Minister for Sustainability, Environment and Conservation v Zander - [2014] SASCFC 83

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
MINISTER FOR SUSTAINABILITY, ENVIRONMENT AND CONSERVATION v ZANDER
[2014] SASCFC 83
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Vanstone and The Honourable Justice Stanley)
25 July 2014
ENERGY AND RESOURCES - WATER - WATER MANAGEMENT - WATER MANAGEMENT PLANS
ENERGY AND RESOURCES - WATER - WATER MANAGEMENT - IRRIGATION
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION - GENERALLY
Appeal from a decision of a single Judge of the Supreme Court overturning a decision of a Judge of the Environment, Resources and Development Court on the proper construction of the Water Allocation Plan for the Barossa Prescribed Water Resources Area. The preliminary question was: Does the [Barossa Water Allocation Plan] (and Principle 5.2.14 in particular) permit the allocation of water on [the Zanders’ licence], so that: (a) each individual resource nominated on the licence has a maximum volume allocated to it/them; and (b) the total amount that may be taken from all or any resource in any water use year does not exceed 42 ML; but (c) the sum of the volumes nominated on the licence to each of the individual resources exceeds 42 ML?
Whether the Judge erred in holding that the preliminary question should be answered in the affirmative.
Held per the Court allowing the appeal:
1. The Judge erred in holding that the preliminary question should be answered in the affirmative.
2. The Barossa Water Allocation Plan is to be construed as a statutory instrument.
3. Clause 5.2.14 requires the Minister to convert area based water allocations to volumetric allocations. Where the licence contains more than one water resource, the Minister must then assign that allocation between the resources.
4. The Minister cannot delegate the task of assignment to the licensees so as to enable them to determine how their allocation is assigned between the different resources on the licence.
Natural Resources Management Act 2004 (SA) s 7, s 10(1), s 76, s 79, s 80, s 124, s 125, s 126, s 127, s 149, s 153 and s 156; Acts Interpretation Act 1915 (SA) s 4, referred to.
Glengyle Proprietors Pty Ltd v Minister for Environment and Conservation (2009) 105 SASR 520; Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (1980) 147 CLR 297; Mount Barker Properties Ltd v District Council of Mount Barker [2001] SASC 249; Australian Education Union v DECS (2012) 248 CLR 1; Carr v WA (2007) 232 CLR 138; Alcan (NT) v Commissioner of Territory Revenue (2009) 239 CLR 27; Draycott v Minister for Environment and Conservation [2007] SASC 463; District Council of Munno Para v Remove-All Rubbish Co Pty Ltd (1985) 41 SASR 188; Frankham v Adelaide City Council [2004] SASC 263, considered.

MINISTER FOR SUSTAINABILITY, ENVIRONMENT AND CONSERVATION v ZANDER
[2014] SASCFC 83
Full Court: Gray, Vanstone and Stanley JJ
GRAY and STANLEY JJ

This is an appeal from a decision of a Judge of this Court overturning a decision of the Environment, Resources and Development Court.
The issue for this Court is the proper construction of a provision of the Water Allocation Plan for the Barossa Prescribed Water Resources Area, made in June 2009, pursuant to the Natural Resources Management Act 2004 (SA).
Background
The Zander family have farmed lands in the Barossa Valley for many years. The respondents, Ian and Josephine Zander, take underground water through a bore and collect surface water in dams to irrigate their vineyard in the Barossa Valley. They also use the surface water for stock and domestic purposes.
It is common ground that an authorisation or allocation under section 124(3) of the Natural Resources Management Act was required for the Zanders’ use of water for irrigation purposes. The Zanders had been the holders of a water licence for some time and until recently held what was commonly referred to as an “area based” licence. An area based licence permitted a licensee to draw water, usually for a nominated irrigation purpose, and limited the area that may be irrigated, but did not usually limit the volume of water that may be taken.
The Zanders’ area based licence authorised the irrigation of 28 hectares of vines from both dams and a bore. Together with other area based licensees, the Zanders were free to take any volume of water from the resources endorsed on the licence – they were only limited by the size of the area they were entitled to irrigate.
A decision was taken by government to replace area based licences with volumetric licences. Apparently, the view was taken that area based licences, with no volumetric cap, provide no disincentive against poor irrigation practices or the prolonged use of inefficient irrigation equipment. There was no reason to guard against water wastage as there was no limit on the amount of water that could be taken. In addition, because there was no limit on the amount of water that could be taken, the aggregate volume that all irrigators could take was not capped to an environmentally sustainable limit, or even fully known.
On 18 June 2009, a water allocation plan for the Barossa Prescribed Water Resources Area was adopted by the Minister for Environment and Conservation, pursuant to section 80(3)(a) of the Natural Resources Management Act.
In the course of drafting the Barossa Water Allocation Plan, it was recognised that special consideration needed to be given to a number of area based licences. This was explained in an affidavit of Lawrence Poppleton, a water planner:
In the course of these discussions, it became apparent that there were a number of area based licences that, in the opinion of the Department, could not be converted to a volumetric licence. These licences were those that had water allocations expressed with a unit of measurement of hectares from multiple water resources. The principles in the draft plan provided no guidance, direction, or basis for the conversion of these area based licences to volumetric licences.
These considerations led to the inclusion in the Plan of clause 5.2.14.
The Statutory Scheme
Before discussing the issues on appeal, it is convenient to identify the relevant statutory provisions.
The Natural Resources Management Act has the general object of assisting in the achievement of ecologically sustainable development in this State by establishing an integrated scheme to promote the use and management of natural resources. The Act aims to achieve this objective in a manner that, inter alia, provides for the protection and management of catchments and the sustainable use of land and water resources and, insofar as it is reasonably practicable, to seek to enhance or rehabilitate the land or water resources that have been degraded.
Chapter 7 of the Natural Resources Management Act addresses the management and protection of water resources and Part 1 of that chapter is concerned with the right to take water. Section 124 is pivotal and provides:
Right to take water subject to certain requirements
(1)Subject to this Act and to any other Act or law to the contrary, a person who has lawful access to a watercourse, lake or well may take water from the watercourse, lake or well for any purpose.
(2)Subject to this Act and to any other Act or law to the contrary, the occupier of land is entitled to take surface water from the land for any purpose.
(2a)Subject to this Act, any other Act or law to the contrary, any provision made by the regulations, or the provisions of a stormwater management plan incorporated into a regional NRM plan under section 89(1)(b), a person who has lawful access to any stormwater infrastructure may take water from the infrastructure for any purpose.
(3)     However, subject to subsections (4), (6) and (6a)—
(a)     —
(i)    an authorisation under section 128; or
(ii)a water allocation that relates to the relevant water resource,
is required to take water from a prescribed watercourse, lake or well or to take water from a surface water prescribed area; and
(b)     a person must not take water from a watercourse, lake or well that is not prescribed if to do so—
(i)would detrimentally affect the ability of another person to exercise a right to take water from the watercourse or lake or from the same underground aquifer; or
(ii)would detrimentally affect the enjoyment of the amenity of water in the watercourse or lake by the occupier of land—
(A)that adjoins the watercourse or through which the watercourse runs; or
(B)     that adjoins the lake or on which the lake is situated.
(4)     Subsection (3) does not apply to the taking of water if—
(a)     the water is taken by the occupier of land from—
(i)    a watercourse that adjoins or runs through the land; or
(ii)     a lake that adjoins or is on the land; or
(iii)    a well that is on the land; or
(b)     the water is surface water and is taken by the occupier of land from the land,
and is used by the occupier for domestic purposes or for watering stock (other than stock subject to intensive farming).
(5)Subsection (4) does not apply to the taking of water from a prescribed watercourse, lake or well or the taking of surface water from a surface water prescribed area if the regulation declaring the watercourse, lake or well or the surface water prescribed area excludes the operation of that subsection.
(6) Subsection (3) does not apply to the taking of water for the purposes of drinking or cooking by the person who takes it or by a person to whom he or she gives the water if the rate at which the water is taken does not exceed the rate prescribed by regulation.
(6a) Subsection (3) does not apply—
(a)     to the taking of water from stormwater infrastructure in circumstances prescribed by regulation; or
(b)     to the taking of water from stormwater infrastructure, or a part of stormwater infrastructure, brought within the ambit of this paragraph by regulation.
(7) Despite the other provisions of this section, water must not be taken contrary to the provisions of an NRM plan that applies in relation to that water unless the water is taken pursuant to an authorisation under section 128 or a water allocation that relates to the relevant water resource.
(7a) This section operates subject to any requirement to have a licence with respect to a commercial forest under Part 5A.
(8) Rights at common law in relation to the taking of naturally occurring water are abolished.
[Emphasis added.]
Chapter 4 of the Natural Resources Management Act addresses natural resources management plans and Division 2 of Part 2 is concerned with water allocation plans. Section 76 of the Act provides for water allocation plans and prescribes the matters to be addressed by a water allocation plan. Regional resource management boards are under an obligation to prepare a water allocation plan for each of the prescribed water resources in their regions. Section 79 of the Act addresses the preparation of a draft plan and the giving of public notice of that process to enable submissions to be made. Once completed, the draft plan is required to be circulated to relevant interest groups and the regional board has an obligation to consult the public in relation to the plan. After compliance with the provisions of section 79 of the Act, the board is to forward the draft report to the Minister. Section 80 of the Act requires the Minister to consult with specified interests, to have regard to submissions received from members of the public and to report to public meetings. Following these considerations, the Minister has a discretion to either adopt the plan with or without amendment or to refer the plan back to the board for further consideration. Section 80(7) of the Act provides that the Minister adopts a plan by signing a certificate endorsed on the plan.
The Minister is empowered under section 149(1)(c) of the Natural Resources Management Act to alter licence allocations to ensure conformity with a water allocation plan. Section 149 provides:
Variation of water licences
(1) A water licence may be varied by the Minister—
...
(c) at any time if there has been an alteration to the water allocation plan for the water resource to which the licence relates and the variation is necessary, in the opinion of the Minister, to prevent the licence from being inconsistent (as to the basis on which the water access entitlement is determined) or seriously at variance (as to the licence conditions) with the plan;
The Barossa Water Allocation Plan
Chapter 5 of the Barossa Water Allocation Plan addresses water allocation criteria. Clause 5.1 sets out the objectives and general principles concerning water allocation. The seven objectives are as follows:
-Allocate water resources for sustainable use.
-Maintain and where appropriate enhance the quality of water resources.
-Ensure efficient use of water resources.
-Maintain and enhance ecosystems dependant on water resources.
-Minimise the impact of water use on prescribed water resources, other water resources, other water users and the environment.
-Promote the sustainable use of water for agricultural and other economic enterprises within social and environmental limits.
-Ensure that general statutory duties as listed under section 9 of the National Resources Management Act are complied with.
The general principles applying to the allocation of water resources include:
-Water will be allocated by the volume that may be taken in a water use year, and in accordance with the objectives and principles of this plan.
-Pursuant to section 153(1) of the Natural Resources Management Act, water licences may be endorsed with water (holding) allocations.
-Water resources must be used efficiently in a manner that is appropriate to the relevant industry or crop, taking into account local climatic, land, soil, water and topographic circumstances.
Clause 5.2 of the Barossa Water Allocation Plan addresses the conversion of an area based allocation to a volumetric allocation. Provisions in this clause provide that all conversions are to take effect on 1 July following the first full water use year after the date of adoption of the Plan and that all area based allocations are to be converted to a volumetric allocation in accordance with a prescribed formula, the area endorsed on the licence and a conversion factor based on the type of irrigation crop being cultivated by the licensee. In the process of the conversion, the Plan permits the application of an alternative conversion factor of up to 150 per cent of the prescribed conversion factor where the licensee can demonstrate that it is inappropriate by reference to specified criteria.
Clause 5.2.14 of the Barossa Water Allocation Plan is of central importance to this appeal and provides:
In the case of a single licence endorsed with an area based allocation which can be taken from more than one resource, the licence will be varied in accordance with the principles in section 5.2. In addition the following principles will also apply:
a)    Allocations converted to a volume in accordance with section 5.2 will be assigned to a resource/s using the following hierarchy:
osurface water, followed by
ounderground water, followed by
owatercourse water.
b)   Surface water will be allocated first, up to a maximum of 70% of dam storage capacity. Dam storage capacity is as defined in principle 9.
c)   The assignment of an allocation to a resource/s takes into account
ohistorical use of the resource; and
oany other information the Minister seems appropriate.
The Plan provides in chapter 9 a glossary of terms which includes the following definitions:
Surface water – means (a) water flowing over land (except in a watercourse) after (i) having fallen as rain or hail or having precipitated in any other manner; or (ii) after rising to the surface naturally from the underground, (b) water of the kind referred to in paragraph (a) that has been collected in a dam or reservoir.
Underground water – (more commonly referred to as groundwater) means (a) water occurring naturally below ground level, (b) water pumped, diverted or released into a well for storage underground.
Volumetric water allocation – An allocation of water expressed on a water licence as a volume (e.g. kilolitres) to be used over a specified period of time, usually per water use year (as distinct from any other sort of allocation).
Water (taking) allocation – in respect of a water licence means the quantity of water that the licensee is entitled to take and use pursuant to the licence.
Water allocation – (a) in respect of a water licence means the water (taking) allocation or the water (holding) allocation endorsed on the licence; (b) in respect of water taken pursuant to an authorisation under Section 128 of the Act means the maximum quantity of water that can be taken and used pursuant to the authorisation
Water licence – means a licence granted under Chapter 7 Part 3 authorising the holder (subject to the taking of any step or steps required by the Act) to take (or to hold) water from a watercourse, lake or well or to take (or to hold) surface water from a surface water prescribed area and includes a licence granted under that Part endorsed with a water (holding) allocation.
...
Watercourse – means a river, creek or other natural watercourse (whether modified or not) in which water is contained or flows whether permanently or from time to time and includes – (a) a dam or reservoir that collects water flowing in a watercourse, (b) a lake through which water flows, (c) a channel (but not a channel declared by regulation to be excluded from the ambit of this definition) into which the water of a watercourse has been diverted, (d) part of a watercourse, (e) an estuary through which water flows, (f) any other natural resource, or class of natural resource, designated as a watercourse for the purposes of the Act by an NRM Plan.
Well – (a) an opening the ground excavated for the purpose of obtaining access to underground water; (b) an opening in the ground excavated for some other purpose but that gives access to underground water; (c) a natural opening in the ground that gives access to underground water.
Under the Natural Resources Management Act, water allocation plans are the prime regulatory tool for controlling access to water for irrigation and other commercial purposes. The regulatory context, including the function of the Minister in ensuring licence allocations are consistent with the relevant plan, was considered by this Court in Glengyle Proprietors Pty Ltd v Minister for Environment and Conservation.[1] The Court said:[2]
The statutory obligation found in s 152 draws attention to the terms of the Water Allocation Plan. The proper construction of that Water Allocation Plan must proceed first from an understanding of the statutory context in which it operates.
... [T]he important objective of the Act and the Water Allocation Plan … is to provide a transparent process for, and a reasonable level of certainty in, the distribution of an important public resource. …
A primary purpose of the Water Allocation Plan is to prescribe the principles with which allocations of water must be consistent...
The Full Court in Glengyle identified those principles as follows:[3]
A Water Allocation Plan must provide a mechanism for determining a consumptive pool for the water resource. Importantly it must also prescribe principles associated with the determination of water access entitlements and for the taking of water in a way which optimises the sustainable use of the water.
Water allocation plans are, as a rule, prescriptive in nature and have accordingly been drafted in mandatory terms.
[1]    Glengyle Proprietors Pty Ltd v Minister for Environment and Conservation (2009) 105 SASR 520.
[2]    Glengyle Proprietors Pty Ltd v Minister for Environment and Conservation (2009) 105 SASR 520, [9], [46], [53].
[3]    Glengyle Proprietors Pty Ltd v Minister for Environment and Conservation (2009) 105 SASR 520, [13].
Proceedings in the Environment, Resources and Development Court

At the time of the hearing in the Environment, Resources and Development Court, the Zanders held a single water licence which applied to two distinct water resources, being an underground resource and a surface water resource with a total allocation of 35 megalitres. The licence permitted the taking of 14 megalitres per annum from underground water. The Zanders have access to a well in the Barossa Prescribed Water Resources Area for this purpose. The use of this water is metered. The licence also permitted the taking of 21 megalitres per annum from a prescribed water resource, being surface water in the prescribed water resources area. The surface water is collected in four dams respectively containing 10.9, 19.5, 38.6 and 59 megalitres of water. Only three of these dams are metered.
During the course of the proceedings in the Environment, Resources and Development Court, the Minister accepted it was intended that the Zanders should have the benefit of a 50 per cent increase to the conversion factor but this had been miscalculated. As a consequence, their water allocation entitlement was increased to a total of 42 megalitres. As we understand it, a new licence reflecting this allocation is yet to be issued. Nonetheless, the Minister has proposed an allocation of 21 megalitres to surface water and an allocation of 21 megalitres to underground water. The Zanders wish the assignment of the volumetric allocation to be made in a way which allows them some flexibility in the amount they can draw from each source so that in high rainfall years they can use relatively more surface water and adopt the converse course in dry years. The Minister holds the view that the Barossa Water Allocation Plan does not permit such an approach.
As a consequence of this difference of opinion, the Judge in the Environment, Resources and Development Court agreed to determine a preliminary question in the following terms:
Does the [Barossa Water Allocation Plan] (and Principle 5.2.14 in particular) permit the allocation of water on [the Zanders’ licence], so that:
(a)    each individual resource nominated on the licence has a maximum volume allocated to it/them; and
(b)   the total amount that may be taken from all or any resource in any water use year does not exceed 42 ML; but
(c)    the sum of the volumes nominated on the licence to each of the individual resources exceeds 42 ML?
Before the Environment, Resources and Development Court and this Court, the parties proceeded on the basis that the water licence would be varied so that the total volume available to the Zanders would be 42 megalitres and not 35 megalitres, while recognising that the Minister has yet to actually determine the assignments from underground water and surface water to be made from the 42 megalitre allocation.
The Judge of the Environment, Resources and Development Court concluded that the provisions of the Barossa Water Allocation Plan, and in particular clause 5.2.14, do not permit the sum of the volumes nominated on the licence to each of the individual resources to exceed 42 megalitres. Accordingly, the Judge answered the preliminary question in the negative. The Judge reasoned:
For the reasons which follow I am satisfied that, on its proper construction, P5.2.14 does not permit the assignment of volumes to each of the resources such that if they were combined the sum would exceed 42 ML...
... I am of the view that the reference to “hierarchy” in P5.2.14(a) focuses attention on the [Barossa Water Allocation Plan’s] aim of relying on surface water in preference to underground or watercourse water. If contrary to this view there was no apportionment to particular resources (and as a consequence higher volumes allocated to each resource) the landholder would be free to decide which resource he would choose to exploit in a given year or series of years thereby potentially undermining the system which underpins this part of the [Barossa Water Allocation Plan] namely the emphasis on the use of some sources of water prior to or in preference to others.
Furthermore, if the [Zanders’] argument was correct it would also follow that pursuant to P5.2.14(b), surface water, equating to up to 70% of dam storage capacity, could be allocated such that (in theory at least) the allocation assigned to a particular dam might exceed the total volumetric allocation of the licence. In such a situation a person would have no right to take the amount of water which was allocated to him or her on the face of the licence. Put another way the allocation would cease to define the entitlement to take water. In my view a Court should be slow to interpret the [Barossa Water Allocation Plan] in a way which would lead to such an outcome.
The Reasons of the Single Judge of this Court
The Zanders appealed from this decision to a Judge of this Court, who upheld the appeal and concluded that the preliminary question should be answered in the affirmative. The Judge construed the word “assigned” in clause 5.2.14(a) of the Barossa Water Allocation Plan as including “apportioned”. The Judge reasoned that the apportionment of the allocation to different water sources has the effect that the licensee’s water use will be limited not just by an annual total draw but also by reference to the source from which the water is taken. The hierarchy referred to in clause 5.2.14(a) encourages the use of surface water over other sources. The Judge concluded the clause implied that as much of the total allocation as can reasonably be sourced in every year from surface water shall be assigned to that source. His Honour reasoned that, when assigning a portion of the allocation to surface water, the Minister will have to take care not to over assign the allocation to surface water in case, in low rainfall years, the surface water collected by a licensee is less than the amount assigned, leaving the licensee, in fact, with less water than his or her annual allowance. The Judge said:
Finally, I deal with the Minister’s contention that the purpose of the Barossa Water Plan is to remove the licence holder’s choice of water source by assigning allocations to one source or another. It is certainly true that the implementation of the Barossa Water Plan will have the effect of removing the wide choice between water sources which licence holders once enjoyed but it does not follow that removal of choice is, in itself, an objective of the Barossa Water Plan. Accepting for present purposes that a construction which favours preservation of property rights is out of place in the statutory regulation of the public’s water resources, there is still much to be said for recognising the benefit of allowing some discretion in the management of those resources on the ground, by licence holders who are aware of the climatic variations from year to year. As I earlier observed, the purpose of Principle 5.2.14 is to optimise the use of surface water. A construction which authorises the allocation of a kind which allows some discretion as to the water source for a portion of the allocation may promote in some, if not many cases, that purpose.
Following a detailed discussion of hypothetical considerations, the Judge observed:
I acknowledge the force of the submission that an assignment of the whole of the annual allocation to surface water and another source or sources jointly, with the licence holder retaining a discretion, which all licence holders once held, to select the source from which to draw the entire allowance, is inconsistent with Principle 5.2.14. Accepting that contention for present purposes, it seems to me that an assignment which would allow a licence holder to choose the water source for the entire allocation would be inconsistent with Principle 5.2.14 because it does not assign the allocation in accordance with the hierarchy in Principle 5.2.14(a). In particular, it does not do so in accordance with the implied requirement to assign so much of the allocation to surface water as might reasonably be drawn from that source by the licence holder in every year.
It may be that, even more fundamentally, an apportionment allowing the licence holder an unrestricted choice of source is not an “assignment of an allocation to a resource/s” at all, but I am not convinced that that is so. I would prefer to treat it as an assignment, but one which does not meet the purpose of Principle 5.2.14.
[Emphasis added.]
The Judge concluded that it was possible to effect an “assignment” of an allocation to two or more resources by leaving the assignment to the licensee to be decided in his or her discretion on a year-by-year basis. The Judge added a postscript to his reasons which included the following:
... My construction of Principle 5.2.14 is not based on the particular circumstances of the [Zanders] but on the discernment of the mischief to which the Barossa Water Plan is directed. In particular, my construction is informed by the manifest difficulty which might be faced in some cases in optimising the use of surface water, if the power to assign is limited to assigning the entirety of the allocation inflexibly between surface water and other sources. As I have endeavoured to explain, that difficulty is caused by the notorious variations in rainfall which are a feature of the South Australian climate.
...
As I have already observed, my construction is based on an assessment of the broader purpose of the principle and the mischief to which it is directed...
The Appeal
Submissions
The Minister submitted that clause 5.2.14 of the Barossa Water Allocation Plan required his delegate to do three things: to convert the area-based allocation to a volume in accordance with the Plan; to then decide whether to assign the converted volumetric allocation to either or both of the two resources endorsed on the Zanders’ licence – surface water and underground water; and, following this decision, to either assign the entire volumetric allocation to a single resource – after taking into account historical use of the resource and any other information, or, in the event that the delegate decides to assign a portion of the entire volumetric allocation to both resources, to proceed to make those assignments – taking into account historical use of the resource and any other information.
The Minister contended that a principle of the conversion process under the Barossa Water Allocation Plan is to limit the former freedom of irrigators in the public interest. That is, the public interest in the prudent conservation of water resources is advanced by limiting irrigators to a particular volume. Similarly, the Minister submitted that irrigators who formerly had an option to draw from a number of resources were intended by the Barossa Water Allocation Plan to be limited in their right to choose the resource from which to draw their allocation. The Minister, it was said, might, for example, limit an irrigator to one resource only. If he allowed an irrigator to draw from more than one resource, the entitlement to each resource was intended to be capped.
The Minister submitted that the Judge’s view rested upon the false premise that the Barossa Water Allocation Plan was particularly concerned about the priority use of surface water. It was suggested that there were technical reasons why it may not have been seen to be a serious policy matter that water is left in dams unused. Attention was drawn to the expert report of Kumar Savadamuthu, which was said to provide one explanation in this respect:
... If surface water allocated to a dam is not taken during summer, some of that water will be lost through evaporation and some probably through seepage. However, since the dam would be less empty in the beginning of next winter, it would fill and spill faster. This would result in more water being available to the watercourse (and for recharge), and it would be available earlier during the season.
It was emphasised that the Barossa Water Allocation Plan expressed the view that current levels of extraction from surface water were thought to be sustainable:
During the development of this water allocation plan it has been concluded that the current level of development approximates the sustainable extraction level for surface water and watercourse allocations. Close monitoring of both flow and river heath is required to assess this over the next five years. There is no intention to change allocations at this stage, however, this policy will be reviewed when both allocation and use can be better quantified, following conversion of allocations to a volume and the implementation of a more comprehensive metering program in the Barossa. In recognition of the impact at lower flows, a number of policies have been introduced in this water allocation plan to improve low flows.
The Zanders’ submission was that the Minister could lawfully assign at least a portion of the entire volumetric allocation, and perhaps the entire allocation, to both dams and underground water with the licensee making a decision on a year-by-year basis whether that portion should be extracted solely from dams, solely from underground water, or from both, but not so as to exceed the total of the entire volumetric allocation. It was said that this approach is consistent with the practice under area based licences, whereby the Zanders were able to select which sources of water they used to irrigate their vines in any given year. In that respect, it was contended that the effect of the transition to volumetric licences, as far as the Zanders’ licence was concerned, was that instead of being licensed to irrigate 28 hectares of land, they were now licensed to use 42 megalitres of water to irrigate their land, otherwise their right to use the water resources endorsed on their licence was unlimited except to the extent the Minister assigned a maximum on each resource which could be in any amount in each case up to the overall volumetric allocation. In this latter respect the Zanders took issue with the Judge’s reasoning.
Construction – General Principles
The modern approach to statutory interpretation was addressed by the High Court in Project Blue Sky v Australian Broadcasting Authority in the following terms:[4]
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[Footnotes omitted. Emphasis added.]
[4] Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355, [69].
This approach was recently reaffirmed by the High Court in Australian Education Union v DECS:[5]
The process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose.
The High Court referred to the argument in that case that it was desirable that the Minister should have “flexibility” and that the relevant provisions might be “unnecessarily prescriptive”. They held that this approach:[6]
... Emphasised a judicially constructed policy at the expense of the requisite consideration of the statutory text and its relatively clear purpose.
The Court held that the “benefits” of the approach:[7]
... Expressed in terms of flexibility, were elevated to a statutory purpose. That purpose lacked a foundation in the text of the Act.
[5]    Australian Education Union v DECS (2012) 248 CLR 1, [26].
[6]    Australian Education Union v DECS (2012) 248 CLR 1, [28].
[7]    Australian Education Union v DECS (2012) 248 CLR 1, [29].
As Gleeson CJ observed in Carr v WA,[8] the general rule of interpretation that a court is to construe legislation in a manner that promotes its purpose or object may be of little assistance where a statutory provision strikes a balance between competing interests and the problem is one of doubt about the extent to which the legislation pursues a purpose. His Honour said:[9]
... Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem. For a court to construe the legislation as though it pursued the purpose to the fullest extent may be contrary to the manifest intention of the legislation and a purported exercise of judicial power for a legislative purpose.
...
... Ultimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling.”
[8] Carr v WA (2007) 232 CLR 138.
[9] Carr v WA (2007) 232 CLR 138, [5]-[6]; Alcan (NT) v Commissioner of Territory Revenue (2009) 239 CLR 27, [51].
This Court has held that an interpretation that leads merely to a degree of apparent inconvenience in a particular case does not make the interpretation wrong:[10]
This construction may lead to some inconvenience in administering the Act. It might mean that it is necessary for a greater degree of administrative oversight of the rate at which water is being extracted from wells in the Hundred of Peake. However, it does not render the Act unworkable. The Minister may act at any time when the rate at which water is being taken is likely to lead to any of the risks listed in s 132(1)(a) or (b). In reality, the Solicitor-General was asking this court to amend the Act to enable regard to be had to future rates of extraction of water and in that way make the administration of this part of the Act somewhat easier. Neither the context nor the purposes of s 132 nor the purposes of the Act call for such a construction. If the court were to yield to this submission it would be usurping the function of the Parliament.
This is consistent with the position of the High Court in Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation:[11]
... If the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that “it may degrade into mere judicial criticism of the propriety of the acts of the Legislature”, as Lord Moulton said in Vacher & Sons Ltd. v. London Society of Compositors; it may lead judges to put their own ideas of justice or social policy in place of the words of the statute. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice. Since language, read in its context, very often proves to be ambiguous, this last mentioned rule is one that not infrequently falls to be applied.
[Footnote omitted.]
[10] Draycott v Minister for Environment and Conservation [2007] SASC 463, [20].
[11] Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (1980) 147 CLR 297, 305.
We consider the Barossa Water Allocation Plan is a statutory instrument by virtue of the provisions of section 4 of the Acts Interpretation Act 1915 (SA).[12] While not free from doubt, the view we prefer is that the principles of construction applicable to statutes also apply to a statutory instrument such as a water allocation plan.[13]
[12] District Council of Munno Para v Remove-All Rubbish Co Pty Ltd (1985) 41 SASR 188, 204; Mount Barker Properties Ltd v District Council of Mount Barker [2001] SASC 249, [6].
[13] Frankham v Adelaide City Council [2004] SASC 263, [20].
Consideration

The primary question before this Court is one of construction of the Barossa Water Allocation Plan and, in particular, clause 5.2.14, which concerns the conversion process from area based to volumetric allocations. We begin with a consideration of the ordinary grammatical meaning of the words of clause 5.2.14 having regard to their context and legislative purpose.
Clause 5.2.14 of the Barossa Water Allocation Plan is fundamentally concerned with the process of converting an area based water allocation to a volumetric water allocation. In the case of the conversion of a single licence endorsed with an area based allocation, which can be taken from more than one resource, the allocation converted to a volume will be assigned to those resources using a hierarchy of surface water, followed by underground water, followed by watercourse water, allocating surface water first up to a prescribed maximum dam storage capacity. The assignment of an allocation to a resource or resources is to take into account the historical use of the resource and any other information the Minister deems appropriate. The conversion must occur and take effect on 1 July following the first full water use year after the date of adoption of the Plan.
The allocation is to be assigned by the Minister amongst the water resources endorsed on the licence. This is implicit in the fact that it is the Minister who has statutory responsibility for converting the licences and the terms of clause 5.2.14(c). The Shorter Oxford English Dictionary relevantly defines the verb “assign” to mean “allot as a share (to)” or “fix, specify”. The obligation imposed on the Minister, or delegate, by clause 5.2.14 is to allot a fixed share of the overall volumetric allocation to which the licensee is entitled between the various resources endorsed on the licence. The assignment commences with the Minister, or delegate, allotting a fixed share of the overall allocation to surface water, if applicable, followed by underground water, if applicable, followed by watercourse water, if applicable. That assignment is undertaken by reference to the historical use of the resource and any other information the Minister deems appropriate. We consider this construction is, at the very least, consistent with the definition of “water allocation” in the glossary in the Barossa Water Allocation Plan.
In our view, the text of the Barossa Water Allocation Plan does not permit the kind of flexibility contemplated by the Judge under appeal. In our view, the language is intractable. The concept of an assignment of the volumetric allocation of water under the licence to the various resources endorsed on the licence does not permit an assignment amongst those resources which in aggregate exceeds the overall allocation, so as to confer a discretion on the licensee to use water from different resources to avoid the mischief of leaving the licensee in any one year with less water than his or her annual allocation. There may be much to be said for allowing licensees who are aware of the climactic variations from year to year on their property to exercise some discretion in the management of the water resources endorsed on their licence, but the terms of clause 5.2.14 do not permit that to occur. The assignment of the allocation must aggregate the total allocation and not exceed it. If the licensee was allotted fixed shares in respect of each resource endorsed on the licence in an aggregate amount exceeding the overall allocation, then that would not constitute an assignment of the allocation within the meaning of the clause.
In our view, this is consistent with the evident object and purpose of the Natural Resources Management Act. As the prime regulatory tool for controlling access to water for irrigation and other commercial purposes, the Barossa Water Allocation Plan is intended to impose a restriction on the previously unrestricted right of licensed irrigators to draw whatever volume they desired from the available water resources. The volumetric allocation more effectively controls the use of the resource by fixing a cap which the licence holder may not lawfully exceed. This encourages the conservation and efficient use of a finite, scarce, precious public resource. A reading of the Plan as a whole discloses that this objective is intended to be achieved by the requirement that the Minister, or delegate, fix a maximum that may be drawn from each resource. This becomes the “safe” maximum limit for community withdrawals from that particular resource. In addition, the aggregate maximum amount that may be drawn by all irrigators is known by the Minister in advance and fixed at a definite level. Such a construction has the advantage that the Minister can monitor with some degree of certainty how much water is being used from each resource.
This leads to the conclusion that in a year of poor rainfall, if the assigned quantity of water is not available from the surface water source, the Plan does not contemplate the licensee being able to make up the differential by the over use of the other assigned sources endorsed on the licence. That involves the risk of over use of other resources in a manner outside the control that the Minister intends to exercise over that resource or those resources. In effect, this would transfer the requirement for an assignment of the allocation from the Minister to the licensee. That would constitute an unauthorised delegation by the Minister to the licensee of the Minister’s regulatory function.
In addition, there are a number of contextual indicators which support the construction we adopt. Pursuant to clause 5.2.6 of the Barossa Water Allocation Plan, the assignment is intended to occur once and for all and apply thereafter unless varied. To confer a discretion upon the licensee would lead to an ad hoc assignment every year which may differ from year to year. The licensee’s decision need not be based on any particular principles or take into account any particular factors. The exercise of the licensee’s discretion may not be informed by the objects and purposes of the Natural Resources Management Act or the Barossa Water Allocation Plan. Where a licensee has concerns about the future availability of surface water, the licensee may prefer to use underground water ahead of surface water and preserve the surface water in a dam for as long as possible, particularly if the licensee is also using it for stock and domestic purposes. The use of water for stock and domestic purposes is unregulated as to volume. Indeed the licensee may wish to trade in water. It cannot be assumed that all license holders, pursuing individual economic interests, will act in a way that achieves the preferred environmental outcome. Allowing irrigators an option to switch to a preferable resource at their discretion does not protect the other resources but exposes them to potentially greater harm when licensees decide it is in their interests to draw from one or other of them.
The limits this construction imposes upon licensees are consistent with the scheme of the Natural Resources Management Act and the Barossa Water Allocation Plan. This can be demonstrated by consideration of the position of an irrigator who has only one resource endorsed on his or her licence. The scheme intends that the licensee’s entitlement to use water from that single resource is capped by volume. If in any one year due to climactic conditions that irrigator has available less water from that resource than the licensee’s allocation, the licensee is obviously restricted to using a quantity of water less than the licensee’s volumetric allocation. That the same result follows where the licensee has more than one resource endorsed on its license cannot give rise to an implication that the Plan permits such licensees to use water from the different resources endorsed on the licence according to the licensee’s discretion in order to avoid the mischief of the licensee in any one year being left with less water than his or her annual allocation.
Conversely, if the licensee enjoyed a discretion as to how much of the overall allocation could be drawn from any of up to three resources, the licensee could draw varying quantities of water from each resource from year to year. The Minister could not control the quantity being used by each licence from year to year or monitor it precisely. It seems unlikely that the Parliament in enacting the legislation or the Minister in adopting the Plan intended such an uncertain and complicated regulatory outcome.
While the assignment of the volumetric allocation prescribed by clause 5.2.14 of the Barossa Water Allocation Plan is to be made in accordance with the specified hierarchy, the assignment amongst the resources endorsed on the licence is informed by the historical use of the resource and any other information the Minister deems appropriate. Accordingly, it does not follow that the Plan requires an assignment in every case as far as possible to surface water. The Minister accepted that, in some circumstances, a volumetric cap may compel a licensee to use underground water while dam water is available to be used. The Minister also accepted that there may be some inefficiency in that case, if only to the extent that the dam water is lost to evaporation or seepage. But, as was submitted by the Minister, it is the ceiling on the take of the underground water or the watercourse water that is intended to protect those particular resources.
Having regard to the foregoing we do not accept that there is an absurdity in a policy position that fixes once and for all extractions from individual resources.
A further indicator which supports the construction we adopt is the provisions in the Barossa Water Allocation Plan for regulating transfers and roll over credits for unused allocations. The Judge acknowledged that his construction allowing a discretionary assignment adds a level of complexity in the application of the relevant principles but considered that this could be accommodated. It is not necessary to decide whether the system of transfers and roll over credits provided in the Plan is capable of accommodating the discretionary assignment of the overall allocation. It is sufficient to conclude that the required accommodation would be so complex that the system of transfers and roll over credits per se contraindicates a construction of the Plan that permits a discretionary assignment.
This analysis demonstrates that the Judge’s construction is not consistent with the scheme of the statutory instrument.
Conclusion
We would allow the appeal. We would answer the preliminary question in the negative.
VANSTONE J: In 2009 a new Water Allocation Plan (the Plan) was adopted for the Barossa prescribed water resources area. It was made pursuant to the Natural Resources Management Act 2004 (SA) (the Act). Absent specific authorisation, landholders in such an area may only use surface, underground or watercourse water for irrigation purposes in accordance with allocations in a water licence: ss 124 to 127. Water allocations granted must be consistent with such Plans: s 153. The respondents, the Zanders, are landholders in the area encompassed by the Plan and have for some years held a licence to take water, being water held in dams on their property (surface water) as well as underground water. Under that licence, the Zanders’ water allocation was limited by the area they could irrigate, but not by the volume they could take.
The Plan required that a water allocation which was previously determined by use and area would be converted to a volumetric allocation, again based on use. Since the Zanders have historically taken water from more than one resource the Plan also required that the allocation be assigned to either one or both of those resources. Therefore it was necessary for the Minister for Sustainability, Environment and Conservation to vary the Zanders’ water allocation: s 156. In due course the Minister advised the Zanders of their new allocation and issued a new licence. Later that was varied and it was agreed that the total water allocation per annum to the Zanders would be 42ML. The Minister proposed that the allocation of 42ML would be assigned, and reflected on the licence, in this way: 21ML to surface water and 21ML to underground water. (Notwithstanding that, we were told that the Minister has sought and will consider the Zanders’ own view as to the split.) This process is regulated by section 5, Water Allocation Criteria, and particularly principle 14 of section 5.2 of the Plan.
The question for decision is concerned with the interpretation of principle 14. In essence, the question is whether the Minister may, in assigning the Zanders’ water allocation, allow them a measure of discretion in choosing the source of the water used, by assigning to each resource a maximum amount, the sum of which exceeds the allocation, albeit with the rider that, irrespective of the source of the water taken, total use must not exceed the allocation.
The Plan appears to come within the definition of “statutory instrument” in s 4 of the Acts Interpretation Act 1915 (SA), although it is not to be assumed that it was drawn with the precision with which a statute or a regulation might be drawn.
The question is essentially a matter of law. The reasoning of the judge under appeal is informative, but it is for this Court to determine whether the answer given was correct.
Background
The objects of the Act include the protection and sustainable use of resources: s 7 of the Act.
Water Allocation Plans are the principal regulatory tool for controlling access to water for irrigation and other commercial purposes: Chapter 4 of the Act and Glengyle Proprietors Pty Ltd v Minister for Environment and Conservation (2009) 105 SASR 520 at [9] to [15] per Kourakis J.
Section 10(1) of the Act imposes on the Minister the responsibility of ensuring that Water Allocation Plans are given appropriate consideration in making decisions about allocation of resources.
The Plan was adopted in June 2009 pursuant to s 80 of the Act. The Plan is divided into a number of sections. Section 4 is entitled “Capacity of the Resource to meet Demands”. At section 4.1 it is noted that accurately quantifying the historical water use in the Barossa was difficult, first because not all water resource extractions had in the past been metered, and second because some allocations were still area based rather than volumetric. It is noted that monitoring levels through annual reporting and the conversion of area based licences to volumetric allocation would allow for more accurate recording of water extraction in the future. At section 4.4 it is stated that current levels of development approximated the sustainable extraction level for surface water and water course allocation. Further, it was recorded that there was no intention to change allocations at this stage, but that this could be reconsidered in the future, once use was better quantified. It was acknowledged that at that time underground water levels were not showing signs of stress. Again, it was not considered necessary at that time to adjust allocations.
Section 5 contains the water allocation criteria. The allocation objectives are at section 5.1. They include the sustainable and efficient use of water resources and enhancement of the quality of those resources. Section 5.2 is entitled “Conversion of Area Based Allocations to Volumetric Allocations”. Section 5.2.6 makes clear that conversions were to take effect once only, and on 1 July following the first full water use year after the Plan’s adoption.
It is convenient to set out principle 14 of section 5.2, the interpretation of which is central to this appeal.
14.In the case of a single licence endorsed with an area based allocation which can be taken from more than one resource, the licence will be varied in accordance with the principles in section 5.2. In addition the following principles will also apply:
(a)Allocations converted to a volume in accordance with section 5.2 will be assigned to a resource/s using the following hierarchy:
o   surface water, followed by
o   underground water, followed by
o   watercourse water.
(b)Surface water will be allocated first, up to a maximum of 70% of dam storage capacity. Dam storage capacity is as defined in principle 9.
(c)The assignment of an allocation to a resource/s takes into account
o   historical use of the resource; and
o   any other information the Minister deems appropriate.
It can be seen that where more than one resource is at issue assignment is to be by reference to a hierarchy: (a), and that assignment is to take into account historical use and any other appropriate information: (c).
The question comes before this Court in the following way.
Section 156(4)(b) of the Act provides to the holder of a water allocation a right of appeal against the Minister’s decision to vary a water allocation in response to an alteration to the Plan. The appeal lies to the Environment, Resources and Development Court (the ERD Court). Upon the Zanders exercising that right, the parties appearing in the ERD Court formulated a preliminary question for determination dealing with the interpretation of principle 14 of the Plan. The ERD Court answered the question against the Zanders’ arguments, finding in effect that the Minister was not permitted by the Plan to assign volumes to individual resources which together exceeded the total allocation. The Court found that a purported assignment of volumes which in total exceeded the volumetric allocation on the licence would not in fact define the entitlement to take water.
The Zanders appealed against that decision to a single judge of this Court. That judge favoured their proposed interpretation. The judge reasoned along these lines. He noted that the apportionment of the allocation between resources amounted to an additional limitation on a landholder’s ability to take water: [15]. He found that the hierarchy specified in principle 14 implied that, so far as possible, assignments should ensure that surface water was used first: [16]. He observed that the volume of surface water varied markedly from year to year and that meant the Minister would have to take care not to assign too great a part of the allocation to surface water in case, in a given year, there was insufficient surface water to fill the landholder’s total allowance: [21]. The judge found that if, responding to this, the Minister reduced the assignment of surface water, then on the Minister’s argument, it could lead to a result in which in high rainfall years surface water remained unused and underground water was needlessly used. This, he said, would subvert the principles of water sustainability underpinning the Plan, and lead to absurdity. The judge found that the terms of the Plan accommodated a more flexible regime in which a range of amounts could be assigned to each resource, so that an amount could be taken from either resource at the landholder’s discretion, always providing that the total allowance was not exceeded: [26]-[27].
The respondents’ argument in this Court for the most part followed the single judge’s reasoning. It was pointed out that only a very few of the area based licences to be converted had allocations from more than one resource. The interpretation taken by the Minister was likely to jeopardise the operations of those few primary producers, irrespective of their efficiency. There was no reason in terms of context or the usual meaning of the verb “to assign” to interpret principle 14(a) as requiring a strict division or apportionment. The respondents argued that the words “assigned” and “allocated” appeared to be used interchangeably in the Plan.
It was put that any allocation which was assigned in terms of principle 14(a) was simply a maximum amount that might be taken from that resource, subject to conditions. If the Minister assigned amounts which together exceeded 42ML – with a condition that no more that 42ML in total could be taken – then the Minister would have assigned the maximum amount that could be taken from each resource. It was said that this would not amount to a delegation of the power of assignment, because a fixed maximum would have been assigned to each resource.

The respondents further argued that, without any question of assigning more than the total allocation, the Minister could achieve the same end by requiring that a certain volume of surface water be used, with the proviso that, where that volume were not available, a certain allocation of ground water could be taken instead. It was argued in this regard that an assignment to a resource if available and, if not available, to another resource, was an assignment on any construction of that word. In addition, such an interpretation would more readily accommodate consideration of historical use, as required by principle 14(c). (Strictly, the question for determination does not require that this further argument be addressed.)
The respondents argued that on the Minister’s proposed assignment the hierarchy contemplated in subparagraph (a) was not acknowledged.
Discussion
In my view the use in principle 14(a) of the verb “to assign” is important. The Oxford English Dictionary (2^nd ed, Clarendon Press, Oxford, 1989, vol 1) gives a number of meanings to this verb. Most apposite are:
1. To allot, appoint, authoritatively determine. 2. To transfer or formally make over to another. 3. To allot (a place) to a person; to appoint or set it apart for a purpose. … 5. To appoint authoritatively, prescribe (a course of action). 6. To appoint, designate, ordain, depute (a person) for an office, duty or fate. … 8. To fix, settle, determine, or authoritatively appoint (a time or temporal limit). … 11. To point exactly, designate, specify. … 13. To ascribe, attribute, or refer, as belonging to or originating in. …
There are several aspects of these definitions which are important. First, it is plain that an assignor may only assign, allot, transfer, authoritatively prescribe, designate, ascribe or refer that which he has. He cannot allot or transfer more than the quantity of that which he has. Secondly, there is a thread of designating, or allotting, prescribing, ascribing, or fixing which runs through a number of the definitions mentioned. It seems inconsistent with that concept to contemplate stipulating a total value which exceeds the initial allocation and which the assignee can then distribute or access as he wishes, albeit being obliged to stay within the initial allocation. That does not seem to me to be an assignment at all. Rather, it seems like merely the imposition of a number of conditions as to how the original allocation may be used; a formula to be applied, rather than an assignment.
I do not accept that the verbs “to allocate” and “to assign” are used interchangeably in section 5.2, or that there is inconsistency in their use. The usage is consistent. An allocation is arrived at. Then the Minister assigns it between the relevant resources. Once that is done it can be said that the licence holder has an allocation of surface water and an allocation of underground water.
Another difficulty with the respondents’ contention is that it would amount to an impermissible sub-delegation by the Minister to the respondents to exercise the discretion as to which water source should be used.
Much the same can be said of the respondents’ second argument, contemplating an assignment to surface water in a given amount, and, if unavailable, to underground water. This would not be consistent with the term “assigned”. At best it would purport to be a provisional assignment, which is not an assignment at all.
I consider that requiring assignment of fixed values which together equal the initial allocation is not only the correct interpretation of section 5.2.14, but also accords with the wider aims of the Plan and the Act.
The interpretation ensures that in the future the amounts of water taken from every resource will be capped and therefore known. This will promote preservation of water resources, the better management of water resources and the sustainable use of those resources. The objectives enumerated in section 5.1 of the Plan will be more likely met.
Conclusion
For these reasons I would set aside the orders of the judge under appeal and answer the question as did the ERD Court, in these terms:
The answer to the preliminary question is “No”. The provisions of the Plan and section 5.2.14 in particular do not permit the sum of the volumes nominated on the licence to each of the individual resources to exceed 42ML.