Murrumbidgee Ground-Water Preservation Association v Minister for Natural Resources
[2004] NSWLEC 122
•04/07/2004
Land and Environment Court
of New South Wales
CITATION: Murrumbidgee Ground-Water Preservation Assocation v Minister for Natural Resources [2004] NSWLEC 122 PARTIES: Murrumbidgee Ground-Water Preservation Association (Appl)
Minister for Natural Resources (Resp)FILE NUMBER(S): 40583 of 2003 CORAM: McClellan CJ KEY ISSUES: Water Rights :- Minister's water sharing plan
Water management principles
Water entitlements
Share components under access licences
Water for the environment
Supplementary water
Transfer of water entitlements
Available water determinations
Administrative Law:
Error of law
Failure to have regard to relevant considerations
Exercise of a discretionary power for an improper purpose
Wednesbury unreasonableness and irrationalityLEGISLATION CITED: Water Management Act 2000 (NSW)
Protection of the Environment Administration Act 1991 (NSW)
Water Act 1912 (NSW)CASES CITED: Abebe v Commonwealth of Australia (1999) 197 CLR 510 ;
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223;
Australian Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321;
Bruce v Cole (1998) 45 NSWLR 163 ;
Cooper Brookes (Wollongong) Pty Limited v Commissioner of Taxation (Cth) (1981) 147 CLR 297;
Council of Civil Service Unions & Ors v Minister for Civil Service [1984] 3 All ER 935 ;
Gamaethige v Minister for Immigration and Multicultural Affairs (2001) 183 ALR 59;
Greenpeace Australia Ltd v Redbank Power Company Pty Ltd (1994) 86 LGERA 143;
Haines v Annwrack Pty Ltd (1980) 39 LGRA 404;
Hall v Green (1999) 48 NSWLR 161;
Hope v Bathurst City Council (1980) 144 CLR 1;
Industrial Equity Ltd v Deputy Federal Commissioner of Taxation (1990) 170 CLR 649;
Leatch v National Parks and Wildlife Service (1993) 81 LGERA 270;
Makita Pty Ltd v Sprowles (2001) 52 NSWLR 704;
Minister for Aboriginal Affairs & Anor v Peko-Wallsend Ltd & Ors (1986) 162 CLR 24;
Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 42;
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611;
Nicholls v Director-General of National Parks and Wildlife Service (1994) 84 LGERA 397;
Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997;
Parramatta City Council v Pestell (1972) 128 CLR 305;
Pyramid Building Society v Terry (1997) 189 CLR 176;
R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170;
R v Young (1999) 46 NSWLR 681;
Randwick City Council v Minister for the Environment (1999) 167 ALR 115;
Taveli v Minister for Immigration, Local Government and Ethnic Affairs (1989) 86 ALR 435;
Water Resources Commission of New South Wales & Ors v The State of South Australia & Ors (unreported, Land & Environment Court, 9 October 1981)DATES OF HEARING: 15-18 December 2003; 5 February 2004; 24 February 2004; 19 March 2004 DATE OF JUDGMENT: 04/07/2004 LEGAL REPRESENTATIVES: J Smith/M N Allars (Resp)
J Basten QC/L M Byrne (Appls)
Jenni Mattila & Co (Solicitors - Appls)
I V Knight (Solicitor - Resp)
JUDGMENT:
IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
40583/03
WEDNESDAY, 7 APRIL 2004McCLELLAN J
- Applicant
- Respondent
Introduction
1 HIS HONOUR: The applicants seek a declaration that the Water Sharing Plan for the Lower Murrumbidgee Groundwater Sources 2003 (“Plan”) made by the Minister under s 50 of the Water Management Act 2000 (NSW) is invalid. The Plan has, like many other Plans made for the surface waters and groundwaters of the State, been the subject of considerable controversy. To date, there have been eleven legal challenges to various Plans commenced in this Court.
2 The history of the management of the available water in Australia has been documented by others (see eg: Barr & Cary, Greening a Brown Land, 1992). There is a view, still advanced by some commentators, that Australia has virtually unlimited water which only needs to be effectively harvested to make the vast area of semi-arid land within the country productive. From the late 19th century to the latter part of the 20th century this was the typical view both of those responsible for managing water resources and of the farmers who utilised the water. Although no doubt made with the best of intentions, management decisions designed to facilitate the maximum utilisation of water for farming purposes have proved to be unsustainable. Change to water management policy has been necessary, often with serious financial consequences for those who have invested capital on the assumption that water would be available. As recently as 1981, this Court was urged by the South Australian Government to refuse an application for a water licence on the Murray River but instead, the Court accepted the submission of the New South Wales Water Resources Commission that water was available and granted the licence: see Water Resources Commission of New South Wales & Ors v The State of South Australia & Ors (unreported, Land & Environment Court, 9 October 1981). That decision, like many others, has later proved to be at odds with the proper management of water resources within the state. The mistakes and identified problems are not unique to Australia. They have led in part to contemporary approaches to environmental issues including the development of the “precautionary principle”.
3 For a number of years the relationship between the use of water for irrigation and salinity problems has become increasingly apparent. This is the case in the Lower Murrumbidgee Groundwater Management Area (“LMGMA” or “Area”). This Area lies mainly between the towns of Narrandera, Booligal, Balranald and Jerilderie and covers an area of approximately 3.3 million hectares. Significant salinity problems have been experienced in the south-western portion of the Area. There are, for relevant purposes, two groundwater sources in the Area. One is known as the Shepparton and the other as the Calivil and Renmark. The Shepparton is between 50 and 70 metres below the surface. The Calivil and Renmark extends from the bottom of the Shepparton to the bedrock and is typically 100 to 300 metres thick.
4 During the earlier part of the 1990s the approach taken by the Department of Land and Water Conservation (now incorporated into the Department of Infrastructure, Planning and Natural Resources) to increasing salinity in the Area was to encourage farmers to take water from the deep groundwater sources. The expectation was that this would lower the water table to the benefit of the arable land by reducing the salt content of the water at or near the surface. Commonly referred to as a “controlled groundwater depletion policy”, it led, together with the impact of drought, to a significant increase in the water taken from the aquifers from about 1991 onwards. Entitlements in 1990/1991 totalled 211,300 ML/yr with usage of 96,923 ML. By 2002/2003 (a drought year) entitlements had risen to 520,000 ML/yr with usage of 380,000 ML in that year. These numbers reflect not only increased utilisation of water but also a major change in the expectation of those people who use irrigation as part of an agricultural enterprise.
5 In general terms, the consequence of the Plan under challenge is to significantly reduce both “theoretical” entitlements and the amount of water actually made available to users. The management strategy of depleting the groundwater source has been abandoned. Some farmers who have recently made capital investments with the expectation of receiving water will probably lose part of the benefit of that investment unless they can acquire water entitlement from others who either cannot or chose not to use the whole or part of their entitlement. They must, of course, pay the market price for that entitlement. The applicants allege that the Plan as made produces inequities, benefiting some farmers and damaging others. It is submitted that these inequities are extreme and that the Plan has no rational basis and is invalid.
The hydrogeological character of the Water Management Area
6 I have included a plan of the Lower Murrumbidgee Groundwater Management Area.
7 Within the Area there is a low salinity zone (electrical conductivity (EC) typically less than 500 mg/L). The extent of the low salinity zone has been estimated at 6,500 square kms to 6,891 squre kms. East of Hay the low salinity groundwater area covers approximately 30% of the whole of the Area. The dominant recharge zone for the low salinity groundwater occurs in the eastern part of the Murrumbidgee alluvial fan near Narrandera. Recharge also occurs in the Area from precipitation and surface water irrigation. To the west of Hay is an area of high salinity extending beyond Balranald. This area obtains no recharge from the river system and is accepted to be stressed, previously excessively exploited, and in need of particular care.
8 Although not all of the water is available for extraction, it is estimated that the volume of groundwater in storage within all aquifers in the Area is 1,960,000 GL with low salinity groundwater storage estimates of 200,000 GL to 280,000 GL.
- The evidence of Dr Drury
9 Dr Len Drury, an hydrogeologist, gave detailed evidence. The Minister objected to his evidence but I am satisfied it should be admitted. The basis for the objection was that Dr Drury failed to explain how his opinions are wholly or substantially based upon his expertise (see Makita Pty Ltd v Sprowles (2001) 52 NSWLR 704). The opinions were said to be “simply ipse dixit and do not fall within the exception to the hearsay rule.”
10 Dr Drury’s report, which was tendered in evidence, was accompanied by a detailed curriculum vitae. He holds a Bachelor of Science degree from the University of New South Wales, a Diploma in Hydrology and a Doctorate of Philosophy. Commencing employment as a cadet hydrologist with the Water Resources Commission New South Wales he has worked in government and private practice in relation to both surface and groundwater problems for many years. He has worked in 27 countries participating in over 30 international water resources and development projects.
11 Dr Drury’s report expresses a number of opinions. It is not possible in these reasons to capture them all. Some matters I have analysed in greater detail. I am satisfied that he is qualified to hold the opinions he has expressed and they are derived from the application of his specialised knowledge as an hydrogeologist to the available information with respect to the structure and historical performance of the relevant water bodies. Dr Drury concludes that some outcomes of the Plan are “irrational”. I understand these opinions to reflect his understanding as an hydrogeologist.
12 I am satisfied that the facts and circumstances to which Dr Drury has applied his learning have been adequately explained in his report. When considering whether the Plan fails because it is irrational, the Court must undertake a different task to that completed by Dr Drury. But that does not make his opinion as to the operation of the existing groundwater systems and the likely impact of the water management regime proposed by the Plan irrelevant or inadmissible.
13 Dr Drury explained the relationship of the groundwater aquifers to the river system and the difference in quality of groundwater in the low salinity area and that in the high salinity area west of Hay. He also identified the extent to which, in his opinion, the aquifer functions as an integrated unit. His conclusions are as follows:
(a) before the development of irrigation in the LMGMA, groundwater in all the geological units regionally flowed slowly, probably around 7m to 10m/year (in aquifers), from east to west under gentle hydraulic gradients. However, clearing native vegetation, groundwater pumping and irrigation has altered the natural groundwater movement. Pumping may result in minor local effects or may be of regional significance, depending on extraction volumes, recharge conditions and hydraulics of the aquifer system. Pumping may effect pressure heads in various aquifers, alter direction of groundwater flow and modify chemistry. Therefore groundwater extraction may have significantly altered groundwater movement in certain parts of the LMGMA.“From the data available, I would conclude that the general overall trends in groundwater behaviour are:-
(b) in the eastern part of the LMGMA aquifer recharge occurs from leakage of low salinity water from the Murrumbidgee River, rainfall and irrigation activity. In 1997, Ref: 7 recognised “a major natural recharge area is clearly present along the Murrumbidgee River between Narrandera and Darlington Point”. The dating of groundwater age (Ref: 30) also indicates the existence of this surface water recharge area. Ref: 26 indicates that an important source of recharge to the deep aquifers of the LMGMA occurs upstream of Narrandera. Thus in the Darlington Point to Narrandera area the Murrumbidgee River appears to be generally in hydraulic connection with shallow alluvial aquifers of the Shepparton Formation. Upstream of Narrandera the deep aquifers appear in hydraulic connection with the Murrumbidgee River. This watercourse situation is referred to as a “connected stream” (see Figure 4). In these areas groundwater extraction may increase water losses through vertical leakage from the watercourse to the immediate underlying aquifer. Downstream from Darlington Point, the Murrumbidgee River becomes a “disconnected” type stream.
(c) rainfall, surface water irrigation activity (particularly the CIA and MIA) and groundwater irrigation development also leak water from the surface to the underlying Shepparton Formation. Where the rate of surface water infiltration is higher than the vertical permeability of the underlying sediment, then water levels will rise towards the surface. Depending on the areal extent of the aquifers and aquitards and the rate of water accession, waterlogging and soil salinisation may develop when water levels reach within a few metres of the surface. This may result in degradation of the environment and loss of productive land. This is reported in Ref: 14, which estimates that up to 80% of the MIA is affected by shallow water tables, with loss of 5% of productive areas due to waterlogging and salinity. Groundwater management plans are operational within the MIA to maintain water levels several metres below the surface. Ref: 45 indicates localised changes to the hydrogeology of the CIA, where 66% of the water table in the Shepparton Formation, which used to be 15m to 20m beneath the surface, was within 2m of the surface in Year 1992.
(d) in the recharge areas low salinity groundwater also infiltrates vertically downwards through the Shepparton Formation into the deep Calivil Formation, and in turn, the Renmark Group aquifers. This is because the water levels (piezometric surface) in the deeper aquifers are lower than in the shallow Shepparton Formation, for example, Piezometer s 30316:30326 south of Narrandera; 36368/1:36368/3 at Gogeldrie Weir and piezometer nests 36267 and 36798 in the MIA (water level plots in Annexure D, piezometer locations on Figure 9).
(f) from Darlington Point to the west of Hay there is a reversal in vertical flow direction. The groundwater in the deeper aquifers, now of more brackish water due to long residence time along the westerly flow path, moves upwards. The presence of subsurface bedrock ridges, such as the Iona Ridge, modify groundwater movement and cause the deep aquifer water table to rise towards the surface (Ref: 27). Water levels in the deep aquifers become gradually higher than those in the shallow Shepparton Formation aquifers. This is known as a groundwater discharge zone with water levels in the deeper aquifers near Balranald coming close to the surface. There are no piezometers examined in the Hay to Balranald area, where full discharge characteristics in all aquifers are exhibited. For example, in Piezometer 36789 (Lowbidgee Irrigation area, Area E, Annexure D), the deep Renmark Group aquifers (36789/4, 36789/3) have shallow water tables, however, the shallow Shepparton Formation aquifer (36789/1) is draining downward to the Calivil Formation (36789/2). Thus as far west as Balranald full aquifer discharge behaviour is not observed. “(e) another source of water recharge to all aquifer systems is throughflow. This occurs from up gradient aquifers of the Murrumbidgee River alluvium through the narrow bedrock gap at Narrandera. The system is complicated as the LMGMA is not a complete hydrogeological entity. It is hydraulically connected to the north and south with the Lachlan and Murray alluvial sediments. In this regard, Ref: 7 indicates additional groundwater throughflow entry into the aquifer system from the Murray River and associated irrigation areas and tributaries, especially between Hay and Balranald.
Management Zones
14 To facilitate management of the underground water resource, the Area has been divided into ten zones which have been referred to during the evidence. It is useful to identify these zones which are referred to later in these reasons:
| Zone No. | Zone Name |
| 1 | Euroley |
| 2 | Darlington Point |
| 3 | Carrathool – Hay |
| 4 | Conargo |
| 5 | Urana |
| 6 | Hay – Balranald |
| 7 | Coleambally Irrigation Area (CIA) |
| 8 | Murrumbidgee Irrigation Area (MIA) |
| 9 | Wah Wah – Booligal |
| 10 | Lowbidgee |
The history of the use of groundwater
15 Dr Drury discussed and analysed the history of the use of the groundwater in the Area, which commenced in 1969. Twenty-five bores were operational in 1976 but sixty production bores were operational by 1982. The volumes of groundwater entitlement and irrigation usage between 1982 and 2001 in the Area, recorded by the Department of Infrastructure, Planning and Natural Resources, are given in the following table:
ENTITLEMENTS AND GROUNDWATER EXTRACTION
Year Entitlement (ML/year) Usage (ML/year)
16 Dr Drury commented upon this usage in the following manner:
“Groundwater allocation for the Year 2002/2003 (approximately 520GL/year) was around 0.2% of total groundwater stored in the low salinity alluvial fan (280,000GL).
Groundwater extraction entitlements rose sharply in 1994/1995 (+60,000ML/year) due to drought condition and government policy (including controlled groundwater depletion policy, Ref: 18), and again in 1997/1998 (+80,000ML/year), due to drought and the threat of a moratorium on future applications (Ref: 4).
In Year 2000/2001 the aggregate groundwater entitlement allocation was 529,221ML/year to 210 license holders and 233,211ML of groundwater extracted (44% of allocation), mainly from aquifers within the Calivil Formation and Renmark Group. Most of this water was used for irrigation purposes. Less than 1% of this total usage in Year 2000/2001 was for town water (entitlement of 2,210ML/year, usage of 992ML/year) to Darlington Point, Coleambally and Carrathool (Refs: 1 and 18).
Between Years 2001 to 2003 groundwater extraction rose by an additional 150,000ML/year (60% of Year 2000/2001) or around 73% of total allocation.
Refs: 1 and 4 estimate stock and domestic groundwater usage of 4000ML/year, mainly from the Shepparton Formation (3,000ML/year) and upper Calivil Formation (1,000ML/year).
Ref: 18, indicates that to prevent waterlogging and soil salinisation, there are unlicensed bores and tile drain systems extracting groundwater from the shallow Shepparton Formation aquifers in horticultural irrigation areas.
Refs: 2, 3 and 5 indicate that in the early 1990’s government policy guidelines encouraged groundwater use in the LMGMA as a primary method of lowering water tables. The policy allowed for a gradual decline in the groundwater resource by 1m/year in the low salinity area (commonly referred to as “water mining”) with an entitlement allocation of up to 650,000ML/year.
It appears that DIPNR has also allowed groundwater use for rice irrigation, a practice not allowed in groundwater licence conditions at least before 1989 (Ref 33).
The distribution of groundwater extraction from high yield production bores in the deep aquifers is not uniform over the LMGMA. This is illustrated in Table 3 for Year 2000/2001. Figures 7 and 8 show the distribution of groundwater allocation and usage in Year 2000/2001 respectively (after Ref: 4).
Table 3 will be used here in discussion, as volumes extracted according to DIPNR zones have not been supplied for Years 2001 to 2003.
(rank)
17 Dr Drury concluded:
The other areas of high groundwater entitlement (cumulatively 42% of the total Area) are in the Carrathool to Gundaline (Zone 3) and Steam Plains (Zone 4) areas in the southern and central parts of the Area. These latter areas are away from the dominant recharge areas, with groundwater taken from deeper aquifers of presumably lower permeability and greater water level drawdown for equivalent groundwater discharge.”“The most intense groundwater usage (usage ML/hectare) occurs in parts of Darlington Point (Zone 2), Euroley (Zone 1) and CIA (Zone 7) within, or close to, the eastern dominant aquifer recharge zone, where deep aquifers should overall have high permeability. Some 48.5% of groundwater entitlement for the total Area in Year 2000/2001 is assigned to these areas.
18 Dr Drury identified the fact, which is not in dispute, that the result of the issue of large groundwater entitlements from 1997 onwards, where the overall allocation increased by 72% (372,000ML/year in 1996/1997 to approximately 520,000ML/year in 2002/2003), was unsustainable groundwater extraction in specific parts of the Area, particularly Carrathool to Gundaline and Steam Plans.
19 It is accepted by the present applicants that it is necessary to take action to reduce extraction levels so that at least the groundwater system could be stabilised and the environmental quality of the Area would not be further damaged.
Dr Drury’s analysis of the effects of groundwater extraction
20 Dr Drury has examined the effect of the use of groundwater by a detailed analysis of the available data taken from piezometers located throughout the Area and the history of known water usage. He divided the Area into five sub areas which I shall refer to as Sub-Areas A to E inclusive. They are as follows:
Sub-Area ASUB-AREA A - Darlington Point and Narrandera and CIA; including the three high groundwater extraction areas (ML/hectare) - Zones 1, 2 and 7, plus 5 (north);
SUB-AREA B - north of the main recharge area to the MIA, Zone 8;
SUB-AREA C - central zone, away from Recharge areas - Zones 3 and 4 (east) and 6 (east);
SUB-AREA D - central LMGMA boundaries - Zones 4 (south), 5 (south) and 9; &
SUB-AREA E - Hay to Balranald – Zones 4 (west), 6 (west) and 10.
21 Dr Drury’s conclusions in relation to Sub-Area A are:
“Overall aquifers in these zones exhibit ready recharge conditions, some degree of interconnection, high permeability, high groundwater yields, low salinity and overall appear to be controlling rising water tables in the shallow Shepparton Formation.
The fact that 138,227ML of groundwater were extracted in 2002/2001 (59% of the total groundwater pumped from the LMGMA) with overall minimal decrease in water levels, indicate the sustainability of the groundwater system in these zones. Within these areas, variations to this trend will occur.
It would be anticipated that along the south-western and western boundaries of [Sub-]Area A, that overall aquifer permeability would be lower, and individual bore yields and capacity less.”The areas of concern, where groundwater extraction may need some control, are mainly along the western boundaries with Zones 3 and 4 and the southern and central part of the CIA, with increasing distance from the dominant recharge sources.
Sub-Area B
22 Dr Drury concluded that in Sub-Area B, due to the long-term surface water irrigation recharge within the MIA, the historical (pre-pumping) water level behavioural pattern observed in the piezometers appears quite different to that in Sub-Area A.
23 He says:
“Overall aquifers in these zones exhibit good recharge conditions under the MIA and Benerembah eastern extension, poor connection to the Murrumbidgee River, and groundwater yields appear to be controlling rising water tables. These might be from the deep aquifer systems, or shallow tile drains and pumps within the MIA water management system.
Based on the piezometer data reviewed the areas of concern appear to be along the southern boundary with Zones 1 and 2, where major groundwater extraction occurs.
Historically most of [Sub-]Area B has been an area of intense irrigation activity with greater quantities of water infiltrating to the subsurface than natural levels. I have not viewed any records of water level before irrigation in the MIA. However as shown in the Willbriggie and Benerembah areas, water levels in the late 1970’s were 15m to 20m beneath the surface. In my opinion, in absence of other data, it would be reasonable to believe that pre-irrigation water levels under the MIA were at similar levels. It may be that many of the water level drawdowns in the observed DIPNR piezometers are still above steady state, pre-irrigation groundwater levels.”The groundwater yields and water level in some of these areas need control and an appropriate management strategy to avoid excessive water use and environmental harm.
Sub-Area C
24 Dr Drury concludes that Sub-Area C has different hydrogeological characteristics to either Sub-Area A or B.
25 He says:
“In Year 2000/2001 Zones 3, 4 and 6 were ranked 2, 3 and 8 in total groundwater extraction (38% of total LMGMA) with 46% of total entitlements.
Overall the hydrographs indicate continuing and substantial water level recovery declines in the Steam Plains to Gundaline to Carrathool area, in the order of 10m to 17m. In my opinion, declining recovery level in this area is due to the cumulative local groundwater extraction volume, the concentration of production bores in clusters of neighbouring irrigation properties, the absence of major water recharge sources in close proximity, and lower permeability than [Sub-]Area A. In this area there is also a progressive increase in salinity in the Shepparton Formation to the west.
The piezometric surface of the various aquifers in this area has been substantially altered, indicating that groundwater withdrawal has had an impact in the central part of the LMGMA.
In common with other areas there are general trends for good hydraulic interconnection between the lower part of the Shepparton Formation, Calivil Formation and Renmark Group.
Water levels [sic] rises in the Shepparton Formation have been controlled by groundwater extraction from the deeper aquifers.
The relative isolation of the shallow Shepparton Formation from the deeper aquifers may imply that a long time frame may be required for slightly more saline water to reach the deep aquifers.”There is a possibility of poorer quality groundwater from shallow horizons vertically leaking to the deeper aquifers in the long-term.
Sub-Area D
26 Dr Drury’s conclusions for this area are as follows:
“In summary, along the northern and southern borders of the LMGMA salinity remains fairly constant at around 1500 to 3000mg/L. However other groundwater characteristics are significantly different. This includes:-
(i) large variations in aquifer characteristics;
(iii) both recharge and discharge characteristics along the southern boundary and recharge characteristics in the Wah Wah Irrigation District.”(ii) both rising and declining water levels along the southern boundary and generally steady water level conditions in the north;
Sub-Area E
27 This is the area showing the greatest stress from use of the aquifer for irrigation. Dr Drury’s conclusions for this area were:
“(i) salinity in all aquifers west of Hay varies from 1,000mg/L near Hay to 14,000mg/L, with the upper aquifers generally being more saline;
(ii) aquifer permeability is usually low; and
(iv) inversions of the natural piezometric surface are not indicated in Sub-Area E.”(iii) most aquifers have maintained steady state or slightly rising water levels. Overall the amplitude of water levels remain fairly constant. In my opinion most piezometers indicate little effect from large groundwater extraction to the east.
What does Dr Drury’s evidence tell us?
28 From Dr Drury’s evidence it is apparent that various parts of the Area respond differently to the current rate of groundwater extraction. Some parts of the Area from which groundwater is being pumped do not show groundwater levels to be declining. In others Dr Drury concludes that there is evidence of declining levels due to a level of pumping beyond the natural rate of recharge. These findings are central to the case which the applicants seek to make.
29 Dr Drury concludes that the dominant reason for water level decline in zones 8 and 4 is localised groundwater extraction. He also concludes that the results confirm the capacity of the deep aquifer system to sustain large groundwater extraction in the recharge area between Darlington Point and Narrandera. Rather than finding a uniform response to groundwater extraction throughout the area, Dr Drury found that “the results indicate highly variable responses to groundwater extraction in the deep aquifer throughout the LMGMA.”
30 Dr Drury expressed the opinion “that recharge is site specific and its occurrence is highly variable across the LMGMA, with river and recharge predominantly occurring in the far eastern sector. Aquifer recharge, and thus sustainable yield, is not equally distributed throughout the LMGMA.”
The evidence of Mr Lawson
31 Mr Scott Lawson is an hydrogeologist with the Department of Infrastructure, Planning and Natural Resources. He has been involved since 1990 in contributing to the development of the Lower Murrumbidgee groundwater flow model and, since 2001, in the preparation of the Plan. He has been the Department’s representative on the Murrumbidgee Groundwater Management Committee since July 1998. His evidence as to the nature and hydrological performance of the Area was not significantly different to the evidence of Dr Drury. The disagreement between them is essentially limited to a debate about the appropriate response to the identified problems.
32 Like Dr Drury, Mr Lawson accepts that recharge in the Area may be site-specific and does not occur at equal rates throughout. He believes that, at present, the long-term groundwater levels at Darlington Point are reasonably stable due to the recovery of the aquifer after extraction. However, he said that this did not mean current levels of extraction were sustainable. Mr Lawson suggests that the source of the recharge was the Murrumbidgee River, which is itself part of the highly stressed Murray Darling Basin river system. Accordingly, although the aquifer is adequately recharged this may be at a cost to the Murray Darling system.
33 Mr Lawson believes the appropriate response to the identified problem is to make a uniform reduction in entitlements for all irrigators irrespective of whether they are in a high or low recharge location. He justifies this approach because of his understanding that the aquifers in the Area form one unified source of water. He described the aquifer in the following terms:
- “Groundwater travels via throughflow to all parts of the groundwater system, with the result that extraction does not have to be precisely proportioned to match local recharge.
- While it is accepted that aquifer recharge and potential groundwater extraction are not evenly distributed across the Plan area, each of the aquifer system components is inter-connected. An activity in one area, or at one depth, will result in changed conditions elsewhere in the aquifer system. It was because of this unevenness but interconnectedness that the groundwater model [being the one used for the Plan] was developed.”
34 When cross-examined, Mr Lawson accepted that little is known about the degree of connection between different parts of the groundwater system. To the extent that connectivity is known to exist, it varies between different parts of the system. He acknowledges that the movement of water occurs at a very slow rate. When it was suggested to him that a molecule of water might take 150,000 years to move through the Area he responded by saying it would take “a long time”.
35 Mr Lawson also accepted that the extraction of groundwater in one location may have no measurable impact upon water in another location. He accepted that there may be no hydrogeological rationale for a reduction of the level of extraction in the Darlington Point area itself, but emphasised that there was a hydrogeological justification for reduction of extraction in that location as part of an effort to control extraction throughout the whole groundwater system.
36 The view Mr Lawson expressed is that “[w]e’re not dealing with separate systems that operate independently. We are dealing with one large groundwater system. The approach has been taken that all users would contribute to the reductions required to get that basin onto a long-term sustainable basis.”
The program of reform
37 Since 1995 a concerted program of water management reform has been undertaken in New South Wales. It is part of a nationwide process of reform agreed by the Council of Australian Governments. (See Support Package for River, Groundwater and Water Management Committees (June 1998); National Strategy for Ecologically Sustainable Development (1992); Inter-Governmental Agreement on the Environment (May 1991); and National Water Quality Management Strategy (1992)).
38 In 1998 the Minister established the Murrumbidgee Groundwater Management Committee with a view to formulating a water management plan for groundwater in the Area through a process involving community consultation. This was done in pursuance of the New South Wales State Groundwater Policy Framework Document adopted in 1997 by the Department of Land and Water Conservation. The Committee was comprised of representatives of various interest groups, including user groups, and met regularly. The need for change in groundwater management was obvious due to the problem with recharge and increased salinity in parts of the Area.
39 The Committee was active before the enactment of the Water Management Act 2000, which was assented to on 8 December 2000 and partially came into force on 1 January 2001. In March 2001 the Minister reconstituted the Committee as a committee under s 388 of the Act for the purpose of assisting in the preparation of the Plan.
The Water Management Act 2000
40 The Water Management Act 2000 provides the statutory framework for the reform of water management in New South Wales. As is now common in legislation, a statement of the Act’s objects is provided in Section 3. It takes the following form:
“The objects of this Act are to provide for the sustainable and integrated management of the water sources of the State for the benefit of both present and future generations and, in particular:
(i) benefits to the environment, and(a) to apply the principles of ecologically sustainable development, and
(b) to protect, enhance and restore water sources, their associated ecosystems, ecological processes and biological diversity and their water quality, and
(c) to recognise and foster the significant social and economic benefits to the State that result from the sustainable and efficient use of water, including:
- (ii) benefits to urban communities, agriculture, fisheries, industry and recreation, and
- (iv) benefits to the Aboriginal people in relation to their spiritual, social, customary and economic use of land and water,
(d) to recognise the role of the community, as a partner with government, in resolving issues relating to the management of water sources,
(e) to provide for the orderly, efficient and equitable sharing of water from water sources,
(f) to integrate the management of water sources with the management of other aspects of the environment, including the land, its soil, its native vegetation and its native fauna,
(g) to encourage the sharing of responsibility for the sustainable and efficient use of water between the Government and water users,
(h) to encourage best practice in the management and use of water.”
41 Chapter 2 of the Act, entitled “Water management planning”, commences with a statement of water management principles. General principles, as well as principles in relation to specific activities are provided. The general principles include:
- “5(2) Generally:
- …
- (c) the water quality of all water sources should be protected and, wherever possible, enhanced, and
- …
- (g) the social and economic benefits to the community should be maximised, and
- … .”
42 In relation to water sharing the principles are:
- “(3) …
- (a) sharing of water from a water source must protect the water source and its dependent ecosystems, and
- (b) sharing of water from a water source must protect basis landholder rights, and
- (c) sharing or extraction of water under any other right must not prejudice the principles set out in paragraphs (a) and (b).”
43 The Act contemplates the making of a State Water Management Outcomes Plan (“the State Plan”). The State Plan is to provide for over-arching policy context targets and strategic outcomes, promote the water management principles in the Act and give effect to any government policy statement in relation to salinity strategies (s 6). The State Plan must be consistent with the State government’s obligations arising from any inter-governmental agreement or government policy, including any policy in relation to the environmental objectives for water quality and river flow.
44 Section 9 obliges persons exercising functions under the Act to “take all reasonable steps to do so in accordance with, and so as to promote, the water management principles of [the] Act.” Section 9(1)(b) obliges the relevant person to give priority, as between the principles for water sharing in s 5(3), to those principles in the order in which they are set out in the subsection. Accordingly, priority must be given to protecting the water source as against protecting landholder rights. All functions are to be exercised to give effect to the State Plan.
45 The Act provides for the creation of management committees. They must have at least 12 but not more than 20 members of whom:
- “(a) at least two are to be persons appointed to represent the interests of environmental protection groups, and
- (b) at least two are to be persons appointed to represent the interests of water user groups, and
- (c) at least two are to be persons appointed to represent the interests of local councils, and
- (d) at least one is to be a person appointed to represent the interests of catchment management boards and trusts, and
- (e) at least two are to be Aboriginal persons appointed to represent the interests of Aboriginal persons, and
- (f) at least one is to be a member of staff of the Department, and
- (g) at least one is to be a person nominated by the Minister for the Environment, and
- (h) such other persons as are appointed to represent such interests as the Minister considers require representation, and
- (i) one is to be a person (not being a member of staff of the Department) who is appointed as an independent chairperson for the committee.”
46 The tasks of a committee may include:
- “(a) to prepare a draft management plan for the water management area,
- (b) to review a management plan that is in force for the water management area,
- (c) to investigate such matters affecting the management of the water management area as the Minister refers to it for investigation,
- (d) to report to the Minister on such matters affecting the management of the water management area as the Minister refers to it for report,
- (e) to advise the Minister on such matters affecting the management of the water management area as the Minister refers to it for advice.”
47 A management committee is required to exercise its functions “consistently with the principles of ecologically sustainable development.” S 14(3).
- Management Plans
48 Part 3 of Chapter 2 provides for the making of management plans.
49 Pursuant to s 15 the Minister may direct a management committee to prepare a draft management plan on any aspect of water management and may set terms of reference according to which such a plan is to be prepared.
50 Section 16 provides that a management plan is to be consistent with the State Plan, various regulations and policies, including “government policy in relation to the environmental objectives for water quality river flow” (s 16(1)(e)).
51 Pursuant to s 16(2) government policy “includes such matters as are declared by the Regulations to be government policy.” Section 17 of the Act provides for matters which may be included in a plan. It states as follows:
- “A management plan for a water management area may contain the following kinds of provisions:
- (a) provisions with respect to the preservation and enhancement of the quality of water in the water sources in the area,
- (b) provisions with respect to the kinds of monitoring and reporting requirements that should be imposed as conditions of approvals having effect within the area,
- (c) provisions with respect to the conditions to which access licences and approvals having effect within the area are to be subject ( mandatory conditions ),
- (d) provisions indicating the circumstances in which, the matters in respect of which and the extent to which the management plan may be amended by the Minister during the period for which it is in force,
- (e) provisions with respect to such other matters as may be authorised by the regulations.”
52 When a plan is being formulated by a management committee, it must have “due regard to the socio-economic impacts of the proposals considered for inclusion” and to the “effect within each water management area or water source to which the plan applies of activities occurring, or likely to occur, outside each area or water source” (s 18).
53 Section 20 provides a statement of “core water sharing provisions” which must be included in a plan. These are as follows:
- “(1) The water sharing provisions of a management plan for a water management area or water source must deal with the following matters:
- (a) the establishment of environmental water rules for the area or water source in relation to each of the classes of environmental water referred to in section 8(1),
- (b) the identification of requirements for water within the area, or water source, to satisfy basic landholder rights,
- (c) the identification of requirements for water for extraction under access licences,
- (d) the establishment of access licence dealing rules for the area or water source,
- (e) the establishment of a bulk access regime for the extraction of water under access licences, having regard to the rules referred to in paragraphs (a) and (d) and the requirements referred to in paragraphs (b) and (c).
- (2) The bulk access regime referred to in subsection (1)(e):
- (a) must recognise and be consistent with any limits to the availability of water that are set (whether by the relevant management plan or otherwise) in relation to the water sources to which the regime relates, and
- (b) must establish rules according to which access licences are to be granted and managed and available water determinations to be made, and
- (c) must recognise the effect of climatic variability on the availability of water, and
- (d) may establish rules with respect to the priorities according to which water allocations are to be adjusted as a consequence of any reduction in the availability of water, and
- (e) may contain provisions with respect to the conditions that must (as mandatory conditions) be imposed on access licences under section 66(1), including conditions providing for the variation, from time to time, of the share and extraction components of access licences, and
- (f) must be consistent with the water management principles.
- (3) The rules referred to in subsection (2) (d) must comply with the priorities established under section 58.
- (4) The access licence dealing rules established under subsection (1)(d):
- (a) must comply with the access licence dealing principles, and
- (b) subject to those principles, may regulate or prohibit any dealing under Division 4 of Part 2 of Chapter 3.”
54 Additional matters which may be included in a management plan are provided by s 21.
55 Provision is made in Division 3 of Part 3 of Chapter 2 for water use. Section 23 provides core provisions for water use as follows:
- “The water use provisions of a management plan for a water management area must deal with the following matters:
- (a) the identification of existing and potential water use practices and related activities,
- (b) the identification of those uses and activities which have adverse impacts, including cumulative impact, on water sources or their dependent ecosystems or on other water users,
- (c) the identification of the occurrence of land degradation, including soil erosion, compaction, geomorphic instability, contamination, acidity, waterlogging, decline of native vegetation or, where appropriate, salinity within the area and any impacts on water sources.”
56 Section 24 makes additional provisions for water use in the following terms:
- “The water use provisions of a management plan for a water management area may also deal with the following matters:
- (a) best practice for water conservation, water efficiency and total water cycle management,
- (b) prevention of off-site impacts of water use,
- (c) requirements for the restoration or rehabilitation of land or water sources or their dependent ecosystems,
- (d) protection of the habitats or pathways of animals and plants,
- (e) the preservation and enhancement of the quality of water of the water sources in the area affected by water use and related practices,
- (f) structural or operational modifications for existing works,
- (g) other measures to give effect to the water management principles and the objects of this Act,
- (h) such other matters as are prescribed by the regulations.”
57 Express provision is also made in s 32 and s 33 in relation to activities described as “controlled activities” and “aquifer interference activities.” Particular provision is made in s 34 for environmental protection.
58 After complying with the requirements of the Act, the Minister may make a plan (s 41) which, subject to s 43, is to have effect for ten years.
Minister’s plans
59 Apart from the power to make a plan pursuant to s 41, the Minister is given power to make a plan pursuant to s 50 but without the preliminary steps required of a plan made pursuant to s 41. This power may be invoked where, as is the position in the present matter, a management plan is not in force for a water management area or water source. It is the requirement of s 50(2) that:
- “A Minister’s plan must in general terms deal with any matters that a management plan is required to deal with, and may also deal with any other matters that a management plan is authorised to deal with …. .”
60 A Minister’s plan generally has the same effect as a management plan (s 50(4)).
61 The Plan under challenge in these proceedings is a Minister’s plan.
Access to water
62 Complex provision is made in Chapter 3 of the Act for access to water by individual landholders. A system of access licences, of which there are many categories, is provided (s 57). An access licence will define the holders entitlement to water from the relevant water source whether a river or underground aquifer. That entitlement is given the name “share component”. The share component may be expressed as a maximum volume or as a proportion of the available water (s 56(2)). Rules of priority may apply (s 58) and a mechanism for the granting and renewal of access licences is provided (s 61-65).
63 Pursuant to s 59 the Minister is empowered to make a determination as to the available water in any water source. Referred to as an “available water determination” it will, by defining the total volume of water available, effectively control the water available to an individual licence holder in any year.
64 The Act, in Part 3 of Chapter 3, also provides a complex mechanism for the granting of water use approvals enabling the holder “to use water for a particular purpose at a particular location.” Provision is made for applications for approval, the granting of approval and their amendment, suspension and cancellation.
The Plan is a water sharing plan
65 It is important to appreciate that the Plan under challenge is a water sharing plan, there being other types of plans contemplated in s 15 of the Act. The Plan was intended to commence on 1 July 2003 but this has been altered to 1 July 2004. The Plan has a life of ten years. It applies to the Lower Murrumbidgee Groundwater sources which are the Shepparton and the Calivil and Renmark water sources, and includes all water contained in the unconsolidated alluvial aquifers. The method of drafting is complex making the Plan difficult to understand which has been made worse by some acknowledged drafting anomalies.
66 As I have indicated, s 20 of the Act requires a water management plan to deal with a number of matters. It must, inter alia, establish environmental water rules (s 20(1)(a)), identify water for basic landholder rights (s 20(1)(b)), identify the requirements for water extraction under access licences (s 20(1)(c)) and establish a bulk access regime for the extraction of water under access licences (s 20(1)(e)). Section 20(2) mandates the elements which must be incorporated within a bulk access regime. The bulk access regime must be consistent with the water management principles provided in s 5 of the Act. Section 5(3) gives priority to protecting “the water source and its dependent ecosystems.”
67 The vision of the Plan is stated to be “the optimal, equitable and sustainable management of groundwater for environmental, economic and social purposes in the Lower Murrumbidgee.”
68 Clause 11 of the Plan provides its objectives, all of which are significant in the present case. The objectives are stated to be:
- “(a) share groundwater sustainably between users and the environment
- (b) share groundwater equitably amongst extractive users,
- (c) provide for basic landholder rights and priorities o f use,
- (d) protect groundwater quality,
- (e) maximise the social, economic and environmental benefits of groundwater management strategies, and
- (f) minimise the negative social and economic impacts of groundwater management strategies.”
69 The Plan defines the strategies by which it is intended to operate. They include:
- “(c) establish an extraction limit for each groundwater source, taking into account the requirements of the environment.
- (d) reduce the total share component of access licences in the Calivil and Renmark to 125% of the extraction limit in that groundwater source.”
70 Because the total of existing entitlements far exceeds the extraction limit, the consequence will be a significant reduction in many entitlements. Part 3 of the Plan is entitled “Basis for water sharing” and is intended to define the volume of water which may be extracted from the aquifers. The volume nominated has been identified as the volume of the recharge of the aquifer in any year. The theory is that if the water removed is confined to the extent of the recharge, the whole system can be kept in balance and provide a sustainable water regime in the long term.
71 The creation of environmental water rules under the Plan is undertaken by first setting aside for the environment the long-term average storage component of each groundwater source minus basic landholder rights (cl 18(1)(a)). In addition, 55,000 ML/yr of the average annual recharge to the Shepparton and 65,000 ML/yr of the average annual recharge to the Calivil and Renmark are reserved for the environment (cl 18(1)(b) & (c)). For reasons I shall explain later, from the total sum of all these volumes must be deducted any supplementary water provided to irrigators during the life of the plan. Supplementary water (provided pursuant to cl 25(9)) is intended to ease the burden of the Plan’s impact on substantial users of water.
72 Basic landholder rights are defined in Part 5 of the Plan and include stock and domestic and native title rights.
73 The Plan identifies that the overall basis for water sharing in the Plan is the average annual recharge of each groundwater source being 65,000 ML/yr to the Shepparton and 335,000 ML/yr to the Calivil and Renmark (Cl 16).
74 Accordingly, as priority must be given to water for the environment (section 5(3)), 10,000 ML/yr from the Shepparton and 270,000 ML/yr from the Calivil and Renmark are available to be distributed to irrigators.
75 Part 6 of the Plan contains a general description of the elements of the bulk access regime required by s 20(1)(e). It includes environmental water, basic landholder rights and “the requirements for water for extraction under access licences identified under Part 7 of the Plan.”
76 Part 7 is comprised of only one clause – clause 25. It is the source of much difficulty in understanding the Plan. The clause commences by identifying that at the commencement of the plan “the requirements identified for extraction under access licences” is 0 ML/yr in the Shepparton and 522,233 ML/yr in the Calivil and Renmark. The water for the Calivil and Renmark is stated to include 2,210 ML/yr for Carrathool, Coleambally and Darlington Pont. All that is in fact being said is that the total of all of the water which is theoretically available to be lawfully taken under existing licences is 522,233 ML/yr in the Calivil and Renmark. The number is merely theoretical for, as the evidence of Dr Drury indicates, neither that total, or anything like it, has been extracted in any year. In fact the average extraction for the last five years is 280,000 ML/yr.
77 Clause 25(4) provides the mechanism for the reduction in the share components of each licence. A share component defines the amount of water which a licence holder may access in any year, provided that water is available. The reduction is stated to be pursuant to s 42(2) of the Act which contemplates amendments of the Plan. The purpose is to reduce the total share components after the plan has been operating for five years.
78 The full text of cl 25(4) is as follows:
- “Pursuant to section 42 (2) of the Act, and at the commencement of year six of this plan the Minister should reduce the total share components of aquifer access licences specified in subclause (2) in the Calivil and Renmark to 125% of the extraction limit determined in clause 27, according to the following;
Amended access access licence share (1.25 (recharge = EHW)) = LWU
licence share = component prior to x Total access licence share
component amendment components prior to amendment – LWU”
79 The components of the equation are defined as follows:
- “(5) Recharge in subclause (4) is the recharge established in clause 16(1), as amended by clause 16(2).
- (6) EHW in subclause (4) is the volume of recharge reserved as environmental health water in the Calivil and Renmark in clause 18(1), as amended by clause 18(2).
- (7) LWU in subclause (4) is the total of local water utility access licence share components in the Calivil and Renmark existing prior to any access licence amendments under subclause (4).”
80 The proper construction of the clause has caused difficulties. However, the parties are agreed that it is intended that the amended access licence share component will be 64 percent of the component prior to amendment.
81 Clause 25(9) provides for supplementary water which is to be provided during the first 9 years of the plan, although decreasing (see cl 29(j)(k)(l)) until it is nil in year 10. This supplementary water is intended to ameliorate the impact of the proposed reduction in available water on those who have been intensively using their licence entitlement.
82 The water available under the supplementary licence is to be calculated pursuant to cl 25(9) and (10). It will have a share component in the first year of the volume historically extracted less 80% of the amended licence share component, which is in fact 51.2% of that original share component.
83 Accordingly, if you assume a licence of 100ML/yr, historically used to 100%, the supplementary entitlement will be 48.8% or 48.8ML, subject to the operation of cl 29 (j)(k)(l). The effect of those provisions will progressively reduce the supplementary entitlement to nil in the last year of the Plan.
84 Although in the future the Plan will reduce each licence holder’s share component of the available water, the amount of water actually available for irrigation in each year will be controlled by the available water determination made by the Minister pursuant to s 59 of the Act. The rules for that determination are provided in clause 29 of the Plan. With respect to the total water available under access licences, cl 29(2)(d) provides that it will be the annual recharge minus environmental water and water available under utility access licences.
85 As I understand the position, when the whole of the legislation comes into force it is proposed to issue licences for a volume of water equivalent to the holder’s current entitlement. However, the holder will only be able to extract water equivalent to their share of the total available water as determined by the Minister pursuant to s 59.
86 The effect will be that because the available water is far less than the total of existing share components, the theoretical volume of every holder’s water will be immediately reduced. The reduction will not be as a proportion of the water they may have historically been using but rather as a proportion of their theoretical entitlement, being their access licence share component. Accordingly, irrigators who have been using a high proportion of their existing theoretical entitlement, now called share component, will receive less water than previously. Irrigators who have used only a small proportion of their allocation may not suffer any reduction in their actual water.
87 An essential element for the effective operation of the Plan is the potential for one licence holder to sell part or all of his or her water entitlement. Any transfer of entitlement is dependent on the approval of the Minister (see 71A), which will be given if the location to which the entitlement is to be transferred can sustain additional water extraction. By the creation of a market for entitlements it is believed that the available water will be put to its most productive use. However, it is not necessary that the whole or any portion of any entitlement has been used before it may be transferred. It may be that because there is simply no suitable water available on a particular parcel of land, a licence entitlement which could never be used by the holder of that entitlement is available to be sold to another irrigator who can use it.
- Dr Drury’s criticism of the approach taken by the Plan and his proposal for future management of the groundwater
88 Dr Drury is critical of the Plan because it provides a uniform approach to the Area and to the reduction in extraction limits of each licence. He described how the Area has previously been managed by controlling extraction in particular locations by relating it to the hydrological response in the various zones. He said:
- “Equation 1 (which is the equation in cl 25(4) of the Plan) deviates from the existing DIPNR water allocation protocol, which considered groundwater extraction control on hydrogeological performance in the various zones within the LMGMA. The principle of zonation of water allocation in various parts of the LMGMA is well documented and practised (eg Refs 4, 5, 13). In particular, in Refs: 22 and 44, various water allocation limits for the DIPNR zones are enforced for Years 2001/2002 and 2002/2003 respectively. These zones are ranked according to groundwater response behaviour, these being:-
“Zones 5, 6, 9, 10 - groundwater levels are stable, both seasonally and over successive years or rising;
Zones 3, 4 - zones in which deep aquifer groundwater levels are declining significantly over successive years”.Zones 1, 2, 7, 8 - significant seasonal change may occur, but long-term trends are relatively stable;
Ref: 44 indicates the zonal policy for groundwater extraction for Year 2002/2003. I understand that the proposed WSP policy (Ref: 1) was then to take effect for the next ten years.
Ref: 25 indicates that the WSP allows a 52% reduction in groundwater entitlement across the whole of the deep aquifer system (with some additional supplementary inputs) for the first five years, under the “ Available Water Determinations” . According to Equation 1 the final allocation for the WSP by Year 10 will be 64% of current entitlements, regardless of hydrogeological location within the LMGMA.
To assess the likely impact of such a policy after the Year 2002/2003 irrigation season, the likely impact on three DIPNR piezometers, assuming 52% utilisation for Years 1 to 5 and then 64% utilisation thereafter, were analytically predicted. These assessments were based on historical groundwater extraction rates and associated water level behaviour. The results are presented on Figure 12.
My assessment of the response at Piezometer 30341 indicates:-
(ii) a new steady-state drawdown condition will be established but water level recovery will be maintained at current and historical levels.(i) a proportional decrease in the magnitude of water level drawdown under the reduced pumping scenario.
- However this is an area where current groundwater extraction (25% of the total pumping from the LMGMA) maintains recovery levels equivalent to projected Year 1966 levels. It is my opinion that the hydrogeological environment in which Piezometer 30341 is sited, is likely to support current groundwater extraction rates.
- My assessment of the responses of Piezometers 36211/1 and 36025/2 (in Areas 3 and 4) indicates:-
(ii) resultant progressive water level declines continuing but at a proportionally lower gradient and amplitude than under current groundwater extraction conditions.
(i) a current progressive decrease in groundwater level. As recharge potential in these parts of the LMGMA is assessed as limited, it is anticipated that recovery during non-pumping periods will not be complete, even under the proposed reduced allocations.
- Groundwater should not be considered in the same way as a surface water resource, where for example, pumping from the Murrumbidgee River at Hay or Narrandera would have a similar effect on the river flows. For example, if one groundwater irrigator at Narrandera and another west of Hay had similar water extraction it is my opinion that the hydrogeological and environmental consequences would be significantly different. Based on the history of water level behaviour in the LMGMA, it is my opinion that for an equivalent large groundwater extraction rate, (say 3,000ML/year) the production bore:-
(ii) near Narrandera is likely to induce water level declines to a new constant steady state condition, water level drawdown will be less than for the bore west of Hay, water level recovery will return close to original levels in the non-pumping period, reduce low salinity water availability to the ecosystem of the Shepparton Formation, deliver low salinity water to the soil, and induce low salinity water from the Shepparton Formation to the deep aquifers.
(i) west of Hay is likely to induce significant water level declines, with poor water level recovery in non-pumping periods, reduce water availability to any ecosystem relying on saline groundwater discharge, discharge more saline water to the soil during irrigation, and have a potential for higher saline water from the Shepparton Formation to move downwards towards the deeper aquifer.
- Groundwater yield reduction according to the WSP will have different impacts across the LMGMA. Where current aquifer groundwater levels recover readily to long-term historical levels and long-term drawdown trends are fairly stable, the magnitude of groundwater drawdown will be reduced but water levels will return to current non-pumping levels. Limiting groundwater withdrawal in these areas will deprive users of groundwater, where historical records have proven it to be available.
- In other areas, where large groundwater extraction occurs with significant water level drawdown and small recovery, the magnitude in water level decline may reduce but the declining trend in groundwater level may continue but at a lesser slope. For these areas the WSP Equation 1 may not effectively ameliorate existing problems in progressive and continuing water level declines.”
89 Dr Drury’s ultimate conclusion is that the uniform approach adopted by the Plan is inappropriate from a hydrological perspective. He suggested that either management of the Area by imposing different rules in each zone, or by monitoring and allowing extraction at rates which did not excessively exploit the aquifer (a “bandwidth approach”), would be preferable. He expressed his opinion in the following terms:
“In my opinion it is irrational to anticipate that a single equation applied regionally can address site specific hydrogeological problems within the LMGMA. It impacts on all irrigators within the LMGMA. The application of Equation 1 will inevitably result in different effects at site-specific locations, depending on the hydrogeological, hydrochemical and environmental situation. In some cases the irrigators will be reduced in water allocation where historically little water level problems exist. Some results may be environmentally undesirable (rising water levels, aquifer salinisation, waste water disposal, soil salinisation, declining water levels, etc), and in other areas the current problem of water level decline may not be adequately ameliorated.
It is my opinion that the water requirements for the environment will not be equally required throughout the LMGMA. It is important that the critical locations of groundwater dependent ecosystems be assessed and water allocation for the environment defined on both small and large-scale basis. Specific groundwater volume, level, quality and pressure need to be available at critical, site-specific locations.
There are a number of issues that appear to be omitted from the WSP that have important environmental, social and hydrogeological consequences. These include control on irrigation crop type and irrigation method. I would assess that these issues form an important component on groundwater resource optimisation and management.
These include:-There are several alternative methods for water management of the LMGMA, which may be more appropriate than the WSP access license share equation.
- (a) Zoning . Ref: 4 presented 10 administration zones for the LMGMA. Zoning allows greater flexibility of groundwater management within the overall context of a water management plan. I have assessed that some of these particular zones are hydrogeologically inappropriate. Groundwater extraction by zoning should be based on hydrogeological, hydrochemical and ecosystem considerations. The impact of groundwater pumping in the surrounding zones, also need to be considered in the formulation of a zonal groundwater management strategy.
- (b) Bandwidth method . This can be either site-specific or based on regional piezometers. With this method both water level recovery and drawdown are monitored. Two band levels are set, an upper band for non-pumping recovery and a lower limit for irrigation season drawdown. These are absolute limits. If the site specific bore or regional piezometer falls below these bands a cut back in groundwater extraction occurs, either on a particular regional or a site-specific mandatory basis. This suggested method of groundwater management in the LMGMA is presented in Ref: 18. Reference 3 suggests water allocation in order to maintain aquifer water level behaviour within a specified band-width.”
Mr Lawson’s response to Dr Drury and his proposal for future management
90 Mr Lawson responded to Dr Drury. Although he did not entirely reject a zoned approach to management of the aquifer, he believes it would prove difficult to implement.
91 Mr Lawson’s evidence was that:
- “[W]hile it is not impossible to zone the aquifer system, determining the zones will be a matter of personal opinion influenced by a range of criteria and hydrogeological interpretation. This is because, from a technical perspective, the hydrogeology is a continuum – there are no clear internal boundaries.”
92 He said that this characteristic of the groundwater source made it difficult to reach an arrangement which would be equitable and which would satisfy groundwater users.
93 Mr Lawson also agreed that if boundaries between regions could not be established, this may be a persuasive reason for adopting a “bandwidth” approach to management of the resource. He acknowledged that the provision in the Plan for “management of local impacts” – which allows for special measures for highly stressed areas – was equivalent to a bandwidth approach (see cl 39). However, he accepted that this approach gave no consideration as to whether it was appropriate to reduce entitlements by the same proportion in all areas.
94 Mr Lawson accepted that the effect of the Plan was that, by year ten, each user would be subject to the same proportional reduction of their entitlements, when measured against the total of the maximum historical extraction from the Area.
95 The extent of this reduction would be that, after year 9 when supplementary water licences would be phased out, users would be entitled to about 52% of their original theoretical entitlement, although this figure could vary slightly according to the available water determination.
96 Mr Lawson accepted that some users may end up with the theoretical potential to use more water than they are currently using. For example, a user who currently uses only five to ten per cent of their entitlement might ultimately be restricted to 52% of their entitlement which would still allow for a greater level of extraction than their current usage. Others will find that their entitlement is significantly less than the water they have historically been using.
97 Clause 36 of the Plan allows for restrictions on extraction in particular areas, but does not reduce entitlements under the licence. Mr Lawson accepted that the effect may be that users with historically high rates of extraction could have their entitlements halved with the consequence that they would need more water, for which they would have to pay, to be able to continue operating at current levels, while in an area such as Carrathool, entitlements would be similarly reduced although the historical rate of usage and the appropriate extraction limit might be much lower. Users with historically low rates of extraction would be given entitlements which they themselves could not use but which they could sell to users with the capacity to benefit from them.
98 Senior counsel for the applicant put to Mr Lawson the example of a farmer at Darlington Point, who is currently extracting 1,000ML/year but facing a reduction to 500ML/yr in ten years time, and who, to make up the shortfall decides to purchase extra entitlements from a farmer in an area outside of Darlington Point. Although, as Mr Lawson pointed out, the Department would only approve the transfer if the aquifer on the farmer’s property could sustain the higher level of extraction, this would be likely in Darlington Point. He conceded that the consequence would be that the farmer would be purchasing back part of an entitlement to use the water under his own property which, at least on hydrogeological principles, did not need to be taken away. And the entitlement purchased may be from someone who, because of the lack of groundwater resource on their own property, could never have utilised the entitlement which they have sold.
99 Mr Lawson said that the Department accepted that the Plan would have a negative impact upon the financial position of some persons who had been encouraged to develop their farms by increasing the level of irrigation. He also accepted that the Plan may have an unfair impact upon people who have only recently obtained their licences and who may have made a significant investment in infrastructure although they have not yet utilised all of the available water. Under the plan some of the infrastructure investment may be lost. However, his opinion was that of the available options for the future management of the water resource, uniform reductions with supplementary water in the early years for those with a history of more intense use was the most appropriate approach, and that any environmental problems in local areas could be effectively managed by imposing local controls.
Evidence of irrigators
100 Affidavit evidence of a number of irrigators was tendered. They were not cross-examined and I accept their evidence. The genuine nature of their complaints and their belief in the unfairness of the Plan from their individual viewpoints is apparent.
The evidence of Mr Violi
101 Mr Kevin Violi was born in the Murrumbidgee Irrigation Area where his family has farmed since 1951. The Violi family purchased the property ‘Dunverleigh’ at Darlington Point in 1998 and currently grow 2,000 acres of grapes on it. Mr Violi’s evidence was that the family selected the property in part because of its quality of groundwater. To date they have spent $4.7 million developing it, in reliance on having “unrestrained access to high security water.” The farm has two underground water licences and one river licence, and a history of use of 2,429 ML/year on average. Repairs performed on the bores in the past five years, in combination with landform development, have prevented the Violis from using their full entitlement. This temporary position will adversely affect their future entitlement under the Plan if it is implemented in its present form.
102 Mr Violi’s evidence is that the Plan will reduce his farm water usage to 1,364 ML/year and that this amount would support only 900 acres of grapes, less than half of present plantings. He gave evidence that the family would be faced with the prospect of having to abandon half of their vines, thus breaching its contract with the export company Casella Wines (who produce “Yellow Tail”) and causing the bank’s security to be halved in value, with the possible consequence of withdrawal of credit facilities. The alternative to abandoning plantings would be to purchase approximately 1,271 ML in entitlements, put the whole area under drip irrigation, or limit the use of irrigation water and thereby reducing yield, all at a substantial cost.
The evidence of Mr Burgess
103 In 1997 Mr Steven Burgess purchased a property 15 kilometres north of Coleambally on which he grows barley, oats, rice, sorghum, corn and eucalyptus trees. The entire farm is laid out to irrigation and Mr Burgess has performed substantial levelling work on the land to permit efficient water use. He said that his average actual water use over the past year has been 2,001 ML/year. Due to problems with his bore, Mr Burgess has used the pumps on a neighbouring property to assist in pumping his water but has not been permitted to record this usage against his property, affecting his entitlement to a supplementary licence under the Plan.
104 His evidence was that a capital injection of at least $700,000 would be required for his business to survive and that $500,000 worth of his assets would have to be written off, so that his present loan facility would be withdrawn.
- The evidence of Mr Young
105 Mr Gregory Young has lived in the Griffith/Darlington Point area for 40 years and is employed by AgReserves Australia Limited. He works AgReserves’ properties Bringagee, Benerembah and Kooba Stations. Kooba Station is largely irrigated and grows maize, corn, seed crops, tomatoes, wheat, canola, barley, faba beans as well as breeding cattle and trading sheep.
106 Mr Young gave evidence about the Department’s policy of encouraging water users to pump more water. He recalled Mr Scott Lawson saying at one meeting of users, “What do I have to do to get you guys to pump more water?”
107 Mr Young gave evidence that AgReserves has invested $70 million to purchase the three properties and, with the upgrade of infrastructure and further development, their total investment has increased to about $100 million.
108 Mr Young said that the Plan would reduce AgReserves’ groundwater entitlements by 10,000 ML/yr and that the proposed reduction by year 6 to 64% of entitlements would cut AgReserves’ profits by around 50 percent. His evidence was that the number of staff would have to be reduced from 83 to 27 because of reduced cropping, and the company might withdraw from the area due to the adverse impact on profits.
The evidence of Mr Middleton
109 Mr Rodney Middleton purchased the property “Delta Park” in Jerilderie in 1996. He has developed it substantially since that time and it now has a bore, 600 acres of lasered ground, 800 acres of contours and 400 acres of dry farming area. Wheat barley and rice are grown and sheep are grazed on the property. The total extraction entitlement at Delta Park is 2,790 ML/yr and usage is currently 2,200 ML/yr. Mr Middleton’s evidence was that if the groundwater allocation was cut by 48 percent, as stated in the Plan, Delta Park would not be a viable operation and his loans would not be able to be serviced.
110 Mr Middleton is also a drilling contractor specialising in large irrigation bores and has drilled more than 50 bores in the area between 1982 – 1986. In 1997, while testing two bores at Carrathool, he noticed that the recovery levels were very slow. He discussed this with Mr Lawson and gave evidence that Mr Lawson said: “I don’t think there is a problem. Carrathool is at the end of the basin and is an area of limited connectivity.”
187 By ensuring the long-term health of the aquifer, the Minister has ensured both an appropriate environmental outcome and sustainable agriculture with the associated social and economic benefits. The mechanism adopted is faithful to the principle in s 5(3)(a) of the Act “that sharing of water from a water source must protect the water source and its dependent ecosystems” which must not be prejudiced by extraction of water (s 5(3)(c)). By providing supplementary water, the Minister has allowed for a lengthy period of adjustment during which those who can sustain an agricultural enterprise may, although at a cost, acquire water rights.
188 Others who lose part of their present rights to water and who could not justify, for economic or environmental reasons, the acquisition of additional entitlement may receive some moneys from the sale of entitlement, which they will presumably invest in some manner. To the extent that the Plan impacts adversely on those persons, the sale of the entitlement will ameliorate their position.
189 Having regard to all of these matters, I am not satisfied that the approach which has been taken is so lacking in logical structure or so fails to have regard to the parameters which the Act imposes on the Minister that it could be said that it was not open to the Minister and that the Minister’s discretion in making the Plan has miscarried.
190 By providing a uniform approach to reducing entitlements, the Minister has ensured that ultimate control over the performance of the aquifers can be managed by available water determinations and close supervision of the transfer applications. The fact that there may be windfall gains or losses which could have been avoided does not mean that the Plan is founded upon judgments which were not open to the Minister. Some may believe it to be preferable, if possible, to manage the water without those consequences, but that was a decision for the Minister and not for the Court.
The State Water Management Outcomes Plan
191 It was submitted by the Minister that the adoption of uniform reductions in entitlements was made inevitable by the State Water Management Outcomes Plan. Section 16(1)(a) of the Act provides that a management plan must be consistent with the State Plan.
192 The relevant provision of the State Plan is expressed as a target. It is in the following terms:
- “ Target 6 the total volume of share components specified on access licences to be more closely matched over the term of a water sharing plan to the extraction limit of the plan, such that:
- Target 6(a) For groundwater sources, the total volume of water specified on access licences reduced over the term of a water sharing plan to no more than 125 per cent of the Sustainable Yield.”
193 As I understand the argument, it is assumed that in order to achieve the targeted total volume, the allocation in respect of each licence should be uniformly reduced. I do not accept that argument. It seems to me that the target is only specifying the maximum which is to be achieved in relation to the total of all the relevant licences. Individual licences could have more or less volume, provided the total of all licences does not exceed the target. I do not believe that cl 25(4) of the Plan was required by the State Plan. That does not mean that it was not open to the Minister to make a Plan including cl 25(4), which is of course relevantly consistent with the State Plan.
The Plan and Government Policy
194 It was further submitted that, in making the plan, the Minister was required by s 16(1)(e) to make a plan which is consistent with government policy. Government policy is not defined, although s 16(2) says that it includes such matters as are declared by the regulations to be government policy. There is no relevant regulation.
195 The government policy said to be relevant in the present case is that contained in a document published by the Department of Land and Water Conservation entitled “Water Management Act 2000 – Groundwater Update”. That document identifies the significance of groundwater to rural communities and the problem of over extraction. It identifies the fact that the use of “aquifers across the state must be kept within or returned to sustainable yields – that is, balancing the water taken out by pumping and the environment against the water that flows into an aquifer through the ground.” Identifying the need for change, the document states that “Water Management Committees and the Government are developing a system of fairly sharing these groundwater resources.”
196 Under the heading “The Challenges of Change”, the document considered the circumstances of all groundwater systems in New South Wales to establish a fair and transparent system for sharing groundwater in the future. As to how this will be achieved the documents says:
- “The continuing existence and fundamental health of groundwater systems must take priority over providing access to meet current levels of licensed groundwater extraction. Existing licences will continue, but the total entitlement of each aquifer will be set so that the long-term average extractions match the long-term sustainable yield of the aquifer.”
197 To this point of course, the applicants have no criticism of the stated objective. However, it is the next statement in which it is said that future entitlements will be based “on a pro-rata level of licensed entitlements” which causes difficulty. The complete statement is as follows:
- “Shares of groundwater resources from an aquifer will be based on a pro-rata level of licensed entitlements, not on users’ levels of development or history of use. Most groundwater licence holders are expected to receive a share of the aquifer’s sustainable yield that can support their recent levels of extraction, and in some cases enable further development. Volumetric licence conditions will be adjusted accordingly to reflect those shares.”
198 The document continued with a discussion of the instigation of a groundwater trading market and seeks to explain the justification for the approach to the adjustment of entitlements. The document states:
- “Where total licence entitlements for an aquifer exceed a sustainable level, initial volumetric shares will be distributed to existing licence holders in proportion to their current licence entitlements. In those aquifers where licence entitlement is currently at or below sustainable levels, shares will reflect existing licence entitlements and new licences will not be issued beyond the total sustainable extraction for the aquifer.
- Community consultations advised that history of use or levels of development should be taken into account when adjusting allocations. However, because these concepts are loosely interpreted and there are no clear and consistent ways agreed to measure them, they cannot provide a fair way to adjust licence entitlements. The risk was that efficient users would be penalised and inefficient users rewarded.”
199 This paragraph contains the heart of the debate in the present matter. It is criticised by the applicants because no attempt is made to consider managing the aquifers, and adjusting entitlements by zones and no consideration is given to a bandwidth approach. Whatever be the difficulties in adjusting entitlements by reference to investment, no consideration is given to the fact that the chosen method for adjustment of entitlements will almost certainly penalise efficient users as well as some inefficient users, and at the same time give windfall gains to people who, by reason of their location, have not been utilising their present entitlement.
200 I accept that this document does relevantly reflect the policy of the government within the meaning of s 16(1)(e). During the course of submissions, many difficulties were identified in the application of the subsection because of difficulties in identifying government policy. No doubt there will be cases where statements are made by ministers or government departments which may be unclear or even contradictory. There may be difficulties in identifying the authority of any particular statement. In the present case, the statements in the document are clear and, being published by the Department, may be accepted as reflecting government policy.
201 It was submitted that a plan made in compliance with government policy may nevertheless be unlawful if the policy itself could not be the foundation for a lawful plan. Although it is unnecessary to resolve the matter, my view is that the submission is correct. The mere fact that the Act requires the plan to be consistent with government policy does not have the consequence that if the policy is itself relevantly irrational, a plan made in conformity with it will be lawful. Compliance with s 16(1)(e) does not make a plan immune from judicial review.
202 As I have indicated, I accept that the requirement for a uniform reduction was also the subject of a Cabinet determination. A determination by Cabinet would normally be reflected in government policy and a Minister would be expected to act in accordance with it. However, in my opinion, obedience to a Cabinet decision could, in various circumstances, lead to invalidity in relation to a plan. In the present case, the Cabinet decision is consistent with and reflected in the approach adopted in the Groundwater Update document, with the consequences I have already identified.
Construction of the Plan and problems with cl 18(1)(c)
Ground 3A
203 As I have indicated, before the Plan can work it is necessary to be able to calculate the reduced total share components of access licences in the Calivil and Renmark after year five. Clause 25(4) of the Plan provides the formula by which this calculation is intended to be made.
204 One element of the equation in cl 25(4) is the volume of recharge reserved as environmental health water in cl 18(1). Clause 18(1) says that environmental health water in the Calivil and Renmark is 65,000 ML/yr minus supplementary water. However, before supplementary water can be calculated, the calculation required by cl 25(4) must be completed (see cl 25(9)). Accordingly, if cl 18(1)(c) is to be read as it is literally written, the calculation in cl 25(4) is impossible and the Plan must fail as a matter of law. So much was accepted by the Minister, who in a supplementary submission said:
- “There is no doubt that the literal construction of clause 18(1)(c) propounded by the applicant has an absurd result. As is demonstrated by the applicant’s latest round of submissions, if that construction is accepted, the Plan simply does not work. At each level there must be certainty as to the amount of environmental health water but that cannot be achieved until other factors (themselves reliant on the environmental health water) are known. The result of the construction is a circular definition which ends up going nowhere. This cannot have been the intention of the Minister. The clear intention is that the entitlement for each licence will be able to be calculated in advance so as to give economic certainty and stability with regard to the sustainability of the physical resource as far as possible.”
205 It is submitted that the difficulty created by cl 18(1)(c) is removed if cl 18(1)(c) is construed in the context of cl 18 as a whole. The proposition is that the water in cl 18(1)(a), (b), and (c) should be added together and supplementary water deducted from the total instead of only the water from the Calivil and Renmark.
206 It is submitted that the fact that cl 18 was intended to operate in this manner can be ascertained from cl 27(2) which provides:
- “27(2) The long-term average extraction limit for each groundwater source each year of this Plan is the recharge established in clause 16, plus the total supplementary access provided for in clause 25, as varied by clause 29, minus the proportion of recharge reserved as environmental health water in clause 18, and is as follows:
- (a) 10,000 ML/yr in the Shepparton, and
- (b) 270,000 ML/yr in the Calivil and Renmark, plus the total supplementary access provided for in clause 25, as varied by clause 29.”
207 Application of the formula in cl 27(2) with respect to the Calivil and Renmark leads to the conclusion that the amount of environmental water (at least for the purpose of the clause) is 65,000 ML/yr. The calculation required may be expressed as follows:
This calculation shows that the Plan intends the environmental water reserved in the Calivil and Renmark to be 65,000 ML/yr without the deduction of supplementary water.
X = recharge + supplementary water - Y
where
X is the long term average extraction limit for each groundwater source:
Y is the proportion of recharge reserved from that groundwater source reserved for the environment
Accordingly the calculation becomes:
270,000 + supplementary water = 335,000 supplementary water - Y
where
Y is the proportion of recharge reserved from that groundwater source reserved for the environment.
Accordingly Y = (335 + supplementary) – (270,000 + supplementary)
Y = 65,000
208 The consequence is that cl 18(1) should be understood as providing for four elements which together allow identification of the volume of water set aside as environmental health water. After identifying each of subsections (a), (b) and (c) of cl 18(1), the amount of supplementary water is to be deducted for so long as that water is to be made available. Supplementary water is to be deducted from the total environmental water not just from the 65,000 ML/yr set aside from the Calivil and Renmark.
209 If cl 18(1)(c) is construed in this manner, the problem with the calculation in cl 25(4) is removed. The amount which is to be deducted as environmental health water is 65,000 ML/yr without the necessity to bring into account any allowance for supplementary water.
210 The Minister accepts that a literal construction of cl 18(1)(c) produces absurd results, but submits that a purposive approach to its construction will avoid the problem. In Cooper Brookes(Wollongong) Pty Limited v Commissioner of Taxation (Cth) (1981) 147 CLR 297 the High Court considered difficulties in construing provisions of the Income Tax Assessment Act. In the context of construing a statute, Mason and Wilson JJ said (at CLR 320):
- “The fundamental object of statutory construction in every case is to ascertain the legislative intention by reference to the language of the instrument viewed as a whole. But in performing that task the courts look to the operation of the statute according to its terms and to legitimate aids to construction.”
211 Describing the rules of statutory construction as no more than rules of common sense, their Honours said (at CLR 320-321):
- “The rules, as D C Pearce says in Statutory Interpretation , are no more than rules of common sense, designed to achieve this object. They are not rules of law. If the judge applies the literal rule it is because it gives emphasis to the factor which in the particular case he thinks is decisive. When he considers that the statute admits of no reasonable alternative construction it is because (a) the language is intractable or (b) although the language is not intractable, the operation of the statute, read literally, is not such as to indicate that it could not have been intended by the legislature.
- On the other hand, when the judge labels the operation of the statute as ‘absurd’, ‘extraordinary’, ‘capricious’, ‘irrational’ or ‘obscure’ he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions.
- Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended.”
212 The present case does not raise difficulties in construing the statute but with provisions of the Plan made under it. However, in my opinion the same approach to its construction as that sanctioned in Cooper Brookes should be adopted. The document should be construed having regard to all of its provisions and the purpose intended to be achieved. Unless repugnant to the language used, a construction of cl 18(1) which is consistent with the apparent purpose of the Minister in including that clause in the Plan should be adopted. In R v Young (1999) 46 NSWLR 681 the Chief Justice said (at NSWLR 687-688):
- “If a court can construe the words actually used by the parliament to carry into effect the parliamentary intention, it will do so notwithstanding that the specific construction is not the literal construction and even if it is a strained construction. The process of construction will, for example, sometimes cause the court to read down general words, or to give the words used an ambulatory operation. So long as the court confines itself to the range of possible meanings or of operation of the text – using consequences to determine which meaning should be selected – then the process remains one of construction.”
213 Notwithstanding that the construction of cl 18(1) contended for by the Minister does, as his counsel submitted “some violence to the grammar of cl 18(1)(c)”, I am satisfied that it should be adopted. The purpose of the Plan is made clear by cl 27(1), and by interpreting cl 18(1) in the manner indicated, cl 25 can operate. However, it scarcely need be said that a document intended to provide a statement of the rights of irrigators so that they, and those who deal with them, which will include mortgagees, should be prepared with meticulous care so that it can be clearly understood and applied. Concern about the fairness of the proposed new arrangements is not diminished if the plan which implements them does not make sense without adopting a construction of some of its central provisions at the limits of that which is permissible.
Supplementary licences
214 Fundamental to the operation of the Plan is the provision made in cl 25(9) for those who have a history of relatively intense use of their existing entitlement to a supplementary water access licence. Although provided for in the Plan the Act makes no provision for the grant of such a licence. Chapter 3, Part 2, Division 2 of the Act contains the mechanism for the grant and renewal of access licences but does not contemplate supplementary licences. The Minister accepts that this is the case, with the consequence that if another mechanism by which they can be granted is not available, the Plan must fail. It will be incapable of implementation.
215 The Minister’s submission draws attention to the fact that s 57(f) of the Act recognises one category of access licence as being “supplementary water access licences” and relies upon the “Savings and Transitional Provisions” to create a supplementary licence.
216 Section 403 of the Act provides that Schedule 9 to the Act has effect. Schedule 9 provides that the regulation “may contain provisions of a savings or transitional nature” and, by cl 1(4) of Schedule 9, the relevant regulation has “effect despite other provisions” of the Schedule. Clause 9 of Schedule 9 provides for the creation of access licences when Part 2 of Chapter 3 of the Act comes into operation.
217 At present, only cl 1 of Schedule 9 is in operation, the remainder, including cl 9 is intended to be brought into operation when Part 2 of Chapter 3 comes into force, now likely to be on 1 July 2004.
218 The Minister accepts that cl 9 of Schedule 9 does not authorise the grant of a supplementary licence but submits that by exercising the power to make regulations pursuant to cl 1(4) the Minister may amend cl 9 and provide, as part of the grant of entitlements in lieu of entitlements under the Water Act 1912 (NSW), a supplementary licence. Clause 1(4) is said to be a “Henry VIII clause” for it effectively contemplates that the provisions of an Act may be amended by the making of delegated legislation. The capacity to make regulations with this effect was confirmed by the High Court in Pyramid Building Society v Terry (1997) 189 CLR 176. See also Randwick City Council v Minister for the Environment (1999) 167 ALR 115 at [16]. It is submitted that if, before it comes into operation, cl 9 in Schedule 9 is amended to authorise the grant of a supplementary licence, then cl 25(9) of the Plan will be expressly supported by cl 9.
219 It appears that the difficulty identified by the applicants was not foreseen when the Act was drafted. The acknowledgement by the Minister that the Plan in its present form could not have legal effect without amendment, at least of the transitional provisions, has the consequence that it is not appropriate to consider this aspect of the matter further. The court is aware that amendment of the legislation is proposed by the Minister before 1 July 2004 and presumably, whether as part of those amendments or, as was suggested, by the making of regulations, the present difficulty will be addressed. Whether the measures taken are effective to deal with the problems will depend upon the method which is adopted and the precise terms of any amendment.
220 During argument it was suggested that a provision which authorised the grant of a supplementary licence may not be a “transitional provision” but rather a substantive provision in aid of the operation of the Plan made pursuant to the Water Management Act. After reflection I am satisfied that the matter could be dealt with by a transitional provision but its effectiveness may depend upon the care with which it is drafted.
221 The argument that there is no authority for the grant of a supplementary licence was first raised during the hearing and is pleaded in a proposed amendment to the application in para 3A. No relevant prejudice is caused to the Minister if leave to amend the application is granted and I will accordingly make an order to that effect.
Issues arising from the exercise of power under section 50
Ground 4
222 The applicants emphasise the fact that water management plans are to be made in accordance with a statutory process identified in the Act. In the ordinary course this will involve the Management Committee established under s 12 preparing a draft Plan pursuant to s 15. The procedure to be followed includes the notification of particular individuals and bodies when a draft plan is being formulated (s 36), public exhibition (s 38), and receipt of submissions (s 39).
223 The applicants submit that against this background the provision for a Minister’s plan in s 50 should be seen as a backup mechanism. By utilising the power as he did, it is submitted that the Minister acted for an improper purpose seeking to avoid the input of a management committee appointed in accordance with the Act.
224 The applicants point out that the Minister has established only one committee within the whole of the State pursuant to s 12 of the Act. That committee has authority with respect to the Cox's River water source. It is submitted that the failure to establish management committees under s 12 for the remainder of the State clearly did not flow from a decision not to have plans which would operate in respect of the other water sources. Indeed, one might infer that Cox's River was one of the least significant water sources within the State. Accordingly, it is submitted the only inference available is that the Minister deliberately declined to establish committees under s 12, either in order to avoid the statutory procedures which those committees were required to follow, or because he wished to reserve to himself the power to promulgate plans under s 50.
225 The applicants further submit that, given the structure of the Act, the existence of the power in s 12 carries with it the implied obligation to establish committees in order to give effect to the scheme of the Act with respect to the making of management plans. To fail to undertake that task for a reason of the kind referred to is to act for an extraneous purpose. In the absence of any answer to this complaint, it was argued that the Minister should be ordered to establish a management committee pursuant to s 12 with respect to the LMGMA.
226 It is further submitted that the use of s 50 to create Minister's plans, in place of the general scheme for management plans provided under the Act, may be inferred (in the absence of evidence to the contrary from the Minister or any person acting on his behalf) to be part of a deliberate scheme to avoid the operation of Parts 2 and 3 of Chapter 2 of the Act. To exercise a power for such a purpose is to exercise the power for an extraneous purpose in accordance with the analysis of Aickin J in R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170. It also constitutes a classic example of the course taken by the Minister in Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997, a case in which a Minister with statutory power to hold an inquiry desisted from doing so because he did not wish to be put in a position where he might be pressed to give effect to its recommendations.
227 I do not accept the applicants’ submission. A finding that the Minister acted for an improper purpose is not lightly to be inferred: see Haines v Annwrack Pty Ltd (1980) 39 LGRA 404; Industrial Equity Ltd v Deputy Federal Commissioner of Taxation (1990) 170 CLR 649. There is no evidence as to the reason why the Minister did not appoint a committee under s 12 of the Act and require it to prepare a plan. However, the evidence makes plain that there was a committee in place under the Water Act 1912 which had undertaken consultation and deliberation processes similar to those which would have occurred if a committee had been established under s 12 of the Act. The appointment of a committee with a requirement to begin the task afresh may have been thought to be unnecessary.
228 The evidence does not disclose the Minister’s reasons for exercising his power under s 50. However, he took that course aware of the concern as to the present environmental difficulties in parts of the Area and conscious of the extent to which the future management of the Area had already been considered by the Department and others.
229 I am satisfied that providing the relevant circumstances exist, the Parliament intended that the power under s 50 may be exercised by the Minister at his or her discretion. As the preconditions for the exercise of the power are expressed in the section, it would be inappropriate to introduce some further precondition such as that the power may only be exercised in exceptional circumstances or as some sort of “backup mechanism”.
230 There is no doubt, as the applicants assert, that a management plan made pursuant to s 41 can only be made after formal processes of drafting, exhibition and consideration of submissions has been undertaken. However, the fact that a similar preparation process is not provided by s 50 indicates that the Minister can make a plan which must, of course, be consistent with and further the objects of the Act, but which does not have to meet the requirements of a s 41 plan.
231 In any event, the process which was adopted in the preparation of the Minister’s Plan reflected the statutory process required to make a s 41 plan. The Committee, which had been established prior to the Act in 1998, consisted of various interest groups and met regularly. In March 2001 the Minister reconstituted the committee under s 388 of the Act and requested it to build on the work it had already done, advise on a draft plan, review public submissions and recommend changes to it. The committee’s work was actively considered following which the draft plan was placed on exhibition and submissions were received and reviewed. The Minister also had available to him the detailed advice of officers of the Department and other Departments in relation to hydrogeology, economic and social impacts and the environmental consequences of the proposed Plan.
232 This ground of challenge fails.
233 The orders I make are:
- 1. Grant leave to the applicants to file a further amended application.
2. Application is dismissed.
3. Costs may be argued.
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