This decision of the Victorian Civil and Administrative Tribunal (VCAT) relates to two applications for groundwater extraction near Bairnsdale in Victoria, under the Water Act 1989. The water was to be used for agriculture but the applications were refused on grounds that approving additional water licences could potentially adversely impact down gradient supplies.

A lack of evidence regarding the long-term impacts of groundwater extraction made Southern Rural Water take a cautious approach in refusing to grant the licences.

The applicants appealed to VCAT. VCAT affirmed the decision of Southern Rural Water to deny the licences for groundwater extraction. Accepting that there was an:

as yet unquantifiable risk to the long term sustainability of the aquifer system …

On the 18th of May, the VCAT refused applications from both Mr Cox and Mr Kerton who had made claims under section 51 of the Water Act 1989 (Vic) for licences to take and use groundwater for their agricultural enterprises. These enterprises included the irrigation of vegetable crops using water drawn from the Mitchell River.

The findings of a hydrogeological study revealing uncertainty surrounding the Lindenow groundwater system was relied on by SRW to reach the conclusion that further licence allocation would be dangerous in the given basin. The court asked two fundamental questions: whether the downward trends of decreasing groundwater availability presented an “unacceptable risk” to groundwater users under s 40(1)(b) of the Water Act 1989 (VIC); and if answered in the affirmative, “is it appropriate” to grant the two applications the extraction volumes they sought.

SRW's cautious approach was supported by the VCAT. It was held that as further groundwater extraction could adversely impact down gradient supplies, and as the system was potentially already over-allocated and uncertainty existed in regards to the basin, caution was necessary.

First, the applicants asserted that by failing to approve their applications, SRW was demonstrating a lack of consistency between the decision to refuse their applications and the decision to allow ‘emergency’ groundwater extraction by East Gippsland Water (EGW) over the summer of 2006/07.

However, this argument was rejected by the VCAT. It was held that the VCAT could not consider the merits of the decision to permit EGW access to an emergency supply of water but simultaneously refuse allocation licences to others. While the members expressed their sympathy for such harsh environmental conditions, the emergency faced by EGW was deemed a ‘one-off’ event and administratively difficult to regulate or enforce.

Second, the applicants criticised the hydrogeological study relied upon by SRW. They argued that it was not the case that only a mere tentative conceptual understanding of the Lindenow area could be made and that the use of groundwater in the area would not negatively impact the sustainability of groundwater use in down gradient areas. However, the VCAT dismissed this approach and instead adopted that of Mr Flynn (in-house expert hydrogeologist for SRW). It was emphasised that this conservative approach which encourages environmental sustainability should be supported, particularly as it adopts the ‘precautionary principle’ enunciated within the State Environmental Protection Policy (Groundwaters of Victoria) and complements Victoria’s wider legislative context.

The VCAT acknowledged that a balance had to be struck between any hydrogeological uncertainty and the legislative provisions of s40(1)(b)-(m) of the Water Act 1999 (Vic). These sections stipulate factors that must be considered in the granting of a licence. It was held that while it is certainly not true that each factor had to be satisfied, the:

grant of a licence must be unlikely in circumstances where a consideration, or several considerations, are judged to be both relevant and important

One of these factors may be long-term water sustainability.

It was ultimately held that a cautious approach by SRW was necessary because of the uncertainty surrounding the groundwater basin in question. In refusing to grant the applicants' allocation licences, section 40(1)(b)-(m) matters were rightly considered and a precautionary approach adopted.

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