Premier Building & Consulting Pty Ltd v Spotless Group Ltd
[2007] VSC 377
•5 October 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
| AT MELBOURNE COMMERCIAL AND EQUITY DIVISION BUILDING CASES LIST |
No. 8264 of 2003
| PREMIER BUILDING AND CONSULTING PTY LTD | Plaintiff |
| (Receivers appointed) (ACN 066 568 367) | |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) AND | Defendants |
| OTHERS |
----------------------------------------
IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST
No. W9/2004
| PREMIER BUILDING AND CONSULTING PTY LTD | Applicant |
| (Receivers Appointed) (ACN 066 568 367) | |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) AND | Respondents |
| OTHERS |
----------------------------------------
IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST
No. W61/2005
| NORTH SUBURBAN PROPERTIES PTY LTD | Applicant |
| (ACN 065 883 614) | |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) AND | Respondents |
| OTHERS |
----------------------------------------
| JUDGE: | Byrne J | ||
| WHERE HELD: | Melbourne | ||
DATES OF HEARING: | 3-6, 9-12, 16-17, 19, 23-26 October, 8-10, 13-16, 20-23, 27-30 November, 4-6, 12 and 14 December 2006, 22-25, 29-31 January, 1-2, 5-8, 12-13, 21, 26-28 February, 5-8, 13-15, 19-22, 27-28 March, 2-4 April 2007. | ||
| DATE OF JUDGMENT: | 5 October 2007 | ||
| CASE MAY BE CITED AS: | Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No. 12) | ||
| MEDIUM NEUTRAL CITATION: |
|
---
PRACTICE AND PROCEDURE – trial judge sitting as judge and as member of VCAT.
Victorian Civil and Administrative Tribunal Act 1998 s. 29
ENVIRONMENTAL LAW – source of pollution – compensation order – person who has caused pollution to occur – defendant caused pollutant to be brought onto land - whether pollution of soil a natural consequence of bringing the pollutant onto land – whether defendant caused pollution to occur – whether compensation available for pollution caused prior to commencement of the Act.
Environment Protection Act 1970 s. 62A
ENVIRONMENTAL LAW – pollution of groundwater – source of pollution – whether defendant
polluted water – beneficial use of land – whether presence of contaminant is harmful or
potentially harmful to the health, welfare or safety of human beings or other life.
Water Act 1989 s. 15
CORPORATIONS – corporate group – lifting the corporate veil – whether subsidiary acted as agent for holding company – whether holding company and subsidiary engaged in joint enterprise.
NEGLIGENCE – duty of care – duty of occupier of land to future occupants of adjoining land.
NUISANCE – creating nuisance – whether interference with use and enjoyment of plaintiff’s land
– continuing nuisance – whether defendant knew of existence of nuisance.
LOCAL GOVERNMENT – building surveyor – whether building permit inconsistent with planning
permit – whether duty is with respect to non-building conditions of planning permit –
surveyor’s duty to have regard to Ministerial Guidelines – duty of surveyor to enquire as to
compliance with planning permit.
Building Act 1993 ss. 24, 188(7)
---
| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/Applicant | Mr J Burnside QC | Gadens Lawyers |
| (Premier) | with Mr T Boston | |
| For the First, Third and | Mr S G Finch SC | Freehills |
| Ninthnamed Defendants | with Mr T J Walker and | |
| (Spotless Parties) | Mr J Slattery | |
| For the Secondnamed | Mr M Dreyfus QC | Mirabelli, D’Ortenzio & Co |
| Defendant/Applicant | with Ms Marita Foley | |
| (North Suburban) | ||
| For the Fourthnamed | Mr R Manly SC | Monahan + Rowell |
| Defendant (Collie Planning) | with Mr M Whitten | |
| For the Fifthnamed Defendant | Mr J Gobbo QC | Deacons |
| (Keen Planning) | with Mr D Aghion | |
| For the Sixthnamed | Mr R Macaulay SC | Moray & Agnew |
| Defendant | with Dr A Hanak | |
| (Moreland Council) | ||
| For the Seventhnamed | Mr J R Dixon | Slater & Gordon |
| Defendant | with Ms R Doyle (to 30/11/06) | |
| (Kilpatrick) | and Mr Bernard Carr | |
| (from 22/1/07) | ||
| For the Eighthnamed | Mr AG Uren QC | Mallesons Stephen Jaques |
| Defendant | with | |
| (McMullin Nominees) | Mr Stephen H Parmenter | |
| For the Tenthnamed | Mr J Davis | Tresscox |
| Defendant (McKenzie Group) | with Mr J Lewis | |
| For the Third Party | Mr W Lally QC | Mills Oakley |
| (Burkett) | with Mr J Nixon |
TABLE OF CONTENTS
1. Introduction.............................................................................................................................1
The Spotless Parties ............................................................................................................2
The Contamination Allegations........................................................................................3
The Claims ...........................................................................................................................5
The Settlements ...................................................................................................................8
The Open Offers................................................................................................................10
The Apportionment Claims ............................................................................................10
The Trial .............................................................................................................................15
Questions Deferred...........................................................................................................18
2. The Issues / Pleadings .........................................................................................................18
Non-Controversial Matters .............................................................................................18
Basic Chronology..............................................................................................................20
Premier’s Claims against the Spotless Parties ..............................................................22
Nuisance..........................................................................................................................23
Negligence.......................................................................................................................26
Statutory Claims.............................................................................................................28
Contribution....................................................................................................................29
Premier’s Claims against North Suburban ...................................................................29
Contribution....................................................................................................................31
Premier’s Claims against Kilpatrick...............................................................................31
Contribution and Apportionment...................................................................................34
Premier’s Claims against Collie Planning.....................................................................34
Contribution and Apportionment...................................................................................35
Premier’s Imputed Claims against Keen Planning......................................................35
Premier’s Imputed Claim against McKenzie Group ...................................................37
North Suburban’s Claims against the Spotless Parties ...............................................39
3. The Environmental Legislative Background ..................................................................40
4. The Contamination on the Premier Land........................................................................46
The Contaminants.............................................................................................................46
The Environmental Science Evidence............................................................................49
The Sites .............................................................................................................................56
The Nature and Extent of the Contamination ..............................................................58
PCE .................................................................................................................................58
White Spirit.....................................................................................................................61
The Source of the Contaminants ....................................................................................63
PCE .................................................................................................................................64
Suggested release mechanisms..............................................................................66
Discharge of vapour ................................................................................................66
Still residue disposal ...............................................................................................68
Waste water disposal ..............................................................................................68
Solex...........................................................................................................................69
Other leakage and spillage .....................................................................................69
Hydrogeological and geological considerations.................................................69
Conclusions ..............................................................................................................71
White Spirit.....................................................................................................................73
The use of the contaminants ..................................................................................73
Conclusions ..............................................................................................................76
5. The Barkly Street Project ....................................................................................................77
Background........................................................................................................................78
10 November 1999 – The Purchase ................................................................................82
End February 2000 – The Receipt of the Kilpatrick Report ........................................87
May 2000 – The Rezoning................................................................................................88
End June 2000 – Collie Retainer Terminated ................................................................89
21 April 2001 – Planning Permit .....................................................................................90
Stage 1 Building Permit ...................................................................................................96
Stage 2 Building Permit ...................................................................................................98
To March 2003 – Auditor Appointed.............................................................................99
6. The Corporate Identity Issue ...........................................................................................102
Background......................................................................................................................103
Legal Principles...............................................................................................................104
Principal and Agent......................................................................................................105
Joint Enterprise .............................................................................................................109
The Corporate History ...................................................................................................111
The Operating Companies ............................................................................................113
Spotless Laundry – 1963-1976 .....................................................................................113
Managerial control.................................................................................................113
Dealing with regulatory authorities....................................................................114
The ownership of assets........................................................................................115
Payment of outgoings ...........................................................................................115
Strategic decisions .................................................................................................117
Conclusion ..............................................................................................................117
Spotless Supply – 1976-1982........................................................................................118
Managerial control.................................................................................................118
Accounting..............................................................................................................118
Dealings with regulatory authorities..................................................................119
Strategic decisions .................................................................................................119
Conclusion ..............................................................................................................121
Ensign Aust 1982-1987................................................................................................121
Managerial control.................................................................................................122
Accounting..............................................................................................................122
Conclusion ..............................................................................................................123
7. Nuisance Claims against the Spotless Parties ..............................................................123
White Spirit Nuisance ....................................................................................................123
Nuisance against Spotless.............................................................................................124
Nuisance against Spotless Services ..............................................................................126
Nuisance against Ensign Aust .....................................................................................127
PCE Nuisance..................................................................................................................127
8. Negligence Claims against the Spotless Parties...........................................................129
9. Premier’s Statutory Claims against the Spotless Parties ............................................133
The Environment Protection Act s. 62A Claim..............................................................133
Retrospectivity ..............................................................................................................134
The Pollution.................................................................................................................135
The Source of the Pollution...........................................................................................135
“Person Who has Caused …”.......................................................................................136
The Water Act s. 15 Claim ..............................................................................................147
The Respondent Performed the Polluting Act ..............................................................152
The Act of Pollution Caused Economic Loss ................................................................152
10. Premier’s Claims against North Suburban ...................................................................154
The Nuisance Claim .......................................................................................................156
Negligence .......................................................................................................................159
Environment Protection Act s. 62A claim.......................................................................160
Water Act s. 15 Claim......................................................................................................161
11. Premier’s Claims against Kilpatrick...............................................................................162
The Kilpatrick Report.....................................................................................................162
The Negligence Claim....................................................................................................164
Duty of Care..................................................................................................................165
Breach............................................................................................................................170
Reliance .........................................................................................................................175
The Trade Practices Claim.............................................................................................177
The 14 September 2001 Letter .......................................................................................179
Negligence Claim............................................................................................................181
Trade Practices Claim.....................................................................................................181
12. Premier’s Claim against Collie Planning ......................................................................182
13. Premier’s Imputed Claims against Keen Planning .....................................................190
14. Premier’s Imputed Claims against McKenzie Group.................................................194
Breach of Contract ..........................................................................................................195
Statutory Claim ...............................................................................................................196
Negligence .......................................................................................................................196
15. North Suburban’s Claims against the Spotless Parties ..............................................204
The s. 62A Claim .............................................................................................................204
The Water Act s. 15 Claim ..............................................................................................207
16. Loss and Damage ...............................................................................................................207
Premier’s Purchase Losses.............................................................................................210
Premier’s Common Law Claims against the Spotless Parties ......................................210
Premier’s Statutory Claims against the Spotless Parties .............................................217
Premier’s Development Losses.....................................................................................218
Premier’s Claims against North Suburban ..................................................................218
Premier’s Claims against Kilpatrick .............................................................................220
Premier’s Claims against Collie Planning....................................................................222
Premier’s Imputed Claims against Keen Planning ......................................................223
Premier’s Imputed Claim against McKenzie Group ....................................................225
North Suburban’s Claims against Spotless Parties......................................................225
17. Apportionment and Contribution ..................................................................................226
18. Conclusions and Orders ...................................................................................................228
HIS HONOUR:
1. Introduction
By contract of sale dated 10 November 1999 the plaintiff, Premier Building and Consulting Pty Ltd ("Premier"), purchased an industrial site situate at and known as 227-231 Barkly Street, Brunswick. Notwithstanding that the events of this judgment concern a period prior to the purchase of this land, I shall refer to it as "the Premier land". The vendor of the Premier land was Babka Pty Ltd, which is not a party to this proceeding. On the Premier land at the time of purchase there stood a warehouse which covered nearly the whole of the land. The intention of Premier at the time of purchase was to have the land rezoned and to develop it for residential units for sale.
And this was duly done. The Premier land was, on 4 May 2000, rezoned mixed use with an environmental audit overlay. This zoning permitted residential use with a planning permit from the responsible authority. The requirements of the overlay included that there be issued by a registered environmental auditor, a certificate of environmental audit or a statement of environmental audit either before the commencement of construction or before the commencement of the residential use, at the option of the responsible authority. Premier, on 21 April 2001, obtained a planning permit for the development which included a number of conditions, including a condition that there be issued a certificate of environmental audit or a statement of environmental audit prior to the commencement of any works, use or development. In September 2001 it had completed demolition of the existing warehouse and carried out bulk excavation for the underground carpark. By September 2002 it had completed, or substantially completed, the construction of the 49 residential units, most of which had been pre-sold. No certificate or statement had then been issued.
On 26 July 2002, it was apparent that, before issuing an occupancy permit for the apartments, the sixthnamed defendant, Moreland City Council (“Moreland Council”), required that there be obtained a certificate of environmental audit with respect to the land. The site investigations undertaken for the obtaining of this certificate revealed that the land was contaminated with chemicals which were identified as white spirit, perchloroethylene (“PCE”) and trichloroethylene (“TCE”) and the breakdown products of PCE and TCE. I shall refer to these chemicals as “the contaminants”. The breakdown products of PCE mentioned at trial, apart from TCE, were, cis 1,2 – dichloroethylene (cis 1,2-DCE), 1,2 (trans) trichloroethylene, 1,1 dichloroethylene (“DCE”) and vinyl chloride. When I refer to PCE I intend to include these breakdown products unless I indicate otherwise. In its statement of claim,[1] Premier says that it first became aware of this
contamination on or about 7 March 2003.[2]
[1] Fourth further amended statement of claim filed 29 January 2007, as amended by leave on 27 February 2007.
[2] Statement of claim para 5C.
As a consequence of this, a certificate of occupancy permit for the apartments was refused pending remediation. A further consequence for Premier has been that the pre- sales were lost and it has received three clean-up notices from the Environment Protection Authority (“EPA”). Premier has suffered considerable loss and damage as a consequence.
PCE and white spirit are chemicals used in certain processes of dry cleaning. On the land adjoining the Premier land to the east is the property situate at and known as 225 Barkly Street. I shall refer to this land by the name of its occupier for most of the period with which this litigation is concerned, "the Spotless land". The Spotless land had some time previously been used for the purposes of conducting laundry and dry cleaning operations by one or other of companies within the Spotless Group. Premier, therefore, contends that the chemical contamination which existed in 2003 and which still exists on the Premier land has emanated from the usage of the Spotless land for dry cleaning purposes.
The secondnamed defendant, North Suburban Properties Pty Ltd (“North Suburban”), the current owner of the Spotless land, has also received three clean-up notices from the EPA in respect of the contamination which is said to be present on the Spotless land.
The Spotless Parties
Premier alleges that one or more of the companies within the Spotless Group occupied the Spotless land and conducted on it the dry cleaning business and laundry business using white spirit and PCE, which products were released into the ground and which then made their way onto the Premier land. For present purposes the holding company in the Spotless Group was at all material times the firstnamed defendant, Spotless Group Ltd, formerly called Spotless Ltd, a publicly listed company. I shall refer to this company, as did the parties, simply as “Spotless” and it and the companies of which it was the holding company I refer to collectively as “the Spotless Group”. Companies within the Spotless Group include the thirdnamed defendant, Ensign Services (Aust) Pty Ltd (“Ensign Aust”), and the ninthnamed defendant, Spotless Services Ltd, formerly called Ensign Holdings Ltd (“Spotless Services”),[3] which are parties to this proceeding. I shall refer to Spotless and these two subsidiaries as “the Spotless Parties”.
[3] Statement of claim para 3G, defence para 3G.
Other companies within the Spotless Group but which are not parties to this litigation are the following:
• Spotless Laundry Pty Ltd, later called Clean and Deliver Services No. 17 Pty Ltd
(“Spotless Laundry”). This company became deregistered on 3 April 2001.• Spotless Supply Services Pty Ltd (“Spotless Supply”). This company became
deregistered on 13 June 1985.•
Ensign Services (Vic) Pty Ltd, later called Clean and Deliver Services No. 1 Pty Ltd (“Ensign Vic”). This company was a wholly owned subsidiary of Spotless Services. It became deregistered on 26 January 1985.
The Contamination Allegations
It was common ground that, in the course of the dry cleaning operations conducted on the Spotless land between January 1963 and 1977, white spirit was used and stored in a number of underground storage tanks on the Spotless land. Throughout this period, the successive occupiers of the Spotless land were the deregistered companies, Spotless Laundry and Spotless Supply, which are not parties to this proceeding.
In mid-1977 the Spotless dry cleaning operation changed and a new dry cleaning machine manufactured by American Laundry Machine Industries (“the ALMI machine”) was introduced. This machine used PCE and not white spirit. Thereafter, no white spirit was used in the dry cleaning operations conducted on the Spotless land. Premier's case was that the white spirit which is present on the Premier land was the chemical released on the Spotless land in the course of the dry cleaning operations conducted on the Spotless land between 1963 and mid-1977, or from the laundry operations conducted on the Spotless land between 1963 and early 1989. This is not to say, however, that in a later period, white spirit, if released into the ground of the Spotless land prior to mid-1977, did not make its way onto the Premier land.
The ALMI machine was used on the Spotless land for a relatively short period. In about September 1978 it was dismantled and reassembled on the Premier land which by that time was occupied by Spotless Services as a tenant of the then owner. The ALMI machine, and PCE used in connection with it, were then used by Spotless Supply on the Premier land until mid to late 1979 when the machine was taken away and dry cleaning operations ceased. After this time no dry cleaning operations were conducted on either the Spotless land or the Premier land. It follows from this that any release of PCE on the Spotless land from the dry cleaning operations must have occurred between mid-1977 and September 1978 at which time Spotless Laundry and later Spotless Supply were in possession of the Spotless land. Again, this says nothing about the possibility that any PCE so released did not later find its way to the Premier land. It also follows from this that it is possible that there was a release of PCE directly onto the Premier land during the period that this chemical and the ALMI machine were used on that land in 1978-9.
Both Spotless Laundry and Spotless Supply are, as I have mentioned, deregistered and neither is a party to this proceeding. These were the companies in occupation of the Spotless land between 1963 and 1982 when the activities said to be responsible for the release of the chemicals on this land took place. Premier seeks to overcome this difficulty by contending that Spotless Laundry[4] and Spotless Supply[5] carried on their dry cleaning activities as agents for Spotless or Spotless Services which are therefore vicariously liable for their wrongful acts. Alternatively, it is put that they, in turn, conducted these activities as part of a common enterprise with Spotless or Spotless
Services.[6]
[4] Statement of claim para 7B.
[5] Statement of claim para 7E.
[6] Statement of claim paras 7C and 7F.
North Suburban, of course, faced the same difficulties. It sought to address them in much the same way and also, as will be seen, by alleging that Spotless or Spotless Services themselves caused or permitted the pollution to occur.
Premier also alleges, and the Spotless Parties admit,[7] that between 1982 and 1987 or thereabouts, Ensign Aust conducted a laundry business on the Spotless land. During this period the ALMI machine was not in operation on the Spotless land. Premier contends, however, that in this period the laundry operations conducted on that land involved the use of a product called Solex. This product, it is said, contains both PCE and white spirit. Accordingly, it is contended that the contaminants which are present on the Premier land were released on the Spotless land as part of the laundry operations conducted with Solex during this period. Again, it may be that any contaminants released on the Spotless land during this period made their way on to the Premier land during the period of its use, between 1982 and 1987, or thereafter.
[7] Statement of claim para 7H; Spotless Parties defence filed 29 July 2005 para 7H.
The Claims
The claims of Premier brought against Spotless, Ensign Aust and Spotless Services depend upon the releasing onto the Spotless land of white spirit and PCE which found its way onto the Premier land. Premier’s causes of action against those defendants are put in negligence and nuisance and for statutory compensation under the Environment Protection Act 1970 s. 62A and the Water Act 1989 s. 15.
On 5 January 1995, North Suburban became registered as proprietor of the Spotless land and has occupied it since that date or thereabouts. It has not carried on any activity on that land which might involve the release of white spirit or PCE. Nevertheless, Premier brings claims against it in nuisance and negligence for its failure to stop the migration of the chemicals from the Spotless land to the Premier land and it makes statutory claims against North Suburban under the Environment Protection Act s. 62A and the Water Act s. 15.
I should mention at this point that the powers to award damages under the Water Act, and, it was suggested, those under the Environment Protection Act, are vested exclusively in the Victorian Civil and Administrative Tribunal (“VCAT”). Premier has, therefore, brought an application, No W9/2004 (“the Premier VCAT proceeding”), against the Spotless Parties and North Suburban seeking relief under these statutes. I was appointed a member of VCAT pursuant to the Victorian Civil and Administrative Tribunal Act 1998 s. 29 on 30 September 2004 and in that capacity, I have concurrently heard and will determine those of the Premier claims which must be brought before the Tribunal.
North Suburban, too, seeks statutory compensation from the Spotless Parties pursuant to the Environment Protection Act s. 62A and the Water Act s. 15. It has, therefore, brought an application, No W61/2005 (“the North Suburban VCAT proceeding”), against the Spotless Parties seeking relief under these statutes. Its claims likewise have been heard and will be determined by me as a member of VCAT appointed on 6 February 2006.
Premier also sues a firm of environmental consultants, the seventhnamed defendant, ACN 006 911 324 Pty Ltd, formerly called Kilpatrick & Associates Pty Limited (“Kilpatrick”), which provided a report on the soil on the Premier land in January 2000. This report failed to detect the presence of the white spirit and PCE which is now known to be present. This report was commissioned by Babka, the vendor of the land to Premier, perhaps as part of its responsibilities under the contract of sale. I shall return to this in a little detail. At this stage, I simply record that Premier's claim is that this report, which was prepared negligently, was a factor contributing to its loss and damage. The errors in this report are also relied upon by Premier as the basis for a claim for misleading and deceptive conduct in contravention of the Trade Practices Act 1974 s. 52 and the Fair Trading Act 1999 s. 9.[8]
[8] Statement of claim paras 129ff.
For the purposes of the development, Premier also retained as planning consultants the fourthnamed defendant, Collie Planning & Development Pty Ltd ("Collie Planning"). At the end of June 2000, Bruce Robert Keen, who was responsible for this project, left Collie Planning and established his own planning consultancy using a company, the fifthnamed defendant, Keen Planning Services Pty Ltd ("Keen Planning"). Premier sued these defendants contending that they failed to provide proper advice as to its town planning obligations and as to the meaning and effect of the town planning permits which Mr Keen obtained for Premier in late 2000 and 2001. Premier's claim against Keen Planning has been settled. Nevertheless, Keen Planning remains a party for apportionment purposes. Premier’s claims against Collie Planning continue.
The next defendant against whom Premier made a claim is Moreland Council. Moreland Council was the responsible authority which rezoned the Premier land so as to permit residential use, and granted planning permits for this use. The claims involving this party, too, have been settled and it is no longer a party.
The final defendant against which Premier made a claim was the eighthnamed defendant, McMullin Nominees Pty Ltd (“McMullin Nominees”). McMullin Nominees, as trustee of the McMullin Family Trusts, was until 6 January 1994 the owner of the Spotless land. As its name suggests, it is a company associated with members of the McMullin family which established the Spotless organisation some 60 years ago. As will be seen, members of that family continue to have interests in the Spotless Group and, at least in the period with which this litigation is concerned, held directorships in Spotless and in other companies within the Group. Premier’s claims against McMullin Nominees, which were predicated upon its alleged responsibility for the acts of the companies within the Spotless Group, have been settled. So too have contribution claims between McMullin Nominees and the other defendants. McMullin Nominees is no longer a party.
The tenthnamed defendant, McKenzie Group Consulting (Vic) Pty Ltd ("McKenzie Group") is a firm of building surveyors whose employees or agents issued three staged building permits for the construction of the apartments on the Premier land. Premier makes no claim against McKenzie Group. This party was joined by Keen Planning as a defendant to enable Keen Planning to seek apportionment, or alternatively contribution against it pursuant to the Wrongs Act 1958. The contribution claims involving McKenzie Group, too, have been settled but it, too, remains a party for apportionment purposes.
The remaining party to the litigation was Burkett Properties Pty Ltd ("Burkett"), which was joined as third party by McMullin Nominees. The claim of McMullin Nominees against this party arose from the terms of the contract of sale of the Spotless land between them. McMullin Nominees said that, upon its proper construction, the contract of sale obliged Burkett to indemnify McMullin Nominees against any liability to Premier. Burkett, as vendor of the Spotless land to North Suburban under a contract of sale which contains a similar clause, sought a like indemnity against North Suburban against its own liability to McMullin Nominees. The claims involving Burkett, too, have been resolved and it is no longer involved in the litigation.
The Settlements
In the course of the trial the parties agreed to undertake a mediation in order to resolve their disputes. Master Efthim made himself available to act as mediator and the parties negotiated over a week.
In the days that followed a number of settled claims were announced and orders made. I record these because the settlements go some way to explaining the claims that remain:
• the claims between Premier and Keen Planning and Keen Planning’s
contribution claims and its claims for apportionment;• the claims between Premier and Moreland Council and Moreland
Council’s contribution claims;•
the claims between Premier and McMullin Nominees and McMullin Nominees’ contribution claims and McMullin Nominees’ consequent claims against Burkett;
• the contribution claims between Collie Planning and Kilpatrick (but not
the apportionment claims);•
the contribution claims by the Spotless Parties against McMullin Nominees, Moreland Council, Keen Planning, Burkett and McKenzie Group;
•
the contribution claims between North Suburban and Collie Planning, Keen Planning, Moreland Council, McMullin Nominees and McKenzie Group and their contribution claims against North Suburban;
•
the contribution claims by Collie Planning against Keen Planning, Moreland Council, McMullin Nominees and McKenzie Group and their contributions against Collie Planning, if any;
•
the contribution claims by Keen Planning against Moreland Council, Kilpatrick (only insofar as it is made pursuant to s. 23B of the Wrongs Act) and McMullin Nominees and their contribution claims against Keen Planning;
•
the contribution claims by Moreland Council against Kilpatrick, McMullin Nominees and McKenzie Group and their contribution claims against Moreland Council;
•
Kilpatrick’s contribution claims against McMullin Nominees and McKenzie Group insofar as they are made pursuant to s. 23B of the Wrongs Act; and
• McMullin Nominee’s contribution claim against McKenzie Group.
The terms of the settlements between Premier and Keen Planning and Moreland Council and McMullin Nominees were put in evidence. In each case they contain a confidentiality clause. In deference to this wish of the parties, I will not set out any detail of the settlement except insofar as it is necessary for my purposes.
Each of the terms of settlement for the Keen Planning settlement and Moreland Council settlement provides for payment by that defendant to Premier of a specified sum in full settlement of Premier’s claims against that party including interest but not including costs. Each party agrees to bear its own costs.
The terms of the McMullin Nominees settlement dated 1 November 2006 provide for McMullin Nominees to pay a sum of money to Colonial First State Investments Ltd, a secured creditor of Premier which has appointed receivers and managers of the rights of Premier in this litigation. The provisions of this settlement are not otherwise relevant for my present purposes.
The end result of this is that Premier still sues the Spotless Parties, North Suburban, Kilpatrick and Collie Planning, but no other party. Each of these defendants seeks contribution from each other, but only Collie Planning and Kilpatrick seek to diminish their responsibility by orders for apportionment. North Suburban seeks orders for statutory compensation or damages and declarations against the Spotless Parties.
The Open Offers
It is convenient to mention at this stage four open offers which were announced at the trial. The first and second were offers made by counsel for Premier. On 13 November 2006 they offered to agree to the dismissal of Premier’s claim against Collie Planning on the basis that there would be no order for costs. On the same day, they made a similar offer to agree to the dismissal of Premier’s claim against North Suburban, again on the basis that there be no order as to costs and, further, that no further action would in the future be brought by either party against the other concerning the subject matter of the dismissed claim. The third offer was made on 16 November 2006 by counsel for the Spotless Parties that they would submit to an order that the notices of contribution by the Spotless Parties against Collie Planning be dismissed with no order as to costs. The fourth offer, made 21 November 2006 by counsel for the Spotless Parties, was in similar terms but addressed to Keen Planning. It seems that none of these offers, other than the fourth, provoked an acceptance, for the trial proceeded without any orders being made as to those three claims.
I mention these open offers because they were raised in final addresses. I agree that there may be many reasons other than a lack of confidence in its own case which might lead a party to make such an offer. I will place no reliance upon them in determining issues at this trial, other than costs.
The Apportionment Claims
Before I turn to consider the various claims in these proceedings, I should make brief mention of particular complications which arise in the claims for contribution and apportionment as they affect this trial. The first arises from the limited application of each of the apportionment and contribution regimes.
I am concerned with the interaction of four separate and different regimes.
(a)
Wrongs Act Part IV contribution. Under Part IV of the Wrongs Act contribution is available between defendants whose wrongful acts caused the plaintiff’s loss. Contribution, however, is not available for an apportionable claim under
Part IVAA.[9]
(b) Wrongs Act Part IVAA apportionment. On 1 January 2004 there came into force a new Part IVAA of the Wrongs Act which established an apportionment regime for adjusting liabilities between parties to litigation to which the regime applied. The regime applies, broadly speaking, to claims for compensation arising out of a breach of a duty of reasonable care and those arising out of misleading and deceptive conduct in contravention of the Fair Trading Act s. 9. Premier’s claims are put in nuisance, negligence, misleading and deceptive conduct contrary to the Trade Practices Act[10] and under the Environment Protection Act and the Water Act. Of these, only the negligence claim falls within the group of claims covered by the Part IVAA apportionment regime.
Premier brings its claims in negligence against the Spotless Parties, Kilpatrick and Collie Planning. The transitional provisions of the Part IVAA apportionment legislation provide that the regime applies only to claims brought after the commencement date.[11] This proceeding was commenced on 16 October 2003, before the commencement date, but against Spotless and North Suburban and Ensign Aust only. All of the other parties were joined after 1 January 2004 so that the claims against them were commenced after the commencement date.[12] This means that apportionment is available with respect to Premier’s negligence claims against all defendants other than Spotless, North Suburban and Ensign Aust.
Since contribution is not available where apportionment is available[13] the defendants other than Spotless, North Suburban and Ensign Aust may not seek contribution against those defendants.
(c) Building Act apportionment. Under the repealed[14] provisions in Part 9 Div. 2 of the Building Act 1993, defendants to a building action commenced before 1 January 2004[15] are entitled to an order apportioning their liability with other defendants[16] and may not seek contribution against those defendants.[17] A building action is not defined by reference to the cause of action pleaded, but by reference to the subject matter of the proceeding, namely, “An action for damages
for loss and damage arising out of or concerning defective building work”.[18]
Claims for Building Act apportionment were made by Collie Planning, Kilpatrick and by Keen Planning in its defence to the Kilpatrick statement of claim. In final address I was informed by counsel for Kilpatrick and Collie Planning that these apportionment claims were not pursued. No such concession was made by Keen Planning which then did not present a final address. Nevertheless, since Keen Planning became a party after 1 January 2004, the Building Act apportionment regime can have no application to claims against it, even if they amounted to a building action. Accordingly, I shall say nothing further about this apportionment.
(d) Apportionment pursuant to the Trade Practices Act. The Trade Practices Act Part VIA also establishes an apportionment regime for claims for damages for misleading and deceptive conduct in contravention of s. 52. The commencement date of this legislation is 26 July 2004 and Part VIA applies only to causes of action arising after that date.[19] The claim by Premier against Kilpatrick based on a contravention of s. 52 arose, on any view, prior to the commencement date so that no question of apportionment under this regime arises.
The position, then, in summary is as follows:
[9] Wrongs Act s. 24AJ. See, too, Trade Practices Act s. 87CF.
[10] Premier’s claims arising out of such conduct in contravention of s. 9 of the Fair Trading Act were abandoned on day 60 of the trial.
[11] Wrongs Act s. 24AS.
[12] Rule 9.11(3)(a). A proceeding against an added party commences on the date of the amendment of the originating process.
[13] Wrongs Act s. 24AJ.
[14] Wrongs and Limitation of Actions Acts (Insurance Reform) Act 2003 s. 17.
[15] Building Act s. 267.
[16] Building Act s. 131.
[17] Building Act s. 132.
[18] Building Act s. 129.
[19] Corporations Act 2001 s. 1466.
Premier’s negligence claims:
• Apportionment under Part IVAA is available as between all defendants
other than Spotless, North Suburban and Ensign Aust.• Part IV contribution is available to Spotless, North Suburban and Ensign
Aust.Premier’s nuisance claims:
• Apportionment is not available. Defendants may seek contribution
pursuant to Part IV of the Wrongs Act.Premier’s misleading and deceptive conduct claims against Kilpatrick:
• Apportionment is not available. Premier’s statutory claims against the Spotless Parties:
• Neither contribution nor apportionment is available. North Suburban’s statutory claims against the Spotless Parties:
• Neither contribution nor apportionment is available.
The second matter of difficulty arose from the fact that Premier settled with four defendants, including Keen Planning,[20] and that two of the continuing defendants, Kilpatrick and Collie Planning, pursued their allegations that the loss of Premier was, to some extent, the responsibility of Keen Planning. An apportionment claim may be made only against a party to the proceeding. It was accepted that, notwithstanding that I had ordered that the claims of Premier against Keen Planning be dismissed, that Keen Planning remained a party in the proceeding for this purpose and was, therefore, a defendant for apportionment purposes. It is not necessary that I express any view as to the correctness of this and I do not do so.
[20] See paras [26]ff above.
And so, the claims for apportionment become somewhat complicated. In each case, apportionment requires a finding that the defendant in question was liable to Premier.
• Kilpatrick alleges apportionment against Keen Planning with whom Premier has settled and against McKenzie Group against whom Premier has never made a claim. It makes no allegation of apportionment against the other continuing defendants, the Spotless Parties, North Suburban or Collie Planning. • Collie Planning alleges apportionment against Keen Planning and McKenzie Group. It also seeks apportionment against Kilpatrick. It does not allege apportionment against the other continuing defendants, the Spotless Parties and North Suburban. • Keen Planning in its defence makes a general claim to apportionment
against all defendants.
I then directed that each of Kilpatrick and Collie Planning, as parties asserting the liability of Keen Planning to Premier, give notice of its claim to Keen Planning pursuant to R. 11.15 and that they deliver a statement of claim setting out this claim. This was duly done. The Kilpatrick statement of claim against Keen Planning, dated 29 November 2006, and that of Collie Planning, dated 6 December 2006 followed the terms of the otiose Premier statement of claim against Keen Planning.
This left Premier’s former claims without a contradictor other than Premier itself. For it is, of course, now in Premier’s interest to avoid or minimise the dilution of the responsibility of Kilpatrick and Collie Planning by apportionment because the share which may be attributed to Keen Planning could not produce a money judgment against Keen Planning: Premier no longer seeks this. No financial benefit therefore other than that which it has already received is available to Premier against this party.
It seemed to me, however, that, notwithstanding that it was not at risk of an order for damages, Keen Planning was likely to be the object of allegations of a failure to take reasonable care in the performance of its professional functions and was therefore at risk that a finding against it to this effect might be made. Moreover, as a party to the proceeding, it might find itself bound by such a finding. Such a finding might have adverse commercial or even legal consequences, so that Keen Planning had an interest in resisting the allegations made against it. Accordingly, I directed that, if so advised, Keen Planning might file a defence to the allegations against it.
As a party, Keen Planning might wish to participate in the trial by leading evidence, by cross-examining witnesses, by making submissions and by presenting a final address. I directed, however, that it be not at liberty to participate in the trial unless it, like any defendant, filed a defence to the statements of claim of Kilpatrick and Collie Planning. In this way its position might be known and rulings as to evidence might be made.
Keen Planning duly filed a defence to the Collie Planning pleading only, but took no further part in the trial.
The Trial
The trial was a long and complicated one – one that involved a very large number of issues and documents. The pleadings themselves occupied some 1,700 pages in the Court Book. The Court Book otherwise ran to about 95 volumes and about 22,000 pages, many of which were tendered in evidence. At this point I wish to record four general observations about the trial and about my general approach to certain matters which emerged.
First, a point of some difficulty which arose at an early stage, was the evidentiary value of much of this material. For example, environmental experts gave evidence of the results of enquiries made by non-parties, including enquiries made by members of their own staff, evidence of the content of Melbourne & Metropolitan Board of Works (“M&MBW”) files, evidence of information provided by owners or occupiers of nearby allotments as to the usage of their land and evidence of historical records. This was all admitted without objection, notwithstanding its hearsay character. I have proceeded on the basis that, unless the point was taken, I should be at liberty to act upon this type of material as evidence of the facts asserted.
Another feature of the trial was the tender of masses of documents without objection either as annexures to witness statements or simply from the bar table. From time to time I raised my concern that my attention had not been drawn to the significance of this material. I told the parties that this course carried a double risk – that I might overlook the significance of a particular entry in one of these documents and, further, that I might see an entry as having a significance which no party asserted. I was assured that, in final addresses including the written outlines, the important documents would be identified and that no party would therefore complain if I failed to see the significance of a document where this did not appear from the circumstances of its tender or from final address. Counsel said that if I should stumble upon what seemed to me a rich vein in a document in evidence, which had not been so identified, I should, before acting upon it, raise this with the parties by some post-trial memorandum. This then, was to be the regime under which I am to prepare this judgment.
Let me say immediately that this is a very unsatisfactory state of affairs. It has the consequence of bringing into existence two classes of evidence – that which is comprised by the tendered documents to which I might have regard and that comprised in the tendered documents to which I might not. This unsatisfactory state of affairs is the product of the practice adopted by most of the parties of tendering, without objection from other parties, large bundles of documents without further explanation and by the tendering through witness statements of large bundles of documents whose significance is not there explained. I add, too, that the practice imposes a great burden on the Court in its task of absorbing the evidence as it is progressively presented. It imposes this further burden: if, in the course of revisiting these documents after the trial, I discover what appears to be a matter of some significance, I am obliged to trawl through the thousands of pages of transcript to discover if this matter has been adverted to. If I am uncertain I must reconvene the trial or ignore the matter entirely.
These difficulties have a particular importance in this case where some parties, particularly the Spotless Parties, called no evidence on a number of issues, contending that the evidence before me did not warrant the conclusions which counsel for the plaintiffs invited me to draw.
I, therefore, approach documents which are the subject of bulk tender on the basis that I will look at those whose significance is identified in the course of the trial including final addresses, written and oral. I see myself also as at liberty to look at documents whose significance is not so identified and I will attach to them such significance as seems to me appropriate. Where this discloses a matter to which no other reference has been made, I will not act upon the material in this way without drawing it to the attention of the parties and inviting submissions.
The second feature of the trial of which I make mention at this stage concerns the pleadings. The parties in this case, particularly Premier, laboured under the difficulty that they had no knowledge of the events which took place on the Spotless land in the decades of its operation of the laundry and dry cleaning businesses. To make out its case it depended upon material which emerged upon discovery and the results of its own investigations with persons who had been employed by the Spotless Group in those years. A consequence of this is that the Premier pleadings cast their net widely. This lead to interlocutory battles over particulars and also to amendments to the pleadings as the case advanced. Indeed, Premier’s last amendments were made as late as 27 February 2007 when the evidence was, for the most part, completed.
Other parties, too, amended their pleadings in the course of the trial. To some extent this may have been in response to my statement made at a fairly early stage of the trial that I would decide the case on the pleadings and will not seek to make out some new or different case at the behest of any party from the evidence which came forward. In the circumstances, I shall assume that a failure of a party to seek to cure some infirmity in its pleading to which attention was drawn at trial was the result of a deliberate forensic decision. I shall approach this case on this basis unless it is apparent that the parties themselves proceed on the basis that some unpleaded point is in issue.
The third general observation about the trial is that a number of witnesses who might have had knowledge of contentious issues were not called. I will mention these as I deal with the issues themselves in this judgment. Most significant, however, was the failure of the Spotless Parties to call any witness as to the activities carried out on the Spotless land and of Kilpatrick to call any witness who was responsible for its impugned environmental report of January 2000. I will readily draw permissible inferences from the unexplained absence of such witnesses.
The final general observation is that, with the cooperation of the parties, the evidence from all parties upon particular topics was led together. In this way the environmental scientists gave their evidence in succession and then the remediation expert witnesses, the valuers and, finally, the forensic accountants. This had the great advantage, from the point of view of the Court, that it was possible to consider the technical issues raised by these witnesses while the competing opinions of other witnesses from the same discipline were fresh in mind. I should add, too, that a great deal of time was saved by these witnesses meeting before giving their evidence and producing a list of points of agreement and points of disagreement. The difficulties which these procedures might otherwise have caused of, for example, a defendant calling evidence before the evidence of the plaintiff or another party up the list of defendants was closed, did not arise due to the cooperative and practical approach which all the lawyers in this case were prepared to adopt. I gratefully acknowledge the spirit which generally prevailed throughout the trial.
Questions Deferred
In the course of the trial certain questions were agreed to be deferred for determination by a Master or, perhaps a special referee, after judgment. These questions related to the
quantification of the s. 62A claims. I will deal with these matters below.[21]
[21] See Part 16 below.
2. The Issues / Pleadings Non-Controversial Matters
Central to these proceedings are four non-controversial facts. First, in the course of the Spotless dry cleaning and laundry activities conducted in Barkly Street, the chemicals in question were used. In the dry cleaning processes white spirit was used between 1963 and mid-1977 on the Spotless land and PCE was used from mid-1977 until mid or late 1979 on one or other of the Spotless land or the Premier land. As I have mentioned, in the last 12 months or so of this period of PCE use, the dry cleaning activity was conducted on the Premier land, not on the Spotless land. In the laundry processes, which were conducted between 1963 and 1987 on the Spotless land only, white spirit was used in the laundry process for spotting garments, but in quantities so small that this may be put to one side. Associated with this is a further allegation, which is in controversy, that a product called Solex was used in the laundry process on the Spotless land from about 1982. This product, too, is said to have contained PCE and white spirit. So the first fact, largely non-controversial, is that both white spirit and PCE were used by the Spotless Group on the Spotless land and that PCE was used by the Spotless Group on the Premier land. The evidence, however, of the manner and extent of this use is meagre. The Spotless Parties called no evidence as to this.
The second non-controversial fact is that today and, indeed, in 2003, there is and was present in both the Spotless land and the Premier land quantities of PCE and white spirit. The extent and quantities of these chemicals and the degree of risk which they raise are matters of dispute, as is the time at which or the period over which the chemicals came upon the Premier land, and their source. What is not in dispute is that the EPA is satisfied that pollution of land and groundwater has occurred or has been permitted to occur upon or from the Premier land and the Spotless land and it has issued clean up notices to the occupier of each of the lots pursuant to the Environment Protection Act s. 62A.[22] The consequence of this is that some clean up must be carried out, and the two owners, Premier and North Suburban, each seek to recover the cost of this together with other consequential costs and losses, the quantum of which is in dispute.
[22] Premier Land – Notices dated 18 November 2003, 27 February 2004 and 10 March 2006. Spotless Land – Notices dated 18 February 2004, 28 September 2004 and 10 March 2006.
The third uncontroversial fact is that none of the parties, except possibly the Spotless Parties, was, until 2003 aware of the presence on the Premier land or the Spotless land of PCE and white spirit. This fact provides an explanation for conduct which is otherwise difficult to understand.
The fourth non-controversial fact is that the laundry and dry cleaning business which was carried on over the period from 1963 to 1989 on the Spotless land and the laundry business conducted for a lesser period on the Premier land, was carried out by a variety of corporations within the Spotless Group. As will be seen, this raises difficult legal questions as to the responsibility of the Spotless Parties.
Basic Chronology
It is therefore convenient at this point that I outline the chronology as to the use of the Spotless land and the Premier land by companies within the Spotless Group. This can be approached in five periods of time. This chronology is, for the most part, derived from the pleadings, insofar as the matters were not put in issue.
1963 – Mid-1977
In the early 1960s the present building was erected on the Spotless land and commenced to be used for the administration of the Spotless Group, for its dry cleaning and laundry activities and as a retail outlet.
For the whole of the period 1963 - mid-1977 the dry cleaning and laundry operations on the Spotless land, which included the use of white spirit, were conducted by Spotless Laundry, a company which is deregistered and is not a party to this proceeding. At the end of this period white spirit ceased to be used in the dry cleaning operation. Spotless Laundry was, for a very short time from January to June 1963, in possession of the Spotless land as a tenant under a lease granted by McMullin Nominees.[23] On 29 January 1963, Spotless Laundry assigned the term to Trawalla Trading Company Pty Ltd and became a sub-tenant of Trawalla in possession of the land until 1978.[24] Trawalla is not a party to this proceeding. Spotless Laundry was at this time a wholly owned subsidiary of Spotless. Premier was not then incorporated.
Mid-1977 – September 1978
[23] Defence para 2.2(a)(i).
[24] Defence para 7B.1. Documents in evidence show Spotless Laundry as tenant of McMullin Nominees continuously until 30 September 1982 but nothing turns on this.
This is the period in which the ALMI machine, using PCE, was used for dry cleaning operations on the Spotless land. In the pleadings it is said that, for most of this period, Spotless Laundry remained in possession of and was the operator of the business conducted on the Spotless land. The evidence, however, showed that, on or about 30 June 1976, Spotless Laundry ceased to conduct the business[25] which was thereafter conducted by Spotless Supply. Spotless Supply, from 1 July 1978, took possession of the Spotless land as assignee from Spotless Laundry of its sub-lease. Spotless Supply, which is also deregistered, is not a party to this proceeding.
September 1978 – late 1979
[25] Defence para 7B.1(a).
During this period the ALMI machine using PCE was operated, not on the Spotless land, but on the Premier land until mid-1979 when it was dismantled and removed to Sydney. The tenant in possession of the Premier land at that time was probably Spotless Services. The Spotless Parties contend that the operator of the dry cleaning business and the ALMI machine on the Premier land at this time was Spotless Supply.
1979 – 1989
During this period the activities of the Spotless Group on either piece of land are relatively obscure. What is clear is that the ALMI machine was not used there after it was dismantled, so no question of the release of PCE from this source arises.
The Spotless Parties in their defence admit that Spotless Supply was in exclusive possession of the Spotless land[26] and conducted the commercial laundry activities on the
Spotless land between on or about 30 June 1978 and on or about 30 June 1982.[27]
Thereafter, they say, Ensign Aust was in exclusive possession of that land as a direct tenant of McMullin Nominees until, in or about early 1989,[28] when it was sub-let to a third party. Ensign Aust itself commenced trading only on 1 March 1982. Between 1979 and 1989 it is said that Solex was used in the Spotless laundry operations which were conducted on the Spotless land. There are, however, entries in the Spotless General Ledger which show substantial purchases of white spirit as late as October 1981. These may, however, have been purchased for use on other sites. No party made anything of this.
[26] Defence para 2.2(b). This may not be correct. In a letter dated 25 September 1989 McMullin Nominees speaks of Spotless Laundry as being its lessee.
[27] Defence para 7D.
[28] Defence para 2.2(c).
So far as the Premier land is concerned, there is evidence that on 26 April 1982 the lease of that land was assigned by Spotless Services to Ensign Aust and that this lease was to expire in August 1988. Furthermore, an analysis of the Spotless general ledger shows that the Premier land was used by Ensign Aust as late as May 1984. There is, however, no evidence as to the use, if any, of the Premier land by the Spotless Group after 1988.
I mention also at this point that from 1982 the Spotless administration was no longer conducted from the offices on the Spotless land. From February 1989 or thereabouts the Spotless land was sub-let to a third party with no connection to the events the subject of these proceedings.
After 1989
After 1989, there was conducted on the Spotless land or the Premier land no activity involving a Spotless company which may have released either white spirit or PCE onto that land.
On 26 October 1994 Premier was incorporated under the name Middle Brighton Motors Pty Ltd and on 2 July 1997 it changed its name to Premier Building Consultants and Development Pty Ltd. On 16 March 2000 its name was again changed to its present name. It purchased the Premier land from Babka on 10 November 1999. Meantime, in September 1993 McMullin Nominees had sold the freehold of the Spotless land to Burkett and, in turn, Burkett sold to North Suburban in February 1994.
Premier’s Claims against the Spotless Parties
Against this background, I turn to the issues raised in the pleadings between Premier and the Spotless Parties. As I have mentioned, its causes of action are put in nuisance, negligence and under the two statutes.
Nuisance
In its statement of claim[29] Premier describes the nuisance, inasmuch as it concerns the presence of white spirit, as arising from the contamination of the bedrock on the Premier land with that chemical.[30] The contamination with PCE, on the other hand, is said to arise from its presence in the bedrock and in the unconsolidated sediment which lies above the bedrock.[31] What is alleged is that, in about 1975 and thereafter, white spirit escaped from underground storage tanks or waste pits, or both, on the Spotless land and migrated through the sub-soil to the Premier land, thereby creating, what in the pleading was called, “the white spirit nuisance”.[32] What is there referred to as “the PCE nuisance” is said to have been caused by the use of PCE on the Spotless land in laundry and dry cleaning activities between 1977 and 1978[33] and between 1982 and 1987,[34] in the course of which this chemical was, presumably,[35] permitted to enter the sub-soil and to migrate to the Premier land. Next, it is said that each of the Spotless Parties knew or ought to have known of the existence of the white spirit nuisance and the PCE nuisance and failed to bring the nuisances to an end.[36] These scenarios were in issue and this represented a major factual contest at trial. The cause of action in each case is said to arise from the acts or omissions of the relevant Spotless Party in creating[37] or continuing[38] the nuisance.
[29] Fourth further amended statement of claim filed 29 January 2007.
[30] Statement of claim para 9A.
[31] Statement of claim para 9B.
[32] Statement of claim para 10A.
[33] Statement of claim para 8B.
[34] Statement of claim para 8E.
[35] No allegation in terms is made in the statement of claim.
[36] Spotless paras 10B-10D (white spirit nuisance); Ensign Services paras 11B-11D (PCE nuisance), paras 11F- 11G (white spirit nuisance); Spotless Services paras 10J, 10L, 10M (white spirit nuisance), paras 10K, 10L, 10N (PCE nuisance).
[37] Statement of claim paras 10A, 10E, 10I, 11A, 11E. It is not alleged that Spotless Services created the PCE nuisance.
[38] Statement of claim paras 10D, 10H, 10M, 10N, 11D, 11H.
A further assertion, which appears to be implicit in this Premier claim, is that PCE was released on the Spotless land during the course of the dry cleaning operations carried on there in 1977-8. This is the factual basis underlying the Premier allegation that the pollution with PCE is due to the breach of duty of care by Spotless Services and Spotless
in the conduct of those operations.[39]
[39] Statement of claim paras 27A, 27B.
It is apparent from the chronology that there is a limited opportunity for Premier to attribute to the Spotless Parties any act which actually released the contaminants into the environment on the Spotless land. It is not suggested that Spotless itself carried on any business of dry cleaning or laundry on the land. This was done by its subsidiaries. Ensign Aust’s involvement was that of conducting the laundry business on the Spotless land from 1979 to 1989. These activities could have caused the release of the contaminants only by its use of Solex. It may be, too, that during this period, white spirit stored in the underground tanks was permitted to escape.
It is not alleged in the statement of claim that Spotless Services itself released any contaminants into the Spotless land. Indeed, this must be so, because it did not conduct any laundry or dry cleaning activities at any relevant time on the Spotless land. Any responsibility for this must be through its subsidiary.
The case of Premier against Spotless is that it is responsible for the acts and omissions of the deregistered companies, Spotless Laundry between 1963 and 1978 and Spotless Supply between 1978-9, because those companies carried on their commercial activities as its agents[40] or because they were engaged with it in a common enterprise.[41] It is alleged, too, that, for similar reasons, Spotless is responsible for the acts and omissions of Ensign Aust between 1982 and 1987.[42] The case against Spotless Services in this respect is very much more limited. It is said to be vicariously responsible only for the acts and
omissions of Spotless Supply between 1978-1982 for the same reasons.[43]
[40] Statement of claim para 7B (Spotless Laundry); para 7E (Spotless Supply).
[41] Statement of claim para 7C (Spotless Laundry); para 7F (Spotless Supply).
[42] Statement of claim para 7I (Agent); para 7J, (joint enterprise).
[43] Statement of claim para 7E (Agent; para 7E (joint enterprise).
The pleaded position with respect to the discharge of pollutants by the operation conducted on the Premier land itself is a little different. It is said that between 1978 and 1979 Spotless or Spotless Services or both conducted dry cleaning operations on the land and that PCE was used in these operations.[44] This leads to allegations that these companies conducted the operations negligently.[45] There seems to be implicit in all of this that in the conduct of these operations one or other or both of these operating companies released PCE onto the Premier land. For my present purposes these allegations do not involve any assertion that the responsibility of Spotless was anything other than that of an operator.
[44] Statement of claim para 8C.
[45] Statement of claim para 27B.
I need hardly say that there was a serious factual and legal issue raised as to the existence of this vicarious responsibility alleged against Spotless and Spotless Services.
The chronology also raises difficulties for the Premier claims which are predicated upon continuing the nuisance – the failure of the Spotless Parties to put an end to the existing nuisances.
In the case of Spotless, it is said that its failure to put an end to the white spirit nuisance occurred “from at least 1987”.[46] This is the year in which, it is alleged, Spotless ceased to occupy the Spotless land[47] and the year in which it is alleged that Spotless became aware of the dangers of leaking underground storage tanks.[48] The period of its failure to bring the PCE nuisance to an end commences “from at least 1977”.[49] This is the date when the
ALMI machine commenced operation on the Spotless land.[50]
[46] Statement of claim para 10B.
[47] Statement of claim para 2(b).
[48] Statement of claim para 20.
[49] Statement of claim para 10F.
[50] Statement of claim para 10E(b).
With respect to Spotless Services, it will be recalled that it did not conduct any dry cleaning or laundry activities on the Spotless land. It is said that, from at least 1978 or at least 1987 it failed to put an end to the white spirit nuisance[51] and from at least 1978 it failed to put an end to the PCE nuisance.[52] As pleaded, this contention appears to depend upon the fact that it shared directors with Spotless Laundry and Spotless Supply, the companies within the Spotless Group which actually conducted the laundry and dry cleaning businesses on the Spotless land between 1963 and 1978.
[51] Statement of claim paras 10J, 10L-10M.
[52] Statement of claim para 10K-10L, 10N.
The failure of Ensign Aust and Spotless Supply to put an end to the white spirit nuisance and the PCE nuisance are said to date from “at least in or about 1982 or in or about 1987”. The former date is the date when Ensign Aust commenced to conduct the laundry (but not the dry cleaning business) on the Spotless land.
In their defence,[53] the Spotless Parties contend, further, for various reasons that, if the released contaminants migrated from the Spotless land to the Premier land, this did not amount to actionable nuisance. These contentions depend upon the fact, which is not in dispute, that the Premier land was zoned and used for industrial purposes prior to 2001. In paras 40A, 40B and 42 of its statement of claim, Premier alleges in fairly conventional terms that it suffered loss and damage as a consequence of the nuisance of Spotless, Spotless Services and Ensign Aust. This is denied and it is said that the loss and damage
is too remote.[54]
[53] Defence filed 29 July 2005, para 9A.
[54] Defence para 40A.2.
Negligence
Premier’s alternative claim is put in negligence. The duty of care which is said to be owed by Spotless,[55] by Ensign Aust[56] and Spotless Services[57] to current and future owners of neighbouring properties including Premier is fivefold:
[55] Statement of claim para 24A.
[56] Statement of claim para 26.
[57] Statement of claim para 24C.
(a) To take reasonable care with the conduct of the laundry and/or dry
cleaning operation conducted on the [Spotless land];[58]
(b) To take reasonable care with the underground storage tanks and the storage of White Spirits in the underground storage tanks below the
[Spotless land];[59]
(c) To take reasonable steps to investigate the environmental conditions of the [Spotless land] and/or remove to the extent practicable the chemicals used in the laundry and dry cleaning business including White Spirit and
PCE from the subsurface of the [Spotless land];[60]
(d) To take reasonable steps to investigate and eliminate the risk of the chemicals used in the laundry and dry cleaning process including PCE and White Spirit migrating from the [Spotless land] to the properties adjoining and/or surrounding the [Spotless land];[61] and
(e) To take reasonable steps to ensure that Spotless Laundry (deregistered), Spotless Supply (deregistered), Spotless Services and Ensign [Aust] took
reasonable care with the laundry and/or dry cleaning operations.[62]
[58] Statement of claim para 24A(a). Cf paras 24C(b) and 26(b).
[59] Statement of claim para 24A(b). Cf paras 24C(a) and 26(a).
[60] Statement of claim para 24A(c). Cf paras 24C(e) and 26(c).
[61] Statement of claim para 24A(d). Cf paras 24C(d) and 26(d).
[62] Statement of claim para 24A(e). The equivalent para 24C(c) departs somewhat from this. There is no equivalent in para 26.
It will be recalled that for approximately a 12 month period in 1978-9 the ALMI machine was used on the Premier land. It is alleged by Premier that Spotless and the operator, Spotless Services, owed to current and future owners of the Premier land a duty –
(a) To take reasonable care with the conduct of the dry cleaning operation on [the Premier land]; and
(b) To take reasonable steps to investigate the environmental conditions of [the Premier land] upon cessation of dry cleaning operations thereon and/or vacation of [the Premier land] and/or remove to the extent practicable any contamination of [the Premier land] to unsafe levels and
caused by the dry cleaning operations thereon.[63]
[63] Defence para 43A.
The existence of such duties is put in issue on a factual basis as well as on legal bases. Issue is also joined as to the breaches and consequential loss and damage.
In addition, there are a number of contentions raised by way of defence to these causes of action. At this point I simply list them:
• the claims are statute barred;[64] • Premier voluntarily encountered and accepted the risk so that the Spotless Parties are not liable for the damage of the kind complained of;[65] • the loss and damage of Premier was not caused by the wrongful acts alleged;[66] • Premier’s contributory negligence;[67] • Premier acted illegally in proceeding with the development contrary to the provisions of the zoning and the planning permit.[68] [64] Defence para 43A.
[65] Defence paras 43B, 43C.
[66] Defence paras 43D, 43E.
[67] Defence para 43D(c).
[68] Defence paras 43F, 43G.
Statutory Claims
Section 62A of the Environment Protection Act provides for the giving of clean up notices to the owner of contaminated land. Sub-section 62A(2) then gives to the owner the right to recover from the person who caused or permitted the contamination to occur, the reasonable costs incurred in good faith in complying with the clean up notices. Premier says that Spotless, Ensign Aust and Spotless Services caused or permitted the present contamination of the Premier land and that it should recover from them its costs incurred and to be incurred in cleaning up that land.[69] These claims are also made in its
points of claim[70] in the Premier VCAT proceeding.[71]
[69] Statement of claim paras 139A – 141, 143B – 145.
[70] Further amended points of claim filed 12 May 2005.
[71] Points of claim paras 44 – 47, 52.
These are the claims brought under s. 62A of the Environment Protection Act and s. 15 of the Water Act. Premier says that the measure of its Water Act damages should be the same as its common law damages, for s. 15 uses the terminology of “damage to property” and “economic loss” and “damages”. Moreover, by s. 19(9) it imports the common law concept of causation. The significant requirement, however, is that the event which may bring about a compensable loss is the act of polluting groundwater.
Accepting, as I do for present purposes, that the groundwater is polluted and that this is the consequence of the act of one or other of the Spotless Parties, the loss for which Premier is entitled to recover statutory damages is the same as that flowing from the common law claims based upon its acts of releasing the contaminant into the Spotless land. Broadly speaking, having regard to ordinary rules of causation and remoteness, these would be the consequent diminution in the value of the polluted land. Another way of approaching this might be the cost of investigation and remediation together with ancillary costs such as any losses due to the loss of use of the land which was precluded by these activities. Since the land was purchased for development and resale, these figure ought to be approximately equivalent. These are the items for which Premier is entitled to damages pursuant to s. 15 of the Water Act.
The Premier claim under s. 62A has been made out against Spotless. The parties are agreed that the assessment of the compensation payable under this head should be deferred.
Premier’s Development Losses
Premier’s Claims against North Suburban
Again, the claims are put in nuisance and negligence and under s. 62A of the Environment Protection Act. The claim against North Suburban highlights the difficulty in seeking to attribute to different causes of action the same losses. Against North Suburban the loss offered by Premier must, at best, be that suffered as a consequence of the failure of North Suburban to put an end to the nuisance which was occurring in 1994 or 1995 when North Suburban became the owner of the Spotless land. I have found that the contamination of the Premier land was, in part, due to the release of PCE from the ALMI machine in 1978-1979, the period it was operated on the Premier land. North Suburban cannot be responsible for this. The evidence shows that North Suburban was unaware of the contamination of the Premier land until 2003. Even if that finding should not stand, I have difficulty in accepting that a proper measure of Premier’s loss attributable to the breaches alleged against North Suburban should be approached on the basis that it be relieved of the consequences of its decision to purchase the land and further recover consequential loss. This makes it difficult, if not impossible, to attempt any quantification of Premier’s loss which may be attributed to the acts or omissions of North Suburban.
In their final submissions on this aspect of the case, counsel for Premier put its case rather differently from what had been particularised. In the particulars, no distinction is drawn for this purpose between the position of North Suburban and the Spotless parties. In final address, attention was focussed upon the need for the construction of a substantial barrier to prevent further migration of contaminants of the Spotless land to the Premier land. Now, of course, the decision and the cost as to this lies with the purchaser of the Premier land. And so, counsel for Premier now say that this purchaser must have made allowance for the cost of the construction of this wall in fixing its price. The cost of the wall is estimated at $512,301. That the purchaser included this expense in its calculation is a matter of speculation and I will not act upon it. Then, bravely, counsel for Premier add that North Suburban has taken no step to abate or terminate the nuisances since it became aware of them, at latest when it received its first clean up notice from the EPA on 18 February 2004. Accordingly, it is said, North Suburban should bear a proportion of Premier’s loss. I am not at all confident that I understand why this conclusion follows. It appears to require a finding that the present contamination of the Premier land is, in part, due to the migration of contaminants from the Spotless land since 2004 or perhaps since mid-2003. I make no such finding. Nor could I determine what is a proper proportion of the loss on the evidence before me.
I am unable to take this matter further. Premier has not demonstrated any loss attributable to the common law allegations against North Suburban.
The Premier s. 62A claim raises different questions. I assume, contrary to my conclusion, that North Suburban is a person which caused or permitted pollution of the Premier land to occur. Section 62A(2) then exposes it to the order for compensation for costs incurred by Premier as owner of the polluted land in complying with the EPA clean up notices. Section 62A does not, in terms, deal with the case where there are a number of persons who fall within s. 62A(1)(b), (c) and (d), and who are therefore liable to a compensation order under sub-s. (2). The sub-section gives some discretion to the Court inasmuch as the statute confers power to order compensation. Perhaps this entitles it to apportion responsibility between the persons liable. On the other hand, it may make each of them wholly liable, leaving it to them to sort out their individual shares. No argument was directed to this. It appeared that Premier seeks the total costs against both Spotless and North Suburban. It is neither necessary nor desirable that I take this matter further.
The calculation of Premier’s costs of compliance for the purposes of s. 62A(2) are deferred.
Premier’s Claims against Kilpatrick
The claims against Kilpatrick are for negligent misrepresentation and for misleading and deceptive conduct in making a false representation. In each case, two representations are said to have been made. The first is the Kilpatrick report, which was prepared for and delivered to Babka in January 2000. The second was in a letter dated 14 September 2001 sent to Premier’s builder.
In its particulars, Premier alleges that as a consequence of these false representations it suffered losses totalling about $14.9m, which are the losses concerning the development. In their final address counsel for Premier put their client’s position shortly: it would not have settled the purchase but for Kilpatrick’s misleading conduct. And, later, “it would not have settled the purchase of the land; it would not have incurred the expenses associated with the acquisition and development of the land”. Notwithstanding this, the figures proposed in final address totalling $4,848,306 appear to be restricted to development losses. This must be correct. It is common ground that, when the Kilpatrick report came into the hands of Premier, Babka remained responsible for obtaining a certificate of environmental audit but, under the third version of special condition (4), the time for this had been removed and Babka’s financial responsibility was only for the costs of the consultants required.[388] This version of the special condition was accepted by Premier as being in force at the time the Kilpatrick report was received, notwithstanding that the amendment was not signed off until mid-March. It is by no means certain that, under such a condition, Premier could have withdrawn from the contract of sale if it had learnt from the Kilpatrick report that the land was heavily contaminated.
[388] See para [277] above.
The position is even clearer in September 2001 when the second suggested false statement was made. At that time, the contract of sale had been settled and demolition of the existing warehouse was complete. If the letter had disclosed the presence of severe contamination, the options available to Premier were to press on, to sell the vacant land or to develop it for a purpose which did not require an environmental audit. The first option, that which was in fact adopted, was not legally available because the terms of the planning permit would require an environmental audit before construction commenced.
It would seem that the damages claim for the first suggested false statement presupposed the same three options. Ignorant of their true position, Premier pressed on with the development in March 2000. This course, however, would not have been capable of pursuit had Premier complied with the terms of the planning permit. This non-compliance cannot be laid at the feet of Kilpatrick.
In any event, I accept the criticism of Premier’s quantum methodology advanced by counsel for Kilpatrick. Returning to the position as it stood at the end of February 2000, Premier owned land which is now known to have been heavily contaminated. Let it be supposed that the Kilpatrick report had disclosed this fact. The loss of Premier then must be the extent to which it is worse off by pressing on in ignorance compared with its position had it adopted one of the other options I have mentioned or some other course which is not readily apparent to me. The methodology adopted by Premier of seeking a portion of its loss from the whole project by comparing the profit it expected had the site been uncontaminated with the loss it actually incurred is inappropriate. The fact is that the land was never uncontaminated and this is not attributable to any act or omission of Kilpatrick.
Putting to one side disputes about detail, the expenses incurred by Premier in the Barkly St project and the monies received by it upon the sale in February are known. These produce a negative balance. What is not known is the figure with which this balance is to be compared. Premier never addressed this matter other than by asserting that it would not have completed the contract. If this is seriously advanced as an option the financial implications are not known. For example, if Premier had declined to complete the contract Babka might have sued for damages for loss of the contract seeking the difference between the purchase price of $2.4m and the true negative value of the land. The measure of such a claim might depend upon the version of special condition (4) which was applicable at the time of breach. Other possibilities suggest themselves.
If one then turns to the position as it stood in September 2001, the option of withdrawing from the contract was no longer available. As with the earlier representation, the available options would have to be canvassed. They were not.
It is sufficient, then, that I reject the methodology of Premier. I am unable to assess the quantum of its loss whether this be at common law for negligence or pursuant to the Trade Practices Act.
Premier’s Claims against Collie Planning
Notwithstanding that the case against Collie Planning was fundamentally different, Premier in its claim for damages treats this defendant as it does Kilpatrick.
The important differences are that the case against Collie Planning is put in breach of contract and in negligence for its deficient performance of its planning duties. In each case the acts or omissions occurred prior to 30 June 2000 when the Collie Planning retainer passed to Keen Planning.
Moreover, the losses claimed must be related to the breaches which are alleged. I have already discussed these in some detail and have rejected them.[389] I now assume that some of them have been established. The central thrust is that Collie Planning did not advise Premier that a certificate of environmental audit would be required prior to commencement of the development and of the implications of this requirement.
[389] See paras [601]ff above.
Much of the discussion of Premier’s quantum claim against Kilpatrick is here relevant. An important difference, however, is that, at the time Collie Planning ceased to be involved in the project, the issue of the planning permit with its requirement for a certificate of environmental audit was many months away. It cannot be accepted that, if Collie Planning had given Premier the advice which is referred to in the pleading, Premier would had declined to settle the contract of sale. Mr Evans said in evidence that if he had had this advice he would have set about getting the certificate. I have no doubt that this is what he would have done, but only at a time when it was necessary that it be done. This means that, if Collie Planning had given the suggested advice prior to its departure on 30 June 2000, nothing would have been done for a year or so at the earliest. It would certainly not have been seen by Mr Evans as necessary, at least until the planning permit had been granted; perhaps some time later, as events showed.
No other realistic option has been suggested on behalf of Premier. I find that no loss has been suffered by Premier, assuming that the pleaded breaches of contract and duty of care and reliance upon them had been established.
Premier’s Imputed Claims against Keen Planning
The relevant claims are those for breach of duty of care owed by Collie Planning to Premier. The claim against keen Planning is, of course, not pursued by Premier following its settlement with this defendant; it is pressed by Kilpatrick and Collie Planning with a view to attracting to Keen Planning some responsibility for the loss of Premier for the purposes of the Wrongs Act Part IVAA apportionment regime.
Pursuant to s. 24AE I am required to assess the quantum of Premier’s loss and then to give judgment allocating this quantum among the concurrent wrongdoers in terms of their responsibility for the loss. My present task is to quantify Premier’s loss for which Keen Planning bears some responsibility.
It is necessary to underline that the involvement of Keen Planning in the Barkly Street project post-dated that of Collie Planning. Keen Planning took over the role of planning consultant following the termination of the Collie Planning retainer on 30 June 2000. Keen Planning was the Premier planning consultant at the time of the Kilpatrick letter of September 2001 but not at the time of the Kilpatrick report.
Notwithstanding this, it is said that the losses flowing from the breach of duty of care by Keen Planning are the same as those claimed by Premier to be the consequence of the breaches by Collie Planning and Kilpatrick. In short, had Keen Planning fulfilled its obligations, Premier might have avoided all of the development losses and, perhaps, it would not have settled the contract of sale in April 2001.
Much of what I have written about the quantum methodology adopted by Premier with respect to its claims against Kilpatrick and Collie Planning is applicable here. In essence it is necessary to compare the position in which Premier now finds itself with the position in which it might have been had Keen Planning not committed the breaches alleged against it.
In short, the breaches put against Keen Planning are that it did not advise its client that a certificate of environmental audit was required before construction was commenced and of the implications of this. For present purposes, I assume that these breaches have been made out. Let it be assumed that this advice was given by Keen Planning in mid-2001 when the final terms of the planning permit were known. The existence of the contamination would then have become apparent at a time when no construction had been commenced, perhaps at a time when the warehouse still remained. The options then available would have been to sell the land as it stood or to have undertaken the necessary remediation to enable the development to proceed. Withdrawal from the then completed contract of sale was not an option. It may not be correct, as counsel for Collie Planning submitted in a different context, that the option of selling would produce a profit rather than a loss. This would depend upon the terms of any sale. If the land was sold as contaminated land the evidence of the valuers suggest that it would have been sold at a nil or a negative value.
As with the claims against Kilpatrick, the measure of damage on this basis was never explored and I am unable to make a finding as to quantum.
Premier’s Imputed Claim against McKenzie Group
This claim is not made by Premier; like the claim against Keen Planning it is advanced by Kilpatrick and Collie Planning for apportionment purposes.
The thrust of this allegation is that McKenzie Group was in breach of a duty of care owed to Premier when it issued its first building permit on 17 August 2001 and, perhaps, also when it issued the two later permits on 12 April 2002 and 12 March 2003. The complaint here is that the permit ought not to have issued until McKenzie Group was satisfied that condition 28 of the planning permit had been complied with. This is the condition which required that Premier obtain a certificate of environmental audit before commencing the development. It also alleged that McKenzie Group failed to advise Premier that it would be prudent for it to comply with the terms of condition 28.
The position raises, once again, the point I have made with respect to the methodology of the claims against Kilpatrick, Collie Planning and Keen Planning. If it be assumed that McKenzie Group acted as alleged it ought to have acted, Premier would have undertaken a site investigation at a time when the Premier land had been cleared. This would have disclosed the serious contamination. It would then have had to address the available options of which withdrawal from the contract of sale was not one.
For the reasons already discussed, I am unable to undertake the task of confining Premier’s loss on this basis.
North Suburban’s Claims against Spotless Parties
These are statutory claims brought under s. 15 of the Water Act and s. 62A of the Environment Protection Act.
The quantum of North Suburban’s compensation and of its damages, if they are to be pursued, are to be deferred.
It is convenient that I deal with an associated matter arising out of North Suburban’s s. 62A claim. It is that s. 62A(2) is expressed in terms of “costs incurred” in complying with the clean up notice. This, I interpret as referring to costs which have been incurred in the past. These costs will be determined at a later date. The position, however, of North Suburban is that there is much investigation and remediation not yet undertaken. This means that North Suburban will have to return to Court from time to time and at the conclusion of the remediation to seek further compensation as the expenses are incurred
Faced with this prospect, counsel for North Suburban amended its claim to seek, in addition to compensation for past expenses, declarations of its entitlement to compensation so that future applications could be concerned only with the quantification of costs incurred in terms of s. 62A(2). Although the relief is sought in both the litigation and in the North Suburban VCAT proceeding, I am considering it in my capacity as judge, for it is in the litigation that I have dealt with these claims. It was not disputed before me that, as a matter of law, North Suburban might in the future return to Court to seek an order for costs incurred which are not the subject of the present proceeding, and I proceed on that basis.
The relief is resisted by the Spotless Parties on the basis that the declarations sought are in truth not declarations of right, but, rather, declarations as to findings of fact. Depending upon how the declarations are formulated, this cannot be correct. The entitlement of North Suburban to an order for compensation is a right which I have determined to exist having regard to my findings of fact and my conclusions of law. It is a right which arises from operation of the statute and the giving of the three clean up notices by the EPA. There is, to my mind no difficulty and a good deal of utility in declaring that this right exists so that any further costs of the kind contemplated in s. 62A(2) which may in the future be incurred might be the subject of a future award of compensation. I will therefore make a declaratory order.
17. Apportionment and Contribution
Typically, contribution is considered after liability is established. Since all claims for damages have failed in this proceeding no question of contribution arises. Nevertheless, I would undertake this task, if it were possible, for the assistance of the parties in the event that all, or some of my conclusions rejecting the claims may be overturned. Unfortunately, there are very great difficulties in undertaking this task. I simply list them.
• It is necessary to determine what is the common damage suffered by the plaintiff for which the suggested contributors are responsible. In this case there are great uncertainties attending this task. • It is necessary to determine who are the suggested contributors. This involves a consideration of the possibility that some or all of the claims which I have rejected might be made out. • It is not possible for me to determine degrees of responsibility for the loss of
Premier in a vacuum.
The determination of responsibility under the Wrongs Act apportionment regime or the Trade Practices Act apportionment regime raises even greater difficulties in a case such as the present where there are numerous parties and all claims have been rejected. These difficulties resemble those I have mentioned and then there are some more.
• It is necessary to identify which are the apportionable claims. It will be recalled
that some rejected claims in this case may be apportionable and some not.•
It is necessary to determine who are the concurrent wrongdoers. Until the total number of these is known it is not possible to undertake apportionment for the number of portions is not known.
•
It is necessary to determine what is the common damage suffered by the plaintiff for which the concurrent wrongdoers are responsible. In this case there are great uncertainties attending this task.
•
There is, too, a procedural question as to whether a defendant who does not allege an entitlement to apportionment can seek this relief and whether a defendant against whom apportionment is not sought in any formal pleading may be required to bear its portion of the damages awarded. The general view at the bar table in this case appeared to be that such a party might be required to assume the financial consequence of its own responsibility for the plaintiff’s loss. I am, however, troubled that to do so would offend the principles of natural justice and, further, that a party who has not formally alleged an entitlement to apportionment against another defendant might thereby escape the costs consequences of its failure to establish this entitlement. I prefer not to venture into this difficult area without the benefit of full argument against an established factual background, particularly where it is not necessary that I do so.
I will not, therefore, make any findings as to responsibility for the purposes of contribution or apportionment.
18. Conclusions and Orders
The end result of these lengthy proceedings, and the judgment which it has produced, may be shortly stated. The orders, other than costs orders, which I would propose are the following.
Supreme Court Proceeding No. 8264 of 2003
(1) Order that the following questions be determined after the hearing and
determination of all other questions at the trial:(a) In respect of the claim made by Premier pursuant to s. 62A(2) of the Environment Protection Act 1970 (Vic):
(i) whether the Engineering and Consulting Costs of $3,218,532 or any and what sum were incurred reasonably and in good faith in complying with clean up notices under s. 62A; and (ii) whether the amount of the Direct Financing Costs (referable to Engineering and Consulting Costs) is $709,209 or any and what amount; (b) In respect of the claim made by North Suburban pursuant to s. 62A(2) of the Environment and Protection Act 1970 (Vic) whether the amount of $231,888.49 or any and what sum was incurred by North Suburban reasonably and in good faith in complying with the following clean up notices issued under s. 62A.:
(a) Notice dated 18 February 2004;
(b) Notice dated 28 September 2004; and
(c) Notice dated 10 March 2006.
(c) What is the amount of economic loss suffered by Premier as a result of the pollution of the Premier land found to have been caused by Spotless insofar as that economic loss constitutes:
(i) Engineering and Consulting Costs incurred in respect of those clean up notices under s. 62A; (ii) the amount of the Direct Financing Costs incurred in respect of
those Engineering and Consulting Costs.(d) Whether the amount of the Enforcement Costs is $87,268 or any and what lesser amount.
(2)
Declare that the firstnamed defendant is liable pursuant to s. 62A(2) of the Environment Protection Act to compensate the plaintiff for any costs incurred by it which are reasonable and which were incurred in good faith in complying with any or all of the following notices:
(a) Notice dated 18 November 2003; (b) Notice dated 27 February 2004; and (c) Notice dated 10 March 2006. (3) Order that the question of the amount of such costs be referred to a Master for
enquiry and determination.(4) Order that the firstnamed defendant pay to the plaintiff the amount so
determined.(5) Liberty to apply. (6) Otherwise there be judgment for each of the defendants against the plaintiff. (7)
Declare that the firstnamed defendant is liable pursuant to s. 62A(2) of the Environment Protection Act to compensate the secondnamed defendant for any costs incurred by it which are reasonable and which were incurred in good faith in complying with any or all of the following notices:
(a) Notice dated 18 February 2004; (b) Notice dated 28 September 2004; and (c) Notice dated 10 March 2006. (8) Order that the question of the amount of such costs incurred to date be referred
to a Master for enquiry and determination.(9) Order that the firstnamed defendant pay to the second defendant the amount so
determined.(10) Liberty to apply. VCAT Proceeding W9/2004
(11) The claims of the applicant be dismissed. VCAT Proceeding W61/2005
(12) The claims of the applicant be dismissed.
I will hear counsel further as to whether proposed orders (1)(c) and (d) are appropriate as to the precise terms of the orders to be made to give effect to my conclusions generally and as to costs.
Annexure 1
---
CERTIFICATE
I certify that this and the 232 preceding pages are a true copy of the reasons for judgment of Byrne J of the Supreme Court of Victoria delivered on 5 October 2007.
DATED this 5th day of October 2007.
Associate to Mr Justice Byrne
12
0
0