Harvey and Tubbo v Minister Administering the Water Management Act 2000
[2008] NSWLEC 165
•18 June 2008
Pending Appeal: 40210/08 (41275/06)
Reported: (2008) 160 LGERA 50
40208/08 (41283/06)
Land and Environment Court
of New South Wales
CITATION: Harvey & Anor v Minister Administering the Water Management Act 2000; Tubbo Pty Ltd & Ors v Minister Administering the Water Management Act 2000 [2008] NSWLEC 165
This decision has been amended. Please see the end of the judgment for a list of the amendments.PARTIES: 41275 of 2006
Adrian David Harvey & Margaret Elizabeth Harvey (First Applicant)
Adrian David Harvey (Second Applicant)
Minister Administering the Water Management Act 2000 (Respondent)41283 of 2006
Tubbo Pty Limited (First Applicant)
Tubbo Irrigation Management Pty Limited (Second Applicant)
Orchard Farms Pty Limited (Third Applicant)
Four Arrows Rural Management Pty Limited (Fourth Applicant)
Minister Administering the Water Management Act 2000 (Respondent)FILE NUMBER(S): 41275 of 2006; 41283 of 2006 CORAM: Jagot J KEY ISSUES: Judicial Review :- amendment order - water sharing plan - whether amendment to plan an amendment or a new plan - whether amendment order exceeded the Minister's power - procedural fairness - whether duty applied to making of amendment order - if so, whether amendment order made in breach of duty - content of any duty - amendment order within power - no duty of procedural fairness - alternatively, no breach of duty LEGISLATION CITED: Administrative Decisions (Judicial Review) Act 1977 (Cth)
Artesian Wells Act 1897
Catchment Management Authorities Act 2003
Protection of the Environment (Operations) Act 1997
Water Act 1912
Water Management Act 2000
Water Management (General) Regulation 2004
Water Management (General) Amendment Regulation 2006CASES CITED: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Annetts v McCann (1990) 170 CLR 596
Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88
Attorney-General (NSW) v Quin (1990) 170 CLR 1
Attorney-General for the State of Western Australia v Marquet (2003) 217 CLR 545
Botany Bay City Council v Minister of State for Transport and Regional Development (1996) 41 ALD 84
Bread Manufacturers of New South Wales v Evans (1980) 180 CLR 404
Buck v Comcare (1996) 66 FCR 359
Campbelltown City Council v Vegan (2006) 67 NSWLR 372
Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576
Commissioner of Police v Tanos (1958) 98 CLR 383
Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 1) (1991) 32 FCR 219
Darling Casino Limited v New South Wales Casino Control Authority (1997) 191 CLR 602
Deloitte Touche Tohmatsu v Australian Securities Commission (1995) 54 FCR 562
Director of Public Prosecutions v Smith [1991] 1 VR 63
Dunlop v Woollahra Municipal Council [1975] 2 NSWLR 446
FAI Insurances Limited v Winneke (1981) 151 CLR 342
Foster v Minister for Customs and Justice (2000) 200 CLR 442
Gardner v Dairy Industry Authority of New South Wales [1977] 1 NSWLR 505
Haoucher v Minister of State for Immigration and Ethnic Affairs (1990) 169 CLR 648
Kioa v West (1985) 159 CLR 550
Lesnewski v Mosman Municipal Council (2005) 138 LGERA 207
McInnes v Onslow-Fane [1978] 1 WLR 1520
McWilliam v Civil Aviation Safety Authority (2004) 142 FCR 74
Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24
Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381
Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31
Mobil Oil Australia Pty Limited v Federal Commissioner of Taxation (1963) 113 CLR 475
Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources (2005) 138 LGERA 11
O’Sullivan v Farrer (1989) 168 CLR 210
OzEpulse Pty Ltd v Minister for Agriculture, Fisheries and Forestry (2007) 163 FCR 562
Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476
Public Service Board of New South Wales v Osmond (1986) 159 CLR 656
Qantas Airways Limited v Aravco Limited (1996) 185 CLR 43
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1
Re Minister for Immigration and Multicultural Affairs and Another; Ex parte MIAH (2001) 206 CLR 57
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82
Riverina Wines Pty Ltd v Registrar of the Workers Compensation Commission of New South Wales [2007] NSWCA 149
Roads and Traffic Authority (NSW) v Ashfield Municipal Council (2005) 141 LGERA 278
Salemi v Mackellar [No. 2] (1977) 137 CLR 396
Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1997) 95 LGERA 33
Sinclair v Mining Warden at Maryborough (1975) 132 CLR 473
State of South Australia v O’Shea (1987) 163 CLR 378
Stead v State Government Insurance Commission (1986) 161 CLR 141
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152
Singh v The Commonwealth (2004) 222 CLR 322
Telstra Corporation Ltd v Commonwealth (2008) 243 ALR 1
Terrace Towers Holdings Pty Ltd v Sutherland Shire Council (2003) 129 LGERA 195
Tickner v Chapman (1995) 57 FCR 451
Transport Action Group Against Motorways Inc v Roads and Traffic Authority (1999) 46 NSWLR 598
Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78
VAW (Kurri Kurri) Pty Ltd v Scientific Committee (Established under s127 of the Threatened Species Conservation Act 1995) (2003) 58 NSWLR 631
Victims Compensation Fund Corporation v Nguyen (2001) 52 NSWLR 213
Warringah Council v Edmondson [2001] NSWCA 1
White v Ryde Municipal Council [1977] 2 NSWLR 909
Wilson v Anderson (2002) 213 CLR 401DATES OF HEARING: 18, 19, 20 March 2008, 30 April 2008 (further written submissions - 9 and 23 May 2008)
DATE OF JUDGMENT:
18 June 2008LEGAL REPRESENTATIVES: 41275 of 2007
APPLICANTS
Mr Shane Prince
SOLICITORS
Mackenzie VardanegaRESPONDENT
Mr N C Hutley SC with Mr Jeremy Kirk
SOLICITORS
Crown Solicitor's Office41283 of 2007
RESPONDENT
APPLICANTS
Mr B A Coles QC with Mr Shane Prince
SOLICITORS
Watson Mangioni
Mr N C Hutley SC with Mr Jeremy Kirk
SOLICITORS
Crown Solicitor's Office
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESJagot J
18 June 2008
41275 of 2006
ADRIAN DAVID HARVEY &
MARGARET ELIZABETH HARVEY & ANOR
ApplicantsMINISTER ADMINISTERING THE WATER MANAGEMENT ACT 2000
Respondent41283 of 2006
TUBBO PTY LIMITED & ORS
ApplicantsJUDGMENTMINISTER ADMINISTERING THE WATER MANAGEMENT ACT 2000
Respondent
Jagot J:
A. Issues
1 On 1 October 2006 the respondent Minister made the Water Sharing Plan for the Lower Murrumbidgee Groundwater Sources 2003 Amendment Order 2006 (the amendment order) under s 45(1)(a) of the Water Management Act 2000 (the Water Management Act). The amendment order amended the Water Sharing Plan for the Lower Murrumbidgee Groundwater Sources 2003 (the plan).
2 The applicants are each engaged in primary production activities within the area to which the plan applies. The applicants contend that the amendment order is invalid and seek associated declarations and orders in these proceedings. The proceedings were heard together, with evidence in one being evidence in the other.
3 Although their pleadings traversed numerous issues, the applicants’ claims (by the conclusion of the proceedings) may be summarised as follows:
(1) The amendment order was not authorised by s 45 of the Water Management Act because, rather than an amendment to the plan, the amendment order involved the making of a new plan (without the Minister complying with various provisions applying to the making of a plan including ss 18(1), 46 and 87AA).
(2) The amendment order was made in breach of s 45(4) of the Water Management Act in that cl 3 purports to extend the duration of the plan.
(4) The amendment order is thereby invalid. In consequence, the provisions of cl 3(1)(a)(ii) of Sch 10 to the Water Management Act, converting bore licences under the Water Act 1912 (the 1912 Act) into aquifer access licences under the Water Management Act, are not engaged. Accordingly, the applicants retain their bore licences under the 1912 Act.(3) The amendment order was made in breach of a duty of procedural fairness to the applicants. This part of the applicants’ case related to the fact that the amendment order inserted Sch 5 into the plan. The significance of Sch 5 is explained below.
4 In these reasons I refer to: - (i) the applicants, where no distinction between the two applicants is required, (ii) the Tubbo applicants, to identify the applicants in proceedings 41283 of 2006 (a term used with respect to the Tubbo applicants or any one or more of them), and (iii) the Harvey applicants, to identify the applicants (either or both of them) in proceedings 41275 of 2006.
5 The following terms are also used: - (i) the Department means the Department responsible for administering the Water Management Act (known at different times as the Department of Land and Water Conservation or DLWC, the Department of Infrastructure, Planning and Natural Resources or DIPNR, and the Department of Natural Resources or DNR), (ii) the Minister means the Minister administering the Water Management Act, and (iii) ML means megalitre (1000 litres). There are other relevant entities and committees defined separately below.
B. The statutory scheme
Background
6 Before the commencement of the relevant part of the statutory scheme under the Water Management Act, Pt 5 of the 1912 Act regulated access to groundwater. Part 5 provided a scheme for licensing the sinking of, and the taking and using of water from, bores.
7 The applicants each held bore licences under Pt 5 of the 1912 Act. The Tubbo applicants held bore licences 40BL119208, 40BL186229, 40BL188059, 40BL188060, 40BL188118, 40BL186128, 40BL190747, 40BL187100, and 40BL187101 carrying an entitlement to groundwater totalling 20,742ML per year. The Harvey applicants held bore licences 40BL186524 and 40BL188655 carrying an entitlement to groundwater of 3045ML and 4000ML per year (or 7045ML per year in total). These entitlements were subject to the provisions of Pt 5 (which enabled the Minister to restrict or control flow rates or restrict or suspend rights under licences in the circumstances specified in the statutory provisions) and to the conditions of the licences (which included the Department’s right to vary the volumetric allocation and rate of taking the allocation under the licences). For various reasons the applicants did not extract their full entitlements under these bore licences.
8 Under the regime of the 1912 Act entitlements under licences within the lower Murrumbidgee area reached 512,409ML per year (according to the Murrumbidgee Groundwater Assistance Model developed by the Department). This resulted from the policy of controlled depletion of groundwater directed at addressing salinity and maximising regional economic benefits from groundwater. By the mid 1990s concerns emerged about the environmental impacts of groundwater depletion and the long-term viability of groundwater resources. In August 1997 the NSW Government released a policy document directed towards achieving sustainable use of groundwater. This led to a moratorium being placed on the grant of new licences within the area on 10 September 1997. In April 1998 the Murrumbidgee groundwater system was identified as at risk by reason of resource over-allocation. By August 1999 the moratorium imposed in 1997 became an embargo on new licence applications.
The Water Management Act
9 The Water Management Act commenced on 1 January 2001. The objects of the Act (s 3) are to “provide for the sustainable and integrated management of the water sources of the State for the benefit of both present and future generations”.
10 Chapter 2 concerns water management planning. It includes obligations for those exercising functions under the Act to promote the water management principles in s 5 and to give effect to the State Water Management Outcomes Plan (the SWMOP) made under s 6 (see s 9). Part 2 of Ch 2 provides for the constitution of management committees for any water management area.
11 Part 3 of Ch 2 deals with management plans prepared by committees constituted under Pt 2 of Ch 2.
12 Div 1 of Pt 3 deals with certain preliminary matters. Under s 16 a management plan is to be consistent with various instruments of policy, including the SWMOP. Section 17 specifies the kinds of provisions that a management plan may contain. Section 18 imposes obligations on a management committee to “have due regard to” matters when formulating a draft management plan, including the “socio-economic impacts of the proposals considered for inclusion in the draft plan”.
13 Divisions 2 to 7 of Pt 3 deal with the provisions of management plans with respect to water sharing, water use, drainage management, floodplain management, controlled activities, and environmental protection. Where a plan provides for water sharing it must contain core provisions (s 20(1)) dealing with the establishment of environmental water rules, the identification of requirements for water within the area or from the water source to satisfy basic landholder rights, the identification of requirements for water for extraction under access licences, the establishment of access licence dealing rules for the area or water source, and the establishment of a bulk access regime for the extraction of water under access licences, having regard to these rules and requirements.
14 Division 8 of Pt 3 contains the procedures for making management plans. The procedures include notification of nominated bodies of certain general matters about the draft plan (s 36) and public exhibition of the draft plan (s 38). The management committee is to consider submissions before re-submitting the draft plan to the Minister. Under s 41 the Minister may make a management plan by order published in the Gazette. Section 42 provides that a management plan may be amended by a subsequent management plan made in accordance with Pt 2. However, s 42 does not limit the operation of Div 9 of Pt 3 (s 42(2)).
15 Section 43 deals with the duration of management plans as follows:
(1) Subject to section 43A, a management plan has effect for:
(a) if the plan commenced on 1 July in any year - 10 years from that date, or
(b) in any other case - 10 years from 1 July next after the date the plan commenced.
16 Section 43A provides for the extension of the duration of a management plan dealing with water sharing.
17 Div 9 of Pt 3 contains a single provision central to the applicants’ claims, s 45, as follows:
(1) The Minister may at any time, by order published in the Gazette, amend a management plan:
(2) (Repealed)
(a) if satisfied it is in the public interest to do so, or
(b) in such circumstances, in relation to such matters and to such extent as the plan so provides, or
(c) if the amendment is required to give effect to a decision of the Land and Environment Court relating to the validity of the plan.
(3) Before amending a management plan, the Minister must obtain the concurrence of the Minister for the Environment to the amendment.
(4) The date of commencement of a management plan may, but the duration of a management plan may not, be extended by an amendment of the plan under this section.
(5) The Minister may at any time, by order published in the Gazette, repeal a management plan (other than a management plan that deals with water sharing).
(6) The amendment or repeal of a management plan under this section takes effect on the date the order is published in the Gazette or on a later date specified in the order.
(7) An order under subsection (1)(a) varying a bulk access regime is not to be made in relation to a water management area for which a management committee for water sharing is constituted unless the Minister has consulted with the committee in relation to the proposed amendment.
(8) A provision of a management plan that authorises the amendment of the plan in accordance with section 42(2) of this Act is to be construed as a reference to an amendment authorised by subsection (1)(b).
18 Division 11 contains miscellaneous provisions. Section 46 specifies the Minister’s obligations to include certain statements in an order making a replacement or amendment to a management plan where the replacement plan or amendment will result in a reduction of water allocations in relation to which compensation might be payable under s 87AA (a right to compensation in specified circumstances).
19 Section 47 deals with challenges to the validity of management plans as follows:
(1) The validity of a management plan may not be challenged, reviewed, quashed or called into question before any court in any proceedings, other than before the Land and Environment Court in proceedings commenced within the judicial review period.
(2) The judicial review period in respect of a management plan is:
(a) the period of 3 months after the date the plan was published in the Gazette, except as provided by paragraph (b), or
(b) in relation to a provision of the plan that was inserted by an amendment of the plan (other than an amendment under section 45(1)(c)), the period of 3 months after the date that the amendment was published in the Gazette.
A judicial review period does not arise as a result of the extension of the duration of a management plan.
(5) The provisions of or made under this Act and the rules of natural justice (procedural fairness), so far as they apply to the exercise of any plan-making function, do not place on a designated person any obligation enforceable in a court (other than in the Land and Environment Court in proceedings commenced within the judicial review period).
(6) Accordingly, no court (other than the Land and Environment Court in proceedings commenced within the judicial review period) has jurisdiction or power to consider any question involving compliance or non-compliance, by a designated person, with those provisions or with those rules so far as they apply to the exercise of any plan-making function.
( 7) This section is not to be construed as applying the rules of natural justice to the exercise of plan-making functions for the purposes of proceedings instituted within the judicial review period.
(8) …
20 Section 48 requires the Minister to take all reasonable steps to give effect to the provisions of any management plan and, in particular, to ensure that any environmental water rules established by the plan are observed. Section 49 requires a public authority to have regard to the provisions of any management plan to the extent to which they apply to the public authority.
21 Division 11 of Pt 3 contains a single provision, s 50, relating to a Minister’s plan. The definition of “management plan” in the Dictionary to the Water Management Act includes a Minister’s plan. Section 50 provides as follows:
(1) The Minister may, by order published in the Gazette, make a plan (a Minister’s plan ):
(1A) A Minister’s plan may be made for more than one water management area or water source or for parts of more than one water management area or water source.
(a) for any part of the State that is not within a water management area, or
(b) for any water management area or water source, or part of a water management area or water source, for which a management plan is not in force, or
(c) for any water management area or water source, or part of a water management area or water source, for which a management plan is in force, but only so as to deal with matters not dealt with by the management plan.
(2) A Minister’s plan must in general terms deal with any matters that a management plan is required to deal with, and may also deal with any other matters that a management plan is authorised to deal with, other than matters that are already dealt with by a management plan.
(2A) Part 3 (except sections 15 and 36 - 41) applies to a Minister’s plan. However, the Minister:(3) Before making a Minister’s plan, the Minister must obtain the concurrence of the Minister for the Environment to the making of the plan.
(a) may adopt any of the provisions of sections 36 - 41 in a particular case, and
(b) may dispense with a particular requirement of Part 3 in the case of a Minister’s plan referred to in subsection (1A).
(4) Except to the extent to which this Act otherwise provides, a Minister’s plan has the same effect as a management plan.
(5) The Minister may decide whether to make a Minister’s plan or a management plan in respect of any matter (whether or not any draft management plan has been submitted to the Minister).
22 Chapter 3 of the Water Management Act deals with water management implementation. Pt 2 concerns access licences. Under s 55A Pt 2 of Ch 3 applies by declaration in a proclamation published in the Gazette. Under s 56 an access licence entitles its holder to a specified share in a water source (the share component) and to take water as specified (the extraction component). The various categories of access licence are specified in s 57, including aquifer access licences. Section 58 identifies the priorities between different types of access licence. Section 59 enables the Minister to make an available water determination by order in writing. An available water determination determines the availability of water under access licences. Section 60 establishes the rules for the making of an available water determination. It also makes provision for the suspension of those rules where the Minister is satisfied that there is a severe water shortage.
23 Other divisions of Pt 2 of Ch 3 establish the scheme for the granting, duration, and conditions of access licences. The scheme includes a register of access licences and security interests over access licences, and provisions regulating dealings in access licences (by transfer, conversion, subdivision, consolidation and the like). The provisions for dealings with access licences create a market for water entitlements. Division 8A provides for a register of available water determinations and provisions dealing with water accounting. Division 9 of Ch 3 contains s 87AA and other provisions specifying circumstances in which compensation may be claimed.
24 Chapter 7 contains enforcement provisions. Under s 341 a person must not take water from a water source other than in accordance with an access licence and from a water allocation credited to that licence and by means of a water supply work nominated by that access licence as a work by means of which water allocations credited to the licence may be taken. In other words, available water determinations (which control the credit of water allocations) regulate access to water in accordance with an access licence.
25 Section 388 enables the Minister to establish advisory and other committees for the purposes of the Water Management Act.
26 Section 398(1) permits the Minister to delegate any functions under the Water Management Act other than the power of delegation.
27 Under s 389A the Minister may authorise a catchment management authority to exercise certain functions, including “assisting the Minister or a management committee in the development of, in consultations about or in the implementation of management plans”. A catchment management authority is an authority constituted under the Catchment Management Authorities Act 2003 (s 6). The Murrumbidgee Catchment Management Authority is so constituted (Sch 1) with respect to the area of operations defined on a map identified in Sch 2 (s 7). The catchment management area of the Murrumbidgee Catchment Management Authority includes the groundwater sources the subject of the plan.
28 Section 392 establishes the State’s rights to the control, use and flow of all waters in rivers, lakes and aquifers, conserved by any works that are under the control or management of the Minister, and occurring naturally on or below the surface of the ground.
29 Schedules 9, 10 and 11 have effect by operation of s 403.
30 Under cl 1(1) of Sch 9 the regulations may contain provisions of a savings or transitional nature consequent on the enactment of various statutes, including the Water Management Act. If the regulations so provide, such a provision has effect despite any other provision of Sch 9, Sch 10, or Sch 11 (cl 1(4)).
31 Schedule 10 deals with the conversion of former entitlements under earlier legislation (including the 1912 Act) to access licences and approvals. Under cl 1, the schedule applies to an access licence that relates to a part of the State or water source to which Pt 2 of Ch 3 applies by operation of a proclamation under s 55A. A proclamation under s 55A was issued and took effect on 1 October 2006 applying Pt 2 of Ch 3 to the water sources the subject of the plan.
32 Clause 2 of Sch 10 defines “entitlement” in a manner that includes a licence referred to in Pt 5 of the 1912 Act (defined, for the purposes of the schedule, as the 1912 Act). By this means all bore licences under the 1912 Act constitute former entitlements for the purposes of Sch 10. Clause 2 also defines the following terms:
former entitlement , in relation to an access licence or approval, means the entitlement from which the access licence or approval arises because of the operation of this Schedule.
replacement access licence , in relation to an entitlement, means an access licence (including any supplementary water access licence) that, by operation of this Schedule, arises from the entitlement or from a direction under section 20AA of the 1912 Act in relation to the entitlement.
33 Pt 2 of Sch 10 deals with the conversion of former entitlements. Clause 3(1)(a)(ii) is relevant to the present matters. Clause 3 is as follows:
(1) Subject to this Schedule, an entitlement that, immediately before the appointed day, was in force under the 1912 Act, the 1948 Act or the 1994 Act is taken to have been replaced:
(a) to the extent to which it entitles any person or body to take a specified quantity of water, by an access licence held by that person or body (subject to such of the conditions of the entitlement as are applicable to an access licence):
(i) for the quantity of water so specified, or
(ii) if the relevant management plan, and regulations made for the purposes of this paragraph, indicate that a different quantity of water calculated in accordance with a specified methodology may be taken under an access licence issued in relation to the water management area or water source to which the management plan applies—for a different quantity of water calculated in accordance with that methodology, and…
The amendment order
34 The Minister made the amendment order on 1 October 2006. On the same day the proclamation applying Pt 2 of Ch 3 to the water sources the subject of the plan took effect. Also on that day, the Water Management (General) Regulation 2004 (the 2004 Regulation) was amended by the Water Management (General) Amendment Regulation 2006 (the 2006 Regulation).
35 The amendment order amended various provisions of the plan. Amongst other things, the amendment order omitted cl 3 from the plan (relating to its commencement and duration) and replaced it with a clause as follows:
This Plan takes effect on 1 October 2006, and ceases on the 30 June 2017.
36 The amendment order omitted cl 4(2) (identifying the groundwater sources referred to in the plan) and replaced it with a clause referring to a shallow groundwater source (characterised by the Shepparton formation) and a deep groundwater source (generally represented by the Calivil and Renmark formations). The applicants’ interests arise with respect to the deep groundwater source.
37 The amendment order omitted cl 16 dealing with recharge but the replacement recharge clause (also cl 16) identifies the same recharge figures as the basis for water sharing in the plan as follows:
(1) The overall basis for water sharing in this Plan is the average annual recharge to these groundwater sources, plus the requirements for basic landholder rights at the commencement of this plan and is as follows:
(2) The Minister may under section 45(1)(b) of the Act, amend subclause (1) after 30 June 2011 vary the average annual recharge values for these groundwater sources following further recharge studies undertaken by the Minister.
(a) 65,000 megalitres per year (hereafter ML/yr ), plus the requirements for basic landholder rights at the commencement of this plan for the Shallow Groundwater Source and,
(b) 335,000 ML/yr, plus the requirements for basic landholder rights at the commencement of this plan for the Deep Groundwater Source.
38 Most relevantly for present purposes, the amendment order omitted cl 25 of the plan and replaced it with provisions including the following:
25 This part is made in accordance with section 20(1)(c) of the Act.
…
25C (1) …
…
(3) For those Water Act 1912 entitlements in the Deep Groundwater Source equal to or less than 100 ML that are to become aquifer access licences in this groundwater source at the commencement of this Plan, the share component is to be equal to the Water Act 1912 entitlement.
(4) For each entitlement in the Deep Groundwater Source referred to in Column 1 of Schedule 5 applying to the licences listed in Column 2 of Schedule 5 that are to become aquifer access licences in this groundwater source at the commencement of this Plan, the share component is to be equal to the share component in Column 3 of Schedule 5.
(5) For those Water Act 1912 entitlements in the Deep Groundwater Source greater than 100 ML and not listed in Column 1 of Schedule 5 and that are to become aquifer access licences in this groundwater source at the commencement of this Plan, the share component will be established in accordance with the following formula:
SCAAL = AV +HV
Where:
(b) AV is the volume required to provide asset value protection and to protect entitlements greater than 100 ML from being reduced below 100 ML and is calculated from the following formulae:(a) SCAAL is the share component of the aquifer access licence,
AV = (WAE x 0.1857) or 100 whichever is the greater
Where WAE is the Water Act 1912 entitlement,
(c) HV is the history of extraction component and is calculated from the following formulae:
HV = (HOE R /ΣHOE R ) x (R-PEW-LWU-SD-ΣSL-ΣEXC-ΣAV)
Where:
(i) HOER = 0 where HOE ≤ AV,
(ii) HOER = HOE − AV where HOE > AV
Note. Where HOER = 0 the history of extraction component (HV) will also be 0.
(iii) HOE is as defined in subclause (6),
(iv) R is the amount of recharge established in clause 16(1)(b),
(v) PEW is the volume of recharge reserved as planned environmental water in clause 18(1)(c),
(vi) LWU is the total of local water utility access licence share components in this groundwater source at the commencement of this Plan,
(vii) SD is the total volume of domestic and stock access licences in the Deep Groundwater Source at the commencement of this Plan,
(viii) ΣSL is the total volume of all Water Act 1912 entitlements that are less than or equal to 100 ML as defined in subclause (3),
(x) ΣAV is the total of the asset value protection component volumes calculated under subclause (5)(b).(ix) ΣEXC is the sum of share components specified in Column 3 of Schedule 5, and
(6) For the purposes of subclause (5) and clause 25D HOE is equal to the greater of:
(a) the average extraction over the seven water years from 1995/96 to 2001/02 not exceeding the Water Act 1912 entitlement in 2001/02 and excluding zero and low extraction years prior to activation, or
(c) the average extraction over the six water years from 1997/98 to 2002/03 not exceeding the Water Act 1912 entitlement in 2001/02 and excluding zero and low extraction years prior to activation.(b) the average extraction over the five water years from 1997/98 to 2001/02 not exceeding the Water Act 1912 entitlement in 2001/02 and excluding zero and low extraction years prior to activation, or
Note. The rules for determining HOE are contained in Appendix 4.
(7) For the purposes of subclause (6) zero and low extraction years are years where extraction was less than 20% of the maximum volume of water extracted in any one year between 1995/96 and 2001/02.(9) It is estimated that at the time of commencement of this Plan the share components of aquifer access licences established under subclauses (2), (3), (4) and (5) for the Deep Groundwater Source will total approximately 267,500 unit shares.(8) For the purposes of subclause (6) activation is defined as the first year between 1995/96 and 2001/02 in which a licence holder extracted 20% or more of the maximum volume of water extracted in any one year between 1995/96 and 2001/02.
25D (1) Those Water Act 1912 entitlements that are to be converted to an aquifer access licence in the Deep Groundwater Source under clause 25C(3) may also receive a supplementary water access licence.
(2) The share component of a supplementary water access licence converted under subclause (1) will established [sic] in accordance with the following formula:
Where:(a) SCSWAL is the share component for the supplementary water access licence,
(c) SCAAL is the share component of the aquifer access licence established under clause 25C(4) and (5).(b) HOE is as defined in subclauses 25C(6), (7) and (8),
(3) It is estimated that at the time of commencement of this Plan the share components of supplementary water access licences established under subclause (1) for the Deep Groundwater Source will total 39,800 unit shares.
Note. Not all aquifer access licences amended under clause 25C (3) will receive a supplementary water access licences [sic] . Only those licences who have a HOE as defined in subclauses 25C(6), (7) and (8) which is greater than their new Aquifer Access Licence Share component.
25E (1) This Plan recognises that the total requirements for water for extraction within these groundwater sources may change during the term of this Plan as a result of:
(b) the variation of local water utility access licences under section 66 of the Act.(a) the granting, surrender or cancellation of access licences, or
(2) Pursuant to section 68A of the Act the share component of each supplementary water access licence in the Deep Groundwater Source will be reduced to 0 ML on 1 July 2015.
(3) Pursuant to section 77A of the Act supplementary water access licences will be cancelled after 1 July 2015.
39 Clause 25C of the plan thus distinguishes between (amongst other things) licences listed in Sch 5 and licences not listed in Sch 5 (see cll 25C(4) and (5)). The formula in cl 25C(5) results in an identified share component of an aquifer access licence (represented by SCAAL). Part of the formula concerns the history of extraction component (represented by HV). The formula for the history of extraction component includes the sum of the share components specified in column 3 of Sch 5 (represented by ΣEXC).
40 In other words, the share components in Sch 5 are factored into the formula yielding one of the integers for the calculation of each history of extraction component (or HV) regulated by cl 25C(5) and thus each share component outcome under that clause. The same proposition holds for all other amounts deducted from the recharge amount represented by PEW, LWU, SD, ΣSL, and ΣAV (being the sum of various other entitlements to water from the deep groundwater source prescribed by the plan).
41 Schedule 5 (also inserted by the amendment order, cl 25C(5)) is as follows:
Column 1 Column 2 Column 3 1912 Act Entitlement Licence(s) Aquifer Access Licence Share Component 40PT930061
40BL186295, 40BL190019
2405
40PT930572
40BL189576
1028
50PT940188
50BL196102, 50BL196791
3120
40PT930427 40BL186604 925
42 Schedule 5 is limited to the four groups of licences identified and does not include the applicants’ bore licences.
43 The amendment order omitted cl 27 of the plan, relating to long-term extraction limits, and replaced it with a clause specifying the same volumetric limits as follows:
27 (1) This Division is made in accordance with section 20(2)(a) of the Act.
(2) The extraction limit for each groundwater source each year of this Plan is the recharge established in clause 16, minus the proportion of recharge reserved as planned environmental water in clause 18, plus total water made available to supplementary water access licences under clause 29, plus the total requirements for basic landholder rights at the commencement of this plan, and are initially as follows:(a) 10,000 ML/yr in the Shallow Groundwater Source, plus the total requirements for basic landholder rights at the commencement of this plan, and
(b) 270,000 ML/yr in the Deep Groundwater Source, plus total water made available to supplementary water access licences under clause 29, plus the total requirements for basic landholder rights at the commencement of this plan.
44 The amendment order omitted cl 29 dealing with available water determinations and replaced it with a clause altering the relative priorities between various categories of licence.
45 According to cl 29 as amended:
(1) …
( 3) All available water determinations in these groundwater sources shall be expressed as either:(4) An available water determination for each category of access licence in these groundwater sources should be made at the commencement of each water year.
(a) a percentage of the share component for all access licences where share components are specified as megalitres per year, or
(b) megalitres per unit of share component for all access licences where share components are specified as a number of shares.
…
(6) The available water determination made at the commencement of the water year for aquifer access licences should be such that the total of available water determinations under this clause for each groundwater source equals the extraction limit set in clause 27(2) as varied by clause 28 minus the total requirements for basic landholder rights, minus the total available water determinations for domestic and stock and local water utility access licences and supplementary water access licences, or such lower amount as results from the operation of clause 28A(3) or subclause (7).
(7) The available water determination for all aquifer access licences in the Shallow Groundwater Source will not exceed 1 ML per unit of share component.
(8) The available water determination made at the commencement of this plan for supplementary water access licences should be 0.9 ML per unit of share component.
(9) The available water determination made at the commencement of each year after the 2006/07 water year for supplementary water access licences will be reduced by a further 0.1 ML per unit of share component, and
(10) The available water determination for supplementary water access licences will be reduced to 0 ML per unit of share component at the commencement of the 2015/16 water year.
The 2006 Regulation
46 The 2006 Regulation amended the 2004 Regulation by (amongst other things) inserting Div 4 of Pt 3 and Sch 4A. The first provision within Div 4 of Pt 3, cl 29A, provides as follows:
This Division applies to and in respect of each Part 5 entitlement referred to in Column 1 of Schedule 4A, and to and in respect of each access licence arising from any such entitlement, but not to any other entitlement or access licence.
47 A “Part 5 entitlement” is defined in cl 3 to mean a licence under Pt 5 of the 1912 Act.
48 Clause 29B provides as follows:
(1) This clause applies for the purposes of clause 3(1)(a), and clause 8, of Schedule 10 to the Act.
(2) On 1 October 2006, a Part 5 entitlement (or group of Part 5 entitlements) referred to in Column 1 of Schedule 4A is taken to have been replaced:…
(a) by an aquifer access licence with a share component of the volume specified in Column 2 of that Schedule, and
(b) if a volume is specified in Column 3 of that Schedule, by a supplementary water access licence with a share component of the volume so specified.
(3) The volumes specified in Columns 2 and 3 of Schedule 4A in relation to any Part 5 entitlement (or group of Part 5 entitlements) have been calculated in accordance with whichever of the following methodologies is relevant to that entitlement or group of entitlements:
(a)…
(c) in the case of entitlements relating to the Lower Murrumbidgee Groundwater Sources within the meaning of the Water Sharing Plan for the Lower Murrumbidgee Groundwater Sources 2003, the methodology set out in clauses 25C and 25D of that plan.
49 Schedule 4A identifies numerous entitlements for three different groundwater sources. Under the heading “Lower Murrumbidgee Groundwater Sources” the applicants’ bore licences under Pt 5 of the 1912 Act, along with other licences, are listed as follows:
Column 1
Column 2 Column 3 Part 5 entitlement Aquifer access licence Supplementary access licence Lower Murrumbidgee Groundwater Sources 40BL119208, 40BL186128, 40BL186229, 40BL187100, 40BL187101, 40BL188059, 40BL188060, 40BL188118,
40BL1907479636 1427
40BL186524 743 40BL188655 566
Overview of the effect of the statutory scheme
50 By the method described above (assuming validity of the amendment order) entitlements (or former entitlements) of holders of a licence under the 1912 Act in the Lower Murrumbidgee Groundwater Sources were converted into an access licence under the Water Management Act. Specifically, bore licences were converted into aquifer access licences with the share components identified in Sch 4A to the 2004 Regulation (as amended on 1 October 2006).
51 In accordance with this process (assuming validity of the amendment order) the entitlements of the Tubbo applicants and the Harvey applicants under their respective bore licences were converted into aquifer access licences with a share component (expressed in ML per year) as follows:
- Tubbo applicants’ former entitlements: 20,742ML per year (subject to contrary Ministerial order).
- Tubbo applicants’ converted entitlements: a share component with an entitlement of up to 9636ML per year (depending on available water determinations under cl 29) and a supplementary access licence reducing from an entitlement of up to 1284ML per year (depending on available water determinations under cl 29) to zero by 2015/16.
- Harvey applicants’ former entitlements: 7045ML per year (subject to contrary Ministerial order).
- Harvey applicants’ converted entitlements: 1309ML per year (depending on available water determinations under cl 29).
52 There are many other groups of former entitlements identified in Sch 4A under the heading “Lower Murrumbidgee Groundwater Sources”. Each group lists a bore licence number or numbers in column 1, an access licence share component in column 2, and (in some cases) a supplementary access licence in column 3.
C. The amendment and duration issues
Grounds of challenge
53 The applicants’ challenge on these grounds relates principally to cll 25C and 25D of the plan as inserted by the amendment order. Clauses 25C and 25D (quoted above) are in Pt 7 of the plan (as amended) dealing with requirements for water extraction under access licences (as required by s 20(1)(c) of the Water Management Act).
54 Before the amendment order was made, the plan dealt with the same requirement in cl 25, but in these terms:
25 (1) This Part is made in accordance with section 20(1)(c) of the Act.
(2) At the commencement of this Plan, the requirements identified for water for extraction under access licences within these groundwater sources are estimated to be as follows:
(a) 0 ML/yr in the Shepparton, and
(3) …
(b) 522,233 ML/yr in the Calivil and Renmark,
(4) Pursuant to section 42(2) of the Act, and at the commencement of year six of this plan the Minister should reduce the total share components of aquifer access licences specified in subclause (2) in the Calivil and Renmark to 125% of the extraction limit determined in clause 27, according to the following;
Amended access licence share component = access licence share component prior to amendment x ( (125(recharge – EHW))-LWU Total access licence share components prior to amendment -LWU
)
(5) Recharge in subclause (4) is the recharge established in clause 16(1), as amended by clause 16(2).
(6) EHW in subclause (4) is the volume of recharge reserved as environmental health water in the Calivil and Renmark in clause 18(1), as amended by clause 18(2).
(7) LWU in subclause (4) is the total of local water utility access licence share components in the Calivil and Renmark existing prior to any access licence amendments under subclause (4).
(8) …
(9) At the time of commencement of Part 2 of Chapter 3 of the Act, aquifer access licences in the Calivil and Renmark with a history of extraction greater than 80% of the aquifer access licence share component, as amended by subclause (4), will have a second licence, called a supplementary water access licence.
(10) A supplementary water access licence referred to in subclause (9), will have an initial share component equivalent to the history of extraction, minus 80% of the aquifer access licence share component, as if amended by subclause (4).
(11) The history of extraction referred to in subclauses (9) and (10) will be the greater of:(a) the average extraction over the seven water years from 1995/96 to 2001/02, or the average of the years within that period from which extraction was first measured, not exceeding the access licence share component equivalent in 2001/02, or
(12) Share components of all supplementary water access licences will be reduced to 0 ML/yr at 30 June 2012.
(b) the average extraction over the five water years from 1997/98 to 2001/02, or the average of the years within that period from which extraction was first measured, not exceeding the access licence share component equivalent in 2001/02.
(13) …
55 The extraction limit in cl 27, as referred to in cl 25(4), referred to the figures of 10,000ML per year for the Shepparton and 270,000ML per year for the Calivil and Renmark, in similar terms to cl 27 as substituted by the amendment order (recognising that the amended plan refers to the Shepparton as the shallow groundwater source and the Calivil and Renmark as the deep groundwater source).
56 Access to water under these provisions was also subject to the making of an available water determination by the Minister. Clause 29 of the plan before the amendment order regulated these determinations by setting out a series of rules.
57 The formula in cl 25 before the amendment order would have resulted in across-the-board cuts to all water entitlements under bore licences converted into aquifer access licences. It is common ground between the parties that the formula in cl 25(4) would have yielded proportional reductions of the entitlements of holders of bore licences (to about 52% of their previous entitlements) unconnected to their history of extraction. This fact also has significance for the applicants’ claims related to Sch 5 (see section D below).
58 The applicants submitted that: - (i) the amendment order, by substituting cll 25C and 25D for the provisions of cl 25, completely changed the basis for the allocation of entitlements to licence holders, (ii) on its proper construction s 45 of the Water Management Act does not authorise such a root and branch or radical amendment, in effect, so as to make a new plan that by-passed the plan making procedures (particularly s 18(1), which the applicants said the Minister had thereby failed to consider as required), (iii) further, s 45 does not permit the amendment of a plan that is not yet in force and effect, the consequence of which is to avoid the operation of ss 46 and 87AA of the Water Management Act relating to compensation, and (iv) in any event, the Minister also breached s 45(4) by extending the duration of the plan to 1 July 2017.
59 The applicants said that these submissions were supported by a number of considerations: - (i) neither the 1912 Act nor the Water Management Act vest rights of ownership of groundwater in the Crown, (ii) accordingly, the legislation should not be construed as interfering with landowners’ common law rights of ownership of groundwater more than strictly necessary, (iii) ordinary principles of construction also indicate that where a particular procedure to achieve something is specified in legislation, other more general procedures are thereby excluded, and (iv) Parliament cannot have intended to permit such significant changes to a plan without compliance with the processes specified in ss 18, 46 and 87AA.
60 The respondent submitted that: - (i) the applicants’ reference to construing legislation to minimise interference with common law rights is somewhat unreal and anachronistic; rights to groundwater have been regulated for many years and, in any event, are not the type of fundamental rights that would ordinarily attract this principle of construction, (ii) the applicants cited no authority for their principal proposition that the amendment exceeded the power in s 45, (iii) the legal notion of amendment is broad (Attorney-General for the State of Western Australia v Marquet (2003) 217 CLR 545 at [46]), (iii) nothing in the legislative scheme indicates that a narrow view of the power of amendment should be taken, (iv) to the contrary, the fact that amendments can be made by subsequent management plan (s 42(1)), “in the public interest”, to reflect a “change in government policy”, and may result in compensation (ss 42(1), 45(1), 46(1) and 87 – 87AB), as well as the capacity to amend a bulk access regime (s 45(7)), indicate that a broad view of the power should be taken, (v) the applicants had not established that the Minister failed to comply with s 18(1) but, in any event, the section did not apply to the amendment order, (vi) the Minister did not fail to comply with ss 46 or 87AA because neither provision applied, or could apply, to the amendment order, and (vii) the Minister did not breach s 45(4), as the duration of the plan was a consequence of the operation of the provisions of the Water Management Act.
Discussion
61 The plan before and after the amendment order is a water sharing plan (ss 19 – 21). Both versions of the plan represent the implementation of the policy of the NSW government to address the unsustainable exploitation of groundwater resources that resulted from the controlled depletion policy. Both versions of the plan reflect the underlying concept that extraction and use of groundwater must be sustainable, with sustainability ultimately measured by the recharge capacity of the groundwater source. Both versions of the plan also reflect a policy decision, consistent with the water management principles (s 5) and the obligations imposed by s 9 of the Water Management Act, to give priority to water identified as required for environmental purposes, with users to share the remaining water consistent with priorities between users and the long-term extraction limit, and subject to available water determinations. The basis of both versions of the plan for the deep groundwater source (the Calivil and Renmark) is the long-term extraction limit of 270,000ML per year in circumstances where entitlements under the 1912 Act had been allocated for 512,409ML per year.
62 It necessarily follows from these facts underlying the plan (before and after its amendment) that many licence holders under the 1912 Act would be detrimentally affected by the policy change from controlled depletion to sustainable use. Nothing in the amendment order affected that policy change.
63 Accordingly, the plan before and after its amendment is directed towards achieving the sustainable use of a resource in circumstances where, first, the resource has a limited recharge capacity and, secondly, pursuant to earlier policies bore licences had been granted authorising extraction and use of that resource in a volume far exceeding the recharge capacity. Such a policy change has been recognised as inevitably creating “winners and losers” (Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources (2005) 138 LGERA 11 at [144]).
64 The amendment order altered the method by which the policy of sustainable use of groundwater would be achieved. It did so by replacing a formula involving proportional or across-the-board reductions based principally on entitlements to extract groundwater (cl 25(4)) with a formula involving reductions based principally on historical extractions of groundwater (cl 25C(5)). Subject to the potential ameliorating effect of various aspects of the formula (including the weighting of entitlements under the 1912 Act as part of the asset value protection or AV component and the alternative periods identifying the relevant average extractions in cl 25C(6)) this change in approach would inevitably create different “winners and losers”. Those who could demonstrate use of their entitlements over the relevant periods would be likely to be better off than under a formula based on across-the-board cuts. Those who had entitlements that had not been used within the relevant periods would be likely to be worse off.
65 General principles of construction against interference with common law rights do not provide a ready answer to the issues raised by the applicants about the operation of the Water Management Act. As the respondent submitted, this approach has an air of unreality when the statutory, historical and practical context of the regulation of groundwater is considered (and see, by analogy, the observations in Telstra Corporation Ltd v Commonwealth (2008) 243 ALR 1 at [52]). The 1912 Act regulated the sinking of bores for the purpose of extracting groundwater from 1912. Before that the Artesian Wells Act 1897 operated. The rights to extract and use groundwater vested in the applicants are statutory in origin (Murrumbidgee Groundwater Preservation Association at [152]). The “cuius est solum” maxim relied on by the applicants to assert common law ownership of the groundwater has to be viewed in this context. No beneficial use could be made of the groundwater without the right to sink a bore and carry out extraction. Those rights have long been circumscribed by statute. Recognising the practical and legal context of the applicants’ position involves no departure from the observations (relied on by the applicants) that where rights of individuals of sufficient significance are involved, doubts as to legislative intention should be resolved in favour of “an interpretation which safeguards the individual” (Buck v Comcare (1996) 66 FCR 359 at 364).
66 It is true that the amended provisions of the plan lead to different outcomes for licence holders. This follows from the fact that the share components for aquifer access licences under the plan as amended are the result of the application of a different formula embodying a different policy from that contained in the plan before its amendment. I do not accept, however, that the amendments were beyond the power vested in the Minister by s 45(1)(a). Consistent with the respondent’s submissions, there are numerous indicators in the statutory scheme supporting a broad view of the power in s 45(1)(a).
67 First, the power in s 45(1) is to amend a plan (that is, the plan as a whole rather than any individual provision of a plan). The power may be exercised from time to time in the circumstances specified. These circumstances are diverse. Although the Minister relied on s 45(1)(a) alone in this case, the other circumstances specified are also relevant to the extent of the power of amendment. Under s 45(1)(b) the power to amend is constrained only by the provisions of the plan itself. Under s 45(1)(c) the only limit on the power is that the amendment be required to give effect to a decision of the Court relating to the validity of the plan. Under s 45(1)(a) the limit on the power of amendment is the Minister’s satisfaction that it is in the public interest to do so. The “public interest” criterion would entitle the Minister to “range widely” (Terrace Towers Holdings Pty Ltd v Sutherland Shire Council (2003) 129 LGERA 195 at [81]). Further, s 45(3) requires the Minister to obtain concurrence from the Minister for the Environment to the amendment and s 45(7) contemplates that an amendment might vary a bulk access regime. All of these provisions support a view of amendment as encompassing material alterations to a plan.
68 Secondly, there are other indicators in the legislation that support this broad view. Under s 42(1) a management plan may also be amended by a subsequent management plan made in accordance with Pt 3. Section 46 contemplates that an amendment might reduce water allocations in a manner that triggers the compensation provisions.
69 Thirdly, a power to amend an instrument has been broadly construed in other contexts. The power to amend a plan must include a power to repeal particular provisions of the plan and make new provisions in their stead (Marquet at [46] and the cases cited therein). The idea of amendment constituting alteration without radical transformation relied on by the applicants (see, for example, Qantas Airways Limited v Aravco Limited (1996) 185 CLR 43 at 61 and Transport Action Group Against Motorways Inc v Roads and Traffic Authority (1999) 46 NSWLR 598 at [76], [84] and [105]) must be applied in the particular context identified above.
70 The effect and operation of the plan has been altered by the amendment, but the plan has not been extinguished. Its essential character as a water sharing plan remains. The matters with which its provisions deal also remain. The way in which the plan deals with one of those matters (requirements for water for extraction under access licences), in particular, is different. I accept that this matter is important. Nevertheless, the plan as a whole has not been extinguished or so radically transformed by the amendment as to be beyond the power of amendment in s 45(1)(a), when the statutory context of that power is considered.
71 Fourthly, the applicants’ arguments about the amendment illegitimately by-passing provisions that would apply to a new plan (as opposed to an amendment) have to be assessed against the operation of the statutory provisions rather than the applicants’ pre-conceived ideas about what approach the legislature should have preferred. Legislative intent is manifested “by the use of language” in the document to be construed (Wilson v Anderson (2002) 213 CLR 401 at [8]). Accordingly:
…it is through the meaning of the text, understood in the light of background, purpose and object, and surrounding circumstances, that the legislature expresses its intention, and it is from the text, read in that light, that intention is inferred ( Singh v The Commonwealth (2004) 222 CLR 322 at [19]).
72 It follows from these observations that a general presumption about specific provisions excluding reliance on general provisions to achieve the same result cannot be mechanistically applied. The statutory provisions have to be construed in context and take their ordinary and natural meaning. They should not be approached assuming that Parliament took a narrower view of the power of amendment than the statutory provisions indicate. Once it is accepted that the amendment order was within the power of amendment in s 45(1)(a), it becomes apparent that the applicants’ arguments based on ss 18, 46 and 87AA, to which I now turn, are unsustainable.
73 Section 45 is a freestanding power of amendment. The section is not to be read down because the Minister also has a power to make a plan (s 50). The constraint on the power in s 45(1)(a) is the Minister’s satisfaction that it is in the public interest for the plan to be amended. The statute imposes no obligation on the Minister, when making an amendment order, to comply with s 18 (ss 45(1)(a) and 42(2)). In consequence, the applicants’ argument depends on an approach that treats the matter in s 18(1) as indispensable to any state of satisfaction about the public interest. The applicants, however, did not claim that the Minister failed to form the required opinion other than in a most limited way. Rather, the applicants’ arguments assumed that because the Minister relied on s 45(1)(a), the Minister necessarily failed to consider the socio-economic impacts of the proposals contained in the plan (as proposed to be amended). Further, that this failure was critical to the applicants because had the Minister considered the socio-economic impacts of the proposals the devastating effect on the applicants would have been apparent. In this limited way the applicants suggested that the Minister was not satisfied that it was in the public interest to amend the plan.
74 I do not accept that argument either as a matter of logic or on the facts. As noted, the “public interest” is a broad concept and, no doubt, would often include consideration of the socio-economic impact of proposals (as contemplated by s 18). However, consideration of that matter does not require the Minister to have regard to submissions about the particular impact of the plan on the financial position of individuals. Consistent with the respondent’s submissions, the level of generality or specificity at which the Minister approaches the socio-economic impacts of proposals in a plan, as part of the public interest, is not prescribed by the statute and thus is a matter for the Minister (Foster v Minister for Customs and Justice (2000) 200 CLR 442 at [23] and O’Sullivan v Farrer (1989) 168 CLR 210 at 216). The expression “the public interest” has been described as particularly apt to vest a decision-maker with a wide power (Deloitte Touche Tohmatsu v Australian Securities Commission (1995) 54 FCR 562 at 579), calling up the interests of the public generally rather than the interests of any individual (Director of Public Prosecutions v Smith [1991] 1 VR 63 at 76 citing Sinclair v Mining Warden at Maryborough (1975) 132 CLR 473 at 480).
75 The applicants approached the issue of the public interest at a level of specificity not warranted by the statutory provisions. In any event, the applicants bore the onus. They have not established that the Minister failed to consider the socio-economic impacts of the proposals in the amendment order (at the potential level of generality at which that requirement may operate). These conclusions are also relevant to the resolution of the procedural fairness claims addressed below. Insofar as it might be necessary to say so I am satisfied the Minister formed the required state of satisfaction that it was in the public interest to amend the plan. The Minister’s decision of 24 September 2006 records that state of satisfaction in terms.
76 Other difficulties attend the applicants’ approach to s 45(1)(a). The applicants contend that the Minister used the amendment power to avoid the limitation that would otherwise apply in ss 46 and 87AA, whilst at the same time avoiding s 18. The language of “avoidance” is inapt. The Minister had a power of amendment and was entitled to exercise it. Section 18, as noted, did not condition that exercise of power. Section 46, in terms, depends on s 87AA applying (“in relation to which compensation might be payable under section 87AA…”). Section 87 deals with compensation where the relevant reduction occurs “during the period for which the first management plan that established the bulk access regime concerned is in force” (s 87(9)). Section 87AA deals with compensation where the relevant reduction occurs other than while the first management plan was in force (s 87AA(3)(a)).
77 The plan in this case first came into force on 1 October 2006 in its amended form (by cl 3 of Sch 1 to the amendment order). The plan was never in force in its unamended form. Accordingly, there are no rights of compensation in accordance with ss 87 or 87AA. Instead, this situation is governed by s 87AB, which excludes any compensation for conduct (such as the change in government policy from across-the-board cuts to a history of extraction) before the plan commenced. Sections 45(4) and 87AB also undermine the applicants’ argument that the power in s 45(1)(a) is not available before a plan commences.
78 As the respondent submitted, the applicants only became the holders of an access licence on 1 October 2006, by dint of the provisions discussed above. The applicants’ bore licences are not access licences for the purposes of the Water Management Act (see the Dictionary to that Act). For these reasons, the applicants’ water entitlements were not reduced as a consequence of the variation of a bulk access regime (s 87) or reduced while the first management plan was in force (s 87AA). The circumstances of this case could never have attracted the operation of ss 46 or 87AA; there was nothing for the Minister to avoid.
79 The other point pressed by the applicants relating to these issues concerned the duration of the plan. The applicants submitted that the Minister, by cl 3 of the amendment order, extended the duration of the plan in breach of s 45(4). But for the amendment the plan would have continued for 10 years from 1 October 2006 (cl 3 of the plan before its amendment). By cl 3 as amended the Minister extended the duration of the plan until 30 June 2017. According to the applicants, s 43(1)(b) is no answer because, if applicable, it would mean that the plan did not commence until 30 June 2007, in which event the conversion of the applicants’ entitlements from bore licences into aquifer access licences also could not have occurred on 1 October 2006.
80 These arguments cannot be sustained, essentially for the reasons given by the respondent. Section 43(1) is clear. If the commencement date of a plan is other than 1 July then the plan has effect for 10 years from 1 July next after the date the plan commenced. The provision deals only with the duration of a plan, not its commencement. The plan is effective from commencement (whatever its commencement date) and then continues in effect for either of the two nominated periods. In this case, because the plan (as amended) commenced on 1 October 2006, the plan remains in effect until 30 June 2017 by operation of s 43(1)(b). The Minister did not, by cl 3 of the amendment order, extend the duration of the plan. The duration of the plan simply reflects s 43(1)(b).
81 The applicants’ approach to s 43(1)(b) assumes that the section operates to defer the operation of plans commenced other than on 1 July to the next 1 July. Construed in context, s 43(1)(b) does not have that effect. Plans commence on publication or such later date as may be specified in the plan (s 41(3)). Once commenced, they take effect. Section 43 regulates the period for which they remain in effect. That period may not be extended (subject to s 43A, which is not relevant to this case). The Minister did not extend the duration of the plan in breach of s 45(4).
D. Procedural fairness
Grounds of challenge
82 The applicants submitted that the amendment order was made in breach of the Minister’s obligation to give the applicants procedural fairness. The central aspect of this claim was Sch 5 to the amendment order.
83 The applicants said Sch 5 reflected the Minister’s decision that certain holders of bore licences were in a position of “special circumstances”. Licence holders identified by Sch 5 were granted an aquifer access licence with a share component in accordance with the position they would have enjoyed had the plan not been amended (in effect, a share component reflecting the position of across-the-board reductions to 52% of former entitlements). Further, the sum of these water entitlements in Sch 5 became an integer in the formula used to determine each and every other licence holders’ history of extraction component and, thereby, share component. This is because one step in the calculation of HV (or history of extraction component) in cl 25C(5) is reached by deducting, amongst other things, ΣEXC (the sum of the share components in column 3 of Sch 5) from the recharge amount. By this method, each and every licence holders’ share component is reduced, to some extent, by the components vested in the licence holders separately dealt with in Sch 5 (with the consequence that Sch 5 is not severable).
84 The applicants were holders of bore licences not included in Sch 5. The applicants contend that Sch 5 gave rise to an obligation on the Minister’s part to give procedural fairness because: - (i) including Sch 5 in the plan involved the singling out of individuals and dealing with their interests, as individuals, in a manner substantially different from the manner in which other holders of bore licences were dealt with pursuant to the general rule established by cl 25C(5), (ii) the nature of the interests affected was the conversion of bore licences held by individuals, to which important entitlements (to extract groundwater) were attached, (iii) Sch 5 thus has the character of a decision on individual rights rather than a legislative act applying equally to all, (iv) the fact that provisions of a statute may reflect some of the requirements of procedural fairness is insufficient to indicate any legislative intention to exclude the common law, (v) s 47(5) shows that the legislature turned its mind to the requirements of procedural fairness and contemplated (and certainly did not exclude) their application to plan-making functions, and (vi) the applicants were effectively invited to have their individual positions dealt with as potentially constituting an anomaly or special circumstances.
85 According to the applicants, the Minister did not give the applicants procedural fairness because: - (i) the applicants were never told by any of the many, varied (and confusing) bodies and committees involved in the amendment process of the criteria to be applied to determine the existence of special circumstances so as to become eligible for inclusion in Sch 5, (ii) indeed, those criteria were deliberately withheld from the applicants so that their submissions did not address the criteria, with the consequence that they only became aware of the criteria after the amendment order had been made, when it was too late, (iii) the applicants were never told about the nature or content of any material relied on by those bodies and the Minister (including recommendations from those bodies and the reasons for them) to determine that the applicants were not eligible for special circumstances and inclusion in Sch 5, (iv) in any event, that material was an inaccurate and incomplete summary of their individual circumstances, (v) the various bodies considering the issue of special circumstances and making recommendations to the Minister were not authorised by the Water Management Act to do so and acted on criteria not approved by the Minister and, indeed, inconsistent with the criteria or “key principles” that had been approved (namely, to recognise water-dependent investment made by licence holders and that all groundwater entitlements, whether extracted or not, have value), (vi) those bodies inflexibly applied a policy for determining special circumstances (namely, the criteria not disclosed to the applicants), (vii) the applicants were never given reasons for their ineligibility for special circumstances and consequential exclusion from Sch 5, and (viii) had the applicants been notified of the criteria they were required to meet both would have submitted information capable of establishing the existence of special circumstances but, by reason of the denial of procedural fairness, lost the opportunity to do so.
86 The Harvey applicants relied on additional submissions to the effect that: - (i) by reason of the procedural defects identified above, the Harvey applicants’ claim for special circumstances was never identified and thus never considered as such, (ii) people involved in the decision-making process made inquiries of and obtained information from third parties about the Harvey applicants’ position, without the Harvey applicants being informed or given an opportunity to comment on that information, and (iii) the committee that initially determined requests for special circumstances (albeit not being authorised to do so) concluded adversely to the Harvey applicants that they had not identified the issue they were disputing. The committee did so without giving the Harvey applicants the opportunity to respond to the alleged omissions in their information (in contrast to other licence holders who were given that opportunity, were determined to be eligible for special circumstances, and thus became subject to cl 25C(4) and Sch 5 rather than the general formula in cl 25C(5)).
87 The applicants denied the respondent’s submission (going to discretion) that the effect of invalidity of the amendment order would be that the plan operated in its unamended form. According to the applicants the provision that effected the conversion of bore licences under the 1912 Act is cl 3 of Sch 10 to the Water Management Act (which provides that entitlements under the 1912 Act are taken to have been replaced as identified). The pre-condition to the conversion in cl 3(1)(a)(ii) is an indication of a quantity of water different from an entitlement under the 1912 Act in both a water management plan and regulations made for the purpose of cl 3(1)(a)(ii). The 2004 Regulation (as amended by the 2006 Regulation) identifies the applicants’ share component as consisting of a quantity of water different from that in the plan before its amendment. Hence, a water management plan and regulation for the purposes of that clause do not both indicate a different quantity of water. The pre-condition in cl 3(1)(a)(ii) is not satisfied. The consequence is that the deeming effect of cl 3(1)(a)(ii) has not been triggered. The applicants’ rights under their bore licences thus remain. Alternatively, the respondent’s approach if the amendment order is invalid assumed the existence of an available water determination with respect to the plan before the making of the amendment order when there was no evidence of such a determination. The respondent’s approach also failed to recognise that an available water determination is only relevant where a licence relates to a specified proportion of water rather than a specified volume (see s 56(2)). Even if cl 3(1)(a)(i) of Sch 10 applies the applicants’ aquifer access licences would be for a specified volume of water not a specified proportion of water.
88 The applicants also denied the respondent’s contention of consequential chaos in that: - (i) the plan had been deferred from commencement for a long period to enable work to be completed, (ii) the work simply remained incomplete (because of the denial of procedural fairness), (iii) the Minister could make a new plan in accordance with law, (iv) the only consequence of invalidity of the amendment order for third parties is that all licence holders will still retain their entitlements under the 1912 Act unless and until a plan is made (by reason of the operation of cl 3(1)(a)(ii) discussed above), (v) the discretionary grounds on which the respondent relied were outside the class ordinarily relevant where jurisdictional error is demonstrated, (vi) the evidence does not disclose the assumptions of third parties involved in trading of water rights, and (vii) the respondent’s discretionary arguments would effectively set aside the terms of s 47, which provide a period of three months for any challenge to the validity of a plan (these proceedings having been commenced within the three month period).
89 The respondent submitted that the Minister had no obligation of procedural fairness with respect to the making of the amendment order because: - (i) whilst not determinative, the activity of making and amending a plan is essentially legislative in character as plans are intended to contain general rules applying to the State or large areas of the State, (ii) the criteria for activating the amendment power is not conditioned upon the right or interest of any individual but, rather, broad considerations (relevantly, in this case, the Minister being satisfied the amendment was in the public interest), (iii) the power in s 45 is also not conditional on consultation subject to ss 45(3) and (7), and (iv) this may be contrasted with s 42 and a number of other provisions expressly providing for rights of consultation (for example, ss 67 and 102).
90 The respondent also submitted that: - (i) the distinction drawn by the applicants between the position under cl 25C(5) and under cl 25C(4) and Sch 5 is illusory because every aspect of a plan is liable to affect the ultimate interests of every licence holder and thus may create “winners and losers” (which is inevitable given the fact the plan is a water sharing plan of a limited resource), (ii) even the determining of policies and criteria themselves are likely to have that differential effect, with the consequence that, on the applicants’ arguments, they had a right to be heard abut the policies and criteria as well, (iii) it would be strange if a failure to notify the persons nominated in s 36(2) could lead to invalidity by denial of procedural fairness when s 36(3) provides that failure to so notify does not invalidate a plan, and (iv) it would be more strange if the Minister decided that the notification and exhibition requirements should not apply (as authorised by s 50(2A)) and then could be found to have denied procedural fairness by doing that which Parliament expressly authorised.
91 The respondent said s 47(5) did nothing more than ensure this Court has jurisdiction to deal with any challenge based on this ground, thereby overcoming the issue in Warringah Council v Edmondson [2001] NSWCA 1 (as indicated by s 47(7)).
92 The respondent submitted further that, if the rules of natural justice are attracted to these functions, they are apt to create chaos. Plans apply to large areas of the State and many people could be affected by setting aside a plan or amendment because one individual was not notified, properly informed of something, told about adverse material or the like. The respondent also asked (rhetorically) at what stage the duty arose, how it would align with the statutory provisions requiring notification, consultation and exhibition, and to whom the duty was owed. Finally, the respondent observed that it would be a strange incentive for the Minister to be better off by not attempting to deal with individual hardship cases (attracting the rules of natural justice) than otherwise. Accordingly, the Minister was entitled to inform himself and apply criteria as he saw fit untrammelled by any obligations of natural justice.
93 Alternatively, the respondent submitted that, if any duty of procedural fairness attached to the making of the amendment order, then the Minister complied with that duty as: - (i) procedural fairness can be given through other bodies such as committees, (ii) the applicants were invited to make submissions on 21 December 2005, (iii) the applicants had the opportunity to vote in the referendum on weighting options between active and inactive water in April 2006, (iv) both applicants in fact made numerous submissions that were considered by various bodies, including the Minister who must have been well aware of their particular concerns, (v) there is no evidence of any particular information or conclusion adverse to the applicants other than the decision not to include the applicants in Sch 5, and (vi) in any event, there is no obligation to inform parties of preliminary conclusions or thought processes.
221 Fourthly, the power to amend a plan if the Minister is satisfied that it is in the public interest to do so, which is exercisable from time to time, will itself necessarily involve an adjustment between one interest and all other interests.
222 These matters indicate that if the Minister’s exercise of power to amend a plan if satisfied that it is in the public interest to do is conditioned on the giving of procedural fairness, then the duty would be owed to each and every person with any interest potentially affected by the plan.
223 The applicants described their bore licences as an important and valuable right attached to their properties. They characterised the amendment order (more specifically, the fact they do not appear in Sch 5) as an interference with or diminution of these rights as a consequence of a process singling out individuals without giving the applicants procedural fairness. The context, however, must not be lost. Context tends to be lost by treating Sch 5 as if it involved a decision-making process in isolation from the broader operation of the statute, including the transitional arrangements in Sch 10 applicable to each and every licence under the 1912 Act.
224 Schedule 5 demonstrates the importance of these propositions. Every drop of water allocated to the licence holders nominated in Sch 5 reduced the total available to each and every other licence holder affected by cl 25C(5). In this sense, each and every submission made by any licence holder that might have led to their inclusion in Sch 5 was adverse to the interests of each and every other licence holder. So too, however, every submission by any licence holder affected by cl 25C(5) (and thus not in Sch 5) about their own history of extraction (irrespective of any claim for special circumstances) was potentially adverse to every other licence holder because of the proportional adjustments embedded in the formula for determining any one licence holder’s share component (cl 25C(5)). The same propositions, moreover, hold for each other adjustment in cl 25C (such as the decision to give the same amount of water to those whose entitlements were equal to or less than 100ML as set out in cl 25C(3)), including the adjustments embedded in the formula in cl 25C(5). Schedule 5 (given effect by cl 25C(4)) thus represented but one small component of the more general process of statutory conversion of each and every licence under the 1912 Act into an aquifer access licence under the Water Management Act with a share component in a limited resource.
225 As the respondent submitted, this statutory context suggests that an exercise of power to amend a plan under s 45(1)(a), properly analysed, does not involve an impact on individuals in the requisite direct and immediate sense, irrespective of the form or manner of any particular exercise of the power. Any amendment to a plan will necessarily impact on all people with any interest in the water source as a class even though the impact itself might be different. This is so whether the relevant provision is expressed in general terms or (as in Sch 5) by reference to individual licences. Hence, in the present case every provision of the amendment order affected licence holders by reference to their status as members of the class of holders of licences to be converted into access licences. Within that class every adjustment affected (albeit differently) every member of the class.
226 There are other indications in the statutory scheme of relevance. The Minister’s power to amend a plan in s 45(1) is freestanding. It is not subject to the more general capacity for amendment in s 42 (s 42(2)). Section 45 requires the Minister to obtain concurrence from the Minister for the Environment but does not otherwise prescribe any consultation or notification obligations on which the power is conditioned. This is consistent with the special position of the Minister in the statutory scheme. The notification and exhibition provisions in ss 36 – 41 do not bind the Minister when making a plan unless the Minister chooses to adopt those provisions in any particular case (s 50(2A)). Section 47(5) refers to the rules of natural justice (procedural fairness) in the context of the jurisdiction of this Court (overcoming the effect of Edmondson) and must be read in the light of s 47(7). In contrast, the statutory provisions are specific about the Minister’s notification obligations when it comes to dealing with individual access licences (in contrast to the general statutory conversion effected by Sch 10). Sections 67 (subsequent imposition of conditions on an access licence), 78A (suspension or cancellation of access licences), and 102 (imposition or variation of conditions on approvals) are examples of such provisions. In isolation these provisions may be too equivocal to be determinative. But they are consistent with an approach to the nature of the statutory power of amendment described above.
227 The nature of the power in s 45(1)(a), considered in this statutory context, is inconsistent with the application of the duty of procedural fairness. Adopting the language of the various decisions discussed above, it is a power that, if exercised, will affect a large and potentially indeterminate number of people. Even where apparently directed to any one individual or to an identifiable class, all other individuals with an interest in the water source will be affected by reason of the interlinked interests involved. It is a power exercisable from time to time to enable the Minister to manage a limited resource consistently with the water management principles, conditioned not on the interests of any individual but the Minister’s view of the public interest. Factors influencing the Minister may be both foreseen and unforeseen. They will involve potentially conflicting considerations about a basic resource. Resolution of these considerations is a political endeavour for which the Minister takes political responsibility. For these reasons I do not accept the applicants’ submissions that an exercise of power under s 45(1)(a) is conditional on the giving of procedural fairness.
228 It follows from this conclusion that the applicants’ focus on the process as involving an invitation to have a licence holder’s special circumstances considered is immaterial, as are the details of the process. As the respondent submitted, the doctrine of legitimate expectations cannot impose a duty where none exists (Darling Casino at 609, Quin at 39 and Lam at [82]). Accordingly, the Department’s extensive endeavours to consult widely with potentially affected people cannot impose a duty of procedural fairness on the Minister exercising powers under s 45(1)(a) when none exists.
229 If I am wrong about the duty issue, these matters are equally relevant to content.
230 The applicants’ submissions highlighted the distinction between those claiming “special circumstances” and others. The label “special circumstances” (although used routinely by the Department, the various committees and the Minister after the change from “anomalies”) tends to obscure the process as it in fact unfolded. A request for “special circumstances” meant a licence holder who had responded to the invitation to dispute their history of extraction by submitting that, for some reason or another, the history of extraction approach to water sharing between licence holders with interests in the same water sources should not apply to them at all. Numerous licence holders took that opportunity of their own volition. Given this, it is difficult to accept that any duty of procedural fairness prevented the Department, the GAAC and the MRGVC from thereafter reviewing the submissions and deciding that those that established purchase, development or investment based on the plan before the announcement of the history of extraction approach were not adequately dealt with. In other words, as the sequence of events described above discloses, the criteria for acceptance of special circumstances emerged from the Department’s consideration of the submissions made. There was no representation or declared procedure indicating anything else would occur.
231 The applicants’ argument, when analysed, is that the duty of procedural fairness required the Minister to (at least): - (i) give every licence holder an opportunity to present an individual case to the Minister (whether directly or through the use of delegates and committees) as to why the history of extraction approach to water sharing ought not to apply to them, (ii) inform every licence holder of the framework or criteria which the Minister would apply to assess such submissions, (iii) give every licence holder the opportunity to make submissions as to the appropriateness of the framework or criteria, (iv) consider each submission, (v) inform each licence holder of any reason why their submission as to the framework or criteria and as to the application of the history of extraction approach to them was not persuasive, and (vi) allow each licence holder to address these “adverse conclusions” before any exercise of power to adjust the basis for water sharing in the plan. The cases discussed above, however, expose the variable content of the duty. As Mahoney JA observed in Gardner (at 552C), procedural fairness (if a condition of an exercise of statutory power) does not necessarily require the giving of an opportunity to present an individual case or present a case individually. The statutory scheme imposes no such obligation on the Minister (see above).
232 A failure to adhere to a declared procedure may constitute or result in a failure to accord natural justice (Darling Casino at 609). In this case, however, the declared procedures did not involve any consideration of individual circumstances by the Minister. Insofar as there was any declared process it involved a committee considering submissions licence holders had taken the opportunity to make outside the scope of the invitation to verify or dispute records of their history of extraction. The Minister’s letter of 17 May 2006 referred to this committee and assured the Tubbo applicants their submission would be taken into account in making the final decision. In context, this is a reference to the stakeholder consultation being undertaken through the committee under the control of the Murrumbidgee Catchment Management Authority. It is not a declared process in which the Minister personally would undertake a review of all submissions presented as a late developer or special circumstances. As the respondent submitted, the Minister simply adopted the recommendations made. Given the statutory provisions and the terms of the declared procedure (insofar as it was declared at all) there was no obligation on the Minister to turn his mind to the circumstances of any individual licence holder.
233 Nor, practically, could the Minister be so bound. The consultation process concerned the basis for water sharing in water sources across six regions. All 1405 licence holders across the six regions were invited to dispute their history of extraction. About 335 did so with many others using the opportunity to present a case as a late developer or as having special circumstances. After responses by the Department there were still 187 licence holders who requested a further review by the regional groundwater verification committees. As discussed above any attempt to maintain a meaningful distinction between cl 25C(4) of the plan (making Sch 5 operative) and cl 25C(5) (or any other water sharing provision such as cl 25C(3)) founders when confronted by the way in which the plan actually operates.
234 If the applicants are correct about the duty requiring the Minister to consider the individual circumstances of licence holders then the applicants’ submissions do not disclose any logical reason to limit the duty to those claiming special circumstances. A licence holder disputing their history of extraction and a licence holder claiming special circumstances both involved the interests of the individual (at least as posited by the applicants).
235 On this basis the Minister would have had to consider the responses of all 1405 licence holders (or at least an accurate summary of each of their cases). Moreover, on the applicants’ approach to the duty, the Minister would have had to inform each and every one of them about any adverse conclusion before being able to proceed further. As I have said, every time the Minister accepted one person’s submission it would be potentially adverse to every other person with an interest in the same water source because the interests are interlinked and potentially competing. This “would be unworkable, because it would lead to an infinite regression of counter-disputation” (South Sydney City Council at [267]). It would also be incapable of achieving the statutory objective of “the sustainable and integrated management of the water sources of the State for the benefit of both present and future generations”.
236 For these reasons, I do not accept that any duty of procedural fairness required the Minister to provide any licence holder with an opportunity to present an individual case or present a case individually (Gardner at 552C). The applicants did not suggest that any person or body other than the Minister (such as the MRGVC) owed a duty of procedural fairness.
237 I also do not accept the applicants’ submissions based on lack of and confused lines of authority from and between the Minister, the Department, the GAOC, the GAC, the GAAC, and the MRGVC. It is true that discrepancies are apparent when one compares the terms of reference of the various committees with the actions taken by those committees. It is equally true that the documents do not disclose any written authority from the Minister to the various committees (or, indeed, the Murrumbidgee Catchment Management Authority). Section 388 allows the Minister to establish advisory committees. Section 389A allows the Minister to authorise catchment management authorities to assist in the development of, in consultations about or in the implementation of management plans. Neither section involves a delegation of the Minister’s functions or requires the establishment or authority to be in writing.
238 The Minister, as the facts recorded above disclose, knew the various committees existed and knew what they were doing. The amendment order involved an adoption of the committees’ recommendations. In making the amendment order the Minister must be inferred to have authorised the committees’ activities irrespective of the terms of reference. The presumption of regularity operates with respect to the committees and their activities in terms of Ministerial authority (see, for example, Roads and Traffic Authority (NSW) vAshfield Municipal Council (2005) 141 LGERA 278 at [50] – [61] and VAW (Kurri Kurri) Pty Ltd v Scientific Committee (Established under s127 of the Threatened Species Conservation Act 1995) (2003) 58 NSWLR 631 at [226]).
239 In any event, the Minister was entitled to receive advice from any source the Minister chose. The fact that he did so through various committees (whatever their constitution or terms of reference) does not indicate any breach of procedural fairness. As the respondent submitted, the nature of the task at hand would render it impractical for the Minister personally to review all submissions and the Minister had no obligation to do so. The Minister was entitled to rely on his Department and the various committees established for the purpose of review, advice and recommendations. The potential for confusion in the minds of licence holders (specifically, the applicants) about the lines of authority raises a different issue. In this case, however, the complexity of those lines of authority is not material. As the respondent observed, both applicants (one way or another) made multiple submissions to most people and bodies in some way involved in the decision-making process. Further, if I am correct about the content of any duty, the applicants’ submission that the Minister improperly delegated part of his function to the committees should not be accepted.
240 If a contrary conclusion about the content of the duty is reached (that is, the Minister was bound to consider the circumstances of each licence holder claiming special circumstances) then many of the applicants’ claims can nevertheless readily be dismissed. This is because the applicants’ submissions sought to impose on the making of the amendment order all of the machinery and onerous requirements of an adversarial hearing by a judicial or quasi-judicial body.
241 The applicants submitted that because the ASGE program identified certain key principles (to recognise water-dependent investment made by licence holders and that all groundwater entitlements, whether extracted or not, have value) they were entitled to make submissions about the matters that could be considered by those involved in the decision-making process when identifying whether a licence holder was subject to special circumstances. I disagree. First, the applicants’ case appeared to assume that the process with respect to anomalies or special circumstances was represented to them as inevitably leading to inclusion or exclusion from Sch 5. That is incorrect. For much of the process, the various committees involved considered that any case of an anomaly or special circumstances would not be dealt with in the plan at all but through financial assistance. Secondly, the applicants’ case appeared to assume that the plan as amended is inconsistent with the key principles. That involves a highly subjective view of both the key principles and the provisions of the plan and seems to disregard the intricacies of cl 25C (particularly the asset value protection component and the weighting component in the formula in cl 25C(5)). Thirdly, with an interlinked series of interests, every consideration thought to be relevant by any person involved in the process, on the applicants’ case, would have to be notified to the applicants (indeed, to every interested person) before the matter could proceed further. This approach to the content of any duty of procedural fairness has already been dismissed above.
242 For similar reasons and on the same assumption, I do not accept the applicants’ submissions about not having been notified of adverse conclusions (either generally or specifically, in the case of the Harvey applicants and the letter from Coles Supermarkets) as a breach of the requirements of procedural fairness. As the respondent submitted, procedural fairness does not ordinarily require a decision-maker to disclose their thinking process (for example, South Sydney City Council at [261]). Again, in the context of what the process of making the amendment order involved (including but not limited to Sch 5), imposing an obligation on those in any way involved in the decision-making process to disclose to licence holders every piece of information that might be considered adverse would be unworkable because it too would lead to an infinite regression of the kind identified in South Sydney City Council at [267]. The same reasoning applies to the submission that procedural fairness required the applicants to be informed about the recommendations of the MRGVC and given another opportunity to comment before the Minister made a final decision.
243 The submission that the Minister improperly failed to advise the Harvey applicants of adverse information from Coles Supermarkets is unsustainable on the facts. Coles Supermarkets wrote to the Minister at the request of Mr Harvey. An adviser to the Minister called the author of the letter in an attempt to understand the context of the letter (which was not readily apparent on its face). Nothing suggests that the information obtained (namely, that it related to the change of policy to share components based on history of extraction) was adverse to the Harvey applicants in any meaningful sense.
244 I also do not accept the suggestion that there was some inflexible application of policy thereby denying the applicants procedural fairness. As the respondent submitted, the Minister was entitled to give effect to government policy about using history of extraction as a method for reducing extractions of groundwater to sustainable levels. Under s 16(1), management plans are required to be consistent with government policy. An amendment to a plan that the Minister considered in the public interest could not be invalid for giving effect to that which the statute requires. This demonstrates some of the difficulty in accepting the applicants’ other proposition that the amendment order was invalid because the Minister failed to consider the individual circumstances of the applicants. The Department’s review of the various submissions received during the exhibition period raising issues of individual unfairness is telling. The comment on the submissions about individual unfairness (which I infer was endorsed by the Minister given his referral to the review and comments in the letter of 18 September 2006 seeking concurrence from the Minister for the Environment) was “Cabinet has endorsed the default method of entitlement reduction as recommended by the Murrumbidgee CMA after extensive consultation”.
245 The issue of reasons seemed to be related to the applicants’ case on ss 46 and 87AA discussed under the “amendment challenge” ground above. Insofar as it might be related to the procedural fairness ground, I do not accept that the Minister was obliged to give reasons about the amendment order or any part of it (such as Sch 5). The Water Management Act does not impose any obligation on the Minister to give reasons for an exercise of power under s 45(1)(a) either by express provision or necessary intendment. The applicants’ arguments based on ss 46 and 87AA as requiring reasons fail to recognise that the sections depend on the existence of objective facts arising from the operation of the plan or amendment. Similarly, the idea that the Minister for the Environment must be given reasons to provide meaningful concurrence under s 45(3) is unsustainable. The provisions of the amendment suffice for discharge of that function. As the respondent observed, if the Minister for the Environment required more then a request could be made.
246 If the Minister was subject to a duty of procedural fairness in making the amendment order and the duty required the Minister to consider individual submissions of licence holders as to why the history of extraction approach ought not to apply to them, then the facts disclose only one real issue. The issue is simply that, having reviewed the submissions and worked out the framework within which it was agreed that the regional verification committees should assess submissions for special circumstances, the submissions as made were passed on to the MRGVC without the applicants (or, presumably, other licence holders) being informed of the framework. In this regard I accept that the period of December 2002/February 2003 to June 2004 and the assumption of 52% of entitlements were not obvious or self-evident to those seeking to escape the application of the history of extraction approach (see OzEpulse Pty Ltd at [55] – [56]). Further, the communications from the NSW Irrigators’ Council did not make them so (recognising that the NSW Irrigators’ Council was not representing the Minister but was merely a member of the GAAC and MRGVC). But the process must be considered as a whole to determine the question of breach of any duty.
247 The framework or criteria emerged from consideration of the submissions themselves. The process never involved more than looking at the submissions already made. In this sense, there were no “secret criteria” to obtain special circumstances as the applicants submitted. When submissions were invited and made there were no criteria at all other than the published rules with respect to history of extraction.
248 When making recommendations as to whether any licence holder had special circumstances the MRGVC, as Mr Painting said, considered each individual case on its merits and generally recommended that there were special circumstances where licence holders could demonstrate purchase, investment and development between December 2002/February 2003 and June 2004 on the assumption that there would be a cut in entitlements to 52% of entitlements under the 1912 Act. This is consistent with the documentary evidence.
249 Annexure D to the email of 13 April 2006 and subsequent documents demonstrating the process of consideration show that, but for the time period between December 2002/February 2003 and June 2004 and the assumption of 52% of entitlements guiding the purchase, investment, or development potentially relevant factors were identified (rather than mandated), and were subject to the express overriding requirement that each individual licence holder’s submission claiming special circumstances be carefully considered. The process adopted by the MRGVC shows that each licence holder’s submission was carefully considered across the full range of matters raised.
250 It is true that the applicants (particularly the Harvey applicants) possessed information relevant to their investments and developments in the period of December 2002/February 2003 to June 2004 on the assumption that they would have access to at least 52% of their former entitlements. If (contrary to my conclusions) the process miscarried because they were not informed about the framework or criteria the Department had formulated by considering the submissions then difficult issues of discretion would arise.
251 With respect to discretion, I accept the respondent’s submission that, if the amendment order is invalid, the plan commenced in its unamended form on 1 October 2006. Accordingly, the plan (in its unamended form) would provide the basis for available water determinations. The position of the applicants can never be a return to their entitlements under the 1912 Act. In common with every other licence holder, the applicants can never obtain a greater entitlement than their proportion of available water determinations made having regard to (amongst other things) the long-term average extraction limit of 270,000ML per year established by cl 27. The applicants’ argument that the plan never commenced in its unamended form overlooks two facts. First, the plan immediately before the amendment order provided a commencement date of 1 October 2006. Secondly, the validity of the proclamation under s 55A has not been challenged in these proceedings and must be assumed to be valid. The proclamation relates in terms to the water sources the subject of the plan irrespective of the amendment order.
252 The applicants are two licence holders in the deep groundwater source (amongst at least 176 others) who had a bore licence converted to an aquifer access licence with a share component involving entitlements to a different quantity of water. Specific evidence of reliance on the validity of the plan as amended by licence holders is not required. It is obvious that since 1 October 2006 many people will have made arrangements in reliance on the operation of the plan, including the temporary and permanent trades and compensatory payments referred to by the respondent. The fact that the challenge was brought within the period of three months provided in s 47(2) would not undermine the inevitable question of the proportionality of the remedy of declaring the amendment order invalid having regard to the potential impacts on the position of third parties (as contemplated by Vanmeld at [78]).
253 Given my principal conclusions set out above, however, it is not necessary to consider this difficult issue of discretion.
254 The applicants have not established that the amendment order is vitiated for jurisdictional error. The amendment order involved an amendment to the plan authorised by s 45(1)(a) of the Water Management Act. It did not involve any extension of the duration of the plan in breach of s 45(4) of that Act. The Minister did not owe the applicants a duty of procedural fairness when making the amendment order. Alternatively, if he did, the content of the duty did not require the Minister to hear or consider submissions from individual licence holders about the reasons why they should be treated as having special circumstances. Accordingly, the applicants have not made out their cases for declaratory and other relief. The orders are as follows in each matter:
(2) The exhibits may be returned. The parties are directed to notify my Associate within 7 days whether they agree with respect to the issue of costs. If not agreed, the matter will be listed for a short hearing on costs as soon as possible.(1) The Class 4 applications are dismissed.
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