Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Gales Holdings Pty Limited v Tweed Shire Council [2013] NSWCA 382
• Hearing dates: 5 June 2013
• Decision date: 18 November 2013
• Before: Emmett JA at [1]; Leeming JA at [276]; Sackville AJA at [284]

Decision

(1) The appeal be allowed in part.

(2) The cross-appeal be allowed in part.

(3) The parties bring in short minutes of order giving effect to these reasons no later than 2 December 2013.

(4) The parties file any submissions they wish to on the question of costs of the proceedings at first instance and of the appeal no later than 2 December 2013.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: NUISANCE - stormwater runoff onto appellant's land - whether unreasonable interference with appellant's use and enjoyment of its land - whether appellant tolerated alleged nuisance - relevance and effect of that toleration to whether nuisance committed; NUISANCE - whether damages in nuisance limited to consequences of the alleged nuisance that were reasonably foreseeable - whether advent of a protected species of frog was a reasonably foreseeable consequence of the alleged nuisance; STATUTORY DEFENCES - whether alleged nuisance by respondent council fell within an immunity under s 45 Civil Liability Act 2002 - whether council entitled to rely on good faith defences under s 733 Local Government Act 1993 and s 43A Civil Liability Act 2002
• Legislation Cited: Civil Liability Act 2002, ss 43A, 45; Endangered Fauna (Interim Protection) Act 1991; Environmental Planning and Assessment Act 1979, ss 5, 5A, 79B, 79C, 111, 112, Parts 4 and 5; Environmental Protection and Biodiversity Conservation Act 1999 (Cth); Local Government Act 1993, ss 59A, 733; National Parks and Wildlife Act 1974, s 118D; Protection of the Environment Operations Act 1997, ss 120, 142A; Roads Act 1993; Supreme Court Act 1970, s 68; Threatened Species Conservation Act 1995; Tweed Local Environmental Plan 2000; Tweed Vegetation Management Plan 1999
• Cases Cited: AB v South West Water Services Ltd [1993] QB 507; Australian National Airlines Commission v Newman [1987] HCA 9; 162 CLR 466; Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; 179 CLR 520; Cambridge Water Co v Eastern Counties Leather Plc [1994] 2 AC 264; Commonwealth v Murray (1988) Aust Torts Rep 80-207; Council of the City of Liverpool v Turano [2008] NSWCA 270; Don Brass Foundry v Stead (1948) 48 SR (NSW) 482; Elston v Dore [1982] HCA 71; 149 CLR 480; Fennell v Robson Excavations Pty Ltd [1977] 2 NSWLR 486; Gartner v Kidman [1962] HCA 27; 108 CLR 12; Hargrave v Goldman [1963] HCA 56; 110 CLR 40; Mid Density Developments Pty Ltd v Rockdale Municipal Council [1993] FCA 408; 44 FCR 290; Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383; North Sydney Council v Roman [2007] NSWCA 27; 69 NSWLR 240; Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; 74 NSWLR 102; Stephens v Giovenco; Dick v Giovenco [2011] NSWCA 53; Sutherland Shire Council v Becker [2006] NSWCA 344; 150 LGERA 184
• Texts Cited: Horace, Ars Poetica; Aristophanes, The Frogs
• Category: Principal judgment
• Parties: Gale Holdings Pty Limited (Appellant); Tweed Shire Council (Respondent)
• Representation: Counsel: TF Robertson SC; M Green; JE Lazarus (Appellant); SR Donaldson SC; S Glascott (Respondent); Solicitors: Woolf Associates (Appellant); DLA Piper (Respondent)
• File Number(s): CA 2012/108238

Decision under appeal

• Citation: [2011] NSWSC 1128
• Date of Decision: 2012-03-13 00:00:00
• Before: Bergin CJ at Eq
• File Number(s): 2005/261912

Judgment

1 EMMETT JA:

TABLE OF CONTENTS

Introduction	[2]
Gales' Claims	[10]
The Land	[26]
The Wallum Froglet	[24]
Background to the Alleged Nuisance	[41]
Development Applications in respect of the Land	[75]
The Primary Judge's Findings and Conclusions	[103]
The Issues in the Appeals	[127]
Disposition of the Issues	[129]
- Legal Principles	[131]
- Whether the Council Committed Nuisance	[145]
- North of Turnock Street	[148]
- South of Turnock Street	[166]
Conclusion as to Nuisance	[174]
Statutory Defences	[175]
- Section 733(1)(b) of the LGA 1993	[181]
- Section 45 of the Liability Act	[191]
- Section 43A of the Liability Act	[195]
Toleration	[198]
Damages and Relief	[215]
- Diminution in Value because of Wallum Froglets	[218]
- Costs of Drainage Works in 2004	[263]
- Blue Jay Circuit Works	[264]
- Treating Stormwater for the Wallum Froglet Habitat	[268]
Conclusion and Orders	[271]

2 These appeals are concerned with a colony of frogs. They are not the βάτραχοι of Aristophanes, who inhabit the marshes of the River Styx, encountered by Dionysus on his way to the Kingdom of Hades. Rather, the appeals are concerned with a colony of crinia tinnula, or Wallum froglets, which inhabit ephemeral ponds on land owned by the appellant, Gales Holding Pty Limited (Gales). It is likely that both parties to these proceedings would agree with the response of Dionysus to the croaking ("βρεκεκεκέξ κοάξ κοάξ") of the βάτραχοι:

That is to say:

"May you all utterly perish with your croaking".

3 Gales is the owner of approximately 27 hectares of undeveloped land at Kingscliff in northern New South Wales (the Land). The Land is in the local government area of the respondent, Tweed Shire Council (the Council).

4 Gales commenced proceedings against the Council in the Equity Division of the Court, claiming declarations that it had been and continued to be guilty of nuisance:

• in causing or allowing stormwater runoff to discharge directly and indirectly onto the Land; and
• in preventing and obstructing stormwater runoff from passing and flowing away from the Land.

Gales also claimed injunctions restraining the Council from causing or permitting stormwater runoff to discharge onto the Land so as to cause a nuisance and requiring the Council to take such steps to remove, or permit the removal of, any obstruction preventing stormwater runoff from passing through and flowing away from the Land. In addition, Gales claimed damages under s 68 of the Supreme Court Act 1970, for both past injury and continuing and future injury.

5 The gravamen of Gales' complaint is that the stormwater runoff that flowed onto the Land and did not adequately flow away from the Land caused its substantial wetting up, which in turn resulted in the development of a habitat for the Wallum froglet, which is a protected species.

6 Gales alleged that the habitat developed over a period of time commencing in around 1999. The result of the establishment of the habitat was that, as one of several conditions of obtaining development approval in respect of the Land, Gales will be required to set aside part of the Land as a perpetual habitat for the Wallum froglet (the Condition). It says that the Condition has resulted in a significant diminution in the value of the Land. Gales also makes other complaints of damage.

7 On 13 March 2012, for reasons published on 21 September 2011, the Chief Judge in Equity:

• declared that, on and from 4 May 2004, the Council had been and continued to be guilty of nuisance by discharging untreated stormwater from its drains onto the Land and preventing stormwater from flowing away from the Land;
• ordered the Council to pay damages of $600,000 to Gales;
• ordered that if Gales be required to maintain a habitat for the Wallum froglet, the Council pay to Gales 30 per cent of Gales' costs of treating the stormwater runoff to make it suitable for the Wallum froglet habitat up to the date of completion of either its drainage works on the Land or of the Blue Jay Circuit Scheme, whichever be the earlier;
• ordered the Council to pay to Gales damages in the sum of $150,000 for the costs of expert advice and assistance in respect of the table drain installed on the Land in 2004 and the costs of and associated with its construction;
• ordered the Council to undertake works at its own cost on the Quigan Street drainage outlets in accordance with a concept plan and specifications identified in the order; and
• ordered the Council to pay 75 per cent of Gales' costs of the proceedings.

Blue Jay Circuit is a roadway to the west of the Land, where new development has occurred. The new development incorporates drainage works that will alleviate some of the problems about which Gales complained.

8 On 13 June 2012, Gales filed a notice of appeal from that part of the orders made by the primary judge that limited the finding of nuisance to the period after 4 May 2004 and from the refusal of the primary judge to award damages for the loss allegedly sustained by reason of the ecological changes to the Land brought about by stormwater inundation. The notice of appeal sought an order substituting 19 October 1999 for 4 May 2004 as the date on which the nuisance commenced and an order that the matter be remitted to the primary judge for determination of how much the Land's value was diminished by reason of the presence of Wallum froglets and the Condition.

9 By notice of cross-appeal filed on 27 June 2012, the Council cross-appealed from that part of the primary judge's orders that involved the declaration of nuisance, the rejection of the availability of statutory defences raised by the Council to any nuisance found to exist and the awarding of damages.

Gales' Claims

10 Gales' allegations in its further amended statement of claim filed on 7 March 2011 may be summarised as follows:

• Gales has owned the Land since 1974;
• stormwater runoff currently flows directly and indirectly onto the Land from a catchment area to the Land's north, east and south;
• in 1974, stormwater runoff coming onto the Land drained to the Tweed River by the following routes:
• a natural watercourse to the Land's north (the natural water course), which flowed into the Tweed River;
• a northerly flowing open drain on the Land's western boundary (the eastern drain), which flowed into a westerly flowing open drain to the Land's northwest (the northern drain), which flowed into the Chinderah drain and thence into the Tweed River; and
• a southwesterly flowing open drain flowing from the Land's eastern boundary through the Land and then flowing west (the southwesterly drain), which flowed into the Chinderah drain and thence into the Tweed River;
• by 1984, drainage of stormwater runoff from the Land to the natural watercourse had been blocked as a result of a development to the Land's northwest (the Elouera Nursing Home);
• by 1995, the eastern drain and the northern drain had been filled in during the course of a development to the Land's west (the Noble Park Estate);
• the Council permitted the filling of the northern drain in 1995 and then failed to construct an adequate alternative drainage route;
• in 1997, the Council constructed Elrond Drive and Turnock Street across the Land with an inadequate culvert and without table drains and has failed and continues to fail to provide an adequate culvert and table drains;
• the Council failed to provide adequate access for fauna under Turnock Street and Elrond Drive and continues to fail to do so;
• the Council constructed or permitted the construction of stormwater outlets and a gutter diversion at the corner of Quigan Street and Boomerang Street (the Quigan Street outlets), discharging stormwater runoff directly onto the Land;
• the Council constructed or permitted the construction of stormwater outlets near the corner of Quigan Street, Herford Street and Cudgen Road and to the west of that intersection (the Quigan-Herford Street outlets), discharging stormwater runoff onto the Quigan Street road reserve and then onto the Land;
• in about 1994, the Council constructed or permitted the construction of two stormwater outlets at the northern corner of the Land discharging stormwater runoff directly onto the Land (the Northern Corner outlets);
• in or prior to 1996, the Council constructed or permitted the construction of a stormwater outlet near the northeastern boundary of the Land carrying stormwater runoff from Pearl Street and discharging stormwater runoff both directly and indirectly onto the Land (the Pearl Street outlet);
• in 1997, the Council constructed a stormwater outlet on Turnock Street near the Land's northeastern boundary discharging stormwater runoff directly onto the Land (the Turnock Street outlet);
• the Council has continued to allow developments whereby the volume, frequency, velocity and peak flows of stormwater onto the Land, redirected and concentrated through all of the stormwater outlets described above, was unreasonably increased;
• the Council has permitted and continues to permit urban stormwater runoff to flow onto the Land by way of those stormwater outlets, without appropriate treatment of it to maintain water quality;
• the Council has failed and continues to fail to maintain on a regular and timely basis the drains that it owns or is responsible for and that would, if properly maintained, convey stormwater away from the Land;
• the Council's acts and their cumulative effect:
• caused and causes the stormwater runoff coming onto the Land to pool and remain in and on the Land more frequently, for longer periods and in greater quantities than in its natural state;
• diverted and altered the usual and regular course of the stormwater runoff coming onto the Land;
• caused and continues to cause a decrease in the quality of the stormwater runoff coming onto the Land;
• prevented and obstructed, and continues to prevent and obstruct, stormwater runoff from passing through and flowing from the Land in the drains described above and the natural water courses in and through which stormwater had, prior to the acts of the Council, regularly passed and flowed;
• caused and continues to cause the stormwater runoff coming onto the Land to be re-directed and concentrated, and to flow onto and pass through the Land, in greater volumes and with greater velocity and frequency and higher peak flows than it would have but for the acts of the Council;
• caused and continues to cause flooding of the Land more frequently, for longer periods and in greater quantities than in its natural state; and
• caused and continues to cause ecological changes on the Land, including creation of habitats suitable for Wallum froglets;
• as a consequence of the matters alleged above, the Land was, and continues to be, physically damaged and Gales' use and enjoyment of the Land was and continues to be unreasonably interfered with;
• the matters alleged above constitute, and continue from time to time to constitute, a nuisance; and
• as a consequence of the matters alleged above, Gales has suffered, is suffering and will continue to suffer, loss and damage.

11 There is little dispute as to the primary facts that give rise to Gales' claim. The real dispute between the parties concerns their appropriate characterisation. As a result, it has been necessary to examine the facts in some considerable detail. The principal questions are whether they show that the Council has been guilty of nuisance since 19 October 1999 and, if so, whether Gales can recover as damage the amount of any diminution in the Land's value, due to any requirement to maintain a habitat for Wallum froglets on the Land.

12 For the reasons below, I have reached the following conclusions on the principal issues. The Council committed nuisance from before 1999. The Council's statutory defences, or defences based on statutory immunities, are not made out. However, the advent of the Wallum froglets on the Land was not reasonably foreseeable to the Council as a consequence of its nuisance and so the Council is not liable in damages to Gales.

The Land

13 The Land's boundaries are shown by the pale green line on the photograph in Appendix 1 to these reasons. Turnock Street dissects the Land. Pearl Street and Kingscliff Street are to the east and Quigan Street is to the south. Turnock Street meets Elrond Drive to the southwest of the Land at a roundabout. Elrond Drive also dissects the Land. Elrond Drive runs in a northwesterly direction along the southwestern boundary of the Land north of Turnock Street. The western boundary of the Land north of Turnock Street abuts the eastern boundary of the Noble Park Estate. The Noble Park Estate's northern boundary is the site of the northern drain that is now filled in. To the north of the Land are the Elouera Nursing Home and the Kingscliff Bowls Club (the Bowling Club).

14 Prior to 1984, the drainage of the Land and of the Kingscliff area generally was as depicted in the photograph in Appendix 2 to these reasons. Stormwater drained from the Land to the Tweed River by way of the northern drain, the eastern drain, the southwesterly drain, the natural watercourse and the Chinderah drain, generally as described above (see para [10]).

15 The Land is zoned 2(c) under the Tweed Local Environmental Plan 2000 (LEP 2000). The primary objectives of LEP 2000 were to identify land for urban expansion and ensure its optimal utilisation consistent with environmental constraints and the need to minimise residential landtake. A secondary objective was to allow associated non-residential developments so as to ensure that sensitive environmental areas within the zone were protected from adverse impacts. Another objective was also to promote development consistent with what are described as principles of ecologically sustainable development. The Council could grant consent for development within the zone only if satisfied that the development was consistent with the zone's primary objective, it had considered the LEP 2000's other relevant aims and objectives and it was satisfied that the development would not have an unacceptable cumulative impact on the community, locality or catchment that would be affected by it.

16 Dr Harry Segal and his wife acquired the Land in 1969. They transferred the Land to Gales in 1974. Dr Segal is a director and controlling shareholder of Gales. Since 1977, Dr Segal's son, Mr Stephen Segal, has also been a director of Gales and Mr Stephen Segal assumed the management of the Land in the late 1990s.

17 The Land was cleared of large vegetation in the 1970s and was used until the 1990s for grazing cattle and thereafter for agistment of horses. From the 1970s to the late 1990s, one could walk over the Land without any restriction by reason of flooding and the Land was not overly moist, except for one area on the Land's southeastern edge near Quigan Street. Between the 1970s and the early 1990s, one could access the Land on foot and by tractor and utility, and vehicles were never bogged.

18 Between 1971 and the 1990s, the Land was a large open area with a few scattered trees. After rainfall, some of it was damp and moist, but never sludgy or drenched with water. There was no inundation of water, except after certain flooding events. After such events the water level always returned to normal, in the sense that the Land's drains were between half and three quarters full, depending on the tide. The Land's vegetation was the same as the surrounding land, being mostly low-lying scrub, such as bottlebrush and small trees.

19 In 1978, one could travel in a small boat up the northern drain for about a third of a kilometre. At that time, the northern drain was a natural watercourse that had been dug out to make it deeper. It was about 2 to 3 metres wide when full of water and about 1.5 to 2 metres deep at kingtide. The northern drain's banks were covered in grass, sedge and native plants and it was lined with mangroves near its intersection with the Chinderah drain. The northern drain was in much the same condition in 1991 as it was in 1978. The water in the drain was at least waist-deep.

20 In 1991, there were acacias on the Land's northeastern side. There was a wet patch on the Land north of where an extension of Turnock Street was later constructed, in which there was a 2 to 3 metre area with a sandy bottom where water would rise to just below one's knees. It was a natural depression, grazed by cattle and with clusters of small trees and patches of sedge.

21 From the 1970s to the 1990s, cattle grazed on the Land and no part of it was wet, flooded or submerged. There were wallabies and kangaroos and many small trees. Once a year, the local fire brigade practised fire management skills on it.

22 In 1990 and 1991, one could drive an eleven tonne tip truck through the Land with a tractor and spraying equipment on the back of the truck, together weighing about 6 tonnes. The ground was then rock solid and the truck or tractor did not become bogged. There were then about 30 horses agisted on the Land.

23 After the Turnock Street extension was constructed in 1997, the Land's vegetation was slashed at least annually both north and south of Turnock Street, however it became necessary to use two tractors. After Turnock Street's construction, the Land became so soggy that one tractor would be bogged continuously such that the second tractor would have to pull the first out. The Land's vegetation also became thicker, with more reedy types of grass.

The Wallum Froglet

24 The Wallum froglet is a vulnerable species under the Threatened Species Conservation Act 1995 (the Threatened Species Act). It was first given protected status in 1992, when it was listed as a vulnerable and rare species in schedule 12 of the National Parks and Wildlife Act 1974 (the National Parks Act). If a proposed development would significantly affect a threatened species, the Environmental Planning and Assessment Act 1979 (the Planning Act) requires a species impact statement to be prepared before the application may be considered. The development's impact on the threatened species must be assessed when determining the application. It is an offence under the National Parks Act for a person to harm any threatened species. A vulnerable species is a threatened species.

25 Five reports were prepared for either the Council or Gales between 1994 and the commencement of the proceedings. They were as follows:

(1) In June 1994, Mr Warren's report for Gales (the First Report);

(2) In May 1996, Woodward-Clyde's report for the Council (the Second Report);

(3) In 1999, another report by Mr Warren for Gales (the Third Report);

(4) In May 1999, another report by Woodward-Clyde for the Council (the Fourth Report); and

(5) In December 2002, a report by Planit Consulting Pty Limited (Planit) for Gales (the Fifth Report).

26 In mid 1994, Gales applied to the Council for approval for clearing operations on parts of the Land covered by a tree preservation order. In June 1994, Mr James Warren, a biological and environmental consultant, provided the First Report to Gales. The First Report noted that the Land was being utilised for grazing and identified a paperbark forest and a clump of Wallum bottlebrush in the Land's south. The First Report referred to a check of local records that had identified significant threatened species recorded in the area and said that a number of endangered species might also be expected to occur in the area. Although the First Report mentioned the Wallum tree frog (Litoria olongburensis), there was no mention of the Wallum froglet, though the survey recorded that it was possible, though unlikely, that the site contained Wallum frogs. It said that if the Wallum frogs occurred they would most likely be in the perennially wet areas associated with the paperbark forests in the Land's south.

27 In March 1996, Woodward-Clyde, consulting engineers, provided a proposal to the Council for a flora and fauna assessment of the Land, including an amphibian survey utilising call recording and analysis. Woodward-Clyde said that a Queensland Museum officer would perform the call analysis and that the frog survey would be best done between August and March, during rainfall, to ensure maximal species identification. In May 1996, Woodward-Clyde produced the Second Report entitled "Flora and Fauna Assessment of a Proposed Road Deviation".

28 The Second Report referred to records indicating that certain threatened fauna, including the Wallum froglet and the Wallum tree frog, could occur either on the site of the proposed Turnock Street extension or nearby. It said that sampling efforts had tried to detect the widest possible range of species but that neither the Wallum froglet nor the Wallum tree frog was recorded. It referred to reports that both species were particularly sensitive to alterations in water chemistry and were found only in oligotrophic waters. The term "oligotrophic" refers to lakes or ponds with low levels of nutrients and high levels of dissolved oxygen. The Second Report also said that the Wallum froglet had been recorded in a piggery effluent drain, suggesting that it was more adaptable than previously thought.

29 The Second Report said that the Wallum froglet would most likely occur along the drain south of the proposed roundabout, where other frogs were recorded. An appendix to the Second Report noted that the Wallum froglet had not been recorded during site surveys but that it may be present in a drain south of the study area. The appendix also recorded that the development's effect on the Wallum froglet life cycle was minor in respect of breeding and foraging and that there was no effect on its migration or movement.

30 In 1998, Gales retained Mr Warren to perform a preliminary flora and fauna assessment of the Land, including searches for significant fauna habitats. Mr Warren produced the Third Report based on his observations and findings from a July 1998 survey. It recorded that a single Wallum froglet had been heard in flooded grassland in the southeast of the Land, south of Turnock Street. It noted that Woodward-Clyde, in the Second Report done in 1996, had said it failed to record the species but that the species could possibly occur along the table drain that the Turnock Street extension crosses. The Third Report also referred to Woodward-Clyde's opinion in the Second Report that it was unlikely that the Turnock Street extension would have a significant impact on a local population of Wallum froglets.

31 The Third Report said that based on habitat availability and other surveys of the immediate area, the population would be restricted to the small areas of low-lying paperbark vegetation in the Land's southeastern and in the paperbark swamps to the Land's south. It said that the drain running through the northern part of the Land was subject to saline intrusion and was highly unlikely to provide a suitable habitat for the Wallum froglet, while the rest of the area was generally elevated and was not suitable for the species.

32 On 28 May 1999, Woodward-Clyde produced the Fourth Report entitled "Statement of Environmental Effect - Flora, Fauna and Fire Hazard Assessment" in relation to the Council's proposed construction of a library near the Land. The Fourth Report said that the Wallum froglet had been detected in a brief field survey. It said that the Wallum froglet had been recorded on the site of the proposed library (the Library site), though most of its habitat was off the Library site in the adjoining areas and adjacent land on either side of the Turnock Street extension, that is to say, on the Land. The Fourth Report said that given the already disturbed nature of the Library site, the proposed development was unlikely to affect any native species such that it would be at risk of extinction.

33 The Fourth Report said that the Wallum froglet north of the Library site would need to be protected from indirect changes to water quality resulting from the development. It noted that the Wallum froglet had been recorded in areas adjacent to the Library site and just inside the Library site near the Turnock Street-Cudgen Road roundabout. It said that the species appeared to be restricted to the closed fernland habitat on either side of the Turnock Street deviation and that its habitat on the Library site was marginal and of low significance, given the proportionately more suitable habitat in adjacent areas, including on the Land.

34 The Fourth Report said that it was possible that the range of the species varied according to environmental conditions, such as rainfall and disturbances. It said that its largest detected grouping was between the area east of Turnock Street and the new residential area to the north. Additional groupings of the species were detected northwest of the Turnock Street roundabout and south of Turnock Street in the areas surrounding the roundabout.

35 Gales retained Planit to provide an assessment of the Land's vegetation in connection with its development proposals. In October 2001, in that assessment, Planit made passing reference to the fauna in the wider area. While the Wallum froglet was not the subject of the assessment, the Wallum froglet's physical features and habits were described and its scientific name mentioned in a table.

36 In December 2002, Planit produced the Fifth Report, which was a detailed flora and fauna investigation of the Land. The Fifth Report's methods included diurnal frog call identification and nocturnal surveys. It said that the paperbark forest within the neighbouring land's southern portions was the primary habitat for amphibians. The largest populations of frog species on the Land were recorded in areas with suitable breeding habitat for two protected species.

37 The Fifth Report stated that following extensive rainfall events in March 2002, Wallum froglets were recorded calling in a small area in the Land's southwest adjacent to the Turnock Street roundabout. It stated that given the extensive cleared areas on the Land adjacent to that small area, the Wallum froglet had not relocated into that small area, but rather had lain dormant in that area's soil and had resurfaced after the groundwater table had been recharged by the rainfall events. The Fifth Report concluded that the Wallum froglet was located mainly in the neighbouring land, also owned by Gales, rather than on the Land. It noted that the Council had failed to record the Wallum froglet within the area during its ecological assessments conducted prior to the construction of the Turnock Street extension.

38 The Fifth Report said that following the Council's failure to record the species, the Turnock Street extension had severed a movement corridor of the species that, at that time, connected parts of the Land north of Turnock Street to drainage corridors that ultimately connected to suitable breeding grounds for the species on the southern portions of the neighbouring land. The Fifth Report said that a Wallum froglet population existed on the Land in 2002, but that it was predominantly confined to the most suitable habitat in the southern portions of neighbouring land adjacent to the Land. That is to say, the Fifth Report by Planit said that though part of the Wallum froglet population existed on the Land, most of it was not on the Land, but rather on neighbouring land with a more suitable habitat.

39 On 12 May 2003, Mr Peter Parker of Environmental Consultants Pty Limited advised the Council that Planit, in the Fifth Report of December 2002, had failed to undertake a proper eight-part test with respect to the Wallum froglet. Mr Parker advised that Planit had incorrectly assumed that the Wallum froglet would not be significantly affected by Gales' development proposals, despite a road having been constructed through its core habitat and the future effects of the proposed developments, including the pumping onto the Land of 98,000 cubic metres of fill and the construction of drainage works for a proposed shopping centre that would drain onto the remaining Wallum froglet habitat. Mr Parker advised that there would be significant hydrological changes or changes to nutrient status. Mr Parker attached a chart noting that while Planit had heard less than five calls of the Wallum froglet, his survey conducted on only two, days, 29 April 2003 and 5 May 2003, had recorded more than 1000 calls.

40 On 11 August 2003, Planit informed Gales that there had been significant ponding on the Land north of Turnock Street and that the area was unable to drain because of the design of the culverts under Turnock Street. The ponding was generally greater than 30cm and in some areas standing water was still present after several months. Planit observed that the population sizes of all frog species, including the Wallum froglet, had increased within the area as a result of what it described as "ongoing suitable conditions, likely breeding and potential immigration from other populations on site (as a result of flooding)".

Background to the Alleged Nuisance

41 On 31 July 1974, Dr Segal wrote to the Council saying that he considered that the Council must accept responsibility for the large drains that opened directly onto the Land, which were causing severe localised drainage problems. On 27 August 1974, the Council replied saying that the Council did not then have sufficient funds to consider drainage through the Land. The Council said that while it accepted that drainage from Kingscliff streets discharged onto the Land, the Land was a natural watercourse or collection area. It said that it might consider the matter further when considering development proposals in the area.

42 On 15 March 1994, Mr Henley of the Council met with Mr Martin Findlater of Martin Findlater & Associates Pty Limited, who were consulting engineers for the Noble Park Estate development. Mr Henley said that he was not happy with how the northern drain had been dealt with. He recorded that either the outlet drain had to be widened or the overland flow path cleared and levelled.

43 Ian Hill & Associates Pty Limited, consulting engineers, was retained by the Bowling Club and the Elouera Nursing Home. On 21 April 1994, Mr Ian Hill wrote to the Council concerning the rear of the properties north of the Noble Park Estate. He pointed out that the northern drain had been filled in and a recent inspection revealed ponding along the Noble Park Estate's northern boundary. He said that little cognisance appeared to have been taken of the upstream catchment of Pearl Street, Kingscliff Street, the land between those streets and the Noble Park Estate. On 17 June 1994, Mr Hill again wrote to the Council, repeating that the northern drain had been filled in and seeking the Council's advice as to what remedial action would be implemented before the next wet season.

44 On 14 September 1994, the Council was provided with a copy of a report prepared by Ian Hill & Associates entitled "Drainage of Kingscliff Street Site" (the Hill & Associates Report). The Hill & Associates Report recorded that in 1993 the northern drain was filled in during the construction of Noble Park Estate. It stated that no allowance had been made for escape of stormwater under the roadway and that a 1200mm diameter concrete pipe (the 1200mm pipe) had been installed, which was supposed to carry stormwater north and west of the Noble Park Estate.

45 The Hill & Associates Report concluded that the 1200mm pipe was under capacity for a once in five year storm event and no provision at all had been made for a once in a hundred year storm event. It asserted that the design of the 1200mm pipe ignored the Council's own drainage strategy for Kingscliff and that the installed drainage system had not been constructed as designed. It said that, as a result, the Bowling Club and the Elouera Nursing Home would be more subject to flooding than before the construction of the Noble Park Estate.

46 On 2 February 1995, the Council wrote to Hill & Associates saying that it had spoken with Mr Findlater, who designed the drainage for the Noble Park Estate. The Council said that Mr Findlater was to submit a number of options for the Council's consideration. On 1 March 1995, the Council informed Mr Findlater that no further approval or consents would be given for the further development of the Noble Park Estate until a drainage solution and its funding had been agreed upon. The Council's letter to Mr Findlater pointed out that the original stormwater design did not adequately cater for the once in a hundred year storm event. On 2 March 1995, the Council wrote again to Mr Findlater, saying that no fresh development application for the Noble Park Estate would be determined until the upstream drainage issues had been resolved.

47 Mr Findlater responded on 9 March 1995, suggesting an amendment to the Council's Development Control Plan 9 (DCP 9), providing for a nominal area of one hectare for future multipurpose open space/flood retention/wetland filter to be reserved east of the Noble Park Estate. That suggestion was an alternative to a proposed 20-metre-wide open channel along the Noble Park Estate's northern boundary. In effect, Mr Findlater proposed, for the Noble Park Estate's benefit, for which he was acting so that it could be further developed, that one hectare of the Land be used as a retention basin. The Council's documentation uses the words "detention" and "retention" interchangeably to refer to Mr Findlater's proposal. In referring to documents and discussions, I have used the same word as the primary judge, notwithstanding the apparent inconsistency. Nothing appears to turn on the distinction, if there be one.

48 Following internal Council communications in March 1995 about the suggested retention basin, the Council wrote to Gales on 23 March 1995 saying that now that preparation of the Kingscliff drainage strategy plan had been prepared and the drainage issues investigated, it was proposed to recommend that DCP 9 be amended to allow for a stormwater retention basin of about one hectare within the Land and to allow for the possible joint use of the retention basin as a water quality control pond and passive recreation area. That is to say, the Council indicated to Gales, before constructing the Turnock Street extension, but after the Council had become aware of the filling in of the northern drain and its replacement by the inadequate 1200mm pipe by the Noble Park Estate developer, that it intended to amend DCP 9 so as to implement Mr Findlater's proposal, being to use one hectare of the Land as a stormwater basin to solve the drainage problems caused by the filling in of the northern drain and thus allowing for further development of the Noble Park Estate.

49 Gales retained Mr Gary Peacock, a director of Outline Planning Consultants Pty Limited, town planners, to assist it in reviewing DCP 9. On 5 May 1995, the Council wrote to Mr Peacock saying that it wanted to work closely with him in reviewing DCP 9. The Council said that DCP 9 required significant review and accepted that Mr Peacock's proposal for a steering committee or working group to be established was a sound approach. Subsequently, Mr Peacock met with Council officers in relation to the likely impact on the Land of West Kingscliff's roads and drainage infrastructure needs.

50 Gales also retained Mr Ray Sargent, a civil and structural engineer, to assist it in assessing the Council's proposal for a retention basin on the Land. Mr Sargent met with a Council officer in September 1995 and undertook a detailed inspection of the Land to assess drainage.

51 On 27 September 1995, the Council resolved to prepare an amendment to DCP 9. The Council noted that it had become apparent after completion of the early stages of the Noble Park Estate that a drainage problem existed in relation to developed land upstream of the Noble Park Estate. The Council noted that a possible solution to the problem involved the construction of a retention basin on the Land. It was concluded that the way to resolve the problem promptly was to prepare and exhibit amendments to DCP 9 and to make further efforts to ascertain Gales' views on the matter.

52 On 18 December 1995, the Council wrote to Mr Hill, informing him that "agreement" had been reached for the creation of "a stormwater/flood retention basin adjacent to the culvert in question". Curiously, there was no mention of the fact that the proposed retention basin was on the Land and that Gales had not agreed to it. The "agreement" referred to was apparently an agreement that the Council made with Mr Findlater, without reference to Gales, solving the Noble Park Estate's development problems by using the Land as a retention basin.

53 On 23 November 1995, the Council wrote to Mr Peacock, informing him that there would be no immediate action to proceed with the proposed amendment of DCP 9 and observing that, as Gales was now "formally aware" of the need for a retention basin, it would be necessary to obtain a formal assurance from Gales that a prospective purchaser of the Land would be notified that one hectare of it was not to be filled and had to remain available for drainage retardation. There was no evidence that the Council ever pursued further a formal assurance from Gales.

54 In late 1995, the Council proposed to construct the Turnock Street extension across the Land, so that it would function as a distributor road. Gales agreed to sell a portion of the Land at an agreed valuation. The Council had to comply with s 111 of the Planning Act and consider whether the construction would require an environmental impact statement under s 112 of that Act. The Council told Gales that it wished to proceed with an environmental assessment and, in late December 1995, Gales provided its consent for the Council to enter the Land to carry out site survey work associated with the proposed extension. Mr Peacock provided the First Report, which Mr Warren produced for Gales, to the Council to assist it with its assessment.

55 On 29 July 1996, Mr Sargent, who was then acting for the Council after having been retained by Gales in 1995, provided to the Council several plans showing the major drainage outlet points for the Turnock Street and Elrond Drive area. The documents illustrated the expected position after the construction of the proposed road works and future site filling works. The reference to future site filling works seems to be a reference to future filling of the Land. Mr Sargent's letter to the Council said that after construction of the Turnock Street extension, the low-lying areas to the north of Turnock Street would drain to an identified outlet, which was to be sized to drain the selected storm event over the catchment without causing flooding to existing developed areas. A sketch included with the letter referred to the total catchment area north of the proposed Turnock Street extension as 41.64 hectares and recorded that three 1500mm pipes would be constructed where the Elrond Drive culvert was subsequently constructed. However, those three 1500mm pipes were never constructed.

56 On 9 August 1996, Mr Sargent, who by that time had been retained again by Gales, provided to Gales a report entitled "Proposed Stormwater Quality Improvement Scheme for West Kingscliff, Tweed Shire" (the 1996 Sargent Report). The 1996 Sargent Report proposed that a system be instituted to catch the first flush of stormwater runoff from the catchment and retain it in ponds for a sufficient time for the water quality to improve prior to discharge. It concluded that treating the stormwater runoff in that way would improve the quality of the final downstream water outflow by up to 50 per cent. It also said that that would be a significant improvement on the existing drainage system, which contained no formal structures for removing contaminants from runoff apart from sedimentation action within the main drains.

57 On 23 August 1996, Gales provided its consent for the Council's development application in relation to the proposed extension of Turnock Street through the Land. Construction began thereafter.

58 On 3 September 1996, Mr Hill, acting for Elouera Nursing Home and the Bowling Club, resumed communication with the Council in relation to the 1200mm pipe, which had replaced the northern drain. On 11 November 1996, the Council replied to Mr Hill saying that until filling of the Land, there should be an adequate retention area available to satisfy flood drainage. The Council's letter said that prior to any development of the Land, the trunk drainage system would have to be resolved and that the need for a retention basin was being addressed.

59 On 12 November 1996, the Council wrote to the Bowling Club saying that while the Land remained at its present level there should be an adequate retention area available "to satisfy flood damage", presumably intending to refer to flood drainage. It repeated that prior to any development of the Land, the trunk drainage system would have to be resolved. The Council's letter said that it was fully aware of the drainage needs and that final resolution of the details could not be predicted, as they largely related to action by Gales.

60 The primary judge concluded that the irresistible inference from the above correspondence was that the Council had concluded that until the Land was filled, it would be used as a retention area for flood drainage. There is no evidence that Gales ever consented to such a use or was even asked to consent to it.

61 On 24 March 1997, Gales provided to the Council a signed consent for the Council to enter upon the Land to construct the Turnock Street extension. The letter included a requirement that fencing be erected to ensure that the cattle on the Land did not escape. The newly constructed Turnock Street extension was officially opened on 9 December 1997.

62 On 12 June 1998, Gales agreed to provide funding in the sum of $21,156 to the Council for the preparation of a drainage and water quality study by WBM Oceanics. Gales drew the Council's attention to its previous undertakings to notify Gales how the proposed drainage system, including the retention basin, would work and pointed out that the Council had not done so. Gales also said that a final decision on the stormwater scheme for the area was still outstanding.

63 On Mr Peacock's recommendation, Gales engaged Mr Bill Knobel of Knobel Consulting Pty Limited, consulting engineers, to assist with monitoring a master drainage study for West Kingscliff and any follow-up engineering work, such as landfill, road design, services provision and drainage. On 21 July 1998, Mr Knobel wrote to WBM Oceanics confirming concern regarding drainage at the northern end of the Land, adjacent to the Elouera Nursing Home and the Bowling Club. The letter pointed out that there appeared to be no outlet for a once in a hundred year storm event through the Noble Park Estate. Mr Knobel also asked WBM Oceanics to examine the requirements for drainage under Elrond Drive and Turnock Street.

64 On 4 August 1998, Mr Peacock and Mr Knobel, on behalf of Gales, met with Council officers and representatives of WBM Oceanics. Mr Peacock and Mr Knobel suggested that the Council reduce the proposed drainage through the Land. It was noted that Gales wished to submit a development application for landfill immediately after completion of WBM Oceanics' study.

65 The minutes of the Council's meeting on 19 April 2000 noted that WBM Oceanics had completed its report on drainage management for the Kingscliff catchment and that the report would guide the drainage strategy in the West Kingscliff area. The Council resolved that an amendment be made to DCP 9 incorporating that drainage strategy. However, notwithstanding that resolution, DCP 9 was apparently not amended. On the other hand, the Council subsequently informed Gales that the Land could not be developed before the amendment of DCP 9.

66 During 2000, Gales objected to a proposed expansion of the Kingscliff shopping centre. On 14 November 2000, Gales complained that there had been no discussion of Gales' submission concerning draining discharge onto the Land. Gales asserted that the authority to discharge stormwater onto the Land was fundamental to the proposed expansion and yet that no such authority existed. The meeting of the Council held on 15 November 2000 noted that, in its present form, the proposal was likely to increase peak flows and pollutant concentrations across the Land to the southwest. The Council also noted that the shopping centre expansion proposal would increase the impervious cover to almost one hundred per cent of the site, decrease the stormwater runoff's time of concentration and result in substantially increased peak stormwater flow rates. The Council noted that to accommodate once in a hundred year flows and to minimise the increase of nuisance to downstream owners, it would be necessary to limit discharge from the site.

67 The Council initially refused the application for consent to the expansion of the Kingscliff shopping centre. However, at the Council's meeting of 20 December 2000, it was approved subject to a condition that stormwater discharge onto the Land would be limited to pre-development rates and evenly distributed across the southern boundary by means of a low spillway.

68 On 6 March 2001, Council representatives and Gales met. The meeting noted that Knobel Consulting was examining significant external drainage entering the Land and that further discussions were to be held once drainage outlets and paths had been established through the various parts of the Land. It was recognised that there was a need to treat existing stormwater from the Kingscliff township before it entered the main drainage system and that land may have to be made available for that to take place.

69 Representatives of Gales and the Council met again on 5 April 2001 in relation to planning for West Kingscliff. The Council's record of the meeting stated that the western side of Pearl Street, the side closest to the Land, was at a lower level than that to which West Kingscliff would be filled and that the Council had some significant potential stormwater liabilities relating to the planning, design and construction of the Land. Mr Knobel commented that he and the Council had worked productively together. The Council's record noted that the fill on the Land would be permeable material to assist water quality management. Mr Knobel said that some significant drainage occurred from the existing Kingscliff township onto the Land. He reinforced that drainage management and treatment was a significant issue for the Council in terms of future liabilities and expenditure. The Council's record stated that Gales and the Council should work together to work out solutions for the total sub-catchment and to agree upon drainage and water quality outcomes. The Council's record stated that considerable flexibility was still available in the design of the drainage and water quality systems in the vicinity of the junction of Elrond and Turnock Streets. The Council's record ended by saying that Mr John Henley, a Council officer, "acknowledged the residual liability".

70 On 24 August 2001, Gales received notice concerning an inspection of the Land. The notice included a statement to the effect that the large drain running east-west to the Chinderah flood drain had been filled. That is clearly a reference to the northern drain. That was the first time Gales became aware that the northern drain had been filled.

71 In November 2001, Mr Knobel reported to Gales that, in addition to managing stormwater generated by the development of its own land, Gales had also inherited the management of stormwater generated by surrounding urban development, which was discharged directly onto the Land. Mr Knobel said that the Council had acknowledged its liabilities in that regard. That appears to be a reference to the meeting of 5 April 2001 at which Mr Henley is recorded as having acknowledged the Council's "residual liability".

72 Mr Knobel's report concluded that the Turnock Street extension had effectively dammed all stormwater generated within the catchment. Mr Knobel also concluded that the damming effect of the Turnock Street extension was compounded by the fact that the culverts under Turnock Street were too low for the Land to drain freely. That is a reference to the fact that the extension of Turnock Street was on an embankment and the culverts under the extension were constructed at a level that would only be effective once the Land was itself at a higher level once it was filled. Until filling of the Land, the Turnock Street culverts were too high to drain water from the Land north of Turnock Street, compounding the damming of the stormwater runoff that drained onto the Land.

73 On 22 January 2002, Gales wrote to the Council concerning a draft amendment proposed for the LEP 2000. Gales said that the Council's previous planning decisions had resulted in the northern drain servicing the land north of Turnock Street being filled in. It said that recent studies showed that filling in the northern drain, along with other stormwater being directed onto the Land, presented great problems. Gales requested that there be discussions with the Council "to seek solutions". On 7 February 2002, the Council wrote to Gales saying that the appropriate manner in which to progress matters would be for consultants acting for Gales and the Council's staff to work together.

74 Council representatives met on 18 July 2002. A memorandum in relation to the meeting referred to the Council's resolution of 27 September 1995 to amend DCP 9 to incorporate a retention pond on the Land. It said that despite much correspondence on the issue with Gales, Gales did not agree for such works to be carried out on the Land. It recorded that solving the drainage issue might cost in excess of $1,000,000. It reported several options and then suggested, as a possible strategy, that Gales be informed that it was Gales' problem to deal with upstream drainage, as the problem would only occur if the Land north of Turnock Street were filled. It suggested that Gales could provide "detention storage" on the Land or purchase land from the Bowling Club. There is no evidence that these views were conveyed to Gales.

Development Applications in respect of the Land

75 On 19 December 2002, Gales lodged a development application for a proposed shopping centre on the Land. By internal memorandum of 27 February 2003 (the February memorandum), a Council officer recommended that the application be refused. The February memorandum recorded that about 12 hectares of developed land upstream of the Bowling Club drained through a stormwater pipe system, which ran through the Bowling Club and then west, including through pipes under Blue Jay Circuit, to the Chinderah drain. That is clearly a reference to the 1200mm pipe, which replaced the northern drain. The Council had known since 1995, as evidenced by its communications with Mr Findlater, that the drainage problems were caused by the filling in of the northern drain by the Noble Park Estate development. It was for that reason that DCP 9 was amended so the Land could be used as a stormwater retention basin.

76 The February memorandum said the 1200mm pipe was only designed for a once in 5 year storm event and that excess flows went to unfilled land, including the Land. It said that Gales' shopping centre application would "incrementally eliminate detention storage in" the Land, while Gales' proposed filling would eliminate all of it. It said that the combined effect of filling the Land and granting the shopping centre application, without any compensatory measures, would be to eliminate drainage capacity for a greater than once in 5 year storm event and cause flooding of land and property. It said that it could be argued that the Land was the natural area for runoff discharged from the foreshore dune area and acted as a natural detention basin for that area.

77 The February memorandum referred to Gales' proposal for dealing with the external drainage by creating a north-south open drain extending from the Bowling Club land in the north to the southwestern drain south of Turnock Street, including a new drainage structure under Turnock Street. The February memorandum suggested Gales' development application be refused because it:

• failed to demonstrate that the proposed drainage systems and proposed landform would be compatible with the ultimate development of the West Kingscliff area;
• failed to demonstrate that the proposed stormwater quality treatment measures were compatible with the ultimate stormwater treatment strategies for the West Kingscliff area;
• did not provide a lawful point of discharge for major and minor stormwater runoff from the proposed development; and
• failed to assess the environmental impacts of filling the site and the impact on amenity of persons along any potential haul routes.

78 On 5 March 2003, Jim Glazebrook & Associates Pty Limited, town planners and development consultants, wrote to the Council on behalf of Gales. The letter referred to the discharge of polluted stormwater from the Council's stormwater drainage system onto the Land and said that there had been little evidence that the long-term implications of the unlawful discharge onto the Land had been objectively and properly considered. Further, the letter said, the Council's officers had not properly nor meaningfully considered the environmental and strategic planning issues, nor had the Council initiated discussion and negotiations with Gales. The letter asserted that those matters had culminated in the preparation of a new draft DCP 9 without prior reference to, or discussion or consultation with, Gales, despite the Council's undertaking to work cooperatively with Gales. The letter said that the new draft DCP 9 had been prepared without awaiting the comprehensive studies being prepared for Gales, about which the Council had known throughout their gestation. The letter asserted that the new draft DCP 9 had been presented without awaiting the studies and without the benefit of any similarly comprehensive studies by the Council. The letter also asserted that the Council had failed to address stormwater management issues.

79 The letter then said that Gales was "no longer prepared to permit the unlawful discharge of concentrated stormwater flows" from the Council's existing drainage structures onto the Land. After asserting the Council's awareness of the importance of drainage and water quality management, the letter said that Gales required the Council to identify immediately all points of illegal discharge of stormwater onto the Land and to take measures to prevent that discharge within 90 days.

80 On 18 March 2003, the Council responded to the letter of 5 March 2003, saying that the proposed amended DCP 9 would address all of the necessary planning and engineering issues, including strategic drainage issues. The Council also said that it was unaware of any unlawful discharge points as alleged in the letter and that Gales would be fully consulted in completing DCP 9.

81 On 11 April 2003, Gales' proposed development of the Land was designated as a "controlled action" under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) (the Environmental Protection Act). The Commonwealth Department of Environment and Heritage (the Environment Department) told Gales that the Land contained an important population of Mitchell's Rainforest Snails and that it considered that site works were likely to affect important habitat for the snail if adequate controls were not in place. The Environment Department said that any works associated with the development approval for a shopping centre potentially affecting the habitat of the snail could not commence until approval had been given under the Environmental Protection Act.

82 In mid 2003, a blockage of the Elrond Drive culvert was observed. When the culvert was constructed, a small area was damaged and a wooden prop was placed in the pipe while new concrete was put in to replace the broken area. As at 9 May 2003, the wooden prop was apparently still in place and masses of accumulated grass had collected around it, causing the blockage. Unlike the Turnock Street culvert, the Elrond Drive culvert was low enough, even without filling of the Land, to act as a drain for stormwater from the Land north of Turnock Street. Following the construction of Turnock Street, there was no way for stormwater to drain from the Land north of Turnock Street other than through the Elrond Drive culvert.

83 On 4 May 2004, Gales' solicitors wrote to the Council asserting that the Turnock Street extension effectively acted as a dam, even for small storm events. The letter said that adequate under-road and lateral drainage was required to ensure that unnatural ponding did not continue to occur on the Land north of Turnock Street. It asserted that the circumstances described constituted an unreasonable interference with the reasonable use and enjoyment of the Land and as such amounted to a legal nuisance. It said that Gales required that the Council urgently review the problems caused by the construction of Turnock Street through the Land, with a view to the Council making alterations to the drainage to stop the unnatural ponding occurring. The letter said that that should be carried out in consultation with Dr Steve Webb, a hydrologist retained by Gales.

84 The primary judge regarded the letter of 4 May 2004 as being critical as to the time at which the Council was first guilty of conduct that constituted a nuisance in relation to the Land. Her Honour concluded that the Council had not been guilty of nuisance before receiving that letter. It will be necessary to return to that question below.

85 On 12 May 2004, Mr Knobel, on behalf of Gales, gave the Council permission to enter the Land to re-establish the outlet to the stormwater drainage discharging from Cudgen Heights. The Cudgen outlets drained onto the Land south of Turnock Street. Mr Knobel requested that the Council provide an inventory of all existing stormwater pipes discharging onto the Land.

86 On 14 May 2004, Gales' solicitors wrote to the Council reporting on a number of matters. First, the letter referred to a Council drain at the eastern end of Turnock Street, which was discharging water onto the Land, and alleged that the discharge of water substantially interfered with the reasonable use and enjoyment of the Land. The letter said that Gales would hold the Council responsible for all loss and damage suffered as a result of the discharge of the water. The letter also invited the Council to inspect the Land to make an assessment.

87 The letter then referred to the filling of the northern drain and asserted that Gales had become aware of the filling "in recent times". That appears to be a reference to the notice to Gales of 2 August 2001. The letter also correctly asserted that the Council's solution to the drainage problem was, in the short term, to let the stormwater from the Kingscliff urban area flow onto the Land and, in the long term, provide for a retention basin on the Land. The letter complained that the Council had failed to require the Noble Park Estate developer to rectify the drainage problem that it had created by the filling of the northern drain and that the deliberate concentration of water on the Land was plainly unlawful. The letter repeated Mr Knobel's request for an inventory of all stormwater drainage paths onto the Land and asked for it to be provided within 10 days.

88 On 18 May 2004, a meeting took place between representatives of Gales and of the Council concerning the drainage issues. Gales' representatives informed the Council's representatives that Gales preferred that an open drain similar to the northern drain be re-established. The Council apparently did not regard that to be a realistic option, for both cost and political reasons.

89 On 6 July 2004, the Council responded to Gales' solicitors' letters of 4 May 2004 and 14 May 2004. The Council said that development of the Land would require significant filling to raise it above flood level and that that filling, as well as previous filling and drainage work, would irreversibly change the natural landform and thus the natural drainage patterns of the area. After referring to WBM Oceanics' report on drainage issues in West Kingscliff, the Council said that its officers were meeting regularly with Gales' representatives to develop and progress planning for the Land. The letter asserted that there was significant agreement on key drainage issues and that it was expected that the final outcome of the meetings between the Council and Gales would be a drainage strategy that was equitable and acceptable to both parties.

90 At a Council meeting on 4 August 2004, the Council noted that a comprehensive plan for the Land was essential and that the sooner such a plan was created the better. It was proposed that a small technical group be established to complete a comprehensive draft structure plan for the Land and to report to the Council by the end November 2004. The Council also noted that DCP 9 required a major review, particularly with respect to the Land. That was the third decision by the Council that DCP 9 should be reviewed. The Council had previously decided that DCP 9 should be amended in light of drainage issues in 1995 and 2000.

91 On 3 November 2004, Gales wrote to the Council saying that Gales had been trying to develop the Land and build a supermarket centre in West Kingscliff for many years. The letter said that that required the Land to be filled and that the most critical component was drainage for the Land on either side of Turnock Street. The letter asserted that information recently made available to Gales identified that the cause of the drainage problems was alteration in the natural drainage flow. The letter also asserted that the reason that Gales had not built a shopping centre was that the Land could not be filled until the drainage problems were resolved.

92 The letter of 3 November 2004 said that Gales intended to submit a development application for filling the area north of Turnock Street in about the first week of December 2004. The letter said that a critical component of that development application would be how the waterflow external and upstream from the Land, which previously flowed through the northern drain, might be handled, possibly by flowing southward across the Land. The letter requested an urgent meeting with the Council to determine a final outcome of the drainage strategy.

93 On 9 November 2004, the Council was told that Gales' development application for a shopping centre could not be supported because of its potential impacts on threatened species and their habitat and that whether the development was a controlled action under the Environmental Protection Act would be determined.

94 On 11 November 2004, Jim Glazebrook & Associates, acting for Gales, wrote to the Council, referring to the request in Gales' letter of 3 November 2004 for an urgent meeting. The letter asserted that Gales had incurred significant losses and costs due to the drainage problems and had investigated possible technical solutions to the conveyance of upstream waterflows. The letter said that Gales would be prepared to consider "certain options" involving the Land, subject to appropriate consideration, financial or otherwise. The options were not specified.

95 By letter of 24 November 2004, the Council informed Gales that it had to address several issues arising from the fact that Gales' development application was non-compliant with the Council's "adopted drainage strategy". The letter said that that strategy included the dedication of a 50 metre wide easement for drainage and associated linear parkway use. The letter said that any departure from the Council's drainage strategy must be justified and, in particular, must demonstrate that it would be consistent with the provision of adequate drainage for the entire catchment in its ultimate development form.

96 In late 2004 or early 2005, Gales lodged a development application to fill the Land north of Turnock Street and to construct a shopping centre south of Turnock Street. On 31 January 2005, the Council wrote to Gales in response to that development application, saying that its lodgement was "pre-emptive" given all the studies and planning required for the location. The letter said that, "it has been decided to report to Council on the process needed to review and replace the existing Development Control Plans (DCPs) for Kingscliff with options (including [Gales'] option) for the development of the area, especially greenfields sites adjacent to the existing town centre".

97 On 7 February 2005, the Environment Department told Gales that its development application had been referred to it for a decision as to whether approval was needed under the Environmental Protection Act. The Environment Department told Gales that it had decided that its proposed development was a "controlled action" and so could not continue without approval under Pt 9 of that Act.

98 The Council did not grant development approval to fill the Land and construct a shopping centre. Gales therefore appealed to the Land and Environment Court against the deemed refusal of its development application. In the proceedings in the Land and Environment Court, the Council contended successfully that a species impact statement was necessary before the development applications could be determined.

99 A court-appointed expert was instructed to ascertain whether the Wallum froglet or its tadpoles were able or likely to use "in the context of genetic interchange" any of the drains under any of the roads on the Land, or cross any of the roads surrounding the Land in order to move between those portions of the Land north of Turnock Street, south of Turnock Street and west of Elrond Drive. The expert concluded that the Wallum froglets could traverse pipes under Turnock Street and Elrond Drive but that there was little likelihood of them doing so. The expert also concluded that the Wallum froglets could cross both Turnock Street and Elrond Drive, with a reasonable chance of success, between the hours of midnight and 6 am.

100 On 26 May 2005, Gales' solicitors told the Council that they had been instructed to commence proceedings against it for nuisance and negligence in relation to the drainage problems on the Land and consequent changes in the ecology and difficulties in developing the Land as a result of the Council's acts and lack of action. The solicitors referred to the filling of the northern drain, the manner in which Turnock Street was constructed and the Council's conduct in relation to the surrounding developments. The proceedings at first instance were commenced later in 2005.

101 On 14 July 2008, the Land and Environment Court granted development consent for Gales' proposed development, subject to certain conditions, including the Condition that Gales set aside part of the Land as a perpetual habitat for the Wallum froglet. The Condition stipulated that the consent would not operate until Gales satisfied the Council of various matters, including the following:

• the production of a Wallum froglet management plan;
• monitoring and reporting in relation to various matters including climatic conditions, water quality and hydrology;
• a requirement that the results of the monitoring be given to the Council at the end of each season, with a final report after 12 months with conclusions regarding Wallum froglet numbers, population fluctuations, number of breeding events and observations of water quality and the length of the time there was standing water;
• a requirement for a stormwater network with two separate water quality treatment criteria, one being for the Wallum froglet habitat and the other for all other stormwater; and
• that the fill was of adequate quality and if it had a shell grit content in excess of 1 per cent, an impermeable barrier was to be placed within the fill batter for the Wallum froglet precinct.

102 Blue Jay Circuit is part of the road system within the Noble Park Estate adjacent to the Land. The Council has proposed stormwater augmentation works in relation to a drainage scheme for Blue Jay Circuit. The review of environment factors in respect of those works recognised that surplus flows greater than a once in 5 year storm event flow downstream, by default, onto the Land, as the inlet capacity is exceeded. The Council's proposed stormwater works include an upgrade of the 1200mm pipe. It is common ground that those works will adequately address Gales' problems caused by increased stormwater runoff onto the Land. The Court was informed during the hearing of the appeal that the works have now been completed. That fact is material to any relief to which Gales may be entitled as a consequence of the nuisance found by the primary judge.

The Primary Judge's Findings and Conclusions

103 The primary judge found that, between 1974 and 2009, stormwater runoff draining onto the Land from the northern sub-catchment areas increased by 200 per cent. The 1200mm pipe provided inadequate drainage compared to that provided by the northern drain before it was filled in. Some of the additional stormwater runoff would not have flowed onto the Land had the northern drain not been filled or had the 1200mm pipe been adequate. However, the amount of the additional stormwater runoff caused by the filling of the northern drain and the inadequacy of the 1200mm pipe could not be precisely calculated.

104 The construction of the Turnock Street extension in 1997 made the Land wetter because the additional stormwater runoff was effectively dammed by the embankment of the Turnock Street extension, such that it could only escape to the southwest through the Elrond Drive culvert. The storm water runoff could not flow under Turnock Street because Turnock Street was constructed without ground level culverts. Instead, culverts were constructed under Turnock Street higher than ground level so that they would be at the right level when the Land north of Turnock Street was filled. The path and rate of the flow of stormwater runoff wetted up the Land, causing ponding. Had the Council constructed ground level culverts under Turnock Street, the additional stormwater runoff could have drained through them.

105 Mr Sargent's original drawings produced for the Council in relation to the Turnock Street extension proposed three 1500mm pipes in the vicinity of the Elrond Drive culvert. However, the Council constructed the Elrond Drive culvert with only a single 900mm pipe, which given the ineffectiveness of the overly high Turnock Street culverts had to meet the drainage requirements of all the additional stormwater flowing onto the Land from the north resulting from the filling in of the northern drain and the inadequacy of the 1200mm pipe. Had the Turnock Street culverts been functional, by being at the existing level of the Land, the 900 mm Elrond Drive culvert may have been adequate to meet those considerable drainage requirements. Without the Turnock Street culverts being functional, it was clearly inadequate and ponding was the result.

106 The primary judge concluded that ephemeral ponding probably occurred on the Land even before the construction of the Turnock Street extension, such that it cannot have been the sole cause of the ephemeral ponding. That is to say, even without the Turnock Street extension, the additional stormwater runoff would have caused ephemeral ponding on the Land. It is of some significance that there cannot be a Wallum froglet habitat without ephemeral ponding. However, her Honour did not consider that it was of particular significance that there was ephemeral ponding before construction of the Turnock Street extension.

107 There was an issue as to whether the wetting up of the Land north of Turnock Street due to inadequate drainage was a cause, the sole cause or the dominant cause of the creation of a Wallum froglet habitat. The primary judge found that the combination of species and the structure of the vegetation communities indicated that the Wallum froglet habitat was created after 1997. The flourishing of sphagnum moss on the Land north of Turnock Street evidenced the wetness of the Land. The wetting up contributed to the creation of the Wallum froglet habitat, but was probably not the only factor. Slashing was probably also a contributing factor, as it affects the structure of plant communities by reducing the height of all but groundcovers and enables new growth. However, slashing, without wetness, could not have caused the creation of the habitat. Thus, the primary judge found that the wetting up was probably the dominant factor in the creation of the Wallum froglet habitat, but that slashing was a subsidiary contributing factor.

108 The primary judge held that, consistently with the notion of give and take, a neighbour may tolerate an interference with the enjoyment of land for various reasons and that that toleration, an indicium of which is a lack of complaint, may be taken into account as evidence of there being no unreasonable interference with the enjoyment of land. Her Honour appears to have concluded that a neighbour cannot claim damages for any interference it tolerated before complaining about it. Where it has acquiesced in the violation of its right of enjoyment of its land but changes its approach to that violation, it must inform the alleged wrongdoer that toleration has ceased and can only then claim damages.

109 The primary judge found that, notwithstanding the 30-year relationship between Gales and the Council, during which they communicated regularly with each other, Gales never complained in writing before its letter of 4 May 2004. While its letter of 31 July 1974 suggested that the Council should take responsibility for the severe localised drainage problems, her Honour did not consider that that letter made a claim of unreasonable interference with Gales' enjoyment of the Land. Her Honour observed that Mr Glazebrook's letter to the Council of 5 March 2003, saying that Gales was no longer prepared to permit the unlawful discharge of concentrated stormwater runoff flows onto the Land, did not refer to any unreasonable interference to Gales' enjoyment of the Land. Her Honour considered that the letter suggested that before 5 March 2003 there was alleged unlawful discharge of concentrated stormwater runoff onto the Land but that, for whatever reason, Gales permitted it. However, that permission was withdrawn by the letter of 5 March 2003.

110 The primary judge considered that Gales' priorities in relation to the Land up to 5 March 2003 accommodated the flow of stormwater runoff onto the Land without complaint. Her Honour observed that the Land had to be filled before any development could occur. Accordingly, Gales' daily use of the Land, by grazing and later agistment, was temporary until the Land was developed. Her Honour noted that Gales took part in many meetings and retained numerous consultants to assist it, and at times the Council, in achieving some sensible and consensual drainage plan for the Land. Her Honour considered that Gales' attitude was that it would tolerate the stormwater runoff so long as those discussions and meetings were pursued to achieve a sensible and workable drainage plan for the Land. However, after 5 March 2003 Gales was no longer prepared to tolerate the discharge of stormwater runoff onto the Land. On 4 May 2004, Gales asserted for the first time that the Council's conduct in constructing the Turnock Street extension, which increased the wetting up of the Land, constituted an unreasonable an interference with its enjoyment of the Land.

111 The primary judge found that, between 2003 and 2008, parts of the Land were inundated such that one could not walk comfortably through those parts because of water. Her Honour also found that the untreated stormwater runoff from the Council's drains was of a different quality from the rainwater that fell onto the Land during storms. The stormwater runoff discharging from the drains came from various sources, including the rooves and downpipes of buildings in the surrounding catchment areas. That stormwater runoff consequently contained the usual impurities of surface water collected in that way.

112 Data collected over the period from December 2007 to November 2009, at four locations in the designated Wallum froglet habitat and at three stormwater outlets draining from the surrounding urban areas, demonstrated that the untreated stormwater runoff on the Land differed significantly from the water quality requirements imposed on Gales by the conditions of the 2008 development consents. The "mean observed value" of the water within the Wallum froglet habitat was significantly above the requirements imposed by those conditions for all except two parameters. Her Honour accepted that that was evidence of pollutants in the stormwater runoff and found that stormwater runoff flowing naturally onto the Land from the Pearl Street catchment carried pollutants of the type Gales complained of. Her Honour also found that the stormwater runoff was the result of increased urbanisation of the catchment areas and that there were pollutants in it.

113 The primary judge rejected the Council's contention that since Gales only wanted to use the Land for development the stormwater runoff did not unreasonably interfere with its use and enjoyment of the Land, as it was just a "dormant development site". Her Honour did not accept that the fact that Gales was not using the Land for specific and continuous operations at any particular time from 2003 onwards meant that there was no unreasonable interference with its enjoyment of the Land.

114 The primary judge referred to the Land's partial conversion into a retention basin for the water from the Council's drains and from the Noble Park Estate, which, combined with the increase in stormwater runoff, had changed the Land from a flat grazing property to a soggy watery expanse, thus causing very serious interference with Gales' enjoyment of the Land. Her Honour found that apart from Gales' loss of the use of the Land by reason of its wetting up, Gales also had to instruct many consultants to assist it to prepare a plan as to how the water should be drained from the Land and had to construct table drains with the assistance of expert advice at its own cost. Her Honour concluded that Gales had established that there had been an unreasonable interference with its right to enjoy the Land after May 2004.

115 The primary judge found that the Council had decided to use the Land as a retention basin for the stormwater runoff in the area generally. It continued to do so after receipt of the letter of 5 March 2003. Her Honour referred to the Council's internal memorandum of February 2003, which noted that Gales' development application for a shopping centre would "incrementally eliminate detention storage" from the Land. Her Honour concluded that the Council was conscious that if it allowed the development it would have to find an alternative to the stormwater retention basin.

116 The primary judge found that, from 5 March 2003, the Council was aware that Gales was alleging that there was unlawful discharge of stormwater onto the Land. After receipt of the letter of 4 May 2004, the Council must have been aware that Gales was alleging that there was an unreasonable interference with its enjoyment of the Land. Her Honour considered that if the Council knew or ought to have known of the nuisance and the real risk of reasonably foreseeable consequential damage to Gales, it was obliged to take such positive action as a reasonable person in its position would consider necessary to eliminate the nuisance.

117 Her Honour then analysed the steps taken by the Council and the position that it adopted once it was put on notice that there was damming of the water north of Turnock Street and unnatural ponding. The Council knew that it had imposed a number of conditions on Gales as prerequisites for development consents, including the production of an acceptable drainage plan. The Council also knew that the Turnock Street culverts were of no use in draining the Land because they were too far above ground level. The Council took no steps to alleviate the damming after receiving the letters of 5 March 2003 and 4 May 2004. Her Honour considered that to be most unreasonable, since it was left to Gales to alleviate the problem by the construction of the table drain with the assistance of expert advice, including that of Dr Webb.

118 The primary judge concluded that it was reasonably foreseeable that harm would be caused to Gales by the wetting up of the Land with the untreated polluted stormwater runoff and Gales' consequent need to find a method of accommodating the additional water. Her Honour found that it was foreseeable that the wetting up of the Land might cause physical damage to it and that by May 2004 when Gales complained the Council knew that there were Wallum froglets on the Land in great abundance. Her Honour found that the additional water on the Land was caused by the Council's inadequate drainage system, but that it was not until March 2003 that Gales was no longer prepared to tolerate the interference with its enjoyment of the Land.

119 Her Honour concluded that there was a need to eliminate the increased flow of stormwater onto the Land and that the Council had recognised the drainage problem from as early as 1995, when it sought to find a solution in discussions with Mr Findlater. The Council also knew from 1995 that there was a need for water quality control of the stormwater runoff. Her Honour concluded that from 5 March 2003 when Gales notified the Council that it would no longer tolerate the stormwater runoff, and certainly no later than 4 May 2004 when Gales complained of nuisance, the Council was aware that the increased flow of water onto the Land might cause physical damage to the Land. Her Honour concluded that the stormwater runoff constituted an actionable nuisance, but only from 4 May 2004. Her Honour found that the stormwater runoff constituted a nuisance from 4 May 2004 until shortly after the table drains were installed in 2004 and the water began to drain more effectively. Her Honour found that the nuisance continued.

120 The primary judge found that there was a viable population of Wallum froglets on the Land by late 2002 or early 2003, certainly before 5 March 2003 when Gales told the Council that it was no longer willing to tolerate the discharge of stormwater onto the Land, and thus also before 4 May 2004 when Gales told the Council that there was an unreasonable interference with its enjoyment of the Land. Her Honour found that although all of the Land's physical features as at 4 May 2004 were present before that time, Gales had tolerated them without demur such that there was no actionable nuisance until then. Thus, Gales could not complain that the viable population of Wallum froglets was a compensable consequence of actionable nuisance. While it may have been a consequence of the Council's conduct prior to 2003 or 2004, that conduct was not nuisance.

121 Notwithstanding that conclusion, the primary judge addressed the foreseeability of the establishment of the Wallum froglet habitat, from the point of view of the Council. Her Honour did not accept that the prospect of an invasion of a colony of Wallum froglets should have been in the mind of the Council when it authorised the Noble Park Estate development in or before 1994, or when it decided in 1995 to use the Land as a retention basin for stormwater runoff.

122 Her Honour did not consider that the research that had been carried out in relation to the Land would have alerted either party to the prospect of the invasion of a colony of Wallum froglets. The research had identified a single call in 1998, two years after the construction of Turnock Street, at a time when there was an expectation that Gales would fill the Land in the not too distant future. Her Honour was clearly referring to the Third Report of 1999 conducted by Mr Warren for Gales, based on a 1998 survey, which had recorded that a single Wallum froglet had been heard calling in flooded grassland in the Land's southeast, south of Turnock Street.

123 Before authorising the Turnock Street extension the Council ordered the Second Report, which had involved attempting to detect the widest possible range of species. The Wallum froglet was not detected at all and was not heard on the Land until 1998 at the earliest, well after the Council had authorised the Noble Park Estate and had decided to use the Land as a retention basin. Her Honour considered that those investigations suggested that there was no Walllum froglet population of significance in the area.

124 Her Honour accepted that the Council expected that Gales would seek to develop the Land sooner rather than later and that that expectation was why the Turnock Street culverts had been constructed approximately halfway up the embankment, so as to accommodate the Land as filled. Her Honour did not consider that it was foreseeable that the filling of the Land would be delayed by a year and that the effect of the increase in stormwater runoff would be exacerbated by the absence of culverts at ground level, such that ephemeral ponding would not only occur but remain for five to six weeks in summer and for some months in winter. Her Honour concluded that the risk of that happening was not reasonably foreseeable in all the circumstances and was remote. The primary judge concluded that Gales was not entitled to recover damages for the loss of the value of the part of the Land that was to be set aside for the Wallum froglet habitat and that Gales was not entitled to recover its costs as claimed for the fill for the Land.

125 The primary judge also concluded that the Quigan Street outlets were in disrepair. That disrepair caused an increase in the velocity of the stormwater from the outlets that impacted adversely on the Land south of Turnock Street.

126 The primary judge observed that it was accepted that the Land's drainage problems would be solved by the construction of the Blue Jay Circuit augmentation works, which involved obligations to and by third parties. Her Honour concluded that a mandatory injunction requiring the carrying out of the works was an unsatisfactory solution. Her Honour was satisfied, however, that damages were an adequate remedy. Her Honour accepted Gales' claim for $600,000 as an amount that would enable Gales to install a drainage system that would abate the nuisance.

The Issues in the Appeals

127 Because of the diverse issues raised in the appeal and the cross-appeal, the parties were directed to prepare a statement of the issues. The issues in relation to the appeal, as formulated by the parties, are as follows:

(1) Whether the primary judge erred in finding that the Council committed an actionable nuisance only after Gales informed it in March 2003 that Gales objected to the discharge of stormwater onto the Land, or only after Gales informed it in May 2004 that the discharge of stormwater was causing problems in the nature of inundation.

(2) Whether the finding by the primary judge that Gales tolerated the nuisance should be set aside on the grounds that:

(a) the Council had not pleaded that matter;

(b) the Council's case did not rely on the letter of 5 March 2003 as evidencing an earlier consent or acquiescence by Gales; and

(c) the proposition that Gales had permitted the nuisance was not put to the witnesses called by Gales, who were not required for cross-examination, and Gales was denied the opportunity to call late evidence to refute the assertion.

(3) Whether tolerance as found by the primary judge is relevant whether a cause of action in nuisance is available.

(4) Whether the primary judge erred in concluding that Gales had in fact tolerated any inundation of the Land prior to March 2003.

(5) Whether the primary judge erred in concluding that liability for damages in nuisance is confined by the principle of foreseeability as in negligence.

(6) Whether the primary judge erred in applying the wrong test in determining damages for nuisance, engaging in the wrong factual enquiry and failing to take into account of evidence of the Council's actual knowledge and foresight.

(7) Whether in determining the extent of the restriction imposed by the principle of foreseeability on recoverable damages in nuisance, it is appropriate to consider whether the burden imposed by a requirement that the Council have regard to the risk of damage of the kind sustained would be unduly burdensome and, if so, whether a requirement that a defendant in the Council's position have regard to the risk of supporting the survival and potential expansion of endangered animal or plant populations is unreasonably burdensome.

(8) Whether Gales' loss suffered through the establishment of viable population of Wallum froglets north of Turnock Street was reasonably foreseeable.

128 The issues in relation to the cross-appeal, as formulated by the parties, are as follows:

(1) Whether the primary judge erred in finding that the discharge of stormwater onto the Land north of Turnock Street amounted to nuisance in the nature of inundation, having regard to the evidence of Dr Webb.

(2) Whether the primary judge erred, in the light of Dr Webb's evidence, in failing to find that any nuisance in the nature of inundation or the creation of a habitat conducive to the establishment of a viable Wallum froglet population north of Turnock Street was caused by the blockage of the drain in the vicinity of the Elrond Drive culvert and the failure of Gales to maintain drainage on the Land.

(3) Alternatively, whether the primary judge erred, in light of the above matters, in failing to find that any nuisance on the part of the Council arose out of its failure to maintain the Elrond Drive culvert, being a failure within the scope of the immunity in s 45 of the Civil Liability Act 2002 (the Liability Act).

(4) Whether the primary judge erred in finding that there was unreasonable interference with Gales' use and enjoyment of the Land through the presence of pollutants associated with the discharge of stormwater on to the Land.

(5) Whether the primary judge erred in granting relief in connection with the condition of the Quigan Street drainage outlets, where there was no evidence that their condition contributed to any problem in the nature of inundation south of Turnock Street and Gales did not plead interference in the nature of scouring.

(6) Whether the primary judge erred in finding that the Council's conduct, in proposing the adoption of Mr Findlater's solution to the inadequacy of the 1200mm pipe installed by the Noble Park Estate developer and demanding an apology for defamatory remarks and payment of outstanding costs in 2004, served to deprive the Council of protection under s 733 of the Local Government Act 1993 (the LGA 1993) in connection with the alleged nuisance.

(7) Whether the primary judge erred in failing to find that the acts or omissions relied upon by Gales as amounting to the creation of a nuisance, being failure to restore the drainage previously provided by the northern drain and constructing Turnock Street with inadequate provision for the drainage of stormwater runoff from the Land north of Turnock Street, were acts or omissions in good faith attracting protection under s 733 of the LGA 1993 or s 43A of the Liability Act.

(8) Whether, in the circumstances of the cases, the Council could take advantage of the statutory protection afforded by s 45 of the Liability Act.

(9) Whether the Council was disentitled to the protection afforded by s 733 of the LGA 1993 and s 43A and s 45 of the Liability Act, in circumstances where it was in breach of s 120 and s 142A of the Protection of the Environment Operations Act 1997 (Environment Protection Act).

(10) Whether the primary judge erred in awarding damages in the sum of $600,000 as the cost of additional drainage necessary as a consequence of the limited capacity of the 1200mm pipe that replaced the northern drain.

(11) Whether the primary judge erred in awarding damages representing one third of the cost of treating stormwater prior to the construction of the Blue Jay Circuit drainage works.

Disposition of the Issues

129 Because several of the issues are interrelated, it is convenient to deal with those issues together. Thus, the issues in Gales' appeal fall under the following topics:

• toleration by Gales of any nuisance before 2003 or 2004 (issues 1, 2, 3 and 4) (the toleration of nuisance issue); and
• foreseeability on the part of the Council of the establishment of the colony of Wallum froglets (issues 5, 6, 7 and 8) (the foreseeability of damage issue).

130 The issues raised in the Council's cross-appeal may be grouped under the following topics:

• whether the Council was guilty of nuisance (issues 1, 2, 3, 4 and 5);
• whether the Council was entitled to rely on statutory defences (issues 6, 7, 8 and 9) (the statutory defences issue); and
• the relief ordered by the primary judge (issues 10 and 11) (the relief issue).

First, however, it is desirable to say something about the relevant legal principles.

Legal Principles

131 A nuisance is either a continuous or recurrent state of affairs. An occupier of land will be liable for continuing a nuisance if, with knowledge or presumed knowledge of the state of affairs, the occupier fails to take reasonable steps to bring it to an end despite having had ample time to do so (Hargrave v Goldman [1963] HCA 56; 110 CLR 40 at 59-61). There will be nuisance if a state of affairs created, adopted or continued by an owner or occupier of land harms another person's enjoyment of land occupied or owned by that other person, unless the first person's conduct involves no more than the reasonable and convenient use of its own land (Hargrave v Goldman at 62).

132 That is to say, nuisance is a wrongful interference with another's enjoyment of land by the use of other land occupied or owned by the alleged wrongdoer. However, an owner or occupier of land is not an insurer. There must be more than mere harm being done to another's enjoyment of land. The harm must be caused by the alleged wrongdoer's use of its own land. The word use connotes that a degree of personal responsibility is usually required, even though a deliberate or negligent act is not. A deliberate or negligent act will however be sufficient. A balance must be maintained between an owner or occupier's right to do what it likes with its land and a neighbour's right not to be interfered with. The proper test to apply in most cases is what is reasonable, according to the ordinary usages of a particular society. While negligence is not essential, fault of some kind is almost always necessary (Elston v Dore [1982] HCA 71; 149 CLR 480 at 487-488).

133 The flow of water can give rise to nuisance. There is a difference between the flow of surface waters and the flow of natural watercourses. Riparian rights attach to the flow of natural watercourses such as rivers or streams, but not to the flow of surface waters. The word "riparian" derives from the Latin ripa for riverbank. A riparian owner, being the proprietor of land on the banks of a natural stream of running water, is entitled to enjoy, and is obliged to accept, the flow of water past the land. The law of natural watercourses, not surface waters, applies even to waters of a river flowing in a wider channel than usual, when the river is swollen in time of flood, even though they flow on land outside the riverbed while still following the river's general course. Such flood channels are treated as part of the alveus, or riverbed.

134 A riparian owner can neither deprive those lower down the river of its flow, nor pen it back upon the lands of a neighbour higher up. Riparian rights and obligations are proprietary, being natural incidents of the ownership or lawful possession of the land abutting on the stream or river. They turn on who owns the riverbank, not the riverbed (Gartner v Kidman [1962] HCA 27; 108 CLR 12 at 23).

135 Where there are two contiguous parcels of land and one is higher than the other, the higher proprietor is not liable merely because surface water flows naturally from its land to the lower land. Surface waters, while distinct from natural watercourses, are those that flow naturally onto land, as distinct from water artificially brought to or concentrated on land and allowed to escape. The higher proprietor may be liable if surface waters are caused to flow onto the lower land in a more concentrated form than they naturally would. An example would be if a water channel were constructed and the levels or conformations of the higher land altered, so as to cause the flow of surface waters onto the lower land to be increased at any particular point. On the other hand, if a more concentrated flow occurs simply as a result of the higher proprietor's natural use of its land, generally there will be no nuisance. Whether a use is natural is determined in the light of all of the circumstances, including the purposes for which the higher land has been used and the manner in which the flow of water is increased (Gartner v Kidman at 48).

136 The lower proprietor may recover damages from, and where appropriate obtain an injunction against, the higher proprietor for altering the natural flow of surface waters. Further, the lower proprietor is entitled a degree of defensive self-help. It can put up barriers and pen back even the natural, unconcentrated flow of water, as well as the altered flow. It can do so even if doing so damages the higher proprietor's land, so long as it uses reasonable care and skill and does no more than is reasonably necessary to protect the enjoyment of its lower land. However, the lower proprietor's right to defend its land by erecting barriers is generally restricted to penning the water back on the higher land. It does not entitle the lower proprietor to divert the water onto the land of a third proprietor, if the water would not have naturally done so (Gartner v Kidman at 49).

137 Acts necessary for the ordinary use and occupation of land do not constitute nuisance. However, such acts must be done in a reasonable and proper manner and not involve an unnatural or unusual use (Gartner v Kidman at 44).

138 Leaving aside water, emanations of any kind constitute a nuisance if they create an inconvenience materially interfering with the ordinary physical comfort of human existence, according to plain, sober and simple notions among ordinary people. Regard must be had to the character of the locality in which the inconvenience is created and the standard of comfort that those in the locality may reasonably expect. The reasonable use of land may occasionally cause annoyance about which neighbours cannot reasonably complain (see Don Brass Foundry Pty Ltd v Stead (1948) 48 SR (NSW) 482 at 487). In considering whether an inconvenience is unreasonable, allowance must be made for reasonable give and take. As Jordan CJ said in Don Brass Foundry (at 487):

hanc veniam petimusque damusque vicissim

(this kind of indulgence we both ask and, in turn, give).

Sir Frederick did not acknowledge the source (Horace, Ars Poetica 11), doubtless because he assumed his readers would know it.

139 Nuisance covers a variety of tortious acts or omissions and the relevant conduct need not be negligent. For example, an occupier of premises may be liable for emitting fumes or noise, even though it used the utmost care in the use of its premises. Since the amount of fumes or noise that can lawfully be emitted is a question of degree, the occupier may simply have miscalculated what was justifiable in the circumstances. On the other hand, nuisance by emission may be the result of negligent conduct. Often the same facts will establish liability both in nuisance and in negligence. Although negligence is not necessary, fault of some kind almost always is. Fault generally involves foreseeability (Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty Ltd [1967] 1 AC 617 at 639 (Wagon Mound (No 2)).

140 Gales contends that where nuisance is committed by intentional rather than negligent conduct foreseeability is not an appropriate test to limit damages. It claims that there are already important remoteness constraints on damages in nuisance, without adding foreseeability, which limits damages in negligence. It points to the following matters as being indicative of such inappropriateness:

• Nuisance, unlike negligence, protects land and interests in land, both of which are stable, certain and known.
• Nuisance is founded upon a state of affairs that, to a substantial degree, harms an owner or occupier in the enjoyment of land, whereas negligence is founded upon conduct that causes foreseeable harm to the person or property of another to whom a duty of care is owed.
• The impact of action or inaction on physically identifiable land is readily capable of empirical observation.
• Title to sue in nuisance is restricted to the owners of land or the holders of interests in land who are in actual possession or control of it, so there is no risk of an indeterminate class of potential claimants.
• The subject matter of nuisance is limited to a substantial and unreasonable interference with the use or enjoyment of land and, where it involves physical damage to land rather than its amenities, compensation is necessarily limited to its diminution in value or the cost of its restoration and incidental losses.
• Nuisance usually emanates from neighbouring land and the physical proximity of neighbours makes the harm obvious and readily observable, and imports knowledge of the uses to which land is or may be put.
• Injunctive relief is available in nuisance, but not in negligence, to restrain the effects of the nuisance that were not reasonably foreseeable by the defendant: if injunctive relief be available to restrain a future and continuing nuisance, and necessarily its consequences, damages for the loss caused if those consequences materialised should also be recoverable.

141 Nuisance often involves negligent conduct, where foreseeability may be thought to be commensurate with fault. However, Gales says, where the wrongful conduct is intentional, and given that the consequences of nuisance are physically proximate by definition, foreseeability is an unnecessary constraint on compensation. Thus, Gales says, an intentional tortfeasor should not be rewarded for failing to investigate the consequences to neighbouring land of proposed actions. The less investigation the wrongdoer does before performing the intentional act of nuisance, the less foreseeable the consequences of the nuisance and the less compensation will the wrongdoer have to pay. It would be unreasonable for a neighbour to only be liable if it had investigated the consequences for the plaintiff's land of its wrongful conduct. To do so would encourage deliberate ignorance.

142 Gales' argument that foreseeability has no role to play in the case of intentional torts does not assist in the present case. Foreseeability is an important principle limiting liability in both negligence and nuisance. Liability in either tort arises only for losses arising from a failure to address risks that a reasonable person would recognise as needing to be addressed.

143 Gales contends that remoteness principles impose constraints on the assessment of causation, and particularly intervening causes, but do not necessarily import a foreseeability test, as seen in compensation for breach of contract. Gales says that the context of nuisance is physical proximity between plaintiff and defendant, with a limited class of victims whose losses relate only to harm done to land. Given that context, it says that damages should only be limited by foreseeability if foreseeability is also a necessary element of the defendant's liability, that is to say, where the nuisance was negligent not intentional. On that approach, damages in nuisance would be limited by foreseeability only where the defendant is guilty of nuisance because it ought reasonably to have foreseen that its action was likely to do harm. Foreseeability would not limit damages for intentional nuisance.

144 In certain classes of nuisance, such as creating a danger to persons or property in navigable waters, foreseeability is essential for liability (Wagon Mound (No 2) at 640). However, it is not appropriate to apply different tests for limiting damages in nuisance according to whether the impugned conduct be done intentionally or negligently. Such an approach, even if open as a matter of precedent, which may be doubted, would increase the complexity and decrease the coherence of the law of nuisance for the sake of an illusory symmetry. Either foreseeability limits damages in all cases of nuisance or in none. It is not sufficient to show that the loss suffered is the direct result of nuisance. It must also be shown that the loss was, in the relevant sense, foreseeable (Wagon Mound (No 2) at 640).

Whether the Council Committed Nuisance

145 The Land was low-lying hinterland through which stormwater runoff flows from the higher land on the coastal fringe and southeastern rise to the Chinderah drain and ultimately to the Tweed River. The southwesterly drain is the lowest part of the Land and is therefore the catchment divide. Stormwater flowed south to the southwesterly drain from the northern apex of the Land after the northern drain was filled. In addition, stormwater flows north from Quigan Street, which drains most of South Kingscliff, across the Land into the southwesterly drain. The stormwater then flows into the Chinderah drain by way of the southwesterly drain and then into the Tweed River.

146 When the Turnock Street extension was built north of the southwesterly drain, its embankment dammed the water, which eventually flowed under Elrond Drive or became groundwater. The drainage structures, which were built contrary to the Council's engineering advice, were inadequate. Ponding therefore occurred after the Turnock Street extension blocked the natural flow path to the southwesterly drain.

147 In the proceedings, Gales complained about nuisance both in relation to the Land north of Turnock Street and the Land south of Turnock Street. It did not complain about nuisance in relation to the Land immediately south of Turnock Street between Turnock Street and the southwestern drain, except that in 2000 the Council had permitted the installation of a stormwater outlet draining a supermarket and shopping centre to Turnock Street, which in turn drained to the Land immediately south of Turnock Street between Turnock Street and the southwesterly drain. It is convenient to deal with the Land north of Turnock Street separately from the Land south of Turnock Street.

North of Turnock Street

148 The focus of Gales' complaint about the Land north of Turnock Street was the effect on the drainage of stormwater runoff coming onto the Land from the north and north east of the filling of the northern drain and the lack of capacity of the 1200mm pipe that replaced it, coupled with the effect of the Turnock Street extension. The Council accepts that the construction of drainage associated with the development in the vicinity of Pearl Street served to concentrate stormwater at the Pearl Street outlet. The Council says, however, that there was no suggestion of any material increase in stormwater coming onto the Land as a result. It says that stormwater would have flowed onto the Land with or without those drainage works.

149 The Council contends that the evidence does not establish that, historically, the Land was free of inundation following heavy rainfall events. It relies on photographic evidence showing the Land's condition following significant rain. That evidence establishes that there were periods of slow drainage of the Land north of Turnock Street in 2003 and 2004, at a time when the drain to the south of the Elrond Drive culvert was blocked and other drains on the Land were inadequately maintained. The Council contends that the thrust of the evidence, particularly that of Dr Webb, was that, with adequate drain maintenance, the Land could be drained reasonably effectively, which had occurred since 2004.

150 The Council contends that as the Land has always required properly maintained drains and the drainage has been reasonably effective since 2004, there is no basis for concluding that the filling of the northern drain and the construction of the Turnock Street extension produced any material impact on the Land's condition. Accordingly, the Council asserts, the finding of the primary judge that the Council's conduct materially interfered with Gales' use and enjoyment of the Land is unsustainable.

151 The Council complains that the primary judge mischaracterised its case as being that Gales' intention to develop the Land in the future meant the Council could use it with impunity for stormwater discharge or retention in the meantime. Rather, the Council asserts, its case was that whether any alleged interference by it was unreasonable could be assessed only by reference to the use to which the Land was being or intended to be put. The Council says that while following heavy rain it would be difficult or impossible to traverse the Land on foot, the evidence did not suggest that Gales had any need or desire to do so or that it had ever been possible to do so immediately after heavy rainfall. The Council contends that before the primary judge could properly make a finding of nuisance, it was necessary for her Honour to address, and make prior findings about, how the Council's actions affected the wetness of the Land, the effect of that wetness on Gales' use and enjoyment of the Land and, to the extent that any interference with Gales' use and enjoyment of the Land was demonstrated, that that interference was unreasonable.

152 The Council says that to the extent that there are drainage problems on the Land, they do not unreasonably interfere with, and have not unreasonably interfered with, Gales' use of the Land. The Council points to the fact that Gales was not even aware of the existence of a drainage problem on the Land before 2004. It says that that is cogent evidence that the drainage problem did not cause any unreasonable interference with Gales' use and enjoyment of the Land before then. Before 2004, Gales made no complaint about interference with its use and enjoyment of the Land. The letter of 5 March 2003 was written in the course of negotiations between Gales and the Council concerning the related issues of drainage and development. The Council says that that letter made no reference to excessive wetness, but relied on bare assertions of illegal stormwater discharge. That, the Council says, suggests ignorance of any problem and thus that there was no interference at all with Gales' use and enjoyment of the Land.

153 The Council's contentions are intertwined with the primary judge's finding that Gales had in some sense tolerated the consequences of the Council's actions. The contentions ignore the primary judge's findings concerning the substantial increase in the flow of stormwater as a result of the Council's actions and the consequences that that flow had on the characteristics on the Land. Her Honour found that the characteristics of the Land changed significantly. Whether or not Gales had a need or desire to traverse the Land on foot is not to the point. The consequences of the Council's actions included that traversing the Land on foot was made significantly more difficult. Whereas previously the Land was capable of bearing quite heavy machinery, its capacity to do so was significantly changed as a result of the Council's actions. The Council's actions interfered with Gales' use and enjoyment of the Land to an extent that was not reasonable.

154 The Council disputes the primary judge's conclusion that stormwater pools and remains on the Land more often and in greater quantities than when the Land was in its natural state. The Council says that although the primary judge said that that proposition was not in issue, it was in fact not common ground and was not the focus of Gales' claim. Rather, the Council says that the Land in its natural state was very likely a swamp. It was made suitable for agricultural activities only by the creation and maintenance of drainage. However, because Gales was no longer involved in any agriculture on the Land, the drainage was not adequately maintained until the issue of the Wallum froglets emerged when the drains were cleared and extended in 2004.

155 The Council accepts that the drainage of the Land immediately north of Turnock Street was altered and made less efficient by the Turnock Street extension. However, it says that absent blockage of the drains, the differences were not such as to have any material impact on the wetness of the Land.

156 While the Council accepts that since 1994 there has been an increase in the amount of stormwater discharged onto the Land, it disputes that there was a material increase in the amount of stormwater that failed to drain away efficiently from the Land. The Council says that the 200 per cent increase referred to by the primary judge was an increase in the water delivered to that part of the Land in the immediate vicinity of the inlet to the 1200mm pipe. It says that there was no other relevant point of materially increased discharge of stormwater. While the Council accepts that there were isolated occasions when the 1200mm pipe was inadequate to deal with stormwater flows onto the Land's northern corner, it disputes that the evidence supports a conclusion that such isolated occasions were of sufficient frequency to interfere materially with the use of the Land.

157 In any event, the Council says, any drainage problems on the Land north of Turnock Street were substantially resolved in mid 2004 by the creation and clearing of table drains near the base of the Turnock Street extension. The Council takes issue with the primary judge's finding that there are still problems when the Land becomes inundated after major storm events such that the nuisance continues to the present day, if to a lesser extent in that it is confined to periods after major storm events. The Council asserts that there is no basis for suggesting that the conditions that her Honour held constituted a continuing nuisance were materially different from the conditions that have always existed on the Land or that those conditions created any material interference with the use of the Land. It says that while the construction of the Turnock Street extension served to slow the drainage of water in the area where it was constructed, that water had previously flowed into ponds south of the extension.

158 The filling of the northern drain blocked the stormwater flow path from the catchment to the north and east of the Land and prevented overland flows from that catchment to Chinderah drain and thence to the Tweed River. Thus, urban stormwater, a potential nuisance, ran onto but did not run off the Land. Between 1974 and 2009, as a result of urbanisation and the inadequacy of alternative flow paths, there was a threefold increase in the amount of stormwater discharged onto the Land. This increased the velocity and frequency of the flows discharged onto the Land. The amount of stormwater discharged from the Council's stormwater system was enormous. A 60-minute storm in 2009 would have deposited 12,807,000 litres of stormwater, which would flow onto the Land at a peak rate of 5,290 litres per second.

159 As stormwater discharged from the Council's outlets onto the Land, it travelled across the Land as surface water, as well as under it as groundwater. The stormwater gradually moved in a southwest direction to Turnock Street and then to the Elrond Drive culvert. The groundwater levels rose, supporting surface ponding or wetness for longer periods. That is to say, the Land wetted up. With elevated groundwater levels, only a little additional rainfall created ponding.

160 The Council asserts that the evidence does not support a finding that ponding on the Land after rainfall events was a new phenomenon. However, the fact that ponding was not a new phenomenon is not decisive. Ponding is one of the hydrological effects of stormwater flow coupled with inadequate drainage. Thus, the ponding that occurred was the consequence of hydrological conditions created by the increased flow of stormwater, coupled with the change in the drainage system.

161 The primary judge accepted that the blockage of the drain below the Elrond Drive culvert in 2003 was the principal cause of slow drainage and, consequently, of ponding. However, the Council says, that problem was not of its making, since it was the drain immediately to the south of the Elrond Drive culvert that was blocked, not the culvert itself.

162 The primary judge's ultimate finding of nuisance has two distinct aspects. First, untreated polluted stormwater runoff onto the Land constituted a nuisance. The principal pollutants were suspended solids, nitrogen, ammonium and total phosphorus. Secondly, irrespective of the stormwater's composition, there was a separate nuisance after major storm events. The stormwater pooled on the Land more often and in greater quantities than when the Land was in its relevant natural state.

163 The table drains did not abate nor substantially resolve the cumulative effects of the filling of the northern drain, the inadequacy of the replacement 1200mm pipe, the threefold increase in the levels of stormwater running onto the Land from the Council's drains and the inadequate drainage from the Land as a result of the construction of the Turnock Street extension. The principal cause of the ponding was not the blockage in 2003 of the Elrond Street culvert, or of the drain immediately to its south, but the inadequacy of a single culvert to cope with the extent of the flow of stormwater runoff. The entire system was inadequate.

164 By mid 2004, physical and ecological changes to the Land had occurred. Given the volume of stormwater that the Council had directed onto the Land, the clearing of the table drains merely helped to facilitate some of the visible effects of the Land's use as a retention basin. It did little to drain away the enormous volume of groundwater gradually travelling from the various outlets towards the Elrond Drive culvert. The primary judge correctly rejected the Council's contention that it was Gales' failure to maintain a table drain that caused the additional ponding.

165 The Council was guilty of nuisance by channelling large volumes of stormwater runoff onto the Land. That was an unreasonable interference with Gales' use and enjoyment of the Land, whether or not Gales intended to develop it in a way that may have obviated the nuisance by a drainage system installed as part of the development. The use of the Land as a retention basin was an aspect of the unreasonable interference. Whether Gales has suffered loss or damage that should be the subject of an award of compensatory damages is, of course, a different question.

South of Turnock Street

166 The Council says that the velocity of stormwater flowing onto the Land south of Turnock Street from the Quigan Street outlets (the Quigan Street discharge) was of no apparent relevance to Gales' use of the Land, other than through its capacity to cause erosion. However, no allegation of erosion was made in the Statement of Claim. Indeed, the Council says, Gales abandoned an allegation that stormwater outlets discharging stormwater onto the Land caused erosion and scouring.

167 The Council says that the velocity of the Quigan Street discharge was not capable of supporting a finding of nuisance without a pleaded claim, together with a finding of a related consequence that interfered with the reasonable use and enjoyment of the Land.

168 The primary judge found that the channelling of untreated polluted stormwater runoff from the Council's drains onto the Land constituted an actionable nuisance from 4 May 2004. The Council says that insofar as the reference to untreated polluted stormwater was intended to form part of the description of the nature and extent of the nuisance, there was no evidence capable of sustaining that finding. It says that the finding that the untreated stormwater contained pollutants of the kind usually found in surface water so collected was not a finding that its quality was any different from that of stormwater that would otherwise have drained onto the Land, even if the Council's system that collected the stormwater and discharged it from outlets did not exist. The Council says that the fact that stormwater runoff is of a different quality from the rainwater that falls directly onto the Land does not mean that the pollutants found in the stormwater runoff are of such a nature as to give rise to any material interference with Gales' use of the Land.

169 The Council says that while the introduction of pollutants to waterways is a matter of concern for the Council, it does not follow that the use of drains constructed prior to the introduction or implementation of water requirements, which may fail to meet current standards, results in a cause of action in nuisance for the owners of land through which the stormwater passes. Gales contends that those contentions were not put to the primary judge and that, if they had been, they could have been met by evidence. Accordingly, it says it is not open to the Council to advance them in the appeal.

170 The Council complains that the trial judge erred in relying on the Council's policy documents as evidence that the stormwater was polluted to a material degree. It says that the policy documents contained only general observations of the effects of development. However, the Council's documents are good evidence of what the Council, as the polluter, itself considered to be deleterious. The Council had the option to explain away the effect of those documents, if able to do so. It chose to lead no evidence. The source of pollutants was urban runoff from the Council's drainage system. Stormwater carrying pollutants was an actionable nuisance per se.

171 The Council complains that the relief granted by the primary judge does not reflect any finding of nuisance in the nature of excessive wetness of the Land south of Turnock Street. It says that that was because the evidence disclosed no interference of that kind. In 2004, drainage works were carried out. The Council says that that drainage work does not appear to have gone beyond routine maintenance needed to maintain a well-drained site in the area. The Council says that no witness suggested any continuing drainage problems south of Turnock Street. It says that had a problem been alleged to exist, it would have been necessary to consider the extent to which the creation of the outlets influenced the Quigan Street discharge.

172 The primary judge's findings as to the increased velocity of the Quigan Street discharge do not relate solely to erosion. The presence of pollutants in increased volumes of stormwater flowing from the Council's outlets at increased velocity led to those pollutants flooding and being widely dispersed onto the Land. Her Honour found that the Council was aware in February 2001 of the failure of a sewer gravity main due to undermining and that in May 2005, October 2007 and June 2008 Gales brought the continuing disrepair to the Council's attention.

173 The primary judge held that the disrepair of Quigan Street and the absence of energy dissipation had led to increased velocity, which adversely affected the Land. The direction of untreated stormwater runoff onto the Land was an actionable nuisance as it constituted unreasonable interference with the use of the Land south of Turnock Street.

Conclusion as to Nuisance

174 It follows that, subject to two matters, Gales has established that the Council was guilty of nuisance in directing the flow of stormwater runoff onto the Land both north and south of Turnock Street. The stormwater runoff was channelled onto the Land in greater quantities and volumes than the natural flow, having regard to the terrain of the Land and surrounding areas. That nuisance began before 19 October 1999, being the date six years before the commencement of the proceedings, and continued after that time. Gales would be entitled to an injunction to restrain the discharge of stormwater runoff onto the Land. The two matters are the statutory defences issue and the toleration issue.

Statutory Defences

175 Apart from denying that it had committed nuisance at all, the Council relied on several statutory defences provided by the Local Government Act 1919 (the LGA 1919) and the LGA 1993, as well as the Liability Act.

176 The Council's defence asserted that the approval of the Noble Park Estate development, the failure to construct alternative drainage following the filling of the northern drain and the construction and approval of the Turnock Street extension were done or omitted to be done in good faith, within the meaning of s 528A(1)(b) of the LGA 1919 and s 733(1)(b) of the LGA 1993, and that, accordingly, the Council was not liable. Section 733 is relevantly in the same terms as s 528A, which it replaced when the LGA 1993 replaced the LGA 1919. The effect of 733(1)(b) is that the Council would not incur any liability in respect of anything it did or omitted to do in good faith, in so far as it related to the likelihood of land being flooded or the nature or extent of any such flooding.

177 In relation to the Liability Act, the Council's defence asserted the following:

• By the operation of s 45, the Council was not liable to Gales, having regard to the fact that the maintenance of the Elrond Drive culvert and the 1200mm pipe under Elrond Drive is roadwork within the meaning of s 45, and if Gales suffered harm as a consequence of blockage of the Elrond Drive culvert or that pipe the Council was not aware of the condition of the culvert or that pipe when the risk of loss associated with the blockage materialised.
• In approving the Elouera Nursing Home development and the Noble Park Estate development, and in failing to seek and grant approval for construction of additional drainage to accommodate the filling of the northern drain, and in approving and constructing Turnock Street, the Council was either exercising or failing to exercise special statutory powers within the meaning of s 43A and its exercise or failure to exercise each of those statutory powers was not so unreasonable that no authority having those powers could properly consider the act or omission to be a reasonable exercise of its power or failure to exercise its power.

178 I am not persuaded that any of the provisions relied on by the Council has application in the present circumstances. The claims made against the Council are for nuisance consisting of the channelling of stormwater runoff in quantities and flow that are significantly greater and different from that that would occur if the natural terrain remained. The nuisance is not to be found in failing to insist on the satisfaction of the conditions imposed for the Noble Park Estate development. Nor is it to be found in the construction of the Turnock Street extension without sufficient drainage through the embankment. Nor is it to be found in the construction of the Elrond Drive culvert.

179 Those factors may have contributed to the circumstances that the increased flow of stormwater runoff was able to cause the changes in the Land, which were conducive of the development of the Wallum froglet habitat. However, those factors themselves did not constitute a nuisance. The statutory defences have no application to the actions of the Council in directing the flow of stormwater runoff onto the land. It was those actions that constituted the nuisance.

180 However, since detailed submissions were advanced in relation to the statutory defences I propose to say something about them. The primary judge addressed them and found that they were not applicable.

Section 733(1)(b) of the LGA 1993

181 Section 733 of the LGA 1993 would, if applicable, afford a true defence, in the sense that a defendant relying on it would have the onus of proving its good faith as an attribute of its negligence. A defendant can only rely on the defence once it has identified the thing that it did or omitted to do in good faith. Further, good faith is more than honest ineptitude. There must be a real attempt to exercise a relevant power (see Mid Density Developments v Rockdale Municipal Council (1993) 44 FCR 290 at 300).

182 The primary judge concluded that the Council's conduct in retaining Mr Findlater, who represented the Noble Park Estate developer, the very party in breach of the development consent conditions, was "quite extraordinary". Her Honour considered that acceptance of Mr Findlater's recommendation that Gales should be the party to bear the burden of the consequences of the breach of the development consent conditions was "even worse". Her Honour considered that to accept that recommendation and impose it on Gales, without informing Gales why or offering Gales any form of relief or compensation, was extremely high-handed and could not be described as acting in good faith. Her Honour found that the Council failed to disclose the reason for its decision to use the Land as a retention basin when it entered into the agreement to buy part of the Land and construct Turnock Street. Her Honour also found that it was not until Gales' representatives had had access to the Council's files that Gales became aware that the northern drain had been filled, in breach of the development consent conditions.

183 The primary judge found that Gales approached the Council in a conciliatory fashion to see if they could find a solution together. Rather than accept that approach, the Council called for a public apology and payment of large amounts of costs, at a time when the Council was still using the Land as a retention basin at no cost to it. Her Honour did not consider that that conduct could be described as being in good faith. Her Honour was not satisfied that the Council's conduct in "imposing the retention basin" on Gales was done in good faith.

184 The Council complains that the primary judge's description of Mr Findlater's proposal to put aside an area of one hectare of the Land as being "really a suggestion that the Land be used as a retention basin" was not a comprehensive description of Mr Findlater's proposal. The Council says that the proposal required that up to one hectare of the Land be set aside for that purpose in any future development but that such use would count towards open space requirements and be funded through a s 94 plan. The Council contends that there was no basis in the contents of the proposal or the associated communications for concluding either that the Council was or ought to have been aware that, pending the filling and development of the Land, the 1200mm pipe would not provide sufficient drainage or that, without a road in the location of Turnock Street, the drainage of the Land following flood events would materially restrict the use of the Land by Gales.

185 The primary judge drew the inference from correspondence of November 1996 from the Council to Mr Hill and the Bowling Club that the Council had concluded that until the Land was filled, the Land would be used as a retention area for flood drainage. The Council complains that the fact the Council was aware that the Land would provide a retention area in the event of flood until it was filled provides no support for the further conclusion that the Council was aware that flood events would be of sufficient frequency and impact to have a material effect on Gales' enjoyment of the Land. The Council asserts that even well after the construction of Turnock Street in 1997, it had not become plainly apparent to Gales or to the Council that the capacity of the drainage under the Noble Park Estate in major storm events, combined with the changes in the flow of stormwater arising from the construction of Turnock Street, had given rise to any significant drainage problem. In the course of negotiations concerning the drainage requirements to be imposed on the proposed development of the Land, no mention was made of any such problem. Accordingly, the Council says, the suggestion that the Council's actions in creating the nuisance were in bad faith, in the sense that it was aware that it was creating a material burden for Gales in advance of any development, is unsustainable. The Council says that absent such awareness, or any evidence suggesting that the Council ought reasonably to have foreseen the problems that allegedly emerged, it is difficult to envisage how any nuisance arising from the Land's pre-development condition could be said to result from actions of the Council not taken in good faith.

186 The Council contends that the primary judge's formulation of Gales' claim demonstrates an erroneous approach in relation to the issue of the filling of the northern drain. Her Honour described the claim as being that the Council permitted the filling of the northern drain by 1995 and failed to create an adequate alternative drainage route. Condition 43 of the development consent required the construction of a drainage overflow path along the northern boundary of the Noble Park Estate. Her Honour concluded that condition 43 was imposed in circumstances where the Council knew that the northern drain would be filled and "no doubt" saw condition 43 as a necessary step to facilitate proper drainage of the Noble Park Estate and the surrounding properties.

187 The Council says that there was no basis for such a conclusion. It accepts that it saw the establishment of a trunk drain connecting the Land to the Chinderah drain in that location as an option that should be preserved, pending consideration of amendment of DCP 9. However, the Council says, it does not follow that it was necessary. Further, that other options less burdensome on the Noble Park Estate developer but more burdensome on Gales existed does not suggest bad faith or unreasonableness. Thus, the Council says, it needed to balance developers' contributions towards satisfying drainage requirements to which their developments created: imposing a share of the burden on Gales was not inappropriate, let alone an indication of bad faith.

188 The Council contends that the primary judge's conclusion that its actions in imposing conditions on further negotiations indicated a relevant lack of good faith is also unsustainable. It complains that her Honour failed to note the context in which the apology was sought. Allegedly, defamatory remarks had been published about a Council officer. The Council says that such a demand does not show a lack of good faith. The Council asserts that there is no evidence to support a finding that the Council was deflected from its duties by such a collateral matter. In any event, it says, good faith must be proved as an attribute of the relevant act or omission that would otherwise ground liability in nuisance. The Council says that its conduct after 2004 bore no relevant connection to the acts of approving the Noble Park Estate drainage system in 1993 or the approval and construction of Turnock Street in 1997. Further, it says, since drainage was restored to the Land in 2004 there has been no drainage problem that could justify the expenditure of millions of dollars of ratepayers' funds.

189 The primary judge considered that the Council's conduct after the nuisance was brought to its attention in 2004 was also lacking in good faith. Accordingly, her Honour concluded that the Council did not have the protection of the provisions of s 733 of the LGA 1993. There was no challenge to the findings set out above, upon which her Honour based that conclusion. I do not consider that any error on her Honour's part has been demonstrated.

190 Gales also contends that the Council's actions could never be considered to be in good faith, within the meaning of s 733 of the LGA 1993, because they were unlawful, in that they contravened s 120 and s 142A of the Environment Protection Act. Those provisions prohibit the pollution of waters and land respectively and carry the possibility of criminal prosecution in the event of breach. The primary judge accepted that the stormwater coming onto the Land contained pollutants. Gales complains that, having reached those conclusions, her Honour failed to apply them when she came to consider Gales' submissions about the relationship between s 120 and s 142A of the Environment Protection Act and the statutory defences pleaded by the Council. In the light of the conclusion I have reached above, it is not necessary to deal with this contention.

Section 45 of the Liability Act

191 The Council contends that to the extent that a nuisance was created through a blockage of the Elrond Drive culvert, it is protected from liability by s 45 of the Liability Act. Under s 45, a roads authority is not liable in proceedings for civil liability to which the relevant part of the Liability Act applies, for harm arising from a failure of the authority to carry out road work, unless at the time of the alleged failure the authority had actual knowledge of the particular risk, the materialisation of which resulted in the harm. Carrying out roadwork includes carrying out any activity in connection with the construction, erection, installation, maintenance, inspection, repair, removal or replacement of a roadwork.

192 The primary judge accepted that the drainage system maintained by the Council was not roadwork and that the Council was well aware that it had decided to use the Land as a retention basin and, as such, had actual knowledge of the risk, at the time, of the increased volumes of untreated stormwater on the Land. The Council contends that the primary judge erred in finding that the failure to maintain or modify the Elrond Drive culvert was not roadwork. Roadwork is defined to include any kind of work, building or structure that is constructed, installed or relocated on or in the vicinity of a road for the purpose of facilitating the use of the road as a road. The drainage culvert, it says, facilitates the use of the road as a road (Council of the City of Liverpool v Turano [2008] NSWCA 270 at [182] (Turano)), and drainage works in the nature of a culvert under a road are road works for the purposes of the provision.

193 I would be disposed to agree that the Elrond Drive culvert was not roadwork within the meaning of the Roads Act, because its construction was undertaken by reason of the Council's duties as a drainage authority under the 1993 LGA and not for the purpose of facilitating the use of the road as a road. The Council managed its stormwater system separately from its road programme. Drainage culverts, as distinct from table drains, were not funded from the roads budget or managed as part of the road. The fact that parties in other proceedings (Turano at [182]) accepted that the works in such proceedings were road works has no bearing in the present circumstances.

194 Even if the relevant works involve the carrying out of roadwork as defined, s 45 can only apply to protect the Council's actions in its capacity as roads authority, as distinct from actions in the performance of its separate functions as a drainage authority. Although the Council is a roads authority within the meaning of s 45, s 45 does not operate to exclude the liability of a roads authority unless that liability is based on the authority's failure to carry out roadwork or to consider carrying out roadwork, as a roads authority. Statutory immunity, such as that conferred by s 45, must be construed strictly (Australian National Airlines Commission v Newman [1987] HCA 9; 162 CLR 466 at 471). The Council's actions in relation to the design of the drainage system, the incapacity of the 1200mm pipe and the inadequacy of the Elrond Drive culvert do not involve a failure to carry out roadwork.

Section 43A of the Liability Act

195 Section 43A applies to proceedings for civil liability to which Part 5 of the Liability Act applies, to the extent that the liability is based on an authority's exercise of, or failure to exercise, a power conferred by or under a statute that is of a kind that persons generally are not authorised to exercise without specific statutory authority. For the purposes of such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability, unless it was so unreasonable, in the circumstances, that no authority having the power in question could reasonably consider the act or omission to be a reasonable exercise of, or failure to exercise, its power. The primary judge assumed that s 43A applied to the consideration of whether the Council took reasonable steps to eliminate the nuisance. The Council says, however, that the reasonableness of its response must be assessed in light of what it ought to have understood the nature and extent of any problem to be.

196 The application of s 43A is limited to proceedings for civil liability to which Part 5 of the Liability Act applies. However, it applies only to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power conferred on the authority. Assuming a special statutory power is involved, the anterior question is whether the proceedings were proceedings for civil liability, in which the liability was based on the Council's exercise of, or failure to exercise, a special statutory power conferred on it. A clear distinction is drawn in the legislation between a liability that is based on the exercise of, or failure to exercise, a special statutory power, and an act or omission involving an exercise or failure to exercise such a power (see Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; 74 NSWLR 102 at 173).

197 Gales' claims are not based on any allegation that the Council failed to exercise a particular statutory power or that it exercised a particular power negligently or unreasonably. Rather, Gales sues in nuisance, not for breach of statutory duty, in relation to the continuing operation of the Council's stormwater drainage network. It is a misconception to suggest that Gales' claim is based on the Council's exercise of any particular statutory power. Accordingly, s 43A has no application to the proceedings.

Toleration by Gales

198 In its defence, the Council asserted that Gales acquiesced in the Council's acts alleged to constitute nuisance and was not entitled to injunctive relief, or to damages or equitable damages or any relief as claimed, and was estopped from claiming such relief by reason of such acquiescence. The Council alleged that the acquiescence consisted in Gales:

• consenting to and permitting the development of the Elouera Nursing Home;
• consenting to and permitting the development of the Noble Park Estate;
• purchasing the Land with knowledge of the Quigan Street outlets;
• permitting the construction of a stormwater outlet on Turnock Street near part of the north eastern boundary of the Land;
• consenting to the design and construction of Turnock Street;
• permitting the construction of a stormwater outlet and gutter diversion on the corner of Quigan Street and Boomerang Street;
• constructing or permitting the construction of a stormwater outlet near the Land carrying stormwater from Pearl Street; and
• consenting to and permitting the construction of a stormwater outlet near the northern corner of the Land.

199 Apart from that pleading and a general denial of nuisance, there is no allegation in the defence that Gales was precluded from alleging that the Council's conduct constituted nuisance before 2004, simply because Gales tolerated the channelling of stormwater runoff onto the Land and that it was only after 2004 that the increased wetness of the Land constituted an unreasonable interference with Gales' enjoyment of the Land. While the Council's estoppel allegation pleaded in its defence was based on Gales' actions listed above, the Council did not plead an estoppel based on the failure of Gales to complain or by reason of its tolerating interference.

200 Her Honour observed that, consistently with the notion of give and take, a neighbour might tolerate an interference with the enjoyment of land for various reasons, including perhaps a need to engender a friendly neighbourly relationship. Her Honour said that an indicium of toleration is a lack of complaint and that toleration may be taken into account as evidence of there in fact being no unreasonable interference with the enjoyment of land. Her Honour held that a neighbour would not be entitled to claim damages for an interference tolerated before a complaint was made or, as her Honour put it, in respect of which there was "acquiescence".

201 The acts of nuisance established by the evidence do not fall within the "give and take" principle. While a neighbour may accept the occurrence of certain minor disturbances as a fact of life, the inundation of land as a result of an inadequate drainage system is an entirely different matter. It was inappropriate to transpose the notion of "give and take" into the circumstances involved in the present case.

202 Given that the question of whether there be unreasonable interference is to be determined objectively, it would be inconsistent if a complainant's actual conduct in tolerating such interference were determinative. That unreasonable interference with the enjoyment or use of land is tolerated does not in itself make the interference any less unreasonable. Whether such interference is unreasonable is to be determined by reference to the standards of reasonableness according to the ordinary usages of a society. In the circumstances of this case, a disinterested member of the public could conclude only that the Council's interference with the use and enjoyment of the Land was unreasonable, irrespective of whether Gales was prepared to tolerate or accept that interference.

203 A plaintiff's toleration, as the primary judge observed, may be an indicium that any interference is not unreasonable interference. However, it is not determinative. Interference may be unreasonable, both objectively and subjectively, even if a plaintiff tolerates it. I consider that the primary judge erred in treating Gales' toleration as determinative of the issue of unreasonable interference. While toleration may properly be taken into account in determining whether any interference is unreasonable, it is neither a necessary nor sufficient condition for a finding of unreasonable interference.

204 A further difficulty with the primary judge's analysis is that it appears to impose an onus on Gales, as the plaintiff in a nuisance action, to notify the defendant Council of a change in approach, such that the nuisance would only become actionable once the previous attitude of toleration ceased and that cessation was communicated to the defendant. A plaintiff's failure to inform a defendant as to a change in approach or attitude might found an estoppel, as a defence to a nuisance claim, but only if the defendant relied to its detriment upon the lack of complaint. As mentioned above, while the Council's estoppel allegation pleaded in its defence was based on Gales' actions listed above, the Council did not plead an estoppel based on the failure of Gales to complain or by reason of its tolerating interference. The primary judge's reasoning appears to make a complaint by a prospective plaintiff a necessary ingredient in a cause of action for nuisance. However, a plaintiff's right to sue does not depend on prior complaint. Nuisance is actionable merely upon proof of unreasonable interference with use and enjoyment of the plaintiff's land.

205 The terms of the letter of 5 March 2003 do not support a proposition that Gales had previously decided to take no action in relation to the drainage problems created by the Council. Rather, it simply said that while no complaint had been made previously, having now investigated the problem Gales proposed to do something about it by requiring the Council to identify immediately all points of illegal discharge of stormwater and to take measures to prevent that discharge. The reasons for the need to take action were made clear, namely, that it had become apparent recently that the Council had failed to give proper consideration to the consequences of the unlawful discharge of stormwater onto the Land. The terms of the letter do not bespeak toleration of a known problem for the sake of peace with the Council, while the parties sought to address the planning issues in a consensual manner, as her Honour suggested. Accordingly, the letter should not be construed as some kind of tacit admission of a previous conscious decision by Gales to "sit on its hands".

206 The Council contends that the distinction that Gales seeks to draw, between a conscious decision to take no action before March 2003 and a decision first made in March 2003 to take action as a result of recent investigation, is irrelevant. While that distinction may be of some relevance to a finding that a defence of consent had been made, it is, the Council contends, irrelevant to the consideration of the reasonableness or otherwise of its failure to undertake drainage works to reduce the time required to drain the Land following severe rain events. The Council says that for so long as it was unaware that the slow drainage of stormwater was regarded by Gales as an unwelcome interference, it was not unreasonable for the Council to refrain from undertaking the expense of additional interim drainage works, pending development of the Land. The Council asserts that the fact that Gales failed to perceive any interference in its use and enjoyment of the Land up until 2003 establishes the absence of any such interference.

207 The Council points out that even the letter of March 2003 made no reference to interference of the enjoyment of the Land by Gales. Rather, it contained a demand that all discharges of water onto the Land cease within 90 days, a demand, that the Council says Gales must have known could not be satisfied. The letter was written, the Council asserts, in the context of a long-running attempt to negotiate development approvals and changes to local drainage plans, which would reduce the impact on Gales of a drainage regime contemplated by the then form of DCP 9, which came into force in 1993, and which included a large drainage reserve through the Land. The Council characterises the letter of March 2003 as a manoeuvre in a bargaining process, in which one would expect that Gales would raise any perceived interference with its use of the Land.

208 The possible significance of there being no reference in the letter of 5 March 2003 to any unreasonable interference with Gales' enjoyment of the Land was not put to any of the witnesses called by Gales. Nor was it put to any of the witnesses that, before that letter, Gales was prepared to permit the alleged unlawful discharge of concentrated stormwater flows onto the Land. Finally, the proposition that Gales' attitude was that it would tolerate the presence of the stormwater runoff on the Land while discussions took place between representatives of the Council and of Gales, in the joint endeavour of achieving a sensible and workable plan for the drainage of the Land, was also not put to the witnesses.

209 The Court should be reluctant to make findings of knowledge and motive on the part of a party without that party's witnesses being given the opportunity to deal with the imputation of such knowledge and motive. There is a degree of inconsistency between the primary judge's findings, that Gales had been prepared to tolerate the interference, and the unchallenged evidence of the witnesses called by Gales, that they were unaware of any drainage issues until late 2001 at the earliest. Had the matter been raised by her Honour during the hearing, Gales could have dealt with it by calling further evidence.

210 The Council does not suggest, and says that it has never suggested, that Gales was aware of a drainage problem at any time before the discovery of the blocked drains in 2003. The Council asserts that that is because, until that time, there was no problem and that that is reflected in Dr Webb's analysis of the extent and frequency of ponding.

211 Gales contends that the primary judge's finding, that up to 5 March 2003 it was prepared to accommodate stormwater on the Land without complaint, presupposes that Gales knew of the extent of the drainage issues. However, her Honour found that the Council had concealed the cause of the problem, being the filling of the northern drain without satisfying the conditions of the development consent for the Noble Park Estate. Gales asserts that at no stage did the Council inform it that the drainage problems on the Land were the result of the filling of the northern drain and the replacement of the northern drain with the inadequate 1200mm pipe.

212 As her Honour found, it was not until Gales had access sometime later to the Council's files that it became aware that the northern drain had been filled in breach of the conditions of the development consent. Gales contends that for its toleration to have any legal consequences it must have had knowledge, not only of the consequences of the interference but also of the acts of nuisance that caused it. It says that in the light of the evidence, her Honour could not have been satisfied that Gales had acquired that knowledge at any time before March 2003. Further, even if Gales were fixed with knowledge from August 2001 onwards, it would not be precluded from maintaining an action in nuisance simply because it had made no formal complaint to the Council. Gales was entitled to undertake necessary steps to investigate the problem and then to make complaint once the Council failed to address its concerns.

213 It is important to draw a distinction between the nuisance, on the one hand, and the damage occasioned by the nuisance, on the other. The nuisance was the channelling of stormwater runoff onto the Land. The damage was the wetting up of the Land. The channelling was an unreasonable interference from when it began. The northern drain apparently abated the nuisance. When it was filled, without adequate replacement, the nuisance was exacerbated, because the stormwater runoff from the northern corner outlets no longer flowed away from the Land into the northern drain, but instead flowed across the land to the south.

214 The primary judge ought to have held that the Council was liable for nuisance from 19 October 1999, being the date that is six years before the commencement of the proceedings. Whether and when that nuisance occasioned damage to Gales is a different question.

Damages and Relief

215 The relevant nuisance was the channelling of stormwater runoff in greater quantities and in greater volumes than would flow naturally. That of itself did not cause the damage complained of, being the establishment of a Wallum froglet habitat. That resulted from the combination of the inadequacy of the 1200mm pipe that replaced the northern drain, the construction of the Turnock Street extension, and the inadequacy of the Elrond drive culvert. The channelling of water at the northern end of the Land had occurred for many years prior to 1999. The ponding was the result of construction of the Turnock Street extension without adequate provision for stormwater to flow underneath or through the embankment.

216 The question is whether the Council could reasonably foresee that the consequence of continuing the nuisance, after the construction of the Turnock Street extension, would be that a habitat for a protected species might be established. The primary judge held that it was not. Gales contends that the primary judge erred in so concluding.

217 The Council, on the other hand, contends that her Honour erred in the award of damages made by her Honour. The Council complains about the award of damages for:

• the cost of some of the drainage works carried out in 2004;
• additional drainage required as a consequence of the limited capacity of the 1200mm pipe; and
• a proportion of the cost of treating stormwater entering the Wallum froglet habitat required by the conditions of consent for the filling of the Land.

Diminution in Value because of Wallum Froglets

218 As indicated above, foreseeability limits damages in nuisance, whether the conduct constituting the nuisance be intentional or negligent. As a result, Gales must demonstrate that any damage that it has suffered because of the Council's nuisance was reasonably foreseeable by the Council.

219 Gales' complaint is that the Land was ripe for urban development and the only impediment was the effect of the inundation, which led the Land and Environment Court to impose a condition on development approval that Gales create a Wallum froglet precinct and construct a large channel to drain stormwater, including a culvert to facilitate movement of Wallum froglets. It also had to agree to special measures to drain the Land before fill emplacement and to design a Wallum froglet precinct to maintain water quality.

220 The highest and best use of the Land was for residential development. The area set aside as the Wallum froglet precinct adjoins Turnock Street, which is the entry road to the surfside village of Kingscliff. Gales says that if it had not been set aside from development for the Wallum froglet precinct, part of the Land could have supported medium-density housing, for which it was suitably zoned. Apart from the diminution in value of that part of the Land, Gales complains that development costs escalated as result of the inundation and its effects.

221 Gales' case at first instance was that the stormwater inundation transformed the Land's physical and biological characteristics. The inundation by stormwater caused changes to vegetation and water resources, as a consequence of which predominately dry land became an ephemeral wetland. Gales says that the vegetation changes were caused by the wetting up of the Land and created a habitat suitable for the Wallum froglet. The wetting up, it says, was the dominant factor in the creation of the habitat.

222 Occasional ponding was necessary for the establishment of a habitat for Wallum froglets. Whether a colony becomes established depends upon the frequency and duration of ponding and the times of the year at which it occurs. Ponding is one of the hydrological effects of stormwater flow coupled with inadequate drainage. Thus, Gales says, the persistence of the colony of Wallum froglets was the consequence of the hydrological conditions necessary to sustain it, created by the increased flow of stormwater.

223 Gales asserts that it was foreseeable that different species would prefer the wetter habitat. One such species was the threatened Wallum froglet, enabling it to sustain a local population. That, in turn, triggered the statutory requirement for more vigorous environmental assessment and, in practical terms, a need to design future development around the population of Wallum froglets so as sustain the population rather than remove it. Gales says that it was not suggested at first instance that it had any other option but to take such steps.

224 Gales relied on three propositions at first instance as follows:

• The long-term physical change of the Land, by raising groundwater levels and increasing surfacing ponding, was an inevitable consequence of inundation and detention of stormwater.
• That forced changes in habitat, such as increasing the densities and distribution of wetland vegetation, and reducing the ephemerality of surface water ponding, enabled the Wallum froglet to breed and establish a sustainable population.
• The Council knew that the Wallum froglet did not inhabit the Land before the inundation, knew of the presence of the Wallum froglet from studies it had obtained of neighbouring land before the Wallum froglet had colonised the Land and knew of the capacity of the Wallum froglet to colonise new areas of suitable habitat from various studies that identified the habitat requirements of the Wallum froglet, and from its general knowledge and experience as the regulator of development in its area.

225 Gales complains that while the primary judge accepted the first two propositions, her Honour did not apply uncontested evidence in determining whether the Council in fact knew of the presence of the Wallum froglet and the likelihood that it would colonise the Land. Nor did her Honour apply that evidence in determining whether a reasonable council, with the experience and knowledge of environmental processes in its area that a regulator of development was likely to have, should have foreseen that changes to the ecology created the risk that development would be impeded, not necessarily by the Wallum froglet in particular (although the evidence supported its foresight), but by a class of threatened species that might have colonised suitable habitat.

226 Gales relies on the statutory context in support of its contentions as to the foreseeability of the establishment of the colony of Wallum froglets. It asserts that the relevant period for considering the Council's foresight is from 1996, when the Council concluded that until it was filled, the Land would be used as a retention area for stormwater, until 2003, by which time there was a viable population of Wallum froglets on the Land. During that period, private land development was controlled primarily by Part 4 of the Planning Act. The Council was responsible for the administration of the development control provisions of Part 4. On land where development consent was not required, such as some road and drainage works, the Council was a self-assessment authority under Part 5 of the Planning Act. Where Part 5 applied, s 111 required the Council to monitor constantly the likely impacts of its drainage activities on the environment and, in particular, whether there was likely to be a significant effect on threatened species and their habitats. That obligation applied notwithstanding the provisions of any other act, including the Liability Act.

227 The Planning Act had been modified in 1995 by the Threatened Species Act. The Threatened Species Act repealed the Endangered Fauna (Interim Protection) Act 1991, which introduced the current system of classification of threatened species by a scientific committee independent of the political process and the requirement that development decision makers, and applicants for consent, must consider the likely impact of a proposed development on threatened species and their habitat. If a proposed development was likely to have a significant impact on a threatened species, or the habitat of the species, a species impact statement was required. A higher level of assessment was required and consent to the development could not be granted without the concurrence of the Director General of National Parks and Wildlife. In relation to Part 5 activities, s 111 and s 112 of the Planning Act were amended to insert threatened species' triggers. The duty to examine and consider potential impacts on species and their liabilities had become a prerequisite of environmental law by 1999. Those obligations were reinforced by the creation of a criminal offence of damaging threatened species' habitat without relevant consent or approval, for which serious penalties were imposed by s 118D of the National Parks Act.

228 Under s 5(a)(vi) and (b), an object of the Planning Act is to protect and conserve threatened species and their habitats, and to share responsibility for environmental planning between the different levels of government in the State. In administering Parts 4 and 5 of the Planning Act, the Council was required, by s 5A, to take into account the lifecycle, habitats, population viability, risk of extinction, habitat modification and the long-term survival of threatened species, in order to determine the level of significance of likely impacts. Gales asserts that the Council was under a highly specific obligation to examine and consider such matters in order to predict or foresee the consequences of its actions, yet the primary judge found that those matters were not reasonably foreseeable. Section 79C relevantly required the Council to consider the likely impacts of a development proposal, including environmental impacts, on the natural environment. Section 5A specifically nominates s 79C, as well as s 111 and s 112, as provisions to which it applies. The Council was also required to consider the impact of a development on threatened species and their habitats in determining whether a species impact statement should accompany a development application or should have been obtained before undertaking an activity under Part 5. Under s 79A, the Council was also required to advertise a special category of development, known as threatened species development, and form an opinion as to whether that development was likely to affect threatened species or their habitats significantly.

229 Section 5A of the Planning Act relevantly provides that, for the purposes of the Act and, in particular, the administration of s 78A, s 79C and s 112, certain factors must be taken into account in deciding whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats. The factors include the following:

• In the case of a threatened species, whether the lifecycle of the species is likely to be disrupted, such that a viable local population of the species is likely to be placed at risk of extinction.
• In relation to the regional distribution of the habitat of a threatened species, population or ecological community, whether a significant area of known habitat is to be modified or removed.
• Whether an area of known habitat is likely to become isolated from currently interconnecting or proximate areas of habitat for a threatened species, population or ecological community.
• Whether a threatened species, population or ecological community, or their habitats, are adequately represented in conservation reserves, or other similar protected areas, in the region.
• Whether the development or activity proposed is of a class of development or activity that is recognised as a threatening process.
• Whether any threatened species, population or ecological community is at the limit of its known distribution.

230 Under s 78A, a development application must be accompanied by a species impact statement in accordance with the Threatened Species Act if the application is in respect of development on land that is, or is a part of, critical habitat or is likely to affect significantly threatened species, populations or ecological communities or their habitats. Under 79B(3), development consent cannot be granted for development that is likely to affect significantly a threatened species, population or ecological community or its habitat, without the concurrence of the Director General of National Parks and Wildlife. Under 79C(1)(b), a consent authority, in determining a development application, is to take into consideration the likely impacts of that development, including environmental impacts on both the natural and built environments, social and economic impacts in the locality.

231 Under s 111, a determining authority, in its consideration of an activity, must, notwithstanding any other provisions of the Planning Act or of any other act, examine and take into account, to the fullest extent possible, all matters affecting or likely to affect the environment by reason of that activity. Under s 112(1B), a determining authority must not carry out an activity, or grant an approval in relation to an activity, being an activity that is in respect of land that is, or is a part of, critical habitat, or is likely to affect significantly threatened species, populations or ecological communities or their habitats, unless a species impact statement has been prepared in accordance with the Threatened Species Act.

232 Gales contends that the obligation under s 5A to take into account the various factors specified could not be discharged properly by the Council without an understanding of the biology and ecology of threatened species and their habitats. The Council recognised that and informed itself by commissioning a succession of studies, culminating in the Tweed Vegetation Management Plan 1999 (the Vegetation Management plan), which involved a detailed survey of, amongst other things, the Land and the classification of its vegetation communities. The Vegetation Management Plan made the point that it was important to understand the consequences for habitat quality of drainage and water table changes. Thus, Gales says, the legislation not only protected individuals of a species, but also their populations and habitats. Habitat means an area or areas occupied, even if periodically or occasionally, by a species, population or ecology community. It includes any biotic or abiotic component. Therefore, habitat includes not only vegetation but also edaphic characteristics, such as soils, aquifers and water resources.

233 Whether the Council had such knowledge available to it, it was charged with the administration of the provisions described. Gales says that, acting reasonably, the Council could not have discharged its functions without acquiring knowledge of such matters. Indeed, Gales asserts, the Council did in fact acquire such knowledge. It says that foresight of the existence of, and consequences of land disturbance on, threatened species and their habitats, was at the heart of the development decision making functions of the Council and its management of the drainage systems.

234 Following the commencement of the LGA 1993 on 1 January 1994, all councils were part of a framework for environmentally responsible local government in New South Wales and were required to have regard to the principles of ecologically sustainable development in carrying out their responsibilities. That was also a requirement when exercising functions under the Planning Act. Ecologically sustainable development principles required the Council to exercise precaution to prevent environmental damage, evaluate carefully how to avoid that damage, assess the risk- weighted consequences of options and conserve biological diversity and ecological integrity. All of those required foresight.

235 Thus, Gales says, the Council was obliged to manage, develop, protect, restore, enhance and conserve the environment of its area properly, in a manner consistent with the principles of ecological sustainability. Gales asserts that the Council could not have done any of those things without an understanding of the environment and the factors that cause environmental changes. The Council was not just the primary decision maker about matters involving threatened species where foresight was of the essence. It was the sole decision maker. For that reason, the Council informed itself by mapping vegetation and habitats, including the Land, and analysing its conservation significance and opportunities for restoration in 1999.

236 No evidence was led by Gales to establish that costs associated with developing the Land escalated as a result of the inundation and its effects, apart from evidence of the additional cost associated with the establishment of the Wallum froglet precinct. While there was evidence in general terms that the cost of the drainage that will be required when the Land is filled will be greater than would have been the case had the 1200 mm pipe had capacity to deal with severe storm events, the additional work was neither identified nor quantified.

237 There was no error in the primary judge's conclusion that the Council was only liable for losses that were a foreseeable consequence of any nuisance and that the establishment of a viable population of Wallum froglets north of Turnock Street was not reasonably foreseeable, in the requisite sense. While the Council accepts that Gales' three propositions outlined above reasonably reflect Gales' arguments, it says that they do not address the requirements of foreseeability. The Council accepts that it is arguable that the wetting up of the Land, by increasing the water table level and consequently surface ponding, was a consequence of the Council's actions. However, the Council asserts that it is a manifest overstatement to suggest that it could be regarded as inevitable at the time of the acts complained of. It says that there have been myriads of intervening events that contributed to the changes north of Turnock Street, including periods of high rainfall and a deterioration of drains on the Land. The Council says that even if it could be contended that increased wetness resulting from slower drainage, following heavy rainfall events, was a foreseeable consequence of the alleged defaults on its part, the conditions needed for the establishment of a viable population of Wallum froglets were a great deal more specific.

238 There was no evidence to suggest that anyone ought reasonably to have regarded as likely, at the time of the Council's impugned conduct, the possibility that the Wallum froglets would colonise new territories. There was no evidence to suggest that "mass migration of Wallum froglets, or froglet population explosions", to use the language of the Council's submissions, were recognised occurrences. Nor was there evidence to suggest that migration of Wallum froglets or froglet population increase were recognised occurrences. Further, there was considerable lack of understanding amongst the experts as to the requirements for the survival of the Wallum froglet. The status of the Wallum froglet, as a threatened species, suggests that it might have been thought that the establishment of further colonies would be very difficult to achieve.

239 The proposition that a reasonable Council should have foreseen that changes to the ecology created the risk that development would be impeded by a class of threatened species that might have colonised suitable habitat fails to address the complexities recognised by the primary judge. Her Honour considered that the complexity of the problem was illustrated by the consideration of the species identified in the fauna and flora studies prepared in connection with the Land.

240 In the First Report of 1994, the threatened species included a broad range of avifauna, mammals and amphibians recorded in the localities. Endangered fauna possibly occurring on the Land included the osprey, white-eared monarch, black-necked stork, black flying fox and the Queensland blossom bat. The Second Report of 1996 identified many different threatened faunal species on or near the Land. That complexity was exacerbated by the differing opinions that were provided to the parties during the 1990s. Mr Warren expressed the view in 1994 that it was possible, though unlikely, that the Land contained Wallum froglets. Mr Warren said that if they were on the Land, it would be most likely that they would be found in the wet areas associated with the paperbark forests. In 1996, Woodward-Clyde said that the Wallum froglets were most likely to occur along the drain to the south of the roundabout, where a number of other frogs were recorded. In 1999, Mr Warren expressed the view that they would be restricted to the small areas of low-lying paperbark vegetation in the paperbark swamp to the south of the Land.

241 Gales has not identified what is meant by the class of threatened species that might have colonised suitable habitat or, consequently, what is meant by suitable habitat. Clearly enough, different threatened species require different habitats. It would not be reasonable to suggest that activity involving any change of habitat likely to be conducive to the survival of any threatened species, such as planting trees, should not be undertaken in the vicinity of land otherwise suitable for development.

242 The Council accepted, as a potential solution to the limited capacity of the 1200mm pipe, the proposal that the Land not be filled without the establishment of a retention basin. If the Council was obliged to take care to avoid habitat changes as alleged by Gales, it was the impact upon habitat of water passing through the Land to the drain to the south, when the capacity of the 1200mm pipe was exceeded, that ought to have been considered by the Council, not the impact of a retention basin.

243 The scope and importance, in the performance of the Council's role as a consent authority, of duties associated with the protection of endangered species, does not advance Gales' argument that the risk that the development might promote the survival of Wallum froglets was foreseeable. The fact that the Council was required to have careful regard to the impact upon endangered species of proposed developments does not bear on the issue of whether the conditions amenable to the establishment of a Wallum froglet population were known, or ought to have been known, by the Council, or whether the Council ought to have recognised that the creation of a habitat conducive to the establishment of a Wallum froglet colony was reasonably foreseeable as a consequence of the conduct about which Gales complains.

244 The Council discharged its obligation to protect threatened species by requiring or commissioning the production of expert reports. No basis was established for asserting that the Council itself possessed expert knowledge of the habitat requirements of every threatened species known to inhabit the Council's area. It would be unreasonable to expect that of the Council. Assuming that the establishment of a significant and viable Wallum froglet population north of Turnock Street ought sensibly to have been regarded as likely, nothing in the various reports that were obtained in the period from 1992 to 2002 said anything that would be calculated to put the Council on notice of that fact. To impose an obligation on a local authority to prevent any development that may interfere with the survival of threatened species would impose intolerable and wholly unreasonable burdens on councils. That is particularly so in light of their responsibilities under the various statutes outlined above.

245 Gales contends that the scope of the primary judge's factual enquiry was erroneously confined and that it did not take into account what a reasonable council in the Council's position would have foreseen, having regard to the statutory framework described above. Gales complains that the primary judge found that an invasion of a colony of Wallum froglets was not reasonably foreseeable and that that is the very loss in question and the precise manner of its occurrence. That, it says, should not be the test of what damage should be foreseen. Gales complains that her Honour impermissibly determined what was foreseeable based on hindsight reasoning, rather than reasoning from the status quo ex ante. It says that, instead, her Honour should have postulated the kind of damage and the general manner of its occurrence. A defendant will be liable for any type of reasonably foreseeable damage, even in the most unusual case, unless the risk is so small that a reasonable person would, in all of the circumstances, feel justified in neglecting it. Gales says that a defendant takes the plaintiff and the plaintiff's land in its existing condition and cannot complain that the defendant's unreasonable interference causes more damage than expected because the land is especially vulnerable. It says that the defendant is liable, even if the damage was much greater in extent than was foreseeable.

246 Gales contends that the primary judge ought to have considered whether it was foreseeable that stormwater inundation would cause physical and ecological changes to the Land, which would impede its future development and lessen its value. What should have been foreseen was that the Land would become habitat for moisture-loving species, including threatened species, and that filling the Land would remove that habitat unless enough of the Land was preserved to sustain a local population of the species. Gales asserts that foresight was an explicit requirement of the Council's duty under the Planning Act and of principles of ecological sustainability. The Council knew at all times that Gales intended to fill the Land and that Gales had to fill the Land before it could be developed for any particular purpose. It says that the Council must have been well aware of the regulatory barriers against filling that inundation would have triggered. Indeed, the Council rejected the first application for consent to fill the Land in 2003 because of the drainage problems that it itself had created. The Council argued in the Land and Environment Court in 2005 that the Land could not be filled because the Wallum froglet had triggered a requirement for a species impact statement. Gales says that the Council knew precisely the vegetation species that were endemic to the Land, the vegetation communities and the threatened species that were capable of inhabiting those communities, if restored to ecological functioning by the creation of habitat.

247 Gales asserts that a reasonable council, responsible for drainage and ecological approvals, properly qualified and alert, should have foreseen that there was a real risk of additional development constraints from ecological change. It says that, in confirmation of that foresight, the Council rejected Gales' development application in 2003 for those very reasons. In 2005 and 2008, the Council argued for the rejection of later development applications because of constraints caused by the inundation. The Council relied upon those constraints to the detriment of Gales' development proposals, yet claims in the present proceeding, inconsistently, not to have foreseen those outcomes before early 2003, despite its statutory duty to foresee adverse environmental risks when assessing development proposals, and to avoid them in its own activities, for example, as a drainage authority by their operation of s 111 and s 112 of the Planning Act and its ecologically sustainable development obligations under the LGA 1993.

248 Gales asserts that, well before the conduct about which it complains, the Council knew of the ecological significance of wetlands and routinely evaluated applications for development by reference to ecological considerations, including habitat preservation, and used specialist information concerning the presence and habitat requirements of endangered fauna. Gales says that, by those activities, the Council should have been acutely aware of the drainage characteristics of the area, the existence of ponding or wetting up and the effect of that wetting upon habitat changes and the advent of opportunistic amphibians and their ability to colonise rapidly in a suitable area. Gales asserts that even school-aged children know that frogs require water to breed, that tadpoles change in water to juvenile frogs and that terrestrial frogs require moisture for survival. It says that it would be well known that, if one builds a pond, even in the centre of a city, frogs are likely to inhabit it.

249 While the primary judge found that the Council considered whether Wallum froglets were on the Land, which might be harmed by the proposed construction of Turnock Street, her Honour found that investigations suggested that there was no froglet population of any significance in that area. Gales complains that that is beside the point. The construction of Turnock Street promoted conditions of increased periods of ephemeral ponding to the north of Turnock Street and there was evidence as to the ability of Wallum froglets to colonise a suitable area rapidly. That, Gales says, demonstrated how the Council could readily have foreseen the creation of habitat if it had properly considered the effects of its decision to treat the Land as a detention basin, being an adjunct to its drainage system.

250 Gales complains that the primary judge failed to consider six critical matters in determining remoteness as follows:

• the Council had actual knowledge, from early environmental studies, of the presence of Wallum froglets in the vicinity of the Land;
• the Council knew that the Wallum froglet was threatened, that its habitat components included ephemeral ponding and that its presence would impede land development;
• the Council intentionally used the Land as a retention basin;
• the wetting up of the Land created suitable conditions for a viable population of Wallum froglets: while appropriate vegetation was necessary, the essential element was the presence of ephemeral ponding;
• the Council, not Gales, was responsible for the delay in developing the Land, because of its failure to revise DCP 9 and to adopt a drainage strategy for the Kingscliff area to enable Gales to fill the Land; and
• the Council failed to follow the advice of its own engineer to provide three culverts to permit excess stormwater inundating the Land to flow away.

251 As to the first critical matter, Gales points to a publication of the Environment Protection Authority in 1993, the purpose of which was to disseminate widely reliable information about the current state of the environment and the factors that endangered it. The publication explained that habitat modification could occur through changed hydrological regimes. The possibility that the wetting up of land could lead to significant ecological change is, Gales says, uncontroversial and was accepted by the primary judge. However, Gales says, the Council had many more reports specifically identifying the presence in the area of Wallum froglets and describing their habitat requirements. It knew that wetlands were susceptible to changes in the water table caused by drainage works and that restoration to wetland condition would encourage threatened species to relocate. Turnock Street was completed in 1997.

252 Gales says that there are several earlier studies that predicted the presence of or surveyed Wallum froglets in the area as follows:

• The Fourth Report of 1999, provided by Woodward-Clyde to the Council in conjunction with the development of a library and community facilities by the Council immediately adjoining the Land.
• The Vegetation Management Plan, which recommended restoration of wet vegetation because of its high conservation significance for, inter alia, amphibian fauna.
• In April 2002, in the Fifth Report, Planit identified a small number of Wallum froglets close to the Turnock Street and Elrond Drive roundabout.
• The Council's ecological consultant, Mr Parker, heard large number of Wallum froglets in the vicinity of Turnock Street in April and May 2003.

Gales says that those studies indicate that, if the Council were acting reasonably, it would have at the very least been put on notice of the real possibility of the association of Wallum froglets with the conditions that came to take hold after the construction of Turnock Street. It says that the same studies would have alerted the Council to the suitable habitat on the Land, and the capacity for colonisation of restored habitat by fauna populations.

253 The third critical matter is that the Council consciously used the Land as a retention basin. It knew that, if it allowed development, it would have to find some alternative retention basin, although it intended to impose that obligation on Gales. The Council knew that it was wetting up the Land and that it needed that state of affairs to continue because it had no other means of stormwater disposal and was not prepared to fund any alternatives. The Council believed that it was a problem for Gales and Gales could buy adjoining land to solve the problem, but the Council would not pay for it. In those circumstances, Gales says, her Honour's finding that the research would not have alerted either party to the prospect of the invasion of a colony of Wallum froglets was not open. Gales asserts that the Council was aware, or ought to have been aware, of the likelihood of an invasion of Wallum froglets, since they were discovered in the area, their behaviour and habitat requirements were known and the Council's actions created perfect conditions for the species to thrive on the Land.

254 In relation to the fifth critical matter, the Council controlled Gales' ability to develop the Land. Any attempt by Gales to develop the Land had the practical effect of depriving the Council of its retention basin. Since the Council had not sought to regularise that position by, for example, acquiring an easement, there was no incentive on the parts of its officers to revise DCP 9 or to bring about a situation where Gales might fill and develop the Land. Having regard to the evidence as to the attempts by Gales to develop the Land for a shopping centre and other purposes, Gales contends that it was not open to the primary judge to find that the delay in filling the Land was not reasonably foreseeable by Council. That, Gales says, is precisely what the Council's documents show.

255 In relation to the last critical matter, Gales says that if the Council had paid attention to the advice it received that three 1500 mm pipes were required under Elrond Drive to meet the once in a hundred year flood event, significant stormwater events would have been relieved more quickly, and the opportunities for ephemeral ponding over an extended period would have been reduced. Accordingly, it says, it was not open to the primary judge to hold that the risk was not reasonably foreseeable by the Council that development of the Land would be delayed or that the only deficiency in relation to the drainage through Turnock Street was the use of elevated culverts.

256 There are good answers to those specific contentions. The environmental studies furnished to the Council gave no indication that a material expansion of the Wallum froglet population was likely. Further, the Council's decisions that affected the drainage of the area north of Turnock Street could not reasonably have been recognised as likely to bring about significant habitat changes, let alone changes conducive to the establishment of a substantial additional population of Wallum froglets. There was no evidence to suggest that the Council was aware at any time before 2004 that difficulties were being encountered in keeping the Land well drained. There is no basis for the suggestion that the Council caused delay to preserve the availability of a retention basin. It was open to Gales to submit a drainage proposal that accommodated the limited capacity of the 900mm pipe under Elrond Drive. It could have done so by providing a retention basin or by making alternative adequate provision, as contemplated by the drainage plan incorporated in DCP 9.

257 There is no basis for suggesting that the Council should have had in mind the prospect of a Wallum froglet migration when it authorised the Noble Park Estate development or when it considered what action should be taken in response to the shortcomings in the 1200mm pipe, installed after the filling of the northern drain. The primary judge correctly rejected that proposition. As her Honour found, the research over the years would not have alerted either party to the prospect of an invasion of a colony of Wallum froglets. The research identified a single call in 1998, two years after the construction of Turnock Street, at a time when there was anticipation that Gales would fill the Land in the not-too-distant future. Her Honour found that the Council did consider whether Wallum froglets were present on the Land, which might be harmed by the proposed development and the construction of Turnock Street. Those investigations suggested clearly that there was no Wallum froglet population of any significance in the area.

258 The primary judge accepted that the Council expected that Gales would seek to develop the Land sooner rather than later. That expectation was the reason for constructing Turnock Street with the culverts approximately halfway up the embankment, to accommodate the Land as filled. If Gales were correct in its submissions, that the risk was foreseeable, the Council would have had to anticipate that the filling of the Land would be delayed by a measure of years and that the increase in stormwater runoff onto the Land would not only be impeded by the absence of the culverts at ground level but would also be impeded to the extent that ephemeral ponding would not only occur but would remain for necessary periods of five to six weeks in summer or some months in winter.

259 The increase in the Wallum froglet population was not foreseeable. The identification of the habitat requirements of the Wallum froglet, and other threatened species, is plainly a matter of considerable complexity. The differing opinions expressed by Mr Warren concerning the habitat requirements of the Wallum froglet are evidence of that complexity. The information regarding Wallum froglets contained in reports provided to the Council in advance of the construction of Turnock Street made no mention of ephemeral ponding of six weeks' duration. Mr Warren's reports did not foreshadow that shallow ephemeral ponding on the Land could lead to the establishment of a population of Wallum froglets. That material indicates that it is unrealistic to suggest that the Council ought to have recognised and responded to the risk.

260 There was no evidence of any information being available to the Council suggesting that any of the approvals or actions about which Gales complains was likely to result in the creation of a habitat materially different from that which had existed for many years and which in some way would be more conducive to the survival of the Wallum froglets. Dr Webb's assessment of ephemeral ponding confirms that habitat suitable for moisture-loving species has always been available in abundance. However, the 1980 report prepared for Gales and submitted to the Council stated that the draft Tweed Coast Plan showed that there were no flora and fauna species on the Land that required or warranted protection.

261 The First Report did not mention the Wallum froglet and stated that cane toads were likely to inhabit the Land and that they displace native frogs. The First Report stated that it was possible, through unlikely, that the Land contained Wallum frogs. The Second Report noted that the Wallum froglet was not recorded during site surveys but that it may be present in a drain south of the relevant area and that the effect of the development on the life cycle of the Wallum froglet was minor in respect of breeding and foraging. It said that there was no effect on migration and movement of the Wallum froglet. The Third Report said that a single Wallum froglet was heard calling from flooded grassland in the southeast of the southern part of the Land. It said that that population would be restricted to the small areas of low-lying paperbark vegetation and in the intact paperbark swamps to the Land's south, which did not include the land north of Turnock Street. Her Honour correctly concluded that the risk was not reasonably foreseeable in all the circumstances.

262 There may be a further question as to whether any of the diminution in value is attributable to the actions and conduct of the Council after 19 October 1999, being the date six years before the commencement of the proceedings. The Council's conduct about which Gales complains began well before that time. The Land had already been wetted up by then. Even if the colony of Wallum froglets were not established by then, ecological changes to the Land caused by the Council's impugned conduct had occurred by then. On that basis, arguably all of Gales' damage occurred 6 years before the commencement of the proceedings. If so, Gales would be barred from recovery of that damage. However, that is not a matter raised by the Council's defence.

Cost of Drainage Works in 2004

263 The Council says that no case has been made out that the 2004 drainage works were required to abate any nuisance created by the Council. Alternatively, the Council relies on the statutory immunity referred to above. Both of those responses must be rejected for the reasons given above. That is to say, the Council has been guilty of nuisance and is not entitled to rely on the statutory immunities.

Blue Jay Circuit Works

264 This head, being the award of damages concerning additional drainage required as a consequence of the inadequate capacity of the 1200mm pipe, is connected with the Blue Jay Circuit Scheme. It appears to have been common ground that the completion of the Blue Jay Circuit scheme would increase substantially the drainage of water that would previously have been taken away by the northern drain. Further, the completion of the Blue Jay Circuit Scheme was expected to reduce the cost of developing the Land.

265 The Council asserts that the sum of $600,000 awarded was not the subject of any evidence and that the question of the cost of drainage that may be required was not addressed. Quantity surveyors were asked to agree on the cost of an additional quantity of pipe work on the assumption that the Blue Jay Circuit Scheme did not proceed. That request produced the estimate of $600,000. However, the Council asserts that no attempt was made to demonstrate what additional pipes or other drainage infrastructure would in fact be required to facilitate development of the Land, without the benefit of the Blue Jay Circuit Scheme. The Council says that the evidence adduced was confined to comparing the cost of drainage of the Land with the conditions imposing a requirement for a habitat for the Wallum froglet and the cost of drainage of the Land without such a requirement. However, the question did not address the cost of drainage, on the assumption that the Blue Jay Circuit Scheme proceeded and was completed, as compared with the cost of drainage without the Blue Jay Circuit Scheme.

266 In circumstances where the primary judge refused a mandatory injunction in relation to the Blue Jay Circuit Scheme, but recognised that the Council may proceed with it, it was erroneous to order damages in the sum of $600,000 for an alternative drainage scheme. It would be for Gales to demonstrate that it actually incurred any expense in endeavouring to mitigate the nuisance by preparing plans for the construction of the alternative drainage scheme.

267 Since it is now common ground that the contingency of development of the Land before completion of the Blue Jay Circuit Scheme will never eventuate, this head of damage should not stand. A more appropriate order would have been that the Council be required to reimburse Gales for the additional cost of drainage incurred due to the filling of the northern drain, if the Blue Jay Circuit Scheme did not proceed. However, as the Scheme will now proceed, Gales will incur no additional cost if and when it develops the Land. Accordingly, the appropriate course is simply to set aside the order for damages in the sum of $600,000.

Treating Stormwater for the Wallum Froglet Habitat

268 This head of damage concerns the primary judge's finding that the Council was liable for a proportion of the costs of treating the stormwater incurred before the completion of drainage work by Gales or the completion of the Blue Jay Circuit Scheme. Her Honour fixed that proportion as at one-third. Gales asserts that the Council did not challenge construction and overall water treatment costs during the hearing. It says that the primary judge's conclusion was open on the evidence and reflected a judicial assessment of the increased volumes of Council stormwater channelled onto the Land.

269 The Council complains first that the order involved an arbitrary identification of the proportion of stormwater for which the Council was responsible. Secondly, it proceeded on the assumption, which the Council says was unfounded, that additional stormwater runoff associated with the inadequacy of the 1200mm pipe affected the cost of measures required to preserve water quality for the habitat of the Wallum froglet. The Council says that, in the absence of evidence for that assumption, the award of damages cannot stand.

270 This head of damage appears to be in the same category as the claim for diminution in the value of the Land by reason of the establishment of the Wallum froglet colony. It would be recoverable if it had been foreseeable. I have concluded that the establishment of the colony was not foreseeable. A fortiori, the consequences of that establishment were not foreseeable. The order relating to this head of damage must be set aside.

Conclusion and Orders

271 The primary judge correctly concluded that the actions and conduct of the Council over a considerable period of time constituted a nuisance in relation to the Land. However, her Honour wrongly concluded that the nuisance did not occur until 4 May 2004. Gales is entitled to succeed in its action for nuisance from the date that is six years prior to the commencement of the proceedings. Gales is entitled to appropriate relief in relation to that nuisance.

272 The appropriate relief would include injunctive relief. However, Gales' claim for damages for diminution in the value of the Land because of the requirement to provide and maintain a habitat for Wallum froglets must fail, as must its claim for the cost of water treatment measures because of the habitat. While there is a causal connection between that diminution and the Council's conduct that Gales complained about, it was not reasonably foreseeable by the Council as a consequence of that conduct.

273 The orders requiring Council to pay $600,000 and to contribute to the cost of treating stormwater should be set aside. However, the head of damages relating to the 2004 drainage works should stand.

274 It follows from the above that both the appeal and the cross-appeal should be allowed in part. The parties should be directed to bring in short minutes of orders to give effect to the conclusions outlined above. The parties should also be directed to file written submissions on the question of the costs of the trial at first instance and of the appeal, in the light of those conclusions.

275 Accordingly, I propose the following orders:

(1) The appeal be allowed in part.

(2) The cross-appeal be allowed in part.

(3) The parties bring in short minutes of order giving effect to these reasons no later than 2 December 2013.

(4) The parties file any submissions they wish to on the question of costs of the proceedings at first instance and of the appeal no later than 2 December 2013.

276 LEEMING JA: I have had the considerable advantage of reading Emmett JA's reasons in draft. They enable me to express my conclusions very concisely. First, I agree with Emmett JA, for the reasons that he has given, that the Council has committed nuisance. Secondly, I agree that damages for nuisance, even if the nuisance is intentional, are limited by what is reasonably foreseeable, but I wish to add to the reasons his Honour has provided. Thirdly, I agree that the Council has failed to make out its statutory defences, although I prefer to take a narrower approach to some of the reasoning supporting that conclusion. Fourthly, I agree with Emmett JA's reasons as to the remaining heads of damages.

277 Gales submitted that reasonable foreseeability ought not to be a restriction upon the damages ordered following intentional nuisance, and that this Court ought not to follow what had been said by Lord Reid in Overseas Tankship (UK) Ltd v Miller Steamship Company Pty Ltd [1967] 1 AC 617 at 640. Although that statement was not essential to the appeal, Lord Goff said of it that it "has nevertheless settled the law to the effect that foreseeability of harm is indeed a prerequisite of the recovery of damages in private nuisance, as in the case of public nuisance": Cambridge Water Co v Eastern Counties Leather Plc [1994] AC 2 264 at 301. It was treated as having that effect in this Court in Fennell v Robson Excavations Pty Ltd [1977] 2 NSWLR 486 at 492 (Glass JA, with whom Samuels JA agreed). The same proposition was applied in Sutherland Shire Council v Becker [2006] NSWCA 344; (2006) 150 LGERA 184 at [137] by Bryson JA with whom Mason P agreed.

278 Shortly after Cambridge Water was delivered, the High Court decided in Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520 that much of the so-called rule in Rylands v Fletcher had been absorbed by the principles of negligence. Although that decision preserved a distinction between negligence and nuisance, and there are difficulties sustaining the reasoning today to the extent it is based on proximity, Burnie Port Authority does not assist the appellant's submission. Indeed, the joint reasons referred at 537 to the development, in the context of private nuisance and the development of the modern law of negligence, of "a requirement closely resembling, or perhaps even amounting to a requirement of foreseeability of relevant damage in the event of the escape of the dangerous substance". The reasons also noted Holmes' view in The Common Law that "foreseeability of the likelihood of harm is the unifying element of tortious liability".

279 Gales did not point to any decision of the High Court which required a departure from what has consistently been treated as a limitation upon liability for nuisance, nor did it suggest that the decisions in this Court which have applied what was said in Wagon Mound No 2 were clearly wrong. To be fair, the submission was put concisely, not least because Council maintained that it could only be treated as a formal one. I do not consider that it is open to this Court to accept it, in light of the state of existing authority, which in any event I am far from persuaded is clearly wrong. "Reasonableness" in a variety of senses has long been a restricting element of nuisance (see the examples given by Jordan CJ in Don Brass Foundry Pty Ltd v Stead (1948) 48 SR (NSW) 482 at 486-487); it follows that considerations of coherence do not demand a test other than reasonable foreseeability for that subset of nuisances which are intentional as opposed to negligent. Gales submitted that intentional tortious conduct amounting to nuisance is qualitatively different from non-intentional conduct, but the fact that exemplary damages are available in an appropriate case (for example, Commonwealth v Murray (1988) Aust Torts Rep 80-207 and see AB v South West Water Services Ltd [1993] QB 507 at 523) tends to undercut the force of Gales' submission.

280 The largest component (by far) of Gales' damages claim reflects the costs incurred and loss in value of the land attributable to the establishment of the Wallum froglet colony. Is that too remote? Consistently with the assimilation of the tests in negligence and nuisance, it will suffice for the plaintiff to establish that harm of the kind suffered was reasonably foreseeable: Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383. But, as Windeyer J there pointed out (at 402), the obvious difficulty of that "comfortable latitudinarian doctrine" is that it leaves the criterion for classification of kinds or types of harm undefined and at large. The same point was made by Allsop P (with whom Tobias AJA agreed) in Stephens v Giovenco; Dick v Giovenco [2011] NSWCA 53 at [5]: the test "leaves unresolved the level of abstraction or particularity". This issue arises acutely in this appeal.

281 It may readily be accepted that it was reasonably foreseeable that the land would "wet up" following the discharge of stormwater onto it, but in my opinion that is insufficiently particular to permit Gales to recover damages occasioned by the establishment of a Wallum froglet colony. Nor would I accept that it is sufficient for Gales to establish that wetting up was reasonably foreseeable, such that the land "would become the habitat of moisture-loving species, including threatened species". The kind of loss of which Gales complains in this respect is that which is occasioned by the operation of the Threatened Species Conservation Act 1995 upon the planning regime, which has led to the need to investigate and preserve habitat for the froglet. It was not necessary for Gales to establish that it was reasonably foreseeable that Council's nuisance would give rise to the creation of a habitat of the particular vulnerable species, but it was necessary to establish the reasonably foreseeable possibility that some vulnerable species might establish itself and so engage the provisions of the Threatened Species Conservation Act. However, approaching the question at that level of abstraction gives Gales scant comfort. For the criterion for a species or ecological community being recognised under that legislation is that it is facing a "high", "very high" or "extremely high" risk of extinction in New South Wales in the medium-term, near future or immediate future respectively: ss 10 and 12. Even the establishment of a new colony of a species which is merely vulnerable (that is to say, facing a high risk of medium-term extinction in New South Wales) is unlikely, absent special circumstances, to be a reasonably foreseeable possibility; that after all is precisely why the species is vulnerable.

282 The primary judge found as a matter of fact that the prospect of the establishment of a Wallum froglet colony was not a reasonably foreseeable risk: at [425]-[429]. Although it was submitted that her Honour had impermissibly reasoned backwards from the actual event which had occurred as opposed to harm of the kind suffered, her Honour's reasoning included reference in [425] to the complexity of the problem having regard to the range of threatened species in the locality, and recorded the Council's rhetorical question (which pithily illustrates the complexity of the inquiry) whether Council was required "to balance in its mind whether to preserve a wet environment conducive to frog survival or create a dry environment for the survival of the threatened Mitchell's Rainforest Snail". Equally importantly, the nature of the test for remoteness, in its application to the facts of this case, was that Gales for forensic reasons was reduced to showing the reasonable foreseeability of a Wallum froglet colony. If that could not be shown, it was unlikely that Gales could show that it was reasonably foreseeable that some threatened species might establish itself on the land. The focus in her Honour's reasons on the Wallum froglet reflected the submissions made by Gales at first instance and on appeal, and does not disclose error. Emmett JA has addressed more elaborately the question of why the establishment of habitat of an endangered species was not reasonably foreseeable, including in respect of six critical matters of which Gales complained (at [250]-[261]), with which reasoning I agree.

283 I agree with Emmett JA's conclusions rejecting the Council's statutory defences, essentially because the nuisance came about because Council directed stormwater runoff onto Gales' land. That conduct is outside the scope of the statutory defences. In particular, I agree that the civil liability for which Gales contended was not "based on" Council's exercise or failure to exercise a statutory power within the meaning of s 43A of the Civil Liability Act 2002. Accordingly, it is not necessary for me to express a view as to whether Council's approval powers are a "special statutory power". In relation to s 45, Gales' claim was in large measure not based upon an alleged failure to carry out or to consider carrying out work. As is indicated by its heading ("Special non-feasance protection for roads authorities"), s 45 is directed to what would formerly have been described as cases of non-feasance, rather than misfeasance: see North Sydney Council v Roman [2007] NSWCA 27; 69 NSWLR 240 at [156]. Further, I agree with the primary judge and Emmett JA that to the extent that the claim was based on non-feasance (such as the blocking up of the Elrond Drive culvert), then the culvert was not a roadwork. (The fact that the reasons in Council of the City of Liverpool v Turano [2008] NSWCA 270; 164 LGERA 16 at [182] record an agreement between the parties to the contrary is of no weight.) Finally, the primary judge proceeded on the basis that if s 733 of the Local Government Act 1993 applied, then the Council had not established that its conduct was in good faith: at [414]-[417]. Her Honour correctly noted that good faith must be more than honest ineptitude: Mid Density Developments Pty Ltd v Rockdale Municipal Council [1993] FCA 408; (1993) 44 FCR 290. I agree with what Emmett JA has written in relation to s 733, and in particular the absence of challenge to the critical findings at [414] on which her Honour's conclusion was based.

284 SACKVILLE AJA: I agree with the orders proposed by Emmett JA. I also agree with his Honour's reasons, subject to the qualification, stated by Leeming JA, with whose judgment I agree.

 

 

Appendix 1 - PDF

Appendix 2 - PDF

 

 

Amendments

19 November 2013 - corrected quote
Amended paragraphs: 2

11 February 2014 - reference to paragraphs [262-273] changed to [250-261]
Amended paragraphs: 282

Decision last updated: 11 February 2014