Land and Environment Court of New South Wales CITATION : Hodgson & Ors v Minister Administering the Water Management Act 2000, Namoi Catchment Management Authority and Director General Department of Natural Resources [2007] NSWLEC 549 FIRST APPLICANT Mark Wentworth Hodgson (and others) SECOND APPLICANT M W Hodgson Investments Pty Ltd THIRD APPLICANT Peter Grace PARTIES : FIRST RESPONDENT Minister Administering the Water Management Act 2000 SECOND RESPONDENT Namoi Catchment Mangement Authority THIRD RESPONDENT Director General Department Natural Resources FILE NUMBER(S) : 41273 of 2007 CORAM: Pain J KEY ISSUES: Practice and Procedure :- conduct of representative action when mediation ordered. Land and Environment Court Act 1979, Pt 5A LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 18 r 6 Supreme Court Rules 1970, Pt 8 r 6, r 13 Water Management Act 2000, s336(1), s336(4) CASES CITED: Carnie and Another v Esanda Finance Corporation Limited (1994-1995) 182 CLR 398; Hodgson, Mark and Anor v Minister Administering the Water Management Act 2000, Namoi Catchment Management Authority and Director General Department of Natural Resources [2007] NSWLEC 478 DATES OF HEARING: 28 August 2007 DATE OF JUDGMENT: 31 August 2007 APPLICANTS Mr P King SOLICITORS Lyons Barnett Kennedy LEGAL REPRESENTATIVES: RESPONDENT Ms M Allars SOLICITORS Crown Solicitors Office JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 30 August 2007 41273 of 2006 Hodgson and Ors v Minister Administering the Water Management Act 2000 and Ors JUDGMENT 1 Her Honour: I am considering a Notice of Motion filed by the Respondents dated 6 August 2007. These are Class 4 proceedings seeking various declarations and orders in relation to decisions made under the Water Management Act 2000, including a challenge to the validity of a water sharing plan. There are three Applicants. The proceedings are also pursued as a representative action. By Court order of Talbot J on 6 August 2007 the proceedings were referred to mediation as provided for by Pt 5A of the Land and Environment Court Act 1979 (the Court Act). Affidavits of the parties' respective solicitors Ms Brown and Mr Kruit were filed and read. Respondents' arguments 2 The Respondents' Notice of Motion seeks various orders concerning the provision of the individual names of those represented, confirmation of the existence of common interest with the First Applicant and the consent of members of the representative group to their representation by the First Applicant as required by s 336(4) of the Water Management Act which provides: Any such proceedings may be brought by a person on the person's own behalf or on behalf of another person (with their consent), or of a body corporate or unincorporate (with the consent of its committee or other controlling body), having like or common interests in those proceedings. 3 Alternatively, similar orders are sought in relation to the representation by one or other of the Applicants in the proceedings. Alternatively, in submissions an order was sought that the proceedings not be pursued as representative proceedings because of the failure of the Applicants to provide the necessary information to satisfy s 336(4). The imminent mediation of the matter before the Honourable Mr Michael McHugh AC QC on 10 and 11 September requires that this essential information be provided now, according to the Respondents, as it is necessary that the proceedings be properly constituted under the Water Management Act which requires that s 336(4) be complied with. The written submissions of the Respondents identify inconsistencies in the affidavits of the Applicants filed to date in terms of who amongst the three applicants is the representative party and as to the identity of those said to be represented. 4 The requirement to provide consent identified in s 336(4) has not been met because there is no evidence provided by the Applicants that any person has consented to be represented by any of the Applicants. Nor have the Applicants provided any evidence that any person has a common interest in the proceedings. The failure to provide this information means that the precondition to jurisdiction of the Court to entertain a representative action has not been met. Applicants' arguments 5 According to the Applicants' counsel there is no need to make any of the orders sought in the Notice of Motion. The First Applicant represents a group of people, being the Water Access Licence Holders in Zone 1 of the Upper Namoi Water Management Area at the date of the water sharing plan the subject of these proceedings, as is clear from the affidavit of Mr Kruit dated 26 July 2007. This was recognised in the decision of Talbot J in Hodgson, Mark and Anor v Minister Administering the Water Management Act 2000, Namoi Catchment Management Authority and Director General Department of Natural Resources [2007] NSWLEC 478 (Hodgson) at [30] and should not be raised again. 6 There are about twenty water access licence holders who are within the representative group. The Applicants' counsel submitted that it is very clear that the persons in the representative group have a common interest as all hold water access licences for the same aquifer and all have had their allocation of water reduced under the water sharing plan made under the Water Management Act challenged in the substantive proceedings. Support for these submissions was found in the affidavit of the First Applicant and by reference to the water sharing plan being challenged. 7 Further there are procedures identified by the mediator and presently being followed which provide for the lodging of claims by the Applicants and those members of the representative group who wish to have their claim for damages considered in the mediation. The affidavit of Mr Kruit, the Applicants' solicitor, dated 28 August 2007 identifies those persons who have so far returned to him a claim form. If the mediation results in a settlement with all those represented these proceedings will be discontinued. 8 There are several causes of action identified in the Points of Claim. Only the cause of action identified in cl 9 and 10 of the Points of Claim relied on s 336(1) of the Water Management Act, being an action to remedy or restrain a breach of the Act. The proceedings are pursued as a representative action under Pt 8 r 13(1) of the Supreme Court Rules 1970. Section 336(4) of the Water Management Act has no relevance. Part 8 r 13(1) does not require that consent be provided and is in the following terms: (1) Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them; 9 The requirements of that rule are met in these proceedings. The proceedings are also in accordance with the observations of the High Court in Carnie and Anor v Esanda Finance Corporation Limited (1994 - 1995) 182 CLR 398. Finding 10 This matter has been referred to mediation under Pt 5A of the Court Act. The mediation process must be conducted adequately in accordance with the Court Act and in accordance with Pt 18 of the Land and Environment Court Rules 1996 (the Court Rules). Part 18 r 6 states: (1) A mediation session must be attended by each party or, by a representative having authority to settle the matter. (2) Other persons may attend a mediation session with the leave of the mediator. 11 Talbot J in Hodgson at [26] – [32] referred to the need for the Applicants to provide clarification about the representative group. He recognised at [33] that further clarification had been provided in relation to the nature of the interest and class of individuals the First Applicant purports to represent. He ordered the matter be referred for mediation. His Honour did not indicate in his judgment that there were outstanding issues suggesting this was not an appropriate course of action where the proceedings were also undertaken in a representative capacity. He directed that the Respondents file a Notice of Motion if they wished to raise further issues about the representative group. 12 The First Applicant is representing the water access licence holders group, as clarified in submissions, and as identified by Talbot J in his judgment. It is also clear that the individuals in the representative group have a common interest with the First Applicant for the reasons identified above in the Applicants' counsel's submissions at par 5. The broad requirements for "common interest" identified in Carnie (Mason CJ, Dean and Dawson JJ at 404) are met. 13 The names and addresses of the individuals in the representative group are set out in the correspondence between the parties attached to the affidavit of Ms Brown, the Respondents' solicitor. The only issue left to be determined is which of those individuals wish to participate in the mediation. Adequate process requires that the persons be identified who wish to participate in, or be represented at, the mediation and by whom. I am informed that the mediator has already discussed with the parties the process to be followed to identify the issues to be considered by him. That process includes the lodging with the Applicants' solicitor of claim forms by those from the representative group. 14 The affidavit of Mr Kruit, the Applicants' solicitor, dated 26 July 2007 states that he has written to all the members of the representative group asking if they wish to file a claim as part of the mediation process, providing a form for them to complete within a specified timeframe. Some have done so, as advised in the affidavit of Mr Kruit dated 28 August 2007. This process ensures that those wishing to participate in the mediation are identified. Obviously only those persons who have lodged a claim will have it considered as part of the mediation process. The process of lodging claims is still continuing but will have to be finalised in time for the mediation in September. 15 Given what has been clarified in relation to the conduct of these proceedings as a representative action, I consider the Respondents' arguments on the Notice of Motion are directed to matters of form rather than substance at this stage of the proceedings. As raised with the parties during submissions, any doubt remaining as to whether the persons completing the claim form are prepared to be represented by the Applicants' solicitors at the mediation and that the Applicants' solicitor has authority to settle the matter as required by Pt 18 r 6, can be overcome by a further document (letter) dealing with these matters being provided to all the members of the group for them to sign. If necessary the Court pleadings can be attached to that document if these are all the matters which are to be mediated. A timetable to achieve this in time for the mediation must be worked out. Provided it is clear to the mediator which parties wish to be represented before him and what is the nature of the claims I see no need to make any of the orders sought by the Respondents. 16 I do not need to finally resolve whether s 336(4) of the Water Management Act and/or Pt 8 r 13 of the Supreme Court Rules apply. Even if only s 336(4) applies, there is no requirement under that section that consent of the represented persons needs to be provided now. It is not necessary or appropriate that as a prerequisite to the participation in the mediation s 336(4) be complied with, in other words that formal consent to the whole proceedings together with written identification of the common interest be provided and that in its absence the mediation cannot proceed as the Respondents submitted. In any event the process being followed for the mediation together with a further document referred to above at par 15 ensures that those wishing to be represented will be identified together with their claim. The authority of the Applicants' solicitor to act for them will also be clear. 17 If Pt 8 r 13 applies, that rule does not require that consent be provided by members of the representative group. As identified in Carnie at 408, the Court needs to be mindful that the interests of those said to be represented are adequately protected in any proceedings under Pt 8 r 13. The process now in train for the mediation together with the additional document confirming consent to act for and settle the mediation is adequate at this stage. The costs of the mediation are borne by the parties only (see s 61F of the Court Act), which cannot include the members of the representative group as they are not parties to the proceedings. I consider the matter can continue as a representative action. 18 Depending on the outcome of the mediation these proceedings may settle and be discontinued, or proceed in whole or part. The procedural issues raised by the arguments in relation to the Respondents' motion may become relevant if the Class 4 proceedings continue in the future. Rather than stand the motion over generally I will dismiss the motion but note that at some time in the future the application of s 336(4) may arise for final determination. 19 I am informed that the Applicants' solicitor has caused a letter to be sent very recently to the individual members of the representative group seeking their agreement to authorise him to appear on their behalf and settle the matter if appropriate. Personal attendance at the mediation is also requested. The Respondents' Notice of Motion is otherwise dismissed. It is appropriate that each party pay its own costs of the motion. Orders 20 The Court makes the following orders: 1. The Respondents' Notice of Motion is dismissed. 2. Each party is to pay its own costs of the motion. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.