Dowling v Commissioner of Water Resources [1991] QSC 3 [1993] 1 Qd R 70

IN THE SUPREME COURT OF QUEENSLAND No. 1993 of 1990 Before Mr. Justice Byrne BETWEEN: AND: CATCHWORDS: Counsel: PHILLIP JOHN DOWLING and SALLY ROSEMARY DOWLING THE COMMISSIONER OF WATER RESOURCES JUDGMENT - BYRNE J. Delivered the 25th day of January, 1991 D.B. Fraser for applicant Plaintiffs Defendant R.I. Hanger Q.C. with him P.L. Gaffney for respondent Solicitors: Cannan and Peterson for applicant Crown Solicitor for respondent Hearing date: 20th December, 1990 -- 1 of 14 -- IN THE SUPREME COURT OF QUEENSLAND No. 1993 of 1990 BETWEEN: AND: PHILLIP JOHN DOWLING and SALLY ROSEMARY DOWLING THE COMMISSIONER OF WATER RESOURCES JUDGMENT - BYRNE J. Delivered the 25th day of January, 1991 O. 57 r. 2 application Plaintiffs Defendant This application is brought to establish an entitlement to a water licence providing for an annual allocation of 4 70 megalitres of water to the plaintiffs' property near St George without a $141,000 charge imposed by the Commissioner of water Resources. The application On 7 July 1988 the plaintiffs applied to the Commissioner for a licence to use a 750 mm. pump to extract an annual allocation of 1000 megalitres from the Thuraggi Watercourse to irrigate crops of cotton, wheat and soybean. The application was for water harvesting and annual irrigation. Water harvesting rights allow extraction of water supplies regarded by the Commissioner as surplus to existing requirements: as Mr Dowling says, "when the flow of the water ... reaches particular levels". An annual allocation for irrigation is not restricted in that -- 2 of 14 -- 2 way. It authorizes extraction of a stated volume of water from an identified source. On 14 November 1989 the Commissioner issued "Waterworks License" No. 49130 permitting installation of the pump. The licence also accorded water harvesting entitlements. However, the annual allocation for irrigation was refused. The licence, which issued under the Water Act 1926-1987 (sees. 11A and s. 12), contained a set of conditions. These included:- "1.004 The appeal The holder of this license shall pay such fees and charges as are determined by the Commissioner from time to time ... " On 15 November 1989 the plaintiffs appealed against the refusal of the allocation. The appeal had not been heard by 1 February 1990 when the Water Resources Act 1989 relevantly commenced. The new Act repealed that part of the Water Act concerned with Waterworks licences. On 6 April the Land Court allowed the appeal and ordered that:- "Waterworks Licence No. 49130 be amended as necessary to provide·for an annual allocation of 470 Ml ... subject to the usual conditions attaching to such licences in that area." The new licence In September the Commissioner issued "Waterworks Licence" No. A49130. The licence (i) is expressed to be issued under the Water Resources Act; (ii) stipulates 30 September 1992 as its expiry date; and (iii) gives a "nominal allocation" of 4 70 megalitres of water. This licence also contained a schedule of terms, among them:- 11 1.004 The holder of this licence shall pay such fees and charges as are determined by the Commissioner from time to time ... " -- 3 of 14 -- 3 The new licence was accompanied by an invoice from the Water Resources Commission. Subject to the direction of the Minister, that Commission and the Commissioner administer the new legislation: s. 3. 1 Water Resources Act. The invoice claims $141,000 "for the undermentioned services performed by the Commission". These "services" are described as.: "nominal allocation 470 mls x $300.00 per megalitre: $141,000"; charge is responsible for the litigation. The complaints This The plaintiffs do not object to the scheduled conditions of licence No. A49130. The proceedings are brought for two related purposes: first, to obtain a licence issued under the repealed legislation; secondly, for a declaration that the Commissioner is not entitled to charge the $141,000. It is not suggested that the September licence, had it issued under the Water Act, should have contained different terms. Nonetheless the plaintiffs contend that if the licence they are entitled to derives its authority from the repealed Act, that is to their advantage. Section 12 of the Water Act would, they contend, deny a right to impose the charge. The plaintiffs are not so sanguine about the prospects of resisting the charge if the new Act applies to the amended licence. The concern is prompted by s. 14. 19 ( 1) ( a) of the Water Resources Act, by which a water licence: "is subject determines generality prescribed in respect to such terms as the Commissioner including, without limiting the of this provision, payment of the licence fee and other fees and charges of water allocated or taken ... ". -- 4 of 14 -- 4 Unlike s. 14.19(1)(a) of the Water Resources Act, s. 12 of the Water Act does not say that a water licence may be conditioned on payment of "other fees and charges". Anxious that the differently worded new Act may authorize the $141,000 impost, the plaintiffs submit that the old Act does not permit such a charge. Hence their preference to show that they are entitled to a licence regulated by the repealed legislation. Only s. 12 need be considered The Commissioner disputed both the plaintiffs' entitlement to a licence under the old Act and the contention that s. 12 of the Water Act could not justify the $141,000 charge. Accordingly, if the Commissioner has to issue a new licence pursuant to the old statute, it is to be expected that it will also contain condition 1.004 and be accompanied by an invoice for the $141,000. The plaintiffs have therefore secured a proper contradictor of their claims that they are entitled to another licence and that, if such a licence issued, the charge is not authorized bys. 12. For reasons mentioned shortly, advanced for the plaintiffs is the construction of s. 12 not correct. In these circumstances, it is not necessary to decide whether subs. 20(1)(c) or (e) of the Acts Interpretation Act 1954-1989 entitle the plaintiffs to a licence under the Water Act. Nor, as the application was argued, is it desirable to do so. The hearing concluded without reference to New South Wales Aboriginal Land Council v. Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act (1988) 14 N.S.W.L.R. 685 or to the Australian decisions discussed in that -- 5 of 14 -- 5 case and by D.C. Pearce & R.S. Geddes, Statutory Interpretation in Australia, (3rd ed., 1988) pp. 113-114. In the absence of full argument it is preferable not to decide the point. The basis of the charge Before discussing s. 12, the Commissioner's explanation for the charge should be mentioned. Until about a year ago, licences to extract water were granted, amended and extended without contributions from licensees towards the capital cost of providing the water. Small amounts were exacted. Licence holders in the St George irrigation area were obliged by regulation to pay these charges in 1990:- (a) (b) ( i) (ii) (iii) (iv) Water Right Water Supplied in excess of Water Right:- $ per ml. 18.40 Up to Announced Allocation 18.40 100% to 125% Announced Allocation 36.80 Over 125% Announced Allocation 55.20 Out of Allocation Supply 18.40 A new Government _policy resulted in additional charges. The Commissioner deposes that the change was introduced when the Water Act was in force "in order to reflect the value of water supplied, with the money raised from such charges representing a contribution towards the capital cost of providing the water". In effect, he says, this policy adopts a "user pays" concept. As an illustration of the new policy, the Commissioner cites an auction of water rights held at St George in November 1989. The -- 6 of 14 -- 6 plaintiffs were successful bidders at that auction. They bought an additional allocation of 45 megalitres, paying about $375 per megalitre. The Commissioner explains his decision to charge the $141,000 in this way:- "In keeping with the change in government policy regarding the requirement of applicants to pay a capital charge towards the cost of supplying water,the plaintiffs were required to pay the sum of $141,000 in respect of the allocation to them of 470 megalitres of water. This payment is required to be made on a once-only basis, not annually, and the sum of $141,000 was calculated according to a rate of $300.00 per megalitre. I set the rate of $300.00 per megalitre on the basis that it represented the lowest price for which water allocations were purchased at the auction at St. George on 16 November, 1989." Scope of s. 12 Section 12(5) of the Water Act provides:- " Issue of licenses. The license if granted shall be in the form prescribed, and shall be subject to such terms, limitations, and conditions as the Commissioner may determine or consider expedient: Without limiting the generality of the power of the Commissioner to determine the terms, limitations, and conditions to which the grant of a license shall be subject, the Commissioner may subject the grant of a license to all or any of the following conditions:- (a) that the licensee shall install the work for which the license is granted within a period determined by the Commissioner, which period shall be not less than twelve months from the date of the grant of the· license; (b) (where the license is for a work to enable the diversion of water for irrigation purposes) that the licensee after installing such work shall to the satisfaction of the Commissioner beneficially use the water which he is entitled to divert under the license." As I have said, the plaintiffs do not suggest that condition 1 .004 of the licence is beyond the power conferred by -- 7 of 14 -- 7 s. 12 or otherwise unlawful. Their primary case rests on two propositions: ( i) that the condition could not authorize the charge unless s. 12(5) provides for it either expressly or by necessary implication; and (ii) that, on its proper construction, s. 12(5) does not authorize such a charge. The first proposition was not challenged. The second matters. It is as well to mention how the application was fought out. The charge is not said to be beyond power for some such reason as that s. 12 ( 5) requires a demonstrable connection between a charge and the cost of supplying the allocated water. The plaintiffs' case is simply that s. 12(5) does not permit any exaction other than fees ( i) prescribed on the issue of the licence - a charge mentioned ins. 12(9); and (ii) prescribed by regulation "fixing the price for water rights" charges anticipated by cl. 25 of Part II of the Schedule to the Act. According to the plaintiffs, unless the liability to pay it is imposed by regulation, the Commissioner cannot demand any sum on the grant of a licence. If, however, the Commissioner's powers are not so restricted then, as the case was argued, the charge made by the invoice is within power. Now, s. 12 confers wide powers on the Commissioner. There are, however, two specific constraints. He cannot decide on the form of a licence. If the Commissioner grants the application, the licence must be "in the form prescribed": s. 12(5). Next, s. 12(6) limits the duration of a licence. Otherwise, as subs. (5) says, all the "terms, limitations and conditions" attaching to a licence are "as the Commissioner may determine or consider expedient". Subsection ( 5) does mention two particular -- 8 of 14 -- 8 conditions the Commissioner may impose. But reference to them is preceded by words expressly stating that their inclusion is not to limit the generality of the Commissioner's powers to decide on the terms of the licence. So they cannot confine his discretion: cf. George Comanos & Associates Pty. Ltd. v. Fingold Resources Pty. Ltd. (No. 1) [1988] 2 Qd. R. 631, 633; Graham v. Suimin Co. (Australia) Pty. Ltd. [1989] 1 Qd. R. 291, 293. In my opinion, s. 12(5) shows that the Parliament considers that the Act's effective administration and the adjustment of competing demands on the State's water resources justify reposing in the Commissioner significant discretions to fix appropriate conditions for water licences. The contention that those ample powers are impliedly restricted so that no term may require a money payment that is not prescribed by regulation derives no support from the language of s. 12(5). Nor do more general considerations favour according such a narrow operation to the section. Water licences may relate to a wide range of activities throughout Queensland. As. 12 licence may authorize all of these: (i) construction or repair of a "referable dam", an expression defined in s. 3; (ii) construction of works adjacent to a watercourse for water conservation, irrigation supply or drainage; and (iii) taking water obtained by any such "works": see s. 11 . The variety of situations in which a licence is needed makes it unlikely the Parliament intended that the Commissioner could not condition a licence on a payment not provided for by regulation. Some proposals for waterworks or water extraction may involve an unusual financial burden on a State instrumentality: for example, in construction, supervision -- 9 of 14 -- 9 or inspection of structures for the storage or transportation of water. Extraordinary expenditure by a government agency may be needed to facilitate useful initiatives by licence holders. Selective charges in such special cases may well be desirable. Otherwise it might not be possible always to make the best use of (often scarce) water resources. Considerations of that sort support the interpretation the language of s. 12(5) naturally suggests. Mr Fraser, however, points to s. 1 2 ( 9) and the Schedule to the Act. Section 12(9) relevantly provides that "a license ... in respect of any work whereby water is taken ... from any ... dam constructed by the Crown shall only be issued ... upon payment of the prescribed fee ... ". Section 77 allows the Governor in Council to make regulations for all the matters mentioned in Part II of the Schedule to the Act. Clause 25, which is in Part II, mentions "fixing the price for water rights; altering the price where the consumer subdivides the holding (and) providing for the enforcement of such charges II . . . . In my opinion, these specific provisions do not carry with them any implication that the Commissioner may not selectively levy by an appropriate condition. The only interpretation of s. 12 ( 5) suggested for the plaintiffs should be rejected. As the argument was conducted, this conclusion means that the charge should be seen as being consistent with the Water Act. Administrative review Two other matters were raised. First, the charge was said to be vitiated by the Commissioner's taking into account an -- 10 of 14 -- 10 irrelevant consideration: that regard was had to the prices paid at the auction when the decision was made to require some pecuniary contribution. Secondly, the decision was said to be so unreasonable that no reasonable person could have come to it: cf. Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B. 223; Chan v. Minister for Immigration and Ethnic Affairs (1989) 169 C.L.R. 379. These are essentially questions of fact. They were not mentioned as issues when Mr Fraser outlined his submissions at the beginning of his address. When eventually they were raised, I wondered about the convenience of their summary determination so I raised with counsel whether it might not be preferable that "the action might be brought to trial as in other cases": see R.S.C. O. 57 r. 2. Both sides resisted the idea and asked me to decide the action. User pays In November 1987 a discussion paper entitled "St. George Irrigation Project Proposal for Additional Water Allocations and Development" was published. It invited public comment on proposals which included an increase in nominal allocations from the Thuraggi Watercourse. One suggestion was to release an additional 12,500 megalitres. Another was that public moneys be spent in constructing a pump station at the Beardmore Dam, with the capital costs being recouped through special water charges on consumers. In 1989 a decision was made to release the 12,500 megali tres. Demand exceeded the additional supply. Sixty-seven applications were received from forty-six landholders for 32,244 -- 11 of 14 -- 1 1 megalitres of nominal allocation. To achieve a fair distribution, the Commissioner granted additional allocations using a formula which allowed for a maximum allocation of 470 megalitres. The plaintiffs attempt to participate in this distribution failed at first. But the success of their appeal to the Land Court meant that they too received a further 470 megalitre allocation. The proposal to fund construction of the pump station through new water charges was not implemented. None of the other forty or so applicants obtaining a share of the 12,500 megalitres was asked to make any special payment. They did not get demands like the invoice the plaintiffs received last September. Perhaps the additional allocations to those landholders were approved before introduction of the "user pays" policy. Presumably it was in 1989 that it was decided to adopt different means of raising the money for the pump station from the funding proposal considered in the discussion paper. This was the point of the auction. Three thousand megali tres of irrigation allocation were on offer, and the auction raised more than $1M. The Commissioner has deposed to his intentions concerning the $141,000: "It is proposed that a new pump station be installed at Beardmore Dam . . . which is the major source of water reserves for the St. George irrigation area. If the cost of the pump station exceeds the proceeds from the auction, then I would recommend to the Treasurer that the sum of $141,000 be applied towards defraying the cost of installing the pump station." To take into account prices paid at the auction in deciding to impose the $141,000 charge was, Mr Fraser said, to have regard to an extraneous factor. Attention to it, he submitted, -- 12 of 14 -- 12 vitiated not only the demand for as much as $141,000 but also the decision to charge any amount. On the evidence, there is no basis for supposing that the Commissioner imposed the charge for the reasons attributed to him by the plaintiffs. Prices at the auction were influential in the assessment of the amount of the charge. However, his decision to ask for a contribution towards the cost of the works was not prompted by the view that a substantial sum could have been obtained were equivalent rights sold at auction. The charge resulted not from the prospect of making money for consolidated revenue but from the implementation of the "user pays" policy. And it is not suggested that the charge could not fairly be regarded as consistent with the new policy. The next contention is that the charge is so unreasonable that no reasonable authority could have come to the decision to impose it. This was founded on its discriminatory nature. As I have said, no one else with a comparable licence was similarly charged. A difficulty the plaintiffs' case immediately confronts is that the charge is explained by a changed policy. That policy, which on the evidence before me seems to have been introduced after the other landholders participating in the additional 12,500 megalitres received their licences, is consistent with the statutory scheme. In these circumstances, the Commissioner's decision is not shown to be manifestly unreasonable: cf. U.L.V. Pty. Ltd. v. Scott (1990) 19 N.S.W.L.R. 190. The plaintiffs disclaimed a case of bad faith in the discrimination evidenced by their invoice. And they did not -- 13 of 14 -- 13 suggest that the $141.,000 was exacted for some ulterior purpose or through improper motive. Nor was the Land Court's order that the licence issue "subject to the usual conditions attaching to such licences in that area", coupled with the fact that no other holder of a similar licence was subjected to a similar charge, relied on. The plaintiffs' claim fails. Orders Both application and action are dismissed with costs. -- 14 of 14 --