Box Hill OHP v Whitehorse CC
[2024] VSC 199
•29 April 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION AND PLANNING LIST
S ECI 2023 04283
| BOX HILL OHP PTY LTD | Appellant |
| v | |
| WHITEHORSE CITY COUNCIL | Respondent |
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JUDGE: | Watson J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 March 2024 |
DATE OF JUDGMENT: | 29 April 2024 |
CASE MAY BE CITED AS: | Box Hill OHP v Whitehorse CC |
MEDIUM NEUTRAL CITATION: | [2024] VSC 199 |
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PLANNING – Appeal from Victorian Civil and Administrative Tribunal – Land in Residential Growth Zone – Whether permit should have been granted for proposed service station – Whether Tribunal’s decision unreasonable – Whether Tribunal failed to undertake integrated assessment – Whether Tribunal erred by impermissibly assessing the proposal against a hypothetical ideal – Leave to appeal granted – Appeal dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Ms E Porter SC Ms E Bergin | MinterEllison |
| For the Respondent | No appearance |
HIS HONOUR:
Box Hill OHP Pty Ltd (‘OHP’) wants to build and operate a service station at 793-797 Whitehorse Road, Mont Albert (‘the land’). Under the Whitehorse Planning Scheme (‘the planning scheme’) it requires a permit to do so.
OHP applied to Whitehorse City Council (‘the Council’) for a permit for a proposed service station. The Council refused the application. OHP filed an application for review of the Council’s decision with the Victorian Civil and Administrative Tribunal (‘VCAT’ or ‘Tribunal’). On 16 August 2023 VCAT affirmed the Council’s decision to reject OHP’s application and determined that no permit should be issued for the proposed service station.
OHP now seeks leave to appeal from that decision. The prospects of the appeal are real and not fanciful, so I would grant leave to appeal.
Essentially OHP says that the Tribunal was wrong to reject a permit for a service station that was otherwise acceptable because of an overarching policy objective to encourage higher residential density land use in the area the land was situated. I have concluded that the Tribunal’s decision does not contain an error of law. For the reasons which follow, I would dismiss the appeal.
The central issue
Under the planning scheme the land is in a residential growth zone (‘RGZ’) and is also in a substantial change area.
In the RGZ there are three categories of use:
Section 1 uses, which do not require a permit;
Section 2 uses, which do require a permit; and
Section 3 uses, which are prohibited.
Use of land as a service station is a Section 2 use and so requires a permit in a RGZ.
Clause 32.07 of the planning scheme sets out the purposes of the RGZ:
To implement the Municipal Planning Strategy and the Planning Policy Framework.
To provide housing at increased densities in buildings up to and including four storey buildings.
To encourage a diversity of housing types in locations offering good access to services and transport including activity centres and town centres.
To encourage a scale of development that provides a transition between areas of more intensive use and development and other residential areas.
To ensure residential development achieves design objectives specified in a schedule to this zone.
To allow educational, recreational, religious, community and a limited range of other non-residential uses to serve local community needs in appropriate locations.
Clause 21.06 sets out the Council’s policy with respect to housing and identifies substantial change areas as providing for ‘housing growth with increased densities’.
In its decision VCAT:
(a) identified four key issues requiring resolution:
·Does the proposal respond to its zoning and policy context?
·Is it an appropriate location for a service station?
·Is there a need for a service station at this location?
·Will the service station cause unacceptable amenity impacts?[1]
(b) acknowledged that the proposed service station was a permitted use and that amenity concerns could be addressed;[2]
(c)made a finding regarding the need for a service station;[3]
(d)made findings favourable to OHP regarding built form, landscaping, traffic impacts and advertising signs;[4] and
(e)concluded that the use and development of a service station was contrary to the overall strategic direction for the area in which the land is located, which seeks ‘to provide for more intense and high density residential development which will increase housing stock in the municipality’.[5]
[1]Box Hill OHP Pty Ltd v Whitehorse CC [2023] VCAT 949 (‘Tribunal’s reasons’), [8].
[2]Ibid [9].
[3]Ibid [59]–[61].
[4]Ibid [74]–[79].
[5]Ibid [10].
It is this latter finding which is central to this appeal. OHP argues that:
(a) The Tribunal’s finding was legally unreasonable having regard to the Tribunal’s other findings regarding the proposed service station use;
(b) The Tribunal impermissibly treated the service station proposal’s consistency with ‘the planning policy and strategic vision’ as a threshold issue prior to and without regard to its amenity impacts; and
(c) The Tribunal failed to consider whether a service station was an ‘acceptable’ outcome under the planning scheme, but rather impermissibly considered the application by reference to an ideal or optimal use, being higher density housing.
OHP does not cavil with the Tribunal’s identification of the key issues in the case.[6] It accepts that those objectives of the planning scheme which encourage higher density residential use in the RGZ and substantial change areas were relevant considerations which the Tribunal needed to take into account.[7] It also accepts that for a RGZ and a substantial change area the planning policy provides relatively more encouragement for housing use and less encouragement for a service station.[8] OHP does not contend that the Tribunal should have taken account of other relevant considerations beyond those it considered in its decision or that it took into account irrelevant considerations, although it does say the Tribunal did not integrate all of those considerations in a synthesised balancing exercise.
[6]Trial Transcript 26 March 2024 (‘Trial Transcript’) 43/1-10.
[7]Trial Transcript 44/24-29, 46/20-27.
[8]Trial Transcript 67/9-16.
In determining whether the Tribunal has made an error of law it is well established that:
The weight to be given to the various considerations which may be relevant on the one hand, and to particular facts bearing on those considerations on the other hand, is not fixed by the planning scheme but is essentially a matter for the decision maker.[9]
[9]Rozen v Macedon Ranges Shire Council & Anor [2010] VSC 583, [172].
I have concluded that when regard is had to the totality of the Tribunal’s reasons the better characterisation of the Tribunal’s decision is that it permissibly gave weight to the policy objectives of the planning scheme and its prioritisation and encouragement for increased density of housing use in the area the land is situated as part of an overall weighing of the various factors which were relevant on the application for the permit.
As a result, I find that the errors for which OHP contends in the Tribunal’s decision are not demonstrated.
The statutory framework
Senior counsel for OHP very helpfully referred me to a range of provisions in the Planning and Environment Act 1987 (Vic) (‘the Act’).
The application before the Tribunal was made under s 77 of the Act. It provides:
An applicant for a permit may apply to the Tribunal for review of a decision by a responsible authority to refuse to grant the permit.
In this case the Council was the responsible authority.
Section 84B of the Act sets out those matters which the Tribunal must take into account on a s 77 review. Section 84B provides:
(1)In determining an application for review under this Act, the Tribunal must–
(a)take account of any matter which the person or body in respect of whose decision the application for review is made–
(i) properly took account of in making its decision; or
(ii)was required to take account of in making its decision; and
(b)have regard to any matter which the person or body in respect of whose decision the application for review is made–
(i) properly had regard to in making its decision; or
(ii) is required to have regard to in making its decision.
(2)In determining an application for review under this Act, in addition to the matters referred to in subsection (1), the Tribunal–
(a) must take into account any relevant planning scheme;
(b) must have regard to the objectives of planning in Victoria;
…
Section 84B of the Act brings into play a number of other sections of the Act including relevantly:
(a) section 4 of the Act which sets out the objectives of planning in Victoria;
(b) section 6(2) which sets out a range of matters for which a planning scheme may provide;
(c) section 60 of the Act which provides the matters a responsible authority (in this case the Council) must or may consider in deciding on an application.
Two paragraphs of s 6(2) of the Act were given particular emphasis in OHP’s submissions, they were that a planning scheme may:
(a) set out policies and specific objectives; and
(b) regulate or prohibit the use or development of any land.
In relation to s 60 of the Act, OHP particularly relied upon the provisions of subsection (1)(a) and (b) which mirror exactly the provisions in ss 84B(2)(a) and (b). Counsel for OHP also referred to ss 60(1)(e) and (f) which require counsel to have regard to significant environmental, social and economic effects. These provisions were not said to be particularly relevant in the circumstances of the appeal but important for understanding the context of various decisions in the authorities regarding the importance of integrated decision making in planning decisions.
The planning scheme
The planning scheme contains a number of relevant provisions which are overlapping, interlocking and discursive.
I have set out the purposes of the RGZ in clause 32.07 of the planning scheme above. A number of other provisions of clause 32.07 are relevant:
(a) The use of land for a dwelling is a section 1 use which does not require a permit;
(b) The proposed use as a service station is a section 2 use which does require a permit;
(c) Under clause 32.07–2 a service station use is required to satisfy certain conditions. It is accepted that the application for the permit met those conditions;
(d) Clause 32.07–8 provides that a permit is required to construct a building or construct or carry out works for a use which is a section 2 use; and
(e) Clause 32.07–13 sets out decision guidelines.
Clause 32.07–13 relevantly provides:
Before deciding on an application, in addition to the decision guidelines in clause 65, the responsible authority must consider, as appropriate:
General
· The Municipal Planning Strategy and the Planning Policy Framework.
· The purpose of this zone.
· The objectives set out in a schedule to this zone.
…
Dwellings and residential buildings
·For the construction of one dwelling on a lot, whether the development is an under-utilisation of the lot.
…
Non-residential use and development
· Whether the use or development is compatible with residential use.
· Whether the use generally serves local community needs.
· The scale and intensity of the use and development.
·The design, height, setback and appearance of the proposed buildings and works.
·The proposed landscaping.
·The provision of car and bicycle parking and associated access ways.
·Any proposed loading and refuse collection facilities.
·The safety, efficiency and amenity effects of traffic to be generated by the proposal.
Clause 21.06 of the planning scheme sets out the Council’s policy on housing. It is a very long clause. It defines substantial change areas as areas in which the Council seeks to provide for housing growth with increased density. Relevant portions of the clause include:
21.06–1 Overview
…
The City of Whitehorse is under increased pressure to accommodate more people who are attracted to the area due to its strategic location, high amenity residential areas and quality services and facilities.
…
Change and growth in urban areas with good public transport access can occur while contributing to the City’s valued neighbourhood character.
…
The Council’s Housing Strategy 2014 identifies areas of substantial, natural and limited growth. These categories of housing change are aligned with the neighbourhood character statements prepared for each area as part of the Neighbourhood Character Study 2014 and the planning controls applying to the land. These statements and controls aim to direct housing growth across the municipality in a way which reflects the community’s neighbourhood character aspirations, while balancing the future housing needs of Whitehorse. They are described as follows:
·Substantial Change areas provide for housing growth with increase densities, including inside designated structure plan boundaries and opportunity areas, in accordance with the relevant plans as well as around most train stations, adjoining tram routes and around larger activity centres.
·Natural Change areas allow for modest housing growth and a variety of housing types provided they achieve the preferred future neighbourhood character as identified in Clause 22.03 – Residential Development.
·Limited Change areas enables specific characteristics of the neighbourhood, environment or landscape to be protected through greater control over new housing development. These areas represent the lowest degree of intended residential growth in Whitehorse.
…
21.06–2 Vision
The vision for housing in the City is “To ensure that housing in the City of Whitehorse meets residents’ needs in terms of location, diversity, sustainability, accessibility, affordability and good design”. There are a number of key challenges facing the City of Whitehorse in relation to housing. These are:
·Accommodating an additional 12,997 dwellings to house the projected population growth in the City to 2036.
…
·Better utilising transport corridors including train and tram routes for medium and higher density housing.
…
Key housing principles
…
·Promote housing growth and diversity in locations within walking distance of public transport and local services such as shops, parks and education.
…
·Ensure housing in substantial change areas is designed to achieve and enhance sense of place and identity, and facilitate neighbourhood participation.
…
Objectives
…
Substantial change areas
·Support increased residential densities.
·Support increased housing choice by allowing for a diversity of dwelling types, sizes and tenure to suit a range of household types.
·Facilitate achieving a new, preferred character for these areas over time through quality developments.
…
·Encourage the provision of shop-top dwellings and low scale apartment developments in activity centres, particularly within key Neighbourhood Activity Centres and on sites abutting the Principle Public Transport Network and main roads.
…
21.06–7 Non-residential uses
Key issues
·Ensuring non-residential uses are designed in a way that integrates these uses and their built form into their residential environments and that there is no detriment to the community or the surrounding residential amenity.
…
Objectives
…
·To ensure that non-residential uses do not cause detriment to the community or the amenity of the surrounding residential area.
…
Strategies
·Implement policy to direct non-residential uses to appropriate locations, and provide parameters for their operation.
21.06–8 Policy and the exercise of discretion
It is policy to:
·Ensure that all development applications comply with the Residential Development Policy at Clause 22.03.
·Ensure that all development applications are assessed in accordance with the Residential Development Policy at Clause 22.03.
·Ensure that all non residential use and development applications within a residential zone comply with the Non-Residential Uses in Residential Areas Policy at Clause 22.05.
As is evident from clause 21.06-8 above, the permit application for the service station was required to comply with the Residential Development Policy in clause 22.03. Clause 22.03 of the planning scheme provides:
22.03 RESIDENTIAL DEVELOPMENT
This policy applies to all applications for development within the Neighbourhood Residential, General Residential, Residential Growth, Mixed Use and Priority Development Zones. Development of land in these zones will need to demonstrate consistency with the attached Neighbourhood Character Precincts map (Map 1).
…
22.03–1 Policy basis
The importance of residential development within the City of Whitehorse is set out in the Municipal Strategic Statement (MSS).
This policy:
…
·Ensures that residential development within the City of Whitehorse is consistent with the three categories of housing change and the housing objectives of Clause 21.06 – Housing.
…
22.03–2 Objectives
…
·To ensure development contributes to the preferred neighbourhood character where specified.
·To provide certainty to the community about the areas targeted for and protected from increased development.
·To accommodate the population increases in the municipality in the areas identified as being able to sustain higher density based on environmental and infrastructure considerations.
·To recognise that areas of substantial and natural change will make a significant contribution to increases in housing stock.
·To facilitate development in areas of substantial change.
22.03–4 Categories of Housing Change
…
Strategies for Substantial Change Areas
·Encourage the following forms of housing in Substantial Change areas:
· Townhouses.
· Units.
· Flats and apartments.
…
·Create a new, higher density urban character in areas located away from sensitive interfaces.
…
·Ensure adequate infrastructure is in place to support substantial change areas.
The planning scheme provides for non-residential uses in residential areas in clause 22.05:
22.05 NON-RESIDENTIAL USES IN RESIDENTIAL AREAS
This policy applies to all land in a residential zone.
22.05–1 Policy basis
Clause 21.06 Housing recognises that there is a legitimate need for non-residential uses in residential areas to serve the needs of the local community. These uses however have potential to adversely impact upon the amenity of residential areas if they are poorly designed or located. It is important that these non-residential uses provide a net community benefit and are designed to integrate into the residential environment with minimal impact on residential amenity. They should be in a highly accessible location and the traffic that they generate needs to be compatible with the role and function of the street and the surrounding area.
22.05–2 Objectives
·To make provision for services and facilities demanded by local communities in a way that does not detract from the amenity of the area.
…
22.05–3 Policy
It is policy that:
Location
…
·Non-residential uses are encouraged on a corner site and abutting a Road Zone Category 1 and 2.
·Non-residential uses are encouraged to be in a location where there is a demonstrable need for the proposed facility or service.
…
Amenity
·Non-residential uses are discouraged if they will cause nuisance to nearby residential properties by way of noise, traffic, lighting or loss of security.
Clause 65 provides for general decision guidelines in the following terms:
65 DECISION GUIDELINES
Because a permit can be granted does not imply that a permit should or will be granted. The responsible authority must decide whether the proposal will produce acceptable outcomes in terms of the decision guidelines of this clause.
65.01 Approval of an application or plan
Before deciding on an application or approval of a plan, the responsible authority must consider, as appropriate:
· The matters set out in section 60 of the Act.
…
· The purpose of the zone, overlay or other provision.
· Any matter required to be considered in the zone, overlay or other provision.
· The orderly planning of the area.
…
·The impact the use or development will have on the current and future development and operation of the transport system.
In its submissions OHP emphasised the importance of integrated decision making under the planning scheme. In this regard I was referred to three further provisions of the planning scheme:
71.02–1 Purpose of the Planning Policy Framework
The Planning Policy Framework provides a context for spatial planning and decision making by planning and responsible authorities. The Planning Policy Framework is dynamic and will be built upon as planning policy is developed and refined, and changed as the needs of the community change.
The Planning Policy Framework seeks to ensure that the objectives of planning in Victoria (as set out in section 4 of the Act) are fostered through appropriate land use and development planning policies and practices that integrate relevant environment, social and economic factors in the interests of net community benefit and sustainable development.
…
71.02–3 Integrated decision making
Victorians have various needs and expectations such as land for settlement, protection of the environment, economic wellbeing, various social needs, proper management of resources and infrastructure. Planning aims to meet these needs and expectations by addressing aspects of economic, environmental and social wellbeing affected by land use and development.
The Planning Policy Framework operates together with the remainder of the scheme to deliver integrated decision making. Planning and responsible authorities should endeavour to integrate the range of planning policies relevant to the issues to be determined and balance conflicting objectives in favour of net community benefit and sustainable development for the benefit of present and future generations.
…
71.03–2 Section 2 uses
A use in Section 2 requires a permit. Any condition opposite the use must be met. If the condition is not met, the use is prohibited.
Making decisions about Section 2 uses
Because a use is in Section 2 does not imply that a permit should or would be granted. The responsible authority must decide whether the proposal will produce acceptable outcomes in terms of the Municipal Planning Strategy, the Planning Policy Framework, the purpose and decision guidelines of the zone and any other decision guidelines in Clause 65.
It is possible to distil from the above provisions several key propositions:
(a) The planning scheme prioritises and encourages increased density of housing in a RGZ and substantial change area (‘the increased density objective’);
(b) Non-residential uses are expressly permitted in a RGZ or substantial change area and in particular the proposed use in this case of a service station was a permitted use;
(c) Whilst non-residential uses are permitted in a RGZ or substantial change area the planning scheme provides greater priority and encouragement to the development of increased density of housing in those areas and lower priority and lesser encouragement to non-residential uses;
(d) In determining whether a non-residential use was permitted in the RGZ or substantial change area, the Tribunal was obliged to consider, amongst other things:
(i) the increased density objective;
(ii) the need of the community for the non-residential use; and
(iii) the amenity impacts of the proposed non-residential use;
(e) In determining the application the Tribunal was required to consider whether the proposed use would produce an ‘acceptable outcome’; and
(f) In reaching its decision as to whether or not there was an acceptable outcome, the Tribunal was required to undertake a task of ‘integrated decision making’. That is, to integrate the range of planning policies relevant to the issues to be determined and balance conflicting objectives in favour of net community benefit.
As noted above clause 32.07 sets out a number of objectives for a RGZ and clause 21.06 sets out a number of objectives for a substantial change area. Nonetheless it is apparent that in each instance it is appropriate to describe the increased density objective as the overarching objective of those designations.
Unreasonableness
OHP says that it was unreasonable for the Tribunal to reject the proposal because it constituted a ‘significant departure’ from the increased density objective in circumstances where the Tribunal had found that the service station proposal:
(a) was permissible under the RGZ;[10]
[10]Tribunal’s reasons [9], [36].
(b) would service the needs of the local community;[11]
[11]Ibid [36].
(c) had acceptable amenity impacts;[12]
[12]Ibid [70]–[73].
(d) met many of the policy objectives of clause 22.05;[13]
[13]Ibid [39], [49].
(e) had locational attributes that made it suitable for a service station;[14]
[14]Ibid [49].
(f) was appropriate in built form;[15]
[15]Ibid [75].
(g) had an acceptable landscape plan;[16]
(h) did not raise any issues regarding traffic impacts;[17] and
(i) met the provisions of clause 52.05 and clause 22.02 of the planning scheme in relation to advertising signs.[18]
[16]Ibid [76].
[17]Ibid [77].
[18]Ibid [79].
OHP will demonstrate legal unreasonableness if having regard to the statutory context the Tribunal’s decision ‘lacks an evident and intelligible justification’.[19] On this aspect of its argument it has failed to do so.
[19] Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, [76].
First, the matters enumerated in paragraphs (a) to (i) were necessary conditions for approval but as clause 65 of the planning scheme makes manifest they are not sufficient conditions.
Secondly, as OHP acknowledges, ss 84B and 60 of the Act and clause 65 of the planning scheme all require the Tribunal to take into account the increased density objective.
Thirdly, once it is accepted that the increased density objective is a matter properly to be taken into account in a multifactorial mix it logically follows that sometimes that factor will be the one which tips the scale one way or another in decision making.
Fourthly, the Tribunal did not make an unqualified finding regarding the need for a service station in the area where the land is situated.
The Tribunal:
(a) notes that there is an existing 7/11 service station and associated convenience store located 300 metres away from the land;[20]
(b) refers to the evidence of other service stations relatively nearby;[21] and
(c) discusses the analysis of need in the evidence of Mr Lee (an economist called by OHP).[22]
[20]Tribunal’s reasons [16].
[21]Ibid [60].
[22]Ibid [56]–[58].
In light of all of that evidence, at paragraphs 60 and 61 of its reasons the Tribunal says:
60.I accept that Mr Lee’s evidence demonstrates that there is a market need for a service station, which could be satisfied on the subject site. However, he acknowledges a substantial share of customers would also be ‘passing trade’ travelling along Whitehorse Road who may live outside the catchment. Conversely, the local community can also purchase fuel at the existing service stations nearby or outside the municipality during their daily activities.
61.I find Mr Lee’s analysis does not lead me to the conclusion that departure from the housing policy objectives for increased residential densities at this location is warranted for the reasons discussed above.
(emphasis added).
Earlier in its decision (referring to its later findings regarding need), the Tribunal has balanced the various factors it was required to consider and in particular has determined that, given what might be described as evidence of a fairly tepid need for a service station, the increased density objective should be given greater and, in this case, decisive weight:
36.… I agree with the applicant that non-residential uses, such as petrol stations, are a common occurrence in residential areas along main roads. I also accept that Mr Lee’s needs-based and fuel demand analysis demonstrates the use will service the needs of the local community, as well as passing traffic. …
37.However, I question whether the need for a service station outweighs the net community benefit of providing additional housing in a location that has excellent access to services and public transport and is near the Box Hill MAC. I accept Council’s argument that this is the clear vision of their policies.
38.…. Whilst I acknowledge a new service station will benefit customers who may live in the local area, the proposal is inconsistent with the longer term policy vision in the Planning Scheme.
39.I acknowledge the proposal may satisfy many of the criteria in clause 22.05 (Non-Residential Uses in Residential Area Policy). However, when taking a wholistic view of all of the purposes in the RGZ and policies in the Planning Scheme, I find the benefits to the local community associated with obtaining fuel, convenience goods and a car wash nearby do not outweigh those associated with increased residential development at this location.
(emphasis added)
In the circumstances, it was not unreasonable for the Tribunal to reach the conclusion it did. The Tribunal’s reasoning does not lack an evident and intelligible justification.
One final aspect of OHP’s argument in this regard should be noted. It is said that the condition which prohibits service stations on allotments greater than 3,000 square metres ought to be understood as assisting in ensuring that service stations are not established on sites which have strategic potential for large residential development. Thus a service station which met the condition could not rationally be considered as detracting from the increased density objective.
This argument does not bear scrutiny. It is plain that a site which is less than 3000 square metres may contribute to increased residential density and that its development for a non-residential use may impede, or at least not assist, in increasing residential density. Satisfaction of the condition does not somehow obviate a consideration of the increased density objective.
An impermissible threshold issue?
Having set out the four key questions in paragraph 8 of its reasons, the Tribunal summarises its conclusion in paragraphs 9 and 10 in the following terms:
9.Taking into consideration the submissions, evidence, and provisions of the Planning Scheme, I have decided to refuse to grant a planning permit. I acknowledge the use is permitted in a RGZ2 and the applicant has provided evidence that amenity concerns, such as noise, can be addressed through acoustic fencing and conditions on the operation.
10.However, prior to assessment of amenity matters, my first task is to assess whether the proposal is consistent with planning policy and vision for the site and wider area. I am persuaded by Council’s argument that use and development of a service station at this location is contrary to the overall strategic directions for this area which seek to provide for more intense and higher density residential development which will increase housing stock in the municipality. My reasons follow.
In the first sentence of paragraph 10, the Tribunal says that ‘prior to assessment of amenity matters’ its ‘first’ task is to assess whether the proposal for the service station is consistent with the planning policy and strategic vision for the site and wider area.
OHP says that because it is one of the purposes of the RGZ to allow for non-residential uses which do not adversely impact on amenity, it is logically incoherent to determine consistency of the proposed use with planning policy and strategic vision without considering amenity impacts at the same time. In this sense OHP says the Tribunal’s decision is legally unreasonable because it ‘lacks an evident and intelligible justification’.[23]
[23] Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, [76].
OHP further says that in assessing consistency of the proposed use with the overall strategic vision without considering amenity the Tribunal did not engage in an integrated assessment of the benefits and negative outcomes of the proposed use but rather approached the matter in a siloed way.
Both arguments fail.
It is important not to overread the reference in paragraph 10 to ‘first’ assessing consistency with planning policy and strategic vision before considering amenity. In the structure of its reasons the Tribunal does consider the consistency of the proposed service station with what I have described as the increased density objective before it deals in detail with amenity issues. However, it is plain that the Tribunal considers the increased density objective together with the other objectives of clause 32.07 (including the objective in relation to non-residential use) and its other findings (including its findings in relation to amenity impacts) – there is in fact no logical incoherence or failure to integrate the various considerations.
In its reasons under the heading ‘What is the policy context?’ the Tribunal, at paragraph 17, accurately sets out all of the purposes of the RGZ and refers to a number of relevant clauses and policies within the planning policy. The Tribunal then notes that a service station is a section 2 use. Under the same heading at paragraph 24, the Tribunal notes that clause 22.05 (Non-Residential Uses in Residential Areas) is applicable and has objectives to make provision for services and facilities demanded by local communities in a way that does not detract from the amenity of the area. The Tribunal notes in particular that non-residential uses are encouraged in locations where there is demonstrable need.
That discussion does not indicate any lack of recognition of the fact that non-residential uses fall within the overall policy context of a RGZ. Nor does it indicate a decision that fails to undertake an integrated assessment.
Further, under the heading ‘Does the proposal respond to its zoning and policy context?’, the Tribunal:
(a) specifically notes OHP’s arguments that the planning scheme recognises the legitimate need for non-residential uses in residential areas to serve the needs of the community;[24]
[24]Tribunal’s reasons [27].
(b) summarises various propositions from witnesses called by OHP in support of its application;[25]
[25]Ibid [28]–[30].
(c) acknowledges the purposes of the RGZ include allowance of non-residential uses serving the community in appropriate locations and notes that these issues are dealt with later in the decision;[26]
(d) finds that the proposal satisfies many of the criteria in clause 22.05;[27] and
(e) balances these matters against the increased density objective.[28]
[26]Ibid [36].
[27]Ibid [39].
[28]Ibid [37]–[40].
Later in the decision, from paragraph 62 to 73, the Tribunal considers the question of amenity impacts and finds in favour of OHP that any amenity impacts adverse to the community can be dealt with by the imposition of permit conditions.
The Tribunal has:
(a) expressly recognised that non-residential uses were permitted in a RGZ and that they are referred to in the objectives of clause 32.07 of the planning scheme;
(b) expressly referred to amenity impacts in paragraph 24; and
(c) referred to its later consideration of issues in paragraph 36, which inferentially must include its consideration of amenity impacts.
In the circumstances, I do not regard the Tribunal’s approach on this issue as having the logical incoherence or unreasonableness for which OHP contends, nor when the reasons are read as a whole can it be said that the assessment is not one which integrates the various factors to which regard was had.
Did the Tribunal assess the proposed use by reference to an ideal?
OHP’s primary ground of appeal is that in its decision the Tribunal implicitly assessed the proposed use of the land as a service station against an ideal or optimal use, being use of the land for higher density residential use. This, it was said, meant that the Tribunal had directed itself to the wrong question because it:
(a) had not assessed the application for use and determined whether the proposed use produced an acceptable outcome;
(b) had instead compared the proposal with a hypothetical proposal for use and development of the land for higher density housing which did not form part of the subject matter of the application for review; and
(c) did not consider the net community benefit of the proposal but rather whether the net community benefit of the proposal was outweighed by the net community benefit of the ideal or optimal scenario.
The proposition that the Tribunal is entitled to grant a permit where there is an acceptable outcome flows expressly from the provisions of clauses 65 and 71.03-2 of the planning scheme. The corollary of that proposition is that a proposed use does not have to be ideal.
In Rozen v Macedon Ranges Shire Council & Anor[29] Osborn J set out the relevant principles:
[29][2010] VSC 583.
The test of acceptable outcomes stated in the clause is informed by the notions of net community benefit and sustainable development. An outcome may be acceptable despite some negative characteristics. An outcome may be acceptable because on balance it results in net community benefit despite achieving some only of potentially relevant planning objectives and impeding or running contrary to the achievement of others.
The weight to be given to the various considerations which may be relevant on the one hand, and to particular facts bearing on those considerations on the other hand, is not fixed by the planning scheme but is essentially a matter for the decision maker.
Furthermore, the potential complexity of issues raised by a particular application renders the question of what would be the optimal form of development for use in a particular case fundamentally difficult of resolution and one on which different minds might reasonably differ.
In Knox City Council v Tulcany Pty Ltd, I observed:
The planning scheme does not require an ideal outcome as a prerequisite to a permit. If it did, very few, if any, permits for development would ever be granted and there would be difficult differences of opinion as to whether the outcomes were in fact ideal. The Tribunal is entitled to grant a permit where it is satisfied that the permit will result in a reasonably acceptable outcome having regard to the matters relevant to its decision under the planning controls.
For these reasons I accept the appellants’ submission that the test which the Planning
Scheme requires to be applied is one of acceptable and not ideal outcomes.[30]
[30]Ibid [171]–[175].
At the outset it should be noted that there is an underlying tension between:
(a) on the one hand, OHP’s acceptance that the Tribunal was permitted to take into account the increased density objective notwithstanding that the proposed use was for a non-residential use; and
(b) on the other hand, its insistence that by considering the increased density objective the Tribunal was:
(i) not assessing the proposal which was for non-residential use; and
(ii) impermissibly requiring an ideal use.
In argument OHP sought to resolve this tension by saying that a policy preference for higher density residential use could not be the only reason a proposed non-residential use did not receive a permit. OHP argued that if a proposed non-residential use was otherwise acceptable (by reference to amenity, need, built form, etc) it could not be denied a permit because of the policy preference for increasing residential density. That proposition cannot be accepted for much the same reasons as the first ground of appeal fails:
(a) contrary to clause 65, it says in effect, that because a permit can be granted it should or will be granted; and
(b) it says that one particular relevant consideration can never be taken into account in a way that might be decisive in the balance of the various factors, in other words in balancing the various factors that particular factor can never tip the balance.
OHP further says that the Tribunal’s decision would mean in effect that any non-residential use must be rejected in a RGZ or substantial change area because no non-residential use will ever promote the policy goal of increased residential density. I do not accept that this is an appropriate characterisation of the effect of the Tribunal’s decision. The Tribunal expressly recognised that non-residential uses of the land were permitted under the planning scheme but in balancing the various factors, it determined that the particular non-residential use in the particular location should not be permitted. It did so, at least in part, because it did not accept there was a particularly strong case of need for the service station use in circumstances where there was an existing service station and convenience store 300 metres from the land and others nearby.
Counsel for OHP accepted that the Tribunal had not expressly analysed the application for use of the land as a service station by reference to a hypothetical ideal or optimal use, but said that this was implicit from a reading of particular paragraphs in the context of the decision as a whole. The specific paragraphs of the Tribunal’s decision on which OHP relied in this regard are 10, 37, 39, 40 and 50.
Paragraphs 9 and 10 are plainly a summary of the Tribunal’s reasons. They do not purport to be comprehensive and there is no reference to the Tribunal’s assessment of issues other than the reference in paragraph 9 to amenity and the reference in paragraph 10 to the proposal’s consistency with the increased density objective. As noted above, OHP accepts that the Tribunal was required to take into account the increased density objective (amongst other things) – paragraph 10 records that this is in fact what the Tribunal has done.
Paragraphs 40 and 50 of the reasons are set out below:
40.I am persuaded by Council’s arguments that this is a lost opportunity to provide additional housing in an area that Council has earmarked for higher density residential development. I disagree with Mr Lee that the possible development of approximately 60 dwellings, or 0.5% of the expected delivery of new dwellings, is insignificant, particularly given there are limited areas within in the municipality zoned RGZ. Whilst substantial apartment buildings have been built in the Box Hill MAC, the Planning Scheme also identifies RGZ as areas where increased densities are encouraged.
…
50.I disagree with Mr Lee that I should take into consideration that there are very few, if any alternative sites that could accommodate a service station nearby. Whilst there are currently limited or no vacant commercial and industrial sites of this size nearby, this may change in the future. I agree with Council that land within the RGZ is a finite resource that has been identified as an area for substantial change, with the express intention of encouraging apartment buildings.
The opening sentence of paragraph 40 and the concluding sentence of paragraph 50 both make clear that the Tribunal considered the proposal had a negative consequence – being that the land would not be available for development as a residential use. That negative consequence had to be balanced against considerations of need and amenity which the Tribunal considered elsewhere. In other words, those sentences do not indicate that the Tribunal was considering an ideal but rather was considering what it regarded as a negative outcome of the proposal.
Nor is the balance of paragraph 40 of the decision (after the first sentence) indicative of the Tribunal’s consideration of an ideal proposal. OHP specifically called evidence from Mr Lee to the effect that the subject site could accommodate approximately 60 apartments and that this was ‘insignificant’ as it was only 0.5% of the housing targeted in the planning scheme, or 0.4% of the projected increase in dwellings in the municipality by 2036.[31] Having put the matter squarely in issue in its evidence, OHP can hardly complain that the Tribunal made a specific finding in relation to that evidence and in particular a finding as to whether the approximate number of dwellings which Mr Lee said were possible would or would not contribute to achieving the Council’s policy objectives.
[31]See paragraph 30 of Tribunal’s reasons.
I accept that the language of paragraphs 37 and 39 (quoted above) does compare the benefits of the proposed non-residential use with the benefits of increased housing.
However, I do not accept that it is an appropriate characterisation of what the Tribunal is doing in those paragraphs to describe it as assessing the proposal against a hypothetical ideal. Rather, properly understood those paragraphs do no more than:
(a) take into account the increased density objective; and
(b) weigh the benefits of the proposal against a negative consequence of its acceptance which is that the land will not be available to satisfy that increased density objective (albeit this is expressed as a comparison with the benefits of increased housing).
In the context of the Tribunal’s reasons as a whole I consider that what paragraphs 37, 39, 40 and 50 demonstrate is that the Tribunal:
(a) regarded the evidence of need for a service station as somewhat limited but accepted there would be some benefit to the community from the proposed use;
(b) took into account the increased density objective, that the land was in an area where the Council’s policy was to increase residential density; and
(c) balanced the benefit in (a) against what it regarded as a negative consequence of the proposed use which was that the land would not be available for increased density residential development.
Those paragraphs on which OHP relies do not establish that the Tribunal has impermissibly assessed something other than the proposal before it or assessed the proposal against a hypothetical ideal. Rather, as it was required to, the Tribunal has assessed what it saw as the benefits and negative consequences of the proposal in light of the objectives and policy of the planning scheme for land in a RGZ or substantial change area. That is, in forming a ‘wholistic’[32] assessment, the Tribunal balanced a range of considerations regarding the proposal and took into account, as OHP acknowledged it was permitted to do, the policy of the Council to increase residential density in a RGZ and substantial change area.
[32]Tribunal’s reasons [39].
Conclusion
In all of the circumstances, OHP has not demonstrated the errors of law for which it contends in the Tribunal’s decision and the appeal should be dismissed.
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