Hazelwood Power Partnership v Latrobe City Council
[2016] VSCA 129
•3 June 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0007
| HAZELWOOD POWER PARTNERSHIP (ABN 40 924 759 557) | Applicant |
| v | |
| LATROBE CITY COUNCIL | Respondent |
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| JUDGES: | WARREN CJ, OSBORN and BEACH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 18 March 2016 |
| DATE OF JUDGMENT: | 3 June 2016 |
| MEDIUM NEUTRAL CITATION: | [2016] VSCA 129 |
JUDGMENT APPEALED FROM: | [2015] VSC 638 (Garde J) |
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LOCAL GOVERNMENT – Vesting of public sewers and drains in Council – Purposes, responsibilities and powers of municipal councils discussed.
STATUTORY INTERPRETATION – Section 198 of the Local Government Act 1989 – Meaning of ‘public drain’ – Words used in their common and ordinary meaning – Whether a drain is public is a question of fact – Identification of relevant factors – Function of drain – Purpose of drain – Other relevant circumstances.
WATER LAW – Whether a reasonable flow of water – Water Act 1989 ss 16(2), 20(1) – Gartner v Kidman (1962) 108 CLR 12 discussed – Factors bearing on reasonableness.
MINING LAW – Relevance of mining activity to assessment of character of drain on mining land.
REMEDIES – Injunctions and declarations – Discretionary grounds for refusal of relief.
WORDS AND PHRASES – ‘public’ – ‘public drain’.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr D G Collins QC with Dr R J Sadler | King & Wood Mallesons |
| For the Respondent | Mr A J Finanzio SC with Ms M O’Sullivan | Maddocks Lawyers |
WARREN CJ
OSBORN JA
BEACH JA:
Introduction
This proceeding concerns a large drain situated on the applicant’s land which comprises the Hazelwood open cut mine (‘the Hazelwood land’) which is owned by the applicant (‘Hazelwood’). The drain is known as the Morwell Main Drain (‘the MMD’). The MMD receives water not only from the Hazelwood land, but also from a catchment which includes the southern portion of the township of Morwell and an industrial estate known as the Morwell Industrial Estate (‘the MIE’).
Both the southern portion of the township of Morwell and the MIE are serviced in the first instance by municipal drains which channel water towards the MMD.
In the proceeding below, Hazelwood contended that the MMD was a ‘public drain’ for the purpose of s 198(1) of the Local Government Act 1989 (‘the LG Act’) and its predecessor provisions. As a result, so the applicant contended, the MMD was vested in the respondent (‘the Council’), pursuant to s 198 of the LG Act, and under the management and control of the Council. At trial, the Council disputed these contentions.
In the alternative to its claim that the MMD was a public drain, Hazelwood contended that the Council had no right to cause public drainage water to discharge into the MMD; alternatively, Hazelwood contended that it had a right to stop a flow of this kind into the MMD. At trial, the Council disputed both of these propositions as well.
On 19 November 2015, following a five-day trial, Garde J rejected Hazelwood’s contentions.[1] His Honour found that the MMD was a private drain and not a public drain.[2] Additionally, his Honour found that the flow of water into the MMD was reasonable, and therefore s 16(2) of the Water Act 1989 (‘the Water Act’) obliged Hazelwood to receive the stormwater about which it made complaint.[3] His Honour refused Hazelwood the declaratory and injunctive relief that it sought.
[1]Hazelwood Power Partnership v Latrobe City Council [2015] VSC 638 (‘Reasons’).
[2]Ibid [347].
[3]Ibid [398].
Hazelwood seeks leave to appeal and (if leave is granted) to appeal the trial judge’s decision. Hazelwood’s proposed grounds of appeal are as follows:
1.The learned trial judge erred in finding the words ‘public drain’ in s 198(1) of the LGA are simply used in their common and ordinary meaning.
2. The learned trial judge erred in failing to find that the [MMD] was a public drain within the meaning of s 198(1) from at least September 1996, including as a result of erring in finding that condition 5.4 of the Mining Licence applies to the flow of the Council public drainage water.
3. The learned trial judge erred in finding that at all relevant times the flow of water from the Council public drainage system into the MMD was a ‘reasonable flow of water’ for the purposes of ss 16(2) and 20(1) of the Water Act, including as a result of erring in:
(a)finding that the flow is ‘authorised’ within the meaning of s 20(1)(a) as a result of failing to apply the definition of ‘authorised’ in s 3;
(b)failing to find that on the proper application of s 20(1)(g) the fact that the flow is collected, aggregated and concentrated by the Council public drainage system supports the view that it is not reasonable;
(c)failing to find that on the proper application of s 20(1)(e) the fact that the land of the Applicant … is used as an open cut mine, and that the flow is onto an area of the mine which requires and is required to be protected from flows of water, supports the view that the flow is not reasonable;
(d)failing to find that on the proper application of s 20(1)(d) the absence of any evidence that Council took any account of the likely impact on drainage in the area of the development of Council's public drainage system and the discharge of the flow from it did not support the view that the flow is reasonable; and
(e)finding that on the proper application of s 20(1)(f) the contours of the land support the view that the flow is reasonable notwithstanding that the flow is not a natural surface flow, but is a flow from a public drainage system connected to the MMD by pipes and culverts and that the Morwell Bypass would otherwise be a barrier to the flow.
4.The learned trial judge erred in finding that [Hazelwood’s] claims for declaratory and injunctive relief should be refused on discretionary grounds, without taking into account that [Hazelwood] submitted any injunctive relief would appropriately be subject to a stay for a sufficient time to enable Council to compulsorily acquire the MMD or construct an alternative means of drainage.
For the reasons which follow, we are not satisfied that the judge erred in his conclusions either as to the construction of s 198, the proper characterisation of the MMD in accordance with its terms, the reasonableness of the flow of water of which Hazelwood complains or discretionary considerations which would affect the grant of relief in any event.
Background
The background facts in this proceeding are largely not in dispute. Borrowing from the parties’ agreed summary, the background to the present dispute is as follows.
The Hazelwood Coal Mine was opened by the State Electricity Commission of Victoria (‘SECV’) in 1949. The mine is located on the Hazelwood land. From 1949 until about September 1996, the mine was owned and operated by, successively, the SECV, Generation Victoria and Hazelwood Power Corporation Pty Ltd (‘HPC’) (the shares in which were owned by or on behalf of the State). Since September 1996, the mine has been owned and operated by Hazelwood.
The Morwell township is to the north of the Hazelwood land on the northern side of the Morwell Bypass (‘the Bypass’), which is part of the Princes Freeway.
The MMD is within the boundary of the licensed mine area on the Hazelwood land. The catchment for the MMD includes part of the Hazelwood land, relevant parts of the Princes Freeway reserve, the MIE and the southern part of the township of Morwell (the northern parts of the township of Morwell drain to the north of the township).
The location of the portion of the MMD which is in issue in this proceeding and its juxtaposition with the township of Morwell and the MIE are shown on the attached overview plan in which significant features have been highlighted upon an aerial photograph.
The MIE was formerly the SECV Workshop Area. Following privatisation of the mine in 1996, the MIE was subdivided and developed as an industrial estate, and in 1998 the Council accepted responsibility for roads and drainage within the MIE.
The MMD commences to the south of the MIE on Hazelwood’s land and runs first north and then west around the pit created by the open cut mine. It then runs above the northern batters of the pit, extends northwest to the boundary of the Hazelwood land and continues onwards to wetlands adjacent to the Morwell River. The MMD consists of a 4.9 km open channel intended to carry high drainage flows, and a concrete pipe designed to carry low flows beneath the floor of part of the high flow channel. The low flow pipe extends for approximately 2.9 km. Approximately 3.7 km of the high flow channel and all of the low flow pipe is on the Hazelwood land.
The Bypass comprises part of the Princes Freeway and is located between the southern part of the township of Morwell and the MMD. The section of the MMD running above the northern batters of the mine is in close proximity to the Bypass. The stormwater drains for the southern areas of the Morwell township as shown in the overview plan direct water towards the MMD under the Bypass, via pipes and culverts which discharge into the MMD. The stormwater pipes and drains in the MIE also discharge into the MMD.
The MMD thus drains stormwater from the southern parts of the township of Morwell, the MIE, the Hazelwood land and the Princes Freeway to the Morwell River.
The area of the MMD catchment has remained substantially unchanged since 1949. The predominant contribution of the water which flows into the MMD is through public drainage infrastructure in the Morwell township, and to a lesser extent, the MIE. Thus, a high proportion of the water in various parts of the MMD comes from public drainage. Between 1949 and 1987, there was some increase in the volume of run-off as a result of increased development in the Morwell township.
The water from Hazelwood sources which flows into the MMD is rainfall run-off from the Hazelwood catchment (which is predominantly grassland to the east of the open cut). At trial, Hazelwood called evidence that this water could be redirected to a network of surface cut-off and roadside drains, which flow to large settlement ponds on the floor of the mine.
The MMD was initially constructed by SECV in 1949 to its own design and at its own cost for the purpose of diverting flows of storm and rain water run-off from entering the open cut mining operations proposed to be conducted by SECV. There is no dispute that the original MMD was constructed for the benefit and protection of the open cut mining operations to be conducted by the SECV, and for the benefit and protection of the owners of the land from time to time comprising the mine. The original MMD was not required for the purpose of providing drainage to the southern parts of the township of Morwell, nor constructed for the benefit or protection of the township or citizens of the Morwell. At the time of construction of the MMD, the drainage water from the southern part of the Morwell township flowed freely in a south-westerly direction, generally following the contours of the land.
After its construction, the MMD remained within the management and control of SECV.
The SECV commenced coal mining in the area of the northern batters in about November 1955. Coal winning activities in the East Field northern batters ended prior to the privatisation of the Mine in 1996. While coal winning in the East Field northern batters ended prior to the privatisation of the mine in 1996, Hazelwood has performed partial rehabilitation works on these areas in recent years. Hazelwood has an ongoing obligation to rehabilitate these areas of the mine pursuant to its mining licence.
In 1965 or 1966, long-term plans for the mine were modified to increase excavation beyond the western and southern extent of the existing mine. By 1966, SECV was also aware of the Country Roads Board’s (‘the CRB’) plans to construct the Bypass, and its potential impact on the MMD and the drainage from the township of Morwell.
Between 1973 and 1976, the MMD was partly relocated and significantly redeveloped. The relocation was necessary because the MMD would otherwise have been severed by the expanded open cut mining operations. The redevelopment works included the installation of a low flow pipe mainly beneath the upper channel of the MMD. SECV designed and financed the redevelopment, consulting with the Shire of Morwell, the CRB and the Latrobe Valley Water and Sewage Board.
By the time of the redevelopment of the original MMD, the southern portion of the township was substantially developed and a number of Council drains discharged into the MMD. SECV assessed and calculated the capacity needed to ensure that the MMD was large enough to receive drainage water from the southern part of the township of Morwell. SECV was well aware of, and accepted, the interconnection of Council drains into the MMD. The relocated MMD was designed by SECV engineers to have the capacity to receive Morwell town drainage.
Between approximately 1980 and 1985, the Road Construction Authority (‘the RCA’)[4] conducted drainage works associated with the Bypass works in consultation with the SECV and the Shire of Morwell. It was necessary to do so in part because the Bypass works placed an embankment barrier across the natural flow path from the north towards the MMD. The Bypass works were constructed adjacent to the Hazelwood land. In its design work, the RCA intended that all existing outlets from the built up area of the southern part of Morwell and the road drainage system be connected so as to discharge into the MMD.
[4]The successor to the CRB.
The CRB, and later the RCA, sought approval from SECV for the design and connection of drains from the Bypass and from the southern part of the township of Morwell directly into the MMD. The RCA liaised with the Council to obtain engineering detail about the volume of the drainage flows from the southern part of the Morwell township. SECV gave consent to the works and infrastructure connections to the MMD proposed by the CRB and the RCA including those which carried surface run-off from the southern part of the Morwell township into the MMD. It may be inferred that it did so knowing that the Council would rely on this consent when resolving drainage arrangements with the RCA to accommodate the situation which the Bypass works would create. The drainage infrastructure installed by the RCA included the construction of pipes and culverts directly connected into the MMD.
From 1948 until about 1994, the Hazelwood land was either unalienated Crown land or otherwise vested in SECV. From January 1994 to January 1995, the Hazelwood land vested in Generation Victoria by operation of the Electricity Industry Act 1993 and an allocation statement dated 23 December 1993. On 12 December 1995, by reason of the operation of s 19 of the Electricity Industry (Further Amendment) Act 1995, HPC was divested of the Hazelwood land, which land reverted to the Crown and was deemed to be unalienated Crown land free of all encumbrances.
On 12 December 1995, the Hazelwood land was the subject of a Crown grant to HPC which grant, by reason of s 19 of the Electricity Industry (Further Amendment) Act 1995, was free of all encumbrances, estates and interests. From January 1995 to September 1996, the Hazelwood land vested in HPC, which was wholly owned by the State of Victoria. In about September 1996, the Hazelwood land and all the shares in HPC were acquired by Hazelwood.
During the process of privatisation of the mine in 1996, the section of the MMD on the Hazelwood land was not specifically dealt with. However, the MMD was referred to by name in the Schedule to the National Power Consortium Asset Sale Agreement between HPC and Hazelwood. Further, the MMD was on land specifically allocated to HPC in the allocation statement dated 31 January 1995 and the Crown Grant dated 12 December 1995.
On 14 May 1996, a mining licence was issued to HPC under s 47A of the Mineral Resources Development Act 1990. A mining licence had not previously been required for the mine. Contemporaneously with the transfer of shares in HPC and the Hazelwood land to Hazelwood in September 1996, the earlier mining licence was revoked and a new mining licence granted to HPC.
When the former SECV land was privatised in 1996, the former SECV Workshop area was privatised and became the MIE. By an agreement made in July 1996 between the Council, SECV, HPC and another, HPC, SECV and another each agreed to make a financial contribution towards the cost of upgrading certain road and drainage infrastructure within the MIE, and the Council accepted responsibility for maintenance, update and repair of roads and drainage in the MIE. There were subsequent discussions between the Council and SECV in which it was proposed that the Council would be granted an easement over the section of the MMD that abuts the MIE. However, no agreement on an easement was ever reached.
At all relevant times from 1949, water has flowed from the land now known as the MIE to the MMD. At all relevant times from the construction of drainage infrastructure within the MIE, water has flowed through that drainage infrastructure to the MMD. At trial, Hazelwood contended that upon privatisation of the MIE, the proportion of public drainage water flowing into the MMD increased (because of the change in character of the upper lands); whereas the Council contended that no more or less water flowed into the MMD from the area once known as the SECV workshop and later known as the MIE, by reason of the change of ownership of the land in that area.
In February 2011, following heavy rainfall in the catchments surrounding the MMD, a large sinkhole developed in the upper channel of the MMD and a movement was observed to occur in the northern batters of the Mine. Cracking was also observed in the pavement of the Bypass.
On 8 April 2011, the Department of Primary Industry (‘DPI’) issued a regulatory notice to Hazelwood under s 110 of the Mineral Resources (Sustainable Development) Act 1990 (‘the MRSDA’), directing Hazelwood to conduct repair works on the MMD. Hazelwood performed those works at the cost of several million dollars.
The solicitors for Council and the solicitors for Hazelwood exchanged letters in September 2011 and July 2013 in relation to the MMD. In these letters, amongst other things, Hazelwood requested that Council provide a written explanation as to the basis of its rights to discharge water (including storm water from town drains) into the MMD, or in the absence of a sufficient explanation of its rights, within 90 days cease discharging water into the MMD; or submit a design solution, at its cost, to ensure that any water it discharges into the MMD does not enter the Hazelwood land. Hazelwood contended that by virtue of the operation of s 198 of the LG Act, a section of the MMD on Hazelwood’s land is vested in Council, and Council is responsible for its management and control. The Council denied that the relevant section of the MMD was a public drain within the meaning of s 198 of the LG Act and has continued to cause water to discharge into the MMD.
The Local Government Act 1989
Grounds 1 and 2 of the appeal relate to the meaning and effect of s 198 of the LG Act. Before turning to the construction of that section, it is desirable to say something about the statutory context in which it is found.
The fundamental role of municipal councils is to exercise their statutory powers for the peace, order and good government of their municipal districts. A series of provisions have been inserted in the LG Act articulating and emphasising that role but it should be noted that these provisions post-date September 1996, being the date by which Hazelwood alleges that the MMD was vested in the Council.
The preamble to the LG Act relevantly states:
(1)Section 74A(1) of the Constitution Act 1975 provides that local government is a distinct and essential tier of government consisting of democratically elected Councils having the functions and powers that the Parliament considers are necessary to ensure the peace, order and good government of each municipal district.
…
(6)The purpose of this Act is to establish a legislative scheme that supports the system of local government in accordance with Part IIA of the Constitution Act 1975.
Part 1A of the LG Act provides for the Local Government Charter. Section 3A states the purpose of local government.
The purpose of local government is to provide a system under which Councils perform the functions and exercise the powers conferred by or under this Act and any other Act for the peace, order and good government of their municipal districts.
Sections 1A(1)–(3) of the LG Act provide:
(1)It is the intention of the Parliament that the provisions of this Act be interpreted so as to give effect to the Preamble and the local government charter.
(2)The Preamble and the local government charter are not to be construed as having the effect of limiting the functions and powers of Councils under this Act or any other Act.
(3)In the interpretation of the Preamble and the local government charter, a construction that promotes consistency between the provisions of this Act and any other Act is to be adopted.
Section 3C of the LG Act sets out the objectives of a council. These include to ensure that services and facilities provided by the council are accessible and equitable.[5]
[5]LG Act s 3C(2)(e).
The functions of a council are set out by s 3E of the LG Act and include:
(c)providing and maintaining community infrastructure in the municipal district;
…
(g)exercising, performing and discharging the duties, functions and powers of Councils under this Act and other Acts;
(h)any other function relating to the peace, order and good government of the municipal district.
Plainly enough, community infrastructure potentially includes drainage infrastructure.
In turn, s 3F of the LG Act provides:
(1)Subject to any limitations or restrictions imposed by or under this Act or any other Act, a Council has the power to do all things necessary or convenient to be done in connection with the achievement of its objectives and the performance of its functions.
(2)The generality of this section is not limited by the conferring of specific powers by or under this or any other Act.
Part 9 of the LG Act provides for the specific functions and powers of and restrictions on councils by way of provisions pre-dating September 1996. These include incidental powers to acquire land and to create easements.[6] Section 187A makes clear that the power to acquire rights in the nature of an easement is a broad one, not dependent upon the strict requirements of property law.
[6]LG Act ss 187, 187A.
We should add that the common law recognised drainage easements might arise either by way of grant or by way of uninterrupted user entitling the owner of the dominant tenement to discharge water onto a neighbour’s land. In Gaved v Martyn, Erle CJ said:[7]
Rights and liabilities in respect of artificial streams when first flowing on the surface are entirely distinct from rights and liabilities in respect of natural streams so flowing. The water in an artificial stream flowing in the land of the party by whom it is caused to flow, is the property of that party, and is not subject to any rights or liabilities in respect of other persons. If the stream so brought to the surface is made to flow upon the land of a neighbour without his consent, it is a wrong for which the party causing it so to flow is liable. If there is a grant by the neighbour, the terms of the grant regulate the rights and liabilities of the parties thereto. If there is uninterrupted user of the land of the neighbour for receiving the flow as of right for twenty years, such user is evidence that the land from which the water is sent into the neighbour’s land has become the dominant tenement, having a right to the easement of so sending the water, and that the neighbour’s land has become subject to the easement of receiving that water.
[7]Gaved v Martyn [1865] 19 CB, NS 732, 757–8; 144 ER 974, 985.
Part 9 also includes specific powers with respect to drains.[8] The relevant sections provide:
[8]LG Act ss 198, 199, 200, 201.
(a) by s 198, for the vesting of certain local drains in a council;
(b) by s 199, for the carrying out of drainage works by councils in connection with roads;
(c) by s 200, for the carrying out of necessary drainage works on private land; and
(d) by s 201, for the implementation, operation and management of schemes approved under s 216 of the Water Act (which schemes may provide for the drainage of an area including the provision of drains upon private land).
The text of s 198 is:
198 Sewers and drains vested in the Council
(1)The following are vested in the Council and are under the management and control of the Council—
(a) public sewers and drains within the municipal district;
(b)sewers and drains in and under roads in the municipal district;
(c) Works and materials relating to (a) and (b).
(2)This section does not apply to any sewers and drains vested in another Council or a Minister, the Crown or any public body.
The power to carry out drainage works in connection with roads and the power to carry out works on private land are subject to the right of affected persons to make submissions under s 223 of the LG Act.
Schedule 10 of the LG Act gives councils a series of specific powers over roads. They include powers to make, maintain and repair roads and to fix and alter the level of roads.[9]
[9]Ibid sch 10 cl 1.
The municipal drains which collect flows of water and channel them towards the MMD in the present case were in large part constructed pursuant to the predecessors of s 199, which provided for the construction of roadside drains.
Ground 1 — The learned trial judge erred in finding the words ‘public drain’ in s 198(1) of the LG Act are simply used in their common and ordinary meaning
The trial judge concluded[10] that the words ‘public drain’ appearing in s 198(1) are simply used in their common and ordinary meaning. The characterisation of particular facts for the purpose of ascertaining whether they fall within that meaning is to be undertaken by reference to all the circumstances of a particular case and not one invariably critical characteristic.
[10]Reasons [92].
His Honour noted in particular that the LG Act contains no statutory definition or limitation of the characteristics of a public drain. The facts and circumstances which might support the conclusion that a drain is ‘public’ are capable of significant variation. Moreover, the adoption of an arbitrary test which has regard to a single factor only, such as the question whether a drain receives water emanating from public drains upstream from it, may result in an unjust divesting of a private land owner’s rights without compensation.
Hazelwood submits that his Honour erred in this reasoning and in his conclusions. First, it is submitted on behalf of Hazelwood that, despite stating that the words ‘public drain’ are used in their common and ordinary meaning, the ‘trial judge did not state or identify what the common and ordinary meaning is’. This threshold criticism is misconceived. The meaning of ordinary English words is a question of fact.[11] A conclusion that the statute uses words in their ordinary meaning does not require (and indeed precludes) a further definition of the words. The words are to be treated in effect as the best words to describe the relevant concept.
[11]S v Crimes Comp Tribunal [1998] 1 VR 83, 88 (Phillips JA) referring to Brutus v Cozens [1973] AC 854; Hope v Bathurst City Council (1980) 144 CLR 1, 7; Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509, 512; Franceschini v Melbourne and Metropolitan Board of Works (1980) 57 LGRA 284, 290–4, Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, 287; de Smith, Judicial Review of Administrative Action, (Sweet & Maxwell, 5th ed, 1995) para 5‑086. See also Vetter v Lake Macquarie City Council (2001) 202 CLR 439, 450–1 (Gleeson CJ, Gummow and Callinan JJ), 477–8 (Hayne J); Francis Bennion, Bennion on Statutory Interpretation: A Code (LexisNexis, 5th ed, 2008) 1222–3.
It is submitted next that issues relating to the ownership of the land and responsibility for construction of the drain must be irrelevant to the characterisation of the drain as a public drain because by definition s 198(1) is concerned with vesting land in the council which would otherwise be owned and managed privately. Once again it seems to us that this submission is misconceived. It does not follow from the effect of the section that the combination of private ownership with other matters will be irrelevant to the question whether something is or is not a public drain. The purpose of the subsection does not constrain the combination of circumstances to which reference should be had in determining whether a drain is ‘public’. His Honour did not of course conclude that the only determinant of the character of a drain was ownership of the land or responsibility for the construction of the drain.
Hazelwood’s core submission, however, is that the ‘critical characteristic’ which makes a drain a ‘public drain’ is that it performs a public drainage function. A public drainage function is said to be the drainage of water collected from a number of private properties and/or public areas (including by a public authority in the discharge of its responsibilities).
The interpretation of s 198 must turn fundamentally upon the text of that provision.[12]
[12]Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27, 46–7 [47]; Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39].
In our view, his Honour was correct to reject this submission for the following main reasons:
(e) the protean nature of the ordinary meaning of ‘public’;
(f) the adoption of a ‘whole of the facts’ approach to the question of the characterisation of public land uses in analogous cases;
(g) the fact that the ordinary meaning of the words in issue is not itself limited by the language of the LG Act;
(h) the fact that the purposive approach now required by s 1A of the LG Act does not require or encourage a narrow interpretation of ‘public’;
(i) the logical inconsistency in the submissions made on behalf of Hazelwood which acknowledge some relativity in the significance of the ‘critical characteristic’;
(j) the potential inadequacy of ‘function’ in capturing ‘purpose’ in circumstances where ‘purpose’ may be a better guide to whether something is ‘public’;
(k) the necessity to minimise the potential of the statutory provision to interfere unfairly with private rights; and
(l) the lack of substance in other considerations urged on behalf of Hazelwood.
The protean notion of ‘public’
The privatisation of the Hazelwood open cut mine and power-station is itself emblematic of the fact that in our society the relationship between public and private elements of civic infrastructure is not a static one.
What is public falls to be understood in the social context and governmental circumstances in which the term is applied.
There is in principle no good reason for seeking to constrain the meaning of the notion by reference to a particular aspect of the circumstances in which a drain operates. The trial judge adverted to the potential breadth of the underlying concept of public purposes by reference to the judgment of the High Court in O’Sullivan v Farrer.[13]In that case, the High Court considered the meaning of the ‘public interest’ as a consideration bearing on the exercise of a discretionary power:
Indeed, the expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only ‘in so far as the subject matter and the scope and purpose of the statutory enactments may enable … given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view’…[14]
[13](1989) 168 CLR 210.
[14]Ibid 216 (Mason CJ, Brennan, Dawson and Gaudron JJ) (citation omitted).
Section 198 also requires the characterisation of a public drain to be made by reference to undefined factual matters.
In our view, the term ‘public drain’ is intended to embrace changing circumstances including potentially changing technology, the changing nature of governmental arrangements and changing notions of the difference between public and private. This protean quality in the concept does not encourage a narrow interpretation of its meaning.
The adoption of a whole of facts approach in analogous situations
In Girls’ Public Day School Trust Ltd v Ereaut,[15] Lord Macmillan addressed the proper approach to answering the question whether a school was a ‘public school’:
In short all the features of the school must be considered and there is no individual feature the presence or absence of which taken by itself can be said in law to be conclusive of its character as public or private. If the features which are indicative of the school being a public institution predominate then it may fairly be said to be a public school. It is thus a question of degree in every case …[16]
[15][1931] AC 12 (‘Ereaut’).
[16]Ibid 34–35.
Lord Atkin concluded:
The words ‘public school’, as has been said before, are not words of art: they are to be given their ordinary meaning in what context they may be found.[17]
[17]Ibid 30.
In our view, the same can be said of the words ‘public drain’. They are not words of art. They are to be given their ordinary meaning in the context in which they are to be applied. All potentially relevant features of the drain must be considered.
In The Little Company of Mary (SA) Inc v The Commonwealth,[18] the High Court adopted the same approach. When deciding whether hospitals operated by two different religious denominations were ‘public hospitals’ within the meaning of the National Security (War Damage to Property) Regulations 1942, Latham CJ said of the word ‘public’:[19]
In Girls’ Public Day School Trust v Ereaut the difficulties of defining this term become very apparent. It was held that the term was not a term of art, and that the question what was the common understanding of the term was a question of fact. In O’Connell v Newcastle Municipal Council, which was relied upon by the plaintiffs, the same rule was applied by the Full Court of the Supreme Court to the consideration of the question whether a particular hospital was a ‘public hospital’ within the meaning of the Local Government Act 1919–1940 (NSW) s 132. Jordon CJ said:
Whether a particular institution is a public hospital is a question of fact to be determined upon a consideration of all the relevant facts of the particular case, no one fact being necessarily conclusive.
[18](1942) 66 CLR 368.
[19]Ibid 378 (citations omitted).
His Honour went on to discuss particular characteristics of the hospitals in issue. He concluded that from the point of view of the community — the public in the ordinary sense — these were private institutions.[20]
[20]Ibid 379.
Rich J in dissent said of the phrase ‘public hospital’:[21]
No definition of the latter expression is given in the Regulations and in relevant judicial decisions as to the meaning of the word ‘public’ judges have refrained from attempting an exhaustive decision. It is neither necessary nor desirable to do so. In every case which arises for determination a number of factors have to be considered, and none is an absolute criterion. ‘Public hospital’ is not a precise or technical expression.
[21]Ibid 380.
Starke J observed:[22]
But the authorities establish that whether a hospital is private or public is, in the main, a question of fact and a question of degree in every case.
His Honour ultimately concluded that neither of the hospitals with which the Court was there concerned would in the ordinary and usual use of the words be described as a ‘public hospital’ but the question was one of fact to be resolved upon a consideration of all the circumstances.[23]
[22]Ibid 386.
[23]Ibid 386.
More recently, Merkel J in Australian Hospital Care (Latrobe) Pty Ltd v Commissioner of Taxation followed the approach adopted in Ereaut in determining whether a regional hospital was a public hospital for sales tax purposes.[24]
[24](2000) 105 FCR 20.
Although none of these authorities were directly concerned with the meaning of the phrase ‘public drain’, each of them adopted the approach which reflects what we take to be the intention of the legislation, namely that the word ‘public’ is to be given its ordinary meaning as a matter of fact having regard to the particular circumstances in issue.
The trial judge also undertook a careful analysis of a series of New Zealand authorities in which different factors had been regarded as determinative of whether a drain is public.[25] The legislation there in issue differed from that with which we are concerned. Nevertheless, we agree with his Honour that the cases illustrate a series of factors which might logically bear on the question whether a drain is public in the ordinary sense of the word. In this sense, they favour the view that determining whether a drain is a public drain, in the ordinary meaning of the words, involves a multifactorial inquiry.
[25]Wellington and Manawatu Railway Company (Limited) v The Mayor, Councillors, and Citizens of the City of Wellington (1895) 14 NZLR 472 (Supreme Court); Petone Borough v Daubney [1954] NZLR 305 (Court of Appeal); Connolly v Palmerston North City Corporation [1954] NZLR 1006 (Supreme Court); Aprea v Wellington City [1969] NZLR 409 (Supreme Court); Stubbs v Taumarunui Borough [1975] 1 NZLR 125 (Supreme Court); Wellington City Council v Longhurst [1995] 3 NZLR 300 (Court of Appeal).
The absence of any words of limitation in the statutory provision itself
The statute itself does not specify criteria governing the question whether a drain is a public drain. A court will be reticent to imply limiting criteria into the terms of a statute.
In Ereaut, the House of Lords specifically rejected invitations to redefine the expression ‘public school’. Lord Macmillan said:[26]
The statute does not define the expression ‘public school’. It does not prescribe that no school shall be deemed a public school if any part of the profits earned by conducting it is paid over to the persons who own and manage it. If this is to be laid down as an absolute criterion it must be derived either from previous authoritative judicial interpretation of the expression or from its essential and inherent meaning.
[26]Ereaut [1931] AC 12, 33.
Lord Warrington of Clyffe said:[27]
The Act contains no definition of ‘public school’, and it is therefore the function of the tribunal in each case to say whether the school in question is properly so described. In arriving at a conclusion there are obviously many elements to be taken into consideration, and to say that, whatever the other circumstances may be, the existence or non-existence of one element affords an irrefutable test is open to the objection that by doing so the tribunal pro tanto binds itself by a definition which the statute does not contain.
[27]Ibid 27.
We agree that in the present case the Court should not bind itself to a criterion which the LG Act does not specify.
Section 1A of the Local Government Act
Section 1A of the LG Act now requires regard to be had to the purpose of local government, namely the exercise of powers for the peace, order and good government of municipal districts in construing the provisions of the LG Act. That purpose can in any event be discerned within the predecessors of the LG Act operative during the life of the Hazelwood mine.
This purpose does not require a narrow definition of ‘public drain’, but it suggests that a relevant consideration will be whether the drain was established or has been maintained or utilised in the exercise of the powers conferred for this purpose.
In other words, it supports the view that the word ‘public’ is to be understood in its ordinary meaning having regard to the nature of the public functions performed under the LG Act.
The effect of s 198(1) is to vest a public drain in the council rather than merely to establish an easement over it. This facilitates effective management and control of the drain for the purposes of the LG Act.[28]
[28]Cf Taylor v Corporation of Oldham (1876) 4 Ch D 395, 411 (Jessel MR).
The qualification of Hazelwood’s case
Both in argument before the trial judge and in submissions to this Court, counsel for Hazelwood conceded that at least in some circumstances drain function might not be determinative whether a drain constituted a public drain. As the trial judge recorded,[29] Hazelwood accepted that the position might be different if there was an agreement between the private land owner and a council for the receipt of public drainage water pursuant to which the private land owner had the express right to terminate the acceptance of the water, or if the public water was insignificant in volume.
[29]Reasons [88].
Insofar as the first concession is concerned, once it is conceded that the terms of an agreement to receive drainage water may be relevant to the characterisation of the drain, it is difficult to see why only one such form of agreement should be regarded as potentially relevant.
As the trial judge recognised, the second concession is also problematic. It raises the question of how the significance of a flow of water is to be determined, particularly in the case of seasonal or intermittent flows. Is the significance to be judged in terms of absolute volume or percentage contribution to a particular flood event? What flood event is to be regarded as determinative for resolving the question?
Putting these objections to one side, it is fundamentally difficult to regard the factor of function upon which Hazelwood relies as being necessarily critical when it is conceded that it is possible to hypothesise cases in which it would not be critical. It seems to us that the question of whether the factor is critical must depend on a consideration of all the facts of a particular case.
On appeal, it was put by Hazelwood that, having identified a public drainage function, it was necessary to turn to the circumstances or reasons which led to the drain performing the function. This formulation raises the same problem. The language of the section does not require a confined enquiry and the formulation advanced begs the question of what circumstances are and are not relevant.
The potential relevance of purpose
A description of function or an aspect of actual land use may not adequately identify the real and substantial purpose for which land is used. The classic statement of this proposition is that of Kitto J in Shire of Perth v O’Keefe[30] when discussing ‘existing use’ by-laws which entitled a land owner to continue to use land for the same purpose as that for which it was used prior to the making of the by-law. His Honour described the reasoning process as follows:[31]
First it is required that a purpose be identified as the end for which it can be seen that the premises are being used at the date of gazettal of the by-laws. Then the provision is made that the land may continue to be used for that purpose: not that the precise manner of use for that purpose may alone continue but that use generally for that purpose may continue. The application of the by-law in a particular case is therefore not to be approached through a meticulous examination of the details of processes or activities, or through a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use of the premises at the material date.
[30](1964) 110 CLR 529.
[31]Ibid 535.
The applicant’s primary argument in the present case is that proper characterisation of a drain as ‘public’ turns upon an aspect of the function or use of the drain. It may be, however, in a given fact situation, that the purpose of the use of land for a drain may be a surer guide to the question whether it is properly characterised in ordinary language as public or private than consideration of one aspect of its function. To give a simple example, a cut-off drain erected for the temporary purpose of facilitating construction works upon private land may be a private drain whether or not it has the function of receiving water from public drains for this purpose.
The trial judge referred to the decision Sykes v Sowerby Urban District Council,[32] which illustrates a purposive approach to the characterisation of a drain as either private or public. It must be recognised that the decision deals with a specific statutory context[33] in which legislation first identified categories of drains which did not vest in the municipality, namely drains ‘made by any person for his own profit, or by any company for the profit of the shareholder’; those directed at irrigation, or constructed pursuant to legislation; and those under the authority of Commissioners of Sewers. The statute then provided that the remaining drains within a municipality, existing or future, were to vest in the local authority.
[32][1900] 1 QB 584 (‘Sykes v Sowerby’).
[33]Public Health Act 1875 (Imp).
In Sykes v Sowerby, a drain used to prevent surface water coming down a road into a quarry, and to carry off the water to a drain on the far side of the quarry, was held to be a private drain. There was evidence (as in the present case) that from time to time the operator of the quarry moved the drain. The Court of Appeal held that because the drain was made by the quarry owner for the purpose of working the quarry more profitably, it came within the exception and did not vest in the local authority.
Whilst the case turned on the specific statutory definition there in issue, it illustrates how a drain installed in circumstances such as the present case may be regarded as being installed for a private purpose. In turn, this raises the question whether that conclusion is relevant to determining whether a drain is a public drain in the ordinary sense of those words. We agree with the submission of the Council that the real and substantial purpose for which a drain is installed may be a factor bearing upon its characterisation as a either public or private, whatever its function.
The need to have regard to the consequences of a mechanistic approach
The trial judge took the view that caution should be exercised in adopting a simplistic or mechanistic approach to determining whether a drain is or is not a public drain because the consequences of that characterisation will be to divest property from a land owner without payment of compensation. The vesting in a council of a drain situated on private land creates an encumbrance which may markedly affect the building, development and use rights of the owner of the land.
If receipt of water which has, at least in part, passed through a public drain upstream is sufficient to transform a private drain into a public drain, then it may be that a private land owner will inadvertently encumber his or her title when undertaking works which are intended to be entirely for a land owner’s benefit. Thus, in the case of a quarry or open cut mine, if a diversion drain were initially constructed in a position protecting the first stage of a pit (as in fact happened in the present case) that drain, if upon private land, would vest in the council and potentially prevent or impede the further advancement or enlargement of the pit. The council would be entitled to maintain the drain at the level and in the location at which it was initially constructed and restrain the land owner from interfering with its drain.
Further, although only parts of this State are arid, there are many rural situations where it is entirely beneficial to a private land owner to utilise a drain which carries water from sources upstream either to supplement the catchment of a private dam or as a component of the overall water management within a property. On Hazelwood’s construction, such circumstances will lead to the drain vesting in the local council whenever the water that flows into it receives a contribution from a roadside or other public drain upstream.
We agree with the trial judge that, because s 198(1) gives rise to a direct interference with private property rights, it is proper when interpreting it to have regard to the fact that no compensation is payable upon the vesting of property rights in a municipal council pursuant to it.
The relevant principles were summarised by French CJ in R & R Fazzolari Pty Ltd v Parramatta City Council:[34]
[34](2009) 237 CLR 603, 618 [40]–[44] (citations omitted).
Private property rights, although subject to compulsory acquisition by statute, have long been hedged about by the common law with protections. These protections are not absolute but take the form of interpretive approaches where statutes are said to affect such rights.
Blackstone said that the common law would not authorise the ‘least violation’ of private property notwithstanding the public benefit that might follow. He accepted however that the legislature could compel acquisition and in so doing wrote:
All that the legislature does is to oblige the owner to alienate his possessions for a reasonable price; and even this is an exertion of power, which the legislature indulges with caution, and which nothing but the legislature can perform.
It was and has remained the case in England and Australia that compulsory acquisition and compensation for such acquisition is entirely the creation of statute.
The attribution by Blackstone, of caution to the legislature in exercising its power over private property, is reflected in what has been called a presumption, in the interpretation of statutes, against an intention to interfere with vested property rights. It was expressed by Griffith CJ in Clissold v Perry, a land resumption case, thus:
In considering this matter it is necessary to bear in mind that it is a general rule to be followed in the construction of Statutes such as that with which we are now dealing, that they are not to be construed as interfering with vested interests unless that intention is manifest.
The presumption has been restated on more than one occasion in this Court. That does not, of course, authorise the court to put to one side ‘the unambiguous effect of the words which the Parliament has seen fit to use’.
The terminology of ‘presumption’ is linked to that of ‘legislative intention’. As a practical matter it means that, where a statute is capable of more than one construction, that construction will be chosen which interferes least with private property rights. That approach resembles and may even be seen as an aspect of the general principle that statutes are construed, where constructional choices are open, so that they do not encroach upon fundamental rights and freedoms at common law. It operates in the United Kingdom as a manifestation of a ‘principle of legality’ and has been described in Australia as an aspect of the rule of law.
In its application to property rights this long-standing interpretive principle is consistent with international developments in the recognition of human rights since World War II. Although not specifically protected by the International Covenant on Civil and Political Rights, or the International Covenant on Economic, Social and Cultural Rights, the right to property was recognised in the Universal Declaration of Human Rights and in various other international instruments. …
It follows from these principles that a mechanistic approach which looks solely or primarily to a single aspect of the drainage function of a drain, without regard to the purpose for which it was created or the circumstances as a whole in which it is managed and operated, should not be preferred.
The trial judge was correct to conclude[35] that, because s 198 results in the vesting of property in a council at the expense of a private land owner, it is just and appropriate to review all of the relevant circumstances rather than adopt a specific test. As the trial judge observed:[36]
To do otherwise might result in significant injustice in the individual case. The court should be cautious in its interpretation of a provision divesting property rights from landowners.
[35]Reasons [87].
[36]Ibid.
Other submissions made on behalf of Hazelwood
Hazelwood submits that because the function and powers of a council include the provision of drainage, this favours the view that the critical question is whether a particular drain forms part of a public drainage system.
It seems to us, with respect, that this submission simply restates the problem. It begs the question of what is or is not part of a ‘public drainage system’. That question is one of fact to be determined having regard to all the circumstances of a particular case.
Hazelwood further submits that the fact that a drain on private land conveys a benefit to the private land owner cannot be determinative of whether a drain is or is not a public drain. In our view, this submission again falls into the trap of seeking to isolate one potentially relevant factor as necessarily conclusive of or irrelevant to the characterisation of the public or private nature of a drain. The question is to be answered by reference to the facts as a whole in any given case.
It follows from all the above reasons that ground 1 must fail.
Ground 2 — The learned judge ought to have found that the MMD was a public drain within the meaning of s 198(1) of the LG Act from at least September 1996.
Hazelwood’s case at trial was that the MMD vested in the Council by one of three dates:
·No later than 1975, when the MMD was partly relocated and significantly redeveloped;
·No later than 1985, when the Morwell Bypass on the Princes Freeway was completed and drains were incorporated by the RCA into the Bypass works which were connected by SECV to the MMD;
·No later than September 1996, when the mine and the land on which it was located were privatised and acquired by Hazelwood.
The trial judge rejected each of these claims. Hazelwood does not dispute the conclusion with respect to 1975 and 1985, but seeks to appeal the conclusion with respect to September 1996.
His Honour’s reasons dealt sequentially with the evidence relating to each of the periods of time in issue. Because his ultimate conclusion was informed by his conclusions concerning the history of the drain, it is necessary to say something about this intermediate reasoning process.
As a preliminary matter, the judge first set out the history of the ownership of the mine and the surrounding land, which we have already summarised.[37]
[37]Ibid [95]–[100] (citations omitted).
The judge then addressed the hydrological evidence which was put at the forefront of Hazelwood’s case on the facts.
The judge accepted the conclusions of Mr Kovacevic, an engineer specialising in hydrology and hydraulic engineering, whose evidence was adduced on behalf of Hazelwood:[38]
[38]Ibid [101] (citations omitted).
·There are three parties that control the drainage infrastructure through which water contributions enter the MMD, or who own land from which water is discharged to the MMD via overland flow, which are [Hazelwood], [the Council] and VicRoads;
·The percentage contributions of flow from the three contributing parties ([Hazelwood], [the Council], VicRoads) varies with storm/rainfall characteristics, and varies with time throughout any given rainfall event;
·The total flow and the percentage contributions of flow from the three contributing parties ([Hazelwood], [the Council], VicRoads) varies along the length of the MMD, with the total flow generally increasing from upstream to downstream as the total catchment area increases and the relative portions of contributing catchments (ie land from which drainage is controlled by either [Hazelwood] or VicRoads) changing with the increase in total catchment area. Indicative variations in the percentage contributions at key locations along the MMD from upstream to downstream are summarised as follows:
oThe largest contribution of flow within the MMD at inflow location ‘1 (upstream)’ (which represents the MMD catchment at the upstream limit of drainage connections from the industrial estate) is from [Hazelwood] land (eg 89.4% of the peak flow of 3.25m3/s at the time of peak flow in a 10 year ARI[39] design flood event);
oThe largest contribution of flow within the MMD at inflow location ‘A’ (which represents a combination of drainage from [Hazelwood] land, [the Council] land and a small component of VicRoads land) is from [the Council] land (eg 95.4% of the peak flow of 15.75m3/s at the time of peak flow in a 10 year ARI design flood event);
oThe largest contribution of flow within the MMD at inflow location ‘Z’ (which is located at the first significant inflow location downstream from the start of the Teranap lining in the MMD) is from [the Council] land (eg 89.6% of the peak flow of 13.99m3/s at the time of peak flow in a 10 year ARI design flood event);
oThe largest contribution of flow at inflow location ’S’ (which is located just downstream of the drop structure on the MMD and represents virtually all contributing catchment to the MMD upstream of the metal flume over the disused railway) is from [the Council] land (88.5% of the peak flow of 16.51m3/s at the time of peak flow in a 10 year ARI design flood event).
oThe changes made by VicRoads to its drainage infrastructure in the vicinity of the MMD since February 2011 are unlikely to have had any significant effect on the calculated contributions to peak flow rate within the MMD for conditions at May 2015.
[39]Average Recurrence Interval.
The locations described are shown on the plan and described in Appendices 1 and 2 to this judgment.[40]
[40]Reasons sch 5 and 6.
The judge noted that Mr Kovacevic gave evidence that both the estimates of flows from the existing catchments within the township and within the mine area may be overstated to some extent because of dissipation of water in the course of its passage over land. In the case of stormwater originating in the town catchment, some bypassing flow and floodplain attenuation was likely to result from a combination of topographic controls, stormwater drainage surcharging and bypassing of inlets. Nevertheless, the general order of figures is clear.
The judge also noted evidence from a senior engineer employed by Hazelwood that since the 1980s no water has been pumped from the mine pit up into the MMD.
His Honour then summarised the evidence of Dr Andrew McCowan, an experienced civil engineer and hydrologist, as to computer modelling simulating the probable run-off from the Morwell township and surrounding areas into the MMD at various points in time — 1949, 1976, 1987, 1998 and the present. The modelling was informed by aerial photography depicting change in hard surfaces within the catchments and drainage patterns.
Dr McCowan identified sub-catchments within the Hazelwood land, the MIE, the township of Morwell and the Princes Freeway.
The present capacity of the MMD is in the order of 40 cubic metres per second. It has the capacity to contain a flood flow well in excess of a 100 ARI flow.
The total catchment of the area of the MMD is approximately 350 hectares. With an average annual rainfall of 749 mm, the total average annual volume of rain falling on the overall catchment is 2,620 megalitres.
Dr McCowan estimated changes in the proportion of run-off by reference to catchment land use as follows:
Table 8 Proportion of run-off by land use for the 1 hour, 100 year ARI event
Use
1976
1987
1996
1996/98
Current
Morwell Township
53.6%
48.3%
47.9%
47.9%
47.9%
Industrial Estate
15.8%
17.3%
17.7%
17.7%
17.7%
Freeway
-
5.0%
5.0%
5.0%
5.0%
[Hazelwood] land
30.6%
29.4%
29.5%
29.5%
[29.5%]
Table 9 Proportion of run-off by land use for the 1 hour, 1 year ARI event
Use
1976
1987
1996
1996/98
Current
Morwell Township
69.8%
62.8%
60.6%
60.6%
60.6%
Industrial Estate
21.4%
22.7%
24.8%
24.8%
24.8%
Freeway
-
6.3%
6.4%
6.4%
6.4%
[Hazelwood] land
8.4%
8.2%
8.3%
8.3%
8.3%
Dr McCowan also modelled the contributions from various sub-catchments to the inflow into the MMD at various points in time since 1949. Catchments A, S, Y and Z relate to areas within the Morwell township:
Table 12Volume of run-off (ML) from each catchment for the 24 hour, 1 year ARI event
Catchment
1949
1976
1987
1996/8
Current
A
6.6
11.2
12.5
12.5
12.5
B
0.2
0.4
0.5
0.5
0.5
C
3.0
4.7
4.8
5.2
5.2
D
0.6
0.7
1.1
1.1
1.1
S
12.9
16.1
16.9
16.0
16.0
T
0.4
0.4
0.6
0.6
0.6
U
0.2
0.2
0.3
0.3
0.3
V
0.0
0.0
0.1
0.1
0.1
W
0.1
0.1
0.2
0.2
0.2
X
0.7
0.7
0.8
0.8
0.8
Y
0.6
0.6
0.7
0.7
0.7
Z
16.0
19.9
21.0
21.0
21.0
MMD
17.8
18.4
19.2
19.4
19.4
Table 13Volume of run-off (ML) from each catchment for the 24 hour, 100 year ARI event
Catchment
1949
1976
1987
1996/8
Current
A
43.0
48.9
50.5
50.5
50.5
B
1.3
1.5
1.6
1.6
1.6
C
19.5
21.7
21.8
22.3
22.3
D
3.8
3.9
4.4
4.4
4.4
S
64.9
68.9
70.8
69.6
69.6
T
2.4
2.4
2.7
2.7
2.7
U
1.2
1.2
1.3
1.3
1.3
V
0.2
0.2
0.2
0.2
0.2
W
0.7
0.7
0.8
0.8
0.8
X
3.3
3.3
3.4
3.4
3.4
Y
2.7
2.8
3.1
3.1
3.1
Z
84.0
89.0
91.4
91.3
91.3
MMD
118.5
119.3
124.8
125.0
125.0
The modelling generated estimates demonstrating some increase between 1949 and 1987 in the volume of run-off in catchments A, S, Y and Z as a result of increased development within the Morwell township and within catchments B, C and D as a result of increased development of the MIE. The major proportion of this increase had occurred by 1976. There is negligible difference in the estimated run-off between 1987 and the current situation.
The judge concluded that the evidence showed that a high proportion of the water in various parts of the MMD comes from public drainage. On the other hand, it shows that while there has been some increase in the volume of run-off from development, the volume of run-off from the various sub-catchments has not altered much over time. The latter observation is true since 1987 but we accept, as Hazelwood submits, that the sub-catchment figures prior to this show a more complex picture.
The judge went on to summarise the evidence concerning the construction of the original MMD. He concluded this discussion as follows:[41]
It is undisputed that the original MMD was a private drain constructed by SECV in about 1949 to its own design and at its own cost. It required very substantial earthworks to construct. Its primary purpose was to protect the open cut mining operations of SECV. After its construction, the original MMD remained within the management and control of SECV – not the Shire of Morwell. The Shire of Morwell did not contribute to the construction cost. There is no evidence that the Shire of Morwell incurred any cost at all, or exercised or sought to exercise, management or control over the original MMD at any time.
[41]Ibid [126]. The Council is the successor to the Shire of Morwell.
The judge then analysed the evidence concerning the partial relocation of the MMD between 1973 and 1976. He concluded that there was an agreement by the SECV at that time to accept drainage which in part originated from the municipal drainage system within the township of Morwell. That choice was made in order to facilitate planning approval for the relocation of the drain closer to the interface with the proposed freeway and township to the north:[42]
SECV did agree to accept the discharge from the Morwell township drains into the MMD. The relocated MMD was deliberately designed by SECV engineers to have the capacity to receive Morwell town drainage. Acceptance of public drainage from the township of Morwell into the MMD was on the recommendation of SECV’s own expert engineering staff. It was a deliberate and voluntary act by SECV in the context of obtaining a planning permit from the Shire of Morwell. No one contemplated that acceptance of Morwell township drainage into the MMD would alter the status of the MMD, or vest the MMD in the Shire of Morwell. Such an outcome would have entirely contradicted the whole basis of relocating the MMD; namely, that the relocated MMD would be designed, built, managed and controlled by the SECV, and that the Shire of Morwell would attend to, or pay for, the removal or treatment of polluted substances in the drainage water discharging from the Morwell township drains into the MMD.
[42]Ibid [149].
The judge further concluded as follows:[43]
[43]Ibid [166]–[169].
166The evidence relating to the partial relocation of the MMD, the construction of the low flow pipe and other works completed overwhelmingly points to the conclusion that the MMD was an SECV drain in and prior to 1975, and not a council drain vested in, or under the management and control of, the Shire of Morwell. This is almost inevitably the case despite the evidence as to the volume of drainage water entering the MMD from the southern part of the township of Morwell.
167 Some of the salient facts are:
(1)SECV had management and control of the MMD as an integral part of the mine;
(2)SECV designed the MMD relocation, using its in-house engineering staff assisted by consulting geotechnical engineers;
(3)SECV consulted with interested authorities as necessary during the design phase, including with the Shire of Morwell, CRB, LVW&SB, and MSA;[44]
[44]CRB is the Country Roads Board. LVW&SB is the Latrobe Valley Water and Sewerage Board. MSA is the Morwell Sewerage Authority.
(4)the Shire Engineer of the Shire of Morwell advised SECV engineers of the expected drainage flow from the township of Morwell and catchment areas outside the [Hazelwood] land;
(5)the Shire Engineer’s calculations were checked by SECV engineering staff, who also calculated and assessed all other flows into the MMD;
(6)SECV alone tendered the MMD relocation works, including the construction of the low flow pipe;
(7)SECV paid the entire cost of the MMD relocation works, including the cost of installation of the low flow pipe;
(8)SECV was well aware that it was accepting drainage flows from the township of Morwell into the MMD, as its senior engineers determined that public drainage from the township of Morwell should be accepted into the MMD;
(9)SECV agreed to accept drainage inputs from the township of Morwell and other land outside the [Hazelwood] land as a matter of benevolence without objection or concern, other than to suggest that the Shire of Morwell should bear the treatment cost of polluted flows from the township of Morwell, or alternatively, that the Shire of Morwell should treat the drainage before it entered the MMD;
(10)while consulted as to drainage catchment areas outside the [Hazelwood] land, the Shire of Morwell had no control over the MMD, the MMD relocation design models, the tender or the resulting contract for the MMD relocation works;
(11)there is nothing to suggest that the Shire of Morwell had any operational control or involvement with the MMD, or that it was involved in maintenance of the MMD in any way apart from the removal of litter from connecting township drains; and
(12)there is no evidence to suggest that the Shire of Morwell incurred any cost or expense in relation to the initial construction, subsequent relocation or maintenance of the MMD.
168On the evidence, I accept that the principal reason for the SECV to partially relocate the MMD was due to the progress of open cut mining operations and the movement of overburden. I accept that there was a continuing need on the part of SECV for the MMD to cut off flows of drainage from higher land within the MMD’s catchment area and to receive other water from the open cut of the mine.
169 As to a number of matters advanced by [Hazelwood]:
(1)the relocation of the MMD was designed to accommodate coal mining operations within the mine which were expected to intersect with the original MMD;
(2)SECV did assess and calculate the capacity needed to ensure that there was sufficient capacity in the MMD to receive drainage water from the southern part of the township of Morwell and all other catchments into the MMD. This was part of the process whereby SECV decided to accept this drainage water;
(3)SECV was well aware of, and accepted, the interconnection of council drains into the MMD;
(4)SECV engineers were well informed about CRB’s planned construction of the Morwell Bypass. The volume of drainage water likely to be generated by the proposed Morwell Bypass into the MMD was considered by SECV when the capacity of the relocated MMD was determined;
(5)the capacity of the relocated MMD was determined so that it would meet all surface water run-off requirements; and
(6)the relocated MMD and the low flow pipe were designed to provide a safe means of channelling water across the [Hazelwood] land above the northern batters. Installation of a concrete pipe would significantly reduce seepage and erosion. Lining of part of the relocated MMD was recommended by the consulting geotechnical engineers, but this did not occur.
The trial judge then addressed the history of the works implemented in conjunction with the Bypass. Correspondence from the time demonstrates that the SECV recognised that the principal purpose of the drain was to act as a cut-off drain, protecting the open cut mine from drainage from the higher catchments.
Agreement was reached between the RCA, the Council and the SECV as to the drainage works which would be carried out in conjunction with the freeway works. The freeway works themselves placed an embankment barrier across what had been the natural flow lines from the north towards the MMD.
The SECV specifically agreed to the construction of new drain crossings through the Bypass and into the MMD. Ultimately, his Honour concluded:[45]
[45]Reasons [209]–[213].
209Over the period of the design and construction of the Morwell Bypass, SECV exercised management and control over the MMD. Key findings are:
(1)SECV was the owner, manager and controller of the MMD;
(2)other authorities recognised and accepted SECV’s position as manager and controller of the MMD;
(3)SECV engineers regarded the principal function of the MMD as a cut-off to prevent the flow of run-off water into the mine pit;
(4)CRB and later RCA sought approval from SECV for the design and connection of drains from the Morwell Bypass and from the southern part of the township of Morwell directly into the MMD;
(5)RCA liaised with the Shire of Morwell to obtain engineering detail about the pipes and drainage flows from the southern part of the Morwell township;
(6)RCA corresponded with SECV to obtain approval for the works required to connect the drainage system of the Morwell Bypass and the Shire’s drains for the southern part of the Morwell township into the MMD;
(7)SECV was satisfied that the MMD would continue to meet its design requirements after the new infrastructure works were completed by RCA;
(8)SECV gave consent to the works and infrastructure connections to the MMD proposed by CRB and RCA including those which carried surface run-off from the southern part of the Morwell township into the MMD; and
(9)the works performed by RCA put the MMD drainage infrastructure, pipes and culverts largely into their present configuration.
210I accept that drainage water from the southern part of the township of Morwell flowed into the MMD in accordance with the evidence of Mr Kovasevic and Dr McCowan over the period up to 1985. However, as I have said, this does not bring with it the consequence that the MMD became wholly or partly a council drain. It remained a major industrial drain under the management and control of SECV. SECV had previously agreed to accept public drainage water into the MMD, on the basis that the Shire of Morwell was responsible for the removal of pollutants. This arrangement continued up to and past 1985.
211I find that the features that predominate are those that point to a private drain. The MMD remained an SECV drain in and prior to 1985, when the Morwell Bypass project was completed. There was no change in the status of the MMD. I reject [Hazelwood’s] claim that it became a council drain.
212The drainage infrastructure installed by RCA included the construction of pipes and culverts into the MMD. This work was approved by SECV and carried out by RCA at its own cost. The Shire of Morwell provided information, but otherwise had little or no involvement in the design or infrastructure works.
213 I conclude that:
(1)the MMD was on SECV land and was a SECV asset;
(2)the principal role of the MMD, as accepted in the SECV memorandum of 1 June 1983, was as a cut-off to run-off water which would otherwise enter the mine’s open-cut;
(3)SECV had responsibility for the design and functioning of the MMD;
(4)approval was required from SECV for any discharge of water to the MMD;
(5)at all times, RCA corresponded with SECV concerning the proposed drainage infrastructure and works – SECV was undoubtedly recognised as the authority with management and control of the MMD;
(6)it was recognised that SECV could impose conditions on the discharge of drainage into the MMD; and
(7)it was not suggested by anyone that the Shire of Morwell had any legal responsibility for the operation of the MMD.
His Honour then addressed aspects of the history of the MMD between 1989 and 1995. Particular attention was given to the privatisation of the Hazelwood mine, which we have addressed above.
After reviewing the history of privatisation, his Honour concluded:[46]
I conclude that the MMD and the land on which it is constructed were transferred to [Hazelwood] under the privatisation arrangements. I also conclude that there is nothing about the privatisation arrangements which suggest that the MMD ceased to be a private drain. It was not vested in [the Council]. To the contrary, the documentation is consistent with the conclusion that the MMD was transferred by SECV to Generation Victoria, and then to HPC and [Hazelwood] by the privatisation process. There is nothing in any of the privatisation documentation or the discussions between Mr Fryer and Mr Naismith that suggests that its status as a drain vested, managed and controlled by the mine owner had changed. To the contrary, all of the evidence from witnesses or documents points to the conclusion that the relevant part of the MMD was a private drain under the management and control of the mine owner.
[46]Ibid [249].
The judge then addressed the creation of the MIE within what was formerly the SECV workshop area prior to privatisation. His Honour concluded:[47]
This privatisation process for the MIE proceeded on the basis that SECV and later [Hazelwood] was responsible for the maintenance of the MMD. This was the basis on which all parties negotiated during the privatisation arrangements. On each occasion when Mr Fryer or others suggested that [the Council] should assume responsibility for the MMD, the suggestion was rejected by [the Council] and by Mr Naismith on its behalf. The actions of all parties are entirely consistent with the notion that the MMD was not vested in [the Council], and had never been vested in [the Council].
[47]Ibid [262].
The judge then addressed aspects of the mining legislation which governed the operation of the Hazelwood mine, initially under Mineral Resources Development Act 1990, and then under the MRSDA .
The judge noted the following current provisions of the regulatory legislation:[48]
[48]Ibid [270]–[271] (citations omitted).
(1)a person is prohibited from mining unless the person does so in accordance with a licence;
(2)subject to meeting all requirements, the holder of a mining licence may carry out mining on the land and to do anything else incidental to that mining;
(3) a mining licence applies to the land described in the licence;
(4) a mining licence may contain conditions;
(5)… in some circumstances a mining licence can be varied;
(6)the holder of a mining licence must, with some exceptions not relevant to the [Hazelwood] land, not carry out any work on the land covered by the licence unless the licensee has an approved work plan;
(7)a work plan must include a rehabilitation plan, and a community engagement plan;
(8)a licensee may seek to vary an approved work plan including a rehabilitation plan; and
(9)if satisfied that a licensee has contravened the MRSDA, the regulations, or failed to comply with conditions of the licence, the Minister may serve a notice on the holder of the licence. A notice may also be served if the Minister believes on reasonable grounds that an act or omission is likely to result in a risk to public safety, the environment, land, property or infrastructure.
Part 7 of the MRSDA is concerned with the rehabilitation of land. Licensees are required to rehabilitate land in accordance with the rehabilitation plan approved by the Department Head. The rehabilitation plan must take into account —
(1) any special characteristics of the land;
(2) the surrounding environment;
(3) the need to stabilise the land;
(4)the desirability or otherwise of returning agricultural land to a state that is as close as is reasonably possible to its state before the mining licence was granted; and
(5) any potential long term degradation of the environment.
We interpolate that in the present case the fact that a work plan must include a rehabilitation plan[49] and is not restricted to active works is of significance. This is because the areas now under progressive rehabilitation are extensive and the MMD abuts them.
[49]MRSDA s 40(3)(e).
Likewise, the fact that the rehabilitation plan must take into account the need to stabilise the land[50] is also significant because in the present context such stabilisation requires ongoing drainage measures.
[50]Ibid s 79(a)(iii).
His Honour then turned to the provisions of the mining licence under which Hazelwood operates.
The trial judge was correct to find[72] that s 20(1)(f) of the Water Act was relevant to his considerations. The contours of the lands concerned form the framework within which the other considerations must be evaluated. His Honour was correct to conclude that, but for the works and activities which have been undertaken on these lands, the natural flow of water would be towards the Hazelwood land.
[72]Reasons [371].
Hazelwood submits that his Honour’s conclusion with respect to the contours of the land should be rejected because the flow which now occurs is not a natural flow of surface water and the construction of the Bypass created a barrier to the natural flow of surface water.
His Honour’s finding was made with respect to what the natural flow ‘would be’. The effect of works and activities on the lands concerned raises further considerations but it remains relevant as a starting point that the flow of water from Council drains onto the Hazelwood land is consistent with the natural contours of the land.
The use of the lands concerned and the lands in the vicinity[73]
[73]Water Act s 20(1)(e).
His Honour found that the use of the Hazelwood land is for mining. The township of Morwell is predominantly put to residential and commercial use. The MIE is used for industrial purposes.[74]
[74]Reasons [371].
In turn, his Honour found that the use and function of the MMD is appropriate to the land use and activities in the area.
The critical question for his Honour was, however, not whether the use of the MMD was reasonable but whether the flow of water onto the Hazelwood land is reasonable.
In this regard, Hazelwood submits that the use of Hazelwood’s land as an open cut mine progressing towards rehabilitation reasonably requires it to be protected from the flow of surface water from the township and MIE catchments. The flow imposes a substantial ongoing cost upon Hazelwood because it gives rise to a continuing requirement for costly inspection and maintenance of the MMD. Hazelwood submits that this consequence supports the conclusion that the flow is not reasonable.
Whilst this aspect of Hazelwood’s argument may be accepted, the underlying use of the Hazelwood land for the purposes of a mine which has at all material times included the MMD as a component of the site layout and overall mine management tends to support the view that the flow is reasonable.
The question of reasonableness is not, however, to be assessed solely by reference to Hazelwood’s land. The question also arises whether the use of the township and MIE land is reasonable. Even prior to the Water Act, Gartner[75] recognised that the characteristics of what constituted a natural flow must be assessed in part having regard to the reasonable use of the higher lands. Under the current legislative provisions, it is plain that the reasonableness of a flow must also be assessed on this basis. The township use of the catchment north of the Hazelwood land results from a process of settlement which was well commenced by 1910 and was entrenched prior to the commencement of the open cut mine in 1949.
[75](1962) 108 CLR 12.
As the hydrological evidence shows, intensification of development incidental to township use led to an increase in surface water discharge between 1949 and 1987, but there has been no material overall increase in the discharge from the township catchment since.
There is no evidence that the use and development of the land within the southern portion of the township of Morwell has progressed in other than an orderly and proper way.
In the circumstances, it seems to us that this use should itself be regarded as reasonable and that this is in turn a factor which supports the conclusion that the generation of drainage flows reasonably incidental to the township use is itself reasonable.
The same conclusions hold for the consequences of the longstanding use of the MIE land for industrial purposes. The MIE land was developed and used as the SECV workshop area in the first 45 years of the mine operation. There is no sensible basis for concluding longstanding industrial use of the land is in itself in any way unreasonable. Once again, if the land use is reasonable, this tends to support the conclusion that the generation of flows reasonably incidental to that land use is also reasonable.
The natural flow
The first aspect of the considerations stated in s 20(1)(g) of the Water Act relevantly raises the question whether the flow of water was collected or concentrated on the higher land. In this regard, Hazelwood submits that the flow of water from the Bypass drains and from the drains on the MIE land is not a natural flow of water because of the way it is collected and concentrated. In turn, it is submitted that the volume and intensity of the flow imposes an unreasonable burden upon Hazelwood to drain water away from its land and in particular away from those parts of the land which are vulnerable to erosion and instability.
In our view, the sense in which the flows of water in issue can and cannot be said to be natural needs to be carefully analysed.
First, there is no suggestion that the municipal drains either within the township or the MIE have extended the catchment contributing to the relevant flows.
Secondly, there is no evidence that the form of the municipal drains themselves materially affect the flow. The evidence is that the township drains essentially comprise roadside kerb and channelling which is directed to drainage channels following the natural contours of the land. These channels have in turn been connected to the pipes under the Bypass which provide an engineered connection to the MMD.
The MIE drains were substantially constructed when the MIE land and the Hazelwood land were in the same ownership and again take advantage of the natural contours of the land.
Conversely, there is clear evidence that the ongoing urban development of the township and the MIE has created increased areas of impermeable surfaces within those catchments by way of areas of hard standing and roofing. In turn, that increase is factored into the hydrological estimates of both Mr Kovacevic and Dr McCowan (although they do not use precisely the same numerical values in their modelling).
In the case of the township, although the catchment was already substantially included within the town area by 1949, the process of urban development generated an increase in drainage flow over the next 38 years, particularly in the 24 hour, 1 year ARI event as distinct from more major flood events.[76] Since 1987, the potential flows from the catchment have been essentially stable. They have increased for some sub-catchments and decreased for others. In the case of the MIE catchment, the pattern is essentially the same.
[76]See Dr McCowan’s tables 12 and 13 set out at [117] above.
In the case of both catchments and, more particularly, the township catchment, we doubt that a flow increase generated by gradual and orderly urban development over more than a century is necessarily to be described as ‘unnatural’ in terms of the principles stated in Gartner.[77] But if we are wrong in this view, we do not accept that simply asserting that municipal drainage is generated by an urban catchment demonstrates that the flow from it is unreasonable.
[77](1962) 108 CLR 12.
We prefer the view that, if the use and development of land for township purposes has proceeded in an orderly and reasonable manner for more than a century, the flows generated by such use and development must be regarded as prima facie reasonable.
We turn then to the effect of the Bypass works. We accept that the effect of the Bypass works was to materially concentrate flows which had, on the evidence, previously traversed the northern boundary of the Hazelwood land in accordance with the natural contours.
We also accept that the drainage pipes under the Bypass do concentrate the flow in a manner which is not a natural flow and that they are directly connected to the MMD. In this proceeding, however, Hazelwood makes no complaint about the effect of the Bypass drains as such. It has deliberately sought no relief against Roads Corporation. Its complaint is with respect to what it calls public drainage water namely the flow which is generated from the land above the Bypass drains.
It follows that, although we accept that the flow from the Bypass drains is not a natural flow, this says nothing about the reasonableness of the flow into the Bypass drains from the township. It is the township catchment which generates approximately 50–60 per cent of the flow into the MMD[78] and it is the flow from the township drains which is the primary object of Hazelwood’s complaint in this proceeding.
[78]See Dr McCowan’s tables 8 and 9 set out at [116] above.
We should add for completeness that we accept that municipal drainage may also give rise to a change in the water quality of a drainage flow and, in this sense, transform it from a natural flow to one which is not natural. In the present case, the evidence shows that the Council has been required to construct GPTs both in connection with the township drains and the MIE drains. There is no evidence that these arrangements are unsatisfactory and this proceeding is not one turning on water quality issues.
The purpose for which the relevant drainage waters were collected and concentrated on the higher lands and the degree of care with which this was done[79]
[79]Water Act s 20.
The second aspect of s 20(1)(g) of the Water Act requires a consideration of the purpose for which the flow of water was relevantly collected and concentrated and the care with which it was done.
In the present case, the municipal drains were installed to collect water incidentally to the development of the township and the MIE areas. The Bypass drains were constructed to collect and concentrate water incidentally to the construction of the Bypass embankment.
There is no evidence that any of these works were carried out with other than due engineering skill and reasonable care. Further, the element of these works which plainly gives rise to a flow of water which is not natural, namely the Bypass drains, was constructed with the technically informed consent of the SECV as Hazelwood’s predecessor in title.
Hazelwood submits that the historic position of the SECV does not materially support the conclusion that the flow of water onto the Hazelwood land is reasonable. In our view, however, whatever other conclusions are drawn from this history, the technical involvement of the SECV in the construction of the current drainage arrangements does support the conclusion that they were implemented with an appropriate degree of care.
In summary, although the municipal drains collected waters from the township prior to the construction of the Bypass, they directed such waters into drainage channels conforming with the natural configuration of the land. There is no evidence that the municipal drains themselves have created an unnatural flow. They do, however, accommodate urban flows (ie flows which have increased in volume due to urban development) both from the township and the MIE land. The Bypass works materially altered and concentrated the natural flows across the boundary of the Hazelwood land but there is no complaint made with respect to their configuration in this proceeding. Both the municipal drainage works and the Bypass works were undertaken with reasonable care.
Whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effect of drainage on works and activities in the area
This consideration is raised by s 20(1)(d) of the Water Act. As the trial judge found, the evidence shows that, prior to the construction of the Bypass, extended consideration was given by the engineering staff of SECV, CRB and RCA to the nature of existing works and activities, the likely volume of drainage water which would flow onto the Hazelwood land, and the capacity of the MMD.[80] The assessment of the capacity of the MMD at that time has proved to be correct.
[80]Reasons [371].
Hazelwood submits that nevertheless there is no evidence that the Council’s predecessor took adequate account of the cumulative effect of drainage flows during the period of development of the Council public drainage system and the growth of the southern part of the township of Morwell during the period after 1949.
It is true that there is no evidence as to the extent and nature of works done after 1949, but nor is there any evidence that Council’s drainage works were themselves in fact the cause of increased flow between 1949 and 1987. The evidence attributes the increase in the flow during that period to increased urban development within the catchment.
The cumulative generation of the flow in conjunction with the growth of the township up until 1987 does not of itself demonstrate that the flow is unreasonable or that the design and management of Council’s drainage system lacked due care. The lack of any evidence of problems attributable to the forms of municipal drains themselves strongly suggests that they were designed with proper regard to their cumulative effects. The evidence also shows that the Council has had the benefit of ongoing engineering advice from its officers. The weight of the evidence as a whole thus supports the conclusion that the drains in issue were properly designed with due regard to their cumulative effects.
Whether the flow, or the act or works that caused the flow, were authorised
This consideration is raised by s 20(1)(a) of the Water Act.
The trial judge found as follows:
[Hazelwood] did not contend that there had been any lack of authority on the part of SECV, RCA, or any other party to construct the connecting drains and works, or the MMD itself. Most of this infrastructure has now been in use for many years. It was not contended otherwise. I conclude that the acts and works that caused the flow, and the flow itself, are authorised.[81]
[81]Reasons [371(a)] (citation omitted).
His Honour noted that the agreed facts described the Council as ‘authorised to perform … the functions and powers conferred on it … includ[ing] the provision of drainage.’[82]
[82]Ibid [371(a)] n 323.
Hazelwood submits that the judge failed to give effect to the definition of ‘authorised’ contained in s 3.[83] But this definition includes work authorised ‘by this or any other Act’.
[83]Water Act s 3 relevantly provides as follows:
‘authorised’, in relation to any act, means authorised (whether generally or specifically) by this or any other Act or by a licence, permit or other authority granted under this or any other Act and, in determining whether or not the construction of a dam is authorised, no account is to be taken of any direction given under section 80(1) or (2) or of the fact that any such direction has been complied with.
His Honour was entirely justified in finding that, in the absence of any evidence to the contrary and given the extended period of time over which the works were constructed, it should be concluded that the drainage works were carried out regularly by the Council, the RCA and SECV. There is no evidence that the works were not carried out in accordance with statutory authority and, in the absence of such evidence, it should be presumed that they were.
Whether the works were carried out pursuant to agreement to accept the flow
In the present case, it is apparent that, from 1949 to September 2011, the operator of the open cut mine acquiesced in the receipt of flows of drainage water originating from the township drains. Moreover, both at the time of the relocation of the MMD and at the time of the construction of the Bypass works, SECV specifically agreed to the connection of the municipal drainage system through the Bypass drains into the MMD. In each case, this agreement was given having regard to detailed technical information relating to the probable extent and nature of such flows. The agreements were also given knowing that the Council’s predecessor would rely on them. In the first instance, it was understood that the municipality would consider the planning merits of the proposed relocation of the MMD on the basis that the receipt of surface flows of drainage waters would continue. In the second instance, it may be inferred that the SECV knew that Council would deal with the RCA when responding to the Bypass proposal on the basis that drainage through the Bypass land would continue.
Whilst no question of an easement by way of long user arises,[84] the long history of acceptance of surface water flows for a period of more than 60 years must materially support the conclusion that such flows should be regarded as reasonable. Likewise, the specific informed consent to the continuation of such flows when the MMD was relocated and, in turn, when the Bypass works were constructed, supports the same conclusion.
[84]The Bypass land is vested in the Crown pursuant to the Road Management Act 2004 sch 5 cls 1, 2.
Hazelwood submits that the willingness of the SECV to accept the flow into the MMD does not demonstrate that the flow is reasonable because Hazelwood withdrew consent to any such flow in September 2011.
We accept that the weight to be given to the consent of the SECV and the continuing acquiescence in the flow by both SECV and Hazelwood must be assessed having regard to the fact that the consent has now been withdrawn. Nevertheless, the history of consensual flow over a period of more than 60 years remains relevant to assessment of the reasonableness of the continuation of the flow and supports the view that that flow is reasonable.
The consensual continuation of the flow of water from the MIE after privatisation also supports the same conclusion.
The significance of the risk that the flow will cause damage to the Hazelwood land
The trial judge recorded that there was no evidence of the extent to which costs associated with the maintenance of the MMD are greater because of the receipt of public drainage water from Council drains.[85]
[85]Reasons [378].
The issue to be determined is, however, not whether the maintenance cost of the MMD is presently reasonable, but whether the flow onto Hazelwood’s land is reasonable.
In this regard, we accept Hazelwood’s submission that the fact that the flows from the Bypass drains and the MIE drains contribute to an ongoing cumulative risk of significant damage to the rehabilitated parts of the mine is a consideration which supports the conclusion that the flow from the higher lands onto Hazelwood’s land is unreasonable.
On the other hand, the additional fact that, as Hazelwood submits, Council could theoretically compulsorily acquire a drainage easement over the MMD or itself undertake major drainage works on the northern side of the Bypass to direct the flow elsewhere, seems to us to be of little weight when answering the question of whether the flows which presently occur are or are not reasonable.
The expiry of the mining licence in 2026
Hazelwood emphasises the fact that its mining licence will expire in 2026 as demonstrating that the current arrangement with respect to the MMD should not be regarded as providing a continuing basis for concluding that the flow of drainage waters onto its land is reasonable.
We do not understand the Council to contend, nor the evidence to demonstrate that Council officers have ever understood, that the MMD would necessarily constitute a permanent arrangement.
The MMD is a component of a mine which will cease operations and go through progressive rehabilitation to a state of final rehabilitation in accordance with the requirements of the relevant regulatory authority.
The issue with which we are concerned is not the future of the MMD, but simply whether the current flow from the catchments which are served by municipal drains is reasonable.
Is the flow reasonable?
For the above reasons, we are not satisfied that the trial judge erred in finding that the flow of water from the Council drainage system which passes into the MMD was a reasonable flow of water.
In our view, his Honour’s assessment of the evidence against the relevant statutory criteria contained in s 20(1) of Water Act was substantially correct and his overall assessment of the ultimate issue by reference to the evidence as a whole was also substantially correct.
We have dealt with each of the specific errors alleged in ground 3 of appeal in the course of our analysis.
More particularly, the following considerations taken together support the conclusion that the flow is reasonable:
(ee) the original contours of the land;
(ff) the use of the higher lands;
(gg) the limited sense in which the flows complained of do not constitute natural flows;
(hh) the purpose for which and degree of care with which the relevant drains were constructed;
(ii) the lack of any evidence of want of due regard to the cumulative impact of relevant drainage works;
(jj) the fact that the relevant drainage works must be presumed to have been carried out in accordance with statutory authority; and
(kk) the fact that Hazelwood’s predecessor in title agreed to the current form of drainage connection to its land and that SECV and Hazelwood have together acquiesced in the flow of water from municipal drains serving the township catchment onto the Hazelwood land for more than 60 years prior to Hazelwood’s purported withdrawal of consent to the continuation of such flows. Likewise, the fact that the flow from the drains serving the MIE catchment has been the subject of consent and acquiescence since privatisation.
Conversely, whilst we accept that the current arrangement with respect to the MMD cannot be regarded as necessarily permanent and that due regard must be had to the fact that the flow carries with it an ongoing risk of serious damage to Hazelwood’s land (in particular to the northern batters) with consequential ongoing maintenance costs, these considerations do not outweigh the matters supporting the view that the flow is reasonable.
We have had regard to s 20(2) in reaching these conclusions.
It follows that ground 3 must fail. This failure is fatal to the claim for declaratory or injunctive relief directed to restraining the flow of water from municipal drains onto the Hazelwood land.
Ground 4 — The learned trial judge erred in finding that Hazelwood’s claim for declaratory and injunctive relief should be refused on discretionary grounds, without taking into account that Hazelwood submitted any injunctive relief would appropriately be subject to a stay for sufficient time to enable council to compulsorily acquire the MMD or construct an alternative means of drainage
The trial judge ultimately concluded that, quite apart from the merits of Hazelwood’s claim, no declarative or injunctive relief in the form sought facilitating self-help by Hazelwood should be granted.
Hazelwood claimed an injunction restraining the Council from continuing to discharge public drainage water into the MMD and a declaration as to its right to prevent such flow.
His Honour concluded that such orders would be inappropriate because they would have serious consequences to public safety and property and would cause great uncertainty.[86] He elaborated the risk of flooding which would result from Hazelwood blocking the drains which flow under the Bypass.[87]
[86]Ibid [399].
[87]Ibid [401]–[404].
He concluded that the blocking of these drains in the present circumstances would result in serious flooding and damage to property.
In our view, the trial judge was correct to reach these conclusions on the evidence.
The proposition that the risk of flooding could be ameliorated by a stay was specifically taken into account and addressed by his Honour at [408] of his Reasons. Ground 4 thus fails. Moreover, his Honour was correct to conclude that granting a stay of the type suggested by Hazelwood would not necessarily resolve the risk in issue.
We would also observe that, were the Court to authorise the self-help sought by Hazelwood, the seriousness of the flooding consequences would result to a material extent from the fact that Hazelwood seeks to stop not just the increase in flow from municipal drains since 1949 but the whole of such flow.
Hazelwood accepts that the flow as at 1949 was reasonable, and complains of the increase in flow between 1949 and 1987, yet it does not restrict its claim for relief to this increase.
We further note that his Honour was correct to identify the fact that neither Roads Corporation nor other property owners potentially affected by the orders sought are before the Court.
We regard this as a significant matter providing a discrete basis for the refusal of discretionary relief. The evidence makes abundantly plain that, if Hazelwood were to exercise self-help by blocking Roads Corporation drains, there is a substantial risk of flooding both parts of the Bypass and other properties north of the Bypass.
In our view, the injunctions and declaratory relief of the type sought should not be granted in the absence of the consent of Roads Corporation as a property owner directly affected unless it is joined as a party to the proceeding. The drains which it is seeking to block were constructed by Roads Corporation’s predecessor at its cost as part of the integrated design of the Bypass. The construction drawings show that in part they drain earthen drains between the carriageway of the Bypass and that they also drain the freeway reserve more generally. If the drains flowing onto the Hazelwood land are blocked, Roads Corporation will suffer special damage above that of the public generally. In our view, Roads Corporation is a necessary contradictor to the claim for relief.[88] This is a matter that goes to the exercise of the discretion to grant the relief, rather than the jurisdiction of the Court to grant the relief.[89]
[88]Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, 437–8; Johnco Nominee Pty Ltd v Albury-Wodonga (NSW) Corp [1977] 1 NSWLR 43.
[89]C E Heath Casualty & General Insurance Ltd v Pyramid Building Society (in liq) [1997] 2 VR 256, 258–62.
Lastly, we record that there is an unresolved issue of the jurisdiction of this Court to grant injunctive relief of the type sought. Whilst it is plain the Supreme Court might make declarations as to whether the MMD is a public drain, it is at least arguable that exclusive jurisdiction with respect to the injunctive restraint of the unreasonable flow of drainage waters is granted to the Victorian Civil and Administrative Tribunal by ss 16, 17 and 19 of the Water Act.[90] Nevertheless, neither party invited us to finally determine this issue and we have not formed a concluded view with respect to it.
[90]Water Act s 19 provides as follows:
(1)The Tribunal has jurisdiction in relation to all causes of action (other than any claim for damages for personal injury) arising under sections 15(1), 16, 17(1) and 157(1) of this Act or at common law in respect of the escape of water from a private dam.
(3)In exercising jurisdiction conferred by subsection (1), the Tribunal—
(a)may by order, whether interim or final, grant an injunction (including one to prevent an act that has not yet taken place) if it is just and convenient to do so; or
(ab)may make an order for payment of a sum of money awarding damages in the nature of interest; or
(b)may make an order that is merely declaratory.
(3A)Nothing in subsection (3) takes away from or affects the Tribunal’s powers under section 123 or 124 of the Victorian Civil and Administrative Tribunal Act 1998.
(4)In awarding damages in the nature of interest, the Tribunal may base the amount awarded on the interest rate fixed from time to time under section 2 of the Penalty Interest Rates Act 1983 or on any lesser rate that it considers appropriate.
(5)The Tribunal may in respect of any works that give rise to a cause of action of a kind referred to in subsection (1) make any order with respect to—
(a)compensation for damage to land; or
(b)the continuation, removal or modification of works; or
(c)payment of the costs of the removal or modification of works—
that it considers appropriate.
(8)Nothing in this section prevents a person from bringing before a court a claim for damages for personal injury based on a cause of action of a kind referred to in subsection (1).
(9)In determining a cause of action arising under section 15(1), 16, 17(1) or 157(1) of this Act the Tribunal must apply to the questions of causation and remoteness of damage the same tests as a court would apply to those questions in an action based on negligence.
(10)Subject to subsection (8), a proceeding based on a cause of action of a kind referred to in subsection (1) must not be brought otherwise than before the Tribunal.
See also Coles Myer Ltd v City West Water Ltd (1998) 14 VAR 37; Roads Corporation v Maclaw No 469 Pty Ltd (2001) 19 VAR 169; Transpacific Cleanaway Ltd v South East Water Limited (Real Property) [2008] VCAT 1798; South East Water Limited v Transpacific Cleanaway Pty Ltd (2010) 27 VR 387.
Conclusion
For the above reasons, leave to appeal should be granted, but each of the four grounds of appeal should be rejected and the appeal should be dismissed.
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APPENDIX 1
SCHEDULE 5 — Rainfall- Runoff Model Layout (RORB)[91]
[91]Reasons sch 5.
APPENDIX 2
SCHEDULE 6 — Drainage and Catchment Summary[92]
[92]Ibid sch 6.
| Discharge Location | Drainage and Catchment Characteristics |
| 1 (Upstream) | Represents the MMD catchment upstream of the LCC stormwater drainage connections. The catchment consists predominantly of Hazelwood land. |
| D | LCC drainage enters the MMD from the east, passing under Miners Way. The stormwater drainage infrastructure appears only to drain a small portion of land at the south-western corner of the industrial estate. |
| C | LCC drainage enters the MMD from the east, passing under Miners Way. The stormwater drainage infrastructure appears to drain a significant portion of the industrial estate. |
| B | LCC drainage enters the MMD from the east, passing under Miners Way. The stormwater drainage infrastructure appears only to drain a small portion of land within the industrial estate. |
| A | LCC drainage enters the MMD from the north-east, passing under Miners Way. Two main stormwater trunk drainage lines enter the MMD at this location, both of which collect runoff from LCC controlled land north of the Princes Freeway) and from the industrial estate south of the freeway and immediately to the east of the MMD. A portion of this catchment collects runoff from the freeway (VicRoads catchment). |
| Z | LCC drainage enters from the north and VicRoads drainage enters from the north-east. A concrete apron is present at the outfall of the two stormwater drainage systems with a connection to the LFP. A large proportion of the total catchment is contributing to flow at this location. |
| Y | VicRoads drainage enters from the north. There does not appear to be any additional LCC drainage contributing to flow at this location. |
| X | LCC and VicRoads drainage enters from the north. The LCC stormwater drainage collects runoff from a small catchment on Wallace Street. |
| W | VicRoads drainage enters from the north conveying flow collected at a surface inlet on the northern side of the freeway. There does not appear to be any additional LCC drainage contributing to flow at this location. |
| V | VicRoads drainage enters from the north conveying flow collected at a surface inlet on the northern side of the freeway. There does not appear to be any additional LCC drainage contributing to flow at this location. |
| U | The only additional catchment is from land within the MMD and on Hazelwood land to the south of the MMD. There does not appear to be any additional LCC or VicRoads drainage contributing to flow at this location. |
| T | The only additional catchment is from land within the MMD and on Hazelwood land to the south of the MMD. There does not appear to be any additional LCC or VicRoads drainage contributing to flow at this location. |
| S | LCC and VicRoads drainage enters from the north. The LCC stormwater drainage collects runoff from the western Morwell drainage catchment and enters the MMD downstream of the drop structure. The VicRoads stormwater drainage collects runoff from the roadway and median strip from west of discharge location X. The location is just upstream of the metal flume on the MMD. |
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