Salmon v Water Administration Ministerial Corporation NSW & Anor

APPELLANT: Mr F J Parrington (Barrister) SOLICITORS: N/A

FIRST RESPONDENT: Mr B M Green (Barrister) SOLICITORS: LEGAL REPRESENTATIVES: Paul Percival Esq. Director, Legal Services Department of Land and Water Conservation

SECOND RESPONDENT: Mr P J Kelso (Solicitor) SOLICITORS: Taylor Kelso

IN THE LAND AND Matter No.: 30009 of 2001 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 5 December 2001 Maurice Augustine Salmon Appellant v Water Administration Ministerial Corporation of New South Wales First Respondent Beverley Jeanette McPherson Second Respondent REASONS FOR JUDGMENT Introduction

1. This is an appeal against (a) the first respondent's "refusal to accept" an application for a water licence under s 10 of the Water Act 1912; and (b) the first respondent's refusal to grant of the renewal of existing water licence No. 40EL38 issued under s 13A of the Water Act 1912 ("the Act"). The Relevant Facts
2. The appellant, Mr M. A. Salmon, is the owner of land being lot 49 in deposited plan 750832, vol 4513, folio 228, Parish of Currawananna, County of Bourke known as "Swansea", Old Narrandera Road, near Wagga Wagga. "Swansea" is a dry block having no surface or underground water and is used by the appellant for grazing.
3. "Swansea" is separated from the Murrumbidgee River by an intervening parcel of land being lot 29 in deposited plan 750832, vol. 1746, folio 119, Parish of Currawananna, County of Bourke known as "Ben Holme", which is owned by the second respondent, Mrs B J McPherson. "Ben Holme" has an extensive frontage to the river. Since 23 November 1998 an easement for public access twenty metres wide along the bank of the river has existed in favour of the Crown.
4. Upon returning from World War II in about 1945 or 1946 the appellant took up residence on "Swansea" and commenced to run a grazing property there. In about 1955 or 1956 the then owner of "Ben Holme", Mr Albert Bowen, who was on friendly terms with the appellant urged the appellant to install a water pump on "Ben Holme" on the bank of the river and run a 2 km water line through "Ben Holme" to "Swansea" and use it for stock watering and domestic purposes. This was done with the assistance of Mr A Bowen. A licence under s 10 of the Act was issued to the appellant in 1957 and he thereafter operated the pump and used the water. According to the first respondent, although the appellant is not a riparian owner, a licence was able to be issued to him under s 10 because he had a permissive occupancy from the owner of the intervening land.
5. In 1965 Mr A Bowen died and "Ben Holme" passed to his son Mr Charles Edward Bowen. The appellant continued to be on friendly terms with Mr C E Bowen until the latter died in about 1990 or 1991 when "Ben Holme" passed to his niece, the second respondent. The appellant never formally sought the permission of Mr C E Bowen to run the pump and pipeline through "Ben Holme", but he continued to do so and Mr C E Bowen was aware of this. According to the evidence of the appellant, which I fully accept, the appellant also supplied water to the house on "Ben Holme" for domestic purposes. The power to operate the pump came from Mr C E Bowen's electricity supply and Mr C E Bowen did not charge the appellant for this. Mr C E Bowen carried the cost of the power and the appellant suppled Mr C E Bowen with water.
6. During Mr C E Bowen's ownership of the property, the pump would break down every few months. The appellant would walk through "Ben Holme" to service the pump. He saw Mr C E Bowen on those occasions. Mr C E Bowen would give the appellant a cup of coffee. According to the appellant: "We fixed the pump together, or he helped me fix the pump; and it was a social visit actually."
7. After the second respondent, Mrs B J McPherson, inherited "Ben Holme" the neighbourly relations which previously existed between the appellant and the owners of "Ben Holme" not only ceased but also deteriorated to such an extent that there now appears to be outright antagonism between them. Mrs B J McPherson no longer wishes to continue the permissive occupancy arrangement that previously existed. She does not wish the appellant to have regular access to her property in close proximity to the homestead. Mr and Mrs McPherson have plans to either construct a new homestead near the site of the existing homestead or to restore the existing homestead on "Ben Holme" and reside there. The continued existence of the pump and the pipeline at the present locations with regular attendances by the appellant would interfere with the McPhersons' enjoyment of the property and their privacy if they took up their residence at "Ben Holme".
8. On 13 November 1991 the appellant applied to renew his water licence. On the advice of Mr S F Webb, the Resource Access Manager of the Department of Land and Water Conservation, the application submitted was for a licence under s 13A of the Act. The Department received an objection from Mrs B J McPherson. The application was referred to the Local Land Board for a public inquiry. During the course of the Board's hearing, the appellant said that the cost of moving and/or relocating the pump and pipeline at that time would be prohibitive, but that he might be in a financial position to do so by the time the McPhersons had done their planned building work on the property and were ready to move into their new house. As I understand it, the appellant offered to move the pump and pipeline when the McPhersons moved in.
9. The Board overruled Mrs B J McPherson's objection and determined that a licence should be granted subject to a condition that the appellant pay an annual rental of $250 for both the pump site and a three-meters wide strip for maintenance of the pipeline. A licence, No. 40EL38, was issued to the appellant on 26 August 1992 for a period of five years.
10. On 22 December 1997 the appellant applied for a renewal of licence No. 40EL38 under s 13A of the Act. Mrs B J McPherson again objected and the application was referred to the Local Land Board for a public inquiry. The Board noted that Mr and Mrs McPherson did not currently reside at the property. The Board decided that after Mr and Mrs McPherson took up residence the pump site should be relocated to the south-eastern corner of the property and access to it should be along the eastern boundary line fence, this being an alternative location suggested by the second respondent. The Board decided that in the interim and while Mr and Mrs McPherson were not in residence the existing arrangement should continue. The Board's decision also states: The Board considers that the submission made by Mr Salmon in 1992 is still relevant, i.e: "In his final submission Mr Salmon told the Board that if the McPherson family do decide to reside at the property and build a house, he is prepared to move his water supply i.e. pump to another location. However at this point in time he is not in a financial position to do so".
11. The Board determined that the application for renewal of the licence should be granted on the existing terms and conditions, but the period of renewal should be two years. In accordance with the Board's determination the licence was renewed for a period of two years commencing on 30 June 1998.
12. In March 2000 as the date of expiry of the licence approached Mr S F Webb gave the appellant an application form for a replacement licence under s 10 of the Act. This was apparently done on the basis of the appellant's statement of intention of moving the pump and pipeline and on the further understanding that the pump was to be located within the recently created easement for public access on the bank of the river. The appellant submitted the application, but on 26 June 2000 it was returned: the Department was of the view that as the permission of the owner was required and was not forthcoming then the appropriate licence should be one issued under s 13A of the Act and not s 10.
13. The appellant then lodged on 20 July 2000 an application for the renewal of his existing licence No. 40EL38 under s 13A of the Act. Mrs B J McPherson again lodged an objection, citing issues of privacy and proximity to the homestead. On 8 January 2001 the application for renewal of licence was refused on the ground that it does not satisfy sub-ss 13(5)(a) and (c) of the Act. (It is conceded by the first respondent that the reference to sub-ss 13(5)(a) and (c) should be a reference to sub-ss 13A(5) (a) and (c).) It is the refusal of the Department to accept the application for a replacement licence under s 10 of the Act and the refusal of the further application under s13A of the Act which are the subject of this appeal.
14. The appellant is reluctant to move the pump and pipeline to a new location unless or until necessary because of the expense. Quotations for relocating the pump and installing the new underground pipeline adjacent to the eastern boundary of "Ben Holme" range between about $8,000 and about $23,000. The appellant nevertheless adheres to the position which he has previously stated to the Local Land Board, noted in par [10] above. The Legislation
15. Sub-section 10(1) of the Act relevantly provides that an occupier of land may apply to the first respondent for a licence to construct and use "any work to which this Part extends" for the purpose of water supply and to take and use the water for such purpose. "Work to which this Part extends" is relevantly defined to mean a work which is connected with, or which affects the quantity or use of water in a river or lake, or which affects the quantity of water flowing in any such a river or lake, or in which or through which flows water taken from any such river or lake, being a work which is used or to be used for water supply. Sub-section 11(4) allows for an appeal to the Court against a refusal of an application. It can be immediately seen that an application may only be made under sub-s 10(1) by the occupier of the land on which the work is constructed or used or is proposed to be constructed or used.
16. Section 13A applies to applications for a licence by a person who does not occupy the land on which the works are to be constructed. By sub-s (3) the provisions of sub-s 11(4) apply mutatis mutandis to any appeal against the refusal of an application under this section. Sub-section 13A(5) provides as follows: (5) An application for a licence under this section shall not be granted unless the local land board, magistrate, Land and Environment Court or Ministerial Corporation, as the case may be, is satisfied that: (a) it is not reasonably practicable for the applicant to obtain or make provision for a supply of water on the land on which the applicant desires to use the water adequate for the purpose or purposes specified in such application otherwise than in pursuance of a licence granted under this section, and (b) the land on which it is desired to use the water is reasonably fitted for such purpose or purposes, and (c) the interests of riparian occupiers will not be unreasonably affected by the granting of such application.
17. In the present case the respondents assert that pars (a) and (c) of sub-s (5) are not satisfied.
18. Section 14 enables a licence to be renewed from time to time by the first respondent on the application of the licensee. Subsection (2) allows an appeal to the Court where the application for renewal is not granted. By subsection (3) a renewal of a licence may be subject to such terms and conditions as the first respondent (or the Court on appeal) deems expedient in the public interest. The Submissions of the Parties
19. The appellant claims that he occupies the present site of the pump and the pipeline pursuant to an easement based on the doctrine of lost modern grant, or alternatively on the doctrine of equitable acquiescence. In that event a licence under s 10 should be granted and the second respondent would not have the status of an intervening landholder to support her objection. Alternatively, if no such easement or equitable right can be implied, s 13A enables the licence to be granted which would include the right on the part of the licensee to enter, occupy and use the intervening lands, subject to the terms, limitations and conditions of the licence (sub-s (7)). In the appellant's submission, a consideration of the advantages and disadvantages to the parties in the light of the facts and circumstances should result in the exercise of the Court's discretion in favour of the appellant.
20. The first respondent submits that there is no place within the Act for the concept of the doctrine of lost modern grant. Section 13A is the statutory remedy for land which is "landlocked" from water and there is no need to rely upon such rights. In any event, it is submitted that the Court does not have jurisdiction to entertain an application based on such a form of relief. Even if the Court does have jurisdiction it is not open to exercise it in an appeal which is a limited statutory appeal under the Act. For the same reasons the claim for equitable relief should be refused.
21. The first respondent further submits that the easement for public access along the bank of the river does not give the appellant the right to stand a structure such as a pump house on what is land belonging to the second respondent, so that an application under s 10 of the Act is clearly inappropriate. Although a licence under s 13A of the Act is available in such case, the present application should not be granted in view of the adverse effect upon the second respondent and the offer by the second respondent of an alternative location along the eastern boundary of the property for a pump and pipeline.
22. The second respondent generally supports the submissions of the first respondent . The second respondent further submits that the doctrine of lost modern grant does not apply to land under the Real Property Act 1900 (citing Dewhirst v Edwards (1983) 1 NSWLR 34) and that the second respondent's land has at all material times been subject to the Real Property Act, even though it was a homestead grant under the Crown Lands Acts (citing Pt 3 of the Real Property Act). Conclusions
23. The difficulty facing the appellant in his claim for an easement for the present site of the pump and the pipeline under the doctrine of lost modern grant is the requirement that the use must not have been by permission. Permission negates the inference of a use as of right. Permission given at any time during the 20-year period of use required to give rise to the doctrine cancels out the effect of all use prior thereto. (See generally Halsbury's Laws of Australia, Vol 22 pars [355-12205] to [355-12210].) In the present case the appellant had the permission of both Mr Albert Bowen and then Mr Charles Edward Bowen. In my opinion there is nothing in the authorities to suggest that the permission must be in writing. It was only following the death of Mr C E Bowen in about 1990 that the new owner, Mrs B J McPherson, withdrew permission.

24. The first respondent submits that any such permission must be express. The permission granted by Mr A Bowen was clearly an express permission: he invited the appellant to install the pump and pipeline. The permission of Mr C E Bowen, although not expressed in writing, was also in my opinion an express permission. Moreover, the arrangement which was in place whereby Mr C E Bowen supplied electricity for the pump and the appellant supplied Mr C E Bowen with water for domestic purposes was sufficient, in my view, to amount to a clear permission on the part of Mr C E Bowen so as to negate the operation of the doctrine.
25. In any event this claim would be defeated by the indefeasibility provisions of the Real Property Act (especially s 42, see Dewhirst v Edwards at 47-49). The second respondent's land was at all material times land which was recorded in a folio of the Register under that Act, namely Vol 1746, Folio 119, (and later, Folio identifier 29/750832), being a homestead grant under Pt 3 of the Act. I acknowledge that the position may have been different if the second respondent's land had been under old system title.
26. It is not clear to me what the basis is for the claim for equitable acquisition. If it is intended to rely upon the principles of proprietary estoppel, there is no evidence of the necessary elements of unconscionable conduct or fraud on the part of the owner of the land. Accordingly the appellant has not made out a claim based on acquiescence or proprietary estoppel. Similarly, if it is intended to rely upon the principles of equitable or promissory estoppel, then the necessary elements appear to be absent. It seems to me that the only relationship that could have existed between appellant and the owners of "Ben Holme" is that of licensee and licensor. To attempt to create a new right or cause of action where none previously existed appears to me to be an attempt to go beyond using the suggested estoppel as a shield: the doctrine cannot be relied upon to create a new cause of action where none previously existed.
27. Since the basic elements of both proprietary estoppel and of equitable or promissory estoppel appear to be absent, it is not necessary to consider the question of the Court's jurisdiction. The appellant is simply unable to sustain either claim.
28. Since the second respondent is the owner of the land upon which the appellant wishes to maintain his pump and pipeline, s 10 of the Act does not apply. The appellant has no right, apart from a licence that may be granted to him under s 13A of the Act, to occupy any part of the second respondent's land. He thus has no right to make an application for a licence under s 10. The first respondent was acting correctly in returning that application to the appellant.
29. Section 13A applies to an application for a licence by a person who does not occupy the land on which he wishes to maintain a pump and pipeline. As noted above, on 26 August 1992 the appellant was issued with a licence under s 13A which enabled him to maintain a pump and pipeline on the intervening land owned by the second respondent. On 30 June 1998 that licence was renewed. The present application is properly an application for further renewal of that licence, pursuant to s 14 of the Act.
30. In my opinion the application for renewal of the licence should be granted. I have come to this conclusion for the following reasons: (a) The appellant has had a long and uninterrupted use of the pump and pipeline in their present locations. (b) The appellant clearly has a need for the water for both stock and domestic purposes. (c) The appellant does not presently have funds to cover the expense which he will necessarily incur if required to immediately relocate and reinstall the pump and pipeline. It is not reasonably practicable at present for the appellant to obtain or make provision for supply of water otherwise than in pursuance of a s 13A licence. (d) The interests of the riparian occupier (the second respondent) will not be unreasonably affected by the granting of the application, at least until she and her husband occupy the new homestead which they intend to build or until they renovate and occupy the existing homestead. The second respondent does not live on "Ben Holme". Neither the second respondent's use and enjoyment of her property, nor her privacy, are presently affected. (e) Although the second respondent has offered an alternative site for both the pump and pipeline adjacent to the eastern boundary of "Ben Holme", the appellant (as noted above) does not have the financial means at present to effect such relocation. (f) The appellant has previously given an undertaking to the Local Land Board to move the pump in the event that the second respondent and her husband move into their house on "Ben Holme", which undertaking he has repeated and maintained in this appeal. (g) It seems to be reasonable, therefore, to require the appellant to relocate the pump and pipeline only when it becomes necessary to do so. It will become necessary to do so when the second respondent occupies either the new homestead, which is yet to be built, or the repaired/restored existing homestead. (h) The reason why the existing pump and pipeline occupy their current site is because the appellant was invited and encouraged to put them there by the then owner of the intervening land, Mr Albert Bowen. The operation of the pump and the pipeline continued under the cooperative arrangement between the appellant and Mr Charles Bowen. That is to say, the appellant was encouraged to install pump and pipeline in their present locations and to maintain them there by the then owners of "Ben Holme". He should not, in my opinion, now be disadvantaged by having to incur additional expense because the location is no longer satisfactory to the present owner of the intervening land. (i) The second respondent conceded in evidence that she did not require the existing pipeline itself to be removed provided that the pump was moved. (She accepted that if the pipeline were to remain it would not interfere with the use of the property and could be used by her for her own purposes.) (j) Although it appears that the second respondent had obtained a quote for the proposed building work at "Ben Holme" some twelve months before the commencement of the hearing of this appeal, no application for consent or for a construction certificate has apparently been made to the local council and no contract has been entered into for such work. It can thus be concluded that the second respondent's proposed building work on either a new or on the existing homestead is unlikely to commence immediately and that the completion of any such work will be some considerable time off . (k) With all these considerations in mind it seems to me that a renewal of the licence for the existing pump and pipeline for a further period of two years is appropriate.
31. The respondents have suggested a draft condition of a licence designed to accommodate the moving of the pump and the installation of a new pipeline along the eastern boundary of "Ben Holme" within three months of written notification by the second respondent that she has commenced building work on the homestead. The suggested condition appears to me to be cumbersome and unnecessary. If the present licence is renewed for two years then at the end of that period the bona fides of the second respondent's intentions will have either been demonstrated or not demonstrated, as the case may be.
32. There was some debate as to an appropriate payment by the holder of a licence to the occupier of the intervening land for the occupancy and use of that land for the period of the licence. The appellant suggested that the present sum of $250 per annum was appropriate, but conceded that since that sum was fixed upon the grant of the licence in 1992 there could perhaps be some allowance for the increase since then in the consumer price index. The second respondent relies upon a rental valuation of the site of the pump (and pipeline) of $3500 per annum furnished by a registered valuer. In my opinion, a reasonable sum which should be fixed is $500 per annum.
33. The formal orders and findings of the court are, therefore, as follows: (1) The appeal is allowed. (2) The court finds in favour of granting the application for renewal of licence No. 40EL38 issued under section 13A of the Water Act 1912 for a period of two years from the date hereof expiring on 5 December 2003, upon the conditions set out in Exhibit 3 as modified and attached hereto as Annexure "A". (3) The application is otherwise dismissed. (4) The exhibits may be returned. (5) The question of costs is reserved.

I hereby certify that the preceding 33 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

40EL000038 Department of Land & Water Conservation CONDITIONS STATEMENT REFERRED TO ON 40EL000038 ISSUED UNDER PART II OF THE WATER ACT, 1912

(1) THE HOLDER OF THE LICENSE SHALL INSTALL TO THE SATISFACTION OF THE DEPARTMENT OF LAND AND WATER CONSERVATION IN RESPECT OF LOCATION, FORM, TYPE AND CONSTRUCTION, AN APPLIANCE OR APPLIANCES FOR THE MEASUREMENT OF THE QUANTITY OF WATER DIVERTED OR TAKEN BY MEANS OF THE LICENSED WORK, SUCH APPLIANCE OR APPLIANCES TO CONSIST OF A MEASURING WEIR OR WEIRS WITH AUTOMATIC RECORDER OR METER OR METERS OF THE DETHRIDGE TYPE, OR SUCH OTHER CLASS OF METER OR MEANS OF MEASUREMENT AS MAY BE APPROVED BY THE DEPARTMENT, AND SHALL CONTINUOUSLY MAINTAIN SUCH APPLIANCE OR APPLIANCES IN GOOD WORKING ORDER AND CONDITION, AND SHALL, AFTER THE INSTALLATION OF SUCH APPLIANCE OR APPLIANCES, RECORD THE MEASUREMENTS OF ALL WATER DIVERTED OR TAKEN BY MEANS OF THE LICENSED WORK AND SUPPLY PARTICULARS OF SUCH MEASUREMENTS TO THE DEPARTMENT AT SUCH INTERVALS AS SHALL BE DIRECTED BY THE DEPARTMENT. WHENEVER CALLED UPON TO DO SO A TEST CERTIFICATE FURNISHED EITHER BY THE MANUFACTURER CONCERNED OR BY SOME PERSON OR AUTHORITY DULY QUALIFIED SHALL BE SUPPLIED BY THE HOLDER OF THE LICENCE AS TO THE ACCURACY OF THE APPLIANCE OR APPLIANCES INSTALLED.

(2) THE LICENSEE SHALL NOT ALLOW ANY TAILWATER DRAINAGE TO DISCHARGE INTO OR ONTO: - ANY ADJOINING PUBLIC OR CROWN ROAD; - ANY OTHER PERSONS LAND; - ANY CROWN LAND; - ANY RIVER, CREEK OR WATERCOURSE; - ANY GROUNDWATER AQUIFER; -ANY NATIVE VEGETATION AS DESCRIBED UNDER THE NATIVE VEGETATION CONSERVATION ACT 1997; -ANY WETLANDS OF ENVIRONMENTAL SIGNIFICANCE. (3) WORKS USED FOR THE PURPOSE OF CONVEYING, DISTRIBUTING OR STORING WATER TAKEN BY MEANS OF THE LICENSED WORK SHALL NOT BE CONSTRUCTED OR INSTALLED SO AS TO OBSTRUCT THE REASONABLE PASSAGE OF FLOODWATERS FLOWING INTO OR FROM A RIVER. (4) IN RESPECT OF EACH YEAR COMMENCING ON 1ST JULY DURING WHICH THE VOLUMETRIC WATER ALLOCATION SCHEME FOR THE MURRUMBIDGEE RIVER SYSTEM IS IN FORCE, NOT MORE THAN A MAXIMUM QUANTITY OF 8 MEGALITRES OF WATER, INCLUDING 5 MEGALITRES FOR STOCK AND 3 MEGALITRES FOR DOMESTIC OR SUCH OTHER MAXIMUM QUANTITY AS MAY BE SPECIFIED BY THE DEPARTMENT OF LAND AND WATER CONSERVATION FROM TIME TO TIME, SHALL BE TAKEN FROM THE MURRUMBIDGEE RIVER DURING ANY SUCH YEAR UNDER THIS LICENSE. THIS CONDITION SHALL ATTACH EXCEPT WHERE ITS OPERATION IS SUSPENDED UNDER SECTION 20AA OF THE WATER ACT. (5) THE HOLDER OF THE LICENSE SHALL PAY THE ANNUAL SUM $500 (FIVE HUNDRED DOLLARS) TO THE OCCUPIER OF THE INTERVENING LANDS, BEING PORTION 29, PARISH OF CURRAWANANNA, COUNTY OF BOURKE, FOR THE OCCUPANCY AND USE OF A THREE METER WIDE STRIP FROM THE EXISTING PUMP SITE TO THE OLD NARRANDERA ROAD, THE LOCATION OF WHICH IS SHOWN ON A PLAN AND HELD BY THE DEPARTMENT OF LAND AND WATER CONSERVATION. (6) PAYMENT OF THE AMOUNT MENTIONED IN CONDITION (5) SHALL BE IN ADVANCE AND WITHIN 7 DAYS FROM THE DATE OF ISSUE OF THE LICENSE AND THENCE ON THE ANNIVERSARY DATE DURING THE CURRENCY OF THE LICENSE. (7) ANY BREAKS, LEAKS OR GENERAL REPAIRS SHALL BE CARRIED OUT PROMPTLY AND IN A WORKMANLIKE MANNER WITH MINIMAL DISRUCTION TO THE INTERVENING LANDS.

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