Lancaster & Anor v Yarra CC [2009] VCAT 1574 (7 August 2009)

1. In terms of the nature and the site and locality, the subject land is located east of Nicholson Street, on the north side of Henry Street. It is one of a row of narrow terrace style lots with the site having an area of only 78 square metres, and a very narrow frontage of 4.28 metres. It is common ground that a single owner until recently owned a significant number of these properties on the north side of Henry Street, which were all allowed to some extent to fall into disrepair.
2. I refer understand that these various properties have more recently been separately sold as part of dealing with the estate of the former owner, and some degree of redevelopment of these properties is now occurring.
3. A critical feature of the situation here is that the site is not only zoned Mixed Use Zone but also affected by a Heritage Overlay No.334 and also an Environmental Audit Overlay ("EAO").
4. On the strength of this EAO, Council has imposed the abovementioned Condition 3, which the Applicant opposes. The Applicant believes Condition 3 to be unreasonable, excessively onerous and unnecessary.
5. The hearing of this matter came before me on 4 June 2009. At this time I heard submissions from the advocates listed above, plus I was shown a good range of photos and helpful information.
6. I see the three main issues in this case as being:
   • should Condition 3 be deleted on the strength of likelihood that the requirements of the Environment Audit Overlay operate independently of the permit approval process?; or
   • should Condition 3 be deleted applying the relevant criteria which I set out in my previous decision of Norman & Tinney v Yarra CC [2008] VCAT 309?; or
   • if the answer to the above questions is "No", should Condition 3 at least be modified to require a non-statutory audit through a more informal process.
7. My overall finding has been that, in the particular circumstances in question here, subject to one proviso, I do not see any justification here for deleting Condition 3 or modifying it so as to only require a more informal audit. In particular, this case has involved a very run-down property requiring major renovations, with significant exposure of the soil. This is the type of case where in my view the fairly rigorous requirements of Condition 3 seem appropriate. Contrast this with some of the other relevant cases where only minor residential works were involved, with little or no soil disturbance. I am also conscious that the current owners bought the subject land fairly recently, with the Environmental Audit Overlay in place already, and hence should have been well aware of the extra complications posed by the EAO.
8. The proviso is that I have made one drafting change, as follows. Condition 3 currently requires the necessary certificate or statement of environmental audit to be prepared to the satisfaction of the Responsible Authority. I see the use of the words "to the satisfaction of the RA" as useful in providing an ability for Council to oversee the process, knowing that either party can then bring the process back to the Tribunal if there is a dispute whether Condition 3 has been satisfied. However clearly we do not want a situation where the statutory environmental auditor appointed is requiring something that is inconsistent with Council's requirements. To address this, I have added extra words to make it clear that if this inconsistency arises, the directions/requirements of the statutory environmental auditor prevail.

1. In this Norman & Tinney decision I referred to the previous decisions of Mary Poulakos v Port Phillip City Council (VCAT Ref P3446/2003), together with Bird de la Coeur Architects v Yarra CC [2003] VCAT 1720. In the Poulakos decision, Member Komesaroff deleted a somewhat similar contentious environmental improvement permit condition, relying on the past use of the site only for office and residential purposes. In the Bird de la Coeur Architects decision it appears that (unlike in the Poulakos decision) there was in fact no EAO involved, but the Tribunal did make some passing comments regarding the expensive nature of environmental audits and hence the need for caution in potentially applying a permit condition that imposes the need for an environmental audit.
2. In Heavenly Queen Temple Society Inc. v Maribyrnong City Council 20 VPR 49, again there was no EAO was involved. The Tribunal again made passing comments as to the need to assess each situation on its own merits, in terms of assessing the appropriate way of managing any contamination risk arising from any one site.
3. More recently, in Domsal Pty Ltd v Moreland City Council [2007] VCAT 968, the practical issue was validity of a similar "Certificate or Statement of Environmental Audit" type permit condition, but where Moreland City Council was seeking that this requirement be met prior to Council even making a decision on the permit application. There was also a CAO involved in the circumstances. The Tribunal held that it was "illogical, inconsistent and inaccurate ..." to require that a Statement or Certificate of Environmental Audit be provided prior to Council even reaching a decision on the permit application. Because the Tribunal in this situation was more being asked to deal with this "timing issue", Member Komesaroff was not actually required to reach any finding whether, once Council had made its decision, it would have been a valid permit condition for Council to have then required that a Certificate or Statement of Environmental Audit be obtained before the approved development was commenced.
4. The decision of Junction 1 Pty Ltd v Darebin City Council [2009] VCAT 277 involved very similar circumstances. Member Rickards in this matter directed Darebin City Council to simply process and reach a decision on the permit application without any requirement for the Applicant to provide a Statement or Certificate of Environmental Audit prior to that decision being made.

1. There was some discussion at the hearing regarding a possible compromise whereby Condition 3 would be modified to require some form of more informal environmental audit rather than a statutory audit process.
2. Subject to one proviso, I am not satisfied this is an appropriate course in the circumstances here.
3. My primary reason for taking this approach is that, as mentioned above, the works in question here are major renovations which involve substantial exposure of the soil on the site. There is also the further complication of the exposed back yard area more recently having a junk yard type of role. I am struggling to see the merits of a more informal process when this seems the type of major project where there does seem real potential for environmental/health risks in terms of the level of soil exposure, the junk yard aspect and the historical and on-going industrial activities in the locality.
4. Contrast this with the circumstances in question in the recent decision of Architype Australia Pty Ltd v Yarra CC [2009] VCAT 1437. This involved a similar contentious permit condition and was also a site in Fitzroy involving Yarra City Council. In the final result, Member Rickards modified the permit condition to allow for a more informal soil testing process.
5. However the key difference is that the existing buildings in question covered the entire site being considered by Member Rickards and there was a concrete slab throughout. The works involved were also quite limited - it was merely proposed to reconstruct a façade of the building in its original location. The estimated cost for this reconstruction was estimated to be no more than about $10,000 and only 3.5 square metres of the floor area of the site would be affected.
6. While it is more a secondary factor, it is very unclear to me what status this type of more informal soil testing arrangement would have if, at a later stage, the owner of the property is forced to comply with the strict requirements of the Environmental Audit Overlay. To my knowledge none of the cases I have cited above have addressed this difficult issue.
7. The proviso is that I have allowed a minor drafting modification of Condition 3 to make it clear that, if there is disagreement between the Council and the appointed statutory environmental auditor, the directions/requirements of the latter prevail. Clearly we need to avoid a situation where potentially the owner has to satisfy two parties that take different positions on any one issue.