Akwa Pty Ltd v Caltex Australia Petroleum Pty Ltd
[2017] WASC 16
•3 FEBRUARY 2017
AKWA PTY LTD -v- CALTEX AUSTRALIA PETROLEUM PTY LTD [2017] WASC 16
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WASC 16 | |
| Case No: | CIV:1025/2016 | 12 DECEMBER 2016 | |
| Coram: | MARTINO J | 3/02/17 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | AKWA PTY LTD CALTEX AUSTRALIA PETROLEUM PTY LTD |
Catchwords: | Application for trial of preliminary issues |
Legislation: | Contaminated Sites Act 2003 (WA) Rules of the Supreme Court 1971 (WA) |
Case References: | Administration of the Territory of Papua New Guinea v Daera Guba (1973) 130 CLR 353 Blair & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464 Lansdale Pty Ltd v Moore [2009] WASCA 176 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
CALTEX AUSTRALIA PETROLEUM PTY LTD
Defendant
Catchwords:
Application for trial of preliminary issues
Legislation:
Contaminated Sites Act 2003 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr N D C Dillon
Defendant : Mr D H Solomon
Solicitors:
Plaintiff : Morgan Alteruthemeyer Legal Group
Defendant : Solomon Brothers
Case(s) referred to in judgment(s):
Administration of the Territory of Papua New Guinea v Daera Guba (1973) 130 CLR 353
Blair & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464
Lansdale Pty Ltd v Moore [2009] WASCA 176
1 MARTINO J: The plaintiff, AKWA, applies pursuant to O 31 r 2 of the Rules of the Supreme Court 1971 (WA)(RSC) for determination of questions of law before trial or, alternatively, pursuant to O 32 r 4 RSC for the separate trial of issues. The application is opposed by the defendant, Caltex.
2 The application is dated 26 April 2016 but was not filed until 24 October 2016. It was foreshadowed at case management hearings before it was filed. On 19 October 2016 Registrar C Boyle referred the foreshadowed application to a judge. On 1 December 2016 my Associate wrote by email to the solicitors for the parties informing them that at the hearing on 12 December 2016 the issues to be canvassed would be whether the questions raised in the application should be determined before trial and, if so, what directions should be made for the hearing of the preliminary questions.
3 In support of the application AKWA has filed an affidavit of its director Doron Berger made on 5 September 2016.
The pleadings and the issues between the parties in this action
4 AKWA has filed a writ of summons dated 8 January 2016 endorsed with a statement of claim, further and better particulars of the statement of claim dated 29 March 2016, supplementary further and better particulars of the statement of claim dated 30 September 2016 and a reply dated 5 May 2016. Caltex has filed a defence dated 19 February 2016.
5 The parties agree that on 19 September 1996 the registered proprietor of land at Naval Base leased that land to Caltex on terms contained in a lease agreement. AKWA became the registered proprietor of the land on 9 November 2000. Caltex did not vacate the land when the term of the lease expired.
6 AKWA pleads that Caltex purported to yield up the land on 30 September 2010 but that by reason of remediation works it is carrying out on the land it continues to occupy the land pursuant to holding over provisions contained in the lease. Caltex denies that it continues to occupy the land and pleads that it vacated the land on 30 September 2010.
The statement of claim and its particulars
7 In par 4 of the statement of claim AKWA pleads that the lease contained terms and conditions to the following effect:
1. the term 'Leased Premises' in the lease meant the building constructed on the land which was known as the Ampol Service Station together with the fixtures, fittings, plant, machinery and equipment of Caltex forming part of or annexed to or affixed [to the land] (4.1);
2. the lease term was for the period 19 September 1996 to 18 September 2008 (4.3);
3. the lease provided that if Caltex continued to occupy the land after the expiration of the term of the lease it did so as a monthly tenant on the terms and conditions contained in the lease (4.4);
4. under an indemnity provision contained in cl 12.9 of the lease Caltex was required to indemnify AKWA and hold AKWA indemnified from all actions, claims, demands, losses, damages, costs and expenses which AKWA may sustain or incur arising from:
(a) loss or damage caused to any property as a result of any breach of the lease by Caltex; and
(b) the overflow, leakage or escape of any harmful agent from the leased premises caused or contributed to by any act or 'admission' (sic - omission) by Caltex, its servants, agents or sub-tenants (4.5);
5. that under Item 4 of the second schedule to the lease Caltex was required:
i. not to do any act or omission that may cause or contribute to the cause of any pollution or contamination of the leased premises or the soil or any ground beneath the leased premises (4.7);
ii. to use its best endeavours to ensure that all materials should be delivered, stored, used and disposed of in such manner as did not cause pollution or contamination to the leased premises or the soil beneath the leased premises (4.8);
iii. during the term of the lease to comply with statutory requirements and any proper orders, notices or requisitions that may be issued by any relevant authority in relation to the possible pollution or contamination of the leased premises or the soil beneath the leased premises (4.9(a));
iv. after the expiry of the lease term to rehabilitate the soil beneath the leased premises to eliminate any pollution or contamination in accordance with any applicable legislative standards to the extent necessary as recommended by an independent environmental consultant (4.9(b)); and
v. to indemnify and keep AKWA indemnified in respect of any claims, liabilities, costs, expenses or demands which may arise in relation to such contamination or any remedies or rehabilitation consequent upon it (4.9(c)).
9 In par 10 AKWA pleads that the land was and remains contaminated, in breach of Caltex' obligations in the lease not to pollute or contaminate the leased premises and to use its best endeavours to ensure that materials were delivered, stored, used and disposed of so as not to cause pollution or contamination to the leased premises as a result of acts or omissions of Caltex, its servants, agents or subtenants. Particulars of that plea are provided in the paragraph.
10 The particulars of the causation of the contamination provided are that the contamination was caused by acts or omissions of Caltex in:
i. failing to make tight pipe work connections at the bowsers and storage tanks on the premises;
ii. continuing to use or omitting to stop using or to repair that pipe work; and
iii. that as a result of the contamination occurring 'the facts speak for themselves'.
11 Further particulars of the pleaded failure to make the pipe work tight are contained in the supplementary further and better particulars dated 30 September 2016. AKWA pleads in those particulars that Caltex' acts and omissions are set out in a notice of a Classification of a Known or Suspected Contaminated Site dated 17 February 2011 given under s 15 of the Contaminated Sites Act 2003 (WA), attachment 5 dated 28 June 2011 to a letter from the Department of Environment and Conservation to the Office of the Contaminated Sites Committee dated 17 April 2012 and a notice under s 39 of the Contaminated Sites Act dated 15 June 2015.
12 The particulars of the contamination provided in par 10 are that there are hydrocarbons in the land's soil and groundwater and that there are naphthalene, polycyclic aromic hydrocarbons, benzene, toluene, ethylbenzene and xylenes at levels above 'Ecological Investigation Levels and/or Health Based Investigation Levels' in the land's soil.
13 In par 11 of the statement of claim AKWA pleads that as a result of the contamination of the land pleaded in par 10:
1. on 17 February 2011 the Chief Executive Officer of the Contaminated Sites Committee, acting pursuant to s 15 of the Contaminated Sites Act gave AKWA notice that the land was classified 'contaminated - remediation required' (11.1);
2. on 16 June 2011 the Contaminated Sites Committee caused the land's title to be subject of a memorial stating 'contaminated - remediation required'(11.2);
3. on 15 July 2011 AKWA requested Caltex to remediate the land so that the application could be made to the Contaminated Sites Committee for the cancellation of the classification and the removal of the memorial (11.3), which Caltex refused to do (11.4);
4. on 6 September 2011 AKWA requested that the Contaminated Sites Committee make a decision under s 36(2)(a) of the Contaminated Sites Act as to who was responsible to remediate the land (11.5);
5. on 23 September 2014 the Contaminated Sites Committee acting pursuant to s 37 of the Contaminated Sites Act and following receipt of and consideration of substantive submissions by affected parties issued an initial draft notice of its proposed decision regarding responsibility for remediation of the land (11.6);
6. on 8 December 2014 the Contaminated Sites Committee acting pursuant to s 37 of the Contaminated Sites Act and following receipt of further submissions by affected parties issued a final draft notice of its proposed decision regarding responsibility for remediation of the land (11.7);
7. on 15 June 2015 the Contaminated Sites Committee acting pursuant to s 39 of the Contaminated Sites Act gave notice of its decision as to who was responsible for remediating the land and allocated to Caltex 95% of the responsibility for that remediation (11.8); and
8. in August 2015, to fulfil the obligation to remediate the land as required under the notice of 15 June 2015, Caltex gave notice that it had or would engage a contractor to enter onto the land, assess or re-assess the contamination, undertake extraction of the soil for analysis and monitoring, undertake necessary remedial work and seek to have the land reclassified and that those works were to be completed, subject to contingencies, by June 2017 (11.9).
14 In the supplementary further and better particulars 30 September 2016 AKWA identifies the affected parties who provided submissions to the Contaminated Sites Committee as being those parties identified as 'relevant parties' in par 6 of a notice delivered on 27 May 2015 by the Contaminated Sites Committee pursuant to s 39 of the Contaminated Sites Act.
15 The remaining paragraphs of the statement of claim concern the relief to which AKWA contends that it is entitled. In par 12 it pleads that as a result of the contamination of the land, the notices issued by the Contaminated Sites Committee and the work being undertaken by Caltex, while the land remains contaminated Caltex continues to occupy the land pursuant to the holding over provisions in the lease, so that Caltex' purported yielding up of the land is ineffective and Caltex is liable to pay rent and outgoings in accordance with the holding over provisions of the lease.
16 In par 13 it pleads that as a result of the contamination of the land and the notices issued by the Contaminated Sites Committee AKWA has suffered loss and damage and is entitled to an indemnity for that loss and damage from Caltex under the provisions of the lease. That loss and damage is particularised as being that AKWA has been unable to lease the land, to develop the land or to sell the land and that it has incurred costs and expenses in seeking a decision of the Contaminated Sites Committee as to who was responsible for the remediation of the land. In its supplementary further and better particulars dated 30 September 2016 AKWA stated that it 'no longer pressed' its claim that it is unable to sell the land.
17 In par 14 AKWA pleads that at the time that Caltex purported to yield up the land on 30 September 2010 the land was contaminated, that in purporting to yield up the land when it was contaminated Caltex was in breach of its obligations under the lease to rehabilitate the land in accordance with applicable legislative standards and that, as a result, AKWA has suffered the loss particularised in par 13. In the supplementary further and better particulars dated 30 September 2016 the plaintiff particularises the pleaded applicable legislative standards as being:
i. the Environmental Protection Act 1986 (WA);
ii. National Environment Protection Measure (1999);
iii. National Environment (Assessment of Site Contamination) Protection Measure (1999) - May 2013;
iv. the Contaminated Sites Act;
v. the Contaminated Sites Regulations 2006 (WA);
vi. Department of Environmental Protection - Contaminated Sites Management Series - Assessment Levels for Soil, Sediment and Water (November 2003);
vii. Department of Environment and Conservation - Contaminated Sites Management Series - Assessment Levels for Soil, Sediment and Water (February 2010); and
viii. Department of Environment and Conservation - Assessment and Management of Contaminated Sites (February 2014).
18 In par 15 AKWA plead that in breach of its obligation in the lease to comply with statutory requirements and any proper orders, notices or requisitions in relation to the pollution or contamination of the leased premises Caltex has contaminated the land and that, as a result, AKWA has suffered the loss particularised in par 13.
The defence
19 As I have noted Caltex denies that it continues to occupy the land. It pleads in par 3.2 of the defence that on 31 August 2010 it gave one month's notice terminating the monthly tenancy and that on 30 September 2010 it terminated its monthly tenancy by yielding up possession of the leased premises to AKWA, which AKWA accepted.
20 Caltex denies that it breached obligations in the lease and pleads that:
i. prior to Caltex commencing occupation the land was occupied by Shell Kwinana Service Station from on or about 19 September 1988 under an earlier lease dated 29 September 1988 (4.2.1);
ii. in or about 1998 Caltex entered into a franchise agreement with Denwin Pty Ltd granting possession of the land to the Denwin for one year commencing on 18 September 1998 (4.2.2);
iii. in or about 2000 Caltex entered into a franchise agreement with Glen Robert Grant granting possession of the land to Mr Grant for a five year term commencing on 22 November 2000 (4.2.3);
iv. in or about 2002 Caltex entered into a franchise agreement with Tranquillity (Australia) Pty Ltd and Lamcorn Pty Ltd granting possession of the land to Tranquillity (Australia) and Lamcorn for a five year term commencing on 5 September 2002 (4.2.4);
v. in or about 2009 it engaged JFTA Pty Ltd to remove the underground fuel tanks (4.2.5); and
vi. each of those persons is or may be a concurrent wrongdoer in relation to AKWA's claims (4.2.6).
21 Caltex also pleads that in or about 2009 it engaged Parsons Brinckerhoff Australia Pty Ltd to undertake soil testing of the soil beneath the leased premises for the purposes of decommissioning those premises, that it rehabilitated the soil in accordance with Parsons Brinckerhoff Australia's recommendations, that Parsons Brinckerhoff Australia provided an opinion that following that rehabilitation the land was suitable for continued petroleum use and that Caltex thereby complied with its obligations under the lease to rehabilitate the land (4.2.7).
The reply
22 In its reply AKWA pleads in pars 2.2, 3, 4, 5, 6, 7, 8 and 9 that Caltex is estopped from challenging:
i. that on 17 February 2011 the Chief Executive Officer of the Contaminated Sites Committee, acting pursuant to s 15 of the Contaminated Sites Act classified the land as 'contaminated - remediation required';
ii. that on 15 June 2015 the Contaminated Sites Committee made a decision as to who was responsible for remediating the land and allocated to Caltex 95% of the responsibility for that remediation; and
iii. the facts and matters upon which each of those decisions was founded.
The application
23 By its application AKWA applies for the following orders:
1 Pursuant to Order 31 Rule 2 the questions of law set out below be determined for the purpose of these proceedings and be subject to declarations.
1.1 Given the Land the subject of these proceedings was classified by the Chief Executive Officer of the Department of Environment and Conservation's notice dated 17 February 2011 issued pursuant to s 15 of the Contaminated Sites Act 2003 and served on the defendant and plaintiff, are the parties estopped from challenging the classification or any facts or matters upon which that classification was founded?
1.2 Given the Land the subject of these proceedings was the subject of a decision by the Contaminated Sites Committee given by notice dated 15 June 2015 issued pursuant to s 39 of the Contaminated Sites Act 2003 and served on the defendant and plaintiffs in respect of responsibility for remediation, are the parties estopped from challenging the decision and any facts or matters upon which the decision was founded?
2 Alternatively, pursuant to Order 32 Rule 4 the issues referred to in paragraphs 1.1 and 1.2 above be tried separately from any other questions or issues in these proceedings.
24 The grounds of the application are:
1 Acting pursuant to s 15 of the Contaminated Sites Act the Department of Environment and Conservation issued a notice dated 17 February 2011, which notice was served on both the defendant and the plaintiff, giving notice of a specific classification of the land the subject of these proceedings and of the facts and matters that founded that classification. Neither the defendant nor plaintiff appealed from the classification.
2 Acting pursuant to s 39 of the Contaminated Sites Act the Contaminated Sites Committee issued a notice dated 15 June 2015 to both the defendant and the plaintiff of the Committee's decision of the parties responsible for the remediation (including the defendant as to 95%) of the subject land and of the facts and matters that founded that decision. Neither the defendant nor the plaintiff appealed against the Committee's decision.
3 In the premises, both the defendant and the plaintiff are estopped from challenging or contesting the said classification or facts or matters upon which the classification is founded and are further estopped from challenging or contesting the said decision on responsibility for remediation or the facts or matters upon which that decision is founded.
The affidavit of Mr Berger
25 The affidavit of Doron Berger made on 5 September 2016 has attached to it correspondence between the parties, their solicitors and the Contaminated Sites Committee including submissions and notices. Included in those attachments is a copy of the notice delivered on 27 May 2015 by the Contaminated Sites Committee which is referred to in AKWA's supplementary further and better particulars dated 30 September 2016. Paragraph 6 of that notice is in the following terms:
6. The relevant parties include:
i. AKWA Pty Ltd (AKWA) (the Applicant, owner of the site);
ii. Caltex Australia Petroleum Pty Ltd (Caltex) (a previous lessee and operator of the site);
iii. Phillip Gordon Hume Hooper (Phillip Hooper) (a previous owner of the site);
iv. Inawina Nominees Pty Ltd (Inawina) (a previous owner of the site);
v. Viva Energy Australia Ltd (formerly The Shell Company of Australia Ltd) (the service station operating on Lot 2 was known as 'Shell Kwinana' for a period before 1989);
vi. Denwin Pty Ltd (Denwin) (a previous franchisee);
vii. DBNGP (WA) Transmission-Pty Limited (DBNGP) (owner and operator of belowground gas transmission line which intersects the site);
viii. City of Kwinana (the City) (local government authority with care, management and control of the road reserve adjacent to the site);
ix. Glenn Robert Grant (Glenn Grant) (a previous franchisee);
x. Tranquility (Australia) Pty Ltd (Tranquility) (a previous franchisee);
xi. Lamcorn Pty Ltd (Lamcorn) (a previous franchisee);
xii. Kevan Charles Grant and Camille Chantel Grant (the Grants) (previous site operator/agent).
26 Order 31 r 2 RSC enables the court to order that a question of law be determined before any evidence is given. Order 32 r 4 RSC enables the court to order that a question or issue of law or fact or partly law and partly of fact arising in an action be tried separately from any other question or issue.
27 In deciding whether to make such an order the starting point is that ordinarily the trial of an action should include all issues arising in the action. The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation and that once the course of determining preliminary issues is embarked upon it may be difficult and even impossible to retreat. Experience has shown that the attraction of the separate trial of issues is often illusory. It is a course that can cause the very delay, additional expense and uncertainty of outcome it was intended to avoid. An application for the separation of issues is therefore to be approached with some caution. An order for the trial of preliminary issues should only be made where its utility, economy and fairness to the parties is clearly made out: Lansdale Pty Ltd v Moore [2009] WASCA 176 [20] - [21] (Newnes JA).
The Contaminated Sites Act 2003 (WA)
28 The object of the Contaminated Sites Act is to protect human health, the environment and environmental values by providing for the identification, recording, management and remediation of contaminated sites having regard to the polluter pays principle, the principle of full life cycle costs and the principle of waste minimisation: s 8. Contaminated in relation to land, water or a site means having a substance present on that land, water or site at above background concentrations that presents, or has the potential to present, a risk of harm to human health, the environment or any environmental value: s 4(1).
29 Nothing in the Act affects any right a person has at law to prevent, control or abate contamination or to obtain damages: s 9(4).
30 Under s 13 of the Act the CEO is to classify a site when required to do so under the Act and may do so at any other time: s 13(1). The CEO may classify a site more than once and a site is classified as of the classification most recently conferred on it: s 13(2). The classification is to be as of the classification set out in the first column of sch 1 to the Act which corresponds, in the CEO's opinion, on reasonable grounds, to the criterion that applies to the site set out opposite the classification in the second column of the schedule: s 13(3). The classifications in the first column of the schedule are: 'Report not substantiated'; 'Possibly contaminated - investigation required'; 'Not contaminated - unrestricted use'; 'Contaminated - restricted use'; 'Remediated for restricted use'; 'Contaminated - remediation required'; and 'Decontaminated'.
31 Before classifying a site the CEO is to consult with the CEO of the Health Department and may seek comments from any public authority or any person which or has, in the opinion of the CEO, a direct interest in the classification of the site: s 13(5).
32 As soon as practicable after a site is classified, and in any event not later than 10 days after the site is classified, the CEO is to cause written notice of the classification to be given to each owner of the site, an occupier of the site, any relevant public authority, any other person whom, in the opinion of the CEO, there is particular reason to notify, a person who made a relevant report to the CEO under s 11 or s 12 and, in respect of a site classified as contaminated - remediation required and each person who, in the opinion of the CEO, may be a person responsible for remediation of the site: s 15(1).
33 There is a right of appeal to the Contaminated Sites Committee against a classification of a site by the CEO: s 18 and s 79.
34 The only sites that are required to be remediated under the Act are sites classified as contaminated - remediation required: s 23.
35 The Contaminated Sites Committee is to make decisions as to who is responsible for remediation of a site and the extent to which a person is responsible for remediation: s 36(1). Before making a decision as to responsibility for remediation of a person the committee is to give written notice to that person of the matters specified in s 37. Notice of a decision as to responsibility for remediation is to be given in writing in accordance with s 39. There is a right of appeal on a question of law to the Supreme Court against a decision of the committee as to responsibility for remediation: s 39 and s 77.
Whether to order the trial of preliminary issues
36 There is unlikely to be any time spent at trial on whether the notices from the CEO and the Contaminated Sites Committee pleaded in the statement of claim were issued nor that the notices were effective in their terms in accordance with the Act. AKWA submits that its application 'will raise a discrete issue in relation to whether it is necessary for [AKWA] to prove matters which have already been established by the specialist body constituted by the Contaminated Sites Committee' [26] AKWA's outline of submissions.
37 Although counsel for AKWA did not concede that he was relying only upon issue estoppel and was not relying upon cause of action estoppel his submissions were addressed to issue estoppel. The difference between cause of action estoppel, also known as res judicata, and issue estoppel is that cause of action estoppel operates to merge a cause of action into a judgment so that the cause of action no longer has an independent existence whereas where issue estoppel operates an issue of fact or law that has been necessarily determined by a prior judgment cannot afterwards be litigated between the same parties: Blair & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464, 531 - 532 (Dixon J).
38 The question of whether estoppel operates from a prior determination is not answered by inquiring as to the extent to which the body which made the first determination exercised judicial functions or whether its status is judicial or administrative. The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question between the parties: Administration of the Territory of Papua New Guinea v Daera Guba (1973) 130 CLR 353, 453 (Gibbs J).
39 AKWA seeks a trial of preliminary issues as to whether Caltex is estopped from challenging the classification by the CEO and the remediation decision of the committee 'and any facts or matters upon which' that classification and that decision was based. What those facts and matters are is not specified in the application nor in the affidavit of Mr Berger. There has been no agreement between the parties as to what those facts and matters are.
40 Counsel for AKWA on the hearing of the application informed me that he could provide details as to what AKWA contends are those facts and matters. However it is unlikely that those matters could be agreed. The parties did not agree on those matters before the hearing before me. There was nothing I heard at the hearing which gave me any reason to be confident that the parties would agree on what those facts and matters were.
41 In my assessment there is likely to be significant controversy and time spent on what facts and matters that Caltex would be estopped from denying if estoppel does apply to the CEO's classification and the committee's decision. I can see no advantage in that time being spent before the trial of the action. I am not satisfied that the course proposed by AKWA will result in the saving of time or expense. I refuse the application.
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