1. The decision of the Responsible Authority is affirmed.
2. In permit application 2008/9700 no permit is granted.

Mr Con Tsourounakis in person, a town planner. He called the following witness:

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

Mr Justin Fiddes, a town planner from Hepburn Shire Council.

Mr John Glossop, a town planner from Glossop Town Planning.

A two bedroom dwelling with a mezzanine studio is proposed to be constructed on the subject land. The land is not serviced by reticulated sewer. On-site treatment and disposal of wastewater is therefore required.

The subject land is a lot of 7,356sqm, irregular in shape and largely covered by native vegetation and bush. The dwelling would be constructed in an existing cleared and levelled location within the site.

The land falls within the Tullaroop Declared Potable Water Supply catchment.

Section 79 Planning and Environment Act 1987.

Environmental Significance Overlay - Schedule 1 (Clause 42.01 - Proclaimed Catchment Protection)

Clause 35.06-6: Buildings and works for a section 2 use.

Clause 44.06-1: Building and works associated with use of the land for accommodation.

The subject site lies approximately 3km east of Creswick. It is an irregular shaped lot of 7,356sqm. It is bound to the south by the Midland Highway (a frontage totalling 175.2m) with access from the highway by an existing track. The northern boundary is in part to an deeply incised gully.

The existing cleared and levelled area for the proposed dwelling is located more or less centrally to the lot. From scaled plans, the southern edge of the levelled area is some 12m from the southern property boundary and some 28m from the northern property boundary. At its greatest width (the eastern end) the lot is some 49m wide.

The site generally falls from the south to the north at average slopes of 20%. Apart from the cleared and levelled area the lot is covered with mature native bush.

1. Mr Tsourounakis has applied for a planning permit on behalf of the landowner, Mr Scott. Mr Scott seeks the construction of dwelling comprising of two bedrooms, study and studio room on the subject land. He has owned the land for some time and has an existing (approved) shed on the site used for the storage of various tools and a caravan. Mr Scott has undertaken various improvements to the site and would now like to live on the site so he does not have to travel as much.
2. Following the failure of the Hepburn Shire Council to make a decision about the permit application within the prescribed time, Mr Tsourounakis has applied for a review by the Tribunal. Subsequent to that application, we have been informed that if it were not for the objection of the Goulburn Murray Water Corporation, the Council would have resolved to grant the permit.
3. Goulburn Murray Water is a referral authority because the subject land falls within the Tullaroop declared potable water supply catchment[1] and it is the relevant water authority charged with the management of that catchment. Applications such as that made by Mr Tsourounakis are required to be referred to it under the requirements of Schedule 1 of Clause 42.01 and Clause 66.04 of the Hepburn Planning Scheme.
4. Goulburn Murray Water objects to the granting of a permit because it has determined that a waterway is adjacent to the subject land. It considers that the proximity of the proposed development to that waterway presents an unacceptable risk to the water quality in this special water supply catchment. To allow the dwelling in view of this risk is said by the Authority to be inconsistent with the State Environmental Protection Policy (Waters of Victoria).

WHAT ARE THE DETERMINATIVE ISSUES IN THIS APPLICATION?

1. It is clear from the submissions and material tendered by the parties and evidence lead by the applicant that the substantive issue in this matter is about the degree of risk the proposal presents to water quality. However this risk is not to be assessed merely by a consideration of the land capability assessment and responses prepared by an expert such as Mr Lawry.
2. The subject land falls within a Rural Conservation Zone and a number of overlay controls apply. The purposes and requirements of this zone and the overlays need to be considered. There are also relevant State and Local Planning Policy Framework provisions which set out strategic planning directions about the management of water quality in Victoria and the Shire of Hepburn.[2] The Department of Planning and Community Development has also published the guidelines 'Planning permit application in open, potable water supply catchment areas'[3] (the Open Catchment Guidelines). The various requirements of these planning controls, policies and the Open Catchment Guidelines form the framework by which to assess the appropriateness of the application and the context in which to consider the potential risk to water quality.
3. Thus, while the substantive issue is about the risk to water quality, it is appropriate to set out a consideration of a number of these matters in order that our decision to refuse the grant of the permit be understood. These matters include:
   • The purposes of the zone and other planning controls;
   • The site's proximity to a waterway;
   • The application of the Open Catchment Guidelines; and
   • The efficacy of the land capability assessment and proposed system for wastewater management on this site.

THE PURPOSES OF THE ZONE AND OTHER PLANNING CONTROLS

1. The Council's position in this matter is that if it can be demonstrated that wastewater can be contained on site, a permit should issue. It is the Council's view that the site is located in an area that has developed as an informal rural living area. In part, this is due to a number of dwellings in the adjacent Rural Living Zone on the south (opposite) side of the Midland Highway. Council also considers that the use for a dwelling is appropriate in view of the poor potential for agricultural use of the land.
2. We are disappointed in this approach adopted by the Council. The view that one more dwelling in this area will not make much difference to an existing grouping of dwellings or that the land has poor potential for agricultural use is simplistic and fails to address the relevant planning considerations. One of these is the purpose of the Rural Conservation Zone (RCZ).

1. The purpose of the RCZ is primarily aimed at conservation and protection of environmental values. There is no reference to the use of the land for dwellings or rural living in the purposes. While agricultural land use is a purpose, it is only where such use is consistent with the 'conservation of environmental and landscape values of the area'.
2. To us it seems that the approach of the Council and Mr Tsourounakis seems to typify many applications for dwellings in a RCZ. This approach is to start by asking 'how' can a dwelling be accommodated. Having regard to the purposes of the zone and the overlays that apply, the question should more rightly be put as to 'why' a dwelling should be allowed. This is further emphasised by the fact that the use for a dwelling is a section 2, permit required use. This is to be contrasted with the use for a dwelling on other rural land, i.e. the Rural Living and Farming Zones, where a dwelling is a section 1 use, albeit even then on a conditional basis, including the ability to achieve satisfactory on-site wastewater treatment and disposal.
3. In our view if use of this land for agriculture or a rural living dwelling was seen to be strategically supported, then other zones would have been applied to this land. That other zones have not been applied to this land points clearly to a recognition that this land has other values that the purpose of RCZ seeks to support.
4. Accordingly in response to why a dwelling should be allowed, the reasoning by the Council that the land cannot be used for agricultural is irrelevant. The reasoning that there are other dwellings present, a large proportion of which are located in another zone fails to recognise the difference in intended land use as discerned from the difference in the zonings.

1. Any use of this land, whether it be agricultural or for a dwelling, must seek to achieve the purposes of the zone. While there are a range of uses allowable under the zone, including a dwelling, such uses must have regard to the values specified in the schedule and be capable of applying 'sustainable land management and land capability practices'.
2. The schedule to the zone sets out the conservation values to be considered. This includes the protection of domestic water supply quality. The protection of water quality is further reinforced by the application of the Environmental Significance (Potable Water Supply Catchment) and the Erosion Management Overlays to this land. Broadly speaking, these overlays seek to protect the quality of the land and water resources and prevent degradation of the environment. The ESO in particular has specific requirements to maintain and, where possible, to enhance the quality of potable water supplies. When taken into account, these provisions clearly point to significant weight being given to the primary purpose of protecting potable water supplies.
3. Mr Glossop has presented information that the Tullaroop catchment has poor water quality due to nutrient and other inputs. This has resulted in repeated episodes of blue-green algae blooms in the reservoirs and water courses, including Tullaroop reservoir.

Do the applicant's reasons for a dwelling address these values and zone purposes?

1. The submissions on behalf of Mr Scott indicate two main reasons for wanting to use a dwelling on the site. Primarily Mr Scott wishes to reduce the amount of travel he does, intending to live on this land full time. It is submitted that by living on the site, better environmental management of the land can also be achieved.
2. We do not doubt Mr Scott's intentions for good land management. It is evident from the condition of the site observed from site photographs and the activities described to us that he has undertaken to control erosion and manage vegetation. We accept that he has demonstrated a willingness to provide appropriate levels of land stewardship.
3. Nevertheless we do not accept that occupation of the land is necessary to achieve or improve on environmental management. It is no more self evident than from the fact that Mr Scott has managed this site well without resorting to full time occupation of it.
4. The convenience of Mr Scott living on the site rather than enduring travel time is not sufficient justification to outweigh other concerns we have about this application. While we can understand such a reason, it is not sufficient to overcome the risks we have found this proposal presents to water quality.
5. Further to this, we acknowledge that we are required to consider a range of matters under the decision guidelines of the RCZ and overlay controls.[4] These include issues about design, siting, infrastructure and other rural land use matters. For our purposes, it is unnecessary to address such matters. We have set out earlier that the primary issue in this application is about the environmental value of this land and the protection of potable water supply quality. For the reasons that follow, we find such risks to be unacceptable.

1. The Code of Practice - Onsite Wastewater Management[5] (the Code of Practice) has been prepared to provide guidance for onsite management of wastewater to 'minimise health and environmental risks'.[6] Amongst other guidance the Code of Practice contains a table of setback or buffer distances in the event of an onsite treatment system's failure. A determinative issue in this application is the question of whether or not the setback distances sought under this application are acceptable.
2. It is Mr Lawry's evidence that setbacks from the nearest waterway of between 90m or more have been achieved. He proceeds on the basis that an embankment to the nearby gully is not the edge of a watercourse. He relies on his assessment that the nearest watercourse is down stream of the site by some 110m. He refutes the proposition put by the Water Authority that the gully is a watercourse, as it does not meet with the definition under AS/NZ 1547:2000 Onsite domestic Wastewater Management (the Australian Standard). Further, he has given evidence that even if this gully were to be considered a watercourse, a reduction in the buffer distance can be applied because the wastewater is to be treated to a higher standard than normal system and sub-soil irrigation is to be used for disposal.
3. Mr Lawry's evidence and the submissions of the Water Authority require us to consider two issues:
   • What is the status of the gully adjacent the property boundary; and
   • What is the appropriate buffer distance to be applied from any waterway in the vicinity of the site.

1. In response to Mr Lawry's evidence about the definition of a watercourse, the Authority has undertaken a survey of the bed and banks of the gully and determined it to be a waterway. Mr Glossop has tabled plans based on a GPS survey to indicate the top of the gully bank and the stream channel. We note that the top of this bank is similar to that shown in Mr Lawry's plan. However, Mr Lawry does not consider this to be the top of bank, preferring the top of the channel incised within the gully.
2. The Authority has determined this gully to be a waterway in line with the Waterway Determination Guidelines[7] of the Water Act 1989. Under the Water Act 1989, a 'waterway' is an all encompassing term for defining where water may accumulate and flow over the surface of the land. Various definitions are provided under that act as to what may constitute a waterway. Included in the definition of a waterway are rivers, streams and watercourses. A 'natural channel in which water regularly flows', whether continuously or not but it does so in a confined and regular way is also a waterway. A river, stream or watercourse is defined as having the attributes of a defined bed and banks like a natural channel but also must contain flows that need not be continuous but must emanate from a source other than from immediate rainfall.[8]
3. In light of such definitions, the Authority accepts that the gully is not a watercourse under the Water Act but is a waterway.
4. The Authority contends that what is intended to be considered under the Code of Practice (and under the Open Catchment Guidelines) is a waterway and not the more confined notion of a watercourse.
5. In respect to Mr Lawry's approach, we note that the Code of Practice refers variously to the Australian Standard and indeed relies upon various elements in the assessment and management of wastewater. However the Australian Standard is not to apply where it is inconsistent with the Code of Practice.[9] Nowhere in the Code of Practice is there a reference or direction to the definition of a watercourse under the Australian Standard to be adopted for the purposes of the code.
6. We find there is no reason as to why the Australian Standard definition of a watercourse should be adopted. The Code makes it clear that the setback distances are to be from a stream, river or waterway. The only reference to a watercourse is in the footnote that seeks to explain what meant by a potable water supply catchment.
7. Potentially we can see that some confusion may arise from the form of words used in this footnote, but we do not see that it leaves the way open for Mr Lawry to adopt some definition of a watercourse that fits his purpose. It would perhaps be better if the EPA were to clarify this point in its review of the current version of the Code of Practice.[10]
8. In respect to this application, we find the confusion to be a distraction. We are satisfied that the material tendered by the Authority demonstrates that the gully is a waterway that carries water flows within a potable water supply catchment. This waterway connects directly to a watercourse, which provides flow to a water supply storage from which is drawn potable water supplies. Given this connection, it is appropriate to consider the setback distances from the gully banks and not from the downstream watercourse or indeed the deeply incised channel within the gully.

1. The Code of Practice relies on setback distances from waterways to manage inherent risks from the failure of septic tank systems, viz:

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

To minimise that residual risk, onsite wastewater systems must be installed in a way that allows for a 'buffer' or 'setback distance' between the system and the surrounding environment (in other words, both the treatment system and the associated disposal/recycling system must be installed the required distance away from the site boundary).

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

1. The Code of Practice establishes a buffer distance of 100m from any stream, river or waterway in a potable water supply catchment for the disposal area and the treatment system. A footnote to the table of setback distances indicates that the buffer distance may be reduced by up to 50% under certain conditions. All of these conditions are to be met. The conditions require specific water quality levels for treated effluent and the land to have a slope of less than 5% or otherwise use pressure compensated sub-surface drippers.
2. Mr Lawry relies on these conditions to justify the reduction of the buffer distance from the gully.
3. Having full regard to what the Code of Practice has to say about buffer distances, we note that there is discretion for different distances to be applied by the Responsible Authority. They may be decreased but they also may be increased. Any change from the recommended distances is to be based on an assessment of the sensitivity of the environment surrounding the site. Advice is also to be sought from the relevant authorities and other stakeholders.
4. The advice from the relevant water authority is that the 100m should be maintained in light of the high environmental values of potable water supply in this catchment and the high level of risk that this presents.
5. We concur with this view. We have set out earlier the value of this land in terms of the purposes of the zone and intended outcomes to maintain water quality. We set out below that reasons for having little faith in the outcomes of Mr Lawry's land capability assessment. We find that it does little to support any reduction in buffer distances in view of its failings. Thus, in line with the Code of Practice, every possible precaution should be undertaken to ensure the purposes of the zone and overlay controls are achieved. In this instance, this includes maintaining appropriate buffer distances to address the potential of a system failure. We see no reason to justify the reductions adopted by Mr Lawry.
6. Further, in line with the Code of Practice, this buffer distance should apply not only to the disposal areas but to the location of the treatment system. On plans submitted with Mr Lawry's assessment, the treatment system is indicated to be located closer to the gully than the disposal areas. We consider this to be one of many oversights contained in Mr Lawry's assessment.

1. In his assessment of the site's capability to contain wastewater onsite, Mr Lawry's evidence is that the site has a fair rating for on-site wastewater containment based on the approach he has adopted from the EPA guidelines.[11] However, under cross examination, it became apparent that the slope of the site, the degree of vegetation coverage in the disposal area, exposure to runoff, rapid drainage due to the slope, soil susceptibility to erosion, and the annual rainfall are all factors that lead to the conclusion that the site actually has a poor to very poor rating. Such a rating translates into the site presenting a high to very high environmental risk for onsite wastewater disposal.
2. The EPA's land capability assessment guidelines set out that:

This land capability assessment (LCA) procedure should be used to ensure that unsewered residential development only proceeds on land that has an acceptable capability for sustainable on-site wastewater management.

The LCA table is essentially a systematic approach to land capability assessment. However it should not be seen as a "tick the box" catch-all method for developing a wastewater program. The rating class ranges may vary, depending on the land management capacity of developers and property owners.

However, the management inputs required as capability decreases are not linear. A rating outcome of "4" will require very considerable management input. The management input needed to redress the degree of constraint highlighted by a rating of 5 is not expected to be feasible.

1. In terms of outcomes for a land capability assessment, the guidelines highlight that:

Although the LCA indicates the inherent capability of a site for on-site wastewater management, it should be complemented by a management program showing how the land constraints (and the associated risks) identified in the LCA can be addressed.

It will be for local government to overlay other considerations to finally ascertain the appropriateness, or otherwise, of the proposal being considered for a particular area. Councils should consider the practicability of the proposed management program for a range of landowners over time. It also needs to be appreciated that, as higher risk situations are identified, councils will also need to increase their involvement to ensure the management program is implemented.

LCA Ratings from 3-5 indicate that a site has a limited capability for sustainable onsite wastewater management. It is the proponent's responsibility to demonstrate that appropriate engineering solutions and more intense management could overcome the site limitations. If the proponent fails to demonstrate this, development should not proceed.

1. Having regard to this guidance, we find Mr Lawry's approach to have two flaws. He first applies and assesses the risk through an averaging approach that the guidelines direct should not be done. He also reduces the rating of risk because he believes that he can apply engineering or management actions to address these risks. We find this approach undermines the integrity of the method set out in the EPA guideline and provides a false perception of risk levels.
2. What is intended under the guidelines is an assessment of the inherent physical and land features that may constrain the containment of wastewater on site. Once such factors are identified, only then should a consideration be made of the management responses required to address these risks and the efficacy of such responses.
3. In terms of such limitations, we find Mr Lawry has failed to address a number of key issues. Mr Lawry concedes that he has not investigated or has the necessary professional background to deal with the poor structure of the subsoil that is evidenced by areas of tunnel erosion and active gully heads on and around the site. Mr Lawry relies on subsurface disposal of the treated wastewater that will permeate those subsoil horizons most prone to erosion. To us, this is a major oversight and one that under the normal course of performing a land capability assessment should have been identified as a major constraint on this site.
4. We are not satisfied that the disposal field is proposed to be set within a wooded area with mature native trees. Such a location goes against recommendation contained within the Code of Practice and Australian Standard to avoid trees within the disposal field.
5. Further, in somewhat of a contradiction to his selected location, Mr Lawry indicates that topsoil would need to be imported to support the growth of grass in order to take up excess nitrogen contained in the wastewater. We find this recommendation to be questionable in view of the nature of the difficulty in constructing a subsurface system without damaging the roots and subsoil conditions around the trees; only then to be followed by placing additional soil over such systems to provide grass growth in areas that would be sheltered by the same trees. As we noted above, such recommendations are at odds with the guidance under the Code of Practice and Australian Standard.
6. For these reasons, we have little confidence in the efficacy of the recommended management of the wastewater disposal system and of Mr Lawry's competence to address the inherent risks associated with the site. We also consider that Mr Lawry has failed to provide an adequate assessment of the inherent risks.

THE GUIDELINES FOR PERMIT APPLICATIONS IN OPEN, POTABLE WATER SUPPLY CATCHMENTS

1. The purpose of the Open Catchment Guidelines is to assist in the decision making for applications of planning permits in all open water supply catchments in Victoria. They are guidelines that have been adopted by the Minister for Planning for the purposes of s.60(1A)(g) of the Planning and Environment Act 1987. It is appropriate to consider these guidelines in this matter.
2. Four guidelines are contained within this document; two of which deal with dwellings and use of septic tanks and are directly relevant to this application. As is set out in the Open Catchment Guidelines, each of these guidelines must be addressed where a planning permit is required for dwelling. The guidelines are cumulative and do not stand alone.

1. Guideline 1 requires that the density of dwellings should be no greater than one dwelling per 40 hectares. This consideration of density of development 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 system.

1. No plan, policy or project has been identified by the Council in the terms set out in Guideline 1 and, in fact, Mr Glossop highlighted their specific absence. We thus find that the application of Guideline 1 is not exempt. It follows that our decision must take account of the density of dwellings in the area and the cumulative impact of septic tanks.
2. Depending on the method of assessment Mr Glossop submits that the density of dwellings could range from 1 dwelling per 0.6ha (based on the single dwelling on its allotment) or 1 dwelling per 8.5ha (based on an assessment of the number of dwellings within a 1km radius of the site). In either approach the density is well above the guideline level of 1 dwelling per 40ha.
3. Cleary this existing density and the increase that would occur if this proposal was approved, goes beyond that contemplated in the Guidelines as being acceptable without appropriate levels of risk assessment from the cumulative impacts of these dwellings and their associated onsite wastewater systems. No evidence or assessment of these risks has been undertaken. We are left to conclude that the current level of dwelling density presents a potential, undefined level of risk. This proposed additional dwelling would add to this risk.

1. Guideline 2 is titled 'Effluent disposal and septic tank system maintenance'. This guideline sets out various requirements for the assessment, installation and operation of an onsite waste water/septic tank system. These include setback distances from surface waters, adopted from the EPA's Code of Practice, as well as management of the disposal area(s). Notably this includes not allowing bushes, shrubs or trees to be permitted to grow directly over effluent disposal areas.
2. Mr Lawry contends that firstly each of the guidelines under the Guidelines is to be considered separately. He does not consider that Guideline 1 applies because his assessment indicates that Guideline 2 can be complied with. He relies on his assessment and proposed management of onsite wastewater disposal to contend that Guideline 2 has been satisfactorily addressed.
3. We have already set out that we are not satisfied with the rigour of Mr Lawry's assessment. It does not support the reduction in setback distances as set out in the Code of Practice and adopted in Guideline 2 and which would be required if a system were to be allowed in this instance. The recommendation for irrigation under existing native trees flies in opposition to the guideline requirements to avoid trees over effluent disposal areas. In light of such a finding, we cannot accept that the requirements of this guideline have also been met.

1. The introduction of a dwelling onto this land introduces a risk to water quality. We have identified that the protection of water is of paramount importance in this open water supply catchment and that this land has a role to play in that protection.
2. We find that the land capability assessment prepared by Mr Lawry and relied on by Mr Scott is inadequate and falls short of satisfactorily addressing the potential risks of wastewater disposal on this property. It has failed to satisfy us that the inherent risks we have identified can be adequately addressed by the proposed disposal and management regime recommended by Mr Lawry. We have found there to be inherent difficulties with these recommendations, some of which are contrary to recommended guideline practices.
3. We also find that the application has failed to address the inherent risk arising from the existing and proposed increased density in dwellings and septic tanks that would follow if this dwelling were to be constructed.
4. In light of our findings, we conclude that it would be inappropriate to approve a dwelling for this land. Accordingly, we will direct that no permit shall issue.

[1] As listed in Schedule 5 of the Catchment and Land Protection Act 1994.

[2] Clauses 11.03-1, 15.01, 21.03-3, 21.01-6, 21.01-9, 21.09 and 22.01.

[4] Set out under Clause 35.06-6, Section 4 of Schedule 1 to Clause 42.01 and Clause 44.01-7.

[5] Environment Protection Authority Publication 891.2 December 2008.

[6] Section 1.1 of the Code of Practice.

[8] See section 2.1 of the Water Determination Guidelines September 2002.

[10] The current version of Publication 891.2 is noted as being under review.

[11] Land Capability Assessment for On-site Domestic Wastewater Management Publication 746.1 March 2003.