BEAUGLEHOLE and DEPARTMENT OF WATER
[2017] WASAT 152
•24 NOVEMBER 2017
BEAUGLEHOLE and DEPARTMENT OF WATER [2017] WASAT 152
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2017] WASAT 152 | |
| RIGHTS IN WATER AND IRRIGATION ACT 1914 (WA) | |||
| Case No: | DR:256/2016 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MS D QUINLAN (MEMBER) | 24/11/17 | |
| 27 | Judgment Part: | 1 of 1 | |
| Result: | Decision affirmed | ||
| B | |||
| PDF Version |
| Parties: | GREGORY BEAUGLEHOLE DEPARTMENT OF WATER |
Catchwords: | Water licence Groundwater licence Annual water entitlement Reduction in annual entitlement Policy to recoup unused water entitlements |
Legislation: | Rights in Water and Irrigation Act 1914(WA), s 4, Sch 1, cl 7(2), cl 24(1), cl 24(2), cl 24(2)(d), cl 26, cl 26(4), s 5C, s 26B, s 26GG(1)(c), PT 111 State Administrative Tribunal Act 2004 (WA), s 27, s 29, s 60(2) Water Agencies (Powers) Act 1984 (WA), s 104 |
Case References: | Kirwan and Department of Water [2011] WASAT 137 More and Water and Rivers Commission [2006] WASAT 112 Ord Irrigation Cooperative Ltd and Department of Water [2017] WASAT 85 Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 |
Orders | The decision of the respondent on 28 July 2016, pursuant to s 5C of the RIWI Act under delegated authority from the Minister for Water, to amend the applicant's groundwater licence GWL 165771(3) to reduce his annual water entitlement from 80,000kL to 40,000kL is affirmed. |
Summary | Pursuant to s 5C of the Rights in Water and Irrigation Act 1914 (WA) (RIWI Act), the respondent decided to amend the applicant's groundwater licence to reduce his annual water entitlement from 80,000kL to 40,000kL. The applicant sought a review of the decision in the Tribunal. By consent, the matter was determined entirely on the documents.,The issue to be determined in these proceedings was, in the exercise of the Tribunal's discretion in review proceedings, what is the correct and preferable decision at the time of the review when having regard to:,a) the relevant provisions of the RIWI Act; and ,b) the respondent's policy to recoup unused water entitlements as set out in the South West Groundwater Areas Allocation Plan (2009) (SW Allocation Plan) and Statewide Policy No. 11: Management of Unused Licensed Water Entitlements (2003) (Unused Water Entitlement Policy).,The Tribunal found that a decision to maintain the applicant's annual water entitlement of 80,000kL would not facilitate the objectives of the RIWI Act nor the policy objectives as stated in the SW Allocation Plan and Unused Water Entitlement Policy. The Tribunal made orders that the decision of the respondent is affirmed in that the annual water entitlement is reduced from 80,000kL to 40,000kL. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : RIGHTS IN WATER AND IRRIGATION ACT 1914 (WA) CITATION : BEAUGLEHOLE and DEPARTMENT OF WATER [2017] WASAT 152 MEMBER : MS D QUINLAN (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 24 NOVEMBER 2017 FILE NO/S : DR 256 of 2016 BETWEEN : GREGORY BEAUGLEHOLE
- Applicant
AND
DEPARTMENT OF WATER
Respondent
Catchwords:
Water licence -Groundwater licence - Annual water entitlement - Reduction in annual entitlement - Policy to recoup unused water entitlements
Legislation:
Rights in Water and Irrigation Act 1914(WA), s 4, Sch 1, cl 7(2), cl 24(1), cl 24(2), cl 24(2)(d), cl 26, cl 26(4), s 5C, s 26B, s 26GG(1)(c), PT 111
State Administrative Tribunal Act 2004 (WA), s 27, s 29, s 60(2)
Water Agencies (Powers) Act 1984 (WA), s 104
Result:
Decision affirmed
Summary of Tribunal's decision:
Pursuant to s 5C of the Rights in Water and Irrigation Act 1914 (WA) (RIWI Act), the respondent decided to amend the applicant's groundwater licence to reduce his annual water entitlement from 80,000kL to 40,000kL. The applicant sought a review of the decision in the Tribunal. By consent, the matter was determined entirely on the documents.
The issue to be determined in these proceedings was, in the exercise of the Tribunal's discretion in review proceedings, what is the correct and preferable decision at the time of the review when having regard to:
a) the relevant provisions of the RIWI Act; and
b) the respondent's policy to recoup unused water entitlements as set out in the South West Groundwater Areas Allocation Plan (2009) (SW Allocation Plan) and Statewide Policy No. 11: Management of Unused Licensed Water Entitlements(2003) (Unused Water Entitlement Policy).
The Tribunal found that a decision to maintain the applicant's annual water entitlement of 80,000kL would not facilitate the objectives of the RIWI Act nor the policy objectives as stated in the SW Allocation Plan and Unused Water Entitlement Policy. The Tribunal made orders that the decision of the respondent is affirmed in that the annual water entitlement is reduced from 80,000kL to 40,000kL.
Category: B
Representation:
Counsel:
Applicant : N/A
Respondent : N/A
Solicitors:
Applicant : N/A
Respondent : State Solicitor's Office
Case(s) referred to in decision(s):
Kirwan and Department of Water [2011] WASAT 137
More and Water and Rivers Commission [2006] WASAT 112
Ord Irrigation Cooperative Ltd and Department of Water [2017] WASAT 85
Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Introduction
1 Mr Gregory Beauglehole (applicant) is the owner of Lot 10 Lillydale Road, North Boyanup (subject site). The Department of Water (respondent) is the State government department which principally assists in the administration of the Rights in Water and Irrigation Act 1914 (WA) (RIWI Act).
2 On 28 July 2016, pursuant to s 5C of the RIWI Act, under delegated authority from the Minister for Water (Minister), the respondent decided to amend the applicant's groundwater licence GWL 165771(3) (licence) to reduce his annual water entitlement from 80,000kL to 40,000kL (decision).
3 On 23 August 2016, pursuant to s 26GG(1)(c) of the RIWI Act, theapplicant sought a review of the decision in the Tribunal.
4 The proceedings were adjourned a number of times throughout 2017, in order to await a decision of the President of the Tribunal in Ord Irrigation Cooperative Ltd and Department of Water [2017] WASAT 85 (Ord Irrigation and Department of Water) which raised similar issues for determination. That decision was delivered on 19 June 2017 and is now the subject of an appeal to the Court of Appeal. The parties considered the decision in Ord Irrigation and Department of Water and agreed that these proceedings could be determined on the documents.
5 Accordingly, at the directions hearing on 19 October 2017 the Tribunal made the following orders:
1. The Tribunal notes that both parties request the Tribunal to determine the application for review entirely on the following documents:
(a) The application for review dated 28 July 2016 and filed on 23 August 2016 and its attachments;
(b) The email from Mr Mick Owens to the Tribunal on 28 July 2017;
(c) The respondent's Statement of issues, facts and contentions dated and filed on 18 August 2017;
(d) The s 24 bundle of documents dated and filed on 18 November 2016; and
(e) Witness statements of Michael Robert McKenna and Adam Andrew Maskew, both dated 18 November 2016 and filed on 21 November 2016.
2. The Tribunal notes that the applicant does not wish to cross-examine either witness for the respondent.
3. The matter is to be determined entirely on the documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA).
Issue to be determined
6 The issue to be determined in these proceedings is, in the exercise of the Tribunal's discretion in review proceedings under s 29 of the State Administrative Tribunal Act2004 (WA) (SAT Act), what is the correct and preferable decision at the time of the review when having regard to:
a) the relevant provisions of the RIWI Act; and
b) the respondent's policy to recoup unused water entitlements as set out in the South West Groundwater Areas Allocation Plan(2009) (SW Allocation Plan) and Statewide Policy No. 11: Management of Unused Licensed Water Entitlements(2003) (Unused Water Entitlement Policy).
Statutory framework
7 The subject site is located in the Bunbury Groundwater Area which was proclaimed as such under s 26B of the RIWI Act on 4 June 1975. In order to take water from an underground water source which has been proclaimed under s 26B a person must hold a license granted under s 5C of the RIWI Act.
8 Section 4 sets out the objects of Pt III of the RIWI Act which is entitled 'Control of water resources' as follows:
(1) The objects of this Part are
(a) to provide for the management of water resources, and in particular
(i) for their sustainable use and development to meet the needs of current and future users; and
(ii) for the protection of their ecosystems and the environment in which water resources are situated, including by the regulation of activities detrimental to them;
and
(b) to promote the orderly, equitable and efficient use of water resources; and
(c) to foster consultation with members of local communities in the local administration of this Part, and to enable them to participate in that administration; and
(d) to assist the integration of the management of water resources with the management of other natural resources.
10 Pursuant to s 104 of the Water Agencies (Powers) Act 1984 (WA), the functions of the Minister for Water relevant to these proceedings concerning the granting and renewal of s 5C licences under the RIWI Act have been delegated to certain officers of the respondent.
11 Clause 24(1) of Sch 1 to the RIWI Act relevantly provides that the Minister may, by notice in writing given to the licensee, vary the duration, term, condition or restriction included in a licence. Clause 24(2) of Sch 1 to the RIWI Act provides that the Minister may only exercise a power in cl 24(1) in relation to a licence in certain defined circumstances with, relevantly, the one listed in cl 24(2)(d) being that the Minister is of the opinion the quantity of water that may be taken under the licence has consistently not been taken.
12 Before the Minister may decide to vary a licence, cl 26 of Sch 1 to the RIWI Act provides that (except where the licensee consents to the variation), the Minister must notify the licensee of the proposed variation, provide an opportunity to the licensee to make submissions and have regard to any submissions made by the licensee.
SW Allocation Plan
13 Relevant to the subject site, Table 3 of the SW Allocation Plan provides that the annual allocation limit for the Leederville Aquifer in the Bunbury east subarea of the Bunbury Groundwater Area (subarea) is 2,000,000kL (allocation limit).
14 The SW Allocation Plan was published in 2009 and Table 3 indicates that, at that time, there existed 1,812,400kL licensed entitlements of the allocation limit and limited water available for further allocation in the subarea. Allocation limits specify the maximum amount of water that the respondent considers may sustainably be extracted from each aquifer in the subarea and a set having regard to relevant hydrogeological monitoring data and modelling using the best information and analysis available at the time of establishing the allocation limit.
15 Clause 4.3 of the SW Allocation Plan states that, where water is over-allocated in subareas, the respondent will seek to reduce the amount of over allocation. This will be done by reviewing the use of water by current licensees and recouping water that has been allocated, but is not being used. Action 18 states that the respondent will initiate processes to recoup unused water entitlements. Item 4.6 of Table of the SW Allocation Plan provides that the respondent may reduce unused water entitlements in accordance with the Unused Water Entitlement Policy.
16 An evaluation of the SW Allocation Plan was conducted by the respondent between 2009 and 2012 (SW Allocation Plan Evaluation) and included abstraction against allocation limits. The SW Allocation Plan Evaluation identified that the subarea was 123% over-allocated. That is, despite the allocation limit being 2,000,000kL, the licensed entitlements of the subarea was actually over-allocated at 2,456,400kL.
17 As at 17 May 2016 the respondent had reduced the licensed entitlements of the subarea to an over-allocation of 113.94%, totalling 2,278,700kL.
18 As at 16 August 2017 the respondent had further reduced the licensed entitlements of the subarea to an over-allocation of 106.86%, totalling 2,137,150 kL.
Unused Water Entitlement Policy
19 The Unused Water Entitlement Policy was approved by the Water and Rivers Commission (Commission) (the predecessor of the respondent) in November 2003. Its stated purpose was to provide a consistent, effective approach to the management of unused licensed water entitlements across the State.
20 The definitions section in cl 2 of the Unused Water Entitlement Policy commences with the following:
In managing unused licensed water entitlements the Commission needs to strike a balance between hard and fast rules and consideration of individual circumstances. This approach is in accordance with the requirements of the legislation that the 'Commission is to have regard to all matters considered relevant' in making its decision.
21 Clause 2.1 of the Unused Water Entitlement Policy states that:
The Commission considers that an unused water entitlement is that part or all of the licensed annual water entitlement that has not been taken (used) for more than three consecutive years, unless otherwise specified in licence conditions or operating strategies or agreed development timeframes.
However, the Commission will consider a lesser timeframe in exceptional circumstances that warrants urgent intervention such as:
• an unprecedented demand for access to water that exceeds the allocation limit for the area;
• when the licensee has no clear intent to utilise the water entitlement;
• to prevent speculation or monopolies in water entitlement; or
• restricting development or anti-competitive behaviour.
Only in exceptional circumstances will entitlements be recouped where there is a commitment by the licensee, in writing, to use the entitlement within the term of the license.
The entitlement is considered unused where the water is available to be taken and the licensee cho[o]ses not to do so. The Commission does not consider the entitlement unused where the ability to take the water is outside the influence of the licensee because of restrictions or climatic variations such as reduced rainfall or stream flow.
22 Clause 3 of the Unused Water Entitlement Policy states:
The Water and Rivers Commission will manage unused licensed water entitlements to ensure that entitlements are fully and effectively utilised. This will be achieved by seeking to reduce unused entitlements to a minimum, while ensuring that:
• the reasonable water requirements of the licensee are addressed;
• where possible, new applicants seeking access to a water resource are not unreasonably constrained in obtaining a water entitlement; and
• licensed water entitlements reflect actual water usages.
Where the licensee is able to clearly establish to the satisfaction of the Commission that genuine extenuating circumstances have resulted in part or all of the licensed water entitlement not being used, the unused component of the entitlement may be retained for an agreed period.
The management of unused licensed water entitlements will be in accordance with Schedule 1 clause 24(2)(d) of the RIWI Act …
23 Clause 4.6 of the Unused Water Entitlement Policy outlines the respondent's approach to the management of unused licensed water entitlements where the relevant water resource is fully or over-allocated. Clause 4.6 relevantly states:
Licensed water entitlements in fully allocated areas will be managed to prevent manipulation or speculation where applications for additional water entitlements are refused and trading in water entitlements could be initiated. Licensed water entitlements should:
• be fully utilised;
• have strict conditions and timeframes for their eventual use; or
• clearly establish extenuating circumstances whereby the unused entitlement may be retained as agreed by the Commission. However, it is expected that these entitlements will be utilised, either through trading or expansion of the existing development.
In areas that are fully allocated the Commission will:
• continue licence conditions compliance checks;
• seek to actively recoup the water entitlement not being utilised[.]
24 Clause 4.6 of the Unused Water Entitlement Policy also states that, if the licensee is able to demonstrate extenuating circumstances, then a licence for a term of two years may be granted to allow the licensee sufficient time to fully utilise the water entitlement. Clause 2.2 of the Unused Water Entitlement Policy provides that 'extenuating circumstances' that may impact on the licensee's ability to implement the approved development and fully utilise the water entitlement include personal reasons, such as poor health, and reasons beyond the control of the licensee, such as fluctuation and sudden market changes.
25 Clause 4.7 of the Unused Water Entitlement Policy, under the heading 'Negotiation', provides that:
The Commission is required under the provisions of the RIWI Act to notify the licensee of its intention to amend or cancel the licence. The licensee is to be provided the opportunity to be heard or make a written submission before a decision is made. The Commission is to have regard to any submission made by the licensee before it makes its final decision.
The Commission, having identified unused water entitlements, will discuss with the licensee full utilisation of their entitlement before making any decision to transfer, amend or renew the current licence or to recoup the unused portion of the water entitlement, with the view to:
• encourage the licensee to make an application to amend the licence to better reflect the actual water requirements. The original licence must be returned to the Commission before a new licence can be issued;
• obtain a commitment from the licensee to utilise the entitlement within an agreed timeframe;
• identify circumstances that would allow the licensee to retain the water entitlement; or
• initiate procedures to recoup the unused water entitlement.
Application of policy
26 In Ord Irrigation and Department of Water at [32] - [34] the Tribunal considered the following authorities in relation to the application of policy in exercising a discretionary power:
As Brennan J noted in Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 (Re Drake) at 645:
When the [Administrative Appeals] tribunal is reviewing the exercise of a discretionary power reposed in a Minister, and the Minister has adopted a general policy to guide him in the exercise of the power, the tribunal will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application would produce an unjust decision in the circumstances of the particular case. Where the policy would ordinarily be applied, an argument against the policy itself or against its application in the particular case will be considered, but cogent reasons will have to be shown against its application, especially if the policy is shown to have been exposed to parliamentary scrutiny.
This approach was endorsed by the Tribunal in More and Water and Rivers Commission [2006] WASAT 112 and Kirwan and Department of Water [2011] WASAT 137.
In considering whether to apply a government policy, the Tribunal must determine the correct and preferable decision balancing the desirability of consistency in the treatment of citizens pursuant to the law and the ideal of justice in the individual case: Re Drake at 636.
Applicant's submissions
27 The Tribunal notes that the applicant's submissions raise a number of issues under the title of 'Principles of Administrative Law', such as bias, right to be heard and selective consideration of policy. These matters are not relevant to review proceedings, the nature of which is set out in s 27 of the SAT Act. These matters were identified as falling outside of the Tribunal's review jurisdiction in order 1 of Senior Member Spillane made on 15 September 2017. Review proceedings are not an appeal in a traditional sense or prerogative writ proceedings where an error, or failure, on the part of the original decision maker needs to be identified. In review proceedings the matter is heard afresh and is not confined to the matters that were before the respondent at the time of the decision upon review. The Tribunal is to make the correct and preferable decision at the time of the review. It is incumbent on each party to present their own case supported by evidence and submissions as to why that party submits that the Tribunal should make a particular decision at the time of review.
28 Relevant to these review proceedings, the applicant's submissions can be summarised as follows:
a) The applicant understands and accepts that the respondent has the full legal right to reduce water entitlements under the RIWI Act and that the framework of legislation, allocation plans and policies is an acceptable process for water management and recouping.
b) The Unused Water Entitlement Policy and Statewide Policy No. 9: Water Licensing Staged Developments (2003), while current policies, are outdated to such an extent that appears to make decision makers ne selective in application of certain sections of policy rendering them unworkable as a whole.
c) The applicant has made a written commitment to use his full entitlement and relies on the statement in cl 2.1 of the Unused Water Entitlement Policy that:
Only in exceptional circumstances will entitlements be recouped where there is a commitment by the licensee, in writing, to use the entitlement within the term of the licence.
d) There is no scope in the Unused Water Entitlement Policy to dismiss or not accept the applicant's written commitment to use his full entitlement within the term of the licence.
e) There is no definition of 'exceptional circumstances' in the Unused Water Entitlement Policy. The applicant refers to the evidence of Mr Adam Maskew at para 11 where he states that the recoup from the applicant was simply part of an ongoing process to reduce the amount of over allocation in the subarea as stipulated in the SW Allocation Plan which, the applicant suggests means the recoup was not done in 'exceptional circumstances' as stated in the Unused Water Entitlement Policy.
f) The applicant submits that this inconsistency identified above has been recognised by the respondent as shown in the internal memorandum of Mr Mike McKenna dated 30 March 2016 which states at pages 3 - 4:
• Review the commitment (Section 2.1) that 'only in exceptional circumstances will entitlements be recouped where there is a commitment by the licensee, in writing, to use the entitlement within the term of the licence.' An operating strategy, staged development plan or potentially an application could be argued demonstrates intent of the licensee to utilise the entitlement. These could be construed as 'written commitments' which would make recouping potentially difficult and subject to challenge. The 10 year tenure of the licence provides the licensee with considerable flexibility to delay use and potentially seek windfall gain. OP 5.13 again presents a less robust stance, which 'discourages' speculative investment, whereas the intent of [the Unused Water Entitlement Policy] is to effectively prevent windfall gain through trading of unused entitlements. Under [the Unused Water Entitlement Policy] where water is demonstrated as not being used within the 3 year period stated under the policy the ability to recoup in the circumstances should override this provision.
• Similarly, the extenuating circumstances require review to determine when leniency in applying the policy should come into effect. Section 2.1/2.2 state that 'the Commission does not consider the entitlement unused where the ability to take the water is outside the influence of the licensee because of restrictions or climatic variations such as reduced rainfall or streamflow or fluctuation and sudden market changes'. The validity of these circumstances can be questioned in terms of an acknowledged drying climate and low-risk commercial businesses should be robust enough to absorb market changes, particularly in the short-term. Placing the requirement on the licensee within 30 days to demonstrate the impact of such circumstances on their water use can reduce the incidence of potential frivolous claims designed to delay our decision-making. The onus of responsibility to demonstrate why entitlement should not be recouped should be embedded within the policy review. Once the decision has been made, the licensee ultimately has the opportunity to seek review [of] the decision through the State Administrative Tribunal.
g) In particular, the 'written commitment' referred to in section 2.1 and the negotiation process required in section 4.1 of the Unused Water Entitlement Policy which refers to discussions with the licensee with a view to identifying circumstances that would allow the licensee to retain the water entitlement both indicate a real policy intent to negotiate and work with licensees to ensure water entitlements are used. The applicant submits that the intent of the policy to negotiate and work with licensees to ensure water entitlement are used, and to keep the licensee informed of the potential for their unused entitlement to be recouped, has not been achieved by the respondent.
h) The applicant accepts that the commitment to use the full entitlement is in relation to a proposed use (subdivision) that was not the same proposed use as suggested in the original application (grazing racehorses). However, the applicant submits that there is no mandated policy position that the proposed use cannot change over the term of the license. The applicant submits that, as long as the use is sustainable it is irrelevant what the ultimate use is as to whether the annual entitlement is retained or recouped as long as that use is reflected as an activity on the licence.
Respondent's submissions
29 The respondent submits that, in determining the correct and preferable decision upon review, there are no cogent reasons in this case for the Tribunal to depart from the policies adopted by the respondent to guide it in the exercise of discretion whether to amend the applicant's licence to reduce his annual water entitlement.
30 The respondent submits that the quantity of water that could be taken by the applicant under the licence has consistently not been taken, and that the applicant has failed to adequately explain the reasons for this consistent failure or establish any relevant extenuating circumstances.
31 The respondent submits that the amended annual entitlement at 40,000kL is some 12,750kL more than the highest annual usage since 2009 and that the applicant should not be entitled to an annual entitlement of 80,000kL in circumstances where the history of usage demonstrates that such an allocation is not required.
32 The respondent further submits that the reduction in recent years of the over-allocation in the subarea reflects the respondent's persistent efforts, in compliance with the SW Allocation Plan and the Unused Water Entitlement Policy, to reduce that over-allocation.
Witness evidence
33 The applicant has not provided any witness evidence to the Tribunal.
34 The respondent has provided to the Tribunal witness statements from Mr Michael McKenna and Mr Adam Maskew who are both employed by the respondent.
35 Mr McKenna has been an employee of the respondent since 2001 and since 2006 has held the position of Program Manager Bunbury Water Licensing and Use in the South-West Region. Mr McKenna's professional qualifications include a Bachelor of Science degree majoring in Biotechnology and Biological Sciences (1993) and Environmental Sciences (1996) and a postgraduate diploma in natural resource management (Aquatic Science) (1994). Mr McKenna has extensive experience in all aspects of groundwater licensing including the development of policy and directly to framework for managing water resources. Mr McKenna in his witness statement informs the Tribunal that he has read and considered the information contained in the Tribunal brochure entitled A guide for experts giving evidence in the State Administrative Tribunal (the Tribunal's guide for experts) and agrees to be bound by those obligations.
36 Mr McKenna expresses the view at paragraph 24 of his witness statement that, where water resources are over-allocated, recoupment of unused water entitlements in those areas is considered to be a priority, as ongoing abstraction above the sustainable limit can lead to detrimental impacts to the resource.
37 Mr McKenna was the respondent's delegated decision-maker in relation to the decision of the respondent on 28 July 2016 to amend the applicant's licence and his witness statement gives background details in relation to that decision. Mr McKenna's witness statement also gives a detailed history of the applicant's licence which is detailed further below under background facts.
38 Mr McKenna explains his reasoning in coming to his decision at paragraphs 89 to 94 of his witness statement. In particular, he states that he considered all of the matters raised by the applicant and his representative Mr Owens and whether any extenuating circumstances existed which might have impact on the applicant's ability to implement his development and fully utilise his water entitlement. Mr McKenna is of the view that there are no relevant extenuating circumstances that have been raised by the applicant. In coming to his decision, Mr McKenna states that he considered the matters set out in cl 7(2) of Sch 1 to the RIWI Act. In particular, Mr McKenna states that he considers granting the applicant an annual water entitlement of 40,000kL is appropriate as the applicant has never used more than 27,430kL per annum in any year. Consequently, Mr McKenna states, an annual entitlement of 40,000kL permits the applicant an additional amount more than he has ever utilised to support any future subdivision and development on the subject site. In conclusion, Mr McKenna is of the view that an annual entitlement of 40,000kL is consistent with the relevant provisions of the RIWI Act as well as the provisions of the SW Allocation Plan and the Unused Water Entitlements Policy.
39 Mr Maskew has been an employee of the respondent since 2005 and since 2014 has held the position of South-West Regional Manager. Mr Maskew's professional qualifications include a Bachelor of Science degree majoring in Environmental Science, Zoology and Marine Biology (1994) and a Master of Aquaculture (2002). Mr Maskew also has extensive experience in all aspects of groundwater licensing and has been involved in the development of policy for managing water resources. Mr Maskew in his witness statement informs the Tribunal that he has read and considered the information contained in the Tribunal's guide for experts and agrees to be bound by those obligations.
40 Mr Maskew's opinion is that the water resources relevant to these proceedings are well understood water resources in Western Australia as there is a significant amount of hydrogeological, modelling and monitoring information to support policy development.
41 In summary, Mr Maskew is of the opinion that:
a) a reduction in the applicant's licence allocation from 80,000kL to 40,000kL is in accordance with the SW Allocation Plan, SW Allocation Plan Evaluation and the Unused Water Entitlement Policy;
b) the applicant has not identified any extenuating circumstances for the purposes of cl 2.2 of the Unused Water Entitlement Policy;
c) the applicant has not demonstrated sound reasons for departing from these policies; and
d) further, these policies are essential to ensure the quality and sustainable yield of the water resource.
Background facts
42 The following background facts can be gleaned from all of the evidence presented in these proceedings.
43 On 14 June 2000, the respondent's predecessor, the Commission, received an application from the applicant for a non-artesian groundwater licence to take water for the purpose of irrigating 3 hectares of pasture on the subject site for the grazing of racehorses.
44 On 20 June 2000, the Commission issued the applicant a groundwater well licence with conditions (GWL 9876). GWL 9876 granted the applicant an annual water entitlement of 27,000kL for the stated purpose of irrigation of 3 hectares of pasture and with the expectation that the irrigation project would be completed by 20 June 2002 which is when the licence was to expire.
45 On 22 January 2003, the Commission contacted the applicant to ascertain if the applicant's irrigation project had been completed in accordance with the relevant condition of GWL No. 9876. The applicant advised that the bore had not been constructed and that he did not intend to proceed. The status of GWL 9876 was subsequently changed to 'surrendered'.
46 On 6 December 2007, the Commission received an application from the applicant in relation to the subject site for a licence to construct a well/borehole and a non-artesian groundwater licence to take water to irrigate 12 hectares of pasture for the grazing of racehorses.
47 On 10 January 2008, the respondent undertook a site inspection with the applicant as part of the application assessment process. The respondent's file note indicates that during the site visit, it was ascertained that the actual proposed area to be irrigated was a total of 8 hectares in designated areas or paddocks and these areas were to be developed over a period of three years.
48 On 11 January 2008, the respondent granted the applicant a licence to construct a borehole (CAW 165469) that would expire on 15 January 2009.
49 On 17 July 2008, the applicant was contacted by the respondent in order to discuss his water requirements with him, and it was internally agreed to offer the applicant an annual water entitlement of 90,000kL per annum (or 12 hectares x 7,500kL per annum).
50 On 26 February 2009, the respondent wrote to the applicant noting that CAW 165469 had expired on 15 January 2009 and that the respondent had not yet received the completed form from the applicant confirming the completed borehole.
51 On 18 March 2009, the respondent received the relevant completed form from the applicant indicating the borehole had been drilled on 3 October 2008.
52 On 5 May 2009, the respondent issued a groundwater licence to the applicant for a duration of 10 years with an annual entitlement of 90,000kL for the irrigation of 12 hectares of pasture on the subject site (GWL 165771). Condition 1 of GWL 165771 required as follows:
That the licensee shall commence development of the project for which the water is required within 12 months of being granted the licence and shall have the project fully operative within 2 year/s of being granted the licence.
53 On 22 July 2009, the applicant was contacted by the respondent to ascertain if a water meter had been installed on the subject land in accordance with condition 3 of GWL 165771. The applicant advised that the meter had been purchased but not installed. During this conversation, the applicant requested an extension of one year to comply with condition 1 of GWL 165771. The applicant was advised to put his request in writing, outlining any extenuating circumstances as to why he had not complied with the licence conditions, to which he agreed.
54 On 24 August 2009, the applicant was again contacted by the respondent in relation to the installation of the water meter. The applicant advised that, contrary to condition 3 of GWL 165771, the water meter had not yet been installed but it would be soon. On 1 September 2009, the respondent received an email from the applicant advising the water meter had been installed.
55 On 10 September 2009, the respondent wrote to the applicant by email, acknowledging receipt of his email regarding installation of the water meter, and noting that condition 4 of his licence required the recording of monthly meter readings to be submitted to the respondent by 31 July each year.
56 On 30 July 2010, the respondent received the applicant's meter water use card for the 1 July 2009 to 30 June 2010 irrigation year.
57 On 3 August 2010, the respondent wrote to the applicant acknowledging receipt of his meter readings. The respondent also noted that the meter readings indicated that only 26,340kL of the applicant's 90,000kL per annum water entitlement had been used, and that the applicant had not provided the respondent with details regarding the progress of his development as required under condition 2. The letter requested that the outstanding information be provided by 31 August 2010. The letter noted that if the information was not received by the date requested, further action may be taken, including amendment of the licence and recouping the applicant's water entitlement on the basis that the applicant did not appear to be using the water for the purpose for which the licence had been issued.
58 On 23 August 2010, the applicant hand delivered a development timetable to the respondent's offices, which indicated that the applicant's full water entitlement would be utilised by June 2011.
59 On 29 March 2011, the applicant submitted an application to the respondent to transfer 10,000kL of his water entitlement to a third party. On 31 March 2011, the respondent conducted a site inspection as part of its assessment of the applicant's transfer application. The respondent discussed the proposed transfer with the applicant to ascertain whether the applicant could transfer 10,000kL of his entitlement without affecting his own proposed development of the subject site. During this site inspection, the respondent and the applicant agreed that the applicant had developed approximately 5 hectares of the subject site and a further 5 hectares was currently being developed. The applicant advised that he predicted he would complete the development of the additional 5 hectares in one to two years. The applicant indicated that he would be able to manage with a reduced annual water entitlement of 80,000kL by undertaking a number of water use efficiency measures at his property.
60 On 8 April 2011, the respondent approved the applicant's transfer of 10,000kL and the applicant’s annual groundwater licence entitlement was reduced to 80,000kL (GWL 165771(2)).
61 On 28 July 2011, the applicant submitted a meter water use card which stated that 26,320kL of the applicant's 80,000kL per annum water entitlement had been utilised in the 2010/11 water year.
62 On 23 August 2012, the applicant submitted a meter water use card which stated that 8,360kL of the applicant's 80,000kL per annum water entitlement had been utilised in the 2011/12 water year.
63 On 20 August 2013, the applicant submitted a meter water use card which stated that 16,400kL of the applicant's 80,000kL per annum water entitlement had been utilised in the 2012/13 water year.
64 On 25 August 2014, the applicant submitted a meter water use card which stated that 25,800kL of the applicant's 80,000kL per annum water entitlement had been utilised in the 2013/14 water year.
65 On 8 January 2015, the respondent wrote to the applicant acknowledging receipt of his meter water use card and noting that the meter readings indicated water use for the 2013/14 water year had only been 25,800kL of his 80,000kL per annum water entitlement.
66 On 11 March 2015, the respondent conducted a site inspection on the subject site and ascertained that the applicant was currently only irrigating 5 hectares of the subject site, despite his development timetable having required completion of 12 hectares by April 2013.
67 On 8 September 2015, the applicant submitted a meter water use card which indicated that 27,430kL of the applicant's 80,000kL per annum water entitlement had been utilised in the 2014/15 water year.
68 On 15 February 2016, the respondent wrote to the applicant noting that the applicant's water use since 2009 had been well below his annual licensed water entitlement. The respondent requested that the applicant provide a written explanation by 7 March 2016 as to why such a low annual volume of the applicant's water entitlement was being utilised in order for the respondent to better understand the applicant's water needs.
69 On 4 March 2016, the respondent received a telephone call from the applicant requesting an extension of time to provide the information requested in the respondent's letter of 15 February 2016. Later that same day the respondent emailed the applicant as follows:
As discussed approval has been granted for you to provide the necessary information on the proposed development of your property and use of the water granted.
You now have until the 30 April 2016 to provide information for the Department to be able to assess your ongoing water requirement.
I have attached the Departments policy on staged developments to inform and assist you to put the required information together. You should detail what you have put in place to date and what you propose to achieve each year for the next 5 years. The information should be detailed (dates, times, estimates of the increased water use etc.) and realistic. The department will use this information to assess your proposals and make a determination on your ongoing water requirement.
The State's water resources are becoming fully committed and there is a high demand for water. Where the Department is not satisfied water will be utilised, there are provisions under the Act to reduce water entitlements.
Please give me a call if you wish to discuss any issues or need any further information.
70 On 3 May 2016, the respondent received an email from the applicant outlining some basic details of his development to date. The applicant’s email described proposed future development options for the subject site, including subdividing, becoming a water service provider for the subdivided land and creating public open space areas. These were all new proposals which differed from the applicant's previous proposed development plans, and from the purpose for which the GWL 165771(2) was granted.
71 On 13 June 2016, in accordance with cl 24(2)(d) and cl 26(4) of Sch 1 to the RIWI Act, the respondent wrote to the applicant inviting comment on the respondent’s proposed decision as follows:
Thank you for your submission of your staged development received by email on 3 May 2016. This was in response to the Department's request for an explanation of your continual historically low annual water use.
In your email you indicated that your proposed land uses have now changed and you are considering subdivision into 2ha special rural residential lots. You indicated that the full water entitlement would be required for development of the subdivision, irrigation of future public open space and your intention to supply reticulated domestic garden water. You also indicated that you intend to seek a "lease" for the currently unused portion of your water entitlement.
This proposed decision relates to your water licence, GWL 165771, currently licensing you to draw 80,000kL for irrigation of up to 12ha of pasture and stock watering.
The Department has considered your submission and is proposing to amend your groundwater licence to reflect your historical use, with additional water for future development. The proposed water entitlement would decrease from your current 80,000kL down to 40,000kL. This decision has been made on the following grounds:
• Your historical water use has been less than 28,000kL per year since the licence was granted in 2009.
• Subdivision development may be some years into the future and the water requirement is yet to be identified.
• Any subdivided special rural residential lots will be entitled to apply for their own groundwater licences under current policy.
• In regard to [Unused Water Entitlement Policy], the policy requires extenuating circumstances to be clearly established to demonstrate why the unused entitlement has not been utilised. The Department does not believe that you have clearly established extenuating circumstances as to why the entitlement has not been fully utilised over the term of the license since it was issued.
• Policy 12.1.3 of the [SW Allocation Plan] states that "the unused component of a licensed entitlement is not tradeable, subject to Statewide Policy No 11. - Management of Unused Water Entitlements."
• GWL 165771 was issued in 2009 with a condition requiring the proposed development be completed within 2 years (i.e. 2011). In 2011, the licence was re-issued after trade of 10,000kL and again had a condition requiring the proposed development be completed within 2 years (i.e. 2013). However to date water use on the property has never been fully utilised. Statewide Policy No 9 - Water licensing Staged Developments recognises a trade to be approved for the portion of staged water entitlement that has been actively used, hence the Department's decision.
The reduction in volume is therefore consistent with the current usage and an allowance for some future development.
You now have the opportunity to comment. Your comments are important and will be considered before we make our final decision. We will only consider submissions made within 30 days from the date of this letter. The licence will be issued at the end of the submission period[.]
72 The applicant subsequently appointed an agent, Mr Mick Owens, to act on his behalf. As a result, the respondent extended the 30 day period during which the applicant could make submissions in relation to the proposed decision to allow the applicant's agent time to engage with, and make submissions to, the respondent.
73 On 27 July 2016, the respondent met with Mr Owens who made a number of submissions on behalf of the applicant, including in relation to the applicant’s proposed development of the subject site.
74 On 28 July 2016, the respondent advised the applicant of its decision to amend the licence GWL 165771(3) and his rights of review of that decision in the Tribunal. The reasons for the decision were given as follows:
Our decision was delayed at your request to accommodate your absence and appointment of Mick Owens of MJO Consulting to represent you in further discussions. The decision to issue the license was made following the meeting with Mr Owens on the 27 July 2016. The department considered the points raised by Mr Owens and advise that[:]
• The department flagged a possible recoup of water on a number of occasions since 2009 of which you were aware;
• You have not demonstrated progress towards your development plans which have changed to several times;
• The recent proposal to subdivide the land into 2 acre lots will require a minimum stated 12 - 18 months to allow rezoning of the land and subdivision approval. 2 acre special rural lots will be entitled to 1,500kL/annum allowances each for domestic and stock needs which respective owners can apply for in their own right.
• It is considered unlikely that the above subdivision will require water for [sic] to service any POS and whether POS will be required to be ceded as part of the subdivision.
• The department has made allowances of additional water within your revised entitlement to service limited development beyond historic maximum use.
Consideration
75 There are a number of factors for the Tribunal to consider in determining these proceedings, as well as evidence that needs to be given appropriate weight in that consideration.
76 The evidence that is before the Tribunal for determination of these proceedings on the documents is that noted in the Tribunal's orders on 19 October 2017. In the presentation of the applicant's case there is a merging of evidence and submissions regarding which the Tribunal must be cognisant in undertaking the exercise of weighing up the evidence, in particular the opinion evidence.
77 For instance, the respondent provided two witness statements, from Messrs Adam Maskew and Michael McKenna which are in the form and substance required in relation to expert evidence in that, in particular, they provide sufficient information of their relevant qualifications and experience as well as they both acknowledge they have read and considered the information contained in the Tribunal's guide for experts and agree to be bound by those obligations. The Tribunal finds that both Mr Maskew and Mr McKenna are suitably qualified and possess relevant expertise to provide opinion evidence as experts in these proceedings.
78 The only evidence that the applicant has provided that, perhaps in substance, may amount to an expert opinion is that from Mr Mick Owens in his email dated 7 July 2017. However this email does not acknowledge that Mr Owens has read and understood his obligations as an expert witness as explained in the guide and it does not adequately inform the Tribunal of his qualifications and experience in order to provide expert opinion evidence. Moreover, it is clear from the tenor of Mr Owen's email as well as from the role Mr Owen has undertaken on behalf of the applicant following notification of the proposed decision and in these proceedings, that his role is more akin to an advocate making submissions on behalf of his client than an independent expert witness. These factors, whilst they necessarily affect the weight to which the Tribunal will afford the opinion evidence of Messrs Maskew, McKenna and Owens, do not affect the extent to which the Tribunal will consider the submissions made by Mr Owens on behalf of the applicant.
79 However, for the sake of completeness, to the extent that the opinions of Mr McKenna and Mr Maskew differ to those of Mr Owens, the Tribunal prefers the evidence of Messrs McKenna and Maskew over what may be considered to be opinion evidence of Mr Owens. Moreover, the Tribunal prefers the evidence of Messrs Maskew and McKenna as their interpretation of the policy framework is logical and coherent and better accords with the objects and intent of the RIWI Act, than the views expressed by Mr Owens.
80 The facts are abundantly clear that the applicant's annual water entitlement was significantly underutilised between 2009 and 2015. The Tribunal finds that this significant underutilised entitlement can be characterised as an 'unused water entitlement' for the purposes of cl 2.1 of the Unused Water Entitlement Policy.
81 Pursuant to the policy framework, the Leederville Aquifer is considered to be over-allocated. It is consistent with cl 4.3 and Action 18 of the SW Allocation Plan to seek to reduce the amount of over-allocation by undertaking a review of the use of water under existing licences recoup any water that has been allocated but is not being, or has not been, used. As explained by Mr McKenna in his witness statement, this initiative involves the respondent's review of 187 licences in the subarea, of which the applicant's is only one, to determine whether any unused water entitlements may be recouped.
82 It is consistent with the objectives and provisions of the Unused Water Entitlement Policy, in relation to fully allocated resources, for the respondent to continue compliance checks of licence conditions, and to seek to actively recoup water entitlements which are not being utilised.
83 The Tribunal finds that the submissions made by the applicant in support of retaining an annual water entitlement of 80,000kL relate to matters forming part of business development which are within his control, rather than the types of 'extenuating circumstances' as identified in the Unused Water Entitlement Policy, which tend to relate to matters beyond the control of the applicant.
84 One of the objects of the RIWI Act as provided in s 4(1)(b) is to promote the orderly, equitable and efficient use of the State's water resources. Other, equally important objects of the RIWI Act as found in s 4(1)(a)(i) and (ii), are to provide for the management of water resources for their sustainable use and development to meet the needs of current and future users, and for the protection of their ecosystems and environment.
85 Section 4(3) of the RIWI Act requires that licensing decisions made by the respondent (and the Tribunal standing in the shoes of the respondent on review) should be directed towards achieving the objects identified in s 4(1) of the RIWI Act are achieved.
86 The Tribunal finds that the SW Allocation Plan and the Unused Water Entitlement Policy are policies that are consistent with the objects identified in s 4 of the RIWI Act and provide appropriate guidance in the discretion to be exercised concerning licences where the annual water entitlement is underutilised in circumstances where the relevant subarea is over-allocated.
87 The Tribunal finds that a decision to maintain the applicant's annual water entitlement of 80,000kL would not facilitate the objectives of the RIWI Act nor the policy objectives as stated in the SW Allocation Plan and Unused Water Entitlement Policy.
88 The Tribunal finds that a decision to maintain the applicant's annual water entitlement of 80,000kL would not promote the full and efficient use of the relevant water resource.
89 The Tribunal finds that the quantity of water that could be taken by the applicant under the licence has consistently not been taken, and that the applicant has failed to adequately explain the reasons for this consistent failure or establish any relevant extenuating circumstances.
90 Contrary to the applicant's submission, the Tribunal finds that the respondent did, over a number of years, appropriately sought to inform and negotiate a workable outcome with the applicant concerning his under-utilised entitlement as guided by the policy framework. However, in accordance with the objectives of the RIWI Act, as supported by the SW Allocation Plan and the Unused Water Entitlement Policy, the Tribunal finds that circumstances have appropriately reached a point that a decision needs to be made regarding the applicant's ongoing underutilised water entitlement.
91 The Tribunal finds that a decision to maintain the applicant's previous water entitlement would be illogical as it would allocate water for non-productive use, as the water entitlement would be held by the applicant in circumstances where the Tribunal finds that the applicant has not established a need for that level of entitlement.
92 In the exercise of the Tribunal's discretion under the RIWI Act (standing in the shoes of the original decision maker) as guided by the SW Allocation Plan and the Unused Water Entitlement Policy, it follows that the Tribunal has not been persuaded by any of the applicant's submissions in relation to the appropriate level for his annual water entitlement in the circumstances of this case. The Tribunal notes that many of those submissions misunderstood the role of policy to guide the exercise of discretion under the RIWI Act.
93 The Tribunal finds that the applicant has failed to identify sufficient reasons for the Tribunal either to consider there are extenuating circumstances or for the Tribunal not to be guided by the policy requirements of the SW Allocation Plan and the Unused Water Entitlement Policy. The Tribunal finds that, in the exercise of its discretion under the RIWI Act, that it is appropriately guided by the SW Allocation Plan and the Unused Water Entitlement Policy which the Tribunal has found are in accordance with the objects set out in s 4(1) of the RIWI Act.
94 In accordance with these reasons the Tribunal finds in the exercise of its discretion that the correct and preferable decision upon review is to affirm the decision of the respondent to amend the applicant's groundwater licence GWL 165771(3) (licence) to reduce his annual water entitlement from 80,000kL to 40,000kL.
Order
Accordingly, the Tribunal makes the following order on review:
1. The decision of the respondent on 28 July 2016, pursuant to s 5C of Rights in Water and Irrigation Act 1914 (WA) under delegated authority from the Minister for Water, to amend the applicant's groundwater licence GWL 165771(3) to reduce his annual water entitlement from 80,000kL to 40,000kL is affirmed.
- I certify that this and the preceding [94] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS D QUINLAN, MEMBER
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