Green & Anor v Minister for Climate Change, Environment and Water

KEY ISSUES: Judicial Review :- construction and interpretation - savings and transitional regulations - water management plan - access licence - whether regulations contain a deeming provision - meaning of "since activation" in plan - application dismissed

Interpretation Act 1987 LEGISLATION CITED: Water Act 1912 Water Management Act 2000

CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 Cooper Brookes (Wollongong) Pty Limited v Federal Commissioner of Taxation (1981) 147 CLR 297 Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379 New South Wales Crime Commission v Kelly and Others (2003) 58 NSWLR 71 CASES CITED: Project Blue Sky Inc and Others v Australian Broadcasting Authority (1998) 194 CLR 355 Re Application of News Corporation Ltd (1987) 15 FCR 227 The Council of the Shire of Redland v Stradbroke Rutile Pty Ltd (1974) 133 CLR 641 St Aubyn v Attorney-General [1952] AC 15 Williams v United States of America and Another (2007) 161 FCR 220

APPLICANTS Mr D J Russell SC SOLICITORS Richard Harvey and Associates LEGAL REPRESENTATIVES:

RESPONDENT Ms M Allars SOLICITORS NSW Department of Water and Energy

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

BRUCE GREEN & LYNETTE JUDGE Applicants

MINISTER FOR CLIMATE CHANGE, ENVIRONMENT AND WATER Respondent

JUDGMENT Jagot J: A. Introduction 1 The applicants own a property known as Karibu Farm about 40km southwest of Narromine. The property had the benefit of a bore licence under s 115 of the Water Act 1912 (the 1912 Act). On 1 October 2006 a suite of legislative provisions came into force that had the effect of replacing the applicants' entitlements under the bore licence with an aquifer access licence under Pt 2 of Ch 3 of the Water Management Act 2000 (the Water Management Act).

2 The applicants and respondent disagree about the operation of the legislative provisions. The disagreement results in the applicants claiming that they are entitled to a replacement aquifer access licence containing a share component greater than provided for or acknowledged by the respondent.

3 Although it is necessary to consider the legislative scheme in detail in order to understand the competing positions of the parties, the issues generally fall within two classes as follows: (1) What is the effect of cl 29B of the Water Management (General) Regulation 2004 (the 2004 Regulation) as inserted by the Water Management (General) Amendment Regulation 2006 (the 2006 Regulation)? The respondent submitted that cl 29B deemed the applicants' entitlement to be an aquifer access licence with a share component as specified in Sch 4A to the 2004 Regulation as amended (namely, 439 units). As the respondent acknowledged this entitlement the applicants were not able to obtain declaratory or other relief. The applicants denied that cl 29B had this deeming effect. Rather, cl 29B confirmed the applicants' entitlement in accordance with the Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003. The number nominated in Sch 4A (439 units) was wrong and inconsistent with that plan. Accordingly, the Court should correct the error by construing Sch 4A consistently with the plan (which would have the effect of substituting a number greater than 439 in the schedule). (2) What is the meaning of cl 25C(4) of the Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003, specifically that part of cl 25C(4) that excludes from the history of extraction "zero and low extraction years since activation"? The applicants submitted that the word "since" took its ordinary meaning of "after" or "from".

The respondent submitted that the word "since" was a mistake and, construed in context, could not take its ordinary meaning of "after" or "from". Rather, the Court should construe the exclusion as referring to zero or low extraction years "prior to" activation. 4 Subject to one matter, there was no disagreement between the parties about the facts. If the applicants' submissions were accepted, however, the parties did not agree the effect on the applicants' share component. The parties agreed that, in this event, further evidence and submissions about the effect on the applicants' share component would be required.

B. Legislative scheme 5 Div 3 of Pt 5 of the 1912 Act regulates licences for artesian wells. The applicants had a bore licence under Pt 5 of the 1912 Act.

6 The object of the Water Management Act is "to provide for the sustainable and integrated management of the water sources of the State for the benefit of both present and future generations" (s 3). Section 2(1) of the Water Management Act provides that the Act is to commence on a day or days to be appointed by proclamation. Under s 2(2) different days may be appointed for the commencement of any provision of the Act. Insofar as relevant to these proceedings, the Water Management Act commenced on 1 January 2001.

7 Chapter 2 of the Water Management Act regulates water management planning. Pt 3 of Ch 2 deals with management plans generally. Pt 4 of Ch 3 deals with plans made by the Minister. Under s 50 the Minister may make a plan for any water source. The Minister may also amend any such plan (s 45). A Minister's plan must in general terms deal with any matters with which a management plan is required to deal (s 50(2)). To the extent that the plan deals with water sharing, it must contain provisions as identified in s 20 (core provisions for water sharing). Those matters include issues relating to access licences.

8 Access licences are provided for in Pt 2 of Ch 3 to the Water Management Act. Under s 55A, Pt 2 of Ch 3 applies as declared by proclamation. Section 56(1)(a) provides that a person holding an access licence is entitled to "specified shares in the available water…from a specified water source (the share component )". This share component of an access licence may be expressed in any of the ways identified in s 56(2), including as a specified number of units (s 56(2)(d)). There are many categories of access licences, including aquifer access licences (s 57(1)(e)).

9 Section 400(1) is part of the miscellaneous provisions of the Water Management Act in Ch 9. It provides that the Governor may make regulations, not inconsistent with the Act, for or with respect to any matter that by the Act is prescribed or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to the Act and, in particular, for or with respect to the matters nominated in paras (a) to (e).

10 Schedules 9, 10 and 11 to the Water Management Act have effect under s 403.

11 Schedule 9 concerns savings, transitional and other provisions. Clause 1 provides as follows: (1) The regulations may contain provisions of a savings or transitional nature consequent on the enactment of the following Acts: this Act Water Management Amendment Act 2002 Water Management Amendment Act 2004 State Water Corporation Act 2004 (but only in relation to the amendments made to this Act) Water Management Amendment Act 2005 (2) Such a provision may, if the regulations so provide, take effect from the date of assent to the Act concerned or a later day.

(3) To the extent to which such a provision takes effect from a date that is earlier than the date of its publication in the Gazette, the provision does not operate so as: (a) to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of that publication, or (b) to impose liabilities on any person (other than the State or an authority of the State) in respect of anything done or omitted to be done before the date of that publication.

(4) If the regulations so provide, such a provision has effect despite any other provision of this Schedule, Schedule 10 or Schedule 11. 12 Schedule 10 concerns the conversion of former entitlements to access licences and approvals.

13 Clause 1 of Sch 10 provides that the schedule applies to each category of access licence that relates (relevantly) to a water source to which Pt 2 of Ch 3 applies by operation of a proclamation under s 55A. 14 Clause 2 of Sch 10 defines certain terms including the following: appointed day means:

(a) in relation to a category or subcategory of access licence to which Part 2 of Chapter 3 applies or an entitlement from which such an access licence arises, the day appointed under section 55A in relation to that category or subcategory of access licence, or (b) … entitlement means:

(a) …, or (b) …, or (c) a licence referred to in Part 5 of the 1912 Act, or (d) …

former entitlement , in relation to an access licence or approval, means the entitlement from which the access licence or approval arises because of the operation of this Schedule.

replacement access licence , in relation to an entitlement, means an access licence (including any supplementary water access licence) that, by operation of this Schedule, arises from the entitlement or from a direction under section 20AA of the 1912 Act in relation to the entitlement. the 1912 Act means the Water Act 1912. 15 Clause 3(1)(a) of Sch 10 is as follows: (1) Subject to this Schedule, an entitlement that, immediately before the appointed day, was in force under the 1912 Act, the 1948 Act or the 1994 Act is taken to have been replaced: (a) to the extent to which it entitles any person or body to take a specified quantity of water, by an access licence held by that person or body (subject to such of the conditions of the entitlement as are applicable to an access licence): (i) for the quantity of water so specified, or (ii) if the relevant management plan, and regulations made for the purposes of this paragraph, indicate that a different quantity of water calculated in accordance with a specified methodology may be taken under an access licence issued in relation to the water management area or water source to which the management plan applies - for a different quantity of water calculated in accordance with that methodology, and …

16 Under s 336(1) of the Water Management Act any person may bring proceedings in the Land and Environment Court to remedy or restrain a breach of the Water Management Act or regulations.

17 The Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003 was published in the NSW Government Gazette on 26 February 2003. However, the plan did not commence at that time. Subsequent amendments deferred commencement a number of times. The plan commenced on 1 October 2006 as part of the suite of legislative provisions commencing on that day as described below. 18 First, under s 55A of the Water Management Act, a proclamation published in the NSW Government Gazette on 26 September 2006 declared that on and from 1 October 2006, Pt 2 of Ch 3 of the Act applied to nominated water sources to which nominated water sharing plans apply and to all categories and subcategories of access licence in relation to any such water source. The nominated water sharing plans were the Water Sharing Plan for the Lower Gwydir Groundwater Source 2003, the Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003, and the Water Sharing Plan for the Lower Murrumbidgee Groundwater Sources 2003.

19 Secondly, the 2006 Regulation (also published in the NSW Government Gazette on 26 September 2006) commenced on 1 October 2006 (cl 2). The explanatory note to the 2006 Regulation is in the following terms: The object of this Regulation is to modify the provisions of Schedule 10 to the Water Management Act 2000 (Conversion of former entitlements to access licences and approvals) in relation to the access licences that arise under that Schedule as a consequence of a proclamation under section 55A of that Act that extends the operation of Part 2 of Chapter 3 of that Act to the following water sources:

(a) the Lower Gwydir Groundwater Source, (b) the Lower Macquarie Groundwater Sources, (c) the Lower Murrumbidgee Groundwater Sources.

This Regulation is made under the Water Management Act 2000, including section 400 (the general power to make regulations) and clause 1 of Schedule 9 (the power to make regulations of a savings or transitional nature). 20 Clause 3 of the 2006 Regulation amended the 2004 Regulation as set out in Sch 1. Item [1] in Sch 1 inserted a definition into cl 3(1) of the 2004 Regulation as follows: Part 5 entitlement means a licence under Part 5 of the former 1912 Act. 21 Clause 3(1) of the 2004 Regulation also contains definitions of "appointed day" and "entitlement" generally consistent with the definitions of those terms in Sch 10 to the Water Management Act. "Water year" is defined as a year commencing 1 July.

22 Item [3] of Sch 1 to the 2006 Regulation inserted a new division after Div 3 of Pt 3 in the 2004 Regulation (Div 4 headed "Replacement Access Licences for certain Part 5 entitlements (1 October 2006)"). This new division contains cll 29A to 29E. Clauses 29A and 29B are as follows: 29A Application of Division This Division applies to and in respect of each Part 5 entitlement referred to Column 1 of in Schedule 4A [sic] , and to and in respect of each access licence arising from any such entitlement, but not to any other entitlement or access licence.

29B New share components for existing Part 5 entitlements (1) This clause applies for the purposes of clause 3 (1) (a), and clause 8, of Schedule 10 to the Act.

(2) On 1 October 2006, a Part 5 entitlement (or group of Part 5 entitlements) referred to in Column 1 of Schedule 4A is taken to have been replaced: (a) by an aquifer access licence with a share component of the volume specified in Column 2 of that Schedule, and (b) if a volume is specified in Column 3 of that Schedule, by a supplementary water access licence with a share component of the volume so specified. (3) The volumes specified in Columns 2 and 3 of Schedule 4A in relation to any Part 5 entitlement (or group of Part 5 entitlements) have been calculated in accordance with whichever of the following methodologies is relevant to that entitlement or group of entitlements: (a) …

(b) in the case of entitlements relating to the Lower Macquarie Groundwater Sources within the meaning of the Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003, the methodology set out in clauses 25C and 25D of that plan,

(c)… 23 Item [4] of Sch 1 to the 2006 Regulation inserted a new Sch 4A after Sch 4 in the 2004 Regulation. The entry in Sch 4A relevant to the applicants' property is in the following terms: Column 1 Column 2 Column 3 Part 5 entitlement Aquifer access Supplementary licence access licence

… 24 Thirdly, the Water Sharing Plan for the Lower Macquarie Groundwater Sources Amendment Order 2006 (also published in the NSW Government Gazette on 26 September 2006) commenced on 1 October 2006. Amongst other things, this Amendment Order inserted cll 25A to 25E into the Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003. I refer below to the Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003 as amended on and from 1 October 2006 as the plan.

25 Clause 2 of the plan provides that it is made under s 50 of the Water Management Act and covers the core provisions in s 20 for water sharing.

26 Clause 3 (substituted by the Amendment Order on 1 October 2006) says that the plan takes effect on 1 October 2006 and ceases on 30 June 2017.

27 Clause 4 deals with the area to which the plan applies. Under cl 4(1) the groundwater sources are divided into six zones. The applicants' property is within Zone 2.

28 Clause 5 identifies the waters to which the plan applies (all waters in the unconsolidated alluvial aquifers and the sandstone aquifers of the Great Artesian Basin within the area to which the plan applies).

29 Under cl 7(1) the plan applies from its commencement date to those matters that are administered under the Water Management Act at that time.

30 Clause 10 specifies the vision for the plan (to ensure the ecological, social, cultural and economic sustainability of the Lower Macquarie Groundwater Sources).

31 Clause 11 sets out the plan's objectives (to (a) maintain and, if necessary restore groundwater dependent ecological processes and biodiversity, (b) optimise or maximise the social outcomes of groundwater management, (c) contribute to a sustainable regional economy, (d) recognise and respect Aboriginal cultural responsibilities and obligations to the landscape, and (e) preserve and enhance the cultural benefits and values derived from groundwater).

32 Clause 12 contains the plan's strategies. The strategies include establishing an extraction limit for each groundwater source and reducing the total share component of access licences to the final extraction limit (cll 12(c) and (d)). Clause 27 specifies the applicable extraction limits in the various zones.

33 Pt 3 of the plan sets out the basis for water sharing. This basis is the average annual recharge to each groundwater source (cl 16). The average annual recharge for Zone 2 is specified as 26,600 ML/yr plus the requirements for basic landholder rights at the commencement of the plan.

34 Pts 4 and 5 respectively deal with environmental water provisions and basic landholder rights.

35 Pt 6 establishes a bulk access regime (see s 20(1)(e) and the Dictionary to the Water Management Act) for the extraction of water under access licences having regard to the environmental water provisions, basic landholder rights, and the requirements for water for extraction under access licences identified under Pt 7 of the plan (cl 24(2)).

36 Pt 7 contains cll 25 to 25E. Clause 25 was substituted on 1 October 2006 whereas cll 25A to 25E were inserted. Clauses 25A to 25D concern share components for domestic and stock access licences, local water utility access licences, aquifer access licences, and supplementary water access licences respectively. Clause 25E deals with changes to share components.

37 Clause 25C (aquifer access licences) includes the following provisions: (1) …

(3) For those Water Act 1912 entitlements in Zone 1, Zone 2, Zone 3, and Zone 4 that are to become aquifer access licences at the commencement of this Plan, the share component will be established in accordance with the following formula individually for each of these Zones:

(a) SC AAL is the share component of the aquifer access licence, (b) AE is the weighted entitlement calculated from the following formula: AE = (HOE x AR) + ((WAE - HOE) x (1 - AR))

where: (i) HOE is as defined in subclause (3) [sic] , (ii) AR is 0.69 in Zone 1, 0.72 in Zone 2, 0.77 in Zone 3 and 0.76 in Zone 4, (iii) WAE is the Water Act 1912 entitlement, (c) ΣAE is the total of all adjusted entitlements calculated under subclause (b), (d) R is the amount of recharge established in clause 16 (1) for each respective Zone, (e) PEW is the volume of recharge reserved as planned environmental water in clause 18 (1) for each respective Zone, (f) LWU is the total of local water utility access licence share components for the respective Zone at the commencement of this Plan, (g) SD is the total of domestic and stock access licences for the respective Zone at the commencement of the Plan, and (h) ΣSC is the sum of share components specified in Column 3 of Schedule 5.

(4) For the purposes of subclause (3) and clause 25D HOE, if the maximum water extraction in any one year during the period from 2000/01 to 2002/03 was less than or equal to 150% of the maximum water extracted in either 1998/99 or 1999/00, or was less than or equal to 50 ML, then the HOE will be the average metered extraction from 1998/99 to 2002/03 excluding zero and low extraction years since activation.

(5) For the purposes of subclause (3) and clause 25D HOE, if the maximum water extraction in any one year during the period from 2000/01 to 2002/03 was greater than 150% of the maximum water extracted in either 1998/99 or 1999/00, and was more than 50 ML, then the HOE will be calculated from the following formula: HOE = (2001/02 extraction + (2 x 2002/03 extraction))/3 Note. The rules for determining HOE are contained in Appendix 4.

(6) For the purposes of subclauses (4) and (5) zero and low extraction years are years where extraction was less than 20% of the maximum volume of water extracted in any one year up to and including the 2001/02 water year.

(7) For the purposes of subclauses (4) and (5) activation is defined as the first year up to and including the 2001/02 water year in which a licence holder extracted 20% or more of the maximum volume of water extracted in any one year between 1995/96 and 2001/02.

(8) It is estimated that at the time of commencement of this Plan, the share components of aquifer access licences authorised to extract water from theses groundwater sources will total 65,524 ML/yr, distributed as follows: (a) …, (b) 22,610 ML/yr in Zone 2, … , and (f) … 38 The dictionary to the plan includes definitions as follows: extraction limit is that proportion of the long term average annual recharge and storage which can be extracted each year without causing adverse impact on the environment or groundwater users, including landholders exercising basic rights.

recharge is the addition of water, usually by infiltration, to an aquifer.

water year is a 12 month period from 1 July to 30 June.

39 It was common ground between the parties that: (1) Activation of the applicants' bore licence occurred in the year 1998/99 in accordance with the meaning given to activation in cl 25C(7) of the plan.

(2) The alternative conditions precedent to the operation of the averaging provision in cl 25C(4) of the plan were both satisfied with respect to the applicants' property (that is, the maximum water extraction in any one year during the period from 2000/01 to 2002/03 was less than or equal to 150% of the maximum water extracted in either 1998/99 or 1999/00 and was less than or equal to 50 ML). Accordingly, cl 25C(4) is relevant.

(3) The metered extraction with respect to the applicants' property was 249ML in 1998/99, 320ML in 1999/00, 5ML in 2000/01 and 0ML in 2001/02 and 2002/03.

(4) The share component of 439 units reflects a total resulting from a calculation in which an average is taken of the metered extraction for each of the years 1998/99 to 2002/03. The average metered extraction on this basis is 115ML.

(5) If the zero or low extraction years in 2000/01, 2001/02 and 2002/03 (see the definition of zero or low extraction years in cl 25C(6)) were excluded from the averaging process then the average metered extraction would be greater (284.5ML).

40 The Department of Natural Resources prepared a spreadsheet of converted entitlements for the purposes of cl 25C of the plan. The calculation in that spreadsheet was in accordance with the method identified in (4) above (that is, resulting in a share component of 439 units). On 2 February 2007 the Department received a letter from the applicants disputing their share component of 439 units. The next day the applicants forwarded a further letter noting that their share component should be based on a history of extraction of 267ML (not 115ML, with the difference from 284.5ML explained by the applicants using a different figure for metered extraction in one of the two earlier years). The applicants said the years 2000/01, 2001/02 and 2002/03 were zero or low extraction years and should be excluded from the averaging process. The Director-General of the Department responded on 17 July 2007 to the effect that their share component was based on a history of extraction of 115ML and that while they had "correctly identified an error in the drafting" of cl 25C(4) of the plan, their entitlement had been determined correctly in accordance with the recommendations of the Central West Catchment Management Authority as approved by the NSW and Commonwealth governments. Further, that the error "is being corrected". Mr Coady, an officer within the Department and author of the draft of the letter signed by the Director-General, said that the error to which the letter referred was that the word "since" in cl 25C(4) should be "prior to". C. Submissions 41 The applicants submitted that: (1) The so-called explanatory material relied on by the respondent (including Mr Coady's explanation of the asserted error in the plan) is irrelevant to the task of construction of cl 25C(4). The plan is not a statutory rule and ss 33 and 34 of the Interpretation Act 1987 do not apply. The common law is more restrictive. In any event, legislative intention is not discernible from the opinions of Departmental officers. No weight may be placed on information disseminated by the Department before the plan was made, as the plan was the result of a process of consultation incomplete at that time. In particular, the document "Key amendments to Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003" concerned proposed changes subject to comments as the first page discloses. Further, the respondent's reliance on the history of extraction provisions in the other plans that were amended on or after 1 October 2006 (Water Sharing Plan for the Lower Gwydir Groundwater Source 2003, Water Sharing Plan for the Lower Murrumbidgee Groundwater Sources 2003, and Water Sharing Plan for the Upper and Lower Namoi Groundwater Sources) so as to exclude zero and low extraction years "prior to" activation is misplaced. Those plans have no bearing on the construction of the plan in the present case. They involve different water sources, management regimes, and formulae for calculating the history of extraction. (2) The respondent's approach to the purposive construction of cl 25C(4) involves an illegitimate assumption, namely, that construing "since" as "prior to" would better accord with the purpose the plan was intended to achieve. However, there is no evidence supporting that assumption. In the applicants' case, giving "since" its ordinary (and only) meaning would result in a greater share component due to the applicants' date of activation and history of extraction. If the correct approach were adopted for all converted entitlements the consequence for the water source overall remains unknown. Further, the respondent's approach would involve a policy of punishing those who have been frugal with water after activation. There is no basis for discerning any such legislative intention.

(3) The authorities relied on by the respondent involve construing an ambiguous word or phrase. The exclusion from the averaging process in cl 25C(4) is not ambiguous. The words "since activation" are capable of only one meaning. The respondent's asserted meaning of "prior to" is the opposite of the only meaning of "since".

(4) In contrast to most of the authorities relied on by the respondent, the respondent did not suggest that "prior to" was one possible meaning of "since". The respondent asserted that "since" was an error in cl 25C(4) of the plan. The authorities about correcting errors did not extend to replacing one word having a clear and obvious meaning with other words merely because of asserted error or assumed inconsistency with some Departmental policy not apparent from the legislative provisions. Rather, reading a text in a manner that corrected error was the result of repugnancy or absurdity manifest from the provisions of the statute construed as a whole.

(5) The meaning of cl 25C(4) of the plan is not attended by any ambiguity. The zero and low extraction years since activation are to be excluded from the averaging process. The applicants are entitled to an aquifer access licence for a share component derived from a calculation excluding those years by operation of cl 3(1)(a)(ii) of Sch 10 to the Water Management Act and cl 25C(3) and (4) of the plan.

(6) Clause 29B of the 2004 Regulation (as inserted by the 2006 Regulation) does not assist the respondent. The applicants accepted that the regulation was valid. However, it does not operate as a deeming provision taking away the applicants' rights. First, cl 1(4) of Sch 9 enables a regulation to prevail over Sch 10 only if the regulations "so provide" (as the provision operates against the general regulation making power in s 400 under which regulations may not be inconsistent with the Act). Clause 29B does not so provide. The contrast between cl 29B (which discloses no intention to prevail over Sch 10) and cll 29C to 29E is marked. Those clauses operate directly on the text or meaning of Sch 10 whereas cl 29B does not. The provision may also be contrasted with cl 8 of Sch 10. Secondly, cl 29B(3) discloses the true operation of cl 29B(3) as confirmatory of the applicants' rights to an access licence with a share component calculated in accordance with cl 25C(3) and (4) of the plan. This is consistent with the certificate issued by the Minister under s 87B of the Water Management Act. This certificate (being a public document) confirms that the applicants' share component (wrongly said to be 439 units) is based on the plan and not cl 29B of the Regulation. It is also consistent with the Department's actual approach to the applicants' entitlement as explained in Mr Coady's affidavit.

(7) There is an inconsistency between the confirmation of the applicants' rights in accordance with cl 3(1)(a) of Sch 10 and the plan under cl 29B and the number in Sch 4A. Which has primacy? Orthodox application of the same authorities relied on by the respondent requires the inconsistency to be resolved by correcting the erroneous number 439 in Sch 4A (which is repugnant to cl 29B) with the correct number calculated in accordance with cl 25C(3) and (4) of the plan.

(8) The respondent's references to the rights of third parties and inconvenience as a consequence of the correction of the error do not displace the applicants' rights. The applicants sought relief in respect of their own entitlement only. The consequences for third parties were speculative in any event, particularly given that the total in cl 25C(8) (22,610 ML/yr in Zone 2) differed from the recharge amount in cl 16 (26,600 ML/yr in Zone 2).

(9) The Court has jurisdiction to make a declaration and consequential orders generally as sought by the applicants in their Class 4 application. The respondent's calculation of the applicants' entitlement was not carried out in accordance with cl 25C(3) and (4) of the plan. The applicants are entitled to an aquifer access licence with the correct share component. The respondent's denial of the applicants' entitlement is in breach of the Water Management Act and cl 29B of the 2004 Regulation (properly construed).

42 The respondent submitted that: (1) The legislative scheme must be understood as a whole. The plan commenced on 1 October 2006 as a consequence of the Amendment Order (of which cl 25C(3) and (4) formed part). On the same day the proclamation declared that, on and from 1 October 2006, Pt 2 of Ch 3 of the Water Management Act applied to the water source to which the plan applied (and two other water sources the subject of their own plans). Further, on that day, the 2006 Regulation (containing cl 29B and Sch 4A) commenced operation amending the 2004 Regulation.

(2) In this context it is wrong to speak of cl 29B as taking away the applicants' rights. Clause 29B operates on and from 1 October 2006 in common with the plan. Further, the text of cl 3(1)(a)(ii) of Sch 10 to the Water Management Act (relied on by the applicants) also has to be read as a whole. The clause opens with the words "Subject to this Schedule, an entitlement that, immediately before the appointed day, was in force under the 1912 Act, …is taken to have been replaced…". This sets the context for the operation of that which follows, namely, a deeming provision that operates by reference to both the relevant water management plan and the regulations "for the purposes of this paragraph". Clause 29B(1) discloses the function of cl 29B in terms ("This clause applies for the purposes of clause 3(1)(a), and clause 8, of Schedule 10 to the Act."). There could not be any real doubt that cl 29B is part of the deeming provision expressly contemplated by cl 3(1)(a) of Sch 10.

(3) The words "If the regulations so provide…" in cl 1(4) of Sch 9 are a reference back to regulations containing provisions of the kind authorised by cl 1(1) of that Schedule (namely, provisions of a savings or transitional nature consequent on the enactment of the Acts nominated therein). Those words do not require the regulations to expressly identify that they have effect "despite any other provision of this Schedule, Schedule 10 or Schedule 11". Provided the provisions are of the relevant kind within the meaning of cl 1(1) they will have effect despite those schedules because of cl 1(4) (a "Henry VIII" clause). Notably, cll 29C to 29E do not expressly recite that they have effect despite any other provision of Sch 10. Nor does a deeming provision have to use any particular form of words. Clause 3(1)(a) and cl 29B(2) both adopt the formula "is taken to have been…" which is a reasonably common type of deeming provision and apt for its purpose. There was no need for cl 29B(3) to repeat the formula (particularly given the opening words of cl 3(1)(a) of Sch 10). Clause 29B(3) simply specifies the result of the calculation as set out in Sch 4A. It does not matter whether the content of Sch 4A involves a fiction or merely provides certainty to that which might otherwise be uncertain. A deeming provision may create a statutory fiction, put a matter in doubt beyond doubt, or include a description of what is obvious, uncertain or potentially impossible ( St Aubyn v Attorney-General [1952] AC 15 at 53. See also The Council of the Shire of Redland v Stradbroke Rutile Pty Ltd (1974) 133 CLR 641 at 655 and Re Application of News Corporation Ltd (1987) 15 FCR 227 at 239 and 253).

(4) This approach reflects the precise terms of the explanatory note to the 2006 Regulation. The explanatory note says that its purpose is to modify Sch 10 as a consequence of the proclamation that took effect on 1 October 2006 extending the operation of Pt 2 of Ch 3 of the Water Management Act to the water sources there nominated (including the Lower Macquarie Groundwater Sources). The applicants accept the validity of the 2004 Regulation (as amended by the 2006 Regulation). Clause 29B thus operates in accordance with its terms by reason of cl 1(4) of Sch 9.

(5) It is true that cl 3(1)(a) of Sch 10 appears to have been drafted on the assumption that the operation of the plan and the regulations would yield the same result. Leaving aside the argument about the proper construction of the word "since" in cl 25C(4) of the plan, this potential inconsistency is resolved by cl 1(4) of Sch 9 pursuant to which the regulations have effect despite cl 3(1)(a) of Sch 10. The consequence is that the applicants' entitlement is deemed to be an aquifer access licence with a share component of 439 units as provided for in cl 29B.

(6) Other difficulties with the applicants' argument about cl 29B are apparent. The last step in the argument involves replacing a number (439) with some other number (530 according to Mr Green's affidavit and 541 according to the amended Class 4 application). The Governor, on the advice of the Executive Council, amended the 2004 Regulation by making the 2006 Regulation containing cl 29B and Sch 4A, with the applicant's entitlement identified as an aquifer access licence having a share component of 439 units. Having accepted the validity of the regulations, the applicants' arguments (if accepted) would encroach unacceptably on the Governor's discretion to make the regulations. They would do so by reference to a Minister's plan, being a lower order instrument in the legislative hierarchy.

(7) Accordingly, and irrespective of the proper construction of cl 25C(3) and (4) of the plan, the applicants cannot assert any right to an aquifer access licence with a share component other than 439 units as provided for in cl 29B and Sch 4A of the 2004 Regulation (as amended).

(8) With respect to cl 25C(4) of the plan, it is axiomatic that a court need not find ambiguity in any provision before considering the context ( CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 at 408 and Cooper Brookes (Wollongong) Pty Limited v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304, 320 - 321. See also Williams v United States of America and Another (2007) 161 FCR 220 at [59]). The context of cl 25C(4) of the plan is that on the same day that the provisions of the plan commenced, the Governor made a regulation including cl 29B and Sch 4A prescribing the result of the calculation required by cl 25(3) and (4) as 439 units. There could hardly be a more powerful indicator that the proper reconciliation of all of the provisions of the legislative scheme ( Project Blue Sky Inc and Others v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] - [70]) requires "since" to be read as meaning "prior to". This conclusion is supported by cl 1(4) of Sch 9 establishing a hierarchy in which savings and transitional regulations prevail over cl 3(1)(a) of Sch 10 and the reference therein to the relevant water management plan. This approach to construction is analogous to that undertaken by the Court of Appeal in New South Wales Crime Commission v Kelly and Others (2003) 58 NSWLR 71 at [20] - [24]).

(9) Other indicators supported the respondent's construction of cl 25C(4) of the plan. First, "activation" as defined in cl 25C(7) may occur at any time between 1998/99 and 2001/02. Clause 25C(5) provides a special regime where water extraction during the latter part of the period sufficiently exceeds water extraction during the earlier part. In any such case, a different formula applies. This different formula requires metered extraction to be averaged over the period 2001 to 2003 with the extraction in 2003 being doubled. There is a consistent policy objective based on fairness considerations apparent from these provisions. Where activation occurred later in the period, zero and low activation years before activation are to be disregarded. The mischief to which cl 25C(4) is directed is unfairness by including within the averaging process zero and low extraction years before a person has commenced their development. The applicants' approach, however, would involve giving more water to a person where their history of extraction shows reduced or even no water use (such as resulting from having ceased production altogether after activation). Secondly, the draft plan (as amended) was exhibited with a document "Key amendments to Water Sharing Plan for the Lower Macquarie Groundwater Sources 2003". This document describes the approach to history of extraction for this groundwater source as excluding zero and low extraction years prior to activation. It also describes the special regime applying to late developers. See also the equivalent provisions in the other water sharing plans that commenced or were amended on or after 1 October 2006 (including those referred to in the same proclamation) where the words "prior to" are used. Thirdly, cl 25C(4) of the plan discloses that share components are a proportion of the total of all adjusted entitlements. Hence, any alteration of one share component will necessarily alter the balance. For example, as one part of this interconnection, even if the applicants' share component increases in isolation, the sum of all share components (represented by ΣAE in the formula), being the denominator in the first part of the formula, will change for all other licence holders. Given that cl 29B and Sch 4A of the 2004 Regulation provide certainty as to share componen ts it is unlikely that a purpose of the plan (cl 25C(4) specifically) was to cause public inconvenience by changing the denominator of each and every calculation. (10) When analysed, the applicants' complaint is that the respondent has acted in breach of cl 25C(3) and (4) of the plan, although even then it is difficult to see what act the respondent has carried out given the deeming provision in cl 29B of the 2004 Regulation. A declaration or order based on breach of the Act or regulations as provided for in s 336 of the Water Management Act would need to confront the fact that cl 29B provides for the applicants' licence to be one for a share component of 439 units. (11) For the reasons given above, the applicants are not entitled to any relief. Further, given the public inconvenience and potential effect on the rights of third parties who had not been heard, relief should not be granted in the exercise of discretion.

D. Discussion 43 It did not escape the notice of either party that they relied on the same authorities; the applicants to support their argument that the number 439 in Sch 4A to the 2004 Regulation (as amended) must be wrong and thus adjusted, and the respondent to support the argument that the word "since" in cl 25C(4) of the plan was wrong and had to be read as meaning "prior to". Both arguments thus involve a process of reconciliation of apparently inconsistent provisions. However, the merits of the competing arguments are not equal. For the reasons given below, I accept the respondent's submissions about the operation of cl 29B of the 2004 Regulation and cl 25C(4) of the plan. The only aspect of the submissions from which I would depart is that it is unnecessary to have regard to any extrinsic material to support the respondent's position (other than, perhaps, the explanatory note for the 2006 Regulation).

44 The respondent correctly identified the importance of recognising that a legislative scheme commenced on 1 October 2006 (albeit against the background of the other operative provisions of the Water Management Act). The scheme commenced by reason of the proclamation (by which Pt 2 of Ch 3 of the Water Management Act applied to the Lower Macquarie Groundwater Sources), the 2006 Regulation amending the 2004 Regulation, and the Amendment Order amending and providing for the commencement of the plan.

45 The function of cl 1(4) of Sch 9 to the Water Management Act within that scheme is clear. Sch 9 has effect by reason of s 403. Section 403 is not subordinate to s 400, and nor is cl 1 of Sch 9. When cl 1 of Sch 9 is construed as a whole it is apparent that the words "If the regulations so provide…" in cl 1(4) (which also appear in cl 1(2)) are a cross-reference to the type of regulations contemplated by cl 1(1). If the regulations contain provisions of the type identified in cl 1(1) then those provisions will take effect despite any other provision of Sch 9, 10 or 11. The purpose of a savings and transitional regulation (to provide for a different application of statutory provisions on existing rights and obligations) supports this conclusion. Hence, the starting point is that regulations of a savings or transitional nature consequent on the enactment of the nominated Acts take primacy over Sch 9, 10 and 11.

46 The 2006 Regulation is a regulation of the type referred to in cl 1(1) of Sch 9. The 2006 Regulation inserted Div 4 of Pt 3 (within which cll 29B to 29E are located) into the 2004 Regulation. The topic with which Div 4 of Pt 3 is concerned is replacement access licences for certain Part 5 entitlements (defined so as to include a bore licence as held by the applicants before 1 October 2006). In other words, the whole of Div 4 of Pt 3 contains provisions of a savings or transitional nature consequent on the enactment of the Water Management Act (in particular, Pt 2 of Ch 3 of that Act, which applied in relation to the Lower Macquarie Groundwater Sources from 1 October 2006 by reason of the proclamation under s 55A). Accordingly, cl 29B has effect despite any other provision of Sch 9, 10 or 11.

47 The fact that cl 29B does not refer to cl 1 of Sch 9 to the Act (in contrast to cll 29C to 29E) is not determinative. Clause 29B(2) says that it applies for the purposes of cl 3(1)(a) of Sch 10. It provides that on 1 October 2006 a Part 5 entitlement "is taken to have been replaced by" an aquifer access licence with a share component as identified in Sch 4A. That provision has effect despite the provisions of Sch 10 (including cl 3(1)(a)). Although the method of achieving this result is cumbersome it is probably explained, as the respondent acknowledged, by an assumption underlying cl 3(1)(a) that the regulations would accord with the result of a calculation in accordance with the plan. Whether that is so or not, the legislative scheme (cl 1(4) of Sch 9) identifies the provisions that take precedence.

48 Clause 29B(3) does not lead to a different conclusion. The apparent inconsistency between cl 29B(2) (at least insofar as it refers to Sch 4A) and cl 29B(3) depends on the applicants' construction of cl 25C(4) of the plan being accepted. On that assumption, the apparent inconsistency is capable of resolution. Clause 29B(3) must be construed in context, including the context set by cl 3(1)(a) (which itself expressly contemplates a deeming exercise), cl 29B(2) (which expressly declares the fact of replacement of the Part 5 entitlement by an aquifer access licence with a share component as set out in Sch 4A) and cl 1(4) of Sch 9. In this context, cl 29B(3) is to be understood not as confirming any right to have a calculation carried out in accordance with cl 25C of the plan, but as specifying that the share component in Sch 4A is the result of such a calculation. Whether it creates a statutory fiction or not, Sch 4A takes effect despite cl 3(1)(a) of Sch 10.

49 The explanatory note to the 2006 Regulation supports these conclusions. It says that the object of the regulation is to modify Sch 10 as a consequence of the proclamation under s 55A. It says that the regulation is made under s 400 and cl 1 of Sch 9. The words "is taken to have been replaced…" are, as the respondent submitted, apt to achieve that purpose. It was not necessary for cl 29B to use any different language. The clause did not need to say that it was taking something away from the applicants. Nothing was being taken away from the applicants for the reasons given by the respondent. On and from 1 October 2006 the applicants' bore licence is taken to have been replaced by an aquifer access licence with a share component of 439 units. The applicants did not enjoy any greater or different rights by reason of cl 25C(3) and (4) of the plan because the plan operated (also from 1 October 2006) as only one part of the legislative scheme.

50 It follows that, as the respondent submitted, and irrespective of the proper construction of cl 25C(3) and (4) of the plan, the applicants cannot assert any right to an aquifer access licence with a share component other than 439 units as provided for in cl 29B and Sch 4A of the 2004 Regulation (as amended).

51 Nevertheless, I also accept the respondent's approach to the proper construction of cl 25C(4) of the plan. It is true that, when considered in isolation, reading the word "since" as meaning "prior to" appears to go beyond what might be contemplated by application of the principles of statutory construction. But the clause cannot be read in isolation. The context reveals a different complexion. By context, I do not mean any vague conception of Departmental policy or the opinions of a Departmental officer but, rather, the legislative scheme as a whole.

52 First, the plan is a form of delegated legislation. The fact that ss 33 and 34 of the Interpretation Act do not appear to apply to the plan does not exclude consideration of context. The preferred construction remains one that is consistent with the language and purpose of all of the provisions of the legislative scheme ( Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379 at [36], citing Project Blue Sky at [69] and [78]). The share component of the applicants' replacement aquifer access licence (439 units) and all of the other share components in Sch 4A (as I infer from the spreadsheet annexed to, and paragraphs 21 to 23 of, Mr Coady's affidavit), reflect a calculation in accordance with cl 25C of the plan on the basis that zero and low extraction years prior to activation are to be excluded. If cl 29B does not operate as a deeming provision, the respondent's submission that the inconsistency should be resolved by adjusting the meaning of "since activation" rather than purporting to substitute different share components in Sch 4A is persuasive for a number of reasons. Clause 29B and Sch 4A apply in terms to the operation of the plan (rather than the reverse). The 2004 Regulation (as amended) was made by the Governor on the advice of the Executive Council and is a disallowable instrument under the Interpretation Act 1987 whereas the plan is made by the Minister and is not subject to disallowance. Of its nature a "share component" is incapable of being determined in isolation from the total share component (the denominator in the relevant equation). Hence, the number "439" in Sch 4A cannot be looked at in isolation from the other numbers in the schedule irrespective of the fact that the applicants only seek relief on their own account.

53 Secondly, the respondent's analysis of the operation of cl 25C is compelling. The fact that the average annual recharge (cl 16) exceeds the estimated total extraction (cl 25C(8)) is to be expected in a plan that: - (i) has as its first objective maintaining and if necessary restoring groundwater dependent ecological processes and biodiversity (cl 11(a)), and (ii) includes strategies (cl 12) for establishing environmental water rules, establishing an extraction limit, and reducing the total share component of access licences to the final extraction limit (which appears to mean simply the extraction limit). Clause 25C(5) (and the benefit it provides to people where activation has occurred in the later part of the period, particularly the exclusion of the earlier years from the averaging process) makes little, if any, sense if cl 25C(4) enables people who activated earlier within the period to exclude zero and low extraction years after activation. As the respondent submitted, the applicants' approach would reward a person who had activation in 1998/99 but then ceased their water dependent activity altogether (as their share component would then be based solely on the extraction in 1998/99).

54 Although the applicants correctly submitted that the overall effect of their construction of cl 25C(4) was not ascertainable on the evidence, some effects are clear. Those who, for whatever reason, had zero or low extraction years despite the fact of activation would end up with a greater share component than they otherwise would enjoy. Further, it would be an extraordinary coincidence if the total share component did not alter (thereby changing all share components). The applicants' counter example (the frugal person who had reduced dependence on extraction after activation would be punished) is also telling. Given the strategy of reducing the total share component to the extraction limit, not allowing people to extract more water than they demonstrably require makes sense. This is particularly so given that the plan is a water sharing plan under which access is obtained by many people to a single resource which apparently replenishes itself at a finite rate. The respondent's construction is consistent with the purpose and operation of the plan as a whole, but the applicants' construction is not.

E. Conclusions and orders 55 The applicants' bore licence, on and from 1 October 2006, is taken to have been replaced by an aquifer access licence with a share component of 439 units as provided for in cl 29B and Sch 4A of the 2004 Regulation (inserted by the 2006 Regulation). Clause 29B takes effect despite cl 3(1)(a) of Sch 10 to the Water Management Act and, hence, the plan. In any event, I accept the respondent's approach to the proper construction of cl 25C(4) of the plan in the context of the overall legislative scheme.

56 It follows the applicants are not entitled to any relief as claimed. Accordingly: (1) The Class 4 application is dismissed. (2) The exhibits are returned. (3) The applicants are ordered to pay the respondent's costs as agreed or assessed. (4) If the applicants, within 21 days, notify the Registrar and respondent that they wish to be heard in relation to costs, then order (3) is set aside and the proceedings are to be listed for mention for directions and fixing of a date for a costs hearing. Notice to the Registrar may be by E-Court or facsimile. ****************************

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