2. The application under s75 is otherwise dismissed.

3. Reserve liberty to make any application for costs.

4. Direct Principal Registrar to list for directions.

1. The Respondent makes application under s75 of the Victorian Civil and Administrative Tribunal Act 1998 to strike out the Applicant's proceeding.

2. In the proceeding the Applicant seeks damages and/or compensation pursuant to ss16(1) and (5) of the Water Act 1989 or, alternatively, damages at law, and also interest and costs.

3. The proceeding arises out of a development of land at 8 Redfern Road, Hawthorn as a four level office building and two subterranean car parking levels between January and December 2002. It is alleged the Respondent was the owner and occupier of land to the west and north west of the Applicant's land. It is alleged the Respondent's land is known as the "Fritsch Holzer Park" which, prior to the mid-1980's, was used for landfill and as a rubbish tip by the Respondent's predecessor - the City of Hawthorn. It is alleged the Respondent knew or ought to have known that that land contained a large body of sub-surface ground water. It is alleged that commencing in about early March 2002 a flow of leachate water flowed from that land onto the Applicant's land by reason of which the Applicant says it has suffered damage to property and/or economic loss. Particulars provided by the Applicant indicate a loss presently estimated at in excess of $385,000.00.

4. The Applicant, as I have noted, brings its claim under both the Water Act 1989 and at common law. As regards the latter, however, it is conceded by the Applicant that the Tribunal does not have general jurisdiction in negligence and nuisance. In consequence, it is agreed between the parties that I may proceed to strike out paragraphs 12-16 of the Statement of Claim. I accede to that submission and I strike out those paragraphs and that part of the proceeding. I consider that a striking out, rather than a dismissal (without adjudication), is appropriate.

5. I am asked also to strike out the rest of the proceeding brought under the Water Act. Section 16 of that Act reads as follows:

16. Liability arising out of flow of water etc.

s. 16

(a) there is a flow of water from the land of a person onto any other land; and

(ii) damage to the property (whether real or personal) of any other person; or

the person who caused the flow is liable to pay damages to that other person in respect of that injury, damage or loss.

(a) a person interferes with a reasonable flow of water onto any land or by negligent conduct interferes with a flow of water onto any land which is not reasonable; and

s. 16

(b) as a result of that interference water causes--

(ii) damage to the property (whether real or personal) of any other person; or

the person who interfered with the flow is liable to pay damages to that other person in respect of that injury, damage or loss.

(3) If the person who caused, or interfered with, the flow (as the case requires)--

(a) is the servant of another person and acted in the course of the servant's employment; or

(b) is the agent of another person and acted within the scope of the agent's authority--

that other person is liable to pay damages in respect of the injury, damage or loss.

(4) The existence of a liability under sub-section (3) does not extinguish the liability of the servant or agent under sub-section (1) or (2), as the case requires.

(5) If the causing of, or the interference with, the flow (as the case requires) was given rise to by works constructed or any other act done or omitted to be done on any land at a time before the current occupier became the occupier of the land, the current occupier is liable to pay damages in respect of the injury, damage or loss if the current occupier has failed to take any steps reasonably available to prevent the causing of, or the interference with, the flow (as the case requires) being so given rise to.

(6) The existence of a liability under sub-section (5) extinguishes the liability under sub-section (1) of the person who caused the flow or the liability under sub-section (2) of the person who interfered with the flow (as the case requires).

By s3(1) of the Act "water" means water whether or not it contains impurities and "flow" in relation to water is defined as including "discharge, release, escape, percolation, seepage and passage" and it is defined to include also "both surface and underground flow".

6. I consider that in deciding whether a proceeding should be struck out under s75 of the 1998 Act I should apply the conventional pleadings test as it is called. That is the proceedings must be shown to be plainly hopeless or manifestly untenable. See General Steel Industries Inc v Commission of Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at p129 per Barwick CJ. A court or Tribunal should not proceed to strike out unless the case is very clear. Or, as the Privy Council observed in Wharf Properties Ltd v Eric Cumine Assocs (1991) 52 BLR 1 at p19, the power to strike out is reserved for cases which are "plain and obvious." For this purpose (and for this purpose only) I am asked to take as facts the matters stated in the Statement of Claim. I agree that this is the course I should follow.

7. I consider that, in reality, there were two grounds advanced to me why the remainder of the proceeding should be struck out. In the first place, it is argued that, on the basis of the Statement of Claim, there is not a flow of water "onto" the Applicant's land. Secondly, it is argued that the Statement of Claim does not locate the Respondent as the party that caused that flow if there was one.

8. I have considered the submissions of the parties very carefully but, having done so, I have formed the view that the test for striking out has not been met. I am not satisfied, on the facts as I take them to be that the Applicant's proceeding or the surviving part thereof, is plainly hopeless or manifestly untenable or that it cannot possibly succeed.

9. It clearly is correct that under s16(1) of the Water Act there must be a flow of water from the land of a person "onto" other land. The Respondent refers to the decision in Murray-Goulburn Co-Operative Co Ltd v Leongatha Water Board (1996) 11 VAR 205 at 210 and argues that to have a flow of water "onto" adjoining land there must be a surface inundation at least to some degree. The Respondent then submits that what is alleged in the Statement of Claim is not a flow "onto" the Applicant's land in this sense in that the flow was subterranean and occurred only after an excavation on site on the Applicant's land to a depth of about 4 metres.

10. I agree that this is, in effect, what is alleged in the Statement of Claim. But I still consider the flow of water was "onto" the Applicant's land. I think it is erroneous, as was pointed out by Counsel, to regard the Applicant's land as limited to its surface conditions. I agree that "land" is not two dimensional but is an area of three-dimensional space and that in law the rights of an owner of land are embodied in the maxim traceable back to the year 1285 - cuius est solum eius est usque ad coelum et ad inferos, meaning, the person who owns land owns it from the heavens above to the centre of the earth below. See P Butt_, Land Law_, 4th ed 2001, paras 202, 205. See also per Jacobs J in Re Lehrer & Ors and the Real Property Act 1900-1956 [1961] SR (NSW) 365 at pp369-70. A seepage underground from one block of land to another is thus a flow "onto" that other land for this purpose. Under the Act a "flow" includes a seepage: see s3(1). Further under the Interpretation of Legislation Act 1984 "land" is defined to include "land covered with water" and any right "in or over" land. Thus, when the flow occurred, it was onto the Applicant's "land" in the sense that its land included the land at the base of the excavation covered by the water.

10. In a sense, then, there was a surface inundation because the surface of the Applicant's land at that point was constituted by the base of the excavation. This is consistent with the analysis in Murray-Goulburn Co-Operative Co Ltd v Leongatha Water Board, above. That case can be distinguished on its facts, in any event, and it was concerned with the provision in s157 of the Act. But if I am forced to say whether the analysis in the Murray-Goulburn Co-Operative case is correct or not, I must indicate my view, with respect, is that it is not correct. Given that ownership of land is not confined merely to its surface and, therefore, that the land one owns extends beneath the surface, it makes perfect sense, in my view, to say that e.g. a seepage underground into the area of one's land is a flow "onto" that land. I cannot see that it was Parliament's intention to confine s16(1) to surface inundations and as was observed in Andrew Pty Ltd v Jardine Mathieson Victoria Ltd (1996) 16 AATR 77 at 87 "had it been Parliament's intention to confine its operation to surface flows of water, it would have been very easy to do so." Parliament has not done this and therefore I cannot see that only surface inundations are included. But as I have indicated, it may properly be maintained in my view that there was a surface inundation in this case, in any event. Further, if, as appears to be so, these provisions of the Water Act provide the only avenue of redress for damage occasioned by water flows (see Coles Myer Ltd v City West Water Ltd [1998] VSC 63; (1998) 14 VAR 37) then very clear words wound be needed, in taking away common law rights, to show that only surface inundations are remediable. But no such clear words can be found. From this I consider it may properly be inferred that Parliament did not intend only surface inundations to be remediable. If nothing else, the point at least seems to me to be highly arguable and not obviously wrong.

11. It clearly is correct too, dealing with the Respondent's second submission, that it must be shown by the Applicant that the Respondent is the party that caused the flow. Counsel for the Applicant, however, described this as clearly a "triable" issue and I agree. The Applicant may or may not succeed in the allegation it is making. This, however, is not the occasion to determine that question - or the question of the sufficiency of the Particulars. This is a principal allegation, not obviously untenable or unsound, on which there should be a hearing.

12. Except as I have indicated, I have formed the view then that the Respondent's application under s75 must fail.

13. I reserve liberty to the parties to argue any questions of costs.

14. I direct the Principal Registrar to list for directions on a convenient date.