Water Resources Commission v Graham

The Water Resources Commission (the Commission) appealed to the New South Wales Court of Appeal against a decision of the Land and Environment Court. The dispute concerned the Commission's refusal to grant a permit to Mr. Graham for the construction of a dwelling on land he owned, which was situated within a catchment area. Mr. Graham sought to build a house on his property, but the Commission, citing concerns about potential pollution of the water supply, denied the necessary permit.

The central legal issue before the Court of Appeal was whether the Commission had acted reasonably and lawfully in refusing to grant the permit. Specifically, the court had to consider whether the Commission's decision was based on relevant considerations and whether it had properly exercised its discretion under the relevant legislation, which governed land use within water catchment areas and aimed to protect water quality.

The Court of Appeal found that the Commission had failed to properly consider all relevant factors and had placed undue weight on the potential for pollution without adequately assessing the specific circumstances of Mr. Graham's proposed development. The court reiterated the principle that administrative bodies must exercise their discretionary powers reasonably, taking into account all relevant considerations and disregarding irrelevant ones. In this instance, the Commission's refusal was deemed to be an unreasonable exercise of its power. The appeal was allowed, and the matter was remitted to the Land and Environment Court for redetermination.