Australia: Application of the Guidelines for open water supply catchment areas and approach to precautionary principle confirmed

Rozen v Macedon Ranges Shire Council [2010] VSC 583

The Supreme Court has just issued its second decision in the Rozen matter and has once again confirmed that the precautionary principle should be applied not only where there is a risk of irreversible damage, but also where there is a risk of serious damage to the environment.  The decision also provides a very clear endorsement of the force of the "Guidelines for development in open potable water supply catchments" in decision making on new development and the circumstances that must be in place before the Guidelines can be displaced.   

This legal update provides an overview of the various VCAT and Supreme Court proceedings in this long running matter, and details of the latest Supreme Court decision.


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.  The Land was located within the proclaimed catchment of the Campaspe Reservoir, which supplies drinking water to the Woodend Township.

In 2005, the Macedon Ranges Shire Council (Council) refused the permit application.  The Permit Applicants appealed to the Victorian Civil and Administrative Tribunal (VCAT).

First VCAT Hearing

At the hearing, Western Water objected to the proposal and supported Council's refusal on the basis that –

  • The Land was within the proclaimed catchment of the Campaspe Reservoir
  • There was 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, and
  • 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)) was 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.

The precautionary principle is one of a number of considerations and principles designed to guide all levels of government in the development and implementation of environmental policy and programs.

The Intergovernmental Agreement on the Environment expresses the precautionary principle as follows:

Where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by:

(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment; and

(ii) an assessment of the risk-weighted consequences of various options.

In May 2007, VCAT allowed the appeal and directed the Council to issue a permit for four dwellings having placed significant weight upon the compliance of the proposal with the Sceptic Tank Code of Practice and having taken the view that the precautionary principle was not invoked in the absence of irreversible as distinct from serious harm to the environment.  Western Water appealed this decision to the Supreme Court of Victoria (Supreme Court).  

Supreme Court Decision 1

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. The Court held that 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 Planning Permit Applications in Open, Potable Water Supply Catchment Areas Guidelines May 2009 (Guidelines) were adopted by the State Government, replacing the Interim Guidelines.

Second VCAT hearing

At the second VCAT hearing, Western Water and the Council maintained their objection to the proposal and the Tribunal formed the view that the appeal raised the following three considerations:

  1. water quality issues and in particular the application of the precautionary principle in the context of a development of this type
  2. landscape and visual impact issues
  3. sustainable land management and agricultural land use issues.

In considering the application of the precautionary principle VCAT found that the precautionary principle is applicable wherever there is a risk of serious damage to the environment, not only irreversible damage

The Tribunal found that a permit for not more than two dwellings should be granted because of unacceptable risk of water contamination associated with increased dwelling density, however, the Tribunal ultimately held that, having regard to sustainable land management and agricultural land use objectives, a permit should issue for only one dwelling.

The Permit Applicants appealed this decision to the Supreme Court on the following grounds:

  1. the Tribunal erred in resolving water quality issues as it did, because it misdirected itself as to the application of the Guidelines, and in the application of the precautionary principle
  2. the Tribunal misdirected itself in resolving the agricultural land use issues against the Applicants because it misapprehended the relevant planning policy framework, failed to have regard to town planning evidence, and failed to apply the correct test in determining that only one rather than two dwellings should be permitted.

Supreme Court Decision 2

In his Judgment on 14 December 2010, his Honour, Justice Osborn, rejected each of the grounds of appeal argued by the Applicant and concluded that the decision of the Tribunal should be upheld.  He specifically found that -

  1. the Tribunal's findings regarding water quality were sufficient to dispose of the challenge to this aspect of the decision (four dwellings was contrary to the Guidelines and granting the permit application was contrary to the precautionary principle and the planning scheme objectives directed to ensuring protection of the potable water supply within the catchment).
  2. the Tribunal's findings regarding the interpretation and application of the Guidelines were open on the evidence.  His Honour considered that the exemption in guideline 1*  did not apply and rejected the Applicant's argument that local policies and reference documents in the planning scheme fulfilled the requirements of the exemption.  
  3. the Tribunal's findings regarding fragmentation of land holdings and agricultural land use were also open on the evidence.  His Honour was satisfied that the Tribunal's reasons, when read as a whole, demonstrated that it had applied the proper test in determining whether two dwellings (or one) would be an acceptable planning outcome.

More generally, His Honour -

  1. accepted that the Guidelines formed part of a multi-barrier approach to the protection of water quality and to avoid serious risk to human health.
  2. rejected the argument that the policy in the planning scheme invokes the exemption in the Guidelines, specifically, he found that Clause 22.10 "does not ... itself constitute a plan or policy which has been prepared for the catchment, addressing the question of cumulative impacts of on site treatment and septic tank systems".  He considered that "what the Guidelines envisage is a catchment plan or policy prepared by the Catchment Management Authority, independently of the Planning Scheme, and then incorporated in terms of its outcomes within the Planning Scheme."
  3. found that none of the reference documents in Clause 22.03 invoke the exemption.

The second Supreme Court decision now provides clear endorsement of the force of the Guidelines for decision making in relation to developments within open potable water catchments and clarifies what is required before the Guidelines can be displaced through the exemption in guideline 1.

* guideline 1 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/sceptic 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."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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