J.K. Williams Staff Pty Limited v Sydney Water Corporation (No 2) [2021] NSWLEC 72

Land and Environment Court New South Wales

Medium Neutral Citation: J.K. Williams Staff Pty Limited v Sydney Water Corporation (No 2) [2021] NSWLEC 72 Hearing dates: 18 May, 2 June and 2 July 2021 Date of orders: 08 July 2021 Decision date: 08 July 2021 Jurisdiction: Class 1 Before: Preston CJ Decision: See [24] Catchwords: ORDERS – injunctive orders – mandatory order to undertake works to protect from creek erosion – prohibitory order to restrain flows causing erosion – terms of orders Legislation Cited: Conveyancing Act 1919 s 177 Environmental Planning and Assessment Act 1979 ss 75D, 75J Cases Cited: J.K. Williams Staff Pty Limited v Sydney Water Corporation [2021] NSWLEC 23 State of NSW v Burton (2006) Aust Torts Reports 81- 826; [2006] NSWCA 12 Category: Consequential orders Parties: J.K. Williams Staff Pty Limited (Applicant) Sydney Water Corporation (Respondent) Representation: Counsel: Mr W G Muddle SC with Mr H El-Hage (Applicant) Mr I Hemmings SC with Mr S Glascott (Respondent)

Solicitors: Holman Webb (Applicant) Makinson d'Apice (Respondent) File Number(s): 2019/396280 Publication restriction: Nil

Judgment 1. On 18 March 2021, I gave judgment for the plaintiff in these proceedings, J. K. Williams Staff Pty Ltd (Williams), finding that the defendant, Sydney Water Corporation (Sydney Water), had breached the law in two respects: J.K. Williams Staff Pty Limited v Sydney Water Corporation [2021] NSWLEC 23. First, Sydney Water had breached s 75D(2) of the Environmental Planning and Assessment Act 1979 (EPA Act) by carrying out the development of the Western Sydney Recycled Water Initiative Replacement Flows Project (the Project) in breach of condition 1.1 of the approval granted by the Minister for Planning under s 75J of the EPA Act on 20 June 2007 for the carrying out of the Project. I made a declaration to that effect. Second, Sydney Water was liable in negligence for breaching its duty of care in relation to support for land under s 177 of the Conveyancing Act 1919. Sydney Water's discharge of treated effluent from Penrith STP into Boundary Creek was a cause of the erosion of the bank of Boundary Creek within Williams' land. 2. As requested by the parties, after finding Sydney Water had breached the law in these two respects, I adjourned the proceedings to allow the parties the opportunity to address the Court on the orders the Court should make by way of mandatory injunctions to remedy the breaches and prohibitory injunctions to restrain the breaches. The parties have now had that opportunity, culminating with a hearing on 2 July 2021, at which the parties adduced evidence and made submissions on the injunctive orders that should be made. In the end, there was substantial agreement on the terms of the orders. 3. Mandatory injunctive orders should be made requiring Sydney Water, first, to design, apply for and obtain approval for preliminary works to minimise the risk of erosion of the main bank of Boundary Creek in Williams' land until the substantive works have been completed (order 2(a) and (b)) and, secondly, to design, apply for and obtain approval for substantive works to protect the main bank of Boundary Creek in Williams' land from erosion by the Penrith Sewage Treatment Plant (Penrith STP) flows and any future storm event up to the 0.5 EY storm event (order 2(c) and (d) and order 3). The parties disagreed about the time periods within which these steps for obtaining approval and undertaking the preliminary works and substantive works should be completed. 4. A prohibitory injunctive order should be made, if the substantive works are not completed within the time specified by the orders, restraining Sydney Water from discharging from Penrith STP specified flows, although the parties disagreed on how the flows should be specified (order 4). 5. Liberty to restore should be granted in order to allow for the working out of any difficulties with the implementation of the orders (order 6). Finally, Sydney Water should be ordered to pay Williams' costs of the proceedings (order 5). 6. The present task, therefore, is to determine the two points of disagreement, about the timing for the works and the flows from Penrith STP. 7. For the timing of the preliminary works, the parties agreed on a period of three months for Sydney Water to design and apply for approval of the preliminary works, but disagreed on the period of time within which Sydney Water should not only obtain approval but also undertake and complete the preliminary works, Williams arguing for six months and Sydney Water arguing for nine months. 8. I favour the shorter time frame. The purpose of the preliminary works is to hold the status quo – to minimise the risk of further erosion of the main bank of Boundary Creek – pending the completion of the substantive works. As shown by the heavy rain and flooding earlier this year, and the significant erosion thereby caused, Boundary Creek is a volatile hydrological environment. Williams' land remains at high risk of being damaged unless and until works are undertaken to protect it from erosion by flows in Boundary Creek. Setting a shorter rather than a longer period for undertaking the preliminary works to provide some interim protection is therefore preferable. 9. I consider a period of six months is sufficient time for Sydney Water to obtain approval (if approval is needed for Sydney Water to undertake the preliminary works) and to undertake the preliminary works. If, notwithstanding its best efforts, events transpire against Sydney Water being able to complete the preliminary works in that time, it can exercise the liberty to restore the matter in order to seek an extension of time. 10. For the timing of the substantive works, the parties agreed on a period of nine months for Sydney Water to design and apply for approval of the substantive works, but disagreed on the period of time within which Sydney Water should not only obtain approval but also undertake and complete the substantive works, Williams arguing for 23 months and Sydney Water arguing for 30 months. 11. For the substantive works, I favour allowing a longer period of time. The completion of the preliminary works will take some of the urgency out of completing the substantive works, as the preliminary works will reduce the risk of erosion of the main bank. The substantive works are, as the name suggests, more substantive and, in the complex, uncertain and changing hydrological environment of Boundary Creek, will be more difficult to design, obtain approval for, and construct than it will be to do the same for the preliminary works. Allowing more time is prudent. The additional time sought by Sydney Water to complete the substantive works is just over half a year longer than the period proposed by Williams. That extra half year is likely to be needed by Sydney Water, but is unlikely to prejudice Williams once the preliminary works are constructed. 12. Nevertheless, I think there may be an advantage in urging Sydney Water to complete the substantive works earlier rather than wait until the last day of the specified period. To this end, order 2(d) should be worded to say "within preferably 23 months but by no later than 30 months of the date of these orders". This will encourage Sydney Water to complete the substantive works within the time proposed by Williams, but fix as the definite end point the time suggested by Sydney Water as being sufficient to complete the work. 13. I turn to the second point of disagreement about the flows of Penrith STP that Sydney Water should be restrained from discharging if the substantive works are not completed within 30 months of the date of the orders. Williams sought for the Court to prohibit the discharge of any flows from Penrith STP while Sydney Water sought to restrict the prohibition to the flows produced by the Project. 14. Williams' logic was that all flows from Penrith STP have had, and will have, an erosive effect on the main bank, not just the flows from the Project. Williams argues that Sydney Water had the onus at trial to prove that some part of the loss and damage suffered by Williams, associated with the erosion of the main bank of Boundary Creek in Williams' land, was not attributable to its wrongful conduct (the breaches of the EPA Act and s 177 of the Conveyancing Act), but it failed to do so: State of NSW v Burton (2006) Aust Torts Reports 81- 826; [2006] NSWCA 12. Sydney Water is therefore liable for the whole cost of remedying and restraining the loss and damage suffered or to be suffered by Williams. 15. Williams submits that this means that Sydney Water is liable for the whole cost of undertaking the preliminary works and substantive works to remedy the loss and damage already suffered by Williams. But it also means that Sydney Water is liable to be restrained from discharging any flows from Penrith STP that will or are likely to cause loss and damage to Williams in the future. 16. Sydney Water argues that it should be restrained from discharging only the flows from the Project. The breaches of law found by the Court, of the EPA Act and s 177 of the Conveyancing Act, related to these flows from the Project. That is plain for the breach of the EPA Act, as the breach was of a condition of the approval granted under the EPA Act for the carrying out of the Project. It is also evident of the breach of s 177 of the Conveyancing Act, Sydney Water submitted, as the Court's findings that each of the elements of the cause of action in negligence were established, being duty of care, breach of duty of care, factual causation and scope of liability, focused on the flows from the Project, not other flows from Penrith STP. Sydney Water argues, therefore, that only these flows from the Project ought to be prohibited. 17. In practice, this disagreement between the parties on the terms of the prohibitory order should not matter, if Sydney Water complies with the mandatory order to undertake and complete within the specified times the preliminary works and substantive works. The purpose of the prohibitory order is to act as a "stick", a fall back sanction for noncompliance with the mandatory order. Hopefully, this stick never needs to be used as Sydney Water will complete the preliminary works and substantive works in time. If, however, the prohibitory order does need to be engaged, it will still serve as an effective stick, regardless of whether it prohibits the discharge of all flows from Penrith STP or only the flows from the Project. This is because not only do the flows from the Project constitute the majority of flows from Penrith STP, but also there is no other option for Sydney Water for the discharge of flows from the Project other than to discharge the flows into Boundary Creek. 18. As I explained in the earlier judgment, the flows from the Project that discharge into Boundary Creek are made up of tertiary treated effluent from Penrith STP that has been transferred to St Marys STP for further treatment at the Advance Water Treatment Plant (AWTP) and then transferred back to Penrith STP, as well as treated effluent from Quakers Hill STP and St Marys STP that is also treated at the AWTP at St Marys STP and transferred to Penrith STP. Other options for disposal of the highly treated recycled water produced at the AWTP at St Marys STP were considered but were not pursued by Sydney Water, including piping the highly treated recycled water to the Nepean River at Wallacia Bridge. 19. The result is that Sydney Water needs to dispose of the highly treated recycled water produced by the Project by discharging it into Boundary Creek. It has no other means of disposing of it. If Sydney Water is restrained from disposing of the highly treated recycled water produced by the Project, it will need to shut down the Project. Sydney Water cannot receive treated effluent from Penrith, Quakers Hill and St Marys STPs for treatment at the AWTP at St Marys STP because it would have no means of disposing of the resultant highly treated recycled water. This would have such a devastating impact on the treatment of effluent in these catchment areas that Sydney Water could not afford the risk of not being able to operate the Project. This "stick" is sufficiently large to drive Sydney Water to comply with the mandatory orders to complete the preliminary works and substantive works in time. 20. In this circumstance, I do not find it necessary to decide between Williams' and Sydney Water's competing arguments regarding the scope of the flows that should be included in the terms of the mandatory order. It will be sufficient to include only the flows from the Project, not because that is what is required by my earlier judgment, but simply because that will achieve the purpose of the mandatory order of driving compliance with the prohibitory order. 21. There was some minor disagreement between the parties as to the wording of the order should I restrict the flows to those produced by the Project. This disagreement arose as a result of a concern that the flows, which would have been flows from the Project had those flows not been prohibited from being discharged, might be discharged in any event, not as flows from the Project but simply now as flows from Penrith STP. The parties put forward competing wording to address this concern. Williams suggested the wording of "any flows which the RFP stated were intended to be flows which were part of the RFP". Sydney Water suggested the wording of "more treated effluent from the Penrith STP than was discharged before the RFP was commissioned and commenced operation", referencing paragraph [9] of the earlier judgment. 22. I prefer the former wording to the latter, as it will be easier to understand and apply. Sydney Water's wording demands an historical inquiry into what occurred at Penrith STP before the RFP was commissioned and commenced operation, which may be difficult, and also fails to respond to the significant changes in inputs and outputs of Penrith STP since that time. Williams' wording is simpler to understand and apply, capturing any flows that not only were in the past but also would have been in the future flows from the Project, thereby adapting to changes in inputs and outputs of Penrith STP. I would adjust the wording slightly to be "any flows which would have been or were intended to have been flows from the RFP, but for this order". 23. With these rulings, the final orders can now be made.