It is clear from clause 57 of the State Planning Provisions that brothels are a prohibited use in the Green Wedges. No argument is possible. Residential hotels are also a prohibited use, but that’s a maybe – argument is possible. A permit may be granted if the application satisfies the ‘in conjunction with’ condition of clause 57. Manningham Council and others thought they knew what this clause meant when they objected to an application to build a 49-room hotel in Brumbys Road, South Warrandyte – along with a function room, a winery and a vineyard.

The applicant took his proposal to VCAT and the hearing took place in January 2018 before Senior Member Geoffrey Code and Member Joel Templar. Their decision to reject the application was published in March – but their decision was not based on a failure to meet the ‘in conjunction with’ condition.

As noted in the Decision, the Council and others contended that the hotel did not meet the condition, which is that on green wedge land a residential hotel is a prohibited use unless the hotel is to “be used in conjunction with Agriculture, Natural systems, Outdoor recreation facility, Rural industry or Winery”.

The Members took the view that due to its proposed small size and design the vineyard did not qualify as agriculture, but rather was a landscaped setting for the residential hotel. So the hotel could not be ‘in conjunction with’ the vineyard. But what about the winery?

Clause 74 of the Planning Provisions defines a winery as follows:
Land used to display, and sell by retail, vineyard products, in association with the growing of grape vines and the manufacture of the vineyard products. It may include the preparation and sale of food and drink for consumption on the premises.

The Members determined that a winery was not required to source grapes or fruit mainly from its own vineyard, or at all. Interestingly, it also found that there was no firm requirement for a winery to even make the wine, that it was sufficient for a ‘small winery’ to just mature and bottle wine.

They also determined that the proposed winery was of a scale sufficient to make it more than mere ‘window dressing’ to justify the hotel, based on their judgement of its physical size. So they concluded that the winery was a valid ‘primary use’, if the hotel was to be the ‘secondary use’.

So then the issue was the ‘in conjunction with’ question: was the hotel to operate ‘in conjunction with’ the winery? Clause 64.02 of the Planning Provisions says that for the condition to be satisfied

  • there must be an essential association between the two uses; and
    the use must have a genuine, close and continuing functional relationship in its operation with the other use.

The Members found that the first condition was satisfied because

  • the hotel would benefit from the aesthetic vineyard setting,
    that the winery would benefit from the cellar door traffic generated by the hotel, and that
    both would benefit from staff sharing.

Note that having characterized the vineyard as not agriculture but as a landscaped setting for the hotel, they were nevertheless able to use the vineyard setting to, in part, justify the hotel, even though it was the winery that was the primary use.

They also found that the second condition was satisfied because the winery was a bona fide ‘separate use’. The Council had submitted that the winery was dwarfed by the hotel, but the Members rejected this on the grounds that the winery was substantial and that clause 64.02 did not recognize ‘the concept of relative economic return’. This was a surprise to some, who apparently wrongly assumed that some sort of size relationship was implicit.

The Members said that had they approved the application they would have considered including as a condition that the continued operation of the hotel would be contingent on the continuing operation of the winery and vineyard.

Thus the application was determined to have satisfied the ‘in conjunction with’ test – but it failed on other grounds. The building was considered too large and high and close to the road. Its impact was considered in some depth, resulting in comments such as ‘it has not been designed in a site responsive manner to respond to the constraints of the site and the site’s context’. There was also an issue with a habitat corridor, and the impact of traffic was a significant factor.

It has been said that VCAT decisions are unpredictable. What is certainly the case is that the Planning Provisions are complex and can appear vague and open to interpretation. Particular points to note from this decision:

A winery needs only to mature and bottle wine. There is no requirement that the wine be made on the premises, or that there be a vineyard adjoining. To be a valid ‘primary use’ it needs only to be ‘of a material size and scale’.
It is not necessary to relate the scale of the hotel, as the secondary use, to the scale of the winery, the primary use.
If there is a vineyard, even if it is essentially a garden and not bona fide ‘agriculture’, its aesthetic qualities can help satisfy the in conjunction test between a winery and a hotel.

Given the current focus in some quarters on the encouragement of tourist-related businesses in the Green Wedges this case could be seen as potentially concerning. It would seem that a developer can build a residential hotel in the green wedge if the proposal includes a small winery – providing of course that the proposal is for a design which is ‘site responsive’ and satisfies the permit conditions, associated with traffic, fire safety and so on.

Most people would accept the need to promote tourism in the green wedges – after all, they’re an asset of Melbourne and meant to be enjoyed by visitors. But how is tourist development to be controlled so that it does not degrade the green wedge? It is difficult to see how including a small winery in a proposal to build a residential hotel necessarily makes it compatible with a Green Wedge.

Currently there are pressures to relax the restrictions on commercial tourism. We must ensure that any changes are clear and rule out inappropriate developments. The place for residential hotels is in the townships.

You can read the VCAT Decision here.