The Victorian Civil and Administrative Tribunal (VCAT) has recently delivered a leading decision on the application of the precautionary principle to the protection of proclaimed water catchments. This legal update summarises the decision of Rozen v Macedon Ranges Shire and Western Water [2009] VCAT 2746.

Background

In 2003 Maurice and Esther Rozen (Permit Applicants) applied for a permit to develop four dwellings on land in Woodend (Land). The Land had a total area of 72.35 hectares and was divided into four existing Crown Allotments which each had their own Certificate of Title. A separate dwelling was proposed to be constructed on each of the four allotments, three of which abutted the upper reaches of the Campaspe River with the fourth being approximately 250 metres from its closest point.

The Land was zoned Rural Conservation Zone-Schedule 1 and was subject to Vegetation Protection Overlay-Schedule 9 (Living Forest) and Environmental Significance Overlay-Schedule 4 (Eppalock Proclaimed Catchment). The Campaspe Reservoir was within the proclaimed catchment of Lake Eppalock.

In 2005 the Macedon Ranges Shire Council (Council) refused the permit application. This decision was appealed to VCAT. Western Water, although a statutory referral authority in the Macedon Ranges Planning Scheme (Planning Scheme), was not aware of the permit application until the Application for Review was filed with VCAT. Western Water objected to the proposal and supported Council’s refusal on the basis that -

  • The Land is within the proclaimed catchment of the Campaspe Reservoir, which supplies drinking water to the Woodend Township.
  • There is a direct link between increased dwelling density and a reduction in water quality; septic tanks and on-site wastewater treatment plants pose a risk to water quality because of poor maintenance, design, installation and/or operator error or plant malfunction.
  • A dwelling density of 1 dwelling per 40 hectares (as recommended by Guideline 1 of the Interim Guideline for Planning Permit Applications in Open Potable Water Supply Catchment Areas, August 2000 (Interim Guidelines)) is considered to be a reasonable benchmark for dwelling density in water supply catchments having regard to the current state of scientific knowledge and the precautionary principle.

In May 2007 VCAT set the Council’s decision aside and directed the Council to issue a permit for four dwellings. Western Water appealed this decision to the Supreme Court of Victoria (Supreme Court).

Supreme Court Decision

The Supreme Court appeal was essentially concerned with whether VCAT had erred in its conclusions in relation to the weight to be given to the 1 in 40 benchmark set by the Interim Guidelines and whether the precautionary principle, as it related to the risk to the catchment, had been correctly applied.

In September 2008 the Supreme Court upheld Western Water’s appeal on the basis that VCAT had misstated and misapplied the precautionary principle in circumstances where it was relevant, because both the Interim Guidelines and the planning scheme policy required VCAT to consider the question of the cumulative risk created by otherwise individually appropriate septic tank systems. The matter was remitted to VCAT for hearing by a differently constituted panel.

Prior to the matter being remitted to VCAT, the Minister for Planning adopted the Planning Permit Applications in Open, Potable Water Supply Catchment Areas Guidelines May 2009 (Guidelines), which replaced the Interim Guidelines. The Guidelines apply to all open potable water catchments declared to be special water supply catchment areas under Division 2 of Part 4 of the Catchment and Land Protection Act 1994 and they retained the 1 in 40 benchmark.

Second VCAT Hearing

At the second VCAT hearing, Western Water maintained its objection to the proposal on grounds which included that:

  • Onsite wastewater treatment plants pose a risk to water quality.
  • The greater the density of dwellings (and associated onsite wastewater treatment plants) the greater risk to drinking water quality.
  • The proposal was inconsistent with the Guidelines.
  • The dwelling density proposed was not consistent with development expectations of 1 dwelling per 40 hectares embodied in relevant planning policy, in particular the objectives of the Rural Conservation Zone and the Guidelines.
  • The proposal did not accord with the precautionary principle.
  • The proposal was contrary to the policies and procedures of the Planning Scheme, which specifically provides for the protection of proclaimed catchments.

At the hearing both Western Water and the Council indicated to VCAT that two dwellings on the Land would be accepted by them.

VCAT Decision

Notwithstanding the above concession, VCAT directed that a permit should be issued for the use and development of only one dwelling.

VCAT considered three main areas in its decision: the application of the precautionary principle; landscape and visual impact; and the application of planning policy to rural/agricultural and environmental issues.

In considering the application of the precautionary principle VCAT, with reference to the Supreme Court decision, found that –

  • The precautionary principle is applicable wherever there is a risk of serious damage to the environment, not only irreversible damage
  • The distinction between serious and irreversible damage is relevant because there is evidence that contamination of water in open water catchments can result in human harm and any risk to human health constitutes serious environmental damage
  • Risk to human health is highly relevant when considering development in open potable water catchments and must be given priority over other planning objectives, and this priority is recognised in the Planning Scheme, and
  • The Guidelines must be considered and applied as one barrier in a multiple barrier approach to protecting drinking water quality.

VCAT recognised that a critical issue was the application of the guideline of one dwelling per 40 hectares contained in the Guidelines, expressed as follows:

Density of dwellings

Where a planning permit is required to use land for a dwelling or to subdivide land:

  • the density of dwellings should be no greater than one dwelling in 40 hectares (1:40ha), and
  • each lot created in the subdivision should be at least 40 hectares in area.

This does not apply if a catchment management plan, water catchment policy or similar project addressing land use planning issues and the cumulative impact of onsite waste water/septic tank systems has been prepared for the catchment, and the objectives, strategies and requirements of the plan or project have been included in the planning scheme.

VCAT examined whether the exemption applied and considered whether any catchment management plan, water catchment policy or similar project had been prepared. VCAT found that the local planning policies in the Planning Scheme or the reference documents could not be considered to be documents described in the exemption. They noted that of particular importance was the fact that none of the policies or reference documents assessed the cumulative impact criteria.

In assessing the evidence given, VCAT considered that the real issue was the risk to water quality posed by the increased density of dwellings, hence people, in the area. This was not only a risk associated with an increased density of water treatment systems, but more generally a risk associated with increased population which also results in more horses and domestic pets, more use of chemicals, pesticides and sprays and more direct contact with water by people and animals.

VCAT accepted the evidence of Western Water’s expert that drinking water contamination by water treatment systems was the result of human error and human failing. VCAT considered that an increase in the density of the population increased the cumulative risk of potential contamination of the water quality and therefore dwelling density in open potable water supply catchments must be curtailed.

VCAT recognised that “in the absence of a specific water catchment overlay, the Government has expressed a strong policy position to limit dwelling density to one per 40 hectares” by adopting the Guidelines. VCAT further stated that “planning permit applications in open potable water supply catchments should be determined by reference to the policy in the current Guidelines; that each of the individual guidelines should be applied cumulatively; and that the current Guidelines should take priority over competing policy objectives or decision guidelines in the planning scheme in the event of a conflict.”

On the basis of the 1 in 40 hectare benchmark VCAT concluded that either one or two dwellings would be appropriate. VCAT’s ultimate decision that only one dwelling should be allowed rested on the local planning policy which was premised on the basis that dwellings should be related to agricultural production and further fragmentation of land should be avoided. The Tribunal was of the view that if the land was retained in single ownership it was more likely to be used for sustainable, productive agriculture and better land management and environmental improvements would be likely to result.

Summary

In summary, the effect of this decision is that in open potable water supply catchments where there has not been a catchment management plan, water catchment policy or similar project addressing land use planning issues and the cumulative impact of on site waste water treatment systems, the Guidelines, in particular the 1 in 40 hectare dwelling density benchmark, should be applied and should take precedence over other planning policy. If proposals are also assessed against agricultural and rural planning scheme policy it may be that a smaller number of dwellings will be considered appropriate given the particular site context even though the Guidelines may indicate a larger number could be acceptable.

At the time of publication of this update we note the second VCAT decision has been further appealed to the Supreme Court.