Appellant v Respondent

Appellant v Respondent - [2010] VSC 46 - VSC 2010 case summary — Zoe

[69]

(A) The WIA does not impose a relevant duty on SEWL other than to act in the public interest and to provide, manage and operate a system for the conveyance and disposal of sewage.

(B) The relevant minimum service standards are set by the ESC and have been met by the SEWL. The imposition of a duty of care is inconsistent with those service standards, and involves the Tribunal making policy interventions in a regulatory system which is overseen by an independent body established specifically for the purpose of regulating certain public sector utilities.

(C) SEWL has no control over what enters the sewers and in practice little control over tree roots entering sewers (but see s 67 of the WIA which empowers licenses to require property owners to remove trees).

(D) The risk of a blockage is low. According to the evidence before the Tribunal, there were 1700 blockages per annum over 7,816 km of sewerage pipelines, ie 1 blockage per 6 km pipeline per annum.

(E) The risk of a blockage causing spillage is 30%.

(F) The risk of spillage causing damage is even lower again.

(G) The imposition of a duty requires the Tribunal to undertake a determination of "policy" including a consideration of what level of resources should be allocated to cleaning and maintaining sewers and the relative "policy value" of the function over and above other functions.

(H) Viewed prospectively, the tasks which SEWL would be required to perform to avoid any damage by spillage would involve a labour intensive process relating not only to the sewer main in question but also to each blocked sewer experienced by SEWL.

(I) SEWL has a broad range of functions.[39] These include the provision of reticulated water to about 1.3m people, managing recycled water and the development of innovation in its use, educating the public about water and wastewater, managing vast infrastructure assets, including 8,400 km of water mains, 7,800 km of sewer mains, 315 pump stations and 7 sewerage treatment plants, and extending the provision of sewerage services into new areas.

(J) SEWL has limited resources to apply to those functions. It allocates budgets and spends the sums allocated in the budgets. The allocation of budges is a reflection of management decisions about competing priorities.

(K) A reasonable person in the position of Transpacific could be expected to safeguard its interests by ensuring that it has the most effective mechanism available to deal with backflows from the public sewerage systems, ie an effective ORG[40] and clean and operable drains.[41] This is relevant not only to causation and assessing damages but also to duty. The law requires that a plaintiff take reasonable precautions to protect his or her own safety.[42]

(L) Judged by the standards of other water authorities, SEWL's practices and procedures are reasonable.[43]

(M) The decision to impose a duty involves a determination of financial, economic, social and political factors and constraints which a court is not armed to make.[44]

(N) The matters set out in para (k)(vi) above.

[151]

44 In any event, s 74(1) itself contains provisions that substantially occupy the ground that would be occupied by "duty of care" principles in a common law negligence claim, leaving little or no room for those principles to operate. It sets up a relationship, broadly corresponding to an Atkinian "neighbour" relationship,[87] between a licensee exercising a function under its licence and any other person who might suffer personal injury, property damage or economic loss if a flow of water were to occur from the licensee's works (as defined) onto any land. Subject to questions of causation and remoteness, the relationship will give rise to liability where the flow of water occurs as a result of intentional or negligent conduct on the part of the licensee and the water causes personal injury, property damage or economic loss to any person. It is true that in determining whether the basic statutory relationship exists s 74 does not require the Tribunal to ask whether, absent reasonable care, it was foreseeable that a class of persons including the claimant might suffer injury, loss or damage of the general kind suffered. But it is not surprising that Parliament did not include a foreseeability requirement at the "relationship" level. Even at common law, although reasonable foreseeability of the class of injury is an essential condition of the existence of a legal obligation to take care for the benefit of another,[88] foreseeability is effectively assumed or passed over at duty level in those many cases involving established duty categories, such as road users as between themselves and employers vis-à-vis employees. Parliament might well have proceeded on the basis that if, as a result of unreasonably careless or unskilful conduct on the part of a licensee in the exercise of a function under its licence, water has flowed from the works of the licensee onto land and has caused a person injury, damage or loss, such an effect on a class including that person would usually have been foreseeable by the licensee contemplating its own future conduct. In any event, as we shall see,[89] Parliament left plenty of room for considerations corresponding to foreseeability to play a role in the assessment of whether the particular conduct in question was negligent (in the sense of unreasonably careless or unskilful), just as foreseeability commonly plays a part in the assessment of "breach" at common law.

[200]

80 The short answer to what remains of ground 4 is that I am simply not satisfied that the Tribunal omitted to consider the principle set out in s 83(b) of the Wrongs Act 1958. The Deputy President expressly noted that sections "83 to 85" of the Wrongs Act 1958 were "relied on by Dr Sadler".[129] He then said that he would return shortly to "consider their application to the present proceeding".[130] Next he set out s 83 in its entirety.[131] He did return to s 83 in due course.[132] He first referred to s 83(a) by name,[133] referring and responding to certain of Dr Sadler's submissions which were apparently based principally on s 83(a).[134] He later referred expressly to s 83(c) in connection with the ESC's Service Standards.[135] It is true that, apart from setting out the entirety of s 83, he did not refer to s 83(b) by name. However paragraphs (a), (b) and (c) of s 83 are not discrete; they are interconnected and interrelated. They all relate to the "functions" of the authority. They have a common theme. They require the court to take a broad view of the functions of the authority in relation to its available resources and its activities and any applicable general procedures and standards. The particular aspect covered by s 83(b) is the "broad range of [the authority's] activities". Read fairly, the reasons of the Tribunal indicate that it did appreciate and take into account that SEWL has a broad range of activities. Among other things, the Tribunal noted, and considered very carefully, Dr Sadler's submission to the effect that the allocation of the requisite resources to more intensive preventative maintenance of the reticulation sewers "means another function receives less resources".[136] The Tribunal referred to a statement in SEWL's Annual Report relating to its total net cash inflow (of some $79m) "from operating activities", and compared this with its expenditure on preventative maintenance on reticulation sewers (of some $653,000).[137] The Tribunal expressly noted, and dealt with, Dr Sadler's submissions to the effect that the Tribunal should not "second guess" investment decisions by the proper authorities.[138] The Tribunal also noted, and dealt with, Dr Sadler's reply submission to the effect that Transpacific's case amounted to an argument that resources should be "filched from another department".[139]

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Judgment (325 paragraphs)

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Cases Cited (29)