Victorian Civil and Administrative Tribunal|2006-02-07

Walsh Land Surveyors v Hepburn Shire Council (Red Dot) [2006] VCAT 178 (7 February 2006)

Conditions appeal, subdivision of rural land; issues of whether need for an Environmental Improvement Plan and associated Section 173 Agreement are an excessive requirement, one contentious condition amended by consent and the other to be deleted.

B.

The Responsible Authority is directed within 21 days of the date of these orders to re-issue planning permit No. 2005/8594 dated 29 August 2005 ("Permit") in otherwise identical form but with the following modifications:

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In relation to Condition 4, delete the third bullet point and amend the first bullet point to read "No further subdivision of the lots created for so long as the Planning Scheme (from time to time) has a minimum lot size for any further subdivision of 20 hectares";

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Delete Condition 3.

1 This matter involves a conditions appeal in relation to Conditions 3 and 4 of an existing planning permit No. 2005/8594 dated 29 August 2005 ("Permit") which permits a "two lot subdivision and construction of a dwelling on newly created lot 2, in accordance with the endorsed plans that form part of this permit". The subject land is grazing country and the subdivision is otherwise uncontentious, but a dispute has arisen regarding Council's requirement that an Environmental Management Plan ("EMP") be produced as part of the subdivision process.

2 At the hearing of this matter there was a consent position reached on one bullet point of the contentious Condition 4, but otherwise that condition and Condition 3 remained in dispute. Mr Bowden for the Applicant argued that the proposal is straightforward, that the environmental condition of the land is very simple/innocuous, and that Council's requirement for the EMP is an overkill and inappropriate. He further raised the issue whether the proposed EMP requirement is in fact unlawful, in terms of Council considering irrelevant considerations and/or imposing a condition with no reasonable nexus with the actual proposal. Council denied both of these submissions and put to me that Conditions 3 and 4 are legal, reasonable and appropriate in terms of Council's concerns about good environmental management of farms such as this.

3 Having considered these submissions, my finding is that the Council approach (as Mr Tsourounakis tells me) of uniformly requiring an EMP as part of this type of subdivision is only justified where the nature of the planning approval being granted and the specific environmental features of the site in question raise environmental concerns or issues that justify an EMP. In other words, I consider that common sense and cost considerations point to an EMP only being a sensible requirement where the facts of any one case justify same, and I consider any "blanket approach" by Council to always require an EMP in these type of circumstances to be misguided and inappropriate.

4 In the particular circumstances here, having regard to the fairly innocuous environmental aspects of the appeal site, I regard there to be an insufficient nexus between the use and development being approved (essentially a small lot excision and a new dwelling on the new larger lot) and the requirement here for an EMP to be prepared and then incorporated into a Section 173 Agreement. Hence I have made orders amending Condition 4 and deleting Condition 3.

5 This matter involves the land at 529 James Lane Fern Hill ("subject land"). I have referred in my summary above to the permitted use and development under the August 2005 Permit. The permit holder (whom I am told is the elderly owner of the subject land) has initiated a conditions appeal against Conditions 3 and 4 in the Permit.

6 I refer to pages 1 and 2 of Mr Bowden's written submission for the Applicant, which sets out the contentious conditions in full. Suffice to say that:

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Condition 3 provides that no Statement of Compliance can be issued for the approved subdivision of the subject land until an EMP has been submitted to and approved by Council. Condition 3 is very detailed and prescriptive in terms of the matters which the EMP must cover, and requires that the EMP must be prepared by a "land management specialist";

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Condition 4 requires the owner to enter into a Section 173 Agreement with Council. The bullet points in this condition essentially provide that the Section 173 Agreement must require that no further subdivision of the lots created occur, that no further dwellings be created on the new lots and that the 173 incorporates the approved EMP.

7 The subject land is a farm used for grazing and lies about 5 km north-east of Trentham. Mr Bowden advised that the owner is now an elderly gentlemen looking to on-sell the new larger lot proposed. In simple terms, the Permit allows the small-lot excision of the existing farm house which the current owner wishes to keep living in, and the creation of a balance lot of the majority of the land (which it is anticipated will continue to be used for farming). In addition, the Permit allows the construction of a new second dwelling, on the new "balance lot". The new small lot with the existing dwelling will be 6.35 hectares in size and the new larger lot will be 20.46 hectares. The subdivision plans show the location of the new septic system area and the building envelope for the new dwelling.

8 There is a gentle slope down to a creek at the rear of the subject land. Mr Bowden indicated that this creek only runs on occasion and is otherwise dry. Mr Bowden also indicated that the surrounding properties are also used for grazing.

9 The subject land is zoned Rural Zone, as are the surrounding properties.

10 Clause 35.01-4 facilitates the basic subdivision here where one of the new lots is for an existing dwelling.

11 There is an Environmental Significance Overlay Schedule 1 which affects the subject land. The main aim of this overlay is to protect the quality of domestic water supplies within the Shire and broader region (the Council written submission states that the entire municipality is covered by water supply catchments).

12 In relation to the relevant State policies, Council referred me to Clause 16.03 (Rural living) and to Clause 19.01 dealing with Subdivision. In relation to local policies and the Council Municipal Strategic Statement, Council relied on Clause 21.01-3 (Municipal overview), Clause 21.03 (Vision and strategic framework), Clause 21.06 (Infrastructure and transport), Clause 21.08 (Rural land and agriculture), Clause 21.09 (Environment and heritage), and to Clause 22.04 which deals with subdivision matters.

13 I have also taken into account the usual Clause 65 decision guidelines.

14 I now turn to my decision in this matter. Rather than repeating the submissions of the two parties, I shall concentrate on the key issues (a copy of the written submission of each party is retained on the Tribunal file, along with the various plans and materials).

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Council is concerned regarding the environmental issues which Council sees arising from the application of the Environmental Significance Overlay here ie the water catchment protection issues;

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in addition, a current particular focus of Council is promoting the best possible agricultural management practices, in terms of the farming carried out across the municipality;

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the fact that there is a creek at the rear of the subject land reinforces the role of the environmental issues referred to above.

16 With these above factors in mind, Mr Tsourounakis in response to my questions indicated during the hearing that:

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Council is now taking a more proactive approach to promoting good environmental/agricultural management of land within its municipality;

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in particular, any perspective subdivision permit applicant is now given a package of information by Council regarding what Council expects in any subdivision permit application. In this regard, as I understand it Council now uniformly expects permit applicants to provide Council with an EMP as part of any subdivision application (although Mr Tsourounakis conceded that in this case the permit application was lodged before this package of information started being given out);

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Council essentially regards the whole of the municipality as being environmentally sensitive and justifying the preparation of an EMP for subdivision proposals. Mr Tsourounakis in practice relied here on the range of water catchment issues and/or farming management issues across Hepburn that Council is seeking to manage;

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as no EMP was required of the Applicant here before the Application was lodged, Mr Tsourounakis indicated that Council is seeking to "plug this gap" by instead req uiring the provision of an EMP via Conditions 3 and 4; and

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in relation to the Condition 4 emphasis to avoid further subdivision of the new lots and/or further dwellings on the new lots, Mr Tsourounakis justified same on the basis that what can otherwise happen is an inappropriate on-going cycle of small lot excisions and/or new dwellings.

17 In response, Mr Bowden did not particularly oppose the Condition 4 push to avoid further subdivision and dwellings, although after some discussion it was agreed that the wording of the first bullet point of condition 4 could be improved (see my orders above). Rather, Mr Bowden's main "beef" was with the EMP requirement.

18 First, Mr Bowden criticised the fact that Council is uniformly requiring an EMP in all subdivision cases. Mr Bowden argued that this is an "overkill" and inappropriately adds to the already significant costs for permit applicants seeking to subdivide their land in the municipality.

19 Second, Mr Bowden submitted that in the case of the subject land here, there is nothing about the environmental characteristics of the subject land and the anticipated on-going grazing activities on the new larger lot to justify an EMP being prepared. In other words, Mr Bowden put to me that this is a very ordinary and low-key situation where the small-lot excision in question essentially preserves the status quo, in terms of the on-going use of the new large lot for grazing on a fairly ordinary lot with a creek at the rear that is dry most of the time. Following this thinking, there is no practical need for an EMP and requiring an EMP is "using a sledge hammer to crack a nut", particularly as the quality of the soil in the locality is at the poorer end of the range.

20 Mr Bowden raised particular concerns about the possibility of the new larger lot being sold to a new owner who in any case may have different and better ideas about how the new larger lot should be farmed, which could create messy inconsistencies with any EMP which had been prepared prior to any such sale. Mr Bowden also noted that it is quite complicated to formally vary a Section 173 Agreement (which would be required if the EMP was incorporated into a 173 Agreement and then a new owner wanted to change the land use contrary to the 173 Agreement). Mr Bowden also cited the case of Marzorini & Ors v Mitchell SC (1999/024439) in terms of the inappropriateness of trying to use a Section 173 Agreement to "force" a new owner to continue to farm the land in question.

21 Third, Mr Bowden challenged the legality of the EMP aspect of Conditions 3 and 4. That is, Mr Bowden queried the legality of the EMP requirement in terms of whether there is any reasonable nexus between the EMP condition and the actual use and development allowed by the Permit. Here he relied on the well known case of Pyx Granite v Ministry for Housing and Local Government (1958) 1 QB 554, where the court upheld the need for a permit condition to "fairly and reasonably relate to the permitted development". Following this line of thinking, Council is:

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effectively "going off on a policy frolic" in imposing a blanket requirement for an EMP without assessing each application on its merits in terms of the need for an EMP; and/or

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improperly having regard to an irrelevant purpose of trying to promote good agricultural land use practices across the municipality (ie improperly in the sense of seeking this outcome without proper regard to the individual circumstances in question).

22 Having considered these submissions, on balance my finding is that I accept that in the circumstances here the EMP requirement is excessive and unreasonable and should be deleted. Hence my orders above require the complete deletion of Condition 3 and the deletion of the EMP aspect of Condition 4. I wish to make the following points about my finding.

23 While Council might from a public policy point of view have some good environmental intentions, I consider that its statutory planning obligations under the Act include sensible consideration of appropriate planning permit conditions in the circumstances of each case.

24 To the extent that Mr Tsourounakis put forward the argument that the whole of the municipality is environmentally sensitive and therefore it is appropriate that Council take a uniform approach of requiring an EMP as part of every subdivision, I reject this approach to the extent that Council relied on same in seeking to defend the EMP aspect of Conditions 3 and 4 here.

25 I accept Mr Bowden's submission that even in a municipality like Hepburn, common sense indicates that there will be regions of more versus less environmental sensitivity, and there will be varying degrees of necessity for an EMP.

26 In saying this, I appreciate that it is possible that quite a substantial proportion of subdivision applications across different parts of the Hepburn municipality may involve circumstances where an EMP will be beneficial and appropriate to require, but subject to the following provisos.

27 Firstly, I am unconvinced that the environmental circumstances here justify this particular EMP being required by Conditions 3 and 4. I accept Mr Bowden's submission that with the creek bed at the rear being dry most of the time and in the absence of a water catchment facility nearby, and taking into account the relatively low value-adding land use of grazing and the poorer condition of the soils, this particular site seems fairly innocuous from an environmental perspective. In other words, it is not obvious what practical benefits would flow from preparing an EMP, particularly when the intent is that the new larger lot simply continues to be used for grazing.

28 Secondly, for the permit conditions to be valid there needs to be a reasonable nexus between the actual planning approval granted by the permit and the requirements of the condition. In this case, the Permit essentially allows a small lot excision and a new dwelling on the new larger lot. I agree with Mr Bowden that even after the granting of the Permit, the likely scenario is that the larger lot will continue to be used for grazing ie it is unlikely that there will be any significant change to the existing land use pattern. Hence, I am struggling to see the necessary nexus here to justify the "EMP and 173 Agreement" requirement in Conditions 3 and 4.

29 To the extent that my findings set out above regarding Conditions 3 and 4 can be regarded as raising legal issues, I agree with Mr Bowden that the requirement in Conditions 3 and 4 for the EMP fail to meet the Pyx Granite test of "fairly relating" to the use and development being permitted here ie a small lot excision and a new dwelling on the new larger lot.

30 While my brief here strictly speaking is just to deal with the contentious Conditions 3 and 4, I also make the passing comment that I am struggling to see the wisdom of Council taking a blanket global position of requiring an EMP with every single subdivision application across the municipality. As mentioned during the hearing, in my view a more sensible approach would be to use a two step process where:

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Council has to make an initial assessment, for the particular site and land use in question, whether there are sufficient environmental issues involved for an EMP to be worthwhile and appropriate requirement; and

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Council only then takes the second step of actually requiring the Applicant to prepare and lodge the EMP.

31 While "environmental improvement and good agricultural practices" in Hepburn are worthy objectives, equally Mr Bowden made the point that a proper EMP may cost the applicant thousands of dollars to prepare and have Council approve. This reinforces my views expressed above that I consider unreasonable any "scattergun" approach by Council of automatically requiring an EMP, rather than a more sensible "horses for courses" position of evaluating the merits of each case in terms of whether an EMP can reasonably be sought.

32 I am also mindful here that where an EMP is required and then incorporated into a Section 173 Agreement, this makes the situation more complicated in terms of the current or future owner(s) potentially at a later time seeking to carry out new practices or uses on the land which might infringe the requirements of the EMP. This may in turn require the EMP/Section 173 Agreement to be varied or even re-written. Again this would involve substantial cost and time to deal with, which reinforces the need for a cautious approach in terms of the circumstances in which it is appropriate to include in a subdivision permit a condition requiring an EMP to be prepared and then incorporated into a Section 173 Agreement.

33 While it was not raised before me at the hearing, I am conscious that another concern of Council may be that this type of situation (ie where Council has approved a small lot excision and a new dwelling on the new larger lot) may create a greater risk of the new larger lot being occupied by a "hobby farmer", thereby undermining the on-going genuine farming activities in the locality. I can understand this concern. However, I do not see the real answer here as being the blanket use of "you must prepare an EMP which reinforces the existing farming activity and incorporate the EMP into a Section 173 Agreement" type permit conditions.

34 As mentioned, there is specific Tribunal precedent (ie Marzorini & Ors v Mitchell SC) that a 173 Agreement cannot be used to shore up the on-going farming use of a site. Surely the fundamental issue here is that Council needs to make an up-front judgement whether it considers a proposed small lot excision such as this will create an unreasonable degree of fragmentation of the existing land use pattern of farming. If the answer is "yes", then Council should not be approving the small lot excision in the first place, and any resulting appeal to the Tribunal against the Notice of Refusal can deal with the overall merits of the proposed subdivision (rather than being a conditions appeal limited to the EMP aspect of the planning permit).

35 For the reasons set out above, my finding is that while the requirement to prepare an EMP may be appropriate to impose in some subdivision applications/permits, this is not one of them. Hence, I have made orders that Condition 3 be deleted entirely and that the EMP aspect of Condition 4 be deleted. By consent, the first bullet point of Condition 4 has also been varied.

36 While my main role here has been to make a ruling on the contentious Conditions 3 and 4, in light of Mr Tsourounakis' comments that:

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this is the first Tribunal challenge to the Hepburn Shire Council current practice of uniformly requiring an EMP as part of subdivision applications; and

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Council would assist some broad guidance about the overall situation

I have tried to not only resolve the contentious Conditions 3 and 4 but also offer some more global comments and suggestions regarding the whole EMP issue. I hope these broader comments assist all stakeholders involved.

Walsh Land Surveyors v Hepburn Shire Council

At a glance

Court

Decision date

Source

Judgment (23 paragraphs)

Walsh Land Surveyors v Hepburn Shire Council (Red Dot) [2006] VCAT 178 (7 February 2006)

Parties