VCAT makes important decision on balance between urban development and resource extraction in growth areas

Gadens recently acted for Austral Bricks in its successful application at the Victorian Civil and Administrative Tribunal (the Tribunal) for review of a refusal by the Mitchell Shire Council of its planning permit application for approval to extract red plastic clay from a 160 hectare property in Wallan East (the Wallan Quarry). On 2 October 2018, the Tribunal approved the permit in the decision Austral Bricks (Vic) Pty Ltd v Mitchell SC [2018] VCAT 1115, providing the green light for the quarry with the potential to produce approximately 4.13 million tonnes of red plastic clay between 2023 and 2065[1], providing important security of supply of bricks for future homes for Victorians.  Planning & Environment Partner Meg Lee, Senior Associate Kate Kirby and Lawyer Zina Teoh report on the Tribunal’s decision.

Background

Austral Bricks is the largest brick producer in Australia and currently operates a quarry facility in Wollert, located adjacent to its manufacturing facility, which supplies approximately 60% of the Victorian market. The red plastic clay extracted from the Wollert Quarry is expected to run out within the next 5 to 7 years, and the Wallan Quarry is intended to be a replacement source to ensure ongoing supply of bricks to the housing market.

In a time where the need to supply houses for Melbourne’s increasing population remains a key consideration for the development sector, the Wallan Quarry approval secures an important resource required to satisfy the demand for bricks to support this growth.

The Site

The site for the Wallan Quarry, located in Wallan East adjacent to the Melbourne-Sydney railway line, is currently zoned Farming Zone in the Mitchell Planning Scheme and is within the Urban Growth Boundary.

Strategic planning for the area is still in the early stages, with the Wallan East Precinct Structure Plan (WEPSP) which will ultimately apply to the site, yet to be prepared or approved. Additionally, the site has also been identified in Plan Melbourne 2017-2050 and other strategic documents as a possible site for the future development of the Beverage Intermodal Freight Terminal (BIFT) with the land in this area to be used as an intermodal terminal precinct or industrial employment precinct.  Clay mined from the quarry will be delivered to Austral’s existing Wollert manufacturing facility for processing and manufacture into bricks.

The Decision

The Mitchell Shire Council originally refused the permit on the basis that the application for a planning permit was premature in the context of the timing the Wallan East Precinct Structure Plan (WEPSP) and in the context of the future use of the land for the BIFT.

One of the key issues raised by the case was the strategic need for the quarry and the timing for other strategic goals identified for the land.  In considering this, the importance of securing supply to extractive resources in Victoria was highlighted by the Tribunal:

Given the lead times required to identify and plan for the extract of such a valuable clay resource and the limited remaining time for clay extraction at Wollert, we consider there would have to be significant reasons to delay such extraction until further strategic planning is undertaken.[2]

The Council argued that approval of the permit was inconsistent with the long term use of the land as part of the BIFT and would prejudice the future urban development of the area. This view was not shared by the VPA or Department of Economic Development, Jobs Transport and Resources (DEDJTR), who were represented at the hearing and supported the application.

The Tribunal noted Melbourne’s increasing population and the need, as set out in Plan Melbourne 2017-2050, to supply bricks to provide 1.6 million new dwellings over the next 32 years for a population projected to increase from approximately 5 million to 8 million people.[3] It also considered the long term vision for the area to be developed as part of the BIFT and for industrial and employment purposes and whether the approval of the quarry would prevent or prejudice these long term objectives from being achieved.

At the time that the Northern Growth Corridor Plan was released by the VPA in June 2012, the review site was outside of the urban growth boundary and, accordingly did not form part of the plan. However, a draft version of the plan from September 2014 identifies land as an investigation area for the BIFT (including part of the review site), with nearby land identified for industrial proposes. Similarly, Clause 21.08-1 of the Mitchell Planning Scheme includes a specific strategy concerning interim employment uses within the land identified in the Wallan Structure Plan for the BIFT.  Council relied upon and placed emphasis on these documents.

The various freight plans released by the Victorian Government over the past 10 years were also considered by the Tribunal, the most recent of which (Victorian Freight Plan – Delivering the Goods – July 2018) was released following the close of the hearing and parties were given an opportunity to provide further written submissions on the impact of that document and on the impact of Amendment VC148 on their previous submissions.

On the basis of its review of the strategic policy documents, Tribunal agreed that policy supported the strategic importance and significance of the BIFT and that there was a ‘consistent theme’ that the land was to be used for ‘industrial and employment’ purposes. The Tribunal was of the view that:

the potential for a short to medium term extraction of the clay resource prior to the development of the BIFT, complements the need to ensure less sensitive land uses occur on and around this land. It will also not preclude land from being developed for complementary commercial and industrial uses once the land is rehabilitated. [4]

Additionally, the Tribunal sought to balance the importance of the site providing to the future employment needs of the area, and the importance of the clay resource at the site. It considered that a report by PwC from 2016[5] provided important background information in relation to the clay resource including that clay and clay shale demand is expected to grow by 33% to 1.6 million tonnes in 2050 and that strong population growth was the predominant factor in driving the increased demand.[6] In light of the evidence favouring the suitability of the site for clay extraction, the Tribunal held:

Based on the material presented at the hearing, we consider that delaying or even ultimately preventing extraction of the plastic clay resource on the review site would be a poor outcome in terms of satisfying the increasing demand for bricks to provide housing for Melbourne’s burgeoning population.[7]

The Tribunal found that the Wallan Quarry would not prejudice the overall strategic development of the area, rejecting the argument from the council that the quarry application was premature, on the basis that:

the absence of a PSP should not be used to forestall or delay decision on the use and development of land where there has already been a measure of support for that use and development in higher order strategic planning documents.[8]

After considering the strategic planning and freight planning documents presented at the hearing (and in written submissions afterwards), the Tribunal concluded (similar to Gokler v Hume CC [2018] VCAT 336) that ‘the lack of a structure plan is not fatal to a favourable consideration of this application’.[9]

After concluding that the project could be supported from a strategic land use perspective, the Tribunal also had regard to the amenity impacts of the proposal, and found that the potential off-site amenity impacts could be managed to avoid unreasonable or unacceptable impacts to neighbours or the wider community.[10]

Ultimately the Tribunal concluded that:

the net community benefit of approving extraction of the clay resource at this time outweighs any negative impacts which may arise in allowing extraction before finalisation of the longer term strategic planning for the area, including preparation, adoption and implementation of the WEPSP.[11]

Conclusion

At a time when new quarry approvals are at an all-time low and time-frames for approvals are upwards of 8 years, the approval of the Wallan Quarry site represents an important opportunity to secure an extractive resource required to deliver bricks to facilitate development of new houses for Melbourne’s increasing population.

The Tribunal’s approval of the Wallan Quarry permit is a positive planning outcome for the Victorian resources sector which provides for an important extractive resource to be utilised in the immediate future, without prejudicing the important long term development of the area and the potential delivery of state significant strategic infrastructure.  The decision demonstrates that the lack of a structure plan for an area should not prevent appropriate interim uses which are supported through other strategic planning work and policy.

[1] [13]
[2] [16]
[3] [18]
[4] [34]
[5] Demand Analysis of Extractive Resources in Victoria (May 2016), PwC.
[6] [44]
[7] [46]
[8] [48]
[9] [51]
[10] [9]
[11] [9]

Authored by: 
Meg Lee, Partner
Kate Kirby, Senior Associate