Gunns Limited v State of Tasmania
[2016] TASFC 7
•21 September 2016
[2016] TASFC 7
COURT: SUPREME COURT OF TASMANIA (FULL COURT)
CITATION: Gunns Limited v State of Tasmania [2016] TASFC 7
PARTIES: GUNNS LIMITED (Receiver and Manager Appointed)
(In Liquidation)
v
STATE OF TASMANIA
FILE NO: 2573/2015
JUDGMENT
APPEALED FROM: Gunns Limited v State of Tasmania [2015] TASSC 52
DELIVERED ON: 21 September 2016
DELIVERED AT: Hobart
HEARING DATE: 13 April 2016
JUDGMENT OF: Blow CJ and Tennent J
CATCHWORDS:
Torts – Negligence – Essentials of action for negligence – Duty of care – Reasonable foreseeability of damage – Affecting public authorities – Whether Minister owed duty of care to determine application for water licence within reasonable time.
Aust Dig Torts [27]
REPRESENTATION:
Counsel:
Appellant: S B McElwaine SC
Respondent: M E O'Farrell SC, D R Osz
Solicitors:
Appellant: Shaun McElwaine + Associates
Respondent: Solicitor–General of Tasmania
Judgment Number: [2016] TASFC 7
Number of paragraphs: 83
Serial No 7/2016
File No 2573/2015
GUNNS LIMITED (Receiver and Manager Appointed)
(In Liquidation) v STATE OF TASMANIA
REASONS FOR JUDGMENT FULL COURT
BLOW CJ
TENNENT J
21 September 2016
Order of the Court
Appeal dismissed.
Serial No 7/2016
File No 2573/2015
GUNNS LIMITED (Receiver and Manager Appointed)
(In Liquidation) v STATE OF TASMANIA
REASONS FOR JUDGMENT FULL COURT
BLOW CJ
21 September 2016
Gunns Limited, the appellant in this case, is in liquidation. In more optimistic times it operated a number of Tasmanian vineyards, constructed dams on them, and irrigated them. This appeal relates to a vineyard near Evandale on which Gunns constructed a dam. To construct and use that dam Gunns needed a permit to undertake dam works under s 156 of the Water Management Act 1999 ("the Act"), and also a licence to take water from a watercourse under s 63 of the Act. Gunns applied for a dam permit and a water licence, was granted the dam permit, constructed a dam at a total cost of almost $750,000 while the water licence application was pending, and then learned that it would not be granted a water licence allowing it to take sufficient water for the construction of the dam to have been worthwhile. There had been a significant change of policy, not as to the granting of water licences, but as to the calculation of "water allocations" – maximum water quantities to be specified in licence conditions. Water licences are granted by the Minister administering the Act and his or her delegates. Gunns sued the State of Tasmania claiming damages for negligence, calculated by reference to its wasted expenditure. Its action was tried by Pearce J and dismissed: Gunns Limited v State of Tasmania [2015] TASSC 52. This is an appeal from that judgment.
The learned trial judge's analysis of the relevant statutory scheme, his summary of the facts, and Gunns' grounds of appeal are all set out in the judgment of Tennent J and need not be repeated. I have read her Honour's reasons in draft form, and agree that this appeal should be dismissed, but in some respects my reasoning differs from hers.
The duty of care issue – introduction
Gunns' principal contention is that the Minister owed it a duty of care in tort, which obliged him or her to make a decision on the application for a water licence within a reasonable time. It is common ground that the Minister had a public law duty to make a decision on the application within a reasonable time. The question is whether the Minister simultaneously owed Gunns a duty of care, the breach of which could give rise to an entitlement to damages for negligence.
As the learned trial judge correctly observed in his reasons at [41], the circumstances of this case fall outside any accepted category of duty. In such a novel situation, it is necessary to undertake an analysis of the "salient features" of the relationship between the parties in order to determine whether there was a duty of care: Perre v Apand Pty Ltd [1999] HCA 36, 198 CLR 180 at [198]; Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54, 211 CLR 540 at [149], [243]. The principal factors addressed by the learned trial judge in his reasons at [44]-[59] included foreseeability, the role of government in society, control, vulnerability, reliance and indeterminacy.
Forseeability
In his reasons at [45] the learned trial judge concluded that it was not reasonably foreseeable that, if the Minister did not determine the water licence application within a reasonable time, Gunns might go ahead and build a dam without determination of its application and without the benefit of a water licence. Tennent J has agreed that that was not reasonably foreseeable. I respectfully disagree with their Honours. There was evidence that on a number of past occasions Gunns had taken precisely that course, first applying for a water licence, then building a dam in the hope that a water licence would be granted, and afterwards prompting appropriate officers to do something about the determination of the water licence application. It was reasonably foreseeable that Gunns might again build a dam whilst its water licence application was pending, and suffer damage as a result of not getting a satisfactory licence.
But that is not the end of the matter. There is ample authority that foreseeability of harm, without more, will not be sufficient to establish the existence of a duty of care in tort: Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61, 205 CLR 254 at [35]; Sullivan v Moody [2001] HCA 59, 207 CLR 562 at [25], [42], [64]; Graham Barclay Oysters (above) at [9], [32], [84]-[85]. It is therefore necessary to consider the salient features other than foreseeability. I agree in substance with the reasons of Tennent J in relation to the other salient features, but wish to make comments of my own in relation to them.
Incoherence with the statutory scheme
It is necessary to consider whether the suggested duty of care would or could result in the Minister owing a duty of care in tort to a potential plaintiff that would give rise to an obligation that would be inconsistent or irreconcilable with his or her public law duties under the Act. In Sullivan v Moody (above), which concerned claims for damages by parents who claimed they had been falsely accused of child sexual abuse by doctors working in public hospitals, the High Court said at [60]:
"The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. A medical practitioner who examines, and reports upon the condition of, an individual, might owe a duty of care to more than one person. But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations."
The High Court held in that case that no duty of care was owed to persons suspected of child sexual abuse by those who had the professional and statutory responsibilities of investigating and reporting upon allegations of such abuse.
Similarly, in Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278, 74 NSWLR 102, the New South Wales Court of Appeal held that when a regulatory authority made a decision whether to issue a clean-up notice under an environmental statute, it did not owe a duty of care to require the interests of a suspected polluter to be taken into account because there would otherwise be a conflict between the purposes of the relevant statutory provisions and the interests of the suspected polluter. Allsop P (as he then was), with whom Beazley and McColl JJA agreed, reached that conclusion at [115].
The legislation in question in this case has been enacted for public purposes. The relevant objectives are set out at length in s 6 and Sch 1 to the Act. The relevant public purposes concern the allocation of the State's water resources and the protection of the environment. It is true that some objectives are concerned with the "economic development of water resources" and "economic benefits resulting from the sustainable use and development of water resources for … commercial activities dependent on water": s 6(1)(a) and (b). However, when the Minister or a delegate makes a decision whether to grant a water licence and, if so, upon what conditions, the decision-making process requires a taking into account of the competing interests of applicants and other users of water, as well as any possibility of desirable future development, and the need to protect the environment.
Of course Gunns contends only that it was owed a duty of care to make a decision in relation to a water licence application within a reasonable time, as distinct from a duty to make a particular type of decision or to give weight to particular factors. However, if there were such a duty of care, the Minister and his or her delegates would be obliged to take the economic interests of water licence applicants, and possibly others, into account when deciding how quickly to process water licence applications. In my view that could result in a conflict. It is not in the public interest that the tempo of the work that needs to be done in the complicated and sensitive task of assessing a water licence application should be determined by a decision-maker who has a duty to avoid harming an applicant's economic interests through delay. To put it bluntly, it is not in the public interest that decision-making should be rushed as a result of a duty to avoid harm to an applicant's economic interests. In that respect, I consider that there is a lack of coherence between the suggested duty and the statutory scheme.
Control
The relevant principle was stated by Gaudron, McHugh and Gummow JJ in Brodie v Singleton Shire Council [2001] HCA 29, 206 CLR 512 at [102] as follows:
"… on occasions, the powers vested by statute in a public authority may give it such a significant and special measure of control over the safety of the person or property of citizens as to impose upon the authority a duty of care. This may oblige the particular authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger. In this regard, the factor of control is of fundamental importance." [Footnote omitted.]
It is true that the Minister had control of the decision-making process in relation to Gunns' water licence application. However this was not like a situation where a statutory authority knows of a risk to the public as a result of a road surface in a dangerous condition, vulnerability to a bushfire, or any similar risk. It was not a situation where a public authority had assumed the responsibility of controlling a risk to which the public was exposed.
Vulnerability
The concept of "vulnerability" as a factor relevant to the existence or non-existence of a duty of care in tort was explained by Gleeson CJ, Gummow, Hayne and Heydon JJ in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16, 216 CLR 515 at [23] as follows:
"'Vulnerability', in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, 'vulnerability' is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. So, in Perre, the plaintiffs could do nothing to protect themselves from the economic consequences to them of the defendant's negligence in sowing a crop which caused the quarantining of the plaintiffs' land. In Hill v Van Erp [(1997) 188 CLR 159], the intended beneficiary depended entirely upon the solicitor performing the client's retainer properly and the beneficiary could do nothing to ensure that this was done. [Footnote omitted.]
In this case, Gunns was well able to protect itself from the consequences of a failure to make a decision within a reasonable time in respect of the water licence application. The following courses of action were open to Gunns:
· It could have decided not to build the dam unless and until a satisfactory water licence was granted.
· It could have made a fresh permit application if its dam permit expired without construction having commenced.
· It could have made an application under s 19(1) of the Judicial Review Act 2000, seeking an order for review on the ground that there had been an unreasonable delay in making the required decision.
· It could have instituted proceedings against the Minister seeking an order in the nature of mandamus: Supreme Court Rules 2000, r 627(2)(b); Tasman Quest Pty Ltd v Evans [2003] TASSC 110, 13 Tas R 16.
This was not a situation in which Gunns' interests were vulnerable, in the sense that it could not reasonably be expected to adequately safeguard its interests from harm.
Reliance
At trial it was part of the appellant's case that in September 2008 the section head of the relevant department's Water Management Branch, Mr Shackcloth, told Gunns' operations manager for Tamar Ridge Wines, Mr Lyon, that a water licence would issue in accordance with Gunns' application as soon as Gunns had constructed the dam and had obtained and submitted a post-construction report. In his reasons at [71] the learned trial judge found that Mr Shackcloth did not ever represent to Mr Lyon that the water licence would issue to Gunns.
Under s 56(1)(b) of the Act, it was possible for a water licence to be endorsed with a water allocation that specified the maximum volume of water that the licensee was permitted to take from the watercourse in question. The evidence established that such endorsements were common. Decision-making in relation to water allocations had to accord with the applicable statutory objectives, as well as the requirements of ss 63 and 64. In the circumstances, Gunns had no reasonable basis for assuming that it would be granted a licence with a particular water allocation. It is true that an assessment of the likely allocation was made in 2005. But where environmental factors are concerned, it is not uncommon for government policies to change, to the benefit of the environment and to the detriment of those who wish to profit from exploiting natural resources.
Reliance will be a factor weighing in favour of the existence of a duty of care only if it is reasonable: Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556 at 571; Tepko Pty Ltd v Water Board [2001] HCA 19, 206 CLR 1 at [47], [76]; Graham Barclay Oysters (above) per Gummow and Hayne JJ at [149]. In the circumstances, any reliance by Gunns on the Minister to grant a licence with a water allocation satisfactory to it was unreasonable, and therefore does not weigh in favour of a conclusion that it was owed the suggested duty of care.
Indeterminacy
When a novel duty of care is asserted in an economic loss case, one important policy consideration is "the law's concern to avoid the imposition of liability 'in an indeterminate amount for an indeterminate time to an indeterminate class'": Bryan v Maloney (1995) 182 CLR 609 at 618 per Mason CJ, Deane and Gaudron JJ; Perre v Apand Pty Ltd (above) at [15], [32], [106]-[107]. Such indeterminacy was treated by the High Court as a factor weighing against the conclusion that doctors and hospital authorities owed a duty of care to child sexual abuse suspects in Sullivan v Moody (above) at [61]-[63].
In this case, if the suggested duty of care exists, there is no reason why it should be owed only to water licence applicants. The granting of a water licence may have a significant impact on the profitability of existing or proposed businesses that draw, or might draw, water from the same watercourse or water resource. The Minister is required by s 63(d) to have regard to the interests of each "major user of water from that water resource". Under s 65(2)(b), the Minister is required to give notice of each water licence application in a local newspaper, and to "invite written representations from any person who may be affected by the application". If the suggested duty of care exists, the Minister may well owe anyone whose interests might be affected by such an application a duty to make a decision within a reasonable time. And a breach of that duty could result in the State being exposed to claims for damages for all sorts of economic loss by many and various actual and potential water users.
The duty of care issue – conclusion
Although I have concluded that the Minister could reasonably have foreseen that his failure to make a decision within a reasonable time might result in economic loss to Gunns, the other factors that I have addressed all weigh against the conclusion that the Minister owed the suggested duty of care. In the circumstances, the learned trial judge was correct in concluding that no duty of care was owed.
Ground 2 – Lack of findings
Ground 2 of the notice of appeal asserts that the learned trial judge failed to make findings of fact as to what enquiries were made on behalf of Gunns to the State about the water licence application before Gunns constructed the dam. If there was such an error on the part of the learned trial judge, it was inconsequential because no duty of care existed.
This Court was referred to evidence about the conversation between Gunns' Mr Lyon and the Department's Mr Shackcloth in September 2008, shortly before construction of the dam commenced. The learned trial judge made detailed findings about that conversation in his reasons at [71]. Those findings were adverse to Gunns. Counsel for Gunns did not direct the Court to any other evidence as to enquiries made on behalf of Gunns before the construction of the dam. I therefore infer that there was no such evidence. It follows that no further findings were called for. This ground must fail.
Contributory negligence
The learned trial judge correctly concluded that there was no duty of care but, in case he was wrong about that, went on to determine that a 40% reduction for contributory negligence would be just and equitable if there were such a duty. Ground 3 of the notice of appeal contains contentions that his Honour gave inadequate reasons for that conclusion, and failed to make particular findings favourable to Gunns. As his Honour had undertaken a thorough analysis of the facts, and had concluded that no duty of care was owed, I consider that his reasons for a 40% reduction were adequately stated. It is both common and appropriate for reasons to be stated very briefly in relation to conclusions that will become significant only in the event of a successful appeal. It is not necessary for a trial judge, when apportioning damages to take account of contributory negligence, to repeat findings of fact that are obviously relevant to that apportionment. This ground must also fail.
Conclusion
For the reasons stated, the appeal should be dismissed.
File No 2573/2015
GUNNS LIMITED (Receiver and Manager Appointed)
(In Liquidation) v STATE OF TASMANIA
REASONS FOR JUDGMENT FULL COURT
TENNENT J
21 September 2016
On 3 October 2011, the appellant caused a writ and statement of claim to be filed in this Court. By the statement of claim, the appellant sought damages from the respondent. There were three bases for the claim, namely negligence, estoppel and negligent misstatement. On 13 November 2015, the action commenced by the appellant was dismissed by Pearce J. The appellant now appeals that decision. The grounds of appeal are as follows:
"The grounds of the appeal are that the learned judge erred in law and/or in fact as follows:
1 He wrongly determined on the facts as found that the respondent did not owe a duty of care to the appellant, the content of which required the respondent:
(a) to exercise the statutory power of approving or refusing the water licence application pursuant to either section 63 or section 64 of the Water Management Act 1999 within a reasonable time of the date of lodgement of such application;
(b) to take such steps, to give such advice and to make such decisions as a reasonable Minister, his or her delegate and/or his or her officers, with the same power and resources would have taken, given or made in the circumstances and in respect of the assessment and determination of the water licence application; and/or
(c) to advise the appellant in a timely way if it was considered that the water licence application would be or was likely to be refused.
2 On the duty of care question (and separately from the misstatement claim), he failed to make findings of fact, or failed to make findings in accordance with the evidence, as to what inquiries were made on behalf of the appellant to the respondent about the water licence application and the grant of a water licence before the appellant acted upon the permit to construct the dam.
3 On the contributory negligence question he:
(a) failed to expose his reasoning process and failed to make specific findings of fact in order to found his conclusion of an apportionment of 40%;
(b) failed to make findings of fact as to the standard of care required to be exercised by the appellant conformably with section 23(2) of the Civil Liability Act 2002;
(c) failed to make all or any of the necessary and relevant findings of fact in the exercise of his discretion (and in accordance with the evidence) as material to the question required to be answered pursuant to section 4(1) of the Wrongs Act 1954 namely:
(i) the appellant, by its agent, did make an inquiry of the respondent before construction of the dam commenced for the purpose of determining whether the water licence would be issued upon completion of the dam;
(ii) the respondent did not advise the appellant that a water licence would not or may not be issued at any time before construction of the dam commenced;
(iii) historically, the respondent had never refused a linked application for a water licence where a permit to construct a dam which depended upon such licence, had been granted;
(iv) the appellant, by its officers, reasonably assumed that a water licence would be issued upon satisfactory completion of the construction of the dam;
(v) in order to take advantage of the permit to construct the dam, the appellant was obliged to commence construction before its expiry date; and/or
(vi) the appellant was entitled to reasonably assume that, after the effluxion of a long period of time from the date of the grant of the permit to construct the dam, that if the respondent did have a concern about the likely issue of the water licence, then such concern would have been communicated to the appellant before construction of the dam commenced."
In his reasons at [1]–[36], his Honour dealt with the factual background to the proceedings and the legislative framework relating to them. There was no challenge in this appeal to that material and it provides a useful backdrop for this appeal. I therefore set it out in full:
"1 On 23 May 2005 Gunns Limited applied under the Water Management Act 1999 for a permit to build a 295 megalitre dam on a property near Evandale in Tasmania to irrigate a planned vineyard development for its business 'Tamar Ridge Wines'. At the same time it applied for a licence to take an equivalent quantity of water for the dam from the watercourse on which the dam was to be constructed. The dam permit was approved on 24 October 2005. The dam was constructed over the course of 2008, 2009 and 2010 at the total cost of almost $750,000. The water licence application was not dealt with until 2011. Gunns was notified that without further information it would be allocated only 16.6 megalitres of water, and not the 295 megalitres it had applied for. In this action Gunns claims damages against the State on a number of grounds arising from the manner in which the water licence application was dealt with (or not dealt with). In short summary, the causes of action relied on by the plaintiff are negligence, negligent misstatement and estoppel. The plaintiff's claims and the facts which lie behind them will be elaborated on later in these reasons.
2 A receiver and manager was appointed for Gunns Ltd on 25 September 2012. A liquidator was appointed on 5 March 2013.
The legislative scheme
3 Tasmania's water resources are managed in accordance with the Water Management Act 1999 ('the Act'). The Act abolishes all rights existing at common law to the flow of, or for the taking of, naturally occurring water: s 7(1). Except as provided in the Act all rights to the taking of water from the water resources of Tasmania are vested in the Crown to be administered in accordance with the Act: s 7(2). The provisions of the Act are of broad application. What follows is an explanation of the provisions of relevance to this action. I will describe the provisions of the Act as in force at the time the applications were made. The Act remains substantially the same although there have been some amendments to the relevant provisions since then. I will refer as and if necessary to any relevant amendments made during the period between the making of the application for a water licence and its determination.
4 The objectives of the Act are set out in s 6:
'(1) The objectives of this Act are to further the objectives of the resource management and planning system of Tasmania as specified in Schedule 1 and in particular to provide for the use and management of the freshwater resources of Tasmania having regard to the need to —
(a) promote sustainable use and facilitate economic development of water resources; and
(b) recognise and foster the significant social and economic benefits resulting from the sustainable use and development of water resources for the generation of hydro–electricity and for the supply of water for human consumption and commercial activities dependent on water; and
(c) maintain ecological processes and genetic diversity for aquatic and riparian ecosystems; and
(d) provide for the fair, orderly and efficient allocation of water resources to meet the community's needs; and
(e) increase the community's understanding of aquatic ecosystems and the need to use and manage water in a sustainable and cost–efficient manner; and
(f) encourage community involvement in water resource management.
(2) It is the obligation of the Minister, the Secretary, a water entity and any other person on whom a function is imposed or a power is conferred under this Act to perform the function or exercise the power in such a manner as to further the objectives specified in subsection (1) and in Schedule 1.'
5 Schedule 1 of the Act repeats the Objectives of the Resource Management and Planning System of Tasmania common to legislation dealing with the use and development of resources, including the Resource Management and Planning Appeal Tribunal Act 1993, the Land Use Planning and Approvals Act 1993, the Environmental Management and Pollution Control Act 1994, the Historic Cultural Heritage Act 1995 and the Living Marine Resources Management Act 1995, to name a few. The objectives are:
'(a) to promote the sustainable development of natural and physical resources and the maintenance of ecological processes and genetic diversity; and
(b)to provide for the fair, orderly and sustainable use and development of air, land and water; and
(c)to encourage public involvement in resource management and planning; and
(d)to facilitate economic development in accordance with the objectives specified in paragraphs (a), (b) and (c); and
(e) to promote the sharing of responsibility for resource management and planning between the different spheres of Government, the community and industry in Tasmania.'
6 The interpretation section in the Act, s 3, contains definitions of terms used in the Act. 'Water resource' is defined. It includes 'a watercourse'. A 'watercourse' means 'a river, creek or other natural stream ... and includes (a) a dam that collects water flowing in any such stream'. 'Taking' water from a water resource includes '(b) stopping, impeding or diverting the flow of water over land (whether in a watercourse or not) for the purpose of collecting or storing the water ...'. Part 6 of the Act creates a regime for the 'Licensing and Allocation of Water'. With exceptions that do not apply here, a person must not, without a licence, take water from a watercourse or take dispersed surface water, without a licence: s 54(1). Part 8 of the Act provides for the 'Construction of Dams'. A 'dam' includes any structure that holds back or impedes the flow of water: s 3. The construction of a dam is 'dam works': s 3. It is an offence to undertake dam works without, or other than in accordance with, a permit: s 146(3).
7 It follows from these provisions that a person who wishes to lawfully construct a dam to collect and store water from a watercourse requires two things; first a permit to construct the dam, and second, a licence to take the water.
8 Applications for a dam permit are made to a body constituted under s 138 of the Act named the Assessment Committee for Dam Construction ('the Assessment Committee'). It consists of six members appointed by the Minister nominated by various environmental, government, agricultural and commercial agencies or organisations. The members are to have collective expertise in management of water resources, the use and economic development of water resources, engineering and safety matters relating to dams, the integrated natural resource management and best practice environmental management: s 139(1), (2), and (6). Its functions are set out in s 143. They include to consider applications for permits, to grant or refuse permits and to determine conditions to apply to permits: s 143(1)(a). In performing its functions the Assessment Committee must have regard to prescribed standards for the design and construction of dams: s 143A. The Assessment Committee must give public notice of an application within 14 days of its receipt: s 149(1). Such notice is to specify a period of at least 14 days within which written representations may be made by any person 'who may be affected by the application': s 149(2)(c) and (d). The Assessment Committee is subject to a general time limit to approve or refuse the application of 12 weeks from lodgement of the application: s 164. It may require additional information it considers reasonably necessary for its proper consideration of the application: s 154. Such additional information may relate to a broad range of matters including water resources or hydrology, engineering or dam safety matters and environmental management. If additional information is required the application must be granted or refused within six weeks from the provision of the information: s 164(b). After considering an application, any additional information and any representations, the Assessment Committee may grant or refuse a permit: s 157(1). Any permit may be subject to conditions specified in the permit: s 157(2)(b). In determining the application the Assessment Committee must comply with s 156 which, at the relevant time, provided that the Assessment Committee must:
'(a) seek to further the objectives of the Act; and
(b)act consistently with any relevant water management plan; and
(c)take into consideration any prescribed matters relevant to the application; and
(d)take into consideration any additional information provided under section 154; and
(da)take into consideration —
(i) the effect of the water or other stored material on the impoundment area of the dam; and
(ii) the chemical nature and stability of the material contained by the dam; and
(iii) the advice of the relevant authority referred to in section 165F(1); and
(e)take into consideration the matters set out in representations relating to the application that were made during the period referred to in section 149(2).'
9 The Act places no limit on what conditions the Assessment Committee may impose under s 157(2)(b) on a permit to construct a dam, but expressly provides:
'(a) a condition may relate to the time before which the permitted activity must be commenced, the time before which the activity must be completed or the period during which the permit remains in force;
(b)a condition may relate to —
(i) the investigation, design, construction, operation, maintenance, surveillance or decommissioning of the dam; or
(ii) reporting to the Minister any information relating to the dam; or
(iii) any matter prescribed in the regulations; or
(iv) the objectives of this Act; and
(c)it may be a condition of a permit that specified work is to be undertaken by a specified person or class of persons; and
(d)a condition may provide that the permit does not take effect until —
(i) permission has been obtained for the taking of water under section 90; or
(ii) a relevant water allocation has been obtained by transfer under Division 4 of Part 6.'
10 The Assessment Committee may refuse to grant a permit on any of the grounds set out in the Act, s 158, including 'if the applicant does not have a right or licence to take water into the relevant dam': s 158(1)(d).
11 A permit has effect on the day on which it is granted by the Assessment Committee, or if there is a right of appeal, 14 days after notice of the decision or, in the case of an appeal, on resolution of any appeal: s 159. In 2005, the Act provided that permits lapsed two years after the date on which they took effect if the dam works were not substantially commenced within that period: s 159(8). The Assessment Committee had power to extend the period for which the permit is in force, but only for a period not exceeding one year: s 159(9). In 2007 the Act, s 159, was amended to require substantial completion within three years but allowing for a possible extension of a further two years.
12 In 2005, the Water Management Regulations 1999 were in force but they contain nothing of relevance to this action. Also in force were the Water Management (Safety of Dams) Regulations 2003. The regulations imposed competency standards on persons constructing dams, provided for compliance with certain specified guidelines for the construction, safety and management of dams, and for the provision of reports about construction of a dam called a 'work–as–executed report'.
13 Water licences are dealt with by Pt 6 of the Act. It is an offence to take water from a watercourse without a licence: s 54(4). Applications for a licence are made to the Minister: ss 62 and 63. The power of the Minister to determine an application may be delegated: s 10. Licences may be endorsed with a water allocation: s 56(1)(b). A water allocation specifies the quantity of water that a licensee is entitled to take and use under a licence: s 3. A licence may also specify the surety with which a water allocation can be expected to be available for taking. The term 'surety' is defined in s 3 to mean 'the actual or relative probability with which a water allocation is expected to be available in any year having regard to the natural variability of the supply of water'. In a licence the surety may be specified as a class of surety common to all allocations of similar surety: s 59. A licence may be subject to other conditions: s 56(d) and (f). Section 62 provides for the form of the application, and the payment of fees, and requires that an application is to be accompanied by 'such other information as the Minister may require'. By s 63, unless the Minister refuses an application, it must be approved if it:
'(a) is in accordance with section 62; and
(b)is consistent with the objectives of this Act and any relevant water management plan; and
(c)could not reasonably be expected to lead to material environmental harm or serious environmental harm; and
(d)will not have a significant adverse impact on other persons taking water from the relevant water resource or on the commercial operations of a major user of water from that water resource.'
14. Section 64 relevantly provides that the Minister may refuse an application for a water licence if:
'(a) it is not possible to endorse a water allocation on the licence consistently with any relevant water management plan or the objectives of this Act; or
(b)the Minister is satisfied —
(i) that the grant would have a significant adverse impact on any existing licensee or a person taking water under Part 5 or on the commercial operations of a major user of water from the relevant water resource; or
(ii) ...
(iii) ...
(iv) after consultation with the Director of Environmental Management, that the proposed taking or use of the water would contravene the Environmental Management and Pollution Control Act; ...'.
15 The Act provides for public notification of an application and receipt of representations. It also provides for notification of an approval or refusal. However, it is significant for the purposes of this action that the Act did not, at the time of this application nor subsequently, impose any time limit on the Minister for determination of an application for a water licence.
The applications made by Gunns
16 In 2004 Gunns Ltd planned to establish and develop a vineyard on a 400 hectare property at White Hills in northern Tasmania. The operations manager of Tamar Ridge Wines at the time, Rob Lyon, had responsibility for the development. It was intended, over time, to plant at least 250 hectares with vines. According to Mr Lyon, vineyards in Tasmania require a minimum of one megalitre of water per hectare to maintain a commercial yield. Thus, in early 2005, Mr Lyon authorised preparation of applications for a permit to construct a dam and an application for a water licence with the intention of providing a water supply for the development. In the course of the process Mr Lyon was assisted by another Gunns employee, Paul Townsend.
17 At the relevant time, Bill Shackcloth was an administrative officer and section head for water and dam administration within the Department of Primary Industries, Parks, Water and Environment ('the Department'). His section was referred to as the Water Management Branch. He reported to the manager of the Branch. All applications for dam permits and water licences came to him. His section was responsible for checking applications to ensure that administrative requirements were complied with before referring them, in the case of dam permit applications to the Assessment Committee, and in the case of licence applications, to the Minister or the Minister's delegate. Permit and licence applications were assessed by the Water Management Branch and sent to other departmental officers, such as a hydrologist and a natural values assessment officer, for assessment. Applications for permits on the one hand and licences on the other were separately considered and determined, although Mr Shackcloth and his section remained the point of contact with applicants for both. According to Mr Shackcloth there was, in 2005, a backlog of about 200 water licence applications. Dam permit applications demanded the focus of his section's attention because of the statutory time limit for determination of such applications. Dam permit applications principally concerned the dam footprint and engineering and construction issues, whereas water licence applications required a broader and more detailed consideration of the water catchment area from a number of different and more detailed perspectives. It will be necessary to refer to this aspect of the evidence later in these reasons.
18 To assist with Gunns' application for a permit and a licence, Mr Lyon engaged a water resource consultant, James Curran. Mr Curran is, and was then, an agricultural consultant experienced in the assessment and preparation of such applications. He knew Mr Shackcloth. He also had weekly contact with the regional water management officers. Before 2005 he had been engaged by the Water Management Branch itself to assess applications for dam permits and water licences to help clear the backlog. Applications had, until then, been prepared by the regional water management officers, but a practice was implemented allowing private consultants, like him, to complete applications. In 2005, preparation of both types of application required use of an assessment tool called the SKM tool, a computer spreadsheet which enabled measurement of the volume of water available at various levels of reliability for allocation from a specified catchment area, taking into account water already allocated. Use of the SKM tool was required of both regional water management officers and private consultants.
19 The dam permit application prepared by Mr Curran for Gunns was completed and is dated 23 May 2005. It is in the form of a 'Dam Assessment Report'. It describes the dam location as 3 kilometres north of Evandale on an un–named tributary of Rose Rivulet. It specifies the volume of the dam at full supply level as 295 megalitres and the area covered by the dam as 7.95 hectares. Included in the report are sections referring to engineering design and construction, dam hydrology, passing flows, vegetation assessments, wetlands, geo–conservation, threatened species and cultural heritage, reservoir water quality, spillway calculations and hazard rating. The SKM tool calculations are included. The report reads in part:
'Tamar Ridge Wines is applying for 195.8ML of the proposed dam volume as surety 5 water. This is the available sustainable allocation yield at 80% based on calculations using the SKM tool, using the recommended reference stream gauge of 76, North Esk at Ballroom.
The proponent is applying for the remainder of the storage (99.2ML) to be surety 6 water, and will be taken as storage opportunities arise. The 99.2ML represents the additional sustainable allocation yield available at 70% reliability, ie the total dam volume at 70% reliability based on the estimated yields using the SKM tool.'
20 The water licence application is also dated 23 May 2005. It is on a different application form, the focus of which is directed at the proposed water source and the sub–catchment assessment based on use of the SKM tool. It sets out in detail the results of the application of the assessment tool and reads in part:
'Total Available Yield Estimate upstream, using the stream gauge data for 76, North Esk at Ballroom for the period May to October at 80% reliability = 192.8ML.'
and
'Allocation sought:
Q(80) May – October 195.8
Q(70) May – October 99.2'
21 By letter dated 3 June 2005 Mr Shackcloth wrote to Tamar Ridge Wines indicating that on that day the application for a permit to undertake dam works had been accepted by the Assessment Committee. In the same letter Mr Shackcloth advised that the application for a water licence had been accepted by the Water Management Branch. The applications were advertised. By letter dated 11 July 2005, signed by a representative of the Assessment Committee, Alistair Brooks, Tamar Ridge Wines was given notice under s 154 that the Committee required the provision of further information about the dam permit application. Mr Shackcloth is noted as the contact on that letter and, I infer, is the author of it. The notice sought information about engineering design and Aboriginal heritage matters. The information was provided. The Assessment Committee approved the application and a permit, with conditions, was issued by the Committee dated 24 October 2005. In accordance with s 159, as it then was, the permit noted that works must be substantially commenced by 24 October 2007. The permit did not contain a condition requiring Gunns to have a right or licence to take water into the dam, or a condition that the permit did not take effect until a licence was issued.
22 Work did not commence on the dam. Gunns was still engaged in the completion of another large vineyard development, also involving the construction of a dam. By email dated 6 July 2007 to Mr Shackcloth, Gunns applied for an extension of the period for which the permit was in force by 12 months. On 19 September 2007 the Assessment Committee extended the permit until 24 October 2008 and issued an amended permit. Work still did not commence. At the time the permit was originally issued, the Northern Midlands Council raised concerns about land stability. Gunns commissioned engineers to undertake a geotechnical investigation which was received in November 2006. The report resulted in the preparation of an additional stability analysis which was not completed until September 2007. Concerned about engineering issues and construction of the dam after an extended dry period, Gunns sought from the Assessment Committee a further permit extension. It was not granted. The Committee pointed out that the Act permitted only one extension for a maximum of a year.
Construction of the dam
23 Because no further extension of the permit was available beyond 24 October 2008, Gunns engaged a contractor to commence work on the dam. Commencement of work was confirmed at an engineer's inspection conducted on 22 October 2008. A condition of the permit required that, within 28 days of the completion of the dam works, Gunns submit to the regional water management officer a 'work–as–executed report'. A report dated 21 January 2010 was prepared and submitted and entitled 'Work as Executed August 2009'. On 22 April 2010 David Krushka, Dam Safety Project Officer from the Water Management Branch, wrote to Gunns acknowledging the report. Mr Krushka's letter is accompanied by notices signed by Ludovic Schmidt, Manager of the Water Management Branch, issued under ss 165H and 165P of the Act. The second notice requires Gunns to conduct an engineering assessment of the adequacy of the dam spillway. In compliance with the notice an engineer was engaged. The assessment took place throughout 2010 and required considerable correspondence with and reporting to the Water Management Branch. The result was revisions to the dam spillway which were designed and constructed by Gunns at a cost of about $170,000. The completion of this work required extensions of time to comply with the s 165P notice. A report of the construction of the redesigned spillway was eventually prepared and issued on 6 April 2011, receipt of which was acknowledged by letter from the Water Management Branch on 12 April 2011.
24 It is not in dispute that by the time the work on the dam was completed, it had cost Gunns $740,360.
Sale of the property and activation of the water licence application
25 In August 2010, while work on the dam continued, the business Tamar Ridge Wines was sold by Gunns to Brown Brothers. The employment of Mr Lyon, the operations manager, was transferred to that company. The sale of Tamar Ridge Wines did not include the property on which the dam was being constructed, but it was intended to sell that property as well. Between 2009 and 2011 Darryl Clark was regional manager of Gunns. In that position he was involved in the sale of a number of properties owned by Gunns. In light of Mr Lyon's departure Mr Clark had, by June 2010, assumed management of the dam construction. He was aware of the issues with the spillway and soon became the person primarily responsible for resolving them. He knew that a water licence had not been issued. He believed the issue of the water licence would follow once the dam construction was approved, but he had not dealt with dam permits and licence applications before. He obtained that impression mostly from his discussions with Mr Lyon and Mr Townsend before he took over.
26 The property on which the dam was being constructed was sold by auction on 25 June 2010 for $1.55m. The contract date for completion was 20 August 2010. Because it was Mr Clark's belief that it would be an advantage to Gunns to sell the property with the dam permit and the water licence, he instructed the solicitor for Gunns to include in the conditions of sale a clause about the dam in the following terms:
'The Vendor hereby agrees with the Purchaser that the Vendor will:
... (b) undertake and complete to the Department's satisfaction the redesigning of the spillway and the widening of the spillway at the Vendor's costs, within six months from the completion date;
(c) undertakes such other works as required by the Department to ensure a water licence issues, the Vendor anticipating that a licence will issue for 290 megalitres.'
27 It was agreed between Gunns and the purchaser that the sale of the property would be completed on 20 August 2010 on the basis that, in summary:
· at completion the purchaser would pay $1.3m and withhold the balance purchase price of $250,000;
· the balance would be payable on completion of the dam works and issue and transfer of a water licence;
· Gunns would be responsible for compliance with permit and licence issues;
· in the event that the conditions were not complied with within six months of settlement, that is by 20 February 2011, then the purchaser was to be discharged from liability to pay the balance purchase price.
28 Subsequently, the purchaser conditionally agreed to extend the time allowed under the agreement for issue and transfer of the water licence until 30 April 2011.
29 On 7 February 2011 Mr Clark wrote to Julian Johnstone, a senior water management officer in the Water Management Branch. In his letter Mr Clark explained that the property had been sold but that Gunns remained responsible for ensuring, within a limited time, the issue of a dam permit and water licence. He sought the extension of time referred to earlier for performance of the outstanding dam works, 'to enable a Water Licence to be issued as soon as practicable'. He said that he attended a meeting on site on 14 February 2011, not long after his letter, at which there was discussion about the dam works but at which he was also told by Mr Johnstone that once the work had been signed off by the engineer a licence would follow.
30 Mr Clark's employment with Gunns ceased in March 2011. Another employee, Mark Chopping, took over management of the dam issues. When, on 12 April 2011, Mr Johnstone wrote to Mr Chopping after having received the engineer's report about the dam work, he mentioned the licence application in these terms:
'In regards to your application for a water allocation for Dam ID 7716, this is currently being progressed. Should you have any queries, please contact Anna Hendricks ...'
31 I infer from the correspondence in evidence that the mention of the water licence in Mr Johnstone's letter was prompted by a conversation with Mr Chopping. On Friday, 15 April 2011, an email was sent to Mr Chopping by Anna Hendricks, then an administration officer within the Water Management Branch, in which Ms Hendricks said she would be working on the application 'on Monday'. On 19 April 2011 Mr Chopping sent an email reminder to Mr Johnstone referring to the time constraints facing Gunns and pressing for the grant of the water licence for transfer to the purchaser.
Delay in consideration of the licence application
32 Between the making of the licence application in May 2005 and the correspondence in April 2011, nothing was done within the Water Management Branch to progress Gunns' application for a water licence. Evidence about the reasons for delay was given by Mr Shackcloth. He agreed that there was no diary system for managing the progress of water licence applications within the Water Management Branch. Permit applications and licence applications had separate files which were not kept together or linked. In 2005 Mr Shackcloth had something in excess of 700 files in his office to be dealt with. He was working 6½ days a week, most days for 12 or more hours. There was no means of determining which were the oldest in time, and they were not dealt with in order of age.
33 In 2005 Mr Shackcloth made a request for more staff to deal with the backlog, but his request was refused. In 2007 two more administrative staff were provided. In 2008 one more, so by 2009, there were three or four more staff than there had been in 2005. Mr Shackcloth's view was that, leaving aside the technical evaluation required for each application, there were insufficient administrative staff in the Water Management Branch during the relevant period to deal with the water licence applications within a reasonable time frame. The consequence of this was that the application 'did not get listed as a priority'. He agreed that another way of saying this was that it 'got lost in the system'.
A change in the assessment tool for water licences and the result for the licence application
34 The lapse of time between the water licence application in 2005 and the Department's consideration of it in April 2011 had significant consequences for Gunns. From February 2006 a different assessment tool was used to assess water licence applications. The new assessment tool is called the Farm Dam Assessment Tool or FDAT. According to Mr Curran, with whom Mr Shackcloth agreed, the FDAT tool was very similar tool to the SKM tool, but used more sophisticated data from a greater number of reference sites for calculation of stream flow. Where the SKM tool used data from about 60 gauging sites around the State, the FDAT tool used data from a combination of those gauging sites, and modelled data from adjacent catchments and other sites, somewhere around 1,750 reference sites in all.
35 Once Ms Hendricks took up the water licence application on 20 April 2011 she referred it for re–assessment by other administration officers within the same branch. This time the application was assessed using the FDAT tool. Use of the FDAT tool produced a significantly different result. It indicated to the Departmental officers that much less water was available for allocation than had been indicated by use of the SKM tool in Mr Curran's original assessment. On 24 June 2011 the Manager of the Water Management Branch wrote to Gunns to advise that 'based on the current level of information there was insufficient water available to meet the needs of your proposal and those of the environment at an acceptable level of risk' and that 'only 16.6ML (11ML at surety 5 and 5.6ML at surety 6) may be allocated at the proposed off take'. An additional allocation would be considered but only on provision of further information invited by a notice issued under the Act, s 86. The notice required a further assessment of the effect of the grant of a licence to take 290 megalitres of water on in–stream ecosystems and other users of the water resource.
36 In the meantime, the purchaser of the property advised by email from its solicitor dated 10 May 2011, that there would be no further extension of time for the issue and transfer of the water licence contemplated by the sale agreement. The balance purchase price of $250,000 was not paid."
The first issue determined by Pearce J
The first question his Honour dealt with was the existence or otherwise of a duty of care in relation to the appellant's claim in negligence. The duty formulated by the appellant appeared at par 5.1 of its statement of claim in the following terms:
"In the assessment and determination of the license application pursuant to the Act the Minister, his delegate and/or his authorized officers, were each subject to a duty of care, or were subject to multiple duties of care, as follows:
(a) to exercise the statutory power of approving or refusing the license application pursuant to either section 63 or section 64 of the Act within a reasonable time of the date of lodgement of it;
(b) to take such steps, to give such advice and to make such decisions as a reasonable Minister, his or her delegate and/or his or her officers with the same power and resources would have taken in the circumstances and in respect of the assessment and determination of the license application; and
(c) to advise the plaintiff in a timely way, if it was considered that the license application would be or was likely to be refused contemporaneously with the grant of the dam permit."
In his reasons, his Honour canvassed the existence and nature of the asserted duty of care. His Honour determined that the respondent did not owe a duty of care to the appellant in the circumstances of this case. The appellant submits that his Honour in so concluding made a number of errors.
In this appeal, the appellant did not cavil with the statements of principle extracted by his Honour from the authorities to which he referred. He however referred to two other authorities not referred to by his Honour. The first was Marsh v Baxter [2015] WASCA 169, 49 WAR 1 at [295]–[312]. Counsel for the appellant adopted, subject to one qualification relating to the question of vulnerability, the summary of principles appearing in those paragraphs. The second was State of New South Wales v Spearpoint [2009] NSWCA 233, where at [21]–[23] Allsop ACJ (as he then was) said:
"21 It is clear that in ascertaining whether, in any particular circumstances, a duty of care is to be imputed and in identifying its scope and content, where the circumstances are not covered by an accepted category of liability, the task is to analyse closely the facts bearing on the relationship between the plaintiff and the putative tortfeasor. See for example Woolcock StreetInvestments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515 at [22].
22 This close examination will involve an assessment of salient features such as foreseeability, degree of harm, vulnerability, reliance, assumption of responsibility and numerous other possible factors. These other factors will include legal policy such as coherence and conformity with other duties or legal obligations.
23 Whilst the ultimate question as to the existence of a duty of care is one of law (Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 at [62]) the task is one which is fact rich and fact intensive. To put it as Windeyer J did in Mount Isa Mines v Pusey [1970] HCA 60; (1970) 125 CLR 383 (at 398 and 399) it is 'a value judgment upon ascertained facts'."
Grounds 1 and 2 – the duty of care grounds of appeal
Counsel for the appellant argued grounds 1 and 2 of the appeal together. However, it should be noted that, though he did that, these grounds criticised his Honour's reasons from different perspectives. Ground 1 asserted error based on facts "as found". Ground 2 asserted a failure to make findings of fact about a particular matter, namely as to what inquiries were made on behalf of the appellant to the respondent about the water licence application and the grant of a water licence, before the appellant acted upon the permit to construct the dam.
Ground 2 was a very specific assertion and required an examination of the evidence led by the appellant as to that specific matter. Counsel for the appellant did not address this ground as a discrete ground. Instead, counsel for the appellant submitted in relation to both grounds that his Honour erred in relation to his determinations about a number of matters, namely reasonable foreseeability, incoherence of duty with the statutory scheme, vulnerability, control, alternative remedy, reliance and indeterminacy. As to the first of those matters, at [24] of his written submissions, which was the second paragraph under the heading "Reasonable foreseeability", counsel for the appellant asserted that his Honour had failed to make findings of fact to support his reasoning process in relation to reasonable foreseeability, and identified a number of matters about which he said no findings had been made. Such an assertion was not the subject of either ground 1 or 2.
I will, notwithstanding those comments, deal with the appellant's submissions in the manner in which its counsel argued them.
I preface that approach by noting that the parties agreed that the construction of the asserted duty in this case required at the start an examination of the relevant legislative scheme, that is the provisions of the Water Management Act 1999 (the Act).
Reasonable foreseeability
In relation to reasonable foreseeability, counsel for the appellant submitted that, at [44] of his reasons, his Honour concluded that the respondent did not owe a duty of care "to not cause economic loss to the plaintiff in the terms contended by the plaintiff" and, as to foreseeability, that it was not reasonably foreseeable "that the plaintiff would suffer economic loss if the defendant did not determine the application for a licence within a reasonable time." He then submitted that his Honour did not identify the evidence which underpinned these conclusions, or make relevant findings of fact.
Counsel for the appellant further submitted, by reference to [45] in his Honour's reasons, that his Honour there formulated, and then rejected as necessary to establish, a duty of care that the respondent "should reasonably have foreseen that, if it did not determine the application within a reasonable time, then the plaintiff may go ahead and build the dam without determination of the application and without the benefit of a licence." Counsel further submitted that his Honour, also at [45], intermixed the concept of reasonable foreseeability with indeterminacy of claims. As to that last submission about intermixing concepts, I do not accept counsel's interpretation of the words used as amounting to that. When his Honour made reference to indeterminacy of claims, it seems to me he was referring to that in the context of one of the issues to be considered in the overall consideration of the existence or otherwise of the duty of care, and not to the issue of foreseeability alone.
Having identified the issues outlined in [35] and [36] above, counsel for the appellant, at [24] of his written submissions, submitted that, in so reasoning, his Honour erred in several respects.
Firstly, his Honour failed to make necessary and relevant findings of fact in order to support his reasoning process. Counsel then identified a number of pieces of evidence. He submitted this was all unchallenged evidence and his Honour should have made findings consistent with it. Had he done so, it would have been plain that the respondent did foresee or ought to have foreseen that the appellant would be likely to suffer financial harm in the event of a failure to determine the water licence application within a reasonable period of time.
Secondly, counsel for the appellant submitted, at [26] of his written submissions, that his Honour erred in determining that it was necessary for the appellant to demonstrate actual or reasonable foreseeability that if the respondent "did not determine the application within a reasonable time, then the plaintiff may go ahead and build a dam without determination of the application and without the benefit of a licence". Counsel went on to submit at [27]–[28] of his written submissions:
"27 In accordance with established authority the appellant was not required to demonstrate actual or reasonable foreseeability of 'the precise character of the injury or the precise sequence of events leading to the injury, it being sufficient if the kind or type of injury was foreseeable even if its extent was greater than expected.' Further, in doing so, foreseeability is established 'if the risk of the harm of the kind suffered is real, not far-fetched or fanciful.' The type of economic loss which his Honour determined might have been reasonably foreseeable is far more remote than the kind of economic harm which the appellant did suffer and for which it sought compensation in its action. All that was necessary, in the circumstances, was establishment by the appellant of actual or reasonable foreseeability of harm to the economic interests of the appellant.
28. In reasoning in this way, and with respect, his Honour overlooked the basis upon which the appellant put its claim: a contention that the respondent had a statutory duty, and a corresponding common law duty of care, to make a decision in a reasonable time. It did not contend that the respondent had a statutory or common law duty to make a particular type of decision within a reasonable period of time."
Thirdly, counsel for the appellant submitted that his Honour's analysis in relation to reasonable foreseeability confused duty and causation questions. He submitted that, had the respondent made a decision within a reasonable time, that is between June 2005 and October 2008, the appellant would not have suffered harm to its economic interests caused by the construction of the dam. So understood, the harm to the appellant's economic interests was very real and not far-fetched or fanciful.
Counsel for the respondent submitted as to foreseeability that his Honour correctly found that it was not reasonably foreseeable that the appellant would suffer economic loss if the Minister did not determine the application for a water licence within a reasonable time, and that, in any event, foreseeability of loss alone was not sufficient for the purpose of determining whether the duty as asserted existed.
Looking at his Honour's reasons, his Honour set out, in the passages extracted earlier in these reasons, the factual background to the appellant's claims. It must be inferred he accepted that background. He then, at [39], set out the duty of care pleaded by the appellant and identified, commencing in the third line of that paragraph, what was not contended for by the appellant, namely that the respondent owed a duty to grant the application. His Honour, at [40]–[44], outlined the applicable legal principles. He then, at [44], as asserted by counsel for the appellant, formulated a duty of care but then rejected it. It must be inferred he rejected it as being one not supported by the facts of this case as found.
The evidence identified at [24] of the written submissions of counsel for the appellant was, although not always in quite as emphatic terms as counsel put it, before his Honour. I accept that it would follow from that evidence that the respondent would have had actual knowledge of the matters canvassed. However, in my view, actual knowledge about those matters alone does not lead to the conclusion there was a duty of care as framed. That evidence would have demonstrated the facts shown but not necessarily that it was reasonably foreseeable from those facts that the appellant would have suffered harm to its financial interests if a decision in relation to the water licence was not made in a reasonable time. Even therefore had his Honour made findings of fact about each and every one of those matters, I am not persuaded his conclusion as to reasonable foreseeability would have been any different.
As to the submission referred to in [39] of these reasons, counsel for the appellant suggested that his Honour, in effect, misunderstood the nature of the appellant's claim, and what it needed to establish to support a duty of care. He submitted that his Honour made an error in characterising the matter as he did at [45]. With respect, the only economic harm which could flow to the appellant was if it constructed a dam and did not get a licence as it sought either at all or within a reasonable time. The mere failure to make a decision in a reasonable time would not necessarily have led to any economic harm. I do not accept that his Honour did other than identify the practical effect of the appellant's claim.
As to the third matter raised, counsel for the appellant suggested that, if a decision had been made within a reasonable time, which he identified as being any time between June 2005 and October 2008, then the appellant would not have suffered harm to its economic interests caused by the construction of the dam it could not use. He submitted such harm was real and not far-fetched or fanciful. I accept that, had a decision about the water licence been made prior to October 2008, and the decision been to grant the licence, the appellant would likely not have suffered the economic harm it now claims to have suffered. I also accept that had the decision been made in that time frame and been an adverse decision, perhaps the appellant may not have constructed the dam. However, a decision was not made and yet the appellant chose to construct the dam absent that decision.
Incoherence with the statutory scheme
In his written submissions, counsel for the appellant, under the heading "Incoherence with the statutory scheme", conceded that if the duty of care contended for by the appellant was inconsistent with the statutory scheme, then his client must fail. He engaged, in his oral submissions, in a detailed examination of the provisions of the Act. He ultimately submitted that there was nothing either expressly or by necessary implication in the statutory scheme which led to incoherence in recognising a duty of care owed by the relevant Minister to the appellant to make a decision about the water licence application in a reasonable time.
His Honour referred in his reasons to various parts of the Act relevant to both dam permit applications and water licence applications. He outlined the objectives of the Act, the Minister's obligations and other relevant provisions. That all occurred in the early paragraphs of his Honour's reasons before he went on to deal with the arguments mounted by counsel.
The issue of incoherence with the statutory scheme was not dealt with by his Honour in a clearly identifiable way. What his Honour did, after dealing with reasonable foreseeability, was identify at [46] that, in any event, foreseeability of loss was not sufficient. His Honour then went on to deal with incoherence with statutory duty. He said at [46]:
"46 Foreseeability of loss alone is insufficient in any event. I would nevertheless reject the existence of a duty of care. In my view, in a claim for pure economic loss, the law should be slow to find that the Minister (reference to whom includes the Minster's delegates) should have the economic interests of the plaintiff in mind when considering when and how the plaintiff's licence application should be dealt with. The Minister was exercising a statutory power and was doing so in accordance with the provisions and objectives of the Act. The imposition of a duty of care of the nature contended by the plaintiff is, in my view, an undue imposition on the exercise of the statutory function of the Minister, particularly in light of the factors the Minister was obliged to consider by ss 63 and 64. The imposition of such a duty raises policy issues concerning the allocation of resources to consideration of licence applications. Evidence was given about insufficient allocation of resources to deal with water licence applications in a timely manner. Such evidence might be relevant in considering whether there has been a breach of an established duty. In the present context, however, it is also an important indication against the existence of a duty."
His Honour then quoted a passage from the judgment of Gleeson CJ in Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54, 211 CLR 540 at 555 and went on to say at [47]:
"47 To adopt the words of Gleeson CJ in the same case at 557 [15], I do not consider that the reasonableness or unreasonableness of government inaction concerning exercise of its power to determine the licence is a legitimate subject for curial decision. See also the judgment of McHugh J at 576 [81]."
Counsel for the appellant referred the Court to passages from the joint judgment of Gummow and Hayne JJ in Graham Barclay Oysters at [146] and parts of [147] and [149]. He unfortunately omitted a reference to comments in [145]. A combination of that paragraph, those parts of subsequent paragraphs to which counsel referred and [148] was as follows:
"145 The accuracy of these two observations may be accepted. However, the co–existence of knowledge of a risk of harm and power to avert or to minimise that harm does not, without more, give rise to a duty of care at common law. The totality of the relationship between the parties, not merely the foresight and capacity to act on the part of one of them, is the proper basis upon which a duty of care may be recognised. Were it otherwise, any recipient of statutory powers to licence, supervise or compel conduct in a given field, would, upon gaining foresight of some relevant risk, owe a duty of care to those ultimately threatened by that risk to act to prevent or minimise it. As will appear, the common law should be particularly hesitant to recognise such a duty where the relevant authority is empowered to regulate conduct relating to or impacting on a risk–laden field of endeavour which is populated by self–interested commercial actors who themselves possess some power to avert those risks.
146 The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence.
147 Where the question posed above is answered in the affirmative, the common law imposes a duty in tort which operates alongside the rights, duties and liabilities created by statute. In some instances, a statutory regime may itself, in express terms or by necessary implication, exclude the concurrent operation of a duty at common law. …
148 However, contrary to submissions put on behalf of the Attorney–General for Western Australia (as an intervener in this Court), the discernment of an affirmative legislative intent that a common law duty exists, is not, and has never been, a necessary pre–condition to the recognition of such a duty. This may be contrasted with the action for breach of statutory duty, the doctrinal basis of which is identified as legislative intention.
149 An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi–faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute …" [Footnotes omitted.]
Counsel for the appellant pointed out that the observations above were made in the context of a failure to exercise a discretionary power which was open to be exercised on the facts.
Counsel for the appellant submitted, at [42] of his written submissions, that:
"his Honour reasoned that a common law duty of care, in the same terms as the implied statutory obligation, could not be imposed consistently with 'the exercise of the statutory function of the Minister, particularly in light of the factors the Minister was obliged to consider by sections 63 and 64.' In reaching this conclusion it is submitted that his Honour committed several errors."
What his Honour actually said at [46] is extracted at [48] above.
In relation to the submission at [42] of his written submissions, counsel for the appellant identified again a number of errors. Firstly, it was submitted that his Honour overlooked the obligation of the Minister expressed in the Act, s 6(2). That obligation was stated to be to "perform the function or exercise the power in such a manner as to further the objectives specified in subsection (1) and in Schedule 1." Counsel paraphrased those obligations. Section 6(1) and the schedule were extracted at [4]–[5] of his Honour's reasons. Counsel submitted that it was necessarily implied in those objectives that timely decision-making was an important consideration to the facilitation of economic development. He submitted that proposition was obvious, and that necessarily these factors required the Minister to take into account the economic interests of the appellant in his decision–making. Nothing in s 6 or the schedule makes any reference to "timely" decision-making. In fact, while the Act provides for a timeframe within which a dam permit application should be determined, it contains no such provision in relation to the consideration of water licence applications. It might be suggested that had Parliament intended to impose such an obligation, it could have done so. Nevertheless, counsel for the respondent conceded that the application should have been dealt with in a reasonable time, and that that was between June 2005 and October 2008.
As to any obligation to take into account the economic interests of somebody such as the appellant, there is, in my view, nothing in s 6 or the schedule which provides for that. There is a reference in s 6(1)(b) to the need to recognise and foster the economic benefits resulting from the sustainable use and development of water resources for the supply of water for human consumption and commercial activities. However, that, with respect, does not translate into an obligation to have regard to the economic interests of someone like the appellant in the manner contended for by the appellant.
The second error identified by the appellant was that his Honour's reasons did not reveal why timely decision-making was inconsistent with the exercise of a statutory obligation to make a determination within a reasonable period of time. There was no such express statutory obligation.
The third error counsel submitted had been made was that, contrary to his Honour's analysis, the statutory scheme was of a type contemplated by French CJ in Stuart v Kirkland-Veenstra [2009] HCA 15, 237 CLR 215 at [49] and [50]. French CJ was there dealing with a duty of care asserted to have been owed by two police officers to the family of a man who was found in a car with indications he was going to commit suicide. The officers did not detain the man after considering a number of factors which persuaded them the man was no longer at risk. The duty was said to arise by reference to a provision in mental health legislation which gave police the power to apprehend a person who appeared to be mentally ill if officers had reasonable grounds for believing the person was, amongst other things, likely to commit suicide. The Court found there was no duty of care. However, at [49]–[50], French CJ commented as follows:
"49 A claim for damages for breach of a duty of care may be made against the repository of a statutory power in circumstances in which:
(i) a decision has been made not to exercise the power; or
(ii) a decision has been made to exercise the power and the claim relates to the manner of its exercise. Bennion puts it thus at s 14 of his Code of statutory interpretation:
'(16) It constitutes the tort of negligence if a person purporting to perform a statutory requirement, or exercise a statutory authority, contravenes a duty of care which arises at common law, and is not intended to be overridden by the statute, and damage results. The case is similar with other torts such as nuisance. The reason is that the statutory power, duty or authority is then taken not to excuse malfeasance or misfeasance in its purported exercise.
...
(17) Liability under the tort of negligence (as opposed to the breach tort) may arise where a statutory power is conferred on a person and that person carelessly fails to exercise the power, or exercises it in a careless manner, and damage results.'
50 There are classes of case in which the statute conferring a power also imposes, expressly or by necessary implication, a duty to exercise the power. In that case the duty is statutory and a failure to exercise it may give rise to an action in tort for breach of statutory duty. That is not this case. It is not now suggested that s 10 or any other part of the 1986 Act conferred a statutory duty on the officers to exercise the power of apprehension in any circumstances, however pressing. Nor, therefore, can it be suggested that it gives rise to a cause of action for breach of statutory duty. But to say of a statute that it does not 'create' a cause of action for breach of duty does not necessarily mean 'that there is no room for the operation of the principles of negligence'." [Footnotes omitted.]
Counsel also submitted that Crennan and Kiefel JJ at [129] in the same case, "similarly" distinguished discretionary statutory powers from obligatory functions. Their Honours actually said at [129]:
"In principle a public authority exercising statutory powers should not be regarded by the common law any differently from a citizen. It should not be considered to have an obligation to act. But the position of a public authority is not the same as that of a citizen and the rule of equality is not regarded as wholly applicable. It has public functions and it has statutory powers which the citizen does not. Some powers might be effective to avert or minimise a risk of harm to particular persons or their property, but the statute might not oblige their use. The relevant concern of the common law is whether a public authority might nevertheless be considered to be under a duty of care which obliges it to exercise its powers in a particular way." [Footnotes omitted.]
The statements by French CJ, Crennan and Kiefel JJ do not, in my view, contain anything which suggests that, where a statutory body has an obligation to exercise a power, it will always be under a duty to exercise that power in the manner asserted in this case. The comments are not, in my view, inconsistent with Pearce J's reasoning.
The fourth error identified by counsel for the appellant, under the heading "Incoherence with the statutory scheme", was submitted to be that his Honour relied on evidence about the insufficient allocation of resources to deal with licence applications in a timely manner. It was submitted that questions of resource allocation were relevant to breach and not the existence of a duty. Additionally, it was submitted that his Honour overlooked the evidence of Mr Shackcloth that a timely decision in this case would not have been burdensome to the Water Management Branch. I have already extracted [46] of his Honour's reasons at [48] of these reasons, although omitted the quote from the Graham Barclay Oysters case which formed part of it. His Honour said in relation to the evidence led about resources that "such evidence might be relevant in considering whether there has been a breach of an established duty." His Honour then went further to say that, in the context of this case it was also an important indication against the existence of a duty. At [46], his Honour then extracted material from the judgment of Gleeson CJ at [9] in Graham Barclay Oysters to explain why he said that. I do not accept that the manner in which his Honour used that piece of evidence indicates an improper approach to the issue with which he was dealing.
Vulnerability
His Honour dealt with issues of vulnerability and control together. In substance, he determined that the appellant was not in a vulnerable position. The appellant had the benefit of a dam permit. It had already sought and been granted an extension to that permit for its own reasons, that is independently of any issue about there being no water licence. It then sought a second extension and was told that could not be granted. The legislation did not permit it. The appellant was therefore faced with a situation that it either went ahead and built the dam and basically hoped the water licence would issue in due course, or it did not take that risk. It made the decision to go ahead. Mr Lyon who had dealt with previous applications knew that this situation had occurred before, that is construction began before a licence issued. There was however no evidence accepted by his Honour to the effect that anyone from the appellant contacted the relevant department and said something along the lines of, "Where is our licence, we want to start building while our permit is current and we do not want to do that if there is not to be a licence. Please deal with our application. If you are not going to do that, tell us why." Instead, the appellant went ahead and constructed the dam. As his Honour pointed out, the appellant was in a position to protect itself from the consequences of the respondent's failure to determine the licence application. It decided not to do so.
Counsel for the appellant submitted the Minister controlled the risks. With respect, I do not accept that. Most certainly the Minister controlled the processes within his department. However, the Minister did not have any role in the appellant's decision to commence construction. In taking that step the appellant took a risk it could have avoided.
Alternative remedy
At [48], his Honour said:
"Although there is no statutory appeal from the failure of the Minister to determine a licence application within a limited time, it was open to the plaintiff to bring proceedings in the nature of mandamus or under the Judicial Review Act 2000, s 19, to compel performance of the conceded duty to determine the application within a reasonable time. The availability of a remedy in the nature of the appeal as a factor in determining the existence of a duty of care was considered by the Full Court of the Supreme Court of Queensland in Meshlawn P/L v State of Qld [2010] QCA 181. Each member of the court dealt with the issue differently. McMurdo P did not consider the availability of an appeal to be a factor weighing heavily against the existence of a duty. Chesterman JA found a right of appeal against a bureaucratic decision to be inconsistent with a duty of care in negligence because it removes the vulnerability of the plaintiff. Fryberg J disagreed with Chesterman JA and found a right of appeal was not inconsistent with the existence of a duty. In this case there is no right of appeal, but, rather, a right to apply for an administrative law remedy. I would proceed on the basis that such a right is not inconsistent with the existence of a duty, but is a relevant factor, going to control and vulnerability, as to whether a duty arises. In this case it is an indication against existence of a duty of care sounding in damages."
Counsel for the appellant submitted that his Honour did not expose his reasoning for the conclusions reached in the last two sentences of [48]. Counsel commented upon the decision in Meshlawn, in effect suggesting different emphases to those noted by his Honour. He then submitted that:
"The theoretical prospect of proceedings pursuant to the Judicial Review Act or in the nature of mandamus, in this case, must be balanced against:
· The obvious and unperformed duty of the Minister to make a timely decision;
· The reliance by the appellant upon the prior Ministerial practice;
· The absence of any warning from the Minister between 2005 and October 2008;
· The numerous opportunities which were presented to the Minister as 'trigger events' to make a timely decision; and
· The fact that the making of a timely decision in this case would not have imposed any undue burden upon the Minister."
The whole thrust of the submissions by counsel for the appellant was, with respect, that the appellant was entirely subject to actions or inaction of the Minister, and that it had somehow no ability to exercise any level of independent thought about what it did or did not do. In the context of this appellant, that is simply inconceivable. It was a large corporation with extensive experience in dealing with government entities. The capacity of the appellant to initiate proceedings to force a result on its water licence application was not theoretical. It was quite real. There was no evidence it was even considered. The appellant assumed that it could just go ahead with construction and the licence would follow without any thought as to what might happen if it did not.
As to an asserted failure to expose reasoning, with respect, his Honour did so by reference to the judgments in Meshlawn, and his conclusion was entirely consistent with certain of the views expressed there.
Reliance
The same comments apply in relation to this as appear under the consideration of alternative remedy.
Indeterminacy
His Honour said as to indeterminacy at [50]:
"There is arguably no indeterminacy in the class of persons to whom a duty of the type contended by the plaintiff may be owed, although it is conceivable that imposition of a duty may also extend to representors who become party to an application. However, even assuming the class may be confined to applicants for a licence, the prospective imposition of a duty to determine applications within a reasonable time gives rise to a high level of indeterminacy in the nature and scope of harm which may be suffered by applicants, a factor militating against imposition of such a duty."
Firstly, counsel for the appellant submitted that his Honour drew a conclusion in the last sentence of [50] but did not elaborate as to why that conclusion was open. Counsel did not suggest the statement was wrong, simply that there appeared to be no explanation for it. Given the evidence heard by his Honour about the numbers of water licence applications before the relevant Minister and the delays with many, the conclusion would, in my view, have been reasonably open.
Secondly, counsel asserted an error arising from an interpretation placed upon various remarks of Gaudron and McHugh JJ in Perre v Apand Pty Ltd [1999] HCA 36, 198 CLR 180. In substance counsel for the appellant submitted that indeterminacy related to the indeterminate nature of the class of persons who might be the beneficiaries of a duty of care and not the indeterminacy of the "nature and scope of harm" referred to by his Honour at [50]. In mounting this argument counsel referred to remarks of Gleeson CJ at [15], Gaudron J at [32] and of McHugh J at [106] and [107], and indeed extracted selected portions of these paragraphs in his written submissions. With respect, had counsel extracted the whole of, particularly the remarks of McHugh J at [106] and [107], his argument would not have had the merit which, on the face of the written submissions, it seemed to have. At [107], McHugh J said:
"However it is not the size or number of claims that is decisive in determining whether potential liability is so indeterminate that no duty of care is owed. Liability is indeterminate only when it cannot be realistically calculated. If both the likely number of claims and the nature of them can be reasonably calculated, it cannot be said that imposing a duty on the defendant will render that person liable 'in an indeterminate amount for an indeterminate time to an indeterminate class."
It is clear from a reading of the remarks of Gaudron and McHugh JJ that indeterminacy is not wholly to be determined by reference to the number of potential claimants. It is also to be determined by reference to what those claimants might be seeking. Thus there is no error, in my view, in the reference by Pearce J to the nature and scope of harm.
Conclusion on the duty question
In his written submissions counsel for the appellant submitted in summary what he contended was the case the learned trial judge should have found. He said at [86]–[90]:
"86The appellant contended that the Minister owed three relevant duties, expressed at an appropriately high level of abstraction. These duties were not 'so broad as to be devoid of meaningful content, nor so narrow as to obscure the issues required for consideration.' Duty (a) mirrored the statutory obligation which the respondent conceded at trial.
87This case is not attended with the difficulties which arise where it is said that a common law duty of care is owed by a statutory decision-maker, possessed of a permissive power, which was not exercised in circumstances where its exercise may have averted a risk of harm to a plaintiff.
88This case is concerned with a statutory duty which was engaged if not upon lodgement of the application, then upon its acceptance and subsequent public notification. The Minister had embarked upon the statutory task but failed to complete it in accordance with the statutory obligation. And this despite the numerous 'trigger events' which ought reasonably to have prompted active decision-making on the part of the Minister.
89This case is closely analogous to the well-recognised category of cases that where statutory powers are exercised, then a duty of reasonable care applies. And this principle clearly extends to cases of pure economic loss.
90Importantly the appellant's case does not enter upon the field of a general administrative tort; that is to say, a general duty of care for the way in which administrative decision-making is made. The appellant's case is not that a particular decision ought to have been made on the basis of the application. It is confined to the making of a decision in a timely way." [Footnotes omitted.]
I have already been through the various contentions raised by counsel for the appellant about the errors asserted to have been committed by the learned trial judge. I do not accept, for the reasons I have outlined, that the appellant has established any of the errors it asserted. That conclusion effectively deals with ground 1 and it should fail.
As to ground 2, as I have already pointed out, it related to a specific assertion that the learned trial judge failed to make findings of fact, or failed to make findings in accordance with the evidence as to "what enquiries were made on behalf of the appellant to the respondent about the water licence application and the grant of a water licence before the appellant acted upon the permit to construct the dam." For this ground to be made out, there needed firstly to be evidence before his Honour as to those inquiries. If the matters raised at [18] and [24] of the written submissions were intended to indicate relevant evidence, in my view they did not do so. This ground cannot have any relevance unless it relates to inquiries as to the status of the licence application. That is inquiries about what was happening to it and why it had not been finalised.
His Honour dealt with evidence of conversations the appellant's witnesses said may have occurred. However, there were specific findings at [71] of his Honour's reasons that were adverse to the appellant. No other evidence about specific inquiries was identified which might have assisted the appellant. This ground cannot, in my view, succeed.
Ground 3
This ground related to his Honour's findings about contributory negligence.
His Honour said at [90]–[91] of his reasons about contributory negligence:
"90 The final issue is contributory negligence. The Civil Liability Act, s 23, applies. The defendant pleads that the plaintiff contributed to its loss by its own negligence. The particulars alleged are that it:
(a)built the dam prior to obtaining a licence to take water;
(b)built the dam prior to the Minister approving the application for a licence to take water;
(c)failed to comply with the Notice issued by the Minister's delegate on 24 June 2011;
(d)entered into the contract of sale without first obtaining a water licence; and,
(e)agreed to the variations of the sale contract without first obtaining a water licence.
91 I am not satisfied that the plaintiff contributed to its own loss by failing to comply with the Minister's notice or entry into the contract in the terms it did. Those facts were not necessary elements of the loss. By then, the loss had been irretrievably incurred, at least for the plaintiff. However, the defendant submits that a reasonable and prudent person in the shoes of the plaintiff would not have embarked upon the construction of the dam without a licence or approval of a licence. I agree. The plaintiff knew it did not have a licence when construction commenced. It took the risk of construction. It could have refrained from construction. There was ample opportunity to obtain advice about the application, press for its formal determination, or take proceedings to compel a determination of the application. The grounds upon which it considered that a licence would be forthcoming on the terms applied for were based on its own understanding and assumptions derived from limited past experience and without expert advice. Its own consultants knew of the change in the assessment tool. Resort to evidence given at trial about the limited number of refusals of licence applications does not, in my view, assist the plaintiff because they were matters of which it had no knowledge at the time. The plaintiff failed to take reasonable care of its own interests by proceeding with construction of the dam, and incurring such considerable expense, without a licence. I think that a just and equitable apportionment of liability, having regard to the plaintiff's share in the responsibility for its own loss, is an apportionment of liability to the plaintiff of 40%. That is, the damages recoverable by the plaintiff ought be reduced by 40%."
In his written submissions counsel for the appellant did not dispute that a finding of contributory negligence was open in relation to particular (b). He also accepted that, to succeed on this ground, the appellant must demonstrate a factual error or an error of principle. As he submitted, error in the exercise of his Honour's discretion must be identified.
The Civil Liability Act 2002, s 23, provides:
"Standard of contributory negligence
(1) The principles that are applicable in determining whether a person has been negligent also apply in determining whether the person who suffered harm has been contributorily negligent for the purpose of apportioning liability under section 4 of the Wrongs Act 1954.
(2) For the purpose of apportioning liability under section 4 of the Wrongs Act 1954 —
(a) the standard of care required of the person who suffered harm is that required of a reasonable person in the position of that person; and
(b) the matter is to be determined on the basis of what that person knew or ought to have known at the time."
The Wrongs Act 1954, s 4(1), provides:
"4 Apportionment of liability in case of contributory negligence
(1) Where a person suffers damage as the result partly of that person's wrongful act and partly of the wrongful act of any other person, a claim in respect of that damage is not defeated by reason of the wrongful act of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent up to 100% as the court thinks just and equitable, having regard to the claimant's share in the responsibility for the damage; but —
(a) this subsection does not operate to defeat a defence arising under a contract; and
(b) where any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable by the claimant by virtue of this subsection shall not exceed the maximum limit so applicable."
What therefore his Honour had to consider in applying these provisions was the extent to which it was just and equitable to reduce any damages found to be due to the appellant (the Wrongs Act), that the standard of care required of the person who may have suffered harm was that of a reasonable person in the position of that person and, as to the latter, what the person knew or ought to have known at the relevant time. There can be no question his Honour was aware of the contents of the relevant provisions. While he did not set them out, he referred specifically to s 23. A failure to set out a provision in full in a judgment cannot, in my view, be an indication the writer of the judgment was not alive to its terms.
Counsel for the appellant submitted that his Honour ought to have made findings of fact as "both relevant and necessary to the determination of the statutory requirements expressed at section 23(2)." The specific findings of fact he submitted that should have been made were:
"· that Mr Lyon advised Mr Shackcloth in September 2008 of an intention to commence construction and that, despite the absence of a finding that Mr Shackcloth made the representations relied upon for the negligent misstatement case, the conversation was at least to the effect that it confirmed the impression which Mr Lyon had before the conversation. That is, that upon satisfactory submission of the post-construction report, a water licence would be issued;
· there was no contest at trial, on the evidence, that the respondent did not advise the appellant that a water licence would not or might not be issued at any time before construction of the dam commenced;
· the respondent had not, prior to this case, ever refused a linked application for a water licence where a permit to construct a dam had been granted;
· the appellant reasonably assumed that a water licence would be issued upon satisfactory completion of construction;
· plainly in order to take advantage of the permit it was necessary for the appellant to have achieved substantial commencement by October 2008; and
· in the circumstances, it was reasonable for the appellant to assume that if the respondent had any concerns about the issue of the licence, given the knowledge of the respondent as to the progress of this application and the extensions of time, then advice would have been given to it to that effect." [Footnotes omitted.]
In summary, counsel for the appellant submitted that on all the evidence the apportionment was too high and ought to have been in the range of 10 to 15%
The findings expressed in [91] of his Honour's reasons should not be read in isolation. They should be read together with findings of fact which appear elsewhere in his Honour's judgment, in particular at [66]–[71] inclusive. Those findings make it clear that, as counsel for the respondent pointed out, the appellant knew it did not have a licence when it commenced construction of the dam, it took a risk in commencing construction absent a licence, and it could have decided not to commence construction. The appellant proceeded in reliance on an assumption it made without pressing for finalisation of its licence application, and without making the type of inquiry I adverted to in [58] of these reasons.
I accept his Honour did not specifically state that he considered his determination to be just and equitable and that he was mindful of the standard of care he had to consider. However, he was clearly aware of the provision he was dealing with, and absent some indication from the appellant of a clear error in the exercise of his Honour's discretion (as opposed to a repeat of matters already found not to assist the appellant), I am not satisfied his Honour erred.
I would dismiss the appeal.
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