Mr C & Mrs R. Miller did not appear and were not represented.

For the Respondent: Mr Sherman of Russell Kennedy Solicitors

1. Tenby Point is a small promontory on the south-eastern side of Westernport Bay. To the east and south-east are the townships of Corinella and Coronet Bay. To the north-west is Grantville. All of these townships are part of the area serviced by the Westernport Region Water Authority (trading as Westernport Water). In February 1991 as part of a policy to extend reticulated sewerage to various townships, the Authority adopted a set of principles set out in a report prepared by now deceased Senior Officer, Mr Bartlett. This report suggested adoption of a "flat rate charge of $1,640 per lot" by way of capital contribution to all users of the system. This charge was to apply to all residential allotments up to 1300sq m in area. The report observed:

"The cost of constructing sewers has reasonably direct relationship to the land area being served by those sewers, whereas the cost of rising mains, pump station and treatment facilities bears a reasonably direct relationship to the volume of sewerage generated."

2. The Authority recently determined to promote a scheme to sewer some 128 residential properties at Tenby Point. In accordance with the principles adopted in 1991 it elected to levy a $2,000 base or standard contribution "in respect of an average household or low usage commercial property with an area up to 1300sq m". For allotments over that area, an additional $1 capital contribution was determined to be levied for every additional square metre over and above 1300. Contributions were "capped" at a maximum of $4,700 per allotment.

3. The scheme was estimated to cost some $489,000, though detailed planning and costings have not been carried out. The northern point of the scheme area is near the Cliffs at the Westernport Bay coastline. This is not only the north point but also the high point in the scheme area whose low point is to be found at the southern end adjacent to Guy Road where the pumping station is to be located. This station is close to an existing 200mm rising main constructed as part of the sewerage reticulation system for Grantville. Effluent will be conveyed via this main to the King Road Waste Water Treatment Plant. The scheme will involve approximately 3,000 lineal metres of 150mm diameter sewer pipe. At its high point the system is approximately 16m above sea level and at its low point approximately 11m above sea level, leaving a drop of some 5m through the system. The scheme is relatively inexpensive because of the gently sloping terrain and the fact that the waste water treatment plant and the rising main already exist as part of a Grantville reticulation scheme.

4. Mr and Mrs Coffey were the owners of a large allotment at the northern end of the Scheme. They were levied the scheme's maximum contribution, namely $4,700. Mr and Mrs Coffey joined in this proceeding seeking a review of the scheme and the contribution which was sought from them. At the commencement of the hearing Mr Sherman who appeared on behalf of the Authority, announced that the scheme had been amended so as to exclude Mr and Mrs Coffey. This was done he said, because their property was subject to a Rural Zoning and was not part of the residential subdivision; therefore they did not have any immediate ability to turn their land to better account by way of residential subdivision. They might in the future by way of separate arrangement, join in the scheme, meanwhile they were excluded from it. I granted leave to Mr and Mrs Coffee to withdraw their applications for review.

5. The contribution which might otherwise have been made by Mr and Mrs Coffey is to be met from the Authority's own resources. Accordingly, no additional contribution will be sought from the 127 properties which remain within the scope of the scheme. The total contributions sought from the owners of those properties is in the sum of $293,912 representing approximately 60% of the total estimated cost of the scheme. Mr Ron Perrin, Mr and Mrs Miller and Mrs Coffey all sought review of the Authority's determination to adopt the scheme and require the contributions described. Mr and Mrs Coffey were given leave to withdraw their review applications in the circumstances already described. Mr and Mrs Miller are resident in Queensland and sent written notice that they were unable to attend in person. In the circumstances I must be guided as to their case by the written material already lodged by them with the Registrar.

6. Mr Perrin appeared in person and presented his case.

7. The Authority was represented by Mr Sherman of Messrs Russell Kennedy. He called evidence from Mr Munro, the Authority's Chief Engineer and its Senior Administrative Officer, Mr Chambers.

8. Section 268 empowers an "Authority" (it is common ground that the Westernport Region Water Authority is an authority for the purposes of the Water Act 1989)that intends to provide services which will benefit a property "by notice in writing, [to] require the owner of the property to meet or contribute to the present day cost of any works that are used or will be able to be used directly or indirectly for the provision of those services ...". Section 271 of the Water Act permits an owner to "object in writing" to any requirement under Section 268. The present applicants have made such objection unsuccessfully. Section 271(3) provides a right to owners to seek a review of an authority's decision on the owner's objection on any one of the following grounds:

"(a) In the case of a notice under Section 268, that the property of the owner will not benefit from the provision of the services;

(b) If there are several properties that will benefit, that the basis of distribution of the cost between the owners of those properties is unreasonable;

(d) If there are several properties that will benefit, that the owner who has been required to pay should not be required to do so, or that any owner who has not been required to pay should be required to do so;

(e) In the case of a notice under Section 269, that the use of the services has not increased, or will not increase as the case requires."

9. The last of these grounds for review is irrelevant.

10. Mr Perrin's house is one of eight residential allotments abutting the northern boundary of Guy Road at the southern extremity of the scheme. His and the other allotments on Guy Road have an area of 1,032sq m. Most of the allotments in the subdivision are slightly larger than the assumed basic allotment area of 1300sq m. He has a single house with one toilet which is now serviced by a septic tank. He submits that the apportionment of contribution to him is unfair in so far as he is required to pay the basic $2,000 capital contribution despite having an allotment smaller than the minimum allotment of 1300sq m by reference to which the contribution is calculated. He submits it would be more appropriate for each residential allotment to incur a fixed capital contribution of some $1500.

11. Mr Perrin says his property will derive no benefit from the scheme because his existing septic tank is working effectively. He referred to and relied upon a soil percolation test which indicated that the soil on his allotment was satisfactory for the proper operation of a septic tank. Mr Monro, the Authority's Engineer made no challenge to Mr Perrin's assertion in that regard.

12. Mr Perrin said that a far more appropriate setting of priorities for special works in the Tenby Point subdivision would entail sealing unsealed roads and providing effective drainage. If effective drainage were provided, the threat of overflow from septic tanks would according to Mr Perrin be deferred for 20 years or more and no sewerage works would be required. Mr Perrin said that the recent change of State Government might lead to a further allocation of State Government funds to minimise or eliminate the contribution required of owners. He said that pastoral and agricultural activity such as stock excrement and superphosphate run-off were a far greater environmental problem than septic tank overflow. He said he suspected that the drive to sewer rural townships in Victoria had as its true aim, rendering the regional authorities more attractive for privatisation. Finally Mr Perrin said the Authority ought to "come clean" as to the hardship provision it would make for pensioners. He suspected it would be "extortion" with the Authority borrowing at 6% per annum and charging land owners 12%.

13. The Millers reside in Queensland and own a "double block with only one house". They say they spent $4,000 recently to install a septic tank upon being advised that there were no plans to provide sewerage facilities in the area. They have been requested to provide a contribution in the sum of $4,064 which they say is excessive. They observed:

"The Authority has divided the total amount of the cost of the scheme by calculating the amount as per the size of the allotments and not according to the amount of work required for each property."

They also made adverse comparison between the charges to be made for caravan parks and motels who are high density users. Mr and Mrs Miller made detailed submissions as to how the cost of providing sewerage might vary not because of the size of the allotments but rather because of the site of the house or houses thereon.

14. The Millers claimed financial hardship and unemployment as did Mr Perrin who described himself as "on a basic pension".

15. The provisions to which I have referred show that this Tribunal is not at liberty to conduct a wide ranging review of the merits of the decision under review. The sole available grounds for review are those set out in Section 271(1)(a) - to (e). Nevertheless for the reasons given by Mr Lyons and me in Walter v Manningham City Council (1999/004171) with respect to analogous provisions under the Local Government Act 1989, within the limits of those grounds the Tribunal is obliged to conduct a full review and find what is the correct or preferable view with respect to each of these matters, not merely to decide whether a reasonable water authority could reach the conclusions that this Authority evidently did.

16. The Local Government Act 1989 and similar legislation in the other States provides for the levy of special rates upon ratepayers who derive a "special benefit" from designated works. It appears that this "special benefit" need be neither direct nor particularly significant. City of Parramatta v Pestell [1972] HCA 59; (1972) 128 CLR 305, 327; McDonald v City of Hawthorn (1993) 10 AATR 201; Bankstown Municipal Council v Fripp (1919) 26 CLR 398; Walter's case (supra) cf. Nunn v Shire of Woorayl (1993) 10 AATR 108. According to these authorities the benefit must be "special" only to the extent that it is "not shared by other lands". Mr Sherman submitted that "benefit" appearing in Section 268(1) and Section 271(1)(a) of the Water Act should be given a similar construction. I accept that submission. The structure and purport of the provisions in the Local Government Act are clearly similar to those of the Water Act. There is every reason to conclude that the two are alike covered by the principles adopted by the High Court of Australia in Pestell's case and Fripp's case. The absence of the word "special" found in the Local Government Act from the Water Act might lead to the conclusion that the test laid down by the Water Act as to the circumstances in which an owner may be required to meet or contribute to the costs of works is less exacting than the test laid down in the Local Government Act.

17. It is clear in my view that the availability of reticulated sewerage is a benefit to any property for which it is provided. In Sullivan v Lower Murray Water (1997/69262) Mr Gould observed in relation to a sewerage reticulation scheme:

"Clearly each property will receive benefit in the form of a waste disposal system that removes, treats and disposes of all wastes generated on the property completely and safely. It must also be remembered that the "benefit" is to the site, not to the current owner of the property. Thus in the case of vacant land ... the land will benefit by the availability of reticulated sewerage whether or not the owner avails himself immediately of that benefit."

18. The High Court in Fripp's case made a point to the same effect with respect to vacant land. The land is enhanced by the "benefit" even if it is not to be immediately availed of. This benefit remains even if the land is at present served by an efficient septic tank system. The reticulated sewerage system removes the risks of overflow and the necessity for periodic emptying. Even if this "benefit" is a relatively small one, it is a benefit which is conferred on the land nevertheless. The benefit must be conferred, according to the Water Act, not upon the owner but upon the land. The cases show that a benefit remains a benefit even if a particular owner has no wish to be provided with it. Any suggestion that the scheme will not provide a benefit to these applicants must be rejected.

19. The objections pressed as to the mode of distribution of cost raise far more difficult issues. The 1991 report which formed the basis of the Authority's policy says "the cost of constructing sewers has a reasonably direct relationship to the land area being served by those sewers". Mr Sherman's submission is that the larger the frontage of the land, the longer the sewer main serving the land must be. This is at best a very approximate view of things. First, it pays no heed to the fact that a large part of the area of any allotment may derive from dimensions other than its frontage. Mr Sherman conceded that the application of a system based solely or principally on land area would deal unjustly with the owner of a "hammer head" block. There are no such blocks in the proposed scheme area. One could also envisage injustice to the owner of a large allotment on the edge of a scheme area where the sewer main only had to reach one boundary of the allotment leaving it to the owner privately to fund the connection to whatever discharge point was chosen on the land itself. I enquired of Mr Sherman whether he could refer me to any authority in which a court or tribunal had sanctioned a distribution of costs of sewerage works on the basis of site area. He gave me an approximate reference to a decision of the Planning Division of the Administrative Appeals Tribunal which I take to be 1993/09019 Salpietro v Orbost Water Board (Mr R.D. Barton, Deputy President and Mr D.B. Logan). In Salpietro's case the owner's caravan park which included a number of mobile homes and other units and a take-away shop was assessed as being the equivalent of 21.17 residential tenements and assessed for a contribution at $84,680. In contrast, residential allotments were assessed at $4,000 each or a total of $40,000 for the ten allotments. The Tribunal set aside the distribution of cost. In the course of its deliberations it considered evidence as to the mode of distribution adopted by a number of Victorian authorities. Speaking as at 1993 Messrs Barton and Logan stated that there were at least two bases of distribution adopted by Victorian authorities. The first was one based solely on area, the second was based on what they described as "an equivalent person basis". Finally, they referred to a contribution on the basis of the combined application of land area and "equivalent persons". I do not read the learned Tribunal members' decision as suggesting that these are the only bases for distribution, merely that those were the basies relevant for the consideration of the matter before them. Mr Sherman, who a consideration of previous decisions of this Tribunal and the Administration Appeals Tribunal will show is widely experienced in sewerage scheme matters, said that many Victorian authorities apply a distribution based simply upon a flat charge per household.

20. The learned Members noted that the level of sewerage flows depended upon the connected population. The Authority's policy document of 1991 observed that the lineal length of sewerage mains required was linked to the area of the tenement served. The mere connection of additional water closets to a sewerage system would not increase the flow through the system unless the population served increased. Canterbury Centre v Melbourne Water Corporation (1994) 13 AATR 89 (Mr Byard).

21. Mr Sherman conceded that there was "no science" in the modes of distribution adopted. What I have said already indicates that there is a "rough and ready" quality in the mode of distribution adopted by the Authority.

22. To succeed on this point the applicants have to show that the distribution proposed by the Authority is "unreasonable" (Section 271(1)(b)). In the context of the meaning of the word "reasonable" in a construction contract (coincidentally relative to a sewerage scheme) Lush J. remarked in Wegan Constructions Pty Ltd v Wodonga Sewerage Authority [1978] VicRp 6; (1977) 36 LGRA 147, 148:

"Reasonableness is not an abstract quality but one which is to be judged against the background of surrounding circumstances ...

I think, however, that the proper test is the test of objective assessment by an independent bystander."

His Honour's dictum was referred to and applied by Messrs Barton and Logan in Salpietro's case. The Shorter Oxford Dictionary gives the following meanings for unreasonable:

"1. Not having the faculty of reason; irrational 2. Not acting in accordance with reason or good sense; claiming or expecting more than is reasonable. 3. Not based on reason or good sense. 4. Going beyond what is reasonable or equitable; excessive."

It is difficult to see therefore that something is "unreasonable" because it fails to achieve absolute perfection in equity. To put it another way it must be possible for there to be a number of different modes of distribution approaching absolute equity and scientific perfection to varying degrees but nevertheless in no case descending to the level of being "unreasonable". As I understood Mr Perrin, he suggested either that his contribution should be cut below the minimum $2,000 because his block is smaller than most in the scheme or alternatively there should be a single flat $1500 contribution for all households. The very fact that Mr Perrin suggested two quite different modes of distribution in itself demonstrates that even according to his view there can be a number of modes of distribution which are not "unreasonable" rather than merely one perfect mode with all other distributions being "unreasonable".

23. The 1991 policy document relied upon by the Authority demonstrates that it was mindful of two considerations:

(a) That larger blocks increase the cost of the provision of sewerage mains; and

(b) That the number of households connected increases the volume of effluent which those sewers must deal with.

What I have said already indicates that the mode by which these two elements were reflected in the distribution of the charges does not achieve scientific perfection. Nevertheless it cannot be said to be "unreasonable" either in accordance with the dictionary meaning of that adjective or in contradistinction to the formulation of "reasonable" made by Lush J. in the Wegan Construction's case.

24. Mr Perrin observed that some landowners were achieving a diminution in the contribution they would otherwise have to make by consolidating a number of blocks. My attention was drawn to one family who consolidated three blocks into one. The implication of Mr Perrin's submission is that the Authority's distribution scheme is so open to manipulation by this relatively easy step that it is unreasonable on that ground. Whilst I received no direct evidence on the point, even a judge in court would be entitled to take notice of the fact that consolidations require payment of fees to the local council and to the Office of Titles and require the preparation of plans by a surveyor. Mr Chambers said that when a block of land is subdivided or re-subdivided the Authority would seek to levy a "headworks" charge of $2,500 for each new allotment created. On the other hand, whilst allotments remain consolidated, the owner would receive a benefit in the levy of water and sewerage rates and local council rates. It is unnecessary for me to purport to make any finding as to the relative virtues of consolidating or not consolidating. What I have said already indicates that the possibility of consolidation does not create a "loophole" so large and easy as to make a mockery of the mode of distribution of costs proposed or to put it another way, render it unreasonable. One must also consider the fact that only a minority of land owners have multiple allotments which could be consolidated.

25. It follows from what I have already said that in so far as the Millers submit that the mode of distribution is unreasonable for them as the owners of two allotments, that submission is unsustainable. The effect of the scheme will be to provide them with two sewered allotments. The cost of the scheme is increased in so far as the main must be longer to service those two allotments. Whilst their land remains subdivided, the possibility exists without the exercise of any planning discretion, for a second household to be established upon their land which would generate additional flow through the reticulation system. Each of the Millers' allotments can be said to receive a "benefit". Since this scheme involves only the construction of sewer mains leaving landowners to pay for their own connexions, issues relative to the siting of houses on allotments are irrelevant.

26. The Millers also made criticism of the principles adopted by the Authority for distributing costs to non-residential owners. In the event such non-residential owners exist in other areas for which the Authority is promoting other schemes. There are it seems no non-residential or commercial owners in this scheme and so it is unnecessary for me to consider the merits or otherwise of the principles which the Authority has adopted for distributing costs to such persons.

27. The 1991 policy document suggested a basic charge for residential allotments of $1,640. The Authority in its correspondence and Mr Sherman in his submissions asserted that $2,000 represented an indexation by reference to the Consumer Price Index of that $1640 figure. I was provided with no particulars to support this assertion and it seems a little difficult to credit. $2,000 has all the appearances of a "round" figure. Moreover, the 1990s have been, at least in comparison to the 1970s and 1980s a time of relatively stable prices. Accordingly I regard the assertion of "indexation" as unproven. More pertinently whilst the figure of $1,640 is referred to in the 1991 policy document there is no calculation or statement which would justify that as a proper figure rather than one slightly higher or lower or substantially higher or lower. The 1991 policy assumes that levies at the $1,640 base rate with the adjustments for larger blocks would yield 42% of the actual cost. As previously noted the levies proposed here would yield approximately 60% of the cost of the scheme. This in itself would not seem to be an objection in so far as Section 268 of the Water Act appears to contemplate that and Authority may require a 100% contribution from relevant landowners to the cost of works. Mr Sherman submitted rightly as it seems to me, that if one regarded the 42% contribution suggested in the 1991 policy document as being reasonable or non-excessive, the 60% contribution sought here could likewise be so regarded. Given that this scheme will "plug in" to an existing rising main and an existing waste water treatment plant, the landowners are receiving an offsetting advantage constituted by their ability to rely on infrastructure funded by others. Mr Sherman submitted that the basis charge and the additional per square metre levies were not excessive and were indeed modest relative to a number of other schemes. He referred to a decision of the Administrative Appeals Tribunal in St Arnaud District Fuel v The Town of St Arnaud (1991/18659) where the basic charge was $4,000 for a standard lot and Sullivan and the Lower Region Authority (1997/69262) where a charge of $7,000 per lot was reduced to $5,200. In Salpietro's case the basic contribution was $4,000. Whether one considers the absolute figures or the percentage of the contribution viz 60%, in light of the contribution of existing infrastructure to the scheme, it cannot be said that the contribution sought is "excessive".

28. The Tribunal has no power to enquire into or make findings as to issues such as the proper allocation of priority between sewerage schemes and drainage schemes and road building schemes for Tenby Point nor as I conceive it do I have any power to make any finding based upon the possibility suggested by Mr Perrin that the new State Government will make additional funds available to water authorities so as to ease the burden on individual landowners. Even were I empowered (as to which I doubt) to make findings as to whether the drive to sewer rural Victoria is part of a move towards privatisation, I do not believe that there is sufficient evidence to sustain such allegation. It has not risen above a mere assertion of suspicion by Mr Perrin. Finally the Tribunal has no power to review or otherwise deal separately with "hardship" issues for pensioners or otherwise once the review grounds in Section 271 of the Water Act have been dealt with.