IAN FRANCIS SMITH TRADING AS JEBARJUP PASTORAL COMPANY

ANNE ROSALIE ARMSTRONG TRADING AS M T & A R ARMSTRONG

THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF CONSERVATION AND LAND MANAGEMENT

Limitation of action - Public authority - Failure to give notice within one year - Whether reasonable excuse - Material prejudice - Whether failure to give reasonable notice affected defendant's ability to investigate quantum of damage - Evidence - Without prejudice communications - Duty not to disclose

Limitation Act 1935 (WA), s 47A

Howe v City of Nedlands & Ors, unreported; SCt of WA; Library No 980128; 23 March 1998

Marshall v Western Australian Government Railways Commission (1994) 11 SR (WA) 149

Mitchell v Board of Management of Royal Perth Hospital (1995) 14 SR (WA) 345

Parramatta City Council v Lutz (1988) 12 NSWLR 293

Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330

Repanic v Lakes Hospital Board Authority (1994) 10 SR (WA) 270

Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424

The Minister for Community Welfare v Bennett, unreported; SCt of WA; Library No 5060; 2 September 1983

Victorian Railways Commissioner v Casaccio [1961] VicRp 24; (1961) VR 157

1 The Smith family and the Armstrong family both have farms in the Cranbrook Shire adjacent to each other and adjoining the Stirling Range National Park. Salt River Road separates their respective farms from the Stirling Range National Park.

2 For many years the Stirling Range National Park has been under the control and management of the Department of Conservation and Land Management ("CALM").

3 On 2 January 1997, lightning struck the peak of Barnett Peak, causing a small fire within the National Park to ignite.

5 That night, CALM rangers and firefighting crews were present on Salt River Road.

6 The next day the forecast maximum temperature was over 40 degrees with gusting northwesterly winds.

7 The fire was located in rough, dangerous terrain and light was failing. CALM officers decided not to send in crews overnight, but to use a direct attack with bulldozers the next morning.

8 By ill fortune, the first bulldozer did not arrive until about 7 am on 3 January 1997 because the low-loader bringing it had broken down. In the afternoon of 3 January, notwithstanding the efforts of firefighters, the fire broke through a buffer zone between a firebreak inside the park and Salt River Road.

9 The fire went on to both the Smith and Armstrong farms, destroying crops of wheat and other cereals, ostriches and ostrich eggs, and trees.

10 The combined damage is said to be in excess of half a million dollars.

11 On 5 May 1998, some 16 months after the fire, the plaintiffs' solicitors sent a letter of demand to CALM seeking reimbursement of the damages suffered. No action has yet been commenced.

Limitation Act 1935 (WA)

12 The Limitation Act 1935 (WA), s 47A relevantly reads as follows:

"(1) ... no action shall be brought against any person (excluding the Crown) for any act done in pursuance or execution or intended execution of any Act, or of any public duty or authority, or in respect of any neglect or default in the execution of the Act, duty or authority unless -

(a) the prospective plaintiff gives to the prospective defendant, as soon as practicable after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and his name and address and that of his solicitor or agent, if any; and

(b) the action is commenced before the expiration of one year from the date on which the cause of action accrued.

(3) (a) Notwithstanding the foregoing provisions of this section application may be made to the Court which would but for the provisions of this section have jurisdiction to hear the action, for leave to bring an action at any time before the expiration of six years from the date on which the cause of action accrued, whether or not notice as required by subsection (1) of this section has been given to the prospective defendant.

(b) Where the Court considers that the failure to give the required notice or the delay in bringing the action as the case may be, was occasioned by mistake or by any other reasonable cause or that the prospective defendant is not materially prejudiced in his defence or otherwise by the failure or delay, the Court may if it thinks just to do so, grant leave to bring the action, subject to such conditions as it thinks it is just to impose. ...."

13 It is not disputed by either party that this section applies to the plaintiffs and to the Executive Director of Conservation and Land Management, the defendant in these proceedings.

14 The plaintiffs have brought an originating summons seeking an order that:

"1. The plaintiffs have leave pursuant to s 47A(3) of the Limitation Act 1935 to bring an action for negligence against the Defendant to recover damages caused by the escape of a bushfire from the boundaries of the Stirling Range National Park on 2 January 1998 (sic), which park was under the management of the Department of Conservation and Land Management at that time."

15 The application is opposed by the Executive Director.

16 Because the action was not commenced before 3 January 1998, leave is required.

17 A history of the Limitation Act s 47A can be found in The State Energy Commission of Western Australia v Alcoa of Australia Ltd (1996) 17 WAR 131 per Rowland J at 148 - 150.

18 The conditions under the Limitation Act s 47A(3) are disjunctive.

19 The plaintiffs do not contend that there was any mistake, but argue that the delay was occasioned by reasonable cause.

20 The purpose of s 47A is to provide some protection for the public purse by allowing public authorities with diverse functions proper notice of a potential claim so that it may be fully investigated and appropriate decisions reached in respect of it.

21 The provision for notice "as soon as practicable" is not to be lightly set aside. Otherwise, even though construed strictly, the provisions of the Limitation Act s 47A would have but nominal application. Though some might find it anomalous a public authority should have greater protection than private citizens, nevertheless, that is what Parliament has so ordered.

22 The solicitor for the plaintiff deposes that his firm first received instructions from the Armstrongs' insurers in late January 1997, that is very shortly after the fire.

23 He deposes that if evidence of witnesses was disputed, and the matter determined in court, "... it was vital that we obtain as much evidence as possible to verify the claim in order to properly advise Commercial Union of its merits." He further deposes that during the period when the solicitors reviewed the information initially provided by the insurer, and the time of the letter of demand, the insurer undertook extensive investigations in relation to the background of the fire and took a number of witness statements, the Armstrongs and the Smiths collected evidence to support the claim and further investigations in relation to allegations of negligence of CALM's officers and employees in the manner and way in which they managed and coordinated the efforts to fight the bushfire were conducted.

24 The length of the period reflects the considerable complexity of the claim.

25 It appears that both the Armstrongs and the Smiths were insured for a certain proportion of the loss they allegedly have suffered. Therefore, no doubt, agreement between all parties was necessary as to who would fund the proposed litigation and in what proportion. Clearly, some investigation had to be done in order to see whether or not a claim could be mounted.

26 This investigation may provide a reasonable excuse as to why an action was not commenced within one year of the claim.

27 However, nothing in the solicitor's affidavit in any way provides a reasonable cause for the delay in giving the required notice.

28 On the contrary, most of the reasons advanced, including the need for extensive investigations of the claim, are reasons why prompt notification of the claim to CALM was required. If the purpose of notification is to allow a public authority the opportunity to investigate the incident, then that purpose is defeated if, as here, the plaintiffs do nothing by way of notification until they have completed the majority of their enquiries.

29 The plaintiffs argue that CALM was aware, or ought to have been aware from an article which appeared in the Albany Advertiser on 9 January 1997 that claims for compensation may be forthcoming.

30 An article in a newspaper hardly constitutes the written notice required under the Limitation Act s 47A.

31 Nor, in any event, does the article clearly indicate that a claim is likely to be made.

32 The plaintiffs have not established that the delay in giving notice was occasioned by reasonable cause.

33 Because the provisions of s 47A(3) are to be read disjunctively, that finding does not conclude the matter. The plaintiffs may establish that the defendant is not materially prejudiced in its defence.

34 CALM does not assert that it is materially prejudiced in the defence of the action as to liability. I consider that a proper position to adopt. It is clear from the affidavit of Mr Sneeuwjagt, Manager of CALM Fire, that notwithstanding the delay in notification, the defendant has been able to fully investigate the circumstances of the fire and that relevant records are still available.

35 However, the defendant points to a prejudice in determining the issue of damages.

36 CALM supports its argument as to prejudice for determining damages by an affidavit of Mr Ireland, who is the Principal Risk Management Officer at CALM. His affidavit was sworn nearly one year ago.

37 His affidavit annexes a copy of correspondence from a farm consultant, Mr David Rees.

"Prompt inspection would have provided opportunity to confirm -

* Grain counts from burnt grain remaining on the ground. Though burnt, the grain would have been evident and this would have allowed confirmation of grains per square meter (sic), and therefore loss of grain income. It would even have been possible to sample some of these grains to assess hectolitre weight, which is another component of potential grain income.

* Soil condition. Damage from the fire could have been much more substantial if dry conditions were experienced after the fire, combined with strong winds. This would have allowed wind to remove much of the ash, and possibly to scour out sandy areas ... It is arguable just how much damage from loss of nutrients would have been. For instance loss of ash could only be guessed. Soil tests may have helped quantify losses, but soil tests are only a guide at the best of times. ...

* Inspection would also have given some indication of the effect of the fire on weeds. Even if the fire totally destroyed weeds, there would have been at least some adjoining areas, which were not burnt, where the effect of the fire on weeds could have been assessed (the fire may have made future weed control easier by destroying weed seeds or it may have complicated the problem by reducing herbicide options).

* Importantly inspection of the site would have given some indication of general management. The claim for a loss of yield of 2.5 tonne per hectare seems high based on district averages, but is certainly possible for good management. ..."

39 Mr Rees then opines about management and concludes:

"Level of management is always difficult to assess, but inspection of the site at time in question would greatly help this assessment."

"... Mr Rees is one of the experts engaged by the Defendants in this matter. As detailed by Mr Rees, had we received a claim, and had the Defendant been in a position to appoint experts shortly after the fire, the various investigations referred to by Mr Rees in his report, could have been attended to. This is no longer possible as the claim was not received until some 16 months after the fire, the subject of the action, by which time the Plaintiffs had carried out all of the rectification works, the cost of which they have claimed. Further, a full season had passed which necessarily entailed tillage of the ground in question, application of fertilisers and seed, and a full crop cycle. It is not now possible to determine with any precision, the condition that the Plaintiff's (sic) properties would have been in immediately after the fire with the level of precision referred to by Mr Rees."

41 A material prejudice is one which might reasonably affect the ability of a defendant to properly defend the claim against it. Any defendant is potentially prejudiced by delay in a claim against it. Sometimes the prejudice will be considerable, occasioning a defendant expense over and above the normal cost of litigation. Extra costs and expense do not necessarily give rise to material prejudice. Material prejudice will arise when, due to delay, there is a probability that the proposed defendant will be unable to advance matters of fact, which might reasonably be supposed to affect the outcome of the litigation.

42 The defendant has an evidentiary onus to discharge as to material prejudice but if it does so, the ultimate onus rests upon the prospective plaintiff: Baker v Albany Shire Council (1994) 14 WAR 46 per Kennedy J at 56. That ultimate onus is to establish on the balance of probabilities that the defendant has not been materially prejudiced by the delay in notification of the claim.

43 Mr Armstrong deposes the damage that was suffered as a result of the fire included:

* Lost crops, including hundreds of tonnes of ASW wheat, noodle wheat and malting barley and many tons of lupins and oats.

* Reduced yields for subsequent seasons because he could not rotate crops in the burnt out areas that year.

* Increased herbicide costs because of the need to let weeds grow in the resown crops for longer than normal in order to mitigate erosion.

* Ostriches and ostrich eggs destroyed in the fire and the lost progeny of those ostriches.

44 Mr Smith deposes that the fire and damage includes:

* Lost crops, being hundreds of tonnes of wheat lost in the fire.

* Reduced yields for subsequent seasons in the burned areas.

* the value of trees damaged or destroyed in the fire.

45 The plaintiffs have filed no affidavit in response to the report by Mr Rees, despite having the opportunity of nearly a year in which to consider it.

46 It is submitted on behalf of the plaintiffs that the material supplied by Mr Rees, on analysis, does not give rise to material prejudice. It is submitted that all it means is that some avenues have been lost to the defendant. For example, there are other ways of determining the potential yield per hectare and therefore of calculating the loss.

47 Further, it is submitted that Mr Rees' report seems to suggest that access for the purpose of assessing damage would be necessary immediately after the fire. Under the Limitation Act 1935, notice has to be given as soon as practicable. Even if a notice were given as soon as reasonably practicable, an estimate of the date would place it outside the parameters of prompt inspection suggested by Mr Rees.

48 The difficulty for the plaintiffs is that they have put forward no evidence to counter the assertion by the defendant that it would suffer material prejudice in this aspect. Mr Rees puts forward a number of matters which, from his opinion as a farm consultant, raise difficulties in the assessment of the claim.

49 While counsel attack portions of his opinion, and suggests that there are other ways of evaluating the matter, no evidence was adduced to counter Mr Rees' opinion. Time has moved on and the land has been recropped.

50 I note that solicitors for the plaintiff were consulted in late January 1997. There is simply no evidence as to whether, had notice been given then or shortly after, the tests to which Mr Rees has alluded, may have been too late in any event. It is only speculation to suggest that had notice been given as soon as reasonably practicable, the prompt inspection suggested by Mr Rees would have been too late in any event.

51 I consider that the material supplied by way of a report from Mr Rees does indicate that the defendant would be prejudiced in its defence of the claim as to aspects of the claim for damages.

52 The defendant, having raised an evidential onus of material prejudice, I find that the plaintiff has not affirmatively established a lack of material prejudice to the defendant.

53 The plaintiffs have established that the defendant was not materially prejudiced as to some aspects of the defence and therefore the question is whether the court thinks it is just to grant leave on conditions.

54 The plaintiffs propose a claim based, broadly speaking, on two aspects of negligence. As to the first, the plaintiffs point to the failure of CALM to burn the buffer strip between the Stirling Range National Park and Salt River Road. In fact, burning the buffer was on CALM's schedule for Autumn 1997, but the fire preceded it.

55 It is asserted that in failing to maintain the buffer strip and reduce the fuel upon it, a fire was more likely to escape onto the adjoining properties.

56 The plaintiffs also point to negligence in the conduct of the firefighting operations by CALM and to delays in arranging for heavy equipment to be brought onto the site.

57 As to the first point, the defendant points to the affidavit of Mr Sneeuwjagt and particularly the draft report of Mr Cheney.

"3 The buffer zone had been burnt within the period that Messrs Phillips Fox alleges that should have been 10 years, whether this would have prevented the hopover of the January 1997 fire into (a) the Smith's property or (b) the Armstrong property?"

"If the buffer zone had been burnt within 10 years then it may have reduced the number of hopovers into the private property to the north ... However under the prevailing conditions and with the extent of fire approaching the buffer burn there would certainly be some areas where the fire would have burnt through vegetation more than three to four years old and an extremely high probability that fire brands generated by the fire south of the buffer zone would have carried across the buffer and Salt River Road into the property.

When inspected on 18 March 1988 there were areas of the buffer zone, which had been invaded by pasture grasses. Even if the buffer burning had been one year old there would be sections of the buffer still capable of burning with sufficient intensity to lift fire brands from within the buffer area across Salt River Road.

Thus the buffer burning within 10 years may have assisted the firefighters but is most unlikely that it would have prevented the fire from crossing Salt River Road at several locations along its entire length."

59 Mr Armstrong described the actual fire after the wind's change as "a fire storm". As he said:

"... the fire burnt northwards until it reached a dense area to the south-west of my property, which had not been burnt in over 30 years and developed into a firestorm.

As the buffer strip had not been control burned for many years the firestorm raced straight through it. It jumped Salt River Road and my own fire breaks and burnt out at least 60% of my entire farm.

Because of the intensity of the fire storm I believe there was absolutely nothing I could personally have done to prevent the fire spreading into my property from SRNP in causing the destruction."

60 In summary, the defendant points to the lack of expertise of the plaintiffs' witnesses, especially Mr Norbury, a fire assessor for Commercial Union and the plaintiffs themselves, to express opinions as to the likely effect of the buffer zone and in turn it relies on its own expert opinion that the buffer zone could not have prevented a fire storm of the intensity of this bushfire.

61 It is not the court's function at this stage to try the action, especially on affidavits. Both Mr Smith and Mr Armstrong have many years' experience with bush fires, as do some other deponents. Whether Mr Norbury's opinions ultimately assist a court is a matter that cannot be predicted. It is enough to say that the plaintiff has established a fairly arguable case of negligence as to the first particular.

62 The plaintiffs also point to delays and errors, which they assert, were made by CALM in initially containing the fire to prevent it becoming a conflagration.

63 The defendants point to evidence to the contrary, suggesting that it was good practice not to attempt to fight the fire by dark in rugged terrain.

64 In an emergency situation such as fighting a bushfire, no doubt there will often be decisions made which, with the benefit of hindsight, turn out to be the wrong decisions. Such decisions do not necessarily translate into a finding of negligence. There are many factors at work within a fire, including as in this case, a change of wind direction. It should be noted that the conditions were, in any event, dangerous with high temperatures, dry ground and gusting winds.

65 The claim for negligence appears principally to settle on the delay in response by CALM. It does not appear that a decision not to back burn was negligent. While there are certainly strong arguments to the contrary of the plaintiffs' case, the plaintiffs' case is not vexatious and nor is it without arguable prospects of success.

66 It is just to grant leave to the plaintiffs to bring an action for damages arising from the fire which burnt their properties on 3 January 1997.

67 Even though the plaintiffs have failed to discharge the onus of establishing that the defendant has suffered no material prejudice by the delay, I am reluctant to finally dispose of this matter without the benefit of a statement of claim where the loss is fully particularised.

68 It may be that the matters raised by Mr Rees do not in the end amount to material prejudice having regard to the way in which the plaintiffs' claim is formulated and the damages sought to be proved.

69 I will therefore grant leave to the plaintiffs to bring an action for damages, on condition that the parties have liberty to apply in these proceedings to determine which parts, if any, of the statement of claim should be struck out on the basis of material prejudice to the defendant. In such an application the plaintiffs will have the burden of justifying the pleadings on this point.

70 The plaintiffs supported their application by means of an affidavit from their solicitor.

71 In the course of the affidavit, the solicitor annexed a letter from the defendant's solicitors, which was marked "Without Prejudice". This letter had been sent in response to a letter from the plaintiff's solicitors also marked "without prejudice".

72 I have not read either letter. There is a tendency for some solicitors to annexe "without prejudice" communications to affidavits, apparently without pausing to consider that the contents of such communications are normally privileged. It may be that an argument could be mounted in a particular case, that the letter is not properly a "without prejudice" communication and therefore fails to attract privilege. However, in my view it is completely wrong to annexe such correspondence. The duty of a party wishing to rely upon such communications is to apply on summons to seek leave to adduce evidence on the basis that on a proper construction the letter is not a privileged communication.

73 The words "without prejudice" when used in a letter prima facie invoke a claim for privilege which cannot be waived by the receiving party.

74 In this case, upon objection being taken, counsel for the plaintiff, who was not the deponent to the affidavit, did not seek to read into evidence or rely upon the contents of either letter beyond noting that the claim was notified to the defendant in the letter of 5 May 1998.