Murray-Darling Basin Authority Wins $1.5 Billion Class Action Brought by Irrigators

The New South Wales Supreme Court has ruled in favour of the Murray-Darling Basin Authority (MDBA) in a $1.5-billion class action brought by a group of 28,000 irrigators. Justice Tim Faulkner determined that the MDBA did not owe a duty of care to avoid pure economic loss to one specific group over others, ordering the plaintiffs to pay the authority's legal costs.

The lawsuit was initiated on behalf of agricultural producers from the central Murray region of southern New South Wales and the Goulburn Murray region of northern Victoria. Seeking damages between $750 million and $1.5 billion, the irrigators alleged that the MDBA mismanaged river operations between 2017 and 2019. They claimed this led to reduced water allocations, lost profits, and elevated temporary water prices that prevented some farmers from fulfilling supply contracts.

Court Findings on Duty of Care and Operations

In his ruling, Justice Faulkner noted that the MDBA operates as an independent entity tasked with implementing a water-sharing framework established by the states, emphasizing that the Murray River system must be managed in the public interest. He agreed with defence arguments that imposing a duty of care toward irrigators would distort the authority's independent responsibility to share water among states. Additionally, because individual water allocations are set by state governments rather than the MDBA, the court found an insufficient relationship between the authority and the plaintiffs to establish a duty of care.

The legal dispute focused heavily on river operations at the Barmah Choke, a narrow section of the Murray River located between Tocumwal and Deniliquin. Plaintiffs argued that the MDBA breached its operating plan by executing unjustified over-bank transfers that flooded the Barmah-Millewa forest, leading to high transmission losses. Defence legal counsel stated that over-bank transfers were established practice used to secure water supplies for South Australia, guided by operational modeling and experience. Addressing claims of negligence, Justice Faulkner ruled there was no breach of duty regarding the MDBA's handling of climate outlooks, operating plans, or water release delegations in 2017, describing the river system as "unpredictable and dynamic."

Responses to the Ruling

Southern Riverina Irrigators chief executive Sophie Baldwin expressed disappointment with the judgment but stated the group would examine potential avenues for appeal. She highlighted that the proceedings brought attention to river management issues, noting MDBA admissions during the case that over-bank flows resulted in water volume losses of between 36 and 41 per cent.

Following the judgment, the Murray-Darling Basin Authority stated it was reviewing the court's decision in detail and declined to comment further while appeal rights remain active.