Tipping my hat to the differences in Vic and NSW aviation regulation, the council is certainly not in a position to tell you how to operate an aircraft. They are, however, in a strong position to tell you how you can utilise your land, particularly where it affects neighbouring property owners.
Have a look at this private strip in suburban Newcastle, which applied for permission to build a hangar:
http://www.newcastle.nsw.gov.au/__da...rt_Item_29.pdf
That application was approved, but the (potential) killer in it is this little aside:
The objectors' concerns include: .... potential loss of property values; health and amenity impacts on neighbouring residents; ....