Country Energy v Carrathool Shire Council

[2003] NSWCA 264

NEW SOUTH WALES COURT OF APPEAL

CITATION:    Country Energy v Carrathool Shire Council [2003]  NSWCA 264

FILE NUMBER(S):
40913 of 2002

HEARING DATE(S):             27/08/03

JUDGMENT DATE:               18/09/2003

PARTIES:
Country Energy
v
Carrathool Shire Council

JUDGMENT OF:      Meagher JA Ipp JA Foster AJA   

LOWER COURT JURISDICTION:             District Court

LOWER COURT FILE NUMBER(S):        1981 of 2001

LOWER COURT JUDICIAL OFFICER:   Cooper DCJ

COUNSEL:
A: R Williams QC, P Dwyer
R: RJH Darke SC, LV Gyles

SOLICITORS:
A: Ebsworth & Ebsworth
R: Minter Ellison

CATCHWORDS:
Challenge to judicial findings of fact.

LEGISLATION CITED:

DECISION:
Appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40913 of 2002

MEAGHER JA
IPP JA
FOSTER AJA

Thursday, 18 September 2003

COUNTRY ENERGY v CARRATHOOL SHIRE COUNCIL

FACTS

These proceedings arose out of the operation of a sewerage system in Hillston, South-Western New South Wales. The system comprised pipes running in different directions. Some were vitreous clay pipes, or iron and cement pipes, and others were made of PVC.

The respondent Council contended that the appellant had inserted creosote into the sewerage system, which resulted in major damage to the PVC piping, and necessitated costly rectification. Cooper DCJ found for the respondent, and awarded a verdict of $219,825.39.

HELD per Meagher JA (Ipp JA and Foster AJA agreeing), dismissing the appeal:

The trial judge held that an inference could be drawn from the ‘lay’ or non-scientific facts that the appellant was responsible for the creosote’s filtering into the system and causing the damage complained of. Such an inference was not only available, but demanded to be drawn. [19]

ORDER

That the appeal be dismissed with costs.

IN THE SUPREME COURT

OF NEW SOUTH WALES
COURT OF APPEAL

CA 40913 of 2002

MEAGHER JA
IPP JA
FOSTER AJA

Thursday, 18 September 2003

COUNTRY ENERGY v CARRATHOOL SHIRE COUNCIL

Judgment

1. MEAGHER JA:  This is an appeal by what, in effect, is a County Council against a Local Government Council.  In the District Court Judge Cooper had awarded the latter a verdict of $219,825.39 against the former.

2. I must say, at the outset, that I find his Honour’s judgment, apart from a few unimportant slips, an impressive document. 

3. The litigation arose out of the operation of a sewerage system located in the south western part of New South Wales in a town called Hillston.  Installation of the system commenced in 1976, and the system commenced to operate in 1978.  The system comprised pipes, running in different directions.  The totality of the system ends up at a pump called Pumping Station No. 5.  It is situate just a little to the west of Cowper Street.  From this point the sewerage is pumped eastwards along a PVC 200mm pipe for about 1500 metres to certain treatment ponds.

4. Further to the west of Pumping Station No. 5 is the town’s railway line, which runs in a North-South direction, parallel to Cowper Street.  The railway line is either unfenced, or inadequately fenced; at all events, it is always accessible to the public.

5. The appellant’s premises were (and, for all I know, still are) situated a little to the west of the pumping station.  They front onto a street called High Street, and back onto the railway line.  A branch of the sewer ran below the surface of the railway line close to the rear boundary of the appellant’s depot.  Access to that sewer line was available through a manhole known as N/2.

6. The line goes from N/2 to another manhole N/1, and thence to a third manhole L/3, from whence it makes its way to Pumping Station No. 5.

7. The line between N/2 and Pumping Station No. 5 comprised vitreous clay pipes and iron and cement pipes, and was a gravity-fed part of the system.  The area between Pumping Station No. 5 and the treatment plant 1,500 metres to the east of it was and is a PVC plant and is what the parties called a “rising main”, in the sense that it is not gravity-fed and requires the force of a pump to force the material which arrives at the pumping station to pass to the treatment ponds.

8. The respondent Council alleged (and his Honour found) that the appellant had inserted creosote into the manhole N/2 which caused major damage to the PVC piping in the rising main between Pumping Station No. 5 and the treatment ponds, such damage requiring costly rectification.  It is beyond dispute that it had both the opportunity and the motive to do so.  However, since every step in the respondent Council’s case was contested, it is desirable to set out the basic facts.

9. From the time it commenced operation in 1978 until October 1996 the sewerage system operated without any relevant leakages.

10. For some years before 1985 the appellant used a substance containing creosote for protection against termites.  This substance was stored in a 1400-litre white tank standing in the rear of the appellant’s premises, or perhaps on the railway line premises.  In early 1996 it was moved slightly, for reasons which seem to be undisclosed, to a point which was close to the appellant’s back fence and adjacent to the manhole N/2.

11. In the mid-1980’s the use of creosote was banned by the unions.  At about this time the Griffith area manager of the appellant approached Mr Millay, the respondent’s Director of Operations, and said “We have a tank full of creosote which we can’t use there and we don’t know what to do with it.  Can you blokes use it?”  Mr Millay replied “We are not allowed to use it any more either so it’s no good to us.”

12. In August/September 1996 there was a clean up at the appellant’s depot and an officer of the appellant let know everyone who was interested that the appellant would be happy to get rid of the tank.  The local golf club nibbled at the idea of taking it, but backed off when it was informed that the tank contained creosote.

13. Shortly thereafter, in the October/November period, cracking commenced to appear at the base of the sewerage pipes, which started breaking (as became apparent when sewage started to seep up out of the ground).  These leakages were all situated near Pumping Station No. 5, either in the pipes going from the Pumping Station to the ponds, or in Cowper Street close to the Station.

14. On 4 or 5 December 1996 an officer of the appellant agreed with a local farmer called Mr Rathwell to give him the tank.  He informed Mr Rathwell that there would be solidified creosote in the tank.  On 8 December Mr Rathwell and a nephew went to collect the tank, but in the process of doing so liquid from the tank flowed out through a “breather hole”.  Mr Rathwell noticed a strong smell of creosote.  On 11 December the tank was moved by two of the appellant’s workmen to the farm of Mr Rathwell.  On that day the appellant’s officers noticed black tar-like material on the ground near the manhole N/2, and a strong smell of creosote.  The tank seemed comparatively empty by the time it reached Mr Rathwell’s farm.  Thus, it would seem that the tank was emptied between 8 December and 11 December.

15. On 4 February 1997 the manhole N/2 (which, it will be remembered, was located extremely close to the appellant’s back fence) was opened, and it was revealed that it was covered with a black greasy substance which smelt strongly of creosote.  An inspection of the manhole N/1 revealed a similar state of affairs.

16. All defective pipes have been removed and replaced.  In the six years since then there has been no trouble.

17. It seems to have been agreed that there was no other known source of creosote in the locality.

18. In the months December 1996 – April 1997 various samples were taken from the tank itself, from the ground where the tank stood, from inside and outside the manhole N/2, and from the affected pipes.  All results show that each sample was similar to the others and each was consistent with the presence of creosote.  Moreover, a body of scientific evidence was adduced which tended to the conclusion that creosote (at least in some quantities, and under some conditions) was dangerous to pipes such as were used in the respondent’s sewerage system.  The details of the scientific evidence do not really matter.

19. In what is, as I have said (I hope with sufficient respect) an extremely able judgment, Judge Cooper held that an inference could be drawn from the “lay” or non-scientific facts that the appellant was responsible for the creosote filtering into the system and causing the damage complained of.  Such an inference was not only available but demanded to be drawn.

20. His Honour then held, again with conviction, that none of the scientific evidence rebutted that inference.  Indeed, to my mind, it strengthened it.

21. I would dismiss the appeal with costs.

22. IPP JA: I agree with Meagher JA.

23. FOSTER AJA:   I agree with Meagher JA.

*****

LAST UPDATED:             18/09/2003