Liability
55As set out above, the relevant provisions of the CL Act must be applied in order to determine liability.
56The expert Mr Kelly has set out, within paragraphs 8.1, 8.2 and 9.1 of his second report dated 7 November 2011, that his experience has been, and that knowledge has also been acquired by him from others in his field, that spontaneous combustion of laundered items has occurred in commercial laundries as a result of sheets, towels and other materials self-heating and that (at paragraph 8.1) "in more recent years" such fires have occurred "far more readily as a result of the laundering of materials and especially towels that have been associated with either cafes or massage centres where oils are used".
57Mr Kelly also relates in paragraph 8.1 of this second report that, as at the time of making this report in November 2011, there had been two recent fires in commercial laundries and that preliminary investigations by officers had indicated that these fires had "developed as a result of ignition of towelling materials following them being heated in a dryer". He also relates that this situation has "in more recent years" more readily occurred "as a result of the laundering of materials and especially towels that have been associated with either cafes or massage centres where oils are used".
58Paragraphs 8.2 and 9.1 of Mr Kelly's second report go on to describe that commercial laundry operators commonly continue to remove laundered materials "folding them or even stacking them straight out of a dryer into a washing basket", and that "it has been well reported by others and on numerous occasions by myself that fire has developed as a result of heated material, and particularly towel, that has not be (sic) allowed to cool before it has been stacked or placed in containers which has later led to self heating/ spontaneous combustion."
59Mr Kelly also states at paragraph 9.1 of his second report that such fires "tend to occur after hours when the laundry is unoccupied" and suggests that "the scenario..... tends to indicate more readily" a special role of massage oil in the subsequent process of spontaneous combustion; unfortunately, no factual or empirical information is supplied to support this assertion. An evidentiary conclusion cannot be made, without acceptable proof, that the fact that a fire occurs due to spontaneous combustion after a laundry is closed suggests that massage oil played a role in the onset of that fire.
60The knowledge which has been acquired by Mr Kelly in the course of his experience investigating fires as to the incidence of apparent spontaneous combustion in commercial laundries appears to have largely arisen in "recent years". Apparently, Mr Kelly may only have become aware of this incidence in the period following the date of his first report on 24 August 2010 because it was not mentioned in his first report; this was, of course, after the fire. Further, and perhaps more importantly, the extent to which Mr Kelly's knowledge has been imparted to commercial laundry operators such as the Respondent is unknown.
61The available expert evidence does not of itself establish that spontaneous combustion of laundered items represented a foreseeable risk in respect of which the Respondent failed to take reasonably available steps.
62Some relevant factors which emerge from the evidence are that the Respondent had been operating his laundromat business at the premises for quite a number of years, that he had been consistently adopting the same work methods, including methods of washing, drying and storing clothes, and that there had been no incidence of any fire.
63The Applicant submits that:
"The Respondent conducted a business clearly at risk of fire, full as it was of flammable clothes in plastic dry cleaner's bags. Those clothes were side-by-side with power boards and electrical devices, some of the fabrics contained oil, and some of the fabrics hung above fuel in the form of plastic washing baskets. Those fabrics were industrially heated so as to dry.
In summary, there was heat and fuel all around the laundromat."
64The Applicant points out that "reasonable foreseeability" takes into account even remote possibilities, and draws attention to the High Court decisions in Manley v Alexander [2005] HCA 79 and Wyong Shire Council v Shirt [1980] HCA 12.
65In Manley, the High Court was dealing with a factual situation where a driver ran over a drunken pedestrian who was lying on the roadway, and it held that despite this being quite an unusual situation it was reasonably foreseeable that this might occur on this roadway, and that therefore it was reasonably incumbent upon a driver travelling in the area to keep a reasonable lookout ahead. Each case must be considered on its own facts when considering what is reasonably foreseeable; although a drunken person lying on a roadway might be seen to be a remote possibility, it may still be a situation in certain situations that is not so far-fetched as to render a driver who strikes that person blameless. It is doubtful whether a useful comparison can be made between the foreseeability to a driver of such a situation, and the foreseeability to a laundry operator of dried and stacked laundry items spontaneously combusting.
66That a risk may be remote yet still foreseeable was stated In Wyong Shire Council v Shirt, where the point was also made that a foreseeable risk may nevertheless involve a low duty of care; Mason J also made this observation:
"(15) The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable but, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risks and its degree of probability remain to be considered with other relevant factors."
67Of course, the above decisions preceded the advent of the CL Act. As set out above, Section 5B of the CL Act establishes that a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable, the risk was not insignificant and that, in the circumstances, a reasonable person in that person's position would have taken those precautions. Section 5B also provides that in determining whether a reasonable person would have taken precautions against a risk of harm, consideration must be had of the probability that the harm would occur if such care was not taken, the likely seriousness of the harm, the burden of taking precautions to avoid the risk of harm, and the social utility of the activity which creates the risk of harm.
68The Applicant submits that "running the laundromat (for a number of years) brought with it the foreseeability of loss by fire. Indeed, all of the particular fire risks identified by the experts were also foreseeable, as was the risk of a significant spread of the fire given the available fuel."
69Of relevance to this issue of foreseeability of risk are the observations of the Court of Appeal in Sibraa v Brown [2012] NSWCA 328 that:
"(41) Section 5B requires risks to be assessed prospectively. As a matter of ordinary language a 'risk of harm' relates to harm that has not yet happened. That is consistent with the requirement in section 5B(1)(a) that the risk of harm be 'foreseeable', which happens when a person knows or ought to know that there is a risk that harm might arise in the future ...".
70In Sibraa, the Court went on to adopt the observations of Gleeson CJ in Australian Safeway Stores Pty Ltd v Zaluzna [1987] 126CLR 479 that:
"(54) Very few occupiers keep their land in perfect repair. People are permitted to occupy, and some people can only afford to occupy, premises that are in state of some disrepair. Legislative and regulatory incursions upon the general proposition that a land owner may use land as the land owner sees fit, extensive as they have been, have never gone to the point of requiring people to remove all potential hazards from their land. It would not be possible to comply with such a requirement."
71The Applicant submits that the simple fact of running a laundromat for a number of years creates the foreseeability of loss by fire; this bald proposition is not supported by any evidence. What needs to be examined is whether there is evidence to establish that the Respondent knew, or should reasonably have known, that the stacking of clothes after removal from the dryer at the premises carried with it a risk of spontaneous combustion.
72The reports of the various experts referred to above contain observations of the state of the premises after the fire had occurred, their state of knowledge as to historical causes of fire including spontaneous combustion, and their opinions as to the most probable cause of the subject fire.
73There is no evidence to establish that the Respondent knew, or that a person in the Respondent's position should reasonably have known, of the risk of spontaneous combustion occurring in commercial laundries, or the steps available to avoid or minimise that risk.
74Although there is comment from experts that the practice of stacking clothes and other items after coming out of the dryer carried a risk of spontaneous combustion occurring, there is also no evidence which demonstrates that, objectively viewed, the Respondent should reasonably have foreseen this risk and altered his work system within the laundromat.
75It is obvious that the conduct of the laundromat business involved supply of electricity, as well as convected heat emanating from and within dryers. It can be accepted that clothes and towels are flammable, but not that they are unusually flammable. These factors would of course have been reasonably known to the Respondent.
76Even though there had not been any fire incident in these premises over the years of occupation by the Respondent, there was a foreseeable risk that clothing might burn if exposed to external ignition, but the foreseeable risk which is put forward by the Applicant is the risk that clothing would self-ignite. To repeat, there is no evidence to establish that such a risk was or should have been reasonably foreseeable to the Respondent. The Applicant submits that the fact of the Respondent running the laundromat over the years inherently brought with it the foreseeability of loss by fire, but there is no evidence which satisfactorily establishes that there was a reasonably foreseeable risk to a person in the position of the Respondent, operating the business over a number of years without incident, that fire would spontaneously generate from towels or other items which had been inside a dryer, even if such towels or other items contained some type of massage oil.
77The Applicant contends that there was also a risk of significant spread of the fire given the available fuel, and that the Respondent failed to take reasonably available steps such as dividing and sectioning the shop's flammable contents in order to prevent the fire's spread. The Applicant asserts that "clothes, linen and nylon bags were everywhere and upon (and underneath) one another"; this assertion is based upon the state of the premises after the fire when there had been considerable disruption caused by attending fire personnel, and is disputed by the Respondent. There is also no evidence to identify exactly what "flammable contents" should have been quarantined nor any expert evidence as to how this should have been done in order to prevent spread of a fire.
78It is also submitted on behalf of the Applicant that "plugs should have been regularly checked to see that they were properly seated in power outlets. Electrical equipment should have been switched off when not in use and it should not have been allowed to run unattended. Items which had to run unattended should have been electrically checked to see that they were fit for such use ... these were all costless measures. The fact that the fire occurred in itself suggests strongly that controls were missing."
79The suggested preventative steps set out above in paragraph 78 do not relate to the cause of the fire as urged by the Applicant, and accepted in this decision, that self-heating of clothing was a more probable cause of the fire than electrical malfunction. Those steps, combined with the suggested steps set out in paragraph 77, also appear to contain a significant proportion of hindsight rather than foresight.
80That the correct approach to determination of liability for negligence is one of foresight and not hindsight, is emphasised in the unanimous decision of the High Court in Adeels Palace Pty Ltd v Mouvarak & Anor [2009] ACA 48:
"(30) Whether any, and how many, security personnel should have been provided to satisfy the duty of Adeels Palace to take reasonable care depended upon the considerations identified in Section 5B(2) of the Civil Liability Act: the probability that the harm would occur, the likely seriousness of the harm, the burden of taking precautions to avoid the risk, and the social utility of the activity that created the risk......
(31) Many different matters were relevant to the questions that thus were posed. They included, but were not limited to, such matters as the number of patrons expected to attend the restaurant, the atmosphere that could reasonably be expected to exist at the function, and whether there had been any suggestion of violence or similar offence held in comparable circumstances, either at this restaurant or elsewhere. And all of those questions fell to be answered, and the probability of harm and other considerations mentioned in Section 5(b(2) assessed, prospectively, not with the wisdom of hindsight. That is, they were to be assessed before the function began, not by reference to what occurred that night."
81The Applicant also submits that "It would have cost little in time and money not only to let the clothes cool down but to keep.......clothes isolated from one another"; there is no evidence to show that, even if self-heating was a reasonably foreseeable risk, such a step as dividing clothes into separate piles would have averted or minimised loss to the Applicant.
82The risk that there would be a fire in the premises caused by spontaneous combustion of laundered items, or the risk that such fire would be accelerated by the manner in which items were located or left by the Respondent within the premises, are not risks which have been shown to be reasonably foreseeable by a person in the position of the Respondent in the period prior to the onset of the fire. Negligence on the part of the Respondent as a cause of the fire has therefore not been established; the contractual claim must therefore fail, and the Application dismissed.
83The presumption created by section 88 of the Administrative Decisions Tribunal Act 1997 is that each party is to bear its own costs unless the Tribunal considers it fair that a costs order be made, taking into account the various considerations set out within that section. Although an opportunity to make submissions as to costs has previously been afforded to the parties and not properly taken up, it is considered fair to permit further submissions at this point in time. If either party does not file and serve any submissions as to costs within the next 14 days, then there will be no order as to costs, given the statutory presumption.