PARTIES: GUNNS LIMITED (Receiver and Manager Appointed)

Torts - Negligence - Duty of care - Essentials of action for negligence - Duty of care - Reasonable foreseeability of damage - Particular cases - Affecting public authorities - No duty of care for Minister to determine application for water licence within a reasonable time.

Defendant: Director of Public Prosecutions (Acting)

Judgment Number: [2015] TASSC 52

1. On 23 May 2005 Gunns Limited applied under the Water Management Act 1999 for a permit to build a 295 megalitre dam on a property near Evandale in Tasmania to irrigate a planned vineyard development for its business "Tamar Ridge Wines". At the same time it applied for a licence to take an equivalent quantity of water for the dam from the watercourse on which the dam was to be constructed. The dam permit was approved on 24 October 2005. The dam was constructed over the course of 2008, 2009 and 2010 at the total cost of almost $750,000. The water licence application was not dealt with until 2011. Gunns was notified that without further information it would be allocated only 16.6 megalitres of water, and not the 295 megalitres it had applied for. In this action Gunns claims damages against the State on a number of grounds arising from the manner in which the water licence application was dealt with (or not dealt with). In short summary, the causes of action relied on by the plaintiff are negligence, negligent misstatement and estoppel. The plaintiff's claims and the facts which lie behind them will be elaborated on later in these reasons.
2. A receiver and manager was appointed for Gunns Ltd on 25 September 2012. A liquidator was appointed on 5 March 2013.

1. Tasmania's water resources are managed in accordance with the Water Management Act 1999 ("the Act"). The Act abolishes all rights existing at common law to the flow of, or for the taking of, naturally occurring water: s 7(1). Except as provided in the Act all rights to the taking of water from the water resources of Tasmania are vested in the Crown to be administered in accordance with the Act: s 7(2). The provisions of the Act are of broad application. What follows is an explanation of the provisions of relevance to this action. I will describe the provisions of the Act as in force at the time the applications were made. The Act remains substantially the same although there have been some amendments to the relevant provisions since then. I will refer as and if necessary to any relevant amendments made during the period between the making of the application for a water licence and its determination.
2. The objectives of the Act are set out in s 6:

"(1) The objectives of this Act are to further the objectives of the resource management and planning system of Tasmania as specified in Schedule 1 and in particular to provide for the use and management of the freshwater resources of Tasmania having regard to the need to -

(a) promote sustainable use and facilitate economic development of water resources; and

(b) recognise and foster the significant social and economic benefits resulting from the sustainable use and development of water resources for the generation of hydro-electricity and for the supply of water for human consumption and commercial activities dependent on water; and

(c) maintain ecological processes and genetic diversity for aquatic and riparian ecosystems; and

(d) provide for the fair, orderly and efficient allocation of water resources to meet the community's needs; and

(e) increase the community's understanding of aquatic ecosystems and the need to use and manage water in a sustainable and cost-efficient manner; and

(f) encourage community involvement in water resource management.

(2) It is the obligation of the Minister, the Secretary, a water entity and any other person on whom a function is imposed or a power is conferred under this Act to perform the function or exercise the power in such a manner as to further the objectives specified in subsection (1) and in Schedule 1."

1. Schedule 1 of the Act repeats the Objectives of the Resource Management and Planning System of Tasmania common to legislation dealing with the use and development of resources, including the Resource Management and Planning Appeal Tribunal Act 1993, the Land Use Planning and Approvals Act 1993, the Environmental Management and Pollution Control Act 1994, the Historic Cultural Heritage Act 1995 and the Living Marine Resources Management Act 1995, to name a few. The objectives are:

"(a) to promote the sustainable development of natural and physical resources and the maintenance of ecological processes and genetic diversity; and

(b) to provide for the fair, orderly and sustainable use and development of air, land and water; and

(c) to encourage public involvement in resource management and planning; and

(d) to facilitate economic development in accordance with the objectives specified in paragraphs (a), (b) and (c); and

(e) to promote the sharing of responsibility for resource management and planning between the different spheres of Government, the community and industry in Tasmania."

1. The interpretation section in the Act, s 3, contains definitions of terms used in the Act. "Water resource" is defined. It includes "a watercourse". A "watercourse" means "a river, creek or other natural stream ... and includes (a) a dam that collects water flowing in any such stream". "Taking" water from a water resource includes "(b) stopping, impeding or diverting the flow of water over land (whether in a watercourse or not) for the purpose of collecting or storing the water ...". Part 6 of the Act creates a regime for the "Licensing and Allocation of Water". With exceptions that do not apply here, a person must not, without a licence, take water from a watercourse or take dispersed surface water, without a licence: s 54(1). Part 8 of the Act provides for the "Construction of Dams". A "dam" includes any structure that holds back or impedes the flow of water: s 3. The construction of a dam is "dam works": s 3. It is an offence to undertake dam works without, or other than in accordance with, a permit: s 146(3).
2. It follows from these provisions that a person who wishes to lawfully construct a dam to collect and store water from a watercourse requires two things; first a permit to construct the dam, and second, a licence to take the water.
3. Applications for a dam permit are made to a body constituted under s 138 of the Act named the Assessment Committee for Dam Construction ("the Assessment Committee"). It consists of six members appointed by the Minister nominated by various environmental, government, agricultural and commercial agencies or organisations. The members are to have collective expertise in management of water resources, the use and economic development of water resources, engineering and safety matters relating to dams, the integrated natural resource management and best practice environmental management: s 139(1), (2), and (6). Its functions are set out in s 143. They include to consider applications for permits, to grant or refuse permits and to determine conditions to apply to permits: s 143(1)(a). In performing its functions the Assessment Committee must have regard to prescribed standards for the design and construction of dams: s 143A. The Assessment Committee must give public notice of an application within 14 days of its receipt: s 149(1). Such notice is to specify a period of at least 14 days within which written representations may be made by any person "who may be affected by the application": s 149(2)(c) and (d). The Assessment Committee is subject to a general time limit to approve or refuse the application of 12 weeks from lodgement of the application: s 164. It may require additional information it considers reasonably necessary for its proper consideration of the application: s 154. Such additional information may relate to a broad range of matters including water resources or hydrology, engineering or dam safety matters and environmental management. If additional information is required the application must be granted or refused within six weeks from the provision of the information: s 164(b). After considering an application, any additional information and any representations, the Assessment Committee may grant or refuse a permit: s 157(1). Any permit may be subject to conditions specified in the permit: s 157(2)(b). In determining the application the Assessment Committee must comply with s 156 which, at the relevant time, provided that the Assessment Committee must:

"(a) seek to further the objectives of the Act; and

(b) act consistently with any relevant water management plan; and

(c) take into consideration any prescribed matters relevant to the application; and

(d) take into consideration any additional information provided under section 154; and

(i) the effect of the water or other stored material on the impoundment area of the dam; and

(ii) the chemical nature and stability of the material contained by the dam; and

(iii) the advice of the relevant authority referred to in section 165F(1); and

(e) take into consideration the matters set out in representations relating to the application that were made during the period referred to in section 149(2)."

1. The Act places no limit on what conditions the Assessment Committee may impose under s 157(2)(b) on a permit to construct a dam, but expressly provides:

"(a) a condition may relate to the time before which the permitted activity must be commenced, the time before which the activity must be completed or the period during which the permit remains in force;

(i) the investigation, design, construction, operation, maintenance, surveillance or decommissioning of the dam; or

(ii) reporting to the Minister any information relating to the dam; or

(iii) any matter prescribed in the regulations; or

(c) it may be a condition of a permit that specified work is to be undertaken by a specified person or class of persons; and

(d) a condition may provide that the permit does not take effect until -

(i) permission has been obtained for the taking of water under section 90; or

(ii) a relevant water allocation has been obtained by transfer under Division 4 of Part 6."

1. The Assessment Committee may refuse to grant a permit on any of the grounds set out in the Act, s 158, including "if the applicant does not have a right or licence to take water into the relevant dam": s 158(1)(d).
2. A permit has effect on the day on which it is granted by the Assessment Committee, or if there is a right of appeal, 14 days after notice of the decision or, in the case of an appeal, on resolution of any appeal: s 159. In 2005, the Act provided that permits lapsed two years after the date on which they took effect if the dam works were not substantially commenced within that period: s 159(8). The Assessment Committee had power to extend the period for which the permit is in force, but only for a period not exceeding one year: s 159(9). In 2007 the Act, s 159, was amended to require substantial completion within three years but allowing for a possible extension of a further two years.
3. In 2005, the Water Management Regulations 1999 were in force but they contain nothing of relevance to this action. Also in force were the Water Management (Safety of Dams) Regulations 2003. The regulations imposed competency standards on persons constructing dams, provided for compliance with certain specified guidelines for the construction, safety and management of dams, and for the provision of reports about construction of a dam called a "work-as-executed report".
4. Water licences are dealt with by Pt 6 of the Act. It is an offence to take water from a watercourse without a licence: s 54(4). Applications for a licence are made to the Minister: ss 62 and 63. The power of the Minister to determine an application may be delegated: s 10. Licences may be endorsed with a water allocation: s 56(1)(b). A water allocation specifies the quantity of water that a licensee is entitled to take and use under a licence: s 3. A licence may also specify the surety with which a water allocation can be expected to be available for taking. The term "surety" is defined in s 3 to mean "the actual or relative probability with which a water allocation is expected to be available in any year having regard to the natural variability of the supply of water". In a licence the surety may be specified as a class of surety common to all allocations of similar surety: s 59. A licence may be subject to other conditions: s 56(d) and (f). Section 62 provides for the form of the application, and the payment of fees, and requires that an application is to be accompanied by "such other information as the Minister may require". By s 63, unless the Minister refuses an application, it must be approved if it:

(b) is consistent with the objectives of this Act and any relevant water management plan; and

(c) could not reasonably be expected to lead to material environmental harm or serious environmental harm; and

(d) will not have a significant adverse impact on other persons taking water from the relevant water resource or on the commercial operations of a major user of water from that water resource."

1. Section 64 relevantly provides that the Minister may refuse an application for a water licence if:

"(a) it is not possible to endorse a water allocation on the licence consistently with any relevant water management plan or the objectives of this Act; or

(i) that the grant would have a significant adverse impact on any existing licensee or a person taking water under Part 5 or on the commercial operations of a major user of water from the relevant water resource; or

(iv) after consultation with the Director of Environmental Management, that the proposed taking or use of the water would contravene the Environmental Management and Pollution Control Act; ...".

1. The Act provides for public notification of an application and receipt of representations. It also provides for notification of an approval or refusal. However, it is significant for the purposes of this action that the Act did not, at the time of this application nor subsequently, impose any time limit on the Minister for determination of an application for a water licence.

1. In 2004 Gunns Ltd planned to establish and develop a vineyard on a 400 hectare property at White Hills in northern Tasmania. The operations manager of Tamar Ridge Wines at the time, Rob Lyon, had responsibility for the development. It was intended, over time, to plant at least 250 hectares with vines. According to Mr Lyon, vineyards in Tasmania require a minimum of one megalitre of water per hectare to maintain a commercial yield. Thus, in early 2005, Mr Lyon authorised preparation of applications for a permit to construct a dam and an application for a water licence with the intention of providing a water supply for the development. In the course of the process Mr Lyon was assisted by another Gunns employee, Paul Townsend.
2. At the relevant time, Bill Shackcloth was an administrative officer and section head for water and dam administration within the Department of Primary Industries, Parks, Water and Environment ("the Department"). His section was referred to as the Water Management Branch. He reported to the manager of the Branch. All applications for dam permits and water licences came to him. His section was responsible for checking applications to ensure that administrative requirements were complied with before referring them, in the case of dam permit applications to the Assessment Committee, and in the case of licence applications, to the Minister or the Minister's delegate. Permit and licence applications were assessed by the Water Management Branch and sent to other departmental officers, such as a hydrologist and a natural values assessment officer, for assessment. Applications for permits on the one hand and licences on the other were separately considered and determined, although Mr Shackcloth and his section remained the point of contact with applicants for both. According to Mr Shackcloth there was, in 2005, a backlog of about 200 water licence applications. Dam permit applications demanded the focus of his section's attention because of the statutory time limit for determination of such applications. Dam permit applications principally concerned the dam footprint and engineering and construction issues, whereas water licence applications required a broader and more detailed consideration of the water catchment area from a number of different and more detailed perspectives. It will be necessary to refer to this aspect of the evidence later in these reasons.
3. To assist with Gunns' application for a permit and a licence, Mr Lyon engaged a water resource consultant, James Curran. Mr Curran is, and was then, an agricultural consultant experienced in the assessment and preparation of such applications. He knew Mr Shackcloth. He also had weekly contact with the regional water management officers. Before 2005 he had been engaged by the Water Management Branch itself to assess applications for dam permits and water licences to help clear the backlog. Applications had, until then, been prepared by the regional water management officers, but a practice was implemented allowing private consultants, like him, to complete applications. In 2005, preparation of both types of application required use of an assessment tool called the SKM tool, a computer spreadsheet which enabled measurement of the volume of water available at various levels of reliability for allocation from a specified catchment area, taking into account water already allocated. Use of the SKM tool was required of both regional water management officers and private consultants.
4. The dam permit application prepared by Mr Curran for Gunns was completed and is dated 23 May 2005. It is in the form of a "Dam Assessment Report". It describes the dam location as 3 kilometres north of Evandale on an un-named tributary of Rose Rivulet. It specifies the volume of the dam at full supply level as 295 megalitres and the area covered by the dam as 7.95 hectares. Included in the report are sections referring to engineering design and construction, dam hydrology, passing flows, vegetation assessments, wetlands, geo-conservation, threatened species and cultural heritage, reservoir water quality, spillway calculations and hazard rating. The SKM tool calculations are included. The report reads in part:

"Tamar Ridge Wines is applying for 195.8ML of the proposed dam volume as surety 5 water. This is the available sustainable allocation yield at 80% based on calculations using the SKM tool, using the recommended reference stream gauge of 76, North Esk at Ballroom.

The proponent is applying for the remainder of the storage (99.2ML) to be surety 6 water, and will be taken as storage opportunities arise. The 99.2ML represents the additional sustainable allocation yield available at 70% reliability, ie the total dam volume at 70% reliability based on the estimated yields using the SKM tool."

1. The water licence application is also dated 23 May 2005. It is on a different application form, the focus of which is directed at the proposed water source and the sub-catchment assessment based on use of the SKM tool. It sets out in detail the results of the application of the assessment tool and reads in part:

"Total Available Yield Estimate upstream, using the stream gauge data for 76, North Esk at Ballroom for the period May to October at 80% reliability = 192.8ML."

1. By letter dated 3 June 2005 Mr Shackcloth wrote to Tamar Ridge Wines indicating that on that day the application for a permit to undertake dam works had been accepted by the Assessment Committee. In the same letter Mr Shackcloth advised that the application for a water licence had been accepted by the Water Management Branch. The applications were advertised. By letter dated 11 July 2005, signed by a representative of the Assessment Committee, Alistair Brooks, Tamar Ridge Wines was given notice under s 154 that the Committee required the provision of further information about the dam permit application. Mr Shackcloth is noted as the contact on that letter and, I infer, is the author of it. The notice sought information about engineering design and Aboriginal heritage matters. The information was provided. The Assessment Committee approved the application and a permit, with conditions, was issued by the Committee dated 24 October 2005. In accordance with s 159, as it then was, the permit noted that works must be substantially commenced by 24 October 2007. The permit did not contain a condition requiring Gunns to have a right or licence to take water into the dam, or a condition that the permit did not take effect until a licence was issued.
2. Work did not commence on the dam. Gunns was still engaged in the completion of another large vineyard development, also involving the construction of a dam. By email dated 6 July 2007 to Mr Shackcloth, Gunns applied for an extension of the period for which the permit was in force by 12 months. On 19 September 2007 the Assessment Committee extended the permit until 24 October 2008 and issued an amended permit. Work still did not commence. At the time the permit was originally issued, the Northern Midlands Council raised concerns about land stability. Gunns commissioned engineers to undertake a geotechnical investigation which was received in November 2006. The report resulted in the preparation of an additional stability analysis which was not completed until September 2007. Concerned about engineering issues and construction of the dam after an extended dry period, Gunns sought from the Assessment Committee a further permit extension. It was not granted. The Committee pointed out that the Act permitted only one extension for a maximum of a year.

1. Because no further extension of the permit was available beyond 24 October 2008, Gunns engaged a contractor to commence work on the dam. Commencement of work was confirmed at an engineer's inspection conducted on 22 October 2008. A condition of the permit required that, within 28 days of the completion of the dam works, Gunns submit to the regional water management officer a "work-as-executed report". A report dated 21 January 2010 was prepared and submitted and entitled "Work as Executed August 2009". On 22 April 2010 David Krushka, Dam Safety Project Officer from the Water Management Branch, wrote to Gunns acknowledging the report. Mr Krushka's letter is accompanied by notices signed by Ludovic Schmidt, Manager of the Water Management Branch, issued under ss 165H and 165P of the Act. The second notice requires Gunns to conduct an engineering assessment of the adequacy of the dam spillway. In compliance with the notice an engineer was engaged. The assessment took place throughout 2010 and required considerable correspondence with and reporting to the Water Management Branch. The result was revisions to the dam spillway which were designed and constructed by Gunns at a cost of about $170,000. The completion of this work required extensions of time to comply with the s 165P notice. A report of the construction of the redesigned spillway was eventually prepared and issued on 6 April 2011, receipt of which was acknowledged by letter from the Water Management Branch on 12 April 2011.
2. It is not in dispute that by the time the work on the dam was completed, it had cost Gunns $740,360.

Sale of the property and activation of the water licence application

1. In August 2010, while work on the dam continued, the business Tamar Ridge Wines was sold by Gunns to Brown Brothers. The employment of Mr Lyon, the operations manager, was transferred to that company. The sale of Tamar Ridge Wines did not include the property on which the dam was being constructed, but it was intended to sell that property as well. Between 2009 and 2011 Darryl Clark was regional manager of Gunns. In that position he was involved in the sale of a number of properties owned by Gunns. In light of Mr Lyon's departure Mr Clark had, by June 2010, assumed management of the dam construction. He was aware of the issues with the spillway and soon became the person primarily responsible for resolving them. He knew that a water licence had not been issued. He believed the issue of the water licence would follow once the dam construction was approved, but he had not dealt with dam permits and licence applications before. He obtained that impression mostly from his discussions with Mr Lyon and Mr Townsend before he took over.
2. The property on which the dam was being constructed was sold by auction on 25 June 2010 for $1.55m. The contract date for completion was 20 August 2010. Because it was Mr Clark's belief that it would be an advantage to Gunns to sell the property with the dam permit and the water licence, he instructed the solicitor for Gunns to include in the conditions of sale a clause about the dam in the following terms:

"The Vendor hereby agrees with the Purchaser that the Vendor will:

... (b) undertake and complete to the Department's satisfaction the redesigning of the spillway and the widening of the spillway at the Vendor's costs, within six months from the completion date;

(c) undertakes such other works as required by the Department to ensure a water licence issues, the Vendor anticipating that a licence will issue for 290 megalitres."

1. It was agreed between Gunns and the purchaser that the sale of the property would be completed on 20 August 2010 on the basis that, in summary:
   • at completion the purchaser would pay $1.3m and withhold the balance purchase price of $250,000;
   • the balance would be payable on completion of the dam works and issue and transfer of a water licence;
   • Gunns would be responsible for compliance with permit and licence issues;
   • in the event that the conditions were not complied with within six months of settlement, that is by 20 February 2011, then the purchaser was to be discharged from liability to pay the balance purchase price.
2. Subsequently, the purchaser conditionally agreed to extend the time allowed under the agreement for issue and transfer of the water licence until 30 April 2011.
3. On 7 February 2011 Mr Clark wrote to Julian Johnstone, a senior water management officer in the Water Management Branch. In his letter Mr Clark explained that the property had been sold but that Gunns remained responsible for ensuring, within a limited time, the issue of a dam permit and water licence. He sought the extension of time referred to earlier for performance of the outstanding dam works, "to enable a Water Licence to be issued as soon as practicable". He said that he attended a meeting on site on 14 February 2011, not long after his letter, at which there was discussion about the dam works but at which he was also told by Mr Johnstone that once the work had been signed off by the engineer a licence would follow.
4. Mr Clark's employment with Gunns ceased in March 2011. Another employee, Mark Chopping, took over management of the dam issues. When, on 12 April 2011, Mr Johnstone wrote to Mr Chopping after having received the engineer's report about the dam work, he mentioned the licence application in these terms:

"In regards to your application for a water allocation for Dam ID 7716, this is currently being progressed. Should you have any queries, please contact Anna Hendricks...".

1. I infer from the correspondence in evidence that the mention of the water licence in Mr Johnstone's letter was prompted by a conversation with Mr Chopping. On Friday, 15 April 2011, an email was sent to Mr Chopping by Anna Hendricks, then an administration officer within the Water Management Branch, in which Ms Hendricks said she would be working on the application "on Monday". On 19 April 2011 Mr Chopping sent an email reminder to Mr Johnstone referring to the time constraints facing Gunns and pressing for the grant of the water licence for transfer to the purchaser.

Delay in consideration of the licence application

1. Between the making of the licence application in May 2005 and the correspondence in April 2011, nothing was done within the Water Management Branch to progress Gunns' application for a water licence. Evidence about the reasons for delay was given by Mr Shackcloth. He agreed that there was no diary system for managing the progress of water licence applications within the Water Management Branch. Permit applications and licence applications had separate files which were not kept together or linked. In 2005 Mr Shackcloth had something in excess of 700 files in his office to be dealt with. He was working 6½ days a week, most days for 12 or more hours. There was no means of determining which were the oldest in time, and they were not dealt with in order of age.
2. In 2005 Mr Shackcloth made a request for more staff to deal with the backlog, but his request was refused. In 2007 two more administrative staff were provided. In 2008 one more, so by 2009, there were three or four more staff than there had been in 2005. Mr Shackcloth's view was that, leaving aside the technical evaluation required for each application, there were insufficient administrative staff in the Water Management Branch during the relevant period to deal with the water licence applications within a reasonable time frame. The consequence of this was that the application "did not get listed as a priority". He agreed that another way of saying this was that it "got lost in the system".

A change in the assessment tool for water licences and the result for the licence application

1. The lapse of time between the water licence application in 2005 and the Department's consideration of it in April 2011 had significant consequences for Gunns. From February 2006 a different assessment tool was used to assess water licence applications. The new assessment tool is called the Farm Dam Assessment Tool or FDAT. According to Mr Curran, with whom Mr Shackcloth agreed, the FDAT tool was very similar tool to the SKM tool, but used more sophisticated data from a greater number of reference sites for calculation of stream flow. Where the SKM tool used data from about 60 gauging sites around the State, the FDAT tool used data from a combination of those gauging sites, and modelled data from adjacent catchments and other sites, somewhere around 1,750 reference sites in all.
2. Once Ms Hendricks took up the water licence application on 20 April 2011 she referred it for re-assessment by other administration officers within the same branch. This time the application was assessed using the FDAT tool. Use of the FDAT tool produced a significantly different result. It indicated to the Departmental officers that much less water was available for allocation than had been indicated by use of the SKM tool in Mr Curran's original assessment. On 24 June 2011 the Manager of the Water Management Branch wrote to Gunns to advise that "based on the current level of information there was insufficient water available to meet the needs of your proposal and those of the environment at an acceptable level of risk" and that "only 16.6ML (11ML at surety 5 and 5.6ML at surety 6) may be allocated at the proposed off take". An additional allocation would be considered but only on provision of further information invited by a notice issued under the Act, s 86. The notice required a further assessment of the effect of the grant of a licence to take 290 megalitres of water on in-stream ecosystems and other users of the water resource.
3. In the meantime, the purchaser of the property advised by email from its solicitor dated 10 May 2011, that there would be no further extension of time for the issue and transfer of the water licence contemplated by the sale agreement. The balance purchase price of $250,000 was not paid.
4. This action was commenced in October 2011.

1. The plaintiff pleads three causes of action. It claims:

1. It is conceded by counsel for the defendant that the Minister was obliged to make a decision on the application for a water licence within a reasonable time. However, the plaintiff must establish that the Minister owed a duty of care to the plaintiff in negligence. It is not contended by the plaintiff that the Minister owed a duty to grant the application. There could be no such duty. It would be contrary to the provisions of the Act. The duties of care pleaded by the plaintiff are in in the following terms:

(a) to exercise the statutory power of approving or refusing the licence application pursuant to either s 63 or s 64 of the Act within a reasonable time of the date of lodgement of it;

(b) to take such steps, to give such advice and to make such decisions as a reasonable Minister, his or her delegate and/or his or her officers with the same power and resources would have taken in the circumstances and in respect of the assessment and determination of the licence application; and

(c) to advise the plaintiff in a timely way, if it was considered that the licence application would be or was likely to be refused contemporaneously with the grant of the dam permit.

1. Liability for negligence is controlled in Tasmania by the Civil Liability Act 2002. However, apart from some specific situations which have no application in this case, the Act does not contain provisions which determine the existence of a duty of care. The plaintiff's claim is a claim for damages for economic loss; loss which the plaintiff alleges it has suffered as a result of building a dam which could not be used as intended. Such cases involve special considerations. In Barclay v Penberthy [2012] HCA 40; (2012) 291 ALR 608, French CJ, Gummow, Hayne, Crennan and Bell JJ stated at 620 [42] that the relevant principles for determining liability for economic loss were considered in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515 and "are not in dispute". In Woolcock, in the joint judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ, their Honours restated, at 530 [21], that damages for economic loss are not recoverable if all that is shown is that the defendant's negligence was the cause of the loss and the loss was reasonably foreseeable.
2. The circumstances of this case fall outside any accepted category of duty. In a novel situation, such as this one, to test whether a duty of care exists, the Court is to undertake a close analysis of the facts bearing on the relationship between the plaintiff and the alleged tortfeasor, by reference to the salient features or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury: Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; (2009) 75 NSWLR 649 per Allsop P (with whom Simpson J agreed) at 676 [102], applied by Blow J (as he then was) in State of Tasmania v Boyd [2010] TASSC 13 and by Porter J in Price v Southern Cross Television (TNT9) Pty Ltd [2014] TASSC 70, and as a member of the Full Court in Calvert v Badenach [2015] TASFC 8. A list of 17 salient features was set out by Allsop P in Caltex Refineries at 676 [103]:

(c) the degree and nature of control able to be exercised by the defendant to avoid harm;

(d) the degree of vulnerability of the plaintiff to harm from the defendant's conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself;

(e) the degree of reliance by the plaintiff upon the defendant;

(f) any assumption of responsibility by the defendant;

(g) the proximity or nearness in a physical, temporal or relational sense of the plaintiff to the defendant;

(h) the existence or otherwise of a category of relationship between the defendant and the plaintiff or a person closely connected with the plaintiff;

(i) the nature of the activity undertaken by the defendant;

(j) the nature or the degree of the hazard or danger liable to be caused by the defendant's conduct or the activity or substance controlled by the defendant;

(k) knowledge (either actual or constructive) by the defendant that the conduct will cause harm to the plaintiff;

(m) the nature and consequences of any action that can be taken to avoid the harm to the plaintiff;

(n) the extent of imposition on the autonomy or freedom of individuals, including the right to pursue one's own interests;

(o) the existence of conflicting duties arising from other principles of law or statute;

(p) consistency with the terms, scope and purpose of any statute relevant to the existence of a duty; and

(q) the desirability of, and in some circumstances, need for conformance and coherence in the structure and fabric of the common law."

1. Allsop P indicated that the list should not be seen as exhaustive, but as providing "non-exhaustive universe of considerations of the kind relevant to the evaluative task of imputation of the duty and the identification of its scope and content". At 690 [172], Basten JA said that the multifactorial approach should not be treated as a shopping list, all the items of which must have application in a particular case, "Rather, it provides a list of considerations which should be considered, as potentially relevant, depending on the kind of case ...".
2. In King v Philcox [2015] HCA 19; (2015) 89 ALJR 582, Nettle J said at 600 [80]:

"As Deane J concluded in Jaensch, the question of whether a duty of care is owed in particular circumstances falls to be resolved by a process of legal reasoning, by induction and deduction by reference to the decided cases and, ultimately, by value judgments of matters of policy and degree. Although the concept of 'proximity' that Deane J held to be the touchstone of the existence of a duty of care is no longer considered determinative, it nonetheless 'gives focus to the inquiry'. It does so by directing attention towards the features of the relationships between the parties and the factual circumstances of the case, and prompting a 'judicial evaluation of the factors which tend for or against a conclusion' that it is reasonable (in the sense spoken of by Gleeson CJ in Tame) for a duty of care to arise. That these considerations may be tempered or assisted by policy considerations and value judgments is not, however, an invitation to engage in 'discretionary decision-making in individual cases'. Rather, it reflects the reality that, although '[r]easonableness is judged in the light of current community standards', and the 'totality of the relationship[s] between the parties' must be evaluated, it is neither possible nor desirable to state an 'ultimate and permanent value' according to which the question of when a duty arises in a particular category of case may be comprehensively answered'." (Citations omitted.)

1. The existence or non-existence of a duty of care is to be considered at "a higher level of abstraction" to avoid mixing questions of duty with questions of breach: Shirt v Wyong Shire Council [1978] 1 NSWLR 631 at 639 per Glass JA, referred to with approval by Gummow J in Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 at 446 [70]; Caltex Refineries per Basten J at 692 [178]. On application of these principles I have concluded that the defendant did not owe a duty of care to not cause economic loss to the plaintiff in the terms contended by the plaintiff. As to foreseeability, I do not think it reasonably foreseeable that the plaintiff would suffer economic loss if the defendant did not determine the application for a licence within a reasonable time. The existence or otherwise of a duty of care is to be determined prospectively. As Basten J said in Caltex Refineries at 691 [177]:

"Duty requires an objective prospective assessment of the risks foreseeable as possible, but not farfetched or fanciful, to the reasonable person in the position of the defendant."

1. So viewed, what is required to establish a duty of care in this case is that the defendant should reasonably have foreseen that, if it did not determine the application within a reasonable time, then the plaintiff may go ahead and build a dam without determination of the application and without the benefit of a licence. Such a contention should be rejected. Other types of economic loss resulting from delay may be foreseeable. One example may be loss of income which may have been earned by use of water, assuming the success of an application. However, in my view, there are many policy considerations which militate against the existence of such a duty in those circumstances, including indeterminacy of claims, a matter to which I will shortly return.
2. Foreseeability of loss alone is insufficient in any event. I would nevertheless reject the existence of a duty of care. In my view, in a claim for pure economic loss, the law should be slow to find that the Minister (reference to whom includes the Minster's delegates) should have the economic interests of the plaintiff in mind when considering when and how the plaintiff's licence application should be dealt with. The Minister was exercising a statutory power and was doing so in accordance with the provisions and objectives of the Act. The imposition of a duty of care of the nature contended by the plaintiff is, in my view, an undue imposition on the exercise of the statutory function of the Minister, particularly in light of the factors the Minister was obliged to consider by ss 63 and 64. The imposition of such a duty raises policy issues concerning the allocation of resources to consideration of licence applications. Evidence was given about insufficient allocation of resources to deal with water licence applications in a timely manner. Such evidence might be relevant in considering whether there has been a breach of an established duty. In the present context, however, it is also an important indication against the existence of a duty. In Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540 Gleeson CJ said at 555 [9]:

"One thing is clear. Reasonable foreseeability of harm of the kind suffered by Mr Ryan, whilst a necessary condition for the existence of a duty of care on the part of the Council or the State, is not sufficient. In the case of a governmental authority, it may be a very large step from foreseeability of harm to the imposition of a legal duty, breach of which sounds in damages, to take steps to prevent the occurrence of harm. And there may also be a large step from the existence of power to take action to the recognition of a duty to exercise the power. Issues as to the proper role of government in society, personal autonomy, and policies as to taxation and expenditure may intrude. Even where a statute confers a specific power upon a public authority in circumstances where mandamus will lie to vindicate a public duty to give proper consideration to whether to exercise the power, it does not follow that the public authority owes a duty to an individual, or a class of persons, in relation to the exercise of the power. In the case of both the State and the Council, it is failure to exercise those powers, not negligence in the manner of their exercise, that is said to constitute the breach."

1. To adopt the words of Gleeson CJ in the same case at 557 [15], I do not consider that the reasonableness or unreasonableness of government inaction concerning exercise of its power to determine the licence is a legitimate subject for curial decision. See also the judgment of McHugh J at 576 [81].
2. The issues of control and vulnerability point away from existence of a duty of care. It was the plaintiff, and not the defendant, which had control of the principal factor in the avoidance of harm, that is, whether the dam was constructed and the expense incurred. The defendant was in control of when the application was to be determined. Determination of the application one way or another prior to the commencement of construction of the dam in October 2008 would have avoided harm to the plaintiff. However it was the plaintiff's decision to commence construction in the absence of a licence. The plaintiff was not rendered powerless to abate, or to prevent the occurrence of the loss to which it was subjected. The plaintiff was not in a vulnerable position. The vulnerability of the plaintiff is an important factor in the evaluation of the relationship between the Minister and applicants for a licence: Woolcock at 530 [23]. In this case, the question of vulnerability or otherwise of the plaintiff points strongly against the existence of a duty. Counsel for the plaintiff submitted that the plaintiff was vulnerable because it had to proceed with the construction work when the dam permit was about to expire. That submission is to be rejected. The time limit arising from the life of the dam permit involved no obligation on the plaintiff to commence work without a licence. The only consequence would have been the need to apply again for a permit. The decision of whether to construct the dam without the licence application being determined was entirely within the plaintiff's control. The defendant played no part in the decision. The plaintiff was in a position to protect itself from the consequences of the defendant's failure to determine the licence application, either completely, or in a way which cast the consequences of loss on the defendant. The plaintiff could have refrained from building the dam. There is no evidence of any formal request to determine the licence application before the expense of construction was incurred. Although there is no statutory appeal from the failure of the Minister to determine a licence application within a limited time, it was open to the plaintiff to bring proceedings in the nature of mandamus or under the Judicial Review Act 2000, s 19, to compel performance of the conceded duty to determine the application within a reasonable time. The availability of a remedy in the nature of the appeal as a factor in determining the existence of a duty of care was considered by the Full Court of the Supreme Court of Queensland in Meshlawn P/L v State of Qld [2010] QCA 181. Each member of the court dealt with the issue differently. McMurdo P did not consider the availability of an appeal to be a factor weighing heavily against the existence of a duty. Chesterman JA found a right of appeal against a bureaucratic decision to be inconsistent with a duty of care in negligence because it removes the vulnerability of the plaintiff. Fryberg J disagreed with Chesterman JA and found a right of appeal was not inconsistent with the existence of a duty. In this case there is no right of appeal, but, rather, a right to apply for an administrative law remedy. I would proceed on the basis that such a right is not inconsistent with the existence of a duty, but is a relevant factor, going to control and vulnerability, as to whether a duty arises. In this case it is an indication against existence of a duty of care sounding in damages.
3. There is little if any evidence that the plaintiff relied on the defendant to determine the application within a particular time. Viewed prospectively, the defendant was not to know that delay in determination of the application would cause economic loss to the plaintiff. Counsel for the plaintiff submitted that it was not unreasonable for the plaintiff to rely on a dam permit granted by a statutory authority "when the Act says that it could have been withheld if you're not going to get a water licence". He also submitted that it was not unreasonable to rely on "the known practice about which a number of my witnesses gave evidence that is well we always understood you build the dam, you submit your post construction report and then you get the water licence". The submissions are to be rejected for a number of reasons. They ignore the terms of the statutory scheme which require separate consideration of the licence application by a different entity and by reference to different statutory criteria. Putting aside that consideration of the existence of a duty is to be at higher level of abstraction than the submission contemplates, the evidence does not support a finding of reliance. Reliance means reliance by the plaintiff on the defendant to perform the duty contended for. The submission confuses reliance on assumed approval of the application with the contended duty that a decision would be made within a reasonable time. As to that issue, there is one particular aspect of the evidence to which I refer. A report to the Assessment Committee for its meeting of 14 October 2005, written by either Mr Shackcloth or an administrative officer in the Branch with Mr Shackcloth's approval, recommended approval of the dam permit. The report referred to the water licence application and said the "Water management branch has accepted the application and a licence will be issued accordingly". It was not contended that the plaintiff knew of or relied on the contents of the report. For the reasons expanded upon later in these reasons concerning the plaintiff's claim to an estoppel and for negligent misstatement, I am not satisfied that any understanding that a licence would be issued, or an application would be dealt with within a reasonable time, emanated from the defendant.
4. There is arguably no indeterminacy in the class of persons to whom a duty of the type contended by the plaintiff may be owed, although it is conceivable that imposition of a duty may also extend to representors who become party to an application. However, even assuming the class may be confined to applicants for a licence, the prospective imposition of a duty to determine applications within a reasonable time gives rise to a high level of indeterminacy in the nature and scope of harm which may be suffered by applicants, a factor militating against imposition of such a duty.
5. The foregoing remarks concern the first formulation of the duty of care contended by the plaintiff, to exercise the statutory power to refuse or approve the licence application within a reasonable time. I find that the plaintiff was not subject to such a duty.
6. Two other formulations of duty are pleaded. The first is "to take such steps, to give such advice and to make such decisions as a reasonable Minister, his or her delegate and/or his or her officers with the same power and resources would have taken in the circumstances and in respect of the assessment and determination of the license application". The formulation is difficult to understand. I do not think it adds anything to the first formulation. It contends, in effect, a duty of care to make a decision. To the extent that it contends a duty to approve the application it cannot be sustained. To the extent it contends a duty of care to make a decision at all, I reject the existence of a duty of care in those terms for the reasons I have already stated.
7. The third formulation is that the defendant had a duty to "advise the plaintiff in a timely way, if it was considered that the license application would be or was likely to be refused contemporaneously with the grant of the dam permit". The formulation makes little sense. By its terms it contends a duty arising "contemporaneously" with the grant of the dam permit to advise the plaintiff if the licence application was likely to be refused. Such a contention cannot be accepted. The statutory scheme and the evidence point unequivocally to separate determination of the permit and licence applications involving different statutory considerations. It would be contrary to the statutory scheme to impose on the Minister a duty to advise of the likelihood of refusal or otherwise of an application contemporaneously with the issue of a permit by a different statutory entity.
8. In argument, the duty was formulated in a somewhat different way. A "continuing duty" was alleged. Counsel for the plaintiff submitted, in referring to the three pleaded formulations of the duty:

"If wrong about that, if you're not going to make a decision in a reasonable time, tell us about it, so we can look beyond my time frame then. That's subparagraph (c). Subparagraph (a), we only look at or about the time of the dam permit. Likewise, subparagraph (b)."

"(a) and (b), at or about the time of the dam permit. (c), if you're going to go beyond that, drop us a line please, if I could put it in a colloquial way. And that's the one that extends to October 2008... Because (c) is one step further. (c) is a duty to be proactive in some way...Well it's a continuous breach but the defining event is the commencement of works. Beyond that there's no point telling us because we've got contractors on the ground your Honour. (c) is a duty to say something."

1. The submission contends a duty of care on the Minister to take the positive step of advising an applicant for a licence to act, or not act, as the case may be, in a manner which may cause economic loss to the applicant. So formulated it could only, logically, have effect by assuming some change in circumstances between the time of the application and the time that economic loss may be suffered. In other words, although the plaintiff contends a "continuing duty", it is, rather, a duty which could only come into existence on the happening of some new fact or circumstance. In other words, in this case, a duty to tell the applicant if the Minister became aware that the licence "would be or was likely to be refused". There are a number of points to be made about this contention. There is no evidence that the Minister or the Minister's delegate or an officer of the Water Management Branch ever became aware that the licence application would be or was likely to be refused in the terms applied for until it was considered in 2011. The Minister was aware that the tool for assessment of the licence had changed, but there had been no assessment of the application according to the new assessment tool. The plaintiff's own advisor, Mr Curran, was well aware of the change in the assessment tool long before construction of the dam commenced. There is no evidence he was asked about it before expense was incurred, but the plaintiff was not deprived of control or placed in a vulnerable position by the change in such a way that it was deprived of the ability to avoid the loss. The principal contention made in support of the propounded duty is that, prior to commencement of the dam construction work in October 2008, the officers of the Department became aware that work was to be commenced and said nothing, either about the new assessment tool, or how it may affect the likelihood of success or otherwise of the licence application.
2. It follows that what is claimed is the existence of a duty of care to take affirmative steps to advise the plaintiff of factors which may have occurred after the making of the application and before the incurring of expense which may affect the likelihood of success of the licence application. I am not persuaded such a duty should be imposed on the Minister. Ordinarily the law does not impose on a person a duty to take affirmative action to protect another from harm, nor to protect another from the risk of harm unless that person has created the risk: Price v Southern Cross Television (TNT9) Pty Ltd [2014] TASSC 70 at [206], citing Graham Barclay Oysters Pty Ltd v Ryan (above), per McHugh J at 575-576 [81]; Stuart v Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215, per Crennan and Kiefel JJ at 258 [127]. In the passage just referred to in Graham Barclay Oysters Pty Ltd v Ryan, McHugh J said:

"Ordinarily, the common law does not impose a duty of care on a person to protect another from the risk of harm unless that person has created the risk. And public authorities are in no different position. A public authority has no duty to take reasonable care to protect other persons merely because the legislature has invested it with a power whose exercise could prevent harm to those persons. Thus, in most cases, a public authority will not be in breach of a common law duty by failing to exercise a discretionary power that is vested in it for the benefit of the general public. But if the authority has used its powers to intervene in a field of activity and increased the risk of harm to persons, it will ordinarily come under a duty of care. So also, if it knows or ought to know that a member of the public relies on it to exercise its power to protect his or her interests, the common law may impose a duty of care on the authority. If the authority comes under a duty of care, the failure of the authority to exercise a discretionary statutory power may give rise to a breach of the common law duty of care. But subject to these exceptions, ordinarily the common law will not impose an affirmative duty of care on an authority which would have the result that a failure to exercise a statutory power constitutes a breach of that duty."

"The common law generally does not impose a duty upon a person to take affirmative action to protect another from harm. Such an approach is regarded as fundamental to the common law and has as its foundation concepts of causation. The law draws a distinction between the creation of, or the material increase of, a risk of harm to another person and the failure to prevent something one has not brought about. The distinction may be seen as reflected in notions of misfeasance and non-feasance. So far as concerns situations brought about by the action of the person at risk, it is the general view of the common law that such persons should take responsibility for their own actions. In this, English law has been seen to have an affinity with Roman law, in its reluctance to interfere or to encourage interference with the freedom of the individual. The common law does recognise that some special relationships may require affirmative action to be taken by one party and are therefore to be excepted from the general rule. Examples of such relationships are employer and employee, teacher and pupil, carrier and passenger, shipmaster and crew."

1. The passages just quoted strongly suggests against the existence of a duty contended by the plaintiff. What is contended in this context is not a duty to exercise a statutory power to protect a class of persons that the legislation seeks to protect, but rather a duty to give advice about the possible consequences of a failure to exercise a statutory power for the benefit of an applicant for a licence. The statute did not require the giving of such advice. There is nothing in the terms and scope of the statutory scheme which suggests an obligation to give advice for the prevention of harm in the event that the power is not exercised in favour of applicants. There is no proper basis to conclude that it was reasonable for the plaintiff to rely on the defendant to take positive steps to give such advice to avoid economic loss to the plaintiff. The plaintiff was an autonomous entity. The Minister had no control over the decision to construct the dam.
2. In the course of submissions, counsel for the plaintiff referred to Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330 as an example of a case in which a duty to act affirmatively was established in circumstances close to this case. There are significant differences however with this case. Pyrenees Shire Council v Day concerned legislation containing special measures over which the defendant council had control, designed to protect a class of persons from the danger of fire, combined with knowledge of risk to the successful plaintiff. No equivalent provisions sufficient to found an affirmative duty to act exist here.
3. I would, for all of those reasons, find that the defendant did not owe a duty of care to the plaintiff. The plaintiff's case in negligence fails.

1. In the event that my conclusion that there was no duty of care is wrong, I will deal with the question of breach. It can be dealt with relatively briefly.
2. If there was a duty of care to determine the plaintiff's application for a water licence within a reasonable time, there is no question that the duty was breached. With allowance for the limited resources available to those persons charged with receiving, considering and determining the licence application, and the steps required to fully consider it, the application was not considered within a reasonable time. Between 23 May 2005, when the application was made, and the commencement of these proceedings in October 2011, the application was not determined. There is no evidence that it was addressed with a view to it being finally determined until April 2011. Failure to consider the application for determination for six years is, on any view of the facts, unreasonable. The application was never finally determined. For all relevant purposes the licensing process effectively concluded in 2011 with a request for information by which time, for reasons arising from the sale of the land, it was too late to be of any benefit to the plaintiff. However, most of the plaintiff's loss was incurred much earlier than that. It was the failure to determine the application prior to commencement of the dam construction works in October 2008 which is the trigger to the plaintiff's claim. I find that the failure to consider and determine the licence application made on 23 May 2005, prior to October 2008, constitutes a breach of a duty to make a decision on the application within a reasonable time. I do not consider that the resources of the Department were insufficient to reasonably enable consideration of the application within that time. If the resources of the Department were insufficient to enable consideration of the application within that time, then more resources were required.
3. The Civil Liability Act 2002, s 38, provides for the application in some proceedings of certain principles in determining whether a public or other authority has a duty or has breached a duty. The principles include that the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions, and the reasonableness of the allocation of those resources by the authority is not open to challenge. Those principles have no application in this case because s 38 is limited to actions for damages for personal injury or death or damage to property. Even if those principles did apply I would find a delay of three years to breach a duty to determine the application within a reasonable time.
4. If there were a duty to affirmatively advise as contended by the plaintiff as one formulation of duty, it is established that no such advice was given, and thus any such duty was breached.

1. One of the recognised categories in which damages may be recovered for pure economic loss is negligent misstatement. Whether a duty arises depends on the general principles of negligence, requiring assessment of the salient features of foreseeability, knowledge, reliance and vulnerability. However, there can be no liability unless it is first established that the statement was made. The misstatement pleaded and relied on by the plaintiff is in the following terms. It is alleged that in or about September 2008 Bill Shackcloth orally advised the then operations manager of Tamar Ridge Wines, Rob Lyon, that as soon as the plaintiff had constructed the dam and had obtained and submitted a post construction report, a water licence would issue in accordance with the application.
2. The plaintiff's evidence about the representation comes almost entirely from the evidence of Rob Lyon. Mr Lyon had been operations manager since about 2004. He was principally responsible for the decision to make the applications for the dam permit and the water licence for the Evandale site in May 2005. However it was not planned to start the development until 2007 because he was, at the time, engaged in completing a large development at another property owned by the company at Coombend. An extension of the time for substantial commencement of the Evandale dam was applied for and obtained from 24 October 2007 to 24 October 2008. Board approval was not sought and obtained to commence the construction until mid-2008. Mr Lyon said that between 2004 and 2008 he had constructed "five dams prior to this one". Once a decision was made to proceed he contacted the company's preferred contractors. He said that he then "phoned the Department at that time and checked that there was no issue in their eyes that they could see that would prevent us getting a water licence ...". He said he spoke on the phone to Bill Shackcloth. The exchange with counsel for the plaintiff was then as follows:

"What was discussed?........I said 'Bill, we've had issues, we've had holdups with this dam, I just want to make sure that there is nothing has changed that would delay a water licence being issued'.

And what was his response?........There was no concerns from that.

What did he say in substance?.........At the time, 'No, once you have completed the dam the water licence will be issued, we don't see any issue'."

1. Mr Lyon also gave evidence that for each of the dams he had previously constructed a water licence was issued "within a month of the post-construction report being issued", in each case with a water allocation corresponding to the dam permit. He was asked whether he had made a note of his conversation with Mr Shackcloth and said that he "would have", because he noted every conversation in his diary, but that his diary was left behind when his employment was transferred to Brown Brothers in 2010 and could not be retrieved. When asked what he would have done had he been told by Mr Shackcloth that there was a problem with the water licence, he responded, "immediately halt construction of the dam".
2. It is also part of the plaintiff's case that other Departmental officers made similar statements to representatives of the plaintiff. None are relied on by the plaintiff as giving rise to a cause of action for negligent misstatement. However, counsel for the plaintiff submitted that, "If that's what other people were saying, I'll say it's more likely Mr Shackcloth said it." The evidence was not objected to by counsel for the defendant. Mr Lyon said that, in the course of a Departmental field day conducted at the dam site at the end of 2008, he had a conversation with David Krushka. For four years prior to 2010 Mr Krushka was the co-ordinator of dam safety for the Department in the Launceston area. By the time of this conversation work on the dam had progressed significantly. Mr Lyon thought that about 70% of the cost had already been incurred. Mr Lyon gave evidence that he was keen to have the water licence in his hands and asked Mr Krushka "whether there were any issues with the water licence at the time" and was told "no". Mr Krushka's evidence is that "at no point during the entire process was I under any impression there would be an issue with obtaining a water licence for the site". Mr Clarke gave evidence of a conversation with Mr Johnstone on 14 February 2011, referred to earlier in these reasons in which he said that he was told that once the work had been signed off by the engineer a licence would follow.
3. During cross-examination Mr Lyon agreed that he knew that the assessment of the licence application required use of a "stream flow tool" but he relied on consultants, in this case Mr Curran, to do the modelling. He agreed that it was his expectation, being aware of the consultant's assessment and the contents of the application, that a licence would be issued for 295 megalitres at a level of surety 5. He agreed that, in part, his expectation arose from his experience of the applications for other dams with which he had been involved, and from his own casual observations of the water he thought was available at the dam site. He assumed that "if the dam is okay then the application for the water licence will be okay". He thought the two functions, that is consideration of the dam permit application and assessment of the water licence application, went hand in hand and agreed that it did not enter his mind that there would be a dam permit issued but no water licence. He was however aware that the permit was to be dealt with by the Assessment Committee and the licence application was to be dealt with by the Minister or his delegate.
4. I am left in no doubt that Mr Lyon is an honest witness. However I am not satisfied that the pleaded representation, or any representation of like nature sufficient to ground a cause of action in negligent misstatement, was made. That is so for a number of reasons. I am not satisfied that Mr Lyon's recollection of the conversation he alleges with Mr Shackcloth can be relied upon. He gave evidence at trial about events which occurred 6½ years earlier. He was not asked to recall the conversation for the purposes of this action until he attended a lawyer's office in early 2014. He had no note of the conversation available to him. He did not send an email or write a letter to confirm the contents of the conversation despite agreeing that he sometimes did so for important matters. Although he insisted that he was not mistaken about the terms of the conversation, he agreed he did not have an independent recollection of the exact words spoken by Mr Shackcloth and that what he was left with, when giving evidence, was an "impression" of it; an impression which confirmed the understanding he already held before the conversation took place. He believed that the conversation took place in 2007 until shortly before trial he realised it must have been in 2008 by working back from the dates shown on dam construction invoices. Mr Lyon also agreed that uncertainty attended his evidence about the conversation with Mr Krushka. He said he could not swear that the conversation was with Mr Krushka or with some other officer of the Department, that he was left with an impression rather than a recall of the words used.
5. Mr Shackcloth had no recollection of any conversation about the water licence with a representative of Gunns between June 2005 and May 2011. He said that he had no reason to discuss the water licence application prior to that date because the water licence was not considered by the Department until 2011. He was cross-examined about conversations with Mr Lyon in or about September 2008. He remembered a conversation in which Mr Lyon asked whether there could be a further extension on the dam permit. He remembered that conversation, he said, because it concerned a matter which had to go before the Assessment Committee. He said however that he had no recollection of any conversation in which he said words to the effect that the water licence would issue. He said, "That's not a conversation I recall and it's not a statement that I would make". I formed the strong impression of Mr Shackcloth that he was an honest, careful and considered witness. He made concessions against himself when it was proper for him to do so. However he strongly maintained that he would have made no statement to the effect of the representation pleaded by the plaintiff in this case. I accept his evidence. It was submitted by counsel for the plaintiff that Mr Shackcloth's lack of recollection of any such conversation means that his evidence does not assist the defendant's case. I do not accept that submission. Apart from my general assessment of the credibility and reliability of his evidence, there is another matter which I regard as important. Mr Shackcloth conveyed to me that he had a careful understanding of the extent of his authority and responsibility within the Department hierarchy. He was responsible for the administrative processing of both dam permit and water licence applications. He gave advice to the Assessment Committee about dam permit applications, and he gave advice to the Minister or the Minister's delegate about water licence applications. He agreed that he did not tell any officer of Gunns that if they acted on the dam permit they would not receive the water licence. He agreed that his view was that he could see no reason why the water licence would not be issued. However, Mr Shackcloth knew that whether the water licence was issued was for the decision of the Minister or the Minister's delegate, and not for him, and that by October 2008 the application had not been assessed. He was not, then, a delegate of the Minister. In those circumstances I accept Mr Shackcloth's evidence that he would not have made the statement alleged. I find that Mr Shackcloth's lack of recollection of any such conversation is because the conversation in the terms alleged by the plaintiff did not occur. I find that Mr Shackcloth did not represent to Mr Lyon in September 2008, or at any other time, that the water licence would issue to Gunns. I could not exclude the prospect that Mr Shackcloth said to Mr Lyon something to the effect that he could see no reason why the water licence would not be issued. A statement in those qualified terms is not pleaded by the plaintiff. I am not satisfied on balance that even such a qualified statement was made. Even if it was, it is sufficiently clear to me that Mr Shackcloth did not intend it to be relied on, and it was not reasonable for the plaintiff to rely on it.
6. The cause of action in negligent misstatement must fail.

1. The plaintiff asserts a cause of action in estoppel. Estoppel operates to preclude a party to a proceeding from departing or withdrawing from a factual or legal state of affairs inconsistent with the state of affairs it has induced the other party to assume or expect. In this case, the plaintiff claims that it constructed the dam, thus incurring cost, in reliance on its assumption or expectation that if the water licence application was "incapable of being approved" or "likely to be not approved", then the dam permit would not have issued or the Minister or the Water Management Branch would have advised it that the dam permit should not be relied on until the water licence had been determined. The plaintiff asserts that it was induced to that assumption and expectation by the following conduct:

"(a) the advice of the Committee by letter of 3 June 2005 to the plaintiff that it had accepted the dam application;

(b) the advice by the Water Management Branch, by letter of 3 June 2005 to the plaintiff, that it had accepted the license application;

(c) the grant of the dam permit on 24 October 2005;

(d) the absence of any condition in the dam permit to the effect that it did not take effect unless and until the license application was approved;

(e) the failure of the Minister to provide any advice to the plaintiff between 3 June 2005 and 24 June 2011 to the effect that the license application would not be approved, was not likely to be approved or would not be considered within a reasonable period of time;

(f) the failure of the Water Management Branch to provide any advice to the plaintiff between 3 June 2005 and 24 June 2011 to the effect that the license application would not be approved, was not likely to be approved or would not be considered within a reasonable period of time."

1. The manner in which the plaintiff has pleaded the alleged estoppel is difficult to understand. That arises largely because a pleading of estoppel arising from a representation inducing an expectation or assumption that a licence will be granted meets the unassailable objection that it would be an impermissible impediment on the exercise of the Minister's statutory function: Minister for Immigration and Ethnic Affairs v Kurtovic [1990] FCA 22; (1990) 21 FCR 193; Attorney General (NSW) v Quinn (1990) 170 CLR 1. For that reason the plaintiff contends a narrower estoppel confined to the proposition that the Minister is estopped from denying an obligation to make a timely decision and/or is estopped from denying an obligation to give some advice to the plaintiff in a timely way. The statement of claim does not plead when it is alleged the estoppel came into existence.
2. It is necessary to say something about the first four components of the conduct relied on by the plaintiff (those listed as (a) to (d) above), because I am satisfied that none should be accepted as an inducement to the assumption or expectation asserted by the plaintiff or any other assumption or expectation. Taken together, the conduct described in those four components as amounting to an inducement is the acceptance of the dam permit and water licence applications on 3 June 2005, and the grant of the dam permit on 24 October 2005 without a condition that it did not take effect until the water licence was approved.
3. The "acceptance" referred to is in the form of a letter to the plaintiff dated 3 June 2005 on Assessment Committee for Dam Construction letterhead, and signed by Mr Shackcloth. The letter says two relevant things. First, it says that the Committee had "accepted the dam permit application". Applications for permits must comply with the Act, s 146(2), in that they must be in the approved form, and be accompanied by the prescribed fee and such information as the Committee may require. The letter does nothing more than advise the plaintiff that the dam permit application had been administratively accepted for consideration. There was no reasonable basis on which the plaintiff, or anyone else, could conclude that administrative acceptance of the dam permit application said anything about likelihood of the grant of the water licence application, and it could not reasonably have formed the basis of any assumption or expectation concerning the water licence.
4. The second relevant thing that the letter says is that the Water Management Branch had "accepted your application for a water licence". The terms of the letter thus confirm that Mr Shackcloth's office was the first port of call for both types of application. I would first point out that the assumption and expectation pleaded by the plaintiff arises from the dam permit application, not the water licence application. In any event, again, advice that the water licence application has been accepted says nothing more than that the application has been administratively accepted for assessment. The Act, s 62, imposed a requirement about the form of the application, and required that it be accompanied by the prescribed fee and such other information as the Minister required. I accept Mr Shackcloth's evidence to the effect that the administration branch checked applications to determine whether they had been completed and signed, that fees were paid, that landowner approval had been obtained, and the like. These were administrative steps to be checked prior to advertising and assessment of the application. Acceptance of the application said nothing about whether the application was more likely to have been ultimately approved or when that would occur. It had not yet been assessed. Assessment of water licence applications required assessment by members of a technical advisory group. The letter made clear that the application was to be advertised and then assessed by the Committee. Mr Shackcloth was cross-examined about the process. The inference put to him in cross-examination was that there was something irregular about accepting an application for a licence which had not been assessed and "may be wholly deficient". Mr Shackcloth, correctly in my view, rejected the inference. He agreed with the proposition that the dam permit application had been "assessed by senior people in the Department as suitable for submission to the ACDC". He agreed that this required a degree of hydrological assessment. He agreed that one of the considerations for the Assessment Committee in its consideration of the permit application was whether the applicant had, or could obtain, a water licence. He also agreed that by 29 June 2005 there were no indications that a water licence could not be issued. However none of this assists the plaintiff. Mr Shackcloth was correct to distinguish between permit and licence applications. One was to be determined by the Assessment Committee. The other was to be determined by the Minister. Different legislative and policy considerations applied to each. I accept Mr Shackcloth's evidence that the assessment of the licence application involved a much more detailed hydrological assessment than the permit application. Such an assessment was not then undertaken. There was no reasonable basis on which the plaintiff, or anyone else, could conclude that administrative acceptance of the water licence application said anything about the likelihood of the approval of the application, and it could not reasonably have formed the basis of any assumption or expectation concerning when or how the application would be dealt with, or what advice may be given about it.
5. The third and fourth aspects of the conduct relied on by the plaintiff as inducement is the grant of the dam permit on 24 October 2005 without a condition that it did not take effect unless and until the licence application was approved. By the Act, s 158(d), the Assessment Committee may refuse to grant a permit if the applicant "does not have a right or licence to take water into the relevant dam". It is immediately to be noted that the power in s 158(d) to refuse the grant of a permit is expressed in discretionary terms. The Assessment Committee may, conversely, issue the permit in the absence of a licence and without a condition requiring one. The issue of a permit without such a condition, as the Assessment Committee was entitled to do, could not reasonably have been taken as an inducement to any assumption or expectation concerning the licence. Many of the considerations to which I have just referred about consideration of the water licence application also apply here. A decision by the Assessment Committee could not be a representation concerning the future conduct of the Minister exercising a different statutory function. It was no proper basis for an assumption that the licence would be issued within any particular time, or that the Minister would give advice to the plaintiff about the status of the licence application.
6. The final two aspects of the representational conduct pleaded by the plaintiff together assert the failure of both the Minister and the Water Management Branch to provide any advice to the plaintiff between 3 June 2005 and 24 June 2011 "to the effect that the license application would not be approved, was not likely to [be] approved or would not be considered within a reasonable time". There is no dispute that no such advice was given to the plaintiff between the dates referred to. Counsel for the plaintiff submitted that the estoppel which arises from the conduct is that the defendant is estopped from "denying that you could take as long as you like" or estopped from "denying an obligation to say something".
7. I do not accept that the estoppel claimed by the plaintiff is established. In the first place I think that the plaintiff may reasonably be expected to appreciate that it could not safely rely upon the absence of advice from the Minister, or an officer from the Water Management Branch, about the licence application. Secondly, this case is quite different to the situation in Waltons Stores (Interstate) Limited v Maher [1988] HCA 7; (1988) 164 CLR 387 on which the plaintiff relies. In that case, the High Court found that the defendant was estopped from retreating from a contract it had encouraged the plaintiff, by a course of inaction, to assume had come into existence. In this case, there is no implied promise of any similar nature. What is asserted is not that the defendant is estopped from denying the grant of the licence, but is estopped from retreating from an obligation to decide the application within a reasonable time, or say something about it. This gets the plaintiff nowhere. That is so because, in my view, no such estoppel can arise on any of the authorities to which I have been referred. Moreover, the detriment suffered by the plaintiff arises from the result of the application, and not the delay in considering it.
8. The cause of action in estoppel fails.

1. Whether the loss suffered by the plaintiff is caused by the defendant's conduct is in issue in each of the causes of action pleaded by the plaintiff.
2. In the action in negligence, the plaintiff must establish that the economic loss suffered is caused by the defendant's breach. The Civil Liability Act 2000, s 13, applies:

(1) Prerequisites for a decision that a breach of duty caused particular harm are as follows:

(a) the breach of duty was a necessary element of the occurrence of the harm ('factual causation');

(b) it is appropriate for the scope of the liability of the person in breach to extend to the harm so caused ('scope of liability').

(2) In deciding in an exceptional case, in accordance with established principles, whether a breach of duty, being a breach of duty that is established but which can not be established as satisfying subsection (1)(a), should be taken as satisfying subsection (1)(a), the court is to consider (among other relevant things) whether or not and why responsibility for the harm should be imposed on the party in breach.

(3) If it is relevant to deciding factual causation to decide what the person who suffered harm would have done if the person who was in breach of the duty had not been so in breach -

(a) the matter is to be decided subjectively in the light of all relevant circumstances, subject to paragraph (b); and

(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.

(4) For the purpose of deciding the scope of liability, the court is to consider (among other relevant things) whether or not and why responsibility for the harm should be imposed on the party who was in breach of the duty."

1. Reference should be made to the loss suffered by the plaintiff as assessed later in these reasons. The issue of causation gives rise to difficult conceptual issues. The defendant contends that delay is not the operative cause of that which the plaintiff claims. Counsel for the defendant submits that the plaintiff is aggrieved, not because of delay, but because it did not get the water licence which was commensurate with its application. On the face of it, the submission carries considerable force. However I have come to a different conclusion. The plaintiff must prove that the failure to determine the application within a reasonable time was a necessary element of its loss. Determination of the licence application within a reasonable time required determination of the application prior to construction of the dam. Whatever the result, determination of the application would have avoided the loss. If the application had succeeded in the terms applied for, the plaintiff would not have suffered the loss. Had the application, in substantially the terms applied for, been refused, then I am satisfied that the dam would not have been constructed and the loss would not have been incurred. The evidence of Mr Lyon that, if he had known the licence would not be approved, he would not have proceeded with the work is not admissible: Civil Liability Act, s 13(3)(b). However I am satisfied on all of the evidence that his statement is, deciding the matter subjectively as required by s 13(3)(a), an accurate reflection of what would have occurred. The plaintiff was, at the time, a large commercial enterprise engaging on an agricultural venture for a managed investment scheme. It is most unlikely that the expense would have been incurred without the licence required to operate the dam at the required commercial capacity. There is, of course, a further possibility, that is, a decision within a reasonable time approving a licence, but at a level below that applied for. However, on the facts of this case and the evidence available to me, I think that the only two scenarios reasonably open are either approval of the application in substantially the terms applied for, or an effective refusal, as ultimately occurred. In either eventuality, had the decision been made within a reasonable time, the loss would have been avoided.
2. No reason was advanced by the defendant, and I can see no such reason why it is not appropriate for the scope of the liability of the defendant, if in breach, to extend to the harm so caused: s 13(1)(b).
3. Causation of loss suffered by the plaintiff arising from a cause of action in estoppel is to be determined without resort to the Civil Liability Act. I would, however, prefer to refrain from expressing a view unless necessary, because the issue of causation of damage may be affected by the nature and extent of any estoppel found.

1. None of the causes of action pleaded by the plaintiff has been successful. I will however say something about the question of damages. It is unnecessary that I do so in any detail because almost all of the facts which are relevant to that question are not in dispute. I find:
   • The plaintiff spent $740,360 on the construction of the dam.
   • The property on which the dam was constructed was sold at auction on 25 June 2010 for $1,500,000. The contract date for completion was 20 August 2010. Extensions of time for completion of the contract were agreed to by the purchaser until 30 April 2011.
   • Had the condition in the contract for sale of the property been satisfied, and the water licence issued and transferred, the plaintiff would have been paid the withheld sum of $250,000 (the particulars of loss say $255,000 but the correct figure is $250,000).
   • According to the opinion of valuer Andrew Cubbins, which I accept, at 30 October 2010:
     • the fair market value of the land, without a dam and without a water licence, was $1,200,000.
     • the fair market value of the land, with a dam and a water licence substantially in the terms applied for by the plaintiff, was $1,600,000;
     • the fair market value of the dam constructed on the property, as an improvement but without a water licence, was $100,000.
2. The plaintiff submits alternative means of assessing damages. The object of the award is to put the plaintiff in the position it would have been in but for the breach. In my view, the appropriate measure of damages is the amount spent on the dam and improvement works, $740,360, less a credit for the money withheld from the sale price of $250,000. The amount required to put the plaintiff in the position it would have been in but for the breach by the defendant is $490,360. The plaintiff claims damages in the nature of interest on that sum but not beyond the date of the appointment of the administrator of the plaintiff on 27 July 2012. It is a proper claim. The interest rates are not disputed by the defendant. The resulting calculation is agreed in the sum of $177,771.89.
3. It was not submitted by either party that the award should differ depending on which cause of action is made out by the plaintiff.

1. The final issue is contributory negligence. The Civil Liability Act, s 23, applies. The defendant pleads that the plaintiff contributed to its loss by its own negligence. The particulars alleged are that it:

(a) built the dam prior to obtaining a licence to take water;

(b) built the dam prior to the Minister approving the application for a licence to take water;

(c) failed to comply with the Notice issued by the Minister's delegate on 24 June 2011;

(d) entered into the contract of sale without first obtaining a water licence; and,

(e) agreed to the variations of the sale contract without first obtaining a water licence.

1. I am not satisfied that the plaintiff contributed to its own loss by failing to comply with the Minister's notice or entry into the contract in the terms it did. Those facts were not necessary elements of the loss. By then, the loss had been irretrievably incurred, at least for the plaintiff. However, the defendant submits that a reasonable and prudent person in the shoes of the plaintiff would not have embarked upon the construction of the dam without a licence or approval of a licence. I agree. The plaintiff knew it did not have a licence when construction commenced. It took the risk of construction. It could have refrained from construction. There was ample opportunity to obtain advice about the application, press for its formal determination, or take proceedings to compel a determination of the application. The grounds upon which it considered that a licence would be forthcoming on the terms applied for were based on its own understanding and assumptions derived from limited past experience and without expert advice. Its own consultants knew of the change in the assessment tool. Resort to evidence given at trial about the limited number of refusals of licence applications does not, in my view, assist the plaintiff because they were matters of which it had no knowledge at the time. The plaintiff failed to take reasonable care of its own interests by proceeding with construction of the dam, and incurring such considerable expense, without a licence. I think that a just and equitable apportionment of liability, having regard to the plaintiff's share in the responsibility for its own loss, is an apportionment of liability to the plaintiff of 40%. That is, the damages recoverable by the plaintiff ought be reduced by 40%.
2. The foregoing applies only to the claim in negligence. The findings of fact I have made in the unsuccessful negligent misstatement claim give rise to different considerations and which, if wrong, may also affect findings about contributory negligence. I do not wish to venture into a determination of how, if at all, a finding of contributory negligence may impact on a claim for equitable damages if a claim based on estoppel is made out.

1. The plaintiff's action does not succeed and is dismissed. There will be judgment for the defendant.