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[2003] VCAT 1368
respondent. The Responsible Authority's decision is affirmed. No permit shall issue.
1 cited instrument linked from this judgment.
VCAT considered a proposal to build a second house on a small rural property and use the existing house for tourist stays linked to a Christmas tree farm. It accepted that the farm was a legitimate agricultural activity, but was not persuaded that this justified another dwelling or that the accommodation was sufficiently connected to the farm. It therefore upheld the Council's refusal, and no permit could issue.
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2,030 words · generated 30/09/2026
In O'Neill v Yarra Ranges SC [2003] VCAT 1368, John O'Neill applied for merits review of Yarra Ranges Shire Council's refusal of a planning permit. The application concerned a 4.634-hectare rural property at 98 Houghtons Lane, Tarrawarra. It proposed a new dwelling for Mr O'Neill and his family, together with conversion of the existing dwelling into self-contained visitor accommodation [1], [4], [6]–[8].
The applicant's tourism concept was connected to a Christmas tree plantation on the property. The proposal was that visitors, particularly families, could observe the trees at different stages and tag a tree for later purchase and collection [4]. The plantation was described as not yet operational, with the judgment stating that it would become operational in 2005 [8].
The Council refused the application on four grounds: detriment to environmental qualities and rural landscape character; inconsistency with planning scheme provisions and local policies; absence of a direct connection between the accommodation and a restaurant, other tourist facility, or agricultural use; and prejudice to the implementation of Melbourne 2030 [2]. The applicant's review grounds contested each of those matters [3].
The Tribunal heard the matter as a merits review on 22 September 2003. Member P.G. O'Leary gave the order on 29 September 2003. The Tribunal affirmed the Council's decision and ordered that no permit issue. Its reasons identify inconsistency with regional and local policy directions, and the absence of a demonstrated need for a second dwelling, as central concerns [26]–[28].
The Tribunal's central reasoning was about the second dwelling and the planning policies governing rural land. It stated that the proposal was inconsistent with regional and local policy directions, and expressed concern about allowing a second dwelling on a relatively small agricultural lot [26]. The judgment summarises Clause 53 as providing that a second dwelling in the Rural Zone could be permitted only if a need for a caretaker's house was demonstrated and the lot-area requirements were met. It records the relevant Schedule 5 maximum lot yield as 40 hectares [11]. The subject property measured 4.634 hectares [6].
The Tribunal's express finding was that it was not satisfied there was a demonstrated need for an additional dwelling [27]. It also considered that allowing a second dwelling could place pressure on the Council to consider similar proposals on other small holdings, including applications for excision or subdivision [27]. This is a concern the Tribunal gave as part of its reasoning in this case; the judgment does not frame it as a general rule that every second dwelling creates such pressure.
The applicant offered a Section 173 Agreement to prohibit further subdivision. The Tribunal acknowledged that proposal but considered that its concern was not limited to subdivision. It was also concerned that the second dwelling could be developed under the guise of tourism [28]. The decision therefore did not turn solely on whether the land might later be subdivided.
The agricultural and tourism relationship was also important. The Tribunal accepted the Christmas tree plantation as a legitimate agricultural activity [30]. It did not reject the proposal on the basis that Christmas tree farming could not be agriculture. Instead, it questioned whether the proposed accommodation was sufficiently tied to that activity to fit the regional and local policy support for tourism.
The Tribunal shared the Council's concern that the tourist facility would rely substantially on people wishing to visit a fairly small Christmas tree farm [30]. It considered that the idea of families tagging a tree was novel, but that the tourism rationale stretched the intention of policies supporting tourism where it enhances existing rural pursuits [30]. It further observed that visitors could stay in Yarra Glen or Healesville and visit the site, rather than needing to stay on the property [31].
The judgment therefore distinguishes between accepting the farm as a legitimate agricultural use and accepting that an accommodation business is policy-compatible because it is marketed in connection with that farm. The Tribunal's reasons focus on the scale and nature of the proposed tourism connection, alongside the policy concern about the additional dwelling. They do not provide a comprehensive assessment of every individual planning policy or refusal ground.
The judgment describes the planning framework it applied at the time. It records that the site was in the Rural Zone, where a permit was required for accommodation use and buildings and works for a Section 2 use [10]. It identifies the Upper Yarra Valley and Dandenong Ranges Regional Strategy Plan, Clause 53, the Municipal Strategic Statement, and several local policies as relevant [11]–[12].
As summarised in the decision, the Regional Strategy Plan allowed for a diverse range of tourism opportunities in appropriate rural locations, provided they enhanced the existing character of the area and maintained rural and agricultural pursuits, visual and environmental quality, and residential amenity [11]. The judgment also states that Clause 53 gave effect to the Regional Strategy Plan and describes a limit on second dwellings in the Rural Zone, referring to a demonstrated caretaker's-house need and the applicable lot-area requirement [11].
The reasons do not announce a new legal test, overrule a prior decision, or state that the relevant planning provisions changed as a result of this case. They apply the identified planning scheme and policy framework to this proposal. Accordingly, the judgment supports a case-specific account of how VCAT assessed the second dwelling and its tourism justification, not a claim that the law changed before and after the decision.
The Council relied on Yarra Ranges Shire Council v Buerfied (2000) VCAT 86887 in its submissions, including a passage about balancing tourism, environmental values and residential amenity [20]. The judgment records that submission, but does not expressly adopt the quoted passage as the Tribunal's own reasoning. Its own stated basis for the result appears in paragraphs 26–31.
The material provided contains no later decisions or subsequent legislative history. It therefore cannot establish how later courts or tribunals treated this decision, or describe the present status of the planning provisions. Those questions require sources beyond this judgment.
At paragraph 26, the Tribunal says the principal reason not to uphold the application was its inconsistency with regional and local policy directions. In plain English, the decision was not based only on a neighbour's objection or a visual preference. The Tribunal treated the planning framework as the main problem.
At paragraph 27, the Tribunal says it was not satisfied there was a demonstrated need for an additional dwelling on a relatively small rural lot. The practical significance is that the applicant's wish to occupy a new house while converting the existing one to accommodation did not, on the evidence and policy context as assessed in the reasons, establish the need the Tribunal was looking for.
At paragraph 28, the Tribunal explains why the proposed Section 173 Agreement did not allay its concerns. The agreement would prohibit subdivision, but the Tribunal's concern also involved the creation of an additional dwelling justified as tourism. In plain English, limiting future subdivision did not answer the separate question whether another dwelling was acceptable in the first place.
At paragraph 30, the Tribunal expressly accepts the Christmas tree plantation as a legitimate agricultural activity. It then questions whether accommodation relying substantially on visitors to a fairly small farm genuinely enhanced the rural activity in the way the policies contemplated. The distinction is important: the Tribunal accepted the farm's agricultural character but was unconvinced by the asserted link between the farm and the proposed accommodation.
At paragraph 31, the Tribunal says tourists could be accommodated in Yarra Glen or Healesville and visit the property. In plain English, the Tribunal did not consider on-site accommodation necessary for visitors to experience the plantation. This observation supported its concern about the need and policy justification for the additional dwelling.
The decision is most relevant, on its own facts, where a rural-zone proposal combines an additional dwelling with visitor accommodation and relies on a small-scale agricultural activity to justify the tourism component. It illustrates that a claimed business or marketing connection between accommodation and farming may be examined for substance, scale and relationship to the policy purpose, rather than accepted simply because both activities are on the same land [26]–[30].
It is also relevant where a planning proposal includes a second dwelling on a comparatively small rural lot. The Tribunal's concern was that it had not been shown why the additional dwelling was needed and that the tourism explanation did not resolve that concern [27]–[28]. The judgment records the relevant lot as 4.634 hectares and the Schedule 5 maximum lot yield as 40 hectares [6], [11]. Those figures describe this case; the decision does not say that the same result follows automatically on every lot of a similar size.
The decision may be useful where an applicant proposes an agreement preventing subdivision but the planning objection concerns more than future lot division. Here, the Tribunal said that the proposed agreement did not address its separate concern about an additional dwelling being presented as tourism [28].
The judgment is not a blanket prohibition on rural tourism or on tourist accommodation connected with farming. It describes policy support for tourism in appropriate locations and accepts the plantation as a legitimate agricultural activity [11], [30]. Its application turned on the particular proposal, its site, the evidence and the Tribunal's view of the connection between the accommodation and the farm.
The judgment provided here contains no decisions after 29 September 2003, so it does not establish how later courts or tribunals treated O'Neill. No later application, distinction, approval, disapproval or overruling can responsibly be identified from this source alone.
The decision refers to Yarra Ranges Shire Council v Buerfied (2000) VCAT 86887 at paragraph 20. That reference appears in the Council's submissions. The Council relied on a passage about tourism facilities, environmental and visual values, residential amenity and balancing those interests. The reasons do not say that Member O'Leary adopted or applied Buerfied; the Tribunal's own analysis is set out at paragraphs 26–31.
For research purposes, the distinction matters. The existence of a case citation in a judgment does not, by itself, establish that the deciding tribunal adopted every proposition quoted from it. Establishing later treatment of O'Neill, or the subsequent status of the provisions it applied, would require later judgments and current legislation or planning scheme materials, none of which are included here.
The reasons state that the Tribunal was not satisfied there was a demonstrated need for the additional dwelling, but do not set out a detailed evidentiary test for demonstrating such need [27]. They also do not separately analyse whether the proposal met each element of the caretaker-house and lot-area requirements summarised at paragraph 11. The decision's principal concern is policy inconsistency and the lack of demonstrated need, rather than a detailed element-by-element determination of Clause 53.
The Tribunal accepted the plantation as a legitimate agricultural activity but gave only a short explanation of what would make tourism sufficiently connected to agriculture in another case [30]. The reasons do not prescribe a minimum farm size, visitor level, degree of visitor participation, or financial relationship that would establish such a connection. Those matters remain dependent on the applicable planning framework and the evidence in any later matter.
The judgment records concerns raised about landscape effects, building separation, farming land, servicing and Melbourne 2030, but its final reasons focus principally on regional and local policy directions, the additional dwelling and the tourism rationale [14]–[19], [26]–[31]. It does not make a separate, detailed finding on every point raised in the submissions. It would therefore be inaccurate to treat every submission concern as an independent Tribunal finding.
Finally, the source does not show whether planning provisions or policies later changed, or whether later authorities treated the decision as influential. This analysis is limited to the judgment's text. This is general legal information, not legal advice; Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have a qualified Australian lawyer check it.
PLANNING AND ENVIRONMENT LIST VCAT Reference: P1388/2003
Develop additional dwelling, Convert existing dwelling to tourist accommodation, Run in conjunction with Christmas tree plantation, Local Policy, Regional Policy (Clause 53)
RESPONSIBLE AUTHORITY: Yarra Ranges Shire Council
MEDIUM NEUTRAL CITATIONS: [2003] VCAT 1368
Ms J Jones, Town Planner, represented the Responsible Authority.
Mr S Kaylock, represented the Applicant for Review.
1. This is an Application for Review pursuant to Section 77 of the Planning and Environment Act 1987 against the decision of Yarra Ranges Shire Council which refused Application No. YR-2002/2025 for construction of a dwelling and conversion of an existing dwelling to visitor accommodation.
1. The use and development will be detrimental to the environmental qualities and rural landscape character of the area.
2. The use and development is contrary to the provisions of the Yarra Ranges Planning Scheme including Local Planning Policies for Rural Areas (Clause 22.03), Tourism (Clause 22.06), and development in Rural Areas (Clause 22.11).
3. The use and development is not directly associated with a restaurant, other tourist facility or agriculture or farming use of the land.
4. The proposal would prejudice the implementation of the State Government's Metropolitan Strategy `Melbourne 2030'.
3. The permit applicant appealed on the following grounds:
1. The use and development will not be detrimental to environmental or landscape qualities of the area.
2. The use is consistent with the Yarra Ranges Planning Scheme.
3. The use is associated with an agricultural or farming use of the land.
4. The proposal would not prejudice Melbourne 2030.
4. The proposal involves construction of a new dwelling toward the rear of the property. This new dwelling will comprise about 325 square metres and would situated about 20 metres form the north boundary and 15 metres from the east boundary. It is the Applicant's intention to occupy this dwelling with his family. It is then intended to convert the existing dwelling to a small scale tourist accommodation, this would be self-contained dwelling accommodation. The Applicant claims that in conjunction with the recently planted Christmas tree farm, the farm stay will provide a unique opportunity for children to see the development of Christmas trees, planting, pruning and trimming in various seasons, and the chance to "tag a tree" for their own purchase and possible collection at a later time, usually around Christmas.
5. The subject site is located on the eastern side of Houghtons Lane at Tarrawarra which is equidistant from the Old Healesville Road and the Healesville-Yarra Glen Road. This lane is about 7 kilometres east of Yarra Glen and about 8.5 kilometres from Healesville.
6. The subject site has a frontage of about 103.4 metres and a length of about 447.8 metres. Total area is 4.634 hectares. The site is a long established lot. Houghtons Lane is a formed gravel road which links to both Old Healesville Road and Healesville-Yarra Glen Road which are sealed.
7. The site contains an existing single storey dwelling with a floor area of about 120 square metres. There are also outbuildings consisting of a large open garage and farm sheds. There are also various rainwater tanks and a dam.
8. A Christmas Tree Farm has been established on the property and will become operational in 2005.
9. Surrounding development comprise a number of rural landholdings providing mainly for grazing activities to the west, south and east. Vineyards are located to the north and further south-west.
10. The subject site is zoned Rural under the Yarra Ranges Planning Scheme. A permit is required to use land for accommodation and to undertake buildings and works for a Section 2 use.
11. There are various planning controls and policies of relevance in this application including:
* The Upper Yarra Valley and Dandenong Ranges Regional Strategy Plan. Under the Strategy Plan the land is within a Rural 2 Policy Area. Policy 5.07 Construction of Buildings, require that construction of buildings be carried out in a manner compatible with the maintenance and protection of rural, agricultural uses, enhancement of landscape values, water resources, indigenous flora, fauna and habitat. Part 16 of the Regional Strategy Plan relating to tourism facilities, recognises that in Rural Policy Areas a diverse range of tourism opportunities may be allowed in appropriate locations, provided that they enhance the existing overall character of the area and maintain rural and agricultural pursuits, visual and environmental quality and residential amenity. I was advised this policy also emphasises that bed and breakfast uses should preferably be located in existing houses and accommodate a maximum of five persons.
* Clause 53 of the Yarra Ranges Planning Scheme gives effect to the Upper Yarra Valley and Dandenong Ranges Regional Strategy Plan. Under this Clause a permit can only be granted for a second dwelling in the Rural Zone if there is a demonstrated need for a caretaker's house and provided that the lot on which the additional dwelling will be sited has an area that would enable it to be subdivided in accordance with the maximum lot yield specified in the applicable Schedule 5 which applies to the subject land (40 hectares).
12. Other controls and policies of relevance are included in:
* Clause 22.11 Local Policy for Development in Rural Areas
13. At the review hearing both the Responsible Authority and the Permit Applicant tabled and read from detailed written submissions. Mrs Feagan made oral commentary. In addition Mr O'Neill made an oral submission supporting Mr Kaylock's written submission. The Tribunal was provided with an array of information including Panning Scheme polices and documents, locality plans, aerial photographs and details of the proposed use and development.
14. Ms Jones, on behalf of the Responsible Authority, argued the Rural Zone is intended to allow for very limited visitor accommodation in a rural setting. She claimed that the intentions of the Rural Zone and the general provisions of Clause 53 indicate that only a single dwelling is preferred and not visitor accommodation uses. She referred to Clause 35.01-6 of the Planning Scheme and claimed that there is no relationship between the proposed use of the land and the zone purposes, and it is not compatible with the surrounding rural land uses and building densities.
15. Ms Jones argued that the proposed tourist development was contrary to the Rural Areas Local Planning Policy (Clause 22.03). She claimed that the proposal to establish visitor accommodation on the subject site is inappropriate as there is no direct link between visitor accommodation and the agricultural use of the site. She referred to the Applicant's stated intention of providing an opportunity for patrons to experience the many elements of farm life including vegetable growing, chickens, ducks and Christmas trees at various stages of development and contribute towards the annual customer base for tree sales. She argued that the use of the premises to farm Christmas trees, and the small size of the lot, suggests that the extent to which farming work would need to be undertaken is limited, and would comprise mainly of some periodic shaping of the trees. She claimed the remainder of the time, it would seem reasonable to assume that the trees would be left to simply grow, which does not lend itself to providing direct involvement for visitors.
16. Ms Jones argued that the link to an agricultural activity is not direct, and is tenuous at best and claimed:
* There has been no justification for the need to establish visitor accommodation in a rural area that is distant from the Healesville and Yarra Glen townships;
* It would have an impact on the agricultural use of the land due to the extensive area required for the building footprint, driveways, car parking, and septic system;
* There will be fragmentation of farming land as there will be some detriment to the landscape character and local amenity by additional buildings on the land and additional generated traffic.
17. Ms Jones also argued that the proposal is inconsistent with the Local Tourism Policy (Clause 22.06) in that:
* The two buildings are located at opposite ends of the site, and are not clustered together, thus taking up valuable grazing/farming land, and maximising the visual impact of buildings on the site;
* It is not associated with a restaurant, or tourist facility, and the link to agricultural activity established on the same land is tenuous;
* It is not well integrated with the surrounding rural area;
* It can be adequately serviced by a septic system but the land area required cannot be then used for farming or agriculture;
* It is a valuable broadacre farming area that needs to be maintained and protected.
18. Ms Jones also argued the proposal did not meet Clause 22.11 (Development in Rural and other Areas) because:
* There will be proliferation of buildings on the land which are unrelated to the farming use of the land;
* The additional buildings, and their complete separation, will be detrimental to the open landscape character of the area;
* No landscape plans for planting around the buildings have been provided;
* The development is out of character with the open rural landscape of the locality.
19. Ms Jones also argued the proposal was inconsistent with the Metropolitan Strategy - Melbourne 2030. She referred to Amendment VC18 which inserted Clause 57 in the Planning Scheme which prohibited a number of uses in the Green Wedge areas. She also referred to a number of transitional arrangements under Clause 57.03 which allows the proposed development to be considered. She argued that a Christmas tree farm is a very modest form of agriculture and questioned whether the proposed accommodation would comply with the `host farm' definition which is a `farm use to provide accommodation for persons away from their normal place of residence, to experience farm living'.
20. Ms Jones to support her argument referred to Yarra Ranges Shire Council v Buerfied (2000) VCAT 86887, and in particular paragraph 39 which stated:
"the Tourism Policy at Clause 22.06 is intended to locate tourist facilities away from areas where they may have a detrimental impact on permanent residents or where they could compromise the existing environmental and visual values. There are no extenuating circumstances to allow a tourism accommodation facility in a separate building in this area, contrary to the policy.
The non-compliance may appear minor, but this matter deals with an important principle of maintaining a balance between tourism, the environment and protection of residential amenity."
21. Ms Feagan argued two points to support rejection of the application. Firstly she argued from a selfish point of view it would be disappointing to see a new dwelling at the rear of the subject site which in her opinion would detract from the rural landscape. Ms Feagan also argued that there were other planning implications of this proposal and it appeared to be inconsistent with the intent of the Planning Scheme. She claimed there would be a permanent loss of farming land and there would always be two dwellings on the land. Whilst she acknowledged the applicant proposed Section 173 Agreement which would prohibit subdivision of the land, she claimed there would be no need for the Section 173 Agreement if the proposed development was not approved.
22. Mr Kaylock on behalf of the Permit Applicant, provided a different view of the relationship of the proposed use in the State and Local Planning Policy Framework. He argued that the Applicant was attempting to operate the land in a sustainable way by conducting a bone fide agricultural use whilst also providing for his family. He advised that his client had undertaken extensive research as to what was an appropriate land use which found that Christmas tree farming was appropriate in that it did not rely on extraneous water resources or chemicals. He argued that the proposed tourist accommodation would value add to the primary production of the land and would be an appropriate related activity with this agricultural use.
23. Mr Kaylock agued that the proposal was consistent with the Local Tourism Policy and argued that the tourism use is located, designed and sited in a manner which protects and enhances the special environmental and landscape characteristics of the area. He argued that while the area is used widely for grape growing and grazing, other uses such as Christmas trees are encouraged under Local Policy. He claimed that visually, Christmas trees will have the same impact on landscape character as grape vines. He claimed the new dwelling will not present as a concentration of facilities within the site and in fact the location of this dwelling at the rear of the property will continue the rural character of the area. He claimed that the dwelling is generally remote from view lines, particularly from adjoining properties and heavily screened by existing boundary planting.
24. Mr Kaylock argued the site has little contribution to remnant vegetation and therefore has limited environmental attributes.
25. Mr Kaylock argued that the second ground of refusal was not tenable because his clients were attempting to provide sustainable agricultural activity on the land. He referred to the Christmas tree farming and claimed this is an intensive and viable option for this parcel of land. He claimed it should be recognised and encouraged as a low impact activity suitable for small land holdings. His principal arguments to support the proposal were:
* It continues the use of the land for sustainable agriculture;
* It compliments the environmental and landscape character of the area - it is a minimal change, low-impact development;
* Enhances the productive capacity of the land beyond grazing and by association with family accommodation;
* The proposed dwelling is sited in response to the site constraints, where it will have the least impact on high quality land and sufficiently separated from water bodies;
* It has sufficient setbacks to ensure conflicts with abutting property uses are minimised and sufficient room to supplement any screening planting;
* It introduces another agricultural activity to this part of the valley diversifying the economic base and creating another seasonal activity for tourists (Christmas tree collections);
* As commercial accommodation it is directly associated with an agricultural activity undertaken on the land;
* Enhances the capacity of the Christmas tree farm to remain viable and sustainable as it continually exposes patrons to its produce;
* Provides another activity and agriculture as an alternative to the Dandenong Ranges;
* The accommodation is directly related to promotion and scale of the agricultural products produce on the land;
* Can treat waste water within its own boundaries, and
26. I consider the principal reason that this application should not be upheld is because the proposal it is inconsistent with regional and local policy directions. I am concerned about allowing a second dwelling to develop on a relatively small agricultural lot in this location. It seems to run counter Part 16 of the Regional Strategy Plan and more particularly Clause 53 of the Yarra Ranges Planning Scheme.
27. I am not satisfied there is a demonstrated need to provide an additional dwelling on a relatively small rural lot and that it may place pressure on other similar size landholdings to seek similar second dwellings. This in turn may put pressure on the Responsible Authority for applications for excision or subdivision on the basis of existing dwellings.
28. I acknowledge the Applicant was prepared to have a Section 173 Agreement inserted on the Title prohibiting further subdivision of the land, but I am not satisfied that this is just a subdivision issue. I am also concerned that a second dwelling would be developed under the guise of "tourism".
29. I note that during her submission Ms Jones' referred to the Ms Feagen's written objection to the Council, and one of those concerns related to the desire to avoid future conflicts between agricultural and non-agricultural activities. I consider this proposal would add an additional non-agricultural element which was both unnecessary and un justified in this location.
30. There was substantial submissions by Mr Kaylock about the legitimacy and viability of a Christmas tree plantation on this lot. As I explained at the hearing I saw the existing Christmas tree plantation as a legitimate agricultural activity, however I also share the concerns of the Responsible Authority about introducing a tourist facility which would (to a substantial degree), rely on or derive its principal clientele from persons wishing to visit a fairly small Christmas tree farm. Whilst it would seem a novel idea that families could visit and tag a tree for later purchase, I suspect this is stretching the intention of both the regional and local policy which supports tourism activities provided that they enhance the existing rural pursuits on the land. It could just as easily be said that a day tripper from metropolitan Melbourne could take advantage of this marketing tool.
31. Similarly I am not satisfied that a normal tourist to the Yarra Valley could not be accommodated in the townships of either Yarra Glen or Healesville and visit the site rather than need to be accommodated on the site to enjoy any novel or unique features of this property.
O'Neill
Yarra Ranges SC [2003] VCAT 1368
The Responsible Authority's decision is affirmed. No permit shall issue.