Sharkey v Minister administering the Water Management Act 2000

The transitional provisions in more detail

1. Section 403 of the 2000 Act provides that Schs 9, 10 and 11 to the 2000 Act have effect. Clause 3(1) of Sch 10 provides, relevantly, that, subject to the Schedule, an entitlement that, immediately before the appointed day, was in force under the 1912 Act, which entitled a person to take a specified quantity of water, is taken to have been replaced by an access licence held by that person (subject to such of the conditions of the entitlement as are applicable to an access licence) for the quantity of water so specified. Clauses 4(1) and (2) of Sch 10 provide that the category and subcategory of access licence into which an entitlement under the 1912 Act is so converted are specified in Sch 11.
2. Clause 4(1) of Sch 10 provides that an entitlement of the kind referred to in column 1 of Sch 11 that, immediately before the appointed day, was held for a purpose specified in column 2 of Sch 11 is taken to be an access licence of the category referred to in column 3 of Sch 11, in the case of an entitlement with respect to a regulated river, or an access licence of the category referred to in column 4 of Sch 11, in the case of an entitlement with respect to an unregulated river. Clause 4(2) of Sch 10 provides that a description appearing between square brackets in column 3 or 4 of Sch 11 indicates that the access licence concerned is of the subcategory indicated by that description.
3. The old licence was held for two purposes, stock and irrigation. Schedule 11 provides that an entitlement held for the purpose of stock (column 2) is taken to be an access licence of the category of "Domestic and stock [Stock]" for both a regulated river (column 3) and an unregulated river (column 4). Schedule 11 provides that an entitlement held for the purpose of irrigation (column 2) is taken to be an access licence of the category of "Regulated river (general security)" in the case of an entitlement with respect to a regulated river (column 3) but the category of "Unregulated river" in the case of an entitlement with respect to an unregulated river (column 4).
4. The Dictionary to the 2000 Act defines a "regulated river" to mean "a river that is declared by the Minister, by order published in the Gazette, to be a regulated river" and an "unregulated river" to mean "a river that is not a regulated river".
5. The Minister has made two relevant orders. By Regulated River Order No 6, published in the Gazette on 26 February 2003 (NSW Government Gazette No 52), the Minister declared the rivers specified in the schedule to the order to be regulated rivers, including "Murray River, from the upper limit of the storage of Hume Dam downstream to the South Australian border". By Murray Water Management Area Regulated River Order (Murray), published on 1 July 2004 (NSW Government Gazette No 110), the Minister revoked Regulated River Order No 6 and declared the rivers in the schedule to the order to be regulated rivers, including "Murray River, from the upper limit of the storage of Hume Dam downstream to the South Australian border".
6. The "appointed day" referred to in cll 3 and 4 of Sch 10 to the 2000 Act was defined in cl 2 of Sch 10 to mean, in relation to a category or subcategory of access licence to which Pt 2 of Ch 3 applies or an entitlement from which such an access licence arises, the day appointed under s 55A in relation to that category or subcategory of access licence. The appointed day differed with respect to the regulated and unregulated parts of the Murray River.
7. By proclamation dated 30 June 2004, published in the Gazette on 1 July 2004 (NSW Government Gazette No 110), the day appointed under s 55A in relation to all categories of access licences in relation to the water source to which the Water Sharing Plan for the New South Wales Murray and Lower Darling Regulated Rivers Water Sources 2003 applies was 1 July 2004. That plan applied in relation to the water source "between the banks of all rivers, from the upper limit of Hume Dam water storage…downstream to the South Australian border which had been declared by the Minister to be regulated rivers" (cl 4(2)).
8. By proclamation dated 25 January 2012, published in the Gazette on 27 January 2012 (NSW Government Gazette No 28), the day appointed under s 55A in relation to all categories of access licence for the water source to which the Water Sharing Plan for the Murray Unregulated and Alluvial Water Sources 2011 applies was 30 January 2012. That plan applies to the water sources known as the Murray Unregulated River Water Sources and the Upper Murray Groundwater Source (cl 4(1)). These water sources do not include water contained in the New South Wales Murray Regulated River Water Source as defined in the Water Sharing Plan for the New South Wales Murray and Lower Darling Regulated Rivers Water Sources 2003, amongst other water sources (cl 5(b)).
9. Accordingly, with respect to the regulated part of the Murray River, the appointed day was 1 July 2004 and, with respect to the unregulated part of the Murray River, the appointed day was 30 January 2012.

The competing interpretations of the order declaring the Murray River to be a regulated river

1. The parties' disagreement about the category of access licence into which the old licence was converted by the operation of cll 3 and 4 of Sch 10 of the 2000 Act turned on the construction of the Minister's order declaring part of the Murray River to be a regulated river. In particular, the parties' disagreement concerned the expression "the upper limit of the storage of Hume Dam".
2. Mr Sharkey contended that the upper limit of the storage of Hume Dam refers to the furthermost points of the Murray River and its tributaries that the water stored by the Hume Dam can extend when the Hume Dam is full. The "storage of Hume Dam" refers to the water stored by the Hume Dam. It was common ground between the parties that the highest elevation that water stored by the Hume Dam can reach when the Hume Dam is full is 192m Australian Height Datum (AHD). Water stored to this elevation will inundate all land upstream of the Murray River and its tributaries that is at an elevation equal to or lower than 192m AHD. The furthermost points of the Murray River and of each of its tributaries which will be inundated by water stored by the Hume Dam will be where the bed of the river and tributaries first reaches 192m AHD. These points on the Murray River and its tributaries mark the upper limit of the storage of Hume Dam. The regulated part of the Murray River commences at this point upstream of the Hume Dam and extends downstream past the Hume Dam wall along the river to the South Australian border.
3. The Minister argued for a construction of the expression "the upper limit of the storage of Hume Dam" that would exclude the uppermost reaches of the Murray River and its tributaries that are inundated when the Dam is full. The Minister contended that "the upper limit of the storage of Hume Dam" is a line drawn across the Murray River between two points on opposite banks of the river, each of which is the point where the bank of the river first reaches an elevation of 192m AHD. Although water impounded by the Hume Dam to a level of 192m AHD may extend further upstream along "fingers" of the Murray River and its tributaries past this line, such stored water should not be included within "the storage of Hume Dam".
4. The Minister submitted that this construction is to be preferred over Mr Sharkey's construction for three reasons.
5. First, the Minister submitted that it accords with the ordinary and natural meaning of the words in the order declaring the Murray River to be a regulated river. The ordinary and natural meaning of "the storage of Hume Dam" would include the large body of water stored by the dam but not include water in the "fingers" up the Murray River and tributary streams which feed into the Hume Dam.
6. The Minister contended that the only area of land that is to be considered to be "the storage of Hume Dam" is that area of land that has not been covered by water from the river or tributary streams before the Hume Dam was constructed and impounded water. The area of land between the banks of the Murray River upstream of the Hume Dam has been covered by water from the river before the Hume Dam was constructed. Hence, only the area of land downstream of the intersection of the 192m AHD contour and the top of the riverbanks that is inundated by water impounded by the Hume Dam should be considered to be the storage of Hume Dam. The area of land between the riverbanks upstream of the intersection of the 192m AHD contour and the top of the riverbanks should not be considered to be the storage of Hume Dam because that area of land has had water from the river in the past and there is no additional area of land over which water impounded by the dam is stored.
7. Second, the Minister submitted that the Minister's construction accords with the purpose of regulated rivers. The Minister contended that, although not appearing from the face of the 2000 Act, regulated rivers are those rivers where water supply is assured by a storage dam and/or other works, such as weirs and diversion works.
8. The Minister referred to the Second Reading Speech for the Water Amendment (Charges) Bill in the Legislative Assembly on 19 June 1996 describing regulated rivers as "rivers in respect of which the department assures water supply by a storage dam and by operating other works in the rivers, such as weirs and diversion works, which ensure that water reaches the point where it is needed when it is needed" in contrast to unregulated rivers "where the department does not own or operate physical works to control the flow of water for the benefit of water users".
9. The Minister submitted that it gives effect to that purpose for the regulated river to be confined to that part of the river which is, on its ordinary and natural meaning, the storage area of Hume Dam. The water in the "finger" would be there if the river were flowing even if the Hume Dam was empty. It cannot sensibly be regarded as part of the water that is stored in the Hume Dam. The upstream "finger" does not have assured water from the Hume Dam but instead has proportionally greater volume of water from the river than from the dam.
10. Third, the Minister's construction involves considerably less practical difficulties than Mr Sharkey's construction. Mr Sharkey's construction would involve practical difficulties by requiring a survey to ascertain the point where the riverbed rises above the 192m AHD contour. The point in the riverbed at 192m AHD can change radically, rapidly and frequently, due to natural processes, sometimes over a distance of kilometres. In contrast, the Minister's construction can be implemented easily by reference to aerial photographs to identify where the 192m AHD contour intersects the riverbanks. The Minister submitted that the Court should prefer a construction that is more practical to be implemented.

The proper construction of the expression

1. I uphold Mr Sharkey's construction and reject the Minister's construction of the expression "the upper limit of the storage of Hume Dam".
2. First, the ordinary and natural meaning of the expression supports Mr Sharkey's construction, not the Minister's construction. The order of the Minister declares a stretch of the Murray River to be a regulated river, from a point upstream ("the upper limit of the storage of Hume Dam") to a point downstream ("the South Australian border"). The upstream point is the furthermost point up the Murray River that water stored by the Hume Dam can extend when the Hume Dam is full. The "storage of Hume Dam" evidently refers to the water stored by Hume Dam. The "upper limit" of water stored by Hume Dam is set by the height of the dam spillway, which is 192m AHD. The "upper limit" of water that can be stored by the Hume Dam when it is full is, therefore, 192m AHD.
3. The areas of land that will be inundated by water stored by the Hume Dam to the upper limit of 192m AHD will be all areas of land upstream of the dam wall with an elevation equal to or lower than 192m AHD. These areas include any area of land between the riverbanks of the Murray River that is equal to or lower than 192m AHD. The water stored by the Hume Dam over these areas of land equal to or lower than 192m AHD will constitute part of the regulated river. The upper limit of the storage of Hume Dam on the Murray River will be the point where the riverbed rises above 192m AHD.
4. It matters not that parts of the land within these areas that are inundated by water stored by the Hume Dam when it is full may have had water from the Murray River over them before the Hume Dam was constructed and water was impounded. All dams inundate stretches of the river that is impounded by the dam. Different lengths of the river will be flooded depending on the level of the water stored at any particular time. The stretches of the river flooded by the impounded waters constitute part of the storage of the dam. They do not lose that character because they used to or still have water from the river flowing down them.
5. Furthermore, the dam may cause more water to be stored on and above the land over which the river flows than was there before the river was dammed. I reject the Minister's argument that the "fingers" of stored water up the Murray River and tributary streams cannot be considered to be part of the storage of Hume Dam.
6. Second, I do not accept the Minister's argument that the Minister's construction of the expression better accords with the purpose of regulated rivers. The purpose for which rivers may be declared to be regulated rivers under the 2000 Act is not clear from either the terms of the 2000 Act or any order by the Minister declaring rivers to be regulated rivers. The descriptions in the Second Reading Speech of the Water Amendment (Charges) Bill of regulated rivers and unregulated rivers are not to be found in the 2000 Act or any order of the Minister declaring rivers to be regulated rivers.
7. However, even if those descriptions in the Second Reading Speech do identify the purpose and criteria for distinguishing between regulated rivers and unregulated rivers, they do not support construing the Minister's order declaring part of the Murray River to be a regulated river in the manner for which the Minister contends rather than the manner for which Mr Sharkey contends. The description of regulated rivers in the Second Reading Speech is "rivers in respect of which the Department assures water supply by a storage dam and by operating other works in the rivers…". In this case, the order of the Minister declaring part of the Murray River to be a regulated river refers to such a water storage dam, being "the storage of Hume Dam". The order fixes the upstream point where the regulated part of the Murray River commences to be "the upper limit of the storage of Hume Dam". This is the furthermost point up the Murray River that water stored by the Hume Dam can extend when the Dam is full. All water stored by the Dam up to this furthermost point on the river is part of the water supply assured by the storage dam. It matters not that the water stored in the uppermost "finger" of the Murray River might be small in volume; what matters is that there is some water stored by the dam in that finger.
8. Third, I do not accept the Minister's argument that the Minister's construction of the expression should be preferred to Mr Sharkey's construction for reasons of practicality. Any considerations of practicality flow from the choice of words used in the Minister's order declaring part of the Murray River to be a regulated river. The order does not fix a defined location for the upstream point where the regulated part of the Murray River commences, as it did for the downstream point where the regulated part of the Murray River finishes. Instead, the order uses an expression that can result in different locations for the upstream point depending on the facts and circumstances at the time.
9. The upstream point of the Murray River is "the upper limit of the storage of Hume Dam". Currently, it is agreed that "the upper limit" of the water stored by the Hume Dam is fixed by the height of the dam spillway at 192m AHD. But the height of the dam spillway could be increased or decreased in the future. Any change in the height of the dam spillway would alter the lateral extent of the water stored by the Hume Dam, a higher spillway height will increase the lateral extent while a lower spillway height will decrease the lateral extent. The location of the "upper limit of the storage of Hume Dam" will correspondingly change.
10. Similarly, as the Minister submitted, natural events, such as storms, may erode parts of the surrounding land, riverbanks and riverbed so that they become below 192m AHD. These lowered areas of land would be inundated by water stored by the Hume Dam when it is full. Such stored water becomes part of the storage of Hume Dam.
11. This change in the lands inundated by water stored by the Hume Dam is a necessary and intended result of the words used in the Minister's order to describe the regulated part of the Murray River. It is not something that needs to be avoided.
12. Considerations of practicality, therefore, do not demand preferring the Minister's construction to Mr Sharkey's construction of the expression "the upper limit of the storage of Hume Dam".

Conclusion and future hearing

1. The proposed construction of the expression "the upper limit of the storage of Hume Dam" in the Minister's order declaring part of the Murray River to be a regulated river is not the construction contended for by the Minister but instead is that contended for by Mr Sharkey. Of relevance to ascertaining the category of water access licence attaching to Lot 51, the upper limit of the storage of Hume Dam will be the point up the Murray River where the bed of the river first reaches 192m AHD. This will be the furthermost point that water stored by the Hume Dam when full to a level of 192m AHD can extend up the Murray River.
2. It is now necessary to ascertain whether this upstream point, from which the regulated part of the Murray River commences, occurs on or adjacent to Lot 51. I will list the proceedings for a directions hearing to make case management directions and to fix a hearing for all remaining questions in the proceedings.
3. The Court lists the proceedings for a directions hearing before the Class 4 List Judge on 5 May 2017.

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