Ocelota Ltd. Ltd. & Ors. v. Water Administration Ministerial Corporation & Anor. [2000] NSWSC 370

INTRODUCTION 1 The second plaintiffs Norman Harris and Myrna Harris, and the other plaintiffs, which are companies associated with Norman and Myrna Harris and their family, between them own a number of farming properties in the Moree area. These properties are known as Moomin, Moomin Plains South, Hemmingford, Wathernoo North, Woodvale, and Krui. 2 Prior to 8 October 1999, the second defendant Colly Farms Limited (which I will call Colly) was the lessee from some of the plaintiffs of about 70 per cent of the total of the properties other than Krui, which I will call the Moomin properties, and about 50 per cent of Krui, under a lease for two years commencing 1 July 1999. The use permitted under the lease was the raising of irrigated and dryland cotton crops. 3 Both the Moomin properties and Krui are supplied with water from the Copeton Dam via Moomin Creek, by means of a joint water supply scheme under the Water Act 1912. There was in force in respect of the Moomin properties an authority No 90SA001270 (which I will call the Moomin Authority), with a water allocation for each "water year" (1 October to 30 September) of 19,440 megalitres for irrigation and 32 megalitres for stock and domestic, and in respect of Krui an authority No 90SA001419 (which I will call the Krui Authority), with a water allocation for each year of 15,552 megalitres for irrigation and 128 megalitres for stock and domestic. 4 Under the lease, Colly had the use and benefit, during the continuance of the lease, of these authorities, to the extent of 18,648 megalitres of the irrigation allocation under the Moomin authority and the full 15,552 megalitres of the irrigation allocation under the Krui authority, subject to reservation by the lessors of the first 200 megalitres under the Moomin authority. 5 The lease provided for an annual rental of $3 million, $1.5 million payable on 1 July and $1.5 million payable on 30 May. Colly paid $1.5 million on 1 July 1999. The lease contained a provision that, in the event that a named person ceased to be employed by Colly, the lessor could terminate the lease with one month's notice. The named person did cease to be employed by Colly, and on 9 September 1999 the lessor gave one month's notice of termination. It is common ground that the lease terminated on 8 October 1999, and that Colly vacated the leased properties on 8 October 1999. No part of the $1.5 million paid on 1 July 1999 has been refunded. 6 As at 22 September 1999, the available water allocations under the authorities were 15,621 megalitres under the Moomin authority and 5,724 megalitres under the Krui authority. On 22 September 1999, Colly applied to the relevant statutory body, the Water Administration Ministerial Corporation (known as the Ministerial Corporation), for approval to transfer these allocations to other authorities held by Colly. On 27 September 1999, the Ministerial Corporation indicated that it would approve this transfer. 7 These proceedings were commenced on 28 September 1999, and an ex parte injunction was granted on that day against the Ministerial Corporation granting approval to that transfer. That injunction was subsequently extended to the hearing. 8 In their statement of claim, the plaintiffs seek final orders preventing the transfer of the water allocation. By its further amended cross-claim, Colly seeks a number of remedies: compensation or damages in the event that it cannot transfer the water allocation; restitution of certain additional rent paid for the year 1 July 1998 to 30 June 1999; restitution of some or all of the $1.5 million rent paid on 1 July 1999; and relief under the Agricultural Tenancies Act. 9 I have now heard all issues in the case, except for issues arising under the Agricultural Tenancies Act, and quantification of any compensation on the basis of unjust enrichment.