Land and Environment Court of New South Wales CITATION : Water Resources Commission v Jackson, Britton and Griffiths [1988] NSWLEC 141 APPLICANT Water Resources Commission FIRST DEFENDANT Bruce Gordon Jackson PARTIES : SECOND DEFENDANT John Richard Britton THIRD DEFENDANT Warwick David Griffiths FILE NUMBER(S) : 50013 of 1985 CORAM: Bignold J KEY ISSUES: :- Water Act 1912 LEGISLATION CITED: Fines And Penalties Act 1901 Water Resources Commission Act 1976 CASES CITED: Fairfield City Council v. Tisonu Pty. Ltd. (1988) DATES OF HEARING: DATE OF JUDGMENT: 10/07/1988 LEGAL REPRESENTATIVES: JUDGMENT: Bignold J.: I publish my reasons for orders, recording convictions and imposing penalties, I pronounced on 21st September, 1988 and 23rd September, 1988 in these proceedings. Each of the three defendants has pleaded guilty to 29 separate charges laid against each defendant for separate offences against s.118 of the Water Act 1912 committed on various occasions during the period 6th February, 1985 to 4th March, 1985. Section 118 relevantly provides:- "Any person who ......... contravenes or fails to comply with or carry out any term, limitation or condition of the license ......... is guilty of an offence and is liable, on conviction -- (a) where the offence was committed by a corporation .................................. (b) where the offence was committed by any other person - to a penalty not exceeding $10,000, and in the case of a continuing offence, to a further penalty not exceeding $1,000 for each day the offence continues, and in addition to the imposition of such a penalty, the license may, by notice published in the Gazette, be cancelled." At the times that the aforesaid offences were committed the defendants were co-licensees in respect of three bores (connecting with sources of sub-surface water) licensed under the provisions of Part V of the aforesaid Act which bores were located on a cotton producing property known as "Whitewoods" owned and managed by the three defendants on a partnership basis. Section 112(1) of the Act forbids inter alia the sinking of a bore unless in pursuance of a license issued under Part V. Section 113(1) provides for the making of applications to the Commission for any new bore and s.115 empowers the Commission to issue licenses "subject to such terms, limitations and conditions as it may deem fit and proper". On 1st July, 1983 the Commission issued 3 licenses in respect of bores located on the property "Whitewoods". The licenses (which were numbered V115378, V115379 and V115380) were issued for a period of 3 years with an option for renewal and in each case the licensee was all three defendants. Each of the licenses was issued subject to a number of specified terms limitations and conditions including the following:- "The maximum volume of water extracted in any period of 12 months commencing 1st July from the bore authorized by this license and licences (there is then reference to 6 numbered licenses (including each of the aforesaid numbered licenses)) shall not exceed a total of 230 megalitres. The water may only be used on Portion 38 Parish of Murra Murra County of Denham. The above property description refers to the whole of the property known as "Whitewoods"." Although the condition is somewhat clumsily expressed it is clear that the relevant condition in each of the licenses intended to impose a maximum total aggregated volume of 230 megalitres per annum to be extracted or drawn from all 3 bores the subject of the aforesaid licenses. (It also appears that the intention in fixing that maximum volume was to bring into account water extracted from the other four specified licensed bores. However there was no evidence concerning these other licenses and it appears that at the times the offences were committed no bores had actually been constructed in respect of those other licenses). The evidence establishes that the limit on the volume of water to be extracted via the aforesaid licensed bores was exceeded on 6th February, 1985 when the meter on each of the bores recorded the following reading -- License V115378 123 megalitres License V115379 160 megalitres License V115380 48 megalitres total 331 megalitres On ten subsequent inspections carried out by inspectors employed by the Commission on 8th February, 14th February, 18th February, 19th February, 20th February, 21st February, 22nd February, 25th February, 27th February and 4th March, 1985 it was apparent from the readings on the water meters attached to the licenced bores that additional water had been extracted from the bores since the date of each previous inspection commencing with the original inspection on 6th February. Since the stipulated maximum volume of water had already been exceeded on the occasion of the original inspection on 6th February, 1985 it is obvious that each subsequent extraction of additional volumes of water also involved an exceeding of that maximum volume stipulated by the relevant condition of each license. The readings recorded on the meters on 4th March, 1985 were -- V115378 246 megalitres V115379 335 megalitres V115380 188 megalitres total 849 megalitres Thus some 600 megalitres of water had been extracted from the licensed bores in excess of the maximum volume allowed by the licenses as stipulated in the aforesaid condition. It was in these circumstances that the Prosecutor laid 29 separate charges against each of the defendants. The apparent extravagance or multiplicity in the charges laid is perhaps explained by virtue of the fact that there were separate licenses for each of the three bores, the fact that the condition imposing the limit on the annual volume of water permitted to be extracted was fixed by reference to all three bores and the fact that there were three licensees for each license. It was presumably to afford some relief against the severity of the consequences of the multiplicity of counts (caused by virtue of there being 3 co-licensees and 3 separate licenses) that the Prosecutor, with the support of Counsel for the Defendants, submitted that for the purpose of determining the appropriate penalty to be imposed in respect of each of the admitted offences, the Court could deem the first committed offences (ie those committed on 6th February) to be the principal offences and as if they were committed by one licensee and the subsequent and additional offences to be continuing offences committed on each occasion by the one licensee. The consequence of this suggested approach was that the three 'principal' offences would each carry the maximum penalty of $10,000 and the 26 subsequent offences would each carry the maximum penalty of $1,000. So regarded the Prosecutor submitted that the final adjustment required by the case would involve apportioning any fines imposed (reflecting the aforesai d approach) among the three defendants. (No basis for apportionment was suggested other than 1/3rd for each of the three defendants). I accept the Prosecutor's submission (supported by Counsel for the Defendants) that in the circumstances of this case it is appropriate in determining the question of penalty to regard the admitted offences somewhat differently from 87 principal offences each carrying the maximum penalty of $10,000. Indeed as I pointed out in the course of argument there is some considerable difficulty in regarding each of the admitted offences as a separate offence. This difficulty arises directly from the necessary combination of the elements of the statutory offence under s.118 "contravenes or fails to comply with ........ any term, limitation or condition of the license" and the express language and effect of the relevant conditions. "The maximum volume of water extracted in any period of 12 months ......... shall not exceed a total of 230 megalitres". The Prosecutor's construction of the condition of the license is that the licensee is bound not to extract in any period of 12 months commencing 1st July more than 230 megalitres of water and that once that ceiling has been reached each and every act of extracting additional water constitutes a separate offence. In the present case the evidence indicates, as I have mentioned, that on 10 occasions subsequent to the original inspection (on 6th February, 1985) inspectors of the Commission inspected the property and read the water meters noting that additional water had been extracted since the immediately previous inspection. Presumably the Prosecutor to be consistent in his submission would have to say that if the Inspectors had visited the property every day in the period 6th February to 4th March, 1985 and if they observed that water had been extracted daily, each extraction would have constituted a separate offence against s.118. Moreover if this were the case not only would a separate offence have been committed on each day but logically a separate offence would be committed with each act of extraction. This would surely be an absurd situation, and one to be properly avoided in accordance with established principles of statutory interpretation. In short I would regard the Prosecutor's construction of the relevant condition of the license as only, if not barely, arguable. However I am severely constrained by the fact that the three defendants who were represented by competent legal advisors have pleaded guilty and have not demurred to the Prosecutor's construction of the relevant condition of the licenses and the elements of the statutory offence. Faced with this situation I have recorded convictions in respect of each of the admitted offences: However I approach the task of determining the appropriate penalty (bearing in mind the Prosecutor's submission in this respect) as if each of the defendants has committed the one principal continuing offence against s.118 in respect of the period 6th February to 4th March, 1985. In this respect I am of the opinion that the conduct of each of the defendants was knowing, calculated and deliberate. From the date of the original inspection on 6th February, 1985 the defendants knew that they had already exceeded their water quota. On 13th February, 1985 one of the defendants (Mr. Griffiths) was handed a circular letter from the Commission to all ground water irrigators in the Lower Namoi expressing the Commission's concern at the prospect of licensees exceeding their quotas and advising that prosecution action would be necessary "to protect the relatively scarce groundwater resources in the Lower Namoi Valley". On the next day Mr. Griffiths informed one of the Commission's Inspectors that he had "been instructed to pump from the bores as long as necessary to complete the crop". In these circumstances it is clear that the defendants conduct must be regarded as a serious, deliberate and aggravated breach of the law. Under s.4B(1) of the Act the "right to the use and flow and control of all subsurface water is vested in the Commission for the benefit of the Crown ........ for the conservation and supply of such water, its more equal distribution and beneficial use, its protection from pollution and for preventing any unlawful interference with or obstruction to such flow". Since 1983 the Commission has operated a scheme involving volumetric allocations for groundwater systems in New South Wales. Although the scientific evidence called indicates that the defendants' conduct in extracting volumes of water in February and March 1985 greatly exceeding their allotted quota has not actually caused significant harm to the subsurface water resources or to other properties in the area which are entitled, by virtue of holding licenses, to share the benefit of the resources, some actual harm has been caused and the defendants' conduct undoubtedly risked more serious and substantial environmental damage if different circumstances had prevailed eg if the adjoining property 'Dundee' which enjoys a much larger water quota had at the same time been fully utilising its water entitlement. In determining the penalty that should be imposed for the admitted offences I take into account in favour of the defendants that they have pleaded guilty, that (almost certainly) they committed the offences solely in order to preserve or enhance their cotton crop, that they were in possession of an expert engineering report that the subsurface water resources probably had a considerably greater capacity than the Commission had assessed for the purposes of allocating quotas, that the defendants have no previous convictions and that there is no suggestion of subsequent breaches of the conditions of their bore licenses which have continued to the present time. In all of the circumstances I consider that each defendant should be fined a sum that would reflect the maximum penalty of $10,000 if their offences were to be regarded as one principal offence. However since each defendant has been separately convicted of each of the 29 offences charged it is necessary to impose a penalty in respect of each of the convictions. Accordingly I impose on each defendant the following penalties -- (i) $2,500 in respect of each conviction for each of the 3 offences referred to in paragraphs (c), (d) and (e) of the Summons; and (ii) $100 in respect of each conviction for each of the 26 offences referred to in paragraphs (i), (j), (k), (o), (p), (q), (u), (v), (w), (aa), (ab), (ac), (ag), (ah), (ak), (al), (am), (aq), (ar), (as), (aw), (ax), (ay), (aac), (aad) and (aae) of the Summons. In respect of the 31 separate offences (all relating to the alleged breaches by each of the defendants of a condition of the licenses requiring notification to the Commission of an intention by the licensees to commence pumping from the licensed bores) referred to in paragraphs (a), (b), (f), (g), (h), (l), (m), (n), (r), (s), (t), (x), (y), (z), (ad), (ae), (af), (ai), (aj), (an), (ao), (ap), (at), (au), (av), (az), (aaa), (aab), (aaf), (aaj) and (aah) of the Summons the Prosecutor offered no evidence and asked that the Court by consent dismiss each of these charges with no order as to costs. Counsel for the defendants supported this submission. I accordingly dismissed each of these charges. The Prosecutor made application under s.5(3) of the Fines and Penalties Act 1901 for a direction from the Court that a moiety of the penalties imposed be paid to the prosecutor. Like the Chief Judge in Fairfield City Council v. Tisonu Pty. Ltd. (unreported 18th May, 1988) I am prepared to assume that I have the power to so direct. However in my opinion no reason justifying such a direction was advanced by the Prosecutor which was at the time of commencing the proceedings a statutory body representing the Crown (s.4(2)(g) of the Water Resources Commission Act 1976 and generally required to pay moneys received by it into the Consolidated Revenue Fund (s.8 ibid). Additionally I note that s.128 of the Water Act 1912 requires all charges payable under Part V of the Act ("Artesian Wells" under which the licenses in this case were issued) into the Consolidated Fund. Accordingly I am of the opinion that this is not a case for any direction being given under s.5(3) of the Fines and Penalties Act 1901. Because of the logistical complexities raised by these prosecutions it may be helpful if I now record in a compendious fashion all of the orders that I have made in these proceedings as follows:- 1. Each of the three named defendants is convicted of the 29 offences charged against him, being the offences referred to in paragraphs (c), (d), (e), (i), (j), (k), (o), (p), (q), (u), (v), (w), (aa), (ab), (ac), (ag), (ah), (ak), (al), (am), (aq), (ar), (as), (aw), (ax), (ay), (aac), (aad) and (aae) of the Summons. 2. In respect of each of the three named defendants I impose the following penalties -- (i) $2,500 in respect of each conviction for each of the 3 offences referred to in paragraphs (c), (d) and (e) of the Summons; and (ii) $100 in respect of each conviction for each of the 26 offences referred to in paragraphs (i), (j), (k), (o), (p), (q), (u), (v), (w), (aa), (ab), (ac), (ag), (ah), (ak), (al), (am), (aq), (ar), (as), (aw), (ax), (ay), (aac), (aad) and (aae) of the Summons. 3. I order each of the three named defendants to pay the aforesaid penalties to the Registrar of this Court within 90 days of 23rd September, 1988. 4. I order the defendants to pay the Prosecutor's costs in the sum of $9,525 such sum to be paid to the Registrar of the Court within 90 days of 23rd September, 1988. 5. I dismiss each of the charges referred to in paragraphs (a), (b), (f), (g), (h), (l), (m), (n), (r), (s), (t), (x), (y), (z), (ad), (ae), (af), (ai), (aj), (an), (ao), (ap), (at), (au), (av), (az), (aaa), (aab), (aaf), (aaj) and (aah) of the Summons. 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.