Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 23)

Case •

[2020] NSWSC 650

•

29 May 2020

No judgment structure available for this case.

Supreme Court


New South Wales

  • Summary available
  • Amendment notes
Medium Neutral Citation: Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 23) [2020] NSWSC 650
Hearing dates: 29 & 30 April 2020
Date of orders: 29 May 2020
Decision date: 29 May 2020
Jurisdiction:Common Law
Before: Beech-Jones J
Decision:

(1)   The following questions are to be determined separately and in advance of all remaining issues in the proceedings:

 

“Q37a) Are the plaintiff and group members entitled to pre-judgment interest on damages at default Court rates?
b)   Does the circumstance that group members received gratuitous goods or services affect their entitlement to an award of pre-judgment interest at default Court rates?
Q38   Are the plaintiff and the group members entitled to pre-judgment interest on heads of damage for gratuitous services?”

 

(2)   The issues of fact and law set out in the annexure to the orders made on 14 September 2018 and the questions posed by order 1 be determined and answered in accordance with the Schedule to these orders.

 

(3)   Judgment for the plaintiff against the First Defendant in the sum of $126,583.50.

 

(4)   Judgment for the plaintiff against the Second Defendant in the sum of $75,950.10.

 

(5)   Judgment for the plaintiff against the Third Defendant in the sum of $50,633.40.

 

(6)   Save as they permit each defendant to seek contribution from another in relation to any liability each has to pay the plaintiff’s or group members’ costs, all cross-claims be dismissed.

 

(7)   Direct the parties, on or before 14 July 2020, file an electronic memory device containing all the pleadings, affidavits, exhibits, transcript and submissions in the proceedings as at 1 June 2020.

 (8)   Reserve all questions of costs of the proceedings including costs of the cross‑claims.
Catchwords:

REPRESENTATIVE ACTIONS – property damage arising out of widespread urban flooding from Brisbane River escaping its banks in January 2011 – principal judgment delivered in November 2019 – plaintiff successful against all three defendants – consequential issues – form of common or separate questions – formal order made answering questions

 

DAMAGES – INTEREST – fixtures and fittings of plaintiff’s store damaged by flood – clean up undertaken by volunteer labour before store reopened – plaintiff recovered amount for damage calculated by reference to commercial cost of volunteer labour – whether interest should be allowed – award of interest compensatory – matters irrelevant to recovery of head of damage may be relevant to award of interest – HELD: interest not awarded.

NEGLIGENCE – APPORTIONMENT – plaintiff’s claim “apportionable claim” – whether appropriate apportionment provision is s 31(1) of Civil Liability Act 2003 (Qld) or s 35 of Civil Liability Act 2002 (NSW) – apportionment between defendants found vicariously liable for actions of flood engineers – flood engineers engaged on successive shifts during flood event – difficulties in quantification of “causal potency” of each flood engineers actions – whether comparison of relative flood engineer’s contribution to damage should be taken into account – whether liability should be apportioned equally between defendants or by reference to flood engineers the parties employed – utility of quantitative assessments of causal potency – whether breach finding in respect of one flood engineer should be reviewed or modified – HELD: Queensland statute applicable – relevant assessment should be by reference to vicarious liability for flood engineer – quantitative assessment of little assistance but qualitative assessment of relative contributions and degree of departure still possible – assessments tempered by common undertaking and common mistakes of flood engineers – First Defendant: 50% responsible – Second Defendant: 30% responsible – Third Defendant: 20% responsible.
Legislation Cited: Civil Liability Act 2003 (Qld)
Civil Liability Act 2002 (NSW)
Civil Proceedings Act 2011 (Qld)
Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005
Cases Cited: Anthanasopoulos v Moseley (2001) 52 NSWLR 262; [2001] NSWCA 266
Batchelor v Burke (1981) 148 CLR 448; [1981] HCA 30
CSR Ltd v Eddy (2005) 226 CLR 1; [2005] HCA 64
Cullen v Trappell (1980) 146 CLR 1; [1980] HCA 10
Fire and All Risks Insurance Co Ltd v Callinan (1978) 140 CLR 427; [1978] HCA 31
GEJ & MA Geldard Pty Ltd v Mobbs (No 2) [2011] QSC 33
Giles v Thompson [1994] 1 AC 142
Griffiths v Kirkmeyer (1977) 139 CLR 161; [1977] HCA 45
Grincelis v House (2000) 201 CLR 321; [2000] HCA 42
H Cousins & Co Ltd v D & C Carriers Ltd [1971] 2 QB 230
Haines v Bendall (1991) 172 CLR 60; [1991] HCA 15
Harbutt’s “Plasticine” Ltd v Wayne Tank & Pump Co Ltd [1970] 1 QB 447
Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613; [2013] HCA 10
James Hardie & Co Pty Ltd v Roberts (1999) 47 NSWLR 425; [1999] NSWCA 314
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503; [2000] HCA 36
MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3
Metal Box Co Ltd v Currys Ltd [1988] 1 WLR 175
Powercor Australia Ltd v Thomas (2012) 43 VR 220; [2012] VSCA 87
Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187
Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657
Scenic Tours Pty Ltd v Moore [2018] NSWCA 238
Screenco Pty Ltd v R L Drew Pty Ltd & Ors [2002] NSWSC 1050
Screenco Pty Ltd v R L Drew Pty Ltd (2003) 58 NSWLR 720; [2003] NSWCA 319
Strong v Woolworths (2012) 246 CLR 182; [2012] HCA 5
Thompson v Faraonio (1979) 54 ALJR 231
Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67
Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91
Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463
Zheng v Cai (2009) 239 CLR 446; [2009] HCA 52
Texts Cited: Practice Direction Number 7 of 2013 (Qld)
Supreme Court Practice Note SC Gen 16 (NSW)
Category:Consequential orders (other than Costs)
Parties: Rodriguez & Sons Pty Limited (Plaintiff)
Queensland Bulk Water Supply Authority t/as Seqwater (First Defendant)
SunWater Limited (Second Defendant)
State of Queensland (Third Defendant)
Representation:

Counsel:
J Sexton SC; N Owens SC; R Yezerski; J Taylor (Plaintiff)
J Stoljar SC; D Klineberg; T Prince (First Defendant)
D Williams SC; HJA Neal; N Simpson (Second Defendant)
GA Thompson QC; JM Horton QC; E Morzone; D Bampton (Third Defendant)

  Solicitors:
Maurice Blackburn Pty Ltd (Plaintiff)
King & Wood Mallesons (First Defendant)
Norton Rose Fulbright (Second Defendant)
Crown Solicitor for the State of Queensland (Third Defendant)
File Number(s): 2014/200854

Judgment

  1. On 29 November 2019, I delivered the principal judgment in these proceedings (Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657; “Rodriguez (No 22)”). Save for the matters addressed in this judgment, Rodriguez (No 22) determined all issues of fact and law that arose for determination in relation to the representative plaintiff’s own claim. It also resolved all issues, save for certain aspects of causation and quantum, that arose in relation to a number of selected group members’ claims (the “sample group members”), [1] as well as various issues that were common to all or most of the claims of the plaintiff and group members or that arose between the defendants. [2] Upon the publication of Rodriguez (No 22), the proceedings were adjourned to 21 February 2020 for directions.

    1. Mr John and Mrs Betty Keller, Ms Lynette Lynch, Ms Sharon Visser and Ms Lynette Harrison.

    2. See Rodriguez (No 22), Chapter 1 at [44] and Chapter 15. All future references to Chapters are to Rodriguez (No 22).

  2. At the directions hearing on 21 February 2020, the first defendant, Queensland Bulk Water Supply Authority trading as Seqwater (“Seqwater”) advised the Court that it would be appealing Rodriguez (No 22). The second defendant, SunWater Limited (“SunWater”) intimated that it would probably do so. It confirmed its intention to appeal shortly afterwards. The third defendant, the State of Queensland (the “State”), advised the Court that it would not appeal. As there are still some issues and many claims to be resolved at first instance, it means that the proceedings at first instance continue while there are proceedings on appeal. That is not an unusual feature of large representative actions.

  3. At the directions hearing on 21 February 2020, orders were made to facilitate the resolution of three particular issues, namely, the calculation of the plaintiff’s damages, the determination of the respective proportions of the plaintiff’s judgment (and group members’ claims) that each defendant must bear and the determination of the balance of the sample group members’ claims. A hearing to determine the first two of those issues took place on 29 and 30 April 2020. Those issues are addressed by this judgment. The effect of the directions regarding the service of evidence concerning the claims of the sample group members (and the effect of the pandemic) means that the balance of their claims cannot be determined until later this year.

  4. In relation to the substantive issues the subject of this judgment and for the reasons that follow, I conclude that the plaintiff is not entitled to receive interest on so much of its award of damages that reflects flood damage to its fixtures and fittings and which is calculated by reference to the commercial cost of the volunteer labour of others that repaired that damage. Further, I conclude that the judgment entered in favour of the plaintiff should be apportioned against Seqwater, SunWater and the State in the proportions 50%, 30% and 20% respectively. These proportions will also apply to group members’ claims. The determination of these two issues resolves all currently outstanding common or separate questions. The (final) form of those answers, and the entry of an order giving effect to them, is also addressed below.

  5. The balance of these reasons are structured as follows:

(1) Interest on Property Damage ([6] to [34])

- Not “Gratuitous Services”

- Statutory Basis for Awarding Interest

- Interest is Compensatory

(2) Apportionment ([35] to [112])

- Principles

- Background

- Plaintiff, Seqwater and SunWater’s Primary Position

- Quantitative Estimates

- Chapter 13 Analysis

- Mr Giles’ Calculations

- Mr Giles’ Figures are No Assistance

- Other Criticisms of Mr Giles’ Figures

- Comparison to SIM C Volumes and Release Rates

- Utility of Quantitative Estimates

- Mr Ayre’s Role as SFOE

- Conclusion

(3) Common and Separate Questions ([113])

(4) Further Disposition ([119])

(5) Orders ([122])

(1) Interest on Property Damage

  1. The events surrounding the flooding of the plaintiff’s sporting goods and clothing store on 11 and 12 January 2011, the clean‑up and restoration of the store, including its stock and fixtures and the eventual resumption of trading, are described in Rodriguez (No 22). [3] It was found, inter alia, that in respect of all loss and damage proven to have been suffered by the plaintiff, causation had been established against each of the defendants. [4] The plaintiff claimed damages for loss and damage to its fixtures and fittings, damaged or lost stock and loss sales or profits. In Rodriguez (No 22), I noted that the parties had identified five issues that needed to be determined to calculate the plaintiff’s loss and damage. [5] All of those issues were determined in Rodriguez (No 22). [6]

    3. Chapter 1 at [12] to [15]; Chapter 13 at [270] to [279]; Chapter 14 at [4] to [7].

    4. Chapter 13 at [4(i)]; Chapter 1 at [95].

    5. Chapter 14 at [2] to [3].

    6. Chapter 14, section 14.1.

  2. After considering Rodriguez (No 22), the parties agreed on the quantification of the plaintiff’s damages, prior to any allowance for interest, being $200,968 comprised of $101,517 for trading and inventory loss, $10,377 for loss of fixtures and $89,074 for what the parties variously described as “[g]ratuitous [s]ervices”. [7] The parties also produced agreed interest calculations for the first two components. However, SunWater contended that interest should not be awarded on the third component, that is, the so called “gratuitous services”.

    7. See plaintiff’s table, SBM.010.024.0001 and SunWater table, SBM.030.020.0001.

Not “Gratuitous Services”

  1. It is first necessary to describe the head of damage that the disputed claim for interest relates to. The use by all parties of the description “gratuitous services” in this context is apt to mislead. This head of damages relates to the cost of cleaning and repairing the plaintiff’s shop, fixtures and stock after the flooding. The cleaning and repairing was undertaken for no charge by a director of the plaintiff, Mr Rodriguez, members of his family and community minded volunteers (known as the “mud army”). The value of that labour was quantified by the plaintiff on a commercial arm’s length basis.

  2. In Rodriguez (No 22), I upheld an entitlement to recover damages for cleaning and repairs quantified by reference to the commercial cost of that labour for the following reasons: [8]

“… the defendants’ negligence was causative of damage to the plaintiff’s chattels, namely its stock. The measure of damages for such loss was the reasonable commercial cost of repairing or reinstating that stock or, in the alternative, replacing the stock [citing Powercor Australia Ltd v Thomas (2012) 43 VR 220; [2012] VSCA 87 at [25] to [26]; “Powercor”]. The loss represented by the damage to the stock was suffered when the flooding occurred. [9] The fact that the stock may have in fact been repaired by persons associated with the plaintiff does not diminish the entitlement to recover for that loss. [10] According to Powercor, the fact that the stock was repaired by volunteers will only operate to diminish the plaintiff’s right to recovery if the proper characterisation of their supply of services is that they were “intended to operate in the interests of the [defendants] and diminish the damages [they] otherwise would be liable to pay” [11] or “whether the benefit received was conferred independently of any right of redress against [the defendants] and not by reference to that right”. [12] Thus, as noted in Powercor, the Victorian Court of Appeal upheld a finding that the respondent was able to recover the commercial cost of repair work to fixtures, fencing and buildings destroyed by fire undertaken by himself and volunteers. [13] Similarly, in this case there is no basis for suggesting that the “mud army” acted out of anything other than a commendable sense of community and with the particular intention of helping the plaintiff’s business be restored for everyone’s benefit. It follows that the plaintiff’s claim for damage to its chattels, namely its stock, will include the commercial cost of the services that were voluntarily rendered to repair it. The same reasoning is applicable to the costs of cleaning the store after the flooding. I do not understand there to be any dispute over the quantification of these amounts …” (emphasis added)

8. Chapter 14 at [77].

9. Powercor at [27].

10. Ibid at [73].

11. Ibid at [87], citing Zheng v Cai (2009) 239 CLR 446; [2009] HCA 52 at [18] to [20].

12. Ibid at [81], citing Wollington v State Electricity Commission of Victoria (No 2) [1980] VR 91.

13. Ibid at [73] and [91].

  1. This analysis is inconsistent with any characterisation of this aspect of the damages claim as damages “for gratuitous services”. Instead, recovery is allowed for an amount representing damage to property, the quantification of which is derived from an assessment of the commercial cost of the labour necessary to repair it. In the above passage, I found that the fact that the labour was provided “free of charge” only operates to reduce the damages if the providers of the labour provided it with the intention that it would reduce the plaintiff’s entitlements, which they did not.

  2. This aspect of the plaintiff’s claim is conceptually different to a claim by an injured person for the recovery of the commercial cost of care that has been or will be voluntarily provided to them by friends or family and which is in that sense “gratuitous”, ie a Griffiths v Kirkmeyer [14] claim. Insofar as a Griffiths v Kirkmeyer claim is allowed for cost of services that may not be supplied or paid for, then it does not involve the recovery of any form of direct or pecuniary loss. The recovery of Griffiths v Kirkmeyer claims that do not involve any direct or pecuniary loss was described by Gleeson CJ, Gummow and Heydon JJ in CSR v Eddy as “not only exceptional, but anomalous”. [15] The judgment relied on in the above passage from Rodriguez (No 22), namely Powercor, specifically disclaimed reliance on Griffiths v Kirkmeyer as the basis for awarding damages in that case [16] and the basis for awarding damages in that case was not relevantly different to this aspect of the plaintiff’s case. Unlike a Griffiths v Kirkmeyer claim, this aspect of the plaintiff’s case is a claim for direct loss.

    14. (1977) 139 CLR 161; [1977] HCA 45.

    15. CSR Ltd v Eddy (2005) 226 CLR 1; [2005] HCA 64 at [31] (“CSR v Eddy”); see Chapter 14 at [80].

    16. Powercor at [92].

  3. The present issue concerns whether interest should be awarded on this aspect of the plaintiff’s damages. SunWater contended that, even if the fact that the shop and chattels were repaired for “free” is ignored in determining the amount of damages to be recovered, it must be taken into account in awarding interest on those damages.

  4. Before addressing that contention, it is necessary to address a point raised by the plaintiff concerning the quality of the clean‑up that occurred. The passage from Rodriguez (No 22) set out above refers to this head of damage being quantified by reference to the “commercial cost of the services that were voluntarily rendered to repair it”. At the hearing, the plaintiff read an affidavit from Ms Leane Rudd who, since 1996, has been the part‑owner and the operations manager of High Powered Floor Restoration Pty Ltd (“High Powered”). High Powered is a commercial restoration and cleaning company. Following the January 2011 Flood Event, High Powered was engaged by residential property owners and commercial firms (including retail shops) to undertake cleaning and restoration of approximately 200 flood affected properties. In 2015, Ms Rudd provided a quotation to the plaintiff’s solicitors of what it would have cost to clean that shop in the immediate aftermath of the flood in January 2011. This assessment was based on information she was provided as to the floor space and configuration of the plaintiff’s store, the level of flooding and the damage sustained.

  5. In its written submissions responding to SunWater’s contention that interest should not be awarded on this component of its damages, the plaintiff contended, inter alia, as follows: [17]

“SunWater seeks to reverse the onus of proof …. SunWater appears to assume that the services provided by the “mud army” to the plaintiff were equivalent to the commercial services that would otherwise have been obtained had the plaintiff received monetary damages at the relevant time. That is obviously not the case. The valiant but makeshift cleaning processes that Mr Rodriguez describes ….. were clearly far more rudimentary than the sort of professional cleaning services that Ms Rudd says would have been provided to the plaintiff had her company been engaged to commercially clean the plaintiff’s premises after the flood …”

17. SBM.010.022.0001 at [19].

  1. As I understand this submission, it appears to be contending that, as SunWater contends that no interest should be awarded on this component of the plaintiff’s damages, it bears an onus of proving that the cleaning services that were in fact provided for free were to the value or standard of what the plaintiff was entitled as reflected in Ms Rudd’s quotation and it has not discharged that onus.

  1. I do not agree. After the flood, the plaintiff’s store reopened for trading on 26 May 2011. [18] The premise of the plaintiff’s case for lost profits is that, by that time, the cleaning efforts undertaken were sufficient to allow the reopening to occur. That premise is supported by the fact there was a strong rebound in sales revenue for the financial year commencing 30 June 2011. [19] In these circumstances, the inference is available that the clean‑up that in fact occurred was at least to the approximate standard that was the basis for Ms Rudd’s quote and, to the extent necessary, I so find. The clean‑up may not have been undertaken as quickly as what Ms Rudd’s business could have undertaken it, but any such differential is reflected in the plaintiff’s claim for lost sales.

    18. Chapter 14 at [7].

    19. See Chapter 14 at [8]; note that the reference to “financial year 2010” in Chapter 14 at [10] should be “financial year 2011”.

Statutory Basis for Awarding Interest

  1. The starting point in addressing SunWater’s contention is the statutory provisions governing the grant of interest. Section 58(3) of the Civil Proceedings Act 2011 (Qld) (“CPA (Qld)”) provides that “the court may order that there be included in the amount for which judgment is given interest at the rate the court considers appropriate for all or part of the amount and for all or part of the period between the date when the cause of action arose and the date of judgment”. Section 100(1) of the Civil Procedure Act 2005 (NSW) is in similar terms in that it relevantly provides that the Court “may include interest in the amount for which judgment is given ... at such rate as the court thinks fit”.

  2. In New South Wales, r 6.12(8) of the Uniform Civil Procedure Rules 2005 provides to the effect that, if in the case of a liquidated claim, a claim for interest is made, then it is taken to be for interest at a rate 4% above the cash rate last published by the Reserve Bank of Australia. Clause 5 of Supreme Court Practice Note SC Gen 16 advises litigants to expect that pre‑judgment interest will be awarded at that rate. The practice notes published in Queensland provide for the same rate so far as a “money order debt” and default judgments are concerned. [20] It was this rate that was applied in determining the agreed interest component on the first two heads of damage noted in [7] above.

    20. Practice Direction Number 7 of 2013.

  3. SunWater contended that the relevant interest provision to be applied is s 58(3) of the CPA (Qld) on the basis that, as an award of interest is compensatory, it is “akin to an award of damages”, [21] a provision empowering a Court to award interest is a “law ... that bear[s] upon the existence, extent or enforceability of remedies, rights and obligations” and is therefore “substantive” such that it is governed by the law of the place where the tort occurred. [22] The plaintiff did not accept that but contended that it was not necessary to determine which provision applies given the similarity in the statutory provisions and the rates applicable in both jurisdictions. I agree.

    21. SBM.030.013.0001 at [16].

    22. SBM.030.013.0001 at [13] to [16] citing John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503; [2000] HCA 36; (“John Pfeiffer v Rogerson”).

Interest is Compensatory

  1. SunWater is correct to characterise an award of interest as compensatory in that “an award of interested on damages for personal injury should do no more than assist in the restoration of a plaintiff to the position in which he or she would have been but for the defendant’s negligence”. [23] The rationale for the award of interest is that the plaintiff is compensated “for having been kept out of money which theoretically was due to him at the date of his accident”. [24] In Metal Box Co Ltd v Currys Ltd [1988] 1 WLR 175 (“Metal Box”), a plaintiff whose goods were destroyed recovered their value and interest on that amount even though there was no claim for consequential loss. [25] In this case, the plaintiff contends that, as at the date of the accident, it had an entitlement to recover for the damage to its shop and chattels and it is entitled to interest for being “kept out of [that] money”. [26]

    23. Haines v Bendall (1991) 172 CLR 60 at 67; [1991] HCA 15 (“Haines v Bendall”).

    24. Thompson v Faraonio (1979) 54 ALJR 231 at 233; Haines v Bendall at 66; MBP (SA) Pty Ltd v Gogic (1990) 171 CLR 657 at 663; [1991] HCA 3.

    25. At 180.

    26. SBM.010.022.0001 at [6] to [9].

  2. SunWater submitted that to award interest on this component of the plaintiff’s damages would amount to a windfall. [27] It emphasised the broad terms of the statutory discretion to award interest and contended that it should be exercised having regard to its compensatory nature. SunWater emphasised that interest for economic loss should be allowed “only on that part of the damages awarded under that head which represents the compensation for those detriments the practical impact of which, in terms of economic loss actually incurred, has already, at the date of judgment been experienced by the plaintiff”. [28] SunWater contended that, in circumstances where the plaintiff’s shop and chattels were repaired by “free” labour, then there were no “detriments”, the “practical impact” of which was experienced by the plaintiff at the date of judgment.

    27. Seqwater submitted that if SunWater’s submission was upheld then it should apply equally to all defendants: T 10704.

    28. Citing Fire and All Risks Insurance Co Ltd v Callinan (1978) 140 CLR 427 at 432; [1978] HCA 31; Cullen v Trappell (1980) 146 CLR 1 at 18; [1980] HCA 10; Batchelor v Burke (1981) 148 CLR 448 at 451; [1981] HCA 30 (“Batchelor v Burke”).

  3. The limits imposed on awarding interest by the compensatory character of the award are demonstrated by Batchelor v Burke and Haines v Bendall, both of which concern the interest allowed on common law damages in circumstances where the injured plaintiff received workers compensation benefits prior to judgment which had to be repaid from the damages award but not with interest. In Batchelor v Burke it was held that, where a plaintiff received workers compensation for lost earnings prior to trial, then the receipt of that payment reduced the interest awarded on common law damages for past loss of income. [29] Similarly, in Haines v Bendall, where an injured worker received workers compensation that had a same or similar purpose to an award of damages for non‑economic loss, then the receipt of workers compensation from their employer was required to be considered in determining the interest payable on damages from a third party for non-economic loss. [30]

    29. Batchelor v Burke at 455.

    30. Haines v Bendall at 72.

  4. SunWater placed particular reliance on the Court of Appeal’s decision in Screenco Pty Ltd v R L Drew Pty Ltd (2003) 58 NSWLR 720; [2003] NSWCA 319 (“Screenco”). [31] The primary judge in Screenco allowed the plaintiff company to recover the value of its profit earning chattel that was destroyed but declined to award interest. The plaintiff appealed. As at the date of the accident, the plaintiff had acquired ownership of the asset from its parent company but had not made any payment for it and did not do so until the date of judgment. There was no evidence before the primary judge to the effect that it would ever have to pay any interest on the cost of acquiring the asset. [32] The plaintiff company received an award of lost profits for its inability to use the asset for the period prior to the provision of a replacement by the parent. It later purchased a replacement. [33]

    31. SBM.030.013.0001 at [25] to [30].

    32. Screenco Pty Ltd v R L Dew Pty Ltd & Ors [2002] NSWSC 1050 at [11].

    33. Ibid at [1].

  5. On appeal, Handley JA reviewed the authorities, including those noted above, and concluded that the discretionary nature of an award of interest and the necessity to avoid over compensation justified the primary judge’s refusal to award interest. [34] His Honour concluded that to have awarded the plaintiff interest would have improved its position rather than restore it. [35] Tobias JA reached the same conclusion. [36] All the members of the Court held that an award of interest for being “kept out of money” could only be awarded if it was shown that the relevant plaintiff had suffered a “real and practical” loss or detriment. [37]

    34. Ibid at [41].

    35. Ibid at [47]; citing Haines v Bendall at [25].

    36. Ibid at [124].

    37. Ibid at [15] per Handley JA; [56] per Sheller JA and [90] per Tobias JA.

  6. Three further matters should be noted about Screenco.

  7. First, of particular relevance to the present issue is the observation by Handley JA that “matters which are irrelevant in the assessment of damages may be relevant to the award of interest”. [38] His Honour cited Batchelor v Burke, Haines v Bendall and Harbutt’s “Plasticine” Ltd v Wayne Tank & Pump Co Ltd [1970] 1 QB 447 (“Harbutt’s case”) as authority for that proposition. In Batchelor v Burke and Haines v Bendall the workers compensation benefits were irrelevant to the assessment of damages as they were required to be repaid. However, they were found to be relevant to the award of interest. Harbutt’scase reached the same conclusion in relation to the proceeds of an insurance policy covering the loss the subject of a claim in the proceedings, [39] although the position would have been different if the insurer could have subrogated to the claim for interest. [40] In this case, SunWater contends that, while the voluntary provision of labour to fix the plaintiff’s store and stock might have been irrelevant for the purpose of assessing damages, [41] it was not irrelevant to the award of interest.

    38. Ibid at [46].

    39. Harbutt’s case at 468.

    40. H Cousins & Co Ltd v D & C Carriers Ltd [1971] 2 QB 230; Metal Box at 180A.

    41. Chapter 14 at [77].

  8. Second, in Screenco, the crucial factor identified by the members of the Court of Appeal as justifying a denial of interest to the plaintiff, in that case, was the fact that the plaintiff has not paid its parent company for the acquisition of the lost chattel either at the time of the accident or even by the time of judgment and there was an absence of any evidence that it was obliged to pay interest. [42] Unlike Batchelor v Burke and Haines v Bendall, which concern the receipt of money after the accident that, but for the accident, would not have been received, the denial of interest in Screenco was thus said to be justified by the circumstances in which the asset was acquired before the event that gave rise to a liability. With respect, this is curious reasoning because all the members of the Court also accepted that, if the chattel was the subject of a gift, then interest would have been awarded, [43] although not for a period that coincided with any claim for lost profits from the use of the chattel. [44] It is not apparent what difference there is between acquiring a chattel as a gift and acquiring a chattel with no obligation to pay interest such as would justify awarding interest in the former case but not in the latter. In both cases, if the lost chattel had been sold on the day of the event that gave rise to liability instead of destroyed, then the owner would have received its value and been able to derive earnings on that sum and, in that sense, would have been “kept out of its money”.

    42. Screenco at [44] to [51] per Handley JA, [55] to [56] per Sheller JA and [123] to [124] per Tobias JA.

    43. Ibid at [49] per Handley JA, [54] per Sheller JA, and [123] per Tobias JA.

    44. Ibid at [51] per Handley JA.

  9. It is not necessary to consider this further as this case is akin to Batchelor v Burke and Hainesv Bendall in that, after the event that gave rise to liability, the plaintiff received something that corresponded to its loss, being an in-specie service rather than a payment. In that respect, this case is closely analogous to Giles v Thompson [1994] 1 AC 142 (“Giles v Thompson”). In Giles v Thompson, the House of Lords overturned an award of statutory pre‑judgment interest made in respect of the cost of motor vehicles provided as replacement cars while the motorist’s vehicle was being repaired following an accident in respect of which the defendant was at fault. The replacement vehicles had been provided to the motorist on the understanding that the hire charges would be paid from any judgment obtained by the plaintiff but there was no agreement for the payment of interest by the motorist on those charges. [45] Lord Mustill concluded that “[i]n reality [the motorist] was not ‘kept out of’ any money of [their] own whilst the claim was being assessed and litigated”. [46]

    45. Giles v Thompson at 168A to E per Lord Mustill.

    46. Ibid at 168C.

  10. Third, in this case, Senior Counsel for the plaintiff, Mr Sexton SC, submitted that if the plaintiff had hypothetically recovered its damages on the day immediately after the flooding it would have received an amount for the cost of repairs to its fixtures and fittings. He submitted that thereafter it would have been entitled to do with its money what it wished and it would not have had to spend the funds on actually repairing its fixtures and stock. He submitted that, in those circumstances, the delay has served to deny its entitlement and interest should be awarded because in that sense it had been “kept out of its money” by not receiving the damages it was entitled to. [47]

    47. T 10733 to T 10734.

  11. This argument echoes the arguments that were put in both Screenco and Giles v Thompson. In both cases the response was the same, namely, that an award of interest is discretionary, that the discretion must be exercised having regard to all of the circumstances including those that occur after the event giving rise to liability and having regard to the compensatory purpose noted above. [48] When those matters are considered, then the authorities require that the subsequent provision of free labour to address the harm done must be considered in determining whether to award interest, even if it cannot be considered in the assessment of damages.

    48. Screenco at [14] to [15] and Giles v Thompson at 168B.

  12. In oral submissions, [49] Mr Sexton also relied on Anthanasopoulos & Ors v Moseley (2001) 52 NSWLR 262; [2001] NSWCA 266 (“Anthanasopoulos”) in which all three members of the Court of Appeal held that a motorist whose car was damaged was able to recover for the cost of car hire even though it was provided without charge by their insurer. Beazley JA so found without direct or analogous reliance on Griffiths v Kirkmeyer. [50] Ipp JA relied on Griffiths v Kirkmeyer to reason by analogy that “damages for injury to a non-income producing chattel is also based on need”. [51] Handley JA agreed with both Beazley and Ipp JJA. In light of CSR v Eddy, so much of the reasoning in Anasthopoulos that relies upon Griffiths v Kirkmeyer is doubtful. Leaving that aside, Anthanasopoulos does not address the awarding of interest on such amounts. As Screenco makes clear, matters that are irrelevant to the assessment of damages may be relevant to an award of interest.

    49. T 10698.38.

    50. Anthanasopoulos at [37].

    51. Ibid at [80].

  13. The plaintiff also placed reliance on Grincelis v House (2000) 201 CLR 321; [2000] HCA 42 (“Grincelis”). [52] Grincelis involved a claim for interest on an amount awarded for the value of gratuitous services provided by the injured plaintiff’s parents prior to judgment. The relevant statutory provision obliged the Court, in any proceedings for the recovery of money, to award interest “unless good cause is shown the contrary”. [53] Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ found that good cause to the contrary had not been shown [54] and that the injured plaintiff had been “kept out of money amounts which were calculated by reference to the purchasing power of money in the past”. [55] Their Honour’s noted that judicial dissatisfaction with Griffiths v Kirkmeyer was not a basis for not awarding interest. [56] As noted, that dissatisfaction reached its apex in CSR v Eddy when such awards were described as “not only exceptional, but anomalous”. However, that is of no relevance to the present issue. Grincelis simply confirms that, if an injured plaintiff is entitled to an amount for past gratuitous services, then they are also entitled to interest on that amount for being “kept out of money”. As already explained, in this case, the plaintiff’s damages are conceptually different to Griffiths v Kirkmeyer and its entitlement to interest is affected by the provision of free labour that addressed the damage that was occasioned.

    52. SBM.010.022.0001 at [6].

    53. Grincelis at 326.

    54. Ibid at 327.

    55. Ibid at 330.

    56. Ibid.

  14. In its written submissions, the plaintiff noted that in Grincelis the majority observed that the awarding of pre‑judgment interest can also serve to encourage the early resolution of litigation. [57] If ever there was litigation in which there should be some encouragement to settlement it is this case. However, to award interest on that basis or because the defendants have derived a benefit from their retention of the plaintiff’s damages would not be consistent with the compensatory basis on which interest is awarded.

    57. SBM.010.022.0001 at [10].

Conclusion

  1. It follows that there will be no allowance for interest on so much of the plaintiff’s award for damage to its fixtures and fittings and which is calculated by reference to the commercial cost of volunteer labour that repaired them. This conclusion also applies to group members who received the benefit of volunteer labour. Whether a different conclusion is warranted in the case of a group member whose own labour repaired damaged property is an issue that will have to await an appropriate factual context before it can be resolved. A different outcome may result because a claim relating to a group member’s own labour might be re‑formulated as a claim for consequential economic loss. Such a claim was not maintainable by the plaintiff as it is a corporate entity and it was not suggested it had incurred any liability to Mr Rodriguez in respect of his time in providing labour. For that reason, the answers to the questions relevant to this topic will be confined to the circumstance where the clean‑up and repair was provided by the volunteer labour of persons other than the relevant group member.

(2) Apportionment

  1. In Rodriguez (No 22), it was found that the plaintiff’s claim in negligence is an “apportionable claim” within the meaning of both s 28(1) of the Civil Liability Act 2003 (Qld) (“CLA (Qld)”) and s 34(1) of the Civil Liability Act 2002 (NSW) “depending on which is applicable”. [58] The qualification “depending on which is applicable” concerned which apportionment statute applies to a cause of action that is wholly founded in Queensland but litigated in New South Wales (although there does not appear to be any substantive difference between the two provisions). [59] It follows from the statement in John Pfeiffer v Rogerson that all laws that “bear upon the existence, extent or enforceability of remedies, rights and obligations should be characterised as substantive and not as procedural laws”, [60] that the apportionment provisions of the CLA (Qld) are applicable.

    58. Chapter 15 at [24], A28.

    59. Chapter 14 at [88].

    60. At [102].

Principles

  1. Section 31(1) of the CLA (Qld) provides:

“(1)   In any proceeding involving an apportionable claim—

(a)   the liability of a defendant who is a concurrent wrongdoer in relation to the claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage; and

(b)   judgment must not be given against the defendant for more than that amount in relation to the claim.” (emphasis added)

  1. All the parties [61] invoked the approach to apportionment between a defendant and a plaintiff found to be contributory negligent as stated in the following passage from Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492 at 494 (“Podrebersek”): [62]

“A finding on a question of apportionment is a finding upon a “question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds”: British Fame (Owners) v Macgregor (Owners) [1943] AC 197 at 201.

…

The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man (Pennington v Norris (1956) 96 CLR 10 at 16) and of the relative importance of the acts of the parties in causing the damage: Stapley v Gypsum Mines Ltd [1953] AC 663 at 682; Smith v McIntyre [1958] Tas SR 36 at 42-49 and Broadhurst v Millman [1976] VR 208 at 219 and cases there cited. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case; for example, the circumstances of some cases may be such that a comparison of the relative importance of the acts of the parties in causing the damage will be of little, if any, importance.” (emphasis added)

61. Plaintiff: SBM.010.020.0001 at [3]; Seqwater: SBM.020.023.0001 at [8]; SunWater: SBM.030.014.0001 at [18]; State: SBM.040.008.0001 at [9].

62. See Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187 at [60] per Barrett J (“Reinhold”).

  1. This approach has been described as involving consideration being given to such matters as which of the wrongdoers was more actively engaged in the activity causing loss [63] and which of the wrongdoers was more able effectively to prevent the loss happening in order to reach a conclusion as to which wrongdoer “is, in a real and pragmatic sense, more to blame than the other”. [64]

    63. Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 at [97] (“Yates”).

    64. Yates at [94]; GEJ & MA Geldard Pty Ltd v Mobbs (No 2) [2011] QSC 33 at [17].

  2. The above passage from Podrebeserk draws attention to three particular factors, namely, the “degree of departure from the standard of care”, the “relative importance of the acts of the parties in causing the damage” and “the whole conduct of each negligent party in relation to the circumstances of the accident”. In relation to the first and third matters, there is a possible tension between considering the degree of departure from the standard of care in relation to a defendants’ breach of duty and otherwise considering the “whole [of their] conduct”. At various points, the defendants’ submissions addressed the precise findings of breach made against the flood engineer that that defendant employed and sought to contrast those breaches with the conduct of other flood engineers on matters that went beyond breach findings. [65] The correct approach is to assess the degree of the departure from the relevant standard of care by each flood engineer in the context of the whole of the conduct of all the defendants “in relation to the circumstances in which the loss was sustained”. [66]

    65. Eg T 10674.

    66. Reinhold at [60].

  3. In relation to the second matter, namely, “a comparison … of the relative importance of the acts of the parties in causing the damage”, the above passage from Podrebersek contemplates that in some cases that factor will be “of little, if any, importance”. As I will explain, the plaintiff submitted that this was such a case and to a large extent both Seqwater and SunWater agreed, although they alternatively contended for an ostensibly impressionistic and qualitative assessment of the “causal potency” [67] of each flood engineer’s failings and their degree of the departure from the relevant standard of care. The State sought to address “causal potency” quantitatively. [68]

    67. See Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67 at [29] per Rolfe JA (“Vinidex”).

    68. SBM.040.008.0001 at [22].

Background

  1. The analysis of apportionment in this judgment should be read with the findings in Rodriguez (No 22). For those who, for some inexplicable reason, are not inclined to read all 1609 pages of Rodriguez (No 22) and its appendices, it suffices to note the following. In Rodriguez (No 22), it was found that each of the four flood engineers who were on duty at various times during the January 2011 Flood Event [69] breached a duty of care that they each owed to the plaintiff and other group members whose real and personal property was vulnerable to flooding from the Brisbane River breaking its banks or flooding in the lower part of Lockyer Creek and the Bremer River. [70] Each of Seqwater, as the employer of two of the flood engineers (Messrs Malone and Tibaldi), SunWater as the employer of one flood engineer (Mr Ayre) and the State as the employer of the other flood engineer (Mr Ruffini), was found to be vicariously liable for their conduct. [71]

    69. See Chapter 1 at [77].

    70. Chapter 1 at [86].

    71. Chapter 1 at [88].

  2. The content of the duty of care owed by each flood engineer was found to be heavily informed by the requirements of the Flood Mitigation Manual (the “Manual”). [72] It was held that the Manual adopted a risk management approach that prioritised the protection of urban areas from flooding over the dislocation occasioned by the inundation of certain rural bridges. [73] It was also held that the Manual made rainfall forecasts a central component of a flood engineer’s decision‑making processes. [74] It was found that the flood engineers conducted flood operations throughout the January 2011 Flood Event in a manner that was contrary to the Manual by, inter alia, failing in the period prior to 6 January 2011 to declare a flood event, failing to use forecasts to determine the applicable strategy in the Manual and make release decisions and failing to prioritise the protection of urban areas from flooding over the avoidance of inundating rural bridges. [75]

    72. QLD.001.001.0416; Chapter 1 at [47].

    73. Chapter 1 at [49].

    74. Chapter 1 at [50].

    75. Chapter 1 at [59] to [68], Chapter 7 at [473].

  3. In Rodriguez (No 22), the Court accepted most but not all of a methodology put forward by an expert called by the plaintiff, Dr Ronald Christensen, as embodying what was required by a reasonably competent flood engineer properly applying the Manual to the circumstances of the January 2011 Flood Event. [76] It was found that a reasonably competent flood engineer who inherited the circumstances prevailing as at midnight on 2 January 2011 would have, at a minimum, made flood releases substantially in accordance with a counter factual simulation proposed by Dr Christensen, namely Simulation C (“SIM C”), up to and including 9 January 2011 and made flood releases substantially in accordance with that simulation thereafter. [77] Findings of breach were made against each flood engineer in relation to the periods they were on “duty” [78] up to and including the afternoon of 10 January 2011. [79]

    76. See Chapter 1 at [69] to [85]; Chapters 10 to 12.

    77. Chapter 10 at [188].

    78. Including Mr Malone for the period prior the declaration of a flood event from 2 January 2011 to 6 January 2011: Chapter 12, sections 12.5 to 12.8.

    79. Chapter 12, section 12.13.

  4. So far as causation is concerned it was found that, if flood operations had been undertaken substantially in accordance with SIM C, the plaintiff’s store and the shopping centre it formed part of would not have been inundated. [80] It was also found that each of the flood engineer’s breaches of duty, including those of Mr Ruffini, were necessary to complete a set of conditions that were jointly sufficient to account for the occurrence of the particular harm at the plaintiff’s store and such other forms of particular harm at, or to, group members’ property that is proven to be the result of the difference in outflows between the events that happened and SIM C. [81]

    80. Chapter 13 at [274].

    81. Chapter 1 at [95]; Chapter 13, section 13.5.

  5. The difficulty so far as apportionment is concerned arises from the fact that the flood engineers were employed by different entities and worked successive shifts as Duty Flood Operations Engineer (“DFOE”) immediately prior to and during the course of the January 2011 Flood Event as follows: [82]

    82. The precise handover times are set out in Chapters 6 and 7 of Rodriguez (No 22).

Period Start

Period End

Flood Engineer

2/01/2011    0:00

2/01/2011    7:00

Ayre

2/01/2011    7:00

6/01/2011    7:00

Malone

6/01/2011    7:00

6/01/2011    19:00

Malone

6/01/2011    19:00

7/01/2011    7:00

Ayre

7/01/2011    7:00

7/01/2011    19:00

Malone

7/01/2011    19:00

8/01/2011    7:00

Ruffini

8/01/2011    7:00

8/01/2011    19:00

Ayre

8/01/2011    19:00

9/01/2011    7:00

Tibaldi

9/01/2011    7:00

9/01/2011    19:00

Malone

9/01/2011    19:00

10/01/2011    7:00

Ayre & Ruffini

10/01/2011    7:00

10/01/2011    17:00

Malone & Tibaldi

  1. The period until around 9.00am on 2 January 2011 involved the closing of the gates at Wivenhoe Dam as the flood engineers ceased flood operations at the conclusion of the Late December Flood Event. [83] The last gate was closed at around 9.00am on 2 January 2011. [84] Mr Malone was the DFOE “on call” [85] from that time until the flood operations centre was mobilised on the morning of 6 January 2011. [86] Throughout December 2010 and January 2011, Mr Ayre was the Senior Flood Operations Engineer (“SFOE”).

    83. Chapter 6 at [52] to [62]; Chapter 4 at [202].

    84. Chapter 6 at [54].

    85. Chapter 3 at [16] to [17].

    86. Chapter 6 at [153].

Plaintiff, Seqwater and SunWaters’ Primary Position

  1. Both the plaintiff and Seqwater contended that a just and equitable apportionment is one in which each of the three defendants bear a one third responsibility for the plaintiff’s (and group members’) loss. [87] SunWater’s primary contention was that the most just and equitable outcome is an apportionment of liability equally amongst the flood engineers, such that Seqwater should be held liable for 50% as it employed two of the four flood engineers and that both SunWater and the State should each be held liable for 25% as they each employed one flood engineer. [88] In contrast, the State sought to tether the proportion attributed to it to a volumetric assessment of Mr Ruffini’s contribution to the loss or damage and by a consideration of other factors said to diminish his responsibility. [89]

    87. Plaintiff: SBM.010.020.0001 at [1(a)] and [11]; Seqwater: SBM.020.023.0001 at [19].

    88. SBM.030.014.0001 at [10] and [15]. This was the plaintiff’s alternative submission: SBM.010.020.0001 at [1(b)].

    89. SBM.040.008.0001 at [22] to [23] and [57].

  2. The submissions of the plaintiff and the (primary) submissions of SunWater and Seqwater emphasised the joint undertaking that the flood engineers were engaged and the common (negligent) approach they adopted. [90] Hence, in their submissions, one or more of these parties noted: the finding in Rodriguez (No 22) that all the flood engineers should have understood that the operative version of the Manual was a radical departure from its predecessors especially in relation to the use of rainfall forecasts and their central importance, [91] that all of the flood engineers adopted the same flawed approach especially in relation to the use of rainfall forecasts [92] and that each agreed with the approach of the other to the dam operations. [93] In relation to the latter point, that conclusion is supported by the fact that each flood engineer ostensibly adopted the same approach on successive shifts (save possibly in relation to Messrs Tibaldi and Ruffini and the timing of the declaration of a flood event by Mr Malone). [94]

    90. Plaintiff: SBM.010.020.0001 at [7]; Seqwater: SBM.020.023.0001 at [20]; SunWater: SBM.030.014.0001 at [22] and [24(a)]; see Chapter 13 at [348] and [351].

    91. Plaintiff: SBM.010.020.0001 at [9(a)]; SunWater: SBM.030.014.0001 at [24(b) and (c)]; Chapter 4 at [152], [158], [159], [160] and [161].

    92. Plaintiff: SBM.010.020.0001 at [9(b)]; SunWater: SBM.030.014.0001 at [24(s), (t), (u), (v); Chapter 7 at [457]; section 7.16 and 7.17.

    93. Plaintiff: SBM.010.020.0001 at [9(c)]; Seqwater: SBM.020.023.0001 at [20].

    94. See Chapter 6 at [95] to [97], [115] to [130] esp [126] to [127] re Mr Ayre.

  3. The plaintiff contended that, as the flood engineers were engaged in a joint undertaking and adopted the same flawed approach, any attempt to assess the “causal potency” [95] of the conduct of individual flood engineers would have to extend beyond their immediate actions on the shift they conducted. [96] The plaintiff instanced the effect of the modelling undertaken by Mr Ruffini during his shift on the evening of 7 January 2011 which was used in subsequent shifts and found to be inadequate as an example of why an attempt to allocate responsibility to each flood engineer by reference to individual shifts should not be undertaken. [97] Further, it submitted that it was difficult, if not impossible, to determine “the precise ‘immediate’ contribution of each flood engineer to the overall damage” [98] and that “it would be entirely artificial in this case, as well as contrary to the approach stated by the High Court, to treat ‘causative potency’ as entirely determinative of apportionment in this case”. [99] Instead, the plaintiff contended that the “identity of the particular person on duty at any one time is of little or no relevance to the apportionment exercise”. [100] SunWater submitted that it would be “arbitrary to assign responsibility solely based on the happenstance of which engineer happened to be on shift at a particular time, and the amount of water that happened to fall during that shift”. [101]

    95. See Vinidex supra.

    96. SBM.010.020.0001 at [7].

    97. SBM.010.020.0001 at [7]; see Chapter 6, section 6.13 and Chapter 7 at [44].

    98. SBM.010.020.0001 at [11].

    99. SBM.010.020.0001 at [12].

    100. SBM.010.020.0001 at [8] and [10].

    101. SBM.020.023.0001 at [11] to [14].

  4. The difference in outcome suggested by the plaintiff and Seqwater on the one hand, ie one third each, and SunWater on the other, ie 25% for each flood engineer, reflects a difference in the characterisation of the relevant “liability” for the purposes of s 31(1) of the CLA (Qld). The plaintiff and Seqwater’s primary submission fixes upon each defendant’s liability but ignores how that liability arises, ie, they do not address the nature of the “responsibility” that each defendant bears for the loss or damage suffered. In this case each defendant’s liability is a “true vicarious liability”, that is, each defendant is vicariously liable or responsible for breaches by each flood engineer of a duty of care owed by that flood engineer. [102] Even though the plaintiff contended that Seqwater and SunWater owed the plaintiff and group members a non‑delegable duty of care, the breaches of that duty were only said to be the acts and omissions of the flood engineers [103] (and a non-delegable duty was not imposed). [104] At no stage in the proceedings did the plaintiff’s case extend beyond a complaint about each flood engineer’s conduct. [105] In these circumstances to attribute equal liability to each defendant regardless of the number of flood engineers they are vicariously liable for would not be “just and equitable”. To take an extreme example, if there had been eleven flood engineers on duty for an equal number of shifts throughout the flood event and one defendant employed nine flood engineer while the other two employed one each, and assuming all other salient features were equal, it would not be just and equitable to apportion liability equally amongst the three defendants. It follows that, in this respect, I accept SunWater’s submission as to the application of s 31(1) of the CLA (Qld) to this case.

    102. Chapter 11 at [191].

    103. Chapter 11 at [191]; Chapter 12.

    104. Chapter 11 at [140] and [165].

    105. Chapter 11 at [165].

  5. In a related submission, the State sought to distinguish its position from that of the flood engineer it employed, Mr Ruffini. It pointed to the memorandum of understanding (“MOU”) between it and SunWater’s predecessor pursuant to which Mr Ruffini was made available to act as a flood engineer. The MOU was addressed in Chapter 11 of Rodriguez (No 22). [106] The State asserted that the “MOU described Mr Ruffini as the agent of SunWater” in that it provided that “Flood Operations Engineers are to direct flood operations at Somerset Dam, Wivenhoe Dam and North Pine Dam in accordance with the following documents, on behalf of SunWater”. [107] The State contended that for “all practical purposes, Mr Ruffini was subject to controls imposed by Seqwater and SunWater”. [108] However, that submission is directly contrary to the finding in Rodriguez (No 22) that, in performing his functions as DFOE, Mr Ruffini was not the subject of direction or control by either of Mr Ayre or SunWater. [109] It was also found that such capacity for control that Seqwater had flowed from its ownership of the dams [110] but it ceded control via the Manual. [111] As already noted, no part of the plaintiff’s case involved any allegation that extended beyond a complaint about each flood engineer’s conduct. The State also contended that it was relevant to apportionment that it had no “practical ability to direct Mr Ruffini” and he “act[ed] as an engineer exercising his professional judgments concerning specific operational issues”. [112] However, given that this is only a case of true vicarious liability for all defendants, that submission does not advance any attempt by the State to reduce the proportion it should bear relative to the other defendants.

    106. Chapter 11 at [152]; SUN.006.004.2382.

    107. MOU at 2386; SBM.040.008.0001 at [54].

    108. SBM.040.008.0001 at [55].

    109. Chapter 11 at [177].

    110. Chapter 11 at [158].

    111. Chapter 11 at [15].

    112. SBM.040.008.0001 at [55] to [56].

  6. Otherwise leaving aside any dispute about the nature of the “liability” incurred by each defendant, the submissions of the plaintiff, Seqwater and SunWater concerning the joint undertaking of the flood engineers have considerable force. They warrant an acceptance of the plaintiff’s contention that “it would be entirely artificial … to treat ‘causative potency’ as entirely determinative of apportionment in this case”. [113] Further, I address the attempts to mathematically determine the causal potency of each flood engineers’ breaches and conduct next. At this point, it suffices to state that those attempts are either conceptually flawed, in the case of the State, or provide, at best, only limited guidance in making an assessment of each flood engineers relative contribution to the damage caused.

    113. SBM.010.020.0001 at [12].

  7. However, just because causal potency is neither entirely determinative or capable of being mathematically ascertained does not necessarily warrant a rejection of any differentiation between the flood engineers on the basis of the likely overall contribution that their failures made to the damage caused (or by reference to other factors). Even if the comparative causal contributions of several tortfeasors cannot be quantified that does not mean the Court is obliged to apportion their respective contributions equally. [114] There may still be conclusions that can be drawn about the “relative importance of the acts of the parties in causing the damage”. [115] Thus, consistent with the example cited in [50], I do not accept that it would be just and equitable to fix a flood engineer who, say, only performed one shift very late in the flood event with the same proportion of liability as that attributed to, say, a flood engineer who performed the vast majority of shifts, all other matters being equal. Equally, I accept that it is necessary to have regard to the fact that it was a joint undertaking and the flood engineers adopted a common approach when considering the extent of the departure from the relevant standard and the likely causal contribution of their failings as part of an assessment of the proportion of liability attributed to that flood engineer.

    114. James Hardie & Co Pty Ltd v Roberts (1999) 47 NSWLR 425; [1999] NSWCA 314 at [92] and [101] per Sheller JA with whom Spigelman CJ and Meagher, Stein and Giles JJA agreed.

    115. Podrebersek at 494.

A.   Save for the reference to “a failure properly to conduct Flood Operations at Somerset Dam and Wivenhoe Dam”, [246] paragraph 142A of the Fifth Further Amended Statement of Claim is an appropriate formulation of the risk of harm.

246. See Chapter 11 at [34].

Q.3   Did any of Seqwater, SunWater or any of the Flood Operations Engineers owe a duty or duties of care to a class comprising the plaintiff and the Group Members to exercise reasonable care in the conduct of flood operations at Somerset Dam and Wivenhoe Dam so as to avoid or minimise the Risks of Harm?

A:   Each of Seqwater and the Flood Operation Engineers owed such a duty of care to a class that included the plaintiff and group members. SunWater owed such a duty to a class that included the plaintiff and group members but only in respect of the supply of flood management services under the “Service Level Agreement - Flood Management Services” dated 13 October 2009.

Q.4   Does the answer to Question 3 differ depending:

a.   on whether the Risk of Harm was a risk of physical damage to real property?;

A.   No.

b.   on whether the Risk of Harm was a risk of physical damage to personal property?;

A.   No.

c.   on whether the Risk of Harm was a risk of physical damage to real or personal property located near the Brisbane River, between Wivenhoe Dam and Moggill?;

A.   No.

d.   on whether the Risk of Harm was a risk of physical damage to real or personal property located near the Brisbane River, between Moggill and the mouth of the river?;

A.   No

e.   on whether the Risk of Harm was a risk of physical damage to real or personal property located near the Bremer River?;

A.   No

f.   on whether the Risk of Harm was a risk of physical damage to real or personal property located near Lockyer Creek?.

A.   No.

Q.5   If the answer to Question 3 is yes, what was the applicable standard of care for:

a.   Seqwater;

b.   SunWater; and

c.   each of the Flood Engineers?

A.   In respect of Seqwater and SunWater, unnecessary to answer. In respect of the flood engineers, the standard of care is that of the reasonably competent flood engineer.

Q.6   Did Seqwater breach any duty of care that it is found to have owed in the manner pleaded?

A.   On the assumption that this question is directed to a breach of a non-delegable duty, does not arise.

Q.7   Did SunWater breach any duty of care that it is found to have owed in the manner pleaded?

A.   On the assumption that this question is directed to a breach of a non-delegable duty, does not arise.

Q.8   Did Mr Malone and/or Mr Tibaldi breach any duty of care that they are found to have owed in the manner pleaded?

A.   Yes, both of them in some respects.

Q.9   Did Mr Ayre breach, in the manner pleaded, any duty of care that he is found to have owed?

A.   Yes, in some respects.

Q.10   Did Mr Ruffini breach any duty of care that he is found to have owed in the manner pleaded?

A.   Yes, in some respects.

Q.11   In carrying out flood operations in the period 2 January 2011 to 11 January 2011 (the Period), did Seqwater, SunWater and the Flood Engineers act in a way that was so unreasonable that no authority having the function or power in question could properly consider the acts or omissions to be a reasonable exercise of the function or power within the meaning of s 36(2) of the Civil Liability Act 2003 (Qld) (“Qld CLA”) or s 43A(3) of the Civil Liability Act 2002 (NSW) (“NSW CLA”)?

A.   This question does not arise.

Q.12 In carrying out flood operations in the Period did Seqwater, SunWater and each of the Flood Engineers act in a way that was widely accepted by peer professional opinion by a significant number of respected practitioners in the field as competent professional practice within the meaning of s 22 of the Qld CLA or s 50 of the NSW CLA?

A.   In respect of Seqwater and SunWater, the question does not arise. In respect of the flood engineers, no.

Q.13   In the circumstances, would a reasonable person, in the position of the Flood Engineers, have operated the Dams substantially in accordance with any of the simulations A to J of the Response Report?

A.   A reasonably competent flood engineer in the position of the flood engineers who inherited the circumstances prevailing as at midnight on 2 January 2011 would have, at a minimum, made flood releases substantially in accordance with Dr Christensen’s Simulation C up to and including 9 January 2011 and made flood releases substantially in accordance with that simulation thereafter. [247]

247. Chapter 10 at [188].

A reasonably competent flood engineer in the position of the flood engineers who inherited the circumstances prevailing as at midnight on 8 January 2011 would have made flood releases for the balance of the January 2011 Flood Event substantially in accordance with Dr Christensen’s Simulation F as varied by Table 18 to Mr Ickert’s Response Report dated 30 November 2017. [248]

248. Chapter 10 at [56].

Q.14   In failing to operate the Dams substantially in accordance with any of simulations A to J in Dr Christensen’s Response Report:

a.   did Seqwater, SunWater or any of the Flood Engineers breach any pleaded duty of care?

b. did Seqwater, SunWater or any of the Flood Engineers act in a way that was so unreasonable that no authority having the function or power in question could properly consider the acts or omissions to be a reasonable exercise of the function or power within the meaning of s 36(2) of the CLA or s 43A(3) of the NSW CLA?

c. did Seqwater, SunWater or any of the Flood Engineers act in a way that was widely accepted by peer professional opinion by a significant number of respected practitioners in the field as competent professional practice within the meaning of s 22 CLA or s 50 NSW CLA?

A.   These questions do not arise.

Q.15   If Mr Malone and Mr Tibaldi, or one of them, breached their duty of care, is Seqwater vicariously liable for the breach?

A.   Yes.

Q.16   If Mr Ayre breached his duty of care, is SunWater vicariously liable for the breach?

A.   Yes.

Q.17   If Mr Ruffini breached his duty of care, is SunWater or the State vicariously liable for the breach?

A.   The State and not SunWater.

Q.18   Did any breach of duty of care that is found to have occurred cause flooding or greater flooding downstream of Wivenhoe Dam than would have occurred otherwise?

A.   The breaches of duty of each flood engineer caused greater flooding downstream of Wivenhoe Dam than would have occurred otherwise.

Q.19   Was the measure of that flooding or greater flooding that determined by the modelling of Dr Mustafa Altinakar?

A.   Dr Altinakar’s modelling is not the determinative measure of that flooding or greater flooding.

Q.20   Does the modelling of [Dr] Altinakar determine what the level of flooding would have been at locations downstream of Wivenhoe Dam if Wivenhoe and Somerset Dams had been operated substantially in accordance with Simulations A to J in Dr Christensen’s Response Report?

A.   Dr Altinakar’s modelling is not determinative of that level of flooding.

Q.21   Did the release of water from Wivenhoe Dam onto land in which the Subgroup Members held an interest in the period 9 January 2011 to 19 January 2011 constitute a private nuisance by Seqwater, SunWater and, or alternatively any of the Flood Engineers (Private Nuisance)?

A.   No.

Q.22   Did the release of water from Wivenhoe Dam onto land in which the Subgroup Members held an interest in the period 9 January 2011 to 19 January 2011 constitute a trespass by Seqwater, SunWater and, or alternatively any of the Flood Engineers (Trespass)?

A.   No.

Q.23   Do the defences of statutory authority and necessity provide a defence to Private Nuisance and Trespass?

A.   Not in this case.

Q.24   If Mr Malone and Mr Tibaldi, or one of them, committed the Private Nuisance or Trespass, is Seqwater vicariously liable for that Private Nuisance or Trespass?

A.   Does not arise.

Q.25   If Mr Ayre committed the Private Nuisance or Trespass, is SunWater vicariously liable for that Private Nuisance or Trespass?

A.   Does not arise.

Q.26   If Mr Ruffini committed the Private Nuisance or Trespass, is SunWater or the State vicariously liable for that Private Nuisance or Trespass?

A.   Does not arise.

Q.27 Is the State liable, and if so to what extent, by operation of s 374 of the Water Supply (Safety and Reliability)Act 2008 (Qld) (as it then stood)?

A.   No.

Q.28 If damages are recoverable against any of the defendants, are any of the claims ‘apportionable claims’ within the meaning of s 28(1) of the Qld CLA or alternatively s 34(1) of the NSW CLA?

A. The plaintiff’s claim in negligence is an “apportionable claim” within the meaning of s 28(1) of the Civil Liability Act 2003 (Qld).

Q.29 If yes to Question 28, what is the appropriate amount of any judgment against any defendant, having regard to s 31 of the Qld CLA or alternatively s 36(1) of the NSW CLA?

A.   The appropriate “amount”, in the sense of the proportion of a judgment sum, in respect of each defendant is as follows:

(i) First Defendant: 50%;

(ii) Second Defendant: 30%;

(iii) Third Defendant: 20%.

Q.30   What are the respective rights and liabilities as between the defendants in the event that one or more of them is liable to the plaintiff or one or more Group Members?

A.   Leaving aside any contribution to pay the plaintiff’s or group members’ costs, none of the defendants are liable to contribute to the amounts that any other defendant is required to pay to the plaintiff or group members.

Q.31   Should money received by the plaintiff and Group Members from the Queensland Rural Adjustment Authority (QRAA) as the Queensland Government’s administrator of schemes of governmental support established by the Rural and Regional Adjustment Act1994 (Qld), be taken into account in the assessment of any damages, and if so, in what way?

A.   In respect of the plaintiff:

  1. to the extent that the plaintiff’s claim for damages includes the cost of replacing and repairing store equipment then an amount of up to $4598.95 should be deducted from its damages but not otherwise and such deduction is to occur before any apportionment of the amount of damages to be paid by each defendant to the plaintiff;

  2. to the extent that the plaintiff’s claim for damages includes the cost of replacing or repairing store equipment then an amount of up to $2937.93 should be deducted from its damages but not otherwise and such deduction is to occur before any apportionment of the amount of damages to be paid by each defendant to the plaintiff; and

  3. to the extent that the plaintiff’s claim for damages includes the cost of replacing lost or damaged stock then an amount of up to $17,463.22 should be deducted from its damages but not otherwise and such deduction is to occur before any apportionment of the amount of damages to be paid by each defendant to the plaintiff.

In respect of group members who received grants from the QRAA under the scheme created by Part 29 of the Rural and Regional Adjustment Regulation 2000 (the “Regulation”) for no more than $5000, then to the extent that they can otherwise recover in these proceedings costs of the kind referred to in subclause 288(2) of the Regulation the grant should be deducted from their damages but not otherwise and such deduction is to occur before any apportionment of the amount of damages to be paid by each defendant to that group member.

In respect of group members who received grants from the QRAA under the scheme created by Part 29 of the Regulation of more than $5000, then to the extent that they can otherwise recover in these proceedings the costs the subject of the material provided to comply with clause 291 of the Regulation, then the grants should be deducted from their damages but not otherwise and such deduction is to occur before any apportionment of the amount of damages to be paid by each defendant to that group member.

In respect of group members who received grants under the Rural and Regional Adjustment Act but not under the scheme created by Part 29 of the Regulation, unnecessary to answer.

Q.32   Are the plaintiff and Group Members entitled to damages for their own labour and/or the labour of volunteers in carrying out rectification and repairs?

A.   In respect of the plaintiff, yes. In respect of the group members and assuming that the question relates to rectifications and repairs to real or personal property that is owned or leased by them, yes. Otherwise unnecessary to answer.

Q.33   If yes, is the entitlement to damages based on the reasonable commercial cost of those services or some other measure?

A.   The quantification of the loss is based on the reasonable commercial cost of those services.

Q.34 Does the commencement or maintenance of these proceedings mean that group members have “brought” an “action … founded … on tort” within six years from the date on which their cause of action arose within the meaning of s 10(1)(a) of the Limitation of Actions Act 1974 (Qld)?

A.   Yes.

Q.35 If the answer to 34 is “no” in respect of any or all group members, does s 182 of the Civil Procedure Act 2005 (NSW) (or any equivalent provision) operate to suspend the limitation period applicable to group members’ claim in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater & Ors (NSW Supreme Court No 2014/200854)?

A.   Does not arise.

Q.36 For the purposes of formulating a judgment conforming to s 179(a) of the Civil Procedure Act 2005 (NSW), which answers to each question above, alternatively which findings made for the purposes of answering each or any question above, bind:

(a)   the plaintiff?

(b)   any and if so which Sample Group Members?

(c)   any and if so which Group Members?

(d)   all Group Members?

A.   The plaintiff, the sample group members and the defendants are bound by the above answers and all the findings in this judgment. In respect of the remaining group members, not necessary to answer at this stage.

Q37 (a) Are the plaintiff and group members entitled to pre-judgment interest on damages at default Court rates?

A:   Inappropriate to answer.

(b)   Does the circumstance that group members received gratuitous goods or services affect their entitlement to an award of pre-judgment interest at default Court rates?

A:    To the extent that group members recover for damage to their real and personal property in amounts calculated by reference to the commercial cost of the volunteer labour of others that repaired that damage, then they will not receive an award of interest on that amount for the period prior to the date of judgment. Otherwise inappropriate to answer.

Q38   Are the plaintiff and the group members entitled to pre-judgment interest on heads of damage for gratuitous services?

A:    To the extent that group members recover for damage to their real and personal property in amounts calculated by reference to the commercial cost of the volunteer labour of others that repaired that damage, then they will not receive an award of interest on that amount for the period prior to the date of judgment. Otherwise inappropriate to answer.

**********

Endnotes

Amendments

29 May 2020 - [88] - Two commas removed from second sentence.

Decision last updated: 29 May 2020

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Cases Cited

27

Statutory Material Cited

5

Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657
Powercor Australia Ltd v Thomas [2012] VSCA 87
Powercor Australia Ltd v Thomas [2012] VSCA 87