Collendina Pty Ltd & 4 Ors v Murray Darling Basin Commission & 8 Ors

LEGISLATION CITED : Murray-Darling Basin Act 1992 Uniform Civil Procedure Rules (2005) - Rules 14.28, 15.1, 15.5 & 15.10

Bega Co-operative Society Limited v The Milk Authority of the Australian Capital Territory (unreported 12 May 1992, Federal Court) Bruce v Odhams Press Ltd (1936) 1 KB 697 Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees' Association of Western Australia (1987) 13 FCR 413 CASES CITED : H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242 Pinson v Lloyds and National Provincial Foreign Bank Ltd (1941) 2 KB 72 Ratcliffe v Evans (1892) 2 QB 524 at 532 Swain v Waverley Municipal Council (2005) 220 CLR 517 (2005); 138 LGERA 50; (2005) 213 ALR 249; (2005) 79 ALJR 565; [2005] HCA 4

Collendina Pty Ltd - First Plaintiff Rohan Geoffrey Cranney - Second Plaintiff David Kenneth Cranney - Third Plaintiff Cranney Properties Pty Ltd - Fourth Plaintiff Wongala Holdings Pty Ltd - Fifth Plaintiff

Murray Darling Basin Commission - First Defendant John Lovering - Second Defendant PARTIES : Geoff Gorrie - Third Defendant Phillip Toyne - Fourth Defendant Kevin Sheridan - Fifth Defendant Michael Taylor - Sixth Defendant David Stringer - Seventh Defendant Edward Phipps - Eighth Defendant Dennis Mutton - Ninth Defendant Tom Fenwick - Tenth Defendant Richard Grimes - Eleventh Defendant

COUNSEL : Ms N Obrart - Plaintiffs Mr K Kunc - Defendants

SOLICITORS : Jackson Smith - Plaintiff Blake Dawson Waldron - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20005/2003 - COLLENDINA PTY LTD & 4 ORS v MURRAY DARLING BASIN COMMISSION & 8 ORS

JUDGMENT (Further strike out, dismissal application - water releases from Hume Dam) 1 HER HONOUR: By further amended notice of motion filed 20 July 2006 the defendants seek an order firstly, that the plaintiffs provide the particulars sought in the letter from Blake Dawson Waldron to Andrew R Ford dated 7 November 2005 within 14 days; secondly, an order that if the plaintiffs fail to comply with Order 1, the proceedings be struck out, or thirdly, alternatively to Order 2, the plaintiffs' further amended statement of claim (FASC) be struck out as disclosing no cause of action or as an abuse of process; and fourthly, the proceedings be dismissed unless within 28 days the plaintiffs give full and precise answers to the particulars sought in paragraph 4(a) of the letter from Blake Dawson Waldron to Andrew R Ford dated 19 May 2006. The plaintiffs relied on the affidavit of Shaye Anlezark sworn 2 February 2005. The defendants relied on the affidavit of Benjamin Cramer sworn 16 February 2006. 2 These proceedings concern releases of water from the Hume Dam in or about October 1996. The first plaintiff owns a property located approximately 80km west of the Hume Dam in the Murray Darling Basin. The second and third plaintiffs operate a farming and grazing business on the property. The fourth and fifth plaintiffs operate a tourism venture on the property (Collendina Joint Venture). The first defendant is a statutory body pursuant to the Murray-Darling Basin Act 1992 (the Act). 3 The first defendant was established by the Murray-Darling Basin Agreement, as approved by s 6 of the Act. Section 13 of the Act confers upon the Commission powers given to it under the Agreement. Clause 95 of the Agreement confers the power to give directions for the release of water from "upper River Murray storages", which include the Hume Dam. [see decision of Windeyer J].

Procedural history 4 This case has already had a protracted procedural history. On 27 September 2002 the plaintiffs filed a statement of claim seeking damages. On 7 April 2003 an amended statement of claim was filed. No defence has been filed as yet. On 24 April 2003 the first to ninth defendants filed a notice of motion seeking summary judgment dismissal. 5 On 13 November 2003 the defendants' notice of motion was heard by Master Malpass (as he then was). On 24 November 2003 Master Malpass delivered judgment. The defendants' notice of motion was dismissed with costs. 6 On 9 December 2003 the defendants filed a summons for leave to appeal the decision of Master Malpass.

Appeal before Windeyer J 7 On 20 April 2004 his Honour Justice Windeyer heard the appeal. On 13 May 2004 Justice Windeyer delivered judgment. His Honour dismissed the appeal and made an order for production and inspection of the documents by 1 July 2004. Relevantly at [8] Windeyer J stated: "8 The question at issue before the Master was whether or not the plaintiffs had pleaded facts sufficient to establish a cause of action in negligence. The negligence alleged amounts to a claim of breach of duty to exercise a statutory power with reasonable care.

9 The Master held that proceedings forming the basis of an application under Pt13 r5 had to "fall within the category of being…hopeless or doomed to failure" (at [19]). The Master was not satisfied that this was such a case. In outlining his reasons, he referred to the position of control and the relevant statutory powers of the defendants; the fact that there were releases of water from the Dam and there was flooding of the plaintiffs' property.

10 The Master further noted that this was a case where "at least largely the relevant information may be solely within the knowledge of the defendants" (at [23]). He went on to state that should the proceedings be summarily dismissed, the plaintiffs "would be deprived of pursuing the various interlocutory processes available to them such as discovery and interrogatories". He took into account the solicitor's certificate and what he said was delay in bringing the application.

11 While the motion before him sought orders under both Pt13 r5 and Pt15 r26 the Master said at paragraph 17 "no claim pursuant to Pt15 r26 was pressed. It is not suggested that the existing process has pleading difficulties". This last statement creates some problems but in the long run counsel for the defendants seemed to acknowledge that the hearing before the Master proceeded on that basis and no ground of appeal is based on Pt15 r26 I proceed accordingly. Paragraph 16 of the amended statement of claim presents some difficulties. The word "Particulars" is struck out by way of amendment. If that was intended - (which is doubtful) - the following sub-paragraphs, whether particulars or pleaded facts in no way comply with Pt16 r4. But this can be put aside." 8 On 9 June 2004 the defendants filed a summons for leave to appeal the decision of Justice Windeyer.

Appeal before the Court of Appeal 9 On 4 February 2005 the matter was heard by the Court of Appeal. The appeal was dismissed with costs. 10 Giles JA (with whom Tobias JA and Young CJ in Eq) stated at [2]: "In Trade Practices Commission v CC (NSW) Pty Limited (1995) 58 FCR 426 at 438 Lindgren J correctly observed that on the facts of a particular case the application of the distinction between fishing and non-fishing may well be difficult. Both the Master and Justice Windeyer considered that this case fell on the non-fishing side of the line, both in relation to speculation and discovery. Despite the submissions by Mr Gageler SC on behalf of the claimants, I am not persuaded that Windeyer J was incorrect. If after discovery the claimants consider that the claimants consider that the opponents are unable to support their allegations, it will be open to them to make a further application." 11 Since the last round of proceedings a further amended statement of claim (FASC) was filed on 4 November 2005. Discovery has been given by the defendants (a list of categories of documents can be found at Tab 11 p 38). The plaintiffs have had an adequate opportunity to inspect the 17 boxes of discovered documents. The FASC (Tab 4) has expanded the pleading to give particulars of the defendants alleged failure to take reasonable care effecting the releases [15] and particulars of damages [15(a) and (b)] against the first defendant. Similar amendments have been made in relation to the other defendants.

The law 12 The defendants seek to invoke two aspects of the Court's jurisdiction, namely the Court's power in relation to particulars under Rule 15.10 of the Uniform Civil Procedure Rules 2005 (UCPR); and secondly, the Court's power to strike out proceedings that do not disclose a reasonable cause of action or are an abuse of the process under Rule 14.28(1)(a) or (c) of the UCPR. 13 Part 14.28(1) of the UCPR provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading firstly, discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, secondly, has a tendency to cause prejudice, embarrassment or delay in the proceedings, or thirdly, is otherwise an abuse of the process of the court. The court may receive evidence on the hearing of an application for an order under Rule 14.28(1). 14 Rule 15.10 of the UCPR provides: "(1) The court may order a party to file: (a) particulars of any claim, defence or other matter stated in the party's pleading or in any affidavit relevant to the proceedings, or

(b) a statement of the nature of the case on which the party relies, or

(c) if the party claims damages, particulars relating to general or other damages. (2) Without limiting subrule (1), if a pleading alleges that a person had knowledge or notice of some fact, matter or thing, the court may order that party to file: (a) if the pleading alleges knowledge, particulars of the facts on which that party relies, and

(b) if the pleading alleges notice, particulars of the notice."

The source of the defendants' dissatisfaction with the pleading 15 The gravamen of the defendants' complaint is that for Collendina to establish negligence it must plead, particularise and ultimately prove that there was a reasonably practicable alternative course of water releases available to Murray Darling Basin Commission (MDBC) which in turn would have completely or partially avoided Collendina's alleged loss. 16 Both parties referred to Swain v Waverley Municipal Council (2005) 220 CLR 517 (2005); 138 LGERA 50; (2005) 213 ALR 249; (2005) 79 ALJR 565; [2005] HCA 4 at [40]-[45], [98], [153-155]. The defendants referred to His Honour Justice McHugh's statements at [40]-[45] and [98] where his Honour says: "[40] The plaintiff bears the legal and evidentiary burden of establishing a prima facie case of negligence. To prove negligence, the plaintiff must be able to point to a reasonably practicable precaution or alternative course of conduct that could have avoided, or reduced the consequences of, the injury to the plaintiff. The plaintiff does not establish a prima facie case simply by asserting that there "must be" a practicable alternative, and that it is for the defendant to provide evidence that no such alternative exists. The plaintiff does not prove a case of negligence, for example, by proving the existence of the risk and then alleging that the defendant took no precautions to protect the plaintiff against that risk.

[41] The plaintiff must also provide at least some evidence from which the jury can find that the alternative is a practicable one that was reasonably open to the defendant. Thus in Vozza v Tooth & Co Ltd., the plaintiff suggested two alternatives to obviate the risk of injury arising from the broken bottles he was required to handle, namely, the installation of a system for the mechanical handling of the bottles or the provision of thicker gloves. He did not describe the mechanical handling system in sufficient detail to enable the jury to contrast it with the defendant's manual handling system or to assess its advantages and disadvantages or to say whether or not it would have been practicable and reasonable to install it in the defendant's premises. He tendered evidence that more strongly reinforced gloves were available but there was no evidence that they would be suitable for the plaintiff's task. The defendant called an expert who said he could make a better glove (not an impenetrable glove). This Court held that there was insufficient evidence in relation to any of the alternatives suggested by the plaintiff to support a verdict for the plaintiff as a matter of law. The Court affirmed the decision of the Full Court of the Supreme Court of New South Wales to set aside the jury's verdict for the plaintiff and enter a verdict for the defendant.

[42] Similarly, in Neill v NSW Fresh Food and Ice Pty Ltd., the plaintiff suggested that a handrail might have been placed inside a cylindrical milk container to minimise the risk of injury from slipping inside the container while the plaintiff cleaned it. Alternatively, he contended that the defendant employer could have provided "non-skid boots". The plaintiff provided no evidence of the practicability of either suggestion. This Court held that in the absence of expert evidence, it was merely "a matter of conjecture" whether the suggested precautions would have been practicable or not. Accordingly, as the plaintiff had not established a prima facie case of negligence, the Court upheld the decision of the Full Court of the Supreme Court of New South Wales to set aside the jury's verdict for the plaintiff and enter a verdict for the defendant.

[43] Where the suggested alternative carries its own risks, the plaintiff must tender some evidence to support the practicability of that alternative. Thus, the plaintiff may be required to describe an alternative system in sufficient detail to enable the jury to contrast it with the defendant's system, or to assess its advantages and disadvantages, or to say whether or not it would have been practicable and reasonable for the defendant to adopt it. The plaintiff may also be required to provide some technical or expert evidence of the feasibility of the alternative, especially where the operation is complex and technical.

A matter of expert evidence or common knowledge and common sense

[44] In some cases, common knowledge or common sense is all that is required to prove a reasonably practicable alternative. In other words, the plaintiff may be able to discharge the evidentiary onus of establishing a practicable alternative without the benefit of technical or expert evidence. In Maloney v Commissioner for Railways, Barwick CJ said that evidence of the practicability of the proposed alternative course or safeguard "is essential except to the extent [that it is] within the common knowledge of the ordinary man." Similarly, in Tressider v Austral Stevedoring and Lighterage Co Pty Ltd, the New South Wales Court of Appeal said that in some cases: '[N]o more than common knowledge or common sense is necessary to enable a judge or jury to perceive the existence of a real risk of injury and to permit the tribunal of fact to say what reasonable and appropriate precautions might appropriately be taken to avoid it.' [45] Where the case involves a technical or complex operation or service, however, it is likely that the plaintiff will not have a case to go to the jury without leading technical or expert evidence as to the existence and practicability of the suggested alternative. Where the issues involve "technical knowledge and experience", the plaintiff must provide evidence as to what the defendant ought to have done. The question cannot be determined by the application of common knowledge, and a jury cannot decide the issue on the basis of its own ideas as to what the defendant ought to have done. Thus, a mere allegation that a precaution is practicable is insufficient where the evaluation of whether or not the precaution is practicable involves issues of technical knowledge and experience.

[98] As I have indicated, a plaintiff is required to identify an alternative means of eliminating a risk and to provide evidence that the alternative is indeed a practicable one. The plaintiff may be required to lead more evidence (or perhaps technical or expert evidence) as to an alternative and the feasibility of that alternative where the defendant has followed a generally accepted practice - which the Council had in this case. The plaintiff is also required to adduce technical or expert evidence concerning the practicability of the alternative unless it is one where common knowledge or common sense is all that is required to prove the reasonably practicable alternative. However, this was not a case where the jury could use its common knowledge or experience to find that the flags could be moved to another area of the beach because there was no evidence concerning the conditions of the surf and the seabed at other parts of the beach on that day." (footnotes omitted) 17 The plaintiffs referred to [153] - [155] where his Honour Justice Gummow stated: "[153] While the plaintiff bears the ultimate burden of proving that his or her injuries could have been avoided by some reasonably practicable alternative course of conduct available to the defendant, in some cases, the evidentiary burden which has come to rest upon the defendant may prove decisive of the outcome. [154] In Nelson v John Lysaght (Australia) Ltd, it was held by this Court that upon the evidence the jury had been entitled to find that the system of work in force where the plaintiff was injured exposed him to a clear risk of injury. The onus lay upon the plaintiff to prove that it was unreasonable of the defendant not to take a suggested precaution, which it had later adopted. However, Gibbs J pointed out: [W]hen the [defendant], which must have had full knowledge of the nature, cost and practical consequences of the new installation, gave no evidence, and by its counsel asked no questions, to suggest that it was inordinately expensive or in any other way disadvantageous, the jury was entitled to infer at the very least that the advantages of the method which the [defendant] has since adopted were not outweighed by any disadvantages. [155] Here, also, the Council, as indicated above, led no evidence and asked no questions upon critical matters. The Council's witness, Mr Nightingale, was the person well placed to give evidence upon these matters. It was open to the jury to infer, for example, that the Council could have moved the flags. In the circumstances of the trial, the Council had carried at least an evidentiary onus to lead evidence that no reasonably practicable alternative course of conduct was open to it." (footnotes omitted) 18 These passages from Swain do not establish that the plaintiff must in its statement of claim plead that there was a reasonably practicable precaution or alternative course of conduct that could have been avoided or reduced the consequences of damages suffered by the plaintiffs. Those passages are focussed on the burden of proof and the evidence required to establish whether or not there was a reasonably practicable precaution or alternative course of conduct that could have avoided or reduced the consequences of damage. 19 There are two relevant rules in the UCPR. They are Rules 15.1 and 15.5 which read: "15 Pleadings must give all necessary particulars

(1) Subject to this Part, a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet. …" and 15.5 Allegations of negligence and breach of statutory duty in common law claims in tort

(1) The particulars to be given by a pleading that alleges negligence (whether contributory or otherwise): (a) must state the facts and circumstances on which the party pleading relies as constituting the alleged negligent act or omission, and

(b) if the party pleading alleges more than one negligent act or omission, must, so far as practicable, state separately the facts and circumstances on which the party relies in respect of each alleged negligent act or omission. …" 20 The plaintiff now pleads at [15] FASC: "15. The first Defendant failed to take reasonable care in carrying out effecting the Releases. Particulars (i) The First Defendant delayed the commencement of the Releases from June 1996 to 4 October 1996 . (ii) Prior to effecting the Releases and from 12 August 1996 to 4 October 1996 the First Defendant caused or allowed the level of the Hume Dam to increase as specified indicated by the inflows and outflows contained in Schedule 2 hereto- (iii) The First Defendant did not give sufficient warning to the plaintiffs in respect of the Releases, such warning being given on the eve of the Releases. (iv) The Releases were commenced at the time which coincides with the time of highest annual rainfall in the Murray Darling Basin and the highest inflows into the Hume Dam by reason of snow melt. (v) The Releases were vastly in excess of the Channel Capacity being in the amounts specified in Schedule 1 hereto. (vi) The six week period over which the volume of water was released was insufficient to allow adequate distribution of the water down stream and caused inundation of the property ." 21 A pleading is to contain, and contain only, a statement in a summary form of the material facts on which the applicant relies. The material facts are all those facts necessary for the purpose of formulating a complete cause of action - see Bruce v Odhams Press Ltd (1936) 1 KB 697 at p 712; Pinson v Lloyds and National Provincial Foreign Bank Ltd (1941) 2 KB 72 at 75; and Bega Co-operative Society Limited v The Milk Authority of the Australian Capital Territory (unreported 12 May 1992, Federal Court). Not only must all material facts be pleaded but they must be pleaded with a sufficient degree of specificity, having regard to the general subject-matter, to convey to the opposite party the case that party has to meet - see Ratcliffe v Evans (1892) 2 QB 524 at 532; Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees' Association of Western Australia (1987) 13 FCR 413 at 417. It must be apparent on the fact of the document that the facts pleaded, if proved, would establish the cause of action relied upon - see H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242 at 246. A pleading must state the facts, that if not specifically pleaded might take the opposing party by surprise. 22 The negligent acts have been pleaded as required by Rule 15.5 of the UCPR. I accept that the FASC does not plead that there was a reasonably practicable precaution or alternative course of conduct that could have avoided or reduced the loss and damage allegedly suffered by the plaintiffs. But I do not think that it is required to do so under the Rules. Certainly, at trial, an expert(s) would be required to give evidence on this issue. 23 The defendants say that they cannot properly plead to this issue in their defence. That is so, but at trial they may or may not be obliged to call evidence on this issue. The defendants have drafted a proposed defence [Tab 9 (46)]. It is my view that the statement of claim should not be struck out.

Particulars 24 Alternatively the defendants say that the following particulars should be provided. They are: (a) Setting aside any other particulars which have been sought, and to which our clients say they are entitled, the key matter is for your clients to give answers with proper particulars to these questions: (i) Do the Plaintiffs allege that there was an alternative course of action reasonably open to the Defendants that would have eliminated or reduced the damage allegedly suffered by the Plaintiffs? (ii) If the answers to (i) is "yes" and on the assumption that the alleged alternative course of action involves releases from the dam at different times and in different quantities to what in fact occurred, on what dates and in what quantities is it alleged releases should have been made? (iii) If the answer to (i) is "yes", do the Plaintiffs allege they would have suffered no damage had that alleged course of action in fact occurred? (iv) If the answer to (iii) is "no", what damage do the Plaintiffs allege they would have suffered (measured in terms of days and extent of inundation or howsoever the Plaintiff otherwise put it)?" [Defendants' solicitors letter dated 19/05/2006 tab 5 at 25] 25 The answer to (i) when read with the FASC has been answered. Answers (ii) to (iv) are matters which will be answered in an expert's report in due course after the defence is filed. The defendants' amended notice of motion filed 20 July 2006 is dismissed. The defendants are to file and serve a defence within 14 days. A status Conference is to be allocated. Court to notify parties. 26 Overall these interlocutory skirmishes do nothing more than add to the substantial costs that will be incurred in litigating this matter. 27 Costs are discretionary. Costs usually follow the event. The defendants are to pay the plaintiffs' costs as agreed or assessed.

(1) The amended notice of motion filed 20 July 2006 is dismissed.

(2) The defendants are to file and serve a defence within 14 days.

(3) A status conference is to be allocated. Court to notify parties.

(4) The defendants are to pay the plaintiffs' costs as agreed or assessed. **********

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