Gales Holdings Pty Ltd v Tweed Shire Council - [2011] NSWSC 1128

Supreme Court

New South Wales

Medium Neutral Citation: Gales Holdings Pty Limited v Tweed Shire Council [2011] NSWSC 1128
Hearing dates: 15,17,and 21 February 2011; 2, 3, 4, 7, 8, 9, 10, 11, 14, 15, 18 March 2011; 4, 5, 6, 7, 8 April 2011 (written subs 10 May 2011)
Decision date: 21 September 2011
Jurisdiction: Equity Division
Before: Bergin CJ in Eq
Decision:
Nuisance established - plaintiff entitled to damages

Catchwords:
[NUISANCE] - stormwater runoff onto plaintiff's land - whether unreasonable interference with enjoyment of the land - land in undeveloped state - whether drainage inadequate and caused wetting up of the land causing harm with consequence of invasion of protected species of frogs

[STATUTORY DEFENCES] - whether Civil Liability Act 2002 applies - whether defendant acted in good faith - whether defendant's conduct justified or excused
[DAMAGES] - whether mandatory injunction or whether damages an adequate remedy
Legislation Cited: Civil Liability Act 2002
Environmental Planning and Assessment Act 1979
Environment Protection and Biodiversity Conservation Act 1999 (Cth)
Local Government Act 1993
National Parks and Wildlife Act 1974
Protection of the Environment Operations Act 1997
Roads Act 1993
Threatened Species Conservation Act 1995
Cases Cited: Bamford v Turnley (1862) 3 B. & S. 66
Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660; [2005] HCA 46
Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29
Buckle v Bayswater Road Board (1936) 57 CLR 259
Cattanach v Melchior (2003) 215 CLR 1; [2003] HCA 38
Don Brass Foundry Pty Ltd v Stead (1948) 48 SR (NSW) 482
Duke of Leeds v Earl of Amhurst (1846) 2 Ph 117
Gales Holdings Pty Ltd v Minister for Infrastructure and Planning and Anor [2005] NSWLEC 617
Gales Holdings Pty Ltd v Minister for Infrastructure and Planning [2006] NSWCA 388
Gales Holdings Pty Limited v Tweed Shire Council [2006] NSWLEC 85
Gales Holdings Pty Limited v Tweed Shire Council [2006] NSWLEC 212
Gales Holdings Pty Limited v Tweed Shire Council [2008] NSWLEC 209
Hargrave v Goldman (1963) 110 CLR 40
Hill v Van Erp (1997) 188 CLR 159
Leakey v National Trust for Places of Historic Interest or Natural Beauty [1980] 1 QB 485
Melaleuca Estate Pty Ltd v Port Stephens Council (2006) 143 LGERA 319; [2006] NSWCA 31
Mid Density Developments Pty Limited v Rockdale Municipal Council (1993) 44 FCR 290
North Sydney Council v Roman (2007) 69 NSWLR 240; [2007] NSWCA 27
Orr v Ford (1989) 167 CLR 316
Overseas Tankship (UK) Limited v Miller Steamship Company Pty Ltd ("Wagon Mound (No 2)") [1967] 1 AC 617
Owners Strata Plan 4085 v Mallone (2006) 12 BPR 23,691; [2006] NSWSC 1381
Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278
Pride of Derby and Derbyshire Angling Association Ltd v British Celanese Ltd [1953] 1 Ch 149
Quick v Alpine Nurseries Sales Pty Ltd [2010] NSWSC 1248
Roberts v Rodier (2006) 12 BPR 23,453; [2006] NSWSC 282
Robson v Leischke (2008) 72 NSWLR 98; [2008] NSWLEC 152
Sedleigh-Denfield v O'Callaghan [1940] AC 880
Southport Corporation v Esso Petroleum Co Ltd [1954] 2 QB 182
Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59
Sutherland Shire Council v Becker (2006) 150 LGERA 184; [2006] NSWCA 344
Sydney Water Corporation v Turano (2009) 239 CLR 51; [2009] HCA 42
Torette House Pty Ltd v Berkman (1940) 62 CLR 637
Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479
Walter v Selfe (1851) 4 De G. & Sm. 315
Willoughby Municipal Council v Halstead (1916) 22 CLR 352
Texts Cited: Clerk & Lindsell on Torts, 19th Ed. (Sweet & Maxwell, London)
Dominic Villa Annotated Civil Liability Act 2002 (NSW) (2004, Law Book Co)
Category: Principal judgment
Parties: Gales Holdings Pty Limited (Plaintiff)
Tweed Shire Council (Defendant)
Representation: TF Robertson SC/M Green (Plaintiff)
SR Donaldson SC/S Glascott/N Broadbent (Defendant)
Allens Arthur Robinson (Plaintiff)
DLA Phillips Fox (now DLA Piper) (Defendant)

File Number(s): 2005/261912

Judgment

The town of Kingscliff is on the Pacific Ocean coast in northern New South Wales. The Tweed River is to the west of the town and flows approximately parallel to the coast to meet the Ocean just north of the town. In the last thirty years Kingscliff has grown from a small beachside community to a well-developed seaside resort. Its inhabitants include both permanent residents and holidaymakers. Another inhabitant of the area is the Wallum Froglet, the endangered species Crinia tinnula , the presence of which has added complexity to the dispute between the parties to this litigation. Since 1974 the plaintiff, Gales Holdings Pty Limited, has been the registered proprietor of approximately 27 hectares of undeveloped land in Kingscliff (the Land) that is in the local government area of the Tweed Shire Council, the defendant.

Background

The plaintiff's claim against the defendant, described in detail later, is for damages in nuisance. Although the circumstances relied upon span more than 30 years, the nuisance alleged by the plaintiff is that since 1994 the defendant has conducted itself so as to cause or allow untreated and polluted stormwater runoff to discharge directly and indirectly via the defendant's closed pipe system, roads, kerbs and gutters and the stormwater outlets from the local catchments onto the Land and to prevent and obstruct stormwater passing and flowing away from the Land. It is not seriously in issue that since 1994 there has been an increase in the amount of stormwater runoff flowing onto the Land. However the parties are at issue in relation to a number of the specific claims the plaintiff makes against the defendant (referred to later) and in particular whether the presence of the stormwater runoff on the Land constitutes a nuisance.

The plaintiff claims that one of the foreseeable consequences of the increase in the levels of stormwater runoff on the Land as a result of the defendant's conduct was the occurrence of ephemeral ponding of water for periods that would result in the establishment of a habitat suitable for Wallum Froglets with the foreseeable further consequences that the Wallum Froglets would be attracted to and breed in that habitat and that the plaintiff would lose that portion of the Land for development and have to bear the burden of maintaining a habitat for the Wallum froglets. The expression "Wallum Froglet habitat" has been used in differing ways in the proceedings. It has been used to describe the physical home or habitat of the Wallum Froglet. It has also been used to describe the mix of vegetation and other environmental factors, including ephemeral ponding, to which Wallum Froglets are attracted to live and breed.

The Land

The Land is within the green boundary line in the photograph in Schedule A (Ex A) to this judgment. Turnock Street dissects the Land and the issues in the proceedings have been addressed by reference to parts of the Land being either to the north or the south of Turnock Street. Pearl Street and Kingscliff Street are to the east of the Land and Quigan Street is to the south of the Land. Turnock Street meets Elrond Drive to the west of the Land at a roundabout. Elrond Drive runs in a north-westerly direction along the south western corner of the Land north of Turnock Street. The western boundary of the Land north of Turnock Street abuts the eastern boundary of a housing estate known as "Noble Park Estate" (NPE). The northern boundary of NPE is relevant to what has been referred to as the "Northern Drain". To the north of the Land are properties referred to in the proceedings as the "Nursing Home" or "Nursing Association" and the "Bowls Club".

Prior to the 1990s the drainage of the Land and of the Kingscliff area generally was as depicted in Schedule B (Ex B) to this judgment. Stormwater drained from the Land to the Tweed River via the Northern Drain, the Eastern Drain, the South Westerly Drain, the Natural Watercourse and the Chinderah Drain.

The Land is zoned 2(c) under the Tweed Local Environmental Plan 2000 (LEP 2000), the primary objectives of which are to identify land for urban expansion and to ensure its optimum utilisation consistent with environmental constraints and the need to minimise residential landtake. The secondary objectives of LEP 2000 are to allow associated non-residential development to ensure that sensitive environment areas within the Zone are protected from adverse impacts of developments and to enable planning flexibility to achieve the other objectives of the Zone by means of detailed guidelines in a development control plan. One of the objectives of LEP 2000 is to "promote development that is consistent with the four principles of ecologically sustainable development" identified as: the precautionary principle; inter-generational equity; conservation of biological diversity and ecological integrity; and improved valuation, pricing and incentive mechanisms.

The defendant is able to grant consent to development only if it is satisfied that it is consistent with the primary objective of the Zone within which the proposed development is located; if it has considered those other aims and objectives of LEP 2000 that are relevant to the development; and if it is satisfied that the development would not have "an unacceptable cumulative impact on the community, locality or catchment that will be affected by its being carried out or on the area of Tweed as a whole".

The Land was first acquired by Dr Harry Segal (a director and controlling shareholder of the plaintiff) and his wife in 1969. It was transferred to the plaintiff in 1974. Dr Segal's son, Stephen Segal, has been a director of the plaintiff since 1977 and assumed the management of the Land from the late 1990s.

The Land was cleared of large vegetation in the 1970s and subsequently used for grazing cattle until the 1990s and thereafter for agistment of horses. During the period from the 1970s through to the late 1990s Dr Segal walked over the Land from time to time to check on the cattle and/or the fences. At other times he would observe the Land from the top of the hill south of Quigan Street from which he could see the whole of the Land. Dr Segal was never restricted from walking over the Land by any flooding nor did he observe it to be overly moist, except for one area below the Kingscliff hill on the south eastern edge of the Land near Quigan Street.

The plaintiff read a number of affidavits of witnesses who had made observations of the Land during the period from 1970 to the late 1990s. That evidence was unchallenged. Between the 1970s and the early 1990s Peter Gray managed cattle on the Land and accessed it generally on horseback but also by foot, tractor and utility. His evidence was that he never experienced vehicles being bogged nor did he observe any inundation of water except after certain flooding events. After a flooding event the water level always returned to normal, meaning that the drains on the Land were between approximately half and three quarters full, depending on the tide. Mr Gray observed that the vegetation was the same as the vegetation on surrounding land. It was mostly low-lying scrubby vegetation such as bottlebrush and small trees.

Between 1971 and the 1990s Verlie Moodie walked on the Land regularly to collect cow manure for her garden and/or for leisure and exercise. Mrs Moodie's evidence was that the Land was a large open space with a few scattered trees. After rainfall some of the Land was damp and moist but it was never sludgy or drenched with water. Mrs Moodie could not recall any occasion on which the Land was ponded or submerged with water.

In 1978 Gil May travelled on an "east/west road to the main Chinderah north/south drain". He then "went into a small boat, a duck punt", up a drain "which went east/west". He went up that drain "about third of a kilometre". Mr May referred to this drain in his evidence as the "northern east/west drain". He described it as a natural watercourse that had been dug to make it deeper. It was about 2 to 3 metres wide when full of water and about 1.5 to 2 metres deep in a king tide. The banks of the drain were covered in grass, sedge and native plants. It was lined with mangroves near the intersection with the Chinderah Drain. The last time Mr May went fishing in the northern east/west drain was in 1991 when it was in much the same condition as in 1978. The water in the drain was at least waist deep. There was no cross-examination of Mr May and it is probable that the northern east/west drain that he described in his evidence is the Northern Drain.

Mr May observed acacias on the north eastern side of Lots 11, 12 and 13 of the Land. There was a wet patch in Lot 12 north of where Turnock Street was later constructed in which Mr May observed that there was a two to three metre section with a sandy bottom where the water would go up to "just below your knees". Mr May observed that it was a natural depression and was grazed by cattle with clusters of small trees and patches of sedge.

Catherine Boyd who has lived in Pearl Street, Kingscliff since the 1950s gave evidence of observing cattle grazing on the Land from the 1970s to the 1990s. Mrs Boyd walked over the Land during that period on a weekly basis for "leisure". Mrs Boyd did not observe any parts of the Land being "wet, flooded or submerged". She observed wallabies and kangaroos and "lots of" small trees. Mrs Boyd also gave evidence that about once a year, the local fire brigade would practice their fire management skills on the Land.

Reginald Goodwin worked on the Land in 1990 and 1991 spraying herbicide on groundshell bush in Lot 10. Mr Goodwin brought a tractor and spraying equipment (that together weighed approximately 6 tonne) in the back of an 11 tonne tip truck which he drove through the Land. He then unloaded the tractor, completed the spraying and loaded the tractor back onto the truck and drove back through the Land. Mr Goodwin said that the ground was "rock solid" and he never had any trouble with the truck or the tractor becoming bogged. At this time he observed approximately 30 horses on the Land.

After the construction of Turnock Street in 1997 Mr Goodwin returned to the Land and began "slashing" the Land both north and south of Turnock Street. He slashed the Land at least once a year. Since the construction of Turnock Street the tractor "got bogged continuously". Mr Goodwin had to use two tractors, "one tractor to pull the other tractor out", because the Land is "so soggy now". Mr Goodwin noticed that after the construction of Turnock Street the vegetation in Lots 11, 12 and 13 of the Land had become thicker with "more reedy types of grass".

Early drainage problems

On 31 July 1974 Dr Segal wrote to the defendant advising that he felt that the defendant must accept responsibility for the large drains which "open directly" onto the Land that were "causing severe localised drainage problems".

On 4 August 1974 Les Noble of Les Noble Pty Limited, Auctioneers, Real Estate Agents and Valuers, owner of the adjoining property to the west of the Land, wrote to Dr Segal in the following terms:

The so-called swamp on your property, which is at the back of our property, is only brought about by the fact that the now existing drains in the property have never been cleaned out for the past twenty years and if you feel like doing that, also in the new part, it would improve it immensely.

On 27 August 1974 the defendant wrote to Dr Segal in response to his letter of 31 July 1974 and advised that the defendant did not "at present" have sufficient funds to consider drainage through the Land. That letter included the following:

Whilst it is accepted that drainage from Kingscliff streets discharges onto the property, the area, of course, is a natural water course or collection area. The matter may be further considered when development proposals in the areas are considered.

On 5 November 1974 Mr Noble wrote to Dr Segal advising him of his recent discussions with some drainage contractors and suggested that Dr Segal spend up to $600 on drainage. On 3 December 1974 Mr Noble advised Dr Segal that he had engaged the drainage contractor and that when the work was completed "you will be looking at a different property". Dr Segal gave affidavit evidence that he did not understand why it was that Mr Noble used the expression "swamp" in his correspondence to describe the Land.

Proposal to develop the Land - 1978

In 1978 the plaintiff submitted a proposal to develop the Land. The defendant advised the plaintiff that detailed flood and environmental studies would have to be completed. The plaintiff offered to contribute to the cost of the flood studies, however in December 1978 the defendant advised the plaintiff that funds had been allocated for such studies and it would not be necessary for the plaintiff to contribute to the cost of them.

Growth Plan

In 1980 the plaintiff instructed Burchill & Partners Pty Limited, Consulting Engineers and Planners, to provide a report in respect of a proposed "Growth Plan" for Kingscliff. That proposal was to develop not only the Land but also Mr Noble's property. The report noted that the Land was subject to "inundation in the 1:100 flood in the Tweed River System, to a depth of average 2.0 metres" and that up to that time it had been omitted from planning for new development for that reason. The report included the following:

If a practical and economically viable method can be found of overcoming the flood factor, by filling and draining, then the land would be available to serve the desired use as the preferred future development zone for Kingscliff.

The report also noted that the combined area of the properties was approximately 75 hectares, about one half the area of the then existing township. It also noted the demographic phenomenon of increasing migration from major cities to provincial coastal towns with the most desirable climates and environments and it was suggested that Kingscliff would attract an overspill of the growth element in the Gold Coast. The report also noted that there was too little existing stock and it was essential to stimulate new development rather urgently. The report made reference to the Draft Tweed Coast Plan and included the following:

The Draft Tweed Coast Plan showed that there were no flora and fauna species on our clients' lands which require or warrant protection.

The Burchill & Partners report was submitted to the defendant. The defendant advised the plaintiff that it had considered the proposal for the Growth Plan at its meeting on 17 December 1980 and had resolved to prepare a draft Local Environmental Plan. It also advised that a detailed report was required on the effect of excavating and filling the flood plain and that an environmental assessment needed to be made of the impact of the proposed artificial lakes that formed part of the Growth Plan.

On 12 March 1981 the defendant advised the plaintiff that it was necessary for the Growth Plan to demonstrate how flooding would be overcome "including the determination of pumping or other facilities necessary to remove local stormwater from within the protected area" and to identify the drainage paths of existing Kingscliff urban development and the effect of the proposed works on such existing usage. It is not clear to what the expression "protected area" referred but it was not suggested that it has any significance to the issues in this litigation. The plaintiff met with the defendant during 1981 and was advised more than once that "not a grain of sand can be moved until drainage studies are done and these drainage studies permit filling to occur".

Between the early 1980s and the early 1990s the Land was not developed nor was the Growth Plan adopted. However it is apparent that the defendant worked on developing a draft Development Control Plan.

Cessation of cattle grazing

Some time in the 1990s the plaintiff discontinued grazing cattle on the Land because of reports of the presence of a pack of dogs that were killing newborn calves. There were also reports of vandalism on the Land. Subsequently the plaintiff made a decision to permit the agistment of horses on the Land.

Development Consent to NPE - December 1992

On 9 December 1992 a Development Consent was issued to Baclon Pty Ltd (Baclon) for the development of Mr Noble's land to the west of the Land into the NPE. The proposed development included the construction of a lake to the west of NPE and west of Elrond Drive. The Eastern Drain (on the boundary between the NPE and the Land) was to be filled in and a batter wall was to be created onto the western boundary of the Land.

The conditions to the Development Consent included the following:

36. The proposed subdivision is to be filled to RL 3.5m AHD in accordance with the approved plans.

...

40. The Engineer Drainage Design plans shall address the 5 year discharge from the ultimate fully developed upstream contributing catchment and any foreshadowed development in upstream catchment which will contribute to the runoff through this development.

...

43. A drainage overflow path to accommodate Q 100 flows shall be retained along the northern boundary of the land until such time as the drainage strategy is resolved. Details to be shown on the engineering plans.

The drainage overflow path along the northern boundary referred to in condition 43 to the Development Consent was necessary because one of the streets in the NPE, Lorien Way, was to be extended across the Northern Drain.

Murray vegetation mapping -1992

In June 1992 Andrew Murray, a botanist and vegetation ecologist, surveyed the Land as part of a comprehensive fine scale vegetation mapping project for coastal lands in the Tweed Shire. Mr Murray observed "shallow standing water" over a large part of the Land at this time.

DCP 9 - 1993

The Tweed Development Control Plan No 9 (DCP 9) (which applies to the Land) came into force on 7 October 1993. Its purpose is, inter alia , to provide detailed guidance to developers within the area and to indicate the defendant's policies with respect to development in the area. Matters pertinent to this litigation in DCP 9 include: (1) A water quality report and water quality monitoring program is required for all applications for filling and subdivision; (2) Filling of land for residential development is to be 3.4m AHD; and (3) Applications for filling are to include information demonstrating that fill will have no adverse effects on flooding or drainage characteristics of nearby land. DCP 9 also includes a section entitled "E. Drainage & Water Quality Management", the objectives of which include the prevention of "flooding and stormwater damage to the built and natural environment". It is noted in the DCP that subdivision applications will be refused unless it is "proved that the land is capable of development without adverse effects on flooding or drainage elsewhere".

1994 complaints

Baclon's consulting engineers for the NPE development were Martin Findlater & Associates Pty Ltd. On 15 March 1994 Mr Henley of the defendant met Mr Findlater to inspect the work at NPE. In a note made of that meeting on 17 March 1994 Mr Henley wrote:

I am not very happy with the connection from the end of new works to the old drain. I have agreed with Martin Findlater outflow improvements may be able to await the moving of machinery on site for next stage. Either the outlet drain is to be widened or the overland flow path is to be cleared and levelled. This could be considered as part of maintenance but I advised Martin that if we have any problems I will require that he immediately complete improvements to the outflow channel.

On 21 April 1994 the consulting engineer for the Bowls Club, Ian Hill of Ian Hill & Associates Pty Limited, wrote to the defendant advising that he acted for both the Bowls Club and the Nursing Association and that he had recently inspected the rear of properties north of NPE. The letter included the following:

The temporary diversion drain, that was constructed around the subdivision at the time of the lake construction contract, has been filled in as has also the union drain that followed the east-west boundary within the Noble Park property.

A recent inspection revealed that water is ponding along this latter boundary line, and little cognisance appears to have been taken of the upstream catchment of Pearl Street, Kingscliff Street, the land between these streets and the subdivision.

Mr Hill advised that he had spoken with Mr Findlater and requested the engineering drawings so that he could make an assessment of the position. On 27 April 1994 the defendant wrote to Mr Hill and requested that he liaise with Mr Findlater in relation to the resolution of any future problems.

On 17 June 1994 Mr Hill wrote again to the defendant advising that he had completed the investigation of the drainage at the rear of the properties and reported as follows:

We do not believe that it is this firm's responsibility to resolve the problem as the works associated with the subdivision, which clearly prejudice our Client, were approved and supervised by Council.

You are aware that Council's drainage, from Kingscliff and Pearl Streets, discharge onto the Club property and this was extended at the Club's cost, with no assistance from Council, across the property to the open drain that ran along the northern boundary of Baclon Pty Ltd property to the Kingscliff union drain. This drain is shown as lateral Drain B in the draft report on Kingscliff Drainage Strategy prepared by WBM Oceanics Pty Ltd and, with Council's permission, has been filled in by Baclon Pty Ltd.

We would appreciate advice as to what remedial action will be implemented before the start of the next wet season.

Warren Report - 1994

In mid 1994 the plaintiff had applied to the defendant for approval for clearing operations to be carried out on the Land in areas that were covered by a Tree Preservation Order. In June 1994 James Warren, a biological and environmental consultant, provided a report to the plaintiff entitled " Flora and Fauna (Section 4A) Assessment ". An assessment under s 4A of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act) determines whether a development will have a significant impact on endangered fauna or their habitat. Mr Warren noted that the Land was still being utilised for horse and/or cattle grazing purposes and he identified a Paperbark forest and a "clump of Wallum bottlebrush" in the southern portion of the Land. Mr Warren referred to a computer check on the local records that had been carried out by the National Parks & Wildlife Service (NPWS) that had identified significant threatened species recorded in the locality. He observed that a number of endangered species "might also be expected to occur in the locality". Although there was mention of the Wallum tree frog ( Litoria olongburensis ), there was no mention of the Wallum Froglet. That survey included the following:

The sites, due to their highly disturbed nature are likely to contain high numbers of Cane toads. These amphibians displace native frogs and are even thought to feed on small native frogs. It is possible, though unlikely, that the site contains Wallum frogs. If the frogs occur it is most likely that they would occur in the perennially wet areas associated with the Paperbark forests.

The Wallum Froglet is a "vulnerable species" under the Threatened Species Conservation Act 1995. It first attained a protected status in 1992 when it was listed as a "Vulnerable and Rare Species" in Schedule 12 of the National Parks and Wildlife Act 1974. If a proposed development would significantly affect a threatened species, the EPA Act requires a species impact statement to be prepared before the application may be considered. The impact of the development on the threatened species must be assessed when determining the development application. It is an offence under section 118A of the National Parks and Wildlife Act for a person to harm any "threatened species" (which includes a "vulnerable species").

WBM Oceanic - 1994

On 10 August 1994 WBM Oceanic Australia (WBM), commissioned by the defendant, produced the "Kingscliff Drainage Strategy Plan" (Ex O) (the WBM Report). The WBM Report documented the development of the drainage strategy for major flooding of the Kingscliff area. It recorded that the need for the Plan had arisen "due to the degree of urbanisation and filling planned for the catchment". Figure 1.1 of the Plan entitled "Kingscliff Drainage Catchment" showed a "Catchment Boundary" that is also depicted in Schedule A to this judgment by the yellow boundary line. WBM reported that the development of a "stormwater drainage strategy plan for the Kingscliff drain" in Figure 1.1 was in accordance with the Development Control Plan No. 9 (DCP 9) for the West Kingscliff area.

Ian Hill & Associates Report

On 14 September 1994 Mr Hill provided the defendant with a copy of a report prepared by his firm entitled "Drainage of Kingscliff Street Site". That report included the following:

3.0 DRAINAGE PATTERNS - 1993

During 1993, the subdivision known as Noble Park Estate was constructed; part of construction involved filling of the site by some 2 m, during which the open drain was filled in and the filling extended across into the Club's land without any further discussions with the Club and without the Club's approval.

At a brief inspection of the Bowls Club site, in February 1994, Mr Hill of this office noted that the drainage path was blocked by filling, including the filling for a roadway from the adjacent Middle Harbour development.

Mr Hill rang the Tweed Council and spoke to Mr John Samuels, voicing concern that no provision had been made for drainage of the land to the north and east of the Baclon development, and was advised that the blockage was only temporary.

An inspection in March 1994, showed that the subdivision filling had been completed; no allowance was made under the roadway for escape of stormwater, and a 1200mm dia concrete pipe had been provided at the corner of the Bowls Club property, which was supposed to carry the stormwater to the west and north of the subdivision.

The report concluded that the 1200mm height was "under capacity" for the Q5 event (being a storm event of a magnitude that occurs on average once every five years) and no provision had been made for the Q100 event; that the design ignored the defendant's drainage strategy for Kingscliff; that the installed drainage system had not been constructed as designed, further reducing the capacity of the system to cater for stormwater runoff; and that as a result, the properties of the Bowls Club and Nursing Association would be subject to a greater degree of flooding than would have occurred prior to the construction of NPE.

After the defendant received the report from Mr Hill and a further letter from the lawyers for the Bowls Club it wrote to Martin Findlater on 31 October 1994 expressing its concerns regarding the Q5 hydraulic capacity of the 1200 diameter pipe and the resulting potential for flooding of adjoining property owned by the Kingscliff Bowls Club. The defendant referred to the WBM Report that indicated a catchment larger than that adopted by Mr Findlater in his design and suggested that this "discrepancy should be clarified".

On 2 February 1995 the defendant wrote to Mr Hill advising him that it had recently held discussions with Mr Findlater "in an attempt to formulate a solution to the problem". The defendant advised that as a result of the meeting it was agreed that Mr Findlater would "submit a number of options" for the defendant's consideration, which it was still awaiting.

Retention Basin Proposal - March 1995

At this stage Baclon was seeking approval for the fourth stage of the NPE development from the defendant. On 1 March 1995 the defendant advised Mr Findlater that no further approvals or consents would be given "until the drainage solution and its funding is agreed upon". That letter included the following:

Given that your original stormwater design did not adequately cater for the Q100 storm event and that Council has no funds for such analysis at this stage, it is intended that Council initiate the analysis at the consultants cost.

On 2 March 1995 the defendant wrote to Mr Findlater in terms that included the following:

The Panel also resolved that any fresh development application will not be determined until the upstream drainage issues are resolved because the approved Part 12 application causes inundation of properties in excess of permissible levels.

On 9 March 1995 Mr Findlater wrote to the defendant referring to verbal advice from the defendant on 8 March 1995 that permission to complete the drainage work through NPE Stage Four would be approved upon the condition that Baclon Pty Ltd requested the defendant to amend DCP 9 and the Section 94 Plan for West Kingscliff. That letter included the following:

In accordance with your instructions we suggest the DCP 9 be amended as follows:

A nominal area of 1 Ha for future multi-purpose open space/flood retention/wet land filter should be reserved east of Noble Park estate. The value of the land shall be incorporated into the drainage and S94 Plan and reimbursed from that plan. Any open space component shall be credited against the passive or active open space requirements for development in the area as appropriate to the use of the land.

Our client is offering this suggestion as an alternative to the proposed 20m wide open channel adjacent to the northern boundary of Noble Park estate. That proposal formed part of WBM Oceanics Kingscliff Drainage Strategy Plan report dated August 1994. Calculations demonstrating the feasibility of the alternative have been supplied to Mr Henley.

Although Mr Findlater did not expressly refer to it, the proposal to put aside an area of one hectare east of NPE was really a suggestion that the Land be used as a retention basin.

On 10 March 1995 Mr Findlater wrote to the defendant in answer to its letter of 1 March 1995 refuting the assertion that the original stormwater drainage design did not adequately cater for the Q100 storm event. That letter included the following:

The drainage for the estate was designed and constructed in accordance with Council's Development Consent for the estate. This is confirmed by the approval of the layout plan, the engineering drawings and the release of the linen plan of subdivision.

Council has now developed a drainage strategy for Kingscliff which is reported by Council's consultant WBM Oceanics. That drainage strategy (dated August 1994) incorporates specific water level controls which were not required under the consent and are a consequence of the study.

To achieve those controls the strategy provides for an open drain at least 20m wide adjacent to our clients northern boundary. Our client is concerned about the practicality of such a drainage ditch. He is also concerned that piped alternatives are expensive and would unnecessarily increase Section 94 Contributions.

We have provided objective alternatives to the drainage strategy and identified corrections that should be made to the model. This work has been carried out at no cost to Council. We are disappointed that Council should consider our comments as an implication that Noble Park drainage is deficient.

Our client has been required to supply work in kind to the value of $586,000. This is for a S94 liability for approved development of less than $200,000. Our client does not intend to provide additional funding other than what is required as a result of reasonable variations to the S94 Plan. Such variations can be adjusted in credits due.

We also confirm that we shall not be contributing to any additional analysis by Council to determine alternatives to their drainage study. We understand from discussions with Mr J. Henley that this will not be required.

On 13 March 1995 the Manager Subdivisions of the defendant wrote to the Director Development Services of the defendant in terms that included the following:

As you will recall, following completion of the early stages of Noble Park Estate it became apparent that a drainage problem existed in relation to the existing developed land upstream of the estate.

Following rainfall, complaints were received from residents; Ian Hill on behalf of the Blue Nursing Service and the Bowls Club in relation to inundation of their properties.

Investigations and discussions between Council officers and Martin Findlater, (consultant for Noble Park) have been continuing for some months, however as the matter had not been resolved, no further consents/releases have been issued for West Kingscliff for about 3 months.

Following further discussions on 7 March 1993 between John Henley, Col Dutton and Martin Findlater, a possible solution was agreed to in principle.

That concept involves:

1. A detention basin in Dr Segals land adjacent to Noble Park Estate;

2. Possible "joint use" of the basin as a water quality control pond;

3. Possible "joint use" of the basin/pond for recreation purposes (ie. passive open space).

To allow for this concept to be formally considered the following approach has been agreed:

1. Martin Findlater will make a formal request to amend Development Control Plan No. 9 and the Section 94 plan (if necessary) to facilitate the proposal;

2. The written approval of Dr Segal, will accompany this request;

There is a high degree of urgency in finalising the Development Control Plan amendments having regard to the interests of Council and the community and therefore it is recommended that processing of the matter be given a high priority.

On 15 March 1995 the Strategic Town Planner of the defendant wrote to the Director Development Services of the defendant in terms that included the following:

The land on which the detention basin is proposed is nominated for medium density housing in the DCP and I think it is highly unlikely that Gales Holdings would agree to its use for any other purpose.

...

I am concerned that a 'quick fix' of the current drainage problem may have implications for drainage and development in the rest of West Kingscliff which has not been evaluated.

On 23 March 1995 the defendant wrote to the plaintiff in the following terms:

DCP No. 9 - West Kingscliff

Following preparation of the Kingscliff Drainage Strategy Plan and investigation of drainage issues it is proposed to recommend to Council that the above DCP be amended as follows:

1. To allow for the provision of a stormwater detention basin of about 1 ha within land owned by Gales Holdings Pty Limited adjacent to Noble Park Estate, generally as indicated on the attached map;

2. To enable the possible "joint use" of the basin as a water quality control pond and passive recreation area.

The plaintiff had retained town planners, Outline Planning Consultants Pty Limited of which Mr Gary Peacock was a director, to assist it with reviewing DCP 9. On 5 May 1995 the defendant wrote to Mr Peacock advising that it wished to work closely with him in reviewing DCP 9. The defendant conceded that DCP 9 required significant review and accepted that Mr Peacock's proposal that a steering committee or working group be established was a positive and sound approach and that he would be invited to participate in such committee or group. Mr Peacock met with the defendant's officers on 30 May 1995 in relation to the roads and drainage infrastructure needs of the West Kingscliff area and their likely impact on the Land. On 22 June 1995 the Council wrote to Mr Peacock advising that it may be possible to reduce the area of the Land affected particularly in relation to drainage and water quality needs. The defendant advised that it could only make an assessment if it had "full knowledge of the future plans" that the plaintiff had for the Land.

The plaintiff, through Outline Planning Consultants, also retained Ray Sargent, a Civil and Structural Engineer, to assist it with assessing the defendant's proposal for the retention basin to be situated on the Land. Mr Sargent met with an officer of the defendant, John Henley, an engineer, in September 1995 and undertook a detailed inspection of the Land for the purposes of assessing the drainage aspects of the Land.

DCP 9 to be amended

On 27 September 1995 the defendant resolved to prepare an amendment to DCP 9 and Contribution Plan No 7 relating to West Kingscliff. In a Council report in support of the resolution it was noted that it had become apparent after the completion of the early stages of NPE that a drainage problem existed in relation to developed land upstream of NPE. It was noted that "a possible solution" involved the construction of a detention basin on the Land and that Baclon had no objection to the proposal. That is hardly surprising having regard to the fact that the proposal imposed all the burden on the plaintiff for the drainage problems created by Baclon's development. The report concluded that the way in which to resolve the drainage problem promptly was to prepare and exhibit amendments to DCP 9 and to make further efforts to obtain the plaintiff's views during the exhibition period.

An internal memorandum of the defendant dated 1 November 1995 records that any further action on the detention basin was to be held in abeyance. It was noted that the plaintiff was "now aware" of the need for a detention basin and the DCP 9 amendment process could be delayed provided that everyone remained aware of the location of the proposed detention basin. It was also noted that if the plaintiff sold the Land there was no mechanism for ensuring that any future owner was aware that one hectare of land should not be filled and should remain available for drainage retardation.

On 2 November 1995 Mr Hill, who by that stage had moved to another firm, Cardno & Davies, wrote to the defendant noting that he had heard nothing in the nine months since he had been advised that the defendant was seeking a number of options from Mr Findlater towards solving the drainage problems. The defendant responded by letter dated 18 December 1995 advising that "agreement has been reached" with Mr Findlater "for the creation of a stormwater/flood retention basin adjacent to the culvert in question". There was no mention of the fact that the proposed retention basin was on the Land rather than on NPE. Nor was there any mention of the fact that the plaintiff had not agreed to the retention basin.

Mr Peacock had been communicating with the defendant in October 1995 in relation to the proposed amendment to DCP 9. On 23 November 1995 the defendant wrote to Mr Peacock advising that there would be no immediate action to proceed with the draft amendment to DCP 9 and observing that as the plaintiff was now "formally aware" of the need for a retention basin it would be necessary to obtain a formal assurance that a prospective purchaser of the Land would be notified that one hectare of the Land should not be filled and had to remain available for drainage retardation. There is no evidence that the request for such a "formal assurance" was ever pursued further or given.

Plans for Turnock Street

It was in late 1995 that the defendant proposed constructing a distributor road that was later to become Turnock Street. It was agreed between the parties that the defendant would make a direct purchase of a portion of the Land at an agreed valuation or provide a credit against future contributions levied against development on the Land under the EPA Act. The defendant had to comply with section 111 of the EPA Act and consider whether the construction of Turnock Street would require an environmental impact statement (EIS) under section 112 of the EPA Act and what other impacts it would have on the environment. The defendant advised the plaintiff that it wished to proceed with an environmental assessment of the proposed activity and requested from Mr Peacock the results of any studies previously undertaken on the site. In late December 1995 the plaintiff provided its consent to the defendant to enter the Land for the purpose of carrying out site survey work associated with the proposed road.

Mr Peacock provided a copy of Mr Warren's June 1994 report to the defendant to assist it with its assessment of the Turnock Street extension. In March 1996 Woodward-Clyde, consulting engineers, put a proposal to the defendant to carry out flora and fauna assessments of the Land including the carrying out of an amphibian survey utilising "call recording and analysis". Woodward-Clyde advised that the call analysis was to be undertaken by an officer of the Queensland Museum and that the frog survey could be most effectively carried out between August and March during rainfall to ensure maximum species identification.

Woodward-Clyde Report - May 1996

In May 1996 Woodward-Clyde produced their report entitled "Flora and Fauna Assessment of a Proposed Road Deviation". The report referred to NPWS records that indicated that certain threatened faunal species could occur either on the site or nearby at various times including both the Wallum Froglet and the Wallum tree frog. The report recorded that sampling efforts had attempted to detect the widest possible range of species utilising a range of methods including call identification, direct observation, Pitfall traps (buckets and drift fences) and Elliott traps. The report included the following:

Neither the Wallum froglet nor Wallum treefrog were recorded during site surveys. Gilmore et al (1986) indicates that both species are particularly sensitive to the alteration of water chemistry and are found only in oligotrophic waters. However, WWC (1995) have recorded the Wallum froglet in a piggery effluent drain suggesting that it is perhaps more adaptable than previously thought. The Wallum froglet was considered most likely to occur along the drain to the south of the roundabout where a number of other frogs were recorded.

Appendix 3 to the Woodward-Clyde report noted that the Wallum Froglet was not recorded during site surveys but that it "may be present" in a drain south of the study area. Appendix 3 also recorded that the effect of the development on the life cycle of the Wallum Froglet was minor in respect of breeding and foraging and there was a nil effect on the migration/movements of the Wallum Froglet.

On 29 July 1996 Ray Sargent & Associates (at this time retained by the defendant) wrote to the defendant enclosing a number of plans showing the "major drainage outlet points for the Turnock Street/Elrond Drive area". Those documents illustrated the situation after the construction of the roadworks "and future site filling works". That letter included the following:

(1) After construction of the deviation road, the low lying areas to the north of the road will drain through outlet 2. This outlet is to be sized to drain the selected design storm over the catchment without causing flooding to existing developed areas. The catchment area is the total of the areas marked A, B, C, D & E (41.64ha).

(2) Area E will ultimately drain to the future open drain and outlet labelled 7 as per DCP No. 9. As the embankment of Lorien Way currently blocks this path, Catchment E needs to be temporarily drained through outlet 2 until the outlet at 7 is opened.

...

(6) Outlet 2 would become redundant if the ultimate scheme is implemented as shown. The design of outlet 2 is indicated on the attached Sketch SK1 and has been based on limiting headwater to a level of 2.1m AHD to avoid flooding of the existing surface level of the proposed Bowling Club for the design event. To compare the culvert sizes detailed below are culvert sizes for 1:100, 1:20 and 1:5 year events:

1:100 3 x 1500 dia

1:20 3 x 1200 dia

1:5 2 x 1050 dia

...

Please advise if the above scheme is acceptable to Council so that the drainage design for the proposed roadworks can be finalised.

The plan attached to the letter, "SK 1", referred to the total catchment area north of Turnock Street as 41.64ha and recorded that three 1500 millimetre pipes would be at point 2 on SK 1. Point 2 on SK 1 is in the area that the Elrond Drive culvert (referred to later) was constructed. The three pipes as suggested in SK 1 were not constructed in that location. The plaintiff submitted that despite the fact that the defendant knew that the Elrond Drive culvert had a catchment area of 41.64ha and required three 1500 millimetre pipes to pass water under that culvert to drain that area, it did not provide three pipes to do so (tr 142).

On 9 August 1996 Ray Sargent & Associates (at this stage retained by the plaintiff) produced a report entitled " Proposed Stormwater Quality Improvement Scheme for West Kingscliff, Tweed Shire" . That report proposed that a "first flush runoff system" be instituted to catch the first flush of runoff from the catchment and retain it in ponds for a sufficient time for the water quality to be improved prior to discharge. The report concluded that the treatment of stormwater runoff in this way would improve the quality of the final downstream water outflow by up to 50%. It also included the following:

This will be a significant improvement on the existing drainage system which contains no formal structures for removing contaminates from runoff apart from sedimentation action within the main drains.

On 23 August 1996 the plaintiff provided its consent to the defendant's development application for the proposed Turnock Street extension.

Follow up of 1994 complaints

On 3 September 1996 Mr Hill resumed communications with the defendant in relation to the problems that he had identified with the 1200mm pipe where the Northern Drain was previously located. He wrote to the defendant on that date advising that he had not had any further information as to the location, sizing or time of construction of the proposed retention basin referred to in the defendant's letter to him of 18 December 1995. Mr Hill advised that a recent inspection showed the inlet to the 1200mm pipe to be restricted by weed growth. He also suggested that with the approach of the wet season his clients (the Bowls Club and the Nursing Home) were concerned that nothing appeared to be happening notwithstanding that concern was initially expressed in April 1994. Mr Hill asked for advice as to the present status of any remedial work.

An internal report from the defendant's Director of Engineering Services presented to the Council meeting of the defendant on 18 September 1996 included the following:

Gales Holdings Pty Ltd

Gales Holdings Pty Ltd are represented by Mr Gary Peacock of Outline Planning Consultants. Mr Peacock has advised that the owners have no urgency to develop this site. This lack of urgency is certainly reflected in the difficulties and time involved in negotiating a purchase.

Agreement was reached with Mr Peacock in February 1996 to have independent valuations undertaken, to be exchanged on completion. However, on completion of Council's valuation Mr Peacock advised that his client had instructed him that Council's valuation would be required before any further action would be considered.

In September 1996 the Bowls Club's solicitor wrote to the defendant requesting information as to whether there was any likelihood of a reasonable engineering resolution of the matters raised by the Bowls Club in relation to the 1200mm pipe.

On 11 November 1996 the defendant wrote to Mr Hill in the following terms:

With reference to your letter of 3 September 1996, I wish to confirm that until filling of the Gales Holdings land proceeds there should be adequate retention area available to satisfy flood drainage in accordance with investigations and calculations by Martin Findlater & Associates.

Prior to any development of the Gales Holdings land the trunk drainage system will have to be resolved and the need for a retention basin at this locality is being addressed in this plan.

On 12 November 1996 the defendant wrote to the Bowls Club's solicitors in terms that included the following:

While the Gales Holding land remains at its present level there should be adequate retention area available to satisfy flood damage in accordance with the investigations and calculations by Martin Findlater and Associates.

Prior to any development of the Gales Holding land the trunk drainage system will have to be resolved and the retention needs in this locality are being addressed in that scheme. Council is fully aware of the drainage needs in this locality. Final resolution of details cannot be predicted at this time as they are largely related to actions by Gales Holdings.

The irresistible inference from this correspondence is that the defendant had concluded that until it was filled, the Land would be used as a "retention area" for flood drainage.

On 24 March 1997 the plaintiff wrote to the defendant enclosing a signed consent form in respect of the permission for the defendant to enter upon the Land for the purpose of constructing Turnock Street. That letter included the following: "Please note that we will need fencing to be erected to ensure that the cattle we run on the property do not escape".

Turnock Street completed

On Tuesday, 9 December 1997 Turnock Street was officially opened.

Proposed application to fill the Land

In March 1998 the plaintiff was considering obtaining development consent for the filling of the Land. A memorandum from Mr Peacock to the plaintiff dated 30 March 1998 included the following:

As Mayor Boyd indicated, you will need to obtain in the first instance Development Consent for the filling of your land.

With this consent in hand, it will then be possible to make separate applications for various forms of development over your land eg. retail, commercial, townhouses, residential flat buildings etc.

Obtaining this consent will then remove any uncertainties over what land can and cannot be developed.

That advice included reference to steps that needed to be taken prior to the plaintiff being in a position to lodge a development application for filling the Land including the development of a Master Plan for West Kingscliff and a Master Drainage Plan. Mr Peacock sought the plaintiff's approval for the engagement of the services of Bill Knobel, a consulting engineer and principal of Knobel Consulting Pty Ltd (Knobel), to assist with monitoring the work of the development of a Master Drainage Study for West Kingscliff and any follow up engineering work, for example landfill, road design, services provision and drainage.

Funding of $21,156 for further studies

On 12 June 1998 the plaintiff agreed to provide funding of $21,156 to the defendant out of a total budget of $25,100 for the preparation of a drainage/water quality study by WBM Oceanic. The plaintiff drew the defendant's attention to its previous undertakings to notify the plaintiff how the proposed drainage system (including the retention basin) would work and that it had not done so. The plaintiff also drew the defendant's attention to the fact that a final decision on the stormwater scheme for the area was still outstanding.

On 21 July 1998 Knobel wrote to WBM Oceanics referring to a site meeting in relation to the West Kingscliff master drainage strategy. Knobel confirmed their concerns regarding drainage at the northern end of the Land adjacent to the Nursing Home and the Bowls Club. That letter included the following:

It would appear from closer inspection that the local drainage ponds behind the new residential development and has no outlet or Q100 overland flow through the adjacent subdivision.

We will be addressing this matter further with Council.

We also request that you examine the requirements for drainage under Elrond Drive and Turnock Street. Major construction has recently been undertaken and the Tweed Shire Council would have the construction records and how any drainage structures relate to your previous study.

The records of WBM Oceanics record a communication with Mr Knobel in which he expressed his concern about the drain behind the Nursing Home and the Bowls Club. Those records also include a record of a phone call to Mr Henley of the defendant which noted that the drain was "a purely hydraulic problem" and that WBM did not need to consider it in their study. WBM records also include a note of a telephone call with Patrick Knight of the defendant on 30 July 1998 that includes the following:

He asked about including the problem drain at the back of the Bowls Club land into the study. I paid an extra $4 to $5000 but told him John Henley had advised to leave this drain alone as it has been the subject of previous investigations & further investigations were not required.

The WBM Oceanics records for 31 July 1998 include notes in relation to a phone call from Mr Knobel as follows:

Problem drain actually has a low flow pipe taking water under filled site & directly to main channel.

Box culverts in place to provide for flow under road (we didn't see them on initial visit with Bill as they were under weeds).

On 3 August 1998 a meeting took place attended by Mr Henley of the defendant, Messrs Peacock and Knobel on the plaintiff's behalf, and representatives of WBM Oceanics. Mr Peacock and Mr Knobel suggested that the defendant reduce the size of the proposed drainage through the Land from 50 metres to 20 metres. It was noted that WBM Oceanics would look in more detail at the land near the Bowls Club and that the plaintiff wished to submit a Development Application for landfill immediately after WBM Oceanics study was completed.

On 10 February 1999 the defendant advised Mr Peacock that the Water Quality Management Study for West Kingscliff was "essentially completed" and provided the basis for more detailed discussions on planning for the Land.

Turf farm litigation

In the late 1990s, probably in 1998/1999, the plaintiff commenced legal proceedings against the defendant to prevent it from proceeding with a turf farm proposal to spread bio solids from a sewerage treatment plant on an area of land adjacent to other land in the area owned by the plaintiff. The plaintiff was successful against the defendant in those proceedings (tr 357).

Wallum Froglet identified

On 7 May 1999 Mr Warren (retained in 1998 by Outline Planning Consultants Pty Ltd on behalf of the plaintiff to undertake a preliminary flora and fauna assessment of the Land including searches for significant fauna habitats) produced a report in relation to his observations and findings from a survey carried out in July 1998. That report included the following:

A single Wallum froglet was heard calling from flooded grassland in the south east of the southern property. Warren (1993) considered the Wallum froglet a possible occurrence in the locality. WWC (1996) failed to record this species but considered it a possible occurrence along the table drain over which the Turnock Street bypass crosses. WWC (1996) considered it unlikely that the construction of Turnock Street bypass would have a significant impact on a local population of this species.

Based on the availability of habitat and the results of other surveys in the immediate locality, it is considered that this population will be restricted to the small areas of lowlying Paperbark vegetation in Lot 13 and in the intact Paperbark swamps to the south of the southern properties. The drain running through the northern property is subject to saline intrusion and is highly unlikely to provide habitat for the Wallum froglet. The remainder of the area is also generally elevated and does not provide suitable habitat for this species.

Woodward-Clyde - May 1999

On 28 May 1999 Woodward-Clyde produced a report entitled " Statement of Environmental Effect - Flora, Fauna and Fire Hazard Assessment " in relation to the proposed construction of a library near the Land. That report recorded that the Wallum Froglet had been detected in a "brief field survey" and included the following:

Habitat Assessment:

The wallum froglet was recorded from the site in this region although the majority of its habitat is found off the site in adjoining areas and adjacent land on either side of Turnock Street deviation. Given the disturbed nature of the site, the proposed development is considered unlikely to impact on any native species such that it is placed at the risk of extinction.

...

The wallum froglet, north of the site will need to be protected from indirect changes in water quality resulting from development.

...

Another species, the wallum froglet ( Crinia tinnula ) was recorded from areas adjacent to the site and occurring just inside the borders of the site near the Turnock Street/Cudgen Road roundabout. This species is listed in Schedule 2 of the Threatened Species Conservation Act 1995 as vulnerable. This species was not previously recorded in surveys of the area but is known to occur in the region and has been recorded from nearby Cudgen wetlands. The NSW National Parks and Wildlife Service Wildlife Atlas records this species from the locality. The habitat for this species is mostly found off site with the exception of the northern most boundary near the roundabout. It appears restricted to the closed fernland communities with occasional paperbark. Habitat for this species as it occurs on and near the site is illustrated in Figure 5.

It is not entirely surprising that this species was missed in the previous surveys given that it is known to "appear and disappear" depending on conditions, particularly rainfall and subsequent changes in pH (Greg Czechura, pers comm.). In the supplementary survey this species was detected during the diurnal survey of the site, but was not detected at night.

...

The wallum froglet was recorded from the site in this region although the majority of its habitat is found off site in adjoining areas and adjacent land on either side of the Turnock Street deviation. The species appears restricted to the closed fernland habitats within these regions. The habitat on site is considered to be marginal and of low significance to this species given the proportion of more suitable habitat in adjacent areas. It is possible that this species increases and decreases its range according to environmental conditions such as rainfall and disturbance.

...

A summary of the potential impacts are provided below:

...

Alteration in water quality on low lying flats. This may impact on the wallum froglet habitat north of the site;

Changes in hydrology for the remaining habitat areas. This may alter the biodiversity of these areas thus comprising their habitat value.

...

The largest detected grouping of the species was found to be between Turnock Street (east) and the new residential area to the north. Additional groupings were detected northwest of the Turnock Street roundabout at the rear of the residential subdivision and south of Turnock Street (east) in the area surrounding the roundabout.

On 23 August 1999 Mr Knobel notified the plaintiff that commencing on 1 September 1999 a contractor would undertake drainage works through the Land. Mr Knobel noted that unfortunately the water table had been extremely high with much of the Land flooded around the main drain. He also advised that this had been brought about by an unusually high winter rainfall but that water levels were now returning to normality.

WBM Oceanics - March 2000

The minutes of the Council meeting of the defendant held on 19 April 2000 noted that WBM Oceanics had completed the report on drainage management for Kingscliff catchment and that it would guide the drainage strategy in the Kingscliff West area. It was noted that DCP 9 and Contributions Plan 7 would need amendment to reflect the new strategy. Those minutes noted that the WBM Oceanics' report was issued on 24 March 2000 at a total cost of approximately $29,000 with $21,156 being paid by the plaintiff that would be a credit towards future section 94 contributions for drainage works in the Kingscliff catchment. Those minutes also referred to the recommendations for new development in the area as follows:

Development and fill is not to cause ponding on adjacent land and overland flow paths must remain open. The drainage of existing properties must not be adversely affected as a consequence of fill operations.

A second buffer strip should be incorporated between the existing development along Lorien Way and Blue Jay Circuit, and new development proposed for the adjacent undeveloped land. Again, this buffer strip should incorporate an overland flow corridor and be designed to preserve existing vegetation.

DCP 9 Revisited - April 2000

It was unanimously resolved at that meeting that an amendment occur to DCP 9 incorporating the drainage strategy produced by WBM Oceanics and that an amendment to Section 94 Contributions Plan No. 7 be pursued reflecting the revised drainage strategy.

During 2000 the plaintiff objected to the proposed expansion of the Kingscliff Shopping Centre and made a written submission to the defendant. On 14 November 2000 the plaintiff wrote to the defendant in terms that included the following:

2 Drainage :

There is no discussion of our submission regarding legal drainage discharge rights onto our land, nor the implications and management of Q100 flood flows.

Indeed, the report dismisses this issue, noting simply that the Council's Engineering Services Division advises "there are no issues with regard to drainage".

With respect, the authority to discharge stormwater onto and across our land is fundamental to the development. At this time, no such authority exists.

The Minutes of the Council meeting of the defendant of 15 November 2000, at which the proposed extension of the shopping centre was considered, notes that the design did not incorporate any of the recommendations of the Kingscliff Catchment and Drainage Management Plan concerning commercial developments and also that no details were provided to quantify Q100 overland flows and impacts on adjoining land. It included the following:

One of the objectors raised concerns regarding site drainage and impacts on land to the south west. Councils Infrastructure Engineer has reviewed the drainage proposed and has advised that the point of discharge proposed by the proponent is into Council's existing pipe in Turnock Street which discharges further south west (along Turnock Street) adjacent to Gales Holding land. In its present form the development proposal is likely to increase peak flows and pollutant concentrations across Gales Holdings land to the south west.

The proposal will increase the impervious cover to almost 100% of the site, decrease the stormwater runoff time of concentration and result in substantially increased peak stormwater flow rates. There is no overland flow path available in Turnock Street as there is a sag in the longitudinal gradient of the street adjacent to the subject property. The uncommitted capacity of the existing 750mm pipe is also very limited. To accommodate Q100 flows and minimise nuisance increase to downstream owners it will therefore be necessary to limit discharge from the site (into Council's 750mm pipe) to the pre-development Q 5 level (0.17cu.m/sec). This flow rate can be achieved by on site detention or retention or a combination of both.

The application was refused at that time. However at a Council meeting of the defendant on 20 December 2000 the application was approved subject to conditions including that the discharge of stormwater onto the Land would be limited to pre-development rates and evenly distributed across the southern boundary by means of a low spillway. The Minutes of that meeting include the following:

It should be noted that DCP 9 shows a drainage reserve adjacent to the subject land within the residential zone to the west. This reserve has a width of 50m.

This drainage reserve has not been created and whether or not it is developed in the location shown will be a factor in determining the extent the development will impact on development on this land. In respect of the location of this drainage reserve, Council's Infrastructure Engineer has advised that the drainage reserve indicated on the DCP9 plan is still proposed, however its location on the plan is schematic and will not necessarily be in the exact location shown. The plan is indicative only that there will be a drainage reserve and trunk drain in this general location for the purpose of conveying stormwater from the existing urban area south east of Turnock Street in a south westerly direction to the ultimate junction with the major south to north drain through West Kingscliff.

Notwithstanding the above, it is considered that the current proposal satisfactorily addresses the potential impact on future development of the land to the west.

...

Councils Manager of Planning and Design has advised to overcome the issue regarding legal discharge points raised by one of the objectors that a condition requiring discharge of stormwater into the adjoining property shall be limited to the pre-development as indicated on the drainage plans submitted by the applicant and evenly distributed across the southern boundary by means of a low spillway.

On 22 February 2001 the defendant noted that there had been a failure of a sewer gravity main adjacent to Quigan Street which had resulted from the main being "undermined by flow from a Council stormwater outlet".

Meetings - 2001

On 6 March 2001 a meeting was held at which both the defendant and representatives of the plaintiff were present. The Minutes of that meeting include the following:

(a) Kingscliff drainage plan basis of examining storm drainage issues for Gales Holding properties.

(b) There is significant external drainage entering Gales Holdings' properties. This is being examined at the present time by Knobel Consulting and further discussions are to be held with Council once drainage outlets and paths established through the various parcels.

(c) It is recognised that there is a need to treat existing stormwater from Kingscliff township before it enters the main drainage system. Land may have to be made available for this to take place.

(d) The drainage channel from Turnock Street towards Kingscliff is not fixed in location and opportunity exists to vary the alignment to suit future developments.

A workshop took place on 5 April 2001 in relation to "West Kingscliff Planning" at which representatives of the plaintiff and the defendant were present. The defendant's record of that meeting dated 12 April 2001 includes the following:

The western side of Pearl Street is at a lower level than that which West Kingscliff will be filled and Council has some significant potential stormwater liabilities relating to the planning, design and construction of the Gales Holdings land, with Gales Holdings development being anticipated as a self contained development for drainage and water quality management. Bill Knobel commented upon how ( sic ) and Council had worked very productively together at this point. The fill will be permeable material to assist water quality management. Some significant drainage occurs from the existing Kingscliff township onto the Gales Holdings land and he reinforced how this drainage management and treatment was a significant issue for Council in terms of potential liabilities and expenditure. The Company and Council should work together to work out solutions for the total sub-catchment to agree drainage and water quality outcomes. Re-design of pipes for drainage in Elrond to Turnock will have to be considered and there is an opportunity for water quality treatment area in the vicinity of the junction of Elrond and Turnock. Considerable flexibility is still available in the design of the drainage and water quality systems. There is currently contaminated stormwater disposing onto the Gales Holding property and treatment devices will be required in relation to runoff from the existing Kingscliff township. Darren Gibson commented on how the drainage system can be used as open space and recreation and recreated as landscaped corridors and become as natural as possible. The main drains in the system are likely to be about 1m in depth in "dry times". John Henley acknowledged the residual liability.

Northern Drain

On 24 August 2001 Mr May wrote to the plaintiff in relation to the Land generally. That communication included the following:

14. To the north west near or just below the Bowls Club sporting field, there used to be a large drain running east west to the Chinderah flood drain. It would appear that it was about where Channel Street is. This has been filled.

This would appear to be the first time that the plaintiff was alerted to the fact that the Northern Drain had been filled.

In November 2001 Knobel provided a report to the plaintiff which included the following:

In addition to managing stormwater generated by the development of its land holdings, Gales Holdings Pty Ltd has also inherited the management of stormwater generated by surrounding urban development, which is discharged directly onto its land. Tweed Shire Council has acknowledged its liabilities in this regard.

Detailed drainage analysis of land north of Turnock Street, Kingscliff (Lots 11, 12 and 13 DP 871753) reveals significant problems arising from recent land use planning decisions which have overlooked the formalized conveyance of Q100 stormwater flows to the trunk drainage system serving West Kingscliff. That oversight has significant implications for the management of stormwater on land owned by Gales Holdings Pty Ltd, and consequently, the development potential of that land.

The reference in this part of the report to the defendant acknowledging its liabilities appears to have arisen from what was discussed at the 5 April 2001 meeting, the summary of which included the reference to Mr Henley acknowledging "residual liability".

That report referred to Mr Findlater's 1995 report that included the proposal for the construction of a retention basis on the Land, the placement of additional pipes and the inclusion of a lateral drainage system as identified in the WBM Report. Mr Knobel concluded that the extension of Turnock Street to the Elrond Drive roundabout had "effectively dammed all stormwater that is generated within the catchment". Mr Knobel also concluded that there was a compounding of the problem because the invert levels of the culverts under Turnock Street did not allow for the Land to drain freely. Mr Knobel also referred to the WBM Report and reported as follows:

Unfortunately with development having been established across the alignment of this proposed lateral drainage channel; the cost of acquiring land, excavating a drainage path and structurally revetting the channel and providing additional infrastructure (ie. bridge or culvert crossings) would be substantial.

However, the failure to allow for this drainage path, in accordance with s6 of WBM Oceanic's Conclusions and Recommendations, has severely disadvantaged Gales Holding's development potential and the development potential for other adjoining properties.

Planit reports 2001/2002

Jim Glazebrook & Associates, Town Planners and Development Consultants, on behalf of the plaintiff, retained Planit Consulting Pty Limited (Planit) in 2000 to provide an assessment of the vegetation on the Land in support of its development proposals. In its October 2001 report, Planit reported on that vegetation with passing reference to the fauna in the "Wider Locality". The Wallum Froglet was not the subject of the report other than a description of its physical features and habits and a tabular reference to its scientific name.

In December 2002 Plaint produced a detailed flora and fauna investigation of the Land. The methods of the survey included diurnal frog call identification conducted across a variety of 50 and 100m grids depending on the complexity and similarity of the available habitat, and nocturnal survey methods such as Elliott traps, Pitfall traps and open wire traps. Trapping efforts were conducted for a total of 650 trap nights with traps set at varying intervals of 10-20m depending on the habitat complexity. Traps remained in place for between 36 and 48 hours and were checked and emptied (when necessary) every eight hours. All trap lines were replicated a minimum of twice over the survey period.

In the section of the report on amphibians (3.2.1.2) Planit reported that the Paperbark Forest within the southern portions of Lots 26C and 26D were considered the primary habitat for amphibian species on the Land. The largest populations of frog species noted on the Land were recorded in these areas with "suitable breeding habitat for two protected species". Planit reported that following extensive rainfall events in March 2002, Wallum Froglets were recorded calling in a small area adjacent to the Turnock Street roundabout in Lot 11 of the Land. The report included the following:

Given the extensive cleared areas located adjacent to this area it is considered that the Wallum Froglet did not relocate into this area but, rather, lay dormant within the soil profile and resurfaced following recharging of the groundwater table.

Planit concluded that the Wallum Froglets were mainly in the areas of Lots 26C and 26D. It was noted that the defendant had failed to record the Wallum Froglet within this area during its ecological assessments conducted prior to the construction of Turnock Street. The report continued:

The failure to record this species and consequent construction of Turnock Street has severed an existing (at the time) movement corridor for the species linking Lots 11-13 ... north of the road to drainage corridors which ultimately link to suitable breeding grounds on the southern portions of Lots 26C & 26D ...

It is hypothesised that this action has resulted in the isolation of a small number of individuals which now lay dormant in the soil close to the water table during dry periods as they are unable to retreat to areas of permanent tannic Melaleuca wetland. This retreation has been noted in other areas of the site during dry periods ...

Given the above, it is considered that a population of Wallum Froglets does exist on the subject land, predominantly confined to the most suitable habitat area contained within the southern portions of Lots 26C & 26D.

...

A small number of isolated individuals which exist adjacent to the Turnock Street roundabout will be impacted upon by the proposed development which proposes the filling of these areas. It is considered that these individuals, which are separated from permanent water, undergo a period of dormancy during drier months and resurface during the winter months or periods of extensive rainfall which raise the groundwater table.

Further discussions - 2002

On 22 January 2002 the plaintiff wrote to the defendant in respect of a draft Tweed Local Environment Plan 2000 Amendment in terms that included the following:

Drainage . Council's previous planning decisions resulted in the main open drain servicing Gales land north of Turnock St being filled in, with the Retirement Village now standing on part of it. Gales' recent studies show that filling in this drain, along with other stormwater being directed onto Gales land presents great problems and that the cost to Council of rectifying these past planning decisions could be several million dollars.

The plaintiff requested discussions with the defendant to seek "solutions". On 7 February 2002 the defendant wrote to the plaintiff advising that the appropriate manner in which to progress matters would be that consultants acting for the plaintiff and the defendant's staff, including any consultants it engaged, should "work together". The defendant advised that it was sure that this would "provide the appropriate outcomes within a reasonable time frame".

On 18 July 2002 a meeting of representatives of the defendant took place. A memorandum in relation to that meeting included the following:

(b) does not affect the rights or liabilities of any person under any easement or under any Act or law, and

...

(d) does not constitute the owner of the road as an occupier of the land, and

...

(2) This section does not restrict the power of a roads authority to regulate the digging up of public roads pursuant to the provisions of any other Act.

It was submitted that the Roads Act does not exclude the liability of the defendant by virtue of its ownership of the land and the drains which run through the Road. It was further submitted that the correct interpretation is that the culvert was not "road work" because its construction was undertaken by reason of the defendant's duties as a drainage authority under the LGA and not "for the purpose of facilitating the use of the road as a road": Roads Act Dictionary, "road work".

It was submitted that in this context the defence can only apply to a roads authority. The activity about which the plaintiff complains was not the conduct of the roads authority but of the defendant in managing its stormwater system. The plaintiff submitted that there is no doubt, according to Mr Paff's evidence, that the defendant manages the stormwater system separately from its road programs. Of critical significance was Mr Paff's evidence that drainage culverts, as distinct from table drains, were not funded from the roads budget or managed as part of the road (tr 1056-1057). The roads authority itself does not manage culverts as part of the road. It was submitted that the defendant cannot make good the predicate for the defence because it does not manage the culverts in its capacity as a roads authority.

The plaintiff submitted that the inlet to the 1200mm pipe is not in a road way. It does not form any part of a road and is under a pathway dedicated as such. The language of the instrument (Ex XX) compels the conclusion that the path was not dedicated as a public road and the defendant does not need any special powers to maintain it. The plaintiff submitted that the pathway and the pipe vested with the pathway upon the registration of the plans for that stage of the NPE.

The plaintiff submitted that s 45 of the CLA only requires actual knowledge of the particular risk and not the harm or its materialisation. It was submitted that the defendant knew its drains were poorly designed and were inadequate. It was aware from the drainage investigations by WBM in 1998 and by Knobel in 2001 that its drains were causing drainage problems. It was submitted it therefore had actual knowledge of the risk that the drains would fail. It was submitted that in any event because the legal onus is on the defendant to excuse its conduct, it is required to establish, at the minimum, absence of actual knowledge. The plaintiff emphasised the absence of Mr Knight and Mr Rainer as witnesses and submitted that the defendant had failed to discharge the onus.

I agree with the plaintiff's submission that the drainage system maintained by the defendant is not "road work". However even if the failure to install the culverts under Turnock Street and the additional pipes provided for in the plans for Elrond Drive could be categorised as "road work", the defendant was well aware that it had decided to use the Land as a retention basin and as such had actual knowledge of the risk at the time, of the increased volumes of untreated stormwater on the Land, that resulted in the harm.

Assuming the defendant is a roads authority and the Blue Jay Circuit Scheme is "road work", it is quite clear that the defendant knew, certainly from 4 May 2004, that there was a risk that harm to the Land by the increased stormwater on it would result from its failure to carry out the road work. The defendant's conduct is not justified or excused by the provisions of s 45 of the CLA.

Section 733 LGA

The defendant claims that it has at all times acted in good faith in its drainage works. In this regard it relies upon s 733 of the LGA which provides as follows:

733 Exemption from liability-flood liable land, land subject to risk of bush fire and land in coastal zone

(1) A council does not incur any liability in respect of:

...

(b) anything done or omitted to be done in good faith by the council in so far as it relates to the likelihood of land being flooded or the nature or extent of any such flooding.

...

(3) Without limiting subsections (1), (2) and (2A), those subsections apply to:

(a) the preparation or making of an environmental planning instrument, including a planning proposal for the proposed environmental planning instrument, or a development control plan, or the granting or refusal of consent to a development application, or the determination of an application for a complying development certificate, under the Environmental Planning and Assessment Act 1979 , and

...

(c) the imposition of any condition in relation to an application referred to in paragraph (a), and

...

(g) any other thing done or omitted to be done in the exercise of a council's functions under this or any other Act.

(4) Without limiting any other circumstances in which a council may have acted in good faith, a council is, unless the contrary is proved, taken to have acted in good faith for the purposes of this section if the advice was furnished, or the thing was done or omitted to be done, substantially in accordance with the principles contained in the relevant manual most recently notified under subsection (5) at that time.

(5) For the purposes of this section, the Minister for Planning may, from time to time, give notification in the Gazette of the publication of:

(a) a manual relating to the management of flood liable land, or

(b) a manual relating to the management of the coastline, or

(c) a manual relating to the management of land subject to the risk of bush fire.

The notification must specify where and when copies of the manual may be inspected.

The defendant submitted that ponding of water of the kind alleged by the plaintiff falls within the meaning of "flooded" or "flooding" in s 733: Melaleuca Estate at 341-342 [78] to [80] per Giles JA. The existence of good faith must be proved by the defendant as an attribute of the negligence which excuses liability. Good faith must be more than honest ineptitude: Mid Density Developments Pty Limited v Rockdale Municipal Council (1993) 44 FCR 290.

It is conceded that in 1994 the defendant recognized the need for a drainage strategy that accommodated the whole of the Kingscliff area in accordance with DCP 9. The defendant commissioned consultants to produce such a strategy. When Mr Hill produced the drainage report for the Bowls Club, the defendant provided it to Mr Findlater who refuted its conclusions relating to the catchment size and the allowance for the Q100 flow. In early 1995 Mr Findlater produced an Alternative Drainage Strategy that presented the three alternatives referred to earlier with a recommendation that the retention basin was the most economical alternative. The defendant claims that it encouraged the plaintiff to propose further designs in relation to a final drainage solution but that this encouragement was met by the plaintiff's requests to delay the changes to DCP 9 until it prepared a "master plan" for all of the plaintiff's landholdings in the Kingscliff area.

The plaintiff submitted that the provisions of s 733 of the LGA do not apply because the ponding complained of by the plaintiff is not "flooding" but a failure of the defendant's stormwater drainage system to cater for relatively small regular stormwater runoff events. It was submitted that s 733(4) and (5) refer to a manual relating to the management of flood liable land. The NSW Floodplain Development Manual was first released in 1986 and gazetted in 1987. The next version was issued and gazetted in April 2005. The plaintiff submitted that it is significant that the defendant does not allege that the drainage problems that are the subject of these proceedings fall within the scope of either version of that manual. The plaintiff contended that this is because the drainage problems are local drainage problems that fall outside its scope. The plaintiff also submitted that to the extent that the acts and omissions of the defendant relate to water quality as opposed to flooding, the section has no application.

The plaintiff submitted that the defendant has not established that it acted in good faith in relation to the nuisances. It contended that the defendant acted contrary to its stormwater and flooding protection policies and also permitted NPE to breach them. It imposed Q5 and Q100 conditions of consent on NPE and approved the sub-divisions without the drainage works required by those conditions, knowing of those breaches. It permitted the blocking and subsequent filling of the Northern Drain despite its experience with local drainage problems during the development of NPE and despite the fact that it had previously permitted the blocking and filling in of the Natural Watercourse.

The plaintiff submitted that when the defendant became aware of the drainage problems resulting from the filling in of the Northern Drain and NPE's refusal to replace it with a Q100 flow path, it adopted the strategy put forward by Mr Findlater despite the fact that he had a clear conflict of interest and in circumstances where the plaintiff was to bear the costs and damages burden of either accepting stormwater or apparently gifting its land to the defendant for a retention basin without the informed consent or knowledge of the reason for the increased flow being the breach by NPE and its agent Mr Findlater.

The plaintiff submitted that the defendant met and corresponded with the plaintiff and its agents on numerous occasions about drainage issues on the Land, agreed to the plaintiff undertaking the drainage study, and later requested the plaintiff fund the bulk of the WBM drainage study. It was submitted that at no stage did the defendant inform the plaintiff that the drainage problems on the Land were the result of the filling of the Northern Drain and its replacement by the inadequate 1200mm pipe. The defendant did not invite the plaintiff to participate in working groups directed at resolving the Kingscliff drainage issues. Rather the plaintiff proposed that a working group be established when it was informed by the defendant that a large retention basin would be required on the Land. The plaintiff was not advised as to why such retention basin was required. Although there is the ubiquitous mention from 1995 onwards of the need for amendment to DCP 9, this has not occurred.

The plaintiff also submitted that the defendant caused Turnock Street and Elrond Drive to be designed and constructed with all but one of the culverts above ground level and with no table drain, in breach of its policies for drainage under public roads and despite the fact that it was aware of the increased stormwater flows coming onto the Land. The plaintiff submitted that in those circumstances the defendant had not established that it acted in "good faith" within the meaning of that expression in s 733 of the LGA.

The defendant's conduct in retaining Mr Findlater in the first place when he was the representative of NPE, the party in breach of the conditions of development consent, is quite extraordinary. But to accept his recommendation that the plaintiff should be the party to bear the burden of the consequences of NPE's breach is even worse. To accept it and impose it on the plaintiff without advising the plaintiff of the reason for its imposition and without offering any form of relief or compensation to the plaintiff is extremely high handed and could not be described as acting in good faith. The defendant failed to disclose the reason for its decision to utilise the Land as a retention basin when it entered into the agreement to purchase part of the Land and construct Turnock Street. It was not until the plaintiff's representatives had access to the defendant's files that the plaintiff became aware that the Northern Drain had been filled by NPE in breach of the conditions of its development consent.

Assuming that the section applies I am not satisfied that the defendant's conduct in imposing the retention basin on the plaintiff was done in "good faith".

The defendant's conduct after the nuisance was bought to its attention in 2004 was in my view also lacking in good faith. The plaintiff approached the defendant in a conciliatory fashion to see if they might find a "solution" together. Rather than accept this approach the defendant called for a public apology and payment of large amounts of costs at a time when the defendant was still using the plaintiff's Land as a retention basis at no cost to the defendant. It is hardly conduct that could be described as in good faith.

The defendant does not have the protection of the provisions of s 733 of the LGA in all the circumstances.

Damages

The plaintiff makes a number of claims in respect of the relief sought to abate the nuisance including a mandatory injunction requiring the defendant to complete the Blue Jay Circuit Scheme. However in the alternative the plaintiff seeks an award of damages in the amount of $600,000 to compensate it for the need to install a drainage system across the Land to accommodate the additional stormwater on the Land. The plaintiff also claims damages in respect of the loss of the value of the Land that has to be quarantined to protect the Wallum Froglet habitat. A further claim is made for the additional cost and expense of maintaining the Wallum Froglet habitat by reason of the requirement to treat the untreated stormwater to make it suitable for the Wallum Froglet habitat. The plaintiff also makes a claim for the additional cost that will be incurred in relation to the fill that it will have to provide by reason of the presence of the untreated stormwater on its Land. There is also a claim for the cost incurred in obtaining expert assistance in 2004 in relation to the establishment of the table drain and for the costs of and associated with the construction of the table drain. The plaintiff also seeks injunctive relief to rectify the problems in relation to the Quigan Street outlets.

Blue Jay Circuit Scheme

The defendant has resisted this relief on the basis that it is premature to complete the works until the plaintiff has indicated the nature of the proposed development of the Land and that it will proceed with its development. There is no doubt that the plaintiff's establishment of the table drain in 2004 has reduced the problems that arose with the ponding of water north of Turnock Street. I have found that the table drain has abated the nuisance except after major storm events. The drainage system in respect of the Land is still inadequate after major storm events and it is necessary to find a way in which the plaintiff can be relieved of the burden that has been imposed upon it by reason of the inadequate drainage system and the use of its Land as a retention basin.

The nuisance after major storm events will continue unabated unless steps are taken to rectify the problem. It is accepted that the drainage problems that have caused the nuisance on the Land will be solved by the construction of the Blue Jay Circuit Scheme. However that process involves obligations to and of third parties who are not parties to this litigation. Although it may be convenient to describe the project in a short hand way as the "Blue Jay Circuit Scheme", it is a complex process of road and drainage construction that will affect a number of third parties. There are also the vagaries of development and construction with the consequent uncertainties, both temporal and more substantive. If it were the subject of a mandatory injunction of this Court it would require supervision. This would be a most unsatisfactory outcome.

The question arises as to whether damages are an adequate remedy in the circumstances: Bankstown City Council v Alamdo Holdings Pty Limited at 665 [11]. I am satisfied that damages are an adequate remedy. The plaintiff's alternative claim for $600,000 is based on an agreed figure adopted by Philip Barlow and Kent Wood, valuers (Ex PD 10) that will enable the plaintiff to install a drainage system on the Land that will abate the nuisance. This figure is made up of $571,000 plus an allowance for interest. I am satisfied that this is the appropriate relief rather than the mandatory injunction.

Loss of value of the Land for Wallum Froglet habitat

The increase in the number of the Wallum Froglets on the Land was recorded in Mr Parker's Report in April and May 2003. I have found that there was a viable population of Wallum Froglets on the Land in late 2002/early 2003. This occurred before 5 March 2003 when the plaintiff advised the defendant that it was no longer willing to tolerate the discharge of the stormwater runoff onto the Land and before 4 May 2004 when the plaintiff advised the defendant that there was an unreasonable interference with the enjoyment of its Land. Although all of the physical features that were present at 4 May 2004 were present prior to that time, the plaintiff tolerated those physical features without demur as to its enjoyment of the Land and thus there was no actionable nuisance prior to that time.

The plaintiff cannot complain that the presence of the viable population of Wallum Froglets was a consequence of the actionable nuisance. It may well have been a consequence of the conduct of the defendant prior to 2004 but the nuisance action did not arise until there was the unreasonable interference with the plaintiff's enjoyment of the Land. As I have already said, the action in negligence that concerned the events prior to this time was abandoned on the seventh day of the trial.

I am satisfied that because there was a viable population of Wallum Froglets on the Land prior to the time of the first nuisance, the plaintiff is unable to recover damages for the exclusion of that part of the Land from its development that is to be preserved for the Wallum Froglet habitat.

Although in the circumstances of this finding it is unnecessary, I will shortly address the foreseeability arguments that were raised by the parties. The defendant submitted that the plaintiff's claim that it should have had the risk of the invasion of any endangered species in mind in the course of its activities raises the spectre of an obligation to have in mind the "risk" of preserving a bewildering array of potential invaders and presumably of promoting a wide range of habitat requirements. The defendant posed the question of whether in the circumstances it is required to balance in its mind whether to preserve a wet environment conducive to frog survival or create a dry environment for the survival of the threatened Mitchell's Rainforest Snail. The complexity of the problem is illustrated by the consideration of the species identified in the fauna and flora studies prepared in connection with the Land. In the 1994 Warren survey the threatened species included a broad range of "Avifauna", "Mammals" and "Amphibians" recorded in the localities. Endangered fauna possibly occurring on the Land included the osprey, white-eared monarch, black-necked stork, black flying fox, and the Queensland blossom bat. The 1996 Woodward-Clyde survey identified many different threatened faunal species on or near the Land.

The complexity is exacerbated by the differing opinions that were provided to the parties during the 1990s. Mr Warren expressed the view in 1994 that it was possible though unlikely that the Land contained Wallum Froglets. He expressed the view that if they were to be on the Land it would be most likely that they would be found in the "wet areas associated with the Paperbark forests". In 1996 Mr Warren said that they were most likely to occur "along the drain to the south of the roundabout where a number of other frogs were recorded". In 1999 he expressed the view that they would be restricted to the "small areas" of low-lying Paperbark vegetation in Lot 13 and in the Paperbark swamp to the south of the Land.

I do not accept that the prospect of the invasion of a colony of Wallum Froglets should have been in the mind of the defendant when it authorised the NPE development or when it decided to utilise the plaintiff's Land as a retention basin for the stormwater run-off of the area. The amount of research that has been carried out on the Land over the years would not have alerted either party to the prospect of the invasion of the colony of Wallum Froglets. The research identified a single call of the Wallum Froglet in 1998, two years after the construction of Turnock Street, at a time when there was an anticipation that the plaintiff would fill its Land in the not too distant future.

The defendant did give consideration to whether there were Wallum Froglets present on the Land that might be harmed by the proposed development and the construction of Turnock Street. There is no doubt that those investigations suggested that there was no Froglet population of any significance in that area. The defendants submitted that in those circumstances it would be manifestly unreasonable to suggest that a reasonable Council would have been alert to the risk that the development might serve to alter that position.

I accept that the defendant anticipated that the plaintiff would seek to develop the Land sooner rather than later. I accept that this anticipation was the reason it constructed Turnock Street with the culverts approximately halfway up the embankment to accommodate the Land as filled. If the plaintiff is correct in its submissions that the risk was foreseeable, the defendant would have had to anticipate that the plaintiff would delay by a measure of years its filling of the Land, that the increase in stormwater run-off onto the Land would not only be impeded by the absence of the culverts at ground level but would also be impeded to the extent that ephemeral ponding would not only occur but would remain for necessary periods of five to six weeks in summer and/or some months in winter. I do not accept that the risk was reasonably foreseeable in all the circumstances of this case. It was remote.

Cost of treating water for the Wallum Froglet habitat

The plaintiff submitted that the defendant must take the plaintiff as it finds it, with the Wallum Froglet habitat and with its legal obligation to protect it: Roberts v Rodier (2006) 12 BPR 23,453; [2006] NSWSC 282 at 23,477. At the time the defendant was put on notice that the plaintiff's enjoyment of the Land was being unreasonably interfered with it knew that there was a viable population of Wallum Froglets on the Land. The risk that the plaintiff would be put to additional cost and expense in treating or improving the quality of the untreated stormwater so as to accommodate the Wallum Froglet was foreseeable but the defendant has done nothing to alleviate or eliminate the flow of the untreated stormwater onto the Land.

It is clear that the Wallum Froglet population has declined and indeed it could disappear from the Land. There is the prospect that the Blue Jay Circuit Scheme will be completed when the contribution is received from the Nursing Association. The timing of that contribution is uncertain. It is also possible (although it would be hoped not probable) that the defendant may revisit its decision and not proceed with the Blue Jay Circuit Scheme. There is the complicating factor of the timing of the completion of any drainage works the plaintiff undertakes to remove the stormwater from its Land. As this process will have to be undertaken in consultation with and approved by the defendant delay may well occur (having regard to the previous history between these parties).

The plaintiff is entitled to recover any additional costs of treating the stormwater that are incurred prior to the completion of its drainage works or the completion of Blue Jay Circuit Scheme. It is necessary to take into account the fact that the plaintiff would have to treat the water irrespective of the stormwater on the Land caused by the nuisance. I am satisfied that the appropriate way to deal with this is to allocate a percentage of those costs. This cannot be done with any mathematical or scientific precision and in the circumstances of the evidence, particularly since the installation of the table drains in 2004, I am satisfied that the appropriate allocation is 30% of those costs up to the completion of the plaintiff's drainage works or the Blue Jay Circuit whichever is the earlier. These costs will need to be assessed in due course.

Costs of the fill

The plaintiff also made a claim for the additional costs that will be incurred by reason of the type of fill that will be required for the development of the Land that is caused by the presence of the additional stormwater on the Land. In the light of the order to be made for the award of damages for the plaintiff's drainage works with the consequence that the nuisance will be abated I do not intend to make an award of damages for this claim.

Costs in relation to table drain

The plaintiff retained experts, including Dr Webb, to assist it to find an appropriate mechanism to abate the nuisance. This resulted in the construction of the table drain. As I have already said this resulted in more efficient and effective drainage of the Land, so that the nuisance only occurs after major storm events. I am satisfied that the plaintiff is entitled to recover the costs of retaining the experts and the costs of and associated with the construction of the table drain.

Quigan Street Outlets

There was a question raised during the proceedings as to whether the plaintiff had properly pleaded its claim in respect of the Quigan Street outlets. Although that submission may have had some force I was of the view that the evidence in relation to those outlets was relevant and that the plaintiff should be allowed to proceed with its claim for injunctive relief in relation to the Quigan Street outlets.

After the plaintiff opened its case I indicated to the defendant that the problem with one of the Quigan Street outlets required attention. The defendant indicated that its officers wished to attend to repair the concrete apron on the side of that outlet (tr 424). It is not clear whether any rectification or repair work has been done. The plaintiff seeks orders that the defendant install pollutant traps and energy dissipation structures. I am satisfied that such work should be completed. Unfortunately there has been disagreement as to what steps should be taken in this regard mainly, I apprehend, because the defendant has not regarded itself as liable for the cost of completing the works.

I am satisfied that the gross pollutant traps and energy dissipation structures should be installed. I will either award the plaintiff damages to compensate it for the costs of the installation or alternatively the defendant can agree to a regime of installation of the gross pollutant traps and energy dissipation structures. I will hear the parties on the orders to be made to effect this result.

Conclusion

The plaintiff's claim for the mandatory injunction in respect of the completion of the Blue Jay Circuit Scheme will be dismissed. The plaintiff is entitled to an award of damages in the amount of $600,000 on the basis that it will install a drainage system on the Land to divert the additional stormwater from the Land.

The plaintiff is not entitled to recover damages for the loss of the value of the Land to be used for the Wallum Froglet habitat. The plaintiff is not entitled to recover the costs as claimed for the fill for the Land.

Should the plaintiff be required to continue to maintain the Wallum Froglet habitat, it is entitled to recover 30% of any costs of treating the stormwater to make it suitable for the Wallum Froglet habitat up to the date of completion of its drainage works on the Land or the date of the completion of the Blue Jay Circuit Scheme, whichever is the earlier. Those damages will be assessed in due course.

The plaintiff is also entitled to damages for the costs of the expert advice and assistance in respect of the table drain installed on the Land in 2004 and of the costs of and associated with the construction of that table drain. Those damages are to be agreed and if not agreed they will need to be assessed.

Gross pollutant traps and energy dissipation structures are to be installed in the Quigan Street outlets. I will hear the parties on the orders to be made to effect this result.

The matter will be listed for the filing of Short Minutes of Order to reflect these findings together with any agreed costs orders. If the parties are unable to agree on those orders I will list the matter for argument on a date to be arranged with my Associate. The parties should make contact with my Associate with the agreed date for that listing by no later than 20 October 2011.

***************

SCHEDULE A

SCHEDULE B

Decision last updated: 21 September 2011

Medium Neutral Citation:	Gales Holdings Pty Limited v Tweed Shire Council [2011] NSWSC 1128
Hearing dates:	15,17,and 21 February 2011; 2, 3, 4, 7, 8, 9, 10, 11, 14, 15, 18 March 2011; 4, 5, 6, 7, 8 April 2011 (written subs 10 May 2011)
Decision date:	21 September 2011
Jurisdiction:	Equity Division
Before:	Bergin CJ in Eq
Decision:	Nuisance established - plaintiff entitled to damages
Catchwords:	[NUISANCE] - stormwater runoff onto plaintiff's land - whether unreasonable interference with enjoyment of the land - land in undeveloped state - whether drainage inadequate and caused wetting up of the land causing harm with consequence of invasion of protected species of frogs [STATUTORY DEFENCES] - whether Civil Liability Act 2002 applies - whether defendant acted in good faith - whether defendant's conduct justified or excused [DAMAGES] - whether mandatory injunction or whether damages an adequate remedy
Legislation Cited:	Civil Liability Act 2002 Environmental Planning and Assessment Act 1979 Environment Protection and Biodiversity Conservation Act 1999 (Cth) Local Government Act 1993 National Parks and Wildlife Act 1974 Protection of the Environment Operations Act 1997 Roads Act 1993 Threatened Species Conservation Act 1995
Cases Cited:	Bamford v Turnley (1862) 3 B. & S. 66 Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660; [2005] HCA 46 Brodie v Singleton Shire Council (2001) 206 CLR 512; [2001] HCA 29 Buckle v Bayswater Road Board (1936) 57 CLR 259 Cattanach v Melchior (2003) 215 CLR 1; [2003] HCA 38 Don Brass Foundry Pty Ltd v Stead (1948) 48 SR (NSW) 482 Duke of Leeds v Earl of Amhurst (1846) 2 Ph 117 Gales Holdings Pty Ltd v Minister for Infrastructure and Planning and Anor [2005] NSWLEC 617 Gales Holdings Pty Ltd v Minister for Infrastructure and Planning [2006] NSWCA 388 Gales Holdings Pty Limited v Tweed Shire Council [2006] NSWLEC 85 Gales Holdings Pty Limited v Tweed Shire Council [2006] NSWLEC 212 Gales Holdings Pty Limited v Tweed Shire Council [2008] NSWLEC 209 Hargrave v Goldman (1963) 110 CLR 40 Hill v Van Erp (1997) 188 CLR 159 Leakey v National Trust for Places of Historic Interest or Natural Beauty [1980] 1 QB 485 Melaleuca Estate Pty Ltd v Port Stephens Council (2006) 143 LGERA 319; [2006] NSWCA 31 Mid Density Developments Pty Limited v Rockdale Municipal Council (1993) 44 FCR 290 North Sydney Council v Roman (2007) 69 NSWLR 240; [2007] NSWCA 27 Orr v Ford (1989) 167 CLR 316 Overseas Tankship (UK) Limited v Miller Steamship Company Pty Ltd ("Wagon Mound (No 2)") [1967] 1 AC 617 Owners Strata Plan 4085 v Mallone (2006) 12 BPR 23,691; [2006] NSWSC 1381 Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278 Pride of Derby and Derbyshire Angling Association Ltd v British Celanese Ltd [1953] 1 Ch 149 Quick v Alpine Nurseries Sales Pty Ltd [2010] NSWSC 1248 Roberts v Rodier (2006) 12 BPR 23,453; [2006] NSWSC 282 Robson v Leischke (2008) 72 NSWLR 98; [2008] NSWLEC 152 Sedleigh-Denfield v O'Callaghan [1940] AC 880 Southport Corporation v Esso Petroleum Co Ltd [1954] 2 QB 182 Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59 Sutherland Shire Council v Becker (2006) 150 LGERA 184; [2006] NSWCA 344 Sydney Water Corporation v Turano (2009) 239 CLR 51; [2009] HCA 42 Torette House Pty Ltd v Berkman (1940) 62 CLR 637 Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 Walter v Selfe (1851) 4 De G. & Sm. 315 Willoughby Municipal Council v Halstead (1916) 22 CLR 352
Texts Cited:	Clerk & Lindsell on Torts, 19th Ed. (Sweet & Maxwell, London) Dominic Villa Annotated Civil Liability Act 2002 (NSW) (2004, Law Book Co)
Category:	Principal judgment
Parties:	Gales Holdings Pty Limited (Plaintiff) Tweed Shire Council (Defendant)
Representation:	TF Robertson SC/M Green (Plaintiff) SR Donaldson SC/S Glascott/N Broadbent (Defendant) Allens Arthur Robinson (Plaintiff) DLA Phillips Fox (now DLA Piper) (Defendant)
File Number(s):	2005/261912