitt argued that the proposal does meet these objectives. In relation to the Beardsell report of 1997, Mr Pitt argued that reduced weight should be given to this report due to the fact that it is now 8 years old, with the research upon which the report is based even older. Furthermore, in relation to that part of the Beardsell report which comments on the "Area 53 - Wombat Drive and Piper Crescent" in question here, Mr Pitt quoted the relevant Beardsell commentary in his written submission to me and relied on certain sections of this commentary which indicate that in practice by 2005 the likely degree of habitat loss and degradation will be such that the "faunal and habitat values" of the remaining native vegetation will be likely to be substantially diminished;

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whereas cl.29.05-3 in the Planning Scheme indicates Council's intention that the ESO be applied to "identify areas of National, State and regional faunal and habitat significance", Mr Pitt relied on the evidence of Mr McMahon in putting to me that the subject land in fact no longer meets this requirement of having at least "regional faunal and habitat significance", given the degraded condition of the local habitat alluded to in the Beardsell report;

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Mr Pitt also relied on his understanding (which was not challenged by the other parties) that the position of the Department of Sustainability and Environment is that, over the long term, the native vegetation biodiversity retention values of lots less than 4000 square metres are in practice lost. Relying on this basic proposition, Mr Pitt submitted that there would be no real practical benefit in seeking to reduce the number of lots so as to marginally increase the size of the remaining lots, given that even in this revised scenario the 9-10 proposed lots would still be short of the DSE minimum benchmark of 4000 square metres;

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In terms of the necessary process under cl.52.17 of doing the calculation of the relevant number of "habitat hectares" for our purposes here, Mr Pitt relied on the fact that this exercise had been done in the June 2004 Ecology Australia report, as confirmed by Mr McMahon as part of his written report. Given the complexity of this exercise, I will not seek to summarise the process, but instead note the conclusion from this process at page 10 of Mr McMahon's report that:

A total of 1.24 ha is required to offset the loss of Valley Grassy Forest on the subject land (Table 2). In addition 2 large and 15 medium old trees require protection and 85 trees need to be recruited. The approach taken to dealing with the offsets is to place resources into areas that support Valley Grassy Forest, and that in the present uncertain Net Gain environment, bring about demonstrable bi-diversity gains.

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Over the balance of page 10, Mr McMahon refers to five other sites in the vicinity of the subject land that are publicly owned and have viable populations of the threatened specie of the Eltham Copper Butterfly. Accordingly, Mr McMahon's practical recommendation was that a suitable financial contribution be made by the owners of the subject land to assist with the preservation of this threatened specie of one or more of these five other sites (I shall deal with this in more detail further below in my decision).

47 In terms of the findings of the Tribunal, subject to my comments further below about the merits of the proposed financial contribution by the owner/permit holder, I rely on and adopt the evidence of Mr McMahon presented at the hearing. Bearing in mind that I went to some trouble during the hearing to question Mr McMahon on the processes involved in his assessment of the net gain offset situation, I am satisfied that his methodology and conclusions are sound.

48 In particular, I am satisfied with his practical recommendation that there are substantial long term problems and limitations in seeking to preserve the biodiversity and habitat values of the native vegetation on the subject land, even if the number of proposed lots were halved, given that even 9-10 lots would still each be well below 4000 square metres in size, and also in light of the fact that the subject area lies in an established residential area where there has already been significant fragmentation of the native vegetation.

49 In terms of whether the proposal otherwise meets the general requirements of the ESO and of cl.52.17, I consider that the various submissions of Mr Pitt outlined above are more compelling than the submissions of Council and Mr Robinson. Accordingly, my finding is that I consider that the proposal satisfies the requirements of the ESO and cl.52.17. While from a purely environmental perspective it is unfortunate that the proposal will involve some degree of removal of native vegetation, from an overall "net community benefit" perspective I consider the proposal to result in an acceptable planning outcome, bearing in mind the "balancing process" referred to above because of the competing objectives of the Residential 1 zoning versus the ESO/clause 52.17. In reaching my finding here, I specifically rely on the following:

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I agree with Mr Pitt about the ambivalent nature of the 1997 Beardsell Report. As commented on further below, I also consider that the level of policy support for Council's submissions is substantially weakened due to the mixed messages in the 1997 Beardsell Report about the longer habitat/biodiversity values of the area in question. This is not a situation where there is clear cut policy support for avoiding further native vegetation removal in this locality;

•

in my view the proposal has adequately responded to the necessary "three step process" in dealing with the net gain issues;

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I accept that there seems real doubt whether the subject land now has habitat/biodiversity values of "regional" level significance, and I take Mr Pitt's point that even 9-10 lots on the subject land would still result in each lot being below 4000 square metres in size;

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with respect to Council's criticism of the Ecology Australia June 2004 report as giving insufficient weight to the removal of native understorey plants, I consider the important point here to be that I understand that the 2004 report makes this distinction based on the Applicant's arborist's distinction between those plants in a good versus those plants considered to be in poor condition and allocated a low retention value. Accordingly, I understand that those trees identified in the application plans as significant native trees to constitute those native trees seen (in terms of their attributes and condition) as being worthy of longer term preservation. I consider this a reasonable approach in the circumstances.

50 My findings here are consistent with the comments and findings of the Tribunal in the recent case of Villawood Properties Pty Ltd v Greater Bendigo City Council VCAT P1063/2005 & P1061/2005. That case involved two subdivision projects which both involved the necessary removal of native vegetation, throwing up very similar Clause 52.17 issues to those here. In Villawood the land area in question was large enough that DSE was involved as a referral authority.

51 In a wide-ranging decision:

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the Tribunal at page 21 placed weight on the view of Council and DSE that their common experience in relation to lots of a suburban size is that "...after subdivision all vegetation will be removed or become very degraded by future development, except land on the subdivision that may have been set aside as a reserve". Hence one of the key features of the decision is the Tribunal's endorsement of the general approach of looking to other sites to achieve the appropriate net gain offsets;

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in terms of who should finalise the details of how net gain offsets should in practice be achieved in relation to other sites, the Tribunal strongly endorsed the use of a secondary consent mechanism. At paragraph 49 the Tribunal stated as follows.

"We endorse the use of the secondary consent process to determine the detail of offsets. We consider that all offset plans should be prepared to the satisfaction of both the responsible authority and DSE as a referral authority. Requiring offset plans to be to the satisfaction of DSE ensures that the appropriate level of expertise is brought to bear in their assessment and approval, and it ensures that DSE as a referral authority is a specified body for the purpose of any applications for review under section 149 of the Planning and Environment Act 1987. We consider that as a matter of course the detail and approval of offset plans should be left to a secondary consent process rather than confusing the permit issuing process. The permit should specify the vegetation that may be destroyed and this should be expressed in terms of habitat hectares or number of large old trees in accordance with the framework. If a permit for vegetation removal is granted it is a given that the permit cannot be acted upon in this respect until an appropriate offset plan has been approved. And if appropriate offsets cannot be provided, then the vegetation cannot be removed."

52 One other matter which is worthy of further comment is the on-going role of the Beardsell report 1997. The Beardsell report plays a critical role in the practical operation of the ESO Schedule 1, given that the objectives of this schedule specifically refer to protecting and enhancing strategic habitat links/sites of faunal and habitat significance as identified in the Beardsell 1997 report.

53 While there may well have been worthy intentions behind linking the objectives of the ESO Schedule 1 to a specific report such as the 1997 Beardsell report, this seems a "double edged sword" in that the credibility of these objectives then "rise and fall" according to the ongoing relevance and practical benefit of the 1997 Beardsell report. In this regard, Mr Pitt criticised the 1997 report during the hearing as being not only out of date, but including predictions by Beardsell himself that the native vegetation in the locality in question would probably have substantially diminished habitat values from the period 2000 onwards. This created an ironic situation where notwithstanding the apparent intent by Council that the 1997 Beardsell report be used to protect the native vegetation on the subject land, in practice the aforementioned features of the Beardsell report led to Mr Pitt seeking to use the 1997 report at the hearing as "a sword rather than a shield".

54 Accordingly, it seems to me that both the ambivalent comments in the relevant sections of the Beardsell 1997 report and the passing of eight years since that report was published together provide a strong case that the current situation in this regard is unsatisfactory and this needs to be addressed. Addressing this problem by updating or removing the Beardsell 1997 report from the ESO would avoid the very clumsy and unhelpful existing situation where currently one needs to try to "double guess" how the relative habitat/biodiversity values for the relevant areas have changed between 1997 and 2006, and how those changes should be regarded in light of the comments and predictions made in the 1997 Beardsell report.

Merits of Proposed $40,500 Net Gain Offset Contribution

55 To summarise, I have dealt above with the more straightforward planning aspects of the proposal, and with the more complex issues of whether the proposal satisfies the requirements of the ESO and cl.52.17.

56 The last matter which I need to deal with now is the merits of Mr Pitt's practical suggestion that the necessary net gain offset under cl.52.17 be achieved by way of a $40,500 contribution by the owners of the subject land to the Responsible Authority, to contribute to the preservation of other native vegetation in other publicly owned reserves in the general vicinity. I have already referred above to the intent stated at page 10 of Mr McMahon's report that this financial contribution in particular contribute to the protection of the Eltham Copper Butterfly which is apparently listed as a "threatened taxon" under Schedule 2 of the Flora and Fauna Guarantee Act 1988, and in relation to which there are five sites with viable populations in the general vicinity. These five sites are listed at the bottom of page 10 of Mr McMahon's report.

57 Mr McMahon's evidence on this issue was that all five of these sites would greatly benefit from the injection of additional resources to protect the relevant native vegetation and the threatened butterfly, given the reality that this type of public reserve is, in his experience, usually under-funded. His general evidence here was that in terms of achieving the objectives of the ESO and of cl.52.17, he considered that modifying the number of or size of the proposed lots on the subject land would be a "bandaid measure", and instead he saw the preferable long term strategy as being the provision of additional resources in view of achieving a better long term outcome in relation to under-funded existing reserves of native vegetation in the vicinity of the subject land.

58 On the one hand, I consider the thrust of Mr McMahon's evidence regarding the merits of a financial contribution to prima facie have some merit. I also accept that an arrangement where the permit holder/owner can make a one-off financial contribution has the advantages of simplicity and greater certainty for developers.

59 On the other hand, I am mindful that I have no guidance from Clause 52.17 whether the proposed $40,500 financial contribution here is too low, too high or about fair where compensation is needed for a habitat hectare loss of 1.24 hectares and in addition 2 large and 15 medium old trees require protection and 85 trees need to be recruited. As conceded by Mr Pitt at the hearing, this $40,500 figure was put forward merely on the basis that a comparable contribution had been made as part of the recent granting of a subdivision permit for some nearby land at Collard Drive/Bellbird Road in Diamond Creek (being Permit No. 703/2003/14P). In other words, when the $90,000 contribution required under this Diamond Creek permit is pro-rated downwards to take account of the lower habitat hectare requirement here of 1.24 hectares, then this Diamond Creek $90,000 payment is reduced in the circumstances here to a net gain offset payment of $40,500.

60 However even this information is extremely scanty, in that I have no proper information to assist me to understand how the Diamond Creek $90,000 figure was arrived at, whether there was proper expert consultant input into that process, whether the permit applicant was under some pressure to accept the $90,000 figure, etc.

61 Furthermore:

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I see some important public policy issues whether or not it is appropriate for persons developing land with native vegetation net gain issues to be making one-off financial contributions rather than attending to the necessary offset works themselves. While it is possible there is a legitimate role in certain situations for developers to make a one-off financial contribution, the critical issue seems that there is proper accountability for how the money is used, and public confidence that the money will result in a real net gain result in terms of "works on the ground"; and

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Mr Pitt's proposed permit condition requiring the payment of the $40,500 goes against the comments I have set out above from the Villawood Properties case, where the Tribunal in that case expressly disapproved of an approach of trying to nail down the details of the net gain offset in the permit process. Rather, the Tribunal in that case supported using a secondary consent process to properly detail with the details of the offset at a later stage.

62 In light of the factors I have outline above, ultimately I see Mr Pitt's proposed payment of $40,500 (while perhaps well intentioned) as being overly simplistic and inappropriate. I see the better approach as being for there to be a process whereby the permit holder/owner must after the granting of the permit prepare a native vegetation Offset Plan, which can go into the details of how the offset will work. This Offset Plan must be then approved by Council - there seems no basis for DSE's approval to be required, as here (unlike in the Villawood case) DSE is not a referral authority.

63 Hence I have revised the draft Condition 3 proposed by Council to become a much more detailed Condition 2 in the conditions set out at the beginning of this decision. This new condition 2 is based on the equivalent condition prepared by the Tribunal in the Villawood case.

64 As alluded to above, I consider it would be premature for me to make the decision at this point whether or not a one-off financial contribution here as proposed by Mr Pitt is the best way to achieve the compensation needed for the loss of 1.24 habitat hectares and in addition where 2 large and 15 medium old trees require protection and 85 trees need to be recruited. However in light of the possibility of the Council at least considering this approach, I have set out some final comments below which may be of assistance should this situation arise.

65 Bearing in mind the requirements of the revised Sections 62(5) and (6) of the Planning and Environment Act 1987 which constrain permit conditions imposing development contributions, my first point here is that any such financial contribution would need to be framed so as avoid inadvertently breaching these provisions. Accordingly, it would appear that the "financial contribution" option would only apply where this contribution can be made to an existing native vegetation reserve that does not have any existing private contributions to its operating funds (ie the reserve would need to otherwise be funded by a "Minister, public authority or Council").

66 Secondly, if Council considers in principle that a financial contribution is appropriate, it would seem prudent for the Offset Plan put forward by the owner to include suitable information about the nature of the financial contribution. By way of suggestion, in this situation the Offset Plan could be required to deal with at least some of the following matters:

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the existing native vegetation reserve(s) which it is proposed have the benefit of the financial contribution;

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the land manager of those reserve(s);

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who shall receive and administer the financial contribution;

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evidence of the agreement of the relevant land manager(s) and any other relevant public body to the proposed financial contribution arrangement;

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evidence that the reserve(s) currently have operating funds without any other private contributions;

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what works will be carried out using the financial contribution to achieve the necessary off-set;

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the expected timeframe for those works; and

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how confirmation of the completion of the relevant works will be provided to the RA.

67 Thirdly, the "bottom line" with the "financial contribution" scenario seems having public confidence and accountability that the appropriate net gain works are actually carried out after the monies are paid, rather than the monies simply disappearing into a "black hole". Accordingly, if the owner is relieved of any further obligations simply by making the requisite one-off financial contribution, this suggests that real caution is needed to ensure that this does not inadvertently "let the owner off the hook" without a proper framework for achieving the relevant net gain offset.

68 In addition, there seems a strong argument that where an owner is making a one-off financial contribution, this contribution should be paid up front:

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as part of the approval of the Offset Plan; or

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at least before any relevant native vegetation is removed/before any Statement of Compliance for the subdivision is issued

before "the subdivision genie is let out of the bottle".

69 For the reasons set out above, my finding is that it is reasonable and appropriate for a permit to issue for the proposed 19 lot subdivision and associated removal of native vegetation.

70 As well as providing comments and findings on the specific proposal before me, it is clear from my consideration of the various issues in this case (and also from reading the Villawood decision) that these net gain and net gain offset issues are causing substantial uncertainty and problems for all stakeholders. In the Villawood decision at paragraph 40 the Tribunal in that case noted that a number of net gain cases have now come before the Tribunal and reflected that "Whilst some general principles are beginning to emerge from these cases, what is also emerging is the generally unsatisfactory and uncertain nature of conditions in permits relating to vegetation removal, protection and offset plans". In the following sentence, the Tribunal recommends that DSE prepare model or precedent conditions in the interests of consistency.

71 Whether it is model conditions or improvements to Clause 52.17 itself, clearly the planning system needs to find more effective ways to deal with this very important aspect of protecting our habitat and biodiversity values in our environment. Certainly one of my challenges in finalising this decision was the rather rudimentary nature of the key native vegetation draft conditions in the set of draft conditions provided by Council, which required substantial re-drafting.

72 In relation to Mr Pitt's proposal here for the net gain offset to be achieved by way of the Applicant's one-off financial contribution to the better management of other native vegetation reserve(s) in the vicinity, I consider that this general approach may well have some practical advantages and seems worth considering, particularly where the proposal in question involves a relatively modest sized site and where DSE is not a referral authority. However the "bottom line" with such a financial contribution is the need for there to be proper accountability that the contribution will result in a real and verifiable native vegetation offset outcome. In other words, for there to be public confidence in the process, care needs to be taken to ensure there are tangible offset outcomes which progress this important process of gradually improving the biodiversity/habitat values of relevant sites.