Engwicht v The Commissioner of Water Resources [1993] QLC 2

LAND COURT BRISBANE 5 February 1993 Re: An appeal against a decision of the Commissioner of Water Resources to amend a Waterworks Licence A92-42 (Hearing at Biloela) JM and IA Engwicht v The Commissioner of Water Resources D E C I S I O N Introduction The appellants, JM and IA Engwicht, own land which abuts a natural spring. The spring is the source of water for domestic use and for the cattle on that land. The appellants have a licence to construct a weir near to the spring and so draw the spring water to which they are entitled from the reservoir. The Commissioner of Water Resources (the "Commissioner"), when renewing the licence, amended it to include four additional special terms (the "Special Terms"). The appellants object to the Special Terms and have appealed to the Land Court under section 4.26 of the Water Resources Act 1989 (the "Act") to have the Commissioner's decision revoked. Both parties were legally represented at the hearing of the case in Biloela. Mr RCL Parks appeared on behalf of the appellants and Mr D Grealy appeared on behalf of the respondent Commissioner. Each party provided oral and written evidence. For the appellants oral evidence was given by Mr JM Engwicht and his wife Mrs SP Engwicht (who reside on the appellants' land), Mr RM Engwicht, and Mr AW Bucknell, a former employee of the Water Resources Commission (the "Commission") who had been a farm advisory officer and stream control officer. Oral and written evidence for the Commissioner was presented by Mr RW Krebs, the Commission's District Manager at Toowoomba. Viewed narrowly, the issues in this case are the legal issues specified in the notice of appeal. They must be resolved by a consideration of the evidence in the context of the relevant provisions of the Act. But the issues have a social context. The spring is also a [1993] QLC 2 -- 1 of 32 -- 2 source of water for the appellants' neighbours, RW and BM Black. The Blacks also have legal rights to draw water. The appellants and the Blacks have been in dispute for some 20 years about whether each has been taking more than their share of spring water and whether, on occasions, the flow of water to one property has been blocked or interrupted by the owner of the other property. The ongoing dispute has been made known to officers of the Commission who have spent much time in discussions with both parties and inspecting installations at the site of the spring. The appellants contend that the Special Terms are not fair to them but are a means by which the Commissioner is seeking to relieve himself and his officers of the administrative burden rising from the dispute. Before turning to the five grounds of appeal it is appropriate to set out in some detail the background to the need for and terms of the appellants' licence and some of the circumstances surrounding the preparation of the Special Terms in issue in these proceedings. The facts JM and IA Engwicht own Portion 11 in the Parish of Ballamoo, County of Humboldt. The property, known as "Bottletree Camp", has an area of 10,117 hectares and is located approximately 40 kilometres south of Blackwater. Some 2,500 cattle graze on the property. At the north-eastern corner of the property is a spring known as Ardurad Spring, which flows from rock features at the base of the Shotover Range into Blackwater Creek. The creek forms the boundary between Portion 11 and Portion 10, a narrow and relatively small strip of land. The bulk of the irregular northern boundary of Portion 11 is a common boundary with Portion 12, a property of 5972 hectares known as "Ardurad", owned by RW and BM Black. Portion 10 was apparently leased to the Blacks until July 1992, when the lease expired. I understand that a process is being followed by which the Blacks hope to obtain freehold title to the land. Mr Krebs gave evidence that both the appellants and the Blacks are considered to have similar water supply demands and they have respectively developed their grazing enterprises on the basis of drawing the majority of their stock water needs from the Ardurad Spring supply. Both blocks were released for grazing by Lands Department with the understanding that access to that water would be available. (Appendix 5 in Exhibit 6 provides an estimate of the water requirements of each property.) The practical concern of the appellants and the Blacks seems to be how best to -- 2 of 32 -- 3 ensure that they have uninterrupted and equal access to the spring sourced water supply. For most of each year there is no practical problem because the rate of flow from the spring exceeds the demands of both sets of neighbours. There was evidence from Mr RW Krebs that the spring provides between 3 and 4 litres/second for some nine to ten months of each year. It is only when the flow rate drops to about 2.7 litres/second that the guarantee of access to half the water becomes critical. At times when the flow is low and the stock demand is high, the demand slightly exceeds the supply from the spring. The appellants were issued with Waterworks License No 35689 (the "License") on 18 February 1980. The License concerned a 1.4 metre high concrete and rock weir to be located at the headwaters of Blackwater Creek. The purpose of the work was described in the License as "Water Conservation for Stockwatering". According to Mr Krebs' written statement (Exhibit 6), the weir was to provide a balancing storage and to establish a means by which water could be gravity diverted by a pipeline. The License approved the work and declared it to be a licensed work under The Water Act 1926-1979. A copy of the License is part of Exhibit 6. The licensed work was subject to the terms, limitations and conditions appearing on the Schedule to the License. The terms included: -- 3 of 32 -- 4 "1.The Licensee shall install the work for which the License is granted within two (2) years from the date of grant of the License. ... 6.If there is a flow in the watercourse into the storage but there is no flow over the bywash or spillway, water must be allowed to pass downstream of the dam through the outlet pipe or siphon pipe or by any other means determined by the Commissioner or an Authorised Officer at a rate equal to the unrestricted capacity of the outlet pipe or siphon pipe (with the downstream end of the pipe at bed level) or equal to the rate at which water is entering the storage, whichever is the lesser, or at such a rate as may be determined by the Commissioner or an Authorised Officer. When directed by the Commissioner the Licensee shall install and maintain to the satisfaction of the Commissioner approved flow measuring devices for the purpose of measuring flows entering and leaving the storage. ... 9.The outlet pipe on the weir authorised by this license is to be fitted with an 80mm T piece with one side plugged to enable releases when required by the Commissioner into the weir storage owned by Sirius Creek Coal." The License was expressed to expire on 31 March 1983. Reference is made in term 9 to Sirius Creek Coal because the weir immediately downstream of the appellants' weir was licensed to Sirius Creek Coal Pty Ltd on 3 July 1979. The weir structure is authorised by Waterworks License No 34609. Authority for that facility was transferred to RW and BM Black on 27 January 1989. In these reasons for decision that weir will be called the "Blacks' weir". Term 9 was apparently intended to ensure that built into the appellants' weir would be the facility to enable downstream releases into the Blacks' weir. Until the appellants' weir was constructed, the appellants took their water supply by way of one of the outlets from the Blacks' weir. During that period, the water supply was shared by the coal company, the appellants and the Blacks. Because of the geography of the adjacent properties, the Blacks have always had an hydraulic advantage. Water will flow down to their lower elevation property at a rate -- 4 of 32 -- 5 significantly greater than it is drawn through a pipe onto the appellants' property. Indeed, Mr JM Engwicht gave evidence that it was after the measurement of rates of flow from the Blacks' weir to the two properties that the appellants were licensed to construct the appellants' weir. Despite term 1 of the License, the appellants' weir was not constructed until either late 1987 or early 1988. Once it was constructed, the appellants removed their offtake from the Blacks' weir and reconnected it to their weir. The spring supply first filled the appellants' weir from which they diverted supply for their stock purposes. Passflow supply to the Blacks' Weir was by way of overflow of the appellants' weir. At that time, concern was expressed by the Blacks that the new weir would afford the appellants the potential to capture and control the flow of the spring. According to Mr Krebs, it was considered at the time that the terms attaching to the License were sufficient to provide a basis for ongoing and fair access to the water supply for the two parties. Terms 6 and 9 were seen as the instruments by which effective regulation was possible. Term 6 anticipated a possible requirement for the licensee to install and maintain an approved flow measuring device. Term 9 provided a structural measure to enable such releases to take place. While a T piece was not ever installed, a satisfactory alternative in the form of dual through piping was provided. The outlet arrangements consisted of two 80mm diameter through pipes. One pipe was connected to the appellants' gravity diversion pipeline. The other was fitted with a blank. As Mr Krebs succinctly stated, there has been an evolution in the arrangements for the sharing of spring water by those who are legally entitled to it. Although different and more refined structures have been constructed and installed in recent years, there has not been a clear way of demonstrating to the appellants and to the Blacks that both sets of neighbours were receiving (or, at least, having access to) the water to which they are entitled. Mr JM Engwicht said that water flows over the top of the appellants' weir and into the Blacks' weir for approximately 8 to 9 months each year. That flow is in addition to the flow through the orifice near the base of the appellants' weir. Any overflow from the Blacks' weir enters directly into Blackwater Creek and eventually percolates into the underground system, replenishing aquifers from which water is drawn by people -- 5 of 32 -- 6 downstream. Water flowing along Blackwater Creek is available to cattle on the appellants' property. Mr JM Engwicht said that water would run into the creek in winter for about 3 months. Only after a reasonable wet season can cattle be watered from the creek. The evidence shows that since the construction of the appellants' weir most of the problems which they experienced previously have not recurred. The main ongoing problem involves the occasional blockage of water flow by air pockets in the water pipe. According to Mr JM Engwicht, even when water was drawn from the Blacks' weir, the flow was interrupted by air because during the summer months there was a capacity to draw more water into the pipeline than the spring was producing. It would take 1 to 2 days to completely free the lines of air and so restore the regular flow of water through the pipes. Mr JM Engwicht said that the water which is drawn by the appellants from their weir is sufficient to serve the domestic and cattle watering requirements on the appellants' property. The house is connected to the pipeline from the appellants' weir so that people in the house can be alerted the moment that there is a break in the supply of water and action can be taken to restore the flow. There is no water storage near the house for domestic purposes. Stock are watered from turkeys nests off the pipeline. The turkeys nests would provide a back-up water supply for approximately 40 days if the pipes or spring were to fail. They also provide a supplementary source of water during the hotter drier months when the amount of water from the spring is insufficient to meet the daily requirements of approximately 25,000 gallons of water. A 5,000 gallon tank at the end of the pipeline takes approximately one day to fill. Evidence was given by a number of witnesses that the dispute between the neighbours was longstanding and ongoing. It is neither necessary nor appropriate to deal with that evidence other than in a summary way. Some observations will suffice. First, complaints have been made to officers of the Commission by the Blacks about the use of water by the Engwichts and by the Engwichts about use of water by the Blacks. The Commission has investigated many of the complaints and officers had made various observations and measurements. The dispute has been costly to the Commission and may have taken the equivalent of one year of an officer's time over the past 20 years or so. Second, it was suggested at the hearing that, from time to time, the Blacks may have drawn off more than their share of the water. Those assertions were not tested and -- 6 of 32 -- 7 the evidence was equivocal. The Blacks gave no evidence and were not represented at the hearing. Mr Parks sought to invoke the rule in Jones v Dunkel ((1959) 101 CLR 298) to draw an adverse inference from the lack of evidence from the Blacks. As the learned authors of Cross on Evidence point out, the most difficult aspect of the rule in Jones v Dunkel turns on the failure to call non-party witnesses. The rule cannot be applied to the non-calling of a witness unless it would be natural for the party to call the witness, or the party might reasonably be expected to call a witness, or the missing witness would be expected to be called by one party rather than the other (see Cross on Evidence, 4th Australian Edition, 1991, paragraph 1215). The Blacks are not parties to the present proceedings. There is no need for this Court to make a finding, or even to express a view, about the allegations made about the Blacks. Consequently there was no need for them to be called. The assertions and the limited evidence about them merely served to demonstrate a reason why the appellants are in dispute with the Blacks. That evidence, in effect, lends support to the written and oral evidence given on behalf of the Commissioner as to the course of the dispute between the neighbours. Third, admissions by Mr JM Engwicht that he had taken direct physical action to stop the flow of water from a weir to the Blacks property (action which Mr Parks euphemistically described as "self-help") points to both the nature of the relationship between the neighbours and the lengths to which Mr Engwicht was prepared to go to ensure that the Blacks did not obtain water to which he believed he was entitled. In Mr JM Engwicht's view, the appellants need do nothing more than they have done to date to demonstrate equity in the use of the spring waters. He suggested that the provision of an orifice in the wall of the appellants' weir should have been sufficient for that purpose. The Commissioner does not agree and has decided to include the additional Special Terms in the License so that the equality of access to the water can be more readily demonstrated. Special Terms for the License The License was renewed on several occasions from expiry dates of 31 March 1983, 31 March 1986 and 31 March 1989. Following the expiry of 31 April 1992, the License was renewed on 24 June 1992 and amended by the addition of the Special Terms. It is the License in its amended form (Number A W35689 to expire on 30 April 1995) which is the subject of these proceedings. -- 7 of 32 -- 8 The Schedule of Terms for the License includes clauses 3.001-3.007 which are substantially the same as those in terms 1 - 8 of the original license. Term 9 of the original license is not repeated, but the following Special Terms are included: "SPEC1The licensee shall install and maintain to the satisfaction of the Commissioner or his district representative within a period of 60 days from the date of issue of this amended licence, a flow sharing device to be used in conjunction with the licensed works to provide for equal distribution of available surface flows. SPEC2The flow sharing device will be as detailed on Water Resources Commission Plan CQ-A1-5823 dated 12/12/1991. SPEC3The flow sharing device will be supplied by and will remain the property of the Commissioner of Water Resources. SPEC4The flow sharing device will not be interfered with or repaired by the licensee without first seeking the prior approval of the Commissioner or his district representative." The background to and reasons for those Special Terms are set out in detail in the written statement by Mr Krebs (Exhibit 6). In summary, his evidence was that negotiations were entered into for the provision of a flow sharing device to "remedy apparent difficulties with the operating characteristics of the appellants weir, specifically the manner in which it makes downstream releases for the benefit of the existing downstream water users, RW and BM Black". The negotiations were unsuccessful and it was decided to amend the terms of the License "to force the provision of an equitable sharing mechanism". According to Mr Krebs, the works "would result in the two recipients of flow from the [appellants'] weir receiving supply under equal hydraulically balanced arrangements". The basic reason for imposing the Special Terms is "the desire to create at the weir an arrangement whereby equitable sharing of the available spring flow can be both achieved and clearly demonstrated." -- 8 of 32 -- 9 Mr Bucknell said that the problem for the Commission was finding a way of equitably distributing the water from the spring. In his view, although the proposal contained in the Special Terms was "a bit of a harsh sort of way of doing it", the proposal was the most equitable way of resolving the issue because of the personalities involved (although he considers that pipes to both properties should be connected to the device). Indeed, as early as 1978 he had proposed the installation of a divisor box. The divisor box proposal The proposed flow sharing device (the "divisor box") is described in words and by use of a diagram in Exhibit 6. One of the two outlet pipes from the appellants' weir would be sealed and the other 80mm outlet pipe would be connected to a divisor box set on a cement pedestal near the downstream base of the appellants' weir. The box would contain three compartments. Water would collect first in one compartment then flow in equal quantities into the other two compartments by way of a notch or recessed weir compartment. A pipeline connected to the second compartment would enable water to be drawn for use on the appellants' property. Water from the third compartment would flow into the Blacks' weir from which water would flow by gravity pipeline to the Blacks' property. Any surplus water would flow over the Blacks' weir into Blackwater Creek. The appellants oppose the requirements imposed by the Special Terms, both because (as indicated earlier) they believe that nothing further is necessary to provide and to demonstrate equitable access to the water, and because they believe that they will suffer a detriment which would not be shared by the Blacks and that the Blacks may secure some advantage from those Special Terms. First, the appellants contend that the Blacks would benefit from both the flow of water from the divisor box into the Blacks' weir and from any seepage from the appellants' weir into the Blacks' weir. That seepage, although measurable, was on at least one occasion assessed to be negligible. Mr Engwicht argued that, if the Blacks are permitted to draw water from the Blacks' weir and that weir is filled from the soakage water as well as water from the divisor box, access to and use of water is neither halved nor seen to be halved. Second, the appellants consider that they will be disadvantaged because there will be a 10 centimetre drop to where they will be able to draw water from the divisor box. The amount of water flowing through their pipe would be reduced because the divisor box would lower the head. It would also increase the management of the system because there would be a small reservoir at the divisor box, whereas there is a substantial reservoir -- 9 of 32 -- 10 (approximately 1,000 gallons) in the weir behind the pipe. Mr Krebs conceded that if water is taken from the divisor box rather than directly from the appellants' weir, the appellants would lose the direct benefit of the expanse of 1,000 gallons in storage in favour of a 15 gallon source drawn from the larger reservoir. Any comparable reservoir benefit could only be gained by installation of a header tank. A third and related concern involves air blockages in the water pipe. As noted earlier, problems occur when the flow of spring water drops below the rate at which water can be drawn into the pipe from the appellants' weir. The pipeline comes down a hill and over a ridge and there is a tendency for air to collect in the high spot in the pipe. There was evidence from Mr Bucknell that the use of the appellants' weir with its storage capacity is less likely than the use of a divisor box to lead to problems of air build-up in the pipe. According to Mr JM Engwicht, air problems could only be avoided if the water is dropped a further two metres into a reservoir from which the pipeline would start. That drop will apparently affect water pressure at the house and further along the pipeline. Mr Bucknell supported the contention that the installation of a divisor box may result in some cost or inconvenience to the appellants. He could "imagine that it could make management a little harder". Although the air can be released fairly readily by use of a tap on the line, the appellants would need to become aware promptly of the build-up of air, and of the consequent interruption of the water flow, so that remedial action could be taken. The evidence concerning the pipe to the house indicates that such a mechanism is already in place. If a constant flow of water through the pipe could be ensured, the management of the water, especially for stock watering purposes, would be much improved. Mr Bucknell also suggested that one way of overcoming the problem created by the divisor box would be to put at the top of the ridge a water tank with a capacity of equal to or greater than that of the appellants' weir, perhaps sufficient to meet the requirements for the property for half to one day. The problems caused by air in the pipe will not be created by the installation of a divisor box. They already exist, as Mr Bucknell, Mr RM Engwicht, Mr JM Engwicht and Mrs SP Engwicht testified. Those problems may be exacerbated by mandatory and exclusive reliance on the divisor box. Installation of a back-up tank on the ridge may be of some present benefit to the appellants. The divisor box may (to a degree not yet quantified) make the installation of a tank more desirable. The appellants' major objection is to the additional cost which they say they will -- 10 of 32 -- 11 incur to ensure that the new system will work, primarily the cost of installing a tank with capacity to deal with the problems just described. Mr JM Engwicht estimated that the cost of installing a 3,500 gallon fibreglass tank on the other ridge, to be gravity fed from the weir, would be in the order of $10,000. A tank of that size would be an appropriate, if not the cheapest, tank to install for this purpose. It would enhance the buffering arrangements already in place on the appellants' land and would give a greater degree of operational flexibility. A storage tank would enable the appellants to accommodate fluctuations in flow from the spring to the divisor box and any changes that the appellants might make from time to time to the distribution facilities. Of course, although the installation of such a tank might be appropriate in all the circumstances, only 1,000 gallons of its capacity could be said to be by way of substitution for the reservoir capacity of the appellants' weir. The Commission has offered to provide the appellants with technical assistance in the sizing, locating and testing of an offstream header tank (see correspondence of 16 January, 1992 in Appendix 9 in Exhibit 6). -- 11 of 32 -- 12 The cost of providing, constructing and installing the divisor box facility will be borne by the Commission. Mr JM Engwicht stated that he had been informed by a Commission representative that the Commission would supply the divisor box, give technical advice and assist in the installation of the box. That was confirmed in written and oral evidence by Mr Krebs and is, in part, implicit in Special Term 3 of the amended License. The Commission is willing to take the unusual step of committing public money to meet the cost because it sees this as a practical way of resolving not only a dispute between neighbours but a dispute which has taken up resources of the Commission for many years. On behalf of the appellants it was suggested that the optimum solution to the dispute about access to water would be to have a divisor box from which they and the Blacks would draw water. No water would be drawn other than from the box. Mr JM Engwicht said that the appellants would accept such a term on the License. Mr Krebs pointed to a number of practical difficulties in getting to the stage where the Blacks would take their water directly from the third compartment of the divisor box. In accordance with their present licence, the Blacks have access to water that flows into the Blacks' weir. The divisor box will ensure that (assuming the appellants take the half of the water to which they are entitled) the Blacks will have access to the remaining half of the spring water flowing from the appellants' weir. This is not a case about joint licensing of a weir or other facility. Although the surrounding circumstances provide a context for the imposition of the Special Terms, those terms must be considered as applicable only to the appellants and so must be assessed accordingly. I turn now to the grounds of appeal. Grounds of Appeal The Notice of Appeal against the Commissioner's decision to include the Special Terms in the amended License lists the following grounds of appeal: 1.There was not any or any proper observance of the rules of natural justice. 2.The statement of grounds as to the refusal of acceptance of those matters as set out in the show cause process was not in clear terms and further, ambiguous. -- 12 of 32 -- 13 3.In exercising his discretion the Commissioner has not considered and/or considered in a proper manner all alternatives reasonably available in the present matter. 4.The decision is to the detriment of the applicant as riparian owner as against a non-riparian owner, in the absence of any special circumstances. 5.In all the circumstances of the present matter the Commissioner lacked statutory power to make the decision. 6.Alternatively, the Commissioner has not acted in accordance with the provisions of the Water Resources Act 1989 and regulations pertaining thereto and further in accordance with general principles of law. Section 4.26 of the Act provides, in effect, that the appellants are restricted to those grounds of appeal and that the burden of proof of each of the grounds lies on the appellants. The relief which the appellants seek is an order from this Court that the decision of the Commissioner is revoked. They do so in the hope that, having obtained such an order, the Commissioner will decide that the divisor box be installed and that both the appellants and the Blacks be restricted to drawing water only from the divisor box. For present purposes Mr Krebs is to be treated as if he were the Commissioner, as he is the officer authorised by the Commissioner to exercise many of the Commissioner's powers and authorities and to perform specified functions and duties of the Commissioner. A copy of the instrument of delegation dated 1 March 1990 was Appendix 14 in Exhibit 6. The grounds of appeal will be considered in the order listed in the Notice of Appeal, except that ground 5 will be considered first. Lack of power to add special terms to the License The appellants contend that, in all the circumstances of the present matter, the Commissioner lacked statutory power to make the decision to add the Special Terms to the License. The argument involved the interpretation and application of sections 3.11, 4.19, 4.21 and 4.25(1)(b) of the Act. -- 13 of 32 -- 14 The provisions governing the renewal of licences are contained in section 4.21 of the Act. The Commissioner, upon consideration of an application for renewal, must notify the applicant in writing that the application is granted (either absolutely or subject to variation) or that the application is refused. Section 4.21(2)(a)(ii)(A) provides that the application may be granted "subject to the variation of the licence by ... the ... revocation of a term to which it is subject or the addition of a further term". In this case the Commissioner has issued a renewal with respect to the License with the revocation of the previous term 9 and the addition of the Special Terms. The Commissioner could have amended the License at any time during its term. Section 4.19(1)(f)(vi) provides that a licence under the Act may be "amended, modified or varied, by the Commissioner during the currency thereof" and section 4.19(2)(a) empowers the Commissioner, "of his own motion or upon application duly made, during the currency of a licence, [to] amend, modify, vary or revoke a term to which that licence is subject or add thereto a further term". Those provisions confer on the Commissioner the power to amend the License by the addition of terms, either during a period when it is in force or when a renewal of the Licence is granted. The next question is whether the Commissioner had power to impose the Special Terms in issue here. Mr Grealy pointed to section 3.11 of the Act as a possible source of that power. Section 3.11(1) gives the Commission and the Commissioner the "powers, authorities, functions and duties conferred or imposed upon it or him by or under this Act or any other Act". Section 3.11(2)(d) gives the Commission particular power to "construct, maintain, manage, control and operate works for ... regulation, control and maintenance of the flow of water". That power, and each of the other powers mentioned in paragraphs (a) to (f) of subsection (2), may be exercised "with the approval of the Governor in Council". There was no suggestion that the approval of the Governor in Council had been sought or obtained for the special terms in issue here. That does not necessarily mean that the Commissioner lacks power to impose the Special Terms nor that the purported exercise of power was procedurally flawed, but only that the Special Terms cannot be supported by reference to section 3.11. There is support elsewhere in the Act for the Commissioner's action. Section 2.1 of the Act vests in the Crown the right to the use and flow and control of water in a -- 14 of 32 -- 15 watercourse that flows through or past the land of two or more owners or occupiers (as is the case with Blackwater Creek) or a spring that is situated with or abuts the land of two or more owners or occupiers (as is the case with Ardurad Spring) and water that is conserved by a weir constructed in, on or over such a watercourse or spring. That right to the use, flow and control of water is vested in the Crown subject to the rights of an owner or occupier of land abutting the banks of a watercourse or spring or a weir under the control of the Commission or Commissioner to take water therefrom, and to the rights of licence holder (section 2.2). The Commission represents the Crown and has all the powers of the Crown (section 3.2(3)). For the purposes of the Act the Commission may design, construct and provide works, and may construct works for the supply of water to land or premises or to measure and ascertain the extent of that supply (section 3.13(2)(a), (b)(iii)). All works that are constructed by the Commission under the Act in any watercourse, spring or water storage are the property of the Commission (section 3.7). The flow sharing device described in the Special Terms has been designed and would be constructed and provided by the Commission. It would be supplied by and remain the property of the Commission. Could the Commissioner make it a term of the License that such works be constructed and installed? For the Commissioner it was submitted that he had power to do so pursuant to section 4.25 of the Act. This section empowers the Commissioner to (among other things) amend or vary a licence in certain circumstances. Many of the provisions of that section are clearly inapplicable to the present case. As I understand it, the Commissioner relies on section 4.25(1)(b) which provides that, where the Commissioner "is satisfied or believes on reasonable grounds that ... there has been, since the date of grant or renewal of the licence, a change in circumstances necessitating amendment of a term of that licence or the imposition of a further term", the Commissioner may take action leading to the Commissioner amending the licence. The question in this case is whether the Commissioner was so satisfied or could reasonably have formed that belief in respect of the License. Most of the evidence in support of the Commissioner's contention is found in Exhibit 6. That document chronicles the history of the dispute, the representations made to politicians and officials, the various options for securing equitable access to water which were considered by the parties and their legal advisers, and the lack of agreement to date about what should be done. As noted earlier, the License was granted in February 1980 -- 15 of 32 -- 16 and was renewed from expiry dates of 31 March in 1983, 1986 and 1989. The dispute waxed and waned but, by Mr Krebs' account, the issue of equitable access to the spring supply "gained further momentum" in 1988 when a firm of solicitors acting for the Blacks prepared a draft agreement concerning arrangements whereby both parties would agree to the installation of a control structure which would cause an equal division of the spring flow. The proposed structure was to be an automatic flow control device to be constructed immediately below the appellants' weir. It would be constructed and used pursuant to a waterworks licence in the joint names of the Blacks and the Engwichts. Part of the proposed agreement was that the appellants would not apply to have the License renewed when it expired on 31 March 1989. Although the Commission did not direct either party to enter into the agreement, the Commission did offer technical assistance with the design of possible devices. Agreement between the parties was not reached. There was evidence that, when the parties did not reach agreement, a permanent release facility was further considered as a means of providing a measure of continuity of supply out of the appellants' weir. This led to the modification of the blanked off outlet from the appellants' weir by the installation of an orifice plate on 27 July 1989. This plate allowed a calculated flow of 95,000 litres per day (or 1.102 litres/second) to pass into the Blacks' weir at weir full conditions. According to Mr Krebs, the orifice plate approach "was deemed to represent a reasonable alternative to the previously proposed control structure which could not be universally agreed to." The further alternative of installing meters to the respective offtakes was not favoured or pursued because of difficulties in obtaining a meter which would operate effectively under the prevailing conditions. Despite the Commission's (and, apparently, the appellants') view that the orifice and the other facilities are sufficient to provide the Blacks with access to half of the spring water, the Blacks continued to express concern to the Commission, the Minister for Water Resources and the Parliamentary Commissioner for Administrative Investigations (Ombudsman). Tests of the orifice flow sharing arrangements were made during the summers of 1989/90, 1990/91 and 1991/92. Officers of the Commission visited the weir site on a number of occasions to investigate the state of the spring and the sharing of the water supply. The visits were normally in response to complaints by the Blacks that the orifice -- 16 of 32 -- 17 failed to deliver their rightful share of the flow. The measurements undertaken by the Commission demonstrate that, on some occasions less than half the flow was passing through the orifice and on other occasions more than half was passing. Most significantly, at times when the water in the appellants' weir is drawn down so that it was less than half full, less than one half of the flow was seen to be passed downstream and so the Blacks may have been seen to be disadvantaged. As noted earlier, the appellants were also disadvantaged at those times because air was likely to be drawn into their gravity diversion line thereby causing blockages and a significant loss of supply. The Commission concluded that the orifice pass flow facility was not providing a long term solution to the sharing arrangements. It was serving a purpose most of the time but, at critical low flow times, it failed to demonstrate clearly an equitable distribution. Due to the fluctuating weir level occasioned by either variations to the rate of spring flow or changes in the rate of diversion by the appellants' gravity pipeline it was not possible to demonstrate that both the appellants and the Blacks were receiving equal access to the supply. The disputes between the neighbours were likely to continue, to their detriment and to the detriment of the Commission. The history of dealings between officers of the Commission, the Blacks, the appellants and others concerning the 1988 draft agreement and then after the installation of the orifice plate in July 1989 convinced the Commissioner that the Blacks and the appellants were unable to agree on the best means of ensuring and demonstrating that the spring water supply was shared. As well as the difficulties in demonstrating that equitable sharing was occurring in a system whereby one party received the benefit of what came out of the orifice while the other took an unknown flow down a closed conduit, there were allegations of interference to either the orifice or the gravity pipeline causing diminishment of supply. According to Mr Krebs, no conclusive evidence was ever obtained to indicate either if interference had occurred or who may have perpetrated the action. -- 17 of 32 -- 18 For the purpose of invoking section 4.25(1)(b), the question is whether the Commissioner was satisfied or believed on reasonable grounds that there had been since the date of grant or renewal of the License "a change in circumstances necessitating amendment of a term of that licence or the imposition of a further term". The answer lies, in part, in determining how broadly the expression "change in circumstances necessitating amendment" is to be read. Accepting that, in the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation (Acts Interpretation Act 1954, section 14A(1)), it is appropriate to read the expression fairly broadly. In particular, the word "change" should be read as meaning "variation; alteration; modification" and "necessitating" as meaning "to compel, oblige, or force" (The Macquarie Dictionary, 2nd edition). The test is a high one. It is not sufficient to say that a change of circumstances is such that an amendment or addition of a term of a licence is convenient or desirable. More is necessary. The evidence discloses that, despite the installation of the orifice plate in July 1989 (itself a change in the facilities for regulating the supply of water), the discontent or dissatisfaction of the neighbours did not dissipate. Indeed it seems that there was increasing dissonance such that the Commissioner was satisfied, and had reasonable grounds for believing, that there had been a change in circumstances since the grant or renewal of the License sufficient to oblige him to take action in an attempt to force a resolution of the matters by imposing the further Special Terms on the License (cf McOmish v McOmish [1968] VR 524 at p 526 per Gowans J; Lloyd v Lloyd (1964) 6 FLR 256 at pp 258-9 per Crawford J). The Commissioner had the statutory power to impose the further Special Terms. Accordingly, the appellants have failed to prove this ground of appeal. Natural justice The appellants submit that there was not any or any proper observance of the rules of natural justice. This ground of appeal, as explained by Mr Parks, is based on a contention that the appellants, as licensees, were not given any or adequate opportunity to be heard by the Commissioner (or his delegate) about the Special Terms. Mr Parks also submitted that the Commissioner was obliged to carry out appropriate investigations and inquiries into such things as the allegations concerning aspects of Mr Black's operations, particularly his use of water, which may have been behind complaints which he is said to have made about the inadequacy of water to the Blacks' property. Mr Parks submitted that, rather than investigate the operations and needs of both sets of neighbours, the Commission had concentrated on the appellants and complaints made about them. This -- 18 of 32 -- 19 "unwittingly unfair procedure" which has "unconsciously shown bias" with respect to the appellants had led, he submitted, to the Commission adopting the easier approach of placing on the appellants the practical burden of resolving the problems. Natural justice is an often invoked but imprecisely defined concept. Cases abound in which a party has sought to have an administrative decision judicially reviewed or revoked because of an alleged failure by the decision-maker to observe the rules of natural justice. In light of my conclusions about the facts in this case, it is not necessary to make a comprehensive review of the law on this point. However, as it was the first ground of appeal and was pressed by the appellants' legal representative, there may be some benefit in referring to some of the authorities to set the context within which the evidence should be assessed. More than a century ago the Earl of Selborne stated, in a case concerning an administrative decision in a matter of local government: "No doubt in the absence of special provisions as to how the person who is to decide is to proceed, the law will imply no more than that the substantial requirements of justice shall not be violated. He is not a judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice that he will proceed with the matter, and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There could be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice." (Spackman v Plumstead Board of Works (1885) 10 App Cas 229 at p 240; quoted with approval in General Medical Council v Spackman [1943] 2 All ER 337 at p 343 per Lord Wright). More recently Megarry V-C explained: "If one accepts that 'natural justice' is a flexible term which imposes different requirements in different cases, it is capable of applying appropriately to the whole range of situations indicated by terms such as 'judicial', 'quasi-judicial' and 'administrative'. Nevertheless, the further the situation is away from -- 19 of 32 -- 20 anything that resembles a judicial or quasi-judicial situation, and the further the question is removed from what may reasonably be called a justiciable question, the more appropriate it is to reject an expression which includes the word 'justice' and to use instead terms such as 'fairness', or 'the duty to act fairly'." (McInnes v Onslow Fane [1978] 3 All ER 211 at p 219) As the High Court has stated in recent decisions, the rules of natural justice are now called procedural fairness (Kioa v West (1985) 159 CLR 550 at pp 584-5 (per Mason J), 600-601 (per Wilson J), and 632 (per Deane J); cited in Ainsworth v Criminal Justice Commission (1992) 66 ALJR 270 at p 273 (per Mason CJ, Dawson, Toohey and Gaudron JJ)). In general terms, the law in relation to administrative decisions has now developed to a point where there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations subject only to the clear manifestation of a contrary statutory intention (Kioa v West (1985) 159 CLR 550 at p 584 per Mason J). Certainly a duty of procedural fairness arises where the power involved is one which may "destroy, defeat or prejudice a person's rights, interests and legitimate expectations" (see Ainsworth v Criminal Justice Commission (1992) 66 ALJR 270 at p 276 (per Mason CJ, Dawson, Toohey and Gaudron JJ), at pp 278, 283 (per Brennan J); Annetts v McCann (1990) 170 CLR 596 at p 598 (per Mason CJ, Deane and McHugh JJ)). The questions to be asked, or the approach to be taken, in a particular case can be gleaned from a number of recent decisions of the High Court. The following passage from the judgment of Mason J in Kioa v West provides guidance. "Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. ... What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision-maker is acting. ... In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and -- 20 of 32 -- 21 adapted to the circumstances of the particular case. The statutory power must be exercised fairly, ie, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations. ... When the doctrine of natural justice or the duty to act fairly in its application to administrative decision-making is so understood, the need for a strong manifestation of contrary statutory intention in order for it to be excluded becomes apparent. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? ... [I]n general, it will be a matter of determining what the duty to act fairly requires in the way of procedural fairness in the circumstances of the case. A resolution of that question calls for an examination of the statutory provisions ..." ((1985) 159 CLR 550 at pp 584-5) The procedural steps to be followed in the application for and grant of the renewal of a licence are set out in section 4.21 of the Act. A comparison of that section with the procedures leading to the grant of a licence (sections 4.17 and 4.18) suggests that the renewal process is a less detailed and complex one than that preceding the grant of a licence. Section 4.17 enables the Commissioner to obtain information from the applicant for a licence including, where appropriate, information with respect to works which, in the Commissioner's opinion, "affect or are likely to affect the rights and interests of persons other than the applicant". Having issued a requisition for such information, the Commissioner may not deal with the application until there has been compliance with the requisition or the information requested has otherwise been furnished. In the case of an application for a licence other than a licence specifically exempted from the notice requirement, the Commissioner must cause a notice of the application to be published in a local newspaper inviting the lodgment of objections to the application. The Act expressly confers on certain categories of persons the eligibility to object to the granting of the application. Where an objection is made, the Commissioner must cause inquiry to be made into specified matters, including the effect that the granting of the application will have or is -- 21 of 32 -- 22 likely to have on the entitlements or requirements of others nearby. For the purposes of such an inquiry, the Commissioner (or a person duly appointed by the Commissioner) has extensive powers, authorities, protection and jurisdiction. Upon the inquiry, the Commissioner may grant the application (absolutely or subject to modifications or variations) or may refuse the application. Section 4.19 of the Act empowers the Commissioner to determine the terms subject to which a licence is issued. Those sections provide a detailed scheme pursuant to which the Commissioner becomes (or at least is capable of becoming) aware of facts relevant to the decision whether a licence should be granted and, if so, to which terms it should be subject. The Commissioner may, during the currency of a licence, amend, modify, vary or revoke a term to which that licence is subject or may add a further term to the licence. Only in certain circumstances does the Act require that the requirements of section 4.17 or section 4.18 apply to such a change. In particular, sections 4.17 and 4.18 apply and extend to an application by a licensee to have a term amended, modified, varied or revoked where the application relates to or includes an increase of a benefit to which the licensee is already entitled or to a further benefit (section 4.19(2)(c)). An application by a licensee, during the currency of that person's licence, for an amended licence to provide for alterations in or extensions to the licensed works (including increased entitlements to water) must be dealt with as if it were an application for a licence in the first instance under section 4.17 (section 4.20). The statutory provisions just summarised can be compared with the relatively brief provisions for the procedures to be followed in the application for and granting of the renewal of a licence. A written application for renewal must be furnished (with any required fee) to the Commissioner by the relevant date. The Commissioner must consider the application and may either grant the application or refuse it. It should be noted that: (a)a licence under the Act remains in force (unless sooner cancelled, revoked or suspended) for a period determined by the Commissioner (section 4.19(1)(e)); and (b)once an application for renewal has been furnished to the Commissioner, the licence remains in force: -- 22 of 32 -- 23 (i)until the applicant has been notified of the Commissioner's decision on the application; or (ii)where the application is refused and the applicant has appealed against that decision, until the date on which notification of the final outcome of the appeal has been provided to the applicant (section 4.21(1)). Where a licence granted under a statute is due for renewal it may, strictly speaking, be correct to say that the renewal is a fresh grant of a new licence and not a continuance of the old (see Ex parte Fanning; Re Commissioner for Motor Transport [1964] NSWR 1110). However, where an application for renewal of a licence or approval is being considered, the decision maker is subject to the requirements of natural justice and should give the applicant an opportunity to be heard before a decision not to renew the approval is made (see FAI Insurances Ltd v Winneke (1982) 151 CLR 342 and cases cited therein). The non-renewal of a licence will, in many cases, be a more serious matter than the refusal to grant a licence in the first place. Generally speaking, the starting point would be that an applicant for renewal of a licence has a legitimate expectation that the licence will be renewed when the statutory power is entrusted to a statutory authority. In Canada it has been held that a new condition ought not to be attached to the renewed licence without first offering the holder an opportunity to make representations about it (Re CTV Television Network Ltd and Canadian Radio-Television and Telecommunication Commission (1980) 116 DLR (3rd) 741). Under the Act, a licensee who is an applicant for renewal has rights conferred by the licence which continue until they are formally revoked, varied or renewed unchanged by the Commissioner. Beyond that the only right which a licensee has is that the application for a renewal of the licence will be considered and dealt with by the Commissioner in accordance with law. Although not entitled to the renewal of a licence it might be thought that, subject to the licensee having complied with the terms of the licence and there having been no significant change in circumstances such as would cause the renewal to be refused, the licensee would have a legitimate expectation that the renewal would be granted. In coming to that view I have considered the following passage from the 1972 decision of a member of the Land Court, Mr S Dodds, in LP Shooter v The Commissioner of Irrigation and Water Supply concerning the renewal of an irrigation license under section 12 of the Water Act 1926 (as amended): -- 23 of 32 -- 24 "Then, what a licensee gets under the Act is only a license for a period. At the end of that period he must apply for renewal and the Act, as amended in 1964, clearly shows that renewal is not as of right. The Commissioner has many alternatives to renewal, and must consider the application to see if any of the alternatives should be applied. One of the alternatives is refusal of the license and others are reduction in amount of water or in the amount of land irrigated. ... Here the words are plain and unambiguous and the Commissioner's duty when considering an application for renewal of a license is clear. It is true that there seems to be no right of objection to a renewal application, but I think the Statute plainly enough requires the Commissioner to consider all alternatives in the light of all requirements on the stream at date of renewal, including applicants desiring a share of the water. To do otherwise, to adopt the view that a licensee, once he constructs his licensed work, obtains a vested interest which should only be interfered with if he misuses it or is guilty of misconduct, so that he can regard his license as something he can expect to be renewed as of right is again to put the clock back and revive the mischiefs in the repealed Act which the present Act set out to cure." ((1972) 39 CLLR 11 at p 18; quoted in KG and EK Moir v The Commissioner of Water Resources A91-82, decision of Land Court (Mr DM White) dated 3 July 1992, unreported). -- 24 of 32 -- 25 The passage should be read in light of the requirement that an applicant for renewal is entitled to procedural fairness if the Commissioner proposed either to significantly vary the terms of the Licence or to refuse the application. I note that in 1976, some years after the decision in Shooter's case, the Water Act 1926 was amended to ensure that a licence remained in force until the Commissioner had notified the applicant of his decision on the application and any appeal duly instituted against the decision has been finally determined (see Water Act Amendment Act 1976, amendment to section 12(6) of the Water Act 1926). Section 12, as amended, was substantially re-enacted in section 4.21 of the Act. The Special Terms sought to be included in the License would not result in an increase in the appellants' legal entitlements to water. At most they would ensure that the appellants would have access to the volume of water to which they are already legally entitled. Rather, this is a situation where a person's rights, interests or legitimate expectations would be affected and may be prejudiced as a consequence of a decision of an administrative nature made by a statutory officer exercising powers conferred by a statute. The appellants are entitled to be accorded procedural fairness by the Commissioner. The Act does not exclude procedural fairness. Indeed, section 4.25, on which the Commissioner relied as source of power, provides a model of procedural fairness for cases such as this. The Commissioner was obliged to inform the appellants that he proposed to amend the License by adding the Special Terms. The appellants were entitled to be heard in response to the proposed amendment and to have their views considered and given due weight by the decision-maker. The Commissioner was entitled to have regard to other relevant matters, such as the entitlements of others to water from Ardurad Spring and the difficulties which either or both sets of neighbours were experiencing in gaining continuous access to the amount of water to which they were entitled. It was not, in my view, irrelevant to the Commissioner's decision, that disputes about the exercise of the respective licensees' rights were involving officers of the Commission to an extent that may have interfered with the performance of the Commission's other functions and the discharge of the Commission's duties elsewhere. The Commissioner was entitled, but not obliged as a matter of procedural fairness, to consider all options other than retaining the status quo or imposing the particular requirements contained in the Special Terms. No suggestion was made that there was a lack of natural justice because, in all the -- 25 of 32 -- 26 circumstances of the case, the Commissioner was effectively a judge in his own cause. While the imposition of the Special Terms may lead to a reduction in calls on the Commission to investigate and resolve disputes between the appellants and the Blacks, the decision cannot be challenged on the basis that the Commissioner was (or may fairly be suspected to have been) biased. Before imposing the Special Terms, the Commissioner invoked and complied with the "show cause" procedure in section 4.25 of the Act. The relevant parts of that section provide that where the Commissioner is satisfied or believes on reasonable grounds that there has been, since the date of grant or renewal of a licence, a change in circumstances necessitating amendment of a term of that licence or the imposition of a further term, the Commissioner may by notice in writing to the licensee call upon the licensee to show cause why the licence should not be amended. Where the licensee fails to show sufficient cause, the Commissioner may amend or vary the licence. The use of section 4.25 as a source of power for the imposition of the Special Terms was discussed earlier in these reasons. It is now necessary to look at the steps followed by the Commissioner pursuant to section 4.25 to determine whether they and any other actions accorded procedural fairness to the appellants. Copies of the relevant documents were in evidence and form part of Exhibit 6. The possibility of installing a divisor box was raised with the appellants in 1981 and, it seems, had been mentioned as early as 1978. When the idea of a control structure was discussed again with the appellants in late 1991 they indicated that they did not feel that such a structure was necessary and they would not volunteer to install such a modification to their licensed weir, despite the Commission's offer to design, construct and install the facility at the Commission's cost. On 16 January 1992, Mr Krebs wrote to the appellants outlining the ongoing difficulties with the appellants' weir (as modified by the orifice) and suggesting that the Commissioner could amend the License by adding four terms in lieu of the term 9. He endorsed the need for an offstream header tank (and offered to provide technical assistance in the sizing, locating and testing of the facility), and called on the appellants to show cause in writing within a nominated period why the License should not be amended to include the additional terms. The proposed terms were set out in full. They included a term that the flow sharing device "will be as detailed on Water Resources Commission Plan CQ-A1-5823 dated 12.12.1991. Alternatively, the licensee may submit a design for a flow sharing device which must meet with the approval of the Commissioner -- 26 of 32 -- 27 or his district representative". Enclosed with the letter were "relevant details of Plan CQ-A1-5823", being various plans and elevations showing the proposed weir box and fittings. The appellants' solicitors replied in writing on 11 February 1992. The "Without Prejudice" letter (which was received in evidence) stated that the appellants agreed to the Commission's proposal subject to certain conditions, including: (a)that both the appellants' line and the Blacks line be attached to the device; and (b)that the Blacks not be permitted to take any water other than from the device. The letter made no reference to any alternative design which the appellants would submit or which, in their view, the Commissioner should consider. In his written reply to the appellants' solicitors dated 29 April 1992, Mr Krebs advised that most of the appellants' conditions were acceptable but that he did not see the two conditions just mentioned as mandatory requirements. In his view, the appellants' rights to an equitable share of the flow would not be enhanced or diminished by the Blacks having a connection to the proposed divisor box. He considered the suggested prohibition on the Blacks taking water from the downstream weir as neither appropriate nor relevant. The appellants would have the right of access to their share of the water. If they chose not to draw their full entitlement, the water should flow downstream for the benefit of downstream landholders with access to the stream, subject to the provisions of the Act. On the basis that the appellants "appear to be substantially willing to accept the Commission's modification proposal for the licensed work", Mr Krebs proposed to "proceed with the next step in the process" by issuing a further show cause notice which restated (in a modified form) the proposed amendments to the License. One of the modifications was to provide that the design of the flow sharing device would be as detailed on Water Resources Commission Plan CQ-A1-5823, and not to provide for the appellants to submit an alternative design. Mr Krebs advised that further action in the matter would depend upon the appellants' requirements (if any) arising from the show cause process. In a letter to the appellants, also dated 29 April 1992, Mr Krebs referred to previous correspondence and to a discussion of "the whole issue ... at length" on the appellants' -- 27 of 32 -- 28 property in the presence of their legal counsel on 27 January 1992. Mr Krebs reiterated his lack of support for two of the conditions on which the appellants' had indicated that they would support the connection of the diversion facility to their licensed weir. He gave reasons for taking that stance. He set out the text of the proposed additional terms (which is the same as the Special Terms) and advised that the Commission remained prepared to supply and deliver the device and provide assistance in its installation, an offer which was made "to assist with the early settlement of the dispute". He called on the appellants to show cause why the License should not be amended to include the additional terms. The subsequent correspondence can be summarised briefly. On 26 May 1992 the appellants' solicitors wrote to Mr Krebs stating that the appellants were adamant that their acceptance of the propose amendments depended on the Blacks' line being attached to the device and that the Blacks be prohibited from taking any water supply other than from the device. The appellants did not accept Mr Krebs' arguments opposing their requirements. Arguments in favour of those requirements were set out. On 12 June 1992 Mr Krebs replied to that letter. He accepted it as being a response to the Commission's show cause letter to the appellants of 29 April 1992, he addressed a number of the matters raised in the letter of 26 May 1992, and he advised that the License would be issued with the additional terms. On 16 July 1992 the appellants were advised by letter that the License was amended to include the four additional terms and was issued on 24 July 1992. The letter served as notice of the Commissioner's decision to amend the License, and advised the appellants of their rights under the Act to appeal to the Land Court. The correspondence just summarised and the course of discussions between the appellants, their solicitors and the Commissioner is clear evidence that the appellants were accorded natural justice, or procedural fairness. Accordingly, the appellants have failed to prove this ground of appeal. Lack of clarity in show cause notice The appellants' second ground of appeal was that the statement of grounds as to the refusal of acceptance of those matters as set out in the show cause process was not in clear terms and further, ambiguous. At the hearing Mr Parks explained that this ground (itself unclearly and ambiguously -- 28 of 32 -- 29 expressed) was included because the negotiations, correspondence and the Special Terms had not clearly stated that the Commission would meet the costs of installing the proposed divisor box. The Commission's intention was clearly stated at the hearing. Indeed Mr Grealy indicated to the Court that he believed he would have instructions to give an undertaking to the Court about this matter. Such as undertaking was not required and, quite properly, Mr Parks abandoned this ground of appeal. Failure to properly consider other options The appellants contend that in exercising his discretion the Commissioner has not considered and/or considered in an improper manner all alternatives reasonably available. The thrust of their case was that there was really only one other option, namely to install a divisor box to which separate pipes to the appellants' property and to the Blacks' property are connected. Under that process any water that was not drawn from the divisor box would go downstream. The appellants submit that that option (which they would accept) was not given proper consideration. The oral and written evidence in this case clearly demonstrates that the practical options (including that favoured by the appellants) and the arguments for and against them have been considered by the Commissioner. The appellants have failed to prove this ground of appeal. Detriment to riparian owner as against a non-riparian owner As noted earlier in these reasons, the spring and the head of Blackwater Creek lie at the border between Portion 11 and Portion 10. The appellants own Portion 11. The Blacks did not, at the date on which the License was renewed in its amended form, own Portion 10. According to Mr Bucknell, Mr Black obtained the lease to Portion 10 at some stage after it had passed from Sirius Creek Coal Pty Ltd. During the cross examination of Mr Krebs, Mr Parks raised questions about the status of Portion 10. There was no direct evidence on the point. It would seem that the lease of Portion 10 expired in July 1992. The Blacks had been offered freehold title to the land and steps (such as surveying) were being taken to facilitate the transfer of title. If the Blacks do not become the owners of Portion 10 then action may be taken to provide rights of access to the spring water to the Blacks as non-riparian owners (see section 4.14 of the Act). I understood Mr Parks to be suggesting that, until the foreshadowed transfer of title to the Blacks is completed, the requirement of a divisor tank is premature. Even accepting those facts, the proposed terms of the License as amended need not be struck down. There was no suggestion of -- 29 of 32 -- 30 any real likelihood of the Blacks not securing continuing rights to the water. I accept that, until July 1992, the Blacks held a lease to Portion 10 and that the lease has expired. Apparently there is in train a process whereby the Blacks hope to obtain title to Portion 10. Mr Parks submitted that at all material times the appellants' riparian rights exceeded those of the Blacks, and that as a consequence the appellants are in a stronger position in terms of their rights to the watercourse. Despite that, Mr Parks submitted, the rights of the appellants are being usurped by another in a lesser position in the sense that, if the License remains as amended, the appellants will suffer detriment because they will have to expend moneys to rectify a problem of the Blacks' creation. Section 4.11 of the Act provides that, subject to section 4.32, an "owner" or an "occupier" of land abutting a spring (in this case, Portions 10 and 11) is entitled to use the water in that spring for domestic purposes and for watering stock without applying for or obtaining a licence for that purpose. Both of the terms "owner" and "occupier" are defined broadly in section 1.4 of the Act. "Owner" when used in relation to land generally means (among other things) the registered proprietor of the land, a lessee from the Crown of that land, and the person who, for the time being, has lawful control of the land. The expression "owner" also includes the occupier of land. "Occupier" means the person in actual occupation of land at the material time or, where there is no person in actual occupation, the person entitled to possession of the land at that time. At the time when the Commissioner made the decision to renew the License subject to the Special Terms both the appellants and the Blacks were "owners" of land abutting Ardurad Spring. Assuming that the process of freeholding the land is proceeding in accordance with the Land Act, then the Blacks are either "owners" or "occupiers" for the purposes of the Act. Subject to sections 4.31 and 4.32, a person commits an offence if he or she constructs works or uses works already constructed in or on a watercourse or spring to take water unless the action is under the authority of a licence under the Act (section 4.13(1)(b)(i)). Section 4.31 empowers the Commissioner to grant to a State government department or to another person or body a permit authorising the taking of water from a watercourse or spring. A permit is subject to certain terms limiting its operation. Section 4.32 provides that, where an owner or occupier of land uses water in a watercourse or spring in accordance with section 4.11, the person must apply for a permit before -- 30 of 32 -- 31 constructing or using works to take water in connection with that use. The Commissioner may grant or refuse the application. In the present case both the appellants and the Blacks have riparian rights under section 4.11 and are licensed to take water from works of the type to which section 4.13 of the Act refers. The Act does not deprive the owners or occupiers of land adjacent to a watercourse of their riparian rights to use water. Rather, the Act expressly preserves riparian rights but gives to the Crown new rights which are superior to, and may be exercised in derogation of, private riparian rights. So far as the use of water is concerned, the only rights which a riparian owner may exercise are those which are specified in the Act or in a licence issued under the Act. (See Nalder v The Commissioner for Railways (1983) 1 Qd R 620 at pp 624-7 (per Kneipp J); Thorpe Ltd v Grant Pastoral Co Pty Ltd (1955) 92 CLR 317 at p 331 (per Fullagar J); Beaudesert Shire Council v Smith (1966) 120 CLR 145 at p 151 (per Taylor, Menzies and Owen JJ); Rapoff v Velios [1975] WAR 27). In the present case the Commissioner has properly exercised statutory powers and the appellants' means of exercising their riparian rights of access to spring water are as specified in the License as amended. Viewed in light of the statutory provisions, the ground of appeal must fail. The real argument in support of the ground is one of policy rather than law. What the appellants seem to be saying is that, because they have a stronger legal interest in land abutting the spring and Blackwater Creek than the interest held by the Blacks (either at the date of issue of the renewed License or presently), the appellants should not, in the absence of special circumstances, have to suffer the detriment arising from the Special Terms. That argument does not convince me that the Commissioner's decision should be revoked. Failure to act in accordance with law As their final ground of appeal the appellants contend that the Commissioner has not acted in accordance with the provisions of the Act and the regulations and further in accordance with general principles of law. At the hearing, Mr Parks did not press this ground of appeal, describing it as a "a bit of a shotgun". Accordingly, no more needs to be said about that ground. Conclusion The appellants have failed to prove any of their grounds of appeal. The -- 31 of 32 -- 32 comprehensively documented history of the dispute, and the submissions of Mr Parks, suggest that the imposition of the Special Terms will not necessarily resolve that dispute. Despite that possibility and the cost which the appellants may incur in attempting to minimise or ameliorate any detrimental consequences to them, the Special Terms should be seen as a lawful and bona fide attempt by the Commissioner to ensure that equity of access to the spring waters can be obtained by the appellants and be seen to be obtained. If, as the appellants suggest, they and their cattle have been surviving on something less than half of the amount of spring water then they stand to gain from the flow sharing device contemplated by the Commissioner. Conversely, if the appellants use all of the water to which they are entitled there may be some reduction in the amount of water available to the Blacks. Whether the appellants will draw off the maximum amount to which they are entitled will depend on the facilities which they have installed (or will install) and use for that purpose. If the appellants draw off less then their share, the remaining water will be available to the Blacks' weir. Any surplus from that weir will overflow into Blackwater Creek and be available to downstream users. But the amount which is drawn off is not the issue. Whether the Special Terms will end the neighbours' dispute is not the issue. The spirit of the Act and the License will be satisfied so long as the appellants have both the legal entitlement and physical means of access to half of the spring water. The appeal is dismissed and the decision of the Commissioner to impose the four Special Terms on Watercourse License No A W35689 issued on 24 June 1992 is confirmed. Member of the Land Court. -- 32 of 32 --