Mornington Peninsula Shire Council v Savage [2002] VSC 399

11. The reason for the application is that the respondents wish to borrow funds for the expansion of the Maze facilities and have been advised that the subject land will have a higher value as collateral if it is subdivided than in its present state as one allotment. They propose to continue living in the house.

14. The grounds of appeal relied upon (grounds 5, 7 and 8 set out in the Notice of Appeal having been abandoned) are as follows:

1. The Tribunal erred in failing to have any, or any proper, regard to the decision guidelines in clause 35.01-6 of [the planning scheme] in relation to rural issues.

2. The Tribunal erred in failing to implement relevant aspects of the local planning policy framework of the Scheme as required by the first purpose of the Rural Zone.

3. The Tribunal erred in failing to limit its consideration of exceptional circumstances under clause 22.03-1 of [the planning scheme] to long term farming needs.

4. The Tribunal erred in having regard to an irrelevant consideration, namely the private funding requirements of the permit applicant.

6. The Tribunal erred in interpreting the whole purpose of and the underpinning of, the subdivision controls in the Scheme as "agricultural viability" and/or protecting land currently used for agriculture.

9. The Tribunal erred in failing to have any or any proper regard for a relevant consideration, namely the capacity for the subject land to be used for agriculture, at present or in the future.

10. The Tribunal erred in failing to have any or any proper regard for a relevant consideration, namely that its decision would create a precedent for the grant of planning permits for rural excisions.

24. In his submissions Mr Gobbo, for the Council, summarised those grounds as follows:

(a) the Tribunal misinterpreted the provisions of clauses 35.01-6 and 22.03 in determining that the purpose of the excision controls was "agricultural viability" and in extending the "exceptional circumstances" test beyond the expectations of long term farmers. Grounds 1, 2, 3 and 6.

(b) The Tribunal took into account an irrelevant consideration, namely the private economic circumstances of the respondents. Ground 4

(c) The Tribunal failed to take into account or have regard to relevant considerations, namely:

(i) the provisions of clause 35.01-6; Grounds 1, 2, 3 and 6;

(ii) the capacity of the land to be used for agricultural purposes; Ground 9;

(iii) the precedent value of its decision. Ground 10.

30. In Portland Properties Pty Ltd v Melbourne & Metropolitan Board of Works [1] Smith J, with whom Adam J concurred, expressed in the following terms the circumstances in which error by a forerunner of the Tribunal might lead to an order nisi for review being made absolute:

. . . the appellant, in order to succeed in this case, has to demonstrate to the satisfaction of this Court that the Town Planning Appeals Tribunal went wrong in law in arriving at its decision. It would not be enough for the appellant to show that the Tribunal's reasons for its decision are so expressed as to suggest the possibility that the Tribunal proceeded upon a wrong view of the law. This Court is not entitled to interfere with the decision unless it is satisfied that there was, in fact, a vitiating error of law.

34. It is not in issue that failure to take into account a relevant consideration, or taking into account an irrelevant consideration can in some circumstances constitute a vitiating error of law [2] .

38. As has been said, the subject land is situated in a Rural Zone under the planning scheme. Clause 35.01 of the planning scheme sets out the "purpose [sic]" of the Rural Zone, including among some ten items:

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

To ensure that subdivision promotes effective land management practices and infrastructure provision.

43. Clause 35.01-6, containing the "decision guidelines" for the Rural Zone, relevantly begins:

Before deciding on an application to use or subdivide land, . . . in addition to the decision guidelines in Clause 65, the responsible authority must consider, as appropriate:

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

The decision guidelines in clause 65 itself comprise some eighteen items, about half of which could be seen as appropriate for consideration in the context of the respondents' application, and which include:

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

51. The Tribunal, reviewing, as in this case, a decision of a responsible authority, must also consider the matters set out in section 60(1)(a) of the Planning and Environment Act 1987 ("the Act"), and "if the circumstances appear to so require, may consider" the matters set out in section 60(1)(b) and "must" or "must, where appropriate", take into account, have regard to or take account of the matters set out in section 84B.

54. The planning scheme with which this appeal is concerned is, of course, prepared under the same legislation, that is, the Act, and on the same basis, containing the same State Planning Policy Framework, as are all planning schemes in the State. It will be apparent from the foregoing that the matters which decision makers under planning schemes are required to take into account are so many and so varied that it must for the most part be a matter of planning judgment as to what is "appropriate" for consideration in a particular case. It would not be difficult to find examples of policies or requirements with conflicting effects, which must somehow be reconciled by the decision maker. In the present case, the Tribunal considered provisions of the planning scheme encouraging the expansion of the tourist base as well as provisions controlling subdivision by way of excision.

57. This case turns on the application of the policy contained in clause 22.03 of the planning scheme, one of the local planning policies which clauses 35.06 and 65.01 require the responsible authority to consider, among many other matters, before deciding an application. Clause 22.03 is entitled "Dwelling Density, Excisions and Realignments in Rural Areas" and applies to all land within the Rural Zone. Clause 22.03-1, headed "Policy Basis", sets out why the fragmentation of productive agricultural land is seen as undesirable, and points out that such fragmentation raises expectations of further residential encroachment and thus leads to further fragmentation. The clause continues (with emphasis added):

This cycle of fragmentation can only be broken by planning controls that stabilise both the development of housing in rural areas and subdivision expectations, combined with practical support for the sustainable management of land as farmland. In this context, excisions from rural properties should be seen as appropriate only in exceptional circumstances, linked to the expectations of long term farm owners, and provided they do not detract from the sustainable use of the land for farming or compromise environmental or landscape values associated with the land.

61. Clause 22.03-2 sets out the objectives of the policy as follows:

To support the objectives of the Rural Zone and to maintain farmland as a long term resource.

To prevent the fragmentation of rural land and avoid constraints on rural land use resulting from increasing development densities in rural areas.

To maintain and enhance the landscape and environmental values of rural areas.

To provide an equitable and sustainable basis for consideration of proposals for excisions, as exceptional variations to the Rural Zone subdivision provisions.

To provide for the continued occupation of rural land by long term farm owners.

To ensure compliance with the State environment protection policies and to prevent encroachment of sensitive uses into recommended air or noise buffer distances from potentially offensive uses, such a intensive animal industries.

To reduce the dispersal of population and infrastructure demands.

To provide opportunity for efficient use of rural land by intensive agricultural uses.

It is to be assumed that the objective "to support the objectives of the Rural Zone" in clause 22.03-2 relates to the purposes set out in clause 35.01 [3] .

73. Clause 22.03-3 sets out the policy. After the words, "It is policy that, in considering applications for house lot excisions, the responsible authority will require that", appear a list of requirements. It is common ground that the respondents' application does not meet those requirements.

76. Finally, clause 22.03-4, headed "Decision guidelines" reads:

Before deciding on an application the responsible authority must consider as appropriate:

* The extent to which the application meets the objectives and directions of this policy.

* The extent to which any proposed variation of this policy can be applied on a consistent basis without undermining the strategic directions of this scheme.

82. The State Planning Policy Framework relevantly includes policies encouraging tourism development (clause 17.04) and the protection of productive farmland (clause 17.05). In this context it is to be noted that in the Rural Zone a use described as "leisure and recreation (other than informal outdoor recreation)" is allowed, although a permit is required for that use. It is to be assumed that the various permits granted by the Council for the operation of the Maze on the subject land have been granted pursuant to that provision. Crop raising and extensive animal husbandry are two agricultural uses for which a permit is not required in the Rural Zone. A number of other uses are available in the Rural Zone, some requiring, and others not requiring, a permit.

86. The relevant parts of the reasons for decision of the Tribunal, which form part of its formal order [4] , are set out below, with some annotations in square brackets:

5. The justification for this proposal is purely economic and, to their credit, the Applicants did not seem to justify it on any other basis. [The balance of this paragraph is summarised at [4] above.]

6. . . . It is clear from [the Council's] submission that the Council's main fear is that the grant of a permit would create an undesirable precedent leading to a rush of applications for excisions across the Mornington Peninsula.

7. While the Tribunal understands this fear, it is necessary to bear in mind that every planning application must be decided on its merits. There are a number of features surrounding this application that are most unlikely to be duplicated. . . .

[In 8, 9 and 10 the Tribunal sets out portions of clause 22.03 of the planning scheme and notes that the respondents' proposal does not comply with the requirements [referred to by the Tribunal as "guidelines"] for excision of a lot appearing in clause 22.03-3.]

11. However, Mr Custance [for the respondent] argued that there were "exceptional circumstances" which fully justified a departure from the guidelines.

[This is a reference to the underlined passage in the paragraph from clause 22.03-1 appearing in [13] above.]

* The proposal will facilitate the ongoing development of a key tourist facility on the Mornington Peninsula.

* The site is located within a tourist precinct, adjoining and nearby to other tourist facilities.

[The expression "tourist precinct" appears to be used here as a general description, rather than a term of art. I was not directed to any example of its use in the planning scheme.]

* The existing dwelling is located opposite a Residential 1 zone and is more closely associated with residential land use than with any agricultural activity.

* The site is not currently used for any agricultural/rural purpose other than as part of the operations of the Arthurs Seat Maze.

* The site (6.96 hectares) is too small to form a viable farming enterprise, particularly in light of the number of overlay controls that apply to the land and the proximity of tourist facilities and residential areas.

* The site is unlikely to revert to agricultural/rural use due to the existing investment in the land, continuing success of the Arthurs Seat Maze and the proximity of tourist facilities and residential areas.

* The proposal will assist the "sustainable use" of the land for tourism purposes.

* The proposal will not ". . . compromise environmental or landscape values associated with the land".

12. While acknowledging the significance of "The Maze" to tourism on the Peninsula, Mr Beazley [for the Council] nonetheless contended that,

* [the proposal] fragmented rural land and impacted upon its agricultural viability;

13. . . . the site directly adjoins a Residential 1 zone and the pattern of subdivision in the immediate area is one of small scale lots rather than broadscale farming. The fact that the site adjoins a major tourist attraction would be readily apparent . . .

14. [Responding to the submission of the Council that "it fragmented rural land and impacted upon its agricultural viability"] Critical to the Tribunal's deliberations in this matter is the fact that the land is not used for agriculture and thus its "agricultural viability" is not at issue. That, after all, is the whole purpose of the strict controls which apply to excisions. The purpose underpinning the control will not be offended by this proposal.

15. [Responding to a submission for the Council as to the creation of "rural residential lot", not significant in this appeal.]

16. Finally the Tribunal turns to the question of precedent. Having regard to the "exceptional circumstances" to which the Tribunal has earlier referred, it is difficult in the extreme to conclude that a set of identical circumstances will arise elsewhere. This is most unusual matter. Crucial to the Tribunal's consideration is the fact that this excision does not violate the purpose which underpins the excision control. How then can the grant of a permit create a "bad" precedent? [Emphasis in the original]

17. The Tribunal notes that Clause 22.03-1 attempts to tie "exceptional circumstances" only to long term farm owners. It is difficult however to justify the exclusion of other types of land owners who are able to demonstrate (as the Applicant has) that exceptional circumstances apply, and the land can be used for a sustainable purpose other than farming. After all, tourism is particularly important to the Shire and the planning scheme contains an number of provisions designed to support, expand and reinforce the tourist base.

18. . . . for all the reasons set out above, the Tribunal has come to the conclusion that a permit should be granted subject to conditions and it will make the necessary orders.

118. It is convenient to deal first with this ground. In paragraph 5 of its decision the Tribunal referred to the reason for the making of the application to subdivide the subject land, as to which see [4] above. Mr Gobbo submitted that this was a vitiating error in the decision and relied on the well-known passage from the judgment of Stephen J in Kentucky Fried Chicken Pty Ltd v Gantidis [5] as authority for the proposition that private economic factors do not constitute a relevant town planning consideration. However, in my view the reference to that circumstance by the Tribunal was, like [4] above, intended as background only, and I do not consider that it can be said that the Tribunal had regard to that circumstance in reaching its decision. I note that the Tribunal expressly stated that of the evidence of two witnesses on this point, "Neither witness assisted in the determination of this matter." Accordingly this ground fails.

122. It is apparent that the generalities of grounds 1 and 2 are intended to be read down in accordance with grounds 3 and 6 (see (a) and (c)(i) in [6] above), and it is thus not necessary to consider grounds 1 and 2 separately.

126. The relevant passage from clause 22.03-1 appears in [13] above, but it is convenient to extract it here, with emphasis added:

In this context, excisions from rural properties should be seen as appropriate only in exceptional circumstances, linked to the expectations of long term farm owners, and provided they do not detract from the sustainable use of the land for farming or compromise environmental or landscape values associated with the land.

The submission for the Council is that the "exceptional circumstances" which would justify an excision from a rural property are limited to consideration of matters linked to the expectations of long term farm owners, and thus the Tribunal, in taking into account as "exceptional circumstances" the various matters set out at paragraph 11 of its reasons, and referred to at paragraph 16, acted beyond its powers.

131. However, the passage cited above from clause 29.03-1 is specifically expressed to operate in the context of the fragmentation of productive agricultural land. Therefore although the policy is expressed to apply to all land in the Rural Zone, it is clear that its purpose is related to the fragmentation of productive agricultural land. If the Tribunal's finding in paragraph 14 of its decision that "the land is not used for agriculture and thus its `agricultural viability' is not in issue" is accepted [6] , it cannot be said that it was bound to apply that passage when considering whether to approve the excision.

135. The submission for the Council is that the purpose of the provisions of clause 22.03 of the planning scheme dealing with the excision of lots is to prevent such excisions in respect of all land in the Rural Zone, save in accordance with the requirements referred to in [15] above. In this context, Mr Gobbo emphasised that he was not submitting that there was no discretion to grant a permit for an excision which did not comply with those requirements: their submission related to the basis on which that discretion was exercised by the Tribunal in the present case.

138. As stated above in [22], the purpose of the policy is related to the fragmentation of productive agricultural land. The decision guidelines in clause 22.03-4 require the decision maker, before deciding on a relevant application, to consider "the extent to which the application meets the objectives and directions of this policy." It is not clear what is meant by "directions". The "objectives" are set out in clause 22.03-2, appearing in paragraph 13 above, and are all related, directly or indirectly, to the maintenance of agricultural uses in the Rural Zone. The purpose of the policy, in my view, is to control excisions from parcels of land in the Rural Zone which are being used for agriculture, rather than to control excisions from every parcel of land in the Rural Zone. That being so, I see no error in the Tribunal's view that what it described as "agricultural viability" is the purpose of the controls on excisions, or in its exercise of its discretion on that basis.

142. Given my finding as to the purpose of the policy, I cannot find that the Tribunal, having found that the subject land was not being used for agriculture, erred in not having regard to its capacity to be used for agriculture at present or in the future. Agriculture is a permitted use without a permit in the Rural Zone, and any land in that zone which is being used for any other purpose could be made available for agriculture by the removal of any improvements inconsistent with that use and the discontinuance of any inconsistent use. It is surely a matter of planning discretion for a decision maker under a planning scheme to decide whether or not to take into account the possibility of a change in the use of the land which is being considered in any given case, or of adjacent land where that may be relevant. The Tribunal did take into account the purpose for which the subject land was being used in the present, namely the Maze and the associated residence.

146. It was put by Mr Gobbo that this decision will be authority for the proposition that the policy in clause 23.03 of the planning scheme does not apply to land not presently being used for agriculture. Accordingly, he submitted, a landowner wishing to obtain a permit for excision of a lot from a parcel of land being used for agriculture need only discontinue that use in order to obtain the permit. That seems to me to be an over-simplification, but in any case is not my concern. However, while I appreciate that the precedent issue is a major concern for the Council, the Tribunal, in referring to it, made the point, rightly, that every planning application must be considered on its merits. It cannot be right to refuse to make a decision which the decision maker considers to be right, on the ground that it is likely to be applied in later cases where to apply it might be thought to be wrong.

149. A number of issues were raised in the course of the hearing as to which I have not found it necessary to form or to express an opinion. No conclusion as to my view on any of those issues should be drawn from what is said above.

152. For the reasons given, the appeal will be dismissed. Counsel may wish to make submissions as to costs.

[1] (1971) 38 LGRA 6 at 18

[2] Minister for Aboriginal Affairs v Peko-Wallsend Pty Ltd (1986) 162 CLR 234 at 39 and following.

[4] Section 117 of the VCAT Act

[5] [1979] HCA 20; (1979) 140 CLR 675 at 687