Eidsvold Shire Council v Chief Executive, Department of Natural Resources and Mines [2002] QLC 26 (2002) 23 QLCR 148

[2002] QLC 26 LAND COURT BRISBANE 5 APRIL 2002 Re: An Appeal against a Decision to Grant an Interim Water Allocation Section 1112(1)(a) of the Water Act 2000 (A2001/0124) Eidsvold Shire Council v. Chief Executive, Department of Natural Resources and Mines D E C I S I O N [1] Eidsvold Shire Council has appealed against the Chief Executive's decision concerning the grant to the Council of an "interim water allocation" under the provisions of the Water Act 2000. [2] Section 32(14)(i) of the Local Government Act 1936 provided that a local authority may take water from any river, stream or creek for any undertaking, but subjected that power to the following provision: " A Local Authority shall not, at any time after the passing of "The Local Government Acts Amendment Act of 1946, (No. 2)" commence to take water from any river, creek or stream unless and until it has first obtained the consent of the Governor in Council or, if such consent has been obtained commence or continue to take water at any time otherwise than subject to and in accordance with the terms and conditions, if any, imposed by the Governor in Council." A further clause in s.32(14)((i) provides: " The Governor in Council may in his absolute discretion grant or refuse to grant the application and moreover may, if he grants it, give his consent subject to such terms and conditions as he shall fix." [3] On 23 November 1961 an Order in Council was made under the Local Government Act authorising the Eidsvold Shire Council to take up to 33 million gallons of water per year from the Burnett River. That quantity of water converts to a metric volume of about 150 ML. [4] In 1968 the Wuruma Dam was completed. That dam is situated on the Nogo River, 23 km upstream from the junction with the Burnett River and 48 km from the -- 1 of 10 -- 2 town of Eidsvold. I understand that this dam allows water to be released to regulate supply along sections of the Nogo and Burnett Rivers. [5] On 7 February 1980 a further Order in Council was made under the Local Government Act. It rescinded the 1961 Order in Council and granted an application of the Shire Council to take water from the Burnett River. The Order in Council said that the grant was subject to "terms and conditions which are hereby imposed", then listed eight terms and conditions, two of which are presently of interest: "(3) The maximum quantity of water which the said Council may take from Burnett River in any one year shall be 350 ML. (8) The Council shall enter into a agreement with the Commissioner of Water Resources for the supply of water under the foregoing terms and conditions and such other terms and conditions as the Council and the Commissioner agree upon." [6] On 8 August 1980 an agreement was entered into between the Shire Council and the Commissioner of Water Resources. That agreement recited reference to the 1980 Order in Council, provided for the Shire Council to divert up to a maximum of 350 ML in any one year from the Burnett River and supplied a number of terms connected with such diversion of water, including terms concerned with annual charges, monitoring of supply and arbitration. Clause 12 of the agreement is pertinent to the present appeal. It provided: "12.00 Notwithstanding the date of execution, this Agreement shall be deemed to have come into operation on the first day of July One thousand nine hundred and eighty and shall unless cancelled and determined in manner hereinbefore provided remain in force for twenty years and may be renewed subject to conditions agreed between parties, PROVIDED ALWAYS that it shall be lawful for the parties by mutual consent to rescind, alter or modify the whole or any part of this Agreement by a deed duly executed under their respective seals." [7] The effect of Clause 12 was such that the agreement determined 20 years after its commencement, that is on either 30 June or 1 July 2000. The agreement was not replaced by a further agreement. I note for completeness that the Local Government Act 1936 was repealed by s.802 of the Local Government Act 1993 at its commencement date of 26 March 1994. The later Act did not contain a provision analogous to s.32(14)(i). Nevertheless the combined operation of s.20 Acts Interpretation Act 1954 and s.1.3(b) of the Water Resources Act 1989 as enacted) would operate to continue the 1980 Order in Council and the 1980 agreement until its determination. -- 2 of 10 -- 3 [8] On 1 October 2000 a commercial business unit within the Department of Natural Resources was corporatised under the Government Owned Corporations Act 1993 and was given the name SunWater. [9] Also, on 1 October 2000 provisions of the Water Act 2000 relevant to the bulk of issues between the parties commenced. The Act is divided into nine chapters with Chapter 9 being titled "Transitional Provisions and Repeals". Part 4 of Chapter 9 is headed "Transitional Provisions about State Water Projects and its Customers". Division 2 of Part 4 has the title "State Water projects after corporatisation". It is this division with which this appeal is essentially concerned. [10] Section 1111.(1) of the Act relevantly provides: "1111.(1) Within 30 business days after this division commences, the chief executive must grant and give to the corporatised entity an interim resource operations licence for Julius Dam and for each irrigation or project area under the Water Resources (Rates and Charges)Regulation 1992 the corporatised entity operated both immediately before the immediately after and immediately after the entity was corporatised. (2) Each licence must state, for the licence – (a) … (b) … (c) details of existing customers of the corporatised entity who are to be granted interim water allocations other than those customers who hold interim water allocations taken to be granted under section 1114; and (d) … (e) … (3) Within 30 business days after the granting of the interim resource operations licence, the chief executive must give the customers mentioned in subsection (2)(c) and (d) information notice about the granting of the licence." [11] The Shire Council is not a customer who holds an interim water allocation taken to be granted under s.1114. The relevant corporatised entity referred to in s.1111.(1) is SunWater. Section 1112.(1)(a) provides: "1112.(1) On the day the chief executive grants the corporatised entity interim resource operations licences under section 1111, the chief executive – (a) must grant to the corporatised entity an interim water allocation in accordance with each interim resource operations licence the corporatised entity is given under section 1111.(1);" Section 1113 provides: -- 3 of 10 -- 4 "1113.(1) On the day the chief executive grants the corporatised entity interim resource operations licences under section 1111, the chief executive must grant each customer of the corporatised entity, mentioned in section 1111.(2)(c), an interim water allocation in accordance with the interim resource operations licence for the allocation. (2) Before the chief executive grants an interim water allocation under subsection (1) the chief executive must consider, for the granting of the interim water allocation, the following matters in relation to the customers existing authority – (a) whether the authority stated that the customer was granted nominal allocation of the water; (b) whether the authority was in existence when the relevant irrigation area or project was established; (c) whether the supply of water under the authority had an end date; (d) whether the customer has, over the term of the authority, paid the full commercial value for the supply of water under the authority; (e) whether the customer has paid the full commercial value for all or part of the supply of the water under the authority and it is reasonable that a proportion of the authority should be granted to the customer as an interim water allocation. (3) On the day the grant is made under subsection (1), the chief executive must give the allocation to the grantee. (4) Each interim water allocation attaches to the land of the grantee unless the grantee is – (a) a local government; or (b) a water authority; or (c) an entity prescribed under a regulation." An "interim water allocation" means – "(a) an authority to take water managed under an interim resource operations licence that represents a volumetric share of water; and (b) any conditions attaching to the authority." (Schedule 4 to the Act) -- 4 of 10 -- 5 [12] The giving of an "information notice" under s.1111.(3) provides the recipient, in this case, the appellant, with an opportunity to have the decision made under s.1111 reviewed. That opportunity is provided by s.1115 which relevantly provides: "1115.(1) Subsection (2) limits the right of a customer given an information notice under section 1111(3). (2) The customer may apply for a review of the decision mentioned in the notice only so far as the decision is about the customer not being granted an interim water allocation for all or part of the authority previously held by the customer. (3) If the customer has, before the day the chief executive grants the corporatised entity interim resource operations licences under section 1111, been supplied with water under the authority, the customer may apply for the review only on 1 or more of the following grounds – (a) the authority stated that the customer was granted nominal allocation of the water; (b) the authority was in existence when the relevant irrigation area or project was established; (c) the supply of water did not have an end date and the customer has, over the term of the authority, paid the full commercial value for the supply of water under the authority; (d) the customer has paid the full commercial value for all or part of the supply of the water under the authority and it is reasonable that a proportion of the authority should be granted to the customer as an interim water allocation. (4) … " [13] An interim resource operation licence was issued to SunWater on 7 November 2000. This document included, amongst other things, a Schedule 2.1 which was headed "Interim Water Allocation to be managed under the Licence" and listed a number of customers including the Eidsvold Shire Council. Against the name of the Council, Schedule 2.1 set out that 150 ML was allocated to the customer and 200 ML to SunWater. The allocation to each was classified as being medium priority with the purpose being described as "urban". The effect of this allocation, as I understand it, is that the 150 ML allocation is granted direct to the Shire Council, whilst the 200 ML allocation is granted to SunWater for use by the Shire Council. There are cost implications to the Council in it not being granted the full 350 ML direct. -- 5 of 10 -- 6 [14] An Information Notice concerning the interim resource operation licence amongst other things was provided to the Shire Council together with a letter dated 13 December 2000. The Information Notice advised that the delegate of the Chief Executive had decided to grant interim water allocations in the volumes set out in the above paragraph. [15] The Shire Council sought a review of that decision under s.1115 seeking an interim water allocation of 350 ML direct to the Council. The review decision modified the initial decision but to the extent only of changing the allocation to the Shire Council from 150 ML to 200 ML per annum of high priority water and the allocation to SunWater of 150 ML of medium priority water instead of 200 ML per annum. The Shire Council now appeals to this Court, pursuant to s.877 of the Water Act. [16] Section 880(2) provides, "An appeal is by way of rehearing, unaffected by the reviewer's decision". The powers of the Court on appeal are dealt with in s.882 which provides, relevantly: "882.(1) In deciding an appeal, the court may – (a) confirm the review; or (b) set aside the review decision; or (c) amend the review decision in the way the court considers appropriate; or (d) send the matter back to the reviewer and give the directions the court considers appropriate; or (e) set aside the review decision and substitute it with a decision the court considers appropriate. (2) It the court amends the review decision or substitutes another decision for the review decision, the amended or substituted decision is, for this Act (other than this part taken to be the reviewer's decision. (3) … " [17] Although it is not explicit in the Act, the Court's considerations on the appeal would logically be limited to the grounds for a review provided for in s.1115. The Shire Council's appeal originally included a number of grounds, but before me confined the appeal to s.1115.(3)(a): "the authority stated that the customer was granted nominal allocation of the water". -- 6 of 10 -- 7 [18] Subsections (2) and (3) of s.1115 read together lead to an understanding that a review, hence an appeal from any such review, may be mounted only if the Shire Council has been supplied by water under an "authority" which was in place on the day before the grant of the interim resource operation licence to SunWater. That is, the Shire Council would need to have held such an authority on 6 November 2000. [19] The requirement for there to be an authority permeates the relevant transitional provisions of part 4 of Chapter 9 of the Act such that the absence of an authority leads also to the absence of a necessary prerequisite to the grant of an interim water allocation and the issue of an information notice. The critical question then is whether at the relevant time the Shire Council had an "authority". [20] It is important at this point to include reference to s.1037: "1037. If, immediately before the commencement of this section, there was in force an authority for a local government to take or interfere with water, the authority continues under this Act until the authority is replaced with a water entitlement under this Act." This provision commenced on 13 September 2000, the date of assent of the Act. [21] Part of the scheme of Chapter 9 of the Act appears to be to provide secure access to water to a local government with a valid "authority" as at the date of assent. In due course such an "authority" would be replaced by an interim water allocation granted direct to the local authority under s.1113 or via SunWater under s.1112. Section 1037 has the effect of continuing a valid "authority" until an interim water allocation is granted. If it were the case that the Eidsvold Shire Council had a valid authority which could take the benefit of s.1037 then it would not be relevant if that authority would otherwise have expired after 13 September 2000, but before the grant of the interim water allocation on 7 November 2000. If it were the case, however, that the Shire Council did not at the date of assent have a valid "authority", then it may not take advantage of the transitional provisions of part 4 of Chapter 9 of the Act. [22] A definition of the term "authority is supplied in s.1109: "'authority' means – (a) a licence under part 4 or 9 of the repealed Act; or (b) an order in council under which water is supplied; or (c) an agreement for the supply of water made under section 15 of the repealed Act; or (d) another agreement for the supply of water under the repealed Act." -- 7 of 10 -- 8 [23] Neither (a) nor (c) in the above definition call for consideration on the facts and submissions before me. [24] It was submitted by the Shire Council that the relevant authority for the purpose of the appeal is the Order in Council made in 1980 and that this instrument remained extant at the relevant date of 30 September 2000. The agreement between the Shire Council and the Commissioner of Water Resources of 8 August 1980 was, it was said, simply a machinery provision with respect to such matters as costs. Notwithstanding the expiration of the term of the agreement, it was submitted the authority to take 350 ML of water pursuant to the Order in Council remains. [25] It was suggested for the Shire Council that the continued authority of the Order in Council is consistent with the fact that interim water allocations have been granted. Whilst it may be consistent, that cannot be sufficient to answer the question of law raised, in my view. [26] A significant difference between the 1980 Order in Council and the Order in Council made in 1961 is that the earlier instrument included no requirement for the Shire Council to enter into an agreement with the Commissioner of Water Resources. An Order in Council in the form of the 1961 instrument would, as at 13 September 2000, have clearly been capable of being "an Order in Council under which water is supplied" (s.1109.(b)). [27] Section 32(14(i) of the Local Government Act, under which the 1980 Order in Council was made, provided that the consent of the Governor in Council may be made subject to such "terms and conditions" as the Governor in Council considers appropriate. Eight such terms and conditions, described as such, were included in the 1980 Order in Council. Each of these terms and conditions are part of the Order in Council including No. 8 which provided for the need for the agreement between the Shire Council and the Commissioner of Water Resources, that agreement being required to be under the terms and conditions of the Order in Council including "such other terms and conditions as the Council and the Commissioner agree upon". There was no question of the Governor in Council sub-delegating the authority granted under s.32(14)(i) of the Local Government Act as the Order in Council did not give the Commissioner of Water Resources authority to decide and impose conditions not agreed upon by the Shire Council. Indeed, the evidence reveals a degree of negotiation between the parties to the agreement as to its terms. One such term concerned the determination and possible renewal of the agreement, that is Clause 12. -- 8 of 10 -- 9 [28] The "incorporation by reference" of a document into a statutory instrument is a technique that was recognised as valid in Wright v. TIL Services Pty Ltd (1956) 56 SR (NSW) 413. Notwithstanding earlier authority that, in the case of delegated legislation in the form of by-laws or regulations, the method was held to be invalid (O'Keefe v. City of Caulfield [1945] VLR 222; McIver v. Allen (1943) 43 SR (NSW) 266 and Arnold v. Hunt (1943) 67 CLR 429). The conclusion reached in Wright was reinforced in Dainford Ltd v. Smith (1985) 58 ALR 285 where (at 289) Gibbs CJ, with whom Dawson J agreed, said: "There is no general principle that a power to make by-laws may not be exercised by referring to some other document and incorporating or applying it provided that what is referred to is sufficiently certain." [29] The majority of the Queensland Court of Appeal applied Dainford Ltd and Wright in Dorfler v. Pine Rivers Shire Council [1994] 1 Qd R 507. Somewhat greater scope for flexibility in finding validity would apply in the case of what might be called a private document than in the case of delegated rule-making where certainty for the public at large is a prominent consideration (Dainford Ltd and Medcraft v. City of Box Hill [1959] VR 768). In my view the 1980 agreement between the Shire Council and the Commissioner of Water Resources might be characterised as a private document as it does not record rules or directions for the public at large. Clearly, the document is accessible to the parties with a direct interest in it. [30] I undertook the above discussion, not because either party raised as an issue the validity of either the 1980 Order in Council or the 1980 agreement, but to indicate the nature of the incorporation by reference method. One particular aspect of the method can be understood from the joint judgment of Justices of Appeal Pincus and McPherson in Dorfler where at 513 they say: " Here, the subdivision by-law sets out, in part, the law relating to applications, but for full knowledge one must have reference, so far as is relevant here, to the Council's Design Manual." [31] In other words, each is not complete without the other. That is a proposition that applies in all valid cases involving "incorporation by reference". It applies in the present case. [32] Thus whilst the 1980 Order in Council might properly be understood as an exercise of power under s.32(14)(i) of the Local Government Act, it is not complete and may not be understood without reference to the agreement required by condition No. 8. The "authority" required by s.1115.(3)(a) may be an authority of the type described in s.1109.(b) as "an Order in Council under which water is supplied". All -- 9 of 10 -- 10 that exists following the determination of the 1980 agreement on 30 June or 1 July 2000 was, however, not an Order in Council that satisfied this definition, but an incomplete statutory instrument under which it cannot be said at 30 September 2000 "water is supplied". Neither can there be said to be "another agreement for the supply of water under the repealed Act" (s.1109(d)). Schedule 4 to the Water Act provides that the "repealed Act" means the "Water Resources Act 1989". The agreement expired well before the repeal of the "Water Resources Act": indeed, whilst s.1137 of the Water Act repeals the "Water Resources Act" that section has not yet been proclaimed into force. It follows that the ground of appeal cannot be made out. I need not deal with submissions made concerning whether the Shire Council had previously been granted a "nominal allocation". [33] A consequence of the Shire Council not having an "authority" on 30 September 2000 is that it does not have the necessary prerequisite for the grant of an interim water allocation. It would also appear to follow that the Shire Council does not have a right of appeal and that, therefore, I do not have jurisdiction to consider this appeal. This is a matter that I raised during submissions, however counsel for the respondent assured me that I should simply dismiss the appeal. [34] To the extent that I have jurisdiction to consider this matter, I find that the appeal should be disallowed. RP SCOTT MEMBER OF THE LAND COURT -- 10 of 10 --