Goulburn-Murray Rural Water Corporation and Central Highlands Region Water Corporation

Mellington & Ors v Hepburn SC [2012] VCAT 651

1. Pursuant to section 127 and clause 64 of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 the permit application and the application for review are amended by changing the name of the permit applicant to:

Mr Gregory Mellington, Ms Lyn Gerdes and the Estate of Simon Gerdes

1. The decision of the Responsible Authority is affirmed. In permit application 10274 no permit is granted.

For Mr Gregory Mellington, Ms Lyn Gerdes and the Estate of Simon Gerdes

Mr Neil Haydon, town planner and solicitor from Beveridge Williams & Co Pty Ltd. He called the following witness:

• Mr John Lawry, engineer and wastewater consultant of EWS Environmental.

Mr Alan Todd, a town planner from Hepburn Shire Council.

For Goulburn-Murray Water Corporation and Central Highlands Region Water Corporation

Mr John Glossop, a town planner from Glossop Town Planning. . He called the following witness:

The applicants seek to refurbish a derelict dwelling (building) and use it for dwelling purposes. The dwelling would rely on tank water and an on-site wastewater treatment and disposal system.

Review of a failure of the Responsible Authority to make a decision within the prescribed time made under Section 79 Planning and Environment Act 1987.

Zones and Overlays applying to the land under the Hepburn Planning Scheme

Environmental Sensitivity Overlay - Clause 42.01 and Schedule 1 (ESO1).

Use of the land for a dwelling in a Rural Conservation Zone (Clause 35.06).

Building and works associated with a section 2 use in a Rural Conservation Zone (Clause 32.06-5).

Works in a Farming Zone in support of and associated with a section 2 use, being a dwelling on a lot less than 40ha (Clause 35.07-4).

The subject lot has an area of approximately 2.023Ha in a battle axe shape. The southern boundary of 39.55m lies along Sutton Park Rd, with a long narrow neck of some 217m extending northward to where the lot opens up into an irregular shape.

The existing, derelict building is located close to the northern boundary of the lot, within some 30m of the lot boundary and approximately 40m to 60m of the full supply level of the Newlyn Reservoir. A number of outbuildings and a water tank are located close to the former dwelling.

The land falls from south to north, from around 545m AHD to 530m AHD. The current building, while sitting at the lower end of the lot, is positioned on a knoll that is bound on three sides by Newlyn reservoir.

Apart from the historical building the lot is of an open, grassed area with some scattered trees.

Rozen v Macedon Ranges Shire Council & Anor 39VPR 216, [2010] VSC 583;Gerdes v Hepburn SC (includes Summary) (Red Dot) [2010] VCAT 268; Rozen v Macedon Ranges SC (includes Summary) (Red Dot) [2009] VCAT 2746, Tsourounakis v Hepburn SC [2010] VCAT 723 (23 April 2010).

1. The applicants seek to renovate an existing building to use it as a habitable dwelling on the property known as 63 Sutton Park Road in Newlyn. A planning permit is required for the use and the development of the land for ad welling. The applicants lodged an application for planning permission in October 2010 with the Hepburn Shire Council. The Council failed to make a decision within the prescribed time and now the applicants seek a review by the Tribunal.[1]
2. The subject land is located adjacent the Newlands Reservoir. This reservoir lies within the Tullaroop Reservoir catchment, a Special Water Supply Catchment declared in accord with and listed under schedule 5 of the Catchment and Land Protection Act 1994.
3. Murray-Goulburn Water Corporation (G-MW) manages the Newlyn reservoir and draws water from it for irrigation supplies. Central Highlands Region Water Corporation (Central Highlands) draws water from Newlyn as part of its network of potable water supply for Ballarat. These water authorities oppose the permit application because of the potential risks to water quality said to be posed by the reliance of the dwelling on an on-site wastewater treatment and disposal system.
4. Mr Todd informs the Tribunal that the Council does not hold the same level of concern as the water authorities and considers that a permit should issue. If it were not for the application for review being made and the obligation on the Council to refuse the permit because of the water authorities' objections, I am told that the Council would have granted a permit under delegation.
5. While there may be arrange of issues associated with this application, the determinative issue argued in this proceeding has been about the water quality risks posed by the proposed use of the land for a dwelling and the consequent need for on-site wastewater disposal.

DWELLINGS IN OPEN WATER SUPPLY POTABLE WATER SUPPLY CATCHMENT AREAS

1. Without reciting all that was submitted by the Council in this hearing, it is fair to state that a central issue raised by the Council's officer's submissions has been about the Guidelines for Planning Permit Applications in Open, Potable Water Supply Catchment Areas[2] (the Guidelines). Mr Todd expresses the view that the water authorities (and various divisions of the Tribunal) have given too much weight to this guideline when considering applications for dwellings. Mr Hayden supports this position. It is submitted that when so applied the guidelines have effectively been a blanket ban on dwellings in the catchments of Hepburn Shire.
2. These were not the sole reasons of the Council and the applicants in support of the application, but it forms a central theme to much of their respective submissions. Other matters I will deal with later, but here I will here deal with the nature of the Guidelines and its application to cases such as this one.

A question about the primacy of the Open Catchment Guidelines

1. The purpose of the Guidelines is to assist decision making about permit applications for land use and development in open water supply catchments. The Guidelines carry the statutory weight of a guideline adopted by the Minister for Planning under s60(1A)(g) of the Planning and Environment Act 1987. Osborn J considered the issue of weight in Rozen,[3] setting out that:

Before deciding on an application, the responsible authority, if the circumstances appear to so require, may consider - ...

(g) any other strategic plan, policy statement, code or guideline which has been adopted by a Minister, government department, public authority or municipal council;

As I have previously observed with respect to the interim Guidelines although s 60(1A) provides that the responsible authority 'may' consider such a guideline, it is its duty to do so when it is plainly relevant to the subject matter of the permit application.

Nevertheless the Guidelines comprised matters required to be considered, rather than matters required to be given effect to. This follows from their description as a 'guideline' and their expressed intent to 'assist' rather than govern a decision and from the very terms of s 60(1A)(g) of the P&E Act.[4]

1. This passage of His Honour's judgement makes it clear that the Guidelines do not stand alone and are not singularly determinative of an application for development in an open potable water supply catchment, i.e. they do not have to be given effect to in the way that say the State environment protection policies are required to. However by its relevance, a responsible authority and a Tribunal on review, I s obliged to consider the Guidelines. By 'being considered' means the guidelines play a role in assisting discretionary decision making along with other relevant planning provisions, requirements and applicable policy. The decision is one of balancing policies and the guidelines for net community benefit.
2. Having regard to the judgement in Rozen, it can be said that it is not appropriate that the Guideline, in particular the guideline 1 about dwelling density, should take primacy over all other planning and other relevant considerations. The exercise of discretion requires a balancing of policies, sometimes competing, about land use and development. The Guidelines, which are called up not only by s60(1A)(g) of the Planning and Environment Act 1987 (the P&E Act) but also through the state planning policy framework, are but one of many matters to be considered in the exercise of planning decision making.
3. As I will elaborate on later in these reasons, the Hepburn Planning Scheme gives considerable weight to the protection of water quality, and in particular potable water supplies, such as the detained in the Newlyn Reservoir. It is a shire which encompasses a number of potable water catchments and has a particularly special and important role in the balancing of private land use with a wider public good outcome. This role and its achievement is expressed through the objectives and purposes of the zone and the overlay controls applying to this site. There is a further layer of planning discretion in regard to these issues expressed through the state and local planning policy frameworks of the planning scheme, matters that I will also address later.
4. When considered in this broader planning context, the Guidelines can be seen to coalesce these planning and water quality management policy directions into a framework for decision making. The Guidelines are framed in such a way that each requirement must be adequately addressed if planning permission is to be granted. It is not sufficient to pick and choose which requirements under the Guidelines may be met and which may not.
5. Thus, while I agree with the Council that the Guideline is not the sole determinant of matters such as those in this application, given the planning context and the nature of the matters to be addressed under the Guidelines, it will have significant weight. In such circumstances, a failure to meet the Guidelines means that there must be a serious question about the appropriateness of granting a permit.

The planning controls applying to land use and development

1. The question of water quality risks arises from the fact that planning permission is required to use and develop the land for a dwelling.[5] These permissions are required by the fact that the Rural Conservation Zone (RCZ) and the Environmental Sensitivity Overlay (Schedule 1) applies to the land.[6]
2. Under the RCZ, a dwelling is a permit required (section 2) use that is conditional on an ability to:

...be connected to a reticulated sewerage system or if not available, the waste water must be treated and retained on-site in accordance with the State Environment Protection Policy (Waters of Victoria) under the Environment Protection Act 1970.[7]

1. If a dwelling cannot be connected to reticulated sewer and cannot treat and retain wastewater on-site in accord with the State Environment Protection Policy (Waters of Victoria) (the SEPP WoV) the use becomes a section 3, prohibited use.
2. A permit is required under the ESO-1 because the dwelling cannot be connected to sewer.[8]
3. In determining whether a permit is to be granted therefore, the Tribunal is required to consider a range of matters in respect to these two planning requirements. A useful starting point to this determination is to consider the purposes of the RCZ and the objectives of the ESO-1.
4. The purpose of the RCZ includes amongst others the following:

To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

To conserve the values specified in the schedule to this zone.

To protect and enhance natural resources and the biodiversity of the area.

To encourage development and use of land which is consistent with sustainable land management and land capability practices, and which takes into account the conservation values and environmental sensitivity of the locality.

1. The values specified in the schedule to the zone includes the protection of domestic water supply quality.[9]
2. This perhaps unsurprising. As Mr Glossop highlights, the VPP Practice Note for rural land use zones[10] sets out that the preferred approach for the protection of open potable water supply catchments is to apply the Rural Conservation Zone. This is because:

Land use and development is strictly controlled in the zone to conserve the identified... environmental qualities of the land.

There is an expectation that a proposal will only be permitted if it conserves the valued identified for the land.[11]

1. The context in which this zone has been applied supports this view. The major proportion of the reservoir lies within a Public Conservation and Reserve Zone. The purposes of that zone includes protecting and conserving the natural environment and processes and resourced based uses. The RCZ has been applied more or less to a sliver of privately owned land surrounding the tail water of the reservoir and part of Birch Creek where it feeds into the reservoir. The zone cuts across two lots, with the remainder of each lot, including the subject site, being Farming Zone. Other private land around the PCRZ is similarly zoned Farming.
2. It must be taken that the planning authority has taken a deliberate decision to apply the RCZ to that portion of private land that contains part of, or lies immediately adjacent to the reservoir in order to expressly provide for the level of protection afforded by this zone.
3. When considered in this context, i.e. the application of the zone to this portion of the land with its expressed purposes raise an expectation that granting permission to use and / or develop this land has to support the protection of domestic water supply quality. Put alternatively a proposed use or development that presents a real risk to not achieving this purpose is most unlikely to achieve permission.
4. The objectives of schedule 1 of the ESO similarly relate to water quality issues:

To protect the quality of domestic water supplies within the Shire and the broader region.

To maintain and where practicable enhance the quality and quantity of water within watercourses.

To prevent pollution and increased turbidity and nutrient levels of water in natural watercourses, water bodies and storages.

1. Decision guidelines for the ESO are directed toward matters about water quality protection and the effect the development may have on giving affect to such protection. The comments of the relevant water authorities are also to be taken into account.
2. Together the two planning controls applying to this land give considerable weight to use and development being strictly controlled to protect potable water quality. It follows that such control necessarily constrains the potential uses and development of this land that would rely on wastewater disposal or any other activity that may introduce an unacceptable level of risk to potable water quality.

1. The state planning policy frameworks seek to achieve the following objectives through land use planning and decision making:
   • '... assist the protection and, where possible, restoration of catchment' by protecting 'water catchments and water supply facilities to ensure the continued availability of clean, high-quality drinking water';[12] and
   • '... protect water quality' by protecting 'reservoirs, water mains and local storage facilities from potential contamination' and ensuring '...that land use activities potentially discharging contaminated runoff or wastes to waterways are sited and managed to minimise such discharges and to protect the quality of surface water...resources'.[13]
2. The local planning policy similarly seek to:
   • protect surface water quality at a local and regional level by 'preventing development that contributes to water quality decline through inadequate effluent management' and 'ensuring that development proposals have regard to water quality maintenance';[14] and
   • quite specifically seeks to '...manage the accumulative effect of unsewered development in water supply catchments'.[15]
3. The local policies sit within the broader economic and environmental policy of the strategic land use structure plans that identify:
   • The site being located in an area of high to very high quality agricultural land where development that implements catchment protection measures should be supported; and
   • As part of catchment protection across the whole of the shire, protect water quality from domestic tank discharges.

1. In addition to requirements under the zoning and overlay controls and planning policies, a responsible authority and now this Tribunal are required to consider amongst other matters:
   • Any 'significant effects... the use or development may have on the environment';[16]
   • Any relevant State environment protection policy declared in accord with the Environment Protection Act 1970.[17]
2. The first point is an obvious one in the context of this application, with the potential risk to potable water a necessary consideration by virtue of the site's location adjacent a potable water supply reservoir.
3. The relevant state environment protection policy is the SEPP (WoV). The goals of the SEPP (WoV) include amongst others, the protection of beneficial uses of surface waters, including potable water supply or water fit for human consumption.
4. As set out earlier, the application must meet the requirements of this policy in respect to on-site wastewater treatment and disposal. In respect these matters, the SEPP (WoV) specifically sets out that:
   • On-site domestic wastewater needs to be managed to prevent the transport of nutrients, pathogens and other pollutants to surface waters and to prevent any impacts on groundwater beneficial uses...;
   • occupiers of premises with an on-site domestic wastewater system need to manage that system in accordance with permit conditions and the Code of Practice - Septic Tanks On-site Domestic Wastewater Management (2003),[18] as amended. Occupiers also need to regularly assess the performance of their system against permit conditions.
   • municipal councils need to:

(a) prior to approving a development, assess the suitability of land for on-site domestic wastewater systems. To assist in this, the Environment Protection Authority will provide guidance including that in Land Capability Assessment for Onsite Domestic Wastewater Management (2001),[19] as amended;

(c) ensure that permits are consistent with guidance provided by the Environment Protection Authority, including that provided in the Code Of Practice - Septic Tanks On-Site Domestic Wastewater Management (2003), as amended;[20]

1. The Tribunal is not only required to consider these matters), but give effect to them in accord with s84B(2)(e) of the P&E Act. This means that in this situation (and others with similar issues) the Tribunal's decision must be consistent with and achieve the goals of the SEPP (WoV) which I have referred to above.
2. Councils are identified under Part VI of the SEPP (WoV) as one of several agencies who have an active role in the management of water resources. For Councils such an active role is to be achieved by ensuring that amongst actions, statutory decisions about land use and domestic wastewater management are consistent with the SEPP (WoV).
3. In achieving consistency with the SEPP (WoV), considerable weight is to be given to how proposals relying on on-site wastewater management respond to the Code Of Practice - Septic Tanks On-Site Domestic Wastewater Management (the Code Practice)[21] and the Land Capability Assessment for Onsite Domestic Wastewater Management (the LCA guidelines).[22]

Conclusions about the statutory decision making framework

1. It is useful to reflect on the purposes of planning and planning schemes, as expressed in clause 1 of the Hepburn Planning Scheme:[23]
   • To provide for the fair, orderly, economic and sustainable use and development of land.
   • To provide for the protection of natural and man-made resources and the maintenance of ecological processes and genetic diversity.
   • To secure a pleasant, efficient and safe working, living and recreational environment for all Victorians and visitors to Victoria.
   • To conserve and enhance those buildings, areas or other places which are of scientific, aesthetic, architectural or historical interest, or otherwise of special cultural value.
   • To protect public utilities and other assets and enable the orderly provision and coordination of public utilities and other facilities for the benefit of the community.
   • To facilitate development in accordance with the objectives set out in the points above.
   • To balance the present and future interests of all Victorians.
2. Within these objectives it is to be noted that the balancing of planning outcomes is to benefit all Victorians. Maintaining the security of potable water supplies through the statutory decision making process is consistent with such a goal. This is self evident. It is not about the expectation of individual property rights overriding such outcomes.
3. The tools provided to a responsible authority and this Tribunal to realise these objectives are, in matters such as this are varied. They include the provisions of the planning scheme that regulate the use and development of land and the underpinning state and local planning policies that guide discretionary decision making. There are the ministerial guidelines. There are various technical codes of practice and guidelines from the EPA that support the objectives of the SEPP (WoV).
4. I have considered this interacting framework in arriving at my findings that this application:
   • fails to respond appropriately to the requirements of the Code of Practice and the Land Capability Assessment guidance;
   • fails to giver effect to the SEPP WoV because of the misapplication of relevant guidelines;
   • fails to take proper account of the Guidelines, in particular the cumulative impact of on-site wastewater disposal in the vicinity of the reservoir; and
   • fails to respond to the purposes of the zone and overlay controls which have been specifically applied to achieve protection of potable water supplies.
5. My reasons for these findings are set out below.

1. In my view the water authorities are rightly critical of the land capability assessment accompanying the application and that performed by Mr Lawrey in review. The evidence of Mr Lawrey or the submissions of the Council officers do not persuade me that these assessments are satisfactory.
2. The objectives a land capability assessment are:

1. To assess the capability of the site to sustainably manage wastewater within allotment boundaries; and

2. To identify a management program that should be put in place to minimise the health and environmental impacts of on-site wastewater management.[24]

1. A two step process is therefore required to address these objectives. First assess the inherent capacity of the site to contain wastewater within its boundaries. The guideline carries with such an objective and throughout its various requirements, a sometimes implied sometimes explicit focus on the treated effluent disposal field, a matter I will return to later.
2. Only after the inherent capacity is assessed and risks identified should a management program be developed to address these risks. Issues to be considered in the LCA and the site's rating relevantly include the ability to achieve setback distances from sensitive areas including water bodies, climate, topography and soil. The sites final rating is:

...that rating which relates to the most constraining feature(s).[25]

1. I observe that the application assessment:
   • assigns a land capability rating of 'fair' to the site, thereby indicating a moderate environmental risk. This rating is due to 'significant stoniness, high seasonal water table and moderately high rainfall. Soils are also indicated to be acidic, requiring careful management of vegetation growth.
   • does not identify how this moderate level of risk will be addressed other than by adopting water quality targets of '20/30' standard.[26]
   • adopts a reduced setback from the reservoir for the disposal field only, said to be based on the ability to meet requirements under table 4.2 (as published at that time),[27] but fails to account for the fact that one of those requirements, the Council having in place a septic tank compliance program, is not met.
   • fails to account for the fact that the LCA guidelines seek an outcome that addressing the matter of setback distances, account be made of such features as soil type, climate and slope. Two of these conditions, soil type and climate, as well as the poor drainage of the soil, are identified in the assessment as moderate risk factors that would weigh in favour of maximising not minimising the setback distance.
2. Mr Lawrey's assessment, made against the contemporary Code of Practice as a well as the same version fo the LCA guidelines assigns a variety of scores to the land features including a high risk rating score of '4' to the limited soil profile and moderate risk ratings of '3' for exposure (to sun and wind), rainfall, evapo-transpiration potential and erosion potential of the soil. He however calculates an arithmetic average of the risk score and assigns a low risk rating of 2 because he considers the moderate to high risks can be addressed by the use of secondary treated water and sub-surface irrigation.
3. Such an arithmetic approach is in direct contrast to the guidelines I referred to earlier, which directs that the final risk rating be based on the most constraining site feature(s) and the purpose of identifying the inherent capability of the land to accept and treat wastewater on site. [28] It also undermines the two step process of assess first and develop actions to address the risks second and if possible.
4. As was set out by the Tribunal in Tsourounakis when Mr Lawrey adopted the exact same approach:[29]

... [Mr Lawrey's] approach undermines the integrity of the method set out in the EPA guideline and provides a false perception of risk levels.

What is intended under the guidelines is an assessment of the inherent physical and land features that may constrain the containment of wastewater on site. Once such factors are identified, only then should a consideration be made of the management responses required to address these risks and the efficacy of such responses.

1. At best, the evidence from the land capability assessment lead me to conclude that the risk rating of this site is high. To proceed with developing and using the land while relying on an on-site wastewater treatment and disposal system it is necessary to demonstrate capacity to ameliorate these risks or otherwise accept that the constraints effectively prevent such use and development.

1. Mr Lawry's response to the risks presented by the use of on-site wastewater treatment on this site is three fold:
   • Treat the water to a higher standard than would otherwise occur under a primary treatment system;
   • Adopt subsurface irrigation of the treated wastewater; and
   • Locate the disposal field as far as possible from the reservoir's water line.
2. Mr Lawrey calculates that there is sufficient area within the available land to accommodate a primary and reserve field for sub-surface disposal. This is not in dispute. What is disputed by the water authorities is the adequacy of the setbacks supported by Mr Lawrey (and on which the applicant's rely) and the other measures he puts forward. In particular the water authorities dispute Mr Lawrey's position that adoption of reduced buffer distances are allowable because the Code of Practice conditions are met. It is contended by the water authorities that the level of risk is such that additional caution is to be exercised and therefore an increase in buffers would be more likely warranted rather than a decrease.
3. The Code of Practice sets out the following in respect to setback distances:

Even when onsite wastewater systems are properly designed, installed and maintained, a residual environmental and public health risk always remains. The consequence of failing systems varies and depends upon the particular site and the sensitivity of the environment surrounding the site.

To minimise that residual risk, onsite wastewater systems must be installed in a way that allows for a 'buffer' or 'setback distance' between the system and the surrounding environment (in other words, both the treatment system and the associated disposal/recycling system must be installed the required distance away from the site boundary). Setback distances for onsite systems that dispose/recycle primary/secondary treated wastewater in unsewered areas are listed in Table 4.2. These setback distances are independent of any other buffer distances that may apply to the site.

Council may increase setback distances where it considers that the residual risk to public health and the environment are too high. Council may also reduce setback distances where it considers that the residual risk to public health and the environment is negligible. In either case, councils may seek advice from relevant authorities and stakeholders before making such a decision.[30]

1. This short extract is important to an understanding of the risk management approach adopted under the Code and the application of setbacks. Importantly:
   • A setback is designed to deal with events when an on-site wastewater system fails.
   • The definition of an on-site wastewater system includes the treatment system or plant, all associated fittings, collection and storage systems (if any) as well as the disposal or recycling area.[31]
   • The setback distances set out in Table 4.2 of the Code of Practice therefore apply to the whole of the effluent system, from the house, to the treatment plant, any pump system, the fittings, pipes etc, and the disposal area.
   • The setback distances may be reduced or increased by the Council dependant on the residual risk of the system to public health and the environment. Reductions are only considered appropriate where the risk is negligible. Increases may be warranted where the risk is high.
2. The setbacks are set out at Table 4.2. I acknowledges that a footnote to this table provides that 'setback distances may be reduced by up to 50 per cent' where specified are met. However when this footnote is read in conjunctions with the guidance under section 4.4 of the code, it is apparent that it is not enough to merely meet the footnote conditions. The level of inherent residual risk arising from a failure event of the system needs to be accounted for in deciding on an appropriate setback. One requirement should not be read without consideration of the other.
3. The advice of the original assessment and that of Mr Lawrey fails to take the residual risk level into account and merely applies the Table 4.2 conditions to address their assessment of the risk. [32] They do not account for failure events. While Mr Lawrey's view is that he has, through his modelling of groundwater flows, accounted for such events, his analysis only considers the disposal field and not the system as a whole, including the closest point to eh reservoir of some 40m to 60m. In any event I find that his analysis is based on a number of assumed conditions which may not reflect the actual site conditions because there has been no site specific investigation to support them. Mr Lawrey simply relies on professional judgement.
4. Further, his analysis does not address the risks from Cryptpsporidium sp, the evidence of which from Mr Ford is that such microbiological populations are much hardier than the viruses modelled by Mr Lawrey, persistent for much longer residence times in the environment and require only low population levels to cause infection. These populations are a real risk because they are resistant to chlorine disinfection, the process commonly adopted by water authorities.
5. I accept Mr Ford's evidence that setbacks are an important link in the chain of water quality risk management and that I high risk situations, caution aught be exercised rather than an indiscriminate relaxation of requirements.
6. The starting point for higher risk conditions is therefore to ask whether the 30om setback is adequate.
7. Part of Mr Lawry's evidence questions the rigour by which the 300m setback has been established. His evidence on this point is that 300m is very conservative and he does not agree with this distance. He relies on the modelling of possible groundwater seepage paths I have referred to above to satisfy himself that the decreased setbacks is sufficient. As I have set out, I do not find this assessment to be sufficient rigorous to support a case for decreasing the setback from 300m.
8. Further such evidence and a great deal of Mr Lawrey's other evidence is based on his professional opinion that goes behind or questions the efficacy of the Code of Practice and the recommended setbacks.
9. In understanding my reasons that respond to such evidence, it is important to understand the weight to be given to the Code and to the setback requirements.
10. At section 1.3 of the Code of Practice, the Council and other users of this code are reminded that:

This Code is a legally binding document under clause 32 of the State Environment Protection Policy (Waters of Victoria) [SEPP(WoV)], which requires premises occupiers to manage, and councils to issue permits for, onsite wastewater systems in accordance with this Code.

The terms 'shall' and 'must' mean a mandatory requirement of the approving authority. Other terms such as 'should' or 'recommended' indicate desirable procedures or methods.

1. The Code of Practice is the principle tool that provides guidance to achieve the SEPP (WoV) requirements for onsite wastewater management. It takes precedence over relevant Australian Standards.[33] Accordingly it is not a document that one should look behind or question as to its efficacy in a forum such as this. To do so is not helpful nor lawful when it carries the statutory weight given by way of the SEPP WoV.[34]
2. The terms of the Code of Practice makes compliance with setbacks mandatory, i.e. 'onsite wastewater systems must be installed in a way that allows for a 'buffer' or 'setback distance' between the system and the surrounding environment' [my emphasis]. A reduction (or increase) in setbacks is discretionary, but only in accordance with the guidance set out under the Code of Practice, i.e. a consideration of the residual risk if a system were to fail. The personnel opinion of an assessor is not a valid reason to vary the setbacks. Any setback variation must be based on a rigorous assessment of risks. That said the Code of Practice is explicit. If the risk to water quality and human health is 'too high' the setbacks may be increased. Put another way, if the risks are 'too high' a decrease in the setbacks should not be contemplated. It is of course necessary to determine whether a risk is 'too high'.
3. On this point, Mr Lawrey's evidence is unhelpful to the Tribunal as it fails to undertake a sufficiently rigorous assessment of the risks. For the reasons I have set out, I find that the land capability assessments lead to a conclusion that the residual risk arising from the inherent capacity of the site to contain wastewater is sufficiently poor enough to lead to a classification of high risk. In turn, the impact of effluent not being so contained would be a high risk. The undisputed evidence is that the reservoir serves the Ballarat community for potable water supply and feeds to other reservoirs that also supply towns with potable water.
4. Mr Ford's evidence of failing systems often being linked to climate events when water treatment plants are already overloaded or impacts from systems failing is persuasive. It is not a reasonable approach to rely solely on treatment plants to reduce health risks; it is better to reduce the sources of such risks when ever possible. The accumulative impacts of septic tanks is identified in the applicable planning and environmental policies as one such risk. The consequence of systems located close to reservoir is therefore very high.
5. In light of such a high risk, I conclude that there is no justification for reducing the setback distances. Indeed, I could accept that in this instance, there are grounds to consider an increase in the setback. This is however not necessary and was not pursued by the water authorities. It is sufficient to conclude in this proceeding that there is no justifiable support for a reduction in the setback of 300m for the wastewater treatment system. To do so would be inconsistent with the Code of Practice and so be inconsistent with the SEPP (WoV) and fails to give it proper effect.
6. It follows that the application must necessarily fail.[35]

1. The applicants rely on the evidence of Mr Lawry in response to the Guidelines as well as on submissions as to what weight the Guidelines should be given.
2. In response to Guideline 1 the requirement for a density of 1 dwelling per 40 hectares, Mr Lawrey's evidence is that:
   • The proposed dwelling is not new, in the sense that the land has been used previously for a house; and
   • The proposal does not unreasonably add to the number of dwellings in the catchment when considered as a whole
3. He dismisses the density of dwellings factor because in his view it is incalculable.
4. Mr Lawrey is wrong to consider that this proposed dwelling is not new. The determination of Deputy President Gibson is clear.[36] The derelict building on this land does not retain existing use rights for a dwelling. This proposal is therefore to be considered as a new dwelling.
5. Further, just because a dwelling had been used on this site does not justify its restoration, as the import of Mr Hayden's and Council's submissions carry. On the anecdotal evidence the past use commenced in a time when less was known about the risks of septic tanks and the impacts on water quality. Planning controls are dynamic, responding to changes in expectation and understanding of good land use principles. This application has to be considered in the context of this contemporary understanding of the risks posed by septic systems and applicable planning controls and policy.
6. Along with Mr Lawrey, Mr Hayden and the Council are similarly critical of the density requirement, indicating that there is no indication whether this should apply to the catchment as a whole or just to the area around the subject dwelling.
7. Various divisions of the Tribunal including that in Rozen[37] recognise the difficulty in applying the density requirement. Notwithstanding this difficulty, it is a guideline that has to be addressed, and as observed in Rozen, by not being prescriptive there is some flexibility in assessing the density and hence cumulative impact.[38] Indeed the density calculated by Mr Ford and the water authorities takes account of the presence of the reservoir and clearly that no dwelling would be built in the area. The density value is estimated on eth basis of land area around the reservoir within a one kilometre radius of the site.
8. The evidence of Mr Ford is that the density of existing dwellings is approximately one per 28.5ha. If the proposed dwelling were approved the density would increase to one per 26ha.[39] Alternatively, Mr Ford highlights that taken on a lot basis, the site would fail the density guideline, as it is located on a lot 'far less than 40ha'.[40]
9. However it is measured it is clear from the aerial photographs that the site is located in proximity to a number of other dwellings in the area that give cause for the density to be above that adopted for Guideline 1.
10. The aim of this guideline density is to address cumulative risk.[41] This is evident by the fact that the guideline is not applied if:

...a catchment management plan, water catchment policy or similar project addressing land use planning issues and the cumulative impact of onsite waste water/septic tank systems has been prepared for the catchment, and the objectives, strategies and requirements of the plan or project have been included in the planning scheme.

1. No such plans or projects apply to this catchment or the Hepburn planning scheme. Nor if I could consider it, has there been anything of substance to address cumulative risk by the applicant. Mr Lawrey's response is merely that the site can contain the wastewater, therefore there is no cumulative risk.
2. For reasons that I have already addressed I do not accept this conclusion from Mr Lawrey's or the application land capability assessment. I find that the converse is in fact true. The site has a high (residual) risk of failing to have capacity to contain wastewater onsite in the event of a failure. It therefore adds to the cumulative risk of impact from septic tanks relied on by dwellings around the reservoir.
3. As Mr Glossop contends, the application must necessarily fail because of this inability to meet guideline 1.
4. For reasons that I have set out in respect of setback distances, this application also fails because of an inability to provide for setbacks in accord with guideline 2 of the Guidelines.
5. Because the Guidelines require a cumulative ability to meet all of the requirements under it (i.e. each individual guidelines), the failure to not meet either one of these guidelines gives weight to refusing a planning permit.

1. Because of the many similarities of this application, I find that the reasons of the Tribunal in Tsourounakis are useful to adopt here. In response to the application for a dwelling reliant on on-site wastewater treatment and disposal in a Rural Conservation Zone of the Hepburn Shire, subject to the controls of the ESO-1 and adjacent to a potable water supply stream the Tribunal in that proceeding said:

To us it seems that the approach of the Council and Mr Tsourounakis seems to typify many applications for dwellings in a RCZ. This approach is to start by asking 'how' can a dwelling be accommodated. Having regard to the purposes of the zone and the overlays that apply, the question should more rightly be put as to 'why' a dwelling should be allowed. This is further emphasised by the fact that the use for a dwelling is a section 2, permit required use. This is to be contrasted with the use for a dwelling on other rural land, i.e. the Rural Living and Farming Zones, where a dwelling is a section 1 use, albeit even then on a conditional basis, including the ability to achieve satisfactory on-site wastewater treatment and disposal.

In our view if use of this land for agriculture or a rural living dwelling was seen to be strategically supported, then other zones would have been applied to this land. That other zones have not been applied to this land points clearly to a recognition that this land has other values that the purpose of RCZ seeks to support.

Any use of this land, whether it be agricultural or for a dwelling, must seek to achieve the purposes of the zone. While there are a range of uses allowable under the zone, including a dwelling, such uses must have regard to the values specified in the schedule and be capable of applying 'sustainable land management and land capability practices'.

The schedule to the zone sets out the conservation values to be considered. This includes the protection of domestic water supply quality. The protection of water quality is further reinforced by the application of the Environmental Significance (Potable Water Supply Catchment) ... to this land. Broadly speaking, these overlays seek to protect the quality of the land and water resources and prevent degradation of the environment. The ESO in particular has specific requirements to maintain and, where possible, to enhance the quality of potable water supplies. When taken into account, these provisions clearly point to significant weight being given to the primary purpose of protecting potable water supplies.[42]

1. Similar to the Tsourounakis matter, in this proceeding the Council and the applicants put forward rationale to support the application that has little to do with the primary purposes of the zone or the objectives of the overlay control. Their respective positions are that the past use of the site and the expectations of the current owners to be able to use the now derelict building justify the support of this proposal. The Council officers submit that it would amount to a fair outcome in light of such expectations.
2. Having regard to what I have set out earlier about the planning controls applying to this site, it is evident that the expectations of the land owners, whether reasonable or not, does little to address the primary purposes of the zone and overlay controls. When taking into consideration the findings I have made about the inability to address the risks to the potable water supply reservoir, it follows that this application fails to address the zone's and ESO's purposes and objectives. To approve the use of this land for a dwelling would introduce an unacceptable level of risk that is contrary to these purposes and objectives, i.e. the protection of potable water quality.
3. In respect to the question of fairness, the objectives of the planning scheme as I have set out earlier are many and varied. It is not appropriate to rank or cherry pick that which suits a purpose. The objectives do include a reference to fairness, more specifically such a reference is in terms of the 'fair, orderly, economic and sustainable use, and development of land'. Other objectives provide for the protection of natural resources, secure a pleasant, efficient and safe working, living and recreational environment for all Victorians and to balance the present and future interests of all Victorians.[43]
4. The failure to address the primary purposes of the zone or objectives of the overlay, an inability to meet onsite wastewater treatment requirements and the introduction of risk to potable water supply cannot be seen to be consistent with a proper balancing of these objectives.

1. The planning requirements that address on-site wastewater disposal in an open potable water supply catchment are varied and sometimes complex. Nevertheless, responsible authorities and this Tribunal are required to apply these requirements as objectively as possible. In doing so I conclude that this application fails:
   • to respond appropriately to the requirements of the Code of Practice and the Land Capability Assessment guidance;
   • to giver effect to the SEPP (WoV) because of the misapplication of relevant guidelines;
   • to take proper account of the Guidelines, in particular the cumulative impact of on-site wastewater disposal in the vicinity of the reservoir; and
   • to respond to the purposes of the zone and overlay controls which have been specifically applied to achieve protection of potable water supplies.
2. It follows that the application for review be dismissed and an order made that no permit be granted.

[1] in accord with s.80 of the Planning and Environment Act 1987.

[2] May 2009. Department of Planning and Community Development.

[3] Rozen v Macedon Ranges Shire Council & Anor 39VPR 216; [2010] VSC 583

[4] Ibid at [60] to [62]; footnotes and citations removed.

[5] It is recognised that a separate permit is required for on-site wastewater treatment and disposal under s53L of Environment Protection Act 1970, however the question of planning permission here precedes the permitting process under this legislation.

[6] Clauses 35.06 and 42.01 of the planning scheme respectively.

[7] Clause 35.06-2 of the planning scheme.

[9] The other conservation values are 'vegetation loss and environmental weed invasion in public land forests'.

[10] Applying the rural zones, March 2007, Department of Sustainability and Environment.

[16] Section 60(1)(e) of the Planning and Environment Act 1987 (the P&E Act).

[18] EPA Publication 891.2, current version December 2008.

[19] EPA Publication 746.1, current version March 2003.

[21] EPA Publication 891.2, December 2008.

[22] EPA Publication 746.1, March 2003.

[26] i.e. not more than 20 mg/L five Day Biochemical Oxygen Demand and not more than 30 mg/L suspended solids.

[27] At the time of the application assessment in 2008, Version 891, dated March 2003 was in force.

[28] See also section 4.5 of the Code of Practice.

[29] Tsourounakis v Hepburn SC [2010] VCAT 723 at [43] to [44]

[30] Section 4.4 at page 14 of the Code of Practice.

[31] In line with the definition at s.53J of the Environment Protection Act 1970, a wastewater treatment system is synonymous with a septic tank system, the definition of which includes all tanks, beds, sewers, drains, pipes, fittings, appliances and land used in connection with the system. See also the definition of a septic tank system at page 34 of the Code of Practice.

[32] These conditions being met are those about treating effluent to a certain quality, applying the treated effluent by sub-surface irrigation with the application area meeting slope requirements

[33] Section 7.1.4 of the Code of Practice.

[34] See Thirteenth Beach Coastwatch Inc v EPA & Anor [2009] VSC 53 at [13] per Cavanough J.

[35] It is also noted that under s53M(7)(b) of the Environment Protection Act 1970, a council must refuse a septic tank permit if the proposed septic tank system is contrary to State environment protection policy.

[36] Gerdes v Hepburn SC (includes Summary) (Red Dot) [2010] VCAT 268 (17 March 2010).

[37] Rozen v Macedon Ranges SC (includes Summary) (Red Dot) [2009] VCAT 2746 at [95] to [96].

[39] These calculations are based on a 1km radius from the subject dwelling, an area which equates approximately to 40hectares at page 11 of his statement of evidence.

[40] at page 11 of his statement of evidence.

[41] See also Rozen: [2009] VCAT 2746 at [50] to [55].

[42] [2010] VCAT 723 at [10] to [15].

[43] See earlier at [38] of this decision and section 4 of the P&E Act.