Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater

rom insurance broker for failure to obtain insurance cover. Legislation Cited: Appropriation Act (No 2) 2006-2007 (Cth) Civil Liability Act 2003 (Qld) Civil Procedure Act 2005 (NSW) Disaster Management Act 2003 (Qld) Evidence Act 1995 Income Tax Assessment Act 1997 (Cth) Judicial Review Act 1991 Judicial Review Act 1991 (Qld), Queensland Reconstruction Authority Act 2011 (Qld) Rural and Regional Adjustment Act 1994 (Qld) Trusts Act 1973 (Qld), Cases Cited: Bailey v Bullock [1950] All ER 1167 Baxter v Obacelo Pty Ltd (2001) 205 CLR 634; [2001] HCA 66 Brickhill v Cooke [1984] 3 NSWLR 396 Campbelltown City Council v Mackay (1989) 15 NSWLR 501 Clarke v Shire of Gisbourne [1984] VR 971 Haines v Bendall (1991) 172 CLR 60; [1991] HCA 15 Herridge & Ors v Electricity Networks Corporation t/as Western Power (No 4) [2019] WASC 94 Johnson v Australia Casualty Co Ltd (1992) 7 ANZ Insurance Cases 61-109 Manser v Spry (1994) 181 CLR 428; [1994] HCA 50 MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3 Minister for Immigration and Ethnic Affairs v Conygham (1986) 11 FCR 528 Minister for Immigration and Multicultural Affairs v Thiyagarajah (2000) 199 CLR 343; [2000] HCA 9 Moore v Scenic Tours (2020) 377 CLR 209; [2020] HCA 17 Muirhead v Kingborough Council (No 2) [2000] TASSC 127 National Insurance Company of New Zealand Ltd v Espagne (1961) 105 CLR 569; [1961] HCA 15 Powercor Australia Ltd v Thomas (2012) 43 VR 220; [2012] VSCA 87 Redding v Lee; Evans v Muller (1983) 151 CLR 117; [1983] HCA 16 Rentokil Pty Ltd v Channon (1990) 19 NSWLR 417 Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 23) [2020] NSWSC 650 Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 24) [2020] NSWSC 1498 Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 25) [2020] NSWSC 1544 Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657 Sayeng v Kellog Superannuation Pty Ltd [2003] NSWSC 945 Thomas v Powercor Australia Ltd [2011] VSC 586 Thorpe v Lochel (2005) 31 WAR 500 Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91 Zheng v Cai (2009) 239 CLR 446; [2009] HCA 52 Category: Consequential orders (other than Costs) Parties: Rodriguez & Sons Pty Limited (Plaintiff) Queensland Bulk Water Supply Authority t/as Seqwater (First Defendant) SunWater Limited (Second Defendant) State of Queensland (Third Defendant) Representation: Counsel: J Sexton SC; N Owens SC; R May; S Chordia (Plaintiff) J Stoljar SC; D Klineberg; T Prince (First Defendant) D Williams SC; HJA Neal; A Barnett (Second Defendant) JM Horton QC; E Morzone; D Bampton (Third Defendant)

Solicitors: Maurice Blackburn Pty Ltd (Plaintiff) King & Wood Mallesons (First Defendant) Norton Rose Fulbright (Second Defendant) Crown Solicitor for the State of Queensland (Third Defendant) File Number(s): 2014/200854

Judgment

1. Following the publication of the principal judgment (Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657; "Rodriguez (No 22)") and a judgment dealing with apportionment (Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 23) [2020] NSWSC 650; "Rodriguez (No 23)"), the next round of issues to determine in these proceedings was the appropriate order for costs of the proceedings, the resolution of the remaining causation and quantum issues affecting the sample group members [1] and motions for the referral of various claims of group members to a referee in anticipation of a later application by the plaintiff for an order under s 177(1)(f) of the Civil Procedure Act 2005 (NSW) ("CPA (NSW)").
2. Both costs and the motions for referral have now been dealt with. [2] This judgment deals with causation and quantum issues affecting the sample group members. It assumes a familiarity with Rodriguez (No 22) and Rodriguez (No 23).
3. There were five sample group members whose claims were not fully determined by Rodriguez (No 22) and Rodriguez (No 23): Mr and Mrs Keller, Ms Visser, Ms Lynch and Ms Harrison. The balance of all four matters was due to be heard (along with the other issues) in the week beginning 26 October 2020. Mr Keller was required for cross‑examination but unfortunately he became ill shortly before the hearing. The hearing of his and Mrs Keller's claims will take place on 11 December 2020. Evidence and submissions were received in relation to Ms Harrison's claim. However, in what represents something of a miracle for these proceedings, agreement was reached over the quantum of her claim, although it was agreed the evidence adduced from her provides a convenient vehicle to resolve an issue raised by the State that affects other group members. Ms Visser and Ms Lynch's matters proceeded, although for the reasons that I will explain a dispute broke out over one component of their claims, namely cleaning costs, that necessitates the obtaining of further evidence. That aspect of their claims will also be litigated on 11 December 2020. The balance of their claims is addressed below.
4. Further, by a notice of motion filed 10 September 2020 [3] the State sought, inter alia, that certain questions be determined as questions common to the claims of all group members, namely: "Q 39: Should money received by Sample Group Members and Group Members from the Premier's Disaster Relief [Fund] be taken into account in the assessment of any damages, and if so, in what way? Q 40: Should money received by Group Members from funding available to individuals and families under the Natural Disaster Relief and Recovery Arrangements (NDRRA) be taken into account in the assessment of any damages, and if so, in what way? Q 41: Should the award of interest payable on the determined amount of damages be reduced on account of loans made to Group Members under the QRAA and NDRRA?"

Premier's Disaster Relief Fund

1. According to the report of the Chairperson of the Premier's Disaster Relief Appeal Distribution Committee (the "Distribution Committee"), on 29 December 2010 the Queensland government launched the Premier's Disaster Relief Appeal ("PDRA"). On 10 January 2011, the Premier announced the appointment of that committee to oversee the distribution of the funds raised.
2. On or about 19 January 2011, a Trust Deed was executed by the then Premier of Queensland, the then Treasurer of Queensland and the then Minister for Police, Corrective Services and Emergency Services of Queensland as initial trustees. The Deed established a charitable trust which was to hold a fund known as the "2010/2011 Queensland Floods Disaster Relief Fund" ("PDRF"). [5]
3. Recital B to the Trust Deed provided that "[t]he Trustees propose to solicit and accept gifts, or as the case may be appropriations, of money from the general public, industry, the State of Queensland" and other government authorities or instrumentalities or any other appropriate source.
4. Clause 2.1 of the Trust Deed provided that the trustees declared that "they hold the Fund upon trust solely for charitable purposes involving the provision of money for the relief … of people in Australia in distress as a result of the Disaster". The phrase "Disaster" was defined as meaning the "widespread flooding in Queensland in the areas covered by disaster situations declared under the Disaster Management Act 2003 (Qld) in December 2010 and January 2011, being a disaster that satisfied the requirements of subsection 30‑46(1) of the Income Tax Assessment Act 1997 (Cth)". It was accepted that this was not confined to the flooding in Brisbane and Ipswich that occurred on or about 11 January 2011. The material described below confirms that it included flooding across the State as well as a result of Cyclone Yasi.
5. Consistent with what was stated in the Trust Deed, appeals were made to members of the public. For example, in January 2011 a poster was distributed stating, inter alia: [6] "Premier's Disaster Relief Appeal Queenslanders need your help … Queenslander is reeling from the worst natural disaster in our history. Three quarters of the State have felt the devastation of raging floodwaters and we now face an enormous reconstruction task. You can help make a difference by donating any amount, no matter how small to help Queenslanders get back on their feet. Please give generously." (emphasis added)

Round 1 Funding

1. The Distribution Committee's report stated that there were three rounds of funding. The first round was referred to as "emergency assistance". It was described as providing a "non‑means tested Emergency Assistance payment [that] provided eligible applicants with $2000 per adult and $1000 per dependent child (under 18 years)". A person was eligible for assistance under round 1 if they were experiencing hardship from the impact of flooding or Cyclone Yasi without financial assistance, and their principal place of residence was flooded internally above the level of the floor in the living areas of the home, making the home uninhabitable, or the damaged residence sustained cyclone damage to the living areas of the home making the home inhabitable. [11] The report noted the necessity for verification as to the level of inundation or cyclone damage at the home. [12]
2. Applicants for assistance under round 1 were required to complete a form providing their personal details, and answer questions directed to the eligibility criteria. [13] At the conclusion of the form they were required to declare the truth and accuracy of their statement. They were also required to acknowledge that any overpayment would have to be returned and that the information they provided would be provided to a government agency for the purpose of assessing the application which could include "an assessment of whether [their] property was inundated by flood waters and deemed uninhabitable".
3. Ms Visser received a $2,000 payment under round 1 in February 2011. [14] Ms Lynch received a $2,000 payment under round 1 in March 2011. [15] Between them, Mr and Mrs Keller received $6,000 in round 1 payments. [16]

Round 2 Funding

1. According to the Distribution Committee's report, funding assistance for round 2 was announced on 8 March 2011. It was described as concentrating "initial structural damage assistance on those who had been hardest hit by the floods and Cyclone Yasi, namely those people who had lost everything". [17] Although the available funding and eligibility criteria changed over the course of the programme, the final requirements for eligibility were that the applicant's principal place of residence was totally destroyed or had to be demolished as the result of the Queensland floods or Cyclone Yasi, that the applicant was the owner occupier of that residence and that the combined household income was less than $150,000 gross per annum. [18] The report noted that eligibility for the assistance was assessed by determining an applicant's income, as well as requiring evidence of property ownership and principal place of residence. The level of damage to owner-occupied places of residence was verified either from an independent assessment or by the applicant's insurer. [19] As to the amount of assistance that was made available, the Distribution Committee's report stated: [20] "This structural damage assistance from the Appeal was available to both insured and uninsured applicants. … Any insurance payments, ex‑gratia payments and any assistance provided through the Structural Assistance Grant available under the National Disaster Relief and Recovery Arrangements (NDRRA) were taken into account when deciding the actual level of assistance available to eligible applicants from the Appeal. Those who were eligible for Destroyed Home assistance received an initial payment of $10,000 towards their rehousing or recovery needs, regardless of their insurance status, as well as contents contribution of $30,000. They were then eligible for a further payment up to $240,000 depending on the individual circumstances. Applications received under this round for homes deemed not to be destroyed but damaged were automatically transferred for assessment to the third round of funding…."
2. This extract describes three layers of payment, being an "initial" payment or first layer of $10,000; a "further payment" or second layer; and a "contents contribution" of $30,000 or third layer.
3. The application form for round 2 funding advised applicants that if they were eligible they would "receive an additional payment of $10,000 towards [their] rehousing and recovery needs" and that "[a]dditional assistance of up to $90,000 may be provided depending on [their] income and other circumstances" but that "[a]ny insurance payment, or ex‑gratia payment received, for example from [their] bank or insurance company or grants under the Community Recovery Structural Assistance Grant, will be deducted from the amount [they] are assessed to be eligible for". [21] The discrepancy between the reference to "$90,000" and the reference to $240,000 in the above extract from the Distribution Committee's report appears to reflect the fact that the amount of assistance provided under round 2 increased over time.

Round 3 Funding

1. According the Distribution Committee's report, round 3 funding was made available for persons who had suffered structural damage to their home. The eligibility criteria was that the person's principal place of residence suffered structural damage as a result of the floods, or Cyclone Yasi, and that their household income was less than $150,000 gross per annum.
2. Again the funding was said to be made available to "both insured and insured applicants, with varying payment levels depending on the applicant's circumstances". [25] The Distribution Committee's report stated that "[t]hose who were eligible for Damaged Home assistance received an initial payment of $5000 towards their rehousing or recovery needs, regardless of their insurance status…" (ie, a first layer). [26] Thereafter, a damaged home payment was available, (ie, a second layer). It was available (ie, a second layer). It "was originally calculated at 50 cents in the dollar based on repair quotes provided", but that "was increased to meet the full cost of the quoted repairs up to the maximum payment of $80,000" including the first layer payment of $5,000. Initially, applicants were required to include two quotes seeking funding, however from May 2011 applicants could avoid this requirement by providing one quote from a designated panel of licensed builders. [27] In June 2011, it was announced that there would be an additional payment to eligible householders to assist them in replacing damaged household contents" of up to $20,000 (ie, a third layer). According the Distribution Committee's report, this meant that there was "a maximum payment of up to $100,000 … available under the [Round 3 funding] ... depending on a household's circumstances". [28]
3. Consistent with this, the form for round 3 funding advised recipients that if they were eligible they would receive an "initial payment of $5,000" and "[a]dditional assistance of up to $75,000 may be provided depending on [their] income and other circumstances". [29] The form requested details of the applicant's insurance, income and the provision of two quotes. Applicants were required to complete a statutory declaration and provide a notice that was not materially different to those provided for stage 2 funding. [30] In particular, the statutory declaration only recorded the applicant's commitment to use the funding "to meet my/our rehousing and recovery needs". [31]

Deduction of Funding Under the PDRF?

1. In Rodriguez (No 22), I addressed the principles governing whether or not payments made by a third party to an injured party should be deducted from their tortious damages. [53] It suffices to restate the following: [54] "The 'settled principle governing the assessment of compensatory damages' is that 'the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed' [Haines v Bendall (1991) 172 CLR 60 at 63; [1991] HCA 15, per Mason CJ, Dawson, Toohey and Gaudron JJ]. However, there are circumstances in which payments and benefits received by the innocent party after the tortious act and which would not have been received but for the tortious act will not be brought to account in assessing their damages. One example is insurance payments, these being 'the result of a contract [the innocent party] made before the loss occurred and by the express or implied terms of that contract they were to be provided notwithstanding any rights of action [they] might have' (National Insurance Company of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 599; [1961] HCA 15, per Windeyer J ("Espange")). Another category of such payment was described by Windeyer J in Espagne as 'cover[ing] a variety of public charitable aid and some forms of relief given by the State as well as the produce of private benevolence' [Espagne at 600]. His Honour stated that the 'decisive consideration is, not whether the benefit was received in consequence of, or a result of the injury, but what was its character' which is to be determined 'by the intent of the person conferring the benefit' with the test being 'by purpose rather than by cause'. His Honour added that the determination of the purpose of the payment 'must depend on the terms of the particular contract, pension scheme, charitable benefaction or statute governing the benefit conferred'. As for the relevant purpose that is being inquired into, Dixon CJ in Espagne noted that payments that are not brought to account have the 'distinguishing characteristic [that] they are conferred on [the innocent party] not only independently of the existence in him of a right of redress against others but so that they may be enjoyed by him although he may enforce that right', they being 'product of a disposition in his favour intended for his enjoyment and not provided in relief of any liability in others fully to compensate him [at 573].'" (footnotes omitted)

Wollington

1. Finally, it is necessary to refer to decision of the Full Court of the Supreme Court of Victoria in Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91 ("Wollington"). Wollington was considered in Rodriguez (No 22) [64] . Wollington addressed whether a scheme of ex gratia payments made by the State government to bushfire victims should be deducted from damages payable to the plaintiff by a tortfeasor responsible for the fire. The funds were the subject of an Appropriation Act but otherwise there was no legislative support for the scheme (at 94 and 98). The scheme was effectively a program of ex gratia payments distributed by a committee consisting of a Minister and various public servants. There was no statutory support for the committee's work (at 94).
2. In its submissions concerning the PDRF [65] , the State sought to contrast this case with seven criteria identified by the Full Court in Wollington which supported that Court's conclusion that the payments were not deductible, namely (i) the payment was only made after a consideration of the injured party's own resources to rehabilitate himself; (ii) the injured party had no entitlement to the benefit; (iii) there was no suggestion that the payment was made in part compensation for a tortious act and there was no connection between the wrongdoer and the payment; (iv) the object of the ex gratia scheme was to relieve personal hardship; (v) the payment was not related to the value of any goods lost but calculated by reference to standard replacement costs of certain items; (vi) the injured party was free to use the payment as they chose; and (vii) there was no stipulation that the injured party had to refund the costs if damages were later recovered (at 100 to 101). Mr Sexton SC disputed that these criteria were a complete statement of the relevant indicia or that ascertaining whether the requisite intention has been established is a simply a matter of "tick[ing] off or cross[ing] off" these criteria. [66]
3. In relation to criteria (iii), the State submitted that the payments were referable to a connection between the wrongdoer and the payment because the PDRF was administered by the State and it was "established for the very reason of the disaster". [67] I disagree. The PDRF was a charitable trust and the source of the funds was the public. The agencies of the State were simply the means of channelling the funds to the affected persons. Payments were made via the State qua people in need. They were not made qua tortfeasor and injured party. Otherwise, the PDRF addressed flooding across Queensland and the effects of Cyclone Yasi.

Natural Disaster Relief and Recovery Payments

1. Another set of payments for flood victims was made available through the NDRRA agreed between the State and Commonwealth governments. Broadly there were two types of support packages made available pursuant to the NDRRA, being financial support for individuals and families, and financial support for primary producers, small business, charities and not‑for‑profit organisations. [73] The former was administered by the Queensland Department of Communities, Disability Services and Seniors ("DOC") [74] and the latter by the Queensland Rural Adjustment Authority (the "QRAA"). [75] This part of the judgment is concerned with the former. The scheme provided for in Part 29 and addressed in Rodriguez (No 22) is an example of the latter.
2. The Queensland Reconstruction Authority ("QRA") was established under the Queensland Reconstruction Authority Act 2011 (Qld) (the "QRA Act"). According to its Chief Executive Officer, the QRA oversaw the "reimbursement of funding to these delivery agencies for the making of … grants and loans" under the NDRRA. [76] At the relevant time, s 10(1)(e) of the QRA Act conferred on the QRA the function of "coordinat[ing] and distribut[ing] financial assistance for affected communities". However, the QRA Act did not establish a scheme of entitlements to grants or loans like the regulations to the Rural and Regional Adjustment Act 1994 (Qld) did. [77]
3. At all relevant times, NDRRA grants and loans were administered under executive authority. In its submissions concerning the NDRRA, the State appeared to suggest that regulation 96 of the "Regulation" created some entitlement to payments in accordance with the guidelines applicable to NDRRA grants. [78] This appears to be a reference to regulation 96 found within Part 8 of the (former) Rural and Regional Adjustment Regulation 2000 (Qld). [79] Regulation 96 concerned the functions of the QRAA in administering grants to primary producers under a scheme similar to that provided for in Part 29 as addressed in Rodriguez (No 22). [80] It has nothing to with the QRA or the making of grants under the NDRRA. Otherwise, a decision to refuse a grant might be reviewable under the Judicial Review Act 1991 because it appears to involve the deployment of funds appropriated by the Queensland Parliament (as well as the Commonwealth Parliament). Nevertheless, the power to grant relief under s 30 of the Judicial Review Act 1991 is conditioned by the grounds of review provided for in ss 20 to 22 (Minister for Immigration and Multicultural Affairs v Thiyagarajah (2000) 199 CLR 343; [2000] HCA 9 at [33]; "Thiyagarajah"). It suffices to state that it would only be an extremely rare case where s 30 would authorise the grant of merits relief requiring the payment of a grant, especially where the criteria is only specified in guidelines with no statutory backing (see Minister for Immigration and Ethnic Affairs v Conygham (1986) 11 FCR 528 at 537, cited in Thiyagarajah at [32]). Given the limits on that power, it cannot be said that the Judicial Review Act 1991 establishes an "entitlement" to a grant. Instead, it only confers an entitlement to review of a decision, not to make grant or a failure to make a decision about a grant.

Emergency Assistance Payment

1. The Emergency Assistance Payment ("EAP") was described in the Distribution Committee's report as a "one-off grant" that assisted with "immediate needs such as food, clothing, accommodation and medical supplies in the immediate aftermath of a natural disaster". [87]
2. The maximum EAG grant was $170 per person or $850 per family. [88] The grant was not means tested, but was instead available to "all people affected by disaster who without assistance would suffer personal hardship and distress". [89] Its payment was not tied to the incurring of any specific loss, cost or expense nor was there any requirement for a recipient to apply it in any particular way. Given the purpose of the payment and its terms and conditions, it is clear that it was not intended to operate in the interests of any tortfeasor, but instead intended to be received by flood victims "in addition to whatever rights [they] may have to recover" elsewhere (Espagna supra).

The Essential Household Contents Grant

1. The Essential Household Contents Grant ("EHCG") was described by the Distribution Committee as providing "assistance towards the repair or replacement of damaged/destroyed uninsured essential household contents". [90] The maximum EHCG payment was $1705 for an individual and $5120 for families with sub-limits for the individual items lost. [91]
2. The EHCG payment was means tested and only available to persons who did not have contents insurance. [92] Applications for the grant utilised a form to assess the "total allowable items lost in the disaster based on the household composition". [93] The grant covered beds, mattresses, sheets, blankets, wardrobes, clothing, household linen, fridges, non-fixture stoves, cooking utensils, food, tables, chairs, washing machines and floor coverings. [94] The relevant form made provision for payments in respect of freezers, clothes dryers, air conditioners, water pumps and generators. [95]
3. The plaintiff's submissions correctly characterised the process of assessment as follows: [96] "… there were two methods used for assessing eligibility for the EHCG. Where disaster impact maps or local government validation was available for the area in which the applicant's residence was located, assessors would use that mapping to ensure that the residence was within the 'determined disaster impact zone': [97] Where disaster impact maps or local government validation was not available for the relevant area, an outreach visit was made to the residence. The outreach visit assessor would 'determine if disaster impact occurred in [the] living areas and that essential contents were lost or damaged': [98] Assessors were not required to estimate the value of the loss or damage."
4. Applicants for a grant were required to acknowledge that it was a one-off payment. However, they were not required to utilise the funds to pay for the lost or damaged items or repay the funds if compensation was recovered. [99]
5. The flooding of the storage facility containing Ms Harrison's personal items is described in Rodriguez (No 22). [100] In her affidavit affirmed 9 October 2020, Ms Harrison describes in detail the items that were lost and how her insurance claim was rejected. [101] As a consequence, in March 2011, Ms Harrison rang the Premier's office about her predicament. She later authorised the storage company to provide information about her circumstances to the Premier's office. [102] In late March 2011, Ms Harrison collected a cheque for $1,275 from the offices of Ipswich Council. [103] She signed an acknowledgement form for the payment which referred to it as an EHCG grant. [104] It was not suggested that Ms Harrison ever provided receipts or the like for her lost items.

The Structural Assistance Grant

1. The Distribution Committee described the Structural Assistance Grant ("SAG") as "assistance to return owner occupied dwellings to a habitable and secure condition". [111] The DOC's material described the grant as "a contribution to assist eligible homeowners return their home to a safe and habitable condition". [112] The maximum grant available was $10,500 for an individual applicant and $14,200 for families. [113] The grant was means tested and only available to those who were uninsured (or underinsured). [114]
2. DOC's procedures referred to the relevant form being completed by a recovery worker and thereafter an officer of the Department of Housing and Public Work visiting the home and "conduct[ing] a specialised assessment of damage and provid[ing] a scope of works of eligible items for repair". [115] The form contemplated the obtaining of that assessment or the provision of quotes or receipts. [116] The maximum amount of the grant was reduced by any amount received for the EAG or EHCG. [117] A grant recipient was required to complete a statutory declaration stating, inter alia: [118] "… • I agree to use the Structural Assistance Grant and/or Essential Services Safety and Reconnection Scheme Grant funds for the purposes for which they are intended, that is to repair my residence that was damaged as a result of [name of natural disaster], as listed in the scope of works below [being the scope of works advised by the Department of Housing and Public works] … • I understand that the funds provided to me are a contribution only and may not meet the total cost of repairs and I will source the remaining funds. • I understand that on receipt of funds under the Structural Assistance Grant and/or the Essential Services Safety and Reconnection Scheme Grant I am required to engage contractors to undertake necessary repairs and all domestic building work valued at over $3,300 will be covered by a contract that complies with the Domestic Building Contracts Act 2000. • I am required to advise the Department of Communities of completion of works and understand that the work may be inspected by a Department of Public Works, QBuild officer or a representative of the Department of Communities. I will keep all receipts and paperwork related to the completion of the work and agree to provide copies of these documents on request as evidence of the expenditure for the work. • The works are to be completed within 12 months of receipt of funds and that if this has not been achieved, I must obtain written agreement for an extension of time from the Department of Communities or I may be required to repay grant funds."

Essential Services and Safety Reconnection Scheme

1. As its name implies, the Essential Services and Safety Reconnection Scheme provided funds to "assist homeowners reconnect essential services, such as electricity, water, gas or sewerage/septic systems, damaged by a disaster". [125] It had two components, Part A being a contribution of up to $200 for a safety inspection and Part B, being a contribution of up to $4,200 to undertake repair work that are identified as required before an essential service can be reconnected. [126] The forms are similar to those used for the SAG. It requires the provision of a quote or receipts before a payment for a grant for repairs can be authorised. [127] Like the SAG there is requirement to provide a statutory declaration requiring the application of the funds to pay for the reconnection of the service. [128] In some circumstances the payment is made direct to the repairer. [129]
2. As noted, this grant is a "Category B measure" and is specifically designated to "alleviate the financial burden of costs incurred" by, inter alia, "individuals". [130] Overall, the position with this grant is no different to the SAG.

Ms Lynch's Claim

1. The circumstances of the flooding of Ms Lynch's property in Fernvale are described in Rodriguez (No 22). [131] I found that, had flood operations been conducted in accordance with SIM C, then neither Ms Lynch's home nor her shed or cottage would have been inundated by any flood waters. [132] Instead, her home was "inundated up to the gutters". [133] Photographs taken around this time show the devastation of the property. [134] Hence, no issue of "greater flooding" arose in relation to Ms Lynch's claims.
2. For the hearing on quantum, each of Ms Lynch and her son affirmed detailed affidavits outlining the back breaking process of cleaning and reconstructing her home and its surrounds. [135] Ultimately, Ms Lynch's loss and damage claim comprised: (i) property damage ($257,091); (ii) contents damage ($214,960); (iii) clean-up costs; (iv) landscaping costs ($15,298); (v) loss of rental income and temporary accommodation costs ($17,000); and (vi) a claim for physical inconvenience ($40,000). The defendants did not dispute items (i), (ii) and (iv) of this claim. [136] There were disputes about the other three heads of damage as well as four other issues as follows.

Cleaning Costs

1. In Rodriguez (No 22), I addressed an issue that arose in relation to whether the plaintiff, Rodriguez & Sons Pty Ltd, was entitled to recover the commercial cost of certain voluntary services that were provided to clean up its commercial premises in the aftermath of the flooding. [137] The plaintiff's claim for that amount was calculated by reference to the commercial cost of cleaning the premises (ie, a "top down approach"), as opposed to commercially valuing the cost of the actual cleaning up work that was performed (ie, a "bottom up approach"). After Rodriguez (No 22) was published, agreement was reached on that figure for the plaintiff (only). [138]
2. Prior to the hearing that resulted in this judgment, the plaintiff and Seqwater exchanged experts' reports concerning the commercial cost of cleaning each of Ms Lynch's property at Fernvale, Ms Visser's property at North Booval and Mr and Mrs Keller's properties. [139] Both experts prepared their estimates using a top down approach. [140] For Ms Lynch's property, the plaintiff's expert, Ms Rudd, provided an estimate of $187,426. Seqwater's expert, Mr Threlfall provided an estimate of $141,796.01. [141] Seqwater's submissions served prior to the hearing contended, inter alia, that "[f]or reasons which will be explained after cross‑examination, the Court would accept that Mrs Lynch's claim for cleaning and restoration costs has been overstated" and that "[s]ome aspects of the overstatement are identified by Mr Threlfall". [142] The submissions did not, however, expressly contend that the Ms Rudd's (or Mr Threlfall's) methodology was wrong. SunWater's submissions simply noted that Seqwater relied on Mr Threlfall's affidavits and that cleaning costs would be addressed after cross‑examination. [143]
3. In cross‑examination and submissions on this issue, Senior Counsel for Seqwater contend that Ms Rudd's approach (and that of Mr Threlfall) was misconceived as a bottom up approach should have been adopted. [144] Senior Counsel for SunWater adopted those submissions. [145] The State did not take any point about cleaning costs. [146] Mr Sexton SC submitted that his client was taken by surprise by this approach. This lead to a debate as to whether it was consistent with Rodriguez (No 22), especially to the extent it followed the decision in Powercor Australia Ltd v Thomas (2012) 43 VR 220; [2012] VSCA 87.

Loss of Rental Income

1. Ms Lynch's claim for loss of rental income had two components. First, she claimed for a loss of rental for the cottage that was flooded on her property in Fernvale. [152] A tenant moved out immediately after it was flooded and did not return. [153] Ms Lynch's claim for $8850 loss of rental for this cottage was not disputed and is allowed.
2. Second, Ms Lynch claimed loss of rental for another property she owned that her family moved to after the flooding in Pryde Street (the "Pryde Street" property). In her first affidavit, Ms Lynch stated that the family moved there on the night of Wednesday, 12 January 2011. She said that it had "no furniture and the power had been disconnected as it had been unoccupied". [154] She said that it was difficult to have the power reconnected as it was in a flood zone. [155] They returned to their home at Fernvale in April 2011. In her second affidavit, Ms Lynch explained that they continued to use the Pryde Street property as a temporary location to store items until August 2011. [156] Ms Lynch added that the "usual rent" for that property was $250 per week. [157] She claimed a total of $8,250. Seqwater submitted that only half that amount should be allowed [158] and SunWater submitted that there should not be any allowance for lost rental of the Pryde Street property.
3. Leaving aside Ms Lynch's reference to the usual rent for the Pryde Street property, there was no evidence as to its rental history. Given that it was vacant with the power disconnected at the time of the flooding it seems very unlikely that it could have produced any rental income in the immediate aftermath of the flooding, even if it was not inhabited by Ms Lynch and her family. The difficulties with power connection are likely to have persisted even at a level of flooding associated with SIM C. That said, it seems likely that there would have been significant demand for residential premises on such a flooding scenario as other people would have still been rendered homeless.
4. This head must be assessed on a loss of a chance basis (Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4). I will allow $3500 for loss of rental for the Pryde Street property.

Insurance Recoveries and Broker Settlement

1. At the time of the flooding, Ms Lynch had home and contents insurance with QBE Insurance ("QBE"). In April 2011, she was advised that her claim for cover from QBE was denied. She pursued a dispute with the Financial Ombudsman Service which was resolved on the basis that QBE would meet 50% of her claim. [159] Ms Lynch also pursued a claim against her insurance broker which was settled in March 2013 through conciliation. [160] The settlement was confidential to the parties. In its submissions, Seqwater contended that it was settled for $58,750. [161]
2. Two issues arose in relation to Ms Lynch's insurance. First, Seqwater submitted that any judgment in favour of Ms Lynch should be subject to a direction that she pay a portion of her judgment to QBE or that the defendants do so directly. [162] Second, both Seqwater and SunWater submitted that the proceeds of settlement with the broker should be deducted from Ms Lynch's damages or at least interest should not run on a portion that corresponds with that sum. [163] SunWater submitted to that do otherwise would infringe the rule against double recovery (citing Baxter v Obacelo Pty Ltd (2001) 205 CLR 634; [2001] HCA 66 at [39] and [48]).
3. The relevant principle governing the treatment of insurance recoveries in relation to the payment of damages in tort was stated by Windeyer J in Espagne at 599: "In assessing damages for personal injuries, benefits that a plaintiff has received or is to receive from any source other than the defendant are not to be regarded as mitigating his loss, if: (a) they were received or are to be received by him as a result of a contract he had made before the loss occurred and by the express or implied terms of that contract they were to be provided notwithstanding any rights of action he might have; or (b) they were given or promised to him by way of bounty, to the intent that he should enjoy them in addition to and not in diminution of any claim for damages. The first description covers accident insurances and also many forms of pensions and similar benefits provided by employers: in those cases it is immaterial that, by subrogation or otherwise, the contract may require a refund of moneys paid, or an adjustment of future benefits, to be made after the recovery of damages." (emphasis added)
4. This statement is dispositive of both the points noted at [93]. In relation to the first contention, the only possible basis upon which a condition of the kind Seqwater asserts could be attached to a judgment is to respect whatever rights of subrogation an insurer may have in respect of the judgment sum. Leaving aside any question as to why this Court would intervene at the behest of a defendant to protect the rights of an insurer, once it is appreciated that the principle that damages are not reduced to take account of insurance recoveries is not related to principles of subrogation, then any justification for taking this step disappears. For all the Court is aware, Ms Lynch and her insurer may have reached their own arrangements as to how her judgment sum is to be deal with. Espagne confirms that her arrangements with her insurer are irrelevant to a determination of her rights vis a vis the defendants in these proceedings.

Physical Inconvenience

1. The recovery of damages for the "inconvenience" occasioned by the negligent flooding of a person's home is an instance of the principle that a "plaintiff is entitled to recover for personal damage which is the reasonably foreseeable result of the defendant's negligent damage of that property" (Campbelltown City Council v Mackay (1989) 15 NSWLR 501 at 511 per McHugh JA; "Mackay" citing Brickhill v Cooke [1984] 3 NSWLR 396 at 401 per Glass JA; Clarke v Shire of Gisbourne [1984] VR 971 at 997 to 999 per Gobbo J; Muirhead v Kingborough Council (No 2) [2000] TASSC 127 at [14] per Cox CJ). Mackay concerned a case where the plaintiffs suffered vexation, distress and anxiety from the collapse of their home due to the defendants' negligence (at 511B). Perhaps out of a concern about the operation of the CLA (Qld), this was not the basis upon which this head of damage was sought in this case (see Thomas v Powercor Australia Ltd [2011] VSC 586 at [116] and [129]; "Thomas v Powercor"; Herridge & Ors v Electricity Networks Corporation t/as Western Power (No 4) [2019] WASC 94 at [602] to [608]; "Herridge (No 4)"] Instead, it was confined to the physical inconvenience to the group member occasioned by the flooding of their property. [166] This basis is consistent with the decided cases (Thomas v Powercor at [130]; Herridge (No 4) at [609]) although if it includes inconvenience occasioned by participating in the clean‑up then there is double compensation if a separate claim is also made for so much of that work that was undertaken by a plaintiff (Herridge (No 4) at [608]). In this case, the claim under this head did not include the work done by group members in cleaning their own property that being subsumed under the top down approach to estimating the cost of cleaning property.
2. A first instance award of $6000 made in 1989 for vexation for living in a termite infested house for just over two years was not interfered with on appeal in Rentokil Pty Ltd v Channon (1990) 19 NSWLR 417 at 432G to 433A. An award of $20,000 for physical inconvenience and mental distress following an insured's eviction from his home after his insurer wrongly refused to make payments under a disability policy was made in Johnson v Australia Casualty Co Ltd (1992) 7 ANZ Insurance Cases 61-109 at 77,521.
3. Both Seqwater and SunWater accepted that this head of damages was (theoretically) available. [167] Seqwater pointed to the statement by Forrest J in Thomas v Powercor at [132] that such a claim needs a "strong evidentiary foundation that the tortious act led to a genuine inconvenience of some significance (be that in terms of impact or duration)". [168] A claim for physical inconvenience was rejected in Thomas v Powercor on the basis that the evidence of inconvenience in that case "insufficient" (at [135]). The evidence was that the plaintiff undertook some firefighting at his own home and clean‑up and repairs in the days and weeks afterwards. His home was damaged but it was saved from the fire and he was not rendered homeless (at [133] to [134]). A claim based on physical inconvenience was also rejected in Thorpe v Lochel (2005) 31 WAR 500 ("Thorpe") where the inconvenience was said to be travelling by air from Germany to Australia and living in rental accommodation because the defendant's solicitor's negligent conduct of litigation required the plaintiff's to sell their home (at [153] to [154]). This can be contrasted with Bailey v Bullock [1950] All ER 1167 where evidence was given of the cramped conditions a family was required to live under (at 1171; Thorpe at [154]).

Premier's Disaster Relief Fund

1. As noted, Ms Lynch received $2000 in round 1 funding from the PDRF and $100,000 in round 3 funding. [178] For the reasons noted above, these amounts are not to be deducted from her damages.

Interest

1. Two issues arose in relation to interest, only one of which can be resolved.
2. The first concerns interest on damages for physical inconvenience. SunWater pointed out that interest on general damages for personal injury had been abolished by s 60(1) of the Civil Liability Act 2003 (Qld) ("CLA (Qld)"). [179] Section 60(1) is found within Chapter 3 of the CLA (Qld). SunWater noted that an award of interest was discretionary and contended that it would lead to a lack of coherence if the discretion was exercised to award damages for physical inconvenience arising out of property damage where it cannot be awarded for general damages arising out of personal injury. [180]
3. Appeals to coherence are no substitute for statutory interpretation. In Moore v Scenic Tours (2020) 377 CLR 209; [2020] HCA 17, the plurality (emphatically) rejected the contention that a contractual claim for damages for disappointment and distress is unaffected by the CLA (Qld). Their Honours noted that "[n]othing in the text of the CLA [NSW] suggests that Part 2 was enacted with a view to limiting the liability of a defendant for claims that do not involve personal injury as defined in the CLA" (at [47]). Part 2 of the CLA (NSW) is the equivalent of Chapter 3 of the CLA (Qld). Moore v Scenic Tours leaves no room for SunWater's coherence argument whether as a matter of construction or the exercise of a discretion. Like Part 2 of the CLA (NSW), Chapter 3 of the CLA (Qld) does not operate beyond the topic it addresses, namely personal injury damages. Thus, interest is allowable on this head of damages.
4. The interest rate adopted at common law for general damages was 4% (MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3 "Gogic"). It was common in applying Gogic to apply a rate of 2% to that portion of general damages which was referable to the period prior to judgment as it was generally assumed that those damages accrued at an even rate from the time of the accident. However, in this case, almost all the damage for physical inconvenience accrued no later than 1 January 2012. It follows that the rate of 4% should be applied from that time.
5. The second issue in relation to interest concerns damages for the voluntary cost of cleaning. In Rodriguez (No 23), I determined that, to the extent that group members can recover for damage to their real and personal property in amounts calculated by reference to the commercial cost of the volunteer labour of others that repaired that damage, then they will not receive an award of interest on that amount for the period prior to the date of judgment. [181] I left open a claim for interest by a group member whose own labour repaired damaged property. [182] Nevertheless, the plaintiff did not make any such claim in respect of the time spent by Ms Lynch in cleaning up her own property (nor Ms Visser or Mr and Mrs Keller), but that was on the basis that the top down approach to quantification would be adopted. [183] Mr Sexton SC foreshadowed that may change if the Court was to uphold Seqwater and SunWater's bottom up approach to quantifying cleaning costs. [184]

Future Disposition

1. To produce a final figure for the amount of damages payable by the defendants to Ms Lynch it will be necessary to resolve the dispute about cleaning costs. The parties should confer about the calculation of damages for the other components, including interest, and produce a table referable to each day on and from 11 December 2020 that allows for the competing contentions about cleaning costs and interests thereon to be added to the relevant totals.

Ms Visser

1. The circumstances of the flooding of Ms Visser's property at North Booval are outlined in Rodriguez (No 22). [185] I found that, had flood operations been conducted in accordance with SIM C, then Ms Visser's home would not have been inundated by any flood waters. [186] No issue of "greater flooding" arises with her claim.
2. Like Ms Lynch, Ms Visser affirmed a further affidavit which outlined the process of cleaning and repairing her home. [187] This was undertaken with few resources as her insurer denied cover, although they made some contribution to the replacement of her floorboards after she pursued a complaint through the Financial Ombudsman. [188] Her and her partner undertook many of the repairs themselves as they could not afford to engage tradespeople. At the end of her affidavit she explains how, despite all the work that was undertaken, the house has not been returned to its former standard. For example, the replacement front door is not aligned and is too difficult to open. [189]
3. Ms Visser's loss and damage comprises claims for: (i) property damage and building repairs ($79,357); (ii) contents damage ($33,812); (iii) clean‑up costs ($87,100.50); and (iv) physical inconvenience ($35,000). Seqwater and SunWater did not take issue with the first and second heads of damage. [190] Nevertheless, four issues arose with her claim.

Cleaning and Restoration Costs

1. The observations made above in relation to Ms Lynch and cleaning costs apply equally to Ms Visser's claim. The differences between Ms Rudd's estimate ($87,100.50) and Mr Threlfall's estimate ($84,239.21) was so minor that Mr Sexton SC was content to accept Mr Threlfall's estimate.

Physical Inconvenience

1. In her first affidavit, Ms Visser described her home as "unliveable". [191] During the period of the initial clean‑up she and her partner lived with friends in a nearby suburb of Ipswich. They stored their belongings in a crowded "coaster bus" that was lent to her by the school she worked for. [192] After a period, they were able to store their belongings in Ms Visser's parents' garage. Before the flood, they lived next door to her property in North Booval. Ms Visser said that after six weeks their friends moved out of the house they were staying in. This left Ms Visser and her partner at the house with furniture until that house was sold in April 2011. [193] After that, Ms Visser states: [194] "[My partner] and I then moved into my parents' shed. It was coming into winter and it became freezing cold. My parents had no electricity at the time, as their electricity had not been turned back on after the Floods. My property had the electricity turned back on after the representative from AAMI had visited …. So [my partner] and I ran an extension power cord from our Home to my parents' house so we would have power."
2. Ms Visser and her partner returned to her home in November 2011; [195] ie, they lived in her parents shed for six months. I viewed the exterior of this building during the view that was conducted in February 2018 in the presence of the legal representatives of the parties. I am entitled to draw any reasonable inference from what I saw during that inspection (Evidence Act 1995, s 54). As I only viewed the exterior of the building the inferences I draw is that it was indeed a "shed" and not a place usually suited for medium term residence.
3. The plaintiff submitted that an amount of $35,000 was appropriate for this head of damage. Seqwater submitted that there was not a sufficiently strong evidentiary basis for the claim or that otherwise a nominal amount should be allowed. [196] SunWater submitted that a sum of $5000 was appropriate. [197]
4. I consider that the inconvenience occasioned to Ms Visser from the flooding of her home was considerable. The defendants take a plaintiff as they find them. In Ms Visser's case, she had little financial means to rectify the inconvenience occasioned to her. Her dislocation in the period immediately after the flood was in part alleviated by the generosity of her friends. However, a period of six months residing in her parents' shed while continuing the clean‑up and working full time as a teacher was no doubt a very serious interruption to her life. I consider that a figure of $25,000 is the appropriate figure for this head of damage.

Premier's Disaster Relief Fund

1. As noted at [17] and [27], Ms Visser also received $2000 in round 1 funding from the PDRF and $100,000 in round 3 funding. For the reasons noted above these amounts are not to be deducted from her damages.

Interest

1. The observations made above in relation to interest and Ms Lynch also apply to Ms Visser.

Future Disposition

1. The observations made above in relation to Ms Lynch at [112] also apply to Ms Visser.

Relief

1. Consistent with what was stated in Rodriguez (No 23), it is necessary to pose and answer separate questions concerning the treatment of payments made out of the PDRF and under the NDRRA arrangements to group members.
2. Accordingly, the Court orders that: (1) The following questions are to be determined separately and in advance of all remaining issues in the proceedings: "Question 39: Should money received by Sample Group Members and Group Members from the Premier's Disaster Relief [Fund] be taken into account in the assessment of any damages, and if so, in what way? Question 40: Should money received by Group Members from funding available to individuals and families under the Natural Disaster Relief and Recovery Arrangements (NDRRA) be taken into account in the assessment of any damages, and if so, in what way?" (2) The questions posed by order 1 be answered as follows: Question 39: Should money received by Sample Group Members and Group Members from the Premier's Disaster Relief [Fund] be taken into account in the assessment of any damages, and if so, in what way? Answer: No. Question 40: Should money received by Group Members from funding available to individuals and families under the Natural Disaster Relief and Recovery Arrangements (NDRRA) be taken into account in the assessment of any damages, and if so, in what way? Answer: (i) In respect of any group member who received the Emergency Assistance Payment under the NDRRA, no. (ii) In respect of the Essential Household Contents Grant payable to Ms Lynette Harrison, no. (iii) In respect of any other group member who received the Essential Household Contents Grant under the NDRRA, no. (iv) In respect of any group member who received structural assistance grants pursuant to the NDRRA in respect of repairs to their home then to the extent that they can otherwise recover in these proceedings the costs and expenses of those repairs then any amount of damages referable to those costs and expenses should account for the grant and any such accounting is to occur before any apportionment of the amount of damages to be paid by each defendant to that group member. (v) In respect of any group member who received an Essential Services and Safety Reconnection Scheme grant pursuant to the NDRRA in respect of the cost and expenses of reconnection of essential services to their home, then to the extent that they can otherwise recover in these proceedings the costs and expenses of that reconnection, any amount of damages referable to those costs and expenses should account for the grant and any such accounting is to occur before any apportionment of the amount of damages to be paid by each defendant to that group member. (3) Stand over the balance of the third defendant's notice of motion filed 10 September 2020 to 11 December 2020. (4) Direct the parties to confer in relation to the matters identified in [112] and [123] of this judgment.

Endnotes

1. See Rodriguez (No 22), Chapter 13 at [323].
2. Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 24) [2020] NSWSC 1498; Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 25) [2020] NSWSC 1544.
3. CRT.040.006.0001.
4. Chapter 14 at [43].
5. MSC.040.014.0001 at .004.
6. LAY.QLD.002.0035.
7. LAY.QLD.002.0001 at .0012.
8. LAY.QLD.002.0001 at .0011.
9. id
10. LAY.QLD.002.0001 at .0020.
11. LAY.QLD.002.0001 at .0025.
12. LAY.QLD.002.0001 at .0025.
13. LAY.QLD.002.0001 at .0042 to .0043.
14. LAY.ROD.016.0001 at [50(a)].
15. LAY.ROD.014.0001 at [85].
16. LAY.ROD.012.0001 at [73(b)].
17. LAY.QLD.002.0001 at .0027.
18. LAY.QLD.002.0001 at .0028.
19. Supra at .0028.
20. id.
21. LAY.QLD.002.0001 at .0044.
22. LAY.QLD.002.0001 at .0048.
23. SBM.030.024.0001 at .0018 (SunWater); SBM.040.010.0001 at [18(e)] (State).
24. LAY.QLD.002.0001 at .0051.
25. LAY.QLD.002.0001 at .0028.
26. LAY.QLD.002.0001 at .0030.
27. LAY.QLD.002.0001 at .0029 to .0030.
28. LAY.QLD.002.0001 at .0029.
29. LAY.QLD.002.0001 at .0053.
30. LAY.QLD.002.0001 at .0060 to .0061.
31. LAY.QLD.002.0003 at .0060.
32. SGM.701.004.0003 at .0059.
33. SGM.701.004.0003 at .0038.
34. SGM.701.004.0003 at .0032.
35. SGM.701.004.003.
36. LAY.ROD.016.0001 at [50(b) and (c)]; SGM.701.004.0003 at .0005 and .0006.
37. LAY.ROD.016.0070.
38. LAY.ROD.016.0001 at [50(e)]; LAY.ROD.016.0071.
39. LAY.ROD.014.0001 at [85].
40. SGM.701.003.0001 at .0067.
41. SGM.701.003.0001 at .0022.
42. SGM.701.003.0001 at .0019 and .0037.
43. SGM.701.003.0001 at .0005 and .0009.
44. SGM.701.003.0001 at .0005 and .0019.

Amendments 16 December 2020 - Counsel's name corrected. 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: 16 December 2020