Matthews v SPI Electricity (Ruling No 22)

[2013] VSC 221

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) AND ORS	Defendants

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JUDGE:	J FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 May 2013
DATE OF RULING:	3 May 2013
CASE MAY BE CITED AS:	Matthews v SPI Electricity & Ors (Ruling No 22)
MEDIUM NEUTRAL CITATION:	[2013] VSC 221

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PRACTICE AND PROCEDURE – Pleadings – Particulars – Scope of the allegation contained in particulars – Opportunity to meet the case put by an opponent.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Richter QC with Mr T Tobin SC Mr A J Keogh SC Mr L W L Armstrong & Ms M Szydzik	Maurice Blackburn
For the First Defendant	Mr J BR Beach QC with Mr P H Solomon SC Mr B F Quinn SC Mr D J Farrands Mr C O Parkinson & Mr J H Kirkwood	Herbert Freehills Smith
For the Second Defendant	Mr R Ray QC with Ms E M Brimer	Holman Fenwick Willan
For the Third, Fourth and Fifth Defendants	Mr C M Caleo SC with Mr P E Anastassiou SC Ms W A Harris SC Mr S A O’Meara SC Mr P Zappia Ms A L Robertson Dr M D Rush Mr N McAteer & Mr A D Pound	Norton Rose

HIS HONOUR:

Introduction

1. A body of evidence relevant to the condition and appearance of the Valley Span and its infrastructure has been admitted into evidence. It is relevant to the background concerning the failure of the conductor and to the issue of causation. However, at least to my mind, it is also relevant to particular (vi) of the particulars of breach in paragraph 19 of Mrs Matthews’ statement of claim which alleges that the Valley Span conductor should have been replaced prior to 2009.

1. During the course of Mrs Matthews’ case I became concerned that SPI and its legal team had not appreciated that this body of evidence, and other evidence which may emerge concerning the condition and appearance of the conductor, was being led in relation to this third basis. That concern proved to be correct. SPI said, and I accept, that it treated particular (vi) as “conclusionary” in light of earlier particulars, thus anticipating that the case in relation to replacement of the Valley Span conductor would be informed by those particulars preceding particular (vi), specifically particulars (i)-(v) which are limited in scope.

1. I did not share that view.  I had assumed that the particular was, in effect, stand alone and would support a wide body of evidence relevant to the conductor, its appearance, history, location, inspection regime, maintenance, repair and environmental impacts upon the span.

1. It was imperative that this potential confusion be resolved as soon as practicable and, as a result, I directed that Mrs Matthews provide further and better particulars of particular (vi) in the hope that this would provide clarification as to the scope of the matters underpinning that allegation.

Paragraph 19 and particular (vi)

1. Paragraph 19 of Mrs Matthews’ statement of claim alleges breaches by SPI of its statutory and common law duties and provides particulars to that allegation.[1]

   [1]Eighth Amended Statement of Claim dated 25 February 2013 [19].

1. Particular (vi) to paragraph 19 reads as follows:

failing to replace the Valley Span conductor prior to February 2009.[2]

[2]Eighth Amended Statement of Claim dated 25 February 2013 [19].

The further and better particulars

1. On 1 May 2013, Mrs Matthews filed further and better particulars to particular (vi) of paragraph 19 of their statement of claim. It says:

Amend item (vi) to read as follows:

(vi)      failing to replace the Valley Span conductor prior to February 2009 upon the basis that, as SPI knew or ought reasonably to have known:

a)the said conductor was exposed to all or most of the risk factors in (iii) above;

b)the said risk factors indicated a significant risk that the Valley Span conductor may have suffered damage over the course of its life in service, including damage in the nature of surface irregularities caused by one or more of corrosion, arcing, lightning strikes, impacts from airborne objects, impacts from maintenance tools, or contacts with attachment devices (such as helical joints, helical terminations or tie-wires);

c)there were in fact on the Valley Span, from not later than 1999:

1.two mid-span helical “splices” or “joints” which probably indicated, or as a matter of prudent asset management should have been assumed to indicate, one or more past incidents of major damage to the conductor, and in particular suggesting past lightning strike(s);

2.disc insulators which post-dated 1973, which probably indicated, or as a matter of prudent asset management should have been assumed to indicate, one or more past incidents of major damage to previous disc insulators or of re-sagging of the conductor, which incidents might concurrently have caused damage to the conductor; and

3.a tie-wire on pole 39 that was visibly different in colour (suggesting different time in service) from the adjacent conductor and from the tie-wire on pole 38, which (alone or together with significant visible “mud-staining” on the pole 39 pin insulator, and loose or missing coach bolts on the pole 39 pole cap) probably indicated, or as a matter of prudent asset management should have been assumed to indicate, the exposure of the original tie-wire and also the conductor to corrosion or vibration damage such that the original tie-wire had required replacement before 1999;

d)damage as described in “b” could be exacerbated over time by subsequent corrosion, arcing or mechanical loads from wind-induced vibration;

e)the said exacerbation could lead to failure of the conductor;

f)the process of exacerbation of any damage as described in “d” was not, and probably had never been, impeded or prevented (to the extent possible) by vibration dampers, since dampers probably had never been, and from at least 1999 were not, installed on the Valley Span;

g)SPI’s systems for scheduled inspections of SWER assets could not, by reason of

(1) the difficulty (by reason of its minute and localised nature) of observing damage as described in “b” and “d” above; further or alternatively

(2) the matters set out in (vii) to (xix) below;

safely be relied upon to ensure that the damage would be detected during scheduled inspections or in time to prevent an in-service failure of the conductor; and

h)the Valley Span was in a high bushfire risk area with major forests, parks, and populated areas to the south and east.

Submissions

1. Counsel for SPI contended that particular (vi) was not a stand-alone particular but rather conclusionary, flowing from the particulars which preceded it.  Particulars (i) to (v) read as follows:

(i)     failing to have or implement adequate systems for determining risk factors affecting the likelihood of failures of SWER installations and in particular conductors;

(i)            failing to keep keep adequate records to identify SWER installations operating in conditions presenting increased risk of damage and failure;

(iia)     failing to consider and take into account, adequately or at all, the condition of the Valley Span, by failing to consider and take into account the history of maintenance and inspection of the SWER installations on the Valley Span for the purpose of informing the content and frequency of inspections and maintenance of the Valley Span;

(iib)    failing to keep adequate and accessible records so that it could consider and take into account the condition, further or alternatively the history of maintenance and inspection, of the Valley Span in setting the content and frequency of inspections and maintenance of the Valley Span;

(iii)     failing to take reasonable steps to identify the Valley Span as a span subject to increased risk of installation damage and failure, being risks arising from inter alia:

a. its length of approximately 1043 metres, being one of the 16 longest spans on the SPI SWER network;

b.   its time in service, being approximately 43 years;

c.   its anticipated service life of 40 to 60 years;

d.   its unknown tension;

e.   its location, being strung between two hills or ridges;

f.  its location in terrain defined by ENA C(b)1-2006 as Type II terrain;

g.   its likely exposure to high wind;

h. its likely exposure to high-frequency low-amplitude vibration induced by wind, associated with its location;

i.  its small diameter, being the smallest diameter conductor available;

j.  the absence of vibration dampers;

(iiia)   failing to provide adequate instructions, further or alternatively adequate information, to its contractors and agents:

a. regarding the existence of, or the risk of existence of, any faulty, defective, deteriorated in condition or incorrectly assembled assets on or forming part of the Valley Span; or

b. for the purpose of identifying any faulty, defective, deteriorated in condition or incorrectly assembled assets on or forming part of the Valley Span;

either at the time it acquired the electricity distribution business or at all;

(iv)      failing to have any or any adequate program for scheduling replacement of SWER conductors on a precautionary (“scheduled discard”) basis according to an adequate assessment of the reliability of the conductor having regard to risk factors affecting the conductor;

(v)       having or purporting to have a system of replacing conductors according to inspections of their condition during scheduled inspections, in circumstances where the content and frequency of scheduled inspections was inadequate, as referred to in particulars (vii) to (xix) below;

1. Senior counsel for SPI argued that that I should interpret particulars (i)-(v) as dealing with an increased risk profile of the Valley Span and other identified risks which are then followed by the conclusionary point in particular (vi). SPI says this interpretation is consistent with the approach adopted by senior counsel for Mrs Matthews in his opening submissions. On that basis, only evidence that goes directly to the matters listed in particulars (i)-(v) is relevant to particular (vi).

1. Senior counsel for Mrs Matthews said that there is no basis to treat particular (vi) as conclusionary.  It meant what it said: any evidence relevant to the argument that the span should have been replaced was admissible as it was within the scope of particular (vi). Counsel also directed me to the sections of transcript from the opening day of trial when senior counsel for Mrs Matthews alleged that SPI knew that this conductor had been hit by lightning at least once and that repairs had been undertaken on the Valley Span as a result of such lightning strike.  He also made the allegation that SPI had known the importance of scheduled replacement of old assets in high bushfire risk areas.[3]

   [3]T 10-11.

Analysis

1. I am of the view that particular (vi) is a stand-alone particular and, as such, Mrs Matthews is entitled to lead evidence to support that allegation. I do not think that this set of particulars can be read as though it were a contractual document.  On its face particular (vi) makes no reference to the other particulars and the fact that it is a bland assertion and does not descend into detail does not mean it cannot be relied upon. It is sufficiently wide enough to encompass the matters referred to in the proposed further and better particulars.  It follows that Mrs Matthews is entitled to rely upon the proposed further and better particulars which now spell out her allegations under this particular.

1. As I mentioned earlier, I accept that SPI and its legal team have prepared SPI’s case on what I have concluded is a misapprehension of the effect of particular (vi). Senior Counsel for SPI says (and I accept) that SPI did not seek further and better particulars of the allegation due to this misunderstanding. Whilst SPI has been aware of the tenor of the allegations now contained in the further and better particulars, some aspects, particularly that of the effect of lightning strikes and corrosion, have been examined more in the context of causation than that of breach of duty. I accept that SPI is not, at short notice, able to meet some aspects of the case now particularised.

1. I will therefore permit SPI a short period of time prior to commencing its case to canvass these issues with its witnesses. I will also allow SPI to discuss parts of the evidence of Messrs Knop and Reuel which are relevant to particular (vi) and the further and better particulars with its witnesses. If SPI wish to recall Mr Knop or Mr Reuel on this issue, I will accommodate such an application.

Conclusion

1. I propose the following -

a)   Mrs Matthews will have leave to file her proposed further better and particulars of particular (vi) to paragraph 19 of her statement of claim.

b)     As an exception to my order in relation to witnesses out of Court, I will give SPI (and its legal advisers) leave to discuss the evidence of Mr Knop and Mr Reuel, in relation to the further and better particulars of particular (vi), with the witnesses it proposes to call. 

c)   SPI’s case will commence on Wednesday 8 May 2013.