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«December 2011 Victorian Planning System Ministerial Advisory Committee Initial Report. Geoff Underwood, Chair. Catherine Heggen, Member. David ...»

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Initial Report - December 2011 96 Victorian Planning System Ministerial Advisory Committee In 2004, an expert group was appointed to identify options for improving the operation of section 173 agreements, including possible changes to the Act. It recommended legislation to streamline the process and structure of agreements and resolve underlying issues in the planning system that may be causing a greater use of agreements (see Review of section 173 Agreements, Discussion Paper (Mark Dwyer, 2004)).

The options include:

amending the Act to ensure that an ongoing requirement to comply with conditions on development permits can be enforced;

this could save time and cost amending the Act to ensure the power to impose conditions on a permit clearly includes the ability for permit conditions to require deposit of guarantees or bonds, to avoid the use for agreements solely for this purpose reducing or eliminating the involvement of the Minister in the agreements process except where necessary (for example, when the Minister is specifically involved in a particular agreement either as the responsible authority or as a party to the agreement) improving the availability of agreements for public inspection removing the requirement for agreements to be lodged with the Minister clarifying the requirements about when an agreement ends clarifying who are parties to an agreement where ownership of land has been separated, whether by subdivision or by sale of existing lots broadening the jurisdiction of VCAT to settle disputes relating to section 173 agreements.”

An article by Mr Mark Dwyer9 noted the following:

“Although the use of section 173 agreements has been included within Better Decisions Faster for review, there is no suggestion that the system is fundamentally flawed. When used properly, section 173 agreements are a very useful planning tool, particularly where there are complex on going obligations. The primary benefit of a section 173 agreement lies in the ability to bind an owner of land to covenants specified in the agreement (s.174) so that, when registered, the burden of those covenants runs with the land and binds future owners (s.182) and can be enforced by any person rather than just the contracting parties (s.114).

9 Review of Section 173 Agreements Discussion Paper (Mark Dwyer, Freehills, May 2004)

–  –  –

Agreements can also impose positive obligations as well as restrictions.

However, section 173 agreements can be complex and costly, and there is an increasing perception that section 173 agreements are being over used as a planning device. The term ‘agreement’ is often a misnomer, as the requirement for many agreements is mandated by permit condition. When executed, agreements can be difficult to amend, particularly once the affected land has been subdivided. When registered on an owner’s title, agreements can cause difficulties for developers in financing or obtaining mortgagee consent, or in the sale of the land where it is unclear to the future owner as to how or why they are bound by the agreement. The registration and administration of agreements also imposes resource constraints on the Land Registry.” The Planning and Environment Amendment (General) Bill – Exposure Draft 2009 (‘Draft Exposure Bill’) included a set of provisions (from Section 178A onwards) which would have enabled applications to amend agreements to be made to a responsible authority, much like a planning permit. Decisions in relation to such applications could then be reviewed by the VCAT.

The question for the Committee is whether this would have achieved any efficiency in the planning system. While it would have made agreements easier to remove, does that help the planning system?

The ability for any person to seek the removal or variation of an agreement already exists. However, the parameters of this are limited. Section 184 of the Act enables an application to be made to the Tribunal in certain circumstances.

This provision was most recently considered by the VCAT in Sheradar Pty Ltd v

Casey CC (includes Summary) (Red Dot) ( 2011 ) VCAT 1414 (18 July 2011):

“As Deputy President Dwyer said in New Dimension Homes Vic Pty Ltd

v Frankston CC(30):

(19) As I indicated in John Pernal Pty Ltd v Mornington Peninsula Shire Council (4), the test for the removal of a section 173 agreement (and the jurisdiction of this Tribunal under s 184 of the Planning and Environment Act 1987) is more limited than a simple planning ‘merits’ review. The very character of a section 173 agreement is its ability to be registered on the title to land over an extended period as an effective covenant to bind future successors in title to its obligations, and to achieve more broadly based planning objectives. In order to remove land from the operation of a section 173 agreement, in the absence of the consent of all parties to the agreement, an applicant must demonstrate more than a change of planning circumstances as might justify an amendment to a planning permit or a case for rezoning of land.

Initial Report - December 2011 98 Victorian Planning System Ministerial Advisory Committee There is no definitive test to determine when it will be inappropriate that an agreement should continue to apply to land. Clearly though, from the words of section 184(4)(b), the Tribunal must have regard to any relevant permit. In this context, I consider it will also be relevant to

have regard to the following factors:

When the permit was granted.

What consideration the responsible authority (under section 60(1A)(i)) and the Tribunal (under section 84B(2)(h)) gave to the agreement when deciding to grant the permit.

How does the permit affect obligations under the agreement or vice versa?

Looking beyond any relevant permit, it is relevant to consider:

The age of the agreement and the context and circumstances surrounding the entry of the agreement.

What were the original intent and obligations of the agreement?

Whether circumstances have changed since the agreement was entered.

Has the land and the owner had benefit from the agreement or do they continue to enjoy benefit from the agreement?

What is the relationship between the benefits to the land and the owner of the agreement and any ongoing responsibilities or obligations under the agreement?

What benefit would there be in maintaining the agreement?

Should the land and/or the owner continue to accept the obligations under the agreement?” The Committee is also aware that many agreements are entered into as part of a negotiated outcome. It would be a concern if these negotiated outcomes were subject to the uncertainty of the prospect of parties applying to undo these negotiated outcomes.

In his very detailed submission to the Committee, Brian Johnson suggested a number of changes to the provisions of the Act dealing with agreements. The Committee considers that there are a number of suggestions made in his submission that are meritorious and would improve the section 173 agreement

process. These include:

Amending provisions regarding the ending of an agreement to remove the need for the Minister’s consent unless the Minister is a party to the agreement; and Amending the requirements for creating an agreement to remove the need to lodge a copy of the agreement with the Minister for Planning.

–  –  –

The Committee will give more detailed consideration to further suggested changes in its report outlining final recommendations.

KEY FINDINGS Section 173 Agreements The Committee considers the role and processes associated with section 173

agreements require further analysis, with the objective being to:

Explain where agreements should and should not be used; and Streamline the processes associated with creating, amending and removing agreements.

9.5 The Victoria Planning Provisions 9.5.1 Structure of Zones

There are 32 state standard zones in the VPP. This is an increase from the original number of zones introduced when the VPP first commenced. The creation of new zones such as the Activity Centre Zone, Green Wedge Zone, Urban Growth Zone, Priority Development Zone and the Rural Activity Zone reflect a perceived need for purpose built zones to be used in the place of the normal suite of zones and overlays.

Zones generally comprise:


A table of uses;

Specific provisions regarding use, development, subdivision and advertising;

Decision guidelines; and Schedules.

While some zones allow and make provision for limited tailoring to particular circumstances mostly regarding floor space or lot size, generally zones cannot be altered from the standard format.

While this is a desirable aspect of the zones, because it maintains state wide consistency, it has created some issues (raised in submissions), especially in relation to the following:

Rural areas where large areas are zoned Farming Zone, capturing a large number of uses which might demand a different approach in different rural areas; and The inability to schedule out land uses that a council thinks should not require a permit or should not be prohibited.

A number of submittors comment that while the standardisation of zones was a good thing, the lack of flexibility in the zones was a disadvantage. A

–  –  –

submittor with experience of the planning system in New Zealand notes that in that jurisdiction, the range of controls in a zone included a non complying column which stopped short of prohibiting a land use. The rational was that, although the land use was not what the scheme envisaged, it could be considered subject to strict analysis as to compatibility. The South Australian system provides the same opportunity, subject to an exhaustive assessment process.

The Committee was often faced with submissions in relation to the Farming Zone and how it prohibited many forms of land use that ought to be considered as appropriate in some rural areas.

On a more general level, it was put to the Committee that in some areas of Victoria it might be appropriate to have certain activities prohibited, but in other areas within the same zone it was desirable that they at least be able to be considered. This issue was raised by rural municipalities in particular.

This could be achieved through either the introduction of further new zones

and/or local variations to existing zones. This approach could allow:

discretionary uses (Section 2) to be exempt from a permit requirement (Section 1); or prohibited uses (Section 3) to be discretionary (Section 2), subject to close scrutiny in the planning scheme amendment process.

An example raised by private submittors related to the prohibition on recreational motor sports in the Farming Zone. Steven Tjepkema (Submission No. 208) outlines how the change from the Rural Zone has impacted on the recreational vehicle oriented events.

“Motorsport activity has been disallowed as a result of the change in the zoning from Rural to Farm Zone, as a result of a lack of events this year I have had to travel interstate... Virtually overnight, motorsport was essentially made a prohibited use.” The Committee makes the observation that not all land zoned Farming Zone is suitable for farming. But large areas of Victoria are zoned Farming Zone and predicated on the basis that the primary purpose of the land is for agricultural production. This includes bushland where the majority of recreational vehicle events take place.

Originally under the VPP schemes, large parts of rural Victoria were zoned Rural Zone. Following Amendment VC24 to the VPP in June 2004, which introduced a new suite of zones for rural Victoria, local planning schemes were amended by replacing the Rural Zone with the Farming Zone. Land was rezoned under section 20(4) of the Act, essentially with no opportunity for public comment. The rezoning was not a neutral rezoning. In fact, the change

–  –  –

to the zoning had significant implications for many in rural areas of Victoria, with many issues being raised. It is somewhat disappointing that the issues have not been rectified.

This is borne out in many submissions of numerous councils, organisations, and individuals which raise concerns in relation to the restrictive nature of the Farming Zone compared to the previous Rural Zone.

The Pyrenees Shire Council (Submission No.483) suggest a loosening of the Farming Zone provisions to make a number of uses including industrial use more accessible in this zone. It acknowledges the need to make a change in a way that does not open up the full panoply of uses and abuse the zone.

The Pyrenees Shire Council states:

“Uses such as ‘Industry’ are currently prohibited under the Farming zone provisions, which were previously a discretionary use under the former Rural Zone that it replaced. In particular, the Council requests that an amendment be made to the current Farming Zone provisions to provide discretionary power for consideration of a limited range of Industrial uses. Such a change would provide farmers with the ability to undertake supplementary ‘light’ industrial enterprises that could generate local employment opportunities and income within regional areas, without impacting on the ability for their land to be effectively used for a bone fide agricultural purpose. Limitations could be provided on the size and types of industrial uses that could be undertaken, so as to minimise amenity impacts and to ensure that the industry can be effectively serviced.” If one were to go down this path, there would be a need to introduce provisions that ensured that the use did not become anything more than a small scale exception to an industrial use establishing in an industrially zoned area. Criteria could include land area, number of employees, and the imposition of the ‘in conjunction with’ test.

Another submission by Pyrenees Shire Council suggests using the home occupation provisions to enable other things to be done in the zone. For


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