Pumpa & Ors v Murray Darling Basin Commission & Anor

Pumpa & Ors v Murray Darling Basin Commission & Anor - [2008] VCAT 2268 - VCAT 2008 case summary — Zoe

[8]

The applicants in this proceeding are owners of farming properties in Winlaton.
One of the abiding and intractable problems afflicting Australia's major river system, the Murray Darling, is salinity. The Murray Darling Basin Commission is a body established by an agreement between three States, namely New South Wales, Victoria and South Australia and the Commonwealth of Australia and legislation of the Parliaments of those States and the Commonwealth. The present arrangements reach back to an agreement entered into between the parties as long ago as 1914. The present agreement under which the Commission operates was made between the States and the Commonwealth on 24 June 1992.
One of the programs adopted to mitigate salinity in the Murray River entailed damming Barr Creek to the south of the applicants' farm properties. In 1968 a program known as the Barr Creek Drainage Disposal Scheme was implemented. This entailed diverting saline water which would otherwise have flowed down Barr Creek and ultimately into the Murray River and re-directing it for evaporation purposes to a lake system, the largest of which lakes is Lake Tutchewop. The other smaller lakes in the system are Lake William and Lake Kelly and Lake Little. Before the drainage disposal scheme, Lake Tutchewop was a freshwater lake. According to the applicants in the years following the implementation of the drainage diversion scheme there was an increase in the salinity of Lake Tutchewop with an escape of saline water from that lake into groundwater under the applicant's land. This has led to the groundwater level under their land being raised and its salinity increased.
According to the applicants the increase in the lake's salinity ceased in the early 1990s. They say this is because the saline water diverted to the lake was migrating out of the lake into the groundwater affecting the fertility of their land. They have sued the Commission and Goulburn-Murray Water Corporation, the State authority charged with the responsibility of implementation of the Murray Darling Basin Agreement on behalf of the State of Victoria for damages arising out of the degradation of their land by salinity.
In addition to the complaints which the applicants make based on the drainage diversion scheme they also allege that a channel operated by Goulburn-Murray principally for irrigation purposes and known as the 6/7 Channel has led to the escape of water onto their land, once again leading to a rise in the water table and damage to their properties.
The respondents seek relief by way of summary dismissal of these damages claims against them contending that they are frivolous, vexatious, misconceived or otherwise an abuse of process.

[11]

He said insufficient facts were alleged to invoke any other conceivable jurisdiction of the Tribunal, the claim was statute barred and was embarrassing as pleaded. Mr Scott took me first to the 'Form 9' or face sheet of the applicants' claim. This stated that the claim was being brought under the Water Act 1989. He observed that whilst no particular provisions of the Water Act creating any cause of action were referred to, the matters alleged as far as they went clearly sought to invoke the cause of action established by Section 157 of the Water Act 1989.
Mr Scott noted that Section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 empowers the Tribunal to grant a summary dismissal of a proceeding that is 'frivolous, vexatious, misconceived or lacking in substance ... or otherwise misuse of process'. He submitted that the claim against his client was misconceived in the sense of being obviously untenable or groundless. He said an order under the section could be made in favour of a respondent who had a clear defence to a proceeding. He referred to Norman v Australian Red Cross Society (1998) 14 VAR 243.
According to Mr Scott whilst the applicants' application was not entirely clear on its face it necessarily invoked Section 157 of the Water Act 1989 as the basis for the claim against his client. According to Mr Scott the cause of action created by Section 157 of the Water Act 1989 could be brought only against a body which was an 'Authority' under the Water Act. He observed that whilst the applicants' application alleged that Goulburn-Murray was such an authority, it made no such allegation against his client. For that reason alone a claim based on Section 157 of the Water Act against the Murray Darling Basin Commission must fail, he said. Next he observed that the cause of action under Section 157 was made good only where it appeared that there had been a flow of water from the 'works' of the relevant authority. Mr Scott observed that the applicants' statement of claim did not allege any connection between the Basin Commission and any 'works'. Next said Mr Scott, the statement of claim did not allege any sufficient facts to make good the cause of action in so far as it alleged no flow 'involving' the Basin Commission which was alleged to have caused damage or loss to the applicants. The statement of claim did allege a flow or escape of salt water from Lake Tutchewop since about the early 1990s. The statement of claim alleged no connection between the Commission and the Barr Creek Drainage Disposal Scheme before 2000.
Mr Scott noted that the statement of claim made no reference to Section 17(3) of the Murray Darling Basin Act 1993. He said he apprehended however that the claim against his client was at least to some degree intended to be based on that section. The section provides as follows:

[25]

Dr Sadler of Counsel appeared for the second respondent and likewise contended that the claim against his client should be summarily dismissed pursuant to Section 75 of the Victorian Civil and Administrative Tribunal Act 1998.
Dr Sadler contended as had Mr Scott that the claims mounted in the Statement of Claim should be regarded as made under Section 157 of the Water Act. He analysed the various elements of the cause of action created by this section. He submitted that the applicants' claims did not meet the requirements of Section 157 of the Water Act since sub-section (1) of that section required that there be a flow of water from the relevant authority's work onto any land. Dr Sadler did not deny that his client was an 'authority' for the purposes of the Water Act. He said however that on the facts alleged there was no flow of water onto land for the purposes of Section 157 and further that the injury or damage alleged was not caused by the water or the flow but by the chemical properties of the water namely its increased salinity. He also submitted that the claims made by the applicants were largely or completely barred by the Limitation of Actions Act.
Dr Sadler contended that for there to be a flow of water 'onto' land there must be at least some element of surface flow and a migration of water through the ground was insufficient to make out this element of the cause of action. He referred to one of my decisions in Murray Goulburn Co-operative Limited v Leongatha Water Board (1996) 11 VAR 205, 210. He noted a contrary decision of Senior Member Cremean in Lakobend Pty Ltd v City of Boroondara [2004] VCAT 1709 and observed in a more recent decision, namely Transpacific Cleanaway Limited v South East Water Limited [2008] VCAT 1798 I had adhered to the views which I stressed in the Murray Goulburn case. According to Dr Sadler the preposition 'onto' was appropriate to refer to a flow of water onto the surface of land rather than through it. He also noted that the Water Act defined work so as to include things 'on, above or under land' showing an intention to distinguish between the surface of land. He also referred to Section 199 of the Local Government Act 1989 which provides as follows:
1. Concentration or diversion of drainage

[83]

Counsel for both respondents correctly observed that Mr Miller's submissions included a number of contentions which were not to be found in the statement of claim already filed. This was conceded by Mr Miller. He said that in any event his clients would wish to reformulate their claim asserting additional facts, making clearer references to Section 157 of the Water Act and introducing the claim or claims under Section 16 of that Act. Mr Scott in particular objected to 'quotation in Mr Miller's submissions of certain documents which had not been properly proven'. I did not finally rule on those objections. I note however that in any application for summary dismissal it is incumbent upon the applicant for summary dismissal to show (as based upon the authorities referred to in this regard by Mr Miller and many others) that there is no basis in fact or law for the claim sought to be summarily dismissed. No doubt the types of objection made by Mr Scott would be well made at trial. In the present case however, the burden of persuasion and proof lies not upon the applicants but upon the respondents as claimants for summary dismissal. If for instance the degree to which the Murray Darling Basin Commission took control of the relevant diversion scheme or 'occupied' its works whether jointly or otherwise remains uncertain, then on this point of uncertainty no summary dismissal should be made. On that particular point it would only be proper to base a summary dismissal if the facts were clearly and incontrovertibly proven by the respondents or one or both of them. Once Mr Miller conceded a need to re-plead his clients' claim the respondents in seeking summary dismissal were left with the rather more difficult task of shooting down a moving target rather than a 'sitting duck'. What these respondents are seeking is not merely the strike out of a pleading but the dismissal of the underlying cause of action, hence the necessity for their success to achieve clear proof of any facts upon which they rely for the summary dismissal and to establish clear and incontrovertible legal rules to the extent that questions of law are relied upon to justify the summary dismissal.
I turn first to the claim postulated against the Basin Commission under Section 157 of the Water Act. I should note at the outset that I heard no submissions as to the precise nature of the Commission or whether it should be regarded as a creature of Federal Law or State Law or both. In particular I heard no arguments based upon Chapter III of the Commonwealth Constitution or any submissions as to whether a claim of the type postulated here should be regarded as within Federal jurisdiction. If the latter were the case it would be necessary to consider whether this Tribunal could be regarded as a Court of a State capable of exercising federal jurisdiction under Chapter III of the Commonwealth Constitution. As it is I heard no submissions on this point and so I will say nothing further on the subject.
The scheme of the Water Act which codifies liability for the consequences of flows of water in Victoria superseding the old Common Law of Nuisance is generally to render a person who causes an unreasonable flow of water that inflicts damage liable for that damage (Section 16). 'Authorities' under the Water Act and licensees under the Water Industry Act are put in a somewhat different situation. With respect to flows of water from their works, the authorities and licensees are liable only if the flows are unreasonable and only if the flows are the result of intentional or negligent conduct by the authority or the licensee (Section 157 Water Act 1989, Section 74 Water Industry Act 1994). On the question of negligence there is a reverse onus so it is incumbent upon the authority or the licensee to disprove negligence rather than upon the claimant to prove it. An ordinary citizen is subject to strict liability for the consequences of any unreasonable flow of water which he causes but no such strict liability attaches to an authority or licensee. It is in that context that the provision in Section 157 of the Water Act which attaches liability under that section only to an 'authority' must be seen. Parliament has established a deliberately different regime of liability for unreasonable water flows for authorities hence the requirement that the respondent to a Section 157 claim must be an 'authority' within the meaning of the Water Act is an essential part of the cause of action.
The reference in Section 17(3) of the Murray Darling Basin Commission Act to Section 157 is problematic. It provides for claims for 'compensation' to be brought under Section 157. Section 157 as its own terms indicate provides for damages claims not for compensation claims. Further, the compensation claims which according to Section 17(3) may be brought under Section 157 of the Water Act are compensation claims 'under this Act', that is, under the Murray Darling Basin Act 1993. It is not evident however what provision of that Act creates an entitlement to bring a claim for compensation. For that matter, if there were such a section, one might ask why should the compensation claim not be brought under that section? what need would there be to have resort to Section 157 of the Water Act?
Whether there are any satisfactory answers to these difficult questions I need not ponder today. In my view, it is essential for an effective claim under Section 157 that the respondent to it be an authority under the Water Act. In my view, the fact, if it be the fact, that the Basin Commission have been co-operating, approving or co-occupying works with Goulburn-Murray which clearly is an 'authority' under the Water Act cannot transform the Commission itself into an authority under the Water Act hence, whilst the combination of Section 17(3) of the Basin Commission Act and Section 157 of the Water Act might, other things being equal, authorise a claim to be brought against Goulburn-Murray, these provisions cannot authorise a claim to be brought against the Commission under Section 157.
To the extent that the applicants' claims against the Commission are based on Section 157 of the Water Act they must be dismissed.
Next, I turn to the claim against the Commission in so far as it might be formulated under Section 16 of the Water Act. Aside from any other consideration Mr Scott on behalf of the Commission submitted his client was protected by Section 17(2) of the Water Act which provides as follows:

[85]

Mr Scott's contention was that this provision did not merely protect an 'authority' from liability under Section 16 remitting its liability if any, to the rather different regime under Section 157 of the Water Act. The sub-section he said went further such that if there were a flow of water from the works of an authority no other person could be liable. A somewhat similar issue arose in Barlow v South East Water Limited [2001] VCAT 659; (2001) 17 VAR 382 a proceeding in which coincidentally Mr Scott also held a brief, on that occasion for South East Water Limited, a licensee under the Water Industry Act. In Barlow's case I held that Section 17(2) did not provide a protection to sub-contractors to the licensee. The words 'in respect of' have been held to be very wide words indeed. On the very limited argument which I have heard in the present case I would not be prepared to regard it as so clearly established as to justify a summary dismissal that Section 17(2) of the Water Act operates to protect persons other than licensees or authorities from liability under Section 16 of the Water Act.
But are there any other reasons why a claim under Section 16 against the Commission would be deemed to fail? Dr Sadler who appeared for Goulburn-Murray, it will be recalled, submitted that there could be no claim for damages against his client either under Section 16 of the Water Act or under Section 157 because both provisions require that there be a flow of water 'onto' any land. He referred to two of my decisions in which I held that the requirement of a flow of water 'onto' land necessitated that there be at least to some degree, a surface flow of water and not a merely subterranean one. Mr Scott did not postulate the same submission himself but informed me he was content to support it if it found favour. For his part this proposition was denied by Mr Miller who relied upon a decision of Senior Member Cremean in Lakobend Pty Ltd v City of Boroondara [2004] VCAT 1708. He submitted in any event that there was clearly a flow of water 'onto' Lake Tutchewop. He submitted that for most if not all the time, Lake Tutchewop was dry.
I recently considered the issue of whether the stipulation in Sections 16 and 157 of the Water Act that there be a flow of water 'onto' any land required a surface flow. In Transpacific Cleanaway Limited v South East Water Limited [2008] VCAT 1798 I reaffirmed the view which I have taken in Murray Goulburn Co-operative Limited v Leongatha Water Board (1996) 11 VAR 205, 210 at [40] in the Transpacific case I said:

[87]

. For those reasons I remain of the same opinion in the present case, hence for the applicants to succeed they must demonstrate at least to some degree a surface flow.
I have heard no evidence and therefore it would be wrong to be too downright on the subject of the types of flows which are alleged. I accept for the purposes of the present application that the operation of the diversion scheme entails at some times and perhaps most times, a flow of water onto the bed of Lake Tutchewop. Hence in that respect there clearly is a flow of water 'onto' land, however it was Dr Sadler's contention on behalf of Goulburn-Murray that this was insufficient to make good the cause of action under Section 157 of the Water Act or if it mattered, Section 16 unless this could be regarded as the same flow which did the damage over which the present proceeding has been brought. The requirements of liability under Section 157 are first, that there be a flow of water from the works of an authority 'onto any land' and secondly that the water causes injury or damage. This second limb of the cause of action to be found in paragraph (b) of Section 157(1) might on one view more happily have been framed as a stipulation that the 'flow of water' causes damage. Nevertheless, the use of the definite article 'the' in paragraph (b) makes clear that the water referred to in that paragraph was the same water as the water constituting the flow referred to in paragraph (a). I accept Dr Sadler's submission therefore that for a successful claim to be brought under Section 157 of the Water Act the damage in question must be caused by the same flow of water that flowed 'onto any land'. When one looks at the structure of Section 16(1) of the Water Act the same analysis leads to the same conclusion, namely that the flow of water 'onto' any land must be the water or the relevant damage, hence if the movement of saline groundwater from Lake Tutchewop into the applicant's farmlands can be regarded as the same flow as the flow of saline water into Lake Tutchewop then the objection to the validity of the claim on this score is answered. As I have previously noted, a summary dismissal should be effected only if the point of fact or law relied upon by the applicant for summary dismissal is clear and incontrovertible. If there is doubt or obscurity on the point no summary dismissal should be made.
Over the years I have heard studies which demonstrate the rate at which tidal flows into bodies of water such as Port Phillip Bay and its constituent bays and coves takes into the bay and then out again with a relatively rapid movement in and out in areas close to the heads such as Swann Bay, the periods of months involved in the movement of waters which reach the northern parts of Port Phillip Bay. In the present proceeding there is simply no evidence of this type, whether the process of ingress of saline water into Lake Tutchewop and its progress through the groundwater is so rapid that it would be reasonable in substance to regard it as one in the same flow or so slow and discontinuous that no single flow could be regarded as taking place between the initial inflow into Lake Tutchewop and the eventual arrival of saline groundwater in the vicinity of the applicant's property remains unknown. In those circumstances I believe I should proceed upon the footing that it remains a logical possibility that there could be proof of sufficient continuity so as to find that there is but a single flow and the requirements of Sections 16 and 157 are met on that score.
I would not effect a summary dismissal based upon a view that there has been no flow of water 'onto' any land which has caused damage.
In Murray-Goulburn Co-operative Co Limited v Leongatha Water Board (1996) 11 VAR 205 a claim was brought against the Board as an authority under Section 157 of the Water Act. The contention was that the water supplied to the Co-operative's factory was infected with blue-green algae as a result of which the Co-operative suffered loss and damage relative to its manufacturing processes with a total claim of $3,742,861. The contaminated water entered the Co-operative's factory through the Board's reticulation system. In those circumstances I held that there had been no flow of water 'onto' any land and the claim failed for that reason. I have already expressed my views in the present proceeding and for the present state of evidence as to whether in the circumstances it could be clearly demonstrated that there was no flow of water 'onto' any land causing the damage alleged in this proceeding. I postulated a further reason why the Co-operative's claim against the Leongatha Water Board should be summarily dismissed, namely that Section 157 of the Water Act was concerned with damage caused by flows of water not by the chemical composition of water. I said:

[90]

It seems to me now as it seemed to me then clear that the Water Act causes of action whether they arise under Sections 11 or 157 are concerned with the effect of flows of water not with the effect of the chemical composition of water. Dr Sadler correctly observes that this point is made the clearer by the existence of a separate cause of action under Section 15 of the Water Act for polluting water. According to Dr Sadler Section 15(2) specifically excludes liability upon an authority for saline water if it is discharged in accordance with by-laws made under Section 161(d) of the Water Act. In the present case we have no idea what those by-laws are nor whether the saline discharges were made in accordance with them. For present purposes however it is sufficient to note that no claim is made under Section 15 of the Water Act. In my view the claim against the Commission based on Section 16 is doomed to fail for that reason.
It follows that both foreshadowed claims against the Commission are doomed to fail for the reasons given. It is demonstrated with the necessary clarity that those claims must fail hence the commission is entitled to a summary dismissal of the claims against it pursuant to Section 75 of the Victorian Civil and Administrative Tribunal Act 1998.
I turn to the claims made against Goulburn-Murray. The same reasoning with respect to the relevance of the chemical composition of the water rather than its flow would appear to defeat a claim against Goulburn-Murray whether that claim be mounted under Section 16 or Section 157 of the Water Act. For present purposes it is unnecessary for me to express any view as to whether in the circumstances what Goulburn-Murray has done or is doing constitutes the exercise of a function under Part 8, Division 2, 3 or 4 of Part 10 or Part 11 of the Water Act (see Section 17(2)). The reasoning as to relevance of the chemical composition of the water as distinct from the consequences of its flow apply equally in my view to Sections 16 and 157 of the Water Act. It follows therefore that the second respondent is likewise entitled to an order under Section 75 of the Victorian Civil and Administrative Tribunal Act 1998 dismissing the claims against it.
The same reasoning necessitates the dismissal of the applicants' claim against Goulburn-Murray relative to the 6/7 channel.

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Decision date

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Judgment (91 paragraphs)

Pumpa & Ors v Murray Darling Basin Commission & Anor (Real Property) [2008] VCAT 2268 (27 October 2008)

Parties

Cases Cited (5)