1. In P417/2009, the application under s 184 of the Planning and Environment Act 1987 is dismissed. The Tribunal does not approve any amendment to the s 173 Agreement dated 7 April 2003 to remove the land in Certificate of Titles Volume 10705 Folios 445, 446 and 447 from the application of the agreement.
2. In P1772/2009, the proceeding is adjourned to an administrative mention on 8 September 2009. By that date, the applicant must advise the Tribunal and responsible authority in writing:
   • whether it seeks to have the application withdrawn; or
   • whether the proceeding is ready for a hearing, or whether it requires a practice day hearing to consider its future conduct or the making of procedural directions.

Mr D A Klempfner of Counsel, instructed by Robert Daniels & Associates, Solicitors. Mr Klempfner called the following witness:

1. This is a proceeding under s 184 of the Planning and Environment Act 1987 seeking to remove land from the operation of a s 173 agreement.
2. The applicant owns three lots, comprising 10 units in total, in Country Club Drive, Safety Beach. The 10 units form part of an 18-unit time-share development that was completed in 2003. The applicant purchased the three lots as vacant land with the burden of the s 173 agreement already in place, and shortly prior to the construction of the 10 units. The time-share has not however been commercially successful, and the applicant wishes to facilitate the subdivision and sale of the 10 units as separate dwellings for permanent residents.
3. The s 173 agreement is dated 7 April 2003. It requires that the 10 units must remain within the three lots, and that the units must only be used for short-term accommodation (ie up to a maximum of 14 nights at any one time by a particular occupant or group of occupants)[1]. The agreement applies only to the three lots and 10 units owned by the applicant, so the effect of removing the land from the operation of the agreement would be to bring the agreement to an end.
4. Although there was a Council officer recommendation supporting the removal of the s 173 agreement from the three lots, the responsible authority itself refused to follow this recommendation and seeks to retain the agreement and restriction over the land.

1. The responsible authority did not contest the applicant's assertion that the time-share arrangements for the 10 units are not commercially viable at present. Nor did it seriously contest the expert planning evidence of Mr Borelli that there is no basis for maintaining the agreement over the three lots from a general planning "merits" perspective, having regard to relevant planning scheme policies, the standard of construction of design of the units (and their capacity to be used as separate dwellings), and general planning factors such as residential amenity and car parking.
2. The responsible authority instead simply argued that it still saw benefit in maintaining the restriction imposed by the s 173 agreement, which reflected and implemented a condition in the planning permit that authorised the development, and still reflected the purpose of the Special Use Zone and integrated resort development within which the land is situated.
3. I agree with the responsible authority that the test for the removal of a s 173 agreement (and the jurisdiction of this Tribunal under s 184 of the Planning and Environment Act 1987) is more limited than a simple planning "merits" review of what might now be approved under the planning scheme. The very character of a s 173 agreement is its ability to be registered on the title to land over an extended period as an effective covenant to bind future successors in title to its obligations[2], and to achieve more broadly based planning objectives. In order to remove land from the operation of a s 173 agreement, in the absence of the consent of all parties to the agreement, an applicant must demonstrate more than a change of planning circumstances as might justify an amendment to a planning permit or a case for rezoning of land.
4. It became evident through the applicant's submissions and the evidence of Mr Borelli that the applicant had treated the application under s 184 as being akin to a planning "merits" review. They conceded that they had not researched Council records to ascertain the underlying intent of the s 173 agreement when it was first required by permit condition for an integrated resort development. To this extent, the present application is somewhat misconceived and lacking in substance.
5. Section 184 of the Planning and Environment Act 1987 relevantly provides:
   1. Application to Tribunal

(3) A purchaser of land who is a party to an agreement, or an owner of land, may apply to the Tribunal for an amendment to the agreement to remove the land from the application of the agreement, if the parties to the agreement cannot agree that the agreement should be amended.

(4) The Tribunal may approve the amendment if -

(a) it considers that the land owner is not subject to any further liability under the agreement; or

(b) having regard to any relevant permit, or requirements under the Subdivision Act 1988, it considers it inappropriate that the agreement should continue to apply to the land and the owner.

1. The limitations in s 184 of the Planning and Environment Act 1987 have been considered in a number of cases referred to me by the parties, including Goodcorp v Melton Shire Council[3], Solid Investments Australia Pty Ltd v Greater Geelong City Council[4], and my own decision in Wodonga City Council v Kiene[5]. In Solid Investments, Morris P had noted in relation to s 184(3) and (4):

But hidden behind the limitations and subtleties, there may be scope to utilise these provisions in many circumstances in order to achieve sensible and fair planning outcomes[6].

Justice Morris however reiterated (following Goodcorp) that s 184 did not give the Tribunal an unfettered discretion. I certainly do not read his decision in Solid Investments as opening up s 184 to a general "merits" review of whether a s 173 agreement should be retained over land.

1. As noted in the earlier cases, it is clear from the wording of s 184(4) that there are two tests, one or other of which must be met in order for an application to succeed. The provision also uses the word "may" indicating that the Tribunal retains a general discretion in the matter.
2. As to the first test (ie whether the land is no longer subject to any further liability under the agreement), the applicant concedes it is liable under the agreement unless or until it is removed from the land. It follows that the application does not meet this first test.
3. The second test is whether, having regard to any relevant permit, or requirements under the Subdivision Act 1988, I consider it inappropriate that the agreement should continue to apply to the land and the owner. It was common ground that the reference to the Subdivision Act 1988 is not relevant in this case. However, there is a relevant permit (and perhaps two) that trigger the application of the second test. It is also perhaps interesting to observe the language used in s 184(4)(b). The test is not simply whether the Tribunal considers it appropriate (as a matter of exercise of general planning discretion) that the agreement may be removed from the land. The Tribunal must be satisfied that it is inappropriate that the agreement should continue to apply.
4. There are two relevant permits that I might have regard to for the purposes of s 184(4)(b). The first of these is Permit P42/97 issued by the responsible authority on 14 July 1997. This is the permit that initially allowed the use and development of the land for 18 group houses. Condition 5 of that permit required the then applicant to enter into a s 173 agreement to require the applicant to retain the 10 units nearest to the Atrium restaurant for

short-term accommodation use, and to ensure that these units were not subdivided onto separate titles. An agreement was entered into on 7 May 1998 to give effect to this condition. 5. The second and perhaps more relevant permit is Permit No. P02/2951 issued by the responsible authority on 27 December 2002. This permit provided a further and modified permission for the use and development of the 10 units that form the basis of this proceeding (still being 10 of the originally approved 18 group houses). Included within that permit was a condition 10, requiring a s 173 agreement to require the owner to retain the 10 dwellings for short-term accommodation use, and to ensure that the 10 dwellings are not subdivided into more than three separate titles. The present agreement dated 7 April 2003 gives effect to that condition, as well as superseding and ending the earlier agreement. 6. The second permit is obviously of more relevance as it is the permit that has led to the specific s 173 agreement before me in this proceeding. However, the earlier permit forms part of the historical record in relation to this use and development, and is perhaps relevant insofar as it demonstrates a consistent approach by the responsible authority to the use and development of this land over a period of time, involving a requirement for short-term accommodation, and a restriction on subdivision. 7. Indeed, the responsible authority took me to some of the historical material, including minutes of the Development Approval Special Committee in June 1997. From this material, it is apparent that the 10 units formed part of a broader integrated development comprising a golf course, restaurant and other "resort" components. A clear inference can be drawn from this material that the developers were able to achieve a higher density of dwelling development on the land on the basis that some of the units were offered for short-term accommodation to support or integrate with the other resort uses. It may well be, as the responsible authority submitted, that the development would not have been permitted in its existing form but for the relevant permit condition and the s 173 agreement. [I note in passing also that the operators of Atrium restaurant objected to the Council regarding the ending of the agreement for short-term accommodation, although they did not appear as a party in the proceeding before me]. 8. In Goodcorp, Senior Member Byard had refused to amend an agreement to enable further subdivision, as the permit there prohibited further subdivision and the amendment to the agreement would therefore be repugnant to the relevant permit. If a similar principle was adopted here, it can be seen that the relevant permit P02/2951 also seeks to prohibit further subdivision beyond the existing three lots for the 10 units, and requires that the units be maintained for short-term accommodation. The removal of the agreement from the land would seemingly be repugnant to the very intent and operation of the relevant permit. 9. In my view, the approach to be adopted is perhaps not as strict as might appear from the decision in Goodcorp. Whilst repugnancy with a permit is obviously a relevant factor (and perhaps determinative, as it was in Goodcorp), s 184(4) only requires that I "have regard to" any relevant permit. I agree with Morris P in Solid Investments that there may be some instances where discretion might still be utilised to remove the operation of a s 173 agreement from land to achieve a fair and sensible planning outcome. It is however a limited discretion. 10. I do not however consider that a fair and sensible planning outcome is achieved by the removal of this agreement from this land, and I do not consider it inappropriate that the agreement should continue to apply for the land and the owner. In addition to the relevant permits here militating against the exercise of discretion in favour of the applicant, I note that the owner and its predecessors have had the benefit of the permit for use and development of the broader integrated resort, and should therefore also accept the corresponding obligations unless there is a very good reason to the contrary. The applicant bought the three lots with knowledge of the s 173 agreement and its obligations, and this was no doubt factored into the purchase price. It is the only land encumbered by the agreement, so these three lots are obviously central to the purpose of the agreement. The agreement and its obligations are also of relatively recent origin (ie an agreement in 2003). 11. The responsible authority is in my view still clearly entitled to seek to maintain support for the underlying basis for the permit condition and agreement, namely an integrated resort development of the land. Indeed, the land remains in a Special Use Zone (SUZ4) with a stated purpose to provide for integrated recreational and residential development. The fact that the applicant has not been able to make a time-share use of the 10 units commercially successful is perhaps of some relevance, but not in my view to an extent that it overrides or counterbalances the original intent and obligations of the s 173 agreement. It may indeed be that there are other short-term accommodation opportunities that could be explored for the land (other than time-sharing), or the three lots could still be separately sold creating different opportunities for the short-term use of the 10 units (in three separate parcels) in the future. Commercial viability alone should not be a trigger for seeking to unshackle land from the constraints of a s 173 agreement. If that were the case, s 173 agreements would quickly cease to achieve their purpose of imposing longer term planning covenants over land. 12. For these reasons, I do not consider it inappropriate that the agreement should continue to apply to the land and the owner, and the application should be refused. This will have the effect of maintaining the s 173 agreement over the land in question.

1. At the hearing, the applicant informed me that it had a short time previously issued a separate application under s 87 of the Planning and Environment Act 1987, seeking to amend Permit P02/2951 to remove the condition requiring the s 173 agreement. The application had not been fully processed at the time of the hearing. I was advised that the intent of this further proceeding (P1772/2009) was to vest the Tribunal with sufficient jurisdiction to resolve the matter between the parties, although both parties agreed that the s 87 application would not lead to a materially different result depending on the outcome of the s 184 application.
2. The applicant conceded at the hearing that, even if the s 87 application was successful and condition 10 of Permit P02/2951 was deleted, this would not affect the fact that the s 173 agreement required by that condition would remain registered over the title to the three lots. Given the historical basis for the agreement, it was unlikely to therefore materially affect the outcome under the s 184 application. For this reason, the applicant indicated that, if the s 184 application was unsuccessful, it may withdraw the s 87 application.
3. Apart from making these observations, it is not for me to decide the s 87 application at this time, as it was not fully argued before me. As indicated at the hearing, I have therefore referred the s 87 application in P1772/2009 to an administrative mention so that the applicant can consider its position in relation to that proceeding based on my decision and reasons in the s 184 application in P417/2009.

[1] See clauses 3.1 and 3.2 of the Agreement.

[2] The special character of a s 173 agreement is discussed by me at some length in Wodonga City Council v Kiene [2009] VCAT 81.

[3] [2003] VCAT 911.

[4] [2004] VCAT 2356

[5] [2009] VCAT 81

[6] [2004] VCAT 2356 at paragraph 53.