Flooding: Key considerations for Victorian Councils

Joseph Monaghan and Charlie Wurm recently presented a seminar on flooding and managing Council’s risks and responsibilities in relation to climate change and the environment. This article identifies statutory considerations and guidelines that Councils must consider, and provides analysis from recent VCAT cases in this space. We conclude by providing ‘our take’ on future trends. 

Background

Victoria has experienced numerous damaging flooding events in recent years, in particular the major flooding events in October 2022 which impacted 81% of local government areas across Victoria, particularly in Northern Victoria and the Maribyrnong Catchment area.^[1]

In response to these flooding events, the Minister for Planning appointed the Flood-Related Amendments Standing Advisory Committee (SAC) in May 2023. The SAC is intended to provide advice to the Minister, Councils and Catchment Management Authorities on matters referred to it regarding flood studies and planning scheme amendments. 

Furthermore, the 2022 ‘Kompas Report’ modelled the physical and economic risks to Victoria from sea level risks and storm surge if no adaptation measures are taken. It determined that the number of properties exposed to damage from coastal inundation will be 174,409 in 2040, 199,331 in 2070 and 333,470 in 2100.^[2] The cumulative cost of damages from sea level rise and storm surge from now until 2100 will reportedly be between $46.05 to $104.92 billion. The top three affected areas for high-risk properties are the inner Melbourne suburbs of Southbank, Docklands and Port Melbourne. 

With this in mind, Councils should understand the risks associated with flooding and their respective obligations. 

Relevant considerations

Zones and overlays

The following zones and overlays are commonly applied to flood-prone areas:

• Urban Floodway Zone (UFZ).
• Floodway Overlay (FO).
• Land Subject to Inundation Overlay (LSIO).
• Special Building Overlay (SBO).

Relevant planning policy includes:

• Clause 01 (Purposes of the Planning Scheme) – which includes the express purpose ‘[t]o support responses to climate change’.
• Clause 02.03-3(Environmental Risks and Amenity) – which often refers to flood risks, flood characteristics and strategic directions relating to flooding.
• Clause 11.01-1S (Settlement): which expressly links the framework to risks created by climate change. The strategy to ‘deliver networks of high-quality integrated settlements that have a strong identity and sense of place, are prosperous and are sustainable’ is to be achieved through, among other things, ‘minimising exposure to natural hazards, including increased risks due to climate change’;
• Clause 13 (Environmental Risks and Amenity):
  • Clause 13.01-1S (Natural Hazards and Climate Change): which includes strategies and policy guidelines to minimise the impacts of natural hazards and adapt to the impacts of climate change through risk-based planning;
  • Clause 13.03-1S (Floodplain Management): which provides for floodplain management to protect matters including ‘life, property and community infrastructure from flood hazards, including coastal inundation, riverine and overland flows’;
  • Clause 13.03-2S (Coastal Inundation and Erosion): which requires planning to account for sea level rise and its combined effects.
• Clause 15 (Built Environment and Heritage) which provides that planning should facilitate development that is adapted and resilient to climate related hazards.
• Clause 15.01-1S (Urban Design) which includes strategies to require development to respond to its context in terms of character, cultural identity, natural features, surrounding landscape and climate.
• Clause 15.01-3S (Subdivision Design) which seeks to ensure the design of subdivisions achieves attractive, safe, accessible, diverse and sustainable neighbourhoods. Strategies to achieve this objective include creating an urban structure that responds to climate related hazards.
• Clause 65.01 (Approval of an application or plan): which requires a responsible authority to consider matters including ‘the degree of flood, erosion or fire hazard associated with the location of the land the use, development or management of the land so as to minimise any such hazard’.

Key guidelines 

Section 60 of the Planning and Environment Act 1987 (Vic) outlines the matters a responsible authority must consider when deciding on a planning permit application. Section 60(1A)(g) specifies ‘any other strategic plan, policy statement, code or guideline which has been adopted by a Minister, government department, public authority or municipal council’. 

Relevant guidelines, arguably captured as adopted guidelines for these purposes, include:

1. Australian Rainfall and Runoff Guidelines (ARR 2019): which guides the hydrology analysis and modelling methodology to estimate flows.
2. Melbourne Water’s Waterway Corridors – Guidelines for Greenfield development within the Port Phillip and Westernport Region (October, 2013): which guide corridor width for constructed and natural waterways.
3. Constructed Wetlands Design Manual (December 2020): which provides conceptual and functional design criteria to be met in the engineering design of constructed wetlands.
4. Melbourne Water MUSIC Modelling Guidelines (Melbourne Water, August 2024): which provide modelling guidance for treatment assets. Modelling Tool used to determine if ‘Best Practice’ targets are achieved.
5. Best Practice Environmental Management Guidelines for Urban Stormwater: which establishes principles, objectives and planning controls to achieve best practice.
6. Constructed Waterway Design Manual (2019): which provides conceptual and functional design criteria to be met in the engineering design of constructed waterways.
7. Guidelines for Development in Flood Affected Areas (DELWP, February 2019): which provide an assessment framework and method to assist decisions on development in flood affected areas.

Recent decisions 

There are a number of recent Victorian Civil and Administrative Tribunal (Tribunal) decisions which consider flood risk, hazard and impacts, including (but not limited to):

1. Kiyagan v Baw Baw SC [2025] VCAT 206: which confirmed that, in the absence of a relevant planning scheme trigger (including under a FO, LSIO or the like), flood risk and impacts will not be a relevant planning consideration. The Tribunal emphasised that local policies cannot operate as controls and that planning decisions must be grounded in operative provisions under a planning scheme. The case highlights the possible legal risks for Councils which may be aware of inherent flood risks which are not reflected in the corresponding planning controls.
2. AVC Operations v Maribyrnong CC (Red Dot) [2023] VCAT 925: which involved a proposal to expand a beer garden on flood-prone land. The Tribunal found that the increased patronage which the proposed development would facilitate posed an unacceptable flood risk, particularly given reliance on evacuation measures. The decision reinforces the importance of assessing flood depth, duration, and emergency logistics in high-risk areas.
3. Raz v Frankston CC [2024] VCAT 892: in which the Tribunal refused a proposal for eight dwellings across two sites due to unacceptable flood risk. Flash flooding, isolation duration, and the absence of a submitted flood risk plan were key factors. The Tribunal gave weight to the Australian Rainfall and Runoff Guidelines, which discourage shelter-in-place strategies as justification for intensifying development. In addition, the Tribunal acknowledged that while coastal inundation was not expected to significantly affect the site, climate change impacts on rainfall intensity was a relevant matter. As such, the Tribunal reiterated that flood risk must be assessed on a site-specific basis, considering both current and future conditions.
4. Doyle v Bass Coast SC [2024] VCAT 895: in which the Tribunal acknowledged that the length of expected isolation during severe flood events and the duration and depth of flooding of not only the site but also the proposed access were relevant in assessing the flood risk associated with a proposal. In addition, the Tribunal held that reliance on a Flood Risk Management Plan (or the like) was not enough to overcome the unacceptable risk associated with the proposed development of the flood-prone site for a dwelling.
5. 51 Hardiman Pty Ltd v Melbourne CC & Ors [2025] VCAT 222: in which the Tribunal confirmed that climate change is a non-negotiable element in the assessment of flood risk. The Tribunal considered increased rainfall intensity and sea level rise, and accepted the 1% AEP flood level in the year 2100 as the appropriate benchmark in that particular case.

Our take

The issue of outdated flood mapping in the planning scheme is a significant one. Outdated planning scheme mapping exposes Councils to litigation risk (including class actions), if for instance this leads to developments being approved in at risk locations not identified as such in the planning scheme. 

There are also reputational risks. We expect that, in the aftermath of serious flood events, Council decisions will continue to be scrutinised through media, public inquiries and ombudsman investigations. 

We also expect to see insurers increasingly playing a ‘quasi-regulator’ role, through the approval or denial of insurance policies, or the imposition of related conditions to insure, which will, in turn, shape the way in which development is undertaken, regardless of planning scheme requirements.

All of this points to the need for the strategic, statutory, and water authority functions, to work together – in the first instance, risk can be significantly mitigated if planning schemes are up to date.

What Councils should do

In the interim, Councils can potentially use the Building Act 1993 and the Water Act 1989 to seek to address flood risk, at least to some extent. Regulation 153 of the Building Regulations 2018 enables Councils to specify a minimum floor level in consultation with relevant authorities such as CMAs. 

Noting the decision in Kiyagan v Baw Baw SC [2025] VCAT 206, whereby the Tribunal held that flood risk was not relevant in a statutory planning sense in the absence of a relevant permit trigger, there may also still be scope to seek to address flood risk through permit conditions. The power to impose permit conditions under section 62 of the Planning and Environment Act 1987 is a wide one, with the application of this approach to addressing flood risk not yet having been tested at the Tribunal.

Councils should also be mindful not to forgo their responsibilities because an authority has objected to a development proposal. When a referral authority raises concerns or recommends refusal, Councils should continue to actively engage in the decision-making process.

Undertaking these actions may also assist in demonstrating that the Council has discharged its duty of care.