Figure 9: Valley Grassy Forest with depleted understorey, sourced from the evidence of Dr Hatton.

1. Dr Hatton's evidence was that the continuation of current management operations (status quo) is likely to result in the ongoing (albeit slow) decline of native species diversity and further erosion of the waterways.
2. Council says the applicants rely on the Conservation Plan and its implementation via a section 173 Agreement to support the proposal for subdivision and use and development of a dwelling. It says the Conservation Plan fails to demonstrate clear environmental outcomes with regards to management and enhancement of existing landscape features above what could be achieved currently and fails to justify how the conservation of the land would be enhanced by the proposed dwelling and creation of a new lot.
3. Council says the Conservation Plan works hard to justify the proposal on conservation grounds but fails to advance how the proposal supports and advances relevant policy, zoning purposes and overlay objectives. It says the southern half of proposed Lot 1 contains the largest area of connected remnant native vegetation/forest within the overall site which extends across the southern area of both proposed lots. The Conservation Plan notes this vegetation to be in good condition and that this main remnant patch of vegetation forms a vital vegetation link connected through private land to the core ecological network of the Macedon Regional Park.
4. Council says the proposal will fragment the land containing remnant vegetation of high ecological value and consider that more effective vegetation conservation and management would be likely to be achieved if the site was retained as a larger lot in single ownership. Council says the subdivision of the site results in two separate ownerships which would then require coordinated effort to protect and enhance environmental values and hence, needs something like a Conservation Plan to facilitate such coordinated action.
5. Council considers the conservation efforts rely too much on the existing patches of native vegetation and do not look to expand these areas in any meaningful way.
6. Council says the benefits of the conservation works do not outweigh the broader policy objectives and directions of the planning scheme with regards to biodiversity protection, particularly as they relate to the locality around Woodend and the Macedon Ranges.

1. The applicants place much emphasis on the Conservation Plan implemented via a section 173 Agreement as part of the proposal as a form of statutory incentive or obligation to provide for protection and enhancement of conservation values on the site. Their argument is reinforced with the proposed two lot subdivision utilising an existing fenceline as the new boundary and for the location of the dwelling on proposed Lot 1 within a cleared area close to the Boundary Road frontage that avoids impacts on native vegetation. The applicants say the proposal represents an improved outcome compared to current arrangements where the environmental values of the site continue to slowly degrade due to grazing pressure from both livestock and kangaroos.
2. Council says the proposal does not demonstrate any improvements than what could be achieved under current arrangements.
3. To support their respective positions, both parties drew my attention to numerous Tribunal cases where land management plans/conservation plans were promoted to support new development.
4. Some of these decisions include:
   • Rozen v Macedon SC [2007] VCAT 1814 ('Rozen 2007') which was for the development of a dwelling each on four crown allotments at 863 Ashbourne Road, Woodend that were within the Rural Conservation Zone. In that decision, the Tribunal granted a permit and considered the proposal supported environmental benefits in accordance with the zone. This decision was challenged in the Supreme Court because of issues with interpretation of the reference to cumulative risk in the interim guidelines for planning permit applications within open, potable water supply catchments. The review was successful, and the matter remitted to the Tribunal for further hearing.
   • Rozen v Macedon SC (includes Summary) (Red Dot) [2009] VCAT 2746 ('Rozen 2009') which was the re-hearing for the same development sought under Rozen 2007 and which the Tribunal found that only one dwelling be permitted. In this decision, the Tribunal did not accept arguments that allowing the dwellings would produce benefits for the environment from implementation of a revegetation/management plan. In this regard, I note the Tribunal's findings that:
     1. We do not accept this argument. We agree that the planning scheme acknowledges the opportunity to use the grant of a permit for a dwelling as the catalyst for achieving positive environmental outcomes. But when evaluating the positive environmental outcomes that may result from allowing one or two dwellings on this land, we have concluded that the greater chance of success and long term improvements will result if the land is retained in a single holding and managed as a single unit.
     2. The other clear benefit to the Rozens in allowing a permit for two dwellings rather than one, is the greater economic return they are likely to achieve if they sell the land. However, the financial return to a landowner is not a relevant planning consideration that we should be influenced by.
   • Ellis v Macedon Ranges SC [2021] VCAT 1469 ('Ellis') where the Tribunal directed the granting of a permit for a dwelling on a small parcel of land (2.4 hectares) in Newham located amongst other similar small sized lots in the Rural Conservation Zone. The Tribunal found the proposal would not be inconsistent with the surrounding character of the area and the dwelling would support environmental outcomes through a land management plan implemented via a section 173 Agreement.
   • ID Ross Watt Road Pty Ltd v Macedon Ranges SC [2023] VCAT 556 ('ID Ross Watt Road') where the Tribunal directed the grant of a permit for the re-subdivision of land at 9 Lawson Road, Gisborne from two lots into four lots within the Rural Conservation Zone. The Tribunal found the proposal would assist with conservation improvements through a land management plan implemented via a section 173 Agreement. The Tribunal recognised the value of a land management plan referenced in the zone as a tool the can be beneficial to ensuring landowners understand their obligations towards environmental improvement.[6] Relevantly, the Tribunal identified support for the proposal within the planning scheme, at that time, which included reference to the land being located within both the Living Forests and Southern Catchments where strategic support was found for encouraging rural residential development only in the more fragmented Southern Catchment where detailed land capability studies demonstrate there is no negative impact on water quality or agricultural uses.[7] With respect to biodiversity protection, the Tribunal referred to policies under the then Clause 21.05-1 and Clause 21.03-3 of the planning scheme which referred to encouraging or providing limited support for residential development in the Living Forests, the Cobaw Biolink and the Southern Catchment areas where revegetation and environmental improvement works will achieve positive environmental outcomes.[8]
   • Kapiris v Macedon Ranges SC (includes Summary) (Red Dot) [2012] VCAT 1969 ('Kapiris') which was a case highlighted by Council for a dwelling on a 16 hectares allotment in Macedon which was also in the Rural Conservation Zone. In that case the Tribunal refused the grant of a permit where I note the Tribunal refers to the context of land within an area containing other smaller lots at paragraph 27:

Not unexpectedly, the greatest pressure for an intensification of development is likely to occur in areas close to and with convenient access to the Calder Freeway .......... Further, such pressure is also likely in an area such as this with existing similar sized lots containing dwellings, where it may be argued that one additional dwelling will in no way harm the integrity of the non urban area. However, it is the incremental impact of individual changes which eventually undermines both the integrity of the non urban rural zones and the underlying policy of constraining development within much more intensively subdivided residential townships or designated rural living areas. Eventually each individual approval cumulatively forms part of an argument to allow yet one more dwelling.

I also note at paragraph 30 the Tribunal's reference to the relationship between a development and conservation activity:

.... it is really a question of whether the improved environmental outcomes referred to above can be achieved without a dwelling on the land, and whether it is necessary to reside on the land in order to better manage vegetation, control pest plants and animals and undertake other land conservation and rehabilitation activities. While we accept there are potential management benefits in living on the land and doing tasks on a day-to-day and perhaps spontaneous basis, we are not persuaded that those benefits outweigh the broader policy outcomes seeking to limit dwellings on small lots in rural areas of the municipality.

1. I note that with these Tribunal cases, they are all decisions that are based on their individual merits. However, they are decisions based on earlier version(s) of the planning scheme. Amendment C150 was gazetted on 24 August 2023 which replaced the Local Planning Policy Framework ('LPPF') of the planning scheme with a new MPS at Clause 02, local policies within the PPF at Clauses 11 to 19 and other changes to accord with changes to the Victoria Planning Provisions introduced by Amendment VC148 in 2018. None of the cases referred to involve the version of the planning scheme since the gazettal of Amendment C150 in August 2023.
2. Relevantly, policies that provided support for dwellings and subdivision within areas around the Macedon Ranges on the basis of providing for environmental benefits have changed or been replaced with policies and strategies, particularly at a local level under Clause 12.01-1L, Clause 14.01-1L and Clause 14.02-1L that for the site results in limited strategic support for the proposal before me.
3. I am reminded of the provision under Clause 71.02-2 relating to 'Operation' of the PPF that:

The consistent application of planning policy over time should achieve a desired outcome.

1. In this case, I find the proposal is inconsistent with the strategies of Clause 12.01-1L in that the two lot subdivision and proposed dwelling fail to achieve consistency with:
   • avoiding the further fragmentation of existing lots to protect areas of high ecological value and not encouraging larger lots in areas where there is significant remnant native vegetation. The subdivision proposes to utilise an existing fenceline, with little regard to the environmental features of the site and results in a poor environmental response by separating the patches of remnant native vegetation and waterways into potentially separate ownership. Such a response would drive the need for a land management plan and for it to be registered on the titles to ensure that land management can be integrated and coordinated. This arrangement is one which I find would not result in an acceptable outcome; and
   • not achieve limiting residential development on existing lots within the Living Forest area.
2. I note the policy also includes a strategy encouraging the restructure and consolidation of lots to support enhanced biodiversity outcomes and that the site is not located within the Cobaw Biolink area for which there is a strategy supporting residential development which provides for revegetation and environmental improvement works. Despite Clause 12.01-1L including 'Policy guidelines' relating to environmental improvement works, the strategic directions of the planning scheme do not support the subdivision of land that fragment existing lots or the development of dwellings on smaller lots within the Living Forest area when a larger lot exists which can retain remnant native vegetation and be capable of management in an integrated manner.
3. Similarly, under Clause 14.01-1L the proposal is inconsistent with the strategy relating to discouraging the creation of additional lots in the Northern Catchment area to maintain agricultural productivity.
4. Similar to the findings of the Tribunal in Rozen 2009, I am not convinced that improved land management for environmental outcomes are necessary to be accompanied by development. The views of the applicants and the evidence of Dr Hatton that the proposal provides a catalyst for improvement of environmental values on the site via a Conservation Plan implemented as a restriction on the titles is acknowledged. However, in my view, such an arrangement would be required because of the fragmentation of the site into separate lots and potentially separate ownership that would then require some coordination to be provided to achieve integrated management of the land.
5. I agree with the Tribunal in Rozen 2009 that the greater chance of success and long-term environmental improvements will result if the land is retained in a single holding and managed as a single unit and that the financial return to a landowner is not a relevant planning consideration that I should be influenced by.
6. I agree with Council when it says:

Ultimately, the environmental activities that are proposed can occur under the existing arrangement within the one lot ownership and without the need for fragmentation and subdivision of the land or development of a residential dwelling which would undermine and reduce the conservation and environmental value of this land.

1. Regarding agriculture, there is uncertainty about this activity. The site is currently used for agriculture through the presence of grazing. However, the applicants and Council are in the process of determining whether agricultural activity on the site has existing use rights with an application for a Certificate of Compliance before Council under section 97N of the Planning and Environment Act 1987 (Vic).
2. Irrespective, I also note that policies relating to agriculture[9] do not encourage the fragmentation of land where it is or could be used for agricultural purposes.
3. The proposed subdivision does satisfy the 40 hectare minimum lot size. I accept that, the architects of the planning scheme had in mind when settling on 40 hectares as a minimum lot size in the RCZ1 that such an area would be acceptable for this zoning. However, the zone controls establish the discretion for a permit application and the requirements for such an application that would need to be responded to and satisfied. However, the decisions about such applications must also take into account the policy framework relevant to the matter and the associated issues.
4. In this case, I find the proposal does little to assist agricultural activity and how that would relate to providing for the protection and enhancement of environmental values.
5. In addition, I am aware in policy relating to 'Catchment planning and management - Macedon Ranges' under Clause 14.02-1L which applies to land in the Northern Catchment area that little support is provided for subdivision where a strategy seeks to encourage retention of larger lots where there are waterways.
6. With respect to landscape values, the site is in the SLO1. I note the dwelling on proposed Lot 1 is located on a part of the site close to its western end near Boundary Road. It is proposed to be sited on a flat and cleared part of the site that is relatively exposed towards the west and north-west.
7. Regarding effects on landscape values, I am satisfied the dwelling will not have adverse impacts given it would be screened from views from Mount Macedon to the south by the presence of the existing Monterey Cypress windbreak planting and that impacts on views from Hanging Rock to the north-west would be limited given the distance from this iconic landscape feature.
8. In an overall sense and despite the proposal having some benefits, I find the proposal is inconsistent with the zone, policy and physical contexts relevant to the site and environmental outcomes for the area and does not represent an acceptable outcome.
9. The RCZ1 does provide opportunities for proposals such as this, but they are required to be considered taking into account the policy framework relevant to the proposal. In this regard, I find the proposal will fragment the environmental features on the site including remnant areas of native vegetation and the waterways that traverse the site. This is not an acceptable environmental outcome. Good integrated land management would be jeopardised by the proposal because it would need to rely on the Conservation Plan as an encumbrance on the respective titles for the protection and enhancement of these values.
10. Whether it is the costs of undertaking environmental works that is driving the proposal, noting the applicants suggested the cost of work could be up $200,000 or the need to provide a statutory obligation on two separate titles to guarantee implementation of the works, I find the disadvantages of the proposal are too insurmountable. I agree with Council that there is no overriding benefit with the proposal that cannot be achieved under the status quo with retention of a large site under single ownership implementing the same plan.
11. Degradation of the environmental values of the site are recognised in Dr Hatton's evidence as slow. I consider that environmental improvement works undertaken on a slow but consistent trajectory would be of benefit. They would not be impossible and can be appropriately supported by other means such as through various environmental grants and the like without the need for development to provide the catalyst. I consider this can occur now.

1. For completeness, although I have found the proposal unacceptable, I will provide commentary on the issue of wastewater effluent disposal.
2. During the hearing I found the Land Capability Assessment, May 2023 prepared by Paul Williams & Associates Pty Ltd ('LCA') did not include references to the more recent Environment Protection Authority Guideline for Onsite Wastewater Management, May 2024 ('GOWM'). An interim order dated 31 March 2025 provided an opportunity for post-hearing submissions on this issue.
3. Both parties responded advising that the methods, conclusions/findings and recommendations given in the LCA report are not affected by the new 2024 Guideline and remain unchanged.
4. The site is in the ESO4 and protection of water quality from development within the Eppalock Special Water Supply Catchment is important. A permit requirement is triggered for buildings and works (noting that subdivision is exempt because each lot is greater than 40 hectares in size). An application is also required to be referred to the relevant water authority as a determining referral authority under Clause 66.04 of the planning scheme.
5. In this case, the proposal was referred to Goulburn-Murray Water and Greater Western Water. I note that these authorities did not object to the proposal subject to conditions.
6. I am also aware of the Minister for Water's Guidelines for Planning permit applications in open, special water supply catchment areas, 2024. I have had regard to these guidelines. They have been adopted for the purposes of section 60(1A)(g) of the Planning and Environment Act 1987 (Vic).
7. The guidelines seek to protect the quality of source water for drinking water supplies, general domestic uses, and other beneficial uses, using a risk-based approach, while supporting appropriate development within special water supply catchment areas.
8. The guidelines apply to all open water supply catchment areas declared to be a special water supply catchment area under Division 2 of Part 4 of the Catchment and Land Protection Act 1994 (Vic) and are a relevant consideration in assessing a permit application to use and develop land in special water supply catchment areas. The Lake Eppalock Water Supply Catchment was declared on 19 July 1960.
9. The guidelines contain the following relevant policy requirements:
   • A density of dwellings requiring onsite wastewater disposal to no greater than one per 40 hectares.
   • Consideration of development regarding whether it presents an unacceptable risk including cumulative risk to the catchment.
   • Preparation of an Onsite Wastewater Management Plan ('OWMP').
   • Vegetated corridors and buffer zones along waterways to minimise erosion and sedimentation impacts.
10. In addition, policy relating to 'Catchment and water quality' under Clause 02.03-4 identifies the value of water for both agricultural and domestic purposes and establishes strategic directions for Council to mitigate the impacts of development and use of agricultural land on water quality in the catchments and avoid growth outside township boundaries in Special Water Supply Catchment areas. This policy aspiration is supported by more detailed policy under Clause 14.02-1L, as relevant, including:
    • Restrict development and growth in the Eppalock designated water supply catchment area.
    • Protect water quality in the catchments by discouraging development on un-sewered land parcels.
    • Discourage land use and development in Special Water Supply Catchments and elevated areas that has the potential to reduce water quality.
    • Ensure the design of effluent disposal systems is suitable to the soil type and topography of the site.
    • Encourage retention or creation of larger lots where there are drainage lines, waterways and steep slopes.
11. I note that Council has adopted a Domestic Wastewater Management Plan in 2019 and consider that, given the lack of objection from the referral authorities, the position of Council that they do not have concern with the wastewater effluent treatment and disposal component of the proposal and the LCA demonstrating that the proposal is satisfactory and well distanced from waterways, I find impacts on water quality not significant.

1. For the reasons given above, the decision of the responsible authority is affirmed. No permit is granted.

[1] Section 4(2)(d) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) states a failure to make a decision is deemed to be a decision to refuse to make the decision.

[2] The submissions and evidence of the parties, any supporting exhibits given at the hearing and the statements of grounds filed have all been considered in the determination of the proceeding. In accordance with the practice of the Tribunal, not all of this material will be cited or referred to in these reasons.

[3] EVC refers to Ecological Vegetation Class which is a description of different types of native vegetation communities across Victoria.

[5] Acknowledging areas removed associated with domestic zones and farming infrastructure.