Birch v Central West County District Council

The basic facts of the matter are not really in dispute. The appellant is a farmer in the Central Western District of New South Wales who at the time of the loss giving rise to his claim was engaged in growing vegetables for a local market. To hold his produce pending disposal he had two refrigerated rooms on his property. The local government area in which the appellant's farm is situated was at relevant times supplied with electricity by the respondent, an electricity supply authority within the meaning of the Electricity Development Act, 1945 N.S.W.. Electric current at a high voltage was carried by the respondent on high-tension wires and poles along a road which intersected the appellant's land. Prior to the year 1954, there had been a transformer placed some 300 yards from the point on the appellant's property at which electricity was supplied to his installations, a point which for convenience I will call the "metering point". Its function was to step down the voltage of the electricity brought to it by the high-tension system to 415/240 volts. Current at this latter voltage had been carried from this transformer to that metering point by low-tension wires. Up to this point of time the appellant's electrical equipment had consisted of household appliances and an electrically driven pump operating to raise and pump water for irrigation purposes.

In 1954 the respondent removed the said transformer and replaced it with a transformer sited some additional 480 yards from the appellant's metering point. Current at 415/240 volts was then brought to that point by low-tension wires, slung in fact below the high-tension wires where they traversed the said road, then coming into the appellant's property as formerly. This made the total length of the low-tension wires serving the appellant's installations with electricity some 800 yards. Other persons beside the appellant were served by this additional length of low-tension wiring. Thereafter the appellant began to experience electrical faults in connexion with his installations in the nature of intermittency and inadequacy of supply.

After the site of the transformer had been thus altered, the appellant in 1957-1958 installed his refrigerated rooms, each having a five horsepower motor and ancillary motors requiring in the case of each room an additional seven amperes or so of electricity at 415/240 volts. He also installed air conditioning in his house. He thus substantially increased the load upon the low-tension supply of electricity to his property bringing it up to a total of 22½ amperes. However, all installations by the appellant were notified to, inspected and passed by the respondent, who actually installed all the apparatus and effected all the electrical connexions for the refrigeration of one of the said rooms.

For some six to seven years from 1957 to 1963, the appellant experienced electrical difficulties in the motors used in the refrigeration of his cool rooms. It was established that he understood at least for some part of this time that his difficulties were contributed to, if indeed not wholly due to, the length of the low-tension wiring bringing current to him for the energizing of his plant. He complained frequently to the respondent about the adequacy of the supply of electricity and of what he understood to be its cause but without result.

On 22nd April 1963 his shed, including the refrigerated rooms containing his produce, caught fire and he suffered a loss which the jury assessed at the figure I have already mentioned. There was clear evidence before the jury that the probable cause of the fire was a short circuit in a motor in the refrigeration plant in a cool room in the shed. Further, it was stated in evidence that such a short circuit was due to the breaking down of the insulation of the windings of the motor caused by the operation of the motor by electricity at a voltage substantially lower than that at which the motor was designed to operate. It was explained in the evidence that if the motor were energized by electricity at such a lower voltage, the motor, in order to perform its designed task would require and draw upon electricity at a greater amperage than the insulated wires of the motor's windings were designed to carry. Use of electricity at such a lower voltage thus caused such a substantial rise in the temperature of the windings that the insulation was damaged. Continued use of the motor at such a lower voltage, it was said, must inevitably lead to the complete breakdown of the insulation with a resultant short circuit which could cause a fire. There was no dispute that the respondent knew that the use of motors such as were installed at the appellant's property at such a lower voltage could cause the results I have described. It supplied electricity to the appellant for use by him, amongst other things, in energizing the motors of his refrigeration plants knowing the voltage at which they were designed to operate. The respondent knew the total demand or load of the appellant's apparatus at the metering point: and, by reason of his many complaints, knew of the difficulties he was experiencing and had experienced in connexion with his motors.

There was abundant material before the jury upon which they could properly conclude that the cause of the supply of electricity to the appellant's property at a voltage substantially below that at which the appellant's apparatus and appliances were designed to operate was the undue length of low-tension wiring. They had the advantage of expert evidence establishing the fact that given the known load drawn by the appellant's apparatus and appliances, there would certainly be a drop to a calculable extent in the voltage of the electricity drawn by the appellant at the metering point due to the length of low-tension wiring serving the appellant's property: and that to supply electricity at a voltage substantially lower than that at which the installed apparatus and appliances were designed to operate was dangerous and likely to cause damage to property. There was direct evidence that when the appellant drew on the electricity supply whilst the transformer was sited remotely from his metering point, the voltage of the electricity supplied fell as low as 140 volts and seemed not to rise above 200 volts. After the fire which gave rise to the appellant's action, and after further electrical failures of motors operating the irrigation pumps at a time when the motors in the cool rooms were no longer in operation, the respondent sited a transformer much nearer to the metering point on the appellant's property with a considerable resultant reduction in the length of the low-tension wiring, whereupon the difficulties due to the supply of electricity at such a lower voltage formerly experienced disappeared.

The appellant claimed that the respondent as a person supplying a substance or commodity which was a potential source of danger to property if supplied at a substantially lower voltage than that at which apparatus for the use of which the electricity was supplied was designed to operate owed a common law duty to him not to supply electricity at such a dangerously low voltage. He established that in fact the respondent over a period of time did supply electricity at such a lower voltage. He established the probability of a resultant loss through the ignition of a motor. There was evidence of steps, which the jury could consider it to have been reasonable to take, which were available to the respondent by which the drop in voltage could have been avoided.

Some confusion it seems to me has crept into the discussion of the matter by the circumstance that the appellant was able to give evidence as to why it was that the respondent did supply him with electricity at such a lower voltage. He could point to the removal of the first-mentioned transformer and the very substantial increase in the length of the low-tension wiring. He could also scientifically explain why the length of low-tension wiring would cause a significant drop in the voltage of the electricity supplied through the metering point to the appellant's electrical installations. But, as I understand the matter, from first, which is the point of the appellant's declaration, to last, which is the presentation of the case to the jury as evidenced by the terms of the learned trial judge's summing up, the appellant's case was that the negligence of which he complained and which he said was causative of his loss was the supply of electricity over a period of time - long enough to destroy the insulation of his motor - at such a lower voltage. No doubt the explanation of that supply very much strengthened the appellant's case in point of fact: but, it was the supply of the electricity at dangerously low voltages, and not the steps which led up to or accounted for the low voltage of the electricity supply which was the appellant's cause of action.

The learned trial judge expressed the respondent's duty, in supplying electricity, as follows:

What is the standard of care which a statutory authority owes to its consumers? The diligence to be exercised by such a body exercising statutory powers must be reasonable according to all the circumstances, regard being had not only to the interests of those exercising the power but also to that of those suffering from or threatened with injury. In general, persons exercising statutory powers or duties must use all reasonable diligence to prevent their operations from causing damage to others and it was under a duty towards the plaintiff, as one of its consumers, to take reasonable care to ensure that voltage would flow to his property in quantities which were reasonably safe as to prevent injury of a foreseeable character to the plaintiff's property, and in particular to his motors. It was under a duty to take reasonable steps to ensure that the voltage supply did not fall to the degree that reasonably foreseeable damage would result to the plaintiff's property, including his motors.

This, in my opinion, was a proper direction. His Honour also left to the jury, under adequate direction, the question of contributory negligence on the part of the appellant in several specified respects including the increase of his electricity demand on the respondent's supply at a time when he knew or ought to have known the possible consequences of the added length of lowtension service lines. The jury by its verdict upon these directions found the supply of electricity to have been at a dangerously low voltage and negatived contributory negligence on the part of the appellant. In my opinion, therefore, the verdict for the appellant should be restored.

However, before parting with the matter I should say something as to the view of the case which commended itself to the Supreme Court. The learned Chief Justice, presiding in the Court of Appeal Division, said:

Apart from contractual obligations by the appellant, and we are relieved from any necessity to investigate these having regard to the course of the proceedings, no common law duty was on the facts revealed in the evidence owed by the appellant to the respondent which could found an action for negligence at common law. The negligence said to arise on the respondent's case may be summarized thus, that the appellant was negligent in removing the original transformer and replacing it with one at a different site and, either in combination with this aspect or as a separate head of negligence, in allowing the voltage to drop below a safe level [1] . 1. (1968) 70 S.R. (N.S.W.) 365, at p. 370; 88 W.N. (Pt. 2) 308, at p. 312; sub nom. Central West County District Council v. Birch: 16 L.G.R.A. 356, at p. 359.

It would seem that his Honour thought that because an insufficient use of statutory powers by a public authority was not actionable (see East Suffolk Rivers Catchment Board v. Kent [1] ), there was no duty on the respondent in this case to ensure that the electricity which it did supply was not supplied to the appellant at a voltage which was likely to cause damage to the appellant's property. But, in my opinion, this conclusion does not follow from anything said or decided by the House of Lords in that case. The present case does not involve, in my opinion, any question of the exercise of statutory powers or the performance of duty imposed by statute. Neither concept of misfeasance or nonfeasance by a local government body or authority is, in my opinion, involved in the case. It may be that the appellant could not have compelled the respondent to supply him with electricity, though as at present advised I am far from thinking he could not. The question could not be resolved, in my opinion, by this Court's decision in Bennett and Fisher Ltd. v. Electricity Trust of South Australia [2] , the terms of the relevant statute having to be considered. But the appellant does not sue upon any supposed obligation under statute to supply electricity. His complaint is that the respondent did supply electricity but at a dangerously low voltage.

But the critical question, as I see it, was whether the substitution of the red transformer for the green, and the continuing supply of electricity through it thereafter, amounted to a want of due care in the course of discharging an obligation to supply electricity, or whether, on the other hand, these acts merely marked out the limits of the supply which the appellant was prepared to give. In the last-mentioned case the true character of the cause of action sued upon would appear to be failure to furnish a greater supply than the appellant was in fact prepared to furnish, that is, a supply capable of sustaining a greater load of electrical equipment, and its true character is not altered by giving it the form of an action for negligence [3] . His Honour thought that: The appellant, although a public authority with a virtual monopoly, was not bound to supply electricity to an individual, except upon its own terms and within the limits which it might be prepared to supply [4] . But supposing this to be a correct interpretation of the statutory situation of the respondent, it is erroneous, in my opinion, therefore to conclude that no cause of action can arise in tort from the actual supply of electricity at a dangerously low voltage. The matter, in my opinion, cannot be resolved by saying that, as the respondent could not have been compelled to supply any electricity, it carried no responsibility for the consequences of electricity which it did supply - and which the appellant accepted in the sense that with his concurrence it energized his installations. Such a view, in my opinion, overlooks the nature of such a substance as electricity and its capacity for harm to persons and property according to the voltage, be it high or low in relation to the installations which it is supplied to energize. As I have indicated, there was, in my opinion, a duty at common law resting on the respondent, unconnected with its statutory authority, or any duty derived from its constating statute. That duty derived from the fact and circumstances of the supply and the nature of the substance supplied. 1. (1968) 70 S.R. (N.S.W.), at p. 376; 88 W.N. (Pt. 2), at pp. 317, 318; 16 L.G.R.A., at p. 365. 2. (1968) 70 S.R. (N.S.W.), at pp. 376, 377; 88 W.N. (Pt. 2), at p. 318; 16 L.G.R.A., at pp. 365, 366.

In my opinion there was evidence that the voltage of the electricity supplied by the wire from the transformer to the appellant's motors in the cool shed was below a level at which these appliances or either of them could be operated without risk of fire in due course. For my part I would regard this evidence as proof of a misfeasance on the part of the respondent and, therefore, common law negligence. There was evidence of contributory negligence on the part of the appellant on which it was open to the jury to act. But they did not see fit to do so.

In my opinion the trial judge did not err in leaving the case under the first count to the jury.

In my judgment the verdict of the jury should be restored.

At the trial and in the argument on appeal in the Supreme Court attention seems to have become fixed mainly upon the action of the council in installing a new transformer situate at a greater distance from the appellant's premises than was the former one. The function of the transformer was to convert the electric power carried by main high-tension lines, reducing it to 240 volts to be carried by low-tension wires to the premises of consumers. The ordinary electrical equipment and appliances of customers, including the appellant, were adapted for use with 240 volts, that being the standard of the system. The position of the transformer determined the length of the low-tension wire from which electricity was supplied to the appellant's premises. After the installation of the new transformer this low-tension wire was of a much greater length than formerly. In the result, there was a reduction in voltage at the point of the consumption of the power by the appellant's equipment and appliances. The voltage was below a safe level for use with that equipment and those appliances in the existing circumstances. How that came to be was a fact directly relevant in the case. But the appellant's cause of action was not, in essence, for the moving of the transformer, but for negligence causing damage in supplying electricity which in the circumstances could cause harm. The evidence about the transformer and the length of wire showed that the factors creating a danger of fire in the appellant's equipment were within the control of the defendant council; that this danger was not an inevitable result of the council's exercising its statutory authority and duty; that, on the contrary, the danger was avoidable, remediable and removable by the council in the exercise of its statutory powers.

If, by a failure to use due care and skill, a supplier of electricity provides a customer with current below its normal standard and potentially dangerous if used by the customer for normal purposes or particular purposes known to the supplier, an action for negligence lies if damage in fact results. I do not think that in such a case it is any answer for the supplier to adopt a take it or leave it attitude, and to say, in effect, "this is what we were prepared to supply to you; you cannot complain of its character". The appellant's cause of action was common law negligence. There was evidence on which the jury could find for him. They did so. They also must be taken to have negatived contributory negligence which was based upon the allegation that he had negligently overloaded the supply. I consider that the appeal should be allowed and the jury's verdict restored.

I agree that the appeal should be allowed, the order of the Supreme Court (Court of Appeal Division) set aside and that in lieu thereof it should be ordered that the appeal to that Court be dismissed.

I have not found it easy to reach a decision in this appeal. At first sight the view of the case taken by the Supreme Court of New South Wales (Court of Appeal Division) [1] seemed to me to be right. But after further consideration of the evidence, and of the arguments presented to this Court, I have reached the conclusion that the learned trial judge was right in leaving to the jury for decision the questions raised by the first count of the appellant's declaration in his action against the respondent.

1. (1968) 70 S.R. (N.S.W.) 365; 88 W.N. (Pt. 2) 308; 16 L.G.R.A. 356.

At the trial of the action many questions of fact and of expert opinion were in contest. These included questions as to the cause of the fire by which the appellant's property was damaged. It is not necessary to refer in detail to the evidence or to the findings of fact which could have been made by the jury and I do not wish to elaborate upon the account given of the facts of the case by the Chief Justice in his judgment in this appeal. The only question for this Court is whether the learned trial judge should have left to the jury the first count which was a count in negligence or should have directed a verdict for the respondent on that count. The appeal is against the judgment of the Supreme Court by which it set aside the verdict obtained by the appellant at the trial and ordered that the verdict and judgment in the action should be entered for the respondent.

We are not concerned with any questions of misdirection of the jury. If it appears that there was material upon which the jury could find that the respondent was in breach of a duty of care owed to the appellant and thereby caused damage, the verdict in favour of the appellant should be restored. It has not been contended that assuming that the respondent had a relevant duty of care the nature and extent of that duty or the acts or omissions which could constitute a breach of it were stated too widely in the summing up. I do not mean that the respondent accepts as correct the statements made to the jury concerning the duty which the respondent had to the appellant. But the only objection is the fundamental one that no such duty existed. No alternative submission has been made that there was error in the manner in which the issue was presented to the jury.

The question with which this Court is concerned is one which has to be considered in relation to all the circumstances of the case as described in evidence and to the findings which the jury could reasonably have made. It is not necessarily to be answered by means of general propositions concerning the obligations which may be incurred by a statutory authority, or by the application of decisions drawing a distinction between malfeasance and non-feasance, or decisions relating to the existence and the extent of an obligation of a statutory authority to exercise the powers conferred on it. We are concerned with the particular circumstances of this case. The respondent was in fact supplying electricity to the appellant, with knowledge of the equipment which he had installed and of the use to which he was likely to put the electricity supplied, and with knowledge of the damage which could be caused over a period of time, if in the course of that use of the electricity, the voltage was constantly below the level which was required for that use. If, as the trial judge said in the summing up, the respondent was "under a duty to take reasonable steps to ensure that the voltage supply did not fall to the degree that reasonably forseeable damage would result to the plaintiff's property", I think that there can be no doubt that on the evidence the jury were entitled to find a verdict for the appellant. The question is whether any duty of that character did arise in the circumstances of the case. My conclusion is that it did. This is not because I think the respondent had an obligation to supply the appellant with any particular "quantity" of electricity or, indeed, to supply it at all. It is because I think that there was a duty which arose out of the relationship between the appellant and the respondent, which was supplying him with electricity for use by him in circumstances in which there was a known risk of damage created by the supply which was being furnished and avoidable by the respondent.

The reasons for my disagreement with the conclusion of the learned judges in the Court of Appeal Division can best be explained by some reference to their judgments. Herron C.J. referred to East Suffolk Rivers Catchment Board v. Kent [1] , in support of the proposition that a public body does not become liable, if once it takes it upon itself to render some service, for failing to render reasonably adequate and efficient service. I agree that a statutory body which makes use of its powers does not for that reason become liable for damage merely because it does not make a greater use of its powers. But I do not think that the appellant's complaint in this case can be properly regarded as merely a complaint that the respondent made an inadequate use of its powers. Herron C.J. took the view that the respondent delivered to the appellant electricity of 240 volts "at the terminal point" and that mere inaction after supplying initially 240 volts created no liability. He thought that the respondent was under no duty to see to it that this supply did not prove inadequate to meet the needs of the consumer under conditions created by him. But in my opinion the facts of the present case are not such that the problem should be approached in that way. The electricity was being supplied in order that it might be used under conditions known to the supplier and it was known to be a source of danger if the voltage fell in the course of that use below a certain level. In my opinion the circumstances were such that they made inapplicable, as the test for determining what was the duty of the respondent in those circumstances, the distinction drawn in his Honour's reasons between the electricity supplied "at the terminal point" and the electricity supplied "at the point of consumption".

Sugerman J.A. stated what he regarded as the critical question in the case in the following way:

But the critical question, as I see it, was whether the substitution of the red transformer for the green, and the continuing supply of electricity through it thereafter, amounted to a want of due care in the course of discharging an obligation to supply electricity, or whether, on the other hand, these acts merely marked out the limits of the supply which the appellant was prepared to give. In the last-mentioned case the true character of the cause of action sued upon would appear to be failure to furnish a greater supply than the appellant was in fact prepared to furnish, that is, a supply capable of sustaining a greater load of electrical equipment, and its true character is not altered by giving it the form of an action for negligence [1] . His Honour went on to say: In the absence of contract such a cause of action, that is for failure to provide a greater supply than was in fact provided, is not known to the law [2] . Later his Honour said: The setting of a limit by the appellant upon the supply which it was prepared to give to the respondent is not to be converted into negligence by labelling it as such [3] . 1. (1968) 70 S.R. (N.S.W.), at p. 376; 88 W.N. (Pt. 2), at pp. 317, 318; 16 L.G.R.A., at p. 365. 2. (1968) 70 S.R. (N.S.W.), at p. 376; 88 W.N. (Pt. 2), at p. 318; 16 L.G.R.A., at p. 365. 3. (1968) 70 S.R. (N.S.W.), at p. 377; 88 W.N. (Pt. 2), at p. 318; 16 L.G.R.A., at p. 366.

I agree that a cause of action in negligence would not arise from nothing more than a failure to furnish a greater supply than the respondent was prepared to furnish. But I do not agree that in the circumstances of the case it is true to say that the acts of the respondent "merely marked out the limits of the supply which [it] was prepared to give". It may be true that the respondent did indicate that the supply it was prepared to give was a supply coming from the substituted transformer. But I do not think that the proper conclusion from this is that the appellant's cause of action was simply based on a failure to furnish a greater supply than the respondent was prepared to furnish. The appellant does not need to rely upon an alleged obligation to supply electricity which the respondent refused to perform. He seeks to rely upon the circumstances that the respondent, knowing all the facts as to the use which was being made of the supply, and knowing that the supply was likely in those circumstances to cause serious damage, continued to supply electricity and he asserts that this constituted a want of due care in the course of supplying it. I think that having regard to the conditions which were known to exist and to the known risk of damage being created by the supply there was a duty (associated with the act of supplying rather than with any obligation to supply) to take reasonable care to avoid or to minimize that risk.

It could be found by the jury that, in order to fulfil that duty, the respondent was required to take reasonable care that the electricity as supplied and used should be maintained at such a level of voltage that damage would not be caused by its use. In my opinion the appellant was entitled to put his case in that way and the learned trial judge did not err in leaving it to the jury to decide whether the claim had been made out.

It was submitted for the respondent that it had no obligation to maintain the voltage at 240 volts, irrespective of the number of appliances which the appellant connected to the supply. Expressed in that form the proposition is true. But to treat it as destructive of the appellant's claim seems to me an over-simplification of the matter at issue between the parties. The evidence was not such that the only conclusion open was that the sole cause of the falling of the voltage was the connecting of additional appliances to the supply. No doubt an increase in the load placed on the current was a factor in the reduction of voltage. But it was not the only factor. Nor was the case one in which the trouble was caused by an increase in the load not known to the respondent or expected by it. The increases that had occurred in the number of appliances were known to the respondent and, indeed approved by it, and thus they were part of the known circumstances in which it was engaged in the supply of electricity to the appellant. It may be true that the jury might reasonably have decided that it was the appellant's own acts and not any act or omission of the respondent that really caused the damage. But if so, that was a question of fact which has no bearing on the problem with which we are now concerned. It was open to the jury to find that the respondent's acts were causally related to the damage.

The case was not one of mere failure on the part of the respondent to exercise its powers or to exercise them in a more ample manner. It was one in which it was exercising its powers and in which damage was caused (so the jury could find) by the manner in which it exercised them. The act of supplying had the foreseeable consequence that damage was caused by that act and not, as it was in East Suffolk Rivers Catchment Board v. Kent [1] , by causes independent of anything which the statutory authority did.

In the result I have arrived, with some degree of doubt, at a conclusion which differs from that of the Supreme Court. I have done so not because of dissent from their statements of legal principles but because I think, with respect, that upon the facts of this case the principles to which they referred are not applicable so as to deny the existence of the appellant's cause of action.