Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 4)

[2011] VSC 613

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4788 of 2009

CAROL ANN MATTHEWS	Plaintiff
v
SPI ELECTRICITY PTY LTD (ACN 064 651 118)	Defendant

SPI ELECTRICITY PTY LTD (ACN 064 651 118)	Plaintiff by counterclaim
v
UTILITY SERVICES CORPORATION LIMITED (ACN 060 674 580) & ORS	Defendants by counterclaim

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JUDGE:	J FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 November 2011 (written submissions 9 December 2011)
DATE OF RULING:	15 December 2011
CASE MAY BE CITED AS:	Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 4)
MEDIA NEUTRAL CITATION:	[2011] VSC 613

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PRACTICE AND PROCEDURE – Part 4A Supreme Court Act 1986 (Vic) – Common questions for trial – Timing of expert conclaves – Civil Procedure Act 2010 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Tobin SC Mr L Armstrong	Maurice Blackburn Pty Ltd
For SPI Electricity Pty Ltd	Mr J Beach SC Mr B Quinn	Freehills
For USC	Mr R Ray QC Ms E Brimer	Holman Fenwick Willan
For the State parties	Mr C Caleo SC Mr M Rush	Norton Rose

HIS HONOUR:

Introduction

1. On 18 November 2011, I convened a case conference with the aim of settling the common questions (the answers to which will form part of the judgment pursuant to s 33Z of the Supreme Court Act1986 (Vic)) and finalising the timetable of the interlocutory steps prior to the trial commencing on 29 January 2013.

1. The form of the questions was, in effect, settled by agreement in the course of the case management conference.  The primary sticking point in relation to the timeline for the carrying out of interlocutory steps was whether conclaves of experts should be held prior or subsequent to the mediation.  For reasons which I shall set out in a moment, I am of the view that it is both practicable and in the interests of justice that the conclaves be conducted prior to the mediation. 

The common questions

1. Before I set out the questions which are to be determined at the conclusion of the trial, I should say something about the process which resulted in their formulation.  I was assisted greatly by counsel and solicitors for each of the parties in the production of a number of drafts of the questions.  The cooperation between adversaries was, as far as I could tell, exemplary and assisted me greatly in producing a common set of questions which could then be debated at the case conference.

1. In addition, the assistance I received in the course of the case conference in relation to suggested alterations and additions to the draft set of questions was commendable.  Case conferences may not be the panacea for every problem that occurs in the pre-trial process but at times this option provides a singularly efficient and cooperative method to resolve obstacles and difficulties in a less constrained atmosphere than that of a formal court hearing.  I am not sure whether the manner in which this process operated owes anything to the effect of the Civil Procedure Act 2010 (Vic) but what is clear is that this process when undertaken conscientiously by the parties (as it was here) fulfils a number of the objectives identified in s 9 of that Act.

1. Set out below are the common questions for determination at the trial:

PRELIMINARY

1. What was the cause of the ignition of the Kilmore fire (“the fire”)?

2. What areas were damaged by the fire (“the fire areas”)?

THE CLAIMS AGAINST SPI

SPI STATUTORY DUTY

3. Did section 75 of the ES Act impose upon SPI any and if so what statutory duty which gave rise to or created any private right or cause of action for the benefit of any claimants and/or class of claimants?

4. Did SPI breach the statutory duty in relation to the SWER line and/or the pole and its infrastructure?

5. If SPI breached the statutory duty, was this a cause of any losses sustained by the claimants and/or class of claimants?

SPI COMMON LAW DUTY

6. Did SPI owe a common law duty to any claimants and/or class of claimants to exercise reasonable care in relation to the management, maintenance and control of the SWER line and/or the pole and its infrastructure to avoid:

a)   personal injury or death; and/or

b)     physical damage to property; and/or

c)   economic loss resulting from damage to property; and/or

d)     economic loss which did not result from damage to property?

7. Did the common law duty extend to SPI ensuring that reasonable care was taken by any contractors engaged by it in relation to the management, maintenance and control of the SWER line?

8. Did SPI breach the common law duty in relation to the SWER line and/or the pole and its infrastructure?

9. If SPI breached the common law duty, was such breach a cause of any losses sustained by the claimants and/or class of claimants?

SPI NUISANCE

10. Did SPI create a nuisance, in the form of the fire, which unreasonably interfered with the use or enjoyment of land (or interest in land) of any of the claimants and/or class of claimants?

11. Is SPI liable to any of the claimants and/or class of claimants for any loss or damage caused by the creation of a nuisance, in the form of the fire?

THE CLAIMS AGAINST UAM[1]

[1]Utility Asset Management is a division of Utility Services Corporations Ltd.

UAM COMMON LAW DUTY

12. Did UAM owe a common law duty to any claimants and/or class of claimants to exercise reasonable care in carrying out its operations in relation to the SWER line and/or the pole and its infrastructure pursuant to the UAM Contract to avoid:

a)   personal injury or death; and/or

b)     physical damage to property; and/or

c)   economic loss resulting from damage to property; and/or

d)     economic loss which did not result from damage to property?

13. Did UAM breach the duty in relation to the SWER line and/or the pole and its infrastructure?

14. If UAM breached the common law duty, was such breach a cause of any losses sustained by any of the claimants and/or class of claimants?

15. Is SPI liable for any losses caused by the breach by UAM of its common law duty?

THE CLAIMS AGAINST DSE

DSE STATUTORY DUTIES

16. Did section 62(2) of the Forests Act impose upon DSE any, and if so what, statutory duty which gave rise to or created any private right or cause of action for the benefit of any claimants and/or class of claimants?

17. Did section 17(2)(b) of the National Parks Act impose upon DSE any statutory duty, and if so what, which gave rise to or created any private right or cause of action for the benefit of any claimants and/or class of claimants?

18. Did DSE breach either of the above statutory duties?

19. If DSE breached either of the statutory duties, was such  breach a cause of any losses sustained by any claimants and/or class of claimants?

DSE COMMON LAW DUTIES

20. Did DSE owe a common law duty to any claimants and/or class of claimants to take reasonable care, by itself or its agents, to ensure that timely and adequate planned burning was undertaken in the forested area so as to achieve the planned burning benefits?

21. Did DSE owe a common law duty to the personal injury claimants to exercise reasonable care in the provision of bushfire warnings to persons in the fire area?

22. Did DSE owe a common law duty to the personal injury claimants to take reasonable care in the provision of advice to members of the Victoria Police to enable them to issue bushfire warnings to persons in the fire area?

23. Did DSE breach any of the common law duties?

24. If DSE breached any of the common law duties, was such breach a cause of any losses sustained by any claimants and/or class of claimants?

THE CLAIMS AGAINST CFA

CFA STATUTORY DUTY

25. Did section 20 of the CFA Act impose upon the CFA any and if so what statutory duty which gave rise to or created any private right or cause of action for the benefit of any claimants and/or class of claimants?

26. Did CFA breach the statutory duty?

27. If CFA breached the statutory duty, was such breach a cause of any losses sustained by any claimants and/or class of claimants?

CFA COMMON LAW DUTY

28. Did CFA owe a common law duty to any claimants and/or class of claimants to exercise reasonable care in relation to effective suppression of fires for protection of life and property in the fire area to avoid:

a)   personal injury or death; and/or

b)     physical damage to property; and/or

c)   economic loss resulting from damage to property; and/or

d)     economic loss which did not result from damage to property?

29. Did the CFA owe a common law duty to the personal injury claimants to exercise reasonable care in the provision of advice to members of Victoria Police to enable them to issue bushfire warnings to persons in the fire area?

30. Did CFA owe a common law duty to the personal injury claimants to exercise reasonable care in the provision of bushfire warnings to persons in the fire area?

31. Did CFA breach any of the common law duties?

32. If CFA breached any of the common law duties, was such breach a cause of any losses sustained by any claimants and/or class of claimants?

THE CLAIM AGAINST VICTORIA POLICE

VICTORIA POLICE COMMON LAW DUTY

33. Did the emergency response plan State Coordinator, Deputy Coordinator or the Kilmore Fire Emergency Response Coordinators owe a common law duty to the personal injury claimants to take reasonable care to issue effective and timely bushfire warnings to persons in the fire areas?

34. Did any of the identified members of the Victoria Police breach the common law duty?

35. If an identified member(s) of the Victoria Police breached the common law duty, was such breach a cause of any personal injury sustained by the claimants and/or class of claimants?

APPORTIONABLE CLAIMS

36. Are claims for economic loss or property damage against the First, Second, Third and Fourth Defendants ‘apportionable’ claims within the meaning of  Part IVAA of the Wrongs Act?

37. For any apportionable claims, are any of the defendants concurrent wrongdoers and, if so, what is the proportionate responsibility of each concurrent wrongdoer in each case?

38. To what extent, if any, are SPI, UAM, DSE, CFA and the State of Victoria are liable to make contribution to or indemnify each other pursuant to Part IV of the Wrongs Act in respect of their respective liabilities?

CONTRACTUAL CLAIMS[2]

[2]I doubt whether these questions are strictly “common questions” as they relate to the liability of UAM to SPI – but they are inter-related to the liability issues generally and should be determined as part of the liability process.

39. Did UAM breach the UAM contract?

40. If UAM breached the UAM contract, did SPI suffer loss or damage as a result of that breach?

41. If UAM breached the UAM contract, and SPI suffered loss and damage, was any loss and damage caused by that breach?

42. If UAM breached the UAM contract and SPI did suffer loss or damage, is UAM obliged to indemnify SPI for that loss and damage?

43. If SPI suffered loss and damage and damages are recoverable by SPI against UAM:

a)   Was SPI contributory negligent; and

b)     If so, to what extent, having regard to SPI’s share in the responsibility for the SPI loss and damage, should the damages recoverable by SPI against UAM be reduced?

The timing of the conclaves of experts

1. Subsequent to the case conference, and at my direction, each of the parties provided a list of the experts (with their respective areas of expertise) whom they intended to call at the trial.  Each of the lists was accompanied by riders and reservations as to changes in circumstances, the effect of discovery etc.  I repeat what I said at the case conference: This exercise is not part of some tactical litigation game carried out for the benefit of the parties and their practitioners.  The aim here is to obtain genuinely independent opinions to assist the trial judge in the determination of the trial issues.  The lists provided will form the basis for decisions I make as to case management during 2012.  For any variation or addition I will need to be satisfied that the relevant list was prepared in good faith and that any alteration is genuinely necessary for a fair trial of the issues.

1. Mrs Matthews says that she anticipates presenting the following expert evidence: 

1.        Asset management policies and practices;

·     Dr Nick Hastings

2.        Recloser settings and protections policy and practice;

·     TBC

3.        Line design, wind induced vibration, protection from wind-induced stress and failure

·     Mr Henry Hawes

4.        Cause of conductor failure

·     Dr Jeff Gates

5.        Cause of ignition, risks of fire ignition from SWER lines

·     Dr Trevor Blackburn

6.        Inspections policy, practice and training.

·     TBC

1. SPI says that it anticipates presenting the following expert evidence:

1.        Metallurgy, fracture mechanics and materials science

·     Professor Robert Ritchie (USA)

2.        Fractography, forensic engineering

·     Dr Simon Barter

3.        Asset management principles

·     Mr Sandy Dunn

4.        Fire ignition and protection devices

·     Regents Professor Don Russell (USA)

5.        An expert (not yet instructed) as to:

(a)       Asset inspection techniques and systems;

(b)      Loss assessment;

(c)       The prescribed burning that could and should have been undertaken in relation to the Kilmore fire area prior to 7 February 2009 and the effect that same would have had on the Kilmore fire;

(d)      The nature of the terrain (including fuel type) prior to 7 February 2009 and as to the development of the Kilmore fire on and following 7 February 2009;

(e)       Fire suppression industry practice (particularly as to the scale nature and allocation of resources for a first attack on a bushfire, both generally and in circumstances similar to those existing shortly after ignition of the Kilmore East fire); and

(f)       Industry practice requirements for warning and the failure of the warnings issued to meet the same.

1. USC says that it anticipates presenting the following expert evidence:

1.        Vibration engineering

·     David Harvard, Harvard Engineering Inc (Canada)

·     Charles Rawlins (USA)

2.        Engineering investigations

·     Peter Collins, Power-Lec Engineering Pty Ltd

3.        Vegetation management

·     Ben Kenyon, Homewood Consulting Pty Ltd

4.        Metallurgical engineering

·     Barry Gartner, AMAT Materials Engineering Pty Ltd

1. The State parties say that they anticipate presenting the following expert evidence:-

1.Land Management - theory & operational aspects

·     TBC

2.Land Management - policy & allocation of resources

·     TBC

3.Land Management - ecological impact

·     TBC

4.        Fire behaviour - wind field prediction

·     TBC

5.        Fire planning, modelling, mapping

·     TBC

6.        Operational wildfire fighting

·     Richard Mangan

7.        Meteorology

·     TBC

8.        Atmospheric science

·     TBC

9.        Emergency Management

·     TBC

1. It will be necessary to hold separate conclaves of experts, given the disparate allegations of negligence, the different areas of expertise and the scope of the opinions likely to be expressed.  The mechanics of this arrangement can be sorted out over the next couple of months – as long as the experts are aware that they must confer and be available to give evidence in May 2013.  Whatever the timing of the conclaves, an important part of their function will be the provision of joint expert reports which will provide the basis for the concurrent evidence sessions at the trial.  So that there is no misunderstanding about the importance of the conclaves, I emphasise that participation in the conclave and the production of a joint report is a pre-condition to the expert giving evidence in the trial. 

Submissions

1. Mrs Matthews and the defendants could not agree as to whether the conclaves of experts should take place prior to the mediation or subsequent to its completion.

1. Mrs Matthews’ counsel argued that it was beneficial for the purpose of a mediation to know exactly what the experts were agreed upon and what was likely to be in issue.  A conclave, followed by a joint report, will assist in clarifying those opinions, particularly if some of the individual reports are opaque in relation to either the reasoning or the conclusion

1. The defendants, as a group, opposed this course.  Counsel submitted that the issues of agreement and discrepancy could be gleaned by exchange of reports prior to the conclave and that the incurring of significant costs may be avoided by holding the conclave, if needed, subsequent to the mediation.  It was also argued that any issues that were exposed as matters of difference could be dealt with by replies being filed by the experts prior to the mediation.

Analysis

1. In my opinion, the submissions of Mrs Matthews should be accepted for the following reasons.  First, it is the course of action that would best promote the objectives of the Civil Procedure Act 2010 (Vic), namely, the just, efficient, timely and cost-effective resolution of the real issues in dispute. It is also consistent with the obligations imposed upon the parties by the Act including, inter alia, identifying the real issues in dispute in the proceeding as early as possible and taking steps in the proceeding to resolve or determine the dispute.  I think that early conclaves would enhance the prospects of success of the mediation (discussed further below) and therefore be consistent with the requirements of the Act. 

1. Secondly, once the experts have committed their thoughts to writing, it is highly desirable that they meet in a lawyer-free environment as soon as practicable in an endeavour to sort out those issues upon which they agree and disagree.  Often such a discussion will produce a consensus which was not apparent in the original reports (alternatively, there may be a limiting of the issues of disagreement between the experts).  The production of joint reports will assist considerably in the refinement of the issues in dispute.

1. Thirdly, there is a distinct positive to conducting a mediation where there are documents in the form of the joint reports setting out the areas of agreement and disagreement between the experts, rather than leaving it to the lawyers to debate what the experts mean or do not mean in their reports.  Consequently, absent other considerations, it is preferable that the joint reports be completed and available prior to the mediation.  This can only enhance the prospects of a successful mediation.

1. Fourthly, I do not accept the contention put on behalf of the defendants that the provision of response reports by the experts is a satisfactory alternative to holding conclaves prior to the mediation.  In the context of this case, this exercise would merely cause a flurry of lawyer-inspired reports which, if anything, may make the prospect of agreement on issues less likely (not to mention the effect on timber production).  By far the preferable approach is to have the experts meet in joint sessions after the filing of their reports and to then, in an uninfluenced environment, determine the real issues for trial.

1. Finally, I am not persuaded by the protestations of the defendants as to the cost of the exercise.  The case conferences and directions hearings have been attended by 12-14 lawyers (usually four senior counsel attend).  I shudder to think of the costs that are being expended in relation to the prosecution and defence of this claim, particularly in relation to discovery.  The trial itself will probably take four to six months and the costs involved in that exercise will be massive.  The potential damages verdict, given the destruction that occurred as a result of the fire, will be enormous.  In the scheme of things, I think that complaints about the expense of the experts conferring prior to a mediation can safely be put to one side, particularly if the provision of joint reports clarifies the issues in dispute and consequently facilitates the conduct of the mediation.

1. In summary, I will direct that the conclaves of experts and production of the joint reports take place prior to the mediation.

Orders

1. I will make the following orders:-

1.The issues to be determined at trial are set out in Annexure A to this order.

2.By 13 April 2012, the parties finalise the discovery process.

3.By 4 May 2012, the parties exchange draft questions for expert witnesses.

4.By 18 May 2012, the parties file and serve lists of questions for experts.

5.By 17 August 2012, the parties file and serve their expert reports.

6.By no later than 5 October 2012 the parties’ experts on particular issues shall meet in conference and prepare for the Court a joint report:

(a)       addressing each of the questions on particular issues;
(b)      identifying each of the matters on which they agree;

(c)identifying each of the matters on which they do not agree; and

(d)providing detailed reasons outlining the basis on which they are unable to agree on any matter relating to any of those questions on particular issues.

7.In respect of the conference(s) of the experts on particular issues it is directed:

(a)the experts’ conference(s) be private to the experts and confidential and there be no involvement of the parties or legal practitioners; and

(b)the experts’ joint report(s) be delivered to the parties’ solicitors as soon as is practicable.

8.By 26 October 2012 the parties file the experts’ joint report(s).

9.By 26 October 2012, the parties file an agreed chronology of events relevant to the Plaintiff’s claim.

10.By 26 October 2012, the parties file and serve a list of witnesses (excluding expert witnesses) they intend to call at the trial.

11.By 16 November 2012, mediation of the proceeding be conducted by a mediator approved and/or appointed by the Court.

12.The mediation be attended by those persons who have the ultimate responsibility for deciding whether to settle the dispute and the terms of any settlement, and the lawyers who have ultimate responsibility to advise the parties in relation to the dispute and its settlement.

13.By 23 November 2012, the mediator report to the Court and to the Class Actions Coordinator on the outcome of the mediation.

14.Subject to any further order, the costs of the mediation be paid by the parties in equal shares.