Statutory verification of water rights: the 'insuperable' difficulties of propertising water entitlements

The abolition of riparian entitlements in the early stages of colonial Australia and the vesting of these rights in the Crown represented a turning point for the evolution of private water rights. The extinguishment of common law rights connected to vested land interests and the introduction of new, unaligned statutory entitlements provided a new and fundamentally different system for the creation and regulation of private water entitlements. Unlike riparian entitlements, in the absence of express definition, statutory water entitlements may only be verified as property where such a construction is consistent with the nature and scope of the entitlement. In this respect, the statutory framework has disaggregated the propertisation of water rights from land ownership and linked the process to broader statutory interpretation principles. The shift away from institutional property has generated concerns about the interpretive approaches appropriate for the verification of legislative water entitlements. This article examines the existing interpretive approaches and argues that the blurring of the propertisation process with the separate issue of whether any change or modification of such water rights attracts s 51(xxxi) of the Commonwealth Constitution has produced a situation where core property indicia is increasingly overshadowed by legislative defeasibility. In the recent High Court decision of ICM Agriculture Pty Ltd v Commonwealth, the focus of the majority judgements upon the inherent susceptibility of legislative entitlements to variation or extinguishment acted as a catalyst for the non-propertisation of statutory bore water licences in New South Wales. The emphasis the majority judgements gave to legislative defeasibility precluded a full and balanced assessment of other highly relevant property indicia, in particular the expectation interests of the holders. Conflating property and constitutional evaluation in this way is inappropriate in an era where entitlements to natural resource interests are increasingly statute based and the verification process has significant social and economic repercussions. Determining whether a statutory entitlement constitutes property requires a careful balancing of legislative intent, social and environmental context and individual expectation and the vicissitudes of a regulatory context should not eclipse this process.