Appellant v Respondent

1 This is an appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 from an order of the Tribunal constituted by Deputy President Macnamara. An appeal under s 148 is confined to a question or questions of law.

2 The Tribunal upheld a claim by the present respondent, Transpacific Cleanaway Pty Ltd ("Transpacific"), for damages under s 74 of the Water Industry Act 1994 ("the WIA") against the present appellant, South East Water Ltd ("SEWL"). The Tribunal published detailed reasons for its substantive decision on 29 August 2008.[1] The questions of interest and costs were reserved. Following further argument, final orders were pronounced on 17 October 2008.[2] SEWL was required to pay Transpacific $62,194.32 in damages, together with interest and costs.

3 The damages were awarded to compensate Transpacific for the costs incurred by it as a result of a spill of sewage at premises in Havelock Road, Bayswater which it occupied as a tenant for the purposes of its business of providing kerbside collections of recyclables and garden waste for a number of Melbourne municipalities.

4 SEWL is a State owned enterprise within the meaning of the State Owned Enterprises Act 1992 and is a licensee under the WIA. Section 74 of the WIA provides:

"74 Liability of licensees arising out of flow of water

(a) as a result of intentional or negligent conduct on the part of a licensee in the exercise of a function under its licence, a flow of water occurs from its works onto any land; and

(b) the water causes -

(ii) damage to the property (whether real or personal) of any other person; or

the licensee is liable to pay damages to that other person in respect of that injury, damage or loss.

(2) If it is proved in a proceeding brought under subsection (1) that water has flowed from the works of a licensee onto any land, it must be presumed that the flow occurred as a result of intentional or negligent conduct on the part of the licensee unless the licensee proves on the balance of probabilities that it did not so occur.

(3) For the purposes of a proceeding brought under subsection (1) -

(a) a flow of water is to be taken to have occurred as a result of intentional conduct on the part of a licensee if the flow -

(ii) inevitably and without intervening cause resulted from the exercise of a power by the licensee; and

(b) in determining whether or not a flow of water occurred as a result of negligent conduct on the part of a licensee, account must be taken of all the circumstances including any omission or failure, in the planning, design, construction, maintenance or operation of the works, to provide reasonable standards of capacity or efficiency or exercise reasonable care or skill having regard to the following matters -

(i) the state of scientific knowledge and knowledge of local conditions at any relevant time;

(B) the maintenance and operation of the works; and

(C) works which it would have been necessary to construct to avoid the occurrence of any relevant injury, damage or loss.

(4) The following provisions apply with respect to a proceeding brought under subsection (1) -

(a) the person bringing the proceeding must answer in writing any reasonable inquiry relating to the cause of action that is addressed to the person by or on behalf of the licensee;

(b) the proportion (if any) of the responsibility of the licensee for the injury, damage or loss must be assessed and only that proportion of the assessed damages must be awarded against the licensee;

(c) in assessing damages in respect of damage to property or economic loss the measure of damages is the direct pecuniary injury to the person bringing the proceeding by the loss of something of substantial benefit accrued or accruing and does not include remote, indirect or speculative damage;

(d) if damages are assessed in the proceeding in respect of any continuing cause of action, they may, in addition to being assessed down to the time of assessment, be assessed in respect of all future injury, damage or loss and, if so, the licensee is not liable to pay any further damages in respect of that injury, damage or loss;

(e) if it is claimed that damage to property has resulted from the conduct of the licensee, the Tribunal may, before making a determination in the proceeding, require notice of the proceeding to be given to any person having an ascertainable interest (whether present, future or contingent) in the property;

(f) a person served under paragraph (e) or any other person having an interest in the property may apply to the Tribunal to be added as a party;

(g) a determination made in the proceeding binds the parties and all persons served under paragraph (e);

(h) a person, not being a party, in whose favour a determination is made may enforce the determination by the same means as if the person were a party.

(5) This section does not create any liability in respect of a flow of water from the works (including any dam) of a licensee in the exercise of a function under its licence if that flow is reasonable."

5 The spill was detected early in the morning of 16 June 2006, as Transpacific staff arrived at work. It was later discovered that SEWL's reticulation sewer that serviced Havelock Road had become blocked with tree roots and other material. Sewage had backed up in the reticulation sewer and was forced, under considerable pressure, into the sewer pipe connected to the office block and workshop leased by Transpacific. The sewage emerged from the ladies' toilet in the office block. It was "a roaring torrent", according to evidence accepted by the Tribunal. It lay about five inches deep in the toilet area and about two inches deep in the foyer. It spread underneath a partition into the workshop and then leaked out externally beneath a roller door. Under its lease, Transpacific was responsible for the costs of cleaning up and disinfecting the premises and replacing ruined equipment. The quantum of those costs was in issue before the Tribunal, but is no longer in issue.

6 About six years earlier, the same reticulation sewer had become blocked with tree roots and other debris in virtually the same spot. As a result, sewage had likewise been forced into the pipe connected to the premises. A spill had occurred, but it had been confined to areas outside the buildings, from which it had entered storm water drains. It was so confined in circumstances where an overflow relief gully ("ORG") that was attached to the pipe outside the main building had operated as intended. On the later occasion (in 2006), the ORG did not operate as intended.

7 Before the Tribunal it was common ground that SEWL was a licensee and that on 16 June 2006 a "flow of water" had occurred from its "works" within the meaning of s 74(1) of the WIA. It was also common ground that the management and operation of the sewerage system by SEWL amounted to "the exercise of a function under its licence". All of those matters remain common ground. SEWL submitted to the Tribunal that there was no flow "onto" Transpacific's premises because the sewage had passed through the pipe. However the Tribunal disagreed, and SEWL has not challenged that particular ruling. Further, it seems that SEWL asserted before the Tribunal that the flow of sewage was "reasonable" within the meaning of s 74(5) of the WIA. However the Tribunal had "no hesitation in finding that the flow was unreasonable",[3] taking into consideration that it consisted of raw sewage and therefore involved significant potential for harm to human health and to the environment, and that it caused significant actual property damage and financial loss. SEWL does not challenge the Tribunal's finding under s 74(5).

8 The Tribunal further held that the flow occurred as a result of "negligent conduct" on the part of SEWL within the meaning of s 74(1)(a). That finding in turn was based on what the Tribunal considered to be a lack of proper maintenance of the reticulation sewer by SEWL, particularly in view of the earlier spill. The Tribunal's reasoning in connection with its finding of negligent conduct is the main subject of this appeal. A related issue concerns the Tribunal's finding that the flow occurred "as a result of" SEWL's conduct. This in turn relates mainly to the failure of the ORG, which was on Transpacific's premises, and to the fact that the Tribunal declined to apportion any part of the responsibility to Transpacific under s 74(4)(b).

9 SEWL obtained leave to appeal against the Tribunal's decision on 12 grounds in accordance with an amended notice of appeal filed on 17 February 2009. It expressly abandoned two of those grounds (nos. 3 and 5) before or during the hearing of the appeal. Towards the end of the oral argument SEWL also effectively abandoned certain other grounds or parts of grounds, as I will in due course explain.

Grounds 1 and 2: "Negligent conduct" and duty of care

10 Grounds 1 and 2 are closely related to each other. They are expressed as follows:

"1 (a) The Tribunal was wrong in law in the construction of s.74(1) of the Water Industry Act 1994 in holding that the effect of s.74(1) was to create a duty of care owed by the Appellant to those persons who might suffer damage caused by a flow from its works without identifying the scope of the duty of care against which behaviour can be assessed;

(b) The Tribunal should have found that, upon its proper construction, s.74(1) Water Industry Act 1994 did not create a duty of care owed by the Appellant to the Respondent but that the Appellant will have discharged its onus under s. 74(2) Water Industry Act 1994 if it establishes that it did not owe a duty of care to the Respondent or that it had not breached that duty of care.

1. (a) The Tribunal was wrong in law in the construction of s.74(1) Water Industry Act 1994 in finding that the reference to 'negligent conduct' in s.74(1) was 'merely a way of referring to the mental state which would find South East Water liable if the other matters in the section are made out' (para 42);

(b) The Tribunal should have found that the reference to 'negligent conduct' in s.74(1) Water Industry Act 1994 was a reference to conduct which arises from a breach of a duty of care and that the Appellant was under no relevant duty of care to the Respondent, or alternatively did not breach any relevant duty of care, and therefore was not liable to the Respondent."

11 At the heart of these two grounds is a contention by SEWL that the reference to "negligent conduct" in s 74(1)(a) of the WIA, either by itself or in conjunction with certain other statutory provisions, brought in a requirement that it be established[4] according to common law principles and independently of the operation of s 74 itself that SEWL owed a duty of care to Transpacific. The Tribunal rejected that contention, giving detailed reasons.[5] SEWL repeats it before this Court, principally under these grounds 1 and 2, but also in part under ground 4 which relates to the application of certain provisions of the Wrongs Act 1958, and in further part under ground 6 which relates to certain service standards approved by the Essential Services Commissioner ("ESC"). I will come to those grounds in due course. Hence the appeal raises a question or questions of statutory interpretation. In dealing with such questions, primary attention must be paid to the text of the relevant statutory provisions.[6] The principally relevant provisions under grounds 1 and 2 are ss 74, 74A and 74B of the WIA. Section 74 is set out in full above. So far as presently relevant, s 74A provides:

(1) The Tribunal has jurisdiction in relation to all causes of action (other than any claim for damages for personal injury) arising under section 74(1).

(2) In a proceeding under this Act, the Tribunal may -

(a) make an order granting an injunction (whether interim or final), including one to prevent an act that has not yet taken place;

(b) make an order with respect to -

(ii) the continuation, removal or modification of works; or

(iii) payment of the costs of the removal or modification of works;

(2A) In awarding damages in the nature of interest, the Tribunal may base the amount awarded on the interest rate fixed from time to time under section 2 of the Penalty Interest Rates Act 1983 or on any lesser rate that it considers appropriate.

(3) In determining a proceeding under section 74(1), the Tribunal must apply to the questions of causation and remoteness of damage the same tests a court would apply to those questions in an action based on negligence.

(4) Nothing in this section prevents a person from bringing before a court a claim for damages for personal injury based on a cause of action of a kind referred to in section 74(1).

(5) On and from 25 March 1999 a proceeding based on a cause of action of a kind referred to in section 74(1) (other than a claim for damages for personal injury) must not be brought otherwise than in the Tribunal.

"74B Matters to be taken into account in determining whether flow is reasonable or not reasonable

(1) In determining whether a flow of water is reasonable or not reasonable, account must be taken of all the circumstances including the following matters -

(a) whether or not the flow, or the act or works that caused the flow, was or were authorised;[7]

(b) the extent to which any conditions or requirements imposed under this Act or the Water Act 1989 in relation to an authorisation were complied with;

(c) whether or not the flow conforms with any guidelines or principles published by the Minister with respect to the drainage of the area;

(d) whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area;

(e) the uses to which the lands concerned and any other lands in the vicinity are put;

(f) the contours of the lands concerned;

(g) whether the water which flowed was -

(ii) collected, stored or concentrated on that land; or

and if so, for what purpose and with what degree of care this was done;

(h) whether or not the flow was affected by any works restricting the flow of water along a waterway;

(i) whether or not the flow is likely to damage any waterway, wetland or aquifer.

(2) In taking account of the matters specified in subsection (1), greater weight must be attached to the matters specified in paragraphs (a), (b), (c) and (d) than to the other specified matters.

(3) An Authority (within the meaning of the Water Act 1989) that has a waterway management function in the area to which a proceeding before the Tribunal relates may make a submission to the Tribunal on the matters specified in paragraphs (c), (d) and (i) of subsection (1)."

12 SEWL's arguments in this appeal are set out in extensive detail in several lengthy written submissions prepared on its behalf by Dr Sadler as well as in his oral presentation. I hope that the following summary[8] of SEWL's arguments on the present issue does them justice.

13 SEWL argues as follows in support of grounds 1 and 2.[9]

(a) The Tribunal found that s 74 of the WIA imposed an implicit duty of care on SEWL but did not identify the scope of that duty. Subsection 74(1) does not of itself create a duty of care. Further, a duty of care in the abstract is meaningless.[10] A duty to whom? A duty to do or refrain from doing what? The Tribunal did not confine the duty by considerations of, say, foreseeability. SEWL was under no duty of care to Transpacific in relation to its decision whether or not to implement a proactive maintenance regime (see further below).

(b) The requirement in s 74(3)(b) to take into account "all the circumstances" suggests that in each case there should be an inquiry into whether any and what duty of care exists.

(c) The Tribunal decided that the words "negligent conduct" in s 74(1) did not import into the Act the common law of negligence. The Tribunal found that the reference to "negligent conduct" in s 74(1) was "merely a way of referring to the mental state which would find South East Water liable if the other matters in the section are made out."[11] The Tribunal's justification for that conclusion was:

(i) there was no historical material which supported the importation of common law negligence principles;

(ii) the WIA and the Water Act 1989 came into existence as a new mechanism to manage relief for flooding which did away with old common law principles;

(iii) In Re Armstrong and State Rivers and Water Supply Commission[12] and in State Rivers and Water Supply Commission v Crea[13] "their Honours proceeded on the basis that in enacting Section 74's predecessors in the Water Act 1928 and [the Water Act 1958] Parliament implicitly created a duty of care owed by water authorities to those who might suffer damage by floods from their works".[14]

(d) The justifications given for the Tribunal's conclusion are ill-founded:

(i) Subsection 74A(3) of the WIA provides that in determining a proceeding under s 74(1) "the Tribunal must apply to the questions of causation and remoteness of damage the same tests a court would apply to those questions in an action based on negligence".

(ii) In Crea the Court did not proceed on the basis of an "implicit duty of care". The Court considered whether or not a duty arose: see the references to "duties" at p 520 line 40ff. Further, the Court held (at p 532 lines 35-55) that "a 'neighbour' relationship" was established, having regard to considerations of proximity. This is significant because the provisions considered in Crea defined "negligence", whereas "negligent conduct" is not defined in s 74(1) of the WIA.

(iii) The history and provenance of s 74 is to the contrary.[15]

(iv) Legislation is presumed not to alter common law doctrines.[16]

(v) Legal words should be taken to have an acquired legal meaning.[17] "Negligent conduct" means "negligence". In Lochgelly Iron and Coal Co v McMullan,[18] Lord Wright authoritatively said: " ... negligence means more than heedless or careless conduct whether in omission or commission: it properly connotes the complex concept of duty, breach and damage ... ".

(vi) As submitted already, a duty of care in the abstract is meaningless.[19]

"The purpose of the Water Act 1989 and the analogous provisions which we find in the Water Industry Act 1994 catering for a regime of licensees rather than original authorities such as Melbourne Water was to codify the law as to liability for flows of water rather than leaving the statutory regime to operate as a gloss upon common law causes of action such as negligence or nuisance as was the case in the repealed Drainage of Land Act 1975. The fact therefore, that Section 74(1) should be regarded as creating, an entirely freestanding cause of action is not only unsurprising but consistent with the framework of the Water Act 1989 and the Water Industry Act."

However the legislative predecessors to s 74(1) first emerged in the Irrigation Act 1886 and a similarly worded section dates back at least to 1916 and was subsequently replicated in s 274 of the Water Act 1958.[20] These words were not relevantly altered when the WIA was proclaimed in 1994. It is therefore not historically accurate to conclude that s 74 introduced a new regime for the consideration of flooding claims against authorities and it is incorrect to conclude that the WIA, as part of a reform package, swept away the common law requirements embedded in the section at an earlier date. The purpose posed by the Tribunal is not set out in either the Water Act 1989 or the WIA. Further, the Drainage of Land Act 1975 dealt with flows between private citizens (now governed by s 16 of the Water Act 1989), not flows caused by water authorities.[21] Section 16 of the Water Act 1989 did indeed create a new statutory form of cause of action independent of the common law, unlike the Drainage of Land Act 1975 which fixed liability upon a pre-existing independent common law cause of action. The Drainage of Land Act 1975 left the common law causes of action on foot and established the Drainage Tribunal to hear civil claims arising out of the flow of water from the land of one (private) person onto the land of another.[22]

(f) There is nothing in the legislative history of the Water Act 1989 or the WIA to suggest that s 74(1) creates a "freestanding cause of action" in disregard of the common law of negligence.

(g) To reach the conclusion that the words "negligent conduct" are not reflective of the need to establish a common law duty, and breach, is to denude the words of any substantive legal meaning. Does it mean "carelessness"?[23] Section 74 does not create "strict liability". The duty concept provides "symmetry, consistency and defined bounds" to the law of negligence,[24] and acts as an important control mechanism.[25] The Tribunal, whilst finding that the common law is not imported, eventually determined that s 74 itself creates a duty of care (in the abstract) and then went on to consider breach. This ignores issues about the scope of the duty and also ignores the common law principles about the creation of a duty, but then applies common law principles about breach, which are themselves inexorably connected to the creation and scope of the duty. The question of breach cannot be determined without first establishing what duty was owed.

(h) The words "negligent conduct" in s 74 are coupled with the concept of "intentional" conduct. In Armstrong and again in Crea[26] the Court imported a legal concept of "intention" into the construction of the section. To give intentional conduct a legal significance but not negligent conduct is an inconsistent approach to the construction of the section.

(k) Further, SEWL did not owe a relevant duty of care to Transpacific at all. Transpacific's claim against SEWL was based on non-feasance, in the form of an omission to monitor and maintain the reticulation sewer, rather than misfeasance. SEWL accepts that recent binding authority[27] establishes or confirms that the "nonfeasance rule" has been abolished not only in relation to highway authorities but in relation to public authorities generally, and SEWL has abandoned ground 3 accordingly.[28] However, SEWL continues to rely on various points directly or indirectly related to the fact that the accusation against it was of nonfeasance rather than misfeasance, as follows:

(i) The Tribunal[29] wrongly treated the reverse onus provision[30] as the source of a duty lying on SEWL towards Transpacific.

(ii) Nothing in s 74 creates a duty to act. SEWL's functions and duties are to be found elsewhere, namely in its licence, in the requirements of the Essential Services Commissioner and in s 90 of the WIA.

(iii) The Tribunal's conclusion[31] - that s 74 imposes a prima facie liability upon a licensee for damage done by water which escapes from its works unless it proves that the escape and damage occurred without intentional or negligent conduct on its part - equates "negligent conduct" with some lesser standard than common law negligence. This is contrary to the evolution of the liability of public authorities.[32]

(iv) The Tribunal made inconsistent findings by concluding that the common law of negligence was not relevant and at the same time finding that s 74 implicitly created a duty of care and then going on to examine breach of duty and foreseeability.

(v) The Tribunal should have treated the following general principles, which (according to SEWL) are derivable from Precision Products (NSW) Pty Limited v Hawkesbury City Council[33] and certain specified cases referred to therein, as applicable to the question whether any and what duty of care was owed by SEWL:

(A) There is no general duty on every public authority to exercise reasonable care in the exercise of powers. The Court must have regard to the terms of the relevant legislation as the necessary starting point.

(B) The duty cannot be defined by reference to proximity or by reference to reliance by Transpacific on SEWL exercising a statutory function for its particular benefit.

(C) It is wrong to regard the duty as requiring SEWL to take reasonable care to guard against any foreseeable risk.

(D) A duty of care should not be imposed upon a public authority if the observance of such a duty would be inconsistent with, or have a tendency to discourage the due performance of, a public authority's statutory functions. This is the position here.

(vi) SEWL is under no legal obligation to provide sewerage services to any particular customer. Section 90 of the WIA contains no mandatory requirements. However, see s 63(2) once a request is made.[34] Once SEWL connects a customer to its works, its responsibilities in relation to sewerage are set by its 90(a) functions,[35] the requirements imposed on it by the ESC and its broad social responsibility set out in s 69 of the State Owned Enterprises Act 1992. Further, by cl 14(1)(b) of its Statement of Obligations issued by the Minister under s 8 of the WIA,[36] SEWL must implement processes to "maintain the levels and standards of service:

(i) specified by the Commission in a Code issued under section 4F of the Water Industry Act 1994; or

(ii) included in a Water Plan and approved by the Commission."

The Code is the Customer Charter to which the Tribunal referred[37] and the Water Plan is the Sewerage Collection System Reliability Management Plan to which the Tribunal also referred.[38] The power vested in SEWL is therefore one of judgment. The power to manage the system is not exercised for the benefit of the occupier. Rather, the exercise of the power is for the benefit of the public by managing the sewerage system.

(vii) The Wrongs Act 1958 amendments made in 2003 post-date the 1994 Act. Therefore the WIA must be read subject to the 2003 Wrongs Act amendments.

(viii) Having regard to the Wrongs Act criteria and the principles established by the courts in determining whether or not a public authority is under a duty of care, in the circumstances SEWL had no relevant duty of care to Transpacific as:

(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.

14 Ground 2(b) includes an assertion in the alternative that the Tribunal should have found that SEWL did not breach any relevant duty of care to Transpacific. It is questionable whether an assertion framed in that way raises a question of law as distinct from a question of fact. In any event, I do not need to consider the correctness of the assertion. SEWL did not advance any submissions in express support of it under ground 2(b), although many of the matters advanced before this Court in relation to the question of "duty" might have had relevance in the Tribunal to the question of "breach". It is true that various subsequent grounds repeat the assertion, and that SEWL's lengthy written submissions include submissions in support of it under some of those grounds. However, if the Court were persuaded that s 74(1) attracted the ordinary common law principles of negligence ("duty, breach, damage") then, subject to one possibility, SEWL would succeed in this appeal on the "duty" basis alone. The one possibility is that the Court might be persuaded that the common law duty happened to be exactly equivalent to the "implicit duty" found by the Tribunal. In relation to that possibility, however, SEWL no longer suggests that it could succeed in this appeal by attacking the Tribunal's finding on "breach", except in a limited fashion, namely, by submitting that the Tribunal failed to take into account two allegedly mandatory considerations, being, first, a certain provision of the Wrongs Act 1958 (s 83(b) - see below) and, second, the service standards set by the ESC. The appeal is limited to questions of law as distinct from questions of fact. Dr Sadler conceded, towards the end of his oral argument, that, in relation to a common law negligence claim, "it's a factual question whether you have breached a duty or not",[45] although I understand that he reserved the right to rely on the two "mandatory considerations" points just mentioned.

15 Despite his concession, Dr Sadler commenced to argue that SEWL could advance a closely related contention. He submitted that if s 74 does not involve a question of common law duty and breach, then the notion of negligent conduct is a "statutory construct", and that it is "a question of law whether the facts as found or as led in evidence demonstrate [that] that statutory construct has been met".[46] I replied that, on my reading of ss 74(1) and (2), once the claimant proved that there was a flow of water from the licensee's works onto land and consequent damage to the claimant, then the licensee was liable unless it could prove that the flow did not occur as a result of intentional or negligent conduct on its part; that SEWL had failed to persuade the Tribunal of that negative proposition on the evidence; and that in the present appeal, which was limited to a question of law, SEWL faced an unusual and difficult hurdle, namely to persuade this Court that it had simply not been open to the Tribunal not to be satisfied that SEWL had discharged its burden of proof (of the negative proposition)[47]. Dr Sadler immediately acknowledged that SEWL was not in a position to overcome a hurdle of that description.[48] However he proceeded to cite certain authorities in which it has been said that it is frequently a question of law whether facts fully found come within the provisions of a statutory enactment properly construed.[49] He then said:

"I'm entitled to seek to persuade you on the balance of probabilities and in accordance with s 74 that the evidence should have persuaded the Tribunal that negligent conduct had not occurred."[50]

I replied that those authorities would not permit Dr Sadler to refer to and rely upon the evidence before the Tribunal as distinct from the factual findings of the Tribunal. Dr Sadler responded that, if I was of that view, he would not press the matter further.[51]

16 I am satisfied that what I put to Dr Sadler was correct as a matter of legal principle.[52] As a result of the (further) concession which, on that basis, Dr Sadler ultimately made, there is no need for me to analyse, from the point of view of "breach" at common law or from the point of view of "negligent conduct" as a "statutory construct", all of the extensive evidentiary and factual material which had been canvassed from one or other of those viewpoints in Dr Sadler's written submissions. Nevertheless, partly because it is difficult to quarantine the parts of the submissions directed to "duty" from those directed to "breach", I have in fact paid careful regard to all of SEWL's written submissions. So far as appears from my perusal thereof, I consider that Dr Sadler's concessions were correctly made. So, apart from the two "mandatory considerations" points, I can safely put aside so much of ground 2(b) as relates exclusively to "breach" or to "negligent conduct" in the sense just discussed. The same applies to those subsequent grounds or parts of grounds which are to the same effect. I will identify those grounds or parts as I proceed through the remainder of the amended notice of appeal.

Ground 4: Relationship with and application of Wrongs Act provisions

"4. (a) The Tribunal was wrong in law in the construction of s.74(1) Water Industry Act 1994 in holding that the effect of s.74(1) was such that Part XII and ss 83-85 of the Wrongs Act 1958 were irrelevant to the question of whether the Appellant was under a duty of care to the Respondent.

(b) The Tribunal should have found that the provisions of that Part XII and ss 83 and 85 of the Wrongs Act 1958 were relevant to the question of whether the Appellant was:

and that having regard to Part XII and ss 83 and 85 of the Wrongs Act 1958 the Appellant was under no relevant duty of care to the Respondent or alternatively did not breach any relevant duty of care, and therefore had not conducted itself negligently for the purposes of s.74(1) and was not liable to the Respondent."

18 Before the Tribunal, in relation to both duty and breach, SEWL relied not only on Part XII of the Wrongs Act 1958 (which is entitled "Liability of Public Authorities") but also on Part X thereof which is headed "Negligence". The Tribunal set out each of the provisions of Part X on which SEWL so relied and applied them, but decided nevertheless that they did not produce a result favourable to SEWL. SEWL does not challenge any aspect of the Tribunal's reasoning in relation to Part X with regard to duty or breach.[53]

19 Further, despite the language of ground 4, SEWL does not now suggest that the Tribunal regarded Part XII of the Wrongs Act 1958, which includes ss 83 and 85, as being irrelevant to the question of "breach" (or to the question of "negligent conduct" in the sense referred to above), although, as mentioned above, SEWL did (belatedly) suggest that the Tribunal had failed to take into account one particular provision, namely s 83(b) (see below), in relation to "breach". However SEWL's main submission under ground 4 is that the Tribunal did not interpret Part XII (and s 83 in particular) as requiring it to consider whether SEWL owed Transpacific a duty of care, and that the Tribunal was wrong in law in that regard.

20 Sections 83 and 85 of the Wrongs Act 1958 read:

"83 Principles concerning resources, responsibilities etc. of public authorities

In determining whether a public authority has a duty of care or has breached a duty of care, a court is to consider the following principles (amongst other relevant things) -

(a) the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions;

(b) the functions required to be exercised by the authority are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceeding relates);

(c) the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceeding relates.

85 Exercise of function or decision to exercise does not create duty

In a proceeding, the fact that a public authority exercises or decides to exercise a function does not of itself indicate that the authority is under a duty to exercise the function or that the function should be exercised in particular circumstances or in a particular way."

21 Part XII commences with s 79. It contains the following definition, among others:

'negligence' means failure to exercise reasonable care;

... ."

Section 79 also contains a definition of "public authority" which covers SEWL.

22 Section 80 deals with the application of Part XII. It reads:

(1) This Part (except section 84) applies to any claim for damages resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise.

(2) Subsection (1) and section 84 do not apply if the relevant enactment contains express provision to the contrary."

23 As developed, SEWL's submissions under ground 4, insofar as not made redundant by Dr Sadler's abovementioned concessions,[54] may be summarised as follows:

(a) When considering whether SEWL was under a duty, the Tribunal disregarded the s 83 criteria, but had regard to them from a breach of point of view.[55] The Tribunal's disregard of the Wrongs Act provisions from a duty perspective was based upon its conclusion that there was a duty implicit in s 74 itself.

(b) As provided by s 80(1), Part XII applies to claims for damages "resulting from negligence" brought "under statute". The exception in s 80(2) is not applicable, because the WIA does not contain "express provision to the contrary". The corollary is that the considerations set out in s 83 are mandatory and must be taken into account, but the Tribunal failed to do so in relation to duty.

(c) As to duty, the Tribunal failed to analyse the financial resources available to SEWL or to consider the way in which those resources were allocated or to analyse the many functions required to be carried out by SEWL.[56] It failed to take into account that SEWL's system of reacting to complaints worked.

(d) To echo the language of the Minister's Second Reading Speech for the 2003 Wrongs Act amendments, the effect of the Tribunal's decision is neither balanced nor fair and does not restrict the expansion of the liability of SEWL.

Ground 6: Relevance of Service Standards Approved by Essential Services Commissioner

"6. (a) The Tribunal was wrong in law in finding that:

(i) the service standards set for the Appellant by the Essential Services Commissioner, and embodied in the Applicant's customer charter, and compliance by the Appellant with those standards, were irrelevant to the question of whether or not the Appellant had acted with reasonable care;

(ii) that the standard 'namely three interruptions per annum for each customer as an indicator of what is reasonable or what is non-negligent, has ... no credibility' [(para 62)] [and is] absurdly low' (para 77);

(b) The Tribunal should have found that the existence of the standard was relevant in determining the scope of the duty of care owed by the Appellant to the Respondent, that compliance by the Appellant with the standard was relevant in assessing breach of duty and that by reason of the Appellant's compliance with the standard it had not breached any duty of care it may have owed to the Respondent."

25 Omitting duplication, SEWL's extant submissions under ground 6 may be summarised as follows:

(a) The service standard set by the ESC and contained in SEWL's charter is "Sewer blockages (per 100 km) (18)" and "Customers receiving 3 sewer blockages in a year (8)" and "Spills contained within 5 hours (100%)". SEWL met each of these service standards. The service standards recognise that blockages and spills will occur.

(b) SEWL sets its maintenance program according to a risk analysis.

(c) The Tribunal found that the service standards, which are embodied in SEWL's customer charter, and the fact of compliance by SEWL with those standards, were irrelevant to the question whether or not SEWL owed a duty of care or acted with reasonable care; and that the standard "namely three interruptions per annum for each customer as an indicator of what is reasonable or what is non-negligent, has ... no credibility[57] [and is] absurdly low".[58] In so concluding, the Tribunal effectively determined that the decision of the independent regulator was irrelevant and, in any event, wrong.

(d) Licensees' prices are set having regard to the conduct required to meet the standards. If the standards are to be regarded as "absurdly low" then SEWL will be required to alter its maintenance program and in turn expend further funds managing that and consider passing those costs on to its customers. However, both the funding (as set by the price regulator) and the standards are set by the ESC. Performance and funding are linked.

(e) The ESC standards must be taken into account in setting behavioural standards by SEWL. To simply disregard them is to ignore an imperative for behaviour which SEWL is required to comply with (s 4F(6) WIA). They are matters which are relevant to breach pursuant each of sub-s (a), (b) and (c) of s 83. The service standards are applicable standards for the purposes of s 83(c).

(f) VCAT acknowledged (para 77) that the service standard is a matter which it is "obliged to consider". However, by regarding the service standard as so "absurdly low" it did not give proper, genuine or realistic regard[59] to the fact that SEWL had complied with an independently set applicable standard.

(g) VCAT's finding is inconsistent with s 83(c) Wrongs Act. There was no evidence as to whether the service standard was credible or low. To reach a conclusion about the "absurdity" of an independent regulator's service standard, without evidence, is not a conclusion properly open to the Tribunal.

26 Grounds 7-10 were grouped under the heading "breach of duty" in the amended notice of appeal and were expressed as follows:

"7. (a) The Tribunal erred in law in that it found that 'there was as at 2000 a foreseeable risk that the occupier of the premises at No. 8-14 Havelock Road would suffer serious damage as a result of a second sewage spill. That risk was not insignificant. There was in my view a significant probability that harm would occur if care were not taken by way of some additional action beyond merely clearing the sewer' (par 66);

(b) The Tribunal should have found that as at 16 June 2006 there was not a reasonably foreseeable risk that the occupier of the premises at No. 8-14 Havelock Road would suffer serious damage as a result of a second sewage spill.

8. (a) The Tribunal was wrong in law in adopting the year 2000 as the date at which to assess whether or not there was a foreseeable risk of harm (para 66);

(b) The Tribunal should have assessed the risk of harm as at some time shortly before 17 June 2006.

9. (a) The Tribunal was wrong in law in finding that the Appellant by the adoption of its practice that it paid special attention to a sewer section when it has attracted stoppages on at least two occasions in a 12 month period ('the practice') had not proven that the relevant flow did not occur as a result of its 'negligent conduct';

(b) The Tribunal should have found that the Appellant by the adoption of its practice had proven that the relevant flow did not occur as a result of its 'negligent conduct'.

10. (a) The Tribunal was wrong in law in finding that the Appellant had not proven that the relevant flow did not occur as a result of its 'negligent conduct' as set out in s.74(1) Water Industry Act 1994;

(b) The Tribunal should have found that the Appellant had proven that the relevant flow did not occur as a result of its 'negligent conduct' as set out in s.74(1) Water Industry Act 1994."

27 Ground 7, being merely a factual complaint about "breach", falls away because of Dr Sadler's abovementioned concessions. At first sight, grounds 8-10 seem to be in the same category. However, in his written submissions, Dr Sadler contends that grounds 8-10 focus on causation.[60] He submits that s 74A(3) of the WIA requires that the Tribunal apply the same tests to causation as a court would apply in a claim in negligence. That in turn, he submits, brings in s 51 of the Wrongs Act 1958, which, under the Divisional heading "Causation", provides:

(1) A determination that negligence caused particular harm comprises the following elements -

(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation); and

(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).

(2) In determining in an appropriate case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be taken to establish factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm (the injured person) would have done if the negligent person had not been negligent, the matter is to be determined subjectively in the light of all relevant circumstances.

(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party."

Dr Sadler submits that even if SEWL's nonfeasance were factually causative of the harm, the Tribunal should not have imposed responsibility for Transpacific's harm on SEWL. He submits that the Tribunal should not have done so for 6 essentially factual reasons listed in his written submissions[61]. In substance each proffered reason has already been mentioned above or will be mentioned below under different headings.

Ground 11: Consideration of policy and spending decisions

"11. (a) The Tribunal was wrong in law in finding that it was 'difficult to regard the allocation [of funds by the Appellant] for preventative maintenance which has been made as being in all the circumstances adequate' (para 69), and that by reason thereof or alternatively having regard thereto the Appellant had not disproven the allegation that the flow of water from its works which caused damage to the [respondent] was the result of 'negligent conduct';

(b) The Tribunal should have found that the allocation of particular funding levels by the Appellant to preventative maintenance was a policy decision by the Appellant and not properly the subject of judicial analysis or alternatively the allocation of funds by the Appellant for preventative maintenance was in all the circumstances adequate or reasonable."

29 Under this ground, SEWL advances the sweeping proposition that "[p]ublic utility expenditure on infrastructure and the adequacy of that expenditure is a policy decision and not justiciable in a claim such as the present".[62] SEWL takes issue with the Tribunal's view[63] that, whatever may be the validity of the proposition in other contexts, it is not applicable in the face of the specific provisions of the Wrongs Act 1958 and the WIA referred to above. SEWL insists that the Tribunal cannot "second guess" its budgeting and resource allocation decisions. Further, SEWL criticises a comment made by the Tribunal[64] to the effect that SEWL's operation is not a "zero sum game" and that "[i]f rates on every customer were increased by say $2 per annum it would on the face of it be possible to double the maintenance budget the subject of the present proceeding". SEWL says that this "ignores the reality that SEWL does not control its own pricing". Finally SEWL submits that the reverse onus in s 74 does not mean that in every flooding case the licensee must expose all of its management decision making processes about resource allocations to the scrutiny and assessment of the Tribunal. If funds had been allocated and available for the relevant purpose but had not been spent, that might be relevant to liability, but, according to SEWL, no deeper inquiry is appropriate.[65]

"12. (a) The Tribunal was wrong in law in finding that the Appellant was responsible for the malfunctioning of the Overflow Relief Gully located on the Respondent's premises (para 49):

(b) The Tribunal should have found that:

(i) the Respondent was responsible to ensure that it take all reasonable steps to look after its own interests and ensure that its internal plumbing on its site is operating effectively;

(ii) the Respondent, by failing to ensure that the Overflow Relief Gully was operating effectively, had not taken all reasonable steps to look after its own interests and ensure that its internal plumbing was operating effectively;

(iii) by reason of the failure of the Overflow Relief Gully the Appellant's liability to the Respondent was discharged or should have been reduced [proportionately] in accordance with s.74(4)(b)."

1"> 31 SEWL's submissions in support of this ground may be summarised as follows:

(a) If the ORG had functioned effectively it would have "popped up" and released pressure from the system.

(b) The ORG was found to have been blocked from the inside by toilet paper and debris.

(c) The Tribunal found that the total attribution for the failure of the ORG lay with SEWL.

(i) SEWL had no control over the ORG. It was not SEWL's property and was located wholly on Transpacific's property.

(ii) Regulation 333 of the Water Industry Regulations 1995 provides:

"An owner must take all reasonable steps to keep all sanitary drains and fixtures on or serving the owner's property to the point of connection with the licensee's sewerage works in repair and in good working order so that they operate in an efficient and hygienic manner: Penalty 3 penalty units ... ".

(ii) Clause 11.3 of the Customer Charter states that "you will need to keep any inspection shaft, grate, vent or grease trap connected to those works clean, clear and accessible at all times".

(iv) The National Plumbing Code AS 3500, clause 4.6.6 regulates the installation of ORGs.

(e) There was no evidence to support a conclusion that SEWL was responsible for the management of the ORG. SEWL is entitled to rely on owners taking all reasonable steps to ensure that their own internal plumbing operates effectively. In Smith v Littlewoods Ltd[66] Lord Goff of Chievely repeated the principle that there is an obligation on us all to take steps to protect our own property.

(f) By reason of the failure of the ORG, SEWL's liability should have been discharged, or reduced proportionately in accordance with s 74(4)(b) of the WIA. The Tribunal did not make any determination of the extent of the flow attributable to the ORG's failure. The difficulty in determining what harm was caused by what flow of water is not an impediment to the legal assessment of damages.[67]

Consideration of the main issue: "negligent conduct" and duty of care: grounds 1, 2, 4 and 6

32 In my view, the references to "negligent conduct" in s 74 of the WIA do not require that an independent duty of care be identified in accordance with the common law principles that govern the tort of negligence.

33 The appellant's arguments in this regard simply cannot stand with the language of the statutory provisions in question.

34 Nor, in my view, is the appellant assisted by the legislative history of the relevant provisions or by previous authority on the interpretation of the predecessors of those provisions. Quite the contrary.[68]

35 Nor do the provisions of the Wrongs Act 1958 relied on by SEWL or the ESC's service standards make a relevant difference.

36 The main flaw in the appellant's case is of the kind identified by Neave JA in her concurring judgment in Central Goldfields Shire v Haley[69]. Her Honour remarked that in endeavouring to identify the scope of an occupier's duty under s 14B(3) of the Wrongs Act 1958, it would be incorrect to begin the analysis by applying the common law duty of care.[70] Her Honour quoted with approval[71] the following passage from the dissenting judgment of Kirby J in Neindorf v Junkovic[72]:

"This Court has repeatedly said in recent times that, where a statute of relevant operation has been enacted, it is the duty of Australian courts to start their analysis of the legal liability of parties affected not with the pre-existing common law but with the statutory prescription. The reason for this requirement is simple. Legislation of a Parliament, acting within its constitutional powers, has an authority that displaces the common law to the extent of the statutory provisions. Where Parliament has spoken, it is a mistake to start with common law authority."

Though Kirby J was dissenting in Neindorf, this passage is on all fours with remarks made by Hayne J, as part of the majority, in the same case,[73] and with many other similar expressions of view by Justices of the High Court in recent years.[74]

37 Subsection 74(1) says in terms that it is creating a liability in certain specified cases, not merely that it is recognising or modifying a liability created by the common law or otherwise created.[75] It provides that if certain specified conditions are satisfied, the relevant licensee "is liable" to pay damages. This contrasts starkly with one of the predecessors of s 74. Until 1916, s 213 of the Irrigation Act 1886 provided, by way of exception from a wide immunity conferred by s 212 thereof, that the relevant public authorities should be liable to make compensation, subject to certain (mainly procedural) conditions and limitations, for injury, loss or damage caused by, among other things, flooding "if such injury loss or damage be such as would but for this Part have been a good cause of action ... ". I will return to the legislative history in due course, but this example at least shows that if in 1994 Parliament had intended to pick up the whole of some extraneous cause of action (such as negligence) it could easily have said so expressly, just as it had done in 1886. But it did not.

38 Further, whereas the language of the 1886 provision shows clearly that it was intended to operate by reference to the relevant extraneous law as it might develop from time to time rather than as it was in 1886, there would be no corresponding clarity about s 74 of the WIA on the appellant's interpretation of "negligent conduct". The appellant says that it means "negligence" in the sense of the tort of negligence. But negligence as understood at what time? Did Parliament intend in 1994 that future changes to the common law or future statutory modifications of the common law (such as the 2003 amendments to the Wrongs Act 1958) should be taken into account? Parliament did not say.[76] In my view it did not say because in 1994 it did not intend to pick up the common law principles relating to the tort of negligence at all, except to the extent expressly specified in s 74A(3).

39 Indeed, contrary to SEWL's submissions, s 74A(3) itself indicates strongly that the other relevant provisions of the WIA do not pick up any principles governing the tort of negligence. To say that in determining "a proceeding under section 74(1)" the Tribunal must apply to the questions of causation and remoteness of damage the same tests a court would apply to an action "based on negligence" is necessarily to imply that a proceeding under s 74(1) is not an action "based on negligence". Indeed s 74A(3) would have been completely unnecessary if s 74(1) or other provisions of the WIA had picked up the tort of negligence. I would add that the repeated use in sub-sections (2), (3) and (4) of s 74 of the expression "a proceeding under section 74(1)" is at least strongly consistent with the view that s 74(1) provides for a freestanding statutory cause of action.

40 There are numerous other aspects of ss 74, 74A and 74B of the WIA that are very difficult, if not impossible, to reconcile with the appellant's central proposition.

41 The critical expression in ss 74(1) and (2) is "negligent conduct", not "negligence". It is part of a larger expression, "intentional or negligent conduct". The emphasis is on the conduct of the licensee, not on the licensee's pre-existing relationships with others. Both "intentional" and "negligent" are adjectives. Each describes a quality or attribute required to be found in the conduct in question. A need to identify a prior duty relationship seems to be quite foreign to the concept of "negligent conduct" as conveyed by the ordinary meaning of that expression in its immediate context.

42 The legal meaning is no different, in my opinion. SEWL's submissions proceed on the basis that "negligent" is a legal word with a meaning to be found exclusively by reference to the principles governing the common law tort of negligence. Particular reliance is placed on the quotation from Lochgelly Iron and Coal Co v McMullan[77] set out above. On that basis SEWL submits that "negligent" necessarily picks up such of those principles as relate to the need to identify a duty of care. However, SEWL's reliance on Lochgelly is misplaced. SEWL has omitted the opening words of the relevant sentence in Lord Wright's speech, namely: "In strict legal analysis ... ". Moreover, Lochgelly arose out of a negligence claim brought under the common law.[78] Lord Wright was not saying that every statutory or other legal use of the term "negligence" connoted "the complex concept of duty, breach and damage". Legal uses of the words "negligence" and "negligent" (and cognate expressions) pre-date considerably the emergence of, and extend well beyond the subject of, the relatively modern tort of negligence. For example, negligence, in the sense of careless conduct, may be an ancillary element in some forms of nuisance.[79] Indeed the concept of negligence is not confined to tort law. For example, it has long been a part of the definition of various kinds of crimes.[80] In Charlesworth and Percy on Negligence[81], which is probably the leading text book on the subject in the common law world, at the very beginning of Chapter One (headed "The Meaning of Negligence") the learned authors say:

"Three meanings of negligence. In forensic speech, 'negligence' can have three meanings: (1) in referring to a state of mind, when it is distinguished in particular from intention; (2) in describing conduct of a careless type; and (3) as the breach of a duty to take care imposed by either common law or statute. In some circumstances the three meanings can overlap."[82]

43 The authors go on to show that references to "intentional" and "negligent" being opposed are legion.[83] Moreover they point out that "negligence" has been used in the sense of careless conduct without reference to an antecedent duty of care in many kinds of cases. Perhaps the best illustration, as they say, is contributory negligence.[84] They give several other examples,[85] including, indeed, some from cases relating to the escape of collected water.[86]

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.

45 In these circumstances it is tempting to see the reference to "negligent conduct" in s 74 as broadly corresponding to the "breach" element of the tort of negligence, as the Tribunal itself may have done in this case, judging by its language. There may be no harm in that, as long as the Tribunal bears steadily in mind that this is a freestanding, statutory cause of action, to be assessed according to the provisions of the WIA and the provisions of any other applicable statute, not according to common law principles save to the extent that the legislation itself indicates otherwise.[90] In any event, SEWL does not suggest, nor could it, that Deputy President Macnamara failed to appreciate that s 74 created a freestanding statutory cause of action. He said so in terms. Indeed this is the very thing about which SEWL mainly (though, in my view, mistakenly) complains.

46 Another aspect of s 74(1) that points to the same interpretation is that it contains undifferentiated references to different kinds of harm. By contrast, under common law principles a substantial distinction is drawn between liability for personal injury or physical damage to property, on the one hand, and liability for purely economic loss, on the other, in terms of the duty of care.[91] However s 74(1) refers to all three forms of harm without distinction as to the circumstances that will produce liability. Thus it is not envisaged by s 74(1) that different duties of care might arise according to the type of harm suffered. It seems clearly to follow that it is not envisaged by s 74(1) that a claim that otherwise satisfied the statutory requirements could be defeated by the licensee by showing that, under common law negligence principles, no duty of care arose at all.

47 The next indication within s 74 that the tort of negligence is not picked up is given by s 74(2), the reverse onus provision. By virtue of that sub-section, if the other relevant conditions are satisfied, the licensee must disprove negligent conduct. Such a provision would not likely have been included if Parliament had had in mind an inquiry in accordance with common law principles into the question whether the particular claimant was owed a duty of care by the licensee as a statutory authority. The factors that would be relevant to such an inquiry are mainly factors that would not be particularly onerous for the plaintiff to prove, being concerned with the relationship between the parties and their respective general positions.[92] On the other hand, requiring an individual claimant to prove that a water utility did not exercise its functions in accordance with a particular standard (such as reasonable care) might be thought unduly onerous; and one can readily understand a Parliamentary choice to reverse the burden of proof in that regard. Indeed, the Parliamentary debates surrounding the introduction in 1916 of the predecessor to s 74(2) seem to have proceeded on that very footing.[93]

48 Next, s 74(3)(b) points strongly against SEWL's position. It contains detailed guidance as to the matters to be taken into account in determining "whether or not a flow of water occurred as a result of negligent conduct on the part of a licensee". No other matters are expressly required to be taken into account. It is true that s 74(3)(b) provides that account must be taken of "all the circumstances". But that expression must be read in its context. It surely refers only to [all of] the relevant circumstances. SEWL begs the question by submitting that any circumstances that would be relevant at common law in determining whether a water utility owed others a duty of care would necessarily be relevant here. Moreover, "all the circumstances" is immediately followed by the word "including" and then by a lengthy list of considerations all of which seem far more relevant to an assessment of the degree of care and skill exhibited by the licensee in connection with the works in question,[94] than to an assessment of whether or to what extent it would be appropriate to hold the licensee to a duty of care to the claimant.[95] There is ample room under s 74(3)(b) - with its references to "all the circumstances" and to planning and design - for the operation of considerations of foreseeability similar to those relevant at the "breach" stage of common law negligence.

49 The special nature of "a proceeding under subsection (1)" of s 74 is further indicated by the various limiting provisions contained in s 74(4), especially those in paragraphs (b) and (c) thereof. Paragraph (b) is particularly enlightening. It brought in a form of proportionate liability for claims under s 74(1) some 8 years before broader provisions concerning proportionate liability were included in the Wrongs Act 1958.[96] In addition, s 74(4)(b) recognised, apparently, that, at least in 1994,[97] the doctrine of contributory negligence had no application to claims under s 74(1).

50 Even more striking is s 74(5), which provides that s 74 "does not create any liability in respect of a flow of water from the works (including any dam) of a licensee in the exercise of a function under its licence if that flow is reasonable". The use of the word "create" is telling in itself (see above). Moreover, s 74(5) is to be read with s 74B, which regulates in detail the matters that must be taken into account in determining whether a flow of water is reasonable or not reasonable. Subsection 74B(2) requires that greater weight be given to certain specified matters than others. Such detailed regulation of the circumstances in which liability may or may not arise is quite inconsistent with the application of common law negligence principles.

51 Returning to s 74A, it is noteworthy that subsection (1) thereof refers to "causes of action ... arising under section 74(1)", thus using language consistent with the notion that s 74(1) creates, rather than incorporates, causes of action. Subsection 74A(2) includes further provisions that would have been unnecessary in relation to an extraneous cause of action, such as the provisions for injunctions and declarations, and also provisions that are specially devised for proceedings under the WIA, such as the provision for an order with respect to the "continuation, removal or modification of works".[98]

52 All in all, the provisions of ss 74, 74A and 74B of the WIA, on their face, seem squarely to deny the appropriateness of SEWL's resort to common law negligence principles.

53 Three issues remain in relation to SEWL's principal contention. First, is the prima facie effect of ss 74, 74A and 74B to be denied by reference to authorities relating to their predecessors or otherwise by reference to the legislative history of the provisions? Second, has s 83 of the Wrongs Act 1958 effectively transformed claims under s 74 of the WIA into claims in negligence, at least to the extent that a question will arise in each case as to whether any and what duty of care was owed to the claimant by the licensee? Third, do the service standards of the ESC affect the question of duty?

54 As to the first of these issues, I note that the Victorian Parliament has made provision in relation to compensation for damage caused by flooding since 1886. The history of the legislation up until 1951 was comprehensively considered by Sholl J in Re Armstrong and State Rivers and Water Supply Commission ("Armstrong")[99]. The history was updated to 1979 by the Full Court in State Rivers and Water Supply Commission v Crea ("Crea")[100]. The WIA was passed some 15 years later. Sections 74, 74A and 74B are similar in some ways to their predecessors but different in other ways. Dr Sadler relies mainly on Crea rather than Armstrong. However, presumably because of the differences between the various old provisions and the new, Dr Sadler does not suggest that either case contains any ruling that bound the Tribunal or that would bind me in relation to the interpretation of the current provisions.

55 In any event, like the Tribunal,[101] I cannot see anything in the legislative history or in Armstrong or Crea that assists SEWL in this matter. Quite the contrary. At least since 1916, in my view, the legislation has never required the identification of a separate duty of care. Rather, the emphasis has been on ascertaining whether there was a want of reasonable care and skill on the part of the relevant authorities. Thus in Armstrong, Sholl J said[102]:

"But by what standard now is one to determine, first of all, liability for 'negligent flooding'? Presumably the Legislature is now to be taken to have directed an arbitrator to judge the acts or omissions of an authority by reference to an implied duty of the authority, in exercising its statutory powers and carrying out its statutory duties, to exercise reasonable care in the circumstances to prevent flooding of the lands of others - i.e., some such duty as Cussen J. was thinking of when he referred to 'breach of a statutory duty express or implied or otherwise under the Statute' - see [1920] V.L.R., at pp. 528-9."

The expression "negligent flooding" that was considered by Sholl J was not elaborated upon in the legislation of the day. In itself, however, it is similar to the expression "negligent conduct" now contained in s 74 of the WIA. Sholl J did not suggest that a separate duty of care needed to be identified. Rather, the Commission was implicitly obliged to "exercise reasonable care in the circumstances to prevent flooding of the lands of others". I consider that Sholl J's judgment provides substantial support for the approach of Deputy President Macnamara.

56 Crea points in the same direction. At the relevant time, under s 274(1)(b) of the Water Act 1958, the defendant Commission was liable for, among other things, "damage caused by flooding ... by the negligence of the [Commission]". "Negligence" was defined in s 274(3) as follows:

"'Negligence' means omission or failure in the planning design construction maintenance or operation of works, to provide reasonable standards of capacity or efficiency or exercise reasonable care or skill having regard to -

(a) the state of scientific knowledge and knowledge of local conditions at any relevant time;

(b) the nature and situation of the works;

(c) the service to be provided by the works; and

(d) the circumstances and cost of the works and of the maintenance and operation thereof. ... ."

This was a true definition ("'negligence' means ... "), unlike s 74(3)(b) of the WIA which requires only that certain things be taken into account. Further, the definition did not in terms require the decision-maker to have regard to any matters other than those listed, whereas s 74(3)(b) of the WIA requires the Tribunal to take into account "all the circumstances". Otherwise, however, the language of the corresponding provisions is quite similar. The Full Court commented that "the correct way to apply the definition is to regard the judgment of reasonableness as having to be formed from a synthesis of all four headings, balanced according to the evidence, with the qualification that each of the four may in an appropriate case set a limit to the requirements of reasonableness".[103] There was an issue between the parties as to whether the Commission had been negligent in the maintenance of a drain that ran along the boundary of the plaintiffs' property. In that context, the Commission had emphasised that "the service to be provided" (within the meaning of those words in the definition) by the drain as originally conceived was limited, and had in fact been provided, so that there had been "no relevant failure in care".[104] The plaintiffs had argued, however, that "while the [Commission's] duty of care may not have extended to remodelling the drain, it did extend to keeping it at its optimum level of performance in order to avoid detriment which, in the local conditions, would otherwise occur".[105] The Full Court dealt with these competing contentions in the one paragraph on which Dr Sadler placed any real reliance. The Full Court said[106]:

"On this issue, we uphold the plaintiffs' submission. We reject the appellant's as too rigid to be appropriate to the assessment in infinitely variable circumstances of a standard of reasonable care, or, in the terms of the Act, as giving inadequate weight to the element of knowledge of local conditions. We think that the plaintiffs' is appropriate to a situation where the authority's works are necessarily situated in proximity to land susceptible to injury with the result that a 'neighbour' relationship is established.

Contrary to Dr Sadler's submissions, I do not accept that the Full Court was here asking itself whether a (general) duty of care between the Commission and the plaintiffs should be recognised according to Atkinian principles. Rather, it was asking itself what reasonable care called for in relation to the drain. The Full Court had earlier referred extensively to the judgment of Sholl J in Armstrong without adverse comment.[107] To use the Full Court's own words, it was really addressing and applying "a standard of reasonable care" in the particular circumstances. It is not unusual to speak in terms of "duty" in carrying out such an exercise, especially when the complaint is of omission rather than commission.[108] The reference to a "neighbour" relationship was natural in view of the physical proximity of the drain to the plaintiffs' property. There is absolutely nothing else in the long judgment of the Full Court that even remotely suggests that common law principles relating to the tort of negligence needed to be applied. Rather, the whole thrust of both Armstrong and Crea was towards an assessment of the extent to which (if at all) "there has been an absence of reasonable care and skill on the part of the [authorities]".[109] A need for such an assessment was seen in those cases to be implicit in the relevant provisions. In that sense, those provisions were seen in those cases to impose an implied duty of care, as Deputy President Macnamara rightly perceived.

57 Further, contrary to SEWL's submissions, the learned Deputy President was fully alive to the real distinction between the provisions of the Drainage of Land Act 1975 (since repealed) and the provisions of the predecessors of s 74 of the WIA.

58 SEWL's submissions to the effect that Deputy President Macnamara misunderstood the legislative history and the prior authorities are themselves misconceived.

59 There is nothing in the authorities concerning the predecessors of s 74 of the WIA or in the general history of the section that supports SEWL's construction of it.

60 I turn to the Wrongs Act 1958.

61 Notwithstanding the terms of ground 4 of the amended notice of appeal, Dr Sadler placed no real reliance on s 85 of the Wrongs Act 1958. He concentrated on s 83.

62 Deputy President Macnamara said[110]:

"Sections 83 and 84 of the Wrongs Act are relevant only in so far as they touch upon issues of breach of duty. Section 83 deals with the proof of a duty of care owed by a public authority. For the reasons previously given no issue as to the existence of a duty of care arises under the statutory cause of action under Section 74(1)."

1"> 63 In substance, I agree with these remarks.

64 The Tribunal accepted that a claim under s 74(1) of the WIA was "a claim for damages resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise", within the meaning of s 80(1) of the Wrongs Act 1958. Noting that "negligence" is defined (in s 79) to mean "failure to exercise reasonable care", I am prepared to assume, without deciding, contrary to Transpacific's submissions, that a claim under s 74(1) of the WIA is a claim "resulting from negligence" within the meaning of s 80 of the Wrongs Act 1958. Otherwise Transpacific did not deny before me that such a claim falls within s 80[111] and that Part XII of the Wrongs Act 1958 applies to it accordingly.

65 Nevertheless, I note that s 83 of the Wrongs Act 1958 is expressed to apply only to "a court". There is no reference to the Tribunal or to tribunals generally. Deputy President Macnamara does not mention the question whether the Tribunal is "a court" for the purposes of s 83. Being a statutory tribunal it is not a court in the strict sense.[112] "Court" is not defined in or for the purposes of Part XII of the Wrongs Act 1958. By contrast, "court" is defined in and for the purposes of Part IVAA (Proportionate Liability) of the Wrongs Act 1958 as including "tribunal". However, even without such a definition, the Tribunal has sometimes been held to be a court for the purposes of particular statutory provisions.[113] In any event, no point was taken by Transpacific in this respect and so, again, I will assume, without deciding, that s 83 applies to the Tribunal.[114]

66 However, I do not accept that s 83 has the effect that the Tribunal must, in every case to which Part XII applies, determine whether the relevant public authority has a duty of care and, if so, the scope of it.

67 Assume that some Victorian statute, passed before s 83 of the Wrongs Act 1958 was introduced in 2003, expressly provides that a particular public authority has a duty of care of a specified kind and scope. To say that, by reason of s 83, the public authority may now owe no duty of care at all or may now owe some duty different in kind or scope from that specified in the earlier Act would be to say something not only very surprising but also so repugnant to the earlier statute as to amount to saying that s 83 has worked an implied repeal of the earlier Act to that extent.[115] To take an even starker example, assume that the earlier statute expressly provides that a particular public authority is under no duty of care in the relevant respect or even that it is immune from any claim at all resulting from negligence. To say that, by reason of s 83, the public authority might now owe a duty of care of some sort would be even more surprising and would likewise amount to saying, that s 83 has worked an implied repeal of the earlier Act to that extent. It seems to me that this must also be true, in relation to both sets of examples, where the provision in the earlier Act was implied rather than express.[116]

68 In Dossett v TKJ Nominees Pty Ltd[117], Gummow, Hayne and Heydon JJ said (omitting citations):

"[Implied repeal] was described by Fullagar J in Butler v Attorney-General (Vict) as 'a comparatively rare phenomenon'. His Honour added that it had been said again and again that a repeal of this nature would not be held to be effected 'unless actual contrariety is clearly apparent'. This statement has been applied in subsequent decisions of this Court."

One of those decisions of the High Court referred to by their Honours was Shergold v Tanner[118], in which Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ considered the general principles respecting implied repeal and referred with approval to the following observations of Gaudron J in Saraswati v The Queen (omitting citations):[119]

"It is a basic rule of construction that, in the absence of express words, an earlier statutory provision is not repealed, altered or derogated from by a later provision unless an intention to that effect is necessarily to be implied. There must be very strong grounds to support that implication, for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other. See Butler v. Attorney-General (Vict)."

69 In Shergold v Tanner, their Honours continued (omitting citations):[120]

"In Butler, Kitto J expressed the question as being whether the two items of legislation could stand or live together. In the same case, Fullagar J spoke of 'contrariety', Taylor J of 'direct conflict', and Windeyer J asked whether the two statutes were clearly and indisputably contradictory displaying such repugnancy that they could not be reconciled. Later, in Travinto Nominees Pty Ltd v Vlattas, Gibbs J used the expression 'could stand together'."

70 In the light of these principles, s 83 of the Wrongs Act 1958 should not be construed as repealing or altering the effect of ss 74, 74A and 74B of the WIA in relation to the matter of duty of care. Actual contrariety is not clearly apparent. Section 83 does not in terms say that, in relation to each claim against a public authority to which Part XII applies, the Court must determine whether the public authority has a duty of care. Rather, s 83 provides so far as relevant that in determining whether a public authority has a duty of care, a court is to consider certain things. If, because of other statutory provisions (whether enacted earlier or later), there is no occasion for the court[121] to determine whether the public authority has a duty of care, the court need not, indeed should not, visit that matter. I see no inconsistency between that view and the statement of Beazley JA in City of Liverpool v Turano[122] to the effect that the New South Wales equivalent of s 83 "specifies the principles that must be applied in determining questions of both duty and breach"; nor any inconsistency with the statement of the Full High Court, on the appeal in that case, to the effect that the section "lays out certain principles respecting resources and responsibilities of public authorities, which apply in determining the existence or breach of a duty of care".[123]

71 This reading of s 83 is reinforced in so far as the section requires the court not only to consider the three principles specified in paragraphs (a), (b) and (c) but also to consider them (as the words in brackets say) "among other relevant things". This suggests that s 83 is only dealing with situations[124] where, apart from s 83 itself, there would be a requirement on the court to consider "relevant things" for the purpose of determining whether the public authority had a duty of care (or had breached a duty of care).

72 Section 83 only applies where it can apply. As a further example, s 83(c) would have no application to a case (otherwise within s 83) where no "general procedures and applicable standards for the exercise of [the public authority's] functions" exist.

73 Further or alternatively, the maxim generalia specialibus non derogant applies. The statutory cause of action given by s 74(1) of the WIA is, in my view, the special case. Section 83 of the Wrongs Act is far broader and more general. Accordingly, the relevant (express and implied) provisions of the WIA should be read as a proviso to s 83 of the Wrongs Act 1958, and s 83 should be deemed not to apply, at least in relation to "duty", in connection with claims under s 74(1) of the WIA.[125]

74 Turning to the final issue concerning duty, it is sufficient to say that the true construction of ss 74, 74A and 74B cannot be affected by the terms of the ESC's service standards. They are delegated legislation or quasi-legislation. They may have been relevant in the Tribunal to the question whether SEWL exercised its functions with reasonable care and skill, but they can have no relevance to the question of whether SEWL owed a "duty" to Transpacific, because that question was foreclosed and answered by ss 74, 74A and 74B themselves.

75 In summary, Transpacific's cause of action was entirely statutory. Transpacific did not advance a claim in negligence (or, for that matter, under the tort of breach of statutory duty). Subject to its own provisions, the statute itself impliedly required SEWL to exercise reasonable care and skill in the exercise of any function under its licence whereby a flow of water might occur from its works onto any land and cause personal injury, damage to property or economic loss. References by the Tribunal to SEWL's "implied duty" are to be understood in that sense. Part XII of the Wrongs Act 1958 does not gainsay this view. Relevant considerations for determining whether the flow of water in question occurred as a result of "negligent conduct" on the part of SEWL were spelled out in s 74(3)(b) of the WIA. Whether these considerations were required to be supplemented by those set out in s 83 of the Wrongs Act 1958 does not affect the present issue.[126] Accordingly, SEWL's submission that the Tribunal identified a meaningless, abstract duty of care is misconceived. Likewise, SEWL's submission that the Tribunal should have found that it did not owe Transpacific any duty of care at all is misconceived.

76 For these reasons, grounds 1 and 2 must be rejected; and grounds 4 and 6 must be rejected to the extent that they raise the question of "duty".

Section 83 of the Wrongs Act and "breach": the balance of ground 4

77 SEWL's main submission under ground 4 (relating to "duty") has been dealt with and rejected under the previous heading.

78 Little remains. Ground 4 of the amended notice of appeal does not clearly allege that the Tribunal failed to consider any of the principles set out in s 83 of the Wrongs Act 1958 in relation to what SEWL calls "breach of duty". It certainly does not distinguish between any of the paragraphs of s 83 in that regard. Nor, as far as I can tell, is any such distinction made in any of SEWL's extensive written submissions. At the hearing, Dr Sadler acknowledged orally that the Tribunal had duly taken into account the principles set out in paragraphs (a) and (c) of s 83 in relation to "breach". However he submitted that the Tribunal had not considered the principles set out in paragraph (b). He submitted that this was a mandatory consideration and that the Tribunal's decision was affected by error of law accordingly.

79 Putting aside for a moment SEWL's suggestion that the Tribunal failed to take into account the provisions of s 83(b), it is clear that the Tribunal took the view that it was obliged to consider the principles set out in s 83 of the Wrongs Act 1958 in determining whether or not SEWL had met its implied statutory obligations under the WIA. The learned Deputy President said as much.[127] He said it in language that indicated acceptance of the view that the relevant question before him under s 74 of the WIA amounted to a question whether a public authority (SEWL) had "breached a duty of care" within the meaning of, and for the purposes of, s 83 of the Wrongs Act 1958. SEWL agrees with that view. Transpacific has not made a submission to the contrary. In those circumstances I will assume, without deciding, that that view is correct. I will also assume, without deciding, that it follows that the Tribunal was obliged to consider each of the principles set out in paragraphs (a), (b) and (c) of s 83 (to the extent that they were applicable on the evidence and material before the Tribunal).[128]

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]

81 There is no merit in SEWL's submission that the Tribunal failed to take into account the principle set out in s 83(b) of the Wrongs Act. Nothing else remains of ground 4. It is rejected accordingly.

The Service Standards approved by the Essential Services Commissioner: Balance of ground 6

82 Contrary to SEWL's submissions, the Tribunal clearly did give "proper, genuine and realistic" consideration to the ESC's Service Standards. Whether that level of consideration was truly required is another question, which I need not be further concerned about.[140] The Tribunal expressly acknowledged that the Service Standards were a matter which SEWL could rely on under s 83(1) of the Wrongs Act 1958.[141] He continued: " ... it is a matter which I am obliged to consider".[142] There was material before the Tribunal on which the Tribunal was entitled to arrive at its view that the Service Standards were "absurdly low"[143] and therefore, in the end, of little weight in relation to the ultimate decision. The Tribunal referred to that material extensively and explained its assessment of it in detail[144]. This ground fails.

83 As indicated above, Dr Sadler concedes that ground 7 falls away because of his concession that it is a factual question, not a legal question, whether a duty was breached or not and because of his further concession that SEWL could not show that it had not been open to the Tribunal not to be satisfied that SEWL had discharged its burden of proof in that regard. Although Dr Sadler did not expressly acknowledge it, I consider that his (properly made) concessions dispose of grounds 8-10 as well.

84 I do not accept that grounds 8-10 "focus on causation", as Dr Sadler submitted. In the amended notice of appeal those grounds are grouped with ground 7 under the heading "breach of duty".

85 Ground 8 criticises the Tribunal for adopting the year 2000, rather than the period shortly before 17 June 2006, as the time as at which to assess whether there was a foreseeable risk of harm. This is a purely factual matter. It relates to the reasonableness of SEWL's conduct in terms of care and skill. It is not directed to causation. It must be rejected.

86 Ground 9 asserts that the Tribunal erred in finding that SEWL's practice of (only) paying special attention to a sewer section when it had attracted stoppages on at least two occasions in a 12 month period did not show "that the relevant flow did not occur as a result of its 'negligent conduct'". Again the real focus of this ground is on the appropriateness of SEWL's conduct, not on whether or not it caused the damage. It too must be rejected.

87 Ground 10 is expressed in "catch-all" terms. It is not a proper ground in an appeal limited to questions of law. It complains of the Tribunal's finding that SEWL had not proven that the relevant flow did not occur as a result of its negligent conduct. The emphasis seems to be on the Tribunal's reaction to the evidence concerning whether or not SEWL's acts and omissions amounted to negligent conduct, not on causation. Indeed the expression "negligent conduct" appears in inverted commas.

88 In any event even if, despite appearances, any or all of the grounds 8-10 do focus on causation, SEWL's position in this appeal is not improved.

89 I have summarised above the points made by SEWL under these grounds. They were contained in Dr Sadler's written submissions, but they were not repeated orally.[145]

90 As to s 51 of the Wrongs Act 1958, there is no indication that it was raised or relied on by SEWL before the Tribunal. The Deputy President listed and considered numerous provisions of the Wrongs Act 1958, but not s 51. Anyway, SEWL does not distinctly submit that the Tribunal omitted to have regard to any aspect of s 51.[146] Rather, SEWL complains that, applying s 51, the Tribunal should have come to a different conclusion on "causation". There was no real doubt about factual causation. However SEWL gives 6 reasons why responsibility for the harm should not have been imposed on it.[147] One of the reasons concerned the failure of the ORG. It seems that this matter was indeed raised by SEWL before the Tribunal as a matter relevant to causation, because the Tribunal deals with it, in detail, under the heading, "Causation - the ORG, Novus Actus Interventens?" [148], albeit without reference to s 51 of the Wrongs Act 1958. On the other hand, it seems that SEWL raised it as going to factual causation only. SEWL apparently made no reference to "appropriateness" under s 51(1)(b). Rather, it apparently asserted that the Tribunal should have regarded the failure of the ORG as breaching the chain of causation. The Tribunal was not persuaded of that. Its conclusion was a conclusion of fact, not law.

91 In my view, the other five matters now relied on by SEWL were not really related to causation at all. In any event, the Tribunal considered them all, at least under other headings, and did so carefully. They did not persuade the Tribunal to relieve SEWL from responsibility for the damage. Even if these issues should now be viewed through the eyes of "appropriateness" under s 51(b) of the Wrongs Act 1958, the Tribunal's implicit conclusions were conclusions of fact,[149] and were well open to it.

Consideration of policy and spending decisions: ground 11

93 There is no merit at all in this ground. Whatever the position may be at common law,[150] it was open to the Tribunal to inquire into SEWL's allocation of resources. Indeed, as the Tribunal said,[151] both the Wrongs Act 1958 and the WIA (by s 74(3)(b)) authorise and, indeed, require the Tribunal to consider the cost of any abatement measure which a licensee may be faulted for not carrying out. This ground is rejected.

94 Again, there is no merit in this ground. The complaint is one of fact, not law. It is a feeble complaint at that. The matter was very carefully and fully dealt with by the Tribunal.[152] It found, among other things, that the damage done would not have been significantly less even if the ORG had operated as intended. SEWL does not challenge that finding. Hence the Tribunal cannot be justly criticised for failing to apply the proportionate liability provisions. This ground is rejected.

Purpose and perceived significance of this appeal

95 More than once during the hearing of this appeal,[153] Dr Sadler said that SEWL's concerns in relation to the Tribunal's decision (which he said were shared by other industry participants, including, I gathered, the ESC) were as much about obtaining clarification of the relevant law as they were about SEWL prevailing in the appeal. He said that SEWL believed that if its obligation were to maintain sewers at the standard which it perceived to be required by the Tribunal's decision, then SEWL would need to commit millions of additional dollars annually to the necessary work and the ESC might need to take that into account in setting its pricing regime.

96 In my view, any guidance as to what SEWL might do in the future emerging from the Tribunal's decision or from this Court's judgment, at first instance or on appeal, may be more limited than the appellant seems to believe. The proceeding before the Tribunal was not in the nature of administrative or judicial review of a decision of SEWL. It was conducted in the civil jurisdiction of the Tribunal, not in its review jurisdiction. It was the hearing and determination of a single inter partes claim for damages. Further, as I have mentioned several times already, only questions of law fell for determination in this appeal. It is true that the main question raised by SEWL, which was described by the Tribunal as the question whether s 74(1) of the WIA imports "the full panoply of the jurisprudence surrounding negligence at common law",[154] was able to be given a legal answer. However, the outcome of the appeal does not necessarily represent an endorsement by the Court of all or any of the Tribunal's findings of fact. Generally speaking, findings of fact do not establish precedents. Moreover, in the present case, the Tribunal's central finding of fact amounted to a determination as to whether the conduct of SEWL did or did not meet a standard based essentially on reasonableness. Reasonableness is a protean concept. Even on indistinguishable primary facts, another member of the Tribunal might in another case arrive at a different view on the corresponding question, without necessarily committing any error of law. The two concessions made by Dr Sadler himself implicitly recognise this.

97 The appeal will be dismissed. I will hear the parties on the question of costs.

[1] [2008] VCAT 1798.

[2] [2008] VCAT 2179.

[4] Subject to the reverse burden of proof in s 74(2).

[5] [2008] VCAT 1798 at [25]- [35], [42]-[43], [67].

[6] Neindorf v Juncovic [2005] HCA 75; (2005) 222 ALR 631 at [92] per Hayne J (and cases cited at footnote 126 thereto) and at [42] per Kirby J (dissenting) (and cases cited at footnote 51 thereto); Shi v Migration Agents Authority [2008] HCA 31; (2008) 235 CLR 286, especially at [25] and [92].

[7] "Authorised" is defined in s 3 of the Water Act 1958. The WIA is to be read and construed as one with the Water Act 1958: see s 3(3) of the WIA.

[8] Based mainly on Dr Sadler's written submissions dated 5 August 2009.

[9] The citations are SEWL's. Some have been altered to give, or to give only, a reference to the relevant authorised report.

[10] Council of the City of Liverpool v Turano [2008] NSWCA 270 at [112-118] and [236]; Roads and Traffic Authority of New South Wales v Dederer [2007] HCA 42; (2007) 234 CLR 330 at 345 [30]; Banque Bruxelles Lambert SA v Eagle Star Insurance Company Limited [1996] UKHL 10; [1997] AC 191.

[12] [1952] VicLawRp 27; [1952] VLR 187.

[13] [1980] VicRp 50; [1980] VR 513.

[15] See Re Armstrong, above and the Report dated 29 May 1956 of the Statute Law Revision Committee of the Parliament on the Water (Compensation) Bill.

[16] Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277 at 304; Bropho v Western Australia [1990] HCA 24; (1990) 171 CLR 1 at 18; Pearce and Geddes, Statutory Interpretation in Australia, 6th edition, 2006 at 182 ff.

[17] Attorney General (NSW) v Brewery Employees Union of NSW (1908) 60 CLR 469; Pearce and Geddes, op. cit. p 126.

[18] [1933] UKHL 4; [1934] AC 1 at 25.

[19] See the cases cited above in sub-paragraph (a).

[20] Further details are given in paragraph 3 of the Schedule to Dr Sadler's submission of 5 August 2009.

[21] Section 273 of the Water Act 1958, which is set out in Crea at p 519, made this clear. The corresponding previous provisions were ss 259 and 260 of the Water Act 1928.

[22] R T Jebb & Associates v Brookline Pty Ltd (1996) 16 AATR 307 at 311-314; Spagnolo v Body Corporate Strata Plan 4189790 [2007] VSC 423.

[23] Compare Lord Wright's statement in Lochgelly, above.

[24] See Hargrave v Goldman [1963] HCA 56; (1963) 110 CLR 40 at 63 per Windeyer J.

[25] See Brodie v Singleton Shire Council; Ghantous v Hawkesbury City Council [2001] HCA 29; (2001) 206 CLR 512 at [314]; Tame v New South Wales [2002] HCA 35; (2002) 211 CLR 317 at [249].

[26] [1980] VicRp 50; [1980] VR 513 at 521 lines 53-57.

[27] Central Goldfields Shire v Haley [2009] VSCA 101, applying Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512.

[32] See Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540, esp the judgment of Gleeson CJ.

[33] [2008] NSWCA 278 at [62]- [78].

[34] Sub-section 63(2) imposes a "duty" on retail licensees to permit a property to be connected to its works, on reasonable terms and conditions, on request.

[35] " ... to provide, manage and operate systems for the conveyance and disposal of sewage ... ".

[39] See ss 80 and 90 of the WIA and see SEWL's Annual Report, which was before the Tribunal.

[40] See the witness statement of the plumber, Mr Lethlean, at AB 411-412.

[41] See reg 333 of the Water Industry Regulations 1995 (No 186 of 1995).

[42] Central Goldfields Shire v Haley [2009] VSCA 101 at [86].

[43] See s 48 and s 83(c) Wrongs Act and certain specified parts of the evidence before the Tribunal.

[44] Cf Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424, 469; Pyrenees Shire Council v Day [1998] HCA 3; (1988) 192 CLR 330.

[47] Transcript p 146 line 22 - p 147 line 17. This was all subject to the two "mandatory considerations" points.

[49] Transcript 147-148. He referred to Pizer's Victorian Administrative Law at [VCAT 148.260] and the cases referred to therein, especially Vetter v Lake Macquarie CC (2001) 202 CLR 439 at [24] and R v ACR Roofing Pty Ltd [2004] VSCA 215; (2004) 11 VR 187 at [42]. [But compare S v Crimes Compensation Tribunal [1998] 1 VR 83 at 89.]

[51] Transcript p 149 lines 7-27. And see also p 149 lines 18-22, to the same effect.

[52] See Ericsson Pty Ltd v Popovski [2000] VSCA 52; (2000) 1 VR 260, 265 [14]; DPP v Theophanous [2009] VSC 325 at [59]; Director of Housing v Andrew [2009] VSC 441 at [44] and cases there cited (fn 23).

[53] However, with regard to causation (about which SEWL advances submissions under grounds 8-10) SEWL does rely on s 51 of the Wrongs Act 1958, which falls within Part X. See below.

[54] There is still considerable overlap with submissions made under other grounds.

[55] This was said in paragraph 33 of SEWL's written submissions dated 5 August 2009. As indicated above, SEWL departed from this at the hearing by submitting that the Tribunal had failed to take into account s 83(b) in relation to breach.

[56] Compare Council of the City of Liverpool v Turano [2008] NSWCA 270 at [150].

[59] To "give proper, genuine or realistic regard to" a consideration is the "Khan formula" see Anthonypillai v Minister for Immigration & Multicultural Affairs [2001] FCA 274; (2000) 106 FCR 426; Weal v Bathurst City Council & Anor [2000] NSWCA 88 at [19].

[60] See para 57 of the submissions dated 5 August 2009. Subject to the concessions to which I have referred, Dr Sadler closed his principal oral submissions by asking that his written submissions be taken as read.

[61] Para [58] of the submission dated 5 August 2009.

[62] At [61], citing Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540, Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424, Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330, Romeo v Conservation Commission (NT) (1998) 192 CLR 431, Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; (1999) 200 CLR 1 and Marcic v Thames Water Utilities [2003] UKHL 66; [2004] 2 AC 42.

[65] See generally Council of City of Liverpool v Turano [2008] NSWCA 270, esp at [152].

[66] [1987] UKHL 3; [1987] AC 241 at 278.

[67] Compare Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1992) 174 CLR 64; Fink v Fink [1946] HCA 54; (1946) 74 CLR 127, at 143; McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 at 411-412; Chaplin v Hicks [1911] 2 KB 786 at 792.

[69] [2009] VSCA 101.

[72] [2005] HCA 75; (2005) 222 ALR 631 at [42] (footnotes omitted).

[73] [2005] HCA 75; (2005) 222 ALR 631 at [92].

[74] See Shi v Migration Agents Authority [2008] HCA 31; (2008) 235 CLR 286 at [25] per Kirby J and at [92] per Hayne and Heydon JJ, and cases there referred to.

[75] Cf Swannell v Farmer [1998] VSCA 104; [1999] 1 VR 299.

[76] Whether the 2003 amendments to the Wrongs Act 1958 apply to claims under s 74 of the WIA is a different question, to which I will come in due course.

[77] [1933] UKHL 4; [1934] AC 1 at 25. See para 13(d)(v) above.

[78] Albeit the common law of Scotland.

[79] See, eg, Hargrave v Goldman [1963] HCA 56; (1963) 110 CLR 40 at 62 per Windeyer J.

[80] See, eg, R v Shields [1981] VicRp 68; [1981] VR 717.

[84] At para [1-14]. See also Balkin and Davis, Law of Torts, 4th edition, 2009 at [10.16].

[86] Such as Carstairs v Taylor [1851] EngR 247; (1871) L.R. 6 Ex. 217 at 222; Geddis v Proprietors of Bann Reservoir (1878) 3 App Cas. 430 at 455-456.

[87] Donoghue v Stevenson [1932] AC 562.

[88] Sydney Water Corporation v Turano [2009] HCA 42; (2009) 239 CLR 51 at [45].

[89] By reference to s 74(3)(b); see below.

[91] See, Balkin and Davis, op. cit at [13.1].

[92] See, eg Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540 at [149].

[93] Hansard, Assembly, 1916 Session, pp 2173, 2345-2346.

[94] The expression "the works" is used five times in the sub-section, and the expression "works" a further time.

[95] The maxim Noscitur a sociis is applicable. See, generally, Pearce and Geddes, Statutory Interpretation in Australia, 6th edition, 2006, [4.2].

[96] See Part IVAA thereof.

[97] This may or may not still be the case: see Part X of the Wrongs Act 1958, as amended in 2003, especially ss 44, 62 and 63. The corresponding New South Wales provisions are considered in Booksan Pty Ltd v Wehbe [2006] NSWCA 3 at [155]- [173] and Wynn Tresidder Management Pty Ltd v Barkho [2009] NSWCA 149 at [96]- [100].

[98] Section 74(4)(b)(ii).

[99] [1952] VicLawRp 27; [1952] VLR 187.

[100] [1980] VicRp 50; [1980] VR 513.

[101] See paras [28]-[35] of the Tribunal's reasons.

[102] At 195. See also his Honour's discussions at 195-196 of Commissioner of Railways (WA) v Stewart [1936] HCA 51; (1936) 56 CLR 520.

[103] [1980] VicRp 50; [1980] VR 513 at 532.

[107] [1980] VicRp 50; [1980] VR 513 at 519-520.

[108] See also Crea [1980] VicRp 50; [1980] VR 513 at 522 lines 40-50. The expression "omission or failure" was used in the definition of "negligence" considered in Crea. Likewise in s 74(3)(b) of the WIA.

[109] Crea, at 523, quoting Atkin LJ in Baldwins Ltd v Halifax Corporation (1916), 85 LJKB 1769 and, in turn, Dixon J in Commissioner of Railways (WA) v Stewart [1936] HCA 51; (1936) 56 CLR 520 at 536-537.

[111] It was common ground before the Tribunal (see para [53] of the Tribunal's reasons), and before this Court, that SEWL was a "public authority", as defined. Again, I merely assume the correctness of that view.

[112] See Pizer, Victorian Administrative Law [VCAT 8.60] and cases there cited.

[114] In the case of a personal injury, any claim under s 74(1) of the WIA would have to be brought in a court, not in the Tribunal: see s 74A(1).

[115] See the observations of Deputy President Macnamara at [71] concerning Dr Sadler's submission to the Tribunal that s 55 of the Wrongs Act 1958 (relating to inherent risks) immunized licensees from liability under s 74(1). The Deputy President said, rightly in my opinion, that this boiled down to a suggestion that s 74(1)(b) of the WIA had been implicitly amended or partially repealed by s 55. He saw nothing in s 55 to support that suggestion. SEWL has not challenged this aspect of the Tribunal's reasons.

[116] Compare Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1 at 10 per Barton J.

[117] [2003] HCA 69; (2003) 218 CLR 1 at 14 [43].

[118] [2002] HCA 19; (2002) 209 CLR 126.

[119] [1991] HCA 21; (1991) 172 CLR 1.

[120] [2002] HCA 19; (2002) 209 CLR 126 at 137 [35].

[121] Or, if applicable, the tribunal: see above.

[122] [2008] NSWCA 270 at [147].

[123] Sydney Water Corporation v Turano [2009] HCA 42; (2009) 239 CLR 51 at [27].

[124] Typically, situations involving claims brought directly under, or by reference to, common law principles.

[125] See Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1 at 14 per O'Connor J; Pearce and Geddes, op cit. [7.18]; compare Wynn Tresidder Management Pty Ltd v Barkho [2009] NSWCA 149 at [98]- [99] per McColl JA (with whom Tobias and Young JJA agreed).

[128] Arguably however, applying s 83 of the Wrongs Act 1958 to any of the questions falling for determination under the detailed provisions of ss 74, 74A and 74B of the WIA might involve issues of inconsistency, raising the abovementioned principles of statutory interpretation concerning implied amendment and implied repeal.

[132] See especially paras [66], [67] and [77].

[140] But see Anthonypillai v Minister for Immigration and Multicultural Affairs [2001] FCA 274; (2000) 106 FCR 426.

[143] At [77]. Of course, the Tribunal was not bound by the rules of evidence.

[144] Especially at [58]-[65], [77].

[145] Save that, as mentioned above, Dr Sadler closed his main address by observing that the written submissions should be taken as read.

[146] Again, I assume, without deciding, that s 51 can apply to claims under s 74(1) of the WIA.

[147] See para 58 of SEWL's submissions dated 5 August 2009.

[149] See S v Crimes Compensation Tribunal [1998] 1 VR 83 at 89, per Phillips JA.

[150] See Roads and Traffic Authority (NSW) v Refrigerated Roadways Pty Ltd [2009] NSWCA 263; (2009) 168 LGERA 357.

[153] See, eg, transcript p 97, 207. See also para 75 of Dr Sadler's written submissions dated 5 August 2009.

[154] Reasons, para [26]. See also at [28], [35].