J.K. Williams Staff Pty Limited v Sydney Water Corporation

Holman Webb Lawyers (Plaintiff) Makinson d'Apice Lawyers (Defendant) File Number(s): 2017/193481

Introduction

1. HIS HONOUR: Despite the fact that the substantive proceedings were commenced by Summons filed on 28 June 2017, followed by a Statement of Claim filed on 25 August 2017, and a Defence filed on 24 November 2017, the parties continue to be engaged, relentlessly, in a battle concerning the disclosure of documents, and, so it seems to me, more importantly, the identity of the experts to be retained to provide evidence in support of its claims and defences to those claims, without advancing, otherwise, the substantive proceedings. These reasons concern only those two matters.

The Proceedings giving rise to the Application

1. The Plaintiff, J.K. Williams Staff Pty Limited, is duly incorporated under the Corporations Act 2001 (Cth). It is the owner of land in Penrith, Sydney, within, and through, which flows Boundary Creek.
2. Boundary Creek is said to be "an open formed stormwater channel commencing at a point near 35 Coombes Drive, Penrith and receives stormwater from large diameter stormwater pipes set in a culvert headwall at that point". From the commencing point, it flows to the north and then in a westerly direction, through various parcels of land, including over substantial portions of the Plaintiff's land, and then through other land, finally discharging into the Penrith river.
3. The Defendant, Sydney Water Corporation, is a New South Wales state owned corporation constituted under s 4(1) of the Sydney Water Act 1994 (NSW), as amended ("the Act").
4. The Defendant owns land about one kilometre east of the Plaintiff's land. On that land, it owns, and operates, a sewerage treatment plant, to which I shall refer as "the Penrith STP", pursuant to s 37(2) of the Act.
5. The Penrith STP has processed untreated effluent and discharged treated water into Boundary Creek. Since 1990, discharges of treated effluent from the Penrith STP to Boundary Creek have increased, so that from late 2010 and early 2011, the volume of treated water has increased to about 50 million litres per day.
6. The Penrith STP first commenced operation in about 1943. The Defendant, in its capacity as a statutory body, has operated the Penrith STP since 1994. Prior thereto, the Penrith STP was operated by the statutory predecessor(s) of the Defendant.
7. It is the Plaintiff's case that: 1. since 2000, the discharge flows from the Penrith STP, have caused, and continues to cause, erosion of the embankments of Boundary Creek, along the southern boundary of the Plaintiff's land, resulting in steep, unstable and unsafe ground conditions and loss of land due to embankment collapses; 2. the erosion of Boundary Creek "has resulted in the progressive collapse, and loss, of significant portions of the Plaintiff's land to the Boundary Creek channel, which collapses are progressively approaching and threatening buildings constructed by the Plaintiff" on its land; 3. the discharges from the Penrith STP into Boundary Creek and the resulting Boundary Creek erosion, at all material times, were reasonably foreseeable and constitute a nuisance to the Plaintiff, which nuisance is continuing; 4. It has requested the Defendant to abate the nuisance "by undertaking or contributing to the costs of rectification works to stabilise the banks of the Boundary Creek and prevent further Boundary Creek erosion", which the Defendant has failed to do.
8. In the alternative, the Plaintiff asserts that the Defendant owed it a duty of care under s 177 of the Conveyancing Act 1919 (NSW), to not do anything on, or in relation to, land that removes the support provided by supporting land to any other land. It asserts that in breach of this duty, the Defendant's conduct has had the effect of removing the support provided by the supporting land to the supported land located on the Plaintiff's land.
9. The Plaintiff, relevantly, claims the following relief: "1. An order that the Defendant forthwith do all such things, and perform all such acts, as are necessary to prevent further damage to the land owned by the Plaintiff in folio identifier 441/109XXXX and situated at ### Jack Williams Drive, Penrith in the state of New South Wales (Plaintiff's Land) caused by the discharge of water from the Penrith Sewerage Treatment Plant (Penrith STP) operated by the Defendant upon the land comprised in folio identifier 110/77XXXX and situated at ### Castlereagh Road, Penrith in the state of New South Wales also owned by the Defendant (Penrith STP Land). 2. An order that the Defendant forthwith do all such things, and perform all such acts, as are necessary to abate the nuisance to the Plaintiff's Land caused by the discharge of water from the Penrith STP, including by repairing, making good and rectifying by appropriate works the damage to the Plaintiff's Land caused by the said discharge. 3. In the alternative to orders 1 and 2, damages. 4. Further, or in the alternative to order 3, damages pursuant to section 68 of the Supreme Court Act 1970 (NSW). 5. Interest pursuant to section 100 the Civil Procedure Act 2005 (NSW) ('CPA'). 6. Costs. 7. Interest on costs pursuant to section 101(5) of the CPA. 8. Such further or other order as the Court deems fit."
10. The Defendant denies the claims made by the Plaintiff. Whilst it does not dispute that there has been erosion on the Plaintiff's land, it denies that any discharges from the Penrith STP have caused the damage to the Plaintiff's land, and it asserts that any erosion has been caused by natural and/or other processes, including periodic flooding of the Nepean River, periodic changes in the position of the channel of flow of water through the lower reaches of Boundary Creek, and the periodic large concentrations of stormwater discharged into Boundary Creek from culverts and stormwater pipes.
11. In addition, the Defendant asserts that "it did not do anything to the Plaintiff's land which removed the support provided by the supporting land"; that "any alluvial sediments which have been removed by flows in Boundary Creek so as to cause erosion on parts of the Plaintiff's land were and are not 'supporting land' within the meaning of section 177 of the Conveyancing Act"; that "in purchasing the Plaintiff's land adjacent to or bordered by Boundary Creek and with unstable soils, in circumstances where it knew, or ought to have known, the creek received stormwater and discharges from the Penrith STP, the Plaintiff agreed to exclude any duty of care to support such of the Plaintiff's land as was supported by land in the vicinity of Boundary Creek within the meaning of s 177(5) and (6) of the Conveyancing Act"; that in the circumstances in which the Plaintiff's action in nuisance is alleged to arise, by way of removal of support for supported land as a result of treated water discharged through or adjacent to the Plaintiff's land within a natural watercourse, the action in nuisance is prevented by section 177(8) of the Conveyancing Act"; and that "any erosion in the lower reaches of Boundary Creek, including any erosion of the Plaintiff's land adjacent to the Creek (which is not admitted) has been caused by natural and/or other processes".
12. Finally, the Defendant relies upon various sections of the Civil Liability Act 2002 (NSW); the defence of "statutory authority"; and also, the Limitation Act 1969 (NSW).

The Plaintiff's Notice of Motion

1. By notice of motion filed on 15 December 2017, the Plaintiff sought an order pursuant to Uniform Civil Procedure Rules 2005 (NSW), rule 21.2, requiring the Defendant to provide disclosure of documents within the categories set out in the annexure to the notice of motion.
2. The application in the Plaintiff's notice of motion was made at a stage in the proceedings when pleadings had closed but at a time when no evidence had yet been served. Even now, no evidence has been served by either party.
3. In summary, the basis of the Plaintiff's application was, and remains, that disclosure is necessary for the resolution of the real issues in dispute, and that "exceptional circumstances" in the sense required by Practice Note SC Eq 11 exist, because: 1. the Plaintiff's case is wholly dependent upon expert evidence, and the documents identified in the categories sought are necessary for the preparation of the Plaintiff's expert evidence; 2. the relevant facts are not in the knowledge of the Plaintiff; 3. as disclosure of the documents would inevitably be ordered at some stage in the proceedings, it is appropriate to make such order before preparation of expert evidence because it will allow the experts to be briefed with all relevant documents prior to preparing the reports, which would result in a saving of costs by allowing the experts to address all relevant matters rather than having to produce multiple reports as further documents become available.
4. Prior to the hearing of the Plaintiff's notice of motion, the Defendant agreed to give disclosure of documents within the categories 4(a), 5, 6 and 7 of the categories of the list of documents. Only categories 1, 2, 3, 4(b) and 8 remained, and still remain, in dispute.
5. The text of the disputed categories of documents are as follows: "1. Copies of all Documents recording: (a) erosion or erosion related collapse, loss or damage to the banks, or the land in the immediate vicinity of the banks, of Boundary Creek, and (b) the cause(s) or possible cause(s) of such erosion, collapse, loss or damage, from 1 January 1994 (being the date on which the Defendant admits in paragraph 8(b) of the Defence that it commenced exercising statutory powers and functions in respect of the Penrith STP under sections 5 and 12 of the Act) to date. 2. Copies of all documents recording or relating to any site inspections of Boundary Creek conducted by the Defendant or any third party (whether or not at the request, or on instructions, from the Defendant ), from 1 January 1994 to date recording the condition or features of the banks of Boundary Creek. 3. Copies of any document constituting, containing or recording the results of any survey, whether by means of LIDAR or other distance or height measuring or recording method (whether undertaken by the Defendant or any third party) in relation to the location, dimensions and/or height of the banks of Boundary Creek from 1943 (being the year in which the Defendant admits in paragraph 12(c) of its Defence that the Penrith STP commenced operating), to date. 4. Copies of any Documents from 1943 to date: (b) being reports, studies, analyses or summaries which record: (i) the boundaries, area and location of the catchment areas of Boundary Creek; (ii) the base flows of Boundary Creek (that is, not including any daily discharges of the kind contemplated by sub-paragraph 4(a) above) (being Category 4(a)); (iii) the flow rate (or velocity) of the waters of Boundary Creek, from time to time (including any daily discharges of the kind contemplated by paragraph 4(a) above) (being Category 4(a)); (iv) the boundaries, area and location of the catchment areas of Peachtree Creek; and (v) the base flows of Peachtree Creek. 8 Copies of any report, study, analysis or opinion, bearing whatsoever date, concerning or relating to any internal or external investigation, assessment, report or survey by Sydney Water, PBP, Worley Parsons or any other person, government authority or agency (whether or not at the request of the Defendant), into the retreat or erosion of the banks and/or land bordering any part of Boundary Creek, or the cause(s) or possible cause(s) of the erosion of Boundary Creek."
6. The Plaintiff's notice of motion was heard by Registrar L Walton on 9 March 2018. The learned Registrar decided that: "REGISTRAR: In my view [of] the Practice Note, you meet the test. I am satisfied that the experts say that the documents are required. I think there are sufficient reasons in that to allow me to draw the conclusion without going greatly behind their reports that exceptional circumstances are demonstrated in this case. lf discovery was delayed, then I think you would fall into that prejudice that Slattery J has talked about and found persuasive in Skyscanner where there would undoubtedly be tranches of expert reports that can't be in anyone's interest. I am satisfied it is necessary for you to put on your evidence to have access to the discovered documents as a global concept. I think we need to see whether some of the categories are beyond what is necessary, go through the categories that are in dispute. ...".
7. Having then gone through the categories of documents sought, the Registrar made the following orders, which orders were entered onto JusticeLink on 15 March 2018: "1. The defendant is to respond to the plaintiff's request for further and better particulars dated 1 February 2018 by 23 March 2018. 2. Pursuant to Part 21 Division 1 of the Uniform Civil Procedure Rules 2005 (NSW), the defendant is to provide discovery to the plaintiff of such of the documents in its possession custody or control as are identified in the Categories of Documents for Discovery annexed to these short minutes of order and marked "A", by 11 April 2018. 3. The proceedings be stood over to 17 April 2018 for further directions. 4. Costs of the plaintiff's notice of motion filed 15 December 2017 be the plaintiff's costs in the cause."

The Defendant's notice of motion

1. The Defendant filed a notice of motion on 5 April 2018, in which it sought a review of the decision of Registrar Walton, pursuant to UCPR, rule 49.16. It further sought to set aside the orders that had been entered on "14 March 2018". (It appears the reference to this date is in error, as the orders were made on 9 March 2018 and were entered on 15 March 2018. Nothing, however, turns on it.)
2. The Defendant's notice of motion was referred to me on 17 April 2018, and was listed for a pre-trial directions hearing on 23 May 2018. On that date, discussions took place between Bench and bar concerning the appointment of experts and whether a single expert could be appointed to provide the necessary evidence. The Court then made directions for various steps to be taken by the parties to determine who should be appointed.
3. This was done because, it seemed to me that, the categories of documents for disclosure might well be informed by the experts' view of the documents that he, or she, required, in order for each to provide the answers to the questions posed by the parties and/or by the Court, and also because I considered that there had been a significant delay in the conduct of the proceedings by the interlocutory disputes.
4. The matter came back before me on 12 June 2018. It seemed, then, that the parties could not reach agreement on the expert, or experts, to be appointed. Accordingly, the Court made directions for, amongst other things, the filing and service of submissions. The hearing date of 25 June 2018 was confirmed.
5. The legal representatives have complied with the directions that were made.
6. Having read the submissions of the parties, I requested my Associate, on 19 June 2018, to forward an email, in the following terms, to the legal representatives of both parties: "His Honour has read the submissions forwarded for each of the parties and by way of tentative approach to the hearing, asks whether the legal representatives, one again, could consider, the identity of the expert(s) to be appointed, and if agreement cannot be reached on the identity of a single expert in each of the disciplines identified, please provide the identity of the expert or experts upon whose evidence the party would seek to rely. The question of categories of documents may need to be considered following the determination of that issue and better able to be determined following the appointment of the expert(s). There is no need for either counsel to respond to this email. It has been sent for the consideration of the parties and the legal representatives and in compliance with s 56 of the Civil Procedure Act 2005 (NSW). His Honour notes that the hearing was listed to be of one-half day's duration."

Expert Evidence

1. Both parties agree that its case will be heavily dependent on expert technical evidence. At least part of the proceedings will turn on technical matters that will best be resolved by consideration of the technical evidence.
2. The Plaintiff says that it will require expert evidence from an hydraulic engineer "to express an opinion as to the base flows, stream flows and flow velocities of the watercourses known as Boundary Creek and a neighbouring watercourse, Peach Tree Creek" and from a fluvial geomorphologist "to express an opinion as to the cause, or causes, of collapses of, and the ongoing erosion in and to, those parts of Boundary Creek that are situated upon the Plaintiff's land".
3. The Defendant asserts that it will require a fluvial geomorphologist, with engineering qualifications, relevant to hydraulic processes.
4. I should mention that "fluvial hydraulics" is the branch of hydraulics that studies the flow of water in river channels. Geomorphology "is the interdisciplinary and systematic study of landforms and their landscapes as well as the earth surface processes that create and change them. Fluvial geomorphology is a branch of geomorphology that relates to rivers": O'Keefe v Water Administration Ministerial Corporation [2010] NSWLEC 9, at [15]. Fluvial morphology is therefore the science of the form of rivers as produced by river action.
5. It appears that the experts will be required: 1. to undertake the necessary hydraulic modelling and to prepare a report as to the actual base flows, stream flows and flow velocities of the watercourses known as Boundary Creek and Peach Tree Creek at Penrith, including an analysis (over time), of the nature and extent of flows in Boundary Creek, caused, or contributed to, by (1) the Penrith STP, and (2) natural run-off; 2. to prepare a report on the history, and extent, of the erosion in Boundary Creek and the cause, or causes, of collapses of, and the ongoing erosion in and to, those parts of the banks of Boundary Creek that are situated on the Plaintiff's land; 3. to identify the solutions and remedial measures suggested in respect of the erosion (if any) on the Plaintiff's land (although this may not be required immediately).

The hearing of the Defendant's notice of motion

1. The legal representatives of the parties accepted that the categories of the disputed documents, if any, to be produced would depend upon whether any of the experts required the documents for inspection in order to provide the expert evidence.
2. Then, after discussion with the Bench, the parties were able to agree on the identity of the experts to be retained and how the matter should proceed. They agreed that Dr Andy Markham, who is a Fluvial Geomorphologist, Surface Water Hydrologist and Chartered Environmental Scientist, should be appointed by the Plaintiff, as one expert and that Mr Tony McAlister, who is a registered professional engineer, with many years of water engineering expertise in the areas of numerical flood and water quality modelling, field data collection and assessment, amongst other things, will be appointed by the Defendant.
3. They also agreed that Dr Chris Gippel, who has significant experience in natural resources management, specialising in hydrology and geomorphology and who is a director of Fluvial Systems Pty Ltd, should be retained by them both as a joint expert. He will undertake the necessary hydraulic modelling and prepare a report as to the actual base flows, stream flows and flow velocities of the watercourses known as Boundary Creek and Peach Tree Creek at Penrith in the State of New South Wales, including analysis (over time) of the nature and extent of flows in Boundary Creek caused or contributed to by (1) the Penrith STP, and (2) natural run-off, a copy of which report will be provided to each of the other experts referred to.
4. Of course, the precise questions to be put to each of the experts are to be determined by the parties.
5. The parties then agreed that the Defendant's notice of motion should be adjourned until after each of the experts has been given an opportunity to consider the documents that he requires, including the categories of disputed documents.
6. The following orders and directions were then made without opposition: 1. Notes the agreement of the parties that Dr A Markham will be retained on behalf of the Plaintiff; Mr M McAlister will be retained on behalf of the Defendant; and Dr C Gippel will be retained as the joint expert; and that each is to provide his opinion on issues to be identified, and agreed upon, by the parties. 2. Directs that, within 28 days of the making of these orders, and supplemented, if necessary within 14 days after service of the lay evidence referred to, the parties are to agree on specified questions to be posed to each of the experts (the questions to be the same in the case of Dr Markham and Mr McAlister); the facts, circumstances and assumptions upon which his report is to be based (these to be the same in the case of Dr Markham and Mr McAlister); as well as the agreed categories of documents, which are, and the disputed categories of documents, which may be, made available to the expert. 3. Directs that within 21 days thereafter, each expert is to indicate which, if any, of the disputed categories of documents and any other documents, he requires in order to answer the specified questions posed by the parties, and/or any other questions that he considers require his consideration. 4. Directs that within 7 days thereafter, the parties are to deliver to the Chambers of Hallen J, in hard and soft copy, a consent order which deals with: 1. The disputed categories of documents to be provided to each expert; 2. The time for service of Dr Gippel's report (as this report will be required by the other experts); 3. The time within which each party may seek clarification of any aspect of Dr Gippel's report; 4. The costs of the report being borne equally by the parties, subject to either party seeking a different order; 5. The time for service after receipt of Dr Gippel's report, of the report of each of Dr Markham and Mr McAlister; 6. The time within which each party may seek clarification of any aspect of the report of each of Dr Markham and Mr McAlister; 7. Each party to bear the costs of the expert that it has retained subject to any party seeking a different order; 8. Any other matters upon which agreement can be reached. 1. Directs that each party is to serve the lay evidence upon which it is intended to rely within 42 days of the making of these orders. 2. Reserves the costs of the Defendant's notice of motion filed 5 April 2018. 3. Orders that the matter be stood over for further directions before Hallen J at 9:30 a.m. on Monday, 3 September 2018.
7. The Court is most grateful to the legal representatives of both parties for proceeding, at the hearing, in a co-operative, and conciliatory, manner, and in making submissions, and, where necessary, appropriate concessions, to enable the proceedings to be progressed in an orderly and efficient manner.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 June 2018