Plaintiff v Defendant

MINING - Mining licences - Licence conditions - Work Plan - Mine rehabilitation - Batter stability - Mineral Resources (Sustainable Development) Act 1990 (Vic).

EQUITABLE RELIEF - Declarations - Injunctions - Flooding - Damage to property - Risk to persons - Relief would be refused.

1 This proceeding concerns a large drain ('the MMD')[1] to the north of the pit of the Hazelwood Coal Mine ('the mine') and to the south of the Princes Freeway near Morwell in the Latrobe Valley. The mine is a large open cut coal mine about 120 metres deep constructed by the former State Electricity Commission of Victoria ('SECV') in 1949. The coal seam is about 100 metres thick. The mine is located within the municipal district of the Latrobe City Council ('Latrobe').

2 Hazelwood Power Partnership ('HPP'), the owner of the mine, contends that the part of the MMD (which it termed the 'public section' of the MMD) through which drainage water from the southern part of the township of Morwell and the nearby Morwell Industrial Estate ('MIE') passes is a public drain under s 198(1)(a) of the Local Government Act 1989 (Vic) ('LGA 1989') and the predecessors of that provision. As a result, HPP claims that the public section of the MMD vested in Latrobe no later than September 1996 and is, or should be, under the management and control of Latrobe. Accordingly, HPP argues that the MMD should have been maintained by Latrobe at Latrobe's expense since no later than September 1996.

3 HPP's claim as amended at the commencement of the trial identifies three time periods in which the vesting of the public section of the MMD is said to have occurred.[2] It claims that the public section of the MMD vested in Latrobe (or its predecessor, the Shire of Morwell):[3]

(1) no later than 1975, at or following the partial relocation and significant redevelopment of the MMD;

(2) no later than 1985, when the Morwell Bypass of the Princes Freeway ('Morwell Bypass') was completed and the Road Construction Authority ('RCA') and SECV carried out further works on the MMD; or

(3) no later than September 1996, when the mine and the land on which it is located ('the HPP land')[4] were privatised and acquired by HPP.[5]

4 Alternatively, if the public section of the MMD is not vested in Latrobe, HPP says that Latrobe has no right to discharge public drainage water from the township of Morwell or from the MIE into the MMD. HPP claims the right to undertake works on the HPP land to prevent public drainage water from flowing into the MMD.

5 HPP seeks various declarations from the Court in recognition of its claimed rights. It seeks an injunction restraining Latrobe from discharging public drainage water into the public section of the MMD.

6 Latrobe denies these claims and says that the whole of the MMD is and always has been a private drain under the management and control of the mine owner. It says that under s 16 of the Water Act 1989 (Vic) ('Water Act'), HPP is obliged to receive reasonable flows of water from other land, including public drainage water from the council drains servicing the southern part of the township of Morwell and the MIE.

7 Both HPP and Latrobe rely on expert and lay evidence. There is substantial agreement as to most facts. The parties expedited the proof of facts by an extensive Agreed Statement of Facts.[6] The agreed facts are of considerable assistance to the Court.[7] The parties also have agreed on the admission into evidence of a large number of documents including records of the former SECV. All documents tendered have been reviewed and taken into account. At the trial, each party cross-examined some witnesses called by the opposing party.

8 The Court conducted a site visit to the mine on Tuesday 7 July 2015, inspecting the MMD and surrounding area, accompanied by the legal representatives for both parties. The inspection assisted the Court to understand the evidence. The Court has not drawn any inferences from what it observed or noticed during the inspection.[8]

9 Section 198 of the LGA 1989 states:

(1) The following are vested in the Council and are under the management and control of the Council -

(a) public sewers and drains within the municipal district;

(b) sewers and drains in and under roads in the municipal district;

(c) Works and materials relating to (a) and (b).

(2) This section does not apply to any sewers and drains vested in another Council or a Minister, the Crown or any public body.

10 Section 3(1) of the LGA 1989 states:

public body means any government department or municipal council or body established for a public purpose by an Act of the Parliament of Victoria, any other State or Territory of the Commonwealth, or the Commonwealth.

11 The effect of s 198(1) is to vest in a municipal council ownership of public drains as well as drains in and under roads within the municipal district, including works and materials.[9] It is not suggested that the MMD is a sewer, or that the references to sewers in s 198 have any application in the present case. Section 198 is in Part 9 of LGA 1989 entitled 'Specific functions, powers and restrictions'. Division 1 is headed 'General provisions'. While ss 199 and 200 also deal with the subject of drainage, little assistance is to be gained in the construction of s 198 from either the context or the definitions in LGA 1989 apart from that of 'public body'.

12 There is no doubt that in construing s 198, the phrase 'public drains' must include drains within a municipal district that would, but for the operation of the section, be privately owned. It is important to resolve how it is to be decided whether a drain on private land is a public drain. Both parties agreed that the construction of s 198 is at the heart of the case.

13 The provision that immediately preceded s 198 was s 642 of the Local Government Act 1958 (Vic) ('LGA 1958'). This states:

(1) All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, shall vest in and belong to the municipality, and the council shall have the management and control of the same.

(2) Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.

(3) This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works or in the Geelong Waterworks and Sewerage Trust.

14 Although the statutory predecessors of s 198 go back well over a century,[10] and despite the researches of counsel, no decision of an Australian court giving definition to the expression 'public drains' has been found.[11] A number of authorities concerning the equivalent provision in New Zealand have been located.[12]

15 HPP alleges that when it purchased the mine in September 1996, the MMD was a public drain. By the operation of s 198(1), it was vested and under the management and control of Latrobe. It says that the drainage function that the MMD performs is the continuation or extension of the public drainage of the township of Morwell. Because the MMD was connected to the public drainage system in September 1996, it became a public drain. While the MMD also had the function of draining water from a catchment including parts of the HPP land, it says that this did not detract from its public nature. HPP no longer requires the MMD for its purposes, and would divert the water from its land through an alternative route to the settlement ponds if it meant that it could decommission the MMD.

16 HPP submits that the fundamental characteristic that makes a drain a public drain is that it performs a public drainage function. A drain has a public drainage function if it carries water collected from a number of privately owned properties or from public areas.[13] The practical effect of HPP's submission is that any drain that collects water from a number of private properties or from public areas is vested in the municipal council.

(1) this construction of the phrase 'public sewers and drains' is consistent with the statutory context of s 198. The functions and powers of a council are stated in general terms in ss 3E and 3F of the LGA 1989. The functions and powers conferred on councils within its municipal district by LGA 1989 and corresponding previous enactments have for many years included the provision of drainage;[14]

(2) the vesting of ownership, management and control of drains into which water collects from a number of privately owned properties and public areas facilitates the performance by councils of their local government function; and

(3) for a drain to be counted within the category of 'public sewers and drains' within the meaning of s 198(1)(a), it is sufficient if the drain is a drain into which other public drains (which collect water from a number of private properties or public areas) are connected, either directly or indirectly.

18 HPP submits that there may also be drains which do not perform a public drainage function, but which because of other characteristics and circumstances may be public drains. This would include some but not all drains connected upstream of a public drain.

19 HPP alternatively contends that if the MMD is not a public drain, then the flow of public water into the MMD is unreasonable because it casts a burden on HPP. If HPP did not attend to the maintenance of the drain, it would have serious consequences. Water could seep from the drain, and cause movement. HPP claims an injunction restraining Latrobe from causing a nuisance, or committing a trespass. It says that Latrobe has the right to acquire the right to drain over HPP's land, but has not done so because it wants to retain the benefit of the MMD, but not accept the burden.

20 HPP says that the original purpose of a drain on private land will almost inevitably be for something which benefits the private owner who constructed it. However, a private drain becomes a public drain if it carries water from the public system.

21 HPP's contention is that if any public water goes into a private drain the drain becomes a public drain. Section 198 is triggered, and the private landowner loses property in the drain. According to HPP, at this point the drain and all of the works and materials that constitute the drain pass to the council and cease to be the property of the landowner. In the case of HPP, the drain would also cease to be part of its mining tenement. There would be a strip of land across the mining property vested in, and under the management and control, of Latrobe.

22 In response to an observation by the court that this would mean that private landowners would need to be on the lookout to make sure that no public water goes down their drains lest they lose them, Senior Counsel for HPP responded that there may be situations where something more formal is needed than simply water from a public drain. However, Senior Counsel submitted that in the present situation where there was a deliberate decision by SECV to accept public drainage on the basis that there would be an uncontrolled flow of water from the public drainage system formally connected to the MMD, the consequence is that the MMD became a public drain vested in the council. SECV's decision to accept public water was essentially made out of benevolence. It could have rejected the connection of council drains into the MMD, but did not do so.

23 If correct, HPP's submission has paradoxical, if not perverse, results. Acting out of benevolence, SECV accepts public drainage water from the township of Morwell into the MMD. According to HPP, the legal consequence of this benevolence is that the MMD becomes vested in Latrobe albeit at a later time. It is very strange that by accepting public drainage, much of the MMD is lost to the landowner and ultimately vests in the council. Senior Council for HPP submitted that contractual terms between a private landowner and a council might be capable of preventing the operation of s 198 where the parties agreed that the private landowner would receive and treat the water for a council. It would be a necessary element of such a private arrangement that the private landowner would have an express right to terminate the acceptance of the water.

24 In response to Latrobe's submissions as to the considerations that should be taken into account in determining whether a drain was a public drain, HPP submitted in substance:

(1) upon its construction of s 198, responsibility for the construction of the drain, including design and funding, is irrelevant as this does not preclude the drain from having a public drainage function;

(2) the regulatory framework applying to the use of the land is not a qualification on the operation of s 198(1);

(3) the ownership of the land on which the drain is located is not relevant as it would mean the section does not operate when the drain is on private land;

(4) the identity of the person with control over the drain itself, the land in which the drain is situated, the land in the vicinity of the drain, and the maintenance of the drain are all considerations inconsistent with s 198 because the provision applies to land which is privately owned, and drains that are constructed at the cost of the private individual, and but for the operation of s 198 are not owned, managed or controlled by the council;

(5) s 198 was not qualified by any condition relating to the efficacy of control or management by a municipal council;

(6) there is no such thing as a private drain downstream of a public water system; and

(7) a very minor or unconscious acceptance of public water by a private drain owner for a short period might not be enough to make the drain 'a public drain', as there is no deliberate decision by the private landowner to accept the water. The same result might ensue if the public water is insignificant in volume.

25 Finally, HPP submitted that the fact that the MMD drains water from the land on which it is situated as well as the public drainage system does not alter its character as a public drain. It was open to the court to decide that the public function of a drain had to be significant for it to be treated as a public drain. The MMD certainly satisfied that criterion.

26 Latrobe submits that in the absence of a statutory definition, the meaning of the phrase 'public drain' is to be derived from its common meaning and its legislative context. A meaning which gives effect to the purpose of the legislation is to be preferred.

It is the intention of the Parliament that the provisions of this Act be interpreted so as to give effect to the Preamble and the local government charter.

Latrobe further relies on s 1(1) of LGA 1989, which sets out the Preamble:

Section 74A(1) of the Constitution Act 1975 provides that local government is a distinct and essential tier of government consisting of democratically elected Councils having the functions and powers that the Parliament considers are necessary to ensure the peace, order and good government of each municipal district.

28 The local government charter is set out in Part 1A of LGA 1989. Section 3A provides:

The purpose of local government is to provide a system under which Councils perform the functions and exercise the powers conferred by or under this Act and any other Act for the peace, order and good government of their municipal districts.

29 In Taylor v Corporation of Oldham,[15] Jessel MR observed as to a provision that 'all existing and future public sewers and drains within the borough, and all existing and future sewers and drains' ... are to 'vest in and belong to the corporation':

Now, that is a very useful provision. It was found under the old law, and it was sometimes held, that the sewer authorities [...] had only an easement, and it was found to be very inconvenient, and consequently in the modern Acts the property in the sewers has been vested in the sewer authorities. That is to say, that instead of allowing the subsoil to remain in the owner of the soil, subject to an easement or right of sewerage or drainage, the absolute property in the sewer (which means not merely the brick barrel, or whatever it may be, forming the sewer, but the whole interior of the sewer, that is, the whole of the space occupied by it) is now vested in the sewer authorities. And if the sewer is a large one, it amounts, in substance, for all useful purposes, to the whole of the subsoil, and that is absolutely vested in the corporation.[16]

30 Latrobe submits that this passage identifies the fundamental purpose underlying s 198(1) and its predecessors. Sewerage and drainage authorities require the vesting of the sewers and drains under their administration to conveniently carry out their functions. If there is merely an easement or right of sewerage or drainage, then property in the sewer or drain remains with the land owner. Provision of sewerage or drainage systems would be very difficult if authorities had to deal with large numbers of landowners each with individual property rights over sewers and drains. Innumerable landowners might be involved in a single large sewerage or drainage scheme. Latrobe submits that the phrase 'public drain' as it pertains to those drains which vest in a council, needs to be understood in the context of municipal governance. It says that s 198(1) exists for the purpose described in Taylor v Oldham. The provision gives municipal councils absolute control and management over assets, but only those which can be properly considered to fall within a municipal council's purview. Moreover, as s 198(2) makes clear, not all public drains vest in municipal councils. The existence of s 198(2) reinforces the notion that it is not public drains per se which vest in councils, but only those drains which are properly considered to be within a council's municipal domain. Similar exclusions existed in the LGA 1958.

31 Latrobe submits that a drain is not a public drain, for the purpose of the vesting provision, simply because the drain carries public drainage water. The carriage of public drainage water may well be a necessary prerequisite to a finding that a drain is a public drain, but it is not determinative of the question. The passage of public water through a drain alone does not sufficiently inform the inquiry.

32 Latrobe submits that the phrase 'public drain' must be read in its legislative context having regard to the characteristics of the drain, its purpose, function and the circumstances which make it amenable to the management and control of a municipal council to the exclusion of all others.

33 Latrobe points to previous legislation which is directed to the same objective - the vesting in municipal authorities of drains over which such authorities should have power and control. Past legislation has drawn clear distinctions between drains which properly vest in local councils and drains which ought not. For example, the Public Health Act 1875 (Imp)[17] drew distinctions between drains 'made by any person for his own profit, or by any company for the profit of the shareholders'; [18] those directed at irrigation, or constructed pursuant to legislation; those 'under the authority of [...] commissioners of sewers',[19] and said that the remainder, existing or future, were to vest in the local authority.[20] In Sykes v Sowerby Urban District Council,[21] a drain used to prevent surface water coming down a road into a quarry, and to carry off the water to a drain on the far side of the quarry, was held to be a private drain. There was 'evidence that from time to time the site of this drain was moved'.[22] All members of the Court of Appeal held that because the drain was made by the quarry owner for the purpose of working the quarry more profitably, it came within the exception and did not vest in the local authority.[23]

34 Latrobe submits that the approach taken by English courts under public health legislation highlights that there are drains which convey public water but are nonetheless not appropriately vested in local authorities. It is necessary to consider whether there are matters that militate against the conclusion that a drain is not appropriately vested in a municipal council, notwithstanding that the drain conveys public drainage water.

35 In addition to the flow of public water through the drain, Latrobe says that it is necessary to consider:

(1) the purpose of the drain and the historical reason for the construction of the drain;

(2) who had the responsibility for construction of the drain, including design and funding;

(3) the regulatory framework which applies to the use of the land, in particular, as it relates to drainage management;

(4) the ownership of the land on which the drain is located;

(5) the identity of the person with control over;

(ii) the land on which the drain is situated;

(iii) the land in the vicinity of the drain as it relates to and affects the ability of the drain to perform as a drain;

(iv) the management of the drain and the land in the vicinity of the drain (including such things as the maintenance of the drain and its surrounds, land use activities in the vicinity of the drain which relate to the ability of the drain to perform as a drain); and

(6) the efficacy of the drain in question being subject to the absolute control and management of a municipal council.

36 Latrobe submits that the decided cases in New Zealand courts[24] which consider the expression 'public drain' or a like expression support the contention that:

(1) a determination as to the status of a drain as a public drain may involve a consideration of many factors bearing upon the question of characterisation of the drain as public;

(2) the factors identified in the decided cases that are relevant to the question of whether a drain is a public drain are not to be treated as an exhaustive list of factors, or framed as a test;

(3) no one factor taken in isolation is necessarily determinative;

(4) the weight to be given to any particular factor depends upon the circumstances, and is ultimately a question of fact and degree; and

(5) whether or not a drain is properly regarded as a public drain may be the result of a combination of factors, and their interrelationship arising from the facts and circumstances in which the drain was constructed, managed and controlled.

37 Latrobe says that having regard to all of the relevant facts and circumstances, the MMD has never been under Latrobe's management or control (or that of the Shire of Morwell) in any sense contemplated by s 198(1), nor should it have been. The drain has been, and continues to be, part of a working mine, which is itself completely inconsistent with the notion that it ought be vested in a municipal authority because it conveys public drainage water.

38 The significance of the statutory text in construction was emphasised in Commissioner of Taxation v Consolidated Media Holdings Limited:[25]

[As was said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue] "This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text". So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.[26]

39 Important principles of statutory construction were stated in Project Blue Sky Inc v Australian Broadcasting Authority:[27]

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".[28]

40 The legal difficulties in determining property rights in pipelines in the absence of statutory definition are discussed in authority.[29] As was said by Osborn J in Alinta DEGP Pty Ltd v Wellington and East Gippsland Shire Councils,[30] in relation to gas pipelines:

Nevertheless, it can be seen that the questions of whether, and in what sense, underground gas pipelines are to be regarded as the subject of an interest in land, are of sufficient potential difficulty to make it entirely understandable that Parliament may wish to place the matter beyond doubt with respect to a particular class of pipeline by a provision such as s 140 [of the Gas Industry Act 2001 (Vic)].[31]

41 The same may be said of s 198 and its predecessors which put the ownership of public drains within municipal districts beyond doubt by vesting them in municipal councils and giving their management and control to municipal councils.

42 Nonetheless, caution should be exercised lest too wide a scope be given to a statutory provision that divests property rights from landowners without payment of compensation and vests them in authorities. Sewers and drains vested in authorities are encumbrances on land, and affect the building and development rights of the landowner. The existence of a public sewer or drain within a property can have a major impact on permissible development. There may be ongoing inconvenience to the landowner as the authority can enter the land at any time to maintain or replace the sewer or drain.

43 Section 198(1) is a direct interference with private property rights. While compensation is available upon the compulsory acquisition of land by a municipal council,[32] no compensation is payable upon the vesting of property rights in municipal councils under s 198(1).

44 In R & R Fazzolari Pty Ltd v Parramatta City Council,[33] French CJ said as to the construction of statutes which interfere with property rights:

Private property rights, although subject to compulsory acquisition by statute, have long been hedged about by the common law with protections. These protections are not absolute but take the form of interpretive approaches where statutes are said to affect such rights.

Blackstone said that the common law would not authorise the "least violation" of private property notwithstanding the public benefit that might follow. He accepted however that the legislature could compel acquisition and in so doing wrote:

"All that the legislature does is to oblige the owner to alienate his possessions for a reasonable price; and even this is an exertion of power, which the legislature indulges with caution, and which nothing but the legislature can perform."

It was and has remained the case in England and Australia that compulsory acquisition and compensation for such acquisition is entirely the creation of statute.

The attribution by Blackstone, of caution to the legislature in exercising its power over private property, is reflected in what has been called a presumption, in the interpretation of statutes, against an intention to interfere with vested property rights. It was expressed by Griffith CJ in Clissold v Perry, a land resumption case, thus:

"In considering this matter it is necessary to bear in mind that it is a general rule to be followed in the construction of Statutes such as that with which we are now dealing, that they are not to be construed as interfering with vested interests unless that intention is manifest."

The presumption has been restated on more than one occasion in this Court. That does not, of course, authorise the court to put to one side "the unambiguous effect of the words which the Parliament has seen fit to use".

The terminology of "presumption" is linked to that of "legislative intention". As a practical matter it means that, where a statute is capable of more than one construction, that construction will be chosen which interferes least with private property rights. That approach resembles and may even be seen as an aspect of the general principle that statutes are construed, where constructional choices are open, so that they do not encroach upon fundamental rights and freedoms at common law. It operates in the United Kingdom as a manifestation of a "principle of legality" and has been described in Australia as an aspect of the rule of law.

In its application to property rights this long-standing interpretive principle is consistent with international developments in the recognition of human rights since World War II. Although not specifically protected by the International Covenant on Civil and Political Rights, or the International Covenant on Economic, Social and Cultural Rights, the right to property was recognised in the Universal Declaration of Human Rights and in various other international instruments...[34]

45 The principles of construction referred to in Fazzolari are of long standing. In Commissioner of Main Roads v North Shore Gas Co Ltd,[35] the majority accepted that the exercise of a right to lay pipes in another's land confers a right to occupy part of the land in only a very limited and special way.[36] The majority adopted the analysis of the issue by Evershed J, as he then was, in Newcastle-under-Lyme Corporation v Wolstanton Ltd:[37]

In these circumstances and bearing in mind the general rule that no greater rights or interests should be treated as conferred on the undertakers than are necessary for the fulfilment of the object of the statute, it seems to me reasonably clear as a matter of the construction of s. 6 of the Act of 1847, that the terms of the section are not intended to confer and are not apt to confer on the undertakers any right of ownership or proprietorship of the land affected.[38]

46 In Sydney Municipal Council v Young,[39] the Privy Council said of a provision vesting all public ways in a council:

Now it has been settled by repeated authorities, [...], that the vesting of a street or public way vests no property in the municipal authority beyond the surface of the street, and such portion as may be absolutely necessarily incidental to the repairing and proper management of the street, but that it does not vest the soil or the land in them as the owners. [40]

47 The adjective 'public' is in frequent use in legislation as well as in ordinary parlance. Courts have commonly been required to give meaning to the word in a variety of contexts. In O'Sullivan v Farrer,[41] the High Court considered the meaning of the word 'public' when used in the expression 'public interest' extended to 'undefined factual matters'[42] so wide as to confer a discretionary power. The Court said:

Indeed, the expression "in the public interest", when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only "in so far as the subject matter and the scope and purpose of the statutory enactments may enable ... given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view "...[43]

48 The seminal case is the decision of the House of Lords in Girls' Public Day School Trust Ltd v Ereaut.[44] In a speech often quoted in later authority, Lord Macmillan said:

The adjective "public" is so elusive in meaning that the authors of the New English Dictionary preface their attempt at definition by the warning that "the varieties of sense are numerous and pass into each other by many intermediate shades of meaning. The exact meaning often depends upon the substantive qualified and in some expressions more than one sense is vaguely present; in others the usage is traditional and it is difficult to determine in what sense precisely the thing in question was originally called 'public'."[45]

49 Lord Macmillan explains how a decision is to be made whether a school is a 'public school':

In short all the features of the school must be considered and there is no individual feature the presence or absence of which taken by itself can be said in law to be conclusive of its character as public or private. If the features which are indicative of the school being a public institution predominate then it may fairly be said to be a public school. It is thus a question of degree in every case ...[46]

50 This approach recognises that there is no single test that defines a public school. All relevant features must be weighed in the balance, and a decision made as to which predominate.

The words "public school," as has been said before, are not words of art: they are to be given their ordinary meaning in what context they may be found.[47]

52 In The Little Company of Mary (South Australia) Incorporated v the Commonwealth,[48] the High Court followed Ereaut. Latham CJ said:

The adjective "public" is used in many collocations, and the meaning varies with the noun with which it is used. In "public park" and "public house" it is not difficult to state the meaning. The distinction between a park to which the public has access and the grounds of a private house is clear enough. So also a public house is readily distinguished from a private house. The meaning is not so clear in the case of phrases such a "public school," "public institution," "public hospital."[49]

53 Latham CJ quoted a passage from O'Connell v Newcastle Municipal Council,[50] where Jordan CJ said:

Whether a particular institution is a public hospital is a question of fact to be determined upon a consideration of all the relevant facts of the particular case, no one fact being necessarily conclusive. [51]

It was held that the absence of any form of public contract and the non-public ownership of the hospital property did not compel the conclusion in that case that the institution was not a public hospital.[52]

55 In arriving at the same conclusion, Starke J said:

Lord Macmillan observed upon the elusiveness of the adjective "public" in Girls' Public School Trust Ltd v Ereaut.

...

The hospital was established by a private organisation; it is not subject to the control or supervision of any public authority; the public have no right of admission - no trust or other right has been created in their favour and the patients are charged for their maintenance and treatment unless too poor to pay therefor. Apart from authority, I should not have thought that such a hospital would, in the ordinary and usual use of words, be described as a "public hospital," but the question is one of fact to be resolved upon a consideration of all the circumstances.[53]

56 Rich J in dissent as to the result said to like effect on this aspect:

No definition of the latter expression is given in the Regulations and in relevant judicial decisions as to the meaning of the word "public" judges have refrained from attempting an exhaustive decision. It is neither necessary nor desirable to do so. In every case which arises for determination a number of factors have to be considered, and none is an absolute criterion. "Public hospital" is not a precise or technical expression.[54]

57 The meaning of the word 'public' was considered by Macfarlane J sitting as a member of the Full Court of this Court in Re Income Tax Acts (No 1),[55] where the issue was whether a benevolent asylum was a 'public benevolent institution':

A great many cases have been cited in argument, in which the meaning of the adjective "public" in connection with charities, schools and other institutions had to be considered. The stock or general dictionary meaning, "pertaining to the public," leaves the noun "public" to be defined, and also the method of "appertainment." It may appertain in the sense that it belongs to the public, or that it is supported by the public or managed by the public, or that it is open to the public or any member of the public, or carried on for the benefit of the public and not for private gain - I am not professing to be exhaustive. But some such characteristic it must have before it can be called "public." Its meaning in any particular context or section may depend on the antithesis intended.[56]

58 In Storey v North Sydney Municipal Council,[57] the High Court was concerned with the expression 'public park and any land dedicated or reserved from sale by the Crown for public health, recreation, enjoyment or other public purpose of the like nature' in local government legislation.[58] Walsh J referred to the observations of Lord Macmillan as to the elusive meaning of the adjective 'public'.[59] Walsh J adopted the observation of Latham CJ in The Little Company of Mary that the adjective was used in many collocations and varied with the noun with which it is used.[60]

59 More recently, Merkel J in Australian Hospital Care (Latrobe) Pty Ltd v Commissioner of Taxation[61] followed the approach adopted in Ereaut in determining whether a regional hospital was a public hospital for sales tax purposes, stating:

As was pointed out by the House of Lords in Girls' Public School Trust Limited, the notion of what constitutes a "public school" in England changes over time, and consequently it is unlikely that any one factor will be conclusive. Historically, public schools were basically those founded or maintained by the community, whether state or local. More recent examples of public schools included schools owned by a limited company, the constitution of which allowed the payment of a limited dividend to its preference shareholders. It was held not to be essential for the constitution of a public school that there be a total absence of any interest of any private person in the school or the absence of any profit in the contemplation of its founders or managers.

...

The question of whether a particular institution is a public hospital according to common understanding is a question of fact to be resolved upon a consideration of all the circumstances. The institutions with which each of the above cases was concerned were different from the institution under consideration in the present case. Thus, the cases on the meaning of the term "public hospital" in other statutory contexts, while of assistance, cannot be treated as authorities on what constitutes a public hospital. As Latham CJ stated in The Little Company of Mary (SA) Incorporated, insofar as O'Connell was relied upon to assist the plaintiff, "on a question of fact precedents are not of authority".[62]

60 In Ereaut's case, Lord Macmillan noted how the character of a school may change over time. Similarly, drainage arrangements, catchments and sub-catchments, the nature and extent of built up areas and resulting run-off, the workings of an operating mine and other factors also change over time. HPP itself recognises this by bringing a claim alternatively directed at three different dates.

61 The characteristics and circumstances which are sufficient to make a drain a public drain are considered in a series of cases in New Zealand.

62 While the New Zealand provision does contain a deeming provision for drains controlled by a council for twenty years or more, it does not attempt to define the expression 'public drain':

Without limiting the meaning of the term "public drain", it is hereby declared that every sewerage or stormwater drain in the district that has actually, and whether legally or not, been under the control of any council for not less than 20 years as a drain shall be deemed to be a public drain under this Part of this Act.[63]

63 This definition did not give much assistance to courts required to decide whether a drain was a 'public drain'. However, by providing that drains controlled by councils for twenty years or more were public drains, the definition gave emphasis to the control of the drain rather than to other characteristics. Clearly, public water can flow through a drain without the drain necessarily being under the control of the council.

64 The first of the New Zealand cases is Wellington and Manawatu Railway Company. The facts of that case involved public drains which were vested in the city corporation and which discharged into the sea. The railway company reclaimed adjoining land and continued the drains through the reclaimed land to the new sea boundary. A large strip of the reclaimed land under which the drain lay became vested in the railway company. The city corporation authorised the connection of a considerable number of additional house drains to the public drains, thereby increasing the volume of sewage passing through the drains constructed by the railway company. The disputed drain was downstream of the public drains which connected to and drained into it.

There is nothing in "The Municipal Corporations Act, 1876," which defines what a "public drain" is. This, however, is certain: that it does not follow, because a drain is laid through private lands, that therefore it is not a public drain: ... What the Corporation have, therefore, done is to treat this drain, as part of their system and in every way as a public drain, and to use it in a way which, if it were not a public drain, would be unlawful, and which could have been prevented by injunction by the company. The drain having thus been used as part of the Corporation drainage system for a number of years, I hardly think it material that the drain in its inception was not actually constructed by the Corporation. I have therefore little difficulty in holding this is a public drain. [64]

66 The decisive factor was that the corporation had used the drain as part of the public drainage system for a number of years. It had treated the drain in every way as part of the public drainage system. This outweighed the fact that the drain was on private land, and was not constructed by the corporation.

67 In Petone Borough v Daubney,[65] the plaintiff claimed damages for injuries suffered when his right foot was caught in a hole in a footpath alleged to be caused by the borough's negligence in erecting or permitting to be erected a stormwater drain, without exercising proper care and workmanship. One issue was whether the stormwater drain was a public drain. The drain was an ordinary stormwater drain constructed from a building and running under the footpath to the street channel. The concrete kerbing of the street channel and the adjacent end of the drain were broken by unknown means. The drain was upstream of the public drainage system. The drain did not drain water collected from a number of different properties or public areas. There was no evidence that the council had done anything to the drain, or had actual control over the drain. The drain was held not to be a public drain.[66]

68 Here, the decisive features were that the drain ran from a single private dwelling to the street channel, and was upstream from the public drainage system. There was no evidence of management or control of the disputed drain by the borough.

69 In Connolly v Palmerston North City Corporation,[67] a subdivision of land was situated behind land fronting onto a street. The only means of access from the street to the subdivision was by means of a narrow strip over which there was a right of way to each lot in the subdivision. The subdivision plan approved by the council created a sewer easement running along the boundary of the land in the subdivision. A drain was constructed by the council along the sewer easement. There were to be further extensions of the drain to meet the drainage needs of houses which might be erected on adjoining land. The issue was whether the drain constructed along the easement, and continuing on to the adjoining land, was a public drain. Gresson J concluded:

In my opinion, what is here contemplated and in part constructed is a public drain, that is, a drain which is in the general interest of the city as opposed to one for the particular or personal benefit of an individual or of one household. I think the distinction is between a drain laid in connection with a particular property or even a drain laid to be used in common by two or more properties for the benefit of the particular household or households for whom it is installed, and, on the other hand, a drain laid to meet the needs of a group or collection of homes and to enable that settlement to be connected up to the general drainage system of the city... At the moment this drain will not serve many, but the time may come when it will carry the sewage of a small community. In my opinion, it has characteristics which place it in the category of a public drain ... But, in this case, it is in contemplation that the new drains will become attached to one of the Corporation's sewers and become integrated into the city's drainage system. It has been constructed, and by the Corporation, with that object in view.[68]

70 In this case, the court considered that the drain was a public drain referring to the fact that the drain had been laid to meet the needs of a group of homes, that more homes would be connected in the future, that the drain was or would be attached to the city's drainage system, and had been constructed by the council albeit that the council was reimbursed by the developer.

71 In Aprea v Wellington City,[69] the owners of a parcel of land sought subdivision approval. The council required various drains to be constructed as a condition of its consent. One drain did not connect to the adjoining lot. Years later, the council sought to rectify the problem, but permission was denied. The question was whether the drain in dispute was a public drain. Tomkins J decided that it was a part of the drainage system originally 'installed by the subdivider, taken over by the Council, and marked on the city drainage map':[70]

Having regard to the above provisions, I must endeavour to interpret the meaning of the phrase "public drain". Literally the phrase means a drain belonging to or for the use of the public. In that sense I think it means a drain which is not for the exclusive use of one owner of land but which is a drain to which more than one owner of land may connect his private drains for the discharge of sewage. One test as to whether a drain be public or private would be to ascertain whether it was constructed at public expense by the local authority. If it were so constructed it would clearly be a public drain. As to its being on private land, the Act clearly contemplates that there may be public drains constructed on private property ... Another test would be to ascertain whether the control and maintenance of the drain has been taken over by the local authority. A further test would be to ascertain whether two or more owners have the right to discharge their drainage into it.[71]

72 In this decision, the court refers to three different tests that might assist in determining whether the drain is a public drain. One test is to see who paid the construction cost of the drain. If a drain is constructed at public expense, this circumstance points towards the conclusion that the drain is a public drain. If a drain is on private land, it may still be a public drain. A second test is to ascertain whether the control and maintenance of the drain has been taken over by the council. Again this circumstance points towards the classification of the drain as a public drain. A further test is whether two or more owners have the right to discharge their drainage into it. It is notable that the last test is just treated as a further test. It is not treated by the court as the sole or decisive test.

73 In Stubbs v Taumarunui Borough,[72] the borough sewerage system was extended to the street where the plaintiffs owned and occupied residential properties. Branch connections called 'lateral sewers' were constructed by the council from the main sewer to the boundaries of the individual properties. The council would only permit connections to the lateral sewers if the cost of construction was reimbursed by the landowner. It was claimed that the lateral sewer was a public drain, even though it served only one property. McMillan J decided that the lateral sewer was constructed by the council on a public street and, although intended for the use of only one lot holder and his successors in title, was part of a system of drainage intended for the public benefit and was a public drain. The judgment identified factors which made the lateral sewer a public drain, even though intended for the purpose of providing drainage exclusively from one property:

In the circumstances of this case I am of the opinion that the lateral sewer in Cross Street to the first plaintiff's boundary is a public drain. Although it was intended for the exclusive use of the first plaintiff or his succeeding occupiers, it is one of a number of laterals which are provided in the area for the use of a section of the community, that is, that section which lives in the Cross Street area. Although at the extremity of, it is, none the less, a part of a public sewerage system. It is built on a public street which is vested in the defendant ... The fact that it is built on a street does not make it a public drain (Petone Borough v Daubney), but it may be a factor pointing to that. The most important factor, in my view, is that the lateral sewer was provided by the defendant as part of a system of drainage intended for the public benefit. The defendant, through its engineers or contractors, designed and installed the scheme. The first plaintiff did nothing to bring it about. The defendant paid for it, although expecting to be recouped. If it is a private sewer it must be subject to the ownership or control of an individual. Who is that individual? It is not the first plaintiff. He did not engineer the sewer, construct or pay for it. It is not on his land. He cannot repair it without disturbing the street which is vested in the defendant. Indeed, the defendant by refusing to allow him to connect his property to it has denied that he has ownership or control of it. If then, it is not a private sewer, it must be a public one. I hold accordingly.[73]

74 Here the court decided whether the drain was a public drain by reference to factors that the court considered relevant to its decision. The most important factor was that the lateral drains were provided by the council as part of a system intended for the public benefit. The council through its engineers and contractors designed and installed the scheme. The developer did not. No private owner owned or was in control of the drain. A private owner could not repair the drain without disturbing the street which was vested in the council. The council demonstrated its ownership and control of the lateral drain by refusing the owner permission to connect his property to it. These factors outweighed the fact that each lateral drain supported only one property, and did not carry drainage water from two or more properties. While the drain did not serve more than one property, other factors outweighed this consideration leading the court to conclude that the drain was a public drain.

75 In Wellington City Council v Longhurst,[74] the disputed drain ran diagonally across a house property following the channel of a natural water course. The drain must have been constructed by the subdividers of the land. The subdividers granted the council the right to lay, repair, renew, alter and cleanse the drains under the subdivided lands and all public drains necessary for the efficient sanitation of the subdivided and adjoining lands. The disputed drain terminated at a public stormwater drain, and connected into a number of other properties. Subsidence of a dwelling was caused by the escape of water from the drain. The New Zealand Court of Appeal held that the drain was a public drain not for the benefit of any particular property but for the purpose of ensuring that the watercourse properly drained into the public drains of the city for the protection of the private property owner.

76 The appeal court noted that the trial judge was much influenced by three matters. Firstly, the drain served several properties so it was not for the benefit of a particular householder. Secondly, the affected householder had no ownership or ability to control any portion of the drain other than that part which ran through her property, but which did not serve her property. Thirdly, the drain had been taken over by the council with the drainage works relating to the subdivision. It was the council that approved stormwater connections to the drain.[75] These factors were decisive in assisting the trial judge to conclude that the drain was a public drain.

77 In so doing, the court rejected the council's submissions. Firstly, there was no evidence that the council had taken control of the drain. Secondly, the drain was a private drain for the benefit of particular properties involved rather than a section of the public. Thirdly, the council had never considered it was responsible for the drain. Fourthly, the drain was not shown on the council's drainage map indicating that it was not a public drain, and finally that it was not the type of drain where two or more owners have the right to discharge into it.

78 In response to one submission made for the council that a drain which serves more than one property might nevertheless be a private drain, the appeal court observed:

A privately laid drain which serves more than one property and is connected into the public drainage system may remain a private drain because it has not been recognised as a public drain by the actions of the local authority. There may have been no public control brought to bear on it. However, because of tighter present-day requirements for the disposal of contaminants and water it is becoming increasingly likely that a sufficient element of control will be found to exist where there is a common drain which is so connected.[76]

79 In this passage, the appeal court accepts the possibility that a privately laid drain serving more than one property owner and which connects into the public drainage system may nonetheless remain a private drain because it has not been recognised as a public drain by the actions of the local authority. The court considered that this may be so if no public control may have been brought to bear on it.

80 The appeal court's conclusion that the drain was a public drain was expressed in this manner:

... it is our view that by the combination of:

(a) acquiring or approving the piping of the water course by the subdivider

(b) taking the powers given by the easement; and

(c) authorising the higher owners to carry out improvements and to cast the concentrated flow of stormwater resulting therefrom on to the respondent's land via the drain

the council consciously and actually took the drain under its control, a situation which existed for not less than 20 years.[77]

81 Again, it is significant no one test or factor was treated as decisive. All factors for and against were considered by the trial judge and reviewed again by the appeal court. In the event, the trial judge and the appeal court reached the same conclusion.

82 The New Zealand cases show that there are many factors that may be taken into account in determining whether a drain is a public drain. They include:

• does the drain receive drainage from one or more than one property?

• do public drains drain into the drain under consideration?

• how long have the drainage arrangements continued?

• are more drains intended to be connected to the drain under consideration in the future?

Conclusion as to the proper construction of s 198 LGA 1989

83 There are significant difficulties with HPP's construction of s 198. Firstly, the definition of 'public drain' for which it contends is not in s 198 or in LGA 1989 at all. There is no statutory warrant for the test propounded by HPP. It is a gloss sought to be imposed on s 198 and LGA 1989.

84 Lord Macmillan in Ereaut rejected submissions that the court should determine on a specific definition of the statutory expression 'public school':

The statute does not define the expression "public school." It does not prescribe that no school shall be deemed a public school if any part of the profits earned by conducting it is paid over to the persons who own and manage it. If this is to be laid down as an absolute criterion it must be derived either from previous authoritative judicial interpretation of the expression or from its essential and inherent meaning.[78]

85 Likewise, in Ereaut, Lord Warrington of Clyffe rejected in even more direct terms the submission that the court should adopt an explicit test of 'public school':

The Act contains no definition of "public school," and it is therefore the function of the tribunal in each case to say whether the school in question is properly so described. In arriving at a conclusion there are obviously many elements to be taken into consideration, and to say that, whatever the other circumstances may be, the existence or non-existence of one element affords an irrefutable test is open to the objection that by doing so the tribunal pro tanto binds itself by a definition which the statute does not contain.[79]

86 Secondly the need for all relevant matters to be taken into account is supported by authority dealing with the construction of statutory expressions involving the word 'public'.[80] Whilst contending that the New Zealand case were written with its definition, HPP did not advance any general authority in support of its definition.

87 Thirdly, as I have said, s 198 results in the vesting of property in a council and the expense of the private landowner. It is just and appropriate in these circumstances for the court to review all of the relevant circumstances rather than adopt a specific test. To do otherwise might result in significant injustice in the individual case. The court should be cautious in its interpretation of a provision divesting property rights from landowners.

88 Fourthly, the facts and circumstances involving drains or private property are infinitely varied and diverse. Adoption of a test focussed on just one criterion might result in a significant consideration being ignored or overlooked. Thus, as HPP accepts, the position might be different if there were an agreement between the private landowner and the council for the receipt and treatment of public drainage water if the private landowner has the express right to terminate the acceptance of the water, or if the public water is insignificant in volume. There are often problems with Latrobe's test. The flow of water may be seasonal or intermittent. How is the significance of a flow to be determined?

89 Fifthly, there is a significant risk that there might be serious injustice to the authority or to the private landowner if considerations such as who constructed the drain, drainage design and funding, the ownership of the drain and associated works and materials, the identity of the person with control over the drain itself, the land in which the drain is situated, the land in the vicinity of the drain, and the maintenance of the drain are all to be disregarded as not germane or even relevant to the status of the drain.

90 Sixthly, the past control and management of the drain in question, security and access to the land on which the drain is found are not irrelevant, and may influence the decision of the court as to whether the drain is a public drain.

91 Finally, the legislative and regulatory regime to which the drain is subject, here relating to mining, together with the mining licence and approved work plan under which the drain is operated may be influential in determining whether the drain is a private or public drain.

92 In my opinion, the words 'public drain' in s 198(1) are simply used in their common and ordinary meaning. There is no statutory definition of 'public drain' found in LGA 1989, or that should be conceived or developed by the Court as resulting from the essential or inherent meaning of the words. To determine whether or not a drain is a public drain, it is necessary to examine the relevant facts and considerations that bear on this issue. There may be some which favour the view that the drain in dispute is a public drain, as against others which point to the reverse conclusion. In this manner, the Court is able to determine those factors which predominate and to reach a conclusion as to the status of the drain. As the present case and the New Zealand cases illustrate, the facts and circumstances that can arise are infinitely varied. The adoption of a single statutory test as urged by HPP would lead to injustice in individual cases.[81] A significant amount of public water flowing into a private drain would cause a private landowner to be divested of the drain and the land, works and materials that constitute it. The landowner would lose management and control of the drain regardless of other circumstances. Latrobe's approach recognises that there may well be situations where public water is received into a private drain but the drain retains its status as a private drain. Latrobe's approach does not intrude on private property rights nearly to the same extent as would the application of HPP's test.

93 The issue of whether a drain laid out on private property has become a public drain is not one-dimensional. There is no simple, convenient or universal definition that can be applied to the word 'public' to give certainty to the expression and achieve fairness to councils and landowners in all cases. Rather, relevant matters for and against stand to be identified and attention given to the object and purpose of s 198(1) in the statutory context of LGA 1989 before the court can determine whether a drain located on private property has become a public drain and vested in the council.

94 In my view, Latrobe's approach is the correct approach to the application of s 198(1). In this case, this approach is to be applied at the three different dates when HPP claims the MMD vested in the Shire of Morwell or in Latrobe. The subsequent analysis and factual findings seek to do this.

95 The history of the mine is largely, if not entirely, common ground between the parties. The mine was opened by SECV in 1949. From 1949 until about January 1994, the mine was owned and operated by SECV. SECV was a body established for public purposes,[82] to conduct open cut coal mining and generate electricity.

96 In 1994, the HPP land was vested in Generation Victoria by the Electricity Industry Act 1993 (Vic) ('EI Act'). Generation Victoria was also a public body, and conducted open cut coal mining and electricity generation for public purposes. In about 1995, the HPP land was vested in Hazelwood Power Corporation Pty Ltd ('HPC') under an allocation statement issued under s 153B of the EI Act. In about September 1996, the whole of the shares in HPC and the HPP land were acquired by HPP.[83] HPP has remained the owner of these assets to the present day.

97 The Morwell township is generally to the north of the HPP land on the northern side of the Princes Freeway. Northeast of the HPP land is the MIE. This estate was formerly the SECV Workshop Area. When SECV was privatised in 1996, the MIE was subdivided and developed as an industrial estate.[84]

98 Sixteen survey plans of the MMD were prepared by TGM Group dated 28 November 2014.[85] They are agreed by HPP and Latrobe.[86] The survey plans show the present day location of the drain, the nature and size of the culverts, the inlet pipes along the MMD, the low flow pipe and its alignment.

99 The MMD consists of a 4.9km long channel intended to carry high drainage flows, with a concrete pipe mainly beneath the floor of the high flow channel intended to carry low flows. The low flow pipe extends for approximately 2.9km. Approximately 3.7km of the high flow channel and almost all of the low flow pipe is located on the HPP land. The low flow pipe also includes a short section of an above ground steel pipe. [87] Since 2012-13, approximately 600m of the high flow channel has been lined with a composite geotextile material called 'Teranap'.[88]

100 Drainage asset maps of the southern part of the township of Morwell and the MIE were provided by Mr Steven Piasente, Latrobe's General Manager of Community, Recreation and Infrastructure. They show the stormwater drainage pipes for the areas of the Morwell township, south of Commercial Road, to be directing water towards the MMD under the Morwell Bypass. They also show that the drains in the MIE discharge into the MMD. The drainage infrastructure associated with the Morwell Bypass is the property of VicRoads.[89]

101 Hydrology evidence is at the forefront of HPP's case. The hydrology evidence relates to all three alleged vesting dates. HPP relies on the expert report of Mr Simon Kovacevic, a civil engineer specialising in hydrology and hydraulics. In his report, he provided a summary of his opinion:

• There are three parties that control the drainage infrastructure through which water contributions enter the MMD, or who own land from which water is discharged to the MMD via overland flow, which are [HPP], [Latrobe] and VicRoads;
• The percentage contributions of flow from the three contributing parties ([HPP], [Latrobe], VicRoads) varies with storm/rainfall characteristics, and varies with time throughout any given rainfall event;
• The total flow and the percentage contributions of flow from the three contributing parties ([HPP], [Latrobe], VicRoads) varies along the length of the MMD, with the total flow generally increasing from upstream to downstream as the total catchment area increases and the relative portions of contributing catchments (i.e. land from which drainage is controlled by either [HPP] or VicRoads) changing with the increase in total catchment area. Indicative variations in the percentage contributions at key locations[90] along the MMD from upstream to downstream are summarised as follows:
  • The largest contribution of flow within the MMD at inflow location "1 (upstream)" (which represents the MMD catchment at the upstream limit of drainage connections from the industrial estate) is from [HPP] land (e.g. 89.4% of the peak flow of 3.25m3/s at the time of peak flow in a 10 year ARI[91] design flood event);
  • The largest contribution of flow within the MMD at inflow location "A" (which represents a combination of drainage from [HPP] land, [Latrobe] land and a small component of VicRoads land) is from [Latrobe] land (e.g. 95.4% of the peak flow of 15.75m3/s at the time of peak flow in a 10 year ARI design flood event);
  • The largest contribution of flow within the MMD at inflow location "Z" (which is located at the first significant inflow location downstream from the start of the Teranap lining in the MMD) is from [Latrobe] land (e.g. 89.6% of the peak flow of 13.99m3/s at the time of peak flow in a 10 year ARI design flood event);
  • The largest contribution of flow at inflow location "S" (which is located just downstream of the drop structure on the MMD and represents virtually all contributing catchment to the MMD upstream of the metal flume over the disused railway) is from [Latrobe] land (88.5% of the peak flow of 16.51m3/s at the time of peak flow in a 10 year ARI design flood event).
  • The changes made by VicRoads to its drainage infrastructure in the vicinity of the MMD since February 2011 are unlikely to have had any significant effect on the calculated contributions to peak flow rate within the MMD for conditions at May 2015.[92]

102 Mr Kovacevic's report is a comprehensive expert assessment of flow rates having regard to the inputs and infrastructure of the MMD. He was not cross examined.

103 From Mr Kovacevic's report, a number of conclusions can be drawn about flow in the MMD based on peak flow in a 10 year ARI design flood event:

(1) at location 1, 89.4% of the peak flow of 3.25m3/s is from the HPP land;

(2) at location A, 95.4% of the peak flow of 15.75m3/s is from land drained by Latrobe;

(3) at location Z, 89.6% of the peak flow of 13.99 m3/s is from land drained by Latrobe; and

(4) at location S, 88.5% of the peak flow of 16.51m3/s is from land drained by Latrobe.

104 Tables provided by Mr Kovacevic show ARI design flood events ranging from one year to 500 years. At location 1 (upstream), the primary contributor is HPP, with contribution ranges from 87.8% to 92.3% of the total flow. At location A, the contribution to total flow of land drained by primary contributor Latrobe varies from 95.0% to 95.5%. At location Z, the contribution to total flow of land drained by Latrobe ranges from 75.3% to 91.5%, whilst at location S the ranges are from 76.3% to 89.6%. The maximum contribution by land drained by Latrobe to total flow in the MMD is found at location A. At this location, two main stormwater trunk drains enter the MMD. Mr Kovacevic's RORB Model Layout[93] and his Drainage and Catchment Summary[94] are reproduced as Schedules 5 and 6.

105 Mr Kovacevic also gave evidence as to overland flow paths. In the upper region of the MMD catchment (on HPP land), there is evidence to suggest that some water from the MMD catchment is flowing west into the mine pit and does not reach the MMD. This was likely to be a combination of vegetation in the channel, culvert blockage and topographic controls. The resulting effect is to reduce the volume of water from the upper catchment area that enters the MMD.

106 As to the Latrobe and VicRoads catchments of the MMD, it is likely that some runoff is ponded within the flood plain or bypasses some of the Latrobe and VicRoads stormwater drainage infrastructure. The flows passing forward from these areas into the MMD may be overestimated. The bypassing of flow and flood plain attenuation is likely to result from a combination of topographic controls, stormwater drainage surcharging and bypassing of inlets. The resulting effect is to reduce the volume of water from the Latrobe and VicRoads catchment areas that enters the MMD.

107 Mr Peter Brimblecombe, HPC's Senior Technical Compliance Engineer, gave evidence that there has been no ability to pump aquifer water from the floor of the mine to the MMD since the late 1980s. There is no connection between the mine's fire service pipes and mains to the MMD. He is unaware of any such connection since he started with SECV in the 1980s. He is not aware of any instance where non-aquifer water has been pumped into the MMD through the mine's fire service system.

108 Dr Andrew McCowan, an experienced civil engineer and hydrologist, developed the RORB based hydrologic model to simulate runoff from the Morwell township and surrounding areas.[95] The model was developed for the time periods 1949, 1976, 1987, 1998 and the present based on aerial photography.[96]

109 Dr McCowan described the topography of Morwell and the surrounding area. There is a ridge running approximately north to south through the middle of the township. A second ridge approximately on the alignment of Princes Drive runs east to west. Only the central and southern parts of the Morwell township drain to the MMD. Much of the northern boundary of the catchment is along Princes Drive. The eastern boundary of the catchment is along the natural ridge extending from Buckley's Reservoir southwards along Ridge Road.

110 Dr McCowan said that the MMD traverses the north and north-east perimeters of the mine. It collects runoff from the HPP land to the south, the MIE, the township of Morwell and the Princes Freeway. It diverts the flow from these sources to the Morwell River through a series of wetlands to the west of the township. The Morwell River flows northwards, joining the Latrobe River near Yallourn.

111 According to Dr McCowan, the present capacity of the MMD is in the order of 40m3/s. It has the capacity to contain a flood flow well in excess of a 100 ARI flow without any overflow onto HPP's land.

112 The total catchment area of the MMD is approximately 350ha. For an average annual rainfall of 749mm, the total average annual volume of rain falling on the overall catchment to the MMD is 2,620mL. Dr McCowan divided up the catchment area of the MMD into sub-catchments. The sub-catchments include parts of the Morwell township, the MIE, the Princes Freeway and open land areas. Of these, the most significant contributors are the Morwell township, the freeway and the MIE. There is also land that drains directly into the MMD, a small parcel south of the MIE, and a triangle of land to the west of the MIE.

113 The results indicate consistent relative contributions of each sub-catchment to the MMD across the time periods 1976 (when the relocation and redevelopment of the MMD was complete), 1987 (when the freeway works were complete), 1996 (when SECV was privatised), 1998 (when the drainage works in the MIE were complete) and the present. Between 1949 and 1987, there was an increase in the volume of run-off as a result of increased development in the Morwell township. There was also an increase in the volume of run-off when the MIE was developed. Dr McCowan's tables show the proportion of runoff from each catchment in various ARI events with the predominant contribution coming from the Morwell township and the MIE.

114 I accept the evidence of Mr Kovacevic, Mr Brimblecombe and Dr McCowan. On the one hand, the evidence shows that a high proportion of the water in various parts of the MMD comes from public drainage. On the other hand, it shows that while there has been some increase in the volume of run-off from development, the volume of run-off from the various sub-catchments has not altered much over time.

115 To address the alternative dates of vesting alleged by HPP of no later than 1975, 1985 and September 1996, it is necessary to review the history of the MMD in some detail. At the two earlier dates, the evidence is almost entirely documentary. At the last date, evidence from documents and witnesses is available.

116 Prior to the construction of the mine, land to the south of the Morwell township comprised agricultural fields. Following land acquisition, SECV commenced work in about April 1949 for the construction of a cut off drain ('the original MMD'). At about the same time, SECV commenced construction of drainage infrastructure, ramp and road access, water supply, and accommodation.

117 The original MMD was a cut off drain for the purpose of diverting flows of storm and rain water run-off from the catchment of the drain from entering the open cut mining operations proposed to be conducted by the SECV on the HPP land.[97]

118 The original MMD was for the benefit and protection of the open cut mining operations to be conducted by SECV, and for the benefit and protection of the owners of the mine.[98] An illustration in the SECV annual report of 1949 describes the MMD as 'for the protection of the open cut and work area'.[99]

119 The Annual Report of SECV for the financial year ended 30 June 1949 refers to the opening up of the Morwell open cut by contractors commencing on 11 April 1949.[100] By the close of the year, 43,500 cubic yards of overburden had been removed.[101] On the same date, SECV commenced the excavation of the main cut-off drain.[102] It is clear from photographs taken at the time that major earthworks were required to construct the original MMD.[103]

120 At the time of the construction of the mine and the original MMD, the township of Morwell already existed. Drainage from the southern part of the Morwell township flowed freely in a south-westerly direction, generally following the contours of the land. The parties do not agree whether or not at this time the flow of water onto the SECV land was a natural flow of surface water.[104] Whether it was or was not, Dr McCowan's evidence is to the effect that the Morwell sub-catchment was essentially the same then as later, although the township of Morwell was considerably smaller, and less developed, and there was no Morwell Bypass.

121 The original MMD, as it was in 1949, was not required for the purpose of providing drainage to the southern part of the township of Morwell. It was not constructed for the benefit or protection of the township or citizens of the southern part of Morwell, nor as part of a system of drainage for the benefit or protection of the southern part of the township of Morwell.[105]

122 The Shire of Morwell did not pay for or contribute to the costs of the construction of the original MMD, and did not construct the original MMD.[106]

123 Mr Larry Naismith, who was employed by Latrobe and the Shire of Morwell in engineering management roles from 1989 until September 2006, gave evidence that the original MMD was one of three drains constructed by the SECV in and around the mine. The other two drains were the concrete lined section of Bennett's Creek downstream of the briquette factory - now on private land outside the present mine boundary - and a 600mm diameter pipe drain, with an open earth drain above, along Brodribb Road from the wetlands near Monash Way west to Nadenbouschs Road, discharging into the Hazelwood Pondage. The function of the Brodribb Road drain was to divert water into the mine property from its natural course which was north into Bennett's Creek. Its function was different from that of the original MMD which was for the benefit and protection of the land comprising the mine. Mr Naismith believed that before SECV was privatised, Latrobe (and before it, the Shire of Morwell) had nothing to do with the MMD or the other two drains.[107]

124 Dr McCowan described the natural drainage path in 1945 as from northeast to southwest across the land that is now the mine.[108] The township of Morwell was in existence generally to the north of the mine site.[109]

125 By 30 June 1950, SECV had removed 408,500 cubic yards of overburden from the new open cut bringing the total to 452,200 cubic yards. Excavation of the MMD, described as 'the main cut-off drain' was 58% complete by then.[110]

126 It is undisputed that the original MMD was a private drain constructed by SECV in about 1949 to its own design and at its own cost. It required very substantial earthworks to construct. Its primary purpose was to protect the open cut mining operations of SECV. After its construction, the original MMD remained within the management and control of SECV - not the Shire of Morwell. The Shire of Morwell did not contribute to the construction cost. There is no evidence that the Shire of Morwell incurred any cost at all, or exercised or sought to exercise, management or control over the original MMD at any time.

127 After its construction, the original MMD remained under the management and control of SECV. SECV commenced coal mining in about November 1955. In 1959, approval was given for SECV to build and operate six 200 MW electricity generation units using coal supplied from the mine. The Hazelwood Power Station, as it was known, commenced operations in about July 1964. By May 1965, SECV had approval for the expansion of the Hazelwood Power Station by two further 200 MW units.[111]

128 In or about 1965 or 1966, due to projected increases in demand for coal, long term plans for the mine were modified to increase excavation beyond the western and southern extent of the existing mine.[112]

129 Between 1973 and 1976, the original MMD was partly relocated on the HPP land. It was significantly redeveloped by SECV. The relocation and redevelopment works included the installation of the low flow pipe mainly beneath the upper channel of the MMD. SECV designed and financed the redevelopment works, communicating with three other authorities including the Shire of Morwell.[113]

130 The redevelopment works included the relocation of the channel and the construction of a flume for the MMD over the coal railway. An estimate prepared by SECV showed a total cost of $544,650.00, consisting of existing channel works of $174,130.00, relocation works at $290,520.00 and flume construction costs of $80,000.00.[114]

131 There is some dispute as to the purpose of the relocation. Latrobe says that the relocation was necessary because of the continuing need to divert flows of water away from the open cut of the mine, and because the original MMD would have been severed by the open cut mining operations at the mine in December 1974.[115]

132 HPP admits these purposes,[116] but says that the MMD was relocated to:

(1) ensure that there was sufficient capacity in the MMD for drainage water from the southern part of the township of Morwell, and confirm interconnections with council drains;

(2) take into account the anticipated flow of surface water from the Morwell Bypass when constructed;

(3) accommodate the coal mining operations within the mine which were expected to intersect the original drain;

(4) perform limited requirements for drainage of surface water runoff from the HPP land; and

(5) provide a safer means of transporting drainage water previously channelled through the original MMD across the northern batters of the mine.[117]

133 Even in 1966, SECV was aware of the Country Road Board's ('CRB') plans to construct a new section of the Princes Freeway bypassing Morwell. On 12 May 1966, representatives of SECV attended a meeting with representatives of the CRB. A memorandum outlining potential effects of the Morwell Bypass proposal on SECV interests and operations stated:

1. The reservation for the By-pass deviation will probably conflict with the main drain running around the edge of the Open Cut, which receives drainage from Morwell town and the area surrounding the Cut as well as drainage pumped from the Open Cut itself, although it is not likely that any actual road pavement will be over the drain at any point.[118]

134 On 5 August 1969, the CRB's divisional engineer contacted the Manager of the Latrobe Valley Region for SECV concerning future roadworks, and referring to the potential impact of the works on the MMD:

The [southern carriageway of the Morwell Bypass] crosses the Morwell River flats and the Commission's filter area, and to accommodate the flow, new structures are proposed at points A, B, C & D on the plan, opposite the bridges on the existing alignment of the Princes Bypass.

The location and waterways of these structures have been discussed with your Civil Services Engineer, Mr G Miles and bridges at A, B & C of equal waterway to that provided under the existing highway have been agreed to and the design of these structures is proceeding. However, it is understood that your Commission may have future proposals for the diversion of the main drain from the Morwell Open Cut into the filter area of the Morwell River flats which could affect the location of the structure proposed to be provided at D on the alignment of the existing effluent drain.

The opening under the existing highway at the drain is 2 No. 10' dia. Armco pipes and a waterway of similar area is proposed at D by the installation of, perhaps, 2 No. 8' x 10' precast box culverts. However, prior to proceeding with the design of this structure, it would be appreciated if I could receive the Commission's comments on the Board's proposal with particular reference to the future alignment of the main drain and the use of the filter area. [119]

135 This memorandum shows CRB consulting SECV as the authority responsible for the MMD, and informing it of CRB's design intentions for the Morwell Bypass. There is nothing in the memorandum to suggest that the Shire of Morwell had any role in the management or control of the MMD or in its future relocation.

136 On 8 December 1970, SECV representatives met with their geotechnical consultant, Mr Brawner of Golder Brawner Associates, in order to discuss effects of movements in Morwell. Discussion at that meeting concerned the drainage arrangements for the Morwell Bypass. The minutes record:

The Morwell Bypass was specifically mentioned. It appears that the Country Roads Board has so far only been given clearances for fixing the road profile. It was noted that the proposed bridge over the interconnecting railway had not been mentioned in the report. The possibility was raised of using the highway drainage system to intercept some of the water which is now carried away by the main drain. In any event, it was emphasised that the Bypass should not shed water towards the northern batters of the open cut.

...

The matter of diverting and sealing the main drain was raised. Various alternatives had been considered in a report prepared by Mr. Reilly (dated 7th December, 1970). The alternatives and associated costs were outlined, and Mr. Brawner commented that it was a matter for the Commission to decide, but anything done to reduce entry of water into the cracks would be beneficial. [120]

137 On 19 July 1971, the Shire Engineer of the Shire of Morwell sent a letter to the Civil Service Engineer of SECV:

Please find enclosed sketch map of catchment areas of the Morwell main drain, which runs between the town of Morwell and the State Electricity Commission Works Area, showing catchment areas and times of concentrations. The area within the State Electricity Commission Works Area has not been included.

It would appear that the capacity of the drain in the vicinity of the interconnecting railway should be in the order of 250 cusecs.[121]

138 From this letter, it is apparent that the Shire Engineer of the Shire of Morwell provided SECV with a sketch map of the catchment areas external to the mine which drained into the MMD. The catchment area included land between the township of Morwell and the mine.

139 On 2 August 1971, the Regional Services Engineer of SECV forwarded a memorandum to the Principal Design Engineer, Civil of SECV showing SECV's internal departmental design responsibility for the MMD relocation:

Enclosed herewith is a copy of a memorandum dated 19th July, 1971, from the Morwell Shire Engineer, together with sketch plan showing catchment areas of the main drain but excluding the area within the Commission Works Area.

This information was supplied by the Shire Engineers as a result of discussion by the Sub-Committee dealing with the deviation of the main drain ...

It was previously agreed that Civil and Architectural Department would be responsible for the detailed investigation and design of the drain.[122]

140 In December 1971, SECV undertook hydrology and engineering design calculations for the relocation of the MMD, independently verifying flow figures provided by the Shire Engineer in April 1972, and progressing to hydrology, design, flume and transition studies and work including the preparation of a bill of quantities in 1973 and 1974.[123]

141 On 9 August 1972, the Manager of the Latrobe Valley Department at SECV sent a memorandum to the Chief Civil Engineer at SECV entitled, 'Morwell Project Main Drain Deviation':

I refer to your drawing ..., showing the proposed alignment of the main drain deviation along the northern batter of Morwell Open Cut.

A short section of the new alignment between the Mirboo Railway and the Yallourn/Morwell Interconnecting Railway lies within the Morwell Town Planning Scheme in an area zoned as 'Residential'.

The Morwell Shire Engineer is aware of this proposal and although he agrees that the construction of such a drain is a "permitted work" in a 'Residential' zone he has advised verbally that residents might loge objections to an open drain being located close to their properties. These objections would be heard by the Shire of Morwell as Responsible Authority for the administration of the Planning Scheme.

Under the circumstances we should submit our proposals officially to the Shire as soon as possible so as to avoid any possible re-occurrence of a situation similar to that which arose in connection with the dredge erection site at Hernes Oak where it was imperative for work to commence before the right to proceed had been approved through the normal Planning Scheme channels.

The basic information with which the Council would be concerned would include:

1. Approximate alignment of drain (this of course is largely governed by the location of the Morwell By-pass as previously discussed).
2. Approximate width and depth.
3. Type of drain, be lined or unlined.
4. Clearance from drain to rear fences of houses in Willis Street.
5. Typical flow conditions and nature of effluent.
6. Provision of security fencing.
7. Approximate dates of construction programme.

It is requested that design should now be advanced to the stage where a preliminary plan showing the above details can be submitted to the Shire for information and comment.[124]

142 The memorandum shows SECV designing and planning the partial relocation of the MMD. While the Morwell Shire Engineer is stated to be aware of the proposal, and as giving advice, it is plain that he is doing so in the Shire's capacity as the responsible authority for the Morwell Planning Scheme under the Town and Country Planning Act 1961 (Vic). It is not suggested that the Shire of Morwell was to have any direct role in the design, management or control of the relocated MMD.

143 By a letter dated 11 August 1972, the divisional engineer provided plans concerning the CRB's proposals on the Morwell Bypass to SECV 'to facilitate the design of the relocation of the main drain west of Wilson Street'.[125]

144 An SECV memorandum dated 16 August 1972 from the Development Engineer, Fuel to the Principal Design Engineer, Civil refers to 'an additional 210 acres to drain to the main drain and this area should now be included in the design flow figures for both the lining of the existing drain and the diversion works'.[126] The memorandum also refers to 'the proposed flume over the interconnecting railway' and 'the intention that the existing drain and the diversion should be lined both to prevent leakage to the ground water system and to prevent scouring of the dispersive Morwell clays'.[127]

145 On 5 September 1972, representatives of SECV met with representatives of the Latrobe Valley Water and Sewerage Board ('LVW&SB') in relation to the proposed MMD relocation. Notes of the meeting prepared by an officer of the SECV record:

Purpose:

The main purpose of the meeting was to discuss with the LVW&SB the proposed deviation of the Morwell main drain by the [SECV], with a view to obtaining an appreciation of its understanding of the likely licensing requirement which could apply to discharges into and from the drain, taking into account the common use of the drain by both the [SECV] and the Morwell Shire Council.

Discussion:

The [SECV] proposals for the deviation of the drain were described and preliminary drawings showing the route and details of the drain were tabled. Reference was made to the existing quality and quantity of effluents entering the drain and an indication was given of future expectations. A drawing was also tabled showing the location of a number of Council drains which discharge into the main drain.

Mr. Coulson [LVW&SB] pointed out that EPA had not yet formally appointed LVW&SB as a licensing body and his comments would be based on his personal opinions. He understands that EPA would require each party which discharged into a common drain to meet required standards at each point of entry. However, he considered that as the [SECV] owned the main drain and that treatment of the effluent occurred below the point of each separate entry point, that it would be impractical to require the Council to meet licensing standards at each point of entry. He agreed that the common treatment of all effluent in the drain seemed to be the logical solution. However, he mentioned that Council drains could be high in B.O.D. and bacterial counts, particularly after heavy rain, and thought that it may be necessary to treat the effluent to meet requirements for these two characteristics.

Mr. Crocombe [SECV] commented that it may be appropriate for [SECV] to enter into an agreement with the Council so that they could be responsible for sharing some treatment costs. Mr. Coulson considered this a reasonable approach to the problem.

Mr. Coulson expressed no objection to the use of grass filters located in Morwell River flood plain as a treatment facility. He commented that the existing ones are subject to occasional flooding, but he could see no problems with this, recognising that solids released from the filters during flooding would enter the river system. Mr Coulson considered that it was a reasonable approach in designing pollution abatement facilities to provide for progressive development.

...

Mr. Coulson anticipates that licensing provisions will become operative in December and that it will then be necessary for the [SECV] to apply for a licence for the existing main drain.[128]

146 The notes show SECV representatives meeting with LVW&SB officers to plan SECV's proposed relocation of the MMD. The proposals under discussion are those of SECV. The notes refer to likely licencing requirements which could apply, taking into account 'the common use of the drain by both the [SECV] and the Morwell Shire Council'.[129] 'A number of Council drains' shown on a tabled drawing discharge into the MMD. A representative of SECV suggests it may be appropriate for SECV 'to enter into an agreement with the Council' so that 'they could be responsible for sharing some treatment costs'.[130] It would be necessary for '[SECV] to apply for a licence for the existing main drain'.[131]

147 On 21 September 1972, the Chief Civil Engineer of SECV signed a departmental memorandum to the Principal Design Engineer, Civil of SECV entitled, 'Morwell Main Drain Deviation':

...

LVWSB / EPA Licence for Main Drain Effluent

I believe that the Commission should accept the discharge from the Morwell Township drains and provide for their flow in the grass filters to be provided at the end of the main drain.

If LVWSB licence conditions require that the simple grass filter proposal would need to be modified to incorporate treatment specifically required, because of the polluted substances contained in the effluent discharging from the Morwell Township drain, then detailed discussions should be entered into with the Morwell Shire Engineer at that stage - it being then assumed that the Shire would need to contribute to the cost of these special works or alternatively treat the effluent before reaching the main drain.

It would be in order to informally introduce this proposal into the discussions to be held with the Morwell Shire Engineer on the permit situation.[132]

148 In this important memorandum, SECV's Chief Civil Engineer advises SECV's Principal Design Engineer, Civil that SECV 'should accept the discharge from the Morwell Township drains' and 'provide for their flow in the grass filters to be provided at the end of the main drain'.[133] The memorandum represents an agreement by SECV to the discharge of public drainage water from the Morwell township into the MMD. This was to be accepted on the basis that the Shire of Morwell would contribute to the cost of the special works needed to treat polluted substances from the Morwell township drains. Alternatively, the Shire of Morwell would need to treat the effluent before it reached the MMD. The proposal was to be informally introduced to the Morwell Shire Engineer in the discussions concerning the grant of a planning permit by the Shire of Morwell for the MMD relocation. It was, as HPP has submitted, a benevolent acceptance of Morwell drainage into the MMD - a state of affairs likely to assist in obtaining a planning permit for the relocated MMD from the Shire of Morwell.

149 SECV did agree to accept the discharge from the Morwell township drains into the MMD. The relocated MMD was deliberately designed by SECV engineers to have the capacity to receive Morwell town drainage. Acceptance of public drainage from the township of Morwell into the MMD was on the recommendation of SECV's own expert engineering staff. It was a deliberate and voluntary act by SECV in the context of obtaining a planning permit from the Shire of Morwell. No one contemplated that acceptance of Morwell township drainage into the MMD would alter the status of the MMD, or vest the MMD in the Shire of Morwell. Such an outcome would have entirely contradicted the whole basis of relocating the MMD; namely, that the relocated MMD would be designed, built, managed and controlled by the SECV, and that the Shire of Morwell would attend to, or pay for, the removal or treatment of polluted substances in the drainage water discharging from the Morwell township drains into the MMD.

150 A handwritten file note of discussions between Geoff Miles and Max Williamson both of SECV at Morwell on 15 November 1972 states:

Tabled sketch showing proposed alignments of Main Drain Deviation and C.R.B. by-pass road.

Geoff Miles: stressed the need for overall co-ordination between involved parties such as C.R.B L.V.W.&.S.B.

Should aim for minimum overall cost.

This co-ordination can best achieved by use of the Latrobe Valley Consultative Committee's sub-committee on the main drain.[134]

151 In April 1973, Golder Brawner Associates prepared a report for SECV entitled 'Letter Report to State Electricity Commission of Victoria re: 36-inch diameter pipe for Main Drain Melbourne, Australia'. In this report, Golder Brawner Associates refer to plans for the deviation and lining of the MMD:

During meetings at the offices of the S.E.C.V. Fuel Department February 12th to 14th, 1973, a brief discussion was held regarding the proposed lining of the main drain, and the location of the main drain diversion.

Golder, Brawner and Associates Ltd. have recommended lining of the main drain along the northern perimeter of the Morwell open cut to guard against entry of water into vertical cracks in the M1 coal which could lead to instability on the northern batter.

At the time of the meeting, a sketch was presented (for discussion purposes) showing the proposed cross section of the main drain ... The sketch shows a 36" diameter reinforced concrete pipe installed below the base of an open channel. We understand that it is proposed to install catch basins at approximately 60-metre intervals along the axis of the pipe to provide hydraulic connection between the open channel and the buried concrete conduit. The 36 inch diameter reinforced concrete pipe is designed to carry the normal flows in the main drain. Occasionally, the capacity of the reinforced concrete pipe will be exceeded, in which case the hydraulic grade line will rise above the bottom of the open channel, and the open channel will carry the excess flows. We understand that the maximum duration of the open channel flow is expected to be of the order of 20 minutes for each occurrence.[135]

152 The report shows SECV, through its geotechnical engineers, designing the low flow pipe to carry normal flows in the MMD. In the event that the capacity of the concrete pipe were exceeded, the maximum duration of open channel flow is expected to be no more than 20 minutes for each occurrence. Showing their expertise and foresight, SECV's geotechnical engineers and consultants were concerned to guard against the entry of water into vertical cracks which could lead to instability on the northern batter. Lining of the MMD was proposed, but this did not occur until a major sinkhole developed in 2011 - almost 40 years later.

153 On 21 May 1973, the Chief Engineer, Fuel of SECV sent a memorandum to the Chief Civil Engineer of SECV, entitled 'Morwell Open Cut - Main Drain Deviation and Lining Existing Drain':

The northern boundary of the Morwell Open Cut now adopted as a consequence of the new development plans necessary to avoid the Yallourn seam coal allows the main drain deviation to be built on the south side of the by-pass road. In earlier proposals the deviation was to the north side of the by-pass road to make provision for sufficient clearance and access about the open cut. A suitable location for the drain is shown on Drg. No. OY1/3/591 and suits open cut operations.

This location and the existing lining criteria proposed for both the deviation and the existing drain section have been discussed with our consultants, Golder, Brawner and Associates, and their report and recommendations to cope with movements is attached. Golder, Brawner recommend that shorter length pipes be used along certain sections of the drain to increase permissible strains. It is suggested that this method or other means to produce the same results should be adopted in the drain design.

Golder, Brawner and Associates also recommend that the existing drain should be lined. The multiple culvert at approximately 1,317,150 E would be a suitable finishing point in the easterly direction.

Would you please arrange for the installation of these main drain works.

The main drain deviation should be in service by December, 1974, to allow normal advance of the overburden excavation face. The lining of the existing drain is required as soon as practicable and it is understood this work will be carried out in conjunction with the deviation, if necessary, as a single contract.

When the rearrangement of the open cut fire service and water reticulation systems has been completed, as outlined in the Fuel Department Report DD49,and the discharges from the Briquette Conveyor gallery and Southern Outlet areas have been converted to recirculating washing systems there will be no normal open cut discharges into the main drain. However, emergency discharge points will be maintained at both the existing northern discharge into the drain and the outlet at the No. 1 fire service reservoir area. Some open cut dirty water drainage discharges will be necessary until late 1974.

In determining the location for the proposed flume across the Yallourn-Morwell Interconnecting Railway, 17'6" clearance from the top of the rails to the underside of the structure is acceptable, however, special arrangements need to be made to protect both the traction wire and signal wires during construction and arrangements will be required to mount the traction wire to the underside of the flume structure. When the precise location of the alignment is determined this matter should be discussed with this Department.

The section of the drain to be built across the Midland Highway and the Mirboo North Railway will need to be delayed until they are closed by open cut operations. The most recent assessment of the advance of open cut faces indicates the southern overburden boundary will reach these features in June, 1974, and that they will require to be closed by this date for normal open cut operations to continue.[136]

154 This memorandum shows SECV civil engineers continuing to plan the MMD relocation. Notably, the section of the drain to be built across the Midland Highway and the Mirboo North Railway will need to be delayed 'until they are closed by open cut operations'.[137] The southern overburden boundary was expected to reach these features in June 1974.

155 On 27 August 1973, the Civil Engineer, Hydro & Investigations of SECV wrote to the Civil Services Engineer, Morwell:

MORWELL MAIN DRAIN RECONSTRUCTION

THORPDALE ROAD CULVERT

Attached are two copies of drawing No. C10/9/60, which show the proposed culvert at the Morwell Main Drain and Thorpdale Road intersection.

It would be appreciated if you would forward one copy to the Morwell Shire Engineer for his information and comment.[138]

156 On 1 September 1973, the SECV issued tender documentation in relation to the MMD Relocation works, entitled 'Morwell Open Cut - Diversion of Main Drain Specification No. 73/230 and Bill of Quantities'. This bill of quantities described the works to be undertaken on the MMD:

THE WORK

The work comprises the construction of concrete drains and structures, and open earth channels for the diversion and reconstruction of the Morwell Main Drain. The main items of which are

Section 1 - Reconstruction of Existing Main Drain

(a) Supply and laying of 36" diameter reinforced concrete pipe, including concrete pits and connection to existing inlet drains.

(b) Excavating, filling and grading existing earth channel.

Section 2 - Diversion of Main Drain

(a) Excavating, filling, shaping, grading and top soiling of open earth channel.

(b) Supply and laying of 42" diameter reinforced concrete pipe, including concrete pits and connection to existing inlet drains.

(c) Construction of associated reinforced concrete drop structures, and road culvert.

(d) Works associated with connection of drain to work done by others and the diversion of flows from the existing drain into the new diversion.[139]

157 The tender documentation shows SECV proceeding to carry out works to the MMD and implementing the proposed relocation. A 42" concrete pipe was to be installed, including concrete pits. The concrete pipe connected to inlet drains. These included drains from the Morwell township. Despite the recommendation of Golder, Brawner and Associates Pty Ltd, lining of the MMD is not included in the specifications.

158 The tender documentation provided the following information:

SITE INFORMATION

The Morwell Main Drain drains stormwater from approximately 220 acres of the Morwell Township and approximately 580 acres of the [SECV] area bordering the Open Cut. In addition some washdown water (not exceeding 600 gpm is also discharged into the Main Drain).

Currently the Commission is pumping approximately 16 000 g.p.m. of artesian water from the Morwell Open Cut. The pumping of artesian water is to cease by 1st December, 1973, and after that date water will be pumped from the Open Cut only after heavy rain. The rate of pumping will not exceed 9000 g. p. m.

The material to be excavated in the channel of the existing main drain consists of water deposited silts and coal of an unknown thickness overlying silty clays and clayey sands.

The material to be excavated in the deviation consists of silty clays and clayey sands.

The Site is subject to regional settlement due to the development of the adjacent Morwell Open Cut. The Commission will provide Bench Marks with levels adjusted to the datum of the survey information shown on the Drawings.[140]

159 The site information given with the tender is compelling evidence that as at September 1973, the MMD drained stormwater from approximately 220 acres of the township of Morwell, and approximately 580 acres of the SECV area bordering the open cut. Washdown water was also discharged into the MMD. The site was subject to regional land settlement due to the adjacent open cut works.

160 On 25 October 1973, Divisional Engineer of CRB advised that the proposed crossing of the Morwell-Thorpdale Main Road was satisfactory.[141]

161 On 27 November 1973, the Chief Civil Engineer of SECV, wrote to the Secretary of CRB:

MORWELL MAIN DRAIN RECONSTRUCTION

The existing Morwell Main Drain will be severed by the open cut in December, 1974. Consequently the section of the main drain downstream of a point immediately east of the interconnecting railway is to be relocated just to the south of the future Morwell Bypass section of the Latrobe Valley Freeway. A set of drawings showing the location and details of the planned reconstruction were given to Mr. A. Noble, the Board's Acting Assistant Chief Road Design Engineer on 17th October, 1973.

At its closest point near the intersection with the Old Morwell-Thorpdale Road (the centre line of the Main Drain will be approximately 150 feet from the centre line of the proposed freeway - reference drawings: CRB - 45993A, SEC - C10/9/51), there will be approximately 25 feet between the toes of the respective batters.

The existing Midland Highway will be severed by the drain relocation. As this section of the Highway is to be closed in June 1974, a culvert has not been provided at the intersection. However the drawings and specification make it quite clear that the contractor shall not commence any work within the road easement before the road is closed.

Construction of the drain is scheduled to commence in December, 1973, and all works are to be completed by December, 1974.[142]

162 On 6 December 1973, the Chief Civil Engineer of SECV, wrote to the Secretary of the Morwell Waterworks Trust:

MORWELL MAIN DRAIN RECONSTRUCTION

The existing Morwell Main Drain will be severed by the Morwell Open Cut in December, 1974. Consequently the section of the main drain downstream of a point immediately east of the interconnecting railway is to be relocated just to the south of the future Morwell Bypass section of the Latrobe Valley Freeway. The alignment will intersect the existing water supply pipe to the Morwell Sewerage Authority's Treatment Works.

Enclosed is a Drawing No. C10/9/50A showing the alignment of the main drain in the vicinity of the water pipe and marked up to show the method proposed to support the pipe across the drain channel. For the design discharge in the drain the pipe will be above the flow level.

If this proposal is satisfactory to your Trust the Commission will arrange for its Contractor (J. Jeffrey and Sons) to do the installation. There should be no need to interrupt the water supply during construction.[143]

163 On 9 May 1974, the Chief Civil Engineer of SECV wrote to the City Engineer of the Shire of Morwell:

MORWELL MAIN DRAIN RECONSTRUCTION

Please find enclosed one copy each of drawings numbered C10/9/50B and C10/9/73.

These drawings show the modification to the alignment of the town drain outlet west of the 90 cm Interconnecting Railway as discussed by you and Mr. P. Harmen of the Commission.[144]

164 On 9 May 1974, the Chief Civil Engineer of SECV, wrote to the Secretary of the CRB:

MORWELL MAIN DRAIN RECONSTRUCTION

Further to my letter dated 27th November, 1973, please find enclosed one copy each of drawings numbered C10/9/50B and C10/9/73.

These drawings show a modification to the alignment of the town drain outlet west of the 90 cm Interconnecting Railway.[145]

165 On 10 June 1976, the Chief Civil Engineer of SECV wrote to Garlick and Stewart, solicitors for the Morwell Sewerage Authority ('MSA'):

MORWELL SEWERAGE AUTHORITY

Receipt of your letter dated 4 June 1976 and attached drawings is acknowledged.

Subject to the excavation for the irrigation pipeline being backfilled and compacted (as specified below) and satisfactory replacement of grass sods, this Commission approves of your proposed pipeline crossing of the Morwell main drain. It will be necessary for you to ensure continuity of operation of the drain during construction of the pipeline.

Backfill material is to be placed in approximately 200mm layers and each layer compacted to achieve a dry density of not less than 95% of the standard maximum dry density as specified in test 11 of AS A89 - Testing Soils for Engineering Purposes.[146]

Conclusion as to the status of the MMD no later than 1975 at or following the partial relocation and significant redevelopment of the MMD

166 The evidence relating to the partial relocation of the MMD, the construction of the low flow pipe and other works completed overwhelmingly points to the conclusion that the MMD was an SECV drain in and prior to 1975, and not a council drain vested in, or under the management and control of, the Shire of Morwell. This is almost inevitably the case despite the evidence as to the volume of drainage water entering the MMD from the southern part of the township of Morwell.

(1) SECV had management and control of the MMD as an integral part of the mine;

(2) SECV designed the MMD relocation, using its in-house engineering staff assisted by consulting geotechnical engineers;

(3) SECV consulted with interested authorities as necessary during the design phase, including with the Shire of Morwell, CRB, LVW&SB, and MSA;

(4) the Shire Engineer of the Shire of Morwell advised SECV engineers of the expected drainage flow from the township of Morwell and catchment areas outside the HPP land;

(5) the Shire Engineer's calculations were checked by SECV engineering staff, who also calculated and assessed all other flows into the MMD;

(6) SECV alone tendered the MMD relocation works, including the construction of the low flow pipe;

(7) SECV paid the entire cost of the MMD relocation works, including the cost of installation of the low flow pipe;

(8) SECV was well aware that it was accepting drainage flows from the township of Morwell into the MMD, as its senior engineers determined that public drainage from the township of Morwell should be accepted into the MMD;

(9) SECV agreed to accept drainage inputs from the township of Morwell and other land outside the HPP land as a matter of benevolence without objection or concern, other than to suggest that the Shire of Morwell should bear the treatment cost of polluted flows from the township of Morwell, or alternatively, that the Shire of Morwell should treat the drainage before it entered the MMD;

(10) while consulted as to drainage catchment areas outside the HPP land, the Shire of Morwell had no control over the MMD, the MMD relocation design models, the tender or the resulting contract for the MMD relocation works;

(11) there is nothing to suggest that the Shire of Morwell had any operational control or involvement with the MMD, or that it was involved in maintenance of the MMD in any way apart from the removal of litter from connecting township drains; and

(12) there is no evidence to suggest that the Shire of Morwell incurred any cost or expense in relation to the initial construction, subsequent relocation or maintenance of the MMD.

168 On the evidence, I accept that the principal reason for the SECV to partially relocate the MMD was due to the progress of open cut mining operations and the movement of overburden. I accept that there was a continuing need on the part of SECV for the MMD to cut off flows of drainage from higher land within the MMD's catchment area and to receive other water from the open cut of the mine.

(1) the relocation of the MMD was designed to accommodate coal mining operations within the mine which were expected to intersect with the original MMD;

(2) SECV did assess and calculate the capacity needed to ensure that there was sufficient capacity in the MMD to receive drainage water from the southern part of the township of Morwell and all other catchments into the MMD. This was part of the process whereby SECV decided to accept this drainage water;

(3) SECV was well aware of, and accepted, the interconnection of council drains into the MMD;

(4) SECV engineers were well informed about CRB's planned construction of the Morwell Bypass. The volume of drainage water likely to be generated by the proposed Morwell Bypass into the MMD was considered by SECV when the capacity of the relocated MMD was determined;

(5) the capacity of the relocated MMD was determined so that it would meet all surface water runoff requirements; and

(6) the relocated MMD and the low flow pipe were designed to provide a safe means of channelling water across the HPP land above the northern batters. Installation of a concrete pipe would significantly reduce seepage and erosion. Lining of part of the relocated MMD was recommended by the consulting geotechnical engineers, but this did not occur.

170 There is a strong note of unreality about HPP's case that the MMD became a council drain at this time. SECV was a large and successful public authority providing electricity, briquettes and other products to Victoria. It had extensive statutory powers, and operated major industrial plants at Morwell and elsewhere. It had substantial cash flow and financial resources arising from its activities in Victoria. It was perfectly comfortable to accept drainage water from the southern part of the township of Morwell and from the Morwell Bypass into the MMD. It was well informed as to the pros and cons of doing so by its engineering staff. It had the benefit of expert geotechnical advice. It did not seek cost recovery from the Shire of Morwell for the receipt of drainage water, but did seek that the Shire of Morwell bear the treatment costs associated with polluted water from the township of Morwell, or alternatively treat the drainage water from the township of Morwell before it entered the MMD. The Shire of Morwell subsequently installed gross pollutant traps ('GPT's') to remove litter and other solid material from the drainage water flowing from the township of Morwell into the MMD.

171 If the MMD was a council drain, no-one knew it at the time. All concerned in the management and control of the MMD would have been surprised, if not astonished, by such a revelation. SECV expended a large sum by the standards of the day in relocating part of the MMD, and by installing the low flow pipe. SECV management and staff would have been amazed if they had known at the time that they were improving the asset of another body by spending a substantial sum on an asset that was the property and responsibility of the Shire of Morwell. The Shire of Morwell was entirely ignorant of its supposed responsibility for the management and control of the MMD, or that the MMD was supposedly vested in it. SECV was equally ignorant of the true position if HPP's submissions are correct.

172 The evidence that the MMD was an SECV drain prior to 1975, both before and after partial relocation and significant redevelopment, is compelling. I find that the features that predominate are those that point to the MMD being a private drain. I reject HPP's claim that it became a public drain vested in the Shire of Morwell in or around 1975. In summary:

(1) the SECV was governed by the State Electricity Act 1920 (Vic). The mine and MMD were designed and constructed by SECV under the powers conferred on it by this and subsequent legislation;

(2) the MMD was located on SECV land and was an integral part of SECV's operating mine;

(3) SECV engineers and consultants designed the original and relocated MMD;

(4) the MMD was constructed by the SECV as a cutoff drain for the mine;

(5) the MMD was constructed, relocated and maintained by SECV at considerable expense;

(6) the MMD was under the management and control of SECV;

(7) the MMD was not under the management and control of the Shire of Morwell at any time;

(8) while SECV consulted with officers of the Shire of Morwell and CRB about the relocation of the MMD, there is nothing to suggest that the Shire of Morwell had any role in the relocation of the MMD, or in its management or control;

(9) SECV agreed to receive public drainage water from the township of Morwell and the Morwell Bypass into its drain. The Shire of Morwell accepted responsibility for gross pollutant control over drainage from the township of Morwell;

(10) everyone involved at the time with the original MMD and in the relocation of the MMD recognised the MMD as an SECV, and not a council, drain;

(11) the Shire of Morwell did not claim that the MMD was a council drain, or that the MMD was vested in it; and

(12) no body or person at the time suggested that the MMD was a council drain.

173 Importantly, SECV consciously agreed to accept public drainage from the township of Morwell into the MMD. It was no accident or oversight. The receipt of public drainage into the MMD was carefully considered at the highest level of SECV's engineering staff. It took place with the informed concurrence of SECV officers.

174 The agreement by SECV to accept public drainage water from the township of Morwell occurred no later than 1975, when SECV agreed to design and reconstruct the MMD to accommodate all drainage flows including drainage flows from the township of Morwell and from the Morwell Bypass. The MMD was reconstructed and the low flow pipe installed on the basis that the MMD would have the capacity to drain stormwater, including that generated from the township of Morwell.

175 The fact that along much of the MMD, most of the flow may have come from the township of Morwell does not countermand or outweigh all of the other factors which point to the status of the MMD as an SECV drain. SECV gave its consent to the receipt of drainage water from council drains, but it was never contemplated that ownership or control of the MMD would pass to the Shire of Morwell as a consequence. Indeed, the giving of consent by SECV to the receipt of public stormwater into the MMD confirms the status of the MMD as a SECV drain. It would be perverse if, by giving its consent to the receipt of public discharge water into the MMD, ownership, management and control of the MMD passed to the Shire of Morwell. The receipt by SECV of drainage water from the Morwell township into the MMD does not, in my opinion, have the effect in law of vesting ownership, management or control of the MMD in the Shire of Morwell.

176 Between approximately 1980 and 1985, the Road Construction Authority ('RCA') constructed drainage works in Morwell, associated with the Morwell Bypass. It did so after consultation with SECV and the Shire of Morwell.[147]

177 In its design work for the Morwell Bypass at this time, RCA intended that all existing outlets from the built up area of the southern part of Morwell and the road drainage system be connected so as to discharge into the MMD.[148]

178 In or about the mid-1980s, Morwell Bypass works were performed including drainage infrastructure through which water from the Princes Freeway surface flows into the MMD. The works constructed at this time included the construction of the pipes or culverts into the MMD labelled 'S', 'T', 'U', 'V', "W', 'X', 'Y' and 'Z' on Schedule 3.[149]

179 On 24 December 1981, the divisional engineer of the CRB (Traralgon Division) wrote to the Secretary of SECV in relation to the planned Morwell Bypass:

PRINCES FREEWAY - MORWELL SECTION

I refer to the Secretary's letter to the Commission dated 23rd February 1981 forwarding plans for the adopted route of the above freeway.

Detailed design has now commenced with a view to construction commencing in about three years.

Board's officers have maintained a close liaison with the Commission through the Engineering Services Department Co-ordination Engineer, Mr A.H. Miles and the freeway has been designed to have a minimum affect [sic] on the Commissions services.

Various plans of the Commissions assets were supplied during and before 1972 but there have been a number of changes and additions to these services since that time. It would be desirable that current plans are provided for all services.

...

4. Engineering Services

The required information has been generally discussed with Mr A.H. Miles.

* Plans of existing drains crossing or adjacent to the proposed freeway.

* Plans of any proposed or likely future alteration or additions to the services within the band of interest.

* Access requirements for operation and maintenance of existing services.

* The conditions upon which the Board could discharge drainage into the Main Drain which is adjacent to the top of the open cut.

At this stage the existing features are being established through survey and information from authorities.

A preliminary design will be prepared after which discussions can then commence on the methods and responsibilities for the provision of all services.

It is requested that the required information be made available by mid February 1982.[150]

180 It is plain that in 1981, the CRB considered the MMD to be under the management and control of the SECV - as indeed it was.

181 On 26 January 1982, the Manager of Engineering Services at SECV, wrote a departmental memorandum to the Chief Engineer of Planning at SECV:

PRINCES FREEWAY: MORWELL SECTION

FINAL DESIGN

In response to your memorandum of 6 January 1982 the following comments are offered with regard to matters directly within the ambit of this department's activities and which we consider may be relevant to final design by the County Roads Board.

The location of a number of the Commission's assets within the band of interest referred to by the CRB is shown on the two topographical maps, Maryvale 'C' and Morwell 'D', scale 1:5000, composite copy which is enclosed.

The location of underground services within this band of interest is shown on a separate series of thirteen drawings on a scale of 50 feet to 1 inch. The numbering of these drawings and the areas covered by them is as marked on the above two topographical drawings. One copy of each of these 50 feet to 1 inch drawings is enclosed. The information on some of these drawings may not necessarily be up to date and it is not desirable that they be forwarded to the CRB (Traralgon Division) without qualification. Also enclosed is a copy of Drawing No LV10/3-1/16A showing catchment areas of relevant township drainage into the main drain.

...

With regard to the specific points raised by the CRB in their letter under the heading "Engineering Services, comments are as under.

1. PLANS OF EXISTING DRAINS

Location of drains is as shown on plans referred to above. More detailed information of specific locations (such as reduced levels) will be made available on request where possible.

...

4. CONDITIONS UPON WHICH THE BOARD COULD DISCHARGE DRAINAGE INTO THE MAIN DRAIN

We are not aware of any conditions other than those which may be required by Fuel Department for inflow drainage to be connected directly into the pipe drain below the bed of the open earth main drain.[151]

182 This memorandum raises the issue of the 'conditions upon which the CRB could discharge drainage into the main drain'.[152] The memorandum proceeds on the basis that the MMD is under the management and control of SECV, and that SECV has the right to impose conditions on CRB if the connection of drainage from the Morwell Bypass is to be allowed.

183 On 12 July 1982, the Divisional Engineer of CRB (Traralgon Division) wrote to the Manager Engineering Services at SECV, in relation to drainage arrangements:

PRINCES FREEWAY - MORWELL SECTION

CLEARANCE FROM FREEWAY EMBANKMENT

TO OPEN DRAIN

As you are aware the Board is about to commence detailed design of the Princes Freeway Morwell Section. To assist the design clarification of any clearance requirements from the toe of Freeway batter to main stormwater drain in the vicinity of Wallace Street, Chn. 148200 - 148800, (see attached plan #247265) is required.

The Board wishes to keep any clearance to a minimum so that the Freeway can be located as far as practical from the houses in Wallace Street.

Your early advice in this matter would be appreciated.[153]

184 On 5 October 1982, the Acting Divisional Engineer of CRB (Traralgon Division), wrote to the Manager Engineering Services at SECV:

PRINCES FREEWAY (MORWELL SECTION)

CLEARANCE FROM FREEWAY TO MAIN DRAIN

Further to the Divisional Engineer's letter dated 24th September 1982, attached are drawings as follows, showing the location of the Board's proposed freeway in the vicinity of your Commission's open cut drain.

Drawing No. P 265720 - freeway alignment

Drawing No. P 265717 - cross sections

The alignment drawing shows the freeway at an approximate offset of 3.0m from the top of the drain. The cross sections show two alignments at 3.0m and 6.0m respectively from the edge of the drain, and at two separate locations, chn. 148320m and chn. 148680m. In addition the location of the existing fence near the drain is shown.

As advised in my earlier letter, the Board is committed to keep the freeway as far from the houses in Wallace Street as practical, which would require a minimum clearance to the drain of 3 metres.[154]

185 On 22 November 1982, the Manager of Engineering Services at SECV wrote to the Divisional Engineer of CRB (Traralgon Division):

PRINCES FREEWAY: MORWELL SECTION

CLEARANCE FOR FREEWAY TO MAIN DRAIN

In reply to your letter dated 5 October 1982 I wish to advise that the alignment as shown on your drawings P265720 and P265717 with the freeway ROW boundary at a nominal 3.0 m from the top of the drain is acceptable to the Commission. The nominal 3.0 m clearance fixes the boundary at approximately 4.2 m from the existing fence at chainage 148 320 and 6.8 m from the fence at chainage 148 680.[155]

186 On 1 June 1983, the Manager of Planning Investigations at SECV, wrote a departmental memorandum to the Acting Manager of Engineering Services at SECV:

MORWELL BYPASS

DRIFFIELD ROAD AREA

I refer to your memorandum of 13 May 1983 and the attached draft letter to the Traralgon Division Engineer of the CRB.

I would suggest that the following points be included in your reply to the CRB:

• The main drain acts principally as a cut-off to run-off water which would otherwise enter the Morwell Open Cut.

• A diversion of the drain carried out in the mid-1970s was designed for a 1-in-20 years flood with a depth of flow of around 1.0 m. The [SECV] would be concerned if additional run-off were to be discharged to this drain. Also the CRB works should not obstruct the flows in the main drain, nor discharge to the drain, without approval from the [SECV].

Further, the quality of any discharge to the drain should be such that current (if any) or future licencing requirements for dischar [sic] into the Morwell River could be complied with. [156]

187 A number of significant points are made in this memorandum:

(1) the principal function of the MMD is as a cut off to run-off water which would otherwise enter the Morwell Open Cut;

(2) in the mid-1970s, the MMD diversion was designed for a 1-in-20 year flood with a depth of flow of around 1.0m;

(3) approval would be required from SECV for any CRB discharge to the MMD, or if CRB works obstructed flows in the MMD; and

(4) the quality of any discharge by CRB to the MMD should be such as to comply with current and future licencing requirements for discharge into the Morwell River.

188 On 8 June 1983, the Acting Manager of Engineering Services at SECV wrote to the Divisional Engineer of CRB (Traralgon Division):

MORWELL BYPASS

DRIFFIELD ROAD ACCESS

General discussion between your Mr David Anderson and Mr Barry Ross of this Department have raised the matter of the potential water level in the Commission's Main Drain and its relationship with the road surface of the proposed Morwell Bypass.

Historically this drain, which pre-dated initial excavation of the Morwell Open Cut in the early 1950s, was designed to protect the workings from surface run-off, particularly from the southern part of the town area.

Although some changes in location have been made to provide for the western extension of the Open Cut, the design role of the Main Drain is still applicable. Some emergency flows will originate from [SECV] sources, however, these will be minor and irregular in nature and are likely to occur at times when the drain is not fully charged with run-off water.

As an indication of design capacity, a 1974 diversion of part of this drain was based on a 1 in 20 year flood, and the Commission would be concerned at any aggravation of the flow which would prevent the drain from meeting its prime design purpose.

Plans indicating catchment areas have already been supplied to Mr Anderson, and while out of date, may assist in your planning.[157]

(1) the MMD was designed to protect the open cut from surface run-off, particularly from the southern part of the town area;

(2) despite the changes, the design role of the MMD is still applicable; and

(3) SECV would be concerned at any aggravation of the flow which would prevent the MMD from meeting its prime design purpose.

190 On 21 November 1983, the Acting Divisional Engineer of RCA (Traralgon office) wrote to the Manager-Engineering Services at the Shire of Morwell:

PRINCES FREEWAY - MORWELL SECTION

PROVISION FOR DRAINAGE

I refer to a meeting which was held at the Shire Office on Monday, 7th November 1983 between Messrs Thornhill and Whelan of the Shire and Messrs Anderson, Gidley and Vaille of the RCA.

It is understood that the Shire's Engineering Services Department is undertaking a review of drainage in the town of Morwell between the proposed freeway reserve and the Commercial Road area.

The design of the freeway, which is well advanced, needs to take into account existing drainage facilities and, if appropriate, future proposals. It would therefore be appreciated if you could advise me of details of proposed or existing drainage outlets from the town system which will affect or be affected by the freeway construction.

Details required are:

- the location of outlets

- estimated discharge and return period

- outlet levels

- pipe or culvert sizes

To avoid delays to the freeway design program, it would be necessary to have this information available by the end of December 1983.[158]

191 On 30 November 1983, the Manager-Engineering Services at the Shire of Morwell responded, providing a plan showing the location of drainage outlets affecting the Princes Freeway Morwell section.[159]

192 These letters shown RCA obtaining a drainage plan as to drainage outlets from the town system that may be affected by freeway works. Again, there is no suggestion that the Shire of Morwell is responsible for the MMD itself.

193 On 18 April 1984, the Acting Divisional Engineer of RCA (Traralgon office) wrote to the Manager-Engineering Services at the Shire of Morwell, in response to the letter dated 30 November 1983:

PRINCES FREEWAY - MORWELL SECTION

PROVISION FOR CROSS DRAINAGE

I refer to your letter dated 30th November 1983 (ref. 510642/GT:EP) concerning proposed drainage outlets from the southern boundary of Morwell.

The freeway drainage design has progressed to the point where the overall requirements have been evaluated.

It is intended that all existing outlets from the built up area of Morwell will be connected to the road drainage system for ultimate discharge into the main drain south of the freeway.

The new discharge point which you tentatively proposed at Hazelwood Road has also been considered. It would be more economical to allow for this discharge by providing greater capacity at the Keegan Street reserve outlet. It is understood from discussions with Mr G Thornhill of your office that the drainage scheme which has been developed so far for the southern section of Morwell is somewhat conceptual and its exact form will depend on the actual development which takes place in the next 10 to 15 years. Given this uncertainty, it is proposed that the best approach would be to provide a crossing under the freeway at the existing Keegan Street reserve drain of sufficient capacity to cater also for the anticipated discharge at Hazelwood Street and omit any drainage crossing at Hazelwood Street.

It should also be noted that the discharge capacity provided across the freeway is based on a one in 50 year frequency storm. The anticipated pipe sizes (subject to final checking of design) and capacities at the discharge points are, therefore, as follows:-

Location Design Discharge Pipe Diameter (50 yr return period)

Near SEC Gate No. 2 2.74 cumec 1350mm

Near Julia Street 3.4 cumec 1350mm

Middle of Wallace Street 4.8 cumec 1350mm

Keegan Street Reserve 4.9 cumec 1650mm

This information is supplied to assist the Shire in finalizing its drainage proposals. When sufficient details of the freeway drainage design have been developed, the agreement of the Shire and the [SECV] to the proposals will be obtained.[160]

194 The letter advises of the design discharges and anticipated pipe sizes if drainage for the southern section of the township of Morwell is to be connected across the freeway to the MMD.

195 On 25 July 1984, the Divisional Engineer of RCA (Traralgon office) wrote again to the Manager-Engineering Services at the Shire of Morwell:

PRINCES FREEWAY - MORWELL SECTION

PROVISION FOR DRAINAGE

Further to my letter dated 18 April 1984, detailed design of the drainage works associated with the above project have been prepared for the section east of Morwell Thorpdale Road to Julia Street.

Attached are drawing no. P265890 - 92 which depict the location and site of drainage pipes along with predicted flow rates. Also attached is drawing no. P265889 which depicts details of the drainage works south of Wallace Street and in particular the endwall arrangement.

Could you forward notice of the Councils' agreement, or otherwise, to these proposals so that detailed design can proceed? This matter has also been referred to the SECV for their agreement.[161]

196 On 25 July 1984, the Divisional Engineer of RCA (Traralgon office) wrote to the Manager Engineering Services, SECV:

PRINCES FREEWAY - MORWELL SECTION

DRAINAGE OUTLETS INTO SEC V MAIN DRAIN

Detailed design of the drainage works associated with the above project have been prepared for the section east of Morwell Thorpdale Road to Julia Street.

The drainage design generally only modifies the existing drainage system to allow for the freeway works and the slight increase in runoff due to the freeway pavement. The existing SEC main drain should easily cater for anticipated flows.

Attached are drawings Nos. P265890 - 92 which depict the location and size of the drainage pipes along with predicted flow rates. Also attached is drawing no. P265889 which depicts details of the drainage works south of Wallace Street and in particular the endwall arrangement.

Could you forward notice of the SECV's agreement, or otherwise, to these proposals to that detailed design can proceed? This mater has also been referred to the Shire of Morwell for their agreement.[162]

197 In this letter, RCA sought approval from SECV for its drainage design for the Morwell Bypass and outlets into the MMD.

198 On 14 August 1984, the Manager-Engineering at the Shire of Morwell advised RCA in response to the letter dated 25 July 1984 that the drainage detail had been checked, and in the absence of detailed calculations as to the pipe capacities, appeared to be satisfactory.[163]

199 On 15 October 1984, the Acting Manager of Design Engineering and Environment at SECV sent a memorandum to the Manager of Engineering Services Department at SECV, in relation to the RCA letter dated 25 July 1984:

Further to the letter from the Road Construction Authority dated 25 July 1984, a check of the capacity of the main drain indicates that it has sufficient capacity to cater for the additional run-off from the proposed freeway pavement.

It is important that all connections to the main drain low flow pipeline have an overflow capability to allow flows exceeding its design capacity to enter the main drain.[164]

200 SECV clearly considered itself responsible for the design and effective functioning of the MMD.

201 On 18 October 1984, the Divisional Engineer of RCA, wrote to the Principal Design Engineer of the Design Engineering and Environmental Department at SECV:

PRINCES FREEWAY - MORWELL SECTION

SEC MAIN DRAIN

I refer to telephone discussions (16th October 1984) between Mr T Martin, SECV and Mr B Van Every of this office regarding the aspects detailed below.

(a) SEC Main Drain Drop Structure Wingwalls

Detailed design of the drainage of the Princes Freeway - Morwell Section has indicated that drainage outlets are required into the [SECV] main drain in the proximity of two drop structures near Morwell Thorpdale Road interchange. (See attached locality plan No. 218589 and Plan A). It would be advantageous to break a hole in the wingwalls to provide outlets for the drainage pipes as this would remove the need for endwalls and erosion protection.

It is proposed to break into the centre of the wingwalls with the 375 mm dia and 900 mm dia pipe as shown in the attached sketch B. Is such an arrangement satisfactory to the Commission?

It is proposed to realign the main drain, (downstream of the last drop structure) under the Melbourne bound on-ramp. (See attached locality plan No. 218589 and Plan C.) The reason for the realignment is to reduce the skew of the crossing and thereby shorten the length of culvert required.

Is this realignment satisfactory to the Commission?

Flood information for the main drain in the vicinity of the Wallace Street drain (see attached locality plan No. 218589 and Plan D) was previously provided by the Commission's letter dated 13th May 1983 (your ref. BLR/301) Plan No. MS3-1-2/13. This plan gave flood information prior to 1962, but nothing more recently. Drainage design calculations show that these levels will result in tailwater effects causing flooding in the Wallace Street area and substantial modification is required to reduce the likelihood of flooding. Before proceeding to design and construct any major drainage works, could you please advise if any works have taken place since 1962 to make these flood levels invalid, or if any later flood level information is available?[165]

202 On 30 October 1984, the Acting Manager of Engineering Services at SECV sent a letter to the Divisional Engineer of RCA (Traralgon office):

PRINCES FREEWAY: MORWELL BY PASS/RCA DRAINAGE OUTLETS INTO SECV MAIN DRAIN

Further to receiving a letter dated 15 October 1984, from the Acting Manager, Design Engineering and Environment, referring to a RCA letter dated 25 July 1984, on the subject of RCA drainage outlets into SECV Main Drain, the following comments are made.

A capacity check indicated that the main drain has sufficient capacity to cater for additional run-off from the proposed freeway pavement. However, it is important that all connections to the main drain low flow pipeline have an overflow capability to allow flow exceeding its' design capacity to enter the main drain open grassed channel.

Please note that one set of main drain design drawings (Drawing Nos C10/9/47 to 72 inclusive) was delivered to Mr B Van Every of your division on 26 October 1984. Since the abovementioned design drawings were produced in 1973, care should be taken with the extraction of data as this area is subject to earth movement.[166]

203 The correspondence refers to the MMD as the SECV Main Drain, indicating the understanding of the engineering staff at the time.

204 On 7 December 1984, the Acting Manager of Design Engineering and Environment at SECV sent a letter to RCA (Traralgon office):

PRINCES FREEWAY: MORWELL SECTION

SECV MAIN DRAINS

With reference to your letter of 18 October 1984 and the recent telephone discussion between your Mr B Van Every and our Mr T Mantyvirta regarding your proposed modifications to the SECV main drain, we wish to advise you of the following:

a. SECV Main Drain Drop Structure Wing Walls

Your proposal to connect the freeway drainage pipes to the drop structure wing walls is unacceptable as it requires demolition of a large portion of the wing wall. A more acceptable method is to connect the pipes to the drop structure side walls and discharge onto the concrete apron.

This Commission has no objection to the proposed drain deviation provided that the flow capacities and characteristics are maintained.

The main drain was reconstructed in 1974 and this work included a 2 km diversion, a low flow pipeline and regrading of the original drain. (The drawings of the main drain reconstruction are available upon request.)

These works affected the channel geometry so that the 1962 flood levels no longer apply. No subsequent flood level information is available from the Commission.[167]

205 On 17 December 1984, the Divisional Engineer of RCA (Traralgon office) sent a letter to the Manager of Engineering Services at the Shire of Morwell:

PRINCES FREEWAY - MORWELL SECTION

WALLACE STREET MAIN DRAIN

I refer to discussions between Mr Van Every and yourself on site on 12th December 1984 regarding the Wallace Street main drain.

Theoretical calculations show that localised flooding will occur in the vicinity of pit "H" (see attached locality plan), if the existing pipe is not up-graded.

It is proposed to provide sufficient water-way under the freeway carriageways (1.8 dia pipe), however, to remove the threat of local flooding a 1.5 m dia. pipe should be laid parallel to the existing pipe north of the freeway reserve.[168]

206 On 3 May 1985, the Chief Civil Engineer of SECV responded to RCA (Traralgon office):

PRINCES FREEWAY: MORWELL SECTION

CULVERT CROSSINGS OF SECV MAIN DRAIN

In response to your letter of 1 April 1985 regarding the proposed re-alignment and culvert crossings of the SECV main drain, I wish to advise you that this Commission has no objection to the proposed works subject to the following:

1. The 225 mm diameter slotted PVC pipe which exists below the apron of the existing drop structure, upstream of the proposed culvert crossing 'B' will need to discharge onto the apron of the proposed drop structure (refer SECV Drawings Nos C10/9/51A and C10/9/61D of which you have copies).
2. Consideration should also be given to the following points during detailed design:
   • The compaction standard for fill embankments.
   • The extent, depth and size of rock beaching.
   • Topsoil and grassing for bank protection.
   • Connection of new structures to existing structures.

Would you please submit the detailed designs of the proposed crossings incorporating the requirements above to this Commission for comment and final approval.[169]

207 In this letter, SECV agrees to the construction by RCA of re-alignment and culvert crossings to the MMD. The works proposed by RCA are agreed by SECV. Detailed designs of proposed crossings are requested by SECV from RCA.

208 On 24 March 1986, the Supervising Engineer of RCA (Traralgon office) wrote to the Manager of Area Administration at SECV:

PRINCES FREEWAY - MORWELL

CONTRACT NO 1512 HGN 9/719

TREATMENT OF EXCESS MATERIAL

Enclosed for your information is a copy of plan showing the general layout and cross section of the proposed realigned [SECV] main drain, east of Morwell-Thorpdale Road intersection in Morwell.

As discussed today with your Mr Flemingham it is intended to spread excess material from the realigned drain excavation on the southern side of the drain to form an extended levee bank. The quantity of the excess material from the drain excavation is estimated to be 1500 cubic metres.

As drain excavation is scheduled to commence soon after Easter 1986, your early approval of this action would be appreciated.[170]

Conclusion as to the status of the MMD prior to 1985

209 Over the period of the design and construction of the Morwell Bypass, SECV exercised management and control over the MMD. Key findings are:

(1) SECV was the owner, manager and controller of the MMD;

(2) other authorities recognised and accepted SECV's position as manager and controller of the MMD;

(3) SECV engineers regarded the principal function of the MMD as a cut-off to prevent the flow of run-off water into the mine pit;

(4) CRB and later RCA sought approval from SECV for the design and connection of drains from the Morwell Bypass and from the southern part of the township of Morwell directly into the MMD;

(5) RCA liaised with the Shire of Morwell to obtain engineering detail about the pipes and drainage flows from the southern part of the Morwell township;

(6) RCA corresponded with SECV to obtain approval for the works required to connect the drainage system of the Morwell Bypass and the Shire's drains for the southern part of the Morwell township into the MMD;

(7) SECV was satisfied that the MMD would continue to meet its design requirements after the new infrastructure works were completed by RCA;

(8) SECV gave consent to the works and infrastructure connections to the MMD proposed by CRB and RCA including those which carried surface run-off from the southern part of the Morwell township into the MMD; and

(9) the works performed by RCA put the MMD drainage infrastructure, pipes and culverts largely into their present configuration.

210 I accept that drainage water from the southern part of the township of Morwell flowed into the MMD in accordance with the evidence of Mr Kovasevic and Dr McCowan over the period up to 1985. However, as I have said, this does not bring with it the consequence that the MMD became wholly or partly a council drain. It remained a major industrial drain under the management and control of SECV. SECV had previously agreed to accept public drainage water into the MMD, on the basis that the Shire of Morwell was responsible for the removal of pollutants. This arrangement continued up to and past 1985.

211 I find that the features that predominate are those that point to a private drain. The MMD remained an SECV drain in and prior to 1985, when the Morwell Bypass project was completed. There was no change in the status of the MMD. I reject HPP's claim that it became a council drain.

212 The drainage infrastructure installed by RCA included the construction of pipes and culverts into the MMD. This work was approved by SECV and carried out by RCA at its own cost. The Shire of Morwell provided information, but otherwise had little or no involvement in the design or infrastructure works.

(2) the principal role of the MMD, as accepted in the SECV memorandum of 1 June 1983, was as a cut-off to run-off water which would otherwise enter the mine's open-cut;

(3) SECV had responsibility for the design and functioning of the MMD;

(4) approval was required from SECV for any discharge of water to the MMD;

(5) at all times, RCA corresponded with SECV concerning the proposed drainage infrastructure and works - SECV was undoubtedly recognised as the authority with management and control of the MMD;

(6) it was recognised that SECV could impose conditions on the discharge of drainage into the MMD; and

(7) it was not suggested by anyone that the Shire of Morwell had any legal responsibility for the operation of the MMD.

214 Mr Naismith was employed by the Shire of Morwell as the Shire Engineer in 1989. His evidence is that between 1989 and 1995, the Shire of Morwell did not maintain the MMD and was not asked to maintain the MMD. Over this period, there was never any assertion or suggestion by the mine owner that the MMD was a public drain vested in the Shire of Morwell. There were no complaints by the mine owner about the MMD carrying stormwater run-off from parts of the Morwell township. There was no suggestion by the mine owner that it was entitled to constrain or reject storm water run-off from parts of the Morwell township.[171] Mr Naismith's evidence in this respect is entirely consistent with the correspondence that I have set out above. It was not challenged in cross-examination.

215 Over the period from 1989 until 1995, Mr Naismith said that SECV had a municipal fund from which it distributed funds to the councils in the Latrobe Valley for the maintenance of local roads and associated roads outside of mine boundaries in recognition of the impact of the mines on local communities.[172]

216 I accept Mr Naismith's evidence that when he was the Shire Engineer of the Shire of Morwell, it was not suggested that the MMD was a council drain, or that it had vested in the Shire of Morwell. There is no hint in any contemporaneous document that the MMD was vested in the Shire of Morwell, or under the management or control of any body other than SECV. The claims made now by HPP that the MMD was, at that time, vested in the Shire of Morwell as a public drain are dependent on HPP's legal contentions and are asserted retrospectively. They would have seemed strange, if not fanciful, at the time.

217 Before going further, it is convenient to deal with a side issue which arose concerning a 1979 Crown Grant to SECV.

218 On 24 April 1979, Crown Grant Volume 9344 Folio 124 granted to SECV a parcel of land adjacent to the Morwell River[173] at the point where the water from the MMD enters the Morwell River. The land is outside the boundaries of the HPP land. This involved parts of the drain outside the area affected by mining. The grant was made subject to conditions including:

... the right of the Municipal or other Authority or body for the time being concerned with the control and management of public or municipal watercourses or drains in the vicinity of the land hereby granted and its officers agents servants contractors and workmen to cut make and construct and from time to time use maintain repair cleanse and enlarge a drain for the purpose of conveying surface and other waters from any adjoining or adjacent land upon over under and along that potion of the land hereby granted shown by red color in the said map.[174]

219 There were no similar conditions in the grant to SECV in 1961.[175]

220 In July 1996, prior to the execution of the agreements giving effect to privatisation, the solicitors acting for HPC noted the condition in the Crown Grant and suggested in a letter to HPC that it might assist in convincing the Shire of Morwell that the current maintenance of the MMD was the Shire's responsibility rather than that of HPC.[176]

221 Nothing came of this suggestion. The Crown Grant to HPC does not include any condition in the nature of the condition included in the 1979 Crown Grant to SECV.[177]

(a) from 1948 until about 1994, the HPP land was either unalienated Crown land or otherwise vested in the SECV;[178]

(b) from January 1994 to January 1995, the HPP land vested in Generation Victoria by operation of the EI Act and an allocation statement dated 23 December 1993;[179]

(c) from January 1995 to September 1996, the HPP land vested in HPC, which was wholly owned by the State of Victoria;[180 ]and

(d) in about September 1996, the HPP land and all the shares in HPC were acquired by HPP.[181]

223 The process for the legal transmission of property rights in the MMD was:

(1) the MMD was included in the allocation statement dated 23 December 1993 allocating the HPP land to Generation Victoria;

(2) the MMD was then included in an allocation statement dated 31 January 1995 whereby HPC became the owner of the HPP land; and

(3) by operation of s 153D of the EI Act, the assets vested in HPC as private assets. Subsequently they became the private assets of HPP under the share sale and assets sale agreements.

224 The purpose of the EI Act was to restructure the electricity supply industry. Generation Victoria was established as one of three public authorities to represent the Crown under Division 1 of Part 2 of the EI Act.

225 Part 5 of the EI Act provided for the transfer of SECV property. Section 62 required SECV to prepare an allocation statement, allocating the property, rights and liabilities of SECV to Generation Victoria and other entities. When the allocation statement was approved by the Treasurer and Minister and on the appointed day, all property and rights of SECV, wherever located, and allocated under an allocation statement to an electricity corporation, vested in that corporation.[182]

226 The first allocation statement[183]provides:

This is the allocation statement required under section 62(1) of the Electricity Industry Act 1993...

It is intended that on and from the appointed day the electricity corporations and [SECV] companies will perform the following functions:

• Brown Coal Power Stations and Open Mines
  • ...
  • Hazelwood Power Station
  • Morwell Open Cut
  • ...

The purpose of this allocation statement is to allocate the property, rights and liabilities of [SECV] associated with the performance of these functions to the respective electricity corporations and [SECV] companies that will perform these functions on and from the appointed day.

Subject to the above allocations, all property, rights and liabilities of [SECV] that were acquired or incurred in the performance of a particular function before the appointed day are allocated to the electricity corporation that performs that function on and from the appointed day_._

227 The MMD was property of the SECV which was allocated under the first allocation statement. It was acquired in the performance of the Morwell Open Cut function, and accordingly was allocated to and vested in Generation Victoria on and from the appointed day.[184]

228 The Electricity Industry (Further Amendment) Act 1994 (Vic) amended the EI Act. The purpose of the amending Act was to make provision for the further restructuring of the electricity industry. The amending act abolished Generation Victoria,[185] and inserted a new Part 11A into the EI Act concerning the transfer of property and staff of Generation Victoria.[186]

229 The new Part 11A s 153B provided that Generation Victoria was required to prepare an allocation statement allocating the property, rights and liabilities of Generation Victoria to or between the generation companies, SECV and any other person(s) nominated in writing by the Minister.

230 A second allocation statement[187] was prepared and signed by the Treasurer and Minister:

1.3 Relevant Date

... [T]his statement relates to the property, rights and liabilities of Generation Victoria as at 31 January 1995...

2.1 Nominated Real Property Interests

The property and rights of Generation Victoria in, and the liabilities of Generation Victoria in relation to, the Real Property Interests pertaining to the Real Property described in Annexure "C": (a) where the Annexure refers to generation companies, SEC.... are allocated to the generation companies, SEC, ... as set out in that Annexure on and with effect from the relevant date...

231 Relevant definitions in the allocation statement are:

"Hazelwood Power" means Hazelwood Power Corporation Pty Ltd (ACN 065 381 204).

"Real Property" includes land, buildings and other structures permanently affixed to and forming part of land and land covered with water.

"Real Property Interest" includes all estates, interests, rights, easements, privileges or benefits in respect or relating to Real Property including, without limitation, rights arising under any freehold interest, leases, licences, mortgages, covenants, interests protected by caveat, agreements to grant easements and other agreements, arrangements, understandings or undertakings relating to the ownership of, access to or any kind of interest in Real Property owned or enjoyed by Generation Victoria or to which Generation Victoria is a party.

The Real Property within the boundary shown in bold on the cadastral base map prepared by Fisher Stewart Pty Ltd dated 18 January 1995, numbered DRG 122C and entitled "Annexure C3" ...

233 The Cadastral base map at Annexure C3 shows the HPP land, including the land on which the MMD is located, as 'Real Property to be Allocated to Hazelwood Power'.

234 On and from 31 January 1995, the land on which the MMD is located became an asset of HPC. On 12 December 1995, the HPP land was the subject of a Crown Grant to HPC. There is no reference in the grant to any encumbrance concerning the MMD.

235 On 14 May 1996 a mining licence was issued to HPC under s 47A of the EI Act.[188]

236 In or about September 1996, the whole of the shares in HPC and the HPP land were acquired by HPP. Since that date, on the face of the existing titles, the MMD has been owned by HPP.[189]

237 Contemporaneously with the transfer of shares, the earlier mining licence was revoked and a new mining licence granted to HPC under the EI Act ('the new mining licence').[190]

238 In its submissions, HPP referred to the National Power Consortium Asset Sale Agreement. The schedule to Annexure E of that agreement lists the reservations, covenants, estates, exceptions, easements, rights and encumbrances which the purchaser would be subject to under clause 2.1 of the conditions of sale. Three items in the schedule of interests to be granted to HPC from other parties were described by reference to the MMD. One was a 'pending' easement granted by SECV connecting to the Morwell River. There is no evidence before the Court that this easement subsequently came into existence, or had ever existed. Regardless, none of the three items pertain to the part of the MMD that is in dispute in this proceeding.

239 HPP relies on the Share Sale Agreement of 4 August 1996 between SECV, HPP and other parties. The Schedule to this agreement is entitled 'Due Diligence Audit. Schedule of Interests to be granted by HPC to Other Parties'. In the line item 'Drainage - General', easements required to service the MIE are to be granted to Latrobe. The status of this item is described as 'Pending'.

240 The former SECV Workshops were to be privatised as the MIE. There is no detail or information as to what easements were required to service the MIE. The expression is vague, and the consequence unclear. No specific easements are identified, and their location is not known. It is speculative to conclude that they included part of the MMD. In any event, their status is described as 'Pending'. There is no evidence that the MMD was affected at any time by easements granted in relation to the MIE.

241 On 20 June 1997, the SECV office of the Administrator provided to Latrobe and others a proposed form of easement with respect to the MMD.[191]

242 On 18 September 1997, Latrobe's solicitors prepared an alternative form of easement for consideration by the SECV Office of the Administrator.[192]

243 A further form of easement was proposed by the SECV Office of the Administrator on 2 December 1997.[193] The following day Latrobe responded with further amendments.[194]

244 The parties have not located any correspondence after 3 December 1997 in relation to the terms of an easement with respect to the MMD. However, they are agreed that arrangements for an easement with respect to the MMD were not finalised, and that no easement was granted or registered in relation to the MMD.[195]

245 In his witness statement, Mr Naismith describes the discussions which took place between SECV and Latrobe around this time. Early on in the disaggregation process, which commenced in 1993 and continued for the following three or four years, Mr Jack Fryer acting for SECV stated to him that he wanted to create a drainage easement over the full length of the MMD in favour of Latrobe. Mr Naismith disagreed. Nothing further eventuated on that issue at that time.[196]

246 Subsequently, when Mr Fryer showed Mr Naismith survey plans prepared by Fisher Stewart, consultants to SECV, showing a proposed drainage easement in favour of Latrobe over that portion of the MMD which abuts the MIE as well as a drainage easement over the concrete lined section of Bennett's Creek, Mr Naismith stated that the MMD was constructed by SECV for SECV operations and was not Latrobe's responsibility.[197]

247 According to Mr Naismith, his conversation with Mr Fryer was as follows:

I maintained that the MMD was constructed by the SECV for SECV operations and that the MMD was not Council's responsibility. I also said that the Council's drains were following natural drainage paths into what was now the Morwell open cut mine. I stated that the SECV built the MMD to intercept this flow and divert this water, and the water from their land on the eastern side of the mine, in a westerly direction to the Morwell River. I also pointed out to Jack Fryer that Council had never maintained or had any responsibility for the MMD in the past, and that the Council would not willingly accept responsibility in the future. I also told Jack that the concrete lined section of Bennett's Creek was not in an urban area and that the SECV had concrete lined it to prevent erosion due to its industrial operations in this area, and that Council would not take over responsibility for the maintenance of this old concrete lined drain.[198]

248 In cross-examination, Mr Naismith agreed that Latrobe proceeded on the assumption that the uncontrolled discharge of water from the southern part of the township of Morwell into the MMD would continue permanently. He also agreed that he saw no need for an easement. He said that an easement normally gives rights of access to the land to do maintenance on the asset. In this case, there were no access rights to the land. It was inside a closed fence surrounding the mine. Latrobe did not maintain the MMD. There was no point in having an easement. He also pointed out that the mine may have wanted to use the water from the council drainage system, because the natural drainage path continued south into the mine. The MMD itself could change because it was out of Latrobe's control. He had seen numerous drains around the mines being changed, and the mine manager may choose to do that in the future. Latrobe would not be involved in or have any control over future changes. Latrobe did not believe it was responsible for the maintenance of the MMD.

249 I conclude that the MMD and the land on which it is constructed were transferred to HPP under the privatisation arrangements. I also conclude that there is nothing about the privatisation arrangements which suggest that the MMD ceased to be a private drain. It was not vested in Latrobe. To the contrary, the documentation is consistent with the conclusion that the MMD was transferred by SECV to Generation Victoria, and then to HPC and HPP by the privatisation process. There is nothing in any of the privatisation documentation or the discussions between Mr Fryer and Mr Naismith that suggests that its status as a drain vested, managed and controlled by the mine owner had changed. To the contrary, all of the evidence from witnesses or documents points to the conclusion that the relevant part of the MMD was a private drain under the management and control of the mine owner.

250 When the former SECV lands were privatised in 1996, the SECV Workshop area was privatised and became the MIE.[199]

251 Prior to privatisation of the MIE, SECV, HPC and PowerWorks Pty Ltd ('PowerWorks') engaged in discussions regarding the upgrade of water, drainage, sewerage and road infrastructure relating to the MIE.[200]

252 By an agreement made in July 1996, Latrobe, SECV, HPC, PowerWorks and Gippsland Water agreed to make various financial contributions towards the cost of upgrading certain road and drainage infrastructure within the MIE and to the capital cost of installing a GPT on a drainage outfall into the MMD.[201] At the same time, Latrobe accepted responsibility for roads and drainage within the MIE, and agreed to maintain, repair and upgrade them in accordance with its obligations under the LGA 1989.[202]

253 The rationale for these arrangements is explained in a memo from the Department of Treasury and Finance to SECV dated 5 July 1996.[203] Principally, the reasons are:

(1) because of the poor state of SECV land titles, the subdivision of the MIE was effected by legislation;

(2) each new electricity entity was allocated certain rights and liabilities in relation to the MIE including roads, water, sewerage and drainage;

(3) had a normal sub-division been performed instead of the legislative solution mentioned above, the cost of bringing infrastructure up to standard would have been borne by the relevant electricity entity; and

(4) because of the risks associated with long term ownership of infrastructure, in many instances those entities indicated that they wished to transfer ownership to other entities with appropriate expertise and powers to operate the infrastructure, e.g. Latrobe or Gippsland Water. [204]

254 Mr Naismith described the privatisation process in relation to the MIE:

As part of the privatisation process, the area accommodating the old electrical workshops was to be subdivided, to facilitate sale to third parties. Whilst the land was owned by a single owner, there weren't concerns about drainage across properties. The subdivision of the land meant that both road and drainage would need to be assessed, some realigned along proposed title boundaries and upgraded. Council was extensively involved in that process because it was proposed that Council would accept responsibility for the roads and drainage in the Morwell Industrial Estate.[205]

255 On 20 June 1997, in negotiations between Latrobe and the SECV as to the terms of easements proposed over assets in the MIE, Mr Fryer proposed that Latrobe be granted an easement over the section of the MMD that abuts the MIE.[206] Throughout these discussions, it was never suggested that the MMD was a public drain or that it vested in Latrobe. To the contrary, the discussions were predicated on the fact that HPC would be the grantor of the proposed easement.

256 On 1 September 1997, Mr Naismith received a letter dated 29 August 1997 from Freehill Hollingdale & Page, solicitors for the Department of Treasury, regarding the creation of an easement in favour of Latrobe for the eastern section of the MMD abutting the MIE.[207] On 18 September 1997, Latrobe proposed an easement which permitted it to enter HPC's land for the purpose of maintaining the litter control structure, and permitting it to specify the location of the legal point of discharge for stormwater drainage for each of the properties abutting and draining onto the mine land, and to issue a works permit and inspect the construction of a stormwater pipe drainage outlet on the mine land. Clause 2.1 of that proposed easement obliged HPP to maintain the MMD in a suitable condition to allow the free passage of storm water drainage.[208]

257 On or about 2 December 1997, Latrobe received a facsimile letter of that date from Mr Fryer of the SECV. The letter contained a proposed clause that:

HP will retain responsibility for maintenance to current standards within the surface part of the Main Drain Channel. LSC will be responsible for ownership and maintenance of .., any other existing or future drainage discharge points into the Main Drain Channel, including any associated erosion mitigation.[209]

Mr Fryer was trying to make Latrobe responsible for maintaining the underground pipe within the MMD and associated structures. HPP would maintain the grass surface of the MMD.[210]

258 This was not agreed to by Latrobe. On 3 December 1997, Mr Naismith wrote to Mr Fryer stating:

Your third dot point headed 'Maintenance' will require amendment along the following lines: HP will retain responsibility for maintenance for the surface of the main drains and all existing structures contained within the main drain including the low flow drainage pipe. Latrobe Shire Council will be responsible for the ownership and maintenance of the litter control structure, however, the Latrobe Shire Council will not be responsible for the maintenance of 'any other existing or future drainage discharge points into the Main Drain channel'. [211]

259 Ultimately, no easement as proposed was ever created in respect of the MMD. During this period, and indeed up until the time Mr Naismith left Latrobe in 2006, it was never suggested to him by SECV or HPP that they were entitled to constrain or prevent storm water run-off from the township or MIE from entering the MMD. Nor, he said, did they ever raise any objection to, or assert a right to stop, the flows from Latrobe's drains into the MMD. [212] Latrobe maintained this position post privatisation.

260 In or about March 1998, SECV, HPP, PowerWorks and Latrobe entered into a further agreement (the 'Infrastructure Deed') under which Latrobe assumed ownership of, and responsibility for, road and drainage infrastructure in the MIE.[213] In substance, specified roads and drainage assets were transferred to Latrobe. For its part, Latrobe undertook to assume all liability in relation to the transferred assets.[214] The transferred assets did not include the MMD.

261 In his witness statement, Mr Naismith describes the way in which the litter and sediment trap was installed to prevent litter and sediment from entering the MMD:

The Council refused to accept any grant of an easement as shown in the plans prepared by Fisher Stewart. The Council agreed that it would maintain a litter and sediment trap to be installed in Miner's Way to prevent litter and sediment entering the MMD from the Council drain and part of the proposed Morwell Industrial Estate. The litter and sediment trap was to be constructed on the mine land (at the initial capital cost of the SECV and [HPC]) with Council agreeing to maintain the sediment/litter trap at its cost.

...

Council constructed the litter trap. SECV/HPC paid for its construction. HPC/SECV, via their consultants, Fisher Stewart, also determined the location and specifications of the litter trap, and performed the necessary investigations and computations regarding the litter trap.

...

The litter trap is located on Hazelwood mine land, behind a tall perimeter fence. There is a gate in the fence in the vicinity of the litter trap, however the gate is padlocked. During my time at Council, Council did not retain a key to the padlock, and therefore required the permission and attendance of personnel from the mine owner to permit access for Council employees to clean and maintain the litter trap.[215]

262 This privatisation process for the MIE proceeded on the basis that SECV and later HPP was responsible for the maintenance of the MMD. This was the basis on which all parties negotiated during the privatisation arrangements. On each occasion when Mr Fryer or others suggested that Latrobe should assume responsibility for the MMD, the suggestion was rejected by Latrobe and by Mr Naismith on its behalf. The actions of all parties are entirely consistent with the notion that the MMD was not vested in Latrobe, and had never been vested in Latrobe .

263 If the MMD had previously vested in Latrobe or vested under the privatisation arrangements, this would have been recognised by the parties in their negotiations and conversations. It would have been at the forefront as to some issues - e.g. the connection of drainage to the MIE, and the provision of GPT's to protect the MMD. Whenever assumption of control by Latrobe of the MMD was suggested, it was dismissed by Latrobe and Mr Naismith on its behalf.

264 Latrobe relies on the provisions of mining legislation and the conditions of HPC's mining licence as important factors which support its case that the MMD is a private drain. Following privatisation, the mining operations carried out by HPP were regulated under the Mineral Resources Development Act 1990 (Vic) ('the MRDA').

265 While SECV conducted mining operations, it was not subject to any of the requirements of the MRDA in exercising any rights, powers, authorities or discharging any duties within the Latrobe area.[216]

266 In January 1994, the HPP land vested in Generation Victoria. Generation Victoria was a generation company the shares in which were held by or on behalf of the State or a statutory authority. As part of the legislative framework enacted to facilitate the vesting of the HPP in Generation Victoria, s 6 of the Electricity Industry (Further Amendment) Act 1994 (Vic) inserted s 12A into the EI Act. This provided that a generation company could mine coal on land vested in it under the EI Act in the Latrobe Area without being subject to the requirements of the MRDA.

267 The HPP land was vested in HPC at a time when all of the shares in that company were held by SECV. Before the shares in HPC were transferred to the HPP, the Electricity Industry (Amendment) Act 1995 amended the EI Act by inserting s 47A. This provision empowered the Governor in Council, on the recommendation of the Minister administering the MRDA, to grant a mining licence over land within the Latrobe Area. The section provided that the MRDA applied to any licence granted under that section as though it had been granted under the MRDA.

(1) a person other than the Crown required a licence or exemption to search for or do work or carry out any activity on any land;[217]

(2) the holder of a mining licence required an authority to commence work and could not do any work not in accordance with the licence;[218]

(3) the holder of a licence and an authority to commence work was entitled to construct any facilities specified in the licence (including drains);[219]

(4) a mining licence applied to the land described in the licence;[220]

(5) a mining licence could contain conditions;[221]

(6) a mining licence could be varied in circumstances including the request of a licensee, or where the Minister decided that it was necessary for the protection of the environment or the rehabilitation or stabilisation of the land to which the licence applied;[222]

(7) a licensee who proposed to do work was required to obtain an approved work plan. A work plan was required to contain the prescribed information and include a rehabilitation plan;[223]

(8) the rehabilitation plan must take into account any special characteristics of the land, the surrounding environment, the need to stabilise the land, and the desirability or otherwise of returning agricultural land to a state that is as close as reasonably possible to its state before the mining licence was granted;[224]

(9) a licensee could seek to vary, and the chief administrator had power to approve such variation of, an approved work plan (including any rehabilitation plan);[225]

(10) mining inspectors had power to enter and inspect any mine and examine any plant or any other thing whatsoever in the mine;[226] and

(11) where the Minister was satisfied, among other things, that a licensee had contravened the MRDA or the regulations, or not complied with a condition of the licence, the Minister could serve a notice on the licensee or the mine manager requiring them to take action to remedy the contravention or non-compliance, or prohibit the doing of any work or of certain types of work.[227]

269 The MRDA was replaced by the Mineral Resources (Sustainable Development) Act 1990 (Vic) ('the MRSDA'). The regulatory controls imposed by the MRSDA on the mine owner and the operation of the mine are broadly similar to those imposed under the MRDA.

(1) a person is prohibited from mining unless the person does so in accordance with a licence;[228]

(2) subject to meeting all requirements, the holder of a mining licence may carry out mining on the land and to do anything else incidental to that mining;[229]

(3) a mining licence applies to the land described in the licence;[230]

(4) a mining licence may contain conditions;[231]

(5) as discussed above, in some circumstances a mining licence can be varied;[232]

(6) the holder of a mining licence must, with some exceptions not relevant to the HPP land, not carry out any work on the land covered by the licence unless the licensee has an approved work plan;[233]

(7) a work plan must include a rehabilitation plan, and a community engagement plan[234];

(8) a licensee may seek to vary an approved work plan including a rehabilitation plan;[235] and

(9) if satisfied that a licensee has contravened the MRSDA, the regulations, or failed to comply with conditions of the licence, the Minister may serve a notice on the holder of the licence. A notice may also be served if the Minister believes on reasonable grounds that an act or omission is likely to result in a risk to public safety, the environment, land, property or infrastructure.[236]

271 Part 7 of the MRSDA is concerned with the rehabilitation of land. Licensees are required to rehabilitate land in accordance with the rehabilitation plan approved by the Department Head.[237] The rehabilitation plan must take into account -

(4) the desirability or otherwise of returning agricultural land to a state that is as close as is reasonably possible to its state before the mining licence was granted; and

(5) any potential long term degradation of the environment.[238]

272 A rehabilitation bond must be provided in an amount determined by the Minister after consulting with the municipal council and the landowner.[239] It is a condition of a rehabilitation bond that the land is rehabilitated to the satisfaction of the Minister.[240]

273 Rehabilitation must occur in the course of doing work, and as far as practicable be completed before licence ceases to apply to the land.[241] The Minister can carry out and recover the cost of rehabilitation in specified circumstances.[242]

274 The new mining licence commenced operation on privatisation, and is for a term of 30 years. It applies to the HPP land, and includes the MMD. The schedule of conditions requires works to be carried out in accordance with the approved work plan, including a rehabilitation plan.[243] It provides for the formation of an Environmental Review Committee to assess environmental performance and the results of environmental monitoring conducted under the Environmental Monitoring Program (EMP).[244] Fences and signposting around the area are required where public access is a safety hazard.[245]

275 Condition 5 relates to drainage and drainage control:

5.1 Any discharges from the licence area shall be minimised and any water discharged must be as free as possible of pollutants, save as provided by any licence issued pursuant to the Environment Protection Act.

5.2 All discharges shall meet the standards required under the State Environment Protection Policies under the Environment Protection Act 1970.

5.3 Sediment retention structures, including dams, shall be constructed in accordance with the approved work plan. An Inspector may also direct such works to be undertaken, where necessary, to control drainage from any disturbed area.

5.4 Rainfall and other natural waters shall be diverted away from works area so as to control erosion, pursuant to Condition 7 (sic). However, such works shall, as far as practicable, not cause undue alteration to the general drainage pattern beyond the licensed area.

276 Condition 8 relates to the minimisation of erosion:

8.1 The licensee shall undertake all necessary works to ensure that the potential for erosion of land affected by mining is minimised.

8.2. Should erosion occur, the licensee shall take all practical steps to minimise the erosion to the satisfaction of an Inspector.

277 Condition 15 requires progressive rehabilitation in accordance with the rehabilitation plan:

15.1 Progressive reclamation will be conducted as per the rehabilitation plan. In addition, any further rehabilitation work will be carried out at the direction of an Inspector.

15.2 As and when directed by an Inspector of Mines, despite any compensation agreements between the licensee and the owner of any private land in the licence, the licensee shall undertake progressive reclamation of land on the area subject to surface disturbance.

278 Condition 16 provides for final rehabilitation:

16.1 Final reclamation will be in accordance with the rehabilitation plan and any additional requirements as directed by an Inspector.

16.2 Failure to complete works in accordance with the rehabilitation plan or in accordance with the directions of an Inspector, shall constitute grounds upon which the rehabilitation bond may be forfeited either in whole or in part in accordance with Section 83 of the MRD Act.

279 Schedule B to the new mining licence as granted is the work plan, including the rehabilitation plan, as it was on 10 September 1996.

280 The work plan makes provision for mine rehabilitation and erosion control:

6. Mine Rehabilitation

Hazelwood Power Corporation has made a strong commitment to rehabilitate land disturbed by mining operations in accordance with community expectations.

The Mine has a long standing policy to ensure that all land disturbed by mining is stabilised and landscaped to blend into or complement natural features. This policy was developed in consultation with government agencies, special interest groups and the public, chiefly through the Rehabilitation Consultative Group, which meets quarterly.

6.1 Final Concept Plan

A Rehabilitation Concept Master Plan has been produced for the Mine. Its purpose is to provide an overall vision for the ultimate rehabilitation of all land disturbed by mining activities.

The plan shows the proposed rehabilitation treatment for all areas, including the Mine proper, overburden dumps, buffer areas, transport corridors, operational areas and infrastructure.

...

The preferred option for the worked out part of the Mine is to create a lake. At this time only preliminary studies into the creation of a lake have been carried out.

The areas surrounding the Mine will ultimately be used for grazing, conservation, active and passive recreation, wetlands habitat and forestry. A Land Capability Analysis was used to enable broad recommendations to be made on land use and management.

...

6.2 Progressive Rehabilitation

Progressive rehabilitation of the Mine overburden batters and external overburden dumps occurs each summer as operations move clear of the area.

A 5-Year Rolling Implementation Plan has been prepared for the Mine. Its purpose is to schedule ongoing rehabilitation to a five year projection and is revised annually or as required.

...

The rehabilitation work is subdivided into several projects, usually by location. Each project could typically contain the following elements:

• Bulk earthworks for landscaping
• Topsoil reclamation/respreading
• Drainage
• Wetlands development
• Sowing to pasture
• Planting trees
• Fencing
• Noxious weed eradication
• Maintenance

281 The new mining licence also makes provision for batter and mine stability:

9.1 Batter and Mine Stability Background

Mine stability encompasses stability of the mine floor, usually governed by aquifer pressures as described in the previous section, and batter stability - both individual batters and overall pit slope - as described below. HPC utilises the services of a Consultant for advice in this area.

Surface movement surveys are made routinely both as a survey of pin line networks in the Morwell area and within the Mine.

9.2 Batter Stability

Operating faces and permanent batters in overburden and coal are designed to meet stability criteria established by the geotechnical consultant.

...

Batters in overburden dump areas are designed with material quality and drainage criteria considered. Permanent batters are typically at 1 in 10 which also suits the visual requirements for rehabilitation in dump areas.

282 A work plan variation was approved to the HPP mining licence on 6 December 2000. The variation included a number of updated plans and reports.

283 The current work plan was approved on 11 May 2009.[246]

284 Clause 5.4.2 of the approved work plan deals with mine stability and subsidence including batter stability and the stability management plan. Table 5.5 lists a number of features identified by the Department of Primary Industries as assets at risk from instability, including the MMD. Table 5.6 includes details about the monitoring of these assets. The table describes the MMD as 'compromised', and notes that despite weekly stability inspections, monthly batter performance reporting and a program of cleaning in 2006 to improve performance, the mine remained 'powerless to control action or inaction by [Latrobe] and VicRoads'.

285 Clause 6 contains the current rehabilitation requirements making provision for progressive rehabilitation as well as for rehabilitation on ultimate mine closure.

286 Mr James Faithful, the Technical Services Manager of HPC, has worked at the mine since January 2013. He gave evidence as to the rehabilitation of the mine under the approved rehabilitation plan, which is part of the approved work plan.[247] HPC is required to undertake progressive rehabilitation and final rehabilitation once coal production has ceased. Approximately 440 ha of land within the mine have been rehabilitated since 1996/7.

287 On the basis of current planning modelling and assessments, Mr Faithful does not believe that the works would require the MMD to be decommissioned or recommissioned.[248]

288 Final rehabilitation is described in a high level concept plan prepared for Generation Victoria in December 1994. The final rehabilitation concept is for the open cut area of the mine to be flooded to form a lake, and for the surrounding mine batters to be re-profiled and revegetated. Mr Faithful said that HPC's progressive and final rehabilitation plans for the mine do not involve any works on the MMD.[249]

289 Mr Faithful said that a failure in the MMD had the potential to cause movement in the East Field northern batters - e.g. a crack or sinkhole in the upper channel, or a failure in the low flow pipe. HPC had a Ground Control Management Plan ('GCMP') for the mine to assist in monitoring and managing geotechnical and hydrogeological risks. Incremental movements are expected in all coal mines in the Latrobe Valley given the large scale mining operations and regional aquifer depressurisation.[250]

290 The section of the MMD above the East Field northern batters is shown as a hazard in the GCMP. Serious leakage from the MMD and serious leakage from MMD low flow pipe are identified as events posing a potential stability risk to the East Field northern batters. Inspections of the MMD and low flow pipe are among the controls to reduce these risks.[251]

291 Mr Faithful said that the MMD does not serve a mining purpose. Rainfall runoff from the Hazelwood catchment (which is predominantly grassland to the east of the open cut) currently drains into the MMD, but if the MMD were decommissioned, alternative arrangements could be made to redirect that flow to a pre-existing network of surface cut-off and roadside drains. These drains flow to large settlement ponds on the floor of the mine where the fines are allowed to settle out, leaving clean water for fire and dust suppression and wash down.[252]

292 In cross-examination, Mr Faithful acknowledged that the mine owner had recently prepared a media release for distribution to its own staff that described rehabilitation work on the northern batters as 40% completed. He qualified the release with the words 'unless something happens that means that it's necessary for a change to occur'.[253]

293 Despite an earlier statement that the area had been rehabilitated and that further works were not planned, Mr Faithful agreed in cross-examination that there needed to be some cutting back of the slopes in some areas of the northern batters, and that the planned trees had yet to be planted upon the graded and grassed batter surfaces. A failure for the trees to take (and a corresponding loss of their stabilisation utility) or a slip of the batter surfaces would complicate the final stages of rehabilitation approaching mine closure. Mr Faithful agreed that there was no guarantee that works done during the progressive rehabilitation of the mine would not need to be reviewed prior to the closure of the mine.

294 Taken to his assertion that the rehabilitation works on the northern batter would require the MMD to be decommissioned or recommissioned, Mr Faithful conceded that while this conclusion was based on planning, modelling and assessment, he could not know for certain what would eventually be required. If it was thought an appropriate stabilisation measure, the batters might be graded to what Mr Faithful described as 'a very flat slope', extending towards the north and potentially interfering with infrastructure in that area.

295 Mr Faithful acknowledged that there was regional subsidence in the area. Pin lines were to be extended to incorporate major public or private infrastructure with the results to be included in the annual stability assessments as part of the annual stability review.

296 Mr Faithful agreed that a failure in the MMD, for example, a crack or sinkhole in the upper channel, or a failure in the low flow pipe of the MMD, had the potential to cause movement in the East Field northern batters. Likewise, movement in the northern batters also had the capacity to cause damage to the MMD or low flow pipe.

297 Finally, Mr Faithful stated that while there was a concept study, there was as yet no detailed final rehabilitation plan for the mine's closure. While the 1994 concept plan of final rehabilitation contemplated a waterway with planted vegetation and landscaping, the MMD did not at present reflect that plan.

298 In re-examination, Mr Faithful explained that the installation of Teranap lining had not been envisaged when the 1994 concept plan was prepared, but was of the opinion that this did not bear upon the consistency of the state of the drain and the concept plan. He also clarified that while there were other areas in the northern batters requiring rehabilitation work, monitoring indicated that none of the rehabilitation areas near to the MMD had slopes in need of additional attention. Mr Faithful marked up a plan to show what areas had been treated, and what areas were still be to be treated.[254]

299 HPP claims that the MMD vested in Latrobe after the privatisation of SECV in September 1996. On one view, factual matters subsequent to September 1996 are therefore irrelevant to the main issues in the proceeding. Nonetheless factual matters subsequent to 1996 were received into evidence without objection from either party. Some of that evidence has a limited relevance other than illustrating how the dispute between HPP and Latrobe was initiated. Some of it is relevant to a later issue discussed in these reasons as to whether the flow of water from Latrobe's drains into the MMD is reasonable. In the circumstances, I will summarise the evidence provided by the parties. There is no dispute as to much of this evidence.

300 In or about March 2009, HPP contacted Latrobe, West Gippsland Catchment Management Authority ('WGCMA') and VicRoads to request that their representatives attend a meeting in order to discuss the future management and maintenance of the MMD.[255] Four meetings concerning the MMD were subsequently conducted in that year.[256]

301 Mr Dean Morahan, a former Manager of Infrastructure Operations at Latrobe gave evidence of these meetings.[257] He was not cross-examined.

302 The first meeting was held on 4 August 2009 at the mine. Mr Richard Polmear, HPP's Mine Engineering Manager, gave a slide presentation regarding the drain.[258] It described the drain's history:

• The Morwell Main Drain was one of the earliest structures built on the SECV Morwell Works Site.
• It is shown in a 24 April 1950 photo and appears to be functional.
• It's (sic) original function was to prevent drainage from the Morwell township area from entering the Mine.
• It appears that the original design was modified to include a 1m diameter low flow pipe for a section of the drain. This is likely to have occurred prior to the introduction of the ICR in 1955.
• The drain subsequently operated to carry excess waste water from the Mine to the Morwell River
• ...
• The drains original and primary function remains protection of the Mine from external run-off.[259]

303 At this meeting, Mr Morahan said words to the effect of 'the MMD is not Council's responsibility'. The VicRoads representative made a similar point about VicRoads.[260]

304 During his presentation, Mr Polmear spoke about the amount of litter in the MMD. Latrobe manages the presence of litter in drains through the use of GPT's, and undertook to investigate the locations of current GPT's that were operating on water draining into the MMD.[261]

305 Mr Morahan recalls that at that time, Latrobe had funding in the capital works program, and a practice of constructing one GPT per year, at a cost of approximately $120,000.00 each. The location of the new GPT was generally determined based on need, which was informed by considerations such as the amount of rubbish being discharged into a creek or the impact of that rubbish. There also needed to be a suitable site to locate the GPT to enable its construction and ongoing cleaning and maintenance.[262]

306 Mr Morahan attended the second meeting on 8 October 2009 along with Mr Richard Brammall, who was responsible for civil works projects at Latrobe. It was agreed that an extra litter trap was required at the Chapel Street drain.[263] The issue of splitting the cost of these works was raised, but not agreed upon.[264]

307 At the third meeting, on 5 November 2009, Mr Morahan again attended with Mr Brammall. At that meeting, the funding split between HPP, VicRoads, WGCMA and Latrobe was raised again. Mr Morahan reiterated his statement to the effect that 'Council doesn't consider that it is responsible for the drain'. Mr Polmear responded by saying words to the effect of 'well, WGCMA doesn't agree with that'. No representative of WGCMA was present at this meeting.[265]

308 The fourth and final meeting was held on 10 December 2009. Latrobe agreed to install a second GPT on the Chapel Street drain, subject to budget processes. Latrobe also agreed to contribute the sum of $4,000.00 to the cutting of a V notch in the first drop structure. HPP was to arrange this work.[266]

309 Mr Morahan said that between June 2003 and December 2010, it was not suggested by HPP that it was entitled to constrain or prevent storm water run-off from the township or the MIE from entering the MMD. HPP did not raise any objection to, or assert a right to stop, the flows from the MMD catchment into the MMD.[267]

310 Following the meetings, the parties agreed to make financial or in-kind contributions:

(1) HPP would clean up vegetation within the high flow channel of the drain;

(2) HPP and VicRoads would repair a sinkhole in the high flow channel and repair pit;

(3) Latrobe would install a litter trap on the Chapel Street and Commercial Road drains;

(4) WGCMA and Latrobe would cut a V notch first drop structure and regrade drain contents; and

(5) HPP and WGCMA would conduct annual aquatic spraying from the pipe outlet to the first drop structure.[268]

311 It is obvious that the parties would not have reached agreement in this way if Latrobe was responsible for the maintenance of the MMD.

312 On or about 7 February 2011, following heavy rainfall in the catchments surrounding the MMD (in no particular order):[269]

(1) a large sinkhole developed in the upper channel of the MMD;[270]

(2) land movement was observed to have occurred in the northern batters of the mine in the vicinity of the sinkhole; and

(3) cracking was observed in the pavement of the Princes Freeway.[271]

313 The parties disagree as to the cause of the sinkhole incident.[272]

(1) a large number of regulatory directions and notices were issued to HPP by the Department of Primary Industry ('DPI') and the Department of State Development, Business and Innovation ('DSDBI'), including under s 110 of the MRSD Act. Among other things, these notices required HPP to:

(ii) install a range of monitoring equipment in the mine to monitor relevant geotechnical conditions including ground movements and ground water levels;

(iii) drill horizontal bores in the northern batters; and

(iv) undertake, assisted by external consultants, various studies;

(2) a number of reports and technical studies were commissioned in relation to the incident, including from the Technical Review Board, an advisory body established under the MRSD Act; and

(3) the Morwell Bypass was closed for a period of several months as a safety precaution.[273]

315 In a letter to Latrobe following the sinkhole incident, HPP asserted that Latrobe was responsible for, and owned, the MMD. HPP asserted that this had been the case since 1990 in relation to the sections of the MMD outside of HPP's land, and since September 1996 for the remainder:

Rainfall Event February 2011 - Morwell area - Reservation of Rights

The purpose of this letter is to formally reserve rights of the Hazelwood Power Partnership ("HPP") in relation to any events that may occur following recent significant rainfall in the Morwell area.

The Department of Primary Industries ("DPI") has alleged that there has been land movement in the vicinity of the Hazelwood mine and the Princes Freeway reserve close to the Morwell Main Drain ("MMD"), that the potential for further movement exists and that water in the MMD has been a cause of that land movement.

The vast majority of water flowing into and along the MMD is from the pipes and system owned by the Latrobe City Council ("Council"), carrying public stormwater from the Morwell township and the old SECV Workshops Area to the Morwell River.

It is HPP's position that Council owns and is responsible for the operation and maintenance of the MMD and consequently any works required by DPI to be carried out on the MMD that DPI believes is necessary to prevent further movement are the responsibility of Council not HPP.

As far as HPP is aware, the sections of the MMD located off HPP land vested in the Council as a "public drain" in 1990 upon the commencement of section 198(1) of the Local Government Act 1989. The section of the MMD on HPP land vested several years later upon the privatisation of Hazelwood in September 1996 once the drain was no longer owned by a public authority, pursuant to section 198(2) of that Act.

As a result of this statutory vesting, Council assumed ownership and responsibility for the operation and maintenance of the entire length of the MMD, pursuant to the Local Government Act, including that portion on HPP land (from September 1996).[274]

316 It is plain that HPP was concerned by the potential cost implications of the sinkhole incident. The letter continued:

DPI has served HPP with various notices pursuant to section 100 of the Mineral Resources (Sustainable Development) Act 1990 (Vic) ("s110 Notices"). The s110 Notices require HPP, amongst other things, to carry out various feasibility studies aimed at assessing actions which in DPI's opinion will stabilise the area to reduce the risk of further movement.

HPP anticipates that it will shortly be served with further notices which may require the carrying out of works along the MMD. The imposition of a statutory notice requiring works to be undertaken along the MMD would, if required to be undertaken, cause HPP to incur significant cost as well as experience interruption to its business through the necessity to redeploy resources (both staff and equipment) in connection with those works.

DPI has also communicated to HPP that, in addition to works that may be required to be carried out on the MMD, there is a very real risk that HPP will be directed, pursuant to further s110 Notices, to carry out stabilisation works on the northern batters. The cost of this work, on current estimates, would potentially exceed $25 million.

HPP has therefore already incurred and appears likely to incur further significant losses as a result of the movement in the MMD area which DPI believes is directly attributable to water flowing from the Council's drain onto HPP land.

HPP reserves all right to seek reimbursement or compensation from Council of those losses, including the cost of any works that it is required to carry out on the MMD pursuant to s110 Notices, rehabilitation to the northern batters or any other works associated with recent heavy rainfall and the MMD.

HPP has communicated this position to the DPI, detailing in particular, HPP's position in relation to the Council's ownership of, and responsibility for, the MMD.[275]

317 On 8 April 2011, DPI issued a notice under s 110 of the MRSD Act ('the works notice'). The works notice directed HPP to:

...[U]ndertake the necessary study(s) to determine a suitable design and specification for the repair and ongoing maintenance of the Morwell Main Drain such that all leakage from the drain and the pipeline under the drain is prevented from entering the Hazelwood Mine and destabilising the northern mine batters and provide such study(s) to the Inspector;

...[C]omplete all works that are recommended by the study(s) that are necessary to repair the Morwell Main drain such that all leakage from the drain and the pipeline under the drain is prevented from entering the Hazelwood Mine;

...[I]mplement and establish all procedures and resources necessary to for (sic) the prevention of such leakage from the drain and the pipeline under the drain into the Hazelwood Mine including obligations in relation to ongoing monitoring and reporting to the Inspector;

At all times.... comply with all recommendations, requirements and specification (sic) of the study(s) required by clause 1, above.[276]

318 Between November 2012 and July 2013, HPP carried out works in response to the works notice, targeting an approximately 1.8 km long section of the MMD.[277] The works involved:

(a) over a 600m section of the MMD:[278]

(i) the installation of a composite liner comprising Teranap 531,[279] Tencate Miragrid GX130/130,[280] 300mm of non-dispersive clay compacted to 98%, and a subgrade of general fill. This location included the location where the sinkhole had developed in February 2011; and

(ii) the installation of an 800m HDPE slip lining pipe within the concrete low flow pipe, laid in 3 sections;

(b) over a 1200m section of the MMD:[281]

(i) re-grading the upper channel of the MMD by filling and re-compacting any cavities or soft areas discovered through the earthworks;

(ii) compacting the surface with 300mm of non-dispersive clay, and 150mm of topsoil and grass seed [sic]; and

(iii) installing rock chutes consisting of 100 - 250mm rock beaching over bidim 64 geotextile fabric; and

(c) over a 60m section of the MMD (chainage 480 - 540), replacement of the existing low flow pipe with an 800mm steel enforced polypipe, and the installation of a new junction pit at chainage 540.[282]

319 Prior to the approval of the design for these works, HPP and DPI consulted Latrobe and WGCMA.[283]

320 The works notice was one of a number of notices issued in response to the sinkhole incident. The cost of the works and studies conducted by HPP in response to these notices exceeded several million dollars.[284]

321 Subsequent to the incident, solicitors for Latrobe and HPP exchanged letters dated 20 September 2011, and 3, 12 and 19 July 2013 in relation to the MMD:

(a) HPP requested that Latrobe provide a written explanation as to the basis of its rights to discharge water (including storm water from town drains) into the MMD, or in the absence of a sufficient explanation of its rights, within 90 days:

(i) cease discharging water into the MMD; or

(ii) submit a design solution, at its cost, to ensure that any water it discharges into the MMD does not enter HPP's land;

(b) HPP alleged that by virtue of the operation of s 198 of the LGA 1989, a section of the MMD on HPP's land is vested in Latrobe, and Latrobe is responsible for its management and control; and

(c) Latrobe denied that the MMD was a public drain within the meaning of s 198 of LGA 1989.[285]

322 It was the sinkhole incident which triggered the dispute between HPP and Latrobe. In their letter dated 20 September 2011, HPP's solicitors contend that the proposed design of repair works to the MMD was no more than a short term or stop gap solution, and that a permanent solution needed to be developed in order to eliminate any future risk to the Princes Freeway and the Morwell township.[286] The letter goes on to state that 'any permanent solution will require the diversion of [Latrobe's] and VicRoads' water inflows into the part of the MMD that is located in the vicinity of the mine and Princes Freeway'.[287]

323 Following this letter, HPP's solicitors again contended by letter of 3 July 2013 that by operation of s 198 of the LGA 1989, the part of the MMD which is on the HPP land had vested in Latrobe.[288] Latrobe denied HPP's claims that the MMD was a public drain.[289]

324 Mr Renato Innocenzi, the Strategy, Planning and Programs Director of HPC described what happened following the service of the works notice. HPP was required to develop a design for the proposed works in consultation with Latrobe, VicRoads and WGCMA and engaged a consultant to do so.[290]

325 A number of alternative design proposals were submitted to DPI for consideration. One design proposal involved what was described as a 'shallow trench excavation'. However this was not supported by Latrobe because it would require it to undertake works on its own drainage infrastructure connecting with the MMD.[291]

326 Mr Innocenzi said that HPC and DPI actively consulted with Latrobe concerning the design and repairs.[292] In cross-examination, he was asked whether Latrobe had been consulted concerning the design solution eventually adopted by HPC. He was unable to recall any occasion when Latrobe had been consulted concerning any design element within the HPP land. He stated that stakeholders had been given an opportunity during the meetings to make their views known and that meetings were only one part of the communications between the various stakeholders at the time.

327 Ultimately, DPI determined that the MMD remedial design should ensure that Latrobe was 'no worse off'.[293] A design for proposed works was approved by DPI. Between approximately November 2012 and July 2013, HPP conducted works on the MMD in accordance with this design. The works on the MMD cost HPP in excess of $7.7 million. DSDBI made a financial contribution towards the cost.[294]

328 In February 2011, Mr Leslie Hilton, Coordinator Infrastructure Design, was nominated to be Latrobe's representative at a site inspection of the MMD. By this time, the sinkhole had been backfilled. HPC representatives informed him about the temporary repairs then being made to the MMD. They requested information as to the location and number of pipes and culverts entering the MMD.[295]

329 Apart from sharing information regarding the pipes and culverts entering the MMD, Mr Hilton said that Latrobe had no involvement in the temporary repairs to the MMD.[296]

330 Mr Hilton was subsequently Latrobe's representative at meetings of a technical group to discuss the long-term repairs to the MMD. He said that Latrobe was not consulted as to those repairs, but rather was informed about them. Latrobe did not have expertise in the fields relevant to the long-term repairs of the MMD. It had no involvement in the long-term repair of the MMD following the incident. Subject to DPI's direction, HPC had control of the design, location, and performance of repairs.[297]

331 Mr Hilton was also Latrobe's representative on the Stakeholder Reference Group ('the Group'), which also included representatives from DPI, HPP, VicRoads, WGCMA, and SKM. It was convened in respect of an investigation and report by Sinclair Knight Merz '(SKM') examining options for relocating the MMD outside of the mine boundary.

332 Mr Hilton said that he did not know why SKM's investigations were limited in this way, as a review of the area's topography demonstrated that it would not be practical to re-engineer the MMD outside of the mine boundary and eliminate the risk to the mine. This was because the catchment flows south towards the mine. During at least one meeting, Mr Hilton said that he stated that the options being considered were not practical given the topography, and that it was most unlikely that Latrobe could raise the funds necessary to implement any of the options under consideration. No-one disagreed.[298]

333 In cross-examination, Mr Hilton agreed that as Latrobe's representative he attended meetings of the Group on 28 March 2012 and 11 May 2012. He did not recall the detail of the workshops on those dates, but accepted that presentations were made explaining what was proposed in terms of the work to be done on the MMD. Latrobe's position was that any solution should not have an adverse effect on the outfalls of the township of Morwell.

334 The options report prepared by SKM for DPI dated 14 February 2013 estimated the capital costs of re-building the MMD outside of the mine boundary at between $64.2 million and $91.8 million.[299] As mentioned, DPI's instructions to SKM were expressly limited to consideration of drainage options that could be located outside the mine boundary.[300] Mr Hilton said that while Latrobe had an open mind as to the various options being proposed, an expenditure on their part in the tens of millions of dollars was not practical.

335 Since it has owned the HPP Land, HPP has maintained a barbed wire perimeter fence around the mine of approximately 2-3 metres in height.[301]

336 Access to the MMD within the HPP land can be obtained only by making the necessary arrangements with HPP. There is a padlocked gate in the fence. Access through the gate can only be gained after consultation with HPP employees or contractors.[302]

337 In his evidence, Mr Faithful explained that HPP's safety management procedures require that all visitors and contractors enter the mine site through the main gatehouse on Brodribb Road so that security and emergency personnel can keep track of all individuals on site.[303] Entry by Latrobe personnel to the mine licence area by a back gate is not consistent with this procedure.[304]

338 Subject to limited exceptions (eg. emergency services vehicles), all employees, contractors and visitors to the mine and power station are required to undertake a site induction which is valid for a set period, typically twelve months. Site inductions are part of HPC's safety management procedures. The induction process includes a briefing on potential safety hazards and procedures in the event of an emergency. It also outlines certain activities which are hazardous in a mine environment. For employees and contractors working onsite, additional site-issued approvals may be required including for hot works such as burning, welding or the use of petrol powered engines which pose a risk. The use of a petrol pump generator is a special risk requiring approval. The process to manage that risk is made clear in the site induction process.[305]

339 Mr Darren Slade, a Technical Officer with Latrobe, gave evidence that he was responsible for the cleaning and maintenance of drainage, infrastructure and GPT's across the municipality. GPT's are cleaned every three to twelve months.[306]

340 There are three GPT's which Latrobe maintains that remove sediment and litter prior to water discharging into the MMD. They are located on Keegan Street, Chapel Street and off Miner's Way. The first two are on Latrobe land while the third is on HPP's land.[307]

341 Mr Slade said that the GPT off Miner's Way is located on the HPP land behind the wire perimeter fence. To gain access to this GPT for cleaning, Latrobe employees and contractors telephone the number on the sign attached to a padlocked gate. Latrobe staff and contractors are met by HPP staff and the gate opened. Because of the size of this GPT, it can take 2 days to clear. At the end of the first day, Latrobe employees or contractors phone the Hazelwood number on the sign attached to the locked gate, and are let out.[308]

342 The GPT off Miner's Way was cleaned on 1 July 2004, 13 October 2006, 10 September 2007, 8 October 2008, 18 November 2009, 2 September 2010, 29 April 2011, 29 November 2011, 6 December 2012, 16 July 2013 and 13 November 2014.[309]

343 On this last occasion, Mr Slade had arranged for a subcontractor, GMA Wastewater Services Pty Ltd ('GMA'), to attend the GPT and clean out rubbish and litter. The locked gate was opened in the manner described above.[310]

344 Later that morning, Mr Slade observed the GMA crew at work clearing the GPT. They had set up a petrol pump generator, used to pump the water out of the GPT and into the drain so that the litter and rubbish could be removed. While Mr Slade was on site, the GMA crew were directed by HPP staff not to use the petrol pump generator as they were in the mine area. They were also informed that in the future any person entering the mine to clear the GPT would need to undertake induction training and occupational health and safety training prior to entering the site. The induction training and occupation health and safety training would take approximately 3-4 hours to complete, and it was a requirement of the mine that such training be refreshed every 12 months. They were also informed that any person entering the HPP Land was required to wear personal protective equipment approved by the mine operator.[311]

345 The following day the GMA crew returned to the Hazelwood site to finishing cleaning the GPT. They began setting up the equipment, and phoned the telephone number on the sign attached to the locked gate. The crew was informed that it would not be given access until induction was completed. The crew left the HPP land without completing the cleaning of the GPT.[312]

347 I have reached the conclusion that the MMD was an SECV drain prior to the commencement of the privatisation process, just as it was in 1975 and in 1985. Subsequent to privatisation in September 1996 it was a private drain under the management and control of the mine owner. Despite the flows of water through the MMD from public drainage systems or the Morwell Bypass, the predominant facts and circumstances are those that point to the MMD within the HPP land being a private drain under the management and control of HPP. It did not vest in Latrobe as alleged.

348 I have reached these conclusions after considering all of the facts and circumstances relating to the status of the MMD at the time periods as alleged by HPP. They include:

(1) the original MMD was a private drain constructed by SECV in or about 1949-50, to its own design and at its own cost. The part of the MMD now in dispute lies within land formerly owned by SECV;

(2) the mine is a major industrial property previously in SECV and now in private ownership;

(3) the original MMD required substantial earthworks to construct. Its primary purpose was as a cut-off drain to protect open cut mining operations by SECV;

(4) after construction, the original MMD was within the management and control of SECV, and not to any degree that of the Shire of Morwell;

(5) the Shire of Morwell did not contribute to the construction cost of the original or relocated MMD;

(6) SECV continued to have the management and control of the MMD as an integral part of the mine when it was relocated in about 1975;

(7) SECV designed the relocated MMD using in-house engineering staff and external consultants;

(8) SECV alone tendered the MMD relocation works, including the construction of the low flow pipe and the channel for higher flows;

(9) SECV paid for the entire cost of the MMD relocation works and the cost of the low flow pipe;

(10) SECV decided on the advice of its expert engineers that it would accept drainage flow from the southern part of the township of Morwell and other catchment areas into the MMD. This was a deliberate decision made after calculating the likely flows from the township of Morwell and other sub-catchments into the MMD. The MMD as redesigned and relocated has the capacity to meet all surface water run-off requirements including from the HPP land;

(11) prior to privatisation, the MMD was universally recognised as an SECV drain;

(12) the Shire of Morwell and later Latrobe have not accepted at any time that the MMD is a council drain;

(13) CRB and RCA corresponded with SECV to obtain permission for drainage run-off from the Morwell Bypass to flow into the MMD;

(14) RCA carried out infrastructure works with the consent of SECV to connect council drains from the township of Morwell, as well as drains servicing the Morwell Bypass, into the MMD;

(15) subsequent to privatisation, the MMD was under the management and control of HPP as the purchaser of the mine and surrounding industrial property;

(16) special arrangements were made in relation to the MIE at the time of privatisation whereby Latrobe agreed to provide drainage to the MIE of a similar character to that provided by it to other industrial subdivisions in its municipal district. An important part of the arrangements negotiated at this time was that the council drains from the MIE would flow into the MMD;

(17) following privatisation, the mine and the MMD were subject to the legislative and regulatory regime imposed by the MRDA and the MRSDA;

(18) no easement or property right over the relevant part of the MMD and in favour of Latrobe has ever been agreed to or created;

(19) there was a standing arrangement between SECV and later HPP and Latrobe concerning the MMD to the effect that Latrobe would provide GPT's to remove litter flowing into the MMD from council drains. This arrangement presupposes SECV and later HPP control over the MMD;

(20) SECV and later HPP accepted responsibility for the maintenance and upkeep of the MMD;

(21) according to the evidence, HPP did not assert that Latrobe was legally responsible for the MMD until 2011, after the sinkhole incident;

(22) condition 5.4 of the mining licence requires HPP to divert rainfall and other natural waters away from the works area so as to control erosion pursuant to Condition 7. If the MMD did not exist, HPP would either require a diversion drain to divert rainfall and other natural waters away from the works area of the mine or accept that water in ponds on the floor of the mine. Having regard to the gradient of the HPP and surrounding lands, a cut-off drain is necessary if the mine floor is to be protected from surface and other flows coming from the southern part of the township of Morwell and from the MIE. Under condition 5.4, this cut-off drain would have to be constructed so as not to cause undue alteration of the general drainage pattern beyond the licensed area. The MMD is the principal means by which HPP presently complies with condition 5.4; and

(23) HPP has obligations of progressive and final rehabilitation of the HPP land under conditions 15 and 16 of the new mining licence. Compliance with these conditions or with the work plan could in the future involve the performance of works to the MMD although this is not presently contemplated.

349 To the extent that events subsequent to 1996 may be relevant to HPP's claim under s 198(1) (if at all), I would also find:

(1) following the sinkhole incident, mainly at its own expense, HPP carried out works to the MMD and surrounding areas to repair the MMD, including the installation of a composite liner. The upper channel of the MMD was partly filled and re-compacted by HPP. Rock chutes were installed, and the low flow pipe replaced in part;

(2) the repair and reinstatement works cost HPP in excess of $7.7 million. A financial contribution was made by DSDBI, but not by Latrobe;

(3) HPP maintains a barbed wire perimeter fence around the mine of approximately 2-3m in height. Access is not available to the section of the MMD within the HPP land without HPP's consent;

(4) Latrobe staff and contractors can only gain access to the section of the MMD within the HPP land with the permission of HPP management. This may require induction and training before access is permitted. It may also entail wearing HPP approved personal protective equipment; and

(5) the northern batters and surrounding areas may experience instability as is illustrated by the sinkhole incident. Should another sinkhole form, or the northern batters undergo subsidence, HPP may be required to undertake repair or reinstatement work on, or affecting, the MMD. While the likelihood of another sinkhole incident has significantly reduced following the works undertaken by HPP in 2012-13, the risk remains.

Can Latrobe discharge drainage water into the MMD?

350 If it is necessary for me to decide on the evidence as to the present status of the MMD, I would conclude that it has remained a private drain. The facts and circumstances which point to this conclusion predominate over those that do not.

351 Assuming that the MMD is a private drain, HPP advances the alternative claim that Latrobe has no right to discharge public drainage water into it. HPP claims that it has the right to undertake works on its land to prevent such a flow. In support of this claim, it pleads that the flow of public drainage water discharged by Latrobe into the MMD requires continuing inspection and maintenance of the MMD by HPP. It says that it incurs cost which Latrobe does not meet, and that it also incurs the risk of water from the MMD entering into the network of coal joints and cracks in the northern batters below the MMD, causing land movement. HPP says that if Latrobe is to discharge public drainage water through the 'public section' of the MMD, it should acquire the land on which the public section of the MMD is located under s 187 of the LGA 1989.[313]

352 HPP seeks a declaration that unless and until Latrobe acquires the land on which the public section of the MMD is located, it has the right to undertake works on the HPP land to prevent the public drainage water from flowing into the MMD. It also claims an injunction restraining Latrobe from continuing to discharge public drainage water into the public section of the MMD.[314]

353 In final submissions, Senior Counsel for HPP did not dispute that if the MMD ceased to perform its public drainage function, there would be flooding in the township of Morwell unless other drainage arrangements were implemented. He acknowledged that the Court should not make orders that might trigger flooding in Morwell. If declaratory relief were granted, HPP did not intend to use self-help in a way that would cause flooding in Morwell without Latrobe having the opportunity to avoid those consequences. He said that Latrobe could pursue one of the practical alternatives identified in the SKM report. Funding was a matter for Latrobe.

354 In response to an observation from the Court that funding, acquisition and construction was probably a five year job, Senior Counsel for HPP submitted that Latrobe might seek a stay from the Court based on evidence as to how long was required.

355 Latrobe denies HPP's claims and relies on s 16 of the Water Act 1989 (Vic) ('Water Act'). It says that HPP has an obligation to receive onto its land reasonable flows of water from other land. Latrobe is entitled to discharge public drainage water into the MMD relying on the free flow principle. It relies on condition 5.4 of the new mining licence which it says obliges HPP to permit the discharge of public drainage water into the MMD. It says that condition 5.4 requires HPP not to cause undue alteration to the general drainage pattern beyond the licensed area. According to Latrobe, this means that HPC is obliged not to alter the existing flows of water from the town catchment, the MIE catchment and the freeway catchment.

(1) the diversion of flows of water from the town, MIE and freeway catchments into the MMD is practicable and consistent with the present and past practice of accepting these flows;

(2) HPP and its predecessors have at all material times accepted flows of water including water from the town and MIE catchments into the MMD;

(3) Latrobe cannot revert to the pre-mine drainage patterns for the water from the town and MIE catchments by reason of the presence of the mine;

(4) the cost of providing alternative diversion away from the mine of water from the town and MIE catchments is estimated at between $65-$92 million;

(6) if an injunction relief is granted, or if HPP undertook works on its land to prevent water from the town, MIE and freeway catchments from flowing into the MMD, there would be pooling of water, risks of structural instability, subsidence of the freeway and immediate area and likely inundation of parts of Morwell and the MIE.

357 As to HPP's claim that because public drainage water flows into the MMD, HPP is required to carry out continuing inspection and maintenance of the MMD, to avoid the risk of water from the MMD entering into a network of coal joints and cracks in the northern batters below the MMD, Latrobe contends:

(1) HPP is obliged to conduct MMD inspections and maintenance in any event because of the requirements of condition 1.1 of the new mining licence and clause 9.2 of the works plan, as well as the fact that maintenance of the MMD is critical to the stability of the northern batters of the mine;

(2) HPP is obliged to conduct MMD inspections and maintenance under the licence conditions and the works plan and because water flows into the MMD from the HPP catchment;

(3) Latrobe does not have access to data on the risks to the MMD and the batter on which it is situated, or the specialised engineering and technical expertise relating to batter stability, the types of repairs and maintenance undertaken by HPP following the sinkhole incident, or of the high-tech liner installed along parts of the MMD; and

(4) unlike HPP, Latrobe has no control over other factors critical to batter stability including aquifer dewatering and depressurisation.

358 Latrobe pleads that it has no interest in acquiring the whole or part of the MMD and that:

(2) the MMD is a private drain and is not required by Latrobe for the performance of its functions or the exercise of its powers; and

(3) the land on which the MMD is located is dangerous, unstable, and prone to movement by reason of the mining operations conducted on and near that land in addition to aquifer dewatering and depressurisation activities.

359 Latrobe says that the flow of water from its drains into the MMD is a reasonable flow of water. It says that it is not open to HPP to interfere with that flow in a manner that might cause injury to Latrobe, damage to property or economic loss. As a result, it says that HPP cannot now refuse to receive drainage water from the township of Morwell or MIE into the MMD.

Is the flow of water from council drains into the MMD reasonable?

360 Sub-sections 16(1)-(3) of the Water Act provide:

Liability arising out of flow of water

(1) If -

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

(b) that flow is not reasonable; and

(c) the water causes -

(i) injury to any other person; or

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

(iii) any other person to suffer economic loss -

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

(2) If -

(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

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

(i) injury to any other person; or

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

(iii) any other person to suffer economic loss -

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.[315]

361 Section 17 of the Water Act provides:

Protection from liability

(1) A person does not incur any civil liability in respect of any injury, damage or loss caused by water to which section 16 or 157 of this Act or section 74 of the Water Industry Act 1994 applies except to the extent provided by this Act.

362 Sub-sections 20(1) - (2) of the Water Act provide:

Matters to be taken into account in determining whether flow is reasonable or not reasonable

(1) In determining whether a flow of water is reasonable or not reasonable, account must be taken of all the circumstances including the following matters -

(a) whether or not the flow, or the act or works that caused the flow, was or were authorised;

(b) the extent to which any conditions or requirements imposed under this Act in relation to an authorisation were complied with;

(c) whether or not the flow conforms with any guidelines or principles published by the Minister with respect to the drainage of the area;

(d) whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area;

(e) the uses to which the lands concerned and any other lands in the vicinity are put;

(f) the contours of the lands concerned;

(g) whether the water which flowed was -

(i) brought onto the land from which it flowed; or

(ii) collected, stored or concentrated on that land; or

(iii) extracted from the ground on that land -

and if so, for what purpose and with what degree of care this was done;

(h) whether or not the flow was affected by any works restricting the flow of water along a waterway;

(i) whether or not the flow is likely to damage any waterway, wetland or aquifer.

(2) In taking account of the matters specified in subsection (1), greater weight must be attached to the matters specified in paragraphs (a), (b), (c) and (d) than to the other specified matters.

363 In determining whether a flow is reasonable under s 16(2), regard must be taken of all the circumstances. Nine matters are specified in s 20(1). Four specified matters attract greater weight than the other five specified matters.

364 Assistance is obtained from previous decisions which explain the history and background of ss 16 and 20. In Kopitschinski v Song,[316] Deputy President Macnamara (as he then was) said:

The Free Flow Principle

For many years it was thought that an owner of lower land was obliged to receive on his land all surface water which flowed naturally onto it from higher land. This was thought to have been established by a decision of the Judicial Committee of the Privy Council in Gibbons v Lenfestey (1915) 84 LJ (PC) 158. The existence of any such legal principle in Australia was rejected by the High Court of Australia in Gartner v Kidman [1962] HCA 27; (1962) 108 CLR 12.

When the law as to the drainage of land was under review following the recommendations of a Joint Select Committee of the Victorian Parliament one of the principles advocated in the Joint Select Committee's report was the re-establishment of a so called 'free flow' principle. The Drainage of Land Act 1975 included Section 7 which stated:

No civil action, suit or proceeding shall lie against any person in respect of causing or permitting by that person to (sic) of any waters to flow onto the land (sic) of any other person in a reasonable manner.[317]

In moving an amendment to the Drainage of Land Act 1975 in the form of the Drainage of Land (Amendment) Bill 1984 the Minister for Water Supply, the Hon. D.R. White, said of the free flow principle:

The statutory establishment of this principle was made necessary by a 1962 High Court decision which overturned the basis of common law which had applied in Victoria for some 60 years.[318]

The Water Act 1989 Part 2 of which replaced the Drainage of Land Act contains no positive statement of the 'free flow principle' analogous to Section 7 of the Drainage of Land Act. The same principle is clearly exemplified however by the provisions of Section 16 rendering persons causing unreasonable flows of water from one person's land onto another causing damage liable to pay damages but conversely imposing a liability for damages upon those who interfere with reasonable flows of water from one person's land onto another. The scheme is completed by the provision to be found in Section 18 excluding any other forms of civil liability beyond in circumstances such as the present (sic) those set out in Section 16.

...

Reference to the legislative history of Part 2 of the Water Act and its predecessor, the Drainage of Land Act 1975 will show that the focus of the statutes was upon the drainage issues which arose in broadacres rural properties. [319]

365 Further assistance is obtained from Spagnolo v Body Corporate Strata Plan 418979Q,[320] where Robson J said:

The Water Act 1989 is the product of an overhaul of all water legislation then current in Victoria and replaced some 15 Acts. The Minister, in his Second Reading Speech in the House, said that the new legislation was needed even if no changes of substance were intended. The Minister said nothing of relevance about Division 2 of Part 2 which contains the relevant sections 16, 17 and 19.

...

A further similarity in the schemes in the Drainage of Land Act 1975 and the Water Act 1989 involves the concept of "reasonable". As indicated above, s 16 of the Water Act 1989 requires that the flow of water from the land of a person onto any other land to be "not reasonable" in order to make out the statutory cause of action. Sub-section 16(2) of the Act refers to a "reasonable flow of water". The Act contemplates that a flow of water from one property to another is either reasonable or is not reasonable. It is the flow of water which has to be characterised as reasonable or unreasonable and not the conduct of the person sought to be held liable.

...

On the Second Reading Speech on the Drainage of Land Bill (No. 2) the Minister threw considerable light on the genesis of the reasonable test. He said:

...

It concluded that in the majority of cases lower land owners had adopted measures precluding the free flow of water, and in so doing had acted unreasonably in the circumstances. The Committee therefore recommended in paragraph 9.19, that the drainage rights of landowners as fixed by common law should be superseded by statutory provisions providing for the unobstructed flow of drainage.

The Committee, however, qualified this new right of 'free flow' by making its exercise subject to a number of factors. These factors, set down in paragraph 9.20 of the report, include the reasonable development and use of the upper land from whence water is to be discharged. In doing this the Committee offered a degree of protection to the lower landowner by reserving to him the right to resist the discharge of water into his land if such discharge is not reasonable. In giving effect to the Committee's recommendation, and qualification, this part of the Bill codifies certain aspects of the common law with an emphasis on the free flow principle and places in the hands of the Drainage Tribunal the responsibility to determine disputes having regard for the tests of reasonableness envisaged by the Committee and to develop an informed and consistent interpretation of the new law.

The criteria which go towards the consideration of reasonableness are contained in Clause 9 and include such factors as land use, past ownership and occupation, the source of the drainage water, the contours of the land concerned and the availability of lawful points of discharge. Such factors include those proposed by the Joint Select Committee and while the Bill requires the Drainage Tribunal to have regard to such criteria it leaves it to the tribunal to decide on relevance in each particular case".

This explanation is illuminating and under s 35 of the Interpretation of Legislation Act 1984 I am entitled to consider, inter alia, reports of proceedings in any House of the Parliament and explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament.

...

Section 9 of the Drainage of Land Act 1975 contained similar provisions to those in s 20 of the Water Act 1989 in determining whether any waters were caused or permitted to flow onto any lands in a reasonable manner, which were arguably limited to drainage water.[321]

366 I accept the history and background to ss 16, 17 and 20 as is described in these decisions. The scheme of Part 2 of the Water Act was intended by Parliament to embrace the free flow principle as recognised before the decision of the High Court in Gartner v Kidman.[322] The free flow principle would mean that the owner of land is obliged to receive on his land all surface water which flowed naturally onto it from higher land.

367 The free flow principle as accepted prior to Gartner has been modified and extended in a number of ways in the Water Act. It applies in the statutory context of the Water Act and is expressed in terms of the definitions in that Act.

368 It applies to 'flow' as defined in s 3, an expression that goes considerably beyond mere surface flow and extends to 'the discharge, release, escape, percolation, seepage and passage of water, as well as to both surface and underground flow'. The definitions section also broadens the meaning of 'water' to apply whether or not it contains impurities.

369 Assuming that there is both 'water' and 'flow', s 16(2) relevantly requires that the flow of water onto land is reasonable. If it is, the flow cannot be interfered with by a person in any way that causes injury, damage to property or economic loss to another person. The matters to be taken into account in determining whether the flow is reasonable or not reasonable are, as mentioned, set out in s 20. It is these principles and the provisions of the Water Act that are to be applied in the present case to determine whether the flow of water into the MMD is reasonable and whether HPP may interfere with it without attracting liability.

370 Turning first to the application of s 16 of the Water Act, there is no doubt that the drainage water emanating from the Morwell and MIE catchments into the MMD is 'water' within the definition contained in the Water Act. The wide ambit of the term 'flow' includes the drainage water emanating from council drains and passing into the MMD. No party contended otherwise.

371 The second step is to determine whether the flows are reasonable or are not reasonable. This requires consideration of the nine matters specified in s 20(1). I now turn to each of these matters:

(a) Whether or not the flow, or the act or works that caused the flow, was or were authorised?

HPP did not contend that there had been any lack of authority on the part of SECV, RCA, or any other party to construct the connecting drains and works, or the MMD itself. Most of this infrastructure has now been in use for many years. It was not contended otherwise.[323] I conclude that the acts and works that caused the flow, and the flow itself, are authorised.

(b) The extent to which any conditions or requirements imposed under the Water Act in relation to an authorisation were complied with.

(c) Whether or not the flow conforms with guidelines or principles published by the Minister with respect to the drainage of the area.

(d) Whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area?

Prior to the construction of the Morwell Bypass, significant consideration was given by the engineering staff of SECV, CRB and RCA as to the nature of existing works and activities, the likely volume of drainage water, and the capacity of the MMD. It was determined on civil engineering advice that the MMD had the capacity to accommodate the likely flows, having regard to all of the circumstances. In a letter dated 30 October 1984, SECV's Acting Manager of Engineering Services advised his counterpart at the RCA that

[a] capacity check indicated that the main drain has sufficient capacity to cater for additional run-off from the proposed freeway pavement. However, it is important that all connections to the main drain low flow pipeline have an overflow capability to allow flow exceeding its' (sic) design capacity to enter the main drain open grassed channel.[324]

These assessments have proven correct. There has been no occasion where the MMD has lacked capacity to accommodate the flows in it including from the township of Morwell, the MIE and the Morwell Bypass or caused flooding or other problems. The 2011 sinkhole incident did not arise as a result of any deficiency in the design capacity of the original or relocated MMD. The subsequent installation of a composite liner along a 600m section of the MMD and other works to protect the MMD from land subsidence appear to have reduced or obviated much of the risk from subsidence associated with the MMD. I conclude that account was taken at the relevant time of the likely impact of the flow on drainage in the area, having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area.

(e) The uses to which the lands concerned and any other lands in the vicinity are put.

The HPP land is used for mining, while the township of Morwell is predominantly put to residential and commercial use. The MIE is industrial in character. The use and functions of the MMD are appropriate having regard to the land uses and activities in the area.

The southern part of the township of Morwell is elevated, and located on a ridgeline. The natural flow of surface water from the southern part of the Morwell township would be towards the mine. The MMD acts as a cut-off drain for the mine by intercepting this flow. The flow of drainage water from council drains into the MMD is consistent with the contours of the land albeit that the flow of surface water is now achieved by pipes and reticulation rather than by surface flow.

(g) Whether the water which flowed was brought onto the land from which it flowed; collected, stored or concentrated on that land; or extracted from the ground on that land and if so, for what purpose and with what degree of care this was done.

The drainage water which flows into and along the MMD includes water from the southern part of the Morwell township, the MIE and the Morwell Bypass. The MMD serves a significant purpose. HPP has not suggested that there was any lack of care in the infrastructure work that has produced these outcomes. It is not suggested that the drainage system was poorly designed, or that it does not function satisfactorily. GPT's have been installed in key locations to capture litter and pollutants in the drainage water. There is no suggestion of a lack of care.

(h) Whether or not the flow was affected by any works restricting the flow of water along a waterway.

(i) Whether or not the flow is likely to damage any waterway, wetland or aquifer.

372 I conclude that of the nine specified matters listed in s 20, five are relevant to the circumstances of this case. Consideration of each of the five relevant specified matters in the circumstances of the case supports the view that the flow of water from council drains into the MMD is reasonable. No relevant specified matters support the reverse view.

373 The third step is to consider whether there are any other circumstances which should be taken into account in determining whether the flow of water from council drains into the MMD is reasonable.

Need for continuing inspection and maintenance of the MMD by HPP

374 HPP relied on this matter in support of its case that the flow is unreasonable. There is no doubt that there is an ongoing need for inspection and maintenance of the MMD by HPP. There has been a need for ongoing inspection and maintenance of the MMD since it was first constructed.

375 Latrobe submitted that there would be a continuing need for ongoing inspection and maintenance of the MMD even if no water was received into the MMD from council drains. Periodic inspections of the MMD must be undertaken under the conditions of HPC's mining licence and work plan. The MMD is shown in Table 5.5 of the work plan as an asset at risk from instability. In addition to periodic inspections, HPP is required to undertake weekly stability inspections and monthly batter performance reporting.[325]

376 I accept Latrobe's submissions that these conditions, and good practice generally, would require continuing inspection and maintenance of the MMD even if no water from council drains was received into it. This is likely to continue for as long as the MMD exists. The evidence does not permit me to say to what extent, if at all, the need for continuing inspection and maintenance would be reduced if water from council drains did not flow into the MMD. If the flows from the council drains went elsewhere, water would still flow into the MMD from HPP's own land and from the Morwell Bypass, unless these sources were also redirected. VicRoads is not a party to this proceeding, and has not been heard. I can only assume in the absence of VicRoads from these proceedings that the flow of drainage water from the Morwell Bypass into the MMD will continue. There is no evidence before me to the effect that HPP considers that it has any rights or claims against VicRoads. Even if I am wrong in this, and the MMD could be removed entirely, the result would be that water would flow into the settling ponds on the floor of the pit. Doubtless they also require periodic inspection and the water within them must be treated. The northern batters area of the mine also requires inspection and there is significantly more work to be done prior to final rehabilitation. I am not satisfied on the evidence that HPP has established that it is significantly disadvantaged by the continuing inspection and maintenance of the MMD, as it is required to undertake continuing inspections and maintenance both generally, and as a result of its licence conditions and work plan, of the MMD specifically. I am not satisfied that the flow of water from council drains into the MMD is not reasonable on this basis.

377 No evidence was provided by HPP as to the actual costs of inspecting or maintaining the MMD. Evidence was provided of the costs incurred by HPP on a once off basis following the sinkhole incident in repair and protection works.

378 Latrobe provided evidence as to the costs of cleaning and clearing open earth drains, although not drains maintained subject to the conditions of a mining licence or an approved work plan. Having regard to the mining licence conditions, the work plan, and the propensity of the MMD and surrounding land to subsidence, the costs of maintenance on the MMD may be expected to be greater than those of an ordinary open earth drain in Latrobe's municipal district. However, in the absence of evidence from HPP as to the actual or additional cost of cleaning, clearing or maintaining what it says is the public section of the MMD within the HPP land, I am unable to say whether the annual costs associated with the maintenance of the MMD are significantly greater by reason of the receipt of public drainage water from council drains then they would otherwise be. There is simply no evidence on which the court can reach a conclusion.

379 Mr Piasente, provides evidence of the maintenance costs of open earth drains. He deposes that Latrobe cleans and clears stormwater drains within its municipality (but not designated waterways under the control of a catchment management authority) to ensure that the flow capacity of the drain is maintained.[326] Open earth drains are cleaned and cleared on a reactive basis when works are necessary. Best practice requires that these works be undertaken approximately every 7 years.[327]

380 The MMD is 4.9km in total length, with approximately 3.7km of the high flow channel and all of the 2.9km low flow pipe on the HPP land.[328] Mr Piasente gave evidence that cleaning and clearing open earth drains involves the clearing of silt, vegetation and litter, followed by removal of same to a fill site.[329]

(a) excavator and operator hire, 8 hours @ $ 190.00 per hour - $ 1,520.00;

(b) truck and operator hire, 16 hours @ $ 155.00 per hour - $ 2,480.00;

(c) labourer, 8 hours @ $ 50.00 per hour - $ 400.00;

(d) traffic management, 1 day @ $ 1,500.00 per day - $ 1,500.00;

382 As a result, Mr Piasente estimates that the total annual cost to maintain a kilometre of open earth drain (based on a 7 year maintenance cycle) are in the order of $2,025.00 per kilometre per annum. This estimate is based on Latrobe's current contract rates for plant hire and includes normal cost items. The estimate does not include any special provisions or replacement costs once the drain reaches the end of its life.

383 Mr Piasente was not cross-examined, and his evidence was not challenged. Little if any reference was made in HPP's submissions to his evidence.

384 As I have said, there is no evidence on which I can reach any conclusion as to the annual costs of inspection and maintenance of the MMD as against the annual costs of inspection and maintenance of the MMD without the flow from council drains. I am not able to reach any conclusion as to the extent to which costs would be less without the flow of water from council drains. I have no basis on which to assess the comparative costs to HPP of the current position or different options.

Risk of water entering the network of coal joints and cracks in the northern batters

385 The risk of water entering the network of coal joints and cracks in the northern batters below the MMD was raised with SECV by Golder Brawner Associates, geotechnical consultants, in a report as far back as April 1973.[330] The consultants recommended lining of the MMD along the northern perimeter of the open cut to guard against the entry of water into the vertical cracks in the M1 coal which could lead to instability on the northern batters. The recommendation for lining of the MMD along the northern batters was not implemented until after the sinkhole incident in 2011. Subsequent to the sinkhole incident, as I have already stated, a composite liner has been installed over a 600m section of the MMD. Other protective works have also been performed including the installation of 300mm of non-dispersive compacted clay and a fill sub-grade.[331]

386 Since the MMD was constructed, there has always been a level of risk that water might enter into the network of coal joints and cracks in the area of the northern batters resulting in land movement. The works performed subsequent to the sinkhole incident very likely have substantially reduced this risk.

387 Other than in a period of heavy rainfall, when the high flow channel is needed, water in the MMD flows down the low flow pipe. As far as I can assess on the limited evidence available, flow down the concrete low flow pipe including the 800m HDPE slip lining pipe presents little risk of significant seepage into the coal joints and cracks in the northern batters below the MMD. Seepage could only occur if the pipe were to fail. I have no evidence that the flow of water from council drains at times of higher flow presents added risk, having regarded to the composite liner, and compacted clay base of the high flow channel of the MMD.

388 I accept Latrobe's submission that HPP is obliged to conduct inspections and perform maintenance of the MMD under the conditions of the mining licence and work plan.[332] As I have said, under Table 5.6 of the work plan, periodic inspections of the MMD must be conducted. Weekly stability inspections and monthly batter performance reporting are also required.

389 Finally, I accept that Latrobe has no control over factors critical to batter stability including batter design, aquifer dewatering and depressurisation. It has no expertise in batter stability or technical knowledge relating to the management and maintenance of the MMD. There is no dispute about the fact that if drainage were to be provided for the township of Morwell entirely off the HPP land, the cost would be between $64.2 and $91.8 million at 2013 values. Mr Hilton said that such a resolution is impracticable. There is no reason to doubt his evidence on this aspect, which was not challenged.

390 In the circumstances, I reject this matter as advanced by HPP. I am simply not satisfied on the evidence that the flow of water from council drains to the MMD is not reasonable on this basis.

391 While Latrobe has statutory power to acquire the land on which the public section of the MMD is located under s 187 of LGA 1989, I accept that it is under no obligation to do so. Latrobe and its predecessor the Shire of Morwell have consistently declined to acquire the MMD, whether compulsorily or otherwise. They have consistently maintained that the MMD is a private drain under the management and control of the mine owner. Latrobe does not wish to take control of the MMD as it does not want to take on the risks or cost associated with it, lacks the appropriate expertise, and considers that the MMD is best characterised as a private drain. The land on which the MMD is located forms part of a large mining property. Latrobe considers this land to be dangerous, unstable and prone to movement by reason of the nearby mining operations as well as aquifer dewatering and depressurisation.

392 There is a further problem about this matter as raised by HPP. It is not a concern relating to the flow of water. As Robson J held in Spagnolo, it is the flow of water that has to be characterised as reasonable or unreasonable and not the conduct of the person sought to be held liable.[333]

393 In these circumstances, this matter does not lead me to conclude that the flow of water from Latrobe's drains into the MMD is not reasonable.

Conclusion as to the reasonableness of the flow of water

394 Having regard to the circumstances, the specified matters listed in s 20(1) of the Water Act, and all of the matters raised by the parties, I have come to the conclusion that the flow of water from the council drains into the MMD is reasonable for the purposes of s 16(2) of the Water Act.

395 In reaching this conclusion, I have taken into account a number of key matters and circumstances:

(1) the original MMD was constructed by SECV in or about April 1949 as a cut off drain for the benefit and protection of the open cut mining operations to be conducted by the SECV;[334]

(2) at the time when the MMD was constructed, the township of Morwell already existed. Water drained from the southern part of the Morwell township and flowed freely in a south-westerly direction, generally following the contours of the land. Whether or not the flow of water onto the SECV land at this time was a natural flow of surface water, the Morwell sub-catchment of the MMD has essentially remained the same, although the township of Morwell was smaller and less developed, and there was no Morwell Bypass at this time;[335]

(3) in September 1972, the Chief Civil Engineer of SECV prepared a departmental memorandum recommending that SECV should accept discharge from the Morwell township drains into the MMD on the basis that the Shire of Morwell would contribute to special works or treat polluted substances from the Morwell township drains before they reached the MMD;[336]

(4) this recommendation was accepted and subsequently acted on. The arrangement has continued ever since;

(6) following a tender in September 1973, SECV carried out works relocating the MMD. The works had been designed to accept stormwater drainage from the township of Morwell as well as from the mine and land owned by SECV;[337]

(7) when the Morwell Bypass was constructed between 1980 and 1985, RCA constructed drainage infrastructure, with SECV's consent, linking existing outlets from the township of Morwell as well as drainage from the bypass itself to the MMD. This gave rise to the pipes and culverts into the MMD shown in Schedule 3;[338]

(8) on privatisation in 1996, HPP assumed SECV's rights and obligations as owner of the HPP land;[339]

(9) prior to privatisation, SECV and other parties including Latrobe made arrangements for drainage from the MIE to be discharged into the MMD. Road and drainage infrastructure was upgraded with agreed financial contributions. Latrobe accepted responsibility for roads and drainage in the MIE;[340]

(10) Latrobe provides a number of GPT's in fulfilment of its part of the arrangements. It also routinely clears and services the GPT's at its own expense using its staff or contractors;[341]

(11) as a mine owner under the MRSDA, and under its licence, HPP has significant duties and obligations. They include mine rehabilitation and erosion control. Under the current work plan, the MMD is subjected to periodic inspections, weekly stability inspections and monthly batter performance reporting;[342]

(12) under condition 5.4 of the new mining licence, rainfall and other natural waters must be diverted away from the works area;

(13) condition 5.4 also requires HPP as far as practicable not to cause any alteration to the general drainage pattern beyond the licensed area;[343]

(14) drainage water from the southern part of the township of Morwell has been received into the MMD for upwards of 40 years; and

(15) the MMD has the capacity to receive water from council drains and has done so for over 40 years. Since the sinkhole incident the MMD has been fitted with a liner and other protective works have been completed.

396 In addition, I have considered the circumstances that are to be considered under s 20 of the Water Act as they relate to the MMD. I have concluded that:

(1) the works that caused the flow were authorised (s 20(1)(a));

(2) account was taken by SECV engineers at the time the works were constructed of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area (s 20 (1)(d)). The MMD has the necessary design capacity;

(3) the uses to which the lands concerned and other lands in the vicinity are put do not result in any incompatibility or issue as to the operation or functions of the MMD (s 20(1)(e));

(4) the drainage infrastructure linking the council drains servicing the southern part of the township of Morwell and the MIE to the MMD is consistent with the contours of the lands concerned (s 20(1)(f)); and

(5) the infrastructure works to connect council drains servicing the southern part of the Morwell township and the MIE into the MMD were undertaken for appropriate purposes and with due skill and care (s 20(1)(g)).

(1) the need for continuing inspection and maintenance of the MMD arises under the mining licence conditions and work plan independently of the connection of council drains to the MMD. There is no evidence that any significant additional cost is incurred by HPP by reason of the receipt of drainage from council drains. HPP did not put on any evidence as to the costs associated with maintaining or cleaning the MMD;

(2) while there is a risk that water may enter the network of coal joints and cracks in the northern batters below the MMD, this risk has been significantly mitigated by the installation of the composite geotextile liner and compacted clay base for the high volume channel of the MMD. The installation of the 800mm HDPE slip lining pipe within the low flow concrete pipe also contributes towards the mitigation of this risk; and

(3) Latrobe is under no legal obligation to compulsorily acquire the MMD. This matter does not relate to the flow of water.

398 I uphold Latrobe's defence under ss 16 and 20 of the Water Act. The flow of water from council drains linking the southern part of the township of Morwell and the MIE into the MMD is reasonable. HPP would be liable in damages under s 16(2) of the Water Act were it to interfere with the reasonable flow of water into the MMD causing damage to the property of another person, or causing the other person to suffer economic loss.

399 Quite apart from the merits of its claims, I am satisfied that the relief sought by HPP in the form of a declaration that it has the right to undertake works on the HPP land to prevent public drainage water from entering the MMD, and an injunction restraining Latrobe from continuing to discharge public drainage water into the MMD, could not be granted in this form. This is because such orders would have serious consequences to public safety and property and would cause great uncertainty. They should not be granted in the form sought in the exercise of the court's discretion.

400 In the event that HPP undertook works on its land to prevent public drainage water from flowing into the MMD, modelling work undertaken by Dr McCowan showed that a 1 year ARI event would result in ponding in upstream areas. The ponding is particularly noticeable in the MIE, and in the south-eastern part of the township of Morwell upstream from culvert 2. The degree of ponding would be expected to progressively increase up to the more extreme 10 year and 100 year ARI events.[344]

401 Dr McCowan considers that ponding in the 1 year ARI event with public drainage blocked from the MMD would be significantly worse than that occurring in a 100 year ARI event with the culverts operational. Extensive inundation would be expected to occur at the MIE with maximum flood depths in excess of 0.75m, particularly along sections of Miner's Way. Extensive inundation would also be expected in the southeast part of Morwell. This would include extensive inundation of residential properties in this area. Flood depths in excess of 0.5m would be expected along parts of Wallace Street, Billingsley Court and Chapel Street. The inundation in this area would be expected to worsen until the water level was sufficient to flow overland, westward along McLean Street and then through more residential areas before flowing further westward through the Morwell Recreation Reserve, past the location of culvert S and then northwest out of the area of interest.[345]

402 In the event of 10 or 100 ARI events of 24 hours duration, Dr McCowan predicted significantly increased ponding if public drainage water were blocked from entering the MMD. In the MIE, inundation depths would be expected to exceed 1.0m. In the southern part of Morwell, more water would be expected to flow along the path described above.[346] According to Dr McCowan, blocked conditions also mean that even once the rain ceases, there is nowhere for the water in the MIE or the southeast corner of Morwell to go. Water in these areas would remain until it slowly receded through losses by a combination of infiltration and evaporation. For periods of prolonged rain with multiple rainfall events, the ponding caused by one rainfall event may not have time to recede before the next rainfall event. As a consequence, extensive areas of the MIE and of the southeast part of Morwell (east of about Tarwin Street) could remain inundated for weeks, or even months, without some form of physical intervention.[347]

403 Dr John Webb, Associate Professor in Environmental Geoscience at La Trobe University, provided an expert report on the hydrogeological impact of flooding. Dr Webb describes the site geology and hydrogeology of the mine, noting that throughout the area of interest, groundwater flow within the coal seam is towards the open-cut. While there was no information as to groundwater flow within the overburden, it is likely also to be towards the open cut based on the topography of the area.[348]

404 Dr Webb expresses the opinion that ponded floodwater in a 100 year ARI 24 hour rainfall event under existing conditions (where flooding would be more limited) or under blocked conditions (where flooding would be much more extensive) may be able to leak through the layer of clay separating the ground surface from the top of the M1 coal seam. The layer is comparatively thin, being approximately 6 meters thick. If leakage into the coal occurs beneath areas of flooding, this has the potential to contribute to the failure of the northern batter of the open cut. Compared with existing conditions, blockage of drainage to the MMD would result in deeper flooding over a large area, which would in turn increase the likelihood of leakage.[349] Dr Webb was not cross-examined by the HPP.

405 It is apparent that the Court could not grant relief that, if actualised by a self-help remedy of blocking council drains, pipes or culverts, would result in serious flooding or damage to property.

406 I accept the evidence of Dr McCowan and Dr Webb. In the event that HPP were to block public drainage water from entering the MMD, there is likely to be extensive flooding of the southern part of the township of Morwell and the MIE. Obviously, this would cause significant damage to property and the MIE. The significance and extent of flood water would also constitute a potential risk to life and safety. It would be palpably irresponsible to permit such a result.

407 Neither VicRoads or property owners or residents are parties to this proceeding. They have not had the opportunity to be heard as to the relief sought by HPP.

408 Despite HPP's submission, it is not a satisfactory resolution for HPP to say that it would accept a declaration but give Latrobe time to make other arrangements if it sought a stay from the court on proper material. The position might stand unresolved for a significant period of time. Considerable public disquiet might arise. Any intervention by the Court would have to be very carefully considered to avoid risk or threat to the public.

409 HPP seeks to rely on common law claims in trespass and nuisance. It says that the flow of waters from Latrobe's drains into the MMD constitutes trespass or nuisance. The question which arises is whether it is open to HPP to claim in trespass or nuisance.

410 Section 17(1) of the Water Act provides that a person does not incur any civil liability in respect of any injury, damage or loss caused by water to which s 16 applies except to the extent provided by the Water Act. The impact of s 17(1) on civil liability arising out of the flow of water has been considered previously.

411 In South East Water Limited v Transpacific Cleanaway Pty Ltd, [350] Cavanough J said:

Section 74(1) says in terms that it is creating a liability in certain specified cases, not merely that it is recognising or modifying a liability created by the common law or otherwise created. It provides that if certain specified conditions are satisfied, the relevant licensee "is liable" to pay damages. This contrasts starkly with one of the predecessors of s 74. Until 1916, s 213 of the Irrigation Act 1886 provided ... that the relevant public authorities should be liable to make compensation ... for injury, loss or damage caused by, among other things, flooding "if such injury loss or damage be such as would but for this part have been a good cause of action ...". ... [T]his example at least shows that if in 1994 Parliament had intended to pick up the whole of some extraneous cause of action (such as negligence) it could easily have said so expressly, just as it had done in 1886. But it did not. [351]

412 In Transpacific Cleanaway Ltd v South East Water Limited (Real Property),[352] Deputy President Macnamara, as he then was, held:

The purpose of the Water Act 1989 and the analogous provisions which we find in the Water Industry Act 1994 ... was to codify the law as to liability for flows of water rather than leaving the statutory regime to operate as a gloss upon common law causes of action such as negligence or nuisance as was the case in the repealed Drainage of Land Act 1975. The fact therefore, that Section 74(1) should be regarded as creating, (sic) an entirely freestanding cause of action is not only unsurprising but consistent with the framework of the Water Act 1989 and the Water Industry Act. It would frustrate that objective if the entire complexity of the underlying common law were to be imported by a sidewind as Dr Sadler's submissions would have it. [353]

Unlike the Water Act 1989, the Drainage Act 1975 envisaged the plaintiff bringing an otherwise existing cause of action. The Water Act 1989, on the other hand, creates a new statutory cause of action and otherwise extinguishes any civil liability in respect of any injury, damage or loss caused by water to which, inter alia, s 16 applies. [354]

414 Finally, Gillard J held in Coles Myer Ltd v City West Water Ltd:[355]

Mr Davis submits that by reason of s17 of the Act, the three common law causes of action pleaded by the plaintiff are no longer available because damage was caused in circumstances which are covered by the statutory causes of action. He relies upon s17 of the Act.

S17(1) reads -

"(1) A person does not incur any civil liability in respect of any injury, damage or loss caused by water to which s16 or s157 of this Act or s74 of the Water Industry Act 1994 applies except to the extent provided by this Act."

... The question comes down to whether the "injury damage or loss caused by water" as a result of the incident is an occurrence to which any of the statutory causes of action created by the two Act applies?

If each constituent element in the proof of the statutory cause of action is established, then the victim of the water caused injury, damage or loss, is confined to the statutory cause of action and any common law cause of action based on the same set of facts is no longer available to the victim.

Plainly the exclusion of the common law would cover all tortious causes of action. ...

In my opinion the words of s17(1) are clear and result in "any civil liability" being excluded if the facts establishing the injury damage or loss by water prima facie establish the statutory cause of action. If they do, then in my opinion the common law contractual claim is also excluded. This result accords with the intention of parliament which was to confine liability for the flow of water to statutory causes of action.

It follows that in my opinion the common law tortious claims pleaded by the plaintiff in the present proceeding are not available to it and it is confined to proceeding on its causes of action under s16(1) of the Act and s74 of the Water Industry Act 1994.[356]

415 Guidance may also be found in the Second Reading speech for the Drainage of Land Bill (No 2) which was quoted from and discussed in Spagnolo, and which I have reproduced above.[357] The speech records that the Joint Select Committee recommended that the 'rights of landowners as fixed by common law should be superseded by statutory provisions', and that, with appropriate qualifications, this recommendation had become a part of the Bill.

416 In view of s 17(1) of the Water Act, and the authority to which I have referred, HPP cannot rely on claims in trespass or nuisance against Latrobe arising from the flow of drainage water from Latrobe's drains into the MMD. Its remedy (if any) must arise under the provisions of the Water Act.

417 I conclude as to the main issues in dispute in this proceeding:

(1) until privatisation in 1996, the MMD was a SECV drain. On completion of the privatisation process, the MMD was a private drain vested in, managed and controlled by the mine owner;

(2) the flow of water from council drains under the management and control of Latrobe into the MMD is reasonable for the purposes of ss 16 and 20 of the Water Act; and

(3) the declaration and injunction sought by HPP, which would have the effect of authorising HPP to carry out works to block the entry of water from council drains into the MMD, should not be granted. The self-help remedy sought would potentially cause flooding of public and private property.

418 Latrobe has been successful, and HPP's claim must be dismissed.

SCHEDULE 1 - STATUTORY PREDECESSORS OF S 198 OF THE LGA 1989

Local Government Act 1989 (Vic)

Part 9_ - _Specific functions, powers and restrictions

(1) The following are vested in the Council and are under the management and control of the Council -

(a) public sewers and drains within the municipal district;

(b) sewers and drains in and under roads in the municipal district;

(2) This section does not apply to any sewers and drains vested in another Council or a Minister, the Crown or any public body.

Local Government Act 1958 (Vic)

Part XXI_ - _Sewers drains watercourses etc.

642. (1) All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, shall vest in and belong to the municipality, and the council shall have the management and control of the same.

(2) Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.

(3) This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works or in the Geelong Waterworks and Sewerage Trust.

Local Government Act 1946 (Vic)

Part XXI_ - _Sewers drains watercourses etc.

603. (1) All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, shall vest in and belong to the municipality, and the council shall have the management and control of the same.

(2) Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.

(3) This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works or in the Geelong Waterworks and Sewerage Trust.

Local Government Act 1928 (Vic)

Part XXI_ - _Sewers drains watercourses etc.

603. (1) All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, shall vest in and belong to the municipality, and the council shall have the management and control of the same.

(2) Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.

(3) This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works or in the Geelong Waterworks and Sewerage Trust.

Local Government Act 1915 (Vic)

Part XX_ - _Sewers drains watercourses etc.

554. (1) All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, shall vest in and belong to the municipality, and the council shall have the management and control of the same.

(2) Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.

(3) This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works.

Local Government Act 1903 (Vic)

Part XX_ - _Sewers, drains, watercourses, etc.

Division 1_ - _Sewers, etc., vested in municipality

554. (1) All public sewers and drains within any municipal district and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise shall vest in and belong to the municipality, and the council shall have the management and control of the same.

(2) Every public sewer or drain of which such council has the management or control shall be deemed to be within the municipal district of such municipality.

(3) This section shall not apply to any sewers and drains vested in any other municipality or in the Board of Land and Works or in the Melbourne and Metropolitan Board of Works.

Local Government Act 1890 (Vic)

Part XVII_ - _Sewerage etc.

464. All public sewers and drains within any municipal district, and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging, whether made before the commencement of this Act or any time thereafter and whether made at the costs of the council or otherwise, and the entire management of the same, shall vest in and belong to the municipality, and the council shall have the entire management of the same.

Local Government Act 1874 (Vic)

Part XVII_ - _Sewerage etc.

439. All public sewers and drains within any municipal district, and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging, whether made before the commencement of this Act or any time thereafter and whether made at the costs of the council or otherwise, and the entire management of the same, shall vest in and belong to the council of the municipality.

343. All public sewers and drains within any borough, and all sewers and drains in and under the streets thereof, with all the works and materials thereunto belonging, whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise, and the entire management of the same, shall vest in and belong to the council of the borough.

The Municipal Corporations Act 1863 (Vic)

CCCI. All public sewers and drains within any borough and all sewers and drains in and under the streets thereof with all the works and materials thereunto belonging whether made before the commencement of this Act or any time thereafter and whether made at the cost of the council or otherwise and the entire management of the same shall vest in and belong to the council of the borough.

The HPP land is comprised of the land described in the following Certificates of Title:

SCHEDULE 3 - SCHEMATIC PLAN OF MMD AND SURROUNDS

The Agreed Statement of Facts between HPP and Latrobe was:

1. By a partnership agreement in writing and dated 2 August 1996 (as amended) between:
   • (a) National Power Australia Investments Ltd;
   • (b) Hazelwood Pacific Pty Ltd;
   • (c) Australian Power Partners BV;
   • (d) Hazelwood Investment Company Pty Ltd; and
   • (e) CISL (Hazelwood) Pty Ltd,

a partnership known as "Hazelwood Power partnership" (HPP) was formed.

1. From 7 June 2013, the members of the HPP have been and are:
   • (a) National Power Australia Investments Ltd;
   • (b) Hazelwood Pacific Pty Ltd;
   • (c) Australia Power Partners BV; and
   • (d) Hazelwood Churchill Pty Limited,

1. Each of the Hazelwood Partners is:
   • (a) incorporated pursuant to law; and
   • (b) capable of suing in its own name.
2. Since in or about September 1996, the assets of HPP have included the land known as the Hazelwood Power Station and Coal Mine, Morwell, Victoria (the HPP land). The parcels of land that presently comprise the HPP land are set out in Schedule 1 to the Further Amended Statement of Claim dated 22 December 2014 (FASOC).
3. The defendant (Council) is and was at all material times:
   • (a) a body corporate capable of being sued in its own name; and
   • (b) authorised to perform, within its municipal district, the functions and powers conferred on it by the Local Government Act 1989 (Vic) (LGA) and corresponding previous enactments.
4. At all material times, the functions and powers conferred on Council within its municipal district by the LGA and corresponding previous enactments include the provision of drainage.

1. A drain traverses the northern batters of the Hazelwood Coal Mine on the HPP land (Mine) and is known as the Morwell Main Drain (MMD). The MMD catchment includes part of the HPP land, relevant parts of the Princes Freeway reserve, the Morwell Industrial Estate (MIE) and the southern part of the township of Morwell. The northern parts of the township of Morwell drain to the north of the township.
2. The approximate location of the MMD relative to the Mine, the southern part of the township of Morwell and the Morwell Industrial Estate is identified on the schematic plan annexed to this Statement and marked "A" ("Schematic Plan").
3. The route of the MMD through the HPP land is shown on the survey plans annexed to this Statement and marked "B" ("the Survey Plans").
4. A number of pipes and culverts come onto the HPP land and connect with the MMD, and discharge storm and rain water runoff into it. These pipes and culverts include, inter alia, those labelled "A", "B", "C", "D", "S", "V", "W", "X", "Y" and "Z" on the Survey Plans. The pipes and culverts labelled "T" and "U" on the Survey Plans were decommissioned by VicRoads in 2011.
5. Given the scale of, and number of sheets within, the Survey Plans, for convenience, the approximate locations of the various pipes and culverts connecting to the MMD identified in the Survey Plans, and referred to in paragraph 10, are labelled on the Schematic Plan.
6. Plaintiff's version: As presently constructed, modelling suggests that the upper channel and low flow pipe of the MMD upstream of drainage point "S" has the capacity to wholly contain a flood flow of a 100 ARI flow without overflowing onto HPP's land.

12A Defendant's version: As presently constructed, the upper channel and low flow pipe of the MMD have the capacity to wholly contain a flood flow well in excess of a 100 ARI flow without overflowing onto HPP's land.

1. At all material times, the MMD was situated within the municipal district of Council.
2. The MMD comprises an approximately 4.9km long "high flow channel" and a concrete "low flow pipe" beneath the floor of the "high flow channel" for approximately 2.9km. The low flow pipe also includes a short section of an above-ground steel pipe. Approximately 3.7km of high flow channel and all of the "low flow pipe" of the MMD is situated on the HPP land. The low flow pipe is mostly situated below the base of the high flow channel.
3. The size and shape of the high flow channel on the HPP land is irregular, and varies throughout the length of the MMD. In the section between points "S" and "Z" on the Schematic Plan, the characteristics of the upper channel of the MMD are generally as follows:

(c) vertical height of side walls of 1.5 to 3.5 metres;

(d) batter slopes of 1:2 to 1:3 (vertical to horizontal);

(e) width across the top of the channel profile of approximately 25 to 35 metres; and

(f) channel floor longitudinal grade approximately 1 in 500.

1. The MMD has been constructed in the surface of the HPP land, in overburden, overlying a coal seam. Approximately 600 m of the approximately 3.7km long section of the high flow channel of the MMD (between chainages 640 - 1230) is lined with a composite geotextile material. The geotextile material was applied in 2012 - 2013 as part of the works by HPP in response to the section 110 notice.
2. The MMD is positioned to the north of the Mine's open cut pit, and to the south of the Princes Freeway. The section of the MMD between points "W" and "Y on the Schematic Plan is situated within approximately 5-10 metres of the southern carriageway of the Princes Freeway.
3. The northern wall of the Mine's open cut pit consists of 7 levels, and is approximately 100 - 120 metres high from its base (the floor of the Mine), to its peak (surface level). Each level typically comprises a flat section known as a bench or berm, and a steep sloping section known as a batter. The entire northern wall of the Mine is commonly referred to as the "northern batters", with the smaller individual sections of the northern batters named according to the stages of the Mine field development in which they were created: i.e. East Field Northern Batters, South West Field Northern Batters.
4. The eastern section of the northern batters, the East Field Northern Batters, was developed in the early stages of the operations of the Mine, prior to the privatisation of the Mine in 1996.
5. Three Council Gross Pollutant Traps (GPTs) remove sediment and litter from storm and rain water, prior to it being discharged into the MMD. Council employees and contractors maintain the three GPTs, which are located at:
   • (a) Keegan Street (on Council land);
   • (b) Chapel Street (on Council land); and
   • (c) off Miners Way (on the HPP land).
6. The approximate locations of the GPTs are shown on the Plan annexed to this Statement and marked "C".
7. Defendant's version: On 23 July 2007, the West Gippsland Catchment Management Authority (WGCMA) declared, pursuant to section 188 of the Water Act 1989 (Vic) that the MMD was a designated waterway within the Lake Wellington River Management District.

22A. Plaintiff's version: On 23 July 2007, the West Gippsland Catchment Management Authority (WGCMA) purported to declare, pursuant to section 188 of the Water Act 1989 (Vic) that the MMD was a designated waterway within the Lake Wellington River Management District_._ The Plaintiff says that the MMD is not a waterway for the purposes of the Water Act 1989 and that the fact contained in paragraph 22 is not relevant to the issues before the Court in this proceeding.

1. In or about 1946, land to the south of the Morwell township was identified by the State Electricity Commission of Victoria (SECV) as a location where brown coal might be mined for the purpose of producing fuel in the form of brown coal briquettes to be sold in the competitive market including the construction of a briquette factory (briquette project).
2. At some time prior to 1949, the SECV acquired the HPP land pursuant to s15 of the State Electricity Commission Act 1928 (Vic) (1928 SEC Act) upon which acquisition the land acquired was deemed to be unalienated lands of the Crown. The HPP land was acquired for the purpose of developing a coal seam on that land.
3. On 20 July 1948, State Electricity Commission Act 1948 (Vic) authorised the carrying into effect of the further development of the briquette project.
4. In or about April 1949, in preparation for the coal mining activities to be conducted on the HPP land, the SECV commenced work on the HPP land for the construction of:
   • (a) a cut off drain for the purpose of diverting flows of storm and rain water runoff from the catchment of the drain from entering the open cut mining operations proposed to be conducted by the SECV on the HPP land (original drain); and
   • (b) drainage, ramp and road access, water supply, worker accommodation and other infrastructure.
5. The original drain was constructed for the benefit and protection of the open cut mining operations to be conducted by the SECV, and for the benefit and protection of the owners of the land from time to time comprising the Mine.
6. At the time of its construction, the drainage water from the southern part of the Morwell township flowed freely in a south-westerly direction, generally following the contours of the land at the time. [Plaintiff's sentence (not agreed to by the Defendant): As at that time, the flow of water onto what was the SECV land was a natural flow of surface water.] The original drain (as at 1949) was not required for the purpose of providing drainage to the southern part of the township of Morwell, nor constructed for the benefit or protection of the township or citizens of the southern part of Morwell, nor as part of a system of drainage for the benefit or protection of the southern part of the township of Morwell.
7. The Council did not pay for or contribute to the costs of the construction of the original drain, and did not construct the original drain.
8. Annexed to this statement and marked "D" are copies of some photographs showing the construction of the original drain.
9. In or about November 1955, coal mining on the HPP land commenced.
10. From either 1955 or 1958 until approximately 1959, coal mined on the HPP land was transported for use in the production of electricity at what was then known as the Morwell Power Station, which was not located on the HPP land.
11. In approximately August 1959, coal mined on the HPP land began to supply the newly completed briquette factory adjacent to the HPP land (briquette factory).
12. The supply of coal mined on the HPP land to the briquette factory lasted only a short time as the quality of the coal was unsuitable for the production of briquettes.
13. From about 1958, coal mined on the HPP land was shipped by rail for use in the production of electricity on land other than the HPP land.
14. From 1959 until the late 1990s the briquette factory was supplied with coal from sources other than the open cut mine on the HPP land.
15. At some time in 1959, the SECV recommended and the State approved the construction of six 200 MW electricity generation units to be built at Hazelwood to be fuelled by coal supplied from the Mine.
16. In or about July 1964, coal mined on the HPP land was first supplied to Hazelwood Power Station situated on the HPP land.
17. In or about May 1965, forecast demand for coal from the Mine was increased as a result of the approval by the State of an increase in generating capacity at the Hazelwood power station of two 200MW units.
18. In about 1965 or 1966, due to projected increases in demand for coal, long term plans for the Mine were modified to increase excavation beyond the western and southern extent of the existing Mine.
19. Between 1973 and 1976, the original drain was partly deviated on the HPP land, and was significantly redeveloped by the SECV. The relocation and redevelopment works conducted between 1973 and 1976 included the installation of the low flow pipe mainly beneath the upper channel of the original drain. The works were designed and financed by the SECV, who communicated with the Council, the Latrobe Valley Water and Sewerage Board and the Country Roads Board in relation to them.
20. Defendant's version: The relocation was necessary because:

(a) of the continuing need to divert flows of water away from the open cut of the mine; and

(b) the original drain would otherwise have been severed by the open cut mining operations at the Mine in December 1974

42A. Plaintiff's version: the relocation occurred in order to:

(a) ensure that there was sufficient capacity in the MMD for the collected, concentrated and aggregated surface water runoff from the southern part of the township of Morwell, and confirm interconnections with Council drains;

(b) take into account the anticipated flow of surface water from the Morwell Bypass when constructed;

(c) accommodate the coal mining operations within the Hazelwood Coal Mine, which were expected to intersect the original drain;

(d) perform limited requirements for drainage of surface water runoff from the HPP land;

(e) provide a safer means of transporting drainage water previously channelled through the original drain across the northern batters of the Hazelwood Coal Mine.

1. The original drain, as partly relocated and redeveloped is the MMD.
2. Between approximately 1980 and 1985, the Road Construction Authority conducted drainage works in Morwell associated with the construction of the Morwell Bypass of the Princes Freeway in consultation with the SECV and the Shire of Morwell.
3. As at 1984, the Road Construction Authority intended that all existing outlets from the built up area of southern part of Morwell be connected to the road drainage system for discharge into the MMD.
4. In or about the mid 1980's, Morwell Bypass works were performed including drainage infrastructure through which water from the Princes Freeway surface flows into the MMD. The works conducted at this time included the construction of the pipes or culverts into the MMD labelled "S", "T, "U", "V", "W", "X", "Y" and "Z" on the Schematic Plan.
5. On 16 December 1986, any land forming part of the HPP land which remained unalienated lands of the Crown vested in the SECV by section 4(b) of the State Electricity Commission (Further Amendment Act) 1986 (Vic).

1. From 1948 until about 1994, the Mine and the land on which it was situated was either unalienated Crown land or otherwise vested in the SECV.
2. From about 1994 until about 1995, the Mine and the HPP land itself was owned and vested in Generation Victoria by operation of the Electricity Industry Act 1993 (Vic) (EIA Act) and an allocation statement dated 23 December 1993. Generation Victoria conducted open cut coal mining and electricity generation activities on the HPP land. Generation Victoria was a public authority.
3. In or about January 1995, the Mine and the HPP land on which it was situated was owned and vested in Hazelwood Power Corporation Pty Ltd (HPC) by operation of section 153D of the EIA Act as amended by the Electricity Industry (Further Amendment Act) 1994 (Vic) and an allocation statement dated 31 January 1995. At this time, all of the shares in HPC were owned by or on behalf of the State of Victoria.
4. On 20 June 1995, the definition of "generation company" under the EIA Act was amended to remove the requirement for the shares in such a company to be publically owned. However, at this time, all of the shares in HPC continued to be owned by or on behalf of the State of Victoria.
5. By reason of the operation of s 19 of the Electricity Industry (Further Amendment) Act 1995 (Vic), on 12 December 1995, HPC was divested of the HPP land which land reverted to the Crown and was deemed to be unalienated Crown land free of all encumbrances.
6. On 12 December 1995, the HPP land was the subject of a Crown grant to HPC which grant, by reason of s 19 of the Electricity Industry (Further Amendment) Act 1995 (Vic), was free of all encumbrances, estates and interests.
7. On 14 May 1996, the Governor in Council granted a mining licence to HPC pursuant to section 47A of the Mineral Resources Development Act 1990 (Vic) (MRSD Act).
8. On 2 August 1996, HPP was formed.
9. On 10 September 1996, the Governor in Council:
   • (a) revoked the mining licence granted on 14 May 1996;
   • (b) granted Mining Licence 5004 to HPC;
   • (c) approved an authority to commence work; and
   • (d) approved a work plan, including a rehabilitation plan for the HPP land - all of which were to come into operation after completion of the sale of all shares in HPC pursuant to Share Sale Agreement dated 4 August 1996.
10. In or about September 1996, the whole of the shares in HPC and the HPP land were acquired by HPP.

Privatisation process - Morwell Industrial Estate

1. Amongst the former SECV lands which were privatised by the State of Victoria in 1996, is the SECV Workshop area, now known as the Morwell Industrial Estate (MIE).
2. The MIE is depicted on the Schematic Plan.
3. Prior to the privatisation of the MIE, the SECV, HPC and an additional interested party, PowerWorks Pty Ltd (PowerWorks), engaged in discussions in relation to the upgrade of certain water, drainage, sewerage and road infrastructure within the MIE.
4. In July 1996, Council, the SECV, HPC and PowerWorks reached an agreement whereby (amongst other things):
   • (a) the SECV, HPC and PowerWorks each agreed to make a financial contribution towards the cost of upgrading certain road and drainage infrastructure within the MIE, and the capital cost of installing a GPT on a drainage outfall into the MMD; and
   • (b) Council agreed to assume responsibility before 30 September 1996 (or if possible, using reasonable endeavours, before this date), for certain road and drainage infrastructure in the MIE, and to maintain, upgrade and repair it in accordance with Council's obligations under the Local Government Act 1989 (Vic).

A copy of this agreement is annexed to this Statement and marked "E".

1. The rationale for requiring that the SECV, HPC and PowerWorks contribute towards the cost of upgrading water, drainage, sewerage and road infrastructure in the MIE is explained in a facsimile from the Department of Treasury and Finance to the SECV dated 5 July 1996, a copy of which is annexed to this Statement and marked "F".
2. In or about March 1998, SECV, HPP, PowerWorks and Council entered into a further agreement under which Council assumed ownership of and responsibility for certain road and drainage infrastructure in the MIE. A copy of this agreement is annexed to this Statement and marked "G".

1. On 20 June 1997, the SECV Office of the Administrator provided to Council and HPP a proposed form of easement with respect to the MMD, a copy of which is annexed to this Statement and marked "H".
2. On 18 September 1997, Council's solicitors prepared an alternative form of easement with respect to the MMD, for the consideration of the SECV Office of the Administrator, a copy of which is annexed to this Statement and marked "I".
3. On 2 December 1997, the SECV Office of the Administrator circulated to HPP and Council further correspondence regarding the proposed terms of an easement with respect to the MMD, a copy of which is annexed to this Statement and marked "J".
4. On 3 December 1997, the Council provided a response to the SECV Office of the Administrator's correspondence dated 2 December 1997, a copy of which is annexed to this Statement and marked "K". This correspondence proposed further amendments to the terms of the easement.
5. The parties have not located any further correspondence after 3 December 1997 in relation to the terms of an easement with respect to the MMD. Arrangements for an easement with respect to the MMD were not finalised, and no easement was granted or registered with respect to the MMD.

Other dealings between the parties in relation to the MMD

1. In or about March 2009, HPP contacted Council, West Gippsland Management Authority (WGCMA) and VicRoads to request that their representatives attend a meeting in order to discuss the future management and maintenance of the MMD.
2. In or about December 2009, following three meetings attended by representatives of HPP, Council, VicRoads and WGCMA, these parties agreed to make a financial or in-kind contribution towards the cost of maintaining the MMD, as follows:

Clean up vegetation within the high flow of the drain (per WGCMA scope and estimate)

Repair sink hole in the high flow channel and repair pit (per HPP geotech scope)

Install litter trap on Chapel St and Commercial Rd sources of rubbish

Cut V notch 1st drop structure and regrade drain contents

Annual aquatic spraying from pipe outlet to 1st drop structure

1. WCGMA pay for long reach excavator
2. LCC pay for Auscut
3. WGCMA agreed to conduct

1. On or about 7 February 2011, following heavy rainfall in the catchments surrounding the MMD, the following occurred (in no particular order):
   • (a) a large sinkhole developed in the upper channel of the MMD approximately 100m to the east of the location marked "X" on the Schematic Plan ;
   • (b) a land movement was observed to have occurred in the northern batters of the Mine in the vicinity of the sinkhole location; and

(c) cracking was observed in the pavement of the Princes Freeway

1. The parties disagree as to the cause of the Incident.
2. In response to the Incident:
   • (a) a large number of regulatory directions and notices were issued to Hazelwood by the Department of Primary Industries (DPI) and the Department of State Development, Business & Innovation (DSDBI), including under s 110 of the MRSD Act. Amongst other things, these notices required Hazelwood to:
     • (i) undertake repairs and works on the MMD;
     • (ii) install a range of monitoring equipment in the Mine; to monitor relevant geotechnical conditions including ground movements, and groundwater levels;
     • (iii) drill horizontal bores in the northern batters; and
     • (iv) undertake, assisted by external consultants, various studies;
   • (b) DPI / DSDBI commissioned a number of reports and technical studies in relation to the incident, including from the Technical Review Board, an advisory body established under the MRSD Act; and
   • (c) the Princes Freeway Morwell Bypass was closed for a period of several months as a safety precaution.
3. On 8 April 2011, DPI issued a notice to Hazelwood under section 110 of the MRSD Act, reference no. AB30110024 (Section 110 Notice). The Section 110 Notice directed Hazelwood to undertake the following works:
   1. ...[U]ndertake the necessary study(s) to determine a suitable design and specification for the repair and ongoing maintenance of the Morwell Main Drain such that all leakage from the drain and the pipeline under the drain is prevented from entering the Hazelwood Mine and destabilising the northern mine batters and provide such study(s) to the Inspector;
   2. ...[C]omplete all works that are recommended by the study(s) that are necessary to repair the Morwell Main drain such that all leakage from the drain and the pipeline under the drain is prevented from entering the Hazelwood Mine;
   3. ...[I]mplement and establish all procedures and resources necessary to for the prevention of such leakage from the drain and the pipeline under the drain into the Hazelwood Mine including obligations in relation to ongoing monitoring and reporting to the Inspector;
   4. At all times.... comply with all recommendations, requirements and specification of the study(s) required by clause 1, above.
4. Annexed to this Statement and marked "L" is a copy of the Section 110 Notice.
5. Between November 2012 and July 2013, HPP conducted works on an approximately 1.8km long section of the MMD, between approximately points "A" and "S" on the Schematic Plan, in response to requirements 1 and 2 of the Section 110 Notice. These works involved:
   • (a) over a 600m section of the MMD between approximately chainages 640 1230:
     • (i) the installation of a composite liner comprising Teranap 531 (a bitumen infused geotextile fabric), Tencate Miragrid GX130/130 (a polyester coated geogrid), 300mm of non-dispersive clay compacted to 98%, and subgrade of general fill. This location included the location where the sinkhole had developed in February 2011; and
     • (ii) the installation of an 800m HDPE slip lining pipe within the concrete low flow pipe, laid in 3 sections;
   • (b) over a 1200m section of the MMD between approximately chainages 0 - 640 and 1230 - 1800:
     • (i) re-grading the upper channel of the MMD (filling and re-compacting any cavities or soft areas discovered through the earthworks);
     • (ii) and compacting the surface with 300mm of non-dispersive clay, and 150mm of topsoil and grass seed;
     • (iii) installation of rock chutes consisting of 100 - 250mm rock beaching over bidim 64 geotextile fabric; and
   • (c) over a 60m section of the MMD (chainage 480 - 540), replacement of the existing low flow pipe with an 800mm steel enforced polypipe, and the installation of a new junction pit at chainage 540.
6. Prior to the design for the works on the MMD being approved by DPI / DSDBI for the purposes of the Section 110 Notice, HPP and DPI consulted Council, and WGCMA.
7. The Section 110 Notice was one of a number of notices issued to Hazelwood in response to the Incident. The cost of the works and studies conducted by HPP in response to these regulatory notices exceeded several million dollars.
8. Subsequent to the Incident, solicitors for Council and HPP exchanged letters dated 20 September 2011, 3, 12 and 19 July 2013 in relation to the MMD. In these letters, amongst other things:
   • (a) HPP requested that Council provide a written explanation as to the basis of its rights to discharge water (including storm water from town drains) into the MMD, or in the absence of a sufficient explanation of its rights, within 90 days:
     • (i) cease discharging water into the MMD; or
     • (ii) submit a design solution, at its cost, to ensure that any water it discharges into the MMD does not enter HPP's land;
   • (b) HPP alleged that by virtue of the operation of s 189 of the Local Government Act 1989 (Vic) ("LG Act"), a section of the MMD on HPP's land is vested in Council, and Council is responsible for its management and control; and
   • (c) Council denied that the MMD was a public drain within the meaning of s 198 of the LG Act.

Annexed to this Statement and marked "M" is a copy of each of the letters dated 20 September 2011, 3, 12 and 19 July 2013.

1. Since it has become the registered proprietor of the HPP land, HPP has erected and/or maintained a barbed wire perimeter fence around the Mine of varying height (approximately 2 - 3 metres).
2. A padlocked gate has been installed in the fence in the vicinity of the Council GPT situated on the HPP land. Council's employees and contractors do not have keys to the padlock. Council employees and contractors have gained access to the HPP land through this gate, following consultation with Hazelwood's employees and contractors, on at least the following dates in order to conduct maintenance works on the GPT: 1 July 2004, 13 October 2006, 10 September 1997, 8 October 2008, 18 November 2009, 2 September 2010, 29 April 2011, 29 November 2011, 6 December 2012, 16 July 2013, 13 November 2014.

1. Storm and other rain water flows into the MMD:
   • (a) Through a network of Council pipes and drains located in the southern part of the township of Morwell. These pipes and drains allow water to flow into pipes and drains located in the Princes Freeway reserve, and discharge into the MMD through the pipes and culverts located on HPP's land. This flow enters the MMD at discharge locations marked A, S, X, Y and Z on the Schematic Plan**.**
   • (b) Through a network of Council drainage pipes located in the Morwell Industrial Estate. These pipes and drains allow water to flow into the MMD through the pipes and culverts located on HPP's land. This flow enters the MMD at discharge locations marked A, B, C, D on the Schematic Plan;
   • (c) Through the pipes located in the Freeway Reserve. These pipes allow water to flow into the MMD through the pipes and culverts located on HPP's land. This flow enters the MMD at discharge locations marked S, V, W, Y, X and Z on the Schematic Plan;
   • (d) Plaintiff's version: Overland from HPP land upstream of the discharge locations into the MMD set out above

Defendant's version: Overland from HPP land upstream of the discharge locations set out above and overland from HPP land immediately to the south of the MMD.

1. In summary:
   • (a) water entering the MMD at locations "V" and "W" is water solely from the Princes Fwy surface and reserve;
   • (b) water entering the MMD at locations "S", "X", "Y" and "Z" is a mixture of water from the Princes Freeway surface and reserve and the southern part of the Morwell township;
   • (c) water entering the MMD at locations "B", "C" and "D" is water solely from MIE;
   • (d) water entering the MMD at location "A" is a mixture of water from the southern part of the Morwell township and the MIE;
   • (e) overland flows of water also enter the MMD from HPP land.

1. The volume and proportionate contribution from each source at each discharge point depends upon the duration and intensity of the particular rainfall event.

E. APPLICABLE REGULATORY REGIME FROM TIME TO TIME

1. Mining operations are conducted on the HPP land pursuant to Mining Licence 5004 (Mining Licence). The Mining Licence was issued to HPC pursuant to an Order made by the Responsible Minister for the Electricity Industry Act 1993 (Vic) on 10 September 1996. The Mining Licence is subject to a Schedule of Conditions.
2. The Schedule of Conditions for the Mining Licence includes the following conditions:

1.1 Work shall be carried out in accordance with the approved work plan (incorporating a rehabilitation plan) as amended from time to time in accordance with the Mineral Resources Development Act 1990 (MRD Act). Where any inconsistency occurs between the work plan and other licence conditions or regulations, the licence conditions and regulations have precedence.

2.1 Where public access is a safety hazard within the mining licence, the licensee must fence and signpost the area to ensure public safety is maintained.

5.1 Any discharges from the licence area shall be minimised and any water discharged must be as free as possible of pollutants, save as provided by any licence issued pursuant to the Environment Protection Act.

5.4 Rainfall and other natural waters shall be diverted away from works area so as to control erosion, pursuant to Condition 7. However, such works shall, as far as practicable, not cause undue alteration to the general drainage pattern beyond the licensed area.

8.1 The licensee shall undertake all necessary works to ensure that the potential for erosion of land affected by mining is minimised.

8.2 Should erosion occur, the licensee shall take all practical steps to minimise the erosion to the satisfaction of an Inspector.

15.1 Progressive reclamation will be conducted as per the rehabilitation plan. In addition, any further rehabilitation work will be carried out at the direction of an Inspector.

15.2 As and when directed by an Inspector of Mines, despite any compensation agreements between the licensee and the owner of any private land in the licence, the licensee shall undertake progressive reclamation of land on the area subject to surface disturbance.

16.1 Final reclamation will be in accordance with the rehabilitation plan and any additional requirements as directed by an Inspector.

21.1 The Mineral Resources (Health and Safety for Large Open Cut Mines) Regulations 1995 will apply to the licensee.

21.2 Any subsequent Regulations issued under the act will also apply.

1. Annexed to this Statement and marked "N" is a copy of the Mining Licence including the Schedule of Conditions.
2. The Mining Licence has been amended since 1996, most significantly in 2009 in order to amalgamate additional mining licences 5449, 5450, 5451 and 5452 associated with the West Field development of the Mine.

1. On 10 September 1996, the Responsible Minister approved the following documents with respect to the operation and rehabilitation of the Mine:
   • (a) Hazelwood Power Corporation, 1 June 1995, Mining Licence Application, Work Plan Submission ("Work Plan Submission");
   • (b) Hazelwood Power Corporation, undated, 5 Year Rolling Mine Rehabilitation Plans Summer - Autumn 1996;
   • (c) Report to Generation Victoria prepared by DPS Pty Ltd, December 1994, Morwell Mine, Morwell Mine Rehabilitation Concept Plan;
   • (d) Report to Hazelwood Power Corporation prepared by DPS Pty Ltd, May 1995, entitled Land Capability Analysis Hazelwood Power Corporation Mine and Environs.
2. The Work Plan Submission stated as follows in relation to the final (end-of Mine life) rehabilitation plans with respect to the Mine:

A Rehabilitation Concept Master Plan has been produced for the Mine. Its purpose is to provide an overall vision for the ultimate rehabilitation of all land disturbed by mining activities.

The plan shows the proposed rehabilitation treatment for all areas, including the Mine proper, overburden dumps, buffer areas, transport corridors, operational areas and infrastructure.

Refer Figure 11: Drawing No. P45/197/43 "Mine Final Rehabilitation Concept Plan"

The preferred option for the worked out part of the Mine is to create a lake. At this time only preliminary studies into the creation of a lake have been carried out.

The areas surrounding the Mine will ultimately be used

Refer Appendix 2: "Morwell Mine Rehabilitation Concept Master Plan".

Refer Appendix 3: "Land Capability Analysis HPC Mine and Environs".

1. Annexed to this Statement and marked "O" is a copy of the Work Plan Submission.
2. The Work Plan has been amended several times since 1996, most significantly in May 2009 in order to accommodate the West Field extension of the Mine (Work Plan Variation).
3. The Work Plan Variation plan states as follows in relation to final (end-of Mine life) rehabilitation plans with respect to the Mine:

The constrains arising from issues, described in section 6.3, particularly timely access to coal batters and benches, limit opportunity timely access to coal batters and benches, limit opportunities for progressive rehabilitation.

The following mine closure concept is considered the base case as it is unreasonable to prejudge community aspirations that may prevail at the time of closure.

The main features of the conceptual mine closure and rehabilitation plan for the Hazelwood Mine are:

• Pit void: the pit will be allowed to fill with water creating a lake. This will initially take place by continuing aquifer depressurisation pumping, until the weight is enough to stabilise the batters (currently estimated to be RL - 22m). The pit lake will then fill slowly over a period of decades or more to its hydrological equilibrium (currently estimated at RL + 8m).

• High-magnesium ash: The power station coal ash is environmentally relatively benign as will be placed at the eastern end of the void, in the Hazelwood Ash Retention Area (HARA). It is separated from the lake by the Hazelwood Ash Retention Embankment (HARE).

• Overburden batters: Overburden batters will be reshaped to no steeper than 3H:1V with safety berms introduced where the vertical distance exceeds 20 m, topsoiled and seeded.

• Coal batters: New permanent coal batter faces will be shaped to no steeper than 2.5H:1V and preferably 3H:1V. Non-permanent coal batters will be maintained as they are until they are dug as permanent coal batters. Existing batters and benches carrying critical conveying infrastructure are considered non-permanent batters as the digging program has been revised to allow a final retreat digging pass that will convert them to permanent batters, i.e. no steeper than 2H:1V and preferably 3H:1V. Once the bench has been completed, exposed coal will be progressively covered with overburden from the working face of the mine and revegetated on decommissioning.

• Mining infrastructure will be decommissioned and removed;

• Public access: these are matters to be discussed closer to the time of closure, although the intent is to ensure a site that provides safe access if that is deemed to be a requirement at the time.

• Ecological function: Revegetation options are constrained by a shortage of topsoil. IPRH has developed a site-specific species planting guide.

6.7.2 Further Work - Mine Closure Investigations

Further investigations to provide data for mine-closure planning may be required to address the complex issues associated with, in particular, long-term stability of the mine. These investigations include a review of previous studies to establish whether the results of those studies hold for expected changes in external influences.