Cahill v Chief Executive, Primary Industries Corporation

[1996] QLC 27

[1996] QLC 27

 

  LAND COURT

BRISBANE

22 March 1996

A95-45

WR and DM Cahill
  v.
  Chief Executive, Primary Industries Corporation
  (Hearing in Rockhampton)
  DECISION

Mr and Mrs Cahill own Lot 66 RN 341, land in the Callide Valley adjoining Smoky Creek.  They irrigate the land with water pumped through a sub-artesian bore.  They are licensed to use 51 megalitres of water each year.  Their Waterworks Licence No B33641 was originally issued on 6 February 1970 and was renewed most recently on 19 June 1995.  It will expire on 28 February 2005.

In July 1995, Mr and Mrs Cahill (the "appellants") appealed to the Land Court. The notice of appeal was defective because it did not nominate the decision against which the appeal was made.  However, the appellants nominated 10 grounds of appeal.  It can be inferred from the date of the notice of appeal and from those grounds that the appeal was against the nominal allocation of 51 megalitres in the renewed licence.  At the hearing, the appellants argued that they should be licensed to draw 93 megalitres of water.

Preliminary issues

A number of unusual issues emerged at the hearing.

First, the appellants had applied for a renewal of the Waterworks Licence in the amount of 51 megalitres, yet they appealed against the grant of what they sought.

Secondly, they lodged their appeal against the grant of the licence apparently in the belief that an officer of the Primary Industries Corporation had conferred on them the right of appeal.  Indeed Mr Cahill stated on various occasions in the hearing that he would not have appealed had the officer not granted him that right.

Thirdly, it was only after the appeal had been lodged and the Cahills started researching their case that they became aware of the history of licensed water usage in the district of their land.  It was that research which led them to contend for the 93 megalitres figure, and to submit that there had been a reduction in allocation from 93 megalitres to 51 megalitres.

Late in the course of the hearing when those features of the case were clear, counsel for the respondent, Mr Grealy, raised questions about the jurisdiction of the Land Court to hear the case.  He did not formally submit that the Land Court lacked jurisdiction, but he raised a number of questions about whether there was a proper basis for the case to be argued and decided. The issues can be summarised as follows.

(a)There is a real question whether the appellants are persons aggrieved by the chief executive's decision given that the chief executive renewed their licence in the amount which they requested.

(b)The reduction in the allocation of the amount of water available under a previous licence took place when someone else owned the land and well before the appellants purchased the land. The remedy, if any, was available to a previous owner.  This court cannot deal with an objection to a decision made in 1987.

(c)Under the law in force when the reduction took place, however, there were no rights of appeal against an allocation of underground water.  Consequently, no action could have been taken by the previous owners.

Mr Grealy also submitted that, if the Land Court could entertain the appeal, the Court should not interfere with the licence.  The appellants had not proved their grounds of appeal. Furthermore, the appellants did not have a legitimate expectation to anything more than 51 megalitres.  The respondent chief executive acted properly in discharging his responsibility to preserve the water resources of the State by establishing a scheme based on rational criteria.  He was entitled to adopt proper guidelines and abide by that.

The preliminary points which he made merit attention.  To fully appreciate their significance it is necessary to have some understanding of the relevant provisions of the Water Resources Act 1989, the Water Act 1926 which it replaced, and the recent history of licensing and water usage on the subject land.

Statutory provisions

The appeal was brought under the Water Resources Act 1989 (the "Act") and it is provisions of the Act which provide the framework within which this case must be resolved.

The Act provides for licensing the use of underground water.  Section 44 states, among other things, that a licence is subject to the terms decided by the chief executive.  A licence may entitle the licensee to the grant of a nominal allocation, that is, the quantity of water apportioned under a water allocation (see section 2(1)).  A licence operates for the benefit of the owner for the time being of the land on which the licensed works are constructed.  The licence may be transferred, renewed, amended, modified or varied by the chief executive. 

An application for renewal of a licence must comply with the requirements of section 46 of the Act and the chief executive may grant the application (absolutely or subject to variation) or may refuse the application. The terms to which the renewal of a licence is subject are endorsed on or attached to the renewal.

The grant, renewal or amendment of a licence is not an arbitrary act by the chief executive. Section 8 of the Act provides that the chief executive must, among other things:

(a)prepare and keep a description of the natural water resources of Queensland, both surface and underground; and

(b)measure, make and keep a record of the underground natural waters of Queensland for the purpose of ascertaining and recording available information relating to the artesian and other underground waters; and

(c)evaluate the present and future water requirements of Queensland;

and may, among other things:

(a) take all steps and do all acts and things as the chief executive thinks fit to protect the water resources of Queensland from anything that results in or is likely to result in a diminution of their quantity or quality; and

(b)investigate and survey any natural water resource in Queensland in order to enable plans to be formulated, coordinated and implemented for the conservation, replenishment, utilisation and distribution of waters in Queensland.

Section 51 lists various circumstances in which appeals may be made against decisions of the chief executive.  The only words relevant to this case are as follows:

"(1)A person aggrieved by a decision of the chief executive with respect to -

(a)an application for -

...

(ii)the renewal of a licence;

...

may appeal therefrom to the Land Court."

The notice of appeal must state the grounds upon which the appellant intends to rely and the appellant is not entitled to raise on the appeal a ground not stated in the notice.

The burden of proof of a ground stated in the notice of appeal lies on the appellant.

The Land Court may confirm, vary or revoke the decision of the chief executive.

History of licensing and water use in the Callide Valley

The Cahills' property is located in an area of the Callide Valley which, in 1968 was constituted as a District in relation to which the provisions of the Water Act 1926 concerning sub-artesian wells were in force.  Since then, a waterworks licence has been required to construct works in the Callide Valley associated with the extraction of groundwater other than for domestic purposes.

In the decade or so before the declaration of the sub-artesian District, irrigation development accelerated in the Callide area.  A groundwater investigation was undertaken in 1963-65 and coincided with the planning of the Callide A power station.  The investigation disclosed the nature and extent of the aquifer system.  The area was divided into 11 sub-areas, the boundaries of which coincided with lines of investigation bores or tributary streams.  Many of those sub-areas are still used as management sections though some modifications have been made to represent the aquifer more accurately.  The 1965 report assessed the safe annual yield of the Callide alluvium under natural conditions to be approximately 30,000 megalitres.

Between 1963 and 1968 there was no significant recharge of groundwater supplies in the valley.  After the constitution of the sub-artesian District in 1968, the total of irrigated areas within the Callide Valley increased and by 1970 water levels had declined further in most sections of the Valley. 

Another investigation was undertaken in 1972, in response to pressure from the Callide Valley Irrigators Association for provision of works to augment the underground water supplies.  Information from that study, and from studies in 1974 and 1978, led to the conclusion that the annual safe yield of the aquifer in conjunction with supplies from the proposed Callide Stage II was 41,000 megalitres - a volume greater than the licensed allocations at that time.  The safe yield is the sustainable yield or average annual recharge of water in the aquifer.  These assessments of the yield of the aquifer system were arrived at after considering the response of groundwater levels to irrigation usage and natural recharge events.  Information about the level of irrigation usages was obtained from landowner interviews carried out in 1969 and 1973.  Landowners were asked to assess their usage at the time of the interviews.

The 1972 report recommended the construction of the Callide Valley Augmentation Scheme.  The Scheme was completed in 1977.  Additional allocations were made in 1978 in response to the new assessment of annual yield.  Proposed adjusted allocations were determined based on the water requirements of each property as indicated by the landowner interviews in 1973.  The determining of these proposed allocations was not restricted by section yields.  In some sections, total allocations exceeded section yields.  Licensees were asked if they would like to have the proposed allocation increased or reduced.  Increases were approved only if section yields would not be exceeded.  The total of allocations rose to approximately 45,000 megalitres and the commitment was made on the understanding that Callide Stage II would proceed.

The subject land is located in Section 2B, which was originally in section 2.  The total allocation of water in Sections 1 and 2 after the 1978 review was less than the estimated combined yield.  The allocations were gradually increased on request until late 1981, when the total allocations almost reached the level of yield.  A further study was undertaken and applications for additional allocations were refused.

The metering of irrigation bores in the Callide commenced in 1978 and it became apparent that earlier landowner estimates of water use were far in excess of metered use.  Water levels in most of the Valley, however, were in decline. It was apparent that the total yield had also been overestimated and that the allocations (which had been based on overestimated use) were too high.

A more accurate assessment of annual yield was made using metered use figures between 1978 and 1983.  The average annual yield from the combined system was approximately 22,000 megalitres, of which some 12,000 megalitres could be attributed to the natural aquifer system and approximately 10,000 megalitres per annum to the Callide Dam Stage II and other parts of the scheme.  The allocated volume of 45,000 megalitres was about twice the annual yield.  The average metered use of 25,000 megalitres exceeded the average annual yield.  The combined yield for section 1 and 2 was determined to be 5,730 megalitres yet the allocations totalled 13,800 megalitres.

In response to representations for measures to stop water levels declining, the Water Resources Commission undertook a comprehensive review of Water Supplies in the Callide Valley.  The November 1986 report concluded that, "in order to ensure the long term viability and stability of agricultural production in the area, positive action must be taken to reduce the current level of over allocation and use, and management measures must be implemented to ensure a more effective and equitable use and distribution of the water resources in the area."

Options were prepared for the management of future water allocations in order to bring allocations and use of water into line with available supplies.  Users and others were consulted about how best to conduct any review of allocations.  In May 1987, it was agreed that a system of announced annual allocations would be introduced for a trial period of five years.  Announced allocations for 1987/88 would be based on a property's averaged metered water use over the preceding five years.  The effect that the available water supply would have had on metered use during that five year period was to be considered when determining individual announced allocations.  The process was subject to an interview with an officer of the Water Resources Commission and a representative of the Callide Valley Water Advisory Committee.  Following those interviews criteria and guidelines were formulated.  The guidelines were endorsed by the Callide Valley Irrigators Association and the Callide Valley Water Advisory Committee.  Announced allocations for the 1987/88 water year were determined and each licensee was advised of the allocation in September 1987.  The total of announced allocations in the Callide Valley Irrigation Project for that year was 34,700 megalitres, still well in excess of the average annual yield.

Announced allocations from then onwards were on a percentage of the announced allocations applied in 1987/88.  They were not directly related to the original allocations, which have had no ongoing bearing on the volume of water available for use on a property.  Announced allocations were further reduced by 20% in most sections in the 1988/89 water year because of further declines in water levels.

In Section 2B announced allocations remained at 1987/88 levels until 1993/94 when they were reduced to 90% of the previous level because of low water levels in the section.  Those allocations have continued.

Before the introduction of the Act in 1989 the Water Resources Commission had recognised the need to place nominal allocations on licences in the Callide Valley. The nominal allocation was to be the announced allocation in the 1987/88 water year. The Act confirmed the need to attach nominal allocations to licences (see section 44(1)(c)).

In November 1990 a document titled "Future Directions of the Callide Valley" was sent by the Water Resources Commission to each licensee.  The document advised that the system of aquifers downstream of Callide Dam and Kroombit Dam was "generally heavily over-committed" and set out the way in which announced allocations would become nominal allocations recorded on licences.  Landowners were given an opportunity to discuss with Commission personnel any special circumstances which would allow a variation of the 1987/88 level of allocation.   They were advised that if, after the process was completed and licences were issued, they considered that their interests were affected by the actions of the Commission they could appeal to the Land Court.  After 32 interviews with licensees, 6 licensees received an adjustment of proposed nominal allocation in line with 1987 guidelines.

On 8 May 1991 all proposed nominal allocations were advertised in a bulk advertisement and, subsequently, amended and renewed licences were issued with the nominal allocation being placed on the licence.

History of licensing and water use on the appellants' property

The appellants' property is in the upper reaches of Section 2B of the Callide Valley Irrigation Project.  It is riparian to Smoky Creek which, with Bell Creek, flows westerly from the Calliope Range to a junction with Callide Creek.  Part of the property includes alluvial flats.  The alluvium in this area is generally less than 20 metres deep.  The appellants' bore is 16.8 metres to the bottom of the alluvium.  The geology of the area is such that there are no rock bars or other barriers to the continuous flow of groundwater right down the valley.  The recharge from Bell and Smoky Creeks has a direct effect on the water levels in the alluvium between Bell Creek and Callide Creek.  The best areas of recharge occur in the middle and upper reaches of Bell and Smoky Creeks.  Thus the lower sections of Bell Creek are extremely reliant on the down valley flow from the upper reaches.  The areas of heaviest use are located in these downstream areas.

Various studies of water usage and storage in Section 2B have led to calculations of the assessed safe yield of the Section.  The safe yield is said to be in the order of 3,100 megalitres (1993 study) or 3,000 megalitres (1994 study).  The latter figure was influenced by the continuing drought and few recharge events.

With 90% announced allocations, there is potential for landholders to legally use up to 5,196 megalitres.  The usage trend has stabilised in the past two years at about 3,700 megalitres.  At present both usage and allocations are in excess of the assessed yield of 3,000 megalitres and Section 2B is described as being in a "stressed condition" because of the over commitment of water.

Applications for new or increased allocations in Section 2B have been refused since late 1981.  In that period, allocations have been reduced by some 813 megalitres.

The appellants' property was previously part of a larger block comprising Lots 65 and 66 RN341.  Prior to 1987, the total allocation for those lots was 240 megalitres.  The actual use for each year if the five years from 1982/83 to 1986/87 was 28.1, 0, 0.1, 0 and 6.2 megalitres, an average of 7 megalitres or 3% of the original allocation.  In June 1987 a letter was sent to the previous owner informing him of a proposal to set the announced allocation for the 1987/88 water year at 7 megalitres.  Following an interview with the previous owner, he was informed in September 1987 that the announced allocation for 1987/88 would be 132 megalitres (Exhibit 5).  The amount was calculated by reference to the applicable guideline D and by reference to the high water levels in the section at that time.

WR and DM Cahill purchased Lot 66 RN341 (old Portion 66) in December, 1988.  The Waterworks Licences which related to this property also included Lot 65 RN341 (old Portion 65).  As the allocation related to both properties, the allocation was divided proportionally on the area of alluvium.  Apparently that was the common practice at the time and was authorised by Term 14 on the licences.  Lot 66 RN341 with an alluvial area of 29.1 hectares received 51 megalitres and Lot 65 RN341 with an alluvial area of 46.15 hectares received 81 megalitres.

In a letter to WR and DM Cahill's solicitors dated 6 December 1988 the announced allocation was stated as 51 megalitres.  An announced allocation notice for the 1989/90 water year was endorsed with an announced allocation of 51 megalitres and an original allocation of 93 megalitres.

A licence was issued to WR and DM Cahill on 6 February 1989.  This licence was not endorsed with a nominal allocation and expired on 30 June 1990.

The preliminary issues discussed

Before moving to consider the grounds of appeal, it is appropriate to deal with the preliminary issues.

First, the right of a person to appeal against a decision of the chief executive with respect to an application for the renewal of a licence is conferred by the Act. An officer cannot confer or withdraw that right.

Second, the right is conferred on a "person aggrieved" by a decision of the chief executive.  In this case there is a real doubt whether the appellants are persons "aggrieved" in that sense.  The expression was recently considered by the Court of Appeal in Stevenson v Wenck, another case involving the Act. The issues in that case were different from the issues in this case Court, but the following statements by the Court are apposite here.

"It will be noted that the remedy is available to a person "aggrieved by a decision" ... A useful analysis of the history of English authority on the meaning of "person aggrieved" is to be found in Cook v Southend-on-Sea Borough Council [1990] 2 QB 1, particularly at 16-19, where the most recent cases are dealt with. One of the two main cases mentioned is Attorney-General (Gambia) v N'Jie [1961] AC 617 at 634 where it is stated that:

"The words `person aggrieved' are of wide import and should not be subjected to a restrictive interpretation.  They do not include, of course, a mere busybody who is interfering in things which do not concern him:  but they do include a person who has a genuine grievance because an order has been made which prejudicially affects his interests."

The other decision, that of the House of Lords in Arsenal Football Club Ltd v Smith [1979] AC 1 includes the following statement by Viscount Dilhorne (at 27):

"While it is true that words in the English language take colour from the context in which they are used, I see nothing in the subsection or in the remainder of the Act to warrant giving to the word `aggrieved' any meaning other than its ordinary natural meaning. To be `aggrieved' a person must be affected by the matter of which he complains."

See also Day v Hunter [1964] VR 845 as to the meaning of "person who feels aggrieves".

The better view is that the expression "aggrieved by a decision" should be given its natural meaning ...." ((1995) 87 LGERA 409 at 414-15).

Even on a broad reading of the expression, it is hard to see how, in light of the evidence, the appellants are persons "aggrieved" by the chief executive's decision.

Third, the substantive decision to reduce the allocation of water to the subject land (Lot 66) and adjacent land (Lot 65) was made in 1987 after proper procedures had been followed, including an interview with the then owner of the land.  It seems that the interview prompted the change from a reduction to 7 megalitres to a reduction to 132 megalitres for the combined area of the land.  The allocation was distributed proportionately when the appellants purchased Lot 66. This Court cannot review the 1987 decision.

Fourth, in the absence of detailed argument on the point and because it is not necessary to do so in this case, I make no ruling on the submission that the previous owners of the subject land had no right to appeal against the reduction in water allocation.  I note, however, that the Water Act 1926-1986, (particularly Part VII dealing with Artesian and Sub-Artesian Wells and Bores) conferred no express power to appeal to the Land Court against a decision of the Commissioner of Water Resources to impose terms, limitations and conditions on licences for such wells and bores. That part of the Act can be contrasted with the licensing requirements for works other than works provided for in Part VII and the appeal rights in sections 11 and 12 of the Act.

In light of the matters raised by Mr Grealy, it would be possible to dismiss the appeal without turning to the merits of the case.  However, as those other matters were not raised until evidence had been received from both sides and, more importantly, because the Cahills are clearly concerned about what they consider to be an unjust situation, it is appropriate to deal with each of their grounds of appeal.  The grounds will be considered in the order in which they are listed in the grounds of appeal.  Detailed documentary evidence was provide to the Court and to each party.  It is not necessary to do more than summarise that material in what follows. 
The grounds of appeal

1.The relativity between the subject allocation and other allocations in the immediate vicinity is wrong having regard to:

(i)comparison of area of adjacent properties;

(ii)comparison of alluvium available on adjacent properties;

(iii)comparison of water usage on those properties.

The respondent acknowledged that allocations of water are not based on the relative areas of properties, the relative areas of alluvium on properties or relative levels of water usage of properties.  It was explained that water in the Callide Valley was originally allocated on application.  The issue of allocations was development orientated and was on a "first come first served" basis.  Any application must be investigated and an inquiry made into:

"the availability and sufficiency of water to satisfy the requirements of licensees and the applicant;

the effect that granting of the application will have or is likely to have on the requirements of owners of neighbouring land and licensees."

There has not been any provision in the legislation to withhold allocation for future landowners nor has there been any attempt to do so.

The vast majority of the groundwater stored under Lot 66 RN341 is in the alluvial deposits.  This is also the only area where irrigation supplies would be obtained.  When looking at the available water, the size of the property is therefore not important.  It is the area of alluvium on the property which is important.

There are several properties located on the alluvium in Section 2B which have no allocation.

If water was allocated strictly on the basis of area of alluvium, and if allocations were made by reference to annual safe yield or to nominal allocations, the appellants would be entitled to much less than 51 megalitres.  The area of Section 2B is approximately 5,640 hectares, and all of it is alluvial deposits.

The calculations are as follows:

(a)Section 2B has an annual safe yield of 3,000 megalitres, or 0.53 megalitres per hectare.  The appellants' alluvial area is 29.1 hectares.  If allocations were issued on alluvial area they would be entitled to only 15.5 megalitres. 

(b)The total of nominal allocations in Section 2B is 5,773 megalitres.  This is an issued nominal allocation of 1.02 megalitres per hectare of alluvium or 29.7 megalitres for the appellants.  The Cahills' nominal allocation equates to 1.75 megalitres per hectare. 

In summary, the appellants have been issued with a greater nominal allocation relative to the area of their alluvium than Section 2B landowners as a whole and equal to, or more generous than six out of the seven adjacent landowners.

Of the six adjacent properties with allocations, the majority have used a substantial percentage of their announced allocation in the last three years.  All these properties have had their allocations reviewed under the same guidelines as the appellants.  Their waterworks licences have been issued with the amended nominal allocations.

As mentioned earlier, most water is extracted in the lower area of Section 2B.  This lower area is highly reliant on down valley flow to supply their irrigated area.  Any increased groundwater extraction in the upper areas would result in a reduction in reliability of supply to these existing licensed users.

2.Water allocations to non-users should be applied to bona fide users.

The appellants point to allocations of water to neighbouring blocks which far exceed the potential demand for and use of the water on that land.  Indeed they state that there are 100 megalitres allocations to nearby blocks where water is not used.

This ground of appeal assumes that water notionally allocated to non-users is available for allocation to users.  That is not the case.  Rather, the evidence shows that over the past decade efforts have been made to reduce the substantial over commitment of water in Section 2B.

The waterworks licence which is the subject of this appeal carries Term No 2.200A which states: "The licensee, after installing the bore, shall to the satisfaction of the Chief Executive beneficially use the water which is entitled to be withdrawn under this licence."  The respondent has the authority to ensure that entitlements are beneficially used and can withdraw non-beneficially used entitlements.

Although the 1987 review saw a greater reduction of allocations to non-users than to bona fide users, the amounts of the reduced allocation could not be distributed to bona fide users because the total water resource was, and still is, highly overcommitted.  In other words, because the safe yield is less than the total nominal allocation, any allocation retrieved either by surrender or as a result of further reviews will not be available for redistribution.  Any reduction in allocation simply gives the existing users a greater reliability of supply.

3.The maintenance of the allocation at 51 millilitres is against public interest and in particular:

.prevents the appellants from becoming independently self-employed from the property;

.does not permit the property to be developed to its full potential;

.does not permit the viable expenditure of further capital funds;

.generally inhibits development of the property;

.does not permit the property to be used as a living area when with adequate water allocation it could be;

.does not take into account sufficiently the genuine interests of development of the appellants as against the interests of other users and non users in the district who have allocations.

The appellants have put much effort into improving the productivity of the land by re-establishing grass pastures, ploughing and planting improved pastures, cell grazing, and growing produce from the irrigated area for winter fodder.  They want to develop their land to its full potential and to raise a commercially viable herd of high quality, low cholesterol Blonde d'Aquitane beef cattle.  The 60 or so head of cattle currently on the land require more feed than can be grown with the nominal allocation of water, and the cost of buying in feed in the required quantities is considerably more than the cost to grow lucerne, oats and forage sorghum on their land. 

For health and other reasons, Mr Cahill would very much like to be self-employed full time on the land.  Such a change would, he submitted, improve his quality of life.  He cannot leave his present employment, however, without being able to grow more lucerne and raise about 100 head of cattle.  An enterprise of that size would require an additional allocation of water of the amount sought.

The appellants' case supports an additional allocation in their interests, but it does not support a case in terms of the "public interest" given the present level allocations in Section 2B.

The chief executive is responsible among other things for "the conservation, replenishment, utilisation and distribution of the waters of Queensland".  The total nominal allocations issued and, more importantly, the total use of Section 2B is greater than the safe yield. Any allocation greater than 51 megalitres would result in other existing users having a reduction in the reliability of supply.

All available water was allocated before 1982.  No increases in nominal allocations or new nominal allocations have been issued in Section 2B since that time.  Any proposed development on the appellants' property would be to the detriment of existing users.

4.The issue of allocations as at present does not permit for equable distribution of water resources to provide fairness and justice to all bona fide users.

The respondent does not dispute the correctness of this statement, but points out that allocations were granted on a "first come first served" basis.  When allocating water there was never any intention or attempt to distribute water allocations uniformly to all properties in the Callide Valley.  The resource has been allocated on the basis of sustainable use having regard to the best information available at the time.  No part of the resource has been preserved for possible future use and no allocations have been granted in this section since 1981.

5.Does not permit the growth of new industries nor the growth of new enterprises.

Again, the respondent does not dispute this statement, at least to the extent that more water would assist new industries or enterprises.  Because the water resources are over-allocated, however, additional allocations cannot be made and any new industries or enterprises must utilise existing allocations.  By utilising those allocations, they can plan with reasonable confidence of having a reliable water supply.  If allocations are increased, new and existing enterprises would face the prospect of a diminishing reliability of the water supply and a probable decline in supply.

6.Does not fairly distribute water allocations amongst long term users and prospective new users.

The response to this ground is that, for as long as the total water supply is over committed, the resource must be managed without additional allocations being made.  The 1987 review of allocations was an attempt to reduce allocations towards the safe yield of the section.  While use remains greater than safe yield, there is no allocation to distribute either to long term users or to prospective new users.

Within that constraint, however, allocations are made in accordance with guidelines aimed at achieving fair distribution.  The reviewed nominal allocation was arrived at following consideration of previous investment and water use.  The announced allocation is determined annually on available water supplies and is done uniformly as a percentage of the nominal allocation across the section.

7.Does not promote the most efficient nor productive use of alluvium.

The allocation of water to the subject land under the subject licence cannot be considered in isolation from the total amount of water available in the region and the water allocations made to other properties in the area.  Within the constraints of supply already described in this judgment, it is for landowners to make the most efficient use of the water allocated to them.  An additional allocation to one landowner may result in a more productive use of the alluvium of that property but the additional allocation would have a consequential detrimental effect on the water available for use elsewhere.  So long as the total nominal allocation substantially exceeds safe yield, any increase in allocation must be characterised as an inefficient use of alluvium in the Section.

8.Does not adequately allow for the consistency and reliability demonstrated over many years by the "Smokey Bell" Aquifer.

The appellants point to the Smoky Bell aquifer's ability to provide a consistent flow of water even in relatively dry periods.  They argue that it would suffer no drastic or ill effects if they were to be granted a 93 megalitres allocation.

This ground of appeal must be considered in light of the geology of that part of the Callide Valley and not only the subject land and other properties in the middle to upper reaches of Bell and Smoky Creek where the best areas of recharge are located.  Although recharge occurs in the lower areas of the Section, the areas are dependant on down valley flow from the upper reaches.

The areas of great use are in the lower areas of the Section.  Any increased use in the upper areas of the Section would utilise water which would have flowed down the Bell Creek valley to existing users.  In the long term that will reduce the reliability of supply and result in lower water levels and consequently lower pump rates.

Consistently falling water level trends since 1980 indicate that water extracted on and near to the appellants' land plus down valley flow is greater than the recharge.  In the respondent's submission if this trend is allowed to continue, the area will eventually fail.  To stabilise the water levels, the Department must regulate the amount of extraction.  Any future extraction must, it was submitted, be held at present levels or preferably be reduced.

9.Is in breach of the principles of natural justice.

There was little evidence given to support the contention that the decision was in breach of the principles of natural justice.  If the appellants were contending that they and the preceding licensees were not accorded procedural fairness in the allocation of water, then that contention must fail.  The history of water allocations and the adjustment in allocations in recent years (part of which is summarised earlier in this judgment) show that the Water Resources Commission and its successor made policy decisions and developed guidelines in consultation with local water use groups and involved individual licensees at critical steps in the process.

As noted earlier, the previous owner was informed of an announced allocation of 7 megalitres for Lots 65 and 66 for the 1987/88 water year.  Following an interview, the allocation for the two blocks was raised to 132 megalitres.  Mr Cahill in evidence said that when he purchased the Lot 66 in 1988 he knew of the 51 megalitres allocation, but was unaware of the history of that figure.  A letter dated 6 December 1988 to his solicitors advised that License No 33641 was to expire on 30 June 1990, the announced allocation for both Portions 65 and 66 for 1988/89 was 132 megalitres, and Portion 66 would have an announced allocation of  51 megalitres after distribution based on area of alluvium.  The letter enclosed an application for transfer of license form which was signed by the Cahills and was dated 21 December 1988.  A bore license was issued to the Cahills on 6 February 1989.  It showed an expiry date of 30 June 1990. 

In oral evidence, Mr Cahill offered explanations of why the previous two owners had made little use of the previous water allocations, and argued that he should not be penalised because others had made little use of water in the 5 years before the reduction.  But that does not have any bearing on the decision to renew his licence.   Mr Cahill signed an application dated 4 May 1990 for renewal of the licence with a nominal allocation of 51 megalitres.

The only possible support for this ground of appeal involves a 1990 letter and a 1991 newspaper advertisement.  A letter dated 15 November 1990 was sent to the Cahills by the District Engineer of the Water Resources Commission.  The letter described the intention to adopt a system of formal, nominal allocations of water which would be printed on licences, and attached a document "Future Directions, Callide Valley Irrigation Project".  The letter concluded:

"Should you wish to discuss levels of allocation or other matters detailed in the "Future Directions" document with Commission officers, I would invite you to contact the Biloela office of the Commission on telephone [phone] and make an appointment to allow such discussions to take place.  Please note the limitation on the timing of interviews and ensure that you avail yourself of the opportunity to explore any issues should you so desire."

The "Future Directions" document nominated 28 February 1991 as the final date for discussions on special circumstances which may vary landholders' allocations, and nominated March 1991 as the time when there would be formal advertising of the nominal allocations including varied allocations.

A notice published in the Central Telegraph on 8 May 1991 listed proposed nominal allocations of water in the Callide Valley.  It included  reference to 33641 WR & DM Cahill with 51 megalitres.  The notice concluded:

"Written objections to the granting of these allocations are to be made to the District Engineer at the above address.  The closing date for objections from Landholders within 0.5 kilometres of the affected lands is 29.5.91.  Objectors must state their property description and grounds for objection.  Any inquiries on this matter can be directed to the Water Resources Commission at phone 922088 in Biloela."

Mr Cahill said that he had no recollection of receiving the 1990 letter and could not find it.  He also said that he did not see the 1991 newspaper notice. Mr Cahill did not dispute that the letter had been sent or that the notice had been published.  In all the circumstances, the Commission took reasonable steps to give licensees (including the Cahills) an opportunity to explain any special circumstances applying to their properties or to object to the allocation.  For whatever reason, the Cahills did not avail themselves of those opportunities.  There was no lack of natural justice then, nor was any demonstrated at the time of the relevant renewal of the licence.  The Cahills applied for renewal at the nominated amount of 51 megalitres. They did not have a legitimate expectation to an allocation greater than 51 megalitres.  There was no breach of natural justice.

10.Does not adequately consider the industry, enterprise and developmental intentions of the appellants as compared with other users.

It is apparent that in the present water management phase, the overriding concern of the respondent is to attempt to maintain appropriate water levels so that licensees can use the amounts to which they are entitled without jeopardising the enjoyment by others of their entitlements.  Thus, in granting a nominal allocation of 51 megalitres (or some greater quantity) to the appellants, the respondent has to consider the effect which that grant would have on the appellants and on the licensed owners of neighbouring land.

The respondent recognises and appreciates the appellants' desire to further develop their property. The decision on the amount of the allocation, however, was made in keeping with the provisions of the Act, and the water allocation policies and management guidelines for the Callide Valley which (as noted earlier in these reasons) have strong community endorsement.

Conclusion and order

The history of water allocation in the Callide Valley (including allocations to the subject land), the present estimates of the availability of water in the Valley, the statutory scheme governing the decision making process by the chief executive, and the circumstances in which this case was brought, are such that the appeal must be dismissed.  As Mr Grealy submitted, even if the Land Court can entertain the appeal, the Court should not interfere with the terms of the Waterworks Licence No 22641.  The Cahills did not have a legitimate expectation to an allocation greater than 51 megalitres.  The respondent acted reasonably in accordance with the duty to preserve the water resources of the State by establishing a scheme based on rational criteria.  The respondent was entitled to adopt and abide by proper guidelines.  This decision is consistent with the decisions of the Land Court in Moir v Commissioner of Water Resources (1992) 14 QLCR 125 (approving a reduction in water allocation) and in Hicks v Chief Executive, Primary Industries Corporation A93-13, decision of Land Court dated 6 July 1993, unreported (confirming a decision not to grant a waterworks licence).

On either procedural or substantive grounds, the appeal must fail.  The result will  no doubt be a disappointment to the appellants who have invested time, effort, capital, hopes and aspirations into their property and who want to increase their allocation of water to realise the full potential of the land.  They look with mixed feelings at other properties in the district and wonder how it is that, by a series of historical events beyond their control (and, until recently, outside their knowledge), they are limited in what they can do on the land. 

It is clear, however, that when they purchased the property the appellants knew of the 51 megalitres allocation.  They run an enterprise which is viable with the available water.

It may be conceded that the increase in water allocation sought by the appellants is not unreasonable having regard to the use to which their land can be put.  But the reasonableness or otherwise of the amount for that purpose is not the determinative criterion. 

The information available to the respondent indicates that for some years past the amounts of water allocated have exceeded the recharge in the area.  The situation is likely to continue into the immediate future.  In other words, there is no more water to allocate. It is likely to be many years before any reduction in the allocation to other non-users will result in amounts of water being available for additional allocation.  

Having regard to all the facts in this case and the legislative regime, including those sections of the Water Resources Act 1989 which set out the responsibilities of the chief executive, I can see no reason to vary or revoke the decision of the chief executive.

Consequently, the appeal is dismissed and the decision of the chief executive to renew Waterworks Licence No B33641 with a nominal allocation of 51 megalitres is confirmed.

GJ NEATE

MEMBER OF THE LAND COURT