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GLENGYLE PROPRIETORS PTY LTD v MINISTER FOR ENVIRONMENT AND CONSERVATION [2009] SASC 376 (11 December 2009)

Last Updated: 8 February 2010

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)

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GLENGYLE PROPRIETORS PTY LTD v MINISTER FOR ENVIRONMENT AND CONSERVATION

 [2009] SASC 376 

Judgment of The Full Court
(The Honourable Justice Duggan, The Honourable Justice Sulan and The Honourable Justice Kourakis)

11 December 2009

ENERGY AND RESOURCES - WATER - WATER MANAGEMENT - WATER MANAGEMENT PLANS

ENERGY AND RESOURCES - WATER - WATER MANAGEMENT - WATER USAGE RIGHTS - WATER ALLOCATION - OTHER CASES

Appeal against a decision of the Environment, Resources and Development Court upholding the Minister’s refusal to grant the appellant’s application for an increase in its water allocation from an unconfined aquifer – pursuant to  s 152  of the  Natural Resources Management Act 2004  a proposed variation of a water allocation endorsed on a licence must be consistent with the relevant Water Allocation Plan (WAP) – the WAP estimated both the sustainable annual extraction from the unconfined aquifer and recorded the total licensed entitlements (based largely on hectares under irrigation) to extract water from it – the WAP estimated the volume of permitted extraction under those licences by applying certain conversion factors – if the Minister applied those conversion factors, the appellant’s application was not inconsistent with the WAP – in the Minister's opinion the conversion factors applied by the WAP underestimated the actual annual extraction and that the water was in fact unavailable – whether the Minister was bound to apply those conversion factors or whether the Minister was correct in adopting conversion factors which he thought were more accurate.

Held: The manifest intention of the  Natural Resources Management Act 2004  is that the discretion of the Minister to allocate water should be controlled by Water Allocation Plans prepared and amended by independent Boards after an extensive consultation process – the WAP should therefore be construed in a way which gives it the administrative efficacy intended by the Act – although no provision of the WAP expressly binds the Minister to use the same formula, the text and context of the WAP provide, by implication, that he was so bound – appeal allowed – matter remitted to ERD Court.

 Natural Resources Management Act, 2004   s 7 ,  s 10 ,  s 12 ,  s 13 ,  s 22 ,  s 25 ,  s 76 ,  s 78 ,  s 79 , s 81,  s 127 ,  s 132 ,  s 146 ,  s 147 ,  s 148 ,  s 151 ,  s 152 ,  s 157 ,  s 158 ,  s 159 , s 160,  s 166 ,  s 202 , Sch 4, cl 54(9), referred to.

GLENGYLE PROPRIETORS PTY LTD v MINISTER FOR ENVIRONMENT AND CONSERVATION
 [2009] SASC 376 

Full Court: Duggan, Sulan and Kourakis JJ

1. DUGGAN J: I agree that the appeal should be allowed. I agree with the reasons prepared by Kourakis J and the orders which he proposes.
   

2. SULAN J: I would allow the appeal and remit the matter to the Environment Court for further hearing. I agree with the reasons of Kourakis J.
   

3. KOURAKIS J: Glengyle Proprietors Pty Ltd (Glengyle) holds a water licence in Zone 8A of the Tatiara Prescribed Wells Area (the Tatiara Wells Area). On 26 June 2008 Glengyle applied for an increase in its water allocation from Zone 8A of the unconfined aquifer of the Tatiara Wells Area. That application was refused on 27 June 2008 on the grounds that to grant the application would be inconsistent with the Water Allocation Plan for the Tatiara Wells Area (the Water Allocation Plan) because there was no water available in Zone 8A for further allocation.
4. At the time of Glengyle’s application,  s 152  of the  Natural Resources Management Act 2004  (the Act) provided that any variation of the water allocation endorsed on the licence “must be consistent with the relevant Water Allocation Plan”. The Water Allocation Plan divided the Tatiara Wells Area into a number of zones and included an estimate of the sustainable annual extraction from each of the zones of the unconfined aquifer, including Zone 8A.
5. The Water Allocation Plan also estimated the annual licensed entitlement to extract water from each of the zones. Almost all of the licensed extraction was taken under irrigation licences which were limited by reference to a specified area of cultivation of a particular crop. The Water Allocation Plan estimated the volume of permitted extraction under those licences by applying conversion factors thought to be appropriate at the time. On the basis of those conversion factors, at the time of Glengyle’s application the difference between the sustainable annual extraction and the licensed extraction was positive. It follows that if the Minister was bound to apply those conversion factors, the Minister wrongly refused Glengyle’s application because water was available to be allocated consistently with the Water Allocation Plan.
6. However, the Minister contends that the conversion factors applied by the Water Allocation Plan underestimate the actual annual extraction and that water is in fact unavailable. The Minister contends that the sustainable extraction volume estimated by the Water Allocation Plan must be accepted but that, in the absence of an express stipulation in the Water Allocation Plan, the Minister must adopt the conversion factors which are now thought to be more accurate.
7. An appeal against the decision of the Minister was dismissed by the Environment, Resources and Development Court (the Environment Court) on 5 June 2009. Appeals against decisions refusing an allocation of water could be brought to the Environment Court pursuant to s 202 of the Act as it then stood.
8. For the reasons I give below, I have concluded that the Minister’s submission should be rejected. My opinion, in summary, is that it is the manifest intention of the Act that the discretion of the Minister to allocate water should be controlled by Water Allocation Plans prepared, and from time to time amended, by independent Boards after an extensive consultative process. Water Allocation Plans should therefore, insofar as their text permits, be construed in a way which gives them the administrative efficacy intended by the Act. The provision of the Water Allocation Plan and in particular its discussion of, and the measures it prescribes for, the allocation of water are all premised on particular conversion factors. Even though no provision of the Water Allocation Plan expressly binds the Minister to use the same formula, the text and context of the Water Allocation Plan provide, by necessary implication, that he was so bound.
   

The Statutory Context

9. The statutory obligation found in s 152 draws attention to the terms of the Water Allocation Plan. The proper construction of that Water Allocation Plan must proceed first from an understanding of the statutory context in which it operates.
10. The objects of the Act relevantly include the protection and sustainable use of natural resources having regard to the value of agriculture to the economy of the State.[1] The functions of the Minister include a responsibility to ensure that appropriate consideration is given to plans made under the Act when natural resources are allocated.[2]
11. The Water Allocation Plan for the Tatiara Wells Area was adopted by the then Minister for Water Resources on 14 October 2001 under the  Water Resources Act 1997  but has continued in force pursuant to cl 54(9) of the fourth schedule to the Act.
12. It is the function of Regional Natural Resource Management (NRM) Boards to prepare Water Allocation Plans or amendments to them.[3] The State is divided into regions by the Governor.[4] Members of Regional NRM Boards are appointed by the Governor having regard to their knowledge and experience after extensive consultation.[5]
13. A Water Allocation Plan must provide a mechanism for determining a consumptive pool for the water resource. Importantly it must also prescribe principles associated with the determination of water access entitlements and for the taking of water in a way which optimises the sustainable use of the water.[6] It is difficult to see how a Water Allocation Plan could satisfy that requirement without stipulating the applicable volumetric conversion rate for licenses issued by reference to irrigation equivalents.
14. Sections 78 and 79 of the Act establish an elaborate consultation process for the making or amendment of a Water Allocation Plan. The Plan is then submitted to the Minister who must in turn consult the Natural Resource Management Council (the Council) and may undertake further consultations. Members of the Council are persons with appropriate knowledge of resource management, experience and skill who have been appointed by the Governor[7] and who have advisory independence from the Minister.[8] The Minister must have regard to submissions (if any) received from members of the public and may then adopt the Plan (or amendment) or refer the Plan (or amendment) back for further consideration.
15. The taking of water is prohibited by  s 127  of the Act unless it is authorised by a licence. Licences which are granted pursuant to s 146 of the Act are endorsed with a water taking allocation. The allocation may be varied in accordance with s 147 of the Act.
16. A water allocation endorsed on a license may be varied by the Minister at any time with the consent of the licensee and in the other circumstances prescribed by s 147. Those circumstances include cases where water allocations are transferred and where it is necessary to ensure consistency with an amendment to a Water Allocation Plan. A license may be surrendered pursuant to s 148, in which case the allocation vests in the Minister.
17. Section 151 provides:

151—Allocation of water
(1) The water allocation, or a component of the water allocation, of a licence may be obtained—
(a) from the Minister; or
(b) from the holder of another licence; or
(c) in the case of a water (taking) allocation, on conversion under section 153 of a water (holding) allocation or part of such an allocation; or
(d) under an Interstate Water Entitlements Transfer Scheme.

18. It follows from s 147, or a combination of ss 147 and 151 of the Act, that the Minister may vary a license by increasing the water allocation endorsed on it. The power of the Minister to do is so regulated by s 152 of the Act which relevantly provides:

152—Basis of decisions as to allocation
(1) The Minister's decision on the grant or variation of a water licence—
(a) as to the water allocation to be endorsed on the licence, must be consistent with the relevant water allocation plan; and
(b) as to the conditions to be attached to the licence, must not be seriously at variance with the relevant water allocation plan,
and the Minister's decisions under both paragraphs (a) and (b) must
(c) be made in the public interest; and
(d) if the licence relates to a water resource within the Murray-Darling Basin, be made after taking into account the terms and requirements of the Agreement approved under the Murray-Darling Basin Act 1993, and any resolution of the Ministerial Council under that Agreement (insofar as they may be relevant); and
(e) be consistent with requirements (if any) prescribed by the regulations.

19. The Act confers on the Minister a discretion to refuse or permit the transfer of water allocations from one licensee to another.[9] The Minister’s decision must be consistent with the Water Allocation Plan.
20. Several provisions of the Act empower the Minister to take special steps where management in accordance with the applicable Water Allocation Plan will endanger the water resource. The powers are generally exercised by proclamation and are therefore not subject to merit reviews by the Environment Court even though a limited form of judicial review by this Court may remain available. The Minister may, for example, restrict or prohibit the taking of water in the case of inadequate supply, or overuse, of water from a watercourse, whether prescribed or not pursuant to s 132 of the Act.
21. Section 166 of the Act confers yet a further power which appears to be calculated to address the very sort of problem which has beset the Tatiara Wells Area. It provides:

166—Reservation of excess water in a water resource
(1) If—
(a) a water allocation plan has been adopted by the Minister in relation to a water resource; and
(b) the water resource includes excess water that is available for allocation; and
(c) the Minister is satisfied that it is necessary or desirable for the proper management of the water of the resource to reserve the whole or part of that excess water either from allocation under any circumstances or for allocation subject to restrictions,
the Minister may, by notice published in the Gazette, reserve the whole or a part of the excess water.

22. Three features of the provisions I have summarised should be noted. First, the Act provides a comprehensive process of independent consultation intended to ensure that Water Allocation Plans optimise the use of watercourses. Secondly, the Minister is bound to exercise his statutory discretion in accordance with the Water Allocation Plans. Thirdly, exceptional powers are provided which allow the Minister, in cases where the water resource is endangered, to override the statutory discretions under which he or she would ordinarily manage the resource.
23. The Tatiara Wells Area, on the basis of the conversion factors implicitly adopted by the Water Allocation Plan, includes excess water that is available for allocation under the Water Allocation Plan. Yet it appears that the Minister is satisfied that it is necessary to reserve the whole of the Water that, according to the Water Allocation Plan, is excess.
24. An exercise of the power conferred by s 166 is, therefore, the obvious remedy.
25. Those three features support the implication I would draw from the Plan itself that the conversion factor it has used should govern the calculation of water availability during the Plan’s continued existence; because the implication strengthens the scheme of administration established by the Act, it gives it administrative efficacy.
    

The Water Allocation Plan

26. Glengyle was entitled to 28 Hectare Irrigation Equivalents prior to making its application. The water was to be used to cultivate potatoes, onions and lucerne. Water licences issued in the south-east of this State have historically been, and continue to be under the Act, issued by reference to “Hectare Irrigation Equivalents” or HaIE’s. I shall refer to the concept as the “irrigation equivalent”. An allocation in those terms limits the licensee to irrigating a certain area of a particular crop. The irrigation equivalent is expressed by reference to an international standard based on the amount of water required to irrigate a hectare of green pasture. Allocations under the Water Allocation Plan for the Tatiara Wells Area were made on the basis that 6.34 megalitres (ML) of water were required to irrigate one hectare of pasture. If the licensee intended to irrigate a crop other than pasture, calculations were made based on a formula which expressed the differential requirement for water between pasture and the other crop. For example, the crop “sub-clover” is thought to require almost half the requirement of pasture and accordingly a licensee with an allocation of 20 HaIE would allow the irrigation of about 36 hectares of sub-clover.
27. According to evidence placed before the Environment Court, investigations undertaken after the Water Allocation Plan was adopted have revised the water needed to sustain the cultivation of one hectare of pasture to 7.6 ML per hectare. Other investigations have measured the water lost in the course of delivery of that water to the pasture by irrigation to be a further 18 per cent of the water taken by the pasture itself. The water loss is caused by evaporation and by seepage of the water into underlying water tables before it is trapped by the root systems of the pasture.
28. If the revised assumptions are applied to the licensed allocations issued in HaIE units, the equivalent volumetric allocation of water for Zone 8A, as at September 2008 is 6,249.37 ML. The total allocation for Zone 8A including a small number of licenses on which a volumetric allocation has been made is 6,721 ML.
29. The Water Allocation Plan established a measure referred to as the Permissible Annual Volume (PAV) for each region of the confined and unconfined aquifer. The PAV is the volume of water that can be sustainably used or assigned from a water source on an annual basis. In calculating the PAV, stock and domestic use is excluded because a water licence is not required for those purposes. The Water Allocation Plan also established a measure referred to as the Volume for Licensed Allocation (VLA). The VLA is the total quantity of water (in megalitres) available for licensed extraction on an annual basis within each management area. A VLA is calculated for each aquifer. The VLA for each management area of the unconfined aquifer is calculated as follows: the PAV less provision for the effect of forestry plantations on annual vertical recharge, stock, domestic and environmental demands, less a further 10 per cent buffer in areas that were not fully allocated (or did not become fully allocated as a result of the buffer) at date of adoption.
30. The PAV for Zone 8A is determined by the Water Allocation Plan to be 7,700 ML based on an annual average vertical recharge of 7,720 ML; the VLA is 6,678 ML. It followed that on the reused conversion factors applied by the Minister, Zone 8A was over allocated and he so determined.
31. A table produced in evidence before the Environment Court calculated on the revised formula identified there to be a total available for allocation of 7,211 ML, a total amount of allocated or otherwise extracted water of 6,731 ML, leaving a 480 ML surplus. The estimate of total licensed extraction was 6,451 ML and for stock use, 280 ML. It is not clear why the estimate of the quantity of water which can be extracted sustainably on an annual basis was increased.
32. It is necessary now to turn to the provisions of the Water Allocation Plan as a whole so that the significance of the quantitive prescriptions of the Water Allocation Plan to which I have already referred can be understood in their proper context. The Water Allocation Plan explains that the unconfined aquifer is hydrologically continuous across the Tatiara Wells Area. It records that there are few examples in the south-east region where the extraction from the unconfined aquifer has impacted across management boundaries. Zone 8A is not one of them. According to the Water Allocation Plan it is also unlikely that any use in the unconfined aquifer would detrimentally affect the confined aquifer.
33. The Tatiara Wells Area is subdivided into seven Management Areas in addition to Zone 8A.
34. The Water Allocation Plan discloses that allocations with respect to the Tatiara Wells Area were generally over allocated. Paragraph 4.2.2 of the Water Allocation Plan reads in part:

A number of management areas are over allocated if all bona fide unlicensed users ... (as well as licensed allocations), are taken into account (refer to table A annexed hereto). Over allocated management areas include Tatiara Shaugh, Wirrega, Willallokka, Cannawigara and Stirling Management Areas, with the remaining two management areas approaching full allocation.

35. Table A provides:

Please Note: The PAV and VLA figures in this table cannot be altered during the life of this Plan. The figures shown in the Total Allocations, Difference and Volume Available for Allocation columns may change during the life of this Plan.

36. Paragraph 4.2.2 of the Water Allocation Plan commences by referring to Table 4.1 which records a total irrigation allocation for each of the Management Zones and also an industrial and recreational allocation. The irrigation allocations are expressed in megalitres but as I have already observed the allocations on the licence is expressed in terms of a hectare irrigation equivalent. Paragraph 4.2.2 continues:

These figures indicate that the overall demand for underground unconfined aquifer water in the Tatiara PWA has exceeded the PAV for the Prescribed Wells Area. However, demand varies between management areas. A number of management areas are over-allocated if all bona fide unlicensed users (stock, domestic, town use and forestry and environmental commitments) as well as licensed allocations, are taken into account (refer to Table A, annexed hereto). Over-allocated management areas include Tatiara, Shaugh, Wirrega, Willallooka, Cannawigara and Stirling management areas, with the remaining two management areas approaching full allocation. The strongest demand in terms of both the level of allocation and estimated use is the Stirling management area. However, underground water usage must be interpreted carefully, due to the method in which use for irrigation purposes is calculated. Historically allocation of water licences for irrigation have been based on area and irrigated crop water use requirement relative to a reference crop. The water usage volume is then estimated from annual seasonal return supplied by water users and correlation with aerial photography. The volume of water used by crops is calculated by converting the area of irrigated crops to megalitres using crop area ratios (CAR’s). The irrigated crop water requirement method does not reflect the actual volume of underground water extracted from the aquifer, and estimation of the volume used by each licensee relies on the veracity of the water user and the irrigated crop requirement method. A suitable method of measuring actual underground water use is required.

37. It will immediately be observed that the discussion in the general introduction to 4.2.2 of the present demand which discussion underpins the provisions later made for water allocation are premised on the conversion factor in fact adopted for the purposes of the Plan.
38. Paragraph 4.2.4 of the Water Allocation Plan reads, in part:

The amount of underground water allocated in an area is based on the HAIE (hectare irrigation equivalence) system, which is in balance with the annual average vertical recharge, but extraction levels are high in Stirling Management Area. Underground water usage is based on Crop Area Ratios (CAR’s) and is not a reflection of the volume of underground water extracted. The CAR’s do not take into account the volume of underground water extracted which is usually a substantial amount more than the CAR, drainage and irrigation losses.

39. Paragraph 4.2.4 of the Water Allocation Plan concludes in the following way:

However, a number of management areas outside the Hundred of Stirling are also over allocated, including Part Zone 7A, the Wirrega Management Area and Willallokka Management Area.

40. Paragraph 4.2.6 of the Water Allocation Plan refers to a tabulation of the confined aquifer in Table 4A. Although the appellant seeks an allocation from the unconfined aquifer, the provision relating to the confined aquifer also illustrates the way in which particular conversion factors permeate the prescriptions of the Water Allocation Plan. Table 4A too is expressed in megalitres and is therefore premised on a particular conversion factor from irrigation equivalents to megalitres. Interestingly, Table 4.5 includes a column headed “Irrigation extraction factor”. The note to the Table explains the figures appearing in that column in this way:

As area based HaIE licenses represent the irrigated crop water requirement, and not the actual volume extracted from the aquifer, a further 20 per cent of HaIE irrigation licenses (converted to a volume using CAR’s) was considered to be extracted from the confined aquifer and recharged to the unconfined aquifer through irrigation root Zone drainage, in the column titled ‘irrigation extraction factor’.

41. Section 6 of the Water Allocation Plan deals with allocation criteria for the unconfined aquifer.
42. The stated objectives of the Water Allocation Plan for the allocation of water entitlements appear from paragraph 6.1 to be to prevent the (over-allocation) of water and to encourage an active water market so that “water allocations are readily available for future economic development”. The introduction to that section records that:

The overall capacity of the water resources in the Tatiara Prescribed Wells Area are considered to be sufficient to meet all existing and reasonably foreseeable future demands for water, considering the capacity of the land, with the exception of the Stirling, Willallokka, part Zone 7A and Wirrega Management Areas which are currently over allocated by large volumes. The Hundred of Cannawigara and part Zone 9A are also over allocated, but the volumes involved are relatively small ...

43. The conclusion that water areas mentioned in that passage were over-allocated is plainly premised on a conversion of the water allocation expressed in the irrigation licences in terms of irrigation equivalents to megalitres so that the difference between the allocations and the VLA can be calculated. That is the calculation shown in Table A. If, as the Minister contends, on a reading of the Water Allocation Plan the total licensed allocations column of Table A must be ignored because the conversion factor is subject to constant change, the statement made in the Water Allocation Plan about the over allocation in some of the Management Areas becomes meaningless. It is meaningless because whether or not the Management Area is over-allocated is not to be determined by the assessment of the Regional NRM Board as the author of the Water Allocation Plan appears to assume but will, instead, depend on a factual assessment of the appropriate conversion factor in the first instance by the Minister, and on appeal from his or her decision, by the Environment Court.
44. The stated objective of the Water Allocation Plan of preventing over-allocation, to which I have earlier referred, must necessarily proceed on assumptions as to the conversion factors between hectare irrigation equivalents and volumetric allocations. In accordance with that objective, paragraph 6.2 of the Water Allocation Plan, which deals with the unconfined aquifer, provides:

Water shall not be allocated from the unconfined aquifer (by water (again holding) or water (again taking) allocation) where the allocation would cause the total amount allocated on all licenses for the relevant Management Area to exceed the volume for licensed allocation (VLA) for the relevant Management Area (see Table A) ...

45. It is on paragraph 6.2 that the Minister primarily relies. The Minister contends that paragraph 6.2 expressly prohibits him from making an allocation that exceeds the VLA prescribed by the Water Allocation Plan but that it contains no prescription which binds him to use the same conversation factor adopted by the Water Allocation Plan.
    

Consideration

46. The relevant question of law at the centre of the controversy in this matter is whether, in the absence of any express reference to the allocation formula that should be adopted by the Minister, there is an implication that the Minister is bound by the conversion factors on which the provisions of the Water Allocation Plan are premised. The question raised by s 158 of the Act is not whether the Minister or the Environment Court takes the view that the water resources of the Tatiara Wells Area would be better managed by reviewing the accuracy of the conversion rate for the purposes of every application for a changed water allocation under the licence. It can be accepted that a conversion factor which is supported by the best and most recent evidence is likely to optimise the use of the region’s water resources. However, that consideration must be balanced by the equally important objective of the Act and the Water Allocation Plan which is to provide a transparent process for, and a reasonable level of certainty in, the distribution of an important public resource. If the Minister’s contention were to be accepted, all of the provisions of the Water Allocation Plan which provide for the further allocation of available water and for the transfer of allocations between regions would be rendered radically uncertain. On the other hand, if the conversion factor on which the Water Allocation Plan is premised must by implication govern ministerial decisions as to the grant of further, or transfer of existing, water allocation puts the resource at risk, then there are special statutory measures available to the Minister to deal with them.
47. The effect of the Minister’s contention can be illustrated by reference to paragraph 6.2.3 of the Water Allocation Plan, which allows for an allocation of water to be made to an unlicensed pre-existing user of water “[w]here water remains available or becomes available for allocation within a Management Area”. The volume of water reserved for unlicensed pre-existing users was limited to 200 ML and was only available to persons who applied shortly after the adoption of the Water Allocation Plan. Those provisions of the Water Allocation Plan are therefore not of current significance. However, it remains of importance in construing the Water Allocation Plan. In those regions where water was shown by Table A to be available on the publication of the Plan an unlicensed pre-existing user would reasonably expect to be entitled to an allocation on making an application within the time prescribed by paragraph 6.2.3. If the availability of water for pre-existing users pursuant to paragraph 6.2.3 were to be determined in accordance with a conversion factor selected by the Minister, pre-existing users making their application in accordance with the Water Allocation Plan would not know whether or not they would receive an allocation, notwithstanding the expectation engendered by Table A, until the Minister had made the determination. If the Minister were to adopt a different conversion factor than the one on which the Water Allocation Plan was premised and to refuse an allocation because no water was available, an applicant could of course challenge that decision, on the merits, in the Environment Court. Whether or not an allocation would be made by the Environment Court would in turn depend on the evidence led in that matter and the resolution of disputed questions of fact made by the Environment Court Judge. In those circumstances, an applicant for an allocation pursuant to paragraph 6.2.3 who persuaded, on the evidence he or she called, the Environment Court Judge that water was available would receive an allocation; another applicant on different evidence before a different Judge may fail to do so.
48. The Minister’s contention will have a similar effect on other provisions of the Water Allocation Plan. Paragraph 6.2.4 prescribes a procedure for allocating “unallocated water” in the Tatiara Wells Area. The process is a monthly one. Paragraph 6.2.4 envisages that the water available for allocation will vary depending on the surrender of licenses in the preceding months. Paragraph 6.2.4 then establishes a system for the allocation of the water which has become available.
49. Paragraph 7 of the Water Allocation Plan is yet another provision which would be left to operate on factual decisions of the Minister or the Environment Court made on an ad hoc basis. It deals with the transfer of water allocations from the unconfined aquifer. Paragraph 7.14(g) limits the transfer of water taking allocations into an adjacent Management Area where the transfer would cause the total allocations in the receiving Management Area to exceed 110 per cent of the volume for licensed allocations. Again on the basis of the Water Allocation Plan, a licensee would reasonably expect that that provision would not preclude transfer if calculations based on the formula obviously assumed by the Water Allocation Plan showed a balance between the VLA and the total licensed allocations.
50. It can be seen then that the Minister’s contention will infect the Water Allocation Plan with a high degree of uncertainty and, in effect, leave management decisions about the amount of water available for allocation to the Minister and the Environment Court and not to the Natural Resource Management and Water Management Boards charged with the responsibility of preparing, and amending, Water Allocation Plans under the Act.
51. It may be accepted that on the evidence the conversion factor used for the purposes of the Water Allocation Plan is conservative and is likely to understate the extent of allocation. However, that statement can only be made on the evidence presented in the Environment Court in this matter. Different evidence might be presented in another matter. In another case, scientific opinion relied on by the Minister might be shown to be mistaken or at least exaggerated. In some Management Areas, a precise factual determination of the amount of water allocated in terms of HaIE’s might need to be made to determine whether or not there is any water available for allocation. Equally, evidence in a particular case might descend into the detail of the appropriate crop area ratio for crops other than pasture. It might, for example, be argued that the water requirement for sub-clovers in the south-east is not as great as that that was previously assumed and that therefore the total licensed allocation is overstated.
52. It would in my view be the antithesis of sound management of the public resource if decisions on applications of the sort that I have mentioned would depend on success in litigation, which is necessarily based on the evidence led in the particular litigation, about a concept as fundamental to a Water Management Plan as the total volume of water allocated under it.
53. A primary purpose of the Water Allocation Plan is to prescribe the principles with which allocations of water must be consistent. If the Water Allocation Plan is construed as making no provision for the conversion rate to be adopted for the licences that allocate almost all of the available water by reference to irrigation equivalents, that purpose will be frustrated. In that context, if the reasonable bystander were to be asked whether the conversion factors on which the Water Allocation Plan was premised were intended to bind the Minister, there is but one answer that can be imagined. To adopt another concept from the area of contract law, the term which Glengyle contends should be implied is necessary to ensure the administrative efficacy of the Water Allocation Plan.
54. The evidence in this case discloses that an amendment to the Water Allocation Plan is being prepared. The amendment is likely to adopt the revised conversion factors used by the Minister. On the other side of the equation, it may also revise the VLA upwards. However, unless and until the amendment is made, or the special statutory powers to which I have referred are invoked, the Minister’s decision must be made consistently with the existing Water Allocation Plan including the conversion factors on which it is premised.
55. I would allow the appeal, set aside the orders of the Environment Court and remit the matter to the Environment Court for further hearing conformably with these reasons.

[1]  Natural Resources Management Act 2004   s 7. 

[2]  Natural Resources Management Act 2004   s 10. 

[3]  Natural Resources Management Act 2004   ss 76 ,  81 .

[4]  Natural Resources Management Act 2004   s 22. 

[5]  Natural Resources Management Act 2004   s 25. 

[6]  Natural Resources Management Act 2004   s 76(4)(ab) , (b).

[7]  Natural Resources Management Act 2004   s 13. 

[8]  Natural Resources Management Act 2004   s 12. 

[9]  Natural Resources Management Act 2004   ss 157 - 160 .