Australian High Court Quashes 30-Year Water Extraction Licence

• The High Court quashed a 30-year groundwater licence granted to Fortune Agribusiness Funds Management Pty Ltd.
• The decision highlights the importance of satisfying the 'special circumstances' test in large-scale water extraction projects.
• The court found that the minister never formed the necessary satisfaction for granting a longer-term licence.
• The appellant was denied a fair hearing, and the company failed to notify them of a new condition requiring an assessment of Aboriginal cultural values.

The court's decision sends the matter back to the responsible minister, who must redecide the licence according to law.

The High Court of Australia has quashed a 30-year groundwater licence granted to Fortune Agribusiness Funds Management Pty Ltd, a decision that highlights the importance of satisfying the 'special circumstances' test in large-scale water extraction projects. The licence allowed the company to extract up to 40 billion litres of groundwater each year from a Northern Territory property. This volume is reportedly one of the largest single applications for a water resource in Australia. The court's decision sends the matter back to the responsible minister, who must redecide the licence according to law.

A crucial aspect of the Water Act 1992 (NT) is the 'special circumstances' test, which requires decision-makers to be satisfied that special circumstances justify granting a longer-term licence. This provision was added on September 29, 2021, just before the licence issued. However, the change was not explained in the material presented to the minister, and two lengthy briefings failed to mention the requirement or 'special circumstances.' The court found that the minister never formed the necessary satisfaction, rendering the decision invalid.

The court also addressed concerns regarding Aboriginal cultural values and fair hearings. While the minister did consider these factors in granting the licence, the court found that the appellant was denied a fair hearing. A new condition requiring the company to assess the impact on Aboriginal cultural values was introduced without notifying the appellant. The court ruled that the appellant should have been heard first, emphasizing the importance of ensuring fair hearings for affected parties.

Lawyers advising clients on large-scale water extraction projects in Australia should be aware of the High Court's decision, which highlights the importance of satisfying the 'special circumstances' test and ensuring fair hearings for affected parties.

Source: Original reporting via Australasian Lawyer