REED v WARBURTON

Duty of care 7Despite the heading to Pt 1A, Div 2 of the Civil Liability Act 2002 (NSW), "Duty of care", that Act does not identify a particular approach to be adopted in determining whether a duty of care exists in any particular circumstances: see Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; 239 CLR 420 at [13]. Accordingly, that question must be determined in accordance with principles established under the general law. 8That the respondent, a licensed plumber contracted to undertake soldering work on the appellant's property, owed the appellant a duty to take reasonable care to avoid setting fire to any part of the property, is not in dispute. The risk of fire, including by the application of the naked flame of an oxyacetylene torch to straw used in the construction of the walls, was clearly appreciated by both the appellant and the respondent. Together, they swept a quantity of loose straw from the area in which the respondent was to work, 20 litre buckets of water were made available to put out any fire which might be lit and the appellant provided the respondent with a piece of corrugated iron to use as a heat shield.

Breach of duty 9The question whether the respondent was in breach of his duty of care lies at the heart of the contest in the present proceedings. That question is to be resolved by reference to the general principles outlined in ss 5B and 5C of the Civil Liability Act . Because it is still common for cases to be argued without express reference to the Act, it is convenient to set out the relevant provisions which must guide the Court in its assessment of this issue. " 5B General principles (1) A person is not negligent in failing to take precautions against a risk of harm unless: (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things): (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm." 10Other principles are to be found in s 5C, but they have no direct bearing on the present proceedings and need not be considered. 11The first dispute concerned the nature of the "risk" which it was necessary for the appellant to establish was foreseeable and not insignificant. To appreciate the contest in respect of this issue, it is necessary to outline the circumstances in which the fire occurred. 12For the purpose of the work to be undertaken on the morning in question, the respondent was required to solder copper piping in three parts of the premises. (Although both the parties and counsel referred indiscriminately to soldering and welding, it was common ground that the former term was accurate and that no actual welding occurred.) The first part of the work was undertaken in the kitchen, where the piping was located close to the rear wall and where the compressed hay bales were exposed. Whether accidentally or deliberately, in the course of undertaking that work, one of the bales ignited. The respondent described this as an experiment or test, while the appellant said that it occurred accidentally in the course of undertaking the appropriate work, but nothing turns on which description is correct. Three aspects of the incident are significant. First, the proximity of the pipe to the unlined interior face of the rear wall of the premises apparently made it difficult to insert a heat shield between the pipe and the bales. Secondly, some water was splashed on the bales prior to use of the oxyacetylene to reduce the risk of fire. Thirdly, once the bale had ignited, the fire was quickly and easily extinguished by application of water from one of the buckets. 13The second task undertaken by the respondent on that morning took place in the separate toilet off the laundry. The laundry was separated from the kitchen by a bathroom, and the same system of piping ran through all three rooms. It appears that, by undertaking the work in the order adopted, the ability to move the piping in the bathroom, which was the third task undertaken, was significantly reduced. In any event, the second task, undertaken in the laundry toilet, was completed without mishap. The respondent did not need to dampen the walls, nor did he use a heat shield, because the piping was far enough away from the wall, in the respondent's view (the distance being estimated to have been 33cm), to render such precautions unnecessary. 14Having completed the work in the kitchen and the toilet, the respondent moved to the bathroom which was between the other two rooms. The work to be undertaken on the piping in that room was close to the rear (external) wall of the bathroom and also close to the internal stud wall which separated the bathroom from the kitchen and intruded into the rear wall of the house. The configuration in the bathroom differed from that in the other two rooms in three critical respects. First, the straw bales which formed the rear wall of the bathroom had been lined with fibro sheeting known as villaboard. This, it appears, was not flammable. Secondly, the interior face of the rear wall had been recessed in order to provide room for the bath. Accordingly, that internal face was not aligned with the interior of the rear wall of the kitchen. 15The full width of the rear wall appears to have been 400mm, being the width of a bale: Tcpt, p 37 (15). Where the kitchen joined the bathroom, and the internal stud wall intruded into the rear wall, there was a space between the bales forming the rear walls of the kitchen and bathroom, being the width of the intruding internal stud wall. 16A sketch plan prepared at trial showed two columns in the internal wall, level with the interior face of the kitchen rear wall. There appears to have been a further vertical timber or metal support further into the rear wall. There was, therefore, a gap between the compressed bales forming the rear wall, the width of the internal wall, less the space taken by the two vertical columns. At the time of the third task being undertaken by the respondent, there was no facing attached to the bathroom side of the internal wall. There was, however, lining along the interior face of the rear bathroom wall to a height of 1200mm. Because that wall was recessed, the gap caused by the intruding internal stud wall was exposed on the bathroom side. The evidence suggested that the gap was between 5mm and 10mm. The appellant had sought to fill the space caused by the intruding internal wall with hay, which he compressed, but only so far as he was able to do so by hand. Both parties agreed that loose hay was far more flammable than compressed hay bales, and it was not in doubt that the hay in the internal wall was not compressed to the extent of the bales. It is also not in dispute that the fire began when the hand-pressed straw caught alight during the soldering exercise. 17The respondent contended that the foreseeable risk of harm, for the purposes of s 5B(1)(a), was the risk of damage by fire caused by a compressed hay bale igniting, being a risk which had been observed in conducting the first task. He resisted the proposition that the risk extended to the possibility that hay not mechanically compressed would catch alight and cause an uncontrollable fire. 18The appellant contended that the relevant risk was that the property would be damaged by a fire caused by igniting hay. He argued that any fire carried the potential to become uncontrollable. Whether or not it did might well depend on how quickly it was detected. 19The respondent's contention depended, in effect, upon the assumption that the foreseeable risk was that identified when the hay bale was ignited in the kitchen. That was no doubt part of the foreseeable risk, but it did not constitute the whole. First, it was clear that a far greater risk was foreseeable from loose straw and steps had been taken to sweep the areas where the soldering was to take place. Secondly, the assumption that any fire would be immediately detected did not define the limits of foreseeability. That the fire which started in the gap in the wall, into which the respondent was at pains to insist that he could not see, was itself an example of an unknown danger. The risk of harm should therefore be more broadly identified as the risk of straw igniting as a result of heat emanating directly or indirectly from the oxyacetylene torch. 20However the risk was identified and the respondent conceded that it was "not insignificant" for the purposes of s 5B(1)(b). It was also accepted that a reasonable person would have taken precautions against the risk. The question in dispute was the nature and extent of those precautions. 21Section 5B appears to be directed to a case where a person who has, or should have, identified a risk of harm, must then take "precautions" against it, as opposed to simply exercising reasonable care in going about his or her activities. For example, in the present case, it makes sense to speak of the use of a heat shield or ensuring the availability of buckets of water as "precautions": the need to take care not to allow the flame too close to inflammable material is less helpfully described as taking a precaution. The latter simply involves taking reasonable care. The infelicity of the expression of s 5B need not be problematic, but it may be necessary to avoid an unconscious tendency to look for identifiable "precautions" instead of considering whether the responsible party has simply failed to exercise reasonable care. 22Both elements were at play in the present case. On the one hand, there was an issue as to whether the respondent had taken appropriate precautions in placing a heat shield across the gap in the wall. On the other hand, the mechanism by which the straw ignited, is unclear. The respondent said that the first indication he had of a fire was seeing "a foreign piece of straw about so long probably about an inch or so hanging - coming - poking between through between the studs": Tcpt, p 81 (5). He was asked what happened then and stated at p 81 (12): "It burnt back into the wall and roared like a - I can't explain it but it was a roar as it just all ignited and flew straight up like a chimney ...." 23The respondent later described the piece of straw as being in the gap between the villaboard and the stud and "possibly 10 inches to a foot" above the soldering operation: p 86 (10)-(20). He also indicated that the pipe on which he was working came through the internal wall from the kitchen at a point "4 to 6 inches" from the corner of the rear and internal bathroom walls. He had with him a sheet of corrugated iron provided by the appellant, approximately "1 metre long [and] 600 high" (Tcpt, p 80) which he fitted across the corner, covering an area of the villaboard and part of the gap in the internal wall. However, he explained in cross-examination (p 87 (5)): "A. The sheet of corrugated iron came in at an angle, hit the stud and that was as far as it could go. It could not go past that piece of straw that was coming out. Q. So well, the corrugated iron is then on an angle? A. Yes. Q. So you've got the pointy, if you like the lower pointy end. Is that hard against the stud? A. No, it was not possible to get it in hard against the bottom. Because it was sitting up on the pipe it's coming in at an angle and that square edge once the top corner hit plate, hit the wall - the stud, it stopped. Q. So there's a triangular gap formed by the top of the corrugated iron and the stud because it's on an angle, that's where the straw was poking through was it? A. That's correct. Q. I see and now as I understand your evidence you didn't see that bit of straw until it caught fire is that right? A. That's correct. Q. But it's 10 inches high? A. Yes." 24The case put to the trial judge had two elements to it. First, it was contended that the defendant was careless in failing to observe the straw protruding from the wall, until it was alight. He was also said to have been careless in failing to take any steps to check whether there was loose straw in the gap between the villaboard and the vertical stud, before commencing the soldering operation. 25Secondly, it was contended that he was negligent in failing to take precautions. The first precaution, as required by the relevant Australian Standard, "Safety in Welding and Allied Processes - Part 1: Fire Precautions", was to isolate the area in which he was operating. 26The submission to the trial judge was in the following terms: "Even on his own evidence, the piece of corrugated iron that he inserted was, it is submitted, wholly inadequate for the task. The defendant could, and should, have either used the heat shield he kept in his truck or asked the plaintiff to cut him a piece of corrugated iron that [would?] fit behind the area to be welded." 27The respondent was also criticised for failing to obtain the fire extinguisher which he kept in his truck, before commencing the soldering operations. 28The precise mechanism by which the fire started is by no means clear. If there were indeed straw protruding in the gap in the stud wall, it is surprising that the defendant did not see it before he commenced using the oxyacetylene torch. If it were not there at the time, it is by no means clear from the evidence how it was that he later observed a lighted straw. If he failed to see and remove the straw, there was prima facie evidence of a failure to take reasonable care. If there had been no loose straw protruding from the gap, to act as a kind of wick, it would seem that the flame of the oxyacetylene torch must at some point have been directed towards or into the gap. Given his evidence that he did not know what was in that internal area, because he could not see through the gap, his failure to take steps to ensure that heat did not enter the gap is also prima facie evidence of failure to take reasonable care. That inference is not diminished by the apparent recognition on the part of the respondent that a heat shield was necessary, accompanied by the insertion of the corrugated iron, but leaving a gap at the bottom arguably in a crucial spot, combined with a failure to obtain a smaller heat shield from his truck. His evidence in cross-examination on this issue was as follows: "Q. Now I think you've said that you had in the back of your truck heat shields is that right? A. No - yes and no, if I could clarify that. I got pieces of - short pieces of like a fibro substance I keep behind the seat of the truck for doing small welds that I can poke in behind. If you're on a job and you need a bigger piece or a bigger seal you find one and use it. Q. So having inserted the corrugated iron in place and having that triangular gap where the corrugated wasn't going to provide you with any protection you could if you'd wanted to gone back and got your small heat shield and used that to give you increased protection? A. Possibly. When you're welding a joint you use the angle of the torch to keep the heat away from the surface you don't want it on. You put the heat on the joint that you're welding so you get the torch in behind and focus the heat back out towards yourself so you're not actually putting heat into where the combustible material is. Q. And the way in which you held - sorry if I understand your evidence, you could have if you'd wished to [use] the small heat shield you had in the car, is that right? A. If there was a need for it yes." 29The possibility that the fire was caused by heat radiating from the heated pipe was explored but dismissed: the respondent stated that it was "nowhere near the straw, the heated pipe": Tcpt, p 90 (14). 30On the balance of probabilities, there was either exposed straw which the respondent did not notice or he took steps which allowed heat into the gap in the wall, through the space where the corrugated iron did not provide protection. On either view, the respondent exercised less than reasonable care to avoid the risk of causing fire. 31There was no question that either taking more care in observing the surroundings, or obtaining a small heat shield from his truck would have been steps which were unduly burdensome or otherwise unlikely to have been taken by a person exercising reasonable care. It follows that the respondent was negligent in failing to take reasonable care to avoid the risk of setting fire to the straw. 32A further possible precaution proffered in evidence-in-chief was that, if he had been warned of the existence of hand-packed straw in the gap in the internal stud wall, the respondent could have undertaken his tasks in a different order, which would have allowed him the flexibility to pull the pipe in the bathroom away from the corner and push it back into place once it had cooled: Tcpt, p 79 (25)-(30) and 88 (10)-(22). 33Although there is a prohibition on a plaintiff making self-serving statements on a hypothetical basis, after the event, the prohibition does not extend to a defendant: Civil Liability Act , s 5D(3). One effect of this evidence was to give causative significance to the failure of the appellant to tell the respondent of the hand-packed straw in the gap, an omission discussed in relation to contributory negligence. However, the evidence does not preclude a finding that, based on what he actually knew at the time, the respondent was negligent in undertaking the third soldering operation in the manner that he did.

Causation 34It was not submitted that, if there were negligence, it did not, in an historical sense, cause the fire, for the purposes of s 5D(1)(a) of the Civil Liability Act . 35Nor was it submitted that it was inappropriate, in a normative sense, for liability to extend to the harm so caused, for the purposes of s 5D(1)(b). Catastrophic though the damage was, it was precisely that which might have been foreseen, if a fire had started and not been immediately detected.

Contributory negligence 36There remains a question as to whether the liability of the respondent should be reduced on account of any contributory negligence of the appellant. This is to be determined in accordance with the principles set out in s 5R of the Civil Liability Act . Although the appellant owed no duty to himself, in a legal sense, to care for his own property, the Act requires that the principles applicable in determining whether a person has been negligent also apply in determining whether the person who suffered harm has been contributory negligent "in failing to take precautions against the risk of that harm": s 5R(1). Again, it is appropriate to consider the conduct of the appellant generally, without being unduly constrained by reference to taking "precautions". It is also necessary to apply the standard of a reasonable person "in the position of" the appellant. As emphasised by his senior counsel, that involved consideration of his knowledge and matters of which he ought reasonably to have been aware, as an owner/builder, but he should not be treated as having the experience or knowledge of a licensed plumber. 37The conduct relied upon for the purposes of establishing contributory negligence was the failure of the appellant to tell the respondent about the hand-packed straw in the internal wall. To say that he should have been aware of the risk that this aspect of the building presented is merely to recognise that he, like the respondent, was conscious of the dangers of loose straw being greater than the dangers presented by compressed bales. In cross-examination, the appellant acknowledged that straw which was not mechanically compressed was more flammable and agreed that he had not pointed out that there were points where the straw was packed by hand: Tcpt, p 38. He also accepted that he was "aware ... that an area where [the respondent] was going to work was more susceptible to fire than other areas": Tcpt, p 39 (5). 38Applying the principles in s 5B, the appropriate inference is that the appellant failed to take reasonable care in respect of the risk of fire in the corner of the bathroom where the third operation was to take place and was thereby contributorily negligent. 39The remaining task is to apportion liability as between the parties. In his written submissions at trial, the respondent contended that, if he were liable in negligence, the appropriate proportion for contributory negligence would be 60%-65%. The plaintiff denied any element of contributory negligence, but submitted that any apportionment should be no more than 10%-15%. 40No precise assessment of contribution is possible: given the respective omissions and carelessness referred to above, a reduction for contributory negligence of 50% is just and equitable.

Reasoning of trial judge 41Much of the judgment of the trial judge is uncontroversial. In making findings of fact, two passages are, perhaps, open to criticism because of the inferences ultimately drawn. In his Honour's judgment at p 4 he stated: "I find as a fact that Mr Warburton placed the heat shield as best he could in the circumstances. ... There was apparently (but unnoticed by Mr Warburton) a piece of straw protruding from a narrow gap between the intersection of the internal stud wall and the lined exterior wall which caught fire as Mr Warburton was welding the particular joint." 42In respect of the first finding set out above, it may be accepted so far as it goes, but it fails to consider whether "the" heat shield was itself inadequate in the circumstances and whether one of the small heat shields readily available in the respondent's truck should have been used. 43In respect of the second finding, there is no explanation as to (a), how loose protruding straw was not noticed, without carelessness on the part of the respondent and (b), how the ignition of a single piece of straw could cause the straw to ignite inside the wall before the respondent could extinguish it. 44The real concern with the reasoning appears in relation to the findings made as to the relevant elements of negligence. Instead of addressing the issues by reference to s 5B of the Civil Liability Act , his Honour commenced his analysis by setting out a passage from the judgment of Mason J in Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40 at 47-48. In addressing the question of breach the trial judge then stated: "In my view, in this case a reasonable man in Mr Warburton's position would not have foreseen that his conduct involved a risk of fire. If Mr Warburton had been informed by the plaintiff of the loose straw as an experienced plumber and as a man well aware of the danger of using an oxyacetylene torch near flammable material he would have taken different precautions. He could, as he said in evidence, have done the work in a different way or in a different position so that the relevant weld would have been done at a place removed from that particular location. ... The real cause of this fire, in my view, was the presence of loosely packed straw adjacent to where the weld was being done and concealed by the internal lining adjacent. There was no way that the defendant could reasonably have known of this." 45This reasoning focuses almost entirely on the ignorance of the respondent of the hand-packed straw in the space within the internal wall. That approach is also reflected in his Honour's contingent comments with respect to contributory negligence, a finding which was not necessary in the absence of a finding of negligence on the part of the respondent. He found that the level of responsibility of the appellant, who was aware of the hand-packed straw, but had not informed the respondent of its presence, was "probably in the order of ninety percent": Judgment, p 7. 46In the light of the factors discussed in reasoning set out above, the analysis of the trial judge was deficient in a number of respects. These included: (a) a failure to explain how, if there were indeed straw protruding from the wall, the respondent failed to observe it before it was alight; (b) the failure to place an adequate heat shield to protect the gap in the wall, the respondent not knowing what lay behind the cladding; (c) a failure to explain how the single lighted straw observed by the respondent could have started the fire which was, almost immediately after it was observed, out of control, and (d) a focus on what the respondent said he could have done had he known of the danger caused by loose straw in the wall cavity. 47In my view these elements led his Honour to reach a mistaken conclusion in respect of the primary issue of negligence. It also (and consistently) led his Honour to place undue weight on the failure of the appellant to tell respondent about the straw he had packed into the cavity in the internal wall, between the bales comprising the separated portions of the rear wall.

Conclusions 48As noted by the trial judge, the parties had agreed that the appellant's loss, resulting from the fire, was $210,000. (This appears to be the principal amount, without interest.) It follows from the findings set out above that there should be a judgment in favour of the appellant in an amount of $105,000, allowing for the 50% reduction on account of contributory negligence. 49As appears from his Honour's reasons, which were made available to this Court without objection from either party, the defendants made an offer of compromise prior to the trial, in an amount of $212,000, which was not accepted. (Although this exceeded the principal loss suffered by the appellant, the offer was below the likely loss, after allowing for interest.) The offer was referred to by the respondents, in seeking an order for indemnity costs from the date of the offer. Perhaps generously to the appellant, his Honour did not make an order for indemnity costs but merely ordered that the plaintiff was to pay the defendant's costs: Judgment, p 9. In the notice of appeal, the appellant sought an order that the respondents pay his costs of the proceedings: there was no cross-appeal challenging the failure to award indemnity costs. 50In this Court, the appellant has been successful in having the judgment for the respondents set aside, but has been found 50% liable for the loss suffered, although it may also be said that he reduced the notional finding of the trial judge in that regard. Consistently with that outcome, and giving some weight to the offer of compromise, one approach would be to make no order as to the costs in the Court below, leaving each party to bear his or their own costs. A similar view could be taken of the costs in this Court. However, the parties sought, and should in the circumstances have, an opportunity to make submissions in writing as to the appropriate orders with respect to costs, both in this Court and at trial. 51Putting aside the question of costs, the Court should, in my view, make the following orders: (1) Allow the appeal and set aside the orders made by the District Court on 9 February 2010 (2) In place of those orders, give judgment for the appellant in an amount of $105,000, together with pre-judgment interest, the judgment to take effect from 9 February 2010. (3) Direct each party to: (a) file written submissions (and any evidence on which he or they may seek to rely) in respect of the costs of the trial and the appeal within 14 days of delivery of this judgment; (b) file submissions in reply (if any) within 21 days of delivery of this judgment. (4) Grant the respondents a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the costs of the appeal. 52HANDLEY AJA: : I agree with Basten JA.

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: 20 April 2011