Applicants v Respondent

1 The applicants, Mr and Mrs Sleeman, own a country property at 280 Wandong Road, Kilmore, which they purchased in July 2008 with the intention, they say, of constructing an aerodrome as a base for small aircraft used for private and business purposes. The property is in the shape of an elongated rectangle with minimal slope and cross-fall. It was advertised as being suitable for the purpose of an aerodrome, and the applicants allege that they paid a premium for the property for this reason.

2 At the time the applicants acquired the property, there were existing power-lines at the western end of the property, to the north of the property and approximately 44 metres to the east of the eastern boundary of the property on the other side of the Kilmore-Wandong Road (also known as the Epping-Kilmore Road and referred to hereinafter simply as 'the Wandong Road').[1]

3 The respondent is an electricity corporation for the purposes of the Electricity Industry Act 2000 (the 'Act'). It enjoys a range of statutory powers to enable it to perform its functions, including powers to enter upon private and public land to carry out works and maintain facilities to secure the transmission of electricity. In January 2011, the respondent began works (the 'eastern line upgrade') that involved constructing new poles and moving some of the surrounding power-lines closer to the property, particularly on the eastern side. As a result of the eastern line upgrade, a powerline on an adjacent farming property to the north is now closer to the northern boundary of the applicants' land and the eastern powerline has been moved 32 metres closer to the property on the eastern side.[2] The height of the power-lines on the eastern side has also been increased from 9.2 metres to a maximum height of 15.4 metres. The applicants contend that the use of their property for aviation purposes is now so hazardous that they have abandoned their original intentions. They seek compensation from the respondent for damage suffered as a result of the works for the eastern line upgrade carried out on land adjoining their property.

4 The proceeding was listed for trial on the question of liability only. As the applicants claim compensation under s 93(2) of the Act, the question before the Court is whether the works for the eastern line upgrade in the near vicinity of, but not on, the applicants' land render the respondent liable to compensate the applicants pursuant to s 93(2) of the Act. The central dispute is whether the applicants are entitled to statutory compensation under the Act for damage they claim to have suffered as a result of the construction of power-lines near their property or whether they are left to pursue a common law claim for private nuisance.

5 For the reasons that follow, I have concluded that the applicants are not entitled to statutory compensation under the Act for damage they claim to have suffered as a result of the construction of power-lines near their property.

6 Section 93 of the Act confers on the respondent a broad sweep of powers of the kind conventionally conferred on public authorities with responsibility for delivering essential services. The relevant parts of s 93 of the Act provide as follows:

93. Powers as to works etc.

(1) For the purposes of this Act, an electricity corporation, subject to this Act-

(a) may enter upon any lands and sink bores and make surveys and do any other acts or things necessary for sinking bores or making surveys; and

(b) may, with any equipment or devices, receive, store, transmit, or supply electricity, water, brown coal or products of brown coal over, or under, any land and may enter on any land upon either side of such equipment and fell or remove any tree or part of a tree or any obstruction which in the opinion of the electricity corporation it is necessary to fell or remove; and

(c) subject to the Water Act 1989, may divert water from any waterway, lake, lagoon, swamp or marsh, or alter the bed, course or channel of any waterway; and

(d) subject to the Road Management Act 2004, may enter upon any public or private land or roads and construct any works or place on under or over any such land or road any structure or equipment and may repair, alter or remove any such structure or equipment or any works under its control; and

(e) may do all other things necessary or convenient for constructing, maintaining, altering, or using any works or undertakings of, or under the control of, the electricity corporation.

(2) In the exercise of the powers under subsection (1), an electricity corporation must do as little damage as may be and, must, if required within 2 years from the exercise of the powers, make full compensation to the owner of and all parties interested in any land for any damage sustained by them in consequence of the exercise of the powers.

(3) Compensation under subsection (2) shall be either a gross sum or a yearly rent as may be agreed and, in default of agreement, shall be determined in the manner provided in the Land Acquisition and Compensation Act 1986.

7 The applicants submit that in carrying out the works for the eastern line upgrade, the respondent exercised its powers pursuant to s 93(1) of the Act and that they are entitled to compensation in accordance with s 93(2) for any damage sustained by them in consequence of the exercise of those powers. As a result, compensation is to be determined in the manner provided in the Land Acquisition and Compensation Act 1986 (the 'LAC Act'). The applicants have made a claim against the respondent in which, in substance, they claim compensation for the diminution in the market value of their land as a result of it ceasing to be suitable for use as an aerodrome. The amount claimed is $300,000, based on an expert valuation that assessed the 'before' and 'after' values of the land.

8 The respondent submits that the applicants have no right to compensation under s 93(2) of the Act because the works for the eastern line upgrade were carried out with the agreement or consent of the land-owners on whose land the works were constructed and that it had no need to exercise powers under s 93(1) of the Act. It submits further that s 93(2) only provides for compensation to be paid where an electricity corporation has entered onto land for the purpose of performing the works described in s 93(1) of the Act and it did not enter onto the applicants' land for the purpose of carrying out any of the works.

9 The works on the eastern side of the land were carried out on the road reserve along the Wandong Road. They were carried out pursuant to consent granted by VicRoads to the respondent under s 38 of the Road Management Act 2004 (Vic). The consent is contained in letters dated 15 September 2010 and 16 February 2011 from VicRoads to the respondent.[3] Mr Dennis Andrews, a Senior Survey Mapping Officer employed by the respondent, has made an affidavit[4] in which he deposes to the creation of easements for the power-lines to the west and north, and for the widening of the easement for the northern line on 15 November 2010 as part of what I understand to be the eastern line upgrade. Mr Andrews also deposes to the creation of a series of easements on properties on the eastern side of Wandong Road.[5]

10 None of this evidence was challenged. The evidence is that the respondent had permission to enter onto land to the north and east of the applicants' property to construct the power-lines comprising the eastern line upgrade. It says, as a consequence, that it had no need to exercise any powers under s 93(1) of the Act and that the entitlement to compensation under s 93(2) was not enlivened.

11 It is common ground that none of the physical infrastructure (poles and conductors) for the eastern line upgrade is on the applicants' land. Although the Court was shown photographs suggesting there may have been some incursions onto the applicants' land in the course of carrying out the works on the Wandong Road reserve, and it was asserted by the applicants that the lines or conductors on the eastern side had a tendency to sway into the airspace above the applicants' land to the extent of about 1.8 metres, for the purpose of determining the availability of compensation under s 93(2) for the loss of the use of the land as an aerodrome, any incidental incursions on the applicants' land are not relevant. The applicants do not claim to have sustained damage as a result of such incursions. The damage that they have suffered results from the re-location and height of the power-lines, principally to the east. In substance, the applicants claim to have suffered loss and damage as a result of the construction of electricity infrastructure on adjoining land, not because the respondent entered onto their land in order to carry out works.

12 In my view, the question of liability in this case cannot be decided simply on the basis that the respondent held licences to enter the land on which the works for the eastern line upgrade were carried out. The grant of licences by land-owners may not protect the respondent from claims by other persons (such as adjoining land-owners) from whom it has not extracted any authority to undertake the works. The fact that works were undertaken on land entered pursuant to a licence given by VicRoads (in the case of the works on the Wandong Road reservation) and easements granted by land-owners to the north and the east of the applicant's land, may not relieve the respondent from reliance on the powers in s 93(1) to protect it from suit by other land-owners, including the applicants. If s 93(1) authorises electricity corporations to carry out works in a way that, absent the authority that it confers, would constitute private nuisance, then it may be of no consequence that the powers have not been invoked to authorise entry onto land to carry out the works. The fact that the Authority did not need to rely on the powers in s 93(1) to enter the Wandong Road reserve or the private land to the north and the east to carry out the works for the eastern line upgrade does not necessarily mean that s 93(1) had no work to do. It remains necessary to construe s 93 to determine whether compensation is available to land-owners who have suffered loss and damage as a result of the construction of power-lines on adjoining land.

13 It is therefore necessary to consider the application of s 93 of the Act on the basis that the relevant infrastructure is not situated on the applicants' land, none of the relevant works were carried out on the applicants' land and the respondent did not enter onto the applicants' land to carry out any works. The question is whether the restriction on the applicants' use of their land as an aerodrome caused by the works on adjoining public and private land gives them an entitlement to compensation under s 93(2).

14 Determining whether compensation is available under the Act in respect of damage to adjoining land involves an exercise in statutory interpretation. The starting point must be the text of the relevant provision.[6]

15 Section 93(1) confers a range of powers on electricity companies to enter public and private land to construct and maintain works, including diverting water and altering waterways, without first resuming an easement. The powers in question plainly authorise an electricity corporation to intrude upon or interfere with private rights. Indeed, s 93(2) requires the exercise of powers under s 93(1) to result in 'as little damage as may be', and thereby recognises that s 93(1) authorises acts which may cause damage to land-owners and persons with an interest in land.

16 The respondent submits that the compensation provided by s 93(2) is for damage that is authorised by s 93(1) and that what is authorised by s 93(1) is limited to acts constituting trespass. It submits therefore that the words in s 93(2), 'the owner of and all parties interested in any land', refer only to the owner of and any person who has an interest in the land upon which the works have been carried out or constructed. As s 93(2) must be read in conjunction with s 93(1), the word 'such' in s 93(1)(d) (in the phrase 'and construct any works or place on under or over any such land') identifies the particular land entered onto for the purpose of carrying out the works and in respect of damage to which compensation will be paid. The words, 'make full compensation to the owner of and all parties interested in any land' in s 93(2) should therefore be read as 'make full compensation to the owner of and all parties interested in any relevant land'. This, so it is contended, is supported by the explanatory memorandum for the Electricity Industry Bill 2000:

Clause 93 provides for powers as to works. It enables electricity corporations to enter on to land and do such things as are necessary for the purposes of electricity supply. It is in the same terms as s 47 of the Electricity Industry Act 1993.[7]

17 According to the respondent, the use of the word 'and' rather than 'or' in this passage indicates that in order to engage s 93 of the Act so as to trigger the requirement to make compensation, the electricity corporation is required to 'enter onto land'.

18 For their part, the applicants submit that the words of s 93(1) are broad enough to encompass and describe the works undertaken by the respondent for the eastern line upgrade and that there is nothing in the language of s 93(2) to suggest that it limits the entitlement to compensation to the case where the electricity corporation has, for the purpose of any of its identified legitimate functions, actually entered upon the land of the applicant for compensation. While the actions that an electricity corporation may perform involve entry upon lands in sub-paragraph (a) of s 93(1) and in the second part of sub-paragraph (b), there is no such limitation, or use of words suggestive of any such limitation, in any of the other sub-paragraphs. Then, in sub-section (2), there is no language which would limit the entitlement to compensation to the owner of land upon which the works have been carried out, as opposed to the more general concept that the applicant must be the owner of, or a party interested in, land which has sustained damage as a consequence of the exercise of its powers by the electricity corporation. In particular, the use of the word 'any' to qualify the noun 'land' is highly suggestive of the broadest construction and lends no support to an interpretation that the land in question must be the land actually entered upon by the electricity corporation.

19 Furthermore, so the applicants contend, there is no policy consideration that would support such a limitation. For example, it is perfectly feasible to suppose that if an electricity corporation exercises its powers pursuant to s 93(1)(c) to divert water from a waterway on a property, such diversion may cause damage and loss of amenity to a neighbouring property. There is no reason in policy why the entitlement to compensation by the owner of the adjoining land should be nullified by the fact that the diversion itself occurred on another property.

20 The powers in s 93(1) authorise interference with land for the purpose of carrying out or constructing works. As the heading to s 93 suggests, they permit the carrying out of physical works on private and public land for the purpose of generating, transmitting and distributing electricity. The powers are, relevantly:

(a) (i) 'entering upon any lands and sinking bores and making surveys' and (ii) doing other acts or things necessary for sinking bores and making surveys;

(b) (i) [using equipment or devices] receiving, storing, transmitting or supplying electricity over or under any land and (ii) entering on land either side of its equipment and felling or removing any tree or obstruction;

(c) (i) diverting water from any waterway, lake, lagoon, swamp or marsh or (ii) altering the bed, course or channel of a waterway;

(d) (i) entering upon any private or public land and constructing works or placing on or under the land any structure or equipment and (ii) repairing, altering or removing any such structure, equipment or works;

(e) doing all other things necessary or convenient for constructing, maintaining, altering or using works or undertakings.

21 Entry upon (or on) land is therefore expressly contemplated in paragraphs (a) and (d), although it may also be required in the exercise of powers in (e). The power in paragraph (b) also focuses on what may be done on or to land in that it confers powers in respect of activities that may be carried out 'over or under land' and authorises entry on land adjacent to the equipment by which electricity, water, coal or coal products is received, stored, transmitted or supplied. Even the diversion of water or the alteration of the bed, course or channel of a waterway pursuant to paragraph (c) will most likely involve entry upon private or public land in order to create the diversion in the first place.

22 Where entry upon land (or lands) is expressly permitted, the word 'and' is used as a prelude to what may then be done, as in 'may enter upon land' and sink bores, fell trees, construct works and so on. Entry upon land is authorised for those purposes, and the provisions could equally read 'may enter upon land in order to ...' The relevant paragraphs authorise entry upon land to enable the electricity corporation to perform its functions, in this case, by constructing works and placing on or under land structures or equipment. While entry upon land is an incident of constructing the works, it forms an integral part of the power that is conferred, and the ambit of the power in question must be assessed by reference to it. The words expressly authorising entry upon land show that it was the intention of the legislature to authorise what might otherwise amount to trespass. Furthermore, the inclusion of the words 'may enter upon any public or private land or roads' in s 93(1)(d) may be taken to be a sign that the legislature intended that the interference with land authorised for the purpose of constructing works be limited to interference with the land on which the works are constructed. The right to compensation under the Act will be correspondingly limited.

23 The parties have not confined their submissions to the exercise of power under s 93(1)(d), referring generally to the powers in s 93(1) and whether or not they authorise nuisance. However, the construction of the allegedly intrusive power-lines as part of the eastern line upgrade falls squarely within the range of activity permitted by s 93(1)(d). There is no suggestion that paragraphs (a) or (c) are applicable or that damage has been sustained by virtue of the exercise of powers described in paragraphs (b) or (e). The respondent has entered upon neighbouring land and constructed power-lines that allegedly affect the applicants' enjoyment of their land. Insofar as the respondent has exercised any statutory power resulting in damage to the applicants, the relevant power is that conferred by s 93(1)(d).

24 Section 93(2) imposes two obligations on electricity corporations when exercising powers under s 93(1): (a) to 'do as little damage as may be'; and (b) to make compensation for any damage sustained by the owner of 'any land' in consequence of the corporation exercising those powers.[8]

25 The damage in the first obligation is damage that is 'done' to land in the course of exercising the powers in question, suggesting a direct physical connection between the exercise of the powers and the damage of which as little must be done 'as may be'. The damage for which compensation is payable in the second obligation is not expressly limited to the damage referred to in the first obligation. Persons may sustain damage in respect of land owned by them where no physical damage is done to the land, but where they are prevented from using the land, or part of it, because of the presence of works or infrastructure on the land. 'Damage' in the context of the second obligation (the obligation to make compensation) is not necessarily limited to physical damage to the land. Hence, while there must be interference with the land, it could be with the owner's use or enjoyment of the land. On this analysis, the right to compensation under s 93(2) would be enlivened where there was no physical damage to land but where the land-owner suffered a loss of enjoyment of the land (or part of it). In the absence of other indicators, such damage could be a function of conduct that would otherwise give rise to liability for trespass or for nuisance.[9]

26 In my view, however, the damage referred to in the first obligation (of which as little must be done as may be) is the damage for which compensation is payable under the second obligation. Compensation is payable because, as long as the damage caused by the works is as little as may be, it is authorised by s 93(1). Damage is permitted as a consequence of the corporation's entry upon land and construction of works and/or placement of structures or equipment on it, so long as it is minimised and the land-owner is compensated for the damage. The damage for which compensation is payable is therefore the damage caused by the construction and/or placement, maintenance, repair and removal of works and equipment on land that has been entered upon by the corporation for that purpose. The damage may involve physical damage such as the destruction of trees and other flora, or it might involve occupancy of part of the land, preventing or inhibiting its use by the land-owner. Hence, s 93(3) refers to compensation taking the form of a gross sum or a yearly rent.

27 Although s 93(2) does not, on its face, require the land in question to be the land upon which the electricity corporation has entered in order to construct the works described in s 93(1)(d), the words 'any land' (as in 'any public or private land') are also used to describe the ambit of the power in s 93(1)(d) and they there plainly refer to the land upon which the works are constructed. Likewise, 93(1)(a) authorises entry upon 'any lands'; paragraph (b) authorises things to be done 'over or under, any land' and entry on 'any land' (on either side of equipment); paragraph (d) authorises entry upon 'any private or public land or road' and the construction of works or the placement of structures and equipment 'on over or under any such land'. Viewed in this context and having regard to the nature of the damage referred to in s 93(2), the land in question - 'any land' - must be the land which is entered upon and upon which the actions or events causing damage have taken place.

28 I therefore accept the submission of the respondent that s 93(2) must be read as 'make full compensation to the owner of and all parties interested in any relevant land'.

29 I have considered whether the form of compensation contemplated by s 93(3) sheds any light on the availability of compensation for damage to adjoining land.

30 Section 93(3) provides that compensation under s 93(2) shall be either a gross sum or a yearly rent as may be agreed and, in default of agreement, shall be determined in the manner provided by the LAC Act. Section 93(3) is framed differently from other provisions in the Act conferring rights to compensation under the LAC Act, notably s 86(2). Section 86(1) of the Act provides for an electricity corporation to acquire compulsorily an easement for the purposes of erecting or laying power-lines, and for the purpose of maintaining them.[10] Pursuant to s 86(2), the LAC Act applies to such an acquisition and the corporation is deemed to be the Authority for the purposes of the LAC Act, enabling (or requiring) it to engage in the processes stipulated in the LAC Act to resolve or determine the amount of compensation.[11] In contrast, s 93(3) makes no provision for the electricity corporation to be an 'Authority' for the purposes of the LAC Act. This means that large parts of the LAC Act are inapplicable to determining the level of compensation payable under s 93(3) in any event.

31 In my view, the compensation sought for the damage that is alleged by the applicants sits uneasily with the scheme for the payment of compensation under the LAC Act.[12] The applicants have claimed compensation for the diminution in the market value of their land by reason of it no longer being suitable for use as an aerodrome. The LAC Act contemplates that compensation may be paid by reference to the market value of the interest in land 'on the date of acquisition'. The compensatory arrangements in the LAC Act are based on the taking of land - its acquisition - for public purposes. In this case, the applicants retain all of their land. None of it has been 'taken away' in the sense of being physically damaged or occupied by the respondent. The applicants' complaint is, in substance, that aircraft can no longer fly low over adjoining land for the purpose of landing on and taking off from their land. There may have been a diminution in the value of the applicants' land as a result of it no longer being suitable for use as an aerodrome, but that is not the result of anything even approaching an acquisition of an interest in their land. A similar diminution in market value might result from the grant of a permit for neighbouring land to be used for a purpose affecting the amenity of neighbouring land, such as rubbish disposal.[13] The LAC Act would not apply in such a circumstance, even if the business of rubbish disposal was to be carried out by a public authority such as the local council.

32 The difficulties applying the compensation regime in the LAC Act to nuisance of the kind alleged must be viewed as an indication that compensation for damage caused by that nuisance is not contemplated by s 93(2). It is not, in my view, open to a land-owner to simply assert interference with his or her land in the form of nuisance and to then claim for a diminution in the market value of the land.

33 There is a further difficulty associated with the broad construction of s 93(2) contended for by the applicants. A construction of s 93(2) in which 'any land' and/or 'damage' are broadly defined so as to entitle land-owners to compensation for damage suffered as a result of the construction of power-lines on neighbouring land would confer a right to statutory compensation in circumstances where the land-owner might not be entitled to a common law remedy for nuisance.

34 A plaintiff will not succeed in a suit for nuisance simply by showing that another person is responsible for interference with his or her land that results in damage. The law of nuisance must adjust or balance rights and privileges between the parties where, for example, an action in nuisance concerns a conflict of interests between neighbouring land-owners.[14] Thus, in Sedleigh-Denfield v O'Callaghan,[15] Lord Wright said:

A balance has to be maintained between the right of the occupier to do what he likes with his own, and the right of his neighbour not to be interfered with. It is impossible to give any precise or universal formula, but it may broadly be said that a useful test is perhaps what is reasonable according to the ordinary usages of mankind living in society.[16]

35 Obtaining compensation for nuisance therefore involves more than simply establishing damage and a causal connection between the emanation or event constituting or giving rise to the nuisance and the damage in question. A court will be called upon to assess whether the interference was unreasonable having regard to such matters as the nature and extent of the harm or interference; the social or public interest value in the defendant's activity; the hypersensitivity (if any) of the user or use of the claimant's land; the nature of the established uses in the locality; whether all reasonable precautions were taken to minimise any interference; and the type of damage suffered.[17]

36 The applicants seek compensation under s 93(2) of the Act (liberally construed) rather than at common law because they recognise that they would bear a heavier burden establishing the right to a remedy for nuisance. In this regard, counsel for the applicants said:

But we would have the greatest difficulty in a common law court, as it were, ... in establishing that this was an unreasonable interference with our rights, given the public utility of the necessity of the upgrade, the consideration no doubt that was given to it, and indeed, in some cases to which I'll refer later, it's clear that if the electricity corporation exceeds its powers, it acts negligently, to take a clearer example. Then the common law remedies still exist, but where the corporation has merely exercised its powers, and it can't be demonstrated that it was unreasonable or unlawful in doing so, then our only remedy is s.93, and to attenuate and to limit the remedy in that way, is a fundamental attenuation, not of common law rights ... but our rights under the statute. That is to say, when the corporation has acted in a lawful manner.[18]

37 To construe s 93(2) as entitling a land-owner to compensation for a diminution in the market value of his or her land where (unpalatable) works have been carried out on adjoining land would be to give the land-owner an entitlement to compensation in circumstances the common law might not do so, and for reasons other than the availability of the defence of statutory authority. Such a construction might, for example, require compensation to be paid to land-owners claiming for loss of market value as a result of the construction of power-lines that are visible from their properties. That cannot, in my view, have been the intention of the legislature.

38 The applicants submit that the works that have caused them loss and damage were authorised by s 93(1) and that, in the absence of authority conferred by s 93(1), the works would have been unlawful as constituting private nuisance. They say that insofar as s 93(1) authorises the respondent to carry out the works causing such nuisance to them, they have been deprived of their common law right to a remedy in respect of such nuisance and are entitled to compensation in accordance with the Act.

39 The authorities recognise that, generally speaking, compensation clauses like s 93(2) are enacted to give back what has been taken away by the conferral of statutory powers the exercise of which by an authority may cause loss and damage to private citizens. Because the conduct giving rise to the damage is authorised by statute, the citizen's assertion of common law rights will be met by the defence of statutory authority. The entitlement to compensation is given because the corporation has done something that would be unlawful and would attract a remedy in common law or equity without the statutory authority conferred by the statute.

40 This was described in Metropolitan Water, Sewerage and Drainage Board v OK Elliot,[19] by Starke J in the following terms:

It has long been settled that if public authorities or persons do acts which they are authorised by statute to do, and do them in a proper manner, then, though the acts so done work special injury to a particular individual, the individual injured cannot maintain an action at law. He is without remedy unless compensation is provided by the Act and his only remedy is that given by the statute, namely, compensation.[20]

41 However, his Honour observed that statutory powers must be exercised with reasonable regard to the rights of other people, and if an act is done in excess of the statutory power, or carelessly or negligently, then the person injured can seek an ordinary legal remedy.[21]

42 Likewise, in Brighton v Dungog Municipal Council,[22] Jordan CJ in the Supreme Court of NSW said of the Local Government Act 1919 (NSW), which authorised local councils to construct and maintain sewerage works:

It is a statute which authorises public bodies to do acts which may cause unavoidable damage to private citizens. In such a case if one of the parties does such an act negligently, so as to cause unnecessary damage, the injured party has his ordinary action in tort, at common law. But for unavoidable damage he has no remedy unless the statute gives him one.[23]

43 There is guidance on when statutory provisions will be taken to have authorised nuisance. The conventional approach has been that if what parliament authorised was no more than a permissive act which could be carried out without committing a nuisance, the legislative provision will not be construed as authorising the nuisance. If the statute has authorised the doing of something which, after taking all reasonable care and adopting such precautions as are reasonable in the circumstances, nevertheless constitutes a nuisance, then parliament must be taken to have authorised the nuisance to that extent.[24] In Tort Liability of Public Authorities,[25] the author observed that 'modern' Australian and Canadian case law has used the mandatory-permissive classification but with different consequences:

Whilst it is regarded as a preliminary issue to liability, it is not necessarily decisive. The emphasis of modern Australian and Canadian case law is upon the inevitability of the consequences. The discussion of the defence [of statutory authority] by the two dissenting members of the High Court in Benning v Wong provides direct support for this approach.[26]

44 In the case of permissive powers, the courts apply the defence and consider whether the consequences were inevitable.[27] Thus, in Rudd v Hornsby Shire Council,[28] Holland J was concerned with the authority to establish drainage works in or passing through land. His Honour held that the general powers in the statute were not sufficient to 'authorise works calculated to cause the particular nuisance suffered by the plaintiff.' There was not sufficient specificity in the words of the statute to connect the authorised activity to the damage that resulted.[29]

45 In Southern Properties, McLure P considered the defence of statutory authority with respect to nuisance in the context of smoke damage to vines caused by burning off undertaken by a government agency. Her Honour described the defence of statutory authority for nuisance as follows:

The defence of statutory authority requires that the nuisance be an "inevitable consequence of the authorised undertaking". If the nuisance was an inevitable consequence of the authorised undertaking, the defendant will only be liable if, in the exercise of its statutory powers, it acted negligently: Bankstown City Council v Alamdo Holdings Pty Ltd [2005] HCA 46; (2005) 223 CLR 660 [16]; Benning v Wong [1969] HCA 58; (1969) 122 CLR 249, 324 337 (Owen J). The reference to negligence is not to the tort. It is clear there is no requirement to prove that the defendant owed the plaintiff a duty of care.

In considering whether a nuisance is inevitable it is necessary to distinguish between statutory provisions that require a specified activity to be carried out and provisions that permit, but do not require, a specified activity to be carried out. In the former case there is no separate requirement of inevitability; any nuisance resulting from the activity will be authorised unless it is caused by negligence on the part of the person conducting the activity. All that is required is that the specified activity be executed (performed) with reasonable care. See Trindade, Cane and Lunney, The Law of Torts in Australia (4th ed) [4.1.6.3].

Where the statute permits the specified activity to be carried on, it must be shown that what the legislation authorised could not be done without creating a nuisance and that the nuisance was not caused by negligence. The inevitability limb focuses attention, not on the execution of the specified activity, but on the decisions relating to whether, when or how to undertake the authorised activity. Thus, if the creation of a nuisance could have been avoided by the proper exercise of the statutory power (ie one that was consistent with its scope and purpose(s)), the defence will fail even in the absence of negligence: Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31 [48] [57].[30]

46 The test of 'inevitable consequence' may be a difficult one to satisfy in many cases. However, this is appropriate in circumstances where the statute interferes with private rights, that is, the right to bring common law proceedings for nuisance. It derives from the principle of statutory construction that a statute will not be construed to interfere with common law rights without unambiguous and compelling language.[31]

47 In Southern Properties, McLure P concluded that the escape of smoke from the prescribed burn was the inevitable and unavoidable consequence of the authority's performance of its statutory function of conducting prescribed burning in the south western forests of Western Australia. It was analogous to the 'railway sparks cases' referred to by Owen J in Benning v Wong.[32] The activity was required to be carried out and was of a kind that could not be carried out without creating a nuisance: the authority was required to light fires to carry out its functions and fires inevitably generate smoke.

48 In Marriage v Norfolk Rivers Catchment Board,[33] the English Court of Appeal was also concerned with nuisance, specifically damage to private lands caused by flooding as a result of deposits left by dredging. It had to decide whether the plaintiff retained his common law remedy or whether he was left to the compensation provided by statute. Lord Jenkins proposed a four part test to establish whether compensation was provided by statute (and common law damages were precluded):

First, was the act which occasioned the injury complained of authorised by the statute? ; secondly, did the statute contemplate that the exercise of the powers conferred would or might cause injury to others? ; thirdly, if so, was the injury complained of an injury of a kind contemplated by the statute? ; and, fourthly, did the statute provide for compensation in respect of any injury of the kind complained of sustained through the exercise of the powers conferred? If the answers to all these questions are in the affirmative then, I think, it must follow that the party injured is deprived of his right of action and left to his remedy in the form of compensation under the statute.[34]

49 Lord Jenkins held, first, that the authority clearly had power to dredge the river and deposit soil on the bank; secondly, it was 'manifest' that the statute contemplated that the exercise of the powers conferred on the authority would or might cause injury to others as it was clear that operations of the kind contemplated must inevitably interfere with the rights of riparian owners by altering the flow of the river and its behaviour in times of flood or drought; thirdly, that injury in the shape of flooding was contemplated by the statute. In this last respect, his Lordship distinguished between statutory powers to execute some particular work or carry on a particular undertaking and statutory powers to execute a variety of works of specified descriptions in a given area as and when the body invested with the powers deemed it necessary to do so in furtherance of a general duty imposed by the statute.[35] In the latter case, if the powers were subjected to an implied limitation to the effect that they were not to be exercised so as to cause any avoidable infringement of the rights of others, the powers would be in great measure nullified. Given the availability of compensation, the court concluded that the intention of the statute was to make the authority, acting in good faith and within its powers, the sole judge of what was necessary or proper to be done in the way of drainage operations. A remedy of compensation had therefore been substituted for the ordinary remedy by way of action.[36]

50 In this case, the works for the eastern line upgrade - the construction of poles and conductors (power-lines) on private and public land - was authorised by the Act and the Act contemplated that this might cause injury to others, specifically the persons on whose land the power-lines were constructed. However, it is much less clear that the injury complained of in this case, that is, the inability to use adjoining land as an aerodrome, is an injury of the kind contemplated by the Act. In my view, the damage complained of was not a contemplated consequence of the conferral of power to enter onto land to construct and maintain power-lines.

51 Put another way, and applying the analysis in Southern Properties, I am not persuaded on the current rather scant evidence that the damage complained of by the applicants was an inevitable consequence of the exercise of power to enter adjoining or neighbouring land to construct works under s 93(1)(d). The criterion of inevitability is 'not what is theoretically possible but what is possible according to the state of scientific knowledge at the time, having also in view a certain common sense appreciation, which cannot be rigidly defined, of practical feasibility in view of situation and expense'.[37] The dredging operations that were the subject of Marriage and the burning off operations in Southern Properties are distinguishable. Those activities had to be carried out in a way that gave rise to the likelihood of nuisance. While it is tolerably clear that respondent was required to construct power-lines in order to secure the transmission and distribution of electricity in designated areas, the manner in which that task was to be performed was left to the respondent. So far as I can tell, the respondent was not required to construct the power-lines along the Wandong Road reserve in a way that inhibited aircraft movements on the applicants' land. It would not 'nullify' the power to require the construction of power-lines for the transmission of electricity to be carried out without causing damage of the kind alleged.

52 The onus of proving 'inevitable consequence' lies with the authority.[38] In this case, the respondent has not endeavoured to establish that the damage suffered by the applicants was the 'inevitable consequence' of the exercise of its statutory powers. Rather, it submits that the applicants are not entitled to compensation under s 93(2) of the Act, but must exercise their common law rights to sue for nuisance. It is therefore open to the applicants to pursue a claim in nuisance against the respondent.

53 On its proper construction, s 93(2) does not entitle the applicants to compensation for the diminution in the market value of their land as a result of it no longer being suitable for use as an aerodrome because of the construction of power-lines on adjoining land.

[1] The property has long boundaries on its northern and southern sides and short boundaries on its eastern and western sides. Its eastern boundary abuts the Wandong Road. At the time of its purchase, the property was surrounded by power-lines on three sides:

(a) at the western end, there was a 66kV power line that ran along the entire width of the property;

(b) to the north the property, running through the centre of the neighbouring property, was a 22kV power line running parallel to the northern boundary for the length of the property; and

(c) at the eastern end of the property, but situated on the road reserve on the opposite side of the Wandong Road, was a 22kV power line.

[2] The northern line was removed and replaced by 22kV and 66kV power-lines just north of the property's northern boundary and extending its length, when it turns south and continues in a southerly direction along the Wandong Road reserve 1.8 metres from the eastern boundary of the property until it reaches a concrete pole (numbered 467) that is roughly halfway down the eastern boundary of the property. The powerline then crosses the Wandong Road and continues south on the other side of the road.

[3] By the 15 September 2010 letter, VicRoads gave consent to proposed works within the road reserve on what was described as the 'Epping-Kilmore Road' between Beveridge and Wandong, subject to a number of conditions. This consent was given in response to an application for consent dated 15 September 2010, which was not in evidence. A further consent was given on 16 February 2011 in response to an application for consent dated 11 February 2011 to undertake works within the road reservation on the 'Epping-Kilmore Road' between Beveridge and Wandong. This consent was expressed to be solely for works associated with numbered 'poles' and the crash barrier associated with numbered poles.

[5] Mr Andrews deposes that in 2011, as part of the eastern line upgrade, the respondent rebuilt part of the powerline that previously ran along one of the existing eastern easements so that the power-lines on the northern easement (the northern line) connected at the north-east corner of the property and ran south along Wandong Road, about two thirds of the way along the property, at which point they crossed Wandong Road and connected back to the existing easement on the eastern side.

[6] In SM v R [2013] VSCA 342 Weinberg JA observed that recent decisions of the High Court of Australia appear to have attributed greater importance to the actual language used in the text than to contextual matters. See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27; Baini v The Queen [2012] HCA 59; (2012) 246 CLR 469; Fleming v The Queen (1998) CLR 250.

[7] Explanatory Memorandum, Electricity Industry Bill 2000, 19.

[8] Where I refer to the 'owner' of any land for the purposes of s 93(2), I include 'all parties interested in' that land.

[9] Nuisance protects a claimant's interest in the beneficial use of land. It is not confined to the actual use of the soil but extends to the pleasure, comfort and enjoyment which a person normally derives from occupancy of land. Thus, nuisance covers physical damage to property and non-physical damage: Southern Properties (WA) Pty Ltd v Department of Conservation and Land Management [2012] WASCA 79; (2012) 42 WAR 287 ('Southern Properties'), 310.

[10] The acquisition or creation of easements is also provided for elsewhere in the Act. Where a proposal for subdivision or consolidation of land is referred to an electricity corporation under the Planning & Environment Act 1987 (Vic), s 88 of the Act enables an electricity corporation to require easements to be created for its use for the purposes set out in the Schedule to the Act, which relate to the construction and maintenance of power-lines. No compensation is provided under this section. Section 91 provides for any two or more electricity corporations to enter into an agreement for one to exercise the rights and privileges of the other in respect of any easement to which the other is entitled. Again, no compensation is provided for where one corporation takes advantage of an easement in favour of the other.

[11] The LAC Act provides for a regime for the making of offers and counter offers (or claims), and for the resolution of any disputed claim by the Court or the VCAT, along with the payment of advances and interest on compensation. These provisions are predicated on the acquiring authority being an 'Authority' for the purposes of the LAC Act.

[12] The LAC Act provides for the measure of compensation to be determined having regard to such matters as market value (as defined), special value to the claimant (as defined), any loss attributable to severance (as defined), any loss attributable to disturbance, the enhancement of or depreciation in other land owned by the claimant by reason of the implementation of the purpose for which the land was acquired and for legal and other expenses incurred: s 41 of the LAC Act. The land-owner may also be entitled to solatium: s 44 of the LAC Act.

[13] Providing it was not reserved for a 'public purpose': see Part 5 of the Planning & Environment Act 1987 (Vic).

[14] R P Balkin and JLR Davis, Law of Torts (LexisNexis Butterworths, 5th ed, 2013) 473.

[15] [1940] UKHL 2; [1940] AC 880.

[18] Transcript of Proceedings, Sleeman v Anor v SPI Electricity Pty Ltd (Supreme Court of Victoria, S CI 2012 4143, Emerton J, 3 June 2013) 24-25.

[19] [1934] HCA 57; (1934) 52 CLR 134. See also Rohricla Nominees Pty Ltd v BHP Petroleum Pty Ltd (unreported, Supreme Court of Victoria, 29 August 1986, Gobbo J).

[22] (1943) 15 LGR (NSW) 74.

[24] R P Balkin and JLR Davis, Law of Torts (LexisNexis Butterworths, 5th ed, 2013) 489; Nielson v Brisbane Tramways Co Ltd [1912] HCA 21; (1912) 14 CLR 354, 369. In Allen v Gulf Oil Refining Ltd [1980] UKHL 9; (1981) AC 1001, 1011, Lord Wilberforce said that the statutory power conferred immunity against proceedings for any nuisance which could be shown by the constructor of a refinery to be an inevitable result of erecting a refinery, 'however carefully and with however great a regard for the interest of adjoining occupiers it is sited, constructed and operated' and that any nuisance beyond that immunity remained actionable. However, the statutory powers must be exercised without 'negligence', in the special sense that as a condition of obtaining the immunity, the work must be carried out and the operation conducted with all reasonable regard and care for the interests of other persons.

[25] Susan Kneebone_, Tort Liability of Public Authorities_ (LBC Information Services, 1998).

[28] (1973) 31 LGRA 120.

[31] Benning v Wong [1969] HCA 58; (1969) 122 CLR 249 ('Benning v Wong'), 256.

[33] [1950] 1 KB 284 ('Marriage').

[37] Manchester Corporation v Farnworth [1930] AC 171, 183.