Mills v Department of Land and Water Conservation

[1999] NSWLEC 184

Reported Decision: 104 LGERA 399

Land and Environment Court

of New South Wales

CITATION:

Mills and Ors V Department of Land and Water Conservation and Anor [1999] NSWLEC 184

PARTIES

APPLICANTS:
Mills and Ors

RESPONDENT:
Department of Land and Water Conservation and Anor

NUMBER:

30162 of 1997

CORAM:

Bignold J

KEY ISSUES:

Practice & Procedure :- Practice and Procedure:- Nature of appeal to Court from decision of Local Land Board under Water Act s 174. True meaning of the "statutory condition" in duty to determine application for approval of a "controlled work".

LEGISLATION CITED:

Water Act 1912 s 171, s 174.

DATES OF HEARING:

12/11/1998; 12/14/1998; 12/15/1998; 03/16/1999; 03/25/1999

DATE OF JUDGMENT DELIVERY:

08/05/1999

LEGAL REPRESENTATIVES:

APPLICANTS:
Mr F Donohue (Barrister)
SOLICTORS:
Callachor and Helby

FIRST RESPONDENT:
Mr M Hadley (Barrister)
SOLICITORS:
Department of Land and Water Conservation

SECOND RESPONDENT:
Mr W R Davison (SC)
SOLICITORS:
McIntosh McPhillamy and Co

JUDGMENT:

TABLE OF CONTENTS

A. INTRODUCTION 1-12
B. THE DISPUTED QUESTION OF STATUTORY CONSTRUCTION 13-25
C. THE TRUE MEANING OF THE STATUTORY PROVISIONS FOR THE DETERMINATION OF AN APPLICATION FOR APPROVAL FOR A CONTROLLED WORK 26-52
D. THE APPLICANTS’ ATTACK ON THE LOCAL LAND BOARD’S
DECISION 53 -71
E. HAVING SET ASIDE THE BOARD’S DECISION, HOW SHOULD THE COURT EXERCISE ITS APPEALLATE FUNCTION? 72-86
F. THE RESPONDENTS' RELIANCE UPON THE WATER ACT S 4A 87-93
G. CONCLUSIONS AND ORDERS 94-95

IN THE LAND AND Matter No. 30162 of 1997

ENVIRONMENT COURT OF Coram: Bignold J.

NEW SOUTH WALES 5 August 1999

GRANT MILLS, COLIN GLASSON, GEORGE DOYLE BASIL TOOHEY MARIANNE TOOHEY

Applicants

v.

DEPARTMENT OF LAND AND WATER CONSERVATION

First Respondent

ENGSTA PTY LIMITED

Second Respondent

JUDGMENT

Bignold J:

A. INTRODUCTION

1. This is an appeal pursuant to the Water Act 1912 s 174(4) (the Act) against the decision of the Local Land Board (being the relevant “prescribed tribunal”) given on 24 November 1997 confirming a determination made by the Ministerial Corporation pursuant to the Act s 171 on 26 July 1995 granting approval to an application made in respect of a “controlled work” being an existing levee bank constructed in 1959/1960 on the southern bank of the Lachlan River on a property “Buyuma” now owned by the Second Respondent, shutting out certain levels of flood waters from entering and traversing that property along the natural depression known as the “Buyuma flood runner”.

2. Each of the Applicants were persons who had either lodged objections against the application for approval pursuant to the Act s 170 and/or who had appeared before, and made submissions to, the Local Land Board in its conduct of the inquiry that had been referred to it by the Ministerial Corporation pursuant to the Act s 171(5).

3. At an interlocutory stage in the present proceedings, the parties brought before the Court the question of the true nature of the appeal to the Court. Talbot J determined the Motion brought by the second Respondent in a judgment delivered on 4 December 1998, holding that an appeal to this Court, pursuant to s 174(4) of the Act involved a hearing de novo. His Honour’s reasons for judgment contained the following additional observations
27. Whether the Court relies on the record of the earlier proceedings, either in whole or in part, is a matter to be decided according to the circumstances of each case. Hopefully in the majority of cases, this will be pursuant to an agreement reached by the parties.
28. Similarly, whether fresh evidence or different evidence or additional evidence is given must be decided on a case by case basis.
29. It is open for the Court to rely on evidence which is a combination of the above.

4. When the hearing of the appeal commenced before me, the Second Respondent, supported by the First Respondent, urged me to reconsider the question, submitting that the true nature of the appeal did not involve a hearing de novo.

5. Over the Applicants’ objection, I entertained the Second Respondent’s Motion, being conscious that I had some years earlier in Tandou Ltd v Western Lands Commission (1996) 92 LGERA 16 at 20,expressed the view (albeit in an obiter dictum) in respect of an appeal pursuant to the Western Lands Act 1901 s 9(6)(a) to this Court from the decision of the Local Land Board that it did not involve an appeal by way of a de novo hearing, but involved an appeal by way of re-hearing—at 20.

6. Both Respondents contended that the view I had expressed in Tandou should be adopted and was consistent with the analysis of relevant principles discussed in the decision of the Court of Appeal in Workers’ Compensation (Dust Diseases) Board v Veskans (1993) 32 NSWLR 221 cited in argument by the Second Respondent (but it seems not referred to when the matter was before Talbot J).

7. With the benefit of hearing full argument, I was reinforced in the correctness of my obiter view expressed in Tandou. Accordingly, I held that the appeal did not involve a hearing de novo, but was an appeal by way of re-hearing.

8. However, in giving that ruling, I emphasised that it did not deal with the quite separate question of whether the Court would allow fresh evidence to be given in addition to the evidence that had been given before the Local Land Board . In so ruling, I had in mind a long line of authority in the former Land and Valuation Court in respect of its discretion to allow further evidence in proceedings by way of appeal or reference from local land boards. In the course of argument, I mentioned some of these decisions, a number of which are cited in the judgment of Else-Mitchell J in Boiadjeff v The Minister (1962) 8LGRA 68.

9. I addressed this further question because I was aware that all of the parties had filed further expert evidence in the proceedings in this Court, in the case of the Respondents, by way of response to further evidence which the Applicants wished to adduce.

10. After so ruling, the parties agreed to the conduct of the appeal in the following manner (cf Superintendent of Licences v Ainsworth Nominees Pty Ltd (1987) 9 NSWLR 692):
(i) The Court should determine, on the basis of the evidence received by the Local Land Board whether the Board fell into material legal or factual error such that its decision could not be allowed to stand; and
(ii) If necessary, to consider the appeal on the basis of any further evidence that might be admitted by this Court.

11. This two staged procedure was adopted (despite it appearing to be somewhat cumbersome) because of its obvious potential to save time and costs in the sense that if the Applicants succeeded in their appeal against the Board’s decision on the basis of the evidence adduced by the Board, there would be no need for this Court to hear further evidence. A further significant benefit was perceived to be that the Court would be called upon to interpret the meaning of some key provisions of the Act which appear to govern or control (i) the discretion of the Ministerial Corporation in determining an application for approval of a controlled work; and (ii) the powers of the Local Land Board on a reference of such an application from the Ministerial Corporation.

12. Since the determination of those questions of statutory construction was in no way dependent upon the evidence (whether that adduced before the Local Land Board or by further evidence that might be adduced in the proceedings before this Court) it was generally considered desirable that the task of statutory construction be undertaken in the first stage of the adopted procedure for the hearing of the appeal.

B. THE DISPUTED QUESTION OF STATUTORY CONSTRUCTION

13. The disputed question did not arise before the Local Land Board (which proceeded on the common assumption that had been adopted by the parties).

14. That assumption was that the issue for determination by the Local Land Board was whether the “controlled work” (for which approval had been granted by the First Respondent) “is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work”: vide the Act s 171(3).

15. Allied to that common assumption was the further assumption that it was the objectors who bore the onus of establishing such an effect by the controlled work.

16. It is tolerably clear from the reasons for decision of the Local Land Board that it reached its decision on the understanding that the issue before it was whether the objectors had shown that the approved work was “likely to affect, materially and prejudicially, the distribution of flood waters”. Thus, at p 5, the Board said after reciting the Water Act s 171 and s 174:

It is clear from those provisions of the Act, that in making a decision, the test that the Board must apply is whether or not the controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work .

17. At p 8, the Board said that this was the “ real issue ”.

18. Finally, the Board at p 13, expressed its conclusions as follows:

Whilst the Board accepts that the Buyuma levee bank, has an impact on the flood waters in the vicinity of the works, the Board is not satisfied that the impact would be likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work.

Accordingly the Board confirms the Determination, under s 174(1)(a) of the Water Act.

19. Notwithstanding the manner in which the proceedings had been conducted before the Local Land Board, and notwithstanding the expressed basis for the Board’s determination, both Respondents submitted to this Court that that approach betrayed a serious misunderstanding of the relevant provisions of the Water Act Pt 8 governing the determination of an application for approval for a controlled work.

20. Both Respondents submitted that the relevant statutory phrase that I have recited was not central to the statutory discretion conferred by the Water Act upon the Ministerial Corporation in its determination of an application for approval for a controlled work or upon the discretion vested in the Local Land Board in respect of a referred determination. Rather, both Respondents submitted that the relevant statutory phrase only operated to limit the statutory discretion conferred upon the Ministerial Corporation to (i) impose conditions on the grant of approval; or (ii) to refuse to grant approval.

21. These submissions were advanced by the Respondents, I suspect to guard against a decision favourable to the Applicants that the Local Land Board fell into material legal or factual error in its decision, but that the decision was nonetheless sustainable if this Court were to apply to that decision the true meaning of the relevant provisions of the Water Act governing the Board’s function in respect of a referred determination from the Ministerial Corporation.

22. This is an intrinsically difficult argument to sustain because, as I have read, and re-read, the Board’s reasons for decision, it is clear that the “test” that it propounded, based upon the relevant statutory phrase, essentially directed and controlled its inquiry and its findings and its decision. By removing the “test”, the Board’s decision is barely comprehensible.

23. Be this as it may, a further and more cogent aspect of the Respondents’ submissions is that in discharging its appeal function, this Court must apply the true meaning of the relevant provisions of the Water Act, notwithstanding the mistaken construction of the statutory provisions adopted by the Board.

24. At issue is the very important question whether the Water Act confers upon (i) the Ministerial Corporation (at first instance); (ii) the Local Land Board (on a referred determination); and (iii) this Court (on appeal from the decision of the Local Land Board) a discretion to grant approval to an application for approval for a “controlled work” in circumstances where it is satisfied that the controlled work “is likely to affect, materially or prejudicially, the distribution of flood waters in the vicinity of the work”.

25. I have formulated the question in that manner because it reflects, as I would understand it, the Respondents’ ultimate submission made in this case.

C. THE TRUE MEANING OF THE STATUTORY PROVISIONS FOR THE DETERMINATION OF AN APPLICATION FOR APPROVAL FOR A CONTROLLED WORK

26. Part 8, in its present form, was inserted into the Water Act by the Water (Amendment) Act 1983 (Act No 142).

27. Part 8 is headed “Control of Certain Works on River Banks and Flood Plains” and contains 22 sections.

28. Section 165 contains relevant definitions including the following:

controlled work means :

(a) an earthwork, embankment or levee, other than

(i) an earthwork, embankment or levee prescribed for the purposes of this subparagraph; or
(ii) an earthwork, embankment or levee which forms or is intended to from part of, or is or is intended to be ancillary to, a work prescribed for the purposes of this subparagraph; and
(b) any work prescribed for the purposes of this paragraph, which is situated, or proposed to be constructed, upon land that:

(c) is, or forms part of, the bank of a river or lake; or

(d) is within a flood plain,

but does not include a work or bore which has been constructed or acquired in accordance with, or in respect of which a licence, group licence, authority, permit, consent or authorisation is in force under, Part 2, 3, 5, 6 or 7;

local occupier , in relation to an application for an approval, means an occupier of land which is wholly or partly situated within the same declared local area as the land on which the controlled work the subject of the application is situated or is proposed to be constructed, but does not include a statutory authority, statutory instrumentality or government department of any State other than the State of New South Wales or a Minister of the Crown for any State other than the State of New South Wales;

29. Section 166 enables the Ministerial Corporation to designate “ flood plains ”.

30. Section 167 deals with applications for approval of a controlled work, subsection (1) providing as follows:

167. (1) An application for an approval shall :

(a) be made, in or to the effect of the prescribed form, by the occupier of the land, or the occupiers of the lands, upon which the controlled work the subject of the application is situated or proposed to be constructed;

(b)be accompanied by:

(i) the prescribed fee; and

(ii) the prescribed particulars; and

(c) be lodged with the Ministerial Corporation.

31. Section 169 provides for the publication of applications for approval for a controlled work notifying that “ objections may be made to the granting of an approval for the controlled work ”.

32. Section 170 provides for the making of objections to the granting of approval for a controlled work by inter alia, “a local occupier whose interests may be affected by the granting of such an approval”.

33. Section 171 deals with the Ministerial Corporation’s determination of such an application, subsections (1), (2), and (3) providing as follows:
171. (1) The Ministerial Corporation shall determine an application for an approval (other than an application that has been withdrawn):
(a) except as provided by subsection (2), by granting an approval for the controlled work the subject of the application, subject to such conditions (if any) as the Ministerial Corporation thinks fit to impose; or
(b) by refusing to grant an approval.

(2) The Ministerial Corporation shall not grant an approval to the applicant or applicants therefor if the whole or any part of the land upon which the controlled work the subject of the application is situated or proposed to be constructed is not occupied by the applicant, or by at least one of the applicants, as the case may be.

(3) Notwithstanding subsection (1), the Ministerial Corporation shall not:

(a) impose any condition upon an approval granted in respect of a controlled work, except where it is satisfied that, unless the controlled work complies with that condition, the controlled work complies with that condition, the controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work; or

(b) refuse to grant an approval in respect of a controlled work, except where it is satisfied that the controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work.

34. Subsection (4) requires the Ministerial Corporation to give notice to the applicant.

35. Subsection (5) provides as follows:

Where:

(a) an objection to the granting of an approval has been made under section 170 and has not been withdrawn before the application for the approval is determined; and

(b) the Ministerial Corporation determines that application by granting an approval,

the Ministerial Corporation shall, before the expiration of 28 days after it has caused notice of its determination to be served on the applicant, refer its determination, together with each such objection, to a prescribed tribunal for inquiry and report.

36. Section 172 enables an applicant to protest against the imposition of a condition on an approval and the Ministerial Corporation is required to refer the protest to a prescribed tribunal “ for inquiry and report ”.

37. Section 173 deals with the inquiries to be conducted by a prescribed tribunal “into a referred determination”. At such an inquiry, the Ministerial Corporation, the applicant, “any statutory authority or local occupier whose interests may be affected by any matter the subject of the inquiry”, shall be entitled to make submissions to the prescribed tribunal.

38. Section 174 deals with the decision of a prescribed tribunal, subsections (1), (2) and (3) providing as follows:

(1) A prescribed tribunal shall, after holding an inquiry in relation to a referred determination, decide:

(a)to confirm the determination;

(b)to vary the approval the subject of the determination:


(i)by removing from the approval any condition imposed thereon under section 171 (1) (a); or

(ii)by imposing on the approval such conditions (in addition to, or in substitution for, any condition imposed thereon under section 171 (1) (a)) as it thinks fit; or

(c)where the determination has been referred to it under section 171 (5)—to cancel the approval the subject of the determination.

(2) Notwithstanding subsection (1), a prescribed tribunal shall not

(a) impose any condition upon an approval granted in respect of a controlled work, except where it is satisfied that, unless the controlled work complies with that condition, the controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work; or

(b) cancel an approval granted in respect of a controlled work, except where it is satisfied that the controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work.

(3) Where a prescribed tribunal makes a decision in relation to a referred determination, it shall:

(a) announce its decision in open court; and

(b) as soon as practicable thereafter—report in writing upon the decision to the Ministerial Corporation.

39. Subsection (4) provides for a right of appeal to this Court —providing as follows:
(4) An appeal may be made to the Land and Environment Court, in accordance with rules of court, against any decision made by a prescribed tribunal in relation to a referred determination:

(a) by the Ministerial Corporation;
(b) by the applicant to whom the determination relates; or
(c) by any other person who has made any submission to the prescribed tribunal in relation to the determination,

before the expiration of 28 days after the announcement of the decision under subsection (3) (a).

40. Section 175 deals with the duration of an approval granted for a controlled work.

41. Section 176 deals with applications for renewal of an approval for an approved work, subsections (3) and (5) being cast in the same terms as s 171(1) and s 171(3).

42. Section 178 deals with the cancellation of approvals.

43. Section 179 deals with “the removal and modification of unapproved works”, subsections (1) and (5) providing as follows:

179. (1) Except as provided by subsections (3) and (4), the Ministerial Corporation may remove or modify any controlled work in respect of which an approval is not in force if it is satisfied that, unless the controlled work is so removed or modified, the controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work.


(5) Subsections (1) and (2):

(a) apply to a controlled work constructed before, on or after the commencement o this Part; and

(b) do not apply to a controlled work in respect of which an application for an approval has been made, other than:


(i)an application that has been withdrawn or otherwise finally disposed of; or

(ii)an application that was made after the occupier of the land upon which the controlled work is situated was served with a notice referred to in subsection (3) in relation to the work.

44. It should be noted that the relevant provisions of the Water Act s 171 and s 174 that I have recited are in their form and application unaffected by the introduction into the Act of s 171A by the Water and Environmental Planning Legislation Amendment Act 1997 (Act No 63). This is because s 171A(5) provides that s 171A “ extends to applications made (but not determined) before the commencement of this section ”, which conveys the clearest implication that the section does not apply to determinations under s 171 already made by the Ministerial Corporation (such as is the application the subject of the present proceedings).

45. There are a number of preliminary matters that should be noted at the outset. Part 8 deals with “controlled works” (i) situated or (ii) proposed to be constructed upon land that forms part of the bank of a river or lake or is within a flood plain.

46. Secondly, Pt 8 deals with controlled works which either (i) already exist or (ii) are proposed to be constructed.

47. Thirdly, there is some overlap between the Water Act Pt 8 and Pt 2—as to the latter, see the phrase “work to which this Part extends” in s 5(1).

48. The question of construction posed by s 171(1) to(3) and s 174(1) and (2) is by no means an easy one.

49. If s 171(1) and s 174(1) stood alone, the conventional interpretation of those sections, would undoubtedly be that the duty to determine the application imposed upon the Ministerial Corporation by s 171(1) and the similar duty to determine the referred determination imposed upon the prescribed tribunal by s 174(1) involved an implied discretion exercisable by reference to the objects and purposes of the Water Act (since neither section stipulates relevant considerations to the exercise of that discretion): cf Swan Hill Corporation v Bradbury (1937) 56 CLR 746; Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492.

50. However, s 171(1) is expressly subject to subsection (3) and s 174(1) is expressly subject to subsection (2). The crucial question is what is the legal effect of these subsections? Is it, as the Respondents contend (based upon a literal reading of the text) that the discretion to impose a condition on an approval or to refuse to grant an approval is only relevantly fettered or is it, as the Applicants contend, (based upon a purposive interpretation) to impose a duty (i) to impose a condition or (ii) to refuse to grant approval, in the event of the statutory condition being fulfilled?

51. Ultimately, I think that the Applicant’s interpretation is to be preferred. My reasons for so concluding are as follows (for convenience I shall hereafter simply refer to the relevant statutory phrase contained in s 171(3) and s 174(2) as the “statutory condition”):
(i) The statutory condition is a recurring theme and refrain, in the Water Act Pt 8. In addition to its place in s 171 and s 174, it is relevant to the renewal of an approval under s 176 and to the removal or modification of an “unapproved” control work under s 179;
(ii) It is obvious that in respect of the operation of each of the sections in which the statutory condition appears, the statutory condition has a decisive impact. In this respect, it is instructive to contrast the specificity of the statutory condition with the more generalised criterion (“the desirability of granting the application”) contained in the Water Act s 11(5) dealing with the determination of applications for licences under the Act Pt 2;
(iii) Upon analysis, the statutory condition appears to have the intended operation of where it is shown to exist, the Ministerial Corporation (in the case of s 171) and the prescribed tribunal (in the case of s 174) is under the duty to give effect to the statutory condition, by either (i) imposing a condition on the approval where that condition is capable of satisfying the statutory condition or (ii) refusing to grant approval where no condition is capable of satisfying the statutory condition.

This result is consistent with the reasoning expounded in Julius v Bishop of Oxford (1880) L. R5 AC 214 where Lord Selborne, speaking of a power expressed in permissive language, said at 235:

The meaning of such words is the same, whether there is or is not a duty or obligation to use the power which they confer. They are potential, and never (in themselves) significant of any obligation. The question whether a Judge, or a public officer, to whom a power is given by such words, is bound to use it upon any particular occasion, or in any particular manner, must be solved aliunde , and in general, it is to be solved from the context, from the particular provisions, or from the general scope and object of the enactment conferring the power.

(iv) To interpret the statutory condition in the suggested manner (where it controls the determination to grant or to refuse an application for a controlled work) is harmonious with that significant aspect of the scheme of Pt 8 which enables any “ local occupier ” whose interests may be affected by the granting of approval to an application for a controlled work (i) to object to the Ministerial Corporation granting approval to the application and (ii) to make submissions to the prescribed tribunal upon a referred determination and (iii) to appeal to this Court. The important statutory rights conferred upon local occupiers were clearly intended to protect their interests which are apt to be prejudiced as a result of the impact on flood waters of the existence of a controlled work. The recognition given by the Water Act to the interests of “ local occupiers ” is consistent with their common law rights (even if the operation of the Water Act is capable of abrogating those rights cf. Thorpes Limited v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317).

(v) The preferred construction is also harmonious with the common law position expounded by the Privy Council decision in R v Southern Canada Power Co Ltd (1937) 3 AllER 923 at 928:

At common law, apart from statute, the duty of one who obstructs the natural flow of a river is to prevent damage, and if damage results to any persons, he will be liable to them, irrespective of whether or not they are riparian owners.

This passage was cited with approval in the judgments of McTiernan J and Kitto J in Thorpes case

This harmony is achieved, obviously not in the sense that the ambit of the Water Act is to be confined to the common law position, but in the sense that the legislature, conscious of the capacity of the Water Act to abrogate the common law, has enacted a statutory scheme which provides for the opportunity for “controlled works” to be approved, where that scheme essentially respects and recognises the pre-existent common law position by expressly incorporating, the statutory condition as a key element of that scheme.

(vi) In contrast, the competing interpretation advanced by the Respondents does not sit harmoniously with the scheme of the Water Act Pt 8 . In particular, it does not explain why the Ministerial Corporation or the prescribed tribunal would be given the power to grant approval to an application to controlled works in the face of breach of the statutory condition. It was said by the Second Respondent that the purpose of the Water Act Pt 8 is to promote agriculture by enabling land to become available for that purpose by being protected from flooding. In my opinion, this is not the purpose or object of the Water Act Pt 8.

(vii) The logical consequence of the Respondents’ interpretation (ie that approval may be granted to an application for a controlled work even if that work attracts the statutory condition) to my mind, is a telling reason, against adopting that interpretation which on its face would be apt to produce unreasonable and unjust results which the Legislature is presumed not to have intended.

52. For all the foregoing reasons, I would hold that the Water Act s 171 and s 174 do not confer the power to grant approval to an application for a controlled work in circumstances where the statutory condition applies. Rather, in such circumstances, there is the duty imposed on both the Ministerial Corporation and the prescribed tribunal to refuse to grant approval unless it is satisfied that by imposing appropriate conditions on the grant of approval, the compliance with those conditions would avoid breach of the statutory condition.

D. THE APPLICANTS’ ATTACK ON THE LOCAL LAND BOARD’S DECISION

53. The principal argument advanced by the Applicants is that the Local Land Board, having initially properly identified the issue requiring its decision on the referred determination, thereupon misunderstood and misapplied the statutory condition and in consequence, its decision miscarried.

54. In amplification of this central argument, the Applicants submitted that the Local Land Board fell into error in the following respects—
(i) It misunderstood the question it had to decide and ultimately asked itself the wrong question.
(ii) It impermissibly took into account the existence of the controlled work and other matters flowing therefrom.
(iii) It impermissibly took into account the question of the detriment likely to be suffered by the Second Respondent if approval was refused.
(iv) It impermissibly took into account the Departmental “Guidelines”.
(v) Its conclusion that the controlled work was not “likely to affect materially or prejudicially the distribution of flood waters in the vicinity of the work” was contrary to the evidence and to the weight of evidence, which properly understood only admitted the contrary conclusion to that reached by the Board.

55. In my opinion, the Board fell into serious error in the course of making its decision. In particular, it misunderstood and misapplied the statutory condition and it took into account factors that were not relevant to that statutory condition. These errors are of such an important nature as to be vitiating with the result that the Board’s decision cannot be allowed to stand.

56. This conclusion leaves open how this Court should exercise its appellate function under the Water Act, because it does not have the power to remit the case to the Local Land Board for re-determination in accordance with the law enunciated in this judgment.

57. I shall presently return to this vital question, but here, I must elaborate upon my conclusions that the Local Land Board fell into vitiating error in coming to its decision.

58. The following passages from the Board’s reasons demonstrate that the Board did not properly understand or apply the statutory condition.

59. At p 2, the following passage indicates that the Board placed an impermissible gloss on the statutory condition.

Whilst the Board conducted an inquiry into an application to construct the subject levee bank, the reality is that the levee bank, has been in existence for several years. The application that was determined by the department and referred to this Board, is the granting of an approval for that levee bank. As a general proposition, that type of application would be rejected, as being contrary to the accepted principle, that flood waters should, as much as practicable, follow a natural flow pattern, including along flood runners. However, that general proposition, presupposes the existence and usage of a flood runner and its interrelationship with the agricultural activities on the surrounding properties.

60. At p 9 , the following passage indicates that the Board did not properly understand the true effect of the statutory condition or the true nature of an application for approval for a controlled work (which expressly includes such a work already in existence):

As was stated by the Board at the outset of the inquiry, the Board; as a general proposition, is of the opinion that in conducting an inquiry, it must do so; as much as is possible and practicable, as if the controlled works to which the application relates, ie. The levee bank do not exist. That proposition is based on the principle of what is in the Public Interest. To do otherwise, would be to condone and encourage others, to proceed with projects on the assumption that they will be able to obtain approval for the finished project. However Public Interest, does not required that the Board ignore, the fact that the levee bank exists. It is a matter of what weight can and should be given, to the existence of the levee bank and what consideration should be given to the circumstances of its construction. It was apparently accepted by all the parties during the inquiry, that up until about 1977 there was very little, if any co-ordinated flood mitigation work, in the Lachlan Valley. The construction of levee banks, appears to have been at the discretion of individual landholders, with some control (eg as to location and possibly heights), being exercised within the limited resources available, by officers from the Water Resources Commission. However, there was no evidence before the Board, as to what approvals if any, were given to the construction of those levee banks.

61. The following passage at p 11 to p 12 demonstrates that the Board asked itself the wrong question, or alternatively, had regard to an irrelevant consideration:

The depression on Buyuma referred to as the Buyuma flood Runner is clearly identified on exhibit 14 ie copy of the relevant section of topographic map with survey markings. That map reflects the topography of the land in (on the evidence presented) or about the 1930’s. At best, it reflects the topography prior to the construction of the Buyuma levee bank. Whilst the Board accepts that map as representing the land prior to 1959/60, the Board must also accept that the topography of the land has been significantly altered, by both the construction of the Buyuma levee bank and farming practices since that time. The significance of that situation, in these proceedings, is the question, what will happen if this application is not granted? The short answer must be, that the Buyuma levee bank would have to be removed. The effect of that action on the agricultural operations of Engsta Ltd, was demonstrated to the Board, by exhibit 53.

62. The following passage at p 12 demonstrates that the Board again asked itself the wrong question or alternatively had regard to an irrelevant conclusion:

What then are the competing benefits and detriments of the opening of the Buyuma flood runner? From the submissions of the objectors, in particular Mr B. Toohey, their properties will gain a greater level of protection because the Buyuma flood runner will take an estimated 20,000 mega litres of water per day, thereby relieving the pressure (back up water) at the Southern Cross breakout by approximately 5 centimetres. The detriment to Buyuma will be that the 20,000 megalitres of water will flow onto and across it. In effect the northern landholders will gain their protection at the expense of Buyuma . It was implicit in the evidence and submissions made during the inquiry that Buyuma has obtained the benefit of protection to the detriment of the northern land holders, for a number of years and it is now time to remedy that situation. That argument would carry significant weight, if it could be shown that the levee bank on Buyuma was constructed in total disregard of the rules and the interests of other landholders. The evidence in this case does not support that contention. The Board accepts, that it was a common and accepted practice by land holders, prior to the Guidelines being formulated, that levee banks were constructed by land holders for the purpose of protecting their land.

63. The following passage at p 12 to p 13 demonstrates that the Board again asked itself the wrong question or took into account an irrelevant consideration:

Notwithstanding the general proposition referred to by the Board earlier in this report that in conducting an inquiry, it must do so; as much as is possible and practicable, as if the controlled works to which the application relates, ie. the levee bank does not exist, it would be a fiction, stretching credibility, to try and consider the evidence and submissions presented in this inquiry, in isolation of the present circumstances. The Board accepts that to try and turn back the clock and return to the natural conditions thereby reshaping the topography of the Buyuma flood runner , is neither practicable nor appropriate . There has been significant development in the vicinity of the works, over the years. That development, both on Buyuma and elsewhere has obviously been carried out with the knowledge that the levee bank exists and the expectation, that it would continue to exist. That expectation, was to a large extent created by the lack of any action to have the levee bank removed at the time of its construction. The expectation was further enhanced, by its incorporation as a levee bank in the Guidelines .

64. Finally, the following passage at p 13 demonstrates similar error on the part of the Board:

If this application was, in fact, to construct a levee bank across a natural flood runner, that was in actually use, or had been in recent times, then the Board would have taken the view expressed earlier in this report, that it should be refused as being contrary to the accepted principles of flood plain management. That is not the circumstances in this case. The Board accepts, that the Buyuma levee bank has been in existence for several years, it was constructed at a time when it appears to have been an accepted practice to do so (rightly or wrongly). All of the objectors in this case, have been aware of its existence for a number of years. They have purchased land in the vicinity of the works, with that knowledge, they must have been aware of the flood risks of the country.

65. In so analysing the reasons for the Board’s decision, and concluding that it was seriously flawed, I readily concede the task of the Board was not an easy one. In large measure the difficulty is intrinsic in the concept of a controlled work (for which approval is sought) including an existing work in addition to a prospective work, and in the fact that the statutory condition applies indiscriminately to both an existing and a prospective, controlled work.

66. However, despite these conceptual difficulties, it is apparent that the statutory condition is entirely apt to apply to both factual situations and that an inquiry whether an existing controlled work is likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work, is apt to be just as straightforward (perhaps even more so) than would be an inquiry into a prospective controlled work.

67. It was at this fundamental point that the Local Land Board fell into material error because it is clear from the passages that I have recited that the Board significantly departed from the inquiry truly raised by the statutory condition, just because (so it seems) the application was for an existing controlled work. This departure ultimately involved, in my respectful judgment, the Board placing an impermissible gloss on the meaning and effect of the statutory condition.

68. In much the same fashion, the Board’s ready acceptance of the Departmental Guidelines deflected the Board from its proper consideration of the statutory condition.

69. I shall leave for later consideration the reliance placed by both Respondents on the provisions of the Water Act s 4A, inserted by the Water and Environmental Planning Legislation Amendment Act 1997 (Act No 63) which came into force on 2 July 1997. It is to be noted in passing that 13 of the 15 hearing days before the Board occurred before s 4A came into force, and that the section was not referred to in the parties’ submissions to the Board, which proceeded on the common assumption that the Departmental Guidelines had no statutory force. Despite the Respondents’ submissions to this Court that s 4A applied to the Board’s decision, this submission must be rejected because it is contrary to the express savings and transitional provisions inserted by Act No 63 of 1997 into the Water Act (see Schedule 2 Pt 3, cl 5).

70. Although both Respondents urged the Court to accept the ultimate conclusion reached by the Board, notwithstanding any errors committed by the Board on the way to that decision, I am firmly of the opinion that the errors I have identified in the Board’s decision vitiated its decision, and inevitably, infected its ultimate factual conclusion ie that the Board was not satisfied that the impact on flood waters of the “Buyuma” levee bank would be “likely to affect, materially and prejudicially, the distribution of flood waters in the vicinity of the work”.

71. This leaves the question of how the Court should exercise its appellate function in the light of its conclusion that the Board’s decision cannot be allowed to stand and must be set aside.

E. HAVING SET ASIDE THE BOARD’S DECISION, HOW SHOULD THE COURT EXERCISE ITS APPELLATE FUNCTION?

72. This appeal has to this stage proceeded, as I have earlier noted, upon the basis of the evidence admitted in the proceedings before the Local Land Board.

73. Speaking of such a procedure, Gibbs J in Uranerz (Aust) Pty Ltd v Hale (1980) 30 ALR 193 (cited in the Court of Appeal’s judgment in Ainsworth Nominees) said:

If a re-hearing is conducted solely on the written material, whether that material be technically evidence or a record, the appellate court should generally defer to the conclusion a question of credibility formed by the tribunal from which the appeal is brought and whose members saw and heard the witnesses.

74. At 199, his Honour concluded:

Gallop J was not entitled to reverse the finding of the Tribunal which was based on its view of the credibility of the witnesses unless it was seen clearly to be wrong on grounds that did not depend merely on credibility—for example, on the ground that the evidence which was accepted was inconsistent with established facts, or was so improbable that no reasonable person could accept it, or that the judgment of the tribunal disclosed that its conclusion was affected by some error of law or fact.

75. As I have earlier held, the ultimate conclusion reached by the Board was, in my opinion, affected by material errors of law, concerning the statutory condition.

76. As I have considered the evidence that was before the Board, I have come to the conclusion that if the statutory condition, properly understood, were applied to the primary facts (including the facts found by the Board) the only conclusion that would be reasonably open to a tribunal of fact, is that the statutory condition was applicable.

77. The Board’s relevant factual findings are found in several places of in reasons for decision.

78. For example, the relevant evidence, and the Board’s findings, are recorded in the following passages:

There is no doubt, that that the Southern Cross break out, is a significant factor in the flood water distribution, of the subject area. The effect on the water level at the Southern Cross , by the existence of the Buyuma levee bank was, during the course of the inquiry, estimated variously at “ no significant impact ”, an acceptance by the department of 1 to possibly 3 centimetres, and finally by the objectors at 5 centimetres.

In answer to questions put to them, both Dr Button and Mr Goyen, accepted that other factors in addition to increased levels at the Southern Cross breakout, caused by the Buyuma levee bank, would contribute to the flow in the Southern Cross. Those factors were firstly the impact of the level and volume of flows in the 12 mile breakout immediately upstream of the Southern Cross and secondly the lack of adequate levee bank protection along the objectors properties, adjacent to the Southern Cross. The Board accepts that those factors also contribute to the flooding of the properties, on the north side of the river, between the main channel and the Southern Cross.

[at p 11]

The Board accepts that Mr Doyle, has been making complaints about the levee bank for several years. The Board also accepts, that the other land holders have also complained about it. However that has been in more recent years and in conjunction, with their complaints about all the levee banks on the southern side of the Lachlan river. The Board does not accept that the Buyuma levee bank has the level of impact attributed to it by the objectors, the Board does accept that it has an impact ie. a back up of water at the Southern Cross however the Board rejects the submission that the flooding of the objectors land in that area is attributable to only the Buyuma levee bank. The Board accepts that there exist other contributing factors for that flooding. The words materially and prejudicially denote something more than just having an impact on the distribution of the flood waters. The words materially and prejudicially must be read conjointly, there must be an affect on the distribution of the flood waters, that is in the circumstances of the case material and prejudicial. The Board accepts that during floods the objectors suffer the losses outlined in their respective statements of loss however the Board does not accept that those losses are attributable to the Buyuma levee bank. The risks of farming on a flood plain are well known to the objectors. It is a risk that they take in sowing their crops.

[at p 13]

79. These findings clearly indicate an acceptance by the Board that the existence of the “ Buyuma ” levee bank had an impact on flood waters, including increasing the levels of flood waters at the “ Southern Cross ” breakout, and that impact was (at least) a contributing factor in the flooding of the objectors’ lands.

80. It appears that the existence of other contributing factors to the flooding of the objectors’ lands was the reason for the Board’s finding that the “Buyuma” levee bank did not affect, materially and prejudicially, the flood waters in the vicinity of the works, including the flooding of the objectors’ lands.

81. However, the Board made no attempt to quantify the extent of the contribution made to that flooding by the existence of the “Buyuma” levee bank. Clearly, this was a crucial question. Without quantifying the several contributing factors, and in particular without quantifying the contribution made to that flooding by the existence of the “Buyuma” levee bank, it was not reasonably open to the Board to conclude that the “Buyuma” levee bank “did not affect materially and prejudicially the flood waters etc”. (That conclusion may have been reasonably open had the Board concluded that the flooding of the objectors’ lands was not material or prejudicial, but no such finding was made, or indeed, having regard to the objectors’ undisputed evidence of damage sustained by flooding, could such a finding have been reasonably made.)

82. Moreover, it is to be recalled that there was clear evidence before the Board quantifying the increased flood level at the “Southern Cross” breakout caused by the existence of the “Buyuma” levee bank.

83. That evidence, combined with the objectors’ evidence (which was accepted by the Board) inevitably, in my opinion, leads to the conclusion that the Buyuma levee bank is likely to affect, materially and prejudicially, the flood waters in the vicinity of the work. Indeed, no other conclusion was reasonably open on the primary facts (including the Board’s findings).

84. Accordingly, considering the question for myself (see Tandou at 20 and 21) I am satisfied on the evidence that the controlled work is likely to affect materially and prejudicially, the distribution of flood waters in the vicinity of the work.

85. In so concluding, I would reject the Second Respondent’s submission that the statutory condition is concerned with the much wider issue of the “distribution of flood waters generally along the flood plain”. In my respectful judgment, this submission overlooks the fact that the statutory condition refers to the distribution of flood waters “in the vicinity of the work”. Moreover, it is apparent that a, if not “the”, principal focus of the statutory condition is on the physical consequences of the existence of the controlled work, in terms of flooding of nearby properties. It is the “interests” of local occupiers in their properties situate in the vicinity of the controlled work that is apt to be materially and prejudicially affected by the re-distribution of flood waters in consequence of the existence of a controlled work.

86. This conclusion, however, must be regarded as being necessarily provisional in the sense that it is subject to my conclusions in respect of the Respondents’ reliance upon the Water Act s 4A, which is the final matter requiring determination.

F. THE RESPONDENTS’ RELIANCE UPON THE WATER ACT S 4A

87. Section 4A, which came into force on 2 July 1997 (some 13 years after Pt 8 came into force) provides as follows:

4A Inquiries and appeals—requirement to take certain matters into account

(1)A judicial body is required, in carrying out any of its inquiry or appeal functions under this Act and in making any determination or recommendation with respect to any such inquiry or appeal, to take into account, and to have due regard to, the following matters:


(a) any relevant policy that concerns the subject-matter of the inquiry or appeal and that is brought to the attention of the judicial body,

(b) any State-wide water resource management objectives that are brought to the attention of the judicial body,

(c) any relevant inter-government agreement, treaty or arrangement relating to the management, preservation or sharing of the State’s water resources that is brought to the attention of the judicial body,

(d) the state of water resources, and the state of the environment generally, at a local, regional and State-wide level as brought to the attention of the judicial body,

(e) the impact that the judicial body’s determination or recommendation could or might have:

(i) on the allocation of water resources at a local, regional and State-wide level, and

(ii) on other persons who are entitled to take and use water (apart from those to whom the inquiry or appeal relates), and

(iii) on the state of water resources, and on the state of the environment generally, at a local regional and State-wide level, and

(iv) in relation to the management, protection and enhancement of the State’s water resources.

(2) In this section:

judicial body means the Land and Environment Court, a local land board or a Magistrate.

Relevant policy means any governmental policy relating to the management, protection and enhancement of the State’s water resources.

(3) The Minister may certify, in writing, that a particular policy is, or was, a relevant policy in relation to a particular matter. The certificate is evidence of the relevant policy concerned.

88. It is common ground that the section applies to the Court’s determination of the present appeal, although the Applicants have submitted that no “ relevant policy ” has been proven, and that if the Respondents seek to prove that the Department guidelines that were admitted into evidence before the Board constitute “ relevant policy ”, the Respondents will need to obtain the Court’s leave to the adducing of fresh evidence because it is common ground that the “ Guidelines ” in evidence before the Local Land Board were not so credentialled and qualified. Indeed, unwittingly ignorant of the enactment of s 4A , the First Respondent conceded before the Board that the Guidelines had no statutory force.

89. Although there was some attempt by the First Respondent to adduce further evidence relevant to s 4A late in the course of the hearing of the appeal, ultimately the attempt was postponed to the next stage of the hearing, as contemplated by the parties’ agreement as to how the appeal should be heard (ie if the Court proceeded to consider the question of admitting further evidence).

90. However, I think the matter can be satisfactorily resolved without recourse to adducing further evidence, namely by assuming that the Department Guidelines in evidence before the Board (and hence in evidence before this Court), at least in a prima facie sense, fall within the ambit of the section. (I should note that subsection (1)(a) was the only aspect of s 4A relied upon by the Respondents.)

91. So regarded, I note the following matters concerning the Department Guidelines that were in evidence before the Board (and consequently, by dint of the parties’ agreement, before this Court):-
(i) The Guidelines principally referred to in the Board’s reasons for decision were Guidelines which came into existence in 1979 (and were revised in 1980), some four or five years before the commencement of the Water Act Pt 8;
(ii) Those Guidelines, in terms, were presenting “a preliminary scheme and opportunity will be provided to all land holders to suggest further amendments that may be more suitable to their farm management practice”: p 7;
(iii) Although those Guidelines stated that “wherever possible, existing supply channels and levees have been incorporated into the scheme, so that potential disruption to these works is kept to a minimum” (p 7), it nonetheless stated the need for “amendments to some existing development are unavoidable and necessary to restore adequate flood waterway” (p 7);
(iv) Prior to the enactment of s 4A, the Guidelines do not, and cannot in law, operate to abrogate the statutory condition contained in the Water Act s 171 and s 174. Moreover, to the extent that the Guidelines postulate an approach which is inconsistent with the statutory condition, they must be regarded as being invalid, or at least, inoperative pro tanto;
(v) Recognising that the status of the Guidelines made prior to the enactment of the Water Act s 4A may have been elevated after that enactment, the Guidelines, in their elevated status, nonetheless cannot have been intended to operate in a manner that is repugnant to, or abrogates, the statutory condition. In other words, the Guidelines do not and cannot in law, modify the statutory condition.

92. In the circumstances, I find nothing in the Guidelines that affects my conclusions in respect of the statutory condition.

93. In any event, my consideration of the Guidelines does not lead me to a different conclusion as to how the appeal should be determined, conformably to my conclusions in respect of the statutory condition.

G. CONCLUSIONS AND ORDERS

94. In view of my earlier conclusions in respect of (i) the decision of the Local Land Board (ii) the present appeal being adjudicated upon on the basis of the evidence before the Board; and (iii) the Department Guidelines that were in evidence before the Board and their elevated status in the present proceedings, having regard to the enactment of the Water Act s 4A, it follows that the appeal must be allowed, the decision of the Local Land Board be set aside and the Ministerial Corporation’s determination of the application for the controlled work (comprising the “Buyuma” levee bank) must be cancelled: vide the Water Act s 174(1)(c), that power being also vested in this Court pursuant to the Land and Environment Court Act 1979 s 39(2).

95. Accordingly, I make the following orders:
1. Appeal be allowed.
2. Decision of the Local Land Board dated 24 November 1997 be set aside.
3. Determination of Ministerial Corporation dated 26 July 1995, granting approval under the Water Act 1912 s 171 be cancelled.
4. Exhibits be returned.
5. Question of costs be reserved.