Fairley v The Commissioner of Water Resources [1992] QLC 22

LAND COURT BRISBANE 3rd July, 1992 Re: Appeal under Water Resources Act (1989). (A92-20). James Fairley and Christine Fairley v. The Commissioner of Water Resources D E C I S I O N (Hearing at Biloela) This is an appeal under s. 4.26 of the Water Resources Act 1989 (the Act). The appellants are the owners of a parcel of land described as Lot 330 on Plan RN 1370, parish of Prairie, containing an area of about 41 hectares. The lot was purchased by the appellants in September 1986. Although possession was taken on the ninth of that month, they awaited the expiry of a lease over the property (May 1987) before working the property for themselves. The lot had the benefit of a licence to extract water for irrigation from the aquifer of the Callide Valley. The lot has had a licence attaching to it since 1971. Prior to 1987 when a number of investigations in the water resources of the aquifer had been completed, the lot had an allocation of 187ML. That licence was transferred to the appellants on 30th June, 1987, following an application to transfer made on 12th June, 1987, and following the expiry of the lease over the lot. The investigations carried out by the Water Resources Commission, about which more will be said, determined that the volume of water available for irrigation within the valley (to the many irrigators) was not what it was thought to be and consequently that there was an urgent need to rationalise distribution. This process which was undertaken by the Commission in liaison with the irrigators' spokesbody (the Callide Valley Water Advisory Board (the Board) which was formed to assist and advise the Commission and its officers) covered not only an attempt to distribute the volume of water determined to be available but also sought to rectify anomalies that had occurred over the years. In other words the objective was to begin de novo, as it were, and to reallocate water in accordance with principles which require that water is distributed fairly and equitably. The appellants' land lies within section 7 of the benefited area. When purchased the lot had a licence to extract 187ML. Under the system adopted after liaison with the Board and in the process of reallocating water, regard was had to the volume of water used between [1992] QLC 22 -- 1 of 6 -- 2 the years 1982/83 and 1986/87 as a base line from which adjustments could be made (plus or minus) in rationalising allocations. The recorded use of water over those years for this lot was not encouraging - the average was 11ML or 6% of the original allocation. In following the guidelines adopted an allocation of 150ML was adopted. On 10th September, 1991, an amended licence No 31526 was issued to the owners (appellants) of Lot 330. The licence carries a nominal allocation of 150ML. The licence expires on 30th April, 1994. What was allocated was a volume of 80% of the former allocation - original allocation. The appellants have appealed the decision on grounds that - (1)in the circumstances the Commissioner erred in adopting wrong and inappropriate criteria for determining any alteration to the existing allocation in that the Commissioner relied on water usage of a prior owner when it was inappropriate to do so; (2)in the circumstances the prior allocation of the appellants should have been reduced no more than 10% to 168ML and not 20% to 150ML. (3)in the premises the decision of the Commission was wrong and contrary to proper principles. The significance of the 90% is that this is the maximum which has been applied in the redistribution process. Mr and Mrs Fairley arrived in Biloela in 1985. They purchased the lot in 1986. They intended to grow lucerne. They are now growing cotton. Mr Fairley was not familiar with the laws of the State applying to the allocation and distribution of water. He is rapidly becoming aware of those laws. He has recently become the irrigators' representative for section 7. The case he makes out is that he purchased the lot with the intention of irrigating the area for cash cropping. He purchased the necessary machinery and equipment. He believes the lot should receive the maximum permissible allocation under the guidelines adopted between the Board and the Commission. Neither the Commission nor the Court could criticise these intentions. Rather they are admired and public interest would encourage them. However, what to date is not understood is that the onus applying on the Commissioner equally applies to a licensee. The Commissioner has a duty to use his best endeavours to see that water is allocated fairly - "ensuring that each applicant is fully considered, with the balances held fairly, and adjusted equitably as between the applicant and other riparian owners who may be affected. " (Shooter and Ors v. The Commissioner of Irrigation and Water Supply (1972) 39 C.L.L.R. 11 at p. 18). The applicant has the responsibility of ensuring that the allocation is used beneficially. Condition 2.200A of this licence reads - -- 2 of 6 -- 3 "The licensee, after installing the bore, shall to the satisfaction of the Commissioner beneficially use the water which is entitled to be withdrawn under this licence. " Historically this condition is common. It, with the provisions of the Act dealing with amendments and renewal of licences, serves ample notice on a licensee that a licence is not something which will be renewed as of right or something which may run on in perpetuity irrespective of the use made of it. The combination of these provisions leaves the gate open for the Commissioner to ensure that all available water is beneficially used; for example, by not renewing a licence if no use is made of it and by allocating that water to another, such as a new irrigator. On the history of use made of the licence which the current licence replaces there would appear to be room for argument that it was one which should, on expiry, be not renewed. That form of reasoning was negatived by the appellants purchase bona fide for irrigation carrying with it, however, the "original sin". These purchasers have been regarded and rightfully so in my opinion as being in the nature of new owners. They fall within guideline D(i) - "Purchase of property within 5 years and changed farm management involving financial commitment to new irrigation practice." - under which an allocation was not intended to exceed 80% of the original allocation. An application of the principles which I have discussed would deem this a fair and equitable allocation. That will appear more so shortly. Unfortunately with every system faults will occur. Part of the appellants' case involves a comparison in allocation with a neighbour who purchased at the same time as the appellants and historically was entitled to no greater allocation than 80% of the original allocation. On review that allocation was taken to 90% whereas the subject allocation remained at 80%. That action on the evidence before the Court was anomalous and I recommend that it be corrected at the appropriate time. The fact that it has occurred, however, is not a ground for adjusting the appellants' licence. I now propose to cover briefly the background which led to the issue of the licence. This evidence and evidence dealing with the issue of the many allocations was given by Mr A.T. Wallwork who is in the employ of the Commission as District Manager, Biloela, and by Mr A.W.A. Bleakley, which is employed at the same centre as Assistant Senior Adviser (Hydrology). I have no need to separate their evidence. In a space of barely 30 years, irrigation in the Callide Valley developed with a momentum which called for an investigation of supply in 1963. This investigation coincided with the planning of the Callide power station and a dam on Callide Creek. The investigation involved the -- 3 of 6 -- 4 drilling of 186 observation and 18 production laws. The area was subdivided into 11 sub-areas. Many of these sub-areas are still used as management sections. That investigation resulted in a report entitled "Progress Report on Ground Water Investigations Callide Valley 1965". It assessed the safe annual yield of the Callide alluvium under natural conditions as approximately 30,000ML. In 1968 the area was declared a sub-artesian district. The declaration required the licensing of bores and fixing of conditions of use of water by the Water Resources Commission. By 1970 irrigated areas had increased to approximately 4,000ha. The increase was causing water levels to decline. The Irrigators' Association was pressing for the augmentation of supply. Another investigation was undertaken. Storage in the Callide was proposed to be improved - (Callide Stage II). The assessment concluded that a safe annual yield was 45,000ML - greater than the licensed allocations at that time. Irrigation usages were obtained from landholders. The representatives recommended an augmentation scheme. The scheme was completed in 1977. In 1978 believing that 45,000ML was available for allocation, landholders were invited to indicate whether they wished to take up the full allocation that they indicated they required during a survey of the farms in 1973. That process was conducted in all sections of the valley except section 11. In this manner the level of permitted allocations was increased to 45,000ML. In that year the metering of irrigation bores was commenced. All bores were not metered until around 1982. The meters told the Commissioner that between 1978 and 1985 use was approximately 25,000ML. With water levels in most of the valley still in decline it was obvious that the assessment of yield from the total system had been overestimated, and that allocations were too high. An assessment of metered use between 1978 and 1983 put the average annual yield at 22,000ML. Of this some 12,000ML per annum could be attributed to the natural aquifer system and approximately 10,000ML per annum to the recharge releases from Callide Dam Stage II, the diversion channel and the Kariboe Weir. From these figures it can be seen that the allocated volume was almost twice the assessed average annual yield and the average higher than the average annual yield. In 1981 the Board was formally constituted and thereafter the two authorities worked in conjunction. In 1986 in response to representations from individual irrigators, Banana Shire Council and grower organisations for measures to stop declining water levels, the Commission undertook a comprehensive review of water supplies in the valley. This review led to a report entitled "Review of Water Supplies in the Callide Valley - November, 1986". The report concluded, that "in order to ensure the long term viability and stability of agricultural production in the area, positive action must be taken to reduce the current level of over allocation and use and management measures must be implemented to ensure a more -- 4 of 6 -- 5 effective and equitable use and distribution of the water resources in the area. " The report outlined some proposals for future management of the resources including - "(a)Annual nominal allocations .. to reduce the overcommitment of supplies in the Callide Valley the Commission should review all existing allocations and set new allocations for each user on the basis of their metered water use over the past 5 years. And (b)Announced annual allocation. The actual volume of water to be made available each year to be called the 'announced allocation', would depend upon the volume in storage at the beginning of each year. In some years water in addition to the nominal allocation may be available while in most years the nominal allocation would not be available and some level of restricted water use would need to be applied. " The method adopted has found its way into the current legislation. (Refer s.4.19(3) for example). In consultation with the Board guidelines were adopted in redistributing the available supply. Among considerations was that of correcting anomalies; for example, section 11 which got no benefit from an earlier review. Guidelines for distribution fell under some eight headings of criteria. The appellants came under "D". I will not traverse the criteria save for "A" which reads - "A. No special circumstances apply. Average annual use to be used as basis for determining A.A.A. for 87/88 with the additional modifications of: (i)If average use is more than 90% of allocation and allocation is more than 100ML, reduce average use to 90% of allocation. (ii)If average use is less than 70% of allocation and irrigator made no application for special consideration and a pattern of use shows responsible management, increase average use by 10%. " When speaking of equity and fairness it can be seen that group (i) has lost out to some extent for the benefit of other irrigators in the valley. It is recognised in the evidence of Mr Bleakley that in some circumstances, guidelines overlap and that an allocation will vary depending upon which criteria is applied. The concept, however, has all the merits of a fair and equitable system and it has been derived in consultation with the irrigators' representatives. The application of the system was put into formal effect in 1991. This appeal is one which has resulted. Returning then to the grounds of the appeal I find that the adoption of the criteria under which the appellants' allocation has been made is reasonable on principle and on the facts. It follows that -- 5 of 6 -- 6 the onus of proof has not been discharged. The appeal is therefore dismissed and the determination of the Commissioner confirmed. Member of the Land Court -- 6 of 6 --