SUTHERLAND SHIRE COUNCIL v BECKER

Conveyancing Act 1919 (NSW) ss.88A, 88B, 177 Conveyancing Amendment (Law of Support) Act 2000 District Court Act 1973 (NSW) s.83A LEGISLATION CITED: Local Government Act 1919 (NSW) Parts XI, XII, XIIA; ss.317A, 327(1)(d), 331(2), 332, 333, 335, 382, 524 Metropolitan Water Sewerage And Drainage Act 1924 (NSW) Public Works Act 1912 (NSW) Suitors' Fund Act 1951 s.6 Supreme Court Rules 1970 (NSW) Pt.51 r.21

Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124, 1 DDCR 486 Anns v Merton London Borough [1978] AC 728 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 Avenhouse v Council of the Shire of Hornsby (1998) 44 NSWLR 1 Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 79 ALJR 1511 Bogunda v Upton & Shearer Ltd (1972) NZLR 741 Brodie v Singleton Shire Council (2001) 206 CLR 512 Bryan v Maloney (1995) 182 CLR 609 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 Coote v Forestry Tasmania (2006) 80 ALJR 1089 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Dalton v Henry Angus & Co (1881) 6 App Cas 740 Dennis v Charnwood Borough Council [1983] QB 409 Donoghue v Stevenson [1932] AC 562 Egger v Gosford Shire Council (1989) 67 LGRA 304 Fennel v Robson Excavations Pty Ltd (1977) 2 NSWLR 486 Ghantous v Hawkesbury City Council (2000) 206 CLR 512 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 Hicks v Lake Macquarie City Council (1992) 77 LGRA 261 Hill v Van Erp (1997) 188 CLR 159 Humphries v Cousins (1877) 2 CPD 239 Inglewood Shire Council v Voli (1963) 9 LGRA 340 Investors In Industry Commercial Properties Ltd v South Bedfordshire District Council & Ors [1986] QB 1034 Kebewar Pty Ltd v Harkins (1987) 9 NSWLR 738 LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1988) 4 BPR 9640 McPherson's Ltd v Eaton (2005) 65 NSWLR 187 CASES CITED: Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31 Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282 Overseas Tankship (UK) Ltd v Miller Steamship Co. Pty Ltd (The Wagon Mound (No.2)) (1967) 1 AC 617 Pantalone v Alaouie (1989) 18 NSWLR 119 Walker v City of Adelaide [2005] SASC 206 Parramatta City Council v Lutz (1988) 12 NSWLR 293 Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd & Ors [1985] AC 210 Port Stephens Shire Council v Booth & Ors [2005] NSWCA 323 Public Trustee v Hermann (1968) 88 WN (Pt 1) 442 Pyrenees Shire Council v Day (1998) 192 CLR 330 Revesz v Commonwealth of Australia (1951) 51 SR (NSW) 63 Richardson v West Lindsey District Council [1990] 1 WLR 522 Rylands v Fletcher (1868) LR3HL 330 Sedleigh-Denfield v O'Callaghan & Ors [1940] AC 880 Sheppard v Glossop Corporation [1921] 3 KB 132 Smith v Eurobodalla Shire Council & Anor [2005] NSWCA 89 Stoneman v Lyons (1975) 133 CLR 550 Stovin v Wise [1996] AC 923 Sullivan v Moody & Ors (2001) 207 CLR 562 Sutherland Shire Council v Heyman (1985) 157 CLR 424 Swain v Waverley Municipal Council [2005] 79 ALJR 565 Torette House Pty Ltd v Berkman (1940) 62 CLR 637 Travis & Anor v Vanderloos & Ors (1984) 54 LGRA 268 Turnbull v Alm [2004] NSWCA 173 Ultramares Corporation v Touche (1931) 174 NE 441 Voli v Inglewood Shire Council (1963) 110 CLR 74 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 Xuereb v Viola (1990) Aust Torts Rep 81-012

PARTIES: Appellant: Sutherland Shire Council Respondent: Suzanne Margaret Becker

COUNSEL: Appellant's counsel: D. Davies SC/S. Glascott Respondent's counsel: T.A. Alexis SC

SOLICITORS: Appellant's solicitor: Phillips Fox Respondent's solicitor: Wm Walker Taylor Edwards & Smith

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40370/05

MASON P GILES JA BRYSON JA

12 December 2006 SUTHERLAND SHIRE COUNCIL v SUZANNE MARGARET BECKER Judgment 1 MASON P: I agree with Bryson JA whose reasons I have had the privilege of reading. I also agree with the additional remarks of Giles JA on the topic of uninsurance. 2 GILES JA:: The detailed facts are set out in the judgment of Bryson JA, which I have had the advantage of reading in draft. I agree with the result to which his Honour has come, but in some respects take a different path to the disposal of the appeal and cross-appeal. In the light of his Honour's reasons, and drawing upon them, I can be brief in my explanation.

Nuisance 3 The cause of action in (private) nuisance provides a remedy for many different kinds of unreasonable interference with the use or enjoyment of land. Prior to the New South Wales legislation later mentioned they included removal of support, which is what happened in the present case. Water escaping from the stormwater pipe saturated the fill on land adjoining the respondent's land, causing slippage of the fill down the hillside. This removed the support for the fill on the respondent's land, which itself slipped down the hillside. 4 Removal of support had particular rules. At common law the right to support of land in its natural state was said to be an incident of the land itself (Dalton v Henry Angus & Co (1881) 6 App Cas 740 at 791). There was a remedy in the law of nuisance for removal of support: "The withdrawal of lateral support from land is an actionable nuisance for which strict liability attaches without proof of any negligence" (Fennel v Robson Excavations Pty Ltd (1977) 2 NSWLR 486 at 493 per Glass JA, citing Dalton v Henry Angus & Co). 5 But there was no right to support of a building on the land (Dalton v Henry Angus & Co; Public Trustee v Hermann (1968) 88 WN (Pt 1) 442; LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1988) 4 BPR 9640; Pantalone v Alaouie (1989) 18 NSWLR 119), or of fill changing the natural state of the land (Public Trustee v Hermann; Hicks v Lake Macquarie City Council (1992) 77 LGRA 261; Xuereb v Viola (1990) Aust Torts Rep 81-012). 6 The qualification to this where the land would have suffered its collapse even if there had not been the building or other additional load is not of present relevance. Under the particular rules, the respondent had no right as against the owner of the adjoining land to support for the fill placed on her land. If the adjoining owner had caused the loss of support for the fill on her land, she would not have had a cause of action in nuisance against the adjoining owner. 7 In Stoneman v Lyons (1975) 133 CLR 550 at 567 Stephen J observed that "the rule in Dalton v Angus", meaning that there was no right to support of a building on the land, "is clearly ill-adapted to conditions in modern cities". This view has been expressed in other cases and elsewhere, but in Kebewar Pty Ltd v Harkins (1987) 9 NSWLR 738 at 741 McHugh JA said that the rules had been referred to with tacit approval by the High Court on more than one occasion, and that if it was to be overturned that could only be done by the High Court. That has not yet been done, and it was not suggested in the present case that this Court should anticipate the High Court. 8 In Sullivan v Moody (2001) 207 CLR 562 at [50] the Court referred, in connection with determining the existence and nature or scope of a duty of care, to the "need to preserve the coherence of other legal principles, or of a statutory scheme which governs certain conduct or relationships". Their Honours cited Hill v Van Erp (1997) 188 CLR 159 at 231, where Gummow J referred to the law of torts as filling gaps in what should be one coherent system of law. The context of his Honour's remark was a role of the law of torts filling gaps left by the law of contract. The present context is very different, but there should be coherence in the reach of the cause of action in nuisance. 9 It would be anomalous, in my opinion, if the respondent had a cause of action in nuisance against the appellant on the basis that the appellant's conduct brought about the removal of support for the fill in the respondent's land. The indirect interference with the respondent's use or enjoyment of her land by removal of support should not place the appellant under any greater liability in nuisance for removal of support than the adjoining owner. There would not be a nuisance until the removal of support, see Torette House Pty Ltd v Berkman (1940) 62 CLR 637 at 657 as to nuisance only when water reached the plaintiff's land. The nuisance would lie in the removal of support and consequent slippage of the fill on the respondent's land. The respondent had no right to the support protected by a cause of action in nuisance, including in my view a cause of action against the appellant. 10 There was reform of the law of support in New South Wales by the Conveyancing Amendment (Law of Support) Act 2000. It created, through s 177 of the Conveyancing Act 1919, a duty of care not to do anything on or in relation to supporting land that removes the support provided by the supporting land to supported land (s 177(2)). This was accompanied by abolition of "[a]ny right at common law to bring an action in nuisance in respect of the removal of the support provided by supporting land to supported land" (s 177(8)). 11 The respondent did not rely on s 177 for a cause of action in negligence. In submissions in reply the appellant relied on it for abolition of a cause of action in nuisance. Although s 177 did not apply in relation to any proceedings commenced before its commencement (s 177(11)), the present proceedings were commenced after its commencement. An action in negligence commenced after the commencement of s 177 could be based on things done before its commencement (s 177(9)). From these indications of the section's application, it may be that s 177(8) was an answer to the respondent's action in nuisance, even as an action against the appellant. However, the matter was not fully argued, and I do no more than draw attention to it.

Negligence 12 It is not sufficient to ask if the appellant owed a duty of care to the respondent. At that level of generality, of course it did. The respondent no doubt walked on the appellant's roads and footpaths, and was owed a duty of care in relation to their condition (Ghantous v Hawkesbury City Council (2000) 206 CLR 512 and numerous other cases). As Brennan J said in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 487, a postulated duty of care "must be stated in reference to the kind of damage that a plaintiff has suffered and in reference to the plaintiff or a class of which the plaintiff is a member". 13 The present case was not, in my opinion, one of a duty of care to avoid economic loss to the respondent. The respondent did not buy defective land, like the defective building bought by the plaintiff in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 575 where the damage was held to be economic loss (see in particular at [20]). It is true that she would be likely to be injured in her pocket if, because support for the fill on her land was removed, the fill slipped down the hillside. She could incur the cost of reinstatement, or perhaps suffer diminution in the value of her land. But these would be the pecuniary consequences of what happened to her land, and the damage she suffered was physical injury to her land when support from the adjoining land was removed and the fill on her land slipped down the hillside. In my opinion, any duty of care was a duty to take reasonable care to avoid physical injury to the respondent's land. 14 A duty of care should not be "formulated retrospectively as an obligation purely to avoid the particular act or omission said to have incurred loss, or to avert the particular harm that in fact eventuated" (Graham Barclay Oysters Pty Ltd v Ryan (2003) 211 CLR 540 at [192] per Gummow and Hayne JJ; see also per McHugh J at [106]). There remain difficulties, discussed by Mason P in McPherson's Ltd v Eaton (2005) 65 NSWLR 187 at [3]-[25], in drawing the line between the existence of a duty of care and its content (or scope, or extent). As his Honour describes, sometimes matters additional to the kind of damage suffered and the class of which the plaintiff is a member are part of the definition of the duty. This is such a case. The duty question arises in the context of the exercise by the appellant of statutory powers or discretions. There can be put out of consideration a duty to take reasonable care to avoid physical injury to the respondent's land in, for example, the driving of the appellant's garbage trucks so that they do not knock down the front fence. Any duty is in the exercise by the appellant of its statutory powers or discretions concerning approval and construction of the pipeline and concerning maintenance of the pipeline, and physical damage to land exposed to damage if the statutory powers or discretion were negligently exercised. 15 In New Zealand in 1972 it was held that the owner of adjoining land whose conduct caused removal of support for a building could be liable in negligence: Bogunda v Upton & Shearer Ltd (1972) NZLR 741. That had not been established for New South Wales prior to s 177 of the Conveyancing Act. However, it has been held that a third party can be liable in negligence for the removal of support (Pantalone v Alaouie; Walker v City of Adelaide [2005] SASC 206). Since it was not relied on, I do not stay to consider s 177 of the Conveyancing Act; apart from that provision, the appellant was in the position of a third party and could owe a duty of care notwithstanding that the respondent's damage was from removal of support.

(a) Approval and construction of the pipeline 16 The appellant approved the subdivision of the land of which the respondent's land and the site of the stormwater pipe were part. The conditions of approval included that any fill be satisfactorily consolidated and that there be piping of necessary drainage easements and vesting of easement rights in the appellant. The plans for the pipeline were approved and the works as executed drawings were sighted and signed off, although the works were carried out by or on behalf of the developer. Upon registration of the deposited plan, an easement for the pipeline vested in the appellant. 17 It may be accepted that satisfactory consolidation of the fill would benefit the immediate and subsequent owners of the subdivided land. But that is of no direct significance because first, it did no more than tell the developer what proper practice required in any event; secondly, the fill on the respondent's land which slipped down the hillside was in part (but to an extent which could not be ascertained) placed on her land many years later in the course of building operations; and thirdly, unsatisfactory consolidation was not shown to have brought the slippage when it would not otherwise have occurred. The condition as to satisfactory consolidation does show awareness that there could be fill on the subdivided land. 18 The construction of a pipeline and vesting in the appellant of a drainage easement was for the benefit of the public generally, not for the benefit of the immediate and subsequent owners of the subdivided land. The subdivision included the creation of a road, Myuna Place, which was dedicated as a public road and became vested in the appellant. There had to be provision for removal of stormwater from the road. The pipeline performed that function, for the benefit of road users. Like the council's powers in Graham Barclay Oysters Pty Ltd v Ryan, the appellant's powers by which it imposed the pipeline and easement condition were in connection with the opening of the road (s 332 of the Local Government Act 1919) and not given for the protection of the developer or of subsequent owners of the subdivided land (cf per Gleeson CJ at [37]-[39], per McHugh J at [99]; per Kirby J at [250]; and per Callinan J at [325], translated to the council at [327]). 19 As Bryson JA says in his [82], case law and judicial opinion do not provide clear paths for decision on the circumstances in which a duty of care is imposed on a public authority exercising statutory powers. A number of recent cases in the High Court have considered a duty of care to exercise a statutory power or discretion: Pyrenees Shire Council v Day (1998) 192 CLR 330, Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 and Graham Barclay Oysters Pty Ltd v Ryan, all the subject of valuable analysis in Amaca Pty Ltd v The State of New South Wales (2004) 132 LGERA 309. If a public authority exercises a statutory power or discretion, additional considerations come into play if by its intervention risk of harm has been created or increased. 20 Where a novel duty-situation is in question, as these cases show the answer to the question depends on analysis of the particular circumstances. Although said in a case concerning a duty of care requiring exercise of a statutory power or discretion, the words of Gummow and Hayne JJ in Graham Barclay Oysters Pty Ltd v Ryan are also of application to exercise in fact - "146. The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence. …

149. An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board , reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care.

150. The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority. ..." (citations omitted) 21 Gaudron J agreed with Gummow and Hayne JJ. The same approach of consideration of "the salient features of the relationship" is found, although with differing language and emphasis, in the reasons of McHugh J at [84]. Gleeson CJ and Callinan J took rather different approaches, and Kirby J observed at [236] that "[a] cornucopia of verbal riches has been deployed to identify what, in given proceedings, these 'salient features' will be". Kirby J nonetheless accepted the need to consider "the multitude of special features of the relationship between the parties" (at [243]) and suggested de facto return to the test that a duty of care will be imposed when it is reasonable to do so (at [244]). 22 Once the features of the relationship have been identified, there must be an evaluation to come to a decision. The evaluation and decision will sometimes involve a step which cannot be further explained. 23 In the present case the features of the relationship can in my view be summarised as follows. · As I have indicated, the imposition of the pipeline and easement condition was not in the exercise of a power for the benefit of the respondent, or a class of which she was a member such as the owners of the subdivided land. · Consequently, also in satisfying or failing to satisfy itself that the pipeline was properly constructed the appellant was not exercising a power or discretion for the benefit of the respondent or a class of which she was a member. · The appellant could have foreseen in a general way that deficiency in the construction of the pipeline might affect its functioning, but that there would be significant physical injury to land in its natural state in the vicinity of the pipeline was but remotely foreseeable. If the pipeline fractured, for example, there could be escape of water, but that the land in its natural state would be caused to collapse is a very different matter. · Importantly, the class of persons upon whose land water escaping from the pipeline would pass did not include the respondent. The contours of the land in its natural state were such that the escaped water would pass over the land adjoining the respondent's land, but not her land. She was not a member of the class of persons physical injury to whose land was but remotely foreseeable ("the affected class"). · Thus the "risk of harm that eventuated" (Graham Barclay Oysters Pty Ltd v Ryan at [149] per Gummow and Hayne JJ) was because the adjoining land and the respondent's land had both had fill placed on them, and the support for the fill on the respondent's land was removed when the saturated fill on the adjoining land slipped down the hillside. Foresight of harm to the respondent, not a member of the affected class, required foresight of the two placements of fill and the progression from saturation of one lot of fill to the removal of support for the other. I do not think this was reasonably foreseeable. · Further, the appellant had less than full control over the state of the land in the vicinity of the pipeline. Its building approval powers and discretions gave it some control, but there could be excavation and filling outside its control or without its knowledge altering the risk of harm to the land of the affected class; even more so, altering the risk of harm to the respondent's land. · Other than in the now discredited sense of general reliance, it could not be said that the respondent, who was a subsequent purchaser, relied on the appellant having so exercised its powers and discretions that the pipeline was soundly constructed. 24 Evaluating these matters, in my opinion the appellant did not owe a relevant duty of care to the respondent.

(b) Maintenance of the pipeline 25 The appellant as beneficiary of the easement for the pipeline had the ability to inspect and maintain it. It suffices to say that, for the reasons above, I do not think the appellant owed to the respondent a duty to take reasonable care in the exercise of its powers and discretions in that respect; and that, for the reasons given by Bryson JA at [121]-[136] albeit in part as to negligence as an element in nuisance, breach of duty in that respect was not established. 26 I agree with the orders proposed by Bryson JA. 27 BRYSON JA: The appellant, defendant in the District Court, appeals by leave earlier granted from the decision of his Honour Judge Sorby of 9 March 2005 which gave judgment for the plaintiff, now the respondent, on liability; and consequential orders. The respondent cross appeals by leave. The respondent's claim in the District Court arose out of a slippage which occurred in fill material on the southern side of her house property at Lilli Pilli on the evening of 17 August 1998. She claimed a mandatory order that the appellant repair and stabilise the defective drainage system (which is described later) and also damages, interest pursuant to s.83A of the District Court Act 1973 (NSW) and costs. By agreement the Trial Judge deferred quantification of damages and other relief until liability was determined: so the decision was interlocutory. 28 The respondent cross appeals by leave and contends (Ground 1) that the Trial Judge should have found that the appellant was in breach of its duty of care in failing to inspect the stormwater pipe line during its construction, (Ground 2) that the Trial Judge erred in finding that the appellant did not breach its duty of care by failing to institute a system of inspection repair and maintenance, (Ground 3) that the Trial Judge erred in failing to find that negligence in not inspecting, repairing and maintenance the pipeline caused water to flow from the pipeline and caused the landslide and damage to the respondent's property; and (Ground 4) that the Trial Judge was in error in failing to find liability in nuisance. As the order appealed against was "There will be a judgment for the plaintiff on liability" these matters could have been raised by notice of contention under Supreme Court Rules 1970 (NSW) Pt.51 r.21; the "decision of the court below" referred to in subr. 21(1) is, it seems to me, the order and not the reasons for the order. The issues on the appeal and the cross-appeal can be considered and disposed of together. 29 The respondent's land is Lot 7 Deposited Plan 255123, and her home there is No 12 Myuna Place Lilli Pilli. Christian Enterprises Limited owned the land for some years and developed the subdivision, and Messrs Brown and Little, surveyors, obtained subdivision approval from the appellant on behalf of the developer. The respondent bought the land from the developer in 1980 and built her house in 1982. 30 The application for and consideration of the subdivision extended over some years commencing in 1973 and ending with Council Clerk's Certificate of 30 June 1977, which showed satisfaction with fulfilment of the appellant's conditions for the subdivision, followed by registration of the Deposited Plan on 7 September 1977. The land subdivided had a frontage to Turriell Point Road and formed part of the block between Tamba Place on the east and Little Turriell Bay Road on the west. This was a consolidation of several earlier lots, and five buildings on those lots were demolished while the subdivision was being considered. The subdivision created Myuna Place, which was dedicated as a public road and passed into the ownership of the appellant upon registration of the Deposited Plan. The Plan also created eight residential lots including Lots 6, 7 and 8, the southern-most part of the subdivision and bounded on the south by Little Turriell Bay, part of the tidal water of Port Hacking. Lots 9 and 10, narrow strips of land on either side of Myuna Place, passed to the appellant as public reserve. 31 Lot 8 is the westernmost of the three lots with frontages to Little Turriell Bay. Lot 8 is subject to an easement for drainage 1.83m wide which runs the full length of its western boundary from Myuna Place to Little Turriell Bay. The easement was created on registration, and during the approval process the appellant had no rights or interest in the easement or the pipeline. The easement was not made appurtenant to the newly created road as dominant tenement. This is an easement in gross in favour of the appellant and burdens Lot 8 only. Creation of easements in gross in favour of public or local authorities is authorised by s.88A of the Conveyancing Act 1919 (NSW). Rights under easements in gross can only be conferred on public authorities, but they are conferred by the general law of real property, and they operate in a different way to statutory powers to enter private land and carry out works. The terms of the easement are set out in the s.88B Instrument Q281318 registered with the Deposited Plan. 32 The s.88B Instrument refers to the easement as (Blue 1/1) "Easement for Drainage 1.83 metres wide" and states that it burdens Lot 8 and benefits the appellant. The Instrument does not make the easement appurtenant to any dominant land. The terms set out in the s.88B Instrument are (Blue 1/3) "Easement to drain water as set out in Part III of Schedule IVA of the Conveyancing Act, 1919-1964, with the following additions -" (and there are additional covenants by the registered proprietor which enhance the appellant's rights). Part III of Sched.IVA (which relates to easements in gross) sets out at great length the entitlements under an easement to drain water, and those rights include, as well as the right to drain water through any existing line of pipes, the right to enter (Blue 1/5) "for the purpose of laying, inspecting, cleansing, repairing, maintaining or renewing such pipe line" and the right to open the soil as necessary, with a proviso for minimising disturbance and restoring the surface. 33 The actual function of the pipe as drainage work for the road, assisting its effective function as a road, is clear from plans in Exhibit E which show road and drainage works as constructed; the pipe is part of a system which collects water from a drainage line and pits which run the full length of Myuna Place as far as its intersection with Turriell Point Road. Later works installed five PVC inlet pipes which led water from other sources on Lot 8 into the pipeline; these are unlikely to have contributed much to the flow of water in the pipeline, and they were not part of the pipeline as designed and constructed. One of these PVC inlet pipes was referred to in Mr Shirley's report adopted in the Trial Judge's findings as being fractured by a piece of plywood. Other easements in the Deposited Plan include a right of carriageway and an easement for services, both of which burden Lot 7 in favour of Lot 6, and an easement to drain water which burdens Lots 7 and 8 in favour of Lot 5, and Lot 8 in favour of Lots 7 and 5. Those easements did not make significant contributions to the events. 34 Christian Enterprises Limited sold Lot 8 to Mr Le Claire at some time in or before 1979, and Mr Le Claire obtained building approval and a building permit from the appellant in 1979 and proceeded to build his house No 14 Myuna Place. This house was constructed by the time the respondent purchased Lot 7 in 1980. At some time soon afterwards Mr Plunkett, who occupied house No. 14 during the later relevant events, bought Lot 8. 35 The houses are constructed on the highest parts of Lots 7 and 8 on a plateau of Hawkesbury sandstone. The land falls away steeply to the south of the houses, in a manner illustrated by a drawing by Mr Shirley, a consulting engineer, entitled "Inferred Subsurface Conditions" (Blue 1/79). As inferred by Mr Shirley, the Hawkesbury sandstone slope was originally overlain at most places by shallow residual soil, with some sandstone floaters included within the soil. In work associated with the subdivision, and later with construction of the houses, large quantities of fill material were deposited in the sloping rear yards of Lots 7 and 8, stretching almost down to the Bay. The claim relates to slippage in this fill material. 36 The Trial Judge stated a number of facts which he said were not in dispute, including (Red 16-17): 6. While the residences on No 14 and 12 were set on sandstone, to the south of each a considerable quality of fill had been placed stretching almost down to the bay. According to the evidence the slope of that fill was in the order of 30 - 35 degrees and to a depth [of] 3.5 to 4 metres. The fill was composed mainly of clay and building material.

7. On the day of the landslides on No 14 and No 12, that is August, 17 1998 Lilli Pilli, a great deal of rain of various intensity had fallen in Sydney and around the area. It was a one in five year rainfall event. 37 The Trial Judge accepted and made findings on the basis of the evidence of Mr Peter Miller, the respondent's husband, who observed significant events on 17 and 18 August 1998. In findings set out at length (Red 17-20) the Trial Judge accepted Mr Miller's evidence, shortly to the following effect. At about 4:15 p.m. on 17 August Mr Miller saw that a substantial landslip had occurred in the backyard of Lot 8; he observed a large black hole in an area that was formerly covered by trees, grass and the clothes-line. He made observations first from the upstairs back veranda on Lot 7, then by walking down a pebblecrete pathway on Lot 8 adjacent to its boundary with Lot 7. He observed more closely and saw that a substantial proportion of the backyard of Lot 8 had slipped away towards the south and west, extending to an area very close to the rear of the house on Lot 8. Sections of the pebblecrete path on the southern side of the house on Lot 8 had also slipped away. The landslip had occurred up to the boundary of Lot 7, leaving a shear face in a straight line approximately on the boundary. The material which had slumped was yellow, and was saturated. He did not observe signs of movement in the rear yard of Lot 7. He observed a sheer drop running on the western boundary of Lot 7 into a huge gaping void. He walked down towards the Bay and took some photographs which he produced in evidence. He observed that sandy soil interspersed with rocks and rubble had washed down from the back yard of Lot 8. This observation ended about 5:30 p.m. 38 At about 8:30 p.m. Mr Miller checked the drains and attempted to clean the drain pits in Myuna Place, where there was ponding in the turning circle which formed the end of Myuna Place. The water continued to rise. He spoke to Mr Plunkett and walked southward with Mr Plunkett on the western side of Lot 8, generally over the area of the easement and pipeline. He felt the ground underneath his feet vibrating and rumbling, and saw water rushing over the grass surface on which he was standing, and over his boots. He saw two solid concrete pit lids which formed part of the pipeline system; they were vibrating and moving about and water and air were squirting out of these pit lids under great pressure. 39 At about 10 p.m., during a very heavy deluge of rain, Mr Miller heard noises which sounded like wood tearing or splitting; he observed a small gap in the lawn area in the rear yard of Lot 7, made a closer inspection and saw a small area of landslip from the southern side of the lawn. About 30 minutes later he heard water running at full speed through the water pipes of the house, went to the back yard and observed that a copper water pipe was broken and water was pouring into the area that had slumped; he then observed that there had been a landslip at the end of the backyard. He then turned the water off at the main. 40 The Trial Judge made these findings (Red 20-21): The immediate cause of the landslide on No 14 was described by the Plaintiff's expert, Mr Shirley, a consultant geotechnical engineer with over 40 years experience. He has investigated hundreds of landslides [T.84]. According to Mr Shirley, the landslide occurred in two stages. Stage 1 was confined to No 14 because the natural movement path was directly downhill on No 14 [EX I p.7.3]. After the slide on No 14 there was left a rear vertical face area near the No 12/14 boundary which was unstable and caused the slide on No 12 [EX I p.7.3; T.142; 146]. It was not physically possible for the landslide on No 12 to occur in the manner observed "unless the postulated stage one landslide on No 14 had already occurred". Mr Shirley described the landslide as a "combined slump/debris flow". In a "note" at p.7 of EX I, Mr Shirley said a prerequisite of a slump/debris flow landslide was a "considerable quantity of subsurface water that builds up within the lower part of the fill. This build up - from water under the house at No 14 from Myuna Place and roadway together with "leakage from major joint openings and holes in the pipeline" is demonstrated figuratively by Mr Shirley in Figure I of his Appendix to his first report [EX I]. Mr Shirley continued in his "note" that when sufficient water/water pressures build up in the soil/fill, the whole soil mass becomes unstable and suddenly moves. As a part of this sudden movement the lowermost soil materials flow downslope, whilst the upper part of the landslide mass moves downslope in a "blocky" slump-like form. 41 The Trial Judge also found (Red 21-22): "…

The second stage of the landslide would appear to have occurred at about 10.30 to 11 pm on 17 August, 1998 with this second stage encompassing much of the filling that had been previously emplaced on No 12 Myuna Place. This failure mechanism, and the extents of the stage one/stage two landslides are indicated on Drawings No BB030G4&G5 [in Appendix]."

In evidence Mr Shirley said, to get the supersaturated material at the lower part of the landslide, it would need to have water from under the ground and within the soil mass itself [T.111.52]. The supersaturated area of fill had built up a lot of water "which caused internal pressures which exploded into a mud flow because there was too much water held within the mud, which blew out into a flow" [T.131.27]. The localised surge of water pressures within the voids underneath the fill caused the bottom to blow like "a pressure cooker" and caused the flow at the base of the slide [T.153.16]. As a consequence of that flow, there was a failure in the drier, higher soil, resulting in the slumps in a step like fashion [T.1331.30], he said. 42 The Trial Judge found (Red 23): I therefore find on the balance of probabilities that the stage 1 slip at No 14 occurred on 17.8.98 at about 4 pm (when first seen by Mr Miller) or shortly before when, because of water saturation, the toe of the fill on No 14 failed causing the block of land at the top of the slope at No 14 to collapse in the south western direction as set out in the "Golder diagram". Further, on the balance of probabilities, I find that the second stage slip, to the rear of No 12, occurred on 17.8.98 sometime between 5.30 pm (when Mr Miller observed that the garden and lawn in his back yard where "intact") and about 10 pm when Mr Miller heard noises which sounded like wood tearing and he went outside and observed a "small area of landslip from the southern side of the lawn of No 12 [EX F para 14] and then half an hour later he observed a broken copper waterpipe that was pouring water into an area "that had slumped from the backyard of the property" [EX F para 15]. I also find the second slip was consequent upon the first and was directly caused by, (as set out by Mr Shirley) the unstable shear face near the No 12/14 boundary promoting the landslip on No 12 around 10pm on 17.8.98. Cause of the No 1 slide Both Mr Shirley and Mr Jeffery attribute the No 1 slide to unstable fill placed on No 14, which at its base or toe, became saturated with water. Mr Shirley said a pre-requisite for a slump/debris flow landslide to occur, as I have found, at No 14, there had to be a considerable quantity of subsurface water that built up within the lower parts of the fill so that when the build-up in water reached certain pressure levels, the whole land mass above the saturated soil became unstable and moved. The lower most soil materials flow downslope and the upper part of the landslide mass moves downslope in a "blocky" slump like form [EX I p7.2]. The amount of water required to cause the estimated 120m3 of material involved in stage 1 of the landslide on No 14 Myuna Place was at least 25,000 litres [EX J p9.1]. "Maybe up to 40,000 litres" [T.170.15]. Mr Shirley explained the basis of these calculations during cross-examination [T.170.14-55]. They were not challenged. This is a considerable volume of water and its source and track to the toe of the fill was probably the most contentious issue in this trial.

It was the Plaintiff's case that the large subsurface water flows that saturated the toe of the fill on No 14 were generated "substantially" from the SSC pipeline and therefore, according to Mr Shirley [EX I p19] "the SSC pipeline is the chief cause of the 1998 landslide event". In reaching this conclusion, Mr Shirley placed significant weight on the discovery of a piece of plywood that was found blocking the pipeline on 5.9.2000. It was discovered in Pit E of the pipeline and measured 730X250 mm [EX H]. Mr Shirley said its size and shape meant it could: · only have entered the system during a period of high flow [viz: heavy rainfall], · lodged against and fractured the first PVC inlet pipe, and · partly blocked the pipeline by skewing & lodging at any point in the pipeline. 43 The Trial Judge said that Mr Miller's evidence of vibrating pit covers (pits B & C) was "indicative of the pipeline being under pressure or blocked beyond Pit C". His Honour went on (Red 25-26): "f) As there was apparently no "lifting of the lids" at Pits D or E, the pipeline blockage was probably near Pit D." Mr Shirley concluded [EX I p19]: "In view of the above, it would appear that: (I). The piece of plywood entered the system during the period of heavy rainfall in August, 1998 from Myuna Place, impacted against the PVC inlet pipe immediately south of the Junction Pit and fractured the inlet part. (II). The plywood then moved down the pipeline and lodged [skewed] partly blocked the pipeline near Pit D. (III). As a consequence of the high flows and partial blockage, water ponded in Myuna Place and the stormwater pit lids vibrated/lifted under the resultant water pressure surcharge. (IV). The water pressures in the pipeline between Pits B & D caused very substantial amounts of water to flow out from the opened pipeline joints, badly formed "bandaged joints", holes and fracture in the pipeline between Pit B & Pit D [see green shaded arrows on Drawing No BB030G4]. (V). The blockage of the pipeline so reduced its capacity that additional substantial quantities of water ponded in Myuna Place and thus caused subsurface flows through the substrata [see blue shaded arrows on Drawing No BB030G4 & G5]. Note: In view of the comments in the Section headed "SSC Stormwater Drainage Pipeline", water could also have ponded in Myuna Place during the August 1998 heavy rainfall event due to insufficient capacity [caused by the flat grade] of the 375 mm pipeline across the front of No 14 Myuna Place from the street gully. (VI). The water pressures in the pipeline as a consequence of the pond water in Myuna Place caused substantial water flows from the pipe fracture between Pit 2 and the Junction Pit, and thus extra water flow through the substrata."

The role of the ponded water in Myuna Place that may have flowed under No 14 dwelling (as demonstrated in Appendix A referred to earlier) together with general seepage under the roadway was down played by Mr Shirley in cross-examination. While he made that concession, Mr Shirley did not retreat from his position that the "pipeline leaks caused very substantial amounts of water to flow out from the pipeline joints and fractures".

Giving evidence about the pipeline blockage Mr Shirley said the vibration of the pit covers as observed by Mr Miller whose evidence I accept, (Mr Plunkett not being called), was caused either by the stormwater pipe flowing full and under pressure (due to design fault/under capacity) or a partial blockage in the pipeline. He said, as the pipeline beyond Pit B had a greater flow capacity (due to the greater gradient) than the pipeline between Myuna Place and Pit B (a flatter gradient), the vibration of the pit lids was most probably related to a blockage of the pipeline beyond where the pit lids were vibrating [EX I p9.8].

It was Mr Shirley's opinion that the size of the piece of wood was such that it could only have entered the system and moved down it during a period of very high water flow. He said the rainfall events of August 1998 and March 2000 were probably less than 1 in 5 year events and therefore the ponding in Myuna Place in August 1998 was probably related to the pipeline blockage [EX J p5]. 44 The plan prepared by Mr Shirley's firm entitled "Probable Failure Mechanism" (Blue 1/80) appears to show about 24 joints in the pipeline of which five are bandaged joints and 19 are spigot and socket joints. 45 The Trial Judge went on to make findings which appear to show that the pipeline may well have been and probably was blocked in some way on 17 August 1998, whether by the piece of plywood found over two years later or in some other way, and also found (Red 27): Even if the pipeline was not blocked in August 1998, and it was simply overloaded because of the rainfall event, in 1998 an event which caused a pipeline flow larger than the design capacity, the pressure heads would still build up in the pipeline and force water out of any leaks, fractures or holes in the pipeline [EX J p6.5]. 46 The Trial Judge went on to refer at length to evidence dealing with the escape of water from the pipeline. The evidence related to and was illustrated by a closed-circuit television (CCTV) film of an internal examination of the pipeline carried out on behalf of the appellant in September 2000. As the Trial Judge said, it showed pipeline fractures, scouring (meaning erosion of the concrete), what appeared to be a large hole between the Junction Pit and Pit No 2 in Myuna Place and open joints and fractures in the pipe line beyond Pit B. Mr Shirley's evidence (which it is plain the Trial Judge accepted) was to the effect that water flowing through the pipeline would flow into the ground through these open joints, fractures and holes thus saturating the lower planes of the fill on Lot 8 and causing pressures underneath the fill. It was Mr Shirley's interpretation that, while water leaking from the pipeline could flow both to the east (onto Lot 8) or to the west (to land not part of DP255123), at least 40% would have flowed into what became the landslide area on Lot 8. Mr Shirley's interpretation of the events is illustrated by his drawing "Possible Failure Mechanism" at Blue 1/80 and by his evidence referred to by the Trial Judge, in which the most probable location for pipe blockage was in the vicinity of Pit D, the third pit, thus subjecting the open joints immediately downstream of Pit C to considerable hydrostatic pressures. In Mr Shirley's interpretation, under a 3 to 4 m water pressure head, water would be forced out of an open joint and into the soil or void surrounding the pipe; and this would provide the most logical source of water for the landslide event. 47 The film taken by the CCTV camera, which was in evidence and which the Court of Appeal saw, gives an internal view of the pipe and shows, in a forceful way, a severe state of deterioration at the joint where the escape of water is most likely to have occurred. It is optically evident that failure of the joint has left ample room for escape of large volumes of water. It seems clearly possible that there has, at least to some extent, been downhill movement of the pipe; whether or not that has happened, what can be observed from the film is consistent with the Trial Judge's findings about the escape of large volumes of water, particularly when regard is had to blockage downstream by the piece of board which the Trial Judge regarded as likely to have happened. There are also optically evident signs of erosion of the inner surface of the pipe. To a lay observer such as myself, the extent of deterioration and failure, even in a pipe which had been in a position for more than 22 years, is striking. Plainly enough from the retrospective view, better results would have been achieved if there had not been bandaged joints, if there had been spigot and socket joints throughout the pipeline, if ductile cast iron pipe had been used and if rock anchors had been used. However the retrospective view is not the basis for decision. 48 There are other possible sources of water in this area. Mr Shirley made estimates of the contribution from various sources, which included subsurface seepage from under Myuna Place and direct rainfall; and other possible sources, such as the fracture of the copper pipe on Lot 7 which Mr Miller observed. The Trial Judge gave extensive consideration to the evidence of Mr Shirley and of other experts, at the conclusion of which he found (Red 44-45) Conclusion Having considered all the evidence, expert and lay, and taking into account the evidence of the highly experienced council officer Mr Sherrie, I have reached on the balance of probabilities the conclusion that the slump on No 12, the Plaintiff's dwelling was a direct result of the earlier slump on No 14 which in turn had been caused by a large volume of water turning the tip of the fill at the southern end of No 14 into mud, an inherently unstable soil form.

It is uncontested that [there] were heavy rainfall events on 17.8.98 causing huge water flows down the pipeline easement adjacent to the boundary of No 14 on the western side of the property, such volumes of water causing the lids on at least two pits to rise and fall as a result of water pressure. There was a build-up of water in Myuna Place and on the evidence of Messes Shirley and Jeffery, seepage under No 14 into the subsoil that formed the back garden, although this had occurred over time as well as over the period of the rainfall events around 17 August 1998.

The expert evidence suggests and so I find on the balance of probabilities, that at the time of the rainfall events of 17.8.1998 there existed in the pipeline, in particular above pit D near pit C, open joints, holes and fractures and that during the rainfall events of 17.8.1998 there was, due to blockages of the stormwater connections on No 14 Myuna Place and on the balance of probabilities a partial blockage of the pipeline itself, causing a build-up of pressure in the pipe to an extent necessary to force a considerable volume of water out of the holes, open joints and fractures into the soil to the east of the pipeline, that is the backyard of No 14, the water by way of underground flow channels seeping to the tip of the soil mass causing the soil mass to destabilise and slide to the south and south west of No 14. Therefore, in the ensuing hours a portion of the soil in No 12 was exposed and in effect left "hanging" with no support and it fell away in a south westerly direction leaving the back yard of No 12 depicted in the photographs tendered. To reach the conclusions I have, I have preferred the opinions of the expert, Mr Shirley with his extensive experience in investigating landslips and their cause as set out in his evidence and C.V. 49 Mr Shirley gave evidence of estimates of the flow through the pipe and escaping from the pipe, in terms which show the wide range and lack of precision characteristic of water flow calculations, but nonetheless illustrating that it was altogether feasible for very large volumes of water to escape from the pipe and reach and saturate the area at the toe of the fill on Lot 8, precipitating movement; and also showing the unlikelihood of this result being produced by water from other sources. 50 In Mr Shirley's interpretation of the Failure Mechanism, all the material affected was fill. First the fill material at the toe or lowest point of the fill on Lot 8 became saturated, so much so that there was a slump and a sudden flow of mud and debris downhill; in his interpretation there must have been an abundance of water in the basal part of the landslide at the commencement of the landslide event; the landslide was very mobile, occurred very rapidly and travelled a considerable distance. The upper part of the slump was a series of blocks. The lower-most soil material flowed down-slope, while the upper part of the landslide mass moved down-slope in blocky slump-like forms (Mr Shirley's Report Blue 1/43-44). The landslide occurred in two distinct stages, the main event being the first stage confined to Lot 8 in which the movement path was directly down the hill on Lot 8. It was not physically possible for the landslide on Lot 7 to occur in the manner in which it did unless the first stage landslide on Lot 8 had already occurred. The first stage left an unstable scarp line, and the unstable scarp line caused the second stage landslide. 51 The material involved in both stages was fill material, 3.5 to 4m deep (as the Trial Judge found). The event demonstrates that the fill material on Lot 7 had been held in position by lateral support from fill material on Lot 8; it slumped within a few hours after that lateral support was no longer available. The movement involved vegetation and a copper pipe within the fill material on Lot 7, and caused apprehension about sewer pipes within the fill material in the rear yard of Lot 7. Apart from the fill material, and vegetation and pipes supported by it, Lot 7 was not affected; house No 12, which was solidly founded on sandstone at a higher level, was not affected. When considering the risks which the state of the pipeline and the escape of water from the pipeline presented to Lot 7 and the interests of the respondent as its owners, the relevant risk is the risk that the escape of water might cause movement of fill material on Lot 8, and that that movement might withdraw lateral support from fill material on Lot 7, causing a slump of that fill material. The risk is not risk to the sandstone and residual soil which originally formed Lot 7, or to a house on Lot 7; if risks to the respondent's interest in those are involved (and I am unable to see that they are) those risks did not mature.

As found by the Trial Judge, the fill was composed mainly of clay and building material. The fill as described in Mr Shirley's Report was a highly miscellaneous collection of material. Mr Weatherby's Report dated January 2002, dealing with fill material on the site of the easement, shows a generally similar picture. The deposits were placed at several times; some, which were or at least included debris from the demolition of small cottages and outbuildings which earlier stood on subdivided land, were, it is clear enough, placed there during the years when the subdivision was under consideration and were in position when it was approved. It seems likely that further spoil was generated by the road-building, drainage and other engineering works carried out in the course of subdivision and before registration of the deposited plan, as to which there is no clear evidence of where it was deposited and it is quite likely that some part of it was deposited on what became Lot 7. Then there was a further deposit of spoil generated by preparing the site, which was largely weathered sandstone, for construction of the respondent's house. There is no clear way of knowing what proportion of the deposited spoil was placed in any one of these three deposits. It is however clear that there were deposits of spoil, the presence of which was known to the appellant, before consideration of the subdivision application was completed, as there are references to these deposits, and conditions relating to the treatment of them, in the appellant's papers. The appellant gave consideration to consolidation and stability while dealing with the subdivision application; at several stages approvals refer to the consolidation of the fill material. What the conditions required was no more and no different to what a prudent land owner could be expected to do with deposits of spoil on a steep hillside: remove them or consolidate them. The respondent herself, on whose behalf house No. 12 was constructed, may well have been in a position to give evidence herself and had the power of adduction of evidence dealing with the deposition of fill, and with consolidation, during her ownership; but she did not give any evidence on those subjects. 52 The Trial Judge's findings relating to the consequences of the events refer, appropriately, only to fill material. The Trial Judge referred to and appears to have accepted a passage in Mr Shirley's report to the effect that the second stage of the slump encompassed "much of the filling that had been previously emplaced on No 12 Myuna Place." The Trial Judge found (Red 49): The Defendant, on the basis of the evidence knew or should have known that land fill of various quality was used to build up the rear properties of blocks No 14, (immediately, adjacent to the pipeline) and No 12, next to No 14 on the eastern side of the pipeline. The Defendant knew or should have known of the permeable nature the fill on No 14 and No 12 and the fact that there had been landslides in the area previously. In my opinion, in the words of Lord Reid in the Dorset Yacht case [1970] A.C. 1004, there was sufficient relationship or proximity or neighbourhood such that in the reasonable contemplation of the former [here the Defendant], carelessness on his part may be likely to cause change to the latter [here the Plaintiff] in which case a prima facie duty of care arises.

53 The first consideration by the appellant of the proposed subdivision shown by records in evidence took place in July 1973. The appellant's Subdivision Board decided on 31 January 1974 (Blue 2/277-279) to approve subdivision into nine lots subject to conditions and with modifications; the conditions included the requirement (Blue 2/279) "2. That 5 small cottages and outbuildings be demolished and all debris removed from site" and a similar requirement for another demolition. 54 On 29 August 1974 the appellant approved a first stage subdivision of three lots (which does not appear to have proceeded). Conditions again included (Blue 2/289) conditions requiring demolition of the existing structures and removal of all debris and (Blue 2/290) a standard condition as follows: 9. Any filling placed on any lot(s) being free of foreign matter and being satisfactorily consolidated to retain the natural load and bearing capacity of the site. 55 The proposed subdivision was considered again several times, and was modified to eight lots; the standard condition relating to filling was not always imposed, but it was incorporated in the approval dated 20 April 1976 which led to registration of the Deposited Plan the following year. A report made by an officer in the Engineering Department on 20 April 1976 said among other things that this condition had been satisfied (Blue 2/305). This report does not relate to the further deposit of fill from rock excavation during the construction of the respondent's house, some years after the appellant's consideration of the subdivision application and of compliance with the conditions imposed. 56 The approval was communicated in Notice of Approval to Subdivision dated 20 April 1976 (Blue 2/307-308), which contained 21 conditions several of which related to easements. Condition 3 required the creation of necessary easements at no costs to Council. Condition 18 required "Piping of necessary drainage easements and vesting of easement rights in Council". Condition 19 (Blue 2/307) required: 19. Work as executed plans are to be submitted before final inspection and are to clearly show the location and nature of all service conduits, sub-soil drains and interlet drains. 57 The Trial Judge's findings include the following facts, which the Trial Judge said were not in dispute (Red 16): 3. Works as executed drawings for the easement were signed, certified and dated 10.4.77 [EX E]. Approval of the plans had been granted by the Defendant on 20.4.76, [EX D] leading to the conclusion that the pipeline was constructed over the year between 20.4.76 and 10.4.77.

4. The reinforced concrete pipeline extended down the western side of No 14 to the high water mark at the Bay, the gradient between 46 and 52 degrees according the plans tendered. To break the fall of water a series of concrete pits were constructed joining sections of the pipeline, which are marked relevantly on the executed plan, B, C, D and E.

5. The executed plan does not reveal what type of reinforced concrete pipe was used by the contractor, nor what type of joints were used to join which length of pipe. Nor does Ex E refer to the use of anchor blocks, a restraint used in the construction of pipelines in slopes and then are built around each joint in the pipe to restrain a pipeline from downward movement. 58 The Deposited Plan which bears Council Clerk's Certificate dated 30 June 1977 shows that by that time conditions had been complied with, the pipeline had been constructed and work-as-executed plans had been submitted. The work was not done by the appellant, but under some arrangement made by the developer. The appellant's rights in respect of the easement arose when the Deposited Plan was registered on 7 September 1977, and not any earlier. The land subject to the easement and the pipes constructed in (and to a large extent buried in) that land have never been owned by the appellant; the pipes and the land are real property owned by the registered proprietors of Lot 8 from time to time, first the developer, later Mr Le Claire and now Mr Plunkett. 59 No authoritative decisions of the High Court of Australia or of this Court of Appeal establish whether or not the appellant had a duty of care to the respondent of the kind upon which the respondent must rely. It is for the Court to decide as a matter of law whether a duty of care existed, deriving such assistance as can be derived from case law which appears to present analogies, while keeping in mind that it is in the nature of analogies to be imperfect. The conclusion on duty of care is to be formed after review and consideration of an array of matters which I do not attempt to define exhaustively, but as an attempt to indicate them, I set them out. Three matters which I have not included in this array, although they receive much attention in recent consideration of duty of care, are control, vulnerability and reliance. As I will later show, I do not think the facts of this case bring them under consideration. · All the facts, events and conduct which the evidence makes available for consideration about the application for subdivision approval made to the appellant and how the appellant acted upon it; and particularly the appellant's consideration and approval of the construction of the pipeline and the part in its design and construction taken by others, including the developer and its surveyors, who conducted the development application on its behalf and prepared the plans which were put before the appellant. · The range of foreseeable risks, whatever considerations are available bearing on the reasonableness of foreseeability of risks and the events foreseeably likely to occur in the future on the land, including construction of dwellings and other structures, and other activities which might foreseeably expose property to risks of damage; and the ways in which it was foreseeable that damage might happen. · The statutory function performed by the appellant, what its statutory or other public duties required or enabled it to do or made it reasonable for it to do; and the presence or absence of any legislative provision or purpose for the protection of property interests of later proprietors. · The significance for a decision that there is a duty of care of policy considerations including the avoidance of indefinitely extending liability and policy considerations relating to the burdens or exemptions which relate to exercise of functions of government. · The class of persons, classes of property and classes of risks which are to be protected by the duty of care. 60 The matters for consideration are not highly defined, and not always easy to distinguish from each other. Reasoning of syllogistic cogency supporting a conclusion is not, I would respectfully say, found in case law, even in decisions of the highest authority and, as I understand matters, is not truly available. Decision whether or not as a matter of law there is a duty of care is a judicial task which is beyond complete exposition: but it must be undertaken none-the-less. There is no generalisation which can express the basis upon which the courts will hold that a duty of care exists: this is a situation which is to be recognised, not rightly understood as a problem with an available solution. Compare Avenhouse v Council of the Shire of Hornsby (1998) 44 NSWLR 1 at 8 (Priestley JA). 61 In Part XII of the Local Government Act 1919 (NSW), in force in 1976 and 1977, s.331(2) gave Councils power to dispose of subdivision applications: "The Council may approve of any such application, or approve subject to conditions, or disapprove." Drainage of new roads and subdivided land was among the matters which Council was required to take into consideration in relation to opening a road by s.332 of the Local Government Act; this is the basis on which conditions relating to the pipeline and the easement were imposed: Drainage of subdivided land was also required to be taken into consideration under s.333. Section 332 required no more than that Council shall take matters into consideration, and operated with s.331. Subsection 332(1) provided: 332. Subjects for consideration respecting new roads (1) Where consent under the Environmental Planning and Assessment Act 1979, is required in respect of the opening of a road, then, in respect of any application for approval of the opening of a road, the council shall take into consideration: (a) the method of draining the road necessary in the circumstances, present and prospective, and the disposal of the drainage; (b) the drainage reserves or drainage easements to be provided; (c) the character of construction of the road necessary in the circumstances, present and prospective, and the necessity for the erection of road signs as part of the work of that construction; (d) whether or not kerbing, guttering and footpaths should be provided; (e) the treatment of junctions or intersections of roads; (f) the classification of the road; (g) whether the district is a residential district; and (h) if any proposed new road will be a lane, whether or not a lane should be permitted in the circumstances. 62 What the appellant could do under Pt.XII was limited to granting or withholding approval, choosing conditions and imposing them, and ascertaining and certifying that conditions had been complied with. Counsel for the respondent referred to statutory powers with respect to stormwater drainage systems under the Local Government Act, the Metropolitan Water Sewerage And Drainage Act 1924 (NSW) and the Public Works Act 1912 (NSW); in my opinion those statutory powers were not exercised in the present case. The appellant's statutory powers, powers under public law as distinguished from powers under real property law, included power to protect, maintain, control and manage works of drainage under s.382 of the Local Government Act, and for the purpose of constructing, extending, protecting or maintaining works under s.383 gave the appellant powers conferred on a Constructing Authority by the Public Works Act; these powers could involve obligations to pay compensation. The appellant had further extensive powers to enter land and carry out works under s.524 of the Local Government Act. By obtaining an easement the appellant secured to itself entitlement to use the pipeline and means of control over it without recourse to these public law powers. 63 The powers expressly conferred by ss.331 and 332 do not deal exhaustively with what a Council is to do when dealing with a subdivision application. The appellant was concerned to ascertain whether conditions had been complied with, including conditions in respect of the construction and draining of road, see s.335(1) of the Local Government Act; and after compliance, the certification by Council's Clerk that the requirements of the Local Government Act had been complied with under s.327(1)(d). Council's duty to give the Council Clerk's Certificate was considered in Avenhouse v Council of the Shire of Hornsby: see 20-22 (Sheller JA). The powers conferred by Pt.XII consisted in part of express powers to make decisions, but also in part of implied power to ascertain compliance with conditions; necessarily implied by the need to certify compliance. The legislation does not impose on the Council any duty or function of itself carrying out construction works, and its function is rather to decide what are the appropriate conditions, impose them, and certify that they had been complied with. A wide range is left to the discretion of Council, and the legislation does not specify standards which the conditions imposed are to see to it that works achieve. 64 The powers exercised in approving the subdivision application and imposing conditions were powers which it was the appellant's legal duty to exercise when an application for subdivision approval was made to it; and those powers could not be exercised in any other circumstances. Applying to the appellant and obtaining the exercise of the powers was the gateway to lawfulness and effectiveness in subdividing the developer's land and creating a new public road. The legislation contained no provision for payment of compensation or damages to persons affected by the exercise of powers in Pt.XII and no provision for making claims, establishing tests for liability or for providing funds, either for a class which could include the respondent or for anyone or all who might be affected by exercise of the powers. The powers in Pt.XII existed for the benefit of the general public in that they tended to improve the outcomes of subdivisions and dedications of new roads, the utility, convenience and amenity of such projects, over the state of affairs which would be produced if subdivision and dedication were not under public administration. Benefit to the general public can also be seen as protection of the interests of the general public; and the benefit and protection are more intense in relation to the people who, both contemporaneously with the subdivision and dedication and during a long future thereafter, actually use the roads and land; in the case of residential land such as this, most intensely by the people who come to own houses on the land, live in the houses and use the new road. There are many degrees of intensity of benefit, declining as definition moves away from those who come to own houses on the subdivision or live in them, to people who become tenants of or visitors to those houses and use the road for visits and access to them, and declining further to members of the public who may never come near the subdivision but benefit from enhancements to the amenity, economy and good order of the community from well-considered town planning. Attribution to the appellant of a duty of care in the exercise of subdivision powers requires identification of some degree of closeness or removal of persons and property affected by their exercise, and of something in the nature of their connection with the land in the subdivision or separation in distance and time from the exercise of the power. Recognition of limits beyond which a duty of care should not be attributed to a subdivision authority is very difficult to explain by any good principle; but limits there must be of any duty of care which is recognized. 65 The power to approve subdivisions and impose conditions, which a local government authority has a statutory duty to exercise on application, and does not involve continuing exercise of control over the regulated activity after its exercise, has characteristics which make attribution of a duty of care in its exercise a very different matter from attribution of a duty of care in the exercise of statutory or public powers which require or enable continuing intervention in some continuing activities. In this respect the power is quite different to the powers of road authorities considered in Brodie v Singleton Shire Council (2001) 206 CLR 512, powers relating to the supervision of circumstances affecting public health in Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540, and very markedly different from the circumstances of control over employment in Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1. The power is not at all like powers vested by statute in public authorities which give such a significant and special measure of control over the safety of persons or of property as to impose a duty of care, or to oblige the authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from a danger; that is, it is not a power of the kind referred to in Brodie v Singleton Shire Council by Gaudron, McHugh & Gummow JJ at 588-599 [102]. 66 The control available to the appellant over hazards of the kind now in question was extremely slight. Imposing the condition requiring compaction of fill should be understood to relate to fill placed in the course of the subdivision works, and not to be an attempt (which could not be successful) to exercise control over placement and stability of fill which might be put in place later. Apart from imposing this condition I can see nothing which the appellant might have done, when exercising subdivision powers, to deal with hazards such as occurred: the hazard that, if after completion of subdivision works and placement of fill on Lot 7 in the course of them, additional fill might later be placed on Lot 7, and that the fill on Lot 7 might be dependent on lateral support from other fill placed on Lot 8, and that after several decades the lateral support might cease to be available because the escape of water from the pipe might make the fill on Lot 8 unstable. Even if this hazard and this chain of events were reasonably foreseeable, the available measure to prevent slippage on Lot 7 by the exercise of subdivision powers can only have been to control the characteristics of the pipeline so completely as to bring it about that water would not escape from it in the course of many years. Once the subdivision plan was registered, the opportunity for the exercise of any statutory power relating to subdivision was ended and such a power could not have any further influence. 67 In referring to the question of control counsel for the respondents referred to Brodie v Singleton Shire Council at 573-574 [140] and to the discussion by Gaudron, McHugh and Gummow JJ of the powers vested in road authorities giving them significant and special measure of control over the safety of the person and property of road users. Their Honours earlier discussed this matter at 558-559 [102]. In my opinion the control exercised by a road authority is to be contrasted very strikingly from control exercised in subdivision powers, principally because of the continuing nature of the control and of operations under a road authority's powers. The concept and significance of control were recently considered at length in Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124, 1 DDCR 486 by Ipp JA at [18]-[65]. 68 It is difficult to bring to bear the concept of control by the appellant in relation to the exercise of its powers over the subdivision. I see no room in reality for the conclusion that in exercising its power to approve the subdivision and to impose conditions in 1976 the appellant was exercising control over stability of the fill, and influences on the stability of the fill, in the rear yard of Lot 7 in 1998. The subdivision powers existed until they were fully exercised, but after the Deposited Plan was registered, statutory powers over subdivision no longer enabled the appellant to do anything. The powers of the local government authority under consideration in Graham Barclays Oysters were altogether different in the respect that they enabled the authority to intervene from time to time when it chose, (and they did not confer control in the relevant sense either). 69 In the conceptual world of reasonable foresight to which the Court pays regard when considering whether a duty of care exists, the persons whose interests are to be protected by conforming to the duty of care are persons who take reasonable care for the safety of their own interests. (Exceptions relating to risk of personal injury for momentary inattention in employment situations are not presently relevant.) The class of persons which includes the respondent whose interests are to be protected by the duty of care under consideration is a class of persons who did not own any nearby land when the subdivision was carried out, and had no part in deciding what form the subdivision should take, or how the application would be conducted or what works should be carried out to comply with conditions imposed by Council, and in what manner; they came on the scene later as purchasers from the developer or from an intermediate owner: in her case, as a purchaser from the developer. The developer itself, acting commercially for the protection and enhancement of its own economic interest and controlling the form in which the subdivision application was put forward and the carrying out of the works, is in my view entirely out of consideration as the object of any duty of care imposed by law on the appellant. 70 The nature of the loss which the respondent alleges was in my opinion plainly damage to property: the fill deposited on Lot 7 lost lateral support and slipped away, carrying with it vegetation and trees which formed much of the backyard, and causing the fracture of a water pipe which appears to have carried water to a garden tap. The claim for relief includes a claim for a mandatory injunction requiring the appellant to restore the property to its previous state. The claim cannot be seen as a claim for economic loss in the sense in which structural stress to the warehouse and office complex in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 was said to be economic loss: the loss claimed went beyond diminution in value of an improvement. The respondent's case requires the deposit of fill in Lot 7 to be considered as in some way a fixture, an improvement or a structure on her land, and the risks to which it was exposed which are to be considered in relation to the existence of a duty of care are risks to its stability created by the manner in which the appellant dealt with the subdivision application. 71 The risks against which the respondent and persons in the class into which she falls are to be protected by the duty of care should not in my opinion be generalised as risks of damage to property from careless decisions or actions in the course of the appellant's conduct of the subdivision application. The interest of the class of persons into which the respondent falls which is to be protected, and foresight of the risks to which is under consideration, is their interest in deposits of fill which were successively placed at different times on the steeply sloping parts of the land; it is not their interest in the stability of their houses. For houses which were later to be constructed on subdivided lots the law provided for further processes of regulation and control which would affect the siting of a house on a lot and the foundation on which it was to be built. The workings of those controls are illustrated by what happened when the respondent's house was built: it was built at the highest elevation of the block, founded on sandstone, it was not built on the steep slope (and it is unlikely that a house would ever be built there) and was not built on a part of the lot which could be reached by any escape of water from the pipeline in the easement. 72 The risk to which the deposit of fill on Lot 7 was exposed was the risk that water escaping from the pipe might saturate lower levels of the fill on Lot 8 and cause it to slump; and thus remove lateral support of the fill deposited on Lot 7, causing it to slump. The deposits on Lot 7 were beyond the range of the saturation which, in Mr Shirley's interpretation, illustrated by his plan and accepted by the Trial Judge, resulted from the escape of water from the pipeline. Mr Shirley's interpretation is fully supported by the land form and the contours. Water which escaped from the pipeline did not reach Lot 7, and in view of the land form and contours it seems extremely unlikely that escaping water ever could do so in any circumstances: the contour and steep slope would carry water southwards and down hill to the Bay across Lot 8 and also possibly across other land further west. If the fill on Lot 7 in 1976 or later deposited had been compacted or retained so as to support itself and not depend on lateral support from other fill it would not have been exposed to the risk which matured. Whatever other characteristics it had, if it had not depended on lateral support from fill on Lot 8, the escape of water from the pipeline would not have harmed it. The appellant's contribution to the stability of fill on Lot 7 in the course of dealing with the subdivision application was no more than to impose a condition requiring the fill to be removed or stabilised; I do not find it possible to see anything else that the appellant could have done, and nothing more was suggested. The condition did no more than tell the developer not to behave with folly towards the fill. 73 The stability of the fill on Lot 7 was not disturbed by its being reached by water escaping from the pipeline; Mr Shirley's interpretation of the event does not show any water reaching Lot 7. The fill on Lot 7 did not slump southward towards the Bay. In Mr Shirley's interpretation it slumped generally westward or southwest, into Lot 8, some hours after a series of slumps of similar fill on Lot 8 which in Mr Shirley's assessment and the Trial Judge's findings, were caused by saturation by water escaping from the pipeline and reaching the toe of the fill on Lot 8 and then by instability and movement following its saturation; essentially, movement under the influence of gravity downhill and to the south generated by loss of stability and movement at the toe of the fill on Lot 8. This removed lateral support from the fill on Lot 7 generally about the boundary between the lots, and after some hours the loss of lateral support expressed itself by movement and slumps in the fill on Lot 7, largely westward and southwestward across the boundary. The interest of the respondent which the duty of care on which she relied is to protect is her interest in the stability of a body of fill, an unknown but probably large proportion of which was placed after the subdivision was completed, the stability of which depended on lateral support afforded by a similar body of fill on Lot 8, itself deposited on a steep downhill slope. 74 Under the law as it was when the subdivision application was considered and when the fill was deposited an owner of Lot 7 had no entitlement to lateral support for a deposit of this kind. The law was later changed by the enactment in the year 2000 of the present s.177 of the Conveyancing Act (and its provisions do not appear to confer any right to lateral support either; see subs. (3) and (4)). When considering the appellant's duty of care and what was foreseeable, the law in the state it was before the enactment of s.177 in 2000 is the relevant law. If the appellant could, in any circumstances, have come under a duty of care to land owners who succeeded the developer when considering and dealing with the subdivision application, it is in my opinion not possible to conclude that reasonable foreseeability of risk to future owners extended to reasonable foreseeability of risk of loss of the kind which happened, in which there was in place on Lot 7 a body of fill material, which was not part of the natural rock and soil which constituted the land, and depended for its stability on lateral support from another similar body of material on Lot 8, both placed on steeply sloping land; there being no right to such lateral support. The interest of the respondent or a landowner in her position in the protection of the stability of the fill from risks created by the manner in which the appellant dealt with the subdivision application is not the interest of a person acting reasonably. Reasonable foreseeability does not extend to risks to the stability of whatever fixtures, however well or poorly supported, landowners may in the future come to have and continue to have on their land. Reasonable foreseeability is not to be equated with the limits of the imagination, and did not in my opinion extend to reasonable foreseeability of the kind of injury to the interests of the respondent which occurred, and there is no duty of care in relation to that risk. 75 It is not possible to move readily from case law relating to local government powers to regulate construction of buildings, including dwellings, to conclusions about whether duties of care exist in the exercise of statutory power relating to opening of roads, construction of drains and subdivision of land. For building control powers the connection between the exercise of the powers and the risk of harm to the health and safety, and also to the economic interests, of persons who own or occupy buildings is much more clear and direct than for powers which impact on amenity and public utility through town planning and the provision of municipal services. In illustration of the difference, local government legislation usually provides means for at least some information about building control decisions to be available to purchasers of buildings constructed under building controls; in 1976, information to prospective purchasers was available from certificates under s.317A of the Local Government Act, and under the present legislation information, not the same information but also information useful to intending purchasers, is available through Building Certificates. The functions of these certificates have not been constant; what is constant is the availability to later owners of information about the outcome of building control. In 1976 there was no correspondingly ready access to any information about the conduct of subdivision applications, what had been considered and what had been done in the course of them; if an intending purchaser had pressed inquiries the purchaser might well, depending on the response of the Council, have gained information about what had been considered and what had been done, but there was no legal machinery and it was not the practice to do so. The distinction is a reflection of the nature of the subdivision power and the less direct impact of its purposes and its exercise on the interests of later proprietors. Decisions such as Inglewood Shire Council v Voli (1963) 9 LGRA 340 and consideration in them of duties of care arising in relation to the exercise of building control powers have no real place as authority for the existence of duty of care in relation to other powers, consideration of which should be addressed from the beginning. 76 In negligence law vulnerability is a concept usually encountered in the discussion of protection from economic loss, and for that reason is not in my view part of the matter under consideration in the present case, where the interest protected is an interest against physical damage to a fixture on real property. Vulnerability was discussed in the context of an economic loss claim in Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 530 [23]: "Vulnerability", in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, "vulnerability" is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of the defendants want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant.

But in any event I do not think that exposure of the fill on the respondent's land to risk of loss arising from carelessness in specifying what form the pipeline should take and in ascertaining that conditions relating to its construction had been complied with relates to the respondent's position in such a way that she could be seen to be vulnerable. The respondent and the class of persons into which she falls, persons acting in their own economic interests and for their own benefit in relation to buying residential land, constructing dwellings and living in them, have far more control over what structures (considering the fill as a structure) are placed on and continue on their land and what state of stability they have than a local government authority could ever have. The respondent was not vulnerable, in respect of the interest which she now seeks to protect, in depending in any way on proper exercise by the appellant, in and before 1976, of its subdivision powers; the stability of the fill deposited on her land was entirely within her own control, by measures which she had many years to take. 77 There was and could be no finding of reliance by the respondent on the appellant's decision about what works should be carried out in the course of the subdivision, which took place years before she acquired Lot 7 or built her house on it; and before she deposited fill on the existing land and fill, and made whatever decisions she made and carried out whatever works she carried out (and she does not give evidence of them) about continuing to have the deposits of fill in place and about maintaining their stability. The question whether it should be inferred that the respondent in some way relied on the manner of the appellant's performance of its statutory function relating to subdivision some years earlier when she decided where and how to deposit her fill and how to retain it can only receive an answer adverse to her if any connection with reality is retained. 78 There is no evidence of any communication between the respondent and the appellant, at or before the time when she purchased her land, or at any other time, in which the appellant gave to her or she asked for any information about the appellant's exercise of its subdivision powers, or about the pipeline, or about anything that the appellant had done in relation to the pipeline, either during the subdivision process or afterwards. The only sense in which it might be thought that there was any relevant reliance is the sense referred to in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 463-464 by Mason J., that is reliance arising out of general dependence on an authority's performance of its function with due care: reliance or dependence which is the product of the grant and exercise of power designed to prevent and minimise the risk of personal injury or disability, recognised by the legislature as being that such a magnitude or complexity that individuals cannot, or may not, take adequate steps for their own protection: a situation which generates on the side of the individual a general expectation that the power would be exercised and on the side of the authority a realisation that there is a general reliance or dependence on its exercise of power. This was summarised by Brennan CJ in Pyrenees Shire Council v Day (1998) 192 CLR 330 at 343-344 as "an expectation by the community at large that a defendant would act in a particular way in order to perform a statutory function." The concept of general reliance has never become established. Reservations about the concept of general reliance were expressed in Stovin v Wise [1996] AC 923 at 954-955 (Lord Hoffmann). General reliance is not treated as reliance for the purpose of deciding whether a duty of care exists; it was comprehensively rejected by the majority in Pyrenees Shire Council v Day - see Brennan CJ at 343-344, Gummow J. at 385-388, and Kirby J. at 408-412 [225]-[232]. There has been further criticism of general reliance: see, for example, Crimmins v Stevedoring Industry Finance Committee at 24[43] and citations at note 55. In any event it is not possible to relate the present facts to the examples which Mason J. gave in Heyman at 464 of general reliance - control of air traffic, safety inspection of aircraft and fighting fire by the fire authority. 79 In Heyman there was diversity of expressions in support of the unanimous conclusion against liability, but, although interpretation of the judgments is not easy, in my understanding a majority (Mason, Brennan & Deane JJ) regarded the absence of a relevant inquiry made of the Council or of reliance placed on it as showing conclusively that there was no duty of care in respect of the exercise of the Council's powers of building control under Pt.XI of the Local Government Act - see Mason J. at 461-464 (always recollecting the disapproval which has been expressed of part of this passage) and 470-471. Justice Mason appears to have treated the absence of reliance, including general reliance, as establishing that there was no duty of care. Justice Brennan regarded reliance on an expectation induced by a public authority by practice in exercising its powers as a possible source of a duty of care: see 486, and the absence of any communication of information as showing that there was no duty of care: see 494. Justice Deane treated the absence of communication as supportive of his conclusion of an absence of proximity in any sense: see 510-511. 80 I am not prepared to conclude, on the basis of Heyman, that the absence of inquiry made of the appellant and of reliance placed on it by the respondent establishes that the appellant owed the respondent no relevant duty of care. The passages to which I have referred show that Mason, Brennan and Deane JJ each treated the absence of reliance as of high importance or conclusive, but it is not clear to me that the simple proposition attributed to their Honours in the headnote at the foot of page 424 in Heyman is borne out by their judgments. However I regard the presence or absence of communication and reliance as of high importance for decision whether there was a duty of care to a subsequent owner in the exercise of building control powers; and even more important in the present case of subdivision control powers which are less related to the protection of interests in person and property than are building control powers. 81 As was pointed out in Woolcock Street Investments v CDG in the leading judgment at 525 [14] the reasoning in Bryan v Maloney (1995) 182 CLR 609 which produced the conclusion that in that case the builder owed a subsequent owner a duty to take reasonable care to avoid economic loss depended upon conclusions reached about the relationship between the builder and the first owner. In so far as there may be any analogy with the facts in Bryan v Maloney there could not be a duty of care owed by the appellant to the developer to protect the developer from risks to its economic position, or to other risks arising from the plans and works which the developer, with the assistance of its engineering consultant and any other expertise which it chose to retain, decided to put before the appellant for approval, and to carry out. A search for analogies between the present facts and those in Bryan v. Maloney produces only the most distant analogies; but insofar as the existence of a duty of care in the first relationship may be significant for a duty of care to later owners, that element is not present. As Giles JA observed in Port Stephens Shire Council v Booth & Ors [2005] NSWCA 323 at [100], the observations in Woolcock Street Investments v CDG cannot be overlooked in the present context. 82 Case law and judicial opinion do not provide clear paths for decision on the circumstances in which a duty of care is imposed on a public authority exercising statutory powers, the risks against which a duty of care protects, and the persons to whom a duty of care is owed. Duties of care in the exercise of statutory powers to carry out or control physical works towards persons whose personal safety or property interest were adversely affected were established in the 19th Century. Coote v Forestry Tasmania (2006) 80 ALJR 1089 is a very recent example. Division of activities into operational and policy or governmental activities is so broad and indefinite as to provide little assistance, and when consideration moves away from operations in the physical world into operations which involve decisions to grant or withhold approvals, and to impose conditions, and still further away into discretionary decisions whether or not to intervene in some activity with directions controlling its conduct or with prohibitions, uncertainties increase and paths of decision become more obscure. There is a very large gulf between observing that the legislature has decided to intervene in some activity and enhance some aspect of human existence by conferring administrative powers to influence it, and a conclusion that the legislature has decided that the public authority which is so empowered and its funds should recompense those affected if the administrative intervention does not produce the best results or is carried out to a lower standard of competence than is available. It is one thing to confer powers to regulate an activity and quite another thing to underwrite losses caused by the process of regulation, even if the results are less than the results reasonably obtainable. 83 The problem of wide extension of remedies and inability to discern limits, associated with the exposition by Chief Judge Cardozo in Ultramares Corporation v Touche (1931) 174 NE 441 at 444, is particularly pressing when negligence law is said to impose liability on regulatory authorities. There are policy limitations on the attribution of duties of care and the imposition of liabilities, but authoritative judicial decisions and judicial opinion generally do not enable a confident statement to be made of what those policy limits are. A simple-hearted progress from foreseeability of risk of loss to attribution of duty of care is not what the law authorises. 84 The interval of time and the opportunity for intervention of activities and events of many kinds between completion of the approval process and the event which caused loss make the Ultramares problem relevant and pressing. It would be unreasonable, indeed irrational that the developer who sought subdivision approval and whose interests were affected by the public authority's decisions and conduct, should rely on the public authority to protect the developer from risks that works which the developer itself was to carry out or have carried out would create flooding or other damage through escape of water on to its own land. As consideration extends more widely away from those involved in the approval, which was the appellant's business in hand and had the most pressing claim for attention, to persons and interests at further removes from the process of applying for and giving subdivision approval, to persons and interests which exist at later times, to structures placed and continued on the land at later times, to later proprietors, to successive proprietors, to occupancies severed from the lot where the pipeline is, and to works carried out after the completion of the subdivision: the classes of persons, of kinds of property and of risks which a duty of care would protect rapidly becomes very extensive, the range of possibilities of outcomes becomes more difficult to foresee and the problem described in Ultramares increases greatly. 85 In my respectful view the cautious approach which is appropriate is expressed in the following passage in Graham Barclay Oysters at 596-597 [145]-[146] (Gummow and Hayne JJ): [145] … the co-existence of knowledge of a risk of harm and power to avert or to minimise that harm does not, without more, give rise to a duty of care at common law. The totality of the relationship between the parties, not merely the foresight and capacity to act on the part of one of them, is the proper basis upon which a duty of care may be recognised. Were it otherwise, any recipient of statutory powers to licence, supervise or compell conduct in a given field, would, upon gaining foresight of some relevant risk, owe a duty of care to those ultimately threatened by that risk to act to prevent or minimise it. As will appear, the common law should be particularly hesitant to recognise such a duty where the relevant authority is empowered to regulate conduct relating to or impacting on the risk-laden field of endeavour which is populated by self-interested commercial actors who themselves possess some power to avert those risks.

[146] The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence. 86 There is a very wide range of conclusions which could be reached as to the conditions which should be imposed when taking into consideration the method of draining the road which was to be opened in the subdivision, as required by s.332(1)(b) of the Local Government Act. Decision could require drainage to be discharged on surrounding land, or to be left to find its own course, or to be carried off in an open ditch; or could require a drainage system involving gutters, pits and pipes such as was actually approved; or something more elaborate such as tunnelling. If the decision is for construction of a pipeline there is then a wide range of decisions reasonably available about what kind of pipeline is to be required and how much detailed control to impose on design and construction. Except in relation to statutory appeal mechanisms (and there were such at the time) the only judicial controls on such decisions are controls relating to the limits of the reasonable on Wednesbury principles; see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. The claim that there was a duty of care is a claim that the Court should exercise control, in considerable detail, over the manner in which the statutory function relating to approving subdivisions and imposing conditions is exercised. Although the appellant could in concept have decided on some system of drainage which did not involve pipes at all, the respondent's claim has the effect that the appellant decided that there should be pipes, the appellant also should, under its duty of care, have controlled in detail the design and construction of the pipes, including the quality of the work and the sufficiency of the design, to standards which the Court is to establish. This is a large claim for intervention by the Court in and for control over a function which the legislature committed to a different body. Nobody, it seems to me, had a right that the appellant should decide in favour of a pipeline and not, say, a ditch. I do not see what can be the source of the Court's power to control in detail what sort of decisions the appellant should make about a pipeline if it should happen to decide for a pipeline. 87 The 21 years which have passed since Heyman have been long years in the history of negligence law, the concept of proximity around which much consideration then revolved has lost its place in negligence law, and the diversity in expression and views in Heyman was such that it could not ever have been regarded as authoritatively establishing principles for further development of the law: a rich mine of opinion but a source of little illumination. Heyman should in my view be respectfully treated as authority binding this Court on negligence in building control powers under Pt.XI, but it is not an authority for decision of the present case. Heyman is no longer a source for authoritative statements on the process to be followed, and regard should now be paid to indications of the current state of opinion in the High Court of Australia. I draw from that case:

• the significance of there being no indication of any legislative intention to create any remedy or confer a right of action;
• the need for reliance by the party claiming the benefit of the duty of care on the exercise of the statutory power;
• (with the assistance of Pyrenees Shire) the unavailability of general concepts of reliance and the need for the plaintiff's reliance to be actual; and
• the unclear distinction between policy and operational exercises of power, relatively clear in the building control context as a distinction between decisions to approve plans and impose conditions, and inspections to ascertain compliance.

88 Counsel for the respondent referred to Voli v Inglewood Shire Council (1963) 110 CLR 74 and said that that decision demonstrates that a breach of the common law duty of care may arise from the failure of the authority's officers to ascertain whether statutory requirements have been satisfied. Consideration in Voli of the liability of the Shire Council related to liability as occupier letting out the Shire Hall for hire; the Shire Council's officers had inspected the plans for the Hall during its construction for compliance with the bylaws, but had failed to observe that the bylaws were not complied with. The facts and grounds of decision are very distant from the present case. 89 The respondent's counsel also relied on Travis & Anor v Vanderloos & Ors (1984) 54 LGRA 268 (Derrington J.) where the local authority had approved, in relation to work by a subdivider constructing a subdivisional road along a boundary, a culvert to carry a watercourse to its tributary under the road, diverting the watercourse; and approved an inadequate second culvert. It was held that the local authority was liable for having failed to take reasonable care in approving the construction proposed by the subdividers. Justice Derrington (at 272) regarded the local authority's liability as established by Dennis v Charnwood Borough Council [1983] QB 409. Consideration of Council's liability was very brief. Travis was decided while Heyman was under reserved judgment. In my respectful opinion the decision should be understood to have been completely overtaken by later development. 90 Dennis v Charnwood was later considered in the House of Lords in Governors of the Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd & Ors [1985] AC 210 at 243-245. Lord Keith of Kinkel, with whom the other Law Lords agreed, saw Dennis v Charnwood in this way (at 244): "The decision is in my opinion to be justified on the basis that the plaintiffs as owners who were the intended occupiers of the house were within the ambit of the duty of care laid down in [Anns v Merton London Borough [1978] AC 728]. They were persons injury to whose safety or health might necessarily be expected to occur if the foundations of the house were inadequate. There can be no doubt that, under the ratio decidendi of Anns, a remedy against the local authority would have been available to any subsequent occupier who had purchased the house." That is to say, Dennis v Charnwood was explained and it would seem approved by the House of Lords on a limited basis relating to the health and safety of persons; and was approved on the basis of Anns, which is not followed in Australia. In my opinion Travis v Vanderloos, like Dennis v Charnwood is part of a closed chapter in negligence law and should no longer be followed. 91 In Egger v Gosford Shire Council (1989) 67 LGRA 304, where negligence was alleged in the exercise of the Interim Development Control powers under Pt.XIIA of the Local Government Act for the erection of a block of flats near a frontal dune which was later eroded by the sea, Hope and Samuels JJA disposed of the appeal on the ground that the particular risk of damage on which the plaintiff relied had not been shown to be reasonably foreseeable. Justice Clarke reached the same conclusion on the ground that there was no duty of care. The appellant in Egger owned another house near the block of flats, and the house was destroyed by wave action allegedly diverted by protective measures put in place by the owners of the block of flats during heavy seas. The alleged negligence did not relate only to the Interim Development Control powers: at least as important was conduct of the Shire President during the crisis created by wave action. Justice Clarke made a very extensive survey of case law in which Heyman was referred to but was not treated as establishing the law. Justice Clarke reviewed at length case law to that time discussing the distinction between the policy and operational areas. In my opinion Egger is not an authority governing the present case. 92 The present state of the law relating to duty of care in building control was considered in Smith v Eurobodalla Shire Council & Anor [2005] NSWCA 89 at paras [95]-[104] (McClellan AJA). There has been no development, in the case law there reviewed, or elsewhere so far as I am aware, towards extension of duty of care to situations where there has been no reliance on some information provided by or communication with the public authority, and no development towards the extension of a Council's duty of care, other than in the context of any such reliance by them, to later owners of property not involved in the approval process. There is also a focus in the case law towards protection of interests in the safety of housing and the habitability of land. The three propositions which McClellan AJA distilled from the case law at [104] have no application in the present facts. 93 Senior counsel for the appellant referred to Investors In Industry Commercial Properties Ltd v South Bedfordshire District Council & Ors [1986] QB 1034. In that case the plaintiffs were developers who employed their own architects, structural engineers and contractors to build warehouses on a site which had once been a pool but had been filled by tipping material. The plaintiffs' experts prepared working drawings of the foundations, and inspectors employed by local authority inspected the foundations of while they were being put in place and approved the foundation basis before concrete was poured. Their inadequacy appeared soon after completion of building. The local authority had statutory supervisory powers under legislation relating to public health, and also to building control. The Court of Appeal of England and Wales held that the local authority had no duty of care to the building developer in the exercise of supervisory powers. This decision was followed in Richardson v West Lindsey District Council [1990] 1 WLR 522. These decisions favour the appellant's case, but they do not deal with duty of care to subsequent occupiers, any observations in them which might be thought to bear on that are dicta, and they should not be relied on because of differences of view on fundamental matters between courts in England and in Australia, and because of changes of opinion with the passage of time. 94 If the position simply is that the appellant's officers made no inspection, that could not, in my opinion, be held to be negligent. Part XII does not expressly confer power to inspect for compliance with conditions. I assume that power to inspect the pipeline works is implied on the basis that Council imposed conditions for the construction of the pipeline works and was to come under an obligation to complete the subdivision process by giving Council Clerk's Certificate, to do which it would be necessary to know that conditions had been fulfilled. The assumed implied power is a power to inspect, not a duty to inspect. Even if it were accepted that there was a duty of care to the respondent in carrying out an inspection, if one was carried out, the implied duty would not extend to a duty to carry out an inspection at all. It would be difficult to establish that there was negligence in carrying out the inspection, as the subject matter to be inspected for the purpose of ascertaining whether the condition had been fulfilled is delimited by the terms of the condition; the condition made no detailed specification for the construction of the pipeline in the respects now complained of. 95 I place the appellant's decision to impose conditions and choice of terms of conditions on the "policy" side of the obscure division between policy and operations in exercise of statutory powers. On the difficulties of the distinction see Graham Barclay Oysters at 556-557 [12] (Gleeson CJ). Deciding what the condition was to be was within the policy area and cannot be assigned to the operational area. If ascertaining that the condition had been complied with should rightly be allocated to the operational area (and I think it should) there is no room for decision that there was negligence in that operational area. There was no finding, and in my understanding no evidentiary basis for a finding that an inspection to ascertain whether there had been compliance was ever actually carried out. As there was no statutory duty to make such an inspection, the law associated with Sheppard v Glossop Corporation [1921] 3 KB 132 shows that there would be no negligence in omitting to inspect. The appellant received work-as-executed drawings (Blue 1/9) which can be recognised as the drawings prepared by surveyors and referred to in the subdivision approval, with additional endorsements showing work as executed. A decision to rely on the work-as-executed drawing, or to rely on the expectation that the developer, with the assistance of its surveyors and engineers, would do the work properly and conform with the condition, could not be said to be negligence in the operational area; and I am unable to see that it could be said to be careless in any sense. 96 I regard it as clear that unless there is a statutory obligation to exercise a power (in this instance, a statutory duty to make an inspection) a duty of care does not require its exercise, and there is no breach of duty if it is not exercised. That this is so appears in my opinion from Glossop; see Scrutton LJ at 149-150, and from Stovin v Wise [1996] AC 923 at 947C-F and at 952F-195E (Lord Hoffmann). See too Heyman at 457-461 (Mason J.) citing Revesz v Commonwealth of Australia (1951) 51 SR (NSW) 63: this passage includes passages referred to in Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124 at [18-65] (Ipp JA). Observations of McHugh JA in Parramatta City Council v Lutz (1988) 12 NSWLR 293 at 328-329 appear also to express this view, with qualifications tainted by reliance on Mason J.'s "general reliance" position. See too Clarke JA in Egger at 343. 97 The Trial Judge discussed the existence of a duty of care in terms of whether proximity was established; see (Red 49). With the benefit of observations of the High Court in Sullivan v Moody & Ors (2001) 207 CLR 562 at 578-579 it can be seen that it is no longer appropriate to use proximity as an explanation of the process of reasoning leading to a conclusion of duty of care. It can be seen that proximity expresses the nature of what is in issue, but it is authoritatively established that it no longer is acceptable as an explanation of the process of reasoning. Notwithstanding its centrality in negligence law for more than a century, and its ready use to explain decisions for many decades, referred to in Sullivan v Moody, the limits of its utility should now be respected. Neither "proximity" nor any other formulation is readily available in exposition of the basis of decision on duty of care. 98 In the present case there is no express statutory function of making an inspection or duty to do so, and there is no record or evidence that the appellant's officers carried out inspections of the pipeline works which could or should have made known the aspects of the works which later became the subject of complaint - the use of bandaged joints, the absence of rock anchors. What could or should have been looked for on an inspection (if there had been one) and what would constitute an unsatisfactory result of an inspection was committed at the earlier stage when conditions were imposed on subdivision approval, and at the stage of approving plans; there would have been no point in an inspector objecting, for example, to some of the pipe joints being bandaged joints unless there had earlier been a specification that they were to be spigot and socket joints. There is really no basis at all for deciding that there was negligence at the policy stage when conditions were imposed and the plans were approved. 99 There is in my view nothing in the terms, scope and purpose of the statutory regime in Pt.XII which creates a relationship between a local government authority and a class of persons into which the respondent falls, that is, later owners of the subdivided land who succeed the subdivider. The appellant had no control to exercise over the risk of harm which eventuated from the respondent's having, increasing and maintaining a deposit of fill on her land which depended for its stability on fill on the neighbouring lot; even more clearly, the appellant had no control of any kind exercisable when exercising its powers under Pt.XII. The asserted duty of care has no place in the terms, scope and purpose of Pt.XII, which does not deal with damages and contains no provisions for paying compensation, bringing proceedings, or providing resources for paying compensation, and sets no tests for entitlement; the whole subject of entitlement to damages is entirely outside the terms, scope and purpose of Pt.XII. 100 I think there is some guidance to be found on circumstances in which a duty of care and negligence is incurred by a local government authority in the exercise of statutory powers in observations in Graham Barclay Oysters, notwithstanding diversity in expression and it may be, in opinion shown in the judgments in that case, all of which reached the same conclusion. Adverting to Gleeson CJ at 564 [39], the statutory provisions do not contain anything to justify a conclusion that the powers were given for the protection of a specific class of persons in which the respondent is included, or were given for any class of persons who can be identified and distinguished from the public generally. Justice McHugh referred at 577 [83] to a passage in Brodie v Singleton Shire Council at 559 [102] which referred among other things to occasions when the powers vested by statute in the public authority gave it such a significant and special measure of control over the property of citizens as to impose on the authority a duty of care, as of fundamental importance for the factor of control or whether there was an obligation in negligence. McHugh J went on to refer at 583 [99] to Donoghue v Stevenson [1932] AC 562 at 580 and to say "To create a duty, the relationship between the public authority and persons affected by the conduct of the authority must be 'so closely and directly affected by [its] Act [or omission] that [it] ought reasonably to have them in contemplation as being so affected' when it directs its mind to the relevant conduct in question". Within McHugh J's terminology the relationship was neither close nor direct. 101 Justices Gummow and Hayne (with whom in this respect Gaudron J. concurred - see 580 [58]) said at 596-597 [146]: [146] The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence.

[147] Where the question posed above is answered in the affirmative, the common law imposes a duty in tort which operates alongside the rights, duties and liabilities created by statute. 102 Justices Gummow and Hayne also said at 597-598 [149]-[150]: [149] An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial Pyrenees Shire Council v Day (1998) 192 CLR 330 at 377 [126]. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated (Howard v Jarvis (1958) 98 CLR 177 at 183); Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550-552, 556-557; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 551; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 24-25 [44]-[46], 38-39 [91]-[93], 40-41 [100]; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute Sullivan v Moody (2001) 207 CLR 562 at 581-582 [55]-[62]. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 16-17 [47], 23-24 [76], reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care.

[150] The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority (Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 551-552; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 24-25 [43]-[46], 42-43 [104], 61 [166], 82 [227], 104 [304], 116 [357]; Brodie v Singleton Shire Council (2001) 206 CLR 512 at 558-559 [102]). It assumes particular significance in this appeal. This is because a form of control over the relevant risk of harm, which, as exemplified by Agar v Hyde (2000) 201 CLR 552 at 562 [16], 564 [21], 581-582 [81]-[83], is remote, in a legal and practical sense, does not suffice to found a duty of care. 103 Their Honours' later observations (paras [150]-[152]) indicate what they had in contemplation; in my view no control, in their sense, was exercised by the appellant over the respondent's interest in the stability of the fill when the appellant carried out its functions relating to subdivision control. Justice Kirby reached the same conclusion as the other members of the court upon views of the test for liability which it is not open to me to follow, however attractive I find them. 104 Justice Callinan stated the principle and the existence of a duty of care in a rather strict way at 663-664 [320]-[321]: [320] I return to where I started in this section of my reasons, to the statement of Earl Cairns LC which requires that there be something in all of the circumstances, including of course the terms of the conferral of the powers, which requires that the power be coupled with a duty; or, as Hayne J put it in Brodie, "[something in] the whole range of circumstances relevant upon a question of statutory interpretation" (Brodie (2001) 206 CLR 512 at 633 [326]); or as Lord Hoffmann put it in Stovin v Wise, irrationality in an abstention from exercising the power (Stovin [1996] AC 923 at 954) or some other exceptional matter, or indicator of an intention to permit a person to sue. Unless these conditions are satisfied, in my opinion no relevant duty of care will arise.

[321] True it may be, that vulnerability, power, control, generality or particularity of the class, the resources of, and demands upon the authority, may each be, in a given case, a relevant circumstance, but none should, I think, of itself be decisive. Nor do I think it convenient or satisfactory to pose a test whether a particular function of an authority involves a core, or a non-core function, or relates to a matter of policy or executive action (Gummow J rejected such a distinction in Pyrenees Shire Council v Day (1998) 192 CLR 330 at 393-394 [180]-[182].) Not the only problem about such a test is the inevitable difficulty of distinguishing functions, and the need for statutory authorities to make a political assessment of priorities.

In Callinan J.'s opinion there was in the application of this test no liability in the Council - see 666 [327]. 105 As a generalisation, while the judgments in Graham Barclay Oysters give prominence to the question of control, they contain observations adverse to treating as conclusive the classification of powers into policy and operational powers and other classifications, the search for indications of statutory intention, and attempts to identify and apply the Court's concept of policy considerations: not only from being treated as conclusive, but even (with variations) from being accorded great importance. 106 The Trial Judge found (Red 55): However I find on the balance of probabilities, based upon principally the evidence of Mr Shirley that the Defendant breached the duty it owed the Plaintiff when it approved the construction of the pipeline that used both spigot and socket joints and bandaged joints without anchor blocks, when it knew or should have known that such construction on steep ground and adjacent to fill, could and would lead to pipeline movement resulting in holes, fractures and leakage from joints into the surrounding subsoil particularly at times of major rainfall events. In my view the risk was high as was the degree of probability of leakage at the level it did. For the Defendant to require spigot and socket joints, a ductile cast iron pipe and anchor blocks in the construction of the pipeline involved neither great expense or inconvenience to the council. 107 For reasons I have stated elsewhere, I am of the opinion that the appellant did not owe the respondent a duty of care in approving the technical requirements for the construction of the pipeline. But further, a decision whether concrete pipes and a specification in detail proposed by the applicant should be treated as sufficient in imposing a condition on subdivision approval is not a matter which can be rationally analysed in terms of the conformity with or departure from a reasonable standard of care. Decision is made under a statutory discretion, conferred on the appellant and not on anyone else, in particular not on any expert and not on the Court. To decide what standard of pipeline to require, implying decision on how much money and effort the subdivider should be required to incur, is a question of policy; demand too much and there may be no subdivision, demand too little and the work may be useless; be even-handed and consider what has been required of other subdividers. It is a matter for discretion whether or not to think through and make again for oneself all the decisions which have been made by the subdivider and its engineers about construction of the pipeline. For the Court to decide, in effect, what a reasonable local authority would do in the exercise of these discretionary powers, and whether the appellant's decision fell within the limits so decided, cannot be done if the discretionary nature of the power is recognised. In my opinion it was an error to base a decision on standard of care, as the Trial Judge did, on evidence of Mr Shirley on what would have been apparent to a competent drainage engineer reviewing the drawings. The statutory function was not given to a competent drainage engineer. The evidence about the standard of care did not relate to the conduct of a reasonable local authority exercising the statutory power; and I am unable to visualise what evidence could do that. 108 I have endeavoured to marshall and state the elements and circumstances which have led me to the view that there is no duty of care in the present case; conscious that I cannot claim that my exposition is orderly, or that it is cogently expressed. My judgment is that there was no duty of care in the exercise of its subdivision powers owed by the appellant to a class of persons including the respondent with respect to risks of slippage of fill following loss of lateral support from fill on neighbouring land which slumped because of saturation at its toe by water escaping from the pipeline in the easement. In my view the Trial Judge was in error in deciding that there was a duty of care, and that the appellant incurred liability to the respondent, and his decision should be reversed. 109 The Trial Judge addressed liability for acts or omissions after the approval process was concluded in terms only of negligence law, found there was a duty of care, and divided consideration of breach of duty of care into two heads: 1. a failure at the approval stage of the pipeline construction. 2. a failure to inspect and/or maintain and repair the stormwater drainage system to ensure that it did not leak through joints or fractures caused by downward movement of the pipe on the sloping terrain over time. 110 The Trial Judge disposed of the second subject, relating to breach of duty after the appellant became entitled to the easement, by these findings (Red 54): It was the Plaintiff's submission that as the approval authority for the pipeline's construction on a steep slope using concrete pipes without spigot and socket joints, throughout, or anchor blocks, the Defendant ought to have known that the pipeline would be subject to downhill creep and consequently joint openings and fractures and therefore should have instituted a regular system of inspection, including CCTV examination of the inside of the pipeline. It was submitted that the council's inspections only of service inlet pits and not the other pits was inadequate. It seems to me that the Plaintiff must fail on this aspect of breach as there was no evidence as to how frequently the pipeline should have been inspected or the cost of doing so. The evidence that landslip occurred on 1984 and 1985 on the boundary between No 12 and No 14 is not enough, in my view, to cause the Defendant to think they were caused by or related to leakage from the pipeline. Further in the absence of complaint about leaks in the pipeline or blockage there was no reason to inspect the pipeline and the system of responding to complaints as set out in EX S is reasonable. 111 The Trial Judge did not deal expressly with allegations of nuisance, and in view of other conclusions it was not necessary for him to do so. In her Cross Appeal filed on 10 August 2005 the respondent complained that the Trial Judge failed to find that the appellant was liable to her in nuisance. In her Amended Statement of Claim filed on 10 March 2004 the respondent alleged that the appellant was liable to her in nuisance (Red 7): 13B . By reason of : (a) the approval, construction and installation of the stormwater drainage system that would inevitably leak over time ; and

(b) the negligence of the Defendant pleaded in paragraphs 11, 12 and/or 13 hereof and its failure to construct, maintain, mend, repair and/or clean the defective drainage system ,

the Defendant created, caused and/or maintained a nuisance that resulted in the escape of subsurface water into the Plaintiff's property and the Plunkett property and the marginally stable land (the "nuisance"). 112 The negligence pleaded in para.11 in the Amended Statement of Claim related to the design and construction of the stormwater drainage system, in respects which related to the pipeline. All the acts of negligence alleged related to events which occurred before the appellant acquired the easement and became entitled to use the pipeline. Paragraph 12 alleges negligence in failures to inspect and maintain the stormwater drainage system, and the significant allegations relate to inspection and maintenance to ensure that the system did not leak through joints or fractures caused by movement downslope of the pipeline over time, and failure to ensure that the drain did not become liable to blockage. Paragraph 13 alleges negligence in allowing PVC house service connections from the Plunkett Street property to be constructed into the stormwater pipeline; there is no reason to give these allegations continuing significance. 113 Paragraphs 14 and 15 in the Amended Statement of Claim allege causation by negligence, and also by nuisance, of the landslide on Lot 7 and on Lot 8 and attribute causation to heavy rainfall, partial blockage by a piece of timber and leakage or escape of water from the pipeline onto marginally stable land. 114 In my opinion consideration of nuisance in the exercise or failure to exercise statutory powers is not involved on the present facts, and Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31 at [44] is not relevant to the present litigation. Senior counsel for the appellant referred to the passage in the leading judgment in Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 79 ALJR 1511 at 1514-1515 [16], to the effect that a public authority is not, without negligence on its part, liable for a nuisance attributable to the exercise of, or failure to exercise its statutory powers. In my view that passage and the cases there referred to are not relevant to the claim of nuisance now made against the appellant, which relates to its rights under private law relating to the easement, and not to exercise or failure to exercise statutory powers. 115 Written submissions on behalf of the respondent supported the claim of nuisance in these terms (Orange 43): 58. The Appellant is liable to Mrs Becker in nuisance, because water that was allowed to escape from the stormwater pipeline caused physical damage to and a substantial interference with her property. His Honour should have so found, as the inevitable consequence of the unchallenged findings of fact in relation to the cause of the landslide. 116 In oral submissions the respondent's counsel contended that the case in negligence was that the water that escaped from the pipeline caused physical damage and substantial interference to Lot 7. This submission was supported by referring to the Trial Judge's findings that the slippage of fill on Lot 7 was consequent upon slippage of material on Lot 8 and was directly caused by the unstable shear face near the boundary between the two lots after the landslip on Lot 7; and also findings (Red 43) which further dealt with how the slip on Lot 7 was caused by the slip on Lot 8, which created a near vertical face probably about 70 degrees which was totally unstable. Findings dealt with the effect of natural sub-surface seepage, and of saturation of the toe of the fill on Lot 8 which came from a seepage pond underneath Lot 8; and also with long-term seepage through the fill; and effectually excluded them as causes of the slump on Lot 7. Counsel also referred to the statement of conclusions in the Judgment (Red 44): Conclusion Having considered all the evidence, expert and lay, and taking into account the evidence of the highly experienced council officer Mr Sherrie, I have reached on the balance of probabilities the conclusion that the slump on No 12, the Plaintiff's dwelling was a direct result of the earlier slump on No 14 which in turn had been caused by a large volume of water turning the tip of the fill at the southern end of No 14 into mud, an inherently unstable soil form. 117 The respondent's counsel particularly relied on failure to inspect, repair and maintain the pipeline after 1985; the submission was to the effect that events up to then which came to the knowledge of the appellant and Mr Scott's report meant that the appellant should have known of the prospect of the escape of water which it would have been simple to discover by inspection, and should have rectified the open joints and fractures and holes before the escape of water produced slippage. Counsel contended that the law of which is to be applied appears from the speech of Lord Wright in Sedleigh-Denfield v O'Callaghan & Ors [1940] AC 880 at 904. 118 Nuisances take many forms: see Overseas Tankship (UK) Ltd v Miller Steamship Co. Pty Ltd (The Wagon Mound (No.2)) (1967) 1 AC 617, and the facts which gave rise to liability in Sedleigh-Denfield's case are quite unlike the present facts. In that case the flooding and nuisance were caused by works which had been constructed on the defendants' land by the County Council without the defendants' knowledge; the County Council was a trespasser in this respect. It was held that after some years the defendants must be taken to have had knowledge of the existence of an ungrated pipe on their land which created a flooding risk. Sedleigh-Denfield was the occasion for several close examinations of case law relating to flooding risks and the law of nuisance, and observations made by Lord Wright at 904-905 have importance extending well beyond their application to the facts then under consideration. His Lordship said (at 904-905): The gist of the present action; however, is the unreasonable and unjustified interference by the defendants in the user of their land with the plaintiff's right to enjoy his property. Negligence, moreover, is not a necessary condition of a claim for nuisance. What is done may be done deliberately, and in good faith, and in a genuine belief that it is justified. Negligence here is not an independent cause of action, but is ancillary to the actual cause of action, which is nuisance. ...

The liability for a nuisance is not, at least in modern law, a strict or absolute liability. If the defendant, by himself or those for whom he is responsible, has created what constitutes a nuisance, and if it causes damage, the difficulty now being considered does not arise; but he may have taken over the nuisance, ready made as it were, when he acquired the property, or the nuisance may be due to a latent defect or to the act of a trespasser or stranger. Then he is not liable unless he continued or adopted the nuisance, or, more accurately, did not without undue delay remedy it when he became aware of it, or with ordinary and reasonable care should have become aware of it. This rule seems to be in accordance with good sense and convenience. The responsibility which attaches to the occupier because he has possession and control of the property cannot logically be limited to the mere creation of the nuisance. It should extend to his conduct if, with knowledge, he leaves the nuisance on his land. The same is true if the nuisance was such that, with ordinary care in the management of his property, he should have realised the risk of its existence. ...

if the defendant did not create the nuisance, he must, if he is to be held responsible, have continued it, which I think means simply neglected to remedy it when he became, or should have become, aware of it. 119 Although there may be some exceptions, fault of some kind is now usually necessary for liability in nuisance; see The Wagon Mound (No 2) at 639, and Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282 at 284. Humphries v Cousins (1877) 2 CPD 239, where the defendant was held liable for escape from a drain which began under his premises, passed under other houses and received their drainage and then returned under the plaintiff's premises, although he did not know of the existence of the drain under the plaintiff's premises, should probably be attributed to the principle in Rylands v Fletcher (1868) LR3HL 330, although that principle was not mentioned in Humphries v Cousins. The strict liability which was imposed in Humphries v Cousins is probably no longer good law, having regard to the absorption of the rule in Rylands v Fletcher by the principles of negligence in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520. 120 The facts of the present case are distant from Sedleigh-Denfield as there is no element in any way like the intervention of a trespasser, and the appellant's part in the approval process gave it means of knowledge of the existence of the drainage works including the pipeline, from a time before the appellant acquired its interest. Attention should not be limited to the pipeline and the easement, as the appellant also became the owner of Myuna Place and of the system of pipes and pits for the collection of drainage water from that road, and the easement and the pipeline in it were part of the system by which drainage water was concentrated and carried off from the road. 121 In my opinion whether the appellant is liable depends on whether, when the system became a nuisance, the appellant did not remedy it without undue delay when the appellant became aware of the nuisance, or with ordinary and reasonable care should have become aware of it. Of what was it necessary that the appellant should become aware? There was in my opinion a nuisance when the pipeline and the easement came to be in a defective state so that the escape of water was an unreasonable and unjustified interference with the rights of nearby landowners to enjoy their property. This was not the time when the escape of water caused damage; it was (stating the matter with admitted circularities) the time when with ordinary and reasonable care, the appellant should have become aware of the risk that would happen. What the respondent's counsel principally relied upon to show this knowledge or imputed knowledge, and what he complained that the Trial Judge did not make findings about in relation to nuisance, was the evidence and information before the Council leading up to Mr Scott's report in 1985. 122 Exhibit S is a letter dated 18 October 2004 containing admissions by the appellant (BLUE 2/385): 1. The Council has no record and no knowledge of any maintenance or repair work being carried out on the 'pipeline' from its construction to date. 2. Up until the year 2000, the Council inspected the 'stormwater drainage system' in response to complaints or requests only. 3. Up until the year 2000, the Council did not have a policy for inspection of its stormwater drainage systems. 4. Up until the year 2000, the Council's system of inspection, maintenance and repair of its stormwater drainage systems was one of response to complaints or requests only. 5. From the year 2000 Council's policy was to carry out annual inspections of its stormwater drainage systems excepting those parts of the system within easements affecting private property. 123 Mr Sherrie, the appellant's Manager of Civil Works, gave evidence that up until the year 2000 the drainage system was generally maintained as a result of public request or complaint. After a decision in 1983 to implement a systematic drainage maintenance system the practice was adopted of conducting inspections of service pits; not inspections of pipelines. The appellant adopted another policy in the year 2000 but this did not extend to inspections of parts of drainage systems within easements affecting private property. 124 The respondent's counsel complained that the Trial Judge's consideration on the question of breach of duty after the creation of the easement was incomplete and inadequate. In support of these contentions Counsel did not refer to any evidence which tended to show what was practice or good practice in inspection by municipal authorities of pipelines in relevant circumstances. Counsel pointed to evidence which showed, clearly, that inspections could have been carried out relatively easily, earlier when staff could have gained access to the pits and inspected the pipelines with torches and mirrors on poles, and even more readily later when television camera inspection, referred to as CCTV, became readily available. It was contended that it should have been found that the cost of inspecting the pipeline was minimal. This contention has no force because it was not related by evidence or in any way to any estimate or understanding of the cost of inspecting pipelines over which the respondent had easements, or of the availability of funds and resources. Counsel also referred to the policy, from the year 2000, to carry out annual inspections, impliedly shown by the admissions in Exhibit S; I do not think that this has any force because, as the terms of para.5 of the admissions show, that did not extend to parts of the system within easements affecting private property. Counsel also cited my observations in Turnbull v Alm [2004] NSWCA 173 at [60] (Bryson JA) which related to annual inspection of the state of the footpath on private property within a shopping centre. Those observations related to the facts of that case and were assisted by much judicial experience relating to practices in maintaining footpaths, and in my opinion they do not have any present importance. 125 Counsel for the respondent also referred to information which came to the appellant's officers as a result of earlier complaints and landslips, leading up to Mr Scott's report. In April 1977 the appellant was informed by Mr K. Mason, who owned adjoining property to the west, of a number of complaints relating to the impact on his property of work in construction of the pipeline. Mr Mason's solicitor also narrated complaints and stated that the complaints were made in objection to granting approval for the subdivision. Counsel also referred to the appellant's consideration of an application by Mr Le Claire in 1979 for building approval for his proposed dwelling on Lot 8; which became house No. 14 and was later sold to Mr Plunkett. The respondent's consideration of the building application shows advertence to the need to protect its interest in the drainage easements. In my opinion these matters are not of any continuing significance. 126 In 1982 officers of the appellant considered a complaint by the respondent (whose surname then was Franklin) that the fill on the adjoining land, that is on Lot 8, was not stable. Records of consideration by officers of this complaint show knowledge that the fill had been placed on both lots. After the inspection was made a responsible officer decided to take no further action. 127 In 1984 there was some further complaint in which it was claimed that there was unauthorised and unstable fill, and that a load of spoil had been dumped on the top flat section of Lot 8. The appellant's file also showed one or two complaints in August 1984 relating to unauthorised fill, and also to surface and groundwater nuisance. An officer advised Mr Plunkett and the respondent to seek the services of a practising structural engineer to design a method of supporting the fill area. The appellant's file also shows that Mr and Mrs Plunkett wrote to the appellant at length complaining of the effects of heavy downpours on 24 and 25 March 1984 on the fill on Lot 7, and about further events on 27 July 1984. The burden of the complaint seems to have been that instability of fill on Lot 7 had adverse effects on the Plunketts' Lot 8, and that the respondent bore some responsibility. There were further communications and inspection, and an officer formed the view that the slope area between the two lots was unstable. The respondent engaged Mr W.J. Scott, a site investigation engineer practising in geo-mechanics and foundation engineering, to report. 128 Mr Scott's report dated 10 October 1985 (Blue 2/351) reported on his inspection and stated his views. He said (Blue 2/351): "The purpose of the inspection was to enable an assessment of the stability of the fill zone on the southern, downslope side of the existing house. Comment on the future management of slope stability and the effect that this might have on neighbouring property was also requested." He then reported his observations and views on the geology of the area, and on the characteristics of the fill, directing his attention to the respondent's house on Lot 7. When commenting on the fill zone and dealing with stability characteristics he did not refer to the pipeline in the easement or to possibility of the escape of water from it. He recommended (Blue 2/352) "site management procedures to improve the overall stability regime." These recommendations dealt with drainage - (Blue 2/352) "Probably the most important measure is drainage improvement" - and discussed drainage on the upper fill zone to intercept up-slope run-off, and some measure, to be negotiated with the owner of Lot 8, to deal with stormwater discharge from Lot 8. He also recommended measures dealing with vegetation and its reinforcing effect, and the creation of localised rock-wall supporting terraces on the slope. After discussing the material deposited on Lot 8 Mr Scott expressed this view (Blue 2/352): "However, since the general direction of the slope is to the south it is considered that no significant adverse effect is created by the fill zone of one property on the other." 129 Mr Scott recommended maintaining drainage control on a continuing basis. He observed that natural subsurface drainage through joints in the rock was difficult to intercept, but also recommended that drainage measures, related to drainage on the surface of and within the fill material, should be installed. He said (Blue 2/353): "Further 'creep movement' in the fill could fracture waste or drainage pipes embedded in the fill. These should be checked from time to time to ensure that no water is being lost into the fill." Mr Scott did not discuss, or mention at all, the pipeline in the easement or the possibility of the escape of water from it. The drainage which he discussed and the measures which he recommended related to drainage on the surface of or embedded in the fill material. 130 The appellant was given a copy of Mr Scott's report dated 10 October 1985 (Blue 2/351). A responsible officer reviewed the information available at length but concluded that the problem was one between the two property owners. This report (Blue 2/350) and other indications show that it was well known to officers of the appellant that both properties had substantial fill on them. 131 This material in the appellant's files shows that officers were aware of instability in the fill on Lot 7, and also possibly on Lot 8, of complaints about interaction between the deposits of fill on these lots, of reports of damage to stairs, pathways and garden drainage consequent on this instability; and of vague claims that the appellant may have incurred some liability. However there was no suggestion of involvement of the pipeline in the easement or of the escape of water from that pipeline in any of the matters under complaint. 132 It was contended that knowledge of Mr Scott's report should have alerted the appellant's officers to the possibility of creep movement and fracture in the pipeline in the easement, which was also, at least to a large extent and (it may be) wholly covered by fill material. In my opinion there is no substance in these contentions; Mr Scott's observations related almost entirely to the fill material on Lot 7, and to garden drainage lines which are extremely unlikely to have been constructed of materials or with techniques in any way like those used in the construction of the pipeline and the easement. Concrete pipes of diameter 300mm or more, with inspection pits, are of a different technology, in a different place, to the drainage observed on by Mr Scott. The material in evidence shows no reason why the appellant should have thought that the matters under complaint and investigation involved the pipeline and the easement in any way; and indeed there is no reason now to think that the pipeline was involved in any way. The respondent's proposition was to the effect that knowledge acquired by officers of complaints in the period 1982 to 1985, and of Mr Scott's report, should have shown the appellant, if it considered matters on a reasonable basis, that there ought to be a regular regime of inspection of the pipeline which it was entitled to use: this proposition has no real substance and should not be accepted. 133 A brief note in the appellant's records made on 16 April 1996 (Blue 2/386) indicates or seems to indicate that a ratepayer living at 38 Little Turriel Bay Road Lilli Pillli, immediately West of Lot 8, and at an earlier time occupied by Mr K. Mason, reported that there was water pollution and "Drain blocked from sand from building site. Water builds up and lids keep coming off the drain and flood complainant's property". The location of the problem was indicated as "14 Myuna Place" that is, Lot 8. The record says that action was finalised on or by 9 May 1996. There is next to no information in this record and the building site is not identified. The action taken as a result is not recorded. Blockage of the drain from sand from a building site and flooding from lids (which must be lids on inspection pits) on to the land to the West is plainly an altogether different problem to the escape of water which gave rise to this litigation. 134 The appellant's knowledge that there had been movements in the fill, referred to by the Trial Judge as landslides (Red 49P-T), did not bring with it any duty of care or other obligation relating to the pipeline; the earth movements of which it knew had no relation to escape of water from the pipeline, and no other relation to the pipeline, and the respondent's land was distant from the pipeline, separated by Lot 8 and the fill on Lot 8. What happened to the fill on Lot 7 was not the responsibility of the appellant, which was involved because of complaints from the owners of Lots 8 and 7, in substance complaints about each other, which in so far as they directed against the appellant had no clear basis. The respondent was not able to enhance or to alter the appellant's responsibility by bringing or keeping fill in her rear yard in an unstable condition, or in a condition in which its stability depended on lateral support from other fill. This was none of the appellant's business. 135 The Trial Judge spoke of the appellant as "the occupier/beneficiary of the pipeline". This is not an accurate or adequate statement of the appellant's position. The appellant's position was that it was the dominant owner of the easement; it was not the owner of the servient land, that is, the strip which was subject to the easement, but had rights, related closely to use of the pipeline, to go on the land or (it might be said) not to be unreasonably obstructed as it went on the land to carry out various acts in aid of its easement. The easement brought with it no obligation of the appellant, to the owner of Lot 8 or to anybody else, to go on to the easement or to do anything there. In no sense was the appellant the occupier of the servient land, or of the pipeline. 136 The Trial Judge's conclusion that the appellant should not be found to be negligent in respect of failure to inspect or maintain and repair the stormwater drainage system to ensure that it did not leak was correctly based on there being no evidence as to how frequently the pipeline should have been inspected or the cost of doing so, and should not be disturbed. In the law of nuisance as it operates in this case, negligence is a necessary element: for similar reasons the appellant was not negligent and is not liable in nuisance. Indeed there was a need for the respondent to go further than the proofs which the Trial Judge mentioned: even if inspections should have been carried out, it was necessary to show that an inspection would probably have revealed the need for some maintenance work or repair and that if that maintenance work or repair had been carried out the escape of water would not have occurred. Compare Swain v Waverley Municipal Council [2005] 79 ALJR 565 at 587 [100]-[102] McHugh J and cases there referred to. 137 A further matter is that I am of the view that the interest of the respondent for which she claimed protection under the law of negligence and the law of nuisance is beyond their range. Foreseeable risk of harm to her property interest in the fill deposit on Lot 7 is beyond the protection of negligence law and nuisance law because her property interest depended upon lateral support from unstable fill material on Lot 8 to which she was not entitled; she was not acting reasonably in continuing in existence a deposit of fill which depended on that lateral support, and damage to her interest is beyond the range of the reasonably foreseeable. Even if it were shown that the escape of water from the pipeline and disturbance by it of the stability of the fill on Lot 8 was a nuisance for which the owner of Lot 8 was entitled to remedy (and I am inclined to think that it was not), the respondent would not have any remedy in respect of that nuisance for similar reasons: it was not the tort of nuisance committed against her. 138 In my opinion the Court of Appeal should order:

(2) The orders of the District Court of 9 March 2005 are set aside, and in lieu thereof order: Give judgment for the defendant with costs.

(4) The Court grants to the respondent an indemnity certificate under s.6 of the Suitors' Fund Act 1951.

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