Minister Administering the Water Management Act 2000 v Sharkey

Court of Appeal (NSW)|2017-08-08|Before: Meagher JA, White JA, Preston CJ

Solicitors: Crown Solicitor's Office (Applicant) File Number(s): 2017/157731 Decision under appeal Court or tribunal: Land and Environment Court Jurisdiction: Class 4 Citation: [2017] NSWLEC 47 Date of Decision: 28 April 2017 Before: Preston CJ of LEC File Number(s): 2016/189771

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Issue between the parties

The applicant Minister seeks leave to appeal from an answer given by the primary judge (Preston CJ of LEC) to a separate question in a Class 4 proceeding in the Land and Environment Court: Sharkey v Minister administering the Water Management Act 2000 [2017] NSWLEC 47. That question concerns the meaning of the expression "the upper limit of the storage of Hume Dam", when used to describe the point on the Murray River downstream from which that river has been declared to be a "regulated" river for the purposes of the Water Management Act 2000 (NSW) (2000 Act).
The respondent, Mr Sharkey, is the owner of a property at Talmalmo on the Murray River. That property includes Lot 51 in DP 753357 (Lot 51) which in turn had the benefit of Water Licence 50SL 075393 issued under the Water Act 1912 (NSW) (1912 Act), s 12. That licence entitled the lawful occupier of the property (1912 Act, s 16), to take water from the Murray River for the purpose of irrigation using water supply works.
The issue between the parties, which turns on that question of construction, is whether on 1 July 2004 that water licence was converted to a "regulated river (general security) access licence" under the 2000 Act, s 57, as Mr Sharkey contends; or, as the Minister contends, it was converted on 30 January 2012 to an "unregulated river access licence". The resolution of this issue depends on whether the 1912 Act licence permitted water to be taken from a "regulated" or "unregulated" part of the Murray River under the 2000 Act.
Whether a river or part of a river is "regulated" or "unregulated" for the purposes of the 2000 Act depends on whether the river or relevant part of the river "is declared by the Minister, by order published in the Gazette, to be a regulated river": 2000 Act, s 4(1), Dictionary.
By operation of the transitional provisions of the 2000 Act licences issued under the 1912 Act were to be converted into water access licences under the 2000 Act. Section 403, Schedule 10, cll 2 and 4, and Schedule 11 provide that on the "appointed day" a 1912 Act licence held for the purpose of irrigation is converted to (the language used is "taken to be") either a regulated river (general security) access licence, or an unregulated river access licence, depending on whether the entitlement under the 1912 Act licence permitted the taking of water from a place or places on the Murray River where that river was a "regulated" or an "unregulated" river.
In accordance with the position as maintained by the Minister, on 30 January 2012 unregulated river access licence, WAL29881, was issued in relation to Lot 51. Mr Sharkey then brought the Class 4 proceeding seeking an order that the Minister issue a regulated river (general security) access licence in substitution for licence WAL29881. On 23 January 2017, Sheahan J ordered that the question as to the proper construction of the expression "the upper limit of the storage of Hume Dam" as used in the Murray Water Management Area Regulated River Order (Murray), published in the New South Wales Government Gazette No. 110 on 1 July 2004, be determined separately and before any other issue in the proceeding.
On 28 April 2017, the primary judge ordered that question to be answered as follows: … the upper limit of the storage of Hume Dam will be the point up the Murray River where the bed of the river first reaches 192m AHD. This will be the furthermost point that water stored by the Hume Dam when full to a level of 192m AHD can extend up the Murray River.
Leave to appeal is required because the primary judge's order answering the separate question was interlocutory. Leave to appeal is not opposed and should be granted for the reasons submitted by the Minister. The matter in issue will finally determine the question of statutory interpretation between the parties. That question is of some public importance and, as the Minister indicates, and I accept, its resolution will affect licensees other than Mr Sharkey.

Statutory context

According to the Dictionary of the 2000 Act, a "river" includes: (a) any watercourse, whether perennial or intermittent and whether comprising a natural channel or a natural channel artificially improved, … whether or not it also forms part of a lake or estuary, but does not include anything declared by the regulations not to be a river.
A "dam", which is not separately defined, falls within the definition of "lake", which includes: (a) a wetland, a lagoon, a saltmarsh and any collection of still water, whether perennial or intermittent and whether natural or artificial, and (b) any water declared by the regulations to be a lake, whether or not it also forms part of a river or estuary, but does not include any water declared by the regulations not to be a lake.
In the context of the management of the allocation and use of water before the enactment of the 2000 Act, the terms "regulated" and "unregulated" were used to distinguish between rivers or watercourses which have structures or other physical works - including storage dams, weirs and diversion works - used to control the flow of water for the benefit of water users, and rivers or water courses which did not have such structures or works. In other words, those terms indicate whether the flow of water is physically managed or controlled rather than whether the river or watercourse is subject to some executive or other order or regulation. That sufficiently appears from the second reading speech to the Water Amendment (Charges) Bill 1996: New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 19 June 1996 at 3168, 3169. Those terms are used in the same sense in the descriptions of the categories of water access licences which may be issued under the 2000 Act, s 57.
The "appointed day", as defined in 2000 Act, Schedule 10, cl 2 (see [5] above), is the day on which it is declared under s 55A that a part of the State or a water source and related 2000 Act access licence are subject to Chapter 3, Part 2 (headed "Access licences").
The 2000 Act provides for the constitution of water management areas (s 11) and the promulgation of management plans or Minister's plans (Chapter 2, Parts 3 and 4) which deal with water sharing for the whole or any part of a water management area, or of one or more water sources within such an area (Part 3, Div 2). Any such water sharing provisions must then address the requirements for water within the area, or from the water source, as well as the requirements for water for extraction under access licences.
The Murray Water Management Area was constituted a water management area on 23 November 2001; and on 1 July 2004 the part of the Murray River water source downstream from the upper limit of Hume Dam was declared by Proclamation pursuant to s 55A to be subject to the access licence provisions in Chapter 3, Part 2. The terms of that declaration were (New South Wales Government Gazette No. 110, p 5004): …declare that, on and from 1 July 2004: (a) Part 2 of Chapter 3 of [the 2000 Act] applies: (i) to each water source to which any water sharing plan referred to in Schedule 1 applies, and (ii) to all categories and subcategories of access licence… in relation to any such water source, …
The water sharing plans referred to in Schedule 1 of that declaration include the Water Sharing Plan for the New South Wales Murray and Lower Darling Regulated Rivers Water Sources 2003 (the Minister's 2003 Water Sharing Plan), which applies to two water sources: the New South Wales Murray Regulated River Water Source and the Lower-Darling Regulated River Water Source. The former is described in cl 4(2) of that Plan as the water sources and waters "between the banks of all rivers, from the upper limit of Hume Dam water storage, … downstream to the South Australian border which have been declared by the Minister to be regulated rivers" (emphasis added). The term "water storage" is defined in Schedule 1 to that Plan to mean "a state owned dam, weir or other structure, which is used to regulate and manage river flows in this water source and the water body impounded by this structure" (cl 5 (2)).
The Minister's order declaring the "regulated rivers" which were part of the New South Wales Murray Regulated River Water Source was made on 28 June and published on 1 July 2004. That order, the Murray Water Management Area Regulated River Order (Murray) (see [6] above) relevantly declared: … that the rivers in the Murray Water Management Area that are downstream of the upper limit of Hume Dam water storage and listed in the Schedule below are regulated rivers. [Emphasis in original]
The rivers listed in the Schedule to that order include: Murray River, from the upper limit of the storage of Hume Dam downstream to the South Australian border.
The "appointed day" under s 55A in respect of the remaining and "unregulated" part of the Murray River was 30 January 2012. By the Water Management (Application of Act to Certain Water Sources) Proclamation 2012 it was declared that the 2000 Act, Chapter 3, Part 2 applied to each water source to which the Water Sharing Plan for the Murray Unregulated and Alluvial Water Sources 2011 (the Minister's 2011 Water Sharing Plan) "applies in relation to all categories and subcategories of access licence for any such water source other than floodplain harvesting access licences". That plan, made under s 50, is described in cl 4 as applying to Murray River water sources that do not include water "contained in the New South Wales Murray Regulated River Water Source as defined" in the Minister's 2003 Water Sharing Plan (cl 4(5)). Consistently with the view taken by the Minister as to the meaning of the expression in issue, the 1912 Act water licence was treated as providing access to an "unregulated" part of the Murray River upstream of the Hume Dam water storage, and unregulated river access licence WAL29881 was issued in respect of that unregulated water source.

Competing constructions

It is common ground that the water level of the Hume Dam when full is at an elevation of 192m AHD, an acronym for Australian Height Datum, the standard measure for height above sea level.
The respective arguments of the parties were summarised by the primary judge: [21] Mr Sharkey contended that the upper limit of the storage of Hume Dam refers to the furthermost points of the Murray River and its tributaries that the water stored by the Hume Dam can extend when the Hume Dam is full. The "storage of Hume Dam" refers to the water stored by the Hume Dam. It was common ground between the parties that the highest elevation that water stored by the Hume Dam can reach when the Hume Dam is full is 192m Australian Height Datum (AHD). Water stored to this elevation will inundate all land upstream of the Murray River and its tributaries that is at an elevation equal to or lower than 192m AHD. The furthermost points of the Murray River and of each of its tributaries which will be inundated by water stored by the Hume Dam will be where the bed of the river and tributaries first reaches 192m AHD. These points on the Murray River and its tributaries mark the upper limit of the storage of Hume Dam. The regulated part of the Murray River commences at this point upstream of the Hume Dam and extends downstream past the Hume Dam wall along the river to the South Australian border. [22] The Minister argued for a construction of the expression "the upper limit of the storage of Hume Dam" that would exclude the uppermost reaches of the Murray River and its tributaries that are inundated when the Dam is full. The Minister contended that "the upper limit of the storage of Hume Dam" is a line drawn across the Murray River between two points on opposite banks of the river, each of which is the point where the bank of the river first reaches an elevation of 192m AHD. Although water impounded by the Hume Dam to a level of 192m AHD may extend further upstream along "fingers" of the Murray River and its tributaries past this line, such stored water should not be included within "the storage of Hume Dam".

Construction adopted by the primary judge

The argument below proceeded on the basis that the expression to be construed is that in Schedule 1 of the order published on 1 July 2004 (see [17] above). The Minister's declaration, however, is in terms that the rivers in the Murray Water Management Area "that are downstream of the upper limit of Hume Dam water storage and listed in the Schedule below" are regulated rivers (emphasis added) (see [16] above). No attention was directed to whether there is or should be taken to be any difference in meaning of the expressions - "upper limit of the storage of Hume Dam" (appearing in the Schedule to the declaration) and "upper limit of Hume Dam water storage" (appearing in the body of the declaration); the latter to be understood taking account of the definition of "water storage" in the Minister's 2003 Water Sharing Plan (see [15] above).
In relation to the meaning of the former, the primary judge concluded: [31] First, the ordinary and natural meaning of the expression supports Mr Sharkey's construction, not the Minister's construction. The order of the Minister declares a stretch of the Murray River to be a regulated river, from a point upstream ("the upper limit of the storage of Hume Dam") to a point downstream ("the South Australian border"). The upstream point is the furthermost point up the Murray River that water stored by the Hume Dam can extend when the Hume Dam is full. The "storage of Hume Dam" evidently refers to the water stored by Hume Dam. The "upper limit" of water stored by Hume Dam is set by the height of the dam spillway, which is 192m AHD. The "upper limit" of water that can be stored by the Hume Dam when it is full is, therefore, 192m AHD. [32] The areas of land that will be inundated by water stored by the Hume Dam to the upper limit of 192m AHD will be all areas of land upstream of the dam wall with an elevation equal to or lower than 192m AHD. These areas include any area of land between the riverbanks of the Murray River that is equal to or lower than 192m AHD. The water stored by the Hume Dam over these areas of land equal to or lower than 192m AHD will constitute part of the regulated river. The upper limit of the storage of Hume Dam on the Murray River will be the point where the riverbed rises above 192m AHD. [33] It matters not that parts of the land within these areas that are inundated by water stored by the Hume Dam when it is full may have had water from the Murray River over them before the Hume Dam was constructed and water was impounded. All dams inundate stretches of the river that is impounded by the dam. Different lengths of the river will be flooded depending on the level of the water stored at any particular time. The stretches of the river flooded by the impounded waters constitute part of the storage of the dam. They do not lose that character because they used to or still have water from the river flowing down them. [34] Furthermore, the dam may cause more water to be stored on and above the land over which the river flows than was there before the river was dammed. I reject the Minister's argument that the "fingers" of stored water up the Murray River and tributary streams cannot be considered to be part of the storage of Hume Dam.
His Honour then dealt with the appellant's remaining two arguments as to why its construction was to be preferred. The first was that it gave greater effect to the evident purpose of the Minister's order which was to delineate the part of the river which was "regulated". The second was that Mr Sharkey's construction would give rise to considerable practical difficulties in determining at any point in time, or over time, whether a particular point on the river was upstream or downstream of the relevant "upper limit". His Honour rejected each of those arguments, concluding that the "upper limit" of the Murray River, downstream of which that river was a "regulated river", was where the bed of the river first reached 192m AHD: Judgment [42].

Arguments on appeal

The Minister contends that in construing the relevant provision the primary judge erred in three respects. They are: in concluding that the ordinary and natural meaning of that provision was in accord with Mr Sharkey's construction; in rejecting the Minister's submission that the reason for the distinction between "regulated" and "unregulated" rivers in the 2000 Act was better achieved by the Minister's construction; and in not accepting that Mr Sharkey's interpretation was impracticable and unworkable.

Ordinary and natural meaning

It is common ground that the expression "upper limit of the storage of Hume Dam" is used to identify a point in the Murray River, downstream from which the river is a "regulated" one. It does so by reference to the upper limit of the storage of the dam. Whatever that "storage" is taken to refer to, it is at its "upper limit" (and the dam relevantly full) when the level of water is at an elevation of 192m AHD.
For the "upper limit" of the "storage of Hume Dam" to identify a point in the river upstream of the dam wall, it must be taken to refer to a point in the river beyond which there is no "storage of Hume Dam".
Where the banks of the river and surrounding land are at an elevation above 192m AHD, so that they are not inundated when the dam is full, but the bed of the river is below that elevation, the water behind the dam wall will extend upstream and within the banks of the river to a point near or where the bed of the river is above 192m AHD. That much is not contested as a matter of physics or hydrology. It is in this state of affairs that the competing interpretations are engaged.
The Minister contends that the water impounded upstream from where the river banks are above 192m AHD does not form part of the "storage of Hume Dam". This argument treats "the [water] storage of Hume Dam" as describing the body of water comprising the Hume Dam when that dam is full. In the Minister's written submissions, it is said that "as a matter of ordinary language" when the dam is full, that body of water would not be taken to include a long "finger" of water impounded between the recognisable banks of the river.
That when the storage of Hume Dam is at its "upper limit", the water stored behind the dam wall includes any water that inundates land at an elevation below 192m AHD is acknowledged to be so, whether that land is otherwise a dry creek bed or gulley or the bed of the Murray River, either downstream or upstream of the point, travelling upstream, at which the elevation of its banks first exceeds 192m AHD. It is also accepted that, with the exception of the water impounded between the river banks where those banks exceed 192m AHD, all of this water is "storage of Hume Dam".
It is not suggested that in the expression "upper limit of the storage" of the dam, "storage" has a technical or special meaning. As used, and as defined ("water storage"), it has its ordinary meaning as the water body impounded by a dam or other structure. Accordingly, this description is not concerned with whether at the relevant, or any earlier, point in time the water body impounded forms, or had formed, part of a dam or a river or both.
The construction of this expression as referring to the water impounded by the dam when full equally applies to the other expression used in the Minister's declaration, "upper limit of Hume Dam water storage". Each focuses on the water stored. There is a further indication in the immediate statutory context that neither expression by its reference to Hume Dam should be understood to refer only to water stored "in" that dam rather than the Murray River. The definitions of "river" and "lake" in the 2000 Act (see [9] and [10] above) recognise that a lake, and accordingly a dam, may form part of a river, and that at the same time a river may form part of a lake or dam. It is not to be supposed, where the Act proceeds on the basis that a river may at the same time form part of a dam, that the Minister was intending by the references to "Hume Dam water storage" and "storage of Hume Dam" to be drawing a distinction between water stored "in" that dam and water stored by the dam, but in the river.
As the primary judge observed at Judgment [33], different stretches of the river will be flooded by waters impounded by the dam depending on the level of water at the dam wall. At times, parts of the river including its banks will be completely covered and other parts only partially flooded. In either case, the water storage of the dam continues to describe all waters stored by the dam structure, whether or not between the banks of the river. I agree with the primary judge that applying the ordinary and natural meaning of the relevant words, stretches of the river flooded by the impounded waters constitute part of the storage of the dam.

Any reason to depart from ordinary and natural meaning

Each of the Minister's remaining arguments proposes a reason, rejected by the primary judge, for not adopting the ordinary and natural meaning of the Minister's declaration.
As to the first, the Minister says that the purpose of the order is to delineate between where the river is "regulated" and where it is "unregulated" and that the former describes a part of the river where "water supply is assured by a storage dam and/or other works, such as weirs and diversion works". It is submitted that it does not give effect to that purpose to include within the "regulated" river the "fingers" of stored water in which there would be "river water flowing even if the dam were not there". In making this submission, the Minister accepts that there would be additional water stored in that part of the river when the dam is full; and that as one moves downstream from the "upper limit", the quantity of that stored water must increase. It is accepted that irrespective of which construction is adopted, when the dam is not full there is not likely be any stored water at that "upper limit".
The unstated premise of this argument is that the distinction between "regulated" and "unregulated" is between parts of the river where water supply is assured by a storage dam or other works, and by direct access to the water source at that point, and parts where such supply is not assured. In support of that being the relevant distinction, the Minister relies on the second reading speech referred to in [11] above. That speech, whilst confirming in general terms how in this context the references to "regulated" and "unregulated" waters are to be understood does not support the existence of the distinction for which the Minister contends. Instead, the position remains that the Hume Dam is a storage dam which enables the control of the flow of water in the Murray River. The Minister could have declared it to be a regulated river below the dam wall. Instead the relevant point is declared by reference to the "upper limit" of the dam's storage. The working out of the meaning of that language is not assisted by the matter to which this argument is directed.
As to the second, the Minister submits that subordinate instruments such as those in question here should be given a "practical interpretation". It is said the construction adopted by the primary judge leads to impractical consequences making it unlikely that interpretation could have been intended. The principle is that stated by Lord Reid in Gill v Donald Humberstone & Co Ltd [1963] 3 All ER 180 at 183. However, as was emphasised by Basten JA (McColl and Payne JJA agreeing) in Wingecarribee Shire Council v De Angelis [2016] NSWCA 189 at [20] that principle "does not, however, require an abandonment of basic principles of statutory construction, which require attention to the language of the instrument and its apparent purpose".
The evidence of Mr Brian Graham, the manager of Water Allocations at the Department of Primary Industries (the Department) was that the "Regular weather events such as storms or floods, can also have the effect of making sudden and severe changes to the river bed [with the effect that] the 192 metre AHD contour within the river bed will likely vary from year to year and from season to season. At least in relatively flat environments, this variability could extend over a distance of kilometres". In contrast, he said there was a "far greater degree of stability in the elevation of the surrounding land adjacent to the river bank than in the river channel, particularly where the land is a vegetated/grassed grazed area and any overland flow velocities are low".
It was said that by reason of that greater stability in the elevation of the surrounding land, the Minister's construction could be implemented easily by reference to aerial photographs which would identify where the riverbanks reach the 192m AHD elevation. At the same time Mr Sharkey's construction could not because the point where the riverbed first reached that elevation could continually change significantly over time. For that reason the Minister's construction was to be preferred as "more practical": Judgment [29].
The primary judge rejected this argument, reasoning as follows. The language used in the Minister's order "does not fix a defined location for the upstream point where the regulated part of the river commences" and instead "uses an expression that can result in different locations for the upstream point depending on the facts and circumstances at the time": Judgment [37]. The upstream point at which the river became deregulated could change because the height of the dam spillway could vary: Judgment [38]; or because natural events could erode parts of the surrounding land, riverbanks and riverbeds so that they become below 192m AHD: Judgment [39]. The possibility or likelihood of such changes was a "necessary and intended result of the words used" and does not warrant avoidance: Judgment [40].
In pressing this argument the Minister adopts the primary judge's description in Judgment [37] (extracted above). Relying on Mr Graham's evidence, the Minister argues that the possibility that a water access licence holder may be prohibited from taking water from the river adjacent to their property was a likely unintended consequence.
This argument is misconceived, in part because the Minister's order does not have an ambulatory application. The Murray Water Management Area Regulated River Order (Murray) took effect on 1 July 2004. On that day, the Murray River downstream of the Hume Dam became a "regulated river". A scheme which provided for the issue of regulated access licences took effect in relation to the water source constituted by that part of the river. Such access licences specify "shares in the available water within a specified water management area or from a specified water source" (s 56(1)(a)); and are transferrable (s 71M), and the shares in the available water are assignable (s 56(3)). The object of the scheme is to "provide for the orderly, efficient and equitable sharing of water from water sources" (s (3)(e)). Thus the order identifies the "specified water source" to which the licences relate and fixes the date from which that water source became subject to the provisions of Part 2 (s 55A). In this second respect, it operates like a transitional provision. Such provisions are generally not ambulatory because they fix the time from which provisions commence to apply: Wingecarribee Shire Council v De Angelis at [9]. Finally, furtherance of the object referred to above is only achieved by the order specifying with certainty both the extent of the water source and the time at which it became subject to Part 2 of Chapter 2.
Accordingly, the exact point, downstream from which the river became "regulated" is static, and was fixed by the application of that order, having regard only to the physical circumstances relating to the elevation of the river banks and riverbed at 1 July 2004. It should also be noted that in the course of argument, the Minister accepted that the only date relevant to determining whether particular parts of the river are "regulated" or "unregulated" is the "appointed day" under s 55A in relation to that part of the river. Mr Graham's evidence was not that it was impossible at that time to make such a determination. This was similarly conceded.
Any difficulties which might now arise in precisely determining that point are not consequences of the adoption of the ordinary meaning of the language of the declaration. Accordingly, as the primary judge concluded, considerations of practicality do not provide a good reason for departing from that meaning. It follows that the appeal should be dismissed.

Mr Sharkey's application to lead further evidence

This conclusion makes it unnecessary to consider Mr Sharkey's application to lead further evidence on the hearing of the appeal. That application was to tender five documents which had been produced to Mr Sharkey by the Minister by letter dated 6 July 2017. That occurred as part of the resolution of an interlocutory dispute between the parties concerning the production of documents under a subpoena to produce issued at the request of Mr Sharkey on about 26 January 2017. On 15 February 2017, the applicant filed a motion to set that subpoena aside. Later in February the parties signed a consent order adjourning the return of the subpoena and application to set it aside until after the determination of the separate question. In his argument to this court, Mr Sharkey asserted the relevance of the documents as being to a challenge to the veracity of a statement by Mr Graham in his affidavit as to how the Department interprets the expression "the upper limit of the storage of the Hume Dam". What emerges from the foregoing is that the material sought to be tendered was available at the time of the hearing of the separate question, and not relevant to the issue of construction decided by that question. For these reasons had the application remained relevant, it would have been necessary to reject it.

Conclusion

The orders I propose are: 1. Grant the applicant leave to appeal. 2. Appeal dismissed. 3. Applicant/appellant pay the respondent's costs of the application for leave and of the appeal.
WHITE JA: I have had the advantage of reading in draft the reasons of Meagher JA. I agree with his Honour's reasons and with the orders he proposes. These reasons do not differ in substance from those of Meagher JA, but explain the basis of my concurrence.
Mr Sharkey contends that the licence issued on 3 April 2003 under s 12 of the Water Act 1912 (NSW) was converted on 1 July 2004 to a regulated river (general security) access licence under s 57 of the Water Management Act 2000 (NSW) (the "2000 Act") by reason of s 403, cll 2 and 4 of Sch 10, and Sch 11 of the 2000 Act. Whether that is so or not depends upon whether the part of the Murray River in respect of which the licence issued on 3 April 2003 authorising the extraction of water for stock purposes and irrigation was a "regulated river" within the meaning of both the 2000 Act and of the Minister's declaration contained in the order dated 28 June 2004 that was published in the Gazette on 1 July 2004. The terms of that Order are set out at [16] and [17] of Meagher JA's reasons.
It is not in dispute that as a matter of physical fact the upper limit of the storage of the Hume Dam is the point where the bed of the river is at a height of 192m AHD. When the dam is full part of the water stored by it will be stored within the banks of the river and its tributaries. The Minister's submission is, in substance, that the regulated river is the river downstream from the lake created when the Hume Dam is at the upper limit of its storage. Anything stored in the Murray River and its tributaries upstream of that point is not, according to the Minister's submission, within the upper limit of the Hume Dam's water storage. As a matter of simple fact and the ordinary meaning of the words used, that is not so.
The Minister's principal argument was that the practicalities of the Minister's interpretation favoured the Minister's construction because the bed of the river can change dramatically and may do so over a shorter period of time, and to a substantially greater extent, than the river banks. However, in the course of oral submissions, Mr Herzfeld accepted that for the purposes of the application of the transitional provisions of the 2000 Act, the point of time when it would be necessary to determine the place at which the river bed reached a height of 192m AHD would be when the transitional provisions started to apply to Mr Sharkey's property to determine whether, at the relevant point on his property, the river was regulated or unregulated. That concession was correct. As Meagher JA observes, Mr Graham, upon whose evidence the Minister relied on this point, did not go so far as to say that it would not be possible to determine whether or not as at 1 July 2004 the bed of the river at the relevant point on Mr Sharkey's property was above or below 192m AHD.
Mr Herzfeld nonetheless submitted that, if there were a change to the point at which the river was regulated or unregulated because of changes to the river bed that would affect the right to use a water access licence, there would be broader consequences. But that submission assumed that the point at which the Murray River became a regulated or an unregulated river, being the upper limit of the storage of the Hume Dam, could change from time to time. As Meagher JA observes, and as Mr Herzfeld accepted in the course of oral submissions, that point was to be determined as at 1 July 2004.
Section 57(1) of the 2000 Act lists 14 categories of access licences. These relevantly include:

regulated river (high security) access licences;
regulated river (general security) access licences;
regulated river (conveyance) access licences; and
unregulated river access licences, in that order.

Section 58 specifies the priorities to be observed in relation to access licences where water allocations have to be diminished. The water allocations of a higher priority licence are to be diminished at a lesser rate than the water allocations of a lower priority licence (s 58(2)).
Section 71O empowers the Minister to consent to the cancellation of an access licence and to grant the holder of an access licence a new licence of a different category (or sub-category). The Minister correctly submits that an application for the issue of a new licence under s 71O(1) is a "general dealing" in an access licence and that such dealings are subject to the access licence dealing rules established by any relevant management plan (s 71Y(1)(c)).
The Minister submitted that under the Water Sharing Plan for the New South Wales Murray and Lower Darling Regulated Rivers Water Sources 2003 conversion from a regulated river (general security) access licence to an unregulated river access licence (or vice versa) was not permitted. The Minister submitted that that is also the case under the Water Sharing Plan for the New South Wales Murray and Lower Darling Regulated Rivers Water Sources 2016 which replaced the water sharing plan of 2003 and under the Water Sharing Plan for the Murray Unregulated and Alluvial Water Sources 2011.
This analysis was not challenged by Mr Sharkey and appears to be correct. Such a scheme and the hurdles placed on changing the categories of an access licence strongly point to the conclusion that 1 July 2004 was the effective date for applying the Minister's declaration as to the extent to which the Murray River was a regulated river.
For these reasons and for the reasons given by Meagher JA, I consider that the Minister's appeal should be dismissed with costs.
EMMETT AJA: These proceedings are concerned with the proper construction of the phrase "the upper limit of the storage of Hume Dam", which appears in orders published under the Water Management Act 2000 (NSW) (the 2000 Act), which repealed and replaced the Water Act 1912 (NSW) (the 1912 Act). The orders were published in the Government Gazette on 26 February 2003 and 1 July 2004 by the present applicant, the Minister Administering the 2000 Act (the Minister).
Section 12 of the 1912 Act authorised the issue of water access licences. As part of the transitional arrangements following the repeal of the 1912 Act, licences issued under the 1912 Act were to be converted into licences under the 2000 Act. The date of conversion and the category of licence under the 2000 Act into which a licence under the 1912 Act was converted depended upon whether the licence issued under the 1912 Act was with respect to a "regulated river" or an "unregulated river".
The dictionary to the 2000 Act defined a "regulated river" as a river that the Minister declares, by order published in the Gazette, to be a regulated river. By the orders in question, the Minister declared the Murray River to be a regulated river "from the upper limit of the storage of Hume Dam downstream to the South Australian border".

Amendments 12 December 2017 - Headnote: "the Hume dam" amended to "Hume dam" [27] "behind by the dam wall" amended to "behind the dam wall" [31] "describe only to" amended to "refer only to" [42] "in relation" amended to "in relation to" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 December 2017

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