Anderson v Ausgrid

[2015] NSWSC 1308

Supreme Court

New South Wales

Medium Neutral Citation:

Anderson v Ausgrid [2015] NSWSC 1308

Hearing dates:

31 August, 1 and 2 September 2015

Decision date:

09 September 2015

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

(1) Judgment for the plaintiffs in the sum of $819,676.50 plus pre-judgment interest to the date of entry of judgment, as agreed or determined by me.

 

(2) Direct the parties to notify my Associate of any agreed figure for interest or, failing agreement, the figure proposed by each party, and the contentions in support, within seven days.

 (3) Unless an application for a different order is made in writing to my Associate within seven days hereof, order the defendant to pay the plaintiffs’ costs of the proceedings.

Catchwords:

TORT – negligence – fire destroyed home – whether fire caused by defective installation of meter by defendant – inability to show precisely how fire started not fatal to discharge of plaintiffs’ onus – negligent installation of the meter was a reasonable and probable explanation for fire – unnecessary to exclude other possible explanations for known facts
PRACTICE AND PROCEDURE – defendant sought to rely on exclusion clause in supply contract – exclusion clause not pleaded – no application for leave to amend – reliance not permitted

Legislation Cited:

Civil Liability Act 2002 (NSW), ss 5B, 5C, 5D, 5E, 5O
Contracts Review Act 1980 (NSW)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)
Uniform Civil Procedure Rules 2005 (NSW), r 14.14

Cases Cited:

Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538
Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Curtis v Harden Shire Council [2014] NSWCA 314; 88 NSWLR 10
Fuller-Lyons v New South Wales [2015] HCA 31
Luxton v Vines (1952) 85 CLR 352
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Smith v Broken Hill Proprietary Co Ltd (1957) 97 CLR 337
Strong v Woolworths Ltd [2012] HCA 5; 246 CLR 182
Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720
Wallace v Kam [2013] HCA 19; 250 CLR 375

Category:

Principal judgment

Parties:

Justin Anderson (First Plaintiff)
Melissa Anderson (Second Plaintiff)
Ausgrid (Defendant)

Representation:

Counsel:
Ms T Berberian (First and Second Plaintiffs)
Ms JA Wright (Defendant)

  Solicitors:
Holman Webb Lawyers (Plaintiffs)
TressCox Lawyers (Defendant)

File Number(s):

2013/382517

Judgment

Introduction

1. Justin and Melissa Anderson (the plaintiffs) own and live in a residential house on a property in Phoenix Road, Black Hill in New South Wales (the Property). After Christmas in 2010 they went to Barrington Tops for a holiday. While they were away a fire started in or around the meter box on the Property which spread and caused substantial damage to the house. It is agreed that the damage suffered (including property damage and consequential losses such as alternative accommodation) amounted to $819,676.50 (the Agreed Figure).

2. About a month before the fire, Ausgrid (the defendant) had replaced one of the three meters in the meter box as it was faulty. The plaintiffs claim damages in the sum of the Agreed Figure from the defendant on the basis of alleged negligence and breach of contract, including breaches of terms implied by the Fair Trading Act 1987 (NSW) and the Trade Practices Act 1974 (Cth). Ultimately only the claim in negligence was pressed. The principal issue in the case was the cause of the fire.

3. A reference to the defendant in these reasons includes a reference to Ausgrid and its predecessors, including Energy Australia.

The Facts

The contractual relationship between the plaintiffs and the defendant

4. Because of the way the case was conducted it is not necessary to set out in any detail the terms of the applicable legislation, or of the connection or supply contracts between the plaintiffs and the defendant. It is sufficient to note that it was common ground that the defendant owned the individual meters inside the meter box (and was therefore responsible for defects within them) but did not own other electrical components with the meter box, or the cables or conduit leading to or coming from the meter box. The defendant also accepted that it was responsible for the installation of the replacement meter and therefore was responsible for any negligence associated with such installation.

The installation of the meters and the electrical wiring on the Property

5. The plaintiffs and Christine, Melissa’s mother, purchased the Property in 2005. In 2007 they demolished the dwelling on the Property and constructed a new house. Christine lived at the Property from 2007 until about 2010 with Peter Belcher, whom she married in 2008.

6. Mr Belcher, a technician who was accredited to do metering and underground supply work, conducted his own business under the name Port Stephens Electrical Contracting. I am not satisfied that he was accredited by the defendant since his accreditation to do the work may have come from the Department of Fair Trading or from another instrumentality. Nonetheless, there was no allegation that he was not authorised to perform the following electrical work on the Property.

7. In 2007, over the course of about four days, Mr Belcher installed the electrical wiring on the Property. On 15 August 2007 he also installed the following three meters in the meter box, which was secured into the bricks of the side of the house:

Number	Phase	Element/ Model	Serial number
1	Single	Single/ EM1000	AMG032241
2	Single	Single/ EM1000	AMG032242
3	Single	Dual/ EM1200	AMB592606

8. As a consequence of Mr Belcher’s work, the meter box on the Property contained two single phase single element meters and one single phase dual element meter (which is able to control off-peak tariff load). It was a standard meter box with a high temperature tolerant meter board. The electrical installation, including the meters, was protected by 100A HRC (High Rupturing Capacity) fuses at the meter board. The service cable ran from the connection to the electricity network distributor conductor, down the power pole, then underground through the Property and up the inside wall of the garage before it entered the meter box from below and terminated at the upstream end of the service fuses. The upstream protection provided was by way of 200A fuses at the nearby electricity substation.

9. I accept Mr Belcher’s evidence that the consumer mains cable which entered the meter box was completely sheathed in rigid orange conduit, including as it passed through the port at the base of the meter box. The cables went through cable-reducing links screwed to the back of the switchboard. The cables coming out of the links were then pulled together into a wiring loom and also screwed to the back of the switchboard. This loom then travelled approximately 60cm to the swinging switchboard panel and was secured, again, to the swinging panel. The effect of this arrangement was that the wires of the cable were secured three times. I also accept Mr Belcher’s evidence that the switchboard was checked and passed by the defendant.

10. On 14 November 2009 the defendant removed meter 2 and replaced it with the following meter:

Number	Phase	Element/ Model	Serial number
4	Single	Single/ EM1000	AMG927421

11. In about 2010 Mr and Mrs Belcher moved out of the Property, which they found to be too large for their purposes and went to live in Mrs Belcher’s unit at Nelson Bay, which they had previously used as a weekender and for holidays. Mrs Belcher sold her share in the Property to the plaintiffs, who moved in with their two children.

The most recent installation prior to the fire

12. In November 2010 the plaintiffs received an electricity bill that was higher than expected. They contacted the defendant, which identified an error with meter 1, and informed them that the meter needed to be replaced. The job was allocated to Mark Bush, one of the defendant’s metering technicians. Mr Bush had been working for the defendant since he started as an apprentice in 1984. Between 1988 and 2002, when he worked as an electrical mechanic, his responsibilities included installing meters. He worked as an Installation Inspector between 2002 and 2006 after which he became a Metering Technician Grade 7. In that role he typically attended 5 to 6 properties every working day to install and replace meters. By the time he attended the Property to replace meter 1, he had performed thousands of meter replacements.

13. In November 2010 Mr Bush was given the following job instructions by the defendant:

“plz take final read of AMG032241 and replace as it ha[s] a faulty capacitor. thanks”

14. Although the text of this instruction was contained in a computer-generated document which Mr Bush had not seen prior to the proceedings, I infer that it accorded with the instruction that he was in fact given. Boris Kobal, who was, at the relevant time, the Manager of Metering Strategy and Technology, having previously been in charge of the Metering Technology Group, annexed the document to his witness statement which became his evidence in these proceedings. As Mr Kobal was not cross-examined, I do not regard the plaintiff’s submission that the document was back-dated or that its provenance had not been established as available.

15. On 24 November 2010 Mr Bush’s first job was to attend the Property to remove meter 1 and replace it with the following meter:

Number	Phase	Element/ Model	Serial number
5	Single	Single/ EM1000	AMG118329

16. Mr Bush had no recollection of replacing the meter. He had not been shown any of the photographs that are in evidence. He first became aware of the fire on the Property when he was asked for his hazard assessment sheet for the job. He was unable to recall when this request was made. When he was in the area to perform another job a couple of years ago he had, however, refreshed his memory by driving past the Property in order to remind himself of the location of the meter box.

17. Mr Bush described his usual practice as involving the following: a visual inspection of the meter box to check for any obvious problems; if no obvious problems are observed, he turns off the main power switch, isolates the relevant meter and opens the panel within the meter box; he undoes the terminals and then unscrews the mounting screws which hold the meter in place. He then removes the meter and installs the new meter by putting the mounting screws back and tightening the connection between the wires and the terminals. He ensures that the terminals on the new meter are tightened before closing the panel within the meter box. He then re-energises the meter and checks its operation to ascertain whether there are any obvious signs of a problem, such as a flickering display or a noise suggestive of a bad connection. He then turns the main switch back on and checks the electricity supply to the installation. He estimated that the task of replacing a meter takes him in the order of half an hour.

18. Mr Bush refuted the possibility that he had trapped anything, such as a cable, in the panel door, since that would have prevented his closing the door.

19. I accept Mr Bush’s evidence that he would not have paid particular attention to meter 1 as he was instructed to replace it, rather than to repair it or identify any fault in it. I also accept that, had Mr Bush noticed anything untoward about the wiring or the meter box, he would have noted it. No such note was made.

20. Mr Bush did, however, concede that, notwithstanding his own system whereby he tightened the connection between the wires and the terminals and then rechecked them, it was possible that one of the wires that went into the new meter had not been tightened sufficiently. He appreciated that tightening the terminal was the most important part of the job because of the potential for a bad joint to result in an increase in resistance, a voltage drop and deterioration of a joint which can lead to fire.

The fire

21. On 29 December 2010 the plaintiffs left the Property for a holiday at Barrington Tops. At about 3am on 30 December 2010, a fire started at the Property. The neighbours were alerted to the fire by their dog, who barked near the meter box. They called Emergency Services, which attended and extinguished the fire. Notwithstanding the fire, the electricity supply to the premises was still operating, as evidenced by the Christmas lights, which remained illuminated. The defendant had to disconnect the electricity supply to the residence before the fire brigade could begin putting out the fire.

22. Anthony Lawrence, a Senior Electrical Inspector employed by the defendant, attended the Property on 31 December 2010 to investigate the cause of the fire. Since about 1983 he has been responsible, in his role as an employee of the defendant, for ascertaining the cause of electrical fires. In the course of his inspection he observed a burnt orange conduit leading from the mains supply to the meter box on the Property. He cut away the burnt section of the conduit in order to examine it more closely. He considered that the conduit had burned from the inside out which he opined related to a fault in the conduit. He postulated a stone in the conduit or moisture in the conduit as being possible causes of the fault and considered that it might take years before damage to cables within a conduit resulted in electrical arcing (see below). He retained and photographed this section of conduit as an exhibit for his investigation. He recorded the following findings in the report of his inspection dated 31 December 2010:

“The consumer mains cable showed evidence of the severe beading and short circuiting of the phase and neutral conductors inside the conduit below the main switchboard.

From the on-site inspection, I could find no evidence to link the source of ignition of the fire with an electrical fault on the wiring of the dwelling, or appliance within the dwelling.”

23. As the plaintiffs were outside the range for mobile telephone reception, Mr and Mrs Belcher were contacted. They drove from their home at Nelson Bay to the Property and spoke with Police. Mr Belcher gave a statement to Police on 30 December 2010. Although the statement referred to the fact that he had done the electrical work on the Property, it did not contain details of his construction of the meter box or the steps he had taken to thread the conduit that housed the consumer mains cable through the meter box or to secure the wires within the box. I accept that this statement contained only those matters about which Mr Belcher was questioned by Police and that they did not ask him about the details of the work he had performed. At the time Mr Belcher did the work he was expecting that the Property would be the home where he would live with Christine, his then wife-to-be. I am satisfied that he remembered installing the meter box and threading the conduit that housed the cable through the port and securing its constituent wires.

24. On New Year’s Day in 2011 the plaintiffs returned home to discover the extent of the fire damage. They contacted CGU Insurance Ltd (CGU), their home insurer.

25. The following day, Sunday 2 January 2011, Stuart Ritchie was asked by CGU to attend the Property with a view to determining the cause of the fire. He is a forensic consultant specialising in the origin and causes of fires and was formerly a crime scene investigator with the Police. In order to understand the significance of Mr Ritchie’s findings, and those of other experts who examined the vestiges of the fire and gave expert opinion evidence, it is necessary to set out some fundamental electrical concepts and an explanation of the configuration of the meter box on the Property.

Expert opinion evidence

Electricity: relevant concepts and technical matters

Fault as a condition precedent for an electrical fire

26. It was common ground that an electrically-initiated fire cannot occur without fault either in the design or installation of either the electricity supply system or the electrical utilisation equipment. Electrically-initiated fires fall into two categories: a fire may either originate within the electricity supply system (which includes cables, the meter panel, power and light sockets and switches) or within the electrical utilisation equipment (which includes appliances and fixtures connected to the electrical supply system).

Replacement of a meter box

27. In order to replace a meter, the metal door of the meter box (which is hinged on the top edge) is lifted to expose the panel. It is then necessary to remove the wooden panel that covers the meter which is to be replaced. There are three mounting screws that attach the meter to the panel which are held in place by nuts, which must be unscrewed. It is then necessary to release the screws that hold in place the wires that enter the meter from its lower side. There are two screws per wire. On the supply side there are two wires: one active and one neutral. Both screws must be loosened to release the supply wires. The old meter is then removed and the new meter is then screwed in place using the mounting screws.

28. Once the new meter has been screwed in place, the two supply side wires (which at the ends are uninsulated to provide a good connection) are repositioned in the holes on the lower side of the meter box and screwed in place by the two screws for each wire to ensure that there is a good connection between the wire and the meter. If the wire is pushed up too hard and it is screwed down against the insulation (in which the wire is encased, except at the end), proper contact is not achieved, which has the effect of increasing the resistance of the joint.

29. Once this task has been completed the panel is then repositioned over the meter and the door to the meter box is closed.

Passage of the current through the meter

30. The purpose of a meter, as its name implies, is to measure the current that flows through from the electricity supply to the premises where it is used to supply power to appliances. The incoming conductors pass from the street onto the Property and into the meter box. The conductors comprise wires encased in conduit except at their ends where they enter the meters so as to make a good connection where the wires are screwed to the two connection points in the meter. The current flows from the incoming wires through the electronic circuitry in the meter, which calculates the power consumption.

Ohm’s law and other associated equations

31. Ohm's law states that the current through a conductor between two points is directly proportional to the potential difference across the two points. The mathematical equation that describes this relationship is I = V/R, where I is the current (in amps, A); V is the voltage (in volts, V) and R is the resistance (in ohms, Ω). Accordingly, if the current is constant and the resistance increases, the voltage also increases.

32. Power is equal to the product of voltage and the current. The equation is P (power) = V x I. Heat is the product of the square of the current and the resistance. The equation is H (heat) = I² x R. Thus where resistance increases, but current remains constant, the heat output increases.

The consequence of a poor connection on resistance

33. The objective in a connection is to have minimum contact resistance. The effect of a poor connection is to increase resistance. As referred to above, one way in which this can occur is if the copper wire is pushed too hard into the hole. If the insulation rather than the copper wire itself is screwed down it creates a poor connection and the resistance at the connection is higher than it should be. Where current encounters a high resistance joint, the effect may be to cause a reduction in both current and voltage downstream from the joint. Because heat is proportional to resistance, a poor connection leads to an increase in the heat dissipated at the site of the poor connection. As oxidation is assisted by heat, the metal at the joint (the wire and the screw) tends to oxidise faster at a poor connection. The oxidation process in turn leads to the connection increasing in resistance, which in turn results in more heat being dissipated. At a certain point, this oxidation may cause the wire to corrode or fail, thereby depriving the current of a solid conductor. If sufficient heat is generated, the current can cause the gas to ionise, thereby permitting the electrons to pass through the ionised gas. This process is known as arcing, which is described below.

Arcing: its nature and cause

34. Free electrons carry electric current through solid and liquid conductors. Under normal conditions gases do not have free electrons available to carry current. Before current can pass through gas, the gas molecules must be ionised. In ionised gas, known as plasma, electrons are freed from their molecules to carry an electric current. Ionisation of a gas occurs only at very high temperatures (5,000° C – 10,000° C). The term “arcing” is used to describe the flow of electric current through gas.

35. Arcing temperatures may initially be achieved over tiny localised channels. However, once ionisation occurs, any differential in voltage along the channel will drive more current through the channel. The magnitude of current that flows in the discharge channel can vary markedly and can range between one milliamp (10-3) to a kilo-amp (103). The current will itself cause further ionisation by ionising electron-atom collisions. This will have the effect of sustaining the discharge, for as long as the voltage supply is available. This process results in a sustained high temperature in the gaseous discharge channel which may be in excess of 8,000° C, which leads to combustion or incineration of proximate materials. Electrode melting is a major characteristic of arc discharges. At arcing temperatures copper, which is a soft metal, will melt and form globules; steel, which is much harder, tends to become welded. Vaporisation also occurs.

The bath tub effect

36. The “bath tub effect” is a term used to describe: the relatively high failure rate of products in their early life; the relatively low failure rate of such products through the so-called mid-life; and the increased failure rate of products late in life, as age and wear have an effect. The graph that plots time (on the x axis) against probability of failure (on the y axis) produces a shape that resembles a bath tub.

37. Dr Colin Grantham, the expert relied on by the plaintiffs, (whose evidence is addressed in more detail below) explained that the reason for the high probability of initial failure was that it was during the early period of operation of the equipment or system that any manufacturing or installation defects generally manifest themselves. He said that the high probability of failure falls quickly as the manufacturing or installation are proved to be sound and then remains at a low level over most of the life of the equipment. However, as the equipment reaches the end of its life, the probability of failure starts to rise until failure ensues or the equipment is replaced.

38. The length of the initial period depends on the nature and cause of the fault. For appliances and pieces of equipment such as meters, Dr Grantham considered the initial period to be short and to be typically measured in hours or days. However, where the fault is one of installation and the cause the creation of high resistance electricity connections, he considered the initial period to be longer and to be measured in days or weeks.

The initial investigation of the cause of the fire: Mr Ritchie

39. Mr Ritchie ascertained that the most severe manifestation of the fire damage was inside the meter box. He saw several localised electrical responses (resulting in morphological changes) which indicated arc shorts within the interior of the meter box. Because of the number and distribution of such responses, he was unable to tell which one was the first and, therefore, which one was responsible for starting the fire. He was also unable to identify the precise mechanism for such a fault, failure or response.

40. Mr Ritchie also examined (by visual inspection and touch) the entry points to the meter box where the conductors came into the meter box through holes in the bottom of the box and came out through the top of the meter box. He did not observe any signs (whether arcing or localised response) consistent with localised fault, failure or short circuit response at any point of entrance or exit, either to the conductors or to the body of the meter box. Mr Ritchie explained that an electrical response or arcing between the cable and the metal port would cause the wire to melt around the area of the port leaving copper deposits and, sometimes, fusion between the wire and the metal around the port. In such cases, there would be some consequential distortion of the metal aperture at the port, which could be detected by touch. He therefore excluded contact between the cables and the entry ports as a potential source of the origin of the fire.

41. Mr Ritchie recorded that he had been advised by the plaintiffs of “no prior concerns with the premises, nor indications of recent repairs, rectifications or work”.

42. Mr Ritchie’s conclusion was, accordingly, that something had gone wrong inside the meter box but he was unable to say what, and, in particular, whether the response was associated with either the extant conductors, the meter or associated components. He expressed his principal conclusions in the following summary paragraphs (the numbering of which derives from his report):

“[11]   The examinations revealed no evidence attributable to either a deliberate or a malicious human involvement.

[12]   The fire was determined to be the result of an electrical cause associated with a fault, failure or response to one of the electrical conductors or components within the meter box. The precise mechanism for such a fault, failure or response remains to be established.

[13]   We note the indicated involvement of the relevant authority and the replacement of the meter to the box shortly prior to the fire event. Further review and consideration of the significance of same, may be assisted by a review of any actions taken by the relevant electrical authority prior to the fire, and/or, by a review of the results of any scene examinations/investigations by, the relevant electrical authority, and by a review of the conduct of such activities via Professor Grantham.

[14]   In the interim, though speculative, it would be reasonable to consider that the development of the fire was likely associated with a scenario involving actions taken in relation to the alleged replacement of the meter.

[15]   The alternative would be a scenario of fire development independent to the alleged actions or involvement associated with the meter box and the alleged replacement/intervention by the relevant authority. No physical evidence attributable to an identifiable alternative scenario was detected.”

Dr Grantham’s investigation and opinion

43. On Friday 7 January 2011, at the request of CGU, Dr Grantham inspected the Property, including the meter box. Dr Grantham is an electrical engineer with over forty five years’ experience in the field. He is currently a Professorial Visiting Fellow in the Energy Systems Research Group at the University of New South Wales. Dr Grantham observed the effects of sustained electrical arcing within the meter box, which he considered (having regard to the damage and the debris) to have continued for a significant period of time. He deduced that the fire had been a high burning one in that it spread upwards from the meter box into the roof space and then horizontally across the ceiling to the roof space void.

44. Dr Grantham also went to the Police Station to inspect the exhibits which had been removed as part of the investigation into the cause of the fire, including the piece of conduit and cable that had been cut from the section below the meter box. He assessed the ports on the underside of the meter box and considered that they were not distorted, although there was debris and damage associated with the fire in their vicinity. Accordingly, he excluded contact between a cable as it entered the meter box and the metal ports at the underside of the meter box as a cause of the fire. In coming to his opinion, Dr Grantham assumed that the incoming cable had been enclosed in heavy duty conduit, as required by clauses 3.9.1 and 3.9.3.1 of the AS/NZS Wiring Rules and that, accordingly, there was no real possibility of the cable’s coming into contact with the port. He concluded that the cut section of the conduit and cable had been burnt by burning insulation and molten arc products produced by the fire and electrical arcing within the meter box. This in turn created a secondary electrical arc due to damage to the insulation between adjacent conductors.

45. Dr Grantham also inspected the electrical wiring throughout the Property and considered that the plugs and connections had been installed to an appropriate standard and were in good condition.

46. As a result of his inspection Dr Grantham opined that the fire had been caused either by the defendant’s defective installation of the meter in the box or by a defective meter. In his view, the timing and proximity of the work done in the meter box about a month prior to the fire (the replacement of meter 1 with meter 5), indicated that the work carried out by the defendant was the cause of the fire. He regarded defective installation to be more likely since had the meter been defective he would have expected it to fail within a shorter period. He regarded the period of one month as being: “typical of the time it takes for a defective electrical installation to develop into an electrical arc fault capable of igniting and destroying adjacent combustible material”. This remained his view at the hearing of the proceedings. He considered the period of five weeks to be consistent with the initial period of the bath tub effect.

47. Dr Grantham subsequently prepared a report for the purposes of the proceedings (his initial report having been prepared for CGU) in which he largely restated his earlier view. He referred to notes he uses for the purposes of a course he conducts in Electrical Safety at the University of New South Wales. Because of its importance to his ultimate opinion, I propose to set out the section entitled “High resistance connection” in full:

“High resistance connection

Before it reaches the electrical load, the electrical supply wiring passes through electrical connections such as those in the supply meter panel, junction boxes, plug sockets, etc. If these connections are adequately secured, the resistance at the point of connection is low. However, if the securing screws are loose, the resistance at the point of connection is often high. Because the power is given by I2R, for the same current, which can be within the rating of the system, the power absorbed by the connection is correspondingly larger.

Because the current is normal, the fuse or circuit breaker cannot detect this type of fault, and the energy dissipated in the connection can be large, resulting in a subsequent rise in temperature. Eventually electrical arcing occurs at the connection and the fault is either detected, normally due to poor performance of utilization equipment, or alternatively the fault worsens and causes an ignition of adjacent combustible material.”

48. In his oral evidence, Dr Grantham explained, by reference to the concepts in this section, how he considered the arcing occurred and that the time period was consistent with the bath tub effect.

Professor Baitch

49. Professor Baitch was retained by the defendant to respond to Dr Grantham’s opinion. He has qualifications as a Bachelor of Electrical Engineering and a Master of Engineering Science (Electricity). He has extensive experience and expertise in electrical engineering.

50. Professor Baitch did not inspect the Property or the meter box, which had been replaced some time before he was retained. He did, however, consider the photographs that had been taken by the Police, Mr Ritchie and Dr Grantham.

The “bathtub” effect

51. Professor Baitch addressed the bathtub effect in response to Dr Grantham’s opinion. He said that for more sophisticated devices such as meters, which are required to have a high degree of reliability, the manufacturing process ensures that “infant mortality” (failure within the early stages) is negligible and that such failures occur within hours or days. However, he agreed with Dr Grantham that high resistance electrical connections typically manifest themselves within days or weeks. Nonetheless, he regarded the five-week period between the installation of the new meter and the fire to be outside the expected range of the initial period.

52. In his report of 17 March 2015 Professor Baitch said of Dr Grantham’s conclusion that the fire had been caused by a loose connection in the meter that had been installed in November 2010:

“It is not related to any evidence. There is no evidence that points to the possibility that there was a faulty connection within the switchboard associated with the electricity meter or that the fire was caused by a fault within the meter. The conclusion is based purely on the coincidence of the fact that the work was undertaken a month before.”

53. Professor Baitch regarded Dr Grantham’s hypothesis as a “simplistic opportunistic conclusion” which gave too much weight to the timing. He regarded the period of five weeks as being too long for it to be considered a bath tub failure. Further he considered that, because of the number of components within the meter box, it could not be concluded that the fire was caused by the meter or work associated with the meter as opposed to another component.

54. Professor Baitch also considered Dr Grantham’s hypothesis to be unlikely because it did not occur during the Christmas period when the electrical loading on the installation would have been at its highest but rather on 30 December 2010 when no one was present and the load likely to be at a minimum. He also considered that, if there was a high resistance joint at the meter, it would have been evident in terms of voltage fluctuations and poor voltage conditions at the installation since the meter is a series connection carrying the whole current flow into the installation. He noted that there was no reference in the plaintiffs’ statements to their having observed voltage fluctuations in the period between 24 November 2010 and 29 December 2010 when they left for Barrington Tops.

Professor Baitch’s preferred hypothesis for the cause of the fire

55. Professor Baitch examined the photographs and identified as a “weak point” the place where the cable entered the sheet metal switchboard since the port, or aperture, is a round hole with a sharp metallic edge. He examined the photographs of the section of cable that had been cut from below the meter box and opined that, because of the extent of the burning, it was more likely that it had been the site where the fire had started than anywhere else. He also observed that the fire had been upward burning, which was consistent with his hypothesis. He postulated that the wear and tear on the cable might have occurred because of the movement occasioned whenever the switchboard panel is opened and closed. The mechanism of the fault and its role in the fire is explained in the following passage from his report:

“The pressing action can occur while the conductors are resting against the edge of the switchboard. The rubbing action of the incoming cables occurs whenever the switchboard panel is opened. The cabling is usually looped up and then connected to the various devices on the switchboard. Accordingly, due to the opening and closing of the switchboard panel, if the insulation of the cable has been stripped too far back (which appears to be the case), and if the conduit does not actually enter into the switchboard (which again appears to be the case) and if a cable gland is not installed where the cable enters the switchboard (impossible to tell but usually not used in domestic installations) it is quite possible (indeed likely) that over a period of time the rubbing action eventually ends up in tracking, subsequent arcing and the development of the type of fire that is visible in this instance. This is due to the combination of the cable being poorly installed in the first instance, the pressing action against the metallic edge of the switchboards and the rubbing action due to the opening and closing of the switchboard panel.”

56. Professor Baitch also explained why the power supply continued to the house, notwithstanding the fire as follows:

“This means that the fault is on the line side of the 100A HRC service fuses within the switchboard. This explains why the service fuse has not operated and the fire has continued and supply was maintained. The 200A HRC fuses installed upstream at the substation would require approx. 400A fault current to flow. It is quite likely that the fault current is less than the fusing current and thus would not operate.”

Exclusion of other hypotheses external to the meter box

57. Professor Baitch was satisfied that the fire was initiated either below or inside the meter box. He was able to exclude the possibility that it was the result of other sources of fire external to the meter box.

Consideration of other possible causes of fire within the meter box

58. Professor Baitch considered the most probable sources of heat sufficient to ignite the material in or around the meter box to be either: leakage currents caused by tracking; or heat energy associated with current flow and resistance in connections or conductors. Of these two, he considered leakage currents to be a “low probability”. He opined:

“For low voltage switchboards, the most likely cause of initial heat generation required for ignition is as a result of heat energy associated with current flow and resistance in connections or conductors.”

59. He agreed with Dr Grantham that, since the installation was only three years old at the time of the fire, the possibility of a fault developing within the meter box installation itself was low.

60. Professor Baitch considered that the fire could have been caused by some disturbance of the wiring occasioned when the panel in the switchboard was opened or closed. He explained that any of the wires in the switchboard could have worked loose or fractured. This in turn could have resulted in a high resistance joint generating heat and initiating a fire, which “could happen shortly after the action of opening and closing the switchboard”. Professor Baitch speculated that the panel might have been removed as a result of the plaintiffs’ concern about their electricity bills, although he accepted that it was “unknown” when the panel was opened, if at all. He also opined that, even if the panel was opened when Mr Bush came to replace the faulty meter in November 2010, “the loosening of a connection or a fracture of a wire on one of the other components would have nothing to do with the work undertaken” by the defendant because it would relate to the installation.

Professor Baitch’s summary of the possible causes of the fire

61. Professor Baitch identified the following as possible (though not exhaustive) causes of the fire, which are additional to the two hypotheses for which Dr Grantham contended (a fault within the meter and a fault in the installation of the meter):

1. Slight possibility that fire was initiated due to malicious or human involvement;

2. A failure of the incoming supply cable due to its rubbing against the sharp metal edge of the switchboard where the cable enters the sheet metal switchboard which then resulted in arcing of the cable;

3. Defect developing in wiring of the switchboard resulting in loosening of connections or a fracture of a wire;

4. Other electrical equipment developing a fault;

5. Poor connection on circuit associated with Christmas lights.

62. Professor Baitch considered it to be “impossible to have any confidence as to the cause of the fire”. However, he identified, as the cause to which he would give most weight, the rubbing of the cable as it entered the meter box.

The joint report of the expert conclave (Dr Grantham and Professor Baitch) and the concurrent evidence

63. The experts met in conclave on 6 August 2015. They gave concurrent evidence on the second day of the hearing. The areas of agreement and disagreement are summarised below.

63. The experts agreed that the cause of the fire could not be determined with any certainty. They agreed that it would not have happened without some failure, either of equipment or installation.

Where the fire started

65. The experts did not agree where the fire started. Their disagreement on this issue stemmed from their disagreement as to the cause of the fire, which is considered further below. Dr Grantham maintained his opinion that it had started inside the meter box and that the damage to the conduit and supply cable below the meter box was consequent on the falling of molten metal or other material from the fire which had started in the meter box. Professor Baitch maintained his view that the fire had started at the point where the incoming cable met the port into the meter box and that this accounted for the burnt conduit that had been cut by Mr Lawrence and removed from the scene.

Whether the meter was defective

66. The experts agreed that the meter that was installed on 24 November 2010 was completely destroyed by fire and that it was, accordingly, not possible to say whether it was defective. Further, as no meter readings were taken between the time the meter was installed on 24 November 2010 and the time of the fire, it was not possible to ascertain whether the meter was functioning properly. Professor Baitch opined that it was not likely that the meter was defective. I infer from Dr Grantham’s evidence of the “bath tub” effect that he did not regard it as likely that the meter itself, rather than its installation, was defective. In these circumstances it is not necessary to address the evidence of Mr Boral as to previous instances involving this model of meter and the lack of precedent for such a model failing catastrophically such as to cause fire.

Whether the fire was caused by the defective installation of the meter on 24 November 2010

67. The experts agreed that the fire could have been caused by the defective installation of the meter. Dr Grantham considered this to be the most likely possibility. However, Professor Baitch considered it to be unlikely.

68. The experts agreed that the fact that the fuses (being the two 100A and the one 200A fuse) did not operate did not take the matter much further. That the fuses did not operate also suggested that the current was not particularly high, although it may have been higher than normal, since fuses, which are designed to prevent very large increases of current, can tolerate some increase in current. Professor Baitch said, of the circumstance that the fuses did not blow, that “really it just depends on a lot of factors, [and was] very hard to conclude”.

69. Dr Grantham explained the basis for his hypothesis as follows. He said that, as the new meter had been installed five weeks before, its installation and condition had not been proven to be safe by the passage of time. Accordingly, the bath tub effect pointed to its being incriminated in the fire. As referred to above, he considered that a defect in the meter itself could be excluded because the initial period for the bath tub effect could be measured in hours or days for such equipment.

70. Dr Grantham explained the postulated mechanism of failure by reference to the following example:

“Let's say if 10 amps of current flows through that 1 Ohm, we would get a drop of 10 volts.  Now, 10 volts is within the normal tolerance of the supply; the supply voltage is allowed to vary by 37 volts anyway, so that 10 volt drop is relatively small.  And the 1 Ohm would stay 1 Ohm for a reasonable period.  What would happen is, over a period of time, the connection would deteriorate because of this heat which we have commented upon, so heat would be produced at the joint and that promotes oxidation because it is a chemical reaction, and all chemical reactions are enhanced by heat. So we get oxidation at the electrical connection and the resistance would increase slowly over a period of time.  And maybe after five weeks it may have say got up to 3 amps, by which time now with the 10 amps of current the voltage drop is 30.  So this is a slow process.”

71. Dr Grantham instanced two occasions from his experience where a poor joint had manifested itself weeks after the joint had been installed, including one for which he had been personally responsible.

72. When it was put to Dr Grantham in cross-examination that 38 days was a long period of time for the process to occur, he responded:

“Not for this type of problem, because of the way I described it earlier.  In other words, we start off with a poor connection, but it still conducts electricity, so everything appears to be normal, but then it deteriorates.  And it deteriorates slowly, because it's an oxidisation process, and how rapidly it deteriorates depends upon (a) how bad the connection was in the first place.  It depends upon the magnitude of the current which flows, and it depends upon how frequently that current flows. So there are these three factors which influence how long this can take, and indeed it could take much longer than five weeks.  All I'm saying is five weeks is typical, based on my experience.”

73. Dr Grantham said that such a process could occur with no discernible effects on electrical appliances or lights since voltage differences would not necessarily be sufficient to produce visible consequences.

74. Professor Baitch, when asked to explain why he would expect the consequences of a poor connection to ensue in a shorter period of time than five weeks said:

“Well, it's all function of the actual time associated with the fluctuation of current heating and cooling.  And the heating and cooling process cause expansion and contraction, and expansion and contraction doesn't ‑ then causes the deterioration of the process, so it all happens ‑ initially ‑ slowly.  Although if it's a bad connection in the first instance it all happens very fast.  But if it's a developing one, it requires the ‑ sort of the development of that process, but, still, in my view, that five weeks is quite a long time.”

75. Professor Baitch also rejected the likelihood of the defective installation of the meter being the cause on the basis that no voltage differences were noticed by the plaintiffs. He said that if there is a connection which is not a good one, the resistance will increase. If the current remains constant, the increase in resistance will lead to a voltage drop downstream from the connection (on the basis of Ohm’s law). Professor Baitch said that such a voltage drop would be likely to lead to the consumer noticing the effects of voltage fluctuations. However, he agreed that, if the voltage drop was not substantial, it is unlikely that the consumer would be able to detect the change from the appliances in use. Although some appliances, such as the hot water service or the television, are not particularly sensitive to voltage, small variations in voltage can lead to lights flickering. Professor Baitch’s opinion was that a “bad joint” would tend to deteriorate very rapidly. For this to occur over five weeks before catastrophic consequences ensued was outside his experience. He considered it to be unlikely, although not impossible, that defective installation was the cause of the fire.

Whether the fire was caused by rubbing of the exposed cable on the port underneath the meter box

76. The experts did not agree that the fire could be caused by running of the exposed cable on the port underneath the meter box. Dr Grantham regarded the possibility as no more than fanciful (although, as is common with scientists, he was not prepared to use the term “impossible”). Professor Baitch regarded this scenario as the most probable. Their views have been set out sufficiently above.

Liability

The relevant principles

77. Although submissions were not addressed to the risk of harm or to reasonable precautions as required by ss 5B and 5C of the Civil Liability Act 2002 (NSW) (the Act), I am satisfied that the risk of harm is the risk that the defective installation of a meter box will give rise to the risk of fire. The probability that harm will occur if care is not taken is significant. The seriousness of the harm is substantial. The burden of taking precautions to avoid the risk of harm is not great since all that is required is that the technician responsible for the installation take care to ensure a good connection. The social utility of the activity that creates the risk of harm is high, as the provision of electricity, and the accurate measuring of such use, is of great benefit to society.

78. The principal issue is one of causation: not that an identified breach caused harm, but whether the negligence that caused the harm was an act or omission of the defendant, of the plaintiffs, or of a third party.

79. Section 5D and s 5E of the Act, so far as relevant, provide as follows:

“5D General principles

(1) A determination that negligence caused particular harm comprises thefollowing elements:

(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and

(b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability).

(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

…

5E Onus of proof

In proceedings relating to liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.”

80. Factual causation is confined to the application of the “but for” test for causation: Strong v Woolworths Ltd [2012] HCA 5; 246 CLR 182 at [18] and Wallace v Kam [2013] HCA 19; 250 CLR 375 at [16]. Unlike a case such as Curtis v Harden Shire Council [2014] NSWCA 314; 88 NSWLR 10 (Curtis), the present is not one where the question is whether a patent breach probably caused the harm. In cases such as Curtis, the question is whether, but for the patent breach (for which the defendant was responsible), the harm would have occurred. In the present case the question is whether the plaintiffs have proved that the fire started because of a breach attributable to the defendant (defective installation of the replacement meter) rather than a breach attributable to someone other than the defendant, it being accepted that the fire would not have started but for a breach. Both categories of case are to be determined by reference to the “but for” test.

81. The plaintiffs’ case was that the fire was caused by a poor connection between an incoming wire and the new meter that was replaced on 24 November 2010. There was no issue that, if this was proved on the balance of probabilities, factual causation was established (s 5D(1)(a) of the Act). Nor was it contended that it was inappropriate for the defendant’s liability to extend to the plaintiffs in those circumstances (s 5D(1)(b) of the Act). The defendant accepted that it would be liable, if the plaintiffs proved, on the balance of probabilities, that defective installation of the meter was the cause of the fire, since it accepted that it owned the meter and that it was responsible for the work undertaken by Mr Bush on 24 November 2010.

82. In considering the issue of causation, it is necessary to look at the competing hypotheses. As the High Court (Dixon, Williams, Webb, Fullagar and Kitto JJ) said in Bradshaw v McEwansPty Ltd (1951) 217 ALR 1 (Bradshaw) at 5:

“Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence while [in] the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort where direct proof is not available it is enough [if] the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture … But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then though the conclusion may fall short of certainty it is not to be regarded as a mere conjecture or surmise.

83. It is also necessary, as the defendant submitted, to guard against the so-called post hoc propter hoc fallacy: namely, that proof that Event A was caused by Event B is not established merely by showing that Event A followed Event B: see the discussion in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [58] – [70] and especially at [62] per McDougall J, McColl and Bell JJA agreeing. I note, however, that, in the present case, both experts accepted the scientific basis for the bath tub effect and its appropriateness in determining causation. This effect relies on temporal sequence as a basis for hypotheses of causation. Where the bath tub effect applies, the temporal connection is not a fallacy, but rather an accepted integer in the scientific reasoning that underpins the theory behind the effect.

84. The inability on the part of the plaintiffs to show precisely how the fire started is not fatal to proof of their case: Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 317 per Mason P, citing Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538 at 563-564, 569; Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720.

The hypotheses discarded by the experts as being unlikely

85. Although Professor Baitch suggested in his report that his list of possible causes was not exhaustive, some hypotheses were rejected as being of such low probability as to warrant their removal from contention.

86. Foul play was not regarded as a viable hypothesis as there was no evidence of it and the meter box was regarded as an unlikely site for its perpetration. A defect in the meter itself was also rejected as the infant mortality period for the bathtub effect for devices of such sophistication is measured in hours or days rather than weeks. The experts also rejected as unlikely the fire’s being related to a defect in a wire not associated with the installation of the meter. They also considered it to be unlikely that the fire had been caused by a fault developing in other electrical equipment in the meter box in the absence of evidence that there had been work on such equipment or that the operation of any piece of equipment had been compromised. That the premises were relatively new and that there had been no prior electrical incidents to the knowledge of the plaintiffs was also relevant. There was some reference to the hot water system being replaced in 2009 but the evidence did not establish whether the switch inside the meter box was replaced at that time. There was no suggestion that anything occurring in 2009 would have been within the initial period of the “bath tub” effect in any event. The Christmas lights were also ultimately excluded from contention as a cause of the fire since they were connected to the phase not affected by the fire.

The principal hypotheses

87. Following the extensive analysis and consideration engaged in by the experts, both individually and together, the only real contending hypotheses advanced were: Professor Baitch’s hypothesis that the fire started at the port to the meter box where uninsulated cable rubbed against the metal; and Dr Grantham’s hypothesis that when the meter was installed the wire was not properly connected. These will be addressed in turn.

Professor Baitch’s hypothesis that the fire started at the port to the meter box

88. I am satisfied, on the basis of Mr Belcher’s evidence, that the incoming cable was encased in heavy duty conduit and other insulation when it entered the lower port of the meter box and that Mr Belcher complied with the Wiring Rules when he installed the cable.

89. I accept the evidence of Mr Ritchie and Dr Grantham that there was no evidence of distortion around the ports on the underside of the meter box such as would support the theory that abrasion between the cable and the metal port had caused localised arcing. I prefer Mr Ritchie’s evidence, which was based on contemporaneous inspection, which included running his finger around the edge of the port to see if distortion could be detected, and that of Dr Grantham (which also included visual inspection of the site including the meter box) to that of Professor Baitch, whose conclusions were based on photographs. Although it is permissible for experts to have regard to photographs, examination of photographs, even of the quality of those in evidence in the present case, does not afford the same opportunities for proper investigation as does a site inspection. Accordingly, Professor Baitch was at a relevant disadvantage.

90. I accept the evidence of Mr Ritchie and Dr Grantham that the damage to the conduit in the area immediately below the meter box was caused when molten products and burning insulation had fallen onto the conduit from the fire which had started in the meter box.

91. I reject Professor Baitch’s hypothesis that contact between the cable and the metal port was either the point at which the fire started, or its cause. I do not regard his hypothesis as a “conflicting inference” in the sense in which that phrase was used in the passage from Bradshaw set out above or as a “competing hypothesis” as that phrase was used in Luxton v Vines (1952) 85 CLR 352. Indeed I regard Professor Baitch’s hypothesis as having been excluded from contention by the evidence referred to above.

The hypothesis that the installation of the meter was defective

92. For reasons given above, both experts accepted that defective installation of the meter was a possible cause of the fire. Acceptance of the hypothesis that the installation of the meter was defective requires a finding that Mr Bush probably failed to secure the connection properly between the incoming wire and the connection in the meter. While he had undoubted expertise and experience to perform the task, it is a matter of common experience that people when required to perform a task repeatedly over years can, on occasion, succumb to a momentary inadvertence or error. In the present case, the risk of a poor connection arose from the fact that the defendant committed the performance of the task of replacing the meter to a “fallible human agent”: Smith v Broken Hill Proprietary Co Ltd (1957) 97 CLR 337 at 342 per Taylor J.

93. I accept Dr Grantham’s hypothesis as to the way in which the fire was probably caused, including his evidence that the 38-day period between the installation of the replacement meter and the fire was within the bath tub effect, and that it was not atypical, having regard to the incremental and progressive process that caused the resistance at the joint to increase. I do not accept Professor Baitch’s evidence either that the timing was mere coincidence or that it was an unlikely cause. In my view, Professor Baitch’s assessment of the likelihood of Dr Grantham’s hypothesis was compromised by his preference for his own hypothesis, which I have rejected.

94. I accept Dr Grantham’s hypothesis as the reasonable and probable explanation for the fire. I am persuaded that it is more probable than not that the fire was caused when the resistance at the joint where the wire was screwed to the replacement meter was such as to generate sufficient heat to ionise the surrounding gases, permitting arcing and the consequential fire. In reaching this conclusion, I appreciate the fact that no voltage differences were noticed by the plaintiffs in the period leading up to the fire. Nonetheless I accept Dr Grantham’s evidence that, because of the incremental nature of the process, such differences would not necessarily have been discernible in the time from 24 November 2010 to 30 December 2010. It is not necessary that other possible explanations for the known facts cannot be excluded: Fuller-Lyons v New South Wales [2015] HCA 31 at [47], including the cases referred to at footnote 49.

92. In my view the plaintiffs have discharged their onus of proving on the balance of probabilities that the fire was caused by the defendant’s negligence. They have proved factual causation (s 5D(1)(a) of the Act). Had scope of liability not been accepted (s 5D(1)(b)) by the defendant, I would have found that it was appropriate that responsibility for the harm should be imposed on the defendant. It is, accordingly, not necessary to consider s 5D(2), which was not, in any event, pleaded.

93. Although the defendant pleaded s 5O of the Act, it did not make submissions directed to it. Nor did I understand it to submit that a faulty installation of the meter would accord with peer professional opinion as competent professional practice. Accordingly, it need not be considered further.

Contributory negligence

97. The allegation of contributory negligence was relevantly confined to an allegation that the plaintiffs had failed to inspect the contents of the meter box and electrical installation other than the electrical meters in the meter box. As I am satisfied to the requisite standard that the fire was caused by a faulty connection in the meter box itself, the allegation of contributory negligence falls away.

Other matters: the pleading

98. In final address, the defendant sought to rely, for the first time and without prior notice either in the pleadings or otherwise, on the following clause in the Standard Form Customer Supply Contract (Amendment No 4 June 2009) (the Supply Contract), which, so far as is material, provided:

“12.4   Exclusion of liability

(a)   Subject to clause 12.3, and as far as the law permits, we are not liable for any loss or damage you suffer (including; without limitation, where caused by any negligent or deliberate act or omission by us) arising from:

. . .

(iii)   any act or omission (including ones that are negligent or deliberate) of your distribution network service provider.”

(b) To the extent that we have any liability to you despite the effect of clause 12.4(a), our liability (under contract, tort, or any other basis including, without limitation, where caused by any negligent or deliberate act or omission by us) is limited, as far as the law permits, as follows:

(i)   we are not liable for any indirect, economic, special or consequential losses or damages of any kind (including corruption of data losses, business interruption losses, losses of any profits or any other indirect costs of any kind; and

(ii)   our liability for other losses is limited to the lesser of:

(A)   the total amount billed to you for electricity supplied under this contract during the year that our breach, act or omission occurred which gives rise to the claim; or

(B)   $5,000 (GST-inclusive, if any),

for all claims you make in any one calendar year.”

99. The defendant contended that it was, relevantly the “distribution network service provider”. It submitted, accordingly, that, even if the plaintiffs had proved that it was liable in negligence for the harm occasioned by the fire, such liability had been excluded by cl 12.4. Alternatively, it submitted that its liability should be limited to $5,000 pursuant to cl 12.4(b).

100. The defendant contended that, as the plaintiffs had, themselves, relied on the Supply Contract, in part in support of their allegations that the defendant owed them a duty of care, it was not necessary that the exclusion clause be pleaded. I rejected this submission. I did not permit the defendant to rely on cl 12.4 as it had not been pleaded or otherwise notified to the plaintiffs. The Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 14.14 require a defendant to plead specifically any matter that, if not pleaded, may take the opposite party by surprise; or any matter that the party alleges makes the opposite party’s claim (or part of it) not maintainable. Clause 12.4 falls into the category of matters that must be specifically pleaded, both because if, not pleaded, it would take the plaintiffs by surprise and also because it may, if established, a complete answer to the plaintiff’s claim (subject to relief, if available, being granted to the plaintiffs under the Contracts Review Act 1980 (NSW)). No application for leave to amend the defence to plead the exclusion clause was made. It is, accordingly, not necessary to consider further the effect of the exclusion clause.

Reliability of witnesses

Mr Belcher

101. Mr Belcher’s evidence was challenged in cross-examination on the basis that his description of the work he had done when he installed the cables and the meter box was not included in the statement he gave to Police on 30 December 2010. I accept his explanation that he answered only those questions that he was asked by Police and was not asked about the work he had done to the Property before he moved in.

102. Mr Belcher’s evidence was also challenged on the basis that he had a motive to say that he had installed the cable correctly since he did not want to be responsible for the fire that ensued years later, particularly in a home owned by his step-daughter and her husband in which they lived with their children. I accept Mr Belcher’s evidence as to the manner in which he installed the meter box and as to his enclosing the cables within conduit such that they were protected from coming into contact with the ports of the meter box. Notwithstanding the passage of time, I am satisfied that he recalled the job because he intended to live in the residence himself with his wife to be. I reject the submission that the reliability of his evidence was diminished by motive.

Mr Bush

103. The plaintiffs contended that Mr Bush was an unreliable witness because he gave evidence that he had been given a written sheet relating to the job; whereas the defendant later conceded (in answer to a call for the document) that no such document existed. I do not regard this matter as reflecting adversely on Mr Bush’s credit. The timing of particular changes in work practices is not something which he could be expected to recall with any accuracy years later.

104. I accept Mr Bush’s evidence as to his usual practice. It is to his credit that he accepted the possibility that he may not have tightened the connection sufficiently in the present case. Very experienced technicians, such as Mr Bush, are capable of momentary inadvertence or incomplete attention to the repetitive and routine task of tightening screws on a wire which may result in poor connection, either because the screw has not been tightened sufficiently, because the wire has been pressed too far into the hole thereby involving the insulation in the connection, or for some other reason.

Professor Baitch

105. The plaintiff submitted that I ought not accept Professor Baitch’s evidence because he was unable immediately to identify the photographs that formed the basis for his opinion that friction between the incoming cable and the aperture on the lower side of the meter box was the most likely cause of the fire. Although it would have been preferable had Professor Baitch identified the photographs in his report, I do not regard it as adversely affecting his reliability that he required a few minutes in the morning adjournment to do so. The plaintiff also sought to impugn Professor Baitch’s evidence on the basis that it was inconsistent or that the wording of his report required some correction. I did not regard any of these matters as adversely affecting his credit or his reliability. The principal reason I did not accept his evidence as to the most likely cause was because I preferred the evidence of Mr Ritchie and Dr Grantham about the state of the holes in the metal box to Professor Baitch’s assessment based on the photographs.

Interest

106. The plaintiffs claimed pre-judgment interest. There are various invoices in evidence referable for work done to the Property to rebuild it following the fire. However the dates from which interest should be calculated does not readily emerge. I propose to provide an opportunity for the parties to agree on an interest calculation, or to re-list it for my determination, in the event that they are unable to agree.

Orders

107. I make the following orders:

1. Judgment for the plaintiffs in the sum of $819,676.50 plus pre-judgment interest to the date of entry of judgment, as agreed or determined by me.

2. Direct the parties to notify my Associate of any agreed figure for interest or, failing agreement, the figure proposed by each party, and the contentions in support, within seven days.

3. Unless an application for a different order is made in writing to my Associate within seven days hereof, order the defendant to pay the plaintiffs’ costs of the proceedings.

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Decision last updated: 09 September 2015