Harvey & Anor v Minister Administering the Water Management Act 2000 [2009] HCATrans 178 (31 July 2009)

Last Updated: 6 August 2009

[2009] HCATrans 178

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S13 of 2009

B e t w e e n -

ADRIAN DAVID HARVEY

First Applicant

MARGARET ELIZABETH HARVEY

Second Applicant

and

MINISTER ADMINISTERING THE WATER MANAGEMENT ACT 2000

Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 31 JULY 2009, AT 10.43 AM

Copyright in the High Court of Australia

MR S.E.J. PRINCE: If the Court pleases, I appear with my learned friend, MR G.J.D. DEL VILLAR, for the applicants in that matter. (instructed by MacKenzie and Vardanega Lawyers)

MR N.C. HUTLEY, SC: May it please your Honours, I appear with my learned friend, MR M.A. IZZO for the respondent. (instructed by Crown Solicitors (NSW))

GUMMOW J: Yes, Mr Prince.

MR PRINCE: Your Honours, can I go straight to the errors in the Court of Appeal decision? First, can I tell your Honours that there were two streams of reasons in the Court of Appeal? The first was his Honour the Chief Justice, with whom the President agreed, and then separately his Honour Justice Sackville, who would have decided the matter on discretion. If I can turn to the reasons of the Chief Justice at page 159, paragraph 88, there is a finding that:

The appellants were given the opportunity to make submissions as to whether their circumstances were relevantly ‘anomalous’ or ‘special’. I proceed on the assumption (to be further considered below with respect to breach) that they had no opportunity of addressing whether they satisfied the “criterion”. Nevertheless, they had an opportunity of identifying the basis of any grievance they had.

The essence of the error there is that the content of procedural fairness could be limited to simply knowing that a process was under way rather than knowing the criterion which was to be applied in determining that process.

GUMMOW J: Now, what is the statutory scheme? We have to look at that first to work out what the content is of the requirements of procedural fairness, if any.

MR PRINCE: Yes, your Honours. The Act is silent on - - -

GUMMOW J: This was the making of an amendment order, was it not?

MR PRINCE: Yes. It is an amendment order to a water sharing plan.

GUMMOW J: Under section 45(1).

MR PRINCE: That is right, and on the basis of public interest.

GUMMOW J: The statute says:

The Minister may at any time, by order published in the Gazette, amend a management plan:

(a) if satisfied it is in the public interest to do so -

MR PRINCE: That is right. There is no dispute that that criterion is broad. The question here is whether or not in the circumstances of the manner in which the power was exercised a duty to record procedural fairness was thereby assumed.

GUMMOW J: To whom?

MR PRINCE: To identified classes of licence holders who would be adversely affected by the decision. In the present case what happened was the amendment was to replace 48 per cent across the board cuts to entitlements with what was called a history of extraction formula. The department identified about 25 per cent of licence holders who would be adversely affected by this. Under the history of extraction formula the other 75 per cent would do better, or not worse, than their existing entitlements. So there was an identified class - - -

GUMMOW J: What are the numbers? When you say 45 per cent, what does that represent, how many?

MR PRINCE: I am sorry, it is 48 per cent cut to the entitlements, your Honour. About 25 per cent of the licence holders would be - - -

GUMMOW J: How many licence holders are we talking about?

MR PRINCE: There are 176 licence holders in total. So it would have been in the range of 30 or so licence holders who would be adversely affected. The department worked out mathematically who would be adversely affected, and they were the subject of a schedule which was then provided to a Regional Ground Water Verification Committee who then went through each of those cases and considered them against the special circumstances criterion. The timing is important because - - -

GUMMOW J: If things had proceeded as you say they should proceed, how would they have proceeded?

MR PRINCE: Once the special circumstances criteria was determined and before the Regional Ground Water Verification Committee met to make its decision it would have told the affected licence holders what the criterion was and invited them to make a submission about it. That is all we wanted.

HAYNE J: A submission about what, satisfaction of the criterion or the adoption of a different criterion?

MR PRINCE: No, satisfaction of a criterion. It is accepted that that was at a broader policy level. Once that was determined and the rules were set by the Minister as he was entitled to do, the question of the application of those rules to individual circumstances, which necessarily takes into account individual circumstances, plans, intentions and the like, the criterion really could not be addressed unless it was known because there was a specific period in which development had to be undertaken on the assumption of 52 per cent cuts. So unless one happened to guess what the criterion was, one would never think really of addressing that very particular criterion.

The more general issues which were addressed right at the outset of the process which led to the creation of the special circumstances – what was called an appeal or review by the Regional Ground Water Verification Committee – was a different stage. Once the criteria were set in around April 2006 it would have been very easy for those people who had been identified to be notified of the criteria to be applied. In fact, the main submission of the Harveys came after the criterion had been identified, immediately before the Ground Water Verification Committee met. The catchment authority sent a man around to their property to tell them that they should apply for the special circumstances, but he did not tell them what the criteria was, and there is no indication that there was ever any intention by the Minister or those working for him to reveal the criterion to anyone.

GUMMOW J: What do you say about paragraph 15 on page 203 of your opponent’s submissions – in polite terms so that there is an air of unreality in your submission?

MR PRINCE: No, your Honour

GUMMOW J: In terms of public administration.

MR PRINCE: Procedural fairness can be seen by administrators as a burden but in truth it is an aid to good decision-making. It would have been so easy to be fair in this case because all that needed to happen was that the 30-odd people who had been identified as being adversely affected by the history of extraction mathematical formula could have been told before the committee met what the criteria was and asked to put in a form. The evidence of that as to the practicality of taking such a step is that in respect of the Turners, for example, who are another adversely affected group of people, there was evidence that they had been written to by the committee and invited to make submissions addressing the criteria.

So there is nothing to indicate that it would have been difficult or impossible to do that. In my submission, as a matter of common sense it simply would not be. If they went to the trouble to send a man around to tell them to put in a submission they could easily have simply said, well, this is what you need to address. The criterion was very plain, very straightforward. It was only a paragraph. It could have been easily distributed, they had all the addresses.

That is my submission as to whether or not it would be burdensome. I know that there were six other water sharing plans which were being dealt with at the same time. I do not know what the numbers were in terms of the identified adversely affected people in those areas, but there was no evidence of it below, no evidence of impracticability in any concrete way other than the assertion.

HAYNE J: Can I just understand better than I presently do the statutory base? Section 45 is engaged. Are any of the processes described in Division 8, sections 35 and following, engaged in respect of the step that is contemplated by section 45?

MR PRINCE: No, not when the power is being exercised directly by the Minister as it is. There are two ways in which the matter can progress. One is by way of some committee structure which is set up under the earlier provisions of the Act. The other is directly by the Minister. For example, it is a little like the bifurcated approach in section 501 of the Migration Act in that there is a process which can be engaged in directly by the Minister and one which does not attract procedural fairness. What you do not see in this Act is any exclusion or words of plain intendment which would exclude procedural fairness where very valuable and scarce property rights are being adversely affected, and it is plain that they are adversely affected, and they knew that they would be adversely affected.

GUMMOW J: You say “property rights”. That is true in a sense, but whatever the rights are, are subject to this legislation from time to time.

MR PRINCE: That is true, your Honours, but rather than use the term “property rights” which I suppose has its own problems - - -

GUMMOW J: In this country common law notions of rights to waters have long since been displaced by statutory schemes.

MR PRINCE: Yes.

GUMMOW J: Not surprisingly, really, given the scarcity of the resource.

MR PRINCE: Indeed, your Honour. It is recognised that there obviously needs to be regulation in this area but, in a sense, the greater the importance of a regulation the greater the importance of protecting the individual. The economic rights involved here are devastating. The effect on the Harveys is in the territory of the effect on refugees of being dealt with and the like.

HAYNE J: It is profound. I would work on the assumption it is profound.

MR PRINCE: Yes. So there is no reason why procedural fairness would not apply, there are no words of plain necessary intendment which would displace the normal presumption that where a person will be directly and identifiably adversely affected by an Act, that they should be accorded some degree of procedural fairness. The Court of Appeal assumed it but did not find that there would be a duty, but rather the Court of Appeal effectively reduced the duty to zero by simply requiring that the applicants be notified of an amorphous process which started before the ground water verification appeals process was even formulated without any need for any notification of what the criteria would be.

As to the question of duty, your Honours, and the content, there are references to O’Shea and the other cases in my submissions which I will not trouble your Honours with. The next point, I suppose, is dealing with my learned friend’s submissions about there having been a finding of no breach in any event. That brings me to the second error, your Honours, which appears at page 166, paragraph 116. There was a ground water verification process, a committee which was set up which had three members. It went through its process and concluded, I think, in about June 2006. There was then a process by which the detailed reports in respect of successful applicants for special circumstances were put to the Minister in a schedule. It appears that then there was a schedule indicating who was not successful, but no indication really of the reasons.

At the appeal the Minister pointed to an internal memo which sent the material up to the Minister and had considered responses to the draft plan which had been put on display, and to make the submission that the Harveys had in fact been accorded procedural fairness because of a submission made in September was thereby taken into account. That is to say that it is said there was some process beyond the Ground Water Regional Verification Committee that occurred whereby the matters were taken into account. Quite apart from the issues about that not having been raised at first instance, which your Honours will have seen in my written outline of submissions, could I ask your Honours to just go to page 96, paragraph 232, which is in the reasons of her Honour Justice Jagot at first instance, line 45:

As the respondent submitted, the Minister simply adopted the recommendations made.

That is, the recommendations made by the committee. There was not any issue below of any independent separate consideration by the Minister of the Harvey’s circumstances. By 4 September 2006 it seems that - - -

GUMMOW J: You seek a declaration that the amended order was ultra vires, full stop, do you not?

MR PRINCE: Yes. In my submission, that is what the consequence has to be. The political ramifications of that are a matter for others, and questions of discretion, in my submission, would be better dealt with at a full hearing, but in my submission, the declaration of a plan as invalid is not necessarily the end of the world, the Minister can respond to it and deal with it according to law. Unless there is anything further I can assist your Honours with.

GUMMOW J: Yes, Mr Hutley.

MR HUTLEY: Just to contextualise the debate in terms of the statutory regime, the statutory regime provides for the preparation and amendment of plans by two essentially separate procedures. One where the Minister is involved, essentially when the Minister forms an opinion that it is in the public interest that he or she so act, and that with respect to the creation of plans is to be found in section 50, with respect to the making of plans, what is called the Minister’s plan, and with respect to the amendment of plans, that is section 45 to which your Honours have been taken.

With respect to plans where the Minister is not involved, essentially the plans are through the preparation and development by committees which are established under the relevant part of the Act, and as your Honour Justice Hayne observed, this is dealt with in extenso in Part 3 from section 15 onwards. Amendment of those plans – and they have detailed provisions with respect to consultations, notifications and the like. I will not take your Honours through the detail of it, they are summarised particularly in the judgment at first instance. Amendment of those plans is dealt with by section 42 of the Act.

Section 42 of the Act provides that with respect to amendments of those plans, the procedure which is contemplated by – for the making of the plans is mutatis mutandis to apply. So in other words, the scheme against which this is to be assessed both as to existence and content shows that marked distinction, and at first instance we submitted and were successful in her Honour Justice Jagot concluding that there was no duty to afford procedural fairness. In the Court of Appeal the court was prepared to assume without deciding that there was a duty to afford procedural fairness, and the issue then arose as to what, if any, content there was, and secondly, if there was a content, was there any infringement.

The first point to note is – and it is setting out as we see the hurdles which confront our learned friends to persuade your Honours to grant special leave – assume for a moment that there was a criterion, as they assert, against which applications for consideration of special circumstance concessions in respect of water rights were to be determined. The applicant, as has been found by the Court, was in fact given an opportunity to address that very criterion, and did so. Now, that was the issue as to the letter which was written directly to the Minister. Whilst it may be accepted that the issue was raised in point of fact for the first time in the Court of Appeal, the Court of Appeal applied conventional principles to determining whether it would deal with the matter.

The suggestion in our learned friend’s written submissions that further evidence would have been adduced or a different error of law advanced are really of recent invention. The carriage of this point in the Court of Appeal was taken by Mr Coles who acted for the Tubbo interests, and he addressed the point at supplementary appeal book page 135, line 20 and following, and can I take your Honours to that?

GUMMOW J: What is the point of this, Mr Hutley?

MR HUTLEY: The point of it is to say, your Honour, there has been a finding of fact that the appellants were given an opportunity by the Minister to address the very criterion which they say they were not given an opportunity to address. They addressed it, it has been found their address was considered and it simply was not accepted. If that be right, in point of fact, we submit, there simply is no reasonable prospects of success of this appeal, putting their point at its highest.

As we understand it, it is now put, in effect, that it was akin to Suttor v Gundowda, that is, we would have adduced further evidence, but Mr Coles, who bore the carriage of this in the Court of Appeal, did not put it on that basis at all, he merely – and if one goes to, I will not take your Honours to it, supplementary appeal book, page 135, line 20 and following – to say that his opposition to dealing with this point was somewhat tepid is really almost in the realms of overstatement. He notes the fact that it has not been taken at first instance, but does not suggest that - - -

GUMMOW J: Mr Coles, as you and I know, is a very cunning advocate.

MR HUTLEY: Quite, and if he thought there was anything to do to stop me in my tracks, he would have availed himself of it. He did not, and in fact, my learned friend, Mr Prince, then went on at page 143, line 21 of the supplementary appeal book, at length for a number of pages, addressing the point in point of fact, that is, disputing in point of fact whether that opportunity – the letter which was written had been considered by the Minister. He lost that, and, your Honours, that we submit, renders this no matter what one thinks of the other issues as a wholly inappropriate vehicle for any consideration of any point of significance. It went off on a point of fact.

There was no point of principle concerning how the Court of Appeal dealt with the matter, it having in effect been addressed, almost conceded, that the Court could deal with it, or certainly not put forward as a Suttor v Gundowda point. That is the first point. Now assuming then one were to overcome that particular difficulty, then the question in the case would be determined as another question of fact as to whether in fact, in truth, there was a criterion at all. The Court of Appeal at application book page 160, paragraphs 91 and 92, agreed with the conclusion that was arrived at by her Honour the trial judge which is set out at paragraph 91. It says:

The respondent sought to uphold her Honour’s decision on the basis that, even if there was a duty of a relevant kind, there had been no breach. The respondent’s case in this respect was based on the proposition that each licence holder was given the opportunity to put its case for “anomalies” or “special circumstances”. The so-called “criterion” did not exist at the beginning of the process. As a result of considering the submissions a “common characteristic” emerged amongst the licence holders which the relevant committees decided should be accepted . . . This was the basis upon which her Honour held that there was no breach . . . I agree with her Honour’s judgment in this respect.

In fact, what they found is rather than, in effect, characterising as a criterion, what happened, and what continued to happen throughout the process, is that every licence holder in the area, not the limited class that my learned friend suggested, was given the opportunity to advance special circumstances. They did, many availed themselves of that opportunity, or a number did, I cannot recall the precise number that did, and I am not sure it is reflected in the judgment. Many and various bases were put forward. At a certain point in the process there was observed that some of those applications had a common characteristic. That common characteristic our friends treat as the criterion.

Thereafter, it was not as if the further consideration was limited to that criterion as was found by the Court, or the committee went on to

consider all circumstances, but those which were ultimately accepted, in fact, shared that common characteristic. We say in point of fact, as the Court was right to find, there was no criterion in the sense of a binding discrimen for success or failure. All that happened is, as part of the process, successful applicants bore a resemblance to one another, and on that basis we would say, in point of fact, the application would fail.

Thirdly we say, even if one passes by all those reasons for refusal of grant, at the end of the day, what occurred here was that the court in determining the content of any duty to afford natural justice applied the conventional principles which have been set down in this Court and have applied time out of number, which is set out at appeal book page 153, paragraph 63 and following, and nothing which has been addressed by our learned friends has suggested that there is any novel point of principle in determining the content of a duty of care in a particular regime. That is all we wish to submit.

MR PRINCE: Thank you, your Honours. Firstly, your Honours, as to the statutory scheme, yes, there is a Division 8 and it does set out a range of steps which can be taken in circumstances other than a ministerial plan, but in my submission, the fact that that does not apply, there is no codification of the steps that need to be taken when the power in section 45(1)(a) is to be used rather tills towards the common law implying the common law rules of procedural fairness at large and unrestricted. That is supported, in my submission, by section 47 of the Act which allows for judicial review, and does not draw any distinction or impose any limitation depending on the nature of a decision being made, or whether or not a decision was being made by the Minister or by one of the committees under Division 8.

In terms of the class, the criterion applied to a subset of the class. The class was for people who were adversely affected by the history of extraction formula, so that people who were worse off and may have present entitlements, and that was about 25 per cent of licence holders, were in that group of people who would be prejudiced by the history of extraction formula. Within that group the criterion applied so that for a very specific time period and a very specific requirement of reliance on the old plan, they would be given special circumstances. So that not everybody within this Regional Ground Water Verification Committee process would, by definition, be eligible for some amorphous grant of special circumstances, so there would be utility in notifying people affected of the criterion.

In terms of the conclusion by her Honour below, her Honour Justice Jagot, that there was no breach; that, of course, was dependent on her Honour’s definition of the scope of the duty, namely, so long as

her Honour did not find that the duty required notification of the criteria which would be applied then, of course, her Honour would find that there was no breach and that was the basis her Honour did so. In respect of the conduct of the hearing in the Court of Appeal, it is true that my learned leader in the Tubbo matter, Mr Coles, who made the point at page 135 – although on a proper reading of it I do not see much more that he could have said – the way the matter worked was that I was Mr Coles’s junior in Tubbo and I was with Mr del Villar in Harvey, where particular factual situations diverged I would simply make additional submissions rather than repeating Mr Coles’s submissions.

GUMMOW J: The jurisdiction in this case of the primary judge, was that attracted by section 47?

MR PRINCE: It was, your Honour.

GUMMOW J: What is the significance of subsections (5) and (7) of that section?

MR PRINCE: Of 47, your Honour?

GUMMOW J: Yes. It talks about natural justice in some detail.

MR PRINCE: Yes, “(procedural fairness)”. Your Honours, it is said that subsection (7), I suppose, neutralises subsection (6), so that one cannot simply rely on subsection (6) in order to confer an obligation to a court procedural fairness in all circumstances, but we do not rely on subsection (6) to do that. The existence of judicial review and the absence of any exclusion or words of necessary intendment to exclude common law procedural fairness is enough, we say, to survive and to - - -

GUMMOW J: Is there any debate about section 47?

MR PRINCE: There was some, your Honours, but in my recollection it proceeded on the lines that I have just put to your Honours.

MR HUTLEY: Your Honour, I think it is fair to say some of the sort of twists and turns of section 47 were brought about by a concern about jurisdiction of the Land and Environment Court to deal with the natural justice question – it is that old chestnut as to whether it is a common law or statutory principle applied – which had arisen in an earlier decision in the Court of Appeal. So the structure of 47 was driven to ensure that there would be no impediment to the Land and Environment Court dealing with any question which might arise and brought about by its jurisdiction being wholly statutory, and it was dealt with in part in paragraphs 38 and 39 at page 145.

GUMMOW J: Page 145?

MR HUTLEY: Yes, in the judgment of the Chief Justice.

GUMMOW J: Yes, thank you. We will take a short adjournment.

AT 11.15 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.23 AM:

GUMMOW J: At first instance it was held in the New South Wales Land and Environment Court that on an exercise in the power given the Minister by paragraph (a) of section 45(1) of the Water Management Act 2000 (NSW) to amend a water management plan if the Minister be satisfied that it be in the public interest to do so, the Minister was not obliged to give the present applicants an opportunity to be heard against the proposed amendment.

In the New South Wales Court of Appeal it was assumed, but not decided, that the Minister was obliged to give the applicants procedural fairness and it was then found that the Minister had done so. It is not necessary for the purposes of considering the present application for special leave to determine whether the assumption made by the Court of Appeal was correct.

An appeal to this Court against the orders made by the Court of Appeal would enjoy insufficient prospects of success to warrant a grant of special leave.

Special leave is refused with costs.

AT 11.24 AM THE MATTER WAS CONCLUDED