VCAT Volume 10 No 6

1. Two line of authorities in measuring natural ground level – which line of authority should be followed?

It may be recalled that in Faversham Mews Pty Ltd v Boroondara CC [2016] VCAT 1954 (editorial comment VCAT Vol 4 No 9) the Tribunal discussed two lines of authority on how to measure natural ground level (NGL).

One line of authority is that the ‘natural’ level means the surface level of the relevant land at the date the permit application was lodged (first line of authority).

The other line of authority is that the ‘natural’ level means the surface level of the relevant land before it was disturbed by human intervention for development such as excavation or filling. The Tribunal adopted the second line of authority in Faversham Mews.

In Degenhardt v Mornington Peninsula SC [2023] VCAT 31, the Tribunal considered an application for a two storey lateral extension to a two storey dwelling. Two previous applications had been refused by the Tribunal. Submissions from an adjoining objector were made that this was a repeat appeal, however the Tribunal was satisfied that changes had been made to the design and that the proceeding must be considered afresh and determined on the merits of the submissions and evidence.

The Tribunal was invited to dismiss the second line of authority. It was contended that:

  • A number of Tribunal decisions since the decision in the second proceeding have followed the first line of authority.
  • The lack of evidence of any disturbance to existing surface levels since around 1980 when the existing dwelling and its septic tank system was constructed.
  • The design objectives of the clause of the planning scheme in which the requirement is located relating to ensuring development is responsive to ‘landform [and] site conditions’.

The Council accepted there is logic behind both lines of authority, but preferred the first line of authority because it “represents a more equitable approach to enforcement and administration of the [planning scheme]”. The Council said the second line of authority imposes a ‘significant burden’ on permit applicants and the Council if the requirement was in contention.

In holding the view that the second line of authority should be adopted in the proceeding, the Tribunal stated:

I am not persuaded to decline to follow the second line of authority that I followed in the second proceeding, for the following main reasons:

(a) The existing surface level of land when an application is lodged does not respond to the ordinary meaning of a ‘natural’ level.

(b) Not all Tribunal decisions after the second proceeding have followed the first line of authority. There remains divergent authority.

(c) To the extent that the Council’s preference and the later Tribunal decisions have both relied on the Supreme Court’s decision in Shire of Gisborne v King, I adopt my reasons in Faversham Mews about why Shire of Gisborne v King is not binding authority for present purposes.

‘Burden’ alone is insufficient reason to follow the first line of authority.

The Council is the author of the requirement and it can therefore be inferred that the Council preferred a mandatory provision. I remain of the view that the first line of authority leaves open the possibility of pre-application manipulation of surface levels, especially by filling. If the Council considered the ‘burden’ was such that it was very difficult to administer the planning scheme, the Council has the opportunity to prepare an amendment to the requirement.

I acknowledge the Tribunal in the first proceeding said there is a discretion to construe any pre-application filling of the land as forming part of the subject application and therefore maintaining the ‘status quo’ of NGL. In this proceeding, the Council agreed there was this discretion.

I am not attracted to accepting there is this discretion, mainly because:

(a) Permission may not be required for earthworks to fill relevant land so I do not understand how pre-application filling of the land could form part of an application.

(b) Instead of providing certainty about the relevant level, it adds uncertainty if the filling was potentially undertaken many years before the making of the application.

Geotechnical evidence was called by both the Applicant and Objector. Council had also engaged a geotechnical engineer to peer review the Applicant’s geotechnical report and a land surveyor’s cross-sections to assist the Council in assessing the permit application. The Tribunal was satisfied overall that the Applicant’s geotechnical and cross sections evidence was “sufficiently reliable”.

A key issue in the proceeding was view sharing and the Tribunal was comfortable that the proposal was not unreasonably visually obtrusive and granted a permit.

See also:

  • Guide to Planning Appeals: Natural Ground Level

2. Expansion of Lysterfield quarry refused

In Hanson Construction Materials Pty Ltd v Head, Department of Jobs Precincts and Regions [2023] VCAT 49, the Tribunal refused a variation to the Work Plan (WP) that proposed the extension of the Lysterfield quarry area by approximately 21.7 hectares and 15 metres depth. The quarry currently extracts hornfels and granodiorite from a single pit for the production of hard rock construction products. The quarry has been operating since 1979.

Under the Mineral Resources (Sustainable Development) Act 1990 (MRSD Act), a delegate of the Department Head, Department of Jobs Precincts and Regions (Head, DJPR) is responsible for the administration of extractive industry activity. The Head, DJPR refused the application because of an objection from the Department of Environment, Land, Water and Planning (DELWP) (as it then was).

DELWP objected to that the WP Variation because it:

  • will result in the loss of habitat within the quarry land that supports endangered flora and fauna species;
  • has poorly quantified risks of adverse impact on native vegetation and habitat in the adjoining Churchill National Park (Churchill NP) because of changes to groundwater and surface water conditions that may affect groundwater dependant ecosystems (GDEs) and other habitat; and
  • presents unacceptable safety risks to visitors to the Churchill NP from blasting close to the common boundary with the quarry as well as other amenity impacts.

The Tribunal agreed with DELWP. It concluded that the risks to the environmental values of Churchill National Park have not been sufficiently assessed or quantified to a level that would be acceptable for statutory endorsement of the WP Variation. This followed from its findings that it did not have sufficient confidence in the proposed management responses intended to eliminate or minimise these risks to the extent practicable as is required to meet the objectives of the MRSD Act and the principles of sustainable development set out under section 2A of the MRSD Act.

See also:

  • Guide to Planning Appeals: Extractive industry

3. Failure to provide adequate density around growth area town centre scuttles subdivision

One of the significant challenges for growth area councils is to encourage developers to provide more density, especially around activity centres and public transport services.

In Peet No. 1895 Pty Ltd v Wyndham CC [2023] VCAT 168, the Tribunal upheld a Council refusal for a 414 lot residential development in Tarneit West largely because of the failure to provide adequate density.

The site is in the Tarneit North Precinct Structure Plan (TNPSP) and immediately south of the future Tarneit West Activity Centre and Davis Road Railway Station. The state government made an election commitment to deliver the railway station and the Tribunal was advised it was to be built in the next three years.

The Applicant submitted that planning scheme policy objectives are implemented through the structure planning process, and the guidance provided by related density targets. It was contended that the proposal implements urban consolidation policy by exceeding the targets contained in the TNPSP. It argued there is no planning basis to require greater housing density. It also pointed out that requiring higher densities will have flow-on effects such as with respect to assumptions upon which development contributions have been formulated.

The Applicant considered that the proposal exceeds every density measure contained in the scheme, delivers genuine housing diversity and complies with the TNPSP requirements including:

  • The proposal incorporates a range of lot sizes with variable widths and depths. The lot mix is diverse, a proposition endorsed by the Council officer who assessed the proposal;
  • The proposal exceeds the housing yield requirements of Plan 3 and Table 2 of the PSP; and
  • The proposal responds to the planned rail station by locating the most sizable superlots, suitable for higher density development, directly opposite the planned rail station.

On the other hand, Council submitted that the proposal is an under-development of the subject land having regard to the site’s unique qualities and opportunity to advance access to shopping, employment and services, housing diversity, housing affordability, walkability, public transport and heat island effect policies. It considered the proposal fails to respond to the planning policy framework and the vision, objectives and requirements of the TNPSP with regard to the delivery of housing diversity, lot yield and dwelling yield.

The Tribunal referred to the clear strong policy support and direction for increased densities associated with activity centres and transport infrastructure such as train stations. This is evident in the TNPSP, such as through objective 9 and requirement R7. It is also evident in the most recent State Government Precinct Structure Planning Guidelines 2021 targets, although these are not the same guidelines under which the TNPSP was formulated.

In supporting Council’s submissions, the Tribunal stated:

The TNPSP is close to a decade old and is the basis for a decision in this proceeding. I observe that a precinct structure plan formulated today, framed within the current VPA guidelines, may see more ambitious targets, including to capitalise on, to a greater degree, the significant public investment in the RRL and new railway station. 

Clause 16.01-1L seeks to encourage ‘medium density housing, especially within close walking distance of existing and planned fixed rail stations, defined activity centres, bus routes and employment areas’ (emphasis added). This policy can be contrasted with the TNPSP objective O9 ‘Build high density and transit-oriented neighbourhoods focussed on railway stations and proposed future railway station sites’ (emphasis added).

Given that numerical minima and indices are met by this permit application, can more be asked for? I accept requirements R5 and R6 are met. I note R6 emphasises achieving minima but there are no specific concerns in the TNPSP about exceeding minima, and there is no cap. I find there is a legitimate issue raised by the Council’s grounds that the proposal does not meet requirement R7. This is the case notwithstanding guidelines G8 and G9 refer to a range of lot sizes suitable for the delivery of medium and higher density housing types. The proposal provides a range of housing, however, it does not satisfy several objectives and requirements guiding a stronger representation of higher and high density housing opportunities.

The subject land abuts and fronts the new railway station that is part of the RRL. This is very important infrastructure serving a large growing community and other parts of the State. Requirement R7 says ‘Development must appropriately respond to the existing railway station, potential future railway station sites, and future Principal Public Transport Network (PPTN) through the creation of opportunities for high density residential development’ (emphasis added). Mr Negri accepted in oral evidence that the requirement has ‘more work to do’ given the presence of the new station. [82-85]

The Tribunal was also concerned that the lots set aside for higher density housing had a number of deficiencies and were more realistically for dual occupancy or three-four unit sites rather than multi-level apartments.

Another area of concern of the proposed subdivision was the lack of opportunities for street tree planting given the number of lots with a frontage of 8.5 metres or less. Lots that are less than 8.5 metres wide have insufficient space to provide a crossover, service connections and allow for the planting of street trees in accordance with Wyndham’s Tree and Urban Forest Policy 2021. The required clearance (offsets) cannot be achieved between the trees/driveways and service connections. This was exacerbated by the fact that 80 lots (approximately 20% of the lots) had a frontage of 8.5 metres or less. Whilst there was discussion during the proceeding that the matter could be addressed by condition of permit, the Tribunal was “not persuaded on the material presented that the relevant requirements are met with respect to the achievement of street tree requirements or that the alternative is properly known.”

The Department of Transport is a referral authority and did not originally object to the application. Whilst not automatically a party to the proceeding, it was granted approval to make a submission. It expressed concern that assumptions made in the traffic evidence about the future railway station may be wrong, despite the concession that there is no public concept plan and the design is not resolved. DoT submitted that this warrants a precautionary approach.

The Tribunal commented that the timing of this permit application and confirmation that the railway station will proceed provides an opportunity to ensure that the development of the subject land and the new railway station can and will work in an orderly manner.

In your editors’ view, the Tribunal’s decision in this matter can be seen as a significant outcome for growth area councils concerned with lack of density in proximity to activity centres and public transport services. It is interesting to note that the Council has proposed a planning scheme amendment that identifies the 400 metre area around the Tarneit West town centre where higher densities must be provided and amends the town centre concept plan in the PSP and identifies the locations where densities of 30 dwellings per hectare and 60 dwellings per hectare must be achieved.

See also:

  • Guide to Planning Appeals: Subdivision

4. Reconstitution of the Tribunal

The challenges involved in managing hearings appropriately while maintaining natural justice and procedural fairness were highlighted by Harrison v Merri-bek CC [2023] VCAT 97.

The matter arose from an application under section 89(1)(a) of the Planning and Environment Act 1987 for cancellation of a permit for two dwellings on the basis that the Applicants for Review had not received notice of the application. A preliminary hearing was scheduled for two days, and at the start of the second day one of the Applicants made a request for the Tribunal to be reconstituted. Such applications are subject to section 108 of the Victorian Civil and Administrative Tribunal 1998 (VCAT Act), which requires the request to be considered by a presidential member of the Tribunal. The reconstitution request was therefore considered by the Deputy President of the Tribunal.

The request for reconstitution was based on grounds suggesting that the Tribunal member had an interest in the matter; that evidence on the Hearing’s first day was presented in an unfair matter because the witness was allowed to search on her computer during questioning; and because the Tribunal allowed the witness not to answer questions during cross-examination. Further allegations made during submissions include that the Tribunal had made “threats” to parties in suggesting that the Applicants may be in contempt of the Tribunal, and that exchanges during the day created a basis for an apprehension of bias.

Reading between the lines, it appears that – for whatever reason – this first day was a challenging hearing. It should be noted that the other parties opposed the request for reconstitution, with Council in particular making detailed submissions that the hearing had been conducted properly and that a reasonable basis for apprehension of bias (and hence reconstitution) had not arisen.

Many of the grounds and allegations were ultimately not explored in detail, as the Deputy President found basis for reconstitution of the Tribunal based on a particular exchange. The Deputy President quoted a discussion exchange between the Tribunal and the parties relating to the approach to be taken to introducing an affidavit into evidence. In this exchange the Tribunal referred to the affidavit’s inclusion of various factual matters that they cautioned may not be relevant to the questions before the preliminary hearing.

The Deputy President noted as follows about this exchange (paragraphs 29 to 31):

The above exchange is an example of an explanation provided to the applicants by the Tribunal about the process for the calling of evidence in the proceeding.  It seems appropriate and helpful for the Tribunal to explain this process particularly when parties are self-represented.  Further, it is appropriate in my view, for a Tribunal to acknowledge that a process may be ‘unusual’ such as in this proceeding where the Tribunal stated that it was unusual for an applicant to call him or herself to give evidence.

However, I am troubled by the phrase ‘I will allow it, but again…, there is a lot of material in there that has no bearing on the questions that are before the preliminary hearing’. 

To my mind, this phrase, which in all likelihood was unintentional on the part of the Tribunal, might reasonably give rise to an apprehension of bias in a fair minded lay observer. 

The phrase indicates that the Tribunal might have prejudged the evidence by forming a view as to its relevance to the preliminary hearing.  Thus, a fair minded lay observer might reasonably apprehend that the Tribunal might not bring an impartial and open mind to the resolution of the proceeding.

The Deputy President therefore considered it necessary to reconstitute the hearing.

It is commendable that the Tribunal takes a scrupulous approach to apprehension of bias. However the exchange in question highlights the difficult tight-rope that Tribunal Members must walk.  The VCAT Act’s direction (at section 98(1)(d) “conduct each proceeding with as little formality and technicality, and determine each proceeding with as much speed, as the requirements of this Act and the enabling enactment and a proper consideration of the matters before it permit” requires a constant balancing of these factors with the strictest interpretations of principles of natural justice. A case such as this highlights that there is a very fine line between the kind of routine directions about conduct of matters heard in most hearings, and comments that may create apprehension of bias.

See also:

  • Guide to Planning Appeals: Appeals > Reconstitution of Tribunal

5. Affordable and social housing via subdivision condition

The tension between the importance of improving housing affordability, high-level policy supportive of “encouraging” provision of affordable housing (at Clause 16.01-2S of the Planning Policy Framework), and the lack of concrete statutory tools to actually require such housing, continues to cause difficulties. In 960 Blueways Development Pty Ltd v Whittlesea CC [2023] VCAT 179, the Tribunal struck out a condition requiring an affordable housing contribution (including a component of social housing) as part of a subdivision permit within the Urban Growth Zone.

The condition in question required that prior to a statement of compliance issuing, the permit holder needed to enter into a section 173 Agreement with requirements including that a minimum of 10% of dwellings in one precinct “be allocated for Affordable Housing to eligible households, as defined by the Act, through a mechanism that demonstrates eligibility, allocation and longevity for a minimum period of 10 years.” It further noted a component of this needed to be provided as a social housing, “either via transferral to a registered housing agency for the purpose of the delivery of Social Housing, or an equivalent value made in donations.”

In addition to state policy, the condition drew support from local policy that included amongst its policy guidelines:

Achieving the inclusion of 5 per cent social housing and 10 per cent affordable housing (that is not social housing) in the structure planning of any established or greenfield housing development.

The applicable Precinct Structure Plan also included a guideline that:

An application for subdivision of land into residential lots or development of land for residential or mixed use purposes should provide affordable housing as defined by the Planning and Environment Act 1987. The affordable housing should be located within the walkable catchment and provide for a range of housing typologies to meet demonstrated local need.

In addition to this policy support, Council pointed to sections 62(5)(b) and 62(6)of the Planning and Environment Act 1987, arguing that the condition was requiring “facilities” to be provided or paid for in accordance with a section 173 agreement. The Council accepted the principle that such agreement cannot be used to achieve a contribution that would otherwise be unlawful, in the absence of the consent of the permit applicant. Such a contribution therefore had to be truly voluntary. However Council advised that it understood the condition had been consented to by the Applicant.

The Tribunal was provided correspondence in which the Applicant agreed to conditions proposed by Council addressing a 10% affordable housing contribution in the relevant precinct. However the Applicant submitted that they did not agree to the form of the condition as imposed, including the provision of a component of social housing. The condition in question only said that the housing contribution “should” include a social housing contribution, and the officer report suggested that Council’s belief and intention was that any social housing contribution as part of the 10% overall contribution would be voluntary.

However the Tribunal accepted the Applicant’s concern with this interpretation, noting (at paragraphs 47 to 49):

While the officer’s report referred to any contribution toward social housing being voluntary, rather than a requirement, I can understand the applicant’s misgivings regarding the drafting of the condition.  The use of the word ‘should’ could be taken to elevate the provision of social housing beyond a voluntary action.  It states that it should be provided, potentially leaving it open for the Council to require its provision as part of the applicant meeting its obligations under the section 173 agreement.  A different choice of words, or drafting, could have more clearly conveyed the Council’s intent as expressed in the officer’s report…

Notwithstanding, it is arguable whether in order to be considered voluntary, given the applicant’s explicit resistance to providing any social housing, the condition should not include any reference to social housing.

The Tribunal therefore concluded that aspect of the condition and proposed contribution was not agreed on a voluntary basis.

The Tribunal’s consideration flagged as a potential debatable point, but did not resolve, whether affordable housing could be considered a “facility” for the purpose of sections 62(5) and 62(6) of the P&E Act. It also questioned whether the policy basis to support the imposition of the condition was strong enough given that the Panel considering the PSP had determined not to recommend that it include a requirement or metric for affordable housing.

Ultimately, however, it instead struck out the condition as insufficiently clear, identifying multiple problems with the drafting of the condition. For example, the condition seemingly required construction of dwellings, which the Permit Applicant argued was untenable given the permit for subdivision. Furthermore, the condition required a mechanism that demonstrated eligibility, allocation and longevity for a minimum of 10 years, but it was unclear what such a mechanism might involve.

We also note the Tribunal’s closing comments:

The Council submitted this is a ‘test case’ and that the decision will provide guidance in respect of how affordable housing can be delivered in greenfield subdivisions.  I do consider that this is so.  The task of the Tribunal in this proceeding is solely to determine whether Condition No. 35 should remain on the permit.  Consideration of mechanisms for the delivery affordable housing, where it should be provided, in what form and within what timeframe is beyond the scope of this application.  I make no findings in respect of such matters.

We flag this passage because in the context of both this paragraph and the whole decision we wonder whether the second quoted sentence was intended to read “I do not consider that this is so.” The Tribunal’s reluctance to see its task as solving this problem is understandable. Nevertheless, it seems clear that the gap between policy aspirations and implementation mechanisms on the realm of affordable housing remains considerable. We hope that the new Planning Minister has more success in closing this gap than her predecessors.

See also: 

  • Guide to Planning Appeals: Conditions > Affordable housing

6. Land Use Terms and the hospitality industry 

It can be difficult to precisely match land use terms – perhaps based upon quite traditional business models – to the many subtleties of how businesses may choose to operate. Two recent cases highlight this in the context of tourism and hospitality uses.

Quitt v Yarra Ranges SC [2023] VCAT 94 related to the definition of “bed and breakfast.” The Applicant sought a declaration that their proposed use was properly characterised as a Bed and breakfast and therefore did not need a permit. The Council did not agree, arguing that the proposal was in fact a Residential hotel, which would have been prohibited in the zone (Green Wedge A).

The question arose because of the configuration of the proposed use and its relationship to adjoining premises. The use was to be undertaken in a pair of adjacent buildings connected by a walkway that included a residence in one building and four attached cabins in the other. The residence was to be occupied by an employee of a “wellness retreat” already operating on adjacent land, who would then run the bed and breakfast with guests staying in the four cabins.

Council contended that this was not a bed and breakfast because:

  • There was a lack of physical and functional connection between the dwelling and the four rooms.
  • The resident was not the owner of the land.
  • The resident was not providing the accommodation.

On the first point, the Council pointed to the reasoning in Stuckey v Yarra Ranges SC [2014] VCAT 295 and Hoppach v Wangaratta RCC [2009] VCAT 2785 and argued that the cabins could not be considered part of the dwelling.

The Tribunal (constituted by the Deputy President) however, considered various aspects of the proposed layout and operation and concluded that the rooms were sufficiently tied to the main building to be considered part of the dwelling. They cited the close physical proximity to the building used as a primary residence for the operator, and material indicating that guests would be provided with meals which could be consumed in a communal area.

The Council also argued that the accommodation was not truly being provided by the resident of the dwelling; rather, the resident was an employee of the accommodation provider, which was the adjacent retreat. It argued that there was “a difference between ‘providing’ the accommodation and ‘assisting’ or ‘facilitating’ the delivery of the accommodation.” However, the Tribunal considered that the definition only required that a) the dwelling accommodate persons away from their normal place of residence and b) that the dwelling be used by a resident as their permanent place of residence. In any case, however, the Tribunal concluded the resident’s role in greeting guests, providing meals, and attending to service needs did in fact amount to providing the accommodation. The Council also noted that bookings were managed through the adjacent mountain retreat, but the Tribunal noted that the use of a third party to manage online bookings was common.

The Tribunal therefore declared that the use was a bed and breakfast.

East Melbourne Group Inc v Melbourne CC [2023] VCAT 77 involved another question relating to the nature of accommodation uses. In this case, an appeal had been lodged by objectors against grant of a permit for a Residential hotel. That application included a restaurant catering for 90 patrons (reduced to 48 at the start of the hearing). Objectors were opposed to the operation of the restaurant citing various factors such as its size and hours of operation. The restaurant was to be open to members of the public, although during the Hearing the Applicant offered to accept a condition limiting the use to guests of the hotel and their guests. Council had assessed the matter as a Residential hotel and accepted that the restaurant use was ancillary to the hotel.

The Applicants for Review argued that the restaurant should properly be considered as a separate use, calling planning evidence to this effect. Their witness argued that given the lack of restriction of the restaurant to guests, there was nothing preventing the use being booked out by the general public. The previous decision of Jinalec Park Pty Ltd v Mornington Peninsula SC [2007] VCAT 1238 was cited in this regard, in which the Tribunal had considered the fact that a restaurant was open to the public as determinative in forming a view it was not ancillary to the residential hotel. It was also noted that the application had not sought permission for sale of liquor under Clause 52.27, raising the possibility that it was a piecemeal application.

The Tribunal ultimately formed the view that the proposed restaurant was ancillary to the dominant use of residential hotel.

In forming this view the Tribunal had regard to several factors:

  • The familiar and logical link between the uses; the Tribunal noted this “does not mean that a residential hotel will or should always include a restaurant component, but a restaurant can be a realistically anticipated part of a residential hotel’s overall offer for its guests.” The ancillary use was therefore not discordant with the dominant use.
  • The proposed limit on the number of patrons (48) being not disproportionate to the number of available rooms (37).
  • Proposed amendments to plans had deleted one access so that entry could only be gained through the hotel lobby.

The Tribunal also turned its mind to the offer to limit the access to restaurant to hotel guests and their guests. However it considered that this created problems of enforceability, with various scenarios arising during the Hearing being discussed that would undermine the intent of the condition. The Tribunal therefore preferred a simpler condition in which the restaurant was only accessible to hotel guests.

Subject to this restriction the Tribunal considered that the restaurant could be considered ancillary to the residential hotel. It also ultimately concluded that the amenity impacts of the use could be acceptably managed and that the proposal was acceptable.

See also: 

  • Guide to Planning Appeals: Characterisation of use, Bed and breakfast, Restaurant