Posted on May 3, 2021 by Megan Hawley 70

Court clarifies the meaning of ‘pollution’ and finds civil liability for downstream erosion

Justice Preston, Chief Judge of the Land and Environment Court of New South Wales, recently issued judgment against the Sydney Water Corporation (Sydney Water) in proceedings brought by JK Williams Staff Pty Ltd (Williams) for the significant erosion of the bank of its land adjoining Boundary Creek in Penrith.

Williams successfully alleged the dominant cause of the erosion was treated effluent discharged from Sydney Water’s sewage treatment plant (Penrith STP), which operates one kilometre upstream from its land, and that Sydney Water was liable for damages.

In this post, we take you through the two key issues arising from this case:

1. Does erosion constitute ‘pollution‘ under the Protection of the Environment Operations Act 1997 (POEO Act)?
2. What are the civil liability implications in respect of eroding downstream land?

Erosion is not land pollution

Williams argued that the erosion of its land amounted to illegal land pollution under s 142A(1) of the POEO Act.

Land pollution or pollution of land is defined as follows:

“land pollution or pollution of land means placing in or on, or otherwise introducing into or onto, the land (whether through an act or omission) any matter, whether solid, liquid or gaseous—

(a) that causes or is likely to cause degradation of the land, resulting in actual or potential harm to the health or safety of human beings, animals or other terrestrial life or ecosystems, or actual or potential loss or property damage, that is not trivial, or

(b)  that is of a prescribed nature, description or class or that does not comply with any standard prescribed in respect of that matter,

but does not include placing in or on, or otherwise introducing into or onto, land any substance excluded from this definition by the regulations.”

Preston CJ did not accept that argument. His Honour found that the liquid discharged from the Penrith STP did not cause degradation of land within the meaning of the definition of land pollution or pollution of land.

His Honour found that there needs to be ‘not only the action of placing or introducing matter into or onto land, but also two results, the first result being degradation of the land and the second result being harm to human health or safety or the environment or property damage. The first result [degradation] must be caused by the action and the second result [harm ] must be caused by the first result.‘

He found that the erosion of land was ‘the antithesis of the action of introduction‘ required for land pollution under the POEO Act. Although the treated effluent was placed or introduced onto the bank, that did not cause the erosion, it was the flowing of the treated effluent past the land which caused the erosion.

His Honour also distinguished degradation in a geological sense (eg, lowering a fluvial surface through erosional processes) and degradation in a pollution sense (changing the nature or quality of land that remains). While the former was present, the latter was not. The land which received the placing or introducing of matter was not degraded at it was eroded away and ceased to exist.

Sydney Water breached its duty of care to Williams

A duty of care exists under s 177(2) of the Conveyancing Act 1919 (Conveyancing Act) to ‘not to do anything on or in relation to land (the supporting land) that removes the support provided by the supporting land to any other land (the supported land)‘. The supporting land includes ‘the natural surface of the land, the subsoil of the land, any water beneath the land, and any part of the land that has been reclaimed‘ (sub-s (3)).

Williams argued that the erosion of the lower bank of Boundary Creek within its property amounted to a negligent removal of support of its land. Sydney Water responded by arguing that either there was no breach of the duty or no causal link between its actions and the , or, if these were found, either s 43A of Civil Liability Act 2002 (CL Act) or the common law defence of statutory authority were available to defend the claim.

Finding  on liability

Preston CJ held that Williams had proved Sydney Water’s negligence (at [204]–[290]). Specifically:

1. Sydney Water owed Williams a duty of care under s 177(2) of the Conveyancing Act.
2. Sydney Water breached its duty of care under the CL Act (ss 5B and 5C) because it failed to take reasonable precautions against the foreseeable risk that discharging treated effluent from Penrith STP into Boundary Creek would cause or be likely cause harm by removing the support provided to Williams’s land by the lower bank. In assessing what a reasonable person would have done, his Honour considered the statutory contexts in which Sydney Water operates, especially its objectives to meet principles of ecologically sustainable development like the precautionary principle and polluter-pays principle.
3. Sydney Water’s failure to take precautions was one of a set of conditions necessary for the occurrence of harm to Williams (CL Act s 5D(1)(a)).
4. It was appropriate for the scope of Sydney Water’s liability to extend to the harm caused to Williams (CL Act s 5D(1)(b)).

No defences made out

Sydney Water’s reliance on s 43A of the CL Act also proved to be unsuccessful. This section significantly limits the civil liability of public authorities in circumstances where the authority is exercising a ‘special statutory power‘. But Preston CJ found that neither the act of discharging treated effluent nor the failure to take reasonable precautions were pursuant to a special statutory power. The kind of authorisations required to discharge treated effluent do not come from the SW Act, but rather the EPA Act and POEO Act. Any person can apply for authorisations under the latter Acts. And, of course, any person in Sydney Water’s position can omit to take reasonable precautions to avoid the risk of the harm suffered by Williams. That omission was not pursuant to any special statutory power.

Finally, Sydney Water’s reliance on the common law defence of statutory authority was also not established. This would have required Sydney Water to establish that the harm suffered by Williams was an ‘inevitable consequence‘ of carrying out the activities. Preston CJ held that it was not inevitable, in part because the discharge could have been directed elsewhere.

Other findings

The Court also found that Sydney Water breached its approval granted under the former Part 3A of the Environmental Planning and Assessment Act 1979 (EPA Act). The approval required Sydney Water to ‘generally‘ act in accordance with various documents, which included a ‘Statement of Commitments‘. The key commitment  was that ‘[n]o degradation of bed or bank stability would occur within Boundary Creek downstream of Penrith STP as a result of the Project‘.

In the EPA Act as it then was, his Honour found that a condition of approval could validly include an obligations offered by a development proponent in a statement of commitments. He interpreted the word ‘commits‘ to connote a legally binding obligation, and also thought it was important that Sydney Water used the word in the same way (‘Sydney Water and its contractors will be required to deliver and operate the Project in accordance with these commitments‘). Moreover, the word ‘generally‘ did not afford any latitude to Sydney Water having regard to the terms in which the obligation in the commitment was expressed—either there was degradation as a result of the Project or there was not. Clearly, there was degradation in this case.

The Court also found that because the s 177 claim under the Conveyancing Act was successful, any right Williams had to bright an action in nuisance was abolished (at [301]; see Conveyancing Act s 177(8)).

The full text of the judgment in JK Williams Staff Pty Limited v Sydney Water Corporation [2021] NSWLEC 23 can be viewed here.

If you have any questions about this post, please contact Megan Hawley or Lachlan Penninkilampi.