Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 9)

Case •

[2017] NSWSC 1116

•

23 August 2017

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 9) [2017] NSWSC 1116
Hearing dates:28 July 2017
Date of orders: 11 August 2017
Decision date: 23 August 2017
Jurisdiction:Common Law
Before: Beech-Jones J
Decision:

1.   The plaintiff be granted leave to file a Fifth Amended Statement of Claim containing the amendments set out in Annexure A and Annexure B.

2.   Refuse the plaintiff leave to make the amendments set out in Annexure C.

3.   Otherwise dismiss prayer 1 of the plaintiff’s notice of motion filed 21 July 2017.

4.   The requirement that the defendants file a defence to the Fifth Amended Statement of Claim be dispensed with.

5.   The plaintiff be granted leave to rely on the evidence in Volume 1 and Volume 2 of the Dr Christensen’s report dated 1 July 2017.

6.   The plaintiff pay the defendant’s costs thrown way by reason of the plaintiff being granted the leave referred in order 1 and order 5 including the defendants’ costs of the notice of motion filed 21 July 2017.

7.   Reserve liberty to apply to the defendants to seen an order that the costs the subject of order 6 be payable on an indemnity basis.

8.   The plaintiff’s notice of motion filed 21 July 2017 be otherwise dismissed.
Catchwords: PRACTICE and PROCEDURE – representative proceedings – application to amend statement of claim – application for leave to rely on further expert’s report – expert’s report addressed operation of dams during flood- further report contains additional simulations of counterfactual operation of dams – form of amendments – attempt by plaintiff to reserve unfettered right to rely on simulations that might arise out of Court’s judgment – amendment to that effect disallowed – plaintiff seeks to rely on additional simulation as primary case – defendants entitled to respond – defendants’ response likely to take months – granting leave will lead to delay in hearing – importance of amendments to plaintiff’s case – amendments allowed – plaintiff allowed to rely on further report and simulations.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Dare v Pulham (1982) 148 CLR 658
Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486
Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater [2014] NSWSC 1565
Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 6) [2016] NSWSC 1279
Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 8) [2017] NSWSC 554
Symond v Gadens Lawyers Sydney Pty Ltd [2013] NSWSC 955
Symond v Gadens Lawyers Sydney Pty Ltd (No 2) [2013] NSWSC 1578
Category:Procedural and other rulings
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)
A Pomerenke QC; D Klineberg (First Defendant)
D Williams SC; HJA Neal; N Simpson (Second Defendant)
GA Thompson QC; JM Horton QC; E 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. On 21 July 2017 the plaintiff, Rodriguez and Sons Pty Ltd, filed a notice of motion seeking two principal forms of relief which are interrelated, namely, an order granting leave to file a proposed Fifth Amended Statement of Claim (the proposed “5ASOC”) and an order granting leave to rely on Volumes 1 and 2 of a report of Dr Christensen dated 1 July 2017 (the “Response Report”).

  2. The relief sought was vigorously opposed by the defendants. The notice of motion was argued on 28 July 2017 and judgment was reserved. At the conclusion of argument I stated that the outcome of the notice of motion would be announced in Court on 11 August 2017. The necessity to rule on the motion by that time arose because the parties were due to commence a mediation of the proceedings on 14 August 2017, the proceedings are listed for hearing on 3 October 2017 and the motion jeopardised the maintenance of the hearing date.

  3. On 11 August 2017, I made orders allowing some of the amendments sought but disallowing others and granting leave to the plaintiff to rely on both volumes of the Response Report. At the time the orders were made I stated that written reasons would be published at a later date. This judgment constitutes those reasons.

Background

  1. These are representative proceedings brought pursuant to Part 10 of the Civil Procedure Act 2005 (NSW). The plaintiff brings the proceedings on its own behalf and on behalf of others who, inter alia, are alleged to have suffered damage to real or personal property and in some cases consequential interruption to their businesses when the Brisbane River and Bremer River (and their tributaries) flooded areas of south-east Queensland located downstream of the Wivenhoe Dam in January 2011.

  2. The plaintiff alleges that the flooding of its premises was caused by the negligent conduct of flood mitigation procedures at the Wivenhoe Dam and the Somerset Dam (which is upstream of the Wivenhoe Dam), during the period 1 December 2010 to early January 2011. The plaintiff alleges that the first defendant, Queensland Bulk Water Supply Authority trading as Seqwater (“Seqwater”), owned and controlled the two dams. It alleges that the second defendant, Sunwater Limited (“Sunwater”), was responsible for the conduct of flood operations for the two dams and was also responsible for establishing and maintaining a dedicated operations centre, from which the flood operations could be conducted. Finally, the plaintiff alleges that the third defendant, the State of Queensland, is liable as the employer of one of the individual engineers responsible for the conduct of the flood operations centre.

  3. The structure of the Fourth Amended Statement of Claim (“4ASOC”) was discussed in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 8) [2017] NSWSC 554 at [5ff] (“Rodriguez (No 8)”) which should be read with this judgment. In Rodriguez (No 8), I addressed and rejected prayer 3A of a notice of motion filed by Seqwater on 3 May 2017 which sought to strike out the 4ASOC. At this point, five matters should be noted about the 4ASOC and what has emerged to date about the plaintiff’s case.

  4. First, as far as the Court is aware, the plaintiff's case on liability and causation turns almost exclusively on the evidence of two experts, Dr Christensen and Dr Altinakar. In broad terms, Dr Christensen addresses what the plaintiff contends was the negligent operation of Wivenhoe and Somerset Dams by the defendants during the period December 2010 to January 2011. Dr Christensen has produced four reports, being the Response Report, a report dated 19 February 2015 (the “February Report”), a report dated 3 July 2016 (the “Supplemental Report”) and a report prepared in reply to the defendants' evidence dated 22 December 2016 (the “Reply Report”). The combined length of the four reports exceeds 2300 pages and includes more than 150 spreadsheets.

  5. Dr Altinakar is said by the plaintiff to have “constructed a hydraulic model that incorporates detailed topological mapping of the greater Brisbane area, as well as information concerning water flow into that area during the period December 2010 to January 2011” which is “capable of taking as an input hypothetical outflows from the Wivenhoe Dam and reconstructing what the level of flooding would have been for every 10 square metres in the Brisbane area during that period” (see Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 6) [2016] NSWSC 1279 at [4]). Each output of the model, being in effect a hypothetical hydrological map of the Brisbane area based on particular levels of outflow from the two dams, takes a number of days to produce. At the hearing of this motion the Court was advised that Dr Altinakar was recalibrating his model and will also provide outputs of his model based on the further simulations provided by Dr Christensen.

  6. Thus, Dr Christensen addresses liability and one aspect of the causation inquiry, namely, the volume of water that the plaintiff contends should have been released from the two dams during the relevant period. Dr Alitnakar addresses another aspect of the causation inquiry namely what, according to the plaintiff, would have been the level of flooding had the dams been operated properly.

  7. Second, the structure of the 4ASOC is that it identifies various points throughout the period December 2010 to January 2011 and pleads, for each point, the matters said to constitute a breach of duty on the part of the flood engineers responsible for flood operations.

  8. Third, as a consequence of the judgment of Garling J in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater [2014] NSWSC 1565 (“Rodriguez (No 1)”), the plaintiff was required to amend the statement of claim to plead what it is contended would have been the water level in the various dams had the flood engineers commenced undertaking the various pleaded steps from a particular point in time (see Rodriguez (No 8) at [10]).

  9. Fourth, in light of the contents of Dr Christensen's reports, there was a substantial debate as to whether any of the pleaded breaches of duty said to have occurred during December 2010 were even arguably causative of any loss or damage. In Rodriguez (No 8), I declined to dismiss those allegations but stated (at [33]) that the “plaintiff will have to have given serious attention to whether it wishes to maintain those parts of the FASOC that allege a breach of duty prior to January 2011 when the evidence appears to suggest they had no causal consequences”. The proposed 5ASOC removes those allegations of breach. Leave to make those amendments is not opposed.

  10. Fifth, in Rodriguez (No 8) I addressed a complaint about the adequacy of the pleading of the counterfactual flood operations that the plaintiff contends that the flood engineers should have undertaken during the period from 16 December 2010 to 11 January 2011. These are referred to in the 4ASOC as “reasonably prudent flood operations”. In particular, it was contended on behalf of Seqwater that it was incumbent on the plaintiff to plead every single step it contends that the flood engineers should have undertaken during the relevant period. I rejected that contention stating (Rodriguez (No 8) at [18] to [20]):

“In particular, I do not accept that in order for Seqwater to know the case it has to meet there must be pleaded the minutiae of the steps that would have had to have been taken by the reasonably prudent flood engineer throughout the various counterfactual periods that are pleaded in the subparagraphs of 307B. In essence, this is a complaint about the lack of particularisation of what each of those subparagraphs refers to as ‘reasonably prudent flood operations since that time’. If there really was a concern about this part of the pleading, then it could have been addressed by directing a simple question to the plaintiff in correspondence which asked it to specify what were the ‘reasonably prudent flood operations since that time’ as referred to in the relevant parts of the FASOC.

In fact, the parties have been preparing the matter on the basis that the ‘reasonably prudent flood operations since that time’ are the various simulations that have been identified in Dr Christensen's report. What has emerged is some confusion as to how Dr Christensen's reports interrelate with one another, and what is ultimately the plaintiff's primary case in respect of those simulations.

Those matters are sought to be addressed by the other parts of the motion to which I will come.” (emphasis added).

  1. The “other parts of the motion” referred to in this passage is a reference to prayer 1 of the notice of motion filed 3 May 2017 which sought a ruling under s 192A of the Evidence Act 1995 (NSW) that all of Dr Christensen's reports served to that time be ruled inadmissible and to prayer 2 of the motion which sought an order directing the plaintiff to file a further report from Dr Christensen addressing various matters set out in Appendix A to the motion (“Appendix A”). Appendix A listed 23 issues of concern to Seqwater in relation to Dr Christensen's reports. Ultimately these prayers for relief were not pressed by Seqwater. Instead it sought a more limited order which required Dr Christensen to prepare and serve amended copies of his reports marked up to identify those parts which were not relied upon, and which otherwise addressed the matters set out in Appendix A (Rodriguez (No 8) at [2]). This created further debate because the plaintiff foreshadowed seeking leave to rely on further simulations prepared by Dr Christensen, of the kind referred to in the above extract from Rodriguez (No 8), a course that was resolutely opposed by the defendants.

  2. I addressed this in Rodriguez (No 8) by making the following orders:

“1.   The plaintiff have leave to serve a further affidavit or report from Dr Christensen on or before 19 June 2017 addressing the issues raised concerning Dr Christensen's reports dated 19 February 2015, 3 July 2015 and 22 December 2016 (collectively, the “Christensen Reports”) by the First Defendant in annexure A to its amended notice of motion filed in Court on 3 May 2017 limited to

(A)   exposing the process of reasoning;

(B)   providing workings; and

(C)   identifying any changes to the opinions expressed in any one or more of the Christensen Reports, including those parts of any Christensen's reports which are no longer relied upon.

2.   For the avoidance of doubt, the plaintiff is not permitted to advance further simulations in addition to those included in the Christensen Reports;

3.   On or before 19 June 2016 the plaintiff is to serve any further affidavit or report from Dr Christensen that contains any further simulations upon which it proposes to rely. The plaintiff is not permitted to rely on that affidavit or report at the trial without leave of the Court.

4.   On or before 19 June 2017 the plaintiff is to notify the defendants of what constitutes “reasonably prudent flood operations” as referred to in paragraph 339B of the fourth amended statement of claim (by reference to the proposed amendments in the proposed Fifth Amended Statement of Claim).”

  1. The Response Report was the outcome of these orders. Broadly, Volume 1 of the Response Report addresses order 1, and Volume 2 of the Response Report contains the additional simulations sought to be relied on by the plaintiff as contemplated by order 3.

The Proposed Amendments

  1. As stated, some of the proposed amendments give effect to the plaintiff's decision not to pursue allegations of breaches of duty in December 2010. Those amendments are noted in Annexure A to this judgment along with the other non-contentious amendments. On 11 August 2017, leave was granted to the plaintiff to make those amendments.

  2. The first set of contentious amendments is found in paragraph 211 of the proposed 5ASOC. All the other contentious amendments can be resolved by considering that paragraph:

“Further, by reason of the matters pleaded at paragraphs 192-204 and 209, a reasonably prudent flood engineer responsible for Flood Operations at Somerset Dam and Wivenhoe Dam on 2 January 2011:

a)   would have complied with the Flood Mitigation Manual;

b)   would have recommended or continued Flood Operations and releases at Somerset Dam and Wivenhoe Dam on 2 January 2011;

c)   would have implemented Strategy W1 W3 at Wivenhoe Dam;

d)   would have implemented Strategy S2 at Somerset Dam;

e)   would have caused Somerset Dam and Wivenhoe Dam to release water at rates substantially exceeding the rate of inflow;

f)   [not used]

g)   [not used]

h)   would have continued Flood Operations until Lake Somerset and Lake Wivenhoe were no longer likely to exceed their respective Temporary Full Supply Levels, or alternatively, Full Supply Levels;

i)   would have selected ... input losses and continuing loss rates equal, or approximate, to those specified in the table below into the Real Time Flood Model to forecast future inflows into Lake Somerset and Lake Wivenhoe to take account of the increased runoff that would be generated from continuing rainfall by reason of the increasingly saturated catchments.”

  1. The change from flood mitigation strategy “W1” to “W3” in paragraph 211(c) is said by the plaintiff to be the correction of a typographical error in that the identification of strategy W3 as the strategy that should have been adopted at this point of time was postulated by Dr Christensen as far back as the Supplemental Report. However, similar changes to other paragraphs of the 4ASOC are proposed and it is accepted that many of them only arise out of the revision by Dr Christensen of his opinions in the Supplemental Report.

  2. Immediately following paragraph 211 in the 4ASOC there is set out a table which identifies regions around the dams and then sets out “Initial Loss Rates” and “Continuing Loss Rates” for each region. The proposed 5ASOC seeks to delete that table and insert another table with different initial and continuing loss rates for those regions and which is also divided between a “no rain” case and “4-8 day forecast” case. As I understand it, that reflects a debate between the experts as to whether reasonably prudent flood operations required the use of rain forecasts or should only involve a consideration of actual rainfall.

  3. The Proposed 5ASOC then seeks to amend the particulars to this paragraph as follows:

“PARTICULARS

A.   A reasonably prudent flood engineer would have complied with the Flood Mitigation Manual by taking the actions pleaded in paragraphs 211(b) - (h).

B.   Flood Mitigation Manual, sections 1.1, 3.1, 8.4, 8.5, 9.3, 9.4

C.   Christensen Report, Chapter VIII …. Christensen Reply Report, Volume 1, pp 73-74, [253].

D.   The plaintiff's primary case is that in operating the dams in accordance with the Flood Manual a reasonably prudent flood engineer would have adopted release rates and gate operations on and from 2 January 2011 substantially in accordance with the simulation in Christensen report, Chapter X, [1194]-[1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153]‑[267] as modified by Simulation I in the Christensen Response Report.

E.   Christensen Supplemental Report, Volume 2, p 4-5. In the alternative, the plaintiff relies on Simulations A, B, C and D in the Christensen Response Report as indicative of reasonably prudent Flood Operations on assumptions reflecting different findings that the Court may make concerning which of the matters pleaded in paragraph 211 were required for reasonably prudent Flood Operations on 2 January 2011.

F.   In the further alternative, in the event that the Court finds the manner in which the matters pleaded in paragraph 211 (or some of them) were required to be done or implemented for the purposes of reasonably prudent flood operations is not reflected precisely in a simulation prepared by Dr Christensen to date, the plaintiff relies on an operation consistent with those findings.” (underlining in original; emphasis in italics added)

  1. Like the amendments to the table of initial and continuing loss rates, the amendments to particular C arise out of the Reply Report. The amendments to particulars D and E are the most contentious in that they rely on the simulations in volume 2 of the Response Report. A determination of whether the plaintiff can rely on that report and make amendments to the 4ASOC that incorporate its simulations is interrelated and addressed below. For the reasons there stated, the plaintiff was granted leave to rely on both volumes of the Response Report and, subject to what follows, make the amendments to particulars D and E and such other paragraphs that are reliant on the simulations in the Response Report. The amendments that were allowed as a consequence of granting leave to rely on the Supplementary Report, including Volume 2 are identified in Annexure B. However, two other matters must be addressed.

  1. The first concerns particular D to paragraph 211. The State's written submissions complain that the italicised portion of particular D means that it is “not possible to identify what parts of the various reports and simulations are to be relied upon”. [1] I agree. As formulated, particular D suggests that the simulation relied on is not Simulation I in the Response Report but some amalgam of the trail of simulations referred to in the particular which must be somehow discerned. This is only apt to confuse. In any event, the submissions of Senior Counsel for the plaintiff, Mr Sexton SC, confirmed that the simulation that is relied on is Simulation I in the Response Report. [2] The particular should reflect that. It is that simulation which constitutes the plaintiff’s “primary case”. The passages in the earlier reports of Dr Christensen no doubt explain the reasoning that lead Dr Christensen to put forward Simulation I but that is a different matter. Accordingly, while I granted leave to amend to include particular D and its equivalents, the grant of leave did not extend to the italicised words.

    1. Third Defendant's written submissions at [4(b)].

    2. T 28/07/2017 p 26.12.

  2. The second matter concerns particular F which seeks to preserve the plaintiff's ability to put forward any simulation that might arise out of the Court's findings as to what “reasonably prudent flood operations” required where those findings are “not reflected precisely” in a simulation prepared by Dr Christensen. Another proposed amendment contends, in the alternative, that reasonably prudent flood operations would have reduced the water levels in the two dams to levels that “would have been achieved by operations consistent with the findings of the Court as to what a reasonably prudent flood engineer would have done in the period 2 January 2011 to the end of 7 January 2011”. [3]

    3. Proposed paragraph 267B(h).

  3. All of the defendants complain that this form of pleading is fundamentally unfair in that it leaves the defendants unable to address that part of the case that concerns the counterfactual operation of the dams that it is alleged the flood engineers should have undertaken and its consequential effect on water flows out of the dam into the Brisbane river. Given the evidence the defendants have prepared in response to Dr Christensen's simulations (see below), they contend it would be grossly unfair for them to approach the trial having prepared to meet Dr Christensen's simulations but to be later confronted with some alternative simulation that might emerge out of the Court's findings. They place particular reliance on the following passage from Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486 at [27] (per French CJ, Gummow, Hayne and Kiefel JJ):

“The task of the pleader is to allege the facts said to constitute a cause of action or causes of action supporting claims for relief. Sometimes that task may require facts or characterisations of facts to be pleaded in the alternative. It does not extend to planting a forest of forensic contingencies and waiting until final address or perhaps even an appeal hearing to map a path through it. In this case, there were hundreds, if not thousands, of alternative and cumulative combinations of allegations.” (emphasis added)

  1. In effect, the defendants contend that these parts of the proposed 5ASOC involve the plaintiff seeking to reserve to itself a right to pursue a further simulation (and its causal consequences) after the publication of the Court's judgment.

  2. Mr Sexton SC submitted that between Dr Christensen's reports and the responsive reports of the defendants there were a number of “relatively broad” issues which had been extensively debated, namely, the start date to conduct flood operations, the use of rain forecasts in predicting inflows, whether to undertake precautionary releases and the effect of infrastructure constraints on flood operations. [4] He submitted that the adoption of a counterfactual simulation for the operation of a dam depended on the outcome of a dispute over those issues. He submitted that, if the Court were to accept only some of Dr Christensen's criticisms of the conduct of the flood engineers, then his client would be entitled to put forward a simulated counterfactual operation even if it was not presently put forward by Dr Christensen. He submitted that this would simply be another example of a plaintiff being able to pursue a case in negligence even though not all of its particulars of negligence were established.

    4. T 28/07/2017 at p 24.28 to 25.25.

  3. The defendants strongly disputed what appears to be the underlying premise of this contention, namely, that the counterfactual simulations put forward by Dr Christensen merely give effect to his opinion on the points of difference noted above. They contend that each of the simulations contains numerous exercises of professional judgment by Dr Christensen that go beyond merely giving effect to his opinion on those issues. In those circumstances, they contend that to countenance the plaintiff having leave to rely on some unspecified simulations following a determination by the Court of what was required of the flood engineers would be unfair.

  4. It is trite to observe that the role of pleadings is to define the issues for decision in the litigation and to appraise the other party of the case they must meet at trial (Dare v Pulham (1982) 148 CLR 658 at 664). Where the Court accepts some but not all of a plaintiff's particulars of negligence the Court must then determine the balance of the issues in the trial. In some cases, a defendant having been on notice via the pleading of the entirety of the plaintiff's case cannot justifiably complain that it did not have the opportunity to meet a subset of that case. However, questions of fact and degree can arise in determining how the Court proceeds to determine the balance of the issues where only part of a plaintiff's particulars of negligence are accepted. For example, it may be that, even though the Court accepts that some aspects of a defendant’s conduct was negligent, there is an evidentiary lacuna in proving causation, in which case the plaintiff fails. In other cases, it may be that the evidence might support a finding of causation but procedural fairness may require the parties to be heard further before any causation analysis can be undertaken based on the existing evidence. It may be that the parties apply to lead further evidence as part of the process. I adopted such a course in determining the quantum of damages in Symond v Gadens Lawyers Sydney Pty Ltd [2013] NSWSC 955 and Symond v Gadens Lawyers Sydney Pty Ltd (No 2) [2013] NSWSC 1578. Other possible courses may be open. Each case will depend on its own facts and circumstances.

  5. It is not possible to determine in advance of the hearing what would be involved in determining what the water outflows from the dams would have been had they been operated in a manner that reflected an acceptance by the Court of only some of Dr Christensen's criticisms of the conduct of the flood engineers. It follows from [29] that a determination of whether, after findings have been made, recourse can be had to some further or revised counterfactual simulation of the operation of the dams that does not precisely correspond with those put forward to date will have to await the evidence adduced at the hearing and possibly the Court's findings. It further follows that the plaintiff cannot reserve to itself an unfettered ability to put forward a further counterfactual operation of the two dams based on the Court's findings. On its face, particular F to paragraph 211 purports to operate in that way; i.e. it purports to confer on the plaintiff the right to rely on any form of alternative simulation after judgment has been delivered and regardless of whether or not, on the state of the existing evidence, it may have failed to prove causation or whether the defendants have had a fair opportunity to meet that alternative simulation.

  6. Accordingly, I disallowed proposed particular F to paragraph 211 of the proposed 5ASOC and its equivalents. They are set out in Annexure C to this judgment. In that regard, I noted that proposed particular B to paragraph 211B cross refers to the actions pleaded in paragraph 211 and contends that reasonably prudent flood operations would have been undertaken consistent with the Flood Mitigation Manual and that “indicative simulations of the effect of such operations are provided in Dr Christensen's reports”. I also reject this paragraph and its equivalents. By referring to Dr Christensen's simulations as only “indicative simulations”, the plaintiff again appears to be attempting to reserve to itself an unfettered right to bring forward further simulations that reflect the Court's findings.

The Response Report

  1. As noted, the Response Report consists of two volumes, the first of which principally consists of Dr Christensen's response to the Appendix A issues, and the second of which principally consists of 10 simulations. It is necessary to describe the origins of these simulations and the material provided with each simulation.

  2. I have already referred to the four reports of Dr Christensen. In the February Report, Dr Christensen put forward 10 simulations, 8 of which reflected different start dates for flood operations (see [10]). In the Response Report, Dr Christensen explained that in preparing the February report he did not have access to the “Real Time Flood Model” (“RTFM”) and instead used a “simplified, manual method to make … estimations” of water inflows. Dr Christensen stated that he did not “suggest that the flood engineers should have operated the dams on the basis of the inflow estimates” used in the simulations contained in the February Report.

  3. Dr Christensen obtained access to the RTFM after the February Report was completed. In the Supplemental Report, Dr Christensen produced three simulations utilising the RTFM. In the Response Report, Dr Christensen stated that in preparing the Supplemental Report he did not use the RTFM to “recreate each simulation in my February Report” and that the three simulations referred to in the Supplemental Report were only put forward to “provide specific examples of the application of the methodology described in my February Report to inflow estimates derived using the RTFM”. However, in his Reply Report, which was prepared after the defendants provided their evidence, Dr Christensen accepted that the loss rates used in the Supplemental Report were not “valid” and he set out revised loss rates using the RTFM that he contended were “reasonable”. In preparing the Reply Report Dr Christensen again did not revise the simulations provided in the earlier reports based on those revised loss rates. Instead, in the Reply Report Dr Christensen provided four further simulations prepared on the basis of an acceptance of some of the criticisms of his earlier reports by the defendants' experts although he maintained his opinions on those topics.

  4. In the Response Report, Dr Christensen stated that in addressing the Appendix A issues he discovered that he had made an error in the simulations provided in the Reply Report and had corrected it. Those corrected simulations are found in Volume 2 being the simulations A, B, C and D referred in particular D to proposed paragraph 211 being the plaintiff's alternative case on this issue. Dr Christensen explained that the Supplemental Report contains a further six simulations. Dr Christensen explained that Simulations E, F and G operate “on substantially the same assumptions” as one of the simulations in the Reply Report but with different start dates and that Simulation H operates on substantially the same assumptions as another simulation in the Reply Report. Dr Christensen described Simulation I which, as noted above is now the plaintiff's “primary case”, as follows:

“Simulation I (January 2 Gates Closed) is an updated version of the January 2 Start simulations set out in my February and Supplemental Reports, with the updates being that I have used the RTFM to derive inflow volumes and using the corrected loss rates from my Reply Report. I have also assumed a lower threshold level of EL 107.0 m AHD for raising the Somerset Dam crest gates when the gates have been closed.”

  1. Dr Christensen explained that Simulation J is an updated version of the “January 8 Start simulations” set out in the February Report updated in the same manner as Simulation A.

  2. The submissions of the defendants were critical of these changes and the concessions made by Dr Christensen that he made various errors in the course of preparing his reports. I do not propose to address those matters. Instead, at this point it suffices to state that the simulations in the Response Report should have been provided no later than at the time of the provision of the Reply Report. By that stage, Dr Christensen had access to the RTFM model, had been able to consider the defendants' material responding to his earlier reports and it was known that there had not been any updating of the original simulations described in the February Report.

  3. For each simulation in the Response Report, Dr Christensen provides a detailed explanation of the flood mitigation strategies that he contends should have been used for each day during the period 2 January 2011 to 13 January 2011 setting out the commencing water level and ending water level for that day. For Simulation A, this explanation is 14 pages. This is supplemented by a “Day by day Release Rates Explanation” in which Dr Christensen justifies the approach he adopted in determining release rates. The explanation for Simulation A is 16 pages. The entry for 2 January 2011 concerning Simulation A includes the following statement:

“The target for both dams has been set at roughly the same level (0.9 m below [Full Supply Level] for Wivenhoe and 0.8 m below FSL for Somerset). For that reason, the reasonably competent engineer would have decided to lower both dams at about the same rate. Because both dams were slightly above FSL, the engineer would have used the incremental storage ratio derived in the example above (i.e. 2.573) to determine the relationship between the releases from the two dams.

The reasonably competent engineer would have wanted to end flood operations as soon as possible, without causing any additional adverse impacts on downstream areas. That means the engineer would want to keep Wivenhoe releases close to, but below, the 1,578 m3/s release made just 1½ days earlier, on December 31.”

  1. Dr Christensen has also prepared and provided a spreadsheet for each simulation that provides an hourly breakdown of the water levels, inflows and outflows for each dam compared to the actual figures. This does not exhaust the material required to be examined in relation to each simulation. An engineer retained by Sunwater, Andrew Ickert, has printed out the entirety of the schedules for the 10 simulations. They occupy seven lever arch folders and include 4 lever arch folders which contain extensions of the simulations for the period from 14 January 2011 to 19 January 2011.

  2. Each of the defendants submitted that there were significant differences between the 10 simulations described in Volume 2 of the Response Report and the simulations in the earlier reports even though the former have their origin in the latter. Superficially this appears to be so in that utilising different estimates of inflows appears to alter not just the release rates that need to be adopted and the outflows but, in some cases, requires the adoption of different flood strategies from the flood manual (see [18]). As noted above, whether the simulations are simply giving effect to Dr Christensen's opinions on the issues noted in [27] in the context of particular water inflows is a matter for debate between the parties which I will not resolve. The extract set out in [38] provides some support for the defendants' contentions. It suffices to state the differences between the 10 simulations described in Volume 2 of the Response Report and the simulations in the earlier reports are such that, if leave is granted to the plaintiff to rely on them, the defendants must be given a proper opportunity to respond to them especially as one of the new simulations is pleaded to be the plaintiff's “primary case”.

  3. In this regard, both Seqwater and Sunwater filed evidence concerning the work that would be required to respond to the new simulations in Volume 2 of the Response Report.

  4. Seqwater read an affidavit from its solicitor, Justin McDonnell, sworn 25 July 2017. Mr McDonnell described the steps that would need to be taken to address the Response Report, especially the further simulations, if leave to rely on it was granted. Mr McDonnell stated that his client's expert on flood operations, Mr Pokarier, “will need at least 48 business days to complete his analysis” of the report and additional time to prepare a response. Mr McDonnell stated that Seqwater cannot allow Mr Pokarier a 48-day continuous period to prepare his report without compromising its statutory functions. Mr McDonnell also stated that two of the flood operations engineers whose conduct is impugned by Dr Christensen, namely Mr Malone and Mr Tibaldi, will need to review their evidence and that overall a significant amount of time will have to be devoted by Seqwater's legal team to reconsidering the reports.

  5. Sunwater read an affidavit from Mr Ickert sworn 25 July 2017. Mr Ickert is an engineer based in Fort Worth Texas. He and a colleague, Mr Birdwell, prepared reports in response to the February and Supplementary Report. He and Mr Birdwell have been preparing material in response to the Reply report. He stated that he had spent 368 hours, and Mr Birdwell had spent 244 hours, in preparing that response which was “about 90 to 95%” complete at the time the Response Report was received. He estimated that he and Mr Birdwell would require approximately 14.5 to 15.5 weeks to prepare and finalise a response to the Response Report. If that period was allowed then their response would be filed in mid to late November 2017.

  6. Sunwater also tendered an affidavit of Robert Arnold Ayre affirmed 6 June 2016. Mr Ayre was a flood operations engineer employed by Sunwater during December to January 2011. The text of Mr Ayre's affidavit is 762 pages. Almost 600 pages of Mr Ayre's affidavit involve a day-by-day account of flood operations and his response to Dr Christensen's report and simulations. Senior Counsel for Sunwater, Mr Williams SC, submitted that, as a person whose conduct is impugned by Dr Christensen's reports, Mr Ayre can be expected and is entitled to respond to the further simulations in the Response Report. Mr Sexton SC submitted that the substance of Mr Ayre's response concerned the points of principle noted in [27] and Mr Ayre has already set out his views on those matters. My perusal of Mr Ayre's affidavit suggests that he does take issue with Dr Christensen on those matters but he also addresses particular aspects of Dr Christensen's simulations that appear to extend beyond those issues. As he is no longer employed by Sunwater it can be expected that Mr Ayre will need a significant amount of time to respond to the Response Report although not as much as Mr Ickert.

Should Leave be Granted?

  1. As the questions of whether leave should be granted to rely on Volume 2 of the Response Report and whether leave should be granted to allow the amendments to add particulars C and D to paragraph 211 (and its equivalents) are interrelated, they should both be addressed by reference to the principles stated in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (“Aon”). In doing so I accept the defendants' evidence summarised above. As I stated during argument on 28 July 2017, the practical effect of that evidence is that if leave to rely on the reports is granted then the hearing date would be delayed until either December 2017 or the beginning of term in 2018. I will address the application on that basis. This assumes that the provision of any further material from Dr Altinakar will be accommodated within that time frame.

  1. In submitting that leave should be granted, Mr Sexton SC contended that the new simulations arose because Dr Christensen corrected his simulations and opinions as he was obliged to by the Expert's Code of Conduct. He submitted that it would be irrational to force his client into a hearing on the basis of a pleading prepared by reference to the opinion of an expert who has now changed his opinion after considering the opinions of the defendants' experts. He contended that, as soon as Dr Christensen entered the witness box, he would be obliged to correct the opinions and figures in his various reports that he no longer adhered to and would inevitably, so the argument goes, be asked to produce “a simulation using the right loss rates”. By reference to the various factors in Aon, the defendants strenuously opposed the granting of leave. I address their arguments in the context of considering those factors.

  2. The plaintiff bears the onus of establishing that it is appropriate for the Court to grant it leave to amend the statement of claim (and rely on the Response Report). The exercise of that discretion should not be considered on the basis that a “party should be permitted to amend to raise an arguable issue subject to the payment of costs occasioned by the amendment” (Aon at [96]) although not “every application for amendment should be refused because it involves the waste of some costs and some degree of delay” (Aon at [102]).

  3. One factor relevant to the exercise of the discretion to amend is the “nature and importance of the amendment to the party applying” (Aon id). The amendments to particulars C and D to paragraph 211 and the Response Report, especially the simulations in Volume 2, appear to be of great if not fundamental importance to the plaintiff's case. It is proposed to plead that Simulation I is the “primary case”. As I understand it, Dr Christensen’s report is crucial to the plaintiff's case and effectively constitutes its case on liability. The presentation of that case would appear to be crippled if the plaintiff was forced to run its case by reference to simulations and loss rates that its expert now disavows and was somehow prevented from correcting. To refuse this leave now would probably lead to an application to adjourn the hearing later.

  4. However, just because an expert retained by a party changes his opinion or advances a further opinion does not give that party an unfettered right to rely on that change much less amend its pleading to reflect it. Other factors must be considered including: the point the litigation has reached relative to the trial (Aon at [102]); the extent of the delay and the costs associated with the delay including the wider effects of delay upon the Court and other litigants (Aon at [102] and [93] to [95]); whether the party applying has had sufficient opportunity to plead their case (Aon at [102]); such prejudice as may be assumed and demonstrated (Aon at [102]); and whether the party applying for the amendment has provided an explanation that brings “the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules” (Aon at [103]). The reference to the “objectives of the Rules” in Aon embraces the principles in ss 56 to 60 of the Civil Procedure Act.

  5. This application was brought close to the hearing and a number of years after the proceedings were commenced. I have already accepted that to allow the amendment and leave to rely on the Response Report will cause a delay of some months in the commencement of the hearing. Although the Court can and will hear other cases in the meantime without a loss of judicial time, to delay the commencement of such a large case so close to the hearing is not conducive to the efficient conduct of the Court’s business. More importantly, prejudice will be occasioned to all of the defendants from the delayed commencement of the hearing. I have already adverted to the wasted or potentially wasted costs that would be occasioned by Sunwater’s experts having to now consider the Response Report as opposed to the Reply Report. To an extent, that can be addressed by an order for costs but that is an incomplete answer. Further, the legal teams of the three defendants will have the task of preparing for a difficult hearing made even more difficult from having to respond to what is now being put forward as the plaintiff’s “primary case”. In his affidavit, Mr McDonnell adverts to the difficulty in retaining one of the two Senior Counsel he has briefed to appear if the matter is listed for trial in 2018. Both of Seqwater's Senior Counsel have been retained since the proceedings were commenced in 2014 and no doubt have acquired considerable knowledge of the matter which will be difficult to replicate. I accept that this is a significant concern for Seqwater. However, even if the matter commenced in October 2017 the hearing would still run well into 2018 so that any difficulties with Senior Counsel’s trial commitments in 2018 would most likely have arisen in any event.

  6. In opposing the application, all of the defendants placed great emphasis on the length of the time the plaintiff has already had to properly plead and prepare its case and the absence of any affidavit from the plaintiff explaining the delay in bringing this application. The former can be accepted. In relation to the latter, it is true that no explanation on affidavit was provided but the Response Report and the course of directions hearings in this Court reveal what has occurred. I have already summarised the development of the simulations and the orders made requiring Dr Christensen to address the Appendix A issues. To an extent Mr Sexton SC's contention that the further simulations arise out of Dr Christensen acknowledging and correcting his errors, and the strength of some of the opinions of the defendants' experts, is correct. However, by no later than the time of the Reply Report, revised simulations addressing those matters should have been prepared. Instead, Dr Christensen's reports were allowed to evolve without him being asked to revisit his simulations notwithstanding that they were pleaded as being the relevant form of “prudent flood operations” and formed the basis for Dr Altinakar's modelling. It was not until Seqwater's motion forced the plaintiff to confront this issue that updated and further simulations emerged.

  7. Ultimately, the real period of delay for which the plaintiff must bear responsibility is the period between the time when work commenced on Dr Christensen's Reply Report and when worked commenced on the further simulations in the Response Report. Given the proximity of the hearing date and the absence of any other rational explanation, I am satisfied that delay was occasioned through neglect and that is a matter that weighs against the granting of leave. For the sake of completeness, I note that Mr Williams SC submitted that the absence of an explanation on affidavit for the delay in bringing this material put forward was capable of supporting the inference that a forensic decision was made not to obtain additional simulations from Dr Christensen. I reject that contention. I cannot conceive of any forensic advantage that could accrue to the plaintiff from having to run the gauntlet of this application at this time.

  8. In the end result, I was satisfied that the significance of the proposed amendments and the Response Report to the plaintiff's case warranted the grant of leave notwithstanding the delay that I have identified and the prejudice occasioned from the grant of leave. Even allowing for the delay, it would be unjust to force the plaintiff to pursue a case which is strongly based on opinions in an expert's report which that expert feels obliged to correct and when much of the unfairness occasioned to the defendants from doing so can be addressed by delaying the hearing and the making of an appropriate order as to costs.

Relief

  1. The orders made on 11 August 2017 reflected the above findings. I also ordered the plaintiff to pay the defendants' costs thrown away by the amendments and the granting of leave to rely on the Response Report. I reserved liberty to the defendants to apply for the payment of those costs on an indemnity basis. I did so because I considered that the parties could not be expected to address any such application unless they had these reasons available to them.

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ANNEXURE A

The deletions proposed in Appendix A to the plaintiff's notice of motion filed 21 July 2017 to paragraphs 143, 147, 149, 158A to 162 inclusive, 174A to 178 inclusive, 191A to 191C inclusive, 343, 349, 351, 356, 358, 360(e), 363(a) - (c), 369 (a) and (b) and 373(a) and (b) of the Fourth Amended Statement of Claim (“4ASOC”).

The proposed amendments to the 4ASOC in Appendix A which substitute “January” or “2 January” for the words “December” or “16 December 2010” in paragraphs 349, 351, 352, 358 and 360(e).

In Appendix A: The proposed deletion of 211A, deletions to the first two lines of 211B and to all of 211B(a), deletion of Particulars G to K of [211B], deletion of Particulars G to H in [228], amendments to the first two lines of [228A], amendments to the first two lines of [228B], the deletion of [228B(a)]; deletion of Particulars G to K in [228B]; deletion of Particulars G to I to [245]; amendments to 245A; amendments to first two lines of 245B; deletion of [245B(a)]; deletion of particulars G to I to [245B]; deletion of particulars G to I of [267]; amendments to [267A]; amendments to the first two lines of [267B; deletion of [267B(a)]; deletion of Particulars G to J of [267B]; deletion of particulars G to I of [288]; proposed amendments to [288A]; proposed amendments to first two lines of [288B]; deletion of [288(a)]; proposed deletion of particulars G to K to [288B]; proposed deletion of particulars G to I of [307]; Proposed amendments to [307A]; proposed amendments to the first two lines of [307B]; deletion of [307B(a)]; deletion of Particulars G to K to [307B]; deletion of particulars G to I to [339]; proposed amendments to first two lines of [339B]; deletion of [339B(a)]; deletion of particulars A to F to [339B]; the proposed amendment to the Particular B to [346]; and the proposed amendments to [364].

ANNEXURE B

In Appendix A

Proposed amendment to [211(c)];

Proposed amendment to [211(i)];

Proposed particular C to [211];

Proposed Particular D to [211] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by” [228, 245, 267, 288, 307 and 309;

Proposed Particular E to [211];

Proposed amendment to [211B(b)];

Proposed Particular A to [211B];

The first sentence of Proposed Particular B to [211B], Proposed Particular C to [211B], Proposed Particular D to [211B];

Proposed amendment to Particular C to [228];

Proposed Particular D to [228] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed Particular E to [228] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed amendment to [228B(b)];

Proposed Particular A to [228B];

The first sentence of Proposed Particular B to [228B], Proposed Particular C to [228B], Proposed Particular D to [228B];

Proposed amendment to [245(i)];

Proposed Particular C to [245];

Proposed Particular D to [245] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed amendment to [245B(b)];

Proposed amendment to [245B(c)];

Proposed Particular A to [245B];

The first sentence of Proposed Particular B to [245B], Proposed Particular C to [245B], Proposed Particular D to [245B];

Proposed amendment to [267(i)];

Proposed amendment to Particular C to [267];

Proposed Particular D to [267] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed particular E to [267];

Proposed amendments to [267(b)] and [267(c)];

Proposed particular A to [267B];

First sentence of proposed particular B to [267B];

Proposed particulars C and D to [267B];

Proposed amendment to [288(b)];

Proposed amendment to [288(h)];

Proposed amendment to Particular C to [288];

Proposed amendment to Particular D to [288] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed amendment to Particular E to [288] other than the words “simulation in Christensen Report, Chapter X, [1703] - [1805] as modified by”;

Proposed amendments to [288(b)], [288(c)] and [288(f)];

Proposed particular A to [288B];

First sentence of proposed Particular B to [288B];

Proposed particulars C and D to [288B];

Proposed amendments to [307(b)], [307(c)] and [307(h)];

Proposed amendment to Particular C to [307];

Proposed Particular D to [307] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed Particular E to [307];

Proposed amendment to 307B(b), [307B(c)], [307(f)];

Proposed particular A to [307B];

First sentence of proposed particular B to [307B];

Proposed particulars C and D to [307B];

Proposed amendments to [339(b)] and [339(e)];

Proposed amendment to [339(j)];

Proposed amendment to Particular C to [339];

Proposed Particular D and E to [339B] other than the words “the simulation in Christensen report, Chapter X [1194] - [1250], as modified by the simulation in Christensen Supplemental Report, Chapter VI, [153] - [267] as modified by”;

Proposed amendment to [339B(b)], [339B(c)], [339B(f)];

Proposed amendment to [339B(h)] to substitute “104.42” for “104.39” and “72.19” for “72.47”;

Proposed particular J to [339B];

The first sentence of proposed Particular K to [339B];

Proposed particulars L and M to [339B];

ANNEXURE C - REFUSED

Proposed Particular F to [211]; Proposed amendment to [211B(d)]; Proposed [211B(e)]; Proposed particular E to [211B]; Proposed particular F to [228]; Proposed amendment to [228B(d)]; Proposed [228(e)]; Proposed particular E to [228B]; Proposed particular F to [245]; Proposed [245B(g)]; Proposed particular E to [245B]; Proposed particular F to [267]; proposed [267B(h)]; proposed particular E to [267B]; proposed amendment to [288B(i)]; Proposed particular E to [288B]; Proposed particular F to [307]; proposed amendment to [307B(i)]; proposed amendment to [307B(j)]; Proposed particular E to [307B]; Proposed particular F to [339]; Proposed amendment to [339B(h)] to add words “and; or in the alternative”; Proposed [339B(i)]; Proposed particular N to [339B]

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Endnotes

Decision last updated: 23 August 2017

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