Plaintiffs v Defendant

Plaintiffs v Defendant - [2010] VSC 169 - VSC 2010 case summary — Zoe

[3]

1 The three sets of plaintiffs are the owners, respectively, of three neighbouring farming properties in the Winlaton area south of Swan Hill. Together they brought a proceeding in the Victorian Civil and Administrative Tribunal ("VCAT") naming the Murray Darling Basin Commission[1] and the Goulburn-Murray Rural Water Authority[2] as respondents. They sought restraining orders and statutory damages against both respondents in relation to works connected with a certain salinity mitigation scheme, and similar relief against Goulburn-Murray only in relation to a certain irrigation channel. They alleged that over many years water had flowed from the salinity mitigation works and also from the irrigation channel causing increased salinity in the soil and groundwater of their farms. The respondents persuaded VCAT, constituted by Deputy President Macnamara, to dismiss the entire proceeding summarily under s 75 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") on the basis that, on the pleadings, it was doomed to fail.[3] The plaintiff then applied for leave to appeal to this Court under s 148 of the VCAT Act against the order for summary dismissal. While the application for leave was pending the Murray-Darling Basin Commission was abolished. It was replaced by the Murray-Darling Basin Authority established under the Water Act 2007 of the Commonwealth. On 5 February 2009 the Court granted the plaintiffs leave to appeal against VCAT's decision. At the same time it made an order substituting the Murray-Darling Basin Authority for the former Commission as the first defendant. The Court also corrected the name of the second defendant to "Goulburn-Murray Rural Water Corporation".[4] Certain federal constitutional issues then arose in relation to the position of the Murray-Darling Basin Authority. These issues no longer fall for consideration, because the plaintiffs have obtained leave to discontinue the appeal as against the Murray-Darling Basin Authority. A notice of discontinuance to that extent has been filed accordingly. Hence there is now only one defendant, the Goulburn-Murray Rural Water Corporation.

[67]

15 It will be seen that s 17(2) of the Water Act 1989 expressly denies the availability of s 16 in relation to a flow of water from the works of an Authority "in the exercise of a function under Part 8, Division 2, 3 or 5 of Part 10 or Part 11 or any corresponding previous enactment". That language is identical to the corresponding language of s 157(1). However, neither s 17(2) nor any other relevant provision expressly denies the availability of s 16 where s 157 is only made applicable by virtue of other legislation, such as s 17(3) of the Murray-Darling Basin Act 1993. It was on that basis that the plaintiffs asserted, in their written submissions before VCAT, that they were entitled to make claims under both s 157 and s 16. There are substantial differences between the respective conditions of liability under those sections. For example, under s 157, although the Tribunal needs to be satisfied that the flow of water has occurred as a result of "intentional or negligent conduct" on the part of an Authority, claimants have the benefit of a reverse burden of proof in that regard. Moreover, claimants under s 157 do not need to be concerned about whether or not the flow of water was "reasonable", whereas a condition of liability under s 16 is that "the flow is not reasonable": s 16(1)(b). Perhaps influenced by considerations of that kind, counsel for the plaintiffs indicated in their oral submissions before VCAT and again before me that the plaintiffs relied principally on s 157 rather than s 16. In any event, it has not been suggested that, by reason of context or otherwise, the particular provisions of s 16 that were ultimately in question in this appeal might require an interpretation different from that of the corresponding provisions of s 157. Hence, although the claim under s 16 in respect of the BCDDS has not been abandoned and will remain alive before VCAT on remittal, I will hereafter refer principally to s 157 rather than s 16 in explaining why I have reached my abovementioned conclusions.

[75]

It seems to me now as it seemed to me then clear that the Water Act causes of action whether they arise under Sections 16 or 157 are concerned with the effect of flows of water not with the effect of the chemical composition of water. Dr Sadler correctly observes that this point is made the clearer by the existence of a separate cause of action under Section 15 of the Water Act for polluting water. According to Dr Sadler Section 15(2) specifically excludes liability upon an authority for saline water if it is discharged in accordance with by-laws made under Section 161(d)[14] of the Water Act. In the present case we have no idea what those by-laws are nor whether the saline discharges were made in accordance with them. For present purposes however it is sufficient to note that no claim is made under Section 15 of the Water Act. In my view the claim against the Commission based on Section 16 is doomed to fail for that reason.
It follows that both foreshadowed claims against the Commission are doomed to fail for the reasons given. It is demonstrated with the necessary clarity that those claims must fail hence the commission is entitled to a summary dismissal of the claims against it pursuant to Section 75 of the Victorian Civil and Administrative Tribunal Act 1998.
I turn to the claims made against Goulburn-Murray. The same reasoning with respect to the relevance of the chemical composition of the water rather than its flow would appear to defeat a claim against Goulburn-Murray whether that claim be mounted under Section 16 or Section 157 of the Water Act. For present purposes it is unnecessary for me to express any view as to whether in the circumstances what Goulburn-Murray has done or is doing constitutes the exercise of a function under Part 8, Division 2, 3 or 4 of Part 10 or Part 11 of the Water Act (see Section 17(2)). The reasoning as to relevance of the chemical composition of the water as distinct from the consequences of its flow apply equally in my view to Sections 16 and 157 of the Water Act. It follows therefore that the second respondent is likewise entitled to an order under Section 75 of the Victorian Civil and Administrative Tribunal Act 1998 dismissing the claims against it.
The same reasoning necessitates the dismissal of the applicants' claim against Goulburn-Murray relative to the 6/7 channel."

[90]

Obviously, water will very frequently contain impurities. Indeed, totally pure water will rarely be encountered, except perhaps in laboratories. The defendant did not suggest before me, nor could it sensibly have suggested, that damage is only compensable under s 157 or s 16 to the extent that it is caused by a flow of totally pure water. Indeed, in South-East Water Ltd v Transpacific Cleanaway Pty Ltd[18], argument in which I had heard shortly before hearing argument in the present case, I had understood that it was common ground before me, and that it had been common ground in the relevant proceeding at VCAT (constituted, as in the present case, by Deputy President Macnamara) that raw sewage was "water" within the meaning of s 3 of the Water Act 1989; and that, accordingly, damage done by the discharge of raw sewage from a sewerage utility's pipes into the claimant's factory premises was potentially compensable under s 74 of the Water Industry Act 1994, a provision corresponding to s 157 of the Water Act 1989.[19] I put this to Mr Garde (who had not appeared in Transpacific). At least initially, Mr Garde seemed unprepared to accept a corresponding view of the definition of "water". He submitted that the true effect of the definition was that "water doesn't cease to be water because there's sewage or anything else in it that might constitute an impurity"[20]; and that, under the definition, " ... water simply means water. It's not suggesting that the impurities are water, it's saying that the water remains water regardless of the existence of impurities in the water".[21] Ultimately, however, this became a sterile debate. It ended with the following exchange[22] in which Mr Garde made a concession which, subject to the issue about whether a flow of water (as distinct from water which has relevantly flowed) needs to cause damage, I consider to be clearly correct and which makes it unnecessary to arrive at a concluded view as to the precise effect of the definition of "water":

[100]

30 I can see no warrant for reading down the scope of s 157 or s 16 by reference to s 15. As the Deputy President himself said, s 15 creates a separate cause of action for polluting water. True, it may overlap with s 157 or s 16 in some situations. But essentially it is directed to different subject matter. Among other things, it is directed to damage to water rather than damage by water. Subject to one matter, to allow a claim to be made under either (or both) of s 15, on the one hand, or s 157 or s 16 on the other, in respect of damage suffered by a person due to the polluting of water by toxic water that has flowed from the works of an Authority or from the land of another person (as the case may be), does not seem to me to be inconsistent with or repugnant to the terms or policy of any of those provisions. The qualification is that s 15(2) would, if appropriate by-laws were in place,[26] provide a defence to a saline discharge claim under s 15(1)(c), being a defence that could be avoided by making the claim under s 157 or s 16. However, that matter does not justify reading down s 157 or s 16. Parliament expressly limited the potential s 15(2) defence to claims under s 15(1)(c). Had it so desired, Parliament could easily have created a similar defence to claims under s 16 or s 157 based on saline discharges. But it did not. A moment's reflection throws up likely explanations. A claimant under s 157 or s 16 faces hurdles not faced by a claimant under s 15. Under s 157 the claimant must establish a flow of water from the works of an Authority onto land. It must then be found that the flow was the result of intentional or negligent conduct on the part of the Authority;[27] and that such conduct occurred in the exercise of one or more of the functions of the Authority specified in s 157(1). A special form of proportionate liability applies[28]; and there are other special limits on the assessment of damages.[29] Correspondingly, under s 16, the claimant must establish a flow of water from the land of a person onto other land and must establish that the flow was not reasonable, taking into account the lengthy list of considerations set out in s 20. By contrast, subject to s 15(2), a person who pollutes water, whether or not authorised to do so, and thereby causes another person to suffer injury, damage or loss, is ipso facto liable to pay damages to that other person. Understandably, Parliament has chosen to make provision for protection against that particular "strict" liability in specified circumstances. There is no reason to believe that Parliament intended that protection to extend to cases where, for example, the flow was not reasonable or the conduct of the Authority was intentional or negligent.

[117]

"The position is otherwise with the allegations in paragraphs 6-11 which in my view do not relate to the flow of waters from one land to another. They relate to wrongs in respect of the supervision of construction and occupancy of a house and representations as to this. Unlike the Montana Hotels case, the claim in paragraphs 6-11 was not directed to the flow of waters onto the plaintiff's land. Rather the claim was directed to the deficiencies in supervision and design of the plaintiff's dwelling house. All of this took place within the plaintiff's land and did not arise from the flow of waters from other lands. The defect and damage always lay within the plaintiff's land and it was only an aspect of loss that depended on the flow of waters. Even there it might on one view be said that the flooding occurred within the plaintiff's land.

The upholding of jurisdiction here would be tantamount to finding jurisdiction where there had been the supply of a defective drainage outlet or its defective installation and consequent damage after heavy rain and surface waters from higher ground. Similarly, where the outlet was said to be negligently manufactured or badly designed. In my view it is a distortion of language to refer to such a claim as one arising out of the flow of waters from the lands of another. Not only is this so on a consideration of the words of s 4. It becomes even more evident on reading the Act as a whole for there is nothing in its provisions to support such a wide reading. On the contrary, the language is wholly inappropriate to claims founded on an act of negligence such as faulty design of a product or negligent construction of a house. In these cases the flow of waters is no more than a factor going to damage. The detailed provisions in s 9 relating to the reasonableness of the flow of water have no part to play in eliciting, for example, whether the matters pleaded in paragraphs 6-11 constitute a good cause of action.

I am accordingly of the view that the Chairman was correct in his view that the matters in paragraphs 6-11 of the claim were not within jurisdiction."

[118]

37 These passages put into context his Honour's later reference to "any such wide reading" in the passage picked up by Deputy President Macnamara in Leongatha. In truth, Page is readily distinguishable from cases like the present. It related to significantly different legislation. The Drainage of Land Act 1975 related to "private" claims, not claims against water authorities. Broadly speaking, that Act may be described as the predecessor of s 16 of the Water Act 1989, but not of s 157. Even in relation to private claims, the scheme was different. The Act picked up common law causes of action. It did not create statutory causes of action. The jurisdictional provision in question (s 4(1)(a)) referred to "civil causes of action arising out out ... the flow of waters from the lands of a person in such a way as to cause damage to or which can be reasonably be expected to cause damage to the land of any other person". The current provisions contain no equivalent of the expression " ... the flow of waters ... in such a way as to cause damage ...", whatever that expression may mean. In any event, there is nothing in Page to suggest that, even under the Drainage of Land Act 1975, a claim would have been outside jurisdiction if the damage had been done by the chemical composition of water from a flow rather than by the "flow" itself. Jurisdictionally, the objectionable feature of the relevant part of Ms Page's claim was that her complaint about the conduct of the Council (namely, negligent inspection of Ms Page's house and negligent issuing of the certificate of occupancy) was not a complaint about causing or permitting water to flow from the Council's land onto Ms Page's land. As Gobbo J said, the flow of waters was "no more than a factor going to damage". By contrast, in the present case, the plaintiffs' complaint is indeed about the defendant having caused or permitted water to flow onto (or to) their farms, causing damage. If anything, Page contradicts the approach taken in Leongatha and in the present case.

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