Allens

• Introduction
• All recent publications
• Environment & Planning publications
• Environment & Planning services

Focus: Planning for vulnerable Victorian coastal communities

7 September 2010

In brief: Recent decisions by the Victorian Civil and Administrative Tribunal have grappled with the difficult scenario of whether to permit intensified development in coastal areas known to be at risk of future flooding from climate change. The results appear dependent upon the status of broader infrastructure adaptation and mitigation actions by councils. The role of water authorities has also come under scrutiny. Partner Chris Schulz (view CV) and Senior Associate Meg Lee report.

• Background
• Retreating in Lakes Entrance?
• Criticism of the Council and the water authority
• VCAT's approach
• Lessons learned

Background

In March this year, we reported on the Coastal Climate Change Advisory Committee (the CCAC) issues paper. That paper identified some of the key problems facing decision-makers regarding developments in coastal areas vulnerable to climate change-related flooding.  Some of the key problems identified included:

• how to handle current or foreshadowed proposals for the intensification of development in vulnerable areas; and
• the inequity and inefficiency of site-specific coastal hazard vulnerability assessments for very small or single-lot developments, and the need for a more strategic and regional approach to these.

The CCAC held public hearings in July and is intending to draft its final recommendations to the Minister for Planning by late this year¹.

In the absence of a final report or any change to the planning schemes, VCAT has been grappling with how to apply the state policy to applications for development in vulnerable areas.  While the State Planning Policy Framework (clause 15.08) contains some general guidance on managing coastal hazards and a specific direction to decision-makers to 'plan for a sea level rise of not less than 0.8 metres by 2100', the application of this direction² has troubled decision-makers.

The cases that have come before VCAT in the past year have generally applied the policy to refuse development approval due to the risk of future flooding from sea-level rise, both for small two-dwelling developments in existing settlements³ and for larger subdivisions in greenfields areas⁴. In other cases, VCAT has deferred a decision on development until a coastal hazard vulnerability assessment has been prepared⁵ or has directed the relevant water authority to provide advice on flood risks and the appropriate floor levels to respond to sea-level rise flooding⁶. 

In the most recent of these decisions, VCAT has been critical of the role of councils and water authorities in planning for climate change and has refused development approval, partly due to the lack of broader adaptation planning in the relevant local area by the council and other authorities.

Retreating in Lakes Entrance?

The case of Taip v East Gippsland Shire Council⁷ related to an application for an eight-dwelling development in the Business 1 Zone in Lakes Entrance.  The East Gippsland Shire Council (the Council) granted a permit but an objector lodged an appeal with VCAT.  The objector's issues were later resolved; however, the East Gippsland Catchment Management Authority (the EGCMA) was joined as a party to the application, so the application before VCAT continued. The EGCMA initially objected on grounds related to the existing level of flood risk and the potential risk from climate change-related sea level rise. Nonetheless, it later amended its grounds to delete the references to climate change.

VCAT overturned the Council decision finding that the application for intensive development of Lakes Entrance is 'pre-emptive to the development of appropriate strategies to address climate change risks'⁸ and that a decision to grant a permit would 'fail to satisfy the purposes of planning in Victoria for intergenerational equity, sustainable, fair and socially responsible development.'⁹

The Council submission (which the applicant supported) was that there should be no halt to development in the existing urban coastal areas due to climate change-related sea-level rise on the basis that there remains sufficient time before the impacts of climate change are realised to develop policy and planning responses. To decide otherwise, the Council submitted, would be tantamount to a policy of 'retreat'. 

Further, the Council submitted that there is sufficient time for the 'economic life' of this development to be realised before the impacts of climate change are significant and therefore that it should be allowed.

The ECGMA submitted that the current flood controls applicable to the site (namely the Land Subject to Inundation Overlay – LSIO) were out of date and that the site should more correctly be considered to be in a floodway. The EGCMA went on to submit that the design response was insufficient for the current flood hazards, even though it had been designed to raise the dwellings above the 1 per cent flood level. 

Criticism of the Council and the water authority

In reaching its conclusion to refuse the development, VCAT was critical of both the Council and the EGCMA for failing to respond adequately to changes in state coastal planning policy. 

VCAT went so far as to state that the 'position adopted by the Council in this proceeding and in its response to the recommendations of the Panel to Amendment C68 has been to shy away from the hard decision making and planning required to address these future risks. Its preference is to wait for others to lead the way.'¹⁰ 

VCAT also went on to state that the EGCMA's approach to the application 'is not much better, failing to address the Tribunal directly on this issue and indeed amending its grounds of objection in an attempt to take the issue of the agenda.'¹¹

VCAT's approach

In making its decision, VCAT focused on the fact that the development would intensify the land use on the site, and thereby introduce a higher level of risk to future users and emergency personnel in the event of future flooding.  It therefore considered that it was not sufficient to rely simply on raising a building above projected water levels expected under climate change in order to acceptably address the totality of climate change impacts. It stated that this approach is too simplistic and is ultimately a misguided approach as it does not consider the broader risks posed by flooding to the infrastructure required to service such developments. 

While noting that it should not be for individual developers to provide the necessary upgrades to infrastructure, VCAT stated that it was not satisfied that the Council and other authorities were adequately addressing these broader issues.  This aspect of the decision begs the question, if the same type of application were to be made in a council area where greater work had been done on regional adaptation, would the decision have been different?  That is, are developers vulnerable to the preparedness of councils and road, energy and water authorities?

In responding to the 'economic life' argument put forward by the Council, VCAT was again critical, stating that the proposition was spurious and an attempt to defer proper and balanced decision-making.  VCAT found that this approach focused only on the short-term economic benefits and was not a sustainable approach to planning.  Taking the argument to its logical conclusion would suggest that all buildings would be removed at the end of the so-called 'economic life', which is not something that occurs in practice.  Instead, VCAT noted, citing heritage buildings as an example, buildings are redeveloped and maintained so as to last beyond their theoretical economic life.

An important legal aspect of the decision is that VCAT stated its view that, while the LSIO does not directly control use, as does a zone, it does control how development may occur and therefore can control the intensity of the use.  On this basis, VCAT confirmed that it is lawful to effectively refuse permission for a section 1 use based on the constraints imposed by the LSIO where the intensity of the development is considered inappropriate.

Also important is the fact that the Tribunal relied upon a directive issued by the Victorian Minister for Water to the various water authorities in December 2009, in which the Minister stated that he expected the authorities to adopt a position for the long-term protection of coastal communities.  VCAT considered that the 'guidelines' were a relevant matter to be considered under s84B of the Planning and Environment Act 1987 (Vic).  In particular, one of the guidelines emphasised by VCAT was as follows:

Development proposals that significantly increase the density of residential or commercial occupation, or the footprint of long-lived assets, will require careful consideration, having regard for the existing and future flood risk.

VCAT was critical of the EGCMA for not addressing the Water Minister's guidelines in its response to the application. 

The Water Minister's guidance is an important piece of the puzzle missing from previous VCAT decisions where the role of the water authorities has been unclear, as they are not expressly referral authorities for 'climate change' flooding under the existing flood overlays.  This is also something that the various authorities have addressed in their submissions to the CCAC¹².

Lessons learned

The specific criticisms of the Council and the EGCMA in the Taip decision has put the acid on all coastal councils and water authorities to take climate change flood risks seriously and to pro-actively consider the risks in their decisions, despite the uncertainty of State policy and in the absence of any tailored climate change zones or overlays.

Further, it puts a significant onus on councils and other relevant authorities (road, water, energy) to commence broader planning to upgrade local infrastructure so that it is able to continue to service developments in a future climate change flooding scenario.  Failure to do so may mean that development in vulnerable areas is stymied and that a de facto policy of retreat will be applied by VCAT.

The Council immediately expressed criticism of the VCAT decision¹³, stating that it should not be up to individual councils to determine a planning response to such a complex issue and that it would be better to await the outcome of the CCAC process before making changes to the scheme. Council further stated that the decision puts in doubt whether any development should be allowed in the town centre until the state-wide strategic work is completed.

Subsequent to this decision, and most likely in response to a Council request for assistance, the Minister for Planning announced funding of $550,000 to bring forward long-term planning controls for Lakes Entrance to address the impacts of climate change on the area, including funding for local level coastal flood mapping, updating emergency management response plans, preparation of an adaptation strategy to explore options to guide future development and to support long term planning controls¹⁴. The Minister also announced that he was preparing interim planning controls for the commercial centre of Lakes Entrance to provide certainty for developers in this area.

The importance of the CCAC's final report and an urgent response to it by the Minister to clarify the approach decision-makers and authorities should be taking cannot be underestimated.

Footnotes

1. Detail are available at the CCAC website.
2. Including the Ministerial Direction (No.13) and Practice Note that supports the policy provision.
3. See Ronchi v Wellington Shire Council [2009] VCAT 1206.
4. Gippsland Coastal Board v South Gippsland SC & Ors (No 2) (Red Dot) [2008] VCAT 1545 (29 July 2008) and W & B Cabinets v Casey CC [2009] VCAT 2072 (7 October 2009).
5. Owen v Casey CC [2009] VCAT 1946 and Myers v South Gippsland Shire Council [2009] VCAT 1022.
6. Cadzow Enterprises Pty Ltd & A Rosshandler v Port Phillip City Council [2010] VCAT Ref P2010/2009 (unreported); and Tauschke v East Gippsland SC [2009] VCAT 2231.
7. (Red Dot) [2010] VCAT 1222.
8. See paragraph 13 of the Taip decision.
9. Id.
10. Paragraph 70 in the Taip decision.
11. Paragraph 71 in the Taip decision.
12. Submissions to the CCAC.
13. See the Council's media release 5 August 2010.
14. See the Minister's media release dated 12 August 2010.

For further information, please contact:

• Chris SchulzPartner, Melbourne
  Ph: +61 3 9613 8772
  Chris.Schulz@allens.com.au
• Meg LeeSpecial Counsel, Melbourne
  Ph: +61 3 9613 8154
  Meg.Lee@allens.com.au