POLICY - interpretation or application of policy

Guidelines: Planning permit applications in open, potable water supply catchment areas (May 2009 - interpretation of Ministerial Guidelines - principles of interpretation that apply

In the circumstances of this case, a difference of opinion arose between two referral authorities - Goulburn Murray Water and Central Highlands Regional Water Authority - about the status of the Tullaroop catchment and whether it is a potable water supply catchment within the meaning of the Guidelines: Planning permit applications in open, potable water supply catchment areas (May 2009). The Guidelines state that a potable water supply catchment provides water resources to a reservoir (or water storage) used primarily for domestic water supply purposes. The issue is whether this means that:

• The water resources from the catchment (considered as a whole) are used primarily for domestic water supply purposes; or
• The water resources from any individual reservoir or water storage (receiving water from the catchment) are used primarily for domestic water supply purposes.

• The definition in the Guidelines of a potable water supply catchment means a water supply catchment that provides water resources to a reservoir (or water storage) and the reservoir (or water storage) is used primarily for domestic supply purposes. It is not limited to a situation where the water resources from the catchment as a whole are used primarily for domestic supply purposes.
• The Tullaroop catchment is therefore an open, potable water supply catchment within the meaning of the Guidelines.

Section 149B Planning and Environment Act 1987 - declaration - _Guidelines: Planning permit application in open, potable water supply catchment area_s (May 2009) - what is an open, potable water supply catchment area?

Hepburn Shire Council, Goulburn Murray Water - Tatura, Central Highlands Regional Water Authority, Mansfield Shire Council, Towong Shire Council, Murrindindi Shire Council, Minister for Water, Minister for Heath

Simpson v Ballarat CC (includes Summary) (Red Dot) [2012] VCAT 133

1. Pursuant to section 127 of the Victorian Civil & Administrative Tribunal Act 1998, the statement of grounds filed by Central Highlands Regional Water Corporation is amended in accordance with the amended statement of grounds dated 28 October 2011.
2. Pursuant to section 149B Planning and Environment Act 1987 I make the following declarations:
   • (a) The definition in the Guidelines: Planning permit applications in open potable water supply catchment areas (May 2009) of a potable water supply catchment means a water supply catchment that provides water resources to a reservoir (or water storage) and the reservoir (or water storage) is used primarily for domestic water supply purposes.
   • (b) The Tullaroop catchment is an open, potable water supply catchment within the meaning of the Guidelines: Planning permit applications in open potable water supply catchment areas (May 2009).

Mr Neil Haydon, solicitor and town planner, of Beveridge Williams and Co Pty Ltd

Ms Emma Pepler of counsel, by direct brief. She called as a witness:

• Dr Mark Bailey, Acting Manager Water Resources, Goulburn Murray Water

Mr Peter O'Farrell of counsel, instructed by Norton Rose

For Mansfield Shire Council, Towong Shire Council and Murrindindi Shire Council

Section 149B Planning and Environment Act 1987

Environment Significance Overlay - Schedule 3 (Water Catchment Areas)

Crown Allotment 3 Section R Parish of Creswick, Schwarz Road, Bald Hills

The land is in an area that is not serviced by either reticulated water or reticulated sewerage

The land is in the Tullaroop Reservoir Catchment. There are two relevant referral authorities in respect of this catchment:

• Goulburn Murray Water is the owner and manager of the Tullaroop Reservoir, which collects water from the Tullaroop catchment area.
• Central Highlands Water supplies water, including from the Tullaroop Reservoir, to the Maryborough water supply network.

Rozen v Macedon Ranges SC [2009] VCAT 2746

1. This proceeding is an application for declarations under section 149B(1)(a) of the Planning and Environment Act 1987 as follows:
   1. For the purpose of administering the 'Department of Planning and Community Development Guidelines' titled 'Planning permit applications in open, potable water supply catchment areas', May 2009, should the Tullaroop Catchment be properly defined as being an open, potable water supply catchment on the basis that it is not primarily used for domestic water supply purposes?
   2. For the purpose of considering and determining the application for review in VCAT Ref No. P1178/2011, and in the event that the Tullaroop Catchment is not defined as being an open, potable water supply catchment, what weight, if any, should the Tribunal give to the 'Department of Planning and Community Development Guidelines' titled 'Planning permit applications in open, potable water supply catchment areas', May 2009, pursuant to s. 60(1A)(g) of the Planning and Environment Act 1987?
2. The applicant has applied for a permit for a dwelling on the subject land. The permit application was refused by the responsible authority (Ballarat City Council) based on the objection of the referral authority, Central Highlands Water. The reasons for refusal are set out in Appendix A. Essentially, the reasons for refusal are that the application does not comply with the Guidelines for Planning permit applications in open, potable water supply catchment areas because, if approved, the density of development would increase further beyond the dwelling density of one house per 40ha specified in the Guidelines. This proposal is the subject of an application for review in application P1178/2011
3. There is a difference of opinion between the two relevant referral authorities about whether or not the Tullaroop catchment should be defined as an 'open potable water supply catchment' for the purpose of administering the Department of Planning and Community Development Guidelines: Planning permit applications in open potable water supply catchment areas' (May 2009) (the Guidelines). Central Highlands Water says that the Tullaroop catchment is an open potable water supply catchment for the purposes of the Guidelines and hence the Guidelines apply. Goulburn Murray Water contends otherwise. This proceeding for declarations seeks to resolve this conflict.
4. Because this proceeding raises important issues of interpretation and policy relating to the protection of water catchments beyond the Tullaroop catchment area, an opportunity was provided to other authorities and municipalities to participate in the proceeding. The municipalities of Hepburn, Mansfield, Murrindindi and Towong applied to be joined as parties and appeared at the hearing. The Minister for Water and the Minister for Health were also joined as parties. They made written submissions, which I have considered, but they did not appear at the hearing.

1. At the commencement of the hearing, the applicants applied to withdraw their application for declarations on the basis that they now accept that the Tullaroop catchment is an open potable water supply catchment for the purposes of the Guidelines. With the exception of Central Highlands Water, the other parties to the proceeding opposed the withdrawal.
2. For reasons given orally at the hearing, I refused to give leave to the applicants to withdraw the proceeding. Essentially, the same issues requiring determination in this proceeding would arise as questions of law to be determined in application P1178/2011. Although parties to the present proceeding could apply to be joined as parties to application P1178/2011, I held it was more efficient to deal with the issues in the context of the present proceeding given the parties' presence at the hearing and their preparation for it. The broader implications of any declarations made in the present proceeding, beyond the particular merits of the permit application in application P1178/2011, made it appropriate for the present proceeding to continue. The nature of the declarations are such that the same application could have been made by any of the present parties, not just the applicants.

... to assist responsible authorities and water corporations in their assessment of planning permit applications for use and development of land within all open, potable water supply catchments in Victoria.

1. The Guidelines have been adopted by the Minister for Planning for the purposes of section 60(1A)(g) of the Planning and Environment Act 1987. This means that they are a matter the responsible authority, if the circumstances appear to so require, may consider before deciding on an application.
2. The Guidelines state that they apply to all open, potable water supply catchments declared to be special water supply catchment areas under Division 2 of Part 4 of the Catchment and Land Protection Act 1994.
3. There is no dispute that the Tullaroop Reservoir catchment has been declared to be a special water supply catchment area under the Catchment and Land Protection Act 1994.
4. The dispute, which arises in this case, is not about the status of the Tullaroop catchment as a special water supply catchment area, but whether it is an open, potable water supply catchment. Under the heading 'What is an open, potable water supply catchment?', the Guidelines state:

A potable water supply catchment provides water resources to a reservoir (or water storage) used primarily for domestic water supply purposes. There are two types of potable water supply catchments. An 'open' catchment is where part or all of the catchment area is in private ownership and access to the catchment is unrestricted. A 'closed' catchment means that the whole of the catchment area is publicly owned and public access is prohibited.

1. There is no dispute that the Tullaroop catchment is an open catchment. The issue is what is meant by the words ...provides water resources to a reservoir (or water storage) used primarily for domestic water supply purposes. Does this mean that a potable water supply catchment is -
   • A catchment that provides water resources which are used primarily for domestic water supply purposes? or
   • A catchment that provides water resources to any reservoir or storage used primarily for domestic water supply purposes?
2. In both cases, the word 'primarily' would be taken to mean 'mainly' or 'predominantly'. In the first interpretation, the word 'primarily' would attach to the water resources in the catchment as a whole and in the second interpretation the word 'primarily' would attach to the water resources in the reservoir or water storage.
3. The pertinent factual background, which gives rise to these alternative interpretations, is not in dispute and is as follows.

1. The Tullaroop catchment has an area of 722 square kilometres that collects water for supply into the main Tullaroop Reservoir together with several smaller reservoirs.
2. The Tullaroop catchment contains water resources that equate to 81,335ML. Of this entire water resource, only 3,515ML or 4.3% of the total quantity is used for domestic water supply purposes. The water resource from the catchment as a whole is primarily used for irrigation purposes.
3. In addition to the Tullaroop Reservoir (the largest water storage in the catchment), the Tullaroop catchment also contains five other water storages being Newlyn, Hepburn, Cosgrave, Dean and Russell. Cosgrave, Dean (when in service) and Russell (when in service) are used predominantly for domestic water supply purposes.
4. Water resources from the Tullaroop Reservoir are also supplied to the Centenary Reservoir (just outside Maryborough). Water is pumped some 11km to the Centenary Reservoir where the water is then combined with other water resources received from the Talbot Reservoir and Evansford Reservoir, which are both located outside the Tullaroop catchment. The Centenary Reservoir (180ML capacity) acts as both a holding and settling basin prior to treatment and then distribution into the Maryborough urban water supply network by Central Highlands Water. Sixty percent of the water resource from the Centenary Reservoir is used for domestic water supply purposes.
5. Whilst there is some variance to these figures from year to year and as a result of the recent drought, the relative proportions are not significantly altered. It is generally accepted that whilst several water storages in the Tullaroop catchment are used primarily for domestic water purposes, the majority of the water resource from the catchment is not used for domestic water supply purposes.

1. There are two criteria, both of which must be satisfied, in order for the Guidelines to apply in relation to any given catchment.
2. One criterion is that the catchment is declared to be a special water supply catchment area under Division 2 of Part 4 of the Catchment and Land Protection Act 1994. I find that this requirement is satisfied in the case of the Tullaroop catchment.
3. The other criterion is that the catchment satisfies the definition of 'open, potable water supply catchment'. This expression is defined in the Guidelines as a catchment which provides water resources to a reservoir (or water storage) used primarily for domestic water supply purposes. The central issue in this proceeding is whether the words 'used primarily for domestic water supply purposes' within the definition of open, potable water supply catchment require:
   • The water resources from the catchment (considered as a whole) to be used primarily for domestic water supply purposes; or
   • The water resources from any individual reservoir or water storage (receiving water from the catchment) to be used primarily for domestic water supply purposes.
4. In interpreting the Guidelines, the councils[1] submitted that there are parallels between Ministerial Guidelines and planning permits and, to that end, the decision by Justice Bell in Vestey v Warrnambool CC[2] is of relevance. Adopting the approach in Vestey, the councils argue that, in interpreting the Guidelines, the Tribunal:
   • Ought not have recourse to exotic legalism or adopt an over technical approach;
   • Needs to consider the words under review in the context of the whole of the Guidelines;
   • Ought seek to discern the true intention of the Guidelines and the words under review; and
   • Ought be prepared to depart from the literal reading of the Guidelines even in the absence of 'absurdity' in the literal reading.
5. I agree with the councils that a Ministerial Guideline is not an Act or subordinate legislation to which section 35 of the Interpretation of Legislation Act 1984 can be applied[3]. Nevertheless, I do not consider that the principle embodied in section 35 has no relevance to the interpretation of a Ministerial Guideline. The principle is that a construction that would promote the purpose or object underlying the Guideline (whether or not expressly stated in the Guideline) shall be preferred to a construction that would not promote that purpose or object.
6. It seems to me that the modern approach to interpreting legislation, where particular provisions are interpreted in the context of the object and purpose at the first instance, and not just in the case of ambiguity,[4] is particularly relevant to interpreting the Guidelines where the purpose of the Guidelines is to assist in deciding whether to grant a planning permit under a planning scheme (subordinate legislation) in accordance with the Planning and Environment Act 1987.
7. The Guidelines do not act as a control (such as legislation) nor do they define the ambit of a permission to do something (such as conditions in a planning permit). Rather, they are intended to provide guidance or instruction to decision makers about how to exercise a discretion either generally or in a particular circumstance. Guidelines are not usually expressed in formal, technical or legal language. They are usually expressed in plain English format and are intended to have a wide non-expert readership. Because of this, I would support the application of the principles espoused by the councils when interpreting Ministerial Guidelines. However, I do not consider that these principles are at odds with the broader principle of interpretation of identifying the object and purpose of the Guidelines and interpreting them in that context at first instance, not just in the case of ambiguity.

1. The definition of a potable water supply catchment in the Guidelines reads:

A potable water supply catchment provides water resources to a reservoir (or water storage) used primarily for domestic water supply purposes.

1. There are two options being advanced as to the meaning of these words. The first option put forward by Goulburn Murray Water and the councils requires the definition in the Guidelines to be read as follows:
   • a potable water supply catchment provides water resources... used primarily for domestic water supply purposes.
2. The second option put forward by Central Highlands Water requires the definition to read as follows:
   • a potable water supply catchment provides water resources to a reservoir (or water storage), which is used primarily for domestic water supply purposes.
3. The problem with the first option is that it requires taking out the words 'to a reservoir (or water storage)' from the definition. If these words are taken out, then it must be asked what meaning or effect should be given to these words? Why would they have been included if they were not intended to be the words to which the subsequent words - used primarily for domestic water supply purposes - applied?
4. In my view, there is no satisfactory answer to these questions if the first option is preferred. If it was intended that the Guidelines would apply only in a water supply catchment where the water resources from the catchment as a whole are used for primarily for domestic water supply purposes, there would have been no need to include the additional words 'to a reservoir (or water storage)'. It would have been sufficient to say simply that a potable water supply catchment supplies water resources used primarily for domestic water supply purposes. The addition of the words 'to a reservoir (or water storage)' must be given a meaning. They cannot be ignored. By including these words in the definition, the meaning is changed from that of the first option. In my view, the words which follow these words - used primarily for domestic water supply purposes - must apply to and describe the reservoir or water storage.
5. On this basis, the definition of a potable water supply catchment needs to be read in terms of the second option as follows:

A potable water supply catchment provides water resources to a reservoir (or water storage), which is used primarily for domestic water supply purposes.

1. This means that as soon as a water supply catchment provides any water resources to a reservoir, and that reservoir is used primarily for domestic water supply purposes, the catchment becomes a potable water supply catchment. This is irrespective of the proportion of water from the catchment as a whole that is used for domestic water supply purposes. Thus, in the case of the Tullaroop catchment, because water is supplied to the Centenary Reservoir and the Centenary Reservoir is used primarily for domestic water supply purposes, it means that the total catchment is a potable water supply catchment. It is not relevant that the overall proportion of water resources from the Tullaroop catchment as a whole used for domestic supply purposes is only 4.3% (or thereabouts).
2. In addition, water resources from the Tullaroop catchment are also provided to the Cosgrave, Dean and Russell Reservoirs, which are used primarily (100%) for domestic water supply purposes. The Newlyn Reservoir is also provided with water from the Tullaroop catchment and provides 58% for domestic water supply purposes. Whilst the volumes and hence proportion of water resources from the catchment used for domestic water supply purposes are small, the provision of water resources to these reservoirs is still significant in terms of the definition of an open, potable water supply catchment within the Guidelines. The provision of water resources to these reservoirs is also significant in terms of the communities that use these resources, which brings me to a consideration of the purpose or object of the Guidelines.

1. The above interpretation is based on what I consider to be the plain meaning of the words used in the Guidelines. However, it is also supported by what I consider to be the purpose or object of the Guidelines.
2. In addressing what is an open, potable water supply catchment, the Guidelines identify that because of the risks to public health, all use and development in open, potable water supply catchments should be sited and managed to protect the quality of water collected from the catchment. The need to protect public health by maintaining acceptable levels of water quality flowing into, and stored in, water storages is emphasised in the Guidelines. In particular, they state that:

The proper application of the precautionary principle requires consideration of the cumulative risk of the adverse impact of the on-site waste water/septic tank systems on water quality in open, potable water supply catchments resulting from increased dwelling density.

1. The dwelling density provision in Guideline 1 of no greater than one dwelling per 40 hectares (1:40 ha) is one of the most contentious aspects of the Guidelines the one causing particular concern to councils. I will deal specifically with this concern later. However, the criterion of one dwelling per 40 ha is no more than a strategy to achieve the primary objective of the Guidelines, which I consider is to protect water quality for domestic supply purposes.
2. As a matter of general principle, I consider it is the quality of water for the highest purpose for which the water resources from a catchment will be used that is of greatest importance. As submitted by Central Highlands Water, if water in the Tullaroop Reservoir is contaminated, it is beside the point that such contamination may still mean the water is fit for the majority of water users for irrigation purposes when such contamination may pose a risk to public health when the resources are used for domestic water supply. It is not possible to separate out the water in the reservoir used for domestic water supply purposes from the water used for irrigation. So far as the City of Maryborough (for example) is concerned and the public health of its residents, it is irrelevant that only 4.3% of water from the Tullaroop Reservoir is used for domestic purposes. Because Maryborough is supplied with water from Centenary Reservoir, which in turn is supplied with water from Tullaroop Reservoir, if that water is contaminated, then the public health of the Maryborough community will be at risk.
3. From a policy perspective, it is important to protect the water quality in any catchment which provides water resources to a reservoir where water from that reservoir is used primarily for domestic water supply purposes.
4. This purpose of protecting water quality for domestic supply purposes was highlighted by the Ministers for Water and Health in their submission to the Tribunal. They refer to the risk to human health from the cumulative impact of onsite waste water treatment facilities in open potable water catchments. To minimise the risk to human health posed by contamination of drinking water supply, a precautionary approach needs to be taken by water suppliers, water store managers and councils. The Guidelines make specific reference to the precautionary principle in the context of open, potable water supply catchments. The submission refers to the decision of the Tribunal in Rozen v Macedon Ranges SC[5] and the Supreme Court in Rozen v Macedon Ranges SC & Anor[6], and findings that the precautionary principle should be applied to planning decisions made in circumstances where the Guidelines apply. This approach is supported by the Ministers. They say in their submission:

We note, in particular, the following observations made by the Tribunal in Rozen v Macedon Ranges SC on the relevance of the precautionary principle to the management of open potable water catchments.[7] The Tribunal noted that any risk to human health ought to be regarded as serious and when considering development in open potable water supply catchment areas, risk to human health is highly relevant. In light of its serious nature, the Tribunal observed that it must be given priority over other planning objectives. This priority is recognised in the planning policy context of the planning scheme. Water industry legislation and policy provide detailed guidance as to how to protect water resources and avoid serious risk to human health. The priority given to an assessment of risk to human health and safety is given clear expression in the Guidelines. Again, the Ministers support this approach.

The circumstances in which the Guidelines apply are to be gleaned from the construction of the Guidelines themselves. The Guidelines are not drafted in the manner of legislation or subordinate legislation. It is submitted that this heightens the need to have regard to (and to give effect to) the underlying purpose of the Guidelines, when any question arises in relation to the interpretation of the Guidelines.

1. In the context of my decision in this proceeding, I do not intend to repeat all that was said by the Tribunal in Rozen v Macedon Ranges SC about the application of the precautionary principle and about the risk to human health in open, potable water supply catchments. The Supreme Court in Rozen v Macedon Ranges SC & Anor found that there was no error in the Tribunal's analysis and conclusions about these issues, which was supported by the evidence given to the Tribunal in the Rozen case.
2. I therefore rely upon the Rozen decisions, as well as the wording of the Guidelines themselves, to find that the purpose or object of the Guidelines is to protect water quality for domestic supply purposes. I find that the interpretation of the Guidelines embodied in the second option promotes the purpose or object underlying the Guidelines compared to the interpretation embodied in the first option, which I find would not promote that purpose or object. I therefore conclude that having regard to the purpose or object of the Guidelines, the definition of a potable water supply catchment must be read as follows:

A potable water supply catchment provides water resources to a reservoir (or water storage), which is used primarily for domestic water supply purposes.

Are there any reasons not to prefer the second option?

1. Goulburn Murray Water and the councils advanced a number of reasons why they say that the first option should be preferred and that the Guidelines should be interpreted as applying only in circumstances where the water resources from the catchment as a whole are used primarily for domestic water supply purposes. They include:
   • The constraints on development and subdivision imposed by the Guidelines, especially Guideline 1.
   • The additional work generated for referral authorities by the widespread application of the Guidelines.
   • The lack of any evidentiary basis supporting the dwelling density of 1:40ha in Guideline 1.
   • The overriding weight being given to the dwelling density of 1:40ha in Guideline 1 in various Tribunal decisions.
   • The absurd outcome that would arise if the word primarily in the definition was intended to apply to any reservoir or storage within a broad catchment.
2. Most of these arguments are focussed on the origin or the outcomes of an application of the Guidelines. Essentially the position being put is that the outcomes are so onerous that such a widespread application of the Guidelines cannot have been intended if option 2 is adopted. However, I do not accept this proposition having regard to the purpose of the Guidelines and the importance of potable water supply catchments in practical and policy terms. I am not persuaded that any of these arguments provide a sufficient basis for preferring the interpretation embodied in option 1 to that of option 2 for the reasons set out below.

1. Guideline 1 deals with density of dwellings. It provides as follows:

Where a planning permit is required to use land for a dwelling or to subdivide land:

➢ the density of dwellings should be no greater than one dwelling per 40 hectares (1:40 ha); and

➢ each lot created in the subdivision should be at least 40 hectares in area.

This does not apply 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. The argument put by Goulburn Murray Water and the councils is that when the strict interpretation for which Central Highlands Water contends by way of option 2 is combined with the paramount importance that is afforded to water quality under the Guidelines (and in particular the dwelling density found in Guideline 1) there is a very real risk that development within a number of local government areas will be severely limited. Various examples were given of the way in which constraints on development and subdivision were affected by an application of Guideline 1.
2. I acknowledge that the Guidelines, especially Guideline 1, constrains development within open, potable water supply catchment areas unless the relevant authorities undertake the necessary strategic work to come within the exception to Guideline 1. This was acknowledged in the Rozen decision where the Tribunal said:

[88] We accept that the special needs of open potable water supply catchments justify a limitation on dwelling density that operates over and above any zone provisions. In the absence of a specific water catchment overlay, the Government has clearly expressed a strong policy position to limit dwelling density to one per 40 hectares by adopting the Guidelines: planning permits in open, potable water supply catchment areas (May 2009).

(137) The Macedon Ranges Planning Scheme is full of references to the need to protect water resources in open, potable water catchments and the need to limit development to achieve this objective. As time goes on, development within the catchments will reach a critical point where it will be necessary to say no to further development if this objective is to have any meaning.

1. The Supreme Court, in its Rozen decision[8], did not disagree with this finding by the Tribunal or its conclusion that when considering development in open potable water supply catchment areas, risk to human health is highly relevant, and, because of its serious nature, must be given priority over other planning objectives. I am therefore not persuaded that the potential constraints on the development of dwellings and subdivision within catchments to which the Guidelines apply is a reason why the Guidelines should be more narrowly interpreted.
2. The application of the criteria in Guideline 1 may well limit development, but if this strategy serves to achieve the objective of protecting water quality for domestic supply purposes, I do not consider this is an absurd outcome or such an unreasonable outcome that the Guidelines should be narrowed in their application by interpreting a potable water supply catchment as meaning a catchment where water resources from the catchment as a whole must be used primarily for domestic water supply purposes.
3. Where other development objectives within a catchment are considered to be important, there is provision in the Guidelines for Guideline 1 not to apply where an integrated plan for the catchment has been prepared.
4. The onus is upon councils and other authorities to prepare such plans if they are concerned about any constraints on development, which may be an outcome of applying the Guidelines. Such a plan must address both land use planning issues and the cumulative impact of onsite waste water septic tank systems. In other words, the risks to public health must be addressed if there is to be any departure from the application of Guideline 1. The Guideline cannot be ignored in favour of a greater emphasis on development.
5. Like other natural resources, there is no flexibility about the location of a catchment, unlike the location of dwellings Dwellings are not dependent on their location within a catchment. On the other hand, a catchment is a natural system. Water harvesting for a particular reservoir is confined by the physical parameters of the catchment.
6. Water is a vital commodity. The highest level of importance of water resources collected in a catchment attaches to domestic water supply purposes because of the potential impact upon human health of the quality of the water supplied for this purpose. Use of water resources for agricultural and other purposes present lesser risks. If water is suitable for domestic supply purposes, it will be suitable for agriculture, but not vice versa.
7. In Rozen, the Tribunal said:

[18] In our view, any risk to human health must be regarded as serious. We consider this is implicit in the terms of the Safe Drinking Water Act 2003 and the Australian Drinking Water Guidelines. Therefore, when considering development in open potable water supply catchment areas, risk to human health is highly relevant and, because of its serious nature, must be given priority over other planning objectives. This priority is recognised in the planning policy context of the planning scheme. Water industry legislation and policy provide detailed guidance as to how to protect water resources and avoid serious risk to human health. Essentially, this is a multiple barrier approach. It is in this context that the Guidelines: planning permit applications in open, potable water supply catchment areas must be considered and applied - as one barrier in a multiple barrier approach to protect drinking water quality.

1. The Guidelines include two strategies by which the risk to human health represented by the cumulative impact of onsite waste water/septic tank systems can be avoided. One is by the application of Guideline 1 limiting dwelling density and subdivision. The other is by preparation of the type of integrated plan identified in the exception to Guideline 1. However, in the absence of such plans, the Guidelines are intended to apply and this means that the constraints on development inherent in Guideline 1 become inevitable. There is nothing in the Guidelines themselves or the evidence and conclusions of the Rozen decisions that leads me to conclude that this outcome is not intended or is a reason for reading down the application of the Guidelines properly interpreted according to modern principles of interpretation.
2. Thus, I conclude that in open, potable water supply catchments the Guidelines recognise that the value of catchments for domestic water supply purposes takes precedence over development for dwellings and subdivision. Therefore any constraints on development or subdivision are not a reason for saying that a more limited interpretation should apply as to what constitutes an open, potable waste supply catchment.

1. Goulburn Murray Water, advised that it is responsible for an area covering 68,000 square kilometres. It manages 70% of Victoria's water resources (by volume). Goulburn Murray Water receives approximately 1500 planning permit application referrals per year. Of these applications, approximately 60 - 70% are located within a special water supply catchment area.
2. I acknowledge the burden that this number of referrals may place upon the resources of Goulburn Murray Water. Nevertheless, whilst Goulburn Murray Water may have a practical reason for supporting option 1, reducing its workload is not a reason for supporting one interpretation of the Guidelines over another.

1. Hepburn Shire Council was particularly critical of the fact that there was no evidentiary basis supporting what it called "the crude rule of thumb" of a dwelling density of 1:40 ha. It was also critical about the lack of logic behind calculating dwelling density for a particular application by looking at a limited area around the application site. It noted that it is also unclear if dwelling density calculations are to include sewered dwellings.
2. In Rozen, the Tribunal acknowledged that the failure to provide any guidance about how to measure dwelling density under the Guidelines was a shortcoming. Nevertheless, it held that the absence of such guidance does not detract from the weight to be placed on the Guidelines. It simply means that there is some flexibility to apply the Guidelines in a pragmatic way.[9]
3. The Tribunal in Rozen also addressed the bases for the 1:40 ha dwelling density limitation in the Guidelines. The lack of an evidentiary basis for the 1:40 ha limitation has always been a criticism of the Guidelines and the previous interim Guidelines, which they replaced. Evidence was given in the Rozen case about why the 1:40 ha limitation was appropriate:

[64] Dr Deere supported the 1:40 ha dwelling density limitation in both the Interim Guidelines and the current Guidelines because:

• It provides an adequate benchmark for protection of the water supply from human pathogens. It is not a precise rule, but rather a good rule of thumb that provides a buffer for things to go wrong.
• The density limitation of 1:40 ha provides for safe irrigation practices from onsite waste water management systems ensuring protection of the environment from salts, nutrients and hydraulic flows, as well as the protection of human health relating to the reduction and lack of movement for pathogens into water sources.
• Onsite waste water treatment systems present a higher risk to water quality, and higher densities of dwellings with such systems provide a higher water quality risk. He referenced a number of studies reporting poor compliance for onsite systems and a failure to meet performance criteria for aerated waste water treatment systems, which is the type of system proposed in this case.
• The dwelling density across the catchment already exceeds the limitation of 1:40 ha.

[65] Dr Deere made the point that water quality in the Campaspe Reservoir is already compromised. In his view, the catchment is at a point where it is uncomfortably close to the limits in terms of current treatment systems. It is not yet at a point where Western Water needs to abandon its attempts to manage the catchment to maintain water quality and opt instead for the installation of much higher cost treatment systems. However, he emphasised that the margin of safety that the one dwelling per 40 hectare density limitations sought to achieve was not so great as to justify the risk of going below the 1:40 ha dwelling density if you have a choice.

1. In my view, it is not relevant whether the 1:40 ha limitation was originally selected on a scientific or evidentiary basis, or as a rule of thumb. I consider that the evidence in Rozen established that it was a good rule of thumb and that it should be supported in the context of a document such as the Guidelines. To move away from the rule of thumb, authorities need to undertake the necessary strategic land use and risk assessment planning for their catchments that is envisaged by the exception in Guideline 1.
2. As I have discussed above, the density limitation of 1:40 ha in Guideline 1 deliberately constrains development in an open potable water supply catchment. That is an intended outcome of Guideline 1. Hepburn Shire Council submitted that if, as is likely, the Tullaroop and Eppalock catchments (amongst others) are already over the 1:40 density, this means that all applications to subdivide or where permission is required for the use of a dwelling should be refused. It submits:

1. In my view, this is not an absurd conclusion. Rather, it may be the inevitable conclusion arising from an application of the Guidelines and as a strategy to protect a commodity vital to communities. As the introduction to the Australian Drinking Water Guidelines states:

Safe drinking water is essential to sustain life. Therefore, every effort needs to be taken to ensure that drinking water suppliers provide consumers with water that is safe to use.

1. Following the latest Tribunal and Supreme Court decisions in Rozen, various divisions of the Tribunal have relied upon what was said in those decisions and have rejected applications for dwellings and subdivisions where the dwelling density limitation of 1:40 ha has not been met or a minimum lot size of 40 hectares is not achieved in circumstances where a consideration of the Guidelines is relevant. It was submitted by Goulburn Murray Water that the Tribunal is raising the Guidelines to a level of application, rather than consideration, that is not warranted. The Tribunal has applied the Guidelines as being of paramount importance, which should take priority over competing policy objectives.[10]
2. Essentially, this submission is critical of the weight that the Tribunal is giving the Guidelines, in particular Guideline 1. I do not consider it is relevant to comment on how other Tribunal members have dealt with the Guidelines in other cases or the weight they have placed upon them. The Guidelines are one consideration among many set out section 60 of the Planning and Environment Act 1987 that must be considered before deciding on an application. In the particular circumstances of Rozen, the priority to be given to the risk to human health in open potable water supply catchment areas compared to other planning objectives was held to be recognised in the planning policy context of the planning scheme in that case. The planning policy context will vary from case to case. However, having regard to the State Planning Policy Framework, in particular clause 14.02-2 and clause 12[11], if land is in an open, potable water supply catchment and the Guidelines apply, it would be unusual if it was not appropriate to place considerable weight on the Guidelines and to conclude that the risk to human health should be given priority over other planning objectives. Nevertheless, the weight to be placed on various matters and the priority to be given to various planning objectives will always be a matter to be determined on the particular facts and circumstances of each case.
3. Overall, I do not consider that the implications of the latest Rozen decisions, by the Tribunal and the Supreme Court, which are being reflected in other Tribunal decisions, are reasons for preferring one interpretation of the definition of the Guidelines to another.

1. It was submitted by Goulburn Murray Water and the councils that an absurd outcome would arise if the interpretation in option 2 was adopted, which would mean that the Guidelines would apply to all land within a catchment if even just one single storage within that catchment (regardless of size) supplied water that was used primarily for domestic water supply purposes. Thus, if a farmer within a catchment, which was otherwise used exclusively for irrigation purposes, were to draw water from a dam, store it in a header tank, and use that water for his household domestic supply, then that catchment would be a potable catchment under the interpretation proposed by option 2. This, they say, is an absurd outcome.
2. Taken to this extreme, the example given might well be regarded as an absurd outcome. But in my view, it is an example capable of being dealt with on its own facts rather than necessitating a rejection of the interpretation in option 2 and favouring the interpretation in option 1. More relevantly, I consider it misinterprets what the term reservoir (or water storage) means in the context of the Guidelines.
3. When considering the definition of a potable water supply catchment in the Guidelines and whether it applies to particular catchment, a common sense view must be taken about what can be categorised as a reservoir (or water storage) used primarily for domestic water supply purposes.
4. In my view, in the context of the Guidelines, the words in brackets - or water storage - is an alternative term for a reservoir. If a water storage other than a reservoir was intended to be included in addition to a reservoir, there would have been no need to include the words in brackets.
5. Reservoir and water storage are both terms used in the Water Act 1989. Most references in the Water Act 1989 are to water storages[12] rather than reservoir. Reservoir is a term that is in common use.
6. In a document such as the Guidelines, where the purpose is to assist responsible authorities and water corporations in their assessment of planning permit applications, it seems reasonable to assume that the reference in the definition of a potable water supply catchment to a reservoir (or water storage) used primarily for domestic water supply purposes, is intended to refer to reservoirs or water storages managed by water corporations and having a public character, rather than a private character. I do not consider that a single, private form of water storage, such as a dam or header tank, which supplies water for domestic purposes, is intended to fall within the ambit of the definition of a potable water supply catchment. Such an interpretation would be contrary to the general tenor of the Guidelines and the situations where they are intended to apply.
7. Throughout the Guidelines there are references to water corporations and their responsibilities; the regulation of water supply catchment areas aimed at protecting public health; risks to public health; and protecting communities from waterborne diseases or the need for excessive chemical treatment of water in water storages etc. All of these references imply that the reference to a reservoir (or water storage) used primarily for domestic water supply purposes is intended to refer to a reservoir or water storage that is the responsibility of a water corporation, not a private person.
8. Therefore, I do not consider that the type of extreme example suggested by Goulburn Murray Water or the councils would arise upon a proper interpretation of the Guidelines. The theoretical possibility they put forward is not a reason for preferring option one to option two as an interpretation of the definition of a potable water supply catchment.

1. My conclusion is that the definition in the Guidelines of a potable water supply catchment means a water supply catchment that provides water resources to a reservoir (or water storage) and the reservoir (or water storage) is used primarily for domestic water supply purposes. It is not limited to a situation where the water resources from the catchment as a whole are used primarily for domestic supply purposes.
2. It therefore follows from this interpretation that the Tullaroop catchment is an open, potable water supply catchment within the meaning of the Guidelines.
3. I will make declarations to this effect (although not in the words used in the application).
4. Having regard to this conclusion, the application for the second declaration is not relevant.

Reasons for refusal - planning permit application No PLP/2010/452

1. Insufficient information has been provided by the applicant to support the proposal and resolve issues raised by Central Highlands Water.
2. The application fails to implement the objectives of the State Planning Policy Framework and the Local Planning Policy Framework.
3. If approved, the density of development would increase further beyond the desirable density of development of one house per 40 ha.
4. The application does not comply with the Guidelines for Planning Permit Applications in Open Potable Water Supply Catchments Areas, issued by the DSE.
5. The application, if approved, would create a bad precedent for further incremental development within the zone and the water supply catchment.

[1] Mansfield Shire Council, Towong Shire Council and Murrindindi Shire Council

[2] [2008] VCAT 963

[3] Section 35 of the Interpretation of Legislation Act 1984, provides as follows:

In the interpretation of a provision of an Act or subordinate instrument -

(a) a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; and

(b) consideration may be given to any matter or document that is relevant including but not limited to -

(i) all indications provided by the Act or subordinate instrument as printed by authority, including punctuation;

(ii) reports of proceedings in any House of the Parliament;

(iii) explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament; and

(iv) reports of Royal Commissions, Parliamentary Committees, Law Reform Commissioners and Commissions, Boards of Inquiry or other similar bodies.

[4] CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408

[5] [2009] VCAT 2746

[6] [2010] VSC 583. See also Western Water v Rozen & Anor [2008] VSC 382

[7] [2009] VCAT 2746 at [18]

[8] Rozen v Macedon Ranges SC & Anor [2010] VSC 583

[9] [2009] VCAT 2746 at [95] - [96]

[10] See for example Bakes v Mt Alexander SC [2010] VCAT 1416; Ballarat CC v Myers [2010] VCAT 701; Seter v Moorabool SC [2010] VCAT 593; Parkhouse v Macedon Ranges SC [2010] VCAT 493; Archibald v Moorabool SC [2010] VCAT 163; Gerdes v Hepburn SC [2010] VCAT 268

[11] The opening words of clause 12 replace clause 11.03-2 of the State Planning Policy Framework, which was referenced in Rozen v Macedon Ranges SC [2009] VCAT 2746 at [43]. The opening words of clause 12 include as follows:

Planning must implement environmental principles for ecologically sustainable development that have been established by international and national agreements. Foremost amongst the national agreements is the Intergovernmental Agreement on the Environment, which sets out key principles for environmental policy in Australia. Other agreements include the National Strategy for Ecologically Sustainable Development, National Greenhouse Strategy, the National Water Quality Management Strategy, the National Strategy for the Conservation of Australia's Biological Diversity, the National Forest Policy Statement and National Environment Protection Measures.

Referring to the National Water Quality Management Strategy in Rozen, the Tribunal said:

[43] The National Water Quality Management Strategy, which auspices the Australian Drinking Water Guidelines, is one of the national agreements referred to in clause 11.03-2 of the State Planning Policy Framework [now clause 12], together with the Intergovernmental Agreement on the Environment. Thus the Australian Drinking Water Guidelines are directly relevant to a consideration of this application. Further, we consider that they would fall within the ambit of section 60(1A)(g) of the Act as a matter that, in the circumstances, the responsible authority (and hence the Tribunal) should consider.

[12] For example, see the Water Act 1989 Part 6C - Storage Managers