2. The Responsible Authority is directed to issue a permit generally in accordance with the Notice of Decision to Grant a Permit dated 25 March 2002 but varied as follows:

Prior to the commencement of the use and development hereby permitted the Section 173 Agreement registered on the title to Lot 1 PS404937L is to be ended or amended to relocate or include a second building envelope to encapsulate the entire area of the quarry as shown on plan reference No. 4156/WA548 dated 3 October 2001.

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For the Applicants for Review: Mr N Tweedie of Counsel instructed by Deacons Lawyers

For the Responsible Authority: Mr P Doyle, Solicitor, Maddocks

For the Respondent/Objectors: Mr J Atkins of Counsel instructed by Goddard Elliott, Solicitors

1. This is an application for review of the decision of the Responsible Authority to issue on 25 March 2002 a Notice of Decision to Grant a Permit to allow the use and development of a quarry on part of the land known as Lot 1, PS404937L, Quarry Lane, Mansfield and more particularly described in Certificate of Title Volume 10314 Folio 096.

a) The purported Notice of Decision by the Responsible Authority dated 25 March is bad in law;

b) The grant of a permit would be in breach of a registered Section 173 Agreement;

c) Condition1 attended to the purported Notice is not a condition authorised under Section 62 of the Planning and Environment Act;

d) Without prejudice to the above grounds, the grant of a permit would cause detriment to the amenity of the area as a result of:

e) Under all of the circumstances, the Responsible Authority ought to have refused to grant a permit.

3. At the commencement of the hearing Mr Doyle advised that on the 28 October 2002 the Delatite Shire Council was by Order of the Executive Council under Part 10C of the Local Government Act 1989 reconstituted as the Benalla Rural City Council and a new council was constituted known as the Mansfield Shire Council. The subject land falls within the new external boundaries of the municipal district of the Mansfield Shire Council. Pursuant to clause 39 of the Order the newly created Mansfield Shire Council is as from the 28 October 2002 the Responsible Authority for the purposes of the Planning and Environment Act 1987 for that part of the Delatite Planning Scheme in force within its respective municipal district. Pursuant to Section 127 Victorian Civil and Administrative Tribunal Act 1998 reference to the Delatite Shire Council as the Responsible Authority is amended to Mansfield Shire Council.

4. The subject land and its surrounds consist of relatively steep hills and gullies. The land is approximately 40.79 hectares in area and is located 3kms south of the Mansfield township. It has a frontage to Quarry Lane to the east and it adjoins to the north a Quarry reserve. To the west, east and south are rural properties.

5. One of the applicants for review, Mr Van Der Heyden, owns the adjoining property to the south originally part of the subject land until it was subdivided in 1996 pursuant to permit P96/0040. The applicants for review also own two lots to the east of the subject land separated in part by Quarry Lane and known as the `Blue Ridge land'. Located on the top of the ridge to the east on lot 1 is a dwelling.

6. Condition 1.c of permit P96/0040, the permit for subdivision, required the entering into of an agreement under Section 173 of the Planning and Environment Act 1989 (PE Act) to provide for development to occur only within a building envelope. The agreement was entered into on 16 December 1996 between the then Delatite Shire Council and Steven Lesley Bell and Sharon Maree Bell the then owners of the land. The agreement was subsequently entered on the Certificate of Title to the land and now attaches to both lot 1 being the subject land and lot 2 being the land now owned by Mr Van Der Heyden. Building envelopes are shown cross hatched on both lots and are contained generally towards the eastern side of the land extending into the lots from the boundary with Quarry Lane.

7. An existing quarry is currently operated on the land. This quarry operates pursuant to permit P96/0182 issued on 15 January 1997. The existing quarry is said to be located within the building envelope on the subject land. It also operates under Work Authority 548 issued on 21 January 1997 pursuant to Section 19 of the Extractive Industries Act 1995. The Work Authority allows quarrying for Rhyodacite/Granite/Sand/Gravel subject to conditions.

8. The Permit Applicant proposes to conduct a similar open face quarry to extract `Rhyodacite' or armour rock to what is currently being carried out but to be located within an area that does not fall within the existing building envelope. The extraction of the rock is to be carried out with the use of a large tracked diesel-driven hydraulic lift excavator and a diesel driven rock hammer. Once extracted the rock is to be carted away for crushing and processing. Explosives are to be used to break up the bedded raw material into blocks. All blasting is controlled by the Dangerous Goods (Explosives) Regulations 2000 which specifies the methods to be used and requires monitoring of airblast and ground vibration.

9. The quarry is proposed to operate between 1 December and 30 June each year. It is expected 800 tonnes of the rock will be extracted from the site each year with an average of 15 trucks clearing material from the site each week. The main use of the rock is for stabilisation of creek and river banks and the minimisation of soil erosion in waterways.

10. Work Authority 548 was approved for variation on 10 January 2002 by the Department of Natural Resources and Environment to encompass the proposed new quarrying works subject to conditions regarding the method of working the Quarry, including the hours of operation, the use of explosives and the requirement for an Environmental Management Plan and a Rehabilitation Plan.

11. The subject land as is the surrounding land is located within the Rural zone under the Delatite Planning Scheme and is subject to Environmental Significance Overlay: Schedule 2 Lake Eildon Catchment. Pursuant to clause 35.01-1 a permit is required for `Mineral, stone or soil extraction (other than Mineral exploration, Mining and search for stone). A permit is also required for any buildings or works under the zone provisions as well as the overlay provisions.

12. `Mineral, stone or soil extraction' is defined under clause 74 of the planning scheme as `Land used for the searching , removal, or processing of minerals, stone, or soil, from the ground'. Included within ` Mineral stone or soil extraction' is `Extractive Industry' which is defined as `Land used for the extraction or removal of stone from land for commercial use, or to use the stone for building, construction, road or manufacturing works. It includes the treatment of stone or the manufacture of bricks, tiles, pottery, or cement products on, or adjacent to, the land from which the stone is extracted.'

13. Within the Delatite Planning Scheme in assessing this application consideration is required to be given in particular to Clause 52.09 in relation to Extractive Industry which requires that the proposal for such an industry should not impact on the environment or the amenity of the area it is to be located in. Under the State Planning Policy Framework consideration is to be given in particular to Clause 15 in relation to environmental issues and Clause 17 in relation to mineral resources. As well, consideration is to be given to the references in Clause 21 of the Municipal Strategic Statement to the Environmental Strategy and Economic Development Strategy for the area and to Clause 22 which contains the local policy in relation to water quality and industrial development..

14. The first point to be considered in relation to this application is whether the Section 173 Agreement is a Registered Restrictive Covenant as defined under the Planning and Environment Act 1987 (PE Act).

15. Mr Tweedie, on behalf of the applicants for review, contented the Responsible Authority was barred from the issuing of a Notice of Decision to Grant a Permit by reason of the provisions of Section 61(4) PE Act which provides:

If the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, the responsible authority must refuse to grant the permit unless a permit has been issued or a decision made to grant a permit, to allow the removal or variation of the covenant.

16. It was Mr Tweedie's contention that the Section 173 agreement that attached to the subject land as well as the adjoining land owned by Mr Van Der Heyden is a registered restrictive covenant as defined in the PE Act. He referred to Clause 5 of the Section 173 agreement which provides that the Owners covenant and agree that `Development other than a) a driveway, b) building or works in connection with the subdivision; or c) The provision of infrastructure for the subdivision shall be confined to the building envelope shown on the plan or plans of subdivision certified pursuant to the Permit and generally in accordance with the plans annexed hereto'. He contended that this prevented any proposal to conduct a quarry outside the building envelope referred to in the agreement and until such time as this covenant was removed or varied no decision could be reached regarding the proposed quarry.

17. "Registered restrictive covenant" is defined in section 3 PE Act to mean "a restriction within the meaning of the Subdivision Act 1988". Under the Subdivision Act (SD Act) "restriction" is defined to mean "a restrictive covenant or a restriction which can be registered or recorded in the Register under the Transfer of Land Act 1958".

18. In B. Ur and Others v Wellington Shire Council [2001] VCAT 2453 (P50309/2001) the Tribunal although not reaching a final conclusion accepted the submission that a Section 173 agreement although referred to within the PE Act as being treated as a `restrictive covenant' did not fall within the definition of "registered restrictive covenant" in the PE Act and the referral in section 61(4) PE Act. The Tribunal also accepted that although there is a reference under the Transfer of Land Act 1958 (TL Act) to the registration of a restrictive covenant, the requirement to register a Section 173 agreement is derived under the PE Act, Section 181(3) PE Act stating "the Registrar of Titles must make a recording of the agreement in the Register" and not under the TL Act, the reference under that Act to the registration of an instrument not including reference to a Section 173 agreement.

19. Mr Aitken on behalf of the Permit Applicant submitted the PE Act incorporated special machinery for the setting up, registration and cancellation of a Section 173 Agreement. Such an agreement was not governed by the TL Act and was not therefore a restrictive covenant within the meaning of the PE Act.

20. Mr Doyle submitted a Section 173 agreement is not a restrictive covenant or a restriction under the SD Act and is not able to be registered or recorded under the TL Act.

21. Mr Tweedie contended the Tribunal in Ur did not make a finding in relation to the issues put in relation to the Section 173 agreement. He contended `restrictions' in the SD Act refers to restrictions that can be registered and this includes any restriction that could be registered. He referred to Section 88(1) TL Act which provides:

The registrar shall have power and shall be deemed always to have had power to on the folio of the Register for the land subject to the burden of a restrictive covenant make a recording of such covenant and of any instrument purporting to create or affect the operation of such covenant, and when such covenant is released varied or modified by agreement of all interested parties or by order of a competent court to delete or amend that recording.

22. Section 88(1) TL Act relates specifically to a restrictive covenant. Mr Tweedie submitted that a Section 173 agreement creates a restrictive covenant applicable to land. He referred to Section 3 TL Act which provides that an `instrument' includes every document registered or capable of registration under the TL Act or in respect of which any recording is by the TL Act or any other Act, which would include the PE Act directed, required or permitted to be made in the Register. Therefore although the TL Act does not specifically refer to a Section 173 agreement such an agreement falls within the definition of `instrument ` under the TL Act, which can be registered under the TL Act, regardless of whether it is submitted for registration under the PE Act.

23. That a Section 173 agreement may fall within the definition of `instrument' under the TL Act does not result, once registered, in the Section 173 agreement being a restriction that could be registered under the TL Act. Whilst Section 182(b) PE Act indicates that once registered ` the responsible authority may enforce the covenant against any person deriving title from any person who entered into the covenant as if it were a restrictive covenant despite the fact that it may be positive in nature or that it is not for the benefit of any land of the responsible authority' this does not make the Section 173 agreement a restrictive covenant. This section allows a Section 173 agreement to include a positive covenant whereas a restrictive covenant is negative and gives the Responsible Authority the right to enforce even if positive when the Responsible Authority does not own benefiting land which is required in a restrictive covenant. Section 182 (a) PE Act provides that' the burden of any covenant in the agreement runs with the land affected', the burden only of the covenant therefore passes with the transfer of the land.

24. A Section 173 agreement is a public agreement created by statute which can be entered into between the Responsible Authority and an owner of land. Section 173(2) PE Act enables the Responsible Authority to enter into an agreement on its own behalf or jointly with any other person or body. The agreement contains covenants which can be often positive in nature and if the agreement is registered on the title to the land the subject of the agreement then if the land is transferred the burden of the covenant is passed to the new owner of the land.

25. A restrictive covenant is a private agreement entered into between a landowner and purchaser, as distinct from a Section 173 agreement a restrictive covenant is only negative in nature. The restrictive covenant gives rights over a plot of land (servient tenement) which exists for the benefit of another plot of land ( dominant tenement). The owner of the dominant tenement can enforce the restrictive covenant against the owner of the land burdened by the covenant by way of the equitable remedy of an injunction to prevent the breach.

26. The term referred to in Section 182(b) PE Act which gives the Responsible Authority the right to enforce a covenant in a registered Section 173 agreement `as if it were a registered restrictive covenant' merely gives the Responsible Authority the right to enforce a covenant against an owner of land burdened with a covenant in circumstances where the Responsible Authority has no interest in or is the owner of benefiting land. There is therefore no dominant tenement or sevient tenement. If there was no such statutory provision the Responsible Authority would only have an ordinary contractual right as between one party to an agreement against the other party to the agreement and if the affected land has been sold the other party to the agreement may no longer have any interest in the land the subject of the agreement.

27. A restriction is a limitation placed on the use or enjoyment of land in this respect a restriction is not dissimilar to a restrictive covenant. The reference to both a restrictive covenant and a restriction in the definition under the SD Act is considered to separate a restrictive covenant which is a restriction that is privately entered into between two parties and the instance of a restriction created by or under a statutory power. It could therefore be considered that a Section 173 agreement is a restriction on the way land may be used and is created under the statutory power of the PE Act.

28. Under the SD Act the restriction must be able to be registered or recorded in the Register under the TL Act. There is nothing within the TL Act which refers to the registration or recording of a Section 173 agreement whilst Section 88 TL Act clearly refers to registration of a restrictive covenant. Section 10 TL Act also specifies the type of persons with an interest in land that can have land brought under the TL Act. Nowhere in that section is there the provision for a Responsible Authority not the owner of land affected and who has no interest in the land being entitled to bring the land under the TL Act. In registering any matter under the TL Act the Registrar must be satisfied that the person has an interest specified under the TL Act.

29. The right for a Responsible Authority to have a Section 173 agreement registered is a right given under Section 181(1) PE Act not a right under the TL Act and it is Section 181(3) PE Act that requires the Register to make a recording of the agreement in the Register not the TL Act. Although a Section 173 agreement could be considered to be a restriction on the way the land may be used it is not a restriction that can be registered or recorded under the TL Act the application for registration and the recording is enabled under the PE Act.

30. In relation to the subject land a Section 173 agreement was entered into in 1996 between the owners of the land and the Responsible Authority in which the owners covenanted that development on the land other than a driveway, buildings or works and infrastructure in connection with the subdivision of the land would be confined to the building envelope shown on the plans of subdivision. The agreement was registered on the title to the land. The land was subdivided into two lots and as a consequence of the creation of the two lots and the provisions of Section 182(a) PE Act the burden of the covenant continued to run with the land and therefore continued to apply to both lot 1, the land the subject of this application and lot 2 the land owned by Mr Van Der Heyden. As a consequence the owner of lot 1 being the Permit Applicant is required to comply with the covenant in the agreement and so also is Mr Van Der Heyden in relation to lot 2, but the agreement does not give Mr Van Der Heyden any rights over lot 1 nor does the agreement give any rights to the Permit Applicant over lot 2. The Responsible Authority however has rights to enforce the agreement over both lots. The registration of the agreement pursuant to Section 182(b) PE Act gives the Responsible Authority the right to enforce the covenant in the agreement either against Mr Van Der Heyden with respect to lot 2 or the Permit Applicant in respect of lot 1.

31. It was further submitted that the Section 173 Agreement registered on the certificate of title in relation to lot 1 prevented the land outside the building envelope being used for a Quarry.

32. In a letter of advice dated 18 February 2002 the Responsible Authority was advised that the carrying out of quarrying on the subject land fell within the definition of development under the PE Act and therefore fell within the reference to development under the Section 173 agreement.

33. Whilst Mr Doyle, on behalf of the Responsible Authority submitted, the current application for development of the quarry was required as the proposed quarrying fell outside the area of the building envelope shown on the plan attached to the section 173 agreement he also submitted that there was some merit in comments made by the applicant for review in the letter dated 12 March 2002 that `I find it difficult to believe that the word "development" can be construed to include quarrying.. We refer to clause 5 of the section 173 agreement in particular wherein the owner covenant specific development and this clearly relates to the development and use of a dwelling, and that this can not be construed to mean quarrying.'

34. It was Mr Doyle's view that the use of the term `development' within the section 173 agreement was used only in terms of developing the land for a dwelling and did not extend to developing the land as a quarry. He referred to Recital C of the agreement which states `the Owner pursuant to the permit proposes to subdivide the subject land and to use and develop each Lot for the purposes of a dwelling'. He contended that the section 173 agreement should not be read as prohibiting extractive industry on any part of the subject land. He further submitted that a permit for an extractive industry was always required and there was no need for the Responsible Authority to impose what would amount to a `dual control' further restricting extractive industry on the land.

35. It appears from the permit as well as Recital C that the land upon subdivision was contemplated to be used for a dwelling, at the time a permit being required for subdivision but no permit being required for a dwelling. Condition 2.4 of the subdivision permit required the siting and design of dwellings to be in accordance with Bushfire Protection of Rural Houses but Condition 4.a states `all buildings and development is to be restricted to the building envelopes shown on the amended plan of 26/6/1996'. It is this latter condition requirement that has been incorporated into clause 5 of the agreement with no restriction to only applying to a dwelling. It is therefore considered that the carrying out of quarrying includes the carrying out of works including the change to the natural or existing condition or topography of the land and would fall within the definition of `development' under the PE Act. The agreement requires that development other than the exceptions listed, which quarrying is not one, be carried out only within the building envelope shown on the plan.

36. Whilst it is considered that the Responsible Authority should take into account the registered Section 173 agreement on lot 1 when considering the current application for a permit to carry out quarrying outside the building envelope it is not considered that the existence of the Section 173 agreement prevents the Responsible Authority from considering the current application.

37. Mr Doyle contended and it appears that this advice was given to the Responsible Authority prior to its consideration of the application that the Responsible Authority could not grant a permit to allow anything contrary to a Section 173 agreement. Mr Doyle however submitted that the Responibsle Authority was not barred from giving a Notice of Decision to Grant a Permit and could incorporate a condition which required in effect that the permit have no force or effect unless or until the section 173 agreement is ended or amended. Mr Aitken did not disagree but submitted Condition 1 of the Notice of Decision to Grant a Permit could be better reworded

38. Under section 177(2) PE Act "an agreement may be ended wholly or in part or as to any part of the land by the responsible authority with the approval of the Minister or by agreement between the responsible authority and all persons who are bound by any covenant in the agreement".

39. The PE Act envisages that a Section 173 agreement can be ended wholly or in part or as to any part of the land either by the Responsible Authority with the approval of the Minister or by agreement between the Responsible Authority and all persons who are bound by any covenant in the agreement. Mr Tweedie submitted that Mr Van Der Heyden is bound by the covenant in the agreement as the agreement now attaches to his land as well as the subject land, therefore the second option in Section 177(2) PE Act, namely agreement between the Responsible Authority and all persons who are bound by any covenant in the agreement could not be relied upon as Mr Van Der Heyden did not agree. This however did not prevent the seeking of approval by the Minister but did not guarantee that such approval would be given even if the Responsible Authority or for that matter the Tribunal granted a permit allowing for the current proposal to occur.

40. A Section 173 agreement when registered on a particular title to land relates only to the land it is registered upon and should be read as such. When the Section 173 agreement was originally lodged on the title it referred to the entire land in Certificate of Title Vol 6989 Folio 717. When the land was subdivided into two lots two new certificates of title were created and the agreement attached to both titles. Pursuant to Section 182(a) PE Act the burden of the covenant runs with the land affected. The land affected upon subdivision were the two newly created separate lots. Therefore the agreement relates to lot 1 and separately but in similar terms to lot 2.

41. It is a matter between the Responsible Authority and the owner of the particular land affected as to whether the agreement is ended or modified in relation to that part of the land. Although the adjoining owners have a similar agreement attached to their land it is irrelevant as to whether they consent or not to its amendment or removal from this particular piece of land. Mr Van Der Heyden is not the owner of lot 1 and has no interest in that land. The Responsible Authority can enforce the agreement in relation to lot 1 against the owner of lot 1 who is the person that derived title from the person that entered into the covenant. This does not give the owners of lot 2 on which an agreement is attached any beneficial rights. Pursuant therefore to Section 177(2) PE Act the only persons bound by the covenant in the agreement attaching to lot 1 is the permit applicant and does not include Mr Van Der Heyden, therefore the agreement can be ended wholly or in part or to any part of lot 1 by an agreement between the Responsible Authority and the Permit Applicant.

42. The placement of a condition on a permit requiring the ending wholly or in part in relation to the Section 173 agreement prior to the commencement of development of the quarry is considered appropriate if the Responsible Authority has reached the conclusion that in all circumstances a permit should be granted.

43. It is contended that the proposed quarry will cause detriment to the amenity of the area as a result of the impact of noise, dust, traffic and unsightly works.

44. The application was referred to a number of referral authorities who indicated they had no objection to the proposed development. The Department of Natural Resources and Environment, Goulburn-Murray Water and Heritage Victoria all indicated conditions they considered would be appropriate on a permit if issued.

45. At present the existing quarry area is not visible from the applicants for reviews property to the east on the top of the ridge. The proposed new area will be partially seen from the dwelling but it is some distance away. The main views from the dwelling are to the east on the other side of the ridge to the area of the proposed quarry it is therefore not considered that the view of the works will impact on the amenity of the area.

46. There is already some noise which emanates from the works of the existing quarry. All blasting is strictly monitored, supervised and recorded. It is understood that blasting will occur only occasionally and under the Work Authority 24 hours notice is required to adjoining landowners prior to the carrying out of blasting.

47. There is to be no crushing of rock undertaken on the land. The applicants for review expressed concern that the quarrying activities could occur unrestricted particularly at weekends and into the evening. The Work Authority restricts the hours of operation and it is considered that any permit should similarly restrict the hours of operation to 7am to 6pm Monday to Friday to ensure that there is no unreasonable impact on the amenity of adjoining properties.

48. Whilst the nearest dwelling is approximately 500m away it is understood that Mr Van Der Heyden has considered the construction of a dwelling on the adjoining lot as well as a proposal to establish a tourist accommodation on the adjoining Blue Ridge land. Mr Van Der Heyden purchased lot 2 adjoining the subject land sometime after the commencement of the operation of the existing quarry on the land and there is no indication of any proposals having been lodged in relation to the Blue Ridge land. If a dwelling was constructed on the adjoining lot 2 within the building envelope there could be some visual and noise impact but the restriction in hours of operation and the limitation of the operation of the quarry to between December and June of each year would result in a reduced impact. As there was no such proposal in existence the existing conditions were considered in relation to the application.

49. There does not appear to be any complaints on the Responsible Authority's file in relation to noise from the quarrying currently being undertaken on the land It is not considered that the proposed quarry works will result in any unreasonable increase in noise from what currently exists. It is considered appropriate that any permit have a condition requiring compliance with the requirements imposed under the Work Authority in relation to the noise of the equipment to be used.

50. Dust is not considered likely to impact on the amenity of the adjoining properties as a result of the quarrying operation. There may be at times dust as a result of blasting but the type of rock to be removed is hard, there is no crushing to take place on the land and the loading of the rock onto the trucks will result in minimal dust which is likely to be contained within the subject land. The access or haulage road within the land is required under the Work Authority to be watered to ensure that any dust is contained.

51. Although trucks already use Quarry Lane, and the entry to the property from Quarry Lane has been opened up, the Lane is relatively narrow in places with deep gutters as a result of run off from the steeply rising land in places on either side of the Lane. The additional traffic impact as a result of the proposal was assessed by the Engineering Section of the Responsible Authority. It was considered that some improvements were required to Quarry Lane including widening and the placement of culverts as well as the upgrading of the intersection of Quarry Lane and Monkey Gully Road including the installation of additional signage in relation to quarry trucks and the improvement of sight lines at the intersection. These measures are considered appropriate and will result in an improved access along Quarry Lane for the adjoining property owners.

52. It is considered that there will be minimal impacts to the surrounding properties as a result of the proposed quarrying activity to be undertaken on the land. Whilst from the tops of the surrounding ridges scenic views are obtained the visibility from the adjoining properties particularly from the dwelling on the applicants for review Blue Ridge land of the actual quarrying operation, which is located on the side of one of the ridges, will be minimal. Such activity is not considered unreasonable within a rural area.

53. Quarrying activity is an appropriate activity within this location there will be little environmental impact as a result of the operation which allows for the extraction of stone used particularly by many of the water authorities to stabilise the banks of creeks and rivers in the general area.

54. For the above reasons the application for review is disallowed and the decision of the Responsible Authority is varied allowing for the rewording of Condition 1.

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