Rashleigh v Environment Protection Authority [2005] ACTSC 18 (18 March 2005)

Last Updated: 11 May 2005

SCOTT RASHLEIGH v ENVIRONMENT PROTECTION AUTHORITY [2005] ACTSC 18 (18 March 2005)

ADMINISTRATIVE LAW - appeal from Administrative Appeals Tribunal - statutory construction - application for licence to take water - applicant entitled to benefit of Crown lease entered into prior to commencement of Act - proprietary rights to ground water under property not impugned by Act - whether Environment Protection Authority nonetheless entitled to refuse licence due to concerns relating to overall quantity of water taken from subcatchment area.

Water Resources Act 1998 (ACT), s 4, s 5, s 13, s 27, s 28, s 33

Australian Capital Territory (Self-Government) Act 1988 (Cth), s 23, s 28, s 48A

The Constitution, s 51(xxxi)

Legislation Act 2001 (ACT), s 141, s 142

Bushfire Act 1936 (ACT)

Fire Brigade Act 1957 (ACT)

Administrative Appeals Tribunal Act 1989 (ACT), s 46

Administrative Appeals Tribunal Act 1975 (Cth), s 44

Supreme Court Act 1933 (ACT), s 20

Water Resources Bill 1998 (ACT)

The Water Resources Management Plan 1999

Declaration of the Rights of Man 1789, art 17

Frank v Australian Capital Territory (2001) 161 FLR 262

Commonwealth v Tasmania (1983) 158 CLR 1

Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155

Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297

Newcrest Mining (WA) Ltd v BHP Minerals Ltd & Commonwealth (1997) 190 CLR 513

Smith v ANL Ltd (2000) 204 CLR 493

Australian Capital Territory v Pinter (2002) 121 FCR 509

Minister of State for the Army v Dalziell (1944) 68 CLR 261

Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397

Sargood Bros v Commonwealth (1910) 11 CLR 258

Pyneboard Pty Ltd v Trade Practices Commission (1983) 45 ALR 609

Sorby v Commonwealth (1983) 46 ALR 237

R v Cain [1985] 1 AC 46

Commissioner of Australian Federal Police v McMillan (1987) 70 ALR 203

Buck v Comcare (1996) 137 ALR 335

Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399

American Dairy Queen (Qld) Pty Ltd v Blue Rio Pty Ltd (1981) 147 CLR 677

Federal Commissioner of Taxation v Murray (1990) 21 FCR 436

Minister for Immigration & Ethnic Affairs v Gungor (1982) 63 FLR 441

Director-General of Social Services v Hangan (1982) 70 FLR 212

Morales v Minister for Immigration and Ethnic Affairs (1995) 60 FCR 550.

Zines, The High Court and the Constitution, 4^th ed, 1997

APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

No SCA 55 of 2004

Judge: Crispin J

Supreme Court of the ACT

Date: 18 March 2005

IN THE SUPREME COURT OF THE )

) No SCA 55 of 2004

AUSTRALIAN CAPITAL TERRITORY )

APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN: SCOTT RASHLEIGH

Appellant

AND: ENVIRONMENT PROTECTION AUTHORITY

Respondent

ORDER

Judge: Crispin J

Date: 18 March 2005

Place: Canberra

THE COURT ORDERS THAT:

1. the appeal be upheld;

2. the decision made by the respondent and affirmed by the Administrative Appeals Tribunal be set aside;

3. in lieu thereof it be decided, subject to order 4. hereof, that the respondent grant the appellant a licence to take 1.5 megalitres of water per annum from his property at 20 Mugga Way, Red Hill ACT;

4. the parties have leave to bring in short minutes of order concerning the conditions, if any, that should be imposed on such licence or, in default of the agreement on this issue, to have the matter relisted for further directions.

1. This is an appeal against a decision of the Administrative Appeals Tribunal ("the Tribunal") affirming an earlier decision of the respondent to refuse an application for the issue of a licence authorising the appellant to take water from a bore on residential land at 20 Mugga Way, Red Hill, ACT ("the property").

2. The appellant and his wife were granted a Crown lease of the property on 27 November 1996. The previous owner of the property had apparently destroyed pre-existing gardens and trees and the appellant and his wife engaged landscape architects to design a new garden involving the planting of approximately 2,000 trees and shrubs at a cost of approximately $200,000. They also engaged an expert to advise them about appropriate means of watering the new garden and were advised to drill a bore and use ground water by means of an irrigation system. They were advised that they would use approximately 1.4 megalitres per annum. The bore was duly installed in about mid April 1998 and the irrigation system established.

3. Later that year the Water Resources Act 1998 (ACT) ("the Act") was enacted.

4. In late October 2003 the appellant was approached by two officers of ActewAGL who informed him that he needed a licence to take water from his bore. Until then he had been unaware of any such requirement.

5. The perceived need for a licence was, no doubt, attributable to the provisions of s 33 of the Act the relevant portions of which are in the following terms:

(1) Subject to this section, a person shall not take water without a licence.

Maximum penalty: 50 penalty units.

(2) The lessee or occupier of land on or immediately adjacent to which there is a waterway may, without a licence, take water from the waterway or surface water from the land for--

(a) the use of the lessee or occupier or the lessee's or occupier's family or employees, for domestic purposes; or

(b) drinking water for stock; or

(c) irrigating a garden, not exceeding 2 hectares, being a garden cultivated for domestic use and not for the sale, barter or exchange of goods produced in the garden.

(3) A person may, without a licence, take water for camping purposes or for watering travelling stock from a waterway.

(4) Subsection (3) does not authorise a person to enter or remain on land to which the person does not otherwise have lawful access or to do anything on that land that the person does not have lawful authority to do.

(5) Subsection (1) does not apply to the exercise or purported exercise by a relevant person of a function under the Emergencies Act 2004 for the purpose of protecting life or property, or controlling, extinguishing or preventing the spread of a fire.

(6) In proceedings for an offence against subsection (1), a certificate purporting to be signed by the authority stating that, on a specified date, there was on the land to which the proceedings relate, a channel or other means (including mechanical means by which water is capable of being taken) is evidence of the matters so stated.

(7) It is a defence to a prosecution under subsection (1) if it is proved that the water was taken in case of an emergency for the protection of life and property.

6. The provisions authorising the respondent to grant such licences are contained in s 35, the relevant portions of which are in the following terms:

(1) Subject to this section, the authority may, on application, grant to a person a licence to take water from a specified waterway or location.

(2) A licence to take water may be granted subject to such conditions as are specified in the licence.

(3) For subsection (2), the authority may fix a different rate for different days of the year.

(4) Without limiting subsection (2), the conditions to which a licence to take

water may be subject may include a condition--

(a) to keep and maintain records; or

(b) to install, operate and maintain equipment, including a water meter; or

(c) to provide information in relation to compliance with the licence or the

conditions (if any) to which it is subject; or

(d) to conduct specified monitoring and testing consequent on the taking of the

water; or

(e) to mark, in a specified manner, places from which water is taken under the

licence; or

(f) specifying the rate at which, or the maximum amount of, water that may be

taken, or both.

(5) A person shall not, without reasonable excuse, contravene a condition of a

licence to take water.

Maximum penalty: 50 penalty units.

(6) A licence to take water remains in force for such period as is specified in the licence unless it is sooner surrendered or cancelled.

(7) In deciding whether or not to grant a licence to take water, the authority shall take into account--

(a) the applicant's environmental record both in the Territory and elsewhere so far as it relates to water; and

(b) whether to grant the licence--

(i) would have an adverse effect on the environment; or

(ii) would adversely affect environmental flows of a particular waterway or aquifer or the rights of other water users; and

(c) whether the applicant has been convicted of an offence against this Act or a corresponding law of a State or another Territory; and

(d) in the case of an application for a licence to take ground water--

(i) whether the quantity of water available can meet the demand or there is a risk that the available water will not be sufficient to meet future demand; and

(ii) whether the taking of the water will or is likely to affect the quality of the water in the place to which the application relates.

(8) The authority shall not grant a licence to take water--

(a) subject to subsection (9), if a water allocation or interstate water allocation on which to base the taking of water from the place to which the application relates does not exist; or

(b) unless satisfied that the applicant has lawful authority to obtain access to the place from which the water is to be taken under the licence or to divert the water from that place to where it is to be used, or both, as the case requires; or

(c) in respect of a development before an application to conduct the development has been approved under the Land Act, part 6.

(9) Subsection (8) (a) applies to--

(a) ground water under land the subject of a lease of Territory land granted after the commencement of section 13; and

(b) ground water under unleased Territory land; and

(c) surface water.

7. On 14 November 2003 he applied for a licence to take 1.5 megalitres of water per annum but his application was refused.

The reasons of the respondent

8. The respondent explained in a letter dated 1 December 2003 that provision "for a new allocation of this licence" needed to be made within the Water Resources Management Plan 1999 ("the management plan") and that the plan did not provide for the issue of any "additional allocations" as the use already met the "sustainable allocated volume".

9. In fact these reasons were quite misconceived.

10. Part 2 of the Act, which is entitled "Territory Rights to Water", consists solely of s 13 and that section is in the following terms:

Subject to this Act, the right to the use, flow and control of all water of the Territory (other than ground water under land the subject of a lease of Territory land granted before the commencement of this section) is vested in the Territory and, subject to any other Act, those rights are exercisable by the Minister in the name of and on behalf of the Territory.

11. Since s 13 commenced on 11 December 1998, it seems clear that the "right to the use, flow and control" of water, which vested in the Territory by reason of this section, did not extend to ground water under the appellant's property. Furthermore, whilst the provisions governing licensing are contained in Pt 7 of the Act, those relating to allocations of water are contained in Pt 6 and s 27 makes it clear that the provisions in Pt 6 do not apply to ground water under land the subject of leases granted prior to the commencement of s 13 ("pre-1998 leases"). The appellant's property falls within this category. In addition, s 35(9) makes it clear that the absence of such an allocation is not an impediment to the grant of a licence to take ground water from such land.

12. As Mr Mossop, who appeared for the respondent, effectively conceded, the legislature had apparently accepted that the rights to ground water under relevant land had been amongst the proprietary rights demised by pre-1998 leases and chosen to respect such rights by providing that no further allocation would be necessary. The proposition that lessees acquired such rights under pre-1998 leases was not disputed and it would, in any event, be necessary to construe the relevant provisions in the light of the legislature's obvious acceptance of the existence of such rights and the concomitant intention reflected in s 13 not to override them.

13. The appellant appealed to the Tribunal, pleading that the Act had no application to the Crown lease in question, that the decision was invalid because it amounted to an acquisition of property other than on just terms contrary to s 23(1)(a) of the Australian Capital Territory (Self-Government) Act 1988 (Cth) ("the Self-Government Act"), that it was wrongly based upon a perceived requirement that the appellant have an allocation of water and that it had failed to take into account the relevant criteria.

14. In the face of these contentions, the respondent apparently realised that its earlier approach could not be sustained and shifted its ground. It provided a detailed statement of reasons that eschewed any reliance upon the absence of an allocation and, indeed, asserted that the perceived need for an allocation had not been considered. Instead it contended that what it described as "the reasons for removal" (sic) had not satisfied all of the criteria for approval in s 35 of the Act and explained that its decision to refuse the appellant's application had actually been based upon three propositions.

15. First, it contended that the grant of the licence would have an adverse effect upon the environment. This was because the subcatchment area in which the property was located "has been fully allocated and there is currently no provision for further allocations within this subcatchment". The management plan, prepared by the respondent pursuant to s 5 of the Act, had set a 70 megalitre limit on ground water abstraction for the relevant subcatchment. This had been based upon 10% of the average annual recharge volume that was said to be 700 megalitres. The respondent said that it "would be reasonable to assume" that abstraction over the sustainable limit would result in an adverse effect on the environment.

16. Second, it contended that there was a "possibility" that the grant of the licence would have an adverse effect on the flows in the aquifer and that there was a "likelihood" that the rights of other water users to take water would be effected.

17. Third, it contended that the quantity of water available for abstraction met current demand "but in accordance with the sustainable yield set in the [management plan], is unlikely to be sufficient to meet future demand".

18. During the subsequent hearing before the Tribunal it was explained that a waiting list for licences had been created and that new licences might be granted if existing ones were relinquished or the 70 megalitre limit were increased. Applicants were placed on the list in the order that their applications were received, regardless of whether they held pre 1998 leases and/or existing bores and regardless of what prejudice they might suffer by reason of having planted substantial gardens in reliance upon their rights to the ground water on their properties. This was said to be "equitable". It was not explained why it was thought equitable to treat people who had existing proprietary rights and had spent large sums of money in reliance upon them as having no greater claim to priority than people who had no such rights and had spent nothing.

The reasons of the Tribunal

19. The Tribunal provided detailed written reasons for its decision to affirm the respondent's decision to refuse the appellant's application. It provided a helpful overview of the Act, noting the terms of Pt 2 and observing that the respondent had been given certain statutory functions by Pt 3 of the Act and that it had been enjoined by Pt 4 to ensure that a continuous program for the assessment of water resources of the Territory was carried out and by Pt 5 to prepare a draft management plan for the "water resources of the Territory". After discussing the provisions of Pts 6 and 7 in the context of s 13, the Tribunal said, at [62]-[63], that:

The conclusion to be drawn is that, subject to a consideration of other issues which follows, the intention of the WR Act was that any determination of the amount of water able to be allocated pursuant to Part 6 of the WR Act is limited to the amount to be allocated to persons other than the lessees of existing leases and the requirement for lessees of existing leases to obtain a licence is subject to a recognition of their right to the use of the water which existed prior to the commencement date.

The reason for the drawing of the distinction between applicants for a licence in respect of existing leases and applicants for a licence in respect of new leases would appear to be a recognition of the property rights of the lessees of land in the Territory who were granted their leases prior to the commencement of the WR Act in respect of the water under their land and to relate to the exclusion from the law- making powers of the Legislative Assembly, laws with respect to the acquisition of property otherwise than on just terms, (see section 23(1)(a) Australian Capital Territory (Self-Government) Act 1988 (Cth).

20. Neither party sought to challenge the accuracy of these observations.

21. The Tribunal noted that it had been contended that the manner in which the statutory power had been exercised by the respondent had effectively extinguished the appellant's rights to extract ground water from the property. It accepted that the Act should be interpreted and applied in a manner that was not inconsistent with s 23(1)(a) of the Self-Government Act and also accepted that it should not be construed as providing for the abrogation of existing rights in the absence of an express provision or necessary implication to that effect. It stated, however, at [67], that:

A law which prohibits or controls a particular use of, or particular acts upon, property, or which by its administration has that effect, does not constitute an act of acquisition contrary to section 23(1)(a) of the Self-Government Act (Commonwealth v Tasmania (1983) 158CLR 1 at 283-4), nor is a law which is not directed at the acquisition of property as such but which is concerned with the adjustment of competing rights, claims or obligations of people in a particular area of activity (Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 161). The restriction on the entitlement of the applicant to the use of the water under his land without satisfying regulatory requirements designed for the protection of the environment does not, therefore, involve an acquisition of property. It is not dissimilar to the requirements of planning laws which restrict the kind of development able to be undertaken by a landowner. The WR Act makes it clear that, while acknowledging that the rights of lessees of existing lessees are to be distinguished from those of persons granted a lease subsequent to that date, they are, nevertheless, subject to the requirement that a licence be obtained to enable those rights to continue to be exercised.

22. After referring to the transitional provisions in the Act, the Tribunal then turned to discuss the application of the criteria contained in s 35(7).

23. It rejected the contention that the grant of the licence would adversely affect the rights of other water users. However, it said that the fact that two other bores in the Red Hill area had ceased to operate due to lack of water suggested "...that there is a basis for a finding that there [was] a risk that the available water [would] not be sufficient to meet future demand, at least during the continuation of drought conditions, which the [appellant's] witness, Mr Crowe, had suggested was the cause of his bore ceasing to operate."

24. The Tribunal noted that the expression "environmental flow" had been defined by s 4 of the Act to mean the environmental flow for the relevant waterway or aquifer ascertained in accordance with guidelines under s 5 and said that:

An allocation of the amount of water ascertained in accordance with the Guidelines has already been exceeded. A finding that the grant of a licence to take an additional amount of water would result in an adverse effect on the aquifer involved is clearly open.

25. It observed that the evidence had not permitted a finding that the grant of the licence would have had any adverse effect on the environment or on the quality of the water in the relevant place.

26. It then returned to the subject of the guidelines, stating that:

It is to be observed that the Guidelines which provide the means within the WR Act for ascertaining the environmental flows of an aquifer so as to maintain the affected aquatic ecosystem are required to be subject to approval of the Legislative Assembly. The Guidelines therefore represent the legislatively determined sustainable limit of water available for use under a licence. Any water resources management plan giving effect to the Guidelines is also subject to the approval of the Legislative Assembly.

27. It referred to a recommendation in what was described as "the ICAM report" to the effect that the amount of water available for allocation in the relevant subcatchment area could be significantly increased. However, it said that, irrespective of what weight could be attached to that recommendation, its adoption was a matter for the Minister and possibly disallowance by the Legislative Assembly. Hence, any decision to adopt an increase in the amount of water available for allocation "should not, therefore, be pre-empted by the Tribunal". It also suggested that the recommendations did not provide a satisfactory basis "for adopting such an increase at this stage".

28. The approach which the Tribunal ultimately took to the resolution of the matter is evident from the following passages in the reasons for judgment:

The circumstances of this case indicate that the adoption of the precautionary principle in the resolution of the issues is desirable. Under that principle, if there are threats of serious or irreversible environmental damage, the lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental damage (Leatch v National Parks & Wildlife Service (1993) LGERA 270).

The adoption of the precautionary principle is also supported by its inclusion in the WRMP 1999; the Guidelines; its adoption as a matter of current government policy (as set out in 2003-04 Budget Paper No. 3); the strategic principles of the Territory Plan and the Integrated Catchment Management Framework adopted by the government for the Territory.

29. In concluding the Tribunal referred to two further issues. First, it mentioned that two further licences had been granted under the Act after the refusal of the appellant's application, apparently on the basis of legal advice to the effect that, since the respondent had already issued permits for the construction of the bores, there was "no legal basis" to decline the licences. The Tribunal did not comment on the cogency of the advice but did say that the issue of those licences did not provide a sufficient reason to make an otherwise inappropriate decision. Second, it mentioned that it had been urged to take into account the appellant's pre-existing entitlement and his unchallenged evidence that he had been unaware of the requirement for a licence. It found that there had been no failure to take reasonable steps to bring the requirements of the Act to the notice of affected people and said that the fact that it had not come to the appellant's notice did not justify the grant of a licence "where to do so would clearly be contrary to one of the criteria necessary to be satisfied."

30. Mr Meagher SC, who appeared for the appellant, submitted that the Tribunal had fallen into error by failing to recognise that, given the prohibition contain in s 33, the refusal of the licence would, if valid, have effected an acquisition of the appellant's property and that s 23(1)(a) of the Self-Government Act prevented the legislature from enacting a law authorising such an acquisition. He also argued that the Tribunal had erred in construing the Act to authorise the respondent to refuse licences in order to prevent people, such as the appellant, from taking ground water from their properties when s13 effectively recognised their continuing right to such water. He submitted that certain specific findings had not been open to the Tribunal on the evidence before it. In addition, he argued that the Tribunal had failed to recognise the existence of a discretion to grant or refuse a licence and/or that it had failed to properly exercise that discretion. The Notice of Appeal had not included any ground raising the last mentioned point but Mr Mossop fairly indicated that the respondent did not object to it being taken on the appeal.

The limitation on legislative power

31. Mr Meagher commenced his attack upon the Tribunal's decision with the submission that it had fallen into error by concluding that the refusal of the appellant's application for a licence to take water was compatible with his proprietary right to the water. In fact, that right had not only been extinguished but effectively "acquired" by the Territory contrary to section 23(1)(a) of the Self-Government Act. In the absence of a licence he could not lawfully take a single drop of the water and, in practical terms, his right had been nullified. Furthermore, the adoption of the 70 megalitre limit meant that for each megalitre the appellant was prevented from taking, the Territory acquired the opportunity to "allocate" a comparable amount to others and to make a financial gain, whether from the proceeds of auctions conducted by the respondent pursuant to s 28 of the Act or otherwise. In any event, the manner in which the licensing scheme had been administered clearly involved the arrogation of control over all of the water in the Territory, including ground water within the appellant's property, and the right to permit others to use it upon payment of licence fees. The Act should not be construed as authorising such arrogation of pre-existing rights.

32. On the other hand, Mr Mossop argued that respect for the proprietary rights of pre-1998 leaseholders was reflected in a provision in s 27 which obviates the need for those leaseholders to obtain an allocation from the Territory pursuant to Pt 6. He submitted that the Tribunal had been right to treat the licensing regime as akin to normal planning requirements which merely regulate and control the exercise of continuing proprietary rights to land. Section 35(7) had clearly authorised the respondent to refuse the application if, after considering the stipulated criteria, it had formed the view that a licence should not be granted and the Tribunal had merely affirmed a decision that was amply justified by reference to such criteria.

33. There have been few authorities directly addressing the scope of the s 23(1) of the Self-Government Act but, as Miles CJ and Gray J observed in Frank v Australian Capital Territory (2001) 161 FLR 262 at 266-267, the restriction on legislative power thereby imposed reflects the restriction implicit in s 51(xxxi) of The Constitution ("the Constitution") which provides that the Commonwealth Parliament has powers to make laws for the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws. I might mention in passing that the principle that no person should be deprived of property save on just terms has long been recognised as a fundamental human right which was acknowledged, for example, in article 17 of the Declaration of the Rights of Man approved by the National Assembly of France in 1789. The nature and extent of the restriction on legislative power imposed by s 51(xxxi) of the Constitution was discussed by Deane J in Commonwealth v Tasmania (the Tasmanian Dams Case) (1983) 158 CLR 1 in the following passage at 282-284:

In Bank of N.S.W. v. The Commonwealth (1948), 76 CLR 1, at 349, Dixon J. pointed out that s51 (xxxi) is "not to be confined pedantically to the taking of title ... to some specific estate or interest in land recognized at law or in equity ... , but ... extends to innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property". In the same judgment, (at 350), his Honour was at pains to emphasize that the Constitution did not permit the Parliament to achieve by indirect or devious means what s 51 did not allow to be done directly.

On the other hand, laws which merely prohibit or control a particular use of, or particular acts upon, property plainly do not constitute an "acquisition" of property for purposes of the Commonwealth. Commonly, such laws are of general application and apply to property by reason of its being property of a particular description or by reference to the nature of the use or act prohibited or controlled. While a law which restricts or controls the use or enjoyment of property by means of specific identification of the property affected comes closer to the area of acquisition of property, it is, as a matter of ordinary language, impossible to say that there has been any acquisition of property if all that is involved is restriction of what can be done upon it ( see eg Belfast Corporation v OD Cars Ltd, [1960] AC 490). The mere extinguishment or deprivation of rights in relation to property does not involve acquisition.

Difficult questions can arise when one passes from the area of mere prohibition or regulation into the area where one can identify some benefit flowing to the Commonwealth or elsewhere as a result of the prohibition or regulation. Where the benefit involved represents no more than the adjustment of competing claims between citizens in a field which needs to be regulated in the common interest, such as zoning under a local government statute, it will be apparent that no question of acquisition of property for a purpose of the Commonwealth is involved. Where, however, the effect of prohibition or regulation is to confer upon the Commonwealth or another an identifiable and measurable advantage or is akin to applying the property, either totally or partially, for a purpose of the Commonwealth, it is possible that an acquisition for the purposes of s 51 (xxxi) is involved. The benefit of land can, in certain circumstances, be enjoyed without any active right in relation to the land being acquired or exercised (see eg Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493; (1959) 100 CLR 1). Thus, if the Parliament were to make a law prohibiting any presence upon land within a radius of one kilometre of any point on the boundary of a particular defence establishment and thereby obtain the benefit of a buffer zone, there would, in my view, be an effective confiscation or acquisition of the benefit of use of the land in its unoccupied state notwithstanding that neither the owner nor the Commonwealth, possessed any right to go upon or actively to use the land affected.

34. It should be noted that Deane J disagreed with the conclusions expressed by Mason J (at 146), Murphy J (at 181-182) and Brennan J (at 248) that the restrictions imposed by the relevant Commonwealth legislation had not involved an acquisition of property and that this point was not determined by Wilson and Dawson JJ. However, the difference of view does not seem to have reflected any difference of principle but rather a difference as to whether the provisions of the legislation in question in that case gave rise to an acquisition of property by the Commonwealth. Furthermore, whilst differing from Deane J as to the disposition of the matter, Murphy J observed that the requirement that the Commonwealth obtain some property was satisfied if it was obtained by its agents and that the requirement "should be applied liberally".

35. Following this case and further decisions of the High Court in Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 and Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297, Prof Leslie Zines suggested that the general principle that had emerged was that a constitutional guarantee should be given a generous interpretation and that the High Court "emphasises the importance of `substance' as against `form'": (see Zines, The High Court and the Constitution, 4^th ed, 1997, at 409). That opinion seems to have been vindicated by subsequent decisions of the High Court in Newcrest Mining (WA) Ltd v BHP Minerals Ltd & Commonwealth (1997) 190 CLR 513 and Smith v ANL Ltd (2000) 204 CLR 493 and by the Full Court of the Federal Court of Australia in Australian Capital Territory v Pinter (2002) 121 FCR 509.

36. If the relevant provisions had purported to prevent someone with a Crown lease those from entering his or her land without a licence and it had been refused, then the potential application of s 23(1)(a) of the Self-Government Act may have been more obvious. In the present case, however, the "property" which Mr Meagher suggested had been effectively acquired by the Territory as a consequence of the decision to refuse the appellant a licence was his right to the ground water under the property. As previously mentioned, Mr Mossop did not dispute that the property demised by the Crown lease had included the right to such ground water but did submit that s 23(1)(a) of the Self-Government Act should not be taken to extend to rights of that nature. Nonetheless, it is well established that the word "property" should be construed broadly: see, for example, Minister of State for the Army v Dalziell (1944) 68 CLR 261; Mutual Pools & Staff Pty Ltd v Commonwealth; Frank v Australian Capital Territory; and Australian Capital Territory v Pinter. I am unable to see any reason to doubt that proprietary rights to water under land the subject of a Crown lease should not be regarded as "property" for the purposes of the section.

37. Mr Mossop also argued that any such property had not been "acquired". The appellant's right to the water had not been extinguished: he had merely been prevented from having any access to it. The restriction could not be regarded as permanent because he might one day be granted a licence. The relevant provisions were regulatory in character and hence less amenable to characterisation as laws made "with respect to property". Furthermore, even if the right had been effectively extinguished, it had not been "acquired" by the Territory.

38. Whilst each of these points was persuasively argued, I am not satisfied that any of them offer a satisfactory answer to Mr Meagher's contention. The effect of the decision is not comparable to that of a planning decision as the Tribunal suggested. Such decisions may impose limits on the nature of the buildings that may be erected or even on the types of activity that may be undertaken on the land in question but they do not wholly nullify the proprietary rights of the owner by preventing him or her from having any access to the property or from selling or leasing it. The present effect of the respondent's decision is more akin to that in the example, posited by Deane J, of the Commonwealth making a law prohibiting any presence upon land within a radius of one kilometre of any point on the boundary of a particular defence establishment. The appellant's proprietary rights have not merely been limited by the imposition of a restriction on the manner in which the water may be used but, in effect, wholly nullified.

39. The position is somewhat similar to that which the High Court addressed in Newcrest Mining (WA) Ltd v Commonwealth. In that case proclamations issued pursuant to a Commonwealth statute were said to have had the effect of "sterilising" the benefits which Newcrest might otherwise have obtained from mining leases over areas subsequently added to the Kakadu National Park. The High Court held that the acquisition of the land freed from Newcrest's rights to conduct mining operations thereon and the acquisition of the minerals freed from the company's rights to mine them had satisfied the constitutional requirement of acquisition, notwithstanding the fact that the benefit or advantage obtained by the Commonwealth had not been the same as that taken from Newcrest. The proclamations, though subject to amendment or revocation, were held to be invalid to which extent they would otherwise have effected such acquisitions.

40. In this case, the sterilisation of the appellant's rights to take water from the property would not free any of the Territory's land from the appellant's rights over it but it would mean that the Territory's rights to water in the relevant aquifer were freed from the appellant's rights to take such water, albeit from a bore on his own property. Furthermore, given the, albeit self-imposed, limitation of 70 megalitres per annum available to be "allocated" from the relevant subcatchment area, any restriction on the right of lease holders such as the appellant, to take water from their properties would also enable the Territory to sell allocations of corresponding amounts of water to others. Hence, to return to the language used by Deane J, there would have been "an effective confiscation or acquisition" of the relevant property.

41. It is true that the legislation would not have had this effect by direct operation of law but rather by a decision of the respondent made under s 35. However, as Dixon J pointed out in Bank of New South Wales v Commonwealth, the legislature is not permitted to achieve by indirect means that which the relevant restriction on legislative power would not permit to be done directly. Nor, in my opinion, does it matter that the decision to deny the applicant a licence was based in whole or in part upon circumstances that arose after s 33 came into operation.

42. The existence of a hypothetical possibility that the appellant's rights could be effectively restored should the respondent subsequently decide to issue him a licence cannot derogate from the validity of Mr Meagher's contention that those rights have presently been taken from him and for an indefinite period. Given the relative scarcity of licences and the value likely to be ascribed to them, his prospects of obtaining one by reaching the top of the waiting list appear bleak. It was not suggested that any licence had ever been cancelled or surrendered. In any event, the same contention could have been raised in Newcrest Mining (WA) Ltd v Commonwealth because the proclamations that sterilised the mining rights in that case were revocable instruments. The proposition seems to be predicated upon an assumption that property is not acquired in any relevant sense if there is a chance that the government that has taken it may one day give it back. I am unable to accept that the guarantee provided by s 23(1)(a) of the Self-Government Act was intended to be limited in that manner.

43. It is true that schemes of regulation of general application are less likely to be regarded as laws with respect to property. Statutes that resolve or adjust competing claims, obligations or property rights of individuals as an incident of more general regulation are not normally regarded as having such a character.

44. However, such observations do not mean that, in dealing with an issue of this nature, one need only look at the statute to see whether the property in question has been taken under the rubric of "regulation". It may be easier to regulate many areas of activity if the proprietary rights of the individuals concerned were to be extinguished and the relevant property vested in the government but, as the decision in Georgiadis v Australian and Overseas Telecommunications Corporation demonstrates, that will not necessarily prevent a conclusion that the regulatory scheme involves an acquisition of property. As Prof Zines has suggested, in deciding whether property has been acquired contrary to a constitutional guarantee, or, by parity of reasoning, a guarantee in the Self-Government Act, one must look beyond matters of form to the substance of the relevant provisions.

45. In the Tasmanian Dams case, Brennan J, observed that the distinction between a law that provides for an acquisition of property and a law that does not provide for such an acquisition had been clearly drawn in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 where Mason J had said, at 428:

It is one thing to say that a law which is merely regulatory and does not provide for the acquisition of title to property is not a law with respect to acquisition of property. It is quite another thing to say that a law which does provide for the compulsory acquisition of title to property and which also happens to be regulatory is not a law with respect to the acquisition of property."

46. This distinction may be of crucial importance. There can be little doubt that if a regulatory scheme of general application had required Newcrest Mining (WA) Ltd to obtain a mining licence before taking any further minerals from its mining leases, the relevant provision would not have been held to be a law with respect to the acquisition of property, provided it had been "merely regulatory" in character. It would clearly have fallen within that description if applicants for licences had been obliged to demonstrate such matters as the possession of adequate expertise and equipment to safely conduct mining operations and a record of previous compliance with environmental laws. On the other hand, if instead of issuing the proclamations, the Commonwealth had authorised a statutory authority to withhold licences from Newcrest and others with mining leases in the area in order to give effect to a policy of sterilising the rights arising under such leases, then the relevant provision would have been a law with respect to the acquisition of property, notwithstanding the fact that it may have also been regulatory in character.

47. Similarly, in the present case, the licensing provisions contained in Pt 7 of the Act would undoubtedly be valid if they could reasonably be construed as authorising the grant or refusal of licences for reasons that were merely regulatory. However, if they were to be construed as authorising the respondent to sterilise property rights under pre-1998 leases in circumstances amounting to an acquisition of property by the Territory other than on just terms then the provisions would, in my opinion, be invalid by reason of s 23(1)(a) of the Self-Government Act.

48. As Mason CJ, Deane and Gaudron JJ said in the subsequent case of Georgiadis v Australian and Overseas Telecommunications Corporations at 308, there will inevitably be borderline cases in which the question is finely balanced. However, one does not need to adopt an excessively liberal approach to the interpretation of s 23(1)(a) of the Self-Government Act to conclude that a decision made for the express purpose of sterilising a person's right to take any of the ground water to which he or she has a proprietary right under a pre-1998 lease would involve an acquisition of property by the Territory. It has not been suggested that the water under the property is contained within a discrete pool or cistern rather than forming part of an aquifer covering a larger area and the rights to the use, flow and control of all ground water, other than that under land the subject of pre-1998 leases, vests in the Territory by reason of s 13. Hence, as the rights to water under land the subject of pre-1998 leases were effectively nullified or frustrated, the Territory's right to water from the relevant aquifer would be correspondingly enlarged.

49. In further written submissions filed, by leave, after the hearing, Mr Mossop expressed concern that acceptance of Mr Meagher's submissions on this issue would have significant ramifications. He suggested that any land use regulation imposing constraints on the rights of occupiers to undertake development on their land would be threatened because restrictions on development in one part of Canberra might affect the price obtainable for Crown leases of land in other parts and hence provide financial benefits to the Territory. This concern is unfounded. Such a restriction on development would not amount to an acquisition of property, even if the Territory thereby derived some indirect benefit, because it would merely limit construction on the land and neither the land itself nor any other proprietary right would have been acquired. The concern seems to have been based upon a misapprehension, which was apparently shared by the Tribunal, that the proprietary right in question is the leasehold interest in the land and that the respondent's decision could do no more than prevent the appellant from lawfully undertaking a particular activity on the land, namely taking water. That is not the case.

50. The proprietary right which the appellant asserts is the right to the ground water under his property. Water may, of course, be property, just as minerals and other commodities may be property. It may be taken, transported, bought, sold or stolen. Indeed, in introducing the Water Resources Bill 1998 (ACT) ("the Bill") the Minister explained that the provisions of the Act dealing with allocations were intended to facilitate trade in water. The proprietary rights to it may derive from a Crown lease, just as the rights to minerals may derive from a mining lease, but that does not mean that their proprietary nature may be ignored and their sterilisation justified as a mere restriction of activity. Nor does it mean that they fall outside the scope of the protection provided by s 23(1)(a) of the Self-Government Act.

51. Mr Mossop stressed the fact that there had been transitional provisions enabling an existing leaseholder, such as the appellant, to continue existing water usage for a period of twelve months whilst awaiting the grant of a licence and suggested that if he had applied within this period a licence would probably have been granted. However these provisions were of no assistance to the appellant because he was unaware of them and, in any event, a person cannot be deprived of the protection of s 23(1)(a) of the Self- Government Act merely because he or she failed to grasp such a statutory life buoy before the stipulated time elapsed.

52. For these reasons I have concluded that it would not have been within the power of the legislature to pass laws for the acquisition of proprietary rights to water save on just terms, whether directly by operation of the Act or indirectly by authorising authorities such as the respondent to make decisions, at least in relation to the rights of someone like the appellant with an existing bore and hence an existing capacity to exercise such rights. Any issue as to the rights of pre-1998 leaseholders without existing bores must be left for another day.

53. However, Mr Meagher did not submit that any of the provisions of the Act should be construed as having such an effect. He argued that, on the contrary, s 13 evinced a clear intention to respect such rights. He also pointed out that s 28 of the Self-Government Act provides that any provision of an ACT enactment can have no effect to the extent that it is inconsistent with a law defined by subsection (2), but such a provision shall be taken to be consistent with such a law to the extent that it is capable of operating concurrently with that law.

54. Accordingly, it is necessary to consider whether and, if so, how the Act might be construed in a manner that would be consistent with s 23(1)(a) of the Self- Government Act.

The absence of any intention to extinguish pre-existing rights

55. Furthermore, even if s 28 of the Self-Government Act had been of no application, it would still have been necessary to construe the licensing provisions contained in Pt 7 of the Act by reference to established principles of statutory construction.

56. Mr Meagher placed particular reliance upon the long standing principle or rule of construction that a statute will not be construed as taking away an existing common law right unless its language is reasonably capable of no other construction: Sargood Bros v Commonwealth (1910) 11 CLR 258 per O'Connor J at 279; see also Pyneboard Pty Ltd v Trade Practices Commission (1983) 45 ALR 609 at 617; Sorby v Commonwealth (1983) 46 ALR 237 at 258; R v Cain [1985] 1 AC 46; Commissioner of Australian Federal Police v McMillan (1987) 70 ALR 203 at 206 and Buck v Comcare (1996) 137 ALR 335 at 340.

57. This rule of construction has been applied not only in relation to legislation but also to "delegated lawmaking", to use the phrase employed by Kirby J in Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 414 [28]. His Honour also adverted to the observation of Mason J in American Dairy Queen (Qld) Pty Ltd v Blue Rio Pty Ltd (1981) 147 CLR 677 at 683 that there is some ground for thinking that it has added force in its application to common law principles respecting property rights.

58. Whilst the conclusion that the Act does not reflect any legislative intention to authorise the acquisition of rights contrary to s 23(1)(a) of the Self-Government Act might be at least theoretically compatible with an intention to authorise others to extinguish them, it was not suggested that the Act evinced even that intention. On the contrary, as the Tribunal found, the provision excepting ground water under land the subject of pre-1998 leases from the operation of s 13 appears to reflect the legislature's recognition of the proprietary rights of lessees under pre-1998 leases and its intention not to extinguish or acquire such rights. The fact that the holders of such leases were exempted from the need to obtain allocations of water under Pt 6 also suggests that the legislature intended that the existing rights of such leaseholders would continue.

59. Consequently, it was incumbent upon the Tribunal to construe the licensing provisions contained in Pt 7 of the Act in a manner that was substantially consistent with the appellant's pre-existing rights to ground water under the property.

Section 33

60. The issues that arise for determination on this appeal are further complicated by the language employed in s 33 which, at face value, suggests a broader application than the legislature presumably intended.

61. As mentioned earlier s 33(1) provides that, subject to other provisions of the section, "a person shall not take water without a licence". The remaining subsections provide some exceptions for lessees or occupiers of land adjacent to a waterway, campers and travelling stock, and officers exercising power or authority under the Bushfire Act 1936 (ACT) or the Fire Brigade Act 1957 (ACT). However, the section is otherwise unqualified. Furthermore, s 4 of the Act provides that the word "take" in relation to water includes-

(a) in the case of bore water - to allow water to flow or be pumped from the bore; and

(b) in any other case -

(i) to withdraw, pump, extract, use or reuse and to divert for the purpose of using or reusing, the water; or

(ii) to do any other thing that results in a reduction of flow in a waterway.

62. Consequently, if s 33 were to be construed literally and without the implication of any unstated limitation, it would criminalize any "use or reuse" of water without a licence. However, it seems highly unlikely that the legislature intended to make it an offence to make coffee, clean one's teeth, use bubblers in school playgrounds or engage in any of the other ordinary usages of water supplied to ACT properties by ActewAGL. Hence, s 33 must clearly be read down to avoid absurdity. The real difficulty lies in attempting to determine how far it should be read down to fairly reflect the intention of the legislature.

63. It seems reasonable to assume that s 33(1) must be construed as being subject not only to the qualifications contained in the succeeding subsections but at least to an implied qualification that the proscription should not extend to subsequent users of water supplied by ActewAGL or others who have initially taken it pursuant to a licence. Even that qualification would not protect a resident for prosecution for taking water from tanks that he or she had erected in a conscientious attempt to reduce reliance upon the ACT water system during times of drought. Since the Minister made it clear in his comments during the debate concerning the Bill that the Government wished to encourage householders to rely upon rainwater collected in that manner, it seems highly unlikely that the legislature had intended to criminalize such behaviour. Similarly, it is difficult to imagine the legislature intended to impose a requirement for people to obtain a licence to use existing dams on rural properties or to use agricultural piping under lawns or adjacent to paths so that stormwater which would otherwise run off and be wasted would flow into their gardens.

64. However, for present purposes the most relevant questions are whether the s 33(1) was intended to apply to the taking of water pursuant to a pre-existing existing right and, if so, how the licensing regime imposed by Pt 7 might be reconciled with the legislature's apparent intention not to abrogate such rights?

65. Mr Mossop submitted that the section clearly applied to ground water under land the subject of pre-1998 leases and that there were no valid grounds for reading it down in any manner that would give the holders of such leases special entitlements to obtain licences or to gain priority over other applicants. The section itself contained no hint of any intention to so limit its application. The provision in s 35(9) making it clear that a licence could be granted to take such ground water without an allocation strongly suggested that such a licence would be required and that the other requirements of the section were equally applicable to applications of that kind. Furthermore, various passages in the explanatory memorandum confirmed that the legislature had intended that the licensing regime apply to and provide some control over such ground water.

66. Mr Mossop also relied upon the objects as stated in s 3, namely:

(a) to ensure that the use and management of the water resources of the Territory sustain the physical, economic and social wellbeing of the people of the ACT while protecting the ecosystems that depend on those resources; and

(b) to protect waterways and aquifers from damage and, where practicable, to reverse damage that has already occurred; and

(c) to ensure that the water resources are able to meet the reasonably foreseeable needs of future generations.

67. He argued that the other provisions of the Act should be interpreted by reference to these objects. He maintained that it was in the public interest for them to be effectively pursued and that their attainment would be substantially prejudiced if those who held pre-1998 leases were permitted to take ground water from their properties without licences, or if their rights were permitted to otherwise interfere with the respondent's pursuit of these objects by the application of policies reflected in the guidelines and/or management plan.

68. It is difficult to imagine that anyone concerned about the maintenance of the Territory's environment would doubt that it was in the public interest for water resources to be subject to government ownership or control. However, that does not mean that the pre-existing rights of others may be ignored or overridden. The Territory has legislative power to acquire proprietary rights, whether of water, land or anything else, but only on just terms. If it does not wish to acquire the rights on just terms then it may simply wait and acquire them by effluxion of time, that is as pre-1998 leases expire and the land formerly subject to them progressively falls outside the scope of the exception to s 13. Similar considerations arise in relation to other environmental issues. For example, there may be sound ecological reasons for the acquisition of land adjacent to dams or waterways. In such circumstances the Territory has power to compulsorily acquire the proprietary rights of the owner and/or lessee of the land, but if it does so it must pay a fair price for them. The position is no different if the proprietary rights acquired relate to water or other types of property.

69. The principle that the legislature will not readily be presumed to have intended to abrogate existing rights applies notwithstanding the fact that some public benefit is intended by the statutory provision in question. Indeed, one would like to think that all legislation is intended to achieve some public benefit. In the absence of any indication that the rights in question are to be abrogated, the objects of the legislation may be relevant only insofar as they cast some light on the manner in which relevant provisions may be interpreted consistently with such rights.

70. In the light of these principles, it is tempting to assume the Act reflected a legislative scheme pursuant to which the Territory acquired the right to the use, flow and control of all water other than ground water under land the subject of pre-1998 leases, exercised that right by the allocation of some of the water thereby brought under its control and authorised the issue of licences to take water so allocated. Such a construction of the Act would have limited the application of the licensing regime to the taking of water which the Territory had a lawful right to control by reason of s 13 and prevented a number of incongruities inherent in the construction for which the respondent now contends.

71. However, whilst Pt 7 contains no express references to ground water taken from land subject to pre-1998 leases and the inferential reference in s 35(9) is scarcely compelling, I am satisfied that the legislature intended to require those seeking to take ground water from land the subject of pre-1998 leases to obtain licences. In contrast to Pt 6, Pt 7 does not contain any general provision to exempt such applicants from the requirement and the explanatory memorandum does contain a number of statements which confirm that the requirement was intended to apply to the taking of ground water from such land. Indeed, one such statement asserted that "control of the taking of ground water which is not reserved to the Territory is by licences only". It is true that the management plan includes the statement that "all water under leases of Territory land granted before 11 December 1998 is controlled by the lessee because such leases did not specifically exclude the right to such water." However, whilst the management plan is required to be approved by the Minister and is disallowable by the Legislative Assembly, it is not a document of a kind referred to in s 142 of the Legislation Act 2001 (ACT) and, despite the apparent breadth of the power conferred by s 141, such instruments are rarely capable of assisting in ascertaining the meaning of the relevant provision: see Federal Commissioner of Taxation v Murray (1990) 21 FCR 436 at 448-449. Furthermore, the reference to "control" in the management plan must be read in the context of a passage dealing with "water ownership" and "the right" to water rather than control of a merely regulatory nature.

72. Consequently, I have concluded that s 33 was intended to apply to the taking of ground water under land subject to pre-1998 leases.

Section 35

73. This finding does not require any conclusion that the legislature intended that the only source of any real and effective rights to water would be the provision of licences issued under s 35 or that, in deciding whether to issue such licences, the respondent should be permitted to ignore existing rights arising from pre-1998 leases or allocations. On the contrary, I see no reason to suppose that the legislature intended to ignore the limitations imposed on its legislative power by the Self-Government Act. Nor do I see any reason to suppose that, despite excepting ground water under land the subject of pre-1998 leases from the provision in s 13 vesting in the Territory the right "to the use, flow and control of water resources", the legislature nonetheless intended to override the rights of those holding such leases and arrogate to the respondent the right to grant or withhold access to all of the water without regard for such rights.

74. The suggestion that the licensing regime should be administered without regard for pre-existing rights would also seem to require an assumption that allocations of water pursuant to Pt 6 were not intended to create any real entitlement to the water allocated. Section 28(4) provides that after the commencement of the section the respondent's power to allocate water must be exercised by public auction or public tender or, if either method is unsuccessful, by public contract. In essence, the provision authorises the respondent to sell allocations of water on the open market. Yet if, as the respondent maintains, the right to water does not give rise to any concomitant right to a licence, then an allocation would be worthless. Indeed, the respondent would be lawfully entitled to pocket the purchase price and immediately explain that it did not intend to permit the purchaser to obtain one drop of the water that he or she thought had been purchased. The Act contains no provision that would entitle the purchaser to relinquish the allocation and receive a refund of the purchase price if denied a licence. Nor could it be assumed that allocations would be made and licences issued contemporaneously. A licence may not be granted to a person who does not have an allocation and the Act envisages that allocations may be obtained by bidding at a public auction.

75. When it was suggested that the legislature could not have intended to authorise the respondent to sell an allocation of water but prevent the purchaser from obtaining access to it by refusal of a licence, Mr Mossop was obliged to contend that those purchasing allocations of water from the Territory were, in substance, not buying the right to actually obtain the water but merely the right to apply for licences. He was unable to indicate whether potential purchasers had been informed that in entering into contracts to purchase allocations they were not acquiring any right to obtain the water so allocated.

76. The implicit suggestion that allocations under s 28 were intended to confer no substantial rights other than rights to apply for an licences would also appear to require an assumption that the criteria in s 29 were intended to serve no real purpose.

Section 29 provides as follows:

In deciding whether or not to grant an allocation of water under section 28, the Minister or the authority, as the case requires, shall take into account--

(a) the availability of water in the area in question; and

(b) the existing and likely future demand for water in the area in question; and

(c) the environmental flow guidelines for the waterway or aquifer in question; and

(d) any agreement entered into by or on behalf of the Territory with the Commonwealth, a State or another Territory concerning the sharing of water; and

(e) any other matters the Minister or the authority, as the case may be, considers relevant.

77. If allocations were not to provide any real rights to the water allocated then these considerations would be substantially irrelevant.

78. Despite Mr Mossop's able arguments to the contrary, I am unable to accept that the legislature intended to create a licensing regime entitling the respondent to effectively ignore the rights of others, whether arising by reason of pre-1998 leases or allocations, and to treat all of the water in the Territory as if it were equally within its control and able to be doled out or withheld at its discretion, subject only to certain statutory conditions and criteria.

79. In introducing the Bill in 1998 the Minister explained that it was intended to facilitate the Territory's participation in a national scheme and to permit the purchase and sale of allocations. His speech included the statement that:

The allocation system, which will allow a trade in water, will allow those who have excess water to use it or sell it, to trade it as it were, and that will allow an appropriate and proper use of that resource.

You have to remember that we have initially put aside water for environmental flows. We have allocated to existing users. We have put aside water for urban use. We have put aside a generous reserve. It is only the water which is left that will be traded.

80. It would be difficult, if not impossible, to reconcile the stated intention to allow a trade in water with an intention to permit the respondent to withhold any right to obtain the water allocated and treat the allocations as conferring no real rights other than the right to apply for licences. On the contrary, they were clearly intended to permit the sale of water. The comments also tend to confirm the legislature's intention that the rights of existing users were to be respected.

81. In these circumstances, I am unable to accept that the Act should be construed in a manner that would involve, in effect, imputing to the legislature a cynical intention to pay lip service to pre-existing rights and create a false impression that allocations would enable trade in the water so allocated whilst, at the same time, providing for such rights to be ignored or overridden.

82. How then, can the provisions of Pt 7 be reconciled with a legislative intention to respect the rights of those with an existing entitlement to water, whether arising under a pre-1998 lease or by means of an allocation? In my opinion the answer is to be found in construing s 35 as providing the respondent with a discretion which must be exercised in the context of existing rights rather than with a power to nullify them.

83. It may be noted that, whilst s 29 requires the Minister or the respondent, as the case requires, to take into account such considerations as the availability of water in the "area in question", there is nothing in ss 28 or 29 to require that the allocation be subject to conditions stipulating the point at which or the manner in which the water allocated should be taken. Those considerations have apparently been left for the respondent to determine in the context of applications for licences to take the water.

84. The fact that allocations were intended to confer actual rights to take water and that the licensing regime was intended to govern such considerations as the point from which it was taken is evident from the following passage in the explanatory memorandum:

An allocation is the right to take certain water and can be traded as an asset. However, for the water to be physically taken at a particular place within the ACT, a licence to take water is also required to ensure that taking water at a particular point does not interfere with environmental flows or cause environmental damage and that the applicant has a satisfactory environmental record. (emphasis added)

85. Construed by reference to this distinction between the right to water conferred by an allocation and the right to take the water from a particular point, the provisions of Pt 6 and Pt 7 of the Act can be seen as complementary elements of a consistent and sensible statutory scheme. It also enables the criteria specified in ss 29 and 35(7) to be seen as relevant to different issues rather than as repetitive requirements for the same authority to consider substantially similar criteria in relation to the same issue before deciding whether an applicant should be given any real rights to water already purportedly allocated.

86. A person with no existing rights to water may, of course, apply for an allocation under s 28 and, in deciding whether to grant the application the Minister or the respondent, as the case requires, will be obliged to take into account the criteria specified in s 29. Hence, if the respondent were to consider an application for an allocation of water in a particular subcatchment area, it would be required to take into account such factors as the general availability of and likely demand for water in that area. It is at this stage that the environmental flow guidelines for the waterway or aquifer in question must be considered: see s 29(c). However, if the allocation is granted, the applicant will gain the right to obtain from the Territory the water so allocated.

87. To actually take the water the applicant will need to obtain a licence and in deciding whether to grant such a licence the respondent will be required to take into account the criteria specified in s 35(7) to the extent relevant. However, despite some superficial similarity in the description of the criteria, the respondent is neither required nor authorised to reconsider whether the water should be allocated. That issue will already have been determined by the allocation under s 28 which will have effectively granted the applicant the right to the water. Section 35 has a different focus. It is concerned with obvious regulatory concerns such as whether the applicant has a satisfactory environmental record or has been convicted of relevant offences and with issues relating to whether he or she should be permitted to take the water to which he or she is entitled from a particular place. In some cases there may be few places from which the water could be taken because the applicants may have only single residential allotments of land. In other cases the applicants may have large rural holdings with many potential sites at which water could be taken from a waterway or bore. In any event, no issue will arise as to whether the allocation of that quantity of water to the applicant would be contrary to the policy reflected in the guidelines. That issue will already have been resolved and the applicant will have a legitimate expectation that he or she will be issued with a licence to take the water allocated provided, of course, that there is no legitimate reason for refusal by reason of the criteria in s 35(7) as properly understood in the context of the applicant's existing rights.

88. It is presumably for this reason that the criteria referred to in s 35(7) contain no reference to the environmental flow guidelines. This omission is in stark contrast to the provision in s 29 which, as mentioned earlier, requires the Minister or the respondent, in deciding whether to grant an allocation, to take into account not only the availability and likely demand for water in the area in question but the environmental flow guidelines for the waterway or acquifer in question. The criteria is s 35(7) must be considered in the context of the rights provided by the allocations and the legitimate expectations thereby arising. The relevant question will not be whether the applicant should be allocated water from the relevant "area in question", to use the phrase employed in s 29, but whether, given that the applicant has already been allocated the right to that water, he or she be permitted to take it from a particular point or, to use the term employed in s 35(7)(d)(ii), "the place to which the application relates".

89. Whilst the appellant in the present case does not, of course, rely upon rights arising by reason of an allocation of water but upon rights arsing under a pre-1998 lease, there is no reason to assume that the provisions of Pt 7 were intended to be construed differently or that the discretion provided by s 35(7) was intended to be exercised differently in such circumstances. Furthermore, in presenting the Bill on 21 May 1998 Mr Smyth, the Minister for Urban Services, stated that existing users "will be issued with allocations reflecting their current usage". Whilst the Bill actually provided that such a person would not require an allocation, the statement does suggest that the legislature intended that current users, such as the appellant, would have the same rights as those to whom allocations were subsequently made.

The exercise of discretion

90. The respondent clearly acted on the understanding that, whatever provisions may have been contained in other portions of the Act, s 35 entitled it to decide whether to dole out or "allocate" water without regard for pre-existing rights. The very use of the word "allocate" in both the initial letter advising the appellant of its decision and the reasons subsequently provided to the Tribunal demonstrate, in my opinion, that the respondent had misconceived the nature of the discretion conferred upon it. No issue as to the allocation of water arose for consideration in this context. Such issues fell for consideration, if at all, under Pt 6; not under Pt 7.

91. The Tribunal seems to have approached the matter on a similar basis. That is evident from its reliance upon the fact that what it described as the "sustainable limit" set in the management plan had been "fully allocated". Similarly, it relied upon the proposition that, "the Guidelines...represent the legislatively determined sustainable limit of water available for use under a licence." In fact, as I have mentioned, these considerations may have been relevant to decisions about allocations but they were not relevant to the criteria set out in s 35(7) for the grant of a licence. That subsection does not contain any reference to the Guidelines or to any concept of a "sustainable limit of water available for use under a licence", whether determined by reference to Guidelines or otherwise.

92. The Tribunal also seems to have failed to understand the discretionary nature of the decision it was required to review. Whilst, as Mr Mossop suggested, it did refer to some factors which might have been relevant to the exercise of such a discretion, it does not seem to have taken into account in that context the impact which the refusal of a licence would have on the appellant's existing rights or the prejudice that would be caused to him by having to watch his extensive garden die and the money invested in it wasted.

93. Furthermore, after adverting to the fact that the requirement for a licence had not come to the appellant's notice for some years, the Tribunal said that this did not justify the granting of a licence where to do so would clearly be contrary to "one of the criteria necessary to be satisfied". This statement suggests that the Tribunal had been acting on an assumption that the criteria contained in s 35(7) were not merely factors to be taken into account but a collection of conditions each of which had to be satisfied before a licence could be granted. That impression is strengthened by the absence of any discussion reflecting an apparent attempt to weigh the competing considerations that should have been taken into account in the exercise of such a discretion.

94. I also accept Mr Meagher's submission that it was not open to the Tribunal to find that the grant of a licence would result in an adverse effect on the aquifer. The observation was apparently predicated not only upon an assumption that the appellant had no pre-existing right to take the water but a misunderstanding of the effect of the Guidelines. Neither the Guidelines nor the management plan purport to define a level of allocation at which an adverse effect "would result". The management plan indicates that little analysis of the actual performance of ACT aquifers had been undertaken at the time of its preparation and suggests that the amount of ground water for extraction be limited to 10% of ground water recharge "until research on a particular subcatchment determines that a higher level of ground water usage is sustainable". This view seems to have been based upon the so-called "precautionary principle". In this context the mere fact that the respondent had been able to point to some portion of these documents suggesting, albeit by inference, that a total "allocation" of 70 megalitres per annum might be safe, did not justify an inference that, conversely, the potential use of 71.5 megalitres would adversely affect the aquifer.

95. For these reasons the appeal must be upheld.

The appropriate orders

96. Mr Mossop argued that even if appealable error were established, this Court lacked jurisdiction to determine for itself the issue that had been before the Tribunal, unless it was clear that the correct decision would be an inevitable consequence of the application of correct legal principles to the factual findings made by the Tribunal. In support of this contention he relied upon successive decisions of the Federal Court of Australia including Minister for Immigration & Ethnic Affairs v Gungor (1982) 63 FLR 441, Director-General of Social Services v Hangan (1982) 70 FLR 212 and Morales v Minister for Immigration and Ethnic Affairs (1995) 60 FCR 550.

97. It should be noted that the terms of s 46 of the Administrative Appeals Tribunal Act 1989 (ACT), whilst similar, are not precisely co-extensive with those in s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) and that the general powers of this Court conferred by s 20 of the Supreme Court Act 1933 (ACT) and s 48A of the Self-Government Act are much broader than those conferred upon the Federal Court of Australia. I do not accept that, as a matter of law, this court is similarly constrained. Furthermore, the nature of the cases coming before this Court on appeal from the Territory Tribunal tend to be somewhat different from those which come before the Federal Court on appeal from the Commonwealth Tribunal and the inflexible application of the principle for which Mr Mossop contended in this context could give rise to a substantial waste of time and money by reason of the need to remit residual and comparatively trivial issues back to the Tribunal after the major issues had been resolved on purely legal grounds. I accept that it will generally be appropriate to remit any substantial issues left unresolved to the Tribunal for resolution in accordance with the principles determined on appeal but am of the opinion that the Court has sufficient power to resolve those issues itself, should the interests of justice require such a course.

98. It is unnecessary to finally resolve this issue as I have concluded that the appellant had a legitimate expectation of receiving a licence unless refused on some ground fairly arising under a merely regulatory scheme and the evidence revealed no factor, other than the perceived desirability of sterilising his proprietary rights, sufficient to justify refusal.

99. I accept that hearsay reports of two other bores in the Red Hill area ceasing to operate due to lack of water may have suggested "a basis for finding" a risk that the available water might not be sufficient to meet future demand, at least during the continuation of drought conditions. If the appellant had owned a large rural property and could have taken ground water from it by using a bore in a different position further away from those that had ceased to operate, this may have been a potentially decisive factor and it may have been encessary to remit to the Tribunal an issue as to whether the suggested point of extraction was appropriate. However, that issue does not arise and the fact that others with rights to ground water under their land may have experienced difficulty in extricating as much as they wanted could offer no justification for a decision to sterilise the appellant's proprietary rights. He had as much right to take ground water from his property as his neighbours had to take water from the bores on their properties.

100. The appellant has sought a licence to take 1.5 megalitres per annum. As previously mentioned, there is evidence to the effect that he had been advised that he could expect to use 1.4 megalitres per annum on the garden he established in 1998. There has been no suggestion that he should exercise his right to take water from some different point on his property and no suggestion that he has ever breached any environmental laws or that he has in the past behaved irresponsibly in relation to the exercise of those rights.

101. Accordingly, this is a case in which the correct application of principle leads, in my opinion, inexorably to the conclusion that the appellant is entitled to the licence sought.

102. Accordingly, it will be ordered that the appeal be allowed, the decision of the respondent and Tribunal be set aside and, in lieu thereof, it be ordered that the appellant's application for the licence be granted.

103. The parties did not address the issue of whether conditions should be imposed and I intend to grant them leave to bring in short minutes of orders concerning this issue and, in default of agreement, leave to have the matter relisted for further directions.

104. I will hear counsel as to costs.

I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.

Associate:

Date: 18 March 2005

Counsel for the appellant: Mr B Meagher

Solicitor for the appellant: Bradley Allen Lawyers

Counsel for the respondent: Mr D Mossop

Solicitor for the respondent: ACT Government Solicitor

Date of hearing: 2, 3 February 2005

Date of judgment: 18 March 2005