[2022] VCAT 477
General information, not legal advice.
Victorian Civil and Administrative Tribunal
2022-05-02
Original judgment source is linked above.
Cardinia Shire Planning Scheme; Special Use Zone, Schedule 1 - Horticultural preservation; Land Subject to Inundation Overlay; Rural industry; Caretaker's house; Hemp farm and production of hempcrete; Protection of land of high agricultural significance.
Little v Cardinia SC [2022] VCAT 477
1 In application P94/2021 the decision of the responsible authority is affirmed.
2 In planning permit application T190712 no permit is granted.
Use and development of the land for manufacture and production of hempcrete and a caretaker's house.
Application under section 77 of the Planning and Environment Act 1987 - to review the refusal to grant a permit.
Clause 37.01-1 - use of land for Rural industry and Caretaker's house in the SUZ1.
Clause 37.01-1 - buildings and works associated with a section 2 use in the SUZ1.
Clauses 11, 13, 14, 15, 16, 17, 21.01, 21.03, 21.04, 22.05, 37.01, 44.01, 65 and 71.
The following land description is included in the council officer's report on the application:
'The subject site is located on the northern side of Murray Road, Vervale approximately 4.8 kilometres from Bunyip-Modella Road located east. The site is rectangular in shape, has a frontage to Murray Road of 160.9 metres and a total site area of 8.093 hectares.
The subject site is currently undeveloped and is not used for any purpose. Topography of the land is flat.
635 Murray Road (comprising 5 lots) adjoins the land to the east and is currently developed with a dam and is used for agriculture. The lot adjoining the subject site forms part of a broad-acre market garden and whilst there is no current crop, it forms part of a crop rotation which is required to rejuvenate soil and prevent disease (i.e. the site is part of an active horticultural operation).
1710 Main Drain Road (comprising multiple allotments) bounds the site to the north, north-west and west and is currently vacant.
Land in the vicinity is characterised by large rural allotments, many of which are currently used for agriculture (primarily crop raising).
In terms of development, there are examples of dwellings and large outbuildings however they are subordinate in the broader vicinity. Many parcels in the area are Crown Allotments however there are examples of multiple parcels in the one ownership. Terrain in the area is flat.'
An aerial image of the subject site and surrounding area is included below.[2]
1 The subject site is a vacant lot of just over 8 hectares in area. It is located in an area with some of the best agricultural soil in Melbourne.[4] The applicants propose to use the subject site to grow industrial hemp. In addition to this, they wish to construct a dwelling on the site and a shed in which to process the hemp and create a building material known as Hempcrete Panels.
2 The site is located within a Special Use Zone, Schedule 1 (SUZ1) in the Cardinia Planning Scheme (Scheme) and affected by a Land Subject to Inundation Overlay (LSIO). The SUZ1 is titled 'Horticultural Preservation' and has the following purpose:
To preserve land of high agricultural quality for horticulture and other farming activities.
To discourage non-agricultural and non-soil based uses establishing on soil of high agricultural value.
To protect the area from the encroachment of urban and rural residential type development.
To minimise the potential for conflict between residents and normal farming practices that are related to the conduct of agricultural activities.
To encourage sustainable farming activities based on whole farm and catchment planning principles on an individual and community basis.
3 Crop raising is an as of right use in the SUZ1 and, therefore, hemp growing does not require a permit. A dwelling is only permitted if it is the only dwelling on the lot and the size of the lot is at least 10 hectares. The subject site, at 8 hectares in size, is therefore not permitted to accommodate a dwelling.
4 A permit can be granted for a Caretaker's house[5] if it is the only Caretaker's house on the lot and it meets the requirements of clause 2 of the schedule, which relate to access and reticulated sewerage. Clause 2 also includes the following requirement:
If the use is a caretaker's house or dependent person's unit, an agreement must be entered into under Section 173 of the Act requiring the house or unit to be removed or demolished if the use ceases.
5 A planning permit is required in the SUZ1 for Rural industry[6]. The gross floor area of all buildings associated with a Rural industry use must not exceed 500 square metres. A planning permit is also required to construct a building or carry out works in the LSIO.
6 An application was made to the council for planning permission for use and development of the subject site for Rural industry and a Caretaker's house, and buildings and works in the LSIO. The Rural industry proposed is the making of the Hempcrete Panels and a 500 square metre shed is proposed to be constructed in which to undertake the required processes. The Caretaker's house is a four bedroom dwelling proposed to be located in the front section of the site, close to the shed.
7 The council refused the proposal on the following grounds:
1. The Caretaker's House is not reasonably required for the operation of a rural activity being conducted on the land.
2. The proposed manufacture of hemp based building products is an 'Industry' use that is prohibited in the Special Use Zone - Schedule 1 and Clause 51.02-2 of the Cardinia Planning Scheme.
3. The proposal is inconsistent with Clause 22.05 of the Cardinia Planning Scheme because it does not support soil-based food production, does not support the existing vegetable industry, and does not have regard to the role of the Westernport Green Wedge in maintaining food security.
4. The proposal is inconsistent with the objectives, land use policies, and the Precinct 1 vision and future directions/preferred land uses of Clause 22.05 of the Cardinia Planning Scheme.
5. The proposal will have the potential to limit the operation and expansion of adjoining and nearby agricultural uses and is therefore incompatible with adjoining uses.
6. The proposal is inconsistent with the purposes and decision guidelines of the Special Use Zone - Schedule 1.
7. The proposal is inconsistent with Clause 21.04-2 of the Cardinia Planning Scheme.
8. The proposal is inconsistent with Clause 14.01-1S of the Cardinia Planning Scheme.
8 The Todaro family owns 100 acres of land to the east of the subject site, as well as other land in the area. They are vegetable farmers who grow and supply a variety of produce to retail and wholesale markets in Victoria and New South Wales. They submit that the proposed use and development of the land is incompatible with the Scheme policies and provisions and that a house is not reasonably required for supervision of this use.
9 They are also concerned about the potential conflict of a dwelling constructed next to their farm and the impact on their ability to farm and expand their farming operations on the adjoining land.
10 The applicant contests the grounds of refusal and considers that the Caretaker's house is reasonably required for supervision of the crop and the hempcrete, and that the manufacture of hempcrete is a Rural industry that will add value to the horticultural enterprise and is an acceptable use of the land. I must determine the following key issues in this matter:
11 I must decide whether a permit should be granted and, if so, what conditions should be applied. Having considered all submissions presented with regard to the applicable policies and provisions of the Scheme and the many Tribunal decisions that have considered similar issues, I have decided to affirm the decision of the responsible authority and direct that no permit be granted.[7] Prior to setting out my reasons, I explain what is proposed and set out the relevant planning scheme policies and provisions.
12 The application was described in detail in the council officer's report at pages 28 and 29, as follows:
Approval is sought for the use and development of the land for Rural Industry and a Caretakers Dwelling.
These uses are in association with proposed industrial hemp growing on the subject site. A description of each component is described below:
Associated soil-based enterprise
The applicant has advised that the basis of this enterprise is industrial hemp growing on the subject site. This crop is grown externally and will occupy approximately 77% of the site (6.25 hectares) having regard to the proposed buildings under this application and approved dam under Planning Permit T200241.
The applicant has advised that it is expected that 2-3 crops will be harvested per year. In terms of volume, this equates to 15 tonne of product per hectare (15 x 6.3 = 94.5 tonnes per crop cycle).
Included in the application documents is an Authority for Low THC-Cannabis issued by the Department of Jobs, Precincts and Regions dated 29th February 2019. This approval has a 3 year expiry (the assumption is made there are opportunities for renewal).
In addition to industrial hemp, the applicant is also proposing passionfruit and avocado tree planting however this is considered supplementary and not a primary consideration with respect to the soil-based enterprise.
The applicant has provided details on the feasibility and viability of this enterprise as well as a Farm Management Plan which will be discussed in further detail in the assessment section.
Note: The use of the land for crop raising is as of right pursuant to Clause 37.01-1 (SUZ1). The Cardinia Planning Scheme does not specify the type of crop which can or should be grown therefore the chosen product (industrial hemp) is not a planning consideration.
Rural Industry
The Rural Industry component will be carried out in a proposed building setback 16 metres from the eastern boundary and 70.5 metres from the front title boundary. The building has a ground floor area of 495sqm and has a maximum height of 5.7 metres above natural ground level.
The floor layout comprises a fibre processing area, decorticator zone, hempcrete mixer and dry storage area.
Note: Additional storage areas are also provided and form part of a mezzanine level in this building which whist within the ground floor footprint, this equates to more than 500sqm in total area - a condition of approval will require amended plans to reduce the total floor area to no more than 500sqm.
Once the hemp is harvested, it is to be broken down to 3 main products: hurd, fibre and leaf. This involves a Decorticator which breaks down the primary produce. The building will also be used for the processing of the hemp hurd to form a building material known as Hempcrete Panels which is non-combustible. This involves the mixture of hemp hurd, lime and water and compressing the mixture. The fibre component of the hemp will be on-sold in its raw form which can be utilised for textiles and other products.
Hours of operations are Monday to Saturday: 8:00am - 4:00pm. A maximum of three (3) employees is required. The applicant has also stated that training associated with the building product will be carried out however Council considers this an ancillary component to the enterprise, and as such does not trigger planning approval in its own right having regard to the scale.
Caretakers Dwelling
A Caretakers Dwelling is proposed to be located 23.8 metres from the eastern boundary and 29.8m from the front title boundary. This building comprises a kitchen/living/dining area, bedrooms, bathrooms and a garage. This building will be constructed using screw piles. A septic area is located at the front of the dwelling.
A new driveway is proposed which leads to the Caretakers Dwelling and Rural Industry building. The applicant has advised that the Caretakers Dwelling will accommodate his entire family as this is to be a family run enterprise. The Caretakers Dwelling is required to establish the crop on the site and for security purposes and to also run the Rural Industry component.
13 During the hearing and in cross-examination of experts, there was considerable discussion and interrogation of the feasibility and viability of the hemp growing enterprise and the amount of hemp proposed to be harvested. Although the hemp growing itself does not require a planning permit, its success or failure is directly related to the proposal for a Caretaker's house and the ability to produce the Hempcrete Panels.
14 The purpose of the SUZ1 was included at the outset of this decision. The decision guidelines within the SUZ1, which the responsible authority must consider, as appropriate, before deciding on an application to use or subdivide land, construct a building or construct or carry out works, are:
15 The purpose of the LSIO includes to ensure that development maintains the free passage and temporary storage of floodwaters, minimises flood damage, responds to the flood hazard and local drainage conditions and will not cause any significant rise in flood level or flow velocity; and to minimise the potential flood risk to life, health and safety associated with development.
16 Decision guidelines of the LSIO include whether the proposed use or development could be located on flood-free land or land with a lesser flood hazard outside this overlay, alternative design or flood proofing responses, the susceptibility of the development to flooding and flood damage and the potential flood risk to life, health and safety associated with the development.
17 The flood level of the subject site is 700 millimetres above natural ground level. Melbourne Water did not initially object to the proposal. It then objected based on it being an unacceptable flood risk, causing potential danger to occupants and an unacceptable risk of property damage. Melbourne Water later revised its position and confirmed it did not object subject to conditions concerning finished floor levels and fill pads on the site to ensure that the buildings are sufficiently elevated. It did not participate in the hearing of this application for review.
18 Clause 51.02 (Metropolitan Green Wedge Land: Core Planning Provisions) also applies to the subject site and, consistent with the SUZ1, provides that use of the land for Industry is prohibited.
19 There are several State and local policies within the Scheme concerning protection of agricultural land and specific policies concerning the area of land within which the subject site is located, being the Westernport Green Wedge. The Tribunal was taken to the full suite of relevant policies within the Scheme during the hearing. I have included excerpts of some of these below:
Clause 11.01-R Green Wedges - Metropolitan Melbourne
The objective of this clause is to protect the green wedges of Metropolitan Melbourne from inappropriate development. Strategies include:
Clause 14.01-1S Protection of Agricultural Land
Objective
To protect the state's agricultural base by preserving productive farmland.
Strategies
Identify areas of productive agricultural land, including land for primary production and intensive agriculture.
...
Avoid permanent removal of productive agricultural land from the state's agricultural base without consideration of the economic importance of the land for the agricultural production and processing sectors.
Protect productive farmland that is of strategic significance in the local or regional context.
Protect productive agricultural land from unplanned loss due to permanent changes in land use.
Prevent inappropriately dispersed urban activities in rural areas.
Protect strategically important agricultural and primary production land from incompatible uses.
Limit new housing development in rural areas by:
...
In considering a proposal to use, subdivide or develop agricultural land, consider the:
...
Clause 14.01-2S Sustainable agricultural land use
Objective
To encourage sustainable agricultural land use.
Strategies
...
Support the development of innovative and sustainable approaches to agricultural and associated rural land use practices.
...
Encourage diversification and value-adding of agriculture through effective agricultural production and processing, rural industry and farm-related retailing.
Assist genuine farming enterprises to embrace opportunities and adjust flexibly to market changes.
...
Clause 16.01-3S - Rural residential development
Objective
To identify land suitable for rural residential development.
Strategies
Manage development in rural areas to protect agriculture and avoid inappropriate rural residential development.
Encourage the consolidation of new housing in existing settlements where investment in physical and community infrastructure and services has already been made.
..
Ensure land is not zoned for rural residential development if it will encroach on high quality productive agricultural land or adversely impact on waterways or other natural resources.
Discourage development of small lots in rural zones for residential use or other incompatible uses.
...
Clause 21.02 Cardinia Shire Key Issues and Strategic Vision
This policy includes the following relevant elements:
Clause 21.03 Settlement and Housing
This clause includes policy surrounding rural townships and rural residential development. It lists large and small rural townships and rural localities. Vervale is not listed in this table, although Cora Lynn and Iona, which are located to the west and east of Vervale are listed as rural localities. Strategies with respect to rural residential development include:
Clause 21.04-1 Employment
Key issues include:
Clause 21.04-2 Agriculture
The overview to this clause includes reference to the Koo Wee Rup Swamp area within which the subject site is located:
The annual gross value of agricultural production from the Port Phillip and Western Port Region is estimated at around $1 billion which is 15 per cent of Victoria's annual gross value of agricultural production. The average gross value of agricultural production per hectare from the Port Phillip and Western Port Region's farms is the highest of any catchment management region in Victoria and is around four times greater than the State average. ...
The Koo Wee Rup Swamp area contains a peaty clay soil which is recognised as being of high quality agricultural land of State significance. This area now produces 90% of Australia's asparagus crop and approximately 50% of this production is exported annually (Casey-Cardinia Agricultural Audit).
The image on the next page is included in this clause and identifies the area of high agricultural significance in white and hatched, which includes the subject site.
The objective of this clause is to maintain agriculture as a strong and sustainable economic activity within Cardinia. Strategies include:
Sustainability of agricultural land
With respect to Industry, clause 21.04-4 includes the following strategy:
Clause 22.05 Western Port Green Wedge Policy
This clause applies to all of the land included in the following map. The subject site is within the hatched area of Precinct 1. Precinct 1 is described as 'Agriculture, horticulture and soil based food production - Special Use Zone 1 (Existing Horticultural Preservation Area) of the Cardinia Planning Scheme'.
The policy basis for this clause includes:
The Western Port Green Wedge is home to important assets that have value in their own right and have a significant role to play in making Melbourne a great city. A large proportion of Cardinia's Western Port Green Wedge has some of the best agricultural soil in Melbourne, providing much of Victoria's asparagus, celery, leeks, herbs, silver beet and beef production. ...
Although these areas are set aside as non-urban land through the Cardinia Planning Scheme, green wedges are continually subject to intense pressures for urban development and change. There are often competing pressures from urban development, hobby farms, tourism, intensive agriculture and infrastructure because they are on the edge of the city which has a population of approximately four million people.
...
The vision for the Cardinia Western Port Green Wedge is:
The Cardinia Western Port Green Wedge will be a permanent green and rural area. It will remain an internationally significant biodiversity habitat, while also strengthening its agricultural and horticultural role to become a truly innovative and productive farming district. Agriculture, horticulture and soil based food production for the long-term food security of Victoria is at the heart of this vision.
...
It is policy that all use and development proposals within the green wedge area should, among other things:
The vision for precinct 1 is:
Precinct 1 will be the hub of agriculture, horticulture and soil-based food production within the Cardinia Western Port Green Wedge, taking advantage of its highly versatile soils, vegetable production (in particular asparagus), dairy and beef farming, other agricultural pursuits, potential access to Class A recycled water and the important role this precinct plays in food security. Land within the SUZ1 part of the precinct will be prioritised for soil-based agricultural and horticultural use and soil based food production with a focus on the consolidation of lots to support the economic viability of the agricultural and horticultural industry.
Opportunities for new, innovative or more intensive agriculture and horticulture and soil-based food production will be supported to ensure that the rich agricultural potential of the precinct is realised.
It will integrate biodiversity and agricultural outcomes by recognising ecosystem services which can improve agricultural efficiency.
Opportunities for linking the community with the local agricultural and horticultural industry will be identified and promoted to help establish food-based tourism within the precinct.
Future directions and preferred land uses include:
IS A CARETAKER'S HOUSE AN ACCEPTABLE USE OF THE LAND?
20 Caretaker's house is defined at clause 73.03 of the Scheme as:
A dwelling on the same site as a building, operation, or plant, and occupied by a supervisor of that building, operation, or plant.
21 As noted earlier, a Dwelling on the site is prohibited as the site is less than 10 hectares. If it were not prohibited, it would still be a permit required use. A permit can be granted for a Caretaker's house on the subject site if it is the only Caretaker's house on the lot. If a permit is issued, an agreement must be entered into under Section 173 of the Planning and Environment Act 1987 requiring the house to be removed or demolished if the use ceases.
22 The house is proposed to be occupied by the Little family, with the adults occupying the role of supervisor of the hemp farming, as required by the definition, and the hempcrete production.
23 The starting point for any consideration of the proposal must be the purpose and decision guidelines of the SUZ1. As set out above, the purpose includes the following:
24 While the use of the land for hemp farming does not require planning permission and will utilise the high agricultural quality soil, the construction and use of a dwelling, caretaker's or otherwise, is a non-soil based and non-agricultural use of this land. It introduces a residential use into the area and has the potential to create conflict, contrary to the purpose of the SUZ1. The decision guidelines provide a rubric within which to consider whether a permit ought to be granted for this use and development. They include the following:
25 Decision guidelines of the LSIO include whether the proposed use or development could be located on flood-free land or land with a lesser flood hazard outside this overlay.
26 In addition, the Scheme policies, as included earlier, provide overwhelming support for the purpose of the SUZ1 - to protect the land within precinct 1 of the Cardinia Western Port Green Wedge for horticulture and other farming activities, consistent with its high quality soil, and to maintain agriculture as a strong and sustainable economic activity in this area.
27 The policies also encourage new and innovative agriculture and horticulture and recognising the importance of emerging technology. They also actively discourage non-agricultural and non-soil based uses establishing on soil of high agricultural value; the encroachment of residential development; the potential for conflict between residents and normal farming practices that are related to the conduct of agricultural activities; the possibility of use adversely affecting soil quality or the land being permanently removed from agricultural production; and the potential for the use or development to limit the operation and expansion of adjoining and nearby agricultural uses.
28 It is for all of these reasons that the grant of a permit for a Caretaker's house needs to be carefully considered.
29 The hemp farming is proposed to consume approximately 77% of the subject site, with the remaining land utilised for the dwelling and shed and surrounds. While it was submitted that the majority of the land remains set aside for horticulture, this is not the intention of the zone or the policies related to this high value area. The intention is for the entirety of land of high agricultural significance to be 'preserved' for soil based horticulture and farming activities.
30 The decision guidelines therefore pose the question of whether the dwelling is reasonably required for the operation of the rural activity being conducted on the land. This is a significant question, as it implies that if the dwelling is not reasonably required it is unlikely to be considered acceptable.
31 This decision guideline was also included in the Farming Zone and has recently been removed. In support of this application, the applicants relied on the recent decision of the Tribunal in Jordan v Baw Baw SC[8], where a permit was granted for a dwelling on a small site in the farming zone. The Tribunal in that decision specifically referred to the removal of that guideline, noting that it 'has been the focus of many previous cases before the Tribunal'. The Tribunal was 'not persuaded by the applicant's submission that the application must be refused because the proposed dwelling is not essential to operating the proposed agricultural activity'.[9] Had the decision guideline remained in the Baw Baw Planning Scheme, the outcome of this application may have differed. I also note that the area comprising the dwelling and surrounds in that application equated to 1% of the site area. As always, each decision turns on its own facts and circumstances, but I consider there are significant differences between the policy and proposal in that case and the application now before the Tribunal.
32 The decision of Wiseman v Moorabool SC[10], considered how 'reasonably required' has been approached within other Tribunal decisions, and concludes that while a dwelling need not be found to be essential, it must assist the agricultural activity in a meaningful and practical way and contribute to achieving the purposes of the relevant zone and applicable policies:[11]
...The decisions refer to a dwelling assisting in a meaningful and practical way - how will a dwelling assist an existing, developing or proposed agricultural activity? It is not, however, the case that a dwelling must be found to be essential to support the operation of agricultural activity. Rather, a dwelling must contribute to achieving the purposes of the Farming Zone and applicable policies.
There are many proceedings before the Tribunal where a proposal for a dwelling has been advanced in a rural setting. Many have failed because they are proposed on small lots where bona fide agricultural pursuits have not been sufficiently demonstrated; perhaps otherwise described as speculative, token, doubtful or too uncertain for various reasons. Often the proposals were determined to have attempted to create, or would have created, a rural living lot that is at odds with outcomes sought for farming areas. Proposals that have succeeded have often been decided on the specific circumstances related to the site context and the nature of the agricultural activity, guided by the policy direction of the Scheme. The land size may be larger and there has been sound evidence of agricultural activity being undertaken or proposed on the land with real prospects of a dwelling adding value to an agriculture or horticulture in some way.
33 The applicant's submissions relied primarily on the role a house has to play in the management and monitoring of the horticultural use and the nature of the hemp crop requiring greater security. With respect to security, the applicant submitted that:[12]
It is further noted that hemp is a different crop. The ongoing security needs relating to a hemp crop is higher than most crops, as demonstrated by the licenses and monitoring required. Again, this demonstrates that a 24/7 on-site presence is certainly highly desirable.
34 Mr Suckling was also called on behalf of the applicant to give evidence with respect to the farm management plan, which includes a section titled 'Justification for a caretakers residence'. This includes the following paragraph, at page 5, which was also cited in the applicant's submissions:
A Caretakers House on a farm is a lot more than a place where people reside; it is the centre of the agricultural business. It is the administrative centre, office, meeting room, first aid shed, pharmacy, security and bio-security checkpoint, tea room and monitoring post for a 24 hour a day, 365 days a year business.
35 There was significant time spent during the hearing considering the likelihood of success of the hemp farming and the rigour behind the farm management plan and assumptions built into the likely success of the crop, how many crops per year, and financial projections. On the basis of the evidence before the Tribunal, there is a real question as to whether even two crops per year is practical, let alone three. At the time of the hearing there had been an unsuccessful trial crop, and no successful crop planted. There remain questions as to the practical requirements associated with hemp farming, including time and labour required, as distinct from time and labour required for the hempcrete production also proposed. Mr Suckling conceded that the majority of information within the farm management plan was provided to him by Mr Little and that he had not previously been involved or had experience with hemp farming, and had not interrogated the information to determine its accuracy.
36 Both Mr Suckling's evidence and the applicant's submissions concluded that it would be desirable to have someone living on the land to monitor the crops, respond to weather and provide security. Mr Suckling also conceded, however, that a farm can be viable without anyone living there but that this was the model he had been provided for this proposal. His description of a caretaker's house as the centre of the agricultural business, included above, could equally be applied to a small shed or office on the land that could be used for these purposes, together with technology that would be utilised in any case for 24 hour monitoring of a site.
37 Ms Todaro submitted[13] that simple portable buildings (including portable toilets) prove sufficient in providing all of these amenities for many farmers and other workers in this area and also offer flexibility if farming operations cease, change or expand. She also referred to the information provided with the initial application with respect to the manufacture of hempcrete explaining that this will occur from 8am to 4pm Monday to Friday (excluding public holidays) and on Saturdays when demand requires. In reviewing the process of manufacturing hempcrete, including decorticating the hemp and preparing the hempcrete, she extrapolated that each crop would require up to 3 work days to decorticate and little additional time to process into hempcrete.[14] She submitted that the need for an on-site caretaker cannot be justified to oversee an operation that works business hours only and with short intensive periods of work.
38 In any case, Mr Suckling confirmed in response to questioning that it was his evidence that the Caretaker's house was reasonably required for the hemp farming alone, without regard to the Rural industry use proposed. When asked for detail with respect to the hours required for the hemp farming, he was unable to provide clear details. He considered it likely that the crop would be irrigated two to three times per week, and sprayed when necessary, but was not clear as to whether any of this could be automated, and agreed that the labour could be carried out by people not living on the land.
39 Mr Suckling also confirmed that there were no formal requirements associated with hemp farming that required a physical presence on site. Ms Todaro provided a copy of the Agriculture Victoria form 'Application for an authority to possess, cultivate, and/or process low-THC Cannabis for non-therapeutic purposes'. This includes an explanation of security arrangements required. For cultivation sites, this includes lockable gates, barrier fencing and a preference to not be located on a public road and be close to a residence if possible. It requires signs to alert unauthorised persons that access is prohibited and that the crop is low in THC content and for access to be limited to authorised persons. If harvesting is not proposed to take place until after flowering or seed set, additional security measures, including regular surveillance is required. For premises used to store or process seed or harvested material, minimum security requirements include secure storage facilities for seed or harvested hemp material, maintenance of detailed records, that the premises must be lockable and exclude persons during processing who are not employees of the authority holder and that seed only be supplied to persons authorised to possess it.
40 While the house on this site is something that is desired by the applicant, I am not persuaded that it will add value to the hemp farming in a meaningful and practical way that makes it reasonably required for the operation of the rural activity. The nature of hemp farming does not require a constant presence on site and any issues associated with monitoring, security and weather can be managed by having appropriate plans and mechanisms in place[15]. Additionally, the construction and use of a dwelling does not contribute to achieving the purpose of the SUZ1 or the Scheme policies that support that purpose.
41 Ms Todaro submitted that many farmers in the area reside in the towns of Garfield, Bunyip, Koo Wee Rup and Nar Nar Goon which are all between 5 to 10 kilometres of Vervale and Cora Lynn. These towns are all listed as large rural townships in clause 21.03-4 of the Scheme. While these locations may not be preferred by the applicants, it is the case that there is land that is close enough to require minimal travel and more suitable for residential living than the subject site.
42 In Tyler v Cardinia SC[16], the Tribunal considered a proposal for a dwelling on land within the same SUZ1 as the current proposal, in association with a horse agistment business on the land. The Tribunal refused to grant a permit for a dwelling due to its inconsistency with the purpose and decision guidelines of the SUZ1, as follows:
22 In summary then, based on our analysis of the situation described above, we are unconvinced that the activities occurring on the review site:
- Are consistent with the purposes of the SUZ1 zone. For example, bearing in mind the threadbare information provided to us regarding the actual net after tax income being generated by the ventures taking place on the review site, we are struggling to see that what has been occurring can be described as "sustainable farming activities". This negative uncertainty about whether or not "genuine farming activities" are occurring on the review site is exacerbated by the fact that the SUZ1 purposes expressly reinforce that this is high quality agricultural land ie a valuable agricultural resource which should be appropriately utilised in terms of its potential. We also see a stark tension between what we regard as the "rural-residential lifestyle" nature of Mr Tyler and Ms Goodall's use of the review site vis-à-vis one of the express purposes of the SUZ1 being "To protect the area from the encroachment of urban and rural residential type development".
- Are consistent with the decision guidelines on Clause 6 of the Schedule to the SUZ1. In particular, we have major unresolved doubts whether it can legitimately be said that the range of farming activities being carried out by Mr Tyler and Ms Goodall on the review site require full time supervision by way of a new dwelling being built on the subject land. Rather, we see a strong and straightforward case that (excluding horse agistment) the type of farming activities taking place could readily be done by someone living in an established residential area who commutes to the review site, and that the choice of Mr Tyler and Ms Goodall to wish to live on-site is more a "rural-residential lifestyle" decision. Whilst we acknowledge the situation is more complicated with the horse agistment, we would see it as "the tail wagging the dog" to allow the new dwelling on the strength of this aspect alone, bearing in mind the fairly modest and financially uncertain nature of this agistment activity.
43 In the application currently before the Tribunal, I accept that the applicants intend to pursue hemp farming on the land and that they have undertaken significant research to support this pursuit. However, they had not, at the time of hearing, planted a successful crop on the land, resolved matters of water supply and irrigation, determined how many crops per year would be likely or viable, considered the need for crop rotation or established that this could be a viable or successful enterprise. In several Tribunal decisions, including Tyler, the success or otherwise of the farming venture was a primary consideration in the decision to grant or refuse planning permission.[17]
44 In this case, however, I am not certain that a dwelling would be acceptable even if the venture was successful. The dwelling has not been shown to be reasonably required for the rural activity, it will remove from use high quality soil (even if it is a modest amount) otherwise available for horticulture and the use of the dwelling has the potential to conflict with nearby horticultural uses.
45 Ms Todaro provided several examples of current use of the neighbouring land which is incompatible with having a dwelling in such close proximity:
99. We have irrigation pumps that we need to operate to water our crops, we use mobile machinery, and we have crews of harvest workers who don't have reason to work quietly. We also have a 'scare gun' which is used as required to scare birds from crops.
100. Guidelines prevent the use of scareguns within proximity of a residence, so having a new residence built close to our property will mean that if the occupants of the property are not sympathetic to our needs, we will have to watch our crops be destroyed by pests. Remembering that we are talking successors in title as well as the current applicants.
101. We use machinery to work the ground and this inevitably creates a lot of dust which is undoubtedly going to be unpleasant for the new residents. We also spread fertilisers with strong odours, and we spray chemicals using both ground equipment and aerial spraying.
46 While there are some dwellings in the area and future residents of a new dwelling would be expected to recognise they must adapt to the agricultural environment, the above examples indicate why it is not desirable to have a dwelling in this location.
47 Where a purpose of the zone is 'to minimise the potential for conflict between residents and normal farming practices that are related to the conduct of agricultural activities', and a decision guideline is 'whether the site is suitable for the use, building, works or subdivision and the compatibility of the proposal with adjoining and nearby farming and other land uses', there must be both a compelling justification for a dwelling or caretaker's house and a considered plan of how conflict would be minimised or managed if an application is to be successful. This is not the case with respect to this application.
48 Finally, it was also submitted that if the hemp farming was not successful, the SUZ1 requires entry into an agreement under section 173 of the Planning and Environment Act 1987 requiring the house to be removed or demolished if the use ceases, and that this should be sufficient to satisfy the Tribunal that the site would not become a rural residential lot without a horticultural use.
49 While this provision has clearly been drafted as an attempt to protect the agricultural value of the land, I do not consider that it is likely to achieve its aims. As submitted by the council, the wording of this provision is not sufficiently clear and invites an artificial situation where a use continues, to substantiate the maintenance of a house on the land. While an agreement could be drafted in an attempt to cover all contingencies, some of the potential issues raised with respect to this requirement included whether an owner could maintain the dwelling when hemp farming did not continue because, for example, there were still avocadoes and passionfruit being grown on the land; or whether a small percentage of the land was still being used for hemp farming but not the 77% proposed, or if the shed was being used for rural industry but no horticulture was occurring on the land.
50 The provision requires the dwelling to be removed. The applicant confirmed that it is intended to build the house on stumps and in sections so if the farming enterprise fails then the house can be removed. The SUZ1 does not require the shed to be removed if the use ceases and it does not take into account the extensive amount of fill required in order to elevate the buildings to the levels set by Melbourne Water. None of this fill is required to be removed, according to the provisions of the SUZ1. Therefore, removal of the dwelling (if the use does, indeed, cease) will not restore the land to agricultural production.
51 Having regard to the purpose and decision guidelines of the SUZ1 and the overwhelming policy support for protecting land in this area for use in horticulture and agricultural pursuits, and without a reasonable requirement for a caretaker's house for the proposed use or a plan of how to manage or minimise conflict with other farming uses, I find that a Caretaker's house is not an acceptable use and development of the subject site and a permit should not be granted.
IS THE MANUFACTURE OF HEMPCRETE CORRECTLY CHARACTERISED AS RURAL INDUSTRY OR INDUSTRY?
52 Rural industry is defined in clause 73.03 of the Scheme as:
Land used to:
a) handle, treat, process, or pack agricultural produce;
b) service or repair plant, or equipment, used in agriculture; or
c) manufacture mud bricks.
Land used for any of the following operations:
a) any process of manufacture;
...
If on the same land as any of these operations, it also includes:
a) storing goods used in the operation or resulting from it;
b) providing amenities for people engaged in the operation;
c) selling by wholesale, goods resulting from the operation; and
d) accounting or administration in connection with the operation.
...
54 A permit can be granted for Rural industry in the SUZ1 if the gross floor area of all buildings associated with the use does not exceed 500 square metres. Industry, however, is a prohibited use in this zone.
55 The relevant aspect of the definition of Rural industry, at (a), refers to agricultural produce. The proposed primary use of the land has been characterised as Crop raising, which is a use that does not require planning permission in the SUZ1, whereas use of the land for Agriculture requires a permit. However, within the land use terms in clause 73.03 of the Scheme, Crop raising is nested within Agriculture. Crop raising is defined as:
Land used to propagate, cultivate or harvest plants, including cereals, flowers, fruit, seeds, trees, turf, and vegetables.
56 These precise words are also included in the definition of Agriculture in the Scheme. Therefore 'agricultural produce' as referred to in the definition of Rural industry would encompass produce arising from crop raising. The understanding of the term 'agricultural produce' is also assisted by the term 'Agricultural production', which is defined in the Scheme as:
Any form of primary production of renewable commodities. It does not include extractive industry, Mineral extraction, or timber production from native forest.
57 As submitted by the council, it is well established that the real and substantial purpose of a use should be ascertained to determine its characterisation, rather than by reference to itemisation of activities, processes or transactions to be undertaken; that any particular use need not always fit into one (or more) of the uses defined in the Scheme and that analysis of the purpose of a proposed use may result in more than one separate and distinct purpose being revealed.[18]
58 There have been several Tribunal decisions considering this very issue of whether a use is properly characterised as Industry or Rural industry. While they serve to assist in the consideration of this matter, each matter turns on its own facts and circumstances and planning controls and policy.[19]
59 In all of these applications, as with that currently before the Tribunal, the land uses could have come within the broader definition of Industry as they involve a process of manufacture. However, the dispute has generally arisen because Industry is a prohibited use on the land in question and it is only if the proposal fits within the more specific term of Rural industry that it could be permitted on the subject land. If the use does fall into the more specific term, then the more specific term is the appropriate land use definition.[20]
60 The key question is whether the use proposed is best described as land used to handle, treat, process or pack agriculture produce; or land used for manufacturing where, on the same land, the use includes storing goods used in the manufacturing process or resulting from it.
61 As explained in the description of the proposal, when the hemp is harvested, it is taken to the decorticator which processes it into fibre, hurd and leaf. The output of the decorticator and subsequent process has been most comprehensively described within the legal advice initially provided to the applicant (who then provided it to the council) with respect to the characterisation of the use:[21]
62 The plans for the shed include a fibre processing area, decorticator zone, hempcrete mixer and a store/drying room. The store/drying room comprises approximately one quarter of the shed area.
63 In the decision of Rainsbury, the Tribunal referred to submissions that the processing of agricultural produce involves a continuum of activities. The Tribunal explained that the example was given of peas, frozen peas and pea soup, and that it was submitted that in each case a judgement has to be made about when in this continuum the resulting product ceases to be an agricultural product. Similarly, during the evidence of Mr Rowley and submissions of Ms Todaro, I was provided with examples of cabbage, packaged cabbage, coleslaw, sauerkraut and dim sims in an attempt to assess this same continuum.[22].
64 The applicant submitted that the processing of hurd with lime binder and water is a straightforward and limited process with minimal additions to the core agricultural product and comes within the definition of land used to handle, treat, process or pack agricultural produce. The council and respondents submit that the processing of these products to produce hempcrete is a process of manufacture.
65 In Garrett v Maroondah CC[23], the Tribunal considered a business involving the production of pre-fabricated kits for the construction, on other land, of cabins and sheds of various sizes and styles. The pre-fabricated buildings would be assembled and erected on other sites, while the manufacturing work to create the kits would be carried out on the review site. The wood used to create the kits is received by the applicants in the form of sawn or processed timber and does not come to them in log form. It was common ground between the parties that the kits involved a process of manufacture and were considered within the general term industry. The question before the Tribunal was whether it was better characterised as the more specific Rural industry as opposed to any other form of industry.
66 The term 'Agricultural production' had the same definition in the Scheme as it does now. It was significant, therefore, for the Tribunal to determine whether the material being handled on the review site was primary produce, in order to meet the definition of Rural industry. The Tribunal considered this as follows:
18. To be primary produce, something must be the product of primary production. In relation to wheat, a growing crop might be referred to as wheat, but it is wheat in the form of wheat grain that would normally be regarded as the primary produce. A crop of wheat ready for harvest would be, or perhaps more accurately become, primary produce when a harvester runs through the paddock taking the heads off the wheat stalks and then mechanically performing the functions previously achieved by threshing and winnowing to get rid of the husks and retain the separated wheat grains. Those grains, whether bagged or in bulk bins, are the agricultural produce.
19. If the wheat is then milled into flour, the flour is not primary produce. It is the produce of secondary, rather than primary production. If the flour is then baked into bread or cakes, that too has lost its characteristic of being primary produce. Again, it is the product of secondary manufacturing.
20. Similarly, logs are the product of timber production, but they lose their status as agricultural produce when they are taken to a saw mill and processed into sawn timber. That processing might involve various steps, in addition to actual sawing. There may be trimming, de-barking, seasoning or kiln drying, sorting and so on; as well as actual sawing. Nevertheless, it is the raw material, namely logs, that is primary produce. The sawn timber, being the product of secondary production, or secondary industry for that matter, is not primary produce but secondary. If such sawn timber is then turned into other products, whether the next stage can be regarded as "building materials" or not, it is still well past the stage where it was agricultural produce. Wooden toys or furniture are not primary produce, and neither is the sawn timber from which they might be made. The products of a joinery, such as window frames, benches and cupboards, might be regarded as still being building materials, but they are the product of secondary processing, and so is the timber from which they are made. Processed (sawn) wood can still be referred to as "timber", but it has ceased to be agricultural produce, whether it is destined to be used for constructing buildings, boat building, toy production, joinery, coffin making, furniture making or anything else.
67 Following this reasoning, the processing of the hemp to produce hurd, fibre and leaf would constitute processing of the agriculture produce (Rural industry), but the production of hempcrete panels would be considered a secondary process removed from the initial processing of agricultural produce and would no longer come within the ambit of Rural industry. It would be considered manufacture of the processed hemp and therefore come within the definition of Industry.
68 Conversely, the Tribunal in Chocolate Vine Pty Ltd v Mornington Peninsula SC[24] found that a permit should be amended to allow a chocolaterie, rather than a previously approved gin distillery, on the review site, associated with existing wine making and wine sales as a rural industry. An existing building on the land was to be converted to a chocolaterie. The Tribunal found that the fruit, nuts and flowers grown on the land, when combined with chocolate brought on to the site, would be considered agricultural produce handled, treated and processed as per the rural industry definition as follows:[25]
handled, as they must be removed from the trees;
processed, as they must be shelled, washed, cooked or heated and covered in chocolate; and
ultimately packed in preparation for sale.
69 The Tribunal found that while the use would also come within the ordinary definition of manufacture, and therefore Industry, the more specific term which applies is the appropriate land use definition.
70 Following this line of reasoning, the addition of lime and water to the hurd could be seen as processing within the Rural industry definition, without becoming a broader manufacturing, and therefore, industrial use.
71 There are at least two processes proposed to occur on site. The first is the processing of the hemp crop into hurd, fibre and leaf. This first process fits naturally within the definition of land used to handle, treat, process, or pack agricultural produce and would be considered Rural industry.
72 The secondary process is the manufacture of hempcrete by mixing the hurd with lime binder and water. While the applicant focussed on this aspect of the process only, the hempcrete production requires the compression and drying processes that follow the mixing process. They could be viewed as additional processes.
73 The initial legal advice provided to the applicant concluded that the hemp crop was the primary product and that 'the process of turning it into Hempcrete - mixing it with water and lime binder and then curing and storing this on site - is a treatment comprising processing of the primary product hurd, into a secondary product, hempcrete'.[26] This does not take into account the initial processing by the decorticator of the hemp crop into hurd, fibre and leaf.
74 The evidence of Mr Rowley considered whether the intensity and scale of the process should be taken into account in determining the characterisation of the use and ultimately concluded that this may be relevant to the merits of whether a use should be approved, as opposed to the definition. I agree.
75 The question is whether the real and substantial purpose of the hempcrete manufacture best fits within the definition of Industry or Rural industry. The council submitted that:[27]
...the hempcrete production enterprise proposed in this case is one of manufacturing. It involves the decortication of the raw produce, the mixture of the hurd with lime and water, and the curing/drying of the panels. It is submitted that this kind of activity goes beyond the kind of 'processing' of 'agricultural produce' that is within the contemplation of the 'Rural industry' definition. In the context of ordinary language, it is a manufacturing process that could be expected to be undertaken in an industrial zone, not in rural-type zones which prohibit 'Industry' (with the exception of 'Rural industry'). This includes consideration of the character of the use - manufacture of building materials like hempcrete lacks any kind of rural character that is intrinsic to the definition. It is unlikely to be the kind of activity that falls within the contemplation of the drafters of that definition.
76 While the applicant and the council both considered the decortication and hempcrete manufacture as essentially one process, I prefer the approach of the respondents who, having referenced the Garrett decision, explained as follows:
36. The Hemp Hurd, like flour, is a secondary product as the primary produce has been processed to make it. Likewise, the hemp fibre is a secondary product too.
37. Hempcrete panels are made in a separate process, where hemp hurd is mixed with lime binder and water, then poured into a frame or press to dry.
38. According to the definition of Rural Industry, it is agricultural produce (or primary produce) that must be handled, treated, processed, or packed in order to satisfy the definition of Rural Industry. Hemp hurd is not agricultural produce and nor is lime binder nor water.
77 I find that the processing of the hemp crop into hurd, fibre and leaf constitutes Rural industry as per the Scheme definition. The hurd, fibre and leaf are the result of the processing of the primary produce.
78 Although I acknowledge that the applicants see the decortication as simply a step in the process of manufacturing hempcrete, it as a separate, and initial, step that provides the hurd that is then required to undertake the further steps of mixing, compression and curing that are required to produce the final hempcrete product.
79 This initial process also provides the leaf and fibre from the hemp that are then intended to be on-sold without further processing. It is likely that they will be packed into a form fit for sale, and this fits clearly into the definition of Rural industry, as does the initial processing.
80 However, the processing of the hurd to become hempcrete falls more naturally into the definition of Industry which describes a process of manufacture that involves products stored on the land. The manufacture of hempcrete involves the use of hurd that has been decorticated and stored on the land and the curing of the finished hempcrete product which is proposed to be carried out within the drying room in the shed. As opposed to processing hemp and packing hurd, leaf or fibre (Rural industry), the production of hempcrete is a process of manufacture, where goods used in the operation of manufacture and resulting from it are also stored on the land (Industry).
81 While there was considerable discussion about the steps involved, the continuum, the difference between shredding cabbage in bags to sell and adding mayonnaise to cabbage to make coleslaw, ultimately the consideration returns to the real and substantial purpose of a use. I find that, unlike the initial processing of hemp to become hurd, fibre and leaf, the process of forming the hurd into hempcrete, including storage and drying, fits more appropriately into the Scheme definition of Industry and is therefore prohibited on the subject site.
IS THE PROPOSED USE AND DEVELOPMENT OF THE LAND FOR RURAL INDUSTRY ACCEPTABLE?
82 I have found that the manufacture of hempcrete is properly characterised as Industry and is prohibited on the subject land. However, the process of decorticating the hemp to become hurd, fibre and leaf, and subsequent packaging of those materials for sale or further processing does constitute Rural industry and would be permitted.
83 There is support within the Scheme policy for Rural industry, including in clause 22.05 supporting rural industry to allow farmers to value add to their produce and clause 14.01-2S that encourages diversification and value-adding of agriculture through effective agricultural production and processing, rural industry and farm-related retailing.
84 From the information provided during the hearing, mainly from Ms Todaro, with respect to the process of decortication, a decorticator can be brought on site and the hemp decorticated in the field. It is not required to be done inside a building. This is unlikely to offend the purpose or decision guidelines of the SUZ1 as it would not affect the agricultural value of the land and adds value to the primary produce.
85 A large area of the proposed shed was to be utilised for drying and storing the hempcrete and for mixing the hempcrete. It is unlikely that such a large shed would be required if the manufacture of hempcrete occurred off site. So too, the aspects of the proposal that included employees and hours of operation connected with the hempcrete manufacture are no longer required.
86 A building that is less than 200 square metres and less than 7 metres in height does not require a permit in the SUZ1 if associated with Crop raising.
87 Planning permission is required for use of the land for Rural industry or Store. If the applicant does intend to pursue hemp farming on the site and wishes to process the hemp into hurd, fibre and leaf and/or wishes to store the product on the land, planning permission will be required.
88 As this is different from what is currently proposed and is unlikely to require such a large building, a further application will be required to be made to the council in this respect.
89 For the reasons given above, the decision of the responsible authority is affirmed. No permit is granted.
Little
Cardinia SC [2022] VCAT 477