Pumpa v Goulburn-Murray Rural Water Corporation

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

No. 9888 of 2008

MICHAEL ROBERT PUMPA & ORS (According to the Schedule)	Plaintiffs
v
GOULBURN-MURRAY RURAL WATER CORPORATION	Defendant

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JUDGE:	CAVANOUGH J
WHERE HELD:	Melbourne
DATES OF HEARING:	31 August, 1 September 2009
DATE OF JUDGMENT:	28 April 2010
CASE MAY BE CITED AS:	Pumpa & Ors v Goulburn-Murray Rural Water Corporation
MEDIUM NEUTRAL CITATION:	[2010] VSC 169	[Revision No. 1]

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WATER – Statutory liability for damage related to flows of water – Claim by primary producers against local water authority – Allegation that water had flowed from salinity mitigation works and irrigation channel causing increase of salinity of land and groundwater and fall in productivity – Plaintiffs appeal against decision of VCAT to summarily dismiss the proceeding – Whether VCAT erred in holding that damage must be caused to some extent by flow of water as distinct from the water itself or the chemical composition of the water – Whether in any event VCAT mischaracterised the plaintiffs’ claims – Whether VCAT should have permitted amendment – Appeal allowed – Water Act 1989, ss 3, 14, 15, 16, 17, 19, 20, 157 – Murray Darling Basin Act 1993, s 17(3) – Victorian Civil and Administrative Tribunal Act 1998, ss 75, 148.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S McLeish, SC with Mr B Miller	Morrison & Sawers
For the Defendant	Mr G Garde QC with Mr R Sadler	Dawes & Vary Pty Ltd

HIS HONOUR:

The parties and the general nature of the case

The three sets of plaintiffs are the owners, respectively, of three neighbouring farming properties in the Winlaton area south of Swan Hill. Together they brought a proceeding in the Victorian Civil and Administrative Tribunal (“VCAT”) naming the Murray Darling Basin Commission[1] and the Goulburn-Murray Rural Water Authority[2] as respondents. They sought restraining orders and statutory damages against both respondents in relation to works connected with a certain salinity mitigation scheme, and similar relief against Goulburn-Murray only in relation to a certain irrigation channel. They alleged that over many years water had flowed from the salinity mitigation works and also from the irrigation channel causing increased salinity in the soil and groundwater of their farms. The respondents persuaded VCAT, constituted by Deputy President Macnamara, to dismiss the entire proceeding summarily under s 75 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”) on the basis that, on the pleadings, it was doomed to fail.[3] The plaintiff then applied for leave to appeal to this Court under s 148 of the VCAT Act against the order for summary dismissal. While the application for leave was pending the Murray-Darling Basin Commission was abolished. It was replaced by the Murray-Darling Basin Authority established under the Water Act 2007 of the Commonwealth. On 5 February 2009 the Court granted the plaintiffs leave to appeal against VCAT’s decision. At the same time it made an order substituting the Murray-Darling Basin Authority for the former Commission as the first defendant. The Court also corrected the name of the second defendant to “Goulburn-Murray Rural Water Corporation”.[4] Certain federal constitutional issues then arose in relation to the position of the Murray-Darling Basin Authority. These issues no longer fall for consideration, because the plaintiffs have obtained leave to discontinue the appeal as against the Murray-Darling Basin Authority. A notice of discontinuance to that extent has been filed accordingly. Hence there is now only one defendant, the Goulburn-Murray Rural Water Corporation.
[1]Constituted under agreements between the Commonwealth, Victoria, New South Wales and South Australia referred to in the Murray-Darling Basin Act 1993 (Vic).
[2]A “Former Water Authority” referred to in Column 2 of the Table in Schedule 1 of the Water Act 1989 (Vic).
[3][2008] VCAT 2268 (27 October 2008).
[4]See s 85(1) and Column 1 of the Table in Schedule 1 of the Water Act 1989 (Vic).

The issues and the Court’s conclusions

The issues which remain for determination in this appeal may be summarised as follows:

(a)In a claim under s 157 or under s 16 of the Water Act 1989 (Vic) for relief in relation to a relevant flow of water, is it a condition of success that the injury, damage or loss in question be caused, at least to some extent, by the flow of water as distinct from the water itself and as distinct from the chemical composition of the water, as VCAT held?
(b)In any event, did VCAT misunderstand the plaintiffs’ claims by holding that they were all based on the chemical composition of the relevant water?
(c)In any event, instead of dismissing the proceeding summarily, should VCAT have allowed the plaintiffs to amend their claims so as to refer to s 15 of the Water Act 1989?

The defendant accepts that the remaining issues represent questions of law duly raised by the plaintiffs under s 148 of the VCAT Act.

The defendant filed an amended notice of contention raising two points, but towards the end of the hearing both parties (by their respective Senior Counsel) acknowledged, in effect, that it would not be appropriate for the Court to rule finally on either of them in this appeal. Some further reference to those points will, however, be necessary.

On the other hand, the parties have invited me to do more than merely determine whether VCAT’s power of summary dismissal was duly exercised. In particular, the parties have invited me to deal with the question of statutory construction represented by issue (a) above on a final basis, rather than merely decide whether the (negative) answer urged by the plaintiffs is arguably correct. It seems to me that issue (a) does raise a discrete question of statutory construction and that it is appropriate to answer it on a final basis in this appeal by reference only to the pleadings below and despite the absence of any findings of fact. Accordingly, I would accept the parties’ invitation. Doing so, I have concluded that the question of construction represented by issue (a) above should be answered in the negative, that is to say that it should be answered in favour of the plaintiffs. On that view, issues (b) and (c) are rendered of little or no significance. For completeness, however, I would deal with each of those issues; and I would determine them in favour of the plaintiffs also. VCAT’s order of summary dismissal must be set aside. The plaintiffs’ claims at VCAT will then be able to go forward in accordance with this Court’s judgment.

The defendant’s works

As mentioned above, at VCAT the plaintiffs complained about two distinct alleged sources of water flows.

The first alleged source was the Barr Creek Drainage Disposal Scheme (BCDDS). The BCDDS is a system designed to mitigate salinity in the Murray River. It was first implemented in 1968. It involves the diversion of saline water which would otherwise have flowed down Barr Creek into the Loddon River and then into the Murray River, and its redirection in order to undergo evaporation in a lake system of which the largest lake is Lake Tutchewop. Before the scheme was implemented, Lake Tutchewop was an ephemeral freshwater lake. Even afterwards the lake bed has frequently been dry. The implementation of the scheme caused a substantial increase in the salinity of Lake Tutchewop. The plaintiffs’ farms are located to the north of Lake Tutchewop.

The plaintiffs alleged that the implementation of the scheme brought about an escape of saline water from Lake Tutchewop into the groundwater under their respective farms, leading to an increase in the salinity of that groundwater and of the soil, especially since the early 1990s.

The second alleged source was an irrigation channel called the 6/7 Channel. This runs alongside or through the plaintiffs’ farms. The water flowing in the 6/7 Channel is fresh water. The plaintiffs alleged that the design of the 6/7 Channel was faulty in that it was an open, unlined channel that “would leak and allow water to flow onto the adjoining land”, such that the water formed a “linear groundwater recharge mound” along the length of the channel, thus raising the level of the groundwater on the plaintiffs’ land in the vicinity of the channel and resulting in the salinisation of that land and a fall in its productivity.[5]
[5]CB 128, 152.

The statutory bases of the plaintiffs’ claims

The statement of claim at VCAT did not expressly refer to the particular statutory provisions upon which the plaintiffs relied, although the covering Form 9 referred to the Water Act 1989 generally. No reference to any particular statutory provisions was contained in the plaintiffs’ further and better particulars of the statement of claim. However, in their statement of legal contentions filed at VCAT in response to the respondents’ application for summary dismissal, the plaintiffs relied on both s 157 and s 16 of the Water Act 1989 in respect of the BCDDS claim and relied on s 157 alone in relation to the 6/7 Channel claim.

Section 157 of the Water Act 1989 is headed “Liability of Authorities arising out of flow of water”. It was amended in 1998 in ways not presently significant. It now provides:

“(1) If—
(a)as a result of intentional or negligent conduct on the part of an Authority in the exercise of a function under Part 8, Division 2, 3 or 5 of Part 10, or Part 11 or any corresponding previous enactment, a flow of water occurs from its works onto any land; and
(b)the water causes—
(i)injury to any other person; or
(ii)damage to the property (whether real or personal) of any other person; or
(iii)any other person to suffer economic loss—

the Authority is liable to pay damages to that other person in respect of that injury, damage or loss.

(2)If it is proved in a proceeding brought under subsection (1) that water has flowed from the works of an Authority onto any land, it must be presumed that the flow occurred as a result of intentional or negligent conduct on the part of the Authority unless the Authority proves on the balance of probabilities that it did not so occur.
(3)For the purposes of a proceeding brought under subsection (1)—
(a)a flow of water is to be taken to have occurred as a result of intentional conduct on the part of an Authority if the flow—
(i)was designed or intended by the Authority; or
(ii)inevitably and without intervening cause resulted from the exercise of a power by the Authority; and

(b)in determining whether or not a flow of water occurred as a result of negligent conduct on the part of an Authority, account must be taken of all the circumstances including any omission or failure, in the planning, design, construction, maintenance or operation of the works, to provide reasonable standards of capacity or efficiency or exercise reasonable care or skill having regard to the following matters—
(i)the state of scientific knowledge and knowledge of local conditions at any relevant time;
(ii)the nature and situation of the works;
(iii)the service to be provided by the works;
(iv)the circumstances and cost of—
(A)the works; and
(B)the maintenance and operation of the works; and

(C) works which it would have been necessary to construct to avoid the occurrence of any relevant injury, damage or loss.

(4)The following provisions apply with respect to a proceeding brought under subsection (1)—
…
(b)the proportion (if any) of the responsibility of the Authority for the injury, damage or loss must be assessed and only that proportion of the assessed damages must be awarded against the Authority;
(c)in assessing damages in respect of damage to property or economic loss the measure of damages is the direct pecuniary injury to the person bringing the proceeding by the loss of something of substantial benefit accrued or accruing and does not include remote, indirect or speculative damage;
(d)if damages are assessed in the proceeding in respect of any continuing cause of action, they may, in addition to being assessed down to the time of assessment, be assessed in respect of all future injury, damage or loss and, if so, the Authority is not liable to pay any further damages in respect of that injury, damage or loss;
…
(h)a person, not being a party, in whose favour a determination is made may enforce the determination by the same means as if the person were a party.”

It is common ground that the defendant is an “Authority” within the meaning of that expression in s 157 and that both the BCDDS and the 6/7 Channel involve “works” within the meaning of s 157. There is some doubt whether any relevant aspect of the alleged role of the defendant (or of any predecessor of the defendant) in relation to the creation or operation of the BCDDS represented conduct on the part of the defendant “in the exercise of a function under Part 8, Division 2, 3 or 5 of Part 10, or Part 11 [of the Water Act 1989] or any corresponding previous enactment” within the meaning of s 157(1). This was canvassed to a certain extent in argument before VCAT and is touched on in VCAT’s reasons, without being decided. Before me, the plaintiffs’ initial principal submission in this regard was that neither the creation nor the operation of the BCDDS, as alleged, was done in the exercise of any of the functions referred to in s 157(1). Rather, they submitted, the BCDDS constituted “works constructed under a former Agreement” within the meaning of the definition of “works” in s 3 of the Murray-Darling Basin Act 1993 (Vic) and that therefore s 157 applied to the defendant’s conduct not of its own force but by virtue of s 17(3) of the Murray-Darling Basin Act 1993, which provides:

“Section 157 of the Water Act 1989 applies, with any necessary alterations, to claims for compensation under this Act.”

The defendant’s submission before me was that s 157 applied of its own force because the BCDDS had been constructed (by a predecessor of the defendant) and had been operated (by the defendant and its predecessors) in the exercise of a function under Part 11 (Irrigation) of the Water Act 1989. This was one of the points made in the defendant’s amended notice of contention.

In the end the parties agreed that this was not an issue that I should endeavour to resolve. The necessary evidence was not before VCAT on the summary dismissal application and VCAT did not make the necessary findings of fact on the issue. Nor do I have the necessary evidence before me. However, I should explain the potential future significance of the issue. For that purpose, and for other purposes of more immediate significance, it is desirable to set out the following relevant extracts from Division 2 of Part 2 of the Water Act 1989 (omitting endnotes):

“ Division 2—Liabilities
14 Application
Sections 15 and 16 apply whether the taking, using, polluting, constructing, maintaining, operating or interfering occurred before or after the commencement of this section.

15 Civil liability for unauthorised taking or use of water or for unauthorised works
(1)A person who—
(a)takes water in an unauthorised manner or in unauthorised quantities; or
(b)uses water in an unauthorised manner or for an unauthorised purpose; or
(c)pollutes water, whether or not authorised to do so; or
(d)constructs, maintains or operates any unauthorised works—

and by that act causes injury to any other person or damage to the property (whether real or personal) of any other person or causes any other person to suffer economic loss is liable to pay damages to that other person in respect of that injury or damage.
(2)Paragraph (c) of subsection (1) does not apply to the discharge of saline matter in accordance with by-laws made under section 160(1)(d) of this Act or regulations made under section 50(d) of the Water Industry Act 1994 and all other necessary authorisations.
(3)Paragraph (d) of subsection (1) does not apply to any injury, damage or loss to which section 16 applies.

16 Liability arising out of flow of water etc.
(1)If—
(a)there is a flow of water from the land of a person onto any other land; and
(b)that flow is not reasonable; and
(c)the water causes—
(i)injury to any other person; or (ii) damage to the property (whether real or personal) of any other person; or
(iii)any other person to suffer economic loss—

the person who caused the flow is liable to pay damages to that other person in respect of that injury, damage or loss.
(2)…
(3)…
(4)…
(5)If the causing of, or the interference with, the flow (as the case requires) was given rise to by works constructed or any other act done or omitted to be done on any land at a time before the current occupier became the occupier of the land, the current occupier is liable to pay damages in respect of the injury, damage or loss if the current occupier has failed to take any steps reasonably available to prevent the causing of, or the interference with, the flow (as the case requires) being so given rise to.
(6)The existence of a liability under subsection (5) extinguishes the liability under subsection (1) of the person who caused the flow or the liability under subsection (2) of the person who interfered with the flow (as the case requires).

17Protection from liability
(1)A person does not incur any civil liability in respect of any injury, damage or loss caused by water to which section 16 or 157 of this Act or section 74 of the Water Industry Act 1994 applies except to the extent provided by this Act.
(2)Sections 15 and 16 do not create any liability in respect of a flow of water from the works (including any dam) of an Authority in the exercise of a function under Part 8, Division 2, 3 or 5 of Part 10 or Part 11 or any corresponding previous enactment or of a licensee in the exercise of a function under its licence.
(3)…

18…

19 Jurisdiction of Tribunal
(1)The Tribunal has jurisdiction in relation to all causes of action (other than any claim for damages for personal injury) arising under sections 15(1), 16, 17(1) and 157(1) of this Act or at common law in respect of the escape of water from a private dam.
* * * * *

(3)In exercising jurisdiction conferred by subsection (1), the Tribunal—
(a)may by order, whether interim or final, grant an injunction (including one to prevent an act that has not yet taken place) if it is just and convenient to do so; or
(ab)may make an order for payment of a sum of money awarding damages in the nature of interest; or

(3A)…
(4)…
(5)The Tribunal may in respect of any works that give rise to a cause of action of a kind referred to in subsection (1) make any order with respect to—
(a)compensation for damage to land; or
(b)the continuation, removal or modification of works; or
(c)payment of the costs of the removal or modification of works—
that it considers appropriate.
* * * * *

(8)Nothing in this section prevents a person from bringing before a court a claim for damages for personal injury based on a cause of action of a kind referred to in subsection (1).
(9)In determining a cause of action arising under section 15(1), 16, 17(1) or 157(1) of this Act the Tribunal must apply to the questions of causation and remoteness of damage the same tests as a court would apply to those questions in an action based on negligence.

(10)Subject to subsection (8), a proceeding based on a cause of action of a kind referred to in subsection (1) must not be brought otherwise than before the Tribunal.

20Matters to be taken into account in determining whether flow is reasonable or not reasonable
(1)In determining whether a flow of water is reasonable or not reasonable, account must be taken of all the circumstances including the following matters—
(a)whether or not the flow, or the act or works that caused the flow, was or were authorised;
(b)the extent to which any conditions or requirements imposed under this Act in relation to an authorisation were complied with;
(c)whether or not the flow conforms with any guidelines or principles published by the Minister with respect to the drainage of the area;
(d)whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area;
(e)the uses to which the lands concerned and any other lands in the vicinity are put;
(f)the contours of the lands concerned;
(g)whether the water which flowed was—
(i)brought onto the land from which it flowed; or
(ii)collected, stored or concentrated on that land; or
(iii)extracted from the ground on that land—

and if so, for what purpose and with what degree of care this was done;
(h)whether or not the flow was affected by any works restricting the flow of water along a waterway;
(i)whether or not the flow is likely to damage any waterway, wetland or aquifer.

(2)In taking account of the matters specified in subsection (1), greater weight must be attached to the matters specified in paragraphs (a), (b), (c) and (d) than to the other specified matters.
(3)… .”

It will be seen that s 17(2) of the Water Act 1989 expressly denies the availability of s 16 in relation to a flow of water from the works of an Authority “in the exercise of a function under Part 8, Division 2, 3 or 5 of Part 10 or Part 11 or any corresponding previous enactment”. That language is identical to the corresponding language of s 157(1). However, neither s 17(2) nor any other relevant provision expressly denies the availability of s 16 where s 157 is only made applicable by virtue of other legislation, such as s 17(3) of the Murray-Darling Basin Act 1993. It was on that basis that the plaintiffs asserted, in their written submissions before VCAT, that they were entitled to make claims under both s 157 and s 16. There are substantial differences between the respective conditions of liability under those sections. For example, under s 157, although the Tribunal needs to be satisfied that the flow of water has occurred as a result of “intentional or negligent conduct” on the part of an Authority, claimants have the benefit of a reverse burden of proof in that regard. Moreover, claimants under s 157 do not need to be concerned about whether or not the flow of water was “reasonable”, whereas a condition of liability under s 16 is that “the flow is not reasonable”: s 16(1)(b). Perhaps influenced by considerations of that kind, counsel for the plaintiffs indicated in their oral submissions before VCAT and again before me that the plaintiffs relied principally on s 157 rather than s 16. In any event, it has not been suggested that, by reason of context or otherwise, the particular provisions of s 16 that were ultimately in question in this appeal might require an interpretation different from that of the corresponding provisions of s 157. Hence, although the claim under s 16 in respect of the BCDDS has not been abandoned and will remain alive before VCAT on remittal, I will hereafter refer principally to s 157 rather than s 16 in explaining why I have reached my abovementioned conclusions.

Flows of water “onto” land

Under s 157 liability may attach where, among other things, a flow of water occurs from the works of an Authority “onto any land”: see ss 157(1), (2). Similarly, under s 16 liability may attach where, among other things, there is a flow of water from the land of a person “onto any other land”: see s 16(1)(a). In two earlier decisions,[6] Deputy President Macnamara had held that the word “onto” carried the requirement that the flow relied upon by the claimant must be, at least to some degree, a surface flow; in other words, that it cannot be a wholly subterranean flow; and that the damage in question must be caused by the same flow of water that flowed “onto any land”.[7] In the present case, over the opposition of the claimants, the respondents invited Deputy President Macnamara to adopt the same interpretation and then to find that the claimants’ allegations did not amount to allegations of this kind.
[6]Murray-Goulburn Co-Operative Limited v Leongatha Water Board (1996) 11 VAR 205, 210 and Transpacific Cleanaway Limited v South East Water Limited [2008] VCAT 1798, at [36]-[40]. In the latter, Deputy President Macnamara declined to follow a decision to the contrary of Senior Member Cremean in Lakobend Pty Ltd v City of Boroondara [2004] VCAT 1709.
[7]These previous holdings were recounted by Deputy President Macnamara in the decision presently under appeal: see [2008] VCAT 2268 at [56]-[59].

Deputy President Macnamara did adhere to his previous interpretation of the legislation. However, he noted that the claimants’ case included an allegation that the operation of the BCDDS entailed “at some times and perhaps at most times, a flow of water onto the bed of Lake Tutchewop” which, as mentioned above, was frequently dry.[8] He observed that if the movement of saline groundwater from Lake Tutchewop into the plaintiffs’ farmlands could be regarded as the same flow as the flow of saline water into Lake Tutchewop then the respondents’ objection to the validity of the claim on this score would be answered.[9] He held that there was a lack of clarity in the allegations and the facts in this regard, and that therefore the BCDDS claim could not be summarily dismissed on this particular basis.[10] It seems that he came to a similar conclusion in relation to the claim relating to the 6/7 Channel.[11]
[8][2008] VCAT 1709 at [59].
[9]Ibid.
[10]At [60].
[11]See at [66].

The second of the two points raised in the defendant’s amended notice of contention was to the effect that VCAT should have adopted as a further reason for dismissing the claims that they did not involve allegations of flows of water “onto” land. As a result, large sections of the parties’ written and oral submissions were addressed to the correctness or otherwise of Deputy President Macnamara’s view that damage caused by water in a wholly subterranean flow is not compensable under s 16 or s 157. However, in the end, the parties were in substantial agreement that, because of uncertainty as to whether the claimants’ pleadings and assertions below did or did not involve allegations of relevant surface flows, it would be inappropriate for the Court to rule on this issue. I accept the parties’ position in that regard.

In passing, however, I note that one of the stated purposes of the Water Act 1989 is “to eliminate inconsistencies in the treatment of surface and groundwater resources and waterways”: s 1(l). Further, a “flow” of water is defined to include “percolation” and “seepage” and to include “both surface and underground flow”: s 3(1). Although the flow must be “onto” land, the word “onto” can sometimes be used to refer to movement that is not movement to the (top) surface of a thing. To take an example, one can say that a person stepped “onto” a train or bus without conveying the meaning that the person stepped onto the roof of the train or bus. Similarly, land can be thought of as having layers or levels, with multiple surfaces below the surface of the top layer or level. A basement carpark with several levels comes readily to mind, but the same idea may extend to land free of any buildings. Further, I note that Deputy President Macnamara has taken the view that claimants must demonstrate a surface flow “at least to some degree”[12]. With respect, this seems an odd touchstone. Neither Deputy President Macnamara nor the defendant seems to suggest that the damage must be wholly or even partly attributable to that part of the flow that occurs on the surface of the land. It is difficult to understand why Parliament would have intended that a minor surface manifestation (at least) should be a necessary condition of liability for damage arising from an otherwise subterranean flow of water. It may be doubted whether liability was truly intended to turn on such a matter.[13]
[12]See [2008] VCAT 2268 at [56] and [58].
[13]For comparable observations, see Montana Hotels Pty Ltd v Fasson [1987] VR 147, 150; Ardnew Pty Ltd v Jardine Mathieson Victoria Ltd (1996) 16 AATR 77; Lakobend Pty Ltd v City of Boroondara [2004] VCAT 1708. In England there can be liability at common law in respect of a wholly subterranean flow: see Ballard v Tomlinson (1884) 26 Ch D 194, discussed and distinguished in Cambridge Water Co v Eastern Counties Leather Plc [1994] 2 AC 264.

The critical part of VCAT’s reasoning

The reasoning of the Tribunal at the heart of this appeal is contained in paragraphs [62]-[66], as follows:

“62In Murray-Goulburn Co-operative Co Limited v Leongatha Water Board (1996) 11 VAR 205 a claim was brought against the Board as an authority under Section 157 of the Water Act. The contention was that the water supplied to the Co-operative’s factory was infected with blue-green algae as a result of which the Co-operative suffered loss and damage relative to its manufacturing processes with a total claim of $3,742,861. The contaminated water entered the Co-operative’s factory through the Board’s reticulation system. In those circumstances I held that there had been no flow of water ‘onto’ any land and the claim failed for that reason. I have already expressed my views in the present proceeding and for the present state of evidence as to whether in the circumstances it could be clearly demonstrated that there was no flow of water ‘onto’ any land causing the damage alleged in this proceeding. I postulated a further reason why the Co-operative’s claim against the Leongatha Water Board should be summarily dismissed, namely that Section 157 of the Water Act was concerned with damage caused by flows of water not by the chemical composition of water. I said:
The damage alleged by the Co-operative was caused by the chemical composition of the water, not by its flow. Despite the fact that S.157(1)(b) speaks merely of loss caused by the ‘water’ read as a whole it is clear that the sub-section is speaking of damage caused by the flow of water not merely by the water itself. Of course the chemical composition of water may be relevant to the damage done by a flow of water. A flow of toxic water would not [sic] doubt be more damaging than a flow of fresh water. As long as the flow was to some extent causative of damage. The claim allegedly arising under Section 157 was ill-founded first because it was not [a flow of water] onto the claimant’s land and secondly because the damage alleged did not result from the flow but rather from the composition of the water. (1996) 11 VAR 205, 211.

63It seems to me now as it seemed to me then clear that the Water Act causes of action whether they arise under Sections 16 or 157 are concerned with the effect of flows of water not with the effect of the chemical composition of water. Dr Sadler correctly observes that this point is made the clearer by the existence of a separate cause of action under Section 15 of the Water Act for polluting water. According to Dr Sadler Section 15(2) specifically excludes liability upon an authority for saline water if it is discharged in accordance with by-laws made under Section 161(d)[14] of the Water Act. In the present case we have no idea what those by-laws are nor whether the saline discharges were made in accordance with them. For present purposes however it is sufficient to note that no claim is made under Section 15 of the WaterAct. In my view the claim against the Commission based on Section 16 is doomed to fail for that reason.
64It follows that both foreshadowed claims against the Commission are doomed to fail for the reasons given. It is demonstrated with the necessary clarity that those claims must fail hence the commission is entitled to a summary dismissal of the claims against it pursuant to Section 75 of the Victorian Civil andAdministrative Tribunal Act 1998.
65I turn to the claims made against Goulburn-Murray. The same reasoning with respect to the relevance of the chemical composition of the water rather than its flow would appear to defeat a claim against Goulburn-Murray whether that claim be mounted under Section 16 or Section 157 of the Water Act. For present purposes it is unnecessary for me to express any view as to whether in the circumstances what Goulburn-Murray has done or is doing constitutes the exercise of a function under Part 8, Division 2, 3 or 4 of Part 10 or Part 11 of the Water Act (see Section 17(2)). The reasoning as to relevance of the chemical composition of the water as distinct from the consequences of its flow apply equally in my view to Sections 16 and 157 of the Water Act. It follows therefore that the second respondent is likewise entitled to an order under Section 75 of the Victorian Civil and Administrative Tribunal Act1998 dismissing the claims against it.
66The same reasoning necessitates the dismissal of the applicants’ claim against Goulburn-Murray relative to the 6/7 channel.”
[14]Sic. Scil s 160(1)(d).

In essence, although the Tribunal was prepared to assume in favour of the claimants that water had travelled in the same flow from the BCDDS to the plaintiffs’ farms, and likewise that water had travelled in the same flow from the 6/7 Channel to the plaintiffs’ farms, nonetheless the Tribunal took the view that, on the claimants’ own allegations, the damage did not result from the flow in either case but from the chemical composition of the water.
Resolving the issues: issue (a)

In my view, the Tribunal’s holding that a flow of water (as distinct from the water itself or its composition) must be to some extent causative of damage is incorrect, for several reasons. The holding is unclear in itself. It conflicts with the text of the directly relevant provisions. It is not supported by the broader statutory context, by the legislative history, by authority or by policy considerations.

Seeking elucidation of the Tribunal’s holding, I asked Senior Counsel for the defendant, Mr Garde QC, whether his client contended that the damage must be caused (to some extent) by the force or movement of the water. He said that his client did not so contend. He conceded that it was not necessary to show that the damage was caused (to any extent) by the physical impact of moving water or by the movement of water as such.[15] In my view, that concession was clearly correct. In s 3 of the Act, the following definition appears:

“Flow, in relation to water, includes discharge, release, escape, percolation, seepage and passage, and includes both surface and underground flow; … .”

This definition is doubly inconsistent with a requirement that the damage be caused by the force or movement of the water. First, insofar as it defines flow to include discharge, release and escape, it focuses on the water as it leaves the defendant’s land or works, rather than as it behaves thereafter. Second, it would be a rare case in which the “percolation” or the “seepage” of water, regarded merely as a movement of water, could have any significant damaging impact.

[15]Transcript pp 95-96, 114, 146-147.

What else, then, might it mean to say that the damage must be caused (to some extent) by the flow as distinct from the water itself or its chemical composition? Mr Garde offered the following: “[I]t is the water that constitutes the flow that must occasion the injury, damage or loss rather than water generically or other water.”[16] Obviously, we are not concerned with water that has not flowed from the defendant’s works or land. However, if one puts aside any suggestion that the damage must be caused by the force or movement of water, it is difficult to attribute any substance to the distinction between a flow of water and the water in or from the flow as a potential cause of damage.
[16]Transcript 99.

The text of the statute compounds the difficulties inherent in the Tribunal’s holding. I have already explained how the statutory definition of “flow” tends to confirm that there is no requirement that the damage be caused by moving water. Further, the centrally relevant provisions themselves, ss 157(1) and s 16(1), refer to “the water” rather than “a flow of water” as causing the damage. Omitting punctuation, s 157(1) reads (so far as immediately relevant):

“If … a flow of water occurs from [an Authority’s] works onto any land .. and the water causes injury … damage … or … loss … the Authority is liable to pay damages. … .”

The corresponding words of s 16(1) are:
“If … there is a flow of water from the land of a person onto any other land … and the water causes … injury … damage … or loss … the person who caused the flow is liable to pay damages. … .”

The Tribunal had observed (at [59]) that s 157(1)(b) “might on one view more happily have been framed as a stipulation that the ‘flow of water’ causes damage”. However it would have been a simple matter for Parliament to have used the expression “the flow of water” instead of the expression “the water” had it intended to confine liability to cases where the damage was caused by the flow rather than by the water. Parliament did not do that, either in s 157(1) or in s 16(1). In each case, it did the opposite. In each case, when it came to causation, it departed from the expression “flow” used elsewhere in the same subsection and it chose to use the different expression “the water” instead. In the interpretation of instruments intended to have legal effect, especially statutes, it is usually understood that a change of expression implies a change of meaning, absent sufficient indication to the contrary.[17] In my view there is no sufficient indication to the contrary in or in relation to the provisions presently in question. Quite the reverse.

[17]Scott v Commercial Hotel Merbein Pty Ltd [1930] VLR 25 at 30; Prestcold (Central) Ltd v Minister of Labour [1969] 1 All ER 69 at 75; [1969] 1 WLR 89 at 97; Eureka Funds Management Pty Ltd v Freehills Services Pty Ltd (2008) 19 VR 676, esp at [4], [52].

In that regard I have considered the broader statutory context of the directly relevant provisions; the history of water legislation in Victoria generally, as expounded in detail in the defendant’s written and oral submissions; the authorities to which I have been referred; and questions of statutory policy. It would lengthen this judgment unduly to go through all of those matters individually. I content myself with the following observations.

It is true that the concept of “flow” is central to relevant aspects of the scheme of the Act. The word is carefully defined in s 3. Without a flow (as defined) there can be no liability under s 157 or s 16 at all. Under s 157 the necessary inquiry into intentional or negligent conduct on the part of the defendant is wholly directed to characterising the cause of the flow. In relation to s 16, there must be a determination in accordance with s 20 as to the reasonableness or otherwise of the flow. Nevertheless it seems entirely natural and understandable that Parliament should intentionally have stipulated in ss 157 and 16 that the water (from the flow) must cause the damage. Tellingly, in s 17 the dichotomy between the flow and the water is repeated. Subsection 17(1) refers to injury, damage or loss “caused by water to which section 16 or 157 of this Act … applies”. By contrast, s 17(2) refers to “liability in respect of a flow of water”. The scheme of the provisions is thus confirmed. There may be liability “in respect of” a flow of water where damage is “caused by” the water. The expression “in respect of” is very broad. The expression “caused by” is more narrow and specific. This language focuses attention on the water, rather than the flow, in relation to causation of damage. Correspondingly, in ordinary parlance, one speaks of “water damage”, not “flow damage”, when referring to the effects of flooding or other intrusions of water. Further, where water from a relevant flow or flows lingers on land it may cause damage (sometimes, a great deal of damage) that would not have been suffered at all if the water had merely passed across the land. There is nothing in the relevant provisions to suggest that Parliament intended to exclude liability in such a case.

A question may remain as to what exactly is comprehended by the expression “the water” in s 157(1)(b) and s 16(1)(c). In s 3 of the Act, “water” is defined as follows:

“water means water, whether or not it contains impurities.”

Obviously, water will very frequently contain impurities. Indeed, totally pure water will rarely be encountered, except perhaps in laboratories. The defendant did not suggest before me, nor could it sensibly have suggested, that damage is only compensable under s 157 or s 16 to the extent that it is caused by a flow of totally pure water. Indeed, in South-East Water Ltd v Transpacific Cleanaway Pty Ltd[18], argument in which I had heard shortly before hearing argument in the present case, I had understood that it was common ground before me, and that it had been common ground in the relevant proceeding at VCAT (constituted, as in the present case, by Deputy President Macnamara) that raw sewage was “water” within the meaning of s 3 of the Water Act 1989; and that, accordingly, damage done by the discharge of raw sewage from a sewerage utility’s pipes into the claimant’s factory premises was potentially compensable under s 74 of the Water Industry Act 1994, a provision corresponding to s 157 of the Water Act 1989.[19]I put this to Mr Garde (who had not appeared in Transpacific). At least initially, Mr Garde seemed unprepared to accept a corresponding view of the definition of “water”. He submitted that the true effect of the definition was that “water doesn’t cease to be water because there’s sewage or anything else in it that might constitute an impurity”[20]; and that, under the definition, “ … water simply means water. It’s not suggesting that the impurities are water, it’s saying that the water remains water regardless of the existence of impurities in the water”.[21] Ultimately, however, this became a sterile debate. It ended with the following exchange[22] in which Mr Garde made a concession which, subject to the issue about whether a flow of water (as distinct from water which has relevantly flowed) needs to cause damage, I consider to be clearly correct and which makes it unnecessary to arrive at a concluded view as to the precise effect of the definition of “water”:
[18][2010] VSC 46. See esp at [7]. Dr Sadler, who now appears at junior counsel to Mr Garde QC for Goulburn-Murray, appeared alone for South-East Water Ltd in that matter at both levels.
[19]The definition of “water” in s 3 of the Water Act 1989 was made applicable to s 74 of the Water Industry Act 1994 by ss 3(2) and (3) of the latter Act.
[20]Transcript, 113.
[21]Transcript, 116.
[22]Transcript, 121.
“MR GARDE:          If there’s a flow of water onto land occasioning damage to the land by reason, amongst other things, of the toxicity of the material that’s carried, then the requirements of the provision[23] would be met.
[23]Mr Garde was referring to s 157 or s 16, as the case may be.
HIS HONOUR       That seems to be right and so does that not imply that there’s no need to distinguish between the water itself and the water including the impurities?
MR GARDEThis is about Your Honour, water as a liquid flowing as distinct from the impact of solid materials on one another.
HIS HONOUR       That’s right.
MR GARDEAnd it has to be demonstrated that the problem of toxicity occurs in the context of the flow of water. If it does, that’s the end of the matter.”

This exchange recalls what Deputy President Macnamara had said in the Leongatha Water Board case[24]:
“Of course the chemical composition of water may be relevant to the damage done by a flow of water. A flow of toxic water would [no] doubt be more damaging than a flow of fresh water. As long as the flow was to some extent causative of damage.”

Whatever the precise meaning of the definition of “water” in s 3 of the Act may be, I consider that in ss 157 and 16 “the water” must at least cover saline water. It is the last sentence of the passage from Leongatha set out above that I find particularly difficult to reconcile with the provisions of the Act.

[24]Cited at [62] of his decision in the present case.

As appears from paragraph [63] of his decision, the learned Deputy President thought that support was to be gained from s 15 of the Act for the proposition that ss 16 and 157 were “concerned with the effect of flows of water not with the effect of the chemical composition of water”. Section 15 is set out in full above. The particular words relied on by the Tribunal and the defendant are as follows:

“(1) A person who –
…
(c)pollutes water, whether or not authorised to do so; …

and by that act causes injury to any other person or damage to the property (whether real or personal) of any other person or causes any other person to suffer economic loss is liable to pay damages to that other person in respect of that injury or damage.”
(2)Paragraph (c) of subsection (1) does not apply to the discharge of saline matter in accordance with by-laws made under section 160(1)(d) of this Act or regulations made under section 50(d) of the Water Industry Act 1994 and all other necessary authorisations.
… .”

In its written submissions, the defendant said, correctly, that the definition of “pollute” in s 3 captures altering the chemical properties of water so as to make it less fit for any beneficial purpose for which it is or may reasonably be expected to be used. The defendant asserted that the use of groundwater for agriculture is such a purpose. It pointed out that a s 15(1) claim is within VCAT’s exclusive jurisdiction by virtue of s 19(1) and s 19(10). It submitted that s 15(1) is “the” vehicle for a claim where a person pollutes water.[25] It said that the clear inference from s 15(2) is that a discharge of saline matter can be a pollutant within s 15(1). It contended that the existence of a separate cause of action for polluting water under s 15(1)(c) supports the conclusion that the harm under ss 157 and 16 must be caused by the flow, and not by the chemical properties of the water. It said that if the chemical properties of the water cause the harm, Parliament has allowed for such a claim, separate from ss 157 and 16, in s 15(1)(c). On the other hand, it acknowledged that, by virtue of s 17(2), a claim cannot be brought under s 15 in respect of a flow of water from the works of Authority in the exercise of any of the functions referred to in s 17(2), being the same functions that are referred to in s 157. However it submitted that Parliament had deliberately chosen to shield Authorities from any claim under s 15, s 16 or s 157 where the gist or gravamen of the claim would be for polluting water in the exercise of any of the specified functions. Common law claims against Authorities would be available in such circumstances, the defendant submitted. Mr Garde reiterated these submissions in his oral presentation, but did not develop them further.
[25]It gave as an example Premier Building and Consulting Pty Ltd v Spotless Group Limited and Others [2007] VSC 377, including the related interlocutory decision at VCAT: [2004] VCAT 1364.

I can see no warrant for reading down the scope of s 157 or s 16 by reference to s 15. As the Deputy President himself said, s 15 creates a separate cause of action for polluting water. True, it may overlap with s 157 or s 16 in some situations. But essentially it is directed to different subject matter. Among other things, it is directed to damage to water rather than damage by water. Subject to one matter, to allow a claim to be made under either (or both) of s 15, on the one hand, or s 157 or s 16 on the other, in respect of damage suffered by a person due to the polluting of water by toxic water that has flowed from the works of an Authority or from the land of another person (as the case may be), does not seem to me to be inconsistent with or repugnant to the terms or policy of any of those provisions. The qualification is that s 15(2) would, if appropriate by-laws were in place,[26] provide a defence to a saline discharge claim under s 15(1)(c), being a defence that could be avoided by making the claim under s 157 or s 16. However, that matter does not justify reading down s 157 or s 16. Parliament expressly limited the potential s 15(2) defence to claims under s 15(1)(c). Had it so desired, Parliament could easily have created a similar defence to claims under s 16 or s 157 based on saline discharges. But it did not. A moment’s reflection throws up likely explanations. A claimant under s 157 or s 16 faces hurdles not faced by a claimant under s 15. Under s 157 the claimant must establish a flow of water from the works of an Authority onto land. It must then be found that the flow was the result of intentional or negligent conduct on the part of the Authority;[27] and that such conduct occurred in the exercise of one or more of the functions of the Authority specified in s 157(1). A special form of proportionate liability applies[28]; and there are other special limits on the assessment of damages.[29] Correspondingly, under s 16, the claimant must establish a flow of water from the land of a person onto other land and must establish that the flow was not reasonable, taking into account the lengthy list of considerations set out in s 20. By contrast, subject to s 15(2), a person who pollutes water, whether or not authorised to do so, and thereby causes another person to suffer injury, damage or loss, is ipso facto liable to pay damages to that other person. Understandably, Parliament has chosen to make provision for protection against that particular “strict” liability in specified circumstances. There is no reason to believe that Parliament intended that protection to extend to cases where, for example, the flow was not reasonable or the conduct of the Authority was intentional or negligent.
[26]It was common ground before me that no such by-laws have ever been made.
[27]Albeit that a burden of disproof rests on the Authority under s 157(2).
[28]See s 157(4)(b).
[29]See ss 157(4)(c) and (d).

The position is all the clearer in my view, because, on the defendant’s construction, damage done by the polluting of water by an Authority in the exercise of any of the specified functions would not be compensable under the Act at all. There is an analogy here with the general proposition referred to in Shergold v Tanner[30] that a law of the Commonwealth is not to be interpreted as withdrawing or limiting a conferral of jurisdiction unless the implication appears clearly and unmistakably. Further, if it matters, I doubt the correctness of the defendant’s submission that common law claims would still be available: see s 17(1) of the Act.
[30](2002) 209 CLR 126 at [34].

In a sense, the stance adopted by the Tribunal and the defendant amounts to saying that the Act confers only one power (or imposes only one duty) to award damages in relation to the pollution of water by an Authority, or alternatively in relation to the pollution of water by an Authority by the discharge of saline matter, and then only if the pollution occurs outside the exercise of the specified functions. However, in my view, the powers (or duties) conferred by the respective provisions are not the same. They are not with respect to the same subject matter. Accordingly, there is no proper basis for treating s 157 or s 16 as inapplicable in cases to which s 15 refers.[31]
[31]See and compare Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566, esp at [59]-[61] per Gummow and Hayne JJ.

Turning to the history of water legislation in Victoria, I note that the history is set out in great detail in the defendant’s written submissions.[32] Mr Garde did no more than skip through it in oral submissions without making any particular point about it. In the written submissions, the analysis seems to be directed mainly if not exclusively to the “onto” land point. The suggestion is made that the predecessors of ss 157 and 16 were fundamentally concerned with “flooding” and that ss 157 and 16 should be regarded in the same way. As indicated above, I do not need to decide the “onto” land point. However, as I have also indicated, I am by no means convinced that the current Act excludes liability for wholly subterranean flows. I would maintain my tentative view even after taking into account the defendant’s analysis of the history of water legislation in Victoria. So, to the extent, if any, that there is a link between the “onto” land point and the “causative flow” proposition, I am not satisfied that the defendant gains any support for the latter from the former, notwithstanding the defendant’s historical analysis.
[32]I refer to this history to some extent in South-East Water Limited v Transpacific Cleanaway Ltd [2010] VSC 46. Deputy President Macnamara referred to it extensively in his reasons for decision in that matter: [2008] VCAT 1798.

Nor, in my view, does previous authority assist the defendant. In the present case the learned Deputy President followed his own earlier decision in the Leongatha Water Board case[33]. That decision is referred to in some detail in paragraphs [62]-[63] of the Deputy President’s reasons in the present case. In turn, an important part[34] of the reasoning in Leongatha Water Board[35] is expressed to draw on the judgment of Gobbo J in Page v Castlemaine City Council.[36] In Leongatha, immediately before the passage repeated in paragraph [62] of his reasons in the present case (set out above), Deputy President Macnamara said:
[33](1996) 11 VAR 205.
[34]For present purposes.
[35](1996) 11 VAR 205 at 211.
[36](1988) 66 LGRA 296.

“The key question to my mind, is whether it can be said that the loss and damage alleged by the Co-operative has occurred as a result of the flow of water making the assumptions in favour of the claimant which I have already mentioned?
In Page v Castlemaine City Council (1988) 66 LGRA 296 at 302 Gobbo J considered the expression ‘flow of water’ where occurring in s 4(1) of the Drainage of Land Act 1975 (Vic) which is the predecessor statute to the Water Act. His Honour said:
‘I further observe that recourse to Hansard debates affords no assistance to any such wide reading. The legislation was essentially directed to dealing with the control of surface waters, mainly in country lands and in particular with the problems of diversion of or interference with, flood waters by land owners’.

The Tribunal’s decisions in Jebb’s case and the Ardnew case indicate that perhaps his Honour put the situation a little bit too narrowly in concentrating upon ‘surface waters’ and ‘country lands’ but my own consideration of the Hansard debates and other preparatory material relating to the development of the drainage jurisdiction in Victoria bears out his Honour’s observations with which, subject to the reservations already mentioned I respectfully concur. The relevant provisions of the Water Act and the Drainage of Land Act before it were concerned with damage caused not merely by water but by the flow of water. The legislation concentrates upon water’s quality as a liquid enabling it to move across the surface of land and through land itself in a way which solid materials cannot.”

In my view, however, Page offers no real support for the Deputy President’s reasoning. In Page, so far as relevant, it was held by Gobbo J that the Planning Appeals Board had been correct in determining that a certain part of a claim made before the Board in reliance on the Drainage of Land Act 1975 (Vic) was beyond its jurisdiction. The claimant, Ms Page, owned land in Bruce Street, Castlemaine. She had a dwelling house constructed on it. The defendant Council had approved and endorsed the plans and drawings for the house. It issued a certificate of occupancy. Later the Council undertook works on the kerbing and channelling of Bruce Street in the immediate vicinity of Ms Page’s land and undertook works to a drain carrying water under a railway bridge in the near vicinity of the land. Subsequently, Ms Page’s house and land were damaged by severe flooding. Ms Page commenced a proceeding against the Council in the Planning Appeals Board. In paragraphs 6-11 of her claim she alleged that the Council had been negligent in inspecting the land and house and in issuing the certificate of occupancy. The Chief Chairman of the Board struck out these paragraphs, taking the view, in substance, that the claim contained in them was outside the jurisdiction of the Board as not being one arising out of the flow of waters within the meaning of the Drainage of Land Act 1975. Ms Page challenged this decision of the Chief Chairman by way of an order nisi to review.

Ms Page argued that the Board had exclusive jurisdiction in relation to all civil causes of action arising out of the flow of waters from lands of a person in such a way as to cause or be expected to cause damage. At the time, s 4 of the Drainage of Land Act 1975 read:

“4(1)Subject to this section, the Planning Appeals Board shall have jurisdiction in relation to all civil causes of action arising out of —
(a)the flow of waters from the lands of a person in such a way as to cause damage to or which can be reasonably expected to cause damage to the lands of any other person;
(b)any interference with the flow of waters from the lands of any person in such a way as to cause damage to or which can be reasonably expected to cause damage to the lands of any person;
(c)the impounding of waters on the lands of a person in such a way as to cause damage to or which can be reasonably expected to cause damage to the lands of any other person; or
(d)the existence, construction or proposed construction of any works on the lands of a person which restrict or may restrict the flow of waters along a watercourse in such a way as to cause damage to or which can be reasonably expected to cause damage to the lands of any other person.

(2)Any action suit or proceeding based upon an cause of action of the kind referred to in sub-section (1) shall not be brought otherwise than before the Planning Appeals Board.
(3)Nothing in this section shall be construed as enabling any person to bring a claim for personal injury in any action, suit or proceeding based upon a cause of action of the kind referred to in sub-section (1) before the Planning Appeals Board.”

It was conceded by Ms Page (properly, as Gobbo J observed) that the only arguable basis for jurisdiction was s 4(1)(a). Gobbo J elaborated as follows on the relevant part of Ms Page’s pleadings and the ruling of the Chief Chairman:
“Paragraphs 6 to 11 of the plaintiff’s claim stated that the defendant was negligent in failing to inspect the land and dwelling-house which was permitted to be erected and occupied in non-compliance with what were then known as the Uniform Building Regulations. The plaintiff claimed that the defendant’s permission to build constituted a representation by which the plaintiff was induced to occupy the dwelling-house. It was argued that but for the defendant’s negligence in its supervision, the plaintiff would not [have] suffered damage from the flow of waters that occurred.
The chief chairman held that this part of the plaintiff’s claim could not be pursued before the Planning Appeals Board because any breach of statutory duty in respect of the siting and erection and occupation of the house did not amount to a civil cause of action within the meaning of s 4 of the Drainage of Land Act.”

Gobbo J then discussed a number of authorities, none of which he considered directly relevant. His Honour contrasted the allegations in paragraphs 6-11 of the claim with the allegations in paragraphs 12-14 wherein it was pleaded that the kerbing, channelling and drainage works on the Council’s own land had been carried out negligently causing flooding of Ms Page’s land. There had been no challenge to these paragraphs and his Honour observed that they were “clearly tied to acts relating to the flow of waters onto the plaintiff’s land”.[37] His Honour continued:

“The position is otherwise with the allegations in paragraphs 6-11 which in my view do not relate to the flow of waters from one land to another. They relate to wrongs in respect of the supervision of construction and occupancy of a house and representations as to this. Unlike the Montana Hotels case, the claim in paragraphs 6-11 was not directed to the flow of waters onto the plaintiff's land. Rather the claim was directed to the deficiencies in supervision and design of the plaintiff's dwelling house. All of this took place within the plaintiff's land and did not arise from the flow of waters from other lands. The defect and damage always lay within the plaintiff's land and it was only an aspect of loss that depended on the flow of waters. Even there it might on one view be said that the flooding occurred within the plaintiff's land.
The upholding of jurisdiction here would be tantamount to finding jurisdiction where there had been the supply of a defective drainage outlet or its defective installation and consequent damage after heavy rain and surface waters from higher ground. Similarly, where the outlet was said to be negligently manufactured or badly designed. In my view it is a distortion of language to refer to such a claim as one arising out of the flow of waters from the lands of another. Not only is this so on a consideration of the words of s 4. It becomes even more evident on reading the Act as a whole for there is nothing in its provisions to support such a wide reading. On the contrary, the language is wholly inappropriate to claims founded on an act of negligence such as faulty design of a product or negligent construction of a house. In these cases the flow of waters is no more than a factor going to damage. The detailed provisions in s 9 relating to the reasonableness of the flow of water have no part to play in eliciting, for example, whether the matters pleaded in paragraphs 6-11 constitute a good cause of action.
I am accordingly of the view that the Chairman was correct in his view that the matters in paragraphs 6-11 of the claim were not within jurisdiction.”

[37]At 301.

These passages put into context his Honour’s later reference to “any such wide reading” in the passage picked up by Deputy President Macnamara in Leongatha. In truth, Page is readily distinguishable from cases like the present. It related to significantly different legislation. The Drainage of Land Act 1975 related to “private” claims, not claims against water authorities. Broadly speaking, that Act may be described as the predecessor of s 16 of the Water Act 1989, but not of s 157. Even in relation to private claims, the scheme was different. The Act picked up common law causes of action. It did not create statutory causes of action. The jurisdictional provision in question (s 4(1)(a)) referred to “civil causes of action arising out out … the flow of waters from the lands of a person in such a way as to cause damage to or which can be reasonably be expected to cause damage to the land of any other person”. The current provisions contain no equivalent of the expression “ … the flow of waters … in such a way as to cause damage …”, whatever that expression may mean. In any event, there is nothing in Page to suggest that, even under the Drainage of Land Act 1975, a claim would have been outside jurisdiction if the damage had been done by the chemical composition of water from a flow rather than by the “flow” itself. Jurisdictionally, the objectionable feature of the relevant part of Ms Page’s claim was that her complaint about the conduct of the Council (namely, negligent inspection of Ms Page’s house and negligent issuing of the certificate of occupancy) was not a complaint about causing or permitting water to flow from the Council’s land onto Ms Page’s land. As Gobbo J said, the flow of waters was “no more than a factor going to damage”. By contrast, in the present case, the plaintiffs’ complaint is indeed about the defendant having caused or permitted water to flow onto (or to) their farms, causing damage. If anything, Page contradicts the approach taken in Leongatha and in the present case.

As to policy, I simply observe that there is no apparent policy reason why Parliament would have intended to confine liability in the way the Tribunal confined it.

For the above reasons, I hold that in a claim under s 157 or s 16 of the Water Act 1989 (Vic) for relief in relation to a relevant flow of water, it is not a condition of success that the injury, damage or loss in question be caused, to any extent, by the flow of water as distinct from the water itself or as distinct from the chemical composition of the water. Because the Tribunal’s decision to dismiss summarily the plaintiffs’ claims was based on the opposite construction of the Act, that decision must be set aside and the proceeding must be remitted to the Tribunal for hearing and determination in due course in accordance with the judgment of this Court.

Issue (b)

As indicated above, it is now not strictly necessary to deal with issue (b). However, to do so may assist the parties and the Tribunal, and it may be done briefly.

Even if, contrary to my holding above, the Tribunal’s construction of the Act was correct, it was misapplied to the claims made in this case. In the Leongatha case the damage was caused entirely by the contaminant, copper sulphate, that was transmitted to the factory through the water pipes. By contrast, in the present case, in relation to the BCDDS claim, the flow of water, or at least the water from the flow, is alleged to have caused damage quite apart from the aggravating feature constituted by the water’s salinity. This is apparent from the allegations regarding the raising of the groundwater level under the plaintiffs’ land as a result of the flow of water onto that land (irrespective of the composition of the water in question).[38] The Tribunal was therefore wrong to characterise the claims as being concerned only with the chemical composition of water (at [63], [65] and [66]) and to conclude that the flow was not “to some extent causative of damage” ([62]). As to the BCDDS claim, the composition of the water in the flow merely exacerbated the extent of damage caused by that flow (namely the rise in the groundwater level and consequent damage to the land). In the case of the 6/7 Channel, the claim concerned a flow of fresh water which caused the whole damage (again, the rise in the groundwater level). The Tribunal appears to have overlooked this fact: at [66].
[38]See statement of claim, paragraphs 10(d) and 13 (Barr Creek), 17 (6/7 Channel); Applicants’ statement of legal contentions, pages 2, 5 and 6; Tribunal’s reasons at [3] and [5].

In these ways the Tribunal misconstrued the plaintiffs’ claims and erred in law in doing so.

Issue (c)

Again, it is not strictly necessary to deal with issue (c). However, in case I be wrong in my conclusions on issue (a), I would uphold the plaintiffs’ submissions in relation to issue (c), which were advanced in the alternative.

Given the Tribunal’s conclusion that the facts alleged by the plaintiffs concern the chemical composition of water alone, and the Tribunal’s view that such claims were properly the subject of s 15 rather than ss 157 and 16, the Tribunal ought to have permitted the plaintiffs to re-plead their case relying on s 15, instead of dismissing it altogether.

On the Tribunal’s approach, the claims concern the chemical composition of water and therefore, at least in the case of the BCDDS claim, potentially attracted s 15. The claims could not then properly be regarded as “doomed to fail”, as the Tribunal held. Even if the Tribunal’s view of the law were correct, the factual case was not obviously unsustainable.

It is true that the defendant has asserted that the claim in respect of the BCDDS was brought in respect of an unspecified function under Part 11 (Irrigation) of the Water Act and that, accordingly, ss 15 and 16 do not create any liability in respect of the flow alleged. However the plaintiffs had submitted that the defendant was exercising functions under the Murray-Darling Basin Act, not under Part 11 of the Water Act. The Tribunal did not decide this point.

The Tribunal was obliged to act “according to the substantial merits of the case in all proceedings”: s 97 of the VCAT Act. The Tribunal should not simply have regarded it as “sufficient to note that no claim is made” under s 15 (at [63]), especially since the plaintiffs had foreshadowed a desire to re-plead their claim in any event (at [48]). The Tribunal should have permitted the plaintiffs to take that course, more especially because the hearing was an interlocutory one, not a final hearing.

Orders

Subject to any submissions that the parties may wish to make as to the precise form of the appropriate orders, I propose to make orders to the following effect:

(a)The appeal be allowed.
(b)The Tribunal’s order, insofar as it relates to the plaintiffs’ claims against the defendant, be set aside.
(c)In lieu thereof, there be an order that the defendant’s application for the dismissal of the proceedings as against the defendant be itself dismissed and an order that the plaintiffs have leave to amend their statement of claim as they may be advised.
(d)The proceeding in the Tribunal be heard and determined in accordance with the judgment of this Court.

I will hear the parties as to what, if any, order should be made in relation to the costs of the application at VCAT and in relation to the costs of the appeal in this Court.

SCHEDULE OF PARTIES

S CI 2008 9888

BETWEEN:

MICHAEL ROBERT PUMPA and CHRISTINE ELIZABETH PUMPA	Firstnamed Plaintiff
TREVOR JOHN PUMPA	Secondnamed Plaintiff
RAYMOND ALAN GEORGE HEPBURN and GLORIA JUNE HEPBURN	Thirdnamed Plaintiff
- and -
GOULBURN-MURRAY RURAL WATER CORPORATION	Defendant

Citations

Pumpa v Goulburn-Murray Rural Water Corporation [2010] VSC 169

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Melbourne Water Corporation v Vaughan Constructions Pty Ltd [2022] VSCA 241

Patsuris v Gippsland and Southern Rural Water Corporation [2016] VSCA 109

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4

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0

Premier Building & Consulting Pty Ltd v Spotless Group Ltd [2007] VSC 377

Shergold v Tanner [2002] HCA 19

Anthony Hordern & Sons Ltd v Amalgamated Clothing And Allied Trades Union of Australia [1932] HCA 9

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[2010] VSC 169

28 April 2010