Victorian Civil and Administrative Tribunal|2009-10-12

The application by the applicants under section 126 Victorian Civil & Administrative Tribunal Act 1998 to extend time within which to commence the proceeding is refused.
The application is struck out because it was lodged out of time.
Goulburn Murray Water must pay the costs for both the applicants and the respondents associated with this hearing, including the actual costs of counsel, as agreed.
Failing agreement, any party has liberty to apply with respect to costs.

Mr Bruce Miller, of counsel, instructed by Morrison & Sawers

Mr P Little of counsel, instructed by Dwyer and Willett Lawyers Pty Ltd

This proceeding involves two applications for review under the Water Act 1989. They are made under the following provisions of the Act:
- Section 64 - review of a decision under section 55(1) to approve a licence application under section 51(1)(b) to take and use groundwater (groundwater application);
- Section 83 - review of decision under section 69(1) to approve an application under section 67(1)(b) to construct a bore (bore construction application).
The application for review was lodged out of time. The purpose of the practice day hearing was to consider an application under section 126 of the Victorian Civil & Administrative Tribunal Act 1998 to extend time within which to commence the proceeding.
At the conclusion of the hearing I gave an oral decision refusing to extend time. I also ordered that the water authority, Goulburn Murray Water, pay the costs of the applicants and the respondents in connection with this hearing. My reasons for making these orders are set out below. However, first it is appropriate to make some observations about the operation of the provisions of the Water Act as they relate to advertising of applications under the Act and practices by the water authority in giving notice of its decisions.
In my opinion the provisions of the Water Act 1989 relating to advertising, notice and review rights are not well drafted and fall short of implementing a well integrated scheme to address these matters. There are gaps in the legislation having regard to the underlying purpose of the Act in providing for notice to be given to third parties and giving them rights of review. This case illustrates the problems created by these gaps in the legislation and there would be merit in amending the legislation to plug the gaps. In the meantime, there is equal merit in water authorities adopting good practice procedures to ensure that applications are advertised consistently and as a matter of course, and that notice of decisions is given to applicants and objectors alike at the same time and immediately a decision is made in order to enable any party to exercise their rights of review under the Act within time.
The increase in scarcity of water resources means that third parties now take a much keener interest than they may have done in the past decisions made by water authorities about the allocation of water resources in terms of new licences, the transfer of licences, and the construction of bores.
It is unfair if water authorities, by poor administrative practice, shut out people from exercising their rights to challenge such decisions.

Mr Mervyn Frederick Holmes and Mr Charles Gilbert Holmes (the Holmes) are dairy farmers. In March 2007 they made two applications to Goulburn Murray Water for a bore construction licence and a groundwater licence for 300 ML.
Goulburn Murray Water required the bore construction application to be advertised. It did not require the groundwater application to be advertised.
The Holmes advertised the bore construction application and three objections were received, including one from Michael and Alan Conroy (the Conroys). Their objection was acknowledged by Goulburn Murray Water by letter dated 26 April 2007, which included the following statement:

Goulburn Murray Water undertakes to advise you in writing, of the outcome of this application within one week of determining the matter.

On 27 August 2007, Goulburn Murray Water issued a bore construction works licence. It is not clear from the information available to the Tribunal exactly when Goulburn Murray Water advised the Holmes that their bore construction was granted, but no notice of this decision was given to the Conroys or other objectors.
On 10 April 2008, Goulburn Murray Water issued a groundwater licence for 180 ML. The Holmes were sent this licence on 10 April 2008, but again no notice was given to the Conroys or other objectors.
The Holmes drilled, constructed and developed the bore over 14 months and it became operational in late 2008. They started to use water from the bore from about December 2008 for irrigation purposes. They estimate that it has cost them approximately $150,000 to get the bore to its current finished state, plus the expense of setting up the area for irrigation.
Following inquiries by the Conroys, Goulburn Murray Water wrote to them (and the other objectors) on 9 January 2009 as follows:

Thank you for your submission received on 22 April 2007 in response to the abovementioned application.

Please accept my apology for not responding to you sooner on this matter.

Goulburn-Murray Water appreciates the time you have taken to identify those areas which you believed required consideration prior to G-MW determining this matter.

An assessment of the aplication has now been completed taking into account, amongst a range of matters, those set out in your submission.

Please be advised that the aplicant has been granted a licence in accordance with the application.

If you believe that you have an interest that can be shown to be demonstrably affected by the approval of this licence, you may appeal to the Victorian Civil & Administrative Tribunal (VCAT) for a review of this decision.

Any submssion to VCAT must be lodged within 28 days of the date of this letter.

The Conroys lodged this proceeding on 4 February 2009, which was within 28 days of the water authority's letter. However, an application must be made within 28 days of the day on which the decision is made. As the decisions were made on 27 August 2007 and 10 April 2008 respectively, the application for review was well out of time.

A person may apply for the issue of a licence to construct, alter, operate, remove or decommission any works on a waterway or a bore[1]. Notice may be required to be given of such an application, which may invite submissions on the application to be made[2]. A person whose interests are affected by the decision may apply to the Tribunal for review of a decision to refuse or approve an application[3]. An application for review must be made within 28 days after the day on which the decision was made[4]. However, there is no provision in the Act requiring notice of the decision to refuse or approve the application to be given to either the applicant or any other person.

A person may apply for the issue of a licence to take and use groundwater[5]. Notice of an application may be required to be given, which may invite submissions on the application to be made[6]. A person whose interests are affected by the decision to refuse or approve an application may apply to the Tribunal for review of the decision[7]. An application for review must be made within 28 days after the day on which the decision is made[8]. However, there is no provision in the Act requiring notice of the decision to refuse or approve the application to be given to either the applicant or any other person.

I discern the following shortcomings in the legislation:
- There is no obligation under the Act to give notice of an application for a works licence or a licence to take and use water. Giving notice of an application is at the discretion of the water authority.[9]
- A person whose interests are affected by a decision has a right of review to the Tribunal, but if third persons do not know about the application, they may be denied an opportunity to exercise that right.
- There is no obligation imposed on the water authority to give notice of its decision to anyone, yet rights of review must be exercised within 28 days after the day on which the decision was made.
- If there is no obligation to give notice of a decision, a person's right of review may be compromised by a failure to give notice in time for a person to exercise their right, which is what has occurred in this case.
- Rights of review are given to a person whose interests are affected. Rights of review are not limited to licence applicants or objectors.
In my view, there is a disconnect between the processes for requiring notice to be given of licence applications, giving notice of decisions, and rights of review, which should be addressed by amendment of the legislation.

Goulburn Murray Water says it had no statutory obligation to give notice to the Conroys of its decision to grant a licence for either construction of the bore or to take and use groundwater. In this respect it relies upon the gaps in the legislation I have identified above.
Goulburn Murray Water advised that with respect to an application for a bore construction licence, the applicant is "required" to place a newspaper advertisement in a local newspaper and, if the application is for volume greater than 50 ML, it must be advertised for two weeks and all neighbouring properties within a 1 kilometre radius must be given written notification of the application. It says that an application for a groundwater licence "is not required to be given to any other person other than the licensing Authority".
This may reflect the practice of Goulburn Murray Water, but it does not reflect the provisions of the Water Act 1989. With respect to both a bore construction licence and a groundwater licence, advertising may be required. A discretion exists with respect to both types of licence applications to require advertising. It seems that Goulburn Murray Water has a policy to require advertising of a bore construction licence application but not to require advertising of a groundwater licence application.
Goulburn Murray Water acknowledged that it did not notify the Conroys of the grant of the licences until January 2009. It accepted that, as a matter of courtesy, it should have notified them, although it had no statutory obligation to do so. Conversely, it submitted the Conroys did nothing to protect their own position by proactively following up on their objection.
The authority opposed an extension of time under section 126 of the Victorian Civil & Administrative Tribunal Act 1998 within which to commence the proceeding because it said the applicants have not demonstrated how their interests are affected by the decision or that they have any prospect of success.

(Given orally at the hearing and subsequently revised)

Both the applicants for review and the respondents have been disadvantaged by the actions of Goulburn Murray Water. I am not impressed by the unsatisfactory practices of Goulburn Murray Water and a lack of transparency in its decision making in this particular instance. If this is evidence of the way the authority normally conducts its business, it is about time that it set its house in order.
The number of applications for review under the Water Act 1989 coming to this Tribunal has increased significantly over the last couple of years. This is a product of the serious water shortages that we are facing in the State as a consequence of the prolonged drought. The Water Act 1989 was drafted in earlier times when the pressures on water resources were not as acute as they are now and third parties were not so interested in the grant of new licences or the construction of new bores.
I agree with parties that the Water Act 1989 is inadequate in establishing a clear process to safeguard the rights and obligations of people, but that does not mean for all its inadequacies, that water authorities administering the Act should not seek to give effect to the intentions of the Act. I discern a real intention in the legislation that notice should be given of applications. There is an equally clear intent to give people rights to seek a review of decisions which are made where their interests are affected. The essential link between these intentions requires that when notice of an application is given and third parties object, they are then given notice of the decision made so they may exercise their right of review.
I have no idea what went wrong in the present case, but something did go seriously wrong. To avoid similar injustices in the future, I think it is incumbent on the water authority to institute processes to ensure that its decision-making is fair and transparent, and that proper notice and communications are given to people who are potentially affected by the decisions that it makes.
Having said that however, I am faced with a situation where two sets of people have been disadvantaged by the actions of the authority. The applicants (the Conroys) have been disadvantaged by not being given notice of the decisions in a timely way that would have enabled them to exercise their right to apply for a review of the authority's decisions. The respondents (the Holmes) have been disadvantaged by now, after all this time, being faced with an application for review that may result in the withdrawal of or change to their licence and having their expectations challenged. Making my decision under section 126 of the Victorian Civil & Administrative Tribunal Act 1998 has been a real balancing exercise because I do not think the answer is necessarily clear cut one way or the other.
I consider that the Conroys did have a reasonable excuse for their delay. They were not given notice of the decisions by Goulburn Murray Water. This failure is compounded by the initial letter of acknowledgement by the authority in which it undertook to give them such notice. It was further compounded by the wording of the letter that was then sent to them in January 2009 indicating that they had rights of review and which was probably the stimulus for this proceeding.
Despite this, I have decided on balance that I am not going to extend time under section 126 for several reasons.
Firstly, there is the length of time that has elapsed since the Conroys first put in their objection in April 2007. There is no evidence that they have been proactive in any way in terms of following up on that objection or seeking to find out what had occurred. I believe there was a responsibility on the Conroys to be more diligent in pursuing and protecting their interests than they have been. About 18 months elapsed from the time they first put in their objection. Effectively, they have sat on their hands for that period of time. It does not mean they might not have thought about the licence applications and their fate, but there has been no evidence that they followed through with their concerns.
Secondly, in my view, the Holmes will suffer prejudice if this application for an extension of time to commence is granted. They may suffer significant financial loss associated with the investment they have made in the bore and irrigation infrastructure and consequential losses in connection with the operation of their farming enterprise. Whilst there is a potential detriment that may be suffered by the Conroys by the grant of the licences, it is not crystallised in quite the same way as the detriment that may be suffered by the Holmes.
Finally, there is a strong public policy interest in providing certainty to licence and permit holders. This is one of the reasons that underlies clause 65 of schedule 1 of the Victorian Civil & Administrative Tribunal Act 1998, which states that:
1. Extension of Time

(1) The Tribunal must not extend the time for commencing a proceeding under a planning enactment if -

...

(b) a permit, licence or works approval has been issued to any person on or after the expiration of the time appointed for lodging an application for review of the decision to grant that permit, licence or approval.

The Water Act 1989 is a planning enactment[10] to which clause 65 applies but, as I pointed out in Norton v Southern Rural Water[11], the provisions of clause 65 do not comfortably fit the circumstances of the provisions of the Water Act because a licence is issued as soon as the decision is made. There is no delay to allow for applications for review to be lodged between the time a decision is made and the licence is actually issued. Norton's case involved an application for extension of time under section 126 of the Victorian Civil & Administrative Tribunal Act 1998. After considering clause 65, I said:

[10] ... The Water Act 1989 does not have the same detailed provisions about not issuing permits until after the expiration of time for lodging applications for review as does the Planning and Environment Act 1987 for example. Thus the fact that the amended licence was issued before the expiration of the time appointed for lodging an application for review would not preclude such an application for review being lodged within the 28 day period. It is arguable whether clause 65 of schedule 1 prohibits an extension of time in the present circumstances given that the licence has not been issued "on or after the expiration of time appointed for lodging application for review". Indeed, it was issued before. However, I do not finally need to determine this point because I do not consider it is fair or equitable to extend time for other reasons. Nevertheless I consider that the intent of clause 65 of schedule 1 lends weight to these reasons, the intent being that once appeal times have expired and permits or licences have been issued they should not then be open to challenge.

In my view, clause 65 demonstrates an intention that once licences or permits etc are granted they should not really be readily upset. As I have said, there is a strong public policy interest in certainty attaching to the rights under such licences and permits and, especially as time progresses, such interest in the need for certainty gains weight. This is a further reason for my decision not to extend time.
However, as I have noted earlier it would be most inequitable if water authorities were to undermine third party rights of review by not giving notice of a decision until after the expiration of the time appointed for lodging an application for review of the decision to grant the licence, then relying upon clause 65 of schedule 1 of the Victorian Civil & Administrative Tribunal Act 1998 to oppose an extension of time within which to commence a proceeding under section 126 of the Victorian Civil & Administrative Tribunal Act 1998.
So, in summary, given the length of time that has elapsed since the licences were granted; the public policy desirability of protecting licences and permits once they are granted; and the lack of proactive action on the part of the Conroys to follow up on their objection, I have reached a decision, very much on balance, that in this particular instance I will not extend time. I have great sympathy for the Conroys, but my role is to make a decision as to what is just and fair and I believe that on this basis my conclusion is the preferable outcome.

Having said all of that however, I am going to make an order, that Goulburn Murray Water pay the costs of today's appearances for both the applicants and the respondents on the basis of section 109(3)(e) of the Victorian Civil & Administrative Tribunal Act 1998. I am satisfied it will be fair to make an award of costs of this nature because it is really the authority's actions regarding its handling of these licence applications and its subsequent correspondence that has led to the present regrettable situation. I do not believe that either party - the respondents or the applicants - should be out of pocket because of this. I will direct that costs be as agreed and failing agreement, there is liberty to apply to the Tribunal to fix those costs. The costs should include the actual costs of counsel, not scale costs.

[1] Section 67(1) Water Act 1989

[5] Section 51(1)(b) Water Act 1989. Section 51 also applies to a licence to take and use water from other sources as well.

[9] Under the Water Act 1989 the Minister is the decision making body. The water authorities act under delegation.

[10] Clause 2 of Schedule 1 of the Victorian Civil & Administrative Tribunal Act 1998

Conroy v Goulburn Murray Water & Ors (includes Summary) (Red Dot) [2009] VCAT 2108 (12 October 2009)

Conroy v Goulburn Murray Water & Ors

At a glance

Court

Decision date

Source

Judgment (32 paragraphs)

Parties

Cases Cited (1)

Conroy v Goulburn Murray Water & Ors (includes Summary) (Red Dot) [2009] VCAT 2108 (12 October 2009)