Melaleuca Estate Pty Ltd v Port Stephens Council

Melaleuca Estate Pty Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of Cripps AJ in the Supreme Court of New South Wales. The dispute concerned a claim by the appellant that the respondent, Port Stephens Council, was maintaining a nuisance by discharging stormwater onto the appellant's land. The discharge originated from development and drainage works approved and carried out by the Council in the 1970s and 1990s.

The Court of Appeal was required to determine whether the discharge of stormwater onto the appellant's land constituted a nuisance, and if so, whether the Council was liable for that nuisance. Specifically, the Court considered whether the Council had acted without regard for the landowner's interests and whether statutory defences under the *Local Government Act 1919* (NSW) and the *Local Government Act 1993* (NSW) were available to the Council.

The Court found that the Council was liable for the nuisance. It reasoned that while the Council had statutory power to carry out drainage works, this power did not extend to causing a nuisance to adjoining landowners. The Court held that the Council had not acted in good faith in carrying out the works, as it had not adequately considered the impact on the appellant's land. The defence under s 241 of the *Local Government Act 1919* was not applicable, and the defence under s 733 of the *Local Government Act 1993* was also rejected.

The Court allowed the appeal, set aside the orders of the primary judge, and granted an injunction restraining the Council from continuing to discharge stormwater in excess of the natural flow onto the appellant's land. The Council was also ordered to take measures to prevent stormwater containing high levels of nutrients and waste materials from entering the land. However, the injunction was stayed for eighteen months to allow the Council to implement a new drainage system. The Council was ordered to pay the appellant's costs of the trial and the appeal.