Hazelwood Power Partnership v Latrobe City Council

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2013 03795

HAZELWOOD POWER PARTNERSHIP	Plaintiff
v
LATROBE CITY COUNCIL	Defendant

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JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATE OF HEARING:	6-9, 16 July 2015
DATE OF JUDGMENT:	19 November 2015
CASE MAY BE CITED AS:	Hazelwood Power Partnership v Latrobe City Council
MEDIUM NEUTRAL CITATION:	[2015] VSC 638

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LOCAL GOVERNMENT – Meaning of ‘public drain’ – Principles of construction – Alienation of private property - Vesting of public drains in municipal councils - Management and control of drain - Local Government Act 1989 (Vic) sub-ss 198(1)-(2).

WATER LAW – Public drainage – Private drains – Ownership of main drain – Free flow principle - Effect of privatisation of State Electricity Commission of Victoria – Mining property – Water Act 1989 (Vic) ss 16, 20.

PRIVATISATION – Allocation statements – Vesting of land and property - Effect of Electricity Industry Act 1993 (Vic).

MINING – Mining licences – Licence conditions – Work Plan – Mine rehabilitation – Batter stability - Mineral Resources (Sustainable Development) Act 1990 (Vic).

EQUITABLE RELIEF – Declarations – Injunctions – Flooding – Damage to property – Risk to persons – Relief would be refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Collins QC with Dr R Sadler	King & Wood Mallesons
For the Defendant	Mr A Finanzio SC with Ms M O’Sullivan	Maddocks

Index of headings

Introduction

Vesting of public drains in councils

HPP’s submissions

Latrobe’s submissions

Relevant principles of construction

The meaning of the word ‘public’

New Zealand authorities

Conclusion as to the proper construction of s 198 LGA 1989

Ownership of the mine and surrounding land

Hydrology evidence

Construction of the MMD

Relocation of the original MMD

Conclusion as to the status of the MMD no later than 1975 at or following the partial relocation and significant redevelopment of the MMD

Construction of the Morwell Bypass

Conclusion as to the status of the MMD prior to 1985

Evidence as to the period 1989 to 1995

The effect of a 1979 Crown Grant

Privatisation

Morwell Industrial Estate

Mining legislation

HPC Mining Licence

Factual matters subsequent to September 1996

2009 meetings

2011 sinkhole incident

Access to the MMD

Provision of GPT’s

Conclusion as to the status of the MMD

Can Latrobe discharge drainage water into the MMD?

Is the flow of water from council drains into the MMD reasonable?

Need for continuing inspection and maintenance of the MMD by HPP

Cost of inspecting and maintaining the MMD

Risk of water entering the network of coal joints and cracks in the northern batters

Acquisition of the MMD by Latrobe

Conclusion as to the reasonableness of the flow of water

Should relief be granted?

Common law claims in trespass and nuisance

Conclusion as to proceeding

Schedule 1 – Statutory predecessors of s 198 of the LGA 1989

Schedule 2 - The HPP Land

Schedule 3 – Schematic Plan of MMD and Surrounds

Schedule 4 – Agreed Statement of Facts

Schedule 5 – Rainfall- Runoff Model Layout (RORB)

Schedule 6 – Drainage and Catchment Summary

HIS HONOUR:

Introduction

This proceeding concerns a large drain (‘the MMD’)[1] to the north of the pit of the Hazelwood Coal Mine (‘the mine’) and to the south of the Princes Freeway near Morwell in the Latrobe Valley. The mine is a large open cut coal mine about 120 metres deep constructed by the former State Electricity Commission of Victoria (‘SECV’) in 1949. The coal seam is about 100 metres thick. The mine is located within the municipal district of the Latrobe City Council (‘Latrobe’).
[1]The drain has been given various names over time, and is described in the pleadings as the Morwell Main Drain. The parties are in agreement that nothing turns on the name of the drain.

Hazelwood Power Partnership (‘HPP’), the owner of the mine, contends that the part of the MMD (which it termed the ‘public section’ of the MMD) through which drainage water from the southern part of the township of Morwell and the nearby Morwell Industrial Estate (‘MIE’) passes is a public drain under s 198(1)(a) of the Local Government Act 1989 (Vic) (‘LGA 1989’) and the predecessors of that provision. As a result, HPP claims that the public section of the MMD vested in Latrobe no later than September 1996 and is, or should be, under the management and control of Latrobe. Accordingly, HPP argues that the MMD should have been maintained by Latrobe at Latrobe’s expense since no later than September 1996.

HPP’s claim as amended at the commencement of the trial identifies three time periods in which the vesting of the public section of the MMD is said to have occurred.[2] It claims that the public section of the MMD vested in Latrobe (or its predecessor, the Shire of Morwell):[3]
[2]Second Further Amended Statement of Claim dated 6 July 2015. In its Further Amended Statement of Claim dated 22 December 2014, HPP claimed that vesting occurred at least from the date of privatisation. This was in or around September 1996.
[3]The Shire of Morwell became the City of Morwell on 23 September 1990. Latrobe came into existence on 2 December 1994 when the City of Morwell was merged with other municipalities. In this judgment, Morwell is described as a township albeit that it became a city in 1990.

(1) no later than 1975, at or following the partial relocation and significant redevelopment of the MMD;

(2) no later than 1985, when the Morwell Bypass of the Princes Freeway (‘Morwell Bypass’) was completed and the Road Construction Authority (‘RCA’) and SECV carried out further works on the MMD; or

(3) no later than September 1996, when the mine and the land on which it is located (‘the HPP land’)[4] were privatised and acquired by HPP.[5]

[4]The HPP land is described in Schedule 2.

[5]HPP accepts that the vesting of the MMD could not have occurred between 1 November 1989 (the commencement of LGA 1989) and September 1996 (the date of privatisation) as SECV was a public body for the purposes of s 198(2) of LGA 1989.

Alternatively, if the public section of the MMD is not vested in Latrobe, HPP says that Latrobe has no right to discharge public drainage water from the township of Morwell or from the MIE into the MMD. HPP claims the right to undertake works on the HPP land to prevent public drainage water from flowing into the MMD.

HPP seeks various declarations from the Court in recognition of its claimed rights. It seeks an injunction restraining Latrobe from discharging public drainage water into the public section of the MMD.

Latrobe denies these claims and says that the whole of the MMD is and always has been a private drain under the management and control of the mine owner. It says that under s 16 of the Water Act 1989 (Vic) (‘Water Act’), HPP is obliged to receive reasonable flows of water from other land, including public drainage water from the council drains servicing the southern part of the township of Morwell and the MIE.

Both HPP and Latrobe rely on expert and lay evidence. There is substantial agreement as to most facts. The parties expedited the proof of facts by an extensive Agreed Statement of Facts.[6] The agreed facts are of considerable assistance to the Court.[7] The parties also have agreed on the admission into evidence of a large number of documents including records of the former SECV. All documents tendered have been reviewed and taken into account. At the trial, each party cross-examined some witnesses called by the opposing party.
[6]Statement of Agreed Facts dated 3 July 2015 (‘agreed facts’).
[7]See Schedule 4.

The Court conducted a site visit to the mine on Tuesday 7 July 2015, inspecting the MMD and surrounding area, accompanied by the legal representatives for both parties. The inspection assisted the Court to understand the evidence. The Court has not drawn any inferences from what it observed or noticed during the inspection.[8]
[8]See: Evidence Act 2008 (Vic) s 54.

Vesting of public drains in councils

Section 198 of the LGA 1989 states:

198Sewers 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.

Section 3(1) of the LGA 1989 states:

public body means any government department or municipal council or body established for a public purpose by an Act of the Parliament of Victoria, any other State or Territory of the Commonwealth, or the Commonwealth.

The effect of s 198(1) is to vest in a municipal council ownership of public drains as well as drains in and under roads within the municipal district, including works and materials.[9] It is not suggested that the MMD is a sewer, or that the references to sewers in s 198 have any application in the present case. Section 198 is in Part 9 of LGA 1989 entitled ‘Specific functions, powers and restrictions’. Division 1 is headed ‘General provisions’. While ss 199 and 200 also deal with the subject of drainage, little assistance is to be gained in the construction of s 198 from either the context or the definitions in LGA 1989 apart from that of ‘public body’.
[9]See: Sellers v Mayor of Hawthorn (1888) 14 VLR 514, 516-8; Moreland City Council v Building Appeals Board [2000] VSC 84 [24]-[25].

There is no doubt that in construing s 198, the phrase ‘public drains’ must include drains within a municipal district that would, but for the operation of the section, be privately owned. It is important to resolve how it is to be decided whether a drain on private land is a public drain. Both parties agreed that the construction of s 198 is at the heart of the case.

The provision that immediately preceded s 198 was s 642 of the Local Government Act 1958 (Vic) (‘LGA 1958’). This states:

(1)All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, shall vest in and belong to the municipality, and the council shall have the management and control of the same.
(2)Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.
(3)This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works or in the Geelong Waterworks and Sewerage Trust.

Although the statutory predecessors of s 198 go back well over a century,[10] and despite the researches of counsel, no decision of an Australian court giving definition to the expression ‘public drains’ has been found.[11] A number of authorities concerning the equivalent provision in New Zealand have been located.[12]
[10]Schedule 1 is a schedule helpfully provided by Senior Counsel for HPP setting out the Victorian statutory predecessors of s 198(1).
[11]See Joseph T. Collins and Cecil H. Meaden, Local government law and practice (Law Book Co of Australasia Ltd, 2^nd ed, 1933).
[12]See below [61]-[82].

HPP’s submissions

HPP alleges that when it purchased the mine in September 1996, the MMD was a public drain. By the operation of s 198(1), it was vested and under the management and control of Latrobe. It says that the drainage function that the MMD performs is the continuation or extension of the public drainage of the township of Morwell. Because the MMD was connected to the public drainage system in September 1996, it became a public drain. While the MMD also had the function of draining water from a catchment including parts of the HPP land, it says that this did not detract from its public nature. HPP no longer requires the MMD for its purposes, and would divert the water from its land through an alternative route to the settlement ponds if it meant that it could decommission the MMD.

HPP submits that the fundamental characteristic that makes a drain a public drain is that it performs a public drainage function. A drain has a public drainage function if it carries water collected from a number of privately owned properties or from public areas.[13] The practical effect of HPP’s submission is that any drain that collects water from a number of private properties or from public areas is vested in the municipal council.
[13]Plaintiff’s Closing Submissions dated 15 July 2015 [8].

In support of its submission, HPP contends:

(1) this construction of the phrase ‘public sewers and drains’ is consistent with the statutory context of s 198. The functions and powers of a council are stated in general terms in ss 3E and 3F of the LGA 1989. The functions and powers conferred on councils within its municipal district by LGA 1989 and corresponding previous enactments have for many years included the provision of drainage;[14]

(2) the vesting of ownership, management and control of drains into which water collects from a number of privately owned properties and public areas facilitates the performance by councils of their local government function; and

(3) for a drain to be counted within the category of ‘public sewers and drains’ within the meaning of s 198(1)(a), it is sufficient if the drain is a drain into which other public drains (which collect water from a number of private properties or public areas) are connected, either directly or indirectly.

[14]Agreed facts [6].

HPP submits that there may also be drains which do not perform a public drainage function, but which because of other characteristics and circumstances may be public drains. This would include some but not all drains connected upstream of a public drain.

HPP alternatively contends that if the MMD is not a public drain, then the flow of public water into the MMD is unreasonable because it casts a burden on HPP. If HPP did not attend to the maintenance of the drain, it would have serious consequences. Water could seep from the drain, and cause movement. HPP claims an injunction restraining Latrobe from causing a nuisance, or committing a trespass. It says that Latrobe has the right to acquire the right to drain over HPP’s land, but has not done so because it wants to retain the benefit of the MMD, but not accept the burden.

HPP says that the original purpose of a drain on private land will almost inevitably be for something which benefits the private owner who constructed it. However, a private drain becomes a public drain if it carries water from the public system.

HPP’s contention is that if any public water goes into a private drain the drain becomes a public drain. Section 198 is triggered, and the private landowner loses property in the drain. According to HPP, at this point the drain and all of the works and materials that constitute the drain pass to the council and cease to be the property of the landowner. In the case of HPP, the drain would also cease to be part of its mining tenement. There would be a strip of land across the mining property vested in, and under the management and control, of Latrobe.

In response to an observation by the court that this would mean that private landowners would need to be on the lookout to make sure that no public water goes down their drains lest they lose them, Senior Counsel for HPP responded that there may be situations where something more formal is needed than simply water from a public drain. However, Senior Counsel submitted that in the present situation where there was a deliberate decision by SECV to accept public drainage on the basis that there would be an uncontrolled flow of water from the public drainage system formally connected to the MMD, the consequence is that the MMD became a public drain vested in the council. SECV’s decision to accept public water was essentially made out of benevolence. It could have rejected the connection of council drains into the MMD, but did not do so.

If correct, HPP’s submission has paradoxical, if not perverse, results. Acting out of benevolence, SECV accepts public drainage water from the township of Morwell into the MMD. According to HPP, the legal consequence of this benevolence is that the MMD becomes vested in Latrobe albeit at a later time. It is very strange that by accepting public drainage, much of the MMD is lost to the landowner and ultimately vests in the council. Senior Council for HPP submitted that contractual terms between a private landowner and a council might be capable of preventing the operation of s 198 where the parties agreed that the private landowner would receive and treat the water for a council. It would be a necessary element of such a private arrangement that the private landowner would have an express right to terminate the acceptance of the water.

In response to Latrobe’s submissions as to the considerations that should be taken into account in determining whether a drain was a public drain, HPP submitted in substance:

(1) upon its construction of s 198, responsibility for the construction of the drain, including design and funding, is irrelevant as this does not preclude the drain from having a public drainage function;

(2) the regulatory framework applying to the use of the land is not a qualification on the operation of s 198(1);

(3) the ownership of the land on which the drain is located is not relevant as it would mean the section does not operate when the drain is on private land;

(4) the identity of the person with control over the drain itself, the land in which the drain is situated, the land in the vicinity of the drain, and the maintenance of the drain are all considerations inconsistent with s 198 because the provision applies to land which is privately owned, and drains that are constructed at the cost of the private individual, and but for the operation of s 198 are not owned, managed or controlled by the council;

(5) s 198 was not qualified by any condition relating to the efficacy of control or management by a municipal council;

(6) there is no such thing as a private drain downstream of a public water system; and

(7) a very minor or unconscious acceptance of public water by a private drain owner for a short period might not be enough to make the drain ‘a public drain’, as there is no deliberate decision by the private landowner to accept the water. The same result might ensue if the public water is insignificant in volume.

Finally, HPP submitted that the fact that the MMD drains water from the land on which it is situated as well as the public drainage system does not alter its character as a public drain. It was open to the court to decide that the public function of a drain had to be significant for it to be treated as a public drain. The MMD certainly satisfied that criterion.

Latrobe’s submissions

Latrobe submits that in the absence of a statutory definition, the meaning of the phrase ‘public drain’ is to be derived from its common meaning and its legislative context. A meaning which gives effect to the purpose of the legislation is to be preferred.

Latrobe relies on s 1A(1) of LGA 1989:

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.

Latrobe further relies on s 1(1) of LGA 1989, which sets out the Preamble:

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.

The local government charter is set out in Part 1A of LGA 1989. Section 3A provides:

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.

In Taylor v Corporation of Oldham,[15] Jessel MR observed as to a provision that ‘all existing and future public sewers and drains within the borough, and all existing and future sewers and drains’ … are to ‘vest in and belong to the corporation’:

Now, that is a very useful provision. It was found under the old law, and it was sometimes held, that the sewer authorities […] had only an easement, and it was found to be very inconvenient, and consequently in the modern Acts the property in the sewers has been vested in the sewer authorities. That is to say, that instead of allowing the subsoil to remain in the owner of the soil, subject to an easement or right of sewerage or drainage, the absolute property in the sewer (which means not merely the brick barrel, or whatever it may be, forming the sewer, but the whole interior of the sewer, that is, the whole of the space occupied by it) is now vested in the sewer authorities. And if the sewer is a large one, it amounts, in substance, for all useful purposes, to the whole of the subsoil, and that is absolutely vested in the corporation.[16]

[15](1876) 4 Ch D 395.

[16]Ibid 411.

Latrobe submits that this passage identifies the fundamental purpose underlying s 198(1) and its predecessors. Sewerage and drainage authorities require the vesting of the sewers and drains under their administration to conveniently carry out their functions. If there is merely an easement or right of sewerage or drainage, then property in the sewer or drain remains with the land owner. Provision of sewerage or drainage systems would be very difficult if authorities had to deal with large numbers of landowners each with individual property rights over sewers and drains. Innumerable landowners might be involved in a single large sewerage or drainage scheme. Latrobe submits that the phrase ‘public drain’ as it pertains to those drains which vest in a council, needs to be understood in the context of municipal governance. It says that s 198(1) exists for the purpose described in Taylor v Oldham. The provision gives municipal councils absolute control and management over assets, but only those which can be properly considered to fall within a municipal council’s purview. Moreover, as s 198(2) makes clear, not all public drains vest in municipal councils. The existence of s 198(2) reinforces the notion that it is not public drains per se which vest in councils, but only those drains which are properly considered to be within a council’s municipal domain. Similar exclusions existed in the LGA 1958.

Latrobe submits that a drain is not a public drain, for the purpose of the vesting provision, simply because the drain carries public drainage water. The carriage of public drainage water may well be a necessary prerequisite to a finding that a drain is a public drain, but it is not determinative of the question. The passage of public water through a drain alone does not sufficiently inform the inquiry.

Latrobe submits that the phrase ‘public drain’ must be read in its legislative context having regard to the characteristics of the drain, its purpose, function and the circumstances which make it amenable to the management and control of a municipal council to the exclusion of all others.

Latrobe points to previous legislation which is directed to the same objective – the vesting in municipal authorities of drains over which such authorities should have power and control. Past legislation has drawn clear distinctions between drains which properly vest in local councils and drains which ought not. For example, the Public Health Act 1875 (Imp)[17] drew distinctions between drains ‘made by any person for his own profit, or by any company for the profit of the shareholders’; [18] those directed at irrigation, or constructed pursuant to legislation; those ‘under the authority of […] commissioners of sewers’,[19] and said that the remainder, existing or future, were to vest in the local authority.[20] In Sykes v Sowerby Urban District Council,[21] 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 that from time to time the site of this drain was moved’.[22] All members of 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.[23]
[17]Considered in Sykes v Sowerby Urban District Council [1900] 1 QB 584 and Taylor v Oldham (1876) 4 Ch D 395.
[18]Sykes v Sowerby Urban District Council [1900] 1 QB 584, 591.
[19]Ibid.
[20]Public Health Act 1875 (Imp) s 13.
[21][1900] 1 QB 584.
[22]Ibid 588.
[23]Ibid 590, 592, 595.

Latrobe submits that the approach taken by English courts under public health legislation highlights that there are drains which convey public water but are nonetheless not appropriately vested in local authorities. It is necessary to consider whether there are matters that militate against the conclusion that a drain is not appropriately vested in a municipal council, notwithstanding that the drain conveys public drainage water.

In addition to the flow of public water through the drain, Latrobe says that it is necessary to consider:

(1) the purpose of the drain and the historical reason for the construction of the drain;

(2) who had the responsibility for construction of the drain, including design and funding;

(3) the regulatory framework which applies to the use of the land, in particular, as it relates to drainage management;

(4) the ownership of the land on which the drain is located;

(5) the identity of the person with control over;

(i) the drain itself;

(ii) the land on which the drain is situated;

(iii) the land in the vicinity of the drain as it relates to and affects the ability of the drain to perform as a drain;

(iv) the management of the drain and the land in the vicinity of the drain (including such things as the maintenance of the drain and its surrounds, land use activities in the vicinity of the drain which relate to the ability of the drain to perform as a drain); and

(6) the efficacy of the drain in question being subject to the absolute control and management of a municipal council.

Latrobe submits that the decided cases in New Zealand courts[24] which consider the expression ‘public drain’ or a like expression support the contention that:
[24]Petone Borough v Daubney [1954] NZLR 305 (Court of Appeal); Connolly v PalmerstonNorth City Corporation [1954] NZLR 1006 (Supreme Court); Stubbs v TaumarunuiBorough [1975] 1 NZLR 125 (Supreme Court); Wellington and Manawatu Railway Company (Limited) v Mayor of Wellington (1895) 14 NZLR 472 (Supreme Court) (‘Wellington and Manawatu Railway Company’); Aprea v Wellington City [1969] NZLR 409 (Supreme Court); and Wellington CC v Longhurst [1995] 3 NZLR 300 (Court of Appeal).

(1) a determination as to the status of a drain as a public drain may involve a consideration of many factors bearing upon the question of characterisation of the drain as public;

(2) the factors identified in the decided cases that are relevant to the question of whether a drain is a public drain are not to be treated as an exhaustive list of factors, or framed as a test;

(3) no one factor taken in isolation is necessarily determinative;

(4) the weight to be given to any particular factor depends upon the circumstances, and is ultimately a question of fact and degree; and

(5) whether or not a drain is properly regarded as a public drain may be the result of a combination of factors, and their interrelationship arising from the facts and circumstances in which the drain was constructed, managed and controlled.

Latrobe says that having regard to all of the relevant facts and circumstances, the MMD has never been under Latrobe’s management or control (or that of the Shire of Morwell) in any sense contemplated by s 198(1), nor should it have been. The drain has been, and continues to be, part of a working mine, which is itself completely inconsistent with the notion that it ought be vested in a municipal authority because it conveys public drainage water.

Relevant principles of construction

The significance of the statutory text in construction was emphasised in Commissioner of Taxation v Consolidated Media Holdings Limited:[25]

[As was said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue] “This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text”. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.[26]

[25] (2012) 250 CLR 503.

[26]Ibid 519 [39] (citations omitted).

Important principles of statutory construction were stated in Project Blue Sky Inc v Australian Broadcasting Authority:[27]

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".[28]

[27](1998) 194 CLR 355 (‘Project Blue Sky’), followed in Certain Lloyd’s Underwriters Subscribing to Contract No. IHOOAAQS v Cross (2012) 248 CLR 378, 389 [24]; Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 253 CLR 219, 236 [42]; and Independent Commission Against Corruption v Cunneen (2015) 89 ALJR 475, 483 [31].

[28]Project Blue Sky, 381-2 [69]-[71] (citations omitted).

The legal difficulties in determining property rights in pipelines in the absence of statutory definition are discussed in authority.[29] As was said by Osborn J in Alinta DEGP Pty Ltd v Wellington and East Gippsland Shire Councils,[30] in relation to gas pipelines:

Nevertheless, it can be seen that the questions of whether, and in what sense, underground gas pipelines are to be regarded as the subject of an interest in land, are of sufficient potential difficulty to make it entirely understandable that Parliament may wish to place the matter beyond doubt with respect to a particular class of pipeline by a provision such as s 140 [of the Gas Industry Act 2001 (Vic)].[31]

[29]See Commissioner of Main Roads v North Shore Gas Company Ltd (1967) 120 CLR 118; Newcastle-under-Lyme Corporation v Wolstanton Ltd [1947] Ch 92; and Borough of Glebe v Lukey (1904) 1 CLR 158.

[30](2005) 141 LGERA 187.

[31]Ibid 195 [41].

The same may be said of s 198 and its predecessors which put the ownership of public drains within municipal districts beyond doubt by vesting them in municipal councils and giving their management and control to municipal councils.

Nonetheless, caution should be exercised lest too wide a scope be given to a statutory provision that divests property rights from landowners without payment of compensation and vests them in authorities. Sewers and drains vested in authorities are encumbrances on land, and affect the building and development rights of the landowner. The existence of a public sewer or drain within a property can have a major impact on permissible development. There may be ongoing inconvenience to the landowner as the authority can enter the land at any time to maintain or replace the sewer or drain.

Section 198(1) is a direct interference with private property rights. While compensation is available upon the compulsory acquisition of land by a municipal council,[32] no compensation is payable upon the vesting of property rights in municipal councils under s 198(1).
[32]LGA 1989 s 187(2).

In R & R Fazzolari Pty Ltd v Parramatta City Council,[33] French CJ said as to the construction of statutes which interfere with property rights:
[33](2009) 237 CLR 603 (‘Fazzolari’).

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...[34]

[34]Ibid 618-620, [40]-[44] (citations omitted) referring to Greville v Williams (1906) 4 CLR 694; Wade v New South Wales Rutile Mining Co Pty Ltd (1969) 121 CLR 177; and Clunies-Ross v The Commonwealth (1984) 155 CLR 193. See also: D C Pearce and R S Geddes, Statutory Interpretation in Australia, (Lexis Nexis Butterworths, 8^th edn, 2014) 231-233 [5.22].

The principles of construction referred to in Fazzolari are of long standing. In Commissioner of Main Roads v North Shore Gas Co Ltd,[35] the majority accepted that the exercise of a right to lay pipes in another’s land confers a right to occupy part of the land in only a very limited and special way.[36] The majority adopted the analysis of the issue by Evershed J, as he then was, in Newcastle-under-Lyme Corporation v Wolstanton Ltd:[37]

In these circumstances and bearing in mind the general rule that no greater rights or interests should be treated as conferred on the undertakers than are necessary for the fulfilment of the object of the statute, it seems to me reasonably clear as a matter of the construction of s. 6 of the Act of 1847, that the terms of the section are not intended to confer and are not apt to confer on the undertakers any right of ownership or proprietorship of the land affected.[38]

[35](1967) 120 CLR 118.

[36]Ibid 127.

[37][1947] Ch 92.

[38]Ibid 103-4.

In Sydney Municipal Council v Young,[39] the Privy Council said of a provision vesting all public ways in a council:

Now it has been settled by repeated authorities, […], that the vesting of a street or public way vests no property in the municipal authority beyond the surface of the street, and such portion as may be absolutely necessarily incidental to the repairing and proper management of the street, but that it does not vest the soil or the land in them as the owners. [40]
[39][1898] AC 457.
[40]Ibid 459.

The meaning of the word ‘public’

The adjective ‘public’ is in frequent use in legislation as well as in ordinary parlance. Courts have commonly been required to give meaning to the word in a variety of contexts. In O’Sullivan v Farrer,[41] the High Court considered the meaning of the word ‘public’ when used in the expression ‘public interest’ extended to ‘undefined factual matters’[42] so wide as to confer a discretionary power. The Court said:

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 “…[43]

[41](1989) 168 CLR 210.

[42]Ibid 216.

[43]Ibid.

The seminal case is the decision of the House of Lords in Girls’ Public Day School Trust Ltd v Ereaut.[44] In a speech often quoted in later authority, Lord Macmillan said:

The adjective “public” is so elusive in meaning that the authors of the New English Dictionary preface their attempt at definition by the warning that “the varieties of sense are numerous and pass into each other by many intermediate shades of meaning. The exact meaning often depends upon the substantive qualified and in some expressions more than one sense is vaguely present; in others the usage is traditional and it is difficult to determine in what sense precisely the thing in question was originally called ‘public’.”[45]

[44][1931] AC 12 (‘Ereaut’)

[45]Ibid 34.

Lord Macmillan explains how a decision is to be made whether a school is 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 …[46]

[46]Ibid 34-35.

This approach recognises that there is no single test that defines a public school. All relevant features must be weighed in the balance, and a decision made as to which predominate.

In the same case, 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.[47]

[47]Ibid 30.

In The Little Company of Mary (South Australia) Incorporated v the Commonwealth,[48] the High Court followed Ereaut. Latham CJ said:

The adjective “public” is used in many collocations, and the meaning varies with the noun with which it is used. In “public park” and “public house” it is not difficult to state the meaning. The distinction between a park to which the public has access and the grounds of a private house is clear enough. So also a public house is readily distinguished from a private house. The meaning is not so clear in the case of phrases such a “public school,” “public institution,” “public hospital.”[49]

[48](1942) 66 CLR 368 (‘The Little Company of Mary’).

[49]Ibid 378.

Latham CJ quoted a passage from O’Connell v Newcastle Municipal Council,[50] where Jordan 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. [51]

[50](1941) 41 SR (NSW) 190.

[51]Ibid 193.

Latham CJ went on to observe:

It was held that the absence of any form of public contract and the non-public ownership of the hospital property did not compel the conclusion in that case that the institution was not a public hospital.[52]

[52]The Little Company of Mary 378.

In arriving at the same conclusion, Starke J said:

Lord Macmillan observed upon the elusiveness of the adjective “public” in Girls’ Public School Trust Ltd v Ereaut.
…
The hospital was established by a private organisation; it is not subject to the control or supervision of any public authority; the public have no right of admission – no trust or other right has been created in their favour and the patients are charged for their maintenance and treatment unless too poor to pay therefor. Apart from authority, I should not have thought that such a hospital would, in the ordinary and usual use of words, be described as a “public hospital,” but the question is one of fact to be resolved upon a consideration of all the circumstances.[53]

[53]Ibid 385-6 (citations omitted).

Rich J in dissent as to the result said to like effect on this aspect:

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.[54]

[54]Ibid 380.

The meaning of the word ‘public’ was considered by Macfarlane J sitting as a member of the Full Court of this Court in Re Income Tax Acts (No 1),[55] where the issue was whether a benevolent asylum was a ‘public benevolent institution’:

A great many cases have been cited in argument, in which the meaning of the adjective “public” in connection with charities, schools and other institutions had to be considered. The stock or general dictionary meaning, “pertaining to the public,” leaves the noun “public” to be defined, and also the method of “appertainment.” It may appertain in the sense that it belongs to the public, or that it is supported by the public or managed by the public, or that it is open to the public or any member of the public, or carried on for the benefit of the public and not for private gain – I am not professing to be exhaustive. But some such characteristic it must have before it can be called “public.” Its meaning in any particular context or section may depend on the antithesis intended.[56]

[55][1930] VLR 211.

[56]Ibid 216.

In Storey v North Sydney Municipal Council,[57] the High Court was concerned with the expression ‘public park and any land dedicated or reserved from sale by the Crown for public health, recreation, enjoyment or other public purpose of the like nature’ in local government legislation.[58] Walsh J referred to the observations of Lord Macmillan as to the elusive meaning of the adjective ‘public’.[59] Walsh J adopted the observation of Latham CJ in The Little Company of Mary that the adjective was used in many collocations and varied with the noun with which it is used.[60]
[57](1970) 123 CLR 574.
[58]Ibid.
[59]Ereaut 35.
[60]The Little Company of Mary 378.

More recently, Merkel J in Australian Hospital Care (Latrobe) Pty Ltd v Commissioner of Taxation[61] followed the approach adopted in Ereaut in determining whether a regional hospital was a public hospital for sales tax purposes, stating:

As was pointed out by the House of Lords in Girls’ Public School Trust Limited, the notion of what constitutes a “public school” in England changes over time, and consequently it is unlikely that any one factor will be conclusive. Historically, public schools were basically those founded or maintained by the community, whether state or local. More recent examples of public schools included schools owned by a limited company, the constitution of which allowed the payment of a limited dividend to its preference shareholders. It was held not to be essential for the constitution of a public school that there be a total absence of any interest of any private person in the school or the absence of any profit in the contemplation of its founders or managers.
…
The question of whether a particular institution is a public hospital according to common understanding is a question of fact to be resolved upon a consideration of all the circumstances. The institutions with which each of the above cases was concerned were different from the institution under consideration in the present case. Thus, the cases on the meaning of the term “public hospital” in other statutory contexts, while of assistance, cannot be treated as authorities on what constitutes a public hospital. As Latham CJ stated in The Little Company of Mary (SA) Incorporated, insofar as O’Connell was relied upon to assist the plaintiff, “on a question of fact precedents are not of authority”.[62]

[61](2000) 105 FCR 20.

[62]Ibid 31 [47]; 32 [51] (citations omitted).

In Ereaut’s case, Lord Macmillan noted how the character of a school may change over time. Similarly, drainage arrangements, catchments and sub-catchments, the nature and extent of built up areas and resulting run-off, the workings of an operating mine and other factors also change over time. HPP itself recognises this by bringing a claim alternatively directed at three different dates.

New Zealand authorities

The characteristics and circumstances which are sufficient to make a drain a public drain are considered in a series of cases in New Zealand.

While the New Zealand provision does contain a deeming provision for drains controlled by a council for twenty years or more, it does not attempt to define the expression ‘public drain’:

Without limiting the meaning of the term “public drain”, it is hereby declared that every sewerage or stormwater drain in the district that has actually, and whether legally or not, been under the control of any council for not less than 20 years as a drain shall be deemed to be a public drain under this Part of this Act.[63]

[63]Local Government Act 1974 (NZ) s 441(2), now repealed.

This definition did not give much assistance to courts required to decide whether a drain was a ‘public drain’. However, by providing that drains controlled by councils for twenty years or more were public drains, the definition gave emphasis to the control of the drain rather than to other characteristics. Clearly, public water can flow through a drain without the drain necessarily being under the control of the council.

The first of the New Zealand cases is Wellington and Manawatu Railway Company. The facts of that case involved public drains which were vested in the city corporation and which discharged into the sea. The railway company reclaimed adjoining land and continued the drains through the reclaimed land to the new sea boundary. A large strip of the reclaimed land under which the drain lay became vested in the railway company. The city corporation authorised the connection of a considerable number of additional house drains to the public drains, thereby increasing the volume of sewage passing through the drains constructed by the railway company. The disputed drain was downstream of the public drains which connected to and drained into it.

Williams J concluded:

There is nothing in “The Municipal Corporations Act, 1876,” which defines what a “public drain” is. This, however, is certain: that it does not follow, because a drain is laid through private lands, that therefore it is not a public drain: … What the Corporation have, therefore, done is to treat this drain, as part of their system and in every way as a public drain, and to use it in a way which, if it were not a public drain, would be unlawful, and which could have been prevented by injunction by the company. The drain having thus been used as part of the Corporation drainage system for a number of years, I hardly think it material that the drain in its inception was not actually constructed by the Corporation. I have therefore little difficulty in holding this is a public drain. [64]

[64]Wellington and Manawatu Railway Company 476.

The decisive factor was that the corporation had used the drain as part of the public drainage system for a number of years. It had treated the drain in every way as part of the public drainage system. This outweighed the fact that the drain was on private land, and was not constructed by the corporation.

In Petone Borough v Daubney,[65] the plaintiff claimed damages for injuries suffered when his right foot was caught in a hole in a footpath alleged to be caused by the borough’s negligence in erecting or permitting to be erected a stormwater drain, without exercising proper care and workmanship. One issue was whether the stormwater drain was a public drain. The drain was an ordinary stormwater drain constructed from a building and running under the footpath to the street channel. The concrete kerbing of the street channel and the adjacent end of the drain were broken by unknown means. The drain was upstream of the public drainage system. The drain did not drain water collected from a number of different properties or public areas. There was no evidence that the council had done anything to the drain, or had actual control over the drain. The drain was held not to be a public drain.[66]
[65][1954] NZLR 305 (Court of Appeal).
[66]Ibid 325, 328.

Here, the decisive features were that the drain ran from a single private dwelling to the street channel, and was upstream from the public drainage system. There was no evidence of management or control of the disputed drain by the borough.

In Connolly v Palmerston North City Corporation,[67] a subdivision of land was situated behind land fronting onto a street. The only means of access from the street to the subdivision was by means of a narrow strip over which there was a right of way to each lot in the subdivision. The subdivision plan approved by the council created a sewer easement running along the boundary of the land in the subdivision. A drain was constructed by the council along the sewer easement. There were to be further extensions of the drain to meet the drainage needs of houses which might be erected on adjoining land. The issue was whether the drain constructed along the easement, and continuing on to the adjoining land, was a public drain. Gresson J concluded:

In my opinion, what is here contemplated and in part constructed is a public drain, that is, a drain which is in the general interest of the city as opposed to one for the particular or personal benefit of an individual or of one household. I think the distinction is between a drain laid in connection with a particular property or even a drain laid to be used in common by two or more properties for the benefit of the particular household or households for whom it is installed, and, on the other hand, a drain laid to meet the needs of a group or collection of homes and to enable that settlement to be connected up to the general drainage system of the city… At the moment this drain will not serve many, but the time may come when it will carry the sewage of a small community. In my opinion, it has characteristics which place it in the category of a public drain … But, in this case, it is in contemplation that the new drains will become attached to one of the Corporation’s sewers and become integrated into the city’s drainage system. It has been constructed, and by the Corporation, with that object in view.[68]

[67][1954] NZLR 1006 (Supreme Court).

[68]Ibid 1007-1008.

In this case, the court considered that the drain was a public drain referring to the fact that the drain had been laid to meet the needs of a group of homes, that more homes would be connected in the future, that the drain was or would be attached to the city’s drainage system, and had been constructed by the council albeit that the council was reimbursed by the developer.

In Aprea v Wellington City,[69] the owners of a parcel of land sought subdivision approval. The council required various drains to be constructed as a condition of its consent. One drain did not connect to the adjoining lot. Years later, the council sought to rectify the problem, but permission was denied. The question was whether the drain in dispute was a public drain. Tomkins J decided that it was a part of the drainage system originally ‘installed by the subdivider, taken over by the Council, and marked on the city drainage map’:[70]

Having regard to the above provisions, I must endeavour to interpret the meaning of the phrase “public drain”. Literally the phrase means a drain belonging to or for the use of the public. In that sense I think it means a drain which is not for the exclusive use of one owner of land but which is a drain to which more than one owner of land may connect his private drains for the discharge of sewage. One test as to whether a drain be public or private would be to ascertain whether it was constructed at public expense by the local authority. If it were so constructed it would clearly be a public drain. As to its being on private land, the Act clearly contemplates that there may be public drains constructed on private property … Another test would be to ascertain whether the control and maintenance of the drain has been taken over by the local authority. A further test would be to ascertain whether two or more owners have the right to discharge their drainage into it.[71]

[69][1969] NZLR 409 (Supreme Court).

[70]Ibid 412.

[71]Ibid 411-412.

In this decision, the court refers to three different tests that might assist in determining whether the drain is a public drain. One test is to see who paid the construction cost of the drain. If a drain is constructed at public expense, this circumstance points towards the conclusion that the drain is a public drain. If a drain is on private land, it may still be a public drain. A second test is to ascertain whether the control and maintenance of the drain has been taken over by the council. Again this circumstance points towards the classification of the drain as a public drain. A further test is whether two or more owners have the right to discharge their drainage into it. It is notable that the last test is just treated as a further test. It is not treated by the court as the sole or decisive test.

In Stubbs v Taumarunui Borough,[72] the borough sewerage system was extended to the street where the plaintiffs owned and occupied residential properties. Branch connections called ‘lateral sewers’ were constructed by the council from the main sewer to the boundaries of the individual properties. The council would only permit connections to the lateral sewers if the cost of construction was reimbursed by the landowner. It was claimed that the lateral sewer was a public drain, even though it served only one property. McMillan J decided that the lateral sewer was constructed by the council on a public street and, although intended for the use of only one lot holder and his successors in title, was part of a system of drainage intended for the public benefit and was a public drain. The judgment identified factors which made the lateral sewer a public drain, even though intended for the purpose of providing drainage exclusively from one property:

In the circumstances of this case I am of the opinion that the lateral sewer in Cross Street to the first plaintiff’s boundary is a public drain. Although it was intended for the exclusive use of the first plaintiff or his succeeding occupiers, it is one of a number of laterals which are provided in the area for the use of a section of the community, that is, that section which lives in the Cross Street area. Although at the extremity of, it is, none the less, a part of a public sewerage system. It is built on a public street which is vested in the defendant ... The fact that it is built on a street does not make it a public drain (Petone Borough v Daubney), but it may be a factor pointing to that. The most important factor, in my view, is that the lateral sewer was provided by the defendant as part of a system of drainage intended for the public benefit. The defendant, through its engineers or contractors, designed and installed the scheme. The first plaintiff did nothing to bring it about. The defendant paid for it, although expecting to be recouped. If it is a private sewer it must be subject to the ownership or control of an individual. Who is that individual? It is not the first plaintiff. He did not engineer the sewer, construct or pay for it. It is not on his land. He cannot repair it without disturbing the street which is vested in the defendant. Indeed, the defendant by refusing to allow him to connect his property to it has denied that he has ownership or control of it. If then, it is not a private sewer, it must be a public one. I hold accordingly.[73]

[72][1975] 1 NZLR 125 (Supreme Court).

[73]Ibid 131.

Here the court decided whether the drain was a public drain by reference to factors that the court considered relevant to its decision. The most important factor was that the lateral drains were provided by the council as part of a system intended for the public benefit. The council through its engineers and contractors designed and installed the scheme. The developer did not. No private owner owned or was in control of the drain. A private owner could not repair the drain without disturbing the street which was vested in the council. The council demonstrated its ownership and control of the lateral drain by refusing the owner permission to connect his property to it. These factors outweighed the fact that each lateral drain supported only one property, and did not carry drainage water from two or more properties. While the drain did not serve more than one property, other factors outweighed this consideration leading the court to conclude that the drain was a public drain.

In Wellington City Council v Longhurst,[74] the disputed drain ran diagonally across a house property following the channel of a natural water course. The drain must have been constructed by the subdividers of the land. The subdividers granted the council the right to lay, repair, renew, alter and cleanse the drains under the subdivided lands and all public drains necessary for the efficient sanitation of the subdivided and adjoining lands. The disputed drain terminated at a public stormwater drain, and connected into a number of other properties. Subsidence of a dwelling was caused by the escape of water from the drain. The New Zealand Court of Appeal held that the drain was a public drain not for the benefit of any particular property but for the purpose of ensuring that the watercourse properly drained into the public drains of the city for the protection of the private property owner.
[74][1995] 3 NZLR 300 (Court of Appeal).

The appeal court noted that the trial judge was much influenced by three matters. Firstly, the drain served several properties so it was not for the benefit of a particular householder. Secondly, the affected householder had no ownership or ability to control any portion of the drain other than that part which ran through her property, but which did not serve her property. Thirdly, the drain had been taken over by the council with the drainage works relating to the subdivision. It was the council that approved stormwater connections to the drain.[75] These factors were decisive in assisting the trial judge to conclude that the drain was a public drain.
[75]Ibid 305.

In so doing, the court rejected the council’s submissions. Firstly, there was no evidence that the council had taken control of the drain. Secondly, the drain was a private drain for the benefit of particular properties involved rather than a section of the public. Thirdly, the council had never considered it was responsible for the drain. Fourthly, the drain was not shown on the council’s drainage map indicating that it was not a public drain, and finally that it was not the type of drain where two or more owners have the right to discharge into it.

In response to one submission made for the council that a drain which serves more than one property might nevertheless be a private drain, the appeal court observed:

A privately laid drain which serves more than one property and is connected into the public drainage system may remain a private drain because it has not been recognised as a public drain by the actions of the local authority. There may have been no public control brought to bear on it. However, because of tighter present-day requirements for the disposal of contaminants and water it is becoming increasingly likely that a sufficient element of control will be found to exist where there is a common drain which is so connected.[76]

[76]Ibid.

In this passage, the appeal court accepts the possibility that a privately laid drain serving more than one property owner and which connects into the public drainage system may nonetheless remain a private drain because it has not been recognised as a public drain by the actions of the local authority. The court considered that this may be so if no public control may have been brought to bear on it.

The appeal court’s conclusion that the drain was a public drain was expressed in this manner:

… it is our view that by the combination of:
(a)acquiring or approving the piping of the water course by the subdivider
(b)taking the powers given by the easement; and
(c)authorising the higher owners to carry out improvements and to cast the concentrated flow of stormwater resulting therefrom on to the respondent’s land via the drain

the council consciously and actually took the drain under its control, a situation which existed for not less than 20 years.[77]

[77]Ibid 306.

Again, it is significant no one test or factor was treated as decisive. All factors for and against were considered by the trial judge and reviewed again by the appeal court. In the event, the trial judge and the appeal court reached the same conclusion.

The New Zealand cases show that there are many factors that may be taken into account in determining whether a drain is a public drain. They include:

· is the drain on private or public land?

· what properties does the drain serve?

· does the drain receive drainage from one or more than one property?

· do public drains drain into the drain under consideration?

· is the drain part of the public drainage system?

· what purpose does the drain serve?

· how long have the drainage arrangements continued?

· who constructed the drain?

· who paid for the construction of the drain?

· who has the management and control of the drain?

· are more drains intended to be connected to the drain under consideration in the future?

Conclusion as to the proper construction of s 198 LGA 1989

There are significant difficulties with HPP’s construction of s 198. Firstly, the definition of ‘public drain’ for which it contends is not in s 198 or in LGA 1989 at all. There is no statutory warrant for the test propounded by HPP. It is a gloss sought to be imposed on s 198 and LGA 1989.

Lord Macmillan in Ereaut rejected submissions that the court should determine on a specific definition of the statutory expression ‘public school’:

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.[78]

[78]Ibid 33.

Likewise, in Ereaut, Lord Warrington of Clyffe rejected in even more direct terms the submission that the court should adopt an explicit test of ‘public school’:

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.[79]

[79]Ibid 27.

Secondly the need for all relevant matters to be taken into account is supported by authority dealing with the construction of statutory expressions involving the word ‘public’.[80] Whilst contending that the New Zealand case were written with its definition, HPP did not advance any general authority in support of its definition.
[80]See above [47]-[60].

Thirdly, as I have said, s 198 results in the vesting of property in a council and the expense of the private landowner. It is just and appropriate in these circumstances for the court to review all of the relevant circumstances rather than adopt a specific test. 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.

Fourthly, the facts and circumstances involving drains or private property are infinitely varied and diverse. Adoption of a test focussed on just one criterion might result in a significant consideration being ignored or overlooked. Thus, as HPP accepts, the position might be different if there were an agreement between the private landowner and the council for the receipt and treatment of public drainage water if the private landowner has the express right to terminate the acceptance of the water, or if the public water is insignificant in volume. There are often problems with Latrobe’s test. The flow of water may be seasonal or intermittent. How is the significance of a flow to be determined?

Fifthly, there is a significant risk that there might be serious injustice to the authority or to the private landowner if considerations such as who constructed the drain, drainage design and funding, the ownership of the drain and associated works and materials, the identity of the person with control over the drain itself, the land in which the drain is situated, the land in the vicinity of the drain, and the maintenance of the drain are all to be disregarded as not germane or even relevant to the status of the drain.

Sixthly, the past control and management of the drain in question, security and access to the land on which the drain is found are not irrelevant, and may influence the decision of the court as to whether the drain is a public drain.

Finally, the legislative and regulatory regime to which the drain is subject, here relating to mining, together with the mining licence and approved work plan under which the drain is operated may be influential in determining whether the drain is a private or public drain.

In my opinion, the words ‘public drain’ in s 198(1) are simply used in their common and ordinary meaning. There is no statutory definition of ‘public drain’ found in LGA 1989, or that should be conceived or developed by the Court as resulting from the essential or inherent meaning of the words. To determine whether or not a drain is a public drain, it is necessary to examine the relevant facts and considerations that bear on this issue. There may be some which favour the view that the drain in dispute is a public drain, as against others which point to the reverse conclusion. In this manner, the Court is able to determine those factors which predominate and to reach a conclusion as to the status of the drain. As the present case and the New Zealand cases illustrate, the facts and circumstances that can arise are infinitely varied. The adoption of a single statutory test as urged by HPP would lead to injustice in individual cases.[81] A significant amount of public water flowing into a private drain would cause a private landowner to be divested of the drain and the land, works and materials that constitute it. The landowner would lose management and control of the drain regardless of other circumstances. Latrobe’s approach recognises that there may well be situations where public water is received into a private drain but the drain retains its status as a private drain. Latrobe’s approach does not intrude on private property rights nearly to the same extent as would the application of HPP’s test.
[81]HPP referred by analogy to the Australian authorities concerning the dedication of a road as a ‘public road’, and said that this may assist by analogy. At common law, for a road to be a public road requires:
(1) an intention to dedicate the land as a public road; and
(2)an acceptance by the public of the proffered dedication.
See: Bass Coast Shire Council v King [1997] 2 VR 5; Templestowe Developments Pty Ltd v City of Boroondara [1997] 1 VR 504; Permanent Trustee Co of New South Wales Ltd v Campbelltown Municipal Council (1960) 105 CLR 401, 420; Newington v Windeyer (1985) 3 NSWLR 555, 558; Tanner v Minister for Education and Training (2002) 119 LGERA 321, 335 [75]; and Casson v Leichhardt Council (2011) 186 LGERA 34, 46 [61] .

The issue of whether a drain laid out on private property has become a public drain is not one-dimensional. There is no simple, convenient or universal definition that can be applied to the word ‘public’ to give certainty to the expression and achieve fairness to councils and landowners in all cases. Rather, relevant matters for and against stand to be identified and attention given to the object and purpose of s 198(1) in the statutory context of LGA 1989 before the court can determine whether a drain located on private property has become a public drain and vested in the council.

In my view, Latrobe’s approach is the correct approach to the application of s 198(1). In this case, this approach is to be applied at the three different dates when HPP claims the MMD vested in the Shire of Morwell or in Latrobe. The subsequent analysis and factual findings seek to do this.

Ownership of the mine and surrounding land

The history of the mine is largely, if not entirely, common ground between the parties. The mine was opened by SECV in 1949. From 1949 until about January 1994, the mine was owned and operated by SECV. SECV was a body established for public purposes,[82] to conduct open cut coal mining and generate electricity.
[82]SECV was established under the Electricity Commissioner Act 1918 (Vic) and the State Electricity Act 1920 (Vic).

In 1994, the HPP land was vested in Generation Victoria by the Electricity Industry Act 1993 (Vic) (‘EI Act’). Generation Victoria was also a public body, and conducted open cut coal mining and electricity generation for public purposes. In about 1995, the HPP land was vested in Hazelwood Power Corporation Pty Ltd (‘HPC’) under an allocation statement issued under s 153B of the EI Act. In about September 1996, the whole of the shares in HPC and the HPP land were acquired by HPP.[83] HPP has remained the owner of these assets to the present day.
[83]A number of witnesses used the expression ‘Hazelwood’ as a convenience to describe HPP and/or HPC. Nothing turns on the distinction between these two companies.

The Morwell township is generally to the north of the HPP land on the northern side of the Princes Freeway. Northeast of the HPP land is the MIE. This estate was formerly the SECV Workshop Area. When SECV was privatised in 1996, the MIE was subdivided and developed as an industrial estate.[84]
[84]Schedule 3 shows the location of the MIE.

Sixteen survey plans of the MMD were prepared by TGM Group dated 28 November 2014.[85] They are agreed by HPP and Latrobe.[86] The survey plans show the present day location of the drain, the nature and size of the culverts, the inlet pipes along the MMD, the low flow pipe and its alignment.
[85]Agreed facts, attachment B.
[86]Agreed facts [9].

The MMD consists of a 4.9km long channel intended to carry high drainage flows, with a concrete pipe mainly beneath the floor of the high flow channel intended to carry low flows. The low flow pipe extends for approximately 2.9km. Approximately 3.7km of the high flow channel and almost all of the low flow pipe is located on the HPP land. The low flow pipe also includes a short section of an above ground steel pipe. [87] Since 2012-13, approximately 600m of the high flow channel has been lined with a composite geotextile material called ‘Teranap’.[88]
[87]Agreed facts [14].
[88]A bitumen infused geotextile fabric.

Drainage asset maps of the southern part of the township of Morwell and the MIE were provided by Mr Steven Piasente, Latrobe’s General Manager of Community, Recreation and Infrastructure. They show the stormwater drainage pipes for the areas of the Morwell township, south of Commercial Road, to be directing water towards the MMD under the Morwell Bypass. They also show that the drains in the MIE discharge into the MMD. The drainage infrastructure associated with the Morwell Bypass is the property of VicRoads.[89]
[89]Exhibit 8, [3]-[4]; Annexure 1-5; and Exhibit 2, [10]-[11].

Hydrology evidence

Hydrology evidence is at the forefront of HPP’s case. The hydrology evidence relates to all three alleged vesting dates. HPP relies on the expert report of Mr Simon Kovacevic, a civil engineer specialising in hydrology and hydraulics. In his report, he provided a summary of his opinion:

•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 [HPP], [Latrobe] and VicRoads;
•The percentage contributions of flow from the three contributing parties ([HPP], [Latrobe], 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 ([HPP], [Latrobe], 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 (i.e. land from which drainage is controlled by either [HPP] or VicRoads) changing with the increase in total catchment area. Indicative variations in the percentage contributions at key locations[90] along the MMD from upstream to downstream are summarised as follows:
•The 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 [HPP] land (e.g. 89.4% of the peak flow of 3.25m3/s at the time of peak flow in a 10 year ARI[91] design flood event);
•The largest contribution of flow within the MMD at inflow location “A” (which represents a combination of drainage from [HPP] land, [Latrobe] land and a small component of VicRoads land) is from [Latrobe] land (e.g. 95.4% of the peak flow of 15.75m3/s at the time of peak flow in a 10 year ARI design flood event);
•The 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 [Latrobe] land (e.g. 89.6% of the peak flow of 13.99m3/s at the time of peak flow in a 10 year ARI design flood event);
•The 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 [Latrobe] 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).
•The 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.[92]

[90]Locations are shown on Schedule 5.

[91]Average recurrence interval.

[92]Exhibit E, 4.

Mr Kovacevic’s report is a comprehensive expert assessment of flow rates having regard to the inputs and infrastructure of the MMD. He was not cross examined.

From Mr Kovacevic’s report, a number of conclusions can be drawn about flow in the MMD based on peak flow in a 10 year ARI design flood event:

(1) at location 1, 89.4% of the peak flow of 3.25m3/s is from the HPP land;

22A. Plaintiff’s version: On 23 July 2007, the West Gippsland Catchment Management Authority (WGCMA) purported to declare, pursuant to section 188 of the Water Act 1989 (Vic) that the MMD was a designated waterway within the Lake Wellington River Management District. The Plaintiff says that the MMD is not a waterway for the purposes of the Water Act 1989 and that the fact contained in paragraph 22 is not relevant to the issues before the Court in this proceeding.

C. HISTORICAL MATTERS

Acquisition and development of the HPP land

In or about 1946, land to the south of the Morwell township was identified by the State Electricity Commission of Victoria (SECV) as a location where brown coal might be mined for the purpose of producing fuel in the form of brown coal briquettes to be sold in the competitive market including the construction of a briquette factory (briquette project).
At some time prior to 1949, the SECV acquired the HPP land pursuant to s15 of the State Electricity Commission Act 1928 (Vic) (1928 SEC Act) upon which acquisition the land acquired was deemed to be unalienated lands of the Crown. The HPP land was acquired for the purpose of developing a coal seam on that land.
On 20 July 1948, State Electricity Commission Act 1948 (Vic) authorised the carrying into effect of the further development of the briquette project.
In or about April 1949, in preparation for the coal mining activities to be conducted on the HPP land, the SECV commenced work on the HPP land for the construction of:
(a)a cut off drain for the purpose of diverting flows of storm and rain water runoff from the catchment of the drain from entering the open cut mining operations proposed to be conducted by the SECV on the HPP land (original drain); and
(b)drainage, ramp and road access, water supply, worker accommodation and other infrastructure.
The original drain 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.
At the time of its construction, 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 at the time. [Plaintiff’s sentence (not agreed to by the Defendant): As at that time, the flow of water onto what was the SECV land was a natural flow of surface water.] The original drain (as at 1949) was not required for the purpose of providing drainage to the southern part of the township of Morwell, nor constructed for the benefit or protection of the township or citizens of the southern part of Morwell, nor as part of a system of drainage for the benefit or protection of the southern part of the township of Morwell.
The Council did not pay for or contribute to the costs of the construction of the original drain, and did not construct the original drain.
Annexed to this statement and marked “D” are copies of some photographs showing the construction of the original drain.
In or about November 1955, coal mining on the HPP land commenced.
From either 1955 or 1958 until approximately 1959, coal mined on the HPP land was transported for use in the production of electricity at what was then known as the Morwell Power Station, which was not located on the HPP land.
In approximately August 1959, coal mined on the HPP land began to supply the newly completed briquette factory adjacent to the HPP land (briquette factory).
The supply of coal mined on the HPP land to the briquette factory lasted only a short time as the quality of the coal was unsuitable for the production of briquettes.
From about 1958, coal mined on the HPP land was shipped by rail for use in the production of electricity on land other than the HPP land.
From 1959 until the late 1990s the briquette factory was supplied with coal from sources other than the open cut mine on the HPP land.
At some time in 1959, the SECV recommended and the State approved the construction of six 200 MW electricity generation units to be built at Hazelwood to be fuelled by coal supplied from the Mine.
In or about July 1964, coal mined on the HPP land was first supplied to Hazelwood Power Station situated on the HPP land.
In or about May 1965, forecast demand for coal from the Mine was increased as a result of the approval by the State of an increase in generating capacity at the Hazelwood power station of two 200MW units.
In about 1965 or 1966, due to projected increases in demand for coal, long term plans for the Mine were modified to increase excavation beyond the western and southern extent of the existing Mine.
Between 1973 and 1976, the original drain was partly deviated on the HPP land, and was significantly redeveloped by the SECV. The relocation and redevelopment works conducted between 1973 and 1976 included the installation of the low flow pipe mainly beneath the upper channel of the original drain. The works were designed and financed by the SECV, who communicated with the Council, the Latrobe Valley Water and Sewerage Board and the Country Roads Board in relation to them.
Defendant’s version: The relocation was necessary because:
(a) of the continuing need to divert flows of water away from the open cut of the mine; and
(b) the original drain would otherwise have been severed by the open cut mining operations at the Mine in December 1974

42A. Plaintiff’s version: the relocation occurred in order to:

(a)ensure that there was sufficient capacity in the MMD for the collected, concentrated and aggregated surface water runoff from the southern part of the township of Morwell, and confirm interconnections with Council drains;
(b)take into account the anticipated flow of surface water from the Morwell Bypass when constructed;
(c)accommodate the coal mining operations within the Hazelwood Coal Mine, which were expected to intersect the original drain;
(d)perform limited requirements for drainage of surface water runoff from the HPP land;
(e)provide a safer means of transporting drainage water previously channelled through the original drain across the northern batters of the Hazelwood Coal Mine.

The original drain, as partly relocated and redeveloped is the MMD.
Between approximately 1980 and 1985, the Road Construction Authority conducted drainage works in Morwell associated with the construction of the Morwell Bypass of the Princes Freeway in consultation with the SECV and the Shire of Morwell.
As at 1984, the Road Construction Authority intended that all existing outlets from the built up area of southern part of Morwell be connected to the road drainage system for discharge into the MMD.
In or about the mid 1980’s, Morwell Bypass works were performed including drainage infrastructure through which water from the Princes Freeway surface flows into the MMD. The works conducted at this time included the construction of the pipes or culverts into the MMD labelled “S”, “T, “U”, “V”, “W”, “X”, “Y” and “Z” on the Schematic Plan.
On 16 December 1986, any land forming part of the HPP land which remained unalienated lands of the Crown vested in the SECV by section 4(b) of the State Electricity Commission (Further Amendment Act) 1986 (Vic).

Privatisation process - Mine

From 1948 until about 1994, the Mine and the land on which it was situated was either unalienated Crown land or otherwise vested in the SECV.
From about 1994 until about 1995, the Mine and the HPP land itself was owned and vested in Generation Victoria by operation of the Electricity Industry Act 1993 (Vic) (EIA Act) and an allocation statement dated 23 December 1993. Generation Victoria conducted open cut coal mining and electricity generation activities on the HPP land. Generation Victoria was a public authority.
In or about January 1995, the Mine and the HPP land on which it was situated was owned and vested in Hazelwood Power Corporation Pty Ltd (HPC) by operation of section 153D of the EIA Act as amended by the Electricity Industry (Further Amendment Act) 1994 (Vic) and an allocation statement dated 31 January 1995. At this time, all of the shares in HPC were owned by or on behalf of the State of Victoria.
On 20 June 1995, the definition of “generation company” under the EIA Act was amended to remove the requirement for the shares in such a company to be publically owned. However, at this time, all of the shares in HPC continued to be owned by or on behalf of the State of Victoria.
By reason of the operation of s 19 of the Electricity Industry (Further Amendment) Act 1995 (Vic), on 12 December 1995, HPC was divested of the HPP land which land reverted to the Crown and was deemed to be unalienated Crown land free of all encumbrances.
On 12 December 1995, the HPP 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 (Vic), was free of all encumbrances, estates and interests.
On 14 May 1996, the Governor in Council granted a mining licence to HPC pursuant to section 47A of the Mineral Resources Development Act 1990 (Vic) (MRSD Act).
On 2 August 1996, HPP was formed.
On 10 September 1996, the Governor in Council:
(a)revoked the mining licence granted on 14 May 1996;
(b)granted Mining Licence 5004 to HPC;
(c)approved an authority to commence work; and
(d)approved a work plan, including a rehabilitation plan for the HPP land – all of which were to come into operation after completion of the sale of all shares in HPC pursuant to Share Sale Agreement dated 4 August 1996.
In or about September 1996, the whole of the shares in HPC and the HPP land were acquired by HPP.

Privatisation process – Morwell Industrial Estate

Amongst the former SECV lands which were privatised by the State of Victoria in 1996, is the SECV Workshop area, now known as the Morwell Industrial Estate (MIE).
The MIE is depicted on the Schematic Plan.
Prior to the privatisation of the MIE, the SECV, HPC and an additional interested party, PowerWorks Pty Ltd (PowerWorks), engaged in discussions in relation to the upgrade of certain water, drainage, sewerage and road infrastructure within the MIE.
In July 1996, Council, the SECV, HPC and PowerWorks reached an agreement whereby (amongst other things):
(a)the SECV, HPC and PowerWorks each agreed to make a financial contribution towards the cost of upgrading certain road and drainage infrastructure within the MIE, and the capital cost of installing a GPT on a drainage outfall into the MMD; and
(b)Council agreed to assume responsibility before 30 September 1996 (or if possible, using reasonable endeavours, before this date), for certain road and drainage infrastructure in the MIE, and to maintain, upgrade and repair it in accordance with Council’s obligations under the Local Government Act 1989 (Vic).

A copy of this agreement is annexed to this Statement and marked “E”.

The rationale for requiring that the SECV, HPC and PowerWorks contribute towards the cost of upgrading water, drainage, sewerage and road infrastructure in the MIE is explained in a facsimile from the Department of Treasury and Finance to the SECV dated 5 July 1996, a copy of which is annexed to this Statement and marked ”F”.
In or about March 1998, SECV, HPP, PowerWorks and Council entered into a further agreement under which Council assumed ownership of and responsibility for certain road and drainage infrastructure in the MIE. A copy of this agreement is annexed to this Statement and marked ”G”.

Privatisation process – Morwell Main Drain

On 20 June 1997, the SECV Office of the Administrator provided to Council and HPP a proposed form of easement with respect to the MMD, a copy of which is annexed to this Statement and marked ”H”.
On 18 September 1997, Council’s solicitors prepared an alternative form of easement with respect to the MMD, for the consideration of the SECV Office of the Administrator, a copy of which is annexed to this Statement and marked ”I”.
On 2 December 1997, the SECV Office of the Administrator circulated to HPP and Council further correspondence regarding the proposed terms of an easement with respect to the MMD, a copy of which is annexed to this Statement and marked ”J”.
On 3 December 1997, the Council provided a response to the SECV Office of the Administrator’s correspondence dated 2 December 1997, a copy of which is annexed to this Statement and marked ”K”. This correspondence proposed further amendments to the terms of the easement.
The parties have not located any further correspondence after 3 December 1997 in relation to the terms of an easement with respect to the MMD. Arrangements for an easement with respect to the MMD were not finalised, and no easement was granted or registered with respect to the MMD.

Other dealings between the parties in relation to the MMD

2009 meetings

In or about March 2009, HPP contacted Council, West Gippsland Management Authority (WGCMA) and VicRoads to request that their representatives attend a meeting in order to discuss the future management and maintenance of the MMD.
In or about December 2009, following three meetings attended by representatives of HPP, Council, VicRoads and WGCMA, these parties agreed to make a financial or in-kind contribution towards the cost of maintaining the MMD, as follows:

Item No. Description Funding organisation Contribution Timeline

1. Clean up vegetation within the high flow of the drain (per WGCMA scope and estimate) HPP $20,000+
Initial veg removal complete, spraying remains

2.
Repair sink hole in the high flow channel and repair pit (per HPP geotech scope)
VicRoads
HPP $15,000
$20,000+ Q1 2010

3.
Install litter trap on Chapel St and Commercial Rd sources of rubbish
Council $300,000 Q3 2010

4.
Cut V notch 1^st drop structure and regrade drain contents
WGCMA & Council $10,000¹
$4,000² Q4 2009

5. Annual aquatic spraying from pipe outlet to 1^st drop structure WGCMA³ & HPP $1,250
$1,250
Q2 annually (autumn)

Notes:
1.   WCGMA pay for long reach excavator
2.   LCC pay for Auscut
3.   WGCMA agreed to conduct

2011 sinkhole incident

On or about 7 February 2011, following heavy rainfall in the catchments surrounding the MMD, the following occurred (in no particular order):
(a)a large sinkhole developed in the upper channel of the MMD approximately 100m to the east of the location marked “X” on the Schematic Plan ;
(b)a land movement was observed to have occurred in the northern batters of the Mine in the vicinity of the sinkhole location; and
(c)cracking was observed in the pavement of the Princes Freeway
(Incident).
The parties disagree as to the cause of the Incident.
In response to the Incident:
(a)a large number of regulatory directions and notices were issued to Hazelwood by the Department of Primary Industries (DPI) and the Department of State Development, Business & Innovation (DSDBI), including under s 110 of the MRSD Act. Amongst other things, these notices required Hazelwood to:
(i)undertake repairs and works on the MMD;
(ii)install a range of monitoring equipment in the Mine; to monitor relevant geotechnical conditions including ground movements, and groundwater levels;
(iii)drill horizontal bores in the northern batters; and
(iv)undertake, assisted by external consultants, various studies;
(b)DPI / DSDBI commissioned a number of reports and technical studies in relation to the incident, including from the Technical Review Board, an advisory body established under the MRSD Act; and
(c)the Princes Freeway Morwell Bypass was closed for a period of several months as a safety precaution.
On 8 April 2011, DPI issued a notice to Hazelwood under section 110 of the MRSD Act, reference no. AB30110024 (Section 110 Notice). The Section 110 Notice directed Hazelwood to undertake the following works:
1.   …[U]ndertake the necessary study(s) to determine a suitable design and specification for the repair and ongoing maintenance of the Morwell Main Drain such that all leakage from the drain and the pipeline under the drain is prevented from entering the Hazelwood Mine and destabilising the northern mine batters and provide such study(s) to the Inspector;
2.   …[C]omplete all works that are recommended by the study(s) that are necessary to repair the Morwell Main drain such that all leakage from the drain and the pipeline under the drain is prevented from entering the Hazelwood Mine;
3.   …[I]mplement and establish all procedures and resources necessary to for the prevention of such leakage from the drain and the pipeline under the drain into the Hazelwood Mine including obligations in relation to ongoing monitoring and reporting to the Inspector;
4.   At all times…. comply with all recommendations, requirements and specification of the study(s) required by clause 1, above.
Annexed to this Statement and marked ”L” is a copy of the Section 110 Notice.
Between November 2012 and July 2013, HPP conducted works on an approximately 1.8km long section of the MMD, between approximately points “A” and “S” on the Schematic Plan, in response to requirements 1 and 2 of the Section 110 Notice. These works involved:
(a)over a 600m section of the MMD between approximately chainages 640 ‑ 1230:
(i)the installation of a composite liner comprising Teranap 531 (a bitumen infused geotextile fabric), Tencate Miragrid GX130/130 (a polyester coated geogrid), 300mm of non-dispersive clay compacted to 98%, and subgrade of general fill. This location included the location where the sinkhole had developed in February 2011; and
(ii)the installation of an 800m HDPE slip lining pipe within the concrete low flow pipe, laid in 3 sections;
(b)over a 1200m section of the MMD between approximately chainages 0 – 640 and 1230 – 1800:
(i)re-grading the upper channel of the MMD (filling and re-compacting any cavities or soft areas discovered through the earthworks);
(ii)and compacting the surface with 300mm of non-dispersive clay, and 150mm of topsoil and grass seed;
(iii)installation of rock chutes consisting of 100 – 250mm rock beaching over bidim 64 geotextile fabric; and
(c)over a 60m section of the MMD (chainage 480 – 540), replacement of the existing low flow pipe with an 800mm steel enforced polypipe, and the installation of a new junction pit at chainage 540.
Prior to the design for the works on the MMD being approved by DPI / DSDBI for the purposes of the Section 110 Notice, HPP and DPI consulted Council, and WGCMA.
The Section 110 Notice was one of a number of notices issued to Hazelwood in response to the Incident. The cost of the works and studies conducted by HPP in response to these regulatory notices exceeded several million dollars.
Subsequent to the Incident, solicitors for Council and HPP exchanged letters dated 20 September 2011, 3, 12 and 19 July 2013 in relation to the MMD. In these letters, amongst other things:
(a)HPP 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:
(i)cease discharging water into the MMD; or
(ii)submit a design solution, at its cost, to ensure that any water it discharges into the MMD does not enter HPP’s land;
(b)HPP alleged that by virtue of the operation of s 189 of the Local Government Act 1989 (Vic) (“LG Act”), a section of the MMD on HPP’s land is vested in Council, and Council is responsible for its management and control; and
(c)Council denied that the MMD was a public drain within the meaning of s 198 of the LG Act.
Annexed to this Statement and marked “M” is a copy of each of the letters dated 20 September 2011, 3, 12 and 19 July 2013.

Access to the MMD

Since it has become the registered proprietor of the HPP land, HPP has erected and/or maintained a barbed wire perimeter fence around the Mine of varying height (approximately 2 - 3 metres).
A padlocked gate has been installed in the fence in the vicinity of the Council GPT situated on the HPP land. Council’s employees and contractors do not have keys to the padlock. Council employees and contractors have gained access to the HPP land through this gate, following consultation with Hazelwood’s employees and contractors, on at least the following dates in order to conduct maintenance works on the GPT: 1 July 2004, 13 October 2006, 10 September 1997, 8 October 2008, 18 November 2009, 2 September 2010, 29 April 2011, 29 November 2011, 6 December 2012, 16 July 2013, 13 November 2014.

D. FLOWS OF WATER INTO THE MMD

Storm and other rain water flows into the MMD:
(a)Through a network of Council pipes and drains located in the southern part of the township of Morwell. These pipes and drains allow water to flow into pipes and drains located in the Princes Freeway reserve, and discharge into the MMD through the pipes and culverts located on HPP’s land. This flow enters the MMD at discharge locations marked A, S, X, Y and Z on the Schematic Plan.
(b)Through a network of Council drainage pipes located in the Morwell Industrial Estate. These pipes and drains allow water to flow into the MMD through the pipes and culverts located on HPP’s land. This flow enters the MMD at discharge locations marked A, B, C, D on the Schematic Plan;
(c)Through the pipes located in the Freeway Reserve. These pipes allow water to flow into the MMD through the pipes and culverts located on HPP’s land. This flow enters the MMD at discharge locations marked S, V, W, Y, X and Z on the Schematic Plan;
(d)Plaintiff’s version: Overland from HPP land upstream of the discharge locations into the MMD set out above
Defendant’s version: Overland from HPP land upstream of the discharge locations set out above and overland from HPP land immediately to the south of the MMD.
In summary:
(a)water entering the MMD at locations “V” and “W” is water solely from the Princes Fwy surface and reserve;
(b)water entering the MMD at locations “S”, “X”, “Y” and “Z” is a mixture of water from the Princes Freeway surface and reserve and the southern part of the Morwell township;
(c)water entering the MMD at locations “B”, “C” and “D” is water solely from MIE;
(d)water entering the MMD at location “A” is a mixture of water from the southern part of the Morwell township and the MIE;
(e)overland flows of water also enter the MMD from HPP land.
The volume and proportionate contribution from each source at each discharge point depends upon the duration and intensity of the particular rainfall event.

E. APPLICABLE REGULATORY REGIME FROM TIME TO TIME

Mining Licence

Mining operations are conducted on the HPP land pursuant to Mining Licence 5004 (Mining Licence). The Mining Licence was issued to HPC pursuant to an Order made by the Responsible Minister for the Electricity Industry Act 1993 (Vic) on 10 September 1996. The Mining Licence is subject to a Schedule of Conditions.
The Schedule of Conditions for the Mining Licence includes the following conditions:
1.          Work Plans & Environmental Management
1.1Work shall be carried out in accordance with the approved work plan (incorporating a rehabilitation plan) as amended from time to time in accordance with the Mineral Resources Development Act 1990 (MRD Act). Where any inconsistency occurs between the work plan and other licence conditions or regulations, the licence conditions and regulations have precedence.
…
2.          Fencing & Security
2.1 Where public access is a safety hazard within the mining licence, the licensee must fence and signpost the area to ensure public safety is maintained.
….
5.          Drainage and Discharge Control
5.1Any discharges from the licence area shall be minimised and any water discharged must be as free as possible of pollutants, save as provided by any licence issued pursuant to the Environment Protection Act.
…
5.4Rainfall and other natural waters shall be diverted away from works area so as to control erosion, pursuant to Condition 7. However, such works shall, as far as practicable, not cause undue alteration to the general drainage pattern beyond the licensed area.
…
8.          Erosion
8.1The licensee shall undertake all necessary works to ensure that the potential for erosion of land affected by mining is minimised.
8.2Should erosion occur, the licensee shall take all practical steps to minimise the erosion to the satisfaction of an Inspector.
…
15.        Progressive rehabilitation
15.1Progressive reclamation will be conducted as per the rehabilitation plan. In addition, any further rehabilitation work will be carried out at the direction of an Inspector.
15.2As and when directed by an Inspector of Mines, despite any compensation agreements between the licensee and the owner of any private land in the licence, the licensee shall undertake progressive reclamation of land on the area subject to surface disturbance.
…
16.        FINAL REHABILITATION
16.1Final reclamation will be in accordance with the rehabilitation plan and any additional requirements as directed by an Inspector.
…
21.        Application of Regulations
21.1      The Mineral Resources (Health and Safety for Large Open Cut Mines) Regulations 1995 will apply to the licensee.
21.2      Any subsequent Regulations issued under the act will also apply.
….
Annexed to this Statement and marked “N” is a copy of the Mining Licence including the Schedule of Conditions.
The Mining Licence has been amended since 1996, most significantly in 2009 in order to amalgamate additional mining licences 5449, 5450, 5451 and 5452 associated with the West Field development of the Mine.

Work Plan and Rehabilitation Plan

On 10 September 1996, the Responsible Minister approved the following documents with respect to the operation and rehabilitation of the Mine:
(a)Hazelwood Power Corporation, 1 June 1995, Mining Licence Application, Work Plan Submission (“Work Plan Submission”);
(b)Hazelwood Power Corporation, undated, 5 Year Rolling Mine Rehabilitation Plans Summer – Autumn 1996;
(c)Report to Generation Victoria prepared by DPS Pty Ltd, December 1994, Morwell Mine, Morwell Mine Rehabilitation Concept Plan;
(d)Report to Hazelwood Power Corporation prepared by DPS Pty Ltd, May 1995, entitled Land Capability Analysis Hazelwood Power Corporation Mine and Environs.
The Work Plan Submission stated as follows in relation to the final (end-of Mine life) rehabilitation plans with respect to the Mine:
6. MINE REHABILITATION
…
6.1 FINAL CONCEPT PLAN
A Rehabilitation Concept Master Plan has been produced for the Mine. Its purpose is to provide an overall vision for the ultimate rehabilitation of all land disturbed by mining activities.
The plan shows the proposed rehabilitation treatment for all areas, including the Mine proper, overburden dumps, buffer areas, transport corridors, operational areas and infrastructure.
Refer Figure 11: Drawing No. P45/197/43 “Mine Final Rehabilitation Concept Plan”
The preferred option for the worked out part of the Mine is to create a lake. At this time only preliminary studies into the creation of a lake have been carried out.
The areas surrounding the Mine will ultimately be used
Refer Appendix 2: “Morwell Mine Rehabilitation Concept Master Plan”.
Refer Appendix 3: “Land Capability Analysis HPC Mine and Environs”.
Annexed to this Statement and marked ”O” is a copy of the Work Plan Submission.
The Work Plan has been amended several times since 1996, most significantly in May 2009 in order to accommodate the West Field extension of the Mine (Work Plan Variation).
The Work Plan Variation plan states as follows in relation to final (end-of Mine life) rehabilitation plans with respect to the Mine:
6.4 Mine Closure Concept
The constrains arising from issues, described in section 6.3, particularly timely access to coal batters and benches, limit opportunity timely access to coal batters and benches, limit opportunities for progressive rehabilitation.
The following mine closure concept is considered the base case as it is unreasonable to prejudge community aspirations that may prevail at the time of closure.
Base Case
The main features of the conceptual mine closure and rehabilitation plan for the Hazelwood Mine are:
·Pit void: the pit will be allowed to fill with water creating a lake. This will initially take place by continuing aquifer depressurisation pumping, until the weight is enough to stabilise the batters (currently estimated to be RL – 22m). The pit lake will then fill slowly over a period of decades or more to its hydrological equilibrium (currently estimated at RL + 8m).
·High-magnesium ash: The power station coal ash is environmentally relatively benign as will be placed at the eastern end of the void, in the Hazelwood Ash Retention Area (HARA). It is separated from the lake by the Hazelwood Ash Retention Embankment (HARE).
·Overburden batters: Overburden batters will be reshaped to no steeper than 3H:1V with safety berms introduced where the vertical distance exceeds 20 m, topsoiled and seeded.
·Coal batters: New permanent coal batter faces will be shaped to no steeper than 2.5H:1V and preferably 3H:1V. Non-permanent coal batters will be maintained as they are until they are dug as permanent coal batters. Existing batters and benches carrying critical conveying infrastructure are considered non-permanent batters as the digging program has been revised to allow a final retreat digging pass that will convert them to permanent batters, i.e. no steeper than 2H:1V and preferably 3H:1V. Once the bench has been completed, exposed coal will be progressively covered with overburden from the working face of the mine and revegetated on decommissioning.
·Mining infrastructure will be decommissioned and removed;
·Public access: these are matters to be discussed closer to the time of closure, although the intent is to ensure a site that provides safe access if that is deemed to be a requirement at the time.
·Ecological function: Revegetation options are constrained by a shortage of topsoil. IPRH has developed a site-specific species planting guide.
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6.7.2 Further Work – Mine Closure Investigations
Further investigations to provide data for mine-closure planning may be required to address the complex issues associated with, in particular, long-term stability of the mine. These investigations include a review of previous studies to establish whether the results of those studies hold for expected changes in external influences.
Annexed to this Statement and marked “P” is a copy of the Work Plan Variation.

F. THE NORTHERN BATTERS OF THE MINE

Mining and aquifer depressurisation activities which have taken place on the HPP land between approximately 1955 and present, together with mining and aquifer depressurisation activities across the Latrobe Valley, have led to significant horizontal and vertical ground movements in the land on which the MMD is positioned.
If the MMD were to fail, water from the MMD may be introduced into a network of coal joints and cracks in the northern batters of the Mine below the MMD, which may contribute to a movement in the northern batters. HPP is required to monitor and manage groundwater levels in, and the stability of, the northern batters, in accordance with its Revised Work Plan, and a Ground Control Management Plan (GCMP) developed in accordance with regulation 45 and Part 2 of Schedule 15 of the Mineral Resources (Sustainable Development)(Mineral Industries) Regulations 2013 (Vic). Annexed to this Statement and marked ”Q” is a copy of the GCMP.

G. MANAGEMENT OF THE MMD

Condition 3 of the Section 110 Notice provides that HPP must “implement and establish all procedures and resources necessary to for the prevention of such leakage from the drain and the pipeline under the drain into the Hazelwood Mine including obligations in relation to ongoing monitoring and reporting to the Inspector.”
In response to this requirement, HPP has produced an Operation and Maintenance Manual with respect to the MMD dated July 2013 (O&M Manual). The O&M Manual requires HPP to, amongst other things:
(a)inspect the Teranap liner for punctures , erosion and sag points;
(b)conduct surveys of the height of the pits and Teranap liner;
(c)inspect pit inlets for obstructions, and clear away same;
(d)inspect the low flow pipe for obstructions, and movement; and
(e)mow the grassed sections of the MMD;
(f)inspect earthen sections of the MMD for erosion, depression, surface cracks and ponding, and conduct works to rectify the same.
Council does not contribute towards HPP’s costs of monitoring and maintaining the MMD.

G. ALTERNATIVES

An options report prepared by SKM for the then named Department of Primary Industries dated 14 February 2013 estimated the capital costs of re-building the MMD outside of the Mine boundary would be between $64.2 million and $91.8 million. DPI’s instructions to SKM were expressly limited to consideration only of drainage options that could be located outside the Mine boundary.
HPP has other options for dealing with runoff water from the Mine Catchment area (marked in the plan labelled “B” attached to the FASOC) into the MMD. One such option is diverting this water into the base of the Mine and using the settling ponds to store this water. The settling ponds in the base of the Mine currently have the capacity to store approximately 2 gigalitres of flood storage water.

Schedule 5 – Rainfall- Runoff Model Layout (RORB)

Schedule 6 – Drainage and Catchment Summary

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.

Item No.	Description	Funding organisation	Contribution	Timeline
1.	Clean up vegetation within the high flow of the drain (per WGCMA scope and estimate)	HPP	$20,000+	Initial veg removal complete, spraying remains
2.	Repair sink hole in the high flow channel and repair pit (per HPP geotech scope)	VicRoads HPP	$15,000 $20,000+	Q1 2010
3.	Install litter trap on Chapel St and Commercial Rd sources of rubbish	Council	$300,000	Q3 2010
4.	Cut V notch 1^st drop structure and regrade drain contents	WGCMA & Council	$10,000¹ $4,000²	Q4 2009
5.	Annual aquatic spraying from pipe outlet to 1^st drop structure	WGCMA³ & HPP	$1,250 $1,250	Q2 annually (autumn)

[2015] VSC 638

19 November 2015