J.K. Williams Staff Pty Limited v Sydney Water Corporation

[2021] NSWLEC 23

Land and Environment Court

New South Wales

Medium Neutral Citation:

J.K. Williams Staff Pty Limited v Sydney Water Corporation [2021] NSWLEC 23

Hearing dates:

16-19 February 2021

Date of orders:

18 March 2021

Decision date:

18 March 2021

Jurisdiction:

Class 4

Before:

Preston CJ

Decision:

The Court:

(1) Declares that Sydney Water Corporation has breached s 75D(2) of the Environmental Planning and Assessment Act 1979 (EPA Act), by carrying out the development of the Western Sydney Recycled Water Initiative – Replacement Flows Project (the Project) in breach of condition 1.1 of the approval granted by the Minister for Planning under s 75J of the EPA Act on 20 June 2007 for the carrying out of the Project.

(2) Directs the parties to file and serve submissions on the orders that the parties contend the Court should make by way of prohibitory or mandatory injunctions, and any submissions the parties wish to make on the costs order the Court should make, in accordance with the following timetable:

(a) The applicant to file and serve its submissions by 1 April 2021.

(b) The respondent to file and serve its submissions by 15 April 2021.

(c) The applicant to file and serve its submissions in reply by 22 April 2021.

(3) Grants leave to each party to relist the matter in order to fix a date for hearing if a party wishes to have a hearing on the issues of the injunctive orders or the costs order the Court should make.

Catchwords:

CIVIL ENFORCEMENT – discharge of treated effluent from sewage treatment plant into creek – erosion of bank of creek – whether breach of planning or environmental laws – approval under Part 3A of Environmental Planning and Assessment Act 1979 – approval condition that proponent comply with statement of commitments – commitment not to cause degradation of bed or bank stability of creek – effect of statement of commitments – commitment breached – whether erosion is pollution of land – no land pollution established – condition of operating licence for sewage treatment plant to meet objectives of Sydney Water Act 1994 – effect of principal objectives and special objectives – no breach of operating licence

TORTS – duty of care in relation to support for land under s 177 of the Conveyancing Act 1919 – whether bank erosion removed support – breach of duty of care – defence under s 43A of Civil Liability Act 2002 not established – defence of statutory authority not established – nuisance action not maintainable

Legislation Cited:

Civil Liability Act 2002 ss 5A, 5B, 5C, 5D, 5E, 43A

Conveyancing Act 1919 s 177

Environmental Planning and Assessment Act 1979 Part 3A, Part 4, ss 75D, 75J, 4.17, 9.46

Interpretation Act 1987 s 32

Protection of the Environment Administration Act 1991 ss 6, 8

Protection of the Environment Operations Act 1997 ss 50, 55, 142, 142A, 142C

Sydney Water Act 1994 ss 12, 21, 22

Water Management Act 2000

Cases Cited:

4nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191

ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67

Allen v Gulf Oil Refining Ltd [1981] AC 1001

Anastasiou v Wallace [2020] NSWLEC 14

Auburn Council v Nehme (1999) 106 LGERA 19 [1999] NSWCA 383

Barr v Biffa Waste Services Pty Ltd [2013] QB 455; [2012] EWCA 312

Benning v Wong (1969) 122 CLR 249; [1969] HCA 58

Buck v Bavone (1976) 135 CLR 110; [1976] HCA 24

Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; [1994] HCA 13

Coventry v Lawrence [2014] AC 822; [2014] UKSC 13

Curtis v Harden Shire Council (2014) 88 NSWLR 10; [2014] NSWCA 314

Elston v Dore (1982) 149 CLR 480 [1982] HCA 71

Environment Protection Authority v Du Pont (Australia) Ltd [2013] NSWLEC 98

Environment Protection Authority v Grafil Pty Ltd (2019) 238 LGERA 147; [2019] NSWCCA 174

Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80

F Hannan Pty Ltd v Electricity Commission of New South Wales (No 3) (1985) 66 LGRA 306

Gales Holdings Pty Ltd v Tweed Shire Council (2013) 85 NSWLR 514; [2013] NSWCCA 382

Henville v Walker (2001) 206 CLR 459; [2001] HCA 52

Hicks v Ruddock (2007) 156 FCR 574; [2007] FCA 299

House of Peace v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44

Hunt & Hunt Lawyers (A firm) v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 623; [2013] HCA 10

Hunter Industrial Rental Equipment Pty Ltd v Dungog Shire Council (2019) 101 NSWLR 1; [2019] NSWCA 147

Jeffman Pty Ltd and Lawrence Dry Cleaners Pty Ltd v Environment Protection Authority of NSW, Sydney Water Corporation and Douglas and Hilary Hutchinson [2011] NSWLEC 89

K&M Prodanovski Pty Ltd v Wollongong City Council (2013) 195 LGERA 23; [2013] NSWCA 202

Lake Macquarie City Council v Australian Native Landscapes Pty Ltd (No 2) [2015] NSWLEC 114

Lloyd v Robinson (1962) 107 CLR 142 at 154 [1962] HCA 36

March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12

Marcic v Thames Water Utilities Ltd [2002] QB 929

Melaleuca Estates Pty Ltd v Port Stephens Council (2006) 143 LGERA 319; [2006] NSWCA 31

Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18

Minister for Planning v Walker (2008) 161 LGERA 423; [2008] NSWCCA 224

Newcastle City Council v Shortland Management Services (2003) 57 NSWLR 173; [2003] NSWCA 156

Northern Residential Pty Ltd v Newcastle City Council (2009) 75 NSWLR 192; [2009] NSWCA 141

Oshlack v Irongates Pty Ltd (1997) 130 LGERA 189; [1997] NSWLEC 89

Patrick Stevedores Operations (No 2) Pty Ltd v Hennessy; FBIS International Protective Services (Aust) Pty Ltd [2015] NSWCA 253

Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278

Quick v Alpine Nursery Sales Pty Ltd [2010] NSWSC 1248

R (on the application of Skelmersdale Limited Partnership v West Lancashire Borough Council [2016] EWCA Civ 1260

Randren House Pty Ltd v Water Administration Ministerial Corporation [2020] NSWCA 14

Rao v Canterbury City Council (2000) 112 LGERA 360; [2000] NSWCCA 471

Roads and Maritime Services v Grant [2015] NSWCA 138

Robson v Leischke (2008) 72 NSWLR 98; [2008] NSWLEC 152

Rowley v NSW Leather Trading Co Pty Ltd and Woollahra Municipal Council (1980) 49 LGRA 250

Rylands v Fletcher (1868) LR 3 HL 330

Southern Properties (WA) Pty Ltd v Executive Director, Department of Conservation and Land Management (2012) 42 WAR 287; [2012] WASCA 79

Strong v Woolworths Ltd (2012) 246 CLR 182; [2012] HCA 5

Telstra Corporation v Hornsby Shire Council (2006) 67 NSWLR 256; [2006] NSWLEC 133

Trump International Golf Club Scotland Ltd v Scottish Ministers at [2016] 1 WLR 85; [2015] UKSC 74

Tubbo Pty Ltd v Minister administering the Water Management Act 2000; Harvey v Minister administering the Water Management Act 2000 [2008] NSWCA 356

Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62

Wallace v Kam (2013) 250 CLR 375; [2014] HCA 19

Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335

Warth v Lafsky [2014] Aust Torts Rep 82-166; [2014] NSWCA 94

Weber v Greater Hume Shire Council (2019) 100 NSWLR 1; [2019] NSWCA 74

Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30; [2004] HCA 63

Wingecarribee Shire Council v De Angelis [2016] NSWCA 189

Winn v Director-General National Parks and Wildlife (2001) 130 LGERA 508; [2001] NSWCA 17

Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5) [2013] NSWLEC 68

Wyong Shire Council v Shirt (1980) 146 CLR 40; [1980] HCA 12

X (Minors) v Bedforshire County Council [1995] 2 AC 633

Texts Cited:

John Austin, Austin: The Province of Jurisprudence Determined, ed Wilfrid Rumble (Cambridge University Press, 1995)

Category:

Principal judgment

Parties:

J.K. Williams Staff Pty Limited (Applicant)
Sydney Water Corporation (Respondent)

Representation:

Counsel:
Mr W G Muddle SC with Mr H El-Hage (Applicant)
Mr S Donaldson SC with Mr S Glascott (Respondent)

Solicitors:
Holman Webb (Applicant)
Makinson d’Apice (Respondent)

File Number(s):

2019/396280

Publication restriction:

Nil

Judgment

1. The water flows in a creek in western Sydney, Boundary Creek, are significantly eroding the bank within land owned by the applicant, J. K. Williams Staff Pty Ltd (Williams), at 44 Jack Williams Drive, Penrith. Central issues in these proceedings are: what is the cause and who is responsible for this erosion?

2. Williams claims that treated effluent discharged by Sydney Water Corporation (Sydney Water) from its sewage treatment plant at Penrith (Penrith STP), located about 1km upstream, is a material cause of the erosion and hence Sydney Water is responsible. Williams claims that Sydney Water has legal responsibility under three planning or environmental laws, the Environmental Planning and Assessment Act 1979 (EPA Act), the Protection of the Environment Operations Act 1997 (POEO Act) and the Sydney Water Act 1994 (SW Act), the common law of private nuisance, and the duty of care in relation to support for land under s 177 of the Conveyancing Act 1919 (Conveyancing Act). Williams claims that Sydney Water has breached these legal responsibilities in various ways by discharging treated effluent into Boundary Creek in such volume and such manner as to cause erosion of Williams’ land.

3. Sydney Water accepts that water flows in Boundary Creek are eroding the bank within Williams’ land and that Sydney Water has discharged and continues to discharge treated effluent into Boundary Creek. Sydney Water contests, however, that the discharged treated effluent is a material cause of the erosion of the bank of Boundary Creek. It claims that the volume of discharged treated effluent is insufficient by itself to cause the erosion. Instead, the main cause of erosion is runoff from the Boundary Creek catchment. In this factual circumstance, Sydney Water contends that it is not in breach of any of its statutory or common law legal responsibilities. If, however, the discharged treated effluent is a cause of the erosion, Sydney Water contests that it has breached any of its legal responsibilities, for various reasons that depend on the elements of the legal responsibility in question and any defence that is available to relieve it of responsibility.

The structure of the judgment

4. As a central issue in these proceedings is the cause of the erosion, I will commence with this issue. I will secondly address the claims of breach of the three planning or environmental laws, in the order of the EPA Act, POEO Act and SW Act. I will thirdly address the claim of breach of the duty of care under s 177 of the Conveyancing Act. Finally, I will address the claim of private nuisance.

The cause of erosion

5. Boundary Creek, in its natural state, is an ephemeral creek. It originates in land situated at 35 Coombes Drive, Penrith and heads first northwards under Hickeys Road then westwards through Ockeys Park and past Penrith STP. Boundary Creek is largely channelised in this stretch. At the point where Penrith STP discharges treated effluent into Boundary Creek, Sydney Water has constructed a protective stone layer on the embankment of Boundary Creek to prevent bank erosion.

6. After this point of discharge, Boundary Creek travels westwards under Castlereagh Road, through three parcels of land situated at 2166 Castlereagh Road, 2152-2164 Castlereagh Road and Mullins Road, before entering Williams’ land. Before Boundary Creek enters Williams’ land, it becomes a natural stream. The northern bank of Boundary Creek within Williams’ land is high and steep and is significantly eroding. This northern bank is at the outside of a bend of Boundary Creek, where erosional forces are greatest.

7. After Boundary Creek leaves Williams’ land, still heading westwards, it travels through a public reserve, owned by Penrith City Council, before discharging into the Nepean River about 50m downstream of Penrith Weir.

8. Since the commencement of operation of Penrith STP, treated effluent has been discharged into Boundary Creek from Penrith STP. The volume of the discharges increased substantially after the Replacement Flows Project was commissioned and commenced operation in August 2010. I will explain this project in the next section of the judgment.

9. In the period from January 2005 to July 2010, an average of 24ML/day of treated effluent was discharged from Penrith STP into Boundary Creek. During this period, there were days when more than 24ML/day were discharged in a single day (up to 94ML/day). Between August 2010, when the Replacement Flows Project was commissioned and commenced operation, and January 2018, the volume of treated effluent discharged from Penrith STP into Boundary Creek increased to be on average 44ML/day. During this period, there have also been days when more than 44ML/day has been discharged during a single day (up to 197ML/day). The increase in the average daily volume of treated effluent discharged before and after the Replacement Flows Project commenced operation is therefore 83%.

10. Expressed in terms of annual discharge volumes, in the period 2005 to 2009, Penrith STP discharged into Boundary Creek an average of 8,791ML per annum, which increased in the period 2010 to 2017 to an average of 15,562ML per annum, an increase of 77%.

11. Water flows in Boundary Creek have three sources:

1. rainfall within the Boundary Creek catchment, which converts to local rainfall;

2. leakage and intentionally released domestic water imported to the Boundary Creek catchment through the water supply system, primarily comprising leaking water supply pipes, leaking sewerage pipes and watering of parks and gardens; and

3. Penrith STP discharges into Boundary Creek comprising treated effluent and stormwater runoff that unintentionally enters the sewage system.

12. Of these three sources, only runoff derived from local rainfall and the discharges from Penrith STP can be readily quantified.

13. The sources of water flows to Boundary Creek have remained the same, although their relative proportions have varied over time. The main change in water source occurred in 2010 when the Replacement Flows Project commenced. Penrith STP contributes to the flows in Boundary Creek in two ways: first, it releases a relatively steady baseflow and, second, it releases increased flows during storm events due to unintentional entry of stormwater into the wastewater system.

14. Penrith STP is the source of nearly all of the water flows in Boundary Creek. At the point of discharge of Penrith STP into Boundary Creek, in the period 2005 to 2009, 97.6% of daily flows in Boundary Creek were sourced from Penrith STP, while in the period from 2010 to 2018, 98.4% of daily flows in Boundary Creek were sourced from Penrith STP. Further downstream at Castlereagh Road, the percentages for the same periods are 94.6% and 96.5% respectively.

15. These figures can be presented in the converse. The average percentage of daily flows from sources other than Penrith STP, which largely is catchment runoff derived from local rainfall, at the point of discharge from Penrith STP into Boundary Creek is 2.4% for the period 2005 to 2010 and 1.6% for the period 2010 to 2018, while at Castlereagh Road it is 5.4% for the period 2005 to 2010 and 3.5% for the period 2010 to 2018.

16. The same proportions can be derived from the annual flow volumes in Boundary Creek. At the point of discharge of Penrith STP into Boundary Creek, the average annual flow volume in Boundary Creek for the period 2005 to 2009 was 9,004ML, of which 8,791ML was discharged from Penrith STP, a percentage of 97.6%, while for the period 2010 to 2017, the annual average flow volume was 15,808ML, of which 15,562ML was discharged from Penrith STP, a percentage of 98.4%. At Castlereagh Road, the annual average flow volume in Boundary Creek in the period 2005 to 2009 was 9,293ML, of which 8,789ML was discharged from Penrith STP, a percentage of 94.6%, while for the period 2010 to 2017, the annual average flow volume in Boundary Creek was 16,132ML, of which 15,562ML was discharged from Penrith STP, a percentage of 96.4%.

17. There have been changes in the bed and banks of Boundary Creek over these periods, as a result of the erosion of the bed and bank of Boundary Creek. Dr Markham, the hydrobiologist for Williams, and Mr McAlister, the water technology engineer for Sydney Water, agreed that, between 2000 and now, there has been erosion to the parts of the bank at Boundary Creek situated within Williams’ land.

18. Mr Warry, a surveyor called by Williams, sought to identify the extent of the erosion of the bank of Boundary Creek within Williams’ land, by comparing aerial photographs and LiDAR (Light Detection and Ranging) data. He identified the differences in the edge of the plateau (the top of the bank) from 2003 to 2011 and 2011 to 2019. The year of 2011 was selected as it was shortly after the Replacement Flows Project was commissioned and commenced operation. Mr Warry inferred that in the period 2003 to 2011, 355sqm of land had been eroded, while in 2011 to 2019, 577sqm of land had been eroded.

19. Mr McAlister was critical of Mr Warry’s analysis and findings as to the area of land that had been eroded before and after 2011. Mr McAlister’s criticism, however, was of no moment. One agreed fact is that erosion of the bank within Williams’ land had occurred before, and has continued to occur after, the Replacement Flows Project commenced operation. A second agreed fact is that the discharge of treated effluent from Penrith STP is at least one of the causes of bank erosion, Dr Markham saying that it is the dominant cause while Mr McAlister says it is subordinate to catchment runoff but nevertheless a cause. A third agreed fact is that flows in Boundary Creek, sourced from Penrith STP discharges and catchment runoff, undercut the bank of Boundary Creek leading to collapse of overlying blocks, causing regression of the edge of the plateau and hence the bank of Boundary Creek within Williams’ land. This is the very mechanism observed and recorded by Mr Warry. It matters not, therefore, whether Mr Warry’s precise delineation of the edge of the plateau in 2003, 2011 and 2019 is accurate at every point along the escarpment of the plateau. What matters is that Mr Warry has recorded regression of the edge of the plateau over time, evidencing erosion of the bank of Boundary Creek.

20. Dr Markham and Mr McAlister agreed that the dominant mechanism of bank erosion within Williams’ land is erosion at the base of the bank causing collapse of overlying blocks. Dr Markham explained this mechanism. The bank of Boundary Creek within Williams’ land is a composite bank, comprised of layers of material of different properties. Preferential erosion by fluvial forces of lower layers leads to undercutting and block failure (by modes such as shear, beam and tensile failures). The geotechnical properties of the composite bank may define the precise mode of block failure. Blocks that fall to the base of the bank are eroded by flows in a process called basal cleanout. Fluid entrainment of basal material (ie fluvial erosion at the bank toe) is critically important. The retreat rate of composite banks in the medium to long term is affected by the stability of the lower bank and the toe zone.

21. The current mechanism of bank erosion is different to the historical mechanism. Mr McAlister agreed with Dr Markham that: “Tentatively, the 1943 historic aerial photograph suggests that the mechanism of bank failure is different now (undercutting and slab failure) compared to that evident in the 1943 photographs (rotational/slumping).”

22. Dr Markham and Mr McAlister agree that this process of undercutting of the bank and collapse of the overlying blocks has caused bank and bed migration and will contribute to changes in the position of the thalweg and the bank of Boundary Creek in the future. The thalweg is the line collecting the lowest points of successive cross-sections along the course of a watercourse.

23. The erosion at the base of the bank is caused by the erosive flows in Boundary Creek. The level to which the base of the bank is subject to erosive flows corresponds with the water surface elevation of the flows in Boundary Creek. The water surface elevation of the flows in Boundary Creek varies from time to time. The relative constant daily discharge of treated effluent from Penrith STP results in baseflows with a relatively constant water surface elevation, around 0.2 to. 0.4m. In times of high rainfall, the volume of flow in Boundary Creek increases with a concomitant rise in water surface elevation at the bank within Williams’ land. The increase in flow is partly due to increased discharges from Penrith STP because of stormflow runoff unintentionally entering the sewerage system and partly due to local runoff within the Boundary Creek catchment.

12. Erosion of the earthen materials in the bank does involve, in the end result, the mobilisation and transportation of earthen materials from the bank. The velocity and shear stress of the flow in Boundary Creek affects the rate and extent of erosion. The velocity of flows is the speed at which flows travel down the channel of the creek. The velocity of flows varies across the creek, longitudinally and with depth even when flows are constant. As flows change, so too does the distribution of velocity. The velocity of the flow will be greater on the outside of the bend of the creek than on the inside. The shear stress is the force exerted by the flow on the bed and banks of the channel. The initiation of motion of a sediment particle of a given size is estimated using a parameter called the critical shear stress, which is the value of shear stress at which a sediment particle of a given size and density will just start to move. Increased velocity and shear stress of the flow will allow mobilisation and transportation of larger sized particles.

13. Dr Gippel, the hydrologist jointly appointed by the parties, modelled the impact of velocity and shear stress under different flows in Boundary Creek. Dr Gippel’s model suggested that urbanisation increased the duration of velocity and shear stress over most of the range of flows, particular during storm runoff events, which had higher magnitude under urbanised land use. Penrith STP discharges increase the duration of velocity and shear stress relative to the case without Penrith STP discharges. In this case, the relative impact was greater on the lower range of flows, because without the Penrith STP discharges, the baseflow was very low. The model showed that Penrith STP discharges have the effect of substantially increasing velocity and bed shear stress during flood event recession and baseflow periods.

14. Mr McAlister believed that the increased velocity and shear stress of the flows during catchment runoff peaks initiated erosion in Boundary Creek. Mr McAlister calculated the threshold of particle size that would be transported under different flow conditions. Mr McAlister found that for a water surface slope of 0.015m/m and an average water depth of 0.2m (which would result from a typical discharge from Penrith STP of 50ML/day), the upper threshold of the bed material particle size that would be able to be transported by the flow is 60mm. Using a different method of analysis, Mr McAlister derived a lesser figure of 35mm. Under a significant rainfall and catchment runoff event, which would increase the water depth to 0.7m, Mr McAlister calculated the upper threshold of bed material particle size able to be transported to be 210mm. Using his other method of analysis, he derived a lesser figure of 80mm. Mr McAlister concluded from this analysis that larger sized particles could only be transported by the higher flows during catchment runoff peaks, not during regular flows from Penrith STP. Mr McAlister considered that “this demonstrates the dominant role that rainfall and catchment flows play, and the subordinate influence of regular flows from the Penrith STP and Replacement Flows, in moving sediment within and from Boundary Creek. All regular flows from the Penrith STP and the Replacement Flows will do is assist in removing fines – after catchment flow events cease.”

15. I find Mr McAlister’s conclusion to be simplistic. First, as Dr Markham explained, there is rarely a simple linear relation between the processes of bank erosion and the factors that influence them. The rate of bank erosion is typically variable in both time and spatial extent. For example, there may be a time lag between a substantial flow event and a concomitant failure of the adjacent river bank. This may be due to a wide range of factors such as geotechnical stability thresholds of the eroding bank, progressive weakening of the bank over time (perhaps from weathering processes), leading to eventual substantial failure from an apparently minor triggering impact, amongst other factors. Dr Markham’s summary was that:

“Overall, bank erosion rates result from a complex interplay between a wide range of factors including the geotechnical properties of the bank, the properties of the sediment within the bank, moisture conditions and saturation, the fluid forces of the creek flow and, potentially, a range of other external impacting variables. Erosion of a given bank may vary spatially, the rate may vary over time, may occur some time after the main impacting process (or a range of impacting processes), and may occur directly or indirectly as a result of one of a range of impacting factors. In other words, bank erosion is typically a complex process.”

28. Dr Markham explained that it is important to understand the threshold of erosion, which is the point at which flow in a channel starts to erode the bed and bank material. The threshold of erosion depends on the balance between the erosive power of the flow and the resistance of the boundary material. Shear stress is one factor affecting the erosive power of the flow, but there are a range of other impacting factors, as identified by Dr Markham.

29. It may be accepted that increased flows at times of high rainfall events increase the shear stress and the erosional power of the flows. But the continual flows resulting from Penrith STP discharges also contribute to bank erosion, not only at times of high rainfall but also during baseflow conditions. Starting with flows in times of high rainfall, Dr Markham and Mr McAlister agree that:

“the effect of treatment plant flows on creek flows resulting from periodic large rainfall events is:

- an increase in the duration to which unstable bank sediments are exposed to potentially erosive flows;

- an increase in the duration to which unstable bank sediments are exposed to wetting leading to weakening of the soil structure.

Both these impacts are likely to increase the risk of erosion of the bank.”

30. Dr Markham and Mr McAlister also agree with Dr Gippel’s finding that:

“Under 2018 land use conditions, both velocity and shear stress peaks for storm events was similar for both the with and without plant flow scenarios, but that treatment plant flows caused elevated values of both to persist for much longer, typically several hours.”

31. This effect of weakening the soil structure by wetting of bank materials also occurs during baseflow conditions. Dr Markham identified that the baseflows in Boundary Creek from the continual discharges from Penrith STP have increased the frequency of wetting of the earthen materials in the bank within Williams’ land. The bank materials are a mixture of larger sized particles, such as cobbles and coarse gravel, and smaller sized particles such as fine sediments. Mr Johnston, who examined and tested the sediments in the lower bank, found that the sediments were “highly slaking and disaggregated rapidly and completely upon immersion in water” and that “sediments in the lower bank are extremely susceptible to disaggregation from wetting and drying”. In short, the sediments of the lower bank become more erodible when wet. Dr Markham found that “Mr Johnston’s work indicates that the stability of the bank sediments (and therefore the rate of erosion of the bank), at least up to a height of about 3m, is influenced by the frequency and duration of wetting, as well as the force of the water flow.”

32. The consequence is, contrary to Mr McAlister’s view, that erosion is not initiated only when the shear stress of flows in Boundary Creek increases to a value sufficient to mobilise and transport the larger size particles at times of peak catchment runoff. The baseflows from Penrith STP discharges increase the wetting and disaggregation of the bank materials, and enable mobilisation and transportation of the fine sediments. The threshold of erosion therefore differs for different sized particles; whilst larger sized particles might only be mobilised and transported under peak flows, smaller sized particles are mobilised and transported under baseflows. Once smaller sized particles are eroded from the lower bank, the remaining soil structure is weakened, disaggregates and slumps, resulting in bank undercutting.

33. Dr Markham and Mr McAlister agree that the erosion of Boundary Creek has been caused by the combined effect of “natural processes of erosion and deposition including bank erosion and longer-term bed incision (based on evidence from Peachtree Creek which appears to be incising but is not affected by treatment plant flows); land use change; and increased discharge from the [Penrith] WTP operation”. Of these three causes of erosion, Dr Markham identifies the increased discharges from Penrith STP as being “the dominant process”. Dr Markham relies on Dr Gippel’s report that detailed the substantially greater changes to the flow regime that have occurred from the operation of Penrith STP compared with the impact of land use change. The results of Dr Gippel’s modelling demonstrated the substantial extent to which both the erosive power of the flow and the duration of wetting of unstable sediments has increased as a result of the increased discharges from Penrith STP. Mr McAlister believes that catchment runoff and increases in the magnitude and frequency of such runoff due to catchment urbanisation are far more significant influences than the effect of persistent flows from Penrith STP.

34. I disagree with Mr McAlister and agree with Dr Markham on the cause of the erosion. First, as Dr Gippel’s evidence establishes, Penrith STP is the source of nearly all of the flows in Boundary Creek, whether measured in terms of daily flows or annual flows. Non-Penrith STP sources, including catchment runoff, contribute only an extremely small percentage of the flows in Boundary Creek. As Dr Reinfelds, a hydrologist engaged by the Office of the Hawkesbury Nepean to consider the issue of erosion in Boundary Creek in 2011 after Penrith STP commenced operation, observed:

“It is untenable to argue for a position that substantial increases in baseflow discharges within Boundary Creek arising from the STP, which under current STP discharge rates of 43ML/day represent a 5-6 times increase in annual runoff volumes over natural conditions, have had no effect on channel dimensions, channel bed incision, channel bank erosion, meander migration and pool-riffle geometry. The current STP discharges represent a very large increase in annual runoff volumes over natural conditions within a stream that had never in its recent (Holocene) geological history experienced sustained annual runoff volumes of this magnitude.”

35. Second, at times of high rainfall, discharges from Penrith STP are increased beyond the usual baseflow, as a result of stormwater runoff that unintentionally enters the sewage system. The source of increased flows in Boundary Creek after high rainfall is, therefore, not limited to catchment runoff but also includes increased discharges from Penrith STP.

36. Third, the discharges from Penrith STP in times of high rainfall act in concert with catchment runoff to increase erosional processes in Boundary Creek. Dr Reinfelds had observed in 2011 that Penrith STP discharges “act in concert with stormwater runoff peaks by extending the duration of sediment transporting flows during such events.” Dr Gippel found that Penrith STP discharges during storm events caused elevated values of both velocity and shear stress peaks to persist for much longer, typically several hours. Dr Markham found, and on this point Mr McAlister agreed, that the effect of Penrith STP discharges on creek flows resulting from periodic large rainfall events is to increase the duration to which unstable bank sediments are exposed to potentially erosive flows and increase the duration to which unstable bank sediments are exposed to wetting, leading to weakening of the soil structure, both of which impacts increase the risk of bank erosion.

37. Fourth, the discharges from Penrith STP contribute to bank erosion even during baseflow conditions, by wetting and weakening the soil structure of the lower bank, by the process explained by Dr Markham. Erosion does not only occur during storm events when catchment runoff occurs.

38. In these ways, Dr Markham is correct in identifying the discharges from Penrith STP, not only in times of high rainfall but also at all other times, as the dominant cause of the erosion of the bank of Boundary Creek within Williams’ land.

The claimed breach of the EPA Act

The conditions of approval

39. Penrith STP was originally operated by Penrith City Council but was later purchased and then operated by Sydney Water. On 20 June 2007, the Minister for Planning, under the then Part 3A of the EPA Act, approved the Replacement Flows Project at Penrith STP (the RFP approval). This project included the construction of pipelines to transport tertiary treated effluent from Penrith STP and another sewage treatment plant at Quakers Hill for further treatment at a new advanced water treatment plant at St Marys (St Marys AWTP), and a further pipeline to transport the highly treated recycled water back from St Marys AWTP to Penrith STP, so that it could be released into Boundary Creek and ultimately to the Hawkesbury-Nepean River.

40. As a result of the Replacement Flows Project, Penrith STP releases effluent from two sources at the one discharge point: first, the highly treated recycled water sent back from St Marys AWTP and, secondly, tertiary treated effluent from Penrith STP, being the difference between the volume of effluent treated at Penrith STP less the volume sent to St Marys AWTP for further treatment.

41. The RFP approval was issued subject to conditions. Two conditions are important. Condition 1.1 requires Sydney Water to carry out the Replacement Flows Project “generally in accordance with”:

1. the Major Projects Application 06_0190 that sought approval for the Replacement Flows Project;

2. the Environmental Assessment of the Replacement Flows Project dated November 2006 that accompanied that application;

3. the Preferred Project Report for the Replacement Flows Project dated February 2007; and

4. the conditions of the approval.

42. Condition 1.5 of the RFP approval requires that the Replacement Flows Project “shall be limited to the release of up to 50ML/day of highly treated recycled water (replacement flow) to the Hawkesbury-Nepean River…”.

43. The documents referred to in condition 1.1(b) and (c) regulate the Replacement Flows Project in two ways of relevance to this case. First, the Environmental Assessment and the Preferred Project Report, documents prepared on behalf of Sydney Water as required steps in the process of applying for approval, included a Statement of Commitments by Sydney Water. Commitment 10 of the draft Statement of Commitments in the Environmental Assessment and commitment 11 of the revised Statement of Commitments in the Preferred Project Report each stated: “No degradation of bed or bank stability would occur within Boundary Creek downstream of Penrith STP as a result of the Project”.

44. Second, both the Environmental Assessment and the Preferred Project Report impose the same limit on the volume of highly treated recycled water that can be discharged per day into Boundary Creek as does condition 1.5.

45. The Environmental Assessment described the project as producing “up to 50 million litres per day (ML/day) of highly treated recycled water” for discharge to the Hawkesbury-Nepean via the Penrith STP discharge to Boundary Creek (see for example pp S.1, S.5, S.7 (Figure 3) and S.8 (Figure 4)). The assessment of impact of the discharge due to the project on erosion of Boundary Creek was based on the discharge due to the project increasing up to 50ML/day (see pp 7.13 and 7.15).

46. The Preferred Project Report also described the project as involving the production of up to 50ML/day of highly treated recycled water for discharge to the Hawkesbury-Nepean River via the Penrith STP discharge to Boundary Creek (pp 1.2, 1.3 and 4.24). In relation to the concern expressed in submissions regarding the impact of the discharged effluent on Boundary Creek, the Preferred Project Report stated (at p 3.16):

“Boundary Creek currently receives a flow of 22ML/day from Penrith STP. The discharge due to the Project will increase this volume to 50ML/day. The most likely impact on Boundary Creek due to the Project will be the potential for increased erosion of alluvial areas.” (p 3.16).

Williams’ argument of breach of conditions

47. Williams claims that Sydney Water is breaching both condition 1.1 and condition 1.5 of the RFP approval. Sydney Water is breaching condition 1.1 firstly by not carrying out the Replacement Flows Project generally in accordance with the commitment in the Statement of Commitments (that is draft commitment 10 or revised commitment 11). That commitment by Sydney Water is that: “No degradation of bed or bank stability would occur within Boundary Creek downstream of Penrith STP as a result of the Project”. Yet, the uncontested evidence is that degradation of bed or bank stability has occurred within Boundary Creek downstream of Penrith STP. Williams submits that such degradation is “a result of” the Replacement Flows Project, even if the project is not the sole cause as it “materially contributes” to the degradation.

48. Williams submits that the requirement of condition 1.1 that the Replacement Flows Project be carried out “generally in accordance with” the Environmental Assessment and the Preferred Project Report, and the Statement of Commitments in those documents, does not allow any material deviation in this case, having regarding to the terms in which the commitment is phrased. Under the commitment, Sydney Water undertook that “no degradation would occur within Boundary Creek” as a result of the Replacement Flows Project. That commitment is unequivocal. It does not allow degrees of compliance. Any degradation of Boundary Creek as a result of the Replacement Flows Project is a failure to comply with the commitment.

49. Williams submits that the causal element of the commitment, “as a result”, imports a requirement for there to be a connection between the Replacement Flows Project and the degradation of Boundary Creek. A common sense approach should be adopted to determine this issue. The relevant question is whether discharges under the Replacement Flows Project “materially contributed” to the degradation of the bed and bank of Boundary Creek: see generally Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [18], [61], [96], [153] and [158]. Sydney Water cited Hayne J’s observations at [163] as apposite:

“Secondly, seldom, if ever, will contravening conduct be the sole cause of a person suffering loss… What the Act directs attention to is whether the contravening conduct was a cause. It does not require, or permit, the attribution of some qualification such as ‘solely’ or ‘principally’ to the word ‘by’.”

See also Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5) [2013] NSWLEC 68 at [234]-[237] dealing with the meaning of “cause”.

50. Williams submits that Sydney Water is secondly breaching condition 1.1 by not carrying out the Replacement Flows Project “generally in accordance with” the limit on the volume of treated effluent able to be discharged to Boundary Creek of 50ML/day, as stated in both the Environmental Assessment and the Preferred Project Report. Williams accepted that the phrase “generally in accordance with” might allow for some latitude and deviation from the limit of 50ML/day fixed in the Environmental Assessment and the Preferred Project Report, but only if it is of a relatively minor nature: Oshlack v Irongates Pty Ltd (1997) 130 LGERA 189 at 196-197; [1997] NSWLEC 89; Lake Macquarie City Council v Australian Native Landscapes Pty Ltd (No 2) [2015] NSWLEC 114 at [48]. In this case, however, the deviation from the limit of 50ML/day is not minor, as the discharge has reached up to 238ML/day at times.

50. Williams submits that Sydney Water, by discharging more than 50ML/day, has also breached condition 1.5 of the RFP approval.

Sydney Water’s argument of no breach of conditions

52. Sydney Water contests that it has breached conditions 1.1 and 1.5 of the RFP approval.

53. In relation to commitment 11 in the revised Statement of Commitments in the Preferred Project Report, Sydney Water contests that it is under a legal obligation to comply with that commitment. Sydney Water noted that the then applicable s 75J(5) of the EPA Act empowered the Minister to grant an approval subject to a condition requiring the proponent to comply with any obligation expressed in a statement of commitments. The subsection provided:

“The conditions of approval for the carrying out of a project may require the proponent to comply with any obligations in a statement of commitments made by the proponent (including by entering into a planning agreement referred to in section 93)”.

54. Sydney Water accepted that condition 1.1 of the RFP approval required it to carry out the project generally in accordance with the Preferred Project Report, which included the Statement of Commitments made by Sydney Water. However, the terms in which commitment 11 in that Statement of Commitments is expressed does not impose any obligation on Sydney Water to do or refrain from doing anything. Rather, the commitment is expressed in terms of an understanding or belief. The impacts of the discharge from the project on Boundary Creek had been assessed and the result of that assessment was that there would be no degradation of bed or bank stability of Boundary Creek as a result of the project.

55. Sydney Water further submitted that condition 1.1, requiring the project to be carried out generally in accordance with the Preferred Project Report including the Statement of Commitments in it, cannot sensibly be read as requiring Sydney Water not to do precisely that which the approval permitted, of discharging treated effluent into Boundary Creek. Sydney Water submitted that it has carried out the project precisely in accordance with the Preferred Project Report, which contemplated that it would discharge highly treated recycled water into Boundary Creek. That serves to emphasise that a commitment in a statement of commitments, such as that contained in commitment 11, must be interpreted as a statement of belief and not an undertaking to modify the project in some undefined way at some time in the future.

56. Sydney Water contested that it was limited to discharging treated effluent from Penrith STP to Boundary Creek to 50ML/day. The environment protection licence issued under the POEO Act authorises the discharge of up to 238ML/day. Sydney Water accepted that, during wet weather events, discharges from Penrith STP have occasionally exceeded the average of 43ML/day since 2007 but have not exceeded the licence limit of 238ML/day.

57. Accordingly, Sydney Water denies that it has breached either condition 1.1 or condition 1.5 by discharging to Boundary Creek more than 50ML/day of highly treated recycled water.

Breach of condition 1.1 of the RFP approval established

58. I find that Sydney Water has breached condition 1.1 but not condition 1.5 of the RFP approval. These findings flow largely from the proper construction of the conditions of the RFP approval.

59. A development consent granted under Part 4 of the EPA Act or an approval granted under Part 3A of the EPA Act are to be construed having regard to the statutory provisions governing its grant (Hunter Industrial Rental Equipment Pty Ltd v Dungog Shire Council (2019) 101 NSWLR 1; [2019] NSWCA 147 at [268]) and “its enduring functions” of authorising the carrying out of the development or activity for which consent or approval was sought (Winn v Director-General National Parks and Wildlife (2001) 130 LGERA 508; [2001] NSWCA 17 at [4]). The consent or approval speaks “according to its written terms, construed in context but having regard to its enduring function”: House of Peace v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44 at [37] and see [23]. The meaning of the language used in the consent or approval “is to be determined objectively having regard to the context in which the consent was issued and taking into account the fact that, unlike a contract between parties, the consent operates in rem and is for the benefit of subsequent owners and occupiers, as well as the applicant”: K&M Prodanovski Pty Ltd v Wollongong City Council (2013) 195 LGERA 23; [2013] NSWCA 202 at [23].

60. It is permissible to look at the application seeking consent or approval and the documents and plans accompanying the application in order to determine the scope and operation of the consent or approval and the development or activity for which consent or approval was sought: Hunter Industrial Rental Equipment Pty Ltd v Dungog Shire Council at [57]-[59], [62], [80], [296]-[298], [302]-[305], [310] and [311].

61. A consent or approval is to be determined in accordance with the same principles of statutory interpretation that are applicable to interpreting other legal documents. Planning permissions are not in a special category requiring adoption of a completely different approach to their interpretation: Trump International Golf Club Scotland Ltd v Scottish Ministers at [2016] 1 WLR 85; [2015] UKSC 74 at [60], [66]. There is no general principle requiring laxity or flexibility in construing delegated planning legislation or statutory instruments, including development consents or approvals, nor do practical considerations permit a re-writing of delegated legislation or statutory instruments to meet what the court thinks is a permissible and practical outcome: Wingecarribee Shire Council v De Angelis [2016] NSWCA 189 at [20]; 4nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191 at [45]; Environment Protection Authority v Grafil Pty Ltd (2019) 238 LGERA 147; [2019] NSWCCA 174 at [257]-[261], [272].

62. A condition of consent or approval is to be interpreted by asking “what a reasonable reader would understand the words to mean when reading the condition in the context of the other conditions and of the consent as a whole. This is an objective exercise in which the Court would have regard to the natural and ordinary meaning of the relevant words, and overall purpose of the consent, any other conditions which cast light on the purpose of the relevant words, and common sense”: Trump International Golf Club Scotland Ltd v Scottish Ministers at [34].

63. With this guidance in mind, I turn to construe the RFP approval, having regard to the statutory provisions governing its grant and the application for approval of the project and the accompanying documents.

64. The RFP approval was granted under the then in force Part 3A of the EPA Act. Part 3A applied to major infrastructure or other development declared to be a project to which the Part applied: s 75B(1) and (2). The Minister for Planning declared, by order dated 23 October 2006, the Replacement Flows Project to be a project to which Part 3A applied. The Minister’s approval under Part 3A was thereupon required for the carrying out of the Replacement Flows Project: s 75D(1).

65. Sydney Water applied for the Minister’s approval to carry out the Replacement Flows Project, the application being received by the Director-General on 14 July 2006. As required by s 75E(2)(a), the application described the Replacement Flows Project for which approval was being sought, briefly in the application form and more fully in the attached Preliminary Assessment document. The brief description in the application form was:

“Western Sydney Recycled Water Initiative - Replacement Flows Project

Significant components include:

- Effluent transfer pipelines from Quakers Hill, Penrith and St Marys sewage treatment plants to the proposed advanced water treatment plant;

- Brine transfer from the proposed advanced water treatment plant into the Northern Suburbs Ocean Outfall Sewer;

- An advanced water treatment plant at the St Marys sewage treatment plant site;

- Discharge of the highly treated recycled water (replacement flows) into the Hawkesbury-Nepean River.”

66. Pursuant to s 75F(2) and (3), after receiving the application, the Director-General prepared, and notified Sydney Water on 1 September 2006 of, the environmental assessment requirements for the project. The Director-General described the project as follows:

“The Western Sydney Recycled Water Initiative - Replacement Flows Project, involving the interconnection of three existing sewage treatment plants and treating the available effluent from these plants via a new advanced water treatment plant to replace the water that is currently released from Warragamba Dam for extraction and river health purposes. The project involves the construction and operation of the following key components (Major Project Application: 06_0190):

a) an advanced water treatment plant at St Marys sewage treatment plant;

b) effluent transfer pipelines from Quakers Hill, Penrith and St Marys sewage treatment plants to the advanced water treatment plant;

c) a brine transfer pipeline and pumping station for the brine from the advanced water treatment plant to a storage pond at Quakers Hill sewage treatment plant. This will connect with a pipeline that will transfer brine from the pond to the Northern Suburbs Ocean Outpour Sewer (NSOOS);

d) balance storage tanks and pumping stations at Penrith, Quakers Hill and St Marys sewage treatment plants;

e) a recycled water pipeline for the transfer of the treated recycled water (replacement flow) produced by the advanced water treatment plant to Penrith sewage treatment plant. The replacement flow is proposed to be discharged via the existing effluent outlet into Boundary Creek, which discharges into the Hawkesbury-Nepean River below Penrith Weir.”

67. As entitled under s 75F(6), the Director-General required, as one of the General Requirements, Sydney Water to include in the environmental assessment “a statement of the commitments the proponent is prepared to make for environmental management and mitigation measures on the site”. The Director-General’s requirement was that the Environmental Assessment must include “a draft Statement of Commitments detailing measures for environmental mitigation, management and monitoring for the project”.

68. One of the Key Assessment Requirements that the Director-General required the Environmental Assessment to address was “Impacts on the stability of Boundary Creek and measures to rehabilitate the banks and bed of the creek.”

69. As required by s 75H(1), Sydney Water submitted to the Director-General the required Environmental Assessment for approval to carry out the Replacement Flows Project. The Summary of the Environmental Assessment briefly described the Replacement Flows Project as follows:

“The Project involves the construction and operation of an Advanced Water Treatment Plant (AWTP) and associated works. It will include treating existing tertiary effluent from St Marys, Penrith and Quakers Hill sewage treatments plans (STPs) in north western Sydney at an AWTP located at St Marys, producing up to 50 million litres per day (ML/day) of highly treated recycled water. The recycled water would be substituted, as replacement flows, for water that is currently released from Warragamba Dam for extraction and river health purposes. The volume of treated tertiary effluent discharged directly from Penrith STP would be minimised, and sufficient volume of tertiary treated effluent discharged from St Marys and Quakers Hill STPs would be maintained for the downstream water uses in South Creek.”

70. This brief description was followed by a fuller description as follows:

“The project consists of:

- an Advanced Water Treatment Plant (AWTP) at the St Marys STP site for the treatment of tertiary treated effluent from Quakers Hill, Penrith and St Marys STPs. The AWTP would produce about 50ML/day of highly treated recycled water for discharge to the Hawkesbury-Nepean River downstream of Penrith Weir, and approximately 8ML/day of concentrate to be discharged to the Northern Suburbs Ocean Outfall Sewer (NSOOS)

- a pipeline for the transfer of tertiary treated effluent from Penrith STP to the AWTP site at St Marys STP

- a pipeline for the transfer of tertiary treated effluent from Quakers Hill STP to the AWTP at St Marys STP

- a pipeline for the transfer of recycled water produced by the AWTP at St Marys STP to Penrith STP

- a pipeline for the transfer of the concentrate from the AWTP to Quakers Hill STP

- a storage pond at Quakers Hill STP for the temporary storage of the concentrate, when the NSOOS may not be available for discharge (during periods of extended wet weather)

- transfer of the concentrate to the NSOOS via an existing pipeline from Quakers Hill STP to Seven Hills and a new pipeline between Seven Hills and Vineyard Creek at Dundas

- balance storages and pumping stations at Penrith, Quakers Hill and St Marys STPs.”

71. These descriptions of the project apply the maximum volume of 50ML/day discharged to Boundary Creek to the highly treated recycled water produced at the AWTP at St Marys STP and transferred to Penrith STP. Elsewhere, however, the Summary of Environmental Assessment is less specific. Figure 3 Replacement Flows Project during normal operations identifies “highly treated recycled water 50ML/day” as being discharged from the “Advanced Water Treatment Plant” into the Hawkesbury-Nepean River and shows no flows coming directly from Penrith STP into the Hawkesbury-Nepean River but instead shows flows coming from Penrith STP to the AWTP. Figures 4, 5 and 6 summarise the water quantity and quality changes as a result of the Replacement Flows Project. Figures 4 and 5 identify, at point 4, which is the discharge via Boundary Creek, that “all flow conditions (STP or AWTP discharges)” are predicted to increase from the current level of 22ML/day to 50ML/day.

72. In the assessment of the impact of the project on river health and water users, the Environmental Assessment described the existing conditions of Boundary Creek downstream of Penrith STP. It notes that “Boundary Creek is the discharge location for Penrith STP, which currently discharges approximately 22ML/day of tertiary treated effluent into the creek” (s 7.3.3). The Environmental Assessment, in the assessment of the project on Boundary Creek, stated:

“The discharge due to the Project would increase up to 50ML/day, providing an additional source of flow for this section of the river.” (s 7.3.3).

73. The Environmental Assessment then assesses the impact of this change in flows on Boundary Creek (in s 7.3.6):

“Boundary Creek is a small tributary of the Hawkesbury-Nepean River, with a catchment of 304ha, which flows into the main river channel, about 50m downstream of Penrith Weir. Its relevance to the Project is that approximately, 22ML/day of tertiary treated effluent from Penrith STP is currently discharged into the creek, approximately 500m upstream of its junction with the Nepean River. Boundary Creek flows through the Penrith STP site where its riparian zone has been cleared or contains patchy re-growth of casuarinas and terrestrial and aquatic weed species.

Downstream of the Penrith STP, Boundary Creek crosses under Castlereagh Road through a culvert, before entering an industrial and commercial zone. A 10-20m riparian zone either side of the creek has been maintained through this area, which increases in width as the creek flows towards the Nepean River. The riparian zone is heavily infested with weeds and there is some re-growth of endemic native vegetation. There is evidence of significant erosion of alluvial soils in the lower sections of the creek, near the confluence with the Nepean River.

The creek catchment does not contribute any flows to the creek in dry weather. However, in wet weather, flows in the creek increase significantly. For a 1 in 2 year storm, estimated flows are 3,255ML/day, increasing to 5,731ML/day for a 1 in 20 year storm. These volumes are significantly greater than the current Penrith STP discharge of 22ML/day and the proposed replacement flow of 50ML/day.

An assessment was undertaken of the potential of the current discharge and proposed replacement flows discharge to cause erosion of the alluvial areas currently affected. In the eroding stretch of the creek, the current discharge has a depth between 0.1 to 0.3m and a velocity between 0.1 to 0.7m/s. With the discharge of the replacement flows the depth would increase marginally to between 0.1 to 0.5m and velocity to between 0.2 to 0.9m/s. This water depth is within the natural channel and below the level of alluvial sediments which are eroding. There would also not be sufficient velocity to cause any significant additional erosion. The main causes of the erosion appear to be high wet weather flows and receding floodwaters from the Nepean River. Consequently no additional mitigation measures are required to manage erosion in Boundary Creek, which may result from the operation of the Project.”

74. As required by the Director-General, the Environment Assessment included a draft Statement of Commitments in chapter 11. The Overview explained the reason for Sydney Water making these commitments:

“The Environmental Assessment of the Project has identified measures to manage any potential impacts associated with the Project. These have been identified in Chapters 7 and 8 and have been developed as commitments that would avoid or reduce potential effects of the Replacement Flows Project. This Chapter provides the draft Statement of Commitments for the Project. The draft will be finalised in response to stakeholder and community input during the display of the Environmental Assessment. Following project approval, Sydney Water and its contractors will be required to deliver and operate the Project in accordance with these commitments.” (s 11.1).

75. This last statement is important as it indicates that Sydney Water viewed the Statement of Commitments it had made as being legally binding and requiring Sydney Water and its contractors to deliver and operate the project in accordance with the commitments.

76. The commitments were described in Table 11.1 (key issues) and Table 11.2 (other issues) in terms of commitment topic, commitment statement and relevant project phase (s 11.2). In Table 11.1, under the commitment topic of “Ecology” was the commitment statement then numbered 10, that “no degradation of bed or bank stability would occur within Boundary stream [sic, Creek] downstream of Penrith STP as a result of the Project”, which applied to the project phase of “Design, Construction & Operation”. This commitment statement directly engaged with the Director-General’s “key assessment requirement” with respect to aquatic ecology, that the Environmental Assessment address “impacts on the stability of Boundary Creek and measures to rehabilitate the banks and bed of the creek.”

77. After the Environmental Assessment was submitted to the Director-General, the Director-General made the Environmental Assessment publicly available, invited submissions by the public and public authorities, and provided copies of submissions received to Sydney Water (see s 75H(3), (4) and (5)).

78. Under s 75H(6), the Director-General required Sydney Water to submit a response to the issues raised in the submissions, a preferred project report that outlines any proposed changes to the project to minimise the environmental impact, and “any revised statement of commitments”: s 75H(6)(a), (b) and (c). As required by the Director-General, Sydney Water submitted a “Preferred Project Report for Replacement Flows Project” dated February 2007. The Preferred Project Report responded to the issues raised in submissions (Chapter 3), summarised the changes to the project since the Environmental Assessment (Chapter 4), and submitted a revised Statement of Commitments (Chapter 5).

75. One of the submissions raised concern regarding impacts on Boundary Creek by the increased flows in Boundary Creek as a result of the project. The Preferred Project Report responded to this concern:

“Boundary Creek currently receives a flow of 22ML/day from Penrith STP. The discharge due to the Project will increase this volume to 50ML/day. The most likely impact on Boundary Creek due to the Project will be the potential for increased erosion of alluvial areas.

The EA included an assessment of the impacts of the Project on erosion in Boundary Creek, which concluded that the main causes of the erosion appear to be high wet weather flows and receding floodwaters from the Nepean River.

The water quality in Boundary Creek will improve with the operation of the Project as the tertiary treated effluence that is currently discharged to the creek will be replaced with highly treated recycled water that has significantly lower levels of nutrients and dissolved solids.”

80. The preferred project was described in the same terms as the project was described in the Environmental Assessment with the addition of the pilot facility at St Marys STP and some changes to sections of the concentrate pipeline route between Seven Hills and Vineyard Creek, Dundas (none of which are relevant to the discharges from Penrith STP into Boundary Creek) (s 4.5.1).

81. The description of the preferred project included, amongst others, the following components:

“- An AWTP at the St Marys STP site for the treatment of the tertiary treated effluent from Quakers Hill, Penrith and St Marys STP… The AWTP would produce up to 50ML/day of highly treated recycled water for discharge to the Hawkesbury-Nepean River downstream of Penrith Weir, and about 8ML/day of a concentrate for discharge to the Northern Suburbs Ocean Outfall Sewer (NSOOS).

- a pipeline for the transfer of tertiary treated effluent from Penrith STP to the AWTP at the St Marys STP site

- a pipeline for the transfer of tertiary treated effluent from Quakers Hill STP to the AWTP at the St Marys STP site

- a pipeline for the transfer of recycled water produced by the AWTP at St Marys STP to the Penrith STP

- discharge of the replacement flows to the Hawkesbury-Nepean River, via the Penrith STP discharge to Boundary Creek, immediately downstream of Penrith Weir” (s 4.5.2).

82. Chapter 5 provided details of the revised Statement of Commitments for the Replacement Flows Project. The Statement of Commitments was revised in response to submissions (in Chapter 3) and the proposed changes to the project (in Chapter 4). There was no change to draft commitment 10 proposed in the Environmental Assessment. That commitment was renumbered as commitment 11, but otherwise the commitment topic, commitment statement and project phase remained the same.

83. Pursuant to s 75I(1), the Director-General prepared and gave to the Minister a report on the project for the purposes of the Minister’s consideration of the application for approval to carry out the project. The Director-General’s report included, as required by s 75I(2)(a), Sydney Water’s Environmental Assessment and Preferred Project Report. Appendix B to the Director-General’s report was the statement of commitments made by Sydney Water in the Preferred Project Report. The Director-General’s report recommended that the Minister approve the project application subject to the recommended conditions of approval in Annexure A.

84. Pursuant to s 75J(1) and (4), on 20 June 2007, the Minister approved the carrying out of the project on the conditions recommended by the Director-General. In formal terms, the approval stated that the Minister approved the project referred to in Schedule 1, subject to the conditions in Schedule 2.

85. The project described in Schedule 1 of the approval was as follows:

“Construction and operation of the Western Sydney Recycled Water Initiative – Replacement Flows Project, involving the interconnection of three existing sewage treatment plants and treating the available effluent from these plants via a new Advanced Water Treatment Plant (AWTP) to replace the water that is currently released from Warragamba Dam for extraction and river health purposes. The project involves the construction and operation of the following key components:

- an AWTP at the St Marys STP site for the treatment of the tertiary treated effluent from Quakers Hill, Penrith and ST Marys STP. The AWTP would produce up to 50ML/day of highly treated recycled water for discharge to the Hawkesbury-Nepean River downstream of Penrith Weir, and about 8ML/day of a concentrate for discharge to the Northern Suburbs Ocean Outfall Sewer (NSOOS);

- a pipeline for the transfer of tertiary treated effluent from Penrith STP to the AWTP at the St Marys STP site;

- a pipeline for the transfer of tertiary treated effluent from Quakers Hill STP to the AWTP at the St Marys STP site;

- a pipeline for the transfer of recycled water produced by the AWTP at St Marys STP to the Penrith STP;

- discharge of the replacement flows to the Hawkesbury-Nepean River, via the Penrith STP discharge to Boundary Creek, immediately downstream of Penrith Weir;

- a pipeline for the transfer of the concentrate from the AWTP to Quakers Hill STP;

- a storage pond at Quakers Hill STP for the temporary storage of the concentrate, when the NSOOS may not be available for discharge (during periods of extended wet weather);

- transfer of the concentrate to the NSOOS via an existing pipeline from Quakers Hill STP to Seven Hills and a new pipeline between Seven Hills and Vineyard Creek at Dundas;

- balance storages and pumping stations at Penrith, Quakers Hill and St Marys STP; and

- temporary pilot facility at St Marys STP.”

86. The conditions in Schedule 1 include conditions 1.1 and 1.5:

“1.1 The Proponent should carry out the project generally in accordance with the:

a) Major Projects Application 06_0190;

b) Environmental Assessment: Western Sydney Recycled Water Initiative – Replacement Flows Project (prepared by Sydney Water Corporation and Sinclair Knight Merz dated November 2006);

c) Preferred Project Report: Western Sydney Recycled Water Initiative – Replacement Flows Project prepared by Sydney Water Corporation and Sinclair Knight Merz dated February 2007);

d) the conditions of this approval.

1.5 The project shall be limited to the release of up to 50ML/day of highly treated recycled water (replacement flow) to the Hawkesbury-Nepean River and approximately 8ML/day of concentrate from the advanced water treatment plant to the NSOOS.”

87. This is the regulatory context in which the RFP approval was granted subject to conditions, including conditions 1.1 and 1.5, and the RFP approval needs to be construed.

88. Condition 1.1, by requiring Sydney Water to carry out the project generally in accordance with the Environmental Assessment and the Preferred Project Report, which included a draft Statement of Commitments and a revised Statement of Commitments respectively made by Sydney Water, is a condition authorised to be imposed by s 75J(5) of the EPA Act. The Minister may approve a project on such conditions as the Minister may determine: s 75J(4). These conditions may include conditions of the kind specified in s 75J(5). Pursuant to s 75J(5), “[t]he conditions of approval for the carrying out of a project may require the proponent to comply with any obligations in a statement of commitments made by the proponent…”.

89. This outcome under s 75J(5) may be achieved by the conditions directly or indirectly requiring compliance with any obligations in a statement of commitments. The conditions may directly require the proponent to comply with the statement of commitments (such as by stating in the conditions that the proponent shall carry out the project in accordance with the statement of commitments) or indirectly require the proponent to comply with the statement of commitments (such as was done in this approval by stating in the condition that the proponent shall carry out the project in accordance with a document, such as the Environmental Assessment or Preferred Project Report, that includes the statement of commitments). As I have earlier noted, the Director-General may require the proponent to include in an environmental assessment a statement of commitments the proponent is prepared to make for environmental management and mitigation measures on the site (s 75F(6)) and to submit to the Director-General a preferred project report that outlines any proposed changes to the project to minimise its environmental impact and any revised statement of commitments (s 75H(6)(b) and (c)). These statutory requirements enable inclusion of a statement of commitments in the environmental assessment and preferred project report and the imposition of conditions of approval indirectly requiring the proponent to comply with a statement of commitments by requiring the proponent to carry out the project in accordance with the environmental assessment and preferred project report that include the statement of commitments.

90. The result is that condition 1.1 of the RFP approval imposes a legally binding obligation on the proponent, Sydney Water, in carrying out the project, to comply with any obligations in the Statement of Commitments made by Sydney Water in the Environmental Assessment and the Preferred Project Report. The commitments made by Sydney Water in the Statement of Commitments are legally binding. This flows not only from the regulatory scheme under which the conditions of approval for the carrying out of the project required compliance with the Statement of Commitments, but also from the natural and ordinary meaning of the word “commits”. The word “commits” connotes a legally binding commitment or obligation: R (on the application of Skelmersdale Limited Partnership v West Lancashire Borough Council [2016] EWCA Civ 1260 at [17], [18].

91. The relevant commitment in this case is commitment 10 in the draft Statement of Commitments in the Environmental Assessment and commitment 11 in the revised Statement of Commitments in the Preferred Project Report, which are in the same terms. This commitment is expressed in a manner that identifies an express outcome that the project must achieve: “No degradation of bed or bank stability would occur within Boundary Creek downstream of Penrith STP as a result of the Project.”

92. This approach of expressing the condition in terms of an outcome or objective is an accepted manner of drafting conditions of approval: see as an example the current s 4.17(4) of the EPA Act. The commitment does not identify the process by which that outcome is to be achieved; that is left to Sydney Water to devise. This is consistent with an application of the principle of subsidiarity, which leaves to the proponent of a development or project the choice of actions that might best achieve the required outcome. The rationale is that the proponent is best placed to maximise benefits and minimise costs to develop their own solutions and responses to the environmental problem: Jeffman Pty Ltd and Lawrence Dry Cleaners Pty Ltd v Environment Protection Authority of NSW, Sydney Water Corporation and Douglas and Hilary Hutchinson [2011] NSWLEC 89 at [85].

93. The outcome in the commitment is expressed in the negative, as an outcome that is not to occur: “No degradation of bed or bank stability would occur within Boundary Creek downstream of Penrith STP as a result of the Project”. So expressed, Sydney Water’s obligation is to ensure that this outcome does not occur.

94. The modal verb “would” is used in this commitment to refer to the possibility of the outcome occurring. It is this possible occurrence of the outcome that Sydney Water is obliged under the commitment to prevent. The word “would” is not used to indicate a mere understanding or belief about the occurrence of the outcome, as Sydney Water submitted, but rather, in the context of the commitment read as a whole, directs that action be taken to ensure that the proscribed outcome does not occur in the future should approval be granted. Construed in this way, the commitment imposes an obligation on Sydney Water.

95. That this construction of the Statement of Commitments as imposing obligations on Sydney Water is reasonable is corroborated by Sydney Water’s assertion at the time it made the Statement of Commitments. In offering the Statement of Commitments in the Environmental Assessment, Sydney Water asserted: “Following project approval, Sydney Water and its contractors will be required to deliver and operate the Project in accordance with these commitments.” This is a recognition that the Statement of Commitments impose legally binding obligations.

96. The evidence establishes that Sydney Water has failed to comply with this obligation in the commitment. Degradation of bed or bank stability within Boundary Creek downstream of Penrith STP has occurred as a result of the project. As I have found earlier, discharges under the Replacement Flows Project are at least one of the three causes, and probably the dominant cause, of erosion of the bank of Boundary Creek within Williams’ land. This erosion is a form of degradation of bed and bank stability within Boundary Creek, in the sense in which the word “degradation” is used in the commitment. Insofar as the discharges under the Replacement Flows Project have caused degradation of Boundary Creek in addition to any degradation caused by the other two sources of flows in Boundary Creek, Sydney Water has not complied with the obligation in the commitment.

97. This failure to comply with the commitment, which is commitment 10 in the draft Statement of Commitments in the Environmental Assessment and commitment 11 in the revised Statement of Commitments in the Preferred Project Report, results in Sydney Water not carrying out the project generally in accordance with the Environmental Assessment and the Preferred Project Report, in breach of condition 1.1.

98. The qualifying adverb in condition 1.1 that Sydney Water must carry out the project “generally” in accordance with the Environmental Assessment and Preferred Project Report does not afford any latitude or permit any deviation having regard to the terms in which the obligation in the commitment is expressed. Either there is degradation of Boundary Creek or there is no degradation of Boundary Creek as a result of the Project; there can be no degrees of degradation. Thus, Sydney Water carries out the project either in accordance with this commitment (so that there is no degradation of Boundary Creek as a result of the project) or not in accordance with the commitment (because there is degradation of Boundary Creek as a result of the project); there can be no “general” accordance with the commitment.

No breach of condition 1.5 of the RFP approval established

99. The situation with condition 1.5 of the RFP approval is different. The breach of condition 1.5 alleged by Williams is dependent on construing condition 1.5 as capping all flows released from Penrith STP to the Hawkesbury-Nepean River via Boundary Creek and not just the highly treated recycled water under the Replacement Flows Project. This is because the evidence is that, although on occasions of high rainfall up to 238ML/day of liquid has been discharged from Penrith STP into Boundary Creek, of that volume no more than 50ML/day comprised highly treated recycled water under the Replacement Flows Project. On this evidence, Sydney Water would not have breached condition 1.5 if that condition only limits the release of highly treated recycled water to the Hawkesbury-Nepean via Boundary Creek.

100. I find that condition 1.5 should be construed in this manner. First, condition 1.5 states that “the project” is limited to the release of up to 50ML/day. The “project” is described in Schedule 1 of the RFP approval. This is the project that the Minister approved. The project described in Schedule 1 is the Replacement Flows Project.

101. One of the components of this project, as described, is the Advanced Water Treatment Plant at St Marys STP, which is described as producing “up to 50ML/day of highly treated recycled water for discharge to the Hawkesbury-Nepean River.” The volume of 50ML/day is therefore the volume of highly treated recycled water produced by St Marys AWTP. This highly treated recycled water constitutes the “replacement flows” that are to be discharged into the Hawkesbury-Nepean River. This discharge of the replacement flows to the Hawkesbury-Nepean River is to be “via the Penrith STP discharge to Boundary Creek”, which is another component of the project as described.

102. Secondly, condition 1.5 limits the volume of liquid that can be released to “50ML/day”. As noted, this volume is the same volume of highly treated recycled water as is produced by the St Marys AWTP.

103. Thirdly, condition 1.5 defines the nature of the liquid to be released as being “highly treated recycled water”. Only the AWTP at St Marys STP produces “highly treated recycled water”. Penrith STP produces “tertiary treated effluent”. The project involves the treatment at St Marys AWTP of the tertiary treated effluent that has been transferred from Penrith STP. To this end, the project involves the construction of a pipeline for the transfer of tertiary treated effluent from Penrith STP to St Marys AWTP and the construction of a further pipeline for the transfer of the highly treated recycled water produced by St Marys AWTP to Penrith STP. The project describes the discharge of only this “highly treated recycled water”, being the recycled water produced by St Marys AWTP, and not any “tertiary treated effluent” from Penrith STP.

104. Fourthly, no different conclusion is reached from reading condition 1.5 in the context of the other conditions of the RFP approval, including condition 1.1. The Major Projects Application, Environmental Assessment and Preferred Project Report, referred to in condition 1.1, all describe the Replacement Flows Project. I have quoted earlier the relevant parts of these descriptions of the project. With few exceptions, these descriptions are consistent with the construction of condition 1.5 I have given. The maximum volume of 50ML/day of liquid authorised to be released into Boundary Creek from Penrith STP refers to the highly treated recycled water produced by St Marys AWTP, as this constitutes the replacement flows to the Hawkesbury-Nepean River via the Penrith STP discharge to Boundary Creek. The few places where brief reference is made to 50ML/day being an aggregate of all discharges from Penrith STP are inconsistent with the fuller descriptions of the project that confine that maximum volume to the release of highly treated recycled water produced by St Marys AWTP.

105. If condition 1.5 is construed in this manner, Williams has not established that Sydney Water has breached condition 1.5. The evidence does not establish that Sydney Water has released more than 50ML/day of highly treated recycled water to the Hawkesbury-Nepean River via Penrith STP discharge to Boundary Creek. The discharge of tertiary treated effluent from Penrith STP to Boundary Creek, in whatever volume, is not regulated by condition 1.5 and cannot lead to a breach of condition 1.5 by the aggregate volume of the highly treated recycled water from St Marys AWTP and tertiary treated effluent from Penrith STP exceeding 50ML/day.

Breach of s 75D(2) of the EPA Act

106. Sydney Water, in carrying out the Replacement Flows Project in breach of condition 1.1 of the RFP approvals, has breached s 75D(2) of the EPA Act. That subsection requires a person, carrying out a project that the Minister has approved under Part 3A, to comply with any conditions to which such an approval is subject.

The claimed breach of the POEO Act

107. The second claimed breach of a planning or environmental law is that Sydney Water has polluted land in breach of s 142A(1) of the POEO Act. That section states simply that: “A person who pollutes land is guilty of an offence.”

270. Although this sense of negligence used in the test of inevitability differs from negligence as a cause of action, there will nevertheless be a close relationship on the facts between the two concepts: Melaleuca Estate Pty Ltd v Port Stephens Council at [50]. If a plaintiff establishes that a defendant, in carrying out an activity, is liable in negligence, the facts so proved are likely to make it difficult for the defendant to establish that it carried out the activities with all reasonable regard and care for the interests of other persons. This is not to conflate the two tests; it is simply a recognition that proof of the failure to exercise reasonable care for the purpose of establishing liability in the cause of action of negligence is likely to raise difficulties in proving that there was no failure to exercise reasonable care for the purpose of establishing the test of inevitability in the defence of statutory authority.

271. In the present case, it is for Sydney Water to show that it could not operate Penrith STP and St Marys AWTP or carry out the Replacement Flows Project, or discharge treated effluent from Penrith STP into Boundary Creek, without causing the harm of erosion of the bank of Boundary Creek within Williams’ land, which founds the liability in negligence or nuisance. Sydney Water has not established that either these general activities or the particular activity of the discharge could not be carried out without causing this harm of downstream bank erosion in Boundary Creek.

272. Downstream bank erosion is not an inevitable consequence of the authorised discharge of treated effluent from Penrith STP into Boundary Creek that the exercise of reasonable care could not have avoided. As I have earlier found, a reasonable person in Sydney Water’s position would have taken precautions to have prevented or mitigated the risk of harm by the discharged treated effluent eroding the bank of Boundary Creek within Williams’ land. One precaution that Sydney Water could have taken was to change the point of discharge of the treated effluent to the Nepean River, so as to be at Wallacia Bridge rather than into Boundary Creek. This would have required modification of the RFP approval and the environment protection licences, so as to permit the discharge of treated effluent at this point. But this does not alter the fact that Sydney Water could have sought to carry out the activity of the Replacement Flows Project in a different way so as to avoid the risk of harm of erosion of the bank of Boundary Creek within Williams’ land. Another precaution that Sydney Water could have taken, if the point of discharge were to remain as being into Boundary Creek as permitted by the RFP approval and the environment protection licences, was to undertake bank stabilisation and protection works to prevent and mitigate erosion of the bank of Boundary Creek within Williams’ land by the discharged effluent.

273. Sydney Water, accordingly, has not established that the harm caused of erosion of the bank of Boundary Creek within Williams’ land was an inevitable consequence of the carrying out of the activities of operating Penrith STP and St Marys AWTP and the Replacement Flows Project and discharging treated effluent from Penrith STP into Boundary Creek. This harm could have been avoided by the exercise of reasonable care in the carrying out of those activities and in discharging the treated effluent.

274. For these reasons, Sydney Water has not established the defence of statutory authority so as to relieve it of liability for its breach of the duty of care under s 177 of the Conveyancing Act.

Claim in nuisance

291. If s 177 of the Conveyancing Act does not apply, Williams claims that the discharge of treated effluent from Penrith STP into Boundary Creek and the resulting erosion of Williams’ land amounts to a nuisance at common law.

292. Nuisance is an unreasonable interference with the use and enjoyment of one person’s land by the use of another person’s land: Melaleuca Estates Pty Ltd v Port Stephens Council (2006) 143 LGERA 319; [2006] NSWCA 31 at [22]; Gales Holdings Pty Ltd v Tweed Shire Council at [132]. Whether there has been “unreasonable interference” is to be determined objectively by considering the ordinary usages of people living in a particular society: Gales Holdings Pty Ltd v Tweed Shire Council at [132]. Fault of some kind must be established (Robson v Leischke (2008) 72 NSWLR 98; [2008] NSWLEC 152 at [44]-[46] and Gales Holdings Pty Ltd v Tweed Shire Council at [132]), although it is not necessary to establish negligence (Elston v Dore (1982) 149 CLR 480 at 487-488; [1982] HCA 71). The type of fault required to establish nuisance depends on whether the wrongdoer created the nuisance or rather adopted or continued the nuisance: Robson v Leischke at [47]-[53].

Williams’ argument of nuisance

293. Williams submits that establishing fault in this case involves proving only foreseeability of harm and material damage to property: Quick v Alpine Nursery Sales Pty Ltd [2010] NSWSC 1248 at [141], [142], [147]. Damage to land occasioned by the presence of unpolluted stormwater runoff is an accepted form of nuisance: Gales Holdings Pty Ltd v Tweed Shire Council at [174].

294. Williams submits, having regard to the experts’ agreement that parts of the bank of Boundary Creek within Williams’ land have eroded, there can be no dispute that there has been material damage to Williams’ land. Equally, there can be no dispute that Sydney Water was aware that discharges from Penrith STP have flowed onto Williams’ land and that there has been erosion of Williams’ land. Williams submits that, from the time Sydney Water prepared the Environmental Assessment for the Replacement Flows Project and subsequently the Preferred Project Report, both of which included a Statement of Commitments, including commitment 11, the risk of erosion of the banks of Boundary Creek within Williams’ land as a result of the discharges from Penrith STP was reasonably foreseeable to Sydney Water. Such conduct amounts to nuisance that Sydney Water has failed to abate.

295. Williams again disputes that s 43A of the Civil Liability Act affords Sydney Water a defence to liability in nuisance, for the reasons it gave in relation to the claim in negligence under s 177 of the Conveyancing Act. Sydney Water’s liability in nuisance cannot be said to be “based on” Sydney Water’s exercise, or failure to exercise, any “special statutory power” conferred on Sydney Water. However, even if s 43A were to be engaged, Sydney Water’s act or omission involving an exercise of, or failure to exercise, a special statutory power was, in the circumstances, so unreasonable that no authority having the special statutory power could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power.

296. Williams also contests the applicability of the common law defence of statutory authority. The common law defence of statutory authority requires, in order to be engaged, that there be specific statutory authority to carry out the activity of discharging the treated effluent into Boundary Creek. Williams submits that the discharges from Penrith STP into Boundary Creek have contravened both the RFP approval and the environment protection licences by Sydney Water discharging more than 50ML/day in contravention of the conditions of the approval and the licences.

Sydney Water’s argument that no nuisance

297. Sydney Water disputes that it has committed a nuisance in discharging treated effluent from Penrith STP into Boundary Creek. Sydney Water submits that Williams has not established factual causation, that the discharges of treated effluent from Penrith STP have caused unreasonable interference with the use and enjoyment of Williams’ land. Williams has not proven that the alleged erosion of the bank of Boundary Creek within Williams’ land would not have occurred but for the Penrith STP discharges or that such erosion would not have produced the same impacts upon Williams’ use and enjoyment of its land as are evident or anticipated.

298. Furthermore, in order to establish an actionable nuisance, Williams needs to establish fault, which effectively requires a failure on the part of Sydney Water to exercise reasonable care: Robson v Leischke at [48], [52], [53] and Quick v Alpine Nursery Sales Pty Ltd at [142]-[147]. Sydney Water submits that no fault has been established, for the reasons it gave in relation to the claim in negligence under s 177 of the Conveyancing Act.

299. Alternatively, if liability in nuisance is established, Sydney Water contends that the common law defence of statutory authority relieves it from liability. The defence of statutory authority is available where the operations of a public authority, here Sydney Water, arise from the non-negligent performance by it of a duty imposed by statute: Marcic v Thames Water Utilities Ltd [2002] QB 929 at 988; Melaleuca Estates Pty Ltd v Port Stephens Council at [49].

300. Sydney Water submits that it was not negligent in the performance of its statutory functions, for the reasons it gave earlier. Sydney Water acted in accordance with the RFP approval and environment protection licences in discharging treated effluent from Penrith STP into Boundary Creek. The approval and the licences provided statutory authority for the discharges.

Nuisance claim not maintainable

301. I have found that Sydney Water is liable in negligence under s 177 of the Conveyancing Act for removing the support provided by the supporting land of the lower bank of Boundary Creek within Williams’ land to the supported land above and behind the lower bank. By dint of s 177(8) of the Conveyancing Act, Williams’ right at common law to bring an action in nuisance against Sydney Water in respect of this removal of the support provided by the supporting land to the supported land has been abolished. The only cause of action Williams can maintain is that in negligence for breach of the duty of care in relation to the support for Williams’ land under s 177. Accordingly, there is no utility in determining Williams’ claim in nuisance that Sydney Water’s actions of discharging treated effluent into Boundary Creek led to the erosion of the lower bank of Boundary Creek in Williams’ land, thereby removing the support provided by the lower bank to the land above and behind the lower bank. That claim in nuisance is not maintainable.

Relief for established breaches of the law

302. I have found that Williams has established two claims: first, that Sydney Water has breached s 75D(2) of the EPA Act by carrying out the Replacement Flows Project not in accordance with condition 1.1 of the conditions to which the RFP approval is subject and, secondly, that Sydney Water is liable in negligence for breaching its duty of care in relation to support for land under s 177 of the Conveyancing Act. The question that now arises is the relief that should be granted to remedy and restrain these breaches.

303. Williams seeks injunctive orders to remedy the breaches. In its amended summons commencing the proceedings under s 9.46 of the EPA Act, Williams sought orders, firstly, restraining Sydney Water from breaching s 75D (2) of the EPA Act by failing to comply with condition 1.1 of the RFP approval, which required that, throughout the operation of the Replacement Flows Project, no degradation of bed or bank stability would occur within Boundary Creek downstream of Penrith STP as a result of the project and, secondly, remedying the degradation of bed and bank stability within Boundary Creek downstream of Penrith STP, including the erosion of Williams’ land and other parts of Boundary Creek downstream of Penrith STP.

304. In its summons commencing the proceedings for breach of the duty of care under s 177 of the Conveyancing Act and for nuisance, Williams sought the following orders:

“1. An order that the Defendant forthwith do all such things, and perform all such acts, as are necessary to prevent further damage to the land owned by the Plaintiff comprised in Folio Identifier 441/1092750 and situated at 44 Jack Williams Drive, Penrith (Plaintiff’s Land) caused by the discharge of water from the Penrith Sewerage Treatment Plan[t] operated by the Defendant upon the land comprised in Folio Identifier 110/774782 also owned by the Defendant (the Penrith STP).

2. An order that the Defendant forthwith do all such things, and perform all such acts, as are necessary to abate the nuisance to the Plaintiff’s Land caused by the discharge of water from the Penrith STP, including by repairing, making good and rectifying by appropriate works the damage to the Plaintiff’s Land caused by the said discharge.”

305. In closing submissions, Williams refined the remedial orders it sought in both proceedings to be:

“1. Intercept and convey Penrith Sewage Treatment Plant (STP) flows in a stable and safe manner through the portion of Boundary Creek between Castlereagh Road and the Nepean River, including provision of a stable outlet structure that does not cause erosion.

2. Undertake the necessary works to realign Boundary Creek and restore parts of the land within the JKW Land that have been lost.

3. Undertake the necessary works to restore the vegetation of Boundary Creek with suitable endemic species to maintain and improve bank stability while requiring minimal ongoing maintenance.

4. Undertake any works necessary or incidental to the implementation of the works described above, including the clearing of vegetation, the construction of gabions and works to enable the temporary diversion of flows from the STP.

5. Within 6 months of the date of the Court’s orders, prepare all necessary environmental and planning investigations/reports which would be required to obtain statutory approvals for the carrying [out] of the works.

6. Take steps to obtain all necessary statutory approvals for the carrying [out] of the works.

7. The works described above must be carried out and completed within 24 months of the date of the Court’s orders.”

306. Williams submits that the Court should make such injunctive orders to restrain the ongoing breaches of the EPA Act and the duty of care in relation to support for land. Williams accepted that the Court has a wide discretion to make such orders as it thinks fit under s 9.46 of the EPA Act to remedy or restrain the breach of the EPA Act, and to grant the equitable remedy of an injunction to remedy and restrain the breach of the duty of care under s 177 of the Conveyancing Act.

307. The discretionary power to grant relief under s 9.46 of the EPA Act is to be exercised having regard to the factors collected by Kirby P in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339-341, and weighing up “all relevant factors – not only the public interest, but also the rights and interests of the parties, including matters of conduct, hardship and convenience”: Rowley v NSW Leather Trading Co Pty Ltd and Woollahra Municipal Council (1980) 49 LGRA 250 at 261.

308. Williams submits that the relevant discretionary considerations point in favour of granting the injunctive relief sought, including that:

“(i) significant parts of the JKW Land have been (and continue to be) eroded away (and at a more increasing rate since the commencement of the RFP flows in 2010); (ii) the natural process of meandering migration of the channel is being accelerated by the discharges from Penrith STP and (iii) the ongoing collapse of the Boundary Creek embankment within the JKW Land puts at risk the stability of the buildings and other structures on the land and, in turn, poses a safety threat to persons who work or visit the JKW Land (as evidenced by the barricade (temporary fence placed near the edge of the plateau…)”.

309. Williams submits that the fact that the work which would be required to be undertaken by the Court’s orders would, but for the Court’s orders, require development consent is not a barrier to the Court ordering that the work be undertaken: Anastasiou v Wallace [2020] NSWLEC 14 at [42]-[51] and F Hannan Pty Ltd v Electricity Commission of New South Wales (No 3) (1985) 66 LGRA 306 at 311-313.

310. Sydney Water contests that injunctive relief should be granted. Sydney Water submits that, if there has been degradation of bed or bank stability of Boundary Creek consequent upon implementation of the Replacement Flows Project, discretionary considerations tell against the grant of injunctive relief. Sydney Water referred to Kirby P’s statement in ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 82 that the discretion under s 124, now s 9.46, to grant relief to remedy or restrain a breach of the EPA Act “is a mollifying one. It permits, in an appropriate case, the refusal of injunctive relief where to grant such relief, would work such an injustice as to be disproportionate to the ends secured by enforcement of the legislation including by injunction”: see also Northern Residential Pty Ltd v Newcastle City Council (2009) 75 NSWLR 192; [2009] NSWCA 141 at [64] and F Hannan Pty Ltd v Electricity Commission of NSW (No 3) at 311-313.

311. Sydney Water submits that, applying these considerations to the present case, any relief to be granted should be proportionate to the degradation of bed and bank stability of Boundary Creek found to be linked to Sydney Water’s operation of Penrith STP and carrying out of the Replacement Flows Project. This submission was premised on Sydney Water’s earlier submission that Sydney Water’s discharge of treated effluent from Penrith STP into Boundary Creek did not cause any degradation of bed and bank stability of Boundary Creek downstream of Penrith STP. I have rejected that submission, finding that the discharges are a dominant cause of the erosion of the bank of Boundary Creek in Williams’ land. That finding thereby establishes that at least some of the degradation of Boundary Creek is linked to Sydney Water’s operation of Penrith STP and the carrying out of the Replacement Flows Project.

312. In that circumstance, Sydney Water alternatively contends that it should not be ordered to remediate all of the degradation of Boundary Creek because to do so would not be proportionate to the lesser degradation that Sydney Water has caused. Any injunctive relief the Court orders should therefore be tailored to fit the degradation caused by Sydney Water.

313. In closing submissions, both Williams and Sydney Water accepted that if the Court finds Sydney Water has breached the law in some respect, that such breach has caused degradation of Boundary Creek and that it is appropriate to grant some form of injunctive relief to remedy the breach, the appropriate course may be to allow the parties the opportunity to address further on the terms of the injunctive relief that they contend should be granted. I agree this course is appropriate.

314. I have found that Sydney Water has breached the EPA Act and its duty of care in relation to support under s 177 of the Conveyancing Act and that those breaches are a cause of the erosion of the bank of Boundary Creek in Williams’ land. I find, as Williams has submitted, that discretionary considerations favour granting injunctive relief to restrain future breaches and to remedy past breaches of the EPA Act and the duty of care under s 177 of the Conveyancing Act. The breaches have resulted in significant erosion of the bank of Boundary Creek in Williams’ land, which erosion will continue unless measures are taken to prevent or mitigate erosion. These measures could include the remedial works suggested by Williams, but Sydney Water might wish to suggest other measures that will be effective to stabilise the bank and prevent or mitigate erosion of the bank.

315. I will give directions to the parties to propose, within specified times, the orders they consider appropriate to remedy and restrain the breach of the EPA Act and the duty of care in relation to support of land under s 177 of the Conveyancing Act and I will thereafter determine the orders the Court should make.

309. In the meantime, I consider it appropriate to make a declaration of the breach of public law, the breach of the EPA Act, but not a declaration of the breach of the duty of care in relation to support of land.

310. As to the question of costs of the proceedings, ordinarily costs should follow the event. Williams has been successful in establishing one of the breaches of law claimed in each of the proceedings, a breach of the duty of care under s 177 of the Conveyancing Act claimed in the summons commencing proceedings in the Supreme Court that were transferred to this Court and a breach of the EPA Act claimed in the summons commencing proceedings in this Court, and in obtaining relief in relation to those breaches. This should entitle Williams to an order for costs in its favour. I will defer making a costs order, however, until after the issue of the injunctive relief that should be granted is determined. If the parties wish to contend for a costs order different to the usual order for costs that Sydney Water pay Williams’ costs of both proceedings, they should include that submission in their submissions on the injunctive relief that should be granted.

311. The Court:

1. Declares that Sydney Water Corporation has breached s 75D(2) of the Environmental Planning and Assessment Act 1979 (EPA Act), by carrying out the development of the Western Sydney Recycled Water Initiative – Replacement Flows Project (the Project) in breach of condition 1.1 of the approval granted by the Minister for Planning under s 75J of the EPA Act on 20 June 2007 for the carrying out of the Project.

2. Directs the parties to file and serve submissions on the orders that the parties contend the Court should make by way of prohibitory or mandatory injunctions, and any submissions the parties wish to make on the costs order the Court should make, in accordance with the following timetable:

1. The applicant to file and serve its submissions by 1 April 2021.

2. The respondent to file and serve its submissions by 15 April 2021.

3. The applicant to file and serve its submissions in reply by 22 April 2021.

3. Grants leave to each party to relist the matter in order to fix a date for hearing if a party wishes to have a hearing on the issues of the injunctive orders or the costs order the Court should make.

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Decision last updated: 18 March 2021