Natural Resources Access Regulator v Lidokew Pty Ltd - [2023] NSWLEC 130

Land and Environment Court

New South Wales

Medium Neutral Citation: Natural Resources Access Regulator v Lidokew Pty Ltd [2023] NSWLEC 130
Hearing dates: 4, 5, 6, 7, 11, 12, 13, 14, 17, 18 October 2022
Date of orders: 28 November 2023
Decision date: 28 November 2023
Jurisdiction: Class 5
Before: Duggan J
Decision:
See paragraphs 306 and 307

Catchwords:
ENVIRONMENTAL OFFENCES – ss 60C(1)(b), 60C(2), 91I(2) and 91H(2) of the Water Management Act – plea of not guilty – circumstantial evidence – whether defendant took water otherwise than in accordance with access licence – crop water requirements of cotton farm – available rainwater – stored water availability – whether defendant took water while metering equipment was not operating properly – the meaning of “not operating properly” – no honest and reasonable mistake of fact

Legislation Cited:
Water Management Act 2000 (NSW)
Water Management Amendment Act 2018 (NSW)

Cases Cited:
Bogdanovski v Buckingham (1989) VR 897
Chamberlain v The Queen (No 2) (1983) 153 CLR 521
CTM v The Queen (2008) 236 CLR 440
He Kaw Teh v R (1985) 157 CLR 523
Natural Resources Access Regulator v Harris; Natural Resources Access Regulator v Timmins [2020] NSWLEC 104
Ozbinay v Crowley (1993) 17 MVR 176
R v Baden-Clay (2016) 258 CLR 306
Shepherd v The Queen (1990) 170 CLR 573
Sherras v De Rutzen (1895) 1 QB 918

Texts Cited:
Macquarie Dictionary (Online)

Category: Principal judgment
Parties: Natural Resources Access Regulator (Prosecutor) Lidokew Pty Ltd (Defendant)
Representation:
Counsel:
H El-Hage and A Brown (Prosecutor)
C R Ireland (Defendant)
Solicitors:
Crown Solicitor’s Office (Prosecutor)
Bell & Johnson Solicitors (Defendant)

File Number(s): 2020/88368, 2020/88369, 2020/88370, 2020/187127, 2021/181935, 2021/181936
Publication restriction: No

TABLE OF CONTENTS

Nature of proceedings
Facts
Relevant legislative provisions
Essential elements of the offence – Water Take Charges
Water demand of the cotton crop for each water year
Evidence
Prosecution evidence
Dr Wayne Meyer
Antecedent soil moisture at beginning of cropping
Defendant’s evidence
Prosecutor’s submissions
Defendant’s submissions
Findings on crop water requirements
Crop growing period
Antecedent crop moisture levels
Rainfall on Havana North
WFIE
The IrriSAT computer programme
The ±15% rate of uncertainty

Rainwater available
Evidence
Prosecutor’s evidence
Professor Albert Van Dijk
Mr Andrew Falkenmire

Defendant’s evidence
Mr James Purcell

Prosecutor’s submissions
Defendant’s submissions
Findings on rainfall

Stored water availability
Evidence
Prosecutor’s evidence
Mr Robert Day

Defendant’s evidence
Mr James Purcell

Prosecutor’s submissions on stored water availability
Defendant’s submissions on stored water availability
Findings on stored water availability

Submissions on evidence as to guilt on amount of water taken
Prosecutor’s submissions
Defendant’s submissions
Findings on evidence of guilt on amount of water taken

The Metering Charges
Essential elements of the offence – The Metering Charges
Evidence
Prosecution evidence
Mr Andrew Judge

Defendant’s evidence
Prosecutor’s submissions on the Metering Charges
Defendant’s submissions on the Metering Charges
Evidence of fair wear and tear
Operate properly and proper operation
Evidence does not prove meters were not operating properly or a failure to ensure proper operation
The error rates vary as between the meters
No evidence of any failure to maintain for s 91H of the WM Act charge
Honest and reasonable mistake
Defences – s 91M of the WM Act

Findings on the Metering Charges

Conclusion and orders

JUDGMENT

Nature of proceedings

Lidokew Pty Ltd (the Defendant) has entered a plea of not guilty to a number of charges brought against it by Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator (the Prosecutor). These proceedings relate to whether the Prosecutor has established that the Defendant committed one or more of the offences charged.
By Amended Summonses filed on 24 and 25 June 2021, the Prosecutor alleges that at the property comprising Lot 1 of Deposited Plan 1128755, located at 1563 Doreen Lane, Wee Waa in the state of New South Wales, known as ‘Havana North’ (Havana North or the Property), the Defendant committed the following six offences in contravention of the Water Management Act 2000 (NSW) (WM Act):

Charges 1-3 (proceedings 2020/88368, 2020/88369 and 2020/88370), relating to three Davies Shephard meters fitted to three separate pumps, in that:

In contravention of s 91I(2) of the WM Act, between about 29 January 2019 and 29 April 2019 inclusive, the Defendant took water from a water source to which Pt 3 of Ch 3 of the WM Act applied by means of a metered work while its metering equipment was not operating properly or was not operating; or

In the alternative, in contravention of s 91H(2) of the WM Act, between 29 January 2019 and 4 June 2019 inclusive, the Defendant failed to ensure the proper operation of the metering equipment that had been installed in connection with a water management work;

(the Metering Charges).

Charges 4-6 (proceedings 2020/187127, 2021/181935 and 2021/181936) in that between about 1 July 2016 and 30 June 2017 (Charge 4), 1 July 2017 and 30 June 2018 (Charge 5), and 1 July 2018 and 30 June 2019 (Charge 6) respectively:

In contravention of s 60C(1)(b) of the WM Act, the Defendant took water from a water source to which Pt 3 of Ch 3 of the WM Act applied otherwise than in accordance with the water allocation for the access licence by which the taking of water from that water source was authorised, and knew or had reasonable cause to believe that the taking of the water was not in accordance with the water allocation; or

In the alternative, in contravention of s 60C(2) of the WM Act, the Defendant took water from a water source to which Pt 2 of Ch 3 of the WM Act applied otherwise than in accordance with the water allocation for the access licence by which the taking of water from that water source was authorised;

(the Water Take Charges).

The alleged offence under s 60C(1)(b), being the primary alleged offence in the Water Take Charges, is a Tier 1 offence pursuant to the WM Act.
The Metering Charges, being the alleged offences under s 91I(2) and (in the alternative) under s 91H(2), as well as the alternative Water Take Charge pursuant to s 60C(2), are Tier 2 offences pursuant to the WM Act.

Facts

On the first day of the hearing, the Prosecutor provided to the Court a document titled “Key Factual Matters” (Exhibit C) prepared by the Prosecutor and taken to be admissions by the Defendant (Tcpt, 4 October 2022, p 5(27-29)) as extracted below:

The Defendant
1.   Lidokew Pty Ltd ACN 002 942 289 (the defendant) is an Australian company registered on 4 June 1985. Mr Gary Phelps (DOB: 20/01/1953) is the defendant’s sole director and secretary. The defendant is a proprietary company limited by shares, with a share capital comprising 77 ordinary shares. Havana North Pty Ltd is the majority shareholder, holding 75 ordinary shares in the defendant. The remaining 2 ordinary shares are held by Mr Phelps.
The Property
2.   The alleged offences the subject of these proceedings occurred at a property (Property) located at 1563 Doreen Lane, Wee Waa NSW (Lot 1 DP 1128755) known as “Havana North”. At all relevant times, the defendant was the registered owner of Havana North. Havana North is between 1,212 and 1,225 hectares in size. The following image is an aerial map showing the boundaries of the Property and the location of Dams 1, 2, 3 and 4 and bore sites at Havana North:
3.   Havana North is located near Wee Waa in Northern NSW, approximately 41 kilometres north-west of Narrabri. The relevant Local Government Area is Narrabri Shire. The defendant uses the property primarily for cotton production.
4.   At all relevant times, the defendant was entitled to take bore water from the Lower Namoi Groundwater Source by using three metered works installed at Havana North. At all relevant times, the use of that groundwater source was regulated by the Water Sharing Plan for the Upper and Lower Namoi Groundwater Sources 2003 (WSP).
Application of Part 3 of Chapter 3 of the Act
5. A proclamation made by the Governor under ss 55A and 88A of the Water Management Act 2000 (NSW) (WM Act) and published in the Government Gazette No 127, 27 October 2006, page 8907 (Proclamation), declared that from 27 October 2006, Part 2 and Part 3 of the WM Act applied to, amongst others, water sources to which the WSP applied.
6.   By reason of the Proclamation, at all relevant times, Part 2 and Part 3 of Chapter 3 of the WM Act applied to the Lower Namoi Groundwater Source.
Water access licence and approvals
7.   At all relevant times, the defendant held the following water access licence and approval granted under the WM Act:
A.   water access licence 12400, reference number 90AL806354 (WAL 12400), for 494 units of water from the Lower Namoi Groundwater Source; and
B.   combined water supply works and water use approval 90CA806356 for the construction and use of three Bores (works 1-3) to obtain water from the Lower Namoi Groundwater Source for the purpose of irrigation (Combined Approval 90CA806356). WAL 12400 nominates Combined Approval 90CA806356 as the only authorised extraction points.

8.   The location of the three bores is set out in the image above at paragraph 2.
Water Allocation
9.   During the period 1 July 2016 to 30 June 2017, the defendant’s water allocation for the purposes of s 60C the WM Act was 988ML (being the “Annual Use Limit” for WAL 12400).
10.   During the period 1 July 2017 to 30 June 2018, the defendant’s water allocation for the purposes of s 60C the WM Act was 988ML (being the “Annual Use Limit” for WAL 12400).
11.   During the period 1 July 2018 to 30 June 2019, the defendant’s water allocation for the purposes of s 60C the WM Act was 988ML (being the “Annual Use Limit” for WAL 12400).
12.   In each of the three relevant water years, ie 1 July 2016 to 30 June 2017, 1 July 2017 to 30 June 2018 and 1 July 2018 to 30 June 2019, respectively, the water allocation was derived from an accrual of 494ML (494 units with an Available Water Determination of 1.0ML/unit) and a carryover from the previous water year of at least 494ML.
13. In each of the three relevant water years, ie 1 July 2016 to 30 June 2017, 1 July 2017 to 30 June 2018 and 1 July 2018 to 30 June 2019, respectively, the water allocation able to be extracted was capped at 988ML by virtue of cl 34(9) of the Water Sharing Plan for the Upper and Lower Namoi Groundwater Sources 2003 which provides for a maximum usage of 2ML per unit of aquifer licence share component in any given water year (plus or minus any water trades, of which there were none).
The metered works
14.   There are three metered works at Havana North relevant to these proceedings, which correspond with the location of groundwater bore sites:
A.   the Diesel Pump (extraction site 17637) located at GPS co-coordinates S 30.05973 ̊ and E 149.30707 ̊,
B.   the Electric Pump (extraction site 105552) located at GPS co-ordinates S 30.05702 ̊ and E 149.31534 ̊, and
C.   the House Pump (extraction site 17636) located at GPS co-ordinates S 30.04956 ̊ and E 149.30904 ̊.

15. Each of those three pumps is an approved water supply work under combined approval 90CA806356, of which the defendant is the approved holder.
16. At all relevant times, on the pump at each of the three bore sites, there was an installed Davies Shephard Water Meter, the purpose of which was to measure the volume of water taken.

Relevant legislative provisions

The relevant sections of the WM Act as at 30 June 2017 were as follows:

60C   Taking water for which there is no, or insufficient, water allocation
(1)   Offences involving allocations under a single access licence A person who takes water from a water source to which this Part applies otherwise than in accordance with the water allocation for the access licence by which the taking of water from that water source is authorised and:
…
(b)   who knows or has reasonable cause to believe that the taking of the water is not in accordance with the water allocation,
is guilty of an offence.

Tier 1 penalty.
(2) A person who takes water from a water source to which this Part applies otherwise than in accordance with the water allocation for the access licence by which the taking of water from that water source is authorised is guilty of an offence.
Tier 2 penalty.

91H Failure to install or maintain metering equipment
…
(2) A person is guilty of an offence if the person fails to ensure the proper operation of any metering equipment that has been installed in connection with a water supply work or drainage work.
Tier 2 penalty.

91I Taking water when metering equipment not working
…
(2) A person who takes water from a water source to which this Part applies by means of a metered work while its metering equipment is not operating properly or is not operating is guilty of an offence.
Tier 2 penalty.

Section 91H(2) was amended in June 2018 by the Water Management Amendment Act 2018 (NSW) so that for the remaining charge periods, “water supply work or drainage work” was replaced instead by “water management work”.

Essential elements of the offence – Water Take Charges

Section 60C of the WM Act creates two offences: first, that provided for in s 60C(1) which includes an element of mens rea; second, that provided for in s 60C(2) which creates a strict liability offence.
As to the s 60C(1) charge the essential elements of the offence are:

That a person takes water from a water source;

The relevant water source is one to which Ch 3 of the WM Act applies to the water source;

An access licence authorises the taking of water from the water source;

Water is taken otherwise than in accordance with the water allocation authorised by the access licence; and

The person knew or had reasonable cause to believe that the taking of the water was not in accordance with the water allocation.

The s 60C(2) charges has each of the essential elements as set out in (1)-(4) above but does not have as an essential element that referred to in (5).
In this case, the Defendant has admitted the elements set out in (1)-(3) above, the question therefore is whether, in respect of the s 60C(1) charge the Prosecutor has relevantly established the elements in (4) and (5), and if not whether, for the purposes of the alternate charge in s 60C(2) it has established the essential element in (4).
As to the Water Take Charges the Prosecutor bears the onus of establishing beyond reasonable doubt each of the essential elements of that charge.
The Prosecutor identified by way of brief outline of its case at pars 8-10 of its written closing submissions the manner in which it put its case as follows:

8.   The prosecutor’s case is based on the evidence of a number of experts who, between them, estimate the volume of water that would have been required to meet irrigation needs within the relevant water years (Dr Meyer) and assess the potential sources of water capable of meeting those requirements from time to time (Professor Van Dijk and Robert Day). Essentially, the evidence of those experts seeks to model the system of water use on the Property – the inputs and outputs – for the relevant periods of the charges.
9.   The effect of the expert evidence considered collectively is that the irrigation requirements for the crops grown on the Property (i) could not have been met through rainfall, stored water and bore water use as recorded on the meters and (ii) would have required more bore water than the annual use limits that applied to WAL 12400 provided. In each of the relevant water years, substantially more water would have been required to produce the crops than that provided for by rainfall and bore water usage (as metered) and that additional water must have come from the bores (there being no other available source of water on the Property).
10.   The recorded meter use figures are so aberrant from the volume of water that must have been taken from the bores that the only reasonable inference is that the defendant knew that the meters were substantially under-reporting the take of water. Even on the defendant’s own estimate of “5 or something” megalitres per hectare “on average” (factoring in efficiency losses), the crop sizes it was sowing would have required more than its annual use limit in each of the water years. At the least, the defendant had reasonable cause to believe that it was taking water otherwise than in accordance with its water allocation.

The Prosecutor also accepted that its case relied upon circumstantial evidence to establish the amount of water actually taken and for establishing the Defendant’s state of mind.
Where a case relies upon circumstantial evidence a number of principles are relevant. In Shepherd v The Queen (1990) 170 CLR 573 at 579-580 Dawson J (with whom Toohey and Gaudron JJ agreed and with whom Mason CJ expressed general agreement) identified the approach to circumstantial evidence as follows:

Circumstantial evidence is evidence of a basic fact or facts from which the jury is asked to infer a further fact or facts. It is traditionally contrasted with direct or testimonial evidence, which is the evidence of a person who witnessed the event sought to be proved. The inference which the jury may actually be asked to make in a case turning upon circumstantial evidence may simply be that of the guilt of the accused. However, in most, if not all, cases, that ultimate inference must be drawn from some intermediate factual conclusion, whether identified expressly or not. Proof of an intermediate fact will depend upon the evidence, usually a body of individual items of evidence, and it may itself be a matter of inference. More than one intermediate fact may be identifiable; indeed the number will depend to some extent upon how minutely the elements of the crime in question are dissected, bearing in mind that the ultimate burden which lies upon the prosecution is the proof of those elements. For example, with most crimes it is a necessary fact that the accused was present when the crime was committed. But it may be possible for a jury to conclude that the accused was guilty as a matter of inference beyond reasonable doubt from evidence of opportunity, capacity and motive without expressly identifying the intermediate fact that the accused was present when the crime was committed.
On the other hand, it may sometimes be necessary or desirable to identify those intermediate facts which constitute indispensable links in a chain of reasoning towards an inference of guilt. Not every possible intermediate conclusion of fact will be of that character. If it is appropriate to identify an intermediate fact as indispensable it may well be appropriate to tell the jury that that fact must be found beyond reasonable doubt before the ultimate inference can be drawn. But where - to use the metaphor referred to by Wigmore on Evidence, vol. 9 (Chadbourn rev. 1981), par. 2497, pp. 412-414 - the evidence consists of strands in a cable rather than links in a chain, it will not be appropriate to give such a warning. It should not be given in any event where it would be unnecessary or confusing to do so. It will generally be sufficient to tell the jury that the guilt of the accused must be established beyond reasonable doubt and, where it is helpful to do so, to tell them that they must entertain such a doubt where any other inference consistent with innocence is reasonably open on the evidence.
As I have said, the prosecution bears the burden of proving all the elements of the crime beyond reasonable doubt. That means that the essential ingredients of each element must be so proved. It does not mean that every fact - every piece of evidence - relied upon to prove an element by inference must itself be proved beyond reasonable doubt. Intent, for example, is, save for statutory exceptions, an element of every crime. It is something which, apart from admissions, must be proved by inference. But the jury may quite properly draw the necessary inference having regard to the whole of the evidence, whether or not each individual piece of evidence relied upon is proved beyond reasonable doubt, provided they reach their conclusion upon the criminal standard of proof. Indeed, the probative force of a mass of evidence may be cumulative, making it pointless to consider the degree of probability of each item of evidence separately.

In considering a circumstantial case the whole of the circumstances established by the evidence are to be considered and weighed as a whole and not by a piecemeal approach to each particular circumstance. As was stated in Chamberlain v The Queen (No 2) (1983) 153 CLR 521 (Chamberlain) at 536 (per Gibbs CJ and Mason J):

It follows from what we have said that the jury should decide whether they accept the evidence of a particular fact, not by considering the evidence directly relating to that fact in isolation, but in the light of the whole evidence, and that they can draw an inference of guilt from a combination of facts, none of which viewed alone would support that inference. Nevertheless the jury cannot view a fact as a basis for an inference of guilt unless at the end of the day they are satisfied of the existence of that fact beyond reasonable doubt. When the evidence is circumstantial, the jury, whether in a civil or in a criminal case, are required to draw an inference from the circumstances of the case; in a civil case the circumstances must raise a more probable inference in favour of what is alleged, and in a criminal case the circumstances must exclude any reasonable hypothesis consistent with innocence (see Luxton v. Vines (49); and Barca v. The Queen (50)). The statement by Lord Wright in Caswell v. Powell Duffryn Associated Collieries, Ld. (51), that "There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish" is obviously as true of criminal as of civil cases. The process of reasoning in a case of circumstantial evidence gives rise to two chances of error: "first from the chances of error in each fact or consideration forming the steps and second from the chance of error in reasoning to the conclusion": Morrison v. Jenkins (52). It seems to us an inescapable consequence that in a criminal case the circumstances from which the inference should be drawn must be established beyond reasonable doubt. We agree with the statement in Reg. v. Van Beelen (53), that it is "an obvious proposition in logic, that you cannot be satisfied beyond reasonable doubt of the truth of an inference drawn from facts about the existence of which you are in doubt".

It is to be accepted that the Prosecution must exclude all reasonable hypotheses consistent with innocence. As was stated in R v Baden-Clay (2016) 258 CLR 306 at [46]-[47] (per French CJ, Kiefel, Bell, Keane and Gordon JJ):

46 The prosecution case against the respondent was circumstantial. The principles concerning cases that turn upon circumstantial evidence are well settled (33). In Barca v The Queen (34), Gibbs, Stephen and Mason JJ said:
“When the case against an accused person rests substantially upon circumstantial evidence the jury cannot return a verdict of guilty unless the circumstances are ‘such as to be inconsistent with any reasonable hypothesis other than the guilt of the accused’: Peacock v The King (35). To enable a jury to be satisfied beyond reasonable doubt of the guilt of the accused it is necessary not only that his guilt should be a rational inference but that it should be ‘the only rational inference that the circumstances would enable them to draw’: Plomp v The Queen (36); see also Thomas v The Queen (37).”

47 For an inference to be reasonable, it “must rest upon something more than mere conjecture. The bare possibility of innocence should not prevent a jury from finding the prisoner guilty, if the inference of guilt is the only inference open to reasonable men upon a consideration of all the facts in evidence” (38) (emphasis added). Further, “in considering a circumstantial case, all of the circumstances established by the evidence are to be considered and weighed in deciding whether there is an inference consistent with innocence reasonably open on the evidence” (39) (emphasis added). The evidence is not to be looked at in a piecemeal fashion, at trial or on appeal (40).

The Prosecutor’s case relied upon establishing the amount of water actually taken in each relevant water year from inferences to be drawn from expert evidence relating to:

The water demand of the cotton crop in each water year as identified by Dr Wayne Meyer;

The amount of water available in each water year from rainfall and runoff as determined by Prof Albert Van Dijk; and

The amount in each water year of any available stored water as determined by Mr Robert Day.

This evidence was then to be measured against the water allocation authorised by the licence for each water year, and would, on the Prosecution case establish the inference that the crop could not have been grown without taking more water than that allocated.
The Prosecutor also accepted that whilst all three circumstances were relevant in order to establish that it had proven its case to the relevant standard, the evidence of Dr Meyer as to crop water demand was an indispensable inference to be drawn. If the crop water demand amount was not accepted, the Prosecution’s circumstantial case would fail – as it could not establish a water demand to which the rainfall and stored water could be applied: Tcpt, 14 October 2022, p 553(40)-554(48).
Accordingly, it is necessary that I determine whether the Prosecutor has proven beyond reasonable doubt its circumstantial case having regard to the evidence including the three relevant areas of expert evidence that it relies upon to draw the relevant inferences.

Water demand of the cotton crop for each water year

Evidence

Prosecution evidence

On 19 December 2019, Mr Gary Phelps participated in an interview with Natural Resources Access Regulator Investigators – Mr Scott Mathieson and Mr Andrew Mannall, as the nominated corporation representative for the Defendant. A transcript of the record of interview (ROI) was tendered as evidence (Exhibit H).
In its closing submissions the Prosecutor identified the relevant factors to be drawn from Mr Phelp’s ROI to be, amongst other things, that Mr Phelps:

Indicated that he collected internal runoff on the property and from overland water flows but did not obtain or use any other forms of water other than metered bore water;

Denied that his bores were his main source of water and claimed that he relied “more on collecting runoff”;

Indicated that rainfall (both direct and captured) was the only difference between his bore water usage and the irrigation requirements of his cotton crop;

Indicated that he did not keep records of his ML/ha usage for crop irrigation but assumed water availability he would work on 5ML/ha “tops”; and

Stated that his land produces overland runoff on anything over an inch (that is, 25.4mm) of rainfall.

In response to a statutory notice, Mr Phelps indicated that the area of irrigated cotton sown was 320ha.
The Prosecutor tendered the Water Account Statements for the 2018/2019 water year which indicated a recording of the following usage by reference to recordings from the meters:

Period from

28.06.2018

Extraction Site/Pump

Water usage

To 29.01.2019

17636 (House pump)

20ML

To 29.01.2019

17637 (Diesel pump)

192ML

To 29.01.2019

105552 (Electric pump)

206ML

To 28.04.2019

17636 (House pump)

55ML

To 28.04.2019

17637 (Diesel pump)

32ML

To 28.04.2019

105552 (Electric pump)

68ML

To 30.06.2019

17636 (House pump)

0ML

To 30.06.2019

17637 (Diesel pump)

0ML

To 30.06.2019

105552 (Electric pump)

0ML

The amounts of water taken as disclosed in the Water Account Statements was less than the amount of water the Defendant was entitled to take pursuant to the water licence for each year.

Dr Wayne Meyer

Dr Wayne Meyer described his primary field of expertise as being “in irrigation water and soil management, crop physiology and soil science”. He holds a Bachelor of Agricultural Science (majoring in agronomy) and a PhD in water uptake of plant root systems.
Dr Meyer engaged in the task of estimating the amounts of water required to produce the cotton crops grown on Havana North in each of the water years 2016/2017, 2017/2018 and 2018/2019. He then calculated how much of this water would be required to be acquired from sources other than direct rainfall on those crops.
Dr Meyer concluded that for each nominated growing year the following:

2016/2017 crop was grown on 320ha with a nominal start date of 7 December 2016 and finish date of 17 April 2017. The crop was estimated to require 9.1ML/ha or at least 2,912ML of irrigation water to be available;

2017/2018 crop was grown on 324ha with a nominal start date of 5 December 2017 and finish date of 14 April 2018. The crop was estimated to require 10.6ML/ha or at least 3,693ML of irrigation water to be available;

2018/2019 crop was grown over two different periods and was split by an east and a west field:

The east field was 179ha with a nominal start date of 28 November 2019 and a finish date of 28 March 2020. The crop was estimated to require 11.2ML/ha or at least 2,005ML of irrigation water;

The west field was 157ha with a nominal start date of 10 December 2018 and a finish date of 20 April 2019. The crop was estimated to require 10.2ML/ha or at least 1,601ML of irrigation water.

In order to undertake his estimate of water required Dr Meyer used a methodology explained in Exhibit 5: John Hornbuckle et al, “IrriSAT Technical Reference” (2016), accessed 27 November 2023 (IrriSAT Technical Reference).

Crop water requirements (ETc) can be estimated considering a climatic parameter called reference evapotranspiration (ETo), which represents the evapotranspiration from a standardized vegetated surface, and a crop factor called crop coefficient (Kc) that relates ETc to ETo by the equation (Allen et al., 1998):
ETc = ETo Kc

Where:
ETc crop evapotranspiration [mm]
ETo reference evapotranspiration [mm]
Kc crop coefficient [-]
ETo is the rate that an extensive surface of green, well-watered grass of uniform height actively growing and completely shading the ground, evaporates water. As soil factors do not affect this reference surface, the only factors affecting ETo are climatic parameters (solar radiant energy, air temperature, humidity and wind speed). These climate variables can be obtained from weather data.

Dr Meyer sourced daily weather data from the SILO site, using the dataset for the Wee Waa Agricultural Research Station (CSIRO Myall Vale, station 53022) (Myall Vale Weather Station). The Myall Vale Weather Station was approximately 33.2km from Havana North. The data sourced by Dr Meyer included daily maximum and minimum temperatures, rainfall and the calculated value of ETo that used observed values of humidity (vapour pressure) and incoming solar radiant energy (sunlight). That was the basis of the ETo figure used by Dr Meyer.
Dr Meyer determined the crop coefficient (or Kc) value using the IrriSAT weather-based irrigation scheduling tool. As Dr Meyer explained:

The IrriSAT methodology uses satellite images to determine the Normalized Difference Vegetation Index (NDVI) for each field, from which the plant canopy size can be determined and a specific crop coefficient (Kc) can be estimated.
…
When a particular area of interest such as an irrigated field is identified it can be marked with a red outline and the value of the specific crop coefficient (Kc) can be derived for each pixel in the marked area using the relationship between NDVI and Kc as described by Hornbuckle et al. (2016). Kc has been shown to be closely related to the canopy ground cover fraction (i.e. light interception) which can be estimated from remote sensing measurements of the Normalized Difference Vegetation Index (NDVI).

Dr Meyer described the next step in the following terms:

With values of reference evapotranspiration ETo determined from the daily weather data and then localized crop evapotranspiration (ETc) determined from ETo and the satellite images it is then possible to estimate the crop water use. It is assumed that applied irrigation was managed so that the additional water from rainfall was accounted for. It is important that the duration of water use by the cotton crop is identified i.e. the date when significant crop water use starts and the date when significant crop water use finishes.

Dr Meyer determined his estimates for the start and end dates of the crops by reference to normalized difference vegetation index (NDVI) distribution observable from satellite imagery.
Once the length of the season was determined, Dr Meyer generated daily values of ETc over the course of the cropping season to arrive at a figure of total crop water use. The volume of water that needs to be applied as irrigation water is the difference between the rainfall over the course of the cropping season and the total crop water use figure.
As Dr Meyer explained, a further determination must then be made so as to arrive at the volume of irrigation water required. The level of irrigation efficiency on the farm must be determined to assess the volume of source water required to service the crop water requirements. Dr Meyer adopted a Whole Farm Irrigation Efficiency figure (WFIE) of 70% (which accounts for water losses due to evaporation, seepage, deep percolation and the like). The consequence of the application of a WFIE is that the total amount of water required to apply the amount for crop water demand to the crop itself must be increased to take account of these losses – that is, on Dr Meyer’s estimate, an additional water volume of 30% is required.
Dr Meyer applied this method to each of the relevant water years. Dr Meyer expected that his estimates of crop water use had an uncertainty of ±15%.
By way of example, in the 2016/2017 water year Dr Meyer nominated a crop starting date of 7 December 2016 and a crop finishing date of 17 April 2017. This period of 132 days did not reflect the time from planting to harvest as it omits the period over which seedlings are emerging and evaporating only relatively small amounts of water. The total irrigation requirements are estimated by Dr Meyer over the course of the 132-day period to have been 2,912ML, with an error rate of ±15%. The lower bound of that figure (that is, 15%) is 2,475.2ML. Dr Meyer’s figure was based on total rainfall of 185mm over the relevant period of 132 days. Dr Meyer undertook a similar exercise in each of the other water years the subject of the charges.
As Dr Meyer’s calculations included an amount for rainfall contribution the amount of the total irrigation water requirement of 2,475.2ML would need to be derived either from: one or more of the bores on the Property; via stored water; or via rainfall harvested into storages on the Property.
Dr Meyer observed that for the relevant water years the crop yield for irrigated cotton was less than the average yield reported in the Cotton Seed Distributors Ambassador Network Program (CSD). He considered that the comparability between the actual yield indicates that his estimate of irrigated water requirements is valid and consistent with that needed for a fully irrigated and reasonably well managed crop.
He also compared the yield for the dry land crops (that is, not irrigated) grown on Havana North. Again, the actual yield for each relevant water year was below the average reported by CSD. He considered that such a yield was explicable as the crop water demand would have exceeded the rainfall and indicates insufficient water available from rainfall and water stored in the soil profile to meet crop needs.
Dr Meyer was cross-examined on his evidence.
As to his use of rainfall data Dr Meyer gave evidence in cross-examination that:

He utilised the data from the Myall Vale Weather Station for rainfall data;

Looking at data from Narrabri Airport, Molly, Bellata (Aberfeldie), Pendennis and Wee Waa (George Street) Weather Stations shows a variation in rainfall in the general locality;

Whilst the volume of water varies from month to month on a statistical basis the variability is not significant, however, the variability may be “made up” in periods outside the growing period for a cotton crop and his evidence is the amount of rainfall during the growing season for cotton;

It can be inferred from the rainfall information available that across this landscape the rainfall in the area on any given day in any given month does not fall uniformly across the landscape; and

As there is no rainfall gauge at the Property it cannot be known what the rainfall was at the Property, but it can be said that it is unlikely to be significantly different from the known rainfall – but it was accepted that it could be higher or lower.

As to his identification of the nominal start and finish dates of the cotton crops Dr Meyer indicated in cross-examination that:

He did not establish these dates from information from the Defendant;

He utilised satellite imagery to determine when a green leaf is emerging from the crop as the start date – rather than the date of sowing the crop – and the finish date is the date where “brown off” of the green leaf is observed;

From a combination of the best the satellite imagery available he derives an NDVI established from identifying the different wavebands per pixel utilsing the IrriSAT computer programme; and

The satellite images are taken on a weekly basis so to identify a particular day a process of inference must be undertaken.

With respect to the water consumption calculation Dr Meyer gave evidence that:

The calculation in an ideal world would be calculated from daily data. However, in this case only having weekly data, a degree of assumption must be undertaken which is sufficient based upon his experience;

He had not been to the Property nor spoken to the Defendant;

Whilst a particular farm crop does not develop uniformly the IrriSTAT computer programme accounts for that by a statistical analysis;

The IrriSAT computer programme requires a selection of a variable for crop height to determine the ETo. He was not provided with any data on crop height but the IrriSAT computer programme does not require a determination of when a crop reaches a particular height but rather whether as a crop it is a high or low height crop;

Cloud cover on particular days will influence ETo due to net radiation at the crop surface. He had no details for the Property and utilised those derived from the Myall Vale Weather Station as, in his opinion, across the landscape the net radiation would be very similar on a daily basis;

He applied to the water usage figure an uncertainty rate of ±15% based upon his experience and it should not be lower or higher. There is no basis upon which this figure is derived apart from experience. The effect of that uncertainty rate will vary depending upon the rainfall data selected.

He applied a WFIE of 70%. This figure was derived from a paper by Guy Roth et al, “Water-use efficiency and productivity trends in Australian irrigated cotton: a review” (2013) 64 Crop & Pasture Science 1033 (the Roth Paper) which measured a range from a high efficiency rate of 80% to a low efficiency rate of 43% with an average of 70%. The Roth Paper showed some efficiencies exceeded 90%. However, such figure related to individual efficiencies whereas he considered WFIE; and

Exhibit 8, a Department of Industries fact document entitled “Benchmarking water productivity of Australian irrigated cotton” (2019): accessed 27 November 2023 (2019 Fact Sheet) indicates that there is increasing WFIEs year on year and he accepted this as a true statement. The Roth Paper considered farm efficiency of 70% in 2006 to 2008 and of around 83% and 81% in 2012/2013 and 2017/2018 respectively. He cannot categorically rule out a WFIE in this case of 80% because he has not been asked to undertake the empirical exercise on the ground and has no firsthand experience of the efficiencies of the Property.

Dr Meyer identified for the 2016/2017 water year a requirement of 9.1ML/ha was the whole of farm source water requirement. He considered Exhibit 7, a publication entitled “Water Use Efficiency in the Cotton Industry” (2016): accessed 27 November 2023 (2016 Fact Sheet) prepared by Cotton Australia with which he was familiar. He accepted that there was a trend of improving water efficiency among cotton farmers of about 4% per annum. That document identified an average irrigation requirement of 7.8ML/ha being different to his calculation because it related to irrigation requirement rather than the whole of farm source water requirement. He also accepted that the Roth Paper identified a 6-7ML/ha requirement but did not accept that such figures were comparable to his figure as his figure was whole of farm source water requirements, which would be higher than the irrigation requirement. He was unable to identify exactly how much higher in this case.
He accepted that the ginning records of bales of cotton provided to the gin as recorded in the evidence was unable to permit a calculation of irrigation water either used or required.
As to the cotton yield for each of the water years Dr Meyer has stated in his report:

124. The calculations made using the IrriSat software takes account of the actual condition of the crop that is recorded by the satellite instruments. This means that if for some reason, the crop leaf canopy does not grow well this will be reflected in the lower crop coefficient (Kc) value that are used to calculate crop evapotranspiration and hence the irrigation water required. The estimated amount of water required to produce the cotton yields on Havana North for 2016-17 was 2912ML, for 2017-18 it was 3693ML and for 2018-19 was 3606ML.
125. If the crops, especially those in the latter two seasons had shown evidence of being better managed then the water required would have been greater. The poor yield (7.4 bales/ha) of the 2018-19 irrigated crop is likely to have resulted from a relatively poor crop establishment, probably insufficient fertilizer and perhaps insufficient irrigation water. It is also likely that the continuous cropping of cotton on the same fields during all three seasons resulted in poor growing conditions from plant nutrient insufficiency, disease buildup and or weed competition.

He was cross-examined on this evidence and stated at Tcpt, 11 October 2022, p 333(5)-334(6):

Q. At paragraph 125 of your expert report, if I could ask you to turn to that paragraph, at court book 1329, one of the things you suggest for the 2018/19 crop year, if I could refer to it--
A. Yes.
Q. --as that, having regard to the yield per hectare that’s identified in the ginning records, based on the known planning area of 7.4 bales per hectare--
A. Yes.
Q. --you ascribe that to a number of matters. You say relatively poor crop establishment, probably insufficient fertiliser, and perhaps insufficient irrigation water. Do you see that?
A. Yes.
Q. And, of course, not having measured any of those variables, you’re not expressing a view there as to whether any of those things were in fact the case, you’re just, I suggest, identifying some common causes for a reduction in bales per hectare. That’s correct?
A. No, that’s not correct. I - I have - the evidence associated with those statements is - comes from, firstly, looking at the satellite imagery. The evidence of relatively poor crop establishment comes from the - you can see that from the satellite imagery. You can see during the growing season that rather than the crop being a very robust green, because it’s got adequate fertiliser, that there is period during that season when there was very poor greening and yellowing on the crop. Very likely from insufficient fertiliser
And thirdly, the evidence that you’ve had three cotton crops grown in a row, without a break crop is unusual in terms of good cotton crop management. And usually, because of the need for break crops and so on, that’s unusual practice, and was generally known to lead to poor yield from subsequent crops.
Q. But of course, not having been to Havana North, you’ve got no knowledge of the amount of fertiliser used as in terms of the amount bought and applied to these fields. Do you?
A. I don’t have direct evidence of that information, no.
Q. Similarly, in relation to the manner of sowing and crop establishment and the techniques used by the farmer over that growing season, you’ve got no actual objective information about that. Do you?
A. I have no objective information about the methods of establishment or so on. I can see the result of the establishment and the growth of the crop coming from the satellite imagery.
Q. And indeed, one of the things you identify a paragraph 125, is that the amount of bails per hectare, 7.4. Relatively low the locality or region for that year, that 2018, 2019 year. That could be something that results from insufficient irrigation water. And that's something that you've expressly said at paragraph 125 of your report.
A. That's correct. It could be from that. You don't know exactly what the cause is, but from the evidence of the crop, clearly the crop was not thriving and there were a number of causes that could be - could have caused that.

Antecedent soil moisture at beginning of cropping

Dr Meyer made the assumption that the same amount of water would be present in the soil profile at the start and the end of the crop growing season. He made this assumption based on his experience and suggested that it was a reasonable assumption.

Defendant’s evidence

The Defendant adduced expert evidence from Mr James Purcell, Chartered Professional Civil Engineer with experience in water resources and irrigation engineering. He gave evidence that his specialty was the investigation, design and construction project management of irrigation infrastructure and in the last 22 years, the measurement and management of water use efficiency on irrigation farms. He has also developed and used software programs relating to the measurement of water balance on irrigation farms.
Mr Purcell gave evidence that he had undertaken an inspection of the Property on 7 September 2022.
Mr Purcell had considered the evidence of Dr Meyer. As to the evidence of Dr Meyer, Mr Purcell disputed the water needs for each cotton crop as identified by Dr Meyer.
Mr Purcell identified the seasonal crop water requirements as dependent upon climate and the length of the season. To calculate that requirement Mr Purcell noted:

5.0   Seasonal Crop Water Requirements at Havana North.
5.1   The actual water volume consumed by the crops at Havana North through evapotranspiration will vary slightly each season depending on the climate and the length of the season.
5.1   Crop Water Requirements
5.1.1   Calculation of the crop water requirement for any season and crop requires basic crop and climate data.
5.1.2   To calculate the crop water requirements for cotton at Havana North, first it is necessary to determine whether the crop was fully irrigated and disease free. For those conditions it is possible to calculate the crop water requirements based on plant emergence date, daily reference evapotranspiration at Havana North, crop factors and defoliation or crop end date.
5.1.3   Daily reference evapotranspiration is readily available from the SILO Australia climate data the crop is fully irrigated and disease free the most reliable method of calculating the crop water requirement, in my opinion, is to multiply the measured/calculated reference evapotranspiration by the crop factors as described in Food and Agriculture Organization of the United Nations - Irrigation and Drainage Paper 56 titled “Crop Evapotranspiration – Guidelines for Computing Crop Water Requirements”.
5.1.5   This publication provides the crop factors which basically converts the reference evapotranspiration which is for a grass reference crop to say cotton at Havana North.
5.1.6   If it appears that the crop has been water stressed or not reaching full potential, then it is possible to determine the “crop factors” using the IrriSAT satellite imagery technique.
5.1.7   This technology uses satellite images of the field in question to determine the Normalised Difference Vegetation Index (NDVI) which in turn can produce a crop coefficient for that time. By multiplying the reference evapotranspiration by the IrriSAT calculated coefficient, the daily crop water use can be determined.

Mr Purcell considered that Dr Meyer’s use of a WFIE of 70% could not be reliably accepted as:

8.1   The seasonal calculated crop water requirements is the volume of water that the crop used in the season. The volume of water that the irrigation farm needed to have available to be able to provide the crop water requirements is going to be larger than the crop water requirements because of the water losses in the farm infrastructure while storing and delivering the water to the crop.
8.2   The water losses at Havana North would be from:
•   Seepage and evaporation in the dams;
•   Seepage and evaporation in the supply channels;
•   Seepage and evaporation in the drains from the fields back to the dams;
•   Evaporation from the surface of the water on the fields during irrigation;
•   Over irrigation or deep percolation of water below the crop root zone; and
•   Any accidental loss of water due to infrastructure failure or overtopping of channel or drains.

8.3   The Whole Farm Irrigation Efficiency (WFIE) shows the amount of irrigation water that was used by the plant as a percentage of total water inputs to the farm (Roth et al. 2013). If there were no losses on the irrigation farm, then the WFIE would be 100%.
8.4   The selection of a WFIE of 70% by Wayne Meyer in Paragraph 48 of his Expert Report seems to be based on the stated improvement in average WFIE from 57% to 70% in the paper by Roth et al. 2013.
8.5   WFIE is usually calculated based on measured or calculated water losses on farm and calculated crop water use.
8.6   As none of Havana North’s water losses have been calculated or measured nor have the total available water inputs been measured or calculated, the selected value of 70% for WFIE may or may not be reasonable.
8.7   In my opinion, it is very difficult to justify the selection of an average value for WFIE for Havana North particularly without completing a detailed site inspection.

Mr Purcell was cross-examined on this evidence. Mr Purcell did not resile from his opinion that the 70% WFIE adopted by Dr Meyer was an unreliable assumption. He stated that he had developed a water track programme (in conjunction with others) that was designed to do a whole of farm water balance. The determination of such a balance required an examination of farm infrastructure as well as farm management practices. Absent such an analysis adopting a WFIE was “making a judgment call on some unknown basis”: Tcpt, 13 October 2022, p 500(40)-(41).
He stated that he had used the IrriSAT computer programme in his practice. It was not his first choice of a programme to use for determining water usage requirements for a crop, his first choice being the use of FAO56 (being the document referred to at [5.1.4] of his report and recited at [54] above). The IrriSAT computer programme was his second choice. He considered it to be an inferior tool because it is an indirect measure of Kc utilising infrared from satellite images.

Prosecutor’s submissions

Dr Meyer’s determination of crop water demand and irrigation water requirements should be accepted. He utilised an appropriate methodology for determining crop water demand utilising acceptable available objective evidence.
The criticism of Dr Meyer’s approach would not be accepted as:

The criticism of his adopted error rate was not established. As was stated by Dr Meyer in rejecting the Defendant’s suggestion that the error rate should be higher, in the order of 20% (Tcpt, 11 October 2022, p 320(17-21)):

No. The - the figure I gave - I gave you that figure, the 15% is on my experience through, again, 20 years of measuring ETc and ETo, and looking at how well we do in terms of using that relationship between ETo and ETc using the Kc value. And as it indicates that variability is plus or minus 15%. So, in general terms, it could be slightly greater or slightly less of that sort of order.

There does not appear to have been any basis for the suggested error rate of 20% and it was roundly rejected by Dr Meyer having regard to his substantial experience in the measurement of ETc and ETo.

The criticism of the adoption of a 70% WFIE should not be accepted. Whilst Dr Meyer agreed that he could not “categorically rule out” that the WFIE was as high as 80% he did not however resile from his opinion that 70% was the appropriate figure (Tcpt, 11 October 2022, p 324(11-15)):

No, I don’t agree with that because I – from my – looking at the data which is – particularly the data which is contained in some of those previous tables on the Roth paper, the 80% is an exception and the – the majority of the – of the whole farm irrigation efficiencies tend to be in the lower end, and the 70% that I chose as the average value is an – is an upper value, a conservative value for a reasonably well run – a pretty well run irrigation system and a whole farm basis.

The Court would find that Dr Meyer was well justified in adopting a figure of 70% having regard to:

His evidence that individual application losses can range from 80%-90%;

His evidence that WFIE takes into account more than simply individual application losses;

The evidence of Mr Purcell that WFIE takes into account (in addition to features of individual application loss) a range of matters from which there can be water losses;

The Roth Paper that observes that the largest loss is from evaporation from on farm water sources, which position was supported by Mr Phelps in his ROI where he observed that the evaporation rate he was experiencing in late 2019 was “scary”. Such evaporation rates are also indicated by the SILO data for the relevant years; and

Poor farm management practices including three successive years of cotton cropping; lack of use of soil water probes to maximise water efficiency and the storage of water in water storages where evaporation can occur.

The criticism of Dr Meyer with respect to his adoption of the assumption that the water stored in the soil profile at the start of the cropping season would not be accepted. His explanation as to why he made such assumption should be accepted as he explained at Tcpt, 11 October 2022, p 332(45)-333(3) that:

And the soil profile will only hold a certain amount of water because it will drain through. Not all of that water will be available for the subsequent crop…
if it was to refill the soil profile, then that water would be available, and as I indicated in my report, make the assumption that the amount of water at the start and the end of the season is the same, in the absence of any other information, that’s a reasonable assumption.

The Court would conclude that this is a reasonable assumption to make given that the soil would be exposed to irrigation over the course of the cropping season. Indeed, there is no evidence to contradict the reasonableness of that assumption. Further, the poor performance of the dryland crops in 2016/2017 and 2018/2019 is indicative of either a lack of moisture in the soil profile when the crops were planted or poor seasonal rainfall.

Ultimately, the Court would accept and act on Dr Meyer’s estimates as to the volume of water applied to the crops in each of the relevant water years. In the context of the criminal standard, the Court may wish to proceed on the conservative approach of adopting the lower bound of Dr Meyer’s estimate (that is, -15%). That is of course not his actual estimate, but it is a figure he regards as plausible.

Defendant’s submissions

The evidence of Dr Meyer as to crop water demand and irrigation water requirements should not be accepted as a proper foundation for determination of those factors. The exercise undertaken by Dr Meyer is based upon assumptions without on the ground investigation and is insufficient to found the necessary inferences that the Prosecution seeks to draw. In short, just about every variable that needs to be measured to work out what amount of water was needed from the bores is missing and unquantified in the evidence. The only actual measurement of any relevant water in this case is that taken from the bores.
By virtue of the analysis undertaken by Dr Meyer the determination of crop water demand and irrigation water demands are very sensitive to the assumptions applied in the analysis. A variation in any one of the assumptions may have a significant effect on the ultimate calculation. As these are assumptions made, rather than direct evidence, the making of the assumption must be appropriately justified. Dr Meyer’s assumptions have not been justified and should not be accepted. In particular, the following assumptions made by Dr Meyer should not be accepted:

The use of a 70% WFIE – Mr Purcell gives evidence that the WFIE of the farm is uncertain without it being calculated from on the ground investigation, assessment and measurement. Dr Meyer accepted that it was not impossible for a WFIE figure of 90% to be reached and the Roth Paper at p 1042 has some examples of farms achieving this level of irrigation efficiency. Dr Meyer has not measured the WFIE at Havana North and has not undertaken any empirical exercise on the ground and could not categorically rule out a WFIE figure of 80% or above.

Rainfall – The use of the Myall Vale Weather Station is inappropriate in a locality where rainfall is variable. The evidence suggest that a single weather station as used by Dr Meyer is an inappropriate means to determine the rainfall to be used to determine the amount of irrigation water required to meet crop demand. The evidence supports a finding that the rainfall in the locality is highly variable such that the adoption of a single weather station as a proxy for measurements at Havana North is highly problematic.

The application of a nominal start date – Dr Meyer selected a nominal start date that cannot be exactly known just from the satellite imagery rather than the actual start date for the start of the crop year. The dangers of the estimate and computer algorithm based remote analysis approach.

The assumption that the soil moisture level would be the same at the beginning and end of the growing period. Dr Meyer had not measured the antecedent soil moisture at the start of the growth season. There is evidence of significant rainfall at local stations prior to his December start dates. The assumption of Dr Meyer that there was the same level of soil moisture at the start and end of the season, rather than, for example, a high soil water content start point which the crop was able to draw on during the early part of the season, is not supported by any evidence at all. For both the 2017 and 2018 start dates there was significant rainfall in the days before the nominal start of Dr Meyer's crop season: 3 December 2017 Wee Waa (George Street), 47.6mm; and 22 November 2018, 30.1mm. The nominal start date for the 2017/2018 crop was 5 December 2017, and for the eastern fields for 2018/2019 was 28 November 2018. The likely presence of significant soil moisture at the start of both these seasons from rainfall has not been considered by Dr Meyer and is a significant omission.

The error rate – Dr Meyer’s determination of his error rate was not properly substantiated. In any event, the consequences of his error rate are such that the difference in the determination of the amount of water required for crop demand and irrigation water will vary considerably.

The unreliability of Dr Meyer’s assessment of water demands was also evidenced by error or concessions made in his own evidence, including:

Dr Meyer agreed only after much questioning with the obvious proposition that the ginning records showing the bales per hectare of cotton do not provide a water usage figure, changing his earlier evidence initially denying this proposition;

Dr Meyer’s acceptance that the low yield in say 2018/2019 of cotton from Havana North could be the result of insufficient irrigation water, a concession that undermines the entire Prosecution case which is based on seeking to prove excessive water use;

Dr Meyer was in error in recounting his own evidence. He stated that the 9.1ML figure was the crop water usage requirement not the irrigation water requirement. However, this is incorrect – the 9.1ML is derived from 822mm (crop water usage) minus 185mm (rain) and then applying a WFIE of 70% to give the total water needed ((637 / 70) x 100 = 910mm). This gives 9.1ML/ha, which is not the crop water usage requirement but Dr Meyer’s calculated irrigation water post rainfall and after WFIE requirement; and

Dr Meyer (and the Prosecutor) is incorrect in submitting that the irrigation water figure in the Roth Paper is taken before WFIE is factored in. It certainly is not source water, or the crop water usage figure, but it is the amount after rainfall required from the irrigation source. The fact that Dr Meyer’s calculation is significantly more than the amount of water that would usually be required for irrigated cotton crops is apparent from an assessment of the Roth Paper. Dr Meyer himself identified at par 122 of his report that his irrigation water requirement figures are above what would usually be expected. This alone would raise issues as to the reliability of the calculation of Dr Meyer and some justification for this significant departure from the norm.

Mr Purcell’s evidence should be accepted where there is a departure from Dr Meyer. He is a highly experienced irrigation engineer who has worked around the world and extensively in Australia in this specialised field and is now based locally. He explained, actual measurement of the variables going into crop water usage must be known before an estimate as to the amount required to irrigate a particular crop on that farm in a particular season can be known. If this is not done, the result is not certain and entirely speculative. There is no criticism made of Dr Meyer’s expertise, but he has been instructed by the Prosecutor to be the essential witness in a criminal case as to matters requiring certainty that his methodology cannot and does not purport to provide. Inexplicably, he was not even instructed to inspect Havana North or surrounds and was left to assume that the cotton crop was to be considered a “tall crop” from the moment green shoots appeared.

Findings on crop water requirements

Dr Meyer’s evidence relied upon a number of critical assumptions which affect his calculation of water demand in each relevant water year. These assumptions are:

The length of time the crop was grown – including start and finish dates;

Antecedent soil moisture levels;

Rainfall on Havana North;

The WFIE represented as a percentage of water available for use by the crop;

The adoption of a 15% error rate; and

The appropriateness of the IrriSAT computer programme for determining crop water usage.

I will consider each of these assumptions in turn.

Crop growing period

There is some importance to the identification of the crop growing period as the time dictates the period of water demand, and therefore the average amount of water required by that crop. Of particular importance are the start and finish dates as these set the parameters for the determination of the water usage.
Dr Meyer determined the relevant start and end dates from an examination of satellite imagery. The end date was determined as the date where the crop was seen to have “browned off” in that it was either harvested or no longer having a water demand. The evidence of the finish date was both a visual representation together with the representation made to the gin (where the finished cotton product was delivered after harvest) of the date of harvest. There was little criticism by the Defendant (including Mr Purcell) of Dr Meyer adopting the crop finish date, based upon the availability of a discernible visual representation of the crop end date being ascertainable from the examination of the aerial photographs together with the representation made to the gin. For those reasons, I accept the end dates for each of the water years as determined by Dr Meyer.
The start date for the crop, however, has a need for precision. Dr Meyer accepted in evidence that the date a crop is planted as seed can affect water demand depending upon the existing (antecedent) soil moisture conditions. If a crop was planted at a point in time where rainfall had recently occurred, the crop would utilise the water stored in the soil profile rather than relying on the application of irrigation water. Therefore, the identification of the date the crop was planted, and an examination of soil water availability could affect the water demand calculation.
Dr Meyer accepted in cross-examination that the date of planting could have been ascertained from the Defendant, however, such information was not available to him, nor did he request it. Dr Meyer accepted that if he had that information from the Defendant, it would reduce the assumptions he has made as to the growing period: Tcpt, 11 October 2022, p 310(46)-311(13).
Dr Meyer determined crop start date from the point in which he could ascertain some development of a green colour of the crop from an examination of the satellite imagery. The satellite imagery he used was a weekly image rather than a daily image. He visually interrogated the images, and he determined the nominal start date to be the date on which the seeds sprouted a crop that had grown to a height that had broken through the surface level of the soil. The term “nominal” start date was the nomination provided by Dr Meyer, as he attested that he could not ascertain from the satellite images the sowing date but the date on which the green shoots become apparent is used to nominate a start date for the crop.
Dr Meyer accepted that the nomination of a start date could have a material effect on the amount of water required. The consequence of the start date was demonstrated in the example put to Dr Meyer at Tcpt, 11 October 2022, p 329(37)-330(14) where he stated:

Q. --year, you identify for 2017/2018 a cotton crop start date on Havana North of 5 December 2017. That’s correct.
A. Yes.
Q. Could I ask you to go to the court book at page 965. In the same volume of the court book, I just ask you to turn to page 965. You’ll see some weather records. You’ll see on page court book 965 the daily rainfall records for 2017 for the Wee Waa Pendennis station, the station that’s 11 km--
A. Yes.
Q. --to the south. I’m not suggesting this was in any way intentional, but you’d agree with me that one consequence of the 5 December 2017 start date for the growing season for the 2017/2018 year is that in the amount of rainfall that you factor in over that growing season, it so happens that you miss out the 46.8 ml that occurred on 3 December. That’s just a consequence of selecting a particular nominal start date, isn’t it?
A. That start date was determined from the satellite images that I could see, not determined by trying to bias it one way or the other with any rainfall event.
Q. I understand that and I’m not suggesting otherwise, but of course, it’s plain to demonstration that as a matter of objective fact, or if another analysis of the satellite data slight variance to the assessment you’ve made were taken, and the growing season was said to start on 2 or 3 December, then that would increase the amount of rainfall over that particular growing season by proportionally, I suggest, quite a significant amount. A 46-milimetre (sic) figure when we’re talking about overall amount of around 185 ml over the growing season. You’d agree with that.
A. That would be true.

The evidence discloses that a “nominal” start date was only required to be determined as no direct evidence was sought to determine the actual start date. In circumstances where both the length of the growing period and the actual start date could have the consequence of materially affecting the water demand for the particular growing year the absence of enquiries being made to the Defendant is unexplained. The accuracy of the nominated start date and growing period is uncertain. Whilst Dr Meyer sought to use the evidence available to him, the question to be determined in these proceedings from his evidence is the water demand of the particular crop. Absent a more reliable determination of the start date of the crops and as a consequence the length of the growing period, this input into Dr Meyer’s calculation is at best an educated guess.

Antecedent crop moisture levels

Dr Meyer accepted that if, prior to sowing the crop, a rainfall event had occurred, at least some of the rainwater would refill the soil profile and be available for use by the crop. Dr Meyer did not explain to what extent his calculation would require modification if there was in fact rainfall at Havana North at a relevant period prior to sowing. In light of his acceptance that at least some rainwater may refill the soil profile this would appear to suggest that the amount of irrigation water at the commencement of the growing seasons would be required to reflect such a situation. The assumption made by Dr Meyer, at least with respect to the period at the commencement of each growing season, appears to be potentially unreliable if rainfall had been received at Havana North and to that extent the assumption made, absent some basis on which it can be made, renders the calculation unreliable.

Rainfall on Havana North

There is no direct evidence of the rainfall on Havana North in any of the relevant years. Dr Meyer has adopted the rainfall data recorded at the Myall Vale Weather Station. In addition to the rainfall data Dr Meyer also used the relevant climate variables data including temperature, solar radiant energy, humidity and wind from the Myall Vale Weather Station.
Dr Meyer noted in his statement of evidence (Exhibit Z) that “the weather data used needs to be obtained from locations as close as possible to the site of interest”. During the course of cross-examination of Dr Meyer, the Defendant provided details of other weather stations in proximity to Havana North (Exhibit 2) which disclosed:

Dr Meyer accepted from considering the rainfall data for each of those weather stations that there was variability across the landscape. He stated in his evidence at Tcpt, 11 October 2022, p 307(4)-308(43):

Q. So I suggest to you that that kind of data allows us to arrive at a number of propositions. The first is that evidently the rainfall is not the same at the gauges in these stations over the three or four month periods, December to April in any given year that we are considering, even though the stations are physically proximate to each other on the ground. There's
A. I'd like to disagree, with respect, to the figures are here, as in Narrabri Airport, I suggest, is - is - is very different from the other one, two, three, four stations that you’ve - you’ve identified there. And you see, within those four stations, the variability is on an annual basis, is actually quite small.
Q. But just asking you to go to - and I suppose you would say that the Narrabri Airport station, it’s the furthest east, it’s 61 kilometres away.
A. Yes, and a lot closer to the mountains.
Q. But asking you to consider the matter on a month by month basis--
A. Yes.
Q. --and even, if you like, you know, disregarding Narrabri Airport, but considering the other stations, Moree, Bellata, Pendennis and Wee Waa, George Street, I suggest to you it’s very evident from the figures in the table that there’s a high degree of variability, even amongst those stations that are closer together, excluding Narrabri Airport, considered on a month by month basis, over the period December to April in each year. That’s correct, isn’t it?
A. There is variability, as one would expect. Yes. But as I’ve indicated, I think, in my report, over time and over a - particularly over a five or six month period that we’re talking about, a lot of that variability between stations tends to even out.
Q. Well, certainly, as we’ve established by look at - it’s some of those figures, it does not exactly even out over a four or five month period, although you may say, on average, the values of the stations converge. Is that what you’re saying?
A. They tend to be similar, that’s correct, when you total them up. That--
Q. On a statistical average, over many, many years.
A. A statistical basis. That’s correct.
Q. But in any given month, of course, as we can see from the table, even looking at those four stations, disregarding Narrabri Airport, in any given month, self-evidently, the rainfall at any one of those stations may exhibit a significant difference from the rainfall at any one of the others. That’s something one can see in the table, isn’t it?
A. There is variability, no doubt about it, and they vary between months, but again, take, for example, in 2018, Bellata, and compare it with the other three stations, it has a high rainfall in February, but then low rain - a lower rainfall in March. And so you see that - that trend happens, it’s the vary nature of rainfall in that kind - part of landscape.
Q. But sometimes, of course, for example, in the 2019 year, we have one of Bellata’s high rainfall months occurring towards the end of 2019 at the 55.6 in November. So, you know, the station may make up an amount, if I could put it that way, at a time it’s outside the December to April growing period that we’re dealing with. That’s correct, isn’t it?
A. It can be - that can be the case. Yes.
Q. Now, look, what one can certainly infer from this information, I suggest to you, as a scientist, is that across the landscape, this landscape within which Havana North is located, it’s quite clear that the rainfall in this area, on any given day, in any given month, certainly does not fall uniformly across the landscape.
A. That’s correct.
Q. For example, as there is no gauge - no rainfall gauge information that you’ve been provided with for gauges on or located on Havana North itself, if one were to go, for example, to the period of February 2018 in the table, even though we get, for example, in that February 2018 table, a figure of 39.2 for Pendennis, a station, you know, the closest station to Havana North, and in a north, south line, 11 kilometres from Havana North. We just don’t know, at that time, February 2018, what the rainfall on Havana North was from these figures, do we?
A. We don’t know, but one - one thing we can say, it’s not unlikely to be very significantly different from that--
Q. It could be higher--
A. --because of the very nature of rainfall across that landscape.
Q. Exactly. It’s highly variable. It would be surprising--
A. It is variable.
Q. Surprising, very surprising, if it was exactly same.
A. It might be exactly the same.
Q. But it could be--
A. It could--
Q. --higher, lower, much higher, much lower.
A. It could be--
Q. You just don’t know, do you?
A. It could be higher or lower.

In circumstances where the water demand for the crop is calculated and thereafter determined as a demand for irrigation water being the amount of water calculated by subtracting rainfall from the crop water demand and the remaining amount is assumed to be met by irrigation water a relative degree of precision is required. That degree of precision is either direct evidence of the rainfall on Havana North (which was not available) or a basis for inferring that the weather data relied upon by Dr Meyer was sufficiently akin to the rainfall expected on Havana North to justify the calculation undertaken. In this case the evidence discloses that the Myall Vale Weather Station may not be an appropriate proxy for Havana North as:

It is not the closest weather station to Havana North. The closest weather station is Pendennis weather station 11km from Havana North;

The variability on a month-to-month basis between relatively proximate weather stations indicates a variability. Such variability (with the exclusion of the Narrabri Airport Weather Station data) is not explained by landscape features. Therefore, it appears that it is merely a climatic feature of this particular landscape that the rainfall is variable even in locations in relatively close proximity to each other; and

Even if another weather station apart from the Myall Vale Weather Station was adopted for the purposes of Dr Meyer’s calculation his acceptance that the variability could mean that the rain Havana North received could be higher or lower renders the reliability of the calculation of irrigation water unreliable to the extent of the unknown extent of any such variation in rainfall.

In light of the evidence as to variability, which was accepted by Dr Meyer, and the fact that there are weather stations located closer to Havana North than the Myall Vale Weather Station, the use of the weather data by Dr Meyer is unreliable. This is particularly so where no analysis has been undertaken to permit a finding that a particular weather station has comparability to Havana North in the context of the variable rainfall landscape. The variability of rainfall across the landscape renders the use by Dr Meyer of a single weather station (albeit high level within the range of measured rainfall) ascertaining, at best, what rainfall may be experienced at Havana North within the realm of probability. However, as the rainfall is crucial to the determination of water usage there must be a higher degree of satisfaction that the selection of this particular rainfall data is sufficiently representative of the rainfall at Havana North such that this figure can be adopted as a proxy to actual measurements at Havana North.

WFIE

Dr Meyer adopted an assumed WFIE of 70%. He did so based upon what he identified as his experience and in reliance upon the Roth Paper.
WFIE represents the amount of irrigation water applied that is actually available to the cotton crop and not lost by means other than crop uptake, such as by infiltration and evaporation. The percentage applied for WFIE has a significant impact on the total amount of water required to be applied to produce an annual crop.
Whilst Dr Meyer indicated that he relied upon his experience he accepted that the WFIE varied depending upon the particular farming practices at each farm. In that regard he stated at Tcpt, 11 October 2022, p 324(50)-325(11):

Q. And so, you of course have not measured, and you’ve not been asked to, so not being critical of you, the actual on the ground irrigation efficiency at Havana North, have you?
A. Not at all.
Q. Looking at the level of increase that’s documented there in this prime facts sheet showing whole of farm irrigation efficiency of 83 % in 2012/13, plateauing somewhat at 81%, still at 81% in 2017/18, you’d agree there’s no reason to categorically rule out a whole of farm irrigation efficiency figure of 80% or above in this particular case. And you couldn’t do that because you haven’t undertaken the empirical exercise on the ground, I suggest.
A. That’s correct. I can’t do that. I have no firsthand experience there.

Having not inspected the Property nor spoken to the farmer he was unable to ascertain what the particular WFIE for the Property was. Nor did Dr Meyer indicate the particular expertise he had in determining WFIE. Whilst he had experience in crop water utilisation his experience did not disclose that he was particularly experienced in the determination of WFIE or any examples where such calculations were undertaken to permit an acceptance of the expression of opinion based upon experience.

The Macquarie Dictionary definition cited by the Prosecutor at par 31 of the Prosecutor’s closing submissions (PCS) assists in that inherent in the ordinary meaning of “properly” and “proper” is a reference to appropriate to the circumstances or conforming to established standards. The circumstances are that these are meters that had been installed for many years to measure the volume drawn up from each bore, but never with any particular standard of accuracy being required or imposed. The Prosecutor’s case now depends on the Court finding than an occasional 8-23% error rate in addition to that guaranteed by the manufacturer puts the meters outside the definition during a four month period. There is no evidence of any issue having been taken with the accuracy of the meters by the expert Customer Field Officers who read the meters (such as Mr Nott), and no test was demanded or standard of accuracy specified in the decades before the current charge period of January to June 2019.

The error rates vary as between the meters

From 29 January to 29 April 2019 the records in the affidavit of Charles Moss suggest that the amount of water used was 55ML for the House Pump, 32ML for the Diesel Pump, and 68ML for the Electric Pump. From 29 January to 4 June 2019, the records in the affidavit of Charles Moss show that the amount of water used was the same, the meters being removed on the last day of the charge period. At a 19.1% error rate (the average error rate found for the House Pump meter), this amounts to a maximum discrepancy of 10.45ML on the 55ML taken through the House Pump during the charge period. However, as the flow rates during the charge period is unknown, even on Mr Judge’s figures the applicable error rate could have been as low as 7.98% or factoring in the 3% error rate and 0.4% uncertainty, an unexplained discrepancy of only 4.58% for the House Pump. Over the 55ML drawn from the House Pump during the charge period, this amounts to only 2.5ML out of 55ML. This is 0.25% of the yearly water allocation of 988ML. In relation to the meter on the Diesel Pump, Mr Judge’s average error rate is 11.055%, which minus 3% and 0.38% uncertainty gives 7.6%. Over 32ML taken from the Diesel Pump, this gives 2.4ML out of 32ML, which is 0.24% of the yearly water entitlement. For the Electric Pump, the lowest error rate is 9.08%, which minus 3% and 0.34% uncertainty gives 5.74%. Proportionately to the 68ML taken by the Electric Pump in the charge period, this gives 3.9ML which is 0.39% of the yearly water entitlement.
Proportionately minor discrepancies like this have not been proved to be material by the Prosecutor, and the Prosecutor’s case in relation to the Metering Charges is put on the basis that the discrepancies are material: see par 31 of the PCS.
These proportionately error rates do not fall within the ordinary meaning of a deficiency that deprives the meters of “proper operation” as the function or purpose of keeping an adequate record of compliance or not with the water allocation over the charge period is not nullified. They are not material discrepancies and have not been shown to be so by any test, standard or other criteria. The mere assertion of materiality in the Prosecution case exposes this gap. No evidence was called by any expert or officer explaining why these discrepancies are material and no standard was tendered establishing this.
Further, there are doubts as to whether Mr Judge’s methodology calculated the actual error rates or whether they were lower because of unquantified additional amounts of water that are shown on the meter dials in the photographs but not in Mr Judge’s Table 2. He provided an explanation for this, that the additional amounts were somehow outside the actual start and finish of the test. In the absence of evidence as to how much water was not recorded in the tests which passed through these periods this is only an explanation in concept or aspiration as Mr Judge explained, there is no record of those amounts that is satisfactory, and so a reasonable doubt arises as to whether or not, in addition to the 3% error rate of the MHL testing meter and Mr Judge’s 0.3% or thereabout uncertainty figure in Table 2, his stated error rates are in fact higher than the actual error in any of the meters. This reasonable doubt has not been dispelled in the evidence.
The affidavit of Stuart Mann provides evidence at par 51 in relation to the meter on the Diesel Pump that that on physical inspection, even when totally removed, it showed no external sign that it would under record water flow. The same evidence is given in relation to the meter on the Electric Pump (at par 47), and the meter on the House Pump (at par 39).
A reasonable doubt as to whether the error rates identified in the Judge report were those of the meters when in situ is created by the second affidavit of Stuart Mann dated 10 October 2022 which gives evidence that when the meters or flanges are “impacted” the internal magnet can be affected: see par 10. Mr Mann explained that he would be speculating and did not know whether there was any adverse affectation as regards to the removal of these meters. However, it is plain from his affidavits that that was not the task he was instructed to undertake. His opinion evidence as to the sensitivity of the meters to “impact” is unaffected by this. It survives and gives rise to the reasonable possibility of such adverse affectation on the meters has not been excluded to the criminal standard by the Prosecutor. Clearly, Mr Mann could not have gone any further than he did with his expression of opinion as it must forever remain unknown whether or not the potential partial disengagement of the spindle from the magnet has occurred to affect the operation of these meters as they were (a) not opened up to expose the magnet at MHL after removal; and (b) not opened up and examined before their removal and impact on site. Unless both things had occurred, it cannot be known whether the impacts of 4 June 2019 caused a physical disconnection of the magnet from the spindle. Mr Mann’s evidence identifies a reasonable doubt as to that having occurred and that has not been closed off on the Prosecution evidence, as there is no evidence of such before and after examination.
Further, for the ss 91I and 91H of the WM Act charges the absence of proper operation needs to be proved within the specified charge period in January to April or June 2019. That has not been done. There is no evidence as to the error rate that applied at that time and during the extraction that occurred over that period. If the Judge error rate is applied it is not capable of proving the offence, and there is a reasonable doubt as to whether that measured error rate did apply due to the violent process involved in removing the meters.

No evidence of any failure to maintain for s 91H of the WM Act charge

Further, there is no evidence of any failure to maintain during the charge period January to June 2019, which is fatal to the s 91H of the WM Act charges. Rather the ROI provides evidence of an ongoing practice of maintenance when required, and there has been no proof that this did not continue during the charge period.

Honest and reasonable mistake

The evidence of Mr Phelps is relied upon to establish an honest and reasonable mistake of fact as to the operation and proper operation of the meters.
Mr Phelps in the ROI explained that he went on what the meters told him and checked them regularly to see they were working. There was no indication they were not operating properly. This was reinforced by Mr Nott's oral evidence that he never detected a problem with the meters. He has given oral evidence that from time to time he has taken them to be fixed.
The leading authority on the interpretation of statutory offences remains the High Court's decision in He Kaw Teh v R (1985) 157 CLR 523 (He Kaw Teh). The starting point in construing any statutory offence provision is that “[t]here is a presumption that mens rea, an evil intention, or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals, and both must be considered”: Sherras v De Rutzen (1895) 1 QB 918 at 921, cited by Gibbs CJ in He Kaw Teh at 528. There is nothing in the statute that displaces this presumption of mens rea here.
It is not understood this analysis is disputed by the Prosecutor.
The evidence is that Mr Phelps did not know he was doing anything wrong or that the meters were not operating effectively.
The general principles applied to statutory offence provisions were summarised by Brennan J in He Kaw Teh at 582 as follows:

There is a presumption that in every statutory offence, it is implied as an element of the offence that the person who commits the actus reus does the physical act defined in the offence voluntarily and with the intention of doing an act of the defined kind.
There is a further presumption in relation to the external elements of a statutory offence that are circumstances attendant on the doing of the physical act involved. It is implied as an element of the offence that, at the time when the person who commits the actus reus does the physical act involved, he either -
(a) knows the circumstances which make the doing of that act an offence; or
(b) does not believe honestly and on reasonable grounds that the circumstances which are attendant on the doing of that act are such as to make the doing of that act innocent.

The state of mind to be implied under (2) is the state of mind which is more consonant with the fulfilment of the purpose of the statute. Prima facie, knowledge is that state of mind.
The prosecution bears the onus of proving the elements referred to in (1) and (2) beyond reasonable doubt except in the case of insanity and except where statute otherwise provides.
Once it is raised by the evidence, honest and reasonable mistake of fact becomes an element of the offence which the prosecution must negative beyond reasonable doubt as set out in CTM v The Queen (2008) 236 CLR 440 per Gleeson CJ, Gummow, Crennan and Kiefel JJ at [8]. See also Poidevin v Semaan (2013) 85 NSWLR 758 at [14] per Leeming JA, with Ward and Emmett JJA agreeing.

The evidence in the ROI demonstrates that Mr Phelps had no belief at all that he was exceeding his water allocation or that the meters were other than generally reliable and recording the water taken whenever he observed them, and it is evident from the explanation of events given in the ROI that it is fanciful to suggest that he did not have an honest and reasonable belief in the proper operation of the meters because an analysis such as that of Dr Meyer was advanced after the charge period.

Defences – s 91M of the WM Act

The Defendant also relies on the defences in s 91M(1)(a) and (b) of the WM Act. The cause of the error was a matter, on the evidence, of either the inherent characteristics of the Davies Shephard meters, or fair wear and tear.
The Defendant had no control over either matter, being a feature of the meters as produced and/or a natural consequence of use and age, and the s 91M(1)(a) of the WM Act defence is made out on the balance of probabilities.
In the alternative, the Defendant as explained in the ROI took reasonable precautions, exercised due diligence, and checked the meters visually and took them to be repaired when required, as a matter of general practice. The House Pump had a new impeller strengthening the available inference of due diligence in relation to that meter.
There is evidence that a new motor was installed on the House Pump in January 2019, so the Court would be able to infer that there would likely have been checking of that meter in that period. The grease nipples reinforce this evidence of a longstanding practice of maintenance and due diligence, as does their closing off and the closing off of the holes to access them with grub screws.
The defence of due diligence does not require perfection and in the absence of any specification by the Minister as to the type, standard or level of accuracy of these meters as allowed by Condition 8 (as this was not done until after the charge period upon the installation of the new pattern approved meters) the defence is made out in relation to the s 91I of the WM Act charge by the material in the ROI referred to above, and in the absence of any standard of maintenance being specified by the Minister and evidence of maintenance occurring as and when required (a practice that would be inferred to have continued in January to June 2019), it is also made out in relation to the s 91H charge.

Findings on the Metering Charges

The principle charge in these proceedings is a breach of s 91I(2) of the WM Act. If that charge is not proven then the alternative charge against s 91H(2) falls for consideration. As to the essential elements of the s 91H of the WM Act charge there is no dispute that there was at the relevant date metering equipment installed in connection with a water supply work, the dispute is whether the Defendant failed to ensure its proper operation.
The term “proper operation” is to be understood having regard to the principles of statutory construction. In this case, the Defendant contends that such a term excludes fair wear and tear. The Defendant contends that the considerations set out rely upon the considerations of Pain J in Harris at [96]-[103] as supporting such construction. In that case, her Honour held:

96 The starting point for ascertaining the meaning of a statutory provision is the text of the provision considered in light of its context and purpose, as the plurality said in SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 262; [2017] HCA 34 at [14]; see also Gageler J (who was in dissent but not on the principles of statutory construction) at [37]-[39].
97 Provisions are to be given their ordinary and natural (or conventional) meaning that is appropriate having regard to the immediately surrounding words and their grammatical usage: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [78] per McHugh, Gummow, Kirby and Hayne JJ; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; Interpretation Act 1987 (NSW) s 6. Section 33 of the Interpretation Act provides that a construction that promotes the purpose or object of the statute is to be preferred.
98 The purposes of the WM Act are contained in s 3. It must be acknowledged, however, that a statute may, expressly or impliedly, have a number of different, and potentially competing, purposes: Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619; [2013] HCA 36.
99 Another important principle of interpretation, especially when considering a statute regarding a criminal offence, is the principle of legality. As such, it is assumed that, absent clear language, Parliament did not intend to abrogate or curtail citizens’ rights, including by the imposition of criminal sanction and if so, only to the extent clearly delineated: Coco v The Queen (1994) 179 CLR 427; [1994] HCA 15 (Coco).
100 In construing such provisions, the convenience in carrying out an object authorised by the legislation is not a ground for eroding fundamental common law rights: Coco at 436 (quoting with approval Plenty v Dillon (1991) 171 CLR 635; [1991] HCA 5 at 654).
101 In the present case, where Parliament purports to prohibit certain conduct and to make it an offence (with a nearly unlimited maximum penalty, currently up to $5,005,000.00 and $264,000.00 per day thereafter), the onus is upon the State to clearly and unambiguously draft the terms upon which such punishment may be imposed.
102 If, applying the principles of construction set out above, there is ambiguity in the section, that ambiguity is to be resolved in favour of the Defendants, or in other words, if there are at least two reasonably open meanings, the Court must give effect to the more lenient one: Beckwith v R (1976) 135 CLR 569; [1976] HCA 55 per Gibbs J at 576.
103 I adopt as correct the Defendants’ submissions on the proper approach to statutory construction, particularly in light of the need to construe criminal provisions fairly.

The principles set out by her Honour above are not controversial. However, her Honour was not considering s 91I(2) of the WM Act, and therefore made no findings as to its appropriate construction.
In this case, adopting the principles of construction as outlined by her Honour, that I consider apply equally to the task of construction in this case, I cannot accept the construction contended for by the Defendant.
The text of s 91I(2) is:

A person who takes water from a water source to which this Part applies by means of a metered work while its metering equipment is not operating properly or is not operating is guilty of an offence.

The term “operating” is used twice, once where the meter is performing and once where it is not. The terms “operating” and “operating properly” are not defined terms in the WM Act. The meaning is therefore to be taken as the ordinary and natural meaning as determined having regard to the context and objects of the relevant Act.

Whilst not determinative both parties relied upon the dictionary definition of these terms to assist in ascertaining the ordinary and natural meaning. The relevantly applicable definitions of “operate” and “properly” in the Macquarie Dictionary (Online) are:

Operate
verb (operated, operating)
–verb (i) 1. to work or run, as a machine does. 2. to work or use a machine, apparatus, or the like.
Properly
adverb 1. in a proper manner. 2. correctly. 3. appropriately. 4. decorously. 5. accurately. 6. justifiably. 7. Colloquial completely.

The Prosecutor submitted that these terms should be construed in the context of the legislation as meaning: appropriate to the purpose or circumstances; fit, suitable or conforming to established standards. Such a construction was not inconsistent with the context of the Act.
The context of the WM Act does dictate some degree of accuracy of metering equipment. The objects of the WM Act in s 3 as they realte to use of water identify the following:

(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.

The WM Act makes provision for the licensing of water taking and the payment by the water user for such water. The equitable allocation and the efficient use and economic return as provided for in the WM Act would be undermined if the metering devices that are the means by which compliance with a licence are to be measured and payment determined could be left to deteriorate through normal wear and tear such that they no longer serve that function.
That being said, I accept the Defendant’s submissions that does not mean that proper operation is perfection. Rather, as submitted by the Prosecutor it would permit a reduction in operation below perfection such that there is no material under recording of the water taken by each metering device.
In that context, “material” means something which is of consequence and not de minimis, having regard to the context and purpose of the functioning of the metering device.
In this case, for the reasons outlined above in connection with the Water Take Charges, I am not satisfied that the circumstantial evidence permits the relevant inference to be drawn that there was a substantial take of water from the bores such that it would establish that an amount of water was, by necessity, taken from the bores in excess of the water allocation.

The evidence, apart from the circumstantial, that remains for consideration is that of Mr Judge. Mr Judge’s evidence was not satisfactory as it related to the low-flow measurements of the Diesel Pump. From my examination of the video evidence the meter showed movement during this test. The Prosecutor seems to accept that this evidence is not sufficient to establish the flow rates of that pump at low-flow.
That being said, I do not consider that Mr Judge was acting untruthfully or otherwise inappropriately with respect to the other tests undertaken by him. His process was one that was appropriate for the type of testing undertaken by him. The “running start” process whereby the pipe was charged with water and the flow achieved prior to the recording of volumes through the meter and measurement against the metering device recording the volume was appropriate. That process ensured that the meter was receiving the water at the flow rate being measured. The fact that the water that flowed prior to the test was not recorded by Mr Judge was not inappropriate or otherwise representative of an inconsistency, as that part of the test was not recorded and did not affect the final outcome.
The further criticism of Mr Judge’s testing as to the fact that it was undertaken on a system of pipes installed in the laboratory rather than in situ is also to be rejected. The system of pipes was installed having regard to the system that existed in situ and was a replication of that system.
As to the risk of the removal process of the meters undertaken by the Prosecutor somehow damaging the metering device by dislodging the magnet it was apparent that the officers who removed the meters did so with some force. The force was applied by means of hitting the meter surround with tools using some degree of force. The meters were tendered in evidence and were examined in the witness box by Mr Mann. He stated that without taking apart the meter casing it could not be established whether the magnet had dislodged during the removal process. If the magnet had been dislodged, the meter would read inaccurately, rather than cease to function all together. Mr Mann, however, did not suggest in evidence that he had viewed the removal process or laboratory processes as shown on the video tendered in the proceedings. He expressed no opinion as to whether the actions taken by the Prosecution investigators was of the type of force to which he referred. Further, not having examined the state of the magnet in the actual pumps, this evidence is not evidence that the force used on these particular pumps was sufficient to dislodge the magnet or otherwise render the meter reading unreliable. The evidence is mere conjecture and insufficient to permit of any reasonable use in these proceedings.
The specifications for the particular Davies Shephard meters used in this case identified that the guaranteed accuracy at installation was ±3%. Therefore, an error rate of that quantum was an expected variation at installation. Accordingly, in order for the particular metering device to be operating properly at installation an error rate of this degree would be acceptable. At installation such a meter would be considered to be operating properly even if it recorded a water take 3% less than in fact was being taken.
The degree of error identified by Mr Judge must also be considered in light of the accepted error rate of the meter. If at installation the degree of variability could be under recorded by 3% and the meter properly functioning the error rates identified by Mr Judge must be adjusted to reflect this acceptable error rate. Accordingly, I accept the Defendant’s submission that on the evidence the error rates identified by Mr Judge must be reduced by 3%. The question then arises as to whether the error rate that remains is material.
The adjusted percentage error rates therefore vary from between: 23.04%-4.98% for the House Pump; 8%-8.11% for the Diesel Pump; and 8.97%-6.03% for the Electric Pump.
The adjusted error rates demonstrate that the pumps were not operating within the guaranteed error rate and in all respects were under recording water take by more than 3% and in all cases were more than double that accepted amount. This operating level was, on the evidence, likely caused by the wear and tear on the component parts of the pumps over time. The evidence is also apparent that apart from when a pump failed no regular checking of the pump metering system, or the pump more generally was undertaken. That is, they were left to operate unchecked until failure. Whilst the pump was generally considered robust the evidence also indicates that it was accepted that the accuracy of the pump would diminish with time.
Whilst I accept that the pump accuracy diminished by fair wear and tear, I do not accept that such diminution is not to be considered in the assessment of whether the pump was operating properly for the reasons outlined above. A diminution of the accepted error rate to double or triple that sum is more than a de minimus change. The allocation of water relies upon a degree of accuracy in recording – absent that degree of accuracy both efficiency and sustainability of water resources is diminished. In this case, even excluding the anticipated 3% inaccuracy on the total water take allocated a 4.98% error would result in an additional 49.2ML being taken. Such sum is not inconsequential or not material in the context of the legislative scheme.
As to the honest and reasonable mistake defence, the only evidence of Mr Phelps’ dealings with the pumps is that contained in the ROI. To that extent he gives evidence that he satisfied himself from time to time that the meter dials were moving and when the pump stopped working, he had it fixed. The relevant mistake of fact must be that the meters were operating properly – Mr Phelps, on the available evidence, does not appear to have ever turned his mind to this fact. The movement of the dial of a meter or the fact that a pump is pumping is not a determination or assessment of the proper operation of the pump or meter. Accordingly, I find that the Defendant did not hold a relevant mistake as to fact.
As to the s 91M of the WM Act defences such only relate to Tier 1 offences. The Metering Charges are Tier 2 offences, and therefore are not available to the Defendant in these proceedings.
Accordingly, I am satisfied that the Prosecutor has established beyond reasonable doubt that the three meters were not operating properly during the water year as charged contrary to s 91l(2) of the WM Act. Accordingly, there is no need to move to consider the alternative charges.

Directions

I direct the matter is listed before me for mention at 9am on 14 December 2023 with the expectation that the parties will be in a position to take a hearing date and directions for any sentence hearing and the Prosecutor to advise whether it proposes to continue with the request that I not enter orders in the Water Take Charges in proceedings 2020/187127, 2021/181935 and 2021/181936.
The exhibits are returned.

**********

Decision last updated: 28 November 2023

Medium Neutral Citation:	Natural Resources Access Regulator v Lidokew Pty Ltd [2023] NSWLEC 130
Hearing dates:	4, 5, 6, 7, 11, 12, 13, 14, 17, 18 October 2022
Date of orders:	28 November 2023
Decision date:	28 November 2023
Jurisdiction:	Class 5
Before:	Duggan J
Decision:	See paragraphs 306 and 307
Catchwords:	ENVIRONMENTAL OFFENCES – ss 60C(1)(b), 60C(2), 91I(2) and 91H(2) of the Water Management Act – plea of not guilty – circumstantial evidence – whether defendant took water otherwise than in accordance with access licence – crop water requirements of cotton farm – available rainwater – stored water availability – whether defendant took water while metering equipment was not operating properly – the meaning of “not operating properly” – no honest and reasonable mistake of fact
Legislation Cited:	Water Management Act 2000 (NSW) Water Management Amendment Act 2018 (NSW)
Cases Cited:	Bogdanovski v Buckingham (1989) VR 897 Chamberlain v The Queen (No 2) (1983) 153 CLR 521 CTM v The Queen (2008) 236 CLR 440 He Kaw Teh v R (1985) 157 CLR 523 Natural Resources Access Regulator v Harris; Natural Resources Access Regulator v Timmins [2020] NSWLEC 104 Ozbinay v Crowley (1993) 17 MVR 176 R v Baden-Clay (2016) 258 CLR 306 Shepherd v The Queen (1990) 170 CLR 573 Sherras v De Rutzen (1895) 1 QB 918
Texts Cited:	Macquarie Dictionary (Online)
Category:	Principal judgment
Parties:	Natural Resources Access Regulator (Prosecutor) Lidokew Pty Ltd (Defendant)
Representation:	Counsel: H El-Hage and A Brown (Prosecutor) C R Ireland (Defendant) Solicitors: Crown Solicitor’s Office (Prosecutor) Bell & Johnson Solicitors (Defendant)
File Number(s):	2020/88368, 2020/88369, 2020/88370, 2020/187127, 2021/181935, 2021/181936
Publication restriction:	No

Period from 28.06.2018	Extraction Site/Pump	Water usage
To 29.01.2019	17636 (House pump)	20ML
To 29.01.2019	17637 (Diesel pump)	192ML
To 29.01.2019	105552 (Electric pump)	206ML
To 28.04.2019	17636 (House pump)	55ML
To 28.04.2019	17637 (Diesel pump)	32ML
To 28.04.2019	105552 (Electric pump)	68ML
To 30.06.2019	17636 (House pump)	0ML
To 30.06.2019	17637 (Diesel pump)	0ML
To 30.06.2019	105552 (Electric pump)	0ML