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The appeal be upheld and the orders of Tamberlin J set aside.

ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: STEPHANIE COOPER (nee HORTON)

First Appellant

AND: SEAN COOPER

Second Appellant

AND: MICHAEL MORGAN

Third Appellant

AND: WESTPAC GENERAL INSURANCE LIMITED

(ACN 003 719 319)

Respondent

ORDER

Judges: Crispin P, Connolly and North JJ

Date: 14 September 2007

Place: Canberra

REASONS FOR JUDGMENT

THE COURT:

1. This is an appeal against the decision of Tamberlin J ordering the appellants to pay damages to the respondent in respect of damage caused by fire to a house at 2 Threlfall Street, Chifley in the Australian Capital Territory.

2. The premises had been owned by Mr Wah Sam Wong, but he had died prior to the hearing and the respondent, which was the insurer of the premises, became the plaintiff in his stead.

3. The appellants leased the premises pursuant to a tenancy agreement dated 20 January 2001 (“the lease”) which reflected the standard residential terms set out in Schedule 1 of the Residential Tenancies Act 1997 (ACT). His Honour noted that the central issues in the case had been whether the defendants had breached clauses 63 and 64 of the lease. Clause 63 required that the defendants not intentionally or negligently damage the premises or permit such damage and, clause 64(b) provided that they should leave the premises in substantially the same condition as they had been in at the commencement of the lease, fair wear and tear excepted.

4. The fire apparently commenced at about 3.30 pm on 21 November 2001. His Honour found that it began when fabric on a seat in the garage of the premises ignited and that the fire travelled vertically into the house causing extensive damage. In a report prepared for the ACT Fire Brigade on 16 December 2001 the fire investigator, Mr Paul Covington, referred to an interview he had had with Mr Cooper on the afternoon of the fire. Mr Cooper had told him that he had been in the garage using a cigarette lighter to shrink wrap some plastic sheeting around a couple of wires for his car. He explained that he had been working on the work bench in the north eastern side of the garage and that he had used the lighter continuously for up to twenty seconds moving it up and down the length of the wire. On completion he had thrown the lighter across the garage onto the lounge chairs where, he said, it belonged. He then went upstairs into the kitchen and proceeded to make a sandwich and a cup of coffee. On sitting down in the lounge room he smelled smoke and checked his entertainment unit, computer and electrical equipment before going out the front door to investigate the possibility of a grass/bushfire in the area. It was then that he saw smoke coming from the garage.

5. The investigator formed the view that the source of heat that generated the ignition on the chair had been an overheated lighter that had smouldered in an armrest but his Honour rejected this view, expressly finding that the cause of ignition had not been the cigarette lighter. His Honour accepted that the fire commenced in one of the chairs at the rear corner of the garage, but said that the source and manner of the ignition were not known, and that the application of a direct flame to some material in the area would have been required.

6. In respect of the claim for breach of clause 63 of the lease, his Honour noted that the respondent bore the onus of proof but, after duly considering the evidence, found that the fire had been attributable to a negligent act or omission by Mr Cooper.

7. His Honour discussed the principle of res ipsa loquitur and the circumstances in which it might be invoked, but said at [53] that: In light of the fact that Mr Cooper failed to take proper precautions with respect to the use of a naked flame on the premises, the inference of a negligent act or omission is available and is reinforced by the principle of res ipsa loquitur. After considering the evidence, I do not think it is necessary to invoke the principle.

8. His Honour also adverted to the principle in Jones v Dunkel (1959) 101 CLR 298 but said at [57]: Again, I do not consider it necessary to invoke this principle in the present case. However, in my view, the principle is available to further confirm the conclusion which I have reached, that is, that Mr Cooper is guilty of a negligent omission to act in failing to take proper precautions when using a naked flame in the garage.

9. His Honour’s approach to this claim was summarised in the following passage at [58]: In conclusion, given the narrow time frame of approximately ten to twenty minutes during which the fire was detected, the application of a naked flame for a period of up to twenty seconds shortly beforehand, and the fact that Mr Cooper threw the cigarette lighter across the room towards the chairs apparently without taking any precautions, I consider that it is more probable than not that Mr Cooper negligently permitted the damage to the premises to take place. Looking at the evidence as a whole, it is improbable that any source other than a naked flame could have led directly or indirectly to the fire in the present case. Without invoking any reinforcing principles such as res ipsa loquitur or relying on the principle in Jones v Dunkel (1959) 101 CLR 298 concerning the defendant’s failure to call Mr Cooper, I am satisfied that Mr Cooper breached cl 63(a) of the Tenancy Agreement. The plaintiff has therefore discharged the onus of proof under cl 63(a).

10. If we may say so with respect, there appears to have been no evidence to support his Honour’s finding that Mr Cooper had failed to take proper precautions with respect to the use of a naked flame on the premises. Indeed, Mr Cooper had provided evidence to the contrary in the following answers to interrogatories: 3. Q If you ignited a flame within the premises on the day, then with respect to each such occasion:

a. did you apply the flame to any substance or thing?

A Yes

b. if you applied the flame to any substance or thing, identify the substance or thing.

A Heat shrink

c. if you applied the flame to a substance or thing, what did you do with substance or thing after the flame was applied to it?

A I had a look at the finished product, being cable joined and heat shrunk. I inspected the heat shrunk cable for a matter of seconds to make sure that it was sealed properly. I then placed the heat shrunk cable on the work bench identified in Annexure “A”.

d. if you applied the flame to a substance or thing, did you take precautions to avoid an outbreak of fire?

A Yes

e. if you applied the flame to a substance or thing and took precautions to avoid an outbreak of fire, what precautions did you take?

A I cleared my work bench area prior to shrinking so I had a clear working area. After I concluded heat shrinking, before placing the heat shrunk cable on the work bench, I inspected the heat shrunk cable carefully to make sure that it was water tight and insulated. In order to ensure that the heat shrunk cable was water tight and insulated, I had to inspect it very carefully. I checked to make sure that there were no tears on the heat shrunk cable. I checked it to make sure that both ends of the heat shrunk cable were sealed properly. I checked to make sure that the heat shrunk cable was a snug fit. I had a good feel of the cable to make sure that it was tight. When I placed the heat shrunk cable on the work bench, it was cool to the touch.

4. Q Look at the sketch annexed and marked “A”. Upon the assumption that the sketch represents the premises after the fire and upon the further assumption that the arrow from the letters “POO” directs attention to a couch with the premises and located at the central couch in a line of three couches (hereinafter “the couch”), answer the following:

a. did you cause flame or heat to be applied to the couch?

A No.

11. These answers were tendered not by counsel for any of the appellants, but by counsel for the respondent. They provided the only evidence directly addressing the issue of whether Mr Cooper had adopted proper precautions. His Honour was not, of course, bound to accept them, but there was no obvious reason to reject the sworn and uncontradicted evidence that they provided.

12. It was argued, in essence, that a failure to take proper precautions was an inevitable corollary of the finding that the fire had been attributable to some act or omission of Mr Cooper relating to the use of a naked flame during the shrink wrapping operation. Hence, his Honour should be taken to have found that the evidence provided in the answers to interrogatories had been outweighed by this inference. However, this finding was itself predicated in whole or in part upon the assumed failure to take precautions, and the argument is therefore founded upon circularity of reasoning. Furthermore, his Honour did not expressly reject the evidence so provided by Mr Cooper concerning the taking of precautions during that operation and its potential importance would appear to have been overlooked. In the alternative, it was argued that both the occurrence of an act or omission causally related to the fire and an absence of accompanying precautions could have been inferred from the location and timing of the fire. The merits of this argument will be discussed later in this judgment. For present purposes, it is, we think, sufficient to point out that his Honour did not approach the matter on that basis.

13. His Honour did rely upon the proposition that Mr Cooper had acted negligently in throwing the cigarette lighter on to a chair, “apparently without taking any precautions”. However, there was no reason to suppose that the lighter was still ignited when thrown on to the chair or that any precautions should or could have been taken. His Honour accepted that Mr Cooper had been using the flame from the cigarette lighter to shrink wrap plastic sheeting around some wires and, in that event, it would not have been surprising if he had chosen to discard the lighter quickly so that he could use both hands on the other objects. Furthermore, smokers have been putting recently used cigarette lighters back in their pockets for decades without any obvious risk of imminent immolation. The evidence did not reveal any reason for Mr Cooper to have anticipated that throwing this lighter on to a chair would have given rise to a material risk of fire. Consequently, there was no apparent basis for the finding that the action was attended by negligence. In fact, his Honour found that the fire was not caused by this action. His Honour seems rather to have reasoned that, if Mr Cooper had acted negligently in throwing the lighter, then he may have committed some other negligent act that did cause the fire. In our opinion, this approach was unsustainable.

14. It was agreed that if we found that his Honour had fallen into appealable error we should proceed to determine this aspect of the plaintiffs’ claim on the material before us rather than remitting the matter for rehearing by a single judge.

15. Counsel for the respondent then argued that, whilst his Honour had found it unnecessary to rely upon either the principles of res ipsa loquitur or the principle in Jones v Dunkel, they were clearly applicable to the facts of this case.

16. As his Honour observed, the principle of res ipsa loquitur may be invoked when three elements are established: (1) there is an “absence of explanation” of the occurrence that caused the injury; (2) the occurrence was of the kind that does not ordinarily occur without negligence; and (3) the instrument or agency that caused the occurrence was under the control of the defendant.

17. The principle is not a distinct rule of law but an application of an inferential reasoning process from which negligence may be inferred. As the High Court of Australia observed in Anchor Products Ltd v Hedges (1966) 115 CLR 493 at 500, and the more recent case of Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121 at 133 the burden of proof remains upon the plaintiff. Hence, even if grounds for the application of the principle are established, it remains necessary for the Court to determine whether the burden of proof has been discharged. As Windeyer J determined in Anchor Products v Hedges at 500: To say that an act speaks for itself does not mean that if no evidence is given for the defendant the plaintiff is entitled in law to a verdict in his favour. The occurrence speaks of negligence, but how clearly and convincingly it speaks depends upon its circumstances. It is evidence from which an inference of negligence may be drawn: it does not mean that this inference must necessarily be drawn, although in some cases it may be evidence so cogent and compelling that any other conclusion would be perverse as Du Parcq L.J. pointed out in Easson v London and North Eastern Railway Co [1944] 1 KB 421 at 425. But always the question whether the plaintiff has discharged the burden of proving his case depends upon the effect of the whole of the evidence given in the case, including such inference as may be drawn from the happening of the accident, if its cause remains unexplained.

18. The argument that the occurrence of an act or omission causally related to the fire and an absence of accompanying precautions could be inferred from the location and timing of the fire was essentially based upon this principle. It was contended that the ignition of the fire was effectively unexplained, the fire was an occurrence that would not normally occur without negligence and that Mr Cooper had effectively been in charge of the relevant materials.

19. In response, counsel for the appellant argued that there was no scope for the application of the principle because his Honour had found that the fire had been caused by the application of a naked flame to the surface of the seat. That finding was not challenged on appeal. In these circumstances his Honour was obliged to ask, not whether negligence by Mr Cooper could be inferred from the mere occurrence of the fire shortly after he had been using the naked flame from a cigarette lighter, but whether negligence on his part could be inferred from the application of a naked flame to the chair.

20. As the High Court’s decision in Mummery v Irvings Pty Ltd (1956) 96 CLR 99 demonstrates, such a narrowing of focus may lead to a situation in which the suggested inference cannot be drawn because the particular occurrence does not speak of negligence. In the present case it was not suggested that either the source of the flame or the manner in which it came to be applied to the fabric of the chair could be identified. There is certainly no evidence to the effect that Mr Cooper had deliberately set fire to the chair or that he directly applied flame to the fabric. Nor is there any reason to suppose that if the chair had caught fire whilst he was in the garage he would have ignored it. It seems likely that that the flame broke out after he had left. The fact that the fire was detected so soon after his departure from the garage obviously suggests that it may have been attributable to some event or chain triggered in some way by Mr Cooper’s activities. However, an inference to that effect would not, of itself, warrant a further inference of negligence. There was no evidence that it had been inherently dangerous for Mr Cooper to have undertaken shrink wrapping in the garage, which had apparently had a concrete floor and brick walls. Nor is there evidence that he carried out the task negligently or without taking due precautions to prevent a fire. On the contrary, we see no reason to disregard the account of the operation given by Mr Cooper in his sworn answers to the respondent’s interrogatories. That account suggests that he did nothing likely to have caused a flame from the cigarette lighter or anything else to come into contact with the fabric of the chair and that he took reasonable precautions to prevent any risk of fire arising from his activities.

21. In our opinion, the rule in Jones v Dunkel cannot assist the respondent. The rule may permit an inference that the evidence of the witness in question would not have assisted the party who failed to tender it. It does not provide a basis for a further inference that the evidence of that witness would have been damaging to that party and cannot be used to fill gaps in the evidence or convert conjecture and suspicion into inference: Jones v Dunkel (1959) 101 CLR 298 at 308, 312 and 320-1; Lopes v Taylor (1970) 44 ALJR 412 at 418 and 422; and Nuhic v Rail & Road Excavations and Others [1972] 1 NSWLR 204 at 206-7. Furthermore, there would appear to be little scope for the application of the rule in the present case. As we have mentioned, evidence as to the relevant events had been obtained from Mr Cooper by means of the respondent’s interrogatories and tendered on the respondent’s behalf. Accordingly, the rule could only be applied to issues not addressed in the evidence so adduced. It is true that he was not exposed to cross-examination, but the relevant evidence had been given on oath. Had counsel for the respondent wished to create a situation in which Mr Cooper could only have relied upon evidence of the relevant facts at the price of exposing himself to cross-examination, they could have declined to tender his answers to the interrogatories. We see no reason to draw an adverse inference against him merely because he was content to rely upon the sworn evidence that had been elicited from him and tendered on behalf of the opposing party rather than entering the witness box to give further evidence to the same effect.

22. In the circumstances, we are not satisfied that negligence was proven and are unable to sustain the finding that the appellants had breached clause 63 of the lease.

23. In respect of the claim based upon clause 64(b), his Honour found that the onus was upon the lessor to prove only that the premises had not been in the same condition as they had been at the commencement of the lease. His Honour noted that there was an exception for fair wear and tear and suggested that further exceptions might be implied for damage caused by an extraordinary event or an accident of a kind that could not have been anticipated by the lessee. His Honour held, however, that the onus of proving that the exception for fair wear and tear or any other exception was applicable fell upon the appellants and found that they had been unable to discharge it.

24. Counsel for the appellant argued that his Honour had fallen into error by construing clause 64(b) in isolation from other relevant clauses of the lease. The primary obligation to repair any damage to the premises not attributable to the negligence or wilful act of the tenant had been imposed upon the lessor by reason of a series of clauses set out under the heading, “Lessor to make repairs”. The relevant portions of those clauses were as follows: Lessor to provide premises in a reasonable state at the start of the tenancy 54. The lessor shall provide the premises, including furniture, fittings and appliances (unless excluded in writing in the Tenancy Agreement): (b) in a reasonable state of repair; 55. (1) The lessor shall maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the Tenancy Agreement. The tenant shall notify the lessor of any need for repairs. 56. The lessor shall not be obliged to repair damage caused by the negligence or wilful act of the tenant. 57. Subject to clause 55, the lessor shall make repairs, other than urgent repairs, within 4 weeks of being notified of the need for the repairs (unless otherwise agreed). 59. The following are urgent repairs. In respect of the premises, or services or fixtures supplied by the lessor; (g) serious storm or fire damage;

25. Counsel for the respondent submitted that the covenant in clause 55 to “maintain” the premises in a reasonable state of repair should be construed as requiring the lessor to do routine or minor maintenance work, but not to repair substantial damage to the property, whether due to fire or some other accident. It was argued that the clause had to be construed in the context of other covenants in the lease, including those contained in clause 64 which, on its face, clearly applied to damage of that kind. Fire damage could not be regarded as “fair wear and tear” and did not fall within any other exception to the covenant in clause 64(b) requiring the tenants to “leave the premises …in substantially the same condition as the premises were in at the commencement of the Tenancy Agreement”. If the appellants’ contention were to be adopted, the clause would have to be read down to such an extent that it ceased to have any practical utility.

26. We are unable to accept this argument. As counsel for the appellants pointed out, clause 55 immediately follows the covenant in clause 54 requiring the lessor to provide the premises in a reasonable state of repair at the start of the tenancy. In this context, the covenant to “maintain” the premises in a reasonable state of repair obviously requires the lessor to ensure that they remain in that state. There is nothing in clause 55 to suggest some limitation on the scope of the work that the lessor may be required to comply with this covenant. Furthermore, clause 59 makes it abundantly clear that the lessor is required to repair serious fire damage. This covenant is, of course, subject to the exception provided by clause 56, which relieves the lessor of any responsibility to repair damage caused negligently by the tenant. However, as mentioned earlier, we are not satisfied that the damage at issue in this case fell within this exception.

27. Clause 64 does not purport to impose any covenant to repair and is not in its terms inconsistent with clause 55. It appears under the heading “Tenant to look after the premises” and immediately after clause 63. That clause requires the tenants to refrain from intentionally or negligently damaging the premises or permitting such damage, to notify the lessor of any damage, take reasonable care of the premises, and to keep them reasonably clean, having regard to their condition at the time of the commencement of the tenancy and the normal incidents of living. Clause 64 (a) then requires the tenants to leave the premises in substantially the same state of cleanliness, removing all of their belongings and any other goods brought onto the premises during the duration of the tenancy agreement. Clause 64(b) adds the further requirement that they leave the premises in substantially the same condition as they were in at the commencement of the tenancy agreement, fair wear and tear excepted. We do not accept that this further covenant can only be directed toward requiring the tenants to effect repairs. It might be directed to other matters such as requiring tenants who have altered the premises to restore them to their original condition. The issues in the present case do not require us to define its scope. It is, we think, sufficient to observe that there is no reason to assume that this somewhat vaguely worded covenant was intended to supplant the plain meaning of the words contained in clause 55.

28. It should also be noted that the lease was in a form prescribed by the Residential Tenancies Act 1997 for use throughout the ACT. We think it is most unlikely that this statutory form of lease was intended to make tenants liable for the rectification of any major damage caused to their lessors’ premises, irrespective of whether it had been attributable to any fault on their part. Such an approach would presumably have required tenants of houses destroyed in the Canberra bushfires in January 2003 to rebuild them so that the lessors or their insurers would not be out of pocket. It is difficult to imagine any social policy that might have warranted such an approach and even more difficult to accept that it should be taken to have been implemented without clear expression.

29. In our opinion, the obligation to repair the damage caused by the fire in the present case fell upon the lessor and there was no basis for imposing liability on the appellants.

30. The appeal must be upheld.

31. The respondent should pay the appellants’ costs of the appeal and of the trial. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Date: 14 September 2007

Counsel for the First Appellant: Mr R Crowe SC and Mr G Blank

Solicitor for the First Appellant: Rod J Barnett & Associates

Counsel for the Second and Third Appellants: Mr J Harris SC

Solicitor for the Second and Third Appellants: Meyer Vandenberg Lawyers

Counsel for the Respondent: Mr G Watson and Mr S McCarthy

Solicitor for the Respondent: Ken Cush & Associates

Dates of hearing: 10 May, 10 August 2007

Date of judgment: 14 September 2007

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