Douglas & Ors v Water Administration Ministerial Corporation

[1996] HCATrans 103

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S131 of 1995

B e t w e e n -

D.B & A.M. DOUGLAS, R.S. & D.E. INGLIS, K. & L. RYAN, R. & J. STAGGS, SNOWDAY HOLDINGS PTY LIMITED, BOSHAN HOLDINGS PTY LIMITED and THE OTHER PERSONS REFERRED TO IN THE SCHEDULE

Applicants

and

WATER ADMINISTRATION MINISTERIAL CORPORATION

Respondent

Application for special leave to appeal

DAWSON J
TOOHEY J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 15 APRIL 1996, AT 2.27 PM

Copyright in the High Court of Australia

MR B.J. GROSS, QC:   May it please the Court, I appear with MR T.J. BOYD for the applicants.  (instructed by Matthews Williams)

MR P.D. McCLELLAN, QC:   May it please the Court, I appear with MR B.M. GREEN for the respondent.  (instructed by P.F. Percival, Department of Land and Water Conservation)

DAWSON J:   Mr Gross.

MR GROSS:   Your Honours already have our outline of argument but we felt to render even more simple a potentially complex factual matter, we have prepared a further outline, of which I hand up four copies, which actually repeats, in text, the arguments we will be putting to your Honours now, orally.  Your Honours, we also take up some of the points raised in the respondent’s outline of submissions.

Your Honours will see there are five issues which we have highlighted as potentially arising in this case.  The first two issues of causation and misuse of the court expert’s report were matters upon which we failed.  Can I just address matters (3), (4) and (5) briefly, your Honours?  Your Honours will see in relation to issue three, the Alleged Estoppel, that only Justice Mahoney mentioned this, and he raised it as a difficulty; it was not determinative.  Nevertheless, the respondents take up that particular point in their own argument; the argument being that if we did not appeal in respect of Justice Cole’s decision in favour of the Council, thereby we are unable to argue negligence against the Corporation in respect of whom we did lodge an appeal.

TOOHEY J:   It does not have to be put as strongly as that, does it, Mr Gross?  The argument can be that if there is no appeal against the finding against the Council ‑ at least the dismissal of the action against the Council, then there is no finding of negligence against the Council in respect of what it did, and that makes it difficult, not necessarily as an error of estoppel but simply as a matter of argument, then to contend that what the Water Administration Corporation did was negligence.

MR GROSS:   The difference, we submit, which differentiates the two situations is that the Council relied upon the respondent Corporation which had the expertise, whereas the Council had no real knowledge about hydrololic matters and correct planning and designing of permanent levees.  So, in our submission, we can let the Council go.  If, in fact ‑ ‑ ‑

TOOHEY J:   But, is that the basis upon which the judge dismissed the claim against the Council?

MR GROSS:   He dealt with the matter at large in respect of both on the basis which we will now discuss.  But he plainly found and, indeed, we accepted ultimately at trial that the Council was entitled to depend upon the superior expertise of the Corporation, and it was common ground that they did rely and they did not themselves have particular expertise in relation to the matter.  Now, as I said, both matters, that is causation and the no breach of duty, were found indiscriminately in respect of both defendants at trial. 

Can I then turn to issue (4), namely whether a duty of care existed.  This was argued strenuously by the respondent before Justice Cole.  Ultimately Justice Cole found there was a duty, I think, in relation to misfeasance in an operative sense, although qualified that by saying that there could be no duty unless we could first formulate the level of future flood in respect of which it was the intention or purpose of the levee to guard against.

TOOHEY J:   Are you using “misfeasance” in the sort of technical misfeasance versus nonfeasance sense?

MR GROSS:   Yes, I am.

TOOHEY J:   Can you show us where that finding appears?

MR GROSS:   Your Honours, Justice Cole, 27 to 33.  The discussion involves referring to a number of High Court decisions and, your Honours, it is to be found in no particular sentence but ultimately, his Honour, in referring to Hayman’s Case, quotes passages to the effect that, bottom of page 29, top of page 30:

public authority which enters upon an exercise of a statutory power may place itself in a relationship to members of the public which imports a common law duty to take care.

TOOHEY J:   That is not misfeasance, is it, necessarily?

MR GROSS:   Well, the relevant function being one of supervision, advice and that was misfeasance in the performance.

TOOHEY J:   Do you mean negligence or do you mean something more than negligence?

MR GROSS:   I mean negligence in relation to telling the Council what was a reduction in the height of the permanent levee which would, nevertheless, provide a reasonably safe and defensible levee.

TOOHEY J:   I was asking you these questions because if you look at Justice Mahoney’s judgment at page 141, about line 8, he says:

Ultimately at the trial and on appeal the plaintiffs’ claim has been pursued on a limited basis in negligence ‑

Is that an accurate description?

MR GROSS:   It is if, in fact, one treats that description as being the way in which Justice Sheller summarised the case - I will just turn that up, your Honours ‑ where, in discussing the issue of negligence, his Honour summarised our case on negligence as coming down to the four considerations at page 176.  Justice Cole had rejected the concept of general reliance or specific reliance and ultimately the case came down to negligence in that task of supervision, control and advice.  That is, where a reasonably safe and defensible permanent levee had been agreed upon but, nevertheless, an officer of the Corporation without authority and without relevant expertise to make a decision of that dimension, gave the Council permission to construct the levee with an extra 1600 metres of lower permanent levee, which had the effect of making the permanent levee one which appeared to be defensible but, in fact, was not because it could not be defended successfully in the time available while the flood was rising.

TOOHEY J:   When you speak of permanent levee, you are speaking, what, of the 1976 flood level height plus a metre, except in those cases where .04 of a metre was regarded as sufficient where there are roadways involved?  Is that a correct statement of the position?

MR GROSS:   Correct, subject to this rider that the exception is related to 800 metres along Tottenham Road, which everyone accepted as part of the original design, and some very minor areas where roads were crossed or overhead lines went over the permanent levee.  So that the change was from a lower levee, in effect, 800 metres long to one which is three times that, namely 2,400 metres of 0.4 metres above the 1976 historic flood level.  Now, Justice Cole said through a duty of care we could not depend upon general reliance or specific reliance because there was no reliance which gave rise to any cause or consequences, whereas our case was that because they had that permanent levee, which they could see and which they trusted in, they refrained from taking the necessary steps to protect themselves from damage by moving the movable goods out of the way of the flood.

About 90 per cent, your Honours, of the damage was to movable goods which had they had sufficient realisation of what would have occurred, could have been moved out of the path of the flood.  Your Honours, can I just come back to duty of care and say this, that Justice Sheller accepted there was a duty of care at 176, line 1 of the type described:

Was WRC, having entered upon the exercise of its statutory power and having therefore, placed itself in a situation where it was bound to exercise due care in doing so, in breach of that duty of care?

Now, Justice Mahoney only doubted whether a duty of care existed.  He did not finally resolve the matter, and Justice Meagher agreed with Justice Sheller.  So that, your Honours, we submit there are important duty of care issues.

TOOHEY J:   I am not clear whether you are speaking of duty of care or breach of duty of care.  Did anyone say there was no duty of care owed by the Corporation?

MR GROSS:   Well, your Honours, Justice Cole used terms which seemed to cover both categories by, in effect, saying that the problem the plaintiffs had was the finding in advance a specific level of flood against which the levee is to provide protection, and Justice Sheller took that up at the bottom of page 177, the top of page 178, by saying:

With respect I agree with Cole J when he said that, if the duty was to protection against some higher flood, it was necessary to define that different flood of design.

TOOHEY J:   That is again speaking of breach of duty, is it not, or possible breach of duty?

MR GROSS:   Your Honour, we would accept ‑ ‑ ‑

TOOHEY J:   I thought the issue raised by your fourth matter in your outline was whether or not a duty of care existed, as opposed to whether there was a breach of any duty of care.

MR GROSS:   Your Honour, I accept that the judgments really ought to be read as meaning “no breach” rather than “no duty”.

TOOHEY J:   Yes, I understand that.

MR GROSS:   However, Justice Cole used language which really looked like an inability to formulate a duty unless you know in advance how high the next flood, or the next highest flood is going to be.

TOOHEY J:   Well, that is not a difficulty in formulating the existence of a duty, is it?  It might be a difficulty in identifying what the duty was and what it involved, but I take it we are not in the area of whether any duty of care existed at all. 

MR GROSS:   Your Honours, we would submit not, although we would make these points.  The respondent at trial and before the Court of Appeal made lengthy submissions saying “no duty of care”.  They succeeded to the extent that the question of reliance was put out of the way but, in any event, it was, for practical purposes, found there was a duty of care and breach was then considered.  However, the respondents here have not, in their written argument, foreshadowed these duty of care difficulties but, we submit, there are real questions that are capable of resolution.

DAWSON J:   But, Mr Gross, in the end - and that is thrown up by Justice Toohey’s questions - the difficulties you have, or the difficulties that are experienced in these case, are relating the facts to acknowledge principles.  Where is the principle of law that is involved that would engage the attention of this Court?

MR GROSS:   Your Honour, in relation to duty of care, and allowing for the difficulties with the language we have just discussed, a duty of care or even the question of breach of duty ought not have to be defined in terms of a plaintiff being able to point to and predict a specific record level of flood to occur in the future, because one should not have to specify a particular amount of water, rather, the question of duty of care and breach is concerned with ‑ ‑ ‑

DAWSON J:   But that is a question of identifying a particular duty of care in the context of the particular facts.  It is more a question of fact than a question of principle.

MR GROSS:   We would resurrect “principle” in this way by saying that the duties protect against foreseeable risks and it is error to require a party to formulate duty or breach in terms of protection against a particular future hazard defined by precision, in this case by reference to the height of the water.  Your Honours, I think I might move on if I can. 

DAWSON J:   Yes.

MR GROSS:   The fifth issue; the question of good faith by the respondent:  ultimately the Court did not get to that because, having found no negligence, absence of good faith could scarcely arise.  Your Honours, the good faith issue, however, we submit, is a live one in the sense that the alterations of the design were based upon conversations with Mr Mittelheuser of the respondent and the transmission of documents to Mr Mittelheuser when it was accepted and it was the respondent’s position, as published, and as put in its statements and its evidence, before Justice Cole, that he had no authority to deal with such a change; that his obligation in the honest and conscientious performance of his duty was to refer the proposed changes to his superiors who had the requisite expertise and had the ability to give full and appropriate consideration to the implications in terms of safety of the intended changes.  Your Honours, we would submit that there are live issues concerning absence of good faith and obviously that then comes back to the negligence questions.

GUMMOW J:   What do you say, Mr Gross, about what is said by Mr Justice Sheller, at 194 line 16, where he says:

I see no reason for disturbing his Honour’s conclusion that even if the levee bank had been built as originally designed the flood would have overtopped it ‑

et cetera?

MR GROSS:   Your Honour, that is the causation issue, issue (1).  Can I come to that now, if I may?  Now, your Honours, the judgment of Justice Sheller deals with the causation issue in two places, which we have indicated in the submissions.  Would your Honours go to page 169 and your Honours will see that at line 15 his Honour questions Mr Dole as to what additional heights above the originally specified levee would have been required to prevent overtopping.  Your Honours will see it is a series of ranges expressed up to various heights, depending whether it is west, south or east.  Your Honours will then see that on page 170 his Honour quotes Justice Cole as referring to this range of figures at line 8:

As exhibit 9A demonstrates and the computer simulations predict, and as all of the hydrological experts now accept ..... overtopping would have been at least up to 0.7 ‑

so, in other words, what one has done is taken, or formally arrange and made it a minimum.  But then that error is repeated, your Honours, at 170, and then advanced upon when, at line 15 ‑ the error was, as we have outlined in the submissions, that his Honour assumed that with a five metre flood there would be overtopping of between .3 and .7 and so those minimas have now become a fixed ranged between .3 and .7, and then his Honour assumed you then had to add on to that an extra .2 of a metre if the flood was 5.2 metres rather than 5.0 and an extra 0.15 metres in consequence of excluding water from the town if the defence through the levees is successful.

Your Honours, it was acknowledge by Justice Sheller that this was error, as his Honour points out at the bottom of page 170, the top of page 171.  Your Honours, the error is then repeated at 171, lines 15 to 20, where his Honour says:

Assuming a 5.0 metres flood, with no freeboard the overtopping would have been at least -

those figures, and then goes on to talk about

With a flood of 5.2 metres height, or 5.3 metres height ‑

So the consequence is that his Honour rose or lifted the height of the water at the peak point of flood at its ultimate stage by .35 of a metre which, your Honours, was an enormous amount of water compared to the earlier levels of rise and, of course, had impact upon his Honour’s conclusion about the defensibility of the levee if it had been built to the original scenario.  Now, his Honour Justice Sheller got out of that difficulty at page 172 by saying, at line 3:

However the passage later in his judgment, which I have already quoted, shows that his Honour proceeded on the basis that the overtopping would have “at least up to 0.7 metres in some portions of the levee and down to 0.3 metres in others.”

So, in other words, your Honours, the error was plainly there and infected the judgment on the causation issue.  By pointing to another passage where the expression “at least” was referred to, that merely, in our submission, compounded the error but did not remove the consequence on the plaintiff’s prospect of success of this fundamental misconception of the facts and, in our submission, it was then a situation where his Honour Mr Justice Cole was disabled from obtaining an advantage in relation to seeing and hearing the witnesses and, your Honours, the Court of Appeal ought to have recognised that rather than saying, “We see no reason for reaching a different view”.  Your Honours, I would like to address the the final issue of negligence.  I seek a short extension.

DAWSON J:   We have your written submissions, Mr Gross.

MR GROSS:   Your Honours do, and your Honours that thoroughly states our position.

DAWSON J:   Yes.  Thank you, Mr Gross.  Mr McClellan.

MR McCLELLAN:   If the Court please.  It is the respondent’s submission that we are dealing with no matters of principle; only matters o fact.  Might I briefly direct some oral submissions to the document my friend has given the Court today.  With respect to the issue of causation, Justice Gummow has adverted to the remarks in the judgment of Justice Sheller.  Might I take the Court back to the trial judge’s summation of the issue which was effectively adopted in the Court of Appeal?  It is at page 76 of the book, beginning at line 10. 

His Honour analyses there the factual material available in relation to the events of what is referred to as “the Monday afternoon”.  The town flooded late on the Monday afternoon and was engulfed increasingly during that evening.  His Honour’s summation there is based upon numbers which are, without question, the correct numbers and the applicant has never suggested otherwise, and his Honour then goes on to conclude there that there was an unexpected surge which, consistent with the computer material that was tendered at the trial, demonstrated that taking the correct numbers, as his Honour has done, the town would have been engulfed in any event.  So that the matter, we respectfully submit, could begin and end at that point.  There was, regrettably, in the circumstances of this particular event, no chance of the town being saved at all. 

The second issue in relation to the expert’s report arises in this way and, again, is resolved as a matter of fact.  Justice Cole directed that an expert, Mr Dole, be engaged to identify the issues upon which the various experts could agree and report back to him on those matters as well as the matters upon which there was disagreement, so as to expedite the trial, and that was done.  Now, that report reveals the fact that all experts in the course of those discussions agreed that if there was a duty of care it was fulfilled by the adoption of the 1976 flood of record as the appropriate level at which to protect the town.  All the experts at that point of time also agreed that there should be added, as a matter of engineering practice, a freeboard, which should be up to a metre, unless it was along the line of a made road, and that road could either be a sealed road, as was Tottenham Road, or a gravel surface road, but the roadway itself had the benefit of compaction and

proper construction and adequate width, so that a lower freeboard was appropriate.

The assumption appears to have been made by the applicants at that point in time, that at a location called “Bexon’s Corner” the evidence would disclose that there was not a made road.  As it turned out at the trial, the evidence was to the contrary and the made road was proved in that location.  What then happened in the debate between the experts at the trial was Professor Pilgrim, who gave evidence for the plaintiffs, departed from the agreement reflected in the Dole report and said, in his view, there should have been a one metre freeboard in that section because it was not a sealed road.

Now, the trial judge, and then the judges of appeal, do not take, with respect to my friend’s submission, the Dole report at face value, they, each of them, go to the evidence that was given at the trial and discuss the evidence of Professor Pilgrim, and the others, and all come to the same conclusion and that is that, in the circumstances of this case, it was appropriate to adopt a freeboard of one metre, unless there was a roadway where .4 was appropriate irrespective of the length of that roadway.  That was the resolution of that factual matter which was ultimately determined by all of the judges, and our written submissions contain the relevant references.

Then, as far as the good faith defence is concerned, that issue was determined again by the trial judge at application book page 78; by Justice Mahoney at application book 146 and Justice Sheller at application book 194.  So that by reference to that statutory defence alone, we have succeeded at all levels of this matter and, in my respectful submission, there is no reason for this Court to intervene.  It follows that, in our respectful submission, no matter of principle is raised.  Undoubtedly, grievous loss was suffered by various people in a very tragic set of circumstances but there is no issue of principle.  The fundamental matters that I have addressed were all dealt with as matters of fact, properly so, and determined in the ordinary way.  For those reasons we would submit this is not a matter for a grant of special leave.  If the Court pleases.

DAWSON J:   Thank you Mr McClellan.  Mr Gross.

MR GROSS:   Your Honours, on the causation issue, my learned friend relied upon the other conclusions of Justice Cole, that the unexpected surge, late on the final day, was the subject matter of findings by Justice Cole and therefore, on that basis alone, the causation conclusions should stand, in effect, notwithstanding the admitted error in relation to the 0.35 metres. 

Your Honours, when one goes to those passages at page 76, in Justice Cole’s judgment, your Honours will see that the measuring of the rate of the surge developing is qualified, on all occasions, by reference to the expression “at least”, and your Honours will see that at 76, line 15, “a rise of at least 0.3 metres” and, at line 22, the “overtopping would have been at least up to 0.7 metres”.  Now, your Honours, that expression “at least” indicates a minimum but, nevertheless, leaves room for the operation of the add-on factor of .35 metres, which plainly infected his Honour’s concurrent reasoning in relation to the causation issue and, we would submit, the intrusion of the words “at least” where, in fact, they were not in expert’s report in the passage I have quoted, confirms rather than removes the error. 

The argument that the Court of Appeal was able to go to the evidence at trial itself does not dissolve the difficulties because if the question of whether the flood would have been prevented depended upon expert evidence, the Court of Appeal was in no position to choose between conflicting schools of thought when Justice Cole had wrongly discounted the plaintiff’s experts by reason of the error we have just described.  Thank you, your Honours.

DAWSON J:   Thank you, Mr Gross. 

Whilst, at first instance and on appeal to the Court of Appeal, this case raised questions of importance to the numerous parties, the questions which are thrown up by this application for special leave to appeal are essentially questions of fact which are not appropriate for decision by this Court.  No question of principle emerges which would justify the Court in granting special leave to appeal.  Special leave is accordingly refused.

MR McCLELLAN:   I am instructed to ask for costs, your Honour.

DAWSON J:   Mr Gross?

MR GROSS:   I do not have anything to say.

DAWSON J:   It is refused with costs.

AT 2.57 PM THE MATTER WAS CONCLUDED