Coles Myer Ltd v City West Water Ltd [1998] VSC 63

Supreme Court of Victoria|1998-09-09|Before: Gillard J

Determination of issue before trial - Statutory and common law causes of action - Water Act ss.16, 17 and 19 - Water Industry Act s.74 - Jurisdiction of Supreme Court and A.A.T. - s.85 of the Constitution Act 1975 - Failure to exclude jurisdiction of the

The plaintiff's summons, which is first in time, seeks an order pursuant to Rule 47.04(a) of the Rules of Court that a question in the proceeding be tried prior to trial and for an order that a damaged section of a water pipe be made available by the defendant for inspection by the plaintiff.

The defendant's summons seeks an order pursuant to Rule 23.01(1) for an order that the proceeding be stayed or there be judgment for the defendant on the ground that the proceeding is an abuse of the process of the court,, the allegation being that this court does not have jurisdiction to hear the proceeding.

Both summons seek the answer to one question, namely, whether the claims pleaded by the plaintiff in its statement of claim, can be heard in the Supreme Court. The defendant asserts that the court has no jurisdiction to hear the proceeding by reason of the provisions of sections 17 and 19 of the Water Act 1989 ("the Act").

The plaintiff, Coles Myer Limited, is a well-known large public company and is engaged in the business, inter alia, of retail shopping from a number of outlets throughout Australia, including premises in Melbourne.

The defendant, City West Water Limited, sells and supplies water in the City of Melbourne pursuant to a water and sewerage licence granted to it under the Water Industry Act 1994.

The basic facts which led to the dispute and ultimately the proceeding can be briefly summarised. The facts are pleaded in the Statement of Claim and for the purposes of the applications it is assumed that the plaintiff will be able to prove them.

The defendant supplies water and other goods and services to the plaintiff pursuant to a contract known as the City West Water Customer Contract. The defendant also supplies water to other premises located near the plaintiff's premises in Melbourne.

On Sunday 26 January 1997, an underground water supply main pipe owned and used by the defendant, situated in Arcade Alley, Melbourne, ruptured and flooded the basement and ground floor levels of the plaintiff's premises known as the Myer City Store in Lonsdale Street ("the incident"). As a result of the said incident, the plaintiff suffered substantial loss and damage.

On 21 November 1997, the plaintiff issued the proceeding in the court by writ. The statement of claim alleges five separate causes of action against the defendant arising out of the rupture of the pipe and the flooding of the plaintiff's premises. There are two statutory causes of action pleaded and three common law claims. Each claim is in the alternative.

In its defence filed 12 February 1998, the defendant pleaded the following -

"Pursuant to s.157 of the Water Act 1989, the Administrative Appeals Tribunal has sole jurisdiction to determine issues arising out (sic) the allegations made by the plaintiff in these proceedings."

The reference to s.157 is an error and the section relied upon by the defendant is s.19 of the Act.

What both parties seek from the court is a ruling as to the jurisdiction of this court to entertain the proceeding.

In its summons the plaintiff seeks the following question to be determined prior to trial -

"Whether the plaintiff may bring an action in this court against the defendant for liabilities arising out of the flow of water from its works?"

At the hearing before me, Mr R. Berglund of counsel who appeared for the plaintiff, sought leave to amend the summons so that the following question could be answered -

"In the factual circumstances pleaded in the statement of claim does the Supreme Court have jurisdiction to hear and determine any part or parts of the plaintiff's claim and, if so, which part or parts of the plaintiff's claim?"

Mr J.B. Davis of counsel who appeared for the defendant, did not oppose the amendment and accordingly, I grant the amendment and ordered that the question be tried prior to trial and be heard by me.

The defendant's summons seeks an order that the proceeding be stayed or judgment be entered for the defendant on the ground that the court does not have jurisdiction.

At the outset it is necessary to consider the separate causes of action pleaded by the plaintiff.

Each cause of action is a separate and alternative cause of action and is based upon the same set of facts which led to the damage, namely, the rupturing of the pipe under the control of the defendant and the flooding of the plaintiff's premises.

There are five separate causes of action pleaded, namely

(i) A common law negligence claim;

(ii) A claim that the defendant, being the holder of a water and sewerage licence granted pursuant to the Water Industry Act 1994, was in breach of an express term of the licence and this breach caused the plaintiff damage. I have some difficulty understanding his cause of action.

(iii) A statutory cause of action based on a breach of s.16 of the Water Act 1989.

(iv) A statutory cause of action based upon s.74 of the Water Industry Act 1994.

(v) A claim for breach of the contract to supply water and other services by the defendant to the plaintiff.

Mr Berglund was not responsible for the statement of claim and was unable to enlighten me as to the nature of the cause of action based upon an alleged breach of cl.15.1 by the defendant of the licence to supply which is granted by the Office of the Regulator General pursuant to the Water Industry Act 1994. For present purposes I will treat it as a common law tortious cause of action.

Mr Davis submits that all the claims pleaded by the plaintiff are covered by statutory causes of action created by the Act and the Water Industry Act and the Administrative Appeals Tribunal has exclusive jurisdiction to hear the causes of action. It follows that the Supreme Court does not have jurisdiction to hear the plaintiff's claims.

Mr Berglund submits that not all the claims are caught by the statutory causes of action and further, that the Administrative Appeals Tribunal does not have exclusive jurisdiction with respect to the claim brought pursuant to s.74 of the Water Industry Act.

The rival contentions of the parties raise two general questions for determination.

First, in respect of the incident, can a plaintiff proceed on a common law cause of action to recover compensation for the damage suffered? The plaintiff has pleaded a breach of contract claim, and two claims in tort.

Secondly, does the AAT have exclusive jurisdiction to hear the claims of the plaintiff for damages caused by the incident?

The answer to both questions depends upon the proper interpretation of several Acts of parliament.

Paragraph 8 of the statement of claim reads -

"On Sunday 26 January 1997 an underground water supply main pipe owned and controlled by the defendant, situated in Arcade Alley, Melbourne, ruptured and flooded the basement and ground floor levels of the plaintiff's premises at the Myer City Store in Lonsdale Street Melbourne causing the plaintiff substantial loss and damage."

It is asserted in paragraph 5 that the defendant is the holder of a water and sewerage licence granted pursuant to the Water Industry Act 1994.

There is no doubt that the escape of water which occurred during the incident and flooded the plaintiff's premises causing damage provides the basis for several common law claims. In addition to the three claims pleaded it could also have sued on the common law causes of action, of trespass to land and nuisance.

Mr Davis submits that in the circumstances of the incident as pleaded, the statutory causes of action relied upon are applicable and by reason of s.17(1) of the Act the defendant is not liable at common law.

In other words, the statute has abrogated the common law causes of action and substituted for them, statutory causes of action.

It is well established that if the legislature intends to abrogate common law rights it must do so in clear unequivocal language.

In Hocking v. Western Australia Bank (1909) 9 C.L.R. 738 Griffith, CJ at p.746 said -

"It is a sound rule to be applied in the construction of all Acts altering the common law, that they are to be taken to alter it only so far as is necessary to give effect to the express provisions of the Act."

Division 2 of Part 2 of the Act is concerned with "Liabilities".

Section 16 is concerned with liability arising out of the flow of water. It creates two separate statutory causes of action. The plaintiff has pleaded a cause of action based on s.16(1) of the Act.

In order to establish a cause of action pursuant to s.16(1) of the Act the plaintiff has to prove -

(i) that water flowed from the land of a person onto other land;

(ii) that the flow was not reasonable;

(iii) that the flow was caused by the defendant;

(iv) that the plaintiff suffered damage or loss.

The elements of the cause of action so created are similar to the common law causes of action arising out of the same facts.

It is noted that the statutory cause of action involves proof of the flow of water from one person's land to another. There is no allegation in the statement of claim that the place where the water flowed from is the land of the defendant but in my opinion the person responsible for causing the flow and thereby cause the damages may be different from the person who owned or occupied the land, and hence to sheet home liability against the defendant does not depend upon showing the defendant had any interest in the land where the flow commenced.

The other statutory cause of action pleaded is found in s.74 of the Water Industry Act 1994.

In order to establish a cause of action under s.74 a plaintiff has to establish -

(i) that the defendant is a licensee;

(ii) that the defendant was exercising a function under its licence;

(iii) that a flow of water occurred from its works onto the plaintiff's land;

(iv) that the flow resulted from intentional or negligent conduct on the part of the licensee;

(v) that the water caused injury damage or loss to the plaintiff.

Section 4 defines works as -

"'Works' in relation to a licensee, means works owned by, or under the management and control of, the licensee."

In my opinion "works" would cover any installations of the licensee.

The plaintiff is facilitated in his proof by a presumption found in s.74(2) that once it is proven that water has flowed onto any land then it is presumed it occurred as a result of intentional or negligent conduct and the licensee carries the burden of proving the contrary.

Again, the elements of the statutory cause of action are similar to any tortious common law causes of action arising out of the incident.

However, the two statutory causes of action relied upon are different to a cause of action arising out of the contract of supply and the alleged breach of same. The latter is concerned with different elements of proof.

Mr Davis submits that by reason of s.17 of the Act, the three common law causes of action pleaded by the plaintiff are no longer available because damage was caused in circumstances which are covered by the statutory causes of action. He relies upon s.17 of the Act.

"(1) A person does not incur any civil liability in respect of any injury, damage or loss caused by water to which s.16 or 157 of this Act or s.74 of the Water Industry Act 1994 applies except to the extent provided by this Act."

Section 157, which has not been pleaded, creates a liability in an authority for damage or loss resulting from the flow of water. It is not pleaded that the defendant is an authority within the meaning of the Act. The question comes down to whether the " injury damage or loss caused by water" as a result of the incident is an occurrence to which any of the statutory causes of action created by the two Act applies?

If each constituent element in the proof of the statutory cause of action is established, then the victim of the water caused injury, damage or loss, is confined to the statutory cause of action and any common law cause of action based on the same set of facts is no longer available to the victim.

Plainly the exclusion of the common law would cover all tortious causes of action. The common law cause of action for breach of contract is in a different category and depends upon an agreement between the parties which regulate their rights.

The question comes down to whether s.17(1) excludes a liability arising out of the breach of contract in the circumstances in which the incident occurred?

In my opinion the words of s.17(1) are clear and result in "any civil liability" being excluded if the facts establishing the injury damage or loss by water prima facie establish the statutory cause of action. If they do, then in my opinion the common law contractual claim is also excluded. This result accords with the intention of parliament which was to confine liability for the flow of water to statutory causes of action.

It follows that in my opinion the common law tortious claims pleaded by the plaintiff in the present proceeding are not available to it and it is confined to proceeding on its causes of action under s.16(1) of the Act and s.74 of the Water Industry Act 1994.

With respect to the claim under s.16(1) of the Act, the provisions of s.17(2) may exclude any liability.

It follows that I find that the common law negligence claim and the breach of licence claim which also as pleaded is a tortious claim and the breach of contract claim are no longer available to the plaintiff because of the provisions of s.17(1) of the Act.

Mr Davis submits by reason of s.19 of the Act the AAT has exclusive jurisdiction to hear the statutory claims brought by the plaintiff.

The Supreme Court is a court of unlimited jurisdiction. See s.85(1) of the Constitution Act 1975. It provides -

"1. Subject to this Act the court shall have jurisdiction in or in relation to Victoria its dependencies and the areas adjacent thereto in all cases whatsoever and shall be the superior court of Victoria with unlimited jurisdiction."

It follows that the court can hear the plaintiff's statutory claims unless the parliament has removed the jurisdiction.

"(1) The Administrative Appeals Tribunal has jurisdiction in relation to all causes of action (other than any claim for damages for personal injury) arising under ss.15(1), 16, 17(1) and 157(1) of this Act and s.74(1) of the Water Industry Act 1994 or at common law in respect of the escape of water from a private dam."

It is noted that by reason of s.18 of the Act nothing in s.17 extinguishes the liability at common law of the owner of a private dam for damage caused by escape of water.

Sub-ss.2-7 (inclusive) of s.19 provide for the constitution of the tribunal, the exercise of the jurisdiction and the power to grant injunctions.

Sub-s.8 provides that nothing in the section prevents any person from bringing before a court a claim for personal injuries. Sub-s.9 requires the tribunal to apply to the questions of causation and the remoteness of damage the same tests as a court would apply to those questions in an action based on negligence.

Sub-s.10 is important to the resolution of the issues before me. It reads -

"(10) Subject to sub-s.(8), a proceeding based on a cause of action of a kind referred to in sub-s.(1) must not be brought otherwise than before the Administrative Appeals Tribunal."

Mr Davis submits that the wording of sub-s.(10) is clear and unequivocal and accordingly the statutory causes of action must be heard in the AAT and the Supreme Court has no jurisdiction to hear them. It is implicit in his argument that the three common law causes of action pleaded by the plaintiff being no longer available to the plaintiff by reason of s.17(1) of the Act cannot be heard either in the AAT or the Supreme Court. This is not a question of jurisdiction but the exclusion of common law liability .

Division 2 of Part 2 of the Act in which s.19 is, came into operation on 1 November 1990.

Section 19(1) then referred to the statutory causes of action but made no mention of the statutory cause of action subsequently created by the Water Industry Act 1994.

The latter Act came into operation on 1 January 1995. Hence, the statutory cause of action found in s.74(1) of that Act did not exist prior to 1 January 1995.

Prior to 1991 the legislature in this State from time to time limited or excluded the jurisdiction of this court which provoked some controversy. As a result, the Constitution Act 1975 was amended by the Constitution (Jurisdiction of Supreme Court) Act 1991 which had the effect, inter alia, of requiring a certain procedure to be followed if the jurisdiction of the Supreme Court was affected in any way.

"(5) A provision of an Act, other than a provision which directly repeals or directly amends any part of this section, is not to be taken to repeal, alter or vary this section unless -

(a) the Act expressly refers to this section in, or in relation to, that provision and expressly, and not merely by implication, states an intention to repeal, alter or vary this section;

and

(b) the member of the Parliament who introduces the Bill for the Act or, if the provision is inserted in the Act by another Act, the Bill for that other Act, or a person acting on his or her behalf, makes a statement to the Council or the Assembly, as the case requires, of the reasons for repealing, altering or varying this section;

and

(c) the statement is so made -

(i) during the member's second reading speech; or

(ii) after not less than 24 hours' notice is given of the intention to make the statement but before the third reading of the Bill; or

(iii) with the leave of the Council or the Assembly,, as the case requires, at any time before the third reading of the Bill."

This amendment came into operation on 18 June 1991.

Mr Berglund submitted that the attempt to oust the jurisdiction of the Supreme Court in respect of the cause of action based on s.74(1) of the Water Industry Act 1994 fails because the legislature failed to comply with the provisions of s.85 of the Constitution Act 1975 (as amended).

Section 19(1) of the Water Act 1989 was amended by s.187(e) of the Water Industry Act 1994 which came into operation on 1 January 1995. There is nothing in the Water Industry Act 1994 or the Act which expressly refers to the parliament's intention to alter the effect of s.85(1) of the Constitution Act 1975. It was accepted by both sides that the member of parliament who introduced the Bill did not make the required statement to either House of Parliament.

Clearly, s.19(10) was valid and operative when it was passed and came into operation on 1 November 1990. However, subsequently to that date the Constitution Act 1975 was amended which required a certain procedure to be followed and in my opinion it is not open to the legislature to avoid the effect of the amendment to the Constitution Act by amending a section in another Act which already excludes the jurisdiction of this court. After the date of the amendment to the Constitution Act 1975 the legislature is obliged each time to carry out the procedure laid down in order to effectively preclude the jurisdiction of this court.

It follows that this court does have jurisdiction to hear the cause of action based upon s.74(1) of the Water Industry Act 1994 but does not have jurisdiction to hear the cause of action based upon s.16(1) of the Act. It would have jurisdiction to hear the common law causes of action pleaded but they have been abrogated.

This court does have jurisdiction to hear the cause of action based upon s.74(1) of the Water Industry Act 1994. It would also have jurisdiction to hear the common law causes of action but they are not available to the plaintiff.

This court does not have the jurisdiction to hear the statutory cause of action under s.16(1) of the Act.

At the moment, the plaintiff has not instituted any proceedings in the AAT. Its advisors will not doubt have to consider what is the most practical course to follow hereafter. Clearly, the AAT has jurisdiction to hear both causes of action based upon the statutory provisions. It would not have jurisdiction to hear any common law claim.

The court does have jurisdiction to hear part of the plaintiff's claims, but the defendant is entitled to a stay of the plaintiff's three common law claims and the statutory cause of action under s.16(1) of the Water Act 1989.

Subject to any submissions from counsel I propose to make the following orders -

A. That on the plaintiff's summons dated 11 June 1998 order -

(1) that the following question be determined by me prior to trial -

"In the factual circumstances pleaded in the statement of claim does the Supreme Court have jurisdiction to hear and determine any part or parts of the plaintiff's claim and if so which part or parts of the plaintiff's claim?"

(2) that in answer to the question, the Supreme Court does have jurisdiction to hear the claim brought pursuant to s.74(1) of the Water Industry Act 1994 and the common law causes of action.

B. That on the defendant's summons dated 26 June 1998 order -

that the three common law causes of action pleaded by the plaintiff and

the statutory cause of action under s.16(1) of the Water Act 1989 be

Constitution Act 1975

Constitution (Jurisdiction of Supreme Court) Act 1991

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (101 paragraphs)

Parties

Legislation Cited (3)