1. The decision of the Responsible Authority affirmed.
2. In permit application PLN/2011/461 no permit is granted.

Mr Marcus Ward, a town planner and architect. He called the following expert witness:

• Mr Paul Williams, a hydrogeologist from Paul Williams & Associates Pty Ltd.

Mr Christo Crafford, a town planner from Macedon Ranges Shire Council.

Mr Anthony DePasqaule, a town planner from Glossop Town Planning. He called the following expert witness:

Construction of a dwelling on a 24ha lot is proposed. The dwelling would contain two bedrooms, a study and various living and amenity areas.

The dwelling is proposed to be occupied by a property manager in support of thoroughbred horse breeding, training and grazing operations. These operations are in support of a larger horse (and animal) training business conducted by the owners across two other properties.

Review of a decision to refuse the grant of a permit pursuant to section 77 Planning and Environment Act 1987.

Zone and Overlays applying to the land under the Macedon Ranges Planning Scheme

Environmental Significance Overlay (Clause 42.01 and Schedule 4 - Eppalock Proclaimed Catchment).

Planning permissions required under the Macedon Ranges Planning Scheme

Construct a building and works for a section 2 use in a Farming Zone (Clause 35.07-4) and land subject to the Environmental Significance Overlay (Clause 42.01-2 and Schedule 4).

The subject land is an irregularly shaped lot of approximately 24.8ha. Its northern and eastern boundaries lie along Kyneton-Springhill Road. To the south is land reserved for Coliban Reservoir, the Kyneton-Springhill Road, the wall and outfall of Coliban Reservoir. The western boundary largely follows the Coliban River, or otherwise interfaces with adjoining farm land or land reserved for Lauriston Reservoir.

The tailwater of Lauriston Reservoir lies along a portion of the north-west boundary.

1. On behalf of the landowner, Mr Ward made a permit application to use and develop the subject land for a dwelling. The subject land is a 25ha rural lot located between Upper Coliban and Lauriston Reservoirs in the Eppalock Catchment. The dwelling would be used to support a horse breeding and training business conducted by the landowner.
2. The Council was not persuaded that a dwelling on this property would be necessary to support the level of horse breeding and training activity proposed for this land. In the absence of a demonstrable need for a dwelling, the Council formed the view that allowing the land to be used and developed with a dwelling would be contrary to the purposes of the Farming Zone and various State and Local planning policy. It refused to grant a permit for this reason.
3. Because the land lies in the Eppalock catchment the council referred to the application to Coliban Water. This authority relies on the Eppalock catchment to supply potable water to various towns and Bendigo city. It objected to the proposal on the basis that on-site wastewater treatment and disposal which would be required to support the dwelling would present an unacceptable risk to water quality. It is also concerned that if it were approved, the proposed dwelling would set an unacceptable precedent for the area, with additional dwellings increasing the risk to water quality.
4. These reasons formed the second of the Council's grounds of refusal.
5. Mr Ward now seeks a review of the Council's refusal to grant a permit, with two matters to be determined in this application:
   • whether the proposed use of this agricultural land for a dwelling is acceptable; and
   • whether on-site wastewater treatment would present an unacceptable risk to water quality.

1. The proposed dwelling is modest, having two bedrooms and a study. Mr Ward describes the features and design of the dwelling as akin to a portable or kit home. There is no particular issue about the design.
2. Mr Ward has detailed the landowner's extensive involvement in the animal training industry, operating a long standing business with a world wide reputation. The business specialises in providing trained horses, including horses that are 'free trained', i.e. able to perform acts without a rider onboard. These horses are used in movies and various live shows.
3. The Council does not dispute that this raising and training activity falls within the planning scheme's definition of agriculture.
4. Mr Ward submits that the dwelling is necessary to provide security to the property and the stock that are maintained on it. He has detailed the value of the horses and foals kept on the property and security issues such as past incidences of trespass that have resulted in stock escaping onto local roads. As part of the horses' training regime, early and constant interaction between the foals and humans is said to be required. This is achieved through day to day handling and a constant human presence. So put, Mr Ward agrees that essentially the house would be for a property / stock manager to provide the necessary levels of security, training and stock management regimes in support of the broader operations conducted by the landowner from two other properties located in the district.
5. Mr Ward also points to the to the positive values of this property for horse raising noting that stock raising is recognised in local planning policy as one of several agricultural activities that is occurring and is encouraged for this agricultural area of Macedon Ranges.

1. The purposes of the Farming Zone are directed to supporting agriculture and sustainable land management.[1] They are not directed toward providing land for residential or dwelling purposes. In fact two purposes are specifically directed toward:
   • Ensuring land is retained for productive agricultural use; and
   • Ensuring non-agricultural use of land, including dwellings, do not 'adversely affect the use of land for agriculture'.
2. Decision guidelines are directed to testing how a proposed non-agricultural use of the land such as a dwelling will support these purposes. The various requirements of the zone are designed to ensure that using the land for a dwelling does not compromise agricultural use of the subject, adjoining and nearby agricultural land. Put another way, the use of the land for a dwelling should not overwhelm or become the dominant use and expectations of residential amenity should not prevent adjoining land from being used for agricultural purposes.
3. The use of the land should also be consistent with applicable planning policy.
4. The objective of State planning policy is to protect productive farmland which is of strategic local or regional significance from amongst other things, unplanned loss through changes in land use. It is also relevant to consider the impact on continuing agricultural production from the subject land and adjoining land arising from the change in land use.
5. There are also wider landscape and social infrastructure issues that direct residential development into existing settlement areas rather than utilising isolated rural land.[2]
6. The local planning policy framework locates the subject land in an 'agricultural landscape'.[3] This strategic setting is aimed at supporting ongoing agricultural activity, compared with other regions of the municipality that have been identified as capable of accommodating rural living or environmental living. This strategic setting has been adopted in recognition of the important role agriculture has in the shire's economy and rural landscape character.
7. To achieve these strategic aims, a policy for agricultural landscapes has been adopted and incorporated into the Macedon Ranges planning scheme. This policy establishes the following relevant points:
   • The future vision for the district containing the subject land is for broad acre farming, including stock raising as well as intensive and extensive cropping.
   • Uses that may prejudice this outcome are not to be supported.
   • Construction of a dwelling is 'contrary to the continued use of the land for productive, sustainable agriculture'.
   • The Council will only support the construction of a dwelling where 'it can be demonstrated that it is required to facilitate or enhance the ongoing primary use of the land for productive, sustainable agriculture'.
   • Agricultural use of the land must be the primary use. Any 'residential activity must be secondary or ancillary'.
   • If permitted, any dwelling 'must be located in poorer quality land and where it will not compromise efficient agricultural use of the land'.
   • Consideration is to be given to the protection and enhancement of the agricultural landscape.
8. This policy also establishes that comprehensive documentation should be provided to support an application for a dwelling. This documentation should include a whole farm plan.

1. The Council's grounds raise as one issue, the absence of comprehensive documentation about the agricultural use of the land and why a dwelling might be justified. On review of the application material, this position is justified. Mr Ward's oral submissions have sought to provide the level of detail he considers necessary and submits is sufficient in view of the low-key management approach to the horse breeding, raising and initial training required by the landowner.
2. I am not persuaded that this is the case. A number of questions remain as to why the issues about stock and land security cannot be addressed by other means or what activities the resident would be engaged in that requires a full time presence.
3. I have further considered the impact that a dwelling would have against the policy framework and the purposes and decision guidelines of the Farming Zone as set out above.
4. I accept that having a regular presence of a stock and property manager would assist in some of the day to day activities of the horse raising and training operations. However, as I will now explain, the need for a regular presence does not persuade me to set aside the balance of relevant planning considerations that weigh against a dwelling on this land.
5. There is clear indications from the policy framework that the land in this area has been and is subject to fragmentation by development pressures for dwellings. This arises from its proximity to Kyneton and demand for rural living. There is clear policy direction at a state and local level to protect this valued agricultural land from being used for a dwelling that would blur or threaten its ongoing agricultural use.
6. In rural landscape terms, the location of the land is one where there is a transition from small lots and widespread numbers of rural dwellings close to Kyneton, into larger lots, reasonably dispersed dwellings. Further to the west are larger farms comprising of multiple land holdings with widely dispersed dwellings. The location thus marks a transition into the traditional broad acre rural agricultural landscape that policy seeks to retain.
7. Another dwelling on this smaller lot would incrementally be further fragmentation of this character.
8. Planning policy at a state and local level also seeks for land to be available for consolidation into larger enterprises consistent with a vision for broad acre agricultural activity. Allowing a dwelling on this land would mean future consolidation into larger land holdings would be unlikely. The effect of the dwelling would be to de-couple this land from its agricultural value and hence the purposes of the zone.
9. I have also considered the ongoing effect of this proposed dwelling if it were not under the present landowners control. I am not persuaded by Mr Ward's submission on this point that future use of this land by others would retain an agricultural focus. Given the land's proximity to Kyneton the very real risk is that once a dwelling is located on this land, it could equally be used for rural residential living. There are clear objectives to avoid this outcome under the zone and relevant policies.
10. Thus, while I can accept that the use of the land for agricultural purposes of horse raising may continue on the land along with its use for a dwelling, I conclude allowing a dwelling on the land would have consequential outcomes that are contrary to the purposes of the zone and to planning policy for this agricultural land. For these reasons I agree with the Council that the application should be refused and no permit be granted.

Overview of requirements to address water quality risks

1. The proposed dwelling requires on-site wastewater treatment and disposal in order to meet the requirements of the Farming Zone, specifically to treat and retain wastewater on site 'in accordance with the State Environment Protection Policy (Waters of Victoria) under the Environment Protection Act 1970'.[4]
2. The SEPP Waters of Victoria requires that:

On-site domestic wastewater needs to be managed to prevent the transport of nutrients, pathogens and other pollutants to surface waters and to prevent any impacts on groundwater beneficial uses.[5]

1. This objective is to be achieved by amongst other steps:
   • councils assessing the suitability of land for on-site domestic wastewater systems;
   • councils ensuring that permits allowing the use of on-site wastewater treatment plants are consistent with guidance provided by the Environment Protection Authority, including that provided in the Code Of Practice - Septic Tanks On-Site Domestic Wastewater Management (2003) (the Code of Practice) as amended; and
   • occupiers of a premises with an on-site domestic wastewater system managing that system in accordance with permit conditions and the Code of Practice.
2. These requirements call into consideration the capability of the land to treat and retain wastewater onsite and the ability to for any such proposal to comply with the Code of Practice.
3. Because it cannot be connected to reticulated sewerage, the dwelling would also require a permit under Schedule 4 of the Environmental Significance Overlay (ESO4). Decision guidelines call of a consideration of the impact of the 'use and development' on the water catchment and 'any relevant land capability study'.
4. The ESO and zone also seek to implement the planning policy frameworks, and in respect to water quality, such policy at the State and local level seeks to protect water quality and discourage land uses and development that will undermine such an objective.[6]
5. Coliban River and the associated reservoirs are part of the Eppalock catchment. This is a declared special water supply catchment.[7] As such, the proposed dwelling is also required to address and satisfy the Minister's Guidelines for planning permits in open potable water supply catchment areas[8] in accordance with this Guideline and State planning policy.
6. This document contains five guidelines. Guideline 1 requires the development of the land with a dwelling to meet a dwelling density of at least one dwelling per 40Ha. Mr Ford's evidence is that after allowing for the areas of reservoir in which no land could be developed this proposal meets this density requirement.
7. Mr Ford's evidence is that this proposal could comply also comply with the various requirements of Guidelines 3 to 5.
8. Guideline 2 requires compliance with relevant EPA requirements, including the Code of Practice.

1. It is the ability of this proposal to comply with the Code of Practice and therefore Guideline 2 and other planning requirements and the SEPP Waters of Victoria that is in issue between Coliban Water, the Council and the applicant's expert Mr Williams. Coliban Water and the Council consider that locating and operating an on-site wastewater treatment plant and effluent disposal area on this land presents a level of risk that is contrary to the Code of Practice.
2. This conclusion is reached on the basis that:
   • The proposed location of the effluent systems can not accommodate appropriate setbacks from an escarpment, Coliban River and the tail water area of Lauriston Reservoir.
   • A strict maintenance regime for the effluent system would be fundamental to ensuring high quality effluent outputs. It is submitted that it will be difficult to police the upkeep of maintenance contracts over time.
   • There will be difficulties in achieving appropriate subsurface irrigation of treated wastewater because of the shallow soils and rocky site conditions.
3. Mr Ford's evidence is said to support these conclusions because:
   • He identifies the location of the dwelling, treatment plant and wastewater disposal fields close to an escarpment on the property;
   • The escarpment sits above land that slopes toward Coliban River and the tail water of Lauriston Reservoir. As a consequence of this geomorphology, any surface seepage or release of untreated wastewater from the system or seepage from the disposal field could be captured by overland stormwater flows, and be rapidly carried into the river.
   • Subsurface flows from the system, including the disposal field, could erupt at the break of slope at the base of the escarpment and similarly be carried down slope into the river by surface flows.
4. These conditions are said by Mr Ford to increase the risk of water quality impact and justify a setback from the river that is greater than those adopted in the Code of Practice.[9]
5. Mr Williams' evidence disputes Mr Ford's conclusions on the basis that:
   • adequate depth of soil can be found between areas of shallow rock, as demonstrated by his survey of a potential disposal field area by probe and auger methods.
   • The proposed setback of the effluent system and disposal field will be twice that adopted under the Code of Practice for a 20/30 treatment regime.[10]
   • The risk can be reduced further by adopting a treatment method (he recommends a reed bed system) that produces effluent of 10/10 quality with chlorine dosing to achieve less than E. coli 10 cfu/100ml.
   • He proposes the use of an alternating effluent irrigation system, that would achieve a low rate of application of 1.1mm/day over an area that is twice that required for the 90th percentile wet weather water loadings (i.e. an are of 650m2 is proposed compared to the need for 320m2 to achieve acceptable loading).
6. It is Mr Williams' evidence that all these steps are part of a 'belts and braces' approach that goes beyond the base requirements of the Code of Practice. On this basis, he concludes that the degree of risk can be reduced beyond that which the Code indicates to be acceptable.
7. Apart from the issue of setbacks and soil depth, the Council and Coliban Water do not dispute that Mr Williams' assessment of land capability is in technical error.
8. I am satisfied from Mr Williams' evidence that sufficient soil depth, clearly identified as a limiting factor, can be ascertained from his method of survey. Mr Williams' land capability assessment also indicates another limiting factor on this site to be the soil's low permeability. He addresses this factor by proposing the halving the acceptable application rate of treated effluent to the soil by doubling the disposal area and treating the soil conditions with gypsum. Mr Ford has acknowledged that this application rate accords with acceptable practice. I also note that it has been based on what would be wet weather conditions, a factor I will return to later in these reasons.
9. Having thus considered the evidence of both experts, in my view the issue distils to a matter of whether Mr Williams 'belts and braces' approach establishes appropriate setbacks from the Coliban river system and from the 'escarpment' such that the level of risk to water quality is acceptable.

1. The issue of risk to water quality in open potable water supply catchments from on-site domestic wastewater treatment systems has been the subject of numerous proceedings of recent times.[11] It would be fair to say that in terms of merit, many if not all of these proceedings have turned on the important issue of the cumulative and addition of very small but incremental increases in risk to water quality. This is what is called into consideration under Guideline 1 of the Minister's Guideline.
2. This case is unusual in that it is agreed between the parties that Guideline 1 is met. It must follow the level of incremental risk from an increase in dwelling density would seemingly be deemed as acceptable.
3. What is in dispute here is whether the intent of the Minister's Guidelines to address water quality risks has been further met by way of complying with the Code of Practice as required under Guideline 2. On this point, for the reasons outlined already, the issue is ultimately about whether the proposed setbacks from the reservoir, waterway and the escarpment feature on the land are adequate.
4. It is instructive to repeat here what it is that the Code of Practice sets out about setbacks:[12]

Even when onsite wastewater management systems are properly designed, installed and maintained, potential environmental and public health risks always exist. The consequences of failing onsite treatment and land application systems are diverse and depend on the type of treatment system, the characteristics of the site and the wastewater, the sensitivity of the surrounding environment and proximity of neighbouring households and landuse.

To minimise the potential risks, onsite wastewater management systems must be installed with a 'buffer' or 'setback distance' to the property structures and the surrounding environment. Setback distances from primary and secondary sewerage and greywater systems are listed in Table 5.

The setback distances in potable water catchments are based on the Sydney Catchment Authority's requirements for residential developments in drinking water catchments (SCA 2010). These setback distances are based on in-depth scientific investigations and assessments using groundwater dye and plume studies, in-ground viral die-off studies, surface water flow studies, sophisticated modelled and ground-truthing which have been carried out over more than a decade.

Using Council's local knowledge, a comprehensive LCA undertaken in accordance with this Code and the latest version of the Model LCA Report [MAV & DSE 2006 (as amended)], Council may:

• increase these setback distances where it considers that there is an increased risk to public health and/or the environment

• reduce the setback distances in non-potable water supply catchments where it considers that the risk to public health and the environment is negligible.

Research (CRC WQ&T 2007) has shown that system failure usually occurs under wet conditions. Consequently, any consideration of a reduction to setback distances should consider the cumulative impacts of a number of systems failing during wet weather.

1. The following are key points to be drawn the above:
   • The Code of Practice establishes the relevant setback distances on a scientific basis.
   • The setback distances are intended to minimise residual risks arising from the failure of a treatment system and / or an application system and a range of other site and water quality conditions and factors.
   • The setback distances may be increased or reduced depending on the circumstances and risk to public health and the environment.
   • Any reduction in a setback distance should take into consideration the cumulative impacts from multiple system failures during wet weather conditions. In the alternative if cumulative risks from multiple systems failing in wet weather conditions was found to be unacceptable, a reduction in the setback distance could not be justified.
2. The Code of Practice establishes setbacks of 15m upslope from a cutting or escarpment and 150m from a dam or reservoir in a potable supply catchment and 100m from a waterway.[13]

1. In accordance with the heightened need to reduce the level of risk in potable water supply catchments, Coliban Water and Mr Ford say that an increase in the setback from the escarpment is required.
2. The 15m setback from a cutting or escarpment is qualified in Table 5 by footnote 12. This footnote clarifies that the setback applies to 'a cutting or escarpment from which water is likely to emanate'.
3. The location of the escarpment identified by Mr Ford in fact marks a change in slope generally following the boundary between two geological formations: the basalt and clay soils on which the irrigation would occur and the underlying sedimentary basement rock and its associated clay soils where there is no overlying basalt.
4. In my view, it is questionable whether the reference to this change in slope as an escarpment is correct. The geomorphological and ordinary meanings of this term is commonly understood to apply to a natural vertical or cliff like ridge of bare rock.[14] A cutting is similar in form but generally applied to a form of earthworks.
5. In any event even if I accept the change in slope to be a form of escarpment, the Code of Practice further clarifies that what is of concern is the potential for water to seep from this feature. Apart from some wet soil conditions well down slope of the line of the break in slope, he could not point to any evidence that this interface was or is a source of seeping water. Indeed Mr Williams points to the lack of any wet conditions along the break of slope and the absence of any plant species typically associated with soaks, springs or seepage. The various site photographs of these areas support Mr Williams' evidence.
6. Such conditions do not indicate that there is a need to increase the 15m setback. Mr Williams has surveyed with a reasonable degree of accuracy the setback of the proposed dwelling and effluent disposal field locations he has identified from his soil survey. This feature survey identifies setbacks from this break in slope vary from 15m to 20m.
7. Given my findings about the nature of this break in slope against the Code of Practice requirements, I conclude these setback from the break of slope fulfils the intent of the Code of Practice.

1. The 100m and 150m setback from a waterway and reservoir are contingent on effluent treatment, disposal and system maintenance requirements that Mr Williams' Land Capability Assessment and proposed wastewater management plan are designed to meet.[15]
2. However the proposed setbacks from the waterway and dam tail water are in excess of 300m and for the most part up to 350m. This is not disputed by Coliban Water or Mr Ford. This represents a doubling of the distance established under the Code of Practice as being acceptable for reservoirs and three times that for a waterway.
3. By deduction, the distance from the change in slope to varies from 300m to 250m. These are also two to three times the setback distances.
4. Mr Williams contends that the increase in this setback from the waterways reduces the level of risk to water quality. Given the matters set out in the Code of Practice and the intended purposes of the setbacks, I accept that this is a logical and appropriate conclusion to draw.
5. Further to the matter of risk, Mr Williams proposed rates of treated effluent application are extremely conservative, based on 90th percentile rainfall (wet weather) conditions that are then halved again. This of itself reduces the contribution of wastewater disposal to the wider catchment under wet weather conditions, thereby reducing the cumulative risk from any contribution the application of effluent might make in terms called for under the Code of Practice.
6. When this reduction in cumulative risk is accounted, it follows that the risk to water quality is further reduced above that by the proposed setbacks adopted in Mr Williams wastewater management plan.

1. While much of my reasons on the issue of water quality have focussed on the technical issues raised by the evidence of each expert, the underlying issue is ultimately about whether or not water quality will be subject to an unacceptable level of risk.
2. The various requirements established under the planning scheme, i.e. to treat and retain wastewater on-site in accordance with the SEPP Waters of Victorian, compliance with the Code of Practice and compliance with the Minister's Guidelines are all designed to establish what level of acceptable risk is acceptable. In short if these requirements can be met then the risk is acceptable and a permit can issue.
3. I find that the setbacks that have been in question are acceptable and that other issues raised by Coliban Water about compliance with the Code of Practice are not sustained. It follows that the proposed on-site wastewater disposal system and management plan put forward by Mr Williams is compliant with the Code of Practice. It thus follows that Guideline 2 of the Minister's Guidelines is satisfied (in the absence of any other issues being raised as set out earlier). Guideline 1, is as I have set out earlier also not in dispute and it is agreed that other guidelines could be addressed by way of conditions. Thus the Minister's Guidelines are also satisfied.
4. If these guidelines, the Code of Practice and the SEPP Waters of Victoria are found to be satisfactorily addressed it follows that the level or risk to water quality, if any exists, is acceptable. As such, the requirements of the Farming Zone and the objectives of the ESO4 are met and there is no basis on which to refuse a permit on grounds of unacceptable risk to water quality.

1. I have considered the issues bought into contention by the grounds of the Responsible Authority and Coliban Water. I find that the risk to water quality by the proposed dwelling on the subject land can be satisfactorily addressed. There is no reasons to refuse a permit on this basis. However there is clear and unequivocal policy about the future use and development of this land for agricultural purposes. Having regard to this policy and the purposes of the Farming Zone, I am not persuaded that the proposed use of the land for a dwelling is acceptable.
2. It follows that I will affirm the decision of the Responsible Authority and direct that no permit be granted.

[5] Clause 32 of the SEPP Waters of Victoria.

[7] Under the Catchment and Land Protection Act 1994.

[8] Department of Sustainability and Environment, November 2012.

[9] Environment Protection Authority, Publication No 891.3, February 2013.

[10] 20/30 treatment regime being effluent treated to a standard of less than 20 mg/L 5-day Biochemical Oxygen Demand and less than 30mg/l suspended solids.

[11] See for example: Western Water v Rozen and Anor (2008) 24 VR, [2008] 133 VSC 382; Rozen v Macedon Ranges SC (includes Summary) (Red Dot) [2009] VCAT 2746; Kaparis v Macedon Ranges SC (includes Summary) (Red Dot) [2012] VCAT 196; Mellington & Ors v Hepburn SC [2012] VCAT 651 and Pulis v Macedon Ranges SC [2012] VCAT 1457.

[12] Section 3.9 of the Code of Practice.

[13] Table 5 of the Code of Practice, 2013.

[14] 4th Edition of the Macquarie Dictionary.

[15] These being treatment to a minimum of 20/30 standard, application of treated effluent by pressure compensating sub-surface irrigation along the contours and a maintenance and service contract with an accredited service technician is in place to service the system in accordance with the Certificate of Approval and Septic Tank Permit conditions.