Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 5)

[2015] NSWSC 1771

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 5) [2015] NSWSC 1771

Hearing dates:

19 November 2015

Date of orders:

30 November 2015

Decision date:

30 November 2015

Jurisdiction:

Common Law

Before:

Beech-Jones J

Decision:

The Court orders that:

 

(1)   The Plaintiff be granted leave to amend the Further Amended Statement of Claim by adding the words “and Group Members” after the words “the plaintiff” in subparagraph 346(c);

 

(2)   The Plaintiff file and serve a Second Further Amended Statement of Claim within 7 days;

 

(3)   Any requirement for the filing of further defences in response to the Second Further Amended Statement of Claim be dispensed with;

 

(4)   On or before 24 January 2016 the plaintiff notify the defendants of the following selected group member whose claims will be determined in whole or in part at the first hearing:

 

   (a)   a group member who only suffered loss of the kind referred to in [6(b)] of the Further Amended Statement of Claim;

 

   (b)   a group member who only suffered loss of the kind referred to [6(c)] of the Further Amended Statement of Claim;

 

   (c)   a group member who held an interest in land and whose use or enjoyment of that land was interfered with by reason of the inundation of other land located downstream of Wivenhoe Dam by flood water from the Brisbane River or Bremer River and their tributaries in the period 9 January 2011 to 24 January 2011 such that they suffered loss and damage;

 

   (d)   a group member with a claim for loss and damage that arises from the inundation of land by water from Lockyer Creek;

 

   (e)    a group member with a claim for loss and damage that arises from the inundation of land by water from the Bremer River;

 

   (f)   a group member with a claim for loss and damage that arises from the inundation of land above Moggill.

 

(5)   On or before 10 December 2015 the plaintiff serve on the defendants revised proposed opt out notices.

 

(6)   On or before 10 December 2015 the plaintiff serve on the defendants a revised proposed set of common questions.

 

(7)   On or before 22 January 2016 the defendants serve on the plaintiffs any revised version of the proposed opt out notices.

 

(8)   On or before 22 January 2016 the defendants serve on the plaintiffs any revised version of the proposed set of common questions.

 (9)   On or before 5 February 2016 the parties confer in relation to the form of the proposed opt out notices and the proposed set of common questions.

Catchwords:

CLASS ACTION – Brisbane floods – necessity to plead claim on behalf of all group members – common questions to be determined – approach – questions not to be substituted for pleading – question not to preclude parties ultimately submitting no common answer – questions not to be subject to construction arguments – sub-group and sample members of group – duty of care – whether plaintiff should identify sample group member who suffered particular categories of loss – whether sample group member from particular locations should be identified – common questions concerning breach – specification of appropriate standard – common questions concerning claim for nuisance and trespass – form of opt out notices.

Legislation Cited:

- Civil Liability Act 2003 (Qld) – s 9(1)
- Civil Procedure Act 2005 (NSW) – s 158(2), s168
- Water Supply (Safety and Reliability) Act 2008 (Qld) – s 374

Cases Cited:

- Bray v F Hoffmann-La Roche Ltd [2003] FCAFC 153; 130 FCR 317
- Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649
- Cash Converters International Limited v Gray [2014] FCAFC 111; 223 FCR 139
- Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27
- Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3) [2001] VSC 372
- Johnston v Endeavour Energy [2015] NSWSC 1117
- King v GIO Australia Holdings Ltd [2000] FCA 617; 100 FCR 209
- McMullin v ICI Australia Operations Pty Ltd (1998) 84 FCR 1
- McMullin v ICI Australia Operations Pty Ltd [1997] FCA 541; 72 FCR 1
- McMullin v ICI Australia Operations Pty Ltd [1997] FCA 1298
- Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 5) [2012] VSC 66; 35 VR 615
- Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; 170 ALR 487
- Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater [2014] NSWSC 1565
- Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 3) [2015] NSWSC 838
- Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 4) [2015] NSWSC 1352
- Sutherland Shire Council v Heyman [1985] HCA 41; 157 CLR 424
- Uniting Church in Australia Property Trust (NSW) v Miller; Miller v Lithgow City Council [2015] NSWCA 320
- Wong v Silkfield Pty Ltd [1999] HCA 48; 199 CLR 255
- Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515

Category:

Procedural and other rulings

Parties:

Rodriguez & Sons Pty Ltd – Plaintiff
Queensland Bulk Water Supply Authority (t/as Seqwater) – First Defendant
SunWater Limited – Second Defendant
State of Queensland – Third Defendant

Representation:

Counsel:
S.G. Finch SC, R.A. Yezerski, N.D. Oreb – Plaintiff
B. O’Donnell QC, D. Klineberg – First Defendant
D. Williams SC, J. Neal – Second Defendant
G.A. Thompson QC, J.M. Horton QC, E.J. Morzone – 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. These proceedings were listed for a case management conference on 19 November 2015. On that day the parties debated the content of the common questions of law and fact that are to be determined at the first substantive hearing of these proceedings, as well as certain issues concerning the form of the opt out notices that are to be sent to group members. This judgment deals with those issues. As I will explain, one issue that emerged during the debate over common questions concerned the desirability of the Court determining all or part of the claims of certain group members other than the plaintiff at the first substantive hearing of the proceedings. For the reasons set out below I consider that it should.

Background

2. The nature of the proceedings and the structure of an earlier version of the statement of claim were outlined by Garling J in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater [2014] NSWSC 1565 at [1] to [27] (“Rodriguez No 1”). I will not repeat that discussion. Since Rodriguez the statement of claim has been amended. The effect of those amendments was discussed in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 3) [2015] NSWSC 838 (“Rodriguez No 3”).

3. Further, as a consequence of the difficulties experienced in serving the hydrological model referred to in Rodriguez No 3, the scheduled date for the hearing of the plaintiff’s claim and the common questions, namely 18 July 2016, was vacated: Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 4) [2015] NSWSC 1352 (“Rodriguez No 4”). A new date is yet to be allocated, but it is likely to be some time in 2017.

Definition of group

4. It is necessary to note the definition of group members set out in [6] of the Further Amended Statement of Claim (“FASOC”). Four overlapping subclasses of group members are identified. The first is those who held an “interest in land (whether in the nature of freehold title, lease or otherwise)” and who “suffered loss and damage … by reason of the inundation of that land” by flood water from the Brisbane or Bremer rivers in the period 9 January 2011 to 24 January 2011 (FASOC, [6(a)(i)]).

5. The second is those who held an interest in land and whose use or enjoyment of that interest was interfered with by reason of the inundation of that land or other land located downstream of Wivenhoe Dam by flood water from the Brisbane or Bremer Rivers in that period such that they suffered loss or damage (FASOC, [6(a)(ii)]). The FASOC pleads this sub-group as having a cause of action in nuisance and, in some cases, trespass.

6. The third is those who “owned personal property” in the period 9 January 2011 to 24 January 2011 which was damaged or destroyed by the inundation of land on which that property was located by flood water from either of the two rivers in that period (FASOC, [6(b)]).

7. The fourth is those who regularly conducted a business or enterprise downstream of Wivenhoe Dam and “who suffered economic loss by reason of the inundation by flood water” from either of the two rivers in the period 9 January 2011 to 24 January 2011 (FASOC, [6(c)]).

8. Further, each of these four categories is limited to persons who either entered into a litigation funding agreement with a particular litigation funder by a particular date in respect of any claim for loss or damage (excluding any claim for personal injury) arising out of the factual matters pleaded in the FASOC (FASOC, [6(d)(i)]) or have been indemnified for that loss by an insurer who has entered into such a funding agreement by a certain date (FASOC [(6(d)(ii)]).

Pleading issue

9. At the outset I should note one issue that was raised at the case management conference with the FASOC that was filed and served following Rodriguez No 3. In Rodriguez No 3 at [37] to [42] I rejected an objection raised by the first defendant, Queensland Bulk Water Supply Authority trading as Seqwater (“Seqwater”), to leave to amend being granted on the basis that there was a disparity between the definition of the group members and the pleaded case. In particular I rejected a contention that the group was too widely defined because it included a large group of persons who were inundated by water but whose flooding was unconnected to the negligence pleaded in the (then) proposed amended statement of claim. In rejecting that objection I was concerned by any proposal to redefine the class in such a manner that would require potential group members to conduct their own causal inquiry into the flooding on their land before making a decision to opt in or opt out (Rodriguez No 3 at [42]). In the course of rejecting the proposal to redefine the class I stated, inter alia, that (at [40]): “... there is certainly no strict requirement that the class be defined by reference to only those persons who in fact have the cause of actions pleaded in the relevant statement of claim” (emphasis added).

10. In submissions filed prior to the case management Senior Counsel for Seqwater, Mr O’Donnell QC, drew the Court’s attention to various decisions which confirm that it must be apparent from the pleading that every member of the group has, or at least properly asserts, a “claim” (King v GIO Australia Holdings Ltd [2000] FCA 617; 100 FCR 209 at [30]; Cash Converters International Limited v Gray [2014] FCAFC 111; 223 FCR 139 at [32]) (“Cash Converters”), although it is not necessary that they all have a claim against every defendant (Civil Procedure Act 2005, s 158(2); Cash Converters; cf Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; 170 ALR 487).

11. In this case the FASOC pleads the existence of a duty of care owed to each group member, a breach of that duty of care and a consequential causing of flooding or greater flooding downstream of the Wivenhoe Dam. However the statement of claim only pleads that the named plaintiff, Rodriguez & Sons Pty Ltd (“Rodriguez & Sons”), but not the other group members, suffered loss and damage as a result. The definition of the class does not expressly assert that either. Hence Mr O’Donnell QC submitted that the statement of claim was defective.

12. The plaintiff’s written submission submitted that such an assertion is implicit in that the definition of the class only includes persons who entered into a litigation funding agreement in respect of any claim for loss or damage arising out of the matters pleaded in the FASOC or have been indemnified for that loss by an insurer who has entered into a funding agreement. They also contended that it is not necessary to plead a cause of action that encompasses every group member so as to constitute a claim (citing Bray v F Hoffmann-La Roche Ltd [2003] FCAFC 153; 130 FCR 317).

13. It is not necessary to consider this further because, without conceding the point, Senior Counsel for the plaintiff, Mr Finch SC, sought and was granted leave to amend the substantive part of the pleading by adding the words “and Group Members” after the words “the plaintiff” in [346(c)] of the FASOC. At present [346(c)] of the FASOC pleads the causing of loss or damage to the plaintiff from the flooding or greater flooding alleged to result from the defendants’ negligent operation of the dam. This amendment addresses the point made by Mr O’Donnell QC without affecting the definition of the group.

Common questions – approach

14. It is a prerequisite to the commencement of any class action that the claims of the relevant persons “give rise to a substantial common question of law or fact” (CPA; s 157(1)(c)). Such a question must be “real or of substance” but it need not be one that is likely to resolve the claims of groups wholly or to any significant degree (Wong v Silkfield Pty Ltd [1999] HCA 48; 199 CLR 255 at [28]) (“Silkfield”). None of the defendants have to date contended that this requirement is not met. The present issue is a more practical one although it is informed by the approach in Silkfield, namely, in addition to the plaintiff’s own claim, what other questions of law and fact should be addressed at the “first” substantive hearing of these proceedings? The reference to the “first” substantive hearing reflects the position that, failing agreement, the completion of class action, especially one of this magnitude, may require a number of hearings. Thus, in one of the first class actions, namely McMullin v ICI Australia Operations Pty Ltd [1997] FCA 541; 72 FCR 1, Wilcox J first heard and determined a number of common issues of fact and law governing the respondent’s liability (id), then heard a number of “test cases” on damages ([1997] FCA 1298) and thereafter delegated the balance of the claims for determination by a registrar ((1998) 84 FCR 1).

15. The identification of such questions obviously affords the parties procedural fairness in that they know in advance what issues of fact and law they should be prepared to litigate. The utility of identifying as many such questions was stated by Gillard J in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27 at [42] (“Johnson”):

“In my opinion, it is important that the Court conducts group proceeding litigation in a practical manner and ensures that as many questions of law and fact having a degree of commonality are decided. Once the group proceeding is completed and if an individual claim is to proceed, the individual litigant has the benefit of findings of law or fact to assist him in obtaining relief. It follows that a group proceeding is not concerned with the complete cause of action of a claimant, in the sense that all elements of the cause of action and issues raised are determined in the proceeding. The Court considers and determines the common questions of law and fact.” (emphasis added)

16. This approach is apposite to the circumstances of this case. To the Court’s observation the resources that will be devoted to the resolution of these proceedings are likely to be prodigious. The reassembly of the respective armadas for subsequent hearings will no doubt present logistical difficulties especially if the relevant expert witnesses must return. An approach that involves a determination of as many questions that are of utility to the resolution of the group members’ claims is to be preferred. Such an approach is more likely to facilitate an early resolution either by settlement or otherwise. None of the parties suggested to the contrary.

17. At this point three further matters should be noted.

18. First, it is notable that Gillard J referred to questions of law and fact having a “degree of commonality”. This reflects the possibility that a determination of such a question may lead to answers that, in their application to each claimant, are still fact specific. This will not deny its character as a common question.

19. Secondly in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3) [2001] VSC 372 (“Johnson No 3”) at [83] Gillard J had referred to the posing of a question concerning causation, and stated that there will be “many group members whose claims will raise common issues of fact and law in relation to causation”. In so stating his Honour clearly contemplated that the common questions being considered at this point need not be common to all group members. This is expressly recognised by s 168 of the Civil Procedure Act 2005 which provides:

“168 Determination of questions where not all common

(1)   If it appears to the Court that determination of the question or questions common to all group members will not finally determine the claims of all group members, the Court may give directions in relation to the determination of the remaining questions.

(2)   In the case of questions common to the claims of some only of the group members, the directions given by the Court may include directions establishing a sub-group consisting of those group members and appointing a person to be the sub-group representative party on behalf of the sub-group members.” (emphasis added)

20. As the relevant question need not be common to all group members it follows that the more relevant inquiry is how useful the answer to a particular question may be compared with the inconvenience of litigating it at the first hearing.

21. Third, given that the exercise is one of case management it follows that the formulation of the common questions is not to be weighed down in technical arguments and neither should they be taken as precluding any party from raising any reasonably arguable point mentioned in the pleading. The posing of these question is not the same exercise as the identification of separate questions under Uniform Civil Procedure Rule 28.2. Thus in Johnson No 3 at [81] Gillard J stated:

“I propose to state questions, which will be considered and determined at the hearing. The questions are general, are not to be the subject of construction arguments, are to be applied in a common sense way, and will be subject to change if the circumstances demand it. But the circumstances would have to be exceptional. As I have said, and I repeat, one must approach a group proceeding in a practical way and decide as many common questions of law and fact as possible.”

22. This approach will apply to the posing of the common questions in this case. At the risk of stating the obvious, it follows that the identification of a common question will not act as some form of substitute for the pleading, is not to be taken as an indication that any particular legal test implicit in the question is the correct one, and will not preclude any party from submitting that a particular question cannot be answered at a level of generality above the specific facts of any particular claim that is being pursued at the first hearing.

Plaintiff’s common questions

23. In [10] of the FASOC the plaintiff pleads what it contends are 32 common issues of fact and law that arise in the proceedings. These consist of questions concerning SunWater and Seqwater’s legal responsibility for the operation of the dam (10(a) - (d)), the existence of a duty of care to group members (10(e) - (h)), the actions of the flood engineers responsible for the Wivenhoe Dam (10(i)), allegations of breach of the relevant duties of care (10(j) - (s)), the causal consequences of those alleged breaches in terms of the storage capacity of Lake Somerset and Lake Wivenhoe (10(t)) and the occasioning of flooding and downstream flooding (10(t) - (w)), whether any duty of care owed by Seqwater and SunWater was non-delegable (10(x) - (y)), certain issues that arise in respect of the nuisance and trespass claims (10(z) to 10(ee)), and finally the effect of s 374 of the Water Supply (Safety and Reliability) Act 2008 (Qld) on the plaintiff’s claims (10(ff)). There was no real dispute over the first set of questions (i.e. 10(a) to (d)), but there was over the remainder.

Common questions – duty of care, forms of harm and further claimants

24. The most significant issue that was debated between the parties concerned the interrelationship between the form of loss suffered by Rodriguez & Sons (and where it was suffered) and the common questions that sought answers in respect of whether a duty of care was owed to group members who suffered different types of loss and at different locations downstream of the Wivenhoe Dam. I will deal with the debate concerning the form of harm suffered first.

25. To outline how these issues arise, it is necessary to return to the FASOC. It pleads that Rodriguez & Sons conducted a retail sporting goods and clothing store at premises it leased in a shopping centre in Fairfield.  Fairfield is located approximately 5 kilometres south of Brisbane’s central business district and is adjacent to the Brisbane river. The particulars to [347] of the FASOC plead that the premises were inundated with water on or about 12 January 2011 to 14 January 2011, and the business was closed until 26 May 2011. Its loss and damage is particularised as damage to fixtures and fittings, loss of sales and profits, repair and restoration costs as well as hiring and storage costs.

26. Thus Rodriguez & Sons falls squarely into the first category of group members referred in [4] (but also falls within the other categories). It follows that in so far as the existence, scope and content of any duty of care owed to Rodriguez & Sons is concerned its claim will be determined on the basis that it suffered or claims to have suffered property damage and economic loss consequential on such damage.

27. The FASOC pleads the existence of a number of risks of harm arising from a failure to properly conduct flood operations at the Somerset and Wivenhoe dams, including a risk of harm to real or personal property, a risk of interfering with the use and enjoyment of land and a risk of impeding or disrupting the commercial activities of businesses or enterprises located downstream of Wivenhoe dam (Civil Liability Act 2003 (Qld), s 9(1)). The FASOC pleads that Seqwater, the second defendant, SunWater Limited (“SunWater”) and the Flood Engineers who operated the dams owed various duties of care “to Group Members” to avoid or minimise each of those risks.

28. One issue raised by all the defendants in relation to the plaintiff’s version of the common questions was that insofar as they related to forms of harm other than those in fact suffered or claimed to be suffered by Rodriguez & Sons then the Court will be addressing questions that are purely hypothetical or, at the very least, will be decided in such a factual vacuum that they will lack utility. It was submitted that, as there is at least a reasonable likelihood that there will be a different answer to the questions posed as to the existence of a duty depending on the form of harm suffered (Sutherland Shire Council v Heyman [1985] HCA 41; 157 CLR 424 at 486-487 per Brennan J), a common question should not be posed at a level that addresses all the forms of harm.

29. Both Mr O’Donnell and Senior Counsel for SunWater, Mr Williams SC, expanded upon this by identifying further matters of distinction between group members. They referred to the multifactorial analysis apposite to ascertaining the existence of a duty of care described by Allsop P in Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649 at [102] to [105] which directs attention to the entire relationship between the parties, including such matters as foreseeability of harm, reliance, vulnerability, proximity and, at least in relation to so called pure economic loss, the potential indeterminacy of the class of claims. Thus, for example, in relation to economic loss Mr Williams SC pointed to the ability of businesses to protect themselves from various forms of loss (such as obtaining rent abatement clauses) which in turn affects any analysis of their vulnerability (see Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515) (“Woolcock”). He also pointed to the different types of pure economic loss that could be claimed such as lost profits from a retail business marooned by the inundation of adjoining land or the loss of profit on a single transaction that was abandoned due to the inconvenience caused by the flooding. In relation to property damage he contrasted immovable property with movables and submitted that the analysis in relation to the latter may be different as their owners are less “vulnerable” in the sense discussed in Woolcock.

30. To deal with the point noted in [28] Mr O’Donnell QC submitted that it was appropriate to identify sub-groups of members to represent the various different categories of loss suffered by members (as well as different geographical areas which are addressed below). Mr Williams SC submitted that “it would be desirable that there be a range of plaintiffs, or sub-group members” to test the existence of a duty of care and that they address some of the examples that were referred to in the submission just noted (in [29]).

31. In response, Mr Finch SC submitted that it was sufficient to pose a question as to the duty of Seqwater, SunWater and the flood engineers to take reasonable care to avoid or minimise all the forms of harm identified even if Rodriguez & Sons’ did not solely claim the forms of loss referred to in [6(b)] or [6(c)] of the FASOC. He submitted that the potential differences that arose from the multifactorial analysis were more apparent than real. He also submitted that the circumstance that a group member did not heed a warning and take steps such as to move property were matters that went to contributory negligence and were largely irrelevant to any determination of the existence and scope of a duty of care arising out of a mass flood event of the kind in issue here. It was submitted that none of the points raised robbed the proposed questions of their commonality and that to adopt the defendants’ approach would in effect turn a class action into a series of test cases.

32. The power to identify sub-groups and appoint their own sub-group representative party is specifically contemplated by s 168 of the CPA set out above (at [19]). In addition an analogous practice of using sample group members in class actions has also emerged, the utility of which was described by Forrest J in Matthews v SPI Electricity Pty Ltd & Ors (Ruling No 5) [2012] VSC 66; 35 VR 615 (“Matthews”) at [4] as follows:

“In practice, notwithstanding that there may be a commonality in the alleged cause of the harm occasioned to the group members, a trial focusing solely on the representative plaintiff’s claim may not cover the claims of all group members. To address this problem, a practice has developed to permit other group members to give evidence at trial as to relevant facts concerning his or her claim. This evidence then enables the court to make findings and give judgment in relation to those other claims, which enables binding determinations to be made in respect of most, if not all, group members. It is helpful, I think, to see how this process has been given effect in other cases.”

33. After reviewing other cases that utilised this method, including McMullin and Johnson Tiles, Forrest J noted that the definition of the group in Matthews included claimants who suffered four types of loss but noted that a determination of the representative party’s claim would not cover all the types of loss that were identified (at [12]) and there was also the possibility that “different considerations in relation to questions of duty, breach, damage and causation … can arise in areas geographically distant from her property” (at [13]). His Honour ordered the plaintiff in that case to identify a claimant who suffered each category of loss that was identified in the definition of the group, as well as one who suffered damage “as a result of the fire affecting an outlying area” (at [16]). Further his Honour identified two points of difference between sample group members on the one hand and sub-group representatives on the other, namely that with sample group members the Court would not necessarily proceed to determine the entirety of their claims (at [20] to [32]) and that sub-group representative parties may be liable for costs whereas a sample group member is not (at [33] to [44]).

34. At the case management conference of these proceedings on 19 November 2015 I advised the parties that, if I determined that some group members other than the plaintiff should be brought forward to have part or all of their claims determined at the first hearing, I would not decide at this point whether there should be subgroups or sample group members in the sense discussed by Forrest J in Matthews. In my view that issue need not be addressed until the group members have been identified and the nature of their claims is known.

35. I return to the submissions of the parties concerning whether more group members should be identified with some part or all of the claims to be determined at the first hearing. To the extent that any of those submissions invites the Court to embark on a determination of the competing cases in relation to the existence of a duty of care, then it is an invitation that should be rejected. This is not the appropriate occasion to make any such determination. Instead the relevant question is whether I am satisfied that there is a sufficient basis to conclude that directing the plaintiff to bring forward a group member having particular characteristics for all or part of their claim to be determined at the first hearing is likely to be of substantial benefit to the determination of group members’ claims.

36. Insofar as the defendants contend that there should be claimants that reflect the categories of loss identified in the definition of the class, then I accept their submissions. At this point there is a sufficient basis to conclude that the determination of the existence of a duty of care may depend on the form of harm suffered so as to warrant such claimants being brought forward. Without at least one such claimant whose loss solely answers the description in each of [6(b)] and ([6(c)] of the FASOC, then a determination of the existence of whether a duty of care is owed to such persons in the course of determining the plaintiff’s claim will at best be hypothetical and at worst may not be determinable. The number of group members who only fall within either of [6(b)] or [6(c)] is not known but given the size of the class there is no reason to believe it is negligible. The bringing forward of evidence concerning the facts and circumstances of group members falling within those classes is unlikely to cause much disruption to the first hearing.

37. However beyond this I am not relevantly satisfied at this point that there is any utility in identifying further claimants to reflect the points made by Mr O’Donnell QC and Mr Williams SC noted in [29]. One can accept the possibility that different outcomes might ensue depending on the form of interest in land that a group member possessed, whether the property damaged was movable or immovable, or the form of economic loss that was in fact suffered. However the difficulty at this point is identifying the relevant characteristic possessed by each group member that should be identified whose presence would be of any real assistance to determining the position of group members. Instead the Court would in effect be receiving material from a random selection of group members with the likelihood of further debates about the number chosen and the representative nature and significance of their individual characteristics.

38. Accordingly the plaintiff will be directed to identify a sample group member who has only suffered loss and damage that falls within subparagraphs [6(b)] and [6(c)] of the FASOC.

39. Otherwise, bearing in mind the observations in [21] and [22] I consider that the plaintiff’s formulation of the common questions regarding the existence of duty of care set out at [10(e)] to [10(h)] of the FASOC are adequate, namely:

“e)   whether Seqwater owed the plaintiff and other Group Members the duty of care pleaded in paragraph 144 [of the FASOC] below;

f)   whether Seqwater owed the plaintiff and other Group Members the duty of care pleaded at paragraphs 145 to 146 below;

g)   whether SunWater owed the plaintiff and other Group Members the duty of care pleaded in paragraph 148 below;

h)   whether each of the Flood Engineers (as defined in paragraph 101 below) owed the plaintiff and other Group Members the duty of care pleaded in paragraph 150;”

40. At the risk of repetition, this formulation does not foreclose any defendant from contending, inter alia, that the answer to all of these question is “no”, that any answer should be qualified by the necessity to consider the facts of each group member’s claims (see Johnson 2003 at [44]), that the questions cannot or should not be answered beyond considering the specific facts and circumstances of each group member, or should only be answered in relation to the specific group members whose claims will be agitated at the first hearing.

Duty of care – geographic location

41. As noted, Mr O’Donnell QC also submitted that the question of duty could not, or at least should not, be determined without consideration being given to the geographic location of some of the claimants. In particular he contended that the area downstream of Wivenhoe dam could be divided into four geographic areas whose separate characteristics were likely to be meaningful in any determination of the existence of a duty of care.

42. Below the Wivenhoe Dam both the Lockyer Creek and then the Bremer River flow into the Brisbane River. The first area that Mr O’Donnell QC nominated was the Lower Brisbane River area, being the area below Moggill, which is just below the point at which the Bremer River meets the Brisbane River. This area includes the Brisbane CBD and the location of Rodriguez & Sons’ shop. The second and third areas he identified were the Bremer River and Lockyer Creek upstream of where they each meet the Brisbane River. The fourth area is the Brisbane River north of Moggill.

43. The basis for differentiating the second and third areas is that the mechanism of flooding in those areas is said to be different to the flooding in the Brisbane River areas. Mr O’Donnell QC submitted that they flooded because the water levels in the Brisbane River prevented the Lockyer Creek and the Bremer River from flowing into the Brisbane River. It was submitted that this meant that there was a different risk of harm for those areas because for “someone in the Brisbane CBD … the water releases from Wivenhoe can actually contribute to the flooding, physically contribute to the flood water”, whereas the “risk for the Bremer or the Lockyer is [that] water released from Wivenhoe can contribute to those water courses backing up”. The basis for the distinctions between the area upstream and downstream of Moggill was stated as follows:

“So if you're a dam operator, relatively low level releases of the dam will cause some or all of those bridges to be taken out, so much higher releases would be needed in order to inundate the areas below Moggill as a rule of thumb. So the manual for the operation of the dam differentiates between releases which will affect those bridges between the dam and Moggill, versus the areas south of Moggill. So the risk of harm is different, we would say, for those different locations. It also throws up the problem that releases which will help people in one location will harm people in another.”

44. One difficulty with these submissions is they assume that the identification of the risk of harm as referred to in s 9(1) of the Civil Liability Act 2003 will descend to identifying the mechanism of flooding and the specific location of the flooding. However that is far from certain (see Uniting Church in Australia Property Trust (NSW) v Miller; Miller v Lithgow City Council [2015] NSWCA 320 at [100] to [129] per Leeming JA). Otherwise the “problem” identified at the end of this extract is one that the defendants can deploy to either deny the existence of a duty of care, qualify it or otherwise argue that there was no breach irrespective of whether or not a claimant from above Moggill was brought forward.

45. Nevertheless, consistent with the approach identified by Forrest J in Matthews, I accept that there is sufficient potential for the question of duty to depend upon the location of the group member downstream from the Wivenhoe Dam. In particular the foreseeability of harm being suffered may be different in relation to group members who are likely to be flooded by the Brisbane River overflowing, as opposed to two other rivers that flow into the Brisbane River. Accordingly I will direct the plaintiff to identify a group member with a claim for loss and damage that arises from the inundation of land from each of Lockyer Creek and the Bremer River.

46. The position of the Brisbane River upstream of Moggill is more difficult. If Mr O’Donnell QC’s analysis of the manual is correct then, together with the point next addressed, that appears to be a sufficient basis at this point for differentiating between the position of group members who suffered losses from inundation of land adjacent to the Brisbane River above and below Moggill. However, although it was not clear, it did not appear that the plaintiff was aware prior to the directions hearing that any suggested differentiation between the group members based on the manual would be put forward at the case management conference. The course I will take is to direct the plaintiff to identify a group member with a claim for loss and damage that arises from the inundation of land above Moggill but reserve to the plaintiff the right to re-agitate whether any such claim should be heard in whole or in part at the first hearing.

47. Otherwise I note that, even though little attention was paid to this aspect during the case management conference, it seems to me that receiving evidence from a number of claimants who are spread geographically may assist the determination of causation questions which in large part at least appear to turn upon an assessment of the reliability of the plaintiff’s hydrological model.

48. Finally, I note that at one point during the case management conference Mr Finch SC expressed a concern that acceptance of Mr O’Donnell QC’s submission would lead to the selection of sixteen group members, being the product of four categories of loss and the four geographical areas. I will not require that. At some point this exercise involves diminishing returns as the incremental advantage derived from determining additional group members’ claims reduces and the unwieldiness of a hearing involving so many group members increases. Instead, subject to the matter noted in [54], there will only need to be one claimant from each of the three additional areas (as well as two other group members referred to in [36]). Although it is a matter of degree there is a difference between receiving evidence from seven group members as opposed to sixteen or more.

Common questions – breach

49. Sub-paragraph 10(i) identifies a common question as to whether the omissions of flood engineers pleaded in various paragraphs of the FASOC occurred. A question in that form is acceptable. Sub-paragraphs 10(j) to 10(s) inquire whether certain “Breaches”, being the various breaches of the duty of care pleaded in the FASOC, occurred. The defendants objected on the basis that the questions were affected by the problems with the questions concerning breach of duty which have already been addressed.

50. To address this, these questions can be redrafted by removing the reference to whether the conduct was a breach of duty and instead asking whether it was not in accordance with the standard the plaintiff contends was expected of a flood engineer (which appears to be that of an “ordinary reasonable flood engineer”).

49. At the case management conference, the defendants contended that the question of the existence and scope of the duty governed the standard of care expected of those conducting the dam and this meant there is likely to be different answers to questions concerning what precautions were required to be adopted by the engineers depending upon the form of potential harm that was likely to result from the negligent operation of the dams. At this point and subject to further argument I have difficulty accepting that is the case but it is not necessary to resolve that matter without embarking on the final determination of an issue that should be determined later. The manner in which the plaintiff frames its case at least raises a common question apposite to all group members. Bearing in mind that the formulation of the common questions does not foreclose the parties from putting the competing contentions (see [40]) and that I consider that some claims that solely concern property damage and economic loss should be determined at the first hearing there should be a proper evidentiary basis to decide any issue that arises about whether a differing standard applied to the flood engineers’ actions depending on the class of persons to whom any duty was owed.

50. In its written submissions, the third defendant, the State of Queensland, raised a concern that the proposed questions were not directed to the conduct of the only flood engineer whom it is said to be vicariously liable for, namely Mr Ruffini. As noted, nothing in the formulation of these questions affects the pleaded case which alleges that the State of Queensland is vicariously liable for Mr Ruffini’s conduct. It follows that the answers to the separate questions will have to address the position of Mr Ruffini. However that is a matter that concerns the answer not the formulation of the question.

Common questions – other matters

53. The balance of the questions posed in [10] of the FASOC concern causation, the claim in nuisance and trespass and the application of s 374 of the Water Supply (Safety and Reliability) Act 2008. Various issues were raised with their formulation most of which are addressed by the above although I note two further matters.

54. First, the claim in nuisance is brought by the plaintiff on behalf of the persons who fall within sub-paragraph [6(a)(ii)] of the FASOC (see [5]). Subparagraph 6(a)(ii) of the FASOC covers persons who held an interest in land whose enjoyment of that interest was interfered with by that land’s inundation or the inundation of other land such that they suffered loss and damage. As noted it is pleaded that the shop leased by Rodriguez & Sons was inundated by water. Accordingly to the extent that a claim in nuisance is maintained, the plaintiff’s circumstances present as an example of that cause of action at least so far as the sub-group members held an interest in land that was inundated by water. However they do not present as an example of those sub-group members seeking damages for nuisance who held an interest in land that was not inundated by water. I can see scope for argument that claims of this latter kind are distinguishable from the former. In those circumstances I consider that the plaintiff should identify a group member in the latter category. Mr O’Donnell QC’s written submissions also seek an order that there be identified a bevy of claimants in this category that reflect the geographical areas noted above. However, for the reasons noted at [48], I decline to require the plaintiff to identify a geographical range of nuisance claimants.

55. Second, the claim in trespass pleads, as an alternative to the nuisance count, that releases of water from the Wivenhoe Dam constituted a trespass to land “to the extent that the released water entered onto any land in which the plaintiff or any Subgroup Members held an interest” (FASOC [362]). Mr O’Donnell QC submitted that it is “questionable” that any water released from the Wivenhoe Dam flooded the Bremer River or Lockyer Creek such that the selection of group members with trespass claims from those areas was warranted. There is some force in that, however I will not require the plaintiff to identify claimants from those areas who bring a claim in trespass. The claim in trespass is a relatively minor component of the plaintiff’s case and the selection of even more claimants has a tendency to make the first hearing unwieldy for what at this point appears to be little benefit. One way or another I expect that a consideration of the hydrological model will yield findings about the geographical extent of the flow of the water released at Wivenhoe Dam.

56. The plaintiff should circulate a draft of the questions that address the matters in this judgment and the defendants will be required to respond.

Opt out notices

57. In the days prior to the case management conference the defendants served amended versions of the opt out notice prepared by the plaintiff. The plaintiff stated that it did not have time to consider the entirety of the proposed amendments but would do so. However five discrete issues were raised which I can briefly address.

58. First, SunWater contended that there should be different notices for insured group members and uninsured group members (see Johnston v Endeavour Energy [2015] NSWSC 1117 at [148] to [174]). The plaintiff conceded that was appropriate. I agree.

59. Second, the plaintiff contended that service on insured group members should be arranged by the insurers as they are in possession of contact details for that class of group members. I agree, except that verification of service and proof of the entirety of the communication to the insured by the insurer on the topic of opting out must be forthcoming.

60. Third, the defendants contended that the notices should make reference to the common questions that will be addressed at the first hearing as they may affect a group member’s decision to opt out. I do not consider that the process of sending opt out notices should await the settling of the common questions. As this judgment indicates that may take some time and they are apt to change. If a group member with the resources sufficient to bring their own claim wants to know what questions will be determined at the first hearing before deciding to opt out it is to be expected that they will take steps to ascertain the latest draft. In any event this judgment will give them some guidance in that respect.

61. Fourth, the plaintiff complained that some of the drafting of the defendants’ versions of the notices was inappropriate in that it was intimidatory or unduly technical. I was not invited to adjudicate upon all the instances but one example cited was that instead of stating “What will happen if you choose to remain a group member”, which is in the plaintiff’s draft, the defendant’s draft stated “What are the possible disadvantages of you remaining a Group Member”. This aspect of the defendant’s draft should be rejected. The notices should neither be exhortary nor intimidatory.

62. Fifth, the written submissions of the third defendant made reference to whether amounts received by group members from the special disaster flood assistance scheme would need to be deducted from the proceeds of any judgment or settlement that group members may receive. It is not necessary to consider this further as Senior Counsel for Queensland, Mr Thompson QC, clarified that his client did not contend that there needed to be any reference to this topic in the opt out notice.

Future progress

63. The matter is next listed for directions on 12 February 2016. The additional group members will need to be identified prior to that. After that the evidence concerning them will need to be prepared in a time frame that does not disrupt the current timetable. Otherwise, the Court expects that the legal representatives of the parties will confer in relation to the outstanding issues concerning the drafting of the common questions, the identification of further claimants and the opt out notices prior to 12 February 2016.

64. Accordingly the Court orders that:

1. The Plaintiff be granted leave to amend the Further Amended Statement of Claim by adding the words “and Group Members” after the words “the plaintiff” in subparagraph 346(c);

2. The Plaintiff file and serve a Second Further Amended Statement of Claim within 7 days;

3. Any requirement for the filing of further defences in response to the Second Further Amended Statement of Claim be dispensed with;

4. On or before 24 January 2016 the plaintiff notify the defendants of the following selected group member whose claims will be determined in whole or in part at the first hearing:

1. a group member who only suffered loss of the kind referred to in [6(b)] of the Further Amended Statement of Claim;

2. a group member who only suffered loss of the kind referred to [6(c)] of the Further Amended Statement of Claim;

3. a group member who held an interest in land and whose use or enjoyment of that land was interfered with by reason of the inundation of other land located downstream of Wivenhoe Dam by flood water from the Brisbane River or Bremer River and their tributaries in the period 9 January 2011 to 24 January 2011 such that they suffered loss and damage;

4. a group member with a claim for loss and damage that arises from the inundation of land by water from Lockyer Creek;

5. a group member with a claim for loss and damage that arises from the inundation of land by water from the Bremer River;

6. a group member with a claim for loss and damage that arises from the inundation of land above Moggill.

5. On or before 10 December 2015 the plaintiff serve on the defendants revised proposed opt out notices.

6. On or before 10 December 2015 the plaintiff serve on the defendants a revised proposed set of common questions.

7. On or before 22 January 2016 the defendants serve on the plaintiffs any revised version of the proposed opt out notices.

8. On or before 22 January 2016 the defendants serve on the plaintiffs any revised version of the proposed set of common questions.

9. On or before 5 February 2016 the parties confer in relation to the form of the proposed opt out notices and the proposed set of common questions.

**********

Amendments

30 November 2015 - Correct citation in [14] and on cover sheet.

Decision last updated: 30 November 2015