SA Power Networks v D&v Services P/L - [2017] SADC 68

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SA POWER NETWORKS v D&V SERVICES P/L
[2017] SADC 68
Judgment of His Honour Judge Chivell
4 July 2017
TORTS - NEGLIGENCE - DANGEROUS AND INJURIOUS THINGS, ETC - BREACH OF DUTY OF CARE
Defendant company employee unearthed and damaged a high voltage cable while performing demolition and remediation work using an excavator. Plaintiff maintained that the defendant owed a duty of care to the plaintiff to take sufficient precautions to ascertain the exact whereabouts of the cable before commencing work. Whether the precautions taken by the defendant's manager were those that a reasonable person in his position would have taken as a precaution against damaging the cable.
Held: Defendant in breach of its duty of care to the plaintiff, and therefore liable in negligence.
Civil Liability Act 1936 (SA) s 31, s 32; Roads and Traffic Authority of New South Wales v Dederer (2007) 234 CLR 330; Wyong Shire Council v Shirt (1980)146 CLR 40; New South Wales v Fahy (2007) 232 CLR 486; Vairy v Wyong Shire Council (2005) 223 CLR 422, referred to.

INTEREST - RECOVERABILITY OF INTEREST
Quantum of damages agreed at $219,474.40. Defendant asserted that only part of that sum constituted a loss which would attract interest and that the remainder constituted fixed costs that would have been incurred in any event.
Held: Defendant, by agreeing the quantum of damage, agrees that the plaintiff has lost that amount. Plaintiff is entitled to interest on the entire amount, fixed at $79,010.78.

SA POWER NETWORKS v D&V SERVICES P/L
[2017] SADC 68

On 9 March 2011, an employee of D&V Services Pty Ltd unearthed a high voltage cable while performing demolition and remediation work at Edinburgh Parks, South Australia. The cable was the property of SA Power Networks.
The cost of repairing the damage was $219,474.40. D&V Services does not dispute this figure.
The issue in this trial is whether D&V Services should pay that amount to SA Power Networks. SA Power Networks says it should because by digging up the cable, it breached its duty to take precautions against the risk of harm created by its excavation activities.
There is no doubt that the degree of risk involved in D&V Services’ activities was very high. Its managers acknowledge that they were aware that there was a high voltage cable buried underground in the general vicinity.[1] In fact, the cable dealt with a potential difference of ‘11 kV’, or 11,000 volts. Such a voltage could kill a person if he or she was unprotected from the current it would produce if the cable was breached.[2]
[1] T 204.
[2] Evidence of Mr Lukosius at T 33.
As it was, the operator of the 30-tonne excavator which breached the cable escaped harm because the breach caused a nearby earth leakage detector to trip.
Negligence
Section 31(1) of the Civil Liability Act 1936 (SA) prescribes the relevant standard of care:
31—Standard of care
(1) For determining whether a person (the defendant) was negligent, the standard of care required of the defendant is that of a reasonable person in the defendant's position who was in possession of all information that the defendant either had, or ought reasonably to have had, at the time of the incident out of which the harm arose.
Section 32 prescribes the extent of the duty to take precautions against a risk of harm:
32—Precautions against risk
(1) A person is not negligent in failing to take precautions against a risk of harm unless—
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and
(b) the risk was not insignificant; and
(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):
(a) the probability that the harm would occur if precautions were not taken;
(b) the likely seriousness of the harm;
(c) the burden of taking precautions to avoid the risk of harm;
(d) the social utility of the activity that creates the risk of harm.
As defined, the test of whether there has been a breach of the duty established by the Act is objective. The question is whether a reasonable person in the defendant’s position would have taken the precautions suggested. The actual state of mind of the defendant, or its representatives, is irrelevant.
The principles to be applied were summarised by Gummow J in Roads and Traffic Authority of New South Wales v Dederer:[3]
These principles may be restated shortly. First, the proper resolution of an action in negligence depends on the existence and scope of the relevant duty of care. Secondly, whatever its scope, a duty of care imposes an obligation to exercise reasonable care; it does not impose a duty to prevent potentially harmful conduct. Thirdly, the assessment of breach depends on the correct identification of the relevant risk of injury. Fourthly, breach must be assessed prospectively and not retrospectively. Fifthly, such an assessment of breach must be made in the manner described by Mason J in Wyong Shire Council v Shirt.[4]
[3] (2007) 234 CLR 330 at [18].
[4] (1980) 146 CLR 40 at 47-8.
The principles enunciated by Mason J in Wyong Shire Council v Shirt are now embodied in s 32(2) quoted above. However, the remarks of Mason J in that case explain the relevant considerations in greater detail:
In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant’s position.
The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors.
Finally, Gummow and Hayne JJ in New South Wales v Fahy said:[5]
In Vairy v Wyong Shire Council[6], it was explained why it is wrong to focus exclusively upon the way in which the particular injury of which a plaintiff complains came about. In Vairy, it was said[7] that:
"[T]he apparent precision of investigations into what happened to the particular plaintiff must not be permitted to obscure the nature of the questions that are presented in connection with the inquiry into breach of duty. In particular, the examination of the causes of an accident that has happened cannot be equated with the examination that is to be undertaken when asking whether there was a breach of a duty of care which was a cause of the plaintiff's injuries. The inquiry into the causes of an accident is wholly retrospective. It seeks to identify what happened and why. The inquiry into breach, although made after the accident, must attempt to answer what response a reasonable person, confronted with a foreseeable risk of injury, would have made to that risk. And one of the possible answers to that inquiry must be 'nothing'."
It is only if the examination of breach focuses upon "what a reasonable man would do by way of response to the risk"[8] (emphasis added) that it is sensible to consider "the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have"[9].
[5] (2007) 232 CLR 486 at 505-6.
[6] (2005) 223 CLR 422.
[7]    At 461 [124] per Hayne J; see also at 443 [60]‑[61] per Gummow J.
[8]    Shirt at 47.
[9]    Shirt at 47‑48.
Mr Vlado Turic is a director of D&V Services and was project manager for the particular job. His evidence, in summary, was that:
·he has been working in the demolition/remediation industry since 1986, and as a principal in D&V Services since the mid-1990s;
·he had a diagram of the works to be performed[10] which had been supplied by the principal contractor, Spotless;
·indicated on that diagram was the fire service water pipe, parts of which were to be excavated and removed;
·he also had a copy of Exhibit P2, which he described as the ‘Dial before you Dig’ plan – it was a requirement of D&V Services’ contract with Spotless[11] that they obtain such a plan, but he obtained his copy from ‘Simon’, an employee of Australasian Constructions, one of their subcontractors.[12] The plan was dated 30 November 2010. The plan was to a scale of 1 cm:18 metres;
·he took all his measurements from this plan;[13]
·he worked from a line on the plan he described as the ‘fence line’;[14]
·he took the red line on the plan as indicating the presence of an ‘HV’ (high voltage) cable;
·the fire service water pipe was indicated by the presence of ‘upstands’ (vertical pipes coming from the main);
·having regard to the scale on the drawing, he measured with a ruler and concluded that the HV cable was 5.4 metres from the ‘fence line’ (he measured 3 millimetres on the plan and multiplied by 1.8 to get the distance in metres. He initially said it was 5.2 metres but I accept that this was a slip – it would have been impossible to measure 2.9 millimetres on the plan with a ruler); and
·he did not tell Mr Dawson, the excavator operator, of the presence of the HV cable. He said:[15]
I didn't have to. I didn't think it was a problem … I knew it was a safe distance away.
[10] Exhibit D7.
[11] See Exhibit P1, Tab 4, Attachment 3, p 74.
[12] T 201.
[13] T 203.
[14] T 205.
[15] T 207-8.
It was the plaintiff’s evidence that there was no requirement stipulated by its guidelines[16] to ‘Dial before you Dig’ if the excavation was being carried out more than three metres from a cable. The evidence of Mr Lukosius was:[17]
Q.   Also if you are undertaking any digging outside of 3000 mm or 3 m, again there's no restrictions on you.
A.   That's correct.
Q.   There are however restrictions placed upon you by SA Power Networks if you're working inside 3 m.
A.   Yeah.
[16] See for example Exhibit P1, Tab 19, p 5 of 7.
[17] T 54.
Mr Turic’s evidence demonstrates that:
·the lines on the diagram Exhibit P2 indicate the boundary line of the particular parcel of land, as indicated in the maps held at the Lands Titles Office. They do not necessarily indicate the fence line. So Mr Turic’s measurements were not necessarily from the boundary line on the diagram. There is a significant possibility of error;
·there was no fence line drawn on the diagram Exhibit P2 in the particular area of the excavation. Mr Turic’s measurement was based upon the accuracy of a line he drew on the diagram which was a continuation of the northern boundary of the land. The map he used with the line drawn upon it is not before the court. There is no means of verifying that the line was drawn accurately, or was fine enough to allow an accurate measurement. This gives rise to a possibility of further error;
·the photographs[18] indicate that Mr Dawson was excavating about one metre south of the northern fence line;
·Mr Dawson was using a bucket on the excavator which was 1.2 metres wide;
·if the northern-most part of the bucket was digging one metre south of the northern fence line, then the southern-most portion of the bucket was operating, even on Mr Turic’s estimate, no more than, and quite possibly less than, three metres from the cable; and
·had Mr Turic obtained a map from the ‘Dial before you Dig’ organisation, as he was contractually required to do, he would also have received a copy of a covering letter[19] containing a warning, or disclaimer, that the drawings were ‘indicative only’, which expression Mr Turic understood to mean ‘thereabouts’.[20] So the line indicating the presence of the HV cable should not have been regarded as perfectly accurate, as he has done.
[18] Exhibit P1, Tab 12.
[19] An example of such a letter is in Exhibit P1 at Tab 16.
[20] T 251.
In all these circumstances, a reasonable person in Mr Turic’s position should have been in possession of information that the diagram from which he was working was ‘indicative only’, and that it could not be relied upon as being perfectly accurate. A reasonable person would have realised that there was a substantial risk that the excavator was working within three metres of the HV cable. A reasonable person would have foreseen a significant risk that the cable would be damaged, and that harm might result.
I consider that a reasonable person in Mr Turic’s position would have taken further precautions to ensure that he knew precisely where the cable was before he directed Mr Dawson to commence excavating. Those precautions would have included:
·warning Mr Dawson of the possible presence of the cable;
·engaging a contractor to locate the cable, either by using an ultrasound scanner, or by use of the technique known as ‘pot-holing’ (moistening the soil and using a strong vacuum to excavate over the cable);
·notifying the plaintiff and requesting an on-site inspection and location of the cable; and
·after locating the cable, manual excavation using a special blunt-nosed shovel to expose the cable.
None of these precautions would have placed a heavy burden on the defendant, particularly in proportion to the seriousness of the harm which might have resulted from a breach of the cable.
For those reasons, I conclude that the defendant was in breach of its duty of care to the plaintiff to take reasonable precautions against damaging its cable. It is therefore liable in negligence to the plaintiff.
Damages and Interest
The quantum of damage is agreed as $219,474.40. I award damages to the plaintiff in that amount.
The plaintiff seeks interest on that amount. The defendant objects that it has not been shown that the plaintiff has lost that amount. It concedes only that the plaintiff’s payments to third party contractors ($37,000) constitute a loss. As to the other ‘fixed’ costs (such as labour, materials, vehicle costs and the like), the defendant argues that there is no evidence that the plaintiff would not have incurred those costs in any event.
I reject those submissions. The defendant, by agreeing the quantum of damage, agrees that the plaintiff has lost that amount. I do not need proof of the financial situation of the plaintiff to conclude that, had the incident not occurred, the plaintiff’s profits would have been higher by that amount, or its losses would have been lower by the same margin. This is so whether the plaintiff is a private or a public enterprise.
The plaintiff is entitled to interest on the entire amount. I allow interest at the rate of 6% for six years in the sum of $79,010.78.
I will hear the parties as to costs.